Deck 3: National Income and Final Goods

Question 1

If factor cost is greater than marker price, it means that

A)Indirect taxes < subsidies (Subsidy> indirect taxes)
B)Indirect taxes > subsidies
C)I.T = subsidies
D)None

Answer 1

Indirect taxes < subsidies (Subsidy> indirect taxes)

Question 2

An Indian farmer produces wheat without incurring cost of inputs alll sells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs 1,200 to baker. The baker sells bread to consumers for Rs. 1,600. Total added is Rs.

A)1,600
B)2,200
C)1,000
D)1,400

Answer 2

1,600

Question 3

Which of the following is not true about final goods?

A)Final gods satisfy wants of ultimate consumers and producers.
B)Final goods have direct demand as they satisfy the wants directly.
C)Final goods are subject to further transformation in the process of production.
D)Final goods are neither used up as raw-material nor for resale in the same year.

Answer 3

Final goods are subject to further transformation in the process of production.

Question 4

Following is an example of final good:

A)Flour used by a banker in making biscuits
B)Unsold stock of goods lying with the sellers
C)Tyres purchased by a transport company
D)Mobile sets purchased by a mobile dealer

Question 5

Which out of the following is not included in estimation of NI?

A)Subsidized Lunch
B)Old-age Pension
C)Free Medical facilities
D)Construction of a house

Question 6

Which of the following is a synonym of "Undistributed Profits"?

A)Savings of private corporate sector
B)Reserves and Surplus
C)Retained Earnings
D)All of these

Question 7

Piyush's mother is a teacher. She also teaches Piyush. How would you treat this white calculating national income and domestic income?

A)It will be included in the national income, but not in the domestic income.
B)It will be included in the domestic income, but not in the national income.
C)It will be included in domestic income as well as national income.
D)It will neither be included in the domestic income nor in the national income.

Question 8

Subsidy implies Selling the product

A)To the government at higher prices
B)Below the cost of production.
C)Selling the product at loss.
D)Selling the product at cost plus indirect taxes.

Question 9

Which of the following is correct?

A)If national income rises, per capita income must also rise.
B)If population rises, per capita income must fall.
C)If national income rises, welfare of the people must rise.
D)None of the above.

Question 10

Goods which are not used in the production of other goods are called:

A)Capital goods
B)Consumption goods
C)Producer goods
D)Intermediate goods

Question 11

Depreciation is the:

A)Loss of vale of fixed assets in use due to normal wear and tear
B)Loss of value of fixed assets in use due to normal rate of accidental damages
C)Loss of value of fixed assets in the due to foreseen obsolescence
D)All of these

Question 12

Which of following is not included in national income?

A)Factor income
B)Rent
C)Operating surplus
D)Transfer income

Question 13

Which of following is not a capital good?

A)Use of Machine tools
B)Raw Material
C)Advocate's Services
D)Heavy Machinery

Question 14

Which of following is not an intermediate goods?

A)Wheat
B)Gold
C)Service of Doctor
D)Sand and Bricks

Question 15

Which of following is not a final good?

A)Machinery purchased by dealer
B)Machinery purchased by a factory
C)Use of petrol
D)Washing machine

Question 16

Which of following is not a part of national income?

A)Depreciation
B)Net factor income from abroad
C)Operating surplus
D)Mixed income

Question 17

Product method of calculating national income is also known as:

A)Income method
B)Value added method
C)Expenditure method
D)Distribution method

Question 18

Transfer payments refer to payments, which are made:

A)Without any exchange of goods and services
B)To workers on transfer from one job to another
C)As compensation to employees
D)None

Question 19

National Income differs from Net National Product at market price by the amount of:

A)Current transfers from rest of the world
B)Net Indirect Taxes (difference between Indirect tax and subsidy)
C)National debt interest
D)it does not differ

Question 20

Net national product at factor cost is also known as:

A)Net Domestic product
B)Gross National product
C)National Income
D)Personal Income

Question 21

In GNP calculation which of the following should be excluded?

A)Rental incomes
B)Interest payments
C)Dividends
D)Government transfer payment

Question 22

National Income differs from Net National Product at market price by the amount of:

A)Current transfers from rest of the world
B)Net Indirect Taxes
C)National debt interest
D)it does not differ

Question 23

Which property the paper money does not possess:

A)Acceptability
B)Divisibility
C)Durability
D)Portability

Question 24

A saving account in a bank represents the function of money:

A)A measure of value
B)A medium of exchange
C)A standard for deferred payments
D)Store of value

Question 25

A student records her income and spending for past month, she uses the function of money

A)Medium of exchange
B)Standard of deferred payments
C)Store of value
D)Unit of account