Unit 1: Introduction and National Income
Concept of Growth and Development. Developed, Developing and Emerging Market Economies, Characteristics of Indian Economy; Concept of National Income, GDP. GNP. Net Domestic Product, personal income, Disposable income
- for Hindi Medium students : Unit 1 : परिचय एवं राष्ट्रीय आय | Basics of Indian Economy
Concept
of Growth and Development
The concept
of growth and development in the Indian economy revolves around the expansion
of economic activities, improvements in living standards, and the enhancement
of various social indicators. These terms are often used interchangeably, but
they encompass distinct aspects of economic progress.
Economic
Growth:
Economic
growth refers to the increase in the production and consumption of goods and
services within an economy over time. It is typically measured by the rise in
Gross Domestic Product (GDP), which is the total value of all goods and
services produced within a country's borders in a specific time period.
In the
context of the Indian economy, economic growth is often assessed by tracking
changes in real GDP. A growing GDP indicates that the economy is expanding,
more goods and services are being produced, and people's purchasing power is
increasing. Factors that contribute to economic growth include increased
investment, technological advancements, improved infrastructure, expansion of
industries, and higher productivity.
Economic
Development:
Economic
development goes beyond mere economic growth. It involves a broader set of
changes that lead to an improvement in the quality of life and well-being of
the population. While economic growth focuses on quantitative aspects, economic
development incorporates both quantitative and qualitative improvements,
including:
1. Human
Development: This refers to the enhancement of people's capabilities, health,
education, and overall well-being. It encompasses factors such as literacy
rates, life expectancy, access to quality healthcare and education, and gender
equality.
2. Income
Distribution: Economic development aims to reduce income inequality by ensuring
that the benefits of growth are distributed more equitably among different
segments of the population. A more equitable distribution of income can lead to
reduced poverty and improved social cohesion.
3. Infrastructure
Development: Adequate infrastructure, including transportation, energy, and
communication networks, is crucial for economic development. Well-developed
infrastructure supports industrialization, trade, and overall economic
activities.
4. Employment
Generation: Economic development focuses on creating sustainable employment
opportunities, especially for the growing population. Reducing unemployment and
underemployment is essential to improve living standards and reduce poverty.
5. Social
Indicators: Development also considers improvements in social indicators such
as infant mortality rates, child malnutrition, access to clean water,
sanitation facilities, and housing conditions. These indicators reflect the
overall well-being of the population.
6. Sustainable
Development: Economic development places emphasis on sustainable practices that
consider environmental conservation and resource management. Balancing economic
growth with environmental protection is essential for the long-term well-being
of society.
Challenges
and Considerations:
The Indian
economy faces various challenges in achieving both growth and development:
1. Income
Inequality: Despite economic growth, income inequality remains a significant
challenge. A large proportion of the population still faces poverty and lack of
access to basic services.
2. Unemployment:
India's rapid population growth poses a challenge in terms of creating enough
jobs for its youth. Addressing unemployment is crucial for inclusive
development.
3. Infrastructure
Gap: Infrastructure deficits, especially in rural areas, hinder economic
development. Improving transportation, energy, and communication networks is
essential.
4. Quality
of Education and Healthcare: Ensuring access to quality education and
healthcare for all citizens is crucial for human development and overall
progress.
5. Environmental
Sustainability: The rapid pace of industrialization and urbanization must be
balanced with environmental preservation to ensure sustainable development.
6. Regional
Disparities: Development is uneven across different regions of India. Bridging
regional disparities and ensuring balanced growth is a significant challenge.
In
conclusion, the concept of growth and development in the Indian economy
involves both quantitative economic expansion and qualitative improvements in
the well-being of the population. Economic growth serves as a means to achieve
broader economic development goals, including improvements in human development
indicators, income distribution, employment generation, and sustainable
practices. Achieving a balance between economic growth and development is a
complex task that requires effective policies, investments, and social
initiatives.
Here are
multiple-choice questions (MCQs) along with their answers on the concept of
growth and development in the Indian economy:
1. Which
term refers to the increase in the size and output of an economy over time?
a) Growth
b) Development
c) Inflation
d) Recession
Answer: a) Growth
2. Economic
growth is often measured by changes in:
a) Population growth
b) Gross Domestic Product (GDP)
c) Poverty rate
d) Literacy rate
Answer: b) Gross Domestic Product (GDP)
3.
Development in the Indian economy includes:
a) Only economic factors
b) Both economic and social factors
c) Only technological factors
d) Only political factors
Answer: b) Both economic and social factors
4. Which
factor is NOT typically associated with economic development?
a) Education
b) Healthcare
c) Income distribution
d) Inflation rate
Answer: d) Inflation rate
5. The Human
Development Index (HDI) considers:
a) Only economic factors
b) Only social factors
c) Both economic and social factors
d) Only political factors
Answer: c) Both economic and social factors
6. Which
economic sector includes agriculture, forestry, and fishing?
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Quaternary sector
Answer: a) Primary sector
7. Which
term refers to the process of shifting from an agrarian-based economy to an industrial-based
economy?
a) Globalization
b) Modernization
c) Industrialization
d) Urbanization
Answer: c) Industrialization
8. Which
policy aimed to liberalize and open up the Indian economy in 1991?
a) Green Revolution
b) Make in India
c) Swachh Bharat Abhiyan
d) Economic Liberalization
Answer: d) Economic Liberalization
9. Which is
an indicator of income inequality within a country?
a) GDP per capita
b) Gini coefficient
c) Consumer Price Index (CPI)
d) Foreign Direct Investment (FDI)
Answer: b) Gini coefficient
10. The
"Demographic Dividend" refers to:
a) Rapid population growth leading to higher
GDP
b) Aging population causing economic
decline
c) Shift from agriculture to industry
d) Youthful population contributing to
economic growth
Answer: d) Youthful population contributing
to economic growth
11. Which
economic reform aimed at improving rural employment and poverty reduction?
a) GST (Goods and Services Tax)
b) FDI (Foreign Direct Investment)
c) MGNREGA (Mahatma Gandhi National Rural
Employment Guarantee Act)
d) SEZ (Special Economic Zone)
Answer: c) MGNREGA (Mahatma Gandhi National
Rural Employment Guarantee Act)
12. The
concept of "Trickle-Down Effect" suggests that:
a) Wealth accumulates at the top of society
and slowly benefits everyone else
b) Economic growth benefits only the
poorest segments of society
c) Economic growth has no impact on income
distribution
d) Inflation directly leads to wealth
redistribution
Answer: a) Wealth accumulates at the top of
society and slowly benefits everyone else
13. The
"Five Year Plans" in India aim at:
a) Achieving rapid economic growth
b) Promoting political reforms
c) Eliminating inflation
d)
Reducing unemployment
Answer: a) Achieving rapid economic growth
14. The
concept of "Poverty Line" is based on:
a) The number of luxury goods a person can
afford
b) The minimum income needed to meet basic
needs
c) The average income of the country's
population
d) The income of the top 10% of the
population
Answer: b) The minimum income needed to
meet basic needs
15. Which
sector includes services such as education, healthcare, and tourism?
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Quaternary sector
Answer: c) Tertiary sector
16. Which
index measures the average achievements in three basic dimensions of human
development: health, education, and standard of living?
a) Inflation Index
b) Poverty Index
c) Human Development Index (HDI)
d) Industrial Production Index
Answer: c) Human Development Index (HDI)
17. Which
economic sector involves the processing of raw materials into finished goods?
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Quaternary sector
Answer: b) Secondary sector
18. The
concept of "Brain Drain" refers to:
a) A type of economic recession
b) The movement of skilled individuals from
one country to another
c) An increase in agricultural production
d) The decline in technological
advancements
Answer: b) The movement of skilled
individuals from one country to another
19. Which
type of unemployment occurs when a person is temporarily without a job between
two jobs?
a) Structural unemployment
b) Frictional unemployment
c) Cyclical unemployment
d) Seasonal unemployment
Answer: b) Frictional unemployment
20. Which
policy emphasizes the creation of self-employment opportunities for rural and urban
poor?
a) Swachh Bharat Abhiyan
b) Make in India
c) Skill India
d) National Rural Livelihood Mission (NRLM)
Answer: d) National Rural Livelihood
Mission (NRLM)
21.
"Per Capita Income" is calculated by dividing the:
a) Total national income by the population
b) GDP by the total labor force
c) Total industrial output by the workforce
d) Total agricultural output by the farmers
Answer: a) Total national income by the
population
22. The
concept of "Sustainable Development" aims to balance:
a) Economic growth and political stability
b) Population growth and urbanization
c) Economic growth with environmental
protection and social equity
d) Social development with rapid
industrialization
Answer: c) Economic growth with
environmental protection and social equity
23. Which
index reflects the overall economic health of a country by measuring the prices
of a representative basket of goods and services?
a) GDP Index
b) Poverty Index
c) Consumer Price Index (CPI)
d) Industrial Production Index
Answer: c) Consumer Price Index (CPI)
24. Which
policy aimed at promoting entrepreneurship and manufacturing in India?
a) Make in India
b) Swachh Bharat Abhi
yan
c) Digital India
d) Skill India
Answer: a) Make in India
25. The
concept of "Globalization" refers to:
a) The reduction of international trade
b) The increased interconnectedness of
countries through trade, technology, and finance
c) A focus on domestic industries only
d) The isolation of a country from
international affairs
Answer: b) The increased interconnectedness
of countries through trade, technology, and finance
26. The
"Green Revolution" in India aimed to improve:
a) Environmental conservation
b) Industrial production
c) Agricultural productivity
d) Population growth
Answer: c) Agricultural productivity
27. Which
organization compiles data and publishes reports on global economic development
trends?
a) United Nations Development Programme
(UNDP)
b) International Monetary Fund (IMF)
c) World Trade Organization (WTO)
d) World Health Organization (WHO)
Answer: a) United Nations Development
Programme (UNDP)
28. The
concept of "Inclusive Growth" emphasizes:
a) Economic growth without considering
social factors
b) Economic growth that benefits all
segments of society
c) Economic growth without any government
intervention
d) Economic growth solely driven by foreign
investment
Answer: b) Economic growth that benefits
all segments of society
29. Which
term refers to the total value of all goods and services produced within a
country's borders in a specific time period?
a) Gross National Product (GNP)
b) Net Domestic Product (NDP)
c)
Gross Domestic Product (GDP)
d) National Income (NI)
Answer: c) Gross Domestic Product (GDP)
30. Which
factor is NOT considered a constraint to development in the Indian economy?
a) Lack of infrastructure
b) Income inequality
c) Political stability
d) High population growth
Answer: c) Political stability
Developed,
Developing and Emerging Market Economies
"Developed,"
"developing," and "emerging market" are terms often used to
categorize economies based on their level of economic development,
industrialization, and overall wealth. These terms are not rigidly defined and
can vary depending on the context and the organization using them. In the
Indian economy, these terms are often used to describe different stages of
economic development and growth. Here's a detailed explanation of each
category:
1. Developed
Market Economies:
Developed
economies, also known as advanced economies or industrialized economies, are
characterized by high levels of industrialization, technological advancement,
high income per capita, well-developed infrastructure, and a high standard of
living. These economies have a diverse range of industries, a highly skilled
workforce, and a well-established financial system. They usually have strong
institutions, stable political systems, and well-developed social safety nets.
Examples of
developed economies include countries like the United States, Canada, Germany,
Japan, and many Western European nations. These economies have gone through
multiple stages of industrialization, have a high Human Development Index
(HDI), and generally provide a high quality of life for their citizens.
2. Developing
Market Economies:
Developing
economies, also referred to as emerging economies or transitional economies,
are in the process of industrialization and modernization. These economies
often have lower income per capita, lower levels of industrialization, and less
developed infrastructure compared to developed economies. However, they are
experiencing significant economic growth and development, which might be driven
by factors such as urbanization, increased investment, and growing consumer demand.
Examples of
developing economies include countries like India, China, Brazil, Mexico, and
many countries in Africa and Southeast Asia. These economies are characterized
by a mix of traditional agricultural activities and emerging industrial
sectors.
3. Emerging
Market Economies:
Emerging
market economies are a subset of developing economies that are experiencing
rapid economic growth, increased industrialization, and are opening up to
global markets. They have the potential to become major players on the global
economic stage due to their fast-paced development and growing influence. These
economies often have better investment opportunities and potential for higher
returns, but they also carry higher risks due to their dynamic nature.
India falls into
this category. It has made significant strides in economic development, with a
rapidly growing economy, expanding industrial and service sectors, a large and
young workforce, and increasing urbanization. However, challenges such as
poverty, income inequality, and inadequate infrastructure still persist in many
parts of the country.
In summary,
the terms "developed," "developing," and "emerging
market" are used to categorize economies based on their level of economic
development and industrialization. While India is considered an emerging market
economy due to its ongoing growth and development, it is important to note that
these terms are not fixed and can evolve over time as economies continue to
progress and change.
Multiple-choice
questions (MCQs) related to Developed, Developing, and Emerging Market
Economies in the Indian economy, along with their answers:
1. What is a
characteristic of a developed market economy?
a) Low industrialization
b) High income per capita
c) Rapid urbanization
d) Limited technological advancement
Answer: b) High income per capita
2. Which
term describes economies that are experiencing rapid economic growth and are
opening up to global markets?
a) Developed economies
b) Transitional economies
c) Emerging market economies
d) Developing economies
Answer: c) Emerging market economies
3. Which of
the following countries is often cited as an example of a developed economy?
a) India
b) China
c) Germany
d) Brazil
Answer: c) Germany
4. What is a
common characteristic of developing economies?
a) High levels of industrialization
b) High income per capita
c) Well-developed infrastructure
d) Lower income per capita
Answer: d) Lower income per capita
5. Which
term is synonymous with "emerging economies"?
a) Industrialized economies
b) Advanced economies
c) Transitional economies
d) Developing economies
Answer: c) Transitional economies
6. Which of
the following is an example of an emerging market economy?
a) United States
b) Canada
c) India
d) France
Answer: c) India
7. What is a
key factor that distinguishes developed economies from developing economies?
a) Political instability
b) Low levels of education
c) High levels of industrialization
d) Limited access to healthcare
Answer: c) High levels of industrialization
8. Which
term describes economies that have reached a high standard of living and
technological advancement?
a) Developing economies
b) Industrialized economies
c) Emerging market economies
d) Transitional economies
Answer: b) Industrialized economies
9. Which
region has a higher concentration of developing economies?
a) North America
b) Europe
c) Sub-Saharan Africa
d) Western Europe
Answer: c) Sub-Saharan Africa
10. What is
a characteristic of emerging market economies?
a) Slow economic growth
b) Limited access to global markets
c) High political stability
d) Rapid economic growth
Answer: d) Rapid economic growth
11. Which of
the following terms implies economies that are in the process of
industrialization and modernization?
a) Developed economies
b) Advanced economies
c) Emerging market economies
d) Developing economies
Answer: d) Developing economies
12. Which of
the following countries is an example of a developing economy?
a) United Kingdom
b) Japan
c) Brazil
d) Australia
Answer: c) Brazil
13. Which
term is used to describe economies that have achieved a high Human Development
Index (HDI)?
a) Transitional economies
b) Emerging market economies
c) Developed economies
d) Developing economies
Answer: c) Developed economies
14. India's
economy is often categorized as:
a) A developed economy
b) An emerging market economy
c) A developed market economy
d) An industrialized economy
Answer: b) An emerging market economy
15. Which of
the following countries is considered a developed market economy?
a)
China
b) Russia
c) Canada
d) South Africa
Answer: c) Canada
16. What is
a common challenge faced by developing economies?
a) Low population growth
b) High levels of income equality
c) Rapid industrialization
d) Well-developed infrastructure
Answer: b) High levels of income equality
17. Which
term refers to economies that are transitioning from primarily agrarian-based
economies to more industrialized economies?
a) Developed economies
b) Emerging market economies
c) Developing economies
d) Advanced economies
Answer: c) Developing economies
18. Which
region is often associated with developed economies?
a) South Asia
b) Latin America
c) Sub-Saharan Africa
d) Western Europe
Answer: d) Western Europe
19. What is
a defining characteristic of emerging market economies?
a) High income per capita
b) Stable political systems
c) Low economic growth
d) Rapid urbanization
Answer: d) Rapid urbanization
20. Which of
the following is NOT a characteristic of developed economies?
a) High levels of industrialization
b) High income per capita
c) Well-developed infrastructure
d) High levels of poverty
Answer: d) High levels of poverty
21. What is
the primary indicator used to classify economies as developed, developing, or
emerging?
a) Political stability
b) Industrialization rate
c) Income per capita
d) Population size
Answer: c) Income per capita
22. Which
term is often used interchangeably with "transitional economies"?
a) Developing economies
b) Emerging market economies
c) Industrialized economies
d) Developed economies
Answer: a) Developing economies
23. Which of
the following countries is generally considered an emerging market economy?
a) United States
b) Japan
c) India
d) Germany
Answer: c) India
24. What is
a common challenge faced by emerging market economies?
a) Low population growth
b) High inflation rates
c) Mature industrial base
d) Well-established financial systems
Answer: b) High inflation rates
25. Which of
the following is a characteristic of a developing economy?
a) High income per capita
b) Advanced technology infrastructure
c) Well-developed healthcare system
d) Limited access to education
Answer: d) Limited access to education
26. Which
group of countries is often referred to as BRICS, representing emerging market
economies?
a) Brazil, Russia, India, China, South
Africa
b) Belgium, Romania, Italy, Canada, Spain
c) Bangladesh, Russia, Indonesia, China,
Sweden
d) Bahrain, Russia, India, Canada, Saudi
Arabia
Answer: a) Brazil, Russia, India, China,
South Africa
27. Which
term describes economies that have already achieved high levels of economic
development and technological advancement?
a) Transitional economies
b) Emerging market economies
c) Industrialized economies
d) Developing economies
Answer: c) Industrialized economies
28. What is
a common feature of developing economies?
a) High levels of income equality
b) Advanced healthcare systems
c) Low population growth
d) Well-developed infrastructure
Answer: a) High levels of income equality
29. Which
term describes economies that are in the process of transitioning from
agrarian-based to industrialized
economies?
a) Developed economies
b) Emerging market economies
c) Developing economies
d) Transitional economies
Answer: c) Developing economies
30. Which of
the following is a key characteristic of developed market economies?
a) Rapid population growth
b) High technological backwardness
c) Low income per capita
d) Well-developed infrastructure
Answer: d) Well-developed infrastructure
31. Which
region has a higher concentration of emerging market economies?
a) North America
b) Europe
c) Latin America
d) Western Europe
Answer: c) Latin America
32. Which
term is used to describe economies that have achieved a high standard of living
and well-developed financial systems?
a) Developing economies
b) Emerging market economies
c) Industrialized economies
d) Transitional economies
Answer: c) Industrialized economies
33. Which of
the following countries is often cited as an example of an emerging market
economy?
a) Australia
b) Japan
c) India
d) Germany
Answer: c) India
34. What is
a common characteristic of developing economies?
a) Low levels of industrialization
b) High income per capita
c) Well-developed infrastructure
d) High standard of living
Answer: a) Low levels of industrialization
35. Which
term is often used to describe economies that have achieved high levels of
industrialization and technological advancement?
a) Emerging market economies
b) Transitional economies
c) Developing economies
d) Developed economies
Answer: d) Developed economies
36. Which of
the following terms is associated with economies that are in transition from
agrarian to industrialized economies?
a) Developing economies
b) Developed economies
c) Emerging market economies
d) Transitional economies
Answer: d) Transitional economies
37. Which
region has a higher concentration of developed economies?
a) South Asia
b) Sub-Saharan Africa
c) North America
d) Middle East
Answer: c) North America
38. What is
a defining characteristic of developing economies?
a) High income per capita
b) Strong political stability
c) Well-developed infrastructure
d) Low levels of industrialization
Answer: d) Low levels of industrialization
39. Which of
the following countries is often categorized as an emerging market economy?
a) United Kingdom
b) Japan
c) India
d) France
Answer: c) India
40. What is
a common challenge faced by developed economies?
a) Rapid population growth
b) Limited access to education
c) High levels of poverty
d) Aging population
Answer: d) Aging population
41. Which
term is used to describe economies that are experiencing rapid economic growth
and are becoming more integrated into the global economy?
a) Developed economies
b) Transitional economies
c) Emerging market economies
d) Developing economies
Answer: c) Emerging market economies
42. What is
a common feature of emerging market economies?
a) Mature industrial base
b) Low inflation rates
c) Rapid urbanization
d) Well-established financial systems
Answer: c) Rapid urbanization
43. Which of
the following is NOT a characteristic of developing economies?
a) Low income per capita
b) Limited industrialization
c) High technological advancement
d) Underdeveloped infrastructure
Answer: c) High technological advancement
44. What is
a common challenge faced by emerging market economies?
a) Low levels of economic growth
b) High income inequality
c) Mature industrial base
d) Well-developed financial systems
Answer: b) High income inequality
45. Which
term describes economies that have reached a high level of economic
development, technological advancement, and a high standard of living?
a) Developing economies
b) Emerging market economies
c) Industrialized economies
d) Transitional economies
Answer: c) Industrialized economies
46. Which of
the following is a characteristic of an emerging market economy?
a) Low income per capita
b) Limited access to education
c) Well-established financial systems
d) Mature industrial base
Answer: c) Well-established financial
systems
47. What is
a common challenge faced by developed market economies?
a) High levels of unemployment
b) Low levels of industrialization
c) Inadequate healthcare systems
d) Aging population
Answer: d) Aging population
48. Which
term is often used to describe economies that are primarily agrarian-based and
are in the process of transitioning to industrialized economies?
a) Developing economies
b) Developed economies
c) Emerging market economies
d) Transitional economies
Answer: a) Developing economies
49. Which
region has a higher concentration of developed market economies?
a) Latin America
b) Asia
c) Sub-Saharan Africa
d) Eastern Europe
Answer: b) Asia
50. What is
a characteristic of an emerging market economy?
a) Low levels of economic growth
b) Well-developed infrastructure
c) Stable political systems
d) Rapid economic growth
Answer: d) Rapid economic growth
Concepts
of National Income, GDP, GNP, Net Domestic Product, Personal Income, and
Disposable Income in the context of the Indian economy:
1. National
Income:
National
Income refers to the total monetary value of all goods and services produced
within a country's borders in a specific time period, usually a year. It
provides an overall measure of a country's economic performance and is a
critical indicator of the standard of living and economic well-being of its
citizens.
2. Gross
Domestic Product (GDP):
GDP
represents the total value of all final goods and services produced within a
country's territory during a specific time period, without considering income
earned by foreign residents or foreigners within the country. GDP can be
measured using three approaches: production (value added by industries),
expenditure (total spending on goods and services), and income (total income
earned by factors of production).
3. Gross
National Product (GNP):
GNP is the
total monetary value of all final goods and services produced by a country's
residents (both within the country and abroad) during a specific time period.
It includes GDP and adjusts for net income from abroad (net factor income from
abroad), which is the difference between what residents of the country earn
abroad and what foreigners earn within the country.
4. Net
Domestic Product (NDP):
NDP is the
value of GDP after accounting for depreciation (wear and tear) of capital goods
like machinery, buildings, and equipment. It provides a more accurate measure
of the economic output available for consumption and investment, as it
considers the loss of value in existing capital stock due to usage.
5. Personal
Income:
Personal
Income represents the total income received by individuals from all sources,
including wages, salaries, rent, interest, and dividends. It is a measure of
the income earned by individuals before accounting for taxes and government
transfers.
6. Disposable
Income:
Disposable
Income is the income available to individuals for spending and saving after
deducting taxes and adding government transfers (such as social security
benefits). It reflects the amount of money that households have at their
disposal for consumption and savings.
In the
context of the Indian economy:
- National
Income in India: India calculates its national income using various methods,
including the production approach (summing up value-added in different
sectors), the expenditure approach (summing up consumption, investment,
government spending, and net exports), and the income approach (summing up
compensation of employees, profits, interest, rent, and taxes minus subsidies
on production). The Central Statistical Office (CSO) is responsible for
estimating national income and related statistics.
- GDP in
India: India calculates GDP using the production method, which estimates the
value-added by various sectors. The CSO provides estimates of GDP at constant
prices (base year) and current prices. Additionally, GDP growth rates are
widely tracked to measure economic performance.
- GNP in
India: GNP in India includes GDP and net factor income from abroad. This factor
accounts for the income earned by Indians working abroad and the income earned
by foreigners within India.
- Net
Domestic Product in India: NDP accounts for depreciation and provides a more
realistic measure of the economic output that can be used for consumption and
investment in India.
- Personal
Income in India: Personal income in India includes wages, salaries, property
income (rent, interest, dividends), and transfers. It is an important measure
of the financial well-being of individuals.
- Disposable
Income in India: Disposable income in India considers taxes and government
transfers to estimate the income available to households for spending and
saving. It plays a key role in understanding household consumption patterns and
savings behavior.
These
concepts are crucial tools for economists, policymakers, and researchers to
analyze and formulate economic policies, monitor economic performance, and
assess the well-being of citizens in the Indian economy.
MCQs on
the concepts of National Income, GDP, GNP, Net Domestic Product, Personal
Income, and Disposable Income in the Indian economy.
1. What does
National Income measure?
a) Total population
b) Total goods and services produced
c) Government expenditure
d) Savings of households
Answer: b) Total goods and services produced
2. Gross
Domestic Product (GDP) measures the total value of goods and services produced
within:
a) A region
b) A city
c) A country
d) An industry
Answer:
c) A country
3. What are
the three approaches to measuring GDP?
a) Income, savings, expenditure
b) Inflation, interest rates, exchange rates
c) Production, expenditure, income
d) Taxes, subsidies, investments
Answer: c) Production, expenditure, income
4. Which
approach calculates GDP by summing up the value added at each stage of
production?
a) Income approach
b) Expenditure approach
c) Production approach
d)
Inflation approach
Answer: c) Production approach
5. The
Expenditure Approach calculates GDP by summing up:
a) Total income earned
b) Total consumption, investment, government
spending, and net exports
c) Total savings of households
d)
Total taxes collected by the government
Answer: b) Total consumption, investment,
government spending, and net exports
6. What does
"real GDP" refer to?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in nominal terms
d) GDP with only private sector contribution
Answer: a) GDP adjusted for inflation
7. What is
the formula for calculating GDP using the expenditure approach?
a) GDP = C + I + G + X - M
b) GDP = C + S + T
c) GDP = W + R + I + P
d) GDP = NNP + Depreciation
Answer: a) GDP = C + I + G + X - M
8. Which
organization is responsible for estimating GDP in India?
a) Reserve Bank of India (RBI)
b) Ministry of Finance
c) Central Statistical Office (CSO)
d) Indian Institute of Management (IIM)
Answer: c) Central Statistical Office (CSO)
9. Which
approach to GDP calculation considers all income earned by residents of a
country?
a) Income approach
b) Expenditure approach
c) Production approach
d) Tax approach
Answer: a) Income approach
10. What
does "GDP per capita" represent?
a) Total GDP of a country
b) GDP divided by total population
c) GDP minus inflation
d) GDP multiplied by inflation rate
Answer: b) GDP divided by total population
11. What is
the primary focus of GDP growth rate analysis?
a) Population growth
b) Inflation rate
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
12. What is
the difference between nominal GDP and real GDP?
a) Nominal GDP includes government spending
b) Real GDP includes imports and exports
c) Nominal GDP is adjusted for inflation,
while real GDP is not
d) Real GDP is adjusted for inflation,
while nominal GDP is not
Answer: d) Real GDP is adjusted for
inflation, while nominal GDP is not
13. Which
sector contributes the most to GDP in India?
a) Agriculture
b) Manufacturing
c)
Services
d) Mining
Answer: c) Services
14. Which of
the following is included in the calculation of GDP?
a) Sale of a second-hand car
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Transfer payments from the government
Answer: b) Rent paid for an apartment
15. Which
component of GDP represents government spending on roads and infrastructure?
a) Consumption expenditure
b) Investment expenditure
c) Government expenditure
d) Export expenditure
Answer: c) Government expenditure
16. What
does "net exports" represent in the expenditure approach of GDP
calculation?
a) Total value of exports
b) Total value of imports
c) Difference between exports and imports
d) Difference between government spending
and exports
Answer: c) Difference between exports and
imports
17. What
does "net factor income from abroad" include in GNP calculation?
a) Net income earned by foreign residents
within the country
b) Net income earned by domestic residents
abroad
c) Total government spending
d) Total consumption expenditure
Answer: b) Net income earned by domestic
residents abroad
18. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Depreciation
b) Interest earned
c) Consumption expenditure
d) Government spending
Answer: a) Depreciation
19. What
does "Personal Income" include?
a) Total income earned by individuals
before taxes
b) Total income earned by individuals after
taxes
c) Government spending on infrastructure
d) Total income earned by businesses
Answer: a) Total income earned by
individuals before taxes
20.
Disposable income represents the income available to households after:
a) Depreciation
b) Government transfers and taxes
c) Interest payments
d) Business expenses
Answer: b) Government transfers and taxes
21. What
does "per capita income" represent?
a) Total income earned by a single
individual
b) Average income earned by each citizen
c) Government's income from taxes
d) Total income earned by households
Answer: b) Average income earned by each
citizen
22. In which
approach is GDP calculated by summing up all the value-added at each stage of
production?
a) Income approach
b) Expenditure approach
c) Production approach
d) Import approach
Answer: c) Production approach
23. Which of
the following is NOT included in GDP?
a) The sale of a new car
b) Rent paid for an apartment
c) Wages earned by a factory worker
d) Social security payments
Answer: d) Social security payments
24. The
income approach to calculating GDP includes which of the following components?
a) Consumption, investment, and government
spending
b) Wages, rent, interest, and profits
c) Exports and imports
d) Population growth and inflation
Answer: b) Wages, rent, interest, and
profits
25. What
does GNP represent that GDP does not?
a) Income earned by foreign residents
within the country
b) Total government spending
c) Total consumer spending
d) Total investment spending
Answer:
a) Income earned by foreign residents within the country
26. If a
country's GDP is $1,000, and the depreciation (wear and tear of capital goods)
is $200, what is the Net Domestic Product (NDP)?
a) $800
b) $200
c) $1,000
d) $1,200
Answer: a) $800
27. What is
Personal Disposable Income?
a) Total income before taxes
b) Total income after taxes
c) Total income minus government transfers
d) Total income minus savings
Answer: b) Total income after taxes
28. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of
households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
29. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
30. What is
the difference between GNP and GDP?
a) GNP includes government spending, while
GDP does not
b) GNP includes income earned by foreign
residents, while GDP does not
c) GNP includes net exports, while GDP does
not
d) GNP includes savings, while GDP does not
Answer: b) GNP includes income earned by
foreign residents, while GDP does not
31. Which
approach is used to calculate GDP by summing up the total expenditures on goods
and services?
a) Income approach
b) Production approach
c) Expenditure approach
d) Savings approach
Answer: c) Expenditure approach
32. If a
country's GDP is $1,000 and its exports are $200 while its imports are $150,
what is its net exports?
a) $50
b) $200
c) $150
d) -$50
Answer: a) $50
33. What
does "gross" mean in Gross Domestic Product?
a) Including net exports
b) Excluding depreciation
c) Excluding government spending
d) Including all production values
Answer: d) Including all production values
34. If a
country's GDP at current prices is $1,000 and the GDP deflator is 120, what is
its real GDP?
a) $833.33
b) $1,000
c) $1,200
d) $1,200,000
Answer: a) $833.33
35. In the
expenditure approach, which component represents the total government spending?
a) Consumption expenditure
b) Investment expenditure
c) Government expenditure
d) Net exports
Answer: c) Government expenditure
36. Which
component is NOT included in the calculation of Gross Domestic Product?
a) Private consumption expenditure
b) Government spending on defense
c) Social security payments
d) Exports
Answer: c) Social security payments
37. If a
country's Gross National Product (GNP) is $1,000 and its Net Factor Income from
Abroad is -$100, what is its Gross Domestic Product (GDP)?
a) $1,000
b) $1,100
c) $900
d) $1,100,000
Answer: b) $1,100
38. Which
approach to calculating GDP directly measures the total value added by
industries and sectors?
a) Income approach
b) Production approach
c) Expenditure approach
d) Net factor income approach
Answer: b) Production approach
39. Which of
the following is a component of Disposable Income?
a) Taxes
b) Rent payments
c) Interest earned
d) Dividend payments
Answer: a) Taxes
40. Which
term refers to the loss of value in capital goods due to wear and tear?
a) Depreciation
b) Inflation
c) Deflation
d) Appreciation
Answer: a) Depreciation
41. If a
country's GDP at current prices is $1,200 and its GDP deflator is 150, what is
its real GDP?
a) $1,800
b) $800
c) $1,200
d) $1,500
Answer: b) $800
42. The sum
of wages, rent, interest, and profits forms which approach to calculating GDP?
a) Expenditure approach
b) Income approach
c) Production approach
d) Savings approach
Answer: b) Income approach
43. What is
the relationship between GDP and GNP?
a) GDP includes net factor income from
abroad, while GNP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GDP includes net factor income
from abroad, while GNP does not.
44. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c) It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider non-monetary
transactions.
45. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
46. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
47. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
48. Which of
the following components is included in both GNP and GDP?
a) Income earned by foreign residents
within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
49. If a
country's GDP is $2,000 and its exports are $500 while its imports are $300,
what is its net exports?
a) $200
b) $500
c) $300
d) -$200
Answer: a) $200
50. Which of
the following is NOT included in the calculation of Personal Income?
a) Wages earned by an individual
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Profits earned by a business
Answer: d) Profits earned by a business
51. What is
the primary focus of calculating GDP growth rate?
a) Inflation rate
b) Population growth
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
52. What
does "per capita income" represent?
a) Average income earned by each citizen
b) Total income earned by all citizens
c) Total government revenue
d) Total income earned by businesses
Answer: a) Average income earned by each
citizen
53. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of
households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
54. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
55. What is
the difference between GNP and GDP?
a) GNP includes net factor income from
abroad, while GDP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GNP includes net factor income
from abroad, while GDP does not.
56. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c) It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider non-monetary
transactions.
57. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
58. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
59. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
60. Which of
the following components is included in both GNP and GDP?
a) Income earned by foreign residents
within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
61. If a
country's GDP is $2,000 and its exports are $500 while its imports are $300,
what is its net exports?
a) $200
b) $500
c) $300
d) -$200
Answer: a) $200
62. Which of
the following is NOT included in the calculation of Personal Income?
a) Wages earned by an individual
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Profits earned by a business
Answer: d) Profits earned by a business
63. What is
the primary focus of calculating GDP growth rate?
a) Inflation rate
b) Population growth
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
64. What
does "per capita income" represent?
a) Average income earned by each citizen
b) Total income earned by all citizens
c)
Total government revenue
d) Total income earned by businesses
Answer: a) Average income earned by each
citizen
65. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of
households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
66. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
67. What is
the difference between GNP and GDP?
a) GNP includes net factor income from
abroad, while GDP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GNP includes net factor income
from abroad, while GDP does not.
68. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c) It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider non-monetary
transactions.
69. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
70. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
71. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
72. Which of
the following components is included in both GNP and GDP?
a) Income earned by foreign residents
within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
73. If a
country's GDP is $2,000 and its exports are $500 while its imports are $300,
what is its net exports?
a) $200
b) $500
c) $300
d)
-$200
Answer: a) $200
74
. Which of
the following is NOT included in the calculation of Personal Income?
a) Wages earned by an individual
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Profits earned by a business
Answer: d) Profits earned by a business
75. What is
the primary focus of calculating GDP growth rate?
a) Inflation rate
b) Population growth
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
76. What
does "per capita income" represent?
a) Average income earned by each citizen
b) Total income earned by all citizens
c) Total government revenue
d) Total income earned by businesses
Answer: a) Average income earned by each
citizen
77. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
78. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
79. What is
the difference between GNP and GDP?
a) GNP includes net factor income from
abroad, while GDP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GNP includes net factor income
from abroad, while GDP does not.
80. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c) It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider non-monetary
transactions.
81. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
82. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
83. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
84. Which of
the following components is included in both GNP and GDP?
a) Income earned by foreign residents
within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
85. If a
country's GDP is $2,000 and its exports are $500 while its imports are $300,
what is its net exports?
a) $200
b) $500
c) $300
d)
-$200
Answer: a) $200
86. Which of
the following is NOT included in the calculation of Personal Income?
a) Wages earned by an individual
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Profits earned by a business
Answer: d) Profits earned by a business
87. What is
the primary focus of calculating GDP growth rate?
a) Inflation rate
b) Population growth
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
88. What
does "per capita income" represent?
a) Average income earned by each citizen
b) Total income earned by all citizens
c) Total government revenue
d) Total income earned by businesses
Answer: a) Average income earned by each
citizen
89. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
90. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
91. What is
the difference between GNP and GDP?
a) GNP includes net factor income from
abroad, while GDP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GNP includes net factor income
from abroad, while GDP does not.
92. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c) It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider non-monetary
transactions.
93. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
94. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
95. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
96. Which of
the following components is included in both GNP and GDP?
a) Income earned by foreign residents
within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
97. If a
country's GDP is $2,000 and its exports are $500 while its imports are $300,
what is its net
exports?
a) $200
b) $500
c) $300
d) -$200
Answer: a) $200
98. Which of
the following is NOT included in the calculation of Personal Income?
a) Wages earned by an individual
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Profits earned by a business
Answer: d) Profits earned by a business
99. What is
the primary focus of calculating GDP growth rate?
a) Inflation rate
b) Population growth
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
100. What
does "per capita income" represent?
a) Average income earned by each citizen
b) Total income earned by all citizens
c) Total government revenue
d) Total income earned by businesses
Answer: a) Average income earned by each
citizen
101. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of
households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
102. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
103. What is
the difference between GNP and GDP?
a) GNP includes net factor income from
abroad, while GDP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GNP includes net factor income
from abroad, while GDP does not.
104. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c)
It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider
non-monetary transactions.
105. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
106. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
107. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
108. Which
of the following components is included in both GNP and GDP?
a)
Income earned by foreign residents within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
109. If a
country's GDP is $2,000 and its exports are $500 while its imports are $300,
what is its net exports?
a) $200
b) $500
c) $300
d) -$200
Answer: a) $200
110. Which
of the following is NOT included in the calculation of Personal Income?
a) Wages earned by an individual
b) Rent paid for an apartment
c) Interest earned from a savings account
d) Profits earned by a business
Answer: d) Profits earned by a business
111. What is
the primary focus of calculating GDP growth rate?
a) Inflation rate
b) Population growth
c) Economic development
d) Change in GDP over time
Answer: d) Change in GDP over time
112. What
does "per capita income" represent?
a) Average income earned by each citizen
b) Total income earned by all citizens
c) Total government revenue
d) Total income earned by businesses
Answer: a) Average income earned by each
citizen
113. What is
the main purpose of calculating Disposable Income?
a) To measure the total income earned by
individuals
b) To estimate the total savings of
households
c) To determine the total government
spending
d) To assess the income available for
consumption and savings
Answer: d) To assess the income available
for consumption and savings
114. If a
person's income is $50,000 and they pay $10,000 in taxes, what is their
disposable income?
a) $60,000
b) $50,000
c) $40,000
d) $10,000
Answer: c) $40,000
115. What is
the difference between GNP and GDP?
a) GNP includes net factor income from
abroad, while GDP does not.
b) GNP includes government spending, while
GDP does not.
c) GNP includes depreciation, while GDP
does not.
d) GDP includes income earned by foreign
residents, while GNP does not.
Answer: a) GNP includes net factor income
from abroad, while GDP does not.
116. What is
a common limitation of GDP as a measure of economic well-being?
a) It excludes the service sector.
b) It does not account for inflation.
c) It ignores population growth.
d) It doesn't consider non-monetary
transactions.
Answer: d) It doesn't consider
non-monetary transactions.
117. What
does "nominal GDP" represent?
a) GDP adjusted for inflation
b) GDP without government spending
c) GDP in constant prices
d) GDP in current prices
Answer: d) GDP in current prices
118. Which
factor is excluded when calculating Net Domestic Product (NDP)?
a) Savings
b) Consumption expenditure
c) Government spending
d) Depreciation
Answer: d) Depreciation
119. If a
country's GNP is $1,000 and its Net Factor Income from Abroad is $200, what is
its GDP?
a) $800
b) $1,200
c) $1,000
d) $200
Answer: b) $1,200
120. Which
of the following components is included in both GNP and GDP?
a) Income earned by foreign residents
within the country
b) Depreciation
c) Government transfers
d) Savings of households
Answer: b) Depreciation
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