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 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 9 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How would a decrease in consumer spending and an increase in government spending affect GDP calculated using the expenditure approach? A) Decrease GDP. B) No change in GDP. C) Increase GDP. D) Increase in exports. Show Answer Correct Answer: C) Increase GDP. 2. Which of the following statements was announced by Ireland's Central Statistics Office on July 12, 2016? A) Ireland's real GDP had risen by 26.3 percent between 2014 and 2015. B) Ireland's real GDP had risen by 7.8 percent between 2014 and 2015. C) Ireland's real GDP had risen by 5.8 percent between 2014 and 2015. D) Ireland's real GDP had risen by 2.3 percent between 2014 and 2015. Show Answer Correct Answer: A) Ireland's real GDP had risen by 26.3 percent between 2014 and 2015. 3. If we compare GDP and GNP, then: A) GNP = GDP + net income from abroad. B) GNP = GDP-net income from abroad. C) GNP = NNP + net income from abroad. D) GNP = NNP-net income from abroad. Show Answer Correct Answer: A) GNP = GDP + net income from abroad. 4. When the gross national product is calculated using the expenditure method, the value calculated is ..... A) Gross domestic product at factor cost. B) Gross national product at market price. C) Gross domestic product at market price. D) Gross national product at factor cost. Show Answer Correct Answer: C) Gross domestic product at market price. 5. Which of the following is an example of macroeconomics? A) Consumer's equilibrium. B) Inflation. C) Producer's equilibrium. D) Price determination. Show Answer Correct Answer: B) Inflation. 6. Which factor is not considered in the calculation of Real GNP? A) Population growth. B) Inflation. C) Government spending. D) Foreign investment. Show Answer Correct Answer: D) Foreign investment. 7. A clerk earns a monthly salary of RM1200. He then changes job and works for a different firm, earning a monthly salary of RM2500. From his new salary, he pays RM500 per month to his housekeeper. Calculate the change in national income? A) RM2500. B) RM4200. C) RM1800. D) RM1300. Show Answer Correct Answer: C) RM1800. 8. Two related and essential tools to get a complete picture of the macroeconomic linkages among economies that engage in international trade include A) National income accounting and balance of payment accounting. B) Public accounting and government accounting. C) Foreign currency accounting and balance of payment accounting. D) Corporate accounting and foreign exchange accounting. Show Answer Correct Answer: A) National income accounting and balance of payment accounting. 9. Real GDP is considered as an index of A) Price level in the economy. B) Welfare of the people. C) Profit maximization. D) None of these. Show Answer Correct Answer: B) Welfare of the people. 10. If a country's GDP is $ 700 billion and net income from abroad is-$ 10 billion, what is the country's GNP? A) $ 690 billion. B) $ 700 billion. C) $ 710 billion. D) $ 710 million. Show Answer Correct Answer: A) $ 690 billion. 11. Activities that are illegal are EXCLUDED from the calculation of national income in certain countries such as gambling. A) Yes. B) No. C) All the above. D) None of the above. Show Answer Correct Answer: A) Yes. 12. Which approach to National Income Accounting focuses on calculating national income by summing up all the incomes earned by individuals and businesses within the economy? A) Industrial Origin Approach. B) Factor Approach. C) Expenditure Approach. D) Income Approach. Show Answer Correct Answer: D) Income Approach. 13. What does Money GNP measure? A) The actual quantity of goods produced. B) The value of goods and services at current market prices. C) The level of inflation in the economy. D) The total income earned by citizens abroad. Show Answer Correct Answer: B) The value of goods and services at current market prices. 14. Measuring the sum total of all factor payments will be called, A) Income method. B) Output method. C) Product method. D) Expenditure method. Show Answer Correct Answer: A) Income method. 15. In the context of national income accounting, what would be an example of an intermediate good? A) Computers used in an office. B) Bread sold at a bakery. C) Office furniture purchased by a company. D) Flour used to make bread. Show Answer Correct Answer: D) Flour used to make bread. 16. In 1959, government purchases accounted for A) 38.5 percent of U.S. GNP. B) 48.5 percent of U.S. GNP. C) 8.5 percent of U.S. GNP. D) 22 percent of U.S. GNP. E) 18 percent of U.S. GNP. Show Answer Correct Answer: D) 22 percent of U.S. GNP. 17. Net National Product equals net domestic product when: A) Factor income from abroad is greater than factor income to abroad. B) Factor income from abroad is less than factor income to abroad. C) Factor income from abroad is equal to factor income to abroad. D) None of these. Show Answer Correct Answer: C) Factor income from abroad is equal to factor income to abroad. 18. Gross Domestic Product at market price measures the monetary value of all final goods and services produced within a country's borders in one year, including indirect taxes and excluding subsidies. Which of the following terms correctly identifies this concept? A) GROSS DOMESTIC PRODUCT AT MARKET PRICE. B) NET DOMESTIC PRODUCT. C) REAL INCOME. D) NATIONAL INCOME. Show Answer Correct Answer: A) GROSS DOMESTIC PRODUCT AT MARKET PRICE. 19. Calculates national income as the total value added at each stage of production, avoiding duplication. A) Product (Output/Value Added) Method. B) Income (Factor Payment) Method. C) Expenditure Method. D) ALL OF THE ABOVE. Show Answer Correct Answer: A) Product (Output/Value Added) Method. 20. If factor cost is equal to market price, then it means that: A) Indirect Taxes is greater than Subsidies. B) Indirect Taxes is equal to Subsidies. C) Indirect Taxes is less than Subsidies. D) None of these. Show Answer Correct Answer: B) Indirect Taxes is equal to Subsidies. 21. What is the problem of Double Counting in calculating National Income? A) No possibility of intermediate goods being included in the national income more than once. B) High possibility of intermediate goods being included in the national income more than once. C) Limited possibility of intermediate goods being included in the national income more than once. D) Possibility of intermediate goods being included in the national income more than once. Show Answer Correct Answer: D) Possibility of intermediate goods being included in the national income more than once. 22. A U.S. citizen buys a newly issued share of stock in England, paying for his order with a check, which the British company deposits in its own U.S. bank account in New York. How is this transaction accounted for in the balance of payments? A) Financial account, British asset import. B) Current account, British good export. C) Current account, U.S. service import. D) Financial account, U.S. asset export. E) Financial account, U.S. asset import. Show Answer Correct Answer: E) Financial account, U.S. asset import. 23. The real GNP is estimated on the basis of ..... A) Next Year Price. B) Constant Year price. C) Current Year. D) Previous Year price. Show Answer Correct Answer: B) Constant Year price. 24. The income of unincorporate business either sole proprietorship or partnership is defined as proprietor's income. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 25. ..... is the flow of money between firms and households. A) Circular Flow. B) Money flow. C) Real flow. D) None of the above. Show Answer Correct Answer: B) Money flow. 26. Which one of the following expressions is the most accurate? A) CA = EX-IM. B) CA = IM-EX. C) CA = EX = IM. D) CA = EX + IM. E) None of the above. Show Answer Correct Answer: A) CA = EX-IM. 27. Net unilateral transfers A) Are part of a national income. B) Are part of a country's product. C) Must be added to NNP in calculations of national income. D) Are part of a country's GNP. E) Only A and C. Show Answer Correct Answer: E) Only A and C. 28. The value of national output produced by residents located within the country, before depreciation and including the influence of taxes and subsidies, is known as: A) GDP at market prices. B) GNP at market prices. C) GDP at factor cost. D) GNP at factor cost. Show Answer Correct Answer: A) GDP at market prices. 29. Scarcity of resources implies that: A) People are greedy. B) We should curtail our wants. C) We should increase resources. D) We cannot satisfy all wants at the same time. Show Answer Correct Answer: D) We cannot satisfy all wants at the same time. 30. Read the following statements and choose the correct alternatives among those given below:Statement 1:Gross investment includes only inventory. Statement 2:Gross investment shows net addition to the existing capital stock. A) Both the statements are true. B) Both the statements are false. C) Statement 1 is true and statement 2 is false. D) Statement 2 is true and statement 1 is false. Show Answer Correct Answer: D) Statement 2 is true and statement 1 is false. 31. Milk Purchased by households for consumption is an example of Final Goods. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 32. Goods like food clothing, and services like recreation that are consumed when purchased by their ultimate consumer are called ..... A) Capital goods. B) Consumer goods. C) Intermediate goods. D) None of the above. Show Answer Correct Answer: B) Consumer goods. 33. National incomes which have been adjusted by deducting the value of subsidies and adding the amount of indirect taxes. (-) subsidies, (+) tax A) At constant prices. B) At market price. C) At factor cost. D) At current prices. Show Answer Correct Answer: B) At market price. 34. The main factor that differentiates gross domestic product from gross national product is ..... A) Inflow and outflow of capital. B) Income from investment. C) Foreign investment. D) Exports and imports of goods. Show Answer Correct Answer: C) Foreign investment. 35. Government provides social security benefits such as unemployment allowance, old-age pensions also known as ..... A) Undistributed profit. B) National Income. C) Transfer payment. D) Gross Domestic Product. Show Answer Correct Answer: C) Transfer payment. 36. The difference between gross national income and gross domestic income is ..... A) Subsidies. B) Net factor income from abroad. C) Depreciation. D) Indirect taxes. Show Answer Correct Answer: B) Net factor income from abroad. 37. What is the total market value of all final goods and services produced within a given period of time by factors of production located within a country? A) GDB. B) GDP. C) NNP. D) GNP. Show Answer Correct Answer: B) GDP. 38. The position of the United States current account balance in 2009 was A) Borrowed over 9 percent of its GNP, leading to a large current account deficit. B) Lent over 6 percent of its GNP, resulting in a large current account surplus. C) Borrowed over 10 percent of its GNP, leading to a large current account deficit. D) Achieved a currant account balance of zero. E) Borrowed less then 5 percent of its GNP, leading to a large current account surplus. Show Answer Correct Answer: A) Borrowed over 9 percent of its GNP, leading to a large current account deficit. 39. The level of economic welfare of a country is indicated by the ..... A) Gross national product per capita data. B) Per capita income data. C) National income data. D) Net national product data. Show Answer Correct Answer: B) Per capita income data. 40. In a four-sector economy, which of the following is included? A) Households, firms, government, and international sector. B) Households, firms, banks, and government. C) Households, firms, banks, and international sector. D) Households, firms, banks, and NGOs. Show Answer Correct Answer: A) Households, firms, government, and international sector. 41. Which one of the following is not included in NI? A) Retirement pension. B) Bonus. C) Old age pension. D) Wages. Show Answer Correct Answer: C) Old age pension. 42. Which of the following is not a component of the income approach in National Income Accounting? A) Wages and Salaries. B) Profits. C) Taxes. D) Rents. Show Answer Correct Answer: C) Taxes. 43. In GNP calculation which of the following should be excluded? A) Government transfer payment. B) Dividends. C) Rental incomes. D) Interest payments. Show Answer Correct Answer: A) Government transfer payment. 44. Evaluate the impact of an increase in imports on a country's GNP. A) Impact depends on other factors. B) Decrease GNP. C) Increase GNP. D) No impact on GNP. Show Answer Correct Answer: D) No impact on GNP. 45. Which service is included in Tertiary Sector? A) Mining. B) Construction. C) Communication. D) Animal Husbandry. Show Answer Correct Answer: C) Communication. 46. In the context of the industrial origin approach, what innovative method could be devised to enhance the contribution of the service sector to national income? A) Offering tax breaks to service sector businesses. B) Introducing vocational training programs for service industry workers. C) Investing in advanced technology for service delivery. D) Encouraging partnerships between service firms and universities for research. Show Answer Correct Answer: C) Investing in advanced technology for service delivery. 47. The study of national income is related to A) Micro economics. B) Macro economics. C) All the above. D) None of the above. Show Answer Correct Answer: B) Macro economics. 48. What are the two reasons people buy goods for? A) To increase taxes. B) To support local businesses. C) Intermediate goods and final goods. D) To reduce production costs. Show Answer Correct Answer: C) Intermediate goods and final goods. 49. When economists estimate Gross Domestic Product using the income approach, which types of income are included? A) Rent, wages, interest, and profit. B) Profit, depreciation, and interest. C) Wages, interest, and taxes. D) Profit, wages, interest, and land. Show Answer Correct Answer: A) Rent, wages, interest, and profit. 50. An upward movement in the curve relating consumption to national income could be caused by A) An increase in savings. B) An increase in national income. C) An increase in investment. D) A reduction in taxation. Show Answer Correct Answer: D) A reduction in taxation. 51. Apakah definisi Keluaran Dalam Negeri Kasar (KDNK)? A) Nilai eksport dikurangkan import di sebuah negara dalam satu tahun. B) Nilai pendapatan keseluruhan yang diperoleh oleh warganegara di sebuah negara dalam satu tahun. C) Nilai barang dan perkhidmatan akhir yang dihasilkan oleh faktor-faktor pengeluaran di sebuah negara dalam satu tahun. D) Nilai belanja kerajaan di sebuah negara dalam satu tahun. Show Answer Correct Answer: C) Nilai barang dan perkhidmatan akhir yang dihasilkan oleh faktor-faktor pengeluaran di sebuah negara dalam satu tahun. 52. Assertion (A):production of food grain for self-consumption is included in GDP:Reason (R):GDP is market value of final product produced within domestic Territory of a country in a financial year: A) Assertion (A) and Reason (R) are true and R is correct explanation of A. B) Assertion (A) and Reason (R) are true and R is not correct explanation of A. C) Assertion (A) is false and Reason (R) is true . D) Assertion (A) is true and Reason (R) is false. Show Answer Correct Answer: C) Assertion (A) is false and Reason (R) is true . 53. What are the two sectors involved in the circular flow of income? A) Government and households. B) Firms and households. C) Producers and consumers. D) Investors and entrepreneurs. Show Answer Correct Answer: B) Firms and households. 54. How would an increase in government subsidies to farmers affect the income approach calculation of national income? A) Increase in national income. B) Decrease in national income. C) No change in national income. D) Increase in imports. Show Answer Correct Answer: A) Increase in national income. 55. How does the government participate in the circular flow of income? A) By collecting taxes and making payments. B) By selling goods and services to households. C) By paying interest to firms. D) By only collecting taxes. Show Answer Correct Answer: A) By collecting taxes and making payments. 56. What does the term "factor cost" refer to? A) Price of output valued based on the cost of factors of production. B) Current price in the market through demand and supply. C) Price paid by consumers. D) None of the above. Show Answer Correct Answer: A) Price of output valued based on the cost of factors of production. 57. Expenditure approach components are consumption, inventory, government spending & capital consumption A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 58. In using the expenditure approach to GDP, consumption A) Includes houses and services. B) Includes consumers spending on durable good, and nondurable goods, and services. C) Includes consumer durables, semi durables, nondurable goods, but excludes services. D) Includes houses and all purchases by business firms. Show Answer Correct Answer: B) Includes consumers spending on durable good, and nondurable goods, and services. 59. The money used to create new money for capital coming from savings A) Government Expenditure. B) Net Export. C) Consumption. D) Investment. Show Answer Correct Answer: D) Investment. 60. The value of which work is added in the calculation of GDP? A) A teacher teaching his own child. B) Housewives' works. C) Construction of new house by an artisan. D) The value of resale of old shares. Show Answer Correct Answer: C) Construction of new house by an artisan. ← 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 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books