1. Y = C + I + G + (X – M) is the equation to calculate National income. In this regard consider the following statements:
1. Y = National income
2. X = Net exports
3. I = Private investment

A. Only one statement is true
B. All statements are true
C. No statement is true
D. Only two statements are true

2. According to Marshall, what is national income?

A. Gross aggregate of commodities
B. Net aggregate of commodities
C. Total revenue of the government
D. Total expenditure of citizens

3. What does the word ‘net’ refer to in Marshall’s definition of National Income?

A. Addition of income from abroad
B. Deductions for depreciation and wearing out of machines
C. Total income earned by citizens
D. Gross national income

4. Which of the following statements are true?
1. Primary sector refers to that sector of the economy which exploits natural resources to produce goods
2. The manufacturing sector of the economy which transforms one physical good into another is included in the secondary sector

A. 1 only
B. 2 only
C. Both 1&2
D. Neither 1nor2

5. Consider the following statements:
1. Government switched to a new base year of 2011-12 for national accounts in January 2013
2. GDP at market price = GDP at factor cost + Indirect Taxes – Subsidies
3. Central Statistics Office (CSO) uses GDP at factor cost
Which of the statements given above is/are correct?

A. 1 and 2 only
B. 2 only
C. 2 and 3 only
D. 3 only

6. The most appropriate measure of economic growth is its:

A. Per Capita Real Income
B. Net Domestic Product
C. Net National Product
D. Gross Domestic Product of a country’s

7. What does Gross National Product (GNP) measure?

A. Economic activity within a country’s borders only
B. Total global economic activity
C. Government revenue and expenditure
D. Economic contributions of a nation’s residents both domestically and abroad

8.Match the Following: National Income Calculation Approaches
Approaches – Descriptions
1. Production Approach – a) Sum of earnings, production and import taxes, minus subsidies
2. Expenditure Approach – b) Sum of final expenditures, exports, minus imports, plus wealth addition
3. Income Approach – c) Sum of goods and services production, plus taxes, minus product subsidies
Match the approaches with their descriptions

A. 1-c, 2-b, 3-a
B. 1-b, 2-c, 3-a
C. 1-a, 2-b, 3-c
D. 1-c, 2-a, 3-b

9. A decrease in the tax-to-GDP ratio of a country indicates which of the following?
1) Slowing economic growth rate
2) Less equitable distribution of national income
Select the correct answer using the code given below.

A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2

10. What does the GDP Deflator measure?

A. Changes in prices of imported goods
B. Changes in prices of exported goods
C. Average changes in prices of goods and services produced within an economy
D. Changes in interest rates