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27. If the elasticity of demand for a good is greater than elasticity of supply for the good, then : (A) The burden of tax on buyers would be higher than that on sellers (B) The burden of tax on buyers would be lower than that on sellers (9 The burden of tax on buyers would be equal to that on sellers (D) Incidence cannot be shifted 28. When Marginal propensity to consume is 0.75, the value of the balanced budget multiplier is : (A) 1 (B) 2 (9 3 (D) 29. Consider the following statements and select the correct code : Assertion (A): A rise in income terms of trade only indicates that the country can obtain a larger volume of imports from the sale of exports. Reason (R) : A change in income terms of trade index cannot be interpreted as a measure of gain from trade. Codes: (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) (9 Statement (A) is true but (R) is false (D) Statement (A) is false, but (R) is true 30. According to Leontief's study : (A) USA's exports consisted of capital intensive goods (B) USA's exports consisted of labour intensive goods USA's imports consisted of labour intensive goods (D) None of the above Consider the following statements and select the correct code : 31. According to the theory of Optimum tariff : () The higher a country's share of foreign trade, the larger is the scope for its optimal tariffs. (ii) Larger the charge in relative prices on demand and supply, lower the country should set its optimal tariff If second country's price elasticity is high, the first country will not gain much by changing its tariff (iv) As long as the foreign country's offer curve elasticity is less than or equal to unity, the home country can improve or increase tariff Codes: (A) (1) and (ii) are correct (1), (ii) and (iil) are correct 19 (1), (iii) and (iv) are correct All the four are correct 32. Match the following and select the correct code : Group - I Group - II (a) Centre- periphery thesis Marshall (b) Factor proportion theorem (ii) Heckscher-Ohlin (c) Reciprocal demand (iii) Raul Prebisch (d) Vent for surplus theory (iv) Ellsework (v) J. Viner Codes:21. Match the following and select the correct answer from the codes given below : Group -I Group - II (a) Increase in potential GNP () X - inefficiency (b) Output per unit of input Balanced growth (c) Production at a point inside Economic growth production possibility frontier (d) Development through expansion (iv) Allocation inefficiency of all sectors of the economy (v) Productivity Codes: (2) (b) (d) (iii) (iii) (iv) (i) (iv) ( v ) 22. The following is a list of activities in an economy : Allocation Production (iii) Distribution (iv) Stabilization Which one of the above falls in the domain of government according to Musgrave : (A) (1) and (ii) (B) (1). (i) and (iii) (9) (). (ii) and (iv) (D) All the four 23. The shape of Laffer Curve is: (A) U-shaped (B) Inverted U-shaped (C) L-shaped (D) J-shaped 24. Public good is NOT characterised by : (A) Non-rivalness (B) Non-excludability (9 Contestability (D) Free-riding Consider the following statements and select the correct answer from the codes given below : 25. Assertion (A): National defence is a public good Reason (R) : People want to be defended against external aggression Codes: (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) (9 (A) is true but (R) is false (D) (A) is false but (R) is true 26. Match the following and select correct answer from the codes given below : Group - I Group - II (a) Revenue deficit () Government Borrowing from the RBI (b) Fiscal deficit Revenue expenditure minus Revenue receipts Primary deficit Fiscal deficit minus interest payments (d) Monetized deficit (iv) Total expenditure minus non-debt receipts. Codes: 3101315. Match the following and select the correct answer from the codes given below : Group - 1 Group - II (a) Asian Drama A.K. Sen (b) Choice of technique (ii) W.W. Rostow (c) Stages of Economic Growth (iii) Gunnar Myrdal (d) Strategy of Economic Development (iv) A.O. Hirschman (v) Leibenstein Codes: (a) (b) (C) (d) (A) (1i) (iv) (mii) (B) (iii) () (ii) (iv) (9 (1i) (iii) (iv) (D) (Hii) (i1) 16. Point - out the correct order in which the following measures of development were introduced : (A) Per-capita Income, HDI, PQLI (B) POLI, HDI, Per-capita Income (9) HDI, Per-capita Income, PQLI (D) Per-capita Income, PQLI, HDI 17. Which of the following equation satisfies the condition of stable growth in Harrod-Domar model : ) Actual growth rate = Warranted rate of growth (B) Actual growth rate = Natural rate of growth (9) Warranted rate of growth = Natural rate of growth (D) Actual rate of growth = Warranted rate of growth = Natural rate of growth 18. Which is NOT a correctexplanation for the need of social cost - benefit approach : (A) There is a divergence between private benefits and public benefit (B) There is a divergence between private cost and social cost (9 Market prices do not reflect opportunity cost of factors (D) Both public and private sectors coexist in the economy. 19. Consumption sub - model was introduced in Indian Planning for the first time in preparing which plan : (A) Third Plan (B) Fourth Plan (C) Fifth Plan (D) Sixth Plan 20. Consider the following statements and select correct answer from the code given below: Assertion (A) : Free trade among nations will increase world output and income Reason (R) : Less developed countries do not share equally in the gains from trade. Code : (A) Both (A) and (R) are correct and (R) is the reason for (A) (B) Both (A) and (R) are correct but (R) is not the reason for (A) (9) Statement (A) is correct but (R) is wrong (D) Statement (R) is correct but (A) is wrong7. The 'core' of an economy contains : (A) All Pareto optimal allocations (B) All Competitive allocations (9) All Pareto improving allocations of the initial endowments (D) All the feasible allocations 8. Demand for consumer durables and human capital forms part of the consumption demand model developed by which economist ? (A) Friedman (B) Tobin (9) Rosenstein Rodan (D) Baumol 9. Money multiplier determines : (A) Total supply of money in the economy (B) High powered money (9) Components of money supply (D) Employment and output in the economy 10. Match the items in Group - I with those of Group - II and select the correct answer from the codes given below : Group - I Group - II (a) MV = PT () Marshall (b) MV = k PY Friedman (c ) MV = f (r, y,w) Fisher (d) Md 2bT P (iv) Baumol (v) Ando Codes: (a) (b) (c) (d) (A) (iv) (iii) (i1) () (B) (ii) (iii) (iv) (9 (iv) (iii) (D) (iv) 11. According to Friedman, the consumption of a household depends on : (A) Transitory Income (B) Permanent Income (9) Both permanent and transitory Incomes (D) Relative Income 12. Consider the following statements and select the right answer from the code given below ; Assertion (A) : At lower rate of interest, there is greater inducement to invest, according to Keynes Reasoning (R) : At lower rate of interest, supply price of capital is low Codes: (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) (9) (A) is true, but (R) is false (D) (A) is false, but (R) is true. 13. What is the shape of the long - run Phillips curve ? (A) Horizontal Straight line (B) Vertical Straight line (9) Upward Sloping (D) Downward Sloping 14. Which of the following does NOT affect the volume of money supply in the economy : (A) Household cash - holdings (B) Bank's deposits with the Central Bank (9) Bank's cash Holdings (D) The cash - reserve ratio1. The laws of returns to scale assume : (A) Technique of production is unchanged (B) All units of factors are homogenious (9) Returns are measured in physical terms (D) All of the above 2. Payment of interest as a factor reward is explained by : (A) Productivity Theory (B) Abstinence Theory (9) Time Preference theory (D) All of the above 3. In the light of the Revealed Preference Theory, consider the following axioms, and select the right answer from the code given below : (a) Rationality (b) Consistency (c) Transitivity (d) Non - satiation Code : (A) (a) and (b) are correct (B) All the four axioms are correct () (a) and (c) are correct (D) (a), (b), and (c) are correct 4. Match the items in group- I with those of Group - II and select the correct answer form the code given below : Group - I Group - II (a) Kinked Demand curve Baumol (b) Full cost pricing (ii) Bain (c) Sales maximisation (iii) Sweezy Limit pricing model Giv ) Hall & Hitch (v) Modigliani Codes: (a) (A) (iii) (B) (1i) (9) (iv) (D) (iv) (v) 5. Starting from the earliest, arrange the following concepts in terms of their development in Demand Theory : Revealed Preference (ii) Neumann and Morgenstern utility Theory (iii) Ordinal utility (iv) Cardinal utility Codes: (A) (iii) (iv) (ii) (B) (iv) (iii) (ii) (9 (ii) (iii) (iv) (D) (iv) (iii) 6. The notion of production function implies: (A) Economic Efficiency (B) Technical Efficiency (9 Allocation Efficiency (D) All of the above
