RKG INSTITUTE by CA PARAG GUPTA
B - 193, Sector - 52, Noida
NATIONAL INCOME WORKSHEET
Class 12 - Economics
1. Wealth is a [1]
a) Stock concept b) Flow concept
c) Non economic concept d) Hypothetical concept
2. Which of the following is a final product? [1]
a) Milk purchased by a housewife. b) Milk purchased by a tea seller
c) Milk purchased by a hotel d) Expenditure on maintenance by a firm.
3. Stock is a [1]
a) Static concept b) Hypothetical concept
c) Non economic concept d) Dynamic concept
4. Which of the following is not a component of domestic income? [1]
a) Compensation of employees b) Operating surplus
c) Net factor income from abroad d) Mixed income
5. Scholarship is an example of [1]
a) transfer payment b) grant
c) capital formation d) subsidies
6. If factor cost is greater than market price, it means that [1]
a) Indirect taxes > subsidies b) Indirect taxes = subsidies
c) Indirect taxes d) None of these
7. The durable goods which undergo wear and tear with gradual use, and thus are repaired or gradually replaced [1]
over time are:
a) Consumer durables b) Intermediate goods
c) Both Capital goods and Consumer durables d) Capital goods
8. Gross domestic product at market prices is [1]
a) The value of all final domestic services b) None of these
consumed in an accounting year.
c) The value of all domestic goods and d) The value of all final domestic goods and
services consumed in an accounting year. services produced in an accounting year.
9. Net factor income from abroad is the income earned by: [1]
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, a) Non-residents abroad b) Residents abroad
c) Residents in the domestic territory only d) Non residents in the domestic territory
10. Why are exports included in the estimation of domestic product by the expenditure method? [1]
a) Because it was sold b) Because the export goods are produced in
the domestic territory
c) Because it has to be produced d) Because payments are made against it
11. The problem of Double counting can be avoided by: [1]
a) counting only value of final products b) counting only value added
c) All of these d) not counting value of intermediate products
12. Assertion (A): Goods that are used in the process of production for several years and are of high value, are [1]
referred to as capital goods.
Reason (R): Yarn is a capital good for a textile manufacturer.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
13. Assertion (A): GDP as an index of welfare many under state or over state welfare. [1]
Reason (R): It does not consider non-monetary exchanges.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
14. Assertion (A): Real GDP is a better indicator of economic growth. [1]
Reason (R): It is not affected by changes in general price level.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
15. Assertion (A): Real GDP is a better indicator of economic growth and welfare of people of the country than [1]
Nominal GDP.
Reason (R): Real GDP is not affected by changes in general price level. Secondly, because increase in real GDP
means more goods and services are available to the society during the year, thus, welfare increases.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
16. State True or False: [8]
(i) Value Addition = Value of output - Expenditure on intermediate goods and services [1]
(ii) Capital goods are used for producing other goods. [1]
(iii) Higher Gross Domestic Product (GDP) means greater per capita availability of goods in the economy. [1]
(iv) Profits earned by non-resident companies in India are not a part of our domestic income. [1]
(v) The sale of a second-hand car is not included in national income. [1]
2/6
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B - 193, Sector - 52, Noida
NATIONAL INCOME WORKSHEET
Class 12 - Economics
1. Wealth is a [1]
a) Stock concept b) Flow concept
c) Non economic concept d) Hypothetical concept
2. Which of the following is a final product? [1]
a) Milk purchased by a housewife. b) Milk purchased by a tea seller
c) Milk purchased by a hotel d) Expenditure on maintenance by a firm.
3. Stock is a [1]
a) Static concept b) Hypothetical concept
c) Non economic concept d) Dynamic concept
4. Which of the following is not a component of domestic income? [1]
a) Compensation of employees b) Operating surplus
c) Net factor income from abroad d) Mixed income
5. Scholarship is an example of [1]
a) transfer payment b) grant
c) capital formation d) subsidies
6. If factor cost is greater than market price, it means that [1]
a) Indirect taxes > subsidies b) Indirect taxes = subsidies
c) Indirect taxes d) None of these
7. The durable goods which undergo wear and tear with gradual use, and thus are repaired or gradually replaced [1]
over time are:
a) Consumer durables b) Intermediate goods
c) Both Capital goods and Consumer durables d) Capital goods
8. Gross domestic product at market prices is [1]
a) The value of all final domestic services b) None of these
consumed in an accounting year.
c) The value of all domestic goods and d) The value of all final domestic goods and
services consumed in an accounting year. services produced in an accounting year.
9. Net factor income from abroad is the income earned by: [1]
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, a) Non-residents abroad b) Residents abroad
c) Residents in the domestic territory only d) Non residents in the domestic territory
10. Why are exports included in the estimation of domestic product by the expenditure method? [1]
a) Because it was sold b) Because the export goods are produced in
the domestic territory
c) Because it has to be produced d) Because payments are made against it
11. The problem of Double counting can be avoided by: [1]
a) counting only value of final products b) counting only value added
c) All of these d) not counting value of intermediate products
12. Assertion (A): Goods that are used in the process of production for several years and are of high value, are [1]
referred to as capital goods.
Reason (R): Yarn is a capital good for a textile manufacturer.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
13. Assertion (A): GDP as an index of welfare many under state or over state welfare. [1]
Reason (R): It does not consider non-monetary exchanges.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
14. Assertion (A): Real GDP is a better indicator of economic growth. [1]
Reason (R): It is not affected by changes in general price level.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
15. Assertion (A): Real GDP is a better indicator of economic growth and welfare of people of the country than [1]
Nominal GDP.
Reason (R): Real GDP is not affected by changes in general price level. Secondly, because increase in real GDP
means more goods and services are available to the society during the year, thus, welfare increases.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
16. State True or False: [8]
(i) Value Addition = Value of output - Expenditure on intermediate goods and services [1]
(ii) Capital goods are used for producing other goods. [1]
(iii) Higher Gross Domestic Product (GDP) means greater per capita availability of goods in the economy. [1]
(iv) Profits earned by non-resident companies in India are not a part of our domestic income. [1]
(v) The sale of a second-hand car is not included in national income. [1]
2/6
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