Practice test

National income - Test Set 2

Review 20 exam-focused questions with detailed explanations, then start the interactive test when you are ready.

20 questions

Questions and explanations

  1. Question 1

    Which of the following angles of the flow of factor payments forms the basis to estimate the national income?
    1. Consumption angle
    2. Expenditure angle
    3. Income distribution angle
    4. Production angle
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  2. Question 2

    What is the domestic income if national income is Rs. 10,000 crore and net factor income from abroad is Rs. 2,000 crore?
    1. Rs. 5,000 crore
    2. Rs. 12,000 crore
    3. Rs. 10,000 crore
    4. Rs. 8,000 crore
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  3. Question 3

    Which of the following statements is/are correct?
    I. Only marketed goods are considered while estimating Gross Domestic Product (GDP).
    II. The work done by a woman at her home is outside the purview of Gross Domestic
    III. In estimating GDP, only final goods and services are considered.
    1. Only II and III
    2. I, II and III
    3. Only I and III
    4. Only II
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  4. Question 4

    The value of the Gross Domestic Product (GDP) of India is published by PB in ______.
    1. US Dollar
    2. Yen
    3. Yuan
    4. Indian Rupee
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  5. Question 5

    In which year did India’s ratio of public debt to GDP go up to a record 84.2%?
    1. 1991
    2. 1999
    3. 2003
    4. 2001
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  6. Question 6

    The relationship between which of the following is correct?
    1. GDP at market price = price + quantity of final goods and services
    2. Domestic income = NDP at market price + net indirect taxes
    3. National income = NDP at factor cost + net factor income from abroad
    4. NDP at market price = GDP at market price + depreciation
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  7. Question 7

    Which cost is considered for calculating the national income in India?
    1. Factor cost
    2. Product cost
    3. Market cost
    4. Sunk cost
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  8. Question 8

    What is the use of Net National Product (NNP)?
    1. To calculate per capita income
    2. To calculate balance of payments
    3. To calculate imports
    4. To calculate exports
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  9. Question 9

    What is Gross Domestic Product (GDP) in the context of National Income Accounting?
    1. The total exports of a country
    2. The total savings of a nation
    3. The total value of all goods and services produced within a country’s borders in a specific period
    4. The total income of the country’s government
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  10. Question 10

    While estimating Gross Domestic Product, the monetary value of only final goods are considered because:
    I. its immobility, the active economic flow is ended.
    II. of the issues of double counting.
    III. the value added at each stage of the production process is included.
    1. Only II
    2. Only I
    3. All I, II and III
    4. Only II and III
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  11. Question 11

    Which of the following national income aggregates is generally recognised as National Income of a country?
    1. Net National Product at Market Prices
    2. Net National Product at Factor Cost
    3. Gross National Product at Market Prices
    4. Gross Domestic Product at Factor Cost
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  12. Question 12

    Which of the following is included in the estimation of Gross National Product?
    1. Pension payments
    2. Sale of new shirts
    3. Sale of securities
    4. Sale of used cars
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  13. Question 13

    Which of the following are recognised as final goods while estimating the gross domestic product in India?
    a. Wheat purchased for making roti in a house
    b. Wheat purchased for making roti in a hotel
    c. Tea bags used to make tea in a house
    d. Tea bags used to make tea in a university hostel canteen
    1. Only a and b
    2. Only b and c
    3. Only b and d
    4. Only a and c
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  14. Question 14

    Which of the following is NOT included in the national income?
    1. Income received by a person as a donation.
    2. Income received by a household for the use of their entrepreneurial skill.
    3. Income received by a person for the use of his capital.
    4. Income received by a household for the use of their land.
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  15. Question 15

    GNP = GDP + X - M, where M means.
    1. Income earned and received by nationals within the boundaries of foreign countries.
    2. Income received by foreign nationals from within the country.
    3. Volume of commodities and services produced during the accounting year.
    4. Indirect taxes and subsidies.
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  16. Question 16

    GDP (at market price) - NIT = ?
    1. NNP (at market price)
    2. GDP (at factor price)
    3. NDP (at market price)
    4. NNP (at factor price)
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  17. Question 17

    Which of the following sector does not come under the service sector in India?
    1. Real Estate
    2. Transport
    3. Restaurants & Hotels
    4. Formation of electronic television
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  18. Question 18

    National Income of India is compiled by—
    1. Finance Commission
    2. National Statistical Institution
    3. National Development Council
    4. Central Statistical Organisation
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  19. Question 19

    In India GDP is higher than GNP because—
    1. Import is higher than exports
    2. Capital inflow is higher than capital outflow
    3. Net factor income is negative
    4. Government expenditure is more than income
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  20. Question 20

    GDP at factor cost is—
    1. GDP minus indirect taxes plus subsidies
    2. GNP minus depreciation allowances
    3. NNP plus depreciation allowances
    4. GDP minus subsidies plus indirect taxes
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