Gokhale sample paper 3 discussion

[neha:)]

Section C:
25. In a statistical test for the equality of a mean, such as H0 : µ = 10, if α = 0.05,
 a) 95% of the time we will make an incorrect inference
 b) 5% of the time we will say that there is a real difference when there is no difference
 c) 5% of the time we will say that there is no real difference when there is a difference
 d) 95% of the time the null hypothesis will be correct

26. Newton’s law of gravity is an example for
 a) Stochastic relationship
 b) Statistical relationship
 c) Deterministic phenomena
 d) Comparing economics to science

15. If the correlation between two variables is -1 and 0, then the covariance between them is
 a) Positive b) Negative c) Zero d) None of all
 
16. If we sum all the probabilities of the conditional events in which the event A occurs which
under statistical dependence, the result is
 a) The marginal probability of A.  b) The joint probability of A.
 c) The conditional probability of A. d) None of these.

11. In a Bernolli experiment the probability of success is 0.2 and the number of trials is 7.
The approximate probability of getting one success is
 a) 0.294  b) 0.367  c) 0.425 d) 0.550

 
9. Five Men and three women are to sit around a circular table. If they chose their positions at a
random. What is the probability that no two women are adjacent?
 a) 1/7 b) 1/9 c) 2/7  d) 2/9

6. Find no of ways in which two books on economics and three books on accountancy can be
arranged in a line.
 a) 60  b) 120 c) 24 d) 40

[The Villain]

25 d
15 c
9 c
6 b
16 b..m nt sure
26 c

[neha:)]

Thanks Ron! Could you pls explain how to do 15, 9 and 6th? Seems like i'm forgetting basic stuff  And are u sure about 26th?

[The Villain]

@ neha
yup i'm 100% sure abt 26

15 we know Cove=rho x*rho y/sd x *sd y
                       =0                               (as rho x=-1 and y is zero)

6. 2 books and 3 other books can be arranged in 5! ways

9..In circular prob total no of ways is n-1!
5 men can be arranged in 4! ways..now 3 women can be seated in 5P3 ways
so (5p3*4!)/7!=2/7

[neha:)]

Thanks a lot!! :)

[Anjali]

For 25th its B

[Anjali]

15th ques galat nahi hai kya ?
How can there be two correlation coefficients ?

[Homer Simpson]

yeah i cant understand 15 either.

25 will be (d) for sure

[neha:)]

Section B:
6. The hypothesis of qualified joint profit-maximization implies that firms
 a) are profit-maximizers b) are unselfish  c) will act as if they had a monopoly d) are able to exploit the gains from limiting competition in some respects, but not in all respects

7. A change in factor prices
 a) changes long-run cost-curve positions b) changes short-run cost-curve positions c) alters the optimal factor proportions d) is likely to do all of the above

11. Among the essential aspects of oligopoly is
 i) Excess capacity ii) Non-price competition
 iii) A large number of firms iv) Mutual recognition of interdependence
 a) Both i) and ii) are satisfactory  b) Both ii) and iii) are satisfactory  c) Only iv) d) None of the above is  satisfactory

20. In the classical model, given an initial aggregate equilibrium at full employment, the long
run effect of an increase in government spending is
 a) increase in the price level c) constant level of output
 b) an upward shift of the aggregate demand curve d) all of the above

26. Milton Friedman and Anna Schwartz believed that monetary policy was ineffective because
of the __ lag.
 a) information c) Decision
 b) recognition d) Implementation

38. According to Friedman, if the stock market rises rapidly in value, the:
 a) demand for money will increase. c) demand for money will be unaffected.
 b) demand for money will decrease. d) marginal propensity to consume will decrease.
 
39. The circular flow of income for a private sector model shows
a) the flow of income between the household and the business sectors
b) the flow of income between government and business sector
c) the flow of income between household, business and government sector.
d) the flow of income between government and household sector.
 

[Homer Simpson]

6(c)
7(d)
11(c)
20(a)
39(a)

[The Villain]

I think 11 should be c

[Anjali]

Tsuki 20th should be D

[Homer Simpson]

yeah 11 is (c)

[Homer Simpson]

Would AD actually shift "upwards"? thats the part i am confused about.

[Anjali]

Tsuki plz recheck ques 20
And 11 mein characterstics to sabhi theek hai , oligopoly mein excess capacity bhi hoti hai
But yes mutual interdependence is pretty imp
Plz guide

[Anjali]

Government spending !

[Homer Simpson]

The rise in government spending will lead to a "rightward shift" for a given P. But since the economy is supply-constrained (AS vertical) the prices will rise accordingly to maintain an equilibrium in long run. In that sense, i am wondering whether i can really call this case an upward shift caused by rise in G.

As for 11, (iii) definitely not - oligopoly has few sellers.

Non-price competition occurs but if i consider the betrand model under oligopoly, its not essential actually. Excess capacity can happen as a deterrence to entry - say stackelburg model with entry deterrence but not in all cases. Thus i think only (iv) is actually "essential"

[Anjali]

Yes seems true tsuki
But for that AD one , I guess AD will shift up .

[neha:)]

Thanks guys :) Any idea about 26th and 38th?

[econ14]

@ Anjali ...if there is a fiscal expansion AD will shift rightward (fiscal policy multiplier times change in G)....but the confusion is because in this case when prices rise and economy moves along AD curve there is a complete crowding out ..........so although AD shifts impact of fiscal policy is zero........ so conclusion is.................?????