210 + Interview Questions in NATIONAL INCOME IN GENERAL AWARENESS Page 5 InterviewSolution

201.	State with reasons whether you agree or disagree with the following statements:Illegal income is not included in National Income.
Answer» Yes, I agree with this statement. The existence of a parallel or black economy is a common feature of most of the economies. Productive activities in this sector are either concealed or under reported and as a result the income generated remain unreported. It is rather difficult to estimate this income correctly. So they are not included in National Income. For example: income originating from activities as smuggling, black marketing, gambling, selling harmful drugs, etc. are excluded from National, Income. Many rich people, businessmen and landlords hide their property and wealth. No authorised registration is available for the income received so they are not included.

201.

State with reasons whether you agree or disagree with the following statements:Illegal income is not included in National Income.

Answer»

Yes, I agree with this statement.

The existence of a parallel or black economy is a common feature of most of the economies.

Productive activities in this sector are either concealed or under reported and as a result the income generated remain unreported. It is rather difficult to estimate this income correctly. So they are not included in National Income.

For example: income originating from activities as smuggling, black marketing, gambling, selling harmful drugs, etc. are excluded from National, Income.

Many rich people, businessmen and landlords hide their property and wealth. No authorised registration is available for the income received so they are not included.

Discussion

202.	Complete the Correlation :(1) ……………… :C+I+G+(X-M)::GNP:C+I+G + (XM) + (R-P).(2) Output method : ……………… :: Income method : Factor cost method(3) Theoretical difficulty : Transfer payments :: ……………… : Valuation of Inventories
Answer» 1. GDP 2. Product / Inventory method 3. Practical difficulty.

202.

Complete the Correlation :(1) ……………… :C+I+G+(X-M)::GNP:C+I+G + (XM) + (R-P).(2) Output method : ……………… :: Income method : Factor cost method(3) Theoretical difficulty : Transfer payments :: ……………… : Valuation of Inventories

Answer»

1. GDP

2. Product / Inventory method

3. Practical difficulty.

Discussion

203.	In India, national income is estimated using (a) output method (b) income method (c) expenditure method (d) combination of output and income method
Answer» Option : (d) combination of output and income method.

Discussion

204.	NDP is obtained by (a) deducting depreciation from GNP (b) deducting depreciation from GDP (c) including depreciation in GDP(d) including depreciation in GNP
Answer» Option : (b) deducting depreciation from GDP.

Discussion

205.	The largest proportion of national income comes from – (a) Private sector (b) Local sector (c) Public sector (d) None of the above
Answer» (a) Private sector

Discussion

206.	Define national income in terms factors of production.
Answer» The sum of total income earned by the nation from the contribution of four factors of production in national production is called national income. Thus, National income = Rent + Wages + Interest + Profits.

Discussion

207.	Define national product.
Answer» The sum of total production value of final products and services obtained by various factors of production in various sectors namely agriculture, industries and services within a year is called the national product. ∴ National Product = Total Production of (Agriculture + Industries + Service sector)

Discussion

208.	What is the income method of calculating national income?
Answer» Goods produced for defence or police cannot be sold to open market. Hence, they are not considered in national income.

Discussion

209.	What should be deducted from GDP to get NDP?(A) Depreciation(B) Net factor income from abroad(C) Indirect tax(D) Subsidy
Answer» Correct option is (A) Depreciation

Discussion

210.	Which is a flow concept? (a) Number of shirts (b) Total wealth (c) Monthly income (d) Money supply
Answer» (c) Monthly income

Discussion

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State with reasons whether you agree or disagree with the following statements:Illegal income is not included in National Income.

Complete the Correlation :(1) ……………… :C+I+G+(X-M)::GNP:C+I+G + (XM) + (R-P).(2) Output method : ……………… :: Income method : Factor cost method(3) Theoretical difficulty : Transfer payments :: ……………… : Valuation of Inventories

In India, national income is estimated using (a) output method (b) income method (c) expenditure method (d) combination of output and income method

NDP is obtained by (a) deducting depreciation from GNP (b) deducting depreciation from GDP (c) including depreciation in GDP(d) including depreciation in GNP

The largest proportion of national income comes from – (a) Private sector (b) Local sector (c) Public sector (d) None of the above

Define national income in terms factors of production.

Define national product.

What is the income method of calculating national income?

What should be deducted from GDP to get NDP?(A) Depreciation(B) Net factor income from abroad(C) Indirect tax(D) Subsidy

Which is a flow concept? (a) Number of shirts (b) Total wealth (c) Monthly income (d) Money supply