Chapter 8 ECONOMICS : National Income Accounting — Online MCQ Test
ECONOMICS · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 8 ECONOMICS : National Income Accounting with a free chapter-wise online MCQ test.
This chapter covers: This chapter details national income concepts GDP GNP NNP personal income disposable income measurement methods and national income determination models..
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Chapter 8 ECONOMICS : National Income Accounting — Important Questions & Answers
Which among the following is the most comprehensive measure of national income?
- A. GDP at market price
- B. NNP at factor cost
- C. GNP at market price
- D. Personal income
Answer: B. NNP at factor cost
NNP at factor cost is considered the National Income as it represents the net output produced by the economy without including depreciation and indirect taxes.
NNP at factor cost is considered the National Income as it represents the net output produced by the economy without including depreciation and indirect taxes.
The total value of all final goods and services produced within the geographical boundaries of a country during a year is called:
- A. GNP
- B. GDP
- C. NNP
- D. Per capita income
Answer: B. GDP
Gross Domestic Product (GDP) specifically measures production within the domestic territory of a country.
Gross Domestic Product (GDP) specifically measures production within the domestic territory of a country.
If GDP at market price is 1000, indirect taxes are 100, and subsidies are 50, calculate GDP at factor cost.
- A. 900
- B. 950
- C. 1050
- D. 1150
Answer: B. 950
GDP at FC = GDP at MP - (Indirect Taxes - Subsidies). Therefore: 1000 - (100 - 50) = 950.
GDP at FC = GDP at MP - (Indirect Taxes - Subsidies). Therefore: 1000 - (100 - 50) = 950.
If net factor income from abroad is negative, then:
- A. GDP is equal to GNP
- B. GDP is greater than GNP
- C. GDP is less than GNP
- D. NNP is equal to GNP
Answer: B. GDP is greater than GNP
Since GNP = GDP + Net Factor Income from Abroad, if the income from abroad is negative, GDP must be larger than GNP.
Since GNP = GDP + Net Factor Income from Abroad, if the income from abroad is negative, GDP must be larger than GNP.
An increase in national income accompanied by an increase in population results in:
- A. A rise in per capita income
- B. A decline in per capita income if population growth > GDP growth
- C. Always constant per capita income
- D. No impact on living standards
Answer: B. A decline in per capita income if population growth > GDP growth
Per capita income is National Income / Population; therefore, if the denominator grows faster than the numerator, the result decreases.
Per capita income is National Income / Population; therefore, if the denominator grows faster than the numerator, the result decreases.