Question 1

Which of the following is not included in national income?

Accepted Answer

c) Transfer payments

Answer

d) Profits

Answer

b) Rent

Answer

a) Salaries of employees

Question 2

GDP at market prices is equal to:

Accepted Answer

a) GNP at market prices - Net factor income from abroad

Answer

c) NNP at factor cost + Depreciation

Answer

b) NNP at factor cost + Indirect taxes - Subsidies

Answer

d) GNP at market prices + Net factor income from abroad

Question 3

Which method of calculating national income involves adding up all the incomes earned by factors of production?

Accepted Answer

b) Income method

Answer

d) Value-added method

Answer

c) Production method

Answer

a) Expenditure method

Question 4

Which of the following is included in the calculation of national income?

Accepted Answer

c) Salary of government employees

Answer

b) Household labor

Answer

d) Environmental degradation

Answer

a) Black market transactions

Question 5

GDP at market prices is calculated as:

Accepted Answer

a) GDP at factor cost + Net indirect taxes

Answer

d) NDP at factor cost + Depreciation

Answer

c) NDP at market prices + Net exports

Answer

GNP at factor cost - Net indirect taxes

Question 6

Which of the following is not a component of Gross Domestic Product (GDP)?

Accepted Answer

d) Transfer payments

Answer

b) Investment expenditure

Answer

a) Consumption expenditure

Answer

c) Government expenditure

Question 7

Net National Product (NNP) at market prices is:

Accepted Answer

b) GNP at market prices - Depreciation

Answer

a) GDP at market prices - Depreciation

Answer

d) GNP at factor cost + Depreciation

Answer

c) NDP at market prices + Net factor income from abroad

Question 8

Which method of measuring national income involves summing up all incomes earned by factors of production?

Accepted Answer

b) Income method

Answer

d) Value added method

Answer

c) Expenditure method

Answer

a) Product method

Question 9

Real GDP is adjusted for:

Accepted Answer

b) Inflation

Answer

a) Population growth

Answer

c) Unemployment rate

Answer

d) Exchange rate

Question 10

Which of the following is considered as part of the informal economy?

Accepted Answer

b) Black market activities

Answer

a) Corporate profits

Answer

d) Imports and exports

Answer

c) Government spending

Question 11

Personal income is:

Accepted Answer

a) National income - Undistributed corporate profits - Corporate taxes - Social security contributions

Answer

c) National income + Transfer payments

Answer

b) National income - Personal taxes

Answer

d) National income - Net indirect taxes

Question 12

If the GDP deflator is greater than 100, it indicates:

Accepted Answer

c) Inflation

Answer

d) Economic growth

Answer

a) Deflation

Answer

b) Economic recession

Question 13

National income at factor cost is equal to:

Accepted Answer

b) National income at market prices - Net indirect taxes

Answer

d) National income at market prices + Subsidies

Answer

c) National income at market prices - Subsidies

Answer

a) National income at market prices + Net indirect taxes

Question 14

Which of the following is included in the calculation of Gross National Product (GNP)?

Accepted Answer

b) Income earned by residents abroad

Answer

a) Income earned by foreigners in the country

Answer

d) Imports

Answer

c) Exports

Question 15

Disposable personal income is:

Accepted Answer

a) Personal income - Personal taxes

Answer

d) Personal income - Savings

Answer

b) Personal income + Transfer payments

Answer

c) Personal income - Corporate taxes

Question 16

Net Domestic Product (NDP) is:

Accepted Answer

b) GDP - Depreciation

Answer

c) GNP - Depreciation

Answer

a) GDP - Net factor income from abroad

Answer

d) GNP - Net factor income from abroad

Question 17

Which of the following is not included in national income?

Accepted Answer

d) Transfer payments

Answer

b) Rent received by landlords

Answer

c) Wages of workers

Answer

a) Salaries of public servants

Question 18

Which of the following is a flow concept?

Accepted Answer

c) National income

Answer

b) Capital

Answer

d) Savings

Answer

a) Wealth

Question 19

The difference between Gross National Product (GNP) and Gross Domestic Product (GDP) is:

Accepted Answer

c) Net factor income from abroad

Answer

b) Depreciation

Answer

d) Transfer payments

Answer

a) Net exports

Question 20

Which of the following measures the average level of prices of goods and services in an economy?

Accepted Answer

b) Consumer Price Index (CPI)

Answer

d) Wholesale Price Index (WPI)

Answer

c) Producer Price Index (PPI)

Answer

a) GDP deflator

Question 21

Which of the following is an example of a stock variable?

Accepted Answer

c) Wealth

Answer

a) GDP

Answer

b) National income

Answer

d) Consumption

Question 22

Net factor income from abroad is the difference between:

Accepted Answer

c) Income received from abroad and income paid abroad

Answer

a) Imports and exports

Answer

b) National income and domestic income

Question 23

Which of the following statements is true?

Accepted Answer

d) Real GDP is calculated using base year prices.

Answer

c) Nominal GDP is adjusted for inflation.

Answer

a) Nominal GDP is always higher than Real GDP.

Answer

b) Real GDP is calculated using current year prices.

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