National income: concepts and measurement. - One Line Questions

1. If GDP at current prices is Rs. 1000 crore and GDP at constant prices is Rs. 800 crore, what is the GDP deflator? — 125
2. Which of the following is considered an intermediate good? — Flour purchased by a bakery to make bread
3. Which of the following would lead to an increase in GDP? — An increase in business inventories
4. Which of the following is a reason for the existence of discrepancies between different methods of national income calculation? — Differences in data collection and estimation techniques
5. Net National Product (NNP) is calculated by: — Subtracting depreciation from GDP
6. Nominal GDP is measured in: — Current market prices
7. The expenditure method of calculating national income sums up: — Consumption, investment, government spending, and net exports
8. The difference between Gross Investment and Net Investment is: — Depreciation
9. What is the primary challenge in using the product method to calculate national income? — Avoiding double counting of intermediate goods
10. Which of the following is a method used to estimate the size of the informal economy for national income accounting? — Using proxy indicators and statistical techniques
11. Which of the following is a direct method of calculating national income? — All of the above
12. Which of the following is a measure of national income that reflects the total income available to residents, after accounting for depreciation and net indirect taxes? — NNP at factor cost
13. What is the relationship between GDP and GNP if a country has significant income earned by its citizens abroad? — GDP will be greater than GNP
14. If Net Exports decrease by Rs. 50 crore, while other components of GDP remain unchanged, what will be the impact on GDP? — GDP will decrease by Rs. 50 crore
15. The term 'final goods' in national income accounting includes: — Goods purchased by consumers and for investment
16. Which of the following is a component of 'Gross Private Domestic Investment'? — Business spending on new factories and equipment
17. Which of the following is the most comprehensive measure of a nation's economic performance? — Gross Domestic Product (GDP)
18. Which component of GDP measures the total value of goods and services produced by a country's citizens and companies, regardless of location? — Gross National Product (GNP)
19. Which of the following is a measure of national income that excludes the impact of depreciation? — Net National Product (NNP)
20. Which of the following represents the income earned by factors of production within a country's borders? — Net Domestic Product (NDP)
21. When calculating national income using the income method, 'profits' typically refer to: — Gross profits before taxes and depreciation
22. The value of output method is also known as: — Value added method
23. Which of the following is a component of 'Net Indirect Taxes'? — Indirect taxes minus subsidies
24. GDP at market prices includes: — Indirect taxes only
25. Real GDP is adjusted for: — Inflation
26. Disposable income is the income available to households for: — Consumption and saving
27. Which of the following is a limitation of GNP as a measure of economic welfare? — It does not account for the distribution of income
28. Which of the following is a limitation of using GDP as a measure of economic welfare? — It does not account for income inequality
29. Personal Disposable Income (PDI) is calculated as: — National Income - Corporate Taxes - Undistributed Profits + Transfer Payments
30. The value of 'consumption of fixed capital' is synonymous with: — Depreciation
31. National Income (NI) is equivalent to: — NNP at factor cost
32. Which indicator is often used to compare the economic performance of countries with different price levels? — GDP at Purchasing Power Parity (PPP)
33. Which method of national income accounting sums the incomes of all factors of production? — Income method
34. What is the main difference between the product method and the income method of national income calculation? — Product method sums final goods, while income method sums factor incomes
35. If NNP at factor cost is Rs. 500 crore, indirect taxes are Rs. 50 crore, and subsidies are Rs. 20 crore, what is NNP at market prices? — Rs. 530 crore
36. If GNP at factor cost is Rs. 600 crore and NFIA is Rs. 30 crore, what is GDP at factor cost? — Rs. 570 crore
37. If GDP at factor cost is Rs. 700 crore and Net Indirect Taxes are Rs. 80 crore, what is GDP at market prices? — Rs. 780 crore
38. Which of the following is NOT included in the calculation of GDP? — Value of illegal drug sales
39. Which of the following activities is NOT a part of the production boundary for national income accounting? — Services of a housewife
40. The GDP deflator is a measure of: — The average price level of all goods and services produced in an economy
41. What does 'factor cost' refer to in national income accounting? — The cost of producing goods and services excluding indirect taxes and subsidies
42. What does 'Net Factor Income from Abroad' (NFIA) represent? — The difference between income earned by resident factors of production abroad and income earned by non-resident factors of production domestically
43. What does NDP at factor cost represent? — The total income earned by factors of production within a country, excluding depreciation
44. The concept of 'value added' in national income accounting refers to: — The difference between the value of a firm's output and the value of its intermediate inputs
45. The product method (or value added method) of calculating national income focuses on: — The market value of all final goods and services produced
46. Transfer payments, such as pensions and unemployment benefits, are excluded from national income calculations because: — They do not represent the production of any good or service
47. What is the primary purpose of differentiating between GDP at market prices and GDP at factor cost? — To understand the true cost of production by removing the impact of government taxes and subsidies
48. What is the main purpose of calculating national income? — To assess the economic growth and performance of a country
49. Which of the following is a component of 'Government Purchases' in GDP calculation? — Salaries of government employees
50. National Income is the sum of: — Wages, rent, interest, profit, and net factor income from abroad
All One Line Questions
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