Determination of National Income

20 Practice MCQs available for CA Foundation

Paper

Paper 4: Business Economics

Exam Weightage

15%

Key Topics

Aggregates, Measurement, Keynesian Theory

A crucial chapter covering national income aggregates like GDP, GNP, NDP, NNP, and the methods of measuring national income (Income, Expenditure, and Output methods). It also introduces Keynesian Theory including the concepts of Aggregate Demand, Consumption Function, and the Multiplier.

Exam Strategy Tip

Practice numerical questions on GDP/GNP calculations and the Multiplier. These are guaranteed marks in every exam. Also understand the circular flow of income clearly.

All 20 Questions

105

Personal Income minus Direct Taxes equals:

109

If MPC is 0.8, the value of the investment multiplier is:

118

Depreciation is also known as:

101

National Income usually refers to:

108

In a two-sector economy, Aggregate Demand equals:

103

Which method is also known as the "Value Added Method"?

107

The multiplier effect explains how an initial increase in investment leads to a greater increase in:

110

Circular flow of income in a two-sector economy usually assumes:

114

Which of the following is NOT included in GDP?

102

Transfer payments are:

106

Keynesian consumption function expresses relationship between:

113

Real GDP is calculated at:

117

MPC + MPS = ?

104

GDP deflator is used to measure:

111

Leakages in the circular flow of income include:

115

According to Keynes, investment depends on:

119

Net National Disposable Income includes:

112

GDP at Market Price minus Net Indirect Taxes equals:

116

GNP includes:

120

The concept of "Paradox of Thrift" was popularized by:

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