The 'Gross National Product' at factor cost equals GDP at factor cost plus: MCQ with Answer and Explanation

The 'Gross National Product' at factor cost equals GDP at factor cost plus:
A. net factor income from abroad
B. indirect taxes
C. depreciation
D. subsidies
Answer: Option A
Solution (By JKSSB Mock Tests)
GNP at factor cost = GDP at factor cost + net factor income from abroad.

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Practice More Economy Set 1 Questions

Question #1
The term 'Quantitative Easing' refers to:
A. Reduction in government expenditure
B. Increase in policy interest rates
C. Increase in CRR
D. Large-scale purchase of assets by the central bank to inject liquidity

Correct Answer: Option D


Explanation:
Quantitative easing is an unconventional monetary policy tool whereby a central bank purchases large quantities of financial assets to inject liquidity into the economy when interest rates are already near zero.

This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a feature of the 'Portfolio Balance' approach to exchange-rate determination?
A. Interest rates are irrelevant
B. Exchange rates are determined by the relative supplies of and demands for domestic and foreign assets
C. Only purchasing-power parity matters
D. Only goods-market equilibrium determines the exchange rate

Correct Answer: Option B


Explanation:
The portfolio-balance approach treats the exchange rate as the relative price of domestic and foreign assets and emphasises imperfect substitutability among assets denominated in different currencies.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'marginal propensity to consume' can never be greater than:
A. 2
B. 0.5
C. infinity
D. 1

Correct Answer: Option D


Explanation:
MPC is the fraction of additional income consumed, so it ranges from 0 to 1.

This question belongs to: Economy GK Economy Set 1