R4RIN – MCQs, Mock Tests | Economics Economics National Income MCQS Set-1

NI = NE is an:

1. Equation
2. Identity
3. Function
4. None of these

✅ Correct Answer: 2

Per capita income is:

1. Income per worker
2. Income per head
3. Income per household
4. Income per industrial unit

✅ Correct Answer: 2

If indirect taxes are deducted from NNP and subsidies are added we achieve:

1. Personal savings
2. DPI
3. NI
4. Per capita income

✅ Correct Answer: 3

Transfer payments are not included in national income because:

1. Such payments are made to persons living abroad
2. Double counting would result
3. They are illegal
4. There is no method to account for these

✅ Correct Answer: 2

To determine the correct level of GNP it is necessary to:

1. Add up the values of goods and services during one year
2. Add up all savings
3. Count all imports
4. Add up the value of semi finished goods

✅ Correct Answer: 1

Real national income increases when:

1. Prices of goods are rising
2. National savings increase
3. Quantity of goods and services increases
4. None of above

✅ Correct Answer: 3

It is considered as investment:

1. Construction of a house
2. Purchase of an old house
3. Salaries of college professors
4. Both (a) & (b)

✅ Correct Answer: 1

It is considered as transfer payments:

1. Salaries of employees
2. Bonus of bank employees
3. Free medical care to officers
4. Unemployment allowance paid by govt.

✅ Correct Answer: 4

GNP is always:

1. Less than NNP
2. Greater than NNP
3. Equal to NNP
4. Any of (a) (b) (c)

✅ Correct Answer: 2

The four factor payments are:

1. Money capital salaries and income
2. Wages rent interest and profits
3. Money power prices and wealth
4. Wages interest salaries and income

✅ Correct Answer: 2

It is transfer payment:

1. Payment of college tuition
2. A social security payment
3. Interest paid for a bank loan
4. Payment for a leased car

✅ Correct Answer: 2

It is counted in GDP:

1. Sale price of an old car
2. Purchase of 100 shares of PSO
3. A TV set produced this year but not sold
4. The leisure people consume

✅ Correct Answer: 3

If government increases taxes private savings:

1. Increase
2. Decrease
3. Do not change
4. None of the above

✅ Correct Answer: 2

If C=200 and I = 40 then Y will equal to:

1. 160
2. 240
3. 200
4. None of the above

✅ Correct Answer: 2

Corporate tax is levied on:

1. Landlords
2. Municipal corporations
3. Big companies
4. Importers

✅ Correct Answer: 3

If we deduct direct tax from personal income we get:

1. Net national income
2. Personal saving
3. Disposable income
4. Per capita income

✅ Correct Answer: 3

The largest part of national income is:

1. Consumption
2. Investment
3. Saving
4. Transfer payments

✅ Correct Answer: 1

We measure national income by this method:

1. Expenditure method
2. Income method
3. Product method
4. All of the above

✅ Correct Answer: 4

Which statement is true?

1. NNP = GNP - Depreciation
2. NNP = NI
3. NNP = DPI
4. None of these

✅ Correct Answer: 1

Transfer payments means:

1. Bank loans
2. The payment without work
3. Tax payments
4. Payment made to all factors of production

✅ Correct Answer: 2

Direct taxes are not included in:

1. NNP
2. PI
3. DPI
4. (a) and (c) of above

✅ Correct Answer: 3

When National income is estimated by expenditure method we include:

1. All govt. expenditure
2. All households expenditure
3. All expenditure of the business sector
4. All of the above

✅ Correct Answer: 4

Which statement is true?

1. National Expenditure = National income
2. National Expenditure = National income + National production
3. National Expenditure = National income + National Taxes
4. National Expenditure = National income - Taxes

✅ Correct Answer: 1

Which statement is true?

1. National Income = National Expenditure - indirect taxes
2. NI = GNP - NNP
3. NI = NNP - indirect taxes
4. NI = PI

✅ Correct Answer: 3

There are methods of measuring national income:

1. 5
2. 2
3. 1
4. 3

✅ Correct Answer: 4

It is deducted from GNP to get NNP:

1. Indirect taxes
2. Depreciation
3. Direct taxes
4. Transfer payments

✅ Correct Answer: 2

Select the correct statements:

1. Transfer payments are included in national income
2. Depreciation allowance is a part of GNP
3. Taxes are not included in NNP
4. GDP means Gross Direct Production

✅ Correct Answer: 2

Which is the largest figure:

1. NNP
2. GNP
3. DPI
4. PI

✅ Correct Answer: 2

Which is a flow concept:

1. Number of my shirts
2. My monthly income
3. My total wealth
4. Money supply

✅ Correct Answer: 2

To avoid double counting when GDP is estimated economist:

1. Use GDP deflator
2. Calculate value added at each stage of production
3. Use retail prices
4. Use price only intermediate goods

✅ Correct Answer: 2

A TV set purchased from a retail store is an example of:

1. Intermediate good B
2. Capital goods
3. Surplus goods
4. Final goods

✅ Correct Answer: 4

It is deducted from GNP to find NNP:

1. Savings
2. Direct taxes
3. Depreciation allowance
4. Subsidies

✅ Correct Answer: 3

Undistributed profits are considered:

1. Income earned but not received
2. Income received but not earned
3. ncome earned and received
4. None of the above

✅ Correct Answer: 1

GNP is:

1. Total sales in the economy
2. Total monetary transactions in an economy
3. Total monetary transactions in an economy
4. Total monetary transactions in an economy

✅ Correct Answer: 3

GNP includes:

1. A loan from a bank
2. Al loan from one s parents
3. Gifts and donations
4. A broker s commission

✅ Correct Answer: 4

In terms of national income accounts multiple counting refers to:

1. The addition to GNP of multiple units of a good
2. Counting currently produced goods more than once
3. The inclusion in GNP of gross spending and taxes
4. Counting both goods and services

✅ Correct Answer: 2

Net Investment is:

1. Gross Investment minus household Investment
2. Gross Investment minus govt. Investment
3. Gross Investment minus capital consumption allowance
4. None of the above

✅ Correct Answer: 3

PI is equivalent to:

1. DPI minus personal taxes
2. DPI plus unearned receipts
3. DPI minus income earned but not received
4. NI plus unearned receipts minus earnings not received (taxes)

✅ Correct Answer: 4

Market value of all final goods and services produced in a country during a year is definition of:

1. NI
2. NNP
3. GNP
4. Consumpt

✅ Correct Answer: 3

Investment spending includes the purchase of:

1. Stocks
2. Govt. bonds
3. Residential construction
4. All of the above

✅ Correct Answer: 3

Which of the following would not be included in GNP:

1. Govt. transfer payments
2. Payment for construction of state high way
3. Govt. purchase of an airplane
4. Salary paid for the presidents secretary

✅ Correct Answer: 1

Consumption spending does not include:

1. Household s purchase of food
2. Household s purchase of car
3. Household s payment of rent for an apartment
4. Household s purchase of stock in any XYZ corporation

✅ Correct Answer: 4

Net exports are:

1. Total exports plus total imports
2. Total exports minus total imports
3. Total imports minus total exports
4. Total exports divided by total imports

✅ Correct Answer: 2

National Income is:

1. Total income spent in the economy
2. Sum of disposable personal income and saving
3. NNP minus the capital consumption allowance
4. Total income earned in producing the national product

✅ Correct Answer: 4

Which of the following is not included in personal Income:

1. Social security benefits
2. Dividend payments
3. Undistributd corporate profits
4. Interest received from saving certificates

✅ Correct Answer: 3

Traffic fines are:

1. Part of personal consumption spending
2. Excluded from national income accounts
3. Included in NI but not in PI
4. Included in PI but not in Disposable PI

✅ Correct Answer: 4

Govt. transfer payment include:

1. Social security benefits
2. Welfare benefits
3. Student scholarships
4. All of the above

✅ Correct Answer: 4

Which of the following would increse level of national income?

1. An increase in taxation
2. A reduction in government spending
3. A reduction in consumer spending
4. An increase in exports

✅ Correct Answer: 4

National income is a measure of:

1. The size of government revenue
2. Payments made to factors of production
3. Total increase in wages in a year
4. Total production of goods in a period

✅ Correct Answer: 2

In calculating national income which one will not be included:

1. Exports
2. Undistributed by firms
3. Wages of a lecturer
4. Old age pensions

✅ Correct Answer: 3

In circular flow model

1. Households own the resources
2. There are never international transactions
3. Household income is limited to wages and salaries
4. Financial markets ensure that the federal govt. s budget is balanced annually

✅ Correct Answer: 1

A country is poor if it has:

1. Less production of goods per capita
2. Less amount of gold
3. Less amount of foreign currency
4. Less exports

✅ Correct Answer: 1

A country is poor if it has:

1. Less amount of gold
2. Less amount of local currency
3. Less amount of foreign currency
4. Less GNP per capita

✅ Correct Answer: 4

It is transfer payment:

1. Bus fare
2. College fee
3. Pension
4. Salary

✅ Correct Answer: 3

They have a functional relation

1. Consumption and national income
2. Consumption and saving
3. Consumption and investment
4. All of the above

✅ Correct Answer: 1

This is NOT a method of measure national income:

1. By adding all incomes
2. By adding all expenditure
3. By adding money value of all production
4. By adding all money supply in the country

✅ Correct Answer: 4

Gross national product includes:

1. A loan from one s parents
2. A loan from a domestic bank
3. A loan from other countries
4. None of the above

✅ Correct Answer: 4

It is considered as investment in national accounting:

1. Construction of a house
2. Purchase of a running hotel
3. Purchase of a new shirt
4. Increase in salaries of professors

✅ Correct Answer: 1

It is considered as transfer payment:

1. Salary of an employee
2. Bouus paid to bank employees
3. Payment of house rent
4. Unemployment allowance paid by govt.

✅ Correct Answer: 4

GNP is always:

1. Less than NNP
2. Greater than NNP
3. Equal to NNP
4. Greater in many years but less in others

✅ Correct Answer: 2

The four factor payments are:

1. Money capital salaries and income
2. Wages rent interest and profits
3. Money power prices and wealth
4. Wages interest salaries and income

✅ Correct Answer: 2

Macroeconomics is concerned with:

1. Aggregate economic activity
2. Spending decisions of households
3. How to produce goods
4. How to but stocks and bonds

✅ Correct Answer: 1

Which of the following is not macroeconomics:

1. Inflation
2. Unemployment
3. The level of output in the economy
4. Level of wages in garment industry

✅ Correct Answer: 4

A closed economy is best described as one in which:

1. There are no monopolies
2. No corporations
3. No externalities
4. No international trade

✅ Correct Answer: 4

In economics one or more persons living in a joint family are called a:

1. Business firm
2. Social gathering
3. Super family
4. Household

✅ Correct Answer: 4