National Income

National Income refers to the value of different services and goods produced by a country in a particular year. It is basically the result of all the economic activities occurring in the country throughout the year. Hence, it is valued on the basis of money. 

It can also be said that a country’s national income is the total income gained through economic activities. Furthermore, it is also helpful in gauging the economic progress of a country. Hence, the national income includes interest, wages, rent profit, etc. 

Also, these are received by the production factors such as capital, land, labour, business development, etc. Along with that, there are various types of concepts to understand National Income. These concepts are NNP, GDP, PI, PCI, DI, etc. 

1. Select the right option which is used for measuring the National Income

1. 1. Income Method
   2. Product Method
   3. Expenditure Method
   4. All of the Above

Answer D. All of the Above

2. Which organisation is accountable for calculating the Gross Domestic Product of India? 

1. 1. Indian Statistical Institute
   2. Reserve Bank of India
   3. National Statistical Office
   4. Ministry of Commerce and Industry 

Answer C. National Statistical Office

3. What is Gross Domestic Product? 

1. 1. The total value of the non-monetary and monetary services and goods within a year
   2. The total value of the economic transactions that happened in a country for a year
   3. The total value of the tradable goods which are produced in a particular year
   4. None of the above

Answer D. None of the above

4. Which one of the following options is not an example of indirect tax? 

1. 1. Custom Duty
   2. Estate Duty
   3. Sales Tax
   4. Excise Duty 

Answer B. Estate Duty

5. What happens during inflation? 

1. 1. The value of the money increases
   2. The value of the money remains stable
   3. The value of the money decreases
   4. None of the above

Answer C. The value of the money decreases

6. Who measured the first National Income of India? 

1. 1. Dadabhai Naoroji
   2. William Digboi 
   3. V.K.R.V. Rao
   4. Professor P.C. Mahalanobis

Answer A. Dadabhai Naoroji

7. Which of the following statements describes the National Income? 

1. 1. The budget introduced by the government
   2. It is the total of various income factors
   3. Profit of different units in the public sector
   4. The income gained by the government

Answer B. It is the total of various income factors

8. The short form of ITR associated with Income Tax stands for what? 

1. 1. Income Tax Return
   2. Income Tax Revenue
   3. Income Tax Result
   4. Income tax Receipt

Answer A. Income Tax Return

9. From which sector does India receives the highest share of GDP? 

1. 1. Construction, Gas, Manufacturing, and Electricity
   2. Allied and Agriculture
   3. Service Sector
   4. Public and Defence Administration

Answer C. Service Sector

10. The term transfer payments, which are referred to as payments, are made

1. 1. As the compensation to the employees
   2. Without the exchange of services and goods
   3. For workers, upon the transfer from one job to a new one
   4. None of the above

Answer B. Without the exchange of services and goods

11. GDP in addition with NFIA equals to _______?

1. 1. Subsidies
   2. Depreciation
   3. Indirect Taxes
   4. NFIA

Answer D. NFIA

12. The following statement is not included in National Income

1. 1. Undistributed profit
   2. Interest upon the national debt (unproductive)
   3. Income of government expenditure
   4. Payments made by households to various firms for purchasing their services and goods

Answer B. Interest upon the national debt (unproductive)

13. As a factor of cost, what is the other name of the net national product? 

1. 1. Personal income
   2. National income
   3. Net Domestic Product
   4. Gross National Product 

Answer B. National Income

14. Which of the following should you not include for the calculation of GNP? 

1. 1. Interest payments
   2. Rental Incomes
   3. Transfer payments of governments
   4. Dividends

Answer C. Transfer payments of governments

15. Who is known as the father of the Green revolution? 

1. 1. Lal Bahadur Shastri 
   2. Dr. B. R. Ambedkar
   3. Manmohan Singh 
   4. MS Swaminathan

Answer D. MS Swaminathan

16. What is the use of the Gini coefficient? 

1. 1. To measure the difference between loss and profit 
   2. To measure the inequality of income
   3. For measuring the income distribution
   4. For measuring the equality of income

Answer A. To measure the inequality of income

17. Which of the following statements define a close economy? 

1. 1. Only exports are taking place
   2. No export or import is happening
   3. Deficit financing happens
   4. Only exports are occurring

Answer B. No export or import is happening

18. Which theory for industrial relations signifies the “concept of surplus labour?”

1. 1. Unitary Approach 
   2. Marxist Approach 
   3. Gandhian Approach 
   4. Pluralist Approach 

Answer B. Marxist Approach

19. On which basis the National Income of India is calculated? 

1. 1. WTO rate
   2. Market Costs
   3. Fixed Costs
   4. Factor costs

Answer D. Factor costs

20. Which of the following term is opposite to Inflation? 

1. 1. Deflation
   2. Hyperinflation
   3. Deflation 
   4. Stagflation

Answer A. Deflation

21. The tax on Goods and Services helped India to emerge as a _______

1. 1. Common market 
   2. Set of different market 
   3. North and South market 
   4. West and East Market 

Answer A. Common market

22. What is why the intermediate goods are not included in the National Income? 

1. 1. Intermediate goods are not reliable 
   2. For the prevention of double accounting
   3. Decreases the income
   4. All of the above

Answer B. For the prevention of double accounting

23. Which among the following things are not included while measuring the GDP? 

1. 1. Leisure value and illegal activities
   2. Financial transactions
   3. Transferring of used goods, non-market services, and goods
   4. All of the above

Answer D. All of the above

24. Who was the first to attempt the Accounting of National Income? 

1. 1. Gregory King 
   2. Prof. D.R. Gadgil
   3. J.M. Keynes
   4. Simon Kuznets

Answer A. Gregory King

25. The increase in the stock of the capital is also called 

1. 1. Capital profit 
   2. Capital formation
   3. Capital loss
   4. None of the above

Answer B. Capital formation

26. Which one of the following is considered under the four-sector model? 

1. 1. Foreign, Government, Firm, and Family Sector
   2. Industry, Firm, Family
   3. Government, Family, Firm 
   4. None of these

Answer A. Foreign, Government, Firm, and Family Sector

27. Which one of the following options is not considered as flow? 

1. 1. Depreciation
   2. Investment 
   3. Income
   4. Capital 

Answer D. Capital 

28. Which one of the following options is not included in the National Income? 

1. 1. Wage, rent, salary 
   2. Interest, wage, rent
   3. Profit, interest, rent, wage
   4. Rent, profit, interest
   5. Profit, salary, interest, wage

Answer C. Profit, interest, rent, wage

29. Which one of the following is also included in the National Income? 

1. Sale proceedings of bonds and shares
2. Black Money 
3. Transfer Earnings
4. None of these

Answer D. None of these

30. Which one of the following is considered under the primary sector? 

1. 1. Forest 
   2. Mines
   3. Land
   4. All of the above

Answer D. All of the above

31. How many sectors are production enterprises divided? 

1. 1. Two sectors
   2. Four sectors
   3. Three sectors
   4. Five sectors

Answer C. Three sectors

32. Which of the following options should not be included in the calculation of GNP? 

1. 1. Interest payments
   2. Government transfer payment
   3. Dividends
   4. Rental incomes

Answer B. Government transfer payment

33. What are the formation causes of net capital?

1. 1. Increase in the cost
   2. Increase in the production capacity
   3. Increase in the profits
   4. None of the above

Answer B. Increase in the production capacity

34. Which one of the following options is the example of semi-durable goods? 

1. 1. Petrol
   2. Milk
   3. Radio
   4. Clothes

Answer D. Clothes 

35. Which of the following causes unexpected obsolescence? 

1. 1. Change in technology 
   2. Change in demand
   3. Natural calamities
   4. None of these

Answer C. Natural calamities

36. Which of the following options causes depreciation? 

1. 1. Damages causing due to floods
   2. Normal wear and tear
   3. Destruction due to market crash
   4. None of the above

Answer B. Normal wear and tear

37. Which of the following options is true? 

1. 1. Disposable Income= Savings in the Household Sector – Total consumption of the Household Sector
   2. GNP of Factor Cost = Net Indirect Tax + GNP at Market Price
   3. National Income = NDP of Factor Cost – Abroad Net Factor Income
   4. Personal Income = Total Private Income  – Corporate Savings – Corporate Tax

Answer D. Personal Income = Total Private Income – Corporate Savings – Corporate Tax

38. Which of the following statements is true? 

1. 1. National Income is correctly estimated
   2. National Income is overestimated
   3. National Income is underestimated
   4. None of the above

Answer C. National Income is underestimated