National Income & Growth

Q1. Which of the following is NOT included while calculating GDP at market price by the expenditure method?

A. Private final consumption expenditure B. Government final consumption expenditure C. Transfer payments by government D. Gross fixed capital formation

Q2. Real GDP is preferred over Nominal GDP as a measure of economic growth because:

A. It includes only goods and not services B. It is adjusted for changes in the general price level C. It is always higher than nominal GDP D. It excludes net exports

Q3. In the context of national income accounting in India, GVA at basic prices is equal to:

A. GDP at market prices minus net indirect taxes B. GDP at factor cost plus net indirect taxes C. GDP at market prices plus subsidies D. NNP at factor cost

Q4. Which of the following identities is correct?

A. GNP = GDP + Net Factor Income from Abroad B. GDP = GNP + Net Factor Income from Abroad C. NNP = GNP + Depreciation D. NDP = GDP + Depreciation

Q5. The concept of 'Green GDP' adjusts conventional GDP for:

A. Only renewable energy production B. Environmental degradation and resource depletion C. Income of the informal sector D. Black money transactions

Q6. If the GDP deflator is 125 and Nominal GDP is ₹5000 crore, Real GDP is:

A. ₹4000 crore B. ₹6250 crore C. ₹5000 crore D. ₹3750 crore

Q7. Which sector currently contributes the largest share to India's GVA?

A. Agriculture and allied B. Industry (manufacturing + construction + utilities) C. Services D. Mining and quarrying

Q8. Net National Product (NNP) at factor cost is also known as:

A. National Income B. Personal Income C. Disposable Income D. Domestic Income

Q9. Which of the following is a limitation of GDP as a measure of welfare?

A. It does not account for income distribution B. It includes only marketed goods and services C. It ignores environmental costs D. All of the above

Q10. In the income method of calculating national income, which of the following is included?

A. Transfer payments B. Income from illegal activities C. Compensation of employees + Operating surplus + Mixed income D. Intermediate consumption

Q11. Base year for India's current national accounts series is:

A. 2004-05 B. 2011-12 C. 2017-18 D. 2001-02

Q12. Which of the following statements about 'Potential GDP' is correct?

A. It is the actual GDP of the previous year B. It is the maximum sustainable output an economy can produce without generating inflationary pressure C. It is always equal to Nominal GDP D. It excludes the services sector

Q13. If Net Factor Income from Abroad is negative, then:

A. GDP > GNP B. GNP > GDP C. GDP = GNP D. NNP > GNP

Q14. Personal Disposable Income is equal to:

A. Personal Income minus Direct taxes B. National Income minus Corporate taxes C. GDP minus Depreciation D. NNP at market prices

Q15. The expenditure method of GDP calculation is based on the identity:

A. Y = C + I + G + (X – M) B. Y = C + S C. Y = C + I + G D. Y = Wages + Rent + Interest + Profit

Q16. Which of the following is NOT a component of Gross Fixed Capital Formation?

A. Construction of buildings B. Machinery and equipment C. Change in stocks / inventories D. Cultivated biological resources

Q17. In national income accounting, 'Mixed Income' primarily arises from:

A. Public sector enterprises B. Self-employed and unincorporated enterprises C. Foreign companies D. Agricultural labour only

Q18. Which index is most appropriate to convert Nominal GDP into Real GDP?

A. Consumer Price Index (CPI) B. Wholesale Price Index (WPI) C. GDP Deflator D. Index of Industrial Production

Q19. Economic growth is necessary but not sufficient for economic development because:

A. Growth ignores distribution and human development dimensions B. Development is only about industrialisation C. Growth always reduces poverty automatically D. Development does not require capital formation

Q20. The concept of 'Purchasing Power Parity' (PPP) is used primarily to:

A. Compare living standards across countries by adjusting for price differences B. Calculate the fiscal deficit C. Measure inflation within a country D. Determine the repo rate

Q21. Which of the following is included in India's GDP but not in GNP?

A. Income earned by Indian companies abroad B. Income earned by foreign companies operating in India C. Remittances from NRIs D. Export earnings

Q22. Double counting in national income estimation is avoided by:

A. Including only intermediate goods B. Using the value-added method C. Including transfer payments D. Counting both final and intermediate goods

Q23. In the context of India, which statement is correct regarding the contribution of the unorganised/informal sector?

A. It contributes a negligible share to employment B. It contributes a significant share to employment but a smaller share to GVA C. It is fully captured in GDP estimates D. It has been completely formalised

Q24. National Income is underestimated if we ignore:

A. Black money / parallel economy B. Household services of housewives C. Leisure and environmental quality D. All of the above

Q25. The difference between GDP at market prices and GDP at factor cost is:

A. Depreciation B. Net indirect taxes (Indirect taxes – Subsidies) C. Net factor income from abroad D. Transfer payments

Q26. Which of the following best describes 'Jobless Growth'?

A. High GDP growth with stagnant or declining employment elasticity B. Zero GDP growth with rising unemployment C. Growth only in the services sector D. Growth financed entirely by foreign capital

Q27. In the circular flow of income (two-sector model), which identity holds?

A. Y = C + S and Y = C + I, therefore S = I B. Y = C + I + G C. S + T = I + G D. X = M

Q28. Which of the following is a stock concept?

A. GDP B. National Income C. Wealth / Capital stock D. Exports

Q29. The 'Output gap' is defined as:

A. Actual GDP – Potential GDP B. Nominal GDP – Real GDP C. GDP – GNP D. Exports – Imports

Q30. Which committee's recommendations influenced the shift towards the 2011-12 national accounts series in India?

A. Tendulkar Committee B. High Level Committee on Estimation of Savings and Investment / SNA 2008 alignment C. Rangarajan Committee on Poverty D. Narasimham Committee

Q31. If depreciation exceeds gross investment, then:

A. Net investment is positive B. Net investment is negative (capital stock declines) C. GDP equals NDP D. There is no capital formation

Q32. Which of the following is NOT a method of measuring national income?

A. Product / Value-added method B. Income method C. Expenditure method D. Balance of Payments method

Q33. Per capita income is a better indicator of average living standards than total GDP because:

A. It accounts for population size B. It includes only the rich C. It excludes the services sector D. It is always adjusted for PPP

Q34. In national accounts, 'Consumption of Fixed Capital' refers to:

A. Capital formation B. Depreciation C. Inventory investment D. Foreign direct investment

Q35. Which of the following statements is true about India's GDP estimation?

A. Agriculture's share in GVA has been rising steadily B. Services sector is the largest contributor to GVA C. Manufacturing contributes more than services D. Mining is the largest sector

Q36. The term 'factor cost' means:

A. Market price including all taxes B. Cost of factors of production (excluding net indirect taxes) C. Cost including only subsidies D. International price

Q37. Which of the following would increase measured GDP but may not increase welfare?

A. Increase in production of military equipment after a natural disaster reconstruction B. Increase in pollution-intensive industrial output without abatement C. Both A and B D. Neither A nor B

Q38. Net Domestic Product (NDP) is derived from GDP by:

A. Adding depreciation B. Subtracting depreciation C. Adding NFIA D. Subtracting indirect taxes

Q39. In the context of growth accounting, Total Factor Productivity (TFP) growth measures:

A. Contribution of labour alone B. Contribution of capital alone C. Residual growth not explained by measured inputs of labour and capital D. Only agricultural productivity

Q40. Which of the following is true regarding 'Gross Value Added' (GVA)?

A. GVA = Output – Intermediate consumption B. GVA is always equal to GDP at market prices C. GVA excludes the services sector D. GVA is measured only at factor cost

Q41. A high Incremental Capital-Output Ratio (ICOR) indicates:

A. High efficiency of capital use B. Low efficiency of capital use (more capital needed per unit of output) C. High labour productivity D. Rapid technological progress

Q42. Which of the following is excluded from the calculation of national income?

A. Income of self-employed B. Rent of owner-occupied houses (imputed) C. Sale proceeds of second-hand goods D. Operating surplus of public enterprises

Q43. The relationship 'GDP = C + I + G + (X – M)' is an accounting identity that holds:

A. Only in equilibrium B. Always, by definition of the components C. Only when there is full employment D. Only in a closed economy

Q44. Which measure is most suitable for comparing the productive capacity of two countries?

A. Nominal GDP in USD B. Real GDP at PPP C. Per capita Nominal GDP D. Gold reserves

Q45. In India, the National Statistical Office (NSO) is responsible for:

A. Only price indices B. National accounts, surveys and many statistical products C. Only monetary policy data D. Only balance of payments

Q46. Which of the following correctly describes 'Nominal GDP'?

A. GDP measured at constant prices B. GDP measured at current market prices C. GDP adjusted for environmental costs D. GDP excluding net exports

Q47. If an economy experiences a rise in Real GDP but a fall in Real GDP per capita, it implies:

A. Population growth exceeded output growth B. Output growth exceeded population growth C. Prices fell sharply D. Exports collapsed

Q48. The term 'intermediate consumption' refers to:

A. Final goods purchased by households B. Goods and services used up in the process of production C. Capital goods D. Exports

Q49. Which of the following statements about 'National Disposable Income' is correct?

A. It is equal to NNP at market prices + Net current transfers from rest of the world B. It is equal to GDP at factor cost C. It excludes remittances D. It is the same as Personal Disposable Income

Q50. Why is the informal sector's contribution often under-estimated in national accounts?

A. Lack of regular data and under-reporting of activities B. It produces only non-marketed goods C. It is deliberately excluded by law D. It has zero value addition

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