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CodeVID-M11-WS
National Income — Practice Worksheet
Chapter: National Income
Topic: National Income
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
National income is the total money value of all ____ goods and services produced in a year.
  • A.Intermediate
  • B.Final
  • C.Imported
  • D.Free
2.
GDP measures output produced:
  • A.Within the country's borders
  • B.Only abroad
  • C.By residents anywhere
  • D.By the government only
3.
GNP measures output produced by the country's:
  • A.Borders
  • B.Residents (at home or abroad)
  • C.Government only
  • D.Foreigners only
4.
GNP equals GDP plus:
  • A.Depreciation
  • B.Net factor income from abroad
  • C.Indirect taxes
  • D.Subsidies
5.
Net National Product equals GNP minus:
  • A.Depreciation
  • B.Taxes
  • C.Imports
  • D.Wages
6.
Depreciation means the ____ of capital.
  • A.Wear and tear
  • B.Increase
  • C.Sale
  • D.Tax
7.
National income is NNP measured at:
  • A.Market price
  • B.Factor cost
  • C.Retail price
  • D.Wholesale price
8.
Income actually received by households is:
  • A.National income
  • B.Personal income
  • C.GDP
  • D.Depreciation
9.
Disposable income equals personal income minus:
  • A.Direct taxes
  • B.Indirect taxes
  • C.Depreciation
  • D.Savings
10.
Per-capita income equals national income divided by:
  • A.Population
  • B.Taxes
  • C.Area
  • D.Firms
11.
Which is NOT a method of measuring national income?
  • A.Product method
  • B.Income method
  • C.Expenditure method
  • D.Barter method
12.
Adding rent, wages, interest and profit is the:
  • A.Income method
  • B.Product method
  • C.Expenditure method
  • D.Tax method
13.
The expenditure-method formula is:
  • A.C + I + G + (X − M)
  • B.Rent + wages
  • C.GDP − depreciation
  • D.C × I
14.
Counting intermediate goods' value more than once is:
  • A.Value addition
  • B.Double counting
  • C.Depreciation
  • D.Net export
15.
All three methods give the same national income because production equals income equals:
  • A.Expenditure
  • B.Tax
  • C.Population
  • D.Depreciation
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
Indian software engineers working in the USA send back earnings. These earnings are included in India's GNP but not its GDP because GNP counts output by:
  • A.Residents wherever they are
  • B.Foreigners only
  • C.The government only
  • D.Machines
17.
If GDP = ₹200, NFIA = −₹5 and depreciation = ₹20, then NNP (GNP − depreciation) equals:
  • A.₹175
  • B.₹225
  • C.₹185
  • D.₹215
18.
A steel maker sells steel to a car maker who sells cars. To avoid double counting, national income includes:
  • A.Only the final cars (or the value added at each stage)
  • B.Both the steel and the cars fully
  • C.Only the steel
  • D.Neither
19.
A country's GDP is high but its per-capita income is low. The most likely reason is a:
  • A.Very large population
  • B.Very small population
  • C.High NFIA
  • D.Low depreciation
20.
When the government cuts direct taxes, households' ____ income rises, leaving more to spend or save.
  • A.Disposable
  • B.National
  • C.Gross domestic
  • D.Factor
21.
All three methods of measuring national income agree because the value of output equals the:
  • A.Income generated and the expenditure on it
  • B.Tax collected
  • C.Population
  • D.Depreciation
22.
Measuring national income in a developing country is hard partly because of the large:
  • A.Unorganised sector and non-monetary transactions
  • B.Number of central banks
  • C.Amount of GNP
  • D.Number of methods
23.
National income at factor cost differs from NNP at market price by the amount of:
  • A.Net indirect taxes
  • B.Depreciation
  • C.Direct taxes
  • D.Exports
24.
A rising national income year after year is generally a sign that the economy is:
  • A.Growing
  • B.Shrinking
  • C.Unchanged
  • D.Bartering
25.
In the expenditure method, 'net exports' is calculated as:
  • A.Exports minus imports
  • B.Exports plus imports
  • C.Imports minus exports
  • D.Exports times imports

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (B) Final
  2. (A) Within the country's borders
  3. (B) Residents (at home or abroad)
  4. (B) Net factor income from abroad
  5. (A) Depreciation
  6. (A) Wear and tear
  7. (B) Factor cost
  8. (B) Personal income
  9. (A) Direct taxes
  10. (A) Population
  11. (D) Barter method
  12. (A) Income method
  13. (A) C + I + G + (X − M)
  14. (B) Double counting
  15. (A) Expenditure
Section B — Challenge / Olympiad (2 marks each)
  1. (A) Residents wherever they are
  2. (A) ₹175
  3. (A) Only the final cars (or the value added at each stage)
  4. (A) Very large population
  5. (A) Disposable
  6. (A) Income generated and the expenditure on it
  7. (A) Unorganised sector and non-monetary transactions
  8. (A) Net indirect taxes
  9. (A) Growing
  10. (A) Exports minus imports
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