This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 12 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. GDP measures: A) A country's income. B) A country's wealth. C) Consumer spending. D) Net trade income. Show Answer Correct Answer: A) A country's income. 3. 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. 4. 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. 5. Which of the following items is not counted in GDP calculations? A) The price of a haircut. B) Newly purchased equipment. C) A salesman's commission on a used car. D) The sale of used goods. Show Answer Correct Answer: D) The sale of used goods. 6. A system of statistics and accounts that keep tracks of production, consumption, savings and investment of the economy A) GDP. B) GNP. C) National Income. D) Net Export. Show Answer Correct Answer: C) National Income. 7. National income accounting provides a framework for measuring and tracking: A) The total population of a country. B) The level of employment in a country. C) The distribution of income in a country. D) The value of a country's currency on international markets. Show Answer Correct Answer: C) The distribution of income in a country. 8. 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. 9. 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. 10. The difference between GDP and GNP is that GDP excluded ..... A) Net income earned abroad. B) Consumption of capital. C) Transfer payment. D) Government expenditure. Show Answer Correct Answer: A) Net income earned abroad. 11. The income received by those who financed the acquisition of physical capital A) Wages or Salaries. B) Interest. C) Rent. D) Profit. Show Answer Correct Answer: B) Interest. 12. 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. 13. The expenditure approach focuses on analyzing the total ..... in the economy. A) Spending. B) Production. C) Profits. D) Investments. Show Answer Correct Answer: A) Spending. 14. 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. 15. Product method of calculating national income is also known as A) Income method. B) Value added method. C) Expenditure method. D) Distribution method. Show Answer Correct Answer: B) Value added method. 16. Income that is actually received by individuals and households in a nation during a year. A) Disposable Personal Income. B) Personal Income. C) National Income. D) Income tax. Show Answer Correct Answer: B) Personal Income. 17. Depreciation is associated with: A) Fixed capital. B) Human capital. C) Working capital. D) None of these. Show Answer Correct Answer: A) Fixed capital. 18. When a nation's imports exceed its exports and is calculated as imports-exports A) Inventory. B) Gross domestic product. C) Trade surplus. D) Trade deficit. Show Answer Correct Answer: D) Trade deficit. 19. 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 state welfare payments. B) A decrease in the working age population. C) An increase in the trade deficit. D) An increase in the consumer price index. Show Answer Correct Answer: A) A decrease in state welfare payments. 20. 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. 470 cr. B) Rs. 300 cr. C) Rs. 280 cr. D) Rs. 2430 cr. Show Answer Correct Answer: D) Rs. 2430 cr. 21. What is the problem of Non-monetized sector in calculating National Income? A) Existence of a large number of non-monetized activities in the technology sector. B) Existence of a large number of non-monetized activities in the industrial sector. C) Existence of a large number of non-monetized activities in the service sector. D) Existence of a large number of non-monetized activities in the agriculture sector. Show Answer Correct Answer: D) Existence of a large number of non-monetized activities in the agriculture sector. 22. What is the main purpose of national income accounting? A) To measure inflation rate. B) To maximize material welfare of the people. C) To calculate individual income. D) To analyze stock market trends. Show Answer Correct Answer: B) To maximize material welfare of the people. 23. GNP per capita is calculated by dividing GNP by A) Population. B) Labor force. C) Total exports. D) Inflation rate. Show Answer Correct Answer: A) Population. 24. Which of the following is a problem in calculating National Income? A) High literacy rates. B) Non-monetized sector. C) Advanced technology. D) Accurate data collection. Show Answer Correct Answer: B) Non-monetized sector. 25. When analyzing the components of GDP using the income approach, which of the following would be categorized under factor payments? A) Rent payments. B) Government subsidies. C) Business investments. D) Household savings. Show Answer Correct Answer: A) Rent 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books