This article contains the most important questions along with the answers for CBSE Class 12 Economics Chapter 2 – National Income Accounting, which is curated by expert Economics teachers from the latest version of CBSE (NCERT) books.
CBSE Class 12 Macro Economics Chapter-2 Important Questions
Question 1
Explain the meaning of non-market activities
- Production
- Non-marketable
- Involuntary
- Economic
Answer: Non-marketable
Question 2
What is real flow?
Answer: Real flow is the flow of services and goods between different sectors of an economy. For instance, flow sector services flow from the household to the enterprise and then vice versa, i.e., from the enterprise to the household again.
Question 3
Differentiate between personal income and private income.
Answer: Below mentioned are the differences between personal income and private income:
| Personal Income | Private Income |
| It is the sum total of earned and transfer incomes received by the individuals from the income sources involves within and outside the nation. Personal income is calculated as: Personal income = Private income – Corporate tax – Corporate savings (undistributed profits) |
It can be contemplated as the factor and transfer of the income received from all the private sources within and outside the country. |
Question 4
Calculate the net value added at the market price of a firm:
| Items | Amount |
| Sale Change in stock Depreciation Net indirect taxes Purchase of machinery Purchase of an intermediate product |
400 -20 30 40 200 250 |
Answer:
Value of Output = Sale + Change in Stock
= 400 + (-) 20
= 380
Gross Value added at MP = Value of output – Purchase of an intermediate product
= 380 – 250 = 130/-
Net value added at MP = Gross value added at MP – Depreciation
= 130 – 30 = 100/-
Thus, the final answer = ₹ 100/-
Question 5
Nominal GNP is the same as,
- GNP at constant prices
- Real GNP
- GNP at current prices
- GNP less Net factor income from abroad
Answer: GNP at current prices
Question 6
What must be added to the domestic factor income to avail national income?
Answer: Net factor income from the abroad must be added to the domestic factor income to avail national income.
Question 7
Define real GNP.
Answer: Gross national product is calculated at constant prices i.e., via base year price is known as real GNP in economics
Question 8
An example of transfer payment is,
- Free meals in the company canteen
- Employers’ contribution to social security
- Retirement pension
- Old-age pension
Answer: Old age pension
Question 9
Calculate the Nominal income and private income from the following data.
| Contents | ₹. (in crores) |
| Net current transfers from the rest of the world | 10 |
| Private final consumption expenditure | 600 |
| National debt interest | 15 |
| Net exports | -20 |
| Current transfers from the government | 5 |
| Net domestic product at factor cost accruing to the government | 25 |
| Government final consumption expenditure | 100 |
| Net indirect tax | 30 |
| Net domestic capital formation | 70 |
| Net factor income from abroad | 10 |
Answer:
- National income = [Private final consumption expenditure + Government final consumption expenditure + Net domestic capital formation + Ner exports + Net factor income from abroad – Net indirect tax]
= 600 + 100 + 70 + (-20) + 10 – 30
= 780 – 50
= 730 crores
- Private income = NNP – Net domestic product at factor cost accruing to government + Transfer payments + National debt interest
= 730 – 25 + (10+5) + 15
= 760 – 25
= 735 crores
Question 10
Providing the reason, explain whether the following are included in the domestic product of India.
- Profits earned by a branch of the foreign bank in India
Answer: Profits earned by a branch of the foreign bank in India will be included in the domestic income of India because the profits are earned within the domestic territory of India
| Important Topics in Economics: |
Question 11
Providing the reason, explain whether the following are included in the domestic product of India.
- Payment of salaries to its staff by an embassy located in New Delhi
Answer: Payment of salaries to its staff by an embassy located in New Delhi will not be involved in the domestic income of India as it is not a part of the domestic territory of India
Question 12
Providing the reason, explain whether the following are included in the domestic product of India.
- Interest received by an Indian resident from its abroad firms
Answer: Interest received by an Indian resident from its abroad firms will not be included in the domestic income of India because it is the factor income from abroad.
Question 13
Microeconomics is different from macroeconomics as,
- Microeconomics deals with economic behaviour
- Microeconomics deals with individual behaviour
- Microeconomics deals with prices only
- Microeconomics deals with the government’s decisions
Answer: Microeconomics deals with individual behaviour
Question 14
Which of the following is an example of macroeconomics?
- Price determination
- Consumer’s equilibrium
- Producer’s equilibrium
- Inflation
Answer: Inflation
Question 15
What is national disposable income?
Answer: National disposable income is that type of an income which is obtainable to the whole economy for the spending purpose or for disposition.
It is computed as, NNP + Net current transfers from abroad (NDI)
Also Check:Â Economics MCQs
| Chapter wise Important Questions for CBSE Class 12 Macro Economics | ||
| Chapter 1 – Introduction to Macro Economics | Chapter 5 – Government Budget and the Economy | |
| Chapter 3 – Money and Banking | Chapter 6 – Open Economy Macroeconomics | |
| Chapter 4 – Determination of Income and Employment | ||