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UGC NET Economics Previous Year Papers – 1
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1.
If marginal propensity to import is 0.1 and the marginal propensity to consume is 0.7, the value of income multiplier will be
1.25
2.33
2.5
3.33
2.
Which of the following statements about the AK model (Y = AK) of growth is false?
This is a part of endogenous growth theories.
The model assumes that an increase in the phsyical stock of capital will shift the production function upwards
The model assumes diminishing returns to capital
The model suggests that if the level of investment is higher than depreciation, there would be sustained growth.
3.
Match List 1: Concept with List 2: Economist
a. Profit as a dynamic surplus (i) J. Schumpeter
b. Profit as reward for innovation (ii) M. Kalecki
c. Profit as reward for uncertainty bearing (iii) F.H. Knight
d. Profits arise due to monopoly power enjoyed by the producer (iv) J.B. Clark
Answer in the way which matches the order
a b c d
(ii) (i) (iii) (iv)
(iv) (i) (iii) (ii)
(iv) (ii) (iii) (i)
(iii) (iv) (ii) (i)
4.
Which of the following is often referred to as the 'hedonic price' method for valuing environmental assets?
Using linkages between variations inhouse prices and geographical proximity to an environmental asset
Using 'existence value' to estimate the value of an environmental asset.
Using travel costs to estimate the value of an environmental asset.
Using 'willingness to pay' to value an environmental asset.
5.
Prebisch-Singer Hypothesis relates to
Balance of payments problem of developing countries.
Terms of trade of developing countries.
Prevalency of poverty among developing countries.
Inequality of income in developing countries.
6.
If the sample survey of the same 100 households is conducted in a particular village, annually for five years, the data so collected will be described as
Time series data
Cross-section data
Panel data
Pooled time series data and cross sectional data
7.
Which of the following is not the correct feature for the absolute convergence to hold good?
Same population growth rate
Same savings propensity
Same capital-labour ratio
Different capital-labour ratio
8.
Maximum social advantage is achieved when
Total Social Sacrifice = Total Social Benefits
Marginal Social Sacrifice = Marginal Social Benefits
Net Social Sacrifice = Net Social Benefits
Average Social Sacrifice = Average Social Benefits
9.
Gilt-edged market means
Bullion market
Market of pure metals
Market of government securities
Market of commodities
10.
Which of the following statements are correct about the Finance Commission in India?
a. Finance Commission is constituted under Article 275 of the Constitution.
b. The provision for Grants-in-aid to the states are provided under Article 280.
Which of the above statements is/are correct?
Only a
Only b
Both a and b
Neither a nor b
11.
"Workers must own the capital to which their savings has given rise.' This is an important assumption of the growth model developed by
L. Pasinetti
N. Kaldor
R. Solow
J.E. Meade
12.
In the last decade, which one among the following sectors has attracted the highest FDI inflows in India?
Telecommunication sector
Defense sector
Service Sector
Insurance sector
13.
According to Mercantilists, trade is a
Positive sum game
Infinite sum game
Zero sum game
Negative sum game
14.
If export price increases by 5 per cent and import prices by 20 per cent, the commodity terms of trade is
0.91
0.87
0.25
4
15.
Consider the following statements:
a) Effective demand in the market is the demand for a product or service which occurs when purchasers are constrained in a different market.
b) Notional demand is the demand that occurs when purchasers are not constrained in any market.
Which of the above statements is/are correct?
Only a is correct
Only b is correct
Both a and b are correct
Neither a nor b are correct
16.
When an information asymmetry is observed after an agreement is obtained between individuals, it is called
Signalling
Moral Hazard
None of the above
Both A and B
17.
Which of the following would cause Rupee to depreciate against U.S. Dollar, other things being equal?
A rise in interest rate in India
A fall in incomes in USA
An expected rise in the expected value of rupee
An increased flow of foreign investment in India
18.
There is incomplete specialisation in production when country faces
constant opportunity cost
decreasing opportunity cost
increasing opportunity cost
indeterminate opportunity cost
19.
Which among the following economists can be classified as strong advocate of protectionist policy of trade?
F. List and A. Hamilton
Adam Smith and David Ricardo
J.S. Mill and P. Krugman
A. Hamilton and J.S. Mill
20.
Which one of the following committees recommended to establish the National Bank for Agriculture and Rural Development?
Narsimham Committee
Chakravarti Committee
Abhijit Sen Committee
Shivaraman Committee
21.
Palma ratio is a measure of
Inequality of income
Stock market volatility
Morbidity in a region
Volatility of crop prices
22.
For the capitalist economy, the primary objective of the New Classical Economics is to explain which of the following?
Business cycle phenomenon
Underemployment
Wage-price rigidity
Effectiveness of government policy
23.
Which of the following is likely to be most inflationary in its impact?
Repayment of public debt
Borrowings from the public to finance a budget deficit.
Borrowings from banks to finance a budget deficit.
Creating new money to finance a budget deficit.
24.
Which amongst the following would be most effective in mitigating the effect of externalities?
Fiscal policy
Regulation of monopoly
Active monetary policy
Freeing the markets
25.
The share of agriculture in the GDP of India has declined over the years. Which of the following is not a correct reason for this?
Relatively faster rate of growth of non-agricultural sectors in the economy
Stagnant of slow rise in yield of agricultural commodities.
Educated rural youths are not opting for agriculture as an occupation
Low value addition in case of agricultural commodities
26.
Who argued that Keynes' theory of equilibrium with involuntary unemployment is a special case of the general equilibrium model, augmented to include money?
W. Leontief
J.R. Hicks
M. Friedman
D. Patinkin
27.
In the context of doubling of farmers' income objective, which of the following is not correct?
The target year is 2022-23
It is real income which is to be doubled
Income from cultivation alone is to be doubled.
Diversification of agriculture is to be promoted to achieve this objective.
28.
Simplex method of solving Linear Programming problems was developed by
Koopmans
Dantzig
Leontief
Solow
29.
In Solow's growth model, the output per capita is a function of
Labour-Output ratio
Capital-Output ratio
Technical Progress
Capital Labour ratio
30.
If economic agents perfectly anticipate policy changes and if all prices, including wages are completely flexible, which one of the following will be true in the long run?
There will be no trade-off between inflation and unemployment.
The unemployment rate will be less than the natural rate of unemployment
The price level will be constant
Changes in the money supply will not lead to changes in the price level.
31.
Which of the following statements about India's balance of payments is not correct?
If a foreign citizen deposits some money in a bank in India, the accounts regard this as a credit.
The current account balance shows only the balance for trade in goods and services combined.
Allowing for errors and omissions, the accounts always balance
If the country's reserves of foreign currencies increase then there is a minus sign for this entry.
32.
Generalised least square method of estimation will not be suitable for dealing with which of the following problems
a. Autocorrelated disturbances
b. Heteroscedastic disturbances
c. Multicollinearity
d. Errors in variables
a only
b only
c and d
a and b
33.
If marginal propensity to consume = average propensity to consume for all levels of income then the corresponding consumption function will be
C = a + bY
C = bY
C = bY2
C = a + bY2
34.
Which of the following is a capital receipt in the government budget?
Interest receipts on loans given by the Government to other parties.
Dividend and profit of public enterprises
Borrowings of the government from the public
Property tax receipts
35.
Which of the following goods is covered under GST as on July 1, 2017?
Electricity
Liquified Petroleum Gas
High Speed Diesel
Petroleum Crude
36.
Which amongst the following pairs is not correctly matched?
Gender development Index - UNDP
Ease of doing business - World Bank
Inclusion Index - World Economic Forum
World Hunger Index - United Nations
37.
The relationship described by the Expectations-Augmented Phillips Curve is correct in which of the following?
Only in the long run
Only in the short run
Both in the short run and the long run
Neither in the short run nor in the long run
38.
'Menu costs' in relation to inflation refers to
Cost of revaluing currency
Cost of altering price lists
Cost of the maintenance of monetary base
Cost of finding better rates of return
39.
Who made a statement that "Inflation is everywhere and always a monetary phenomenon"?
Milton Friedman
James Tobin
T.W. Swan
A. W. Phillips
40.
In the context of oligopoly, consider the following statements
a. Cournot's equilibrium is a nash equilibrium.
b. Stackelberg equilibrium is a nash equilibrium.
Select the correst answer from the code given below
Only a.
Only b
Both a and b
Neither a nor b
41.
Let elasticity of demand for exports for a certain country be x and elasticity of demand for imports be m. Assume that the country devalues its currency. Its balance of payments will almost certainly show an improvement if
x + m > 1
x + m < 1
x + m = 1
x = m = 1
42.
A country can have an increased surplus in its balance of trade as a result of
declining imports and rising exports
higher tariffs imposed by trading partners
an increase in domestic inflation
an increase in capital inflow
43.
Which of the following will be true for both monopoly and monopolistic competition in the short run?
Price is greater than marginal revenue
Price is equal to marginal revenue
Price is equal to marginal cost
Price is equal to average cost
44.
In a multiple linear regression with 4 independent variables, the overall regression's significance is to be tested. Which test would be used?
Z test
F test
Chi-square test
t test
45.
After the price change, the price line moves outwards on the X-Axis while the origin on Y-axis remains the same. According to the new equilibrium, the consumer now purchases more of the good labelled on Y-axis and lesser of the good labelled on x-axis. Imagine the diagram and state what is true for the good labelled on X-axis?
It is a normal good
It is an inferior good
It is a giffen good
Nothing can be said about the nature of the good
46.
Leibenstein in his critical minimum effort thesis treats population as a factor that is
Income-generating
Investment inducing
Income depressing
Market expanding
47.
The first fundamental theorem of Welfare economics requires
that there be an efficient market for every commodity
that the economy operates at some point on the utility possibility curve
consumers and producers to be price takers
All of the above
48.
If in a distribution, mean is 40, mode is 60 and standard deviation is 10, then the coefficient of skewness will be
-2
2
-20
5
49.
Which amongst the following is not correctly matched with regard to balance of payment account?
Import of goods and services - Debit in current account
Receipt of transfer payments current - Credit in the account
Direct investment receipts - Credit in the capital account
Portfolio investment redemption - Debit in the current account
50.
What is the nature of equilibrium in the IS-LM model?
Stock Equilibrium
Flow equilibrium
Stock and flow equilibrium
Oscillating equilibrium
51.
Assertion: Devaluation results in expenditure switching in an economy.
Reason: Devaluation alters the composition of the current account of the balance of payments.
Both a and r are true and r is the correct explanation of a.
Both a and r are true and r is not the correct explanation of a.
A is true, R is false
A is false, R is true.
52.
Which of the following is true for demand side vicious circle of poverty?
Low Income - Low demand - Low investment - Capital deficiency - low productivity - Low income
Low productivity - Low income - Low savings - Low investment - Capital deficiency
Low income- Low investment - Low demand - Low capital deficiency
Low demand - Low saving - Low productivity - Low investment - capital deficiency
53.
Arrange the following books in chronological order of their publication.
a. The Affluent Society
b. Asian Drama
c. The General Theory of Employment, Interest and Money
d. Development as Freedom
c-b-a-d
c-a-b-d
a-b-c-d
d-c-b-a
54.
The Benefit Theory of allocation of tax burden was given by
Seligman
Lindahl
Dalton
Pigou
55.
Capital gains means
An increase in the value of an asset.
An increase in the stock of capital
An increase in the yield of an asset.
An increase in the amount of foreign capital.
56.
Consider the following matrix which describes the respective strategies and the corresponding pay-offs of firms A and B operating in a duopoly:
Firm B
Advertise Don't Advertise
Advertise 11,6 16,0
Firm A
Don't Advertise 7,9 20,2
Which of the following statements is/are true for the above game?
a. Firm A has no dominant strategy
b. Firm B has no dominant strategy
c. The game has a Nash equilibrium
d. Neither Firm A nor Firm B has a dominant strategy
a, c
b, c
d only
a, b and c
57.
Assertion: External forces are of singular importance to economic activities of the developing states.
Reason: Relations between the dominant and dependent states are dynamic to reinforce unequal pattern.
Both A and R are true and R is the correct reason for A.
Both A and R are true and R is not the correct reason for A.
A is true but R is false.
A is false but R is true.
58.
For the function Q = A. K (raise to the power α) . L (raise to the power β), which of the following is correct?
The degree of homogeneity is 1
Elasticity of substitution is equal to α + β
Output elasticity with respect to capital is α
Marginal product of a factor = Average product of the factor
59.
Which of the following statements is/are true?
a. a common resource is rival and non-excludable.
b. a public good is non-rival and non-excludable.
Select the correct answers from the code given below
Both a and b
Only a
Only b
Neither a nor b
60.
A firm in monopolistic competition advertises in order to
make its product more similar to its competitors
shift the demand curve for its product to the left
make the demand for its product less price elastic
reduce the industry's price
61.
Identify the correct statement about the relationship between total fertility rate and gross reproduction rate.
TFR < GRR
TFR = GRR
TFR > GRR
All of the above
62.
Income tax is generally based on the principle of
Benefit received principle
Ability to pay principle
Willingness to pay principle
None of the above
63.
When the marginal cost is equal to average cost, the slope of the average cost is
positive
negative
zero
infinite
64.
The theory in which trade cycle is generated due to excess of actual over the desired investment has been given by who amongst the following?
R. G. Hawtry
F. Hayek
P. Samuelson
J. Schumpeter
65.
Which of the following is portrayed in the population pyramid of a country?
Rural-Urban distribution of population
Young-Old distribution of population
Age and sex distribution of population
Gender distribution of population
66.
According to neo-classical theory of distribution, constancy in the wage share in national income would come about only when the elasticity of factor substitution
is less than one
is equal to one
is zero
is greater than one
67.
In the long period, which one of the following curves would aptly represent the time path of population for a developing economy?
Exponential curve
Logistic curve
Lorenz curve
Hyperbolic curve
68.
Which method can help in obtaining a welfare improvement if externalities exist?
Regulation
Assigning property rights and permitting bargaining
Pigovian taxes
All of the above
69.
Which of the following is/are true for National Action Plan for Climate Change?
It was launched in 2008
It has 8 vertical missions for pollution control
Both A and B are true
Neither A nor B
70.
Dusenberry was of the opinion that less developed countries will have serious and adverse effect on balance of payment due to
demonstration effect
multiplier effect
backwash effect
spread effect
71.
Consider the following statements:
a. 'Liquidity trap' is a situation when people refer to hold money rather than investing it.
b. 'Liquidity preference' is the situation when people prefer to invest money rather than hold it.
c. 'Liquidity crunch' is a situation of short supply of money in the money market.
d. 'Credit crunch' is a short supply of money in the loan market.
Select the correct statements using the code given below:
a, b, d
a,c, d
b, c, d
a, b, c
72.
Assertion: International trade along the lines of comparative advantage improves the allocative efficiency of existing resources.
Reason: International trade is an engine of growth.
Both a and r are true and r is the correct explanation of a.
Both a and r are true and r is not the correct explanation of a.
a is true, r is false
a is false, r is true
73.
Which of the following statements is correct?
Global warming is simply another term for the greenhouse effect
Global warming is an entirely natural phenomenon.
Global warming means melting down of glaciers.
Global warming is the rise in average temperature at earth's surface.
74.
Which among the following is not the feature of J.E. Meade's model?
Perfect competition prevails.
Economy produces consumption goods and producer goods
Perfect substitution is possible between consumption and capital goods.
It examines the relationship between the growth rate of population and growth rate of savings.
75.
Market failure can occur because of
Imperfect competition
Externalities
Both A and B
Neither A nor B
76.
Which of the following is the cause of disequilibrium between warranted rate of growth and actual rate of growth in the Harrod model?
Discrepency between ex-ante investment and ex-post investment
Discrepency between ex-ante savings and ex-ante savings
Discrepency between ex-ante investment and ex-post savings
Discrepency between ex-post investment and ex-post savings
77.
According to the Economic Survey 2017-18, the Indian economy is becoming more formalised. This is indicated by which of the following shifts? Select the correct answer from the codes given below
a. The introduction of GST has brought more firms in the indirect tax net.
b. After demonetisation, a significant increase has taken place in the number of individuals filing income tax returns.
c. An increase in savings in the formal financial sector.
a and b
Only c
a, b, and c
b and c
78.
Assertion: In Solow's growth model under equilibrium conditions, capital-labour ratio does not change.
Reason: Substitution between capital and labour is possible.
Both A and R are true, and R is the correct explanation of A
Both A and R are true, but R is not the correct explanation of A.
A is true, R is false.
A if false, R is true.
79.
An increase in which of the following would be most likely to increase long run growth in developing countries?
Tariffs on imported capital goods
Subsidies to business for purchases of capital goods
Unemployment compensation
Pension payments
80.
Non Accelerating Inflation Rate of Unemployment (NAIRU) means
a rate of unemployment for which the change in the rate of inflation is zero.
a rate of inflation which makes the rate of unemployment zero
a rate of inflation for which the change in the rate of unemployment is zero
a rate of unemployment which is equal to the rate of inflation
81.
Assertion: The production possibility frontier can be a straight line.
Reason: The factors are not specialised and can be substituted at no extra cost.
Both a and r are true, and r is the correct explanation of a.
Both a and r are true, but r is not the correct explanation of a.
A is true, r is false
A is false, r is true.
82.
Which of the following statements are valid concerning a recursive system?
a. The parameters can be validly estimated using separate applications of OLS to each equation.
b. The independent variables may be correlated with the error terms in other equations.
a only
b only
Both a and b
Neither a nor b
83.
'The absorption approach' of analysing balance of payments was formulated by
M. Friedman
Marshall and Lerner
Sydney Alexander
Haberler
84.
In an economy, the GDP deflator is found to be 110 for the current year. If the GDP has registered an annual growth rate of 15 per cent in the same year, then the rate of growths of real GDP will be
5%
1.5%
25%
2.5%
85.
Which of the schemes is not a scheme for the upliftment of women in India?
Beti Bachao, Beti Padhao
Sukanya Samridhi Yojana
Gender Budgeting
UJALA Scheme
86.
If the producer pays the price of each input that is used is equal to its value of marginal product, then which one of the following does he earn?
Zero supernormal profit
Monopoly profit
Positive supernormal profit
Negative supernormal profit
87.
Which of the following is a condition of viability and technological feasibility of Leontief's static system?
Marshall-Edgeworth conditions
Kuhn-Tucker conditions
Hawkins-Simon Conditions
Value of the objective function of primal problem should be equal to the value of the objective function of the dual of the primal.
88.
According to Friedman, Quantity theory of Money is the theory of
Value of money
Price determination
Nominal income
Demand for money
89.
In the short run, which of the following costs must continuously decrease as output increases?
Total variable cost
Total fixed cost
Average variable cost
Average fixed cost
90.
New Keynesians use which of the following to explain price and wage stickyness?
Staggered labour contracts
Menu costs
Behaviour based on bounded rationality
All of the above
91.
Which amongst the following is a correct description of inverse demand function?
p = price, D = Demand and y = income
p = f(D)
D = f(p)
D = f(1/p), D.p = f(D, 1/y)
p = f(D) B.D = f(p).C
92.
Which among the following statements is correct?
The minimum point of AVC and MC are at the same level of output.
Minimum of AVC is at lesser output than the minimum of MC
Minimum of AVC is at a larger output than the minimum of MC.
Any of the above is possible depending upon the operating of the law of returns
93.
As on 31st March 2017, external debt of India was in which of the following range as a percentage of GDP?
14-16%
16-18%
18-20%
20-22%
94.
Consider the following statements regarding Marginal Standing Facility (MSF).
a. MSF is on the line of existing LAF and is a part of it.
b. MSF is a costlier route than Repo.
c. MSF functions as the last resort for banks to borrow short term funds.
d. MSF is linked to the net demand and time liabilities of the banks.
Choose the correct code
b, c, d
a, b, c
a, c, d
a, b, c, d
95.
Which of the following growth models assume neutral technical progress?
Harrod model
Solow model
Both A and B
Neither A nor B
96.
As per Census 2011, rank the following states in descending order of degree of urbanisation.
a. Tamil Nadu
b. Maharashtra
c. Goa
d. Punjab
Select the correct answer from the codes below:
b-a-d-c
c-a-b-d
a-c-d-b
d-b-a-c
97.
Given the demand function of a consumer D = 10-2p, the consumer's surplus at price = 2 is
2
10
9
15
98.
Statutory incidence of a tax deals with
the person legally responsible for paying the tax
the amount of revenue left over after taxes
the amount of taxes paid after accounting for inflation
the amount of tax revenue generated after a tax is levied.
99.
In the context of the 'twin balance sheet problem' in India, consider the following statements:
a. Over leveraged corporate debt
b. High Non-Performing Assets of nationalised banks
c. High fiscal deficit
Select the correct answer from codes below
a and c
a and b
b and c
a, b and c
100.
Which of the following is not true for perfect competition?
Price = LAC
Market demand curve for a commodity is horizontal to X-axis
Firms earn normal profits
In the long run firms operate at the minimum point of average cost.
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