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Macro Economics-Online Practice Exam 1

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# Question

1. National income is less than NNP at market price by the amount of —

Transfer payments

Direct taxes

Net indirect taxes

Depreciation

# Question

2.  If the saving function is given by S = -25 + ¼ Y, then what will be the value of marginal propensity to consume ?

25

4

¼

¾

# Question

3. Which of the following is not included in the estimation of NNP by income method ?

Interest

Dividends

Undistributed profit

Depreciation

# Question

4. Which of the following is not correct ?

In measuring GNP, all kinds of goods and services produced in a country during a year are measured in terms of money

In estimating GNP, only the final products are taken into account

The sale and purchase of shares of existing companies are included in GNP

The income earned through illegal activities is not included in the GNP

# Question

5.  Which of the following is a flow concept ?

Wealth

Total saving

Money

Income

# Question

6. If the consumption function is given by C = 20 + ¾ Y, then the value of multiplier will be—

¼

½

4

20

# Question

7. Which of the following is not included in disposable income ?

International transfer payments

Unemployment allowances

Direct taxes

Corporate dividends

# Question

8. NNP for a given year can be defined as—

The profits of manufacturing units after deducting taxes

The real value of final and intermediate goods

The market value of all the final goods and services

The total profits of all the entrepreneurs

# Question

9. If we know the GNP, then we calculate GDP by —

Adding net indirect taxes

Subtracting net indirect taxes

Subtracting net factor income from abroad

# Question

10. Y=C + I + G + (X – M) is—

An equation

An identity

A function

A formula

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