Tag: methods of measuring national income

Quizzes (3) Questions (114)

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

One of the problems in correctly estimating national income in India is _____________.

  1. low savings

  2. inflation

  3. under-employment

  4. self-consumption
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In developing countries like India, a large portion of production is for self-consumption (subsistence farming, etc.), which is difficult to measure and value accurately, posing a challenge for national income estimation.

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

Which of the following equations is correct?

  1. Value at Factor Cost plus Indirect Taxes minus Subsidies = Value at Market Prices

  2. Value at Factor Cost minus Indirect Taxes minus Subsidies = Value at Market Prices

  3. Value at Factor Cost plus Indirect Taxes plus Subsidies = Value at Market Prices

  4. Value at Factor Cost minus Indirect Taxes plus Subsidies = Value at Market Prices
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Market Price = Factor Cost + Indirect Taxes - Subsidies. Therefore, Value at Factor Cost + Indirect Taxes - Subsidies = Value at Market Prices.

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

Which of the following is not a problem in the estimation of India's national income?

  1. Rapid industrialization

  2. Non-monetised consumption

  3. Illiterate people

  4. People holding multiple jobs
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Rapid industrialization is a goal or a process of economic development, not a technical difficulty in measuring national income. The other options represent real challenges, such as the difficulty of valuing non-monetized goods, tracking income from illiterate populations, or accounting for multiple income sources.

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

Which of the following items are-not included in estimating National income?

  1. Salary income of artists, dancers and singers.

  2. Income of smugglers.

  3. Payments to farm workers in foodgrains.

  4. Payments of bank interest for capital borrowed.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

National income accounting only includes income generated from legal, productive economic activities. Income from illegal activities, such as smuggling, is excluded because it is not reported and does not contribute to the official flow of goods and services.