BKU-14143-A 1 [Turn over
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1. A temporary leakage from the circular income flow could take the form of

wages depreciation reserves


distributed profits interest


2. Which one of the following is a transfer income

The salary of a member of parliament


Company dividends to shareholders


Rent from house property


Unemployment allowance


3. Which one of the following will directly increase the GNP

A rise in interest rate A surplus in budget


A fall in national debt An increase in investment


4. Consider the following types of income
1.
Personal income

2.
Private income

3.
Disposable income

4.
National income
The correct sequence in descending order of their magnitude is




3 1


1 3


5. Value added means value of

output at market prices


goods and services less depreciation


goods and services less cost of inputs


output at factor cost


6. NNP at market prices and NNP at factor costs will be equal when there is

no direct tax no indirect tax


no subsidy no indirect tax and no subsidy


7. The total income earned in any given year by resource suppliers is measured by

GNP GDP


Personal Income National Income


8. The difference between Net National Product and Net Domestic Product is

Net exports Net income from abroad


Net foreign aid Net borrowing from abroad


9. The GNP of an economy at market prices is Rs. 10,000, Net factor income from abroad is Rs. 1,000, indirect taxes Rs. 800, subsidies Rs. 500 and depreciation Rs. 1,000. What is the GDP at market prices

Rs. 9,000 Rs. 7,700


Rs. 11,000 Rs. 13,300


10. The total sales of all firms in an economy in a given year is

less than gross national product equal to that of national income


more than gross national product the same as gross national product


11. One purpose of advertisement for the goods produced is to

shift the demand curve for the good to the right


shift the demand curve for the good to the left


shift the supply curve for the good to the left


shift the supply curve for the good to the right


12. Expansion in demand is concerned with

movement along with demand curve


shift in the demand curve


upward shift in supply curve


none of the above


13. Which of the following is true in a perfectly competitive market

Total revenue rises continuously at a constant rate


Average revenue is constant at all levels of output


Marginal revenue is constant at all levels of output


All of the above


14. Which of the following is the factor responsible for price discrimination

Different price elasticities in different market


Control over supply


Possible segregate market


All of the above


15. AR and MR curve are equal and constant under

Monopoly Duopoly


Oligopoly Perfect competition


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16. As a household's average income rises, we usually expect

the proportion of its income allocated to food to increase, as food is a necessity


its expenditure habits to remain constant, as income changes have no effect on demand


its demand for goods to increase because the price of these goods will decline


its demand for luxuries to increase


17. Identify the truthfulness of the following statements
I. Ordinal utility gives us information about which basket the consumer prefers and the magnitude of the preference.
II. Cardinal utility gives us information about which basket the consumer prefers but not about the intensity of those preferences.

Both I and II are true Both I and II are false


I is true; II is false I is false; II is true


18. In a pure monopoly which of the following would be true

There would be no abnormal profits


There would be no barriers to entry


There would be no spending on advertising


The monopolist would be a price taker


19. Which of the following is NOT a necessary condition for perfect competition to exist

Everyone must have perfect information


The product must be homogeneous


There must be perfect mobility of the factors of production


There must be barrier to entry in the market


20. Evaluate the truthfulness of the following statements
I. The budget constraint is a function of consumer preferences.
II. The budget constraint defines the set of baskets that a consumer can purchase with a specific level of income.

Both I and II are true Both I and II are false


I is true; II is false I is false; II is true


21. The long run average cost curve slopes upwards because of

economies of scale


diseconomies of scale


barriers to entry


high demand for the product


22. Which of the following is not a characteristic of a monopolistically competitive market

Free entry and exit Long-run economic profits


Differentiated products Many sellers


23. An Engel curve for good x describes

how the consumption of good x varies as the consumer's income changes


how the consumption of good x varies as the price of good x changes


how the consumption of good x varies as the consumption of good y changes


how the consumption of good x varies as price-consumption curve changes


24. Consumer surplus is defined as

the difference between the discounted amount and the original amount


the difference between the maximum amounts a consumer is willing to pay for a good and the amount he or she must actually pay when purchasing


the difference between the actual cost of the good and the negotiated price


both and


25. The production set represents

the set of all technically feasible combinations of inputs and outputs


the technically efficient combinations of inputs and outputs


the maximum output the firm can produce from a given level of inputs


the minimum amounts of inputs necessary to produce a given level of output


26. The rate at which one input can be exchanged for another input without altering the level of output is called the

Marginal product curve


Average product curve


Marginal rate of technical substitution


Law of diminishing marginal productivity


27. When a firm uses inputs in a fixed proportion, the cost minimizing combination of capital and labor

occurs when the firm uses either all workers or all machines


occurs when the firm uses equal amounts of workers and machines


occurs where the ratio of marginal productivities equals the ratio of the input prices


occurs at the corner point on the isoquant


28. Identify the truthfulness of the following statements
I. Marginal cost can be measured as the slope of the total cost curve.
II. Average cost can be measured as the slope of the ray from the origin to the total cost curve.

I is true; II is false Both I and II are false


Both I and II are true I is false; II is true


29. A long-run total cost curve

must be equal to zero when the level of output is zero


may be greater than or equal to zero when the level of output is zero


must be decreasing when the level of output is zero


will be equal to fixed cost, which is greater than zero, when the level of output is zero


30. Suppose a firm's production technology exhibits constant returns to scale. The firm's long­run average cost curve will

be U-shaped exhibit economies of scale


exhibit diseconomies of scale be a horizontal straight line


31. The competitive firm maximizes profit when it produces output up to the point where

marginal cost equals total revenue marginal revenue equals average revenue


price equals average variable cost marginal cost equals marginal revenue


32. Which of the following statements regarding a monopolist's profit maximizing condition is false

The monopolist's profit maximizing price will be greater than marginal cost for the last unit supplied


A monopolist can earn positive economic profit


Because monopoly price is above marginal cost and a monopoly earns positive Economic profit, there are no benefits to consumers in the monopoly market


Price equal to average revenue at the profit maximizing quantity of output


33. With first-degree price discrimination, the marginal revenue curve

is the same as the demand curve


is below the demand curve, with slope equal to twice the slope of demand


is above the demand curve


is below the demand curve, with slope equal to one-half the slope of demand


34. What is the difference between uniform pricing and price discrimination

Uniform pricing and price discrimination are the same thing


With uniform pricing firms charge the same price for each unit of output and with price discrimination firms charge different prices for each unit


With uniform pricing firms charge different prices for each unit of output and with price discrimination firms charge the same price for each unit


The uniform price is always higher than the discriminatory price


35. An individual demand curve slopes downward to the right because of

income effect of fall in prices substitution effect of decrease in price


diminishing marginal utility conditions and hold


36. One of the major reasons why people move from money into bonds is their belief that

the price of bond is about to fall the rate of interest is about to fall


the rate of interest is about to rise the price of mortgages is about to increase


37. When the commercial banks create credit they are, in effect, increasing

the real national income the national debt


the supply of money the real wealth of the country


38. Keynes termed as "active balances" the money held for

the transactions motive only


the precautionary motive only


the transactions and precautionary motives


the speculative motive only


39. "Fiat money" is that which is

backed by gold or silver decreed as money by the government


accepted by overseas banks only accepted temporarily in lieu of gold


40. A large speculative demand for money is likely to exist when

people wish to borrow money in order to speculate on the stock exchange


the current rate of interest is extremely high


the current rate of interest is extremely low


the current rate of interest is moderate


41. Which one of the following is NOT an asset of the commercial banks, but in fact a liability

Cash in hand Money at call


Paid up capital Investment


42. Other things being same, when income increases, the liquidity preference curve

shifts to the left does not shift at all


shifts to the right changes its slope


43. When the intrinsic value of money and its face value are equal, it is called

token money full-bodied money


quasi-money fiat money


44. Portfolio theory of the demand for money assumes that the individual

disregards risk is risk neutral


is risk lover is risk averse


BKU-14143-A 8
45. "The quantity theory of money is a theory of demand for money and not a theory of fluctuations of income and/or prices." The statement is associated with

Robertson Fisher


Keynes Friedman


46. Devaluation results in a
1.
rise in the domestic price of import

2.
rise in the domestic price of exports

3.
fall in domestic price of imports

4.
fall in the foreign price of exports
Which of the above statements are correct




1 and 2 2 and 3


3 and 4 1 and 4


47. Hot money refers to the

short-term capital movements from one country to another seeking either a higher rate of interest or safety of capital irrespective of the rate of interest


long-term capital movements from one country to another seeking higher rate of interest


medium-term capital movements from one country to another


currency which is very much in demand in the foreign exchange market


48. Which one of the following is the major characteristic of foreign direct investment

Capital flows resulting in physical investment


It is portfolio investment in stock market


It is that investment which involves debt servicing


It is investment made by foreign institutional investors in government securities


49. Assertion The Ricardian theory of trade is based on the labour theory of value.
Reason Labour theory of value holds well in domestic trade, but breaks down when applied to international trade.

Both and A and R are true and R is the correct explanation of A


Both A and R are true but R is not a correct explanation of A


A is true but R is false


A is false but R is true


50. Consider the following items
1.
Merchandise exports

2.
Foreign tourist's expenditure in home country

3.
Foreign short-term investment in home country

4.
Banking, insurance and transport services

5.
Income received on investments abroad
Of the above, current account includes




1 alone 3 and 4


4 and 5 3 and 4


51. A 'Hard Currency' is one which is

freely convertible into gold or other currencies


not in demand in Europe or the U.S.A.


regulated by a number of strict exchange controls


in circulation during a period of hyperinflation


52. Denoting the price of capital and labour by PK and PL respectively and countries by A and if
KLA KLB

Country B is relatively labour abundant


Country A is relatively labour abundant


Country A is relatively capital abundant


Relative factor abundance is indeterminate


53. The Singer-Prebisch theory maintains that

less developed countries suffer a welfare loss from the secular decline in terms of trade due to primary product exports


less developed countries suffer a welfare loss due to low value of their currencies


dependence upon trade for development is not harmful to less developed countries


economic aid, rather than trade, is required for developing countries


54. Free trade leads to redistribution of income by

raising the income of poor


lowering the income of rich


raising the income of rich and lowering the income of poor


lowering the price of scarce factor and raising the price of the abundant factor


55. The balance of payments of a country is in equilibrium when

the total receipts is equal to total payments


the demand for domestic currency is equal to its supply


the demand for domestic currency is highest


the total receipts is equal to total payments in an accounting year


56. Income elasticity of demand for the exports of underdeveloped countries is usually

equal to one more than one


zero less than one


57. According to the elasticity approach, for a devaluation to have a positive effect on the trade balance, the sum of the elasticities of demand for exports and imports of the devaluing country has to be equal to

unity less than unity


zero greater than unity


58. Which one of the following transactions represents a credit entry in the current account of a country's balance of payments

Merchandise imports


Transportation services rendered by foreign companies


Expenditure of foreign tourists in a country


Payments to foreign contractors and engineers


59. The scope of international trade and division of labour is limited by

availability of technology size of the international market


availability of capital surplus production of capital exports


60. In Heckscher-Ohlin theory of international trade, the most important source of difference in relative commodity prices between nations is a difference in

factor endowments technology


tastes demand conditions


61. Assertion Devaluation leads to expenditure switching. Reason Devaluation makes imports relatively costlier than domestic goods.

Both A and R are true and R is the correct explanation of A


Both A and R are true but R is not a correct explanation of A


A is true but R is false


A is false but R is true


62. Which one of the following pairs is not correctly matched

Depreciation .................................. Market mechanism



Devaluation ................................... Policy action of the government



Incomplete specialization .............. Comparative cost advantage theory



Exchange control .......................... Foreign exchange rationing



63. The word 'Balance' in the balance of payments refers to

a situation of comfortable equilibrium


no accommodating transaction


an accounting balance


automatic real balance


64. A deficit in a country's balance of payments refers to the difference between

autonomous receipts and autonomous payments


accommodating receipts and autonomous payments


accommodating receipts and accommodating payments


autonomous receipts and accommodating payments


65. The size of foreign trade multiplier depends on

marginal propensity to consume marginal propensity to import


repercussion all of the above


66. Structural changes in GDP are mainly associated with

growth of per capita income development with trickle-down benefit


development of primary sector economic development


67. Which one of the following is NOT related with economic growth

Distribution of GDP in an economy


Efficiency of raising output


Technological changes in production


Human resource development


68. With economic development the share of service sector in the national economy normally

declines increases


remains constant becomes unstable


69. Which one of the following does NOT measure 'income inequalities'

Lorenz curve Gini coefficient


Per capita income Relative poverty


70. "Poor countries are trapped in a vicious circle of poverty." The statement is associated with

Arthur Lewis R.F. Harrod


E. Domar Ragner Nurkse


71. Which one of the following was NOT considered in the Physical Quality of Life Index

Per capita income Literacy percentage


Infant mortality Life expectancy


72. Human Development Index is prepared regularly by

The World Bank United Nations Development Programme


United Nation Organization Asian Development Bank


73. Which one of the following is a feature of only an underdeveloped country

Inflation and unemployment Import of consumers' goods


Underutilization of resources Economic fluctuations


74. The concept of 'stationary state' was given for the first time by

David Ricardo Adam Smith


J.S. Mill J.B. Say


75. J. Schumpeter assigned the role of innovation to

scientists inventing new things


organizers mobilising factors of production


entrepreneurs taking risk in production


producers


76. Which one of the following is NOT a characteristic of modern economic growth as identified by Simon Kuznets

Capital accumulation National product and its components


Population and labour force Sustained increase in the supply of goods


77. Sustainable development is best defined as

sustained growth of GDP for a longer period


meeting the needs of the present generation without compromising the needs of future
generation



having low poverty ratio and high standard of living for a long period


high savings and capital formation resulting in high rate of growth


78. Which one of the following is NOT an obstacle to economic growth

Market imperfections Vicious circle of poverty


Backwash effect Backward and forward linkages


BKU-14143-A 13 [Turn over
79. Consider the following
1.
Increase in population

2.
Improvement in health, education and housing

3.
Migration of workers to more productive areas

4.
Capital accumulation
Of the above, human capital formation includes




3 and 4


2 and 3


2 and 3 only


2 and 4 only


80. List I includes some concepts and List II their authors. Matching the two lists select the
correct answer from the codes given below the lists
List I List II

a.
Division of labour 1. R. Rodan

b.
Demonstration effect 2. Karl Marx

c.
Big push 3. Adam Smith

d.
Surplus value 4. J.S. Duesenberry



Codes
abcd

3412


3142


2431


3421


81. In which one of the following areas the policies of the British rulers in India did not help in the economic development of the country

Cottage and small scale industries Jute industry


Plantation Transport and communication


82. The extent of poverty in India was revealed for the first time by

Govind Ranadey K.T. Shah


Dadabhai Naoroji None of the above


83. Which one of the following was NOT true about Indian economy at the time of independence

Predominance of agriculture Large service sector


Disguised unemployment Lack of entrepreneurs


84. Which one of the following is correct about birth and death rates in India at present

Both birth and death rates are high


Since 1951 both have declined in the same ratio


While death rate has declined there is little change in the birth rate


Birth rate has declined slower while death rate decreased fast


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85. Which one of the following is NOT a target of the National Population Policy 2000

Reduce maternity mortality ratio to 50 per lakh live births


Lower down total fertility rate to the replacement level by 2010


To achieve stable population by 2045


Reduce infant mortality rate to below 30 per one thousand live births.


86. Which one of the following has been ignored in the family planning programme in India

Better rural health services Availability of contraceptives


Family planning insurance schemes Changing social environment


87. Consider some of the facts about hydel power in India
1.
These resources are evenly distributed in the country

2.
15-20 percent of the total electricity generation comes from this source

3.
Since independence share of this source of energy is declining
Of the above




Only 1 and 3 are correct Only 2 and 3 are correct


Only 1 and 2 are correct All are correct


88. Which one of the following does NOT help in maintaining ecological balance

Afforestation Prohibition of hunting animals


Deforestation Rainwater harvesting


89. In which State of India sex ratio exceeds 1000

Tamil Nadu Andhra Pradesh


Orissa Kerala


90. In 2004-05 incidence of poverty on all India basis was estimated to be

27.5 percent


21.8 percent


Both and by using two different methods


None of the above


91. From the point of growth of GDP in Indian economy, the break-even year may be

1971 1981


1991 2001


92. Base year for estimating New series of national product at constant prices is

2005-2006 2003-2004


2001-2002 1999-2000


93. The largest source of gross capital formation in India is in

Private sector Corporate sector


Household sector Public sector


BKU-14143-A 15 [Turn over
94. India's ranking in Human Development Index in recent years (mention year) out of 177 countries remains between

116 and 121 121 and 125


125 and 130 130 and 135


95. Which one of the following is NOT a feature of economic planning in India

Totalitarian planning Democratic planning


Perspective planning Financial planning


96. In the early phase of economic planning in India, out of the following, the main strategy was

export promotion import substitute industrialization


consumerism price control and rationing


97. The strategy of the Eleventh Five-year Plan is

the first priority to agricultural development


more production of foodgrains


rapid industrialization


faster and more inclusive growth


98. The base year of the All India Index of Industrial Production at present is

1993-94 1998-99


2003-04 2007-08


99. In India, industries are classified as

cottage, small and large cottage, micro and large


micro, small, medium and large micro, small and large


100. In the year 2008-09 the largest amount of foreign direct investment was received in

telecommunication housing and real estate


computers and accessories automobiles


101. Which one of the following was NOT an objective of land reforms in India

Institutional changes in agriculture


Eliminating all forms exploitation of farmers


Security of tillers of agricultural land


Technological changes to improve productivity of land


BKU-14143-A 16
102. List I includes some aspects of economic development in India and List II items related to
them
List-I List-II

a.
Decentralized planning 1. Green revolution

b.
Community Development Projects 2. New Agricultural Strategy

c.
Intensive Area Development Programme 3. Panchayat Raj

d.
High yielding varieties 4. Block Development Matching items of List-I with those of List-II, select correct answer from the codes given below


Codes
abcd

3421


4231


3412


4321


103. Consider some of the facts about National Food Security Mission
1.
It is Centrally sponsored scheme

2.
Better food grain management is the main objective of the scheme

3.
It aims at increasing production of rice, wheat and pulses

4.
Area expansion, productivity enhancement and improved technology are the main


tools of the programme.
Of the above


Only 3 and 4 are correct


Only 1 and 3 are correct


3 and 4 are correct


3 and 4 are correct


104. Which one of the following is NOT correct about minimum support prices of agricultural products

Commission for Agricultural Costs and Prices fixes these prices


Prices are announced only for wheat, rice and sugarcane


Government procures foodgrains on these prices


Demand-supply gap and price situation in the country are taken into account in determining these prices.


105. Which one of the following is NOT true about procurement of foodgrains

It is done in crops like wheat, rice and coarse grains


Foodgrains are purchased on minimum support prices


Larger part of foodgrains is distributed through Public Distribution System


Food Corporation of India is the only agency for procuring foodgrains


106. The 'Golden Quadrilateral' is a programme related to

National highways Power transmission lines


State roads Railway network


107. For financing infrastructure projects during the Eleventh Plan emphasis has been given on

larger investment in public sector larger investment in private sector


public-private partnership external financial resources


108. The nature of unemployment in India is

Cyclical Structural


Seasonal Frictional


109. Employment in organized sector in India at present is between

11 and 15 percent 9 and 11 percent


7 and 11 percent 4 and 7 percent


110. Consider some of the facts about National Rural Employment Guarantee Scheme
1.
The scheme was started in February 2006

2.
National Rural Employment Programme (NREP) was merged into the scheme

3.
The basic framework of the scheme was provided by the Maharashtra Employment Guarantee Act

4.
The scheme now covers all the districts of the country
Of the above




only 1 and 4 are correct only 2 and 4 are correct


3 and 4 are correct 3 and 4 are correct


111. Which one of the following is NOT recommended by a Finance Commission

Plan grant to States


Non-plan grants to States


Share of the Central taxes to States


Grant for funding natural calamities in States


112. Target of fiscal deficit in ease of the Union budget for 2008-09 could not be achieved due to

no check on non-essential expenditure


slow growth in tax revenue


larger plan expenditure


larger capital expenditure


113. The largest item of public expenditure in the Union budgets in recent years is

defence expenditure oil-pool deficit


major subsidies interest payments


BKU-14143-A 18
114. In the Union budgets the largest growth in tax revenue during the last 15 years took place in

Personal income tax Corporation tax


Service tax Union excise duties


115. The most important fiscal wrong in the government finances since 1951 has been

large dependence on debt finance large dependence on external assistance


large non-plan expenditure weak tax administration


116. Which of the following is irrelevant in the group

NSE SIDBI


BSE SEBI


117. Which one of the following is NOT correct about Right to Education Act 2009

It provides compulsory and free education for children of the age group 6-14 years


The Act implements the provision of education as a Fundamental Right


For primary education government will provide at least one school in the radius of 1 km


The Act came into force from December 2009.


118. As per the population census 2001, out of the following states the highest literacy rate was recorded in

Bihar Jharkhand


Jammu Kashmir Arunachal Pradesh


119. Which one of the following is the largest item of non-development expenditure in the state budgets of Jammu and Kashmir

Interest payments Police


Miscellaneous general services Pension


120. Which one of the following was the largest source of tax revenue in the state budget of Jammu and Kashmir for the budget 2008-09

State excise Taxes on goods and passenger


Stamp and registration Land revenue


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