KERLA SET 2018
1. Autonomous Demand indicates
that .......................... .
(A) Commodity is used both for the
export and direct domestic
consumption
(B) Commodity is used both for the
direct domestic consumption
and as an input to produce
another commodity
(C) Commodity is needed for direct
use but not as an input to
produce another commodity
(D) Commodity is needed as an
input to produce another
commodity but not for the direct
2. Stay-out pricing approach
.................. .
(A) Helps the firm to ascertain the maximum possible price it can charge from its consumers
(B) Helps the firm to ascertain the minimum possible price it can charge from its consumers
(C) Helps the firm to ascertain the maximum price it can pay to its vendors
(D) Helps the firm to ascertain the minimum price it can pay to its vendors
3. Profit maximising amount of inputs occurs when .................. .
(A) The slope of the Iso-profit line
equals the slope of theproduction function
(B) The slope of the Iso-profit line
exceeds the slope of the production function
(C) The slope of the production
function exceeds the slope of the
Iso-profit line
(D) The slope of the Iso-profit line
exceeds the slope of the Iso-
quant
4. The producer shall not produce in the third stage of production because in that stage ................ .
(A) The total product is negative
(B) The marginal product is
negative
(C) The average product is
stagnant
(D) The marginal product is falling
5. If the commodities are perfect
substitutes, the corresponding
indifference curves would be
................... .
(A) Negatively sloping curves
(B) Positively sloping straight lines
(C) Negatively sloping straight
lines
(D) L-shaped straight lines
6. In the context of welfare economics,the social welfare function was put forward by .................... .
(A) Hicks and Samuelson
(B) Pigou and Samuelson
(C) Robbins and Scitovszky
(D) Samuelson and Bergson
7. The average fixed cost (AFC) of
production curve is denoted by
............................ .
(A) Rectangular hyperbola
(B) U-shaped curve
(C) L-shaped curve
(D) J-shaped curve
8. In the context of demand theory, the expression ‘Choice reveals preference’ is ascribed to .................. .
(A) Paul Samuelson
(B) J.R. Hicks
(C) F. Machlup
(D) Robert Dorfman
9. Risk-return trade off plays an
important role in whose theory of money demand ?
(A) Tobin’s Portfolio Choice
(B) Friedman’s restated quantity
theory
(C) Baumol’s inventory theoretic
choice
(D) Cambridge money demand
theory
10. Ratchet effect relates to :
(A) Life-cycle hypothesis
(B) Permanent income hypothesis
(C) Relative income hypothesis
(D) Absolute income hypothesis
11. The Samuelson-Hicks type business cycle models will show stability as well as cyclical fluctuations only :
(A) Income movement equation
shows complex roots whose
magnitudes are less than one
(B) Income movement equation
shows real roots whose
magnitudes are less than one
(C) Income movement equation
shows complex roots whose
magnitudes are more than one
(D) Income movement equation
shows real roots whose
magnitudes are more than one
12. In simple Keynesian model of output determination, gover-nment expenditure will have a bigger impact if :
(A) Marginal propensity to consume
is lower
(B) Marginal propensity to consume
is higher
(C) Marginal propensity to save is
constant
(D) Marginal propensity to consume
is zero
13. Match the following :
Statement 1 Statement 2
(a) Inventory (i) Edmund
approach to Phelps
money demand
(b) Adaptive ( ii) William
expectation Baumol
(c) Upper turning (iii)John Hicks
point
(d) Permanent (iv) Milton
income Friedman
Codes :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iii) (i) (iv)
(C) (ii) (i) (iii) (iv)
(D) (ii) (i) (iv) (iii)
14. According to Cambridge version of demand for money, money demand will increase if :
(A) Velocity of money increases
alone
(B) GDP in the economy decreases
alone
(C) GDP in the economy and velocity
increase at the same rate
(D) Velocity in the economy
decreases alone
15. If investment becomes totally
interest insensitive, then :
(A) Fiscal policy is ineffective
(B) Fiscal policy is effective
(C) Monetary policy is effective
(D) Both fiscal and monetary policy are ineffective
16. Long-run Phillips curve will not be vertical if :
(A) Price inflation partially takes
into account expected price
inflation
(B) Price inflation fully takes into
account expected price inflation
(C) Price inflation does not take into
account expected price inflation
at all
(D) Expected price inflation is
always zero
17. Prof. Mahalanobis developed ........... model in 1955 which was later used in Five Year Plans of India.
(A) Four sector
(B) Two sector
(C) Single sector
(D) Three sector
18. World Bank has indicated GDP growth rate in India is 7.6 percent in 2016 and will be .................. in 2017.
(A) 7.8%
(B) 7.7%
(C) 7.9%
(D) 8.0%
19. In which strategic sector of Indian Economy hundred percent Foreign Direct Investment (FDI) is allowed recently ?
(A) Science and technology
(B) Space
(C) Defence sector
(D) Critical medicines
20. Which one of the following has propounded the modern theory of distribution ?
(A) Nicholas Kaldor
(B) David Ricardo
(C) Mrs. Joan Robbinson
(D) J.S. Mill
21. Cost-Benefit Analysis was developed in USA for appraisal of investments in ..................... .
(A) Agriculture and Health projects
(B) Health and Garden projects
(C) Irrigation and Transportation
project
(D) Technology and Health project
22. Quaternary Sector involves
.................. .
(A) Research and development
(B) Provision of services
(C) Industry and manufacturing
(D) Agricultural services
23. Match the following :
Theory
(a) Theory of stages of economic
growth
(b) Theory of unlimited supplies of labour
(c) The Big Push Theory
(d) Theory of unbalanced growth
Propounder
(i) Arthur Lewis
(ii) W.W. Rostow
(iii)A.O. Hirschman
(iv) Rosenstein Rodan
Codes :
(a) (b) (c) (d)
(A) (iv) (iii) (i) (ii)
(B) (iii) (iv) (ii) (i)
(C) (ii) (i) (iv) (iii)
(D) (i) (ii) (iii) (iv)
24. To ensure fiscal autonomy to states,14th Finance Commission
recommended to increase its share from :
(A) 32% to 42%
(B) 30% to 42%
(C) 30% to 40%
(D) 35% to 40%
25. An Integrated Goods and Services Tax (IGST) would be collected by :
(A) State Governments
(B) Central Government
(C) Municipal Corporations
(D) Finance Commission
26. Who is not the member of 14th Finance Commission ?
(A) Sushma Nath
(B) Sudipto Mundle
(C) M. Govind Rao
(D) C.H. Hanumanta Rao
27. Which one of the following is not a Non-Debt Capital Receipts ?
(A) Disintvestment receipts
(B) Dividend receipts
(C) Short-term borrowing
(D) Tax Revenue
28. A public good is ..................... .
(A) A good that the public must pay for
(B) Non-rival in consumption
(C) More costly than a private good
(D) Paid for by a government
29. Reduction in consumer’s welfare as a result of tax is referred to :
(A) Equity in taxation
(B) Dead weight loss
(C) Efficiency in taxation
(D) Incidence of tax
30. Which one of the following is the major component of revenue
expenditure of Central Gover-nment ?
(A) Pensions
(B) Interest payments
(C) Defence expenditure
(D) Expenditure on education
31. All transactions of ............... nature are included in the current account of Balance of Payments.
(A) Stock
(B) Volatile
(C) Flow
(D) Fluctuating
32. The commodity in which a nation has the least absolute disadvantage represents its area of :
(A) Comparative disadvantage
(B) Comparative advantage
(C) Absolute advantage
(D) Cannot say without additional
information
33. Ricardo’s theory of comparative advantage is based on :
(A) The opportunity cost theory
(B) The labour theory of value
(C) The law of diminishing returns
(D) The psychological law of
consumption
34. We can best understand Smith’s
views on trade if we regard them as a reaction to :
(A) The law of comparative
advantage
(B) The mercantilist view on trade
(C) Ricardo’s views on trade
(D) The law of absolute advantage
35. Uniformity in exchange rate occurs due to :
(A) Foreign exchange arbitrage
(B) Devaluation
(C) Hedging
(D) Speculation
36. If a country can produce 10 units of good x or 4 units of good y, the opportunity cost of 1 y is :
(A) 1 x
(B) 0.4 x
(C) 2.5 x
(D) 10 x
37. Match the following :
List 1
(a) Infant industry argument
(b) Import substituting industrialization
(c) Reduction in the rates of
protection for manufacturing by
developing countries
(d) Industrialization of high
performance Asian economies
List 2
(i) Domestic industries are
established under the protection
of tariffs or import quotas
(ii) New industries need a temporary
period of protection
(iii)Not via import substitution but
via export of manufactured goods
(iv) Rapid growth of trade
Codes :
(a) (b) (c) (d)
(A) (iii) (i) (iv) (ii)
(B) (iv) (i) (ii) (iii)
(C) (iii) (iv) (i) (ii)
(D) (ii) (i) (iv) (iii)
38. What can you say about the
following statements pertaining to Foreign Direct Investment in India ?
(i) FDI through automatic route
does not require prior govt.
approval.
(ii) FDI through government route requires approval of the
government through Foreign
Investment Promotion Board.
(A) Both statement (i) and
statement (ii) are incorrect
(B) Statement (i) is incorrect and
statement (ii) is correct
(C) Both statement (i) and
statement (ii) are correct
(D) Statement (i) is correct and
statement (ii) is incorrect
39. Which of the following is not a tool used by RBI for regulating money supply in India ?
(i) Open market operations
(ii) Repo rate
(iii) Statutory Liquidity Ratio
(iv) Disinvestment
(A) (iv)
(B) (i)
(C) (iii)
(D) (ii)
40. Which of the following are examples
of a direct tax in India ?
(i) Excise duty
(ii) Service tax
(iii) Income tax
(A) (i), (ii), (iii)
(B) Only (iii)
(C) (i) and (iii)
(D) (ii) and (iii)
41. In the year 1966, the exchange
value of rupee against American
dollar was devalued by ................
(A) 75%
(B) 65%
(C) 48%
(D) 57%
42. The All India Rural Credit Survey Committee, 1954 was chaired by :
(A) D.R. Gadgil
(B) V.K.R.V. Rao
(C) A.D. Gorawala
(D) Vaikunthlal Mehta
43. Among top fifteen fastest growing service sector countries ........... share of services in its total GDP is less than 50 perc-entage.
(A) France
(B) Germany
(C) China
(D) Australia
44. Which is the correct descending order of India’s software export destination in recent times ?
(i) Asia Pacific, North America,
Europe
(ii) Europe, Asia Pacific, North
America
(iii) Europe, North America, Asia
Pacific
(iv) North America, Europe, Asia
Pacific
(A) (iv)
(B) (iii)
(C) (i)
(D) (ii)
45. The abbreviation ICOR suggests :
(A) International Credit Output
Ratio
(B) Incremental Capital Output
Ratio
(C) Incremental Capital Output
Range
(D) Indian Capital Output Rules
46. Statistic is a numerical quan-tity which is calculated from
(A) Population
(B) Sample
(C) Universe
(D) Hypothesis
47. Which of the following is used in chain indices ?
48. The most suitable average for
qualitative measurements is
..................... .
(A) Arithmetic mean
(B) Median
(C) Correlation coefficient
(D) Geometric mean
49. The strength (degree) of the
relationship between a set of
independent variable x and
dependent variable y ismeasured
by :
(A) Coefficient of correlation
(B) Coefficient of determination
(C) Standard Error of estimate
(D) All of the above
50. Consumer Price Index number is also known as :
(A) Wholesale Price Index number
(B) Cost of Living Index
(C) Sensitive
(D) Composite
that .......................... .
(A) Commodity is used both for the
export and direct domestic
consumption
(B) Commodity is used both for the
direct domestic consumption
and as an input to produce
another commodity
(C) Commodity is needed for direct
use but not as an input to
produce another commodity
(D) Commodity is needed as an
input to produce another
commodity but not for the direct
2. Stay-out pricing approach
.................. .
(A) Helps the firm to ascertain the maximum possible price it can charge from its consumers
(B) Helps the firm to ascertain the minimum possible price it can charge from its consumers
(C) Helps the firm to ascertain the maximum price it can pay to its vendors
(D) Helps the firm to ascertain the minimum price it can pay to its vendors
3. Profit maximising amount of inputs occurs when .................. .
(A) The slope of the Iso-profit line
equals the slope of theproduction function
(B) The slope of the Iso-profit line
exceeds the slope of the production function
(C) The slope of the production
function exceeds the slope of the
Iso-profit line
(D) The slope of the Iso-profit line
exceeds the slope of the Iso-
quant
4. The producer shall not produce in the third stage of production because in that stage ................ .
(A) The total product is negative
(B) The marginal product is
negative
(C) The average product is
stagnant
(D) The marginal product is falling
5. If the commodities are perfect
substitutes, the corresponding
indifference curves would be
................... .
(A) Negatively sloping curves
(B) Positively sloping straight lines
(C) Negatively sloping straight
lines
(D) L-shaped straight lines
6. In the context of welfare economics,the social welfare function was put forward by .................... .
(A) Hicks and Samuelson
(B) Pigou and Samuelson
(C) Robbins and Scitovszky
(D) Samuelson and Bergson
7. The average fixed cost (AFC) of
production curve is denoted by
............................ .
(A) Rectangular hyperbola
(B) U-shaped curve
(C) L-shaped curve
(D) J-shaped curve
8. In the context of demand theory, the expression ‘Choice reveals preference’ is ascribed to .................. .
(A) Paul Samuelson
(B) J.R. Hicks
(C) F. Machlup
(D) Robert Dorfman
9. Risk-return trade off plays an
important role in whose theory of money demand ?
(A) Tobin’s Portfolio Choice
(B) Friedman’s restated quantity
theory
(C) Baumol’s inventory theoretic
choice
(D) Cambridge money demand
theory
10. Ratchet effect relates to :
(A) Life-cycle hypothesis
(B) Permanent income hypothesis
(C) Relative income hypothesis
(D) Absolute income hypothesis
11. The Samuelson-Hicks type business cycle models will show stability as well as cyclical fluctuations only :
(A) Income movement equation
shows complex roots whose
magnitudes are less than one
(B) Income movement equation
shows real roots whose
magnitudes are less than one
(C) Income movement equation
shows complex roots whose
magnitudes are more than one
(D) Income movement equation
shows real roots whose
magnitudes are more than one
12. In simple Keynesian model of output determination, gover-nment expenditure will have a bigger impact if :
(A) Marginal propensity to consume
is lower
(B) Marginal propensity to consume
is higher
(C) Marginal propensity to save is
constant
(D) Marginal propensity to consume
is zero
13. Match the following :
Statement 1 Statement 2
(a) Inventory (i) Edmund
approach to Phelps
money demand
(b) Adaptive ( ii) William
expectation Baumol
(c) Upper turning (iii)John Hicks
point
(d) Permanent (iv) Milton
income Friedman
Codes :
(a) (b) (c) (d)
(A) (i) (ii) (iii) (iv)
(B) (ii) (iii) (i) (iv)
(C) (ii) (i) (iii) (iv)
(D) (ii) (i) (iv) (iii)
14. According to Cambridge version of demand for money, money demand will increase if :
(A) Velocity of money increases
alone
(B) GDP in the economy decreases
alone
(C) GDP in the economy and velocity
increase at the same rate
(D) Velocity in the economy
decreases alone
15. If investment becomes totally
interest insensitive, then :
(A) Fiscal policy is ineffective
(B) Fiscal policy is effective
(C) Monetary policy is effective
(D) Both fiscal and monetary policy are ineffective
16. Long-run Phillips curve will not be vertical if :
(A) Price inflation partially takes
into account expected price
inflation
(B) Price inflation fully takes into
account expected price inflation
(C) Price inflation does not take into
account expected price inflation
at all
(D) Expected price inflation is
always zero
17. Prof. Mahalanobis developed ........... model in 1955 which was later used in Five Year Plans of India.
(A) Four sector
(B) Two sector
(C) Single sector
(D) Three sector
18. World Bank has indicated GDP growth rate in India is 7.6 percent in 2016 and will be .................. in 2017.
(A) 7.8%
(B) 7.7%
(C) 7.9%
(D) 8.0%
19. In which strategic sector of Indian Economy hundred percent Foreign Direct Investment (FDI) is allowed recently ?
(A) Science and technology
(B) Space
(C) Defence sector
(D) Critical medicines
20. Which one of the following has propounded the modern theory of distribution ?
(A) Nicholas Kaldor
(B) David Ricardo
(C) Mrs. Joan Robbinson
(D) J.S. Mill
21. Cost-Benefit Analysis was developed in USA for appraisal of investments in ..................... .
(A) Agriculture and Health projects
(B) Health and Garden projects
(C) Irrigation and Transportation
project
(D) Technology and Health project
22. Quaternary Sector involves
.................. .
(A) Research and development
(B) Provision of services
(C) Industry and manufacturing
(D) Agricultural services
23. Match the following :
Theory
(a) Theory of stages of economic
growth
(b) Theory of unlimited supplies of labour
(c) The Big Push Theory
(d) Theory of unbalanced growth
Propounder
(i) Arthur Lewis
(ii) W.W. Rostow
(iii)A.O. Hirschman
(iv) Rosenstein Rodan
Codes :
(a) (b) (c) (d)
(A) (iv) (iii) (i) (ii)
(B) (iii) (iv) (ii) (i)
(C) (ii) (i) (iv) (iii)
(D) (i) (ii) (iii) (iv)
24. To ensure fiscal autonomy to states,14th Finance Commission
recommended to increase its share from :
(A) 32% to 42%
(B) 30% to 42%
(C) 30% to 40%
(D) 35% to 40%
25. An Integrated Goods and Services Tax (IGST) would be collected by :
(A) State Governments
(B) Central Government
(C) Municipal Corporations
(D) Finance Commission
26. Who is not the member of 14th Finance Commission ?
(A) Sushma Nath
(B) Sudipto Mundle
(C) M. Govind Rao
(D) C.H. Hanumanta Rao
27. Which one of the following is not a Non-Debt Capital Receipts ?
(A) Disintvestment receipts
(B) Dividend receipts
(C) Short-term borrowing
(D) Tax Revenue
28. A public good is ..................... .
(A) A good that the public must pay for
(B) Non-rival in consumption
(C) More costly than a private good
(D) Paid for by a government
29. Reduction in consumer’s welfare as a result of tax is referred to :
(A) Equity in taxation
(B) Dead weight loss
(C) Efficiency in taxation
(D) Incidence of tax
30. Which one of the following is the major component of revenue
expenditure of Central Gover-nment ?
(A) Pensions
(B) Interest payments
(C) Defence expenditure
(D) Expenditure on education
31. All transactions of ............... nature are included in the current account of Balance of Payments.
(A) Stock
(B) Volatile
(C) Flow
(D) Fluctuating
32. The commodity in which a nation has the least absolute disadvantage represents its area of :
(A) Comparative disadvantage
(B) Comparative advantage
(C) Absolute advantage
(D) Cannot say without additional
information
33. Ricardo’s theory of comparative advantage is based on :
(A) The opportunity cost theory
(B) The labour theory of value
(C) The law of diminishing returns
(D) The psychological law of
consumption
34. We can best understand Smith’s
views on trade if we regard them as a reaction to :
(A) The law of comparative
advantage
(B) The mercantilist view on trade
(C) Ricardo’s views on trade
(D) The law of absolute advantage
35. Uniformity in exchange rate occurs due to :
(A) Foreign exchange arbitrage
(B) Devaluation
(C) Hedging
(D) Speculation
36. If a country can produce 10 units of good x or 4 units of good y, the opportunity cost of 1 y is :
(A) 1 x
(B) 0.4 x
(C) 2.5 x
(D) 10 x
37. Match the following :
List 1
(a) Infant industry argument
(b) Import substituting industrialization
(c) Reduction in the rates of
protection for manufacturing by
developing countries
(d) Industrialization of high
performance Asian economies
List 2
(i) Domestic industries are
established under the protection
of tariffs or import quotas
(ii) New industries need a temporary
period of protection
(iii)Not via import substitution but
via export of manufactured goods
(iv) Rapid growth of trade
Codes :
(a) (b) (c) (d)
(A) (iii) (i) (iv) (ii)
(B) (iv) (i) (ii) (iii)
(C) (iii) (iv) (i) (ii)
(D) (ii) (i) (iv) (iii)
38. What can you say about the
following statements pertaining to Foreign Direct Investment in India ?
(i) FDI through automatic route
does not require prior govt.
approval.
(ii) FDI through government route requires approval of the
government through Foreign
Investment Promotion Board.
(A) Both statement (i) and
statement (ii) are incorrect
(B) Statement (i) is incorrect and
statement (ii) is correct
(C) Both statement (i) and
statement (ii) are correct
(D) Statement (i) is correct and
statement (ii) is incorrect
39. Which of the following is not a tool used by RBI for regulating money supply in India ?
(i) Open market operations
(ii) Repo rate
(iii) Statutory Liquidity Ratio
(iv) Disinvestment
(A) (iv)
(B) (i)
(C) (iii)
(D) (ii)
40. Which of the following are examples
of a direct tax in India ?
(i) Excise duty
(ii) Service tax
(iii) Income tax
(A) (i), (ii), (iii)
(B) Only (iii)
(C) (i) and (iii)
(D) (ii) and (iii)
41. In the year 1966, the exchange
value of rupee against American
dollar was devalued by ................
(A) 75%
(B) 65%
(C) 48%
(D) 57%
42. The All India Rural Credit Survey Committee, 1954 was chaired by :
(A) D.R. Gadgil
(B) V.K.R.V. Rao
(C) A.D. Gorawala
(D) Vaikunthlal Mehta
43. Among top fifteen fastest growing service sector countries ........... share of services in its total GDP is less than 50 perc-entage.
(A) France
(B) Germany
(C) China
(D) Australia
44. Which is the correct descending order of India’s software export destination in recent times ?
(i) Asia Pacific, North America,
Europe
(ii) Europe, Asia Pacific, North
America
(iii) Europe, North America, Asia
Pacific
(iv) North America, Europe, Asia
Pacific
(A) (iv)
(B) (iii)
(C) (i)
(D) (ii)
45. The abbreviation ICOR suggests :
(A) International Credit Output
Ratio
(B) Incremental Capital Output
Ratio
(C) Incremental Capital Output
Range
(D) Indian Capital Output Rules
46. Statistic is a numerical quan-tity which is calculated from
(A) Population
(B) Sample
(C) Universe
(D) Hypothesis
47. Which of the following is used in chain indices ?
48. The most suitable average for
qualitative measurements is
..................... .
(A) Arithmetic mean
(B) Median
(C) Correlation coefficient
(D) Geometric mean
49. The strength (degree) of the
relationship between a set of
independent variable x and
dependent variable y ismeasured
by :
(A) Coefficient of correlation
(B) Coefficient of determination
(C) Standard Error of estimate
(D) All of the above
50. Consumer Price Index number is also known as :
(A) Wholesale Price Index number
(B) Cost of Living Index
(C) Sensitive
(D) Composite
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