Economics National Income - MCQs - CSEET

1. In India Financial year is from ..........................

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

National income is calculated for a specific period of time. In India, it is calculated for April 1 to March 31

2. Identify the right statement from the following

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

National Income is the monetary value of all final goods and services that are produced by the residents of the country.

3. There are two statements given, identify the right statement

i. While calculating GDP, income generated by foreigners in a country is taken into consideration

ii. While calculating GDP, income generated by nationals of a country outside the country is taken into account

a. I only

b. ii only

c. both

d. none

ANSWER: a. I only

While calculating GDP, income generated by nationals of a country outside the country is not taken into account.

4. What is the net value of GDP after deducting depreciation from GDP is

a. Net national product

b. Net domestic product

c. Gross national product

d. Disposable income

ANSWER: b. Net domestic product

After deducting the depreciation charges of plant and machinery from GDP, we get net value of GDP which is called NDP.

5. Consider the following statements and identify the right ones.

i. While calculating GNP, income generated by foreigners in a country is taken into consideration

ii. While calculating GNP, income generated by nationals of a country outside the country is taken into account

a. I only

b. ii only

c. both

d. none

ANSWER: b. ii only

While calculating GNP, income generated by foreigners in a country is not taken into consideration.

6. When depreciation is deducted from GNP, the net value is called

a. Net national product

b. Net domestic product

c. Gross national product

d. Disposable income

ANSWER: a. Net national product

NNP is the net value of GNP after the depreciation of plant and machinery is deducted.

7. The value of NNP at consumer point is

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

NNP at market price is calculated by deducting indirect taxes and subsidies from NNP at factor cost.

8. 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: b. NNP at market price

NNP at factor cost is the value of the NNP when the value of goods and services are taken at the production point.

9. The value of national income adjusted for inflation is called

a. Per capita income

b. Disposable income

c. Inflation rate

d. Real national income

ANSWER: d. Real national income

It is adjusted for inflation that is calculated from a reference point which is a base year.

10. The average income of the country is

a. Per capita income

b. Disposable income

c. Inflation rate

d. Real national income

ANSWER: a. Per capita income

Per capita income is calculated by dividing the total national income by the total population of the year.

11. Consider the following statements and identify the right ones.

i. Personal income refers to the income of individuals of a country.

ii. The income at their disposal after paying direct taxes is called disposable income

a. I only

b. ii only

c. both

d. none

ANSWER: c. both

The income of the individuals at their disposal after paying direct taxes like income tax is called disposable income.

12. Which of the following is added to national income while calculating personal income?

a. Transfer payments to individuals

b. Social security contributions

c. Corporate taxes

d. Undistributed profits

ANSWER: a. Transfer payments to individuals

Personal income refers to the income of the individuals of a country. While transfer payments are added, the other three are subtracted.

13. Which of the following method/s is/are used to calculate national income in India?

a. Production method

b. Expenditure method

c. Income method

d. All the above

ANSWER: d. All the above

Due to non-availability of the data, no single method can solely be used in India. We use a mixture of all the three.

14. The national income estimation is the responsibility of

a. NSSO

b. CSO

c. Finance Ministry

d. National Income Committee

ANSWER: b. CSO

15. Consider the following statements and identify the right ones.

i. CSO is a premier statistical institution for collecting data in India

ii. It presents the national income estimates twice a year.

a. I only

b. ii only

c. both

d. none

ANSWER: a. I only

Central Statistical Organization was established in 1950 and is vested with the responsibility of national income estimation. It presents the estimates once in a year.

16. As per the CSO classification, which of the following does not fall under the industrial sector?

a. Construction

b. Manufacturing

c. Fisheries

d. Mining

ANSWER: c. Fisheries

As per the CSO classification, fisheries fall under the category of agriculture sector.

17. As per the CSO classification, which of the following does not fall under finance and real estate category?

a. Banking

b. Construction

c. Insurance

d. Real estate

ANSWER: b. Construction

As per the CSO classification, construction falls under the category of industrial sector.

18. As per the CSO classification, which of the following does not fall under industrial sector?

a. Electricity

b. gas and water supply

c. transport and communication

d. manufacturing

ANSWER: c. transport and communication

As per the CSO classification, transport and communication falls under transport, communication and trade category.

19. Consider the following statements and identify the right ones.

i. The data for NI and PCI are collected at current prices.

ii. They are deflated using the deflator index to get value at constant prices.

a. I only

b. ii only

c. both

d. none

ANSWER: c. both

This is done so because the national income can increase either due to increase in production of goods and services or in prices.

20. The most appropriate measure of a country's economic growth is

a. GDP

b. NDP

c. Per capita real income

d. GNP

ANSWER: c. Per capita real income

Per capita income is the average income of the country. Per capita real income takes inflation into consideration.