by...new delhi– 110 002 opp. rta office main road, beside– khazanchi road, phone :...

ByDr. Bipul Gopalan

Upkar Prakashan, Agra-2

( ii )

© Authors

PublishersUPKAR PRAKASHAN2/11A, Swadeshi Bima Nagar, AGRA–282 002Phone : 4053333, 2530966, 2531101Fax : (0562) 4053330E-mail : [email protected], Website : www.upkar.inBranch Offices4845, Ansari Road, Daryaganj, 16-11-23/37, Moosarambagh, Teegan Guda Paras Bhawan (First Floor),New Delhi–110 002 Opp. RTA Office Main Road, Beside– Khazanchi Road,Phone : 011–23251844/66 Andhra Bank, Hyderabad–500 036 (TS) Patna–800 004

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Code No. 1943

Printed at : UPKAR PRAKASHAN (Printing Unit) Bye-pass, AGRA

ISBN : 978-93-86791-04-7

( iii )

Contents

Practice Set-1 Paper-II .............................................................................................. 3–7

Paper-III ............................................................................................. 8–15


Paper-III ............................................................................................. 22–30


Paper-III ............................................................................................. 37–46


Paper-III ............................................................................................. 54–62


Paper-III ............................................................................................. 70–78


Paper-III ............................................................................................. 85–92


Paper-III ............................................................................................. 99–106


Paper-III ............................................................................................. 113–120


Paper-III ............................................................................................. 127–134


Paper-III ............................................................................................. 141–147


Paper-III ............................................................................................. 153–159


Paper-III ............................................................................................. 165–171

( iv )


Paper-III ............................................................................................. 178–186


Paper-III ............................................................................................. 193–200


Paper-III ............................................................................................. 207–214


Paper-III ............................................................................................. 222–231


Paper-III ............................................................................................. 239–247


Paper-III ............................................................................................. 255–263


Paper-III ............................................................................................. 270–278


Paper-III ............................................................................................. 285–292

Practice SetSUGc-Net/JrF/Set

economics

1. Which one of the following is the most important source of revenue of State Governments in India?

(A) Land Revenue (B) VAT (C) Stamps and Registration Fees (D) State Excise Duties2. In the compensating variation method of measuring

the substitution effect of a rise in price, the consumer is

(A) under-compensated (B) over-compensated (C) just compensated (D) unaffected3. Which of the following is correct measurement of

fiscal deficit in India? (A) Excess of total revenue expenditure over total

revenue receipts (B) Excess of total expenditure over total revenue

receipts plus non-debt capital receipts (C) Excess of total expenditure over total receipts (D) Excess of total expenditure over total interest

payments4. On the expansion path of the firm operating with

homogenous production function, which among the following remain constant?

1. Input ratio 2. Price ratio of inputs 3. Marginal rate of technical substitution between

the factors 4. Elasticity of substitution Select the correct answer using the codes given

below: Code: (A) 1 and 4 (B) 1 and 2 (C) 2, 3 and 4 (D) 1, 2, 3 and 45. Which of the following is not one of the objectives

of the tax reforms in India? (A) Reduction in multiplicity of custom duty rates (B) Improving tax compliance (C) Widening the tax-base (D) Suggesting ways to increase the share of indirect

taxes in total tax revenue,6. In the context of cost minimization by a competitive

producer, which one of the following is not correct? (A) Marginal rate of technical substitution of the

factors equals relative factor price ratio

(B) Ratio of marginal physical productivities of the factors equals the ratio of factors prices

(C) Slope of the isoquant in question equals slope of the budget line

(D) Marginal rate of technical substitution of factors of production divided by relative factor price ratio is zero

7. There are two statements, one is Assertion (A) and the other Reason (R). You have to examine these carefully and select the answer from the code given below—

Assertion(A): Indirect taxes promote inequalities in the distribution of income.

Reason(R): The poor bear more burden of indirect taxes.

Code: (A) (A) is true, but (R) is false (B) Both (A) and (R) are true and (R) is the correct

explanation of (A) (C) (A) is false, but (R) is true (D) Both (A) and (R) are false8. Suppose, there is a situation where tow individuals

are engaged in exchange and if individual 1 is a price-maker and individual 2 is a price-taker, equilibrium

(A) takes place on the offer curve of individual 1 (B) takes place on the offer curve of individual 2 (C) takes place at the intersection point of the two

offer curves (D) is indeterminate9. The concept of single factoral and double factoral

terms of trade have been given by— (A) Haberler (B) Jacob Viner (C) Snider (D) Scammel10. The kinked demand curve is reflected in a discontinuity

in the (A) total revenue curve (B) marginal cost curve (C) average revenue curve (D) marginal revenue curve11. Trade Policy Reforms in India include— (A) Disinvestment (B) Lowering of custom duties (C) Increasing SLR (D) Reduction in direct and indirect taxes

Practice Set-1 Paper-II

4 Practice Sets U.G.C. Economics

12. In the linearly homogenous Cobb-Douglas production function with two inputs, the elasticity of substitution between the inputs is

(A) zero (B) greater than one (C) one (D) less than one13. The meeting of G-20 in 2016 was held at— (A) Hongzhou (B) Paris (C) Geneva (D) New Delhi14. If an individual is observed to work less in response

to an increase in the wage rate for his services, this implies that

(A) for this individual, leisure is a normal good (B) for this individual, leisure is an inferior good (C) the individual is irrational (D) Leisure could be a Giffen good15. Match List-I with List-II and select the answer from

the code given below— List-I (a) Total area under normal curve (b) Square of Standard Deviation (c) Symmetric distribution (d) Coefficientofvariation List-II 1. β1 = 0 2. 1

3. σX×100 4. Variance

Code: (a) (b) (c) (d) (A) 3 4 1 2 (B) 2 4 1 3 (C) 4 1 2 3 (D) 1 2 3 4

16. Given the demand function qp

= 20 , where p = price

of product and q = quantity of product, the elasticity of demand at p = 10 would be

(A) 0 (B) –1 (C) –2 (D) 8#17. If the coefficient of determination is 0-12 and one of

the regression coefficients is, 0-3-what is the value of the other regression co-efficient?

(A) 0.4 (B) 0.36 (C) 0.9 (D) 0.15 .18. Which one of the following assumptions is not correct

for the revealed preference analysis? (A) Consistency (B) Transitivity (C) Rationality (D) Weak ordering19. The mean and variance of a standard normal variate

are respectively— (A) 0, 0 (B) 0, 1 (C) 1, 0 (D) 1, 220. Which one of the following is not included while

estimating national income through income method?

(A) Rental Income

(B) UndistributedProfits (C) Mixed Income (D) Pensions21. Unbalanced regional growth in India is due to– (A) Unequal budgetary support by Central

Government to different States (B) Spatial distribution of industries (C) Inadequate development infrastructure in some

States (D) AH of the above22. Let I = 5 + 0.2Y, S = –15 + 0.3Y and G = 5 (where I

= Investment, Y = National Income, S = Savings and G = Government Spending). What is the equilibrium level of Y?

(A) 200 (B) 100 (C) 250 (D) 30023. The Union Budget is presented under which Article

of the Constitution in India, (A) 110 (B) 111 (C) 112 (D) 12224. Given are the following informations about an

econmy:Consumption = ` 5,000Gross Investment = ` 1,000Government Purchases = ` 800Exports = ` 600Imports = ` 800Depreciation = ` 250What is the GNP at market prices?

(A) ` 7,100 (B) ` 6,850 (C) ` 6,600 (D) ` 6,35025. New Agriculture strategy has— (A) Widened the gap between the rich and the poor

farmers (B) Increased production of only few crops (C) Led to an increase in regional disparities (D) All of the above26. Which one of the following saving functions

corresponds to the investment multiplier of 5? (A) S = –25 + 0.25 Y (B) S = –40 + 0.75 Y (C) S = –60 + 0.20 Y (D) S = –-75 + 0.60 Y27. If the accommodating capital is zero in the balance

of payments of a country, there will be— (A) Equilibrium in the balance of payments (B) disequilibrium in the balance of payments (C) deficitinthebalanceofpayments (D) Surplus in the balance of payments28. Consider the following statements denoting the

relationship between marginal propensity to consume and value of multiplier :

1. Higher the marginal propensity to consume, higher is the multiplier.

2. Higher the marginal propensity to consume, lower is the multiplier.

Practice Sets U.G.C. Economics 5

3. When the marginal propensity to consume is one, multipliertakesthevalueofinfinity.

Which of the above statements is/are correct? (A) 1 alone (B) 2 and 3 (C) 1, 2 and 3 (D) 1 and 329. A discriminating monopolist will charge a lower price

in the market in which the price elasticity of: (A) demand is greater (B) supply is smaller (C) demand is smaller (D) supply is greater 30. An increase in fiscal spending leads to (A) a shift of the Phillips curve to the right (B) a shift of the Phillips curve to the left (C) movement along the Phillips curve such that

unemploymentrisesandinflationfalls (D) movement along the Phillips curve such that

unemploymentfallsandinflationrises31. The revealed preference theory of consumer’s

behaviour is based on— (A) Consistency (B) Strong Ordering (C) Positive income elasticity of demand (D) All of the above32. ‘The propensity to consume of an individual with

respect to his disposable income and wealth depends on his age.’ The statement refers to the

(A) relative income hypothesis (B) permanent income hypothesis (C) life-cycle hypothesis (D) absolute income hypothesis33. The short-run supply curve of a farm under perfect

competition is the same as the— (A) Marginal cost curve (B) Marginal cost curve above the average variable

cost curve (C) Average variable cost curve (D) Average total cost curve34. Project A costing ` 2,000 crores has an MEC of 15,

project B costing ̀ 1,100 crores has an MEC of 7 and project C costing ` 1,500 crores has an MEC of 13. What is the total equilibrium level of investment if the rate of interest is 8 per cent?

(A) ` 2,000 crores (B) ` 1,100 crores (C) ` 1,500 crores (D) ` 3,500 crores35. The difference between the value of marginal product

and the marginal revenue product arises only if— (A) Average revenue is not equal to marginal

revenue (B) Average cost is not equal to marginal (C) Total revenue is not equal to total cost (D) Average cost is not equal to average revenue36. Consider the following statements: 1. If Government expenditure increases the IS curve

shifts to the right

2. If the taxes increase the IS curve shifts to the right

3. If the price level increases the LM curve shifts to the left

4. The more interest elastic the investment function, the more interest elastic will be the IS curve

Which of the above statements is/are correct? (A) 2, 3 and 4 (B) 1, 3 and 4 (C) 1 and 2 (D) 2 alone 37. Stagflation refers to situation which is characterized

by (A) deflationandrisingunemployment (B) inflationandrisingemployment (C) inflationandrisingunemployment (D) stagnantemploymentanddeflation38. Bank rate refers to the (A) Interest rate at which Commercial Banks accept

deposits from the public (B) Rate at which Central Bank rediscounts bills of

exchange of Commercial Banks (C) Prime lending rate of Commercial Banks (D) Interest rate at which Commercial Banks lend to

the customers Directions (Q. 39-40): The following questions consist of two statements: one labelled as the Assertion (A) and the other labelled as Reason (R). You are to examine these two statements carefully and select the answers to these items using the code given below—39. Assertion (A) : The role of monetary policy in a

developing economy in general is to achieve growth with stability.

Reason (R) : It makes availability of credit to public at cheaper rate of interest

Code: (A) (A) is correct, but (R) is not the explanation of

(A) (B) Both (A) and (R) are incorrect (C) (A) is incorrect, but (R) is correct (D) Both (A) and (R) are correct40. Assertion (A) : The average and the spread of indirect

taxes have been lowered in India over the past two decades.

Reason (R) : Tax-GDP ratio in India has declined during this period.

Code: (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 true41. The classical analysis of determination of output and

employment is characterised as a— (A) Static Analysis (B) Comparative Static Analysis (C) Dynamic Analysis (D) All of the above


42. Which one of the following according to Milton Friedman is not a key determinant of the demand for money?

(A) Aggregate wealth (B) Precautionary motive (C) Relative rates of return obtainable on different

forms of assets (D) Physical non-human capital goods and human

capital43. Inventory-theoretic approach transactions demand

for money has been given by— (A) J.M. Keynes (B) Milton Friedman (C) Don Patinkin (D) W. J. Baumol44. Which one of the following factors affects velocity

of circulation? (A) Time unit of income receipts (B) Frequency of transaction (C) Liquidity preference (D) All of the above45. Match List-I with List-II and select the correct answer

from the code given below— List-I (a) Equation of exchange (b) Money wage rigidity (c) Natural rate of unemployment (d) Rational expectations List-II 1. Milton Friedman 2. John Muth 3. J. M. Keynes 4. Irving Fischer Code: (a) (b) (c) (d) (A) 3 4 1 2 (B) 4 3 2 1 (C) 4 3 1 2 (D) 4 1 3 2 46. Match List-I (Name of the Economist) with List-II

(Concept/Theory) and select the correct answer using he codes given below the lists:

List-I List-II (a) A. W. Phillips 1. Central Bank (b) Findlay Shirras 2. Trade-off between wage (c) J. M. Keynes and unemployment rate (d) R.S.Sayers 3. Theoryofprofit 4. Taxable capacity 5. Liquidity trap Code: (a) (b) (c) (d) (A) 5 4 1 2 (B) 2 3 5 1 (C) 5 3 1 2 (D) 2 4 5 147. Match List-I with List-II and select the correct answer

from the code given below— List-I (a) Lifecycle hypothesis (b) Liquidity trap (c) Ratchet effect (d) Real balance effect

List-II 1. Franco Modigliani 2. J. Duesenberry 3. A. C.Pigou 4. J. M. Keynes Code: (a) (b) (c) (d) (A) 1 4 3 2 (B) 1 2 3 4 (C) 4 B 2 3 (D) 1 4 2 348. Which one of the following can be called as an

instrument of selective credit control? (A) Fixing statutory liquidity requirements (B) Variation of bank reserve ratio (C) Fixingofmargins for lendingagainst specific

securities (D) Altering discount rate49. In the Harrod-Domar equation of warranted rate of

growth, i.e., g =

s/y1/k

, the capital output ratio is represented by—

(A) g (B) 1/k (C) s/y (D) y/s50. Derivative deposit means (A) cash deposited in a bank by an employee of a

businessfirm (B) deposits created by a Commercial Bank out of

its borrowing from the RBI (C) cash deposited in a bank by another Commercial

Bank (D) deposits created by a bank our of its credit

provided to the customer of the bank

Answers And explAnAtions

1. (B) A VAT is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax.

2. (B) If the price of X had risen as taken by samuelson in his article the quasi-substitution effect would requires an increase in the budget which would put the consumer on a higher indifference curve than before and then termed over compensa-tion.

3. (B)4. (D) Cobb-Douglas production function is important

example fo linearly homogenous production function. Constant as

(i) Input ratio; (ii) Input price ratio; (iii) Marginal rate of technical substitution; (iv) Elasticity of substitution is one

5. (D)


6. (D) Cost minimization is by a competitive producer as:

MRTS Y

XMPMP

PPXY

X

Y

X

Y= = =∆

∆

7. (B) 8. (D)9. (B) Jacob Viner was a Canadian economist and is

considered with Frank Knight and Henry Simons to be one of the “inspiring” mentors of the early Chicago School of Economics.

10. (D) The Kinked demand curve is reflection in discontinuity in the marginal cost curve (MC) due to discontinuity of AR curve.

11. (B) 12. (C) Cobb-Douglas production function. Elasticity of substitution between inputs is one.

Which is also Satisfied Product Exhaustion Theorem.

13. (A) 14. (D) 15. (B) 16. (B) 17. (A) Coefficient of determination= r2 And r b bxy yx

2 = .

∴ =0 12 0 3. . byx

∴ = =byx

0 120 3

0 4..

.18. (D) Indifference curve analysis – weak ordering Revealed preference analysis – strong ordering19. (A) A standard normal variate is a normal variate

with mean µ=0 and standard deviation σ =1 with a probability density function is. Standard of Value.Standard Residual. Standard Operating Procedure.

20. (D) What is not included in GDP: (i) Income from illegal activities – Gambling (ii) Transfer payments as old age pension (iii) Value of second hand goods (iv) Black money21. (D) 22. (A) Y = C + I and Y = C + S C + I = C + S I = S 5 + 0.24Y = (–) 15 + 0.3Y Y = 20023. (C) 24. (C) GNP = C + I + G + (X–M) GNP = 5000 + 1000 + 800 + (600 – 800) = 5000 + 1000 + 800 – 200 GNP = 660025. (D) 26. (C)27. (A) Accommodating transactions are compensating

capital transactions which are meant to correct the disequilibrium in autonomous items of balance of payments. For example, if there is a current account deficit in the BOP, then this deficit is settled by capital inflow from abroad.

28. (D) 29. (A)30. (A) Increase government spending/fiscal spending

increase AD, shifting the IS curve to the right.

O

Income

Interest rate Govt

Spending

LM

IS

IS

Y

X

31. (D) 32. (C) The life-cycle Hypothesis explains that individual

consumption anytime depends on (i) Resources available to the investment (ii) The rate of returns on his capital (iii) The age of the individual33. (B) 34. (D) 35. (A) 36. (B) 37. (C) Stagflation is a term coinced to means high

unemployment and high inflation. 38. (B) Discount Rate or Bank Rate is the rate at which

central bank rediscounts the bills of exchange presented by the commercial banks.

39. (D) 40. (B)41. (A) Static analysis is a method of computer program

debugging that is done by examining the code without executing the program. The process provides an understanding of the code structure, and can help to ensure that the code adheres to industry standards.

42. (B) 43. (D) William Jack Baumol is an American economist.

Baumol has written extensively about labor market and other economic factors that affect the economy. He also made significant contribu-tions to the theory of entrepreneurship and the history of economic thought.

44. (A) Fisher equation MV = PT Where V and T constant, Then ΔM = ΔP45. (C) 46. (D) 47. (D) 48. (C) Selective controls (i) Credit Rationing; (ii) Lending Margins; (iii)

Moral Suasion; (iv) Direct Controls49. (B) The Harrod–Domar model is a classical Keynes-

ian model of economic growth. It is used in development economics to explain an economy’s growth rate in terms of the level of saving and productivity of capital. It suggests that there is no natural reason for an economy to have bal-anced growth.

50. (A) The deposits which result directly from the lending and investing activities of individual banks with individuals, firms and government.

q q q

1. Which one of the following is an indicator of poverty?

(A) Head-count index (B) Poverty-gap ratio (C) Poverty-square gap ratio (D) All of the above2. According to the quantity theory of money, the price

level rises if (A) there is a decrease in money supply (B) the velocity of circulation of money rises (C) the aggregate volume of transactions increases (D) the real demand for money rises3. Opportunity cost theory of international trade is given

by— (A) Haberler (B) Adam Smith (C) Ricardo (D) Heckscher-Ohlm4. Consider the following statements: The effect of a tariff is to 1. raise the domestic price 2. reduce consumption 3. increase imports Which of the above statements are correct? (A) 1 and 2 (B) 2 and 3 (C) 1 and 3 (D) 1, 2 and 35. Which one of the following is considered as non-debt

creating foreign investment inflow? (A) External assistance (B) Foreign direct investment (C) Borrowing from I.M.F. (D) Commercial borrowings6. For a large trading country, the optional tariff

argument is based on the proposition that a tariff on imports

(A) lowers the country’s terms of trade (B) improves the country’s terms of trade (C) leaves the country’s terms of trade unchanged (D) fails to protect the import competing industries7. In 1971, collapse of Brettonwoods system was largely

due to— (A) Fall of gold standard (B) Rise in the value of gold (C) Failure to manage international liquidity (D) Surplus countries did not revalue and deficit

countries did not devalue their currencies 8. Which one of the following pairs is correctly

matched? (A) MFA : Agricultural Free Trade

(B) UNCTAD : Free Trade Area (C) IMF : Balance of Payments

Difficulties (D) MFN : Direct Foreign Investment9. When was minimum reserve system of note issue

adopted in India? (A) 1947 (B) 1953 (C) 1956 (D) 196010. The Government of India announces a new NRI

(Non-Resident Indian) deposit scheme. This offers a very high interest rate, compared to the interest rates abroad, on foreign currency deposits by NRIs in Indian Commercial Banks. Many NRIs in the US do invest under this scheme. Under a flexible exchange rate system, this would tend to

(A) depreciate the value of Indian rupee against US dollar

(B) appreciate the value of Indian rupee against US dollar

(C) deplete the foreign exchange reserve of India (D) leave the value of rupee against US dollar

unchanged11. The continuous deficit in the balance of payments of

India is due to— (A) Continued rise in imports (B) Slow rise in exports (C) Exchange rate volatility (D) All of the above12. Presently, India’s exchange rate policy towards

current account and capital account transactions is that the rupee is

(A) fully convertible for current account transactions, but not for capital account transactions

(B) fully convertible for capital account transactions, but not for current account transactions

(C) fully convertible for both capital and current account transactions

(D) not convertible for either type of transactions13. Disguised unemployment in underdeveloped

countries stands for marginal productivity of some persons is—

(A) zero (B) greater than zero (C) high (D) unity14. Consider the following statements: 1. Interest received by the Central Government on

house-building loans given to the government employees is a transfer receipts.

Paper-III


2. Payments made by a farmer to the labourers for ploughing the land is an intermediate consumption.

3. Interest paid by a farmer to a cooperative society is a factor payment

Which of the above statements is/are correct? (A) 3 alone (B) 1 and 2 (C) 1 and 3 (D) 1, 2 and 315. Match List-I with List-II and select the correct answer

from the code given below— List-I (a) J. M. Keynes (b) David Ricardo (c) Adam Smith (d) Mrs. Joan Robinson List-II 1. Economics of Imperfect Competition 2. General Theory of Employment, Interest and

Money 3. Principles of Political Economy 4. Wealth of Nations Code: (a) (b) (c) (d) (A) 2 3 4 1 (B) 3 4 1 2 (C) 4 1 2 3 (D) 1 2 3 416. Suppose that the world economy consists of two

countries, ‘Home’ and ‘Foreign’. A tariff imposed by the Home on its imports from the Foreign shifts

(A) Home’s offer curve to the right (B) Foreign’s offer curve to the right (C) Home’s offer curve to the left (D) Foreign’s offer curve to the left 17. Which one of the following is not correctly matched

in the case of India? (A) Revenue expenditure = Revenue receipts –

Revenue deficit (B) Primary deficit = Revenue deficit – interest

payments (C) Total receipts = Revenue receipts + Capital

receipts (D) Revenue receipts = Tax revenue + non-tax

revenue18. In the two-good Ricardian trade model, complete

specialization in production occurs in free trade equilibrium because

(A) the production possibility frontier satisfies increasing opportunity cost

(B) there are diminishing returns to the factor of production

(C) there are increasing returns to the factor of production

(D) the production possibility frontier satisfies constant opportunity cost

19. A progressive income-tax implies that— (A) the amount of tax falls with a rise in income (B) the rate of tax rises with a rise in income (C) Both (A) and (B) (D) the rate of tax decreases with a rise in income20. Consider the following statements: The Brettonwoods Conference led to the establishment

of 1. IMF 2. IBRD 3. United Nations Which of the above statements are correct? (A) 1 and 2 (B) 2 and 3 (C) 1 and 3 (D) 1, 2 and 321. Who was the Chairman of the Economic Advisory

Council of the Prime Minister of India? (A) Suresh Tendulkar (B) Jagdish Bhagwati (C) C. Rangarajan (D) Vijay Kelkar22. What is the correct sequence of the following? 1. Uruguay Round Talks 2. WTO’s Seattle Meet 3. Establishment of GATT Select the correct answer using the codes given

below:Code:

(A) 1, 2, 3 (B) 3, 1, 2 (C) 3, 2, 1 (D) 2, 3, 123. The distribution for which mean and variance are

equal is— (A) Poisson (B) Binomial (C) Normal (D) Gamma24. The Heckscher-Ohlin theory of trade pattern

assumes (A) perfect competition in the product markets but

not in the factor markets (B) perfect competition in the factor markets but not

in the product markets (C) perfect competition in both product and factor

markets (D) unemployment in the labour market25. The sum of the squares of deviations of the given set

of observations is minimum when taken from— (A) Mode (B) Median (C) Variance (D) Mean26. Marx refers to the concept of organic composition of

capital. Which one of the following ratios stands for this (where C is constant capital, V is variable capital and S is surplus value)?

(A) CV S( )+

(B) CV

(C) C

C V( )+ (D)

( )C VV+


27. Type I error is defined as— (A) Reject null-hypothesis when it is false (B) Reject null-hypothesis when it is true (C) Accept null-hypothesis when it is true (D) Accept null-hypothesis when it is false28. The “Big-push” strategy of development was first

advocated by (A) Rosenstein Rodan (B) Simon Kuznets (C) W. A. Lewis (D) A.O. Hirschman29. Neo-classical production function has which of the

following characteristics? (A) Positive and diminishing marginal productivities

of the factors. (B) Constant returns to scale. (C) SatisfiesInadaconditions. Choose the correct answer from the code below: (A) (A) and (B) (B) (A) and (C) (C) (B) and (C) (D) (A), (B) and (C)30. On the given diagram, which of the following segment

correctly depicts the supply curve of a producer?

A

Y

Output

Costs

AC

AVCB

C

D

O X

(A) DE (B) CB (C) AB (D) DB31. Marshallian Theory of Consumer’s Behaviour is

based on— (A) Hypothesis of additive utilities (B) Hypothesis of independent utilities (C) Both (A) and (B) (D) Weak ordering32. Consider the following statements: 1. Quartile deviation is more instructive range as

it discards the dispersion of extreme items 2. Coefficientofquartiledeviationcannotbeused

to compare the degree of variations in different distributions

3. There are 10 deciles for a series Which of the above statements is/are correct?

(A) 1, 2 and 3 (B) 2 alone (C) 3 alone (D) 1 alone33. A profit maximising firm will stop production in the

short-run if price is— (A) Less than the average variable cost (B) Less than the marginal cost (C) Less than the average total cost (D) Equal to the average total cost

34. Given the following date –1, 2, 3, 4 and 100; the best measure of central tendency is the

(A) arithmetic mean (B) median (C) mode (D) geometric mean35. With which of the following is the doctrine of excess

capacity, in the long run not associated? (A) Monopoly (B) Oligopoly (C) Monopolistic competition (D) Perfect competition36. Consider the following statements: 1. Correlation analysis helps in determining the

relationship between two or more variables –it does not tell us anything about the cause and effect relationship

2. The ratio of explained variation to the total variationiscalledthecoefficientofcorrelation

3. Pearsonian coefficient always assumes linearrelationship and is unduly affected by the extreme items

Which of the above statements is/are correct? (A) 2 alone (B) 1 and 2 (C) 1 and 3 (D) 2 and 337. In an Edgeworth production box, the only possible

positions of equilibrium is— (A) The isoquants are tangent to one another (B) The isoquants intersect each other (C) The marginal products of the inputs are equal (D) Both (B) and (C)38. From the cumulative frequency diagram which one

of the following types of average can be estimated? (A) Geometric mean (B) Harmonic mean (C) Median (D) Mode39. Which one of the following statements in case of

balanced budget multiplier is incorrect? (A) The value of balanced budget multiplier is unity

in case of autonomous taxes (B) The value of balanced budget multiplier is less

than unity, in case or proportional taxes (C) The value of balanced budget multiplier is always

unity no matter whether the taxes are autonomous or proportional

(D) The value of Government expenditure multiplier is more than the value of tax multiplier

40. Consider the following statements: 1. Median is not useful while dealing with skewed

distribution such as income distribution or price distribution.

2. Median can be determined graphically by drawing only one ogive.

3. Mode can be used to describe qualitative phenomenon.


Which of the above statements are correct? (A) 1 and 2 (B) 1 and 3 (C) 2 and 3 (D) 1, 2 and 341. Given that C = Currency with the public, DD =

Demand Deposits, TD = Time Deposits and R = Cash Balance with the Commercial Banks, then high powered money is defined as—

(A) C + DD (B) C + R (C) C + TD (D) C + DD + TD42. In the Indian context, which one of the following pairs

is not correctly matched? (A) Tax evasion : Parallel economy (B) High-powered money : RBI (C) Female work participation rate : Disinvestment (D) Privatisation economic : New Policy43. Based on accelerated-multipliers interaction, whose

theory of trade cycles generates constrained cycles? (A) Hicks (B) Kaldor (C) Samuelson (D) Baumol44. The prevailing strategy of irrigation in India

emphasizes (A) intensive exploitation of groundwater (B) conjunctive use of surface and groundwater (C) multipurpose river valley projects (D) exclusive utilization of canal water45. The practice of transfer pricing in the open economy

is resorted to by— (A) Mutual Funds (B) Institutional Investors (C) Multinational Corporations (D) Private Banks46. The correct sequence of the emergence of the

following institutions in the rural credit sphere in India is

(A) Commercial Banks, Cooperative Societies, RRBs

(B) Cooperative Societies, RRBs, Commercial Banks

(C) Cooperative Societies, Commercial Banks, RRBs

(D) RRBs, Cooperative Societies, Commercial Banks

47. The Human Development Index was first developed by—

(A) UNDP (B) IMF (C) UNICEF (D) UNCTAD48. Which one of the following is not an invisible item

of the current account of India’s balance of payments?

(A) Royalty payments (B) Capitalinflows (C) Software service exports (D) Private transfers49. Who is Director General of WTO? (A) Alan Greenspan (B) Roberto Azevedo (C) William Diamond (D) Eugine Black

50. Which one of the following sources provides the largest share of India’s external dept?

(A) IMF (B) USA (C) UK (D) Japan51. Consider a Cobb Douglas production function : q =

AKαLβwhichishomogeneousfunctionofdegree4. Of what degree of homogeneity are its marginal

products functions (mpl and mpk) i.e. δ

δδδ

q

LqL

, ? (A) 4 (B) 3 (C) 2 (D) 152. Non-performing assets of Commercial Banks mean

their loans (A) fetching very low rate of interests (B) for which interest/installment has remained

unpaid well after due date (C) which have not been disbursed at all (D) given to sick industrial units53. Which of the following gives measures of price

elasticity of demand?

(A) ∆∆QP

PQ

x

x

x

x

. (B) ∆∆

PQ

PQ

x

x

x

x

.

(C) ∆∆QP

QP

x

x

x

x

. (D) ∆∆

PQ

x

x

54. Which one of the following is not a source of the State tax revenue?

(A) Land revenue (B) Motor Vehicles tax (C) Entertainment tax (D) Corporate tax55. If the economy is in the liquidity trap, then: (A) Fiscal policy will be more effective (B) Monetary policy will be more effective (C) Crowding out effect will make fiscal and

monetary policy effective (D) None of the above Directions: Assertion (A) – Reason (R) questions in are to be answered based on the options given below:

Code: (A) Both A and R are individually true and R is the

correct explanation of A (B) Both A and R are individually 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 true56. Assertion (A): India’s Second Five Year Plan was

based on an outward-looking strategy of development.

Reason (R): The Second Five Year Plan was based on the Mahalanobis model.

57. IS curve represents— (A) Goods Market Equilibrium (B) Money Market Equilibrium (C) Bond Market Equilibrium (D) Labour Market Equilibrium

Practice Sets UGC NET /JRF /SETEconomics (Paper-II & III)

Publisher : Upkar Prakashan ISBN : 9789386791047 Author : Bipul Gopalan

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