Test: National Income Accounting - 2


20 Questions MCQ Test NCERT Textbooks (Class 6 to Class 12) | Test: National Income Accounting - 2


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QUESTION: 1

An example of transfer payments is

Solution:

Transfer payments are unilateral ( one sided payments ) no corresponding flow of goods and services for example: donation, old age pension, unemployment allowance etc

QUESTION: 2

An example of factor payments is

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QUESTION: 3

Consumption goods are those which are bought to satisfy wants

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QUESTION: 4

An example of consumption goods is

Solution:

Goods which are consumed for their own sake to satisfy current wants of consumers directly are called consumption (or consumer) goods.

Capital goods are fixed assets of producers which are repeatedly used in production of other goods and services. Alternatively durable goods which are bought for producing other goods but not for meeting immediate needs of the consumer are called capital goods. 

QUESTION: 5

An example of durable goods is

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QUESTION: 6

An example of non durable goods is

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QUESTION: 7

An example of semi durable goods is

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QUESTION: 8

An example of capital goods is

Solution:

Capital goods are man-made, durable items businesses use to produce goods and services. They include tools, buildings, vehicles, machinery and equipment.
Capital goods are also called durable goods, real capital, and economic capital. Some experts just refer to them as "capital." This last term is confusing because it can also mean financial capital. In accounting, capital goods are treated as fixed assets. They’re also known as “plant, property, and equipment.”

QUESTION: 9

Final goods are those goods

Solution:

Consumer goods are ultimately consumed, rather than used in the production of another good. For example, a microwave oven or a bicycle that is sold to a consumer is a final good or consumer good, but the components that are sold to be used in those goods are intermediate goods.

QUESTION: 10

In intermediate goods

Solution:

Intermediate goods or producer goods or semi-finished products are goods , such as partly finished goods, used as inputs in the production of other goods including final goods. A firm may make and then use intermediate goods, or make and then sell, or buy then use them.

QUESTION: 11

In final goods

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QUESTION: 12

In a two sector circular flow model the two sectors are

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QUESTION: 13

In a three sector circular flow model the three sectors are

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QUESTION: 14

When will the domestic income be greater than the national income?

Solution:

Gross National Income = Gross Domestic Income + Net Factor Income from Abroad

where,
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.

QUESTION: 15

What must be added to domestic factor income to obtain national income?

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QUESTION: 16

State which one of the following is true .

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QUESTION: 17

Can the gross domestic product be greater than the gross national product?

Solution:

It is possible for GDP to be higher than GNP and it is also possible for GNP to be higher than GDP. GNP greater than GDP is best for a country because it means that the population of that country will have a greater total income (i.e. total output) than if GDP was greater than GNP.

QUESTION: 18

Can the change in inventories be in negative?

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QUESTION: 19

Can the net indirect taxes be negative?

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QUESTION: 20

Can the net factor income earned from abroad be negative?

Solution:

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