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UGC NET JUN 2005 : ECONOMICS PAPER II

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Signature and Name of Invigilator Answer Sheet No. : ...................................................... (To be filled by the Candidate) 1. (Signature) Roll No. (Name) (In figures as per admission card) Roll No. 2. (Signature) (Name) Test Booklet No. J 0 1 0 5 PAPER II ECONOMICS Time : 1 hours] Number of Pages in this Booklet : 16 2. 3. 4. U 1. U DU U S U U U U Write your roll number in the space provided on the top of this page. This paper consists of fifty multiple-choice type of questions. At the commencement of examination, the question booklet will be given to you. In the first 5 minutes, you are requested to open the booklet and compulsorily examine it as below : (i) To have access to the Question Booklet, tear off the paper seal on the edge of this cover page. Do not accept a booklet without sticker-seal and do not accept an open booklet. (ii) Tally the number of pages and number of questions in the booklet with the information printed on the cover page. Faulty booklets due to pages/questions missing or duplicate or not in serial order or any other discrepancy should be got replaced immediately by a correct booklet from the invigilator within the period of 5 minutes. Afterwards, neither the question booklet will be replaced nor any extra time will be given. (iii) After this verification is over, the Serial No. of the booklet should be entered in the Answer-sheets and the Serial No. of Answer Sheet should be entered on this Booklet. Each item has four alternative responses marked (A), (B), (C) and (D). You have to darken the oval as indicated below on the correct response against each item. Example : A B C 2. - 3. U U U, - S U U U - S U (i) - S U U U U S U U- U S S U U (ii) U DU U U U - S DU U U U U U U S DU / U U U U U S S U U U U U S U U - S U U - S U UQ (iii) - S R U- U U U U U- R - S U U 4. U U (A), (B), (C) (D) U U U U U A B C D ( C) U D 5. U U I U U- U where (C) is the correct response. Your responses to the items are to be indicated in the Answer Sheet given inside the Paper I booklet only . If you mark at any place other than in the ovals in the Answer Sheet, it will not be evaluated. 6. Read instructions given inside carefully. 7. Rough Work is to be done in the end of this booklet. 8. If you write your name or put any mark on any part of the Answer Sheet, except for the space allotted for the relevant entries, which may disclose your identity, you will render yourself liable to disqualification. 9. You have to return the test question booklet to the invigilators at the end of the examination compulsorily and must not carry it with you outside the Examination Hall. 10. Use only Blue/Black Ball point pen. 11. Use of any calculator or log table etc., is prohibited. 12. There is NO negative marking. 5. J 0105 [Maximum Marks : 100 Number of Questions in this Booklet : 50 Instructions for the Candidates 1. (In words) U U U S U U U , U 6. U U 7. (Rough Work) S DU U U 8. U- S U , U U U U 9. U # U U- S U U U U U # U U U / U Z U S U U ( U U) U U 12. U U 10. 11. 1 P.T.O. ECONOMICS PAPER II Note : This paper contains fifty (50) objective type questions, each question carrying two (2) marks. Attempt all of them. 1. If, in a set of items, each item has a definite place of its own, then we are using : (A) Weak ordering (B) Strong ordering (C) Both (A) and (B) (D) None of the above 2. Barometric price leadership implies leadership of : (A) Low cost firm (B) High cost firm (C) Most experienced firm (D) Least experienced firm 3. In Sylos model of limit pricing, demand is : (A) Unitary elastic (C) Perfectly elastic 4. The Ridge line is the locus of points where marginal productivity of relevant factor is : (A) Equal to one (B) Equal to zero (C) Greater than one (D) Less than one 5. Psychological Law of consumption is associated with the name of : (A) J.M. Keynes (B) Milton Friedman (C) J.R. Duessen berry (D) F.Modigliani 6. According to Keynes, level of employment depends on : (A) Aggregate demand (B) Aggregate supply (C) Demand and supply equilibrium (D) Effective demand 7. If the money supply equals M and the demand for money is given by ky2hi, then the equation of the LM in terms of the rate of interest (i) would be : (A) k M i 5 y2 h h (B) (B) (D) k M i 5 y1 h h Perfectly inelastic Unstable (C) i 5ky 1 M (D) i 5ky 2 M 8. Interaction between Multiplier and Accelerator leads to generation of continuous cyclical fluctuation, is stated by : (A) Harrod - Domer (B) Kaldor - Mirrlis (C) Samuelson - Hicks (D) Joan Robinsion - Saraffa 9. Currently, the HDI is being measured in the : (A) Freedom perspective (B) (C) Attainment perspective (D) 10. For radicals, development and underdevelopment are : (A) Sequential (B) Co - existent (C) 11. IRR is that rate of discount which makes : (A) PVC5PVB (B) PVC > PVB Idealistic perspective Deprivational perspective (C) Co - generic (D) PVC < PVB (D) PVB PVC > 1 12. Which of the following is inconsistent with steady state growth ? (A) Harrod neutrality (B) Hicks neutrality (C) Harrod non-neutrality (D) Hicks non-neutrality 13. Proper knife-edge problem refers to : gn gw (A) (C) Instability of gn and gw J 0105 (B) (D) 2 Independence of gw and gn Inherent instability of gw itself Co - terminus - II U (50) - U (2) U 1. S (A) (B) (C) (A) (B) (D) 2. (A) (C) 3. 4. 5. 6. 7. (B) (D) (A) (B) M (C) M (D) S (A) (B) (C) (D) ? (A) . . (B) (C) . . K S (A) (C) (B) (D) (D) . M ky2hi m , (i) LM (A) k M i 5 y2 h h (B) k M i 5 y1 h h (C) i 5ky 1 M (D) i 5ky 2 M 8. - , ? (A) - (B) - (C) - (D) - - d 9. HDI (A) S (C) 10. 11. 12. 13. (B) (D) (A) (B) S IRR (A) O PVC5PVB (B) (C) PVC > PVB (C) PVC < PVB S S h M ? (A) S (B) S (C) S S (A) (C) J 0105 gn gw gn gw S (B) (D) 3 (D) (D) S PVB (D) PVC > 1 S gn S S gw S gw P.T.O. 14. Under whose chairmanship was the first Finance Commission of India appointed ? (A) K.C. Niyogi (B) K. Santhanam (C) A.K. Chanda (D) C. Rangarajan 15. Which one of the following is not source of income in central finance sanctioned by the Constitution of India ? (A) Corporation tax (B) Custom duty (C) Income tax (D) Land Revenue 16. Which of the following canon is associated with Adam Smith ? (A) Canon of elasticity (B) Canon of productivity (C) Canon of certainty (D) Canon of expediency 17. Automatic adjustment in the balance of payments, under the gold standard, is brought about through changes in : (A) general level of prices (B) rates of exchange (C) general level of prices and rates of exchange (D) income 18. The main thrust of New Industrial Policy is to invite greater participation of : (A) Public sector (B) Stock holders (C) Private sector (D) 19. Which of the following States was largest producer of wheat in India during the year 2003-04 ? (A) Punjab (B) Haryana (C) Uttar Pradesh (D) Madhya Pradesh 20. If correlation co-efficient between two variables is equal to 21, then these variables are : (A) Uncorrelated (B) Moderately correlated (C) Highly correlated (D) Perfect correlated 21. Which of the following is a type of probability sampling ? (A) Convenience sampling (B) Purposive sampling (C) Systematic sampling (D) Quota sampling Banks Read the passage given below and answer questions 22 to 26 based on your understanding of the passage : Real GDP in the United States of America grew at an average of 3% per year over the past 40 years. What explains this growth ? A technique called growth accounting that divides the growth in output into three different sources; increase in capital, increase in labour and advances in technology has been developed. For that, let us write the production function as : Y5A.F (K, L), where A is a measure of the current level of technology, called total factor productivity, output now increases not only because of increases in capital and labour but also because of increase in total factor productivity. Our equation accounting for economic growth becomes : DY DK DL DA 5 ;. 1 (1 2 ) ; 1 A L K Y Rate of Growth in output5Contribution of capital1Contribution of labour1Growth in Total factor productivity. where ; is capital s share and (12;) is labour s share in output. Because total factor productivity is not observable directly, it is measured indirectly. We can compute the growth in total factor productivity to make sure that everything adds up. DA DA is the change in output that cannot be explained by changes in inputs. The entity is A A sometimes called the Solow residual, after Robert Solow, who first showed how to compute it. J 0105 4 14. ? (A) . . (B) . (C) . . (D) . 15. d ? (A) (B) (C) (D) - S 16. S ? (A) (B) (C) (D) 17. S , m S ? (A) S (B) (C) S (D) 18. l __________ (A) (B) S (C) (D) 19. 2003-04 ? (A) (B) (C) 20. 21 , __________ (A) (B) (C) S (D) M 21. ? (A) (C) h (D) (B) (D) g 22 26 h S 40 Z 3% h h ? h h - d h; h l , , Y5A.F (K, L) A l S , h h , h h DY DK DL DA 5 ;. 1 (1 2 ) ; 1 Y K L A h 5 1 1 h ; (12;) S M , M h (compute) h DA DA (inputs) A A J 0105 5 P.T.O. The total factor productivity can change for many reasons. Changes most often arise because of increased knowledge about production methods and the Solow residual is often used as a measure of technological progress. Yet other factors, such as education and government regulation, can affect total factor productivity as well. 22. A is a measure of : (A) change in technology (C) change in labour productivity 23. If A increased by 1%, with inputs remaining unchanged, then output would increase by : (A) one percent (B) more than 1 percent (C) less than 1 percent (D) an unspecified percentage 24. Solow residual is given by : (A) A (B) (B) (D) DA A change in capital productivity total factor productivity (C) 25. Solow residual is a measure of : (A) total factor productivity (C) degree of ignorance 26. ;. DK K (D) (1 2 ) ; DL L Essentially the thrust of new growth theory is on : (B) (D) technical progress none of the above DA A (A) Deciphering the sources of (B) (C) (D) Discounting the neo-Keynesian growth theory Explaining convengence Explaining divergence 27. Starting with the earliest, arrange the following in the chronological order in the development of theory of investment-output : (i) The Keynesian theory (ii) Theory of Accelerator (iii) Flexible theory of Accelerator (iv) Q theory of Tobin Codes : (A) (iv) (i) (ii) (iii) (B) (ii) (iii) (iv) (i) (C) (i) (ii) (iii) (iv) (D) (iii) (iv) (i) (ii) 28. Starting with the earliest, arrange the following concepts to study the Indian Budget chronologically : (i) Revenue deficit (ii) Budgetary deficit (iii) Fiscal deficit (iv) Primary deficit Code : (A) (i) (ii) (iii) (iv) (B) (iv) (iii) (ii) (i) (C) (ii) (iv) (i) (iii) (D) (iii) (i) (iv) (ii) 29. Starting with the earliest, arrange the following in the chronological order in the theory of regional groups : (i) Economic union (ii) Common market (iii) Customs union (iv) Free trade areas Code : (A) (iii) (iv) (i) (ii) (B) (ii) (i) (iv) (iii) (C) (i) (ii) (iii) (iv) (i) (D) (iv) (iii) (ii) J 0105 6 h l S , (government regulation) 22. A (A) l (C) (B) (D) 23. (inputs) , A 1% h h (A) 1 (B) 1 (C) 1 (D) 24. (A) 25. 26. A DA A DK K (A) (C) (C) ;. (B) (D) (B) (1 2 ) ; DL L (D) h h (A) (B) - h h (C) 27. DA d (deciphering) A Z S c (D) Z S c h S (i) h (ii) h (iii) h (iv) h (A) (B) (C) (D) 28. (iv) (ii) (i) (iii) (i) (iii) (ii) (iv) (ii) (iv) (iii) (i) (iii) (i) (iv) (ii) S (i) (ii) (iii) (iv) (A) (B) (C) (D) 29. (i) (iv) (ii) (iii) (ii) (iii) (iv) (i) (iii) (ii) (i) (iv) (iv) (i) (iii) (ii) h S (i) (ii) - (iii) - (iv) (A) (B) (C) (D) J 0105 (iii) (ii) (i) (iv) (iv) (i) (ii) (iii) (i) (iv) (iii) (ii) (ii) (iii) (iv) (i) 7 P.T.O. 30. Starting with the earliest, arrange the following in the chronological order in the development of theory of demand for money : (i) Transaction demand and precautionary demand for money (ii) Speculative demand for money (iii) Total asset demand for money (iv) Friedman s demand for money Code : (A) (i) (ii) (iii) (iv) (B) (iv) (iii) (i) (ii) (C) (ii) (iv) (iii) (i) (D) (iii) (i) (ii) (iv) 31. Arrange the following states in descending order of population as per the population census of 2001. (i) Maharashtra (ii) West Bengal (iii) Uttar Pradesh (iv) Bihar Code : (A) (i) (iii) (ii) (iv) (B) (iv) (ii) (i) (iii) (C) (iii) (i) (iv) (ii) (D) (ii) (iv) (iii) (i) 32. Starting with the earliest, arrange the following in the chronological order in theory of balance of payments : (i) Elasticity approach (ii) Absorption approach (iii) LM and IS approach (iv) Monetary approach Code : (A) (i) (ii) (iii) (iv) (B) (ii) (iii) (iv) (i) (ii) (iii) (C) (iv) (i) (ii) (D) (iii) (iv) (i) 33. Starting with the earliest, arrange the following in the chronological order : (i) (AAY) Antyodaya Anna Yojana (ii) (SJSRY) Swarna Jayanthi Shahari Rozgar Yojana (iii) (VAMBAY) Valmiki Ambedkar Awas Yojana (iv) (IAY) Rural Housing - Indira Awaas Yojana Code : (A) (ii) (iv) (i) (iii) (B) (i) (ii) (iii) (iv) (i) (C) (iv) (iii) (ii) (D) (iii) (i) (iv) (ii) 34. Assuming strictly convex and monotone preferences over bundles of two commodities, it is known that the consumer is indifferent between bundles (10, 18) and (6, 30). Consider the following bundles : (i) (10, 18); (ii) (8, 24); (iii) (6, 29); (iv) (5, 18). Arrange these bundles from the least preferred to the most preferred Code : (ii) (A) (iv) (iii) (i) (B) (iv) (i) (ii) (iii) (C) (iii) (iv) (i) (ii) (iii) (ii) (D) (iv) (i) J 0105 8 30. h R S (i) - (ii) (iii) (iv) m S (A) (B) (C) (D) 31. (i) (iv) (ii) (iii) (ii) (iii) (iv) (i) (iii) (i) (iii) (ii) (iv) (ii) (i) (iv) 2001 R S (i) c (ii) - (iii) (iv) (A) (B) (C) (D) 32. (i) (iv) (iii) (ii) (iii) (ii) (i) (iv) (ii) (i) (iv) (iii) (iv) (iii) (ii) (i) h R S (i) (ii) (iii) . . . . (iv) (A) (B) (C) (D) 33. (i) (ii) (iv) (iii) (ii) (iii) (i) (iv) (iii) (iv) (ii) (i) (iv) (i) (iii) (ii) R S (i) (AAY) (ii) (SJSRY) S (iii) (VAMBAY) (iv) (IAY) - (A) (B) (C) (D) 34. (ii) (i) (iv) (iii) (iv) (ii) (iii) (i) (i) (iii) (ii) (iv) (iii) (iv) (i) (ii) - Z M (10, 18) (6, 30) Q S (i) (10, 18); (ii) (8, 24); (iv) (iv) (iii) (iv) (i) (ii) (i) (iii) (iii) (6, 29); (iv) (ii) (iii) (ii) (ii) R S (5, 18). (A) (B) (C) (D) J 0105 (iii) (i) (iv) (i) 9 P.T.O. 35. Match the following : (a) W.W. Rostow (b) Ragnar Nurkse (c) J.R. Hicks (d) J.M. Keynes Code : (A) (B) (C) (D) 36. (A) (B) (C) (D) (c) (iii) (iv) (ii) (i) Ethics of Economics Inter-Regional and International trade An Enquiry into Nature and causes of wealth of Nations Asian Drama Economic theory and Operations Analysis (c) (v) (iv) (ii) (i) (i) (ii) (iii) (iv) (v) (d) (ii) (i) (iv) (iv) (a) (i) (v) (iii) (ii) (b) (iii) (ii) (i) (v) (i) (ii) (iii) (iv) (v) (d) (iii) (ii) (v) (i) Alfred Marshall Musgrave A. Cantillon Mercantilism Adam Smith Match the following : (a) Canon of Taxation (b) Protectionism (c) Differential incidence (d) Elasticity of demand Code : (A) (B) (C) (D) 38. (b) (ii) (i) (iii) (v) Effective Demand Weak ordering Balanced growth Stages of growth Protectionism Match the following : (a) W.J. Baumol (b) B.Ohlin (c) Gunnar Myrdal (d) A.K. Sen Code : 37. (a) (i) (v) (iv) (iii) (i) (ii) (iii) (iv) (v) (d) (v) (ii) (i) (iv) (a) (i) (iii) (ii) (v) (b) (ii) (iv) (i) (iv) (c) (iv) (v) (iii) (ii) Match the following : (a) Relative Income hypothesis (b) Permanent Income hypothesis (c) Marginal efficiency of capital (d) Comparative cost advantage Code : (A) (B) (C) (D) J 0105 (a) (iv) (v) (i) (ii) (b) (i) (ii) (iii) (iv) (c) (ii) (iii) (iv) (i) (i) (ii) (iii) (iv) (v) (d) (iii) (iv) (v) (ii) 10 Milton Freidman J.M. Keynes D. Ricardo J.S. Duesenberry R. Cantillon 35. (a) . . S (b) (c) . . (d) . . (i) (ii) (iii) (iv) (v) : (A) (B) (C) (D) 36. (a) (i) (v) (iv) (iii) (b) (ii) (i) (iii) (v) (c) (iii) (iv) (ii) (i) (a) . . (b) . (c) (d) . . (d) (v) (ii) (i) (iv) (i) (ii) (iii) (iv) (v) : (A) (B) (C) (D) 37. (a) (i) (v) (iii) (ii) (b) (iii) (ii) (i) (v) (c) (v) (iv) (ii) (i) (a) (b) (c) (d) : (A) (B) (C) (D) 38. (a) (i) (iii) (ii) (v) (b) (ii) (iv) (i) (iv) (i) (ii) (iii) (iv) (c) (iv) (v) (iii) (ii) (a) P (b) S P (c) (d) J 0105 : (A) (B) (C) (D) (a) (iv) (v) (i) (ii) (b) (i) (ii) (iii) (iv) (c) (ii) (iii) (iv) (i) . S (d) (iii) (ii) (v) (i) (i) (ii) (iii) (iv) (v) - (d) (ii) (i) (iv) (iv) (v) R h h S . . . . . . (d) (iii) (iv) (v) (ii) 11 P.T.O. 39. Match the following : (a) Marginal productivity theory of Distribution (b) Comparative cost theory (c) Indifference curve Analysis (d) Monopolistic competition Code : (A) (B) (C) (D) 40. (A) (B) (C) (D) (c) (iii) (ii) (v) (ii) (a) (i) (iv) (iii) (ii) (b) (ii) (v) (i) (iii) (c) (iii) (ii) (ii) (iv) (A) (B) (C) (D) (a) (ii) (i) (v) (iv) (b) (iv) (ii) (i) (iii) (c) (i) (iii) (ii) (v) Labour theory of value (ii) (iii) (iv) (v) Assumption of non-satiety Product differentiation Perfect competition Liquidity preference (i) (ii) (iii) (iv) (v) Diminishing marginal utility of money Flexibility of wage rate Perfect mobility of resources Flexibility exchange rate Diminishing marginal returns (i) (ii) (iii) (iv) (v) Authentic development Measure of Economic well-being Human Development Reports Development as Freedom Selective egalitarianism (d) (i) (v) (ii) (iii) (d) (iv) (iii) (v) (i) Match the following : (a) Tobin, James and Nordhaus, William (b) Sen, Amartya K. (c) Goulet. D. (d) Mehbub-Ul-Haq Code : 42. (b) (ii) (iii) (iv) (i) Match the following : (a) Perfect competition (b) Bernouli s theorem (c) Classical theory of employment (d) Ricardian theory of rent Code : 41. (a) (v) (i) (iii) (iv) (i) (d) (iii) (v) (iv) (i) Match the following : (a) Diminishing marginal rate of substitution (b) Marginal productivity of Labour [ 0 (c) Disproportionality and under consumption (d) Universal diminishing marginal returns Code : (A) (B) (C) (D) J 0105 (a) (v) (i) (iv) (iii) (b) (ii) (iii) (i) (iv) (c) (iii) (iv) (ii) (i) (d) (i) (v) (iii) (ii) 12 (i) (ii) (iii) (iv) (v) Dual economy models Marxian theory of capitalistic crisis Ricardian stationary state Indifference curves analysis Circular flow 39. (a) h (b) h (c) S (d) S (i) (ii) (iii) (iv) (v) : (A) (B) (C) (D) 40. (a) (v) (i) (iii) (iv) (b) (ii) (iii) (iv) (i) (c) (iii) (ii) (v) (ii) (d) (i) (v) (ii) (iii) (a) S (b) (c) S h (d) h (i) (ii) (iii) (iv) (v) : (A) (B) (C) (D) 41. (a) (i) (iv) (iii) (ii) (b) (ii) (v) (i) (iii) (c) (iii) (ii) (ii) (iv) (i) (ii) (iii) (iv) (v) (A) (B) (C) (D) 42. (a) (ii) (i) (v) (iv) (b) (iv) (ii) (i) (iii) (c) (i) (iii) (ii) (v) (i) (ii) (iii) (iv) (v) (A) (B) (C) (D) J 0105 (a) (v) (i) (iv) (iii) (b) (ii) (iii) (i) (iv) (c) (iii) (iv) (ii) (i) M (d) (iii) (v) (iv) (i) (a) S O (b) (c) (d) O O O (d) (iv) (iii) (v) (i) (a) , , (b) , . (c) . (d) - - h S m S h m S S S R R (d) (i) (v) (iii) (ii) 13 P.T.O. NOTE : The remining questions in this paper are of Assertion and Reasoning Type. The correct code is to be selected from the four options given below for each of these questions : Code : (A) Both (A) and (R) are true and (R) is the correct explanation of (A) (B) Both (A) and (R) are true but (R) is not correct explanation of (A) (C) (A) is true but (R) is false (D) (A) is false but (R) is true 43. Assertion (A) : Though X and Xmin for a sample are both unbiased estimators of population mean, X is the preferred estimator. Reasoning (R) : X is more efficient compared to Xmin. Assertion (A) : Reasoning (R) : We need to increase our spending on the social sector for increasing human capital. Wagner s law of increasing state activity demands so. 45. Assertion (A) Reasoning (R) : : These days the producers of knowledge are at a premium. Augmented Kuznets curve holds. 46. Assertion (A) Reasoning (R) : : Farmers are committing sucides because of the increasing burden of debt. If the production function is homogeneous of degree one then 44. F (K, L)5 F F K1 L K L 47. Assertion (A) Reasoning (R) : : Off-Take from the PDS in India has declined. Poverty in India, as per official estimates has declined. 48. Assertion (A) : Reasoning (R) : Devaluation, other things being equal, helps in reducing the deficit in the balance of payments of a country. It lowers down the prices of exports and increasse the prices of imports. Assertion (A) : Reasoning (R) : Assertion (A) Reasoning (R) : : 49. 50. A developing economy, with a thrust on present consumption, would opt for labour-intensive techniques. An economy opts for more intensive use of its relatively abundant factor of production to keep its costs low. Global per capita incomes are showing divergence. The saving ratios and rates of population growth differ across the nations. ** *** ** J 0105 14 (A) (B) (C) (D) 43. (A) (R) (R), (A) (A) (R) (R), (A) (A) , (R) (A) , (R) (A) (R) (A) (R) (A) (R) (A) (R) (A) (R) (A) 50. 49. (R) 48. (A) 47. 46. (R) 45. (A) 44. (R) l X Xmin , X Xmin X R h F F K1 L F (K, L)5 K L (PDS) , , , Q (divergence) C h - ** *** ** J 0105 15 P.T.O. Space For Rough Work J 0105 16

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