National Income & Human Development Index Section 1 Practice Questions Answers Test With Solutions & More Shortcuts

Question : 1 [CDS-2012-I]

Which of the following statements is/are correct?

  1. If a country is experiencing an increase in its per capita GDP, its GDP must necessarily be growing.
  2. If a country is experiencing negative inflation its GDP must be decreasing.
Select the correct answer using the codes given below

a) Only 2

b) Only 1

c) Both 1 and 2

d) Neither 1 nor 2

Answer: (b)

Negative Inflation is a decrease in price level and economic growth is defined as GDP rise. A decrease in inflation means the prices have fallen.

So, there is an increase in purchasing power of money. It is increased consumption therefore GDP increases.

Question : 2

The concept of Economic Planning in India is derived from which country?

a) UK

b) USA

c) Russia

d) France

Answer: (c)

The concept of Economic planning in India is derived from Russia.

Question : 3 [UPSC (Pre) 2013]

The national income of a country for a given period is equal to the

a) Sum of total consumption and investment expenditure

b) Total value of goods and services produced by the nationals

c) Money value of final goods and services produced

d) Sum of personal income of all individual

Answer: (c)

Question : 4

Planning was considered a prerequisite :

  1. For balanced socio-economic development
  2. For extending the benefits of development in an even manner.
  3. For focussing on removal of regional disparities
  4. For maximizing the utilization of available resources
Select the correct answer using the codes given below :Codes :

a) 1, 2 and 3

b) 1 and 2

c) 2, 3 and 4

d) All the above

Answer: (d)

Planning was considered for balanced socio-economic development to focus on removal of regional disparities and maximizing the utilization of available resources.

Question : 5

Net National Product (NNP) of a country is

a) GDP plus net income from abroad

b) GDP minus depreciation allowances

c) GNP minus net income from abroad

d) GNP minus depreciation allowances

Answer: (d)

The Net National Product (NNP) of a country is GNP minus depreciation allowances. NNP is the actual addition to the year’s wealth.

While calculating GNP, we ignore depreciation of assets but in reality, the process of production uses up the fixed assets or there is some wear and tear or fixed assets by process of depreciation.

In order to arrive at NNP, we deduct depreciation from GNP.

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