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Deciphering the Economics

Top 50 Assertion-Reason Questions on National Income

Assertion Reason Questions for CUET and Class 12 on National Income.

Assertion-Reason Questions on National Income

1. Assertion: In the circular flow of income, households receive factor income.
Reason: Factor income represents payments made to factors of production, including wages, rent, interest, and profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

2. Assertion: Transfer payments are included in the calculation of national income.
Reason: Transfer payments represent payments made by the government to individuals without any corresponding productive activity.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

3. Assertion: Intermediate goods are counted in the calculation of GDP.
Reason: Intermediate goods are those used in the production of final goods and services.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

4. Assertion: The value-added method calculates GDP by summing the value added at each stage of production.
Reason: It avoids double-counting of intermediate goods.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

5. Assertion: The income method calculates GDP by summing all factor incomes earned within an economy.
Reason: It includes wages, rent, interest, and profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

6. Assertion: Nominal GDP takes inflation into account.
Reason: Nominal GDP is measured in current prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

7. Assertion: Real GDP adjusts for changes in the price level and reflects changes in output.
Reason: It is measured in constant prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

8. Assertion: GDP does not take into account negative externalities such as pollution.
Reason: GDP measures the total value of goods and services produced within an economy.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

9. Assertion: An increase in population leads to an automatic increase in GDP.
Reason: GDP per capita accounts for changes in population.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

10. Assertion: Composition of GDP refers to the breakdown of GDP into different expenditure categories.
Reason: It helps analyze the components driving economic growth or contraction.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

11. Assertion: In the circular flow of income, households provide factors of production to businesses.
Reason: Factors of production include labor, land, capital, and entrepreneurship.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

12. Assertion: The expenditure method calculates GDP by summing all the spending on final goods and services in an economy.
Reason: It includes consumption, investment, government spending, and net exports.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

13. Assertion: In the circular flow of income, firms pay wages to households.
Reason: Wages are considered a form of factor income.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

14. Assertion: Transfer payments contribute to the production of goods and services.
Reason: Transfer payments represent government payments without any corresponding economic output.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

15. Assertion: Intermediate goods are included in the calculation of GDP.
Reason: Intermediate goods are those used in the production of final goods and services.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

16. Assertion: The value-added method calculates GDP by summing the value added at each stage of production.
Reason: It avoids double-counting of intermediate goods.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

17. Assertion: The income method calculates GDP by summing all factor incomes earned within an economy.
Reason: It includes wages, rent, interest, and profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

18. Assertion: Nominal GDP takes inflation into account.
Reason: Nominal GDP is measured in current prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

19. Assertion: Real GDP adjusts for changes in the price level and reflects changes in output.
Reason: It is measured in constant prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

20. Assertion: Composition of GDP refers to the breakdown of GDP into different expenditure categories.
Reason: It helps analyze the components driving economic growth or contraction.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

21. Assertion: In the circular flow of income, households provide factors of production to businesses.
Reason: Factors of production include labor, land, capital, and entrepreneurship.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

22. Assertion: The expenditure method calculates GDP by summing all the spending on final goods and services in an economy.
Reason: It includes consumption, investment, government spending, and net exports.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

23. Assertion: In the circular flow of income, firms pay wages to households.
Reason: Wages are considered a form of factor income.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

24. Assertion: Transfer payments contribute to the production of goods and services.
Reason: Transfer payments represent government payments without any corresponding economic output.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

25. Assertion: Intermediate goods are included in the calculation of GDP.
Reason: Intermediate goods are those used in the production of final goods and services.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

26. Assertion: The value-added method calculates GDP by summing the value added at each stage of production.
Reason: It avoids double-counting of intermediate goods.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

27. Assertion: The income method calculates GDP by summing all factor incomes earned within an economy.
Reason: It includes wages, rent, interest, and profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

28. Assertion: Nominal GDP takes inflation into account.
Reason: Nominal GDP is measured in current prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

29. Assertion: Real GDP adjusts for changes in the price level and reflects changes in output.
Reason: It is measured in constant prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

30. Assertion: The composition of GDP refers to the breakdown of GDP into different expenditure categories.
Reason: It helps analyze the components driving economic growth or contraction.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

31. Assertion: In the circular flow of income, households provide factors of production to businesses.
Reason: Factors of production include labor, land, capital, and entrepreneurship.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

32. Assertion: The expenditure method calculates GDP by summing all the spending on final goods and services in an economy.
Reason: It includes consumption, investment, government spending, and net exports.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

33. Assertion: In the circular flow of income, firms pay wages to households.
Reason: Wages are considered a form of factor income.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

34. Assertion: Transfer payments contribute to the production of goods and services.
Reason: Transfer payments represent government payments without any corresponding economic output.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

35. Assertion: Intermediate goods are included in the calculation of GDP.
Reason: Intermediate goods are those used in the production of final goods and services.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

36. Assertion: The value-added method calculates GDP by summing the value added at each stage of production.
Reason: It avoids double-counting of intermediate goods.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

37. Assertion: The income method calculates GDP by summing all factor incomes earned within an economy.
Reason: It includes wages, rent, interest, and profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

38. Assertion: Nominal GDP takes inflation into account.
Reason: Nominal GDP is measured in current prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

39. Assertion: Real GDP adjusts for changes in the price level and reflects changes in output.
Reason: It is measured in constant prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

40. Assertion: Composition of GDP refers to the breakdown of GDP into different expenditure categories.
Reason: It helps analyze the components driving economic growth or contraction.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

41. Assertion: In the circular flow of income, households provide factors of production to businesses.
Reason: Factors of production include labor, land, capital, and entrepreneurship.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

42. Assertion: The expenditure method calculates GDP by summing all the spending on final goods and services in an economy.
Reason: It includes consumption, investment, government spending, and net exports.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

43. Assertion: In the circular flow of income, firms pay wages to households.
Reason: Wages are considered a form of factor income.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

44. Assertion: Transfer payments contribute to the production of goods and services.
Reason: Transfer payments represent government payments without any corresponding economic output.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

45. Assertion: Intermediate goods are included in the calculation of GDP.
Reason: Intermediate goods are those used in the production of final goods and services.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: c) Assertion is true, but Reason is false.

46. Assertion: The value-added method calculates GDP by summing the value added at each stage of production.
Reason: It avoids double-counting of intermediate goods.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

47. Assertion: The income method calculates GDP by summing all factor incomes earned within an economy.
Reason: It includes wages, rent, interest, and profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

48. Assertion: Nominal GDP takes inflation into account.
Reason: Nominal GDP is measured in current prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

49. Assertion: Real GDP adjusts for changes in the price level and reflects changes in output.
Reason: It is measured in constant prices.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

50. Assertion: Composition of GDP refers to the breakdown of GDP into different expenditure categories.
Reason: It helps analyze the components driving economic growth or contraction.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

Answer: a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

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