This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Economics Macro Economics > Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 1 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. For most macroeconomists A) National income accounts and national output accounts are equal to each other. B) National income accounts exceed national output accounts. C) National output accounts exceed national income accounts. D) It is impossible to tell whether national income accounts equal to national output accounts. E) National income accounts is much more important than national output accounts. Show Answer Correct Answer: A) National income accounts and national output accounts are equal to each other. 2. "The average income of the citizens of a nation, calculated by dividing the national income for a certain year by the population" A) Personal Income (PI). B) Disposable personal income (DPI). C) Per capita income (PCI). D) None of the above. Show Answer Correct Answer: C) Per capita income (PCI). 3. The profits of a Spanish factory with British owners are A) Counted in Spain's GNP. B) Not part of Britain's GDP. C) Counted in Britain's GDP. D) Part of Spain's GNP. E) Counted in Spain's GDP and are a part of Britain's GNP. Show Answer Correct Answer: E) Counted in Spain's GDP and are a part of Britain's GNP. 4. When depreciation, or the loss of value due to consumption of fixed capital, is deducted from Gross Domestic Product, the resulting measure reflects a country's actual net output. What is this measure commonly known as in national income accounting? A) NET DOMESTIC PRODUCT. B) PER CAPITA INCOME. C) REAL GDP. D) GROSS NATIONAL PRODUCT. Show Answer Correct Answer: A) NET DOMESTIC PRODUCT. 5. What is the Real GDP for the Philippines in 2020? A) Php 18, 265, 190.3. B) Php 17, 938, 582.4. C) Php 19, 382, 750.6. D) Php 17, 527, 234.1. Show Answer Correct Answer: D) Php 17, 527, 234.1. 6. The average amount earned by each person in a country. It is calculated by dividing a country's Gross National Product by its total population. A) Personal Income. B) Value added. C) Disposable income. D) Per Capita Income. Show Answer Correct Answer: D) Per Capita Income. 7. The highest component of GNP is, A) The current account. B) Investment. C) Government purchases. D) Consumption. E) None of the above. Show Answer Correct Answer: D) Consumption. 8. What is the term for economic activities that do not involve market transactions? A) Black Market. B) Informal Economy. C) Nonmarket Activities. D) Underground Economy. Show Answer Correct Answer: C) Nonmarket Activities. 9. What does the expenditure approach in National Income Accounting focus on? A) Total income earned by individuals. B) Total production in the economy. C) Total savings in the economy. D) Total spending or expenditures in the economy. Show Answer Correct Answer: D) Total spending or expenditures in the economy. 10. ..... is an annual allowance for wear and tear of capital goods. A) Depreciation. B) Appreciation. C) Allowances. D) None of the above. Show Answer Correct Answer: A) Depreciation. 11. Government purchases currently take up about A) 19 percent of U.S. GNP, and this share has not changed much since the late 1950s. B) 38 percent of U.S. GNP, and this share has not changed much since the late 1950s. C) 18 percent of U.S. GNP, and this share has been increasing since the late 1950s. D) 18 percent of U.S. GNP, and this share has been decreasing since the late 1950s. E) None of the above. Show Answer Correct Answer: A) 19 percent of U.S. GNP, and this share has not changed much since the late 1950s. 12. NDP$_{MP}$ is Rs. 2400 crores, the capital stock of the country is worth Rs.400 crores, and depreciation is 10% per annum. Indirect taxes amount to Rs. 120 crores and subsidies equal to Rs 20 crores. Factor income from the rest of the world is Rs 400 crores and factor income to the rest of the world is Rs 600 crores. Calculate Gross National Product at Factor Cost. A) Rs. 2340 cr. B) Rs. 2140 cr. C) Rs. 2110 cr. D) Rs. 2310 cr. Show Answer Correct Answer: B) Rs. 2140 cr. 13. Evaluate the impact of a decrease in government expenditures on a country's GDP. A) No impact on GDP. B) Impact depends on other factors. C) Decrease GDP. D) Increase GDP. Show Answer Correct Answer: C) Decrease GDP. 14. The earnings of a Spanish factory with British owners are A) Counted in Spain's GDP. B) Part of Britain's GNP. C) Only counted in Britain's GDP. D) Only part of Spain's GNP. E) Counted in Britain's GDP and are a part of Spain's GNP. Show Answer Correct Answer: E) Counted in Britain's GDP and are a part of Spain's GNP. 15. The United States issues a $ 10, 000 debt forgiveness to Argentina. How is this accounted for in the balance of payments? A) Current account, Argentina good import. B) Financial account, U.S. asset import. C) Current account, U.S. service export. D) Current account, Argentina transfer payment. E) Capital account, U.S. transfer payment. Show Answer Correct Answer: E) Capital account, U.S. transfer payment. 16. In the United States over the past fifty years, the fraction of GNP devoted to consumption has fluctuated in a range of about A) 42 to 49 percent. B) 82 to 89 percent. C) 22 to 29 percent. D) 62 to 70 percent. E) 32 to 39 percent. Show Answer Correct Answer: D) 62 to 70 percent. 17. GNP is the total value of all final goods and services produced within a country in a given time period. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 18. Consider the following statements and identify the right ones.i. While calculating GDP, income generated by foreigners in a country is taken into considerationii. While calculating GDP, income generated by nationals of a country outside the country is taken into account A) I only. B) Ii only. C) Both. D) None. Show Answer Correct Answer: A) I only. 19. What is the purpose of a macroeconomic model? A) To predict future economic trends. B) To describe an actual economy in detail. C) To highlight essential features of an economy. D) To simplify the functioning of an economic system. Show Answer Correct Answer: C) To highlight essential features of an economy. 20. Which of the following is an example of double counting in national income measurement? A) Counting raw materials and final goods separately. B) Excluding non-monetary transactions. C) Using GDP deflator. D) Considering per capita income. Show Answer Correct Answer: A) Counting raw materials and final goods separately. 21. Which of the following statements about the central bank is TRUE? A) Only the central bank may hold foreign reserves and intervene officially in exchange markets. B) Central banks have little power to alter macroeconomic conditions. C) Today, central banks' reserves consist largely of gold. D) The Federal Reserve holds only a small level of official reserve assets other than gold. E) Central banks never inject money into the economy. Show Answer Correct Answer: D) The Federal Reserve holds only a small level of official reserve assets other than gold. 22. If a country's Real GNP grew by 3% and inflation was 2%, what was the nominal growth rate of GNP? A) 0.05. B) 0.02. C) 0.01. D) 0.03. Show Answer Correct Answer: A) 0.05. 23. Which component of GNP includes the value of final goods and services produced by households? A) Government consumption expenditure. B) Personal consumption expenditures. C) Net exports. D) Gross private domestic investment. Show Answer Correct Answer: B) Personal consumption expenditures. 24. Every international transaction automatically enters the balance of payments A) Once either as a credit or as a debit. B) Twice, once as a credit and once as a debit. C) Once as a credit. D) Twice, both times as debit. E) None of the above. Show Answer Correct Answer: B) Twice, once as a credit and once as a debit. 25. Profit is the sum of A) Operating surplus and mixed income. B) Rent, interest, and royalty. C) Profit tax, retainec earnings and dividend. D) All of these. Show Answer Correct Answer: C) Profit tax, retainec earnings and dividend. 26. The concept of added value is ..... A) The increased value created for a good after undergoing the production process. B) The value of production not included in the calculation of national income. C) Added value created when intermediate goods are processed into final goods. D) The value of production calculated based on market prices. Show Answer Correct Answer: A) The increased value created for a good after undergoing the production process. 27. Double counting in the national income accounts will not occur if GDP is computed by summing all: A) Sales of final output. B) Sales of final output and intermediate goods. C) Sales. D) Production costs. Show Answer Correct Answer: A) Sales of final output. 28. The law of scarcity applies to: A) A capitalist economy. B) A poor economy. C) Statistics. D) All economies. Show Answer Correct Answer: B) A poor economy. 29. What is the formula for calculating Market Value? A) P + Q. B) P-Q. C) P x Q. D) P / Q. Show Answer Correct Answer: C) P x Q. 30. When calculating GDP using the expenditure approach, which of the following components would increase GDP? A) Increase in imports. B) Decrease in investment. C) Decrease in exports. D) Increase in government spending. Show Answer Correct Answer: D) Increase in government spending. 31. The following is NOT included in Malaysia's GDP. A) EON's corporate profit. B) Wages earned by Malaysians in Brunei. C) SOGO's gross profit. D) Salary of a Malaysian Cabinet Minister. Show Answer Correct Answer: B) Wages earned by Malaysians in Brunei. 32. The value of the output of all goods and services produced within a country in a year. A) Net domestic product. B) Gross Domestic Product. C) Total output. D) National income. Show Answer Correct Answer: B) Gross Domestic Product. 33. Each of the following items is a component of the expenditure approach, EXCEPT ..... A) Personal consumption expenditure. B) Net interest. C) Imports. D) Government expenditure. Show Answer Correct Answer: B) Net interest. 34. From the following who is not a normal residents if India? A) An American residing in India for visiting Taj mahal. B) An Indian living in USA for the last three years. C) None of these. D) Both a and b. Show Answer Correct Answer: D) Both a and b. 35. The portion of corporate profit included in personal income is ..... A) Undistributed corporate income. B) Taxes on corporate profits. C) Capital utilization allowance. D) Dividends. Show Answer Correct Answer: D) Dividends. 36. Suppose the total market value of all final goods and services produced in a particular country in 2004 is $ 500 billion and the total market value of final goods and services sold is $ 450 billion. We can conclude that A) GDP in 2004 is $ 500 billion. B) NDP in 2004 is $ 450 billion. C) Inventories in 2004 fell by $ 50 billion. D) GDP in 2004 is $ 450 billion. Show Answer Correct Answer: A) GDP in 2004 is $ 500 billion. 37. Whose definition of economics is classificatory? A) Adam Smith. B) Marshall. C) Pigou. D) Robbins. Show Answer Correct Answer: B) Marshall. 38. Export is included in the calculation of personal income A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 39. The equation for gross Domestic Product by using expenditure approach is A) GDP=C+I+G+X-M. B) GDP=C+I+G+X-M. C) GDP=C+I+G+X+M. D) GDP=C+I+G+X-M. Show Answer Correct Answer: A) GDP=C+I+G+X-M. 40. Transfer payment refers to payment which are made ..... A) As compensation to workers. B) Without any exchange of goods and services. C) To workers on transfer from one job to another. D) None of the above. Show Answer Correct Answer: B) Without any exchange of goods and services. 41. Intermediate goods refers to A) Goods that satisfies human needs directly. B) Goods that undergoes further processing. C) Services rendered by a housewife. D) Goods that are used for a longer time. Show Answer Correct Answer: B) Goods that undergoes further processing. 42. Calculate Profit when:Retained Earning= 700 crCorporate tax= 600 crDividend= 400 cr A) 1300cr. B) 1100 cr. C) 1700 cr. D) 1700. Show Answer Correct Answer: C) 1700 cr. 43. Given the following transactions, calculate the National Product. Firm X sells goods worth Rs. 600 to firm Y and goods worth Rs 400 to firm Z. Firm Y sells finished goods worth Rs. 250 for final consumption and goods of Rs. 500 to firm Z. Firm Z sells its product for Rs. 2800 to households. A) Rs. 4350. B) Rs. 3875. C) Rs. 3050. D) Rs. 2900. Show Answer Correct Answer: C) Rs. 3050. 44. Which services are provided by families to a firm? A) Land. B) Labour. C) Capital and enterprise. D) All of the above. Show Answer Correct Answer: D) All of the above. 45. Berikut adalah komponen perbelanjaan agregat dalam pengiraan pendapatan negara Malaysia mengikut kaedah perbelanjaan kecuali A) Cukai import. B) Penggunaan awam. C) Pelaburan swasta. D) Perubahan inventori. Show Answer Correct Answer: A) Cukai import. 46. The net export negative shows that ..... A) Nation imports of goods and services exceed its export.*. B) The economy's stock of capital goods is decreasing. C) Nation imports of goods and services exceed its export. D) The value of depreciation is more than the gross private investment. Show Answer Correct Answer: C) Nation imports of goods and services exceed its export. 47. Which are NOT the four sector model? A) Financial sector. B) Overseas sector. C) Household sector. D) Government sector. Show Answer Correct Answer: B) Overseas sector. 48. Personal income is derived from national income by: A) Subtracting transfer payments. B) Subtracting personal taxes. C) Subtracting undistributed corporate profits and social security contributions, then adding transfer payments. D) Adding retained earnings. Show Answer Correct Answer: C) Subtracting undistributed corporate profits and social security contributions, then adding transfer payments. 49. Political stability and level of specialization are among the factors that affect the national income of a particular country. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 50. Transfer payments refer to payments, which are made: A) Without any exchange of goods and services. B) To workers on transfer from one job to another. C) As compensation to employees. D) None of the above. Show Answer Correct Answer: A) Without any exchange of goods and services. 51. How do we allocate statistical discrepancy among the current, capital, and financial accounts? A) We have no way of knowing exactly how to allocate this discrepancy. B) Depend on the degree of certainty which we attribute to these accounts. C) Divide it evenly amongst the three accounts. D) Depend on the convention adopted by the specific financial institution. E) Statistical discrepancy signals human errors made when dealing with financial accounts. Show Answer Correct Answer: A) We have no way of knowing exactly how to allocate this discrepancy. 52. By deducting undistributed profit from national income, we get, A) Private income. B) Personal income. C) Personal disposable income. D) Subsidies. Show Answer Correct Answer: B) Personal income. 53. Apakah salah satu masalah yang berkaitan dengan pengiraan KDN disebabkan oleh kesukaran dalam menentukan barang-barang akhir dan barang-barang perantara? A) Pengalihan yang salah. B) Penilaian yang terlalu tinggi. C) Penilaian yang terlalu rendah. D) Pengiraan berganda. Show Answer Correct Answer: D) Pengiraan berganda. 54. Calculate Net value added at factor cost from the following data:Items-Rs. (in lakhs)1. Net value added at factor cost-3002. Intermediate consumption-2003. Indirect tax-204. Depreciation-305. Change ins tock-(-)50 A) Rs. 500 lakhs. B) Rs. 650 lakhs. C) Rs. 600 lakhs. D) Rs. 550 lakhs. Show Answer Correct Answer: C) Rs. 600 lakhs. 55. Which component of the expenditure approach represents spending by households on goods and services? A) Government Spending. B) Consumption. C) Net Exports. D) Investment. Show Answer Correct Answer: B) Consumption. 56. Money supply in an economy is a ..... concept . A) Flow. B) Stock. C) Both stock and flow. D) Only stock. Show Answer Correct Answer: D) Only stock. 57. A country's current account A) Balance equals the change in its net foreign wealth. B) Balance equals the change in its foreign wealth. C) Surplus equals the change in its foreign wealth. D) Deficit equals the change in its foreign wealth. E) None of the above. Show Answer Correct Answer: A) Balance equals the change in its net foreign wealth. 58. Which is an example of a final good or service A) T-Shirt at Polo Store. B) Coffee Beans at Starbucks. C) Wheat at a bakery. D) Lumber at furniture store. Show Answer Correct Answer: A) T-Shirt at Polo Store. 59. What is the problem of Expertise in calculating National Income? A) Lack of professionals such as statisticians, researchers, programmers, and analysts. B) Abundance of professionals such as statisticians, researchers, programmers, and analysts. C) No need for professionals such as statisticians, researchers, programmers, and analysts. D) Limited professionals such as statisticians, researchers, programmers, and analysts. Show Answer Correct Answer: A) Lack of professionals such as statisticians, researchers, programmers, and analysts. 60. National Income differs from Net National Product at market price by the amount of: A) It does not differ. B) National debt interest. C) Current transfers from rest of the world. D) Net Indirect Taxes. Show Answer Correct Answer: D) Net Indirect Taxes. 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