Methods of Calculating National Income
Economics ⇒ National Income and Related Aggregates
Methods of Calculating National Income starts at 12 and continues till grade 12.
QuestionsToday has an evolving set of questions to continuously challenge students so that their knowledge grows in Methods of Calculating National Income.
How you perform is determined by your score and the time you take.
When you play a quiz, your answers are evaluated in concept instead of actual words and definitions used.
See sample questions for grade 12
Describe the main difference between the product method and the income method of calculating national income.
Explain the basic steps involved in the expenditure method of calculating national income.
Explain the concept of 'value added' in the context of the product method.
Explain the meaning of 'net factor income from abroad' in the context of national income calculation.
A country has the following data: GDP at market prices = ₹12,000 crore, Net factor income from abroad = ₹1,000 crore, Depreciation = ₹800 crore, Net indirect taxes = ₹1,200 crore. Calculate National Income (NNP at factor cost).
A country has the following data: Private final consumption expenditure = ₹4000 crore, Government final consumption expenditure = ₹2000 crore, Gross domestic capital formation = ₹1500 crore, Net exports = ₹-500 crore. Calculate GDP at market prices using the expenditure method.
A country has the following data: Value of output = ₹10,000 crore, Value of intermediate consumption = ₹6,000 crore, Depreciation = ₹500 crore. Calculate Net Value Added at Factor Cost (NVAFC).
A country has the following data: Wages = ₹5000 crore, Rent = ₹2000 crore, Interest = ₹1000 crore, Profits = ₹3000 crore, Net factor income from abroad = ₹500 crore. Calculate the national income using the income method.
Which method of calculating national income is most suitable for an economy with a large non-monetized sector? (1) Product Method (2) Income Method (3) Expenditure Method (4) None of these
Which of the following is a challenge in the product method of calculating national income? (1) Estimating value added in the informal sector (2) Identifying transfer payments (3) Calculating net exports (4) Estimating depreciation
Which of the following is a component of national income by the expenditure method? (1) Intermediate consumption (2) Private final consumption expenditure (3) Transfer payments (4) Depreciation
Which of the following is a limitation of the expenditure method? (1) Difficulty in estimating government expenditure (2) Difficulty in identifying final goods (3) Non-availability of data on factor incomes (4) Problem of double counting
Fill in the blank: In the expenditure method, national income is calculated as the sum of consumption, investment, government expenditure, and _______.
Fill in the blank: In the expenditure method, the sum of all expenditures on final goods and services is called _______.
Fill in the blank: In the income method, _______ is the reward for the factor of production 'capital'.
Fill in the blank: In the income method, national income is calculated by adding up all the _______ earned by the factors of production within a country.
Is the following statement correct? 'The value of intermediate goods is included in the calculation of national income.'
Is the following statement correct? 'Transfer payments are included in the calculation of national income.'
State whether the following is true or false: 'Depreciation is deducted from gross value added to get net value added.'
State whether the following is true or false: 'Net exports are calculated as exports minus imports.'
