# Free Measures of National Income 02 Practice Test - 12th Grade - Commerce

Real GDP is always larger than real GDP per capita. State true or false.

A.

True

B.

False

#### SOLUTION

Solution : A

Real GDP per capita = Real GDPPopulation. Therefore the given statement is true.

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?

A.

Human Development Index (HDI)

B.

Real GDP per capita

C.

National Income per capita

D.

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.

Financial help to a victim is:

A.

Transfer payment

B.

Factor income

C.

D.

None of these

#### SOLUTION

Solution : A

Financial help to a victim is a transfer payment.

Personal income is equal to:

A.

Private income + Corporate profit tax - Undistributed profits

B.

Private income - Corporate profit tax + Undistributed profits

C.

Private income + Corporate profit tax + Undistributed profits

D.

Private income - Corporate profit tax - Undistributed profits

#### SOLUTION

Solution : D

Personal income = Private income - Corporate profit tax -  Undistributed profits

If income is distributed evenly, the Gini co-efficient is:

A.

Zero

B.

0.5

C.

1

D.

Undefined

#### SOLUTION

Solution : A

A Gini coefficient of zero corresponds to precise equality in income distribution

Factor income from NDP accruing to public sector is equal to

A.

income from property and enterprise of the government going to departmental enterprises

B.

savings of non-departmental enterprises

C.

both A and B

D.

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.

The impact of an externality is:

A.

positive

B.

negative

C.

either positive or negative

D.

neither positive nor negative

#### SOLUTION

Solution : C

The impact of an externality can be either positive or negative.

GDP growth as an index of welfare loses its significance if it is accompanied with deeper economic divide.

A.

True

B.

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.

Domestic income, as well as national income, include only factor incomes.

A.

True

B.

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.

Depreciation of fixed capital assets refers to :

A.

Normal wear and tear

B.

Foreseen obsolescence

C.

Unforeseen obsolescence

D.

Both A and B

#### SOLUTION

Solution : D

Depreciation of fixed capital assets refers to normal wear and tear and foreseen obsolescence.