Economic Growth and National Income CDS Questions

CDS Economy

Economic Growth and National Income MCQ Questions


7.
Intermediate goods are excluded while calculating national income mainly to avoid:
A.
Inflationary pressure
B.
Tax evasion
C.
The problem of double counting
D.
Underestimation of GDP
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ANSWER :
C. The problem of double counting
8.
In the income method, national income is the sum of:
A.
Wages, rent, interest and profit
B.
Value of all final goods produced
C.
Exports minus imports
D.
Consumption, investment, government spending and net exports
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ANSWER :
A. Wages, rent, interest and profit
9.
The expenditure method measures GDP as:
A.
C + I + G + (X - M)
B.
Sum of value added of all firms
C.
GNP minus depreciation
D.
W + P + In + R
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ANSWER :
A. C + I + G + (X - M)
10.
In the circular flow of income in a simple two-sector economy, the aggregate income measured at points A (expenditure), B (product) and C (income) will be:
A.
Equal at all three points
B.
Highest at the expenditure point
C.
Lowest at the income point
D.
Different at each point
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ANSWER :
A. Equal at all three points
11.
Which of the following is a 'flow' variable?
A.
National income
B.
Wealth
C.
Capital stock
D.
Money supply on a given date
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ANSWER :
A. National income
12.
Which of the following is a 'stock' variable?
A.
Income
B.
Investment
C.
Capital
D.
Depreciation
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ANSWER :
C. Capital