introduction to macro economics section 6 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Macro Economics topic of indian economy mcq
(a) Per capita income of citizens
(b) Purchase of goods by government
(c) Private investment
(d) Net foreign investment
The correct answers to the above question in:
Answer: (a)
Gross National Product (GNP) is the market value of all products and services produced in one year by labour and property supplied by the residents of a country.
Basically, GNP is the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country.
GNP measures the value of goods and services that the country’s citizens produced regardless of their location.
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Read more introduction to macro economics Based Indian Economy Questions and Answers
Question : 1
An individual’s actual standard of living can be assessed by
a) Per Capita Income
b) Disposable Personal Income
c) Net National Income
d) Gross National Income
Answer »Answer: (a)
The standard of living is a measure of the material welfare of the inhabitants of a country. The baseline measure of the standard of living is real national output per head of population or real GDP per capita.
This is the value of national output divided by the resident population. Other things being equal, a sustained increase in real GDP increases a nation’s standard of living providing that output rises faster than the total population.
Question : 2
Surplus budget is recommended during :
a) Famines
b) War
c) Depression
d) Boom
Answer »Answer: (c)
A surplus budget is a budget in which government receipts are greater than government expenditures.
Such a budget is desired when the economy is battling inflation due to excess aggregate demand (AD). The surplus budget plugs the inflationary gap by lowering the level of aggregate demand. AD is lowered on account of
- rising in revenue collection by the government, and
- a fall in government expenditure.
Question : 3
National Income is generated from:
a) any profit-making activity
b) any productive activity
c) any laborious activity
d) any money-making activity
Answer »Answer: (c)
National income is the monetary value of all goods and services produced by nationals of a country. Only productive activities are included in the computation of national income.
All incomes earned through productive activities are included in national income. Income earned through unproductive activities is not included.
Question : 4
In terms of economics, if it is possible to make someone betteroff without making someone worseoff, then the situation is
a) Optimal
b) Paretosuperior
c) Efficient
d) Inefficient
Answer »Answer: (d)
Pareto efficiency is said to occur when it is impossible to make one party better off without making someone worse off.
An inefficient situation is one where it is possible to make some people better off without making anyone else worse off.
Question : 5
Consumptions function refers to
a) relationship between input and output
b) relationship between income and consumption
c) relationship between savings and investment
d) relationship between income and employment
Answer »Answer: (b)
The Consumption function is a single mathematical function used to express consumer spending.
It was developed by John Maynard Keynes and detailed most famously in his book The General Theory of Employment, Interest, and Money.
It is made up of autonomous consumption that is not influenced by current income and induced consumption that is influenced by the economy's income level.
Question : 6
Which of the following is not included in the National Income?
a) Winning a lottery
b) Commission paid to an agent for sale of house
c) Government expenditure on making new bridges
d) Imputed rent of owner-occupied houses
Answer »Answer: (a)
National income is the total value of a country’s final output of all new goods and services produced in one year.
Transfer payments are not a part of the national income so they are cut from national income to get n.n.p in order to arrive at national income such payments are bad debts incurred by banks, payments of pensions, charity, scholarships etc.
Private-sector transfers include charitable donations and prizes to lottery winners.
GET Introduction to Macro Economics PRACTICE TEST EXERCISES
introduction to macro economics section 1
introduction to macro economics section 2
introduction to macro economics section 3
introduction to macro economics section 4
introduction to macro economics section 5
introduction to macro economics section 6
Introduction to Macro Economics Shortcuts and Techniques with Examples
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