MCQ Questions Chapter 8 National Income Accounting Class 12 Economics

Please refer to MCQ Questions Chapter 8 National Income Accounting Class 12 Economics with answers provided below. These multiple-choice questions have been developed based on the latest NCERT book for class 12 Economics issued for the current academic year. We have provided MCQ Questions for Class 12 Economics for all chapters on our website. Students should learn the objective based questions for Chapter 8 National Income Accounting in Class 12 Economics provided below to get more marks in exams.

Chapter 8 National Income Accounting MCQ Questions

Please refer to the following Chapter 8 National Income Accounting MCQ Questions Class 12 Economics with solutions for all important topics in the chapter.

MCQ Questions Answers for Chapter 8 National Income Accounting Class 12 Economics

Question: Domestic product is equal to:
a) National product + net factor income from abroad
b) National product – net factor income from abroad 
c) National product ÷ net factor income from abroad
d) National product × net factor income from abroad

Question: Capital goods are those goods
a) Which are used in the production process for several years
b) Which are used in the production process for few years
c) Which Involve depreciation losses
d) Both (a) and (c)

Question: Which of the following leads to depreciation?
a) Normal wear and tear 
b) Damages due to floods
c) Damages due to market – crash 
d) None of these

Question: In India, suppliers of money are:
a) Government of the country
b) Banking system of the country
c) Both (a) and (b)
d) None of these

Question: As a result of double counting, national incomes is: 
a) Over- estimated 
b) Under- estimated 
c) Correctly – estimated 
d) Not estimated for the entire year of accounting

Question: Those goods which satisfy human wants directly are called
a) Intermediate goods
b) Consumer goods
c) Capital goods
d) None of these

Question: Increase in the stock of capital is known as
a) Capital loss
b) Capital gain
c) Capital formation
d) None of these

Question: Which of the following leads to unexpected obsolescence?
a) Change in demand
b) Natural calamities
c) Change in technology
d) None of these

Question: Which of the following is a semi-durable goods?
a) Radio 
b) Clothes 
c) Milk 
d) Petrol

Question: A quantity measured per unit of time period is known as
a) Stock variable 
b) Flow variable 
c) Inventory 
d) None of these

Question: Income of the family is the example of which variable?
a) Stock
b) Flow
c) Both stock and flow
d) Neither stock nor flow

Question: Which of the following leads to depreciation?
a) Normal wear and tear
b) Damages due to floods
c) Damages due to market – crash
d) None of these

Question: Basis of the difference between the concepts of market Price and Factor Cost is:
a) Direct taxes
b) Indirect taxes
c) Subsidies 
d) Net indirect taxes

Question: Which of the following is not included in final consumption expenditure?
a) Household expenditure on food 
b) Government final consumption expenditure
c) Household expenditure on education
d) Expenditure on raw material

Question: Which of the following is a semi-durable goods? 
a) Radio
b) Clothes
c) Milk
d) Petrol

Question: Which one refers to Net Indirect Taxes?
a) Indirect taxes + subsidies
b) Indirect taxes – subsidies
c) Direct taxes – subsidies
d) None of the above

Question: Basis of the difference between the concepts of market Price and Factor Cost is:
a) Direct taxes
b) Indirect taxes
c) Subsidies
d) Net indirect taxes

Question: Which one refers to Net Indirect Taxes? 
a) Indirect taxes + subsidies 
b) Indirect taxes – subsidies 
c) Direct taxes – subsidies 
d) None of the above

Question: Value added method measured the contribution of which of the following within the domestic territory of a country?
a) One producing enterprise only 
b) All producing enterprises 
c) A few producing enterprises 
d) None of these

Question: Which of the following is not correct?
a) NNP at Market Price = GNP at Market Price + Depreciation
b) NDP at Market Price = NNP at Market Price – Net Factor Income from Abroad
c) NDP at Factor Cost = NDP at Market Price – Indirect taxes + Subsidies
d) GDP at Factor Cost = NDP at Factor Cost + Depreciation

Question: Which one leads to Factor Cost?
a) Marker Price – indirect Taxes
b) Marker Price – Net Indirect Taxes
c) Marker Price + Indirect Taxes
d) Marker Price + Net Indirect Taxes

Question: Which of the following is not correct?
a) NNP at Market Price = GNP at Market Price + Depreciation 
b) NDP at Market Price = NNP at Market Price – Net Factor Income from Abroad 
c) NDP at Factor Cost = NDP at Market Price – Indirect taxes + Subsidies 
d) GDP at Factor Cost = NDP at Factor Cost + Depreciation

Question: Which one is correct?
a) National Income = NDP at Factor Cost – Net Factor Income from Abroad
b) GNP at Factor Cost = GNP at Market Price + Net Indirect Tax 
c) Personal Income = Private Income – Corporate Tax – Corporate Saving 
d) Disposable Income = Saving of Household Sector – Consumption of Household Sector

Question: Domestic product is equal to:
a) National product + net factor income from abroad
b) National product – net factor income from abroad
c) National product ÷ net factor income from abroad
d) National product × net factor income from abroad

Question: Which of the following is a flow variable
a) Consumption
b) Wealth
c) Quantity of money
d) None of these

Question: Market price of the final goods and services (Including depreciation) produced within the domestic territory of a country during an accounting year is called:
a) GDP at Market Price
b) GNP at Factor Cost
c) NNP at Factor cost
d) GDP at Factor Cost

Question: Which of the following leads to unexpected obsolescence?
a) Change in demand 
b) Natural calamities 
c) Change in technology 
d) None of these

Question: Income of the family is the example of which variable?
a) Stock 
b) Flow
c) Both stock and flow 
d) Neither stock nor flow

Question: Which one includes depreciation?
a) GNP at Market Price
b) NNP at Market Price
c) NNP at Factor Cost
d) None of these

Question: Net investment is equal to
a) Gross investment + depreciation
b) Gross investment – depreciation
c) Gross investment ×depreciation
d) Gross investment ÷ depreciation

Question. Money flows are the reciprocal of:
(a) monetary flows
(b) real flows
(c) circular flows
(d) inventory flows

Question. Which of the following is a component of profit?
(a) Undistributed profit
(b) Dividends
(c) Corporation profit tax
(d) All of these

Question. Consumption of fixed capital refers to fall in the value of fixed assets…
a) Due to normal wear and tear
b) Due to abnormal wear and tear
c) Due to foreseen obsolescence
d) Due to normal wear and tear and foreseen obsolescence 

Question. Value of output is equal to
a) Sales+ Change in Stock
b) Sales + Closing Stock
c) Sales + Opening Stock
d) Sales- opening Stock

Question. Flow of goods and services across different sectors of the economy is called:
(a) real flow
(b) circular flow
(c) monetary flow
(d) inventory flow

Question. Which of the following is not a flow variable?
(a) Income
(b) Capital formation
(c) Supply of money in a country
(d) Leakage of water from the overhead tank

Question. A thousand rupee note is an example of:
(a) stock variable
(c) either stock or flow
(b) flow variable
(d) neither stock nor flow

Question. Which of the following is an example of flow variable?
(a) Production ofrice
(b) Import of machinery
(c) Change in capital stock
(d) All of these

Question. Economic territory of a country in which economic activities of the country generates its domestic income is called:
(a) national territory
(c) political territory
(b) domestic territory
(d) geographical territory

Question. Which of the following is an example of normal residents of India?
(a) Foreign worker working in WHO located in India
(b) The German working as Director in IMF office located in India
(c) Ambassador in India from rest of the world
(d) Ambassador of India in rest of the world

Question. Domestic income:
(a) is the sum total of factor incomes generated within the domestic territory of a country
(b) is generated by the normal residents as well as non-residents within the domestic territory of a nation
(c) is equal to national income when net factor income from abroad is zero
(d) all of these

Question. Factor payment received by the households for rendering their services as employees of the producing units is called:
(a) compensation of employees
(b) interest
(c) rent
(d) profit

Question. Increase in real GDP implies:
(a) increase in the price level in the economy
(b) increase in the flow of goods and services in the economy
(c) increase in the income level in the economy
(d) none of these

Question. GDP deflator shows change in GDP due to change in the:
(a) real income
(b) monetary income
(c) price level
(d) flow of goods and services

Question. Which of the following leads to market price? 
(a) Factor cost – Indirect taxes
(b) Factor cost – Net indirect taxes
(c) Factor cost + Indirect taxes
(d) Factor cost + Net indirect taxes

Question. Which of the following will not be included while calculating national income by income method?
a) Wages and Salaries
b) Royalty
c) Scholarship
d) Profit

Question. Which of the following is not included in estimation of NI?
a) Subsidies Lunch
b) Old Age Pension
c) Free Medical Facilities served in office to employees
d) Construction of a House

Question. Income of the Family is the example of which variable?
a) Stock Variable
b) Flow Variable
c) Both stock and flow
d) Neither Stock nor flow

Question. Net Indirect Taxes =
(a) Indirect taxes + Subsidies
(b) Direct taxes + Subsidies
(b) Direct taxes + Subsidies
d) Direct taxes – Subsidies

Question. NDPFc =
(a) Compensation of employees + Rent + Interest + Profit + Net factor income from abroad
(b) Compensation of employees + Rent + Interest + Profit + Mixed income of self-employed
(c) NDPMP – Net indirect taxes
(d) both (b) and (c)

Question . Which of the following is not included in the estimation of national income?
(a) Brokerage on the sale of bonds
(b) Imputed value of production for self-consumption
(c) Leisure-time activities
(d) Employer’s contribution to provident fund

Question . Which of the following is included in the estimation of national income?
(a) Unemployment allowances
(b) Defence and security services
(c) Expenditure on second-hand goods
(d) Income from illegal activities

Question. Quantity measured at a particular point of time is called:
(a) flow variable
(b) stock variable
(c) fixed inventory
(d) none of these

Question. The non-stop continuity of intersectoral flows is called:
(a) circularity of flows
(b) real flows
(c) money flows
(d) none of these

Question. Which of the following is incorrect?
(a) GDPMP = NDPMP + Depreciation
(b) GNPyc = GNPMP + Net indirect taxes
(c) NNPMP = NDPMP + Net factor income from abroad
(d) ND Pye = GDPyc – Depreciation

Question . Factor incomes are:
(a) earned incomes
(b) unearned incomes
(c) both earned as well as unearned incomes
(d) neither earned nor unearned incomes

Question. The producer sector depends on the household sector for the supply of:
(a) goods and services
(b) factors of production
(c) both (b) and (c)
(d) none of these

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