NATIONAL INCOME MCQ

1. Which of the following is a method to measure the National Income?

a. Expenditure method
b. Income method
c. Product method
d. All of the above

Answer:

2. Which of the following is the correct term for calculating National Income at the market
prices?
a. Money income
b. Non-monetary income
c. Real income
d. None of the above

Answer:

3. Which of the following is the correct term for calculating National Income at constant
prices?
a. Current income
b. Domestic income
c. Real income
d. None of the above

Answer:

4. Which of the following items are not included while measuring the Gross National Product?
a. Illegal and leisure activities
b. Purely financial transactions
c. Transferring of used goods and non-market goods and services
d. All of the above

Answer:

5. Which of the following is the employment theory related to?

a. Macroeconomics
b. Static economics
c. Microeconomics
d. None of the above

Answer:

6. Which of the following is the actual definition of transfer payments?

a. Transfer payments refer to the payments made as compensation to the employees within
an organisation
 b. Transfer payments refer to the payments made to workers on transferring from one job to
another
c. Transfer payments refer to the payments made without any exchange of goods and
services
d. None of the above

Answer:

7. The difference between the National Income and the Net National Product at market price is
known as _______.
a. National debt transfer
b. Current transfers from the rest of the world
c. Net indirect taxes
d. All of the above

Answer:

8. Which of the following is not a part of the National Income?

a. Undistributed profits
b. Income from government expenditure
c. The interest amount on the unproductive national debt
d. The payments made by a household to a firm for purchasing goods and services

Answer:

9. Which of the following is another term for the Net National Product at factor cost?
a. Personal Income
b. National Income
c. Gross National Product
d. Net Domestic Product

Answer:

10. Which of the following is true for Disposable Income?

a. Disposable Income is the difference between Private Income and Indirect Taxes
b. Disposable Income is the difference between Personal Income and Indirect Taxes
c. Disposable Income is the difference between Private Income and Direct Taxes
d. Disposable Income is the difference between Personal Income and Direct Taxes

Answer:

11. Which of the following organisations calculate the Gross Domestic Product in India?
a. Reserve Bank of India
b. Indian Statistical Institute
c. National Statistical Office
d. None of the above

Answer:

12. Which of the following is the correct definition for the Gross Domestic Product (GDP) of a
country?
 a. The Gross Domestic Product is the total monetary value of the economic transactions
within a country in a given year
b. The Gross Domestic Product is the total value of both monetary and non-monetary goods
and services in a country within a given year
c. The Gross Domestic Product is the total value of tradable goods produced in a country
within a given year
d. None of the above

Answer:

13. Which of the following is true for Inflation?

a. The value of money increases during Inflation
b. The value of money decreases during Inflation
c. The value of money stays the same during Inflation
d. None of the above

Answer:

14. Which of the following is true for Net National Income?

a. The Net National Income is the total of Gross National Product and Depreciation
b. The Net National Income is the difference between Gross National Product and
Depreciation
c. The Net National Income is the difference between Gross Domestic Product and
Depreciation
d. The Net National Income is the difference between Net Domestic Product and
Depreciation

Answer:

15. Which of the following is true for the National Income of a country?
a. If the savings exceed the investment within a country, the National Income will rise
b. If the savings exceed the investment within a country, the National Income will fall
c. If the savings exceed the investment within a country, the National Income will fluctuate
d. If the savings exceed the investment within a country, the National Income will remain
constant

Answer:

16. Which of the following is the definition of a closed economy?

a. A closed economy is a type of economy where the money supply is totally controlled by
the government
b. A closed economy is a type of economy where neither exports nor imports take place
c. A closed economy is a type of economy where deficit financing takes place
d. A closed economy is a type of economy where there are no exports to other countries

Answer:

17. Which of the following is not needed while considering the Gross National Product?
a. The net investment made by foreigners within a given period
b. The total of private investments made within a given period
c. The total purchase of goods made by the government within a given period
 d. The total per capita income of the citizens of a country within a given period

Answer:

18. The primary sector within a country for the calculation of National Income includes
__________.
a. Small scale industries
b. Retail trading
c. Agriculture
d. All of the above

Answer:

19. Which of the following is included in the National Income of a country?

a. Rent
b. Interest
c. Wages
d. Rent, Interest, Wages, Salary, Profits

Answer:

20. What is the consumption of Fixed Capital known as?

a. Depreciation
b. Capital Formation
c. Investment
d. All of the above

Answer:

Answers

1) D
2) A
3) C
4) D
5) A
6) C
7) C
8) C
9) B
10) D
11) C
12) D
13) B
14) B
15) D
16) B
17) D
18) D
19) D
20) A
2ND part

21)Question 1.
The subject of the Study of Macro Economics is:
(a) The Principle of National Income
(b) The Principle of Consumer
(c) The Principle of Producer
(d) None of these

22)Question 2.
Macro Economics Studies:
(a) Employment opportunities in economy
(b) Theory of supply of Commodities
(c) Elasticity of demand in Scooter
(d) Price of wheat in market

23)Question 3.
General Price Level is studied in:
(a) Micro Economics
(b) Macro Economics
(c) Both (a) and (b)
(d) None of these
24)Question 4.
Employment Theory is related to :
(a) Static Economics
(b) Micro Economics
(c) Macro Economics
(d) None of these

25)Question 5.
Increase in Stock of Capital is known as:
(a) Capital Loss
(b) Capital Profit
(c) Capital Formation
(d) None of these

26)Question 6.
Which of the following is sPktock ?
(a) Wealth
(b) Saving
(c) Export
(d) Profit

27)Question 7.
Which one of the following is included in circular flow ?
(a) Real Flow
(b) Money Flow
(c) Both (a) and (b)
(d) None of these

28)Question 8.
Which one of the following is included in ‘Stock’ ?
(a) Quantity of Money
(b) Wealth
(c) Quantity of wheat stored in warehouse
(d) All the above
29)Question 9.
Which one is included in flow ?
(a) Consumption
(b) Investment
(c) Income
(d) All of these

30)Question 10.
Which of the following is included in real flow ?
(a) Flow of Goods
(b) Flow of Services
(c) Both (a) and (b)
(d) None of these

31)Question 11.
Which services are provided by families to a firm ?
(a) Land
(b) Labour
(c) Capital and Enterprises
(d) All the above

32)Question 12.
Which one is included in three-sector model ?
(a) Family
(b) Firm
(c) Government
(d) All of these

33)Question 13.
Which one is included in four-sector model ?
(a) Family, Firm, Industry
(b) Family, Firm, Government
(c) Family, Firm, Government, Foreign Sector
(d) None of the above
34)Question 14.
Which is the equilibrium condition of circular flow in four sector
model ?
(a) C + I
(b) C + I + G
(c) C + I + G + (X-M)
(d) None of these

35)Question 15.
Primary sector includes:
(a) Agriculture
(b) Retail trading
(c) Small Industries
(d) All the these

36)Question 16.
For a four sector or open economy the condition for equilibrium is:
(a) Savings + taxes + Imports = Investment + govt, expenditure +
exports
(b) Total Leakages = Total Injections
(c) Aggregate output = Aggregate Expenditure
(d) All of these

37)Question 17.
Which service is included in Tertiary Sector ?
(a) Mining
(b) Construction
(c) Communication
(d) Animal Husbandary

38)Question 18.
Which of the following is not flow ?
(a) Capital
(b) Income
 (c) Investment
(d) Depreciation

39)Question 19.
The market price of all final goods of a country in a year is known as:
(a) GDPMP
(b) GDPFC
(c) NNPFC
(d) None of these

40)Question 20.
Which one is true ?
(a) GNP = GDP + Depreciation
(b) NNP = GNP + Depreciation
(c) NNP = GNP – Depreciation
(d) GNP = NNP – Depreciation

41)Question 21.
GNPMp =?
(a) GDPMp – Depreciation
(b) GDPMp + Net Factor Income from Abroad
(c) GNPMp + Subsidy
(d) None of the above

42)Question 22.
NNPMP = ?
(a) GNPMp – Depreciation
(b) GNPMp + Depreciation
(c) GNPMp + Indirect Tax
(d) None of the above

43)Question 23.
Depreciation expenses are included in:
(a) GNPMp
(b) NNPMp
(c) NNPFC
(d) None of these
44)Question 24.
NDPFC = ?
(a) NDPMP – Indirect Tax
(b) GNPMP – Indirect Tax + Subsidy
(c) NDPMP – Subsidy
(d) NDPMF – Depreciation

45)Question 25.
Net National Income at Factor Cost is called ?
(a) National Income
(b) Gross Investment
(c) Domestic Income
(d) None of these

46)Question 26.
Which one is included in National Income ?
(a) Rent, Wage, Interest
(b) Rent, Wage, Salary
(c) Rent, Profit, Interest
(d) Rent, Wage, Salary, Interest, Profit

47)Question 27.
What is consumption of fixed capital called ?
(a) Capital formation
(b) Depreciation
(c) Investment
(d) All of these

48)Question 28.
Which of the following is correct ?
(a) Disposable Income = Personal Income – Direct Taxes
(b) Disposable Income = Private Income – Direct Taxes
(c) Disposable Income = Personal Income – Indirect Taxes
(d) Disposable Income = Private Income – Indirect Taxes
49)Question 29.
If for a country net factor income from abroad is negative then:
(a) GDP < GNP
(b) GDP > GNP
(c) GDP ≥ GNP
(d) GDP = GNP

50)Question 30.
The market value of all final goods and services produced in an
economy over a year is called :
(a) Gross National Product
(b) National Income
(c) Gross Domestic Product
(d) Net National Product

51)Question 31.
Which method is adopted in measuring National Income ?
(a) Production Method
(b) Income Method
(c) Expenditure Method
(d) All of these

52)Question 32.
Which sector is included in an economy ?
(a) Primary
(b) Secondary
(c) Tertiary
(d) All of these

53)Question 33.
Which of the following is not included in the calculation of Gross
National Product ?
(a) Purchase and Sale of Old commodities
(b) Intermediate Commodities
(c) (a) and (b) both
(d) None of the above
54)Question 34.
Which one of the following services is included in Secondary Sector ?
(a) Insurance
(b) Manufacturing
(c) Trade
(d) Banking

55)Question 35.
Which one is included in Primary Sector ?
(a) Land
(b) Forest
(c) Mining
(d) All these

56)Question 36.
To include the value of goods or services more than one time while
calculating National Income is called :
(a) Single Counting
(b) Double Counting
(c) Multiple Counting
(d) None of these

57)Question 37.
Which one is a component of profit ?
(a) Dividend
(b) Undistributed Profit
(c) Corporate Profit Tax
(d) All of these

58)Question 38.
Which one is included in National Income ?
(a) Transfer Earnings
(b) Sale proceeds of Shares and Bonds
(c) Black Money
(d) None of the Above
59)Question 39.
Which one is included in the calculation of National Income ?
(a) New Final Goods and Services
(b) Earned Income of Indian Companies in Abroad
(c) Expenses made by Foreign Tourists in the country
(d) All the above

60)Question 40.
Which one is the limitation of Macro Economics ?
(a) Collective Economic Paradox
(b) Ignores Individual Units
(c) Both (a) and (b)
(d) None of these

61)Question 41.
Macro-economics is the study of:
(a) Principle or Theories of national income
(b) Consumer’s theory
(c) Production theory
(d) None of these.

62)Question 42.
Out of the following which is not a flow:
(a) Capital
(b) Income
(c) Investment
(d) Depreciation.

63)Question 43.
From the following which method is used for measuring national
income:
(a) Production method
(b) Income method
(c) Expenditure method
(d) All of the above.
 64)Question 44.
Which of the following is included in the primary sector:
(a) Land
(b) Forest
(c) Mines
(d) All of the above.

65)Question 45.
Total national income divided by total population is known as:
(a) Private income
(b) Personal income
(c) Personal spendable income
(d) Per capital income.

66)Question 46.
Production enterprises are divided in:
(a) Two sectors
(b) Three sectors
(c) Four sectors
(d) Five sectors.

Answers from question 21 to 66

21) a

22) a

23) b

24) c

25) c

26) a

27) c

28) d

29) b

30)c
31) d

32)d

33) c

34) c

35) d

36) d

37) c

38) a

39) a

40)c

41) b

42)a

43)a

44)b

45)a

46)d

47)b

48)a

49)b

50)c

51)d

52)d

53)c

54)b

55)d

56)b

57)d

58)d

59)d
60)c

61)a

62)a

63)d

64)d

65)d

66)b

PART 3

1. Select the right option which is used for measuring the National Income

A. Income Method
B. Product Method
C. Expenditure Method
D. All of the Above
2. Which organisation is accountable for calculating the Gross Domestic Product of
India?

A. Indian Statistical Institute

B. Reserve Bank of India
C. National Statistical Office
D. Ministry of Commerce and Industry
3. What is Gross Domestic Product?

A. The total value of the non-monetary and monetary services and goods within a
year
B. The total value of the economic transactions that happened in a country for a
year
C. The total value of the tradable goods which are produced in a particular year
D. None of the above
4. Which one of the following options is not an example of indirect tax?

A. Custom Duty
B. Estate Duty
C. Sales Tax
 D. Excise Duty
5. What happens during inflation?

A. The value of the money increases

B. The value of the money remains stable
C. The value of the money decreases
D. None of the above
6. Who measured the first National Income of India?

A. Dadabhai Naoroji
B. William Digboi
C. V.K.R.V. Rao
D. Professor P.C. Mahalanobis
7. Which of the following statements describes the National Income?

A. The budget introduced by the government

B. It is the total of various income factors
C. Profit of different units in the public sector
D. The income gained by the government
8. The short form of ITR associated with Income Tax stands for what?

A. Income Tax Return

B. Income Tax Revenue
C. Income Tax Result
D. Income tax Receipt
9. From which sector does India receives the highest share of GDP?

A. Construction, Gas, Manufacturing, and Electricity

B. Allied and Agriculture
C. Service Sector
D. Public and Defence Administration
10. The term transfer payments, which are referred to as payments, are made

A. As the compensation to the employees

B. Without the exchange of services and goods
C. For workers, upon the transfer from one job to a new one
 D. None of the above
11. GDP in addition with NFIA equals to _______?

A. Subsidies
B. Depreciation
C. Indirect Taxes
D. NFIA
12. The following statement is not included in National Income

A. Undistributed profit
B. Interest upon the national debt (unproductive)
C. Income of government expenditure
D. Payments made by households to various firms for purchasing their services and
goods
13. As a factor of cost, what is the other name of the net national product?

A. Personal income
B. National income
C. Net Domestic Product
D. Gross National Product
14. Which of the following should you not include for the calculation of GNP?

A. Interest payments
B. Rental Incomes
C. Transfer payments of governments
D. Dividends
15. Who is known as the father of the Green revolution?

A. Lal Bahadur Shastri

B. Dr. B. R. Ambedkar
C. Manmohan Singh
D. MS Swaminathan
16. What is the use of the Gini coefficient?

A. To measure the difference between loss and profit

B. To measure the inequality of income
 C. For measuring the income distribution
D. For measuring the equality of income
17. Which of the following statements define a close economy?

A. Only exports are taking place

B. No export or import is happening
C. Deficit financing happens
D. Only exports are occurring
18. Which theory for industrial relations signifies the “concept of surplus labour?”

A. Unitary Approach
B. Marxist Approach
C. Gandhian Approach
D. Pluralist Approach
19. On which basis the National Income of India is calculated?

A. WTO rate
B. Market Costs
C. Fixed Costs
D. Factor costs
20. Which of the following term is opposite to Inflation?

A. Deflation
B. Hyperinflation
C. Deflation
D. Stagflation
21. The tax on Goods and Services helped India to emerge as a _______

A. Common market
B. Set of different market
C. North and South market
D. West and East Market
22. What is why the intermediate goods are not included in the National Income?

A. Intermediate goods are not reliable

B. For the prevention of double accounting
 C. Decreases the income
D. All of the above
23. Which among the following things are not included while measuring the GDP?

A. Leisure value and illegal activities

B. Financial transactions
C. Transferring of used goods, non-market services, and goods
D. All of the above
24. Who was the first to attempt the Accounting of National Income?

A. Gregory King
B. Prof. D.R. Gadgil
C. J.M. Keynes
D. Simon Kuznets
25. The increase in the stock of the capital is also called

A. Capital profit
B. Capital formation
C. Capital loss
D. None of the above
26. Which one of the following is considered under the four-sector model?

A. Foreign, Government, Firm, and Family Sector

B. Industry, Firm, Family
C. Government, Family, Firm
D. None of these
27. Which one of the following options is not considered as flow?

A. Depreciation
B. Investment
C. Income
D. Capital
28. Which one of the following options is not included in the National Income?

A. Wage, rent, salary

B. Interest, wage, rent
 C. Profit, interest, rent, wage
D. Rent, profit, interest
E. Profit, salary, interest, wage

29. Which one of the following is also included in the National Income?
1. Sale proceedings of bonds and shares
2. Black Money
3. Transfer Earnings
4. None of these

30. Which one of the following is considered under the primary sector?

A. Forest
B. Mines
C. Land
D. All of the above
31. How many sectors are production enterprises divided?

A. Two sectors
B. Four sectors
C. Three sectors
D. Five sectors
32. Which of the following options should not be included in the calculation of GNP?

A. Interest payments
B. Government transfer payment
C. Dividends
D. Rental incomes
33. What are the formation causes of net capital?

A. Increase in the cost

B. Increase in the production capacity
C. Increase in the profits
D. None of the above
34. Which one of the following options is the example of semi-durable goods?
 A. Petrol
B. Milk
C. Radio
D. Clothes
35. Which of the following causes unexpected obsolescence?

A. Change in technology
B. Change in demand
C. Natural calamities
D. None of these
36. Which of the following options causes depreciation?

A. Damages causing due to floods

B. Normal wear and tear
C. Destruction due to market crash
D. None of the above

Answers for part 3

1) d
2) c
3) d
4) b
5) c
6) a
7) b
8) a
9) c
10) b
11) d
12) b
13) b
14) c
15) d
16) a
17) b
18) b
19) d
20) a
21) a
22) b
23) d
24) a
25) b
26) a
27) d
28) c
29) d
30) d
31) c
32) b
33) b
34) d
35) c
36) b