NTA UGC NET/JRF Exam, Dec. 2021/June 2022 Economics

Total Questions: 100

11. Real and nominal income is calculated respectively at

Correct Answer: (b) Constant and current prices
Solution:

Real and nominal income is calculated respectively at constant and current prices.

12. Given below are two statements:

Statement I: Dualism refer to economic and social divisions in an economy, such as difference in the level of technology between sectors or regions, differences in the degree of geographic development and differences in social customs and attitudes.

Statement II: The developing countries in the early stage of development experience dualism, which have implications for future pattern and pace of development.

In the light of above statements. Choose the most correct answer from the options given below:

Correct Answer: (a) Both statement I and statement II are true
Solution:

1) Yes, Dualism refer to economic and social divisions in an economy, such as difference in the level of technology between sectors or regions, differences in the degree of geographic development and differences in social customs and attitudes.

2) Yes, the developing countries in the early stage of development experience dualism, which have implications for future pattern & pave of development.

Note: - The theory of dualism in economic is the idea that two separate economic and social worlds coexist, and that the difference between them tends to increase over time. The thoery is often used to describe economic and social structures of developing countries, where there is a modern, capitalist sector and a traditional sector.

13. What are the practical consequences of multicollinearity in CLRM?

A. R², the overall measure of grodness of fit can be very high
B. OLS estimators are not BLUE
C. OLS estimators have small variance and covariances
D. t ratio of one or more coefficients is statistically insignificant
E. The OLS estimators and their standard errors can be sensitive to small changes in the data
Choose the correct answer from the options given below:

Correct Answer: (c) A. D and E only
Solution:

Practical consequences of multicolinearity in CLRM.
1. R2, the overall measure of grodness of fit can be very high.
2. t ratio of one or more coefficients is statistically insignificant.
3. The OLS estimaters and their standard errors can be sensitive to small changes in the data.

14. Which of the followings are assumptions of ordinal utility analysis?

A. Consumers are consistent in their preferences
B. Consumer can measure the total utility received from any given basket of goods
C. Consumer preferences follow transitivity
D. Consumers are non-satiated with respect to goods they confront
E. Consumers are irrational
Choose the correct answer from the options given below:

Correct Answer: (c) A, C, D only
Solution:

The assumptions of ordinal utility theory are
1. Rationality
2. Utility is ordinal
3. Transitivity
4. Consistency
5. Non - Satiation
6. Diminishing marginal rate of substitution (MRS).
7. Utility can be compared in terms of quality.
8. Utility can be expressed as a psychological phenomenon.
Important points - Ordinal utility theory, contrastingly, is based on assumptions such as consumer's ability to consistently rank their preferences, transitivity of preferences, and the notion that any combination of goods is better than none.

15. "Menu Cost" is a concept used in

Correct Answer: (c) New-Keynesian economics
Solution:

Menu cost are a type of transaction cost incurred by firms when they change their prices. Menu costs are one microeconomic explanation offered by New Keynesian economists for macroeconomic pricestickness, which may cause an economy to fail to adjust to changing macroeconomic conditions.

16. With reference to the views of classical on public debt, which of the followings are correct :

A. Future financing gets more trouble some due to public debt
B. Public debt leads to a reduction of resources for productive private employment
C. Increasing public debt leads to currency depreciation and deflationary situations in the economy
D. Debt financing requires funds for interest payment and amortization, hence a double burden for exchequer
E. Public debt leads to productive activities
Choose the most appropriate answer from the options given below:

Correct Answer: (d) A, B and D only
Solution:

With reference to the view of classicals on public debt, the correct statements are : -
1. Future financing gets more trouble some due to public debt.
2. Public debt leads to a reduction or resources for productive private employment.
3. Debt financing requires funds for interest payment and amortization, hence a double burden for exchequer.

17. Pradhan Mantri Jan Dhan Yojana (PMJDY) has been a flagship programme of the Government of India

A. Beneficiaries of this scheme are eligible for accident insurance cover of Rs. 1 lakh now B. PMJDY is helpful in inclusive development
C. PMJDY beneficiaries should not be given other benefits like benefits under MUDRA scheme
D. It is leading to women empowerment
E. More than 45 crore people have benefitted so far under PMJDY
Choose the most appropriate answer from the options given below:

Correct Answer: (c) B, D and E only
Solution:

Pradhan Mantri Jan Dhan Yojana (PMJDY) has been a flagship programme of the Government of India -
1) PMJDY is helpful in inclusive development.
2) It is leading to women empowerment.
3) More than 45 crore people have benefitted so for under PMJDY.
Important Notes :-
PMJDY is a financial inclusion program launched by the GOI to provide banking services to all households in the country.

The program aims to ensure that everyone has access to financial services like bank accounts, credit insurances, and pensions.

18. Suppose a profit maximising monopolist is producing 800 units of output and is chargin a price of Rs. 40 per unit. If the elasticity of demand for the product is -2, marginal cost of the last unit produced is ________ .

Correct Answer: (d) 20
Solution:

19. Which of the following are correct with respect to IS-LM model?

A. The LM schedule slopes upward to the right.
B. The LM schedule will shift to the left with an increase in quantity of money
C. The LM schedule gives equilibrium in the money market
D. The IS schedule will shift to the left when these is an increase in government expenditure
E. The IS schedule will shift to the right when taxes are reduced
Choose the most appropriate answer from the options given belwo:

Correct Answer: (a) A, C, E only
Solution:(A) The LM schedule slope upward to the right.
(B) The LM schedule will shift to Right then there will be decrease in Rate of interest and increase in income so statement B is incorect.
(C) The LM Schedule gives equilibrium in the money market.
(D) No the IS schedule will not shift to the left when these is an increase in government expenditure.
Hence, it will shift to right (forward).
(E) The IS schedule will shift to the right when taxes are reduced.
Note:-
(1) The LM curve slope is upward from left to right.
(2) LM Curve is positively sloped.
(3) LM Curve depend upon -
1. Level of income
2. and interest rate.
When LM curve shift right
1. Increase in money.
2. Decrease in demand for money.
(2) When LM Curve shift left -
1. Decrease in money supply.
2. Increase in demand for money.

20. Basic characteristices of an under developed economy

A. A low level of techology and poor human capital
B. Higher level of GDP and percapita income
C. A high proportion of the labour force engaged in agriculture and low agriculture productivity
D. A high proportion of domestic expenditure on food
E. Higher incidence of poverty
Choose the most appropriate answer from the options given below:

Correct Answer: (a) A, C, D, E only
Solution:

Basic characteristics of an under developed economy.
1. A low level of technology and poor human capital.
2. A high proportion of the labour force engaged in agriculture and low agriculture productivity.
3. A high proportion of domestic expenditure on food.
4. Higher incidence of poverty.