Tag: circular flow of income and methods of calculating national income

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Questions Related to circular flow of income and methods of calculating national income

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

If there is a simultaneous fall in consumers disposal income as well as number of suppliers of a product in the market, the _________.

  1. equilibrium quantity will decrease

  2. equilibrium price will decrease

  3. equilibrium price will go up

  4. equilibrium quantity will increase
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A fall in disposable income decreases demand (shifting the demand curve left), and a fall in the number of suppliers decreases supply (shifting the supply curve left). Both shifts lead to a decrease in equilibrium quantity.

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

From the following equation estimate disposal income (Y) when consumption (C) is Rs. 910.
C=Rs. 160+0.75Y$ _d$

  1. Rs. 1100

  2. Rs. 900

  3. 1000

  4. 800
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using the equation C = 160 + 0.75Yd, substitute C = 910: 910 = 160 + 0.75Yd. Then 750 = 0.75Yd, so Yd = 750 / 0.75 = 1000.

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

From the following equation estimate Income (Y) consumption is Rs.1000 is _______.
C=Rs. 200+0.80Y$ _d$

  1. Rs. 1000

  2. Rs. 1100

  3. Rs. 900

  4. Rs. 800
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Using C = 200 + 0.80Yd, substitute C = 1000: 1000 = 200 + 0.80Yd. Then 800 = 0.80Yd, so Yd = 800 / 0.80 = 1000.

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

From the following equation estimate disposal income (Y) when consumption C=is Rs. 760 is ________.
C=Rs. 160+0.75Y$ _d$

  1. Rs. 1000

  2. Rs. 900

  3. Rs. 800

  4. Rs. 750
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using C = 160 + 0.75Yd, substitute C = 760: 760 = 160 + 0.75Yd. Then 600 = 0.75Yd, so Yd = 600 / 0.75 = 800.

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

National product at market prices is higher than national product at factor cost by the amount of ____________.

  1. subsidy

  2. indirect taxes + subsidies

  3. indirect taxes

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

National product at market price includes indirect taxes and excludes subsidies compared to factor cost. Thus, Market Price = Factor Cost + Indirect Taxes - Subsidies.

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

The difference between values at Market Prices and Factor Cost is attributed to ___________.

  1. net factor income from abroad

  2. depreciation

  3. net indirect taxes

  4. all of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Net indirect taxes (Indirect Taxes - Subsidies) represent the wedge between the market price paid by consumers and the factor cost received by producers.