1. Examine which of the following codes is/are correct:
Code Type of Effect Money Income Price Real Income
Code 1 Income Effect Changes Constant Changes
Code 2 Substitution Effect Changes Constant Constant
Code 3 Price Effect Constant Changes Changes
A) Codes 1, 2 and 3 are correct B) Codes 2 and 3 are correct
C) Codes1 and 3 are correct D) None of these
2. The revenue raised through the printing of money is called:
A) Inflation tax B) Seigniorage
C) Deflationary tax D) None of these
3. Lerner Index is a
A) measure of firm’s monopoly power
B) measure of Industry’s monopoly power
C) both A and B
D) none of the above
4. Under perfect competition, economic efficiency is achieved when
a) (MRTSLK) X = (MRTSLK) Y
b) (MRSXY) A = (MRSXY) B
c) (MRSXY) A = (MRSXY) B = MRTXY
A) All the conditions of Codes a, b and c are satisfied
B) Only conditions in Codes b and c are satisfied
C) Only conditions in codes a and c are satisfied
D) Only condition in code c is satisfied
5. According to supply side economics a tax cut:
A) will increase aggregate supply
B) will increase aggregate demand
C) shifts both aggregate supply and aggregate demand towards right
D) leaves both aggregate supply and aggregate demand unaltered
6. Impossible Trinity implies
A) fixed exchange rate, full convertibility of currency in capital account and independent monetary policy
B) flexible exchange rate, full convertibility of currency in capital account and independent monetary policy
C) fixed exchange rate, full convertibility of currency in current account and independent monetary policy
D) flexible exchange rate, full convertibility of currency in current account and independent monetary policy
7. Leverage Ratio refers to ratio of:
A) Capital to assets B) Assets to Capital
C) Debt to Equity D) None of these
8) Public Goods are:
1. that they are non rival in consumption
2. that are non exclusive
3. leads to a free rider problem
A) 1, 2 and 3 are correct B) 1 and 2 are correct
C) 1 and 3 are correct D) 2 and 3 are correct
9. For a perfectly competitive firm TC = 3Q2
-14Q+12 and TR = 4Q Find the equilibrium
output using marginal approach
A) 6 B) 2 C) 3 D) None of these
10. Money that has no intrinsic value is called:
A) Commodity money B) Gold standard
C) Fiat money D) None of these
11. The Misery Index measures:
1. the political effect of Unemployment and Inflation
2 it is the sum of unemployment and inflation
A) 1 and 2 are correct B) 1 only is correct
C) 2 only is correct D) 1and 2 are incorrect
12. An open market purchase of bonds:
A) shifts the LM curve to the left
B) shifts the LM curve to the right
C) LM curve remains unaffected
D) none of these
13. The proponent behind infant industry argument is:
A) Samuelson B) Jacob Viner
C) Alexander Hamilton D) Amarthya Sen
14. Given the following data, find the increase in real income from year1 to year 5:
Item Year 1 Year 5
Total Income $400 billion $450 billion
Price Index $1.0 billion $1.5 billion
A) 200 B) 100 C) 110 D) none of these
15. ———– is also known as negative taxes.
A) Transfer payments B) Regressive taxes
C) Proportional taxes D) Progressive Taxes
16. Duties that vary with the price of the commodities imported are:
A) sliding scale duties B) specific duties
C) advalorem duties D) none of these
17. Crowding out occurs when——- leads to———.
A) expansionary fiscal policy, fall in interest rate
B) expansionary fiscal policy, rise in interest rate
C) contractionary fiscal policy, rise in interest rate
D) contractionary fiscal policy, interest rate remains unchanged
18. Green Bonds were first issued by:
A) World Bank, 2008
B) Ministry of Environment and Forests, 2008
C) Environmental and Pollution Control Board, 2008
D) Ministry of Finance, 2008
19. Examine whether List 1 is correctly matched with List 2
List 1 List 2
1 L K Jha Committee – Indirect tax
2 Swach Bharat Cess – Services tax
3 Indira Awas Yojana – Ministry of Rural Development
4 Tendulkar Committee – Poverty
A) 1, 2 and 3 are correct B) 2, 3 and 4 are correct
C) 1, 3 and 4 are correct D) 1, 2, 3 and 4 are correct
20. Which of the following statements with respect to capacity curve is correct?
1. it introduces a relationship between nutrition and capacity
2. the capacity curve is initially close to zero
3. there will be a marked increase in work capacity with nutrition
4. the capacity curve does not have a diminishing returns phase
A) 1, 2 and 3 are correct B) 2, 3 and 4 are correct
C) 1, 3 and 4 are correct D) 1, 2, 3 and 4 are correct
21. A country will tend to export commodities that are intensive in factors that are
possessed by that country in relative abundance is the essence of
A) Heckscher-Ohlin theory
B) Comparative Cost Advantage theory
C) Asolute Cost Advantage theory
D) None of these
22. Indirect demand is also known as:
A) Producers’ demand B) Consumers’ demand
C) Autonomous demand D) Non-durable demand
23. A theory that extensively discusses horizontal differentiation of products is:
A) Rybczynski’s Theorem B) Product Cycle Theory
C) Lancaster Model D) None of these
24. Which of the following statements with respect to Gunnar Myrdal’s Theory of
Underdevelopment is correct?
a) the theory is based on the concept of both regional and international equality
b) the theory explains the operation of strong backwash effect and weak spread effect of UDCs
A) a is correct B) b is correct
C) both a and b are correct D) both a and b are incorrect
25. The highest form of economic integration is:
A) economic union B) customs union
C) free trade D) none of these
26. Advalorem tax is:
A) tax imposed in accordance with the value of the product
B) tax imposed in accordance with the quality of the product
C) tax imposed once a good crosses border
D) tax imposed in accordance with the quantity of the product
27. The name associated with harmonizing the role of development financial institutions
and banks:
A) S H Khan B) Tarapore C) Narasimham D) Reghuram Rajan
28. For mutually exclusive events A and B, Probability of (A∩B) is—- and probability of
AUB is—–.
A) zero, P(A) x P(B) B) zero, P(A) + P(B)
C) Zero, one D) none of these
29. Suppose by the year 2000, the Government increased its investment spending by $15
billion. The marginal propensity to consume is 1/4 and initial income is $450 billion.
What is the new level of income?
A) $450 B) $490 C) $470 D) $480
30. The convex shape of the indifference curves are explained by:
A) substitution effect B) income effect
C) price effect D) none of these
31. A measure of the degree of linear association between the two variables is:
A) Regression B) Partial correlation
C) Correlation D) Partial regression
32. Which of the following statements regarding Kissan Credit Card is correct?
a) It is a joint initiative of Government of India, RBI and NABARD
b) It provides farmers timely and adequate credit
c) Farmers can access credit without repeated bank screening process
A) a and b are correct B) b and c are correct
C) a and c are correct D) a, b and c are correct
33. The Gender Inequality Index is a composite index of:
A) reproductive health, empowerment and labour market participation
B) reproductive health, adult literacy and labour market participation
C) reproductive health, empowerment and life expectancy
D) reproductive health, life expectancy and adult literacy
34. PURA, the lever of economic upliftment of the villages is associated with:
A) Mahatma Gandhi B) Dr. A P J Abdul Kalam
C) Jawaharlal Nehru D) Rajiv Gandhi
35. The following table matches plan objective with five year plan, Which of the
following is/are correct?
Code 1 Food, Work and Productivity 7th plan
Code 2 Growth with Social Justice and Equality 9 th plan
Code 3 Garibi Hatao 6 th plan
Code 4 Towards Faster and More Inclusive growth 11th plan
A) Codes 1,2 and 3 are correct B) Codes 2, 3 and 4 are correct
C) Codes1,3 and 4 are correct D) Codes 1, 2,3 and 4 are correct
36. Subimal Dutt Committee is associated with:
A) Industrial Policy B) Poverty Alleviation
C) Eradication of Inequality D) Education Policy
37. Which of the following codes are correctly matched?
Code 1 Posner Technological gap theory
Code 2 B Vernon Product Life Cycle Theory
Code 3 Jagadish Bhagwati Immiserizing Growth
Code 4 Greenaway and Milner Intra-Industry Trade
A) Codes 1,2 and 3 are correct B) Codes 2, 3 and 4 are correct
C) Codes1,3 and 4 are correct D) Codes 1, 2,3 and 4 are correct
38. The term Hindu Rate of Growth is coined by:
A) Prof. Mahalanobis B) Prof. Raj Krishna
C) Isher Judge Ahluwalia D) Amarthya Sen
39. Absence of symmetry is:
A) skewness B) kurtosis C) moments D) none of these
40. The divergence between private gains and social gains is called——-.
A) market failure B) externality
C) social cost D) social effect
41. Practice of pricing to drive current competitors out of business and to discourage new entrants:
A) Price discrimination B) Price leadership
C) Predatory pricing D) Marginal cost pricing.
42. If Mr.Max’s total cost function is 2×2+60x+90 and if he repairs 12 cars, his average variable costs will be
A) 90 B) 94 C) 84 D) 92
43. Seeta’s utility function is U(AB) = AB, where A and B are the numbers of apples and oranges, respectively, that she consumes. When she is consuming 25 apples and 100 oranges, then if we put apples on the horizontal axis and oranges on the vertical axis, the slope of the indifference curve at her current consumption is:
A) -1/10 B) -4 C) 1/4 D) -1/4
44. Imposing tariff on an import leading to a fall in the relative price of that product is explained in:
A) Leontieff paradox B) Backwash effect
C) Metzler paradox D) Income effect
45. The implication of Ricardian Equivalence is that:
a) Government debt is equivalent to future taxes, and if consumers are
sufficiently forward looking, future taxes are equivalent to current taxes
b) financing the government by debt is equivalent to financing it by taxes
A) a is correct B) b is correct
C) both a and b are correct D) both a and b are incorrect
46. Which of the following statements are correct with respect to Law of Variable proportions?
a) The shape of Average Product and Marginal Product of the variable factor (say labour) are determined by the shapes of TR curve
b) APL rises, reaches a maximum and then falls, but remain positive as long as TP is positive
c) The MPL rises, reaches a maximum after APL reaches its maximum, and then declines
A) a and b are correct B) a and c are correct
C) b and c are correct D) a,b and c are correct
47. The sum of currency and bank reserves are called:
A) Monetary base B) High Powered Money
C) Both A and B D) Neither A nor B
48. An increase in money supply shifts the L M curve rightward, resulting in:
A) an increase in the rate of interest and an increase in the level of output
B) a decrease in the rate of interest and a decrease in the level of output
C) a decrease in the rate of interest and a decrease in the level of output
D) a decrease in the rate of interest and an increase in the level of output
49. The absorption approach of devaluation was developed by
A) Sidney Alexander B) Jacob Viner
C) Myrdal D) Michael Spence
50. Given the Mundell-Fleming model, an increase in the rate of interest in a country, say
country A
A) Results in an depreciation of country A’s currency in a flexible exchange rate
environment
B) Results in an appreciation of country A’s currency in a flexible exchange rate
environment
C) Results in an appreciation of country A’s currency in a fixed exchange rate
environment
D) Results in an depreciation of country A’s currency in a fixed exchange rate
environment
51. J curve effect explains that:
A) When a currency depreciates, the value of net exports rises temporarily and
then falls
B) When a currency appreciates, the value of net exports rises temporarily and
then falls
C) When a currency depreciates, the value of net exports remains constant
D) none of these
52. An explanation of deterioration in terms of trade with respect to primary products
exporting countries is provided by:
A) Gross barter terms of trade B) Singer-Prebisch Thesis
C) Back Wash Effect D) None of these
53. If the cost function C(𝑥) of producing 𝑥 quantities of a product is given by
C(𝑥) = 500 𝑥
2
+ 2500 𝑥 + 5000 and each unit of the product is sold at Rs 6000 then what
are break even points?
A) 4, 3 B) 5, 2 C) 10, 2 D) 6, 5
54. Given below an assertion and reason statement regarding Okun’s law. It states that:
Assertion (A) : An annual 2.5% increase in the rate of real growth results in a decrease in the rate of unemployment
Reason (R) : Production occurs with the employment of more economic resources and therefore, there should be fewer unemployed workers at higher output levels
A) Both (A) and (R) are true and (R) is the correct explanation of (A)
B) Both (A) and (R) are true and (R) is not the correct explanation of (A)
C) (A) is true and (R) is false
D) (A) is false and (R) is true
55. ——-shows the degree of peakedness of a distribution, usually taken relative to normal distribution.
A) Skewness B) Kurtosis C) Moments D) none of these
56. Suppose in an economy having two sectors, let C = $50+0.5y, I = $50 -2i, L= 0.1y-5i and
M=$150. Find the IS and LM Equation
A) IS Equation I = -0.25y +50 B) IS Equation I = 0.25y +50
LM Equation = 0.2y-30 LM Equation = 0.2y+30
C) IS Equation I = -0.25y – 50 D) None of these
LM Equation = 0.2y+30
57. In Game theory modeling, strategy in which a player makes a random choice among two
or more possible outcomes, based on the set of chosen probabilities
A) pure strategy B) Maxmin Strategies
C) Minimax Strategies D) Mixed strategy
58. A increase in government expenditure under Classical system will:
A) Increase the interest rate.
B) Decrease the interest rate.
C) No change in the interest rate.
D) First increases and then decreases.
59. According to the Cambridge version of Quantity theory of money:
A) The demand for money is proportional to the nominal income
B) The Supply of money is proportional to nominal income.
C) The demand for money is proportional to the price.
D) The supply of money is proportional to the price.
60. In money supply, M3 is defined as :
A) M1 plus post office saving deposit.
B) M2 plus post office saving deposit.
C) M1 plus time deposit with banks.
D) M2 plus time deposit with banks.
61. In situation of liquidity trap in an economy:
A) Fiscal policy is ineffective but Monetary effective
B) Monetary Policy is ineffective but Fiscal policy is effective.
C) Both monetary and fiscal policies are effective.
D) Both monetary and fiscal policies are ineffective.
62. Consider following the economists with their contributions to the macroeconomic schools.
List 1 List 2
a) Milton Friedman 1. Austrian School. –
b) Robert Mundell 2. Keynesian
c) Mrs. Joan Robbinson. 3. Monetarism
d) Carl Menger 4. Supply side economics.
A) a-3, b-4, c-2, d-1 B) a-2, b-3, c-1, d-4
C) a-3, b-2, c-4, d-1 D) a-4, b-3, c-2, d-1
63. According to New Classical economics:
A) Anticipated policy changes bring about changes in real variables.
B) Unanticipated policy changes can bring about changes in real variables.
C) Decision is based on perfect information.
D) Markets doesn’t clear continuously.
64. According to Monetarism:
a) Money supply has dominant influence on nominal income.
b) In the short run, money supply influences real variables.
c) In the long run, money supply influences only the nominal variables and not real variables.
d) Private sector is inherently stable.
A) Only a is true B) b and d are true
C) a and d are true D) All are true.
65. A reduction in money wages will bring down the price of goods which in turn increases
the money supply. This reduces the interest rates and hence induces investment and
aggregate demand is enhanced which results in increase in output and employment:
A) Keynes effect B) Pigou effect
C) Wealth effect D) Real Balance effect
66. Suppose nominal GDP is Rs.500/- in year one. If GDP deflator doubles by year six while
real output has increased 40 per cent, nominal output in year six is :
A) 2000 B) 1400 C) 1000 D) 750
67. When the value of K= 4 and L = 4 and the production function is Y = A (K 0.5 L
0.5),
output is:
A) 80 when A = 5 B) 80 when A = 10
C) 40 when A = 5 D) 40 when A = 10
68. Find the total cost of a commodity when marginal cost MC = 5 + 8X, and fixed cost is
Rs.75 :
A) 8 + 75X B) 5 X2+ 4x C) 5X+4X2
+75 D) 8X + 75
69. Arithmetic mean of 100 items is 34. At the time of calculation, three items 118, 70 and 19
were wrongly taken as 180, 17 and 90 respectively. What is the correct mean?
A) 33.2 B) 43.5 C) 28.1 D) 38.5
70. The coefficient of variation of a data set is 20 % and the variance of the set is 16. What is
the mean of the data set?
A) 25 B) 20 C) 125 D) 4
71. What is the probability of getting a Spade or a King from a pack of 52 cards?
A) 1/4 B) 1/13 C) 17/53 D) 4/13
72. It is given that 3% of the electric bulbs manufactured by a company are defective. Using
Poisson distribution, find the probability that a sample of 100 bulbs will contain no
defective bulb. Given that e-3 = 0.05
A) 0.01 B) 0.05 C) 0.00 D) 1.00
73. Which of the following is a non probability sampling?
A) Cluster sampling B) Stratified sampling
C) Snow ball sampling D) Systematic sampling
74. Consider that we have fixed type I error at 1%, then:
A) There is 1 chance in 100 that we will reject null hypothesis when it is true
B) There is 1 chance in 100 that we will reject null hypothesis when it is false
C) There is 1 chance in 100 that we will accept null hypothesis when it is false
D) There is 1 chance in 100 that we will accept null hypothesis when it is true
75. If MR is Rs.50 and price elasticity of demand is 2, find AR:
A) 50 B) 40 C) 80 D) 100
76. R M Solow growth model assumes:
A) Labour and capital are substitutable
B) Increasing return to scale
C) There is a Knife edge equilibrium
D) Diminishing return to scale
77. In Joan Robinson’s model, the growth rate of capital is capable of increasing:
A) If the net return to capital rises in equal proportion to the capital labour ratio
B) If the capital labour ratio rises in greater proportion than the net return to capital
C) If the net return to capital rises in greater proportion than the capital labour ratio
D) None of the above
78. Big Push Theory was developed by:
A) Joseph A Schumpeter B) J.M. Meade
C) Nicholas Kaldor D) Rosenstein Rodan
79. In Lewis theory of unlimited labour supply:
a. Marginal Product is zero in subsistence sector
b. The wage level in capitalist sector cannot be less than the Average Product in the
subsistence sector
c Surplus value is reinvested in the capitalist sector
d Capital Labour ratio is constant in the capitalist sector
A) Only a is true B) Only a and b are true
C) Only a, b and c are true D) All are true
80. Nurkse Theory states about
a. Feeding surplus labour b. Financial of Tools
c. Savings potential d. Disguised Unemployment
A) a and c are True B) b and d are True
C) a and b are True D) All are True