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 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 8 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Net National Income at Factor Cost is called? A) National Income. B) Gross Investment. C) Domestic Income. D) None of these. Show Answer Correct Answer: A) National Income. 2. Net National Product at market price is greater than net National Product at factor cost when: A) Indirect tax is greater than subsidies. B) Indirect tax is less than subsidies. C) Indirect tax is equal to subsidies. D) None of these. Show Answer Correct Answer: A) Indirect tax is greater than subsidies. 3. What are Economic Indicators used for in business? A) To assess the economic viability of a business location. B) To predict the weather patterns for a business location. C) To calculate the exact profit a business will make. D) To determine the aesthetic value of a business location. Show Answer Correct Answer: A) To assess the economic viability of a business location. 4. What is the main factor that enables the sale of goods and services in the market? A) Demand for the products. B) Government regulations. C) Availability of natural resources. D) Level of savings in the economy. Show Answer Correct Answer: A) Demand for the products. 5. Which of the following is not included in GNP calculations? A) Depreciation of capital. B) Net exports. C) Investment spending. D) Government transfer payments. Show Answer Correct Answer: D) Government transfer payments. 6. The industrial origin approach provides insights into the contribution of different ..... to the overall national income. A) Investments. B) Individuals. C) Companies. D) Sectors. Show Answer Correct Answer: D) Sectors. 7. Net national product at factor cost is also known as: A) Net Domestic product. B) Gross National product. C) Personal Income. D) National Income. Show Answer Correct Answer: D) National Income. 8. Collects taxes, spends on public goods, and gives subsidies or transfers. A) REST OF THE WORLD. B) GOVERNMENT. C) HOUSEHOLD SECTOR. D) FIRM. Show Answer Correct Answer: B) GOVERNMENT. 9. Pocket money received by a student from his parents is included in A) Transfer income. B) Money income. C) Domestic income. D) Factor income. Show Answer Correct Answer: A) Transfer income. 10. Which approach to National Income Accounting helps assess the relative importance of different industries in the economy? A) Industrial Origin Approach. B) Income Approach. C) Expenditure Approach. D) Factor Approach. Show Answer Correct Answer: A) Industrial Origin Approach. 11. Which method of measuring income looks at GDP from the perspectives of sum of incomes received from the production of the output? A) Output Approach. B) Expenditure Approach. C) Income Approach. D) Product Approach. Show Answer Correct Answer: C) Income Approach. 12. The income approach calculates national income by summing up all the incomes earned by individuals and businesses, including profits, rents, and ..... A) Wages and Salaries. B) Taxes. C) Debts. D) Investments. Show Answer Correct Answer: A) Wages and Salaries. 13. What does the term 'capital deepening' refer to? A) A decrease in the amount of capital per worker. B) An increase in the number of workers. C) A decrease in the number of workers. D) An increase in the amount of capital per worker. Show Answer Correct Answer: D) An increase in the amount of capital per worker. 14. Indirect taxes are added when calculating GDP at market price. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 15. National income should be measure by adding ..... to avoid the double counting problem. A) Total sales of final and intermediate products. B) Total sales of intermediate product. C) Total sales of final product. D) Total cost of final product. Show Answer Correct Answer: C) Total sales of final product. 16. Pollution is an example for ..... externality. A) Positive. B) Negative. C) All the above. D) None of the above. Show Answer Correct Answer: B) Negative. 17. The difference between the earnings from exports and the earnings from import of a specific economy A) Net Export. B) GNP. C) National Income. D) GDP. Show Answer Correct Answer: A) Net Export. 18. What is the Income Method used for in measuring National Income? A) Measuring incomes generated by production, including wages, salaries, and returns on capital. B) Measuring the GDP of a country. C) Measuring the total population of a country. D) Measuring the profits of a company. Show Answer Correct Answer: A) Measuring incomes generated by production, including wages, salaries, and returns on capital. 19. The purchase of machinery and equipment used in the production by firms is called A) Consumption expenditures. B) Government expenditures. C) Net export. D) Investment expenditures. Show Answer Correct Answer: D) Investment expenditures. 20. Primary sector comprises ..... A) Manufacturing, construction, utility supply such as electricity, gas and water. B) Agriculture, forestry, fishing, mining, farming. C) Banking, transportation, communication, wholesale, retailling. D) Services and banking. Show Answer Correct Answer: B) Agriculture, forestry, fishing, mining, farming. 21. In calculating national income, the construction of a hospital is classified as a(n) ..... A) Investment expenditure. B) Government expenditure. C) Private consumption expenditure. D) None of the above. Show Answer Correct Answer: B) Government expenditure. 22. In an open economy, private saving, Sp, is equal to A) I + CA + (G-T). B) I + CA-(G-T). C) I-CA-(G-T). D) I-CA + (G-T). E) I + CA + (G + T). Show Answer Correct Answer: A) I + CA + (G-T). 23. The formula for calculating GDP using the expenditure approach includes all of the following components except A) Government Spending. B) Consumption. C) Investment. D) Savings. Show Answer Correct Answer: D) Savings. 24. What are the limitations of GDP and GNI in depicting the overall health of an economy? A) They provide a complete picture of income distribution. B) They consider the environmental impact of production. C) They only convey information about production and ignore income distribution and poverty. D) They focus on individual well-being. Show Answer Correct Answer: C) They only convey information about production and ignore income distribution and poverty. 25. Calculate the intermediate consumption from the following data:Items-Rs (in crores)1. Value of output-2002. Net value added at factor cost-803. Sales tax-154. Subsidy-55. Depreciation-20 A) Rs. 75 cr. B) Rs. 90 cr. C) Rs. 70 cr. D) Rs.105 cr. Show Answer Correct Answer: B) Rs. 90 cr. 26. The sector providing factors of production for creating end goods or service A) Agriculture. B) Industry. C) Informal. D) Service. Show Answer Correct Answer: A) Agriculture. 27. When analyzing the expenditure approach to GDP calculation, which of the following represents government spending on infrastructure projects? A) C. B) I. C) X-M. D) G. Show Answer Correct Answer: D) G. 28. Identify the method used to measure the change of price in an economy? A) Consumer price index. B) Economy price index. C) Normal price index. D) Trading price index. Show Answer Correct Answer: A) Consumer price index. 29. Increase in Stock of Capital is known as: A) Capital Loss. B) Capital Profit. C) Capital Formation. D) None of the above. Show Answer Correct Answer: C) Capital Formation. 30. Gross Domestic Product is equal to sum of consumption expenditure, investment, government purchases and profits. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 31. When calculating national output, economists distinguish between values measured at current market prices and those adjusted to constant base-year prices to remove inflation effects. What are these two approaches commonly called in national income concepts? A) Nominal GDP and Real GDP. B) GROSS AND NET PRODUCT. C) FACTOR AND MARKET COST. D) PERSONAL AND DISPOSABLE INCOME. Show Answer Correct Answer: A) Nominal GDP and Real GDP. 32. In the United States, (gross) investment has fluctuated between ..... of GNP in recent years. A) 2 and 12 percent. B) 11 and 22 percent. C) 22 and 32 percent. D) 32 and 42 percent. E) 42 and 52 percent. Show Answer Correct Answer: B) 11 and 22 percent. 33. Double counting is one of the problems in calculating national income accounting. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 34. Which of the following is a widely used measure of the standard of living? A) NNP fc. B) Percapita Nominal GDP. C) Per-capita real GDP. D) GDP mp. Show Answer Correct Answer: C) Per-capita real GDP. 35. Devise a strategy to address the limitation of GNP in excluding non-market activities. A) Create a separate index for non-market activities. B) Ignore non-market activities. C) Include household work in GNP calculations. D) Adjust GDP to account for non-market activities. Show Answer Correct Answer: C) Include household work in GNP calculations. 36. Net National Product (NNP) is calculated by: A) Subtracting indirect taxes from Gross Domestic Product (GDP). B) Adding indirect taxes to Gross National Product (GNP). C) Adding depreciation to Gross Domestic Product (GDP). D) Subtracting depreciation from Gross National Product (GNP). Show Answer Correct Answer: D) Subtracting depreciation from Gross National Product (GNP). 37. What is the total market value of all final goods and services produced by the residents of a country during a given period of time? A) GDP. B) NNP. C) GNC. D) GNP. Show Answer Correct Answer: D) GNP. 38. Evaluate the effect of a decrease in consumer confidence on GDP growth. A) No impact on GDP growth. B) Increase in GDP growth. C) Decrease in GDP growth. D) Decrease in exports. Show Answer Correct Answer: C) Decrease in GDP growth. 39. Who calculated National income and it's Aggregates in India? A) RBI. B) Govt of India. C) NSSO. D) CSO. Show Answer Correct Answer: C) NSSO. 40. Flow of factor services from households to firms and the flow of goods and services from firms to households is called A) Money flow. B) Product flow. C) Real flow. D) Income flow. Show Answer Correct Answer: C) Real flow. 41. DEPRECIATION refers to A) Loss of value of consumer goods due to consumption. B) Loss value of capital goods due to unforeseen incidents. C) Loss of value of capital goods due to normal wear and tear and expected obsolescence. D) Loss of assets made intentionally. Show Answer Correct Answer: C) Loss of value of capital goods due to normal wear and tear and expected obsolescence. 42. National income at current prices will be greater than national income at fixed prices when ..... A) National imports exceed exports. B) National exports exceed imports. C) Unemployment occurs in an economy. D) Inflation occurs in an economy. Show Answer Correct Answer: D) Inflation occurs in an economy. 43. Sugar purchased by a Sweet shop is an ..... good, it is a ..... good when it is purchased by a consumer. A) Intermediate, final. B) Capital, final. C) Final, producer. D) Final, intermediate. Show Answer Correct Answer: A) Intermediate, final. 44. Calculate the personal disposable income from the following data:Items-Rs (in crores)1. Private income-20002. Net retained earning of private enterprises-6003. Direct tax paid by households-2004. Corporation tax-3505. National debt interest-250 A) Rs.1250 cr. B) Rs.1050 cr. C) Rs. 600 cr. D) Rs. 850 cr. Show Answer Correct Answer: D) Rs. 850 cr. 45. What is the definition of National Income? A) The total payment received by the factors of production in a country during a year. B) The total money value of all final goods and services produced in a country. C) The total value of imports and exports in a year. D) The total income earned by the government in a year. Show Answer Correct Answer: A) The total payment received by the factors of production in a country during a year. 46. Which method of measuring National Income includes Consumption, Government Spending, and Investment? A) Income Approach. B) Product Approach. C) Market Price Approach. D) Expenditure Approach. Show Answer Correct Answer: D) Expenditure Approach. 47. Which of the following is not an intermediate good for a former? A) Seeds. B) Fertilizer. C) Tractor. D) All of these. Show Answer Correct Answer: C) Tractor. 48. Building up its capital stock or by acquiring foreign wealth. A) Cannot save either by building up its capital stock or by acquiring foreign wealth. B) Can save only by acquiring foreign wealth. C) Can save by avoiding excessive imports. D) Can save only by building up its capital stock. E) Can save only by building up its capital stock or by acquiring foreign wealth. Show Answer Correct Answer: D) Can save only by building up its capital stock. 49. Transfer payment are included in ..... A) Gross National Product. B) Gross Domestic Product. C) Personal Income. D) National Income. Show Answer Correct Answer: C) Personal Income. 50. What does the GDP Deflator measure? A) Cost of a given bundle of goods in one year relative to a predetermined base year. B) Total population growth rate. C) Total exports and imports. D) Total government debt. Show Answer Correct Answer: A) Cost of a given bundle of goods in one year relative to a predetermined base year. 51. Below are the value involved in calculating GDP at market price using expenditure approach EXCEPT: A) Household consumption. B) Public expenditure. C) Private investment. D) Salaries. Show Answer Correct Answer: D) Salaries. 52. The percentage change in quantity of goods and services produced from one year to another is called ..... A) Real income. B) Growth rate. C) Gross Domestic Product. D) Per Capita Income. Show Answer Correct Answer: B) Growth rate. 53. What is the purpose of calculating net investment? A) To measure the wear and tear of capital goods. B) To determine the value of intermediate goods. C) To estimate the value of final goods. D) To calculate the value of consumer durables. Show Answer Correct Answer: A) To measure the wear and tear of capital goods. 54. Gross Domestic Product is equal to the sum of consumption expenditure, investment, government purchases and ..... A) Savings. B) Profits. C) Net exports. D) Net taxes. Show Answer Correct Answer: C) Net exports. 55. Which of the following sector is not included in circular flow within an economy? A) Individual sector. B) Production sector. C) Government sector. D) Household sector. Show Answer Correct Answer: A) Individual sector. 56. A country's national income data can be compared more accurately if: A) It considers purchasing power parity (PPP). B) It excludes services sector. C) It ignores inflation differences. D) It uses market exchange rates only. Show Answer Correct Answer: A) It considers purchasing power parity (PPP). 57. If the gross domestic product at market price is greater than the gross domestic product at factor cost, this means that ..... A) Indirect taxes are greater than subsidies. B) Indirect taxes are smaller than subsidies. C) Indirect taxes are positive. D) Factor income paid abroad is positive. Show Answer Correct Answer: A) Indirect taxes are greater than subsidies. 58. Indirect tax-Subsidies = ..... A) Net indirect tax. B) NFIA. C) NSD. D) NONE OF THE ABOVE. Show Answer Correct Answer: A) Net indirect tax. 59. The factor income approach is another name for which approach to National Income Accounting? A) Income Approach. B) Industrial Origin Approach. C) Expenditure Approach. D) Factor Approach. Show Answer Correct Answer: A) Income Approach. 60. GNP measured in current prices. A) Nominal GNP. B) Real GNP. C) Real GDP. D) Real Income. Show Answer Correct Answer: A) Nominal GNP. ← 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 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books