UGC NET Economics Mock Test 2 Leave a Comment / By admin / May 29, 2020 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. Do fill in the contact details to avail different discount options which will be disclosed with the end of this test. So, try the exam thoroughly. The offers are huge. Your name Your email id 1. 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 None 2. 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 None 3. Development of indigenous technologies appropriate to a country’s resource endowment is a policy that is Outward looking Inward looking Forward looking Domestic None 4. Which is the primary source of energy in India? Coal Mineral oils Hydro-electricity Nuclear energy None 5. 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. None 6. 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 None 7. “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. None 8. Relationship between Arithmetic, Geometric and Harmonic Mean is AM ≤GM≤HM AM > GM > HM AM ≥ GM ≥ HM HM > GM > AM None 9. 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. None 10. 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 None 11. If the slope of Average Cost Curve is positive then MC<AC MC>AC MC=AC MC=0 None 12. 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 None 13. 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 None 14. As employment expands, producers expect correspondingly ____ amounts of proceeds. Lower maximum Lower minimum Higher minimum Higher maximum None 15. Income effect and substitution effect can be traced from Income consumption curve Total utility curve Marginal utility curve Price consumption curve None 16. 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 None 17. The total area at various points on the average fixed cost curve shows Same TFC Different TFC Same AFC None of the above None 18. 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 None 19. 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 None 20. 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 None 21. ‘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 None 22. The classical economists assumed a Downward sloping saving schedule. Upward sloping saving schedule Upward sloping investment schedule None of the above None 23. 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 None 24. Those cash payments which firms make to outsiders for their services and goods are called Real costs Social costs Explicit costs Implicit costs None 25. 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 None 26. Which of the following is an inversely U-Shaped curve? Average product curve Total product curve Marginal product curve Average cost curve None 27. 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 None 28. 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 None 29. The sign of the cross elasticity of demand is____ if both the goods are complementary. Positive Negative Zero Either negative or positive None 30. Behaviouristic theory is based on Theory of consumer behaviour Revealed preference theory Utility theory All of the above None 31. 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) None 32. 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 None 33. 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 None 34. 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 None 35. 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 None 36. The aggregate supply response of agriculture in India is weak strong weak in some areas and strong in others moderate None 37. 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 None 38. 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 None 39. 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 None 40. The International Monetary Organisation was established on December 27, 1945 in Paris New York Geneva Washington None 41. The ____ elasticity is a measure of average elasticity. Point Price Income Arc None 42. What type of rate is the Current Daily Status Unemployment rate? Time rate Person rate Both A and B Wage rate None 43. 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 None 44. When aggregate supply price exceeds aggregate demand price, employment level shows a tendency to fall rise Remain same none of the above None 45. 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 None 46. 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 None 47. Secondary deposits refers to Term deposits Recurring deposits Fixed deposits Deposits created through lending None 48. The Small Industries Development Organisation was set up in 1950 1956 1954 1958 None 49. “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 None 50. 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. None 51. 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 None 52. The increasing part of the SAVC curve reflects Reduction in labour productivity Reduction in capital productivity Diseconomies Higher wages None 53. 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. None 54. 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 None 55. 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. None 56. General equilibrium theory does not help in Single market analysis Analysis of mutually interdependent markets. Optional allocation of resources Resolving macroeconomic controversies None 57. The problem of cyclical unemployment in developed economies originates from demand side supply side investment side savings side None 58. 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 None 59. 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 None 60. 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 None 61. 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 None 62. 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 None 63. Median and mode both are called mathematical averages positional averages complicated averages frequent averages None 64. 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 None 65. Dualistic development thesis focuses on coexistence which is Flexible Transitory Erratic Chronic None 66. 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 None 67. Primary product export dependence has an unstable effect on the economy because of degree of risk supply constraints uncertainty Both A and C None 68. 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 None 69. 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 None 70. Range, which is the simplest measure of dispersion, is used a great deal in Census estimates Price fluctuations Quality control None of the above None 71. 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 None 72. 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 None 73. 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 None 74. 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 None 75. A fall in interest will produce the best effect on investment if investment demand schedule is Inelastic Infinitely inelastic Elastic Infinitely elastic None 76. 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 None 77. Which of the following would not be termed “Near Money”? Bills of exchange Rs. 2000 notes Treasury bills Debentures None 78. Price elasticity at the mid-point of a linear demand curve is 1 0 -1 Infinity None 79. According to Keynes, the aggregate demand is made up of consumption and investment consumption and income consumption and saving income and investment None 80. 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 None 81. 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 None 82. “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 None 83. 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 None 84. 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 None 85. The value of marginal revenue at unit elasticity is Maximum One Zero Minimum None 86. 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% None 87. 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 None 88. 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 None 89. International Development Association was established on 24 September 1960 1970 1980 1990 None 90. The Asian Development Bank was established in December 1946 and started its functions on January 1 1967 1968 1969 1970 None 91. 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 None 92. The classical economists assumed _____ in the rate of exchange. Flexibility Stability Relativity None of the above None 93. 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 None 94. 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. None 95. 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 None 96. The higher the economy’s capital-output ratio the _____ will be rate of GNP growth. Higher Lower Same None of the above None 97. 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 None 98. The level of utilisation of the plant which firms consider as “normal” is called Economy factor Exhaust factor Load factor None of the above None 99. 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 None 100. 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 None
