Lesson Worksheet: National Income Economics
In this worksheet, we will practice identifying the gross national income (GNI) and the gross domestic product (GDP) as measures of national income and characterizing three different methods to measure them.
Q1:
Which of the following is not a constituent of gross national income?
- AInterest
- BWage or salary
- CRent
- DProfit
- ETax
Q2:
Which of the following is the direct output of investment in economics?
- ASaving
- BCapital goods
- CConsumption
- DProfit
Q3:
Which of the following should not be included when measuring GNI using the income method?
- AProfits
- BSubsidies
- CWages
- DRent
Q4:
Which of the following methods measures GNI by considering the value added?
- AIncome
- BExpenditure
- COutput
- DCash
Q5:
Which of the following is true about the relationship between GDP and economic growth?
- ADecreasing prices of goods and services indicate economic growth.
- BAn increase in real GDP indicates economic growth.
- CAn increase in nominal GDP indicates economic growth.
- DRising prices of goods and services indicate economic growth.
- EGDP is not an appropriate measure of economic growth.
Q6:
Which of the following should not be included when measuring GNI using the expenditure method?
- AThe cost to purchase a new car
- BGovernment expenditure for constructing a bridge
- CThe cost to purchase machinery in a factory
- DThe cost of raw materials used to produce goods
- EThe value of exported goods
Q7:
A country with a population of 20 million has a GDP of $500 billion. What is the country’s GDP per capita?
- A$50,000
- B$100,000
- C$1,000,000
- D$20,000,000
- E$25,000
Q8:
Which of the following describes the relationship between national saving and consumption?
- ASaving + national income = consumption.
- BSaving = national income
- C
- DSaving = national income + consumption
Q9:
Country A with a population of 20 million has a nominal GDP of 500 billion dollars , and country B with a population of 1 million has a nominal GDP of 100 billion dollars. Assuming that the prices of goods and services in these countries are similar, what can we conclude about the standards of living in these two countries?
- ACountry B has higher standards of living than country A because it has a higher nominal GDP per capita.
- BCountry A has higher standards of living than country B because it has a higher nominal GDP.
- CCountry B has higher standards of living than country A because it has a higher real GDP per capita.
- DCountry A has higher standards of living than country B because it has a higher real GDP.
Q10:
Which of the following are not an example of transfer payments?
- AFood stamps
- BSubsidies for farmers
- CHousing subsidies
- DUnemployment payments
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