National Income Accounting Class 12 MCQ Quiz – Test Your Understanding!

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Are you ready to test your knowledge of National Income Accounting from the Class 12 Economics syllabus? This chapter is crucial for understanding how a country measures its economic performance through GDP, GNP, NNP, and other national income aggregates.

About the Quiz

Chapter Name: National Income Accounting
Subject: Economics
Book: NCERT Class 12 Economics
Question Type: Multiple Choice Questions (MCQs)
Leaderboard: Yes (Check Your Rank!)

Why Take This Quiz?

✔ Helps in CBSE board exam revision
✔ Strengthens understanding of GDP, NDP, GNP, NNP, and per capita income
✔ Enhances problem-solving and calculation skills
✔ Track your progress with the leaderboard

Click Below to Start the Quiz!

Chapter 1-National Income Accounting

1 / 15

Read the following statements carefully:

Statement 1 – Net investment is a stock concept.

Statement 2 – Capital is a flow concept.

In the light of the given statements, choose the correct alternative from the following:

Both statements 1 and 2 are true

Statement 1 is false and statement 2 is true

Statement 1 is true and statement 2 is false

Both statements 1 and 2 are false

2 / 15

Inventory is a _____ concept whereas the change in inventory is a _____ concept.

stock, flow

stock, stock

flow, flow

flow, stock

3 / 15

In the value-added method, the value added by a firm is calculated as:

Value of output + Value of intermediate goods

Sales – Depreciation

Gross Investment – Net Investment

Value of output – Value of intermediate goods

4 / 15

The formula for converting GDP at market price (GDPmp) to GDP at factor cost (GDPfc) is:

GDPmp + Depreciation

GDPmp + Indirect Taxes – Subsidies

GDPmp – Net Factor Income from Abroad

GDPmp – Indirect Taxes + Subsidies

5 / 15

Which of the following should be excluded while calculating national income to avoid double counting?

Also See: Money and Banking: Class 12 Notes Everything You Need to Know

Value of intermediate goods

Value of final goods

Net exports

Value added by firms

6 / 15

Which of the following is a flow variable?

Population at a given point

Stock of capital

National income

Money supply

7 / 15

Read the following figure carefully and choose the correct pair from the alternatives given below:

national income class 12 important questions answers

Value added, production

Output, disposition

Output, production

Wealth, development

8 / 15

In the circular flow of income in a two-sector economy, what flows from households to firms?

Factor services

Factor payments

Profits

Consumption expenditure

9 / 15

Which of the following goods is classified as a final good?

Bread purchased by a household for consumption

Flour purchased by a bakery for making bread

Machinery parts used in assembling a tractor

Wheat sold by a farmer to a mill

10 / 15

Match the Concept with its Example or Characteristic:

Column A	Column B
A. Flow Variable	1. Stock of capital at a point in time
B. Stock Variable	2. Bread consumed by a household
C. Final Good	3. National income over a year
D. Operating Surplus	4. Rent + Interest + Profits

A – 3, B – 2, C – 1, D – 4

A – 3, B – 1, C – 4, D – 2

A – 1, B – 3, C – 2, D – 4

A – 3, B – 1, C – 2, D – 4

11 / 15

Assertion (A): Net Investment equals Gross Investment minus Depreciation.
Reason (R): Depreciation represents the increase in the stock of capital goods over time.

Both A and R are true, and R is the correct explanation of A.

A is false, but R is true.

Both A and R are true, but R is not the correct explanation of A.

A is true, but R is false.

12 / 15

Net Investment is calculated as:

Gross Investment + Depreciation

Depreciation – Gross Investment

Gross Investment – Depreciation

Gross Investment + Net Factor Income from Abroad

13 / 15

The GDP deflator is calculated as:

(Real GDP / Nominal GDP) × 100

Real GDP + Nominal GDP

(Nominal GDP / Real GDP) × 100

Nominal GDP – Real GDP

14 / 15

Also See: Class 12 English: Application for JOB with Biodata

In the expenditure method, GDP at market price (GDPmp) is calculated as:

PFCE + GFCE + GDCF + Net Exports

PFCE + GFCE + NIT – Subsidies

PFCE + GFCE + Depreciation + NFIA

PFCE + GFCE + Net Investment – Exports

15 / 15

Which of the following is an example of a negative externality affecting GDP and welfare?

Construction of a new highway

Exports increasing national income

Pollution from a factory reducing fishermen’s income

Increased education spending

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26	Triman	80 %	3 minutes 30 seconds	12
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58	Ahzyzjsj	20 %	2 minutes 2 seconds	3
59	virat	13 %	8 minutes 48 seconds	2

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Key Topics Covered in the Quiz

✔ Concepts of GDP, GNP, NNP, NDP
✔ Factor cost vs. market price
✔ Methods of national income calculation (Income, Product, Expenditure)
✔ Real vs. Nominal GDP
✔ Limitations of GDP as a growth measure

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