10 Questions
National income is the money value of all economic activities conducted in a nation each year.
True
An economic activity refers to the production of goods and services that can be valued at market prices.
True
Non-economic activities, such as the services of a housewife or hobbies, contribute to national income.
False
The national income of a country is the total market value of all final goods and services produced in the economy annually.
True
To measure the real national income, the figure for national income is adjusted for price changes.
True
The purchasing power parity theory was put forward by Professor Gustav Cassel of Sweden in the year 1920.
True
The PPP theory has two versions: the absolute and the relative versions.
True
According to the absolute version of the PPP theory, the exchange rate between two currencies should be equal to the ratio of the price indexes in the two countries.
True
The absolute version of the PPP theory is widely used by economists.
False
The relative version of the PPP theory takes into account factors such as transportation costs and non-traded goods.
True
Test your knowledge on national income and economic activities with this quiz! Learn about the components of national income, including agricultural and industrial production, and non-economic goods and services.
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