CBSE Class 12 Economics National Income Accounting Environmental Issues MCQ

Question : Net investment is equal to

a)       Gross investment + depreciation

b)      Gross investment – depreciation

c)       Gross investment × depreciation

d)      Gross investment ÷ depreciation

Answer : B

Question : Capital goods are those goods

a)       Which are used in the production process for several years

b)      Which are used in the production process for few years

c)       Which Involve depreciation losses

d)      Both (a) and (c)

Answer : D

Question : Net capital formation causes

a)       Increase in production capacity

b)      Increase in depreciation

c)       Increase in profits

d)      Increase in cost

Answer : A

Question : In the production of sugar, sugarcane is

a)       A final good

b)      A capital good

c)       An Intermediate good

d)      None of these

Answer : C

Question : Those goods which satisfy human wants directly are called

a)       Intermediate goods        

b)      Consumer goods

c)       Capital goods

d)      None of these

Answer : B

Question : Increase in the stock of capital is known as

a)      Capital loss

b)      Capital gain

c)      Capital formation

d)      None of these

Answer : C

Question : Which of the following leads to unexpected obsolescence?

a)      Change in demand

b)      Natural calamities

c)      Change in technology

d)     None of these

Answer : B

Question : Income of the family is the example of which variable?

a)       Stock

b)      Flow

c)       Both stock and flow

d)      Neither stock nor flow

Answer : B

Question : 9 Which of the following leads to depreciation?

a)       Normal wear and tear                

b)      Damages due to floods

c)       Damages due to market – crash

d)      None of these

Answer : A

Question : Which of the following is a semi-durable goods?

a)       Radio

b)      Clothes

c)       Milk

d)      Petrol

Answer : B

Question : Which one refers to Net Indirect Taxes?

a)       Indirect taxes + subsidies

b)      Indirect taxes - subsidies

c)       Direct taxes - subsidies 

d)      None of the above

Answer : B

Question : Basis of the difference between the concepts of market Price and Factor Cost is:

a)       Direct taxes

b)      Indirect taxes

c)       Subsidies    

d)      Net indirect taxes

Answer : D

Question : Which of the following is not correct?

a)       NNP at Market Price : GNP at Market Price + Depreciation

b)      NDP at Market Price : NNP at Market Price - Net Factor Income from Abroad

c)       NDP at Factor Cost : NDP at Market Price - Indirect taxes + Subsidies

d)      GDP at Factor Cost : NDP at Factor Cost + Depreciation

Answer : A

Question : Which one leads to Factor Cost?

a)       Marker Price - indirect Taxes

b)      Marker Price - Net Indirect Taxes

c)       Marker Price + Indirect Taxes

d)      Marker Price + Net Indirect Taxes

Answer : B

Question : Domestic product is equal to:

a)       National product + net factor income from abroad

b)      National product - net factor income from abroad

c)       National product ÷ net factor income from abroad

d)      National product × net factor income from abroad

Answer : B

Question : Which of the following is a flow variable

a)       Consumption        

b)      Wealth

c)       Quantity of money

d)      None of these

Answer : A

Question : Market price of the final goods and services (Including depreciation) produced within the domestic territory of a country during an accounting year is called:

a)       GDP at Market Price      

b)      GNP at Factor Cost

c)       NNP at Factor cost

d)      GDP at Factor Cost

Answer : A 

Question : Which one includes depreciation?

a)       GNP at Market Price

b)      NNP at Market Price

c)       NNP at Factor Cost         

d)      None of these

Answer : A

Question : A quantity measured per unit of time period is known as

a)       Stock variable

b)      Flow variable

c)       Inventory  

d)      None of these

Answer : B

Question : Which one is correct?

a)       National Income : NDP at Factor Cost - Net Factor Income from Abroad

b)      GNP at Factor Cost : GNP at Market Price + Net Indirect Tax

c)       Personal Income : Private Income - Corporate Tax - Corporate Saving

d)      Disposable Income : Saving of Household Sector - Consumption of Household Sector

Answer : C

Question : Which of the following is not transfer payment?

a)       Interest on national debt

b)      Retirement pensions

c)       Old- age pensions

d)      Donations

Answer : B

Question : GNP at market price is measured as:

a)       GDP at market price – Depreciation

b)      GDP at market price + Net factor Income from abroad

c)       GNP at market price + subsidies

d)      NDP at factor cost + Net factor income from abroad

Answer : B

Question : Which of the following items is not included while estimating GNP of a country at market prices?

a)       Salaries and wages before taxes

b)      Indirect taxes

c)       Remittances by NRIs       

d)      Subsidy

Answer : C

Question : Which of these is a limitation in the measurement of social welfare using GDP at constant prices as an index?

a)       Increase in population size

b)      Change in working conditions

c)       Composition of production

d)      All of these

Answer : D

Question : Value added method measured the contribution of which of the following within the domestic territory of a country?

a)       One producing enterprise only

b)      All producing enterprises

c)       A few producing enterprises

d)      None of these

Answer : B

Question : Which of the following items is not included while estimating national Income by Income method?

a)       Rent

b)      Mixed income

c)       Fixed investment

d)      Undistributed profits

Answer : C

Question : In India, suppliers of money are:

a)       Government of the country

b)      Banking system of the country

c)       Both (a) and (b)

d)      None of these

Answer : C

Question : As a result of double counting, national incomes is:

a)       Over- estimated               

b)      Under- estimated

c)       Correctly - estimated

d)      Not estimated for the entire year of accounting

Answer : A

Question : Real national income means:

a)       National income at current prices

b)      National income at factor prices

c)       National income at constant prices    

d)      National income at average prices of the past 10 years

Answer : C 

Question : Which of the following is not included in final consumption expenditure?

a)       Household expenditure on food         

b)      Government final consumption expenditure

c)       Household expenditure on education

d)      Expenditure on raw material

Answer : D

Fill in the blanks:

Question. ________ income is the value of current income at base-year prices.
Answer: Real

Question. __________ flow shows flow of goods and services across different sectors.
Answer: Real

Question. _______ sector is also known as the service sector.
Answer: Tertiary

Question. _________ is an economic variable that is measured over a specific period of time. It is a dynamic concept.
Answer: Flow

Question. ________ is the loss of value of fixed assets due to normal wear and tear.
Answer: Depreciation

Question. Environmental pollution caused by industries is a _______ externality.
Answer: negative

Question. _______ are the economic assistance given by the government for the general welfare.
Answer: Subsidies

Question. Investment refers to addition to the ________ of an economy. For example purchase of machinery, construction of the metro.
Answer: capital stock

Question. Nominal GDP is the value of GDP at _______ prices.
Answer: current

Question. ________ means estimating the value of goods and services more than once.
Answer: Double counting

Question. Agriculture is included in the…………… sector.
Answer: Primary

Question. Pigou has divided welfare into ………….. parts.
Answer: Two

Question. Chinese product is included in …………… area of the economy.
Answer: Secondary

Question. National income in India is calculated by………………
Answer: Central statistical organisation

Question. The total value of all final goods and services produced within the domestic territory of a country during an accounting year is known as ……….
Answer: GDP

Question. ……….. is an index of economic development of the country.
Answer: National income.

State true or false:

Question. As compared to developed countries, India’s per capita income is quite less.
Answer: True

Question. Black money has given birth to a parallel economy in the country.
Answer: True

Question. The major contribution to India’s national income is from the secondary sector.
Answer: False

Question. Electricity, LPG, and water supply are included in the primary sector.
Answer: False

Question. Income from gifts is included in the national income.
Answer: False

Question. The sale of second-hand goods is not included in the national income.
Answer: True

Match the following:

Question.

Answer:

Question.

Answer:

Multiple choice questions

Question. Net National product at factor cost is also known as
(a) National Income
(b) Domestic Income
(c) Per capita Income
(d) Salary.
Answer: (a)

Question. Primary sector is …………………..
(a) Industry
(b) Trade
(c) Agriculture
(d) Construction.
Answer: (c)

Question. National income is measured by using ……….. methods.
(a) Two
(b) Three
(c) Five
(d) Four
Answer: (b)

Question. Income method is measured by summing up of all forms of ……………
(a) Revenue
(b) Taxes
(c) expenditure
(d) Income
Answer: (d)

Question. Which is the largest figure?
(a) Disposable income
(b) Personal Income
(c) NNP
(d) GNP
Answer: (d)

Question. Expenditure method is used to estimate national income in …………..
(a) Construction sector
(b) Agricultural Sector
(c) Service sector
(d) Banking sector
Answer: (a)

Question. Tertiary sector is also called as ………. sector
(a) Service
(b) Income
(c) Industrial
(d) Production
Answer: (a)

Question. National income is a measure of the ……… performance of an economy.
(a) Industrial
(b) Agricultural
(c) Economic
(d) Consumption
Answer: (c)

Question. Per capita income is obtained by dividing the National income by …………
(a) Production
(b) Population of a country
(c) Expenditure
(d) GNP
Answer: (b)

Question. \( \text{GNP} = \text{GNP} = \text{………. } + \text{Net factor income from abroad.} \)
(a) NNP
(b) NDP
(c) GDP
(d) Personal income
Answer: (c)

Question. NNP stands for ……….
(a) Net National Product
(b) National Net product
(c) National Net Provident
(d) Net National Provident
Answer: (a)

Question. ……… is deducted from gross value to get the net value.
(a) Income
(b) Depreciation
(c) Expenditure
(d) Value of final goods
Answer: (b)

Question. The financial year in India is ……
(a) April 1 to March 31
(b) March 1 to April 30
(c) March 1 to March 16
(d) January 1 to December 31
Answer: (a)

Question. When net factor income from abroad is deducted from NNP, the net value is …….
(a) Gross National Product
(b) Disposable Income
(c) Net Domestic Product
(d) Personal Income
Answer: (c)

Question. The value of NNP at production point is called ……
(a) NNP at factor cost
(b) NNP at market cost
(c) GNP at factor cost
(d) Per capita income
Answer: (a)

Question. The average income of the country is ….
(a) Personal Income
(b) Per capita income
(c) Inflation Rate
(d) Disposal Income
Answer: (b)

Question. The value of national income adjusted for inflation is called ….
(a) Inflation Rate
(b) Disposal Income
(c) GNP
(d) Real national income
Answer: (d)

Question. Which is a flow concept ?
(a) Number of shirts
(b) Total wealth
(c) Monthly income
(d) Money supply
Answer: (c)

Question. PQLI is the indicator of ………………
(a) Economic growth
(b) Economic welfare
(c) Economic progress
(d) Economic development
Answer: (b)

Question. The largest proportion of national income comes from …….
(a) Private sector
(b) Local sector
(c) Public sector
(d) None of the above
Answer: (a)