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1. An example of double counting in national income terms would be the adding of

Electricity outputs and gas outputs Iron ore output and iron output


Wages of bus and train drivers The value at each stage of production


2. Gross National Product equals

Net National Product adjusted for inflation


Gross Domestic Product adjusted for inflation


Gross Domestic Product plus net factor income from abroad


Net National Product plus net factor income from abroad


3. To adjust GDP from market prices to factor cost

Add indirect taxes


Subtract subsidies


Deduct indirect taxes and subsidies


Deduct indirect taxes and add subsidies


4. In using the expenditure approach to calculate the Gross National Product of an economy, imports should be deducted because

Some imports are substitutes of domestic products


Some imports are intermediate goods


Imports will lead to payments to foreign countries


Imports are the expenditure on goods and services produced by foreign countries


5. Transfer payments are not included in national income because

they are included in the gross national income but not the net national income


they are already included in the incomes of households


they are not returns for the production of goods and services


they are not taxed by the government


6. Purchases of inventories by

firms are not counted in investment spending


firms are also counted in investment spending


households are also counted in investment spending


households and firms are also counted in investment spending


7. Goods and services are valued at market prices when calculating GDP. Since some "outputs" of government are not sold, they have no market prices. In the actual calculation of GDP

they are valued at zero


they are valued at the cost of producing them


their value is estimated from a survey of recipients of these services


their value is estimated from the market prices of similar market-provided services


8. If Mr. X spends Rs. 6000 to buy a new refrigerator, Rs. 4000 on getting his house white-washed and Rs. 3000 on buying new shares, the immediate effect on national product is that it increases by

Rs. 13,000 Rs. 10,000


Rs. 9,000 Rs. 600


9. Which of the following is a transfer payment

Payment made to housewife Pocket allowance to children


Maintenance allowance to old parents All of the above


10. The difference between GNP and GDP is equal to

Gross Domestic Investment Net Foreign Investment


Net Imports Net Factor Income from Abroad


11. Which of the following is the best definition of opportunity costs

The amount of one good that must be given up in order to produce one more unit of another good


The amount of money that must be paid in order to purchase one more unit of a good


The amount of an input that must be used in order to produce one more unit of a good


The price of a good that must be charged in order for a merchant to sell one more unit


12. Which one of the following is not true

If AC is a horizontal straight line, MC will coincide with it


If AC rises, MC will rise at a greater rate


If AC falls, MC will also fall at a higher rate


If AC rises, MC will rise at the same rate


13. The higher the value of the cross elasticity the stronger will be the degree of

complementarity substitutability


both and independence


14. Break even point for a firm occurs where its

total revenue total cost total revenue total cost


total revenue total cost none of the above


15. Which one of the following gives the measures of price elasticity of demand

Ratio of change in demand to change in prices


Ratio of change in price to change in demand


Ratio of percentage change in demand to percentage change in price


None of the above


16. Which of the following is "not" illustrated by a production possibility boundary

Scarcity Opportunity cost


Necessity for choice Allocative efficiency


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17. Concept of diminishing marginal rate of substitution is associated with

A. Marshall J.R. Hicks


E.E. Slutsky J.M. Keynes


18. MRS decreases along an indifference curve because

MU decreases when stocks of a good increase


Two goods are not perfect substitute


Consumer's capacity and willingness to sacrifice a good with the decrease in the stock of a good


None of the above


19. An increasing cost industry's long run supply curve has a

Positive Slope Negative slope


Zero Slope None of the above


20. Oligopoly is a market situation where

there are few firms producing close substitutes


there are few firms producing entirely different goods


there are few firms producing complementary goods


there are two or more monopolistic firms


21. Suppose that good A is plotted on the horizontal axis. If the price of A doubles and the price of B triples, leaving the consumer's income unchanged, the budget line

will become steeper will become flatter


will shift in toward the origin will shift out from the origin


22. Identify the statement that is false

An increase in the amount of income changes the intercepts of the budget line but not the slope


An increase in the price of good x changes both the x-intercept and the slope of the budget line


An increase in the price of good x and an equal percentage increase in the price of good y changes the x-intercept, the y-intercept, and the slope of the budget line


An increase in the price of good x and an increase in the price of good y may or may not change the slope of the budget line


23. On a typical optimal choice diagram, with budget lines and indifference curves, the line that connects the consumer's optimal baskets as the price of one good changes holding income and the price of the other good constant is called the

Income-consumption curve Demand curve


Price-consumption curve Engel curve


24. Suppose when the consumer's income rises by the consumer's consumption of good x only increases 10%. We can infer that good x is

normal good inferior good


giffen good marginal good


25. Identify the truthfulness of the following statements. Because the production function identifies the maximum amount of output that can be produced from a given combination of inputs, only technically efficient input combinations are found on the production function.
II The production function identifies the technically feasible combinations of inputs.

Both I and II are true Both I and II are false


I is true; II is false I is false; II is true


26. Increasing marginal returns occur when the total product function is

decreasing increasing at a decreasing rate


increasing at a constant rate Increasing at an increasing rate


27. External economies or diseconomies are outside the control of the firm and

Will not affect the cost of the firm Will affect the cost of the firm


Will increase output None of the above


28. Suppose at the firm's current long-run combination of capital and labor that MPK 15; MPL 10; r and w 3. The firm

is currently minimizing total cost in the long run


could lower cost by increasing the usage of capital and decreasing the usage of Labor


could lower cost by increasing the usage of labor and decreasing the usage of capital


cannot lower cost without also lowering the level of output


29. Monopolistic competition has features of

Monopoly but not competition


Monopoly and competition with features of monopoly pre-dominating


Monopoly and competition, with features of competition pre-dominating


None of the above


30. Total product is at its maximum when

MP is maximum MP>AP


MP= 0 APismaximum


31. Suppose at the current level of output, p MC. The firm

is currently maximizing its profit


could increase profit by lowering the level of output


could increase profit by increasing the level of output


cannot increase profit without raising price


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32. Under conditions of monopoly

AR curve lies below the MR curve AR curve is equal to MR curve


AR curve is not related to MR curve AR curve lies above the MR curve


33. Which of the following is not a characteristic of Perfect Competition

Large number of buyers and sellers


Perfect knowledge on the part of buyers and sellers


Homogenous product


Product differentiation


34. Identify the truthfulness of the following statements
I. A monopolist faces a downward-sloping demand curve, whereas a perfectly competitive firm faces a horizontal demand curve
II. A monopolist maximizes profit, whereas a perfectly competitive firm cannot

Both I and II are true Both I and II are false


I is true; II is false I is false; II is true


35. Which of the following is NOT necessary for a firm to be able to engage in price discrimination

A firm must have some market power


A firm must have some information about its consumers' willingness to pay


A firm must be able to prevent arbitrage


A firm must be a price-taker


36. In the classical monetary theory, the elasticity of demand for money is

unity zero


less than zero infinity


37. The value of money varies

directly with the interest rate


directly with the price level


inversely with the price level


directly with the volume of employment


38. A horizontal speculative demand for money function indicates that there is

no speculative demand for money


a small but limited speculative demand for money


an unlimited speculative demand for money


an unlimited demand for bonds


39. Maintaining a cash reserve ratio of 20% with primary deposits of Rs. 1000, the total derivative deposits created by banks would be

Rs. 5,000 Rs. 1,000


Rs. 4,000 Rs. 4,500


40. The theory that transaction demand for money also depends on the rate of interest was put forward by

Keynes Baumol


Pigou Wicksell


41. According to Reserve Bank of India, M3=

currency demand and time deposits with banks


currency time deposits with banks time deposits with post offices


currency demand deposits with banks Saving deposits with post offices


currency demand and saving deposits with banks


42. The most liquid asset, next to cash, which the banks possess, is

treasury bills money at call


foreign bills cash credit


43. According to Keynes, investors prefer holding money rather than bonds when they expect

interest rates to remain constant interest rates to rise


interest rates to fall bond prices to rise


44. Which one of the following is not a liability of a commercial bank

Time deposits Security holdings


Borrowings from the central bank Deposits of other banks with it


45. Which one of the following statements describes correctly the nature of Fisher's and Cambridge equation

Fisher's equation is behavioural while Cambridge equation is mechanical


Fisher's equation is mechanical while Cambridge equation is behavioural


Both equations are behavioural


Both equations are mechanical


46. If a nation gains from international trade, its consumption point is

on its production possibilities frontier


inside its production possibilities frontier


above its production possibilities frontier


inside or on its production possibilities frontier


47. A country's terms of trade are generally determined by

international trading agreements


the value of gold reserves held at its central bank


supply and demand in the world's markets


its rate of capital formation


48. Assertion Marshall-Lerner condition should be fulfilled if devaluation is to be successful. Reason Devaluation makes exports costly and imports cheaper.

Both and are true and is the correct explanation of


Both and are true but is not a correct explanation of


is true but is false


is false but is true


49. Theory of Mercantilism propagates

Encourage exports and imports


Encourage exports and discourage imports


Discourage exports and imports


Discourage exports and encourage imports


50. A demand switching policy could be

higher interest rates higher income tax


tariffs reduced government spending


51. If there is a balance of payments deficit then in a floating exchange rate system

the external value of the currency would tend to fall


the external value of the currency would tend to rise


the injections from trade are greater than the withdrawals


aggregate demand is increasing


52. Adam Smith in his theory of trade has demonstrated that

in international trade one country can gain at the cost of another


all countries can gain from trade


free trade is not good for developing countries


mercantilist ideas would lead to maximisation of world welfare


53. Comparative cost advantage theory of trade is based on the assumption of

constant return to scale increasing return to scale


decreasing return to scale constant and decreasing return to scale


54. An important criticism against comparative cost advantage theory of trade is that

it is theoretically inconsistent


it is colonial in nature


it would not lead to efficient allocation of world resources


it is not based on relative differences in labour costs


55. The gains from trade would be equally divided between two nations if

the terms of trade lies exactly between their domestic cost ratios


the terms of trade lies between their domestic cost ratios


the terms of trade is different from their domestic cost ratios


terms of trade is determined by their domestic cost ratios


56. Classical theory of trade

explains actual pattern of trade


strongly demonstrates gains from trade


highlights the importance of transport cost in trade


explains the determination of terms of trade


57. Which one of the following is not part of capital account of the balance of payments of a country

Foreign direct investment


Portfolio investment


Interest received from foreign countries


AWorld Bank loan for building infrastucture


58. Which one of the following is non-debt flow of capital between countries

Commercial borrowing Portfolio investment


Short-term borrowing from IMF Untied loans


59. Which one of the following is not an example of unilateral receipts/payments

Grants Gifts


Royalties Pensions


60. Free trade is based on the principle of

comparative advantage comparative scale


economies of advantage production possibility advantage


61. Accommodating transactions are also known as

below the line transactions above the line transactions


voluntary transactions on the line transactions


62. Other things being same, an increase in marginal propensity to import

will reduce the size of foreign trade multiplier


will increase the size of foreign trade multiplier


may or may not affect the size of foreign trade multiplier


none of the above


63. The book "Asian Drama" is authored by

G. Myrdal R. Nurkse


S. Kuznet M. Dobb


64. Consider the following assumptions
1.
Perfect competition


2.
Perfect mobility of factors between countries


3.
Constant returns to scale


4.
No transport cost
Which of the above assumptions are associated with Ricardo's theory of trade




2 and 4 3 and 4



2 and 3 3 and 4



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65. For the Heckscher-Ohlin theory of trade to be valid, the relative factor endowments of two countries should be

close to each other as divergent as possible


identical closely related


66. Economic development is best measured by

growth of GDP


growth of per capita income


growth with structural changes in economy


growth with trickle down benefit in favour of poor


67. The annual growth rate in an economy indicates growth of GDP at

current prices constant prices


factor cost market prices


68. "Development is a discontinuous and spontaneous change in the stationary state which displaces the equilibrium state previously existing." The above statement is associated with

Adam Smith J.S. Mill


Simon Kuznets J. Schumpeter


69. Trickle-down strategy implies

higher rate of GNP with social justice


reducing income of rich classes for higher public savings


tax concessions for commodities of mass consumption


efficient water management for irrigation


70. Which one of the following is NOT considered for preparing Human Development Index

Educational attainment Health facilities


Enrolment ratios Adjusted per capita income


71. Consider source of the facts about Physical Quality of Life Index
1.
It was prepared by F. Stewart

2.
It was a comparison of 23 developing countries

3.
The index was based on some social parameters

4.
It took into account per capita income
Of the above




2 and 3 are correct


3 and 4 are correct


only 2 and 3 are correct


only 3 and 4 are correct


72. Closed economy means an economy having

controlled supply of money exports only


imports only noexports or imports


73. Which one of the following is NOT a criterion of underdevelopment

Low capital-labour ratio Unexploited natural resources


Density of population Ratio of industrial output to total output


74. The concept of balanced growth is associated with

R. Nurkse Hirschman


H.W. Singer J. Schumpeter


75. Innovation in production may consist of

introduction of new product


introduction of new method of production


new source of supply of raw material


all of the above


76. The explanation of the 'modern economic growth' is associated with

Gunnar Myrdal Simon Kuznets


B. Higgins Harrod and Domar


77. Consider some of the factors about Kuznets' inverted U-shaped curve
1.
With the economic development inequalities increase in the first-stage

2.
As the country develops from a low level inequalities reduce

3.
Inequalities in distribution of income do not help in economic growth

4.
Conclusions were drawn on the basis of experiences in developing as well as developed


countries.
Of the above


2 and 4 are correct


3 and 4 are correct


only 1 and 4 are correct


only 2 and 3 are correct


78. "The core of human well-being is freedom of choice by enhancing people's capabilities for attaining higher standard of health, knowledge, self respect and ability to participate actively in community life". The above statement is associated with

Mahboobul Haque Gunnar Myrdal


Amartya Sen None of the above


79. The greatest obstacle to economic development these days is

lack of natural resources lack of domestic capital


shortage of manpower poor infrastructure


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80. Which one of the following does NOT help in increasing productivity

Increase in capital-output ratio


Substituting capital for labour according to their price ratios


Learning by doing


Migration of workers from low productive to high productive region


81. In which one of the following areas contribution of the Britishers was positive for the development of Indian economy

Import of raw materials


Development of cottage and small scale industries


Development of transport and communication


Export of textiles


82. The first scientific estimate of national income in India was made by

The Planning Commission V.K.R.V. Rao


National Sample Survey Organization Dadabhai Naoroji


83. Which one of the following was NOT a major problem for Indian Economy at the time of independence

Shortage of foreign exchange reserves Shortage of essential commodities


Stagnation of economic growth Predominance of agriculture


84. In the theory of Demographic Transition, at present India stands in

Stage-1 Stage-2


Stage-3 Stage-4


85. Which one of the following is NOT true about National Population Policy 2000

Total fertility rate to reduce from 5 to 3 by 2015


To improve health infrastructure


To achieve a stable population by 2045


To reduce infant mortality rate to below 30 per thousand live births


86. Which one of the following is the most effective measure to control high birth rate in India

Coercive methods of family planning


Economic and non-economic incentives


Spread of education


Better family planning and healthcare measures


87. The largest potential of electricity generation in India is found in

coal oil and gas


nuclear energy hydro-electricity


88. Which one of the following is the most important cause of underdevelopment of the Indian economy

Lack of capital


Under-utilized manpower and natural resources


High density of population


Low per capita income


89. Which one of the following does NOT help in environmental protection

Checking greenhouse gases emission Poverty alleviation


Deforestation Sustainable development


90. Assertion Poverty alleviation remains a basic concern of the government. Reason The New Economic policy adopted in India in 1991 has resulted in rapid economic
growth. Examine the above statements carefully and select the correct answer from the codes given below

Codes

Both and are true and is the correct explanation of


Both and are true but is not a correct explanation of


is true but is false


is false but is true


91. The growth rate of national income in India during the period 1951-1981 is often termed as

stagnant growth non-sustainable growth


creeping growth Hindu rate of growth


92. The largest source of savings in India is

household savings public corporate savings


private corporate savings public savings


93. The largest contribution in GDP in India comes from

agriculture, forestry, mining and fishing


manufacturing, construction, electricity and water supply


financing, real estate, insurance and business services


public administration, defence and other services


94. Which one of the following is NOT a feature of economic planning in India

Democratic planning Planning by inducement


Planning by direction Physical and financial planning


95. Consider some of the factors, given below justifying economic planning in India
1.
Market failure in providing infrastructure

2.
Mobilising resources to finance government expenditure

3.
Reducing economic and social inequalities

4.
Expansion of public sector
Of the above




2 and 4 are correct


3 and 4 are correct


1 and 2 are correct


1 and 3 are correct


96. The strategy of economic planning in India during the Second Plan was based on

Harrod-Domar model Mahalanobis model


K.N. Raj model None of the above


97. The rapid growth strategy of economic planning adopted in current plans failed to achieve social objectives due to

slow growth of the economy faster growth of population


weak trickle down effect adverse effects of globalization


98. The overall industrial development of India is measured by

Index of Industrial Production Industrial Development Index


All India Industrial Growth Index None of the above


99. The classification of industries on the basis of scale in India is based on

number of persons employed in the unit annual turnover of the unit


investment in plant and machinery kind of goods produced in the unit


100. List-I includes some aspects of industries in India and List II items associated with these aspects.

List-I List-II

Industrial sickness 1. TFP


Industrial growth 2. SIDBI


Capital formation 3. BIFR


Industrial finance 4. FDI


Matching items of List-I with the abbreviation in List-II, select the correct answer from the codes given below
Codes


42 3
24 1
12 3
14 2
101. Which one of the following is NOT included in land reform measures adopted in India

Better irrigation facilities Tendancy reforms


Abolition of intermediaries Ceiling on agricultural holdings


102. Growth of foodgrains production during the last two decades in India remained poor mainly due to

impact of globalisation


low export of agricultural products


stagnant investment in agriculture by public and private sectors


low level of input supply


103. Which one of the following is NOT true about Rashtriya Krishi Vikas Yojna

It aims at achieving stable agricultural growth during the Eleventh Plan


It is a Centrally financed scheme


The target is to achieve 4 percent annual growth in agricultural sector


The scheme was launched in August 2008


104. Which one of the following is NOT an objective of minimum support prices in case of agricultural products

To ensure remunerative prices to growers for their produce


Regulating profit margin of traders


To encourage higher investment and production


To safeguard the interest of consumers


105. Which one of the following is NOT related with food management in India

Larger food grain production Procurement of food grains


Maintenance of buffer stocks Food security and price stability


106. In petroleum products in India the largest amount of subsidy goes to

Kerosene Domestic LPG


Diesel Petrol


107. The main source of financing national highways in India is

Borrowing Budgetary Support


External assistance Cess fund


108. The largest increase in employment generation during the Eleventh Plan has been expected in

agriculture construction


manufacture transport and communication


109. Which one of the following is the most important cause of unemployment in India

Jobless growth Slow growth of GDP


No trickle down benefit of GDP growth Inequalities in distribution of GDP


110. Assertion High rate of economic growth is a necessary but not a sufficient condition to solve unemployment problem in India Reason Neglecting strategy of inclusive growth is a main reason of slow growth of
employment opportunities. Consider the above statements and select correct answer from the codes given below

Codes

Both and are true but is not a correct explanation of


Both and are true and is the correct explanation of


is true but is false


is false but is true


111. Which one of the following is NOT true about Thirteenth Finance Commission

It covers the period from April 2010 to March 31, 2015


Vijay Kelkar was the Chairman of the Commission


The Commission recommended large amount of grant from the Centre to meet deficit in State budgets


30.5 percent of the proceeds from Central taxes would be devolved to States


112. Which one of the following was NOT responsible for larger fiscal deficit of the Central Government in the year 2008-09

Tax rate reduction in excise and service tax


Sixth Pay Commission award


Larger Capital expenditure


Farm loan waiver


113. The largest source of tax revenue of the Union Government at present is

Personal income tax Corporation tax


Union excise duties Customs duty


114. In the proposed Goods and Service Tax which one of the following taxes will NOT be merged

Union excise duties Service tax


Central sales tax States' value added tax


115. For combating global recession during 2008-09 the most important fiscal measure was

tax rate cut in excise and service tax concession in import duties


larger amount of loans to industries larger capital expenditure


116. The apex body for regulating capital market in India is

BSE NSE


IDBI SEBI


117. Consider source of the following facts about 'Bharat Nirman' programme
1.
The programme was launched in the Eleventh Plan

2.
Building infrastructure and basic amenities is the main objective of the programme

3.
The programme is only for rural areas

4.
There are six components of the programme including housing and drinking water Of the above



2 and 3 are correct


3 and 4 are correct


3 and 4 are correct


2 and 4 are correct


118. As per population census 2001 the lowest literacy rate out of the following States was recorded in

Jammu and Kashmir Jharkhand


Bihar Uttar Pradesh


119. Which one of the following is the largest item of development expenditure in the budget of Jammu and Kashmir

Power Agriculture including irrigation


Education Medical and public health


120. Which one of the following is the largest source of tax revenue in Jammu and Kashmir budgets

Sales tax State excise


Taxes on goods and passengers Share in Central taxes


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