Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following best describes the term "Production" in economics?

Options:

Process of converting inputs into outputs

Which increases the value of intermediate consumption

Activity which results in value addition

All of the above

Correct Answer:

All of the above

Explanation:

Production is generally defined as an activity which produces physical goods and services or increase the value of intermediate consumption by converting the inputs into outputs. In other words, we can say it adds some value.

Example: Buying rice for Rs. 200/kg and selling rice flour at Rs 250/kg ( Value addition has taken place)