National Income Quiz

National income is measured by:

• GDP (Gross Domestic Product)

• GNP (Gross National Product)

• NNP (Net National Product)

• All of the above

What is the difference between GDP and GNP?

• GDP includes income earned by citizens abroad, while GNP does not

• GDP excludes income earned by citizens abroad, while GNP includes it

• GDP is used for international comparisons, while GNP is not

• GDP measures domestic production, while GNP measures national income

National income data is used for:

• Economic planning and policy-making

• Business decision-making

• International comparisons

• All of the above

A difficulty in measuring national income is:

• Including non-monetary transactions

• Accounting for income earned by foreigners

• Calculating depreciation accurately

• All of the above

NNP (Net National Product) is calculated by subtracting:

• Depreciation from GNP

• Indirect taxes from GNP

• Subsidies from GNP

• Direct taxes from GNP

Which of the following is NOT a component of national income?

• Consumption

• Investment

• Government spending

• Imports

National income can be calculated using the expenditure approach by summing:

• Consumption, investment, government spending, and net exports

• Consumption, investment, and government spending

• Consumption and investment

• Government spending and net exports

The income approach to national income includes:

• Wages, rents, interest, and profits

• Consumption, investment, and government spending

• Imports and exports

• Taxes and subsidies

What is the purpose of adjusting national income for inflation?

• To calculate real GDP

• To compare economic growth over time

• To adjust for population growth

• All of the above

Which of the following is a limitation of using GDP as a measure of economic well-being?

• It includes non-monetary transactions

• It does not account for income inequality

• It includes the value of leisure time

• It measures only domestic production