Macro

National Income

Easy

An annual allowance for wear and tear of capital goods is defined as?

Expenditure.

Shortage.

Deduction.

Depreciation.

✅ Correct Option: 4

Option 1 -> Expenditure refers to money spent, not specifically an allowance for wear and tear.

Option 2 -> Shortage means a deficit or lack of something, unrelated to capital goods wear.

Option 3 -> Deduction is a general term for subtracting amounts, but doesn't specifically define wear and tear allowance.

Option 4 -> Depreciation is the systematic allocation of the cost of a capital asset over its useful life.

Hence, Option 4: Depreciation -> Depreciation is specifically defined as the annual allowance made for the wear and tear, deterioration, or obsolescence of capital goods (fixed assets like machinery, buildings, vehicles). It represents the reduction in value of these assets over time due to usage and age. This allowance is recorded as an expense in accounting and helps businesses account for the gradual consumption of their capital assets. -> correct

2025: 30 May Shift 1

Identify the flow variable from the following:

2026: 11 May Shift 2

The tea leaves purchased by the consumer, are brewed to make drinkable tea. This is an example of:

2025: 15 May Shift 1

A farmer produces cotton in his farm and sells it to the yarn making firm at Rs 2500. The yarn making firm sells this yarn to the cloth mill for Rs 4000, who make cloth from it and this cloth is sold to a readymade garments factory for Rs 6500. The ready made garments factory sells the garments to the retailer for Rs 9000 and makes a profit of Rs 2000.

Assuming that the farmer does not incur any intermediate cost, what will be total value added in the above process?

2025: 26 May Shift 2

Which of the following statements is true?

(A) Gross domestic income is a subset of national income.

(B) Corporate profit tax is a factor in income earned by the government.

(C) The production of wheat by a farmer retained by himself for his self-consumption will be included in the national income of the country.

(D) All capital goods are producer goods, but all producer goods are not necessarily capital goods.

Choose the correct answer from the options given below:

2026: 23 May Shift 1

Which of the following options related to the aggregates of national income is correct?

2025: 15 May Shift 1

Any new addition to capital stock in an economy is measured by _________.

An annual allowance for wear and tear of capital goods is defined as?

Solution

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