14206 120 MINUTES

1. The overbidding or the paying of a price higher than the true value of an asset by
the highest bidder at an auction is termed -----------
A) Effluent fee
B) Minimum Efficient Scale
C) Winner’s Curse
D) Limit Pricing

2. The purchase of a commodity or currency where it is cheaper and its sale where it
is more expensive is ----------
A) Arbitrage B) Hedging
C) Swap contract D) Forward contract

3. An upward shift in all firms’ per-unit cost curves resulting from an increase in
input prices as the industry expands.
A) External diseconomy
B) External economies of consumption
C) External economies of production
D) None of the above

4. In an increasing cost industry, the long run supply curve is

A) Downward sloping B) Upward sloping
C) Horizontal straight line D) Vertical straight line

5. The relationship between a firm’s profit maximizing output and the amount it
thinks its competitor will produce is shown by
A) Expansion path B) Isocost line
C) Isoelastic curve D) Reaction curve

6. The current value of an expected future cash flow

A) Present Discounted Value
B) Current cash flow
C) Value of Complete Information
D) None of the above

7. Curve showing all technically efficient combinations of inputs.

A) Production contract curve
B) Product transformation curve
C) Price consumption curve
D) Production possibility curve
8. For perfect complementarity between goods X and Y
A) Marginal Rate of Substitution between X and Y must be zero
B) Marginal Rate of Substitution between Y and X must be zero
C) Both Marginal Rate of Substitution between X and Y and Marginal Rate of
Substitution between Y and X must be zero
D) None of the above

9. The shape of Average Fixed Cost curve is

A) Rectangular hyperbola
B) An ellipse
C) A parabola
D) A monotonically increasing function

10. Perfectly competitive firms are

A) Price searchers B) Price makers
C) Price discriminators D) Price takers

11. When two commodities are jointly consumed, the cross elasticity between them is
A) Negative B) Positive
C) Zero D) Unity

12. A Budget line is the resultant of

A) The market price of commodity X
B) The market price of commodity Y
C) The income of the consumer
D) All of the above

13. The book Essays on the Nature and Significance of Economic Science was
published in the year
A) 1932 B) 1934 C) 1890 D) 1936

14. The concept of utility was introduced by

A) J R Hicks B) Daniel Bernoulli
C) Marshall D) Dupuit

15. The possibility that one will take less care to prevent an accident if one is insured
against is called
A) Moral hazard B) Adverse selection
C) Market signalling D) None of the above

16. Under a simple Cournot duopoly model, each duopolist will produce
A) Half the output B) One fourth the output
C) One third the output D) One fifth the output

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17. Kinked demand curve involves a marginal revenue curve that
A) Has a break
B) Is smooth and continuous
C) Cuts across the demand curve
D) None of the above

18. In pure competition, the demand curve of the individual firm is

A) Perfectly elastic B) Perfectly inelastic
C) More elastic D) Less elastic

19. When α = 0.98 and β = 0.87 in a Cobb Douglas production, the returns to scale is
A) Decreasing
B) Increasing
C) Constant
D) First increasing and then decreasing

20. Duopsony is a market situation in which there are

A) Only two buyers B) Only two sellers
C) Only two buyers and sellers D) Many buyers and two sellers

21. Unemployment resulting from workers’ search for suitable jobs and firms’ search
for suitable workers is ------------
A) Structural unemployment B) Frictional unemployment
C) Seasonal unemployment D) Voluntary unemployment

22. ------------ is the rate of unemployment consistent with zero inflation

A) NAIRU B) Disguised unemployment
C) Cyclical Unemployment D) None of these

23. People’s attempt to save more may lead to fall in output is ----------
A) Real Balance Effect B) Keynes Effect
C) Paradox of Thrift D) Liquidity Trap

24. Theory of business investment that relates planned investment to the rate of
change of output
A) Tobin’s Q Theory
B) Accelerator Theory
C) Koyek’sTheory of Investment
D) Jorgenson’s Theory of Investment

25. According to Monetarists, in the long run, money supply affects

A) Price level B) Real Output
C) Employment D) None of these

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26. The ratio of the monetary cost of a specific bundle of goods and services in a
given period to the cost of the same in an earlier period.
A) Cost Index B) Price Index
C) Base Index D) None of these

27. When the demand for money is completely interest inelastic the LM curve will be
A) Vertical B) Horizontal
C) Relatively flat D) Relatively steep

28. When the demand for money increases, the LM curve shifts
A) Downwards to the right B) Upwards to the left
C) Remains the same D) None of the above

29. The size of the fiscal multiplier is larger

A) The more interest elastic is the demand for money and less interest elastic
is the demand for investment goods
B) The less interest elastic is the demand for money and less interest elastic is
the demand for investment goods
C) The more interest elastic is the demand for money and more interest elastic
is the demand for investment goods
D) The less interest elastic is the demand for money and more interest elastic
is the demand for investment goods

30. The classical aggregate supply curve is a

A) Horizontal straight line B) Vertical straight line
C) Upward sloping D) Downward sloping

31. When the value of marginal propensity to save is 0.5, the value of multiplier will
be
A) 2 B) 4 C) 8 D) 0

32. Aggregatedemand shifts

A) Rightwardwhengovernmentspendingdecreases
B) Rightwardwhen the nominal money supplyincreases
C) Leftwardwhenthereis a decrease in taxes
D) None of the above

33. Simultaneous equilibrium in the money (LM) and goods (IS) market exists
A) At an unlimited number of output levels and rate of interest
B) At only one output level and rate of interest
C) At an unlimited number of output levels and only one rate of interest
D) At only one output level and an unlimited number of rates of interest

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34. A measure of the political effects of unemployment and inflation is called
A) Misery index B) Sacrifice ratio
C) Headcount ratio D) Gini coefficient

35. Which among the following is not a policy implication of the New Classical
Approach?
A) The policy ineffectiveness proposition
B) The output employment costs of reducing inflation
C) The dynamic time inconsistency models
D) A discretion based monetary policy

36. The supporters of Ricardo equivalence claim that

A) National saving would be unaffected by tax cut
B) National saving would increase by a tax cut
C) National saving would decrease by a tax cut
D) National saving would either decrease or increase by a tax cut

37. Hicks theory of business cycles is based on the assumption of

A) A constant multiplier B) An increasing multiplier
C) A decreasing multiplier D) None of the above

38. Insider Outsider model is a feature of

A) New Classical Model B) Post Keynesian Model
C) Keynesian Model D) New Keynesian Model

39. The economic model which assumes that output is always at its natural level
A) New Keynesian Model
B) Real Business Cycle Model
C) New Political Macroeconomic Model
D) None of the above

40. When the consumption function makes a parallel shift upward, the value of the
multiplier will
A) Moderately increase with respect to change in autonomous consumption
component
B) Moderately decrease with respect to change in marginal propensity to
save
C) Become uncertain
D) Remain constant

41. Any arrangement of a set of ‘n’ objects in a given order is called

A) Permutation B) Determinant
C) Notation D) None of the above

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42. Which test can be used to determine whether two or more independent
multinomial random variables with the same outcomes have the same
probability distributions?
A) F test B) t test
C) Chi-square test D) Z test

43. A point on the graph where the function crosses its tangent line and changes from
concave to convex.
A) Point of optimization B) Point of inflection
C) Point of incidence D) None of the above

44. The equation which expresses a relationship between a dependent variable and a
lagged independent variable which changes at discrete intervals of time
A) Difference equation B) Polynomial equation
C) Binomial equation D) None of the above

45. Any quantity computed from a random sample is called

A) Parameter B) Variable
C) Confidence interval D) Statistic

46. Independent variables that are not related to the purpose of study but may affect
the dependent variable.
A) Exogenous variables B) Endogenous variables
C) Extraneous variables D) Discrete variables

47. A diagonal matrix in which all the diagonal elements are equal.
A) Row matrix B) Scalar matrix
C) Square matrix D) Triangular matrix

48. A polynomial function of degree two is called

A) Bivariate Function B) Quadratic Function
C) Linear Function D) Power Function

49. Given the Cost Function C(x)=x2+2x, the marginal cost will be
A) 2x B) 2 C) 2x+2 D) 2+x

50. In a table, the column heading is referred to as

A) Stub B) Body
C) Caption D) None of these

51. Statistical maps which are used for furnishing information on geographical basis
A) Cartograms B) Pictograms
C) Histogram D) None of these

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52. The formula for Mode is
A) 3Mean-2Median B) Mean-Median
C) 2Median-3Mean D) 3Median-2 Mean

53. Arithmetic mean of deviations of all items in a series from their average, counting
all such deviations as positive is
A) Standard Deviation B) Mean Deviation
C) Quartile Deviation D) Variance

54. A comprehensible measure which gives the percentage variation in the dependent
variable that is associated with the independent variable.
A) Coefficient of Determination
B) Coefficient of Variance
C) Covariance
D) Rank Correlation

55. Bayes’ Theorem is based upon

A) Inverse Probability B) Direct Probability
C) Expectation D) None of the above

56. A frequency table in which a sample from the population is classified according to
two or more attributes.
A) Relativity table B) Dissociative table
C) Contingency table D) None of these

57. Sum of age specific fertility rates of women in all age specific groups.
A) Total Fertility Rate B) General Fertility Rate
C) Completed Fertility Rate D) Age Specific Fertility Rate

58. The National Food Security Bill was introduced in LokSabha on

A) 23 December 2012 B) 22 December 2012
C) 23 December 2011 D) 22 December 2011

59. Which among the following schemes was put forward by Dr A P J Abdul Kalam?
A) JNNURM B) SarvaShikshaAbiyan
C) PURA D) JananiSuraksha Programme

60. Which is the most populous state as per 2011 Census?

A) Maharashtra B) Uttar Pradesh
C) Madhya Pradesh D) Andhra Pradesh

61. As per the 2013 budget estimates, the gross fiscal deficit as % of GDP in India is
A) 5.1 B) 5.6
C) 5.3 D) 4.6

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62. The RashtriyaKrishiVikasYojana was launched in the year
A) 2001-02 B) 2002-03
C) 2007-08 D) 2005-06

63. As per the UN Human Development Report 2011, the HDI value of India is
A) 0.547 B) 0.593 C) 0.534 D) 0.53

64. Agricultural Prices Commission was renamed as Commission for Agricultural

Costs and Prices (CACP) in the year
A) 1975 B) 1985 C) 1980 D) 1987

65. Among the stages of India’s population growth, the period 1921-51 is referred to
as
A) Stagnant population
B) Steady growth
C) Rapid high growth
D) High growth with definite signs of declining

66. Who among thefollowing economists used the term dual economy for mixed
economy?
A) Hansen B) Lerner
C) Arrow D) Mahalanobis

67. The market for government and semi-government securities, backed by RBI
A) Gilt edged market B) Capital market
C) Secondary market D) Primary market

68. Density of population in Kerala as per 2012 Economic Review is

A) 925 per sq.km. B) 789 per sq.km.
C) 958 per sq.km. D) 859 per sq. km.

69. As per 2011 census, the percentage of male population in India is

A) 61.25 B) 56.54 C) 51.54 D) 53.89

70. The child sex ratio in Kerala according to 2011 Census is

A) 964 B) 1084
C) 1050 D) 852

71. Black revolution is associated with

A) Overall horticulture production
B) Leather production
C) Petroleum production
D) Fish

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72. A branch of growth theory that explains productivity growth through investment
in human capital.
A) Theory of Unlimited Supply of Labour
B) Theory of Balanced Growth
C) Theory of Big Push
D) New Growth Theory

73. An umbrella term referring to practices and guidelines that make banks
sustainable in economic, environment, and social dimensions.
A) Echo banking B) Environment Banking
C) Ethical Banking D) Green Banking

74. The Water (Prevention and Control of Pollution) Act was passed in the year
A) 1981 B) 1974
C) 1984 D) 1971

75. Development as Freedom is a book written by

A) Jean Dreze B) Paul Streeten
C) Hollis Chenery D) AmartyaSen

76. While calculating HDI, the minimum and maximum values for life expectancy at
birth is given as
A) 25 years and 75 years B) 25 years and 85 years
C) 25 years and 72 years D) 25 years and 83 years

77. According to Harrod-Domar Model of growth, the propensity to save

A) Decreases with income B) Remains constant
C) Increases with income D) None of these

78. In Kaldor’s model of growth, the general level of output in a growing economy at
any one time is limited by
A) Available resources B) Effective Demand
C) Technology D) None of these

79. In the theory of Balanced growth, Rosenstein Rodan states that

A) Social marginal product of an investment is equal to the private marginal
product
B) Private marginal product of an investment is greater than social marginal
product
C) Social marginal product of an investment is greater than private marginal
product
D) None of these

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80. The type of Dualism which implies the use of different production functions in the
advanced sector and the traditional sector
A) Social Dualism B) Geographical Dualism
C) Financial Dualism D) None of these

81. Among the approaches to the measurement of poverty, which method focuses on
the consumption expenditure at which a person’s typical food energy intake is just
sufficient to meet a predetermined food energy requirement?
A) Cost of basic needs approach
B) Food energy method
C) Food share method
D) None of these

82. Non material human capital in the form of improved knowledge, skill and health
which enhances productive efficiency.
A) Tangible capital B) Intangible capital
C) Sunk capital D) None of these

83. According to Leibenstein, every economy is under the influence of

A) Shocks B) Stimulants
C) Shocks and stimulants D) None of these

84. According to Schumpeter, profits are due to

A) Innovation B) Low cost
C) More demand D) Marketing expenses

85. Which one of the following is not one of the indivisibilities as prescribed by
Rosenstein Rodan for launching economic development?
A) Indivisibilities in production function
B) Indivisibilities in consumption function
C) Indivisibilities of demand
D) Indivisibilities in the supply of savings

86. An organism which is only found in the area being considered

A) Endemic B) Biotic
C) Biome D) None of the above

87. Valuation based on the creation of hypothetical market, in which preferences are
stated by the consumer is known as
A) Travel cost method
B) Hedonic pricing method
C) Contingent valuation method
D) None of the above

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88. A foreign exchange transaction followed by an offsetting open market operation
that leaves the monetary base unchanged.
A) Forward Transaction B) Capital Controls
C) Sterilization D) Swap Transaction

89. -------- occurs when lower cost imports from outside the union are replaced by
higher cost imports from another union member.
A) Trade Deflection B) Trade Creation
C) Trade Diversion D) Trade Control

90. The occasional sale of a commodity at a lower price abroad than domestically in
order to sell an unforeseen and temporary surplus of the commodity abroad
without having to reduce domestic prices.
A) Persistent Dumping B) Sporadic Dumping
C) Predatory Dumping D) None of the above

91. Which approach examines and integrates the effect of induced income changes in
the process of correcting BoP disequilibrium by a change in the exchange rate?
A) Elasticity approach B) Absorption approach
C) Monetary approach D) None of the above

92. A tariff expressed as a fixed sum per unit of a traded commodity.

A) Optimum tariff B) Prohibitive tariff
C) Scientific tariff D) Specific tariff

93. Who introduced Price-specie-flow mechanism?

A) Marquez B) Goldstein
C) David Hume D) Harberger

94. Which among the financing facilities provided by IMF was established in 1997 to
meet the need for very short term financing on a large scale?
A) Supplemental Reserve Facility
B) Compensatory Financing Facility
C) Stand-By Arrangements
D) Extended Fund Facility

95. The Purchasing Power Parity theory predicts that a fall in a currency’s domestic
purchasing power (as indicated by an increase in domestic price level) will be
associated with a proportional currency ---------- in foreign exchange market
A) Depreciation B) Appreciation
C) Revaluation D) None of the above

96. The gravity model relates the trade between any two countries to ----------
A) The size of their economies B) Difference in exchange rates
C) Difference in money supply D) None of the above

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97. The vulnerability of even seemingly healthy economies to crises of confidence
generated by events elsewhere in the world is termed -------------
A) Crossing B) Contagion
C) Collectivism D) Collusion

98. Ergonomics refers to

A) The study of interrelation between ecology and economics
B) The study of environmental economics
C) The study of the efficiency of the workers
D) The study of interrelation between ethics and economics

99. Four Asian economies, known as four tigers are

A) Singapore, Taiwan, HongKong, South Korea
B) India, Sri Lanka, Nepal, Bhutan
C) Indonesia, Taiwan, Japan, China
D) India, China, Taiwan, Pakistan

100. A bond that promises payments adjusted for inflation

A) Junk bonds B) Income bonds
C) Indexed bonds D) Growth bond

101. An approach to calculating real GDP that treats goods as providing a collection of
characteristics, each with an implicit price is termed
A) Hedonic pricing B) Cost plus pricing
C) Bain’s Limit Pricing D) None of the above

102. Debt monetization mean

A) A unilateral decision by a debtor not to repay his debt
B) Financing based on loans or the issuance of bonds
C) Borrowing money to finance a deficit
D) The printing of money to finance a deficit

103. The taxpayer’s tax bill divided by his /her total income.
A) Marginal tax rate B) Effective tax rate
C) Inclusive tax rate D) Exclusive tax rate

104. The expenditure which the State may or may not incur is referred to as
A) Necessary Expenditure B) Useful Expenditure
C) Superfluous Expenditure D) Primary Expenditure

105. The rate of taxation decreases as the tax base increases, in

A) Digressive taxation B) Regressive taxation
C) Proportional taxation D) None of these

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106. Which one of the following is not true regarding income tax?
A) Shifting of the tax burden is possible
B) Incidence and impacts are on same persons
C) It can be progressive, proportional or regressive
D) None of the above

107. When a tax is levied on the aggregate sale of all commodities except those for
which the law provides exemption is called
A) Gross Product Value Added Tax
B) Turnover tax
C) General Sales tax
D) None of these

108. Money burden of a tax on the person who ultimately bears it is called
A) Impact B) Incidence
C) Shifting D) None of these

109. Other things being equal, the ----------the demand for the object of taxation, the
more will be the incidence of tax upon the seller.
A) More elastic B) Less elastic
C) Perfectly elastic D) Perfectly inelastic

110. Which committee is associated with the structure of indirect taxation?

A) Wanchoo Committee
B) Raghuram C. Rajan Committee
C) P. C. Hotha Committee
D) Rekhi Committee

111. The theory of tax shifting was developed by

A) Marshall and Ricardo B) Walker and Canard
C) Hobson and Stein D) Dalton

112. If the supply of a commodity is perfectly inelastic and the demand is elastic, the
entire burden will be upon the
A) Buyers than upon the sellers B) Sellers than upon the buyers
C) Seller D) Buyer

113. Capital Gains Tax was introduced in the year

A) 1956 B) 1947 C) 1952 D) 1949

114. In a two sector model, when consumption is 40+0.90Y and investment is 50,
equilibrium output is
A) 90 B) 400 C) 500 D) 900

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115. Zero based budgeting was first introduced in
A) France B) USA
C) Germany D) China

116. The right of a person to retain that which is in his possession and which belongs to
another, until the demands of the person in possession are satisfied.
A) Mortgage B) Hypothecation
C) Pledge D) Lien

117. Loans granted by the banks both for buying capital assets and for working capital
purposes.
A) Term Loans B) Composite Loans
C) Bridge Loans D) Consumption Loans

118. Simultaneous attempts by depositors to withdraw their funds from a bank is

termed
A) Bank run B) Capital loss
C) Capital gain D) None of the above

119. According to balanced budget theory, the balanced budget multiplier is equal to
A) Unity B) Greater than unity
C) Less than unity D) Zero

120. Call loans are

A) Loan backed by securities B) Loan backed by bonds
C) Medium term loans D) Extremely short period loans

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