MCQs on Economics -6

1.The correlation coefficient is independent of?
(A) Change of scale only
(B) Change of origin only
(C) Both the changes of scale and origin
(D) Neither the change of origin nor the change of scale

2.The data represented through arithmetic line graph help in understanding?
(B) Randomness
(C) Cyclicity
(D) Seasonality

3. Select the correct statements regarding the Balanced Growth theory Statements:
1 It is a static concept
2. It is a dynamic concept
3. It recognises the significance of economic independence
4. It recognises the significance of economic interdependence.

(A) 1 and 4
(B) 2and 3
(C)1 and 3
(D) 2 and 4

4. For setting up new industrial parks and in established industrial parks, the Foreign Direct Investment under automatic route has been allowed?
(A) Upto 26percent
(B) Upto 49 per cent
(C) Upto 74 per cent
(D) Upto 100 per cent

5.The Euler‟s theorem is satisfied only with?
(A) Homogeneous function
(B) Heterogeneous function
(C) Endogeneous function
(D) Exogeneous function

6. Given that C.E.S. production function is
P = γ [δL–ρ + (1 – δ)K–ρ–μ/ρ
List – I            List – II
a. γ                   i. Distribution parameter
b. δ                  ii. Substitution parameter
c. ρ                  iii. Returns to scale parameter
d. μ                  iv. Efficiency parameter

a          b          c          d
(A)       ii          iii         i           iv
(B)       iii         iv         ii          i
(C)       iv         i           ii          iii
(D)       i           ii          iii         iv

7. Linear Programming Technique was developed for the first time by
(A) Koopmans
(B) Dantzig
(C) Leontief
(D) Mahalanobis

8. Given Harrod’s Growth Model as under:
S(t) = αY(t)
I(t) = β[Y(t) – Y(t – 1)]
S(t) = I(t)
α, β > 0.
In this model sustained growth is indicated by satisfying the condition
(A) β/(β – α) > 0
(B)  β/(β – α) < 0
(C)  β/(β – α) > 1
(D) β/(β – α) < 1

9. Cobb-Douglas production function Q = ALα K1–α does not possess the characteristics of
(A) Constant Returns to Scale
(B) Unit Elasticity of Substitution
(C) Variable Elasticity of Substitution
(D) Linear homogeneity

10. Which of the following is not correct about a population pyramid?
(A) On the right side of the pyramid women’s age structure is shown.
(B) It shows age and sex distribution of a population.
(C) An expansive pyramid is narrow at the base but it expands as it moves up towards higher ages.
(D) Population pyramids can be used to find the economic dependents supported in a particular population.

11. The situation of people in villages and towns of strong emigration receiving high amount of remittances has been described as “private affluence and public squalor” by
(A) M. Todaro
(B) John K. Galbraith
(C) Arthur Lewis
(D) Gunar Myrdal

12. Which of the following models can be estimated using OLS following suitable transformation, if necessary? Here e denotes the exponential.
(i) yt = α + β × t + ut
(ii) yt = α + β ext + ut
(iii) yt = α + β x2t + ut
(iv) ln (yt) = α + β ln(xt) + ut

(A) (i) only
(B) (i) and (iii) only
(C) (i), (iii) and (iv) only
(D) (i), (ii), (iii) and (iv)

13. Suppose that observations are available on the monthly bond prices of 100 companies for five years. What type of data are these?
(A) Cross Sectional
(B) Time Series
(C) Panel
(D) Qualitative

14. What is the meaning of the term “heteroscedasticity”?
(A) The variance of errors is not constant.
(B) The variance of dependent variable is not constant.
(C) The errors are not linearly independent of one another.
(D) The errors have non-zero mean.

15. Which of the following estimation techniques are available for the estimation of over-identified systems of simultaneous equations?
(i) OLS
(ii) ILS
(iii) 2SLS
(iv) IV

(A) (iii) only
(B) (iii) and (iv) only
(C) (ii), (iii) and (iv) only
(D) (i), (ii), (iii) and (iv)



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