Economics basics

38. Arrange the following in 40. Match the items given in List - I with chronological order : those in List - 11 : I. The Indirect Tax Enquiry List - I List - II Committee (Jha Committee) 1. Optimal 1. Charles Tiebout Income II. Tax Reforms Committee Taxation (Chelliah Committee) II. An Economic 2. Peter A. Phyrr III. Taxation Enquiry Commission Theory of Politics (Matthur Commission) III. Local Public 3. F. Ramsey IV. The Direct Tax Enquiry Goods Committee (Wanchoo Committee) IV.Zero Base 4. Anthony Downs Codes : Budgeting Codes : (A) III, II, IV, I III IV (B) III, I, IV, II (A) 3 2 (C) II, III, I, IV (B) (C) (D) III, IV, I, II (D) 4 2 39. Which of the following are relevant 41. Which of the following is tantamount in Zero Base Budgeting ? to absence of taxation ? (A) Shifting of the tax I. Each item of expenditure is (B) Tax transformation challenged in pre-budget (C) Evasion of tax review. (D) Tax capitalisation II. No minimum level of expenditure is allowed to be 42. Which of the following tax is within taken as given. the jurisdiction of States as III. Expenditure of each item is enumerated in List - II of the increased marginally. Schedule VII of the Constitution of India ? IV. Most item of expenditure is (A) Taxes on Railway freights and taken for granted when budget fares. is prepared for the next year. (B) Taxes on sale and purchase of Codes : newspapers and on advertisement therein. (A) I and III are correct. (C) Rate of stamp duty in respect (B) 1, II and IV are correct. of certain financial documents. (D) Taxes on luxuries, including (C) I and II are correct. entertainments, betting and (D) 1, III and IV are correct. gambling. Paper-II 12 J-01-1332. According to the Rybczynski 35. Which of the following is true with theorem, the growth of only one respect to the monetary approach to factor at constant relative commodity the balance of payments ? prices, leads to an absolute expansion (A) It views the balance of in the output of payments as an essentially (A) both commodities monetary phenomenon. (B) the commodity using the (B) A balance of payments deficit growing factor intensively results from an excess demand (C) the commodity using the non- of money in the nation. growing factor intensively (C) A balance of payments surplus (D) any of the above results from an excess supply of money. 33. The exchange rate is kept the same in (D) Balance of payments all parts of the market by disequilibrium are not (A) exchange arbitrage automatically corrected in the (B) interest arbitrage long run. (C) hedging (D) speculation 36. When a nation imposes an import tariff, the nation's offer curve will 34. Which are relevant (A) shift away from the axis conditions assumed by the factor price measuring its export equalization theorem ? commodity. 1. The countries are characterised (B) shift away from the axis by different factor endowments. measuring its import commodity. II. The countries are characterised (C) not shift. by different production functions. (D) any of the above is possible. III. The industries are characterised by different factor intensities. 37. If the international terms of trade IV. Each country will export the settle at a level that is between each commodity which uses its country's opportunity cost then abundant factor relatively (A) there is no basis for gainful intensively. trade for either country. Codes : (B) both countries gain from trade. (A) 1, II, III, IV (C) only one country gains from (B) 1, III, IV trade. (C) 1, II, IV (D) one country gains and the other (D) 1, III, II country loses from trade. Paper-II 10 J-01-1323. Match the items in the List - I with 27. Provide the correct answer about the items in List - II : desired growth target of the List - 1 List - II manufacturing sector in the medium 1. Critical Minimum 1. R.F. Kahn term as per the National Effort Thesis Manufacturing Policy of India. 11. Knife-edge 2. Rosentein- (A) 6-8 percent Equilibrium Rodan (B) 8- 10 percent III. Bastard Golden 3. Leibenstein (C) 10- 12 percent Age (D) 12 - 14 percent IV. Big Push Theory 4. Harrod Codes : 28. Which of the following countries 11 III IV have better Human Development (A) 3 N Index (HDI) as per the HDR 2011 ? (B) 1. Sri Lanka (C) II. Pakistan (D) III. Kenya IV. Egypt 24. Which years in India have been the Codes : best and the worst in terms of growth (A) Sri Lanka and Egypt rate of national income ? (B) Sri Lanka and Kenya (A) 2007-08 and 1997-98 (C) Pakistan and Sri Lanka (B) 2006-07 and 1966-67 (D) Pakistan and Kenya (C) 1988-89 and 1979-80 (D) 2003-04 and 1957-58 29. What was the amount of outlay under MGNREGA in 2011-12 by the 25. Rank the States in ascending order of Government of India ? the crude birth rate in the recent (A) M and M' - M is surplus (C) P. Samuelson value. (D) J.M. Keynes Reason (R) : The main cause of this surplus value is raw materials, 17. The concept of vicious circle of machines, etc. poverty is associated with Codes : (A) J.M. Keynes (A) (A) is wrong but (R) is correct. (B) Ragner Nurkse (B) (A) is correct but (R) is wrong. (C) Karl Marx (C) Both (A) and (R) are correct. (D) J.S. Mill (D) Both (A) and (R) are wrong 18. Inverted 'U' shaped income 22. Match the items in the List - I with distribution hypothesis is associated items in List - II : with List - 1 List - II (A) J.B. Clark I. Structural view of 1. Classical (B) David Ricardo Underdevelopment Economists (C) Simon Kuznets II. Laissez-faire Policy 2. Hollis (D) Adam Smith Chenery III. Departmental 3. Steady State Scheme of Growth 19. Components of HDI are Expanded 1. Longevity Reproduction II. Infant mortality IV. Golden Age of 4. Karl Marx III. Educational attainment Accumulation IV. Decent standard of living Codes : Codes : II III IV (A) 1, II and III are correct. (A) - W (B) 11, III and IV are correct. (B) (C) 11, 1, and IV are correct. (C) (D) 1, III and IV are correct. (D) N Paper-II J-01-138. The equilibrium in a market is 12. Match the theory/criterion of incomplete with increasing returns to investment determination as given scale only in the case of below in List - II with their (A) imperfectly competitive market propounders given below in List - I : (B) monopolistic market List - 1 List - II (C) perfectly competitive market 1. Dale a. Q-Theory (D) none of the above Jorgenson 11. J.M. Keynes b. Neo-classical If 1 = Involuntary unemployment; Theory 9. 2 Disguised unemployment; III. James Cohin c. Accelerator = Frictional unemployment; and Theory 4 = Structural unemployment, then IV.James Clark d. Present Value full employment is consistent with Criterion Codes : (A) 1 &2 (B) 2& 3 III (C) 3&4 (D) 1 &4 II IV (A) (B) 10. In Keynes' equation of absolute (C) b income hypothesis, C = a + by, (D) C a d where C = Consumption expenditure; 13. Assertion (A) : In liquidity trap, the do = Consumption expenditure when demand for money is perfectly income (y) is zero; and b = Marginal interest elastic. Propensity to Consume (MPC), then Reason (R) : Because in this which of the following statements is situation, all the investors false ? expect the market rate of (A) MPC is independent of the interest to rise towards the level of income. natural rate of interest. (B) MPC is dependent on the level Codes : of income. (A) (A) and (R) both are correct (C) APC falls as income rises. and (R) is the correct (D) APC > MPC. explanation of (A). (B) (A) and (R) both are correct, 11. Which of the following statements is but (R) is not the correct false ? explanation of (A). (A) The balanced budget multiplier (C) (A) is correct, but (R) is is unity when taxes are lump incorrect. sum taxes. (D) Both (A) and (R) are incorrect. (B) The balanced budget multiplier 14. The rate of net investment spending is less than unity when taxes per time period depends on steepness are ad valorem taxes. of the downword slope of (C) Tax multiplier is less than (A) Marginal efficiency of government expenditure Investment Schedule multiplier. (B) Marginal efficiency of Capital (D) Tax multiplier is more than Schedule government expenditure ) LM-Schedule multiplier. (D) IS-Schedule Paper-II J-01-13ECONOMICS Paper - II Note : This paper contains fifty (50) objective type questions of two (2) marks each. All questions are compulsory. 1. Under Cournot Model of Duopoly, 5. If MP /MP does not change with each duopolist will produce any proportionate change in labour (A) half the output (B) one-fourth of the output and capital then the production one-sixth of the output function is (C) (D) one-third of the total output (A) Linear (B) Non-linear 2. As long as the substitution effect (C) Homogeneous dominates the income effect, the (D) Homothetic labour supply curve is (A) negatively sloped 6. Match the items in the List - I with (B) positively sloped items in List - II. Select the correct bend backward answer from the code given below : (D) shifting towards left List - I List - II 3. The distinguishing characteristics of 1. Agency 1. O.E. Williamson monopolistic competition are Theory of I. Product differentiation Firm II. Non-price competition II. X- 2. M.C. Jensen and III. Large number of firms and inefficiency W.J. Meckling freedom to entry and exit III. The Utility 3. Wilfredo Pareto IV. Firms are interdependent Maximisation Codes : (A) I & III are correct. Model ) 1, II and IV are correct. IV.Edgeworth 4. Harvey (C) 1, II and III are correct. box diagram Leibenstein (D) 1, III and IV are correct. first used by Codes : 4. Assertion (A) : Monopoly is Pareto II III IV inefficient. (A) 3 Reason (R) : It would be possible to change the allocation of (B) resources to make the amount (C) 3 (D) N of income he would be prepared to pay in exchange of the reduction in price. 7. At the point of tangency between Codes : short- run average total cost and long- (A) Both (A) and (R) are correct run average cost, the short-run and (R) is the correct marginal cost explanation of (A). (A) greater than long-run marginal (B) (A) is correct, but (R) is not cost correct. (C) Both (A) and (R) are correct, (B) less than long-run marginal but (R) is incorrect explanation cost of (A). (C) is far above long-run marginal (D) (R) is correct, but (A) is cost incorrect. (D) equals long-run marginal cost Paper-II 2 J-01-13