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