Multi-choice 1 Question 1. National income is less than NNP at market price by the amount of — Answers Option 1 Transfer payments Option 2 Direct taxes Option 3 Net indirect taxes Option 4 Depreciation Feedback Wrong option Wrong option Correct option Wrong option Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 2. If the saving function is given by S = -25 + ¼ Y, then what will be the value of marginal propensity to consume ? Answers Option 1 25 Option 2 4 Option 3 ¼ Option 4 ¾ Feedback Wrong option Wrong option Wrong option Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 3. Which of the following is not included in the estimation of NNP by income method ? Answers Option 1 Interest Option 2 Dividends Option 3 Undistributed profit Option 4 Depreciation Feedback Wrong option Wrong option Wrong option Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 4. Which of the following is not correct ? Answers Option 1 In measuring GNP, all kinds of goods and services produced in a country during a year are measured in terms of money Option 2 In estimating GNP, only the final products are taken into account Option 3 The sale and purchase of shares of existing companies are included in GNP Option 4 The income earned through illegal activities is not included in the GNP Feedback Wrong option Wrong option Correct option Wrong option Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 5. Which of the following is a flow concept ? Answers Option 1 Wealth Option 2 Total saving Option 3 Money Option 4 Income Feedback Wrong option Wrong option Wrong option Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 6. If the consumption function is given by C = 20 + ¾ Y, then the value of multiplier will be— Answers Option 1 ¼ Option 2 ½ Option 3 4 Option 4 20 Feedback Wrong option Wrong option Correct option Wrong option Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 7. Which of the following is not included in disposable income ? Answers Option 1 International transfer payments Option 2 Unemployment allowances Option 3 Direct taxes Option 4 Corporate dividends Feedback Wrong option Wrong option Correct option Wrong option Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 8. NNP for a given year can be defined as— Answers Option 1 The profits of manufacturing units after deducting taxes Option 2 The real value of final and intermediate goods Option 3 The market value of all the final goods and services Option 4 The total profits of all the entrepreneurs Feedback Wrong option Wrong option Correct option Wrong option Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 9. If we know the GNP, then we calculate GDP by — Answers Option 1 Adding net indirect taxes Option 2 Subtracting net indirect taxes Option 3 Adding net factor income from abroad Option 4 Subtracting net factor income from abroad Feedback Wrong option Wrong option Wrong option Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 10. Y=C + I + G + (X – M) is— Answers Option 1 An equation Option 2 An identity Option 3 A function Option 4 A formula Feedback Wrong option Correct option Wrong option Wrong option Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback)