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Rajasthan Public Service Commission 2016
Paper EconomicsI
Ques: 150
Time: 3 Hours
Ques
What is meant by expansion in demand
Shift in demand curve
Shift in supply curve
Movement along the demand curve
Increase in income
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Ques
Who has given a new approach to the theory of demand in terms of Bandwagon Effect, Snob Effect and
Veblen Effect
P. H. Douglas
R. Triffin
J. T. Wenders
Harvey Leibentein
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Ques
The Snob Effect is related to which commodities
Prestigeous
Exclusive
Necessities
Both Prestigeous and Exclusive
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Ques
The situation, in which change in consumption of two commodities due to change in their relative prices, the
total utility remain the same, is called
Price Effect

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Income Effect
Substitution Effect
Veblen Effect
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Ques
In Slutsky's substitution effect, where does consumer move
To higher indifference curve
To lower indifference curve
To same indifference curve
No movement
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Ques
The cross elasticity of demand for complementary goods would be
Infinity
Positive
Zero
Negative
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Ques
The situation, in which people are unwilling to make bets, inspite of their higher winning prospects when they
bet more money, is called
Theory of Second Best
Pareto optimality
St. Petersburg Paradox
None of these
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Ques
Which one of the following is not associated with behavioural theory
Firms aim to achieve satisfactory level of profit
Search activity does not involve any cost
Each firm has an aspiration level
If aspiration level is unattainable, firm starts search activity
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Ques
Which one of the following is the formula of elasticity of factor substitution




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Ques :10
Following are the economies of scale Technical economies Labour economies Economies of
Concentration Managerial economies. Which of these are internal economies
1 2
3 4
2 3
2 4
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1 2
3 4
2 3
2 4
Ques :11
Pain, fatigue, sacrifice, monotony felt by the factors of production during rendering their services is called
Real cost
Opportunity cost
Implicit cost
Private cost
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Ques :12
Who has classified economies of scale into internal and external economies
Pigou
Keynes
Marshall
Pareto
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Ques :13
What is the value of elasticity of substitution between two factors for cobb Douglas
production function

1
0
1
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1
0
1
Ques :14
which one of the following statement is not correct for CES function
The CES function consist of four variables
The CES function is homogenous of degree one
The CES function can be extended to more than two inputs
The CES function covers constant, increasing and decreasing returns to scale

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Ques :15
Which one is incorrect for Nash equilibrium
There are more than two players.
Each player adopts his best strategy
No player has an incentive to depart from the equilibrium.
Each player plays independently
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Ques :16
How an increase in the fixed cost of a firm, under perfect competition, would affect price and output in the
short run?
Output rises, price falls
Output falls, price rises
Output and price both remain same
Output remains same, price rises
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Ques :17
When the monopolist is able to sell each separate unit of output at a different price, it is called the price
discrimination of
First degree
Second degree
Third degree
None of these
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Ques :18
When a very large or dominant firm establishes its leadership by following aggressive policies, it is called
.
Barometric price leadership
Aggressive price leadership
Demonstrative price leadership
Exploitative price leadership
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Ques :19
The marginal condition for a Pareto optimal composition of output requires that between any two
commodities be equal to the between the same two commodities.
MRTS, MRTS
MRS, MRPT
MRTS, MRST
MRTS, MRS
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MRTS, MRTS
MRS, MRPT
MRTS, MRST
MRTS, MRS
Ques :20
The final marginal condition for a welfare maximum is based on
Marginal product
Marginal rate of Technical Substitution
Optimum Conditions of product substitution
Optimum income
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Ques :21
Externalities are also known as
Spillovers
Neighbourhood effects
Untraded interdependency
All of these

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Ques :22
The theory of games was developed by
Bertrand and Morgenstern
Neumann and Morgenstern
Cournot and Neumann
Neumann alone
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Ques :23
Which of the following is the compensation criteria
The Kaldor Hicks
criterion
The scitovsky criterion
The little criterion
All of these
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Ques :24
While criticizing Social Welfare Function, Robertson called it
Vast, partly coloured Mathematical ballon
Right, not very useful
Completely general
Arbitrary and imaginary
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Ques :25

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New welfare economics is also known as
Walarasian criterion
The compensation criterion
Social welfare criterion
Marshallian criterion
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Ques :26
The theory of Second Best applies because all the Paretian optimality conditions are .
fulfilled
not fulfilled
hypothetical
against welfare
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Ques :27
Adding up
problem is associated with
Euler's Theorem
Arrow's Theorem
Cobb Douglas
Theorem
Coase Theorem
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Ques :28
By which method, monopoly power is measured
Elasticity of Demand
Cross Elasticity of Demand
Learner's Method
All of these
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Ques :29
What is bilateral monopoly
Single seller and two buyers
Single seller and single buyer
Two sellers and single buyer
Two sellers and two buyers
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Ques :30
NNP at factor cost is equal to




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Ques :31
Which one of the following is not the component of regrettable cost
Expenditure on police
Expenditure on judiciary
Expenditure on defence
Expenditure on entertainment
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Ques :32
Which one of the following account is not included in classified accounts of National Income accounting
Production account
Consumption account
Saving account
Foreign Transaction account

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Ques :33
National Income measurement is incomplete as it does not include
Transfer payments
Non marketable goods and services
Capital gains
All of these
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Ques :34
Which one is not associated with Keynes's Absolute Income Hypothesis
APC increases as income rises.
It is based on knowledge and human nature
Also called psychological law of consumption
MPC is greater than zero but less than one.
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Ques :35
Which is incorrect regarding Duesenberry's Relative Income Hypothesis
People imitate their rich neighbours
A rich person will have higher APC.
Consumer's preferences are interdependent.
Differences in relative incomes determine consumption expenditure.
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Ques :36
Which is not linked with Friedman's Permanent Income Hypothesis

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Transitory Income
Transitory Consumption
Relative Income
Permanent Income
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Ques :37
As per life time theory, the average income of an individual is at the beginning of his life .
Relatively Low
Relatively High
Absolutely Low
Absolutely High
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Ques :38
In classical theory of output and employment, the independence of real variables, from changes in money
supply and nominal variables, is called
Non Neutrality
of money
Says law of market
Classical dichotomy
None of these
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Ques :39
According to Friedman and Phelps, when natural rate of unemployment exists in the long run, the Philips
curve becomes
Kinked shape
Vertical straight line
Horizontal
Slopes downward from left to right
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Ques :40
The modified Philips curve is suggested by
Tobin
Boumol
Joseph Stiglitz
Oliver Blanchard
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Ques :41
Tobin assumes that expected value of capital gains or losses from holding interest bearing assets is always
Positive
Negative
Zero
Infinity
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Ques :42
Autonomous investment depends upon
Population growth
Technical progress
Both Population growth and Technical progress
None of these
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Ques :43

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The accelerator model is best applied in case of
inventory investment
business fixed investment
residential investment
capital market investment
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Ques :44
If the q ratio in Tobin's Theory is greater than one, it implies that
Stock market places higher value on firm's installed capital than replacement cost.
Stock market values firm's capital assets less than its replacement cost
High current profits earned from installed capital
High profits in future on installed capital
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Ques :45
High powered money can be written in equation form as
H Cp R
H Cp D


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H Cp R
H Cp D


Ques :46
Which is not included in money supply by Reserve Bank of India RBI
Currency with Public
All deposits of Commercial banks
Other deposits with RBI
Post office saving deposits
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Ques :47
Which is not associated with IS and LM curves
Productivity
Equity
Thrift
Liquidity preference
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Ques :48
" For every three percentage points growth in real GNP, unemployment rate declines by one percentage point
every year. " What is name of this law
Okun's Law
Hindu rate of growth
Lucas Model
Keynesian theory of employment
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Ques :49
Which type of timelag,
in monetary policy, is given by Friedman.
The Recognition lag
The administrative lag
The operation lag
All of these
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Ques :50
Which is true regarding effectiveness of monetary and fiscal policy In Keynesian range, fiscal policy is
very effective, In classical range, fiscal policy is not effective Monetary policy is totally ineffective in
Keynesian range. Which statement is true
Only A is correct
Only C is correct
C are correct

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A B are correct
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Ques :51
Which is not associated with Hicks' theory of business cycles
Explosive cycles
Constant rate of autonomous investment
Ceiling
Floor
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Ques :52
Kaldor has used which type of saving and investment function
Ex ante
Ex post
Arbitrary
Shadow
C are correct
A and B are correct
C and D are correct
B and C are correct
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C . D .... ..
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Ques :53



1



3

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1



3



1



3



1



3
Ques :54
What is inter temporal
substitution in Neo classical
macro economics
Substitution of labour for capital
substitution of consumer goods for capital goods
Substitution of current leisure for future leisure
Substitution of money for bonds
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Ques :55
Who envolved Real Business Cycle Theory
Cambridge School
American Neo Classical School
Mathematical School
Classical School
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Ques :56
According to Real Business Cycle theory, the primary cause of business cycle is
Changes in Technology
Real interest rate Neutrality of Money Inter temporal substitution of labour. Choose the correct
answer
Only A is correct
Only C is correct
D all are correct

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Only A and B are correct
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Ques :57
Which one of the following economists is not New Keynesian economist
Joseph Stiglitz
David Romer
Robert Gordon
Samuelson
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Ques :58
According to New Keynsian
macro economics, prices are sticky in short term, because
Adjusting prices is costly
Adjusting prices is not possible
This is hypothetical situation
Both, Adjusting prices is costly and Adjusting prices is not possible, are correct
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Ques :59
80 and 20
20 and 80
40 and 160
160 and 40

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80 .. 20
20 .. 80
40 .. 160
160 .. 40
Ques :60
The outcome of Green accounting method of GDP is
SEEA system of Environmental Economic Accounting
EDP Environmental Domestic Product
NNP Net Natural Product
NI Natural Income
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SEEA ........ .. ....... ....... ... ........
EDP .......... ..... ......
NNP .... ......... ......
NI ......... ..
Ques :61
Who propounded Rigid Money Wage and Flexible Price Model
J. M. Keynes
J. B. Say
Marshall
Friedman
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Ques :62
Which is not the subjective factors which prompts people to save some part of their income
Liquidity
Rate of Interest
Financial Prudence
Enterprise
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Ques :63
" The underdeveloped countries should not accept our inherited economy theory uncritically but remould it to
fit their own problems and interests. " Who said this
J. A. Schumpeter
Ragnar Nurkse
G. Myrdal
U. Hicks
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Ques :64
What is the theme of UNDP's Human Development Report 2015.
Work for Human development
Towards human progress
The Real wealth of Nations
Rise of South
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Ques :65
As per UNDP's Human Development Report, 2015 what is the rank of India in Gender Development Index

128
130
135
136
.... ...... ........ 2015 .. ...... ....... ...... ....... ... .... .. ... ... .. ..
128
130
135
136
Ques :66
Which is not included in the deprivation indicators of Human Povery Index I
HPI I

Deprivation measured by percentage of people not using improved water source
Adult literacy
Probability at birth of not surviving to age 60
Percentage of children under five who are under weight

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.... ......... ....... I
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Ques :67
Who has given the Human Capability Concept
Lucas
Amartya Sen
Samuelson
Kuznet
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Ques :68


1


3


1


2


1


3


1


2
Ques :69
" Meeting the needs of the present generation without compromissing the needs of future generation. " Who
has given this definition of sustainable development
Kreg Lindberg

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UNDP United Nations Development Programme
Brundtland Report
Chales D. Kolstand
" .... ..... ... .......... .. ...... ..... ..... ....... ..... ... .......... .. .... .... " .......
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Ques :70
The notion that natural capital stock should not decrease is called
Strong sustainability
Weak sustainability
Neutral sustainability
None of these
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Ques :71
What is the cause of trade off between growth and distribution in underdeveloped economies .
Structural changes
Co existence
of traditional modern sector
Uneducated and unskilled population
All of these
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Ques :72
Lewis model of development is not associated with
disguised unemployment in agriculture
existence of modern sector
limited Labour supply
subsistence agriculture
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Ques :73
If the third phase of Fei and Ranis model
Farm workers produce less than the institutional wages they get
Farm workers produce more than the institutional wages they get
Migration of workers from agriculture to industrial sector continues.
Agriculture sector becomes insignificant
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Ques :74
What does Harrod call to " highest attainable growth rate. "
Natural Rate of Growth
Golden rate of Growth
Incremental Rate of Growth
Feasible Rate of growth
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Ques :75
Domer's Income Effect of Investment may be expressed as




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Ques :76
Which one is the Golden Age Equilibrium of Harrod's model

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Gy Gs Gc
Gy GI Gs
Gy GK GI
Gy Gw Gn
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Gy Gs Gc
Gy GI Gs
Gy GK GI
Gy Gw Gn
Ques :77
Which one is exogenously determined factor in Solow's model
Labour stock
Technology
Capital stock
Population Growth rate
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Ques :78
In Kaldor's model, technical progress depends upon
Rate of capital accumulation
Rate of growth in income
Rate of growth of savings
Profits
....... .. ........ ... ....... ...... .... .. ....... .... ..
..... .... ... .. ..
.. ... ...... .. ..
..... ... ...... .. ..
..... ..
Ques :79
Which one is the steady growth rate equation of endogenous growth theory




...... ... .. ... .. ........ ...... ........ .. ... ...... .. ...... ..




Ques :80

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In Lucas model of growth, which is the major determinant of growth
Investment in human Capital
Investment in Capital
Investment in Infrastructure
Investment in Realestate
..... .. ...... .. ........ ... ...... .. ..... ......... ... .. ..
.... ..... ... ......
..... ... ......
....... ...... ... ......
........ ... ......
Ques :81
The scope of Learning by Doing model is more
When level of capital input is greater
When level of labour input is greater
When level of labour and capital are equal
None of these
.... ..... .. ........ .. ..... .. ..... ..
.. ..... ...
.. .... ..... ..
.. ... ...
.. .... ..... ..
.. ... . ..... .. .... .... ..
..... .. ... .....
Ques :82
In golden age path, all variables change at a
decreasing proportionate rate
increasing proportionate rate
fluctuating rate
constant proportionate rate
...... ... .. ... ... .... ... ......... .... ..
.... .... ........... .. ..
.... .... ........... .. ..
..... .. ..
..... ........... .. ..
Ques :83
Neutral Technical change means Capital Saving Labour Saving no Capital Saving No Labour
Saving Which is correct
C D are correct
A B are correct
Only C is correct
Only D is correct
..... ....... ......... .. ........ .. ..... ... ... ... ... ... ..... ... ... ..... ... ...
... ..... ... .. ... .... ..

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C . D .... ..
A . B .... ..
...... C .... ..
...... D .... ..
Ques :84
Disembodied technical progress means
more output with more inputs
more output with less inputs
more output with same inputs
more output with new technology
...... ....... ...... .. ........ ..
..... ....... ..... .....
..
..... ....... .. .....
..
..... ....... .... .....
..
..... ....... .. ..... ..
Ques :85
Which is not the principle of environment regulation
Polluter pays principle
Precautionary principle
Compulsory principle
User pays principle
... .. ........ ...... .. ........ ..... ..
...... ...... ...... ........
....... ........
......... ........
.......... ...... ...... ........
Ques :86
What is meant by Pigovian tax
Tax on wastage of resources
Tax on emission of pollutants
Tax on extra use of water
Tax on over consumption of resources
......... .. .. .... ........ ..
........ .. ...... .. ..
...... .... .... ...... .. ..... .. ..
.. .. .......... ..... .. ..
........ .. ..... ..... .. ..
Ques :87
Which one does not specify need for environmental valuation
Environmental Litigation

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Environmental conservation
Environmental Dispute Resolution
Evaluating proposed Environmental Programmes
...... ... .. ... .. .. ........ ......... ... ........ .. ......... ..... .... ..
.......... ..........
.......... ......
.......... ........ .. ........
.......... .......... ........ .. .........
Ques :88
Which one is not contingent valuation method
Trade off Game Method
Costless Choice Method
Delphi Method
Travel Cost Method
...... ... .. ... .. ......... ..... ......... ...... ..... ..
........ ... ......
.... ..... ... ......
....... ......
..... .... ......
Ques :89
Which school of thought talk about conservation and improvement in natural capital assets for sustainable
development.
London school of Thought
Daly's operational Principles
Hartwick Solow Rule
Safe Minimum Standards
.... .......... .. ........ ....... ...... .. .... ......... ..... ...... .. ...... . ..... .. .. .... ..
..... ..........
..... .. .......... .....
......... .... .....
........ ....... ....
Ques :90
Which model measures weak sustainability as a measure of sustainable development
The Index of Sustainable Economic Welfare (ISEW)
Pearce AtKinson
Measure
Environmental Space Measure
Ecological Footprints Measure
... .. ........ ..... ......... ... ... .. ....... ...... .. ..... ..
....... ....... ...... .. ....... (ISEW)
...... ... ........ ...
........ ..... ...


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............... ...... ...
Ques :91
Sustainable development process through formal informal
education programme aforestation, management
of parks is called
Removing subsidy
Market based approaches
Public partnership
Economic incentives
........ ......
.... ...... ........, ......., .... .. ....... ...... ... . ...... ........ .. ....
.... ..
...... .....
..... ....... .......
.......... .........
....... .........
Ques :92
Derived demand means
More demand because of increase in income.
More demand because of more wealth
Increase in demand for goods
Demand for factors of production
.......... .... .. .... ..
.. ... ...... .. .... ..... ....
..... ........ .. .... ..... ....
....... ... .... ... ......
....... .. ...... ... ....
Ques :93
Engel curve shows the quantities of a good which the consumer will purchase at various levels of
Prices
Saving
Income
Preferences
..... ... ....... .. ........ ...... ... ... .. ..... ... ....... ..
....... .. ......... ...... ..
... .. ......... ...... ..
.. .. ......... ...... ..
......... .. ......... ...... ..
Ques :94
In case of Giffen goods
The positive income effect is stronger than negative substitution effect
The negative income effect is stronger than positive substitution effect
The positive income effect is stronger than positive substitution effect

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The positive income effect is equal to negative substitution effect
....... ....... .. ....
....... .......... ..... .. ....... .. ..... .......... .... ..
....... .......... ..... .. ....... .. ..... .......... .... ..
....... .......... .. ....... .. ..... .......... .... ..
....... .. ..... ....... ............... ..... .. ..... .... ..
Ques :95
In Slutsky's substitution effect, income is reduced or increased by
Cost difference
Compensating Variation
Equivalent Variation
Compensating difference
.......... .......... ..... ... .. ... ... .. ...... .. .... ..
.... .....
......... .........
.... .........
......... .....
Ques :96
The Band wagon effect makes the market demand curve for the commodity
Flatter or more elastic
Steeper or less elastic
Perfectly elastic
Perfectly inelastic
.... .... ..... ..... .. ..... .... ... .. ..... ..
.... .. ..... ......
.... .. .. ......
........ ......
........ ........
Ques :97
Markowitz Hypothesis relates the marginal utility of income to changes in the level of
Absolute income
Present income
Relative Income
Past income
......... ........ .. ... ...... ......... .. ...... .... ..:
........ .. .. ........... .. .... ..
....... .. .. ........... .. .... ..
...... .. .. ........... .. .... ..
......... .. .. ........... .. .... ..
Ques :98

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The firm's short run supply curve of a commodity in perfect competition is
Rising portion of firm's MC curve below AVC curve
Rising portion of firm's MC curve above AVC curve
Rising portion of Average total cost curve
Rising portion of Average variable cost curve
..... ............ ... .... .. ..... ..... .. .... .......... ....... ... .... ..
MC ... .. ... .... ....... .. AVC ... .. .... ..... ..
MC ... .. ... .... ....... .. AVC ... .. ... ..... ..
... ... .... ... .. ... .... .......
... ............ .... ... .. ... .... .......
Ques :99
The combined consumer's and producer's surplus is at a maximum in which of the following market situation
Perfect competition
Monopoly
Monopolistic competition
Oligopoly
....... ........ ... ....... ... ... ............. ... .. ..... ..... ...... ... ....... .... ..
..... ............
.........
.............. ............
...........
Ques :100
Empirical studies made by economists find the shape of long run average cost curve due to technological
progress that takes over time to be
Rising upward
U shaped
L shaped
Saucer type shape
.............. ...... ..... ... ......... ...... ..... .. ... ... ... .. ... .... ..... ....... ......
.. ... ............ ... .... ... .. .... ....
... .... ...
U ......
..
L ......
..
....... ...... ..
Ques :101
In a game theory, a situation in which one firm can gain only what another firm looses is called a
Cooperative
non constant sum
game
Non cooperative
non constant sum
game
Prisioner's dilemma
Zero sum game
... ........ ... .. ... .. .. .... .. ... .... ... .. ...... .... .. .... ... ..... .... .., ... .... ..
...... ........ ..
... ...


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....... ........ ..
... ...
..... ... .......
..... ..... ...
Ques :102
Which of the following are parts of every game theory model A. Strategies B. Players C. Constraints D. Pay
offs Select the correct answer using the codes given below
B and C
C and D
B and D
C only
............. ... .. ... .. ... ........ .. ....... .. A. ..... .... B. ....... C. ......... D. ...... .... .....
.. ... .... ..... ... ... .. ..... .... ... ......
B .. C
C .. D
B .. D
.... C
Ques :103
Bliss point is where
The utility frontier curve is tangent to the welfare curve
Indifference curve is tangent to price line
Isoquant curve is tangent to isocost line
Tangency of various indifference curve of two individuals
....... ...... .. ....
......... .... ... ...... ... .. ...... .... ..
....... ... ..... .... .. ...... .... ..
......... ... .... .... .. ...... .... ..
.. .......... .. ......... ....... ..... ... ........
Ques :104
Main obstacles to attaining Pareto optimality
and maximum social welfare is
Existence of imperfect competition
Presence of externalities
Consumption of public goods
All of these
...... ........ ... ....... ....... ...... ..... .... ... ..... .... ..
...... ............ .. .... ....
......... .. ....
.......... ...... .. .....
..... .. ...
Ques :105

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A ii,
B
C iv,
D iii
A
B ii,
C iii,
D iv
A iii,
B ii,
C
D iv
A iv,
B
C iii,
D ii
A ii,
B
C iv,
D iii
A
B ii,
C iii,
D iv
A iii,
B ii,
C
D iv
A iv,
B
C iii,
D ii
Ques :106
The incorrect statement of High Powered Money is
High Powered money is basis of expansion of bank deposit and money supply
It is composed of currency held by public and commercial bank reserves
The demand for high powered money is related inversly to money supply
An increase in supply of high powered money leads to decrease in money supply
........... ..... .. ..... ... ... ..
........... ..... .... ..... .. ........ .. ..... .....
.. .. ........ .. .... ..
.. .... .. ... ....... .. ......... .... .. ... ............ .. ... ... ......... ..
........... ..... ... .... .. ..... ....... .. ........ ....... ..
........... ..... ... ....... ... ...... ..... ... ....... ... ... .... ..
Ques :107
The money multiplier shows the relationship between
Currency with Public and reserves with Banks
Excess reserves and total reserves
High powered money and money supply
Required reserves and total reserves
..... ...... ....... ..
.... .. ... ....... .. ...... .. ... ....... .. ... .......
.......... ....... .. ... ....... .. ... .......
.... ..... ..... .. ..... ....... .. ... .......
...... ....... .. ... ....... .. ... .......
Ques :108

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Assertion High Powered money is currency held by public and the commercial bank reserves. Reason
If demand of High powered money remains constant, an increase in its supply sets multiplier into operation
and causes resultant increase in supply of money
Both A and R are individually true and R is correct explanation of A
Both A and R are individually true and R is not correct explanation of A
A is true but R is false
A is false but R is true
... ........... ..... .... .. ... ....... .. ......... ...... .. ... ....... .. .... ....
........... ..... ... .... ..... ..., ..... ....... ... ...... .... .. ......... .... .. .. ............. ..... ...
....... ... ...... .... ..
A ... R ......... ..... .... .. .. .. .... ........... ..
A ... R ......... ..... .... .. .. .. .... ........... ..... ..
A .... .. ...... R ... ..
A ... .. ...... R .... ..
Ques :109
A ii,
B
C iv,
D iii
A
B ii,
C iii,
D iv
A ii,
B iii,
C
D iv
A iv,
B iii,
C ii,
D i
A ii,
B
C iv,
D iii
A
B ii,
C iii,
D iv
A ii,
B iii,
C
D iv
A iv,
B iii,
C ii,
D i
Ques :110
In simple classical model on the assumption of flexible money wage the aggregate supply curve at full
employment level of income is
Perfectly inelastic
Perfectly elastic
Relatively elastic
Relatively inelastic
... .......... .... ... .. ... ........ ..... ....... ... ....... .. ....... .., ..... ...... .. .. .... ..
... ....... ... .... ..
........ ........
........ ......

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......... ......
......... ........
Ques :111
The two important assumption on which Pigou effect is based are
Flexible wages and Price level
Price expectations are considered
Stable stock of money
It is a dynamic analysis
.... ..... .... .. .......... ......... .. ....... ..
...... ....... ... ..... ....
..... .......... .. ..... ... ... ..
..... .. ..... .....
.. .. ........... ......... ..
Ques :112
Cycle less path
Constant amplitude cycle
Explosive cycle or antidamped
Cycle less explosive upward path
....... ..
..... ........ .... ...
............. ... .... ..... .
.........
....... ............. ... .... ..
Ques :113
According to Dussenberry as the income decreases, the consumption does not decrease with same rate is
reffered as
Ratchet Effect
Veblen Effect
Demonstration Effect
Snob Effect
........ .. ...... .. .. .... .., ..... .... .. .. ..... ...., ... .... ..
.... .....
...... .....
....... .....
.... .....
Ques :114
Assertion When national income increases then economic welfare also increases. Reason Economic
welfare not only depends on quantity of income but also depends on the way income is earned and the way it is

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spend.
Both A and R are individually true and R is correct explanation of A
Both A and R are individually true and R is not correct explanation of A
A is true but R is false
A is false but R is true
... .. ........ .. .... .. .. ....... ...... ... ...... .... ..| .... ....... ...... ....
.. ... ..... .. ....... ..... .... ..... .. .. ...... .... .. .... .... .... .. ..... .. .. ....... ....
..
A ... R ......... ..... .... .. .. .. .... ........... ..
A ... R ......... ..... .... .. .. .. .... ........... ..... ..
A .... .. ...... R ... ..
A ... .. ...... R .... ..
Ques :115
The indicators to construct Physical Quality of life Index by D Morris are A. Life expectancy indicator B.
Infant Martality indicator C. Basic Literacy indicator D. Standard of living indicator. Select the correct
answer by using the codes given belows Codes:
B and C
C and D
B and D
B and D
... ...... ...... .... .. ...... ........ ....... .. ........ .... ...... .. A. .... ......... ......
B. ..... ........ ...... C....... ...... D..... .... ...... .... ..... .. ... .... ..... ... ... ..
..... .... ... ......
B .. C
C .. D
B .. D
B .. D
Ques :116
To avoid value judgements, the economist and UN organisation use which of the following measure of
economic development
Life expectancy at birth
Calorie supply per head
GNP per capita
Literacy signifying primary school enrolment as percent of population
..... ......... .. .... .. .... ........... ... ... ... .. ..... ............. ... .. ....... ...... .. ... ..
... .. ..... .... ..
.... .. ... .... ... ........ ..
..... ....... ....... ........ ..
..... ....... ... ........ ...... ..
........ ...... ........... ... ........ .. ....... .. ...... ........ ...... ....... ... ..
Ques :117
Inverted U shaped Hypothesis of income distribution given by Prof. Kuznets states that in early stages of
economic growth

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relative income inequality decreases, stabilises for time and then increases in later stages
relative income inequality increases, stabilises for time and then decline in later stages
relative income inequality decreases and then stabilises
relative income inequality increases and then decreases in later stage
........ .. ..... U ...... ... .......... .. .. ...... ... ..... .. ... ....... ...... .. ......... ...
...
...... .. ....... .... .., ... ... .. .... ..... .... .. .. .... ... ... ...... ... .... ..
...... .. ....... .... .., ... ... .. .... ..... .... .. .. .... ... ... ...... ... .... ..
...... .. ....... .... .. .. .... ..... .. .... ..
...... .. ....... .... .. .. .... ... ... ...... ... .... ..
Ques :118
If the value of Ginni Coefficient is one then there is
Complete inequality of income
Complete equality of income
Greater inequality of income
Greater equality of income
.... ....... ...... .. ..... .. .... .. .. .... ..
.. ... ..... .......
.. ... ..... ......
.. ... ..... .......
.. ... ..... ......
Ques :119
A graphical representation showing the degree of inequality of income is called as
Laffer Curve
Learning Curve
Lorenz Curve
Engel Curve
.. .... ...... .. .. ... ....... ... ..... .. ....... .., ... .... ..
.... ...
....... ...
...... ...
..... ...
Ques :120
The numerical value of relation between an increase in income and resulting increase in investment is called as

Ginni coefficient
Multiplier
GDP deflator
Accelerator
.. ... ...... .. ............. ......... ... ...... .. ... .. ....... .. .......... ..... .. ... .... ..
....... ......
....

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......... ...........
.....
Ques :121
The incorrect assumption of Fei and Ranis theory of economic development is
Land is fixed in supply
Population growth is taken as exogenous phenomenon
Workers in either sector consume only agricultural products
Agriculture activity is characterised by increasing returns to scale
... ... ...... .. ....... ...... .. ........ ... ... ....... ..
..... ... ....... ..... ..
........ ...... .. .. ......... .... .. ... ... .... ... ..
..... ....... ... ...... .... ..... ....... .. ..... .... ..
..... ..... ... ...... .. .... ....... ... .... ..
Ques :122
Green Finance mostly refers to financial investments flowing towards
Agricultural development projects
Industrial development projects
Dairy development projects
Sustainable development projects
..... ...... .........: ...... .... .. .. ........ ........... .. .. ........ .... ..
..... ...... ....... ...
......... ...... ....... ...
...... ...... ....... ...
..... ...... ....... ...
Ques :123
In Joan Robinson's model of capital accumulation " a golden age " is characterized by which of the following
features A. Technical Progress is neutral B. Population grows at steady rate C. The rate of profit tends to be
variable D. Level of real wages rises with output per MAN. Select the correct answer using the codes given
below
B and C
C and D
B and D
Only C
... ......... .. ..... ....
.. ........ ... " ...... ... " ... .......... ............. ... .. ..... .. A.
....... ...... ..... .. B. ........ ..... ...... .. .. .... .. C. ..... ... .. ............ .... .. D.
............ ....... .. ... ......... ....... .. .... .... .. .... ..... .. ... .... ..... ... ... ..
..... .... ... ......
B .. C
C .. D
B .. D
.... C
Ques :124

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Solow builds a model of long run growth on the basis of which of the following assumptions A. Labour and
Capital are subsitutable for each other B. There is neutral technical progress C. Prices and wages are rigid D.
Production function is homoqenous of the first degree Select the correct answer using the codes given below
B and D
C and D
C and D
Only D
.... .. ............. ... .. ..... ......... .. ............ ...... .... .. ........ ..... ..: A. ... ... .....
.. ...... .......... ..... .. .... .. B. ....... ...... ..... .. C. ....... ... ....... .. .. D. .......
... .... ..... .. ..... .... .. .... ..... .. ... .... ..... ... ... .. ..... .... ... ......
B .. D
C .. D
C .. D
.... D
Ques :125
Kaldor postulates three functions for the operation of model of growth in constant working population they
are A. Consumption function B. Technical progress function C. Saving function D. Investment function Select
the correct answer using the codes given below
B and C
C and D
C and D
A and B
....... ... .... ... ......... ..... .. .. ... ...... .... .. ..... ........ ........ .. ........... ....
...... .. A. ..... ... B. ....... ...... ... C. ... ... D. ......... ... .... ..... ..
... .... ..... ... ... .. ..... .... ... ......
B .. C
C .. D
C .. D
A .. B
Ques :126
According to Hicks, a techincal change is neutral if
The ratio of saving and investment remains unchanged at constant marginal propensity to save
The ratio of marginal product of capital to that of labour remains unchanged at a constant capital labour ratio
The ratio of input to output remains constant
The productivity of capital is equal to productivity of labour
...... .. ...... .. ....... ......... ..... .. .... .. ..
..... ....... ... ....... .. ... .. ......... .. ...... ............ .... ..
.. ..... ..... ... ...... .. ... .. ... ..... .. ....... ....... .. ...... ............ .... ..
... ....
... ...... ..... .... ..
..... ......... ... ... ......... .. ..... ..
Ques :127
Which is incorrect statement of implications of Harrod neutrality is

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It is applicable to dynamic situation
It is based on relationship between capital and output with no direct reference to labour
The share of capital and labour in national output are variable if the capital output ratio and rate of profit are
constant
Constant capital output ratio implies that capital stock and labour force grow at same rate
..... ... ....... .. .... ... ..... ... ... ..
.. ......... ....... .. .... .... ..
.. ......: ..... .. ....... .. ....... .. ....... .., ... .. .... ....... ..... ..
........ ...... ... ..... .. ... ..... .. ....... ............ .., .... ... ... .. ... ..... .
..... ......
..... ...
..... ..... ....... ...... ... ....... .. .. ... ..... ..... ... ... ..... ... .. ... .. .. ...... .... ..
Ques :128
The concept of Golden Rule of accumulation was given by
Kendrick
Denison
Edmund Phelps
Jorgenson
.... .. ...... ..... ... ....... ...... ...... ... ..
.......
.......
..... ......
........
Ques :129
The endogenous growth models emphasise that the technical progress result from A. Rate of investment B.
Size of the capital stock C. Stock of human capital D. Rate of consumption Select the correct answer using the
codes given below
B and D
B and C
C and D
C and D
......... ...... .... .. .... .. ... ....... ....... .... .. ............. A. ......... ... .. .. B. .....
..... .. .... .. C. ...... ..... .. ..... .. D. ..... ... .. .. .... ..... .. ... .... .... ... ... ..
..... .... ... ...... ...
B .. D
B .. C
C .. D
C .. D
Ques :130
According to Lucas the factor which plays a crucial determinant in growth process is
Investment in education
Investment in infrastructure
Investment in new machines
Investment in agriculture

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..... .. ...... ......... ......... ... .. ...... ........ ... ......... ....... ... .... .., .. ..
...... ... .........
.... ...... ... .........
.. ...... ... .........
..... ... .........
Ques :131
Travel Cost method TCM is mainly applied for determening the
Economic values of sites that are used for recreations
Economic values of sites that are used for minning
Economic values of land used for agriculture
Economic values of sites used for industries establishment
....... .... ...... .. ......: ..... ..... .... .., ......... ....
....... .. .... ... ..... .. ..... ... .., .... ....... .....
... .. .... ... ..... .. ..... ... .. .... ....... .....
..... .. .... ... ..... .. ..... ... .. .... ....... .....
......... ....... .. .... ... ..... .. ..... ... .. .... ....... .....
Ques :132
The first economist to introduce the concept of learning by doing was
Kenneth J. Arrow
Joan Robinson
Paul M. Romer
Robert E. Lucas
.... ........... ..... .... .. ..... ....... .. ....... ..... ..
..... ... ...
... .........
... ... ....
...... .. .....
Ques :133
Learning Curve shows
Decline in average input cost of production with rising cumulative total output of firm over time
Decline in total input cost of production with declining total output of firm over time
Decline in marginal input cost of production with rise in total output of firm over time
Increase in average input cost of production with rising cumulative total output of firm over time
........ ... ....... ..
... ........ ....... ... ... ... .... ... ..., .... .. .... ..... ... ....... .. ...
... ........ .... .. ... ... .... ... ..., ... ....... ... ... .. ...
... ........ .... .. ....... ... .... ... ..., ... ....... ... ...... .. ...
... ........ ... ... .... ... ......, .... .. .... ..... ... ....... .. ...
Ques :134

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Limit Pricing refers to
Setting of price equal to average variable cost
Existing firms charging a sufficiently low price to discourage entry of other firms into the industry
Setting of price equal to average fixed cost
Existing firms charging a sufficiently high price to discourage entry of other firms into the industry
.... ..... .... ..
... ............ .... .. ..... ..... .. .........
........ ... ....... .. ....... ..... .... .. ..... ...... ... .... ... .. ..... ............. ..
... ..... .... .. ..... ..... .. .........
........ ... ....... .... ....... ..... .... .. ..... ...... ... .... ... .. ..... ............. ..
Ques :135
Dominant strategy is
The optimal choice of a player no matter what the opponent does.
The optimal choice of a player considering what the opponent does
All the firms follow the price determined by barometric firm
Price leadership by a dominant firm
............ ......... ..
....... ...... ...... ....., ............ ... .. ... ........ ..... ....
....... ...... ...... ....., ............ .... ..... .... ..... ... .... ..
... ... ........... .... ...... ........... ..... .. ...... .... ..
..... ....... ..... .... ......
Ques :136
Tit for Tat strategy is best for the
Zero sum game
Non zero sum game
Repeated games
Sequential game
.... .. .... ... ......... ..... ..
.......
... ... .. ....
..........
... ... .. ....
........ ... .. ....
......... ... .. ....
Ques :137
The first and simplest general equilibrium model was introduced in 1874 by the economist
Vilfredo Pareto
N. Koldor
Leon Walras
K. J Arrow
.... .. ... ....... ....... .... 1874 ... .... ........... ...... ....... ..... ...
.......... ......
... .......
...... .....


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... ... ...
Ques :138
The GDP deflator is calculated as follows
Nominal GDP Real GDP X 100
Real GDP Nominal GDP X 100
Nominal GDP Real GDP
Real GDP Nominal GDP
......... ........... .. ....... ...... ..... .. ..... .... ..
....... ......... ......... ......... X 100
......... ......... ....... ......... X 100
....... ......... ......... .........
......... ......... ....... .........
Ques :139
The statistical methods used to avoid double counting in calculation of national income are A. Value added
method B. Aggregate method C. Transaction Method D. Final Product method Select the correct answer using
the codes given below
A and B
B and C
A and D
C and D
........ .. .. ....... ... ...... .... .. .... .. .... ... .. ........... ......... .. ..... ..... .... ..
A. ..... ... ...... B. ... ...... C. ... ... ...... D. ...... ...... ...... .... ..... .. ... .... .... ...
... .. ..... .... ... ...... ...
A .. B
B .. C
A .. D
C .. D
Ques :140
In order to derive Personal income from national income, we have to deduct which of the following amounts
A. Corporate Income Tax B. Transfer Payment C. Undistributed corporate Profit D. Social Security
Contribution Select the correct answer using the codes given below
B and D
C and D
C and D
B and D
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..... .. .. B. ...... ...... C. ......... ..... ... D. ....... ...... ...... .... ..... ..
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B .. D
C .. D
C .. D
B .. D

28/06/2016 College Lecturer Exam EconomicsI
42/44
Ques :141
The short run factors which affects the marginal efficiency of capital in a private enterprise economy are
Agriculture development
State of business confidence
Rate of Growth of pupolation
Industrial Development
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Ques :142
W. J. Baumol Theory of the demand for money states that the relationship between transaction demand for
cash and rate of interest is
Direct proportional
Linear
Direct
Inverse
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