MULTIPLE CHOICE.

Choose the one alternative that best completes the statement or answers the
question.
1) Gross domestic product is a measure of the total value of all:
A) consumer income in an economy over a period of time.
B) capital accumulation in an economy over a period of time.
C) sales in an economy over a period of time.
D) final goods and services produced in an economy over a period of time.
2) If Nike, an American corporation, produces sneakers in Thailand this would:
A) add to neither U.S. GDP nor Thailand's GDP.
B) add to Thailand's GDP but not to U.S. GDP.
C) count as part of U.S. GDP since it is a U.S. corporation.
D) count for both Thailand's GDP and U.S. GDP.
3) Intermediate goods are excluded from GDP because:
A) they represent goods that have never been purchased so they cannot be counted.
B) their inclusion would understate GDP
C) their inclusion would involve double counting.
D) the premise of the question is incorrect because intermediate goods are directly included in
calculating GDP.
4) Economists distinguish real GDP from nominal GDP to:
A) determine whether economic welfare has changed.
B) determine whether real production has changed.
C) measure the change in nominal interest rates.
D) determine whether the government sector is growing.
5) In years with inflation, nominal GDP increases ________ real GDP.
A) at the same rate as
B) faster than
C) slower than
D) sometimes faster, sometimes slower, and sometimes at the same rate as
6) Real GDP can be criticized as a measure of economic welfare because it:
A) does not include the value of products produced in the household.
B) does not include leisure time available to a society.
C) does not take account of the degradation of environmental quality.
D) All of the above answers are correct.
7) If nominal GDP rises we can say that:
A) production has fallen and prices have risen.
B) production has risen and prices remain constant.
C) production has risen or prices have risen or both have risen.
D) prices have risen and production remains constant.

8) Which of following statement is true about the Economic Growth

a. It refers to increase in Gross Domestic Product ( GDP)
b. It refers to the long and sustained rise in real Gross Domestic Product (GDP)
c. It is characterized by fall in unemployment rate
d. Rise in GDP on monetary term
9) Mixed Economy Implies
a. Absence of Public Sector
b. Absence of private sector
c. Co-existence of public and private sector
d. All economic activities are motivated by social welfare
10) Consider the following statements:
1. Indias GDP is more than its GNP.
2. Net Factor Income from Abroad (NFIA) is positive for India.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
11) Census in India is being held regularly after every
a) 6 years
b) 8 years
c) 10 years
d) 12 years
12) Which of the following estimates the National Income in India?
a) Central Statistical Organization
b) National Income Committee
c) Planning commission
d) Reserve Bank of India
13) What is Net National Product?
a) The money value of final goods and services produced annually in the economy
b) The money value of annual service generation in the economy
c) The money value of tangible goods produced annually in the economy
d) The money value of tangible goods available in the economy
14) To get the Net National Product, we deduct what from the Gross National Product?
a) direct taxes
b) imports
c) interim payments
d) depreciation/loss
15) The economic liberalization was introduced in
a) 1991
b) 1990

c) 1985
d) 1988
16) To adjust GDP from market prices to factor cost:
a) Add indirect taxes
b) Subtract subsidies
c) Deduct indirect taxes and deduct subsidies
d) Deduct indirect taxes and add subsidies
17) To adjust from Net National Product to Gross National Product:
a) Add depreciation
b) Deduct indirect taxes
c) Add subsidies
d) Add inflation
18) The Gini coefficient measures:
a) Income inequality
b) Inflation
c) Unemployment
d) Economic growth
19) Real national income measures:
a) Nominal national income adjusted for population change
b) Nominal national income adjusted for unemployment
c) Nominal national income adjusted for inflation
d) Nominal national income adjusted for exchange rates
20) Which of the following statements is true about the circular flow?
a) Output is greater than income
b) Income is more than expenditure
c) Output is less than expenditure
d) Output equals income equals expenditure