Economics/Business Economics 59

National Income Accounting

1. National Income ordinarily means derived from abroad which can be measured in
A. gross national product at market prices money.” This is the remark of
B. net national product at market prices A. Alfred Marshall B. J.R. Hicks
C. gross national product at factor cost C. David Ricardo D. A.C. Pigou
D. net national product at factor cost
9. The best method of computing national income is
2. “National income as the aggregate net product of, and A. Product Method
the sole source of, payment for all the agents of B. Income Method
production” has been defined by C. Expenditure Method
A. A.C. Pigou B. Alfred Marshall D. Combination of income and production method
C. Robbins D. Dusen bery
10. Which of the following is not, by definition, equal to
3. The difference between gross domestic product and National Income?
net domestic product equals A. National output B. National expenditure
A. transfer payments B. depreciation cost C. National product D. National wealth
C. indirect taxes D. subsidies
11. An example of double counting in national income
4. “The labour and capital of a country, acting upon its would be
natural resources, produce annually a certain net A. wages of bus and train drivers
aggregate of commodities, material and immaterial, B. cotton output and cotton cloth output
including services of all kinds”. This definition of C. electricity ouput and water output
National Income is given by D. tax receipts and earnings of inland revenue
A. Adam Smith B. Lionel Robbins officials
C. John Stuart Mill D. Alfred Marshall
12. Which of the following is a transfer payment?
5. The total income earned in any given year by the A. payment made to housewife
owners of productive resources is measured by B. pocket allowance to children
A. personal income C. maintenance allowance to old parents
B. disposable income D. all of the above
C. gross national product
D. national income 13. If GNP is 16% higher than the last year’s and the rate
of inflation is 9%, production in the economy has
6. In calculating a country’s GNP at market prices one grown by
of the following is not included A. 4% B. 5%
A. wages and salaries before tax C. 6% D. 7%
B. indirect taxes
C. bonus to the employees 14. Among these statements which one clearly explains
D. depreciation allowances the meaning of ‘Subsidies’
A. Payment of Government for purchase of goods and
7. While calculating personal income, we have to deduct services
the following from private income– B. Payment by business enterprises to factors of
A. saving of private corporate sector and corporation production
tax C. Payment by companies to shareholders
B. consumption of fixed capital D. Payments by Government to business enterprises
C. direct taxes paid by households without buying any goods and services
D. all of the above
15. The difference between Gross National Product and
8. “National divident is that part of objective income of Gross Domestic Product is equal to
the community, including of course the income A. Gross Domestic Investment

59
 B. Net Foreign Investment Select the correct answer using codes given below:
C. Net Imports A. 1, 3 and 4 B. 1 and 4
D. Net Factor Income from abroad C. 2, 3 and 4 D. 1, 2, 3 and 4

16. Net domestic product at factor cost equals net domestic 24. Which one of the following is not included in
product at market prices calculating groos national product of an economy?
A. plus subsidies minus indirect taxes A. Wages and Salaries before tax
B. minus subsidies + indirect taxes B. Depreciation allowances
C. minus subsidies C. Indirect taxes
D. plus indirect taxes D. Subsidies

17. When gross investment is positive, net investment 25. The consolidated government budget differs from the
A. is the highest union budget by
B. is zero A. imports
C. is positive B. state and local government expenditure
D. can be either positive or negative C. union tax receipts
D. intergovernmental transfers
18. National product is not affected by which of the
following? 26. Which of the following is not an investment
expenditure?
A. Sale of a second hand automobile by A to B
A. The purchase of a new house
B. Sale of a new car by an automobile dealer
B. Expenditures on producers durable equipment
C. Sale of a new car by an automobile company
C. An increase in business inventories
D. Sale of a new car on hire purchase
D. Expansion of the main plant of a company
19. Net foreign investment is equal to E. None of the above
A. total amount of foreign investment in a country
27. Which one of the following is a transfer income?
B. investment by foreigners during a particular year
A. The salary of a M.P.
C. investment by local resident in a foreign country B. Company dividends to share holders
D. investment by the foreigners in this country minus C. Rents from house property
investment by residents of this country in foreign D. Unemployment allowance
countries during a given time period.
28. For the study of the long term growth of the economy
20. “Disposable income” does not include we use
A. business transfer payments A. real GNP B. transfer payment
B. social security benefits C. per capita income D. disposbale income
C. corporate dividends
D. personal income taxes 29. Interest on the national debt is included in
A. NNP B. GNP
21. Circular flow of income in a two sector model implies C. Personal Income D. National Income
A. payments from households to firms and back again
B. payments from firms to firms 30. Double counting has the effect of
C. payments from households to house holds A. underestimating national product
D. payments from households to firms B. overestimating national product
C. distorting national product
22. Which one of the following is not a Transfer Payment D. misleading conclusions about national income
in National Income accounting?
31. The smallest national income accounting aggregate is
A. Interest on government bonds held by Indians
usually
B. Drought relief payments
A. PI B. GNP
C. Unemployment benefits C. DPI D. NI
D. Salaries of Supreme Court Judges
32. The Government sector's contribution to GNP is
23. Which of the following would be included in measured by
calculation of national income? A. government purchases of goods and services
1. Commission paid to a salesman B. wages and salaries and supplements as paid by the
2. Subsidies paid to a farmer government
3. Social Security payments C. intergovernmental surplus
4. Payments to a part time polytechnic lecturer D. the size of the government surplus
33. Depreciation means Total family income
A. destruction of a plant in a fire accident A.
Number of family members
B. loss of equipment over time due to wear and tear
C. closure of the plant due to raw material problem National Income
B.
D. closure of the plant due to lockout Total population
34. Which of the following is not a method of estimating Total Income of various industries
C.
GNP? Total number of industrial workers
A. The value added approach Total government revenue
B. Product approach D.
Total population
C. Income approach
D. The financial approach 43. Income per capita increases when
35. Depreciation is loss of value of A. GNP increases at the same rate as population
A. capital assets B. GNP increases slower than population
B. stocks C. GNP increases faster than population
C. intermediate goods D. GNP does not increase and population increases
D. final goods slowly

36. GNP is ` 600 crore and NNP is ` 4.75 crore; therefore 44. This year, if national product at factor cost is ` 600
depreciation is crore, indirect taxes ` 200 crore and subsidies ` 75
A. ` 100 crore B. ` 175 crore crore, national product at market prices is
C. ` 50 crore D. ` 125 crore A. ` 750 crore B. ` 725 crore
C. ` 500 crore D. ` 250 crore
37. Which of the following is not true?
A. GNP less depreciation = NNP 45. Which one of the following measures does not include
B. GNP = GDP + Net income from foreign assets final goods and services
C. NNPFC = NNPMP + Subsidies – Indirect taxes A. GNP
D. GNP = NNP – depreciation allowance B. NNP
C. Disposable income
38. NNP at market prices and NNP at factor costs will be D. National income
equal when there is E. None of the above
A. no direct tax
B. no indirect tax 46. Imports into a country generate income for
C. no subsidy A. domestic manufacturers
D. no indirect tax and no subsidy B. government
C. traders
39. Gross national product is equal to D. foreign products
A. total output of goods and services in a year
B. total output minus intermediate consumption 47. When less output is consumed than produced during
C. total output minus savings a given income period, national wealth
D. total output plus total factor payments A. increases
B. remains unchanged as there is no relationship
40. In a closed economy model one of the sectors below C. decreases
is not to be considered. Which? D. may increase or decrease
A. Households B. Firms
C. Government D. Foreign trade 48. Which of the following Indian economists
scientifically estimated the national income of India?
41. National product at market prices is higher than A. Dadabhai Naoroji B. Dr. K.N. Raj
national product at factor cost by the amount of C. Dr. V.K.R.V. Rao D. Dr. Vakil
A. subsidies
B. indirect taxes 49. Which of the following items are not included in
C. indirect taxes plus subsidies estimating National income or NNPFC?
D. indirect taxes minus subsidies A. Salary income of artists, dancers and singers
B. Income of smugglers
42. Which of the following formula could be used for C. Payments to farm workers in foodgrains
calculating the per capita income of a country? D. Payment of bank interest for capital borrowed
50. National product at current prices is higher than 59. Disposable Income is equal to–
national product at constant prices during a period of A. GNP – Depreciation
A. Rising prices B. Falling prices B. NNP – Indirect Taxes + Economic Subsidies
C. Stable prices D. Changing costs C. Personal Income – Personal Direct Taxes
D. Personal Income + Economic Subsidies
51. Expenditure on defence is an item of
A. private investment 60. Which one of the follownig will directly increase the
B. public investment GNP?
C. private consumption A. A rise in interest rate
D. public consumption B. A surplus in budget
C. A fall in national debt
52. GNP at market prices is ` 200, net property income
from abroad is ` 20 and indirect taxes are ` 20 and D. An increase in investment
subsidies are ` 10; GDP at factor cost is 61. At present, which one of the following sectors has the
A. ` 160 B. ` 180 largest share in India's National Income?
C. ` 200 D. ` 250 A. Agriculture B. Industry
53. A growing country is one with C. Servies D. Infrastructure
A. rising GNP at constant prices 62. In India National Income Estimates are prepared by
B. constant GNP at constant prices A. Planning Commission
C. rising GNP at current prices B. Central Statistical Organisation
D. None of these C. Reserve Bank of India
54. National income at constant prices can be found out D. Indian Statistical Institute
by 63. NNP is equal to
Price Index Number A. GNP – Total Taxes
A. ×100
National Income at Current Prices B. GNP – Foreign Aid
National Income at Current Prices C. GNP – Depreciation
B. ×100 D. GNP – Indirect Taxes
Price Index Number
National Income at Market Prices 64. There is an increase in “real national income” when
C. ×100 A. prices of essential goods increases
Price Index Number
B. total production in the economy increases
National Income at Factor Cost
D. ×100 C. supply of the money in the economy increases
Price Index Number D. savings of the people increase
55. For a study of the long term grown of the economy
65. Which one among the following GNP identity is
we use
correct?
A. real GNP
B. money GNP aIG aIG
A. Y  B. Y 
C. per capita income 1 b 1 b
D. property of the individual aIG aIG
C. Y  D. Y 
56. Which of the following comes under the category of 1 b 1 b
"tertiary sector"?
66. If economic subsidies are added to and indirect taxes
A. Primary sector B. Secondary sector
are subtracted from the national income at market
C. Service sector D. None of these
prices, then it will be equal to
57. A “refrigerator” operating in a chemist's shop is an A. groos domestic product at market prices
example of B. national income at factor cost
A. Inter mediate good C. net national product at market prices
B. Final good D. None of the above
C. Producer's good
D. Consumer's good 67. Estimate Gross National Product from the data given
below
58. “The General theory of Employment, Interest and Value of consumer : ` 20000 crores
Money” in 1936 was written by good and services
A. Ragnar Nurkse B. J.S. Mill Value of capital : ` 10,000 crores
C. J.B. Say D. J.M. Keynes goods and services
 Value of Exports : ` 4000 crores C. subsidies
Value of Imports : ` 2600 crores D. savings on account of keeping many government
Total Depreciation : ` 1600 crores posts vacant
Which one of the following is correct?
A. ` 31400 crores B. ` 38600 crores 74. In the accounting of the State domestic products
C. ` 29800 crores D. ` 29200 crores A. transfer payments like pension, scholarships etc.
are included
68. For a hypothetical economy the Net National Product B. indirect taxes are not included but direct taxes are
is ` 10,000 crores, indirect taxes are ` 1500 crores C. direct taxes are not included but indirect taxes are
and subsidy is ` 800 crores. The value of National D. supra-regional incomes, as allocated by the so are
Income will be included
A. ` 12300 crores B. ` 10800 crores
C. ` 7700 crores D. ` 9300 crores 75. Which one of the following statements is not correct?
A. Compensation of employees plus operating surplus
69. Assertion (A): Continuous increase in Real National
plus m ixed income of self employed plus
Income is an indication of economic growth.
consumption of fixed capital equals GDP at factor
Reason (R): Increase in National Income does not
cost.
necessarily reflect increase in per capita income.
B. GDP at factor cost plus indirect taxes minus
Select the correct answer using the codes given below:
subsidies equals GDP at market prices.
A. Both A and R are true and R is the correct
explanation of A. C. GDP at factor cost minus depreciation equals net
B. Both A and R are true, but R is not the correct domestic product at factor cost
explanation of A. D. GDP at market prices minus net receipts from abroad
C. A is true, but R is false. plus indirect taxes minus subsidies equals net
D. A is false, but R is true. national product

70. Social accounting of national income addresses to the 76. Which one of the following denotes net state domestic
issue of product?
A. public expenditure on social infrastructure A. Money value of final goods and services produced
B. revenue receipts from and public expenditure on within the boundary of a state plus net inflow of
social services income from outside the state
C. estimating what is being produced, where, how B. Money value of final goods and services produced
much and how and who consumes what and how withing the boundary of a state minus depreciation
much plus indirect taxes of fixed assets
D. share of national income going to the socially C. Money value of final goods and services produced
backward groups within the boundary of a state minus depreciation
plus indirect taxes
71. Gross Domestic Product is the monetary value of
D. Money value of goods and services consumed
A. Stock of goods and services
within the boundary of a state plus net income
B. all final goods and services produced in a year
C. goods produced for market only from outside the state
D. goods produced for the market and for self 77. Which one of the following constitutes government
consumption consumption expenditure?
72. As the country develops, we should find that the A. Compensation to employees plus net purchases
A. relative percentage share of the primary sector in from business enterprises
the national income goes down B. Wages and salaries of government employees
B. absolute share of the agricultural sector in the C. Government expenditure on defence
national income goes down. D. Transfer payments to individuals and state
C. better redistribution of national income is ensured government
by the market only
78. Which one of the following equals the value of output
D. absolute share of the primary sector in the national
of a factory?
income goes down
A. Total value added by factors
73. National income at market price rises due to B. Value of all non-factor inputs plus indirect taxes
A. taxes C. Payments for factor inputs and non-factor inputs
B. additional supply of goods from inports D. Payments for non-factor inputs plus wages
79. Which one of the following items is excluded in D. no corresponding production of goods and services
calculating national income? has taken place to match the payment of such
A. Services of a rented TV set funds
B. ` 10000/- won in a lottery
C. Rented residences 84. Which of following method is/are used to compute
D. Paid house work national income in India?
1. Net output method
80. In which of the following sectors, is product method 2. Net income method
used in computing national income in India? 3. Expenditure method
1. Agriculture and allied activities Select the correct answer using the codes given below
2. Mining and quarrying A. 2 alone B. 1 and 2
3. Registered manufacturing C. 3 alone D. 1, 2 and 3
4. Unregistered manufacturing
Select the correct answer using the codes given below 85. Consider the following statements–
A. 2, 3 and 4 B. 1, 2 and 3 The study of national income accounts is of great
C. 1 and 2 D. 1, 3 and 4 importance because it
1. reveals the changes in the size and composition of
81. Consider the following statements regarding savings the national product.
in different sectors of an economy 2. provides us with information about the distribution
1. Savings of private corporate sector constitute of national income in the society among various
undistributed profits groups.
2. Savings of private corporate sector constitute excess 3. reveals the manner in which national expenditure
of income over expenditure is divided between consumption
3. Savings of government sector constitute excess of Of these statement
revenue receipts over revenue expenditure A. 1 and 2 are correct
4. Savings of government sector constitute excess of B. 2 and 3 are correct
total revenue over total expenditure C. 1 and 3 are correct
Of the above statements D. 1, 2 and 3 are correct
A. 2 and 3 are correct
B. 3 and 4 are correct 86. Consider the following types of income–
C. 1 and 3 are correct 1. Personal income
D. 2 and 4 are correct 2. Private income
3. Disposable income
82. Match List I with List II and select the correct answer 4. National income
using the codes given below the lists The correct sequence in descending order of their
List I List II magnitude is
(a) Consumption of fixed 1. Gross output less inter A. 4, 2, 1, 3 B. 4, 2, 3, 1
capital industry purchases C. 2, 4, 3, 1 D. 2, 4, 1, 3
(b) Value added 2. National income in a
closed economy 87. The national income of a country for a given period
(c) Net income from 3. Depreciation is equal to the
abroad A. total value of goods and services produced by the
(d) Domestic product 4. (X – M) national
B. sum of total consumption and investment
Codes: expenditure
(a) (b) (c) (d) C. sum of personal income of all individuals
A. 3 1 2 4 D. money value of final goods and services produced
B. 1 3 2 4
C. 1 2 4 2 88. Gross National Savings measure is the
D. 3 1 4 2 A. amonunt of GNP not consumed
B. excess of income over consumption plus the net
83. Transfer payments by the government are NOT taxes.
included in the net domestic product because C. sum of retained earning and depreciation
A. these are gifts from the government to the recipients D. excess of disposable income over consumption
B. their opportunity cost is zero
C. such payments may not ultimately reach the 89. Social accounting system in India is classified into
recipients which one of the following sets of sectors?
 A. Enterprise, households and governments 96. Value added means value of
B. Assets, liabilities and debt position A. output at market prices
C. Public sector, private sector and joint sector B. goods and services less depreciation
D. Income, product and expenditure C. goods and services less cost of intermediate goods
and services
90. Assertion (A) : A rise in the aggregate demand and D. output at factor cost
aggregate supply of goods and services raises national
income. 97. Match List-I with List-II and select the correct answer
Reason (B) : National income represents the value of using the codes given below the lists :
aggregate production in monetary terms. List I List II
A. Both A and R are true and R is the correct (a) Value added 1. Constant prices
explanation of A. (b) Nominal income 2. Input-output matrix
B. Both A and R are true, but R is not a correct (c) Real income 3. Pension
explanation of A. (d) Transfer earnings 4. Current prices
C. A is true, but R is false Codes:
D. A is false, but R is true (a) (b) (c) (d)
A. 4 2 3 1
91. For a closed economy having no foreign trade, which
B. 2 4 1 3
one of the following is correct? C. 4 2 1 3
A. GDP = GNP B. GDP > GNP D. 2 4 3 1
C. GDP < GNP D. BDP  GNP
98. Which one of the following statements is correct?
92. Which of the following statements explains the A. Gross national product includes depreciation
difference between NNP (NET National Product) and B. Value added includes transfer payments
NMP (Net Material Product)? C. Personal income includes undis-tributed profits
1. NNP includes services D. Disposable income includes personal taxes
2. NNP exludes services
3. NMP includes services 99. GNP at market prices for 2020-21 was ` 192866 crore
4. NMP excludes services and the GNP at factor cost was ` 171201 crore. The
Select the correct answer using the codes given below government paid at ` 5107 crore as subsidies during
A. 1 and 4 B. 2 and 4 the year. The amount of indirect taxes in crores for
C. 1 and 3 D. 2 and 3 the year should workout to
A. 31879 B. 26772
93. Assertion (A) : Y = C + I C. 21665 D. 16558
Reason (R) : C and I are important determinants of
100. GNP exceeds NNP by
national income.
A. the amount of total taxes
A. Both A and R are true and R is the correct
B. government expenditure
explanation of A
C. transfer payments
B. Both A and R are true, but R is not correct D. the difference between gross investment and net
explanation of A investment
C. A is true, but R is false
D. A is false, but R is true 101. GNP measures
A. the flow of income generated for domestic
94. The GNP-Gap is the gap between consumption
A. GNP and NNP B. the flow of income generated for all legal types of
B. GNP and depreciation economic activities
C. GNP and GDP C. the stock of goods available
D. Potential and actual GNP D. the increase in the wealth of the economy
95. In an economy where people always consume half 102. The GNP at factor cost is equal to GNP at market
of any additional income and save the other half, an prices
additional Govt. expenditure of ` 20,000 can create an A. (+) Subsidies
additional income of B. (–) Indirect taxes
A. ` 10,000 B. ` 40,000 C. (+) Indirect taxes (–) Subsidies
C. Zero D. ` 20,000 D. (–) Indirect taxes (+) Subsidies
(2715) Eco./Business Eco.—9
103. Which of the following is the broadest measure of Reason (R): Transfer earnings are not payments for
National Income? factor services.
A. Gross National Income Codes:
B. Net National Income A. Both A and R are individually true and R is the
C. Disposable Income correct explanation of A.
D. Personal Income B. Both A and R are individually true, but R is not
a correct explanation of A.
104. Transfer payments are
C. A is true, but R is false.
A. only gifts between private individuals
D. A is false, but R is true.
B. payments for past services rendered
C. payments that are not related to the performance 113. An economy’s Net National Income is $ 20000
of current productive activities million, indirect taxes are $ 2000 million, subsidies
D. exchanges of funds between different levels of are $ 1000 million and its population 150 million.
government What will be the National income at factor cost?
A. $ 21000 million B. 19000 million
105. The following is not included while estimating the
C. 23000 million D. 22000 million
GNP by income method
A. Wages B. Rent 114. Given
C. Profit D. Taxes C = 50 + 0.5 Y
I = 80
106. Difference between GNP at market prices and NNP at
G = 100
factor cost is
the equilibrium level of income is
A. depreciation
A. 460 B. 560
B. net indirect taxes
C. depreciation and net indirect taxes C. 230 D. 360
D. subsidies 115. Which one of the following is NOT included while
107. When nominal GNP is ` 1100 and real GNP is ` 1000, estimating national income through income method?
the GNP deflator is A. Rental Income
A. 9.09 B. 90.91 B. Undistributed Profits
C. 1.11 D. 110 C. Mixed Income
D. Pensions
108. The total income earned in any given year by resource
suppliers is measured by 116. Given are the following informations about an
A. GNP B. NNP economy
C. PI D. NI Consumption = 5000
Gross Investment = 1000
109. Transfer payments are included in Govt. Purchases = 800
A. NNP B. GNP Exports = 600
C. PI D. NI Imports = 800
Depreciation = 250
110. The difference between Net National Product (NNP)
What is the GNP at market prices?
and Net Domestic Product (NDP) is
A. 7100 B. 6850
A. Net exports
C. 6600 D. 6350
B. Net income from abroad
C. Net foreign aid 117. The GNP of an economy at market prices is ` 10,000,
D. Net borrowing from abroad Net factor income from abroad is ` 1000, indirect
111. Estimates of GDP by PPP method seeks to measure in taxes ` 800, subsidies ` 500 and depreciation ` 1000.
real terms What is the GDP at market prices?
A. relative level of economic well-being across A. 9,000 B. 7700
countries C. 11000 D. 13300
B. level of human development 118. Consider the following statements
C. ability to repay external debt 1. At the time of rising prices, NNP at current prices
D. None of the above is less than NNP at constant prices.
112. Assertion (A): Transfer earnings are not to be included 2. At the time of rising prices, NNP at current prices
in the national income estimation. is higher than NNP at constant prices.
(2715) Eco./Business Eco.—9-II
 3. NNP at current prices and NNP at constant prices 126. A criticism of Gross National Product as a criterion of
are always same irrespective of changes in prices. economic measurment is that it
4. NNP at current prices is equal to NNP at constant A. is impossible to express it in terms of constant
prices at the time of stable prices. price
Which of these statements are correct? B. does not include the value of services
A. 1 and 2 B. 1 and 3 C. does not include the unpaid services of housewives
C. 2 and 3 D. 2 and 4 D. does not include imports and exports
119. Assume that between 2005 and 2010, GNP increased 127. Which of the following statements is true about the
from ` 1000 crore to ` 1500 crore and the index of national income accounts?
prices increased from 100 to 200. Which one of the A. They allow for changes in the quality of goods
following expresses GNP for 2010 in terms of 2005 and services
prices? B. They measure social costs
A. 1000 crore B. 750 crore C. They measure economic and social values
C. 1500 crore D. 500 crore D. None of the above
120. Which one of the following statements relating to 128. Which one of the following measures does not include
transfer payments, capital gains and illegal activities final goods and services?
is correct? A. GNP
A. Market transactions such as transfer payments, B. NNP
capital gains are included and illegal activities are C. Disposable income
omitted in national product D. National income
B. Market transactions such as transfer payments,
capital gains and illegal activities are omitted in 129. The price index for two years 2001 and 2009 is 100
national product and 185 respectively. National income calculated at
C. Market transactions such as transfer payments are current price during the two years is ` 40000 crore.
included but capital gains and illegal activities are Considerably 2001 as the base year, what is the real
omitted in national product national income in 2009?
D. All the three market transactions should be included A. ` 40095 crore B. ` 85000 crore
in national product C. ` 45990 crore D. ` 38960 crore

121. In 2010 GNP at current prices was ` 750 crores. 130. Assume that inventories grow rapidly because sales
Compared to 2005 the price level was higher by 50 fail to reach the levels expected by entrepreneurs.
percent. In 2010 GNP at 2005 constant prices will be This generally indicates that
A. ` 750 crore B. ` 600 crore A. investment is in excess of saving
C. ` 500 crore D. ` 725 crore B. intended saving is in excess of intended investment
C. short-term investment is in excess of income
122. National Income total reveals D. intended investment is zero
A. the spending side
B. the production side 131. Disposable income plus direct taxes paid by
C. the distributive side households and miscellaneous receipts of government
D. the investment side administrative departments equals
A. Net national product at factor cost
123. A durable-use goods is presumed to be consumed B. Net domestic product at market prices
A. gradually over life time C. Private income
B. in the year when it remains no more useful
D. Personal income
C. in the year it is manufactured
D. in the year it is purchased by the consumer 132. Gross national product and gross domestic product of
an economy would tend to be equal if
124. Which of the following is not a public good?
A. total receipts on account of exports are more than
A. The Police Force B. National Defence
total payments on account of imports
C. Street lighting D. Electricity
B. total receipts on account of exports are less than
125. If gross investment falls to zero, national income does total payments on account of imports
not fall to zero because of C. total receipts on account of exports are equal to
A. Consumption B. The Bank Rate total payments on account of imports
C. The multiplier D. The accelerator D. None of the above
133. Match the following : Codes:
List I List II A. 4000 B. 4500
(a) C + I + G + (X–M) 1. NDP C. 5000 D. 3500
(b) GDP-Depreciation 2. NDPFC
139. National product at market prices is higher than
(c) NDPMP –IT + S 3. Disposable income
national product at factor cost by the amount of
(d) PY– Direct taxes 4. GNP
A. Indirect taxes
Codes:
B. Subsidies
(a) (b) (c) (d)
C. Indirect taxes + subsidies
A. 3 2 1 4
D. Indirect taxes – subsidies
B. 4 1 2 3
C. 3 4 1 2 140. Which of the following is not investment?
D. 1 2 3 4 A. Expenditure on purchase of capital goods
B. Expenditure on purchase of foodgrains
134. While calculating national income, a transfer payment
C. Expenditure on expansion of the plant
can be recognised if D. Expenditure on setting up a new plant
A. no money transaction is involved
B. consumer income is increased Directions: Questions 141 and 142 are based on the
C. no good or service is produced in the process following data given for an economy:
Wages and Salaries = 30,000
D. no tax relief, is involved
Interest and Profit = 15,000
135. What should be substituted for X and Y in the Transfer and incomes = 2000
following equation? Rent = 5000
GNP at market prices = GNPFC – X + Y Social Security Contribution = 2000
A. Indirect taxes, zero Undistributed profits = 2500
B. Indirect taxes, subsidies Personal taxes = 1500
C. Subsidies, Indirect taxes
141. Personal income is equal to
D. Zero, subsidies
A. 53500
136. Using the following data, NDPFC will be B. 55500
1. GNPFC = 71047 C. 57000
2. Indirect taxes less subsidies = 8344 D. 50000
3. Depreciation = 4486 142. Personal disposable income is equal to
4. Net Factor income from abroad A. 57500 B. 56000
= (–232) C. 52000 D. 50000
A. 86137 B. 74905
C. 71047 D. 66793 143. Which of the following is not included in a country’s
capital stock?
137. A transfer income is best defined as one A. Company debentures and Shares
A. which does not represent income for economic B. Raw materials in the hands of producers
activity C. Docks and Harbours
B. which arises when people do unpaid jobs for each D. Finished goods in the hands of producers
other
C. which is paid entirely out of some one else’s 144. If value added at different stages are added, the total
income will
D. which is made up of unearned income A. equal the value of the final product
B. overestimate the value of the final product
138. Calculate national income by income and expenditure C. underestimate the value of the final product
methods from the data given below D. misrepresent the value of the final product
1. Wages = 1500
2. Rent = 500 145. If depreciation of capital assets is ignored from
3. Interest = 500 national income, it will result in
4. Profits = 1500 A. depletion of capital assets
5. Consumption = 2500 B. overestimation of National Income
6. Net domestic investment = 1300 C. exaggerating the value of capital goods
7. Net Foreign investment = 200 D. underestimating the value of output
 ANSWERS
1 2 3 4 5 6 7 8 9 10
D D B D D D A D D D
11 12 13 14 15 16 17 18 19 20
B D D D D A D A D D
21 22 23 24 25 26 27 28 29 30
A D B B B A D A C B
31 32 33 34 35 36 37 38 39 40
C A B D A D D D B D
41 42 43 44 45 46 47 48 49 50
D B C B C D A C B A
51 52 53 54 55 56 57 58 59 60
D B A B A C C D C D
61 62 63 64 65 66 67 68 69 70
C B C B A B A D C C
71 72 73 74 75 76 77 78 79 80
B A A C A C A C B B
81 82 83 84 85 86 87 88 89 90
D D D D D A D B A A
91 92 93 94 95 96 97 98 99 100
A A A D B C B A D D
101 102 103 104 105 106 107 108 109 110
B D B C D C A D C B
111 112 113 114 115 116 117 118 119 120
A A A A D C A D B B
121 122 123 124 125 126 127 128 129 130
C C D D A C D C C B
131 132 133 134 135 136 137 138 139 140
D C B C C D A A D B
141 142 143 144 145
A C A A B

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