Class 12 Economics National Income Multiple Choice Questions
Class 12 Economics National Income Multiple Choice Questions
Class: 12
Subject: Economics
Section: National Income and Related Aggregates
Book: Introductory Macroeconomics
Topic: National Income Multiple Choice Questions
Board: CBSE Board Examinations
1. National Income refers to:
Answer: B
National Income is the sum total of all factor incomes (wages, rent, interest, profit) earned by normal residents.
National Income is the sum total of all factor incomes (wages, rent, interest, profit) earned by normal residents.
2. GDP measures production within:
Answer: B
GDP covers production within the economic territory, including foreign firms operating domestically.
GDP covers production within the economic territory, including foreign firms operating domestically.
3. Factor Cost excludes:
Answer: C
Factor cost reflects payments to factors; indirect taxes are government levies, so excluded.
Factor cost reflects payments to factors; indirect taxes are government levies, so excluded.
4. Subsidies are added when converting:
Answer: A
Subsidies reduce market price; hence added back to reach Factor Cost.
Subsidies reduce market price; hence added back to reach Factor Cost.
5. Consumption of fixed capital means:
Answer: B
It is the loss of value of fixed assets due to wear and tear.
It is the loss of value of fixed assets due to wear and tear.
6. Which income is earned without working?
Answer: B
Transfer incomes like pension are received without factor services.
Transfer incomes like pension are received without factor services.
7. Income method includes:
Answer: D
All factor incomes are summed under the income method.
All factor incomes are summed under the income method.
8. Investment in stock is called:
Answer: B
Change in stock of unsold goods is inventory investment.
Change in stock of unsold goods is inventory investment.
9. Net exports =
Answer: B
Exports minus imports measure foreign demand contribution.
Exports minus imports measure foreign demand contribution.
10. Personal Income includes:
Answer: A
Transfer receipts are added as households receive them.
Transfer receipts are added as households receive them.
11. Operating surplus includes profit and:
Answer: C
Operating surplus covers profit, rent, and interest.
Operating surplus covers profit, rent, and interest.
12. Economic territory excludes:
Answer: C
Tourist spending area belongs to domestic territory.
Tourist spending area belongs to domestic territory.
13. NNP =
Answer: A
NNP deducts depreciation from GNP.
NNP deducts depreciation from GNP.
14. Final consumption expenditure is by:
Answer: C
Both sectors consume final goods.
Both sectors consume final goods.
15. Real GDP removes:
Answer: B
It measures actual output growth.
It measures actual output growth.
16. GNP focuses on:
Answer: B
It measures residents’ income.
It measures residents’ income.
17. Which is not a factor income?
Answer: C
Lottery is windfall gain.
Lottery is windfall gain.
18. Mixed income arises in:
Answer: A
Self-employment combines factor incomes.
Self-employment combines factor incomes.
19. Saving =
Answer: A
Basic macro identity.
Basic macro identity.
20. Value added avoids:
Answer: B
Ensures only net contribution is counted.
Ensures only net contribution is counted.