UPSC Prelims Marathon 18 July - SOME BASIC CONCEPTS OF MACROECONOMICS

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Dear Friends,

We are posting prelims marathon MCQs for today. In this initiative, you can attempt 10 subjectwise MCQs daily. Daily Quiz UPSC Prelims Marathon 18 July SOME BASIC CONCEPTS OF MACROECONOMICS

For schedule, refer to the archive link given below. Best UPSC institute In Delhi,

For the Prelims Marathon archive – click here,

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Wrong Answer : -0.66

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Question No. 1

Consider the following statements regarding the types of Gross Domestic Product (GDP):
1.Nominal GDP is always lower than Real GDP since it does not account for inflation.
2.Real GDP enables comparison across years by adjusting for inflation using a price deflator.
3.GDP at Purchasing Power Parity (PPP) helps in comparing living standards across countries.
Which of the above statements is/are correct?

A2 and 3 only

B1 and 2 only

C1 and 3 only

D1, 2 and 3

Question No. 2

With reference to the methods of calculating Gross Domestic Product (GDP), consider the following statements:
1.The income method includes the total earnings of factors of production like labour and capital.
2.The expenditure method includes consumption, investment, government spending, and net exports.
3.The production method calculates GDP by adjusting nominal GDP for taxes and subsidies to derive real GDP.
Which of the statements given above is/are correct?

A1 and 2 only

B2 and 3 only

C1 and 3 only

D1, 2 and 3

Question No. 3

Consider the following statements regarding national income aggregates:
1.GDP at Factor Cost is derived by subtracting depreciation and indirect taxes from GDP at Market Price.
2.NNP at Market Price is calculated by adjusting NNP at Factor Cost for indirect taxes and subsidies.
3.GNP at Factor Cost includes net income from abroad added to GDP at Factor Cost.
Which of the statements given above is/are correct?

A2 and 3 only

B1 and 2 only

C1 and 3 only

D1, 2 and 3

Question No. 4

With reference to the GDP Deflator, consider the following statements:
1.The GDP deflator includes both final goods and imports while measuring price changes in the economy.
2.A rise in the GDP deflator indicates an increase in the overall price level in the economy.
3.Real GDP is always higher than Nominal GDP in times of high inflation.
Which of the statements given above is/are correct?

A2 only

B1 and 3 only

C2 and 3 only

D1, 2 and 3

Question No. 5

Consider the following statements regarding the Expenditure Method of calculating GDP:
1.Expenditure on intermediate goods is included in GDP since they form part of the production process.
2.In the expenditure method, GDP is calculated as the sum of consumption expenditure, investment, government spending, and net exports.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 6

With reference to Green GDP, consider the following statements:
1.Green GDP accounts for environmental degradation and depletion of natural resources while measuring economic growth.
2.Green GDP incorporates investments in both carbon-intensive and zero-carbon technologies while evaluating capital formation.
3.Green GDP excludes government revenue and subsidies related to environmental sectors to avoid bias in measurement.
Which of the statements given above is/are correct?

A1 only

B1 and 2 only

C2 and 3 only

D1, 2 and 3

Question No. 7

Consider the following statements regarding the treatment of taxes in National Income accounting:
1.Direct taxes do not require any adjustment whether national income is measured at factor cost or market cost.
2.Indirect taxes are deducted from NNP at market cost to arrive at national income at factor cost.
Which of the above statements is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 8

Consider the following statements regarding basic concepts of macroeconomics:
1.Capital goods are final goods that do not undergo transformation during the production process and contribute to future production cycles.
2.Intermediate goods are included in the calculation of national income to ensure a complete measure of economic activity.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 9

Consider the following statements regarding the Product or Value Added Method of measuring National Income:
1.In value added method, the value of intermediate goods is subtracted from the value of output to avoid the problem of double counting.
2.Unplanned accumulation of inventories is excluded from the calculation of Gross Value Added (GVA) as it is not a deliberate production activity.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 10

Consider the following statements regarding the Income Method of measuring GDP:
1.The income method calculates GDP by summing up all factor incomes such as wages, profits, interest, and rents earned by households from firms.
2.The income method includes only those factor incomes which are received from production activities within the domestic territory of the country.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

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Total Correct :

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For schedule, refer to the archive link given below. Best UPSC institute In Delhi,

For the Prelims Marathon archive – click here,

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