CBSE Class 12 Economics National Income Accounting MCQ Set B

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: Expenditure by the foreigners on the domestically produced final goods and services is called:
(a) exports
(b) imports
(c) net exports
(d) None of the options
Answer: a

Question: Smoke emitted by a chemical factory and causing air pollution is an example of:
(a) positive externalities
(b) negative externalities
(c) either of the two
(d) neither of the two
Answer: b

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: 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: 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: Net capital formation causes
a) Increase in production capacity
b) Increase in depreciation
c) Increase in profits
d) Increase in cost
Answer: a

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: Money flows refer to the:
(a) flow of goods across different sectors of the economy
(b) flow of services across different sectors of the economy
(c) flow of money across different sectors of the economy
(d) flow of income across different sectors of the economy
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: 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: Which of the following is included in the estimation of national income?
(a) Expenses on electricity by a factory
(b) Gifts from abroad
(c) Free services by the government
(d) Financial help to earthquake victims
Answer: c

Question: Increase in the stock of capital is known as
a) Capital loss
b) Capital gain
c) Capital formation
d) None of the options
Answer: c

Question: When nominal GDP is 840 and price index is 1 2 0, real GDP will be:
(a) 7
(b) 700
(c) 720
(d) 960
Answer: b

Question: Which of the following is a flow variable
a) Consumption
b) Wealth
c) Quantity of money
d) None of the options
Answer: a

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: Retirement pension is:
(a) a kind of transfer payment
(b) a kind of corporate tax
(c) a kind of deferred wage
(d) None of the options
Answer: c

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: Real GDP is considered as an index of:
(a) price level in the economy
(b) welfare of the people
(c) profit maximisation
(d) None of the options
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: Which of the following item will not be included while calculating NDP mp.
a) Private final consumption expenditure
b) Consumption of fixed capital
c) Govt Final consumption expenditure
d) Net Export
Answer: b

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: Net capital formation causes
a) Increase in production capacity
b) Increase in depreciation
c) Increase in profits
d) Increase in cost
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 a stock variable?
(a) Interest on capital
(b) Distance between Delhi and Goa
(c) Expenditure of money
(d) All of these
Answer: b

Question: If the entire output of the year is sold during the year, then:
(a) value of output= intermediate consumption
(b) value of output = intermediate cost
(c) value of output = sales
(d) value of output = change in sales
Answer: c

Question: Which of the following is not a transfer payment?
(a) Gifts from abroad
(b) Retirement pensions
(c) Donations
(d) Grants
Answer: b

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: Which of the following is not included in inventory investment?
(a) Stock of finished goods
(b) Stock of semi-finished goods
(c) Consumer goods sold to the households during the accounting year
(d) Stock of raw materials
Answer: c

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: Value Addition =
(a) Value of output+ Intermediate consumption
(b) Value of output – Intermediate consumption
(c) Value of output x Intermediate consumption
(d) Value of output + Intermediate consumption
Answer: b

Question: Which of the following is the better index of economic growth?
(a) Real GDP
(b) Nominal GDP
(c) Both real as well as nominal GDP
(d) Neither of the two
Answer: a

Question: Which of the following is not a flow variable?
a) Income
b) Capital Formation
c) Supply of Money in a country
d) Leakage of water from a tank
Answer: c

Question: Market value of final goods and services produced in the economy during the period of one year is called:
(a) Gross value added at market price
(c) Gross national product at market price
(b) Gross domestic product at market price
(d) both (a) and (b)
Answer: d

Question: NVA fc Equals to
a) Sum of factor payments
b) Sum of Current transfer Payments
c) Sum of Capital Transfer Payments
d) Net Current transfer from rest of the world
Answer: a

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: c

Question: Which of the following makes GDP an inappropriate index of welfare?
(a) Non-monetary transactions
(b) Externalities
(c) Composition and distribution of GDP
(d) All of these
Answer: d

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: 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 the options
Answer: b

Question: In the production of sugar, sugarcane is
a) A final good
b) A capital good
c) An Intermediate good
d) None of the options
Answer: c

Question: Net Factor Income from Abroad =
(a) National income – Net indirect taxes
(b) National income – Indirect taxes
(c) National income – Domestic income
(d) Domestic income – National income
Answer: c

Question: A quantity measured per unit of time period is known as
a) Stock variable
b) Flow variable
c) Inventory
d) None of the options
Answer: b

Question: The sum accountintotal of factor incomes earned by normal residents of a country during the period of an g year is called:
(a) national income
(b) domestic income
(c) national product
(d) both (a) and (c)
Answer: d

Question: Nominal GDP refers to:
(a) GDP at constant prices
(c) GDP estimated at current prices
(b) GDP at base year prices
(d) None of the options
Answer: c

Question: NNP fc is called:
a) National Income
b) Domestic Income
c) Personal Income
d) Private Income
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: 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 the options
Answer: c

Question: Operating Surplus =
(a) Compensation of employees+ Rent+ Interest+ Profit
(b) Rent + Interest + Profit
(c) Compensation of employees + Mixed income of self-employed
(d) Compensation of employees + Rent + Interest + Profit + Mixed income of self-employed
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: National Income = Domestic income when:
a) NFIA is Positive
b) NFIA is Negative
c) NFIA is Zero
d) None of the above
Answer: c

Question: Which of the following is correct?
(a) GDPyc = Compensation of employees + Rent + Interest + Profit
(b) GDPyc = Compensation of employees + Rent + Interest + Profit + Depreciation
(c) GDP ye = Compensation of employees + Rent + Interest + Profit – Depreciation
(d) GDPyc = NDPyc – Depreciation
Answer: b

Question: Which of the following is a factor income?
(a) Interest
(b) Scholarship
(c) National debt interest
(d) Grants
Answer: a

Question: Value of Output = Sales +
(a) Change in stock
(b) Intermediate cost
(c) Closing stock – Opening stock
(d) Both (a) and (c)
Answer: d