MCQ on National Income
Q1. Which organization is responsible for estimating the national income of India?
a) Central Statistical Office (CSO)
b) National Sample Survey Office (NSSO)
c) Reserve Bank of India (RBI)
d) Ministry of Finance
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Correct Answer: a) Central Statistical Office (CSO)
Explanation: The Central Statistical Office (CSO) is responsible for estimating the national income of India. The CSO compiles data on various economic indicators, such as GDP, GNP, and per capita income, to provide a comprehensive picture of the country’s economic performance.
Q2. Which of the following is a method used to calculate the national income of India?
a) Production method
b) Income method
c) Expenditure method
d) All of the above
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Correct Answer: d) All of the above
Explanation: The national income of India can be calculated using three methods: the production method, the income method, and the expenditure method. Each method provides a different perspective on the economy, and the results are usually averaged to arrive at a final estimate of national income.
Q3. Which of the following is a component of Gross Domestic Product (GDP)?
a) Consumption
b) Investment
c) Government expenditure
d) All of the above
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Correct Answer: d) All of the above
Explanation: Gross Domestic Product (GDP) is the total value of goods and services produced within a country during a specific period. It includes consumption, investment, and government expenditure, as well as net exports (exports minus imports).
Q4. Which of the following is a component of Gross National Product (GNP)?
a) Gross Domestic Product (GDP)
b) Net factor income from abroad
c) Indirect taxes
d) Both a) and b)
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Correct Answer: d) Both a) and b)
Explanation: Gross National Product (GNP) is the total value of goods and services produced by a country’s residents, both within the country and abroad, during a specific period. It includes Gross Domestic Product (GDP) and net factor income from abroad (income earned by residents from foreign investments minus income earned by non-residents from domestic investments).
Q5. Which of the following is a measure of the average income of a country’s residents?
a) Gross Domestic Product (GDP) per capita
b) Gross National Product (GNP) per capita
c) Net National Product (NNP) per capita
d) All of the above
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Correct Answer: d) All of the above
Explanation: All of the mentioned measures, GDP per capita, GNP per capita, and NNP per capita, are used to estimate the average income of a country’s residents. These measures provide insights into the overall economic well-being of the population and can be used to compare the standard of living across different countries.
Q6. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation?
a) Gross Domestic Product (GDP)
b) Gross National Product (GNP)
c) Net National Product (NNP)
d) None of the above
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Correct Answer: c) Net National Product (NNP)
Explanation: Net National Product (NNP) is a measure of the total income generated by a country’s residents after accounting for depreciation (the wear and tear of capital assets). It is calculated by subtracting depreciation from Gross National Product (GNP).
Q7. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation and indirect taxes?
a) Gross Domestic Product (GDP)
b) Gross National Product (GNP)
c) Net National Product (NNP)
d) Net National Income (NNI)
Show Answer
Correct Answer: d) Net National Income (NNI)
Explanation: Net National Income (NNI) is a measure of the total income generated by a country’s residents after accounting for depreciation and indirect taxes. It is calculated by subtracting depreciation and indirect taxes from Gross National Product (GNP).
Q8. Which of the following sectors contributes the most to India’s GDP?
a) Agriculture
b) Industry
c) Services
d) Mining
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Correct Answer: c) Services
Explanation: The services sector contributes the most to India’s GDP, accounting for more than half of the country’s total output. This sector includes various sub-sectors such as IT, tourism, healthcare, and financial services, among others.
Q9. Which of the following is a limitation of using GDP as a measure of economic well-being?
a) It does not account for income distribution
b) It does not account for the underground economy
c) It does not account for non-market activities
d) All of the above
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Correct Answer: d) All of the above
Explanation: GDP has several limitations as a measure of economic well-being, including not accounting for income distribution, the underground economy, and non-market activities. These factors can lead to an incomplete or misleading picture of a country’s overall economic well-being.
Q10. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, and subsidies?
a) Gross Domestic Product (GDP) at market prices
b) Gross National Product (GNP) at market prices
c) Net National Product (NNP) at factor cost
d) Net National Income (NNI) at factor cost
Show Answer
Correct Answer: d) Net National Income (NNI) at factor cost
Explanation: Net National Income (NNI) at factor cost is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, and subsidies. It is calculated by subtracting depreciation and indirect taxes, and adding subsidies to Gross National Product (GNP).
Q11. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad?
a) Gross Domestic Product (GDP) at factor cost
b) Gross National Product (GNP) at factor cost
c) Net National Product (NNP) at factor cost
d) Net National Income (NNI) at factor cost
Show Answer
Correct Answer: c) Net National Product (NNP) at factor cost
Explanation: Net National Product (NNP) at factor cost is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad. It is calculated by subtracting depreciation and indirect taxes, adding subsidies, and adjusting for net factor income from abroad to Gross National Product (GNP).
Q12. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed on a per capita basis?
a) Gross Domestic Product (GDP) per capita at factor cost
b) Gross National Product (GNP) per capita at factor cost
c) Net National Product (NNP) per capita at factor cost
d) Net National Income (NNI) per capita at factor cost
Show Answer
Correct Answer: c) Net National Product (NNP) per capita at factor cost
Explanation: Net National Product (NNP) per capita at factor cost is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed on a per capita basis. It provides insights into the overall economic well-being of the population and can be used to compare the standard of living across different countries.
Q13. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed in constant prices?
a) Gross Domestic Product (GDP) at constant prices
b) Gross National Product (GNP) at constant prices
c) Net National Product (NNP) at constant prices
d) Net National Income (NNI) at constant prices
Show Answer
Correct Answer: c) Net National Product (NNP) at constant prices
Explanation: Net National Product (NNP) at constant prices is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed in constant prices. This measure allows for the comparison of national income across different time periods, accounting for the effects of inflation.
Q14. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed in current prices?
a) Gross Domestic Product (GDP) at current prices
b) Gross National Product (GNP) at current prices
c) Net National Product (NNP) at current prices
d) Net National Income (NNI) at current prices
Show Answer
Correct Answer: c) Net National Product (NNP) at current prices
Explanation: Net National Product (NNP) at current prices is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed in current prices. This measure reflects the actual market value of goods and services produced during a specific period.
Q15. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed in purchasing power parity (PPP) terms?
a) Gross Domestic Product (GDP) at PPP
b) Gross National Product (GNP) at PPP
c) Net National Product (NNP) at PPP
d) Net National Income (NNI) at PPP
Show Answer
Correct Answer: c) Net National Product (NNP) at PPP
Explanation: Net National Product (NNP) at purchasing power parity (PPP) is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed in PPP terms. This measure allows for the comparison of national income across different countries, accounting for differences in price levels and exchange rates.
Q16. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total population?
a) Gross Domestic Product (GDP) per capita
b) Gross National Product (GNP) per capita
c) Net National Product (NNP) per capita
d) Net National Income (NNI) per capita
Show Answer
Correct Answer: c) Net National Product
Explanation: Net National Product (NNP) per capita is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total population. This measure provides insights into the overall economic well-being of the population and can be used to compare the standard of living across different countries.
Q17. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total population?
a) Gross Domestic Product (GDP) per capita
b) Gross National Product (GNP) per capita
c) Net National Product (NNP) per capita
d) Net National Income (NNI) per capita
Show Answer
Correct Answer: c) Net National Product (NNP) per capita
Explanation: Net National Product (NNP) per capita is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total population. This measure provides insights into the overall economic well-being of the population and can be used to compare the standard of living across different countries.
Q18. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total working-age population?
a) Gross Domestic Product (GDP) per worker
b) Gross National Product (GNP) per worker
c) Net National Product (NNP) per worker
d) Net National Income (NNI) per worker
Show Answer
Correct Answer: c) Net National Product (NNP) per worker
Explanation: Net National Product (NNP) per worker is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total working-age population. This measure provides insights into the productivity of the workforce and can be used to compare the efficiency of labor across different countries.
Q19. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total labor force?
a) Gross Domestic Product (GDP) per employed person
b) Gross National Product (GNP) per employed person
c) Net National Product (NNP) per employed person
d) Net National Income (NNI) per employed person
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Correct Answer: c) Net National Product (NNP) per employed person
Explanation: Net National Product (NNP) per employed person is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total labor force. This measure provides insights into the productivity of the employed population and can be used to compare the efficiency of labor across different countries.
Q20. Which of the following is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total capital stock?
a) Gross Domestic Product (GDP) per unit of capital
b) Gross National Product (GNP) per unit of capital
c) Net National Product (NNP) per unit of capital
d) Net National Income (NNI) per unit of capital
Show Answer
Correct Answer: c) Net National Product (NNP) per unit of capital
Explanation: Net National Product (NNP) per unit of capital is a measure of the total income generated by a country’s residents after accounting for depreciation, indirect taxes, subsidies, and net factor income from abroad, expressed as a percentage of the total capital stock. This measure provides insights into the productivity of capital and can be used to compare the efficiency of capital across different countries.