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 nutrition and health status introduction to tamil nadu economy tamil nadu economy food security and nutrition economics

The _____________________ refers to the total money value of all the goods and services produced annually in the State.

  1. Net National Product

  2. Gross Domestic Product

  3. Gross State Domestic Product

  4. Net Domestic Product
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Gross State Domestic Product (GSDP) is the specific economic measure used to represent the total monetary value of all goods and services produced within a state's boundaries annually.

Multiple choice civics public expenditure and public revenue black money and tax evasion meaning of tax direct taxes

GDP at factor cost is equal to GDP at market price minus indirect taxes plus __________.

  1. depreciation

  2. direct taxes

  3. foreign investments

  4. subsidies
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

$GDP _{fc} = GDP _{mp} - Indirect\ taxes + Subsidies$.
This is because market prices is reached by adding indirect taxes to the cost of production, i.e., factors of production, and deduction of subsidies provided, if any.

Multiple choice civics public expenditure and public revenue black money and tax evasion meaning of tax direct taxes

Net national product at market price minus net indirect taxes is equal to _______.

  1. net foreign investment

  2. net foreign investment plus net domestic investment

  3. net national product at factor cost

  4. replacement expenditure
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

$NNP _{mp} - Net Indirect Taxes = NNP _{fc}$.
This is because the market price is the cost of production, i.e, factor cost, plus the taxes payable on the product.

Multiple choice civics public expenditure and public revenue black money and tax evasion meaning of tax direct taxes

In NNP figure is available at market prices we will__indirect taxes and
_subsidies to the figure to get National Income of the economy:

  1. Add, substract

  2. Add, divide

  3. Substract, add

  4. Substract, divide
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
National Income at Factor Cost (NIFC):
• It is the sum of all factors of income earned by the residents of a country (Indian) both from within the country as well as abroad.
• National Income at Factor Cost = NNP at Market Price – Indirect Taxes + Subsidies
 In India, and many developing countries across the world, National Income is measured at factor cost instead of market prices. Some of the reasons for the same are lack of uniformity in taxes, goods not being printed with their prices, etc.
Multiple choice social science poverty: an economic challenge for india meaning and measurement of poverty poverty : challenge facing india poverty as a challenge

Relative poverty means parity of income.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Relative poverty means disparity of income. It implies international economic inequalities and regional economic disparities. The National Sample Survey Organisation measures the population living below poverty line in India from time to time (generally every five years).

Multiple choice social science poverty: an economic challenge for india meaning and measurement of poverty poverty : challenge facing india poverty as a challenge

How can relative poverty be measured?

  1. Through maximum income.

  2. Through minimum income.

  3. Through definite income.

  4. Through average income
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Relative poverty can be measured through average income. It is the condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live. The concept of relative poverty is used to measure the degree of poverty.

Multiple choice social science poverty: an economic challenge for india meaning and measurement of poverty poverty : challenge facing india poverty as a challenge

When Poverty is not related to the distribution of Income or Consumption Expenditure, it is called____.

  1. absolute poverty

  2. relative poverty

  3. either (a) or (b)

  4. neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Absolute poverty is defined by a fixed threshold of basic needs, independent of the relative distribution of income or consumption within the broader population.

Multiple choice economics consumption and investment functions keynesian law of consumption and propensity to consume ex ante and ex post concept of consumption function, saving function and investment function

What exactly does MPC (Marginal Propensity to Consume) communicate?

  1. MPC measures the change in the amount of consumption due to a change in income between two time periods.

  2. MPC measures the proportion of income devoted for consumption purposes in the specific period of time for which data is given.

  3. MPC measures the change in the amount of consumption due to a change in savings between two time periods.

  4. MPC measures the proportion of income devoted for saving purposes in the specific period of time for which data is given.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Consumption is dependent on income and thus, consumption changes with change in income. Marginal Propensity to Consume (MPC) refers to the change in consumption level that takes place due to an additional unit of income earned. 
Symbolically: $MPC=\dfrac{\text{Change in consumption}}{\text{Change in income}}$

Multiple choice rural development poverty rural economics economics

Which of the following statements relating to poverty in India are correct?
$1$. The concept of poverty line is helpful in assessing the extent of absolute poverty in the country.
$2$. Poverty line helps us to assess relative as well as absolute poverty.
$3$. Poverty line should change with changes in the price level.
$4$. Relative poverty can exist even in the absence of absolute poverty.
Select the correct answer using the codes given.

  1. $1, 3$ and $4$
  2. $1$ and $4$
  3. $2$ and $3$
  4. $2, 3$ and $4$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In India, the concept of poverty line is helpful in assessing the extent of absolute poverty in the country. Poverty line should also change with variation in price level but there is no relation between absolute and relative poverty. Relative poverty, when we speak in terms of relatively poor or rich, we make pairwise comparison. Person A may be poorer than or richer than or equal to person B by the scale of criterion(say income) which we take into account for comparison, call it relative poverty or inequality.

Multiple choice rural development poverty rural economics economics

Poverty lines are expressed in terms of overall _______________.

  1. Per capita income

  2. Per capita consumption expenditure

  3. Per capita entertainment expenditure

  4. Per capita development expenditure
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Poverty lines in standard economic definitions are evaluated and expressed in terms of per capita consumption expenditure to account for purchasing power and actual basket of goods consumed.

Multiple choice rural development poverty rural economics economics

Government uses __________ as proxy for income of households to identify the poor.

  1. per capita expenditure

  2. monthly per capita expenditure

  3. annual expenditure

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The government uses Monthly Per Capita Expenditure (MPCE) as proxy for income of households to identify the poor.
This mechanism is helpful in identifying the poor as a group to be taken care of by the government, but it would be difficult to identify who among the poor need help the most.
Multiple choice rural development poverty rural economics economics

On what basis are the poor identified?

  1. Occupation

  2. Ownership of assets

  3. Both A and B

  4. None
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Scholars identify the poor on the basis of their occupation and ownership of assets. They are identified in 2 groups- rural poor and urban poor.
Multiple choice rural development poverty rural economics economics

_______ is the mean distance below the poverty line expressed as a proportion of poverty line.

  1. Poverty Gap Index (PGI)

  2. HDI

  3. HDI-1

  4. GDI
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Poverty Gap Index (PGI) measures the average shortfall of the total population from the poverty line, expressed as a proportion of the poverty line.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

What is GDP?

  1. Gross Daily Production

  2. Gross Domestic Production

  3. Gross Domestic Power

  4. Gross Development Production
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Gross Domestic Production. Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time. GDP per capita is often considered an indicator of a country's standard of living.

Multiple choice social science poverty : challenge facing india programmes for poverty eradication poverty as a challenge poverty: an economic challenge for india public health and the government constraints in economic development of rajasthan

In order to measure the inequalities of income and wealth which index is used?

  1. Gini coefficient

  2. Dollar

  3. NASDAQ

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

The Gini coefficient is a statistical measure of distribution intended to represent the income inequality or wealth inequality within a nation.