MCQs NATIONAL INCOME

Q1. Which of the following is a stock?
A. Savings
B. Production
C. Depreciation
D. Capital
Ans. D

Q2. Which of the following is a flow?
A. Deposits in a bank
B. Capital
C. Wealth
D. Depreciation
Ans. D

Q3. Which of the following is not a flow?
A. Capital
B. Investment
C. Income
D. Depreciation
Ans. A

Q4. Which of the following is a stock?
A. Wealth
B. Savings
C. Exports
D. Profits
Ans. A

Q5. National Income is the sum of factor income accruing to?
A. Residents & Non-residents
B. Economic territory
C. Residents
D. Nationals
Ans. C

Q6. Depreciation of fixed capital assets refers to:
A. Normal wear & tear
B. Foreseen obsolescence
C. Both A &B
D. None
Ans. C

Q7. Which of the following is not a part of injection?
A. Exports
B. Savings
C. Investment
D. None
Ans. B

Q8. – is the quantity of variable which is measured over a period of
time
Ans. Flow

Q9. Give the definition of stock variable
Ans. Stock variable is the quantity which is measured over a point of
time

Q10. Define investment.
Ans. It is the process of capital formation in an economy or increase in
the stock of capital

Q11. Define capital goods.
Ans. Capital goods are those goods which are used in production
process , they are the fixed assets of producers , help to convert
intermediate goods into final goods

Q12. Give the meaning of consumer goods
Ans. Consumer goods are those goods which are directly used for
satisfaction for human wants , they are not used in the production of
other goods.

Q13. What does Macroeconomics study?
Ans. Macroeconomics studies economic problems at the level of an
economy as a whole.

Q14. Define final goods
Ans. Final goods are those goods which are finally produced and are
ready for use by their final users
Example: Clothes, milk consumed by consumer

Q15. What do you mean by consumption of fixed capital or
depreciation?
Ans. Consumption of fixed capital means loss in the value of fixed
assets due to wear & tear , accidental damages & expected or foreseen
obsolescence, also called Depreciation

Q16. Give one example of flow concept.
Ans. Income, Investment , Depreciation
OR
Give one example of stock concept.
Ans. Wealth , Capital, Deposits in a bank

Q17. Give an example of negative externality
Ans. Pollution by industries

Q18. Define National income.
Ans. It is the sum of factor income accruing to normal residents of a country
within the domestic territory & the rest of world during a period of one
financial year
OR
What do you mean by national product?
Ans. National product is the money value of all goods & services produced by the normal residents of a country during a period of one financial year.

Q19. Define Real Gross Domestic Product
Ans. Real GDP is the final value of goods and services produced in an
economy during a financial year on the basis of base year prices of
goods & services, also called GDP at constant price

Q20. Define Nominal GDP.
Ans. It is the final value of goods & services produced in an economy
during an accounting year on the basis of current year price of goods &
services, also called GDP at current price

Q21. Define transfer payment?
Ans. Transfer payments refers to all those unilateral payments
corresponding to which there is no value addition in the economy like
grants or donations

Q22. Define intermediate goods
Ans. Refers to those goods which are purchased by a firm for the
production of other goods or for the purpose of resale
Examples: Steel in the production of automobiles & TV sets purchased
by dealers
OR
Q. Define intermediate cost.
Ans. Refers to the expenditure by producers on intermediate goods in a
financial year

Q23. Stock of unsold finished goods / semi finished goods is known as –
Ans. Inventory

Q24. Name the factors of production
Ans. Capital, Entrepreneur, Land, Capital & Human labour

Q25.Change in real GDP means –
A. Change in volume of production
B. Change in price level
C. A & B both
D. None
Ans. A

Q26. Define gross investment
Ans. Expenditure incurred by producers on purchase of capital goods
during a financial year is known as Gross investment, it doesn’t cause
change in stock of capital
OR
Q. Define net investment
Ans. It refers to the expenditure by producers on purchase of capital
goods to increase capital stock, cause addition in capital stock.

Q27. What do you mean by circular flow of income?
Ans. It refers to the continuous flow of production, income generation
& expenditure in different economic sectors, producers & households

Q28. National Income is:
A. NNPmp
B. NNPfc
C. GDPmp
D. NDPfc
Ans. B

Q29. Formula for GDP deflator is :
A. Real income/Nominal income X 100
B. Real income/Total population X 100
C. Nominal Income/Real income X100
D. Total income/Total population X100
Ans. C

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