Economics MCQ Quiz Hub

1. NI = NE is an:
Equation
Identity
Function
None of these

2. Per capita income is:
Income per worker
Income per head
Income per household
Income per industrial unit

3. If indirect taxes are deducted from NNP and subsidies are added we achieve:
Personal savings
DPI
NI
Per capita income

4. Transfer payments are not included in national income because:
Such payments are made to persons living abroad
Double counting would result
They are illegal
There is no method to account for these

5. To determine the correct level of GNP it is necessary to:
Add up the values of goods and services during one year
Add up all savings
Count all imports
Add up the value of semi finished goods

6. Real national income increases when:
Prices of goods are rising
National savings increase
Quantity of goods and services increases
None of above

7. It is considered as investment:
Construction of a house
Purchase of an old house
Salaries of college professors
Both (a) & (b)

8. It is considered as transfer payments:
Salaries of employees
Bonus of bank employees
Free medical care to officers
Unemployment allowance paid by govt.

9. GNP is always:
Less than NNP
Greater than NNP
Equal to NNP
Any of (a) (b) (c)

10. The four factor payments are:
Money capital salaries and income
Wages rent interest and profits
Money power prices and wealth
Wages interest salaries and income

11. It is transfer payment:
Payment of college tuition
A social security payment
Interest paid for a bank loan
Payment for a leased car

12. It is counted in GDP:
Sale price of an old car
Purchase of 100 shares of PSO
A TV set produced this year but not sold
The leisure people consume

13. If government increases taxes private savings:
Increase
Decrease
Do not change
None of the above

14. If C=200 and I = 40 then Y will equal to:
160
240
200
None of the above

15. Corporate tax is levied on:
Landlords
Municipal corporations
Big companies
Importers

16. If we deduct direct tax from personal income we get:
Net national income
Personal saving
Disposable income
Per capita income

17. The largest part of national income is:
Consumption
Investment
Saving
Transfer payments

18. We measure national income by this method:
Expenditure method
Income method
Product method
All of the above

19. Which statement is true?
NNP = GNP - Depreciation
NNP = NI
NNP = DPI
None of these

20. Transfer payments means:
Bank loans
The payment without work
Tax payments
Payment made to all factors of production

21. Direct taxes are not included in:
NNP
PI
DPI
(a) and (c) of above

22. When National income is estimated by expenditure method we include:
All govt. expenditure
All households expenditure
All expenditure of the business sector
All of the above

23. Which statement is true?
National Expenditure = National income
National Expenditure = National income + National production
National Expenditure = National income + National Taxes
National Expenditure = National income - Taxes

24. Which statement is true?
National Income = National Expenditure - indirect taxes
NI = GNP - NNP
NI = NNP - indirect taxes
NI = PI

25. There are methods of measuring national income:
5
2
1
3

26. It is deducted from GNP to get NNP:
Indirect taxes
Depreciation
Direct taxes
Transfer payments

27. Select the correct statements:
Transfer payments are included in national income
Depreciation allowance is a part of GNP
Taxes are not included in NNP
GDP means Gross Direct Production

28. Which is the largest figure:
NNP
GNP
DPI
PI

29. Which is a flow concept:
Number of my shirts
My monthly income
My total wealth
Money supply

30. To avoid double counting when GDP is estimated economist:
Use GDP deflator
Calculate value added at each stage of production
Use retail prices
Use price only intermediate goods

31. A TV set purchased from a retail store is an example of:
Intermediate good B
Capital goods
Surplus goods
Final goods

32. It is deducted from GNP to find NNP:
Savings
Direct taxes
Depreciation allowance
Subsidies

33. Undistributed profits are considered:
Income earned but not received
Income received but not earned
ncome earned and received
None of the above

34. GNP is:
Total sales in the economy
Total monetary transactions in an economy
Total monetary transactions in an economy
Total monetary transactions in an economy

35. GNP includes:
A loan from a bank
Al loan from one s parents
Gifts and donations
A broker s commission

36. In terms of national income accounts multiple counting refers to:
The addition to GNP of multiple units of a good
Counting currently produced goods more than once
The inclusion in GNP of gross spending and taxes
Counting both goods and services

37. Net Investment is:
Gross Investment minus household Investment
Gross Investment minus govt. Investment
Gross Investment minus capital consumption allowance
None of the above

38. PI is equivalent to:
DPI minus personal taxes
DPI plus unearned receipts
DPI minus income earned but not received
NI plus unearned receipts minus earnings not received (taxes)

39. Market value of all final goods and services produced in a country during a year is definition of:
NI
NNP
GNP
Consumpt

40. Investment spending includes the purchase of:
Stocks
Govt. bonds
Residential construction
All of the above

41. Which of the following would not be included in GNP:
Govt. transfer payments
Payment for construction of state high way
Govt. purchase of an airplane
Salary paid for the presidents secretary

42. Consumption spending does not include:
Household s purchase of food
Household s purchase of car
Household s payment of rent for an apartment
Household s purchase of stock in any XYZ corporation

43. Net exports are:
Total exports plus total imports
Total exports minus total imports
Total imports minus total exports
Total exports divided by total imports

44. National Income is:
Total income spent in the economy
Sum of disposable personal income and saving
NNP minus the capital consumption allowance
Total income earned in producing the national product

45. Which of the following is not included in personal Income:
Social security benefits
Dividend payments
Undistributd corporate profits
Interest received from saving certificates

46. Traffic fines are:
Part of personal consumption spending
Excluded from national income accounts
Included in NI but not in PI
Included in PI but not in Disposable PI

47. Govt. transfer payment include:
Social security benefits
Welfare benefits
Student scholarships
All of the above

48. Which of the following would increse level of national income?
An increase in taxation
A reduction in government spending
A reduction in consumer spending
An increase in exports

49. National income is a measure of:
The size of government revenue
Payments made to factors of production
Total increase in wages in a year
Total production of goods in a period

50. In calculating national income which one will not be included:
Exports
Undistributed by firms
Wages of a lecturer
Old age pensions

51. In circular flow model
Households own the resources
There are never international transactions
Household income is limited to wages and salaries
Financial markets ensure that the federal govt. s budget is balanced annually

52. A country is poor if it has:
Less production of goods per capita
Less amount of gold
Less amount of foreign currency
Less exports

53. A country is poor if it has:
Less amount of gold
Less amount of local currency
Less amount of foreign currency
Less GNP per capita

54. It is transfer payment:
Bus fare
College fee
Pension
Salary

55. They have a functional relation
Consumption and national income
Consumption and saving
Consumption and investment
All of the above

56. This is NOT a method of measure national income:
By adding all incomes
By adding all expenditure
By adding money value of all production
By adding all money supply in the country

57. Gross national product includes:
A loan from one s parents
A loan from a domestic bank
A loan from other countries
None of the above

58. It is considered as investment in national accounting:
Construction of a house
Purchase of a running hotel
Purchase of a new shirt
Increase in salaries of professors

59. It is considered as transfer payment:
Salary of an employee
Bouus paid to bank employees
Payment of house rent
Unemployment allowance paid by govt.

60. GNP is always:
Less than NNP
Greater than NNP
Equal to NNP
Greater in many years but less in others

61. The four factor payments are:
Money capital salaries and income
Wages rent interest and profits
Money power prices and wealth
Wages interest salaries and income

62. Macroeconomics is concerned with:
Aggregate economic activity
Spending decisions of households
How to produce goods
How to but stocks and bonds

63. Which of the following is not macroeconomics:
Inflation
Unemployment
The level of output in the economy
Level of wages in garment industry

64. A closed economy is best described as one in which:
There are no monopolies
No corporations
No externalities
No international trade

65. In economics one or more persons living in a joint family are called a:
Business firm
Social gathering
Super family
Household