1. The Law of Diminishing Returns to Scale holds true in the

Market Period

Short Period

Long Period

Secular Period
2. The demand for labour by a firm is a derived demand because it depends upon

The demand for goods and services that labour helps to produce.

The degree of substitution between labour and other factors of production.

The elasticity of demand for labour.

The demand for other factors of production.
3. Social Welfare Function is assumed

Theoretically

Axiomatically

Hypothetically

Empirically
4. In the classical theory, an increase in money supply leads to

Decrease in price level.

Increase in savings.

Decrease in investment.

Increase in price level.
5. Shift in LM curve takes place due to

Increase in autonomous investment.

Increase in money supply.

Increase in consumption.

Increase in saving rate.
6. The Phillips Curve shows the relation between

Income and consumption.

Income and price level.

Income and investment.

Inflation and unemployment.
7. Rolling Plan Concept was propounded by

Gunnar Myrdal

J.K. Galbraith

Paul A. Samuelson

A.K. Sen
8. The 'Incremental Capital-Output Ratio' is symbolically written as

K L

DK DL

DK DY

K Y
9. The doctrine of unbalanced growth has not been advocated by

H.W. Singer

W.A. Lewis

A.O. Hirschman

C.P. Kindleberger
10. Which group represents the interests of the developing countries

G 7

G 10

G 77

G 80
11. Funds not belonging to the Government are called

Contingency Fund

Consolidated Fund

Private Accounts

Public Accounts
12. The Deficit Budget in which the deficits are covered through taxes is called

Balanced Budget

Unbalanced Budget

Surplus Budget

Zero-base Budget
13. Raul Prebisch's argument is concerned with the effects of business cycles on

Terms of Trade

Balance of Payments

Output

Consumption
14. The difference between the export and import of services is called

Balance of Trade.

Balance of Invisibles.

Balance of Current account.

Balance of Capital account.
15. Public Enterprises in India have developed only in

Consumer goods industries

Key and basic industries

Service industries

All types of industries
16. According to Economic Survey 2007-08, India's Current Account balance as percent of
GDP in 2006-07 stood at

-3.3

-2.1

-1.1

0.4
17. The overall production of food grains in India in 2006-07 was

207.3 million tonnes

217.3 million tonnes

270.8 million tonnes

227.8 million tonnes
18. On Current Daily Status basis, the incidence of unemployment in India in
2004-05 was

4.52%

6.43%

8.28%

10.12%
19. The statistical technique used to determine the degree of relationship between two
variables is called

Dispersion

Index Numbers

Association

Correlation
20. Which Index Number method has an upward bias

Laspeyre's method

Paasche's method

Bowley's method

Fisher's method

21. Assertion The rate of fall of MR is more than that of AR in the event of their
falling.
Reason Both MR and AR curves are linear and negatively sloping.

Both and are true, but is not the correct explanation of

Both and are true, and is the correct explanation of

is false, but is true.

is true, but is false.
22. Assertion Under monopolistic competition, the long-run average revenue
of a firm is tangent to the negatively sloping portion of the long-run average cost curve.

Reason The demand curve facing the firm under monopolistic competition is
relatively more elastic.

Both and are true, but is the correct explanation of

is true, but is false.

Both and are false.

Both and are true, but is not the correct explanation of

23. Assertion
According to Milton Friedman, the slope of the long-run Phillips curve is vertical.

Reason The expectations about future inflation are the basic cause of the nonexistence
of the trade-off between inflation and unemployment in the long-run.

Both and are true, but is not the correct reason of

Both and are true, and is the correct reason of

Both and are false.

is true, but is false.
24. Assertion Life Cycle Hypothesis attempts to reconcile the short-run nonproportional
and the long-run proportional consumption functions.

Reason Short-run non-proportional consumption function implies that APC declines as income increases.

is true, but is false.

Both and are false.

Both and are true, but is not the correct reason of

Both and are true, and is the correct reason of
25. Assertion According to Gunnar Myrdal, there exists a circular and cumulative causation in under-developed countries.

Reason There is a mutually reinforcing interaction between low living levels
and low productivity.

is false, but is true.

Both and are false.

Both and are true, but is not the correct explanation of

Both and are true, and is the correct explanation of
26. Assertion Harrod-Domar model assumes fixed technological relationship between capital stock and income flows.

Reason The model assumes flexible capital output ratio.

Both and are true.

Both and are true, but is not the correct explanation of

Both and are false.

is true, but is false.
27. Assertion Over the years, the goal of self-reliance has proved to be elusive in the
Indian economy.

Reason Balance Of Payments problems have been arising due to
imports of POL.

Both and are false.

is true, but is false.

Both and are true, but is not the correct explanation of

Both and are true and is the correct explanation of
28. Assertion Laspeyre's index has a upward bias.

Reason Paasche's index has a downward bias.

Both and are true and is the correct explanation of

Both
and are true, but is not the correct explanation of

is true but is false.

is false but is true.
29. Assertion In a bell-shaped distributive curve, the value of Mean, Median and
Mode would be identical.

Reason There is no skewness in the series.

Both and are true, but is not the correct explanation of

is true, but is false.

is false, but is true.

Both and are true and is the correct explanation of
30. Assertion Colin Clark hypothesised that the safe upper limit of taxation is 25
percent of national income.

Reason The excess burden of taxation will be very high if it goes beyond the 25 percent limit.

is true, but is false.

Both and are true.

Both and are true and is the correct explanation of

Both and are false.

31. Value and Capital
Principles of Political Economy and Taxation
A Revision of Demand Theory
The General Theory of Employment, Interest and Money

Codes








32. Introduction of MODVAT
Introduction of Fringe Benefit Tax
Introduction of Expenditure Tax
Abolition of Estate Duty

Codes








33. Relative Income Hypothesis
Life-cycle Hypothesis
Absolute Income Hypothesis
Permanent Income Hypothesis

Codes









34. Modernisation
Rapid and non-inclusive growth
Removal of poverty and self-reliance
Rapid and large scale industrialisation

Codes








35. Formation of WTO
Uruguay Round of GATT
Formation of GATT
Formation of UNCTAD
Codes








36. Pradhan Mantri Gramodaya Yojana (PMGY)
Swarnjayanti Gram Swarozgar Yojana (SGSY)
Jawahar Rozgar Yojana
Integrated Rural Development Programme (IRDP)
Codes








37. Creation of SDRs
Formation of IMF
Collapse of International Monetary System
Introduction of Gold Standard
Codes









38. Chairman of the Finance Commission
K.C. Pant
K. Brahamananda Reddy
A.M. Khusro
K. Santhanam
Codes









39. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code.
List-I List-II

Degree of monopoly theory T. Scitovsky

Double criterion Halland Hitch

Behavioural theory of firm M. Kalecki

Average cost pricing Herbert Simon











40. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code. List-I List-II

Compensation criterion Williamson

Impossibility theorem F.H. Knight

Managerial discretion model Kaldor-Hicks

Uncertainty theory of profits Kenneth Arrow











41. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code. List-I List-II

Absolute income hypothesis N. Gregory Mankiw

Rational expectation hypothesis J.M. Keynes

Relative income hypothesis Robert Lucas

The New Keynesian model James Duesenberry










42. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code. List-I List-II

Stability of demand function for money Bent Hansen

Demand inflation theory Milton Friedman

Interest elasticity of transactions
demand for cash Don Patinkin

Real balance effect James Tobin










43. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code. List-I List-II

Steady rate of growth P.R. Brahmananda

Golden age Joseph Schumpeter

Wage goods model R.M. Solow

Circular flow of economic life Mrs. Joan Robinson












44. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code.

List-I List-II

Principle of absolute advantage Rybczynski

Effects of factor endowment changes on trade Samuelson

Theory of reciprocal demand Adam Smith

Factor price equalisation theorem J.S. Mill










45. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code. List-I List-II

Voluntary exchange approach Peacock-Wiseman

Theory of local public goods A.C. Pigou

Time-pattern of public expenditure growth Wicksell-Lindahl

Principle of least aggregate sacrifice Charles Tiebout










46. This consists of two lists of Events Theories Models Statements, etc., and the other of authors/years. The candidates are required to match an item in one list with an item in the other and mark the correct matching option, given in the code. List-I List-II
Hybrid Index Number Spearman
Association of Attributes Yule
Rank Correlation Gulton
Regression Marshall-Edgeworth
Codes









Read the passage below and answer questions from 47 to 50 on your understanding of the
passage.

The theory of economic integration refers to the commercial policy of discriminatively reducing or eliminating trade barriers only among the nations joining together. The degree of economic integration ranges from preferential trade arrangements to free trade areas, customs, unions, common markets, and economic unions. Preferential trade arrangements provide lower barriers on trade among participating nations than on trade with non-member nations. The best example of a preferential trade arrangement is the British Commonwealth Preference Scheme established in 1932. A free trade area is the form of economic integration wherein all barriers are removed on trade among members, but each nation retains its own barriers to trade with non-members. The best examples are the European Free Trade Association (EFTA) formed in 1960, the North American Free Trade Agreement (NAFTA) formed in 1993 and the Southern Common Market (MEROSUR) formed in 1991. A customs Union allows no tariff or other barrier on trade among members. The most famous example is the European Union or European Common Market, formed in 1957. A common market goes beyond a customs union by also allowing the free movement of labour and capital among member nations. An economic union goes still further by harmonizing or even unifying the monetary and fiscal policies of member state. This is the most advanced type of economic integration.

47. Which of the following is not a free trade area

The North American Free Trade Agreement.

Southern Common Market.

European Common Market.

European Free Trade Association.
48. Which of the following allows free movement of labour and capital among member
nations

Preferential trade arrangement

Customs union

Economic union

Common market
49. An economic union is the most advanced type of economic integration.

It unifies the monetary and fiscal policies of member states.

It permits no tariff barriers on trade among members.

It allows free movement of capital and labour among member nations.

It allows no tariffs on trade among members and a common tariff policy towards
the rest of the world is followed.
50. The most advanced type of economic integration is

Economic union

Customs union

Common market

Free Trade Area