ECONOMICS- PAGE 6
1. Which is called Gossen’s second law ?
(A) Law of Equi-marginal Utility
(B) Law of Diminishing Marginal Utility
(C) Revealed Preference Theory
(D) Indifference Curve Approach
Ans: A
2. When a consumer is in equilibrium, MRSXY is 2.5. If the price of commodity Y is 16, then what will be the price of commodity X ?
(A) 40 (B) 6.4
(C) 23.2 (D) 24
Ans: A
3. Which of the conditions support long run equilibrium in monopolistic competition ?
(A) MR = MC, AR = AC
(B) P = MC, AR = AC
(C) MR = MC = AR = AC
(D) AR = MC = AC
Ans: A
4. Who explained importance of time element in price determination, for the first time ?
(A) Chamberlin (B) Stigler
(C) Mrs. Joan Robinson (D) Marshall
Ans: D
5. Law of diminishing returns begins to operate when :
(A) Total product begins to rise.
(B) Total product begins to fall.
(C) Marginal product begins to rise.
(D) Marginal product begins to fall.
Ans: D
6. Consider the following statements regarding Edgeworth Duopoly model :
I. It takes as given output decision of rival.
II. It takes as given price decision of rival.
III. It is an explanation of price rigidity.
Of these, the correct answer is :
(A) Only Statement I is true. (B) Both I & II are true.
(C) Both II & III are true. (D) Only III is true.
Ans: A
7. Public goods are characterised by
1. Collective consumption 2. Divisibility
3. Non-exclusion 4. Rival consumption
Select the correct answer from the code given below :
Codes :
(A) 1 & 2 are correct. (B) 1 & 3 are correct.
(C) 1 & 4 are correct. (D) 2 & 4 are correct.
Ans: B
8. Among the following what causes market failure ?
1. Externality
2. Asymmetry of information
3. Perfect competition
Choose the correct answer from the code given below :
Codes :
(A) 1, 2 & 3 are correct. (B) Only 1 is correct.
(C) 1 & 2 are correct. (D) 2 & 3 are correct.
Ans: C
9. Assuming wage-price flexibility, the classical economists asserted that a decline in money wages and price would lead to
(A) Unemployment
(B) Deflation
(C) High level of employment and output
(D) Unemployment and decline in output
Ans: C
10. The classical theory of interest postulates that both savings and investments are a function of
(A) the level of National income
(B) the level of employment and output
(C) monetary and fiscal policy
(D) rate of interest
Ans: D
11. The relative income hypothesis of Duesenberry suggests that as income increases, consumption function curve shifts above and therefore,
(A) Average propensity to consume rises.
(B) Average propensity to consume falls.
(C) Average propensity to consume remains constant.
(D) Average propensity to consume is equal to 1.
Ans: C
12. Who among the following said, “Inflation is everywhere and always a monetary phenomenon” ?
(A) James Tobin (B) John M. Keynes
(C) Milton Friedman (D) Anna J. Schwartz
Ans: C
13. Accelerator is most closely related to
(A) interest rate (B) inventories
(C) idle capacity (D) induced investment
Ans: D
14. Match List – I and List – II and select the correct answer from the codes given below :
List – I Concept
List – II Economist
a. Liquidity trap 1. Milton Friedman
b. Demonstration Effect 2. A.C. Pigou
c. Permanent Income Hypothesis 3. J. Duesenberry
d. Wealth Effect 4. J.M. Keynes
Codes :
a b c d
(A) 4 3 1 2
(B) 1 2 4 3
(C) 4 2 1 3
(D) 1 3 4 2
Ans: A
15. Which one of the following would be inconsistent with the Keynesian view about the effectiveness of monetary policy ?
(A) Velocity of money is relatively stable.
(B) The demand for money is unstable.
(C) The demand for money is interest sensitive.
(D) Investment demand is unstable.
Ans: C
16. Which of the following statement is true ?
(A) Sporadic dumping is selling of goods at a low price in the foreign market to get rid of the inventory stocks.
(B) Predatory dumping is destroying of competitors even at a loss initially and then, after eliminating of competitors, selling product at a high price.
(C) Persistent dumping is selling a product at a lower price in foreign markets due to differences in elasticity of demand at home and in the foreign market.
(D) All the above.
Ans: D
17. According to Comparative Advantage Theory, International Trade will not take place if
(A) one country is efficient in the production of both the products.
(B) one country is inefficient in the production of both the products.
(C) opportunity costs of the two products are same in both the countries.
(D) None of the above.
Ans: C
18. Imposition of tariff will lead to
(A) Deterioration in terms of trade (B) Improvement in terms of trade
(C) No effect on terms of trade (D) None of the above
Ans: B
19. Under a freely exchange rate system, a deficit in a Nation’s Balance of Payments Account is automatically corrected by
(A) a depreciation of its currency
(B) an appreciation of its currency
(C) domestic inflation
(D) deflation and rise in National income
Ans: A
20. Maastricht Treaty led to the creation of which one of the following ?
(A) European Parliament (B) Euro
(C) European Court of Justice (D) European Union
Ans: D
21. Assertion (A) : According to Mundell, “Imbalances in the balance of payments is caused by initial differences in unit factor costs.”
Reason (R) : Free movement of goods will correct the imbalance in the balance of payments of two countries.
In the context of the two statements, which one of the following is correct ?
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true and (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: C
22. The Stolper-Samuelson theorem postulates that the imposition of a tariff by a nation causes the real income of the nation’s
(A) abundant factor to rise (B) scarce factor to rise
(C) scarce factor to fall (D) both (A) & (B) are possible
Ans: B
23. What is perspective planning ?
(A) Overall appraisal of planning.
(B) Review of planning in different fields.
(C) Taking up past experience and reviewing the future in that light.
(D) Planning for future so as to meet the long term requirement of development in the country.
Ans: D
24. Who formulated the ‘People’s Plan’ for India in 1944 ?
(A) J.L. Nehru (B) M.N. Roy
(C) Subhas Chandra Bose (D) Mahatma Gandhi
Ans: B
25. “Trickle down” strategy implies
(A) growing GNP taking care of poverty.
(B) reduction in the income of the upper class by deliberate redistribution.
(C) direct achievement of better nourishment, health, education, etc. instead of growth of GNP first.
(D) to target a particular sector of economy for betterment.
Ans: A
26. What is the correct sequence of the following approaches to development in terms of their chronological emergency ?
1. Basic needs approach
2. Per capita income approach
3. Human Development Index approach
Choose the correct answer from the codes given below :
Codes :
(A) 1, 2, 3 (B) 2, 1, 3
(C) 2, 3, 1 (D) 1, 3, 2
Ans: B
27. Choose the correct statements for economic development and answer from the code below :
Statements : I. Continuous process
II. Short-term process
III. Long-term process
Codes :
(A) II only (B) I and III
(C) III only (D) I and II
Ans: B
28. Which of the following economists are proponents of dependency theory of development ?
Choose from the code below :
I. Ragnar Nurkse II. Andre Gunther Frank
III. Raul Prebisch IV. John Kenneth Galbraith
Codes :
(A) I, II and III are correct. (B) II and III are correct.
(C) II, III and IV are correct. (D) III and IV are correct.
Ans: B
29. What is true for neo-classical growth models ?
I. Rate of interest and profit are flexible.
II. Capital is heterogeneous.
III. Perfect competition prevails.
IV. Capital and labour are substitutable.
Choose the correct answer from the codes given below :
Codes :
(A) Only I, II and III are true.
(B) Only II and III are true.
(C) Only I, III and IV are true.
(D) All the above are true.
Ans: C
30. Choose the top three trading partners of India in 2013-14 :
I. UAE II. Korea
III. China IV. USA
Choose the correct answer from codes given below :
Codes :
(A) I, II, III (B) II, III, IV
(C) I, III, IV (D) II, I, IV
Ans: C
31. Of the following, which combination of two deficits is most significant for the Indian economy ?
(A) Fiscal deficit and Revenue deficit
(B) Revenue deficit and Primary deficit
(C) Budget deficit and Fiscal deficit
(D) Current Account deficit and Fiscal deficit
Ans: D
32. Of the following, which sector witnessed the highest growth rate in year 2013-14 ?
(A) Agriculture, forestry and fishery
(B) Mining and quarrying
(C) Manufacturing
(D) Construction
Ans: A
33. Who has advocated the concept of PURA (Providing Urban Amenities in Rural Areas) for our country ?
(A) A.P.J. Abdul Kalam (B) Manmohan Singh
(C) Charan Singh (D) None of the above
Ans: A
34. ECOMARC is a symbol related to
(A) Export Goods (B) Import Goods
(C) Goods Safe for Environment (D) Best Quality Goods
Ans: C
35. Arrange following countries as per their HDI rank in the descending order (on the basis of 2013, UNDP Report on Human Development) :
1. Vietnam 2. China
3. India 4. Sri Lanka
Choose the correct answer from the codes given below :
Codes :
(A) 4, 2, 1, 3 (B) 2, 1, 4, 3
(C) 2, 4, 3, 1 (D) 1, 2, 3, 4
Ans: A
36. Consider the following export groups from India for the year 2013-14 :
1. Agri. and allied products
2. Engineering goods
3. Gems and Jewellery
4. Textile and Readymade Garments
Arrange them in descending order of magnitude as a percent to total exports.
(A) 2, 1, 4, 3 (B) 2, 1, 3, 4
(C) 4, 2, 1, 3 (D) 3, 4, 2, 1
Ans: B
37. Techniques used to encourage the production and consumption of goods that generate positive externalities are referred to as
(A) Tax incentives and vouchers (B) Fees and fines
(C) Taxes and charges (D) Special assessment
Ans: A
38. Which of the canons of taxations have been propounded by Adam Smith ?
(A) Economy, Elasticity, Simplicity and Sufficiency
(B) Equity, Certainty, Convenience and Economy
(C) Certainty, Convenience, Economy and Elasticity
(D) Economy, Coordination, Convenience and Expediency
Ans: B
39. Displacement effect explained in Peacock-Wiseman hypothesis implies :
(A) An upward displacement of public expenditure according to higher economic growth
(B) The movement from older level of public expenditure and taxation to a newer and higher level
(C) Public expenditure increases at steady rate and reaches higher level
(D) Government undertakes more and more newer activities and hence public expenditure rises steeply upwards
Ans: B
40. The most important characteristic of a federation is :
(A) Perfect match between the functions and resources of the Central and State Governments
(B) Non-correspondence between the functions and resources of the Central and State Governments
(C) Centre’s supremacy over the States
(D) None of the above
Ans: B
41. Fiscal consolidation at the Centre can be achieved by :
(A) Rationalization of major subsidies alone
(B) Reducing the defence expenditure only
(C) Raising the tax-GDP ratio and rationalisation of subsidies
(D) Minimising the Central assistance to the States
Ans: C
42. Arrange the following Reports in chronological order :
I. Direct Taxes Enquiry Committee, Final Report
II. Final Report on Rationalising and Simplifications of the Tax Structure
III. Indian Tax Reforms – Report of a Survey
IV. Taxation Enquiry Commission
Choose the correct answer from the codes given below :
Codes :
(A) IV, III, II, I (B) I, II, III, IV
(C) III, I, IV, II (D) II, III, I, IV
Ans: A
43. Identify correctly the taxes in State List (List – II) of the Constitution of India :
I. Taxes on mineral rights
II. Taxes on luxuries
III. Rates of stamp duty in respect of bills of exchange, cheques and promissory notes
IV. Excise duties on tobacco
Choose the right answer from the codes given below :
Codes :
(A) I and III are correct. (B) I and II are correct.
(C) I, III and IV are correct. (D) II, III and IV are correct.
Ans: B
44. Lump sum grant means :
(A) A grant whose amount is sufficient to meet the expenditure.
(B) A matching and conditional grant.
(C) Grant given for a special purpose and it can be utilised only for that purpose.
(D) A grant whose amount is not dependent on any matching effort of the recipient.
Ans: D
45. Geometric mean of Laspeyre’s and Paasche’s indices provides :
(A) Marshall-Edgeworth Index (B) Bowley’s Index
(C) Fisher’s Index (D) Kelley’s Index
Ans: C
46. Assertion (A) : Moving averages method can be used to estimate trend in time series.
Reasoning (R) : Moving averages is a device to smoothen the fluctuations in time series.
Choose the correct answer from the codes given below :
Codes :
(A) Both (A) and (R) are correct and (R) is a correct explanation of (A).
(B) Both (A) and (R) are correct, but (R) is not a correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (R) is correct, but (A) is incorrect.
Ans: A
47. Which one of the following denotes the power of the Test ? [α is probability of Type I error and β is probability of Type II error]
(A) α (B) β
(C) 1 – α (D) 1 – β
Ans: D
48. In a frequency distribution the standard deviation of which is 15.8, the value of median is more than mean by 4, what will be its coefficient of skewness ?
(A) – 0.76 (B) + 0.76
(C) – 0.86 (D) + 0.86
Ans: A
49. Three coins are tossed simultaneously. What is the probability that they will fall 2 heads and 1 tail ?
(A) 1/2
(B) 1/4
(C) 3/4
(D) 3/8
Ans: D
50. In a frequency distribution if each item is multiplied by 5, the coefficient of variation will remain
(A) unchanged (B) will be multiplied by 5
(C) will be multiplied by 25 (D) will be multiplied by 1/5
Ans: A
(A) Law of Equi-marginal Utility
(B) Law of Diminishing Marginal Utility
(C) Revealed Preference Theory
(D) Indifference Curve Approach
Ans: A
2. When a consumer is in equilibrium, MRSXY is 2.5. If the price of commodity Y is 16, then what will be the price of commodity X ?
(A) 40 (B) 6.4
(C) 23.2 (D) 24
Ans: A
3. Which of the conditions support long run equilibrium in monopolistic competition ?
(A) MR = MC, AR = AC
(B) P = MC, AR = AC
(C) MR = MC = AR = AC
(D) AR = MC = AC
Ans: A
4. Who explained importance of time element in price determination, for the first time ?
(A) Chamberlin (B) Stigler
(C) Mrs. Joan Robinson (D) Marshall
Ans: D
5. Law of diminishing returns begins to operate when :
(A) Total product begins to rise.
(B) Total product begins to fall.
(C) Marginal product begins to rise.
(D) Marginal product begins to fall.
Ans: D
6. Consider the following statements regarding Edgeworth Duopoly model :
I. It takes as given output decision of rival.
II. It takes as given price decision of rival.
III. It is an explanation of price rigidity.
Of these, the correct answer is :
(A) Only Statement I is true. (B) Both I & II are true.
(C) Both II & III are true. (D) Only III is true.
Ans: A
7. Public goods are characterised by
1. Collective consumption 2. Divisibility
3. Non-exclusion 4. Rival consumption
Select the correct answer from the code given below :
Codes :
(A) 1 & 2 are correct. (B) 1 & 3 are correct.
(C) 1 & 4 are correct. (D) 2 & 4 are correct.
Ans: B
8. Among the following what causes market failure ?
1. Externality
2. Asymmetry of information
3. Perfect competition
Choose the correct answer from the code given below :
Codes :
(A) 1, 2 & 3 are correct. (B) Only 1 is correct.
(C) 1 & 2 are correct. (D) 2 & 3 are correct.
Ans: C
9. Assuming wage-price flexibility, the classical economists asserted that a decline in money wages and price would lead to
(A) Unemployment
(B) Deflation
(C) High level of employment and output
(D) Unemployment and decline in output
Ans: C
10. The classical theory of interest postulates that both savings and investments are a function of
(A) the level of National income
(B) the level of employment and output
(C) monetary and fiscal policy
(D) rate of interest
Ans: D
11. The relative income hypothesis of Duesenberry suggests that as income increases, consumption function curve shifts above and therefore,
(A) Average propensity to consume rises.
(B) Average propensity to consume falls.
(C) Average propensity to consume remains constant.
(D) Average propensity to consume is equal to 1.
Ans: C
12. Who among the following said, “Inflation is everywhere and always a monetary phenomenon” ?
(A) James Tobin (B) John M. Keynes
(C) Milton Friedman (D) Anna J. Schwartz
Ans: C
13. Accelerator is most closely related to
(A) interest rate (B) inventories
(C) idle capacity (D) induced investment
Ans: D
14. Match List – I and List – II and select the correct answer from the codes given below :
List – I Concept
List – II Economist
a. Liquidity trap 1. Milton Friedman
b. Demonstration Effect 2. A.C. Pigou
c. Permanent Income Hypothesis 3. J. Duesenberry
d. Wealth Effect 4. J.M. Keynes
Codes :
a b c d
(A) 4 3 1 2
(B) 1 2 4 3
(C) 4 2 1 3
(D) 1 3 4 2
Ans: A
15. Which one of the following would be inconsistent with the Keynesian view about the effectiveness of monetary policy ?
(A) Velocity of money is relatively stable.
(B) The demand for money is unstable.
(C) The demand for money is interest sensitive.
(D) Investment demand is unstable.
Ans: C
16. Which of the following statement is true ?
(A) Sporadic dumping is selling of goods at a low price in the foreign market to get rid of the inventory stocks.
(B) Predatory dumping is destroying of competitors even at a loss initially and then, after eliminating of competitors, selling product at a high price.
(C) Persistent dumping is selling a product at a lower price in foreign markets due to differences in elasticity of demand at home and in the foreign market.
(D) All the above.
Ans: D
17. According to Comparative Advantage Theory, International Trade will not take place if
(A) one country is efficient in the production of both the products.
(B) one country is inefficient in the production of both the products.
(C) opportunity costs of the two products are same in both the countries.
(D) None of the above.
Ans: C
18. Imposition of tariff will lead to
(A) Deterioration in terms of trade (B) Improvement in terms of trade
(C) No effect on terms of trade (D) None of the above
Ans: B
19. Under a freely exchange rate system, a deficit in a Nation’s Balance of Payments Account is automatically corrected by
(A) a depreciation of its currency
(B) an appreciation of its currency
(C) domestic inflation
(D) deflation and rise in National income
Ans: A
20. Maastricht Treaty led to the creation of which one of the following ?
(A) European Parliament (B) Euro
(C) European Court of Justice (D) European Union
Ans: D
21. Assertion (A) : According to Mundell, “Imbalances in the balance of payments is caused by initial differences in unit factor costs.”
Reason (R) : Free movement of goods will correct the imbalance in the balance of payments of two countries.
In the context of the two statements, which one of the following is correct ?
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true and (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: C
22. The Stolper-Samuelson theorem postulates that the imposition of a tariff by a nation causes the real income of the nation’s
(A) abundant factor to rise (B) scarce factor to rise
(C) scarce factor to fall (D) both (A) & (B) are possible
Ans: B
23. What is perspective planning ?
(A) Overall appraisal of planning.
(B) Review of planning in different fields.
(C) Taking up past experience and reviewing the future in that light.
(D) Planning for future so as to meet the long term requirement of development in the country.
Ans: D
24. Who formulated the ‘People’s Plan’ for India in 1944 ?
(A) J.L. Nehru (B) M.N. Roy
(C) Subhas Chandra Bose (D) Mahatma Gandhi
Ans: B
25. “Trickle down” strategy implies
(A) growing GNP taking care of poverty.
(B) reduction in the income of the upper class by deliberate redistribution.
(C) direct achievement of better nourishment, health, education, etc. instead of growth of GNP first.
(D) to target a particular sector of economy for betterment.
Ans: A
26. What is the correct sequence of the following approaches to development in terms of their chronological emergency ?
1. Basic needs approach
2. Per capita income approach
3. Human Development Index approach
Choose the correct answer from the codes given below :
Codes :
(A) 1, 2, 3 (B) 2, 1, 3
(C) 2, 3, 1 (D) 1, 3, 2
Ans: B
27. Choose the correct statements for economic development and answer from the code below :
Statements : I. Continuous process
II. Short-term process
III. Long-term process
Codes :
(A) II only (B) I and III
(C) III only (D) I and II
Ans: B
28. Which of the following economists are proponents of dependency theory of development ?
Choose from the code below :
I. Ragnar Nurkse II. Andre Gunther Frank
III. Raul Prebisch IV. John Kenneth Galbraith
Codes :
(A) I, II and III are correct. (B) II and III are correct.
(C) II, III and IV are correct. (D) III and IV are correct.
Ans: B
29. What is true for neo-classical growth models ?
I. Rate of interest and profit are flexible.
II. Capital is heterogeneous.
III. Perfect competition prevails.
IV. Capital and labour are substitutable.
Choose the correct answer from the codes given below :
Codes :
(A) Only I, II and III are true.
(B) Only II and III are true.
(C) Only I, III and IV are true.
(D) All the above are true.
Ans: C
30. Choose the top three trading partners of India in 2013-14 :
I. UAE II. Korea
III. China IV. USA
Choose the correct answer from codes given below :
Codes :
(A) I, II, III (B) II, III, IV
(C) I, III, IV (D) II, I, IV
Ans: C
31. Of the following, which combination of two deficits is most significant for the Indian economy ?
(A) Fiscal deficit and Revenue deficit
(B) Revenue deficit and Primary deficit
(C) Budget deficit and Fiscal deficit
(D) Current Account deficit and Fiscal deficit
Ans: D
32. Of the following, which sector witnessed the highest growth rate in year 2013-14 ?
(A) Agriculture, forestry and fishery
(B) Mining and quarrying
(C) Manufacturing
(D) Construction
Ans: A
33. Who has advocated the concept of PURA (Providing Urban Amenities in Rural Areas) for our country ?
(A) A.P.J. Abdul Kalam (B) Manmohan Singh
(C) Charan Singh (D) None of the above
Ans: A
34. ECOMARC is a symbol related to
(A) Export Goods (B) Import Goods
(C) Goods Safe for Environment (D) Best Quality Goods
Ans: C
35. Arrange following countries as per their HDI rank in the descending order (on the basis of 2013, UNDP Report on Human Development) :
1. Vietnam 2. China
3. India 4. Sri Lanka
Choose the correct answer from the codes given below :
Codes :
(A) 4, 2, 1, 3 (B) 2, 1, 4, 3
(C) 2, 4, 3, 1 (D) 1, 2, 3, 4
Ans: A
36. Consider the following export groups from India for the year 2013-14 :
1. Agri. and allied products
2. Engineering goods
3. Gems and Jewellery
4. Textile and Readymade Garments
Arrange them in descending order of magnitude as a percent to total exports.
(A) 2, 1, 4, 3 (B) 2, 1, 3, 4
(C) 4, 2, 1, 3 (D) 3, 4, 2, 1
Ans: B
37. Techniques used to encourage the production and consumption of goods that generate positive externalities are referred to as
(A) Tax incentives and vouchers (B) Fees and fines
(C) Taxes and charges (D) Special assessment
Ans: A
38. Which of the canons of taxations have been propounded by Adam Smith ?
(A) Economy, Elasticity, Simplicity and Sufficiency
(B) Equity, Certainty, Convenience and Economy
(C) Certainty, Convenience, Economy and Elasticity
(D) Economy, Coordination, Convenience and Expediency
Ans: B
39. Displacement effect explained in Peacock-Wiseman hypothesis implies :
(A) An upward displacement of public expenditure according to higher economic growth
(B) The movement from older level of public expenditure and taxation to a newer and higher level
(C) Public expenditure increases at steady rate and reaches higher level
(D) Government undertakes more and more newer activities and hence public expenditure rises steeply upwards
Ans: B
40. The most important characteristic of a federation is :
(A) Perfect match between the functions and resources of the Central and State Governments
(B) Non-correspondence between the functions and resources of the Central and State Governments
(C) Centre’s supremacy over the States
(D) None of the above
Ans: B
41. Fiscal consolidation at the Centre can be achieved by :
(A) Rationalization of major subsidies alone
(B) Reducing the defence expenditure only
(C) Raising the tax-GDP ratio and rationalisation of subsidies
(D) Minimising the Central assistance to the States
Ans: C
42. Arrange the following Reports in chronological order :
I. Direct Taxes Enquiry Committee, Final Report
II. Final Report on Rationalising and Simplifications of the Tax Structure
III. Indian Tax Reforms – Report of a Survey
IV. Taxation Enquiry Commission
Choose the correct answer from the codes given below :
Codes :
(A) IV, III, II, I (B) I, II, III, IV
(C) III, I, IV, II (D) II, III, I, IV
Ans: A
43. Identify correctly the taxes in State List (List – II) of the Constitution of India :
I. Taxes on mineral rights
II. Taxes on luxuries
III. Rates of stamp duty in respect of bills of exchange, cheques and promissory notes
IV. Excise duties on tobacco
Choose the right answer from the codes given below :
Codes :
(A) I and III are correct. (B) I and II are correct.
(C) I, III and IV are correct. (D) II, III and IV are correct.
Ans: B
44. Lump sum grant means :
(A) A grant whose amount is sufficient to meet the expenditure.
(B) A matching and conditional grant.
(C) Grant given for a special purpose and it can be utilised only for that purpose.
(D) A grant whose amount is not dependent on any matching effort of the recipient.
Ans: D
45. Geometric mean of Laspeyre’s and Paasche’s indices provides :
(A) Marshall-Edgeworth Index (B) Bowley’s Index
(C) Fisher’s Index (D) Kelley’s Index
Ans: C
46. Assertion (A) : Moving averages method can be used to estimate trend in time series.
Reasoning (R) : Moving averages is a device to smoothen the fluctuations in time series.
Choose the correct answer from the codes given below :
Codes :
(A) Both (A) and (R) are correct and (R) is a correct explanation of (A).
(B) Both (A) and (R) are correct, but (R) is not a correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (R) is correct, but (A) is incorrect.
Ans: A
47. Which one of the following denotes the power of the Test ? [α is probability of Type I error and β is probability of Type II error]
(A) α (B) β
(C) 1 – α (D) 1 – β
Ans: D
48. In a frequency distribution the standard deviation of which is 15.8, the value of median is more than mean by 4, what will be its coefficient of skewness ?
(A) – 0.76 (B) + 0.76
(C) – 0.86 (D) + 0.86
Ans: A
49. Three coins are tossed simultaneously. What is the probability that they will fall 2 heads and 1 tail ?
(A) 1/2
(B) 1/4
(C) 3/4
(D) 3/8
Ans: D
50. In a frequency distribution if each item is multiplied by 5, the coefficient of variation will remain
(A) unchanged (B) will be multiplied by 5
(C) will be multiplied by 25 (D) will be multiplied by 1/5
Ans: A
51. Who distinguished between value in use and value in exchange and gave the famous example of diamonds and water ?
(A) Adam Smith
(B) David Ricardo
(C) Alfred Marshall
(D) Karl Marx
Ans: A
52. When income effect becomes stronger than substitution effect, the labour supply curve will
(A) Slope positively
(B) Negatively sloped
(C) Bend backward
(D) Slope upwards
Ans: C
53. Assertion (A) : The concept of supply curve is meaningless for the monopolist.
Reason (R) : Monopolists are price setters; it does not make reuse to ask what output they will produce at various prices.
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 not the correct explanation of (A).
(D) (R) is correct, but (A) is incorrect.
Ans: A
54. An industry whose long run supply curve is horizontal is called
(A) Constant cost industry
(B) Increasing Cost Industry
(C) Decreasing Cost Industry
(D) Efficient Industry
Ans: A
55. The practice of charging each consumer the reservation price is called
(A) Peak load pricing
(B) Inter-temporal price discrimination
(C) First degree price discrimination
(D) Third degree price discrimination
Ans: C
56. Frictional unemployment is also known as
(A) Disguised unemployment
(B) Turnover unemployment
(C) Cyclical unemployment
(D) Structural unemployment
Ans: B
57. Arrange in ascending chronological order the following consumption hypotheses in which they appeared in the economics literature :
(1) Absolute increase hypothesis
(2) Permanent increase hypothesis
(3) Life cycle hypothesis
(4) Relative increase hypothesis
Codes :
(A) 1, 3, 4, 2 (B) 1, 2, 4, 3
(C) 1, 4, 3, 2 (D) 1, 3, 2, 4
Ans: C
58. Which of the following components of aggregate demand is selfterminating and self-financing ?
(A) Investment expenditure (B) Durable consumption expenditure (C) Non-durable consumption expenditure (D) Government expenditure
Ans: B
59. Arrange all the four concepts of money supply M1 , M2 , M3 and M4 in the ascending order in terms of their liquidity
(A) M3 , M2 , M1 andM4
(B) M1 , M2 , M3 and M4
(C) M4 , M2 , M3 and M1
(D) M4 , M3 , M2 and M1
Ans: D
60. Who amongst the following economists imparted money demand of a portfolio theory approach ?
(1) J.M. Keynes
(2) Baumol
(3) James Tobin
(4) Milton Friedman
Codes :
(A) 1, 2 (B) 3, 4
(C) 1, 2, 3 (D) 2, 3, 4
Ans: B
61. Which of the following is not a characteristic feature of the Phillips curve ?
(A) The Price expectations are adaptive
(B) The unemployment rate, when money wage stabilises, is 5½ percent
(C) The price expectations are static
(D) there is a loop around Phillips curve
Ans: A
62. The crowding out effect is zero when
(A) there is liquidity trap, or investment is perfectly interest inelastic
(B) money demand is perfectly interest inelastic, or investment is perfectly interest elastic
(C) IS curve is falling and LM curve is rising
(D) None of the above
Ans: A
63. Meeting the needs of present generation without compromising the needs of future generation is
(A) Economic Development
(B) Social Development
(C) Sustainable Development
(D) Economic Growth
Ans: C
64. The full capacity growth rate in Harrod-Domar Model is also known as
(A) Actual growth rate
(B) Warranted growth rate
(C) Natural growth rate
(D) Expected growth rate
Ans: B
65. Inventors of HDI are
I. Harris-Todaro
II. Megnad Desai
III. Robert Solow
IV. Amartya Sen
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) III and IV are correct.
(D) II and IV are correct.
Ans: D
66. Components of PQLI
I. Morbidity
II. Infant mortality
III. Life expectancy at age one
IV. Basic literacy at age 15
Codes :
(A) I, III and IV are correct.
(B) III, II and IV are correct.
(C) I, II and III are correct.
(D) IV, I and II are correct.
Ans: B
67. Assertion (A) : All historical events are the results of continuous economic struggle between different classes and groups in society.
Reason (R) : The main cause of this struggle is the conflict between the ‘mode of production’ and the ‘relations of production’.
Codes :
(A) (A) is correct, but (R) is wrong.
(B) (A) is wrong, but (R) is correct.
(C) Both (A) and (R) are wrong.
(D) Both (A) and (R) are correct.
Ans: D
(A) Adam Smith
(B) David Ricardo
(C) Alfred Marshall
(D) Karl Marx
Ans: A
52. When income effect becomes stronger than substitution effect, the labour supply curve will
(A) Slope positively
(B) Negatively sloped
(C) Bend backward
(D) Slope upwards
Ans: C
53. Assertion (A) : The concept of supply curve is meaningless for the monopolist.
Reason (R) : Monopolists are price setters; it does not make reuse to ask what output they will produce at various prices.
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 not the correct explanation of (A).
(D) (R) is correct, but (A) is incorrect.
Ans: A
54. An industry whose long run supply curve is horizontal is called
(A) Constant cost industry
(B) Increasing Cost Industry
(C) Decreasing Cost Industry
(D) Efficient Industry
Ans: A
55. The practice of charging each consumer the reservation price is called
(A) Peak load pricing
(B) Inter-temporal price discrimination
(C) First degree price discrimination
(D) Third degree price discrimination
Ans: C
56. Frictional unemployment is also known as
(A) Disguised unemployment
(B) Turnover unemployment
(C) Cyclical unemployment
(D) Structural unemployment
Ans: B
57. Arrange in ascending chronological order the following consumption hypotheses in which they appeared in the economics literature :
(1) Absolute increase hypothesis
(2) Permanent increase hypothesis
(3) Life cycle hypothesis
(4) Relative increase hypothesis
Codes :
(A) 1, 3, 4, 2 (B) 1, 2, 4, 3
(C) 1, 4, 3, 2 (D) 1, 3, 2, 4
Ans: C
58. Which of the following components of aggregate demand is selfterminating and self-financing ?
(A) Investment expenditure (B) Durable consumption expenditure (C) Non-durable consumption expenditure (D) Government expenditure
Ans: B
59. Arrange all the four concepts of money supply M1 , M2 , M3 and M4 in the ascending order in terms of their liquidity
(A) M3 , M2 , M1 andM4
(B) M1 , M2 , M3 and M4
(C) M4 , M2 , M3 and M1
(D) M4 , M3 , M2 and M1
Ans: D
60. Who amongst the following economists imparted money demand of a portfolio theory approach ?
(1) J.M. Keynes
(2) Baumol
(3) James Tobin
(4) Milton Friedman
Codes :
(A) 1, 2 (B) 3, 4
(C) 1, 2, 3 (D) 2, 3, 4
Ans: B
61. Which of the following is not a characteristic feature of the Phillips curve ?
(A) The Price expectations are adaptive
(B) The unemployment rate, when money wage stabilises, is 5½ percent
(C) The price expectations are static
(D) there is a loop around Phillips curve
Ans: A
62. The crowding out effect is zero when
(A) there is liquidity trap, or investment is perfectly interest inelastic
(B) money demand is perfectly interest inelastic, or investment is perfectly interest elastic
(C) IS curve is falling and LM curve is rising
(D) None of the above
Ans: A
63. Meeting the needs of present generation without compromising the needs of future generation is
(A) Economic Development
(B) Social Development
(C) Sustainable Development
(D) Economic Growth
Ans: C
64. The full capacity growth rate in Harrod-Domar Model is also known as
(A) Actual growth rate
(B) Warranted growth rate
(C) Natural growth rate
(D) Expected growth rate
Ans: B
65. Inventors of HDI are
I. Harris-Todaro
II. Megnad Desai
III. Robert Solow
IV. Amartya Sen
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) III and IV are correct.
(D) II and IV are correct.
Ans: D
66. Components of PQLI
I. Morbidity
II. Infant mortality
III. Life expectancy at age one
IV. Basic literacy at age 15
Codes :
(A) I, III and IV are correct.
(B) III, II and IV are correct.
(C) I, II and III are correct.
(D) IV, I and II are correct.
Ans: B
67. Assertion (A) : All historical events are the results of continuous economic struggle between different classes and groups in society.
Reason (R) : The main cause of this struggle is the conflict between the ‘mode of production’ and the ‘relations of production’.
Codes :
(A) (A) is correct, but (R) is wrong.
(B) (A) is wrong, but (R) is correct.
(C) Both (A) and (R) are wrong.
(D) Both (A) and (R) are correct.
Ans: D
68. Which of the following is not the part of National Telecom Policy (NTP) 2012 in India ?
(A) Strive to create One-Nation One License across services and service areas.
(B) Achieve One Nation – Full Mobile number portability
(C) To work towards ‘Right to Broadband’
(D) Recognize telecom as basic goods industry
Ans: D
69. Percentage share of the manufacturing output of India in the world total is now
(A) 2.2 percent
(B) 3.9 percent
(C) 6.2 percent
(D) 7.5 percent
Ans: A
70. India’s current account deficit in Balance of Trade is mainly due to
(a) Increasing imports of oil and petroleum
(b) Increasing imports of gold and silver
(c) Increasing imports of food grains
(d) Increasing imports of iron and steel
Codes :
(A) (a), (b) and (c)
(B) (a) and (c)
(C) (a) and (b)
(D) (a) and (d)
Ans: C
71. The MRTP Act of 1969 has been
(A) replaced by Competition Act 2002
(B) merged in Industrial Policy Act of 1978
(C) replaced by Trade Union (Amendment) Act 2001
(D) merged in Industrial Policy Act of 1991
Ans: A
72. In the context of agricultural development the trickle down theory has been interpreted to suggest that
a. Growth in agriculture output without radical institutional reforms will reduce the incidence of poverty.
b. Growth in agriculture output with radical institutional reforms will reduce the incidence of poverty
c. Only radical institutional reforms can reduce the incidence of poverty.
d. Only growth in agriculture output will reduce incidence of poverty.
(A) Both a and b
(B) Both a and c
(C) b only
(D) d only
Ans: C
73. As per the latest figures of the Ministry of Agriculture the per capita per day foodgrains availability is
(A) 280 gm
(B) 440 gm
(C) 580 gm
(D) 900 gm
Ans: B
74. In which year the Kissan Credit Card System was introduced ?
(A) 1978
(B) 1998
(C) 1988
(D) 2008
Ans: B
75. Assertion (A) : PL-480 grants was used to import foodgrains.
Reason (R) : PL-480 grants facility was granted by Japan.
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true and (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: C
76. Productivity of groundnut is highest in
(A) U.S.A.
(B) Mexico
(C) India
(D) China
Ans: A
77. NAFED is a
(A) Company
(B) Non-Government Organisation
(C) Government Body
(D) Cooperative Organisation
Ans: D
78. Based on the SRS data for 2010 in India, which of the following seems to be incorrect ?
(A) TFR = 2.5
(B) CDR = 7.2
(C) IMR = 48.9
(D) CBR = 24.2
Ans: D
79. Upto which census, synchronous de facto method was adopted in India wherein the census was conducted throughout the country in a single night ?
(A) 1901 (B) 1931
(C) 1951 (D) 1971
Ans: B
80. Match the following :
Group – I Group – II
a. Type II error 1. P01 × P10 = 1
b. Mean > Mode 2. Probability of not rejecting H0 when it was not true
c. Population is homogenous 3. Positively skewed distribution
d. Time Reversal Test 4. Simple random sampling
Codes :
a b c d
(A) 2 3 4 1
(B) 3 1 2 4
(C) 4 2 3 1
(D) 1 2 3 4
Ans: A
81. Assertion (A) : For normal distribution Mean = Median = Mode.
Reason (R) : Normal distribution is mesokurtic.
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
82. Given the two regression lines estimated from given data as under :
Y = 4 + 0.4X
X = –2 + 0.9Y
Then coefficient of correlation between X and Y will be
(A) 0.4
(B) 0.5
(C) 0.6
(D) 0.8
Ans: C
83. Which of the following satisfy time reversal test but not factor reversal test ?
(A) Laspeyre’s Index No.
(B) Fisher’s Index No.
(C) Paasche’s Index No.
(D) Marshall-Edgeworth Index No.
Ans: D
84. Which is a non-probability based sampling method ?
(A) Systematic Sampling
(B) Stratified Random Sampling
(C) Quota Sampling
(D) Simple Random Sampling
Ans: C
(A) Strive to create One-Nation One License across services and service areas.
(B) Achieve One Nation – Full Mobile number portability
(C) To work towards ‘Right to Broadband’
(D) Recognize telecom as basic goods industry
Ans: D
69. Percentage share of the manufacturing output of India in the world total is now
(A) 2.2 percent
(B) 3.9 percent
(C) 6.2 percent
(D) 7.5 percent
Ans: A
70. India’s current account deficit in Balance of Trade is mainly due to
(a) Increasing imports of oil and petroleum
(b) Increasing imports of gold and silver
(c) Increasing imports of food grains
(d) Increasing imports of iron and steel
Codes :
(A) (a), (b) and (c)
(B) (a) and (c)
(C) (a) and (b)
(D) (a) and (d)
Ans: C
71. The MRTP Act of 1969 has been
(A) replaced by Competition Act 2002
(B) merged in Industrial Policy Act of 1978
(C) replaced by Trade Union (Amendment) Act 2001
(D) merged in Industrial Policy Act of 1991
Ans: A
72. In the context of agricultural development the trickle down theory has been interpreted to suggest that
a. Growth in agriculture output without radical institutional reforms will reduce the incidence of poverty.
b. Growth in agriculture output with radical institutional reforms will reduce the incidence of poverty
c. Only radical institutional reforms can reduce the incidence of poverty.
d. Only growth in agriculture output will reduce incidence of poverty.
(A) Both a and b
(B) Both a and c
(C) b only
(D) d only
Ans: C
73. As per the latest figures of the Ministry of Agriculture the per capita per day foodgrains availability is
(A) 280 gm
(B) 440 gm
(C) 580 gm
(D) 900 gm
Ans: B
74. In which year the Kissan Credit Card System was introduced ?
(A) 1978
(B) 1998
(C) 1988
(D) 2008
Ans: B
75. Assertion (A) : PL-480 grants was used to import foodgrains.
Reason (R) : PL-480 grants facility was granted by Japan.
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true and (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: C
76. Productivity of groundnut is highest in
(A) U.S.A.
(B) Mexico
(C) India
(D) China
Ans: A
77. NAFED is a
(A) Company
(B) Non-Government Organisation
(C) Government Body
(D) Cooperative Organisation
Ans: D
78. Based on the SRS data for 2010 in India, which of the following seems to be incorrect ?
(A) TFR = 2.5
(B) CDR = 7.2
(C) IMR = 48.9
(D) CBR = 24.2
Ans: D
79. Upto which census, synchronous de facto method was adopted in India wherein the census was conducted throughout the country in a single night ?
(A) 1901 (B) 1931
(C) 1951 (D) 1971
Ans: B
80. Match the following :
Group – I Group – II
a. Type II error 1. P01 × P10 = 1
b. Mean > Mode 2. Probability of not rejecting H0 when it was not true
c. Population is homogenous 3. Positively skewed distribution
d. Time Reversal Test 4. Simple random sampling
Codes :
a b c d
(A) 2 3 4 1
(B) 3 1 2 4
(C) 4 2 3 1
(D) 1 2 3 4
Ans: A
81. Assertion (A) : For normal distribution Mean = Median = Mode.
Reason (R) : Normal distribution is mesokurtic.
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
82. Given the two regression lines estimated from given data as under :
Y = 4 + 0.4X
X = –2 + 0.9Y
Then coefficient of correlation between X and Y will be
(A) 0.4
(B) 0.5
(C) 0.6
(D) 0.8
Ans: C
83. Which of the following satisfy time reversal test but not factor reversal test ?
(A) Laspeyre’s Index No.
(B) Fisher’s Index No.
(C) Paasche’s Index No.
(D) Marshall-Edgeworth Index No.
Ans: D
84. Which is a non-probability based sampling method ?
(A) Systematic Sampling
(B) Stratified Random Sampling
(C) Quota Sampling
(D) Simple Random Sampling
Ans: C
85. The Model of Managerial Enterprise is associated with
(A) R.A. Gordan
(B) R. Marris
(C) Baumol
(D) Scitorsky
Ans: B
86. Which one of the following is not an assumption of linear programming ?
(A) Constant output prices
(B) Constant input prices
(C) Increasing returns to scale
(D) Technologically fixed factor proportion
Ans: C
87. In the Paul Sweezy Model of Oligopoly in the Kinked Demand Curve, the point of kink represents
(A) Quantity Rigidity
(B) Price Rigidity
(C) Both the Price and Quantity Rigidity
(D) Only Price Rigidity
Ans: C
88. Match List-I with List-II :
List – I List – II
(a) Offer Curves (1) Public Revenue
(b) Laffer Curves (2) Sticky Price
(c) Lorenz Curve (3) Reciprocal demand
(d) Kinked Demand Curve (4) Inequalities
Codes :
(a) (b) (c) (d)
(A) (3) (1) (4) (2)
(B) (1) (3) (2) (4)
(C) (3) (4) (1) (2)
(D) (4) (1) (2) (3)
Ans: A
89. Match the items in List – I with items in List – II :
List – I List – II
(a) Technical Monopoly (1) Gold and Silver
(b) Global Market (2) Cartel
(c) Legal Monopoly (3) Coca Cola
(d) Oligopoly (4) Patent Rights
Codes :
(a) (b) (c) (d)
(A) (3) (1) (4) (2)
(B) (3) (2) (1) (4)
(C) (4) (3) (1) (2)
(D) (4) (1) (2) (3)
Ans: A
90. Assertion (A) : Consumer Surplus is the difference between the potential price and actual price.
Reason (R) : There exists an inverse relationship between the price and consumer surplus.
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: B
91. Assertion (A) : The long run cost curve is L shaped rather than U shaped.
Reason (R) : The new technique of production of large plants reduce the total cost per unit of output in the long run.
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is false, but (R) is true.
(D) (R) is false, but (A) is true.
Ans: A
92. Which of the following is true ?
a. Indifference curves slope downward from left to right.
b. Indifference curves slope downward from right to left.
c. Indifference curves are convex to the point of origin of the two axes.
d. Indifference curves never intersect each other.
(A) a, b and c are true.
(B) b, c and d are true.
(C) a, c and d are true.
(D) a and d are true.
Ans: C
93. A major portion of the multiplier effect is realized in fewer periods when marginal propensity to consume is
(A) unity
(B) larger
(C) smaller
(D) none of the above
Ans: C
94. The optimum capital stock is achieved when the user cost of capital is equal to
(A) the interest rate
(B) the depreciation rate
(C) the marginal product of capital
(D) Tobin’s Q
Ans: C
95. If the economy is operating at potential GDP, an increase in money supply will lead to
(A) Stagflation
(B) Structural inflation
(C) Demand-side inflation
(D) Supply-side inflation
Ans: C
96. Which of the following is true in case of the orthodox (early) Keynesians ?
1. Interest elasticity of demand for money is extremely high.
2. Interest elasticity of demand for money is low.
3. Changes in the quantity of money do not have important predictable effects on the level of economic activity.
4. Demand for money is unstable.
(A) 1, 2, 3
(B) 1, 3, 4
(C) 1, 2, 4
(D) 2, 3, 4
Ans: B
97. Which of the following statement is false ?
(A) The IS curve is flatter, lower the value of the Keynesian multiplier and lower the interest resistiveness of investment.
(B) The IS curve is steeper lower the value of the Keynesian multiplier and lower the interest resistiveness of investment.
(C) The position of LM curve depends negatively on the price level and the resistiveness of the money demand to the changes in income.
(D) The LM curve is flatter, the larger the interest resistiveness of the money demand and the lower the income resistiveness of the money demand.
Ans: A
98. Which of the following statements are true ?
1. Increased government spending affects aggregate spending more quickly than does an increase in money supply.
2. An increase in aggregate demand has no effect upon real output when aggregate supply is vertical.
3. An increase in government spending always crowds out an equal amount of private sector interest sensitive spending.
4. Increased government spending affects aggregate supply less quickly than does an increase in money supply.
Codes :
(A) 1 & 2
(B) 1 & 3
(C) 1 & 4
(D) 3 & 4
Ans: A
99. In the context of the theory of economic growth, match the theory/facts given in List I with their propounders given in List II :
List – I List – II
(a) Stylised facts of economic growth (1) R.M. Solow
(b) Exogenous growth theory (2) N. Kaldor
(c) Golden rule of accumulation (3) Radner & Samuelson
(d) Optimal growth turnpikes (4) E.S. Phelps
Codes :
(a) (b) (c) (d)
(A) (2) (1) (3) (4)
(B) (3) (2) (1) (4)
(C) (2) (1) (4) (3)
(D) (2) (4) (3) (1)
Ans: C
100. The endogeneous growth theory seeks to provide explanation for which of the following determinants of growth that the Solow’s model did not explain ?
(A) Technical Progress
(B) Labour Growth
(C) Role of the government in promoting growth
(D) All the above
Ans: C
(A) R.A. Gordan
(B) R. Marris
(C) Baumol
(D) Scitorsky
Ans: B
86. Which one of the following is not an assumption of linear programming ?
(A) Constant output prices
(B) Constant input prices
(C) Increasing returns to scale
(D) Technologically fixed factor proportion
Ans: C
87. In the Paul Sweezy Model of Oligopoly in the Kinked Demand Curve, the point of kink represents
(A) Quantity Rigidity
(B) Price Rigidity
(C) Both the Price and Quantity Rigidity
(D) Only Price Rigidity
Ans: C
88. Match List-I with List-II :
List – I List – II
(a) Offer Curves (1) Public Revenue
(b) Laffer Curves (2) Sticky Price
(c) Lorenz Curve (3) Reciprocal demand
(d) Kinked Demand Curve (4) Inequalities
Codes :
(a) (b) (c) (d)
(A) (3) (1) (4) (2)
(B) (1) (3) (2) (4)
(C) (3) (4) (1) (2)
(D) (4) (1) (2) (3)
Ans: A
89. Match the items in List – I with items in List – II :
List – I List – II
(a) Technical Monopoly (1) Gold and Silver
(b) Global Market (2) Cartel
(c) Legal Monopoly (3) Coca Cola
(d) Oligopoly (4) Patent Rights
Codes :
(a) (b) (c) (d)
(A) (3) (1) (4) (2)
(B) (3) (2) (1) (4)
(C) (4) (3) (1) (2)
(D) (4) (1) (2) (3)
Ans: A
90. Assertion (A) : Consumer Surplus is the difference between the potential price and actual price.
Reason (R) : There exists an inverse relationship between the price and consumer surplus.
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Ans: B
91. Assertion (A) : The long run cost curve is L shaped rather than U shaped.
Reason (R) : The new technique of production of large plants reduce the total cost per unit of output in the long run.
Codes :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is false, but (R) is true.
(D) (R) is false, but (A) is true.
Ans: A
92. Which of the following is true ?
a. Indifference curves slope downward from left to right.
b. Indifference curves slope downward from right to left.
c. Indifference curves are convex to the point of origin of the two axes.
d. Indifference curves never intersect each other.
(A) a, b and c are true.
(B) b, c and d are true.
(C) a, c and d are true.
(D) a and d are true.
Ans: C
93. A major portion of the multiplier effect is realized in fewer periods when marginal propensity to consume is
(A) unity
(B) larger
(C) smaller
(D) none of the above
Ans: C
94. The optimum capital stock is achieved when the user cost of capital is equal to
(A) the interest rate
(B) the depreciation rate
(C) the marginal product of capital
(D) Tobin’s Q
Ans: C
95. If the economy is operating at potential GDP, an increase in money supply will lead to
(A) Stagflation
(B) Structural inflation
(C) Demand-side inflation
(D) Supply-side inflation
Ans: C
96. Which of the following is true in case of the orthodox (early) Keynesians ?
1. Interest elasticity of demand for money is extremely high.
2. Interest elasticity of demand for money is low.
3. Changes in the quantity of money do not have important predictable effects on the level of economic activity.
4. Demand for money is unstable.
(A) 1, 2, 3
(B) 1, 3, 4
(C) 1, 2, 4
(D) 2, 3, 4
Ans: B
97. Which of the following statement is false ?
(A) The IS curve is flatter, lower the value of the Keynesian multiplier and lower the interest resistiveness of investment.
(B) The IS curve is steeper lower the value of the Keynesian multiplier and lower the interest resistiveness of investment.
(C) The position of LM curve depends negatively on the price level and the resistiveness of the money demand to the changes in income.
(D) The LM curve is flatter, the larger the interest resistiveness of the money demand and the lower the income resistiveness of the money demand.
Ans: A
98. Which of the following statements are true ?
1. Increased government spending affects aggregate spending more quickly than does an increase in money supply.
2. An increase in aggregate demand has no effect upon real output when aggregate supply is vertical.
3. An increase in government spending always crowds out an equal amount of private sector interest sensitive spending.
4. Increased government spending affects aggregate supply less quickly than does an increase in money supply.
Codes :
(A) 1 & 2
(B) 1 & 3
(C) 1 & 4
(D) 3 & 4
Ans: A
99. In the context of the theory of economic growth, match the theory/facts given in List I with their propounders given in List II :
List – I List – II
(a) Stylised facts of economic growth (1) R.M. Solow
(b) Exogenous growth theory (2) N. Kaldor
(c) Golden rule of accumulation (3) Radner & Samuelson
(d) Optimal growth turnpikes (4) E.S. Phelps
Codes :
(a) (b) (c) (d)
(A) (2) (1) (3) (4)
(B) (3) (2) (1) (4)
(C) (2) (1) (4) (3)
(D) (2) (4) (3) (1)
Ans: C
100. The endogeneous growth theory seeks to provide explanation for which of the following determinants of growth that the Solow’s model did not explain ?
(A) Technical Progress
(B) Labour Growth
(C) Role of the government in promoting growth
(D) All the above
Ans: C