GDP & National Income — Set 5
Economy Advanced · GDP और राष्ट्रीय आय · Questions 41–50 of 140
GNP is $600 billion and Depreciation is $50 billion. NNP is:
Correct Answer: C. C. $550 billion
NNP = GNP - Depreciation = $600 billion - $50 billion = $550 billion. NNP represents the net value of output after accounting for the replacement of worn-out capital. It is a better measure of sustainable economic welfare than GNP because it accounts for capital consumption.
If NNP at Market Price is $400 billion and Net Indirect Taxes are $30 billion, National Income (NNP at FC) is:
Correct Answer: C. C. $370 billion
National Income (NNP at Factor Cost) = NNP at Market Price - Net Indirect Taxes = $400 billion - $30 billion = $370 billion. Net Indirect Taxes = Indirect Taxes - Subsidies. Subtracting net indirect taxes converts market price measures to factor cost measures, reflecting actual factor earnings.
India's GDP at constant prices is used to measure:
Correct Answer: B. B. Real economic growth rate (volume growth)
GDP at constant prices (real GDP) eliminates the effect of price changes and measures the actual volume of goods and services produced. It is used to calculate the real economic growth rate, which indicates true improvement in living standards. The official growth rate announced each year is based on constant 2011-12 prices.
Which release by NSO provides the most accurate GDP estimate for a completed year?
Correct Answer: D. D. Third Revised Estimate (Final)
The Third Revised Estimate (considered the Final Estimate) provides the most accurate GDP figure for a completed financial year. It is released approximately 2-3 years after the reference year, when complete data from all sources is available. Earlier estimates (Advance, First, Second Revised) are based on partial data and are subject to revisions.
The ratio of National Income to population is called:
Correct Answer: B. B. Per Capita Income
Per Capita Income is the ratio of National Income to the total population of the country. It represents the average income per person and is a basic indicator of the standard of living. While useful for international comparisons, per capita income does not reflect income distribution within the country.
India's nominal GDP for FY 2023-24 crossed approximately:
Correct Answer: B. B. ₹293 lakh crore
India's nominal GDP for FY 2023-24 was approximately ₹293 lakh crore (about $3.57 trillion). This represented a significant milestone in India's economic growth trajectory. The nominal GDP growth was driven by both real output growth and inflation effects in the economy.
Which of the following represents the correct hierarchy of National Income aggregates?
Correct Answer: A. A. GDP > GNP > NNP > NI
The correct hierarchy (generally for countries with positive NFIA and net indirect taxes) is GDP > GNP > NNP > NI (National Income). However, for India specifically, GNP > GDP due to positive NFIA from remittances. NNP < GNP because depreciation is subtracted. NI (NNP at FC) < NNP at market price because net indirect taxes are subtracted.
The agricultural sector's share in India's GDP (GVA) is approximately:
Correct Answer: B. B. 15-18%
Agriculture (including allied activities like forestry, fishing, livestock) contributes approximately 15-18% to India's GVA. Despite this modest share, agriculture employs about 45-50% of India's workforce, highlighting a significant productivity gap between agriculture and other sectors. This structural disparity is a key challenge for India's economic development.
Services sector's share in India's GDP is approximately:
Correct Answer: C. C. 55-57%
The Services sector contributes approximately 55-57% to India's GDP (GVA). Key service sub-sectors include IT/ITES, finance and banking, trade, hospitality, education, and healthcare. India's strong services sector, particularly IT exports, has been a key driver of economic growth since the 1990s liberalisation.
What is 'twin balance sheet problem' in the context of India's GDP growth?
Correct Answer: B. B. Stressed banks and over-leveraged corporate sector slowing investment and GDP
The 'twin balance sheet problem' refers to simultaneous stress in banks (high NPAs) and the corporate sector (over-leveraged balance sheets). This dual stress reduces both credit supply (banks reluctant to lend) and credit demand (corporates reluctant to borrow), dragging down investment and GDP growth. The Economic Survey 2016-17 popularised this term in India's context.