This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 10 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The concept of Scarcity is A) Absolute concept. B) Relative concept. C) Scientific concept. D) Ethical. Show Answer Correct Answer: B) Relative concept. 2. 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. 3. Of the following, which must be included in the calculation of national income? A) The prices of stocks that are resold. B) A scholarship for a student at local university. C) Rent paid to owner of a factory. D) Interest on government loans. Show Answer Correct Answer: C) Rent paid to owner of a factory. 4. Design a scenario where a country's GDP and GNP would be equal. A) Net income from abroad is zero. B) Net exports are zero. C) Government expenditures are equal to government revenues. D) Personal savings equal private investments. Show Answer Correct Answer: A) Net income from abroad is zero. 5. 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. 6. In a closed economy, private saving, Sp, is equal to A) I-(G-T). B) I + (G-T). C) I + (G + T). D) I-(G + T). E) I + (G-T) + C. Show Answer Correct Answer: B) I + (G-T). 7. 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). 8. A computation approach that adds up all the contributions of each sector/industry in the production of goods and services each year A) Factor Income Approach. B) Industry Origin Approach. C) Final Expenditure Approach. D) Pie Added Approach. Show Answer Correct Answer: B) Industry Origin Approach. 9. 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. 10. 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. 11. Which approach to National Income Accounting categorizes economic activities into different sectors such as agriculture, manufacturing, and services? A) Income Approach. B) Expenditure Approach. C) Industrial Origin Approach. D) Factor Approach. Show Answer Correct Answer: C) Industrial Origin Approach. 12. 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. 13. 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. 14. 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. 15. 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. 16. How would an increase in consumer spending affect the expenditure approach calculation of GDP? A) Increase GDP. B) Decrease GDP. C) No change in GDP. D) Decrease in exports. Show Answer Correct Answer: A) Increase GDP. 17. 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. 18. The main factor that differentiates gross national product from net national product is ..... A) Net investment. B) Gross investment. C) Depreciation. D) Net factor income from abroad. Show Answer Correct Answer: D) Net factor income from abroad. 19. 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) Increasing import tariffs to promote local production. C) Implementing austerity measures to reduce government spending. D) Lowering interest rates to stimulate consumer borrowing. Show Answer Correct Answer: A) Launching infrastructure development projects. 20. 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. 21. Which of the following is not a limitation of using GNP as an economic indicator? A) Excludes non-market activities. B) Ignores income distribution. C) Includes net income from abroad. D) Accounts for environmental factors. Show Answer Correct Answer: D) Accounts for environmental factors. 22. 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. 23. 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. 24. 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. 25. Money which transferred from one group to another such as welfare payments, pensions and scholarship allowances. A) Disposable Personal Income. B) Per Capita Income. C) Transfer Payments. D) Payments from abroad. Show Answer Correct Answer: C) Transfer Payments. ← PreviousNext →Related 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 8Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 9Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books