National Income Accounting Test

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National Income Accounting Test - 6

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Weekly Quiz Competition

Question 1
1 / -0

The national income of nation is the ________.

A
government's annual revenue

B
sum total of factor incomes

C
surplus of public sector undertakings

D
exports minus imports

Solution

National Income. National Income is the sum total of factor incomes earned by the normal residents of a country in the form of wages, rent, interest and.
Question 2
1 / -0

National Income is _________.

A
governments' annual income

B
budget estimates

C
sum total of all incomes

D
revenue of public utility services

Solution

National Income: National Income is the sum total of factor incomes earned by the normal residents of a country in the form of wages, rent, interest and.
Question 3
1 / -0

When the firm thinks of availing discount on bulk purchases, then ____________________________.

A
The number of orders will increases if the minimum quantity of purchase is less than the EOQ.

B
The carrying costs will increases if the EOQ is less than the minimum quantity of purchase.

C
The discount will not affect the carrying costs.

D
Incremental benefits come due to discount and carrying costs.

E
The incremental costs are equal to incremental befits and so discount can be ignored to calculated EOQ.

Solution

When the minimum quantity for purchases is more than the economic order quantity, then there will be an increase in the average value of the inventory which will result in higher incidence of carrying cost.
Question 4
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National income is a _________.

A
stock variable

B
flow variable

C
asset variable

D
none of the above

Solution

National income is the value of goods and services produced in an economy over a given year. The national income is thus, estimated 'over a period of time' and not 'at a point in time' which makes it a flow concept.
Question 5
1 / -0

Which of the following methods or inventory valuation results in lower valuation of inventory and low income when Inflation is on the rise?

A
LIFO

B
FIFO

C
Simple average method

D
Weighed average method

Solution

During times of rising prices, companies may find it beneficial to use LIFO cost accounting over FIFO. Under LIFO, whenever prices are rising, firms can save on taxes as well as better match their revenues to their latest costs.
Question 6
1 / -0

An increase in national income because of an increase in price is called ________.

A
an increase in national income in real terms

B
an increase in national income at constant prices

C
an increase in money national income

D
an increase in national income at base year prices

Solution

Base year prices are taken in consideration while calculating the GDP and CPI as well, it is primarily the the year from the prices are taken and then multiplied by the quantities of all services and goods purchased for the following years. So when the prices increase in the current period the national income calculated also increase. This increase is over the base year prices.
Question 7
1 / -0

What are the entities present in an circular flow of income in a simple economy?

A
Firms

B
Household

C
Bank

D
All of the above

Solution

Circular flow of income refers to the flow of national income between the various economic agents.
The term 'economic agents' in a simple economy refers to the households in the economy, who provide factors of production and earn income; the firms in the economy, who employ factors of production and sell output produced to generate revenue; the government who plays an active role in providing the economic infrastructure and collects revenue for the same; and the banks who help in the process of savings and mobilisation of savings in the economy.
Question 8
1 / -0

Paid services are included in __________.

A
national income

B
demand

C
price

D
none of the above
Question 9
1 / -0

What is the circular flow of income?

A
It shows the flow of national income in an economy.

B
It shows the flow of income of only an individual.

C
It shows the flow of income of an industry.

D
None of the above.

Solution

Circular flow of income refers to the flow of national income between the various economic agents.
The term 'economic agents' refers to the households in the economy, who provide factors of production and earn income; the firms in the economy, who employ factors of production and sell output produced to generate revenue; and the government who plays an active role in providing the economic infrastructure and collects revenue for the same.
Question 10
1 / -0

Which of the following are the methods for measuring National Income?

A
The Product or Value Added Method

B
Expenditure Method

C
Income Method

D
All of the above

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Re-Attempt Weekly Quiz Competition

National Income Accounting Test - 6

Result

National Income Accounting Test - 6

Score

-

Rank

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SHARING IS CARING

Question 1

government's annual revenue

sum total of factor incomes

surplus of public sector undertakings

exports minus imports

Solution

Question 2

governments' annual income

budget estimates

sum total of all incomes

revenue of public utility services

Solution

Question 3

The number of orders will increases if the minimum quantity of purchase is less than the EOQ.

The carrying costs will increases if the EOQ is less than the minimum quantity of purchase.

The discount will not affect the carrying costs.

Incremental benefits come due to discount and carrying costs.

The incremental costs are equal to incremental befits and so discount can be ignored to calculated EOQ.

Solution

Question 4

stock variable

flow variable

asset variable

none of the above

Solution

Question 5

LIFO

FIFO

Simple average method

Weighed average method

Solution

Question 6

an increase in national income in real terms

an increase in national income at constant prices

an increase in money national income

an increase in national income at base year prices

Solution

Question 7

Firms

Household

Bank

All of the above

Solution

Question 8

national income

demand

price

none of the above

Question 9

It shows the flow of national income in an economy.

It shows the flow of income of only an individual.

It shows the flow of income of an industry.

None of the above.

Solution

Question 10

The Product or Value Added Method

Expenditure Method

Income Method

All of the above

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