Economics-2000

1. Which one of the following pairs is NOT

correctly matched?

a. revealed Preference theory :

Samuelson

b. Indifference curve Analysis : Hicks

c. Cardinal Utility: Joan Robinson

d. Input-output Analysis : Leontief

2. Which one of the following statements is

NOT correct?

a. Different points on an indifference

curve stand for different combinations

of two goods.

b. different points on the consumption

possibility line stand for a different

combination of two goods.

c. all points on an indifference curve

stand for the same level of satisfaction.

d. All points on the consumption

possibility line stand for the same level

of satisfaction.

3. Given a consumers’ utility function U =

x1x2 and his budget constraint M = P1 x 1 +

P2 x2, at equilibrium, the demand function

for x1 will be

a. 1 2 M P +

b. 1 2 2 M P −

c. 1 2 2 M P +

d. 1 2 M P -

4. if the demand curve is a rectangular

hyperbola, then numerical elasticity of

demand is equal to

a. 0.25

b. 0.75

c. 1.00

d. 0.50

5. Consider the following data:

Price per kg (Rs) = Demand for wheat (kg)

12 5

10 ?

When the price of wheat is Rs 10 per kg

and the demand is unit-elastic, the demand

for wheat in kg would be

a. 5

b. 6

c. 10

d. 12

6. the elasticity of output with respect to

labour is equal to one, when average

product of labour is

a. equal to the wage rate

b. equal to the average product of capitals

c. equal to its marginal product

d. greater than its marginal product

7. if product isoquants are drawn as straight

lines, it implies that

a. marginal rate of technical substitution

(MRTS) is equal to MRTS equals the

ratio of factor prices

b. the marginal products of the inputs

equal the respect factor prices.

c. the marginal products of the inputs

equal the respectivly factor prices

d. MRTS is constant but not necessarily

equal to 1

8. consider the following statements:

at the point of equality between average

product and marginal product, average

product is

1. maximum

2. 2 minimum

3. constant

4. rising

Which of the above statements are correct?

a. 1 and 4

b. 2 and 4

c. 1 and 3

d. 2 and 3

9. Given a production function with two

input x1 and x2 and their prices r1 and r2,

the optimal combination of inputs is one

for which

a. marginal products of x1 and x2 are

equal

b. MRTSx1x2 /MRTS x2x1 = r1 / r2

c. MPx1 /MPx2 = r1 / r2

d. MPx2 /MPx1 = r1 / r2

10. Consider the following groups of items:

1. Factory buildings

2. Plant and machinery

3. Stocks of raw materials

4. the wage bill

Which of these are known as work capital?

a. 1 and 2

b. 3 and 4

c. 1, 2 and 3

d. 2, 3 and 4

11. Which one of the following statements is

correct?

a. an employer will continue to hire units

of a variable factor until marginal

revenue product (MRP) becomes equal

to money wages

b. an employer hires a variable factor

input up to the point where

diminishing returns begin to operate.

c. An employer hires a variable factor

input until its marginal revenue

product (MRP) becomes aero.

d. Variable factors are employed until

their MRPs become equal to one

another

12. Consider the following statements:

For a firm to be in equilibrium

1. MR = Mc

2. MC curve must cut MR cure from

below at the point of equilibrium

3. TR = TC

Which of the above statements are correct?

a. 1 and 2

b. 1 and 3

c. 2 and 3

d. 1, 2 and 3

13. the short-run supply curve of a firm under

perfect competition is the same as

a. average variable cost curve

b. marginal cost curve

c. marginal cost curve above average

variable cost curve

d. average total cost curve

14. when marginal cost is less than average

cost, average cost is

a. falling

b. rising

c. minimum

d. zero

15. In the two-inputs case, if the product

isoquants are l-shaped, the inputs are

a. perfect substitutes for each other

b. perfect complementary to each other

c. independent of each other

d. not predicable


16. If the demand and cost function of a firm
are given as q = 20 – P and C = Q2 + 8Q
+2, then the profit maximizing level of
output (in units) will be
a. 10
b. 8
c. 3
d. 0
17. A profit maximizing firm will stop
production in the short run if price is
a. less than average cost
b. below the marginal cost
c. less than average variable cost.
d. equal to average cost.
18. The burden of a tax on monopoly profit
will be
a. entirely on the producer
b. entirely on the consumer
c. equally distributed among the
producer and the consumer
d. more on the consumer than on the
producer.
19. An individual’s supply curve of labour
will bend backward when.
a. the income effect of a higher wage on
the demand for leisure is greater than
the substitution effect.
b. the substitution effect of a higher was
is greater than the income effect.
c. the income and substitution effects of a
higher wage reinforce each other.
d. leisure is a Giffen good
20. The necessary condition for a paretooptimal
allocation of any tow factors of
production, say K and L, are equality of
a. marginal productivity of the two
factors, K and L is all uses firms.
b. MRTS between the two factors in all
uses/firms
c. MRTS with the ratio of their market
prices
d. the market prices of the tow factors
21. Match List with List II and select the
correct answer:
List I
A. Value added
B. Nominal income
C. Real income
D. transfer earnings
List II
1. Constant prices Input – Output matrix
2. Pension
3. Current prices
Codes:
A B C D
a. 4 2 3 1
b. 2 4 1 3
c. 4 2 1 3
d. 2 4 3 1
22. Value added means value added
a. output at market prices
b. goods and services less depreciation
c. goods and services less cost of
intermediate goods and services
d. output at factor cost
23. Gross national product includes
depreciation’
a. Gross national product includes
depreciation’
b. value added includes transfer payments
c. personal income includes undistributed
profits
d. disposable income includes personal
taxes
24. The GNP at market price for 1983-84 was
Rs 192866 crores and the GNP at factor
cost was Rs 171201 crores. The
government paid at Rs 5107 crores as
subsides crores as subsidies during the
year. the amount of indirect taxes in crores
for the year should work out to
a. Rs 31879
b. Rs 26772
c. Rs. 21665
d. Rs 16558
25. GNP exceeds NNP by
a. the amount of total taxes
b. government expenditure
c. transfer payments
d. the difference between gross
investment and net investment
26. If MPC = APC for all levels of income
(Y), then the corresponding consumption
function will be
a. C = a + bY
b. C = bY
c. C = bY2
d. C = a + b Y2
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27. The accelerator theory of investment
relates the current rate of investment to the
a. long-term rate of interest
b. short-term rate of interest
c. current level of output
d. change in the level of output
28. If the consumption function undergoes a
parallel shift.
a. rise
b. fall
c. remain constant
d. be double
29. Match List with List II and select the
correct answer:
List I
A. J.M.Keynes
B. J.Duesenberry
C. M.Friedman
D. F. Modigliani
List II
1. Permanent income hypothesis
2. Life cycle hypothesis
3. Relative income hypothesis
4. Absolute income hypothesis
Codes:
A B C D
a. 4 3 2 1
b. 3 4 1 2
c. 3 4 2 1
d. 4 3 1 2
30. If MPS rises, then the equilibrium level of
output will
a. rise
b. fall
c. remain constant
d. be indeterminat
31. with the introduction of the money market,

the balance, budget multiplier would be

a. unity

b. less than unity

c. more than unity

d. zero

32. According to classical theory, a 10 percent

increase in money supply will

a. increase money wage rate by 10

percent, but have no effect on real

wages

b. increase real wage rated by 10 percent

c. decrease real wave rates by 10 percent

d. increase both money wage rate and

real wage rages by 10 percent.

33. The equation, 0.5Y + 50i – 240 = 0 (where

Y denotes national income and i the real

rate of interest), is that of a/an

a. consumption function

b. investment function

c. IS function

d. LM function

34. an increase in the money supply results in

a. a change in the slope of the LM curve

b. rightward shift of the LM curve

c. no change in the LAM curve

d. leftward shift of the LM curve

35. According to Keynes, which one of the

following is the basic causes of

involuntary unemployment?

a. a general deficiency in the demand for

goods and services

b. the reluctance of workers to move to

other parts of the country where their is

work.

c. The inability of change occupations

because of lack of the necessary skills

d. Workers’ ignorance of opportunities of

employment in other occupations and

districts

36. Speculative demand for money would

increase if

a. prices of securities are expected to rise

b. prices of goods are expected to fall

c. the interest rate is expected to the

constant

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d. the interest rate is expected to rise

37. consider the following liquid assets:

1. Demand deposits with the banks

2. time deposits with the banks

3. saving deposit with the banks

4. Currency

The correct sequence of these assets in the

decreasing order of liquidity is

a. 1, 4, 3, 2

b. 2, 3, 4, 1

c. 2, 3, 1, 4

d. 4, 1, 3, 2

38. The relationship between fisher’s V and K

in Cambridge equation of exchange is

a. V = 1/ K

b. V = 1/1+k

c. V = 1 + k

d. V = 1 - K

39. Under the ‘liquidity trap’s situation, the

liquidity preference curve

a. is perfectly inelastic

b. is per erectly elastic

c. intersects the horizontal axis

d. intersects the vertical axis

40. The Bank Rate means the rate which the

a. commercial banks offer on savings

deposits

b. commercial banks offer on current

accounts deposits

c. commercial banks change on shortterm

loans

d. Central Bank charges in rediscounting

first-class bills exchange

41. consider the following items includes in a

balance she

1. Demand Deposits

2. Borrowings from the other banks

3. Cash kept with other banks

4. Endorsement of bills of exchange

Which of these are shown in the liability

column of the Balance Sheet of a

commercial bank?

a. 1, 2 and 3

b. 1, 2 and 4

c. 1 and 3

d. 2 and 4

42. All other factors being held constant, the

relationships between liquidity and

profitability of a bank is that these two are

a. positively linearly related

b. positively non-linearly related

c. not related al all

d. inversely related

43. The incidence of a sales tax will be on the

sellers when

a. the demand for the commodity is

perfectly elastic

b. the demand for the commodity is

perfectly inelastic

c. the demand curve is a rectangular

hyperbola

d. the demand for the commodity is

moderately elastic

44. Match List with List II and select the

correct answer:

List I

A. corporation Tax

B. Sales Tax

C. House Tax

D. Wealth Tax

List II

1. State Government

2. Municipal corporation

3. Government of India

Codes:

A B C D

a. 3 1 2 3

b. 2 1 1 3

c. 2 3 3 2

d. 3 2 2 1

45. Consider the following statements:

Devaluation results in a

1. rise in the domestic price of imports

2. rise in the domestic price of exports

3. rise in the domestic price of exports

and imports

4. fall in the foreign price of exports

Which of the above statements are correct?

a. 1, 2 and 3

b. 1 and 2

c. 2, 3 and 4

d. 1 and 4


46. an optimum tariff
a. improves the terms of trade
b. keeps the terms of trade constant
c. lowers the terms of trade
d. reduces the country’s welfare level
47. For the Heckscher-Ohlin theory of trace to
be valid, the relative factor endowments of
two countries should be
1. close to each other
2. as divergent as possible
3. identical
4. of no concern
48. Which one of the following statements is
NOT correct?
a. Trade between two countries can take
place when their supply and demand
conditions are identical
b. trade between two countries can take
place with different supply conditions
and similar demand conditions
c. Trade between two countries an take
place will identical supply conditions
and dissimilar demand conditions
d. Trade between two countries can take
place with difference supply and
demand conditions.
49. If the price elasticity of demand for
exports is zero, then exports in local
currency will
a. be the same after devaluation
b. fall after devaluation’
c. substantially increase after devaluation
d. partially increase after devaluation
50. Customs union always leads to
a. trade diversion alone
b. trade creation alone
c. neither trade diversion nor trade
creation
51. An import tariff in a labour surplus
economy distributes income in favour of
a. landlords
b. wage eamers
c. owners of capital and skills
d. Government
52. Consider the following assumptions:
1. Perfect competition
2. Perfect mobility of factors between
countries
3. Constant returns to scale
Which of the above assumptions are
associated with Ricardo’s Theory of
Comparative Costs?
a. 1, 2 and 3
b. 1 and 2
c. 1 and 3
d. 2 and 3
53. Which of the above assumptions are
associated with Recardo’s offer curves of
two countries, H and F:
The diagram indicates that
a. H is a large country
b. F is a large country
c. both H and F are large countries
d. Both H and F are small countries
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54. Which one of the following pairs is NOT
correctly matched?
a. WTO: Generally forbids the use of
quantitative restrictions in trade
b. IMF: Provides finance to correct
disequilibrium in balance of payments.
c. SAARC: Promotes trade among south
Asian countries
d. ASEAN : Economic organization of all
Asian countries
55. The assumption of non-factor intensity
reversal used in proving the Heckscher-
Ohlin theorem is
a. necessary
b. sufficient
c. necessary and sufficient
d. neither necessary nor sufficient
56. Consider the following statements:
Foreign Portfolio Investment in India
means
1. investment by a foreign firm to start a
subsidiary
2. investment by a foreign firm to take
over an existing firm
3. foreign investment in shares
4. foreign investment in bonds
57. the automatic borrowing rights of a
member f IMF are determined by
a. the seriousness of its balance of
payments disequlibrium
b. its subscribed quota in the fund
c. the size of its holdings of reserve
currencies
d. the value of its currency in terms of
gold
58. Consider the following statements:
As per the Trade Related Investment
Measures (TRIMs)
1. all restrictions on foreign capital
companies are to be scrapped
2. no restrictions will be imposed on any
area of investment
3. imports of raw materials are to be
allowed freely
4. export of part of the output will be
mandatory
Which of the above statements are correct?
59. The utilisation of disguised unemployment
as a source of savings potential in
underdeveloped countries was suggested
by
a. R. Nurkse
b. P. Baran
c. R. Harrod
d. W.W. Rostow
60. Which one of the following pairs is NOT
correctly matched
a. rolling plan for developing countries :
Kaldor
b. Economic determinism: Marx
c. Balanced growth theory: Nurkse
d. Development with unlimited surplus of
labour: Lewis
61. Match List with List II and select the
correct answer:
List I
A. Domar
B. Rosenstein-Rodan
C. Rostow
D. Joan Robinson
List II
1. Golden Age
2. Big Push
3. Stages of growth
4. Required rate of growth
Codes:
A B C D
a. 4 2 3 1
b. 2 4 3 1
c. 2 4 1 3
d. 4 2 1 3
62. Match List with List II and select the
correct answer:
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List I
A. Solow
B. Hicks
C. Harrod
List II
1. Neutral technological change, under
which, despite the change in output,
the capital-lour ratio remains constant
2. neutral technological change, under
which, the labour output ratio remains
constant, so the factor proportions are
biased is fabour of saving capital.
3. Neutral technological change, under
which, the capital output ratio remains
constant, so that the factor proportions
are biased in favour of saving labour
Codes:
A B C
1 2 1 3
a. 1 2 3
b. 3 2 1
c. 3 1 2
63. The two-gap theory as applied to
development planning refers to
a. inflationary gap and investment gap
b. savings gap and deflationary gap
c. foreign exchange gap
d. savings constraint and foreign
exchange constraint
64. Demographic transition refers to
a. migration of population from rural to
urban areas
b. change in the male/female ratio of the
population
c. shift from a stable population at high
birth and death rates to one of low
birth and death rates
d. shift from high birth and low death
rates to low birth and low death rates
65. Which one of the followings is NOT an
assumption of the Harrod – Domar model?
a. Fixed capital-output ratio
b. Variable marginal and average
propensity to save
c. closed economy
d. Capital is the only factor of production
66. Which one of the following averages can
be computed form a cumulative frequency
curve?
a. Geometric Mean
b. Harmonic Mean
c. Mode
d. Median
67. In case the least value 5 of a set of 10
values of a variable x is changed to 4, then
a. both the median and the mode of X
will decrease
b. the medial will decrease but the mode
will remain unchanged
c. the median will remain unchanged but
the mode will decrease
d. neither the median nor the mode will
change
68. If the standard deviation of a variable x is
a s and if Y = a + bX, where a and b are
constants, the standard deviations of Y
would be
a. a+ bs
b. bs
c. b.s
d. b2 s
69. Which one of the following statistical
measures is based on all observations?
a. Quartile Deviation
b. Harmonic Mean
c. Range
d. Mode
70. If prices of all the goods have changed in
the same proportion and Laspeyres’ price
index has been found to be 150, the
Paasche’s price index will be
a. 300
b. 150
c. 175
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d. 100
71. Consider the following measures:
1. Correlation coefficient
2. covariance
3. coefficient of variation
4. Index number
Which of these are unit-free?
a. 1 and 2
b. 2 and 3
c. 2 and 4
d. 1, 3 and 4
72. If r is the correlation coefficient between
the tow variable then
a. 0 < r <
b. -< r < 0
c. - < r <1
d. 1 < r <1
73. Which one of the following items is NOT
included in the current account of India’s
balance of payments?
a. short-term commercial borrowings
b. Non-monetary god movements
c. Investment income
d. Transfer payments
74. Which one of the following items is NOT
included in the ‘invisible’ on current
account of the balance of payment of
India?
a. foreign travel
b. Transportation
c. Insurance
d. Loans from foreign banks


75. Match List with List II and select the
correct answer:
List I
A. Child labour
B. Self-help groups
C. small-scale industry
D. Trade finance
List II
1. DWCRA
2. SIDBI
3. EXIM Bank
4. UNICEF
Codes:
A B C D
a. 1 2 3 4
b. 4 1 3 2
c. 4 1 2 3
d. 2 1 3 4

76. Which one of the following states accounts

for the bulk of production of coal in India?

a. Madhya Pradesh

b. Maharashtra

c. Bihar

d. Orissa

77. Since 1990, savings of the household

sector in India have been

a. greater than the savings of the private

corporate sector but less than the

savings of the public sector

b. less than the savings of the private

corporate sector but more than the

savings of the public sector

c. greater than the savings of the private

corporate sector as well as the savings

of the public sector

d. less than the savings of the private

corporate sector as well as the savings

of the public sector

78. In the prevailing situation in India, the

income originating from the primary sector

is

a. greater than that originating from the

tertiary sector but less than that

originating from the secondary sector

b. greater than that originating from the

secondary as well as the tertiary sector

c. less that that originating from the

secondary as well as the tertiary sector

d. greater than that originating from the

secondary sector but less than that

originating from tertiary sector

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79. Which one of the following states had the

lowest per capital income at current prices

for the year 1995-96?

a. Uttar Pradesh

b. Orissa

c. Andhra Pradesh

d. Assam

80. The ‘Hindu a rate of growth’

a. refers to growth of Hindu population

b. is the term used by Raj Krishna to

represent the nature of the growth of

the Indian economy at around 3.5

percent per year

c. is the term coined by Amartya Sen to

represent the nature

d. is the term coined by V.K.R.V. Rao to

decide the nature of the growth of the

Indian economy at around 4 percent

81. Disguised unemployment in the

agricultural sector of India exists due to

the

a. dependence of agriculture on the

monsoons

b. abolition of Zamindari

c. heavy pressures of population on land

d. absence of trade unions in the

agricultural sector

82. As per the 1991 Census, ‘Main workers’

were defined as those who were engaged

in any productive activity during the year

preceding the date of enumeration for a

minimum of

a. 183 days

b. 283 days

c. 300 days

d. 365 days

83. Unemployment rate in India is defined as

the ratio of number of persons unemployed

to total

a. population

b. population excluding children

c. labour force

d. population excluding the aged

84. The population of India living below the

poverty line

a. is rising in relative and absolute terms

b. is falling in relative terms but rising in

absolute terms

c. is falling in both relative and absolute

terms

d. has not changed at all over the years

85. As per the Census of 1991, the sex ratio in

India (females per 1000 males) is:

a. 825

b. 870

c. 902

d. 927

86. Which one of the following states had the

lowest female literacy rate in India in

1991?

a. Madhya Pradesh

b. Tamil Nadu

c. Kerala

d. Kamataka

87. if the Indian economy aimed at an annual

growth rate of 7 percent in national

income, assuming as incremental capitalout-

put ratio of 3.5:1, what would be the

required rate of investment as percent of

national income?

a. 200

b. 24.5

c. 105

d. 3.5

88. Which one of the following denotes the

size of an operational holding in Indian

Agriculture?

a. owned land

b. owned land + leased-in land

c. Owned land + leased-in leased-out

land

d. Owned land – leased-out land

89. Which one of the following has NOT

been a part of the land reforms programme

in India

a. Ceiling on holdings

b. consolidation of holdings

c. Agricultural holdings tax

d. Zamindari abolition

90. In India, which one of the following is

NOT a cooperative organisation?

a. Primary land development banks

b. Central land development banks

c. Regional rural banks

d. State cooperative banks

91. The marketable surplus in Indian
Agriculture refers to annual
a. agricultural production + stocks of
agricultural commodities
b. Agricultural production – annual
consumption of agricultural
commodities within the agricultural
sector.
c. consumption of agricultural
commodities within the agricultural
sector + stocks of agricultural
commodities
d. agricultural production + annual
consumption of agricultural
commodities within the agricultural
sector
92. The interlocking of market in India
agriculture implies
a. the integration of the retail and whole
sale markets of agricultural
commodities.
b. the linking of regional rural markets
c. the operation of the same pair of
persons in a number of markets
d. the union of sellers in different
agricultural markets
93. Which among the following is NOT a
cause of sickness of industrial units in
India?
a. Obsolescent technology
b. Labour problems
c. Faulty location
d. Lack of capital account convertibility
94. In continuation of the programme of
disinvestment of public sector enterprises,
in the Union budget of 1998-99,
disinvestment was announced for
a. MTNL
b. IOC
c. BHEL
d. NALCO
95. The majority of Central Governments
enterprises belong to the
a. public corporations
b. public limited companies
c. private limited companies
d. departmental organizations
96. Which one of the following correctly
reflects the policy adopted by the British
administration in India up to 1900?
a. Irrigation development was
encouraged more than railways
development
b. Railway development was encouraged
more than irrigation development
c. Both railways and irrigation
development were ignored.
d. Development of irrigation and railway
was equally encouraged
97. A ready measure of the extent of
globalization of the goods market of India
is provided by
a. the share of imports in over-all output
b. the share of exports in over-all output
c. the share of imports and exports in
over-all output
d. total exports
98. which one of the following items of
imports entailed the largest expenditure of
foreign exchange in India in 1997-98
a. Non-electrical machinery
b. Fertilisers
c. Petroleum a and lubricants
d. Edible oils
99. Consider the following:
1. Sale of Resurgent India Bond
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2. GATT Agreement under the Uruguay
round
3. Introduction of OGL system
4. establishment of State Trading
corporation.
The correct chronological sequence of
these is
a. 1, 2, 3, 4
b. 4, 3, 2, 1
c. 4, 3, 1, 2
d. 2, 1, 3, 4
100. Consider the following exports of India:
1. Leather and manufactures
2. Readymade garments
3. Gems and Jewellery
4. Cotton yearns, fabric, made ups, etc
The correct sequence of these in
decreasing order of value in the year 1997
– 98 was
a. 1, 2, 3, 4
b. 2, 3, 4, 1
c. 2, 1, 3, 4
d. 3, 2, 4, 1
101. Consider the following counties:
1. U.K.
2. U.S.A
3. Russia
4. Germany
The correct sequence of the major Indian
exports to these countries in decreasing
order of value in the year 1997-98 is
a. 2, 1, 3, 4
b. 2, 1, 4, 3
c. 1, 2, 3, 4
d. 1, 2, 4, 3
102. Which one of the following is the main
cause of the down ward pressure on the
exchange rate of the Indian Rupees since
late August, 1999?
a. East Asian financial crisis
b. Uncertainties in domestic economic
policy
c. Uncertainties of coalition governments
at the centre
d. Widening deficit in the current account
of the balance of payments
103. An instrument of qualitative credit control
in India is India is
a. open market operation
b. credit rationing
c. change in reserve ratio
d. bank rate policy
104. Which one of the following represents
priority sector lending by commercial
banks in India?
a. Lending to heavy industries’
b. Lending to agriculture, small-scale
industries and weaker sections of the
population
c. Lending to foreign companies
d. Lending to state governments in
emergency situations like floods and
droughts
105. If the Reserve Bank of India sells
securities in the market will result in
a. an immediate change in the bank rate
b. a fall in the market rate of interest
c. an increase in loans to banks’
customers
d. a reduction in bank deposit

106. Consider the following statements:

The reverse bank of India

1. acts as a Bankers’ Bank

2. acts as a controller of capital issues

3. issues currency notes of various

denominations

4. acts as a lender of the last resort for the

sick industrial unit

Which of the above statements are correct?

a. 1, 2, 3, and 4

b. 1, 2 and 4

c. 2 and 4

d. 1 and 3




107. Match List with List II and select the

correct answer:

List I

A. Revenue deficit

B. Budget deficit

C. Monetised deficit

D. Fiscal deficit

List II

1. Total expenditure – Revenue receipts

2. Net increase in holding of Treasury bill

by RBI and its contribution to market

borrowings of government

3. total expendtiture – total receipts

4. Revenue expenditure- Revenue

receipts

Codes:

A B C D

a. 4 3 1 2

b. 3 4 1 2

c. 3 4 2 1

d. 4 3 2 1

108. Which one of the following is the

exemption limit of personal income tax

(for non-corporate assesses) in the budget

estimates of 1999 – 2000?

1. Rs 400,000

2. Rs 45,000

3. Rs 50,000

4. Rs 60,000

109. Which one of the following ODES NOT

come under the jurisdiction of state

taxations?

a. land revenue

b. Taxes on agricultural income

c. Taxes on land and building

d. Personal income tax

110. Which one of the following is the most

important source of revenue of state

governments in India?

a. land revenue

b. state excise duties

c. sales tax

d. Stamps and registration fees

111. In respect of which one of the following

items, did the Union budget of 1999-2000

propose a higher rate of excise duty

compared to the previous year’s budget?

a. Kerosene

b. Cooking gas

c. Colour TV

d. Paper and paper board

112. The percentage share of states n the net

proceeds of In come Tax, as recommended

by the Tenth Finance Commission, is

a. 66.7

b. 75.5

c. 81.7

d. 77.5

The following 8 (eight) items consist of

two statements, one labelled as ‘Assertion

A’ and the other labelled as ‘Reason R’.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

113. Assertion (A): primary Financial market

deals in new financial claims.

Reason (R): It mobilises savings and

supplies new capital to the business units.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

114. Assertion (A): more reliance should be

placed on progressive income taxes.

Reason (R): It is in accordance with the

principles of equity.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

115. Assertion (A): The market value of

corporate equity is not included in

National income.

Reason (R): such valuation of equity is a

part of the wealth of the society.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

116. Under standard assumptions of the

neoclassical model of trade. as long as

both countries are completely specialized

in production of one commodity,

international trade will lead to complete

factor-price equalizations

Reason (R): Free trade lead to an increase

in the price of the abundant factor, and a

decrease in the price of the scarce factor in

both countries.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

117. Assertion (A): The monetarist approach to

the problem of disequilibrium in the

balance of payments implies that the

disequilibrium is a temporary

phenomenon.

Reason (R): In the long run, the

disequilibrium in the balance of payments

is self-correcting.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

118. Assertion (A): If in a particular nation, the

real interest rate is rising more rapidly than

in other nati9ons, then it can expect the

international value of its currency to

depreciate.

Reason (R): If domestic real interest rates

are increasing more quickly than those in

other countries, supply of foreign currency

will increase.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

119. Depreciation of exchange rate tends to

increase the price level.

Reason (R): It is assumed that the Central

Bank undertakes no stabilization policies.

a. both A and R are true and R is the

correct explanation of A

b. Both a and R are true but R is NOT the

correct Explanation.

c. A is true but R is false

d. A is false but R is true

120. Assertion (A): In less developed countries,

the share of employment in agriculture in

total employment exceeds the share of

agricultural income in total income

Reason (R): Agriculture in less developed

countries is characterized by low

productivity