There are two firms in an economy. Firm A gives Rs. 20 to the workers as wages, and keeps the remaining 30 as its profits. Similarly, firm B gives 60 as wages and keeps 90 as profits. Calculate GDP?

Rs. 200

The correct answer is Option (1) → Rs. 200

To find GDP (at factor cost), we add up all factor incomes — i.e., wages + profits.

1. Calculate Total Wages:

• Firm A Wages: Rs. 20

• Firm B Wages: Rs. 60

• Total Wages = Rs. $20+\text{Rs. }60=\text{Rs. }80$

2. Calculate Total Profits (Operating Surplus):

• Firm A Profits: Rs. 30

• Firm B Profits: Rs. 90

• Total Profits = Rs. $30+\text{Rs. }90=\text{Rs. }120$

3. Calculate GDP (using the Income Method):

• $\text{GDP}=\text{Total Wages}+\text{Total Profits}$

• $\text{GDP}=\text{Rs. }80+\text{Rs. }120$

• $\text{GDP}=\text{Rs. }200$