“· National Income: Concepts and Measurement.” - One Line Questions

1. The GDP deflator is a measure of the price level for all domestically produced final goods and services. It is calculated as: — (Nominal GDP / Real GDP) * 100
2. The value of 'exports minus imports' is known as: — Net Exports
3. Which of the following is NOT a component of GDP in the expenditure approach? — Transfer Payments
4. What is 'Gross Domestic Capital Formation' in the expenditure method? — Changes in inventories and fixed capital formation
5. Personal Disposable Income (PDI) is calculated by subtracting which from Personal Income? — Direct Taxes paid by households
6. The concept of 'nominal GDP' is measured at: — Current market prices
7. Real GDP is a measure of the value of all final goods and services produced in a country using: — Constant prices of a base year
8. Which of the following is a component of Net Indirect Taxes (NIT)? — Indirect Taxes
9. Which of the following is a primary concern when calculating National Income to avoid double counting? — Distinguishing between final and intermediate goods
10. Which of the following is an example of a final good? — A car purchased by a household for personal use
11. Which of the following is a direct measure of the welfare of citizens? — Personal Disposable Income
12. Net Domestic Product (NDP) is calculated as: — GDP - Depreciation
13. If the government increases subsidies to producers, holding other factors constant, what is the likely impact on GDP at factor cost and GDP at market prices? — GDP at factor cost is unaffected, GDP at market prices increases
14. If Net Indirect Taxes are negative (i.e., subsidies exceed indirect taxes), then: — GDP at market prices will be lower than GDP at factor cost
15. Which of the following is a key difference between GDP and GNP? — GDP measures production within geographical boundaries, while GNP measures production by nationals.
16. The sum of consumption expenditure and investment expenditure by households is known as: — Private Final Consumption Expenditure
17. The relationship GNI = GDP + Net factor income from abroad implies that GNI is also known as: — Gross National Product
18. Which of the following is the broadest measure of a nation's economic activity? — Gross Domestic Product (GDP)
19. Which of the following represents the total value of goods and services produced by a country's citizens and businesses, regardless of location? — Gross National Product (GNP)
20. Which concept measures the total value of goods and services produced within a country's borders in a given period, after deducting depreciation? — Net Domestic Product (NDP)
21. When calculating National Income using the Expenditure Method, what does 'G' represent? — Government Final Consumption Expenditure
22. What does 'Net Factor Income from Abroad' represent? — Income earned by domestic residents from foreign investments minus income earned by foreign residents from domestic investments.
23. Which method is most appropriate for measuring the output of the agricultural sector? — Product Method (Value Added Method)
24. Which component accounts for the difference between Gross National Product (GNP) and Net National Product (NNP)? — Depreciation
25. GDP at market prices includes which of the following? — Indirect taxes but not subsidies
26. If a country has significant net factor income from abroad (positive), its GNP will be: — Higher than its GDP
27. Which of the following is a measure of the total income available to households for consumption and saving? — Personal Disposable Income
28. Which of the following represents the total income earned by factors of production within a country, including depreciation and net indirect taxes? — Gross Domestic Product at Market Prices
29. What is the difference between GDP and GNP? — Net factor income from abroad
30. Which of the following is a component of Gross National Expenditure (GNE)? — Private final consumption expenditure
31. What is the relationship between NNP at market prices and NNP at factor cost? — NNP at market prices = NNP at factor cost + Net Indirect Taxes
32. National Income (NI) is equivalent to: — NNP at factor cost
33. Which of the following is a measure of the total output produced within a country's borders, adjusted for the purchasing power of money? — Real GDP
34. Which method of calculating National Income involves summing up all expenditures on final goods and services? — Expenditure Method
35. The sum of wages, salaries, profits, interest, and rent in an economy is measured by which method of National Income accounting? — Income Method
36. If GDP at factor cost is Rs. 5000 crores and Net Indirect Taxes are Rs. 500 crores, what is GDP at market prices? — Rs. 5500 crores
37. If GNP at factor cost is Rs. 6000 crores and Net Factor Income from Abroad is Rs. 200 crores, what is GDP at factor cost? — Rs. 5800 crores
38. If NNP at factor cost is Rs. 8000 crores and Net Indirect Taxes are Rs. 1000 crores, what is NNP at market prices? — Rs. 9000 crores
39. If GDP at market prices is Rs. 10,000 crores and depreciation is Rs. 1,000 crores, what is NDP at market prices? — Rs. 9,000 crores
40. Which of the following is a transfer payment and thus not included in National Income? — Unemployment benefits
41. The Circular Flow of Income model illustrates: — The movement of payments and goods/services between sectors of the economy
42. Depreciation refers to: — The decrease in the value of capital stock due to wear and tear or obsolescence
43. The term 'factor cost' in National Income accounting refers to: — The sum of payments made to factors of production (land, labor, capital, entrepreneurship)
44. The 'Value Added Method' of calculating National Income focuses on: — The contribution of each producing unit to the economy
45. What does the 'Income Method' of National Income calculation aim to measure? — The total income generated from the production of goods and services
46. The concept of 'intermediate goods' is excluded from the calculation of National Income because: — Their value is already included in the value of final goods
47. In a simple two-sector economy (households and firms), National Income is equal to: — Total consumption + Total saving
48. Which of the following is NOT a factor income? — Old age pension
49. Personal Income (PI) differs from National Income (NI) by excluding: — Retained earnings of corporations and government transfer payments
50. The Income Method of calculating National Income sums up: — Wages, Rent, Interest, Profits, and Net Factor Income from Abroad
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