NATIONAL INCOME TEST

TIME: 1.5 hours MM: 36

Q.1 If the loans are taken for purpose then the interest on such loans will be included in the
national income. (1)
(a) Consumption
(b) Production
(c) Both
(d) None

Q.2 If Net indirect taxes are (-) 500crores and the value of indirect taxes is 1000crores. The value of
subsidies is (1)

(a) (-) 500

(b) 500
(c) 1000
(d) 1500
Read the following news report and answer Questions 3-6 on the basis of the same:
Finance minister Nirmala Sitharaman on Monday announced an additional Rs 25,000 crore for capital
expenditure budget. The money will be spent on roads, defence infrastructure, water supply and domestically
produced capital equipment. She further announced that the government will also give Rs 12,000cr to various
states in the form of 50 years interest free loans. Rs 2,500 cr will go to the North east states, Uttarakhand and
Himachal Pradesh, while Rs 9,500cr will go to other states. The Money is to be used for capital projects.

Q.3Finance Minister is trying to use (Fiscal / Monetary) measures to control the situation arisen due to the
COVID 19 pandemic. (1)

Q.4 Other measure that government can take is

a. Increase in the margin requirement
b. Increase in taxes
c. Decrease in taxes
d. Increase in CRR (1)

Q.5 These decisions are taken by the Government to control the situation of (Deficient demand / Excess
demand) (1)
Q.6 If in an economy saving is greater than investment, producers will increase the employment to
increase the output. (True/false) (1)

Q.7 State with valid reasons whether the following statements are true or false. (2)
(a) Gross domestic capital formation is always greater than Gross fixed capital formation.
(b) School fees paid by the household is a part of private final consumption expenditure.
Q.8 Find consumption and saving if

Autonomous Consumption = Rs.100cr

MPS = 0.5
National Income = 2000cr (4)

Q.9 Explain the derivation of saving curve from consumption curve. (4)
Q.10 Due to COVID-19 related lockdowns and the fall in the consumption demand, the Indian
economy heads towards recession.
State and discuss one monetary and one fiscal measure to correct the above situation. (4)
1
 Q.11 (a ) From the following data relating to a firm, calculate intermediate consumption

(3+3)

Particulars (in Lakhs)

(i) Subsidy 40
(ii) Sales 800
(iii) Depreciation 30
(iv) Exports 100
(v) Closing stock 20
(vi) Opening stock 50
(vii) Net value added at factor cost 280
(viii) Purchase of machinery for own use 200

(ix) Import of raw material 60

(b) Calculate Depreciation.

S.no Items (In crores)

1 Private final consumption expenditure 500
2 Net domestic fixed capital formation 100
3 Net factor income to abroad (-) 30
4 Change in stock 20
5 Net exports 40
6 Net indirect taxes 50
7 Mixed income 300
8 Government final consumption expenditure 200
9 GNP at FC 900
10 Net current transfers to abroad (-) 10

Q.12 How should the following be treated while estimating National Income? (6)
(a) Scholarship paid to students.
(b) Addition to stocks during the year.
(c) Purchase of taxi by a driver.
(d) Rent received by Mohan from a foreign embassy in New Delhi.
(e) Gardening
(f) GST