Tag: methods of measuring national income

Quizzes (3) Questions (114)

Questions Related to methods of measuring 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

______________ method is also called Value Added Method of computing National Income.

  1. Product

  2. Income

  3. Expenditure

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

The Product Method is fundamentally based on calculating the value added at each stage of production, which is why it is widely referred to as the Value Added Method.

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

Which of the following is /are NOT included in the national income estimation by income method?
(i)  Mixed income
(ii) Royalty
(iii) Rent
(iv) Profit

  1. Only (i)

  2. Only (i) and (ii)

  3. Only (ii) and (iv)

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

Mixed income, royalty, rent, and profit are all standard components of factor income and are included in the Income Method of calculating 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

Under Expenditure Method, Consumption Expenditure + Net Domestic Investment + Net Foreign Investment equals _____________.

  1. Gross Domestic Expenditure

  2. Gross National Expenditure

  3. Net Domestic Expenditure

  4. Net National Expenditure
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In the expenditure approach, the sum of consumption expenditure, net domestic investment, and net foreign investment (net exports) equals the total net expenditure on the nation's output, which is Net National Expenditure.

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

Under Expenditure Method, Consumption Expenditure + Net Domestic Investment equals _____________.

  1. Gross Domestic Expenditure

  2. Gross National Expenditure

  3. Net Domestic Expenditure

  4. Net National Expenditure
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Consumption expenditure plus net domestic investment represents the total net expenditure made within the domestic territory, which is defined as Net Domestic Expenditure.

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 does not include _____________.

  1. rent

  2. mixed incomes

  3. pensions

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

Pensions are considered transfer payments rather than factor income, as they are not earned through current productive services. Therefore, they are excluded from the Income Method.

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

Net Value Added is equal to _____________________.

  1. Payments accruing to Factors of Production

  2. Compensation to Employees

  3. Wages plus Rent plus Imputed Rent

  4. Value of Output minus Depreciation
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Net Value Added at factor cost is equivalent to the sum of factor incomes (wages, rent, interest, and profit) generated by the production process, which are the payments accruing to the factors of production.

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

The three methods of calculating national income measure __________.

  1. the same thing from different angle

  2. different thing from different angle

  3. different thing at the same angle

  4. the same thing from the same angle
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The three methods (Product, Income, and Expenditure) are different ways of measuring the same circular flow of income in an economy. They look at the economy from the perspective of production, income distribution, and final expenditure, respectively.

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 sector, expenditure method is used in India for calculating national income?

  1. Agriculture sector

  2. Mining sector

  3. Construction sector

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

In India, the expenditure method is specifically utilized for the construction sector because it is often more practical to estimate the total expenditure on construction projects than to aggregate the income of the many small, informal entities involved.

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

Under expenditure Method, Consumption Expenditure + Net Domestic Investment + Replacement Expenditure equals ______________.

  1. Gross Domestic Expenditure

  2. Gross National Expenditure

  3. Net Domestic Expenditure

  4. Net National Expenditure
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Gross Domestic Expenditure is the sum of consumption expenditure, net domestic investment, and replacement expenditure (depreciation).