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AP Intermediate 2nd Year Macroeconomics: Income, Budget & Banking — practice questions

Explore 98 free Macroeconomics: Income, Budget & Banking questions in AP Intermediate 2nd Year Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Macroeconomics: Income, Budget & Banking questions and exercises with answers

Showing questions 1–30 of 98.

Intermediate goods are excluded from national income to avoid the problem of:Read the answer and worked solution →The value of output minus the value of intermediate consumption is called:Read the answer and worked solution →National income can be measured by the product method, the income method and the:Read the answer and worked solution →The fall in the value of fixed capital due to normal wear and tear is called:Read the answer and worked solution →Gross National Product (GNP) equals GDP plus:Read the answer and worked solution →Net National Product (NNP) is obtained by subtracting ___ from GNP:Read the answer and worked solution →The value of national income measured at the prices actually received by factors of production is the:Read the answer and worked solution →Market price equals factor cost plus indirect taxes minus:Read the answer and worked solution →The circular flow of income shows the flow of goods, services and money between:Read the answer and worked solution →In the expenditure method, national income is found by adding consumption, investment, government spending and:Read the answer and worked solution →The branch of economics concerned with aggregates such as GDP, employment and the price level is:Read the answer and worked solution →Income that households actually have available to spend or save, after taxes, is called:Read the answer and worked solution →A government budget is an annual statement of the estimated ___ of the government over a financial year:Read the answer and worked solution →Receipts that neither create a liability nor reduce the assets of the government are called:Read the answer and worked solution →Receipts that either create a liability or reduce assets, such as borrowings, are called:Read the answer and worked solution →A tax whose burden (incidence and impact) falls on the same person and cannot be shifted, like income tax, is a:Read the answer and worked solution →A tax whose burden can be shifted to another person, like the Goods and Services Tax, is an:Read the answer and worked solution →The excess of total expenditure over total receipts excluding borrowings is the:Read the answer and worked solution →The excess of revenue expenditure over revenue receipts is the:Read the answer and worked solution →Fiscal deficit minus interest payments gives the:Read the answer and worked solution →A budget in which estimated receipts are equal to estimated expenditure is called a:Read the answer and worked solution →Expenditure that neither creates assets nor reduces liabilities of the government is:Read the answer and worked solution →The allocation function of the government budget refers to the:Read the answer and worked solution →Borrowing by the government is treated as a capital receipt because it:Read the answer and worked solution →The redistribution function of the budget mainly aims at:Read the answer and worked solution →Match the function of moneyRead the answer and worked solution →True or false about moneyRead the answer and worked solution →Central bank or commercial bank?Read the answer and worked solution →Complete the money measureRead the answer and worked solution →Sort narrow and broad moneyRead the answer and worked solution →

Worked practice questions

Intermediate goods are excluded from national income to avoid the problem of:

  1. taxation
  2. double counting
  3. depreciation
  4. inflation
Show answer and solution

Correct answer: B. double counting

Counting intermediate goods would inflate output — double counting so only final goods count.

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The value of output minus the value of intermediate consumption is called:

  1. value added
  2. depreciation
  3. disposable income
  4. national debt
Show answer and solution

Correct answer: A. value added

Value added = value of output − intermediate consumption.

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National income can be measured by the product method, the income method and the:

  1. ratio method
  2. expenditure method
  3. balance sheet method
  4. sampling method
Show answer and solution

Correct answer: B. expenditure method

The three methods: product (value added), income, and expenditure.

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More Economics topics

Determination of Income and EmploymentOpen Economy MacroeconomicsIntroduction to MicroeconomicsIndian Economy & Economic DevelopmentGovernment Budget and the EconomyMoney and BankingNational Income AccountingUnit 6B: International Trade and Trade Barriers