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Economics Harbour: UGC NET Economics Online Mock - 1

Instructions:

100 questions for 2 marks each
No negative marking
Total Time: 2 hours

Name

In case of indifference curve of two goods X and Y, as consumption of X increases,

Deselect Answer

MRSxy increases

MRSxy decreases

MRSxy remains the same

First MRSxy increases but later on MRSxy decreases

Assuming the probability of a male birth is 0.5, find the chances that a family of 3 children will have two boys and one girl.

Deselect Answer

1/8

2/8

3/8

4/8

A sudden shift from import tariffs to free trade may induce short-term unemployment in

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import competing industries.

industries that are only exporters.

industries that sell domestically as well as export.

industries that neither import nor export.

Harrod-neutral technical progress is necessarily

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growth augmenting

labour augmenting

capital augmenting

resource augmenting

Which of the following measures are used by a risk-averse person to minimise risk? 1. Diversification of resources 2. Insurance of risk event 3. Total cost of resources 4. Value of information of risk event Choose the correct answer from the options given below

Deselect Answer

1, 2 and 3

1, 2 and 4

2, 3 and 4

1, 3 and 4

Inequalities in income are measured by which of the following? 1. Lorenz ratio 2. Theil’s index 3. Palma ratio 4. Deprivation ratio Choose the correct answer from the options given below

Deselect Answer

Only 1

1 and 2

1 and 4

1, 2 and 3

Which of the following are relevant conditions assumed by the Factor Price Equalisation theorem? 1. The countries are characterised by different factor endowments. 2. The countries are characterised by different production functions 3. The industries are characterised by different factor intensities. 4. Each country will export the commodity which uses its abundant factor. Choose the correct answer from the options given below

Deselect Answer

1, 2 and 3

1,3 and 4

1, 2 and 4

2, 3 and 4

Match List 1 with List II

List I	List II
A. Canons of Taxation	1. U.K. Hicks
B. Canons of Public Expenditure	2. Adam Smith
C. Effective Incidence of Tax	3. Findlay Shirras
D. Benefit received approach of Public Expenditure	4. Erik Lindahl

Deselect Answer

2 3 1 4

1 2 3 4

2 3 4 1

4 1 2 3

Arrange the following committees appointed for the Banking Sector in India in chronological order.

Urijit Patel Committee
Goipora Committee
Narasimham Committee – I
Chakravarty Committee

Deselect Answer

4, 3, 2, 1

1, 3, 4, 2

3, 2, 4, 1

4, 2, 3, 1

The law of equilibrium Marginal utility states that

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MUx*Px = MUY*PY = MUz*Pz

MUx/Px = MUy/Py = MUz/Pz = MUm

MUx/Px > MUy/Py > MUz/Pz > MU¬m

MUx/Px < MUy/Py < MUz/Pz < MUm

The marginal propensity to consume is

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that part of the consumer dollar that goes to the purchase of investment goods.

the percentage of total disposable income spent on the consumption.

the fraction of each additional rupee of disposable income spent on consumption.

total consumption in a given period divided by total disposable income.

Standard deviation can be expressed as

Deselect Answer

(∑〖|X ̅-X|〗)/N

(∑〖|X- X ̅|〗)/N

√((∑〖(X-X ̅)〗^2 )/N)

None of the above

Which of the following sets are infinite?

A = {x:x Ɛ Z and x² – 5x + 6 = 0}

B = {x:x Ɛ Z and x² is even}

C = {x:x Ɛ Z and x² = 36}

D = {x:x Ɛ Z and x > -10}

Deselect Answer

Only A and B

Only B and C

Only B and D

Only A and C

According to the theory of ______, it makes sense for a country to specialise in producing the goods it produces most efficiently and buy the products it produces less efficiently from other countries even if it could produce the good more efficiently itself.

Deselect Answer

strategic trade

pertinent advantage

comparative advantage

absolute advantage

Collusion is harmful for customer when it leads to

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limited choice

increased cost

Both A and B

None of the above

The basic regulatory authority for mutual funds and stock market lies with the

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Government of India

Reserve Bank of India

SEBI

Stock Exchanges

Which of the following is not included in measuring economic development?

Deselect Answer

Health facility

Rate of growth of national income

Literacy

Population growth

Consider the following statements:

Generally, public good provides for benefit to public through state.
Public good is an item whose consumption is not decided by the individual consumer.
In economics, public good is a product or service that is non-excludable and non-depletable.

Which of the above statements is/are correct?

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1 and 3

Only 3

2 and 3

All of the above

What is the name of the scheme which provides training and skills to women in traditional and non-traditional trades?

Deselect Answer

Kishori Shakti Yojana

Rashtriya Mahila Kosh

Swatansiddha

Swavalamban

Match the following

List I	List II
A. Various combinations that a consumer can purchase	1. Indifference map
B. Various combinations of two commodities providing equal satisfaction to consumers.	2. Indifference curve
C. A set of indifference curves	3. Budget line
D. Point of tangency of a budget line on an indifference curve	4. Consumer’s equilibrium

Deselect Answer

1 2 3 4

4 3 1 2

2 3 4 1

3 2 1 4

The concept of fiscal deficit implies which of the following?

Deselect Answer

Revenue and interest receipts minus revenue expenditures.

Revenue receipts and recovery of loans and other receipts minus total expenditure.

Receipts minus disbursement in capital account.

Total receipts minus total expenditure

Which one of the following items is included in the capital account of the balance of payment of a country?

Deselect Answer

Investment income

Invisibilities

Commercial borrowings

Private transfer

Match the following

List I	List II
A. Theory of Big Push	1. J.H. Boeke
B. Warranted rate of growth	2. Paul Romer
C. Social dualism	3. Rosenstein Rodan
D. Endogenous growth theory	4. R.F. Harrod

Deselect Answer

2 3 4 1

3 1 4 2

3 4 1 2

4 2 3 1

An increase in fiscal spending leads to

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a shift of Phillips Curve to the left

A shift of Phillips Curve to the right

movement along the Phillips Curve such that unemployment rises inflation also rises

the movement on the Phillips Curve itself such that unemployment declines and inflation rises

The rational expectations hypothesis suggests that the forecasts that people make concerning future inflation rates

Deselect Answer

consistently over-estimates the actual rate of inflation in the future.

are always correct

consistently underestimates the actual rate of inflation in the future.

are correct on an average but are subject to errors that are distributed randomly.

The IRR is the discount rate that equates the project NPV to ____ and benefit-cost ratio to ____.

Deselect Answer

1, 0

0,1

0,0

1, 1

Which of the following is not an instrument of capital market with special reference to India?

Deselect Answer

Equity share

Debenture

Gold ETF

Commercial paper

Which of the following is not correct with reference to the service sector of Indian economy?

Deselect Answer

Service sector has the largest share in the GDP.

Service sector has the largest share in the employment

Service sector’s growth has been higher than growth of agricultural sector

Productivity per worker in service sector is highest.

Consider the following statements about the average fixed cost of a firm

Its slope is always negative.
Its slope is always greater than one.
Its slope is always equal to one.
Elasticity with respect to output is equal to one.

Choose the correct answer from the codes given below

Deselect Answer

Only 1

2 and 3

1 and 4

Only 3

Who amongst the following economists treated nature to be niggardly?

J.S. Mill
David Ricardo
Karl Marx
Thomas Robert Malthus

Choose the correct code:

Deselect Answer

1, 2 and 3

2 and 4

3 and 4

2 and 3

Which of the following act as an instrument to help in the borrowing by the government?

Repo rate
Reverse Repo Rate
CRR
SLR

Choose the correct code:

Deselect Answer

1 and 3

Only 4

1 and 4

3 and 4

The public expenditure in India is classified as capital and revenue. Which of the following is/are revenue expenditure?

Subsidies
Interest payments on public debt
Wages and salaries

Choose the correct code:

Deselect Answer

1 and 2

1 and 3

2 and 3

All of these

Which of the following statements is/are correct about Uzawa’s theorem?

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The growth rate of output per worker, consumption per worker and capital per worker are equal and constant over time.

The production function is linear homogenous.

The technical progress is Harrod-neutral only

All of the above

Global competitiveness report is released by which of the following organisations?

Deselect Answer

World Trade Organisation

World Economic Forum

European Union

World Bank

The frequent farm loan waivers in India may have given rise to the problem of

Deselect Answer

Debt Overhang

Adverse selection

Risk aversion

Moral Hazard

Arrange the following states in descending order according to Maternal Mortality Ratio as per the Special Bulletin of SRS, May, 2018

Assam
Bihar
Madhya Pradesh
Uttar Pradesh

Choose the correct code:

Deselect Answer

1, 4, 3, 2

2, 4, 3, 1

4, 1, 2, 3

3, 2, 1, 4

Assertion-Reason

Assertion: In the P.N. Rosenstein-Rodan’s model, the positive role of indivisibilities in production has been analysed.

Reason: Removal of indivisibilities leads to constant returns to scale in production.

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Both A and R are true and R is the correct reason of A.

Both A and R are true but R is not the correct reason of A.

A is true but R is false

A is false but R is true.

Consider the following statements about a time series of annual observations on sales of a firm for ten years.

The series will have seasonal variations.
The series will have a secular trend.
The series will have cyclical variations.

Choose the correct code:

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2 and 3

1, 2 and 3

1 and 2

1 and 3

When the marginal cost is equal to average cost, the slope of the average cost is

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Positive

Negative

Zero

Infinite

Which of the following is likely to be most inflationary in its impact?

Deselect Answer

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.

Tax buoyance is expressed as

Deselect Answer

ETYb = 〖∆T〗^b/∆Y*Y/T^b

ETYb = ∆Y/〖∆T〗^b *T^b/Y

ETYb = ∆Y/〖∆T〗^b +T^b/Y

ETYb = 〖∆T〗^b/∆Y+Y/T^b

Consider the following statements

Effective demand in a market is the demand for a product or service which occurs when purchasers are constrained in a different market.
Notional demand is the demand that occurs when purchasers are not constrained in any market.

Which of the above statements is/are correct?

Deselect Answer

Only 1 is correct

Only 2 is correct

Both 1 and 2 are correct

Neither 1 nor 2 is correct.

Which of the following is not a correct feature for the absolute convergence to hold good?

Deselect Answer

Same population growth rate

Same savings propensity

Same capital-labour ratio

Different capital-labour ratio

Which of the following is portrayed in the population pyramid of a country?

Deselect Answer

Rural-urban distribution of population

Young-old distribution of population

Gender distribution of population

In the last decade, which one among the following sectors has attracted the highest Foreign Direct Investment (FDI) inflow into India?

Deselect Answer

Telecommunication sector

Defence sector

Service sector

Insurance sector

Market failure can occur because of

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Imperfect competition

Externalities

Both A and B

Neither A nor B

Which of the following is condition of economic viability and technological feasibility of Leontief’s static system?

Deselect Answer

Marshall-Edgeworth conditions

Kuhn-Tucker conditions

Hawkins-Simon condition

Value of the objective function of primal problem should equal the value of the objective function of the dual of the primal.

Match List I with List II:

List I (Growth models)	List II (Equation)
A. Solow	1.∆N/N=∆K/K
B. Domar	2. G_w.C_r = s
C. Joan Robinson	3. st(k) = (δ+n)k
D. Harrod	4. ∆I/I=ασ

Deselect Answer

Assertion-Reason

Assertion: Monetarists disagreed with the Phillips curve analysis.

Reason: There are no unique correspondence of %p unemployment rate

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Both A and 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, but R is false

A is false but R is true.

Which of the following statements are true about measures of dispersion?

The divergence of a set of observation.
The concentration of a set of observation.

Select the correct answer:

Deselect Answer

Only 1

Only 2

Both 1 and 2

None of these

World Summit on social development was held in the year

Deselect Answer

1994

1995

1996

1963

Keynes liquidity preference theory indicates that the demand for money is

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negatively related to bond price

constant

negatively related to interest rate

positively related to interest rates

Arithmetic mean and harmonic mean includes all values of the data set in its calculation.

Deselect Answer

True

False

Partly true

None of these

A large increase in oil prices, such as the once occurring in 1973 and 1979, will cause

Deselect Answer

inflation and expansion

inflation and recession

recession and disinflation

expansion and deflation

Match the following:

List I	List II
A. Swachh Bharat Abhiyan	1. 2014
B. PMBJP	2. 2015
C. Start-Up India	3. 2016
D. Rashtriya Vayoshri Yojana	4. 2017

Deselect Answer

1 2 3 4

2 3 4 1

4 3 2 1

1 3 4 2

The lowering of bank rate by the Reserve Bank of India leads to

Deselect Answer

less liquidity in the market

more liquidity in the market

mobilisation of more deposits by commercial banks

no change in the liquidity in the market

Which one of the following pairs is correctly matched?

Deselect Answer

Fiscal deficit – GDP

Primary deficit – Money supply

Monetised deficit – interest payments

Budget deficit – expenditure and receipts on revenue account

Bowley’s coefficient of skewness is calculated by following formula:

Deselect Answer

(Q3 + Q1 – M)/(Q3-Q1)

(Q3+Q1-2M)/(Q3+Q1)

(Q3+Q1-2M)/(Q3-Q1)

(Q3+Q1-3M)/(Q3-Q1)

“Economics is what Economists do”. It has been supported by

Deselect Answer

Richard Jones

Comte

Gunnar Myrdal

Jacob Viner

Which of the following statements is true?

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Nominal interest rates are procyclical and real interest rates are countercyclical.

Nominal interest rates are procyclical and real interest rates are acyclical.

Both nominal and real interest rates are procyclical and leading.

Both nominal and real interest rates are procyclical and lagging

In the Keynesian framework, as long as output is ______, the equilibrium level, unplanned inventory investment will remain, ______ and firms will continue to lower production.

Deselect Answer

above, negative

below, positive

below, negative

above, positive

According to the theory of kinked demand curve, kink occurs at the level where

Deselect Answer

MR is equal to MC.

MC passes through the discontinuous region of MR

Point of kink cannot be defined specifically

None of the above

According to Keynes, which is not a motive behind the demand for money?

Deselect Answer

Transaction motive

Speculative motive

Precautionary motive

Budget deficit/surplus motive

Match the following:

List I	List II
A. Narrow money	1. M₃
B. Excess reserve	2. ER_r
C. C + RR + ER	3. M₁
D. Broad money	4. High Powered money

Deselect Answer

4 2 1 3

2 3 1 4

3 2 1 4

3 2 4 1

‘Other liabilities’ of the central government of India include outstandings against which one of the following?

Deselect Answer

Small saving schemes

Securities issued to Industrial Development Bank of India, Unit Trust of India and Nationalised Banks

Deposits under the special deposit schemes

All of the above

Match the following:

List I	List II
A. D = f(P)	1. Consumption function
B. S = f(P)	2. Demand function
C. C = a + βY	3. Supply function
D. R = f(q)	4. Revenue function

Deselect Answer

1 2 3 4

3 2 1 4

3 2 4 1

2 3 1 4

Assertion-Reason

Assertion: The working of Regional Rural Banks (RRBs) revealed that they eroded their capital base.

Reason: Many RRBs are non-viable and have high operating costs.

Deselect Answer

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, but R is false.

A is false, but R is true.

Who among the following said that “Money is a temporary abode of purchasing power”?

Deselect Answer

James Tobin

William J. Baumol

Irving Fisher

Milton Friedman

Consider the following statements:

Market may fail to develop resulting in a failure to meet a want.
Markets may fail to produce and allocate scarce resources in a most efficient manner.

Which of the above statements is/are correct?

Deselect Answer

Only 1

Only 2

Both 1 and 2

None of these

Assertion-Reason

Assertion: Stagflation can develop due to market imperfections.

Reason: Wage flexibility can cause stagflation.

Deselect Answer

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 but R is false.

A is false but R is true.

If a matrix has 8 elements, then which of the following will not be a possible order of the matrix?

Deselect Answer

1x8

2x4

4x2

4x4

Assertion-Reason

Assertion: According to Peacock-Wiseman hypothesis, public expenditure increases overtime in a step by step manner.

Reason: This hypothesis is based on the displacement effect, concentration effect and inspection effect.

Deselect Answer

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 but R is false.

A is false but R is true.

Match the following:

List I	List II
A. Instantaneous adjustment of income with investment spending occurs in	1. MPC is smaller
B. Consumption lags income by one period in	2. Increase in investment expenditure is once-for-all.
C. Value investment multiplier is zero when	3. static multiplier
D. Major portion of multiplier is realised in fewer periods when	4. dynamic multiplier

Deselect Answer

3 4 1 2

3 4 2 1

4 3 1 2

2 3 1 4

Match the following:

List I	List II
A. Life-cycle hypothesis	1. Keynes
B. Permanent income hypothesis	2. Duessenberry
C. Absolute income hypothesis	3. Friedman
D. Relative income hypothesis	4. Ando-Modigliani

Deselect Answer

4 3 1 2

4 3 2 1

3 2 1 4

3 2 4 1

Consider the following statements:

Dumping is used to gain profits from competition in the international market.
Dumping is used to expand the horizon of the domestic industries.
Dumping does not help in establishing new industrial relation.

Which of the given statements is/are correct?

Deselect Answer

Only 1

Only 2

Only 3

None of these

Which of the following statements does not hold true in case of the Keynesian Economics?

Deselect Answer

Velocity of money is an unstable function of its determinants

Labour is subject to money illusion

Aggregate supply function tends to become flat at levels of output well below full employment and to become steeper as full capacity is reached.

Aggregate supply schedule is vertical and output and employment are completely supply determined.

The price elasticity of demand is equal to one for a demand curve which is

Deselect Answer

horizontal line

vertical line

rectangular hyperbola

downward moving line

Assertion-Reason

Assertion: Leontief Paradox contradicted Hecksher-Ohlin Theory.

Reason: USA exported labour intensive products.

Deselect Answer

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 but R is false.

A is false but R is true.

The rate at which the Central bank discounts the bills of commercial banks is called

Deselect Answer

Discount rate

Bill rate

Interest rate

Lending rate

Which committee recommended tax on agricultural holding in India?

Deselect Answer

Tandon Committee

Raj Committee

Kelkar Committee

Dantwala Committee

Consumption is irreversible is implicit in which of the following hypothesis?

Deselect Answer

Absolute income hypothesis

Relative income hypothesis

Life Cycle hypothesis

Permanent Income hypothesis

Purchasing Power Parity theory was given by

Deselect Answer

Haberler

J.S. Mill

J.E. Meade

Gustav Cassell

Which of the following is not one of the objectives of the tax reforms in India?

Deselect Answer

Reduction in multiplicity of custom duty rates.

Improving tax compliance

Widening the tax base

Suggesting ways to increase the share of indirect taxes in total tax revenue.

In HDI, which one of the following is not taken as an indicator?

Deselect Answer

Life expectancy

Literacy

GDP per capita

Per capita food consumption

Assertion-Reason

Assertion: Over the years, the goal of self-reliance has proved to be elusive in the Indian economy.

Reason: Balance of Payments problems have been arising due to imports of POL.

Deselect Answer

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 but R is false.

A is false but R is true.

Human Development Index prepared by UNDP is based on some of the following variables:

i) Life expectancy at birth
ii) Health facilities

iii) Per capita income adjusted by purchasing power.

iv) Literacy and enrolment percentage

Of the above variables:

Deselect Answer

i,ii and iii are correct.

ii, iii and iv are correct

i and iii are correct

i, iii and iv are correct

Assertion-Reason

Assertion: In India, more and more farmers are getting pushed out of agriculture.

Reason: Their land base is becoming smaller.

Deselect Answer

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 but R is false.

A is false but R is true.

According to Phillips curve, when rate of inflation increases, then rate of:

Deselect Answer

unemployment also increases

unemployment decreases

unemployment will remain constant

full employment will prevail.

Match the following:

List I	List II
A. Investment multiplier	1. R.F. Kahn
B. Employment multiplier	2. Milton Friedman
C. Restatement of Quantity theory of money	3. A. Laffer
D. Supply side economics	4. J.M Keynes

Deselect Answer

4 1 2 3

1 2 3 4

4 3 2 1

2 4 1 3

Natural rate of unemployment is the rate of unemployment at which

Deselect Answer

rate of inflation is stable

rate of inflation is unstable

rate of inflation is falling

rate of inflation is rising

Burden of tax on commodity can be shifted totally to consumers if elasticity of demand is

Deselect Answer

equal to 1

less than one but greater than zero

equal to zero

greater than 1.

Assertion-Reason

Assertion: Stratified random sampling is often used for socio-economic surveys.

Reason: Social stratification is a social reality

Deselect Answer

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 but R is false.

A is false but R is true.

A person who is no longer looking for a job is considered

Deselect Answer

structurally unemployed

frictionally unemployed

under-employed

none of the above

Debt relief to farmers is a part of

Deselect Answer

plan expenditure

non-plan expenditure

development expenditure

defence expenditure

The statement that the compensation principle of welfare economics is capable of giving contradictory results is associated with the name of

Deselect Answer

T. Scitovsky

A. Pareto

A. Bergson

P.A. Samuelson

A temporary increase in marginal tax rate will

Deselect Answer

increase employment

increase output

raise the deficit

lower output

Which of the following canon is associated with Adam Smith?

Deselect Answer

Canon of elasticity

Canon of productivity

Canon of certainty

Canon of expediency

Which is NOT a correct explanation for the need of social cost-benefit approach:

Deselect Answer

There is a divergence between private benefits and public benefit

There is a divergence between private cost and social cost

Market prices do not reflect opportunity cost of factors

Both public and private sectors co-exist in the economy.

Match the following:

List I	List II
A. Centre-periphery thesis	1. Marshall
B. Factor proportion theorem	2. Hecksher-Ohlin
C. Reciprocal demand	3. Raul Prebisch
D. Vent for surplus theory	4. Elssework
	5. J. Viner