MCQs NATIONAL INCOME
Q1. Which of the following is a stock?
Q2. Which of the following is a flow?
A. Deposits in a bank
Q3. Which of the following is not a flow?
Q4. Which of the following is a stock?
Q5. National Income is the sum of factor income accruing to?
A. Residents & Non-residents
B. Economic territory
Q6. Depreciation of fixed capital assets refers to:
A. Normal wear & tear
B. Foreseen obsolescence
C. Both A &B
Q7. Which of the following is not a part of injection?
Q8. – is the quantity of variable which is measured over a period of
Q9. Give the definition of stock variable
Ans. Stock variable is the quantity which is measured over a point of
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
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
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
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
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
Q. Define intermediate cost.
Ans. Refers to the expenditure by producers on intermediate goods in a
Q23. Stock of unsold finished goods / semi finished goods is known as –
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
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
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:
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
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