The complete UGC NET June 2023 question paper for Economics, covering Paper 2 (Economics). Every question below is shown with its options and the correct answer, and a detailed explanation you can unlock by signing in. All 100 questions are free to practise.
| Exam | UGC NET June 2023 |
|---|---|
| Papers | Paper 2 (Economics) |
| Exam date(s) | June 20, 2023 |
| Shift(s) | Shift 1 |
| Paper 2 questions | 100 questions · 120 minutes · 200 marks |
| Total | 100 questions |
| Marking scheme | +2 per correct answer · No negative marking |
100 questions with the answer key and explanations.
Suppose good 1 is taken on horizontal axis and good 2 on vertical axis, then what happens to the budget line if the price of good 1 doubles and price of good 2 triples?
Answer: (B) The budget line becomes flatter
Explanation
Suppose that a scarce resource, facing a constant demand, will be exhausted in 10 years. If an alternative resource will be available at a price of $40 and if the interest rate is 10%, what must be the price of the scarce resource today -
Answer: (D) $15.42
Explanation
Which one of the following is not a characteristic of market structure?
Answer: (D) Vertical integration
Explanation
Which of the following is not true in the case of second theorem of welfare economics?
Answer: (C) It holds when there are increasing returns to scale.
Explanation
Taylor's Rule tells.
Answer: (A) How monetary authority sets interest rate in response to economic activity
Explanation
Monetary base of an economy is,
Answer: (A) Amount of currency held by public and by the banks as reserves.
Explanation
Given the income multiplier formula 𝑚 = lower the marginal propensity to save. 1−𝑀𝑃𝐶
Answer: (A) Higher will be the multiplier effect
Explanation
In the national income identity Y = C +1 + G. investment (I) is a function of.
Answer: (C) Real Interest Rate
Explanation
Which one of the following is not correct about LM schedule?
Answer: (D) The LM schedule is the schedule giving the combinations of values of investment and interest rate that produce equilibrium in the money market.
Explanation
The merchant's file of 20 accounts contains 6 delinquent and 14 non-delinquent accounts. An auditor randomly selects 5 of these accounts for examination. What is the probability that the auditor finds exactly 2 delinquent cases?
Answer: (C) 0.3087
Explanation
A company has 140 employees, of which 30 are supervisors. 80 of the employees are married, and 20% of the married employee are supervisors. If a company employee is randomly selected, what is the probability that the employee is married and is a supervisor?
Answer: (D) 0.1143
Explanation
The Hausman's specification error test is used to test whether
Answer: (B) An endogenous variable is correlated with the error term.
Explanation
In random walk without drift.
Answer: (A) The effect of shock persists throughout the time period.
Explanation
Given below are the alternative formulae for F-test statistics. We are interested in testing the statistical significance of the incremental contribution of W3 at 5% level of significance to 𝑌 = 𝛽0 + 𝛽1𝑋1 + 𝛽2𝑋2 + 𝑈.Which of these is not appropriate? Where RSS is residual sum of square and ESS is explained sum of square.
Answer: (C) 𝐹 = 𝐸𝑆𝑆𝑛𝑒𝑤−𝐸𝑆𝑆𝑜𝑙𝑑⁄𝑑.𝑓 𝐸𝑆𝑆𝑛𝑒𝑤⁄𝑑.𝑓 𝑅2⁄𝑑.𝑓
Explanation
Integrate: 𝑑𝑥 𝑥 > 0
Answer: (B) 𝐶
Explanation
Find the extremum of 𝑢 = 𝑥2 + 𝑦2 + 𝑧2 subject to x + y + z = 1
Answer: (D) (𝑥̅, 𝑦̅, 𝑧̅) = (,, )
Explanation
The utility function of a consumer is given by 𝑈 = 𝑓(𝑞1, 𝑞2) = 𝑞1 × 𝑞2 suppose the price of 𝑞1 𝑖𝑠 𝑃𝑞1 = 1 and price 𝑞2 𝑖𝑠 𝑃𝑞2 = 2. The consumer wants to spend amount of k units only what will be his demand for 𝑞1 and 𝑞2?
Answer: (C) (𝑞1, 𝑞2) = (𝑘2, 𝑘4)
Explanation
A tariff ridden offer curve will bend towards.
Answer: (A) Import good axis
Explanation
Factor price equalization theorem is given by.
Answer: (C) Paul Samuelson
Explanation
In which of the following year IMF has set up the Extended Fluid Facility (EFF) to support member's structural reforms to address balance of payment difficulties of a long term character.
Answer: (A) 1974
Explanation
The book entitled "Why Nations Fail: The Origin of Power, Prosperity and Poverty" has been written by.
Answer: (B) Daron Acemoglu and James A. Robinson
Explanation
A foreign exchange swap is
Answer: (B) A spot sale of a currency combined with a forward repurchase of that currency.
Explanation
Which of following is a correct measure of gross fiscal deficit of the state government.
Answer: (C) Revenue Deficit + Capital Outlays + Net Lending
Explanation
Which of the following is not true in case of incidence of tax:
Answer: (C) One would be in a better position to avoid the tax and leave the seller with a larger part if demand is inelastic while supply is elastic.
Explanation
When MPS is 0.25 and initial increase in autonomous spending is Rs. 100. then the expenditure multiplier and resultant increase in GDP respectively are:
Answer: (C) 4, Rs. 400
Explanation
In the extreme case of liquidity trap
Answer: (B) Most of the investors will show bearish behaviour
Explanation
Which of the following can be an equation representing the money market
Answer: (A) 300 = 2Y - 1.5i
Explanation
With the same monetary base, which of the following will lead to an increase in broad money?
Answer: (D) Increase in financial literacy and banking habit
Explanation
According to Robinson the term 'Golden Age' in the context of Harrod-Domar model is used to emphasize
Answer: (A) Its mythical nature
Explanation
Which is not a dimension of Human Development Index (HDI)?
Answer: (D) Ability to access clean environment
Explanation
The idea of creative destruction is associated with
Answer: (D) Schumpeter
Explanation
Normalized Poverty Gap (NPG) is measured as a ratio of
Answer: (A) Average Poverty Gap to poverty line
Explanation
Which of the following defines ambient standards in an environmental policy
Answer: (C) A standard that designates the quality level of some element of the environment to be achieved.
Explanation
Which of the following applies to the physical linkage approach for the valuation of environmental benefits
Answer: (D) Methods that estimate benefits based on a technical relationship between an environmental resource and the user of that resource.
Explanation
Why subsidies are not an effective policy instrument in the long-run for internalizing externalities under competitive output markets?
Answer: (D) All of the above
Explanation
According to Sample Registration System, which of the following Indian States has the highest level of life time risk during 2018-2020.
Answer: (C) Madhya Pradesh
Explanation
The Intensive Agriculture District Programme (IADP) was launched in the year
Answer: (A) 1960-61
Explanation
Allocation of budget for Ministry of Agriculture and Farmers' Welfare in the Union Budget 2023-24 is
Answer: (B) 1.25 lakh crores
Explanation
What is the motto of G-20 18th meeting?
Answer: (A) One Earth. One Family. One Future
Explanation
Prevention of Money Laundering Act was enacted in the year
Answer: (B) 2002
Explanation
Which of the following holds for Bertrand's Duopoly model.
a. The reaction curves are derived from iso-profit maps which are convex to the axes.
b. The point of intersection of the two reaction curves reflects a stable equilibrium.
c. The reaction curves are derived from iso-profit maps which are concave to the axes.
d. The point of intersection of the two reaction curves reflects an unstable equilibrium.
e. Finn's behavioral pattern is such that they leam from past experience.
Choose the correct answer from the option given below:
Answer: (A) a and b only
Explanation
Which of the following is true for the Clark-Wicksteed-Walras product exhaustion theorem
a. The assumption of a homogeneous production function is necessary.
b. It is an identity that holds for all values of the variables.
c. The assumption of a homogeneous production function is not necessary.
d. It is not an identity since it holds only for the values of the variables in the long-run equilibrium.
e. It holds for all types of production functions.
Choose the correct answer from the option given below:
Answer: (D) c, d and e only
Explanation
Properties of expenditure function are (in the context of utility theory).
a. Homogeneous of degree one in price, P
b. Strictly increasing in utility, u and non-decreasing in price. P for any good 1.
c. Concave in P
d. Continuous in P and u
e. Strictly convex in P
Choose the correct answer from the option given below:
Answer: (C) a, b, c, d only
Explanation
The concept of "excess sensitivity" and "excess smoothness" are explained by following statement(s).
a. 'Excess sensitivity' refers to a situation where consumption over responds to temporary income shocks.
b. 'Excess smoothness' refers to a situation where consumption under responds to temporary income changes.
c. With excess sensitivity, anticipated rise in income is associated with relatively small change in consumption.
d. With excess smoothness, changes in aggregate income are associated with relatively large changes in aggregate consumption.
e. 'Excess sensitivity' and 'Excess smoothness' are related to the empirical evidences of permanent income hypothesis.
Choose the correct answer from the option given below:
Answer: (D) a, b, e only
Explanation
According to Tobin's Q theory of investment, when should a firm invest?
a. There is increase in the price of output
b. There is an increase in marginal product of capital
c. There is an increase in rate of interest
d. There is a decrease in rate of depreciation
e. Marginal benefit of investment exceeds marginal cost
Choose the correct answer from the option given below:
Answer: (C) a, b, d, e only
Explanation
Which of the following is are true about paradox of thrift?
a. Paradox of thrift was popularized by J. M. Keynes.
b. It states that personal savings can be detrimental to overall economic growth.
c. It shows the relationship between output growth and rate of unemployment.
d. It show's the relationship between inflation and rate of interest.
e. It states that individuals saving during an economic recession leads to fall in aggregate demand.
Choose the correct answer from the option given below:
Answer: (D) a, b, e only
Explanation
The BOP crisis of early 1990s made India borrow from the IMF which came on following conditions
a. Devaluation of rupee by 22%
b. Drastic custom cut to a peak duty of 30% from the erstwhile level of 130% for all goods
c. Consolidation of all indirect taxes into one tax
d. Excise duty to be increased by 20% to neutralize the loss of revenue due to custom cut
e. Government expenditure to be cut by 10% per annum.
Choose the correct answer form the option given below:
Answer: (D) a, b, d, e only
Explanation
The Uruguay Round of trade negotiations called for
a. The reduction of average tariffs on industrial goods
b. Quotas to be replaced by tariffs
c. The reduction in agriculture export subsidies
d. The reduction in industrial subsidies
e. Antidumping and safeguards to be relaxed
Choose the correct answer from the option given below:
Answer: (A) a, b, c, d only
Explanation
Pillar 1 of Basel III nouns focus on
a. Quality and level of capital
b. Risk Coverage
c. Containing leverage
d. Risk management and supervision
e. Market discipline
Choose the correct answer from the option given below
Answer: (A) a and b only
Explanation
Which of the following statements are correct about trilemma in monetary policy
a. It is related to closed economy model.
b. It involves exchange rate, capital mobility and monetary policy.
c. It arises because perfect capital mobility aligns the domestic interest rate to the world interest rate.
d. Flexible exchange rate is not compatible with independent monetary policy.
e. It is related to capital immobility and flexible exchange rate.
Choose the correct answer from the option given below:
Answer: (A) b and c only
Explanation
Based on the NITI Aayog estimate of poverty for the year 2011-12. the states with above 30 percent rural poverty are
a. Manipur
b. Bihar
c. Sikkim
d. Uttar Pradesh
e. Nagaland
Choose the correct answer from the option given below:
Answer: (D) a, b and d only
Explanation
Adam Smith contributions are
a. Division of labour
b. Notion of increasing returns
c. Notion of diminishing returns
d. Dialectical Materialism
e. Socially necessary abstract labour time
Choose the correct answer from the option given below:
Answer: (A) a and b only
Explanation
The components of services sector in Gross Value Added (GVA) are
a. Construction
b. Trade. Hotels. Transport and Communication related to Broadcasting
c. Electricity. Gas. Water supply and other utility services
d. Public Administration, Defense and other services
e. Financial, Real Estate and Professional services
Choose the correct answer from the option given below:
Answer: (C) a, b, d and e only
Explanation
Gunnar Myrdal is author of
a. Asian Drama
b. An American Dilemma
c. Theory of Economic Development
d. Principles of Political Economy
e. Economic Theory and underdeveloped regions
Choose the correct answer from the option given below:
Answer: (D) a, b and e only
Explanation
Which of the following are correct in case of theory of sets?
| Statement | Expression |
|---|---|
| A | (A B') (A' C) (B C') = (A B C) (A B C) |
| B | (A B') (A' C) (B C') = (A B C) (A B C)' |
| C | A (B C) = (A B) (A C) |
| D | A (B C) = (A B) (A C) |
| E | (A B') (A' C) (B C') = (A B C) (A' B' C') |
Set theory statements
Answer: (C) b, c, e only
Explanation
If S is a sample space and E is an event then the probability axioms can be written as
a. 𝑃(𝐴) ≥ 0
b. 𝑃(𝑆) = 1
c. 𝑃
d. 𝑃(𝐴) ≤ 0
e. 𝑃
Choose the correct answer from the option given below:
Answer: (D) a, b and c only
Explanation
Properties of sufficient estimators are
a. It may not be unbiased
b. It may be unbiased
c. It is always consistent
d. It is not always consistent
e. Minimum variance unbiased estimator
Choose the correct answer from the option given below:
Answer: (D) a, b, c and e only
Explanation
Which of the following are true in case of social goods:
a. Public goods are non-rivalry in nature.
b. Efficient provision of social goods needs a political process of budget determination.
c. Efficient provision of social goods involve horizontal rather than vertical addition of individual pseudo-demand-lines.
d. Among purely private and purely social goods, there are mixed cases which generate benefit or cost externalities
e. Individual consumers will not bid for social good, but will act as free-riders.
Choose the correct answer from the option given below:
Answer: (D) a, b, d and e only
Explanation
Which of the following are true in case of Ramsey Rule for efficient taxation -
a. Tax rate should be higher on the good that has lower price elasticity of demand.
b. If the demand elasticity in a market is zero, taxes should be imposed only in that markets.
c. Ramsey rule applies to taxation of goods, but not to taxation of income.
d. Ramsey rule minimises the excess burden of taxation across markets.
e. Ramsey rule does not necessarily result in social justice. Choose the most appropriate answer from the option given below:
Answer: (B) a, b, d and e only
Explanation
Which of the following are not symptoms of multicollinearity in a regression model.
a. High R2 with few significant t ratio for coefficients.
b. High pan-wise correlations among regressors.
c. The closer the Tolerance (TOLj) is to zero.
d. Variance Inflation Factor (VTF) of a variable is below 10.
e. The closer the Tolerance (TOLj) is to 1.
Choose the correct answer from the option given below:
Answer: (B) d and e only
Explanation
Which of the following are recommendations of the Narasimham Committee. 1991.
a. Deregulation of the interest rate structure.
b. Need for greater use of information technology.
c. Permitting only private sector banks to access the capital market.
d. Freedom to appoint chief executive and officers of the banks.
e. Capital adequacy nouns were implemented in stages.
Choose the correct answer from the option given below:
Answer: (C) a, d and e only
Explanation
Defensive expenditure method is based on the understanding that
a. The consumer spends money to ameliorate the damaging effects of the bad.
b. The defensive expenditure undertaken reflects the consumer's willingness to pay to reduce the level of the bad.
c. The observed defensive expenditure is an upper bound on the willingness to pay to avoid the bad.
d. The defensive expenditure provide no additional services other than provisioning the desired environmental quality.
e. The observed defensive expenditure is a lower bound on the willingness to pay to avoid the bad.
Choose the correct answer from the option given below:
Answer: (D) a, b, d and e only
Explanation
Which of the following constitutes India's strategy to combat climate change in the backdrop of its stand at the 26th session of the conference of the Parties (COP 26) to the UNFCCC held in Glasgow. U.K.
a. Phasing out of coal-based thermal power generation by 2030.
b. Reduction of the carbon intensity of Indian economy by 45 percent by 2030. Over 2005 levels.
c. Capping Indian economy total final energy consumption in absolute levels.
d. Achieving the target of net zero emissions for India by 2070.
e. Promoting lifestyle for environment to combat climate change.
Choose the correct answer from the option given below:
Answer: (C) b, d, e only
Explanation
Here is given international organisations and their headquarters. Which of the following are correct combinations of the institutions and then headquarters.
a. GATT: Geneva
b. IMF: Washington DC
c. World Bank: Washington DC
d. International Development Association (IDA): New York
e. Asian Development Bank: Mandaluyong
Choose the correct answer from the option given below:
Answer: (D) a, b, c and e only
Explanation
Which of the following is are correct about Walrasian demand function?
a. The Walrasian demand function X (P, W) is homogenous of degree zero if X ( P, W) = X (P, W) for any P, W and > 0.
b. The Walrasian demand function X (P, W) is homogenous of degree one if X ( P, W) = X (P, W) for any P, W and > 0.
c. The Walrasian demand function X (P, W) satisfies Walras' law if for every P >> 0 and W > 0, we have P X = W, for all A X (P, W).
d. Walras' law says consumer fully expends his wealth.
e. If price and wealth both change in same proportion, then individual consumption choice does not change.
Choose the correct answer from the option given below:
Answer: (D) a, c, d, e only
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. Cost-effectiveness | i. A policy that directly regulates polluters through the use of standards. |
| b. Pollution permit trading system | ii. An incentive-based policy that encourages conservation practices or pollution reduction technologies. |
| c. Market approach | iii. Requires that the least amount of resources be used to achieve an objective. |
| d. Command-and-control approach | iv. A market instrument that establishes a market for rights to pollute. |
List-I and List-II
Answer: (D) a-iii, b-iv, c-ii, d-i
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. Klein's rule of thumb | i. Structural break |
| b. Ljung-Box (LB) statistic | ii. Unit root |
| c. KPSS | iii. Significance of autocorrelation coefficients |
| d. Bai-Perron | iv. Multicollinearity |
List-I and List-II
Answer: (A) a-iv, b-iii, c-ii, d-i
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. J. M. Keynes | i. Inventory-theoretic approach to transaction demand for money |
| b. Kydland-Prescott | ii. Liquidity preference |
| c. Baumol-Tobin | iii. Time inconsistency problem |
| d. Friedman-Schwartz | iv. Monetary History of the United States |
List-I and List-II
Answer: (D) a-ii, b-iii, c-i, d-iv
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. Kuznets | i. Innovation and entrepreneurship |
| b. Nurkse | ii. Balanced growth theory |
| c. Leibenstein | iii. Inverted U-curve hypothesis |
| d. Schumpeter | iv. Critical minimum effort thesis |
List-I and List-II
Answer: (B) a- iii, b-ii, c-iv, d-i
Explanation
Match List-I with List-II.
| List-I (States) | List-II (Food grain production, 2021-22, thousand tonnes) |
|---|---|
| a. Telangana | i. 11266.0 |
| b. Jharkhand | ii. 4984.2 |
| c. Chhattisgarh | iii. 8897.0 |
| d. Andhra Pradesh | iv. 15095.4 |
List-I (States) and List-II (Food grain production, 2021-22, thousand tonnes)
Answer: (D) a-iv, b-ii, c-iii, d-i
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. Tax evasion | i. Bond financing |
| b. Effective incidence of tax | ii. Illegal free riding |
| c. Legal incidence of tax | iii. Obliged to deliver tax revenue to government |
| d. Fiscal illusion | iv. Does not necessarily correspond to the person on whom tax is imposed |
List-I and List-II
Answer: (C) a-ii, b- iv, c-iii, d-i
Explanation
Match List-I with List-II.
| List-I (Type of India's population growth rate) | List-II (Period) |
|---|---|
| a. Rapid high growth | i. 1981-2011 |
| b. Stagnant population | ii. 1921-1951 |
| c. High growth with definite signs of slowing down | iii. 1951-1981 |
| d. Steady growth | iv. 1891-1921 |
List-I (Type of India's population growth rate) and List-II (Period)
Answer: (B) a-iii, b-iv, c-I, d-ii
Explanation
Match List-I with List-II.
| List-I (Policy) | List-II (Year) |
|---|---|
| a. National Forest Policy | i. 2000 |
| b. Marine Fishing Policy | ii. 1994 |
| c. New Mineral Policy | iii. 2004 |
| d. National Population Policy | iv. 1988 |
List-I (Policy) and List-II (Year)
Answer: (A) a-iv, b-iii, c-ii, d-i
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. f'(x) > 0 and f''(x) > 0 | i |
| b. f'(x) > 0 and f''(x) < 0 | ii |
| c. f'(x) < 0 and f''(x) < 0 | iii |
| d. f'(x) < 0 and f''(x) > 0 | iv |
List-I and List-II
Answer: (C) a-iv, b-i, c-ii, d-iii
Explanation
Match List-I with List-II.
| List-I | List-II |
|---|---|
| a. Central Bank Loss Function | i. yt = A - art-1 |
| b. Monetary Rule (MR) | ii. pt = pt-1 + alpha(yt - ye) |
| c. Phillips Curve (PC) | iii. (yt - ye) = -alpha beta(pt - pT) |
| d. Dynamic IS Curve | iv. L = (yt - ye)^2 + beta(pt - pT)^2 |
List-I and List-II
Answer: (C) a-iv, b- iii, c-ii, d-i
Explanation
Arrange the relative weights in percentage assigned to following criteria by the XIV finance commission in ascending order.
a. Income distance
b. Area
c. Population (1971)
d. Demographic Change (2011 population)
e. Forest Cover
Choose the correct answer from the option given below:
Answer: (B) e, d, b, c, a
Explanation
Arrange the following in ascending order on the basis of degree of economic integration.
a. Custom Union
b. Free Trade Area
c. Economic Union
d. Common Market
e. Preferential Trade Arrangements
Choose the correct answer from the option given below:
Answer: (D) e, b, a, d, c
Explanation
Arrange states in ascending order based on loans from the central government for the year 2020- 21
a. Karnataka
b. Madhya Pradesh
c. Tamil Nadu
d. Gujarat
e. Maharashtra
Choose the correct answer from the option given below:
Answer: (A) c, b, d, a, e
Explanation
Arrange the following Acts in chronological order of their year of enactment starting from the oldest:
a. Foreign Exchange Regulation Act
b. Competition Act
c. MRTP Act
d. Foreign Regulation Act
e. Foreign Exchange Management Act
Choose the correct answer from the option given below:
Answer: (A) c, b, a, d, e
Explanation
Arrange the following in order to their year of establishment starting from oldest
a. The Industrial Credit and Investment Corporation of India (ICICI)
b. National Bank for Agricultural and Rural Development (NABARD)
c. The Industrial Finance Corporation of India (IFCI)
d. The Industrial Reconstruction Bank of India (IRBI)
e. Export-Import Bank of India
Choose the correct answer from the option given below:
Answer: (B) c, a, d, e, b
Explanation
Arrange the following chronologically in order of their publication starting from the oldest:
a. General Theory of Employment. Interest and Money
b. A Treatise on probability
c. Essays in Persuasion
d. The End of Laissez Faire
e. A Tract on Monetary Reform
Choose the correct answer from the option given below:
Answer: (B) b, e, d, c, a
Explanation
Arrange the following events of equity trading in India starting from the oldest:
a. The BSE introduced screen-based trading.
b. Foreign Institutional Investors (FIIs) are permitted to invest in the Indian Securities Market.
c. NSE commenced operations in wholesale debt market segment.
d. The SEBI banned badla trading on the BSE.
e. The NSE overtook the BSE as the largest stock exchange in terms of volume trading.
Choose the correct answer from the option given below:
Answer: (B) b, d, c, e, a
Explanation
Sequence of steps followed in the estimation of Indirect Least Square (ILS) starting from the beginning:
a. Identification of the structural equations
b. Application of OLS
c. Obtaining structural coefficients
d. Obtaining reduced form equation
e. Use the model for policy
Choose the correct answer from the option given below:
Answer: (A) a, d, b, c and e
Explanation
As per the total revenue received by the government under the head of GST on the domestic supply of goods and services for 2021-22 arrange the following states in ascending order:
a. Odisha
b. Rajasthan
c. Delhi
d. West Bengal
e. Madhya Pradesh
Choose the correct answer from the option given below:
Answer: (B) e, b, a, c, d
Explanation
According to the Census, 2011 arrange the states in the descending order based on the literacy rate (aged group 7 year and above):
a. Nagaland
b. Tripura
c. Sikkim
d. Manipur
e. Meghalaya
Choose the correct answer from the option given below:
Answer: (C) b, c, a, d, e
Explanation
Given below are two statements: Assertion (A): If governments do not care about protectionists' rents, they would replace all import duties with sales taxes. Reason (R): Sales tax is more efficient means of raising revenue than import tariff. In light of the above statements, choose the correct answer.
Answer: (A) Both A and R are true and R is the correct explanation of A.
Explanation
Given below are two statements: Statement I: Friedman's theory of the demand for money is partly Keynesian and partly nonKeynesian. Statement II: It is non-Keynesian in that Friedman neglects completely Keynes' clarification of the motives for holding money and the corresponding components of demand for money. In light of the above statements, choose the correct answer.
Answer: (A) Both Statement I and Statement II are true.
Explanation
Given below are two statements: Statement I: Under first degree price discrimination, monopolist sells different units of output for different prices and these prices may differ from person to person. Statement II: Under third degree price discrimination, monopolist sells different units of output for different prices, but every individual who buys the same amount of the good pays the same price. In light of the above statements, choose the correct answer.
Answer: (C) Statement I is true but Statement II is false.
Explanation
Given below are two statements: Statement I: The tarns of trade of a nation are defined as the ratio of the cost of its export commodity to the price of its import commodity. Statement II: The trams of trade of the trade partner are equal to the inverse of the terms of trade of the other nation. In light of the above statements, choose the correct answer.
Answer: (D) Statement I is false but Statement II is true.
Explanation
Given below are two statements: Statement I: Division of labour is the starting point of Smith's theory of economic growth. Statement II: It is division of labour that results in the greatest improvement in the productive power of labour. In light of the above statements, choose the correct answer.
Answer: (A) Both Statement I and Statement II are true.
Explanation
The Capex of the union government for the period FY 09 to FY 20 on an average was ___.
The government of India's fiscal policy response to the covid crises comprised of a judicious mix of increasing food and fertilizer subsidies on the one hand and a reduction in taxes on fuel and certain imported products on the other. Despite these additional fiscal pressures the union govt, is back on track. The resilience in the fiscal performance of the union government has been facilitated by the recovery in economic activity buoyancy in revenues from direct taxes and goods and services tax (GST) and realistic assumptions in the budget. The gross tax revenue registered a YoY growth of 15.5% from April to November 2022. driven by robust growth in the direct taxes and GST. The gross GST-correction has increased at 24.8% on YoY during the same period. The Union Government's emphasis on capital expenditure (capex) has continued despite higher revenue expenditure requirements during the year. The center's capex has steadily increased from a long term average of 1.7 percent of GDP (FY09 to FY20) to 2.5% of GDP in FY22 PA. The center has also incentivized the state governments through interest free loans and enhanced borrowing ceilings to prioritize their spending on capex. Government has boosted allocations on infrastructure intensive sectors such as roads and highways, railways and housing and urban affairs, which has bearing on capex. This increase in capex will have implication for medium term growth and sustainable government debt to GDP ratio.
Answer: (D) 1.7 percent of GDP
Explanation
Which of the following is not correct with respect to facilitation of resilience in fiscal performance of the union government:
The government of India's fiscal policy response to the covid crises comprised of a judicious mix of increasing food and fertilizer subsidies on the one hand and a reduction in taxes on fuel and certain imported products on the other. Despite these additional fiscal pressures the union govt, is back on track. The resilience in the fiscal performance of the union government has been facilitated by the recovery in economic activity buoyancy in revenues from direct taxes and goods and services tax (GST) and realistic assumptions in the budget. The gross tax revenue registered a YoY growth of 15.5% from April to November 2022. driven by robust growth in the direct taxes and GST. The gross GST-correction has increased at 24.8% on YoY during the same period. The Union Government's emphasis on capital expenditure (capex) has continued despite higher revenue expenditure requirements during the year. The center's capex has steadily increased from a long term average of 1.7 percent of GDP (FY09 to FY20) to 2.5% of GDP in FY22 PA. The center has also incentivized the state governments through interest free loans and enhanced borrowing ceilings to prioritize their spending on capex. Government has boosted allocations on infrastructure intensive sectors such as roads and highways, railways and housing and urban affairs, which has bearing on capex. This increase in capex will have implication for medium term growth and sustainable government debt to GDP ratio.
Answer: (C) Expenditure austerity measures pertaining to food and fertilizer subsidy
Explanation
Which of the following strategy is adopted by Union Government to prioritise States' spending on capex.
The government of India's fiscal policy response to the covid crises comprised of a judicious mix of increasing food and fertilizer subsidies on the one hand and a reduction in taxes on fuel and certain imported products on the other. Despite these additional fiscal pressures the union govt, is back on track. The resilience in the fiscal performance of the union government has been facilitated by the recovery in economic activity buoyancy in revenues from direct taxes and goods and services tax (GST) and realistic assumptions in the budget. The gross tax revenue registered a YoY growth of 15.5% from April to November 2022. driven by robust growth in the direct taxes and GST. The gross GST-correction has increased at 24.8% on YoY during the same period. The Union Government's emphasis on capital expenditure (capex) has continued despite higher revenue expenditure requirements during the year. The center's capex has steadily increased from a long term average of 1.7 percent of GDP (FY09 to FY20) to 2.5% of GDP in FY22 PA. The center has also incentivized the state governments through interest free loans and enhanced borrowing ceilings to prioritize their spending on capex. Government has boosted allocations on infrastructure intensive sectors such as roads and highways, railways and housing and urban affairs, which has bearing on capex. This increase in capex will have implication for medium term growth and sustainable government debt to GDP ratio.
Answer: (B) Incentivizing for interest free loans and enhance borrowing ceilings
Explanation
Which of the following strategies was not comprised India's Fiscal Policy response to Covid crises
The government of India's fiscal policy response to the covid crises comprised of a judicious mix of increasing food and fertilizer subsidies on the one hand and a reduction in taxes on fuel and certain imported products on the other. Despite these additional fiscal pressures the union govt, is back on track. The resilience in the fiscal performance of the union government has been facilitated by the recovery in economic activity buoyancy in revenues from direct taxes and goods and services tax (GST) and realistic assumptions in the budget. The gross tax revenue registered a YoY growth of 15.5% from April to November 2022. driven by robust growth in the direct taxes and GST. The gross GST-correction has increased at 24.8% on YoY during the same period. The Union Government's emphasis on capital expenditure (capex) has continued despite higher revenue expenditure requirements during the year. The center's capex has steadily increased from a long term average of 1.7 percent of GDP (FY09 to FY20) to 2.5% of GDP in FY22 PA. The center has also incentivized the state governments through interest free loans and enhanced borrowing ceilings to prioritize their spending on capex. Government has boosted allocations on infrastructure intensive sectors such as roads and highways, railways and housing and urban affairs, which has bearing on capex. This increase in capex will have implication for medium term growth and sustainable government debt to GDP ratio.
Answer: (D) Increase in taxes on fuel.
Explanation
In order to further enhance capex, allocation for which of the following infrastructure sector is not increased:
The government of India's fiscal policy response to the covid crises comprised of a judicious mix of increasing food and fertilizer subsidies on the one hand and a reduction in taxes on fuel and certain imported products on the other. Despite these additional fiscal pressures the union govt, is back on track. The resilience in the fiscal performance of the union government has been facilitated by the recovery in economic activity buoyancy in revenues from direct taxes and goods and services tax (GST) and realistic assumptions in the budget. The gross tax revenue registered a YoY growth of 15.5% from April to November 2022. driven by robust growth in the direct taxes and GST. The gross GST-correction has increased at 24.8% on YoY during the same period. The Union Government's emphasis on capital expenditure (capex) has continued despite higher revenue expenditure requirements during the year. The center's capex has steadily increased from a long term average of 1.7 percent of GDP (FY09 to FY20) to 2.5% of GDP in FY22 PA. The center has also incentivized the state governments through interest free loans and enhanced borrowing ceilings to prioritize their spending on capex. Government has boosted allocations on infrastructure intensive sectors such as roads and highways, railways and housing and urban affairs, which has bearing on capex. This increase in capex will have implication for medium term growth and sustainable government debt to GDP ratio.
Answer: (A) Ports and Waterways
Explanation
Adjusted Net Saving (ANS) is
GDP growth is the most widely used macroeconomic indicator for adjudicating broad economic progress. The outcomes from decisions made on the basis of such an indicator have been repeatedly disappointing because of failures to detect resource uses that turn out to be unsustainable. Adjusted Net Savings (ANS) provides a complementary indicator to help in understanding the changes in wealth and not per capita wealth, by capturing some of the important policy-induced dynamics. Based on the conventions of the System of National Accounts (SNA). ANS is measured as Gross National Saving minus depreciation of produced capital, depletion of subsoil assets and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. If ANS is negative, the county is running down its capital stocks and possibly reducing future material well-being. If ANS is positive the country is adding to wealth and future material well-being. When natural resource depletion is not used to invest in other assets in the wealth portfolio, countries gross saving might not be enough to compensate this depletion resulting in negative net savings. However, nations with higher GDP are far less likely to obtain negative ANS. It is argued that, if not a superior indicator of sustainability. ANS is useful to the extent that it can serve as an indicator of unsustainability. Hence, the estimates and conceptualization of ANS are not free from limitations.
Answer: (C) A flow variable
Explanation
Which of the following is not the constituent of ANS?
GDP growth is the most widely used macroeconomic indicator for adjudicating broad economic progress. The outcomes from decisions made on the basis of such an indicator have been repeatedly disappointing because of failures to detect resource uses that turn out to be unsustainable. Adjusted Net Savings (ANS) provides a complementary indicator to help in understanding the changes in wealth and not per capita wealth, by capturing some of the important policy-induced dynamics. Based on the conventions of the System of National Accounts (SNA). ANS is measured as Gross National Saving minus depreciation of produced capital, depletion of subsoil assets and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. If ANS is negative, the county is running down its capital stocks and possibly reducing future material well-being. If ANS is positive the country is adding to wealth and future material well-being. When natural resource depletion is not used to invest in other assets in the wealth portfolio, countries gross saving might not be enough to compensate this depletion resulting in negative net savings. However, nations with higher GDP are far less likely to obtain negative ANS. It is argued that, if not a superior indicator of sustainability. ANS is useful to the extent that it can serve as an indicator of unsustainability. Hence, the estimates and conceptualization of ANS are not free from limitations.
Answer: (D) Loss of biodiversity
Explanation
Which of the following explains the decline in ANS in countries with increasing GDP per capita?
GDP growth is the most widely used macroeconomic indicator for adjudicating broad economic progress. The outcomes from decisions made on the basis of such an indicator have been repeatedly disappointing because of failures to detect resource uses that turn out to be unsustainable. Adjusted Net Savings (ANS) provides a complementary indicator to help in understanding the changes in wealth and not per capita wealth, by capturing some of the important policy-induced dynamics. Based on the conventions of the System of National Accounts (SNA). ANS is measured as Gross National Saving minus depreciation of produced capital, depletion of subsoil assets and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. If ANS is negative, the county is running down its capital stocks and possibly reducing future material well-being. If ANS is positive the country is adding to wealth and future material well-being. When natural resource depletion is not used to invest in other assets in the wealth portfolio, countries gross saving might not be enough to compensate this depletion resulting in negative net savings. However, nations with higher GDP are far less likely to obtain negative ANS. It is argued that, if not a superior indicator of sustainability. ANS is useful to the extent that it can serve as an indicator of unsustainability. Hence, the estimates and conceptualization of ANS are not free from limitations.
Answer: (B) Depleted assets not offset by sufficient investment in human and physical capital
Explanation
Which of the following reflects the shortcomings of ANS?
GDP growth is the most widely used macroeconomic indicator for adjudicating broad economic progress. The outcomes from decisions made on the basis of such an indicator have been repeatedly disappointing because of failures to detect resource uses that turn out to be unsustainable. Adjusted Net Savings (ANS) provides a complementary indicator to help in understanding the changes in wealth and not per capita wealth, by capturing some of the important policy-induced dynamics. Based on the conventions of the System of National Accounts (SNA). ANS is measured as Gross National Saving minus depreciation of produced capital, depletion of subsoil assets and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. If ANS is negative, the county is running down its capital stocks and possibly reducing future material well-being. If ANS is positive the country is adding to wealth and future material well-being. When natural resource depletion is not used to invest in other assets in the wealth portfolio, countries gross saving might not be enough to compensate this depletion resulting in negative net savings. However, nations with higher GDP are far less likely to obtain negative ANS. It is argued that, if not a superior indicator of sustainability. ANS is useful to the extent that it can serve as an indicator of unsustainability. Hence, the estimates and conceptualization of ANS are not free from limitations.
Answer: (D) All of the above
Explanation
The concept of ANS should at best be used to
GDP growth is the most widely used macroeconomic indicator for adjudicating broad economic progress. The outcomes from decisions made on the basis of such an indicator have been repeatedly disappointing because of failures to detect resource uses that turn out to be unsustainable. Adjusted Net Savings (ANS) provides a complementary indicator to help in understanding the changes in wealth and not per capita wealth, by capturing some of the important policy-induced dynamics. Based on the conventions of the System of National Accounts (SNA). ANS is measured as Gross National Saving minus depreciation of produced capital, depletion of subsoil assets and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. If ANS is negative, the county is running down its capital stocks and possibly reducing future material well-being. If ANS is positive the country is adding to wealth and future material well-being. When natural resource depletion is not used to invest in other assets in the wealth portfolio, countries gross saving might not be enough to compensate this depletion resulting in negative net savings. However, nations with higher GDP are far less likely to obtain negative ANS. It is argued that, if not a superior indicator of sustainability. ANS is useful to the extent that it can serve as an indicator of unsustainability. Hence, the estimates and conceptualization of ANS are not free from limitations.
Answer: (B) Serve as an indicator of unsustainability
Explanation
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