76. Which of the following is NOT a component of Gross Domestic Product (GDP) at market prices?
a) Private Final Consumption Expenditure (PFCE)
b) Gross Fixed Capital Formation (GFCF)
c) Net Factor Income from Abroad (NFIA)
d) Government Final Consumption Expenditure (GFCE)
Answer:
c) Net Factor Income from Abroad (NFIA)
Explanation:
GDP is calculated based strictly on domestic economic boundaries. Net Factor Income from Abroad (NFIA) is only added to GDP when calculating Gross National Product (GNP).
77. If GDP at market price is ₹2,500 crore and subsidies are ₹300 crores, while indirect taxes are ₹200 crores, what is GDP at factor cost?
a) ₹2,600 crore
b) ₹2,400 crore
c) ₹2,000 crore
d) ₹2,300 crore
Answer:
a) ₹2,600 crore
Explanation:
GDP at Factor Cost = GDP at Market Price – Indirect Taxes + Subsidies. ₹2,500 – ₹200 + ₹300 = ₹2,600 crore.
78. If Net Exports are negative, it means:
a) Imports > Exports
b) Exports > Imports
c) Trade surplus
d) No effect on GDP
Answer:
a) Imports > Exports
Explanation:
Net Exports are mathematically defined as total Exports minus total Imports. If this number is negative, it means the country imported more goods and services than it exported.
79. Which type of money has intrinsic value?
a) Fiat money
b) Commodity money
c) Digital currency
d) Credit money
Answer:
b) Commodity money
Explanation:
Commodity money (like gold, silver, or salt) has intrinsic value, meaning the material itself has value and utility outside of simply acting as a medium of exchange.
80. A commercial bank creates credit based on:
a) Total deposits
b) Primary deposits
c) Cash reserves
d) Government securities
Answer:
b) Primary deposits
Explanation:
Banks multiply money and create credit (secondary deposits) by retaining a fraction of the initial primary cash deposits and lending out the rest.
