MCQ for CA Intermediate FMECO - SECTION B - ECONOMICS FOR FINANCE - Chapter 1 - DETERMINATION OF NATIONAL INCOME

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 8 - FINANCIAL MANAGEMENT & ECONOMICS FOR FINANCE - SECTION B - ECONOMICS FOR FINANCE - Chapter 1: DETERMINATION OF NATIONAL INCOME - For Practice relevant for May/November 23 Examinations

 

 UNIT 1: NATIONAL INCOME ACCOUNTING

Q1. The concept of ‘resident unit’ involved in the definition of GDP denotes

  1. A business enterprise which belongs to a citizen of India with production units solely situated in India  
  2. The unit having predominant economic interest in the economic territory of the country for one year or more irrespective of the nationality or legal status
  3. A citizen household which had been living in India during the accounting year and one whose economic interests are solely in India 
  4. Households and business enterprises composed of citizens of India alone living in India during the accounting year

Answer: 4

Q2. Gross Domestic Product (GDP) of any nation

  1. excludes capital consumption and intermediate consumption
  2. is inclusive of capital consumption or depreciation
  3. is inclusive of indirect taxes but excludes subsidies
  4. None of the above

Answer: 4

Q3. Non-economic activities are

  1. those activities whose value is excluded from national income calculation as it will involve double counting
  2. those which produce goods and services, but since these are not exchanged in a market transaction they do not command any market value
  3. those which do not involve production of goods and services as they are meant to provide hobbies and leisure time activities 
  4. those which result in production for self consumption and therefore not included in national income calculation  

Answer: 4

Q4. Which of the following does not enter into the calculation of national income?

  1. Exchange of previously produced goods
  2. Exchange of second hand goods
  3. Exchange of stocks and bonds
  4. All the above

Answer: 4

Q5. Which of the following enters into the calculation of national income?

  1. The value of the services that accompany the sale
  2. Additions to inventory stocks of final goods and materials
  3. Stocks and bonds sold during eth current year
  4. (a) and (b) above 

Answer: 4

 

UNIT 2 - THE KEYNESIAN THEORY OF DETERMINATION OF NATIONAL INCOME

 

Q1. In the Keynesian model, equilibrium aggregate output is determined by

  1. aggregate demand
  2. consumption function
  3. the national demand for labor
  4. the price level

Answer: 1

Q2. Keynes believed that an economy may attain equilibrium level of output 

  1. only at the full-employment level of output
  2. below the full-employment level of output
  3. only if prices were inflexible
  4. (a) and c) above 

Answer: 2

Q3. The marginal propensity to consume (MPC) can be defined as

  1. a change in spending due to a change in income
  2. a change in income that is saved after consumption
  3. part of income that is spent on consumption.
  4. part of income that is not saved.

Answer: 1

Q4. If the consumption function is expressed as C = a + bY then a represents 

  1. autonomous consumer expenditure.
  2. the marginal propensity to consume.
  3. the consumption income relationship
  4. Non- linear consumption function 

Answer: 1

Q5. Under equation C= a+by, b=0.8, what is the value of 2 sector expenditure multiplier? 

  1. 4
  2. 2
  3. 5
  4. 1

Answer: 3

 

CA Intermediate FMECO - SECTION B - MCQ for Chapter 2 -   

To get back to the Chapterwise MCQ List Page       

Hope you can find this article helpful. If you did like the content then Share it with your friends who are preparing for CA Inter Exams or who will be giving their CA Inter Exams in the near future.