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Test: National Income Accounting - 2


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20 Questions MCQ Test Indian Economy for UPSC CSE | Test: National Income Accounting - 2

Test: National Income Accounting - 2 for UPSC 2022 is part of Indian Economy for UPSC CSE preparation. The Test: National Income Accounting - 2 questions and answers have been prepared according to the UPSC exam syllabus.The Test: National Income Accounting - 2 MCQs are made for UPSC 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: National Income Accounting - 2 below.
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Test: National Income Accounting - 2 - Question 1

An example of transfer payments is

Detailed Solution for Test: National Income Accounting - 2 - Question 1

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

Test: National Income Accounting - 2 - Question 2

An example of factor payments is

Test: National Income Accounting - 2 - Question 3

Consumption goods are those which are bought to satisfy wants

Test: National Income Accounting - 2 - Question 4

An example of consumption goods is

Detailed Solution for Test: National Income Accounting - 2 - Question 4

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. 

Test: National Income Accounting - 2 - Question 5

An example of durable goods is

Test: National Income Accounting - 2 - Question 6

An example of non durable goods is

Test: National Income Accounting - 2 - Question 7

An example of semi durable goods is

Test: National Income Accounting - 2 - Question 8

An example of capital goods is

Detailed Solution for Test: National Income Accounting - 2 - Question 8

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.”

Test: National Income Accounting - 2 - Question 9

Final goods are those goods

Detailed Solution for Test: National Income Accounting - 2 - Question 9

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.

Test: National Income Accounting - 2 - Question 10

In intermediate goods

Detailed Solution for Test: National Income Accounting - 2 - Question 10

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.

Test: National Income Accounting - 2 - Question 11

In final goods

Test: National Income Accounting - 2 - Question 12

In a two sector circular flow model the two sectors are

Test: National Income Accounting - 2 - Question 13

In a three sector circular flow model the three sectors are

Test: National Income Accounting - 2 - Question 14

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

Detailed Solution for Test: National Income Accounting - 2 - Question 14

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.

Test: National Income Accounting - 2 - Question 15

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

Test: National Income Accounting - 2 - Question 16

State which one of the following is true .

Test: National Income Accounting - 2 - Question 17

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

Detailed Solution for Test: National Income Accounting - 2 - Question 17

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.

Test: National Income Accounting - 2 - Question 18

Can the change in inventories be in negative?

Test: National Income Accounting - 2 - Question 19

Can the net indirect taxes be negative?

Test: National Income Accounting - 2 - Question 20

Can the net factor income earned from abroad be negative?

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