Disadvantages of GDP

Q.

Write down some of the limitations of using GDP as an index of welfare of a country.

Q.

Explain 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country.

Q.

Is gross domestic product a true index of economic welfare of the people? Give two reasons in support of your answer.

Q.

'GDP as an index of welfare may understate or overstate welfare'. Explain the statement using examples of a positive and a negative externality.

Q. A higher GDP per capita may not mean that the quality of life has really improved because

1. It measures Gross Domestic Product

2. It does not measure the quality of the items produced

3. It measures the income.
4. It is only measured every five years

Q.

GDP growth as an index of welfare loses its significance if it is accompanied with deeper economic divide.

1. True

2. False

Q.

Which of the following makes GDP an inappropriate index of welfare?

1. All of these

2. Externalities

3. Non-monetary transactions

4. Composition and distribution of GDP

Q.

How are calorie norms fixed for an average rural person and an average urban person in India for poverty line?

Q. What do you mean by per capita income of a country? How can it be used to compare two countries?

Q.

Per capita income of the country is defined as :

(a) Average income earned by all the residents of the country

(b) Total income of the country/ total population

(c) Total income of a country/ total population

(d) Average income of all working population population of a country

Q. The share of Industry Sector to GDP is showing _________ trend.

1. constant
2. nothing can be said
3. decreasing
4. increasing

Q. 'GDP as an index of welfare may understate or overstate welfare'. Explain the statement using examples of a positive and a negative externality.

Q.

1. remains constant
2. is zero
3. increases
4. decreases

Q. Which sector is not the sector of economy?

1. Primary
2. Secondary
3. Tertiary
4. Fourth
5. None of these

Q. Expenditure incurred by the government for the provision of essential services like judiciary, defence, and administration is termed as ____________.

1. plan expenditure
2. non-development expenditure
3. development expenditure
4. non-plan expenditure

Q. Explain any two functions of government.

Q.

Q. Per Capita Real Income stands for ___________.

1. Total Income of Various Industries / Total Number of Industrial Workers
2. Real National Income / Size of Population
3. None of these
4. National Income / Total Population

Q. In Economics, the 'central economic problem' means __________.

1. resources are not always allocated in an optimum way
2. output is restricted to the limited availability of resources
3. consumers do not have as much money as they would wish
4. there will always be a certain level of unemployment

Q. Assuming that no resource is equally efficient in production of all goods, name the curve which shows production potential of the economy. Explain, giving reasons, its properties.

Q. Which of the following is generally regarded as the true index of economic growth?

1. An increase in national income along with a corresponding increase in population
2. A sustained increase in real per capita income
3. An increase in national income at constant prices during a year
4. An increase in national income at current prices over time

Q. Government's consumption expenditure is incurred on:
i. Defence services
ii. Judiciary system
iii. Construction on roads
iv. Public utilities
v. Telecom infrastructure development
vi. Provision of social security

1. i, ii, iii & v
2. i, ii, iv, and vi
3. i, ii, iii, v, & vi
4. i, ii, ii, iv, v & vi

Q.

____________ is used by the IMF and World Bank for comparative analysis of its members.

1. NNP (Net National Product)
2. GNP (Gross National Product)
3. GDP (Gross Domestic Product)
4. None of the above

Q. Level of employment, GDP growth, population growth etc. are the subject matter of ____________.

1. normative economics
2. positive economics
3. macroeconomics
4. microeconomics

Q. As compared to other economic systems, inequalities of incomes is relatively less in _______ economic system.

1. mixed
2. socialist
3. none of the above.
4. capitalist

Q. State with reasons whether the following statement is True or False
In HDI, GDP per capita is calculated as PPP in US dollars.

1. True
2. False

Q. Which of the following is not a recognized way to be an entire sector of an economy?

1. Primary sector
2. Secondary sector
3. Tertiary Sector
4. Banking sector

Q. production of services for self consumption like of housewife is not included in estimation of national income.
suppose A is doctor and his children fell sick and he provides his service by treating the patient that is his children. will it be included or not
if yes then why as services for self consumption are not included in national income.
if no then why as these services can be measured in market value

Q. Both households and societies face economic problems because _____________.

1. populations may increase or decrease over time
2. resources are scarce
3. wages for households and therefore society fluctuate with business cycles
4. people by nature tend to disagree

Q. If the disposable income of the people rises, their demand curve for butter may not obey the law of demand.

1. True
2. False