Q120. Consider:
(1) GDP deflator uses an unchanging consumer-goods basket;
(2) GDP deflator can measure real output but not inflation.
Which statements are true?
[UPSC CDS I (2024)]
A. 1 only
B. 2 only
C. Both
D. Neither
Answer: D. Neither
Explanation: The GDP deflator reflects prices of domestically produced final output, with composition changing as output changes. It can be used both to deflate nominal GDP into real GDP and to assess economy-wide price movements.
Q119. Which description most closely defines GDP in national-income accounting?
[SSC MTS (15 October 2024, Shift 2)]
A. Total exports
B. Aggregate saving
C. Value of final goods and services produced domestically during a period
D. Total revenue of government
Answer: C. Value of final goods and services produced domestically during a period
Explanation: GDP captures the market value of final goods and services newly produced within domestic borders during an accounting period. Imports, purely financial transfers and second-hand transactions are not automatically domestic production, and intermediate inputs are excluded to prevent duplication.
Q118. Which purchases count as final goods:
(1) wheat to cook at home,
(2) wheat for hotel meals,
(3) tea bags for home consumption,
(4) tea bags for a commercial canteen?
[SSC MTS (23 October 2024, Shift 2)]
A. Only 1 and 2
B. Only 2 and 3
C. Only 2 and 4
D. Only 1 and 3
Answer: D. Only 1 and 3
Explanation: A good is final or intermediate according to its intended use. Household wheat and tea are final consumption purchases, while a hotel or canteen uses those inputs to produce meals or drinks subsequently sold to customers.
Q117. Why does GDP valuation count final goods rather than adding the value of intermediate goods as well?
[SSC MTS (7 October 2024, Shift 2)]
A. To measure physical mobility
B. To prevent double counting
C. Because value added never matters
D. To include only imported items
Answer: B. To prevent double counting
Explanation: If the value of flour and the bread made from it were both counted fully, the flour’s contribution would appear twice. GDP therefore counts final output or adds the value contributed at successive production stages.
Q116. Which receipt is NOT part of current national income?
[SSC MTS (29 October 2024, Shift 3)]
A. Donation received without providing productive services
B. Earnings from enterprise
C. Return on capital
D. Rent earned on land
Answer: A. Donation received without providing productive services
Explanation: A donation represents a transfer of purchasing power rather than payment for new productive services. Rent, interest and entrepreneurial income are payments to production factors, whereas gifts and many social benefits do not create additional current output.
Q115. According to the examination, which use is made of Net National Product in national-income accounting?
[SSC CHSL (8 July 2024, Shift 3)]
A. Calculating per-capita income
B. Calculating the balance of payments
C. Computing import value alone
D. Computing export value alone
Answer: A. Calculating per-capita income
Explanation: Net National Product subtracts depreciation from gross national product. National income and related net income measures can be divided by population to obtain an average per person, unlike exports or imports which measure specific external transactions.
Q114. Which formula correctly converts Gross National Product into Net National Product?
[SSC CHSL (2 July 2024, Shift 3)]
A. NNP = GNP − depreciation
B. NNP = GDP − income
C. NNP = GDP − depreciation
D. NNP = GNP + depreciation
Answer: A. NNP = GNP − depreciation
Explanation: Depreciation represents consumption of fixed capital during production. Subtracting that wear and obsolescence from gross national product provides net national product, measuring what remains after allowing for capital used up during the year.
Q113. Which national-accounts concept equals aggregate residents’ factor income plus net indirect taxes?
[SSC CHSL (2 July 2024, Shift 4)]
A. Net Domestic Product at market prices
B. Gross National Product
C. Net National Product at market prices
D. Gross Domestic Product
Answer: C. Net National Product at market prices
Explanation: Net National Product at market prices includes domestic factor income adjusted for income received from abroad and net indirect taxes. Unlike the factor-cost measure, market-price valuation adds taxes on production and products net of subsidies.
Q112. Which identity for national income is correct?
[SSC CGL (24 September 2024, Shift 3)]
A. GNP at factor cost
B. NDP at market prices
C. GDP at market prices
D. NNP at factor cost
Answer: D. NNP at factor cost
Explanation: In the traditional Indian competitive-examination convention, national income is Net National Product at factor cost. Net removes depreciation, national incorporates net factor income from abroad, and factor-cost valuation excludes net indirect taxes.
Q111. With respect to which aggregate were Fourth Five-Year Plan growth targets formulated?
[SSC GD Constable (6 March 2024, Shift 2)]
A. Net Domestic Product
B. Gross Domestic Product
C. Gross National Product
D. National Income
Answer: A. Net Domestic Product
Explanation: The paper’s answer uses Net Domestic Product as the reference in the Fourth Plan’s growth-target framing. Net domestic output subtracts depreciation from gross domestic product, distinguishing output remaining after consumption of fixed capital.
