Determination of National IncomePYQ - Nov 2022 (Inter)Question 110 of 20
All Questions

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

Options

ANo Government and No Foreign Sector
BGovernment exists but no Foreign Sector
CForeign Sector exists but no Government
DBoth exist
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Correct Answer

✅ Option a — No Government and No Foreign Sector

All Options:

  • ANo Government and No Foreign Sector
  • BGovernment exists but no Foreign Sector
  • CForeign Sector exists but no Government
  • DBoth exist

About This Chapter: National Income

Paper

Paper 4: Business Economics

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.

View Official ICAI Syllabus

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.

More Questions from Determination of National Income

National Income usually refers to:

Transfer payments are:

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

GDP deflator is used to measure:

Personal Income minus Direct Taxes equals:

Keynesian consumption function expresses relationship between:

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