Free Understanding GDP 01 Practice Test - 12th Grade - Commerce 

Question 1

A quantity measured per unit of time period is known as :

A.

Stock variable

B.

Flow variable

C.

Inventory

D.

None of these

SOLUTION

Solution : B

Flow variables are measured per unit time. 

Question 2

Flow of goods and services across different sectors of the economy is called :

A.

Real flow

B.

Circular Flow

C.

Monetary Flow

D.

Inventory Flow

SOLUTION

Solution : A

Real flow is the flow of goods and services. 

Question 3

A car running between Delhi and Agra at a speed of 120 km/h includes: 

A.

Only stock variables

B.

Only flow variables

C.

Both a stock and a flow variable

D.

None of these

SOLUTION

Solution : B

Velocity is a flow variable. 

Question 4

As a result of double counting, national income is:

A.

Over-estimated

B.

Underestimated

C.

Correctly estimated 

D.

Not estimated for the currency year 

SOLUTION

Solution : A

National income is overestimated with the issue of double-counting. 

Question 5

Which of the following items is not included while estimating GNP of a country at market price?

A.

Sales of the enterprises

B.

Indirect taxes

C.

Remittances by NRIs

D.

Subsidy

SOLUTION

Solution : C

Remittances from NRIs are excluded as they are transfer payments. 

Question 6

Wheat is an example of:

A.

Final good

B.

Intermediate good

C.

Either a or b, depending on the use

D.

Either a or b, depending on the quantity

SOLUTION

Solution : C

Wheat can be either a final or an intermediate good depending on how it is consumed.

Question 7

Second-hand cars are not accounted for in the GDP. State true or false.

A.

True

B.

False

SOLUTION

Solution : A

Second-hand items are not taken into account while calculating GDP.

Question 8

A key difference between goods and services is :

A.

Price

B.

Tangibility

C.

Size

D.

Mode of payment

SOLUTION

Solution : B

Goods are tangible, physical items, while services are not tangible.

Question 9

Calculate the total value added from the following data. Ignore units. Value of output in primary sector800Value of output in secondary sector200Value of output in tertiary sector300Value of raw materials purchased by primary sector400Value of raw materials purchased by secondary sector100Value of raw materials purchased by tertiary sector50

A.

400

B.

800

C.

750

D.

1,300

SOLUTION

Solution : C

Value added = Value of output in all sectors-Value of raw materials purchased by all sectors

Question 10

Suppose at the beginning of the year, company ABC had 5 units in its inventory. At the end of the year, it had 50 units in its inventory. The change in stock here is:

A.

5

B.

45

C.

(-) 45

D.

55

SOLUTION

Solution : B

Change in stock = Closing stock - Opening stock = 50 - 5 = 45

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