50 important questions on National Income

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MODEL SET’2

(National Income)

1. One of the problems in calculating the national income in India correctly is (Railways, 1994)

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(a) Under employment

(b) Inflation

(c) Non monetized consumption

(d) Low savings

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2. The maximum income level per month of a household to be called below the poverty line in India is

(a) Rs. 300 (b) Rs. 600

(c) Rs. 500 (d) Rs. 750

3. The main source of India’s national income is (RC.S. 1994, Assistant’s Grade, 1991)

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(a) Industry (b) Agriculture

(c) Forestry (d) None of these

4. National income of India is compiled by

(a) Finance Commission

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(b) Indian Statistical Institute

(c) National Development Council

(d) Central Statistical Organization

5. The National Council of Applied Economic Research has revised the macroeconomic forecasts for 2002-03 and placed the overall real GDP growth at what per cent against its earlier estimate of 5.5%?

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(a) 5.2 percent (b) 5.0 percent

(c) 4.8 percent (d) 4.5 percent

6. As per the 1999-2000 Budget estimates which tax was estimated to yield the maximum revenue? (R.R.B. 2001)

(a) Corporate Tax (b) Customs Duty

(c) Excise Duty (d) Income Tax

7. National income is based on the

(a) Total revenue of the State

(b) Production of goods and services

(c) Net profit earned and expenditure made by the State

(d) The sum of all factor incomes

8. If saving exceeds investment, the national income will

(a) Fall (b) Rise

(c) Fluctuate (d) Remain constant

9. as per the Government estimates, approximately how many persons are living below the poverty line in rural areas (in millions)?

(a) 130 (b) 140

(c) 150 (d) 190

(e) 250

10. Which of the following are the main causes of slow rate of growth of per capita income in India?

1. High capital output ratio

2. High rate of growth of population

3. High rate of capital formation

4. High level of fiscal deficits

(a) 1 & 2 (b) 2, 3 & 4

(c) 1 & 4 (d) 1, 2, 3 & 4

11. Among Indian Economists who had done pioneering work on National Income? (Stenographers’ Exam, 1994)

(a) P. N. Dhar (b) Jagdish Bhagwati

(c) V. K. R. V. Rao (d) Prof. Shenoi

12. The National Income is more at current prices than at constant prices because. (C.D.S. 1992)

(a) Increase in price is equal to increase in production

(b) Increase in price is more than production

(c) Increase in production is more than increase in price

(d) Of decrease in production only.

13. Which state has the maximum number of people living below the poverty line? (Stenographer’s Exam, 1994)

(a) Bihar (b) Madhya Pradesh

(c) Maharashtra (d) Uttar Pradesh

14. Which of the following are the main sources of state finances? (S.C.RA. Exam. 1996)

(a) General Sales Tax

(b) Share in the Central Taxes

(c) Grants-in-Aid from the Central Government

(d) Land Revenues

Select the correct answer using the codes given below:

Codes:

(a) A and D (b) B and D

(c) A, B and C (d) B, C and D

15. The largest share of India’s national income originates in the

(a) Primary Sector (b) Secondary Sector

(c) Tertiary Sector (d) None of these

16. Which of the following is not required while computing Gross National Product (GNP)? (Asstt Grade, S2)

(a) Net foreign investment

(b) Private investment

(c) Per capita income of citizens

(d) Purchase of goods by government

17. The term National Income represents (Civil Services, 2001)

(a) Gross National Product at market prices minus depreciation

(b) Gross National Product at market prices minus depreciation plus net factor income from abroad

(c) Gross National Product at market prices minus depreciation and indirect taxes plus subsidies

(d) Gross National Product at market prices minus net factor income from abroad

18. The method by which the CSO estimates the national income is

(a) Income method (b) Expenditure method

(c) Production method (d) A combination of all three

19. The first estimate of national income in India was made by

(a) Mahalanobis (b) V. K. R. V. Rao

(c) Dadabhai Naoroji (d) Shirras

20. The per capita income is obtained by

(a) Summing up the income of all the citizens of the country

(b) Dividing national income by the population

(c) Estimating the minimum income of individual citizens

(d) Dividing the total national capital with the profit earned

21. Which of the following is not a method of estimating national income? (I. Tax & Central Excise, 1991)

(a) Income method (b) Value-added method

(c) Expenditure method (d) Export-import method

22. The national income of India is estimated mainly through (C.B.I. 1993)

(a) Production method alone

(b) Expenditure method alone

(c) Production and expenditure methods

(d) Production and income methods

23. The standard of living in a country is represented by its

(a) National income (b) Per capita income

(c) Poverty ratio (d) Unemployment rate

24. The rate of growth of per capita income is equal to

(a) Rate of growth of national income divided by the rate of growth of population.

(b) Growth in national income divided by the increase in population.

(c) Rate of growth of national income minus the rate of growth of population.

(d) Rate of growth of national income.

25. Which of the following serves as an instrument of decision making in a capitalist economy?

(a) Capitalists (b) Consumers

(c) Price mechanism (d) Amount of production

26. Which one of the following States produces about 50 percent of th’ total silk textiles in India? (S.S.C. 2001)

(a) Karnataka (b) West Bengal

(c) Jammu and Kashmir (d) Assam

27. Which is the best measure of economic growth of a country?

(a) GNP (b) GDP

(c) Net revenue (d) none of these

28. National income is the same as

(a) Net Domestic Product at market price

(b) Net Domestic Product at cost factor

(c) Net National Product at market price

(d) Net National Product at factor cost

29. in our country, which of the following affects poverty line the most? I. Tax & Central Excise, 1992)

(a) Level of prices (b) Production quantum

(c) Per capita income (d) Quantum of gold reserve

30. To know whether the rich are getting richer and the poor getting poorer, it is necessary to compare (I.AJS. 1994)

(a) The availability of foodgrains among two sets of people, one rich and the other poor, over different periods of time.

(b) The distribution of income of an identical set of income recipients in different periods of time.

(c) The wholesale price index over different periods of time for different regions.

(d) The distribution of income of different sets of income recipients at a point of time.

31. since 1951, in India

(a) National income has increased but per capita income has decreased

(b) National and per capita incomes have both increased fast

(c) National income has increased and per capita income has also increased but at a slower rate

(d) National income and per capita income have increased every year

32. Dr. V. K. R. V. Rao used the…. method of calculation of national income in India

(a) Income-method (b) Expenditure method

(c) Production-method (d) combined method

33. To know the potential purchasing power of the household sector, we make use of the concept of

(a) National income (b) Personal income

(c) Disposable income (d) Private income

34. Rate of growth of an economy is measured in terms of

(a) Per capita income

(b) Industrial development

(c) Number of people who have been lifted above the poverty

(d) National income

35. Which of the following are the results of low per capita income?

1. Mass poverty

2. Mass unemployment

3. Growing population falls back upon land for earning their livelihood

4. Low agricultural productivity

(a) 1 & 2 (b) 1, 2 & 3

(c) 1 only (d) 1, 2, 3 & 4

36. Which of the following is the basis for determining the national income?

(a) Total revenue of the state.

(b) Net profit earned and expenditure incurred by the state.

(c) Production of goods and services.

(d) All of the above.

37. Which of the following is the most likely reason why total income tends to fluctuate?

(a) People adjust to changing incomes by changing saving habits

(b) Consumption is not always a constant fraction of income

(c) Many savings and investment decisions are taken by different people

(d) Consumption habits often undergo dramatic changes

38. Expenditure on which of the following is not considered investment in the theory of income determination?

(a) Factory construction

(b) A computer

(c) Increases in stocks of unsold goods

(d) Stocks or shares in a joint stock company

39. If the marginal propensity to save of the rich is greater than that of the poor, then a redistribution of income from poor to rich will raise

(a) Neither consumption nor saving out of a given income.

(b) Saving out of a given income.

(c) The average propensity to consume.

(d) Consumption out of a given income.

40. The sum of the marginal propensity to consume and the marginal propensity to save must be equal to

(a) Disposable income (b) One (c) The multiplier (d) Zero

41. Which of the following are referred to as the developed economies?

(a) Countries earning huge industrial profits

(b) Countries proficient in trade and export

(c) Countries having large per capita income

(d) Countries advanced in technology

42. Which of the following statements of relationship of national income (Y), consumption (C) and investment (I), in the famous model of Keynes, ‘ is correct?

(a) Y = C + I (b) Y = C +1

(c) Y = C x I (d) Y = C -1

43. In the Keynes model above, which is independent?

(a) Consumption (b) National income

(c) Investment (d) Both (a) & (c) above

44. the sum total of incomes received for the services of labour, land or capital in a country is called

(a) Gross domestic product (b) National income (c) Gross domestic income (d) Gross national income

45. Equilibrium income is that level at which

(a) The community is spending exactly all of its income on consumption.

(b) The amount which society wishes to spend on investment is equal to the amount of its income which it does not wish to spend on consumption.

(c) Actual saving is equal to actual investment.

(d) Full employment exists.

46. The effect of fall in investment on income is normally.

(a) Less than the fall in investment.

(b) Equal to the fall in investment itself.

(c) Equal to the fall in investment unless savings increase at the same time.

(d) Greater than the fall in investment.

47. If an economy is in equilibrium at the point where plans to save and to invent are equal, then government expenditure must be.

(a) Negative

(b) Zero

(c) Larger than government income

(d) Equal to government income

48. National income has reference to which year?

(a) A calendar year (Jan-Dec)

(b) A U. N. Year (July-June) ft financial year (Apr-Mar)

(d) Any of these

(e) None of these

49. If income is below equilibrium

(a) Investment will tend to fall

(b) Prices will tend to fall

(c) Income will tend to rise

(d) Stocks of unsold goods will tend to increase

50. During which week, India’s foreign exchange reserves crossed the magic figure of $50 billion?

(a) Week ended January 25, 2002

(b) Week ended February 1, 2002 (C) Week ended February 15, 2002 (d) Week ended March 1, 2002)

ANSWERS

1(C)

2.(d)

3. (d)

4. (d)

5.

(c)

6.(c)

7.(d)

8.(d)

9(d)

10. a) 11. (c)

12.(b)

13. (a)

14. (a)

15.

(a)

16. (c)

17. (c)

18.(d)

19. (c)

20. b)

21. (d)

22.(d)

23.(b)

24. (c)

25.

(c)

26. (a)

27. (a)

28.(d)

29. (c)

30.(b) 31. (c)

32-(d)

33. (c)

34.(d)

35.

(d)

36. (c)

37. (c)

38. (d)

39.(b)

40.(b)

42.(b)

43.(b)

44. (b)

45.

(b)

46.(d)

47.(d)

48. (a)

49 . c)

50. b)

41. (c)

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