Online Test — National Income
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
National income is the total money value of all ____ goods and services produced in a year.
Intermediate
Final
Imported
Free
Explanation: Only final goods and services are counted.
Question 2 of 15
GDP measures output produced:
Within the country's borders
Only abroad
By residents anywhere
By the government only
Explanation: GDP is based on territory — within the borders.
Question 3 of 15
GNP measures output produced by the country's:
Borders
Residents (at home or abroad)
Government only
Foreigners only
Explanation: GNP is based on residents/nationals.
Question 4 of 15
GNP equals GDP plus:
Depreciation
Net factor income from abroad
Indirect taxes
Subsidies
Explanation: GNP = GDP + Net Factor Income from Abroad.
Question 5 of 15
Net National Product equals GNP minus:
Depreciation
Taxes
Imports
Wages
Explanation: NNP = GNP − Depreciation.
Question 6 of 15
Depreciation means the ____ of capital.
Wear and tear
Increase
Sale
Tax
Explanation: Depreciation is the wear and tear (consumption) of capital.
Question 7 of 15
National income is NNP measured at:
Market price
Factor cost
Retail price
Wholesale price
Explanation: National income = NNP at factor cost.
Question 8 of 15
Income actually received by households is:
National income
Personal income
GDP
Depreciation
Explanation: Personal income is what households actually receive.
Question 9 of 15
Disposable income equals personal income minus:
Direct taxes
Indirect taxes
Depreciation
Savings
Explanation: Disposable income = personal income − direct taxes.
Question 10 of 15
Per-capita income equals national income divided by:
Population
Taxes
Area
Firms
Explanation: Per-capita income = national income ÷ population.
Question 11 of 15
Which is NOT a method of measuring national income?
Product method
Income method
Expenditure method
Barter method
Explanation: The three methods are product, income and expenditure.
Question 12 of 15
Adding rent, wages, interest and profit is the:
Income method
Product method
Expenditure method
Tax method
Explanation: Summing factor incomes is the income method.
Question 13 of 15
The expenditure-method formula is:
C + I + G + (X − M)
Rent + wages
GDP − depreciation
C × I
Explanation: National income = C + I + G + (X − M).
Question 14 of 15
Counting intermediate goods' value more than once is:
Value addition
Double counting
Depreciation
Net export
Explanation: This error is called double counting.
Question 15 of 15
All three methods give the same national income because production equals income equals:
Expenditure
Tax
Population
Depreciation
Explanation: Production = income = expenditure, so all methods match.