MULTIPLE CHOICE QUESTIONS
1. _____________ refers to net market value of all the final goods and services produced
within the domestic territory of the country during a period of one year.
(a) GDP MP
(b) GNP MP
(c) NDP MP
(d) NNP MP
2. The GDP deflator measures the _____________ level of prices relative to the level of prices
in the _____________ year.
(a) base, current
(b) current, base
(c) base, base
(d) current, current
3. What is Real GDP if Nominal GDP is 1150 Units and GDP Deflator is 143.75?
(a) 800
(b) 1,653.125
(c) 12.5
(d) None of these
4. If the GDP deflator is greater than 100, then -
(a) Nominal GDP = Real GDP
(b) Nominal GDP > Real GDP
(c) Nominal GDP < Real GDP
(d) Nominal GDP ≥ Real GDP
5. The nominal GDP of a Country in the base year is given at ₹ 600 crores. In the Current year,
the nominal GDP increases to ₹ 1200 crores and price index rises to 110. What will be GDP
Deflator in Current Year?
(a) 100
(b) 110
(c) 120
(d) None of these
6. Gross National Product at market prices GNPMP is:
(a) GDPMP + Net Factor Income from Abroad
(b) GDPMP – Net Factor Income from MP Abroad
(c) GDPMP – Depreciation
(d) GDPMP + Net Indirect Taxes
7. Mixed income of the self- employed means:
(a) Net profits received by self- employed people
(b) Outside wages received by self- employed people
(c) Combined factor payments which are not distinguishable
(d) Wages due to non-economic activities
8. If net factor income from abroad is positive, then:
(a) national income will be greater than domestic factor incomes.
(b) national income will be less than domestic factor incomes.
(c) net exports will be negative
(d) domestic factor incomes will be greater than national income
9. _____________ is Gross Domestic Product (GDP) plus net factor income from abroad.
(a) Net domestic product
(b) Gross national product
(c) Net national product
(d) Gross domestic product
10. The value of NDP at FC will be _____________,if the following information is given:-
GNP at MP : ₹15,000
Depreciation : ₹1,000
NFIA : ₹800
Net Indirect Taxes : ₹1,500
(a) ₹ 11,700
(b) ₹ 16,000
(c) ₹ 16,800
(d) None of these
11.
Private Income : ₹10,000
Undistributed Corporate Profits : ₹2,000
Profit Taxes : ₹500
What is Personal Income?
(a) ₹ 7,500
(b) ₹ 8,000
(c) ₹ 8,500
(d) ₹ 10,000
12. What is the relationship of Disposable Personal Income (DI) and Personal Income (PI)?
(a) DI = PI + Personal Income Taxes + Non-Tax Payments
(b) DI = PI-Personal Income Taxes + Non-Tax Payments
(c) DI = PI - Personal Income Taxes - Non-Tax Payments
(d) None of the above
13. Consider the following data:
Particulars ₹ in Crores
Compensation of Employees 1,200
Operating Surplus 2,400
Consumption of fixed capital 480
Mixed income of Self employed 1,320
Net Indirect Tax 540
Rent 660
Profit 960
Net factor Income from abroad - 60
Which of the following is incorrect?
(a) GDP at MP = ₹ 5,940 Crores.
(b) GNP at MP = ₹ 5,880 Crores.
(c) NNP at MP = ₹ 5,400 Crores.
(d) NNP at FC = ₹ 5,940 Crores.
14. GNPFC is equal to NNPFC When:
(a) Net factor income from abroad is zero
(b) Net Indirect tax is zero
(c) Consumption of Fixed Capital is zero
(d) None of the above
15. Real flow refers to the flow of factor services from _____________
(a) firms to households.
(b) households to firms
(c) firms to Government
(d) Household to Government
16. Which of the following is included in Real Flow?
(a) Flow of services
(b) Flow of Goods
(c) Both (a) and (b)
(d) Neither (a) not (b)
17. Which of the following method gives highest value of National Income?
(a) Value Added Method
(b) Expenditure Method
(c) Income Method
(d) All the three methods given the same value
18. What is the value of output on the basis of following information?
Sales : ₹40,000 Lakhs
Closing Stock : ₹2,000 Lakhs
Opening Stock : ₹500 Lakhs
(a) ₹42,500 Lakhs
(b) ₹42,000 Lakhs
(c) ₹41,500 Lakhs
(d) ₹ 38,500 Lakhs
19. If GDP at Market Prices is INR 200 Cr. and Net Income from Abroad is INR 100 Cr., then
what will be the value of GNP at Market Prices?
(a) INR 100 Cr.
(b) INR 400 Cr.
(c) INR 300 Cr.
(d) INR 500 Cr.
20. When factors incomes of all the sectors are summed up, the result is called as
_____________
(a) NNPFC
(b) NDPFC
(c) NDPMP
(d) None of these
21. The formula to compute Net National Product at Factor Cost is:
(a) NNP at Market Prices + Indirect Taxes + Subsidies
(b) NNP at Market Prices – Indirect Taxes - Subsidies
(c) NNP at Market Prices – Indirect Taxes + Subsidies
(d) NNP at Market Prices – Subsidies
22. Which of the following is included in the national income?
(a) Expenditure an intermediate goods
(b) Transfer Payments
(c) Expenditure on own account production
(d) Purchase of financial assets
23. In 1936, who published the masterpiece "The General Theory of Employment, Interest and
Money"?
(a) John Maynard Keynes
(b) John Milton Keynes
(c) Jean Maynard Keynes
(d) Jean Milton Keynes
24. Which of the following is the correct expression of the Short-run aggregate demand
function?
(a) AD = C + I
(b) AD = ̅C + I
(c) AD = C + I̅
(d) AD = ̅C + I̅
25. Which of the following is NOT TRUE about AD in a two-sector economy?
(a) AD = Consumption + Saving
(b) AD = Consumption + Investment
(c) AD = Curve has a positive Slope
(d) AD = Curve Starts from same point about origin
26. If 30% of income is not spent on consumption, then what will be the Average propensity to
consume?
(a) 30%
(b) 70%
(c) 130%
(d) None of these
27. An increase in investment by 1000 Crores leads to increase in national income by₹2500
Crore. What will be Marginal Propensity to Consume (MPC)?
(a) 2.5
(b) 0.6
(c) 0.4
(d) 0.4
28. In an economy, the entire increase in income is spent on consumption. What will be the
value of multiplier?
(a) 0
(b) 1
(c) Infinity (∞)
(d) -1
29. The expenditure phase of circular flow of income is related with _____________.
(a) Generation of Income
(b) Distribution of Income
(c) Disposition of Income
(d) Production of Income
30. Under Value Added Method, the sum total of Gross Value Added at market price of each
sector is called as:
(a) GVAMP
(b) GDPMP
(c) GVAFC
(d) GDPFC
31. Which of the following enters into the calculation of national income?
(a) The value of the services that accompany the sale
(b) Additions to inventory stocks of final goods and materials
(c) Stocks and bonds sold during
(d) (a) and (b) above
32. Consider the following data:
Particulars ₹ in Crores
Sales 1,050
Opening Stock 750
Intermediate Consumption 525
Closing Stock 600
Net factor Income from Abroad 45
Depreciation 225
Excise Tax 165
Subsidies 75
What is the amount of National Income by value Added method?
(a) ₹ 900 Crores
(b) ₹ 375 Crores
(c) ₹ 105 Crores
(d) None of these
33. If APS and Y are 0.375 and 1800, then what will be the value of C?
(a) 375
(b) 675
(c) 1,125
(d) 1,425
34. Under equation 𝐂 = 𝐚 + 𝐛𝐲, 𝐛 = 𝟎. 𝟖, what is the value of 2 sector expenditure multiplier?
(a) 4
(b) 2
(c) 5
(d) 1
35. In the four sector model, which of the following additional flow is considered as compared
with three sector model?
(a) Exports
(b) Imports
(c) Net Capital Inflow
(d) All of the above