2. Which one is not an exception to the Law of Demand?
Correct : A. Normal good
3. Demand for a commodity is elastic when it has:
Correct : C. Many uses
4. When the demand curve is a rectangular hyperbola, it represents:
Correct : B. Unitary elastic demand
5. The horizontal demand curve for a commodity shows that its demand is:
Correct : A. Perfectly elastic
6. When an individual’s income falls(while everything else remains the same), his demand
for an inferior good:
Correct : B. Decrease
7. A fall in the price of a commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity to:
Correct : C. Remains unchanged
8. The utility may be defined as:
Correct : D. The power of a commodity to satisfy wants
9. The utility of a commodity is:
Correct : C. Its relative scarcity
10. Marginal utility curve of a given consumer is also his:
Correct : C. Demand curve
11. The relationship between demand for a commodity and price, ceteris paribus, is:
Correct : A. Negative
12. A demand curve which takes the form of horizontal line parallel to quantity axis illustrates elasticity which is:
Correct : D. Less than one
13. Consider a demand curve which takes the form of a straight line cutting both axes.
Elasticity at the mid-point of the line would be:
Correct : B. One infinite
14. The elasticity of demand for a product will be higher:
Correct : A. The more available are substitutes for that product
15. A consumers demand curve can be obtained from:
Correct : D. PCC
16. In case of Giffen goods, demand curve will slope:
Correct : C. Upward
17. Cross elasticity of demand between tea and sugar is:
Correct : D. Negative
18. If the percentage increase in quantity of a commodity demanded is its price, the coefficient of price elasticity of demand is:
Correct : C. Less than 1
19. If the quantity of a commodity demanded remains unchanged as its price changes, the
coefficient of price elasticity of demand is
Correct : D. Zero
20. Unitary elasticity of demand is:
Correct : B. Equal to one
21. The real business cycle theory is most closely related to
Correct : C. The classical theory
22. In the real business cycle model, business cycles are
Correct : D. All of the above
23. Real business cycle proponents argue that
Correct : C. Macroeconomics should be based on the same assumptions as microeconomics
24. Which of the following statements are correct? In (the)
Correct : D. Both b&c
25. A usual assumption in real business cycle models is that the economy is populated by a group of identical individuals and the behavior of the group can then be explained in terms of the behavior of one individual, called a-------------
Correct : B. Representative agent
26. The aggregate production function for real business cycle models is shown as
Correct : C. Yt= Zt F(Kt,Nt)
27. In real business cycle models and new classical models
Correct : D. Prices and wages are perfectly flexible
28. Which of the following shocks have been emphasized most often with respect to real business cycle story?
Correct : A. Shocks to technology
29. In the new Keynesian models,
Correct : A. Imperfect competition comes is the result of optimizing behavior by individuals
30. Which of the following cannot be used to justify efficiency wages
Correct : A. Sticky price(menu cost) models
31. In any efficiency wage model it must be true that
Correct : D. All of the above
32. With respect to efficiency wage models the efficiency of workers depends
Correct : B. Positively on the real wage paid
33. New Keynesian would agree with all of the following except
Correct : C. Markets are perfectly competitive
34. In real business cycle models, business cycles are caused by ------------------,while in new Keynesian model business cycles are caused by-------------------
Correct : C. Aggregate supply; Aggregate demand
35. Which of the following models view changes in real supply-side factors as determinants
of short-run fluctuations in output and employment?
Correct : D. Real business cycle models
36. An example of negative productivity shocks that could cause recessions is
Correct : A. A hurricane which destroys capital
37. The real business cycle theory and the new classical theory agree that
Correct : B. Expectations are formed rationally
38. Advocates of real business cycle theories argue that all of the following could cause a recession except
Correct : A. A fall in consumer expectations
39. Real business cycle and new Keynesian models disagree upon
Correct : B. Whether changes in unemployment are voluntary or involuntary
40. In the real business cycle theory during a period when output is falling
Correct : D. None of the above
41. According to the real business cycle theory business cycles
Correct : B. Are natural and efficient reactions to changes in productivity
42. According to real business cycle theory an increase in taxes
Correct : C. Would significantly reduce labor supply, decrease employment, and decrease output
43. Many economists who accept the real business cycle explanations of economic fluctuations
Correct : A. Believe that the Sharpe rise in the relative price of imported oil was the central cause of the deep recession in the United States in the mid-1970s
44. New Keynesian theories of efficiency wages imply
Correct : B. Real wage rigidity
45. The first Nobel prize winner for Economics was
Correct : D. Turbergen
46. Which of the following is the least liquid asset?
Correct : A. Machines
47. The five year plan in India are launched after the approval of
Correct : C. The National Development Council (NDC)
48. Harrod-Domar model was formed the basis of which plan
Correct : A. First plan
49. Deductive method
Correct : A. Moves from general to particular
50. The equity of Reserve Bank of India in National Housing Bank is:
Correct : D. 100%
51. When average product is falling, it is
Correct : C. Greater than the marginal product
52. Dualism in development economics refers to
Correct : C. Co-existence of modern and traditional sectors
53. The economist who said that international trade was based upon the concept of absolute advantage was:
Correct : B. Adam Smith
54. If external debt of country rises faster than its interest obligations, it is a case of:
Correct : A. Dept trap
55. Who gave the first scientific treatment of general equilibrium analysis
Correct : A. Leon Walras
56. Protectionism in the international trade stands for:
Correct : C. Restricted Trade policy
57. Determination of price through interaction of demand and supply was introduced by:
Correct : D. Walras
58. Joint profits are maximized in the model cartel, which is model of:
Correct : C. Oligopoly
59. Which of the following is a better measure of economic development?
Correct : A. National income
60. Indian exports were increased during 2001-2002 and it went upto the level of:
Correct : C. 44.0 billion dollars
61. The imposition of an import tariff by a nation will increase the nation’s welfare:
Correct : C. Sometimes
62. 13th Finance Commission has been constituted under the chairmanship of:
Correct : B. Vijay L Kelkar
63. Monopsony is a form of market organization in which there is a:
Correct : A. Single buyer of an input
64. The rational entrepreneur will expand his output and select input combinations
which lies on his:
Correct : D. Expansion path
65. Factor intensity as it is used in economics, is primarily s:
Correct : A. Relative concept
66. The proportionality between the velocity of price movement and the inflationary
gap is:
Correct : B. Direct and linear
67. The interrelation between innovations and investment opportunity was first pointed out by:
Correct : D. Torgenson
68. Direct control refers to:
Correct : D. All of these
69. A situation where the firm is not in a position to recover its variable costs at the
prevailing prices is known as:
Correct : D. None of these
70. Which of the following is a problem connected with general equilibrium analysis?
Correct : D. all of the above
71. Who has suggested the utilization of “disguised unemployment” as a source of
savings potential in underdeveloped countries?
Correct : B. Ragnar Nurkse
72. The income consumption curve generally?
Correct : C. Slopes upwards to the left
73. The fundamental cause for the collapse of the Bretton woods system was:
Correct : C. The confidence problem
74. The traffic which maximizes a country’s economic welfare is called