Economics-2001

1. Which one of the following agencies in

India is responsible for computation of

national income?

a. NCAER

b. C.S.O.

c. N.S.S.

d. R.B.I.

2. What is the approximate share of the

agricultural sector the total employment in

India?

a. 65 percent

b. 50 percent

c. 45 percent

d. 40 percent

3. The revised annual GDP-growth rate for

the Ninth Plan period is

a. 7.0 percent

b. 6.5 percent

c. 6.0 percent

d. 5.5 percent

4. Which one of the following finally

approves the Five Year Plans in India?

a. Union Cabinet

b. Planning Commission

c. National Development council

d. Parliamentary Committee on Planning

5. Math List I with List II and select the

correct answer:

List I

A. 73rd Constitutional Amendment Act

B. Narasimhan committee

C. Disinvestment commission

D. Rakesh Mohan committee

List II

1. Infrastructural Development

2. Financial

3. Panchayati Raj

4. Public Sector Enterprises

Codes:

A B C D

a. 3 2 4 1

b. 2 3 1 4

c. 3 2 1 4

d. 2 3 4 1

6. Which one of the Five Year Plans of India

was terminated before its targeted data of

completion?

a. third Five Year Plan

b. fourth Five Year Plan

c. Fifth Five Year Plan

d. sixth Five Year Plan

7. Which one of the following statements is

correct in the context of the role of the

market under planning?

a. The market has a vital role under

planning in a mixed economy’

b. the market mechanism and planning

cannot go together

c. the planners decides the allocation of

resources, but the market decides

prices decisively.

d. The planners decide the prices, but the

Market decided the allocation of

resources

8. The ‘Year of Great divide’ with regard to

population growth in India is

a. 1911

b. 1921

c. 1947

d. 1971

9. In India during the British rule, railways

were developed for.

a. creating better infrastructure for the

development of the Indian economy

b. the export of raw materials from India

to England for British Industries

c. Providing better transport facilities to

Indians

d. developing trade and commerce in

India

10. The ‘Drain Theory’ about poverty in India

is associated with

a. M. Viswesaraiah

b. V.K.R.V. Rao

c. Dadabhai Naoroji

d. Subhas Chandra Bose

11. Over the plan era, the relative share of

areas under foodgrains in gross cropped

area in India

a. decreased

b. increased

c. remained the same

d. decreased initially and then increased

12. Which one of the following statements

most appropriately describes the nature of

the Green Revaluation?

a. intensive cultivation of green vegetable

b. intensive agricultural district

programme

c. high-yielding varieties programme

d. seed-fertilizer-water technology

13. The major function of NABARD is to

a. give loans to the public

b. accept deposits from the public

c. give loans to commercial banks and

regional rural banks for the

development of the rural sector

d. deal in government securities

14. Consider the following statements:

Procurement of food grains at support

prices

1. ensures stability in farm prices.

2. ensures remunerative prices to farmers.

3. helps building public stocks of food

grains

Which of the above statements are correct?

a. 1 and 2

b. 2 and 3

c. 1 and 3

d. 1, 2 and 3

15. The correct sequence of establishment of

the following institutions in India is

a. SIDBI, NABARD, IDBI, IFCI

b. IDBI, NABARD, IFCI, SIDBI

c. IFCI, IDBI, NABARD, SIDBI

d. IFCI, SIDBI, IDBI, NABARD


16. Two Principle departmentally-run
commercial undertakings of the Indian
Government are
a. Railways and Airports
b. Railways and Posts
c. airports and Docks
d. airports and Posts
17. Which one of the following figures
represents the amount of disinvestments
fixed for the fiscal year 2000-2001?
a. Rs. 10,000 crore
b. Rs. 15,000 crore
c. Rs. 200,000 crore
d. Rs. 30,000
18. Consider the following statements:
A large part of the losses of the State
electricity Boards in India is accounted for
by
1. large subsidies on power supplies to
agriculture and domestic consumers.
2. inept maintenance and management of
power plants under the boards.
3. Labour problems
Which of the above statements are correct?
a. 1 and 2
b. 2 and 3
c. 1 and 3
d. 1, 2, and 3
19. Out of the four types of unemployment
mentioned be low, which one is the most
disturbing for the Indian economy?
a. Cyclical unemployment
b. Frictional unemployment
c. disguised unemployment in the rural
sector
d. Urban Unemployment among the
educated classes
20. Which one of the following labour laws
seeks to protect the interests of agricultural
labour in India?
a. Employee’s State insurance Act 1948
b. Minimum Wages Act 1948
c. Employees provident Fund Act 1952
d. workmen’s compensation Act 1923
21. Which one of the following items
accounted for the largest share of exports
(in value terms) from India during 1999-
2000?
a. Agriculture and allied products
b. Ores and minerals
c. manufactured goods
d. mineral fuels and lubricants
22. Which one of the following is NOT an
important import item of India at present?
a. food grains
b. Edible oil
c. Fertilizers
d. Newsprint
23. Which one of the following regions is the
largest trading partner of India?
a. West Asia
b. European Union
c. East European countries
d. North America
24. Consider the following statements:
India has been trying to promote its
commodity exports in value-added forms,
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because in case of such items thee is a
considerable margin between revenue and
cost of
1. labour
2. raw materials
3. imported components
Which of the above statements is/are
correct?
a. 1 alone
b. 2 alone
c. 1 and 2
d. 2 and 3
25. Consider the following statements:
1. WTO permits levying of import duty
meant to eliminate the price difference
between what initially the exporters
charge to customers in their own
country and what they charge in the
importing country.
2. WTO permits levying duty on imports
because of the unfair advantage that
the exporters may enjoy from export
subsidies they receive from their
governments.
Such import duties are, respectively, called
a. countervailing duty, anti-dumping duty
b. anti-dumping duty, duty under
‘safeguard’ provisions
c. countervailing duty, duty under
‘safeguard’ provisions
d. anti-dumping duty, countervailing duty
26. The new series of index number of
wholesale prices has as its base year
a. 1981-82
b. 1990-91
c. 1993-94
d. 1997-98
27. On which one of the following measures
of credit control for maintaining price
stability during the last ten years or so has
the Reserve Bank of India placed the
greatest reliance?
a. The Bank rate
b. Open market operations
c. Cash reserve requirements
d. Statutory liquidity requirements
28. What is the correct sequence of
nationalization of the banks mentioned
below?
a. state Bank of India, Rserve Bank of
India, 14 Commercial Banks, 6
Commercial Banks
b. Reserve Bank of India, 14 Commercial
Banks State Bank of India, 6
commercial Banks
c. Reserve Bank of India, State Bank of
India, 14 Commercial Banks, 6
Commercial Banks
d. 14 Commercial Banks, 6 commercial
Banks, Reserves Bank of India, State
Bank of India
29. A Finance Bill is a bill
a. which would authorise expenditure out
of the Consoli-dated Fund of India
b. to authorise expenditure out of the
Contingency Fund of India
c. introduced annually to give effect to
the financial proposal of the Union
Government for the next financial year
d. introduced annually to ratify the
financial year.
30. In the post-liberalization period, the share
of direct taxes in gross tax revenue in India
has
a. increased
b. decreased
c. first increased and then decreased
d. remained the sam
31. Which of the following taxes is an
exclusive source of revenue for the state
governments?
a. excise duties
b. customs duties
c. land revenue
d. wealth tax
32. Which one of the following is NOT a
source of the Union tax revenue?
a. property taxes
b. wealth tax
c. Corporate taxes
d. Customs duties
33. The correct amount of additional taxes
proposed in the Budget estimates for 2000-
2001 is
a. Rs. 5,000 crore
b. Rs. 6,000 crore
c. Rs. 7,000 crore
d. Rs. 8, 000 crore
34. According O the recommendations of the
Eleventh finance commission, the ratio of
tax revenues of the Union Government to
GDP should be
a. 1.48 percent
b. 2.34 percent
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c. 2.85 percent
d. 3.0 percent
35. Which one among the following accounted
fro the largest share of revenue
expenditure of the government of India, in
1999-2000?
a. Defence expenditure
b. Interest payments
c. Subsidies
d. Expenses on internal security
36. Which one of the following state is NOT a
high-income state according to the report
of the Eleventh finance Commission?
a. West Bengal
b. Goa
c. Haryana
d. Gujarat
37. In the Budget estimates for 2000-2001,
what is the extent of fiscal deficit as a
percentage of GDP, out of the four figures
given below?
a. 6.0 percent
b. 5.6 percent
c. 5.1 percent
d. 4.1 percent
38. Assertion (A): Transfer earnings are not to
be included in the national income
estimation.
Reason (R): Transfer earnings are not
payments for factor services
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 of A
c. A is true but R is false
d. A is false but R is true
39. Assertion (A): compared to no trade, there
are production and consumption gains to a
country from free trade.
Reason (R): The magnitude of gain from
trade independent of the magnitude of
price change from no trade.
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 of A
c. A is true but R is false
d. A is false but R is true
40. Assertion (A): suppose, Pakistan forms a
FTA (Free Trade Area) with its
neighboring countries including India, and
before the formation of this FTA, Pakistan
used to important certain kind of jewellery
from South Africa but now imports the
from India. This is called trade diversion.
Reason (R): Now there is a lot of FDI
(foreign Direct Investment) by India in
Pakistan, which was non-existent before.
This is called trade creation.
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 of A
c. A is true but R is false
d. A is false but R is true
41. Assertion (A): A country’s balance of
payments is always equal to zero.
Reason (R): If a country has a deficit in the
balance of payments account, this must be
financed by change in reserve long term
capital movements or long term
borrowing.
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 of A
c. A is true but R is false
d. A is false but R is true
42. Assertion (A): In developing countries,
government borrowing is preferred over
taxation in financing public expenditure.
Reason (R): Taxation would require a
curtailment in current consumption.
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 of A
c. A is true but R is false
d. A is false but R is true
43. Assertion (A): There was a rise in real
interest rates during the year 1999 in India.
Reason (R): There was a fall in the rate of
inflation during the period.
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 of A
c. A is true but R is false
d. A is false but R is true
44. Assertion (A): there has, of late, been an
erosion of profitability of public sector
banks in India.
Reason (R): there has been a build-up of
non-performing assets of the banks.
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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 of A
c. A is true but R is false
d. A is false but R is true
45. When the price-elasticity of demand is
unity, the marginal revenue would be
a. Marginal utility
b. total utility
c. consumers’ surplus
d. producers Surplus

46. The total area under the demand curve of a

goods, measures

a. marginal utility

b. total utility

c. consumers’ surplus

d. producers’ surplus

47. If the price-consumption curve is

horizontal, the price elasticity of demand

for x (the price of which falls) would be

a. zero

b. one

c. greater than one

d. less than one

48. If two demand curves intersect, then at the

point of intersection.

a. they are equally elastic

b. the steeper curve is more elastic

c. the flatter curve is more elastic

d. their elasticity cannot be compared

49. The production function Y = LK is

a. homogeneous of degree 2

b. Homogeneous of degree 1

c. homogeneous of degree zero

d. non-homogeneous

50. Suppose that output (Y) is a function of

capital (KI); then the capital-elasticity of

output is given by

a. MP / APK

b. APk/ MPK

c. Y

d. none of these

51. Assume a production function Y = Lα K1-α

(Y = output, L = labour and K = capital)

for a firm in a purely competitive market.

Which one of the following would

measure the share of labour in output?

a. α

b. L (α)

c. Lα

d. α/L

52. A supply curve will have a price-elasticity

equal to 1 only when it is

a. a straight line with a positive intercept

b. a straight line with a negative intercept

c. a straight line passing through the

origin

d. horizontal

53. If tow factors are perfect substitutes, the

isoquant will be

a. a straight line

b. a parabola

c. a rectangular hyperbola

d. an L-shaped curve

54. Under perfect competition (when input

prices are fixed and there are no external

economics or diseconomies), the industry

supply curve in derived by

a. vertically adding the average cost

curves’ horizontally adding the

average cost curves

b. vertically adding the marginal cost

curve]

c. horizontally adding the marginal cost

curves

55. Starting for a monopoly equilibrium

without any policy intervention, market

efficiency can be improved by imposing a

a. per-unit production tax

b. per-unit sales tax

c. profit tax

d. price ceiling below the existing

equilibrium price

56. Application of the ‘Marginal-cost pricing’

principle in a decreasing cost industry

would lead to

a. surpluses

b. losses needing subsidies

c. neither surpluses nor losses

d. a decline in output

57. In monopolistic competition a fir is longrun

equilibrium

a. at the minimum point of the long-run

average cost curve

b. in the declining segment of the longrun

average cost curve.

c. in the rising segment of the long-run

average cost curve

d. when the price is equal to marginal

cost

58. If in a purely competitive market with

downward-sloping demand and upward6

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sloping supply curves, a specific excise tax

per unit of output is imposed, then

a. price rises by the amount of the tax

b. the price-rise is less than the amount of

the tax

c. the price-rise grater than the amount of

the tax

d. the price remains the same.

59. Rent earned by a factor of production

equals

a. what this factor can earn in its next

best use

b. the sum of what this factor earns in its

current use and what is can earn in its

next best use

c. its current earnings

d. the difference between what this factor

is currently earning and what is can

earn in its next best use

60. the Adding Up Theorem under constant

returns to scale holds when the factors of

production are paid according to their

a. marginal productivities

b. average productivities

c. total productivities

d. ratio of marginal productivities to

average productivities
61. Income inequalities in a country can be
measured by
a. Lorenz curve
b. Gini coefficient
c. proportion of income received by
different size groups
d. all of the above
62. Market failure may NOT arise in the case
of
a. increasing returns to scale
b. public goods
c. the consumption externalities
d. income inequalities
63. A given economic state is Pareto-optimal
if a policy-change can
a. make everyone better off
b. make someone better off and someone
worse off
c. make someone better off and all others
worse off
d. not make anyone better of without
making someone worse off.
64. Which one of the following represents the
savings the private corporate sector?
a. Total profits of a company
b. Undistributed profits
c. excess of income over expenditure
d. dividends paid to shareholders
65. An economy’s Net national Income is
$20,000 million indirect taxes are $ 2,000
million,, subsidies are $ 1,000 million and
its population 150 million. What will be
the national Income at factor cost?
a. $21,000 million
b. $19,000 million
c. $23,000 million
d. $22,000 million
66. The aggregate output is determined by the
production function Q = Kα L1-α, where α
= 0.40, K is capital and L is labour.
Suppose, K and L are growing respectively
at the rate of 10% and 20%, the growthrate
of aggregate output will equal
a. 12%
b. 15%
c. 16%
d. 18%
67. Given : C = 50 0.5 Y
I = 80 G = 100.
The equilibrium level of income is
a. 4600
b. 560
c. 230
d. 360
68. Given the total investment expenditure, an
increase in the propensity to save will lead
to a
a. rise in income
b. rise in the rate of interest fall in income
c. fall in savings
d. fall in income
69. If the investment multiplier is 4, the
relevant consumption function is given by
a. C = 28 + 0.75 y
b. C = -28 + 0.78y
c. C = 28 + 0.70 y
d. C = 28 + 0.40 y
70. consider the following statements;
1. bond prices and interest rates vary
directly.
2. ‘supply creates its own demand’ is
known as Walras’ law
3. the rate that equalizes the discounted
cash flow expected from an investment
in a capital asset to its supply price is
the marginal efficiency of investment.
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4. disposable income varies inversely
with a tax on personal income
Which of the above statements are correct?
a. 3 and 4
b. 1 and 3
c. 2 and 4
d. 1, 2 and 3
71. Which of the following is consistent with
the cross-sectional consumption function?
a. APC = MPC
b. MPC = 0
c. APC > MPC
d. APC = 0
72. The speculative demand for money
depends on
a. interest rate
b. income
c. profit
d. output
73. An entrepreneurs plans to acquire a capital
asset, which is expected to yield Rs. 660 at
the end of the first year and Rs. 1, 452 at
the end of the second year after which it
will become useless. The discount rate is
0.10 what is its equilibrium supply price?
a. 2,112
b. 1,200
c. 1,800
d. 2,000
74. Consider the following statements:
1. when prices fall, with no change in
costs, marginal efficiency of capital
falls.
2. when prices fall, with no change in
costs, marginal efficiency of capital
increases.
3. marginal efficiency of capital falls with
increased output of capital goods.
4. marginal efficiency of capital rises
with increased investment because of
the increased output of capital goods.
Which of the above statement are correct?
a. 1 and 2
b. 1 and 3
c. 1 and 4
d. 2 and 3
75. Consider the following statements:
Classical economists believed that
unemployment in an economy would
persist because of
1. Labour-saving technical progress.
2. Deficiency in demand for goods.
3. Government intervention in the free
working of the economy
Which of the above statements is/are
correct?
a. 1, 2 and 3
b. 1 and 2
c. 2 and 3
d. 3 alone

76. When exchange rates are stable and a
country at full employment has a surplus
balance of payments, it will result in a
a. decline in price level
b. decline in money income
c. rise in price level
d. rise in money income


77. Match List I with List II and select the
correct answer
List I
A. C = 4 + 0.6 Y
B. I = 80 – 5i
C. 0.3 y – 20 i – 150 = 0
D. 0.3 y + 20 i – 150 = 0
List II
1. LM function
2. IS function
3. consumption functions
4. Investment function
Codes:
A B C D
a. 3 4 1 2
b. 4 3 1 2
c. 3 4 2 1
d. 4 1 2 3
78. When income rise, the impact on the
liquidity preference curve is that
a. it shifts to the left
b. it does not shift at all
c. it shifts to the right
d. there is a change in its slope
79. Human Development Index (HDI) is a
composite index of
a. health, literacy and employment
b. national income size of population and
the general price level
c. national income , per capita income
and per capital consumption
d. physical resources, monetary resources
and population size.
80. According to the Harrod-Domar model,
the warranted rate of growth, given the
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incremental capital-output ratio, depends
on the
a. rate of growth of labour force
b. marginal productivity of investment
c. marginal efficiency of capital]
d. saving – income ratio
81. According to J.R. hicks, technical
progress is said to be neutral if it raises
a. the marginal physical productivity of
labour and capital in the same
proportion
b. the average productivity of labour and
capital in the same proportion
c. the wage –rate and the interest –rage in
the same proportion
d. the interest-rate and the profit-rate in
the same proportion
82. According to Kuznets, during process of
development the income inequalities tend
to
a. decrease
b. increase
c. increase first and then decrease
d. decrease first and then increase
83. Perfectly elastic supplies of labour play a
crucial role in
a. Malthus’ model of growth
b. Kuznets’ model of growth
c. The Prebisch hypothesis
d. Lewis’ model of growth
84. Consider the following statements:
The correct order of specific stages of
demographic transition associated with
economic development is
1. low birth rate with low death rate.
2. high birth rate with high death rate.
3. high birth rate with low death rate.
Which of the above statements are correct?
a. 1, 2, 3,
b. 2, 1, 3
c. 2, 3 1
d. 3, 2, 1
85. Consider a Ricardian economy that is
endowed with 45 units of labour. It can
produce two goods: Gagar-halwa and
Kulfi. One unit of labour can produce 4
kilos of Gajar-halwa or 6 kilos of Kulfi.
The international priceof Gajar-halwa in
terms of Kulfi is 2. In free trade, this
country will produce.
a. 15 kilos of Kulfi
b. 130 kilos of Kulfi
c. 180 kilos of Gaja-Halwa
d. 270 kilos of Gajar-Halwa
86. Consider tow countries: Ghana and Zaire,
Assuming a heckscher-Ohlin framework,
let the total supplies of capital and labour
in the two countries be Ka = 300, La = 150
for Ghana and KI = 110 and LI = 50 for
Zaire. Each country produces two goods.
Cocoa and Peanuts and in both countries
cocoa is more labour intensive in
production. the Heckscher-Ohlin theory
predicts that
1. Zaire exports Cocoa to Ghana
2. Zaire imports Coca from Ghana
3. Zaire imports Peanuts from Ghana
4. both (a) and (c) will hold
87. If protection is given to a small importcompeting
industry, consumer surplus and
domestic profits will, respectively
a. rise, rise
b. Fall, fall
c. rise, fall
d. fall, rise
88. Which one of the following conditions is
NOT assumed by the factor price
equalization theorem?
a. the countries are characterised by
different factor endowments.
b. the countries are characterized by
different production functions
c. the industries are characterised by
different factor intesities
d. Each country will export the
commodity which uses its abundant
factor relatively intensively.
89. India is large exporter of tea and a small
exporter of bicycles. In this context, which
one of the following is true?
a. An export subsidy to tea would
improve India’s term of trade in the
world tea market
b. an export subsidy to tea would worsen
India’s terms of trade in the world tea
market
c. an export subsidy to bicycles would
improve India’s terms of trade in the
world bicycle market
d. an export subsidy to bicycles would
worsen India’s terms of trade in the
world bicycle market
90. There are two countries: Sugarland and
Salt land. Each country produces sugar and
salt. The former exports sugar and the
latter, salt. Starting from free trade
equilibrium, a tariff on salt by Sugarland
would affect the offer curves and the
relative price of sugar from Sugarland’s
perspective in which one of the following
ways?
a. Shift the offer curve of Saltland,
increase the price of sugar
b. Shift the offer cure of Saltland,
decrease the price of sugar
c. Shift the offer curve of Sugarland,
increase the price of sugar
d. shift the offer curve of Sugarland,
decrease the price of sugar
91. Consider the following diagram in the

contact of India importing edible oil.

Before trade, demand curve DD and

supply curve SS interest at E to tie

domestic price OP, which is higher than

world price OW. At world price OW:

demand for edible oil = OB

domestic supply of edible oil = OA

import of edible oil = AB

Assume that a tariff is levied on import of

edible oil. Price rise to OT.

The following inferences may be drown

from the diagram regarding the effect of

tariff. the import tariff

1. reduces consumption.

2. increases production.

3. decreases the volume of trade.

Select the correct answer using the codes

given below:

a. 1, 2 and 3

b. 1 and 2

c. 2 and 3

d. 1 and 3

92. The country can improve its balance of

Payments by Devaluation when the some

of elasticities of demand for exports and

imports is

a. greater than unit

b. equal to unity

c. less than unity

d. zero

93. The Purchasing Power Parity (PPP) theory

of the ex-change-rate implies that the

currency of a country A would depreciate

against that of country B is.

a. the inflation rate in A exceeds that in B

b. the normal interest-rate in A exceeds

that in B

c. the growth rate of GDP in b exceeds

that in A

d. foreign direct investment moves from

b to A.

94. In a freely floating exchange rate system

a. the current account and capital account

add to zero

b. each account can individually be equal

to zero

c. exchange rate is determined by market

forces

d. all the above statements are correct

95. In the diagram showing the demand and

supply curves for dollars, the Central

Authority wants to maintain the exchange

rate (rupees per dollar) at E2.

Then the Central Authority will need to

a. buy dollars and sell rupees

b. sell dollars and buy rupees

c. reduce tariff on imports

d. impose a tax on exports

96. Which one of the following is NOT

permissible under India’s current account

convertibility?

a. Residents holding foreign exchange

accounts

b. foreigners holding accounts in Indian

banks

c. exports holding foreign currency

accounts

d. free movement of short term capital

97. During the last visit to India, bill Gates

traveled by the government-owned airline.

he also watched cricket at Bangalore and

for the growth of the game, donated on

Demand/Supply of dollars

million dollars to the Karnataka fund for

Cricket (KFC). The amount he paid for the

air ticket and his donation of KFC would

be classified as

a. service exports and unilateral transfers

to India respectively

b. unilateral transfers to India in both the

cases respectively

c. service imports and service exports

respectively

d. merchandise imports and service

imports respectively

98. In al flexible exchange-rate system and

increase in the domestic interest in the

domestic interest rate would tend to

a. improve the current account and

worsen the capital account.

b. improve both the current and capital

accounts

c. worsen both the accounts

d. worsen the current account and

improve the capital account.

99. In the current international monetary

system the Indian rupee is pegged to

a. U.S. dollar

b. U.K. pound

c. euro

d. a basket of currencies

100. Neutrality of money implies that a given

increase in the money supply will

a. increase all prices in the same

proportion

b. increase all prices in different

proportions’

c. decrease all prices in the same

proportion

d. not change prices at all

101. The theory that the transactions demand

for money also depends on the rate of

interest, was put forward, by

a. Keynes and Pigou

b. Baumol and Tobin

c. Hicks and slow

d. Samuelson and Meade

102. Where M is money-supply, i is the interest

and I sis investment. the correct likely

sequence would be

a. m decrease, i goes down, I goes down,

GNP goes down

b. M decrease, I goes down, I goes up,

GNP goes down

c. M decreases, i goes up, I goes up, GNP

goes up

d. m goes up, i goes up, I goes up, GNP

goes up

103. The quantity theory of money implies that

an increase in the price level will be

associated with

a. an increase in output

b. and increase in money supply

c. a decrease in money supply

d. both (a) and b)


104. High powered money is

a. banks’ reserves at the central Bank

b. all loans and advance of banks

c. money held by banks

d. currency held by public and reserve

with the central bank.

105. Which one of the following pair is NOT

correctly matched?

a. Inflation Gap: Keynes

b. Cash Balance approach: Pigou

c. Accelerator-Multiplier analysis: hicks

d. Equation of Exchange : Marshall

106. commercial bank holds the following types

of assets:

1. Treasury bills

2. Loans and advances

3. ash

4. Money at call and short notice

The correct order in terms of increasing

liquidity is:

a. 3, 4, 1, 2

b. 4, 1, 3, 2

c. 3, 2, 1, 4

d. 2, 4, 1, 3

107. Should the Reserve Bank wish to intensive

the cash with commercial banks, it could

a. release gold form its rese

b. buy government bonds in the open

market

c. prohibit transactions involving bills of

exchange

d. increase the cash reserve ratio

108. Gold Tranche” (reserve tranche) refers to

a. a loand system of the world bank

b. one of the operations of a Central bank

c. a credit system granted by WTO to its

members

d. a credit system granted by IMF to its

members

109. Under WTO provisions

a. the G-7 countries have veto power to

overrule the verdict reached by the

dispute Settlement body

b. upon filing a case by a country or a

group of countries the dispute

Settlement body has to reach a verdict

(even including appeals) within 15

months from the date on which a cases

was field.

c. thee are no agreements on trade in

services

d. all the above statements are correct

110. The principle of Maximum social

advantage is concerned with

a. taxation only

b. expenditure only

c. public debt only

d. both taxation & public expenditure

111. justice in taxation is best ensured by

applying the principle of

a. equal absolute sacrifice

b. equal proportional sacrifice

c. equal marginal sacrifice

d. quid pro quo

112. Tobin tax is a tax on

a. exports

b. imports

c. transactions in foreign exchange

d. sales

113. Budgetary deficit does NOT take into

account

a. revenue deficit

b. capital budget deficit

c. balance of payment deficit

d. interest payment on public debt

114. The sum of squared deviations is the least

when taken from

a. mode

b. median

c. arithmetic mean

d. geometric mean

115. Suppose the average weight of 9 persons is

50 kg. Average weight of the first 5

persons is 45 kg, whereas average weight

of the last 5 persons is 55 kg. then the

weight of the 5th member will be

a. 45.0 kg

b. 47.5 kg

c. 50.0 kg

d. 52.5 kg

116. Which one of the following statistical

measures is NOT effected by extremely

large or shall values?

a. Median

b. harmonic mean

c. Standard deviation

d. coefficient of variation

117. Gien is the following distribution of two

variables X & Y:

X : 1 2 3 4 5

Y : 3 4 5 6 7

The standard deviation of Y is

a. Same as standard deviation of X

b. (the standard deviation of X) x 2

c. (the standard deviation of X) + 2

d. (the standard deviation of X)-2

118. The standard deviation of six numbers 3,

3, 3, 5, 5, 5 is

a. 1

b. 4

c. 0

d. Cannot be obtained since the unit of

measurement is not given

119. If for a sample data : mean < median <

mode, then the distribution is

a. skewed to the right

b. symmetric

c. skewed to the left

d. neither symmetric nor skewed

120. Let X = 9

3

−U

and Y = V – 4 and the

correlation coefficient between U and V is

0.93. Then the correlation coefficient

between x and Y will be

a. 0.093

b. -0.093

c. -0.93

d. cannot be derived