National Accounts MCQ — 72 Practice Questions with Answers

Q1. Consider the following statements regarding final expenditure and GDP expenditure components: 1. Final expenditure consists only of exports less imports. 2. Final expenditure consists of final consumption expenditure and gross fixed capital formation. 3. In the expenditure approach, GDP includes final consumption expenditures, gross capital formation and exports less imports. Which of the statements given above are correct?

Q2. Consider the following statements regarding improvements in the new GDP series: 1. The new series improves compilation of the private corporate institutional sector by segregating activities in multi-activity enterprises. 2. Double deflation is used in the agriculture and manufacturing sectors. 3. The pro-rata benchmarking method has replaced the Proportional Denton method. Which of the statements given above are correct?

Q3. Consider the following statements: 1. Nominal GDP is also called GDP at current prices or GDP in value. 2. Nominal GDP is better suited than real GDP for comparing output over time because it excludes price changes. 3. Real GDP requires adjustment of nominal GDP for price changes. Which of the statements given above are correct?

Q4. Consider the following statements: 1. GDP at basic price includes taxes less subsidies on production but not on products. 2. GDP at market price is obtained from GDP at basic price by subtracting taxes less subsidies on products, including those relating to import/export. 3. Intermediate Consumption denotes the input consumed in the production process. 4. GDP at factor cost is measured after adding taxes and subtracting subsidies. Which of the statements given above are correct?

Q5. Consider the following statements: 1. Gross National Income is obtained by adding net compensation of employees and property income received from the rest of the world to the overall income measure of the economy. 2. In a closed economy, savings equal capital formation during the year. 3. Net National Disposable Income is obtained by subtracting net taxes on income and wealth receivable from abroad from Net National Income. 4. In National Accounts terminology, National Income is the same as Gross National Income. Which of the statements given above are correct?