National Income Introduction PDF

## Assertion and Reason: 19. **Assertion (A):** Export is a flow variable. **Reason (R):** Exports depend on the size of population at a point of time. (A) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A). (B) Both Assertion (A) and Reason (R)...

## Assertion and Reason: 19. **Assertion (A):** Export is a flow variable. **Reason (R):** Exports depend on the size of population at a point of time. (A) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A). (B) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A). (C) Assertion (A) is True but Reason (R) is False. (D) Assertion (A) is False but Reason (R) is True. ## Statement I and II: 20. **Statement I:** All producer goods are capital goods. **Statement II:** Only consumers are the final users of final goods. (A) Both the statements are true. (B) Both the statements are false. (C) Statement 1 is true and Statement 2 is false. (D) Statement 2 is true and Statement 1 is false. ## Intermediate product: 21. Which one of the following is an intermediate product? (A) Purchase of pulses by consumers (B) Machine purchased by a firm (C) Wheat used by a flour mill (D) Wheat used by households ## Final good: 22. Which one of the following is not an example of final goods? (A) Chalk, dusters, etc. purchased by a school (B) Fertilizers used by the farmers (C) Wheat used by the flour mill (D) All of the above ## National Income: 23. Why are the intermediate goods not included in the National Income while measuring National Income? (A) To avoid double accounting (B) It decreases income (C) Intermediate goods are not good (D) All of these ## Macro Economics: 24. The subject of the Study of Macro Economics is: (A) The Principle of National Income (B) The Principle of Consumer (C) The Principle of Producer (D) None of these 25. Macro Economics Studies: (A) Employment opportunities in the economy (B) Theory of supply of Commodities (C) Elasticity of demand in Scooter (D) Price of wheat in the market ## General Price Level: 26. General Price Level is studied in: (A) Microeconomics (B) Macroeconomics (C) Both (A) and (B) (D) None of these ## Employment Theory: 27. Employment Theory is related to: (A) Static Economics (B) Microeconomics (C) Macroeconomics (D) None of these ## Stock of Capital: 28. Increase in Stock of Capital is known as: (A) Capital Loss (B) Capital Profit (C) Capital Formation (D) None of these ## Stock: 29. Which of the following is stock? (A) Wealth (B) Saving (C) Export (D) Profit ## Circular Flow: 30. Which one of the following is included in circular flow? (A) Real Flow (B) Money Flow (C) Both (A) and (B) (D) None of these ## Image 2: 1. **Fill in the blanks:** - Factor income is included in **factor** and **transfer** income. - Milk purchased by households is a **final** good, while milk purchased by a sweet shop is an **intermediate** good. - Intermediate Goods are still within the **production** boundary. - National Income includes only **final** goods. - **Circular Flow** shows flow of goods and services across different sectors. - **Tertiary** sector is also known as the service sector. - **Flow** is an economic variable that is measured over a specific period of time. - Agriculture is included in the **primary** sector. - National Income in India is calculated by **expenditure method**. - Higher production of **final/consumer** goods leads to higher level of welfare of the economy. - **Human Development Index** is an index of economic development of the country. ## True or False with Reasons: 2. **Intermediate goods have a derived demand, while final goods have direct demand. True.** Intermediate goods (such as raw materials) are purchased by firms to produce final goods. Therefore they have a derived demand. Final goods (such as finished products) are purchased by consumers directly, thus they have direct demand. **Bread is always a consumer good. False.** Bread can be purchased by both consumers for direct consumption and by bakeries as a raw material for producing pastries and other goods. ## Multiple Choice Questions: 3. **Inventory is a **stock** concept whereas the change in inventory is a **flow** concept.** (A) Stock, flow (B) Flow, stock (C) Stock, stock (D) Flow, flow ## Stock: 4. **Which of the following is a stock?** (A) Savings (B) Production (C) Consumption of fixed capital (D) Capital ## Factor payment: 5. **Which of the following is not a 'factor payment'?** (A) Free uniform to defense personnel (B) Salaries to the Members of Parliament (C) Rent paid to the owner of a building (D) Scholarship given to students ## Final good: 6. **Goods purchased for the following purpose are final goods:** (A) For satisfaction of wants (B) For investment in firm (C) Both (A) and (B) (D) None of the above ## Stock and Flow: 7. **Which one of the following is included in ‘Stock'?** (A) Quantity of Money (B) Wealth (C) Quantity of wheat stored in a warehouse (D) All the above 8. **Which one is included in flow?** (A) Consumption (B) Investment (C) Income (D) All of these 9. **Which of the following is included in real flow?** (A) Flow of Goods (B) Flow of Services (C) Both (A) and (B) (D) None of these 10. **Which services are provided by families to a firm?** (A) Land (B) Labour (C) Capital and Enterprises (D) All the above 11. **The primary sector includes:** (A) Agriculture (B) Retail trading (C) Small Industries (D) All the these 12. **Which service is included in Tertiary Sector?** (A) Mining (B) Construction (C) Communication (D) Animal Husbandry 13. **Which of the following is not flow?** (A) Capital (B) Income (C) Investment (D) Depreciation 14. **Which of the following is the employment theory related to?** (A) Macroeconomics (B) Static economics (C) Microeconomics (D) None of the above 15. **Which of the following is the actual definition of transfer payments?** (A) Transfer payments refer to the payments made as compensation to the employees within an organisation (B) Transfer payments refer to the payments made to workers on transferring from one job to another (C) Transfer payments refer to the payments made without any exchange of goods and services (D) None of the above ## Assertion and Reason: 16. **Assertion (A):** The flour purchased by a baker is considered an intermediate good. **Reason (R):** The flour is used to produce bread, cakes and biscuits to be sold to the consumer. (A) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A). (B) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A). (C) Assertion (A) is True but Reason (R) is False. (D) Assertion (A) is False but Reason (R) is True. 17. **Assertion (A):** Intermediate goods are not included in the estimation of GDP. **Reason (R):** Value of intermediate goods is only a part of the value of final goods. (A) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A). (B) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A). (C) Assertion (A) is True but Reason (R) is False. (D) Assertion (A) is False but Reason (R) is True.