2nd PUC Economics Textbook Answers National Income
Here in this page we have given Economics Textbook for 2nd Year Pre University Course (2nd PUC) Solution for Chapter 2 National Income. Here 2nd PUC Economics Textbook Answers full Solution by Teachers.
Multiple choice questions
1.) Net National product at factor cost is also known as
(a) National Income (b) Domestic Income (c) Per capita Income (d) Salary.
Ans.(a) National Income
2.) Primary sector is …………………..
(a) Industry (b) Trade (c) Agriculture (d) Construction.
Ans.(c) Agriculture
3.) National income is measured by using ……….. methods.
(a) Two (b) Three (c) Five (d) Four
Ans.(b) Three
4.) Income method is measured by summing up of all forms of …………… (a) Revenue (b) Taxes (c) expenditure (d) Income
Ans.(d) Income
5.) Which is the largest figure?
(a) Disposable income (b) Personal Income (c) NNP (d) GNP
Ans.(d) GNP
6.) Expenditure method is used to estimate national income in …………..
(a) Construction sector (b) Agricultural Sector (c) Service sector (d) Banking sector
Ans.(a) Construction sector
7.) Tertiary sector is also called as ………. sector (a) Service (b) Income (c) Industrial (d) Production
Ans.(a) Service
8.) National income is a measure of the ……… performance of an economy.
(a) Industrial (b) Agricultural (c) Economic (d) Consumption
Ans.(c) Economic
9.) Per capita income is obtained by dividing the National income by …………
(a) Production (b) Population of a country (c) Expenditure (d) GNP
Ans.(b) Population of a country
10.) GNP = ………. + Net factor income from abroad.
(a) NNP (b) NDP (c) GDP (d) Personal income
Ans.(c) GDP
11.) NNP stands for ………. (a) Net National Product (b) National Net product (c) National Net Provident (d) Net National Provident
Ans.(a) Net National Product
12.) ……… is deducted from gross value to get the net value. (a) Income (b) Depreciation (c) Expenditure (d) Value of final goods
Ans.(b) Depreciation
13.) The financial year in India is …… (a) April 1 to March 31 (b) March 1 to April 30 (c) March 1 to March 16 (d) January 1 to December 31
Ans.(a) April 1 to March 31
14.) When net factor income from abroad is deducted from NNP, the net value is ……. (a) Gross National Product (b) Disposable Income (c) Net Domestic Product (d) Personal Income
Ans.(c) Net Domestic Product
15.) The value of NNP at production point is called …… (a) NNP at factor cost (b) NNP at market cost (c) GNP at factor cost (d) Per capita income
Ans.(a) NNP at factor cost
16.) The average income of the country is …. (a) Personal Income (b) Per capita income (c) Inflation Rate (d) Disposal Income
Ans.(b) Per capita income
17.) The value of national income adjusted for inflation is called …. (a) Inflation Rate (b) Disposal Income (c) GNP (d) Real national income
Ans.(d) Real national income
18.) Which is a flow concept ? (a) Number of shirts (b) Total wealth (c) Monthly income (d) Money supply
Ans.(c) Monthly income
19.) PQLI is the indicator of ……………… (a) Economic growth (b) Economic welfare (c) Economic progress (d) Economic development
Ans.(b) Economic welfare
20.) The largest proportion of national income comes from ……. (a) Private sector (b) Local sector (c) Public sector (d) None of the above
Ans(a) Private sector
Answer the following questions in one or two sentences.
21.) Define National Income.
Ans – National Income means the total money value of all final goods and services produced in a country during a particular period of time.
22.) Write the formula for calculating GNP.
Ans – The formula of calculating GNP = (C + I + G + (X-M) + (R-P))
23.) What is the difference between NNP and NDP?
Ans – NNP – 1. NNP refers to the value of the net output of the economy during the year.
NDP – 1.NDP is the value of net output of the economy during the year.
NNP – 2.NNP = GNP – depreciation allowance.
NDP – 2.NDP= GDP – Depreciation.
24.) Trace the relationship between GNP and NNP.
Ans -1. GNP refers to measured the total flow of finished good and services at market price. 2.) NNP refers to the value of the net output of the economy during the year.
3.) The formula of calculate NNP is express as, NNP = GNP – depreciation allowance.
4.) To find out NNP we need to deduct the value of depreciation allowed form the value of GNP.
25.) What do you mean by the term ‘Personal Income’?
Ans – personal income is the value of income which received by individual before deduction the direct tax on such income. Personal income is the one part of national income. We get personal income when we deducting undistributed corporate profit, and employees’ contributions to funds form the national income.
26.) Define GDP deflator.
Ans – GDP deflator is an index of price changes of goods and services included in GDP. To the formula of calculation of GDP deflator by dividing the nominal GDP in a given year bythe real GDP for the same year and multiplying it by 100.
29.) Differentiate between personal and disposable income.
Ans – personal income -1. Personal income is such income which earn by individual person ina year by all sources and on such income direct tax is not paid.
2.) Personal Income = National Income – (Social Security Contribution and undistributed corporate profits) + Transfer payments
3.) The amount of personal income is always greater than disposal income. Disposal income – 1.) Disposal income is such income of individual on which direct tax ispaid.
2.) Disposable Income = Personal income – Direct Tax.
3.) Disposal income is always be less than personal income.
28.) Write a short note on per capita income.
Ans – capital income is basically the average of the income earn by an individual in a particular year. If the national income of country divide by population then we get pet capital income.
30.) Explain briefly NNP at factor cost.
Ans – NNP at factor cost is basically such amount or cost paid to factors of production. NNP is a market price of output. The formula of NNP =NNP at Market prices – Indirect taxes + Subsidies.
31.) Give short note on Expenditure method.
Ans – Under expenditure method the overall expenditure made by society will be aggregated together of a particular year. This method also called as outleymethod.The expenditure of a society includes net domestic investment,government expenditure on consumption, personal consumption expenditure and capital goods and net exports it will be express as symbol, GNP = C + I + G (X-M). For this method there are some Precautions are provided the following exoaditure notincluded in this method.
1.) the expenditure made on second hand good are not included in expenditure method.
2.)Expenditure on purchase of share and bonds are not includes.
3 .) Expenditure for government pension
4.) Expenditure on seeds and fertilizers by farmers
33.) Write briefly about national income and welfare.
Ans – National income is indicator of wellbeing of country.The economic progress of country is indicated by the GDP of country per capita and annual growth rate. The country which have high GDP and Annual growth rate this country enjoys the greater welfare with high rate of living standard. But increase in GDP Or per capita income is not a good sign everytime. This have some limitation as follows.
1.) The welfare of country depends upon the supply of goods and services. The proportion of goods capita good is less than the consumer good in this case the improvement in welfare is less.
2.) The high rate if GDP cause the higher the pollution which effect the welfare of country .
3.) If ant country increase the production of war good in this it show that the national income of country increase not effect in Welfare.