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?

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

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

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

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

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

The Human Development Index was first developed by

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

The Law of Diminishing Returns to Scale holds true in the

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

The difference between the export and import of services is called

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.

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.

Assertion: Laspeyer’s index has an upward bias.

Reason: Paasche’s index has a downward bias.

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.

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.

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

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.

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

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

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

Pareto Optimality can take place at any point on

In case of proportional relation between consumption and income

Taxes raised are credited into

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.

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.

Paul Sweezy used kinked demand curve to explain

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

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

Excess burden of tax means

The probability distribution in which mean and variance are equal

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.

Assertion: Neutral taxes are feasible.

Reason: Neutral taxes have no excess burden.

Chamberlin introduced the concept of cost known as

Knife-edge problem arises in

The term of Hindu rate of growth was coined by

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

Reason: Individuals are generally averse to risk.

Assertion: Indifference curve are convex to the origin.

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

Assertion: Price leadership is tacit.

Reason: Open collective agreements are illegal in most countries.

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

During the Great Depression

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

Keynes’ prescription to fight global depression was that

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

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

Disposable income in national accounts is calculated as

Physical Quality of Life Index was calculated by

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

The numerical value of balanced budget multiplier is

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

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

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

Mesokurtic distribution is also known as

The firms in the modern world, use reserve capacity to

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

The concept of multiplier was introduced for the first time by

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

Unlimited supply of labour presumes

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

Which of the following is not a measure of dispersion?

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

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.

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

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

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

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

If there are no demand or supply shocks

Capital per person decreases if investment per person

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

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

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

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

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

The most comprehensive measure of the aggregate price level is the

Keynesian economics lays more emphasis on

The trade-off between inflation and unemployment remains stable only

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

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

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

Psychological law of consumption is associated with the name of

IRR is the rate of discount which makes

Which of the following is inconsistent with steady state growth?

Which of the following is a type of probability sampling?

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.

Assertion: Global per capita incomes are showing divergence.

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

Payment of interest as a factor reward is explained by

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.

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

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

The shape of Laffer Curve is

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

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

According to Leontief’s study

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

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

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.

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

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

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