Tag: methods of measuring national income

Questions Related to methods of measuring national income

Suppose that a firm had an unsold stock worth of Rs 100 at the beginning of a year. During the year it had produced Rs 1,000 worth of goods and managed to sell Rs 800 worth of goods. Calculate inventory for the year ___________.

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

  1. 100

  2. 200

  3. 300

  4. 400

Show answer
Correct Option: C

A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves) is called __________.

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

  1. profits

  2. taxes

  3. dividends

  4. none of the above

Show answer
Correct Option: C
Explanation:

A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves) is called a dividend

A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

The National Income is equal to __________.

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

  1. NNP - Subsidies + Taxes

  2. NNP - Indirect Taxes + Subsidies

  3. NNP - Direct Taxes + Subsidies

  4. GNP - Subsidies + Taxes

Show answer
Correct Option: B
Explanation:


The phrase at factor cost is to be contrasted with the phrase at market prices.

Goods produced are sold at market prices which include the indirect taxes imposed by the Government. Indirect taxes are levied on commodities, such as excise duty on beer and cloth, etc.

Thus, the market value of the national product exceeds the income paid to the factors of production by the amount of indirect taxes. Hence, net national income at factor cost shows the income actually received by the factors of production.

On the other hand, a subsidy causes the market price to be less than the factor cost. The subsidy is an aid in money.

.’. NNI at Factor Cost = NNPat MP plus Subsidies minus Indirect Taxes.

National Income may be determined through ________.

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

  1. Income Approach

  2. Expenditure Approach

  3. Output Approach

  4. All of the above

Show answer
Correct Option: D
Explanation:

The national income of a country can be measured by three alternative methods:
(i) Product Method
(ii) Income Method,
(iii) Expenditure Method. 

National Income of a country can be calculated by_______.

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

  1. $2$ methods

  2. $3$ methods

  3. $4$ methods

  4. $5$ methods

Show answer
Correct Option: B
Explanation:
National Income is the total value of all services and goods that are produced within a country and the income that comes from abroad for a particular period, normally one year.
National income can be computed by three methods:
1) Value-Added Method by classifying Production Units in an economy as Primary, Secondary and Tertiary Sectors.
2)Income Method - on the basis of the combination of individuals and households indulged in different kinds of factors of production.
3)Final Expenditure Method - on the basis of a collection of units used for consumption, saving, and investment.

Which of the following are the methods for measuring National Income?

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

  1. The Product or Value Added Method

  2. Expenditure Method

  3. Income Method

  4. All of the above

Show answer
Correct Option: D

Total revenue $\div$ Number of units sold $=$ ____________.

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

  1. Average revenue

  2. Average cost

  3. Marginal cost

  4. Total cost

Show answer
Correct Option: A
Explanation:

Average means value derived by way of dividing the total value by the total number of units. Whenever any goods are sold or services are provided to any consumer then amount so received from the consumer is termed as revenue or receipts.

Therefore Total revenue / Number of Units sold gives Average Revenue.

________ income in excluded in the calculation of net income.

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

  1. Factor

  2. Portable

  3. Movable

  4. Transfer

Show answer
Correct Option: D

Income from sale of second hand property should be included in national income.

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

  1. True

  2. False

Show answer
Correct Option: B

Income method is known as ______ method.

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

  1. factor cost

  2. market price

  3. output

  4. expenditure

Show answer
Correct Option: A