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 geography economic growth and development development and growth need for sustainable development economics of development

Real per capita income is a partial index of economic development and economic welfare.

  1. True

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

Real per capita income provides some information about economic capacity, but it is only a partial index because it ignores distribution, social welfare, and other non-monetary aspects of development.

Multiple choice geography economic growth and development development and growth need for sustainable development economics of development

Per Capita income is obtained by dividing National Income by _________________.

  1. Total population of the country

  2. Total working population

  3. Area of the country

  4. Volume of the capital used
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Per capita income is obtained by dividing national income by total population of the country per capita income by total population of the country. Per capita income, also known as income per person, is the mean income of the people in a country. 

It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross national income) and dividing it by the total population.

Multiple choice geography economic growth and development development and growth need for sustainable development economics of development

Identify the problems related with the use of per capita income index to compare the standard of living, economic growth and welfare between different countries.

  1. Problem of expression of national income of different countries in one currency.

  2. Different concepts of national income measurement are used in different countries.

  3. Difficulty in measuring standard of living of different countries due to differing price levels.

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

Comparing per capita income across countries is difficult due to currency conversion issues, different methodologies for calculating national income, and varying purchasing power (price levels).

Multiple choice some mathematical tools used in economics step towards making a project basic statistics for economics economics

Which of the following statement is not correct?

  1. The money spent on the sample in collecting information is more than that is spent on population

  2. In an under developed economy, census method cannot be adopted because of the heavy cost

  3. The accuracy of the census method is tested by the information obtained by the sample method

  4. The error that occur in the study of the sample may be determined and steps may be taken to reduce it
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As population is large in size as compared to samples. So, the money spent on gathering information through census is a costly affair than sampling.

Multiple choice social science food security in india need for nregs rural development and employment guarantee scheme food security and nutrition

To measure hunger, recently an index called ________ is being used as a yardstick.

  1. Poverty line

  2. World Hunger Index

  3. World hunger list

  4. Poverty list
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Global Hunger Index (GHI) is a multidimensional statistical tool used to describe the state of countries' hunger situation. The GHI measures progress and failures in the global fight against hunger. The GHI is updated once a year.

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

GDP at factor cost = ___________.

  1. GDP at market price + Subsidies

  2. GDP at market price + Subsidies - Indirect tax

  3. GDP at market price - Subsidies - Indirect tax

  4. GDP at market price + Subsidies + Indirect tax
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

GDP at factor cost is calculated by taking GDP at market price, subtracting indirect taxes, and adding subsidies, as market prices include the tax burden and exclude government subsidies.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Are the following statements true or false? Give reasons.
Production of services for self-consumption are not included in national income. 

  1. True

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

Such services are not included in national income as It is difficult to ascertain their market value and they are not rendered for earning income. 

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Net income from abroad should be added in the national income.

  1. True

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

National income (specifically GNP or GNI) includes net factor income from abroad, which is the difference between factor income earned by residents from abroad and factor income earned by non-residents domestically.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Income method is more reliable than expenditure method.

  1. True

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

The reliability of a method depends on the quality of data available. In many developed economies, the income method is considered more reliable due to better tax and payroll record-keeping.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

In which case, net income from abroad need to be added separately under the income method?

  1. If national income is calculated from incomes received by people

  2. If national income is calculated from data regarding incomes paid out by producers

  3. In both above methods, added separately

  4. In neither of the above methods, added separately
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When calculating national income via the income method, one must account for factor incomes paid out by producers to residents, which includes net factor income from abroad.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Transfer incomes are ___________ national income.

  1. included in

  2. excluded from

  3. sometimes included, sometimes excluded

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

Transfer incomes, such as pensions or scholarships, are not payments for current production of goods or services; therefore, they are excluded from national income.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Income method considers _________.

  1. only primary factors of production

  2. only secondary factors of production

  3. both (a) and (b)

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

The income method aggregates the factor incomes (wages, rent, interest, profit) generated by the primary factors of production (land, labor, capital, entrepreneurship).

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Expenditure on foreign financial assets is included in national income under the expenditure method on ________.

  1. gross basis

  2. net basis

  3. real time basis

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

In national income accounting, financial transactions are generally excluded, but when considering net flows, they are treated on a net basis to avoid double counting.