Daily Quiz – 23rd May 2024 By adminMay 27, 2024Quiz Daily Quiz - 23rd May 2024 Daily Quiz - 23rd May 2024 1 / 5 Which of the following statements is/are correct? GDP is the most widely used measure of national income. It represents the total value of all final goods and services produced within a country during a specific period. GDP encompasses consumption, investment, government spending, and net exports (exports minus imports).Select the correct answer using the codes given below. 3 only 1, 2 and 3 2 and 3 only 1 only All statements are correctNational IncomeNational income is a crucial economic indicator that measures the total value of goods and services produced within a country’s borders over a specifi c period.It serves as a yardstick for evaluating a nation’s economic performance, standard of living, and overall economic well-being.Several concepts are used to calculate national income, and understanding them provides insights into an economy’s productivity and income distribution.Gross Domestic Product (GDP)GDP is the most widely used measure of national income. It represents the total value of all fi nal goods and services produced within a country during a specifi c period.GDP encompasses consumption, investment, government spending, and net exports (exports minus imports).For example, if a country’s GDP for a year is $1 trillion, it means that the combined value of all goods and services produced within that country is $1 trillion. All statements are correctNational IncomeNational income is a crucial economic indicator that measures the total value of goods and services produced within a country’s borders over a specifi c period.It serves as a yardstick for evaluating a nation’s economic performance, standard of living, and overall economic well-being.Several concepts are used to calculate national income, and understanding them provides insights into an economy’s productivity and income distribution.Gross Domestic Product (GDP)GDP is the most widely used measure of national income. It represents the total value of all fi nal goods and services produced within a country during a specifi c period.GDP encompasses consumption, investment, government spending, and net exports (exports minus imports).For example, if a country’s GDP for a year is $1 trillion, it means that the combined value of all goods and services produced within that country is $1 trillion. 2 / 5 Match the following pairs: Gross Domestic Product (GDP) – Total value of final goods and services produced Gross National Product (GNP) – Adjusts for depreciation Net National Product (NNP) – Incorporates income generated by domestic and foreign entitiesHow many of the above pairs is/are correctly matched? Only one Only two All three None Explanation:Pair 1 is correct: Gross Domestic Product (GDP) - Total value of fi nal goods and services producedPair 2 is incorrect: Gross National Product (GNP) - Incorporates income generated by domestic and foreign entitiesPair 3 is incorrect: Net National Product (NNP) - Adjusts for depreciationConcepts of National IncomeNational income refers to the total monetary value of all goods and services produced within a country’s borders in a given time period, typically a year.It serves as a vital measure of a nation’s economic performance and helps gauge its overall well-being.National income encompasses various concepts, including Gross Domestic Product (GDP), which calculates the total value of final goods and services produced; Gross National Product (GNP), which incorporates income generated by domestic and foreign entities; and Net National Product (NNP), which adjusts for depreciation.These concepts provide insights into a country’s production, income distribution, economic growth, and overall economic health, aiding policymakers and economists in formulating effective strategies. Explanation:Pair 1 is correct: Gross Domestic Product (GDP) - Total value of fi nal goods and services producedPair 2 is incorrect: Gross National Product (GNP) - Incorporates income generated by domestic and foreign entitiesPair 3 is incorrect: Net National Product (NNP) - Adjusts for depreciationConcepts of National IncomeNational income refers to the total monetary value of all goods and services produced within a country’s borders in a given time period, typically a year.It serves as a vital measure of a nation’s economic performance and helps gauge its overall well-being.National income encompasses various concepts, including Gross Domestic Product (GDP), which calculates the total value of final goods and services produced; Gross National Product (GNP), which incorporates income generated by domestic and foreign entities; and Net National Product (NNP), which adjusts for depreciation.These concepts provide insights into a country’s production, income distribution, economic growth, and overall economic health, aiding policymakers and economists in formulating effective strategies. 3 / 5 Consider the following statements with respect to Purchasing Power Parities (PPP) exchange rates: It is the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country. PPP exchange rates are more volatile than market exchange rates. PPP exchange rates do not consider the different quality of goods among countries.Which of the statements given above is/are correct? 1 only 1 and 3 only 1 and 2 only 1, 2 and 3 Statements 1 and 3 are correct: According to IMF Purchasing Power Parity exchange rate is the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.However, there are Drawbacks of PPP:The biggest one is that PPP is harder to measure than market-based rates.The International Comparison Programme (ICP) of World Bank that produce PPP data among countries is a huge statistical undertaking, and new price comparisons are available only at infrequent intervals.PPP exchange rates help with costing but exclude profits and above all do not consider the different quality of goods among countries. The same product, for instance, can have a different level of quality and even safety in different countries, and may be subject to different taxes and transport costs.Statement 2 is Incorrect: A main advantage of PPP is that PPP exchange rates are relatively stable over time. By contrast, the market rate is more volatile because it reacts to changes in demand at each location. Because PPP exchange rates are more stable and are less affected by tariffs, they are usedFor many international comparisons, such as comparing countries' GDPs or other national income statistics.To predict longer term exchange rates Statements 1 and 3 are correct: According to IMF Purchasing Power Parity exchange rate is the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.However, there are Drawbacks of PPP:The biggest one is that PPP is harder to measure than market-based rates.The International Comparison Programme (ICP) of World Bank that produce PPP data among countries is a huge statistical undertaking, and new price comparisons are available only at infrequent intervals.PPP exchange rates help with costing but exclude profits and above all do not consider the different quality of goods among countries. The same product, for instance, can have a different level of quality and even safety in different countries, and may be subject to different taxes and transport costs.Statement 2 is Incorrect: A main advantage of PPP is that PPP exchange rates are relatively stable over time. By contrast, the market rate is more volatile because it reacts to changes in demand at each location. Because PPP exchange rates are more stable and are less affected by tariffs, they are usedFor many international comparisons, such as comparing countries' GDPs or other national income statistics.To predict longer term exchange rates 4 / 5 Which of the following perfectly explains meaning of GDP of an economy: Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during a one-year period adding expenditures on imports not produced in the nation. Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during a one-year period removing expenditures of goods and services produced which are exported, but not sold within the country. Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during a one-year period in which government spending and trade balance are also added as one of the components. Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during one year period minus national private consumption. Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during a one-year period. For India, this calendar year is from 1st April to 31st March. It is also calculated by adding national private consumption, gross investment, government spending and trade balance (exports-minus-imports). Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during a one-year period. For India, this calendar year is from 1st April to 31st March. It is also calculated by adding national private consumption, gross investment, government spending and trade balance (exports-minus-imports). 5 / 5 which of the following statements showing the relation between economic growth and economic development are incorrect? Economic growth is a quantitative term, whereas economic development is a qualitative term. Higher economic growth automatically brings in higher economic development. GDP indicates the economic growth of an economy whereas per capita income indicates economic developmentSelect the correct code among the following: 1 and 2 only 1 and 3 only 2 and 3 only All of the above Statement 1 is correct: Economic growth is a quantitative term whereas economic development is a qualitative term.Statement 2 is incorrect: Before ensuring development we need to assure growth. Higher economic development requires higher economic growth. But it does not mean that higher economic growth automatically brings in higher economic development.Statement 3 is incorrect: GDP and per capita income are quantitative terms indicating economic growth, whereas Human Development Index, gender inequality index indicates economic development as it focuses upon health, literacy and quality of life. Statement 1 is correct: Economic growth is a quantitative term whereas economic development is a qualitative term.Statement 2 is incorrect: Before ensuring development we need to assure growth. Higher economic development requires higher economic growth. But it does not mean that higher economic growth automatically brings in higher economic development.Statement 3 is incorrect: GDP and per capita income are quantitative terms indicating economic growth, whereas Human Development Index, gender inequality index indicates economic development as it focuses upon health, literacy and quality of life. Your score isThe average score is 0% 0% Restart quiz