by · theories of development—classical, marx and schumpeter; economic growth—harrod-domar...

By

Gopal Garg

Revised by

Dr. Anupam Agrawal

Upkar Prakashan, Agra-2

(Paper-II & III)

( ii )

© Publishers

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ISBN : 978-93-5013-330-9

Code No. 1775

Printed at : UPKAR PRAKASHAN (Printing Unit) Bye-pass, AGRA

Sixth Edition : 2017

( iii )

Contents

● ● ● ● ● Previous Years’ Solved Papers

1. Micro-Economic Analysis .................................................................................................. 3–144

● ● ● ● ● Objective Type Questions .............................................................................................. 94

2. Macro-Economic Analysis ................................................................................................. 145–243


3. Development and Planning ................................................................................................ 244–366


4. Public Finance .................................................................................................................. 367–415


5. International Economics .................................................................................................... 416–460


6. Indian Economy ................................................................................................................ 461–548


7. Statistical Methods ............................................................................................................ 549–605


8. Mathematical Economics ................................................................................................... 606–642


9. Population of India ............................................................................................................ 643–665


10. The Agricultural & Industrial Structure ............................................................................... 666–720


( iv )

Syllabus

Paper–II

1. Micro-economic AnalysisDemand analysis—Marshallian, Hicksian and Revealed preference approaches.Theory of Production and Costs.Pricing and output under different forms of market structure.Factor Pricing analysis.Elements of general equilibrium and new welfare economics.

2. Macro-economic AnalysisDetermination of output and employment—Classical approach, Keynesian approach, Consumption hypotheses.Demand for Money—Fisher and Cambridge versions, Approaches of Keynesian, Friedman, Patinkin, Baumol andTobin.Supply of Money, Determinants of money supply, High-powered money, Money multiplier.Phillips Curve analysis.Business cycles—Models of Samuelson, Hicks and Kaldor.Macro-economic Equilibrium—Relative roles of monetary and fiscal policies.

3. Development and PlanningEconomic Growth, Economic Development and sustainable Development—Importance of institutions—Government and markets—Perpetuation of underdevelopment—Vicious circle of poverty,circular causation, structural view of underdevelopment—Measurement of development conventional, HDI andquality of life indices.Theories of Development—Classical, Marx and Schumpeter; Economic Growth—Harrod-Domar model, instabilityof equilibrium, Neoclassical growth—Solow’s model, steady state growth. Approaches to development : Balancedgrowth, critical minimum effort, big push, unlimited supply of labour, unbalanced growth, low income equilibriumtrap.Indicators and measurement of poverty.Importance of agriculture and industry in economic development—choice of techniques and appropriatetechnology—Investment criteria—Elementary idea of cost-benefit analysis.Trade and Aid—International trade as ‘engine of growth’—Globalization and LDC’s Objectives and role of monetaryand fiscal policies in economic development.Techniques of planning; Plan Models in India; planning in a market-oriented economy.

4. Public FinanceRole of the Government in Economic activity—Allocation, distribution and stabilization functions; Private, Publicand Merit goods.The Public Budgets—Kinds of Budgets, Zero-base budgeting, different concepts of budget deficits; Budgets ofthe Union Government in India.Public Expenditure—Hypothesis; effects and evaluation.Public Revenue—Different approaches to the division of tax burden, incidence and effects of taxation; elasticityand buoyancy; taxable capacity.

( v )

Public Debt—Sources, effects, burden and its management.

Fiscal Federalism—Theory and problems; Problems of Centre-State Financial relations in India.Fiscal Policy—Neutral and compensatory and functional finance; balanced budget multiplier.

5. International EconomicsTheories of International Trade : Empirical verification and Relevance.International Trade under Imperfect competition.

Terms of Trade and Economic Growth—Secular.

Deterioration of Terms of Trade Hypothesis—a critical review.Equilibrium/disequilibrium in Balance of Payment—Traditional, Absorption and Monetary approaches for adjustment

in the Balance of Payments, Foreign Trade multiplier.

Impact of Tariffs, Partial and general equilibrium analysis; Political economy of Non-Tariff Barriers.Theory of regionalism at Global level—Collapse of Brettonwood System—Recent Monetary reforms.

Trade Policy and Reforms in India.

6. Indian EconomyBasic Economic indicators—National income, performance of different sectors.

Trends in prices and money supply.

Agriculture—Institutional and technological aspects, new agricultural policy.Industry—New industrial policy and liberalization.

Money and banking—Concepts of money supply, inflation, monetary policy and financial sector reforms.

Public finance—Trends in revenue and expenditures of the Central and State Governments, Public debt; analysis ofthe Union Budget.

Foreign trade—Trends, Balance of payments and trade reforms Poverty, unemployment, migration and environment.

7. Statistical MethodsMeasures of Central tendency, dispersion, skewness and kurtosis.

Elementary theory of probability—Binomial, Poisson and Normal distributions.Simple correlation and regression analysis.

Statistical inferences—Applications, sampling distributions (t, χ2 and F tests), sampling of attributes, testing of

Hypothesis.Index numbers and time series analysis.

Sampling and census methods, types of sampling and errors.

Paper–III (A)[Core Group]

Unit-I

Theory of Demand—Axiomatic approach, Demand functions, Consumer behaviour under conditions of uncertainty.Theory of production.

Collusive and non-collusive oligopolies.

Different models of objectives of the firm—Baumol, Morris and Williamson Factor pricing.General equilibrium and Welfare Economics.

Unit-II

Keynesian and post-Keynesian approaches to theory of output and employment; concept of investment multiplier;consumption hypotheses.

Theories of investment and accelerator.

Theories of demand for money—Keynesian and post-Keynesian.

( vi )

Different approaches to money supply; money supply; components and determinants; money multiplier.

Output—price determination (aggregate supply and aggregate demand curve analysis) Fleming-Mundell open

economy model.

Unit-III

Development and Growth—Role of institutions.

Theories of growth and development—Models of growth of Joan Robinson and Kaldor; Technical Progress—

Hicks, Harrod and learning by doing, production function approach to the determinants of growth : Endogenous

growth : role of education, research and knowledge—explanation of cross country differentials in economic

development and growth.

Theories of development—Classical, Marx, Schumpeter and structural analysis of development—Imperfect market

paradigm, Lewis model of development, Ranis-Fei model, Dependency theory of development.

Factors in economy development—natural resources, population, capital, Human Resource Devel-opment and

infrastructure.

Trade and development—trade as engine of growth, two-gap analysis, Prebisch, Singer and Myrdal views; gains

from trade and LDCs.

Unit-IV

Theories of taxation, types, incidence and effects.

Theories of public expenditure—effects on savings, investment and growth Burden of public debt.

Union Finance—Trends in Revenue and Expenditure of the Government of India.

State Finance—Trends in Revenue and Expenditure of the State Governments.

Public Debt—India’s Public debt since 1951—growth composition, ownership pattern and debt management.

Union-State Financial Relations—Horizontal and vertical imbalances; the Finance Commissions.

Fiscal Policy and Fiscal Reforms in India.

Unit-V

‘Monetary approach’ and adjustment in the balance of payments.

Regional blocs—multilateralism and world trading system.

The Political Economy of imposition of non-tariff barriers.

International trade under conditions of imperfect competition in goods market.

Theory of International reserves.

Optimum Currency Areas—Theory and impact in the developed and developing countries.

WTO and its impact on the different sectors of the economy.

Unit-VI

Components of money supply.

Role, constituents and functions of money and capital markets.

RBI—recent monetary and credit policies.

Commercial banks and co-operative banks.

Specialized financial and investment institutions.

Non-Bank financial institutions and Regional Rural Banks.

Unit-VII

Industrial structure and economic growth.

Pattern of industrialization—Public and Private; large and small industries.

Theories of Industrial location—Indian experience.

( vii )

Industrial productivity—measurement, partial and total trends.

Industrial Finance in India.Industrial Labour—Problems, policies and reforms in India.

Economic Reforms and industrial growth.

Unit-VIII

Population and Economic development—interrelation between population, development and environment,

sustainable development.

Malthusian theory of population, Optimum theory of population, theory of demographic transition, population as‘Limits to Growth’ and as ‘Ultimate Source’.

Concepts of Demography—Vital rates, Life tables, composition and uses, Measurement of fertility—Total fertility

rate, gross and net reproduction rate—Age pyramids, population projection—stable, stationary and quasi-stationarypopulation; characteristics of Indian population through recent census.

Poverty in India—Absolute and relative; analysis of poverty in India.

Environment as necessity—amenity and public goods; causes of environmental and ecosystem degeneration—policies for controlling pollution—economic and persuasive; their relative effectiveness in LDCs; Relation between

population, poverty and environmental degradation—microplanning for environment and eco-preservation—water

sheds, joint forest management and self-help groups.Role of State in environmental preservation—Review of environmental legislation in India.

Unit-IX

Role of Agriculture in Indian Economy—Share of Agriculture, interrelationship between agriculture and industry.Institutional aspects—Land reforms, Green revolution.

Technological aspects—Agricultural inputs and shifts in production function.Capital formation in the rural sector—Savings, assets and credits.

Strategies for rural development.

Regional disparities in Indian agriculture.Cooperative movement in India—Organization, structure and development of different types of cooperatives in

India.

Unit-X

Application of Differential and Integral Calculus in theories of consumer behaviour, Production and pricing under

different market conditions.

Input-output analysis and linear programming.Application of Correlation and Regression.

Testing of Hypothesis in Regression Analysis.

Paper–III (B)[Elective/Optional]

Elective-ISingle Equation Linear Model :

Assumption and properties of OLS.

Multiple Regression Model—Estimation and Interpretation.

Multi-collinearity—Auto-correlation and heteroscedasticity—Causes, detection, consequences and remedy.

Dummy variables, distributed lags—Need, limitations and interpretation.

Applications in Economics.

( viii )

Simultaneous Equation Models :

Structural and reduced forms.

Endogenous and exogenous variables.

Identification problems and conditions.

Single equation methods of estimations—TSLS, indirect least squares and least variance ratio.

Techniques of Forecasting :

ARMA, ARIMA

Econometric properties of time series, Unit root, integrated series, random walk and white noise.

Elective-II

Theory of Consumer Behaviour and Theory of Firms.

Theory of Pricing—Monopoly, Monopolistic competition, Duopoly and Oligopoly.

Theory of Games—Two-person, Zero-sum Game, Pure and Mixed strategy, Saddle point solution, Linear programming

and input-output analysis.

Static and Dynamic Multiplier and Accelerator, Samuelson-Hicks trade cycle model.

Growth Models—Harrod and Domar, Neoclassical models—Solow, Meade, Kaldor’s Model with technological

progress, endogenous growth models.

Employment and output determination with fixed and flexible prices (IS-LM, Aggregate demand and aggregate

supply analysis).

Elective-III

The Rise and Fall of Bretton-Wood and emerging International Monetary System.

World Trading System—Evolution and Distortions.

Globalization—Developments in Exchange Markets, Euro-Currency Markets, and International Bond Markets,

International Debt crisis.

Theory of Foreign Exchange Markets—Exchange Trading, Arbitrage and Market Hedging.

Elective-IV

Growth and Productivity trends in Indian Agriculture.

Development of distributive institutions—Costs and price policies.

Agricultural marketing and credit.

Trends in migration and labour markets. Minimum Wages Act.

WTO and sustainable agricultural development.

Reforms in Indian agriculture.

Elective-V

Planning and Economic Development.

Costs, Prices, WTO and Indian Agriculture.

Globalization, Liberalization and the Indian Industrial Sector.

Infrastructure and Economic Development.

Social Sector, Poverty and Reforms in India.

Women, Environment and Economic Development.

Trade Reforms and Liberalization.

Financial sector reforms.

Fiscal policy and fiscal reforms.

UGC Economics (II) Jan. 2017 | 1

EconomicsUGC-NET/JRF Exam.

(January 2017)Solved Paper

2 | UGC Economics (II) Jan. 2017

(Held on 22 January, 2017)

Economics(Paper–II)

Note—This paper contains fifty (50) objective typequestions of two (2) marks each. All questions are com-pulsory.

1. Marginal rate of transformation between two goods Xand Y is defined is :

(A) MRTX, Y = X

Y

MC

MC(B) MRTX, Y = MRSX, Y

(C) MRTX, Y = MRSX, Y = X

Y

P

P(D) None of the above

2. Consider the following statements regarding theexpansion path of firm :I. It shows least cost combination for pro-ducing

different level of outputs.II. The input prices remain constantOf the above which statement is/are true ?Answer from the codes given below :Codes :(A) Both I and II are true (B) Only I is true(C) Only II is true (D) Neither I nor II is true

3. The First Fundamental Theorem of Welfare Economicsrequires :(A) Producers and consumers to be price takers(B) That the economy operate at some point on the

utility possibility curve(C) That there be an efficient market for every commodity(D) All of the above

4. Which among the following allocation/distributioncorresponds to Rawlsian concept of equity ?(A) All members of the society receive equal amount

of goods(B) Maximise the utility of the least well off people(C) Market outcomes are most equitable(D) Maximise the total utility of all members of the

society

5. Under discriminating monopoly, if the elasticity ofdemand in market I is 2 and in market II, it is 1, (elasticitiesbeing in absolute terms) then the price behaviour ofthe monopolist will be :(A) To charge a higher price in market I(B) To charge a higher price in market II

(C) To charge the same price in both the markets(D) In market I, charge double the price of that is

charged in market II

6. Give the damand function :

Q = 20

P, where symbols have their usual meaning, at

which price, the elasticity of demand would be unity ?(A) 20 (B) 10(C) 5 (D) All of the above

7. The idea of indicative planning was first adopted inwhich Five year Plan of India ?(A) Second Plan (B) Fifth Plan(C) Seventh Plan (D) Eighth Plan

8. Consider the following statements about RashtriyaSwasthya Bima Yojana (RSBY) :(1) Under RSBY the premium is shared on 85 : 15 basis

by the centre and state governments(2) In the case of the North-Eastern States and Jammu

& Kashmir, under RSBY the premium is shared ina 90 : 10 ratio

Which of the statement(s) given above is/are correct ?(A) Only (2) (B) Only (1)(C) Both (1) and (2) (D) Neither (1) nor (2)

9. Match the following from the lists given below :List-I(a) National Rural Employment Programme (NREP)(b) Sukanya Samridhi Yojana (SSY)(c) Food for Work Programme (FWP)(d) Rural Landless Employment Guarantee Programme

(RLEGP)List-II1. 2001 2. 19803. 1983 4. 2015Select the correct codes :Codes :

(a) (b) (c) (d)(A) 4 3 2 1(B) 1 2 4 3(C) 2 4 1 3(D) 3 2 4 1

10. Which of the following has the highest share in India’sexternal debt at the end of March 2015 ?(A) Rupee debt


(B) NRI deposits(C) Commercial Borrowings(D) Export credit

11. R.B.I. can print currency notes upto the value of :(A) ` 25,000 (B) ` 10,000(C) ` 5,000 (D) ` 1,000

12. Union Budget 2016-17 imposed a 15% surcharge onthe income exceeding :(A) ` 2 crore (B) ` 75 lakh(C) ` 10 lakh (D) ` 1 crore

13. ‘Paramparagat Krishi Vikas Yojana’ aims to boost :(A) Drip Irrigation (B) Organic Farming(C) Horticulture Crops (D) Vegetable Production

14. Classical dichotomy refers to which one of thefollowing ?(A) There are two sectors of the economy, namely,

agriculture and industry(B) Influence of money is not on the real variables

like employment and output but on price level(C) Savings come only from profits and not from the

wages(D) All of the above

15. The basic rationale of the theory of ‘Big-Push’ is basedupon the idea of :(A) Size of population (B) External economies(C) Internal economies (D) None of the above

16. “Central problem in the theory of economic develop-ment is to understand the process by which a communitywhich was previously saving 4 to 5 per cent or less ofits national income, converts itself into an economywhere voluntary savings is running about 12 to 15 ofnational income or more.” Who among the followingeconomists is attributed with this view ?(A) Ragner Nurkse (B) P. N. Rogenstein-Rodan(C) Gunnar Myrdal (D) W. Arthur Lewis

17. In the Harrod-Domar equation g = ,s

v where v is

defined as :(A) The value of country’s capital stock(B) Incremental capital output ratio(C) The change in country’s capital stock(D) None of the above

18. Leibenstein in his critical minimum effort thesis treatspopulation as a factor that is :(A) Investment–inducing(B) Income–generating(C) Market–expanding(D) Income–depressing

19. Who among the following economists was not asso-ciated with the Dependency Theory Development ?(A) Raul Prebisch(B) T. D. Santos(C) Andre Gunder Frank(D) Gunnar Myrdal

20. The saving function used in the neo-classical growthmodel is a :(A) Classical saving function(B) Proportional saving function(C) Differential saving function(D) Constant saving function

21. Consider the following items in the balance of paymentin India :(i) NRI deposits(ii) RemittancesWhich among the above is/are part of the capital accountof balance of payments ? Answer from the codes below :Codes :(A) Only (i) above(B) Only (ii) above(C) Both (i) and (ii) above(D) Neither (i) nor (ii) above

22. Which of the following pairs is not correctly matched ?(A) Taussing : Barter Terms of Trade(B) Prebisch : Deteriorating Terms of Trade(C) Marshal : Offer Curves(D) Walras : Dumping Conditions

23. Which among the following is correct for the dis-cretionary fiscal action ?(A) Payment of Unemployment insurance(B) Payment of Social Security to the retired indivi-

duals(C) A managed change in level of Government spending

and/or net tex revenues(D) Automatic changes in net tax revenues that result

from income tax structure

24. Who among the following called trade as the ‘handmaiden’ of growth ?(A) J. Viner (B) Irwing B. Kravis(C) Anne Kruger (D) J. Bhagwati

25. For the import substitution policy of Latin Americancountries in 1950’s which of the following is/are true ?(i) It resulted in overvalued exchange rate.(ii) It treated development as a natural process.Answer from the codes below :Codes :(A) Both (i) and (ii) are true(B) Only (i) is true(C) Only (ii) is true(D) Neither (i) nor (ii) are true

26. Consider the following concepts :(i) Leontief paradox(ii) Linder HypothesisWhich among the following can be treated as exceptionto the conclusions of the Heckscher-Ohlin theory ?Answer from the codes below :Codes :(A) Both (i) and (ii) are exception(B) Neither (i) nor (ii) are exception

4 | UGC Economics (II) Jan. 2017

(C) Only (i) is an exception(D) Only (ii) is an exception

27. Which among the following statements are true forthe proposed GST arrangements India ?(i) Both Centre and State taxes will be collected at

the point of sale.(ii) The Centre and State GST will be charged on the

manufacturing cost.Of the above, which statement/s is/are true ? Answerfrom the code below :Codes :(A) Neither (i) nor (ii) are true(B) Only (i) is true(C) Only (ii) is true(D) Both (i) and (ii) are true

28. Economists refer to an unanticipated inflation thatreduces the real value of outstandi government debtas :(A) Burden of inflation (B) Unanticipated default(C) Seigniorage (D) The inflation tax

29. A public good is :(i) Non-excludable in nature(ii) Nonrival in consumption(iii) Excludable in nature(iv) A good that public must possessSelect the correct answer using the codes given below :(A) Both (i) and (ii) (B) Only (iii)(C) Both (iii) and (iv) (D) Only (iv)

30. A forward-shifted tax will affect :(A) Buyers more than sellers(B) Sellers more than buyers(C) Buyers and sellers equally(D) Government revenues negatively

31. Assume B is social benefits, C is social costs, r is thesocial discount rate, t is the time and T is the life of theinvestment project. The Net Present Value (NPV) of aproject is :

(A) NPV =

T

0

B C

(1 + )

t tt

t r

(B) NPV =

T

0

C B

(1 + )

t tt

t r

(C) NPV =

T

0

(1 + )

B C

t

t tt

r

(D)NPV =

T

0

B C

(C )

t tt

t t

32. With reference to the characteristics of ‘non-excludability’ and ‘non-rivalry’, “Law and Order” is aclassic example of :(A) A negative externality(B) A positive externality(C) Increasing returns(D) A public good

33. In the trade cycle theory of J. R. Hicks, long runequilibrium growth is determined by :(A) Technology(B) Population

(C) Autonomous investment(D) Both (A) and (B) above

34. Which among the following is not a characteristic ofstagflation ?(A) High inflation (B) High unemployment(C) Low growth (D) High comployment

35. Consider the following statements regarding the con-sumption function fitted by Simor Kutznets to USeconomic data for the period 1869 to 1929 :(i) There appeared no constant terms in the linear

consumption function so fitted.(ii) The APC and MPC were not significantly different.Which of the above statement/s is/are true ? Answerfrom the codes below :Codes :(A) Both statements are not true(B) Only (i) is true(C) Only (ii) is true(D) Both statements (i) and (ii) are true

36. Which among the following theory/approach does nottreat consumption to depend upon expected income ?(A) Keynes’ approach(B) Friedman’s approach(C) Life cycle approach(D) Both (A) and (C) above

37. In an economy, the saving and investment functionsare given as :S = – 100 + 0·2 yI = – 30 + 0·1 yWhat will be equilibrium level of income ?(A) 1,000 (B) 900(C) 600 (D) 700

38. For the set of observations : 0, 4, 5, 7, 100, which one of thefollowing is the most suitable average ?(A) Arithmetic Mean (B) Geometric Mean(C) Median (D) Harmonic Mean

39. Which is a random sampling method ?(A) Quota Sampling(B) Purposive Sampling(C) Systematic Sampling(D) Cluster Sampling

40. The area between – 3 and + 3 under standard normalcurve is :(A) 1 (B) 0·9973(C) 0·95 (D) 0·6826

41. For a symmetrical distribution skewness is :(A) 3 (B) 0(C) 1 (D) 2

42. Given the following data :Number of observations = 100Arithmetic Mean = 180Variance = 324


The coefficient of variation will be :(A) 32·4% (B) 10%(C) 18% (D) 1·8%

43. Which of the following satisfies time reversal test butnot factor reversal test ?(A) Lespeyres (B) Marshall-Edgeworth(C) Fisher (D) Paasche

44. For testing the association of attributes which of thefollowing tests is suitable ?(A) t-test (B) F-test(C) 2-test (D) Z-test

Note : Questions 45 to 50 are Assertion (A) and Reason(R) type. Key to these questions is as follows :(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 the correct

explanation of (A)(C) (A) is true, but (R) is false(D) (A) is false but (R) is true

45. Assertion (A) : In the long period and in perfectcompetiton, a firm earns only normal profit.Reason (R) : There are no transport costs in the system.

46. Assertion (A) : Labour becomes ready to work overtime.Reason (R) : Industry pays its employees efficiencywags.

47. Assertion (A) : The principle of progressive taxationis a generally accepted state policy.Reason (R) : Progressive taxation does not affectdistribution of income and wealth.

48. Assertion (A) : Stagflation can develop due to marketimperfections.Reason (R) : Wags flexibility can cause stagfla-tion.

49. Assertion (A) : Friedman treats money as a Luxurygood.Reason (R) : It serves as a medium of exchange.

50. Assertion (A) : Moving average method is a methodof trend estimation.Reason (R) : Regression method is used to estimatefluctuations in time series.

Answers with Hints1. (A) 2.(A) 3.(D) 4. (B) Rawlsian Theory of Equity & Justice attempts to

solve the problem of distributive justice in which heattempts to maximise the utility of the least well offpeople.

5. (B) Under discriminating monopoly, producer will sellmore at lower price in market having more elasticityand will sell less at higher price in market having lowerelasticity.

6. (D) 7.(D) 8. (A) In RSBY share ratio of centre and state is 75 : 25

(not 85 : 15). 9. (C)

10. (C) Rupee Debt 0·3%, NRI Deposit 24·2%, CommercialBorrowings 38·0%, Export Credit 2·7%.

11. (B) 12.(D) 13.(B)14. (B) Classical Dichotomy (Patinkin 1965) refers to the

idea that real variables like output and employmentare independent of monetary variables.

15. (B) Big Push Theory given by Rosensteni Rodar dealswith external economies and indivisibilities.

16. (D) 17.(B)18. (D) Theory is based on relationship between : (a) Per

capita income, (b) Population growth, (c) Investment.Population is ‘Income Depressing’ while investment is‘Income Generating’.

19. (D) 20.(B) 21.(A)22. (D) Walras model is General Equilibrium Model.23. (C) 24.(B) 25.(B)26. (A) Leontief tested H-O Theorem empirically on US

economy & found that US being capital intensiveeconomy exported labour intensive goods which isagainst H-O Theory. Linder hypothesis also makescontradiction with H-O Theory.

27. (D)28. (D) Inflation tax is a term which refers to financial loss

of value suffered by holders of cash and (if inflation isunexpected) fixed rate bonds.

29. (A) A good or service is non-excludable if non-payingconsumers can not be prevented from accessing it.

30. (A)

31. (A) NPV = 1 2

1 2

P P

(1 ) (1 )r r

+ ......... where Pi = cash

inflow, r = rate of discountBt – Ct = Pt.

So, NPV =

T

0

B C

(1 )

t tt

t r

where T = Term period.

32. (D) 33.(C) 34.(D) 35.(D)36. (A) Keynes takes investment to depend on expected

income (or returns).37. (D) In equilibrium S = I

– 100 + 0·2y = – 30 + 0·1y·1y = 70

y = 70038. (C) 39.(C) 40.(B) 41.(B)42. (B) N = 100

X = 1802 = 324. So = 18

CV =X

× 100 =

18

180× 100 = 10%

43. (B) Lespeyres and Paasche’s Index No. do not satisfyany of the test—i.e., both Time Reversal and FactorReversal Test. Fisher’s Ideal Index No. Satisfy both thetests.

44. (C) 45.(B) 46.(B) 47.(C) 48.(B)49. (B) 50.(C)

6 | UGC Economics (III) Jan. 2017

UGC-NET/JRF Exam., Solved Paper(Held on 22 January, 2017)

Economics(Paper–III)

Note—This paper contains seventy five (75) objec-tive type questions of two (2) marks each. All questionsare compulsory.

1. Which among the following is/are true for a Cartel ?(i) It aims at maximising of individual firm’s profit.(ii) It decides the total output in the industry to which

Cartel represents.(iii) It does not fix the price at which members sell

their output.Answer from the code below—(A) All are true(B) (i) and (ii) are true(C) Only (ii) is true(D) Only (i) and (iii) are true

2. Why does demand curve have a negative slope ?(i) Due to income effect only(ii) Due to substitution effectAnswer from the code below—(A) Both (i) and (ii)(B) Only (i)(C) Only (ii)(D) Neither (i) nor (ii)

3. In the entry prevention model of Bain, firms chargepremium over—(A) Long period competitive price(B) Short period competitive price(C) Lowest average cost(D) None of the above

4. Which among the following is not well matched ?Goods Nature

(A) Fishing in the lage lake – Non-exclusive,but rival

(B) Air – Non-exclusive andnon-rival

(C) Use of a light house – Rival(D) Stock of washing

machines – Exclusive

5. The slope of the production possibility curve is the—(A) marginal rate of exchange(B) marginal rate of substitution(C) average rate of transformation(D) marginal rate of transformation

6.

The gain in profit income from an increase in immigra-tion according to this diagram is—(A) the area BDL’L(B) the area of WBDW’(C) the areas WBFW’ and FDL’L together(D) the areas WBDW’ and FDL’L together

7. The demand for rare paintings, and rare stamps etc. isexplained by which among the following effect ?(A) Snob effect (B) Bandwagon effect(C) Veblen effect (D) None of the above

8. A market is said to be economically efficient if itmaximises—(A) consumer surplus(B) producer surplus(C) aggregate of consumer and producer surplus(D) None of the above

9. Who among the following economists are associatedwith the concept of Quasi rent ?(i) A. Marshal (ii) J. Robinson(iii) D. RicardoAnswer from the code below—(A) Only (i) and (iii) (B) (i) and (ii)(C) All the three (D) Only (iii)

10. In the adjoining diagram, which of the line representlaw of returns ?

UGC NET /JRF /SET Economics (PaperII & III)

Publisher : Upkar Prakashan ISBN : 9789350133309 Author : Gopal Garg

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