Tag: methods of measuring national income

Quizzes (3) Questions (114)

Questions Related to methods of measuring national income

Multiple choice economics circular flow of income and methods of calculating national income expenditure method and income method methods of measuring national income national income accounting

Illegal income includes ______ while transfer income includes ________.

  1. cost, price

  2. taxes, payments

  3. none of the above

  4. betting, scholarships
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Illegal income (like betting) is generally excluded from national income calculations, while transfer payments (like scholarships) are also excluded as they do not represent production of goods or services.

Multiple choice economics circular flow of income and methods of calculating national income expenditure method and income method methods of measuring national income national income accounting

National Income is the ________ of all goods and services produced by a country during a period of year.

  1. physical quantity

  2. money value

  3. value

  4. all the three
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

National Income is defined as the total money value of all final goods and services produced within a country during a given period.

Multiple choice economics circular flow of income and methods of calculating national income expenditure method and income method methods of measuring national income national income accounting

For developed economics which of the following methods is most suitable?

  1. Value Added Method

  2. Income Method

  3. Expenditure Method

  4. Product Method
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Income Method is often considered most suitable for developed economies where income tax records and organized financial data are comprehensive and reliable.

Multiple choice economics circular flow of income and methods of calculating national income expenditure method and income method methods of measuring national income national income accounting

"The national income consists of a collection of goods and services reduced to common basis by being measured in terms of money."- who says this?

  1. Samuelson

  2. Kuznets

  3. Hicks

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

This specific definition of national income, emphasizing the reduction of goods and services to a common monetary basis, is attributed to the economist J.R. Hicks.

Multiple choice economics circular flow of income and methods of calculating national income expenditure method and income method methods of measuring national income national income accounting

To avoid double counting in national income GDP is calculated by summing up ________.

  1. the value of all goods and services

  2. the value of final goods only

  3. the value of producers goods only

  4. the value of non-durable goods
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

To avoid double counting, only the value of final goods and services is included in the GDP calculation, as the value of intermediate goods is already embedded in the final price.

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

Are the following statements true or false? Give reasons.
Production of services for self-consumption are not included in national income. 

  1. True

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

Such services are not included in national income as It is difficult to ascertain their market value and they are not rendered for earning income. 

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

Net income from abroad should be added in the national income.

  1. True

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

National income (specifically GNP or GNI) includes net factor income from abroad, which is the difference between factor income earned by residents from abroad and factor income earned by non-residents domestically.