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 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 2 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Adds up all incomes earned by factors of production is ..... approach A) Expenditure. B) Income. C) Output. D) All answer. Show Answer Correct Answer: B) Income. 2. Calculate Operating Surplus When:-Rent=1000 crInterest=500 crRoyalty= 700 crProfit= 1300 crSalaries= 500cr A) 3000 cr. B) 1700 cr. C) 4000cr. D) 3500 cr. Show Answer Correct Answer: D) 3500 cr. 3. GDP data are criticized as being inaccurate measures of economic welfare because A) They do not take into account changes in the amount of leisure. B) They do not take into account all changes in product quality. C) They do not take into account the adverse effects of economic activity on the environment. D) Of all of the above considerations. Show Answer Correct Answer: D) Of all of the above considerations. 4. Produces goods/services, pays factor income, and pays taxes. A) REST OF THE WORLD. B) HOUSEHOLD SECTOR. C) GOVERNMENT. D) FIRM. Show Answer Correct Answer: D) FIRM. 5. Which of the following is a measure of the efficiency of all inputs to a production process? A) Productivity. B) Labor Input. C) Multifactor Productivity. D) Capital Deepening. Show Answer Correct Answer: C) Multifactor Productivity. 6. Setup Corporation buys $ 100, 000 of sand, rock, and cement to produce redi-mix concrete. It sells 10, 000 cubic yards of concrete at $ 30 a cubic yard. The value added by Setup Corporation is: A) $ 300, 000. B) $ 200, 000. C) Zero. D) $ 100, 000. Show Answer Correct Answer: B) $ 200, 000. 7. National Income doesn't include: A) The payments by the household to firm for the purchase of goods and services. B) Interest on unproductive national debt. C) Income for government expenditure. D) Undistributed profit. Show Answer Correct Answer: B) Interest on unproductive national debt. 8. The difficulty of calculating national income arises because: A) All incomes are reported accurately. B) Non-monetary activities are hard to measure. C) Prices remain constant. D) Data collection is simple. Show Answer Correct Answer: B) Non-monetary activities are hard to measure. 9. If GDP = RM500 billion, Net factor income from abroad = RM20 billion, and depreciation = RM30 billion, what is NNP at market prices? A) RM490 billion. B) RM520 billion. C) RM530 billion. D) RM590 billion. Show Answer Correct Answer: A) RM490 billion. 10. This term refers to the increment in amount of goods and services produced by an economy. A) Economic Growth. B) Economic Development. C) Economic sustainability. D) Economic System. Show Answer Correct Answer: A) Economic Growth. 11. Measures national income by summing household consumption, government spending, investment, and net exports. A) Product (Output/Value Added) Method. B) Income (Factor Payment) Method. C) Expenditure Method. D) ALL OF THE ABOVE. Show Answer Correct Answer: C) Expenditure Method. 12. While calculating NNP(FC) Using Income Method, we always focus on items of: A) Expenditure. B) Income. C) Value added. D) All of the above. Show Answer Correct Answer: B) Income. 13. Construct an argument for why Real GNP is a better measure of economic performance than Money GNP. A) Money GNP adjusts for population growth; Real GNP does not. B) Real GNP includes non-market activities; Money GNP does not. C) Money GNP includes income earned abroad; Real GNP does not. D) Real GNP accounts for inflation; Money GNP does not. Show Answer Correct Answer: D) Real GNP accounts for inflation; Money GNP does not. 14. Of the following, which is not included in the calculation of disposable income? A) Employee transportation allowance. B) Interest on consumer loans. C) EPF contributions. D) Distributed corporate profit. Show Answer Correct Answer: C) EPF contributions. 15. Develop a plan to improve the accuracy of GNP measurements in a developing country. A) Ignore measurement errors. B) Implement a comprehensive data collection system. C) Rely on GDP instead of GNP. D) Use estimates for missing data. Show Answer Correct Answer: B) Implement a comprehensive data collection system. 16. What is the key concept behind the expenditure approach in National Income Accounting? A) Total production must equal total income. B) Total investments must equal total income. C) Total savings must equal total income. D) Total spending must equal total income. Show Answer Correct Answer: D) Total spending must equal total income. 17. Which of the following is included in Gross National Product calculations? A) Domestic production only. B) Income earned by foreign residents within the country. C) Income earned by citizens abroad. D) Sales of goods in the underground economy. Show Answer Correct Answer: C) Income earned by citizens abroad. 18. Which statement is correct for nominal GDP?i. Nominal GDP is calculated based on current prices.ii. Nominal GDP is calculated based on the base prices.iii. Data on Nominal GDP shows an accurate picture of the economy as compared to real GDP. A) Only i, iii. B) Only i. C) Only ii, iii. D) Only ii. Show Answer Correct Answer: B) Only i. 19. Which of the following is not a government transfer? A) Unemployment insurance benefits. B) Government spending on education. C) Welfare payments. D) Public pensions. Show Answer Correct Answer: B) Government spending on education. 20. GDP is supposed to measure A) The volume of production of a country's output. B) Net unilateral transfers from foreigners. C) The volume of services generated within a country's borders. D) The volume of production within a country's borders. E) GNP plus depreciation. Show Answer Correct Answer: D) The volume of production within a country's borders. 21. In a closed economy, private saving, , is equal to A) I-(G-T). B) I + (G-T) + C. C) I-(G + T). D) I + (G-T). E) I + (G + T). Show Answer Correct Answer: D) I + (G-T). 22. The main difference between GDP and GNP is that ..... A) GDP includes net factor income from abroad. B) GNP includes net factor income from abroad. C) There is no difference between GDP and GNP. D) GDP includes inflation. Show Answer Correct Answer: B) GNP includes net factor income from abroad. 23. In a closed economy, national saving A) Sometimes equals investment. B) Always equals investment. C) Is always less than investment. D) Is always more than investment. E) None of the above. Show Answer Correct Answer: B) Always equals investment. 24. To convert GNP at factor cost to GNP at market price, it is necessary to add ..... A) Indirect taxes and subtract subsidies. B) Expenditure imports. C) Gross trading profits of companies. D) Current and capital expenditure by the central government. Show Answer Correct Answer: A) Indirect taxes and subtract subsidies. 25. The United States began to report its gross domestic product (GDP) only since A) 1921. B) 1900. C) 1991. D) 1931. E) 1941. Show Answer Correct Answer: C) 1991. 26. Which of the following does not belong to Micro-Economics? A) Growth rate of GNP. B) Prices of Petroleum products. C) Production of cement in the country. D) Total employment in small scale industries. Show Answer Correct Answer: C) Production of cement in the country. 27. Which of the following is an example of an income component in the income approach? A) Government Spending. B) Investment. C) Wages and Salaries. D) Net Exports. Show Answer Correct Answer: C) Wages and Salaries. 28. When foreign sectors are included in calculating national income by using expenditure approach, the equation for aggregate income is ..... A) Y=C+S-T-X+M. B) Y=C+S+T+X-M. C) Y=C+I+T+X+M. D) Y=C+I+G+X-M. Show Answer Correct Answer: D) Y=C+I+G+X-M. 29. In a circular flow of income in a closed economy with government intervention, leakage consists of ..... A) Investment and savings. B) Savings only. C) Savings and taxes. D) Savings, taxes and imports. Show Answer Correct Answer: C) Savings and taxes. 30. The tax which is imposed on he profit of corporate is known as: A) Corporate tax. B) Sales tax. C) Income tax. D) Excise duty. Show Answer Correct Answer: A) Corporate tax. 31. GNP measured on a fixed price or in a base year. A) Nominal GNP. B) Real Income. C) Growth Rate. D) GDP. Show Answer Correct Answer: B) Real Income. 32. The correct formula of Domestic income is ..... A) GNP at MP. B) GDP at MP. C) NNP at FC. D) NDP at FC. Show Answer Correct Answer: D) NDP at FC. 33. Gross Domestic Product (GDP) measures the total market value of: A) Final goods and services produced within a country's borders in a specific time period. B) Final goods and services consumed within a country's borders in a specific time period. C) All goods and services produced by a country's residents, regardless of location. D) All goods and services produced within a country's borders, including intermediate goods. Show Answer Correct Answer: A) Final goods and services produced within a country's borders in a specific time period. 34. Water in a stream is a- A) Flow concept. B) Stock concept. C) Hypothetical concept. D) Non-economic concept. Show Answer Correct Answer: A) Flow concept. 35. The difference between gross domestic product and gross national product is A) Subsidy. B) Indirect tax. C) Net property income from abroad. D) Depreciation. Show Answer Correct Answer: C) Net property income from abroad. 36. What does the term 'inflation rate' refer to? A) The rate at which the population is growing. B) The rate at which the unemployment is decreasing. C) The rate at which the general level of prices for goods and services is rising. D) The rate at which the GDP is increasing. Show Answer Correct Answer: C) The rate at which the general level of prices for goods and services is rising. 37. The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens. How is this accounted for in the balance of payments? A) Current account, French good export. B) Current account, German good import. C) Financial account, French asset export. D) Financial account, German asset export. E) All of the above. Show Answer Correct Answer: C) Financial account, French asset export. 38. The standard of living is often measured by: A) Real GDP * population. B) Real GDP. C) Real GDP per capita. D) Real GDP plus depreciation. Show Answer Correct Answer: C) Real GDP per capita. 39. Identify the formula to calculate net indirect tax. A) Indirect tax + Subsidies. B) Operating surplus + Subsidies. C) Indirect tax-Depreciation. D) Indirect tax-Subsidies. Show Answer Correct Answer: D) Indirect tax-Subsidies. 40. As a result of double counting, national income is: A) Correctly estimated. B) Over estimated. C) Under estimated. D) Not estimated for the entire year of accounting. Show Answer Correct Answer: B) Over estimated. 41. Critique the use of nominal GDP as a measure of economic growth without considering inflation. A) Nominal GDP is inaccurate. B) Nominal GDP is not applicable. C) Nominal GDP is sufficient. D) Nominal GDP is accurate. Show Answer Correct Answer: A) Nominal GDP is inaccurate. 42. Sector which transforms one physical good in to another physical good A) Secondary sector. B) Joint sector. C) Primary sector. D) Territiary sector. Show Answer Correct Answer: A) Secondary sector. 43. Secondary sectors comprise ..... A) Agriculture, forestry, fishing and farming. B) Banking, transportation, communication. C) Manufacturing, construction, utility supply. D) Fishing and forestry. Show Answer Correct Answer: C) Manufacturing, construction, utility supply. 44. Which measure of income refers to the total income received by households, including wages, salaries, commissions, bonuses, pensions, social benefits, and transfer payments, but excluding retained corporate profits and corporate taxes? A) NATIONAL INCOME. B) DOMESTIC INCOME. C) PERSONAL INCOME. D) PRIVATE INCOME. Show Answer Correct Answer: C) PERSONAL INCOME. 45. National income data is used for ..... A) Designing economic sector activities. B) Analyzing output quality. C) Determining the foreign exchanges rates. D) Measuring unemployment rate. Show Answer Correct Answer: A) Designing economic sector activities. 46. Which method measures national income by summing all final goods and services produced within a country in a given year? A) Output approach. B) Income Approach. C) Expenditure approach. D) Value-added approach. Show Answer Correct Answer: C) Expenditure approach. 47. All of the following are related to economic investment except A) The piling up of inventories on a grocer's shelf. B) The purchase of computers by ali's internet cafe. C) Using bus services to go to Muara. D) The purchase of bus transport by a transport company. Show Answer Correct Answer: C) Using bus services to go to Muara. 48. A country's Real GNP increased from $ 1 trillion to $ 1.2 trillion after adjusting for inflation. What can be inferred about the country's economic growth? A) Economic growth remained constant. B) Economic growth cannot be determined. C) Economic growth decreased. D) Economic growth increased. Show Answer Correct Answer: D) Economic growth increased. 49. Transfer Income, Income from sale of 2nd hand goods are always included in National Income. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 50. The formula for GDP (FC) is GDP(MP) + Subsidy-Indirect Tax A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 51. National income accountants can avoid multiple counting by A) Including transfer payments in their calculations. B) Only counting final goods. C) Counting both intermediate and final goods. D) Only counting intermediate goods. Show Answer Correct Answer: B) Only counting final goods. 52. If a country's GDP is $ 500 billion and net income from abroad is-$ 20 billion, what is the country's GNP? A) $ 480 million. B) $ 480 billion. C) $ 500 billion. D) $ 520 billion. Show Answer Correct Answer: B) $ 480 billion. 53. Which of the following is a final good or service? A) Chevrolet windows purchased by a General Motors assembly plant. B) Diesel fuel bought for a delivery truck. C) Fertilizer purchased by a farm supplier. D) A haircut. Show Answer Correct Answer: D) A haircut. 54. Apa kaedah yang digunakan untuk mengira pendapatan negara dengan menambah nilai tambah oleh pelbagai sektor ekonomi? A) Kaedah Susut Nilai (Depreciation Method). B) Kaedah Perbelanjaan (Expenditure Method). C) Kaedah Pendapatan (Income Method). D) Kaedah Keluaran (Value Added). Show Answer Correct Answer: D) Kaedah Keluaran (Value Added). 55. You travel to Paris and pay for a $ 100 dinner with your credit card. How is this accounted for in the balance of payments? A) Financial account, French asset export. B) Current account, French service import. C) Financial account, U.S. asset import. D) Current account, U.S. good export. E) Financial account, U.S. asset export. Show Answer Correct Answer: E) Financial account, U.S. asset export. 56. The compensation received by individuals as compensation for their labor services. A) Rent. B) Wages or Salaries. C) Profit. D) Interest. Show Answer Correct Answer: B) Wages or Salaries. 57. The value of subsidies is RM20 million, indirect taxes is RM15 million and gross domestic product at market price is RM200 million. Calculate the gross domestic product at factor cost A) RM201 million. B) RM205 million. C) RM203 million. D) RM204million. Show Answer Correct Answer: B) RM205 million. 58. The money used to create infrastructures and public services from the taxes paid by citizens. A) Consumption. B) Net Export. C) Government Expenditure. D) Investment. Show Answer Correct Answer: C) Government Expenditure. 59. Tax imposed on the net profit of the company is called A) Income tax. B) Indirect tax. C) Corporate tax. D) Direct tax. Show Answer Correct Answer: C) Corporate tax. 60. Which of the following is included in national income:i. Vegetables obtained from kitchen garden ii. A teacher teaching his own son at his home A) A. i only. B) C. Both i & ii. C) D. None of the above. D) None of the above. Show Answer Correct Answer: C) D. None of the above. ← PreviousNext →Related QuizzesCommerce QuizzesClass 12 QuizzesClass 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 1Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 3Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 4Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 5Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 6Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 7Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 8Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books