UGC NET ECONOMICS SOLVED PAPER II JUNE 2012

                                                                       ECONOMICS
                                                                          Paper – II


Q. Nos. 1 – 10 : Read the following questions and find correct answer from the
choices given below these questions.
1. Marginal Revenue of a Monopoly firm is less than the price. Because :
(A) Demand curve has a positive slope.
(B) Demand curve has a negative slope.
(C) Monopolist incurs losses.
(D) Monopolist is in equilibrium
.
2. For an inferior goods, income consumption curve and Engles curves are
(A) Positively sloped
(B) Negatively sloped
(C) Are the same
(D) Income consumption curve positively sloped and the Engles curve is negatively sloped

3. The classical economists focussed on the role of money as
(A) medium of exchange
(B) medium of distribution
(C) wealth
(D) link between present and future

4. If the demand for money is perfectly interest inelastic, the LM schedule will be
(A) Upward sloping
(B) Downward sloping
(C) Horizontal line
(D) Vertical line

5. Harrod-Domar model of economic growth is based on the equilibrium between
(A) Income generation and productive capacity creation
(B) Equilibrium between income and consumption
(C) Equilibrium between savings and investment
(D) None of the above

6. In calculating the buoyancy of a tax, we consider
(A) Only discretionary changes
(B) Only automatic changes
(C) Both (A) and (B)
(D) Neither (A) nor (B)

7. Which of the following measures of the central tendency suits the data best if the objective is to assess the
    distribution of values ?
(A) Arithmetic mean
(B) Mode
(C) Median
(D) Kurtosis

8. Comparative cost advantage in Ricardo’s international trade theory arises due to
(A) Labour cost differences
(B) Differences in factor endowment
(C) Factor abundance defined in terms of factor prices
(D) All of the above

9. In India, in 2004-05 the number of poor persons below poverty line was the highest in the State of
(A) Bihar
(B) Uttar Pradesh
(C) Madhya Pradesh
(D) Rajasthan

10. Which of the following is not a component of Bharat Nirman ?
(A) Rural housing
(B) Rural electrification
(C) Agro-based industries
(D) Rural telephony
Q. Nos. 11 – 20 : Read the following questions and find out correct answer from
 the codes given below these questions.

11. A point of ‘Kink’ in the kinked demand curve indicates
I. Price rigidity
II. Quantity rigidity
III. Price flexibility
IV. Quantity flexibility
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) III and IV are correct.
(D) I and IV are correct.

12. Improvement in the BOP deficit may be effected through
I. Import control
II. Export promotion
III. Foreign exchange control
IV. Devaluation
Codes :
(A) I and II are correct.
(B) I, II, III and IV are correct.
(C) II and III are correct.
(D) I, II and III are correct.

13. The problem relating to burden of public debt has been dealt by
I. A.P. Learner
II. E.D. Domar
III. A.C. Pigou
IV. A.H. Henson
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) I and IV are correct.
(D) II and III are correct.

14. Fiscal policy relates to the Government decision in respect of
I. Taxation
II. Government spending
III. Government borrowing
IV. Public Debt
Codes :
(A) III and IV are correct.
(B) II, III and IV are correct.
(C) I and II are correct.
(D) All the above are correct.

15. HDI is entrusted with reference to :
I. Life expectancy at birth
II. Real GDP/per capita
III. Infant mortality
IV. Morbidity
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) III and IV are correct.
(D) All the above

16. The doctrine of unbalanced growth was propounded by
I. Hirschman
II. Robert Solow
III. Singer
IV. Ragnar Nurkse
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) III and IV are correct.
(D) I and III are correct.

17. Harrod-Domar model of economic growth is based upon
I. Warranted growth rate
II. Investment growth rate
III. Productivity growth rate
IV. Natural growth rate
Codes :
(A) I and II are correct.
(B) II and III are correct.
(C) III and IV are correct.
(D) I and IV are correct.

18. In Keynesian system speculative demand for money arises because of
I. Uncertainty of future interest rates
II. Unexpected expenditures
III. To bridge the gap between income and eventual expenditure
IV. Relationship between changes in the interest rates and bond prices
Codes :
(A) I and III are correct.
(B) I and IV are correct.
(C) II and III are correct.
(D) III and IV are correct.

19. According to Milton Friedman Theory of permanent component of consumption-expenditure
      depends on
I. Transitory income alone
II. Transitory and permanent income
III. Permanent income alone
IV. Windfall gains
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) II and IV are correct.
(D) Only III is correct.

20. The Planning Commission of India has recently made announcement regarding
Poverty Line :
I. ` 42 per capita per day in urban area
II. ` 26 per capita per day in rural area
III. ` 32 per capita per day in urban area
IV. ` 32 per capita per day in rural area
Codes :
(A) I and II are correct.
(B) I and III are correct.
(C) II and III are correct.
(D) III and IV are correct.
Q. Nos. 21 – 30 : Read the following questions of given Assertions with their
Reasoning and find correct answer from the codes given below these questions.

21. Assertion (A) : Giffin’s paradox rarely occurs in the real world.
      Reason (R) : Inferior goods are narrowly defined for which suitable substitutes are available.
Codes :
(A) Both (A) and (R) are 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) (A) is incorrect, but (R) is correct.

22. Assertion (A) : According to the Life Cycle Theory of consumption, an individual level of consumption
                             depends not just on current income but also on long run expected earnings.
      Reason (R) : Individuals are assumed to plan a pattern of expenditure based on expected earnings over
                          life time.
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 correct explanation of (A).

23. Assertion (A) : Effective demand can be increased by more equitable distribution of wealth.
      Reason (R) : Thirty or forty entities with income averaging between 1 lakh and 5 lakhs would create
                          much more effective demand than a single entity having income of 10 lakhs a year.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (A) is incorrect, but (R) is correct.

24. Assertion (A) : During the period 2004-05 to 2007-08 fiscal consolidation process was
                             witnessed in India.
      Reason (R) : There was buoyancy in tax revenue during this period.
Codes :
(A) Both (A) and (R) are 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) (A) is incorrect, but (R) is correct.

25. Assertion (A) : K/L ratio will adjust through time in the direction of equilibrium ratio.
      Reason (R) : Because the technical coefficient of production are variable.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is incorrect.
(D) (A) is incorrect, but (R) is correct.

26. Assertion (A) : Financial inclusion is desirable to help weaker sections of society in the country.
      Reason (R) : Investment activity needs to be promoted to facilitate access to development benefits to
                          masses.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is not correct, but (R) is correct.
(D) (A) is correct, but (R) is not correct.

27. Assertion (A) : Stationary state is the end of the process of capital formation.
      Reason (R) : Scarcity of natural resources as also capital leads the economy to the stationary state.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is not correct.
(D) (A) is not correct, but (R) is correct.

28. Assertion (A) : Investment has also a supply effect.
      Reason (R) : Because it raises capacity to produce.
Codes :
(A) Both (A) and (R) are correct and (R) is not the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(C) (A) is correct, but (R) is not correct.
(D) (A) is not correct, but (R) is correct.

29. Assertion (A) : Gold standard was finally given up after the Second World War.
      Reason (R) : Countries had different rates of inflation.
Codes :
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct and (R) is not correct explanation of (A).
(C) (A) is correct, but (R) is not correct.
(D) (A) is not correct, but (R) is correct.

30. Assertion (A) : Disguised unemployment is present in Indian agriculture.
      Reason (R) : Marginal productivity of agriculture is close to zero.
Codes :
(A) Both (A) and (R) are 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 not correct.
(D) (A) is not correct, but (R) is correct.
Q. Nos. 31 – 40 : Read the following questions and find the correct sequence from
 the code given below these questions.

31. Arrange the following in chronological order :
I. CES production function.
II. Cobb-Douglas production function
III. Tronslog production function
IV. The law of variable proportions
Codes :
(A) III, I, IV, II    (B) I, IV, II, III   (C) IV, II, I, III    (D) II, III, I, IV

32. Consider the following schemes :
       I. EAS                       II. TRYSEM
     III. JRY                       IV. RLEGP
The correct chronological sequence of the launching of these schemes are :
Codes :
(A) II, IV, I, III    (B) IV, II, III, I   (C) IV, III, I, II    (D) II, IV, III, I

33. Arrange the origin of money in a sequential order
I. Cheque
II. Metallic money
III. Commodity money
IV. Paper money
Codes :
(A) IV, I, III, II    (B) I, III, II, IV   (C) III, II, IV, I    (D) II, IV, I, III

34. Arrange the following theories in the chronological order :
I. Restatement of Quantity Theory
II. Income Theory
III. Quantity Theory
IV. Cash Balance Approach
Select the correct answer from the given codes :
Codes :
(A) I, II, IV, III    (B) III, I, II, IV   (C) IV, III, I, II    (D) III, IV, II, I

35. Identify the correct chronological order of the following classical economists :
(A) Adam Smith, Malthus, Ricardo, J.S. Mill
(B) Adam Smith, Ricardo, Malthus, J.S. Mill
(C) Adam Smith, J.S. Mill, Ricardo, Malthus
(D) Adam Smith, Malthus, J.S. Mill, Ricardo

36. The sequencing process of Schumpeter model of development is
(A) Swarm like Clusters, Innovation, Bank credit, Breaking circular flow
(B) Breaking circular flow, Innovation, Bank credit, Swarm like Clusters
(C) Innovation, Bank credit, Breaking circular flow, Swarm like Clusters
(D) Bank credit, Innovation, Swarm like Clusters, Breaking circular flow

37. Arrange the following theories in order in which they appeared :
I. Comparative Cost Advantage Theory
II. Absolute Cost Advantage Theory
III. Leontief Paradox
IV. Factor Endowment Theory
Codes :
(A) I, III, II, IV    (B) II, III, IV, I   (C) II, I, IV, III    (D) I, IV, II, III

38. Arrange the stages of economic growth in a sequential order :
I. The age of high mass consumption
II. The traditional society
III. The take-off stage
IV. The drive to maturity
Codes :
(A) I, III, IV, II    (B) II, IV, I, III   (C) III, I, II, IV    (D) II, III, IV, I

39. Identify the sequence of implementation of the following taxes.
     Select the correct answer from the given codes :
I. Land Revenue
II. Sales tax
III. MODVAT
IV. Service tax
Codes :
(A) I, II, III, IV    (B) II, IV, I, III   (C) III, II, IV, I    (D) IV, II, I, III

40. Identify the correct chronology of the following :
I. Fisher’s test of significance of differences between means of three or more samples.
II. Kendal’s partial rank correlation.
III. Gossest’s T test of significance between means of two samples.
IV. x2 test of goodness of fit of the curve and randomness of the sample values.
  Codes :
(A) III, I, II, IV    (B) I, II, III, IV   (C) IV, III, II, I    (D) I, II, IV, III
Q. Nos. 41 – 50 : Match the items given in List – I with those in List – II and answer the
     correct matching option from the codes given below these questions.

41. List – I                                                                      List – II
I. Behavioural theory of the firm                                    1. J.B. Clark
II. Marginal productivity theory of distribution               2. Cyert and Mark
III. Double criterion of welfare                                     3. Kenneth Arrow
IV. Impossibility Theorem                                            4. Scitovosky
Codes :
         I   II  III IV
(A)   2   1   4   3
(B)   3   2   4   1
(C)   1   4   3   2
(D)   2   1   3   4

42. List – I                                                                             List – II
I. New Classical Economics                                              1. T.H. Haavelmo
II. Permanent Income Hypothesis                                      2. Robert Lucas
III. Multiple effect of Balanced Budget                              3. N. Gregory Mankiw
IV. New Keynesian Economics                                        4. Milton Friedman
Codes :
I II III IV
(A)   3   4   1   2
(B)   4   3   2   1
(C)   2   4   1   3
(D)   1   2   4   3

43. List – I                                                                        List – II
I. Invisible Hand                                                             1. Karl Marx
II. Warrier Knight                                                           2. Adam Smith
III. PQLI                                                                        3. Schumpeter
IV. Surplus Value                                                            4. Morris D. Morris
Codes :
         I   II  III IV
(A)   1   4   2   3
(B)   2   3   4   1
(C)   1   2   3   4
(D)   4   3   2   1

44. List – I                                                                         List – II
I. Four Sector Model                                                     1. Rosestein- Rodan
II. Critical Minimum Effort Thesis                                   2. Arthur Lewis
III. Big Push Theory                                                       3. Mahalanobis
IV. Theory of Unlimited Supply of Labour                      4. Leibeistein
Codes :
         I   II  III IV
(A)   4   3   2   1
(B)   3   4   1   2
(C)   4   1   3   2
(D)   1   2   4   3

45. List – I                                                                           List – II
I. Food-grains Production                                                1. Industrial Sector
II. Level of Prices                                                            2. Revenue deficit
III. Industrial Growth                                                       3. Agricultural Sector
IV. Fiscal Indicators                                                        4. Wholesale Price Index
Codes :
         I   II  III IV
(A)   4   2   1   3
(B)   3   4   2   1
(C)   3   4   1   2
(D)   2   3   4   1

46. List – I                                                                            List – II
I. National Agricultural Policy                                               1. 2004
II. Marine Fishing Policy                                                       2. 1978
III. New Foreign Trade Policy                                              3. 2000
IV. Seventh Finance Commission                                          4. 2004
Codes :
         I   II  III IV
(A)   2   1   3   4
(B)   4   3   1   2
(C)   1   4   2   3
(D)   3   1   4   2

47.  List – I                                                                          List – II
I. GATT                                                                     1. Managing balance of payments
II. IMF                                                                      2. Developmental Finance
III. IBRD                                                                   3. Free Trade
IV. UNO                                                                   4. Maintenance of peace among nations
Codes :
         I   II  III IV
(A)   2   1   4   3
(B)   3   1   2   4
(C)   2   3   1   4
(D)   4   1   3   2

48.     List – I                                                                            List – II
I. Adam Smith                                                                1. Availability doctrine
II. David Ricardo                                                            2. Factors endowment
III. Ohlin                                                                         3. Absolute advantage
IV. I.B. Kravis                                                                4. Comparative advantage
Codes :
         I   II  III IV
(A)   1   2   3   4
(B)   3   4   2   1
(C)   2   4   3   1
(D)   4   3   1   2

49. List – I                                                                  List – II
I. Simple Random Sampling                    1. Equal probability of selection of an item in a trial
II. Random Sampling                              2. Equal probability of each item in  all trials
III. Stratified Random Sampling              3. Random selection of first and systematic of the rest
IV. Stratified Systematic Random
      Sampling                                          4. Random choice of all items from each stratum
Codes :
         I   II  III  IV
(A)   1   2   3   4
(B)   3   1   4   2
(C)   4   3   1   2
(D)   2   1   4   3

50. List – I                                                                   List – II
I. IS-LM Theory                                      1. Franko Modigliani & Richard Brumberg
II. Consumption Ratchet                           2. Lucas & Sargent
III. Life Cycle Hypothesis                         3. Hicks and Hanson
IV. Critics of Keynesian Economics          4. James Dussenbery
Codes :
       I   II   III   IV
(A) 3   4    1     2
(B) 3   2    1     4
(C) 4   3    1     2
(D) 1   3    4     2