# MCQ Questions for Class 12 Economics Chapter 2 National Income Accounting with Answers

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## National Income Accounting Class 12 MCQs Questions with Answers

Choose the correct alternative.

Question 1.
Depreciation of fixed capital assets refers to
(a) Normal wear and tear
(b) Foreseen obsolescence
(c) Normal wear and tear and foreseen obsolescence
(d) Unforeseen obsolescence

Answer: (c) Normal wear and tear and foreseen obsolescence

Question 2.
National income is the sum of factor income accruing to
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents

Question 3.
GNP at MP =
(a) GDPMP – Depreciation
(b) GDPMP + Depreciation
(c) GDPMP ÷ Depreciation
(d) GDPMP + Net factor income from abroad

Question 4.
NDPMP =
(a) GDPMP – Depreciation
(b) GDPFC + Net factor income from abroad
(c) NNPFC + Net indirect taxes
(d) All of these

Question 5.
NNPMP =
(a) GNPMP – Depreciation
(b) NDPMP + Net factor income from abroad
(c) NNPFC + Net indirect taxes
(d) All of these

Question 6.
GDPFC =
(a) GDPMP – Net indirect taxes
(b) GDPMP + Net indirect taxes
(c) GDPMP + Subsidies
(d) GDPMP – Indirect taxes

Answer: (a) GDPMP – Net indirect taxes

Question 7.
NDPFC =
(a) GDPFC – Indirect taxes
(b) GDPFC – Depreciation
(c) GDPFC + Economic subsidy
(d) All of these

Question 8.
NNPFC =
(a) GNPFC – Depredation
(b) NNPMP + Economic subsidy – Indirect taxes
(c) NDPMP + Net factor income from abroad
(d) All of these

Question 9.
Accounting of National Income at constant prices is known as
(a) Money income
(b) Real income
(c) Current income
(d) Domestic income

Question 10.
Which of the following items are excluded from GNP measurement?
(a) Purely financial transactions
(b) Transfer of used goods and non-market goods and services
(c) Illegal activities and the value of leisure
(d) All of these

Fill in the blanks with the correct word.

Question 1.
Real National Income is the value of current income at ______ year prices.

Question 2.
Flow is a ______ concept.

Question 3.
______ flow shows the flow of goods and services across different sectors.

Question 4.
______ has no time dimension.

Question 5.
_______ has a time dimension.

Question 6.
The production method is also known as the _______ method.

Question 7.
The weights are ______ in C.P.I.

Question 8.
GDP deflator does not include prices of ______ goods.

State whether the following statements are True or False. Give reasons.

Question 1.
Real flow shows the flow of money across different sectors.

Real flow shows the flow of goods and services across different sectors.

Question 2.
Stock is a dynamic concept.

Stock is a static concept whose magnitude is measured at a particular point in time.

Question 3.
National Income includes only transfer incomes, not the factor incomes.

National Income includes factor incomes, not the transfer incomes.

Question 4.
Import is leakage of the circular flow of income.

Imports lead to the withdrawal of income from the process circular flow.

Question 5.
The value of intermediate goods is not included in the estimation of value-added.

Only the value of output added at each stage of production is included in the estimation of value-added.

Question 6.
A part of the capital gets consumed during the year due to wear and tear is called value-added.

A part of the capital that gets consumed during the year due to wear and tear is called depreciation.

Match the alternatives given in Column II with respective terms in Column I.

Question 1.

 Column I Column II (i) Flow variable (a) Value Added Method (ii) Stock variable (b) Include in National Income (iii) Product method (c) Measured over a specific period of time (iv) NDPFC = (d) Measured at a specific point in time (v) GDPFC = (e) NDPFC – Indirect Taxes + Subsidies (vi) Saving (f) Stock Concept (vii) Wealth (g) NDPFC + Depreciation (viii) Final expenditure method (h) Flow Concept (ix) Windfall gains (i) Consumption and Investment Method (x) Family members working free on the family-owned farm (j) Don’t include in National Income