Tag: national income analysis

Quizzes (3) Questions (99)

Questions Related to national income analysis

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

_______ is the wealthiest Indian state which accounts for 12% of the Indian GDP.

  1. Tamil Nadu

  2. Kerala

  3. Maharashtra

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

Wealthiest Indian state which accounts for 12% of the Indian GDP is Maharashtra. The best facilities like transport, trade etc. including a port has contributed to the immense development of the state.

Mumbai the capital of Maharashtra state is the business capital of India 

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

To avoid double counting we deduct the value of  ________.

  1. final goods

  2. intermediate goods

  3. raw material

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

Intermediate goods are those goods which are partly finished and are used in the process of production of another goods.

As the intermediate goods are used again in the production of another good, counting the value of these goods may result in double counting. That is why value of intermediate goods are not taken while calculating national income.

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

There is no possibility of double counting while estimating national income.

  1. True

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

Double counting is a significant risk when estimating national income, especially in the Product Method, where the value of intermediate goods can be mistakenly included multiple times if not carefully accounted for.

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

National income at constant price is an estimate on the basis of base prices.

  1. True

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

National income at constant prices (also known as real national income) is calculated by valuing current production at the prices of a chosen base year to eliminate the effects of inflation.

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.