Tag: measurement of national income

Quizzes (2) Questions (99)

Questions Related to measurement of 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

Are the following statements true or false? Give reasons.
Production of services for self-consumption are not included in national income. 

  1. True

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

Such services are not included in national income as It is difficult to ascertain their market value and they are not rendered for earning 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 income from abroad should be added in the national income.

  1. True

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

National income (specifically GNP or GNI) includes net factor income from abroad, which is the difference between factor income earned by residents from abroad and factor income earned by non-residents domestically.

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

Income method is more reliable than expenditure method.

  1. True

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

The reliability of a method depends on the quality of data available. In many developed economies, the income method is considered more reliable due to better tax and payroll record-keeping.

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 case, net income from abroad need to be added separately under the income method?

  1. If national income is calculated from incomes received by people

  2. If national income is calculated from data regarding incomes paid out by producers

  3. In both above methods, added separately

  4. In neither of the above methods, added separately
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When calculating national income via the income method, one must account for factor incomes paid out by producers to residents, which includes net factor income from abroad.

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

Transfer incomes are ___________ national income.

  1. included in

  2. excluded from

  3. sometimes included, sometimes excluded

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

Transfer incomes, such as pensions or scholarships, are not payments for current production of goods or services; therefore, they are excluded from 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

Income method considers _________.

  1. only primary factors of production

  2. only secondary factors of production

  3. both (a) and (b)

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

The income method aggregates the factor incomes (wages, rent, interest, profit) generated by the primary factors of production (land, labor, capital, entrepreneurship).