Economics Harbour: UGC NET Economics Mock Test Series (September 2020)

Instructions:

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

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Which of the following is not the assumption of Say’s law of markets?

a. There is no saving and no hoarding of money.

b. There is no government expenditure or taxation.

c. The economy is a closed economy.

d. Savings always equals investments.

None

An appropriate fiscal policy for a severe recession is

a. a decrease in government spending.

b. a decrease in tax rates.

c. appreciation of dollar.

d. an increase in interest rates.

None

The basic difference between the ‘short run’ and the ‘long run’ is that

a. all costs are fixed in the short run, but all costs are variable in the long run.

b. the law of diminishing returns applies in the long run, but not in the short run.

c. at least one resources is fixed in the short run, while all resources are variable in the long run.

d. economies of scale may be present in the short run, but not in the long run.

None

In Cournot’s duopoly model there are two firms operating with

a. Marginal cost

b. Identical cost

c. Average cost

d. Fixed cost

None

Who advocated tax on expenditure?

a. BimalJalan

b. N. Kaldor

c. Paul Samuelson

d. Kenneth Arrow

None

Set A contains the following elements: 1, 3, 5, 8, 10. Set B contains the following elements: 2,4,6,8,10. The notation B ℇ A would contain

a. 1,2,3,4,5,6,7,8,9,10

b. 8 and 10

c. 2,4,6,8,10

d. 1,3,5,8,10

None

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

Reason: Social stratification is a social reality.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

The French Economist J.B. Say transformed the equality of total output and total spending into a law that can be expressed as follows

a. unemployment is not possible in the short run.

b. demand and supply are never equal.

c. supply creates its own demand.

d. demand creates its own supply.

None

Assertion: Rosenstein Rodan advocated high rate of investment to take the underdeveloped economies out of shackles of underdevelopment.

Reason: Underdeveloped countries face various types of indivisibilities.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

10.

In a sample having 23 pairs of observations, the correlation coefficient is 0.52 and in another sample having 28 observations, the correlation coefficient is 0.71. Is there significant difference between the two sample coefficients?

a. 5% level is not proper

b. Difference is not significant.

c. Difference is significant

d. 95% level is significant.

None

11.

Assertion: The New Industrial Policy was announced on July 24, 1991.

Reason: The New Industrial Policy was announced by the V.P. Singh Government.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

12.

An autonomous investment rises, Keynesians expect increases in

a. income

b. employment

c. consumption

d. all of these

None

13.

For a nine year moving average, how many fewer moving average values will there be at the beginning and end of the time series?

a. 5 at the beginning, 4 at the end.

b. 4 at the beginning, 5 at the end.

c. 9 at the beginning, 0 at the end.

d. 4 at the beginning, 4 at the end.

None

14.

Immersing growth refers to a situation where

a. a country promotes export.

b. gains from trade is more than offset by deterioration in terms of trade.

c. Deterioration in terms of trade more than offsets the gains from trade.

d. None of the above

None

15.

Welfare is a/an

a. objective concept

b. subjective concept

c. concept based on value judgement

d. Both B and C

None

16.

Which of the following is not true regarding determination of wages under perfectly competitive conditions?

a. Wage of labour is determined by demand for and supply of labour in the market.

b. In the short period wage of labour equals MRP of labour.

c. In the long period wage of labour equals MRP of labour and ARP.

d. Total wages of labour will be less than total revenue product of labour.

None

17.

Objective test of social welfare maximisation was devised by

a. J.M. Keynes

b. Pareto

c. Maurice Alias

d. A.K. Sen

None

18.

For economic development, Schumpeter gave importance to

a. Politicians

b. Civil Servants

c. Money lenders

d. Innovators

None

19.

Economies and diseconomies of scale explain why the

a. short run average fixed cost curve declines so long as output increases.

b. marginal cost curve must intersect the minimum point of the firm’s average total cost curve.

c. long run average total cost curve is typically U-shaped.

d. short run average variable cost curve is U-shaped.

None

20.

Concept of disguised unemployment was introduced by

a. S. Kuznets

b. J.K. Galbraith

c. Joan Robinson

d. Maurice Alias

None

21.

In the New Economy, the share of industrial sector

a. Falls

b. Rises

c. Remains constant

d. Falls and then rises

None

22.

Since 1971, world has been operating under

a. Clean floating

b. Dirty floating

c. Crawling peg

d. All of the above

None

23.

Cutting the money supply by one-third is predicted by the quantity theory of money to cause

a. a sharp decline in real output of one-third in the short run, and a fall in the price level by one-third in the long run.

b. a decline in real output by one-third.

c. a decline in output by one-sixth, and a decline in the price level of one-sixth.

d. a decline in the price level by one-third.

None

24.

Which among the following rural banks has been named after a mountain?

a. Parathana Bank

b. Varada Gramin Bank

c. Thar Anchalik Gramin Bank

d. Aravali Khestria Gramin Bank

None

25.

Which of the major port in India celebrated its Golden Jubilee in January 2012?

a. Kolkata/Haldia Port

b. Paradeep Port

c. Vishakhapatnam Port

d. Kandla Port

None

26.

Friedman’s argument that competition among banks will tend to keep the difference between the return on bonds and money relatively constant implies that

a. changes in interest rates will have a big impact on the demand for money.

b. changes in income will have a big impact on the demand for money.

c. changes in income will have little effect on the demand for money.

d. changes in interest rates will have little effect on the demand for money.

None

27.

If the demand for money is perfectly interest inelastic, the LM schedule will be

a. upward sloping

b. downward sloping

c. horizontal line

d. vertical line

None

28.

Economic development, as a concept is more relevant for

a. developed countries.

b. underdeveloped countries.

c. Asian countries.

d. None of the above

None

29.

Income elasticity of demand will be zero when a given change in income brings about

a. a less than proportionate change in quantity demanded.

b. A more than proportionate change in quantity demanded.

c. The same proportionate change in demand.

d. No change in demand

None

30.

When inflationary expectations are added to the Phillips Curve, the non-accelerating inflation rate of unemployment is defined as that unemployment where the

a. inflation rate is always 0%.

b. actual inflation rate exceeds the expected inflation rate.

c. actual inflation rate is less than the expected inflation rate.

d. actual inflation rate equals the expected inflation rate.

None

31.

An increase in supply of a commodity causes

a. An increase in equilibrium price and increase in equilibrium quantity.

b. A decrease in equilibrium price and increase in equilibrium quantity.

c. An increase in equilibrium price and decrease in equilibrium quantity.

d. A decrease in equilibrium price and decrease in equilibrium quantity.

None

32.

Increase in capital stock between two periods of time is called

a. Investment

b. Capital formation

c. Depreciation

d. None of the above

None

33.

Conspicuous consumption refers to

a. Foodgrains

b. Luxury items

c. Essential goods

d. Both A and B

None

34.

Which one of the following is the correct description about the bank rate in the Indian money market?

a. Rate of interest charged by commercial banks from the borrowers.

b. Rate of interest which commercial banks discounted bills of their borrowers.

c. Rate of interest allows by commercial banks on their deposits.

d. Rate of which RBI purchase or rediscounts bills of exchange of commercial banks.

None

35.

The major difference between Harrod-Domar and Solow models of growth lies in

a. Returns to scale

b. Returns to variable factors

c. Substitutability between labour and capital

d. Growth of income

None

36.

Assertion: Depreciation of exchange rate tends to increase the price level.

Reason: It is assumed that the Central Bank undertakes no stabilisation policies.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

37.

The monopolistically competitive seller’s demand curve will become more elastic the

a. more significant the barriers to entering the industry.

b. greater the degree of product differentiation.

c. larger the number of competitors.

d. smaller the number of competitors.

None

38.

If marginal benefit is greater than marginal cost, a rational choice involves

a. less of the activity

b. more of the activity

c. no more of the activity

d. more or less, depending on the benefits of other activities.

None

39.

The velocity of money is

a. the average number of times that a dollar is spent in buying the total amount of final goods and services.

b. the ratio of the money stock to high-powered money.

c. the ratio of the money stock to interest rates.

d. None of the above

None

40.

Which of the following models of business cycle generates constrained cycles?

a. Samuelson’s model

b. Hick’s model

c. Kaldor’s model

d. All of the above

None

41.

The marginal propensity to consume measures the ratio of the

a. average amount of our disposable income that we spend.

b. average amount of our savings that we spend.

c. change in consumer spending to a change in money holdings.

d. change in consumer spending to a change in disposable income.

None

42.

Which of the following is a characteristic of pure monopoly?

a. close substitute products.

b. barriers to entry.

c. the absence of market power.

d. price taking

None

43.

Assertion: Green Revolution benefitted only Punjab, Haryana and Western Uttar Pradesh.

Reason: Irrigation was necessary for the success of Green Revolution.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

44.

In the liquidity trap

a. a small change in interest rates produces a small change in the quantity of money demanded.

b. a small change in interest rates produces no change in the quantity of money demanded.

c. money demand is not affected by interest rates.

d. a small change in interest rates produces a very large change in the quantity of money demanded.

None

45.

In Harrod’s model of economic growth, if warranted rate is below the natural rate of growth then it is possible to maintain steady state growth at the warranted rate with

a. continually increasing unemployment.

b. a constant rate of unemployment.

c. continually decreasing unemployment.

d. None of the above

None

46.

When two kinds of money are in circulation, the problem before government is to keep them simultaneously in circulation. This problem was explained by

a. Say’s law

b. Demand law

c. Gresham’s law

d. Supply law

None

47.

Which of the following is not a government transfer?

a. Welfare payments

b. Government spending on education

c. Unemployment insurance benefits

d. Public pensions

None

48.

A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to

a. zero

b. infinity

c. less than one

d. one

None

49.

Assertion: Gold standard broke down after first world war.

Reason: Countries had a different rate of inflation.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

50.

Assertion: The new endogenous growth theory examines production function that shows increasing returns.

Reason: Because of specialisation and investment in knowledge capital.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

51.

The book “Planned Economy for India” was written by

a. V.K.R.V. Rao

b. M. Visvesvaraya

c. K.N. Raj

d. Manmohan Singh

None

52.

In the case of monopolistic competition

a. The long run supply curve can be defined.

b. The long run supply curve can’t be defined.

c. The short run supply curve can’t be defined.

d. The short run supply curve can be defined.

None

53.

Assertion: Balance of capital account is the difference between foreign exchange earned and foreign exchange spent by the economy.

Reason: Balance of invisibles is the difference between exports and imports of services.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

54.

Indian planning mechanism has been criticised by

a. JagdishBhagwati

b. A.K. Sen

c. L.K. Jha

d. BimalJalan

None

55.

What does Hedging mean?

a. The acceptance of a foreign exchange risk

b. The covering of a foreign exchange risk.

c. Foreign exchange speculation

d. Foreign exchange arbitrage.

None

56.

Which of the following statements is true concerning the consumption function?

a. It slopes upward.

b. Its slope equals the MPC.

c. It represents the direct positive relationship between consumption spending and the level of real disposable income.

d. All of the above

None

57.

In the aggregate expenditures-output model, if aggregate expenditures are greater than GDP, then

a. inventory is depleted.

b. inventory is accumulated.

c. inventory is unchanged.

d. employment decreases.

None

58.

Mint parity theory is applicable only when countries are on

a. Same metallic standard

b. Different metallic standard

c. Bimetallic standard

d. None of the above

None

59.

Leontief tested his paradox theory for the USA for the year

a. 1940

b. 1947

c. 1950

d. 1955

None

60.

Gradual adjustment of prices and wages to an increase in the aggregate demand curve implies that the aggregate supply curve is

a. horizontal

b. vertical

c. upward sloping but not vertical.

d. downward sloping

None

61.

Major commercial banks of India were nationalised in

a. 1969

b. 1970

c. 1971

d. 1972

None

62.

Unfair trade practices are included in

a. FERA

b. FEMA

c. MRTP Act

d. Anti-Laundering Act

None

63.

Which one of the following schemes is not included in the Rashtriya Krishi Vikas Yojana?

a. National Mission for Protein Supplements

b. Saffron Mission

c. Accelerated Fodder Development Programme

d. All of the above

None

64.

Imperfect competition arises when

a. There is imperfect rivalry among competitors.

b. There are unexplainable imperfections in the market.

c. Competition does not exist.

d. Product variation, ignorance of consumers and distance and transport costs lead to imperfections in the competitive market which operates on certain assumptions.

None

65.

According to United Nation, definition of natural resource is

a. Natural resources as consisting of all that is given by nature on, above and under the surface of earths.

b. A natural resource is anything found by man in his natural environment that he may in some way utilise for his own benefit.

c. It is the resources provided by nature including the mineral ores, energy sources, other useful produces, the soil which nourish the plants, and animals and surface and under ground water.

d. None of the above

None

66.

Golden Age hypothesis is concerned with

None

67.

The regression coefficient is independent of

a. change of origin and scale

b. change of origin only

c. change of scale only

d. neither change of origin nor change of scale

None

68.

The Keynesian theory of money demand emphasizes the importance of

a. a constant velocity

b. irrational behaviour on the part of some economic agents.

c. interest rates on the demand for money.

d. all of the above

None

69.

Golden Age hypothesis is concerned with

a. natural rate of growth > warranted rate of growth

b. actual rate of growth > warranted rate of growth

c. warranted rate of growth > natural rate of growth

d. warranted rate of growth = natural rate of growth

None

70.

Bring out the incorrect statement regarding India’s textile sector:

a. India’s textile and clothing sector currently employs 35 million people.

b. After agriculture it is second largest provider of employment.

c. Textile sector has a tendency to shrink as the GDP and Economy grows.

d. Textile sector is major absorber of low-skilled labour.

None

71.

Lorenz is a

a. Positional dispersion

b. Mathematical dispersion

c. Graphic dispersion

d. None of the above

None

72.

‘Open Market Operations’ refers to

a. purchases of stocks in the exchange.

b. the purchase or sale of government securities by the central bank.

c. central bank lending to commercial banks.

d. the specifying of margin requirements on stock purchases.

None

73.

Demand-pull inflation is caused by

a. an increase in aggregate demand.

b. a decrease in aggregate demand.

c. an increase in aggregate supply.

d. a decrease in aggregate supply.

None

74.

Assertion: Removal of poverty remains a central concern of planning in India.

Reason: Development is not just about factories, dams and roads. It is basically about people.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

75.

Assertion: The market demand for an input is not the simple horizontal summation of the demand curves of individual firms.

Reason: As the price of the input falls all firms will seek to employ more of this factor and expand their output.

a. Both A and R are true and R is the correct explanation of A.

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

c. A is true but R is false.

d. A is false but R is true.

None

76.

In the ‘golden age’ equilibrium occurs when

a. desired growth rate is less than actual growth rate

b. desired growth rate is more than actual growth rate

c. desired growth rate is equal to actual growth rate.

d. None of the above

None

77.

New Keynesian economists critique rational expectations theory by arguing that

a. labour markets but not product markets are highly competitive.

b. economic agents are irrational.

c. labour markets suffer from imperfect information and, as a result, employers pay efficiency wages.

d. all labour is same.

None

78.

Intellectual property rights regime is managed by

a. IMF

b. WTO

c. European Union

d. SAARC

None

79.

A consistency model for India’s Fourth Five Year Plan was developed by

a. J.K. Galbraith

b. Gunnar Myrdal

c. A.S. Manne and A. Rudhra

d. P.C. Mahalanobis

None

80.

Equilibrium amount of real planned investment is determined at the point where

a. marginal efficiency of investment is equal to rate of interest.

b. marginal efficiency of capital is equal to rate of interest.

c. marginal efficiency of capital is equal to marginal efficiency of investment.

d. none of the above

None

81.

Coefficient of correlation is independent of

a. Change of scale

b. Change of origin

c. A and B

d. None of the above

None

82.

Which of the following is the simplest to measure?

a. Arithmetic mean

b. Geometric mean

c. Harmonic mean

d. None of the above

None

83.

Circular test is an extension of

a. Unit test

b. Time reversal test

c. Factor reversal test

d. None of the above

None

84.

If the consumer price index decreased from 125 ten years ago to 100 for the current year, one could say that consumer prices

a. decreased 25 percent during the ten year period.

b. decreased 75 percent during the ten year period.

c. decreased 80 percent during the ten year period.

d. decreased 20 percent during the ten year period.

None

85.

In case of gold standard system, decrease in the value of currency with respect to gold is called

a. Devaluation

b. Revaluation

c. Depreciation

d. Appreciation

None

86.

Flexible exchange rate is based on the concept of

a. Demand theory

b. Supply theory

c. Both A and B

d. None of these

None

87.

The Baumol-Tobin analysis suggests that

a. velocity is relatively constant.

b. the transactions component of the demand for money is negatively related to the level of interest rates.

c. the speculative motive is non-existent.

d. both A and B are true.

None

88.

Expenditure on consolidated fund has to be approved by

a. President

b. Prime Minister

c. Parliament

d. High Court

None

89.

The Keynesian theory is consistent with the business cycle fact that inflation is

a. procyclical and leading

b. procyclical and lagging

c. countercyclical and leading

d. countercyclical and lagging

None

90.

Total utility of a commodity can be found by

a. Multiplying the number of units by its marginal utility.

b. Adding up the marginal utility of all units.

c. Multiplying price by number of units.

d. None of these

None

91.

Keynes reasoned that consumer expenditure is most closely related to

a. the level of interest rates.

b. the price level.

c. disposable income.

d. the marginal tax rate.

None

92.

In the context of Agricultural development, the trickle down theory has been interpreted to suggest that

a. Growth in the agriculture output without radical institutional reforms will reduce the incidence of poverty.

b. Growth in agricultural output with radical institution reforms will reduce the incidence of property.

c. Only radical institutional reforms can reduce the incidence of property.

d. None of the above

None

93.

Physiocracy which developed as commercial capitalism was yielding place to

a. Feudalism

b. Communism

c. Socialism

d. Industrial capitalism

None

94.

Money is non-neutral because

a. Elasticity of products is different.

b. Income of consumer is different.

c. Taste of consumer is different

d. All of the above

None

95.

Which one of the following is correct regarding stabilisation and structural adjustment as two components of the new economic policy adoption in India?

a. Stabilisation is a gradual, multi-step process while structural adjustment is a quick adaptation process.

b. Structural adjustment is a gradual multi-step process while stabilisation is a quick adaptation process.

c. Stabilisation and structural adjustment are very similar and complementary policies. It is difficult to separate one from the other.

d. Stabilisation mainly deals with a set of policies which are to be implemented by the Central Government while structural adjustment is to be set in motion by the State Governments.

None

96.

Which of the following is not an assumption of Harrod’s model of growth?

a. The desired capital output ratio is constant

b. Savings are a constant proportion of real income in the economy.

c. The labour force grows at some exogenously determined constant exponential rate.

d. Factor prices are flexible in the long run.

None

97.

In the Keynesian model in the short run, the amount of employment is determined by the effective labour demand curve and the level of

a. prices

b. output

c. the real interest rate

d. the supply of labour.

None

98.

The Cobb-Douglas production function assumes that the elasticity of substitution is

a. one

b. two

c. three

d. four

None

99.

Which of the following is true in a perfectly competitive market?

a. Total revenue rises continuously at a constant rate.

b. Average revenue is constant at all levels of output.

c. Marginal revenue is constant at all levels of output.

d. All of the above

None

100.

According to Rostow, which is the transition stage?

a. Traditional society

b. Pre-conditions to take off

c. Take off

d. None of the above

None

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UGC NET Economics September 2020, Mock 1

Economics Harbour: UGC NET Economics Mock Test Series (September 2020)

Instructions:

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