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

Under the expenditure method _________.

  1. expenditure on financial assets which are produced and owned within the country is excluded

  2. expenditure on financial assets of foreign countries is included

  3. both above are true

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

The expenditure method excludes purely financial transactions (like buying stocks or bonds) because they do not represent current production of goods or services.

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

For developed economies 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

In developed economies, comprehensive tax and income reporting systems make the income method a highly reliable and suitable way to measure 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

These days, an increasing proportion of national income is being measured by _______.

  1. Value Added Method

  2. Income Method

  3. Expenditure Method

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

Modern national accounting systems increasingly rely on the expenditure method due to the availability of detailed consumption and investment data.

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

Gini co-efficient is used for measuring poverty in _____________ sense.

  1. absolute

  2. relative

  3. gross

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

The Gini coefficient is a measure of statistical dispersion intended to represent the income inequality within a nation, making it a relative measure of poverty.

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

In India, poverty is measured in ___________ terms.

  1. absolute

  2. relative

  3. both

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

In India, the poverty line is defined based on a minimum level of income or consumption required to meet basic needs, which is an absolute measure of poverty.

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 true?

  1. Gross national expenditure $=$ consumption expenditure $+$ net domestic investment $+$ net foreign investment $+$ Replacement expenditure
  2. Net National Expenditure $=$ Gross National Expenditure $-$ Replacement investment
  3. Net domestic expenditure $=$ consumption expenditure $+$$ net domestic investment

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

All the listed equations correctly represent components or derivations of national expenditure accounting.

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

In countries like India, in practice _________.

  1. contributions of different sectors are calculated by different methods

  2. one consistent method is used

  3. both above are true depending upon facts and circumstances

  4. none of above is true
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Due to the diverse nature of the Indian economy, different sectors are measured using the most appropriate method (e.g., production method for agriculture, income method for services).

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

When poverty is not related to income or consumption expenditure, it is ___________.

  1. absolute

  2. relative

  3. below poverty line

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

Absolute poverty is defined by a fixed standard, whereas relative poverty is defined in relation to the income distribution of the rest of the society.

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

The production method of calculating national income is also known as _________.

  1. income method

  2. subtraction method

  3. value added method

  4. repeated distribution method
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The production method calculates national income by summing the value added by each producing unit, hence it is also called the value-added method.