1. Which one of the following is not the assumption of indifference curve analysis

Weak ordering

Constant income

Perfect divisibility of goods

Ordinal nature of utility


2. The value of co-efficient of elasticity on a linear downward sloping demand curve varies because

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3. Arrange the following economists in chronological order in the context of their contribution to the theory of oligopoly.

(i) E. Stackelberg A. Cournot
(iii) J. Bertrand P. Sweezy

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4. Assertion In case of giffen goods rise in price will lead to a rise in demand while a fall in price will decrease its demand.

Reasoning Every price change can be broken into income effect and substitution effect.

Both and are correct and is the correct explanation of

Both and are correct and is not the correct explanation

is true but is false

is false but is true




5. Assertion Existence of public goods hinders achievement of pareto-optimality.
Reasoning The evaluation of marginal benefits from a public good differs across individuals.

Both and are true and is the correct explanation of

Both and are true but is not the correct explanation

is true but is false

is false but is true

6. Under perfect competition equilibrium in the long run is achieved when

AR=MR

LMC=MR

MR=LAC

Price=LMC


7. Which one of the following ratios represents rate of profit in the Marxian Theory of Distribution
CCS S

c/v



s/v



8. Assertion In an economy that is operating at less than full employment level, crowding out need not occur.
Reasoning Monetary authorities can provide an accommodating monetary policy that avoids the rise in interest rates with output expansion. Select the correct answer using the code given below

Both and are true and is the correct explanation.

Both and are true but is not the correct explanation


is true but is false


is false but is true

9. The sequence of operation of the transmission of a change in monetary policy is

Changes in real money supply

Adjustment in output

Adjustment in spending

Changes in interest rates and asset prices Select the correct answer according to the code.
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10. In IS-LM model, under usual Keynesian assumption, an increase in government spending will cause

Both income and rate of interest to rise


Income to rise and rate of interest to fall


Income to remain unchanged and rate of interest to fall


Income to rise and rate of interest to remain unchanged


11. The original Phillips curve postulates relation between two of the following

(i) Rate of unemployment

Level of unemployment


(iii) Rate of increase in money wages

Rate of increase in real wages

Choose the correct combination according to the code

Code

and

and

and

and


12. Assertion OKun's Law is a useful guide to macro economic policy.
Reasoning OKun's Law indicates how a particular growth target will affect the
unemployment rate over time.

Select the correct answer according to the code

Both(A) and are true and is the correct explanation.

Both and are true but is not the correct explanation.


is true but is false.


is false but is true.


13. When money supply increases, price level rises proportionately according to

Marshall

Fisher

Keynes

Cantillon

14. Investment demand in a Keynesian system is determined by

(i) Marginal efficiency of capital

Tax rates

(iii) Marginal efficiency of investment

Stock of capital

Select the correct answer according to the code

and


and


and


and


15. Which one of the following is NOT a sign of economic development

Changing structure of GDP in favour of industry


Larger share of GDP coming from primary sector


Larger capital inflows


Institutional changes in an economy.


16. Rate of real income growth in a country is annual percentage growth of

Rate of GDP growth at current price


GDP growth at factor cost at current prices


Rate of GDP growth at factor cost at constant prices


Rate of GDP growth at market prices


17. Consider the following statements
(i) Economic development which results in high level of GDP in present time.

(ii) A pattern of development that seeks to meet the needs of present without compromising the ability of future.

(iii) Development which ensures maximum welfare of present generation.

Development which takes into account environmental degradation.

Of the above, sustainable development includes

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and only


and only


and


and


18. Assertion Cumulative causation is an explanation of backwardness of developing nation. It is a hypothesis of geographical dualism.

Reasoning :Expansion in a favoured region has a backwash effect on other regions causing regional disparities.
Select the correct answer using the code

Code (A) Both and are true and is the correct explanation of


Both and are true but is not correct explanation of

is true but is false.

is false but is true.


19. Human Development Index prepared by UNDP is based on some of the following variables
(i) Life expectancy at birth

Health facilities

(iii) Per capita income adjusted by purchasing power
Literacy and enrolment percentage

Of the above variables


and are correct


and are correct


(C) only and are correct


and are correct


20. Which of the following is not the assumption of Solow's model of long run growth

(A) Saving ratio is constant


(B) prices and wages are constant


(C) Production function is linear homogeneous


(D) Labour and output not growing at same rate


21. The original interpretation of balanced growth relates to

(A) all sectors growing at the same rate

(B) equal amount of investment in all sectors

(C) absence of shortages or excesses

(D) large expansion of economic activities in all the areas



22. List-I includes names of some authors and List-II some theories/hypothesis related with these authors. Matching authors with their contribution select correct answer from the codes given below the lists

List.l List.ll
(Authors) (contribution)

(a) Rodan, R. Low level equilibrium trap


(b) Nelson, R. Critical minimum effort


(c) Hirschman, A Big push


(d) Leibenstein, H Unbalanced growth


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23. In investment criteria shadow prices are the prices

In black market parallel to controlled prices

Fixed by the government without a consideration of cost of production

Which reveal true scarcity value of goods and factor inputs.

At which goods and factors are not available


24. A Progressive Tax is one in which

(A) The tax payment as a percentage of income falls

(B) The tax payment as a percentage of income is constant

(C) The tax payment as a percentage of income increases

(D) There is no linkage between income and tax payment


25. One of the necessary conditions for correcting fiscal imbalance is

The real interest rate on public debt is equal to GDP growth rate

(B) The real interest rate on public debt is greater than GDP growth rate

(C) The real interest rate on public debt is lower than GDP growth rate

(D) None of the above


26. The 12th Finance Commission recommended, among other things, to raise the share of states in net proceeds of divisible pool of central tax to

25.1%

28.9%

30.5%

45.5%

27. The Non plan grants by the central government to the state governments in India are made on the recommendations of

(A) Ministry of Finance

(B) Finance Commission

B I

(D) Planning Commission


28. A transfer payment is a payment

(A) made by the government to its current workers.

made to people who are needy.

(C) For in-kind services provided to the government.

(D) For which no services or goods are rendered.


29. Which one of the following does not constitute a problem in Centre-State financial relations in India

(A) Problem of State Autonomy

(B) Neglect of Horizontal transfers

(C) Problem of Inter-State Disparities

(D) Suicide by farmers in certain States


30. An act of devaluation of a currency, other things being equal, will

(A) Increase the total quantum of the exports and reduce the total quantum of imports of the devaluing country


(B) Increase the total quantum of both exports and imports


(C) Decrease the total quantum of both imports and exports


(D) Decrease the total volume of exports and increase the total quantum of imports


31. India, at present, has full convertibility of rupee on

(A) Current Account

(B) Capital Account

(C) Both on Current and Capital Account

(D) None of the above

32. The value of Special Drawing Right at present is determined in the international market by

(A) The price of gold

(B) The value of US

(C) The average value of the basket of a set of convertible currencies

(D) Euro

33. The quantum of intra-regional trade among the countries of the world is explained by

Heckscher-Ohlin theory

Comparative cost theory

Both and

Theories based on imperfect competition

34. The income terms of trade of a country is defined by Dorrance as



Pm /Px100

Pm/Px xQ

Px/ Pm x Q

35. Which of the following is not a full-fledged member of the ASEAN group at present (2006)

Indonesia and Mynamar

Phillippines and Thailand

India and Pakistan

South Vietnam and Singapore


36. Match the years in the List-I with the events in List-II
List.l List.ll

1966 (i) Creation of SDR

1969 Collapse of the Bretton Woods System

1971 Devaluation of the rupee during S

1995 Creation of WTO
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(iii)



(iii)




37. Employment in the organised sector as a percentage of the total working force in 2003 accounted for

(A) Below 10% but greater than

(B) Below 15% but greater than 10%

(C) Below 20% but greater than 15%

(D) Below 25% but greater than 20%


38. In respect of GDI, India's rank in 2003 stood at

90

92

98

105

39. Minimum support price in the agricultural sector is undertaken to

(A) Prevent fall in the price in face of a glut in any given year

(B) Protect the interests of the farmers

(C) Provide incentive to farmers

(D) All of the above

40. The New Social Security Scheme for unorganised sector in India was launched in

1991

1996

2001

2004

41. As per the tenth plan projections the percentage of population below the poverty line in 2007 would be around

19.2

23.1

27.2

35.9

42. As per the report of the third working group (1998) which of the following measure is used by R B I to measure the total money supply.

M1+M2

M1+M3

(C) M2+M3

M1+M2+M3+M4

Where M1, M2, M3 and M4 have the usual accepted meanings.

43. For a Binomial distribution the following information is given

N=60
P=0.70
q=0.30
Then the variance of the distribution is

12.6

8.6

7.6

6.6

44. The geometric mean of the numbers 16, 32 will be equal to

3.2

4.0

2.0

zero

45. If the regression lines of y on x and x on y are given by

y=a0+a1x and
x=b0+b1x respectively,
then the square of the co-efficient of is

a0 b0

a1 b1

a0 b1

None of the above

46. A ball is drawn at random from a box containing 6 red, 4 white and 5 blue balls, then probability of drawing not red ball is
1.0

1.2

3/5

7/5

47. A weighted price index that uses the arithmetic average of the base period and given period quantities as weights is known as

(A) Paasche's Index

(B) Marshall-Edgeworth Index

(C) Fisher's Ideal Index

Laspeyre's Index

48. Which of the following test is used for examining the significance of the difference between two means of the population when variances are known and equal

F test

Z test

x2

T test

49. The sum of the numbers x1, x2, x3, .., xn from their arithmetic mean x is equal to

Unity

-1.0

zero

2.0

50. If x and y are two independent variables, then their co-variance is

Unity

Zero

2.0

-1.0