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 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 5 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the formula for calculating Net National Product (NNP)? A) GNP + Depreciation. B) GDP-Depreciation. C) GNP-Depreciation. D) GDP + Depreciation. Show Answer Correct Answer: C) GNP-Depreciation. 2. Net exports are included in which of the following? A) GNP but not GDP. B) GDP but not GNP. C) Both GNP and GDP. D) Neither GNP nor GDP. Show Answer Correct Answer: A) GNP but not GDP. 3. An American buys a Japanese car, paying by writing a check on an account with a bank in New York. How would this be accounted for in the balance of payments? A) Current account, a Japanese good import. B) Current account, a U.S. good import. C) Financial account, a U.S. asset import. D) Financial account, a U.S. asset export. E) A current account as a U.S. good import and a financial account, a U.S. asset export. Show Answer Correct Answer: E) A current account as a U.S. good import and a financial account, a U.S. asset export. 4. Between 2014 and 2019, the world's economy total real product grew at an annual average rate of nearly ..... percent per year. A) 3.5. B) 3.9. C) 2.5. D) 2.9. Show Answer Correct Answer: A) 3.5. 5. Movements in GDP A) Differ greatly from movements in GNP. B) Do not differ greatly from movements in GNP. C) Are not allowed to differ at all from movements in GNP by definition. D) Need to be inflation adjusted in order to match movements in GNP. E) None of the above. Show Answer Correct Answer: B) Do not differ greatly from movements in GNP. 6. Disposable personal income can best be defined as ..... A) The actual income received by households. B) Income received by household after deducting personal taxes. C) Income received by resource suppliers for their current contribution to ptoduction. D) None of the above. Show Answer Correct Answer: B) Income received by household after deducting personal taxes. 7. Which of the following is not one of the classifications of factor incomes? A) Compensation of employees. B) Mixed income. C) Subsidies. D) Operating surplus. Show Answer Correct Answer: C) Subsidies. 8. An example of a Government spending flow would be A) Subsidies. B) Wages. C) Building roads. D) Transfer payments. Show Answer Correct Answer: C) Building roads. 9. Why are the intermediate goods not included in the National Income while measuring National Income? A) To avoid double accounting. B) It decreases income. C) Intermediate goods are not good. D) All of these. Show Answer Correct Answer: A) To avoid double accounting. 10. Calculate Net value added at factor cost from the following data:Items-Rs. (in lakhs)1. Purchase of machinery to be used in the production unit-1002. Sales-2003. intermediate cost-904. Indirect taxes-125. Change in stock-106. excise duty-67. stock of raw material-5 A) Rs. 182 lakhs. B) Rs. 208 lakhs. C) Rs. 108 lakhs. D) Rs. 282 lakhs. Show Answer Correct Answer: C) Rs. 108 lakhs. 11. When will the NI be greater than DFI? A) Net factor income from abroad is zero. B) Net factor income from abroad is positive. C) Net factor income from abroad is negative. D) None of the above. Show Answer Correct Answer: B) Net factor income from abroad is positive. 12. Net national product does not include ..... A) Depreciation. B) Taxes on corporate profits. C) Interest on consumer loans. D) Undistributed corporate profit. Show Answer Correct Answer: A) Depreciation. 13. Assess the consequences of a decrease in exports on a country's balance of payments. A) No impact on balance of payments. B) Trade surplus increases. C) Increase in imports. D) Trade deficit increases. Show Answer Correct Answer: D) Trade deficit increases. 14. Which of the following is added to national income while calculating personal income? A) Social security contributions. B) Undistributed profits. C) Corporate taxes. D) Transfer payments to individuals. Show Answer Correct Answer: D) Transfer payments to individuals. 15. The income that is received by individuals and households in an economy in a year. A) Per Capita Income. B) Disposable Personal Income. C) Real National Income. D) Personal income. Show Answer Correct Answer: D) Personal income. 16. What is the main problem associated with the Expenditure Method? A) Market Price Measure vs. Factor Income Measure. B) Market Price Measure vs. Factor Cost Measure. C) Market Price Measure vs. Factor Loss Measure. D) Market Price Measure vs. Factor Profit Measure. Show Answer Correct Answer: B) Market Price Measure vs. Factor Cost Measure. 17. Which of the following is an example of STOCKS? A) Capital. B) Value addition. C) Savings. D) Both capital and savings. Show Answer Correct Answer: A) Capital. 18. Government transfer payments like social security and unemployment benefits are A) Included in government purchases. B) Not included in government purchases. C) Not included in government purchases, but they are included in the consumption component of GNP. D) Not included in government purchases, but they are part of the investment component of GNP. E) None of the above. Show Answer Correct Answer: B) Not included in government purchases. 19. An example of how GNP accounts for services provided by foreign-owned capital (and GDP does not) is A) Earnings of Spanish factory with British owners counts only in Spain's GDP. B) Earnings of Spanish factory with British owners counts only in Britain's GNP. C) Earnings of Spanish factory counts in Spain's GNP but are part of Britain's GDP. D) Earnings of Spanish factory counts in Spain's GDP but are part of Britain's GNP. E) None of the above. Show Answer Correct Answer: D) Earnings of Spanish factory counts in Spain's GDP but are part of Britain's GNP. 20. Comparing national income between ASEAN countries is difficult mainly due to: A) Similar culture and traditions. B) Different economic structures and population sizes. C) Equal education levels. D) Shared natural resources. Show Answer Correct Answer: B) Different economic structures and population sizes. 21. To adjust from Net National Product to Gross National Product: A) Deduct indirect taxes. B) Add inflation. C) Add subsidies. D) Add depreciation. Show Answer Correct Answer: D) Add depreciation. 22. What does Disposable Personal Income (DPI) refer to? A) Total income before taxes. B) Income from government grants. C) Income after personal direct taxes. D) Income from investments. Show Answer Correct Answer: C) Income after personal direct taxes. 23. What is the purpose of adjusting GDP to Real GDP? A) To account for population changes. B) To account for inflation. C) To exclude government spending. D) To include nonmarket activities. Show Answer Correct Answer: B) To account for inflation. 24. Which approach calculates GDP by adding up the spending on final goods and services? A) Expenditure approach. B) Value added approach. C) Production approach. D) Income approach. Show Answer Correct Answer: A) Expenditure approach. 25. Intermediate goods are not included to calculate National Income because: A) They do not have value. B) They are with in the boundary line of production. C) Their value is included in final goods so they are not added to avoid the problem of double counting. D) None of the above. Show Answer Correct Answer: C) Their value is included in final goods so they are not added to avoid the problem of double counting. 26. Circular flow of income in a two sector economy is based on the axiom that one's expenditure is other's income A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 27. Which of the following items is not counted in GDP calculations? A) A salesman's commission on a used car. B) The sale of used goods. C) The price of a haircut. D) Newly purchased equipment. Show Answer Correct Answer: B) The sale of used goods. 28. A system of statistics and accounts that keep tracks of production, consumption, savings and investment of the economy A) National Income. B) GDP. C) Net Export. D) GNP. Show Answer Correct Answer: A) National Income. 29. National income accounting provides a framework for measuring and tracking: A) The distribution of income in a country. B) The level of employment in a country. C) The value of a country's currency on international markets. D) The total population of a country. Show Answer Correct Answer: A) The distribution of income in a country. 30. GNP measures the total output produced by A) Foreign residents within a country's borders. B) Residents of a country, whether located domestically or abroad. C) Domestic businesses only. D) Non-residents working in the country. Show Answer Correct Answer: B) Residents of a country, whether located domestically or abroad. 31. Which of the following statements is NOT true regarding the expenditure approach? A) It measures the total income earned by households. B) It measures the total spending on goods and services. C) It includes government purchases. D) It yields the same results as the income approach. Show Answer Correct Answer: A) It measures the total income earned by households. 32. The income received by those who financed the acquisition of physical capital A) Profit. B) Interest. C) Wages or Salaries. D) Rent. Show Answer Correct Answer: B) Interest. 33. What is the basic function of national income accounting? A) To measure the total exports of a country. B) To determine the literacy rate of a country. C) To calculate the total population of a country. D) To identify specific economic achievements of a country and provide an objective basis of evaluation and review of policies under implementation. Show Answer Correct Answer: D) To identify specific economic achievements of a country and provide an objective basis of evaluation and review of policies under implementation. 34. The expenditure approach focuses on analyzing the total ..... in the economy. A) Production. B) Spending. C) Investments. D) Profits. Show Answer Correct Answer: B) Spending. 35. A person or an institution who normally resides in country and whose economic interest lies in that country is known as: A) Normal Resident of a country. B) Non-resident of a country. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: A) Normal Resident of a country. 36. Product method of calculating national income is also known as A) Income method. B) Distribution method. C) Expenditure method. D) Value added method. Show Answer Correct Answer: D) Value added method. 37. Income that is actually received by individuals and households in a nation during a year. A) Personal Income. B) National Income. C) Disposable Personal Income. D) Income tax. Show Answer Correct Answer: A) Personal Income. 38. Depreciation is associated with: A) Fixed capital. B) Human capital. C) Working capital. D) None of these. Show Answer Correct Answer: A) Fixed capital. 39. When a nation's imports exceed its exports and is calculated as imports-exports A) Trade deficit. B) Inventory. C) Trade surplus. D) Gross domestic product. Show Answer Correct Answer: A) Trade deficit. 40. A country's real national income per head increases.What could explain why this might be accompanied by a fall in households' standard of living? A) A decrease in the working age population. B) An increase in the trade deficit. C) A decrease in state welfare payments. D) An increase in the consumer price index. Show Answer Correct Answer: C) A decrease in state welfare payments. 41. Calculate GDP$_{MP}$ from the given data:Items-Rs (in crores)1. Gross domestic fixed investment-1502. Increase in Inventories-253. Govt. final consumption expenditure-1254. Export of goods and services-855. Import of goods and services-1056. Personal disposable income-2, 150 A) Rs. 300 cr. B) Rs. 2430 cr. C) Rs. 470 cr. D) Rs. 280 cr. Show Answer Correct Answer: B) Rs. 2430 cr. 42. What is the problem of Non-monetized sector in calculating National Income? A) Existence of a large number of non-monetized activities in the agriculture sector. B) Existence of a large number of non-monetized activities in the technology sector. C) Existence of a large number of non-monetized activities in the industrial sector. D) Existence of a large number of non-monetized activities in the service sector. Show Answer Correct Answer: A) Existence of a large number of non-monetized activities in the agriculture sector. 43. What is the main purpose of national income accounting? A) To calculate individual income. B) To analyze stock market trends. C) To maximize material welfare of the people. D) To measure inflation rate. Show Answer Correct Answer: C) To maximize material welfare of the people. 44. GNP per capita is calculated by dividing GNP by A) Total exports. B) Labor force. C) Inflation rate. D) Population. Show Answer Correct Answer: D) Population. 45. Which of the following is a problem in calculating National Income? A) Accurate data collection. B) Non-monetized sector. C) High literacy rates. D) Advanced technology. Show Answer Correct Answer: B) Non-monetized sector. 46. When analyzing the components of GDP using the income approach, which of the following would be categorized under factor payments? A) Government subsidies. B) Business investments. C) Rent payments. D) Household savings. Show Answer Correct Answer: C) Rent payments. 47. Consider the following statements and identify the right ones.i. The data for NI and PCI are collected at current prices.ii. They are deflated using the deflator index to get value at constant prices. A) I only. B) Ii only. C) Both. D) None. Show Answer Correct Answer: C) Both. 48. For purposes of calculating GDP, which of the following payments is not included in the government spending component? A) Wages paid by a local government to its road crew. B) Social security payments. C) Wages paid by a state government to the workers in its welfare department. D) The federal government's purchase of a submarine from a shipbuilder. Show Answer Correct Answer: B) Social security payments. 49. According to Robbins, Economics is a: A) Natural Science. B) Positive Science. C) Normative Science. D) Social Science. Show Answer Correct Answer: B) Positive Science. 50. Macroeconomic analysis emphasizes four aspects of economic life which are A) Unemployment, saving, trade imbalances, money and the price level. B) Market structures, social inequality, inflation, balance of payments. C) Firms' competition, growth, trade imbalances, inflation. D) Happiness and utilities, trade imbalances, equality, GDP growth. Show Answer Correct Answer: A) Unemployment, saving, trade imbalances, money and the price level. 51. Which is not a component of operating surplus? A) Rent. B) Wages. C) Profit. D) Interest. Show Answer Correct Answer: B) Wages. 52. Which of the following differentiate between domestic income and national income? A) NFIA. B) NVA. C) NIT. D) NDP. Show Answer Correct Answer: A) NFIA. 53. Real gross domestic product is a measure of the A) Value of final output produced within a country in one year, using current prices. B) Average price level in the economy. C) Total value of available resources in a nation. D) Value of final output produced within a country in one year, adjusted for changing prices. Show Answer Correct Answer: D) Value of final output produced within a country in one year, adjusted for changing prices. 54. In the income approach, which of the following is NOT included in calculating national income? A) Wages and salaries. B) Rent. C) Transfer payments. D) Profits. Show Answer Correct Answer: C) Transfer payments. 55. Value of output = A) Sales. B) Sales + change in stock. C) Both. D) None of these. Show Answer Correct Answer: B) Sales + change in stock. 56. National Income of a country can be calculated by A) 5 methods. B) 3 methods. C) 2 methods. D) 4 methods. Show Answer Correct Answer: B) 3 methods. 57. Which of the following is a limitation of GNP? A) It doesn't account for income from abroad. B) It considers environmental factors. C) It includes non-market activities. D) It measures income inequality. Show Answer Correct Answer: C) It includes non-market activities. 58. Which of the following is added to GDP at market prices to obtain GNP at market prices A) Indirect taxes. B) Net factor income from abroad. C) Depreciation. D) Subsidies. Show Answer Correct Answer: B) Net factor income from abroad. 59. Which of the following is a component of GDP but not of GNP? A) Household consumption. B) Government spending. C) Net exports. D) Foreign investment income. Show Answer Correct Answer: C) Net exports. 60. Disposable income is national income A) Less taxes collected from households and firms by the government. B) Plus net taxes collected from households and firms by the government. C) Less net taxes collected from firms by the government. D) Less net taxes collected from households by the government. E) Less net taxes collected from households and firms by the government. Show Answer Correct Answer: E) Less net taxes collected from households and firms by the government. ← 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 4Class 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