Economics class 12 Method of Calculating National Income

1. Household inventory is ;

Not included in national income

A stock concept

Both a and b

None of these

2. Remittances from a relative working abroad are ;

Included in national income

Not included in national income

Transfer payments

Both b and c

3. Own account production of goods in included in national income because ;

Goods are tangible

Their valuation is possible

Goods are more productive than services

None of these

4. Value added refers to ;

Production of durable goods

Output intermediate consumption

Production of non durable goods

Expenditure on intermediate goods

5. Gross domestic capital formation is the sum total of ;

Expenditure on fixed assets

Gross domestic fixed capital formation and change in stock

Net domestic fixed capital formation + inventory investment + depreciation

Both a and c

6. Value added method measure the contribution of which of the following within the domestic territory of country ?

Household consumers

The producing enterprises owned by residents of the country

The producing enterprise owned by the non resident of the country

Both b and c

7. Which of the following items is not included while estimating national income by income method ?

Rent

Mixed income

Fixed investment

Undistributed profits

8. Which of the following is not an element of final consumption expenditure ?

Household expenditure on food

Govt final consumption expenditure

Household expenditure on education

Expenditure on raw material

9. As a result of double counting national income is ;

Over estimated

Under estimated

Correctly estimated

Not estimated for the entire year of accounting

10. Which of the following is not included in national income ?

Receipt of a gift cheque sent by your parents settled abroad

Repatriation of wages earned by the NRIs to their parents in India

Excise duty on domestic production

All of these

11. Which of the following is not a transfer payment ?

Interest on national debt

Retirement pension

Old age pensions

Donation

12. Which of the following items is not included while estimating GNP of a country at market price ?

Sales of the enterprise

Indirect taxes

Remittances by NRIs

Subsidy

13. Own account production of services is not included in national income because ;

Services are different from goods

Services are not productive

It is difficult to measure market value of such services

None of these

14. Difference between closing stock and opening stock during an accounting year is known as ;

Increase in stock

Change in stock

Decrease in stock

None of these

15. Compensation of employees includes ;

Wages and salary in cash

wages and salaries in kind

Pension on retirement

All of these

16. Operating surplus =

Rent + profit + interest

Rent + interest + compensation of employees

NDPfc – compensation of employees – mixed income of self employees

Both a and c

17. Which of the following is not included in inventory investment ?

Change in stock of finishing goods

Change in stock of semi finished goods

Change in stock of raw material

Change in sales during the year

18. Which of the following is not a part of final expenditure ?

Costumers goods purchased by the govt

Consumer goods exported to rest of the world

Seeds purchased by the farmers

Govt fixed investment expenditure

19. Problem of double counting can be avoided by using ;

Final output method

Value added method

Both b and a

Neither a nor b

20. Which of the following is irrelevant in the estimation of compensation of employees ?

Free accommodation provided to the school principles

Free education of the students whose parents are working in schools

Wages and salaries in cash

Old age pensions

Question 1 of 20

Economics class 12 Method of Calculating National Income

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