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National Income Accounting Class 12 MCQs Questions with Answers
Choose the correct alternative.
Question 1.
Depreciation of fixed capital assets refers to
(a) Normal wear and tear
(b) Foreseen obsolescence
(c) Normal wear and tear and foreseen obsolescence
(d) Unforeseen obsolescence
Answer
Answer: (c) Normal wear and tear and foreseen obsolescence
Question 2.
National income is the sum of factor income accruing to
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents
Answer
Answer: (c) Residents
Question 3.
GNP at MP =
(a) GDPMP – Depreciation
(b) GDPMP + Depreciation
(c) GDPMP ÷ Depreciation
(d) GDPMP + Net factor income from abroad
Answer
Answer: (d) GDPMP + Net factor income from abroad
Question 4.
NDPMP =
(a) GDPMP – Depreciation
(b) GDPFC + Net factor income from abroad
(c) NNPFC + Net indirect taxes
(d) All of these
Answer
Answer: (a) GDPMP – Depreciation
Question 5.
NNPMP =
(a) GNPMP – Depreciation
(b) NDPMP + Net factor income from abroad
(c) NNPFC + Net indirect taxes
(d) All of these
Answer
Answer: (d) All of these
Question 6.
GDPFC =
(a) GDPMP – Net indirect taxes
(b) GDPMP + Net indirect taxes
(c) GDPMP + Subsidies
(d) GDPMP – Indirect taxes
Answer
Answer: (a) GDPMP – Net indirect taxes
Question 7.
NDPFC =
(a) GDPFC – Indirect taxes
(b) GDPFC – Depreciation
(c) GDPFC + Economic subsidy
(d) All of these
Answer
Answer: (b) GDPFC – Depreciation
Question 8.
NNPFC =
(a) GNPFC – Depredation
(b) NNPMP + Economic subsidy – Indirect taxes
(c) NDPMP + Net factor income from abroad
(d) All of these
Answer
Answer: (d) All of these
Question 9.
Accounting of National Income at constant prices is known as
(a) Money income
(b) Real income
(c) Current income
(d) Domestic income
Answer
Answer: (b) Real income
Question 10.
Which of the following items are excluded from GNP measurement?
(a) Purely financial transactions
(b) Transfer of used goods and non-market goods and services
(c) Illegal activities and the value of leisure
(d) All of these
Answer
Answer: (d) All of these
Fill in the blanks with the correct word.
Question 1.
Real National Income is the value of current income at ______ year prices.
Answer
Answer: base
Question 2.
Flow is a ______ concept.
Answer
Answer: dynamic
Question 3.
______ flow shows the flow of goods and services across different sectors.
Answer
Answer: Real
Question 4.
______ has no time dimension.
Answer
Answer: Stock
Question 5.
_______ has a time dimension.
Answer
Answer: Row
Question 6.
The production method is also known as the _______ method.
Answer
Answer: value-added
Question 7.
The weights are ______ in C.P.I.
Answer
Answer: constant
Question 8.
GDP deflator does not include prices of ______ goods.
Answer
Answer: imported
State whether the following statements are True or False. Give reasons.
Question 1.
Real flow shows the flow of money across different sectors.
Answer
Answer: False.
Real flow shows the flow of goods and services across different sectors.
Question 2.
Stock is a dynamic concept.
Answer
Answer: False.
Stock is a static concept whose magnitude is measured at a particular point in time.
Question 3.
National Income includes only transfer incomes, not the factor incomes.
Answer
Answer: False.
National Income includes factor incomes, not the transfer incomes.
Question 4.
Import is leakage of the circular flow of income.
Answer
Answer: True.
Imports lead to the withdrawal of income from the process circular flow.
Question 5.
The value of intermediate goods is not included in the estimation of value-added.
Answer
Answer: True.
Only the value of output added at each stage of production is included in the estimation of value-added.
Question 6.
A part of the capital gets consumed during the year due to wear and tear is called value-added.
Answer
Answer: False.
A part of the capital that gets consumed during the year due to wear and tear is called depreciation.
Match the alternatives given in Column II with respective terms in Column I.
Question 1.
| Column I | Column II |
| (i) Flow variable | (a) Value Added Method |
| (ii) Stock variable | (b) Include in National Income |
| (iii) Product method | (c) Measured over a specific period of time |
| (iv) NDPFC = | (d) Measured at a specific point in time |
| (v) GDPFC = | (e) NDPFC – Indirect Taxes + Subsidies |
| (vi) Saving | (f) Stock Concept |
| (vii) Wealth | (g) NDPFC + Depreciation |
| (viii) Final expenditure method | (h) Flow Concept |
| (ix) Windfall gains | (i) Consumption and Investment Method |
| (x) Family members working free on the family-owned farm | (j) Don’t include in National Income |
Answer
Answer:
| Column I | Column II |
| (i) Flow variable | (c) Measured over a specific period of time |
| (ii) Stock variable | (d) Measured at a specific point in time |
| (iii) Product method | (a) Value Added Method |
| (iv) NDPFC = | (e) NDPMP – Indirect Taxes + Subsidies |
| (v) GDPFC = | (g) NDPFC + Depreciation |
| (vi) Saving | (h) Flow Concept |
| (vii) Wealth | (f) Stock Concept |
| (viii) Final expenditure method | (i) Consumption and Investment Method |
| (ix) Windfall gains | (j) Don’t include in National Income |
| (x) Family members working free on the family-owned farm | (b) Include in National Income |
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