This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 1 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. For most macroeconomists A) National income accounts and national output accounts are equal to each other. B) National income accounts exceed national output accounts. C) National output accounts exceed national income accounts. D) It is impossible to tell whether national income accounts equal to national output accounts. E) National income accounts is much more important than national output accounts. Show Answer Correct Answer: A) National income accounts and national output accounts are equal to each other. 2. "The average income of the citizens of a nation, calculated by dividing the national income for a certain year by the population" A) Personal Income (PI). B) Disposable personal income (DPI). C) Per capita income (PCI). D) None of the above. Show Answer Correct Answer: C) Per capita income (PCI). 3. The profits of a Spanish factory with British owners are A) Counted in Spain's GNP. B) Not part of Britain's GDP. C) Counted in Britain's GDP. D) Part of Spain's GNP. E) Counted in Spain's GDP and are a part of Britain's GNP. Show Answer Correct Answer: E) Counted in Spain's GDP and are a part of Britain's GNP. 4. When depreciation, or the loss of value due to consumption of fixed capital, is deducted from Gross Domestic Product, the resulting measure reflects a country's actual net output. What is this measure commonly known as in national income accounting? A) NET DOMESTIC PRODUCT. B) GROSS NATIONAL PRODUCT. C) REAL GDP. D) PER CAPITA INCOME. Show Answer Correct Answer: A) NET DOMESTIC PRODUCT. 5. For open economies, A) S = I. B) S = I + CA. C) S = I-CA. D) S > I + CA. E) S < I + CA. Show Answer Correct Answer: B) S = I + CA. 6. What is the Real GDP for the Philippines in 2020? A) Php 17, 527, 234.1. B) Php 17, 938, 582.4. C) Php 19, 382, 750.6. D) Php 18, 265, 190.3. Show Answer Correct Answer: A) Php 17, 527, 234.1. 7. The average amount earned by each person in a country. It is calculated by dividing a country's Gross National Product by its total population. A) Value added. B) Personal Income. C) Per Capita Income. D) Disposable income. Show Answer Correct Answer: C) Per Capita Income. 8. The highest component of GNP is, A) The current account. B) Investment. C) Government purchases. D) Consumption. E) None of the above. Show Answer Correct Answer: D) Consumption. 9. What is the term for economic activities that do not involve market transactions? A) Black Market. B) Informal Economy. C) Nonmarket Activities. D) Underground Economy. Show Answer Correct Answer: C) Nonmarket Activities. 10. What does the expenditure approach in National Income Accounting focus on? A) Total spending or expenditures in the economy. B) Total income earned by individuals. C) Total production in the economy. D) Total savings in the economy. Show Answer Correct Answer: A) Total spending or expenditures in the economy. 11. ..... is an annual allowance for wear and tear of capital goods. A) Depreciation. B) Appreciation. C) Allowances. D) None of the above. Show Answer Correct Answer: A) Depreciation. 12. Government purchases currently take up about A) 19 percent of U.S. GNP, and this share has not changed much since the late 1950s. B) 38 percent of U.S. GNP, and this share has not changed much since the late 1950s. C) 18 percent of U.S. GNP, and this share has been increasing since the late 1950s. D) 18 percent of U.S. GNP, and this share has been decreasing since the late 1950s. E) None of the above. Show Answer Correct Answer: A) 19 percent of U.S. GNP, and this share has not changed much since the late 1950s. 13. Days: A) MWF. B) TTH. C) SAT. D) None of the above. Show Answer Correct Answer: A) MWF. 14. NDP$_{MP}$ is Rs. 2400 crores, the capital stock of the country is worth Rs.400 crores, and depreciation is 10% per annum. Indirect taxes amount to Rs. 120 crores and subsidies equal to Rs 20 crores. Factor income from the rest of the world is Rs 400 crores and factor income to the rest of the world is Rs 600 crores. Calculate Gross National Product at Factor Cost. A) Rs. 2140 cr. B) Rs. 2340 cr. C) Rs. 2110 cr. D) Rs. 2310 cr. Show Answer Correct Answer: A) Rs. 2140 cr. 15. Evaluate the impact of a decrease in government expenditures on a country's GDP. A) Increase GDP. B) Decrease GDP. C) No impact on GDP. D) Impact depends on other factors. Show Answer Correct Answer: B) Decrease GDP. 16. The earnings of a Spanish factory with British owners are A) Counted in Spain's GDP. B) Part of Britain's GNP. C) Only counted in Britain's GDP. D) Only part of Spain's GNP. E) Counted in Britain's GDP and are a part of Spain's GNP. Show Answer Correct Answer: E) Counted in Britain's GDP and are a part of Spain's GNP. 17. The United States issues a $ 10, 000 debt forgiveness to Argentina. How is this accounted for in the balance of payments? A) Financial account, U.S. asset import. B) Current account, Argentina transfer payment. C) Current account, U.S. service export. D) Capital account, U.S. transfer payment. E) Current account, Argentina good import. Show Answer Correct Answer: D) Capital account, U.S. transfer payment. 18. In the United States over the past fifty years, the fraction of GNP devoted to consumption has fluctuated in a range of about A) 42 to 49 percent. B) 32 to 39 percent. C) 22 to 29 percent. D) 82 to 89 percent. E) 62 to 70 percent. Show Answer Correct Answer: E) 62 to 70 percent. 19. GNP is the total value of all final goods and services produced within a country in a given time period. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 20. Consider the following statements and identify the right ones.i. While calculating GDP, income generated by foreigners in a country is taken into considerationii. While calculating GDP, income generated by nationals of a country outside the country is taken into account A) I only. B) Ii only. C) Both. D) None. Show Answer Correct Answer: A) I only. 21. What is the purpose of a macroeconomic model? A) To describe an actual economy in detail. B) To simplify the functioning of an economic system. C) To highlight essential features of an economy. D) To predict future economic trends. Show Answer Correct Answer: C) To highlight essential features of an economy. 22. Which of the following is an example of double counting in national income measurement? A) Counting raw materials and final goods separately. B) Excluding non-monetary transactions. C) Using GDP deflator. D) Considering per capita income. Show Answer Correct Answer: A) Counting raw materials and final goods separately. 23. Which of the following statements about the central bank is TRUE? A) Only the central bank may hold foreign reserves and intervene officially in exchange markets. B) Central banks have little power to alter macroeconomic conditions. C) Today, central banks' reserves consist largely of gold. D) The Federal Reserve holds only a small level of official reserve assets other than gold. E) Central banks never inject money into the economy. Show Answer Correct Answer: D) The Federal Reserve holds only a small level of official reserve assets other than gold. 24. If a country's Real GNP grew by 3% and inflation was 2%, what was the nominal growth rate of GNP? A) 0.01. B) 0.02. C) 0.03. D) 0.05. Show Answer Correct Answer: D) 0.05. 25. Which component of GNP includes the value of final goods and services produced by households? A) Government consumption expenditure. B) Gross private domestic investment. C) Personal consumption expenditures. D) Net exports. Show Answer Correct Answer: C) Personal consumption expenditures. 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