Chapter Exam

Chapter 8 ECONOMICS : National Income Accounting — Online MCQ Test

Q: Which among the following is the most comprehensive measure of national 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.

Q: The total value of all final goods and services produced within the geographical boundaries of a country during a year is called:

Answer: B. GDP — Gross Domestic Product (GDP) specifically measures production within the domestic territory of a country.

Q: If GDP at market price is 1000, indirect taxes are 100, and subsidies are 50, calculate GDP at factor cost.

Answer: B. 950 — GDP at FC = GDP at MP - (Indirect Taxes - Subsidies). Therefore: 1000 - (100 - 50) = 950.

Q: If net factor income from abroad is negative, then:

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.

ECONOMICS · CLASS 11 INTER I YEAR · Andhra State Board

Practice Chapter 8 ECONOMICS : National Income Accounting with a free chapter-wise online MCQ test for Andhra State Board CLASS 11 INTER I YEAR ECONOMICS. This chapter covers: This chapter details national income concepts GDP GNP NNP personal income disposable income measurement methods and national income determination models.. AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 8 ECONOMICS : National Income Accounting — Important Questions & Answers (FAQ)

Frequently asked questions from Andhra State Board CLASS 11 INTER I YEAR ECONOMICS — Chapter 8 ECONOMICS : National Income Accounting, with answers and explanations. These are sample questions; the exam has its own separate question set.

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.

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.

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.

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.

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.