Indian Economy - National Income - MCQs with answers - Part 2

Indian Economy - National Income - MCQs with answers - Part 2


1. Consider the following statements and identify the right ones.

i. Personal income refers to the income of individuals of a country.
ii. The income at their disposal after paying direct taxes is called disposable income

a. I only
b. ii only
c. both
d. none

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ANSWER: c. both

The income of the individuals at their disposal after paying direct taxes like income tax is called disposable income.



2. Which of the following is added to national income while calculating personal income?

a. Transfer payments to individuals
b. Social security contributions
c. Corporate taxes
d. Undistributed profits

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ANSWER: a. Transfer payments to individuals

Personal income refers to the income of the individuals of a country. While transfer payments are added, the other three are subtracted.



3. Which of the following method/s is/are used to calculate national income in India?

a. Production method
b. Expenditure method
c. Income method
d. All the above

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ANSWER: d. All the above

Due to non-availability of the data, no single method can solely be used in India. We use a mixture of all the three.



4. The national income estimation is the responsibility of

a. NSSO
b. CSO
c. Finance Ministry
d. National Income Committee

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ANSWER: b. CSO



5. Consider the following statements and identify the right ones.

i. CSO is a premier statistical institution for collecting data in India
ii. It presents the national income estimates twice a year.

a. I only
b. ii only
c. both
d. none

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ANSWER: a. I only

Central Statistical Organization was established in 1950 and is vested with the responsibility of national income estimation. It presents the estimates once in a year.



6. As per the CSO classification, which of the following does not fall under the industrial sector?

a. Construction
b. Manufacturing
c. Fisheries
d. Mining

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ANSWER: c. Fisheries

As per the CSO classification, fisheries fall under the category of agriculture sector.



7. As per the CSO classification, which of the following does not fall under finance and real estate category?

a. Banking
b. Construction
c. Insurance
d. Real estate

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ANSWER: b. Construction

As per the CSO classification, construction falls under the category of industrial sector.



8. As per the CSO classification, which of the following does not fall under industrial sector?

a. Electricity
b. gas and water supply
c. transport and communication
d. manufacturing

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ANSWER: c. transport and communication

As per the CSO classification, transport and communication falls under transport, communication and trade category.



9. Consider the following statements and identify the right ones.

i. The data for NI and PCI are collected at current prices.
ii. They are deflated using the deflator index to get value at constant prices.

a. I only
b. ii only
c. both
d. none

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ANSWER: c. both

This is done so because the national income can increase either due to increase in production of goods and services or in prices.



10. The most appropriate measure of a country's economic growth is

a. GDP
b. NDP
c. Per capita real income
d. GNP

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ANSWER: c. Per capita real income

Per capita income is the average income of the country. Per capita real income takes inflation into consideration.


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