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. "Trickle down" strategy implies (A) growing GNP taking care of poverty. (B) reduction in the income of the upper class by deliberate redistribution. (C) direct achievement of better nourishment, health, education, etc. instead of growth of GNP first. (D) to target a particular sector of economy for betterment. 26. What is the correct sequence of the following approaches to development in terms of their chronological emergency ? 1. Basic needs approach 2. Per capita income approach 3. Human Development Index approach Choose the correct answer from the codes given below : Codes : (A) 1.2, 3 (B) 2, 1.3 (C) 2. 3, 1 (D) 1. 3.2 27. Choose the correct statements for economic development and answer from the code below : Statements : I. Continuous process II. Short-term process III. Long-term process Codes : (A) II only (B) I and III (C) III only (D) I and II 28. Which of the following economists are proponents of dependency theory of development ? Choose from the code below : I. Ragnar Nurkse II. Andre Gunther Frank III. Raul Prebisch IV. John Kenneth Galbraith Codes : (A) I, II and III are correct. (B) II and III are correct. (C) II, III and IV are correct. (D) III and IV are correct.20. Maastricht Treaty led to the creation of which one of the following ? (A) European Parliament (B) Euro (C) European Court of Justice (D) European Union 21. Assertion (A) : According to Mundell, "Imbalances in the balance of payments is caused by initial differences in unit factor costs." Reason (R) : Free movement of goods will correct the imbalance in the balance of payments of two countries. In the context of the two statements, which one of the following is correct ? Codes : (A) Both (A) and (R) are true and (R) is the correct explanation of (A). (B) Both (A) and (R) are true and (R) is not the correct explanation of (A). (C) (A) is true, but (R) is false. (D) (A) is false, but (R) is true. 22. The Stolper-Samuelson theorem postulates that the imposition of a tariff by a nation causes the real income of the nation's (A) abundant factor to rise (B) scarce factor to rise (C) scarce factor to fall (D) both (A) & (B) are possible 23. What is perspective planning ? (A) Overall appraisal of planning. (B) Review of planning in different fields. (C) Taking up past experience and reviewing the future in that light. (D) Planning for future so as to meet the long term requirement of development in the country. 24. Who formulated the 'People's Plan' for India in 1944 ? (A) J.L. Nehru (B) M.N. Roy (C) Subhas Chandra Bose (D) Mahatma Gandhi15. Which one of the following would be inconsistent with the Keynesian view about the effectiveness of monetary policy ? (A) Velocity of money is relatively stable. (B) The demand for money is unstable. (C) The demand for money is interest sensitive. (D) Investment demand is unstable. 16. Which of the following statement is true ? (A) Sporadic dumping is selling of goods at a low price in the foreign market to get rid of the inventory stocks. (B) Predatory dumping is destroying of competitors even at a loss initially and then, after eliminating of competitors, selling product at a high price. (C) Persistent dumping is selling a product at a lower price in foreign markets due to differences in elasticity of demand at home and in the foreign market. (D) All the above. 17. According to Comparative Advantage Theory, International Trade will not take place if (A) one country is efficient in the production of both the products. (B) one country is inefficient in the production of both the products. (C) opportunity costs of the two products are same in both the countries. (D) None of the above. 18. Imposition of tariff will lead to (A) Deterioration in terms of trade (B) Improvement in terms of trade (C) No effect on terms of trade (D) None of the above 19. Under a freely exchange rate system, a deficit in a Nation's Balance of Payments Account is automatically corrected by (A) a depreciation of its currency (B) an appreciation of its currency (C) domestic inflation (D) deflation and rise in National income10. The classical theory of interest postulates that both savings and investments are a function of (A) the level of National income (B) the level of employment and output (C) monetary and fiscal policy (D) rate of interest 11. The relative income hypothesis of Duesenberry suggests that as income increases, consumption function curve shifts above and therefore, (A) Average propensity to consume rises. (B) Average propensity to consume falls. (C) Average propensity to consume remains constant. (D) Average propensity to consume is equal to 1. 12. Who among the following said, "Inflation is everywhere and always a monetary phenomenon" ? (A) James Tobin (B) John M. Keynes (C) Milton Friedman (D) Anna J. Schwartz 13. Accelerator is most closely related to (A) interest rate (B) inventories (C) idle capacity (D) induced investment 14. Match List - I and List - II and select the correct answer from the codes given below : List - I List - II Concept Economist a. Liquidity trap 1. Milton Friedman b. Demonstration Effect 2. A.C. Pigou c. Permanent Income Hypothesis 3. J. Duesenberry d. Wealth Effect 4. J.M. Keynes Codes : (A) (B) 2 (C) 2 (D) 36. Consider the following statements regarding Edgeworth Duopoly model : It takes as given output decision of rival. II. It takes as given price decision of rival. III. It is an explanation of price rigidity. Of these, the correct answer is : (A) Only Statement I is true. (B) Both I & II are true. (C) Both II & III are true. (D) Only III is true. 7. Public goods are characterised by 1. Collective consumption 2. Divisibility 3. Non-exclusion 4. Rival consumption Select the correct answer from the code given below : Codes : (A) 1 & 2 are correct. (B) 1 & 3 are correct. (C) 1 & 4 are correct. (D) 2 & 4 are correct. . Among the following what causes market failure ? 1. Externality 2. Asymmetry of information 3. Perfect competition Choose the correct answer from the code given below : Codes : (A) 1, 2 & 3 are correct. (B) Only 1 is correct. (C) 1 & 2 are correct. (D) 2 & 3 are correct. 9. Assuming wage-price flexibility, the classical economists asserted that a decline in money wages and price would lead to (A) Unemployment (B) Deflation (C) High level of employment and output (D) Unemployment and decline in output