UGC NET Economics Previous Year Papers – 1 Leave a Comment / By admin / June 24, 2020 June 24, 2020 Economics Harbour welcomes you to the nationwide UGC NET Economics Mock Exam. Features: UGC NET Economics Aspirants from all over the country are participating in the exam. So this will give you a competitive feel. The test will be for 2 hours. Please be sure to devote complete time towards it. We have some offers for the new students after you submit the exam. (Please be sure, the offer will be applicable to your first attempt ONLY.) So ALL THE BEST 🙂 Name Email id Phone number (optional) 1. 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 2. 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 3. According to Friedman, Quantity theory of Money is the theory of Value of money Price determination Nominal income Demand for money 4. 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 5. 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 6. 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% 7. 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 8. 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. 9. 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 10. 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 11. 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 12. Given the demand function of a consumer D = 10-2p, the consumer's surplus at price = 2 is 2 10 9 15 13. When the marginal cost is equal to average cost, the slope of the average cost is positive negative zero infinite 14. 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 15. 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 16. 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 17. Income tax is generally based on the principle of Benefit received principle Ability to pay principle Willingness to pay principle None of the above 18. 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 19. Who made a statement that "Inflation is everywhere and always a monetary phenomenon"? Milton Friedman James Tobin T.W. Swan A. W. Phillips 20. 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 21. 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 16,0Firm A Don't Advertise 7,9 20,2Which of the following statements is/are true for the above game?a. Firm A has no dominant strategyb. Firm B has no dominant strategyc. The game has a Nash equilibriumd. Neither Firm A nor Firm B has a dominant strategy a, c b, c d only a, b and c 22. 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 23. 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 24. 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. 25. Leibenstein in his critical minimum effort thesis treats population as a factor that is Income-generating Investment inducing Income depressing Market expanding 26. 'The absorption approach' of analysing balance of payments was formulated by M. Friedman Marshall and Lerner Sydney Alexander Haberler 27. 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. 28. Which of the following growth models assume neutral technical progress? Harrod model Solow model Both A and B Neither A nor B 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. 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 31. 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 32. Gilt-edged market means Bullion market Market of pure metals Market of government securities Market of commodities 33. Simplex method of solving Linear Programming problems was developed by Koopmans Dantzig Leontief Solow 34. According to Mercantilists, trade is a Positive sum game Infinite sum game Zero sum game Negative sum game 35. 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. 36. 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 37. As per Census 2011, rank the following states in descending order of degree of urbanisation.a. Tamil Nadub. Maharashtrac. Goad. PunjabSelect the correct answer from the codes below: b-a-d-c c-a-b-d a-c-d-b d-b-a-c 38. 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. 39. 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 40. "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 41. 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 42. 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. 43. 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 44. 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 45. 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. 46. 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 47. 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. 48. 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 49. In the context of the 'twin balance sheet problem' in India, consider the following statements:a. Over leveraged corporate debtb. High Non-Performing Assets of nationalised banksc. High fiscal deficitSelect the correct answer from codes below a and c a and b b and c a, b and c 50. 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. 51. 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 52. 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 53. Market failure can occur because of Imperfect competition Externalities Both A and B Neither A nor B 54. 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 55. 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 56. 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. 57. 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 58. 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 59. 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% 60. 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 61. 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 62. 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 63. 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. 64. Match List 1: Concept with List 2: Economista. Profit as a dynamic surplus (i) J. Schumpeterb. Profit as reward for innovation (ii) M. Kaleckic. Profit as reward for uncertainty bearing (iii) F.H. Knightd. Profits arise due to monopoly power enjoyed by the producer (iv) J.B. ClarkAnswer 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) 65. 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 66. 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 67. The Benefit Theory of allocation of tax burden was given by Seligman Lindahl Dalton Pigou 68. 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 69. '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 70. 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 71. 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 72. 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 73. Generalised least square method of estimation will not be suitable for dealing with which of the following problemsa. Autocorrelated disturbancesb. Heteroscedastic disturbancesc. Multicollinearityd. Errors in variables a only b only c and d a and b 74. 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. 75. 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 76. What is the nature of equilibrium in the IS-LM model? Stock Equilibrium Flow equilibrium Stock and flow equilibrium Oscillating equilibrium 77. There is incomplete specialisation in production when country faces constant opportunity cost decreasing opportunity cost increasing opportunity cost indeterminate opportunity cost 78. Arrange the following books in chronological order of their publication. a. The Affluent Societyb. Asian Dramac. The General Theory of Employment, Interest and Moneyd. Development as Freedom c-b-a-d c-a-b-d a-b-c-d d-c-b-a 79. 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 80. 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 81. 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. 82. 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 83. 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 84. 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 belowa. 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 85. 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 86. 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. 87. 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 88. 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. 89. 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. 90. 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 91. 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 92. 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 93. 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 94. In the context of oligopoly, consider the following statementsa. 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 95. Which of the following goods is covered under GST as on July 1, 2017? Electricity Liquified Petroleum Gas High Speed Diesel Petroleum Crude 96. 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. 97. 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 98. Palma ratio is a measure of Inequality of income Stock market volatility Morbidity in a region Volatility of crop prices 99. 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 100. 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