MCQs on Economics -4

1. A.W. Phillips’ wage-inflation unemployment trade off is based on
(A) Static expectations hypothesis
(B) Adaptive expectations hypothesis
(C) Extrapolative expectations hypothesis
(D) Rational expectations hypothesis


2. Suppose the money supply and the price level are constant, and the demand for money is a function of income and interest rate. When the income level increases, there is
(A) an increase in the quantity of money demanded and an increase in the rate of interest.
(B) an increase in the quantity of money demanded and a decrease in the rate of interest.
(C) a decrease in the quantity of money demanded and a decrease in the rate of interest.
(D) a decrease in the quantity of money demanded and an increase in the rate of interest.


3. Fiscal reform measures in India included
I. Increasing Tax-GDP ratio
II. Expenditure Management
III. Managing revenue deficit and fiscal deficit
IV. Increasing liquidity in the economy

Find the correct combination from the given codes:
(A) I, II and III are correct.
(B) I and IV are correct.
(C) II, III and IV are correct.
(D) III and IV are correct.


4. During the Tenth Five Year Plan, some of the following things were experienced:
I. Services sector witnessed the highest growth rate.
II. Agriculture experienced the lowest growth rate.
III. Rate of growth in the industrial sector was negative.

Which of the aforesaid statements are correct?
(A) I, II and III are correct.
(B) I and II are correct.
(C) I and III are correct.
(D) II and III are correct.


5. Assertion (A): Employment growth in the organized sector (both public and private combined) has increased during the period 1994-2008.
Reason (R): There has been relatively faster employment growth in the private sector.

Codes:
(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(B) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(C) (A) is correct but (R) is incorrect.
(D) (A) is incorrect but (R) is correct.


6. According to the provisional figures for 2011 census, which of the following States has the lowest child sex ratio both in rural and urban areas?
(A) Uttar Pradesh
(B) Kerala
(C) Jammu and Kashmir
(D) Haryana


7. Of the following, which sector experienced maximum growth rate at 2004-05 prices in India during 2009-10?
(A) Trade, hotels, transport and communication
(B) Manufacturing, construction, electricity, gas and water supply
(C) Financing, insurance, real estate and business services
(D) Agriculture, forestry, fishing, mining and quarrying


8. In which of the following years, gross domestic savings as a percentage of GDP was the highest?
(A) 2009 – 10
(B) 2008 – 09
(C) 2007 – 08
(D) 2006 – 07


9. Growth process resulting into broad based benefits and providing equality of opportunity to all is referred to as
(A) Faster growth
(B) Inclusive growth
(C) Exclusive growth
(D) Sustained growth


10. Which of the following plans witnessed the highest growth rate in India?
(A) Ninth Plan
(B) Eighth Plan
(C) Tenth Plan
(D) Seventh Plan


11. For any pair of variables X and Y, two regression equations-one regression of Y on X and other regression of X on Y exist because
I. Tangent of the angle made by two regression equations with each other determines the coefficient of correlation.
II. Regression model does not help in the identification of dependent and independent variables of the equation.
III. Regression and correlation coefficients represent the co-variation of the two variables.
IV. Regression equation represents jointly the value of X and Y.

Select the right code from the following as the answer to the question:
(A) I and II are correct.
(B) I and III are correct.
(C) I and IV are correct.
(D) III and IV are correct.


12. Which of the following are not associated with the Leontief’s Static Model?
I. Final demand is a stochastic vector.
II. Reciprocal of the Perron- Frobinius root is the maximum growth rate.
III. Input coefficients are the fixed technological parameters.
IV. (I – A – RB)–1 WL = P

Select the correct code from the following:
(A) I, II, III
(B) I, III, IV
(C) I, III www.netugc.com
(D) I, II, IV


13. In the context of simultaneous equations econometric models, consider the following statements:
I. Identification is a problem to be dealt with before estimation.
II. Order condition is necessary but not a sufficient condition of identification.
III. Two stage least squares method of estimation gives consistent estimators if the equation is under identified.
IV. Under indirect least squares method, least squares method is applied to the reduced form equations.

Use the following code to answer the question:
(A) I and II are correct but III and IV are incorrect.
(B) I, II, III and IV are correct.
(C) I, II and III are correct but IV is incorrect.
(D) I, II and IV are correct but III is incorrect.


14. If rxy = 0.3, match the items in list-I with the items in list-II:
List – I                                                                        List – II
i. –1 to +1                                                                    1. 0.3
ii. Correlation coefficient between –X and Y            2. Limits of correlation coefficient
iii. The Square of Correlation Coefficient                  3. – 0.3
iv. Coefficient of correlation between –X and –Y     4. Coefficient of Determination
Codes:
       i ii iii iv
(A) 1 2 3 4
(B) 2 3 4 1
(C) 3 1 2 4
(D) 4 1 2 3


15. Match the following from list – I and list – II:
List – I                                                List – II
i. Durbin- Watson ‘d’ Statistics          1. Stationarity
ii. R                                                   2. Qualitative Effects
iii. Dickey- Fuller test                         3. Serial Correlation
iv. Dummy Variable                           4. Goodness of fit of regression function
Codes :
       i ii iii iv
(A) 1 2 4 3
(B) 2 1 3 4
(C) 4 3 2 1
(D) 3 4 1 2

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