Which of the following is not included in the calculation of Gross Domestic Product at market prices? MCQ with Answer and Explanation

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Which of the following is not included in the calculation of Gross Domestic Product at market prices?

A. Government final consumption expenditure

B. Gross fixed capital formation

C. Old age pension paid by government

D. Final consumption expenditure of households

Answer: Option C

Solution (By JKSSB Mock Tests)

Old age pension is a transfer payment and is not a payment for current production, hence it is excluded from GDP.

This question belongs to: Economy GK Economy Set 1

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The 'Golden Revolution' in India is associated with:

A. milk production

B. wheat production

C. gold production

D. horticulture and honey production

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Correct Answer: Option D

Explanation:
The Golden Revolution is associated with horticulture and honey production.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a capital expenditure of the government?

A. Payment of salaries

B. Construction of a new highway

C. Subsidies

D. Interest payments

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Correct Answer: Option B

Explanation:
Capital expenditure creates assets or reduces liabilities. Construction of a highway creates a durable asset and is therefore capital expenditure.

This question belongs to: Economy GK Economy Set 1

Question #3

The Real Effective Exchange Rate differs from NEER because REER:

A. includes only the US dollar

B. adjusts for relative price or inflation differences

C. is always higher

D. ignores inflation

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Correct Answer: Option B

Explanation:
REER is NEER adjusted for relative inflation differences.

This question belongs to: Economy GK Economy Set 1

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