SC01 UGC NET JRF Economics Paper-II September 2013

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Economics: Paper-II

UGC NET JRF Exam in Economics Paper-II, September 2013

This question paper consists of fifty multiple choice questions in Economics. All questions are compulsory. 




Note : This paper contains fifty (50) objective type questions of two (2) marks each. All questions are compulsory.

1. Marginal Cost is less than the Average Cost when Average Cost falls with

(A) an increase in output

(B) a decrease in output

(C) constant output

(D) no change in output

2. The pure monopolist obtains equilibrium level of output when

(A) Marginal Revenue = Marginal Cost

(B) Price = Marginal Cost

(C) Price is the lowest

(D) Price is the highest

3. The transformation curve is derived from the

(A) Consumption Curve

(B) Utility Possibility Curve

(C) Social Welfare Function

(D) Production Contract Curve

4. Match the items in List – I with the items in List – II:

List – I

a. Principles of Economics

b. Kinked Demand Curve

c. Principle of Maximum Social Advantage

d. Law of Invisible Hand

List – II

1. Paul Sweezy

2. Adam Smith

3. Marshall

4. Dalton

Codes :

a b c d

(A) 3 1 4 2

(B) 3 2 4 1

(C) 2 1 3 4

(D) 4 3 1 2

5. Assertion (A) : The imposition of Sales Tax does not affect the profit of the monopolist.

Reason (R) : The monopolist shifts the burden of Sales Tax on to the consumer.

Codes :

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

(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(C) (A) is true, but (R) is false.

(D) (A) is false, but (R) is true.

6. Market demand for any goods is a function of

i. price per unit of that goods

ii. price per unit of related goods

iii. income of the consumer

iv. taste and preference of the consumer

Codes :

(A) i and ii only are true.

(B) i and iii only are true.

(C) i, ii and iii only are true.

(D) i, ii, iii and iv are true.

7. If the railways are making loss on passenger traffic they should lower their fares. The suggested remedy would work only if the demand for rail travel has a price elasticity of

i. ep > 1

ii. 1 > ep > 0

iii. Zero

iv. One

(A) ii and iii

(B) i and ii

(C) i and iii

(D) ii andiv

8. Macro economics distinguishes between the real economy and

(A) virtual economy

(B) monetary economy

(C) normative economy

(D) underground economy

9. Match the items in List – I with the items in List – II :

List – I

i. Psychological Law of Consumption

ii. Relative Income Hypothesis

iii. Permanent Income Hypothesis

iv. Life Cycle Hypothesis

List– II

1. Ratchet Effect

2. Age Structure of the Population

3. Distribution of Income

4. Backward Looking Expectations

Codes :

i ii iii iv

(A) 3 1 4 2

(B) 2 4 1 3

(C) 3 1 2 4

(D) 4 2 3 1

10. Assertion (A) : There exits inverse relationship between interest rates and bond prices.

Reason (R) : A bond price represents the present discounted value of the payments agreed upon at the time when the bond was issued.

Codes :

(A) Both (A) and (R) are correct, and (R) is the correct explanation of (A).

(B) (A) is correct, but (R) is not the correct explanation of (A).

(C) (A) is correct, but (R) is incorrect.

(D) (A) is incorrect, but (R) is correct.

11. Assertion (A) : The Natural Rate of Unemployment Hypothesis yields in the long run a vertical Phillips Curve.

Reason (R) : The Natural Rate of Unemployment assumes static price expectations.

Codes :

(A) (A) is correct and (R) is the correct explanation of (A).

(B) Both (A) and (R) are correct and (R) is not the correct explanation of (A).

(C) (A) is correct, but (R) is incorrect.

(D) Both (A) and (R) are incorrect.

12. In the context of different business cycle theories match the nature of cycle/approach given in List – I with the propounders in List – II :

List– I

i. Constrained Cycles

ii. Acceleration – Multiplier Interaction Approach

iii. Capital – Stock Adjustment Principle

iv. Real Business Cycles

List – II

1. Paul A. Samuelson

2. J. R. Hicks

3. Nicholas Kaldor

4. Robert J. Barro

Codes :

      i ii iii iv

(A) 2 1 3 4

(B) 1 2 4 3

(C) 2 1 4 3

(D) 1 3 2 4

13. Assuming fixed prices, which of the following statements are true ?

1. Monetary policy is more effective, flatter the IS-curve.

2. Fiscal policy is less effective, flatter the LM curve.

3. Fiscal policy is more effective, flatter the LM curve.

4. Monetary policy is ineffective and fiscal policy is fully effective in liquidity trap.

Codes :

(A) 1, 2, 4

(B) 1, 3, 4

(C) 2, 3, 4

(D) None of the above

14. Match items given in List – I with those given in List – II :

List– I

a. Inventory Theoretic Approach

b. Liquidity Preference as Behaviour Towards Risk

c. Money as a Temporary Abode of Purchasing Power

d. A Discontinuous Individual Speculative Demand for Money Function

List – II

1. J.M. Keynes

2. Milton Friedman

3. James Tobin

4. W. Baumol

Codes :

       a b c d

(A) 1 4 3 2

(B) 2 3 4 1

(C) 3 2 1 4

(D) 4 3 2 1

15. Which country stands at the top in 2011 Human Development Index ranking of 187 countries in H.D.I. Report – 2011?

(A) Norway

(B) Australia

(C) New Zealand

(D) U.S.A.

16. By an unlimited supply of labour, Lewis meant

(A) infinite elasticity of demand for labour

(B) infinite elasticity of supply for labour

(C) infinite labour available at prevailing wage rate

(D) none of the above

17. According to Mrs. Robinson, the stage of ‘Golden Age’ = _______.

(A) Capital growth rate > Labour growth rate

(B) Capital growth rate = Labour growth rate

(C) Capital growth rate < Labour growth rate

(D) Capital growth rate > 1

18. According to whom, surplus value should be given to labour ?

(A) Adam Smith

(B) Karl Marx

(C) Gandhiji

(D) Sen

19. According to Kuznets, innovation is

(A) Application of new knowledge to production process

(B) Improvement of efficiency of machines

(C) Discovery of new consumption needs

(D) Improvement of marketing techniques

20. The approach of social dualism is connected with the following country :

(A) Indonesia

(B) U.K.

(C) Iran

(D) Pakistan

21. Assertion (A) : A lump sum tax imposed on a monopolist cannot be shifted to the consumers.

Reason (R) : The lump sum tax becomes a part of his fixed cost and it does not affect the marginal cost of production.

Codes :

(A) (A) is true, but (R) is false.

(B) Both (A) and (R) are false.

(C) (A) is not correct, but (R) is correct.

(D) Both (A) and (R) are correct and (R) is the correct explanation of (A).

22. The case for progressive tax rates exists in terms of

(A) Benefits received

(B) Cost of service

(C) Ability to pay

(D) Voluntary exchange approach

23. According to Peacock and Wiseman’s analysis, public expenditure increases

(A) in smooth and continuous manner

(B) as time passes

(C) in jerks or step like fashion

(D) both in the short and long runs

24. Which one of the following debt redemption method is a process by which maturing debts are replaced by new bonds and there is no liquidation of the money burden of debt ?

(A) Repudiation

(B) Refunding

(C) Conversion

(D) Capital levy

25. Fiscal deficit less interest payments is called

(A) Net fiscal deficit

(B) Monetised deficit

(C) Primary deficit

(D) Budgetary deficit

26. Mercantilism was based on the ideology of

(A) Globalization

(B) Nationalism

(C) Regionalism

(D) Privatization and Globalisation

27. Policy of Protection will benefit

(A) Abundant factor of production

(B) Scarce factor of production

(C) Both (A) & (B) are correct

(D) None of the above

28. The Stolper-Samuelson Theorem postulates that the imposition of tariff by a nation causes the real income of the nation’s

(A) both and abundant factors to rise

(B) abundant factor to rise

(C) scarce factor to fall

(D) scarce factor to rise

29. Match the items of List – I and with items of List – II from the given codes :

List – I

I. Adam Smith

II. David Ricardo

III. Ohlin

IV. Haberler

List – II

1. Opportunity cost

2. Factor endowment

3. Absolute advantage

4. Comparative advantage

Choose the correct code :

Codes :


(A) 3 4 2 1

(B) 4 2 1 3

(C) 2 3 4 1

(D) 1 2 3 4

30. Match List – I with List – II :

List – I

I. Rybczynski Theorem

II. Metzler

III. Stopler-Samuelson Theorem

IV. Immiserising growth

List – II

a. The effect of tariffs on factor prices Effect

b. The effect of factor growth on production and growth

c. The effect of tariffs on domestic prices

d. The effect of growth on terms of trade

Codes :


(A) d c a b

(B) d a c b

(C) b a c d

(D) b c a d

31. Match items in List – I with the items in List – II :

List – I

a. Rajiv Gandhi Udyami Mitra Yojana

b. Credit Guarantee Fund Trust of Medium and Small Enterprises

c. National Manufacturing Competitiveness Programme

d. National Competition Commission of India

List – II

1. Jointly set up by Government of India & SIDBI

2. Lean Manufacturing

3. Control of Cartels

4. Promotion of first generate entrepreneurs

Codes :

a b c d

(A) 4 1 2 3

(B) 4 2 1 3

(C) 4 3 1 2

(D) 3 4 1 2

32. Which of the following is not correct about the micro, small and medium enterprises in India?

(A) It covers both registered and informal sectors.

(B) Its classification criteria is investment in plant and machinery.

(C) The fourth Census of the MSMEs is for the year 2009-10.

(D) According to the fourth Census of MSME, total registered MSME sector comprised 67.1 percent manufacturing units white 32.9 percent were service enterprises.

33. What is the ceiling on investment in plant and machinery for small enterprises in India ?

(A) ` 25 lakhs

(B) ` 5 crore

(C) ` 1 crore

(D) ` 10 crore

34. What is the weight of the manufacturing sector in the Industrial Production Index (2004-05 =100) ?

(A) 69.0 percent

(B) 72.3 percent

(C) 75.5 percent

(D) 79.2 percent

35. Match items of List – I with items of List – II :

List – I

a. Bharat Nirman Yojana

b. National Food for Work Programme

c. Indira Awas Yojana

d. Supply of Improved Tool Kits to Rural Artisans

List – II

1. Rural Housing

2. Merged with SGSY

3. Merged with SGRY

4. Rural Infrastructure

Codes :

a b c d

(A) 4 3 1 2

(B) 4 2 1 3

(C) 4 1 2 3

(D) 2 4 1 3

36. Which one of the following is not reserved for public sector ?

(A) Atomic energy

(B) Railways

(C) Insurance

(D) Port Trust of India

37. Assertion (A) : The public distribution system in India has close links with food security for the vulnerable segments of population.

Reason (R) : Public distribution system is failure in India.

Codes :

(A) Both (A) and (R) are true and (R) is correct explanation for (A).

(B) Both (A) and (R) are true and (R) is not correct explanation for (A).

(C) (A) is true, but (R) is false.

(D) (A) is false, but (R) is true.

38. What is the share of agriculture sector in India’s National Income at present ?

(A) 5%

(B) 15%

(C) 25%

(D) 27%

39. The Service Area Approach was implemented under the purview of

(A) Lead Bank Scheme

(B) Integrated Rural Development Programme

(C) Training the Rural Youth for Self-employment

(D) Mahatma Gandhi National Rural Employment Guarantee Scheme

40. During the British Raj, the Mahalwari System in Indian Agriculture was introduced by

(A) Cornwallis

(B) Curzon

(C) Johnson

(D) W. Bentinck

41. Technology Mission on oilseeds was started in India in the year

(A) 1975

(B) 1980

(C) 1986

(D) 1992

42. High Yielding Varieties Programme in India does not include

(A) Wheat

(B) Pulses

(C) Jowar

(D) Maize

43. As per the latest SRS data, which of the following age-group has the lowest age-specific fertility rate in India?

(A) 15-19

(B) 20-29

(C) 30-34

(D) 35-39

44. Endogenous technological change is not caused by


(B) Population size

(C) Population density

(D) Educational level

45. Match Group – I with Group– II :

Group – I

a. Variance

b. Mode

c. χ2 distribution

d. Mesokurtic distribution

Group – II

i. Sampling distribution

ii. Normal distribution

iii. Measure of dispersion

iv. Measure of central tendency

Codes :

      a b c d

(A) i iii ii iv

(B) iii iv i ii

(C) ii iv iii i

(D) iv ii i iii

46. Assertion (A) : Fisher’s Index No. is ideal Index No.

Reason (R) : Fisher’s Index satisfies time reversal and factor reversal tests.

Codes :

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

(B) Both (A) and (R) are true, but (R) is not correct explanation of (A).

(C) (A) is true, but (R) is false.

(D) (A) is false, but (R) is true.

47. There are 12 white balls, 8 red balls and 5 green balls in a basket. What is the probability that a ball drawn is either red or white?

(A) 12/25

(B) 8/25

(C) 20/25

(D) 15/25

48. If the mean and variance of a given distribution is 8 and 0.25, then the coefficient of variation will be

(A) 4 percent

(B) 8 percent

(C) 12 percent

(D) 16 percent

49. Coefficient of determination is given as

(A) r/1 – r2

(B) 1 – r2

(C) 1 + r2

(D) r2

50. For testing the equality of population variances the test to be applied is

(A) Student’s t test

(B) χ2 test

(C) F distribution

(D) Z distribution