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 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 4 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Unilateral transfers between countries are A) International gifts or payments that do not correspond to the purchase of any good, service, or asset. B) Part of national income, but not part of the current account. C) Part of the current account, but not a part of national income. D) Long-term loans. E) Known for reducing the income of capital owners. Show Answer Correct Answer: A) International gifts or payments that do not correspond to the purchase of any good, service, or asset. 2. Gross National Income includes all of the income earned by a country's residents and businesses including those earned abroad. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 3. The income approach is also known as the ..... approach. A) Profit. B) Industrial Origin. C) Factor Income. D) Expenditure. Show Answer Correct Answer: C) Factor Income. 4. Which of the following is adjusted for inflation to provide a more accurate reflection of an economy's size? A) Nominal GDP. B) Real GDP. C) Net National Product. D) Gross National Product. Show Answer Correct Answer: B) Real GDP. 5. What is Nominal GNP? A) GNP less Net factor income from abroad. B) Real GNP. C) GNP at current prices. D) GNP at constant prices. Show Answer Correct Answer: C) GNP at current prices. 6. Total market value of all final goods and services produced WITHIN a country in a given time period. A) Gross National Product. B) Gross Domestic Product. C) Gross Personal Product. D) Net National Product. Show Answer Correct Answer: B) Gross Domestic Product. 7. A firm's value added is equal to: A) Sales. B) Sales + Intermediate consumption. C) Sales+Change in stock-Intermediate consumption. D) Profit. Show Answer Correct Answer: C) Sales+Change in stock-Intermediate consumption. 8. This term refers to the reduction and elimination of poverty, unemployment and inequality with the context of growing economy. A) Economic sustainability. B) Economic Growth. C) Economic Development. D) Economic System. Show Answer Correct Answer: C) Economic Development. 9. Apa yang diwakili oleh Keluaran Negara Kasar (KNK)? A) Nilai barangan dan perkhidmatan akhir yang dihasilkan oleh faktor-faktor pengeluaran yang dimiliki oleh penduduk negara, sama ada di dalam atau di luar negara. B) Nilai import keseluruhan dalam satu tahun. C) Nilai simpanan keseluruhan dalam satu tahun. D) Nilai perbelanjaan kerajaan dalam satu tahun. Show Answer Correct Answer: A) Nilai barangan dan perkhidmatan akhir yang dihasilkan oleh faktor-faktor pengeluaran yang dimiliki oleh penduduk negara, sama ada di dalam atau di luar negara. 10. The value of GDP at the current prevailing price is, A) Real GDP. B) Personal income. C) Private income. D) NDP. Show Answer Correct Answer: A) Real GDP. 11. GNP measures the market value of all final goods and services produced by a country's permanent residents, wherever located, within a year. A) True. B) False. C) Uncertain. D) None of the above. Show Answer Correct Answer: A) True. 12. The total amount of income from economic activities across the country in a year is called ..... A) National income. B) Private Income. C) Personal income. D) Disposable income. Show Answer Correct Answer: A) National income. 13. The usage of national income data is to measure economic growth. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 14. National income figures which has been adjusted by adding in the value of subsidies and deducting the amount of indirect taxes. (+) subsidies, (-) tax A) At factor prices. B) At constant prices. C) At market prices. D) At current prices. Show Answer Correct Answer: A) At factor prices. 15. The most important problem in Estimating GNP is: A) Black marketing. B) Smuggling. C) Double counting. D) Unorganised market. Show Answer Correct Answer: D) Unorganised market. 16. The study of national income accounting has become very important in recent years for the following reasons EXCEPT: A) Standard of living comparison. B) Economic performance over time. C) National planning. D) Races contribution. Show Answer Correct Answer: D) Races contribution. 17. Calculate the net value added at the market price of a firm:Sale 400Change in stock ..... 20Depreciation 30Net indirect taxes 40Purchase of machinery 200Purchase of intermediate product 250 A) 115. B) 120. C) 110. D) 95. Show Answer Correct Answer: C) 110. 18. Which of the following is FALSE about private savings and government savings? A) S P = Y-T-C. B) Unlike private saving decisions, government saving decisions are often made with an eye toward their effect on output and employment. C) The national income identity can help us to analyze the channels through which government saving decisions influence macroeconomic conditions. D) None of the above; all statements are true. Show Answer Correct Answer: D) None of the above; all statements are true. 19. Calculate National Income by Income method from the given data:Items-Rs (in crores)1. Compensation of employees-13, 3002. Wages in kind-2003. Indirect taxes-38004. Gross fixed capital formation-62005. Operating surplus-50006. Mixed income of self-employed-16, 1007. NFIA-3008. Net exports-(-)100 A) Rs. 34, 600 cr. B) Rs. 34, 800 cr. C) Rs. 34, 700 cr. D) Rs. 34, 900 cr. Show Answer Correct Answer: C) Rs. 34, 700 cr. 20. The sector processing factors of production to end goods and services A) Service. B) Industry. C) Agriculture. D) Informal. Show Answer Correct Answer: B) Industry. 21. Indirect taxes include A) Expenditure taxes. B) Sales taxes. C) Excise taxes. D) All of the above. Show Answer Correct Answer: D) All of the above. 22. ..... is the total payment received by the factors of productionin a country during the year. A) National income. B) National aggregate. C) National flow. D) National economics. Show Answer Correct Answer: A) National income. 23. Which of the following is excluded from GDP calculation? A) Net exports. B) Household consumption. C) Government expenditure. D) Illegal or black-market transactions. Show Answer Correct Answer: D) Illegal or black-market transactions. 24. Consider the following statements and identify the right ones.i. National income is the monetary value of all final goods and services produced.ii. Depreciation is deducted from gross value to get the net value A) I Only. B) II Only. C) Both. D) None. Show Answer Correct Answer: C) Both. 25. The depreciation value in national income accounting is sometimes referred to as ..... A) Net investment. B) Net national product. C) Change in business inventories. D) The capital consumption allowance. Show Answer Correct Answer: D) The capital consumption allowance. 26. The formula for Net Factor Income from abroad is Factor income received-Factor income paid A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 27. Which of the following is a problem related to measuring national income? A) Double counting. B) Increase in exports. C) Government subsidies. D) High literacy rate. Show Answer Correct Answer: A) Double counting. 28. Equilibrium price is also known as A) Factor market. B) Factor price. C) Cost price. D) Market price. Show Answer Correct Answer: D) Market price. 29. The current price in the market through the forces of demand and supply. A) Net National Product. B) Factor Cost. C) Market Price. D) Gross National Product. Show Answer Correct Answer: C) Market Price. 30. In 2019, the United States had A) A surplus in the current account. B) A positive balance of net financial flows. C) A deficit in the current account. D) A balance in the current account. Show Answer Correct Answer: C) A deficit in the current account. 31. Analyzing the industrial origin approach, if the service sector contributes the most to GDP, what can be inferred? A) Manufacturing is the largest sector in the economy. B) Services have a higher value-added compared to other sectors. C) Agriculture has the highest production output. D) The economy is export-driven. Show Answer Correct Answer: B) Services have a higher value-added compared to other sectors. 32. What would be an example of a policy measure aimed at increasing national income through the income approach? A) Decreasing interest rates by the central bank. B) Increasing government spending on defense. C) Implementing tax incentives for businesses. D) Encouraging household savings through subsidies. Show Answer Correct Answer: C) Implementing tax incentives for businesses. 33. What is the difference between GNP and GDP? A) GDP includes income earned abroad, while GNP doesn't. B) GNP includes income earned abroad, while GDP doesn't. C) GNP includes net exports, while GDP doesn't. D) GDP includes net exports, while GNP doesn't. Show Answer Correct Answer: B) GNP includes income earned abroad, while GDP doesn't. 34. Which of the following best describes GDP at market prices? A) GDP at factor cost + Indirect taxes-Subsidies. B) Domestic factor income + Personal taxes. C) National income + Net factor income from abroad. D) GDP at factor cost-Indirect taxes + Subsidies. Show Answer Correct Answer: A) GDP at factor cost + Indirect taxes-Subsidies. 35. The position of the United States current account balance in 2007 was A) Lent over 6 percent of its GNP, resulting in a large current account surplus. B) Borrowed over 6 percent of its GNP, leading to a large current account deficit. C) Achieved a currant account balance of zero. D) Borrowed over 10 percent of its GNP, leading to a large current account deficit. E) None of the above. Show Answer Correct Answer: B) Borrowed over 6 percent of its GNP, leading to a large current account deficit. 36. The concept of Scarcity is A) Absolute concept. B) Ethical. C) Relative concept. D) Scientific concept. Show Answer Correct Answer: C) Relative concept. 37. GDP is always more than GNP A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 38. Of the following, which must be included in the calculation of national income? A) Interest on government loans. B) Rent paid to owner of a factory. C) A scholarship for a student at local university. D) The prices of stocks that are resold. Show Answer Correct Answer: B) Rent paid to owner of a factory. 39. Design a scenario where a country's GDP and GNP would be equal. A) Government expenditures are equal to government revenues. B) Net income from abroad is zero. C) Net exports are zero. D) Personal savings equal private investments. Show Answer Correct Answer: B) Net income from abroad is zero. 40. Which of the following is NOT a difficulty in calculating national income? A) Presence of informal or black market activities. B) Existence of subsistence farming. C) Accurate record keeping of all transactions. D) Valuation of services by homemakers. Show Answer Correct Answer: C) Accurate record keeping of all transactions. 41. In an open economy, the CA is equal to A) Y-(C + I + G). B) Y + (C-I-G). C) Y + (C + I + G). D) Y-(C + I-G). E) Y-(C-I + G). Show Answer Correct Answer: A) Y-(C + I + G). 42. A computation approach that adds up all the contributions of each sector/industry in the production of goods and services each year A) Final Expenditure Approach. B) Industry Origin Approach. C) Pie Added Approach. D) Factor Income Approach. Show Answer Correct Answer: B) Industry Origin Approach. 43. Ravi's mother is a housewife. She also teaches Ravi. How will you treat this act of teaching Ravi while calculating National Income and Domestic Income? A) It will be included in the National Income but not in Domestic Income. B) It will not be included in the National Income but in Domestic Income. C) It will be included both in the National Income and Domestic Income. D) It will neither be included in the National Income and nor in Domestic Income. Show Answer Correct Answer: D) It will neither be included in the National Income and nor in Domestic Income. 44. Read the following statements carefully:Statement 1:In estimating GNP, only the final products are taken into account Statement 2:The sale and purchase of shares of existing companies are included in GNP In light of the given statements, choose the correct option from the following: A) Statement 1 is true and Statement 2 is false. B) Statement 1 is false and Statement 2 is true. C) Both Statements 1 and 2 are true. D) Both Statements 1 and 2 are false. Show Answer Correct Answer: A) Statement 1 is true and Statement 2 is false. 45. Which approach to National Income Accounting categorizes economic activities into different sectors such as agriculture, manufacturing, and services? A) Income Approach. B) Industrial Origin Approach. C) Factor Approach. D) Expenditure Approach. Show Answer Correct Answer: B) Industrial Origin Approach. 46. The father of New Economics is A) J.M.Keynes. B) . Marshall. C) Adam Smith. D) Karl Marx. Show Answer Correct Answer: A) J.M.Keynes. 47. What is the relationship between GNP and national income? A) GNP is a component of national income. B) GNP is equal to national income. C) GNP includes national income. D) GNP and national income are unrelated. Show Answer Correct Answer: C) GNP includes national income. 48. In calculating national income, the construction of a public hospital is classified as A) Government expenditure. B) Private consumption. C) Private consumption. D) None of the above. Show Answer Correct Answer: A) Government expenditure. 49. Purchases of inventories by A) Firms are not counted in investment spending. B) Firms are also counted in investment spending. C) Households are also counted in investment spending. D) Households and Firms are also counted in investment spending. E) None of the above. Show Answer Correct Answer: B) Firms are also counted in investment spending. 50. How would an increase in consumer spending affect the expenditure approach calculation of GDP? A) Increase GDP. B) Decrease GDP. C) Decrease in exports. D) No change in GDP. Show Answer Correct Answer: A) Increase GDP. 51. What is the purpose of GNP accounting? A) To measure environmental sustainability. B) To assess income inequality. C) To evaluate economic performance and living standards. D) To analyze political stability. Show Answer Correct Answer: C) To evaluate economic performance and living standards. 52. The main factor that differentiates gross national product from net national product is ..... A) Depreciation. B) Net investment. C) Gross investment. D) Net factor income from abroad. Show Answer Correct Answer: D) Net factor income from abroad. 53. If you were tasked with designing a strategy to boost GDP growth using the expenditure approach, which action would be most appropriate? A) Launching infrastructure development projects. B) Implementing austerity measures to reduce government spending. C) Lowering interest rates to stimulate consumer borrowing. D) Increasing import tariffs to promote local production. Show Answer Correct Answer: A) Launching infrastructure development projects. 54. What is the purpose of the expenditure method of measuring national income? A) To measure incomes generated by production. B) To add up the flows of expenditure needed to purchase the nation's output. C) To estimate exports and imports. D) To calculate government expenditure. Show Answer Correct Answer: B) To add up the flows of expenditure needed to purchase the nation's output. 55. Which of the following is not a limitation of using GNP as an economic indicator? A) Includes net income from abroad. B) Accounts for environmental factors. C) Excludes non-market activities. D) Ignores income distribution. Show Answer Correct Answer: B) Accounts for environmental factors. 56. 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. Show Answer Correct Answer: B) Double Counting. 57. Which of the following is considered to be an investment in the national income accounts? A) Increases in inventories of unsold goods. B) Money deposited in a bank. C) Purchases of land. D) Purchases of Treasury bills. Show Answer Correct Answer: A) Increases in inventories of unsold goods. 58. Which of the following represents the difference between GNP at market prices and GDP at market prices? A) The value of taxes and subsidies. B) Net factor income from abroad. C) Depreciation. D) Indirect taxes. Show Answer Correct Answer: B) Net factor income from abroad. 59. Money which transferred from one group to another such as welfare payments, pensions and scholarship allowances. A) Payments from abroad. B) Transfer Payments. C) Per Capita Income. D) Disposable Personal Income. Show Answer Correct Answer: B) Transfer Payments. 60. National production means goods and services produced within the borders of a nation during a specified period. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. ← 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 2Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 3Class 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