Chapter:

40+ National Income accounting Solved MCQs

in Business Economics

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1.	The average income of a country is called
A.	per capita income
B.	disposable income
C.	inflation rate
D.	real national income
Answer» A. per capita income

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2.	The value of NNP at production point is called
A.	nnp at factor cost
B.	nnp at market price
C.	gnp at market price
D.	gnp at factor cost
Answer» A. nnp at factor cost

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3.	The value of NNP at consumer point is called the
A.	nnp at factor cost
B.	nnp at market price
C.	gnp at market price
D.	gnp at factor cost
Answer» B. nnp at market price

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4.	When depreciation is deducted from GNP, the net value is
A.	net national product (nnp)
B.	net domestic product
C.	gross national product
D.	disposable income
Answer» A. net national product (nnp)

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5.	What is the net value of GDP after deducting depreciation from GDP(Gross domestic product)?
A.	net national product
B.	net domestic product
C.	gross national product
D.	disposable income
Answer» B. net domestic product

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6.	Consider the following statements and identify the right ones. i. National income is the monetary value of all final goods and services produced. ii. Depreciation is deducted from gross value to get the net value
A.	i only
B.	ii only
C.	both
D.	none
Answer» C. both

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7.	Which of the following is considered as financial year in India?
A.	april 1 to march 31
B.	january 1 to december 31
C.	march 1 to april 30
D.	march 16 to march 15
Answer» A. april 1 to march 31

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8.	Which is not added in the calculation of national income of India?
A.	the value of goods and services
B.	the sold value of the old fridge
C.	services rendered by the housewives
D.	both [b] & [c]
Answer» D. both [b] & [c]

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9.	Which sector contributes the most to India's economy in terms of GDP?
A.	service sector
B.	manufacturing sector
C.	agricultural sector
D.	small scale industries
Answer» A. service sector

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10.	Which statement is true?
A.	national expenditure = national income
B.	national expenditure = national income + national savings
C.	national expenditure = national income + taxes
D.	national expenditure = national income – taxes
Answer» A. national expenditure = national income

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11.	There are methods of measuring national income:
A.	5
B.	2
C.	1
D.	3
Answer» D. 3

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12.	If we compare GDP and GNP, then:
A.	gnp = gdp - net income from abroad
B.	gnp = gdp + net income from abroad (r-p) ……. gdp+(r-p)
C.	gnp = nnp - net income from abroad
D.	gnp = nnp + net income from abroad
Answer» B. gnp = gdp + net income from abroad (r-p) ……. gdp+(r-p)

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13.	Select the correct statement:
A.	transfer payment are included in national income
B.	depreciation allowance is a part of gnp
C.	taxes are not included in nnp
D.	gdp means gross direct production
Answer» B. depreciation allowance is a part of gnp

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14.	Which is the largest figure:
A.	nnp
B.	gnp
C.	pi (disposable personal income)
D.	pi (personal income)
Answer» B. gnp

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15.	Which is a flow concept:
A.	number of my shirts
B.	my total wealth
C.	my monthly income
D.	money supply
Answer» C. my monthly income

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16.	To avoid double counting when GDP is estimated, economists:
A.	use gdp deflator
B.	calculate value added at each stage of production
C.	use retail prices
D.	use price of only intermediate goods
Answer» B. calculate value added at each stage of production

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17.	Personal income includes:
A.	direct taxes
B.	indirect taxes
C.	depreciation
D.	none of these
Answer» A. direct taxes

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18.	Personal income includes:
A.	transfer payments
B.	indirect taxes
C.	depreciation
D.	all of the above
Answer» A. transfer payments

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19.	If savings exceed investment then:
A.	national income rises
B.	national income falls
C.	national income is not affected
D.	none of the above
Answer» B. national income falls

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20.	This statement is true
A.	ni = rent + interest + wages + profit
B.	ni = rent + interest + wages + taxes
C.	ni = govt. expenditure + interest + wages + profit
D.	ni = rent + interest + wages + pensions
Answer» A. ni = rent + interest + wages + profit

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21.	Which Ministry is responsible for calculating GDP in India?
A.	ministry of finance
B.	ministry of commerce and industry
C.	ministry of central statistical and program implementation
D.	ministry of consumer affairs
Answer» C. ministry of central statistical and program implementation

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22.	Which state of India currently has the highest Per Capita Income?
A.	goa
B.	delhi
C.	maharashtra
D.	punjab
Answer» A. goa

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23.	How much does the primary sector contribute to India's GDP?
A.	26%
B.	20%
C.	53%
D.	14%
Answer» B. 20%

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24.	Which sector contributes the most to India's economy?
A.	service sector
B.	manufacturing sector
C.	agricultural sector
D.	small scale industries
Answer» A. service sector

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25.	If the contribution of the agricultural sector is decreasing in a country's economy, then what conclusion can be drawn?
A.	the country is growing in the direction of being a developed nation
B.	the country is moving towards becoming developing nation
C.	the country is moving towards becoming less developed nation
D.	the economic growth rate of the country has stopped
Answer» A. the country is growing in the direction of being a developed nation

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26.	Which is not added in the calculation of national income of India?
A.	the value of goods and services
B.	the sold value of the old fridge
C.	services rendered by the housewives
D.	both b & c
Answer» D. both b & c

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27.	Output means. ……………unless stated otherwise
A.	gross output at mp (gdpmp)
B.	net output at mp
C.	gross output at fc
D.	none
Answer» A. gross output at mp (gdpmp)

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28.	Which of the following is not a component of domestic income?
A.	operating surplus
B.	compensation of employees
C.	net factor income from abroad
D.	mixed income
Answer» C. net factor income from abroad

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29.	If factor cost is greater than marker price, it means that
A.	indirect taxes < subsidies (subsidy> indirect taxes)
B.	indirect taxes > subsidies
C.	i.t = subsidies
D.	none
Answer» A. indirect taxes < subsidies (subsidy> indirect taxes)

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30.	An Indian farmer produces wheat without incurring cost of inputs alll sells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs 1,200 to baker. The baker sells bread to consumers for Rs. 1,600. Total added is Rs.
A.	1,600
B.	2,200
C.	1,000
D.	1,400
Answer» A. 1,600

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31.	Which of the following is not true about final goods ?
A.	final gods satisfy wants of ultimate consumers and producers.
B.	final goods have direct demand as they satisfy the wants directly.
C.	final goods are subject to further transformation in the process of production.
D.	final goods are neither used up as raw-material nor for resale in the same year.
Answer» C. final goods are subject to further transformation in the process of production.

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32.	Following is an example of final good:
A.	flour used by a banker in making biscuits
B.	unsold stock of goods lying with the sellers
C.	tyres purchased by a transport company
D.	mobile sets purchased by a mobile dealer
Answer» B. unsold stock of goods lying with the sellers

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33.	Which out of the following is not included in estimation of NI?
A.	subsidized lunch
B.	old-age pension
C.	free medical facilities
D.	construction of a house
Answer» B. old-age pension

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34.	Which of the following is a synonym of “Undistributed Profits”?
A.	savings of private corporate sector
B.	reserves and surplus
C.	retained earnings
D.	all of these
Answer» D. all of these

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35.	Piyush’s mother is a teacher. She also teaches Piyush. How would you treat this white calculating national income and domestic income ?
A.	it will be included in the national income, but not in the domestic income.
B.	it will be included in the domestic income, but not in the national income.
C.	it will be included in domestic income as well as national income.
D.	it will neither be included in the domestic income nor in the national income.
Answer» D. it will neither be included in the domestic income nor in the national income.

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36.	Goods which are not used in the production of other goods are called:
A.	capital goods
B.	consumption goods
C.	producer goods
D.	intermediate goods
Answer» B. consumption goods

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37.	Depreciation is the:
A.	loss of vale of fixed assets in use due to normal wear and tear
B.	loss of value of fixed assets in use due to normal rate of accidental damages
C.	loss of value of fixed assets in the due to foreseen obsolescence
D.	all of these
Answer» D. all of these

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38.	Which of following is not included in national income ?
A.	factor income
B.	rent
C.	operating surplus
D.	transfer income
Answer» D. transfer income

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39.	Which of following is not an intermediate goods?
A.	wheat
B.	gold
C.	service of doctor
D.	sand and bricks
Answer» C. service of doctor

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40.	Which of following is not a final good?
A.	machinery purchased by dealer
B.	machinery purchased by a factory
C.	use of petrol
D.	washing machine
Answer» A. machinery purchased by dealer

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41.	Which of following is not a part of national income?
A.	depreciation
B.	net factor income from abroad
C.	operating surplus
D.	mixed income
Answer» A. depreciation

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42.	Product method of calculating national income is also known as:
A.	income method
B.	value added method
C.	expenditure method
D.	distribution method
Answer» B. value added method

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43.	Transfer payments refer to payments, which are made:
A.	without any exchange of goods and services
B.	to workers on transfer from one job to another
C.	as compensation to employees
D.	none
Answer» A. without any exchange of goods and services

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44.	National Income differs from Net National Product at market price by the amount of:
A.	current transfers from rest of the world
B.	net indirect taxes (difference between indirect tax and subsidy)
C.	national debt interest
D.	it does not differ
Answer» B. net indirect taxes (difference between indirect tax and subsidy)

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45.	Net national product at factor cost is also known as:
A.	net domestic product
B.	gross national product
C.	national income
D.	personal income
Answer» C. national income

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46.	In GNP calculation which of the following should be excluded?
A.	rental incomes
B.	interest payments
C.	dividends
D.	government transfer payment
Answer» D. government transfer payment

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47.	National Income differs from Net National Product at market price by the amount of:
A.	current transfers from rest of the world
B.	net indirect taxes
C.	national debt interest
D.	it does not differ
Answer» B. net indirect taxes

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40+ National Income accounting Solved MCQs

The average income of a country is called

The value of NNP at production point is called

The value of NNP at consumer point is called the

When depreciation is deducted from GNP, the net value is

What is the net value of GDP after deducting depreciation from GDP(Gross domestic product)?

Consider the following statements and identify the right ones. i. National income is the monetary value of all final goods and services produced. ii. Depreciation is deducted from gross value to get the net value

Which of the following is considered as financial year in India?

Which is not added in the calculation of national income of India?

Which sector contributes the most to India's economy in terms of GDP?

Which statement is true?

There are methods of measuring national income:

If we compare GDP and GNP, then:

Select the correct statement:

Which is the largest figure:

Which is a flow concept:

To avoid double counting when GDP is estimated, economists:

Personal income includes:

Personal income includes:

If savings exceed investment then:

This statement is true

Which Ministry is responsible for calculating GDP in India?

Which state of India currently has the highest Per Capita Income?

How much does the primary sector contribute to India's GDP?

Which sector contributes the most to India's economy?

If the contribution of the agricultural sector is decreasing in a country's economy, then what conclusion can be drawn?

Which is not added in the calculation of national income of India?

Output means. ……………unless stated otherwise

Which of the following is not a component of domestic income?

If factor cost is greater than marker price, it means that

An Indian farmer produces wheat without incurring cost of inputs alll sells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs 1,200 to baker. The baker sells bread to consumers for Rs. 1,600. Total added is Rs.

Which of the following is not true about final goods ?

Following is an example of final good:

Which out of the following is not included in estimation of NI?

Which of the following is a synonym of “Undistributed Profits”?

Piyush’s mother is a teacher. She also teaches Piyush. How would you treat this white calculating national income and domestic income ?

Goods which are not used in the production of other goods are called:

Depreciation is the:

Which of following is not included in national income ?

Which of following is not an intermediate goods?

Which of following is not a final good?

Which of following is not a part of national income?

Product method of calculating national income is also known as:

Transfer payments refer to payments, which are made:

National Income differs from Net National Product at market price by the amount of:

Net national product at factor cost is also known as:

In GNP calculation which of the following should be excluded?

National Income differs from Net National Product at market price by the amount of:

Consider the following statements and identify the right ones.
i. National income is the monetary value of all final goods and services produced.
ii. Depreciation is deducted from gross value to get the net value

An Indian farmer produces wheat without incurring cost of inputs alll
sells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs 1,200 to baker. The
baker sells bread to consumers for Rs. 1,600. Total added is Rs.