PAPER II

ECONOMICS

Note : Attempt all the questions. Each question carries two (2) marks.

S : G UPUS hUP. JS Csk (2) vsP.

1. The factors that influence demand for a producer can thus be enumerated as
1) Income of the Consumer 2) Supply of the product
3) Consumption of the product 4) The selling price of the product

J UP u Szxz u RUPq uUPzvS

Emkzx T
1) ~Px 2) P

3) ~P 4)

2. The Marshallian utility analysis has the defects and weakness.

1) Single commodity Model is Unrealistic

2) Utility can be Measured Cardinally

3) Money is a perfect measure of Utility

4) Marginal Utility of Money is constant

~P S SP, [P Pskx.

1) J ~P v Gx x

2) k Gsn AhzuUPx

3) n mh AUS \ Ak

4) nzv { {uPx

3. Hicksian A. Revision of Demand Theory published in the year

1) 1953 2) 1952

3) 1954 4) 1956

QU] A. vz u PP RUPq Bsi x

1) 1953 2) 1952

3) 1954 4) 1956

E 3 M0402
4. The Marginal Rate of Substitution (MRS) is the
1) Rate of exchange between single units of goods X and Y which are equally
preferred.
2) Rate of exchange between more units of goods X and Y which are equally
preferred
3) Rate of exchange between some units of goods X and Y which are equally
preferred
4) Rate of exchange between other units of goods X and Y which are equally
preferred

\ { A Qu v Gx
1) X, Y BQ \{ shk mPUQh JUT
zu Qu
2) X, Y BQ \{ shk mPUS Ch
TPUP zu Qu
3) X, Y BQ \{ shk mPUS Ch ]]
TPUP zu Qu
4) X, Y
BQ \{ shk mPUS Ch
TPUP zu Qu

5. The indifference curve analysis was first evolved by

1) David Ricardo 2) F.Y. Edgeworth
3) Alfred Marshall 4) J.R. Hicks and R.G.D Allen

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1) hm Ph 2) GL K Gmz
3) Bm 4) .B. U B..i. B

6. The assumptions of the Revealed Preference Theory is

1) The consumer buys a combination of two, but not more than two commodities
2) The consumer buys a combination of three commodities
3) The consumer buys only a single commodity
4) The consumer consumes various combination of commodities

hP mh J PP PxPP
1) ~P Csk mP Cnzx [SQ B CskUS mh
mP Cnzu C
2) ~P mP Cnzx [SQ
3) ~P K J mk [SQ
4) ~P mP CnP \zx Q

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7. Identify the correct statement
1) The law of increasing returns to scale relates to the effect of changes in facto
proportions
2) Economics of scale arise only because of indivisibilities of factors of production
3) External economies of scale can accrue only to the exporting sector
4) Decreasing returns to scale occur when output increases in a smaller proportion
with an increase in all inputs

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1) BUPUT AkP [P uUS uUPzxh v
vmk Qu AvP uhhx
2) uU TP SUPu u, Amk
EQx
3) P AP Smh P A HvP mk
iiP Pa \Qx
4) G EkP AvPUP, Jmkzu k Su Quzv
AvPzu, v v u Su {PQx

8. Returns to scale refer to changes in output when

1) All factors of production are changed in the same proportion
2) There is change in factor proportions
3) Some factors are changed while other remain constant
4) None of factors is changed

v u Szu Ak Gx mi | [P Gx
SUS G
1) Azxz uU TP, J v Ami u
2) BUPU TP Ami |u
3) ] BUPUTP uh, PP E
4) T BUPUTP Gv

9. An Inquiry into the Nature and Causes of the Wealth of Nations, was published by
1) J S Mill 2) Ricardo
3) Adam Smith 4) J B Say

u\[P \zvP Pn[P, CP Szu uh Gu mh

1) .G. 2) UPh
3) Bh z 4) ..
E 5 M0402
10. The amount a consumer unit could consume by maintaining its wealth intact is
known as
1) Transitory income 2) Transitory consumption
3) Permanent income 4) Permanent consumption

ux \ {z uUP zuQ ~P A ~P
~PkuU Sx
1) FkPh 2) FkPh ~P
3) { 4) { ~P

11. A coefficient which shows the effects of a change consumption on investment is known
as
1) Consumption multiplier 2) Investment multiplier
3) Marginal propensity to investment 4) Accelerator

J SnP umi ~P PU Pmkx C[P AkQx

1) ~PUP 2) umk UP
3) umkUS { US 4) F\mh

12. The book, The Purchasing Power of Money is written by

1) J. S .Mill 2) David Ricardo
3) Crowther 4) Irvin Fisher

nzv [Sv G Gv
1) .G. 2) hm Ph
3) Su 4) C

13. In India, one rupee note and coins are issued by

1) Reserve Bank of India 2) Commercial Bank
3) Ministry of Finance 4) All these

Cv J u, |n[P RUPsh A hkQ

1) Cv \ [Q 2) P] [Q
3) {v Aa\P 4) C Azx

14. represents the subjective minimum level of interest rates

1) Transitive motive 2) Speculative motive
3) Liquidity trap 4) Precautionary motive

Sum\ u\h mi Quzu {vzxkzxQx

1) oP E Gsn 2) Cz u E Gsn
3) n vU P E Gsn 4) a\UP E Gsn

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15. Rise in price lowers the real value of cash balance is known as
1) Pigou effect 2) Keynes effect
3) Tobin effect 4) Chamberlin effect

, na \ Es vU Sx C[V AkQx

1) P 2) P_

3) h 4) \

16. Cobweb Theory explains cyclical fluctuations in terms.

1) Static 2) Dynamic

3) Comparative static 4) Comparative dynamic

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1) {uP 2) C[Sux

3) Jmk {uP 4) Kmk C[Sux

17. The concept of vicious circle of poverty is associated with

1) Ragner Nurkse 2) J.M.Keynes

3) P. Samuelson 4) J.S. Mill

|a_a _ a \UP PzuUPzxh uhh

1) U |U_ 2) .G. P_

3) . \\ 4) .G.

18. The concept of sustainable development was first introduced by

1) Dussenberry 2) Keynes

3) Kindlegerger 4) Brundtland

{uPh U PzuUPzu u APkzv

1) x\ 2) P_

3) QiPP 4) smsm

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19. In Solows model of growth, the output per capita is a function of
1) Rate of change of capital-labour ratio
2) Technological progress
3) Labour- capital ratio
4) Capital-output ratio

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1) u & u Qu Ak
2) u~m a]
3) u & uk Qu
4) u & Qu

20. The Big push strategy of development was first advocated by

1) Rosenstein Rodan 2) Simon Kuznets
3) W.A. Lewis 4) A.O. Hirschman

u Ezv u RUPsh Ab APkzumhx

1) \h h 2) \ Sam_
3) h. H. 4) H.K. Qa

21. Nurkse says in the context of an underdeveloped country inducement to invest is

limited by
1) Lack of investment opportunities 2) Lack of savings
3) The size of the market 4) The policy of the government

P |mh zu uk \uS ExuP,

PmkkzxuP Cx G |U] Tx
1) umiP P S 2) \ S
3) A[Pi A 4) A] PP

22. Antyodaya Anna Yojana was launched in

1) 1999 2) 2000
3) 2003 4) 2005

Avu A R umh Bsi AP \mhx

1) 1999 2) 2000
3) 2003 4) 2005

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23. An economy where modern industrial sector and traditional subsistence sector co-
exist is known as
1) Mixed economy 2) Market economy
3) Dualistic economy 4) Balanced economy

J P uzv, | u\ , \ ux miPP
mk US \x C[P
1) P u 2) A[Pi u
3) Cmh u 4) \{ u

24. Even though the factor endowments in a developing country favour adoption of
labour-intensive techniques, the country is forced to import capital intensive
technology from some developed countries due to
1) Differences in amount of products
2) Differences in quality of products
3) Differences in cost of production
4) Differences in demand for products

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\uPPz ysi, ] hu |kPx uk \ Bu
u ~mzu CUSv \ { GuPP Hmhx G
1) \ A kP
2) mP uzv E kP
3) ua \ kP
4) uPUP u | kP

25. Which is the main point on the basis of which public finance can be separated from
private finance?
1) Price policy
2) Borrowings
3) Secrecy
4) Elasticity in income

x {vx u {v kzxv P UQzx uuP

Ax
1) PP
2) PhP
3) un
4) |Qu

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26. During depression period the nature of public expenditure should be
1) Short term
2) Too short term
3) Medium term
4) Long term

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1) SQ PzvPx
2) P SQ PzvPx
3) Ch{U PzvPx
4) }sh PzvPx

27. In the following which is the characteristics of a tax?

1) Compulsory
2) Optional
3) Forced
4) Nationality

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1) Pmhx
2) \ux
3) zxx
4) u] \x

28. Which of the following is true?

1) Tax evasion is not illegal
2) Tax evasion is not the loss to the government
3) The impact is the beginning of taxation
4) The incidence of a tax can be shifted

R umh Gx Es?
1) H S
2) H A_US C
3) uUP v uhUP BS
4) {PP kuS

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29. Increase of deflation which of the effects is correct
1) Increase in consumption
2) Decrease in consumption
3) No effect on consumption
4) None of these

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1) ~P AvP
2) ~PU Sk
3) ~P Gu C
4) T G

30. For the first time VAT was introduced in

1) 1854
2) 1954
3) 1964
4) 1994

uuP v Tmk (m) APkzumh Bsk

1) 1854
2) 1954
3) 1964
4) 1994

31. Public Budget is

1) An instrument of economic policy
2) Wastage of money, time and energy
3) Unnecessary mental exercise
4) None of these

x mm Gx
1) uU PPUP J P
2) , B, |
3) u ]
4) C G

E 11 M0402
32. Deficit financing leads to
1) Decrease in money supply
2) Increase in money supply
3) Deflation
4) Increase in savings

US {v RUPsh {US Cmka \Qx

1) n UPzuU SUQx
2) n UPzu AvPUQx
3) \zxQx
4) \ AvP

33. The theory of reciprocal demand in the field of international trade is propounded by-
1) Haberler
2) Marshall
3) Ricardo
4) Mill

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PPz uu.
1) P
2) \
3) Ph
4)

34. The foreign trade multiplier is given by

1) K ds dM

2) K ds ds d

3) K dy ds dm

4) K 1 dmpc

A oP UP C[P umkx
1) K ds dM

2) K ds ds d

3) K dy ds dm

4) K 1 dmpc

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35. To which of the following would the Mercantilists would have objected?
1) Free trade
2) Restricting imports
3) Stimulating exports
4) Accumulation

R umh Gx Szx oPP uUQ?

1) uh oP
2) CUSvU Pmkkzxu
3) Hv FUSzu
4) Szu

36. The beggar thy neighbor policy refers to the use of tariff for
1) Improving countrys balance of trade
2) Eradicating unemployment
3) Earning foreign exchange
4) Importing sophisticated technology

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SkQx
1) u\zv oPa \ kzxQx
2) z vshmhzu APQx
3) Aa \o AvPUQx
4) |z u~mzu CUSv \Qx

37. Interest arbitrage refers to transfer of liquid assets from one monetary centre (and
currency) to another in order to
1) Take advantage of the difference in interest rates
2) Speculate and regulate the rate of interest
3) Maximise countrys welfare
4) Strengthen the interest rate

mi \\z wn Gx vUP mP J n zvx

US x R umhu PnP {PuU SUQx
1) Qu[P E mi kzv Bu uku
2) Quzu J[S\u
3) u\zv |zu Szu
4) Quzu kzxu

E 13 M0402
38. The commodity terms of trade is given by
Px
1) Tc
qx

Pm
2) Tc
qx

qx
3) Tc
qm

Px
4) Tc
Pm

oP v C[P umkx

Px
1) Tc
qx

Pm
2) Tc
qx

qx
3) Tc
qm

Px
4) Tc
Pm

39. Dunkel Draft was related to

1) Uruguay Round of Negotiations

2) Super 301 Treaty

3) Pharmaceutical industry

4) Atomic energy

h[P AUP Cuh uhhx

1) ES mh\ Ju

2) E 301 Ehk

3) x uz u

4) Aq \ B

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40. Consider the following statements and select the right answer from the code given
below :
Assertion (A): Monetary approach explains changes in balance of payment in terms
of demand for and supply of money.
Reasoning (R): Adverse balance of payment can be corrected through monetary
measures.
1) A is partially correct and R is a partial explanation for A
2) A is incorrect and R is not associated with A
3) A is correct and R is not a correct explanation for A
4) A is correct and R is the correct explanation for A

R umh UQ[P izx AuP \ h Ai

umhx u \vkP

Ev \P (A): nzu nzu uh nzua

\mk [P {v AqS USQx

Pn (R): \uP n zu ng\ AkP \

\h.
1) A Gx v \ R Gx A P v UPzuz uQx
2) A Gx \ R Gx A h uhhuP C
3) A Gx \ R \ UPzu A USz uuP A
4) A Gx \ R Gx A Sa \ UPzuuP AQx

41. The concept of GVA in national income calculation is introduced during

1) 1990-91 2) 2000-01
3) 1996-97 4) 2011-12

GVA PzuUP u] PnURmiS AP \mh h

1) 1990-91 2) 2000-01
3) 1996-97 4) 2011-12

42. The coins and notes in circulation are called as

1) M1 money 2) M3 money
3) M4 money 4) M5 money

nzuP, |n[P mi Cx C[V \kQx.

1) M1 n 2) M3 n
3) M4 n 4) M5 n

E 15 M0402
43. What was the period of first finance commission?
1) 1947-52
2) 1952-57
3) 1974-79
4) 1980-85

u {vUS PPmh
1) 1947-52
2) 1952-57
3) 1974-79
4) 1980-85

44. When was FERA introduced in India?

1) January 1974
2) January 1956
3) December 1964
4) January 1951

Cv Gx FERA AP \mhx?
1) 1974
2) 1956
3) i\ 1964
4) 1951

45. What is the purpose of having SLR in the banks?

1) To meet the expected demand from depositors
2) To reduce inflation
3) To control deflation
4) To control unemployment

[QP SLR zu |UP x?

1) \ z uPPx u GvPu
2) nUPzuU Szu
3) \uz ukzu
4) z vshmhzuU Pmkkzxu

M0402 16 E
46. Which one of the following is the correct concept of natural rating unemployment?
1) Frictionally and structurally unemployed
2) Frictionally and cyclically unemployed
3) Structurally and cyclically unemployed
4) Frictionally, structurally and cyclically unemployed

z vshmhzu CP vk \ \ PzuUP
RUPsh Gx?
1) E A\ o
2) E _ o
3) A\ _\ o
4) E\, A\, _\ o

47. Trickle down strategy implies

1) Growing GNP taking care of poverty
2) Reduction in the income of the upper class by deliberate redistribution
3) Direct achievement of better nourishment, health, education, etc. instead of
growth of GNP first
4) To target a particular sector of economy for betterment

Trickle down | RUPshu EhUQx

1) GNP P
2) E x zuz vmhmh Q Szu
3) GNP a]US v P, Eh|, Fmhkzu BQ kzxu
4) Smh u S CUPPU Psk k Aha \u

48. The term HYVP in new agriculture strategy stands for

1) High Yielding Variety Pesticides
2) High Yielding Volume Production
3) High Yielding Varieties Programme
4) High Yielding Volume Programme

x \U PP HYVP Gx CuU SUS

1) E a\ u a]UPP
2) E P a\ u
3) E P a\ |S P P vmh
4) E P a\ uvmh

E 17 M0402
49. Spearmans rank correlation co-efficient is defined as

N N 2 1
1) R 1
6 D 2

6 D 2
2) R 1
N N 2 1

N3 N
3) RN
6 D 2

6D 2
4) RN
N3 N

u\ SnP C[V UPkQx

N N 2 1
1) R 1
6 D 2

6 D 2
2) R 1
N N 2 1

N3 N
3) RN
6 D 2

6D 2
4) RN
N3 N

50. F ratio is equal to

1) F S 22 / S12

2) F (S12 ) (S22 ) 100

3) F S12 ( S 22 ) 100

4) F S12 / S 22

F Qu CuSa \x

1) F S 22 / S12

2) F (S12 ) (S22 ) 100

3) F S12 ( S 22 ) 100

4) F S12 / S 22

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 ROUGH WORK

E 19 M0402
 ROUGH WORK

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