Question 1

Consider: 1. GDP at market prices includes net indirect taxes. 2. GNP = GDP + Net Factor Income from Abroad. 3. India uses base year 2011-12 for GDP calculation. Which correct?

Accepted Answer

All three. All three correct. GDP(mp) includes taxes-subsidies. GNP adds NFIA to GDP. Current base year is 2011-12 (CSO).

Question 2

Consider the following statements regarding GDP and GNP: 1. GDP measures the total value of goods and services produced within the domestic territory of a country. 2. GNP includes the net factor income from abroad. 3. NNP at factor cost is also known as National Income. Which of the statements given above is/are correct?

Accepted Answer

1, 2 and 3. All three statements are correct. GDP measures domestic production within territorial boundaries. GNP = GDP + Net Factor Income from Abroad. NNP at factor cost is the standard measure of National Income as per CSO methodology.

Question 3

Which of the following is the correct formula for calculating Gross National Product (GNP)?

Accepted Answer

GDP + Net Factor Income from Abroad. GNP = GDP + Net Factor Income from Abroad (NFIA). NFIA is the difference between factor income earned by domestic residents abroad and factor income earned by foreigners within the domestic territory.

Question 4

Consider the following statements: 1. The base year for the current GDP series in India is 2011-12. 2. The Central Statistics Office (CSO) is responsible for compiling National Income estimates. 3. India uses the Gross Value Added (GVA) at basic prices method for GDP estimation. Which of the statements given above is/are correct?

Accepted Answer

1, 2 and 3. All statements are correct. The base year was revised to 2011-12 in January 2015. CSO (now NSO) compiles national income data. India shifted to GVA at basic prices methodology from the earlier GDP at factor cost method.

Question 5

If the GDP at market prices is Rs. 100 and the Net Factor Income from Abroad is Rs. (-5) and Depreciation is Rs. 10 and Net Indirect Taxes are Rs. 15, then the National Income is:

Accepted Answer

Rs. 70. National Income = NNP at Factor Cost = GDP at MP + NFIA - Depreciation - Net Indirect Taxes = 100 + (-5) - 10 - 15 = Rs. 70.

Question 6

With reference to the measurement of economic growth consider the following: 1. Real GDP growth is adjusted for inflation. 2. GDP deflator covers all goods and services produced in the economy. 3. Consumer Price Index covers only consumer goods and services. Which of the statements given above is/are correct?

Accepted Answer

1, 2 and 3. All statements are correct. Real GDP removes the effect of price changes (inflation adjustment). GDP deflator is a comprehensive measure covering all domestically produced goods and services. CPI measures price changes only in a basket of consumer goods and services.

Question 7

Which of the following are included in the calculation of GDP by the expenditure method? 1. Private Final Consumption Expenditure 2. Government Final Consumption Expenditure 3. Gross Fixed Capital Formation 4. Net Exports Select the correct answer using the code given below:

Accepted Answer

1, 2, 3 and 4. GDP by expenditure method = C + G + I + (X-M), where C is Private Final Consumption Expenditure, G is Government Final Consumption Expenditure, I is Gross Fixed Capital Formation (plus change in stocks), and (X-M) is Net Exports.

Question 8

Consider the following statements about National Statistical Office (NSO): 1. It was formed by merging the Central Statistics Office and the National Sample Survey Office. 2. It functions under the Ministry of Finance. 3. It releases the Advance Estimates of GDP. Which of the statements given above is/are correct?

Accepted Answer

1 and 3 only. NSO was formed by merging CSO and NSSO in 2019 and it releases GDP estimates including Advance Estimates. However, it functions under the Ministry of Statistics and Programme Implementation, not Ministry of Finance.

Question 9

The term 'Green GDP' refers to:

Accepted Answer

GDP adjusted for environmental costs and depletion of natural resources. Green GDP is a measure that accounts for environmental degradation and resource depletion. It subtracts the costs of environmental damage and natural resource depletion from conventional GDP to give a more accurate picture of true economic progress.

Question 10

Consider the following statements: 1. Personal Disposable Income is Personal Income minus Direct Taxes. 2. Per Capita Income is National Income divided by total population. 3. India's Per Capita Income has been consistently growing since liberalization. Which of the statements given above is/are correct?

Accepted Answer

1, 2 and 3. All statements are correct. Personal Disposable Income = Personal Income - Direct Taxes paid by individuals. Per Capita Income = National Income/Total Population. India's per capita income has shown consistent growth post-1991 reforms.

Economy Previous Year Questions

Q1: Consider: 1. GDP at market prices includes net indirect taxes. 2. GNP = GDP + Net Factor Income from Abroad. 3. India uses base year 2011-12 for GDP calculation. Which correct?

Q3: Which of the following is the correct formula for calculating Gross National Product (GNP)?

Q5: If the GDP at market prices is Rs. 100 and the Net Factor Income from Abroad is Rs. (-5) and Depreciation is Rs. 10 and Net Indirect Taxes are Rs. 15, then the National Income is:

Q7: Which of the following are included in the calculation of GDP by the expenditure method? 1. Private Final Consumption Expenditure 2. Government Final Consumption Expenditure 3. Gross Fixed Capital Formation 4. Net Exports Select the correct answer using the code given below:

Q9: The term 'Green GDP' refers to:

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