MCQs - National Income Accounting, Related Concept, Measurement | Crash Course of Macro Economics -Class 12 - Commerce PDF Download

Q.1. Output means ______ unless stated otherwise
(a) Gross output at MP
(b) Net output at MP
(c) Gross output at FC
(d) None
Ans: A

Q.2. Which of the following is not a component of domestic income?
(a) Operating surplus
(b) Compensation of employees   
(c) Net factor income from abroad
(d) Mixed income
Ans: C

Q.3. A growing country is one whose
(a) GNP is rising at current prices
(b) GNP is constant at constant prices
(c) GNP is rising at constant prices
(d) None of these
Ans: C

Q.4. If factor cost is greater than marker price, it means that
(a) Indirect taxes < subsidies
(b) Indirect taxes > subsidies
(c) I.T = subsidies
(d) None
Ans: A

Q.5. An Indian farmer produces wheat without incurring cost of inputs and sells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs. 1,200 to baker.  The baker sells bread to consumers for Rs. 1,600.  Total value added is Rs.
(a) 1,600
(b) 2,200
(c) 1,000
(d) 1,400
Ans: A

Q.6 Which of the following is not true about final goods?
(a) Final gods satisfy wants of ultimate consumers and producers.
(b) Final goods have direct demand as they satisfy the wants directly.
(c) Final goods are subject to further transformation in the process of production.
(d) Final goods are neither used up as raw-material nor for resale in the same year.

Ans: C

Q.7. Following is an example of final good:
(a) Flour used by a baker in making biscuits
(b) Unsold stock of goods lying with the sellers
(c) Tyres purchased by a transport company
(d) Mobile sets purchased by a mobile dealer
Ans: B

Q.8. Which out of the following is not included in estimation of NI?
(a) Subsidized Lunch
(b) Old-age Pension
(c) Free Medical facilities
(d) Construction of a house
Ans: B

Q.9. Which of the following is included in compensation of employees?
(a) Dearness Allowance
(b) Tools given to employees to be used during work
(c) Payment by insurance company to an injured employee
(d) Contribution by employee to provident fund
Ans: A

Q.10. Which of the following is a synonym of “Undistributed Profits”?
(a) Savings of private corporate sector
(b) Reserves and Surplus
(c) Retained Earnings
(d)  All of these
Ans: D

Q.11. ‘Commodity service method’ is another name for:
(a) Expenditure method
(b) Income method
(c) Value-added Method
(d) None of these
Ans: C

Q.12. Which of the following statements is true?
(a) Bread is always a consumer good

(b) All producer goods are not capital goods
(c) Transfer income is received for providing a good or service in return
(d) Interest paid by a household on car loan from a bank is a factor payment
Ans: B

Q.13. Which is not a component of private final consumption expenditure?
(a) Expenditure on the purchase of new flats by the households.
(b) Expenditure on the purchase of consumer durables by the households.
(c) Purchases made abroad by resident households.
(d) Expenditure on goods and services by private non-profit institutions serving households.
Ans: A

Q.14. Which of the following items is excluded from gross domestic capital formation?
(a) Expenditure on construction of roads
(b) Exp. on the purchase of shares and debentures
(c) Expenditure on the purchase of new flats
(d) Expenditure on the construction of new houses
Ans: B

Q.15. Distributed Profits ’ is also known as:
(a) Corporate Tax
(b) Dividend
(c) Retained earnings
(d) None of these
Ans: B

Q.16. Piyush’s mother is a teacher.  She also teaches Piyush.  How would you treat this white calculating national income and domestic income?
(a) It will be included in the national income, but not in the domestic income.
(b) It will be included in the domestic income, but not in the national income.
(c) It will be included in domestic income as well as national income.
(d) It will neither be included in the domestic income nor in the national income.
Ans: D

Q.17. Which of the following is best suited as an example of a normal resident of India?
(a) US national working in WHO office in New Delhi
(b) Ambassador of Zaire to India
(c) An Italian national working in IMF office in Mumbai
(d) Indian Representative to UN
Ans: D

Q.18. Subsidy implies Selling the product
(a) To the government at higher prices
(b) Below the cost of production.
(c) Selling the product at loss.
(d) Selling the product at cost plus indirect taxes.
Ans: B

Q.19. Which of the following is correct?
(a) If national income rises, per capita income must also rise.
(b) If population rises, per capita income must fall.
(c) If national income rises, welfare of the people must rise.
(d) None of the above.
Ans: D

Q.20. The responsibility of collecting data and preparing estimates relating to India’s national income has been entrusted to the
(a) NITI Aayog
(b) National Information Centre (NIC)
(c) Central Statistical Organisation (CSO)
(d) Indian Statistical Institute (ISI)
Ans: C

Q.21. Which of the following is included in the national income of an economy?
(a) Sales tax
(b) Road construction  
(c) Financial help to earthquake victims
(d) Services of a housewife
Ans: B

Q.22. Which of the following activities is not included in the national income?
(a) Cooking for the family by a homemaker
(b) Cleaning the bookshelf by a student
(c) Helping the daughter with her homework by a teacher
(d) All of the above
Ans: D

Q.23. Which of the following does not constitute intermediate consumption?
(a) Non-durable goods received in kind by the government as transfer payments
(b) Painting of buildings
(c) Expenditure on minor repairs of a building by producer households
(d) Direct purchases made abroad by the government
Ans: D

Q.24. Which of the following is a negative externality caused to you, if you have a public park next to your house?
(a) A clear better environment
(b) More people poking in your house
(c) Availability of fresh air
(d) A  place to relax
Ans: B

Q.25. Which of the following are covered under the domestic territory of India?
(a) State Bank of India in London
(b) Google office in India
(c) Office of Tata Motors in Australia
(d) Russian Embassy in India
Ans: B

Q.26. Sugar purchased by a Sweet shop is an ____ good, while it is a _____ good when it is purchased by a consumer.
(a) Capital, final
(b) Final, intermediate
(c) Intermediate, final
(d) Final, producer
Ans: C

Q.27. Corporate Tax is not a part of:
(a) Personal Income
(b) National Income
(c) Domestic Income
(d) Private Income
Ans: A

Q.28. Goods which are not used in the production of other goods are called:
(a) Capital goods
(b) Consumption goods
(c) Producer goods
(d) Intermediate goods
Ans: B

Q.29. Depreciation is the:
(a) Loss of vale of fixed assets in use due to normal wear and tear
(b) Loss of value of fixed assets in use due to normal rate of accidental damages
(c) Loss of value of fixed assets in the due to foreseen obsolescence
(d) All of these
Ans: D

Q.30. Which of the following is the cause of unexpected obsolescence?
(a) Natural calamities
(b) Change in demand
(c) Change in technology
(d) Both (b) and (c)
Ans: A

Q.31. If GDPFC = Rs. 24,760, operating surplus = Rs. 13,450, mixed income = Rs. 4,260 and consumption of fixed capital = Rs. 530, then compensation of employees will be:
(a) Rs. 6,520
(b) Rs. 7,050
(c) Rs. 18,240
(d) Rs.43,000
Ans: A

Q.32. Real GDP is considered as an index of:
(a) Price level in the economy
(b) Welfare of the people
(c) Profit maximization
(d) None
Ans: B

Q.33 Which of the following makes GDP an inappropriate index of welfare? 
(a) Non-monetary transactions
(b) Internationality  
(c) Composition and distribution of GDP
(d) All of these
Ans: D

Q.34. Smoke emitted by a chemical factory and causing air pollution is an example of:
(a) Positive externalities
(b) Negative externalities
(c) Either of the two
(d) Neither of the two
Ans: B

Q.35. Classification of goods depends on the:
(a) consumption of goods
(b) production of goods
(c) first-use of goods
(d) end-use of goods
Ans: D

Q.36. If a car is purchased by a taxi operator, it will be regarded as a:
(a) capital good
(b) intermediate good
(c) final good
(d) both (a) and (c)
Ans: D

Q.37. Net capital formation causes:
(a) increase in production capacity
(b) increase in depreciation
(c) increase in profits
(d) increase in cost
Ans: A

Q.38. Which of the following leads to unexpected obsolescence?
(a) Change in demand
(b) Natural calamities
(c) Change in technology
(d) None of these
Ans: B

Q.39. Depreciation reserve fund is needed for:
(a) inventory stock
(b) advertisement
(c) replacement investment
(d) none of these
Ans: C

Q.40. Household inventory is:
(a) not included in national income
(b) a stock concept
(c) both (a) and (b)
(d) none of these
Ans: C

Q.41. Remittances from a relative working abroad are:
(a) included in national income
(b) not included in national income
(c) transfer payments
(d) both (b) and (c)
Ans: D

Q.42. Own account production of goods is included in national income because:
(a) goods are tangible
(b) their valuation is possible
(c) goods are more productive than services
(d) none of these
Ans: B

Q.43. Which of the following is not an element of final consumption expenditure?
(a) Household expenditure on food
(b) Government final consumption expenditure
(c) Household expenditure on education
(d) Expenditure on raw material
Ans: D

Q.44. Which of the following is irrelevant in the estimation of compensation of employees?
(a) Free accommodation provided to the school principals
(b) Free education of the students whose parents are working in schools
(c) Wages and salaries in cash
(d) Old-age pensions
Ans: D

Q.45. Which of following is a consumption good?
(a) Doctor’s Services
(b) Television
(c) Use of Petrol
(d) All
Ans: D

Q.46. Which of following is not included in national income?
(a) Factor income
(b) Rent
(c) Operating surplus
(d) Transfer income
Ans: D

Q.47. Which of following is not a capital good?

(a) Use of Machine tools
(b) Raw Material
(c) Advocate’s Services
(d) Heavy Machinery
Ans: C

Q.48. Which of following is not an intermediate goods?
(a) Wheat
(b) Gold
(c) Service of Doctor
(d) Sand and Bricks
Ans: C

Q.49. Which of following is not a final good?
(a) Machinery purchased by dealer
(b) Machinery purchased by a factory
(c) Use of petrol
(d) Washing machine
Ans: A

Q.50. Which of the following includes depreciation?
(a) GNPMP
(b) NNPMP
(c) NNPFC
(d) None of these
Ans: A

Q.51. Which of the following is not a part of national income?
(a) Depreciation
(b) Net factor income from abroad
(c) Operating surplus
(d) Mixed income
Ans: A

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