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QP - MSC - Economics - 2020 - Key Answers With Questions
QP - MSC - Economics - 2020 - Key Answers With Questions
SECTION A : ECONOMICS
Q.1 Akash earns Rs. 𝑚 per week. Let 𝑃𝑥 be the price per unit of food and 𝑃𝑦 be the
price per unit of any other good 𝑦. He can use food coupons to buy food at a
subsidized rate of (1 − 𝑠)𝑃𝑥 per unit, 𝑠 ∈ (0, 1), and this subsidy can be availed
only upto the 𝑥 ∗ amount of food. For any additional purchase beyond 𝑥 ∗ he has to
pay the full market price. If his weekly income is greater than 𝑥 ∗ (1 − 𝑠)𝑃𝑥 , then
the maximum amount of food that he can buy per week is
𝑚
(A) + 𝑥∗
𝑃𝑥
𝑚
(B) + 𝑠𝑥 ∗
𝑃𝑥
𝑚
(C) + 𝑥∗
𝑃𝑥 (1−𝑠)
𝑚
(D) + 𝑠𝑥 ∗
𝑃𝑥 (1−𝑠)
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where 𝑃𝑥 and 𝑃𝑦 are the unit price of the goods 𝑥 and 𝑦 respectively. If the optimal
choice is (𝑥 ∗ = 5, 𝑦 ∗ = 6), then
(A) 𝑃𝑥 = 2𝑃𝑦
(B) 1
𝑃𝑥 = 𝑃
2 𝑦
(C) 𝑃𝑥 = 𝑃𝑦
(D) 1
𝑃𝑥 = 𝑃
3 𝑦
Q.3 The supply curve of a firm in a perfectly competitive market is given by its
marginal cost curve which is
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(D) negative
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Q.5 In 2018, Indians consumed 40 billion kilogram of potato. The average price of
potato was Rs 20 per kilogram. A statistical report indicates that the price
elasticity of demand and supply for potato was -0.40 and 0.50 respectively. The
linear demand and supply functions for potato are:
Supply function: 𝑃 = 𝑄 − 20
Supply function: 𝑃 = 𝑄 − 20
Supply function: 𝑃 = 5𝑄 − 3
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Q.6 𝑆 and 𝑇 are two restaurants competing with each other for profit in a university
campus. The market demand for food in the campus is given by
where 𝑃 is the price of food per unit, 𝑄 is the market demand for food. 𝑄 = 𝑄𝑆 +
𝑄𝑇 where 𝑄𝑆 is the quantity supplied by restaurant 𝑆 and 𝑄𝑇 is the quantity
supplied by restaurant 𝑇. The marginal cost of food production is constant at Rs
20 per unit for both the restaurants who are choosing quantities to maximise
profit. The Cournot-Nash equilibrium quantity of production is
(A) 𝑄𝑆 = 40; 𝑄𝑇 = 40
(B) 𝑄𝑆 = 40; 𝑄𝑇 = 60
(C) 𝑄𝑆 = 60; 𝑄𝑇 = 40
(D) 𝑄𝑆 = 60; 𝑄𝑇 = 60
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(A) in the absence of any externality, a competitive equilibrium is not Pareto efficient
(B) as long as preferences are convex, then every Pareto efficient allocation can be
supported as a competitive equilibrium
(C) as long as preferences are concave, then every Pareto efficient allocation can be
supported as a competitive equilibrium
S2: Moral hazard refers to a situation where one side of the market cannot observe
the actions of the other side.
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Q.9 The necessary condition for a given amount of public good to be Pareto efficient
is that the sum of the marginal willingness to pay should be equal to the marginal
cost. Suppose 10 people live on a street and each of them is willing to pay Rs 2
for each extra unit of streetlight, regardless of the number of streetlights provided.
If the cost of providing 𝑥 streetlights is 𝐶(𝑥) = 𝑥 2 , 𝑥 ≥ 0; what is the Pareto
efficient number of streetlights?
(A) 10
(B) 2
(C) 1
(D) 20
Q.10 If two indifference curves, representing distinct levels of utility, intersect with
each other, then the preference relation violates the
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Q.11 Which one of the following statements is NOT true for pre-independence India?
(A) The British government imposed a heavy customs duty on imports from India
(D) Capital goods from England were imported to develop Railways in India
Q.12 According to the Human Development Index for the year 2017, prepared by the
United Nations Development Programme, India belongs to the group of countries
with
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(A) 1991
(B) 1969
(C) 1949
(D) 1947
Q.14 Which one of the following statements is NOT true about the economic planning
in India?
(B) There is a presence of a large public sector along with free enterprises
(C) It has a regulatory system for industrial activity with an important role of market
mechanism
(D) It aims to achieve a substantial growth of productive capacity in the key sectors
through capital formation
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Q.15 The following table presents the employment shares in agriculture and
manufacturing sectors in India.
Manufacturing 10.6%
(A) 9.3%
(B) 12.8%
(C) 17.7%
(D) 21.9%
(D) employment and unemployment surveys by the National Sample Survey Office
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Q.17 Which one of the following can NOT be a cause for the economic crisis of 1991
in India?
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Q. 19 Which one of the following states had the highest Infant Mortality Rate in 2018?
(A) Gujarat
(D) Bihar
(A) inequality
(B) poverty
(C) inflation
(D) unemployment
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Consumption 150
Investment 50
Government Purchases 50
Export 30
Import 50
If the GNP is 200, then the Net Factor Payments from Abroad is
(A) -20
(B) 20
(C) 30
(D) -30
Q. 22 If an Indian resident owns a luxury cottage in France, the rental income she earns
is part of
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𝑌 = 𝐶(𝑌 − 𝑇) + 𝐼(𝑟) + 𝐺,
Q. 24 A central bank decides to increase money supply. For a given price level, the LM
curve is expected to
(A) shift up and to the left as the real money supply falls
(B) shift down and to the right as the real money supply rises
(C) shift up and to the left as the real money supply rises
(D) shift down and to the right as the real money supply falls
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Q. 26 𝑀𝑑
If the demand for money is = 1000 + 0.2𝑌 − 1000𝑟, where 𝑃 = 200,
𝑃
(A) 20
13
(B) 13
20
(C) 20
7
(D) 7
20
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(A) 14%
(B) 17%
(C) 10%
(D) 13%
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Q. 28 The IS-LM model for a closed economy is given below, where 𝐶 is the
consumption, 𝑡 is the income tax rate, 𝐼 is the investment, 𝑀𝑑 is the money
demand, 𝑃 is the price level, 𝑌 is the output and 𝑟 is the real interest rate.
𝐶 = 100 + (1 − 𝑡)𝑌
𝐼 = 300 − 0.1 𝑟
𝑀𝑑
= 500 + 0.3 𝑌 − 0.3 𝑟
𝑃
If the tax rate 𝑡 = 10% and the real money supply is 1000, the government
expenditure multiplier is
(A) 3
(B) 4
(C) 5
(D) 6
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Q. 29 Consider a Solow growth model without any technological progress. Assume that
the economy is initially in a steady state. Suppose that the savings rate of such an
economy increases. In the new steady state, the marginal product of capital is
_______________ and the output growth rate is ______________ than the old
steady state.
Q. 30 Consider a small open economy with floating exchange rate regime. Some recent
events have led people to believe that the worth of the currency of this country
will be less in the future. Under this belief, the interest rate in that country will
_____________, and its currency will _____________ in the present.
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Q. 31 Let 𝑋1 , 𝑋2 , … , 𝑋100 , 𝑋101 be a random sample from the 𝑁(𝜇, 1) distribution. Let
1
𝑋̅ = ∑100
𝑖=1 𝑋𝑖 be an estimator of 𝜇. The 95% confidence interval for 𝜇 is
100
(D) equal to 1
Then,
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Q. 33 Let 𝑋 and 𝑌 be two random variables with the joint probability density function
1
(A) 2
1
(B) 4
1
(C) 3
2
(D) 3
(A) 5
(B) 10
(C) 22
(D) 11
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(A) 400
(B) 1600
(C) 800
(D) 200
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Q. 36 Let the joint probability density function of two random variables 𝑋 and 𝑌 be
(D) 3 2
𝑓𝑌 (𝑦) = {2 𝑦 , −1 < 𝑦 < 1
0, otherwise
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Q. 37 Let 𝑋 and 𝑌 be discrete random variables with joint probability mass function
𝑝(𝑥, 𝑦) given by the following table.
(A) 𝐸(𝑌) = 1
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Q. 38 𝜃 𝜃
Let 𝑋 ~ 𝐵𝑒𝑟𝑛𝑜𝑢𝑙𝑙𝑖 ( 3), where 𝑃𝑋 (𝑋 = 1) = 3. A random sample of five
(A) 6
5
(B) 9
5
(C) 3
5
(D) 2
5
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Q. 40 In a city, the daily unit price of petrol (𝑋) and diesel (𝑌) follow the normal
distribution with 𝑋 ~ 𝑁(80, 0.04) and 𝑌 ~ 𝑁(80.1, 0.0225). If 𝑋 and 𝑌 are
independent random variables and Φ denotes the cumulative density function of
the standard normal distribution then the probability 𝑃(𝑌 > 𝑋) is
(A) Φ(0.4)
(B) Φ(0.6)
(C) Φ(−0.4)
(D) Φ(−0.6)
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SECTION B : MATHEMATICS
Q.42 Let 𝑀 and 𝑚 be respectively the maximum and minimum values of the function
𝑥−1
𝑓(𝑥) = , 𝑥 ∈ [−1 , 4 ] .
𝑥+2
(A) 1
4
1
(B) −4
(C) 4
(D) − 4
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2𝑥
Q.43 lim (cos 𝑥)1⁄sin equals
𝑥→0
(A) √𝑒
(B) 1
√𝑒
(C) 1
1
(D) −2
𝑑𝑦
(1 + 𝑥 2 ) + 2𝑥𝑦 = 4𝑥 2
𝑑𝑥
1
If 𝑦(1) = , then 𝑦(0) equals
6
(A) −1
(B) 1
(C) − 4
(D) 3
2
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4 𝑎𝑡 = 𝑎𝑡−1 + 3 , 𝑡 ≥ 2
If 𝑎1 = 0 , then
(A) 1 10
𝑎9 = 1 − (4)
(B) 1 10
𝑎10 = 1 − (4)
(C) 1 9
𝑎9 = (4)
(D) 1 9
𝑎10 = 1 − ( )
4
Q.46 1 −2 0
Let 𝑣1 = ( 2 ) , 𝑣2 = ( 2 ) , and 𝑣3 = ( 1 ) . Then
−2 1 1
𝜋
(D) the angle between 𝑣2 and 𝑣3 is 3
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Q.47 −1 1
Let 𝑀= [ ]. Then 𝑀4 equals
1 −1
(A) − 4𝑀
(B) 4𝑀
(C) − 8𝑀
(D) 16𝑀
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𝑓(𝑥1 , 𝑥2 ) = 𝑥1 𝑥2
Then 𝑓 is
(A) convex
(B) concave
Q.50 Let
𝜋 1 1
𝑥 2 |cos ( )| , − <𝑥< , 𝑥≠0
𝑓(𝑥) = { 𝑥 2 2
0, 𝑥=0
2
Let 𝑥0 = . Then
5
(A) 4
𝑓(𝑥0 ) =
25
(D) 𝑓 is differentiable at 𝑥0
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𝑆 = { (𝑥 , 𝑦) ∶ 𝑥 + 𝑦 ≤ 6 , 2𝑥 + 𝑦 ≥ 8 , 𝑥 ≥ 0 , 𝑦 ≥ 0 }.
(A) 𝑥 ∗ = 4 , 𝑧 ∗ = 12
(B) 𝑥 ∗ = 2 , 𝑧 ∗ = 12
(C) 𝑥∗ = 0 , 𝑦∗ = 6
(D) 𝑦 ∗ = 4 , 𝑧 ∗ = 11
minimize − 2𝑥 + 𝑦
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1 𝑦≠0
𝑥𝑦 sin ( ) ,
𝑓(𝑥, 𝑦) = { 𝑦
0, 𝑦=0
(D) differentiable
(A) −4
(B) 4
(C) −6
(D) 6
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𝑑𝑦
= (𝑦 − 2) (𝑦 + 1)2 ,
𝑑𝑡
𝑦 = 2 is
1 1
Q.56 Let 𝑢𝑛 = and 𝑣𝑛 = , 𝑛 = 1, 2, 3, ⋯
√𝑛 𝑛2
(A) ∑∞ ∞
𝑛=1 𝑢𝑛 is convergent and ∑𝑛=1 𝑣𝑛 is divergent
(B) ∑∞ ∞
𝑛=1 𝑢𝑛 is divergent and ∑𝑛=1 𝑣𝑛 is convergent
(C) both ∑∞ ∞
𝑛=1 𝑢𝑛 and ∑𝑛=1 𝑣𝑛 are convergent
(D) both ∑∞ ∞
𝑛=1 𝑢𝑛 and ∑𝑛=1 𝑣𝑛 are divergent
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𝑓(𝑥 , 𝑦) = 2𝑥𝑦 − 𝑥 3 − 𝑦 2 , (𝑥 , 𝑦) ∈ 𝑅 2
is
(A) 4
27
(B) 4
9
(C) 2
27
(D) 2
9
Q.58 𝛽 𝛿 2 5
Let 𝛽 , 𝛿 ∈ 𝑅, and 𝑀= [ ]. If 𝑀 [ ] = [ ] , then the
𝛿 𝛽−2 −1 4
determinant of the matrix 𝑀 is
(A) −1
(B) 7
(C) −13
(D) 1
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minimize 𝑓(𝑥 , 𝑦) = 𝑥 − 2𝑦
subject to 𝑥 2 + 𝑦 2 = 10 ,
is
(A) −2√10
(B) −3 √5
(C) − 5 √2
(D) −7
Q.60 Let 〈𝑎𝑛 〉 and 〈𝑏𝑛 〉 be two real sequences. Which one of the following is true?
(A) If 〈𝑎𝑛 〉 converges and 〈𝑏𝑛 〉 diverges to infinity, then 〈𝑎𝑛 + 𝑏𝑛 〉 converges
(B) If 〈𝑎𝑛 〉 converges to zero and 〈𝑏𝑛 〉 is bounded, then 〈𝑎𝑛 𝑏𝑛 〉 converges
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SECTION C : GENERAL ANALYTICAL
Q.61 A bank is offering a 1 year fixed deposit (FD) paying 5.2% interest per annum,
compounded quarterly. The annual inflation rate is 6%. If Rs. 1000 is invested in
this FD, then the inflation adjusted value of investment at the end of one year
results in an approximate
Q.62 The area 𝐴𝑡 (in hectare) affected by locust attack is growing as per
𝐴𝑡 = 100 × 20.5𝑡 ,
where 𝑡 is the time in hours. How long (in hours) will it take for the affected area
to be exactly equal to 1600 hectare?
(A) 2
(B) 8
(C) 4
(D) 10
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Q.63 The two-wheel bicycles and three-wheel rickshaws are eco-friendly means of
commute. If the total number of such vehicles in a campus is 56 and their wheel
count is 125, then the number of rickshaws in the campus is
(A) 13
(B) 43
(C) 42
(D) 12
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Q.65 Five friends P, Q, R, S and T went to watch a movie. They have contiguous seats
from the central aisle. Q has had a fight with R and doesn’t want to sit near him. P
wants to discuss about the fight with either Q or R. S just wants to watch the
movie in peace by sitting maximally away from both the aisle and chattering
friends. Which one of the following is their seating arrangement?
(A)
(B)
(C)
(D)
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Q.66 Two trains started at 8 AM from the same station and travelled at the average
speed of 40 km/h and 60 km/h in opposite directions. If the trains run non-stop, at
12 noon of the same day the distance (in km) between the two trains will be
(A) 240
(B) 160
(C) 400
(D) 300
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Q.67 The following graph shows the number of female and male employees for a
company for the years 2010 to 2019.
On the basis of the graph, which one of the following statements is true regarding
the ratio of female to male employees?
(D) The number of years for which the ratio exceeds 1 is the same as the number of
years for which the ratio is less than 1
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Q.68 P, Q, R, S, T sat in a circle around a campfire. Two of them are girls. While R has
no girls on either side, P is flanked by girls on both sides. T and Q, sitting next to
each other, are brother and sister. If T is a boy, S is
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Q.69 A 90 cm long wire is cut into two pieces in the ratio 7 : 8. If the larger piece is
bent to form a square, then the area (in cm2) of the square is
(A) 169
(B) 156.25
(C) 144
(D) 110.25
Q.70 When a student walks at a uniform speed of 7 km/h from his home H to reach for
class in room R, she is late by 15 minutes. The next day, she walks at a uniform
speed of 8 km/h from H to R to reach class on time. The distance (in km) between
H and R is
(A) 15
(B) 14
(C) 12
(D) 10
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Q.71 The price of a product P is 𝑥% less than the price of Q and 10% less than the price
of R. If the price of R is 5% more than the price of Q, then 𝑥 equals
(A) 5.5
(B) 5
(C) 6.5
(D) 11
Q.72 P and Q together require 60 days to finish a certain work. They worked together
for 36 days and then Q left the work. P finished the remaining work in another 40
days. Had P been doing the work entirely by himself then the number of days he
would have required to finish the work is
(A) 76
(B) 80
(C) 100
(D) 108
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Q.73 P, Q, R, S and T are roommates in a dormitory. The room has two windows, two
ceiling fans and one door. Every morning P watches birds through the open
window next to him. This bothers Q because he hates the direct sunbeams
streaming in through that window early in the morning. However, he is unwilling
to give up on the bed directly under a fan. T has the best of both worlds because
his bed is below a fan as well as adjacent to a window. Which of the following
figures represent the correct layout?
(A)
(B)
(C)
(D)
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Q.74 P is a brother of Q and Q is a sister of R. Only two of them are married. Their
mother S, went on a pilgrimage with her grandson J right after all her daughters
got married.
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Q.75 P, Q, R and S are four athletes. Three of them are discussing the number of gold
medals won by S. P believes S has at least 3 gold medals. Q indicates that S won
at least one gold and according to R, S has less than 3 gold medals. Given that
only one of them is correct, the number of gold medals won by S is
(A) 3
(B) 2
(C) 1
(D) 0
Q.76 In the year 2015, the number of male employees in a company is 100 and the
number of female employees is 120. The number of male employees grows by
10% between 2015 and 2016 and the number of female employees grows by 20%
during the same period. Which of the following statements is FALSE for the year
2016?
(D) There are 34 more female employees than the male employees.
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(A) U ≥ 5
(B) P > S
(C) V < U
(D) P < S
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Q.78 The following table shows the populations of four countries R, S, T and U for the
years 2001 and 2011.
The average annual growth rate between 2001 and 2011 is highest for
(A) R
(B) S
(C) T
(D) U
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Q.79 If the 𝑛𝑡ℎ term of the sequence 93, 90, 87, 84, … is zero, then (𝑛 − 20)𝑡ℎ term of
the sequence is
(A) 66
(B) 63
(C) 60
(D) 57
Q.80 The following table shows the populations and literacy rates (as percentage of
literates in total population) of all the four states X, Y, Z and W of a country.
(A) 65
(B) 69
(C) 71
(D) 75
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SECTION D : ENGLISH COMPREHENSION
Q.81 People are concerned about ______ in unemployment during the pandemic.
(C) a rise
(D) a raise
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(A) said
(B) sight
(C) speech
(D) spoken
Q.84 The police found that the suspect had plastered the walls of his room with photos
of the victim.
Replace the word plastered in the given sentence without changing the meaning.
(A) painted
(B) pasted
(C) covered
(D) concealed
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Q.85 The rebel members within the party seek to ______ the government.
(A) dispel
(B) dislodge
(C) disloyal
(D) dismember
Q.86 An international team of astronomers from the United States, Australia and New
Zealand ____ detected the ____ explosion seen in the universe from a black hole
in a distant galaxy cluster hundreds of millions of light years away.
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Q.87 The Minotaur was a mythical beast, half man and half bull. It is believed that this
beast lived in the Labyrinth built by King Minos on the Greek island of Crete, and
devoured the prisoners who were sent to the Labyrinth.
Q.88 The _____ budget, presented by the finance minister, is one of the most awaited
government ______ every year.
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Q.89 Reliable information is key to proper decision making. However, the exponential
increase in the volume and variety of information that is accessed by individuals
in everyday life, is making it difficult for them to differentiate between truth and
falsity. This in turn can lead to impaired judgments and unresolved priorities.
Which one of the following statements is FALSE with respect to the given text?
(A) build
(B) built
(C) builted
(D) builded
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Q.91 In India, higher education does not come under the purview of the Right to
Education Act which guarantees free and compulsory education. Nevertheless, it
has been publicly funded and economically accessible to the citizens of the
country. However, over time this welfare-state oriented perspective has changed.
(A) Since; So
(C) Yet; So
(B) it grows
(C) it grew
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Q.95 Despite wearing ear-plugs I could still ________ him snoring next to me.
(A) hear
(B) listen
(C) hear to
(D) listen to
(A) simplicity
(B) simplify
(C) simpleness
(D) simpleton
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Q.98 While the declining wildlife in India is ______ even to a lay observer, it is
disturbing when this observation is further ______ by a scientific study where
more than 15,000 birdwatchers have contributed over 10 million observations.
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Q.99 The male verditer flycatcher has a distinctive blue colour that distinguishes it
from other flycatchers.
(A) separate
(B) visible
(C) different
(D) unique
Q.100 Two workers punched each other in a factory. Subsequently, their supervisor
issued _________.
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