Economics Assertion (A) & Reason (B) MCQ

Assertion (A): Savings are zero in the case of a two-sector economy.
Reason (R): Households spend the entire factor income received from firms on the consumption of goods and services.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Transfer Income is not included in the National Income.
Reason (R): Transfer Income is a unilateral (one-sided) concept.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Expenditure on maintenance of machinery is an intermediate expenditure.
Reason (R): All expenditures on repair and maintenance incurred by the firm are treated as part of intermediate consumption.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Intermediate goods have direct demand.
Reason (R): The demand for intermediate goods depends on the demand for final goods.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Interest paid by the government on public debt is not included in the interest income.
Reason (R): Interest paid on loans taken for consumption purposes is not included as factor income.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): LED TV is an example of durable consumer goods.
Reason (R): LED TV can be repeatedly used for several years and is of relatively high value.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Production of services for self-consumption is not included in national income.
Reason (R): Domestic Services are already included in the value of final goods. If they are included again, it will lead to double counting.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): All producer goods are capital goods.
Reason (R): Producer goods are those which are used in the production of other goods whereas capital goods are the fixed assets of the producers.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Depreciation is also termed as consumption of fixed capital
Reason (R): Depreciation refers to that value of fixed capital that is used up in the process of production.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Subsidy is a transfer payment.
Reason (R): Subsidy contributes to current flow of goods and services.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Net Exports is a domestic concept.
Reason (R): Net Exports includes non-factor services.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): High fixed investment is a sign of growth and development.
Reason (R): Fixed investment indicates the production capacity of a nation. Greater the addition to production capacity (fixed investment), higher the growth and development.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): The stock variable does not have a time dimension.
Reason (R): The stock variable is measured over a period of time.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Unexpected obsolescence is an element of depreciation.
Reason (R): Loss of value of fixed assets owing to unexpected obsolescence is called capital loss.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Operating Surplus does not arise in the general government sector.
Reason (R): General Government produces goods and services with the aim of earning profit without any intention of social welfare.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Real Flow is also known as Nominal Flow.
Reason (R): Real Flow involves flow of goods and services between firms and households.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Factor income is a Bilateral Income.
Reason (R): Factor income is earned for contributing to the production process.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Real flow and money flow are one or the same thing, presented in a different form.
Reason (R): In money flow, there is no involvement of goods in its physical form.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Total production is equal to total consumption in the case of circular flow in a two-sector economy.
Reason (R): The household sector supplies factor services only to firms and the firm hire factor services only from households.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): GDP as an index of welfare may underestimate or overestimate the welfare.
Reason (R): It does not consider the non-monetary exchanges and does not take into consideration the positive or negative aspects associated with economic activity.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correc texplanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Real GDP shows the change in the level of economic activity and facilitates inter-regional and international comparison.
Reason (R): It is an inflation-adjusted index and accounts for an increase in the level of production in response to the price changes.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Microeconomics and Macroeconomics are interdependent upon each other. One can not study the two in isolation.
Reason (R): Microeconomics has a smaller degree of aggregation while Macroeconomics has a greater degree of aggregation.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false

Assertion (A): Payment of uniforms for nurses by a hospital is not included in the estimation of national income.
Reason (R): Uniforms are provided by the hospital at the time of work. It is to be treated as intermediate consumption.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): National Income is a national Concept.
Reason (R): National Income includes the value of final goods and services produced in the entire world by all producers who are normal residents of the country.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Value Added Method, Income Method, and Expenditure Method are three different methods to measure the National Income.
Reason (R): Production, Income, and Expenditure are three different phases of the circular flow of Income.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Domestic Income is equal to National Income in the case of a closed economy.
Reason (R): Closed Economy has no economic relations with the rest of the world.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Money received from the sale of second-hand cars will be considered while estimating national income.
Reason (R): Their value is already included and it does not contribute to the current flow of goods and services.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Domestic Income is a territorial concept.
Reason
(R): Domestic Income includes the value of final goods and services produced in the entire world.
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Nominal GDP is always equal to Real GDP.
Reason (R): Real GDP is a better measure to make a periodic comparison in the physical output of goods and services over different years as compared to Nominal GDP.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correctexplanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correctexplanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Financial help received by the flood victims should not be included while estimating national income.
Reason (R): Financial help is a transfer payment and should not be included.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Public goods possess the characteristics of non-rivalry and non-excludability.
Reason (R): Non-rival means consumption by one person does not reduce consumption for another person whereas non-excludability implies that no one can be excluded in terms of benefitting from the consumption of public goods.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Assertion (A): Imputed value of owner-occupied lands are a part of both domestic income and national income.
Reason (R): Factors of production are bound to give their services regardless of the fact that it is giving its services to the owner or an outsider.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True