Practice Test

Q1) _________ income data represents the contribution made by different sectors. Show Answer

Q2) Gifts and Pensions are called as ________ income. Show Answer

Q3) While estimating the G.N.P., double ________ should be avoided. Show Answer

Q4) N.I at ________ price is measured with the price level of the base year. Show Answer

Q5) National income is a _________ concept. Show Answer

Q6) N.N.P. at ________ cost is realized as the real national income. Show Answer

Q7) Value of the services of house wives are _________ in National Income. Show Answer

Q8) Rental value of the self-occupied house is _________ NI. Show Answer

Q9) Direct taxes should be __________ for the estimation of NI. Show Answer

Q10) Indirect taxes should be ___________ for the estimation of NI. Show Answer

Q11) In the estimation of NI, the value of goods kept for self-consumption should be _______. Show Answer

Q12) While estimating NI, an investment in shares should be ________. Show Answer

Q13) While estimating NI, the profits of Public Enterprises should be ________. Show Answer

Q14) While estimating NI, unpaid services or transfer incomes should be ________. Show Answer

Q15) In India, income method or factor cost method is used for __________ sector. Show Answer

Q16) The value added at each stage is added up in the ________ method. Show Answer

Q17) _________ method estimates NI with reference to aggregate expenditure of a country. Show Answer

Q18) _________ refers to the wear and tear of its capital equipments. Show Answer

Q19) GNP = _________ + Depreciation. Show Answer

Q20) While estimating NI, the net income from abroad should be __________. Show Answer

Q21) National income is the study of _______ economics. Show Answer

Q22) GNP and GDP are _________. Show Answer

Q23) GNP - Depreciation we get ________. Show Answer

Q24) To obtain National income _________ taxes should be included. Show Answer

Q25) Expenditure method is ________ used to calculate National Income. Show Answer

Q26) ______ method is commonly used in USA. Show Answer

Q27) _________ approach gives more reliable data of National Income. Show Answer

Q28) _______ income is excluded in the calculation of National Income. Show Answer

Q29) As national income increases, consumption also increases but at ______ rate. Show Answer

Q30) At the ______ point national income is equal to consumption. Show Answer

Q31) When consumption expenditure is _______ than national income there is dis-saving. Show Answer

Q32) In national expenditure, we include the expenditure on final demand for goods and services which generate _________ in the economy. Show Answer

Q33) Only final expenditure is taken into account to aviod ________ counting. Show Answer

Q34) National income at _______ price is mesured with the price level of the base year. Show Answer

Q35) Income method is also known as ______ method. Show Answer

Q36) _______ method of estimating national income is more popular in developed countries. Show Answer

Q37) National income is measured _________. Show Answer

Q38) GNP is equal to ________. Show Answer

Q39) NNP at market price = GNP - ________. Show Answer

Q40) ________ income is excluded in the calculation of national income. Show Answer

Q41) _______ approach gives more reliable data of national income. Show Answer

Q42) National income at factor cost does not include _______. Show Answer

Q43) National income at market price does not include _________. Show Answer

Q44) If exports exceed imports, the net income from abroad is _________. Show Answer

Q45) National income measured at constant price is with reference to ________. Show Answer

Q46) If imports exceeds exports, the net income from abroad is _________. Show Answer

Q47) Marshall and Pigou adopted 'production' as the basis of estimation of National Income. Show Answer

Q48) Irving Fisher's definition of NI adopted 'consumption' as the basis for its estimation. Show Answer

Q49) Depreciation is also considered as the capital consumption. Show Answer

Q50) NI at market price includes indirect taxes. Show Answer

Q51) NI at constant prices is estimated on the basis of base year prices. Show Answer

Q52) There is no chances of double counting while estimating the NI. Show Answer

Q53) NNP includes depreciation cost. Show Answer

Q54) Subsidies increase the price of a product in the market. Show Answer

Q55) Expenditure method is the most popular method of estimating NI in India. Show Answer

Q56) GNP is always greater than GDP. Show Answer

Q57) NI is a concept of micro-economics. Show Answer

Q58) Income from theft, smugglers, pickpocketers should be included in NI. Show Answer

Q59) Transfer payments should not be included in NI. Show Answer

Q60) Unpaid services should be included in NI. Show Answer

Q61) Wrongly matched pair: (a) National Income Committee - 1949 (b) Financial year - 1st April to 31st March (c) Income method - National Income = Rent + Wages + Interest + Profit + Mixed income + Net Income from abroad (d) Expenditure method - National Income = Rent + Wages + Interest + Profit Show Answer

Q62) At present National Income estimation is done by _______. (a) Central Statistical Organization (b)Finance Department (c) National Income Committee (d) Reserve Bank of India Show Answer

Q63) National Income is the subject matter of ________ economics. Show Answer

Q64) National Income is a _______ concept. (a) static (b) final (c) flow (d) reserve Show Answer

Q65) The members of National Income Committee in 1949 were - Show Answer

Q66) According to National Income Committee, NI is ________. (a) volume of goods and services (b) produce in one year (c) goods and services counted without duplication (d) all of these Show Answer

Q67) Statements incorrect with reference to A.C.Pigou definition - (a) National income means national dividend (b) Objective income of the community (c) Income from abroad does not include (d) Income from abroad in money term Show Answer

Q68) While measuring National Income value of ________. (a) all goods and services are considered (b) Final goods and services are considered (c) only intermediate goods are considered (d) none of these Show Answer

Q69) Net income from abroad includes - (a) Difference between export value and import value (X - M) (b) Difference between receipts and payments made abroad (R - P) (c) Difference between value of raw material and final goods (d) None of these Show Answer

Q70) Three sector economy consists of _______. (a) households, business firms and industries (b) households, business firms and government sector (c) households, government and foreign sector (d) all of these Show Answer

Q71) Which of the following is included in four sector economy? (a) Households, firms, industries and government (b) Household, government, firms and organisation (c) Household and firms (d) Household, business firms, government, foreign sector Show Answer

Q72) GDP (Gross Domestic Product) = (a) C + I + G + (X - M) (b) C + I + G + (R - P) (c) GDP - depreciation (d) GNP - depreciation Show Answer

Q73) GNP = C + I + G + (X - M) + (R - P), R and P represents ________. (a) R - receipts from firm (b) R - receipts from abroad (c) P - payments made abroad (d) P - payments to government Show Answer

Q74) Green Gross National Product (GNP) includes - (a) Sustainable economic development (b) Equitable distribution of benefits (c) Promotes economic welfare (d) All of these Show Answer

Q75) Value added approach is the difference between the value of _______. (a) Export and import (b) Receipts and payment (c) Inputs and final output (d) None of these Show Answer

Q76) Income method of measuring national income is the sum of _______. (a) Rent and profit (b) Rent + Wages + Interest + Profit + MI + (X - M) (c) C + I + G + (X - M) (d) Interest + Wages Show Answer

Q77) Transfer income includes _______. (a) pensions and scholarships (b) gifts and donations (c) donations and unemployment allowance (d) all of these Show Answer

Q78) While estimating National Income by income method the following precautions should be taken - (a) transfer income should be ignored (b) all unpaid services should be ignored (c) income from sale of second hand goods should be ignored (d) undistributed profits should be ignored. Show Answer

Q79) In advance countries like USA and UK the _______ method of measuring NI is popular. (a) Output Method / Product Method (b) Income method / Factor Cost Method (c) Expenditure Method / Outlay method (d) None of these Show Answer

Q80) Mixed Income (MI) refers to the income of ________. (a) Private and public sector (b) Self-employed persons (c) Sale of second hand goods (d) All of these Show Answer

Q81) There are many theoretical difficulties in the measurement of NI like - (a) Transfer Payment (b) Illegal Income (c) Unpaid services (d) All of these Show Answer

Q82) There are many practical difficulties in the measurement of NI like - (a) problem of double counting (b) existence of non-monetize sector (c) inadequate and unreliable data (d) none of these Show Answer

Q83) National income is extremely useful for _______. (a) formulating national policies on employment, industry, etc. (b) economic planning (c) distribution of income (d) all of these Show Answer

Q84) National income is a composite measure of:
i. Production
ii. Exchange
iii. Distribution
iv. Consumption Show Answer

Q85) The National Income Committee was appointed by the GOI in August 1949 with:
i. Prof. P. C. Mahalanobis
ii. Prof. D. R. Gadgil
iii. Dr. V. K. R. V. Rao
iv. Prof. A. C. Pigou Show Answer

To avoid double counting, the value of:
i. final goods and services is considered
ii. raw materials is not considered
iii. final goods and services is not considered
iv. final and intermediate goods is considered Show Answer

In two sector economy, factors of production flow from:
i. households to firms
ii. firms to households
iii. households to government
iv. households to foreign sector Show Answer

Q88) Identify the correct equation.
i. GDP = C + I + G + (X - M)
ii. NDP = GDP + Depreciation
iii. GNP - C + i + G + (X - M) + (R - P)
iv. NNP = GNP + Depreciation Show Answer

Q89) GNP does not consider the cost resulting from productive activities in terms of:
i. environmental pollution
ii. depletion of natural resources
iii. inputs
iv. raw materials Show Answer

Q90) Output method suggests these approaches for the measurement of GNP:
i. Final Goods Approach
ii. Value Added Approach
iii. Income Approach
iv. Expenditure Approach Show Answer

Q91) The output method considers the value of following while measuring national income:
i. Final goods and services
ii. Goods for self-consumption
iii. Depreciation
iv. Second hand goods Show Answer

Q92) In India, National Income Committee uses the income method for adding up the income arising from:
i. Agriculture
ii. Transport
iii. Professional and liberal arts
iv. Public administration Show Answer

Private Final Consumption Expenditure (C) by households includes expenditure on:
i. Non-durable goods
ii. Durable goods
iii. Services
iv. Taxes and subsidies Show Answer

Q94) Government’s investment expenditure refers to the expenditure on:
i. roads
ii. bridges
iii. dams
iv. salary of government employees Show Answer

Q95) Income method of measurement of national income takes into consideration:
i. Revenue from direct tax
ii. Undistributed profits of companies
iii. income from government property
iv. Unpaid services Show Answer

Q96) Expenditure method of national income measurement:
i. Ignores intermediate goods
ii. Ignores repurchase of financial assets
iii. Deducts indirect taxes and adds subsidies
iv. Considers second hand goods Show Answer

Q97) Identify the practical difficulties in the measurement of national income.
i. Valuation of government services
ii. Changing price levels
iii. Valuation of inventories
iv. Existence of non-monetized sector Show Answer

Assertion (A): Every country expresses national income in monetary terms.
Reasoning (R): Modern economy is a money economy. Show Answer

Q99) Assertion (A): National income is a stock concept.
Reasoning (R): National income shows the flow of goods and services produced during a year. Show Answer

Q100) Assertion (A): In two sector economy, money flows from firms to households and then from households back to firms.
Reasoning (R): There are two sectors in a two sectors economy i.e. household and firms. Show Answer

Q101) Assertion (A): Revenue received by the government through direct taxes is considered in income method.
Reasoning (R): Direct taxes is a transfer of income. Show Answer

Q102) Assertion (A): Sale and purchase of second hand goods is ignored in output method.
Reasoning (R): Second hand transactions are not a part of the current production. Show Answer

Q103) Assertion (A): Income from the sale of shares and bonds is ignored in income method.
Reasoning (R): The sale of shares and bonds lead to additions in real national income. Show Answer

Q104) Assertion (A): Expenditure on financial assets such as shares, bonds, debentures etc. is not included in calculation of national income under expenditure method.
Reasoning (R): Such transactions add to the flow of goods and services. Show Answer

Q105) Assertion (A): Production for self-consumption is not accounted for in the national income.
Reasoning (R): The products kept for self-consumption do not enter the market. Show Answer

Q106) Assertion (A): Small producers are not able to give accurate information about quantity of their output.
Reasoning (R): Due to ignorance, small producers do not keep account of their production. Show Answer

Q107) Assertion (A): The valuation of inventories requires careful assessment.
Reasoning (R): A mistake in measuring inventory will impact the value of intermediate goods. Show Answer

Q108) National income is one of the important subject matter of ___________. Show Answer

Q109) In India, establishment of ___________ marked the beginning of government’s efforts to regularly compile national income estimates. Show Answer

Q110) At present, ____________ compiles and publishes data on national income and allied aggregates every year. Show Answer

Q111) National income is a ___________ concept. Show Answer

Q112) In diagram for circular flow of income in two sector economy, the upper half represents the __________ market. Show Answer

Q113) In two sector economy, __________ flows from firms to households in the form of factor payments. Show Answer

Q114) NNP refers to the net market value of all final goods and services produced by the _________ of a country, during a period of one year. Show Answer

Q115) _________ = GNP - (Net fall in stock of natural capital + pollution load) Show Answer

Q116) Output method is widely used in the __________ countries. Show Answer

Q117) The value of final output includes the value of __________ products. Show Answer

Q118) __________ = Value of final output - Value of input. Show Answer

Q119) ____________ method is rarely used by any country because of practical difficulties. Show Answer

Q120) According to ___________, income of a foreign firm should be included in the Nl of the country in which the firm undertakes the production. Show Answer

Q121) The greatest difficulty in calculating national income is of __________. Show Answer

Q122) In present times, the national income data are regarded as accounts of the economy, which are known as __________ Accounts. Show Answer