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.

Key Terms

National Income

The total monetary value of all goods and services produced by the residents of a country in a given period (usually one year), including income earned abroad but excluding income earned by foreigners within the country. It equals GNP minus depreciation.

Comparison Tables

Trading Account vs P&L Account: Final Accounts ExplainedFIFO vs LIFO Inventory Valuation: CA Foundation AccountsGDP vs GNP: National Income Accounting for CA Foundation

All 20 Questions

101
National Income usually refers to:
MCQ
102
Transfer payments are:
MCQ
103
Which method is also known as the "Value Added Method"?
MCQ
104
GDP deflator is used to measure:
MCQ
105
Personal Income minus Direct Taxes equals:
MCQ
106
Keynesian consumption function expresses relationship between:
MCQ
107
The multiplier effect explains how an initial increase in investment leads to a greater increase in:
MCQ
108
In a two-sector economy, Aggregate Demand equals:
MCQ
109
If MPC is 0.8, the value of the investment multiplier is:
MCQ
110
Circular flow of income in a two-sector economy usually assumes:
MCQ
111
Leakages in the circular flow of income include:
MCQ
112
GDP at Market Price minus Net Indirect Taxes equals:
MCQ
113
Real GDP is calculated at:
MCQ
114
Which of the following is NOT included in GDP?
MCQ
115
According to Keynes, investment depends on:
MCQ
116
GNP includes:
MCQ
117
MPC + MPS = ?
MCQ
118
Depreciation is also known as:
MCQ
119
Net National Disposable Income includes:
MCQ
120
The concept of "Paradox of Thrift" was popularized by:
MCQ

Ready to Master Determination of National Income?

Practice all 20 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free