CA Foundation P4 · Chapter 5 · Question 4 of 15
Which of the following is excluded from national income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Old-age pension paid by the government
Explanation
Old-age pensions are transfer payments - no productive service is rendered in return - so they are excluded. Government wages, imputed rent of owner-occupied dwellings and mixed income of the self-employed are payments for productive services and are included.
More Determination of National Income MCQs
- Q6Nominal GDP of a year is Rs. 6,600 crore and the GDP deflator for that year is 120 (base year = 100). Real GDP is:
- Q7If the marginal propensity to consume is 0.8, the value of the investment multiplier in a simple two-sector Keynesian model is:
- Q8In a two-sector economy, C = 100 + 0.75Y and autonomous investment I = 200 (Rs. crore). Equilibrium national income is:
- Q9The 'paradox of thrift' suggests that:
- Q10In a three-sector economy (Rs. crore): C = 50 + 0.8Yd, where Yd = Y - T; lump-sum tax T = 100; investment I = 100; government expenditure…