MCQ: National income Accounting, Part 02

Question 1: Identify the correct equation from the following:

A)GNPmp= GDPmp+ Net factor income from abroad

B)NDPfc= NNPfc+ Net Indirect Taxes

C) GDPfc= NNPfc+ Depreciation

D) NNPfc= NDPmp + Depreciation

Correct Answer:: GNPmp= GDPmp+ Net factor income from abroad

Question 2: Operating surplus does not include____________.

A) Rent

B) Interest

C) Compensation of employees

D)Profit

Correct Answer:Compensation of employees, (Operating Surplus= Rent + Interest + Royalty + Profit)

Question 3: Sales of a firm is calculates as:

A)Value of output + Intermediate consumption

B) Value of output x Intermediate consumption

C) Value of ourpur - Change in stock

D) Value of output - Intermediate consumption

Correct Answer: Value of output - Intermediate consumption

Question 4: Difference between closing stock and opening stock during an accounting year is known as:

A) Decrease in stock

B) Change in stock

C) Increase in stock

D) None of these

Correct Answer: Change in stock ( It is also known as inventory investment)

Question 5: Problem of double counting can be avoided by using:

A) Final output method

B) Value added method

C) Both (a) and (b)

D) Neither (a) nor (b)

Correct Answer: Both (a) and (b) ( When value of a commodity is counted more than once , it is known as double counting)

Question 6: Identify which of the following is not considered as ' Normal Resident' of India?

A) An Indiaan working in an Aerican company located in New york for a period of more than 1 year.

B) An Indian citizen working in USA embassy at New delhi

C) An Indian official working in Indian embassy in China

D) an Indian dilommat visitng Canada for a summit.

Correct Answer: A) An Indiaan working in an Aerican company located in New york for a period of more than 1 year.

Question 7: The value of nominal GDP is Rs 1100 and the value of real GDP is Rs 1000. Find the value of GDP deflator.

A)0.9

B) 1

C) 1.1

D)0.8

Correct Answer:1.1 (GDP deflator= Nominal GDP divided by Real GDP multiplied by 100)

Question 8: The difference between National Income at market price and National income at factor cost is_______

A) Net factor income from abroad

B) consumption of fixed capital

C) Indirect taxes + sibsidies

D) Net indirect taxes

Correct Answer: Net indirect taxes (Net indirect taxes= Indirect taxes- Subsidies)

Question 9: Which of the following is not not a 'factor payment'?

A) Free uniform to defence personnel

B) Scholarship given to the students

C) Rent paid to the owner of a building

D) Salaries to the members of Parliament

Correct Answer: B) Scholarship given to the students

Question 10: A person whose stay in a country is at least for one year and whose economic interest lies in that country is called a

A) non-resident

B) normal rrsident

C) normal citizen

D)domestic citizen

Correct Answer: normal citizen

Question 11: When Nominal GDP is Rs 840 crore and price index is 120, then the Real GDP will be _____________

A) Rs 700 crore

B)Rs 900 crore

C)Rs 500 crore

D)Rs 800 crore

Correct Answer: Rs 700 crore (Real GDP= Nominal GDP divided by Price index multiplt by 100)

Question 12: Which of the following statement is incorrect?

A) Gross Domestic Product at market price = Gross Domestic Product at factor cost + Net indirect taxes

B) NNP mp= NNPfc+ NIT

C) Net National Product at market price = Net Domestic product at factor cost + Depreciation

D) Domestic income- National income - NFIA

Correct Answer: C) Net National Product at market price = Net Domestic product at factor cost + Depreciation ( NNPmp= NDPfc +NFIA+ NIT)

Question 13: National income is the sum of factor incomes accruing to:

A) Nationals

B)Economic Territory

C)Residents

D) Both resident and non-resident

Correct Answer: C)Residents

Question 14: National income is often estimated as:

A) NDPfc

B) NNPfc

C) NDPmp

D)NNPmp

Correct Answer: NNPfc

Question 15: Which of the following is not included in inventory investment?

A) Change in stock of finished goods

B) Change in sales during the year

C)Change in stock of raw materials

D) Change in stock of semi-finished goods

Correct Answer: B) Change in sales during the year

Question 16: Compensation of employees includes:

A) Wages and salaries in cash

B) Wages and salaries in kind

C) Pension on retirement

D) All of the above

Correct Answer: D) All of the above.

Question 17: National income refers to :

A) factor incoe only

B) income of only normal residents of the country

C) the sum total of domestic income and net factor income from abroad

D) All of these

Correct Answer: D) All of these

Question 18: Which of the following items is not included while estimating GNP of a country at market price?

A) Sales of the enterprises

B) Indirect taxes

C) Subsidy

D) Remittances by NRIs

Correct Answer:Remittances by NRIs

Question 19: National income (NNPfc) is equal to:

A) GDPfc + Depreciation

B) GDPfc- Depreciation

C) NNPmp- Net indirect taxes

D) Both (B) and (C)

Correct Answer: D) Both (B) and (C)

Question 20: Real National income means:

A) National income at current prices

B) National income at constant prices

C) National income at factor prices

D) national income at average prices of the past 10 years

Correct Answer: B) National income at constant prices

Report Card

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Wrong Answers: 0

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