GDP & National Income — Set 6
Economy Advanced · GDP और राष्ट्रीय आय · Questions 51–60 of 140
What is 'GDP at basic prices'?
Correct Answer: C. C. Value of output minus intermediate consumption, excluding product taxes but including production taxes
GVA (and GDP) at basic prices is calculated as the value of output minus the cost of intermediate inputs, excluding product taxes but including any production taxes (like property taxes) that firms pay. GDP at market prices = GVA at basic prices + product taxes - product subsidies. This distinction was introduced in India's 2011-12 base year revision.
The term 'GDP growth rate' generally refers to:
Correct Answer: B. B. Real GDP growth at constant prices
When economists and the government announce 'GDP growth rate,' they refer to the growth of Real GDP at constant prices (in India, at 2011-12 prices). This removes the effect of inflation to show actual volume growth. Nominal GDP growth is higher and includes both real growth and inflation effects.
India's economy is projected to become the _____ largest economy by 2030.
Correct Answer: B. B. 3rd
Multiple projections by IMF, World Bank, and Morgan Stanley suggest India will become the 3rd largest economy by 2030, surpassing Japan and Germany. Currently ranked 5th by nominal GDP, India's high growth rate relative to advanced economies is expected to close the gap rapidly. By 2047 (Amrit Kaal), India aims to be a developed economy.
Invisible items in Balance of Payments that contribute to GNP include:
Correct Answer: B. B. Remittances and investment income from abroad
Remittances sent by Indians working abroad and investment income (dividends, interest) from overseas assets are 'invisible' current account items that form part of NFIA. These boost India's GNP above GDP. India receives over $100 billion in remittances annually, making it the world's largest recipient of remittances.
Which Five Year Plan introduced GDP growth rate as a formal planning objective?
Correct Answer: A. A. First Plan (1951-56)
The First Five Year Plan (1951-56) laid the foundation for systematic GDP growth targeting in India. It was based on the Harrod-Domar model and set a growth target of 2.1% per annum. Subsequent plans progressively raised growth targets, with the Eleventh Plan (2007-12) setting the highest target of 9% annual GDP growth.
The difference between GDP at market price and GVA at basic price is:
Correct Answer: C. C. Net product taxes (product taxes minus product subsidies)
GDP at market price = GVA at basic price + Net Product Taxes (product taxes minus product subsidies). Product taxes are taxes on goods and services such as GST, excise duty, and customs duty. Product subsidies include food and fertilizer subsidies. The difference represents taxes that consumers pay at market price but are not part of production costs.
In India's UN SNA 2008 compliant framework, what major change was made in the 2011-12 base year revision?
Correct Answer: B. B. Shift from factor cost to basic prices as primary measurement
A major methodological change in India's 2011-12 base year revision was the shift from measuring GDP at factor cost to measuring it at basic prices, in line with the United Nations System of National Accounts (SNA) 2008 framework. Previously, India used factor cost as the primary measure. The new approach is internationally comparable and more comprehensive.
Which institution publishes India's Index of Industrial Production (IIP)?
Correct Answer: C. C. NSO/MOSPI
The Index of Industrial Production (IIP) is published by the National Statistical Office (NSO) under MOSPI. It measures the short-term changes in the volume of production in India's industrial sector including manufacturing, mining, and electricity. IIP data is released monthly with a 6-week lag.
The UN System of National Accounts (SNA) framework followed by India since 2015 is:
Correct Answer: C. C. SNA 2008
India adopted the United Nations System of National Accounts 2008 (SNA 2008) framework with the base year revision to 2011-12 in 2015. SNA 2008 is the internationally accepted standard for national income accounting. Key changes include treatment of R&D as capital formation, expanded financial account coverage, and shift to basic prices.
What is 'National Disposable Income'?
Correct Answer: B. B. National Income plus Net Current Transfers from Abroad
National Disposable Income (NDI) = National Income + Net Current Transfers from Abroad. Net current transfers include remittances, grants, and other current transfers received from abroad minus those paid abroad. NDI represents the maximum amount a nation can spend on consumption and savings without running down its assets.