GDP and National Income Concepts Quiz for UPSC

GDP and National Income Concepts Quiz for UPSC Competitive Exams is designed to help aspirants master one of the most important topics in the Indian Economy section of the UPSC syllabus.
This quiz covers GDP, GNP, NNP, NDP, factor cost vs. market price, real and nominal GDP, GDP deflator, base year concept, per capita income, and other related national income aggregates.
The questions range from easy to tricky, with each answer explained in detail, ensuring you build both concept clarity and exam-oriented knowledge.

Which of the following best defines Gross Domestic Product (GDP)?

a) The total value of goods and services produced by a country’s citizens within a year

b) The total value of goods and services produced within the country’s borders in a year

c) The total income earned by a country’s citizens, regardless of location

d) The total income earned from exports only

Net Domestic Product (NDP) is calculated by:

a) GDP + Depreciation

b) GDP – Depreciation

c) GDP + Net Factor Income from Abroad

d) GDP – Subsidies

Which of the following is included in GDP at Market Price but not at Factor Cost?

a) Indirect Taxes

b) Direct Taxes

c) Subsidies

d) Both a and c

If Net Factor Income from Abroad (NFIA) is negative, which of the following is true?

a) GDP > GNP

b) GDP < GNP

c) GNP = GDP

d) NNP increases

Which of the following best describes Nominal GDP?

a) GDP adjusted for inflation

b) GDP measured at current market prices

c) GDP measured at constant prices

d) GDP per capita

The GDP deflator is used to measure:

a) The ratio of imports to exports

b) Inflation in the economy

c) Growth in per capita income

d) Changes in fiscal deficit

Which of the following would be included in India’s GDP but not in its GNP?

a) Profits earned by an Indian company in the USA

b) Salaries paid to foreign workers in India

c) Interest received by an Indian from a foreign bank

d) Earnings of an Indian software company in Singapore

Per Capita Income is calculated as:

a) Real GDP ÷ Population

b) Nominal GDP ÷ Population

c) National Income ÷ Population

d) Both a and c, depending on definition

Which of the following is NOT part of the three-sector method of GDP calculation?

a) Primary sector

b) Secondary sector

c) Quaternary sector

d) Tertiary sector

In India, the base year for calculating GDP at constant prices (as of 2024) is:

a) 2004–05

b) 2011–12

c) 2017–18

d) 2020–21

Which of the following is true about GDP at Factor Cost?

a) It excludes indirect taxes and subsidies

b) It includes indirect taxes but excludes subsidies

c) It includes both indirect taxes and subsidies

d) It excludes indirect taxes but includes subsidies

Which is the most comprehensive measure of a country’s economic performance?

a) GDP at market price

b) NNP at factor cost

c) GNP at market price

d) NDP at market price

Which of the following will increase Real GDP but not Nominal GDP?

a) Fall in inflation rate

b) Increase in output while prices remain constant

c) Increase in prices only

d) Increase in imports

Which of these is considered an intermediate good and hence excluded from GDP calculation?

a) Wheat sold to a bakery

b) Bread sold to households

c) Shoes sold to customers

d) Electricity used by households

Which of the following is an example of GDP at Constant Prices?

a) GDP measured using the prices of the current year

b) GDP adjusted for changes in the population

c) GDP calculated using the prices of a base year

d) GDP calculated after deducting depreciation

The value of GDP deflator will be 100 when:

a) Real GDP = Nominal GDP

b) Real GDP > Nominal GDP

c) Real GDP < Nominal GDP

d) Inflation is high

Which of the following is NOT considered in calculating GNP?

a) Income from exports

b) Remittances from citizens abroad

c) Foreign aid received by the government

d) Income from foreign investments

In GDP estimation using the expenditure method, which of the following is NOT included?

a) Private consumption expenditure

b) Government final consumption expenditure

c) Imports of goods and services

d) Gross capital formation

Which of the following is a limitation of GDP as a measure of welfare?

a) It does not account for inflation

b) It ignores non-market transactions

c) It excludes government spending

d) It cannot measure production

In India, the organisation responsible for GDP estimation is:

a) Reserve Bank of India

b) NITI Aayog

c) Central Statistics Office (CSO)

d) Ministry of Finance

GDP and National Income Concepts Quiz for UPSC Competitive Exams

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