National Income Additional Practice Test

12th Standard Economics — National Income: Additional Online Practice Test

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Who was the Nobel laureate that first introduced the concept of national income?

A.Alfred Marshall B.Simon Kuznets C.Adam Smith D.John Maynard Keynes

According to Alfred Marshall, the true net annual income of a country is also referred to as which of the following?

A.Gross domestic product B.National dividend C.Personal disposable income D.Net domestic capital

In the expenditure method of calculating Gross Domestic Product (GDP), what does the term (X - M) represent?

A.Gross private domestic investment B.Government purchases of goods and services C.Net factor income from abroad D.Net exports of goods and services

Which of the following is subtracted from Gross Domestic Product (GDP) to calculate Net Domestic Product (NDP)?

A.Subsidies B.Depreciation C.Indirect taxes D.Net factor income from abroad

If current price national income is divided by the ratio of the current year price index to the base year price index (P1 / P0), what is the resulting measure?

A.Per capita nominal income B.Real income at constant price C.Disposable personal income D.Gross domestic product deflator

How is the GDP deflator calculated?

A.(Nominal GDP / Real GDP) * 100 B.(Real GDP / Nominal GDP) * 100 C.(GDP at Market Prices - Depreciation) * 100 D.(GDP at Factor Cost + Indirect Taxes) * 100

The product method of measuring national income is also commonly known as which of the following?

A.Factor earning method B.Outlay method C.Inventory method D.Social accounting method

In India, the gross value of agricultural output is estimated by multiplying the average yield per hectare by the area sown of how many agricultural commodities?

A.12 commodities B.50 commodities C.64 commodities D.100 commodities

In the income method formula, Y = w + r + i + \pi + (R - P), what does the symbol '\(\pi\)' represent?

A.Personal taxes B.Profits C.Price index D.Portfolio investment

Q10

Under the expenditure method, why are expenditures on the purchase of old shares and bonds in the secondary market excluded from national income?

A.They represent transfer payments by the government B.They do not represent a new flow of goods or services in the current year C.They are already included under corporate profit taxes D.They are classified as capital consumption allowances

Q11

Which of the following is true regarding the concept of factor cost?

A.It includes indirect taxes paid to the government B.It excludes subsidies received from the government C.It represents the cost of production incurred by a firm for using inputs D.It is calculated by adding depreciation to the market price

Q12

To derive Net National Product (NNP) at factor cost from NNP at market price, which adjustment must be made?

A.Add depreciation and subtract subsidies B.Subtract indirect taxes and add subsidies C.Add indirect taxes and subtract subsidies D.Subtract depreciation and add transfer payments

Q13

Due to untrained statistical staff and indifference to official inquiries, the national income estimates in India are estimated to have a margin of error of at least what percentage?

A.2 percent B.5 percent C.10 percent D.20 percent

Q14

Under the social accounting method, which sector specifically handles saving and investment activities?

A.Household sector B.Corporate sector C.Capital sector D.Government sector

Q15

Why does a rise in GDP or per capita income not always promote economic welfare?

A.A greater proportion of capital goods may be produced instead of consumer goods B.Production may generate higher environmental hazards and pollution C.Longer working hours, child labor, or war goods production may drive the rise D.All of the above

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About this National Income test

This free online practice test covers National Income from the 12th Standard Economics (Samacheer Kalvi) syllabus. Choose the number of questions and an optional time limit, then answer and submit — everything is checked in your browser, with the correct answers and a worked explanation shown at the end. For the full solutions to every question in this set, see the solved MCQs page.

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