Economics Questions and Answers for Competitive Exams | Indian Economy Quiz Set 12

Questions
1 Which of the following satisfies time reversal test but not factor reversal test ?
1 Lespeyres
2 Marshall-Edgeworth
3 Fisher
4 Paasche

Answer: Marshall-Edgeworth
2 For testing the association of attributes which of the following tests is suitable ?
1 t test
2 F test
3 χ2 test
4 Z test

Answer: χ2 test

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3 In the entry prevention model of Bain, firms charge premium over
1 Long period competitive price
2 Short period competitive price
3 Lowest average cost
4 None of the above

Answer: Long period competitive price
4 The slope of the production possibility curve is the
1 marginal rate of exchange
2 marginal rate of substitution
3 average rate of transformation
4 marginal rate of transformation

Answer: marginal rate of transformation
5 The gain in profit income from an increase in immigration according to this diagram is :
1 the area BDL'L
2 the area of WBDW'
3 the areas WBFW' and FDL'L together
4 the areas WBDW' and FDL'L together

Answer: the areas WBFW' and FDL'L together
6 The demand for rare paintings, and rare stamps etc. is explained by which among the following effect ?
1 Snob effect
2 Bandwagon effect
3 Veblen effect
4 None of the above

Answer:Snob effect
7 A market is said to be economically efficient if it maximises
1 consumer surplus
2 producer surplus
3 aggregate of consumer and producer surplus
4 None of the above

Answer:aggregate of consumer and producer surplus
8 1973 oil crisis also triggered a wide spread economic crisis in USA and some European nations. In this context which statements are true ?
1 It led to disillusionment with established policies based on Keynesian economics.
2 There emerged a malady known as stagflation.
3 New classical economics emerged as a challenge to Keynesian economic ideas.
4 All of the above are true

Answer:All of the above are true
9 As per IS-LM framework, an increase in government expenditure will result in :
1 increase in income and interest rate both.
2 increase in income only.
3 decrease in investment and interest rate both.
4 decrease in income and interest rate both.

Answer: increase in income and interest rate both.
10 Which of the following can be considered as leakages in the force of the multiplier ?
1 Higher propensity to import
2 Higher marginal propensity to save
3 Both (1) and (2) above
4 Neither (1) nor (2) above

Answer: Both (1) and (2) above
11 According to Robinson-Uzawa theorem, steady state growth is possible if the technical progress is :
1 only Hicks neutral
2 only Harrod neutral
3 only Solow neutral
4 Both Hicks and Harrod neutral

Answer: only Harrod neutral
12 Which one of the following is not an assumption of permanent income hypothesis ?
1 Transitory income can be both positive and negative.
2 Permanent income depends on human and non-human wealth.
3 Transitory consumption can be both positive and negative.
4 Average propensity to consume is greater than marginal propensity to consume.

Answer:Average propensity to consume is greater than marginal propensity to consume.
13 The Accelerator model predicts that changes in investment are determined by the changes in
1 Interest
2 Output
3 Capital
4 Inventory

Answer:Output
14 Who among the following has not given his model based on the concept of unlimited supply of labour ?
1 D.W. Jorgenson
2 Ranis-Fei
3 W.A. Lewis
4 Gunnar Myrdal

Answer:Gunnar Myrdal
15 Which aspect of economic development did Gunnar Myrdal concentrate upon ?
1 Capital scarcity
2 Human resource scarcity
3 Regional inequalities
4 Population exploitation

Answer:Regional inequalities

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