PRACTICE TEST SERIES CLASS 12 (2023-2024)

Test 01 | Macro | Unit-I National Income and Related Aggregates

Time allowed: 1.5 hours Maximum Marks: 40

General instructions:
 This paper contains 10 Multiple Choice Questions type questions of 1 mark each.
 This paper contains 2 Short Answer Questions type questions of 3 marks each to be
answered in 60 to 80 words.
 This paper contains 3 Short Answer Questions type questions of 4 marks each to be
answered in 80 to 100 words.
 This paper contains 2 Long Answer Questions type question of 6 marks to be
answered in 100 to 150 words.

Q. Questions Marks
No.
1 From the statements given in Column I and Column II, choose the correct pair. 1
Column I Column II
A. Vegetable grown in the Personal garden (i) Non marketing activity
B. A car used as a taxi (ii) Consumer good
C. An air-conditioner used by household (iii) Capital good
D. Scholarship given to students by (iv) Factor income
government
Alternatives:
(a) A-(i) (b) B-(ii)
(c) C-(iii) (d) D-(iv)
2 Complete the table: 1
Producer Value of output Intermediate Consumption Value Added
Famer 2000 – 2000
Baker (i) . 2000 2000
Retail Seller 4,400 (iii) . 400
Total (ii) . 6,000 (iv) .
Alternatives:
(a) 4000, 10400, 4000, 4000 (b) 4000, 10400, 4000, 4400
(c) 2000, 6000, 6000, 4400 (d) 4000, 10400, 6000, 4000
3. Which of the following is true for the National Income of a country? 1
(a) If the savings exceed the investment within a country, the National Income
will rise.
(b) If the savings exceed the investment within a country, the National Income
will fall.
(c) If the savings exceed the investment within a country, the National Income
will fluctuate.
(d) If the savings exceed the investment within a country, the National Income
will remain constant.
4. Read the following figure carefully and choose the correct pair from the 1
alternatives given below:

Alternatives:
(a) Output, Production (b) Value added, Production
(c) Output, Disposition (d) Wealth, Development
5. Match the following 1
LIST I LIST II
(I) NDPFC (A) GDPFC + Net Indirect Taxes – Depreciation
(II) GNPMP (B) NNPFC
(III) Net Domestic
(C) GNPFC + Net indirect Tax-Consumption of
Product at Market
fixed capital
Price
(IV) Net National product (D) National income + depreciation + net
at market price indirect taxes
(V) National Income (E) Domestic Income
Choose the correct answer from the options give below
(a) I-E, II-D, III-C, IV-B, V-A (b) I-C, II-E, III-A, IV-B, V-D
(c) I-E, II-D, III-A, IV-C, V-B (d) I-D, II-A, III-B, IV-C, V-E
6. From the following information, compute GNP at MP. GDP at FC = 3,000. Net 1
factor income to abroad = ₹200, Indirect taxes = ₹420, subsidies = ₹ 240.
(a) 3,380 (b) 2,980
(c) 3,020 (d) 2,620
7 Suppose, the Gross Domestic Product (GDP) at market price of a country in a 1
particular year was ₹1,500 crore. Net Factor Income from abroad was ₹ 100
crore. The value of Net Indirect Taxes was ₹180 crore and the National Income
was ₹1050 crore. Calculate the value of depreciation for the economy.
(a) 340 (b) 370
(c) 410 (d) 390
8 If GDP deflator for the period 1995-2000 is 140%, this means that we can only 1
buy with 40 Rupees in 2000 what we can buy with 100 Rupees in 1995.
(A) TRUE (B) FALSE
9 Given below are the steps for calculation of National Income by value added 1
method. Place them in the correct sequence and choose the correct option given
below
(A) Estimate Gross domestic product at market price.
(B) Calculate Net Domestic product at a factor cost.
(C) Estimation of value of output produced by each firm in all sectors of the
economy.
(D) Calculate Net National Product at Factor Cost.
(a) (C), (A), (B), (D) (b) (A), (B), (C), (D)
(c) (B), (C), (D), (A) (d) (D), (A), (C), (B)
10 Identify which of the following represents only the real flow: 1

(a) (b)

(c) (d)

11 Using a suitable numerical example, distinguish between Real Gross Domestic 3

Product and Nominal Gross Domestic Product
12 (i) "Private Final Consumption Expenditure is an important factor determining 3
Gross Domestic Product at Market Price." Justify the given statement.
(ii) “National income exceeds domestic income only when exports are greater
than imports”. Comment.
13 (i) "While estimating Gross Domestic Product (GDP) by expenditure method, 2
entire focus is on expenditures incurred by the residents of the country." Do
you agree with the given statement? Give valid reason in support of your
answer.
2
(ii) "Depreciation is a fall in the value of an asset due to unexpected
obsolescence.’’ Defend or refute the given statement.
14 From the following data show that, Net Value Added at factor cost (NVAFC) is 4
equal to the sum of factor income.
S. No. Particulars Amount
(in ₹ crore)
i. Consumption of Fixed Capital 90
ii. Imports of raw material 120
iii. Change in stock 240
iv. Goods and Services Tax 60
v. Domestic sales 2,160
vi. Distributed profits 180
vii. Retained earnings 120
viii. Purchase of raw material 840
ix. Exports 240
x. Rent and Royalty 90
xi. Compensation of employees 720
xii. Interest 540
15 (a) “Higher GDP does not always mean greater welfare of the people of that 2
country”. Defend or refute the following rationale with valid explanations.
(b) State any three precautions that are taken while estimating National Income 2
by Value added Method.
16 (a) On the basis of the data given below for an imaginary economy, estimate the 3
value of Net Domestic Product at factor cost (NDPFC)
S. No. Particulars Amount (in ₹ crore)
i. Household Consumption Expenditure 2,000
ii. Government Final Consumption Expenditure 1,500
iii. Gross Domestic Fixed Capital Formation 1,000
iv. Net additions to stock 300
v. Exports 700
vi. Net Indirect Taxes 350
vii. Imports 200 3
viii. Consumption of Fixed Capital 250
(b) Giving valid reasons explain, which of the following will be
included/excluded in the estimation of National Income of India?
(i) Purchase of shares of Sethi Ltd. by an investor in the Bombay Stock
Exchange.
(ii) Money received by government from sale of a public sector firm to a
private owner
(iii) Payment of interest by a bank to an individual
17 Calculate the missing values from the following information:- 6
S. No. Items Amount (₹ in lakhs)
1. National Income 60000
2. Goods and services tax 2000
3. Government final consumption expenditure ?
4. Gross domestic fixed capital formation 18000
5. Subsidies 1000
6. Private final consumption expenditure 11500
7. Wages and salaries 10000
8. Consumption of fixed capital 700
9. Mixed-income of self-employed ?
10. Operating surplus 15000
11. Net factor income to abroad (-)800
12. Net imports (-) 2000
13. Opening stock 1000