Please refer to Chapter 8 National Income Accounting MCQ Class 12 Economics with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 12 Economics. Students should refer to MCQ Questions for Class 12 Economics with Answers to score more marks in Grade 12 Economics exams. Students should read the chapter National Income Accounting and then attempt the following objective questions.

MCQ Questions Class 12 Economics Chapter 8 National Income Accounting

National Income Accounting MCQ Class 12 Economics provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. The subject of the Study of Macro Economics is:
(a) The Principle of National Income
(b) The Principle of Consumer
(c) The Principle of Producer
(d) None of these

Question.National income is the sum of factor income accruing to
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents

Question. Which of the following is a part of Expenditure Method?
(a) Rent and Royalty
(b) Mixed Income
(c) Net Exports
(d) Sales

Question. Which of the following is not included in the calculation of Gross National Product ?
(a) Purchase and Sale of Old commodities
(b) Intermediate Commodities
(c) (a) and (b) both
(d) None of the above

Question. Which one is included in three-sector model ?
(a) Family
(b) Firm
(c) Government
(d) All of these

Question. Macroeconomics is concerned with:
(a) the level of output of goods and services in the economy
(b) the general level of prices
(c) GDP growth
(d) all of these

Question. Accounting of National Income at constant prices is known as
(a) Money income
(b) Real income
(c) Current income
(d) Domestic income

Question. Which of the following is included in real flow ?
(a) Flow of Goods
(b) Flow of Services
(c) Both (a) and (b)
(d) None of these

Question. GDPMP = GDP + ________ :
(a) Depreciation
(b) Indirect taxes
(c) NFIA
(d) Subsidies

Question. Which one is included in the three-sector model?
(a) Family
(b) Firm
(c) Government
(d) All of these

Question. According to income method, domestic income is equal to:
(a) Rend and Royalty + Interest + Profit + Comensation of employees + Mixed Income
(b) Operating surplus + Compensation of employees + Income of self employed
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Question. What percentage of Indians pay income tax?
(a) 15%
(b) 12%
(c) 9%
(d) 3%

Question. The market value of all final goods and services produced in an economy over a year is called :
(a) Gross National Product
(b) National Income
(c) Gross Domestic Product
(d) Net National Product

Question. To include the value of goods or services more than one time while calculating National Income is called :
(a) Single Counting
(b) Double Counting
(c) Multiple Counting
(d) None of these

Question. ‘Income of the family’ is the example of which variable?
(a) Stock
(b) Flow
(c) Both stock and flow
(d) Neither stock nor flow

Question. National income is the sum of factor income accruing to
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents

Question. For a four sector or open economy the condition for equilibrium is:
(a) Savings + taxes + Imports = Investment + govt, expenditure + exports
(b) Total Leakages = Total Injections
(c) Aggregate output = Aggregate Expenditure
(d) All of these

Question. Which one is the limitation of Macro Economics ?
(a) Collective Economic Paradox
(b) Ignores Individual Units
(c) Both (a) and (b)
(d) None of these

Question. Which of the following is considered as financial year in India?
(a) April 1 to March 31
(b) January 1 to December 31
(c) March 1 to April 30
(d) March 16 to March 15

Question. Net capital formation causes
(a) Increase in production capacity
(b) Increase in depreciation
(c) Increase in profits
(d) Increase in cost

Question. Employment Theory is related to :
(a) Static Economics
(b) Micro Economics
(c) Macro Economics
(d) None of these

Question. Reason for the circular flow of income is:
(a) government intervention
(b) production of goods and services
(c) mutual interdependence of producer and household sector
(d) invention of money

Question. Economics territory is one in which the following move freely :
(a) People
(b) Goods
(c) Capital
(d) All the above

Question. What is the net value of GDP after deducting depreciation from GDP?
(a) Net national product
(b) Net domestic product
(c) Gross national product
(d) Disposable income

Question. Which of the following is included in real flow?
(a) Flow of Goods
(b) Flow of Services
(c) Both (a) and (b)
(d) None of these

Question. NNPMP = __
(a) GNPMP – Depreciation
(b) NDPMP + Net factor income from abroad
(c) NNPFC + Net indirect taxes
(d) All of these

Question. Which of the following is not true about final goods?
(a) Final gods satisfy wants of ultimate consumers and producers.
(b) Final goods have direct demand as they satisfy the wants directly.
(c) Final goods are subject to further transformation in the process of production.
(d) Final goods are neither used up as raw-material nor for resale in the same year.

Question. National income includes:
(a) old-age pensions
(b) money spent by an NRI to his family in India
(c) transfer payments from rest of the world
(d) none of these

Question. Which of the following is included in the primary sector:
(a) Land
(b) Forest
(c) Mines
(d) All of the above.

Question. The value of NNP at production point is called
(a) NNP at factor cost
(b) NNP at market price
(c) GNP at market price
(d) GNP at factor cost

Question. Which of the following is the method of measuring National Income?
(a) Income method
(b) Product method
(c) Expenditure method
(d) All of these

Question. Employment Theory is related to :
(a) Static Economics
(b) Micro Economics
(c) Macro Economics
(d) None of these

Question. Which of the following is sPktock ?
(a) Wealth
(b) Saving
(c) Export
(d) Profit

Question. In GNP calculation which of the following should be excluded?
(a) Rental incomes
(b) Interest payments
(c) Dividends
(d) Government transfer payment

Question. Which of the following is a synonym of “Undistributed Profits” ?
(a) Savings of private corporate sector
(b) Reserves and Surplus
(c) Retained Earnings
(d) A11 of these

Question. Which of the following is not included in national income?
(a) Receipt of a gift checque sent by your parents settled abroad
(b) REpatriation of wages earned by the NRIs to their parents in India
(c) Excise duty on domestic production
(d) All of these

Question. Which one is included in National Income ?
(a) Rent, Wage, Interest
(b) Rent, Wage, Salary
(c) Rent, Profit, Interest
(d) Rent, Wage, Salary, Interest, Profit

Question. The primary sector includes:
(a) Agriculture
(b) Retail trading
(c) Small Industries
(d) All the these

Question. Capital and investment are:-
(a) Both flows
(b) Both stocks
(c) Capital is stock while investment is flow
(d) Investment is stock while capital is flow

Question. Output means . ……………unless stated otherwise
(a) Gross output at MP
(b) Net output at MP
(c) Gross output at FC
(d) None

Question. Which of the following leads to depreciation?
(a) Normal wear and tear
(b) Damages due to floods
(c) Damages due to market – crash
(d) None of these

Question. Which of following is not a part of national income ?
(a) Depreciation
(b) Net factor income from abroad
(c) Operating surplus
(d) Mixed income

Question. Which of the following is a phase of circular flow of income?
(a) Generation Phase
(b) Distribution Phase
(c) Disposition Phase
(d) All of these

Question. If factor cost is greater than marker price, it means that
(a) Indirect taxes < subsidies
(b) Indirect taxes > subsidies
(c) I.T = subsidies
(d) None

Question. “Income method” is also known as:-
(a) Distributive share method
(b) Income Disposal Method
(c) Industrial Origin Method
(d) None of these

Question. Accounting of National Income at constant prices is known as __
(a) Money income
(b) Real income
(c) Current income
(d) Domestic income

Question. Which of the following is correct ?
(a) If national income rises, per capita income must also rise.
(b) If population rises, per capita income must fall.
(c) If national income rises, welfare of the people must rise.
(d) None of the above.

Question. Which one of the following services are included in the Secondary Sector?
(a) Insurance
(b) Manufacturing
(c) Trade
(d) Banking

Question. General Price Level is studied in:
(a) Micro Economics
(b) Macro Economics
(c) Both (a) and (b)
(d) None of these

Question. Which of the following makes GDP an inappropriate index of welfare ?
(a) Non-monetary transactions
(b) Internationalities
(c) Composition and distribution of GDP
(d) All of these

Question. Income of the Family is the example of which variable?
a) Stock Variable
b) Flow Variable
c) Both stock and flow
d) Neither Stock nor flow 

Question. NNP fc is called:
a) National Income
b) Domestic Income
c) Personal Income
d) Private Income 

Question. National Income = Domestic income when:
a) NFIA is Positive
b) NFIA is Negative
c) NFIA is Zero
d) None of the above

Question. Which of the following item will not be included while calculating NDP mp.
a) Private final consumption expenditure
b) Consumption of fixed capital
c) Govt Final consumption expenditure
d) Net Export 

Question. Which of the following will not be included while calculating national income by income method?
a) Wages and Salaries
b) Royalty
c) Scholarship
d) Profit 

Question. Consumption of fixed capital refers to fall in the value of fixed assets…
a) Due to normal wear and tear
b) Due to abnormal wear and tear
c) Due to foreseen obsolescence
d) Due to normal wear and tear and foreseen obsolescence

Question. NVA fc Equals to
a) Sum of factor payments
b) Sum of Current transfer Payments
c) Sum of Capital Transfer Payments
d) Net Current transfer from rest of the world 

Question. Value of output is equal to
a) Sales+ Change in Stock
b) Sales + Closing Stock
c) Sales + Opening Stock
d) Sales- opening Stock 

Question. Which of the following is not a flow variable?
a) Income
b) Capital Formation
c) Supply of Money in a country
d) Leakage of water from a tank 

Question. Which of the following is not included in estimation of NI?
a) Subsidies Lunch
b) Old Age Pension
c) Free Medical Facilities served in office to employees
d) Construction of a House 

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