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UGC NET Economics Mock (January 2021)

Welcome to the UGC NET Economics Online Mock Exam conducted by Economics Harbour.

Pattern:

100 Questions

Time: 2 hours

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1.

Consider the following statements:



  1. When MC curve is below the AC curve then the AC curve must be rising.

  2. When MC curve is above the AC curve, then the AC curve must be falling.

  3. MC curve intersects AC curve at the point where AC is constant.


Which of the above statements is/are correct?

2.

In an Edgeworth production box, the only possible positions of equilibrium is

3.

Which one of the following statements in case of balanced budget multiplier is incorrect?

4.

Given that C = currency with the public, DD = Demand Deposits, TD = Time Deposits and R = Cash balances with the commercial banks, then high powered money is defined as

5.

Based on accelerator-multiplier interaction, whose theory of trade cycles generates constrained cycles?

6.

The practices of transfer pricing in the open economy is resorted to by

7.

The Human Development Index was first developed by

8.

Which one of the following is not an instrument of fiscal policy?

9.

The Law of Diminishing Returns to Scale holds true in the

10.

Raul Prebisch’s argument is concerned with the effects of business cycles on

11.

The difference between the export and import of services is called

12.

Assertion: Under monopolistic competition, the long run average revenue of a firm is tangent to the negatively sloping portion of the long run average cost curve.


Reason: The demand curve facing the firm under monopolistic competition is relatively more elastic.

13.

Assertion: According to Gunnar Myrdal, there exists a circular and cumulative causation in under-developed countries.


Reason: There is a mutually reinforcing interaction between low living levels and low productivity.

14.

Assertion: Laspeyer’s index has an upward bias.


Reason: Paasche’s index has a downward bias.

15.

Assertion: In a bell-shaped distributive curve, the value of Mean, Median and Mode would be identical.


Reason: There is no skewness in the series.

16.

Assertion: Colin Clark hypothesised that the safe upper limit of taxation is 25 per cent of national income.


Reason: The excess burden of taxation will be very high if it goes beyond the 25 per cent limit.

17.

The sequence of operation of the transmission of a change in monetary policy is



  1. Changes in real money supply

  2. Adjustment in output

  3. Adjustment in spending

  4. Changes in interest rates and asset prices

18.

Assertion: Cumulative causation is an explanation of backwardness of developing nation. It is a hypothesis of geographical dualism.


Reason: Expansion in a favoured region has a backwash effect on other regions causing regional disparities.

19.

The value of Special Drawing Right at present is determined in the international market by

20.

The geometric mean of the numbers 2, 4, 0, 16, 32 will be equal to

21.

A weighted price index that uses the arithmetic average of the base period and given period quantities as weights is known as

22.

Pareto Optimality can take place at any point on

23.

In case of proportional relation between consumption and income

24.

Taxes raised are credited into

25.

Assertion: Giffen goods have a positively sloped demand curve.


Reason: The positive substitution effect in their case is more than offset by negative income effect.

26.

Assertion: According to Hicks, trade cycle occurs due to the interaction etween multiplier and accelerator.


Reason: In Hicksian business cycle theory, accelerator is impotent in the depression phase.

27.

Paul Sweezy used kinked demand curve to explain

28.

According to Milton Friedman quantity theory of money is the theory of

29. Your new question!
30.

According to Marx increase in the organic composition of capital leads to

31.

Excess burden of tax means

32.

The probability distribution in which mean and variance are equal

33.

Assertion: In the heydays of planning, Amartya Sen advocated the advocated the adoption of capital intensive technique for Indian.


Reason: India was a relatively labour abundant country.

34.

Assertion: Neutral taxes are feasible.


Reason: Neutral taxes have no excess burden.

35.

Chamberlin introduced the concept of cost known as

36.

Knife-edge problem arises in

37.

The term of Hindu rate of growth was coined by

38.

Assertion: An individual values mean return on investment, but dislikes variance.


Reason: Individuals are generally averse to risk.

39.

Assertion: Indifference curve are convex to the origin.


Reason: The Law of Diminishing Marginal Utility is excepted in the discipline of Economics.

40.

Assertion: Price leadership is tacit.


Reason: Open collective agreements are illegal in most countries.

41.

Read the passage given below and answer the following questions


The more difficult task of ensuring global economic stability was assigned to the IMF. Those who convened Bretton Woods had the global depression of the 1930s very much on their minds. Almost three quarters of a century ago, capitalism faced the most severe crisis to date. The Great Depression enveloped the whole world and led to unprecedented increases in unemployment. At the worst point, a quarter of America’s workforce was unemployed. The British Economist John Maynard Keynes, who would later be a key participant at Bretton Woods, put forward a simple explanation, and a corresponding simple set of prescriptions; lack of sufficient aggregate demand explained economic downturns; government policies could help stimulate aggregate demand. In cases where monetary policy is ineffective, governments could rely on fiscal policies, either by increasing expenditures or cutting taxes. While the models underlying Keynes’ analysis have subsequently been criticised and refined, bringing a deeper understanding of why market forces do not work quickly to adjust the economy to full employment, the basic lesions remain valid.


The IMF was assigned

42.

During the Great Depression

43.

According to Keynes, the cause for the unprecedented global depression of the 1930s was

44.

Keynes’ prescription to fight global depression was that

45.

A ridgeline is a locus of such points where marginal productivity of a factor input is

46.

Square root formula for money demand was developed by which of the following



  1. Milton Friedman

  2. James Tobin

  3. A.C. Pigou

  4. William Baumol

47.

Disposable income in national accounts is calculated as

48.

Physical Quality of Life Index was calculated by

49.

Which one of the following is NOT an objective of fiscal policy?

50.

The numerical value of balanced budget multiplier is

51.

If taxes are levied according to ability-to-pay theory it leads to

52.

Given the two regression lines Y on X and X on Y as follows:


3X + 2Y = 26.0


6X + Y = 31.0


Then their ‘r’ will be equal to

53.

In testing a given hypothesis the maximum P with which we would be willing to risk a type I error is known as

54.

Mesokurtic distribution is also known as

55.

The firms in the modern world, use reserve capacity to

56.

If demand curve assumes the shape of a rectangular hyperbola, price elasticity is equal to

57.

The concept of multiplier was introduced for the first time by

58.

For a planner, in the context of choice of techniques, the property of technique is dictated by

59.

Unlimited supply of labour presumes

60.

Devaluation, will improve the balance of payment deficit, if sum of elasticity of exports and imports of the devaluing country is

61.

Which of the following is not a measure of dispersion?

62.

If a change in price gives us different values of elasticity for a rise and fall in price, we are then using

63.

Assertion: When the IS curve is not vertical, monetary policy cannot change the level of aggregate demand.


Reason: Monetary policy depends on the existence of some interest-sensitive spending for its success.

64.

Marshallian demand curve can be derived with the use of revealed preference theory if one of the following is ignored

65.

A given total outlay on factor inputs available at given prices is reflected by

66.

Utility function for a consumer is monotonically increasing in the quantities consumed of a single available commodity. Such a utility function is always:

67.

Which among the following does not constitute a source of growth in potential output?

68.

If there are no demand or supply shocks

69.

Capital per person decreases if investment per person

70.

The economist who said that international trade was based on the principle of absolute advantage is

71.

If one of two countries has an absolute advantage in the production of every commodity, then

72.

A one rupee coin and a five rupee coin are tossed simultaneously. If one of the coins has turned up heads, then the probability that both coins turn up heads is

73.

Fisher’s formula for constructing index numbers is termed as ideal because

74.

Which of the following factors does not stall the entry of other firms in an oligopolistic industry?

75.

The most comprehensive measure of the aggregate price level is the

76.

Keynesian economics lays more emphasis on

77.

The trade-off between inflation and unemployment remains stable only

78.

If the rupees per US dollar exchange rate changes from Rs. 44 to Rs. 46 in a year by the market forces, it implies

79.

The Bretton-Woods System finally collapsed at the global level in the year

80.

Hecksher-Ohlin theory of international trade explains the emergence of trade among the partners based on

81.

Psychological law of consumption is associated with the name of

82.

IRR is the rate of discount which makes

83.

Which of the following is inconsistent with steady state growth?

84.

Which of the following is a type of probability sampling?

85.

Assertion: Devaluation, other things being equal, helps in reducing the deficit in the balance of payments of a country.


Reason: It lowers down the prices of exports and increase the prices of imports.

86.

Assertion: Global per capita incomes are showing divergence.


Reason: The saving ratios and rates of population growth differ across the nations

87.

Payment of interest as a factor reward is explained by

88.

Assertion: At lower rate of interest, there is greater inducement to invest, according to Keynes.


Reason: At lower rate of interest, supply price of capital is low.

89.

Which of the following does not affect the volume of money supply in the economy

90.

Which of the following equation satisfies the condition of stable growth in Harrod-Domar model

91.

The shape of Laffer Curve is

92.

If the elasticity of demand for a good is greater than the elasticity of supply for the good, then

93.

When marginal propensity to consume is 0.75, the value of the balanced budget multiplier is

94.

According to Leontief’s study

95.

If MPC is 0.8, and marginal propensity to import is 0.3, an autonomous increase in exports of Rs 100 will lead to an increase in national income by

96.

When the fluctuations of two time series are negatively correlated, then

97.

Assertion: For large samples, mean can be tested using standard normal distribution.


Reason: When original population has normal distribution, mean of a sample from this population has t-distribution.

98.

Two alternatives X an Y have equal expected value but Y has higher variance than X, A person choosing Y over X is a

99.

For two events A and B, P(A or B) = P(A) + P(B), when

100.

Monetary expansion can still be effective in getting out of liquidity trap if it is combined with