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

Net National product (NNP) at factor cost was ________ in 1950-51.

  1. Rs. 92,367 crore

  2. Rs. 1,02,367 crore

  3. Rs. 1,22,367 crore

  4. Rs. 2,04,924 crore
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This is a factual question regarding historical Indian economic data. Rs. 2,04,924 crore is the historically accepted figure for NNP at factor cost in 1950-51.

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

___________ method is suitable for measuring National Income in the case Small Scale Sector.

  1. Product

  2. Income

  3. Expenditure

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

The income method is often preferred for the small-scale sector because these enterprises often have better records of their income payments than their total output or final expenditures.

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

Value Added Method is used to measure _______________.

  1. national income

  2. domestic income

  3. gross income

  4. personal income
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Value Added method (also known as the Product method) calculates the total value of goods and services produced within an economy. This total value represents the national income generated by all productive sectors.

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 items are included in computing National Income under Income Method?

  1. Transfer Incomes

  2. Illegal Incomes

  3. Incomes earned by Owners of Primary Factors of Production

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

The Income Method calculates national income by summing all factor incomes earned by owners of primary factors of production (land, labor, capital, and entrepreneurship). Transfer incomes (like pensions) and illegal incomes are excluded because they do not represent current productive activity.

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

_____________ method is suitable for measuring National Income in the case of Developed Countries where all persons file their income-tax returns.

  1. Product

  2. Income

  3. Expenditure

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

In developed countries, comprehensive income tax systems provide reliable data on individual and corporate earnings. This makes the Income Method highly effective for estimating national income in those regions.

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 items are included in computing National Income under Product Method?

  1. Own account production of Fixed Assets by Government,Enterprises and Households

  2. Production for Self-Consumption,

  3. Imputed Rent of owner-occupied houses

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

The Product Method (or Value Added Method) aims to capture the total value of production. This includes market production, production for self-consumption, imputed rent for owner-occupied housing, and own-account capital formation by government and enterprises.

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

The annual flow of Factor Earnings in the form of Wages,Rents,Interests and Profits accrued from Labour, Land, Capital and Organization respectively are taken into account  in which of the following approaches to measuring National Income?

  1. Income Approach

  2. Expenditure Approach

  3. Product Approach

  4. All the approaches consider Factor Earnings
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Income Approach specifically aggregates the factor incomes (wages, rent, interest, and profit) generated by the factors of production (labor, land, capital, and organization) during the production process.

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

_____________ method is suitable for measuring National Income in the case of construction sector.

  1. Product

  2. Income

  3. Expenditure

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

In many developing economies, including India, the Expenditure Method is often used for specific sectors like construction because it is easier to track the total expenditure on construction materials and labor than to track the income or value added directly from numerous small-scale contractors.

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

In which of the following approaches is National Income measured by calculating the Total Value of the Final Output of a country?

  1. Income Approach

  2. Product Approach

  3. Expenditure Approach

  4. No such measures exist, where final output of a country is considered for measuring National Income
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Product Approach (or Output Method) calculates national income by summing the total value of final goods and services produced within the country, ensuring that intermediate goods are excluded to avoid double counting.

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

The Net Values Added method of measuring National Income is also known as ______________.

  1. Net Output Method

  2. Production Method

  3. Industry of Origin Method

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

The Net Value Added method is synonymous with the Production Method, the Net Output Method, and the Industry of Origin Method, as all these terms describe the process of summing the value added by each industry to the economy.