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1. We have the following data or a country:
GDP at market prices = Rs. 20,000 crore
Gross Domestic Capital Formation = Rs. 5,000 crore
Depreciation = Rs. 3,000 crore
Exports = Rs. 3,000 crore
Imports = Rs. 6,000 crore
Net invisible earnings from abroad = Rs. 2,000 crore
Indirect taxes less subsidies = Rs. 2,000 crore
1.Then, the Net Domestic Product at factor cost is
(a) Rs. 15,000 crore (b) Rs. 16,000 crore (c) Rs. 17,000 crore (d) Rs. 18,000 crore (e) Rs. 20,000 crore
2. Consider the same country as in Question 6. The gross savings rate is –
(a) 10 per cent (b) 15 per cent (c) 20 per cent (d) 25 per cent (e) 75 per cent.
How do you calculate this?
3. 9. Suppose X and Y are two positive valued random variables, each taking 10 values. Both have the same mean, but the variance of Y is twice the variance of X. Which of the following holds?
(a) Max (Xi) > Max (Yi) (b) Max (Xi) < Max (Yi) (c) Max (Xi) = Max (Yi)
(d) Max (Xi) < Max (Yi) (e) None of the above
4. 10. Suppose the female wage rate in agriculture is 70% of the male wage are but women workers have 50% higher probability of finding employment than men workers. Then the expected wage income of women which is –
(a) higher than that of the men (b) lower than that of the men (c) the same as that of the men (d) cannot say.
5. The function ƒ(x) is defined as
ƒ(x) = 1 if x is rational
ƒ(x) = 0 if x is rational
Then ƒ(x) is
(a) continuous everywhere (b) continuous only at x rational
(c) continuous only at x rational (d) nowhere continuous
6. Define 1 x 1 = 1 if 1 > 0
= -1 if 1 < 0
Then 1 x 1 ≤ a implies
(a) –a ≥ x ≥ a (b) –a ≤ x ≤ a (c) X ≤ a (d) None of the above
7. Given that the aggregate consumption function is 5000 + O.εY and the level of investment in the economy is 10,000, the values of the multiplier and the national income respectively are:
(a) 5; 50,000 (b) 0.2; 2,000 (c) 5; 75,000 (d) 0.2; 7,500
8. person’s income increased by 70% over a 2 years period. During this period the consumer price index increased by 50% in the first year and 20% in the second year. This person’s real income at the end of two years compared to the beginning:
(a) was 10% lower (b) was unchanged (c) was 5.56% lower (d) None of the above
9. Log10, x^n
(a) log, x / log 10 (b) log 10 / log x (c) log, x / log10, e (d) log10 e / log, x 1
10. Derivative of log10 x^n
(a) 1/x (b) 1/x log, 10 (c) Log, 10 / x (d) 1/x log10 e 1
11. The production function Y = aK + bl, where Y = output, K = capital, L = labour and a and b are positive constants exhibits:
(a) Constant returns to scale (b) Increasing returns to scale (c) Diminishing returns to scale (d) Cannot say
12. . Between two periods in a closed economy everybody propensity to save doubles while investment remains unchanged. As a result
(a) Savings double (b) Income doubles (c) Savings remain unchanged (d) Income remains unchanged
13. All other things remaining constant, a rise in the exchange rate of the rupee against the dollar implies:
(a) a depreciation of the rupee against the dollar (b) a depreciation of the dollar against the rupee
(c) both of the above (d) None of the above.
14. Suppose that a consumer derives utility equal to 3x1 + 5x2 on consuming x1 units of commodity 1 (priced at Rs. 9 per unit) and x2 units of commodity 2 (priced at Rs. 16 per unit). At the optimum choice, which of the following is true?
(a) x1 = x2 (b) X1 > x2 (c) X1 < x2 (d) None of the above
15. Suppose the critical region for a test statistics S in a given test of significance is given by S1 ≤ S ≤ S2. Suppose that the probability (S < S1) = 0.03 and probability (S > S2 = 0.45. What is the level of significance being used in carrying out this test?
(a) 0.03 (b) 0.48 (c) 0.52 (d) 0.42 1
16. Suppose a perfectly competitive firm has a production function Q = AK0.4 L0.6; there A > 0, Q is the amount of output produced, and K and L are the amounts of capital and labour employed respectively, during a unit time period. What is the equilibrium ratio of wage bill to total revenue for the3 firm?
(a) 0.6 (b) 0.4 (c) 0.67 approximately (d) Cannot be determined based on this information alone
17. A lumpsum tax is imposed on a monopolist, would his output:
(a) increase (b) decrease (c) remain unchanged (d) cannot be said from this information
18. Consider a policy consisting of N individuals. A proportion, p of the individuals are rich, the rest are poor. Each of the N individuals die, leaving behind a child. Income mobility in this policy satisfies two rules:
(i) If the parent is rich, the child turns out to be rich with probability a.
(ii) If the parent is poor, the child turns out to be poor with probability b. The proportion of children who are rich is:
(a) ap (b) a + (1 – b) (c) p(a + 1 – b) (d) pa + (1 – p) (1 – b)
19. It is known that in an examination, 5 percent of the examinees cheat. However, whenever an examinee cheats, a black dot appears on his or her answer script. An examiner receives an answer script with a black dot. What is the probability that the answer script come from a cheater?
(a) 0.05 (b) 1.00 (c) there is insufficient information to answer the question (d) None of the above
20. A monopolist faces a demand curve with unit price elasticity of demand. For such a monopolist, if marginal costs are positive
(a) profit maximizing output does not exist
(b) profit maximizing output is where marginal revenue equals marginal cost and marginal revenue is decreasing
(c) profit maximizing output is where average revenue equals marginal revenue and average revenue is decreasing.
(d) None of the above
21. A utility maximizing choice of a consumer’s equilibrium occurs necessarily
(a) when the marginal rate of substitution equals the price ratio
(b) where the marginal rate of substitution equals the price ratio and all income is spent
(c) where the marginal rate of substitution equals the price ratio, all income is spent and all goods are consumed in positive quantities
(d) where none of the above is necessarily true
22. In the IS-LM model of income determination, if the economy is not in a liquidity trap, an increase in government spending, in equilibrium
(a) reduces private investment spending (b) increases private investment spending
(c) has no effect on private investment spending (d) has no effect on private consumption expenditure
23. 1. Consider a society of two individuals in which a single commodity is produced, individual 1 getting x units and individual 2 y units of the commodity. Suppose only three outcomes are possible in any time period.
A : x = 10, y; B: x = 7, y = 5; C : x = 5, y = 12. Then
(a) society will prefer B over C (b) society will prefer C over B
(c) society will be indifferent between B and C (d) we cannot say which of (a), (b), (c) will hold.
24. 19 identical and unbiased dice are thrown independently under identical conditions. What is the expected value of the number of dice on which an odd number appears?
(a) 9.0 (b) 9.5 (c) 10 (d) None of the above.
25. In a period of hyperinflation, which amongst the following would you generally expect to be the best store of value?
(a) Cash (b) Bonds (c) Gold (d) Time deposits in banks.
26. The nature of long run equilibrium for a monopolistically competitive firm differs from that of a perfectly competitive firm because of
(a) the presence of supernormal profits (b) the presence of excess capacity
(c) the equality between firm marginal revenue and marginal cost (d) None of the above
27. The “free rider” problem refers to
(a) Ticketless travel in the Indian Railways
(b) The economics of horse racing and the breeding of horses
(c) The tendency to evade taxes
(d) Preference non-revelation in the case of goods where consumption is joint
28. If ƒ(x) = x3 – x2 – 9x + 9 and ƒ(x) intersects the X-axis at x = 1, then it also intersects the X-axis at
(a) two more points x = + 9 and x = - 3
(b) three more points x = + 3; x = - 3; and x = + 9
(c) two more points x = +3 and x = - 3
(d) one more points x = +9
29. Z is a random variable with mean equal to 2 and variance equal to 2. The variance of the random variable 2Z equals
(a) 4 (b) 0 (c) 8 (d) 16
30. A person takes Rs. 100 of currency notes and puts them into a demand deposit in a bank. The bank keeps Rs.10 of this amount and lends out Rs.90. As a result of these transactions, money supply in the economy.
(a) has reduced by Rs.10 (b) has remained unchanged
(c) has increased by Rs.90 (d) has increased by Rs.190
31. asset which lasts forever is expected to give a return of Rs.600 each year. If the rate of interest is 12 per cent, the present value of the asset is
(a) Rs. 7,200 (b) Rs. 12,000 (c) Rs. 5,000 (d) Rs. 2,000
32. Two events A and B are equally likely and are independent. The probability of the events occurring simultaneously is 0.36. The probability of event A.
(a) is 0.9 (b) is 0.6 (c) is 0.4 (d) cannot be computed on the basis of the information given
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