Tag: basic concepts of national income

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Questions Related to basic concepts of national income

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Two-sector economy consists of _______________.

  1. Households, firms

  2. Firms, Foreign sector

  3. Households, Government

  4. Firms, Government
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Two sector economy consists of:
a) Household sector: It includes consumers of goods and services. Households are also the owners of the factors of production.
b) Producer sector: It includes all producing units in the economy. For the production of goods and services, the firms purchase factors of production.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Stock variable is defined as a variable which is __________________.

  1. Measured over a period of time

  2. Measured at a particular point of time

  3. Cannot be measured

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Stock variable is defined as a variable which is measured at a particular point of time. Stock is not time dimensional. It influences the flow. Example: wealth, capital, etc.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

The following statement is true or false? Give reasons.
Final goods include only those goods which are consumed by the households. 

  1. True

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

Final goods include those goods which are either consumed by the households or purchased by the producers for investment purposes. 

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

The following statements true or false? Give reasons.
End-use of the goods categorise the goods as intermediate goods and final goods. 

  1. True

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

If the end-use of the good is for further production or resale, then the good Is an intermediate good. However, if the end-use of the good is consumption or investment, then the good is a final good. 

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

The following statement is true or false? Give reasons.
Butter is only a final product. 

  1. True

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

The statement is false because:
It depends on the end use of butter. If butter is purchased by a household, then it Is a final good.
However, if it is purchased by a bakery shop for making cakes, then it is an intermediate good. 

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Which of the following is an example of Non-durable good? 

  1. Milk

  2. Bread

  3. Both (a) and (b)

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

Milk and Bread are examples of Non-durable good. Non-durable gods are those goods which are used-up in a single act of consumption. Bread and milk are used-up in a single act of consumption. The same milk or bread cannot be used again.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Which of the following is the consumption sector?

  1. Households

  2. Firms

  3. Foreign

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

Household is the consumption sector. Household sector receive goods and services from the producer sector for consumption purpose and thus the household sector can be termed as the consumption sector. Households are also the owners of the factors of production.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Refrigerator purchased by a confectionery shop is an example of _______________.

  1. Final Good

  2. Intermediate Good

  3. Capital Good

  4. Both (a) and (c)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Refrigerator purchased by a confectionery shop is an example of intermediate good since refrigerator is not yet ready for use by the final users. Value is yet to be added. Refrigerator is used as a raw material by a confectionery shop.