Cambridge International AS Level · Economics (9708)

National income statistics: Practice Questions

4 multiple-choice questions marked as you go, and 3 written questions with worked solutions. All on National income statistics.

7 questions20 marksFree, no account

Question 1

1 mark

When converting Gross Domestic Product (GDP) from market prices to basic prices, which of the following adjustments must be made?

Question 2

1 mark

How does the transition from Gross National Income (GNI) to Net National Income (NNI) account for the sustainability of an economy's productive capacity?

Question 3

1 mark

Which component must be added to Gross Domestic Product (GDP) to derive Gross National Income (GNI)?

Question 4

1 mark

Which of the following transactions would result in an increase in a country's Gross National Income (GNI) without a corresponding increase in its Gross Domestic Product (GDP)?

Question 5

4 marks

Explain why the deduction of capital consumption (depreciation) is necessary when transitioning from Gross Domestic Product (GDP) to Net Domestic Product (NDP), and discuss how ignoring this adjustment affects the assessment of a country's long-term productive capacity.

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Question 6

6 marks

An emerging economy experiences rapid exploitation of its natural resources by foreign-owned multinational corporations, leading to a substantial divergence between its Gross Domestic Product (GDP) and its Gross National Income (GNI). Explain why this divergence occurs and evaluate which metric provides a more accurate reflection of the economic welfare of the host country's residents.

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Question 7

6 marks

Analyze why transfer payments, such as unemployment benefits and state pensions, are deliberately excluded from the expenditure and income measures of Gross Domestic Product (GDP), despite representing a significant flow of funds within the economy.

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