This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 4 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. While calculating NNP(FC) Using Income Method, we always focus on items of: A) Expenditure. B) Income. C) Value added. D) All of the above. Show Answer Correct Answer: B) Income. 2. Construct an argument for why Real GNP is a better measure of economic performance than Money GNP. A) Real GNP accounts for inflation; Money GNP does not. B) Money GNP includes income earned abroad; Real GNP does not. C) Real GNP includes non-market activities; Money GNP does not. D) Money GNP adjusts for population growth; Real GNP does not. Show Answer Correct Answer: A) Real GNP accounts for inflation; Money GNP does not. 3. Of the following, which is not included in the calculation of disposable income? A) Employee transportation allowance. B) Interest on consumer loans. C) EPF contributions. D) Distributed corporate profit. Show Answer Correct Answer: C) EPF contributions. 4. Develop a plan to improve the accuracy of GNP measurements in a developing country. A) Implement a comprehensive data collection system. B) Use estimates for missing data. C) Rely on GDP instead of GNP. D) Ignore measurement errors. Show Answer Correct Answer: A) Implement a comprehensive data collection system. 5. What is the key concept behind the expenditure approach in National Income Accounting? A) Total spending must equal total income. B) Total savings must equal total income. C) Total production must equal total income. D) Total investments must equal total income. Show Answer Correct Answer: A) Total spending must equal total income. 6. Which of the following is included in Gross National Product calculations? A) Income earned by foreign residents within the country. B) Domestic production only. C) Income earned by citizens abroad. D) Sales of goods in the underground economy. Show Answer Correct Answer: C) Income earned by citizens abroad. 7. Which statement is correct for nominal GDP?i. Nominal GDP is calculated based on current prices.ii. Nominal GDP is calculated based on the base prices.iii. Data on Nominal GDP shows an accurate picture of the economy as compared to real GDP. A) Only ii, iii. B) Only ii. C) Only i. D) Only i, iii. Show Answer Correct Answer: C) Only i. 8. Which of the following is not a government transfer? A) Public pensions. B) Government spending on education. C) Welfare payments. D) Unemployment insurance benefits. Show Answer Correct Answer: B) Government spending on education. 9. GDP is supposed to measure A) The volume of production within a country's borders. B) The volume of services generated within a country's borders. C) The volume of production of a country's output. D) GNP plus depreciation. E) Net unilateral transfers from foreigners. Show Answer Correct Answer: A) The volume of production within a country's borders. 10. In a closed economy, private saving, , 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). 11. The main difference between GDP and GNP is that ..... A) GDP includes net factor income from abroad. B) GNP includes net factor income from abroad. C) There is no difference between GDP and GNP. D) GDP includes inflation. Show Answer Correct Answer: B) GNP includes net factor income from abroad. 12. In a closed economy, national saving A) Sometimes equals investment. B) Always equals investment. C) Is always less than investment. D) Is always more than investment. E) None of the above. Show Answer Correct Answer: B) Always equals investment. 13. To convert GNP at factor cost to GNP at market price, it is necessary to add ..... A) Indirect taxes and subtract subsidies. B) Expenditure imports. C) Gross trading profits of companies. D) Current and capital expenditure by the central government. Show Answer Correct Answer: A) Indirect taxes and subtract subsidies. 14. The United States began to report its gross domestic product (GDP) only since A) 1900. B) 1921. C) 1931. D) 1941. E) 1991. Show Answer Correct Answer: E) 1991. 15. Which of the following does not belong to Micro-Economics? A) Growth rate of GNP. B) Prices of Petroleum products. C) Production of cement in the country. D) Total employment in small scale industries. Show Answer Correct Answer: C) Production of cement in the country. 16. Which of the following is an example of an income component in the income approach? A) Government Spending. B) Investment. C) Wages and Salaries. D) Net Exports. Show Answer Correct Answer: C) Wages and Salaries. 17. When foreign sectors are included in calculating national income by using expenditure approach, the equation for aggregate income is ..... A) Y=C+S+T+X-M. B) Y=C+S-T-X+M. C) Y=C+I+G+X-M. D) Y=C+I+T+X+M. Show Answer Correct Answer: C) Y=C+I+G+X-M. 18. In a circular flow of income in a closed economy with government intervention, leakage consists of ..... A) Investment and savings. B) Savings only. C) Savings and taxes. D) Savings, taxes and imports. Show Answer Correct Answer: C) Savings and taxes. 19. The tax which is imposed on he profit of corporate is known as: A) Sales tax. B) Excise duty. C) Corporate tax. D) Income tax. Show Answer Correct Answer: C) Corporate tax. 20. GNP measured on a fixed price or in a base year. A) GDP. B) Real Income. C) Nominal GNP. D) Growth Rate. Show Answer Correct Answer: B) Real Income. 21. The correct formula of Domestic income is ..... A) NDP at FC. B) GDP at MP. C) NNP at FC. D) GNP at MP. Show Answer Correct Answer: A) NDP at FC. 22. Gross Domestic Product (GDP) measures the total market value of: A) Final goods and services produced within a country's borders in a specific time period. B) Final goods and services consumed within a country's borders in a specific time period. C) All goods and services produced by a country's residents, regardless of location. D) All goods and services produced within a country's borders, including intermediate goods. Show Answer Correct Answer: A) Final goods and services produced within a country's borders in a specific time period. 23. Water in a stream is a- A) Stock concept. B) Non-economic concept. C) Flow concept. D) Hypothetical concept. Show Answer Correct Answer: C) Flow concept. 24. The difference between gross domestic product and gross national product is A) Subsidy. B) Indirect tax. C) Depreciation. D) Net property income from abroad. Show Answer Correct Answer: D) Net property income from abroad. 25. What does the term 'inflation rate' refer to? A) The rate at which the population is growing. B) The rate at which the unemployment is decreasing. C) The rate at which the general level of prices for goods and services is rising. D) The rate at which the GDP is increasing. Show Answer Correct Answer: C) The rate at which the general level of prices for goods and services is rising. ← 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 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 10Class 12 Economics (Macro Economics) Chapter 2 National Income Accounting Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books