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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Match the following:

Column I Column II
i. NNP at Production Point a. NNP at Factor Cost
ii. NNP at Market Price b. NDP (MP) + NFIA
iii. Indirect taxes are more than subsidy c. Market Price is greater than factor cost
iv. Domestic Income = national Income d. Closed Economy

 

Options:

i-b, ii-c, iii-d, iv-a

i-a, ii-b, iii-d, iv-c

i-a, ii-d, iii-b, iv-c

i-a, ii-b, iii-c, iv-d

Correct Answer:

i-a, ii-b, iii-c, iv-d

Explanation:

The correct answer is Option 4: i-a, ii-b, iii-c, iv-d

i. NNP at Production Point: It refers to the net national product calculated at the production stage, before deducting indirect taxes but after accounting for depreciation. Thus, the correct match is : a. NNP at Factor Cost

ii. NNP at Market Price : NDP (MP) + NFIA (Option b)

iii. Indirect taxes are more than subsidy: When indirect taxes exceed subsidies, it indicates that the market price of goods and services is greater than the factor cost. So Correct match is option c. Market Price is greater than Factor Cost

iv. Domestic Income = National Income: In a closed economy where there are no international transactions (imports or exports), domestic income equals national income. Thus, the correct match is Option d. Closed Economy

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