2014 June UGC NET Solved Question Paper in Economics, Paper III
01. Which of the following are the basic assumptions of cardinal utility
analysis ?
I. Utility is a measurable and quantifiable entity.
II. Marginal utility of money changes with changes in real income.
III. Utilities derived from various goods are inter-dependent.
IV. The use of introspective method in judging the
behaviour of marginal utility.
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) I and IV are correct.
(D) I, III and IV are correct.
02. Engel Curve denotes
(A) various amounts of a good which a consumer would be
willing to purchase at various price levels.
(B) various amounts of a good which a consumer would be
willing to purchase at various income levels.
(C) various amounts of a good purchased when the price of its
substitutes tend to rise.
(D) the relationship between income effect and substitution effect.
03. A producer is said to be operating with excess capacity
(A) when he produces an output greater than that given by the
minimum Average Total Cost
(B) when he produces an output greater than at given by the
maximum Average Total Cost
(C) When he produces an output equal to that given by the
minimum Average Total Cost
(D) When he produces an output smaller than that given by the
Minimum Average Total Cost
04. Assertion (A) : Harvey Leibenstein asserted that marginal
conditions required for economic efficiency are not
usually satisfied in practice.
Reason (R) : People are not fully motivated towards
maximization or minimization.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) (A) is correct, but (R) is not correct.
(C) Both (A) and (R) are correct, but (R) is incorrect explanation
of (A).
(D) (R) is correct, but (A) is incorrect.
05. A graphical illustration used to explain efficiency conditions and
demonstrates how the allocations of some goods and resources can be
improved through exchange is called
(A) production possibility curves
(B) social indifference curves
(C) Edgeworth box diagram
(D) Phillips curve
06. Match the following :
List – I List - II
a. A double Kaldor-Hicks
Test 1. A. Bergson
b. Compensation Principle 2. K.J. Arrow
c. Social Welfare function 3. T. Scitovsky
d. Impossibility theorem 4. Kaldor- Hicks
Codes :
a b c d
(A) 4 1 3 2
(B) 3 4 1 2
(C) 3 4 2 1
(D) 4 3 2 1
07. The oligopoly model in which the businessman assumes that his
competitors output are fixed and simultaneously decide how much to
produce is
(A) Cournot oligopoly model
(B) Stackelberg oligopoly model
(C) Chamberlin’s oligopoly model
(D) Bertrand oligopoly model
08. According to Game Theory, if increased advertising, raises costs
more than revenues and the profits of both firms decline, we have a
(A) Positive-sum game
(B) Non zero-sum game
(C) Zero-sum game
(D) Negative-sum game
09. Arrows impossibility theorem implies
(A) Any social decision rule should not violates the requirements of
rational choice.
(B) Any social decision rule must violate atleast one of the
requirements of rational choice.
(C) Any social decision rule must violate all the requirements of
rational choice.
(D) It is impossible to violate social decision rules.
10. ‘Bandwagon effect’ is found in
(A) Relative Income hypothesis
(B) Permanent Income hypothesis
(C) Life cycle Hypothesis
(D) Absolute Income hypothesis
12. Complete the statements given in List – I with there given in List – II :
List – I List – II
a. Instantaneous
adjustment of
income with
investment
spending
occurs in 1. MPC is smaller
b. Consumption
lags income by
one period in 2. increase in investment
expenditure is once-forall
c. Value of
investment
multiplier is
zero when 3. state multiplier
d. Major portion
of multiplier is
realized in
fewer periods when 4. dynamic multiplier
Codes :
a b c d
(A) 3 4 1 2
(B) 3 4 2 1
(C) 4 3 1 2
(D) 2 3 1 4
13. Assertion (A) : The individual speculative demand for money
is a discontinuous one.
Reason (R) : Because the aggregate speculative demand for money
function is smooth downward sloping with liquidity trap at
extremely low interest rates.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (A) is incorrect, but (R) is correct.
14. Transaction Cost is also called
(A) Shoe Leather Cost
(B) Menu Cost
(C) Opportunity Cost of holding cash
(D) All of the above
15. Given the consumption function, C = 0.8Y, and the investment function
I = 102 – 0.2i, then the IS-curve is
(A) Y = 500 – 10i (B) Y = 450 – i
(C) Y = 510 – i (D) Y = 505 – 2i
16. Match the premise given in List – I with that in List – II :
List – I List – II
a. Price expectations are static 1. Okun’s law
b. Price expectations are adaptive 2. Phillips Curve
c. People do not make systematic
errors 3. Natural Rate of unemployment
hypothesis
d. Deviations of output from its
natural rate is inversely related
to the deviation of unemployment
rate from its natural level 4. Rational expectations hypothesis
Codes :
a b c d
(A) 2 3 4 1
(B) 4 3 2 1
(C) 1 3 4 2
(D) 4 2 1 3
18. When the aggregate supply schedule is positively sloped, continuous
increases in the nominal money supply, ceteris parilus, result in
(A) No change in the price level and proportional increases in
real output.
(B) No change in real output and proportional increases in the price level.
(C) An increase in the price level and real output.
(D) An increase in the price level and a decrease in real output.
19. “Golden Age” as per Mrs. Joan Robinson is (where ΔN/N
is growth rate of population and ΔK/K is growth rate of capital)
(A) ΔN/N=ΔK/K
(B)ΔN/N>ΔK/K
(C)ΔN/N<ΔK/K
(D) None of the above
20. A technical change is neutral if MPK/ MPL
remains unchanged at constant K/L
ratio :
(A) Harrod (B) Hicks
(C) Solow (D) Kaldor
21. Concept of disembodied technical change is associated with
I. Abramovitz II. Kaldor
III. Kendrick IV. Solow
(A) I and II (B) III and IV
(C) I, III and IV (D) II, III and IV
22. Joan Robinson’s growth model deals with
I. Desired growth rate
II. Possible growth rate
III. Natural growth rate
IV. Warranted growth rate
Codes :
(A) I and III (B) II and IV
(C) I and II (D) III and IV
23. Assertion (A) : To Marx, it is surplus labour that lead to capital accumulation.
Reason (R) : The difference between actual labour and subsistence
labour that a labourer puts in for which he receives nothing
is surplus labour.
Codes :
(A) (A) is correct, but (R) is not the correct reason for (A).
(B) (A) is correct and (R) is incorrect.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are incorrect.
24. Arrange the “Structural Development Processes” in a sequential order :
I. Resource Allocation Processes
II. Accumulation Process
III. Distributional Processes
IV. Demographic Processes
Codes :
(A) I, IV, II, III (B) II, I, IV, III
(C) III, II, I, IV (D) IV, III, I, II
25. Match the items in List – I with List – II :
List – I List – II
a. MPL is zero in overpopulated
economies 1. Gunnar Myrdal
b. Two gap model 2. J.E. Mead
c. Critical growth rate 3. Arthur Lewis
d. Backwash effects 4. Hollis Chenery & others
Codes :
a b c d
(A) 1 3 4 2
(B) 3 4 2 1
(C) 2 1 3 4
(D) 4 2 1 3
26. Match the items in List – I with List – II :
List – I List – II
a. Learning by doing 1. Kaldor
b. Biased Technical Progress 2. Karl Sax
c. Co-efficient of sensitivity of
income distribution 3. Kenneth J. Arrow
d. Theory of Demographic
Transition : Four stages of
Population growth 4. Joan Robinson
Codes :
a b c d
(A) 3 4 1 2
(B) 1 3 2 4
(C) 2 1 4 3
(D) 4 2 3 1
27. Assertion (A) : Solow model is a major improvement over
Harrod-Domar Model.
Reason (R) : Solow built a model of long run growth without the
assumption of fixed proportion in production.
Codes :
(A) (A) is correct, but (R) is not the correct reason of (A).
(B) (A) is not correct, but (R) is correct.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are not correct.
28. The concentrations effect explained in Peacock-Wiseman hypothesis
implies
(A) public expenditure does not increase in smooth and continuous manner
(B) public expenditure increases the necessity of increased revenue
(C) the Central Government’s economic activity to grow
faster than that of subnational Governments
(D) absolute level of public expenditure increases
29. A tax imposed upon monopoly profits
(A) can be shifted forward
(B) can be shifted backward
(C) can be shifted both forward and backward
(D) cannot be shifted
30. The plan expenditure on Revenue Account of the Union Government
includes
I. Economic Services
II. Social and community services
III. Grants-in-aid to States and Union Territories
IV. Loans and Advances to finance public enterprises
Codes :
(A) I and II are correct.
(B) I, II and III are correct.
(C) I, II and IV are correct.
(D) I, II, III and IV are correct.
31. Debt obligations of Government of India (Government liabilities)
I. State Provident Funds
II. Small Savings
III. Reserve Funds and Deposits
IV. Consolidated Fund of India
Codes :
(A) II and III are correct.
(B) I, II and III are correct.
(C) II, III and IV are correct.
(D) I, III and IV are correct.
32. Identify the chronology of the following Committees on tax reforms
in India :
I. Committee on Taxation of Agricultural Income and Wealth
II. Kaldor Proposal for Tax Reform in India
III. Taskforces on Direct and Indirect Taxes
IV. Direct Taxes Administration Enquiry Committee
Codes :
(A) II, I, IV, III (B) II, IV, I, III
(C) II, III, I, IV (D) I, III, IV, II
33. Which of the following are the role of Finance Commissions in India ?
I. To make recommendations on the distribution of tax proceeds
between Centre and States.
II. To make Recommendations on levying, removing or
restructuring of taxes.
III. To recommend Grants-in-aid under Article 275 of the
Constitution
IV. To recommend plan and other grants under Article 282 of the
Constitution
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) I, III and IV are correct.
(D) All are correct.
34. Under a managed floating exchange rate system, the nation’s monetary
authorities intervene in foreign exchange markets to
(A) smooth out short-run and longrun fluctuations in exchange rates
(B) keep exchange rates fixed among a group of nations
(C) smooth out short-run fluctuations in exchange rates
(D) keep exchange rates flexible
35. Euro currency market is a part of a larger global market known as
Eurodollar market.
(A) Above statement is correct.
(B) Above statement is not correct.
(C) Above statement is partially correct.
(D) Above statement is partially incorrect.
36. Match the following :
List – I List – II
a. WTO 1. Provide finance to correct
disequilibrium in balance of
payments.
b. IMF 2. Generally forbids
the use of quantitative
restrictions in trade.
c. SAARC 3. Sanction of soft loans
d. IDA 4. Promotes trade among South
Asian Countries
Codes :
a b c d
(A) 1 2 3 4
(B) 2 3 4 1
(C) 2 1 4 3
(D) 3 2 4 1
37. A sudden shift from import tariffs to free trade may induce short term
unemployment in
(A) import competing industries
(B) industries that are only exporters
(C) industries that sell domestically as well as export
(D) industries that neither import nor export
38. The immediate cause for the collapse of the Bretton woods system was
(A) the expectation that the U.S.A. would soon be forced to
devalue the dollar
(B) the massive flight of liquid capital from the U.S.A.
(C) the attempt by three small European Central Banks to
convert part of their dollar holding into gold at the Federal
Reserve Bank.
(D) All of the above
39. A feasible effect of international trade is that
(A) a monopoly in the home market becomes an oligopoly in the
world market
(B) an oligopoly in the home market becomes a monopoly in
the world market
(C) a purely competitive firm in the home market becomes an
oligopolist
(D) a purely competitive firm in the home market becomes a
monopolist
40. The European Union has achieved all of the following, except
(A) adopted a common fiscal policy for member nations
(B) established a common system of agricultural price supports
(C) disbanded all tariffs between its member countries
(D) levied common tariffs on products imported from nonmembers
41. A Foreign Trade Zone (FTZ) is
(A) a regional area within which trade with foreign nations is allowed
(B) a free trade agreement among several nations
(C) designed to promote exports by deferring import duties on
intermediate inputs and waving such duties if the final product
is re-exported rather than sold domestically
(D) designed to limit exports of manufactured goods by placing
import taxes on goods made within the zone
42. The formula that shows the correct relationship between
I. The supply of high powered money (H)
II. The currency (C)
III. The money supply (M)
IV. Required Reserves (RR)
V. Excess Reserves (ER)
VI. Demand deposits (D), is
(A)M/H = D + C/C + RR + ER
(B)H/M = D + C/C + RR + ER
(C)M/D + C = C + RR + ER/H
(D)H/M = C + RR + ER/D
43. Which of the following will act as the ‘lender of intermediate resort’ ?
(A) RBI
(B) NABARD
(C) SBI
(D) None of the above
44. According to Gurley and shaw, the various substitutes of currency and
commercial bank demand deposits should be assigned different weights
according to
(A) their degree of replacement
(B) their degree of substitutability
(C) their share in the money market
(D) their share in money supply
45. Assertion (A) : Primary financial markets deals in new financial claims.
Reason (R) : It mobilises savings and supplies new capital to the business units.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is not a correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
46. Margin requirement specified under which instruments of monetary policy ?
(A) Variable Reserve Requirement
(B) Statutory Liquidity Requirement
(C) Selective Credit Controls
(D) Open Market Operations
47. As per Micro, Small and Medium Enterprise Development Act, 2006,
Medium Enterprises are defined as those with investments :
(A) < 25 lakhs
(B) 25 lakhs to 5 crores
(C) 5 crores to 10 crores
(D) > 10 crores
48. Theory of Industrial Location is associated with the names of
I. Losch
II. Weber
III. Christaller
IV. Lerner
Codes :
(A) I & II
(B) I only
(C) I, II and III
(D) I, II, III and IV
49. The Committees related to industrial licensing policy are
I. Arjun Sengupta Committee
II. D.G. Karve Committee
III. Subimal Dutt Committee
IV. R.K. Hazari Committee
Codes :
(A) I and II
(B) II and III
(C) III and IV
(D) I, II and III
50. Which Industrial Policy Resolution gave the public sector a strategic role
in the Indian Economy ?
(A) 1948 (B) 1956
(C) 1977 (D) 1980
51. Average industrial growth rate during Tenth Plan period was
(A) 5.3% (B) 8.8%
(C) 10.2% (D) 15.3%
52. Suggest the correct choices about the nature of the Environmental
Economics :
I. Nature of Market failure is similar to public goods under
public finance.
II. Willingness to pay can be negative.
III. It deals for items which are not used.
IV. It deals for items which are used.
Codes :
(A) I, II, III & IV
(B) I, II & III
(C) II, III & IV
(D) II & IV
53. Which of the following methods would be used for estimation of price
change of a house due to either pollution or good environment like
existence of park and scenic beauty ?
(A) Hedonic Method
(B) Contingent Valuation Method
(C) Externality Effects
(D) All of the above
54. In a life table which of the following does not fit ?
(A) There are eight columns in a life table.
(B) It tells the age-specific mortality rate.
(C) Age-specific birth rate can be derived from a life table.
(D) Age-specific life expectancy can be estimated
55. Optimum theory of population tells about the relationship between
(A) Population and food supply
(B) Population and overall resources
(C) Dependent population and working population
(D) Present population and growth rate of population
56. What is meant by ‘population neutralism’ ?
(A) Impact of population growth on economic growth is negligible.
(B) Growth rate of population is hovering around stationary
population.
(C) Impact of population growth on food supply is neutral.
(D) Due to population growth, change in age structure is
almost neutral.
57. What is the essence of wage goods model explained by Professor P.R.
Brahmananda in the Indian economy context ?
(A) It tells about low wage rate in the agriculture.
(B) It tells about low wage rate for labour in the economy.
(C) It tells about shift of labour from agriculture to industry.
(D) It tells about the impact of the shortage of food items on the
wage rate and growth rate of the economy.
58. Match the highest crop production states given in List – I with List – II
from the given code :
List – I List – II
(States) (Highest crop production)
a. West Bengal 1. Total course cereals
b. Uttar Pradesh 2. Rice
c. Maharashtra 3. Potato
d. Gujarat 4. Groundnut
Codes :
a b c d
(A) 2 3 1 4
(B) 3 2 1 4
(C) 4 2 3 1
(D) 1 3 4 2
59. About minimum support price, find out the correct combinations :
I. If market price is higher, farmers will sell to the government.
II. It ensures minimum assured price for the produce of the farmers.
III. It helps in food security mission.
IV. This is highly rewarding to farmers because they earn huge
profits on their produce.
Codes :
(A) I, II & IV (B) II, III & IV
(C) II & III (D) II & IV
60. Which of the followings have been important in growth of rice and wheat
output in India after initiating green revolution programme ?
I. Changes in cropping pattern
II. Improved yields
III. Crop insurance
IV. Increased area under cultivation
Codes :
(A) II, III & IV (B) I, II & IV
(C) I, II & III (D) I, III & IV
61. ‘Green agriculture’ involves
(A) organic farming and emphasis on horticulture
(B) avoiding pesticides, chemical fertilizers while focussing on
horticulture and floriculture
(C) integrated pest management, integrated nutrient supply and
integrated natural resource management
(D) emphasis on food crops, horticulture and floriculture
62. The average cost function is given as
AC = 1/3χ 2 – 10 x + 9. The level of output at which average cost is equal
to marginal cost is :
(A) 18 (B) 12
(C) 15 (D) 21
63. The demand and supply functions are given as : Pα = 30 – 5 x and
Ps = 3 x– 10 respectively ( x = quantity). The consumer surplus is
(A) 125 (B) – 62.5
(C) 62.5 (D) –125
64. The linear programming problem specified as
Max : Z = 3x 1 + 5x 2 + 10x 3
Sub to: x 1 + x 2 + x 3 ≤ 100
9x 1 + x 2 + 8x 3 ≤ 95
x 1 + 8x 2 + 3x 3 ≤ 60
2x 1 + 7x 2 + x 3 ≤ 150
and x 1≥ 0, x 2 < 0 and x 3 > 0 has
(A) a feasible solution
(B) an optimal solution
(C) multiple solutions
(D) no solutions
65. The estimated regression equation of a firm producing scooter tyres is :
ln y = – 3.56 + 0.31 ln X1 – 0.05 ln X2 + 0.53 ln X3 + 0.37 ln X4,ü
–R 2 = 0.89 (Y = output and X1 to X4 are factor inputs).
Assuming that all the estimated parameters are statistically
significant from zero, the firm has
(A) constant returns to scale
(B) decreasing returns to scale
(C) increasing returns to scale
(D) neutral returns to scale
66. The test statistic used to test the significance of the adjusted
coefficient of multiple determination ( –R2) is :
(A) t–test (B) Z–test
(C) χ 2 –test (D) F–test
67. Given that the CES production function as :
Y = A[αL–β + (1 –α ) K–β] – γ β
Match List – I with List – II and select the answer from the codes
given below :
List – I List – II
a. A 1. Factor intensity
b. α 2. Elasticity of substitution
c. β 3. Factor homogeneity
d. γ 4. Efficiency parameter
Codes :
a b c d
(A) 1 4 2 3
(B) 2 4 1 3
(C) 1 2 3 4
(D) 1 4 3 2
68. The technique used to estimate the over-identified system of
simultaneous equations is
(A) ordinary least squares
(B) maximum likelihood
(C) limited information maximum likelihood
(D) two stage least squares
69. Which of the following assumptions are required to show the consistency,
unbiasedness and efficiency of the OLS estimates
I. E (νt) = 0
II. Var (νt) = s2
III. cov (νt, νt – j) = 0 for all values of j ¹ 0
IV. νt ~ N(0, σ2)
Codes :
(A) II and IV only.
(B) I and III only.
(C) I, II and III only.
(D) All the above four
70. The sources of auto correlation among the following are :
I. Omitted explanatory variables
II. Interpolation in the statistical observation
III. Mis-specification of the true random term ‘n’
IV. Economic variables to move together over time
Codes :
(A) I and II only
(B) I, II and III only
(C) I, III and IV only
(D) All of the above
71. Arrange the following sub-sectors of the services sector of the Indian
economy in ascending order of their contributions to the GDP in recent
years :
I. Trade, hotels and restaurants
II. Transport, storage and communication
III. Financing, insurance, real estate and business services
IV. Community, social and personal services
Codes :
(A) I, II, III, IV
(B) II, IV, III, I
(C) II, I, III, IV
(D) I, III, IV, II
72. Which of the following can be linked with those providing method for
estimating black money in India ?
I. Kaldor’s approach
II. NIPFP method
III. O.P. Chopra’s method
IV. Arjun Sengupta
Codes :
(A) I, II & III
(B) II, III & IV
(C) I, III & IV
(D) I & II
73. What is the share of single lane/intermediate lane in the total
length of National Highways ?
(A) 12 percent (B) 15 percent
(C) 22 percent (D) 29 percent
74. During which year, gross domestic savings of the public sector turned
negative in the Indian economy ?
I. 1990 – 91
II. 1995 – 96
III. 1999 – 2000
IV. 2002 – 2003
Codes :0
(A) I and II (B) II and ü III
(C) III and IV (D) I and IV
75. What has been the projected investment ratio for the infrastructure
development for the Eleventh Five Year Plan of India ?
(A) 5.43 percent
(B) 6.53 percent
(C) 7.60 percent
(D) 9.34 percent
01. Which of the following are the basic assumptions of cardinal utility
analysis ?
I. Utility is a measurable and quantifiable entity.
II. Marginal utility of money changes with changes in real income.
III. Utilities derived from various goods are inter-dependent.
IV. The use of introspective method in judging the
behaviour of marginal utility.
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) I and IV are correct.
(D) I, III and IV are correct.
02. Engel Curve denotes
(A) various amounts of a good which a consumer would be
willing to purchase at various price levels.
(B) various amounts of a good which a consumer would be
willing to purchase at various income levels.
(C) various amounts of a good purchased when the price of its
substitutes tend to rise.
(D) the relationship between income effect and substitution effect.
03. A producer is said to be operating with excess capacity
(A) when he produces an output greater than that given by the
minimum Average Total Cost
(B) when he produces an output greater than at given by the
maximum Average Total Cost
(C) When he produces an output equal to that given by the
minimum Average Total Cost
(D) When he produces an output smaller than that given by the
Minimum Average Total Cost
04. Assertion (A) : Harvey Leibenstein asserted that marginal
conditions required for economic efficiency are not
usually satisfied in practice.
Reason (R) : People are not fully motivated towards
maximization or minimization.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) (A) is correct, but (R) is not correct.
(C) Both (A) and (R) are correct, but (R) is incorrect explanation
of (A).
(D) (R) is correct, but (A) is incorrect.
05. A graphical illustration used to explain efficiency conditions and
demonstrates how the allocations of some goods and resources can be
improved through exchange is called
(A) production possibility curves
(B) social indifference curves
(C) Edgeworth box diagram
(D) Phillips curve
06. Match the following :
List – I List - II
a. A double Kaldor-Hicks
Test 1. A. Bergson
b. Compensation Principle 2. K.J. Arrow
c. Social Welfare function 3. T. Scitovsky
d. Impossibility theorem 4. Kaldor- Hicks
Codes :
a b c d
(A) 4 1 3 2
(B) 3 4 1 2
(C) 3 4 2 1
(D) 4 3 2 1
07. The oligopoly model in which the businessman assumes that his
competitors output are fixed and simultaneously decide how much to
produce is
(A) Cournot oligopoly model
(B) Stackelberg oligopoly model
(C) Chamberlin’s oligopoly model
(D) Bertrand oligopoly model
08. According to Game Theory, if increased advertising, raises costs
more than revenues and the profits of both firms decline, we have a
(A) Positive-sum game
(B) Non zero-sum game
(C) Zero-sum game
(D) Negative-sum game
09. Arrows impossibility theorem implies
(A) Any social decision rule should not violates the requirements of
rational choice.
(B) Any social decision rule must violate atleast one of the
requirements of rational choice.
(C) Any social decision rule must violate all the requirements of
rational choice.
(D) It is impossible to violate social decision rules.
10. ‘Bandwagon effect’ is found in
(A) Relative Income hypothesis
(B) Permanent Income hypothesis
(C) Life cycle Hypothesis
(D) Absolute Income hypothesis
12. Complete the statements given in List – I with there given in List – II :
List – I List – II
a. Instantaneous
adjustment of
income with
investment
spending
occurs in 1. MPC is smaller
b. Consumption
lags income by
one period in 2. increase in investment
expenditure is once-forall
c. Value of
investment
multiplier is
zero when 3. state multiplier
d. Major portion
of multiplier is
realized in
fewer periods when 4. dynamic multiplier
Codes :
a b c d
(A) 3 4 1 2
(B) 3 4 2 1
(C) 4 3 1 2
(D) 2 3 1 4
13. Assertion (A) : The individual speculative demand for money
is a discontinuous one.
Reason (R) : Because the aggregate speculative demand for money
function is smooth downward sloping with liquidity trap at
extremely low interest rates.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (A) is incorrect, but (R) is correct.
14. Transaction Cost is also called
(A) Shoe Leather Cost
(B) Menu Cost
(C) Opportunity Cost of holding cash
(D) All of the above
15. Given the consumption function, C = 0.8Y, and the investment function
I = 102 – 0.2i, then the IS-curve is
(A) Y = 500 – 10i (B) Y = 450 – i
(C) Y = 510 – i (D) Y = 505 – 2i
16. Match the premise given in List – I with that in List – II :
List – I List – II
a. Price expectations are static 1. Okun’s law
b. Price expectations are adaptive 2. Phillips Curve
c. People do not make systematic
errors 3. Natural Rate of unemployment
hypothesis
d. Deviations of output from its
natural rate is inversely related
to the deviation of unemployment
rate from its natural level 4. Rational expectations hypothesis
Codes :
a b c d
(A) 2 3 4 1
(B) 4 3 2 1
(C) 1 3 4 2
(D) 4 2 1 3
18. When the aggregate supply schedule is positively sloped, continuous
increases in the nominal money supply, ceteris parilus, result in
(A) No change in the price level and proportional increases in
real output.
(B) No change in real output and proportional increases in the price level.
(C) An increase in the price level and real output.
(D) An increase in the price level and a decrease in real output.
19. “Golden Age” as per Mrs. Joan Robinson is (where ΔN/N
is growth rate of population and ΔK/K is growth rate of capital)
(A) ΔN/N=ΔK/K
(B)ΔN/N>ΔK/K
(C)ΔN/N<ΔK/K
(D) None of the above
20. A technical change is neutral if MPK/ MPL
remains unchanged at constant K/L
ratio :
(A) Harrod (B) Hicks
(C) Solow (D) Kaldor
21. Concept of disembodied technical change is associated with
I. Abramovitz II. Kaldor
III. Kendrick IV. Solow
(A) I and II (B) III and IV
(C) I, III and IV (D) II, III and IV
22. Joan Robinson’s growth model deals with
I. Desired growth rate
II. Possible growth rate
III. Natural growth rate
IV. Warranted growth rate
Codes :
(A) I and III (B) II and IV
(C) I and II (D) III and IV
23. Assertion (A) : To Marx, it is surplus labour that lead to capital accumulation.
Reason (R) : The difference between actual labour and subsistence
labour that a labourer puts in for which he receives nothing
is surplus labour.
Codes :
(A) (A) is correct, but (R) is not the correct reason for (A).
(B) (A) is correct and (R) is incorrect.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are incorrect.
24. Arrange the “Structural Development Processes” in a sequential order :
I. Resource Allocation Processes
II. Accumulation Process
III. Distributional Processes
IV. Demographic Processes
Codes :
(A) I, IV, II, III (B) II, I, IV, III
(C) III, II, I, IV (D) IV, III, I, II
25. Match the items in List – I with List – II :
List – I List – II
a. MPL is zero in overpopulated
economies 1. Gunnar Myrdal
b. Two gap model 2. J.E. Mead
c. Critical growth rate 3. Arthur Lewis
d. Backwash effects 4. Hollis Chenery & others
Codes :
a b c d
(A) 1 3 4 2
(B) 3 4 2 1
(C) 2 1 3 4
(D) 4 2 1 3
26. Match the items in List – I with List – II :
List – I List – II
a. Learning by doing 1. Kaldor
b. Biased Technical Progress 2. Karl Sax
c. Co-efficient of sensitivity of
income distribution 3. Kenneth J. Arrow
d. Theory of Demographic
Transition : Four stages of
Population growth 4. Joan Robinson
Codes :
a b c d
(A) 3 4 1 2
(B) 1 3 2 4
(C) 2 1 4 3
(D) 4 2 3 1
27. Assertion (A) : Solow model is a major improvement over
Harrod-Domar Model.
Reason (R) : Solow built a model of long run growth without the
assumption of fixed proportion in production.
Codes :
(A) (A) is correct, but (R) is not the correct reason of (A).
(B) (A) is not correct, but (R) is correct.
(C) Both (A) and (R) are correct.
(D) Both (A) and (R) are not correct.
28. The concentrations effect explained in Peacock-Wiseman hypothesis
implies
(A) public expenditure does not increase in smooth and continuous manner
(B) public expenditure increases the necessity of increased revenue
(C) the Central Government’s economic activity to grow
faster than that of subnational Governments
(D) absolute level of public expenditure increases
29. A tax imposed upon monopoly profits
(A) can be shifted forward
(B) can be shifted backward
(C) can be shifted both forward and backward
(D) cannot be shifted
30. The plan expenditure on Revenue Account of the Union Government
includes
I. Economic Services
II. Social and community services
III. Grants-in-aid to States and Union Territories
IV. Loans and Advances to finance public enterprises
Codes :
(A) I and II are correct.
(B) I, II and III are correct.
(C) I, II and IV are correct.
(D) I, II, III and IV are correct.
31. Debt obligations of Government of India (Government liabilities)
I. State Provident Funds
II. Small Savings
III. Reserve Funds and Deposits
IV. Consolidated Fund of India
Codes :
(A) II and III are correct.
(B) I, II and III are correct.
(C) II, III and IV are correct.
(D) I, III and IV are correct.
32. Identify the chronology of the following Committees on tax reforms
in India :
I. Committee on Taxation of Agricultural Income and Wealth
II. Kaldor Proposal for Tax Reform in India
III. Taskforces on Direct and Indirect Taxes
IV. Direct Taxes Administration Enquiry Committee
Codes :
(A) II, I, IV, III (B) II, IV, I, III
(C) II, III, I, IV (D) I, III, IV, II
33. Which of the following are the role of Finance Commissions in India ?
I. To make recommendations on the distribution of tax proceeds
between Centre and States.
II. To make Recommendations on levying, removing or
restructuring of taxes.
III. To recommend Grants-in-aid under Article 275 of the
Constitution
IV. To recommend plan and other grants under Article 282 of the
Constitution
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) I, III and IV are correct.
(D) All are correct.
34. Under a managed floating exchange rate system, the nation’s monetary
authorities intervene in foreign exchange markets to
(A) smooth out short-run and longrun fluctuations in exchange rates
(B) keep exchange rates fixed among a group of nations
(C) smooth out short-run fluctuations in exchange rates
(D) keep exchange rates flexible
35. Euro currency market is a part of a larger global market known as
Eurodollar market.
(A) Above statement is correct.
(B) Above statement is not correct.
(C) Above statement is partially correct.
(D) Above statement is partially incorrect.
36. Match the following :
List – I List – II
a. WTO 1. Provide finance to correct
disequilibrium in balance of
payments.
b. IMF 2. Generally forbids
the use of quantitative
restrictions in trade.
c. SAARC 3. Sanction of soft loans
d. IDA 4. Promotes trade among South
Asian Countries
Codes :
a b c d
(A) 1 2 3 4
(B) 2 3 4 1
(C) 2 1 4 3
(D) 3 2 4 1
37. A sudden shift from import tariffs to free trade may induce short term
unemployment in
(A) import competing industries
(B) industries that are only exporters
(C) industries that sell domestically as well as export
(D) industries that neither import nor export
38. The immediate cause for the collapse of the Bretton woods system was
(A) the expectation that the U.S.A. would soon be forced to
devalue the dollar
(B) the massive flight of liquid capital from the U.S.A.
(C) the attempt by three small European Central Banks to
convert part of their dollar holding into gold at the Federal
Reserve Bank.
(D) All of the above
39. A feasible effect of international trade is that
(A) a monopoly in the home market becomes an oligopoly in the
world market
(B) an oligopoly in the home market becomes a monopoly in
the world market
(C) a purely competitive firm in the home market becomes an
oligopolist
(D) a purely competitive firm in the home market becomes a
monopolist
40. The European Union has achieved all of the following, except
(A) adopted a common fiscal policy for member nations
(B) established a common system of agricultural price supports
(C) disbanded all tariffs between its member countries
(D) levied common tariffs on products imported from nonmembers
41. A Foreign Trade Zone (FTZ) is
(A) a regional area within which trade with foreign nations is allowed
(B) a free trade agreement among several nations
(C) designed to promote exports by deferring import duties on
intermediate inputs and waving such duties if the final product
is re-exported rather than sold domestically
(D) designed to limit exports of manufactured goods by placing
import taxes on goods made within the zone
42. The formula that shows the correct relationship between
I. The supply of high powered money (H)
II. The currency (C)
III. The money supply (M)
IV. Required Reserves (RR)
V. Excess Reserves (ER)
VI. Demand deposits (D), is
(A)M/H = D + C/C + RR + ER
(B)H/M = D + C/C + RR + ER
(C)M/D + C = C + RR + ER/H
(D)H/M = C + RR + ER/D
43. Which of the following will act as the ‘lender of intermediate resort’ ?
(A) RBI
(B) NABARD
(C) SBI
(D) None of the above
44. According to Gurley and shaw, the various substitutes of currency and
commercial bank demand deposits should be assigned different weights
according to
(A) their degree of replacement
(B) their degree of substitutability
(C) their share in the money market
(D) their share in money supply
45. Assertion (A) : Primary financial markets deals in new financial claims.
Reason (R) : It mobilises savings and supplies new capital to the business units.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is not a correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
46. Margin requirement specified under which instruments of monetary policy ?
(A) Variable Reserve Requirement
(B) Statutory Liquidity Requirement
(C) Selective Credit Controls
(D) Open Market Operations
47. As per Micro, Small and Medium Enterprise Development Act, 2006,
Medium Enterprises are defined as those with investments :
(A) < 25 lakhs
(B) 25 lakhs to 5 crores
(C) 5 crores to 10 crores
(D) > 10 crores
48. Theory of Industrial Location is associated with the names of
I. Losch
II. Weber
III. Christaller
IV. Lerner
Codes :
(A) I & II
(B) I only
(C) I, II and III
(D) I, II, III and IV
49. The Committees related to industrial licensing policy are
I. Arjun Sengupta Committee
II. D.G. Karve Committee
III. Subimal Dutt Committee
IV. R.K. Hazari Committee
Codes :
(A) I and II
(B) II and III
(C) III and IV
(D) I, II and III
50. Which Industrial Policy Resolution gave the public sector a strategic role
in the Indian Economy ?
(A) 1948 (B) 1956
(C) 1977 (D) 1980
51. Average industrial growth rate during Tenth Plan period was
(A) 5.3% (B) 8.8%
(C) 10.2% (D) 15.3%
52. Suggest the correct choices about the nature of the Environmental
Economics :
I. Nature of Market failure is similar to public goods under
public finance.
II. Willingness to pay can be negative.
III. It deals for items which are not used.
IV. It deals for items which are used.
Codes :
(A) I, II, III & IV
(B) I, II & III
(C) II, III & IV
(D) II & IV
53. Which of the following methods would be used for estimation of price
change of a house due to either pollution or good environment like
existence of park and scenic beauty ?
(A) Hedonic Method
(B) Contingent Valuation Method
(C) Externality Effects
(D) All of the above
54. In a life table which of the following does not fit ?
(A) There are eight columns in a life table.
(B) It tells the age-specific mortality rate.
(C) Age-specific birth rate can be derived from a life table.
(D) Age-specific life expectancy can be estimated
55. Optimum theory of population tells about the relationship between
(A) Population and food supply
(B) Population and overall resources
(C) Dependent population and working population
(D) Present population and growth rate of population
56. What is meant by ‘population neutralism’ ?
(A) Impact of population growth on economic growth is negligible.
(B) Growth rate of population is hovering around stationary
population.
(C) Impact of population growth on food supply is neutral.
(D) Due to population growth, change in age structure is
almost neutral.
57. What is the essence of wage goods model explained by Professor P.R.
Brahmananda in the Indian economy context ?
(A) It tells about low wage rate in the agriculture.
(B) It tells about low wage rate for labour in the economy.
(C) It tells about shift of labour from agriculture to industry.
(D) It tells about the impact of the shortage of food items on the
wage rate and growth rate of the economy.
58. Match the highest crop production states given in List – I with List – II
from the given code :
List – I List – II
(States) (Highest crop production)
a. West Bengal 1. Total course cereals
b. Uttar Pradesh 2. Rice
c. Maharashtra 3. Potato
d. Gujarat 4. Groundnut
Codes :
a b c d
(A) 2 3 1 4
(B) 3 2 1 4
(C) 4 2 3 1
(D) 1 3 4 2
59. About minimum support price, find out the correct combinations :
I. If market price is higher, farmers will sell to the government.
II. It ensures minimum assured price for the produce of the farmers.
III. It helps in food security mission.
IV. This is highly rewarding to farmers because they earn huge
profits on their produce.
Codes :
(A) I, II & IV (B) II, III & IV
(C) II & III (D) II & IV
60. Which of the followings have been important in growth of rice and wheat
output in India after initiating green revolution programme ?
I. Changes in cropping pattern
II. Improved yields
III. Crop insurance
IV. Increased area under cultivation
Codes :
(A) II, III & IV (B) I, II & IV
(C) I, II & III (D) I, III & IV
61. ‘Green agriculture’ involves
(A) organic farming and emphasis on horticulture
(B) avoiding pesticides, chemical fertilizers while focussing on
horticulture and floriculture
(C) integrated pest management, integrated nutrient supply and
integrated natural resource management
(D) emphasis on food crops, horticulture and floriculture
62. The average cost function is given as
AC = 1/3χ 2 – 10 x + 9. The level of output at which average cost is equal
to marginal cost is :
(A) 18 (B) 12
(C) 15 (D) 21
63. The demand and supply functions are given as : Pα = 30 – 5 x and
Ps = 3 x– 10 respectively ( x = quantity). The consumer surplus is
(A) 125 (B) – 62.5
(C) 62.5 (D) –125
64. The linear programming problem specified as
Max : Z = 3x 1 + 5x 2 + 10x 3
Sub to: x 1 + x 2 + x 3 ≤ 100
9x 1 + x 2 + 8x 3 ≤ 95
x 1 + 8x 2 + 3x 3 ≤ 60
2x 1 + 7x 2 + x 3 ≤ 150
and x 1≥ 0, x 2 < 0 and x 3 > 0 has
(A) a feasible solution
(B) an optimal solution
(C) multiple solutions
(D) no solutions
65. The estimated regression equation of a firm producing scooter tyres is :
ln y = – 3.56 + 0.31 ln X1 – 0.05 ln X2 + 0.53 ln X3 + 0.37 ln X4,ü
–R 2 = 0.89 (Y = output and X1 to X4 are factor inputs).
Assuming that all the estimated parameters are statistically
significant from zero, the firm has
(A) constant returns to scale
(B) decreasing returns to scale
(C) increasing returns to scale
(D) neutral returns to scale
66. The test statistic used to test the significance of the adjusted
coefficient of multiple determination ( –R2) is :
(A) t–test (B) Z–test
(C) χ 2 –test (D) F–test
67. Given that the CES production function as :
Y = A[αL–β + (1 –α ) K–β] – γ β
Match List – I with List – II and select the answer from the codes
given below :
List – I List – II
a. A 1. Factor intensity
b. α 2. Elasticity of substitution
c. β 3. Factor homogeneity
d. γ 4. Efficiency parameter
Codes :
a b c d
(A) 1 4 2 3
(B) 2 4 1 3
(C) 1 2 3 4
(D) 1 4 3 2
68. The technique used to estimate the over-identified system of
simultaneous equations is
(A) ordinary least squares
(B) maximum likelihood
(C) limited information maximum likelihood
(D) two stage least squares
69. Which of the following assumptions are required to show the consistency,
unbiasedness and efficiency of the OLS estimates
I. E (νt) = 0
II. Var (νt) = s2
III. cov (νt, νt – j) = 0 for all values of j ¹ 0
IV. νt ~ N(0, σ2)
Codes :
(A) II and IV only.
(B) I and III only.
(C) I, II and III only.
(D) All the above four
70. The sources of auto correlation among the following are :
I. Omitted explanatory variables
II. Interpolation in the statistical observation
III. Mis-specification of the true random term ‘n’
IV. Economic variables to move together over time
Codes :
(A) I and II only
(B) I, II and III only
(C) I, III and IV only
(D) All of the above
71. Arrange the following sub-sectors of the services sector of the Indian
economy in ascending order of their contributions to the GDP in recent
years :
I. Trade, hotels and restaurants
II. Transport, storage and communication
III. Financing, insurance, real estate and business services
IV. Community, social and personal services
Codes :
(A) I, II, III, IV
(B) II, IV, III, I
(C) II, I, III, IV
(D) I, III, IV, II
72. Which of the following can be linked with those providing method for
estimating black money in India ?
I. Kaldor’s approach
II. NIPFP method
III. O.P. Chopra’s method
IV. Arjun Sengupta
Codes :
(A) I, II & III
(B) II, III & IV
(C) I, III & IV
(D) I & II
73. What is the share of single lane/intermediate lane in the total
length of National Highways ?
(A) 12 percent (B) 15 percent
(C) 22 percent (D) 29 percent
74. During which year, gross domestic savings of the public sector turned
negative in the Indian economy ?
I. 1990 – 91
II. 1995 – 96
III. 1999 – 2000
IV. 2002 – 2003
Codes :0
(A) I and II (B) II and ü III
(C) III and IV (D) I and IV
75. What has been the projected investment ratio for the infrastructure
development for the Eleventh Five Year Plan of India ?
(A) 5.43 percent
(B) 6.53 percent
(C) 7.60 percent
(D) 9.34 percent
