VP COMMERCE ACADEMY
ASSIGNMENT OF NATIONAL INCOME
Q1. Assertion (A): Macroeconomics is essential for government policy making.
Reason (R): It provides data on individual preferences.
A. Both Assertion and Reason are true and Reason is the correct explanation.
B. Both Assertion and Reason are true but Reason is not the correct explanation.
C. Assertion is true but Reason is false. D. Assertion is false but Reason is true.
Q2. Assertion: The value-added method takes into account the value of only final goods and services.
Reason: Intermediate goods are not included in the calculation of national income using the value-added method.
Which of the following options is correct?
A. Both Assertion and Reason are true and Reason is the correct explanation.
B. Both Assertion and Reason are true but Reason is not the correct explanation.
C. Assertion is true but Reason is false.
D. Assertion is false but Reason is true
Q3. Assertion (A): Net investment is a better indicator of economic growth than gross investment.
Reason (R): Net investment considers depreciation, showing the actual increase in productive assets.
A. Both Assertion and Reason are true and Reason is the correct explanation.
B. Both Assertion and Reason are true but Reason is not the correct explanation.
C. Assertion is true but Reason is false.
D. Assertion is false but Reason is true.
Q4. Macroeconomics does not consider international trade.(True/False)
Q5. Statement 1. Real GDP is better indicator of economic growth than nominal GDP.
Statement.2. Real GDP eliminates the change in prices.
(a) Both statement(A) and (R) are true and( R )is correct explanation of (A).
(b) Both statement ( A) and (R) is true but R is not correct explanation of (A)
(c) Statement A is true but R is false.
(d) Statement (A ) is false but (R) is true.
Q6. Identify, which of the following is not considered as 'Normal Resident of India? (1)
(A) An Indian citizen working in U.S.A. embassy located at New Delhi.
(B) An Indian officials working in Indian embassy in China.
(C) An Indian diplomats visiting Canada for a summit.
(D) An Indian working in an American Company located in New York for a period of more than one year
Q7. Suppose the Gross Domestic Product (GDP) of Nation X was Rs. 2,000 crores in 2018-19, whereas the
Gross Domestic Product of Nation Y in the same year was Rs. 120,000 crores. If the Gross Domestic Product of
Nation X rises to Rs. 4,000 crores in 2019-20 and the Gross Domestic Product of Nation Y rises to Rs. 200,000
crores in 2019-20.
Compare the rate of change of GDP of Nations X and Y, taking 2018-19 as base year
Q8. In response to an economic slowdown, the government of Country X introduced a series of stimulus
measures aimed at increasing national income. These measures included significant tax cuts for individuals and
businesses, increased government spending on public infrastructure projects, and low-interest loans for small
businesses to stimulate investment. As a result of these policies, the country's Gross Domestic Product (GDP)
grew by 4% in the following year, up from 1.5% the previous year. The increase in government expenditure on
infrastructure directly boosted aggregate demand, leading to job creation in construction and related sectors. At
the same time, lower taxes increased household disposable income, encouraging greater consumer spending on
goods and services. However, the country's net exports remained negative as imports of capital goods, such as
machinery for infrastructure, exceeded exports. Despite this, the overall increase in investment and consumption
led to a significant rise in national income. Economists predict that as infrastructure improves and industrial
productivity increases, the country will see long-term growth in exports, further enhancing national income
A) What were the key measures implemented by the government of Country X to boost national income?
B) How did government spending on infrastructure affect national income in the short term?
C) Why did net exports remain negative despite the increase in national income, and what were the main
imports?
Q9. (A) As per a report, India's solar power generation capacity reaches 50 GW in 2024-25. Analyze the likely
impacts of this development on Gross Domestic Product (GDP) and Welfare. (4)
(B). Riya is analyzing the economic performance of her country. She found that the value of all final goods and
services produced within the country during the year was Rs.200 lakh crore. She also found that the value of net
factor income from abroad was Rs.5 lakh crore. Using this information, answer the following:
1. What is the Gross Domestic Product at Market Price (GDPMP) of the country?
2. Calculate the National Income (NNP at Factor Cost).
Q10. How does the value-added method help in calculating national income?
A) By adding up all the incomes earned by individuals
B) By adding up the value of all goods and services produced
C) By adding up the value added at each stage of production
D) By subtracting imports from exports
Q11. Assertion (A): Unemployment is a macroeconomic issue.
Reason (R): It reflects the individual worker's productivity.
A. Both Assertion and Reason are true and Reason is the correct explanation.
B. Both Assertion and Reason are true but Reason is not the correct explanation.
C. Assertion is true but Reason is false.
D. Assertion is false but Reason is true.
Q11. If a country's aggregate expenditure is Rs.10000 crores, and the consumption expenditure is Rs.6000 crores,
investment is Rs.1500 crores, and government spending is Rs.1000 crores, what is the value of net exports? (1)
A) Rs.1500 crores B) Rs.1000 crores C) Rs.500 crores D) Rs.2500 crores
Q12. The expenditure method is useful for calculating national income only in developed economies. (True or
False)
Q13. GDP Deflator = ______ GDP ÷ Real GDP × 100
Q14. What is subtracted from GDP at Market Price to arrive at GDP at Factor Cost?
a) Depreciation
b) Net Exports
c) Net Indirect Taxes
d) Net Factor Income from Abroad
Q16. Will the following be included in the domestic product of india ? Give reasons for your answer
(A) Profits earned by foreign companies in India.
(B) Salaries of Indians working in the Russian Embassy in India
Q17. Read the following report and answer the questions based on it.
New Delhi: un asserting that the “worst is behind us” veteran banker Deepak Parekh on Thursday said that
India’s GDP growth will be in positive territory in the fourth quarter as demand has started picking up in all
sectors. Citing an example, he said during the virtual conference organised by Canada – India based Council. he
said toll collection are back to 88% of pre Covid level, e way bills are increasing and electricity consumption has
stabilized. India is domestic-based economy and demand is set to rise in the future.
a) Do you think higher level of Real GDP always lead to higher availability of goods per person in the domestic
economy? With valid resign
b) Can we say GDP is true indicator of welfare?
c) Real GDP is the index of ___.
Q18. a) ‘Circular flow of income in a two sector economy is based on the axiom that one’s expenditure is other’s
income’. Do you agree with the given statement? Support your answer with valid reasons