National Income in India – 30 MCQs (SSC Exam-Oriented)

Target Exams: SSC CGL | CHSL | CPO | GD | MTS | Steno | Railways | State Exams

How to use: Attempt each MCQ first, then click “Show Answer & Explanation”.

MCQs

1) Which of the following best describes 'National Income'?

  1. Money supply in the economy
  2. Total value of goods and services produced in a country during one year
  3. Total exports minus imports
  4. Only agricultural production
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Answer: B) Total value of goods and services produced in a country during one year

National income measures the monetary value of all final goods & services produced in a year.

2) Which organisation is responsible for calculating national income in India?

  1. Reserve Bank of India
  2. Ministry of Finance
  3. National Statistical Office (NSO)
  4. Planning Commission
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Answer: C) National Statistical Office (NSO)

NSO (earlier CSO) under Ministry of Statistics calculates national income estimates.

3) Which method is NOT used to calculate national income?

  1. Product method
  2. Income method
  3. Banking method
  4. Expenditure method
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Answer: C) Banking method

National income is calculated by product, income, and expenditure methods — not banking method.

4) Net National Product (NNP) at factor cost is also called:

  1. Gross Domestic Product
  2. Net Domestic Product
  3. National Income
  4. Per Capita Income
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Answer: C) National Income

In India, NI is defined as NNP at factor cost.

5) GDP at market prices minus depreciation is:

  1. NNP at market prices
  2. Net Domestic Product at market prices
  3. GNP at market prices
  4. National Income
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Answer: B) Net Domestic Product at market prices

GDP – Depreciation = NDP.

6) In India, which base year is currently used for GDP calculation?

  1. 2004–05
  2. 2010–11
  3. 2011–12
  4. 2017–18
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Answer: C) 2011–12

Base year for GDP estimates is 2011–12 as per latest updates.

7) Which of the following is excluded while calculating GDP?

  1. Value of final goods
  2. Value of intermediate goods
  3. Government expenditure
  4. Net exports
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Answer: B) Value of intermediate goods

Intermediate goods are excluded to avoid double counting.

8) Which of the following best describes 'Per Capita Income'?

  1. Total income of the country
  2. National income divided by total population
  3. Average salary of government employees
  4. Total exports per person
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Answer: B) National income divided by total population

It shows the average income per person in a country.

9) Which of the following is NOT included in GNP?

  1. Income earned by Indians abroad
  2. Goods produced in India by foreign companies
  3. Services provided abroad by Indian residents
  4. Income earned by foreigners in India
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Answer: D) Income earned by foreigners in India

GNP counts income of residents, whether earned domestically or abroad.

10) Which term refers to GDP adjusted for inflation?

  1. Nominal GDP
  2. Real GDP
  3. GNP
  4. NNP
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Answer: B) Real GDP

Real GDP removes the effect of price changes to measure actual growth.

11) The difference between GDP at market prices and GDP at factor cost is due to:

  1. Inflation
  2. Net indirect taxes
  3. Depreciation
  4. Net exports
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Answer: B) Net indirect taxes

GDP (MP) – Net Indirect Taxes = GDP (FC).

12) Which economist is known for the first attempt to estimate India’s national income?

  1. Dadabhai Naoroji
  2. William Digby
  3. V.K.R.V. Rao
  4. R.C. Desai
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Answer: B) William Digby

He made early estimates in the colonial period; Naoroji also attempted a 'Drain theory'.

13) Who is considered the father of national income accounting in India?

  1. Amartya Sen
  2. Dadabhai Naoroji
  3. V.K.R.V. Rao
  4. C.N. Vakil
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Answer: C) V.K.R.V. Rao

He provided the first scientific estimates of India’s national income.

14) Which sector currently has the highest share in India’s Gross Value Added (GVA)?

  1. Agriculture
  2. Industry
  3. Services
  4. Mining
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Answer: C) Services

Services sector contributes the largest share in GVA.

15) In India, GNP is always:

  1. Greater than GDP
  2. Smaller than GDP
  3. Either greater or smaller depending on net factor income from abroad
  4. Equal to GDP
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Answer: C) Either greater or smaller depending on NFIA

GNP = GDP + NFIA (Net Factor Income from Abroad).

16) Which of these is a flow concept?

  1. National Wealth
  2. National Income
  3. Capital Stock
  4. Wealth of households
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Answer: B) National Income

It is measured over a period of time, unlike wealth (stock concept).

17) Which is not included in the calculation of GVA?

  1. Agriculture output
  2. Industry output
  3. Transfer payments
  4. Service output
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Answer: C) Transfer payments

They are unearned income (like pensions, subsidies) and not part of production.

18) The monetary value of all goods and services produced by normal residents of a country in a year is:

  1. GDP
  2. GNP
  3. NNP
  4. NDP
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Answer: B) GNP

It includes production by residents whether within the country or abroad.

19) Which of the following is subtracted from GDP to obtain NDP?

  1. Indirect taxes
  2. Subsidies
  3. Depreciation
  4. Exports
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Answer: C) Depreciation

Depreciation is the wear & tear of capital goods.

20) Which of the following is not included in GDP?

  1. Government expenditure
  2. Private consumption
  3. Net exports
  4. Black market transactions
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Answer: D) Black market transactions

Informal/illegal transactions are not counted in official GDP.

21) GDP at constant prices is also called:

  1. Real GDP
  2. Nominal GDP
  3. Per capita GDP
  4. Factor cost GDP
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Answer: A) Real GDP

Constant prices remove inflation effect.

22) Which is considered the most accurate method for calculating national income in developed countries?

  1. Income method
  2. Product method
  3. Expenditure method
  4. Survey method
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Answer: B) Product method

Product method uses actual value of goods/services produced.

23) Net factor income from abroad is negative for India because:

  1. We export more goods
  2. We have high tourism income
  3. Foreign companies remit profits abroad
  4. Remittances from Indians abroad are low
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Answer: C) Foreign companies remit profits abroad

Outflow of investment income exceeds inflow.

24) Which of these is a stock concept?

  1. National Income
  2. GDP
  3. Capital
  4. GNP
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Answer: C) Capital

Capital is measured at a particular point in time.

25) 'Disposable income' means:

  1. Total income before taxes
  2. Personal income minus direct taxes
  3. National income minus depreciation
  4. Government revenue
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Answer: B) Personal income minus direct taxes

It’s the amount available for spending and saving by households.

26) Which of the following is NOT included in India's GDP calculation?

  1. Value of goods produced in India by MNCs
  2. Value of goods produced by Indian companies abroad
  3. Government expenditure
  4. Private investment
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Answer: B) Value of goods produced by Indian companies abroad

That is included in GNP, not GDP.

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