Free Understanding GDP 03 Practice Test - 12th Grade - Commerce
Question 1
Consumption of all goods and services in the economy during the period of an accounting year is known as :
Aggregate demand
Aggregate supply
Aggregate consumption
None of these
SOLUTION
Solution : C
Consumption of all goods and services in the economy during the period of an accounting year is called aggregate consumption.
Question 2
Domestic product is equal to :
National product + Net factor income from abroad
National product - Net factor income from abroad
National product ÷ Net factor income from abroad
National product × Net factor income from abroad
SOLUTION
Solution : B
Domestic product is "National product - Net factor income from abroad".
Question 3
Value-added method measures the contribution of which of the following within the domestic territory of a country?
Household consumers
The producing enterprises owned by residents of the country
The producing enterprises owned by the non-residents of the country
Both (b) and (c)
SOLUTION
Solution : D
The producing enterprises owned by the non-residents of the country and he producing enterprises owned by residents of the country are included in the value-added method.
Question 4
Differences between closing stock and opening stock during an accounting year are known as:
Increase in stock
Change in stock
Decrease in stock
None of these
SOLUTION
Solution : B
Change in stock refers to the difference between opening and closing stock.
Question 5
Which of the following is true about GDP?
It is a stock variable
It is a flow variable
It is not a variable
Its value is indeterminate
SOLUTION
Solution : A
GDP is a stock variable.
Question 6
The summation of the total production of all firms and industries in the economy gives us the ____________ or value-added method.
Investment
Income
Expenditure
Production
SOLUTION
Solution : D
The value-added and the production methods are one and the same.
Question 7
The opposite to a stock variable is called:
Inventory variable
Flow variable
Spin variable
Rolling variable
SOLUTION
Solution : B
The opposite to a stock variable is flow variable, which is dynamic is nature.
Question 8
Wealth is an example of:
Stock variable
Flow variable
Constant
None of the above
SOLUTION
Solution : A
Wealth is a stock variable.
Question 9
In the value added method, we subtract the intermediate consumption from total value to avoid the problem of:
Including factor cost
Exclusion of incomes from abroad
Double counting
Indirect tax miscalculation
SOLUTION
Solution : C
In order to avoid double counting, we subtract the intermediate consumption from total value.
Question 10
Calculate the value added in the primary sector 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
400
800
750
1,300
SOLUTION
Solution : A
Value added = Value of output in primary sector - Value of raw materials purchased by primary sector
= 800 - 400
= 400