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?
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.
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.
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
30. According to Marx increase in the organic composition of capital leads to
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.
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
47. Disposable income in national accounts is calculated as
49. Which one of the following is NOT an objective of fiscal policy?
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.
68. If there are no demand or supply shocks
69. Capital per person decreases if investment per person
71. If one of two countries has an absolute advantage in the production of every commodity, then
73. Fisher’s formula for constructing index numbers is termed as ideal because
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
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
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.
90. Which of the following equation satisfies the condition of stable growth in Harrod-Domar model
92. If the elasticity of demand for a good is greater than the elasticity of supply for the good, then
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.
99. For two events A and B, P(A or B) = P(A) + P(B), when