Economics: Transformation, Expansion, and Welfare

• This paper consists of fifty multiple-choice type questions, each worth two marks and all questions are compulsory.

Marginal Rate of Transformation

• Marginal rate of transformation between two goods X and Y is defined differently based on the options:
• As MCx / MCy
• As MRSx,y
• As MRSx,y which also equals Px / Py
• As none of the above

Expansion Path of a Firm

• The expansion path of a firm relates to statements regarding the expansion path of a firm:
• Statement I says that expansion path shows least cost combination for producing different levels of outputs.
• Statement II says that the input prices remain constant.
• Both statements may or may not be true, depending on the codes given.

First Fundamental Theorem of Welfare Economics

• The First Fundamental Theorem of Welfare Economics requires criteria such as:
• Producers and consumers must be price takers.
• The economy must operate at some point on the utility possibility curve.
• There must be an efficient market for every commodity.
• All of the above.

Rawlsian Concept of Equity

• The following allocation/distribution corresponds to the Rawlsian concept of equity:
• All members of the society receive equal amount of goods.
• Maximize the utility of the least well-off people.
• Market outcomes are most equitable.
• Maximize the total utility of all members of the society.

Discriminating Monopoly

• Under discriminating monopoly, if the elasticity of demand in market I is 2 and in market II, it is 1 (elasticities being in absolute terms):
• A monopolist's price behavior can involve charging a higher price in market I, charging a higher price in market II.
• It may involve charging the same price in both the markets, or charging double the price in market I.

Demand Function

• Given the demand function Q = 20/P , where the symbols have their usual meaning, the price where the elasticity of demand would be unity can be any of the following:
• 20, 10, 5, or All of the above.

Indicative Planning

• The idea of indicative planning was first adopted in specified Five-Year Plan of India, these include:
• The Second Plan
• The Fifth Plan
• The Seventh Plan
• The Eighth Plan

Rashtriya Swasthya Bima Yojana (RSBY)

• Rashtriya Swasthya Bima Yojana (RSBY), statement (A) says that under RSBY the premium is shared on 85:15 basis by the center and state governments.
• In the case of North-Eastern States and Jammu & Kashmir, under RSBY the premium is shared in a 90:10 ratio, statement (B).
• Only statement (B)
• Only statement (A)
• Both (A) & (B)
• Neither (A)
• Nor (B)

Matching Lists

• National Rural Employment Programme (NREP), should be matched with 1980.
• Sukanya Samridhi Yojana (SSY) should be matched with 2015.
• Food for Work Programme (FWP) should be matched with 2001.
• Rural Landless Employment Guarantee Programme (RLEGP) should be matched with 1983.

India's External Debt

• India's external debt at the end of March 2015 is listed, along with:
• The Rupee debt
• NRI deposits
• Commercial Borrowings.
• Export credit

RBI Currency Printing Value

• RBI can print currency notes up to a value of
• ₹25,000
• ₹ 10,000
• ₹ 5,000
• ₹ 1,000

Union Budget 2016-17

• Union Budget 2016-17 imposed a 15% surcharge on income exceeding :
• ₹2 crore
• ₹75 lakh
• ₹10 lakh
• ₹1 crore

Paramparagat Krishi Vikas Yojana

• 'Paramparagat Krishi Vikas Yojana' aims to boost:
• Drip irrigation
• Organic farming
• Horticulture crops
• Vegetable production

Classical Dichotomy

• Classical dichotomy refers to specified concept, the following answers are possible:
• There are two sectors of the economy, namely, agriculture and industry.
• Influence of money is not on the real variables like employment and output but on price level.
• Savings come only from profits and not from the wages.
• All of the above.

Theory of 'Big Push'

• The basic rationale of the theory of 'Big-Push' is based upon the idea of .
• Size of population
• External economics
• Internal economics
• None of the above

Economic Development Central Problem

• “Central problem in the theory of economic development is to understand the process:
• By which a community which was previously saving 4 to 5 percent or less of its national income, converts itself into an economy
• Where voluntary savings is running about 12 to 15 of national income or more.” .
• One of the economist who could be attributed from this view:
• Ragner Nurkse
• P.N. Rogenstein-Rodan
• Gunnar Myrdal
• W. Arthur Lewis

Harrod-Domar equation

• In the Harrod-Domar equation g = s/v, where v is defined as:
• The value of the country's capital stock.
• Incremental capital output ratio.
• The change in country's capital stock.
• None of the above.

Leibenstein Thesis

• Leibenstein in his critical minimum effort thesis treats the population:
• Investment – inducing
• Income – generating
• Market - expanding
• Income – depressing

Dependency Theory of Development

• Associated and unassociated economists of the Dependency Theory of Development:
• Raul Prebisch
• T.D. Santos
• Andre Gunder Frank
• Gunnar Myrdal

Neo-Classical Growth Model

• The saving function used in the neo-classical growth model is a :
• Classical saving function
• Proportional saving function
• Differential saving function
• Constant saving function

Balance of Payment in India

• The balance of payment in India, are:
• NRI deposits
• Remittances
• Answers from the codes below on:
• Codes:
• Only I above
• Only II above

Incorrect Pairs

• Barter Terms of Trade
• Deteriorating Terms of Trade
• Offer Curves
• Dumping Conditions

Discretionary Fiscal Action

• Payment of Unemployment insurance
• Payment of Social Security to the retired individuals
• A managed change in level of Government spending and/or net tax revenues
• Automatic changes in net tax revenues that result from income tax structure

Trade as the "Hand Maiden"

• Individuals of the following that were called the “hand maiden’ of growth
• J. Viner
• Anne Kruger
• Irwing B. Kravis
• J. Bhagwati

Import Substitution of American Policy

• For the import substitution policy of Latin American countries in 1950's one of the followings will be considered true.
• It resulted in overvalued exchange rate, and
• It treated development as a natural process.

Concepts of Exception

• Consider the following concepts for this:
• I. Leontief paradox
• II. Linder Hypothesis
• Which among the following can be treated as exception to the conclusions of the Heckscher-Ohlin theory? Answer from the codes below

India & GST Arrangements

• Statements about the proposed GST arrangements in India may be listed as what are true:
• Both Centre and State taxes will be collected at the point of sale.
• The Centre and State GST will be charged on the manufacturing cost.

Regarding outstanding government debt

• Economists refer to an unanticipated inflation that reduces the real value of outstanding government debt as:
• Burden of inflation
• Unanticipated default
• Seigniorage
• The inflation tax

About Public Good

• A public good is considered as one of the following statements:
• non-excludable in nature.
• nonrival in consumption.
• excludable in nature.
• a good that public must possess.

About Tax Affects

• A forward-shifted tax will affect one of the cases regarding;
• buyers more than sellers
• sellers more than buyers
• buyers and sellers equally
• government revenues negatively

Project Value Benefits

• Knowing the specific meaning as is shown for Assume B is social benefits, C is social costs, r is the social discount rate, t is the time and T is the life of the investment project:.
• Then the Net Present Value (NPV) of a project is the sum from t=0 to T for (B_t - C_t) / (1 + r)^t
• The Net Present Value (NPV) of a project is the sum from t=0 up to T for (C_t - B_t) / (1 + r)^t
• The Net Present Value (NPV) of a project is sum from t=o to T B_t-C_t / (1 + r)^t
• The Net Present Value (NPV) of a project is sum from t=0 to T (B_t-C_t) By (C_t)

Classic Example

• Classic example with non-excludability and non-rivalry" characteristic known as "Law and Order" has to do with
• a negative externality
• a increasing returns
• a positive externality
• a public good

Trade Cycle Theory

• In the trade cycle theory of J.R. Hicks, long run equilibrium growth is determined by the effect of
• Technology
• Autonomous investment
• Population
• The function of both (1) and (2) above

What is stagflation?

• Listed may or may not be a characteristic of stagflation and includes:
• High inflation
• Low growth
• High unemployment
• High employment

US Economics

• Statements regarding the consumption function fitted by Simon Kutznets to US economic data for the period 1869 to 1929 will includes things such as
• There appeared no constant terms in the linear consumption function so fitted of
• The APC and MPC were not significantly different.

Consumption Approach

• In the statement “Which among the following theory/approach does not treat consumption to depend upon expected income”, shows possible things to it
• Keynes' approach
• Life cycle approach
• Friedman's approach
• Includes statement (2) and (3) above

Income Level Equilibrium

• In a specified economy, with the saving and investment functions given as: S = - 100+ 0.2 y (saving with “y” that represents income level), I = -30 +0.1 y (where “y” is known as investment), so then
• The Level of Income Equilibrium is = 1000.

Set Observations

• For all the observations of a set being ( 0, 4, 5, 7, 100), means finding the suitable/suitable average is
• Arithmetic Mean.
• Median.

Average Sampling Method

• A Random sampling is what has sampling method, the samplings are
• Quota Sampling.
• Systematic Sampling.

Statistical area

• For the most basic standard of normal curve, the area between is - 3o and + 3o equals to
• 0.95.

Number Distrubution

• symmetrical distribution skewness indicates zero
• Number of observations = 100
• Arithmetic Mean = 180
• Variance = 324
• The coefficient of variation is 32.4%.

Satisfactory time reversal numbers

• Reverse tests and factor reversal tests must be done to prove, the numbers that are time reversal (satisfactory) is, this must mean something with
• Lespeyres
• Fisher

Association of testing

• Which of the following tests is a suitable testing to associate of attributes? This can mean;
• t test
• x² test