Government, Transfer Payments and National Income Test 7: AP Macroeconomics

Which of the following is included under Government Transfer Receipts?
Maintenance grants to private trust institutions
Public debt interest and subsidies
Direct and Indirect taxes
Prices and old age pensions
When the government receives Income Tax and Sales Tax from a business house, it is:
Current Transfer
Capital Transfer
Property Income
Which of the following statements is true about Old Age Pension?
Old Age Pension payment is considered as a Transfer payment.
Old Age Pension payment is not a Transfer payment.
Old Age Pension payment will be a Transfer payment depending upon the age of retirement.
Old Age Pension payment will be a Transfer payment depending upon the number of dependants.
Old Age Pension payment will be a Transfer payment depending upon the income in the last three years.
Income Tax paid by the employees forms part of:
Corporate profits
Undistributed Corporate profits
Operating Surplus
Past savings
While calculating receipts of a person, which government expenditure is excluded:
Government interest payments
Transfer Payments
Free education provided by the Government is: I A part of the Final Consumption Expenditure by the Government II A part of the National Income III Counted as expenditure on Final goods and services
I only
II only
III only
I and II
I, II and III
Which of the following are included in the Current Transfer Receipts of households?
Compensation of employees
Payment for productive services rendered
Factor incomes for the services rendered
Scholarships, Unemployment Allowances and Old Age Pension
Property Income and wages and salaries
When is production of Government services counted in National Income?
When costs are incurred
When services are used by the population
When they are in the process of production
When they are ready for use by the population
When they are categorized under some particular services
Unilateral payments are also known as:
Factor Incomes
Transfer Payments
Payments for productive services rendered by others
Factor Payments
In which of these sectors is Operating Surplus found?
Production for self consumption
Government sector
Business enterprises
Subsistence farming

One of the most important chapters of Macroeconomics AP is National Income. The role of Government is very important in the computation of Government. The Government purchases goods and services as well as offers its own services. Again, there are various Transfer Payments, Earnings and Receipts in the economy. Here is a test which checks your knowledge of how the Government Payments and Receipts are treated while estimating National Income. Try out this 7-minute short Multiple Choice questions test on the Government Income and expenditure included in or excluded from National Income and its related Concepts.

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