MCQs on Gross Domestic Product

GDP or Gross Domestic Product is the monetary value of all goods and services produced within a country’s geographical boundaries during a given period. It is an indicator of the ‘size of an economy’. A rising Gross Domestic Product is a sign of an expanding market and it also encourages companies to invest in the country.

Below is a list of multiple-choice questions and answers on Gross Domestic Product to help students understand the topic better.

  1. Which of the following is not a method to calculate Gross Domestic Product?
    1. Diminishing cost method
    2. Expenditure method
    3. Product method
    4. None of the above

    2. Answer: a

  2. Which organisation calculates the Gross Domestic Product for India?
    1. Central Statistics Office (CSO)
    2. Department of Economic Affairs (DEA)
    3. National Sample Survey Office (NSSO)
    4. None of the above

    3. Answer: a

  3. Which of the following is a part of the Gross National Product (GNP)?
    1. Exports
    2. Money earned by a resident abroad
    3. Imports
    4. All of the above

    4. Answer: d

  4. The net value of Gross Domestic Product after deducting depreciation from it is _______.
    1. Net Domestic Product
    2. Net National Product
    3. Disposable Income
    4. Gross National Product

    5. Answer: a

  5. When depreciation is deducted from Gross National Product, the net value is ____________.
    1. Net Domestic Product
    2. Net National Product
    3. Disposable Income
    4. Gross National Product

    6. Answer: b

  6. The average income of a country is known as _________.
    1. Real National Income
    2. Per Capita Income
    3. Disposable Income
    4. None of the above

    7. Answer: b

  7. Which of the following is a method of measuring National Income?
    1. Expenditure method
    2. Income method
    3. Product method
    4. All of the above

    8. Answer: d

  8. The calculation of National Income at market prices is called ___________.
    1. Non-monetary income
    2. Money income
    3. Real income
    4. None of the above

    9. Answer: b

  9. Transfer payments refer to payments that are made ________.
    1. As compensation to employees
    2. Without any exchange of goods and services
    3. To workers on transfer from one job to another
    4. None of the above

    10. Answer: b

  10. Which of the following is not a part of National Income?
    1. Undistributed profit
    2. The payments made by the household to the firm for purchasing goods and services
    3. Income from government expenditure
    4. Interest on the unproductive national debt

    11. Answer: d

  11. Net National Product at factor cost is also known as _________.
    1. Personal Income
    2. National Income
    3. Net Domestic Product
    4. Gross National Product

    12. Answer: b

  12. Which sector in the economy is the largest contributor to the Gross National Product?
    1. Tertiary sector
    2. Public sector
    3. Primary sector
    4. Secondary sector

    13. Answer: a

  13. The concept of Gross Domestic Product was developed by ________.
    1. Adam Smith
    2. Simon Kuznets
    3. John Maynard Keynes
    4. None of the above

    14. Answer: b

  14. Which of the following is a limitation of the Gross Domestic Product?
    1. It fails to indicate the sustainability of a nation’s growth
    2. It doesn’t consider the impact of economic activities on human health and the environment
    3. It does not include non-market transactions
    4. All of the above

    15. Answer: d

  15. The total income from economic activities across the country within a year is known as ________.
    1. National Income
    2. Disposable Income
    3. Net Income
    4. None of the above

    16. Answer: a

  16. Which of the following statements is true about Nominal Gross Domestic Product?
    1. It shows a more accurate picture of a country’s economy as compared to real GDP
    2. It is calculated by considering the current prices
    3. It is calculated by considering the base prices
    4. None of the above

    17. Answer: b

  17. Which of the following is added in calculating Gross Domestic Product?
    1. A teacher teaching their child
    2. The value of resale of old shares
    3. An artisan constructing a new house
    4. None of the above

    18. Answer: c

  18. While using expenditure to calculate Gross Domestic Product, consumption ___________.
    1. Includes consumer spending on durable and non-durable goods as well as services
    2. Includes consumer spending on durable and non-durable goods but excludes services
    3. Includes purchases by business firms
    4. None of the above

    19. Answer: a

  19. Which of the following is not a part of Gross Domestic Product?
    1. Life expectancy
    2. Public education
    3. National defence
    4. None of the above

    20. Answer: a

  20. The difference between Nominal and Real Gross Domestic Product is that ___________.
    1. Nominal GDP uses price levels of some base year
    2. Nominal GDP uses actual price levels
    3. Real GDP includes services while Nominal GDP only considers goods
    4. None of the above

    21. Answer: b

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