National Income — Set 4
Economics · राष्ट्रीय आय · Questions 31–40 of 70
What is 'Green GDP'?
Correct Answer: C. GDP adjusted for environmental degradation
Green GDP is an economic growth index that subtracts the cost of environmental damage and natural resource depletion from the standard GDP. It aims to provide a more sustainable measure of national progress. This concept encourages environmentally friendly economic policies.
The 'Value of Output' in national income accounting is defined as?
Correct Answer: B. Sales + Change in Stock
Value of Output is the market value of all goods and services produced by an enterprise during an accounting year. It is equal to the total sales plus the change in the stock of unsold goods. This is the starting point for calculating value added.
Net Indirect Taxes are calculated as?
Correct Answer: A. Indirect Taxes - Subsidies
Net Indirect Taxes (NIT) is the difference between the indirect taxes collected by the government and the subsidies provided to producers. NIT is used to convert factor cost aggregates to market price aggregates. It represents the net tax burden on production.
In which sector is the 'Value Added Method' most commonly used for estimation in India?
Correct Answer: B. Agriculture
The Value Added Method is primarily used for the agriculture and industrial sectors where physical output is easily measurable. It tracks the contribution of each stage of production to the final value. In contrast, the income method is often used for the service sector.
Which of the following would lead to an increase in the Real National Income?
Correct Answer: D. Increase in the quantity of goods and services
Real National Income increases only when there is a rise in the actual volume of goods and services produced. Price increases only raise nominal income, not the real output. True economic development is measured by the growth of real variables.
Economic growth in a country is generally defined as a sustained increase in?
Correct Answer: B. Real GDP
Economic growth specifically refers to a long-term increase in the real output or Real GDP of an economy. It indicates that the capacity of the economy to produce goods and services is expanding. Growth is typically expressed as a percentage rate of increase.
The concept of 'Circular Flow of Income' illustrates the relationship between?
Correct Answer: A. Households and Firms
The circular flow shows how money moves through the economy between producers (firms) and consumers (households). Firms pay households for factor services, and households spend that money on goods produced by firms. This flow is the basis for measuring national income through different methods.
Who is credited with the first scientific estimation of National Income in India (1931-32)?
Correct Answer: A. V.K.R.V. Rao
Dr. V.K.R.V. Rao was the first to use a systematic and scientific method to estimate India's national income during the colonial period. He used a combination of the product and income methods for different sectors. His work provided a more reliable picture of the Indian economy than earlier attempts.
GDP at Factor Cost + Net Indirect Taxes = ?
Correct Answer: C. GDP at Market Price
Market price is equal to the factor cost plus the net indirect taxes (indirect taxes minus subsidies). This formula adjusts the cost of production to the actual price prevailing in the market. It is the standard way to bridge producer costs and consumer prices.
What is the primary objective of national income accounting?
Correct Answer: B. To provide a numerical measure of economic activity
National income accounting provides a comprehensive framework for measuring the total economic performance of a nation. It allows policymakers to track growth, identify trends, and formulate economic policies. It acts as a report card for the entire economy.