A level National Income Quiz 1

16 Questions

Quiz Description

In this quiz, we shall look at national income. The study of national income in economics has to deal with Gross Domestic Product (GDP), Gross National Product (GNP), and the Net Domestic Product (NDP), among others. We will focus more on the explanation and understanding of these three terms throughout the quiz.

National income generally refers to the value of the goods and services produced by a nation or country during a financial year. Hence, it is the net results of all the economic activities of a nation during a period of 1 year, and it’s evaluated in terms of money. In the introduction, we made mention of GDP, GNP, and NDP. GDP, in other words, refers to the financial measure of the market value of the goods and services produced at a particular time. On the other hand, GNP refers to the total value of goods and services produced by citizens of a country in a given financial year,  irrespective of their situation (or location). Finally, NDP is obtained by: NDP = GDP - Depreciation, and it is defined as an annual measure of the economic output of a country that is adjusted to consider depreciation.

Do you have what it takes to correctly answer all the questions in this quiz? Let’s find out. More economics quizzes await you. Good luck as you practice. 

1:

 The difference between value of output and value added is: 


Correct
  • 1:
    Depreciation
  • 2:
    Intermediate consumption
  • 3:
    Net indirect taxes
  • 4:
    NFIA
2:

 Product method of calculating national income is also known as: 


Correct
  • 1:
    Income method
  • 2:
    Value added method
  • 3:
    Expenditure method
  • 4:
    Distribution method
3:

 Transfer payments refer to payments, which are made: 


Correct
  • 1:
    Without any exchange of goods and services
  • 2:
    To workers on transfer from one job to another
  • 3:
    As compensation to employees
  • 4:
    None
4:

 National Income differs from Net National Product at market price by the amount of: 


Correct
  • 1:
    Current transfers from rest of the world
  • 2:
    Net Indirect Taxes
  • 3:
    National debt interest
  • 4:
    it does not differ
5:

  GDPMP = GDP + ________ : 


Correct
  • 1:
    Depreciation
  • 2:
    Indirect taxes
  • 3:
    NFIA
  • 4:
    Subsidies
6:

 National Income doesn’t include: 


Correct
  • 1:
    Interest on unproductive national debt
  • 2:
    Income for government expenditure
  • 3:
    The payments by the household to firm for the purchase of goods and services
  • 4:
    Undistributed profit
7:

 Net national product at factor cost is also known as: 


Correct
  • 1:
    Net Domestic product
  • 2:
    Gross National product
  • 3:
    National Income
  • 4:
    Personal Income
8:

 In GNP calculation which of the following should be excluded? 


Correct
  • 1:
    Rental incomes
  • 2:
    Interest payments
  • 3:
    Dividends
  • 4:
    Government transfer payment
9:

 If GNP at market prices is Rs 1200 crore, and fixed capital stock is worth Rs 2000 crore which depreciates at the rate of 10% per annum and the net indirect taxes amount is Rs 150 crore. What is the national income? 


Correct
  • 1:
    Rs 3050 crore
  • 2:
    Rs 1000 crore
  • 3:
    Rs 2850 crore
  • 4:
    Rs 850 crore
10:

 National income differs from the net national product at market prices by the amount of: 


Correct
  • 1:
    Current transfers from rest of the world
  • 2:
    It does not differ
  • 3:
    National debt interest
  • 4:
    Net indirect taxes
11:

  If net factor income from abroad is zero, then: 


Correct
  • 1:
    National product is constant
  • 2:
    National product is zero
  • 3:
    National product is equal to domestic product
  • 4:
    Domestic product is zero
12:

 For the estimation of private income which of the following items has to be added to national income? 


Correct
  • 1:
    Interest on national debt
  • 2:
    Savings of the non-departmental enterprises
  • 3:
    Subsidies
  • 4:
    Income from property accruing to government
13:

  While estimating personal income from national income, which of the following items need to be deducted? 


Correct
  • 1:
    Net indirect taxes
  • 2:
    Direct Taxes paid by households
  • 3:
    Dividends
  • 4:
    Corporate profitstax
14:

 Which of the following has to be added to national income to obtain the net national disposable income? 


Correct
  • 1:
    Income from property and entrepreneurship accruing to Government
  • 2:
    Net current transfers from the rest of the world
  • 3:
    Profits of public enterprises
  • 4:
    Loans from public
15:

 Which of the following is deducted while estimating national income by the value-added method? 


Correct
  • 1:
    Value of goods and services produced for self-consumption
  • 2:
    Imputed rental value of owner-occupied building
  • 3:
    Consumption of capital
  • 4:
    Net factor income from abroad
16:

 The difference between net national product at market prices and net domestic product at market prices is equal to: 


Correct
  • 1:
    Value of exports
  • 2:
    Value of exports minus value of imports
  • 3:
    Net factor income from abroad
  • 4:
    Net current transfers from abroad

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A level National Income Quiz 1
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