MPE&SS • 2015 • Paper-II
Sectors which are included in infrastructure are
A)
transportation
B)
communication
C)
energy
D)
all of these
Infrastructure includes transport, communication and energy, among other sectors.
MPE&SS • 2015 • Paper-II
Economic Liberalisation in India started with
A)
Doing away with procedural formalities for foreign direct investment
B)
Significant reduction in tax rates
C)
The convertibility of Indian Rupee
D)
Substantial changes in industrial licensing policy
Economic liberalisation in India included major changes to industrial licensing policy in 1991.
MPE&SS • 2015 • Paper-II
Post Office Saving Deposit is part of
A)
M1
B)
M2
C)
M3
D)
M4
Post Office Savings Deposit is included in the broader M3 measure.
MPE&SS • 2015 • Paper-II
A pure public good is subject to
A)
the law of increasing costs
B)
the law of constant costs
C)
the law of decreasing costs
D)
none of these
Pure public goods do not fit a normal private cost law in the same way; among the listed options, 'none of these' is intended.
MPE&SS • 2015 • Paper-II
Fund which has to be invested in government bonds is called
A)
Investment ratio
B)
Cash reserve ratio
C)
Statutory liquidity ratio
D)
Credit ratio
The statutory liquidity ratio requires banks to hold a specified share in approved liquid assets such as government securities.
MPE&SS • 2015 • Paper-II
The term ‘Hindu rate of growth’ was conceptualised by
A)
V.K.R.V.Rao
B)
M.N.Roy
C)
K.N.Raj
D)
A.K.Sen
The term 'Hindu rate of growth' was popularised by K.N. Raj.
MPE&SS • 2015 • Paper-II
Which of the following budgeting systems includes the decisions to spend a particular set of resources for a particular purpose and involves laying down the sequence of steps for executing the project?
A)
Programme budgeting
B)
Performance budgeting
C)
Comparison budgeting
D)
Economic budgeting
Programme budgeting links spending decisions with purposes and planned sequences of activities.
MPE&SS • 2015 • Paper-II
Solow’s model of long run growth is an improvement over that of
A)
J.E.Meade
B)
Harrod - Domar
C)
Joan Robinson
D)
David Ricardo
Solow's model extended/improved the Harrod-Domar growth framework.
MPE&SS • 2015 • Paper-II
Prof. Ragnar Nurkse defined underdevelopment in terms of
A)
Scarcity of natural resources
B)
Scarcity of human resources
C)
Scarcity of technology
D)
Scarcity of capital
Nurkse described underdevelopment in terms of the scarcity of capital and the vicious circle of poverty.
MPE&SS • 2015 • Paper-II
Which form of money has the highest degree of liquidity?
A)
M1
B)
M2
C)
M3
D)
M4
M1 is the narrowest and most liquid monetary aggregate.
MPE&SS • 2015 • Paper-II
To raise productivity in agriculture it is necessary that
A)
productive tariffs are imposed
B)
better inputs are made available to agriculturists
C)
bank rate is lowered
D)
less money is spent on industrial expansion
Higher productivity requires better agricultural inputs/technology.
MPE&SS • 2015 • Paper-II
Government’s increase in administered prices will lead to
A)
Cost push inflation
B)
Demand Pull inflation
C)
Both (a) and (b)
D)
Expansionary pressure
Higher administered prices directly raise firms' costs, producing cost-push inflation.
MPE&SS • 2015 • Paper-II
If the cost condition of goods in labour mandays between India and USA area as follows: 1 Unit of Good A (India: 120, USA: 80), 1 Unit of Good B (India: 100, USA: 90). USA has the comparative advantage in
A)
Good A
B)
Good B
C)
Goods A & B
D)
No comparative advantage
USA's opportunity cost of A is 80/90, lower than India's 120/100, so USA has comparative advantage in Good A.
MPE&SS • 2015 • Paper-II
Which of the following pairs is not correctly matched?
A)
Division of labour : Adam Smith
B)
Population growth : T.R.Malthus
C)
Golden age : Joan Robinson
D)
Critical Minimum effort : J.E.Meade
Joan Robinson is associated with imperfect competition, not the 'golden age' concept in this matching.
MPE&SS • 2015 • Paper-II
According to Milton Friedman, people hold money with them
A)
because of speculative motive
B)
to give marginal utility by holding money
C)
because of irrational behaviour
D)
none of these
Friedman's quantity-theory approach does not explain money holdings by Keynesian speculative motive; 'none of these' is the intended answer.
MPE&SS • 2015 • Paper-I
Intersection of the saving and investment schedule will give the
A)
money rate of interest
B)
market rate of interest
C)
real rate of interest
D)
natural rate of interest
The intersection of saving and investment schedules determines the real rate of interest in the loanable-funds framing.
MPE&SS • 2015 • Paper-I
If price is Rs.10 and supply is 20 and if price increases by Rs.2 as a result of which supply increases by 5, then elasticity of supply is
A)
1
B)
1.25
C)
1.5
D)
1.75
Elasticity of supply = (5/20)/(2/10) = 1.25, so option B.
MPE&SS • 2015 • Paper-I
Zero substitutability between the inputs is assumed by
A)
Input-output Isoquant
B)
Convex Isoquant
C)
Kinked Isoquant
D)
Concave Isoquant
A kinked isoquant represents zero substitutability between inputs.
MPE&SS • 2015 • Paper-I
If C = 500 + 0.8Y, then what is the national income at I = 500?
A)
4000
B)
4500
C)
4750
D)
5000
Y = 500 + 0.8Y + 500, so 0.2Y=1000 and Y=5000.
MPE&SS • 2015 • Paper-I
Match List I with List II and select the correct answer using the codes given below the lists:
List I: i. J.M.Keynes, ii. J.Duesenberry, iii. M.Friedman, iv. F.Modigliani
List II: (A) Permanent income hypothesis, (B) Life cycle hypothesis, (C) Relative income hypothesis, (D) Absolute income hypothesis
A)
i – D, ii – C, iii – B, iv - A
B)
i – C, ii – D, iii – A, iv - B
C)
i – C, ii – D, iii – B, iv - A
D)
i – D, ii – C, iii – A, iv - B
Keynes—Absolute income, Duesenberry—Relative income, Friedman—Permanent income, Modigliani—Life cycle.
MPE&SS • 2015 • Paper-I
Consider the following statements about an isoquant:
1. it slopes downwards to the right
2. it is convex
3. two isoquants can never intersect each other
Which of the above statements is/are correct?
A)
1 alone
B)
1 and 2
C)
1 and 3
D)
1, 2 and 3
Standard isoquants slope downward, are convex, and do not intersect.
MPE&SS • 2015 • Paper-I
According to the Keynes’ Psychological Law of Consumption, while increase in income is accompanied by increase in consumption, yet the rate of increase in consumption is __________ the rate of increase in income.
A)
invariably more than
B)
often less than
C)
invariably less than
D)
equal to
Keynes' psychological law says consumption rises, but less than proportionately to income.
MPE&SS • 2015 • Paper-I
Investment curve is downward sloping because of decrease in
A)
Marginal efficiency of capital
B)
Marginal productivity of capital
C)
High capital output ratio
D)
None of these
The investment curve falls as marginal efficiency of capital declines with investment.
MPE&SS • 2015 • Paper-I
Match List I and List II and select the correct answer code.
List-I: (i) Investment Multiplier, (ii) Consumption Function, (iii) Accelerator Principle
List II: a) J.M.Clark, b) J.M.Keynes, c) R.F.Kahn
A)
i—a, ii—b, iii—c
B)
i—a, ii—c, iii—b
C)
i—b, ii—a, iii—c
D)
i—c, ii—b, iii—a
Multiplier—Kahn, consumption function—Keynes, accelerator—Clark.
MPE&SS • 2015 • Paper-I
In Cournot’s duopoly model there are two firms operating with
A)
marginal cost
B)
zero cost
C)
average cost
D)
fixed cost
The standard Cournot duopoly assumes identical firms with zero or constant marginal cost in the basic model; the intended choice is zero cost.
