National and Per Capita Income AFCAT Questions

AFCAT Indian Economy

National and Per Capita Income MCQ Questions


1.
National income is best defined as:
A.
The total market value of all final goods and services produced by the normal residents of a country during a given period, usually one year
B.
The total amount of money printed by a country's central bank in a year
C.
The total value of imports minus exports of a country in a year
D.
The total value of all goods physically stored in a country's warehouses at a point in time
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ANSWER :
A. The total market value of all final goods and services produced by the normal residents of a country during a given period, usually one year
2.
National income is described in economics as a 'flow' concept rather than a 'stock' concept because:
A.
It refers exclusively to the flow of water used in production
B.
It is measured over a period of time (such as a year), unlike a stock which is measured at a single point in time
C.
It only applies to liquid assets such as cash and bank deposits
D.
It can only be measured once in a country's entire history
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ANSWER :
B. It is measured over a period of time (such as a year), unlike a stock which is measured at a single point in time
3.
Gross Domestic Product (GDP) is defined as:
A.
The total value of goods and services produced by a country's residents, whether located inside or outside the country
B.
The total market value of all final goods and services produced within the geographical boundaries of a country during a given period, regardless of who owns the factors of production
C.
The total profit earned by a country's largest companies in a year
D.
The total value of a country's exports during a year
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ANSWER :
B. The total market value of all final goods and services produced within the geographical boundaries of a country during a given period, regardless of who owns the factors of production
4.
Only the value of 'final' goods and services (not intermediate goods) is included when calculating national income mainly because:
A.
Final goods are exempt from taxation, unlike intermediate goods
B.
Intermediate goods are always more expensive than final goods
C.
Including intermediate goods as well would lead to double counting, since their value is already embedded within the value of the final goods they help produce
D.
Intermediate goods are not legally allowed to be sold in any country
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ANSWER :
C. Including intermediate goods as well would lead to double counting, since their value is already embedded within the value of the final goods they help produce
5.
Gross National Product (GNP) is defined as:
A.
The total market value of all final goods and services produced by the normal residents of a country, whether located within the country or abroad, during a given period
B.
The total value of goods and services produced strictly within a country's domestic territory only
C.
The value of a country's gold and foreign exchange reserves
D.
The total taxes collected by a country's government in a year
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ANSWER :
A. The total market value of all final goods and services produced by the normal residents of a country, whether located within the country or abroad, during a given period
6.
Net National Product (NNP) is defined as:
A.
Gross National Product (GNP) plus depreciation
B.
Gross Domestic Product (GDP) minus exports
C.
Gross National Product (GNP) plus net indirect taxes only
D.
Gross National Product (GNP) minus depreciation (the consumption of fixed capital during the period)
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ANSWER :
D. Gross National Product (GNP) minus depreciation (the consumption of fixed capital during the period)