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National Income Accounting mcq with Answers for Students
In which section of the budget report are GDP growth, external balance, and fiscal balance evaluated?
a) Macroeconomic Framework Statement
b) Fiscal Policy Strategy Statement
c) Appropriation Bill
d) Medium-term Fiscal Policy Statement
Option a – Macroeconomic Framework Statement
Which indicator measures the total production of goods and services in a country, including depreciation, over a specific period?
a) NET Domestic Product (NDP)
b) Gross National Product (GNP)
c) NET National Product (NNP)
d) Gross Domestic Product (GDP)
Option d – Gross Domestic Product (GDP)
How is personal Income defined?
a) Earnings of individuals and households after taxes and deductions
b) Total earnings of companies and corporations in an Economy
c) Income earned by individuals through their own business or self-employment
d) Total earnings of individuals and households before taxes and deductions
Option d – Total earnings of individuals and households before taxes and deductions
Which approach calculates National Income by adding all expenditures on final goods and services?
a) Output method
b) Value-added method
c) Expenditure method
d) Income method
Option c – Expenditure method
Which of the following best describes disposable Income?
a) Income of individuals and households after taxes and deductions
b) Total earnings of businesses and corporations
c) Earnings from individual business or self-employment
d) Total Income before taxes and deductions
Option a – Income of individuals and households after taxes and deductions
Why are intermediate goods excluded from National Income computations?
a) Including them would count the same value twice
b) They are not produced within the country
c) Their inclusion would reduce the reported National Income
d) They are insignificant for economic measurement
Option a – Including them would count the same value twice
What is correct regarding disposable income compared to personal income?
a) Disposable income equals personal income
b) Disposable income is always lower than personal income
c) Disposable income is always higher than personal income
d) Disposable income can be higher or lower depending on taxes and deductions
Option b – Disposable income is always lower than personal income
What is the fiscal year in India?
a) 1st April to 31st March of the following year
b) 1st April to 31st December of the same year
c) 1st January to 31st December of the same year
d) 1st January to 31st December of the following year
Option a – 1st April to 31st March of the following year
Which statements about transfer payments are accurate? 1. They are made by the government to households 2. Pensions and scholarships are not included 3. They are used to redistribute income
a) 1 and 2 only
b) 1, 2 and 3
c) 1 and 3 only
d) 2 and 3 only
Option c – 1 and 3 only
Which of the following statements about GDP and welfare is correct? 1. GDP reflects the general welfare of the Population 2. A rise in GDP does not guarantee proportional welfare improvement 3. GDP and welfare are unrelated
a) Only 1 and 3
b) 1, 2 and 3
c) Only 2 and 3
d) Only 1 and 2
Option d – Only 1 and 2
Which measure represents total income earned by individuals from all sources before personal income taxes?
a) Disposable income
b) Personal income
d) Gross income
Option d – Gross income
What is the correct formula to compute NET Indirect Taxes?
a) Direct Taxes + Subsidies
b) Indirect Taxes – Subsidies
c) Indirect Taxes + Subsidies
d) Direct Taxes – Subsidies
Option b – Indirect Taxes – Subsidies
Which of the following is a reliable indicator of economic growth?
a) Continuous rise in loans
b) Continuous rise in Population
c) Continuous rise in GDP
d) Continuous rise in international trade
Option c – Continuous rise in GDP
Which item is NOT part of inventory investment when calculating National Income?
a) Change in sales during the year
b) Change in semi-finished goods stock
c) Change in raw material stock
d) Change in finished goods stock
Option a – Change in sales during the year
Calculate GDP at factor cost given: GDP at market price = 600 crores, Consumption of fixed capital = 100 crores, Indirect taxes = 200 crores, Subsidies = 50 crores.
a) 850 crores
b) 450 crores
c) 950 crores
d) 350 crores
Option b – 450 crores
In National Income accounting, what does GVA refer to?
a) General vesting added
b) General visited account
c) Gross value accounting
d) Gross value added
Option a – General vesting added
GDP measured using a fixed SET of prices is called
a) Domestic GDP
b) Real GDP
c) Current GDP
d) Nominal GDP
Option b – Real GDP
Which statement about National Income calculation is correct?
a) Intermediate goods are excluded from national income calculation
b) Final goods are counted in national income
c) Neither I nor II
d) Both I and II
Option d – Both I and II
According to the product method, if an Economy has N firms numbered from 1 to N, GDP can be expressed as
a) GVA(1) – GVA(2) … – GVA(N)
b) NVA(1) + NVA(2) … + NVA(N)
c) GVA(1) + GVA(2) … + GVA(N)
d) GVA(1) + GVA(2) + GVA(3) + GVA(4) …
Option c – GVA(1) + GVA(2) … + GVA(N)
Which of these is NOT a method for estimating national income?
a) banking method
b) Expenditure method
c) Product method
d) Income method
Option a – banking method
The value of GDP at current market prices is known as
a) Nominal GDP
b) Current GDP
c) Domestic GDP
d) Real GDP
Option a – Nominal GDP
Macroeconomics primarily studies which principle?
a) Principle of National Income
b) Principle of Consumer Behaviour
c) Principle of Production
d) Principle of Investment
Option a – Principle of National Income
Which Indian agency reports GDP both at factor cost and market prices?
a) Reserve Bank of India
b) National Sample Survey Organisation
c) National Statistics Office
d) NITI Aayog
Option c – National Statistics Office
Who chaired the National Income Committee?
a) PC Mahalanobis
b) VKRV Rao
c) DR Gadgil
d) BR Ambedkar
Option a – PC Mahalanobis
In 1950-51, what was the industrial sector’s contribution to India’s GDP?
a) 22%
b) 28%
c) 13%
d) 16%
Option c – 13%
GDP that includes environmental costs and resource depletion is called
a) White GDP
b) Green GDP
c) Brown GDP
d) Blue GDP
Option b – Green GDP
NET Domestic Product (NDP) at factor cost is calculated by subtracting what from GDP at factor cost?
a) Depreciation
b) Indirect taxes
c) NET factor income from abroad
d) Subsidies
Option a – Depreciation
Which aspect of factor payment flows is used to estimate national income?
a) Consumption perspective
b) Expenditure perspective
c) Income distribution perspective
d) Production perspective
Option c – Income distribution perspective
Domestic income will be what if national income is Rs. 10,000 crore and NET factor income from abroad is Rs. 2,000 crore?
a) Rs. 5,000 crore
b) Rs. 12,000 crore
c) Rs. 10,000 crore
d) Rs. 8,000 crore
Option d – Rs. 8,000 crore
Which of the following statements about GDP estimation is correct? I. Only marketed goods are included II. Unpaid domestic work by women is excluded III. Only final goods and services are counted
a) I, II and III
b) Only II and III
c) Only I and II
d) Only II
Option a – I, II and III
In what currency does PIB publish India’s GDP?
a) Yen
b) US Dollar
c) Indian Rupee
d) Yuan
Option c – Indian Rupee
When did India’s public debt-to-GDP ratio reach 84.2%?
a) 1999
b) 1991
c) 2001
d) 2003
Option d – 2003
According to the Output Method, GDP is calculated as
a) GDP at constant prices minus taxes plus subsidies
b) GDP at constant prices plus subsidies
c) GDP at constant prices minus taxes
d) GDP at constant prices plus taxes minus subsidies
Option a – GDP at constant prices minus taxes plus subsidies
The GDP deflator is also referred to as ( National Income Accounting mcq with Answers )
a) Explicit inflation index
b) Implicit inflation index
c) Explicit price deflator
d) Implicit price deflator
Option d – Implicit price deflator
As per the National Statistical Commission, the Base year for India’s GDP series was updated from 2004-05 to ( National Income Accounting mcq with Answers )
a) 2013-14
b) 2011-12
c) 2009-10
d) 2005-06
Option b – 2011-12
Which sector contributes the most to India’s GDP? ( National Income Accounting mcq with Answers )
a) Industrial
b) Agriculture
c) Service
d) Manufacturing
Option c – Service
To calculate NDP, what is subtracted from GDP? ( National Income Accounting mcq with Answers )
a) NET factor income from abroad
b) Subsidies
c) Depreciation
d) NET indirect taxes
Option c – Depreciation
NET Domestic Product (NDP) equals ( National Income Accounting mcq with Answers )
a) GDP + NET factor income from abroad
b) GDP + Depreciation
c) GDP – Net factor income from abroad
d) GDP – Depreciation
Option d – GDP – Depreciation
In the following pairs of terms, which one does NOT have the same meaning? ( National Income Accounting mcq with Answers )
a) The Base period and the reference period
b) Nominal GDP and GDP at current prices
c) Changes in real GDP and the GDP deflator
d) Real GDP and GDP at constant prices
Option c – Changes in real GDP and the GDP deflator
National income at constant prices refers to ( National Income Accounting mcq with Answers )
a) Income calculated using prices from the Base year
b) Income computed using any year’s prices
c) Income projected for the following year
d) Income measured at current year prices
Option a – Income calculated using prices from the Base year
Which of the following equations is correct? ( National Income Accounting MCQ with Answers )
a) GDP at market prices = price × quantity of final goods and services
b) Domestic income = NDP at market prices + net indirect taxes
c) National income = NDP at factor cost + net factor income from abroad
d) NDP at market prices = GDP at market prices + depreciation
Option c – National income = NDP at factor cost + net factor income from abroad
Which cost is used to compute national income in India? ( National Income Accounting MCQ with Answers )
a) Market cost
b) Product cost
c) Factor cost
d) Sunk cost
Option c – Factor cost
What is the primary purpose of Net National Product (NNP)? ( National Income Accounting MCQ with Answers )
a) To determine per capita income
b) To analyze the balance of payments
c) To estimate imports
d) To estimate exports
Option a – To determine per capita income
In national income accounting, Gross Domestic Product (GDP) represents: ( National Income Accounting MCQ with Answers )
a) Total exports of a nation
b) Total savings of the Economy
c) Total value of all goods and services produced within a country in a given period
d) Total government income
Option c – Total value of all goods and services produced within a country in a given period
Why are only final goods included in GDP calculations? a) Because final goods are immobile, marking the end of economic flow b) To prevent double counting, since value added at each stage is included
a) Only I
b) Only II
c) Only I and II
d) All I and II
Option c – Only I and II
Which of the following measures is commonly recognized as the National Income of a country? ( National Income Accounting MCQ with Answers )
a) Net National Product at Market Prices
b) Net National Product at Factor Cost
c) Gross National Product at Market Prices
d) Gross Domestic Product at Factor Cost
Option b – Net National Product at Factor Cost
Which of the following is counted in Gross National Product (GNP)? ( National Income Accounting MCQ with Answers )
a) Sale of newly manufactured clothing
b) Pension payments
c) Sale of second-hand vehicles
d) Sale of financial securities
Option a – Sale of newly manufactured clothing
Which items are considered final goods in India’s GDP estimation? a) Wheat bought for home consumption to make roti b) Wheat purchased to make roti in a hotel c) Tea bags used to prepare tea at home d) Tea bags used in a University hostel canteen
a) Only a and b
b) Only b and c
c) Only a and c
d) Only b and d
Option c – Only a and c
Which of the following does NOT contribute to national income? ( National Income Accounting MCQ with Answers )
a) Money received as a donation
b) Income earned by a household for entrepreneurial activity
c) Earnings from using capital
d) Earnings from renting out land
Option a – Money received as a donation
If an Indian invests abroad and earns a profit, which statement is correct? ( National Income Accounting MCQ with Answers )
a) The income is included in India’s GDP but not in national income
b) The income is part of India’s national income but not GDP
c) The income is part of both India’s GDP and national income
d) The income is excluded from both GDP and national income
Option b – The income is part of India’s national income but not GDP
Which statement is incorrect regarding India’s National Income Accounting? ( National Income Accounting MCQ with Answers )
a) Imports are deducted while calculating GDP
b) Net factor income from abroad is included in GDP
c) Second-hand goods are excluded from GDP
d) Inventories are included in Gross Domestic Capital Formation
Option b – Net factor income from abroad is included in GDP
Which of the following statements is NOT accurate? ( National Income Accounting MCQ with Answers )
a) Real GDP is calculated using constant prices across years
b) Potential GDP represents the output if all resources are fully utilized
c) Nominal GDP is calculated using constant prices
d) Real GDP per capita = real GDP ÷ Population
Option c – Nominal GDP is calculated using constant prices
The gap that occurs when actual real GDP is lower than potential GDP is called: ( National Income Accounting MCQ with Answers )
a) Inflationary gap
b) Recessionary gap
c) Supply-side inflation
d) Demand-side inflation
Option b – Recessionary gap
In non-agricultural activities, which input is used the least? ( National Income Accounting MCQ with Answers )
a) Labour
b) Land
c) Raw materials
d) Capital
Option b – Land
Which of the following statements about GDP deflator is correct? 1. It reflects the average price of a fixed basket of goods that make up GDP 2. It can be used to measure real GDP but not inflation
a) 2 only
b) 1 only
c) Neither 1 nor 2
d) Both 1 and 2
Option c – Neither 1 nor 2
The level of per capita GDP depends on: 1. Share of Population in working age 2. Workforce participation rate 3. Productivity per worker
a) 1 and 3 only
b) 3 only
c) 1, 2, and 3
d) 1 and 2 only
Option c – 1, 2, and 3
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