ECONOMICS

Paper – II
Note : This paper contains fifty (50) objective type questions of two (2) marks each. All
questions are compulsory.
1. The cost incurred by the firm in 5. Put the following in chronological
hiring labour is called as order on the basis of development :
(A) Explicit Cost i. Law of Demand
(B) Implicit Cost ii. Revealed Preference Analysis
(C) Marginal Cost iii. Indifference Curve Analysis
(D) Total Cost iv. Law of Diminishing Marginal
2. The locus of Pareto Optimality in Utility
Production and Consumption is given by (A) i iii ii iv
(A) The Social Welfare Function (B) i iv iii ii
(B) The Utility Possibility Curve (C) i ii iv iii
(C) The Transformation Curve (D) i iii iv ii
(D) The Grand Utility Possibility 6. If the monopolist incurs loss in the
Curve short run, then in the long run
3. List – I List – II a. he will go out of business
a. Tea and 1. Veblen goods b. he will stay in business
Coffee c. he will break even
b. Car and 2. Substitutes d. any of the above is possible
Petrol (A) a and b (B) a and c
c. Gold and 3. Giffen goods (C) a only (D) d only
Diamonds 7. The condition of Pareto Optimality
d. Ragi and 4. Complementary holds correct under
Bajra (A) Perfect Competition
Codes : (B) Monopolistic Competition
a b c d (C) Oligopoly
(A) 2 1 3 4 (D) Monopoly
(B) 2 4 1 3
(C) 4 1 2 3 8. Assertion (A) : Compared to the
(D) 4 3 1 2 individual supply curve, the
aggregate supply curve is more
4. Assertion (A) : In the short run elastic.
under perfect competition, Reason (R) : There is the
given the market demand and possibility of moving between
market supply the industry is in being out of the labour force and
equilibrium at that price which being in the labour force.
clears the market. Choose amongst the following the
Reason (R) : In the long run all the correct answer.
firms in the industry earn profit. Codes :
Codes : (A) (A) is correct, but (R) is not the
(A) Both (A) and (R) are true and (R) correct explanation of (A).
is the correct explanation of (A). (B) (A) is correct and (R) is the
(B) Both (A) and (R) are true, but correct explanation of (A).
(R) is not the correct (C) (A) is correct, but (R) is
explanation of (A). incorrect.
(C) (A) is true, but (R) is false. (D) (A) is incorrect, but (R) is
(D) (A) is false, but (R) is true. correct.
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9. Assuming life cycle hypothesis, let a 11. The negative relationship between
person starts working when he is 20 the gap between actual GDP and its
years old, works until the age of 60 trend value and the difference
and expects to die at the age of 70. If between actual unemployment rate
this person earns, say ` 1.50 lac and its equilibrium value is called
annually when he is 20-30 years, ` 2 (A) The Aggregate Supply Curve
lac annually when he is 30-45 years, (B) The Phillips Curve
and ` 3 lac annually when he is 40- (C) The Natural Rate of
60 years, then his life time average Unemployment Hypothesis
propensity to consume is
(D) Okun’s Law
(A) 0.60
(B) 0.70
12. It is often true that as the economy
(C) 0.80 begins to recover from a recession,
(D) 0.90 the unemployment rate rises because
(A) as the economy initially
10. With reference to demand for money, recovers from a recession the
match List – I with List – II : demand for goods and services
falls, so the demand for
List – I List – II
workers falls.
a. Demand for 1. J.M.
(B) as the economy begins to
money is stable Keynes
recover from a recession,
b. Liquidity 2. W. workers who were previously
Preference as Baumol discouraged about their
behaviour chances of finding a job begin
towards risk to look for work again.
c. Inventory 3. James (C) as the economy begins to
Theoretic Tobin recover from a recession
Approach because of the errors in the way
d. No portfolio 4. Milton the data are collected.
diversification Friedman (D) as the economy initially
Codes : recovers from a recession,
a b c d firms do not immediately
increase the number of workers
(A) 4 3 1 2
they hire. Firms wait to hire
(B) 3 4 1 2 more individuals until they are
(C) 2 1 3 4 convinced that the recovery is
(D) 4 3 2 1 strong.
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13. When additional government 15. The premise, that benefit of
expenditure is financed by selling economic growth will reach all
government securities, then what will sections of population is called
be the nature of crowding out effect, (A) Trickle up effect
given in List – I in the context of the (B) Trickle down effect
situation given in List – II ?
(C) Take-off effect
List – I List – II
(D) Backlash effect
Crowding out Situation
effect
a. Full 1. Keynesian 16. In whose growth model,
Range entrepreneur’s significance is pivotal ?
b. Partial 2. Classical (A) Keynes
Range (B) Schumpeter
c. Nil 3. Intermediate (C) Harrod
Range (D) Domar
Codes :
a b c
17. The classical model of economic
(A) 2 3 1
development emphasises
(B) 3 1 2
(A) Laissez-Faire Policy
(C) 1 3 2
(B) Capital Accumulation
(D) 1 2 3
(C) Both (A) and (B)
(D) None of these
14. Match items given in List – I with
those in List – II :
List – I List – II 18. Which one of the following pairs is
a. Equation of 1. J.M. not correctly matched ?
Exchange Keynes Author Book
b. Cash Balances 2. Irving (A) Simon Asian Drama
Approach Fisher Kuznets
c. Regressive 3. W.J. (B) J. Robinson Essays in the
Expectation Baumol Theory of
model of Economic
Demand for Growth
Money (C) Karl Marx Das Kapital
d. Square Root 4. A.C. (D) A.W. Lewis Theory of
Formula of Pigou Economic
Demand for and Growth
Money Alfred
Marshall
Codes : 19. What does change in economic
a b c d growth ?
(A) 2 4 1 3 (A) Structure of economy
(B) 3 2 4 1 (B) Mindsets of people
(C) 4 3 1 2 (C) National Income
(D) 1 3 2 4 (D) None of these
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20. Which States/U.Ts. have been placed 24. Monetised deficit means
at first three places in Gender (A) Fiscal deficit less interest
Development Index List 2006 made payments
by the Government of India ?
(B) Government expenditure which
(A) Kerala, Chandigarh, Goa
is financed through the sale of
(B) Kerala, Goa, Chandigarh
adhoc treasury bills.
(C) Chandigarh, Goa, Kerala
(C) Increase in RBI credit to
(D) Goa, Kerala, Chandigarh
Central Government.
(D) Fiscal deficit less loans and
21. Assertion (A) : There is no incentive
for a profit maximizing advances.
producer to supply the public
goods.
25. A proportionate increase in tax
Reason (R) : If he produces it he
revenue to a proportionate increase in
is unable to exclude people
from consuming it and hence the tax base is called
he cannot charge a price. (A) Elasticity of a tax
Codes : (B) Buoyancy of a tax
(A) (A) is true, but (R) is false. (C) Neutrality of a tax
(B) Both (A) and (R) are false.
(D) None of the above
(C) (A) is not correct, but (R) is
correct
(D) Both (A) and (R) are correct 26. ‘Vent for surplus approach’ is
and (R) is the correct applicable to
explanation of (A).
(A) Rich countries
(B) Underdeveloped countries
22. The distribution of the burden of
paying a tax is called (C) Oil exporting countries
(A) Sharing of tax burden (D) None of the above
(B) Shifting of the tax
(C) Incidence of a tax
27. According to monetary approach, a
(D) Tax capitalization revaluation of a nation’s currency
(A) increases the nation’s demand
23. Which one of the following is short for money.
period debt meant to meet current
needs, that is filling temporary gap in (B) increases the nation’s supply of
budgets ? money
(A) Funded debt (C) reduces the nation’s demand
(B) Unfunded debt for money
(C) Redeemable debt (D) reduces the nation’s supply of
(D) Irredeemable debt money
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28. The Bretton Woods System was 32. Plant load factor of thermal power
based on stations in India in recent years has
(A) a gold standard been around
(B) a flexible exchange rate system (A) 50 percent
(C) a gold exchange standard (B) 60 percent
(D) none of the above (C) 70 percent
29. The imposition of an import tariff by (D) 80 percent
a large nation
(A) usually improves the nation’s 33. Which of the following is not the part
terms of trade and increases the of National Telecom Policy (NTP)
volume of trade. 2012 in India ?
(B) worsens the nation’s terms of (A) Strive to create One-Nation-
trade but increases the volume One License across services
of trade and service areas.
(C) worsens the nation’s terms of (B) Achieve One Nation – Full
trade and reduces the volume Mobile number portability
of trade. (C) To work towards ‘Right to
(D) usually improves the nation’s Broadband’
terms of trade but reduces the (D) Recognize telecom as basic
volume of trade. goods industry
30. The value of foreign trade multiplier
will be high under the condition when 34. Percentage share of the
(A) marginal propensity to save is high manufacturing output of India in the
(B) marginal propensity to import world total is now
is high (A) 2.2 percent
(C) there is increase in exports (B) 3.9 percent
(D) marginal propensity to consume (C) 6.2 percent
domestic goods is high (D) 7.5 percent
31. Match the weight of different industry
groups between List-I & List-II : 35. India’s current account deficit in
List – I List – II Balance of Trade is mainly due to
a. Basic goods 1. 45.7 (a) Increasing imports of oil and
industries petroleum
b. Capital goods 2. 8.8 (b) Increasing imports of gold and
industries silver
c. Intermediate 3. 15.7 (c) Increasing imports of food
goods industries grains
d. Consumer goods 4. 29.8 (d) Increasing imports of iron and
industries steel
Codes :
Codes :
a b c d
(A) (a), (b) and (c)
(A) 1 2 3 4
(B) 2 4 3 1 (B) (a) and (c)
(C) 3 2 1 4 (C) (a) and (b)
(D) 1 3 4 2 (D) (a) and (d)
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36. The MRTP Act of 1969 has been 39. In which year the Kissan Credit Card
(A) replaced by Competition Act System was introduced ?
2002 (A) 1978
(B) merged in Industrial Policy Act (B) 1998
of 1978 (C) 1988
(C) replaced by Trade Union (D) 2008
(Amendment) Act 2001
(D) merged in Industrial Policy Act 40. Assertion (A) : PL-480 grants was
of 1991 used to import foodgrains.
Reason (R) : PL-480 grants
facility was granted by Japan.
37. In the context of agricultural Codes :
development the trickle down theory
(A) Both (A) and (R) are true and
has been interpreted to suggest that (R) is the correct explanation of
a. Growth in agriculture output (A).
without radical institutional (B) Both (A) and (R) are true and
reforms will reduce the (R) is not the correct
incidence of poverty. explanation of (A).
b. Growth in agriculture output (C) (A) is true, but (R) is false.
with radical institutional (D) (A) is false, but (R) is true.
reforms will reduce the
incidence of poverty 41. Productivity of groundnut is highest
c. Only radical institutional in
reforms can reduce the (A) U.S.A.
incidence of poverty. (B) Mexico
d. Only growth in agriculture (C) India
output will reduce incidence of (D) China
poverty.
(A) Both a and b 42. NAFED is a
(B) Both a and c (A) Company
(C) b only (B) Non-Government Organisation
(D) d only (C) Government Body
(D) Cooperative Organisation

38. As per the latest figures of the

43. Based on the SRS data for 2010 in
Ministry of Agriculture the per capita
India, which of the following seems
per day foodgrains availability is
to be incorrect ?
(A) 280 gm (A) TFR = 2.5
(B) 440 gm (B) CDR = 7.2
(C) 580 gm (C) IMR = 48.9
(D) 900 gm (D) CBR = 24.2
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44. Upto which census, synchronous de 47. Given the two regression lines
facto method was adopted in India estimated from given data as under :
wherein the census was conducted Y = 4 + 0.4X
throughout the country in a single
night ? X = –2 + 0.9Y
(A) 1901 (B) 1931 Then coefficient of correlation
(C) 1951 (D) 1971 between X and Y will be
45. Match the following : (A) 0.4
Group – I Group – II (B) 0.5
a. Type II error 1. P01 P10 = 1 (C) 0.6
b. Mean > Mode 2. Probability (D) 0.8
of not
rejecting H0
when it was 48. Which of the following satisfy time
not true reversal test but not factor reversal
c. Population is 3. Positively test ?
homogenous skewed (A) Laspeyre’s Index No.
distribution
d. Time Reversal 4. Simple (B) Fisher’s Index No.
Test random (C) Paasche’s Index No.
sampling (D) Marshall-Edgeworth Index No.
Codes :
a b c d
49. The value of 2 in a 3 5
(A) 2 3 4 1
contingency table is computed as 8.0.
(B) 3 1 2 4 The Null hypothesis of no
(C) 4 2 3 1 association will be tested at 5% level
(D) 1 2 3 4 of significance, if this value is less
than or equal to the value of 2 from
46. Assertion (A) : For normal the table at degrees of freedom :
distribution Mean = Median =
Mode. (A) 8
Reason (R) : Normal distribution (B) 6
is mesokurtic. (C) 4
Codes :
(A) Both (A) and (R) are correct (D) 3
and (R) is the correct
explanation of (A). 50. Which is a non-probability based
(B) Both (A) and (R) are correct
sampling method ?
but (R) is not the correct
explanation of (A). (A) Systematic Sampling
(C) (A) is correct, but (R) is (B) Stratified Random Sampling
incorrect. (C) Quota Sampling
(D) (A) is incorrect, but (R) is
correct. (D) Simple Random Sampling

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 Space For Rough Work

Paper-II 16 D-01-13