Free Understanding GDP 02 Practice Test - 12th Grade - Commerce 

Question 1

Those goods which satisfy human wants directly are called :

A.

Intermediate goods

B.

Consumer goods

C.

Capital Goods

D.

None of these

SOLUTION

Solution : B

Consumer goods satisfy human wants directly. 

Question 2

If a car is purchased by a taxi-operator, it will be regarded as a:

A.

Capital good

B.

Intermediate good

C.

Final good

D.

Both (a) and (c)

SOLUTION

Solution : D

The car will be both a capital and a final good. 

Question 3

Market price of the final goods and services (including depreciation) produced within the domestic territory of a country during an accounting year, is called :

A.

GDP at market price

B.

GNP at market price

C.

GDP at factor cost

D.

GNP at factor cost

SOLUTION

Solution : A

GDP refers to the total market value of all goods and services. 

Question 4

 Household inventory is:

A.

Not included in national income

B.

A stock concept

C.

Both (a) and (b)

D.

None of these 

SOLUTION

Solution : C

 Household inventory is a stock variable, and it is not included in national income. 

Question 5

Which of the following items is not included while estimating national income by income method?

A.

Rent

B.

Mixed income

C.

Fixed investment

D.

Undistributed profits

SOLUTION

Solution : C

Fixed investment is not included in the income method. 

Question 6

Own account production of services is not included in national income because:

A.

Services are different from goods

B.

Services are not productive

C.

It is difficult to measure market value of such services

D.

None of these

SOLUTION

Solution : C

Market value cannot be estimated for these services. 

Question 7

Which of these economic agents supply labour as a factor of production?

A.

Households

B.

Firms

C.

Central Banks

D.

Governments

SOLUTION

Solution : A

Households supply the input of labour for production

Question 8

To which of the following factors of production does the payment of interest go to?

A.

Land

B.

Labour

C.

Capital

D.

Entrepreneurship

SOLUTION

Solution : C

Capital earns returns in the form of interest.

Question 9

How many methods do we have in order to calculate national income?

A.

2

B.

3

C.

4

D.

5

SOLUTION

Solution : B

We have 3 approaches to calculating national income or GDP.

Question 10

The stock of unsold finished or unfinished goods, and unused raw materials and intermediate goods that a firm carries from one year to another is called ___. 

SOLUTION

Solution :

The stock of unsold finished or unfinished goods, and unused raw materials and intermediate goods that a firm carries from one year to another is called inventory.

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