(1) A recessionary gap measures the :
A) Amount by which autonomous spending is below to that needed to achieve a full employment equilibrium.
B) Amount by which aggregate spending exceeds to that needed to achieve full employment.
C) Difference in real output between the Classical model and the Keynesian depression model.
D) Extent of paradox of thrift.
Ans) A
(2) Match List-I with List-II and show the relation between trade cycle and profit by selecting correct codes given below.
List-I
a) Recession b) Boom c) Recovery d) Depression
List-II
i) Low ii) Positive iii) Highest level iv) Negetive
Codes :
a b c d
A) iii iv i ii
B) i iii ii iv
C) iv iii ii i
D) i ii iii iv
Ans) B
(3) In Relative Income Hypothesis consumption is related to :
A) Peak past consumptions
B) Median current consumption of peer group
C) Neither (A) or (B)
D) Both (A) and (B)
Ans) D
(4) Monetary expansion can still be effective in getting out of liquidity trap if it's combined with :
A) Restrictions on bank loans
B) Increased taxes
C) Contractionary fiscal policy
D) Expansionary fiscal policy
Ans) D
(5) If a linear consumption function passes through the origin it means :
A) APC > MPC
B) APC < MPC
C) APC = MPC
D) APC = MPC = 0
Ans) C
(6) According to Keynes the aggregate supply curve during depression :
A) Is horizontal
B) Is vertical
C) Tilts downward to the right
D) Tilts upward to the right
Ans) A
(7) Technical progress is said to be Hicks capital intensive if at constant capital labour ratio MRTSL,K :
A) Remains constant
B) Decreases
C) Increases
D) None of these are relevant
Ans) B
(8) 'Adverse selection' arises because of :
A) Lack of information
B) Wrong information
C) Asymmetrical information
D) Uncertainty of future
Ans) C
(9) Shadow prices can be called :
A) Imputed cost
B) Opportunity cost
C) Both (A) and (B)
D) Neither (A) and (B)
Ans) C
(10) Walras general equilibrium model uses a :
A) System of equations
B) System of simultaneou linear equations
C) System of simultaneous equations
D) System of linear equations
Ans) C
(11) Which of the following is an inferior good ?
A) Kerosine
B) Cooking gas
C) Electricity
D) Chemical fertilizers
Ans) A
(12) Pareto optimality in production is gained in which of the following conditions ?
A) MRTS(X)LK = MRTS(Y)LK
B) MRS(A)XY = MRS(B)XY
C) MRS(K)XY = MRT(L)XY
D) MPL/PL = MPK/PK
Ans) A
(13) Match List-I (consumer behaviour approach) with List-II (Economist with whom it is associated) and select the correct answer using the codes given below :
List-I
a) Cardinal approach b) Indifference curve
c) Revealed preference approach d) Neo-utility theory of risky choices
List-II
i) Von Newman Morgenstein ii) Alfred Marshall iii) J.K. Hicks iv) P.A. Samuelson
Codes :
a b c d
A) ii iii i iv
B) iii ii i iv
C) ii iii iv i
D) iii ii iv i
Ans) C
(14) 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
Ans) A
(15) Consider the following statements :
a) Points to the left of the IS curve indicate excess supply of goods.
b) Points to the right of the LM curve indicate excess demand for money.
c) Points to the right of the IS curve indicate excess supply of money.
d) Points to the right of the IS curve indicate excess supply of goods.
Of these statements :
A) (b) and (a) are correct
B) (a) and (c) are correct
C) (b) and (c) are correct
D) (c) and (d) are correct
Ans) A
(16) Human capital formation can be accelerated by :
A) Promoting skill development programmes.
B) Providing medical and health facilities in both rural and urban areas.
C) Strengthening hardware and software industry.
D) (A) and (B) above.
Ans) D
(17) What is the correct sequence for the evolution of society according to Karl Marx ?
a) Socialism b) Slavery c) Feudalism
d) Capitalism
Codes :
A) a), b), c) and d)
B) d), c), b) and a)
C) b), c), d) and a)
D) c), d), b), and a)
Ans) C
(18) Financial dualism theory was developed by :
A) B. Higgins
B) H. Myint
C) W.A. Lewis
D) R. Nurkse
Ans) B
(19) 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
Ans) B
(20) The concept of X-efficiency was formulated by :
A) H. Singer
B) H. Leibenstein
C) R. Rodan
D) C. Kindleberger
Ans) B
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