A car purchased by a hotel is meant for final investment (capital formation) to provide services to guests. It is not resold or completely used up in a single act of production, making it a final good.
Q. 5734922. Identify the statement which is include in National Income.
A. Interest paid by Mr A to Bank for taking a car loan
B. Interest paid by government to other country
C. Interest paid by employee to the employer
D. Interest paid by private depositors firm to the Bank
E. Payments of interests by banks to its deposits
(A) A and B only
(B) C and D only
(C) D and E only
(D) E and A only
Answer:
(C) D and E only
Explanation:
Interest on consumer loans (A) and public debt (B) are treated as transfer payments and excluded from national income. Interest paid by productive firms to banks (D) and by banks to depositors (E) are considered factor payments for productive services and are included.
Q. 5734923. The ratio of nominal to real GDP is known as
(A) Wholesale Price Index
(B) Consumer Price Index
(C) GDP Deflator
(D) Industrial Price Index
Answer:
(C) GDP Deflator
Explanation:
The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy, calculated as the ratio of Nominal GDP to Real GDP multiplied by 100.
Q. 5734924. Arrange the following according to the sequence of occurrence.
A. Forces Commercial Bank to increase their lending rate
B. An increase in Repo Rate by central Bank
C. Discourages borrowers from taking loans
D. Increase the cost of borrowings from the Central Bank
E. Due to increase in inflation in the economy
(A) D, B, C, A, E
(B) A, C, B, D, E
(C) E, B, D, A, C
(D) C, A, D, B, E
Answer:
(C) E, B, D, A, C
Explanation:
When inflation increases (E), the Central Bank raises the Repo Rate (B) to curb it. This increases the borrowing cost for commercial banks (D), which in turn forces them to raise their own lending rates (A). Higher lending rates ultimately discourage the public from taking loans (C).
Q. 5734925. Loan taken from USA for the infrastructural development is
(A) Capital expenditure
(B) Capital Receipt
(C) Revenue Receipt
(D) Revenue expenditure
Answer:
(B) Capital Receipt
Explanation:
A loan taken from a foreign country creates a future liability for the government to repay. Any receipt that creates a liability or reduces an asset is classified as a Capital Receipt.
