Ni 119

1.
NI = NE is an:
A. Equation B. Identity
C. Function D. None of these
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2. Per capita income is:
A. Income per worker B. Income per head
C. Income per household D. Income per industrial unit
Answer & Explanation
Answer: Option B
Explanation:

3. If indirect taxes are deducted from NNP and subsidies are added, we achieve:
A. Personal savings B. DPI
C. NI D. Per capita income
4. Transfer payments are not included in national income because:
A. Such payments are made to persons living abroad B. Double counting would result
C. They are illegal D. There is no method to account for these
Answer & Explanation
Answer: Option B
Explanation:

5. To determine the correct level of GNP, it is necessary to:
A. Add up the values of goods and services during one year B. Add up all savings
C. Count all imports D. Add up the value of semi finished goods
6. Real national income increases when:
A. Prices of goods are rising B. National savings increase
C. Quantity of goods and services increases D. None of the above
7. It is considered as investment:
A. Construction of a house B. Purchase of an old house
C. Salaries of college professors D. Both (a) & (b)
8. It is considered as transfer payments:
A. Salaries of employees B. Bonus of bank employees
C. Free medical care to officers D. Unemployment allowance paid by govt.
9. GNP is always:
A. Less than NNP B. Greater than NNP
C. Equal to NNP D. Any of (a), (b), (c)
10. The four factor payments are:
A. Money, capital, salaries, and income B. Wages, rent, interest and profits
C. Money, power, prices, and wealth D. Wages, interest, salaries and income
11. It is transfer payment:

A. Payment of college tuition B. A social security payment
C. Interest paid for a bank loan D. Payment for a leased car
12. It is counted in GDP:
A. Sale price of an old car B. Purchase of 100 shares of PSO
C. A TV set produced this year but not sold D. The leisure people consume
13. If government increases taxes, private savings:
A. Increase B. Decrease
C. Do not changeD. Will become zero
14. If C=200 and I = 40 then Y will equal to:
A. 160 B. 240
C. 200 D. None of the above
15. Corporate tax is levied on:
A. Landlords B. Municipal corporations
C. Big companies D. Importers
16. If we deduct direct tax from personal income, we get:
A. Net national income B. Personal saving
C. Disposable income D. Per capita income
17. The largest part of national income is:
A. Consumption B. Investment
C. Saving D. Transfer payments
18. We measure national income by this method:
A. Expenditure method B. Income method
C. Product method D. All of the above
19. Which statement is true?
A. NNP = GNP - Depreciation B. NNP = NI
C. NNP = DPI D. None of these
20. Transfer payments means:
A. Bank loans B. The payment without work
C. Tax payments D. Payment made to all factors of production
21. Direct taxes are not included in:
A. NNP B. PI
C. DPI D. (a) and (c) of above
22. When National income is estimated by expenditure method, we include:
A. All govt. expenditure B. All households expenditure
C. All expenditure of the business sector D. All of the above
A. National Expenditure = National income B. National Expenditure = National
income + National production
C. National Expenditure = National income + National Taxes D. National Expenditure
= National income - Taxes
A. National Income = National Expenditure - indirect taxes B. NI = GNP - NNP
C. NI = NNP - indirect taxes D. NI = PI
25. There are methods of measuring national income:
A. 5 B. 2
C. 1 D. 3
26. If we compare GDP and GNP, then:
A. GNP = GDP - net income from abroad B. GNP = GDP + net income from
abroad
C. GNP = NNP - net income from abroad D. GNP = NNP + net income from
abroad
27. It is deducted from GNP to get NNP:
A. Indirect taxes B. Depreciation
C. Direct taxes D. Transfer payments
28. Select the correct statements:
A. Transfer payments are included in national income B. Depreciation allowance is a
part of GNP
C. Taxes are not included in NNP D. GDP means Gross Direct Production
29. Which is the largest figure:
A. NNP B. GNP
C. DPI D. PI
30. Which is a flow concept:
A. Number of my shirts B. My monthly income
C. My total wealth D. Money supply
31. To avoid double counting when GDP is estimated, economist:

A. Use GDP deflator B. Calculate value added at each stage of production
C. Use retail prices D. Use price only intermediate goods
32. A TV set purchased from a retail store is an example of:
A. Intermediate good B. Capital goods
C. Surplus goods D. Final goods
33. It is deducted from GNP to find NNP:
A. Savings B. Direct taxes
C. Depreciation allowance D. Subsidies
34. Undistributed profits are considered:
A. Income earned but not received B. Income received but not earned
C. Income earned and received D. None of the above
35. GNP is:
A. Total sales in the economy B. Total monetary transactions in an economy
C. The market value of all goods and series produced in an economy D. Total
spending in an economy
36. GNP includes:
A. A loan from a bank B. Al loan from one's parents
C. Gifts and donations D. A broker's commission
37. In terms of national income accounts, multiple counting refers to:
A. The addition to GNP of multiple units of a good B. Counting currently produced
goods more than once
C. The inclusion in GNP of gross spending and taxes D. Counting both goods and
services
38. Net Investment is:
A. Gross Investment minus household Investment B. Gross Investment minus
govt. Investment
C. Gross Investment minus capital consumption allowance D. None of the above
39. PI is equivalent to:
A. DPI minus personal taxes B. DPI plus unearned receipts
C. DPI minus income earned but not received D. NI plus unearned receipts minus
earnings not received (taxes)
40. Market value of all final goods and services produced in a country during a year is
definition of:
A. NI B. NNP
C. GNP D. Consumpt
41. Investment spending includes the purchase of:

A. Stocks B. Govt. bonds
C. Residential construction D. All of the above
42. Which of the following would not be included in GNP:
A. Govt. transfer payments B. Payment for construction of state high way
C. Govt. purchase of an airplane D. Salary paid for the presidents secretary
43. Consumption spending does not include:
A. Household's purchase of food B. Household's purchase of car
C. Household's payment of rent for an apartment D. Household's purchase of
stock in any XYZ corporation
44. Net exports are:
A. Total exports plus total imports B. Total exports minus total imports
C. Total imports minus total exports D. Total exports divided by total imports
45. National Income is:
A. Total income spent in the economy B. Sum of disposable personal income and
saving
C. NNP minus the capital consumption allowance D. Total income earned in
producing the national product
46. Which of the following is not included in personal Income:
A. Social security benefits B. Dividend payments
C. Undistributd corporate profits D. Interest received from saving certificates
47. Traffic fines are:
A. Part of personal consumption spending B. Excluded from national income
accounts
C. Included in NI but not in PI D. Included in PI but not in Disposable PI
48. Govt. transfer payment include:
A. Social security benefits B. Welfare benefits
C. Student scholarships D. All of the above
49. Which of the following would increse level of national income?
A. An increase in taxation. B. A reduction in government spending
C. A reduction in consumer spending D. An increase in exports
50. National income is a measure of:
A. The size of government revenue B. Payments made to factors of production
C. Total increase in wages in a year D. Total production of goods in a period
51. In calculating national income which one will not be included:
A. Exports B. Undistributed by firms
C. Wages of a lecturer D. Old age pensions
52. In circular flow model
A. Households own the resources B. There are never international transactions
C. Household income is limited to wages and salaries D. Financial markets ensure
that the federal govt.'s budget is balanced annually
53. A country is poor if it has:
A. Less production of goods per capita B. Less amount of gold
C. Less amount of foreign currency D. Less exports
54. A country is poor if it has:
A. Less amount of gold B. Less amount of local currency
C. Less amount of foreign currency D. Less GNP per capita
A. Bus fare B. College fee
C. Pension D. Salary
56. They have a functional relation
A. Consumption and national income B. Consumption and saving
C. Consumption and investment D. All of the above
57. This is NOT a method of measure national income:
A. By adding all incomesB. By adding all expenditure
C. By adding money value of all production D. By adding all money supply in the
country
58. Gross national product includes:
A. A loan from one's parents B. A loan from a domestic bank
C. A loan from, other countries D. None of the above
59. It is considered as investment in national accounting:
A. Construction of a house B. Purchase of a running hotel
C. Purchase of a new shirt D. Increase in salaries of professors
60. It is considered as transfer payment:
A. Salary of an employee B. Bouus paid to bank employees
C. Payment of house rent D. Unemployment allowance paid by govt.
61.GNP is always
A. Less than NNP B. Greater than NNP

C. Equal to NNP D. Greater in many years but less in others
62. The four factor payments are:
A. Money, capital, salaries, and income B. Wages, rent, interest and profits
C. Money, power, prices and wealth D. Wages, interest, salaries and income
63. Macroeconomics is concerned with:
A. Aggregate economic activity B. Spending decisions of households
C. How to produce goods D. How to but stocks and bonds
64. Which of the following is not macroeconomics:
A. Inflation B. Unemployment
C. The level of output in the economy D. Level of wages in garment industry
65. A closed economy is best described as one in which:
A. There are no monopolies B. No corporations
C. No externalities D. No international trade
66. In economics, one or more persons living in a joint family are called a:
A. Business firm B. Social gathering
C. Super family D. Household
67. The largest type of income in the Pakistan is:
A. Compensation f employees B. Proprietors income
C. Rental income D. Corporate profits
68. An open economy:
A. Must be a democracy B. Is one without taxes
C. Is that interacts with other economies D. Means world economy
69. Which of the following is transfer payment:
A. Paument of college tuition fee B. Payment for social security
C. Payment of interest D. Payment for a leased car
70. Which of the following is counted in GDP:
A. Sale of used car B. Purchase of shares of PSO (company)
C. A TV set produced this year but not sold D. The leisure enjoyed by people
71.if govt increases taxes, private saving
A. Increase B. Decrease
C. Become negative D. Do not change
72. If C = 200 and I = 40 then Y will equal to:
A. 160 B. 240
C. 200 D. None of these
73. Corporate tax is levied on:
A. Landlords B. Municipal corporations
C. Joint stock companies D. Importers
74. If we deduct direct taxes from personal income, we get
A. Net national income B. Personal saving
C. Disposable income D. Percapita income
75. The largest part of national income goes to:
A. Consumption B. Investment
C. Saving D. Transfer payment
76. We measure national income by this method:
A. Expenditure method B. Income method
C. Product method D. Any of the above
A. NNP = GNP - Depreciation B. NNP = NI
C. NNP - DPI
78. Transfer payments mean:
A. Bank loans B. The payment without work
C. Tax payments D. Payments made to all factors of production
79. Direct taxes are not included in:
A. NNP B. PI
C. DPI D. (a) and (c) of above
80. When national income is estimated by expenditure method, we include:
A. All govt. expenditure B. All household expenditure
C. All expenditure of the business sector D. All of the above

A. Nationl Expenditure = National income B. Nationl Expenditure = National
income + National savings
C. Nationl Expenditure = National income + Taxes D. Nationl Expenditure =
National income - Taxes
A. National Income = National expenditure - indirect taxes B. NI = GNP - NNP
C. NI = NNP - indirect taxes D. NI = PI
83. There are methods of measuring national income:
A. 5 B. 2
C. 1 D. 3
84. If we compare GDP and GNP, then:
A. GNP = GDP - net income from abroad B. GNP = GDP + net income from
abroad
C. GNP = NNP - net income from abroad D. GNP = NNP + net income from
abroad
85. It is deducted from GNP to get NNP:
A. Indirect taxes B. Depreciation
C. Direct taxes D. Transfer payment
86. It is added to GDP to get GNP
A. Depreciation allowance B. Direct taxes
C. Subsidies D. Net income from abroad
87. Select the correct statement:
A. Transfer payment are included in national income B. Depreciation allowance is a
part of GNP
C. Taxes are not included in NNP D. GDP means Gross Direct Production
88. Which is the largest figure:
A. NNP B. GNP
C. DPI D. PI
89. Which is a flow concept:
A. Number of my shirts B. My total wealth
C. My monthly income D. Money supply
90. To avoid double counting when GDP is estimated, economists:
A. Use GDP deflator B. Calculte value added at each stage of production
C. Use retail prices D. Use price of only intermediate goods
91.TV set purchased from a retail store is an example of:
A. Intermediate good B. Capital good
C. Surplus good D. Final good
92. Undistributed profits are considered:
A. Income earned but not received B. Income received but not earned
C. Income earned and received D. None of the above
93. Total value of all final goods and services produced in a country during one year is:
A. NNP B. GNP
C. GDP D. NI
94. Which measure has the larger value (for Pakistan):
A. NNP B. GNP
C. GDP D. NI
95. In equilibrium position of national income:
A. S > 1 B. S<1
C. S = 1 D. All are true
96. Personal income includes:
A. Direct taxes B. Indirect taxes
C. Depreciation D. None of these
97. Personal income includes:
A. Transfer payments B. Indirect taxes
C. Depreciation D. All of the above
98. If savings exceed investment then:
A. National income rises B. National income falls
C. National income is not affected D. None of the above
99. If we include it, national income will be over-estimated:
A. Transfer payment B. Income from abroad
C. Illegal income D. Exports
100. It is avoided to make correct estimate of national income:
A. Free services B. Double counting
C. Export earnings D. All of the above
101. It is not included in estimation of national income:
A. Illegal income B. Services of house wife
C. Imports D. All are not included
102. The goods which are used directly by the people are called:
A. Consumer goods B. Capital good
C. Direct good D. None of these
103. Circular flow of income links:
A. Income, expenditure B. Exports, Imports
C. Govt. taxes, Govt. expenditure D. Saving and investment
104. Transfer payments include:
A. Daily wages, pensions B. Pensions, Zakat
C. Zakat, taxes D. Taxes, pocket money
105. This statement is true
A. NI = rent + interest + wages + profit B. NI = rent + interest + wages + taxes
C. NI = Govt. expenditure + interest + wages + profit D. NI = rent + interest + wages
+ pensions
106. Determinants of national income are:
A. Natural resources, human resources, monetary resources B. Natural resources,
capital resources, monetary resources
C. Natural resources, capital resources, human resources D. Natural resources,
capital resources, foreign resources
107. National income is estimated by:
A. Product, import and export methods. B. Product, income and consumption methods
C. Product, income and market methods D. Product, income and expenditure
methods
108. National income of a country does not include:
A. Self services, low wages B. Donations and high salaries
C. Corporate taxes and gifts D. Illegal incomes and unreported incomes
109. This statement is true
A. Inflation does not play any role in distribution of national income B. Inflation plays
unfavourable role in distribution of national income
C. Inflation plays favourable role in distribution of national income D. Inflation brings
equality in aggregate demand and aggregate demand and aggregate supply
110. GDP stands for:
A. Great domestic progress B. Grand development plan
C. Gross domestic product D. Gross domestic plan
111.GNP is
Total annual monetary receipts by the prople B. Total annual spending in the
economy
C. Total market value of final goods and services produced by the economy D. All of
the above
112. It is NOT a method to measure national income:
A. Adding all expenditure B. Adding all incomes
C. Adding value of goods and services D. Adding all taxes
113. Macroeconomics is concerned with:
A. Aggregate economic activity B. Individual decision units
C. How to produce goods D. How to buy stocks and bonds
114. In economics persons having a joint family budget are called:
A. Community B. Gathering
C. Household D. Organization
115. Which of the following is NOT macroeconomics:
A. Inflation B. Unemployment
C. The level of output in the economy D. Level of wages in export industry
116. Investment spending includes the purchase of:
A. Stocks (shares) B. Government bonds
C. Residential construction D. All of the above
117. Which of the following would NOT be included in GNP:
A. Government support to the very poorB. Government purchase of an airplane
C. Payment for construction of highway D. The salary paid for the President's secretary
A. Payment of pocket money to children B. Financial support to old parents
C. Broker's commission in some auction D. (a) and (c) of above
119. It is NOT transfer payment:
A. Payment of pocket money to children B. Financial support to old parents
C. A broker's commission D. Donation to a hospital.

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11. It is transfer payment:

31. To avoid double counting when GDP is estimated, economist:

41. Investment spending includes the purchase of:

A. Less than NNP B. Greater than NNP

81. Which statement is true?

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