DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE ASKED TO DO SO

Subject Code No. : 27 Sl. No. :

2s? 2
TEST BOOKLET
LECTURERS IN NON.GOVERNMENT
AIDED COLLEGES
ECONOMICS
TimeAllowed:2Hours Maximum Marks: 100

: TNSTRUCTIONS TO CANDIDATES :

1 IMMEDIATELY AFTER THE COMMENCEMENT OF THE EXAMINATION, YOU SHOULD

CHECK THAT THIS TEST BOOKLET DOES NOT HAVE ANY UNPRINTED OR TORN OR
MISSING PAGES OR ITEMS ETC. IF SO, GET IT REPIACED BY A COMPLETE TEST
BOOKLET OF THE SAME SERIES ISSUED TO YOU.
2. You have to enter your Roll No. on the Test Booklet
in the Box provided alongside. DO NOT write
anything e/se on the lest Booklet. il
3. This Test Booklet contains 100 items (questions). Each item (question) comprises four
responses (answers). You have to select the correct response (answer) which you want
ffi
to mark (darken) on the Answer Sheet. ln case, you feel that there is more than one correct
response (answer), you should mark (darken) the response (answer)which you consider
v6
iT,f,l

.
the best. ln any case, choose ONLY ONE response (answer) for each item (question). lf .1

more than one response is darkened it will be considered as wrong answer.

4. You have to mark (darken) all your responses (answers) ONLY on the separate Answer
Sheet provided, by using BALL POINT PEN (BLACK). See instructions in the Answer
Sheet.
5. All items (questions) carry equal marks. All items (questions) are compulsory. Each wrong
response will result in negative marking of 0.25 mark.
6. Before you proceed to mark (darken) in the Answer Sheet the responses to various items
(questions) in the Test Booklet, you have to fill in some particulars in the Answer Sheet as
per the instructions in your Admission Certificate.

7 . After you have completed filling in all your responses (answers) on the Answer Sheet and
after conclusion of the examination, you should hand over to the lnvigilator the Answer
Sheef issued to you. You are allowed to take with you the candidate's copy/second page of
the Answer Sheet along with the Test Booklef after completion of the examination for your
reference.

Candidate's full signatu re I nvigilator's signatu re

co - 8/13 Turn over )
LttI (
 Unit - 1 5. Which of the following is true ?
1. Aconsumer's demand curve can be
(A) SAC curves are flatter than
obtained from :

LAC curves
(A) Engelcurve
(B) Price-consumptioncurve (B) LAC curve lies above the SAC

(C) Budget line of the consumer curves

(D) lncome-consumptioncurve (C) LAC curve intersects the SAC

2. Compensated demand curve is curves

based on :
(D) LAC curve is tangent with the
(A) lncome effect and Substitution
SAC curves from below
effect
(B) Substitutioneffect 6 ln Cournot modelof Oligopoly, which

(C) lncome effect statement is correct ?

(D) Elasticity of demand (A) Conjecturalvariation is zero

3. A monopolist always attains (B) One firm is leaderand the other

equilibrium at a point where :
firm is follower
(A) Price is maximum
(C) The equilibrium of the firms is
(B) Marginal revenue is greater
always unstable
than marginalcost
(C) Elasticity of demand is greater (D) There is competition between
than one the firms with respect to price
(D) Marginalcost is minimum
7 Under monopolistic competition long
4. A competitive firm can not earn run equilibrium output of a firm is
supernormal profit in the long run
determined at a levelwhere :
because:
(A) The product is homogenous (A) Average cost is rising

(B) Iax is imposed on the firm (B) Average cost is minimum

(C) There is free entry and exit of (C) Marginal cost is greater than
firms in the long run
average cost
(D) There is no fixed cost in the
long run (D) Average cost is falllng

co - 8/13 (2) Contd.

8. Average Fixed Cost (AFC) curve is :
12. Price Discrimination is profitable if :

(A) U-shaped (A) There is large no. of buyers in

the market
(B) Rectangularhyperbola (B) There is no advertisement cost
(C) Horizontal (C) Elasticityof demand in different
markets are different
(D) Positively sloped
(D) The average cost of production
9. lf the factors are perfectly declines with output

complementary, the isoquant is : 13. Which of the following is true ?

(A) Negatively sloped (A) Rent of a factordepends on the

(B) L-shaped elasticity of supply of the factor

(C) Linear (B) Rent is earned only by land

(C) Rent does not enter into cost of
(D) Concave production of a firm

10. ln case of Giffen good : (D) Rent exists only in the short run
(A) Both incorne effect and 14. Pareto Optimality can not be
substitution effect are negative achieved if :

(B) (A) There is externality in

lncome effect is positive but
prod uction or consumption
price effect is negative
(B) There is perfect competition in
(C) Both income effect and price the market
effect are positive (C) There is CRS in production

(D) Both substitution effect and (D) Marginal Rate of Substitution

(MRS) is equalto the price ratio
price effect are negative
ofthe goods
11. lf cross elasticity of demand is
15. National income is defined as :

positive, it limplies that :

(A) GDP minus depreciation
(A) Goods are inferior (B) NNP minus indirecttax
(B) One good is inferior and the (C) Summation of consumption,
investment and import
other good is superior
(D) Gross value of goods and
(C) Law of demand is violated
services produced in the
(D) The goods are substitute country

co - 8/13 (3) (Turn over )

16. ln Keynesian model equilibrium
income is determined by :
(A) Gross investment
(B) Supply of money
(C) Wage rigidity in labour market
(D) Levelof effective demand in the
economy
17 . Liquidity trap is formed when
(A) Supplyofmoneyisfixed
(B) The demand for money
becomes inf inite at the
minimum rate of interest
(C) The demand for
20. ln lS-LM framework, increase in
money supply fails to increase
income if :
(A) lnvestment is a negative
function of rate of interest
(B) There is wage rigidity
(C) Government expenditure
: remains constant
(D) There is liquidity trap
Unit -2
21. Multiplier-Acceleration Theory of
money Trade Cycles was developed by:

declines with rate of interest (A) Hicks

(D) Money is demanded for (B) Samuelson
precautionary purposes (C) Keynes
18. ln Permanent lncome Hypothesis of (D) Kaldor
Consumption Function, long run
22. Real balance effect increases
consumption income ratio :

(A) Fluctuatesovertime
(A) Export
(B) Remains constant (B) Savings
(C) Gradually declines (C) Rate of interest
(D) Depends on transitory income (D) Consumption
19. ln Keynesian theory, investment 23. The value of money multiplier
multiplier depends on : depends on :

(A) lnvestmentfunction (A) The amount of bank deposit

(B) Marginal propensity to (B) The Cash-Reserve Ratio
consume
(cRR)
(C) Employment of labour
(C) Statutory Liquidity Ratio (SLR)
(D) Amount of Government
expenditure (D) Repaymentrate of bankcredit

co - 8/13 (4) Contd

,
24. ln the Keynesian Theory, moneY is (C) Supply of money decreases
demanded for: (D) Rate of interest declines
(A) Transaction purposes only 28. Cost-push inflation occurs when :

(B) Businessinvestment (A) The central bank sells bonds in

(C) Speculative motive only the open market

(D) Transaction, precaution and (B) Demand for goods and

services increase
speculative purposes
(C) Wage rate increases
25. The long run Phillips curve is: (D) Money supply declines
(A) Horizontal 29. To check inflation, the Central Bank:
(B) Vertical (A) lncreases bank rate
(C) Positively sloped (B) Encourages export of goods
(D) Negatively sloped (C) Purchases bonds in the open
market
26. Which of the following is nottrue ?
(D) Reduces cash-reserve ratio
(A) Non-Banking financial
institutions can mobilise
30. lnAcceleration Principle, investment
is determined by:
deposit
(A) Rate of interest
(B) Non-Banking financial
(B) Wage rate
institutions can provide loan
(C) Money supply
(C) Non-Banking financial (D) lncome level
institutions can issue cheque
31. tn Ricardian model trade takes place
(D) Non-Banking financial between two countries due to :

institutions can supply fund for

(A) Difference of taste in the two
investment countries

27. lf the Central Bank sells bond in the (B) Difference in the quality of
products in the two markets
open market:

(A) (C) Difference in production

Supplyofmoneyincreases
technology of the two countries
(B) Credit creation of commercial
(D) Difference in labour supply in
banks increases the two countries

co - 8/13 (5) (Turn over)

 32. Terms of trade is defined as : 35. Balance of payments include :

(A) Export minus lmport (A) Value of export and import of

(B) Ratio of Home currency and merchandise

Foreign currency (B) Trade balance and remittances

(C) Ratio of price of export and (C) Value of export and import of

price of import
services and net foreign
investment
(D) Share of export in balance of
(D) Balance of current account and
payments
capital account in external
33. lf the Production Possibility Frontier transactions
(PPF) is concave in a X-Y plane,
36. lf tariff rate is raised :

then the opportu n ity cost of (A) Expoft increases

producing X
(B) lmpoft declines
:

(A) Remains constant (C) Exchange rate declines

(B) lncreases with increase in
(D) Balance of payment worsens
production of X
37. The effectiveness of devaluation in
(C) Decreases with increase in
improving BOP depends on :
production of X
(A) Reduction of export
(D) lncreases upto a certain point
(B) Marshall-Lernercondition
and then declinses
(C) Reduction of tariff rates
34. ln Heckscher-Ohlin modelthe basis (D) lmprovement of terms of trade
1.q
of trade between two countries is :

38. ln flexible exchange rate system :

(A) Distance between the two

(A) The exchange rate is
countries
determined by the volume of
(B) Constant factor coefficients in trade
production
(B) By convertibility of foreign
(C) Difference in factor currency
endowments in the two (C) By the demand for and supply
countries of foreign exchange

(D) Difference in taste and (D) By the movement of gold

preference in the two countries between the countries

co - 8/13 (6) Contd

39. IMF was established : 43. Common property resources are :

(A) To help economicdevelopment (A) Used beyond sustainable limits

of European countries (B) Under utilized by private users
(B) To correct deficit in BOP of
(C) Preserved for furture use by
member countries
private agents
(C) To build up infrastructure in
(D) Used efficiently as per market
developing countries
rules
(D) To help Human Development in
developing countries 44. For maintaining sustainable
development:
40. WTO was established :

(A) At Bretton WoodsAgreement

(A) Natural resources need to be
used according to private cost
(B) At the Uruguay Round of Talks
only
of GATT
(C) At the Summit of G-8 countries
(B) Efficiency in market solution is
not always necessary
(D) At the meeting of the ASEAN
countries (C) Conservation of natural
resources is necessary for
Unit -3 future use
41. ln Harrod Growth model, Knife-edge
problem arises due to :
(D) Govt. intervention always fails
to control the use of common
(A) Flexibleproductioncoefficients
property resources
(B) Fixed capital-output ratio and
constant saving rate 45. ln case of renewable resources:
(C) Period analysis of the model (A) Growth rate and depletion rate
(D) Substitution between capital are always equal
and labour (B) lf depletion rate exceeds
42. ln steady state of Solow growth growth rate, there will be
model: resource degradation
(A) Capital-labourratio increases (C) Pigovian tax can not controlthe
(B) Capital-labour ratio declines use of the resources

(C) Saving rate is flexible (D) Excess use of the resource is

(D) All the variables grow at the not a problem for sustainable
same rate development

co - 8/13 (7) (Turn over)

46. ln CoaseTheorem: 50. ln Lewis modelof surplus labour
(A) Externality problems are (A) Supply of labour is elastic
always solved (B) Supply of labour is perfectly
(B) lmposition of tax does not elastic
cause marketfailure (C) Supply of labour is inelastic
(C) Externality problems are solved (D) Supply of labour is perfectly
if property rights are well- inelastic
defined and negotiation cost is
51. The theory of Big Push was
zero pioneered by:
(D) Bargaining power of the (A) P.Rosenstein-Rodan
individuals does not depend on
(B) l/oriss Dobb
property rights
(C) Arthur Lewis
47. First Five Year Plan was adpoted in (D) J. M. Keynes
lndia in the year:
52. ln balanced growth:
(A) 1e47
(A) Each sector of the economy is
(B) 1ee1 developed on priority basis
(c) 1e51
(B) All the sectors are developed
(D) 1e62 simultaneously

48. ln decentralized planning decisions (C) Agricultural sector is

for economic development are taken :
developed first

(A) Bythe CentralGovt. (D) Emphasis is given on the

development of infrastructu re
(B) By the Planning Commission
(C) Bythe State Govt. 53. ln Economic Dualism :

(D) Bythe Panchayats atthe local (A) There is coexistence of

agriculture and ind ustry
level
(B) There is coexistencebf modern
49. The theory of stages of economic and traditibnal methods of
growth was advocated by:
Production ' - '*'
(A) J. R. Hicks (C) There is coexistence of road
(B) W W. Rostow transport and railways
(C) P.A. Samuelson (D) There is coexistence of male

. (D) Joan Robinson worker and female labour

co - 8/13 (8) Contd

54. ln a labour surplus economy : (B) Non-excludability
(A) Choice of technique should be (C) Rivalry
capital-intensive (D) Restricted access to the good
(B) The groMh of heavy industries
58. Which of the following statement is
can absorb more labour
correct ?
(C) Choice of technique should be
labour-intensive
(A) lndirect tax is progressive.
(D) lnvestment on small-scale and
(B) Tax evasion is less in direct tax.
cottage industries may not be (C) lndirect tax has excess burden.
helpful for employment (D) ln proportionaltax system, the
generation tax rate increases with income.

55. ln vicious circle of poverty :

59. Which of the following is not used as
(A) Low saving is the cause as well the basis of ability to pay tax ?
as effect of low income (A) lncome
(B) Saving is high but investment
(B) Wealth
is low
(C) Consumption
(C) People ate poor due to
(D) Family size
illiteracy

(D) lncome distribution is unequal 60. Human development index is a

composite of basic three indicators

56. Which of the following is not included
of human development :
in revenue expenditure of the Govt. ?

(A) (A) Life expectancy, literacy rate

Salaryof the Govt. employees
and standarad of living
(B) Pension of the Govt. employees
(B) Longevity, standard of living
(C) Purchase of a machine for a
and standard of income
power plant of the Govt.

(D) lnterestpaymenton publicdebt

(C) Knowledge, standard of living
and genderequality
57. One important feature of a public
(D) Standard of living, gender
good is :

development and political

(A) High usercharge
empowerment

co - 8/13 (e) (Turn over)

 Unit -4 65. The percentage of irrigated land in
61. The function of the Finance lndia is:

Commission of India is : (A) 50

(A) To regulate the financial market (B) 60
of the country (c) 44
(B) To control inflation in the country (D) 3e
(C) To supply credit to the industrial
66. The share of agriculture in the GDP
sector
of lndia in 2014-15 is :
(D) To frame guidelines for (A) 25%
al location of fi nancial resou rces
between the centre and the
(B) 14o/o
states
(c) 20%
(D) 30o/o
62. What percentage of population are
below the poverty line in lndia in 67. The highest rice producing state in
2011-12 ? lndia is :
(A) 21.e% (A) Punjab
(B) 25.7% (B) Uttar Pradesh
(C) 37.2o/o (C) West Bengal

(D) 28.2% (D) Andhra Pradesh

63. Which of thefollowing is nota poverty 68. One important aspect of trade
removalprogramme ? liberalization is:

(A) NREP (A) Removalof poverty

(B)* HYV (B) lnvestmentforagriculture
(c) IRDP
(C) Reduction of tariff rates
(D) RLEGP
(D) Emphasis on development of
cottage industries
64. What is the value of the Gini co-
efficient for an income distribution 69. Policy of disinvestment means :

characterized by complete equality of (A) Encouragement to FDI

income ? (B) Greater subsidy to the
(A) Zero industries

(B) 0.5 (C) Sale of equity shares of PSUs

to private buyers
(c) 1

(D) "" (infinity) (D) More investment in PSUs

I
co-8/13 (10) Contd
70. The sectoral composition of GDP in 74. The share of service sector in lndia's
lndia has changed in favour of : GDP in the current year is :

(A) Manufacturingsector (A) 48%

(B) Agriculture (B) 72%
(C) Externalsector (c) 62%
(D) Service sector (D) 51%

71. Under the New lndustrial Policy of 75. The wholesale price index of Food
lndia emphasis has been given on : Articles has increased in lndia in the
(A) fhe expansion of public sector last two decades by :

industries (A) More than six times

(B) The growth of the private sector (B) Five times
industries (C) More than ten times
(C) More subsidy to the sick (D) Less than ten times
industries
76. The biggest share of lndia's export
(D) Employment generation in
goes to :

agriculture
(A) China
72. The share of employment in the (B) usA
unorganized informal sector in lndia
(c) uK
is:
(D) LatinAmerica
(A) 60%
(B) 22% 77. FEMA means:

(C) 92o/o
(A) Foreign Exchange Monitoring
Authority
(D) 30o/o
(B) Foreign Exchange Management
73. lndia's fiscaldeficit in2015-16 is :

Act
(A) 5.60/0 of GDP
(C) Foreign Exchange Management
(B) 3.99% of GDP
Authority
(C) 4.47% of GDP
(D) Foreign Exchange Monitoring
(D) 3.2% of GDP
Act

co - 8/13 ( 11 ) ( Turn over )

78. The limit of FDI has been increased (B) Nationalsavingscertificate
upto 100% in lndia in the field of :
(C) Certificate of deposit
(A) Education (D) Commercial paper
(B) Defence
83. NABARD is meant for:
(C) lnfrastructure
(A) National bank for agriculture
(D) lnsurance
and ruraldevelopment
79. ln the period of trade liberalization :
(B) Growth of National lncome
(A) Export of lndia has declined (C) Export Promotion
(B) lmport of lndia has declined (D) Supply of finance to industries
(C) Both export and import of lndia
have increased 84. The growth in book value per share
shows the
(D) Total volume of trade of lndia
:

has declined (A) Rise in the share price

80. lndia's trade deficit in the period of
(B) lncrease in the physical assets
of the firm
trade liberalization :

(A) Has declined (C) lncrease in the networth

(B) Has increased (D) Growth in reserves

(C) Has remained unchange 85. ln the bullmarket:

(D) Has become zero (A) The stock prices are increasing
Unit -5 (B) Each peak is higher than the
. lnvestment made on a house property
previous peak
81

isa: (C) Each bottom is higherthan the

(A) Financialinvestment previous bottom

(B) Economicinvestment (D) Both (B) and (C) are true

(C) Non-negotiable financial 86, Nationalisation of Banks first took
investment place in lndia in the year:
(D) Non-financialinvestment
(A) 1e47
82. Which one of the following is not a (B) 1e51
money market security ? (c) 1e6e
(A) Treasurybills (D) 1ee1

co - 8/13 (12) Contd.

87. The calloption price is higherwhen : 91. "National Rural Health Mission
(A) The sticking price is higher (NRHM)" was launched in :

than the stock price (A) April,2004

(B) The sticking price is lowerthan (B) April,2005
the stock price
(C) October,2004
(C) The option period is shorter
(D) October,2005
(D) The option period is longer and
the striking price is lower 92. As per Population Census 2011 in
which state of lndia literacy rate is
88. SEBI became statutory body in the
lowest ?
year:
(A) 1ee1
(A) Bihar
(B) 1se2 (B) Rajasthan
(c) 1ee3 (C) Orissa

(D) 1ee4 (D) Sikkim

89. Which of the following is not included 93. The Sarva ShikshaAbhrlan (SSA) is
under Microfinance ? being implemented for the children
(A) Supply of credit to small of the age group :

enterprises (A) 6-14 years

(B) Supply of finance to Self-Help (B) 4-12years
Groups
(C) 5-15 years
(C) Supply of credit to big
industries
(D) 7-15 years
(D) Financial support to small 94. Which of the following is not a
SAVETS constituent part of the 'green index'

90. A market where new securities are

constructed by the environmentally

bought and sold for the first time is sustainable development division of

known as a market the World Bank ?

(A) Primary (A) Production assets

(B) Secondary (B) Naturalresources
(C) Tertiary (C) Social assets
(D) Capital (D) Human resources

co - 8/13 (13 ) (Turn over )

 I

95. "Annapurna Scheme" launched by 98. To control inflation, the monetary

the Government of lndia from April, policy adopted by the RBI in recent
2000 was meant to provide food years is :

security to the :
(A) Purchase of bonds from the
(A) Rural poor living below the open market
poverty line
(B) Greater lending for
(B) Urban shanty-dwellers living
consumption
belowthe poverty line
(C) To increase the bank rate
(C) Senior citizen not covered
under national old age pension
(D) To increase loan for export
promotion
scheme
(D) Victims of natural calamities 99. The length of National Highways has
who are forced to migrate to increased in lndia from 1990-91 to
other places 2011-12by:
96. Whatwas infant mortality rate in India (A) 70.3 thousand KM
in 2014 ? (B) 50.4 thousand KM
(A) 40 perthousand (C) 42.6 thousand KM
(B) 44 perthousand (D) 30.8 thousand KM
(C) 39 perthousand
100. The installed capacity of electricity
(D) 41 perthousand
generation in India has increased in
97. Non-performing asset of a bank is :
the last two decades by :

(A) Non-recovery of bank loan

(A) 150%
(B) Non-repayment of interest on
(B) 220%
Ioan of the bank
(c) 50%
(C) Decline of bank deposit
(D) Lending to the priority sector
(D) 180%

IIIITTIIIIIIIIT

co - 8/13 (14) Contd

 SPACE FOR ROUGH WORK

co - 8/'13 (2,530) (15) Economic