Online Test — National Income and Related Aggregates
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
The geographical boundary of a country (plus its embassies, ships, etc.) is its:
Domestic territory
National border only
Capital
Market
Explanation: That is the domestic territory.
Question 2 of 15
A person whose centre of economic interest lies in a country is a:
Tourist
Normal resident
Foreigner
Diplomat
Explanation: A normal resident has their centre of economic interest in the country.
Question 3 of 15
National income equals domestic income plus:
Depreciation
NFIA
Indirect taxes
Subsidies
Explanation: National = Domestic + NFIA.
Question 4 of 15
GNP equals GDP plus:
Depreciation
Net factor income from abroad
Net indirect taxes
Subsidies
Explanation: GNP = GDP + NFIA.
Question 5 of 15
NDP equals GDP minus:
Depreciation
NFIA
Taxes
Imports
Explanation: NDP = GDP − Depreciation.
Question 6 of 15
NNP at factor cost is also known as:
GDP
National Income
Personal income
Disposable income
Explanation: NNP at factor cost = National Income.
Question 7 of 15
Market price minus net indirect taxes equals:
Factor cost
Gross value
NFIA
Depreciation
Explanation: Factor cost = market price − net indirect taxes.
Question 8 of 15
Adding the value added by all producing units is the:
Income method
Product method
Expenditure method
Deflator
Explanation: Summing value added is the product method.
Question 9 of 15
Counting intermediate goods more than once is:
Value addition
Double counting
Depreciation
Net exporting
Explanation: This error is double counting.
Question 10 of 15
Compensation of employees, rent, interest and profit are added in the:
Product method
Income method
Expenditure method
Deflator method
Explanation: These factor incomes are summed in the income method.
Question 11 of 15
Transfer payments are excluded from the income method because they:
Involve no production
Are too large
Are taxes
Are exports
Explanation: Transfers are received without producing anything.
Question 12 of 15
The expenditure method formula for GDP at market price is:
C + I + G + (X − M)
Rent + wages
Nominal ÷ Real
Value added only
Explanation: GDP_MP = C + I + G + (X − M).
Question 13 of 15
GDP measured at current-year prices is:
Real GDP
Nominal GDP
Potential GDP
Net GDP
Explanation: Current prices give nominal GDP.
Question 14 of 15
The true measure of economic growth is:
Nominal GDP
Real GDP
GDP deflator
NFIA
Explanation: Real GDP reflects genuine changes in output.
Question 15 of 15
If nominal GDP = 660 and real GDP = 600, the GDP deflator is:
90
110
60
1.1
Explanation: (660 ÷ 600) × 100 = 110.