National Income and Related Aggregates MCQ Questions include – Multiple Choice Questions, Fill in the Blanks, True or False, Short answers type questions. Answers to MCQ on National Income and Related Aggregates Class 12 are available at the end of the last question.
| Category | CBSE Economics Class 12 MCQs |
| Subject | Economics |
| Chapter | National Income and Related Aggregates MCQ Questions |
MCQ on National Income and Related Aggregates Class 12 (Multiple Choice Questions)
1. Domestic income is:
(a) GDPMP
(b) NDPFC
(c) NNPMP
(d) GNPFC
Answer
Answer: (b) NDPFC
2.National income is:
(a) GDPMP
(b) NDPMP
(c) NNPFC
(d) GNPFC
Answer
Answer: (c) NNPFC
3. The difference between gross and net is:
(a) Depreciation
(b) NFIA
(c) Net Indirect Tax
(d) Subsidies
Answer
Answer: (a) Depreciation
4. Domestic income is which concept?
(a) National
(b) Economic
(c) Territorial
(d) None of the above
Answer
Answer: (c) Territorial
5. National income is which concept?
(a) Territorial
(b) National
(c) Economical
(d) None of the above
Answer
Answer: (b) National
6. he difference between domestic income and National income is____.
(a) NFIA
(b) Net Indirect Tax
(c) Depreciation
(d) All of the above
Answer
Answer: (a) NFIA
7. How is GDPMP different from NNPfc ?
(a) NFIA
(b) Net Indirect Tax
(c) Depreciation
(d) All of the above
Answer
Answer: (d) All of the above
8. Market price includes:
(a) NFIA
(b) Depreciation
(c) Net Indirect Tax
(d) None of the above
Answer
Answer: (c) Net Indirect Tax
9.The word national in national income means:
(a) Goods produced by normal resident
(b) Goods produced in domestic territory
(c) Services produced by normal resident
(d) Both (a) and (c)
Answer
Answer: (d) Both (a) and (c)
10. The word gross means:
(a) Inclusive of NFIA
(b) Inclusive of indirect tax
(c) Exclusive of depreciation
(d) Inclusive of depreciation
Answer
Answer: (d) Inclusive of depreciation
National Income and Related Aggregates MCQ Questions
11. Product means:
(a) Intermediate goods
(b) Transfer payments
(c) Final goods and services
(d) Both (a) and (b)
Answer
Answer: (c) Final goods and services
12. Factor cost is the:
(a) Market value
(b) Money value
(c) Transfer value
(d) None of the above
Answer
Answer: (b) Money value
13. How many aggregates does national income have?
(a) 10
(b) 5
(c) 8
(d) 4
Answer
Answer: (c) 8
14. Market price is the:
(a) Market value
(b) Money value
(c) Transfer value
(d) None of the above
Answer
Answer: (a) Market value
15. Which of the following is a domestic concept?
(a) NDPMP
(b) NDPFC
(c) GDPMP
(d) All the above
Answer
Answer: (d) All the above
16. Which of the following is not a national concept?
(a) GDPFC
(b) NNPMP
(c) GNPFC
(d) NNPFC
Answer
Answer: (a) GDPFC
17. The difference between NNPMP and NNPfc is:
(a) Depreciation
(b) NFIA
(c) Net Indirect Tax
(d) All of the above
Answer
Answer: (c) Net Indirect Tax
18. Which of the following is a national concept?
(a) NNPMP
(b) NNPFC
(c) GNPMP
(d) All the above
Answer
Answer: (d) All the above
19. Which of the following is not a domestic concept?
(a) NNPMP
(b) NDPFC
(c) GDPMP
(d) GDPFC
Answer
Answer: (a) NNPMP
20. If NFIA is negative,
(a) Factor income to abroad will be less than Factor income from abroad
(b) Factor income to abroad will be equal to Factor income from abroad
(c) Factor income to abroad will be more than Factor income from abroad
(d) None of the above
Answer
Answer: (c) Factor income to abroad will be more than Factor income from abroad
National Income and Related Aggregates MCQ Questions
21. If NFIA is 0,
(a) Domestic income will be more than national income
(b) Domestic income will be equal to national income
(c) Domestic income will be less than national income
(d) None of the above
Answer
Answer: (b) Domestic income will be equal to national income
22. If NFIA is positive,
(a) NDPFC = NNPFC
(b) NDPFC > NNPFC
(c) NDPFC < NNPFC
(d) None of the above
Answer
Answer: (c) NDPFC < NNPFC
23. If Net Indirect Taxes are negative,
(a) Factor cost will be less than market price
(b) Factor cost will be more than market price
(c) Factor cost is equal to market price
(d) None of the above
Answer
Answer: (b) Factor cost will be more than market price
24. Depreciation can never be:
(a) Zero
(b) Positive
(c) Negative
(d) None of the above
Answer
Answer: (c) Negative
25. All domestic variants are:
(a) National concept
(b) Territorial concept
(c) Economical concep
(d) None of the above
Answer
Answer: (b) Territorial concept
26. Which of the following is a method to calculate national income?
(a) Value added method
(b) Income method
(c) Expenditure method
(d) All of the above
Answer
Answer: (d) All of the above
27. Value added method is also known as:
(a) Product method
(b) Inventory method
(c) Net output method
(d) All of the above
Answer
Answer: (d) All of the above
28. Which aggregate of national income is constituted from the value added method?
(a) NDPFC
(b) GDPMP
(c) GDPFC
(d) NDPMP
Answer
Answer: (b) GDPMP
29. All production units are grouped into:
(a) Primary sector
(b) Tertiary sector
(c) Secondary sector
(d) All of the above
Answer
Answer: (d) All of the above
30. Which of the following is not included while calculating national income through value added method?
(a) Intermediate goods
(b) Services for self-consumption
(c) Second hand goods
(d) All of the above
Answer
Answer: (d) All of the above
National Income and Related Aggregates MCQ Questions
31. Which of the following is correct?
(a) GDPMP = Value of Output- Intermediate Consumption
(b) NDPFC = Value of Output- Intermediate Consumption
(c) GDPFC = Sales+ change in stock
(d) NDPMP = Sales + change in stock
Answer
Answer: (a) GDPMP = Value of Output- Intermediate Consumption
32. Income method is also known as:
(a) Factor payment method
(b) Factor service method
(c) Factor output method
(d) All of the above
Answer
Answer: (a) Factor payment method
33. Which of the following is not a component of factor income?
(a) Compensation of employees
(b) Operating surplus
(c) Sales of goods and services
(d) Mixed income of self employed
Answer
Answer: (c) Sales of goods and services
34. Which of the following is not a component of operating surplus?
(a) Profit
(b) Intermediate consumption
(c) Rent and royalty
(d) Interest
Answer
Answer: (b) Intermediate consumption
35. Which of the following is a component of compensation of employees?
(a) Wages and salary in cash
(b) Wages and salaries in kind
(c) Employer’s contribution to PPF
(d) All of the above
Answer
Answer: (d) All of the above
36. Which of the following is a component of profits?
(a) Corporate tax
(b) Dividends
(c) Retained earnings
(d) All of the above
Answer
Answer: (d) All of the above
37. Which of the following is not included in national income as per income method?
(a) Windfall gains
(b) Transfer incomes
(c) Payments out of past savings
(d) All of the above
Answer
Answer: (d) All of the above
38. Expenditure method is also known as:
(a) Income disposable method
(b) Net output method
(c) Factor payment method
(d) None of the above
Answer
Answer: (a) Income disposable method
39. Which of the following is a component of the expenditure method?
(a) Private final consumption expenditure
(b) Net exports
(c) Gross domestic capital formation
(d) All of the above
Answer
Answer: (d) All of the above
40. Which of the following is a part of gross domestic capital formation?
(a) Gross fixed capital formation
(b) Inventory investment
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
National Income and Related Aggregates MCQ Questions
41. Which of the following is not included in national income as per expenditure method?
(a) Purchase of second-hand goods
(b) Purchase of financial assets
(c) Intermediate goods
(d) All of the above
Answer
Answer: (d) All of the above
42. Which of the following is not a component of gross fixed capital formation?
(a) Gross business fixed investment
(b) Inventory investmen
(c) Gross residential construction investment
(d) Gross public investment
Answer
Answer: (b) Inventory investment
43. Which of the following is correct?
(a) Inventory investment= Opening stock- Closing stock
(b) Inventory investment= Opening stock + Closing stock
(c) Inventory investment= Closing stock- Opening stock
(d) Inventory investment= Gross fixed investment + opening stock
Answer
Answer: (c) Inventory investment= Closing stock- Opening stock
44. Which of the following groups incur final expenditure?
(a) Household sector
(b) Foreign sector
(c) Government and producing sector
(d) All of the above
Answer
Answer: (d) All of the above
45. Net exports is
(a) Export – Import
(b) Import – Export
(c) Export + Import
(d) None of the above
Answer
Answer: (a) Export – Import
46. The output at current year price is called:
(a) Nominal GDP
(b) Real GDP
(c) National GDP
(d) None of the above
Answer
Answer: (a) Nominal GDP
47. The output at base year price is called:
(a) Nominal GDP
(b) Real GDP
(c) National GDP
(d) None of the above
Answer
Answer: (b) Real GDP
48. Real GDP shows:
(a) Change in price only
(b) Change in output only
(c) Change in both price and output
(d) None of the above
Answer
Answer: (b) Change in output only
49. Nominal GDP shows:
(a) Change in price only
(b) Change in output only
(c) Change in both price and output
(d) None of the above
Answer
Answer: (c) Change in both price and output
50. If population increase, then:
(a) GDP rise
(b) Welfare rise
(c) Welfare decrease
(d) Both (a) and (c)
Answer
Answer: (c) Welfare decrease
National Income and Related Aggregates MCQ Questions
51. Making public parks increase:
(a) GDP
(b) Welfare
(c) GDP and welfare both
(d) None of the above
Answer
Answer: (b) Welfare
52. Due to non monetary changes,:
(a) GDP rise but welfare falls
(b) Welfare rise but GDP falls
(c) No impact on GDP but welfare increases
(d) No impact on GDP and welfare
Answer
Answer: (c) No impact on GDP but welfare increases
53. Due to setting up of plant near river coast,
(a) GDP falls, welfare rise
(b) GDP rise, welfare falls
(c) Both GDP and welfare falls
(d) Both GDP and welfare rises
Answer
Answer: (b) GDP rise, welfare falls
54. Which of the following statements is false?
(a) Use of public parks increases welfare.
(b) Distribution of GDP increases welfare
(c) Higher GDP always cause higher welfare
(d) None of the above
Answer
Answer: (c) Higher GDP always cause higher welfare
55. Which of the following is included in national income?
(a) Brokerage on sale of financial assets
(b) Sale of financial assets
(c) Intermediate goods
(d) Transfer payments
Answer
Answer: (a) Brokerage on sale of financial assets
56. Which of the following is not included in national income?
(a) Windfall gains
(b) National debt interest
(c) Purchase of second hand goods
(d) All of the above
Answer
Answer: (d) All of the above
57. Increase in Stock of Capital is known as:
(a) Capital Loss
(b) Capital Profit
(c) Capital Formation
(d) None of these
Answer
Answer: (c) Capital Formation
58. Interest on loans paid by commercial bank is:
(a) Included in national income
(b) Excluded in domestic income
(c) Excluded in national income
(d) None of the above
Answer
Answer: (a) Included in national income
59. Sales and purchase of financial asset is:
(a) Included in national income
(b) Excluded in national income
(c) Excluded in domestic income
(d) None of the above
Answer
Answer: (b) Excluded in national income
60. NDPMP = ________
(a) GDPMP – Depreciation
(b) GDPFC + Net factor income from abroad
(c) NNPFC + Net indirect taxes
(d) All of these
Answer
Answer: (a) GDPMP – Depreciation
61. Interest earned by normal resident is:
(a) Included in national income
(b) Included in domestic income
(c) Excluded in national incom
(d) None of the above
Answer
Answer: (a) Included in national income
62. Which of the following is not included in compensation of employees?
(a) Wages and salary in cash
(b) Wages and salary in kind
(c) Employee’s contribution to PF
(d) Employer’s contribution to PF
Answer
Answer: (c) Employee’s contribution to PF
63. Which of the following is not a part of operating surplus?
(a) Rent and royalty
(b) Wages and salaries
(c) Interest and profits
(d) None of the above
Answer
Answer: (b) Wages and salaries
64. Retained earnings is also called:
(a) Undistributed profits
(b) Savings of private sector
(c) Excess reserves
(d) All of the above
Answer
Answer: (d) All of the above
65. Income of a teacher teaching at her own house is a part of:
(a) Mixed income of self employed
(b) Domestic income
(c) National income
(d) All of the above
Answer
Answer: (d) All of the above
Fill in the Blanks – National Income and Related Aggregates MCQ Questions
1. Market price refers to the______ of all final goods and services.
(a) Market value
(b) Intermediate value
(c) Final value
(d) None of the above
Answer
Answer: (a) Market value
2. NDPFC represents_______ .
(a) Domestic income
(b) Normal income
(c) Both (a) and (b)|
(d) International income
Answer
Answer: (a) Domestic income
3. National income is represented by______ .
(a) NDPFC
(b) NNPFC
(c) NNPMP
(d) NDPMP
Answer
Answer: (b) NNPFC
4. GNP exceeds NNP by ______.
(a) Subsidy
(b) Depreciation
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (b) Depreciation
5. NDP exceeds NNP by_____ .
(a) NFIA
(b) FIFA
(c) FITA
(d) None of the above
Answer
Answer: (a) NFIA
6. GDPMP exceeds GDPFC by_____
(a) Direct tax
(b) Net indirect tax
(c) Indirect tax
(d) All of the above
Answer
Answer: (b) Net indirect tax
7. Factor cost represents the_____ of all final goods and services.
(a) Net Indirect tax
(b) Depreciation
(c) Money value
(d) None of the above
Answer
Answer: (c) Money value
8. In _______ economy, national income is equal to domestic income.
(a) Mixed
(b) Closed
(c) Open
(d) None of the above
Answer
Answer: (b) Closed
9. Domestic income is a ______ concept.
(a) Domestic
(b) International
(c) National
(d) Territorial
Answer
Answer: (d) Territorial
10. National income is a ______ concept.
(a) National
(b) Domestic
(c) Territorial
(d) Regional
Answer
Answer: (a) National
11. Value added method is also called______ .
(a) Gross value metho
(b) Product method
(c) National income method
(d) None of the above
Answer
Answer: (b) Product method
12. Income method is also called______ .
(a) National income method
(b) Product method
(c) Factor payment method
(d) None of the above
Answer
Answer: (c) Factor payment method
13. Expenditure method is also called_______ .
(a) Income disposal method
(b) Product method
(c) Factor income method
(d) National income method
Answer
Answer: (a) Income disposal method
14. Intermediate consumption is_______ in domestic and national income.
(a) Included
(b) Excluded
(c) Not mentioned
(d) Combined with final Consumption.
Answer
Answer: (b) Excluded
15. Windfall gains are_______ while calculating national income.
(a) Gained
(b) Included
(c) Excluded
(d) None of the above
Answer
Answer: (c) Excluded
National Income and Related Aggregates MCQ Questions
16. The three sectors of production are ______, and .
(a) Primary, secondary, tertiary
(b) Land,labour and Capital
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (a) Primary, secondary, tertiary
17. Rent, interest and profits combine to form ______.
(a) Factors payment
(b) Market value
(c) Operating surplus
(d) All of the above
Answer
Answer: (c) Operating surplus
18. Inventory investment= __________.
(a) Closing stock
(b) Opening stock
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (a) Closing stock
19. Transfer payments or receipts are ________while calculating national income.
(a) Excluded
(b) Included
(c) Both (a) and (b)
(c) None of the above
Answer
Answer: (a) Excluded
20. Interest on loans paid by commercial banks is ______in national income.
(a) Included
(b) Excluded
(c) Not mentioned
(d) Ignored
Answer
Answer: (a) Included
21. Compensation paid to employees in kind is ______in national income.
(a) Included
(b) Excluded
(c) Ignored
(d) Not mentioned
Answer
Answer: (a) Included
22. Old age pension is a ______ income.
(a) Factor income
(b) Transfer income
(c) Money
(d) None of the above
Answer
Answer: (b) Transfer income
23. Wages and salaries is a ______ income.
(a) Factor
(b) Transfer
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (a) Factor
24. GDP at current year prices is called ______.
(a) Real GDP
(b) Deflated GDP
(c) Nominal GDP
(d) All of the above
Answer
Answer: (c) Nominal GDP
25. GDP at base year prices is called ______.
(a) Factor GDP
(b) Nominal GDP
(c) Deflated GDP
(c) Real GDP
Answer
Answer: (c) Real GDP
26. _______ Is the average price level of all goods and services produced in the economy.
(a) Factor GDP
(b) GDP deflated
(c) Nominal GDP
(d) Real GDP
Answer
Answer: (b) GDP deflated
27. _____ Shows the impact of output and price both.
(a) Factor GDP
(b) GDP deflated
(c) Nominal GDP
(d) Real GDP
Answer
Answer: (c) Nominal GDP
28. _____ Shows the impact of output only.
(a) Real GDP
(b) Deflated GDP
(c) Nominal GDP
(d) All of the above
Answer
Answer: (a) Real GDP
29. Due to setting up of factory near residential area increase_____but decreases .
(a) Welfare, GDP
(b) GDP, welfare
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (b) GDP, welfare
30. Due to the increase in population of the country, its welfare ______.
(a) Increases
(b) Decreases
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (b) Decreases
31. Setting up lights on public roads leads to an increase in ______.
(a) GDP
(b) Welfare
(c) Factor income
(d) Transfer payments
Answer
Answer: (b) Welfare
32. ________ Is considered as an index of welfare of the people.
(a) GDP
(b) Transfer payment
(c) Factor income
(d) All of the above
Answer
Answer: (a) GDP
33. The aggregates of value added methods sum up to form _______.
(a) NNPMP
(b) NNPFC
(c) GDPMP
(d) GNPFC
Answer
Answer: (c) GDPMP
34. The aggregates of income methods sum up to form _______.
(a) NNPMP
(b) NNPFC
(c) NDPFC
(d) NDPMP
Answer
Answer: (c) NDPFC
35. The aggregates of expenditure method sum up to form _______.
(a) NNPMP
(b) NNPFC
(c) GDPMP
(d) GNPFC
Answer
Answer: (c) GDPMP
Statement based – National Income and Related Aggregates MCQ Questions
1. Read the following statement given below and choose the correct alternative.
Statement 1- In an open economy, domestic income is always equal to national income.
Statement 2- Government final consumption expenditure is expenditure on the free services provided to the people by the government.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (d) Statement 1 is incorrect and statement 2 is correct.
2. Read the following statement given below and choose the correct alternative.
Statement 1- Depreciation can be negative also.
Statement 2- Depreciation is also known as consumption of final resources.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (b) Both are incorrect
3. Read the following statement given below and choose the correct alternative.
Statement 1-Indirect tax can never be negative.
Statement 2- Indirect tax can never be positive.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (a) Both are correct
4. Read the following statement given below and choose the correct alternative.
Statement 1- Domestic income can be more than national income.
Statement 2- National income is included in Domestic income.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (c) Statement 1 is correct and statement 2 is incorrect
5. Read the following statement given below and choose the correct alternative.
Statement 1- Imports are separately included in national income as per value added method.
Statement 2-Value of output is value of final product produced by a production unit.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (d) Statement 1 is incorrect and statement 2 is correct.
6. Read the following statement given below and choose the correct alternative.
Statement 1- Wages and salaries in kind are a part of national income as per income method.
Statement 2- Income of self employed workers is included in National income as per income method.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (a) Both are correct
7. Read the following statement given below and choose the correct alternative.
Statement 1-Corporate tax is a part of profits.
Statement 2- Free education to children of employees is an example of compensation in kind .
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct
Answer
Answer: (a) Both are correct
8. Read the following statement given below and choose the correct alternative.
Statement 1- Higher GDP will always lead to higher welfare.
Statement 2- Low level of welfare will always lead to higher GDP.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (b) Both are incorrect
9. Read the following statement given below and choose the correct alternative.
Statement 1- Mixed income includes the income of self employed persons.
Statement 2- Mixed income is a mixer of wages, rent, interest and profit.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (a) Both are correct
10. Read the following statement given below and choose the correct alternative.
Statement 1- Purchase and sale of financial assets is included in national income.
Statement 2- Income from subsoil assets is included in National income.
(a) Both are correct
(b) Both are incorrect
(c) Statement 1 is correct and statement 2 is incorrect
(d) Statement 1 is incorrect and statement 2 is correct.
Answer
Answer: (d) Statement 1 is incorrect and statement 2 is correct.
Assertion based questions – National Income and Related Aggregates MCQ Questions
1.Read the following statement given below and choose the correct alternative.
Assertion (A)- GDPMP , GDPFC , NDPMP and NDPFC are the four aggregates of domestic concepts.
Reason ( R)- Sum of factors income generated within domestic territory is called domestic income.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
(c) Assertion is true but the reason is not.
(d) Reason is true but assertion is not.
Answer
Answer: (b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
2. Read the following statement given below and choose the correct alternative.
Assertion (A)- GNPMP , GNPFC , NNPMP and NNPFC are the four aggregates of national concepts.
Reason (R )- National income is the sum of domestic product and net factor income from abroad.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion
(c) Assertion is true but reason is not
(d) Reason is true but assertion is not.
Answer
Answer: (b) Both assertion and reason are true. Reason is not the correct explanation of assertion
3. Read the following statement given below and choose the correct alternative.
Assertion (A) – Domestic income can be greater than national income.
Reason (R )- If factor income from abroad is less than factor income to abroad , NFIA is negative.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion
(c) Assertion is true but reason is not
(d) Reason is true but assertion is not.
Answer
Answer: (a) Both assertion and reason are true. Reason is the correct explanation of assertion.
4. Read the following statement given below and choose the correct alternative.
Assertion (A)- “Market Price” is the market value of final goods and services and “Factor Cost” is the money value of final goods and services.
Reason (R )- Factor income is not included in National income whereas transfer income is included.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion
(c) Assertion is true but reason is not
(d) Reason is true but assertion is not.
Answer
Answer: (c) Assertion is true but reason is not
5. Read the following statement given below and choose the correct alternative.
Assertion (A)- By including the value of final goods only we can solve the problem of double counting.
Reason (R )-The problem of double counting doesn’t exist in a closed economy.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion
(c) Assertion is true but reason is not
(d) Reason is true but reason is not.
Answer
Answer: (c) Assertion is true but reason is not
6. Read the following statement given below and choose the correct alternative.
Assertion (A)- Intermediate goods are not included in national income
Reason (R )- Production of goods for self consumption is included in national income.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion
(c) Assertion is true but the reason is not.
(d) Reason is true but assertion is not.
Answer
Answer: (b) Both assertion and reason are true. Reason is not the correct explanation of assertion
7. Read the following statement given below and choose the correct alternative.
Assertion (A)- Transfer payments are not included in national income.
Reason (R )- Purchase of financial assets is included in the national income.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
(c) Assertion is true but the reason is not.
(d) Reason is true but assertion is not.
Answer
Answer: (d) Reason is true but assertion is not.
8. Read the following statement given below and choose the correct alternative.
Assertion (A)- Rent, Interest and profit are termed as transfer Income
Reason (R )- Transfer income is the income received without rendering any productive services in return.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
(c) Assertion is true but the reason is not.
(d) Reason is true but assertion is not.
Answer
Answer: (d) Reason is true but assertion is not.
9. Read the following statement given below and choose the correct alternative.
Assertion (A)- GDP deflator refers to the average price level of all gods and services produced in the economy.
Reason (R )- There are two types of GDP, Real GDP and Nominal GDP.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
(c) Assertion is true but reason is not
(d) Reason is true but Assertion is not
Answer
Answer: (b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
10. Read the following statement given below and choose the correct alternative.
Assertion (A)- Variable which is measured at a certain point of time is called flow variable.
Reason (R )- Real GDP is better as it truly reflects the growth of the economy.
(a) Both assertion and reason are true. Reason is the correct explanation of assertion.
(b) Both assertion and reason are true. Reason is not the correct explanation of assertion.
(c) Assertion is true but reason is not
(d) Reason is true but assertion is not.
Answer
Answer: (d) Reason is true but assertion is not.
Text based question – National Income and Related Aggregates MCQ Questions
1.Gross means the worth of an item including depreciation. Net means the worth of item barring depreciation.
2.The distinction between these two terms is depreciation.
3.Where depreciation is the normal abatement in the worth of fixed capital resources because of its overall use.
4. It is the consequence of the production process.
Gross = Net + Depreciation Net = Gross – Depreciation
Note: Other names of deterioration are:
(a) Consumption of fixed capital
(b) Capital utilization remittance
(c) Current substitution cost.
1. ______ includes depreciation.
(a) Net
(b) Gross
(c) Production
(d) Tax
Answer
Answer: (b) Gross
2. ________ excludes depreciation.
(a) Net
(b) Gross
(c) Subsidy
(d) Interest
Answer
Answer: (a) Net
3. Depreciation is the consequence of _________.
(a) Consumption
(b) Gross domestic product
(c) Production process
(d) None of the above
Answer
Answer: (c) Production process
4. Distinction between Gross and Net is known as .
(a) Gross investment
(b) Net investment
(c) Investment
(d) Depreciation
Answer
Answer: (d) Depreciation
5. Which of the following are the alternative names of depreciation.
(a) Consumption of fixed capital
(b) Capital utilization remittance
(c) Current substitution cost.
(d) All of the above
Answer
Answer: (d) All of the above
Matching based questions – National Income and Related Aggregates MCQ Questions
1. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Goods having Direct demand | 1. Consumer goods. |
| B. Phases of circular flow of income | 2. Stock |
| C. Inventory investment | 3. Depreciation |
| D. Fall in the value of fixed assets | 4. Production, consumption and distribution |
(a) A-2
(b) B-4
(c) C-1
(d) D-2
Answer
Answer: (b) B-4
2. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Goods used by producer for producing consumer goods | 1.Consumer goods |
| B. Goods used by consumer for direct satisfaction | 2. Capital goods |
| C. Non-marketable transactions | 3. Afforestation |
| D. Positive externalities | 4. Household services |
(a) A-2
(b) B-3
(c) C-1
(d) D-4
Answer
Answer: (a) A-2
National Income and Related Aggregates MCQ Questions
3. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Money supply | 1.Injection |
| B. National income | 2. Stock |
| C. Investment | 3. Leakage |
| D. Tax | 4. Flow |
(a) B-3
(b) A-4
(c) C-1
(d) D-2
Answer
Answer: (c) C-1
4. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Negative externality | 1.Deforestation |
| B. Expenditure incurred on purchasing intermediate goods | 2. Transfer Income |
| C. Used for consumption by consumer | 3. Intermediate cost |
| D. Unilateral concept | 4. Final product |
(a) A-1
(b) B-3
(c) C-2
(d) D-4
Answer
Answer: (a) A-1
5. Choose the correctly matched pair from the following
| Column A | Column B |
| A. Difference between indirect tax and subsidy | 1. Stock variable |
| B. Residual income of entrepreneurs | 2. Net indirect tax |
| C. Variable of static nature | 3. Profit |
| D. Variable of dynamic nature | 4. Flow variable |
(a) A-1
(b) B-2
(c) C-3
(d) D-4
Answer
Answer: (d) D-4
CBSE Economics Class 12 MCQ with Answers – Term 2
Part A: Introductory Macroeconomics
- Circular Flow of Income Class 12 MCQ with Answers
- Some Basic Concepts of Macroeconomics Class 12 MCQ
- National Income and Related Aggregates Class 12 MCQs
- National Income and Related Aggregates Class 12 Numericals
- Determination of Income and Employment Class 12 MCQs
Part B: Indian Economic Development
- Current challenges facing Indian Economy – 12 Marks
- Development Experience of India – A Comparison with Neighbours – 6 Marks