National income is primarily used to measure:
A) A country’s total economic output
B) The wealth of a nation
C) The level of government spending
D) The quality of life of citizens
Which of the following is NOT included in the calculation of national income?
A) Wages paid to employees
B) Income from illegal activities
C) Rent paid for property
D) Profits earned by businesses
Gross Domestic Product (GDP) refers to:
A) The total value of goods and services produced by a country’s citizens
B) The total value of goods and services produced within a country’s borders
C) The value of imports and exports of a country
D) The value of goods and services produced by government agencies
Net National Product (NNP) is calculated by:
A) Adding depreciation to GDP
B) Subtracting depreciation from GNP
C) Adding subsidies to GNP
D) Subtracting indirect taxes from GDP
The income method of calculating national income includes:
A) Consumption expenditure only
B) Adding taxes and subsidies
C) Summing all income earned by individuals and businesses
D) Calculating total market value of goods and services
Which of the following is a method of measuring national income?
A) Consumer expenditure method
B) Income method
C) Expenditure method
D) All of the above
GDP at market price is equal to:
A) GDP at factor cost + Indirect taxes – Subsidies
B) GNP – Depreciation
C) Net exports + Imports
D) GNP at market price
The expenditure method for calculating national income adds together:
A) Consumption, government spending, and investment
B) Consumption, wages, and profits
C) Total income of the population
D) Government revenue and subsidies
Which of the following would be classified as an intermediate good?
A) Steel used to make cars
B) A finished car sold to a consumer
C) Milk sold to a consumer
D) A final computer sold to a consumer
The Real GDP is adjusted for:
A) Changes in the production capacity
B) Changes in the general price level
C) Depreciation
D) Government taxation policies
Which of the following measures national income by summing up the values of all final goods and services produced?
A) Income method
B) Output method
C) Expenditure method
D) All of the above
Personal income includes:
A) Total income of businesses
B) Only income earned from wages
C) Income received by individuals before taxes are deducted
D) Only disposable income
Which of the following is considered a transfer payment?
A) Government spending on infrastructure
B) Social security payments to retirees
C) Wages of government employees
D) Corporate tax payments
The difference between GNP and GDP is:
A) Net income from abroad
B) Gross income from domestic activities
C) Total foreign income
D) Depreciation
Net factor income from abroad refers to:
A) The difference between imports and exports
B) The income earned by residents abroad minus income earned by foreigners in the country
C) The value of goods and services produced domestically
D) The total capital outflows
National income accounting helps governments in:
A) Calculating the country’s total wealth
B) Setting interest rates
C) Monitoring and regulating inflation
D) Estimating the total output of the economy
Which of the following is included in GDP but not in GNP?
A) Income earned by foreign workers within the country
B) Profit made by domestic companies operating abroad
C) Rent received by domestic citizens living abroad
D) Interest payments on foreign loans
The consumption expenditure includes:
A) All spending on goods and services by businesses
B) Spending on final goods and services by households
C) Government spending on military
D) Exports and imports of goods and services
Which of the following is an example of a final good?
A) A television sold to a retailer
B) Wheat purchased by a miller
C) A car sold to a consumer
D) Iron ore used in steel production
GDP deflator is calculated by:
A) Nominal GDP / Real GDP
B) Real GDP / Nominal GDP
C) Nominal GDP / Base year GDP
D) Real GDP / Base year GDP
The output method calculates national income by:
A) Adding the income of households
B) Subtracting taxes from total income
C) Summing up the total value of goods and services produced
D) Including government revenue and transfers
Gross National Income (GNI) includes:
A) The value of goods produced within a country’s borders
B) The value of income earned by a country’s citizens abroad
C) The total value of government revenue
D) Only capital goods produced
Real GDP per capita is used to measure:
A) The total output of an economy
B) The average income of citizens in an economy
C) The inequality in income distribution
D) The number of people living below the poverty line
Which of the following would increase the GDP of a country?
A) Decrease in government expenditure
B) Increase in exports of goods and services
C) Increase in unemployment rate
D) Increase in income taxes
A decrease in national income will lead to:
A) Higher employment rates
B) Reduced consumer spending
C) Increased government tax revenue
D) Increased production capacity
The GDP at factor cost is calculated by:
A) Subtracting indirect taxes from GDP at market price
B) Adding subsidies to GDP at market price
C) Subtracting depreciation from GNP
D) Adding interest payments to GDP
The total output of the economy at market prices is measured by:
A) GDP
B) GNP
C) NNP
D) Disposable income
The “income method” of calculating national income focuses on:
A) The money spent on goods and services
B) The value added by each producer in the economy
C) The total income received by the factors of production
D) The total market value of final goods
In the national income, the term “factor income” refers to:
A) The earnings from exports
B) Payments to the factors of production (wages, rent, interest)
C) The amount of savings in an economy
D) The value of capital goods used in production
The concept of “value-added” in national income refers to:
A) The total value of final goods produced in an economy
B) The difference between total income and expenses in a business
C) The contribution of each firm to the economy’s total output
D) The total wages earned by workers in an economy
To avoid double-counting in GDP calculation, we only include:
A) Intermediate goods
B) Final goods and services
C) Government transfers
D) Exports of services
