Tag: methods of measuring national income

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Questions Related to methods of measuring national income

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

National income is the sum of factor incomes accruing to: 

  1. country

  2. Economic territory

  3. Residents

  4. Both residents and non-residents
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

National income is defined as the sum of factor incomes earned by the normal residents of a country, regardless of whether they are earned within or outside the domestic territory.

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

Sale of second hand machines is ____________ in Value Added Method.

  1. included

  2. excluded

  3. sometimes included and sometimes excluded

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

The sale of second-hand goods is excluded from the Value Added Method because the value of these goods was already counted in the year they were originally produced. Including them again would lead to double counting.

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

The growth in the Gross Value Added at basic prices for 2015-16 from manufacturing sector is estimated to be ________.

  1. 9.5%

  2. 10%

  3. 11.55

  4. 12%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Manufacturing sector is nothing but Secondary sector which deals with manufactured goods. It includes those sectors which produce finished or usable goods. It takes up raw material from primary sectors like agriculture and produce goods which are ready to use or export.

The growth in the Gross Value Added at basic prices for 2015-16 from manufacturing sector is estimated to be 9.5%

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

Which of the following is a true statement?

i. National income refers to the income of individuals of a country

ii.The income at their disposal after paying direct taxes is called disposable income

 

  1. a. i only

  2. b. ii only

  3. c. both

  4. d. none
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Both the given statements are true which says that

National income refers to the income of individuals of a country

The income at their disposal after paying direct taxes is called disposable income

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

_______ is the wealthiest Indian state which accounts for 12% of the Indian GDP.

  1. Tamil Nadu

  2. Kerala

  3. Maharashtra

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

Wealthiest Indian state which accounts for 12% of the Indian GDP is Maharashtra. The best facilities like transport, trade etc. including a port has contributed to the immense development of the state.

Mumbai the capital of Maharashtra state is the business capital of India 

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

To avoid double counting we deduct the value of  ________.

  1. final goods

  2. intermediate goods

  3. raw material

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

Intermediate goods are those goods which are partly finished and are used in the process of production of another goods.

As the intermediate goods are used again in the production of another good, counting the value of these goods may result in double counting. That is why value of intermediate goods are not taken while calculating national income.

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

There is no possibility of double counting while estimating national income.

  1. True

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

Double counting is a significant risk when estimating national income, especially in the Product Method, where the value of intermediate goods can be mistakenly included multiple times if not carefully accounted for.

Multiple choice economics measurement of national income methods of national income methods of measuring national income national income analysis

National income at constant price is an estimate on the basis of base prices.

  1. True

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

National income at constant prices (also known as real national income) is calculated by valuing current production at the prices of a chosen base year to eliminate the effects of inflation.