ECONOMICS- PAGE 2
1. Consider the following statements
Assertion (A):India is one of the leading industrial countries among the developing countries
Reason (R): Government of India has neglected altogether the traditional craft industries
Now select the answer using the codes scheme given below:
(a). Both (A) and (R) are true, and (R) is the correct explanation
(b). Both (A) and (R) are true, and (R) is not the correct explanation
(c). (A) and (R) are false
(d). (A) is true, but (R) is false
Answer: (A) is true, but (R) is false
2. Who said that "Financial emergency provisions were serious threat to the financial autonomy of the states?
a. H. N. Kunzru
b. H.V. Kamath
c. K.T.Shah
d. B.R. Ambedkar
Answer: H. N. Kunzru
3. Who classified the public goods as a social wants and merit wants?
a. Prof. Musgrave
b. Prof. Shirras
c. Prof. Seligman
d. Prof. Adam Smith
Answer: Prof. Musgrave
4. Under the following, which one is not the method of meaning National Income?
(A) Income method
(B) Expenditure method
(C) Product method
(D) Circular flow of income method
Answer: D
5. Which is not an exchange activity ?
1) Freight transportation
2) Tele communication
3) Retail trade
4) Management
Ans: 4
6. A simple model of economy is based on :
1) Set of decisionmaking elements
2) Transport network
3) Environment
4) International trade
Ans: 1
7. Consider the following statements regarding spatially closed economy :
A. Isolated with other regions
B. Fulfil their own needs
C. Linked by transport network
D. Acquire services entirely within a spatial unit.
Select the correct answer using code given below :
1) Only A is correct
2) A, B and C are correct
3) B and C are correct
4) A, B, C and D are correct
Ans: 4
8. Which of the following is not a method of calculating National Income?
a. Income method
b. Expenditure method
c. Saving method
d. Product method
Ans: c
Assertion (A):India is one of the leading industrial countries among the developing countries
Reason (R): Government of India has neglected altogether the traditional craft industries
Now select the answer using the codes scheme given below:
(a). Both (A) and (R) are true, and (R) is the correct explanation
(b). Both (A) and (R) are true, and (R) is not the correct explanation
(c). (A) and (R) are false
(d). (A) is true, but (R) is false
Answer: (A) is true, but (R) is false
2. Who said that "Financial emergency provisions were serious threat to the financial autonomy of the states?
a. H. N. Kunzru
b. H.V. Kamath
c. K.T.Shah
d. B.R. Ambedkar
Answer: H. N. Kunzru
3. Who classified the public goods as a social wants and merit wants?
a. Prof. Musgrave
b. Prof. Shirras
c. Prof. Seligman
d. Prof. Adam Smith
Answer: Prof. Musgrave
4. Under the following, which one is not the method of meaning National Income?
(A) Income method
(B) Expenditure method
(C) Product method
(D) Circular flow of income method
Answer: D
5. Which is not an exchange activity ?
1) Freight transportation
2) Tele communication
3) Retail trade
4) Management
Ans: 4
6. A simple model of economy is based on :
1) Set of decisionmaking elements
2) Transport network
3) Environment
4) International trade
Ans: 1
7. Consider the following statements regarding spatially closed economy :
A. Isolated with other regions
B. Fulfil their own needs
C. Linked by transport network
D. Acquire services entirely within a spatial unit.
Select the correct answer using code given below :
1) Only A is correct
2) A, B and C are correct
3) B and C are correct
4) A, B, C and D are correct
Ans: 4
8. Which of the following is not a method of calculating National Income?
a. Income method
b. Expenditure method
c. Saving method
d. Product method
Ans: c
9:-The committee which was appointed in 1991 to examine the structure, organization, function and procedures of the financial system in India
A:-Kelkar Committee
B:-Raja J. Chelliah Committee
C:-Narasimham Committee
D:-K. N. Raj Committee
Ans: C
10:-The Securities and Exchange Board of India (SEBI) was established in the year
A:-1964
B:-1988
C:-1991
D:-1994
Ans: B
11:-The term vertical imbalance in fiscal federalism implies
A:-The financial imbalance between the Centre and the States
B:-The imbalance in the distribution of resources between developed and less developed States
C:-The imbalance in the distribution of financial resources among the poor States
D:-The financial imbalance between developed and less developed regions
Ans: A
12:-The new classical theory of business cycle argues that
A:-Economic fluctuations are genereted by natural factors in the economy
B:-Large variations in the level of output and employment are caused by political decisions
C:-Economic fluctuations are responses to uncertainty in the rate of technological progress
D:-None of these
Ans: C
13:-The term 'saltwater' has been used to represent the approaches of
A:-New Keynesians
B:-New Classicals
C:-Orthodox Keynesians
D:-Neo-Classicals
Ans: A
14:-The insider-outsider models seek to explain
A:-Why workers need to be motivated and machines do not
B:-What forms the economic glue that keeps workers and firms together in the labour market
C:-That it is not in firms interest to lower real wages because real wages and worker effort are interdependent
D:-Why wage rigidity persists in the face of involuntary unemployment
Ans: D
15:-Euro dollar deposit in the Euro currency market means
A:-A time deposit denominated in dollar and made with a bank of United States
B:-A time deposit denominated in dollar but made with a bank outside the United States
C:-A time deposit in terms of both Euro and Dollar
D:-A shadow currency deposit for transaction between Europe and U.S.
Ans: B
16:-The main objective of the Targeted Public Distribution System (TPDS) introduced recently in India is
A:-To direct subsidy to the families of BPL
B:-To provide subsidies to both BPL and APL
C:-To widen the coverage of PDS
D:-Integration of PDS with open market
Ans: A
17:-For a square matrix A there exists an inverse only if
A:-A is symmetric
B:-A is skew symmetric
C:-A is singular
D:-A is non singular
Ans: D
18:-For the demand function X = ```27/P^(3)` , the elasticity of demand is
A:-```P^(2)`
B:-1
C:-3
D:-`````-27/P^(4)`
Ans: C
19:-For a highly heterogeneous population we use
A:-Stratified sampling
B:-Simple random sampling
C:-Cluster sampling
D:-Systematic sampling
Ans: A
20:-The two lines of regression are given as x + 2y — 5 = 0 and 2x + 3y = 8 then the mean values of x and y respectively are
A:-2, 1
B:-1, 2
C:-2, 5
D:-2, 3
Ans: B
21:-In the simultaneous tossing of two perfect dice, the probability of obtaining 4 as the sum of the resultant faces is
A:-`(4)/(12)`
B:-`(1)/12`
C:-`(3)/(12)`
D:-`(2)/(12)`
Ans: B
22:-Let Ø be an unknown parameter and `T_(1)` be an unbiased estimator of Ø. If Var (`T_(1)`)<Var (```T_(2)`), for `T_(2)` to be any other unbiased estimator, then `T_(1)` is known as
A:-Minimum variance unbiased estimator
B:-Unbiased and efficient estimator
C:-Consistent and efficient estimator
D:-Unbiased and consistent estimator
Ans: A
23:-While testing the significance of the difference of two sample means in case of small samples, we use
A:-`chi``^2` test
B:-F test
C:-T test
D:-Normal test
Ans: C
24:-A market with a single buyer is called
A:-Monopsony
B:-Monopoly
C:-Duopoly
D:-Duopsony
Ans: A
25:-The evaluative report of the economy being presented in the Parliament prior to the presentation of union budget by the Finance Minister
A:-Economic review
B:-Economic out look
C:-Economic survey
D:-Economic report
Ans: C
26:-Substitution effect is positive but income effect is negative for
A:-Luxury goods
B:-Free goods
C:-Exported goods
D:-Inferior goods
Ans: D
27:-According to inter temporal substitution model, workers will substitute work for leisure if
A:-There is unemployment in the market
B:-The increase in the wage rate is only temporary
C:-The marginal utility of work is equal to leisure
D:-None of these
Ans: B
28:-The stage theory of growth was postulated by
A:-W. W. Rostow
B:-Simon Kuznet
C:-Arthur Lewis
D:-H. O. Hirschman
Ans: A
29:-Laffer Curve is related to
A:-Multi firm equilibrium
B:-Supply side economics
C:-Break even analysis
D:-Disequilibrium in the labour market
Ans: B
30:-According to 2015 report, the global position of India in the consumption of oil is
A:-First
B:-Second
C:-Third
D:-Fourth
Ans: C
A:-Kelkar Committee
B:-Raja J. Chelliah Committee
C:-Narasimham Committee
D:-K. N. Raj Committee
Ans: C
10:-The Securities and Exchange Board of India (SEBI) was established in the year
A:-1964
B:-1988
C:-1991
D:-1994
Ans: B
11:-The term vertical imbalance in fiscal federalism implies
A:-The financial imbalance between the Centre and the States
B:-The imbalance in the distribution of resources between developed and less developed States
C:-The imbalance in the distribution of financial resources among the poor States
D:-The financial imbalance between developed and less developed regions
Ans: A
12:-The new classical theory of business cycle argues that
A:-Economic fluctuations are genereted by natural factors in the economy
B:-Large variations in the level of output and employment are caused by political decisions
C:-Economic fluctuations are responses to uncertainty in the rate of technological progress
D:-None of these
Ans: C
13:-The term 'saltwater' has been used to represent the approaches of
A:-New Keynesians
B:-New Classicals
C:-Orthodox Keynesians
D:-Neo-Classicals
Ans: A
14:-The insider-outsider models seek to explain
A:-Why workers need to be motivated and machines do not
B:-What forms the economic glue that keeps workers and firms together in the labour market
C:-That it is not in firms interest to lower real wages because real wages and worker effort are interdependent
D:-Why wage rigidity persists in the face of involuntary unemployment
Ans: D
15:-Euro dollar deposit in the Euro currency market means
A:-A time deposit denominated in dollar and made with a bank of United States
B:-A time deposit denominated in dollar but made with a bank outside the United States
C:-A time deposit in terms of both Euro and Dollar
D:-A shadow currency deposit for transaction between Europe and U.S.
Ans: B
16:-The main objective of the Targeted Public Distribution System (TPDS) introduced recently in India is
A:-To direct subsidy to the families of BPL
B:-To provide subsidies to both BPL and APL
C:-To widen the coverage of PDS
D:-Integration of PDS with open market
Ans: A
17:-For a square matrix A there exists an inverse only if
A:-A is symmetric
B:-A is skew symmetric
C:-A is singular
D:-A is non singular
Ans: D
18:-For the demand function X = ```27/P^(3)` , the elasticity of demand is
A:-```P^(2)`
B:-1
C:-3
D:-`````-27/P^(4)`
Ans: C
19:-For a highly heterogeneous population we use
A:-Stratified sampling
B:-Simple random sampling
C:-Cluster sampling
D:-Systematic sampling
Ans: A
20:-The two lines of regression are given as x + 2y — 5 = 0 and 2x + 3y = 8 then the mean values of x and y respectively are
A:-2, 1
B:-1, 2
C:-2, 5
D:-2, 3
Ans: B
21:-In the simultaneous tossing of two perfect dice, the probability of obtaining 4 as the sum of the resultant faces is
A:-`(4)/(12)`
B:-`(1)/12`
C:-`(3)/(12)`
D:-`(2)/(12)`
Ans: B
22:-Let Ø be an unknown parameter and `T_(1)` be an unbiased estimator of Ø. If Var (`T_(1)`)<Var (```T_(2)`), for `T_(2)` to be any other unbiased estimator, then `T_(1)` is known as
A:-Minimum variance unbiased estimator
B:-Unbiased and efficient estimator
C:-Consistent and efficient estimator
D:-Unbiased and consistent estimator
Ans: A
23:-While testing the significance of the difference of two sample means in case of small samples, we use
A:-`chi``^2` test
B:-F test
C:-T test
D:-Normal test
Ans: C
24:-A market with a single buyer is called
A:-Monopsony
B:-Monopoly
C:-Duopoly
D:-Duopsony
Ans: A
25:-The evaluative report of the economy being presented in the Parliament prior to the presentation of union budget by the Finance Minister
A:-Economic review
B:-Economic out look
C:-Economic survey
D:-Economic report
Ans: C
26:-Substitution effect is positive but income effect is negative for
A:-Luxury goods
B:-Free goods
C:-Exported goods
D:-Inferior goods
Ans: D
27:-According to inter temporal substitution model, workers will substitute work for leisure if
A:-There is unemployment in the market
B:-The increase in the wage rate is only temporary
C:-The marginal utility of work is equal to leisure
D:-None of these
Ans: B
28:-The stage theory of growth was postulated by
A:-W. W. Rostow
B:-Simon Kuznet
C:-Arthur Lewis
D:-H. O. Hirschman
Ans: A
29:-Laffer Curve is related to
A:-Multi firm equilibrium
B:-Supply side economics
C:-Break even analysis
D:-Disequilibrium in the labour market
Ans: B
30:-According to 2015 report, the global position of India in the consumption of oil is
A:-First
B:-Second
C:-Third
D:-Fourth
Ans: C
31:-The process of deriving economic generalizations on the basis of observations and experiences is called
A:-Deductive method
B:-Inductive method
C:-Abstract method
D:-Analytical method
Ans: B
32:-The book 'Value and Capital' has been authored by
A:-Karl Marx
B:-P. A. Samuelson
C:-E. E. Slutsky
D:-J. R. Hicks
Ans: D
33:-The revealed preference theory is based on the postulation of
A:-Weak ordering preference
B:-Strong ordering preference
C:-Indifferent preferences
D:-Indeterminate preferences
Ans: B
34:-In the production process a firm will shut down when the price falls below
A:-The average fixed cost
B:-The marginal cost
C:-The average variable cost
D:-The total cost
Ans: C
35:-When a monopolist is able to sell each separate unit of a product at a different price, a situation of
A:-Price discrimination of first degree exists
B:-Price discrimination of second degree exists
C:-Price discrimination of third degree exists
D:-None of the above
Ans: A
36:-In the kinked demand curve hypothesis, the segment of demand curve above the prevailing price is
A:-Highly inelastic
B:-Perfect inelastic
C:-Highly elastic
D:-Perfect elastic
Ans: C
37:-The speculative demand for money is an inverse function of
A:-Income
B:-Marginal propensity to consume
C:-Marginal efficiency of capital
D:-Rate of interest
Ans: D
38:-The constancy of labour share in the national income has been explained by Kalecki on the basis of
A:-The capitalist theory of distribution
B:-The monopoly theory of distribution
C:-The classical labour theory of value
D:-The Keynesian theory of national income
Ans: B
39:-The marginal conditions to be fulfilled for the attainment of Pareto optimality were given by
A:-V. Pareto
B:-H. Robertson
C:-P. A. Samuelson
D:-Lerner and Hicks
Ans: D
40:-Euler's product exhaustion theorem will be applied only in the case of production functions with
A:-Diminishing returns to scale
B:-Constant returns to scale
C:-Increasing returns to scale
D:-Variable returns to scale
Ans: B
41:-The fundamental assumption of Absolute Income Hypothesis is
A:-Consumption - Income relationship is reversible
B:-Consumption - Income relationship is irreversible
C:-Consumption - Income relationship is passive
D:-Consumption - Income relationship is indeterminate
Ans: A
42:-In the Fishers equation of exchange MV = PT, the variable 'V' stands for
A:-Value of money
B:-Velocity of circulation of money
C:-Volume of goods and services
D:-Value of goods and services
Ans: B
43:-The level of unemployment at which a constant rate of inflation may be maintained is called
A:-Mean rate of unemployment
B:-Actual rate of unemployment
C:-Warranted rate of unemployment
D:-Natural rate of unemployment
Ans: D
44:-Money that has no intrinsic value but established by a government decree is known as
A:-Fiat money
B:-Commodity money
C:-Plastic money
D:-Real money
Ans: A
45:-Money supply curve in the Keynesian analysis of liquidity preference is
A:-Vertical straight line
B:-Horizontal straight line
C:-Downward slopping curve
D:-None of the above
Ans: A
46:-The LM curve will shift to right when there is an
A:-Increase in the rate of saving
B:-Increase in the investment
C:-Increase in the money supply
D:-Increase in the public borrowings
Ans: C
47:-The basic proposition of the psychological law of consumption is that
A:-APC and MPC are equal
B:-APC is negative
C:-MPC is positive but less than unity
D:-MPC is always equal to one
Ans: C
48:-The relationship between unemployment and the rate of change in the wage rate, according to A. W. Phillips is
A:-Inverse and non-linear
B:-Direct and proportional
C:-Direct but non proportional
D:-Inverse but linear
Ans: A
49:-The expansion and contraction process in the business cycle model of Kaldaor is brought about by the
A:-Interaction between multiplier and accelerator
B:-Business expectations
C:-Stock of capital
D:-Technological shocks
Ans: C
50:-Monetarism postulates that
A:-Money is a substitute for a wide range of real and financial assets but no single asset is a close substitute for money
B:-A fiscal-monetary mix will bring about stabilities
C:-Fiscal policy is more effective in curbing inflation and generating full employment
D:-Money is neutral and insignificant
Ans: A
51:-The theory of vicious circle deals with
A:-Full employment
B:-Imperfect markets
C:-Poverty
D:-Inequality
Ans: C
52:-The marginal productivity of labour under the state of disguised unemployment is
A:-Equal to one
B:-Equal to zero
C:-Greater than one
D:-Equal or greater than one
Ans: B
53:-The theory of Economic development with unlimited supplies of labour argues for
A:-Promotion of DPA and SOC in the economy to absorb excess labour
B:-Improvement of agriculture to provide more employment
C:-Unlimited supply of labour at the current market wage
D:-Shifting of labour with zero marginal productivity from agriculture to industry
Ans: D
54:-The technique which provides numerical solution to the problem of making optimum in the context of given constraints
A:-Linear programming
B:-Shadow pricing
C:-The incremental capital-output ratio
D:-Choice of technique
Ans: A
55:-The term inside trading applies to
A:-Foreign trade market
B:-Domestic product market
C:-Factor market
D:-Share market
Ans: D
56:-In the model of Golden Age, equilibrium is attained when
A:-Growth rate of labour is equal to the growth rate of technology
B:-Incremental saving is equal to investment
C:-Rate of growth of capital is equal to the rate of growth of labour
D:-COR is equal to ICOR
Ans: C
57:-The knife edge equilibrium is attained at the point where
A:-Gn > Gw > G
B:-Gn = Gw
C:-G = Gn
D:-G = Gn = Gw
Ans: D
58:-P. C. Mahalanobis was the architect of
A:-First five year plan
B:-Second five year plan
C:-Third five year plan
D:-Fourth five year plan
Ans: B
59:-The Planning Commission has been replaced in India by
A:-Finance Commission
B:-Niti Aayog
C:-Council for Economic Development
D:-Indian Economic Forum
Ans: B
60:-The National Bank for Agriculture and Rural Development (NABARD) was established in the year
A:-1964
B:-1969
C:-1982
D:-1991
Ans: C
61:-The situation where a country simultaneously import and export the same product is called
A:-International reciprocal trade
B:-Internal reciprocal trade
C:-Factor reversal trade
D:-Intra-industry trade
Ans: D
62:-The phenomenon of Dutch Disease has been advanced to explain the existence of
A:-Traded goods sector in an economy
B:-Non traded goods sector in an economy
C:-Differentiated goods in an economy
D:-Identical goods sector in an economy
Ans: B
63:-Which of the following theory suggests that labour cost will be the determinant of trade and the country with the lower labour cost will be the exporter of that commodity ?
A:-Factor abundance theory
B:-Labour productivity theory
C:-Theory of comparative advantage
D:-Neo-Hotelling model
Ans: C
64:-The dead weight loss of tariff implies
A:-Production loss and consumption loss due to tariff
B:-Revenue loss for the exporting country
C:-Revenue loss for the importing country
D:-Redistribution of loss between exporting and importing countries
Ans: A
65:-The concepts of trade creation and trade diversion in the theory of customs union was introduced by
A:-Kemp and Wan
B:-J. N. Bhagwati
C:-Jacob Viner
D:-Geoffrey Reed
Ans: C
66:-The first United Nations Conference on Trade and Development (UNCTAD) was held in
A:-Tokyo
B:-Rio De Generio
C:-New York
D:-Geneva
Ans: D
67:-The investment in a foreign country where the investing party does not seek control over the investment is the typical case of
A:-Foreign direct investment
B:-Foreign portfolio investment
C:-Foreign tied fund
D:-Foreign untied fund
Ans: B
68:-The current account in the BOP records
A:-Exports and imports of goods and services and unilateral transfers
B:-Exports and imports of goods and services only
C:-Export of goods and portfolio investment
D:-All international transaction including private and official
Ans: A
69:-A floating exchange rate will be stable if
A:-An appreication of the domestic currency leads to an excess demand for the foreign currency
B:-A depreciation of the domestic currency leads to an excess demand for the foreign exchange
C:-An appreciation of the domestic currency leads to an excess supply of the foreign exchange
D:-None of the above
Ans: A
70:-The factor which enables both exporters and importers to protect against the risk of exchange rate fluctuation is
A:-Arbitrage
B:-Speculation
C:-Hedging
D:-Devaluation
Ans: C
71:-In the equation for consumption function C = a + bY, b means
A:-MPC
B:-MPS
C:-DPI
D:-Transfer payments
Ans: A
72:-Among the following, the excluded item from the currency component of money supply (`M_(1)` ) in India
A:-Circulation of rupee coins
B:-Circulation of small coins
C:-Demand deposit of the public
D:-Cash held by commercial banks
Ans: D
73:-The food grains production in India crossed 250 million tones for the first time during the year
A:-1990-91
B:-2001-02
C:-2008-09
D:-2011-12
Ans: D
A:-Deductive method
B:-Inductive method
C:-Abstract method
D:-Analytical method
Ans: B
32:-The book 'Value and Capital' has been authored by
A:-Karl Marx
B:-P. A. Samuelson
C:-E. E. Slutsky
D:-J. R. Hicks
Ans: D
33:-The revealed preference theory is based on the postulation of
A:-Weak ordering preference
B:-Strong ordering preference
C:-Indifferent preferences
D:-Indeterminate preferences
Ans: B
34:-In the production process a firm will shut down when the price falls below
A:-The average fixed cost
B:-The marginal cost
C:-The average variable cost
D:-The total cost
Ans: C
35:-When a monopolist is able to sell each separate unit of a product at a different price, a situation of
A:-Price discrimination of first degree exists
B:-Price discrimination of second degree exists
C:-Price discrimination of third degree exists
D:-None of the above
Ans: A
36:-In the kinked demand curve hypothesis, the segment of demand curve above the prevailing price is
A:-Highly inelastic
B:-Perfect inelastic
C:-Highly elastic
D:-Perfect elastic
Ans: C
37:-The speculative demand for money is an inverse function of
A:-Income
B:-Marginal propensity to consume
C:-Marginal efficiency of capital
D:-Rate of interest
Ans: D
38:-The constancy of labour share in the national income has been explained by Kalecki on the basis of
A:-The capitalist theory of distribution
B:-The monopoly theory of distribution
C:-The classical labour theory of value
D:-The Keynesian theory of national income
Ans: B
39:-The marginal conditions to be fulfilled for the attainment of Pareto optimality were given by
A:-V. Pareto
B:-H. Robertson
C:-P. A. Samuelson
D:-Lerner and Hicks
Ans: D
40:-Euler's product exhaustion theorem will be applied only in the case of production functions with
A:-Diminishing returns to scale
B:-Constant returns to scale
C:-Increasing returns to scale
D:-Variable returns to scale
Ans: B
41:-The fundamental assumption of Absolute Income Hypothesis is
A:-Consumption - Income relationship is reversible
B:-Consumption - Income relationship is irreversible
C:-Consumption - Income relationship is passive
D:-Consumption - Income relationship is indeterminate
Ans: A
42:-In the Fishers equation of exchange MV = PT, the variable 'V' stands for
A:-Value of money
B:-Velocity of circulation of money
C:-Volume of goods and services
D:-Value of goods and services
Ans: B
43:-The level of unemployment at which a constant rate of inflation may be maintained is called
A:-Mean rate of unemployment
B:-Actual rate of unemployment
C:-Warranted rate of unemployment
D:-Natural rate of unemployment
Ans: D
44:-Money that has no intrinsic value but established by a government decree is known as
A:-Fiat money
B:-Commodity money
C:-Plastic money
D:-Real money
Ans: A
45:-Money supply curve in the Keynesian analysis of liquidity preference is
A:-Vertical straight line
B:-Horizontal straight line
C:-Downward slopping curve
D:-None of the above
Ans: A
46:-The LM curve will shift to right when there is an
A:-Increase in the rate of saving
B:-Increase in the investment
C:-Increase in the money supply
D:-Increase in the public borrowings
Ans: C
47:-The basic proposition of the psychological law of consumption is that
A:-APC and MPC are equal
B:-APC is negative
C:-MPC is positive but less than unity
D:-MPC is always equal to one
Ans: C
48:-The relationship between unemployment and the rate of change in the wage rate, according to A. W. Phillips is
A:-Inverse and non-linear
B:-Direct and proportional
C:-Direct but non proportional
D:-Inverse but linear
Ans: A
49:-The expansion and contraction process in the business cycle model of Kaldaor is brought about by the
A:-Interaction between multiplier and accelerator
B:-Business expectations
C:-Stock of capital
D:-Technological shocks
Ans: C
50:-Monetarism postulates that
A:-Money is a substitute for a wide range of real and financial assets but no single asset is a close substitute for money
B:-A fiscal-monetary mix will bring about stabilities
C:-Fiscal policy is more effective in curbing inflation and generating full employment
D:-Money is neutral and insignificant
Ans: A
51:-The theory of vicious circle deals with
A:-Full employment
B:-Imperfect markets
C:-Poverty
D:-Inequality
Ans: C
52:-The marginal productivity of labour under the state of disguised unemployment is
A:-Equal to one
B:-Equal to zero
C:-Greater than one
D:-Equal or greater than one
Ans: B
53:-The theory of Economic development with unlimited supplies of labour argues for
A:-Promotion of DPA and SOC in the economy to absorb excess labour
B:-Improvement of agriculture to provide more employment
C:-Unlimited supply of labour at the current market wage
D:-Shifting of labour with zero marginal productivity from agriculture to industry
Ans: D
54:-The technique which provides numerical solution to the problem of making optimum in the context of given constraints
A:-Linear programming
B:-Shadow pricing
C:-The incremental capital-output ratio
D:-Choice of technique
Ans: A
55:-The term inside trading applies to
A:-Foreign trade market
B:-Domestic product market
C:-Factor market
D:-Share market
Ans: D
56:-In the model of Golden Age, equilibrium is attained when
A:-Growth rate of labour is equal to the growth rate of technology
B:-Incremental saving is equal to investment
C:-Rate of growth of capital is equal to the rate of growth of labour
D:-COR is equal to ICOR
Ans: C
57:-The knife edge equilibrium is attained at the point where
A:-Gn > Gw > G
B:-Gn = Gw
C:-G = Gn
D:-G = Gn = Gw
Ans: D
58:-P. C. Mahalanobis was the architect of
A:-First five year plan
B:-Second five year plan
C:-Third five year plan
D:-Fourth five year plan
Ans: B
59:-The Planning Commission has been replaced in India by
A:-Finance Commission
B:-Niti Aayog
C:-Council for Economic Development
D:-Indian Economic Forum
Ans: B
60:-The National Bank for Agriculture and Rural Development (NABARD) was established in the year
A:-1964
B:-1969
C:-1982
D:-1991
Ans: C
61:-The situation where a country simultaneously import and export the same product is called
A:-International reciprocal trade
B:-Internal reciprocal trade
C:-Factor reversal trade
D:-Intra-industry trade
Ans: D
62:-The phenomenon of Dutch Disease has been advanced to explain the existence of
A:-Traded goods sector in an economy
B:-Non traded goods sector in an economy
C:-Differentiated goods in an economy
D:-Identical goods sector in an economy
Ans: B
63:-Which of the following theory suggests that labour cost will be the determinant of trade and the country with the lower labour cost will be the exporter of that commodity ?
A:-Factor abundance theory
B:-Labour productivity theory
C:-Theory of comparative advantage
D:-Neo-Hotelling model
Ans: C
64:-The dead weight loss of tariff implies
A:-Production loss and consumption loss due to tariff
B:-Revenue loss for the exporting country
C:-Revenue loss for the importing country
D:-Redistribution of loss between exporting and importing countries
Ans: A
65:-The concepts of trade creation and trade diversion in the theory of customs union was introduced by
A:-Kemp and Wan
B:-J. N. Bhagwati
C:-Jacob Viner
D:-Geoffrey Reed
Ans: C
66:-The first United Nations Conference on Trade and Development (UNCTAD) was held in
A:-Tokyo
B:-Rio De Generio
C:-New York
D:-Geneva
Ans: D
67:-The investment in a foreign country where the investing party does not seek control over the investment is the typical case of
A:-Foreign direct investment
B:-Foreign portfolio investment
C:-Foreign tied fund
D:-Foreign untied fund
Ans: B
68:-The current account in the BOP records
A:-Exports and imports of goods and services and unilateral transfers
B:-Exports and imports of goods and services only
C:-Export of goods and portfolio investment
D:-All international transaction including private and official
Ans: A
69:-A floating exchange rate will be stable if
A:-An appreication of the domestic currency leads to an excess demand for the foreign currency
B:-A depreciation of the domestic currency leads to an excess demand for the foreign exchange
C:-An appreciation of the domestic currency leads to an excess supply of the foreign exchange
D:-None of the above
Ans: A
70:-The factor which enables both exporters and importers to protect against the risk of exchange rate fluctuation is
A:-Arbitrage
B:-Speculation
C:-Hedging
D:-Devaluation
Ans: C
71:-In the equation for consumption function C = a + bY, b means
A:-MPC
B:-MPS
C:-DPI
D:-Transfer payments
Ans: A
72:-Among the following, the excluded item from the currency component of money supply (`M_(1)` ) in India
A:-Circulation of rupee coins
B:-Circulation of small coins
C:-Demand deposit of the public
D:-Cash held by commercial banks
Ans: D
73:-The food grains production in India crossed 250 million tones for the first time during the year
A:-1990-91
B:-2001-02
C:-2008-09
D:-2011-12
Ans: D
74. Consider the following statements in relation to Karl Marx’s theory of profit rate :
I. Profit rate depends directly on the value of organic composition of capital.
II. Profit rate depends directly on the value of rate of exploitation.
Which of the above statements are correct ?
Answer from the codes below :
Codes :
(1) Both I and II are true.
(2) Neither I nor II are true.
(3) Only I is correct.
(4) Only II is correct.
Ans: 4
75. Which among the following is not correctly matched ?
Economist Theme
(1) Adam Smith – Extent of Market
(2) J.B. Say – Balance in Supply and Demand
(3) T.R. Malthus – State of over production
(4) D. Ricardo – Modernization of Agriculture
Ans: 4
76. Which of the following statements are true for the Triangle model ?
I. It is a model developed by New Keynesian economists.
II. It includes built-in inflation in the analysis.
Which of the above statement(s) is/are true ? Answer from the codes below :
Codes :
(1) I and II (2) None
(3) Only I (4) Only II
Ans: 1
77. With reference to Asian Development Bank, consider the following statements :
I. United States has the largest proportion of shares in the voting system.
II. China and India have the same percentage of shares for the voting system.
Which of the statement(s) given above is/are correct ?
Codes :
(1) Only I (2) Only II
(3) Both I and II (4) Neither I nor II
Ans: 4
78. Which among the following will constitute Foreign Direct Investment (FDI) ?
(1) Buying a company in the target country.
(2) Expanding operations of an existing business in that country.
(3) Investing in the shares and stocks of companies in the capital market.
(4) Both (1) and (2).
Ans: 4
79. Which of the areas given below is/are mainly funded by the International Development Agency in the developing countries ?
I. Infrastructure
II. Education
III. Environment friendly projects
IV. Health care
Select the correct answer using the codes given below :
Codes :
(1) I, II and IV (2) I, II and III
(3) I, III and IV (4) All of the above.
Ans: 1
80. When two or more countries enter into an agreement to eliminate import quota and tariffs and promote trade among themselves, such a group of countries are said to form a
(1) Free Trade Area (2) Custom Union
(3) A Common Market (4) Both (2) and (3)
Ans: 1
81. Which among the following is/are true for Real Effective Exchange Rate of the currency of a country ?
(1) It is weighted average of the value of traded currencies.
(2) It is adjusted for inflation rate of prices.
(3) It is not adjusted for inflation of prices.
(4) Both (1) and (2) are true.
Ans: 4
82. During the episode of sustained fall in crude oil prices during the year 2015, which among the following best describes the pricing strategy of the OPEC countries ?
(1) Transfer pricing (2) Predatory pricing
(3) Defensive pricing (4) Profit maximising prices
Ans: 3
83. Which of the following statement(s) is/are true for the gravity model to explain trade ?
I. It is used in the bilateral context.
II. It was developed by Jan Tinbergen in 1962.
III. It takes into account the distance among the trading nations.
Select the correct answer from the code below :
Codes :
(1) II and III are true. (2) Only I and III are true.
(3) Only II is true. (4) All the three above are true.
Ans: 4
84. If the offer curves of the trading countries have constant slope, the terms of trade among them will be
(1) constant (2) decreasing
(3) increasing (4) indeterminate
Ans: 4
85. In the context of the Indian economy, which of the following options correctly describe the composition of the foreign exchange resources ?
(1) Foreign currency + loans from the World Bank + SDRs + Gold holdings of R.B.I.
(2) Foreign Currency Assets + Gold holdings of R.B.I. + F.D.I.
(3) SDRs + Gold holdings of the R.B.I. + Foreign Currency Assets.
(4) Remittances of NRIs + Exports earnings in a year + loans from the IMF.
Ans: 3
86. Which among the following are true for excess demand function for an individual ?
(1) Homogenous of degree zero in all prices.
(2) These obey Walra’s law.
(3) Both (1) and (2) are true.
(4) Neither (1) nor (2) are true.
Ans: 3
87. A firm will be of optimum size when
(1) Marginal cost is at a minimum.
(2) Average cost is at a minimum.
(3) Marginal cost is equal to marginal revenue.
(4) The firm maximises its output.
Ans: 2
I. Profit rate depends directly on the value of organic composition of capital.
II. Profit rate depends directly on the value of rate of exploitation.
Which of the above statements are correct ?
Answer from the codes below :
Codes :
(1) Both I and II are true.
(2) Neither I nor II are true.
(3) Only I is correct.
(4) Only II is correct.
Ans: 4
75. Which among the following is not correctly matched ?
Economist Theme
(1) Adam Smith – Extent of Market
(2) J.B. Say – Balance in Supply and Demand
(3) T.R. Malthus – State of over production
(4) D. Ricardo – Modernization of Agriculture
Ans: 4
76. Which of the following statements are true for the Triangle model ?
I. It is a model developed by New Keynesian economists.
II. It includes built-in inflation in the analysis.
Which of the above statement(s) is/are true ? Answer from the codes below :
Codes :
(1) I and II (2) None
(3) Only I (4) Only II
Ans: 1
77. With reference to Asian Development Bank, consider the following statements :
I. United States has the largest proportion of shares in the voting system.
II. China and India have the same percentage of shares for the voting system.
Which of the statement(s) given above is/are correct ?
Codes :
(1) Only I (2) Only II
(3) Both I and II (4) Neither I nor II
Ans: 4
78. Which among the following will constitute Foreign Direct Investment (FDI) ?
(1) Buying a company in the target country.
(2) Expanding operations of an existing business in that country.
(3) Investing in the shares and stocks of companies in the capital market.
(4) Both (1) and (2).
Ans: 4
79. Which of the areas given below is/are mainly funded by the International Development Agency in the developing countries ?
I. Infrastructure
II. Education
III. Environment friendly projects
IV. Health care
Select the correct answer using the codes given below :
Codes :
(1) I, II and IV (2) I, II and III
(3) I, III and IV (4) All of the above.
Ans: 1
80. When two or more countries enter into an agreement to eliminate import quota and tariffs and promote trade among themselves, such a group of countries are said to form a
(1) Free Trade Area (2) Custom Union
(3) A Common Market (4) Both (2) and (3)
Ans: 1
81. Which among the following is/are true for Real Effective Exchange Rate of the currency of a country ?
(1) It is weighted average of the value of traded currencies.
(2) It is adjusted for inflation rate of prices.
(3) It is not adjusted for inflation of prices.
(4) Both (1) and (2) are true.
Ans: 4
82. During the episode of sustained fall in crude oil prices during the year 2015, which among the following best describes the pricing strategy of the OPEC countries ?
(1) Transfer pricing (2) Predatory pricing
(3) Defensive pricing (4) Profit maximising prices
Ans: 3
83. Which of the following statement(s) is/are true for the gravity model to explain trade ?
I. It is used in the bilateral context.
II. It was developed by Jan Tinbergen in 1962.
III. It takes into account the distance among the trading nations.
Select the correct answer from the code below :
Codes :
(1) II and III are true. (2) Only I and III are true.
(3) Only II is true. (4) All the three above are true.
Ans: 4
84. If the offer curves of the trading countries have constant slope, the terms of trade among them will be
(1) constant (2) decreasing
(3) increasing (4) indeterminate
Ans: 4
85. In the context of the Indian economy, which of the following options correctly describe the composition of the foreign exchange resources ?
(1) Foreign currency + loans from the World Bank + SDRs + Gold holdings of R.B.I.
(2) Foreign Currency Assets + Gold holdings of R.B.I. + F.D.I.
(3) SDRs + Gold holdings of the R.B.I. + Foreign Currency Assets.
(4) Remittances of NRIs + Exports earnings in a year + loans from the IMF.
Ans: 3
86. Which among the following are true for excess demand function for an individual ?
(1) Homogenous of degree zero in all prices.
(2) These obey Walra’s law.
(3) Both (1) and (2) are true.
(4) Neither (1) nor (2) are true.
Ans: 3
87. A firm will be of optimum size when
(1) Marginal cost is at a minimum.
(2) Average cost is at a minimum.
(3) Marginal cost is equal to marginal revenue.
(4) The firm maximises its output.
Ans: 2
88. For the Harrod’s model of growth, which among the following production functions best matches with the assumptions of the model ?
(1) Leontief production function
(2) Homogeneous production function
(3) C.E.S. production function
(4) Well-behaved production function
Ans: 1
89. New Keynesian economics challenges which among the following schools of thought regarding the full adaptability of a policy change on the part of economic agents ?
(1) New classical economics (2) Neo Keynesians
(3) Monetarists (4) Both (1) and (2) above
Ans: 1
90. Who among the following developed the ‘Wage-goods model’ of planning ?
(1) A.K. Sen (2) P.C. Mahalanobis
(3) R. Nurkse (4) C.N. Vakil and P.R. Brahmanand
Ans: 4
91. A key property of A.K. model is
(1) absence of diminishing returns with respect to capital.
(2) a sustained dose of autonomous investment.
(3) a command economic system.
(4) a high probability of the poorer economies to catch up with the developed economies.
Ans: 1
92. In Pasinetti’s model of growth the interplay among which variables is crucial ?
(1) Profit rate, Economic growth, Savings.
(2) Profit rate, Distribution of income and economic growth.
(3) Profit rate, autonomous investment and economic growth.
(4) Savings, Investment and technology.
Ans: 2
93. The time preference theory of interest was developed by
(1) Wicksell (2) Böhm-Bawerk
(3) Irving Fisher (4) J.M. Keynes
Ans: 3
94. Which of the following statements is/are true for Arrow-Debreu model of general equilibrium ?
(1) Goods are identified where they are to be delivered.
(2) Goods are identified when they are to be delivered.
(3) Both (1) and (2)
(4) None of these
Ans: 3
95. If Sales tax on a commodity is raised, but the revenue earned through its sale decreases sharply, which one of the following statements about the nature of this commodity would be correct ?
(1) Price elasticity of demand for it is unity.
(2) It must be an essential goods.
(3) Price elasticity of demand for it is high.
(1) Leontief production function
(2) Homogeneous production function
(3) C.E.S. production function
(4) Well-behaved production function
Ans: 1
89. New Keynesian economics challenges which among the following schools of thought regarding the full adaptability of a policy change on the part of economic agents ?
(1) New classical economics (2) Neo Keynesians
(3) Monetarists (4) Both (1) and (2) above
Ans: 1
90. Who among the following developed the ‘Wage-goods model’ of planning ?
(1) A.K. Sen (2) P.C. Mahalanobis
(3) R. Nurkse (4) C.N. Vakil and P.R. Brahmanand
Ans: 4
91. A key property of A.K. model is
(1) absence of diminishing returns with respect to capital.
(2) a sustained dose of autonomous investment.
(3) a command economic system.
(4) a high probability of the poorer economies to catch up with the developed economies.
Ans: 1
92. In Pasinetti’s model of growth the interplay among which variables is crucial ?
(1) Profit rate, Economic growth, Savings.
(2) Profit rate, Distribution of income and economic growth.
(3) Profit rate, autonomous investment and economic growth.
(4) Savings, Investment and technology.
Ans: 2
93. The time preference theory of interest was developed by
(1) Wicksell (2) Böhm-Bawerk
(3) Irving Fisher (4) J.M. Keynes
Ans: 3
94. Which of the following statements is/are true for Arrow-Debreu model of general equilibrium ?
(1) Goods are identified where they are to be delivered.
(2) Goods are identified when they are to be delivered.
(3) Both (1) and (2)
(4) None of these
Ans: 3
95. If Sales tax on a commodity is raised, but the revenue earned through its sale decreases sharply, which one of the following statements about the nature of this commodity would be correct ?
(1) Price elasticity of demand for it is unity.
(2) It must be an essential goods.
(3) Price elasticity of demand for it is high.
96. If Sales tax on a commodity is raised, but the revenue earned through its sale decreases sharply, which one of the following statements about the nature of this commodity would be correct ?
(1) Price elasticity of demand for it is unity.
(2) It must be an essential goods.
(3) Price elasticity of demand for it is high.
(4) Price elasticity of demand for it is low.
(4) Price elasticity of demand for it is low.
Ans: 3
97. One of the essential conditions of monopolistic competition is
(1) Homogeneous product (2) Product differentiation
(3) Price discrimination (4) Many buyers but one seller
Ans: 2
98. Logical extension of Cournot model is
(1) Bertrand model (2) Stackelberg model
(3) Sweezy model (4) None of the above
Ans: 2
99. Minimum support prices for Agricultural Commodities are fixed after taking into account the recommendations of which of the following bodies ?
(1) Ministry of Agriculture
(2) Ministry of Food Processing
(3) NITI AAYOG
(4) Commission for Agricultural Costs & Prices (CACP)
Ans: 4
100. Diversification of agriculture implies
(1) Increase in the cropping intensity.
(2) Shifting labour from agriculture to other areas.
(3) Promoting cottage and village industries.
(4) Changing the cropping pattern in favour of horticulture and floriculture crops.
Ans: 4
(1) Price elasticity of demand for it is unity.
(2) It must be an essential goods.
(3) Price elasticity of demand for it is high.
(4) Price elasticity of demand for it is low.
(4) Price elasticity of demand for it is low.
Ans: 3
97. One of the essential conditions of monopolistic competition is
(1) Homogeneous product (2) Product differentiation
(3) Price discrimination (4) Many buyers but one seller
Ans: 2
98. Logical extension of Cournot model is
(1) Bertrand model (2) Stackelberg model
(3) Sweezy model (4) None of the above
Ans: 2
99. Minimum support prices for Agricultural Commodities are fixed after taking into account the recommendations of which of the following bodies ?
(1) Ministry of Agriculture
(2) Ministry of Food Processing
(3) NITI AAYOG
(4) Commission for Agricultural Costs & Prices (CACP)
Ans: 4
100. Diversification of agriculture implies
(1) Increase in the cropping intensity.
(2) Shifting labour from agriculture to other areas.
(3) Promoting cottage and village industries.
(4) Changing the cropping pattern in favour of horticulture and floriculture crops.
Ans: 4