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ECONOMICS- PAGE 10

1. Identify sources of agricultural credit in India from the code given below :
 1. Commercial Banks
 2. Money Lender
 3. Regional Rural Bank
 4. Small Industries Development Bank of India
Codes :
 (A) 1, 2 and 3
 (B) 2, 3 and 4
 (C) 3, 4 and 1
 (D) 1, 2, 3 and 4
Ans: A

​2. Although a monopolist can charge any price he likes, but does not charge a higher price than his equilibrium price because
 (A) higher price means fall in total revenue.
 (B) higher price can be charged only on that segment of firm’s demand curve which is price inelastic implying that the marginal revenue will be negative.
 (C) it is inconsistent with profit maximization goal under monopoly.
 (D) marginal cost will be negative over the relevant range of output.
Ans: A

3. Which of the following conditions specify the least cost-output combination ?
 (A) PL/Pk = MRTS
 (B) PL/Pk = MPL/MPk
 (C) MPk/MPL = dL/dK
 (D) All the above
Ans: D

4. Which of the following is not relevant in case of Sweezy’s oligopoly model ?
 (A) A price cut by a firm is followed by the price cut by the rival firms.
 (B) Price hike is not followed by the rival firms.
 (C) Firms do not react to price change made by one of the firms.
 (D) Firms react to all kinds of price changes made by the rival.
Ans: D

5. Quasi rent is the reward to a factor of production which is 
(A) Economic rent in the short run but transfer earnings in the long run.
 (B) Transfer earnings in the short run.
 (C) Transfer earnings both in the short and long run.
 (D) Economic rent both in the short and long run.
Ans: A

6. According to the Loanable Funds Theory, the rate of interest is a function of
 (A) Investment
 (B) Desire to hoard money
 (C) Quantity of money
 (D) All the above
Ans: D

7. While analyzing the marginal productivity theory of distribution, Clark gave more emphasis on.
 (A) Demand for Labour
 (B) Supply of Labour
 (C) Both Demand as well as Supply of Labour
 (D) Profit Maximization ​
Ans: A

​8. A general equilibrium is defined as a state in which all economic units maximize their respective objective functions, all prices are
simultaneously in equilibrium and all markets are cleared. The statement is 
 (A) Correct
 (B) Not correct
 (C) Perfectly correct
 (D) None of the above
Ans: A or C

9. According to Mundell in an optimum currency area, the achievement of internal and external balance is possible through
 (A) Capital flows
 (B) Inflow of funds from abroad
 (C) Official development assistance
 (D) The mobility of factors
Ans: D

10. An agreement between two countries to maintain a free trade area, a common external tariff, free mobility of capital and labour and degree of unification in government policies and monetary policy is called
 (A) Common market
 (B) Free trade area
 (C) Economic union
 (D) Customs union
Ans: C

11. The core principles of multi lateral trading system are :
 I. Non-Discrimination
 II. Reciprocity
 III. Protectionism
 IV. Domestic Safeguards
 Select the right code from the list given below :
 (A) I, II and IV are correct.
 (B) II and III are correct.
 (C) II, III and IV are correct.
 (D) I and II are correct.
Ans: A

12. Assertion (A) : Many developing countries contend that labour standards constitute a barrier to free trade.
Reason (R) : Their competitive advantage in the global economy is cheap labour.
 (A) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
 (B) Both (A) and (R) are true and (R) is the correct explanation of (A).
 (C) (A) is false but (R) is true.
 (D) (A) is true but (R) is false.
Ans: B

13. Arrange in order the WTO ministerials :
 I. Geneva
 II. Doha
 III. Hong Kong
 IV. Seattle
 (A) II, IV, III, I (B) III, IV, I, II
 (C) IV, II, III, I (D) I, IV, II, III
Ans: D

14. What does Hedging mean ?
 (A) The acceptance of a foreign exchange risk.
 (B) The covering of a foreign exchange risk.
 (C) Foreign exchange speculation.
 (D) Foreign exchange arbitrage.
Ans: B

15. In which terms a unit of SDR was originally denominated ?
 (A) The world marked value of U.S. Dollar
 (B) The gold value equivalent of one US Dollar
 (C) The Pound-Sterling
 (D) The German Mark 
Ans: B

16. Which of the following is an adverse effect of Euro Currency Market ?
 (A) International Capital Market
 (B) Decrease in World’s Nominal Money Supply
 (C) Integration of International Capital Markets
 (D) Meeting BOP Deficit
Ans: B

17. Employment Guarantee Scheme was first introduced in
 (A) Gujarat
 (B) Madhya Pradesh
 (C) Maharashtra
 (D) Tamil Nadu
Ans: C

18. According to Weber’s Theory of Location, the important factors influencing location are
 1. Transport Cost
 2. Land Cost
 3. Labour Cost
 4. Innovation Cost
 Choose the correct code :
 (A) 1 & 2 (B) 2 & 3
 (C) 1 & 3 (D) 1 & 4
Ans: C

19. Given below are two statements, one labelled as assertion (A) and the other labelled as Reason (R).
Assertion (A) : India’s Public sector helped in the development of a sound industrial base.
Reason (R) : Public sector is under State control. The role of State in formulating appropriate policies and providing financial and other support has helped the public sector.
 (A) (A) is correct, but (R) is wrong.
 (B) Both (A) & (R) are correct.
 (C) (A) is wrong but (R) is correct.
 (D) Both (A) and (R) are wrong.
Ans: B

20. Match ‘labour force’ with the appropriate item from amongst the following :
 (A) Work force
 (B) All educated
 (C) Employed + Unemployed
 (D) All rural workers
Ans: C

21. There are four phases of a business cycle. Identify the correct sequence of the occurrence of these phases :
 (A) Recovery, Recession, Expansion, Depression
 (B) Recovery, Expansion, Depression, Recession
 (C) Depression, Expansion, Recession, Recovery
 (D) Recovery, Expansion, Recession, Depression
Ans: D

22. The production of ‘finished steel’ in India, since independence, has increased over
 (A) 10 times
 (B) 20 times
 (C) 30 times
 (D) 50 times
Ans: D

23. The concept of ‘Effective Revenue Deficit’ has been used for the first time in the Union Budget for 
 (A) 2009 – 10
 (B) 2010 – 11
 (C) 2011 – 12
 (D) 2008 – 09
Ans: C

24. Which tax is likely to contribute maximum to the Central Government tax revenue during the year 2011 – 12 ?
 (A) Central Excise Duty
 (B) Customs Duties
 (C) Income Tax
 (D) Corporate Tax 
Ans: D

​​25. Gross fiscal deficit of the State Governments is financed by
 I. Market Borrowings
 II. Printing of Currency
 III. Loans from the Central Government
 IV. External Borrowings
 Find the correct answer from the given code :
Codes :
 (A) I, II and III are correct.
 (B) II, III and IV are correct.
 (C) I and III are correct.
 (D) II and IV are correct.
Ans: C

26. Match the items of List – I with the items of List – II from the given code :
List – I List – II
i. Canons of Taxation 1. U.K. Hicks
ii. Canons of Public Expenditure 2. Adam Smith
iii. Effective incidence of Tax 3. Findlay Shirras
iv. Benefits received approach of Public Expenditure 4. Erik Lindahl 
 Codes :
 i ii iii iv
 (A) 2 3 1 4
 (B) 1 2 3 4
 (C) 2 3 4 1
 (D) 4 1 2 3
Ans: A

27. Assertion (A) : During the financial year 2011-12, the Central Government is not likely to achieve the target of raising Rs. 40,000 crores through disinvestment policy.
Reason (R) : Policy of increased public borrowings to bridge the fiscal gap is justified.
In the context of the above two statements, which one is correct from the given ?
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) (R) is correct but (A) is incorrect.
Ans: B

28. Arrange the following Reports in chronological order from the given codes :
 I. Direct taxes Enquiry Committee Final Report
 II. Final Report on Rationalizing and Simplification of the Tax Structure
 III. Indian Tax Reforms-Report of a Survey
 IV. Taxation Enquiry Commission 
Codes :
 (A) IV, III, II, I
 (B) I, II, III, IV
 (C) III, I, IV, II
 (D) II, III, I, IV 
Ans: A

​29. The most important characteristics of a federation is
 (A) Center’s Supremacy over States
 (B) Non-correspondence between the functions and resources of the Center and State Governments.
 (C) Perfect match between the functions and resources of the Central and State Governments.
 (D) None of the above
Ans: B

30. Indicate the year in which National Food Security Mission (NFSM) was launched :
 (A) 2001 –02 (B) 2004 – 05
 (C) 2010 – 11 (D) 2007 – 08
Ans: D

31. Which of the following statement is false ? 
 (A) In dynamic multiplier, there is lagged relationship between consumption and disposable income.
 (B) The dynamic multiplier process can be presented as a decreasing geometric series of change in income in the following period.
 (C) A major portion of the multiplier effect is realized in fewer periods when the marginal propensity to consume is smaller.
 (D) A major portion of the multiplier effect is realized in fewer periods when the marginal propensity to consume is larger.
Ans: D

32. According to which of the following hypotheses, consumption is irreversible ?
 (A) Absolute Income Hypothesis
 (B) Relative Income Hypothesis
 (C) Permanent Income Hypothesis
 (D) Life Cycle Hypothesis
Ans: B

33. Which of the following models of business cycle generates constrained cycles ?
 (A) Samuelson’s model
 (B) Hick’s model
 (C) Kaldor’s model
 (D) All of the above
Ans: B

34. Which of the following is not an assumption of Harrod’s model of growth ?
 (A) The desired capital output ratio is constant.
 (B) Savings are a constant proportion of real income in the economy.
 (C) The labour force grows at some exogenously determined constant exponential rate.
 (D) Factor prices are flexible in the long run.
Ans: D

35. Match the statements given in Group – A with their propounders in Group – B :
Group – A (Statements)
Group – B (Propounders)
i. Velocity of money is a stable function of its determinants. 1. Keynesians
ii. Velocity of money is an unstable function of its determinants. 2. Monetarists
iii. Velocity of money is a constant, and does not depend on income and interest rate. 3. Classicals
Choose the correct code :
Codes :
 i ii iii
 (A) 2 3 1
 (B) 1 2 3
 (C) 2 1 3
 (D) 3 2 1 ​
Ans: C

36. A.W. Phillips’ wage-inflation unemployment trade off is based on 
 (A) Static expectations hypothesis
 (B) Adaptive expectations hypothesis
 (C) Extrapolative expectations hypothesis
 (D) Rational expectations hypothesis
Ans: A

37. Suppose the money supply and the price level are constant, and the demand for money is a function of income and interest rate. When the income level increases, there is
 (A) an increase in the quantity of money demanded and an increase in the rate of interest.
 (B) an increase in the quantity of money demanded and a decrease in the rate of interest.
 (C) a decrease in the quantity of money demanded and a decrease in the rate of interest.
 (D) a decrease in the quantity of money demanded and an increase in the rate of interest.
Ans: A

38. Fiscal reform measures in India included
 I. Increasing Tax-GDP ratio 
 II. Expenditure Management
 III. Managing revenue deficit and fiscal deficit
 IV. Increasing liquidity in the economy
 Find the correct combination from the given codes :
 (A) I, II and III are correct.
 (B) I and IV are correct.
 (C) II, III and IV are correct.
 (D) III and IV are correct.
Ans: A

39. During the Tenth Five Year Plan, some of the following things were experienced :
 I. Services sector witnessed the highest growth rate.
 II. Agriculture experienced the lowest growth rate.
 III. Rate of growth in the industrial sector was negative.
 Which of the aforesaid statements are correct ?
 (A) I, II and III are correct.
 (B) I and II are correct.
 (C) I and III are correct.
 (D) II and III are correct.
Ans: B

40. Assertion (A) : Employment growth in the organized sector (both public and private combined) has increased during the period
1994-2008.
Reason (R) : There has been relatively faster employment growth in the private sector.
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.
Ans: A

41. According to the provisional figures for 2011 census, which of the following States has the lowest child sex ratio both in rural and urban areas ?
 (A) Uttar Pradesh
 (B) Kerala
 (C) Jammu and Kashmir
 (D) Haryana 
Ans: D

42. Of the following, which sector experienced maximum growth rate at 2004-05 prices in India during 2009-10 ?
 (A) Trade, hotels, transport and communication
 (B) Manufacturing, construction, electricity, gas and water supply
 (C) Financing, insurance, real estate and business services
 (D) Agriculture, forestry, fishing, mining and quarrying
Ans: A

43. In which of the following years, gross domestic savings as a percentage of GDP was the highest ?
 (A) 2009 – 10
 (B) 2008 – 09
 (C) 2007 – 08
 (D) 2006 – 07
Ans: C

44. Growth process resulting into broad based benefits and providing equality of opportunity to all is referred to as
 (A) Faster growth
 (B) Inclusive growth
 (C) Exclusive growth
 (D) Sustained growth
Ans: B

45. Which of the following plans witnessed the highest growth rate in India ?
 (A) Ninth Plan
 (B) Eighth Plan
 (C) Tenth Plan
 (D) Seventh Plan
Ans: C

46. For any pair of variables X and Y, two regression equations-one regression of Y on X and other regression of X on Y exist because 
 I. Tangent of the angle made by two regression equations with each other determines the coefficient of correlation.
 II. Regression model does not help in the identification of dependent and independent variables of the equation.
 III. Regression and correlation coefficients represent the co-variation of the two variables.
 IV. Regression equation represents jointly the value of X and Y.
 Select the right code from the following as the answer to the question :
Codes :
 (A) I and II are correct.
 (B) I and III are correct.
 (C) I and IV are correct.
 (D) III and IV are correct.
Ans: A

47. Which of the following are not associated with the Leontief’s Static Model ?
 I. Final demand is a stochastic vector.
 II. Reciprocal of the Perron Frobinius  root is the maximum growth rate.
 III. Input coefficients are the fixed technological parameters. 
 IV. (I – A – RB)–1 WL = P
 Select the correct code from the following :
 (A) I, II, III (B) I, III, IV
 (C) I, III (D) I, II, IV 
Ans: D

48. Total foodgrains production target for the year 2010-11 has been placed at 
 (A) 250 million tonnes
 (B) 240 million tonnes
 (C) 244 million tonnes
 (D) 234 million tonnes
Ans: C

49. In the context of simultaneous equations econometric models, consider the following statements :
 I. Identification is a problem to be dealt with before estimation.
 II. Order condition is necessary but not a sufficient condition of identification.
 III. Two stage least squares method of estimation gives consistent estimators if the equation is under identified.
 IV. Under indirect least squares method, least squares method is applied to the reduced form equations.
 Use the following code to answer the question :
 (A) I and II are correct but III and IV are incorrect.
 (B) I, II, III and IV are correct. 
 (C) I, II and III are correct but IV is incorrect.
 (D) I, II and IV are correct but III is incorrect.
Ans: D

50.  Match the following from list – I and list – II :
List – I List – II 
i. Durbin Watson ‘d’ Statistics 1. Stationarity
ii. R2 2. Qualitative Effects 
iii. Dickey Fuller test 3. Serial Correlation
iv. Dummy Variable 4. Goodness of fit of regression function
 Codes :
 i ii iii iv
 (A) 1 2 4 3
 (B) 2 1 3 4
 (C) 4 3 2 1
 (D) 3 4 1 2 
Ans: D

51. In Linear Programming problem involving two variables, multiple optimal solutions are obtained when one of the constraints is
 (A) the objective function should be parallel to a constraint that forms boundary of the feasible region.
 (B) the objective function should be perpendicular to a constraint that forms the boundary of the feasible region.
 (C) neither (A) nor (B).
 (D) two constraints should be parallel to each other.
Ans: A

53. Coefficient of determination of a regression model :
 1. Explains the proportion of total variation in the values of the dependent variable.
 2. It can be used to derive the estimate of the extent of variation in the value of Y that is explained by the random factors.
 3. Direction of inter-relation between the dependent and independent variables.
 4. It explains the influence of the intercept on the dependent variable.
 Select the correct code from the list given below :
 (A) 1 2 3 4
 (B) 1 2
 (C) 2 4 3
 (D) 4 1
Ans: B

54. The input coefficients/elements of which of the following matrices are interpreted as inputs required directly and indirectly per unit of final demand.
 (A) A
 (B) (I – A)
 (C) (I – A)–1
 (D) All of the above
Ans: C

55. Total foodgrains production target for the year 2010-11 has been placed at 
 (A) 250 million tonnes
 (B) 240 million tonnes
 (C) 244 million tonnes
 (D) 234 million tonnes
Ans: C

56. Indicate the year in which National Food Security Mission (NFSM) was launched :
 (A) 2001 –02 (B) 2004 – 05
 (C) 2010 – 11 (D) 2007 – 08
Ans: D
57. Marginal Revenue of a Monopoly firm is less than the price. Because :
 (A) Demand curve has a positive slope.
 (B) Demand curve has a negative slope.
 (C) Monopolist incurs losses.
 (D) Monopolist is in equilibrium.
Ans: B

58. For an inferior goods, income consumption curve and Engles curves are
 (A) Positively sloped
 (B) Negatively sloped
 (C) Are the same
 (D) Income consumption curve positively sloped and the Engles curve is negatively sloped
Ans: B

59. The classical economists focussed on the role of money as
 (A) medium of exchange
 (B) medium of distribution
 (C) wealth
 (D) link between present and future
Ans: A

60. If the demand for money is perfectly interest inelastic, the LM schedule will be
 (A) Upward sloping
 (B) Downward sloping
 (C) Horizontal line
 (D) Vertical line
Ans: D

61. Harrod-Domar model of economic growth is based on the equilibrium between
 (A) Income generation and productive capacity creation
 (B) Equilibrium between income and consumption
 (C) Equilibrium between savings and investment
 (D) None of the above
Ans: C

62. In calculating the buoyancy of a tax, we consider
 (A) Only discretionary changes
 (B) Only automatic changes
 (C) Both (A) and (B)
 (D) Neither (A) nor (B)
Ans: C

63. Which of the following measures of the central tendency suits the data best if the objective is to assess the distribution of values ?
 (A) Arithmetic mean
 (B) Mode
 (C) Median
 (D) Kurtosis
Ans: C

64. Comparative cost advantage in Ricardo’s international trade theory arises due to
 (A) Labour cost differences
 (B) Differences in factor endowment
 (C) Factor abundance defined in terms of factor prices
 (D) All of the above
Ans: A

65. In India, in 2004-05 the number of poor persons below poverty line was the highest in the State of
 (A) Bihar
 (B) Uttar Pradesh
 (C) Madhya Pradesh
 (D) Rajasthan
Ans: B
​

66. Which of the following is not a component of Bharat Nirman ?
 (A) Rural housing
 (B) Rural electrification
 (C) Agro-based industries
 (D) Rural telephony 
Ans: C

67. A point of ‘Kink’ in the kinked demand curve indicates
 I. Price rigidity
 II. Quantity rigidity
 III. Price flexibility
 IV. Quantity flexibility
Codes :
(A) I and II are correct.
 (B) II and III are correct.
 (C) III and IV are correct.
 (D) I and IV are correct.
Ans: A

68. Improvement in the BOP deficit may be effected through
 I. Import control
 II. Export promotion
 III. Foreign exchange control
 IV. Devaluation
Codes :
(A) I and II are correct.
 (B) I, II, III and IV are correct.
 (C) II and III are correct.
 (D) I, II and III are correct.
Ans: B

69. The problem relating to burden of public debt has been dealt by
 I. A.P. Learner
 II. E.D. Domar
 III. A.C. Pigou
 IV. A.H. Henson
Codes :
(A) I and II are correct.
 (B) II and III are correct.
 (C) I and IV are correct.
 (D) II and III are correct.
Ans: C

70. Fiscal policy relates to the Government decision in respect of
 I. Taxation
 II. Government spending
 III. Government borrowing
 IV. Public Debt
Codes :
(A) III and IV are correct.
 (B) II, III and IV are correct.
 (C) I and II are correct.
 (D) All the above are correct.
Ans: D

71. HDI is entrusted with reference to :
 I. Life expectancy at birth
 II. Real GDP/per capita
 III. Infant mortality
 IV. Morbidity
Codes :
(A) I and II are correct.
 (B) II and III are correct.
 (C) III and IV are correct.
 (D) All the above
Ans: A

72. The doctrine of unbalanced growth was propounded by
 I. Hirschman
 II. Robert Solow
 III. Singer
 IV. Ragnar Nurkse
Codes :
(A) I and II are correct.
 (B) II and III are correct.
 (C) III and IV are correct.
 (D) I and III are correct.
Ans: D

73. Harrod-Domar model of economic growth is based upon
 I. Warranted growth rate
 II. Investment growth rate
 III. Productivity growth rate
 IV. Natural growth rate
Codes :
(A) I and II are correct.
 (B) II and III are correct.
 (C) III and IV are correct.
 (D) I and IV are correct.
Ans: D

74. In Keynesian system speculative demand for money arises because of 
 I. Uncertainty of future interest rates
 II. Unexpected expenditures
 III. To bridge the gap between income and eventual expenditure
 IV. Relationship between changes in the interest rates and bond prices
Codes :
(A) I and III are correct.
 (B) I and IV are correct.
 (C) II and III are correct.
 (D) III and IV are correct.
Ans: B

75. According to Milton Friedman Theory of permanent component of consumption-expenditure depends on
 I. Transitory income alone
 II. Transitory and permanent income
 III. Permanent income alone
 IV. Windfall gains
Codes :
(A) I and II are correct.
 (B) I and III are correct.
 (C) II and IV are correct.
 (D) Only III is correct.
Ans: D

76. The Planning Commission of India has recently made announcement regarding Poverty Line :
 I. Rs. 42 per capita per day in urban area
II. Rs. 26 per capita per day in rural area
 III. Rs. 32 per capita per day in urban area
IV. Rs. 32 per capita per day in rural area
Codes :
 (A) I and II are correct.
 (B) I and III are correct.
 (C) II and III are correct.
 (D) III and IV are correct.
Ans: C 
77. Assertion (A) : Giffin’s paradox rarely occurs in the real world.
Reason (R) : Inferior goods are narrowly defined for which suitable substitutes are available.
 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 the correct explanation of (A).
 (C) (A) is correct, but (R) is incorrect.
 (D) (A) is incorrect, but (R) is correct.
Ans: C 

78. Assertion (A) : According to the Life Cycle Theory of consumption, an individual level of consumption depends not just on current
income but also on long run expected earnings.
Reason (R) : Individuals are assumed to plan a pattern of expenditure based on expected earnings over
life time.
 Codes :
(A) (A) is true, but (R) is false.
 (B) Both (A) and (R) are false.
 (C) (A) is not correct, but (R) is correct.
 (D) Both (A) and (R) are correct and (R) is correct explanation of (A).
Ans: D
 
79. Assertion (A) : Effective demand can be increased by more equitable distribution of wealth.
Reason (R) : Thirty or forty entities with income averaging between 1 lakh and 5 lakhs would create much more effective demand than a single entity having income of 10 lakhs a year.
 Codes :
 (A) Both (A) and (R) are correct and (R) is not the correct explanation of (A). 
 (B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
 (C) (A) is correct, but (R) is incorrect.
 (D) (A) is incorrect, but (R) is correct.
Ans: B

80. Assertion (A) : During the period 2004-05 to 2007-08 fiscal consolidation process was witnessed in India.
Reason (R) : There was buoyancy in tax revenue during this period.
 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 the correct explanation of (A).
 (C) (A) is correct, but (R) is incorrect.
 (D) (A) is incorrect, but (R) is correct.
Ans: A

81. Assertion (A) : K/L ratio will adjust through time in the direction of equilibrium ratio.
Reason (R) : Because the technical coefficient of production are variable.
 Codes :
 (A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
 (B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
 (C) (A) is correct, but (R) is incorrect.
 (D) (A) is incorrect, but (R) is correct. 
Ans: B
82. Assertion (A) : Financial inclusion is desirable to help weaker sections of society in the country.
Reason (R) : Investment activity needs to be promoted to facilitate access to development benefits to masses.
 Codes :
 (A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
 (B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
 (C) (A) is not correct, but (R) is correct.
 (D) (A) is correct, but (R) is not correct.
Ans: B

83. Assertion (A) : Stationary state is the end of the process of capital formation.
Reason (R) : Scarcity of natural resources as also capital leads the economy to the stationary state.
 Codes :
 (A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
 (B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
 (C) (A) is correct, but (R) is not correct.
 (D) (A) is not correct, but (R) is correct.
Ans: B

84. Assertion (A) : Investment has also a supply effect.
Reason (R) : Because it raises capacity to produce.
 Codes :
 (A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
 (B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
 (C) (A) is correct, but (R) is not correct.
 (D) (A) is not correct, but (R) is correct.
Ans: B

85. Assertion (A) : Gold standard was finally given up after the Second World War.
Reason (R) : Countries had different rates of inflation.
 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 correct explanation of (A).
 (C) (A) is correct, but (R) is not correct.
 (D) (A) is not correct, but (R) is correct.
Ans: B

86. Assertion (A) : Disguised unemployment is present in Indian agriculture.
Reason (R) : Marginal productivity of agriculture is close to zero.
 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 the correct explanation of (A).
 (C) (A) is correct, but (R) is not correct.
 (D) (A) is not correct, but (R) is correct. 
Ans: A
87. Arrange the following in chronological order :
 I. CES production function.
 II. Cobb-Douglas production function
 III. Tronslog production function
 IV. The law of variable proportions
Codes :
(A) III, I, IV, II (B) I, IV, II, III
 (C) IV, II, I, III (D) II, III, I, IV
Ans: C

88. Consider the following schemes :
 I. EAS II. TRYSEM
 III. JRY IV. RLEGP
 The correct chronological sequence of the launching of these schemes are :
Codes :
(A) II, IV, I, III (B) IV, II, III, I
 (C) IV, III, I, II (D) II, IV, III, I
Ans: D

89. Arrange the origin of money in a sequential order
 I. Cheque
 II. Metallic money
 III. Commodity money
 IV. Paper money
Codes :
(A) IV, I, III, II (B) I, III, II, IV
 (C) III, II, IV, I (D) II, IV, I, III
Ans: C

90. Arrange the following theories in the chronological order :
 I. Restatement of Quantity Theory
 II. Income Theory
 III. Quantity Theory
 IV. Cash Balance Approach
 Select the correct answer from the given codes :
Codes :
(A) I, II, IV, III (B) III, I, II, IV
 (C) IV, III, I, II (D) III, IV, II, I
Ans: D

91. Identify the correct chronological order of the following classical economists :
 (A) Adam Smith, Malthus, Ricardo, J.S. Mill
 (B) Adam Smith, Ricardo, Malthus, J.S. Mill
 (C) Adam Smith, J.S. Mill, Ricardo, Malthus
 (D) Adam Smith, Malthus, J.S. Mill, Ricardo
Ans: B

92. The sequencing process of Schumpeter model of development is 
 (A) Swarm like Clusters, Innovation, Bank credit, Breaking circular flow 
 (B) Breaking circular flow, Innovation, Bank credit, Swarm like Clusters
 (C) Innovation, Bank credit, Breaking circular flow, Swarm like Clusters
 (D) Bank credit, Innovation, Swarm like Clusters, Breaking circular flow
Ans: B

93. Arrange the following theories in order in which they appeared :
 I. Comparative Cost Advantage Theory
 II. Absolute Cost Advantage Theory
 III. Leontief Paradox
 IV. Factor Endowment Theory
Codes :
(A) I, III, II, IV (B) II, III, IV, I
 (C) II, I, IV, III (D) I, IV, II, III
Ans: C

94. Arrange the stages of economic growth in a sequential order :
 I. The age of high mass consumption
 II. The traditional society
 III. The take-off stage
 IV. The drive to maturity
Codes :
(A) I, III, IV, II (B) II, IV, I, III
 (C) III, I, II, IV (D) II, III, IV, I
Ans: D

95. Identify the sequence of implementation of the following taxes.  Select the correct answer from the  given codes :
 I. Land Revenue
 II. Sales tax
 III. MODVAT
 IV. Service tax
Codes :
(A) I, II, III, IV (B) II, IV, I, III
 (C) III, II, IV, I (D) IV, II, I, III
Ans: A

96. Identify the correct chronology of the following :
 I. Fisher’s test of significance of differences between means of three or more samples.
 II. Kendal’s partial rank correlation.
 III. Gossest’s T test of significance between means of two samples.
 IV. χ2 test of goodness of fit of the curve and randomness of the sample values.
Codes :
(A) III, I, II, IV (B) I, II, III, IV
 (C) IV, III, II, I (D) I, II, IV, III 
Ans: A
97. List – I List – II
 I. Behavioural theory of the firm 1. J.B. Clark
 II. Marginal productivity theory of distribution 2. Cyert and Mark
 III. Double criterion of welfare 3. Kenneth Arrow
 IV. Impossibility Theorem 4. Scitovosky
Codes :
 I II III IV
(A) 2 1 4 3
 (B) 3 2 4 1
 (C) 1 4 3 2
 (D) 2 1 3 4
Ans: A

98. List – I List – II
 I. New Classical Economics 1. T.H. Haavelmo
 II. Permanent Income Hypothesis 2. Robert Lucas
 III. Multiple effect of Balanced Budget 3. N. Gregory Mankiw
 IV. New Keynesian Economics 4. Milton Friedman
Codes :
 I II III IV
(A) 3 4 1 2
 (B) 4 3 2 1
 (C) 2 4 1 3
 (D) 1 2 4 3
Ans: C

99. List – I List – II
 I. Invisible Hand 1. Karl Marx  
 II. Warrier Knight 2. Adam Smith  
 III. PQLI   3. Schumpeter
 IV. Surplus Value 4. Morris D. Morris
Codes :
 I II III IV
(A) 1 4 2 3
 (B) 2 3 4 1
 (C) 1 2 3 4
 (D) 4 3 2 1
Ans: B

100. List – I List – II
 I. Four Sector Model 1. Rosestein Rodan
 II. Critical Minimum Effort Thesis 2. Arthur Lewis
 III. Big Push Theory 3. Mahalanobis 
 IV. Theory of Unlimited Supply of Labour 4. Leibeistein 
Codes :
 I II III IV
(A) 4 3 2 1
 (B) 3 4 1 2
 (C) 4 1 3 2
 (D) 1 2 4 3
Ans: B
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