UGC NET Economics - Previous Years Solved Papers | Paper II November 2017

1. Consider the following diagram with two parallel demand curves AB and CD :

The price elasticity of demand at :

1. points R and S is equal
2. point R is greater than that at point S
3. point R is less than that at point S
4. points R and S is infinity

Answer: Option (2)

2. In 2016, the Nobel prize in Economics was awarded for :

1. analysis of trade pattern and location of economic activity
2. analysis of asset prices
3. analysis of globalization
4. contributions to contract theory

Answer: Option (4)

3. Which of the following is not true for perfect competition?

1. Price =LAC
2. Market demand curve for a commodity is horizontal to X-axis
3. Firms earn normal profits
4. In the long run firms operate at the minimum point of average cost

Answer: Option (2)

4. Which amongst the following statements is correct ?

1. The minimum point of AVC and MC are at the same level of output
2. Minimum of AVC is at lesser output than the minimum of MC
3. Minimum of AVC is at larger output than the minimum of MC
4. Any of the above is possible depending upon operating of the law of returns

Answer: Option (3)

5. A firm in monopolistic competition advertises in order to :

1. make its product more similar to its competitors’
2. shift the demand curve for its product to the left
3. make the demand for its product less price elastic
4. reduce the industry’s price

Answer: Option (3)

6. For an increase in the effective minimum wage to have less of an impact on employment, which of the following is correct ?

(a) The demand for labour is relatively inelastic

(b) The demand for labour is relatively elastic

(c) The demand for labour is a derived demand

Choose the correct answer from the code given below :

7. Assume that people like onions on their hamburgers. If the supply of hamburgers decreases, the demand for onions will most likely :

1. remain unchanged because hamburgers and onions are different goods
2. increase because hamburgers and onions are substitutes
3. increase because hamburgers and onions are complements
4. decrease because hamburgers and onions are complements

Answer: Option (4)

8. In the shortrun, which of the following costs must continuously decrease as output increases ?

1. Total variable cost
2. Total fixed cost
3. Average variable cost
4. Average fixed cost

Answer: Option (4)

9. If export price increases by 5 percent and import price by 20 percent, the commodity terms of trade is :

1. 0.91
2. 0.87
3. 0.25
4. 4

Answer: Option (2)

10. If economic agents perfectly anticipate policy changes and if all prices, including wages, are completely flexible, which of the following will be true in the long run ?

1. There will be no trade - off between inflation and unemployment
2. The unemployment rate will be less than the natural rate of unemployment
3. The price level will be constant
4. Changes in the money supply will not lead to changes in the price level

Answer: Option (1)

11. Who made the statement, “Inflation is everywhere and always a monetary phenomenon’’ ?

1. Milton Friedman
2. James Tobin
3. T.W. Swan
4. A.W. Phillips

Answer: Option (1)

12. Who argued that Keynes’s theory of equilibrium with involuntary unemployment is a special case of the general equilibrium model, augmented to include money ?

1. W. Leontief
2. J.R Hicks
3. M. Friedman
4. D. Patinkin

Answer: Option (4)

13. Adam Smith advocated which of the following ?

(a) laissez faire

(b) the invisible hand

(c) free trade policy

(d) competitive markets

1. (a) and (b)
2. (b) and (c)
3. (a), (b),
4. (c) and (d)

Answer: Option (4)

14. Indicate the sequence of the following in terms of their implementation with reference to India :

(a) Income tax

(b) Expenditure tax

(c) Value - added tax at the state level

(d) Service tax

1. (a), (c), (b), (d)
2. (a), (b), (d), (c)
3. (b), (c), (d), (a)
4. (c), (d), (a), (b)

Answer: Option (2)

15. Indicate the sequence of the following in terms of their implementation with reference to India :

(a) Income tax

(b) Expenditure tax

(c) Value - added tax at the state level

(d) Service tax

1. (a), (c), (b), (d)
2. (a), (b), (d), (c)
3. (b), (c), (d), (a)
4. (c), (d), (a), (b)

Answer: Option (2)

16. Arrange the following grouping of the nations from lower to higher order of integration.

(a) F.T.A

(b) Economic Union

(c) Common Market

(d) Custom Union

1. (a), (d), (c), (b)
2. (a), (c), (b), (d)
3. (b), (a), (d), (c)
4. (b), (c), (d), (a)

Answer: Option (1)

17. A Country can have an increased surplus in its balance of trade as a result of :

1. declining imports and rising exports
2. higher tariffs imposed by its trading partners
3. an increase in domestic inflation
4. an increase in capital inflow

Answer: Option (1)

18. Which of the following statements is/are true for the current account of a country ?

(a) it shows the net income generated in the foreign trade sector

(b) it relates to claims and liabilities of financial nature

1. Only (a) is true
2. Only (b) is true
3. Both (a) and (b) are true
4. Neither (a) nor (b) is true

Answer: Option (1)

19. Which amongst the following economists can be classified as strong advocate of protectionist policy of trade ?

1. F. List and A. Hamilton
2. Adam Smith and David Ricardo
3. J.S. Mill and P. Krugman
4. A. Hamilton and J.S. Mill

Answer: Option (1)

20. An increase in which of the following would be most likely to increase Long - run growth in developing countries?

1. Tariffs on imported capital goods
2. Subsidies to business for purchases of capital goods
3. Unemployment compensations
4. Pension payments

Answer: Option (2)

21. What is Baran’s explanation for under development in Asia, Africa and Latin America ?

1. Monopolistic business from abroad
2. Conservative ruling coalitions
3. Weak domestic middle class
4. All of the above

Answer: Option (4)

22. The Benefit Theory of allocation of tax burden was given by :

1. Seligman
2. Lindhal
3. Dalton
4. Pigou

Answer: Option (2)

23. Consider the following :

(a) Oligopolistic market structure

(b) Economics of scale

of the above, which are the essential feature of Rosenstein Rodan’s approach to development ?

1. Both (a) and (b) above
2. Neither (a) nor (b) above
3. Only (a)
4. Only (b)

Answer: Option (1)

24. If marginal propensity to consume (m.p.c) = average propensity to consume (a.p.c) for all levels of income (Y) then the corresponding consumption function will be :

1. C=a+bY
2. C=bY
3. C=bY2
4. C=a+bY2

Answer: Option (2)

25. Which of the following goods is covered under GST as on 1ST July, 2017 ?

1. Electricity
2. Liquified Petroleum Gas
3. High Speed Diesel
4. Petroleum Crude

Answer: Option (2)

26. The greater the elasticity of supply, the greater is :

1. Incidence of tax on buyers
2. Incidence of tax on sellers
3. Impact of tax onsellers
4. Impact of tax on buyers

Answer: Option (1)

27. The ability - to - pay principle of taxation is logically most consistent with the normative notion of :

1. tax neutrality
2. horizontal equity
3. value - added taxation
4. vertical equity

Answer: Option (4)

28. Principle of maximum social advantage is concerned with :

1. Taxation only
2. Public expenditure only
3. Public debt only
4. Both taxation and public expenditure

Answer: Option (4)

29. Consider the following statements about optimal tariff :

(a) The beneficiary country is a large country in the world market for a particular good.

(b) A deviation from optimal tariff will lead to fall in welfare.

Of the above, which statement is correct ? Choose the answer from the code below :

1. Both (a) and (b) are correct
2. Neither (a) nor (b) is correct
3. Only (a) is correct
4. Only (b) is correct

Answer: Option (1)

30. Which of the following is a distinctive implication of the New Trade Theory developed by Melitz as different from the New Trade Theory ?

1. Trade increases the average productivity as more productive firms expand
2. Helpful state intervention
3. Trade encourage R & D and lead to new products
4. A country may both export and import the goods from the same industry

Answer: Option (1)

31. The conjecture that inequalities of income first increase with development and then decrease with further development also known as ‘Inverted U’ hypothesis has been :

1. Supported by all empirical studies
2. Supported mainly by cross section studies and not by time series studies
3. Supported by time series and not by cross section studies
4. Generally repudiated by empirical studies

Answer: Option (2)

32. The ultimate effect of the ‘invisible hand’ of Adam Smith is that in a competitive economy everyone :

1. benefits if each acts in his/her own interest
2. will increase their profits in a free market
3. should act to maximise economic growth
4. should act to promote the public interest

Answer: Option (1)

33. Match List - I with List - II and select the correct answers from the code given below :

Code

(a) (b) (c) (d)

1. (ii) (i) (iv) (iii)
2. (iv) (iii) (i) (ii)
3. (ii) (iii) (i) (iv)
4. (iii) (ii) (iv) (i)

Answer: Option (3)

34. If the central prediction of the growth model of Solow is valid then :

1. Per capita real GDP difference among nations will increase
2. Per capita real GDP difference among the nations will diminish
3. Economic freedom as measured by Heritage Foundation Index will decrease
4. Population growth rate in rich countries will increase

Answer: Option (2)

35. Given the consumption function, C=0.75 Y and the investment function, I=110−0.25 i, then the equation of the IS function will be :

1. Y=110−0.75 i
2. Y=440−i
3. Y=500−0.25 i
4. Y=400−0.75 i

Answer: Option (2)

36. In which of the following sectors, the employment elasticity has been estimated to be greater than one during the period (2004 - 05 to 2009 - 10) :

1. Agriculture
2. Construction
3. Manufacturing
4. Mining and Quarrying

Answer: Option (2)

37. Arrange the following in the chronological order :

(a) Mahalnobis model

(b) Introduction of rolling plan

(c) Declaration of plan holiday

(d) Inclusive growth strategy

Select the answer from the code below :

1. (b), (a), (c), (d)
2. (a), (c), (b), (d)
3. (c), (a), (b), (d)
4. (a), (c), (d), (b)

Answer: Option (2)

38. Which amongst the following statements are true in relation to Indian economy during the period 2014-16 ?

1. Exports have been buoyant
2. Private capital investment happened at brisk pace
3. Both (1) and (2) are true
4. Neither (1) nor (2) is true

Answer: Option (4)

39. The code used under GST for classification of goods is called :

1. NIC
2. HSN
3. GSTN
4. ITC

Answer: Option (2)

40. If CPI based inflation rate in a country is given as :

This trends will be described as :

1. Disinflation
2. Deflation
3. Creeping inflation
4. Stagflation

Answer: Option (1)

41. Which among the following states has the smallest % of urban population as per census 2011 ?

1. Bihar
2. Odisha
3. Himachal Pradesh
4. Meghalaya

Answer: Option (3)

42. If the price data for 1980 and 2000 are given and quantity data are given only for the year 2000 then which type of index number, taking 1980 as the base can be constructed ?

1. Laspeyre’s Index
2. Paasche Index
3. Fisher Index
4. Kelly Index

Answer: Option (2)

43. If two events A and B are mutually exclusive then which one of the following is correct ?

1. P(A+B)=P(A)+P(B)
2. P(AB)=P(A)⋅P(B)
3. P(AB)=P(A)/P(B)
4. P(A/B)=P(A)−P(B)

Answer: Option (1)

44. If a sample of 100 is to be taken from a population of 1,000 farmers consisting of marginal, small and large farmers, which of the following will be the most appropriate sampling method ?

1. Simple random sampling
2. Cluster sampling
3. Stratified random sampling
4. Systematic sampling

Answer: Option (3)

45. The sum of squares of deviations of a set of values is minimum when deviations are taken about :

1. Arithmetic mean
2. Harmonic mean
3. Median
4. Geometric Mean

Answer: Option (1)

46. Match the following in List - I and List - II and answer from the code given below :

Code

(a) (b) (c) (d)

1. (i) (ii) (iii) (iv)
2. (iii) (i) (ii) (iv)
3. (ii) (i) (iv) (iii)
4. (iv) (iii) (i) (ii)

Answer: Option (3)

47. Assertion (A) : Many developing countries demand that movement of natural persons across countries should be promoted.

Reasons (R) : The developing countries have comparative advantage in labour intensive services.

Answer: Option (1)

48. Assertion (A) : Revealed preference theory excludes the explanation of Giffen good.

Reasons (R) : Revealed preference theory considers only negative income elasticity of demand

Answer: Option (3)

49. Assertion (A) : Indian agriculture still absorbs a major part of workforce.

Reasons (R) : Employment elasticity in agricultural sector is high.

Answer: Option (3)

50. Assertion (A) : Friedman argues that money demand function is a stable function.

Reasons (R) : Friedman treats money as one type of asset in which wealth holders can keep a part of their wealth.

Answer: Option (2)