JAMB Economics questions: National income

18 questions with answers and explanations. Tap an option to check yourself.

1. Question 1· National income· JAMB

   Gross National Product (GNP) is equal to

   • AGDP plus net income from abroad
   • BGDP minus depreciation
   • CGDP minus taxes
   • DGDP plus imports

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   Explanation and discussion

2. Question 2· National income· JAMB

   Leakages from the circular flow include

   • Asavings, taxes and imports
   • Binvestment, government spending and exports
   • Cwages and rent
   • Dconsumption only

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3. Question 3· National income· JAMB

   Nominal national income rises from ₦100 bn to ₦120 bn while the price index rises from 100 to 110. Real national income in the second year is about

   • A₦109 bn
   • B₦120 bn
   • C₦132 bn
   • D₦100 bn

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4. Question 4· National income· JAMB

   If the marginal propensity to save is 0.25, the investment multiplier is

   • A1.33
   • B0.25
   • C4
   • D2.5

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5. Question 5· National income· JAMB

   With a multiplier of 4, an increase in investment of ₦10 billion raises national income by

   • A₦40 billion
   • B₦10 billion
   • C₦2.5 billion
   • D₦14 billion

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6. Question 6· National income· JAMB

   If the marginal propensity to save is 0.2, the multiplier is

   • A0.2
   • B5
   • C2
   • D8

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7. Question 7· National income· JAMB

   A country has a national income of ₦200 billion and a population of 40 million. Find its per capita income.

   • A₦500
   • B₦8,000
   • C₦5,000
   • D₦50,000

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8. Question 8· National income· JAMB

   If the marginal propensity to consume is 0.8, the value of the investment multiplier is

   • A0.2
   • B5
   • C1.25
   • D8

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   Explanation and discussion

9. Question 9· National income· JAMB

   Using the expenditure method, national income is measured as

   • Ataxes minus subsidies
   • Bwages + rent + interest + profit only
   • Cthe value of output only
   • DC + I + G + (X − M)

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10. Question 10· National income· JAMB

    Injections into the circular flow include

    • Adepreciation
    • Bsavings, taxes and imports
    • Cconsumption only
    • Dinvestment, government spending and exports

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    Explanation and discussion

11. Question 11· National income· JAMB

    National income can be measured by the output, income and

    • Atax method
    • Bcensus method
    • Cexpenditure methods
    • Dbalance method

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12. Question 12· National income· JAMB

    Gross Domestic Product (GDP) is the total value of

    • Agovernment spending
    • Ball goods imported in a year
    • Cfinal goods and services produced within a country in a given period
    • Dmoney in circulation

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13. Question 13· National income· JAMB

    Pensions and other transfer payments are excluded from national income because they

    • Aare too small
    • Bare not payments for current production
    • Care paid by government
    • Dare not taxed

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14. Question 14· National income· JAMB

    Gross National Product equals GDP plus

    • Asubsidies
    • Bdepreciation
    • Cindirect taxes
    • Dnet factor income from abroad

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15. Question 15· National income· JAMB

    Double counting in national income accounting is avoided by

    • Acounting only final goods or the value added at each stage
    • Bcounting all intermediate goods
    • Cexcluding services
    • Dcounting only exports

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16. Question 16· National income· JAMB

    The circular flow of income shows

    • Aonly exports
    • Bonly government spending
    • Cthe flow of money and goods between households and firms
    • Dbarter trade

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17. Question 17· National income· JAMB

    Double counting in national income is avoided by

    • Acounting intermediate goods
    • Bcounting only final goods or value added
    • Ccounting all sales
    • Dignoring services

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18. Question 18· National income· JAMB

    Net National Product (NNP) is equal to

    • AGDP plus taxes
    • BGNP plus depreciation
    • CGDP minus imports
    • DGNP minus depreciation

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    Explanation and discussion