UPKAR'S

Conducted by National Testing Agency (NTA)

(Paper-II) By Dr. Bipul Gopalan & Prof. Surindra Dahiya

Upkar Prakashan, Agra-2

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© Publishers Publishers UPKAR PRAKASHAN 2/11A, Swadeshi Bima Nagar, AGRA–282 002 Phone : 2530966, 2531101 E-mail : [email protected], Website : www.upkar.in Branch Offices 4845, Ansari Road, Daryaganj, 16-11-23/37, Moosarambagh, Teegan Guda New Delhi–110 002 Opp. RTA Office Main Road, Beside– Phone : 011–23251844, 43259035 Andhra Bank, Hyderabad–500 036 (T.S.) Phone : 040–24557283 H-3, Block-B, Municipal Premises No. 15/2, Galiff Street, P.S. Shyampukur, Kolkata–700 003 (W.B.) Phone : 033–25551510 1461, Juni Shukrawari, Sakkardara Road, Opp. Hanuman Mandir, Nagpur–440 009 Mob. : 09370877776

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ISBN : 978-81-943178-0-7 Code No. 3030

Printed at : UPKAR PRAKASHAN (Printing Unit) Bye-pass, AGRA

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Contents Practice Set-1 ....................................................................................................................

3–11

Practice Set-2 ....................................................................................................................

12–20

Practice Set-3 ....................................................................................................................

21–31

Practice Set-4 ....................................................................................................................

32–42

Practice Set-5 ....................................................................................................................

43–53

Practice Set-6 ....................................................................................................................

54–65

Practice Set-7 ....................................................................................................................

66–77

Practice Set-8 ....................................................................................................................

78–89

Practice Set-9 .................................................................................................................... 90–100 Practice Set-10 .................................................................................................................. 101–110 Practice Set-11 .................................................................................................................. 111–120 Practice Set-12 .................................................................................................................. 121–132 Practice Set-13 .................................................................................................................. 133–143 Practice Set-14 .................................................................................................................. 144–155 Practice Set-15 .................................................................................................................. 156–167 Practice Set-16 .................................................................................................................. 168–177 Practice Set-17 .................................................................................................................. 178–189 Practice Set-18 .................................................................................................................. 190–200 Practice Set-19 .................................................................................................................. 201–210 Practice Set-20 .................................................................................................................. 211–220

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Syllabus Unit-1 : Micro Economics

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Theory of Consumer Behaviour Theory of Production and Costs Decision Making Under Uncertainty Attitude Towards Risk Game Theory – Non Cooperative Games Market Structures, Competitive and Non-Competitive Equilibria and Their Efficiency Properties Factor Pricing General Equilibrium Analysis Efficiency Criteria : Pareto-Optimality, Kaldor – Hicks and Wealth Maximization Welfare Economics : Fundamental Theorems , Social Welfare Function Asymmetric Information : Adverse Selection and Moral Hazard

Unit-2 : Macro Economics

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National Income : Concepts and Measurement Determination of Output and Employment : Classical & Keynesian Approach Consumption Function Investment Function Multiplier and Accelerator Demand for Money Supply of Money IS – LM Model Approach Inflation and Phillips Curve Analysis Business Cycles Monetary and Fiscal Policy Rational Expectation Hypothesis and its Critique

Unit-3 : Statistics and Econometrics

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Probability Theory : Concepts of Probability, Distributions, Moments, Central Limit Theorem Descriptive Statistics : Measures of Central Tendency & Dispersions, Correlation, Index Numbers Sampling Methods & Sampling Distribution

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• • • • • •

Statistical Inferences, Hypothesis Testing Linear Regression Models and their Properties – BLUE Identification Problem Simultaneous Equation Models – Recursive and Non-recursive Discrete Choice Models Time Series Analysis

Unit-4 : Mathematical Economics

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Sets, Functions and Continuity, Sequence, Series Differential Calculus and its Applications Linear Algebra – Matrices, Vector Spaces Static Optimization Problems and their Applications Input-Output Model, Linear Programming Difference and Differential Equations with Applications

Unit-5 : International Economics

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International Trade : Basic Concepts and Analytical Tools Theories of International Trade International Trade under Imperfect Competition Balance of Payments : Composition, Equilibrium and Disequilibrium and Adjustment Mechanisms Exchange Rate : Concepts and Theories Foreign Exchange Market and Arbitrage Gains from Trade, Terms of Trade, Trade Multiplier Tariff and Non-Tariff Barriers to Trade; Dumping GATT, WTO and Regional Trade Blocks; Trade Policy Issues IMF & World Bank

Unit-6 : Public Economics

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Market Failure and Remedial Measures : Asymmetric Information, Public Goods, Externality

• • • •

Public Expenditure

Regulation of Market – Collusion and Consumers’ Welfare Public Revenue : Tax & Non-Tax Revenue, Direct & Indirect Taxes, Progressive and Non-Progressive Taxation, Incidence and Effects of Taxation

Public Debt and its Management Public Budget and Budget Multiplier Fiscal Policy and its Implications

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Unit-7 : Money and Banking

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Components of Money Supply Central Bank Commercial Banking Instruments and Working of Monetary Policy Non-Banking Financial Institutions Capital Market and its Regulation

Unit-8 : Growth and Development Economics

• •

Economic Growth and Economic Development

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Models of Economic Growth : Harrod-Domar, Solow, Robinson, Kaldor

Theories of Economic Development : Adam Smith, Ricardo, Marx, Schumpeter, Rostow, Balanced & Unbalanced Growth, Big Push Approach.

Technical Progress : Disembodied & Embodied; Endogenous Growth Indicators of Economic Development : PQLI, HDI, SDGs Poverty and Inequalities : Concepts and Measurement Social Sector Development : Health, Education, Gender

Unit-9 : Environmental Economics and Demography

• • • • • • • • • •

Environment as a Public Goods Market Failure Coarse Theorem Cost-Benefit Analysis and Compensation Criteria Valuation of Environmental Goods Theories of Population Concepts and Measures : Fertility, Morbidity, Mortality Age Structure, Demographic Dividend Life Table Migration

Unit-10 : Indian Economy

• • • •

Economic Growth in India : Pattern and Structure Agriculture : Pattern & Structure of Growth, Major Challenges, Policy Responses Industry : Pattern & Structure of Growth, Major Challenges, Policy Responses Services : Pattern & Structure of Growth, Major Challenges, Policy Responses

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• • • • • • •

Rural Development : Issues, Challenges & Policy Responses Urban Development : Issues, Challenges and Policy Responses Foreign Trade : Structure and Direction, BOP, Flow of Foreign Capital, Trade Policies Infrastructure Development : Physical and Social; Public-Private Partnerships Reforms in Land, Labour and Capital Markets Centre-State Financial Relations and Finance Commissions of India; FRBM Poverty, Inequality & Unemployment

PRACTICE SETS UGC-NET/JRF/SET Economics

Practice Set-1 1.

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Who among the following is not a regulator of financial sector in India? (A) Securities and Exchange Board of India (B) Insurance Regulatory and Development Authority (C) Competition Commission of India (D) RBI Tobin tax is a tax on : (A) transactions in the share market (B) transactions in the money market (C) transactions in the commodity market (D) transactions in the foreign exchange market International trade in goods and services is sometimes used as a substitute for all of the following, except (A) international movement of capital (B) international movement of labour (C) domestic production of same goods and services (D) domestic production of different goods and services In case of deficit budget, when the deficits are covered through taxes, that budget is called : (A) unbalanced budget (B) surplus budget (C) balanced budget (D) None of the above Assertion (A) : Factor prices tend to be equal among the trading countries. Reason (R) : International trade in goods and services is a proxy for movement of factors among the countries. Select the correct answer from the code given below : Code : (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. Efficiency requires that the production of pure public goods be undertaken to the point where? (A) the sum of the marginal private bene¿ts is exactly equal to the marginal social cost of production (B) the marginal private bene¿t is exactly equal to the marginal social cost of production (C) the marginal social cost exceeds the sum of the marginal private bene¿ts (D) None of the above.

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Which among the following items are included in the NAMA? (A) Fish and marine products (B) Manufactured products (C) Fuel products (D) All of the above 8. Consider the following statements : I. The Repo rate is the rate at which other banks borrow from the Reserve Bank of India. II. A value of 1 for *ini Coef¿cient in a country implies that there is perfectly equality in income distribution. Which among the above are correct? (A) II only (B) I only (C) Both I and II (D) Neither I nor II 9. Under discriminating monopoly, if the elasticity of demand in market I is 2 and in market II, it is 1, (elasticities being in absolute terms) then the price behaviour of the monopolist will be : (A) To charge a higher price in market I (B) To charge a higher price in market II (C) To charge the same price in both the markets (D) In market I, charge double the price of that is charged in market II 10. Given the demand function : 20 , where symbols have their usual meaning, Q P at which price, the elasticity of demand would be unity ? (A) 20 (B) 10 (C) 5 (D) All of the above 11. Which one of the following is not correct about SEBI (Securities and Exchange Board of India)? (A) It has the power to protect the interest of the investors in securities. (B) It has the power to convert private securities to public securities. (C) It has the power to promote development of capital market. (D) It has the power to regulate the working of stock exchange. 12. Which of the following sets does not represent the features of Indian labour markets? (A) Disguised unemployment; lack of skills; lack of mobility (B) Disguised unemployment; perfect mobility; lack of skills

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NTA/UGC Practice Sets Economics (C) Disguised, unemployment; migratory labour; perfect mobility (D) Poverty; illiteracy; homogeneity The idea of indicative planning was first adopted in which Five year Plan of India ? (A) Second Plan (B) Fifth Plan (C) Seventh Plan (D) Eighth Plan Consider the following statements about Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AYPMJAY) : (A) AY-PMJAY offers a health insurance cover of ` 5·0 lakh per family to all those whose names appears in the latest Socio-Economic Caste Census. (B) Free treatment is available at all public and Empanelled private hospitals in times of need. Which of the statement(s) given above is/are correct? (A) Only (B) (B) Only (A) (C) Both (A) & (B) (D) Neither (A) nor (B) Consider the following statements and select the correct answer from the options given below : I. NITI Aayog aims to promote Co-operative Federalism. II. NITI Aayog is to centralise the planning process in response to scarcity of resources. Code : (A) Only I (B) Only II (C) Both I & II (D) Neither I nor II Match the following from the lists given below : List – I a. National Rural Employment Programme (NREP) b. Sukanya Samridhi Yojana (SSY) c. Food for Work Programme (FWP) d. Rural Landless Employment Guarantee Programme (RLEGP) List – II i. 2001 ii. 1980 iii. 1983 iv. 2015 Select the correct codes : Codes : (a) (b) (c) (d) (A) iv iii ii i (B) i ii iv iii (C) ii iv i iii (D) iii ii iv i Which of the following is/are advantage(s) of zerobased budgeting? (i) It eliminates or minimizes the low priority programmes. (ii) It improves the programme effectiveness. (iii) It facilitates critical review of schemes in terms of their cost effectiveness and bene¿ts. Select the answer from the code given below : Code : (A) (i) only (B) (ii) and (iii) (C) (i), (ii) and (iii) (D) (i) and (ii)

18. Which of the following has the highest share in India’s external debt at the end of March 2015 ? (A) Rupee debt (B) NRI deposits (C) Commercial Borrowings (D) Export credit 19. In order for someone to be a free rider, an activity must be undertaken that : (A) arranges for ride-sharing at rush hour. (B) creates bene¿ts for people who cannot be forced to pay for them. (C) beauti¿es a neighbourhood. (D) identi¿es the bene¿ciaries and forces them to pay. 20. R.B.I. can print currency notes upto the value of : (A) ī25,000 (B) ī10,000 (C) ī5,000 (D) ī1,000 21. Assertion (A) : A progressive income tax is also known as built-in stabilizer. Reason (R) : As economy expands, and income rises, taxes also rise in the same proportion. Answer from the code given below : Code : (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. 22. An overvalued Indian rupee in the foreign exchange market will have which one of the following consequence? (A) Make imports cheaper and exports costlier (B) Make imports costlier and exports cheaper (C) Give protection to domestic industry against foreign competition (D) Will improve balance of payments 23. An imposition of capital gains tax will (A) reduce both savings and investment (B) increase savings (C) reduce savings (D) increase consumption 24. The terms of trade refer to : (A) The excess of import expenditure over export earnings (B) Trade argument between two nations (C) The ratio between export and import prices (D) The terms and conditions on which a country is offered loan in the event of BOP dif¿culties 25. Which of the following is not unit free? (A) Coef¿cient of correlation (B) Coef¿cient of variation (C) Laspeyer’s Index Number (D) Standard deviation

NTA/UGC Practice Sets Economics 26. In relative income hypothesis consumption is related to— (A) Peak past consumption (B) Median current consumption of peer group (C) Neither (A) nor (B) (D) Both (A) and (B) 27. Union Budget 2019-20 imposed a 25% surcharge on the income exceeding : (A) ī2 crore but less than ī5 crore (B) ī75 lakh but less than ī1 crore (C) ī10 crore but less than ī20 crore (D) ī1 crore but less than ī2 crore 28. ‘Paramparagat Krishi Vikas Yojana’ aims to boost : (A) Drip Irrigation (B) Organic Farming (C) Horticulture Crops (D) Vegetable Production 29. Which among the following measures would result in an increase in the money supply in the economy? I. Purchase of Government Securities from the Public by the Central Bank. II. Deposit of currency in Commercial Banks by the Public. III. Borrowings by the Government from the Central Bank. IV. Sale of Government securities to the public by the Central Government. Select the correct answer from the code given below : Code : (A) I only (B) II and IV (C) I and III (D) II, III and IV 30. Identify the transfer payments in the following and answer from the code given below 1. Annual increment in salary 2. Payment of bonus to employees 3. Interest payment on public debt 4. Pension payment Code: (A) 3 and 4 (B) 2, 3 and 4 (C) 1 and 2 (D) 1 and 3 31. Classical dichotomy refers to which one of the following ? (A) There are two sectors of the economy, namely, agriculture and industry. (B) InÀuence of money is not on the real variables like employment and output but on price level. (C) Savings come only from pro¿ts and not from the wages. (D) All of the above 32. In the theory of investment decisions, the most appropriate rate of return is the one which makes the— (A) net present value the maximum (B) gross present value the maximum (C) net present value zero (D) gross present value zero 33. The basic rationale of the theory of ‘Big-Push’ is based upon the idea of

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(A) size of population (B) external economies (C) internal economies (D) None of the above “Central problem in the theory of economic development is to understand the process by which a community which was previously saving 4 to 5 per cent or less of its national income, converts itself into an economy where voluntary savings is running about 12 to 15 of national income or more.” Who among the following economists is attributed with this view? (A) Ragner Nurkse (B) P.N. Rogenstein-Rodan (C) Gunnar Myrdal (D) W. Arthur Lewis Which among the following are the recommendations of the Urjit Patel Committee report on monetary policy? I. Curtailment of the ¿scal de¿cit. II. InÀation anchor at four percent. III. Providing adequate liquidity in the money and capital market. IV. Pegging the exchange value of Indian Currency. Select the answer from the code given below : Code : (A) I, II and III (B) II and IV (C) III and IV (D) I, II and IV Walras’ general equilibrium model uses (A) system of equations (B) system of simultaneous linear equations (C) system of simultaneous equations (D) system of linear equations Who among the following economists considered the rate of interest to influence the transaction demand for money? (A) P. Samuelson (B) W. J. Baumol (C) Keynes (D) I. Fisher ‘Pareto optimality in production is gained in which of the following conditions? (A) MRTSXLK = MRTSYLK (B) MRSAXY = MRBSXY (C) MRSKXY = MRTLXY

MPL MPK PL PK 39. Among other things, which one of the following was the purpose for which Deepak Parekh Committee was constituted? (A) To study the socio-economic conditions of minority communities. (B) To suggest the measures for financing the development of infrastructure. (C) To frame the policies on genetically modi¿ed seeds. (D)

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NTA/UGC Practice Sets Economics (D) To suggest measures to reduce the ¿scal de¿cit in the Union Budget. Which one of the following is the correct concept of Natural rating unemployment? (A) Frictionally and structurally unemployed (B) Frictionally and cyclically unemployed (C) Structurally and cyclically unemployed (D) Frictionally, cyclically and structurally unemployed Consider the following taxes : (i) Corporation tax (ii) Income tax (iii) Service tax (iv) Union Excise Duties Which of the following correctly describes their contribution, before the implementation of GST in descending order of importance, to the Central Government’s Gross Tax Revenue? (A) (i), (ii), (iv), (iii) (B) (ii), (i), (iii), (iv) (C) (iii), (ii), (i), (iv) (D) (iv), (i), (ii), (iii) Match List-I with List-II and select the correct answer from the code given below— List-I (a) C = 40 + 0.7y (b) 1 = 90-6i (c) 0.3y – 20i – 160 = 0 (d) 0.3y +20i – 150 = 0 List-II 1. LM function 2. IS function 3. Consumption function 4. Investment function Code: (a) (b) (c) (d) (A) 3 4 1 2 (B) 4 3 2 1 (C) 4 1 2 3 (D) 3 4 2 1 Consider the following : Assertion (A) : According to Peacock-Wiseman hypothesis, public expenditure increases overtime in a step by step manner. Reason (R) : This hypothesis is based on the displacement effect, concentration effect and inspection effect. Select the correct answer from the code given below: Code : (A) (A) is true, but (R) is false. (B) (A) is false, but (R) is true. (C) Both (A) and (R) are true, but (R) is not the correct explanation of (A). (D) Both (A) and (R) are true and (R) is the correct explanation of (A). Human capital formation can be accelerated by— (A) Promoting skill development programmes (B) Providing medical and health facilities in both rural and urban areas

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(C) Strengthening hardware and software industry (D) Both (A) and (B) In the Harrod-Domar equation g = s/v, where v is defined as : (A) The value of country’s capital stock (B) Incremental capital output ratio (C) The change in country’s capital stock (D) None of the above The unbalanced growth strategy is based on— (A) External and Internal economies (B) Spread and backwash effects (C) Increasing and constant returns to scale (D) Backward and forward linkages Which among the following is the reason for Convergence exhibited by the Solow growth model? (A) Static capital-labour ratio. (B) Declining marginal productivity of capital. (C) Neutral technical progress. (D) Constant rate of growth of population Which among the following production function will exhibit both Hicks and Harrod technical progress? (A) Leontieff production functions (B) Cobb-Douglas production functions (C) ACMS production functions (D) None of the above Match the following lists : List-I List-II (a) Aggregate demand 1. – a + by (b) Consumption function 2. C + I (c) Aggregate supply 3. a + by (d) Saving functon 4. C + S Select the correct answer from the code given below : Code : (a) (b) (c) (d) (A) 2 1 3 4 (B) 2 4 3 1 (C) 2 4 1 3 (D) 2 3 4 1 Leibenstein in his critical minimum effort thesis treats population as a factor that is (A) investment – inducing (B) income – generating (C) market – expanding (D) income – depressing Who among the following economists was not associated with the Dependency Theory of Development? (A) Raul Prebisch (B) T.D. Santos (C) Andre Gunder Frank (D) Gunnar Myrdal If Marginal Propensity to Consume (MPC) is’ equal to Average Propensity to Consume (APC) for all levels of income (Y), the correct corresponding consumption (C) function will be:

NTA/UGC Practice Sets Economics (B) C = a +

(A) C = a + bY

b Y

(C) C = bY (D) C = bY2 53. In the adjoining diagram, in the equilibrium which one of the following is true? Revenue and Cost

Y

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MC AC

AR MR Output

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(A) Price = Average Cost (B) Price = Average Cost = Marginal Cost (C) Marginal Cost = Average Revenue (D) There is no excess capacity. Phillips curve sets up a relation between : (A) Taxes and inÀation (B) InÀation and unemployment (C) Money supply and aggregate demand (D) Price and cost of production Assuming that firm A increases its advertising and firm B responds by increasing its advertising. If profits of both firms increase, then firms A and B are engaged in (A) a zero-sum game (B) a positive-sum game (C) a negative-sum game (D) behaviour which cannot be understood in terms of games theory In the long run, the transitory consumption will: (A) Be in¿nity (B) Remain unchanged (C) Decline, but will remain positive (D) Be zero Which among the following statements are correct regarding Edgeworths Duopoly model? I. It takes as given the output decision of rival. II. It is a adequate explanation of price rigidity. III. It takes as given the price decision of rival. Of these, the correct answer is (A) Only statement I is true (B) Both I & III are true (C) Both II and III are true (D) Only III is true For the demand function D = P (p) and supply function S = S(p), the excess demand brings about market equilibrium in which of the following situations? dE(p) dE (p) (A) !0 0 (B) dp dp dE(p) dE(p) =∞ (C) 0 (D) dp dp

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59. Inflationary gap refers to excess of aggregate demand over aggregate supply at (A) full employment level (B) after full employment level (C) before full employment level (D) both (A) and (B) above 60. The saving function used in the neo-classical growth model is a : (A) Classical saving function (B) Proportional saving function (C) Differential saving function (D) Constant saving function 61. Changes in the portfolio assets of the people take place due to (A) Current rate of interest (B) Future rate of interest (C) Current rate of interest in relation to future rate of interest (D) Current price of bonds 62. In the context of a straight line demand curve touching both the axes, which one of the following is correct? The demand is elastic : (A) below the mid-point (B) above the mid-point (C) at the mid-point of the curve (D) throughout the length of the demand curve 63. Given : I = 5 + 0.2y S = –15 + 0.3 y G=5 Where I = Investment; S = Savings G = Government Expenditure Y = National Income What is the equilibrium level of income? (A) 200 (B) 150 (C) 250 (D) 300 64. Consider the following items in the balance of payment in India I. NRI deposits II. Remittances Which among the above is/are part of the capital account of balance of payments ? Answer from the codes below : Codes : (A) Only I above (B) Only II above (C) Both I and II above (D) Neither I nor II above 65. Consider the following statements : (i) Rate of growth of GDP exhibits the performance of the economy. (ii) Per capita GDP shows the standard of living of the people in a country. Which of the statements given above is/are correct? (A) Only (i) (B) Only (ii) (C) Both (i) and (ii) (D) Neither (i) nor (ii) 66. Match List-I with List-II and select the correct answer from the code given below:

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NTA/UGC Practice Sets Economics List-I (a) Backward and Forward linkages (b) Turnpike theorem (c) Organic composition of capital (d) A.K. Production Function List-II 1. Von Neumann model 2. Unbalanced growth 3. Marxian model 4. Endogenous growth model Code: (a) (b) (c) (d) (A) 1 2 3 4 (B) 3 4 2 1 (C) 2 1 3 4 (D) 2 4 3 1 Which among the following has not been declared as a special category State in India? (A) Uttarakhand (B) Bihar (C) Jammu & Kashmir (D) Himachal Pradesh Which of the following is credited with introduction of LPG model of economic development in India? (A) Dr. C. Rangarajan (B) Dr. Montek Singh Ahluwaliya (C) Dr. Amartya Sen (D) Dr. Manmohan Singh Which among the following economists advocated the use of social marginal productivity criterion? (A) Hollis B. Chenery (B) A.K. Sen (C) Maurice Dobb (D) J.J. Polak In Harrod model of growth, if warranted rate of growth is below the natural rate of growth then it is possible to maintain steady state growth with: (A) Continuously increasing unemployment (B) A constant rate of unemployment (C) Continuously decreasing unemployment (D) None of the above Full demographic dividend will be realised when government promotes (A) more social security (B) more intensive growth (C) more skill development (D) more capital market Which of the following pairs is not correctly matched? (A) Taussig : Barter Terms of Trade (B) Prebisch : Deteriorating Terms of Trade (C) Marshal : Offer Curves (D) Walras : Dumping Conditions Which among the following curves is used to depict the long run behaviour of population growth? (A) Normal Curve (B) Logistic Curve (C) Exponential Curve (D) Ogive Monetary policy in India now aims at targeting— (A) Growth of money supply

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(B) Consumer price inÀation (C) Neither (A) nor (B) (D) Both (A) and (B) Match List-I with List-II and give the correct answer from the code given below : List-I List-II (Event) (Date) (a) World Environment Day 1. 11th July (b) World Wildlife Day 2. 5th June (c) World Water Day 3. 3rd March (d) World Population Day 4. 22nd March Select the correct answer from the code given below: Code : (a) (b) (c) (d) (A) 1 1 3 4 (B) 3 1 4 2 (C) 4 3 2 1 (D) 2 3 4 1 The GST subsumed— (A) Entertainment tax (B) Value-added tax (C) Union excise duty (D) All of the above Which among the following is correct for the discretionary fiscal action ? (A) Payment of Unemployment insurance. (B) Payment of Social Security to the retired individuals. (C) A managed change in level of Government spending and/or net tax revenues. (D) Automatic changes in net tax revenues that result from income tax structure. Following are some of the effects of parallel economy in India— 1. Loss of revenue to the Government. 2. Greater burden on honest tax-payers. 3. Results in equitable distribution of wealth and income. 4. Encouragement to non-essential items of conspicuous consumption. Find the correct combination from the code given below— (A) 1, 2 and 3 (B) l, 2 and 4 (C) 2, 3 and 4 (D) l and 4 If the offer curves of the trading countries have constant slope, the terms of trade among them will be (A) constant (B) decreasing (C) increasing (D) indeterminate Recently launched ‘Indradhanush’ programme is related with— (A) Production of medicines (B) Vaccination against fatal diseases (C) Multivocational training for adolscent girls (D) None of the above

NTA/UGC Practice Sets Economics 81. Which among the following are true for excess demand function for an individual? (A) Homogeneous of degree zero in all prices. (B) These obey Walras’ law. (C) Both (A) and (B) are true. (D) Neither (A) nor (B) are true. 82. Who among the following called trade as the ‘hand maiden’ of growth ? (A) J. Viner (B) Irwing B. Kravis (C) Anne Kruger (D) J. Bhagwati 83. A firm will be of optimum size when (A) Marginal cost is at a minimum. (B) Average cost is at a minimum. (C) Marginal cost is equal to marginal revenue. (D) The ¿rm maximises its output. 84. Consider the following reasons of continuous decline in average land holding rise in India. Answer from the code given below— 1. Law of Inheritance 2. Consolidation 3. Farm Mechanization 4. Desire for land ownership Code: (A) l and 2 (B) l and 4 (C) 1, 2, 3 and 4 (D) 1, 3 and 4 85. Which of the following statements is/are true for Arrow-Debreu model of general equilibrium? (A) Goods are identified where they are to be delivered. (B) Goods are identi¿ed when they are to be delivered. (C) Both (A) and (B) (D) None of these 86. Consider the following : 1. Interest rate on bonds 2. Rate of inflation 3. Ratio of savings to investment The velocity of money according to Friedman depends upon which of the above factors? Choose the code to answer— Code: (A) 1, 2 and 3 (B) 2 and 3 (C) 1 and 2 (D) Only 3 87. Logical extension of Cournot model is (A) Bertrand model (B) Stackelberg model (C) Sweezy model (D) None of the above 88. For the import substitution policy of Latin American countries in 1950’s which of the following is/are true? I. It resulted in overvalued exchange rate. II. It treated development as a natural process. Answer from the codes below : Codes : (A) Both I and II are true. (B) Only I is true. (C) Only II is true. (D) Neither I nor II are true.

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89. Diversification of agriculture implies (A) Increase in the cropping intensity. (B) Shifting labour from agriculture to other areas. (C) Promoting cottage and village industries. (D) Changing the cropping pattern in favour of horticulture and Àoriculture crops. 90. The Residex Index has been conceived and instituted by— (A) National Housing Bank (B) Jones Lang la Salle (C) HDFC (D) CREDAI 1 −1/2 91. Give the demand function as p = q , consumer’s 4 surplus at q = 25 is— consumer’s surplus at q = 25 is— (A) 1.12 (B) 1.25 (C) 1 (D) 0.5 92. Given the CES production function as 1

y = ⎡⎣a1 x1ρ + a 2 x ρ2 ⎤⎦ ρ The elasticity of substitution between factors is (A) 1 (B) ȡ 1 (C) 1/ȡ (D) 1− ρ 93. Consider the following concepts : I. Leontief paradox II. Linder Hypothesis Which among the following can be treated as exception to the conclusions of the Heckscher-Ohlin theory ? Answer from the codes below : Codes : (A) Both I and II are exception. (B) Neither I nor II are exception. (C) Only I is an exception. (D) Only II is an exception. 94. Which of the following is true for an optimum solution of a linear programming problem? (A) Number of non-zero valued slack variables is equal to the number of constraints. (B) Number of non-zero valued variables (including slack) is exactly equal to the number of constraints. (C) Number of non-zero valued slack variables is equal to the number of binding constraints. (D) Number of non-zero valued variables is equal to the number of non-binding constraints. 95. The term ‘best’ in the best linear unbiased estimators (BLUE) implies— (A) Maximum variance of the estimators (B) Minimum variance of the estimators (C) Average variance of the estimators (D) Unbiased variance of the estimators 96. In a two-variable regression, Y is dependent variable and X is independent variable. The correlation

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