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Chapterwise Chp-3 Macroeconomics

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20 views7 pages

Chapterwise Chp-3 Macroeconomics

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10C, 20 Jahnvi Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CLASS-12-Macroeconomics

CHAPTER-3

Multiple choice Question:


1. What does Gross National Product (GNP) measure?
a) Total market value of all final goods and services produced within a country in a
specific period
b) Total market value of all final goods and services produced by a country's
residents, regardless of location, in a specific period
c) Total income earned by a country's residents and businesses in a specific period
d) Total value of all goods and services consumed within a country in a specific period
2. What is the key difference between Gross Domestic Product (GDP) and Net
Domestic Product (NDP)?
a) NDP adjusted depreciation while GDP doesn't
b) GDP includes indirect taxes while NDP doesn't
c) NDP accounts for net income earned from abroad while GDP doesn't
d) GDP accounts for net income earned from abroad while NDP doesn't
3. Real GDP is adjusted for:
a) Changes in population over time
b) Changes in price level over time
c) Changes in government spending over time
d) Changes in investment over time
4. What does the GDP deflator measure?
a) The change in prices of all goods and services produced domestically
b) The ratio of nominal GDP to real GDP
c) The level of inflation in the economy
d) The difference between gross and net domestic product
5. How does GDP relate to the concept of welfare?
a) GDP is a direct measure of welfare as it accounts for all economic transactions in
a country
b) GDP indirectly influences welfare through its impact on employment and
income distribution
c) GDP is not related to welfare as it only measures economic output
d) GDP is inversely related to welfare as higher GDP often leads to lower overall welfare

Assertion and reason-based questions with answer, the Alternatives are:


a) The Assertion (A) is true, but the Reason (R) is false.
b) The Assertion (A) is false, but the Reason (R) is true.
c) Both the Assertion (A) and Reason (R) are true, but the Reason (R) is not the
correct explanation of the assertion.
d) Both the Assertion (A) and Reason (R) are true, and the Reason (R) is the
correct explanation of the assertion.
1. Assertion (A): Gross National Product (GNP) measures the total market value of all
final goods and services produced within a country's borders.
Reason (R): GNP accounts for the income earned by a country's residents and businesses,
regardless of their location.
2. Assertion (A): Real GDP is a more accurate measure of economic output than Nominal
GDP.
Reason (R): Real GDP adjusts for changes in price level over time, providing a better
reflection of changes in actual production.
3. Assertion (A): Net Domestic Product (NDP) is always lower than Gross Domestic Product
(GDP).
Reason (R): NDP accounts for depreciation, while GDP does not.
4. Assertion (A): GDP Deflator measures the changes in the price level of all goods
and services produced domestically.
Reason (R): The GDP Deflator is calculated by dividing Nominal GDP by Real GDP and
multiplying by 100.
5. Assertion (A): GDP growth directly leads to an improvement in welfare.
Reason (R): GDP is a comprehensive measure of a nation's economic performance,
encompassing all aspects of economic activity.
Statement based questions with answer alternative from the following:
a) Statement 1 is true and Statement 2 is false.
b) Statement 1 is false and Statement 2 is true.
c) Both Statements 1 and 2 are true.
d) Both Statements 1 and 2 are false.
1. Statement 1: Gross National Product (GNP) includes the value of goods and
services produced domestically by foreign residents.
Statement 2: Gross Domestic Product (GDP) includes the income earned by a country's
residents and businesses, regardless of their location.
2. Statement 1: Net National Product (NNP) accounts for depreciation and indirect taxes.
Statement 2: Gross Domestic Product (GDP) accounts for net income earned from
abroad.

3. Statement 1: Real GDP adjusts for changes in the price level over time.
Statement 2: Nominal GDP reflects the value of goods and services produced in an economy
at current market prices.
4. Statement 1: GDP Deflator measures the ratio of Nominal GDP to Real GDP. Statement 2:
GDP Deflator is used to calculate the inflation rate in an economy.
5. Statement 1: GDP growth is directly proportional to an improvement in overall welfare.

Statement 2: GDP considers factors such as income distribution, environmental


sustainability, and quality of life.
CASE BASED QUESTIONS
Case 1: The country of X has a Gross Domestic Product (GDP) of Rs 10 trillion and a Net
Domestic Product (NDP) of Rs 9 trillion. What could be the possible reasons for NDP being
less than GDP?
a) Case 1: Depreciation of capital assets and indirect taxes
b) Case 2: Subsidies and indirect taxes
c) Case 3: Depreciation of capital assets and net income earned from abroad
d) Case 4: Subsidies and net income earned from abroad

Case 2: In a hypothetical economy, the Nominal GDP is Rs 15 trillion and the Real GDP is
Rs 12 trillion. If the GDP deflator is 125, what can be inferred about the price level in the
economy?
a) Case 1: Prices have increased by 25% since the base year.
b) Case 2: Prices have decreased by 25% since the base year.
c) Case 3: Prices have increased by 125% since the base year.
d) Case 4: Prices have decreased by 125% since the base year. Case
3: Country Y has a Gross National Product (GNP) of Rs 8 trillion and a
Net National Product (NNP) of Rs 7.5 trillion. What could be a possible
reason for NNP being less than GNP?

a) Case 1: Depreciation of capital assets


b) Case 2: Indirect taxes
c) Case 3: Net income earned from abroad
d) Case 4: Subsidies

Case 4: In a country with a Nominal GDP of Rs 20 trillion and a Real GDP of Rs 18 trillion,
what can be inferred about the inflation rate?
a) Case 1: Inflation rate is 10%
b) Case 2: Inflation rate is 20%
c) Case 3: Inflation rate is 5%
d) Case 4: Inflation rate is 2%

Case 5: A country has a Gross Domestic Product (GDP) of Rs 12 trillion and a Net Domestic
Product (NDP) of Rs 10 trillion. Which of the following could explain the difference
between GDP and NDP?
a) Case 1: Indirect taxes
b) Case 2: Subsidies
c) Case 3: Net income earned from abroad
d) Case 4: Depreciation of capital assets
Source-based integrated questions:
Source 1: Excerpt from an Economic Report
"The Gross Domestic Product (GDP) of Country A increased by 5% in the last quarter,
reaching Rs 1.2 trillion. However, when accounting for inflation, the Real GDP growth rate
was only 3%. This growth was primarily driven by an increase in consumer spending and
exports."
Source 2: Statement from an Economist
"Economist X argues that focusing solely on Gross Domestic Product (GDP) growth rate can
be misleading as it does not consider factors such as income distribution and environmental
sustainability. Real GDP provides a more accurate measure of economic growth as it adjusts
for changes in price level over time."
Integrated Question 1:
Based on the information provided in Source 1 and Source 2, which of the following
statements is most accurate?
a) GDP growth rate is a reliable indicator of overall economic well-being.
b) Real GDP growth rate accounts for changes in price level over time, providing a
more accurate measure of economic growth.
c) Consumer spending and exports have no impact on GDP growth rate.
d) Economist X suggests that GDP growth rate should be the sole focus of economic analysis.
Integrated Question 2:
How might the information provided in Source 1 support the argument made by Economist X
in Source 2?
a) By demonstrating that GDP growth rate reflects changes in income distribution.
b) By highlighting the limitations of GDP growth rate in assessing economic progress.
c) By showing that GDP growth rate is directly correlated with environmental sustainability.
d) By indicating that GDP growth rate is the only factor influencing economic well-being.
Integrated Question 3:
If the GDP Deflator for Country A is 110, what can be inferred about the relationship between
Nominal GDP and Real GDP?
a) Nominal GDP is greater than Real GDP.
b) Real GDP is greater than Nominal GDP.
c) Nominal GDP and Real GDP are equal.
d) Nominal GDP and Real GDP are not related.
Integrated Question 4:
How might the consideration of factors such as income distribution and environmental
sustainability affect the interpretation of GDP growth rate?
a) They have no impact on the interpretation of GDP growth rate.
b) They provide additional context for assessing the overall well-being of an economy.
c) They decrease the reliability of GDP growth rate as an economic indicator.
d) They make GDP growth rate the sole measure of economic progress.
Integrated Question 5:
If Country A's GDP grew by 7% last year, but Real GDP only grew by 4%, what could be a
possible explanation for this difference?
a) Changes in the price level over time
b) Changes in government spending
c) Changes in population growth
d) Changes in income distribution

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