Economics

National Income and Poverty Measurement

1,163 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

Occupational structure refers to

  1. no. of workers living in a country

  2. size of working population in industrial sector

  3. distribution of working population among different occupations

  4. nature of different occupations in the economy
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Occupational structure describes how the working population is distributed across different sectors and occupations - such as agriculture, manufacturing, services, and specific trades within each sector. It shows the percentage or absolute number of workers engaged in various types of economic activities, helping analyze a country's level of development and structural transformation.

Multiple choice

Which of the following is not, by definition, equal to national income?

  1. National product

  2. National expenditure

  3. National output

  4. National wealth

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

National income is a flow concept measuring the value of goods and services produced during a year. It can be equivalently measured as national product (output approach), national expenditure (expenditure approach), or national income (income approach). National wealth, however, is a stock concept - the accumulated net assets at a point in time - not equal to annual national income.

Multiple choice

Net National Income at market prices is equal to

  1. Gross National Income at market prices minus depreciation

  2. Net Domestic product at factor price plus or minus earnings from abroad

  3. Gross Domestic product minus indirect taxes and subsidies

  4. Gross National Product

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Net National Income (NNI) at market prices equals Gross National Income (GNI) at market prices minus depreciation (consumption of fixed capital). Depreciation represents the wear and tear of capital assets during production. NNI is the true measure of national income available for consumption and addition to capital stock after maintaining existing capital.

Multiple choice

The difference between GNP and NNP equals

  1. consumer expenditure on durable goods

  2. indirect business taxes

  3. a statistical discrepancy

  4. depreciation

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

GNP (Gross National Product) measures total output produced by citizens regardless of location. NNP (Net National Product) subtracts depreciation (capital consumption) from GNP to reflect actual net output available for consumption. The formula is: NNP = GNP - Depreciation. Options A, B, and C are unrelated to this relationship.

Multiple choice

GNP at market price minus _____ is equal to GDP at market price.

  1. Depreciation

  2. Direct taxes

  3. Subsidies

  4. Net income from abroad
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The relationship is: GNP at market price - Net income from abroad = GDP at market price. GNP includes net factor income from abroad (income earned by residents abroad minus income earned by foreigners domestically). GDP measures domestic production only. Subtracting net income from abroad converts GNP to GDP. Depreciation relates to GNP/NNP, not GNP/GDP conversion.

Multiple choice

Net national income at market prices is equal to

  1. GNP (Gross National Product) at factor price + or - depreciation

  2. GNI (Gross National Income) at market price minus depreciation

  3. NDP (Net Domestic Product) at factor price + or - earning from abroad

  4. GDP (Gross Domestic Product) minus indirect taxes and subsidies

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Correct interpretation is GNP - Depreciation = Net national income at market prices

Multiple choice

Consider the following factors on which the computation of HDI (Human Development Index) is based. (a) Literacy (b) Life expectancy (c) Health and hygiene level (d) Per capita income

Which of the above is/are incorrect?

  1. Only (a)

  2. Only (b)

  3. Only (c)

  4. Only (c) and (d)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Human Development India (HDI) is based on a combination of factors viz. literacy, education level, life expectancy and per capita income. It measures the quality of life.

Multiple choice

Which of the following is/are not the major indicator(s) of economic development?

(a) Net National Product (NNP) (b) Purchasing Power Parity (PPP) (c) Human Literacy Index (d) Human Poverty Index (e) Per Capita Income

  1. Only (a), (b) and (c)

  2. Only (c)

  3. Only (c), (d) and (e)

  4. Only (c) and (e)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

There is no such index as Human Literacy Index. Rather, there is one Human Development Index. Others are the major indicators of economic development.

Multiple choice

Which of the following statements is/are incongruous with national income? (a) It measures net value of goods and services produced in a country during a year. (b) It includes net earned foreign income. (c) It measures the stock of commodities held by the nationals at a point of time.

  1. Only (a)

  2. Only (b)

  3. Only (c)

  4. Both (b) and (c)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A measure of stock of commodities held by the nationals at a point of time is national wealth and not national income.

Multiple choice

When we talk of Gross National Product (GNP), we talk of the following: (a) It measures money value of all the goods and services produced by the nationals of a country in a year. (b) It includes the money value of goods and services produced by nationals outside the country. (c) It also includes the income received by foreign nationals within the boundary of the country.

Which of the above is/are correct?

  1. Only (a)

  2. Only (b)

  3. Both (a) and (b)

  4. Both (b) and (c)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Statement (3) is incorrect. Income received by foreign nationals within the boundary of countries is excluded from GNP while arriving at GDP.