Economics-2002

1. According to the quantity theory of

money, the price level rises if

a. there is a decrease in money supply

b. the velocity of circulation of money

rises

c. the aggregate volume of transactions

increases

d. the real demand for money rises

2. In the compensating variation method of

measuring the substitution effect of a rise

in price, the consumer is

a. under-compensated

b. over-compensated

c. Just compensated

d. unaffected

3. When both the demand and the supply

curves slope downwards and the demand

curve is steeper than the supply curve, the

equilibrium is

a. stable in both Marshallian and

Walrasian sense

b. unstable inboth marshallian and

Walrasian sense

c. stable in the Marshallian sense but

unstable in the Walrasian sense

d. unstable in the Marshallian sense but

stable in the Walrasian sense

4. On the expansion path of the firm

operating with homogeneous production

function, which among the following

remain constant?

1. input ratio

2. price ratio of inputs

3. marginal rate of technical substitution

between the factor

4. Elasticity of substitution

Select the code given below the codes

given below:

a. 1 and 4

b. 1 and 2

c. 2, 3 and 4

d. 1, 2, 3 and 4

5. Consider the following combinations of

inputs & outputs:

Labour Capital Output

5 10 1

6 12 2

7 14 3

8 16 4

9 18 5

10 20 6

This production technology satisfies

a. increasing returns to scale

b. diminishing returns to scale

c. constant returns to scale

d. increasing returns initially, followed by

decreasing returns to scale

6. In the context of cost minimization by a

competitive producer, which one of the

following is NOT correct?

a. Marginal rate of technical substitution

of the factors equals relative factor

price ratio.

b. Ratio of marginal physical

productivities of the factor equals the

ratio of factor prices

c. Slope of the isoquant in question

equals slope of the budget line

d. marginal rate of technical substitution

of factors of production divided by

relative factor price ratio is zero.

7. In the short run, the supply curve of a

competitive fir is

a. the rising portion of the marginal cost

curve lying above the minimum point

of the average variable cost curve.

b. the falling portion of the marginal cost

curve laying before the minimum point

of the average variable cost curve

c. the rising portion of the marginal cost

curve after the highest point of total

cost curve

d. None of the above

8. Suppose, there is a situation where two

individuals are engaged in exchange and if

individual 1 is a price –maker and

individual 2 is a price-taker, equilibrium

a. takes place on the offer curve of

individual 1

b. takes place on the offer curve of

individual 2

c. takes place at the intersection point of

the two offer curves

d. is indeterminate

9. In the long run, the market price of a

commodity is equal to its minimum

average cost of production, if thee is

a. perfect competition

b. monopoly

c. oligopoly

d. monopolistic competition

10. The kinked demand curve is reflected in a

discontinuity in the

a. total revenue curve

b. marginal cost curve’

c. average revenue curve

d. marginal revenue curve

11. Rent earned by a factor of production

equals

a. what this facto 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 transfer earning

d. the difference between what this factor

is currently earning and what is can

earn in its next best use

12. In the linearly homogeneous Cobb-

Douglas production function with two

inputs, the elasticity of substitution

between the inputs is

a. zero

b. greater than one

c. one

d. less than one

13. Suppose that there are tow goods, X and

Y, facing a consumer. The prices are px =

Rs 4 and py = Rs 5. He has Rs 110 to

spend on these goods. suppose, he is

currently by\buying 15 units of goods X

(with marginal utility equal to 40) and 10

units of good (with marginal utility equal

to 45). In the above context, which one of

the following statements is correct?

a. his total utility will increase if he

spends more on good Y and less on

goods X

b. his total utility will increase if he

spends more on good Y and less on

good X

c. His total utility will increase if he

spends less on both the goods

d. His total utility is being maximized

subject to the budget constraint he is

facing

14. if an individual is observed to work less in

response to an increase in the wage rate for

his services, this implies that

a. for this individual, leisure is a normal

good

b. for this individual, leisure is an inferior

good

c. the individual is irrational

d. leisure coule be a Giffen good

15. Consider the demand curve depicted in the

following diagram:

The elasticities of demand at price P1 and

P2 are different because, at these prices

a. slopes are different

b. prices are different

c. quantities are different

d. price-quantity ratios are different

16. Given the demand function q = 20/ P,
where p = price of product and q =
quantity of product, the elasticity of
demand at p 10 would be
a. 0
b. -1
c. -2
d. ∞
17. Match List I (marginal Rate of substitution
MRSxy) with List II (The Shape of
Indifference Curve IC) and select the
correct answer:
List I
A. MRSXY = Zero
B. MRSXY = Constant but non-zero
C. Decreasing MRSXY
D. Increasing MRSXY
List II
1. Right-angled
2. Straight line with negative slope
3. IC is concave to the origin
4. IC is convex to the origin
Codes:
A B C D
a. 1 2 4 3
b. 3 4 2 1
c. 1 4 2 3
d. 3 2 4 1


18. In a fixed exchange rate system, automatic
adjustments of balance of payments are
brought about by variation in
Quantities demanded X
d
Y
Price
P1
P2
O
d
a. fiscal policy interventions
b. trade policy interventions’
c. internal prices
d. external prices
19. Which one of the following assumptions is
NOT correct for the revealed preference
analysis?
a. Consistency
b. Transitivity
c. Rationality
d. Weak ordering
20. A consumer spend all his income of Rs
500 equally goods X and y by purchasing
50 unit X @ Rs 5 per unit and 25 units of
Y @ Rs 10 per unit. Because of recession,
prices of X and Y fall by 50% and his
employer reduces his salary from Rs 500
to Rs 250. In this situation he is expected
to
a. increase the purchase of both X and Y
as they are now cheaper
b. decrease the purchase of both x and Y
as his income goes down
c. leave the purchase basket unaltered at
50 X and 25 of Y
d. alter his purchase in a uncertain way.
21. Let I = 5 + 0.2 Y, s = -15 + 0.3 Y and G =
5 (where I = Investment, Y = Y= national
Income, s = Savings and G = government
Spending). What is the equilibrium level
of Y?
a. 200
b. 100
c. 250
d. 300
22. Consider the following statements:
1. Absolute Income Hypothesis is
associated with Keynes
2. S= -20 + 0.4y and C = 20 + 0.6y yield
the same investment multiplier
3. Investment multiplier rises whenever
income tax is introduced in the system
4. Bond price and interest rates are
directly related
Which of the above statements is/are
correct?
a. 1 alone
b. 2 and 3
c. 3 and 4
d. 1 and 2
23. Given are the following informations
about an economy:
Consumption =Rs 5,000
Gross Investment =Rs 1,000
Govt. Purchases =Rs 800
Exports =Rs 600
Imports =Rs 800
Depreciation =Rs 250
What is the GNP at market prices?
a. Rs 7,100
b. Rs 6,850
c. Rs 6, 600
d. Rs 6, 350
24. Consider the following statements relating
to classical theory of employment:
1. Classical theory is based on the
assumption of full employment.
2. Classical version of full employment is
a situation where involuntary
unemployment is present
3. Classical version of full employment is
consistent with seasonal
unemployment and frictional
unemployment
4. Classical economists advocated wage
cuts to reduce the unemployment level
Which of the above statement are correct?
a. 1, 2 and 3
b. 2, 3 and 4
c. 1, 3 and 4
d. 1 and 2
25. Which one of the following saving
functions corresponds to the investment
multiplier of 5?
a. S = - 28 + 0.25 Y
b. S = -40 + 0.75 Y
c. S = -60 + 0.20 Y
d. s = - 75 + 0.60 Y
26. When investment is negatively related to
the rate of interest, the equilibrium output
in the goods market is
a. unrelated to the rate of interest
b. inversely related to the rate of interest
c. positively related to the rate of interest
d. indeterminate
27. Consider the following statement denoting
the relationship between marginal
propensity to consume and value of
multiplier:
1. higher the marginal propensity to
consume, higher is the multiplier
2. higher the marginal propensity to
consume lower is the multiplier
3. when the marginal propensity to
consume is one, multiplier takes the
value of infinity
Which of the above statements is/are
correct?
4 of 12
a. 1 alone
b. 2 and 3
c. 1, 2 and 3
d. 1 and 3
28. Consider the following statement
1. In an economy where productive
capacities are increasing, gross private
domestic investment exceeds
depreciation
2. Interest on the public debt is not a part
of national income but is included in
personal income
3. disinvestment occurs when inventories
expand
4. The purchase of new home is included
in the GNP as a part of investment.
Which of the above statements are correct?
a. 1 and 2
b. 3 and 4
c. 1, 2 and 4
d. 1, 3 and 4
29. An increase in fiscal spending leads to
a. a shift of the Philips curve to the right
b. a shift of the Philips curve to the left
c. movement along the Phillips curve
such that unemployment rises and
inflation falls
d. movement along the Phillips curve
such that unemployment falls and
inflation rises
30. Consider the following statements:
1. According to the accelerator model,
investment demand is proportional to
the change in GNP
2. The real rate of interest is the nominal
rate of interest plus the inflation rate
3. the higher the real interest rate, the
higher is the rental cost of capital
4. Investment is a stock concept
a. 2 and 3
b. 1 and 2
c. 1 and 3
d. 1, 2, 3 and 4
31. ‘The propensity to consume of an
individual with respect to his disposable
income and wealth depends on his age.
‘The statement refers to the
a. relative income hypothesis
b. permanent income hypothesis
c. life-cycle hypothesis
d. absolute income hypothesis
32. When income falls, what happens to the
liquidity preference curve?
a. It does not shift
b. It shifts to the left
c. It shifts to the right
d. It becomes parallel to the vertical axis
33. project A costing Rs 2,000 crores has an
MEC of 15 project b costing Rs 1,100
crores has an MEC of 7 and project C
costing Rs 1, 500 crores has an MEC of
13. What is the total equilibrium level of
investment if the rate of interest is 8
percent?
a. Rs. 2, 000 crores
b. Rs 1, 100 crores
c. Rs 1, 500 crores
d. Rs 3, 500 crores
34. How much has to be paid for a Rs 1, 000
bond that pays Rs 60 per year and has only
one year to go before maturity, if the
prevailing interest rate is 7 per cent?
a. 100/ 1.07
b. (1000 x 1.07)
c. 940
d. 1060 1
1.07
⎛ × ⎞ ⎜ ⎟
⎝ ⎠
35. Consider the following statements:
1. if government expenditure increases
the IS cure shifts to the right
2. If the taxes increase the IS curve shifts
to the right
3. If the price level increases the LM
curve shifts to the left
4. the more interest elastic the investment
function, the more interest elastic will
be the IS curve
Which of the above statement is/are
correct?
a. 2, 3 and 4
b. 1, 3, and 4
c. 1 and 2
d. 2 alone
36. Consider an economy which has the
following information:
1. Reserve money = Rs. 10,000
2. Currency and Demand Deposits = Rs
25, 000
3. currency, Demand and Time Deposits
= 50, 000
4. National Income = Rs 1, 00, 000
The income velocity of circulation of MI
in this economy is
a. 4.0
b. 2.5
c. 10.0
d. 2.0
5 of 12
37. Stagflation refers to situation which is
characterized by
a. deflation and rising unemployment
b. inflation and rising employment
c. inflation and rising unemployment
d. stagnant employment and deflation
38. Which one of the following is NOT
included while estimating national income
through income methods?
a. Rental Income
b. Undistributed Profits
c. Mixed Income
d. Pensions
39. Bank rate refers to the
a. interest rate at which Commercial
Banks accept deposits from the public
b. rate at which Central Bank rediscounts
bills of exchange of Commercial
Banks
c. prime lending rate of commercial
Banks
d. interest rate at which Commercial
banks lend to the customers
40. The elasticity in respect of speculative
demand for money, under the liquidity trap
condition is
a. zero
b. one
c. grater than one
d. infinite
41. When the intrinsic value of money and its
face value are equal, it is called
a. token money
b. full-bodied money
c. quasi-money
d. fiat money
42. Which one of the following is NOT an
instrument of monetary policy?
a. Tariffs
b. Moral suasion
c. open market operations
d. Credit rationing
43. Which one of the following according to
Milton Friedman is NOT a key
determinant of the demand for money?
a. Aggregate wealth
b. Precautionary motive
c. Relative rates of return obtainable on
different form of assets
d. Physical non-human capital goods and
human capital
44. A significant decrease in the demand for
loans will force banks to
a. adjust their portfolios
b. sell securities to the Central Bank
c. resort to borrowings
d. raise the prime lending rate
45. Which one of the following factors affects
velocity of circulation?
a. time unit of income receipts
b. Frequency of transaction
c. Liquidity preference
d. all of the above

46. Which one of the following statement is
correct in respect of equation of exchange
MV = PT?
a. If M is double, leaving V and T
unaffected, then P must double
b. If M is doubled, leaving v unaffected,
then P will be halved
c. If M and T are doubled, leaving v
unaffected, then P will be halved
d. If M is doubled, V is halved, laving t
unaffected, then P gets multiplied 3
times


47. Match List I (name of the Economist) with
List II (concept/theory) and select the
correct answer:
List I
A. A. W. Phillips
B. Findlay Shirras
C. J.M. Keynes
D. R.S. Sayers
List II
1. Central Bank
2. Trade-off between wage and
unemployment rate
3. theory of profit
4. Taxable capacity
5. liquidity trap
Codes:
A B C D
a. 5 4 1 2
b. 2 3 5 1
c. 5 3 1 2
d. 2 4 5 1
48. The Central Bank can decrease the bank
credit component of the money supply by
a. lowering the cash reserve requirements
b. increasing the bank rate
c. lowering the bank rate
d. buying of government securities by the
Central Bank
49. Which one of the following can be called
as an instrument of selective credit
control?
a. Fixing statutory liquidity requirements
b. Variation of bank reserve ratio
c. Fixing of margins for lending against
specific securities
d. Altering discount rate
50. Which one of the following represents
capital adequacy ratio for commercial
Banks?
a. Ratio of capital to risk-weighted assets
b. Ratio of capital to short-term deposits
c. Ratio of capital to non-term deposits
d. Ratio of capital to non-performing
assets
51. Derivative deposit means
a. cash deposited in a bank by an
employee of a business firm
b. deposits created by a commercial Bank
out of its borrowings from the RBI.
c. cash deposited in a bank by another
Commercial Bank
d. deposits created by a bank out of its
credit provided to the customer of the
bank
52. Which one of the following is generally
regarded as the true index of economic
growth?
a. An increase in national income at
constant prices during a year
b. a sustained increase in real per capita
income
c. an increase in national income at
current prices over time
d. an increase in national income along
with increase in population.
53. Marx refers to the concept of organic
composition of capital. Which one of the
following ratios stands for this (where C is
Constant capital, V is variable capital and
s is surplus value)
a. C
V + S
b. C
V
c.
( )
C
C +V
d. (C V)
V
+
54. Which one of the following factors is
stressed by Schumpeter in his theory of
economic growth?
a. Innovations
b. Laissez-faire
c. population growth
d. surplus value
55. The ‘Big-push’ strategy of development
was first advocated by
a. Rosenstein Rodan
b. Simon Kuznets
c. W.A. Lewis
d. A. O. Hirschman
56. Consider the following statements:
The effect of a tariff is to
1. raise the domestic price
2. reduce consumption
3. increase imports
Which of the above statements are correct?
a. 1 and 2
b. 2 and 3
c. 1 and 3
d. 1, 2 and 3
57. Which one of the following statements is
NOT correct?
a. Free Trade Area among a group for
countries means that they eliminate
import tariffs against one another but
maintain their original tariff levels
against the rest of the world.
b. customs Union among a group of
countries means that they eliminate
import tariffs against one another,
coordinated their macro-policies and
impose a common tariff wall against
the rest of the world.
c. In a common market the member
countries eliminate import tariffs
against one another, allow free
mobility of factors between them and
maintain a common tariff was against
the rest of the world.
d. In a Economic Union, the member
countries eliminate import tariffs
against one another, allow free
mobility of factors between them,
coordinate their macro-policies and
maintain a common tariff wall against
the rest of the world
58. For a large trading country, optional tariff
argument is based on the proposition that a
tariff imports
a. lowers the country’s terms of trade
b. improves the country’s terms of trade
c. leaves the country’s terms of trade
unchanged
d. fails to protect the imports competing
industries.
59. Suppose, a country has adopted freely
floating exchange a system. then, ceteris
paribus, if price level in the country rises
lads to a
a. rise in the demand for the country’s
currency and currency depreciates
b. rise in the demand for country’s
currency and currency appreciates.
c. fall in the demand for country’s
currency and currency
d. fall in the demand for country’s
currency and currency depreciates
60. Which one of the following pairs is NOT
correctly matched?
a. MFA : Agricultural
Free Trade
b. UNCTAD : Free Trade
Area
c. IMF : Balance of
Payments
Difficulties
d. MFN : Direct foreign
Investment
61. The term of trade refers to

a. the excess of import expenditure over

export earnings

b. Trade agreements

c. the ratio between export prices and

import prices

d. the terms and conditions on which a

country is offered loaned in the event

of balance of payments difficulties

62. The government of India announced a new

NRI (non-resident Indian) deposit scheme.

this offers a very high interest rate,

compared to the interest rates abroad, on

foreign currency deposits by NRIs in

Indian Commercial banks. Many NRIs in

the US do invest under this scheme. Under

a flexible exchange rate system, this would

tend to

a. depreciate the value of Indian rupee

against US dollar

b. appreciate the value of Indian rupee

against US dollar

c. deplete the foreign exchange reserve of

India.

d. leave the value of rupees against US

dollar unchanged

63. India is a net exporter of hand-made

carpets and an importer of high-tech

products like computer memory chips and

printers. This pattern of Indian trade is

explained by the

a. Ricardian theory

b. Heckscher-Ohlin theory

c. labour theory of value

d. purchasing power parity theory

64. Presently, India’s exchange rate policy

towards current account and capital

account transactions is that the rupee is

a. fully convertible for current account

transactions, but not for capital account

transactions

b. fully convertible for capital account

transactions, but not for current

account transactions.

c. fully convertible for both capital and

current account transactions

d. not convertible for either type of

transactions

65. Mr. Ramprakash travelled to England for

medical operation. He had to bear the cost

of his air travel by air India as well as the

cost of hospitalization. In this context,

which one of the following is true in terms

of entry in India’s balance of payments

transactions?

a. The cost of hospitalization is included

in-service imports but the cost of air

travel is not

b. The cost of air travel is included in

service imports but the cost of

hospitalization is not

c. Both expenditures are included in the

category of service imports

d. Both expenditures are included in

service exports

66. Suppose that the world economy consists

of two countries. ‘Home’ and ‘Foreign

shifts.

a. Home’s offer curve to the right

b. Foreign’s offer curve to the right

c. Home’s offer curve to the left

d. Foreign’s offer curve to the left

67. In the context of a small, completive

currency, an increase in import tariff

causes.

a. a consumption deadweight loss in

terms of welfare since consumers now

pay a higher price for the product

b. a production deadweight gain in terms

of welfare since Homestic producers

gain from tariff protection

c. an overall welfare gain

d. a trade gain since the amount import

decreases

68. In the tow-good Ricardian trade model,

complete specialization in production

occurs in free trade equilibrium because

8 of 12

a. the production possibility frontier

satisfies increasing opportunity cost

b. Thee are diminishing returns to the

factor of production

c. there are increasing returns to the

factor of production

d. the production possibility frontier

satisfies constant opportunity cost

69. Special Drawing Rights (SDRs) is the

currency of IME this is in the form of

a. paper currency

b. gold

c. silver and gold both

d. book-keeping entry only

70. Consider the following statements:

The Brettonwoods Conference led to the

establishment of

1. IMF

2. IBRD

3. United Nations

Which of the above statements are correct?

a. 1 and 2

b. 2 and 3

c. 1 and 3

d. 1, 2 and 3

71. A deficit in a country’s balance of

payment refers to the difference between

a. autonomous receipts and autonomous

payments

b. accommodating receipts and

autonomous payments

c. accommodating receipts and

accommodating payments

d. autonomous receipts and

accommodating payments

72. What is the correct sequence of the

following?

1. Uruguay Round Talks

2. WT’s Seattle Meet

3. Establishment of GATT

Select the correct answer using the codes

given below:

a. 1, 2, 3

b. 3, 1, 2

c. 3, 2, 1

d. 2, 3, 1

73. Which one of the following treaties was

covered by this Uruguay Round

Negotiations?

a. General agreement on trace in services

b. Trade- related intellectual property

rights

c. Trade-related investment measures

d. All of the above

74. The Heckscher-Ohlin theory of trace

pattern assumes.

a. perfect competition in the product

markets but not in the factor markets.

b. perfect competition in the factor

markets but not in the product markets

c. perfect competition in both product

and factor markets

d. unemployment in the labour market

75. Which one of the following statements is

NOT correct?

Fisher’s index

a. lies between Laspeyres’ index (L) and

Paasche’s index (P)

b. is the arithmetic mean of L and P

c. is the geometric mean of L and P

d. is equal to L or P if L = P


76. Consider the following statements:

1. Quartile deviation is more instructive

range as it discards the dispersion of

extreme items

2. Coefficient of quartile deviation cannot

be used to compare the degree of

variation in different distributions.

3. there are 10 deciles for a series.

Which of the above statements is/are

correct?

a. 1, 2 and 3

b. 2 alone

c. 3 alone

d. 1 alone

77. Which one of the following indices

satisfies both time reversal and factor

reversal tests?

a. Laspeyres’s index

b. Fisher’s index

c. Paasche’s index

d. Kelly’s index

78. Given the following data- 1, 2, 3, 4 and

100; the best measure of central tendency

is the

a. arithmetic mean

b. median

c. mode

d. mode geometric mean

79. If for a given data, mode = 5, median = 15

and mean = 20, it means that the sample

data is

a. skewed to the right

b. skewed to the left

c. symmetric

d. neither symmetric not skewed

80. Consider the following statements:

9 of 12

1. correlation analysis helps in

determining the relationship between

two or more variables – it does not tell

us anything about the cause and effect

relationship

2. the ratio of explained variation to the

total variation is called the coefficient

of correlation.

3. Pearsonian coefficient always assumes

linear relationship and is unduly

affected by the extreme items.

Which of the above statements is/are

correct?

a. 2 alone

b. 1 and 2

c. 1 and 3

d. 2 and 3

81. The right-hand tail of a frequency

distribution is found to the mirror image of

the left-hand tail. the distribution is

a. positively skewed

b. negatively skewed

c. asymmetric

d. symmetric

82. From the cumulative frequency diagram

which one of the following types of

average can be estimated?

a. Geometric Mean

b. Harmonic Mean

c. Median

d. Mode

83. During one year the ration of prices of two

commodities is 3, whereas during the next

year it is 2. For averaging these rations.

a. arithmetic mean is most appropriate

b. harmonic mean is most appropriate

c. geometric mean is most appropriate

d. All the three, arithmetic, harmonic and

geometric means are equally

appropriate

84. Consider the following statements:

1. Median is not useful while dealing

with skewed distribution such as

income distribution or price

distribution.

2. Median can be determined graphically

by drawing only one give.

3. Mode can be used to describe

qualitative phenomenon.

Which of the above statement are correct?

a. 1 and 2

b. 1 and 3

c. 2 and 3

d. 1, 2 and 3

85. What was the broad contribution of the

tertiary sector to the national Income of

India in 2000-2001?

a. 30 per cent

b. 20 per cent

c. 50 per cent

d. 25 per cent

86. Match List I (Savings in 1999-2000) with

List II (Per cent of GDP) and select the

correct answer::

List I

A. Saving of household sector

B. Savings of corporate sector

C. Savings of public sector

D. total savings

List II

1. 1. 22.3%

2. 19.8%

3. 3.7%

4. 1.2%

Codes:

A B C D

a. 4 3 2 1

b. 2 1 4 3

c. 4 1 2 3

d. 2 3 4 1

87. Assuming an industrial growth rate of 6

per cent per year in India, what is its

contribution to the country’s GDP growth

with a 25 per cent contribution of the

industrial sector to GDP?

a. 3 per cent

b. 2.5 per cent

c. 2 per cent

d. 1.5 per cent

88. The decadal population growth rate in

India during 1991-2001 was about

a. 19 per cent

b. 21 per cent

c. 24 per cent

d. 25 per cent

89. The fourth Five-year Plan

a. First annual Plan

b. First Annual Plan

c. Plan holiday of three years following

the Third Five-year Plan

d. India-China War in 1962

90. Which one of the following s NOT

correctly matched?

a. Rural credit : NABARD

b. industrial finance: SIDBI

c. Rural poverty: SJSRY

d. Disguised unemployment: Subsistence


91. Consider the following statements:
1. Interest received by the central
government on house-building loans
given to the government employees is
a transfer receipt.
2. payments made by a farmer to the
labourers for ploughing the land is an
intermediate consumption
3. Interest paid by a farmer to a
cooperative society is a factor payment
Which of the above statements is/are
correct?
a. 3 alone
b. 1 and 2
c. 1 and 3
d. 1, 2 and 3
92. The Approach Paper of the Tenth fiveyear
Plan of India targets a decline in the
parity ratio over the plan period to
a. 20 per cent
b. 15 per cent
c. 1 and 3
d. 1, 2 and 3
93. Match List I with List II and select the
correct answer:
List I
A. New Economic Policy
B. Monetary Policy
C. trade Policy
D. fiscal Policy
List II
1. Controlling bank credit
2. Deficits and debt management
3. Globalization Liberalization
4. Liberalization
Codes:
A B C D
a. 4 1 3 2
b. 4 2 3 1
c. 4 2 3 1
d. 3 1 4 2
94. In the Indian context, which one of the
following pairs is NOT correctly matched?
a. Tax evasion : Parallel economy
b. High-powereed money: RBI
c. Female work participation rate:
Disinvestment
d. Privatisation: New economic policy
95. In the nineteenth century, the British
administration in India aimed at promoting
cultivation of
a. commercial crops and agricultural
exports
b. commercial crops and agricultural
imports
c. commercial crops and industrial
exports
d. food and exports of commercial crops.
96. What was approximately the real growth
rate of agriculture and allied services (at
factor cost) from 1992 – 93 to 2000-01?
a. 3.9 per cent
b. 3.3 per cent
c. 5.0 per cent
d. 9.6 per cent
97. The prevailing strategy of irrigation in
India emphasizes
a. intensive exploitation of ground water
b. conjunctive use of surface and ground
water
c. multipurpose river valley projects
d. Exclusive utilisation of canal water
98. Which one of the following has NOT been
a part of land reforms programme in India?
a. imposition of land revenue
b. Abolition of intermediaries
c. Ceiling on land holdings
d. Tenancy reforms
99. The correct sequence of the emergency of
the following institutions in the rural credit
sphere in India is
a. Commercial Banks, cooperative
Societies, RRBs
b. Cooperative Societies, RRBs,
Commercial Banks
c. Cooperative societies,
CommercialBanks, RRBs
d. RRBs, cooperative Societies;
commercial banks
100. Consider the following schemes under the
Ministry of Rural Development
1. Swarnajaynti Gram Swarozgar Yojana
is a credit-cum-subsidy programme
wherein credit is the critical
component and subsidy is an enabling
element.
2. In Sampoorna Grameen Rozgar
Yojana, all the funds are earmarked
direct to Panchayats
3. Food for work Programme is for the
benefit of calamity-affected States
Which of the above statements are correct?
a. 1 and 3
b. 2 and 3
c. 1 and 2
d. 1, 2 and 3
101. Consider the following statements:
11 of 12
1. Exployer’s contribution to social
security schemes is a part of wages and
salaries in cash and kind
2. The profits of Indian banks operating
in foreign countries are a part of of
operating surplus of the banks located
in a India
Which of the above statements is/are
correct?
a. 1, 2 and 3
b. 1 and 2
c. 3 alone
d. 1 alone
102. Which one of the following is NOT an
invisible item of the current account of
India’s balance of payments?
a. Royalty payments
b. Capital inflows
c. Software service exports
d. Private transfer
103. Which one of the following is NOT
included in the foreign-exchange reserves
of India?
a. Foreign-currency assets held by the
RBI
b. gold holding of the RBI
c. Silver holding of the RBI
d. SDRs
104. India Millenium Deposits were floated in
October-November 2000 by
a. the Reserve Bank of India
b. the Union Ministry of Finance
c. the State Bank of India
d. all State governments
105. Consider the following statements:
1. pledge gold to get foreign exchange
loans
2. physically transfer gold to the lender
country
3. establish full convertibility of the rupee
4. sell Resurgent India Bonds
Which of the above statements are correct?
a. 1 and 2
b. 2 and 3
c. 3 and 4
d. 1, 2, 3 and 4

106. Which one of the following sources
provides the large share of India’s external
debt?
a. IMF
b. USA
c. UK
d. JAPAN
107. Consider the following statements:
1. The Fourth Economic Census was
conducted during 1998-99.
2. economic Census has since been
dilinked from the population Census.
3. Out of a total of 29.8 million
enterprises, less than 70% pertain to
non-agricultural sector
Which of the above statements is/are
correct?
a. 1 alone
b. 1 and 2
c. 2 and 3
d. 1, 2 and 3
108. which one of the following series of
consumer price index is NOT used in
India for monitoring the movement in
retail prices?
a. Consumer price index for urban nonmanual
employees
b. General consumer price index
c. Consumer price index for industrial
workers
d. Consumer price index for agricultural
labourers
109. Non-performing assets of Commercial
Banks mean their loans
a. fetching very low rate of interests
b. for which interest /installment has
remained unpaid well after due date
c. which have not been disbursed at all
d. given to sick industrial units
110. What is the correct sequence of
nationalization of the following
institutions?
1. State Bank of India
2. bank of Baroda
3. Reserve Bank of India
Select the correct answer using the codes
given below:
a. 3, 2, 1
b. 3, 1, 2
c. 2, 3, 1
d. 2, 1, 3
111. Which one of the following is NOT a
source of the State tax revenue?
a. Land revenue
b. Motor Vehicles tax
c. entertainment tax
d. Corporate tax
12 of 12
112. The receipts from disinvestment of publicsector
under-takings are shown under
which one of the following sub-heads in
the budget of the government of India?
a. Revenue receipts
b. Non-tax revenue receipts
c. Non-debt capital receipts
d. Debt capital receipts
113. The revenue deficit of the Central
government as percentage of GDP in the
1990s was
a. less than 2 per cent
b. between 2 and per cent
c. between 4 and 8 per cent
d. more than 8 per cent
114. Assertion (A): Real rate of interest is better
indicator of returns of saving than nominal
rate of interest.
Reason (R): the real rate of interest is
estimated after removing the effect of the
expected rate of inflation.
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
115. Assertion (A): If the monopolist faces
identical demand curves for his
commodity in tow separate markets, by
practicing their degree price
discrimination, he cannot increase his TR
and total profits.
Reason (R): As the marginal revenue
curve are identical when the demand
curves in the tow markets are the same, the
monopolist will not charge different prices
in each market to maximize profits.
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
116. Assertion (A): Non-economic factors play
an important role in the process of
economic development.
Reason (R): Accumulation of capital takes
the form of human capital formation also.
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
117. Assertion (A): Per capita income figures
are poor tools of ordinal ranking of
countries with respect to the real well
being.
Reason (A): A good portion of the national
income in poor countries is unreported.
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
118. Assertion (A): The open-economy
Keynesian multiplier is less than the
closed-economy Keynesian multiplier.
Reason (R): The marginal propensity to
import is always greater than the marginal
propensity to consume.
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
119. Assertion (A): Intellectual property rights
were brought into the Uruguay Round
Trade Negotiations.
Reason (R): International trade restrictions
can be used to discourage the violation of
intellectual property rights.
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
120. Assertion (A): India’s Second Five-Year
Plan was based on an outward-looking
strategy of development.
Reason (A): the Second Five-Year Plan
was based on the Mahalanobis model.
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