Economics

National Income and Poverty Measurement

1,142 Questions

National income and poverty measurement involves calculating economic indicators like GDP, the Gini coefficient, and the Human Development Index. These metrics help gauge economic health, inequality, and poverty levels within a country. Practice these economics questions to understand the statistical methods used in macroeconomic analysis.

GDP calculationEconomic inequality indicesPoverty line conceptsNational income methods

National Income and Poverty Measurement Questions

Multiple choice civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

National income differs from net national product at market price by the amount of ____________.

  1. current transfers from the rest of the world

  2. net indirect taxes

  3. national debt interest

  4. it does not differ
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Net National Product (NNP) at market price includes indirect taxes. National Income (NI) is equivalent to NNP at factor cost. To get from NNP at market price to NNP at factor cost, one must subtract net indirect taxes.

Multiple choice economics consumption and investment functions determinants of consumption function and savings function production, consumption, saving and economic units ex ante and ex post

Break-even point is achieved when: 

  1. National Income = Consumption

  2. Consumption = Saving

  3. Consumption = Investment

  4. National Income > Consumption
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Break even point refers to the point where the income=consumption or savings= 0. It is the point where the consumption curve intersects the 45 degree line. 

Multiple choice economics consumption and investment functions determinants of consumption function and savings function production, consumption, saving and economic units ex ante and ex post

Which of the following expression is correct? 

  1. $APC = \frac { Consumption }{National Income}$
  2. $APC = \frac { Change \, in \,Consumption }{ Change \, in \,National\, Income}$
  3. $APC = APS -1$
  4. $APC = \frac {National Income} { Consumption }$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

APC refers to Average Propensity to Consume which defines the amount of consumption in every 1 rupee of income for all level of income. Therefore,

APC= Consumption/ National Income= C/Y. 

Multiple choice economics consumption and investment functions determinants of consumption function and savings function production, consumption, saving and economic units ex ante and ex post

AD curve is represented by ________ curve in the income determination analysis.

  1. Consumption + Saving + Investment

  2. Consumption + Saving

  3. Saving + Investment

  4. Consumption + Investment
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Aggregate Demand refers to the desired level of expenditure in the economy during an accounting year. It is what people wish to spend on the purchase of goods and services during an accounting year.

The Ad curve in income determination analysis represents a two sector economy which only includes the expenditure made by the consumer sector and the producer sector.
Therefore, aggregate demand = consumption + investment. 

Multiple choice economics consumption and investment functions determinants of consumption function and savings function production, consumption, saving and economic units ex ante and ex post

___________ is the ratio of saving to income.

  1. Marginal propensity to save

  2. Average propensity to save

  3. Total propensity to save

  4. Income propensity to save
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

APS refers to Average Propensity to save which defines the amount of savings in every 1 rupee of income for all level of income. It is expressed as the ration of saving to income in an economy. 

Average propensity to save = S/Y where S is the savings and Y is the income in the economy. 

Multiple choice economics consumption and investment functions determinants of consumption function and savings function production, consumption, saving and economic units ex ante and ex post

If income in terms of wage rate ___________, consumption expenditure __________.

  1. increases, decreases

  2. increases, increases

  3. decreases, increases

  4. decreases, decreases
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If income in terms of wage rate increases, then consumption expenditure also increases which is called the wage-price spiral where the wages are increased due to excessive price in the economy and price in increased due to excessive wage and consumption demand in the economy. 

Multiple choice business mathematics and statistics index numbers weighted methods to calculate index numbers construction of index numbers applied statistics

Calculate cost of living index from the following table of prices and weights.

Commodity Weight Price index
Food 35 108.5
Rent 9 102.6
Clothes 10 97
Fuel 7 100.9
MIscellaneous 39 103.7

  1. 104.4

  2. 106.5

  3. 126.5

  4. 128.5
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
 $Commodity$ $Weight$$w$  $Price\,index$$I$  $I.w$ 
 $Food$ $35$  $108.5$  $3797.5$ 
$Rent$  $9$  $102.6$  $923.4$ 
$Clothes$  $10$  $97$  $970$ 
$Fuel$  $7$  $100.9$  $706.3$ 
$Miscellaneous$  $39$  $103.7$  $4044.3$ 
$Total$  $\sum w=100$    $\sum I.w=10441.5$ 

$\Rightarrow$   Cost of living index = $\dfrac{\sum I.w}{\sum w}=\dfrac{10441.5}{100}=104.4$

Multiple choice economics circular flow of income and methods of calculating national income some macroeconomic identities national income accounting national income aggregates

Which of these is/are not included in net domestic product at factor cost?

  1. Wages or compensation of employees

  2. Rent, interest, profit or operating surplus

  3. Mixed income

  4. None of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Net Domestic Product at factor cost (NDPfc) includes wages, rent, interest, profit, and mixed income. Therefore, none of these items are excluded.

Multiple choice economics circular flow of income and methods of calculating national income some macroeconomic identities national income accounting national income aggregates

For most economies which of these statement is true?

  1. National income accounts and national output accounts are equal to each other.

  2. Estimation of national income is just impossible

  3. National output is less than national Income

  4. National income is less than national output
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In macroeconomic accounting, the total value of national income (sum of factor incomes) is equal to the total value of national output (sum of final goods and services produced) due to the circular flow of income.

Multiple choice historical tools and life of people in britain life in britain in the twentieth century history

What do you mean by Disposable wealth?

  1. money that is spent on non-essential items.

  2. money that is spent on essential items.

  3. money that is spent on defence items.

  4. money that is spent on daily items.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  • Disposable wealth means money that is spend on non-essential items.
  • People in Britain had a lot more disposable wealth, they spent it on consumer goods and holidays, as well as on buying houses and cars.
Multiple choice geography ideas of development study of population in tamil nadu population and migration human geography in tamil nadu

The human development index(HDI) is used to measure human development of a particular country. In order to calculate it takes in to account _________________.

  1. Life expectancy

  2. Education index

  3. Income index

  4. All of the above.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

the human development index takes into account three dimensions to calculate human development of a country. The dimensions are-1 Life expectancy
                                                                           2 Education index
                                                                           3 Income index.

Multiple choice history educational development in india educational development of independent india quality of population human capital formation in india

The percentage of education expenditure of GDP expresses _____.

  1. the importance of education in the scheme of things before the government

  2. how much of our income is being committed to the development of education in the country

  3. both A and B

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Education expenditure is expressed as a percentage of total government expenditure/total government expenditure. It is expressed as how much of the total income is being committed to the development of education in the country. 

GDP is a monetary measure of the market value of goods and services produced over the year in the country or the total expenditure on goods and services over the year or government expenditure. 
Hence, B is the correct option.