Measures Of National Income(12th Grade > Economics - 2 ) Questions and answers for exam Preparation

12th Grade > Economics - 2

MEASURES OF NATIONAL INCOME MCQs

Total Questions : 30 | Page 3 of 3 pages

Question 21. Personal income is equal to:

Private income + Corporate profit tax - Undistributed profits
Private income - Corporate profit tax + Undistributed profits
Private income + Corporate profit tax + Undistributed profits
Private income - Corporate profit tax - Undistributed profits

Discuss Question

Answer: Option D. -> Private income - Corporate profit tax - Undistributed profits
:
D
Personal income = Private income - Corporate profit tax -Undistributed profits

Question 22. GDP growth as an index of welfare loses its significance if it is accompanied with deeper economic divide.

True
False
either positive or negative
neither positive nor negative

Discuss Question

Answer: Option A. -> True
:
A
Economic divide indicates the increasing gap between the rich and poor people. It the gap increases, GDP growth loses its significance.

Question 23. If income is distributed evenly, the Gini co-efficient is:

Zero
0.5
1
Undefined

Discuss Question

Answer: Option A. -> Zero
:
A
A Gini coefficient of zero corresponds to precise equality in income distribution

Question 24. Domestic income, as well as national income, include only factor incomes.

True
False
either positive or negative
neither positive nor negative

Discuss Question

Answer: Option A. -> True
:
A
True. National income is the sum total of factor incomes earned by normal residents of a country during a given year. Domestic income is the sum total offactor incomes generated within the domestic territory of a country.

Question 25. National income

N N P_{F C}

is equal to:

GNPFC + Depreciation
GNPFC - Depreciation
NNPMP - Net Indirect taxes
Both B and C

Discuss Question

Answer: Option D. -> Both B and C
:
D
National income

N N P_{F C}

G N P_{F C}

-Depreciation and

N N P_{M P}

- Net Indirect taxes

Question 26. If a country’s nominal GDP increases, it means the country is producing more goods and services. State true or false.

True
False

Discuss Question

Answer: Option B. -> False
:
B
Nominal GDP refers to market value of the final goods and services produced within the domestic territory of a country during a financial year using the current year prices. Real GDP is what reflects real production.

Question 27. Human Development Index(HDI) focuses on

Longevity
Knowledge
Standing of living
All of the above

Discuss Question

Answer: Option D. -> All of the above
:
D
HDI focuses on three dimensions of human welfare as given in the above options.

Question 28. Government transfer payments include:

Social security benefits
Welfare benefits
Student scholarships
All of the above

Discuss Question

Answer: Option D. -> All of the above
:
D
Government transfer payment includes all the given options.

Question 29. To avoid double counting when GDP is estimated, economists:

use GDP deflator
calculate value added at each stage of production
use retail prices
use prices of intermediate goods only

Discuss Question

Answer: Option B. -> calculate value added at each stage of production
:
B
To avoid double counting when GDP is estimated, economists calculate value added at each stage of production.

Question 30. The value of national output produced by residents located within the country, before depreciation and including the influence of taxes and subsidies, is known as:

NNP at factor cost
GDP at factor cost
GDP at market price
GNP at market price

Discuss Question

Answer: Option C. -> GDP at market price
:
C
The value of national output produced by residents located within the country, before depreciation and including the influence of taxes and subsidies, is known as GDP at market price.