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UGC NET Economics Mock Test 2
UGC NET Economics Mock Test by Economics Harbour
Instructions:
The test will be for 2 hours and has 100 questions, all of which are compulsory.
Please note, you will be allowed to attempt this test ONCE.
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1.
An economic coalition among countries within a geographic region, usually characterised by liberalised internal trade and uniform restrictions on external trade, designed to promote regional economic integration and growth is called
Trading bloc
Regional trading bloc
Regional coalition
Bloc coalition
2.
The classical economists assumed _____ in the rate of exchange.
Flexibility
Stability
Relativity
None of the above
3.
If the physical volume of exports increases more than in proportion to the fall in the export prices, the income terms of trade improves even when
Export prices decline
Import prices remain constant
Import prices decline
Both A and B
4.
The classical economists assumed a
Downward sloping saving schedule.
Upward sloping saving schedule
Upward sloping investment schedule
None of the above
5.
If an economy is interested in raising the rate of growth of income in the short period it should
Devote a higher proportion of investable surplus on the production of consumption goods.
Devote a higher proportion of investable surplus on the production of various goods.
Devote a higher proportion of investable surplus on capital goods.
Devote a higher proportion of investable surplus on social services.
6.
Range, which is the simplest measure of dispersion, is used a great deal in
Census estimates
Price fluctuations
Quality control
None of the above
7.
Quite often when production is expanded, ____ units of ____ factors of production are used.
Relatively more efficient, different.
Relatively more efficient, same
Relatively less efficient, different
Relatively less efficient, same
8.
Primary product export dependence has an unstable effect on the economy because of
degree of risk
supply constraints
uncertainty
Both A and C
9.
Rootless growth causes
People’s cultural identity to wither
Fruits of economic development benefitting the rich only.
Squandering of resources by present generation so that nothing is left for future generation.
None of these
10.
The ____ elasticity is a measure of average elasticity.
Point
Price
Income
Arc
11.
Law of growth or the exponential law is most useful in economics in case of
Consumption pattern
Income earned from rate of interest
Population growth
None of the above
12.
If organised sector employment is largely urban employment, then the relatively high rate of growth of urban employment is due to
increase in urban informal sector employment.
decrease in rural formal sector employment.
increase in urban formal sector employment
increase in rural informal sector employment.
13.
The Small Industries Development Organisation was set up in
1950
1956
1954
1958
14.
Income effect and substitution effect can be traced from
Income consumption curve
Total utility curve
Marginal utility curve
Price consumption curve
15.
Price elasticity at the mid-point of a linear demand curve is
1
0
-1
Infinity
16.
Expansion in demand is concerned with
Movement along the demand curve
Shift in the demand curve
Upward shift in the supply curve
None of the above
17.
If the slope of Average Cost Curve is positive then
MC
MC>AC
MC=AC
MC=0
18.
A fall in interest will produce the best effect on investment if investment demand schedule is
Inelastic
Infinitely inelastic
Elastic
Infinitely elastic
19.
The value of marginal revenue at unit elasticity is
Maximum
One
Zero
Minimum
20.
The level of utilisation of the plant which firms consider as “normal” is called
Economy factor
Exhaust factor
Load factor
None of the above
21.
“Reflation” refers to
Rise in prices after stage of full employment.
Rise in prices with corresponding increase in production and employment.
Rise in prices before stage of full employment.
Both A and C
22.
The concept of net barter terms of trade ignores the impact of
changes in the composition of trade
changes in the quality of exports and imports.
changes in the level of exports and imports.
All of the above
23.
Each isoquant represents
Different combinations of two variable inputs capable of producing greater quantities of output.
Different combinations of two fixed inputs capable of producing a given output.
Different combinations of two variable inputs capable of producing a given output.
Different combinations of inputs and outputs.
24.
Who defined full employment as “that level of employment at which any further increase in spending would result in an inflationary spiral of wages and prices”?
Keynes
Marshall
A.P. Lerner
None of the above
25.
The higher the economy’s capital-output ratio the _____ will be rate of GNP growth.
Higher
Lower
Same
None of the above
26.
Deficit financing is a technique
that enable the government to incur expenditure beyond its current revenues.
in which public expenditure exceeds capital revenues
in which excess public expenditure is equal to fiscal deficit.
None of these
27.
Relationship between Arithmetic, Geometric and Harmonic Mean is
AM ≤GM≤HM
AM > GM > HM
AM ≥ GM ≥ HM
HM > GM > AM
28.
According to A.P. Rao, Krishna Bhardwaj and Usha Rani, farm size does
not affect productivity
affect productivity inversely
affect productivity proportionately
none of the above
29.
Which of the following is NOT the assumption of Say’s Law of Markets?
There is no saving and no hoarding of money.
There is no government expenditure or taxation.
The economy is a closed economy.
Savings always equal investments.
30.
Those cash payments which firms make to outsiders for their services and goods are called
Real costs
Social costs
Explicit costs
Implicit costs
31.
Net indirect taxes is calculated by
deducting subsidies from total indirect taxes.
adding subsidies to total indirect taxes
deducting subsidies from total taxes
adding subsidies to total taxes
32.
Which is the primary source of energy in India?
Coal
Mineral oils
Hydro-electricity
Nuclear energy
33.
When aggregate supply price exceeds aggregate demand price, employment level shows a tendency to
fall
rise
Remain same
none of the above
34.
Development of indigenous technologies appropriate to a country’s resource endowment is a policy that is
Outward looking
Inward looking
Forward looking
Domestic
35.
The net barter terms of trade, also called the commodity terms of trade measures
the ratio of import and export prices
the relative changes in the import and export prices
the ratio of the quantities of import and export.
Both A and B
36.
Which of the following is emphasised upon in the income theory of value of money?
Aggregate consumption
Aggregate investment
Money supply
All of the above
37.
A bank with a large proportion of demand deposits may have to
Maintain more capital stocks
Maintain a more liquid asset portfolio
Give more loans and advances
Invest in real estate
38.
The concept of economic planning in a narrow sense implies
existence of an economic system in which production unit uses only the productive resources allocated to it, and disposes off its product according to the directive from the central authority.
Merely laying down the targets for some public and/or private enterprise.
Setting of targets for the economy as a whole, purporting to allocate the country’s resources between the various branches of the economy.
None of the above
39.
The concept of primary deficit, calculated by subtracting the total interest payments from the fiscal deficit, was introduced for the first time in the
1993-94 budget
1991-92 budget
1992-93 budget
1994-95 budget
40.
Since most of the households save a part of their income, the average propensity to consume is
Equal to one
Less than one
More than one
None of the above
41.
‘Subsistence fund’ refers to which of the following instances?
Fund used for subsistence consumption.
Output of the country’s essential commodities.
Savings effected by shifting erstwhile unemployment or disguisedly unemployment labour to formation of capital.
None of the above
42.
International Development Association was established on 24 September
1960
1970
1980
1990
43.
Behaviouristic theory is based on
Theory of consumer behaviour
Revealed preference theory
Utility theory
All of the above
44.
As employment expands, producers expect correspondingly ____ amounts of proceeds.
Lower maximum
Lower minimum
Higher minimum
Higher maximum
45.
The sign of the cross elasticity of demand is____ if both the goods are complementary.
Positive
Negative
Zero
Either negative or positive
46.
The new development strategy assumes
trade as an engine of growth
public sector investment as an engine of growth.
rural development and population control as an engine of growth.
None of these
47.
What is the relationship between mean, median and mode?
Mean – Mode= 2(Mean-Median)
Mean – Mode = 3(Mean-Median)
Mean + Mode = 3(Mean-Median)
Mode=2(Mean-Median)
48.
The increasing part of the SAVC curve reflects
Reduction in labour productivity
Reduction in capital productivity
Diseconomies
Higher wages
49.
The study of price determination of the price of a single product on the assumption that the other prices are constant or given is a case of
General equilibrium
Partial equilibrium
Both general and partial equilibrium
None of the above
50.
The International Monetary Organisation was established on December 27, 1945 in
Paris
New York
Geneva
Washington
51.
The total area at various points on the average fixed cost curve shows
Same TFC
Different TFC
Same AFC
None of the above
52.
In international trade perfect equality of prices can hardly be achieved because of
the existence of transport costs
the absence of free trade
the absence of perfect competition
All of the above
53.
Who estimated the number of persons below the poverty line on the basis of an average calorie intake of 2250 per capita per day?
Mr. P.D. Ojha
Dr. P.K. Bardhan
Dr. B.S. Minhas
Mr. Montek Ahluwalia
54.
The real terms of trade may rise as a result of a change in the
methods of producing exports
factor proportions used in exports
Both A and B
method of producing import substitution
55.
What type of rate is the Current Daily Status Unemployment rate?
Time rate
Person rate
Both A and B
Wage rate
56.
The demand effect of economic development refers to the
Increase in demand for imports
Increase in demand for exports
Decrease in supply of imports.
Decrease in supply of exports
57.
In India, fiscal imbalance has been caused mainly by imprudent increase in
Public expenditure as a whole.
Defence
Salaries and allowances of government machineries.
Economic sanctions imposed by the USA after 1998 nuclear tests
58.
The Asian Development Bank was established in December 1946 and started its functions on January 1
1967
1968
1969
1970
59.
General equilibrium theory does not help in
Single market analysis
Analysis of mutually interdependent markets.
Optional allocation of resources
Resolving macroeconomic controversies
60.
When output increases as a result of expansion in employment, aggregate demand increases at a
diminishing rate
increasing rate
constant rate
none of the above
61.
Ricardo showed that as long as the price ratios differ between countries, in the absence of trade, every country will have ______ advantage.
Absolute
Relative
Comparative
Real
62.
Deficits on current account in the balance of payments refers to
excess of export receipts to import payments.
excess of import payments over export receipts
import payments
export receipts
63.
Secondary deposits refers to
Term deposits
Recurring deposits
Fixed deposits
Deposits created through lending
64.
Price elasticities at a price on two straight line demand curves originating from the same point on the ____ are equal.
Price axis
Quantity axis
Consumption axis
Income axis
65.
According to John W. Mellor, the new technology reduces the cost of food production and thereby lowers down the food prices and increases demand for labour and thus the effects of new technology are
Highly favourable to the poor
Highly favourable to the rich
Equally favourable to all
None of the above
66.
Which of the following is an inversely U-Shaped curve?
Average product curve
Total product curve
Marginal product curve
Average cost curve
67.
Dualistic development thesis focuses on coexistence which is
Flexible
Transitory
Erratic
Chronic
68.
Increasing marginal product, when one input alone increases, could be due to
Increase in price
Advantages of indivisibilities
Advantages of specialisation
Both A and C
69.
When the given values of X form a geometric progression and X values form an arithmetic progression, the relationship between the variables is given by a/an
Lemon function
Lemon homogenous function
Binomial function
Exponential function
70.
The proportion of a country’s national income that is devoted to consumption is called
Average consumption of the nation
Average propensity to consume
Marginal propensity to consume
None of the above
71.
Stagflation is a state of the economy in which economic activity is
Slowing down, but wages and prices continue to rise.
Increasing, but wages and prices fall.
Increasing, and wages as well as prices also increase.
None of the above
72.
Production possibility curve assumes constancy of the following:
Efficiency of factors of production only
Resource availability only
Nature of technology, efficiency of factors of production and resources available.
Technology only
73.
The sum obtained after discounting the expected future yields over the entire life of a machine at the market rate of interest is known as its
Market price
Supply price
Cost price
Present value
74.
“Warranted growth” of Harrod-Domar guarantees
Full utilisation of capital and full employment of labour
Full employment of capital but not full employment of labour
Full employment of labour but not full employment of capital
Neither full employment of labour, unlike in advanced economies
75.
Which of the following can be defined as the percentage by which the entire set of a nation’s trade barriers raises the industry’s value added per unit of output?
Consumption effect of tariff
Effective rate of protection
Production effect of tariff
Ad Valorem tariff
76.
Increasing opportunity cost leads to
marginal costs inequality between countries.
marginal costs equality between countries.
increasing marginal costs in both countries.
decreasing marginal costs in both countries.
77.
Labour-deepening technical progress increases the MP(L)
Faster than the MP(K)
Slower than the MP(K)
At the same rate as the MP(K)
None of the above
78.
Which of the following is correct?
Planning in India derives its objectives and social premises from the Directive Principles of State Policy enshrined in the constitution.
Public and private sectors are viewed as complementary.
The private sector covers, besides organised industry, small-scale industries, agriculture, trade and housing, construction and related areas.
All of the above
79.
The aggregate supply response of agriculture in India is
weak
strong
weak in some areas and strong in others
moderate
80.
Real income effect leads to
Movement to a lower indifference curve
Movement to a higher indifference curve.
No change on indifference curve
Change of position on the same indifference curve.
81.
Full employment implies
Presence of involuntary unemployment
Absence of involuntary unemployment
People are willing to work at prevailing wages but fail to find work.
Absence of frictional unemployment
82.
In the third stage of demographic transition
the birth rate declines significantly and thus the rate of population growth remains low.
Only death rate declines and it is more than birth rate, as a result population growth rate declines.
Only death rate declines and there is no considerable decline in birth rate, as a result, population grows at a higher rate.
None of these
83.
A budget surplus will lead to
An injection to the circular flow of income.
A net leakage from the circular flow of income.
Income level will increase
No change in income levels
84.
The States have been requested to take the following measure to empower the Gram Sabha
to ensure that Gram Sabha should meet at least once in each quarter.
Gram Sabhas should have full powers for determining the priorities for various programmes.
Panchayats should be made accountable to Gram Sabha in unequivocal terms.
All of the above
85.
The problem of cyclical unemployment in developed economies originates from
demand side
supply side
investment side
savings side
86.
The vertical distance between average total cost curve and average variable cost curve goes on _____ as output level increases.
Increasing
decreasing
same
none of the above
87.
Supernormal profit refers to
High proportion of net profit
Minimum necessary profit to induce an entrepreneur to remaining in business.
Unexpectedly high profits.
Residual surplus
88.
What is considered as relatively stable in the Keynesian theory of employment?
The aggregate demand function
The aggregate supply function
Both A and B
Rate of interest
89.
Median and mode both are called
mathematical averages
positional averages
complicated averages
frequent averages
90.
Investment function is given by (I = Investment, i= interest rate, F and G = coefficients)
I = F – Gi
I = F + Gi
I = F/Gi
I = -Gi
91.
According to Keynes, the aggregate demand is made up of
consumption and investment
consumption and income
consumption and saving
income and investment
92.
The objectives of United Nations Conference on Trade and Development are
To promote international trade especially with a view to accelerating the economic development of under-developed countries.
To determine policies and principles for international trade and economic development.
To propose the strategy for implementing pre-approved principles and policies.
All of the above
93.
At an income level higher than the critical level, income raising forces are _____ than/as income depressing forces.
Higher
Lower
Same
None of the above
94.
An export duty hurts exporting producers more than it helps consumers or gives revenue to the government, leaving a net cost to the nation, if the nation faces a ____ world price for its exports.
Flexible
Fixed
Decreasing
Increasing
95.
Suppose a given family had an income of Rs. 10,000 and saved Rs. 500. What would be its average propensity to consume?
95%
90%
85%
50%
96.
The single factoral terms of trade is the net barter terms of trade adjusted for changes in the efficiency of a country’s factor in the
import industries
export industries
Both A and B
Import substitution industries
97.
Which of the following would not be termed “Near Money”?
Bills of exchange
Rs. 2000 notes
Treasury bills
Debentures
98.
The alternative formulation of the comparative cost doctrine developed by Hecksher and Ohlin explains
Why comparative cost exists
Why comparative cost differences exist internationally
Why comparative advantages exist
All of the above
99.
Something which is freely used and generally accepted as a medium of exchange and as a unit of account is called
Money
Capital
Assets
Wealth
100.
“Flight from money” refers to
Disappearance of liquid money from the market.
Accumulation of fixed assets.
Desire among people to get rid of money
Reduction in velocity of money.
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