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CodeVID-M12-WS
National Income and Related Aggregates — Practice Worksheet
Chapter: National Income and Related Aggregates
Topic: National Income and Related Aggregates
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.
The geographical boundary of a country (plus its embassies, ships, etc.) is its:
  • A.Domestic territory
  • B.National border only
  • C.Capital
  • D.Market
2.
A person whose centre of economic interest lies in a country is a:
  • A.Tourist
  • B.Normal resident
  • C.Foreigner
  • D.Diplomat
3.
National income equals domestic income plus:
  • A.Depreciation
  • B.NFIA
  • C.Indirect taxes
  • D.Subsidies
4.
GNP equals GDP plus:
  • A.Depreciation
  • B.Net factor income from abroad
  • C.Net indirect taxes
  • D.Subsidies
5.
NDP equals GDP minus:
  • A.Depreciation
  • B.NFIA
  • C.Taxes
  • D.Imports
6.
NNP at factor cost is also known as:
  • A.GDP
  • B.National Income
  • C.Personal income
  • D.Disposable income
7.
Market price minus net indirect taxes equals:
  • A.Factor cost
  • B.Gross value
  • C.NFIA
  • D.Depreciation
8.
Adding the value added by all producing units is the:
  • A.Income method
  • B.Product method
  • C.Expenditure method
  • D.Deflator
9.
Counting intermediate goods more than once is:
  • A.Value addition
  • B.Double counting
  • C.Depreciation
  • D.Net exporting
10.
Compensation of employees, rent, interest and profit are added in the:
  • A.Product method
  • B.Income method
  • C.Expenditure method
  • D.Deflator method
11.
Transfer payments are excluded from the income method because they:
  • A.Involve no production
  • B.Are too large
  • C.Are taxes
  • D.Are exports
12.
The expenditure method formula for GDP at market price is:
  • A.C + I + G + (X − M)
  • B.Rent + wages
  • C.Nominal ÷ Real
  • D.Value added only
13.
GDP measured at current-year prices is:
  • A.Real GDP
  • B.Nominal GDP
  • C.Potential GDP
  • D.Net GDP
14.
The true measure of economic growth is:
  • A.Nominal GDP
  • B.Real GDP
  • C.GDP deflator
  • D.NFIA
15.
If nominal GDP = 660 and real GDP = 600, the GDP deflator is:
  • A.90
  • B.110
  • C.60
  • D.1.1
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
An Indian company's factory in Dubai earns profit. This profit is part of India's GNP but NOT its GDP because GDP counts output:
  • A.Within the domestic territory only
  • B.By residents anywhere
  • C.Only abroad
  • D.Of the government only
17.
Given GDP_MP = 800, net indirect taxes = 60, depreciation = 50, NFIA = −10, the National Income (NNP_FC) is:
  • A.680
  • B.700
  • C.720
  • D.620
18.
A baker buys flour (₹50) and sells bread (₹120). Counting both ₹50 and ₹120 fully would overstate output by ₹50 — this error is avoided by counting:
  • A.Only the value added (₹70) or only the final bread (₹120)
  • B.Both fully
  • C.Only the flour
  • D.Neither
19.
Why might nominal GDP rise 10% while real GDP rises only 4% in the same year?
  • A.About 6% of the rise was just higher prices (inflation)
  • B.Output fell
  • C.Population doubled
  • D.Exports vanished
20.
Old-age pension paid by the government is excluded from national income (income method) because it is a:
  • A.Transfer payment, not a factor income
  • B.Profit
  • C.Rent
  • D.Net export
21.
If output is unchanged but all prices rise 25%, the GDP deflator becomes:
  • A.125
  • B.75
  • C.100
  • D.25
22.
Real GDP is preferred over nominal GDP for measuring growth because it:
  • A.Removes the effect of price changes, showing true output
  • B.Uses current prices
  • C.Includes transfers
  • D.Ignores output
23.
All three measurement methods give the same national income because every act of production simultaneously creates:
  • A.Income that is then spent (output = income = expenditure)
  • B.Only taxes
  • C.Only imports
  • D.No income
24.
Disposable income is obtained from personal income by subtracting:
  • A.Direct taxes
  • B.Indirect taxes
  • C.Depreciation
  • D.Net exports
25.
Investment (gross capital formation) in the expenditure method is the spending on:
  • A.Capital goods (machines, buildings) and inventories
  • B.Food for households
  • C.Old-age pensions
  • D.Imports only

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (A) Domestic territory
  2. (B) Normal resident
  3. (B) NFIA
  4. (B) Net factor income from abroad
  5. (A) Depreciation
  6. (B) National Income
  7. (A) Factor cost
  8. (B) Product method
  9. (B) Double counting
  10. (B) Income method
  11. (A) Involve no production
  12. (A) C + I + G + (X − M)
  13. (B) Nominal GDP
  14. (B) Real GDP
  15. (B) 110
Section B — Challenge / Olympiad (2 marks each)
  1. (A) Within the domestic territory only
  2. (A) 680
  3. (A) Only the value added (₹70) or only the final bread (₹120)
  4. (A) About 6% of the rise was just higher prices (inflation)
  5. (A) Transfer payment, not a factor income
  6. (A) 125
  7. (A) Removes the effect of price changes, showing true output
  8. (A) Income that is then spent (output = income = expenditure)
  9. (A) Direct taxes
  10. (A) Capital goods (machines, buildings) and inventories
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