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CBSE Questions for Class 12 Commerce Economics National Income Accounting Quiz 6 - MCQExams.com
CBSE
Class 12 Commerce Economics
National Income Accounting
Quiz 6
National income may be computed under _________ method.
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0%
product
0%
income
0%
expenditure
0%
all of the above
Explanation
The national income of a country can be measured by three methods:
Product Method,
Income Method, and
Expenditure Method.
Hence, correct answer is option D.
Which of the following is not, by definition, equal to National Income?
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0%
National Product
0%
National Expenditure
0%
National Output
0%
National Wealth
Explanation
National Wealth is not, by definition, equal to National Income. National wealth can be defined as the difference between national assets and liabilities. National wealth is also known as national net worth. Whereas, national income can be defined as the total amount earned by an economy.
GNP excludes _________.
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0%
rental incomes
0%
interest payments
0%
dividends
0%
government transfer payments
Product Method focuses on measurement of National Income at _______________.
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0%
phase of Production of Goods and Services
0%
phase of Income Distribution
0%
phase of Income Disposition
0%
all of the above
National income at market prices, plus subsidies, but less indirect taxes is equal to which one of the following?
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0%
Gross national income
0%
National income at factor cost
0%
Private income before cost
0%
Net consumer income
NNP at MP = NNP at FC, when there is ____________.
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0%
no direct tax
0%
no indirect tax
0%
no subsidy
0%
no indirect tax and no subsidy
Explanation
NNP at MP = NNP at FC + Net Indirect Tax (Indirect Tax - Subsidies). If Net Indirect Tax = Nil (Indirect Tax = Nil and Subsidies = Nil).
Then, NNP at MP = NNP at FC. Hence, correct answer is option D.
Which will increase GNP?
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0%
A rise in the Market Price
0%
A surplus in Budget
0%
An increase in Investment
0%
A deficit in Budget
Explanation
GNP adds government expenditure, personal consumption expenditure, private domestic investments, net exports, and income earned by nationals overseas.
Hence increase in GNP will increase investment.
Hence c is the correct answer.
_________ method is suitable for measuring National Income in the case of Agricultural sector.
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0%
Product
0%
Income
0%
Expenditure
0%
All of the above
Explanation
The
output method
(product) has been used largely in the commodity producing sectors like agriculture and manufacturing. Hence, correct answer is option A.
Income method focusses on measurement of National Income at ______________________.
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0%
phase of Production of Goods and Services
0%
phase of Income Distribution
0%
phase of Income Disposition
0%
all of the above
Explanation
The income method focuses on the measurement of National income at the phases of the income distribution.
it comprises rent, interests, wages, and profit from the firm to the household.
Hence B is the correct option.
Value Added Method is used to measure _______________.
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0%
national income
0%
domestic income
0%
gross income
0%
personal income
Explanation
Value Added Method is used to measure national income.
The value-added method focuses on the value added to a product at each stage of its production.
Hence option a is the correct option.
The production method of calculating national income is also known as _______________.
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0%
value added method
0%
income method
0%
expenditure method
0%
none of the above
Explanation
Product method is also known as output method or value added method. In this method, we calculate the national income in terms of final goods and services produced in an economy during a particular period of time.
Hence a is the correct answer.
_____________ method is suitable for measuring National Income in the case of construction sector.
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0%
Product
0%
Income
0%
Expenditure
0%
All of the above
______________ method is also called value added method of computing national income.
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0%
Product
0%
Income
0%
Expenditure
0%
All of the above
The Net Values Added method of measuring National Income is also known as ______________.
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0%
Net Output Method
0%
Production Method
0%
Industry of Origin Method
0%
All of the above
Explanation
The
Net Values Added
method of measuring national income is also known as
Net output method,
Production method and
Industry of origin method.
Hence, correct answer is option D.
Expenditure Method focusses on measurement of National Income at _____________________.
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0%
phase of Production of Goods and Services
0%
phase of Income Distribution
0%
phase of Income Disposition
0%
all of the above
Explanation
Expenditure method focusses on measurement of national income at phase of income disposition.
Under this phase
income received by factors of production, is spent on the goods and services produced by the firm.
So option c is the correct option.
___________ method is suitable for measuring National Income in the case Small Scale Sector.
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0%
Product
0%
Income
0%
Expenditure
0%
All of the above
_____________ method is suitable for measuring National Income in the case of Developed Countries where all persons file their income-tax returns.
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0%
Product
0%
Income
0%
Expenditure
0%
All of the above
Which of the following items are included in computing National Income under Income Method?
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0%
Transfer Incomes
0%
Illegal Incomes
0%
Incomes earned by Owners of Primary Factors of Production
0%
All of the above
Explanation
The income earned by owners of capital resources is interest.
These factors of production to firms and in return earn wages, interest, rent and profit.
Hence incomes earned by owners of primary factors of production are included in computing national income under the income method.
National income figures are __________.
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0%
very exact
0%
practically exact
0%
only estimates
0%
money
Explanation
National Income refers to the income of the whole economy including all the sectors at a given point of time. It only estimates the income of all the sectors and does not say the exact figure as it is impossible to tell the exact income figure of an economy. Therefore, national income is only the imputed figure of the income of the economy.
Under Expenditure Method, Consumption Expenditure + Net Domestic Investment equals _____________.
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0%
Gross Domestic Expenditure
0%
Gross National Expenditure
0%
Net Domestic Expenditure
0%
Net National Expenditure
In which of the following approaches is National Income measured by calculating the Total Value of the Final Output of a country?
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0%
Income Approach
0%
Product Approach
0%
Expenditure Approach
0%
No such measures exist, where final output of a country is considered for measuring National Income
Under Expenditure Method, Consumption Expenditure + Net Domestic Investment + Net Foreign Investment equals _____________.
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0%
Gross Domestic Expenditure
0%
Gross National Expenditure
0%
Net Domestic Expenditure
0%
Net National Expenditure
Explanation
Net National Expenditure = Consumption Expenditure + Net Domestic Investment + Net Foreign Investment.
The expenditure method of calculating national income or gross domestic product takes into account the final goods and services produced in a country during a period of time.
Hence D is correct option.
Under expenditure Method, Consumption Expenditure + Net Domestic Investment + Replacement Expenditure equals ______________.
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0%
Gross Domestic Expenditure
0%
Gross National Expenditure
0%
Net Domestic Expenditure
0%
Net National Expenditure
The annual flow of Factor Earnings in the form of Wages,Rents,Interests and Profits accrued from Labour, Land, Capital and Organization respectively are taken into account in which of the following approaches to measuring National Income?
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0%
Income Approach
0%
Expenditure Approach
0%
Product Approach
0%
All the approaches consider Factor Earnings
Net Value Added is equal to _____________________.
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0%
Payments accruing to Factors of Production
0%
Compensation to Employees
0%
Wages plus Rent plus Imputed Rent
0%
Value of Output minus Depreciation
Which of the following items are included in computing National Income under Product Method?
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0%
Own account production of Fixed Assets by Government,Enterprises and Households
0%
Production for Self-Consumption,
0%
Imputed Rent of owner-occupied houses
0%
All of the above
Income Method does not include _____________.
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0%
rent
0%
mixed incomes
0%
pensions
0%
all of the above
GNP is a poor measure of welfare because it does not show ____________.
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0%
composition of output
0%
population level
0%
price level
0%
all of the above
Explanation
Gross national product is measured at base level price and output rather than the current year price which makes it give false picture about the status of the economy. Therefore, it is not regarded as an accurate measure of welfare.
A refrigerator operating in a chemist's shop is an example of ______________.
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0%
free good
0%
final good
0%
intermediate good
0%
consumer good
$$NNP_{fc}$$
= ________.
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0%
$$GNP_{fc}$$-Depreciation
0%
$$NNP_{mp}$$
- indirect taxes
0%
$$GNP_{mp}$$
- depriciation
0%
$$GNP_{fc}$$
-net indirect taxes
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