National Income Part 1

1.How many approaches in calculating national income?

• 4

• 3

• 2

• 1

3.Which one of the following is NOT included in National Income?

• Old age pension

• salary

• wages

• bonus

5.The value of the output of all goods and services produced within a country in a year.

• total output

• Gross Domestic Product

• national income

• net domestic product

6.When a nation's exports exceed its imports and is calculated as exports - imports

• trade surplus

• trade deficit

• inventory

• gross domestic product

7.When a nation's imports exceed its exports and is calculated as imports -exports

• inventory

• gross domestic product

• trade surplus

• trade deficit

8.Which of the following is a final expenditure ?

• Car purchased by a dealer

• Vegetables purchased by a restaurant

• Milk purchased by a tea-maker

• Car purchased by a household

9.Which is an example of a final good or service

• Coffee Beans at Starbucks

• T-Shirt at Polo Store

• Lumber at furniture store

• Wheat at a bakery

10.What is depreciation?

• Capital loss

• Fixed capital loss

• Consumption of fixed capital

• None

The method of computing national income, by adding up the total value of final goods and services in the economy is known as

• expenditure approach

• circular flow approach

• income approach

• output approach

In computing GDP, it is essential to

• avoid double counting

• include government transfer payments

• include government tax revenue

• count all intermediate products directly as they are produced