Methods of Measuring National Income Class 12 MCQ ISC covers certain important topics, which are covered under syllabus for ISCE Class 12 and are coming in Term II examination for the academic year 2022-23. Methods of Measuring National Income Class 12 MCQ Test contains 53 questions. MCQ on Economics Class 12 ISC have been made for Class 12 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.
Methods of Measuring National Income Class 12 MCQ
1. National income can be written as;
(a) Pfc
(b) NNPmp
(c) NNPfc
(d) NDPmp
Answer
Answer: (c) NNPfc
2. Which of the following are the ways to view the national income of a country?
(a) As the flow of goods and services produced
(b) As the flow of income generated
(c) As a flow of expenditure on goods and services.
(d) All of the above
Answer
Answer: (d) All of the above
3. Which of the following are the methods of measuring National income?
(a) Value-added method
(b) Income method
(c) Expenditure method
(d) All of the above
Answer
Answer: (d) All of the above
Methods of Measuring National Income Class 12 MCQ
Value-added method
4. ________ measures national income as the total of net final output produced at factor cost or net value added at factor cost by all the producing units within the domestic territory during a year plus net factor income from abroad.
(a) Net product method
(b) Value-added method
(c) Both (a)&(b)
(d) Income method
Answer
Answer: (c) Both (a)&(b)
5. Net product method measures national income at the production stage. (True/False)
Answer
Answer: True
6. Which of the above are the steps involved in the value-added method?
(a) Identifying production units and classifying
(b) Estimating the net final output or net value added by production units
(c) Estimating net domestic output
(d) All of the above
Answer
Answer: (d) All of the above
7. In the first step, the production units are classified into certain groups known as _______.
(a) Industrial sectors.
(b) Production units
(c) Production sector
(d) Industrial units
Answer
Answer: (a) Industrial sectors.
8. All the production units in an economy are classified into the ____broad industrial sectors based on the nature of the production process.
(a) Two
(b) Three
(c) Four
(d) Five
Answer
Answer: (b) Three
9. The ______ includes all those production units which produce commodities by exploiting natural resources.
(a) Primary sector
(b) Secondary sector
(c) Tertiary sector
(d) All of the above
Answer
Answer: (a) Primary sector
10. Which of the following are primary activities?
(a) Agriculture
(b) Forestry
(c) Mining
(d) All of the above
Answer
Answer: (d) All of the above
11. _____ includes all those production units which produce various products with the help of raw materials produced in the primary sector.
(a) Primary sector
(b) Secondary sector
(c) Tertiary sector
(d) All of the above
Answer
Answer: (b) Secondary sector
12. Tertiary sector provides all types of tangible goods. (True/False)
Answer
Answer: False
13. Calculating the value of final goods only, avoids the problem of;
(a) Double counting
(b) Estimation errors
(c) Income errors
(d) Calculation errors
Answer
Answer: (a) Double counting
14. _____ is the value of a firm’s output minus the value of intermediate goods.
(a) Net product
(b) Value-added
(c) Value subtracted
(d) None of the above
Answer
Answer: (b) Value-added
15. Use of intermediate goods for the production of goods and services is called;
(a) Intermediate goods
(b) Intermediate consumption
(c) Intermediate product
(d) Intermediate method
Answer
Answer: (b) Intermediate consumption
16. Net value added at factor cost is equal to________.
(a) Value of gross output
(b) Minus intermediate consumption and depreciation
(c) Minus Net indirect tax
(d) All of the above
Answer
Answer: (d) All of the above
17. By adding the net value added at factor cost by all the producing enterprises in a sector, we get the ______of that industrial sector.
(a) Net value-added
(b) Net value added at market price
(c) Net value added at factor cost
(d) None of the above
Answer
Answer: (c) Net value added at factor cost
18. The total of net value added at factor cost by all the industrial enterprises in the domestic territory of a country gives the________.
(a) Net Domestic Product at factor cost.
(b) Net domestic product at market price
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (a) Net Domestic Product at factor cost.
19. Which of the following is step four of the value-added method?
(a) Presentation of income
(b) Classification of sectors
(c) Both (a)&(b)
(d) Estimating of Net Factor Income from Abroad
Answer
Answer: (d) Estimating of Net Factor Income from Abroad
20. Net National Product at factor cost is;
(a) Domestic income
(b) National income
(c) Factor income
(d) None of the above
Answer
Answer: (b) National income
Methods of Measuring National Income Class 12 MCQ
21. National income =_______.
(a) NDPFC
(b) + Net factor income from abroad
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
22. National Income =
(a) Net Domestic Product at Factor Cost
(b) Net Value Added at factor cost of Primary Sector + Secondary Sector + Tertiary Sector
(c) + Net Factor Income from Abroad
(d) All of the above
Answer
Answer: (d) All of the above
23. Which of the following precautions are taken while estimating national income by the value added method?
(a) Value of the goods produced for self-consumption should be included
(b) Own account production of fixed assets should not be included
(c) Imputed rent of the owner should not be included
(d) All of the above
Answer
Answer: (a) Value of the goods produced for self-consumption should be included
24. The main difficulties faced while estimating national income are;
(a) The problem of valuation of inventories
(b) Estimating depreciation
(c) Lack of adequate and reliable data
(d) All of the above
Answer
Answer: (d) All of the above
25. Under the _____ method, national income is calculated by adding up all incomes generated in the course of producing national products.
(a) Value-added method
(b) Income method
(c) Expenditure method
(d) All of the above
Answer
Answer: (b) Income method
26. Factor income is classified into;
(a) Labour income
(b) Operating surplus
(c) Mixed-income
(d) All of the above
Answer
Answer: (d) All of the above
27. Labour income is also known as the compensation of employees. (True/False)
Answer
Answer: True
28. ______ is the payment to the workers for their labour and the payments made by producers to their employees.
(a) Mixed-income
(b) Compensation of employees
(c) Operating surplus
(d) None of the above
Answer
Answer: (b) Compensation of employees
29. Compensation of employees is given in the form of;
(a) Wages and salaries
(b) Cash and kind
(c) social security benefits.
(d) All of the above
Answer
Answer: (d) All of the above
30. Wages and salaries in cash include;
(a) Bonus, commission, dearness allowance
(b) House rent allowance
(c) Travelling allowance
(d) All of the above
Answer
Answer: (d) All of the above
Methods of Measuring National Income Class 12 MCQ
31. _______ is the income earned from the ownership and control of the capital.
(a) Operating surplus
(b) Mixed-income
(c) Labour income
(d) Compensation of employees
Answer
Answer: (a) Operating surplus
32. Mixed-income is also known as income from property and entrepreneurship. (True/False)
Answer
Answer: False
33. Capital income includes;
(a) Rent and interest
(b) Royalties
(c) Dividends and undistributed profits
(d) All of the above
Answer
Answer: (d) All of the above
34. ________ are incomes to people who own land and buildings and rent them out.
(a) Operating surplus
(b) Rental expense
(c) Surplus income
(d) Rental payment
Answer
Answer: (d) Rental payment
35. The income from rent includes;
(a) Rent on land
(b) Rent on buildings.
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
36. Royalty income consists of;
(a) Income received for granting the rights of mining to others
(b) Royalties earned from patents and copyrights.
(c) Interest payments
(d) Both (a)&(b)
Answer
Answer: (d) Both (a)&(b)
37. ________ are the incomes received from lending to others.
(a) Royalties
(b) Interest payment
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (b) Interest payment
38. ______ is composed of labour income and capital income of those persons who provide both labour and capital services in the production process.
(a) Operating surplus
(b) Rental income
(c) Mixed-income
(d) Rental payment
Answer
Answer: (c) Mixed-income
39. Mixed-income is partly labour income and partly capital income. (True/False)
Answer
Answer: True
40. ______ is a mixture of income from work and income from property and entrepreneurship.
(a) Operating surplus
(b) Rental income
(c) Mixed-income
(d) Rental payment
Answer
Answer: (c) Mixed-income
Methods of Measuring National Income Class 12 MCQ
41. Which of them should not be included in the estimation of national income under the income method?
(a) Transfer Income
(b) Private transfer payment
(c) Wealth tax
(d) All of the above
Answer
Answer: (d) All of the above
42. Which of the following are the difficulties faced in the income method?
(a) Estimating mixed Income
(b) National debt
(c) Limited use of this method in underdeveloped countries
(d) All of the above
Answer
Answer: (d) All of the above
43. _____ measures national income by estimating Expenditure on final products at a market price during a year.
(a) Value-added method
(b) Income method
(c) Expenditure method
(d) All of the above
Answer
Answer: (c) Expenditure method
44. Which of the following are the economic units under the expenditure method?
(a) Households
(b) Firms and government
(c) Rest of the world
(d) All of the above
Answer
Answer: (d) All of the above
45. Expenditure on goods and services under the Expenditure method is divided into;
(a) Private and government final consumption expenditure
(b) Investment
(c) Net exports
(d) All of the above
Answer
Answer: (d) All of the above
46. _________ means addition to the physical stock of capital goods such as machinery, factories, residential houses and addition to a firm’s inventories of goods during a given period.
(a) Investment
(b) Inventories
(c) Stock
(d) Consumption
Answer
Answer: (a) Investment
47. _______ is the expenditure on capital goods.
(a) Consumption expenditure
(b) Investment expenditure
(c) Capital expenditure
(d) Factor expo
Answer
Answer: (b) Investment expenditure
48. Which of the following are the categories of investment expenditure?
(a) Gross fixed business investment
(b) Inventory investment
(c) Expenditure on residential investment
(d) All of the above
Answer
Answer: (d) All of the above
49. Inventories are calculated at market prices. (True/False)
Answer
Answer: True
50. Current Expenditure on goods and services is;
(a) Government consumption final Expenditure
(b) Private expenditure
(c) Public expenditure
(d) None of the above
Answer
Answer: (a) Government consumption final Expenditure
51. ______ is the difference between the Value of goods and services exported to other countries and the value of goods and services imported from other countries.
(a) Net import
(b) Net exports
(c) Net factor income
(d) Factor income from and to abroad
Answer
Answer: (b) Net exports
52. The amount necessary for the replacement of worn-out capital is called;
(a) Depreciation
(b) Appreciation
(c) Net imports
(d) Substitution
Answer
Answer: (a) Depreciation
53. Which of the following precautions should be taken while estimating national income by expenditure method?
(a) Goods for self-consumption should be included
(b) The intermediate product is excluded
(c) Second-hand goods are excluded
(d) All of the above
Answer
Answer: (d) All of the above
Economics Class 12 ISC MCQs – Term 2
- Theory of Income and Employment Class 12 MCQ
- Money : Meaning and Functions
- Banks : Commercial Bank and Central bank
- Balance of Payments and Exchange Rate
- Government Budget
- MCQ on Fiscal Policy Class 12 Economics
- National Income and Circular flow of Income
- National Income Aggregates Class 12 MCQ
- Methods of Measuring National Income Class 12 MCQ