West Bengal Police Constable Special Mock Test

Indian Economy - National Income

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1) How is the concept of 'Value Added' significant in calculating GDP?

A) It indicates the total revenue generated by each sector.

B) It denotes the total output produced by an economy before depreciation.

C) It represents the net output of a sector after accounting for subsidies.

D) It measures the contribution of each sector to the GDP by subtracting intermediate consumption from the gross output.

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2) Which of the following is NOT a component of national income?

A) Gross Domestic Product (GDP)

B) Net National Product (NNP)

C) Gross National Product (GNP)

D) Personal Income

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3) What is the formula for calculating GDP?

A) GDP = C + I + G + (M - X)

B) GDP = C + S + T + (M - X)

C) GDP = C + S + T + (X - M)

D) GDP = C + I + G + (X - M)

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4) Why is the concept of 'Trade Multiplier' important in understanding the impact of foreign trade on national income?

A) It measures the change in population due to trade policies

B) It shows the effect of foreign loans on domestic consumption

C) It measures the change in national income due to a change in trade balance

D) It indicates the level of tariffs applied on imports

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5) How does the concept of 'Purchasing Power Parity' (PPP) influence the comparison of GDP across countries?

A) PPP is irrelevant in GDP comparison as it deals with currency exchange rather than economic productivity.

B) PPP adjusts GDP for differences in price levels between countries, allowing for a more accurate comparison of economic productivity.

C) PPP only affects the GDP of countries with fixed exchange rates.

D) PPP increases the nominal GDP of developing countries to match that of developed countries.

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6) In an economy, if the GNP is significantly higher than the GDP, what might this indicate?

A) A balanced level of imports and exports.

B) A substantial amount of investment in domestic industries by foreign entities.

C) A significant decrease in domestic production with stable foreign investments.

D) A high level of income earned by nationals abroad compared to that earned by foreigners domestically.

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7) What role does 'depreciation' play in the calculation of Net Domestic Product (NDP)?

A) It is excluded from calculations as it does not affect physical output.

B) It is subtracted from GDP to account for the wear and tear of capital goods.

C) It is added to GDP to reflect the appreciation of domestic assets.

D) It is used to measure the total value of new capital investments.

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8) Which of the following is the sum of GDP and net income from abroad?

A) Gross National Product (GNP)

B) Personal Income

C) Gross Domestic Product (GDP)

D) Net National Product (NNP)

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9) Which of the following measures the total value of goods and services produced within a country in a specific time period?

A) Gross National Product (GNP)

B) Gross Domestic Product (GDP)

C) Personal Income

D) Net National Product (NNP)

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10) Which sector contributes the highest share to the national income of India?

A) Agriculture

B) Services

C) Mining

D) Manufacturing

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Indian Economy (National Income জাতীয় আয়)

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