laboursonline – MCQs, Mock Tests | Economics Economics National Income Accounting Set-1

Which of the following is closest to the concept of economic production?

1. Sale of goods and services for profit
2. Manufacture of goods
3. Addition to the value of commodities
4. Addition to the stock of goods and services for future use

✅ Correct Answer: 3

Which of the following is a characteristic feature of a modern economy?

1. Predominance of agriculture
2. Self-sufficient village economy
3. Diversity in production of commodities
4. Static technology

✅ Correct Answer: 3

Identify economic stock from among the following:

1. Depreciation of machinery
2. Production of food grains during the Kharif season
3. Purchase of food grains by a household
4. Bank deposit of a household

✅ Correct Answer: 4

Which of the following is an economic flow?

1. National capital
2. Demand for machinery
3. Current account of a household in a bank
4. Population of a country

✅ Correct Answer: 2

A closed economy is one which:

1. Does not trade with other countries
2. Does not possess any means of international transport
3. Does not have a coastal line
4. Is not a member of the United Nations Organisation

✅ Correct Answer: 1

The traditional economy is characterised by:

1. Division of labour and specialisation
2. Organisation of production for self-consumption
3. Capital-intensive process of production
4. Increasing state intervention

✅ Correct Answer: 2

Who among the following is a non-resident of India?

1. A person of Indian origin working at the World Bank Washington DC
2. A person of Indian origin employed in the UNO office at New Delhi
3. The Indian manager of the Punjab National Bank branch office in London
4. An Indian tourist in Europe

✅ Correct Answer: 1

Purchase of a ceiling fan by a household is treted in national income accounting as a part of:

1. Capital formation
2. Consumption over a long period of time
3. Consumption at the time of its purchase
4. Intermediate consumption

✅ Correct Answer: 3

Corporate enterprises refer to:

1. Business houses maintaining a separate profit and loss account
2. Business houses that obtain loans from a bank
3. Business houses that obtain loans from the public
4. Business houses that are independent of their owners

✅ Correct Answer: 4

Which of the following is not a corporate enterprise?

1. Food Corporation of India
2. Municipal Corporation of Delhi
3. Tata Iron and Steel Company
4. Life Insurance Corporation of India

✅ Correct Answer: 2

Departmental enterprises are a part of the:

1. General government
2. Corporate sector
3. Non-profit public institutions
4. Non-profit institutions serving households

✅ Correct Answer: 1

Which of the following is a departmental enterprise of the Government of India?

1. Reserve Bank of India
2. Indian Oil Corporation
3. Indian Railways
4. Food Corporation of India

✅ Correct Answer: 3

In which of the following sectors does production for self-consumption generally take place?

1. Government administrative enterprises
2. Private corporate sector
3. Non-departmental public enterprises
4. House-holds

✅ Correct Answer: 4

Subsistence production refers to:

1. Production for self-consumption only
2. Production of necessities of life
3. Exports equaling imports
4. Low levels of production

✅ Correct Answer: 1

Collective wants include:

1. Sum total of all goods and services wanted by individuals
2. Goods like refrigerators shared by members of a family
3. Newspapers
4. Defence of a country

✅ Correct Answer: 4

Which of the following are durable use producer-goods?

1. Fertilisers
2. Tractors
3. Diesel oil
4. Fodder for cattle

✅ Correct Answer: 2

Demand for intermediate consumption arises in:

1. Consumer households
2. Government enterprises only
3. Corporate enterprises only
4. All producing sectors of the economy

✅ Correct Answer: 4

Expenditure on the purchase of new replacement parts of machinery installed by a firm is part of:

1. Fixed capital formation
2. Consumption of capital
3. Intermediate consumption
4. Final consumption

✅ Correct Answer: 3

Which of the following is an expenditure on intermediate consumption?

1. Purchase of coal by a steel factory
2. Purchase of coal by a dealer in coal
3. Purchase of coal by a household
4. All of the above

✅ Correct Answer: 1

Demand for final consumption arises in:

1. Household sector only
2. Government sector only
3. Both (a) & (b)
4. All sectors

✅ Correct Answer: 3

Which of the following activities of a farmer is an example of intermediate consumption?

1. Purchase of tractor
2. Payment of interest to a co-operative bank
3. Electricity charges for operating a pump
4. Wages paid to workers at harvesting time

✅ Correct Answer: 3

Imputed rental value of owner occupied dwellings is a part of:

1. Intermediate consumption
2. Capital formation
3. Final consumption
4. Expenditure on consumer durably

✅ Correct Answer: 3

Sale of old newspapers by a household is a part of:

1. Net final consumption expenditure of the household
2. Value added by the household sector
3. Capital formation
4. Transfer payments

✅ Correct Answer: 1

Which of the following constitutes a part of domestic fixed capital formation?

1. Net purchase of second-hand assets by corporate enterprises
2. Net purchase of second-hand physical assets from abroad
3. Expenditure on new parts of physical assets
4. Accumulation of stocks of fertilisers

✅ Correct Answer: 2

Purchases made by the US Embassy in India are part of:

1. Net factor earnings from abroad
2. Transfer payments
3. Domestic consumption expenditure
4. Exports from India to the USA

✅ Correct Answer: 4

Direct purchases abroad made by the government on current account are a part of:

1. Final consumption
2. Investments
3. Net factor payments abroad
4. Current transfers from the rest of the world

✅ Correct Answer: 1

Which of the following is not a part of net investment in an economy?

1. Purchase of old shares
2. Purchase of a wall-clock by a factory
3. Purchase of wall-clock by a household
4. Increasing the storage of raw materials

✅ Correct Answer: 1

Which of the following is included in the consumption of fixed capital?

1. Fall in the price of machinery and other stocks
2. Expenditure on repairs and maintenance
3. Destruction of buildings in an earthquake
4. Normal wear and tear machinery while in use

✅ Correct Answer: 4

Gross domestic fixed-capital formation does not include:

1. Net purchase of second hand machinery by private corporate sector from Government
2. Net imports of second-hand machinery from abroad
3. Own account production of news assets
4. Construction of new roads and bridges

✅ Correct Answer: 1

Value of output differs from the value added by the amount of:

1. Indirect taxes
2. Wages and Salaries
3. Intermediate consumption
4. Gifts received from abroad

✅ Correct Answer: 3

The gross fixed investment in an economy during a year is Rs. 200 Crore. The economy possessed Rs 1200 Crore worth of fixed capital at the beginning of the year and the rate of depreciation is 10% per annum. What is the net value of fixed capital stock held at the end of the year?

1. Rs 1600 crore
2. Rs 920 crore
3. Rs 1280 crore
4. Rs 1200 crore

✅ Correct Answer: 3

In consumption of capital is equal to gross fixed investment then:

1. Net investment is zero
2. Net investment is negative
3. Net investment is positive
4. National income is constant

✅ Correct Answer: 1

Which of the following constitutes an investment by a household?

1. Purchasing a washing machine
2. Painting a house
3. Purchasing a new house
4. Purchasing a new car

✅ Correct Answer: 3

Net value added is equal to:

1. Payments accruing to factors of production
2. Compensation of employees
3. Wages plus rent plus interest
4. Value of output minus depreciation

✅ Correct Answer: 1

Addition to the stocks of food grains by the Food Corporation of India is a part of:

1. Net fixed investment
2. Net revenue of the Government sector
3. Gross capital formation
4. Final consumption

✅ Correct Answer: 3

Mixed income of the self-employed means:

1. Gross profits received by a proprietorship
2. Rent interest and profit of an enterprise
3. Combined factor payments which are not distinguishable
4. Wages due to family workers

✅ Correct Answer: 3

Operating surplus implies:

1. Gross value added minus profits
2. Net income from property and entrepreneurship
3. Net profits of public enterprises
4. Part of profits which are reinvested

✅ Correct Answer: 2

Operating surplus arises in:

1. Government sector only
2. Household sector only
3. Public enterprises only
4. All producing enterprises in the corporate sector

✅ Correct Answer: 4

Operating surplus differs from net value added by the amount of:

1. Compensation of employees
2. Net indirect taxes
3. Consumption of fixed capital
4. Dividends

✅ Correct Answer: 1

dentify the item which is not a factor payment:

1. Free uniforms to defence personnel
2. Salaries and allowance to the members of Parliament
3. Imputed rent of an owner-occupied building
4. Scholarships given to scheduled caste students

✅ Correct Answer: 4

Which of the following is an example of factor-income from abroad?

1. Interest earned by a non-resident Indian on his bank account in India
2. Export of handicrafts from India to the UK
3. Money sent by an engineer employed in London to his family in Delhi
4. Profits earned by a branch of the State Bank of India in London

✅ Correct Answer: 4

Transfer payments refer to payments which are made:

1. Without any exchange of goods and services
2. To workers on transfer from one job to another
3. As compensation of employees
4. None of the above

✅ Correct Answer: 1

Personal disposable income is:

1. Always equal to personal income
2. Always more than personal income
3. Equal to personal income minus direct taxes paid by household
4. Equal to personal income minus indirect taxes

✅ Correct Answer: 3

If during a year the national income at constant prices goes up by 5% while prices also rise by 5% and population registers a growth of 2% then the real per capita income will:

1. Remain constant
2. Rise by 2%
3. Decrease by 3%
4. Increase by 3%

✅ Correct Answer: 4

National income estimates of India are published both at current and constant prices. What is the base year for constant price estimates published at present?

1. 1960-61
2. 1970-71
3. 1980-81
4. 1985-86

✅ Correct Answer: 3

The national income accojnts direct personal taxes are recorded as:

1. Receipts of the government sector and payments of the corporate sector
2. Receipts of the government sector and payments of the household sector
3. Transfer from the household sector to the government sector
4. Disbursements of the government sector

✅ Correct Answer: 2

For which of the following sectors is the income method used for estimation of national income of Pakistan?

1. Agriculture and allied activities
2. Pushing
3. Forestry
4. Banking and insurance

✅ Correct Answer: 4

Identify the sector in respect of which the expenditure method is used for estimating national income in India:

1. Registered manufacturing
2. Construction
3. Public administration and defence
4. Real estate ownership of dwellings and business services

✅ Correct Answer: 2