Free Measures of National Income 02 Practice Test - 12th Grade - Commerce
Question 1
Real GDP is always larger than real GDP per capita. State true or false.
True
False
SOLUTION
Solution : A
Real GDP per capita = Real GDPPopulation. Therefore the given statement is true.
Question 2
Which of the following is an alternate measure of well-being currently used that incorporates GDP, but does not rely exclusively on income as a measure of well-being?
Human Development Index (HDI)
Real GDP per capita
National Income per capita
All of these
SOLUTION
Solution : A
HDI is a measure of well-being that includes health (measured with life expectancy), wealth (measured with GDP per capita), and education (measured with an education index), that can be used to compare countries' social and economic development, as well as track this development over time.
Question 3
Financial help to a victim is:
Transfer payment
Factor income
Net factor income from abroad
None of these
SOLUTION
Solution : A
Financial help to a victim is a transfer payment.
Question 4
Personal income is equal to:
Private income + Corporate profit tax - Undistributed profits
Private income - Corporate profit tax + Undistributed profits
Private income + Corporate profit tax + Undistributed profits
Private income - Corporate profit tax - Undistributed profits
SOLUTION
Solution : D
Personal income = Private income - Corporate profit tax - Undistributed profits
Question 5
If income is distributed evenly, the Gini co-efficient is:
Zero
0.5
1
Undefined
SOLUTION
Solution : A
A Gini coefficient of zero corresponds to precise equality in income distribution
Question 6
Factor income from NDP accruing to public sector is equal to
income from property and enterprise of the government going to departmental enterprises
savings of non-departmental enterprises
both A and B
none of these
SOLUTION
Solution : C
Factor income from NDP accruing to public sector is equal to income from property and enterprise of the government going to departmental enterprises and savings of non-departmental enterprises.
Question 7
The impact of an externality is:
positive
negative
either positive or negative
neither positive nor negative
SOLUTION
Solution : C
The impact of an externality can be either positive or negative.
Question 8
GDP growth as an index of welfare loses its significance if it is accompanied with deeper economic divide.
True
False
SOLUTION
Solution : A
Economic divide indicates the increasing gap between the rich and poor people. It the gap increases, GDP growth loses its significance.
Question 9
Domestic income, as well as national income, include only factor incomes.
True
False
SOLUTION
Solution : A
True. National income is the sum total of factor incomes earned by normal residents of a country during a given year. Domestic income is the sum total of factor incomes generated within the domestic territory of a country.
Question 10
Depreciation of fixed capital assets refers to :
Normal wear and tear
Foreseen obsolescence
Unforeseen obsolescence
Both A and B
SOLUTION
Solution : D
Depreciation of fixed capital assets refers to normal wear and tear and foreseen obsolescence.