Signature and Name of Invigilator

OMR Sheet No. : ......................................................

(To be filled by the Candidate)

1. (Signature)

Roll No.

(Name)

(In figures as per admission card)

Roll No.

2. (Signature)

(In words)

(Name)

Test Booklet No.

D0 1 0 8

PAPERII

ECONOMICS

Time : 1 hours]

Number of Pages in this Booklet : 24

[Maximum Marks : 100

Number of Questions in this Booklet : 50

Instructions for the Candidates

1.
2.
3.

4.

1. U DU U S U UU U

Write your roll number in the space provided on the top of

this page.
This paper consists of fifty multiple-choice type of questions.
At the commencement of examination, the question booklet
will be given to you. In the first 5 minutes, you are
requested to open the booklet and compulsorily examine it
as below :
(i)
To have access to the Question Booklet, tear off the
paper seal on the edge of this cover page. Do not
accept a booklet without sticker-seal and do not accept
an open booklet.
(ii) Tally the number of pages and number of questions
in the booklet with the information printed on the
cover page. Faulty booklets due to pages/questions
missing or duplicate or not in serial order or any
other discrepancy should be got replaced immediately
by a correct booklet from the invigilator within the
period of 5 minutes. Afterwards, neither the question
booklet will be replaced nor any extra time will be
given.
(iii) After this verification is over, the Test Booklet Number
should be entered in the OMR Sheet and the
OMR Sheet Number should be entered on this Test
Booklet.
Each item has four alternative responses marked (A), (B),
(C) and (D). You have to darken the oval as indicated
below on the correct response against each item.
Example :

2. -
3. U U U, -S U U U

-S
U
-S U U
U U SUU-U S
SU U

(ii)

U DU U U U -S DU
U U U U U U S
DU / U UU
U U S SU U
UUU S U U -S
U U
-S U
UQ

(iii) -S R OMR U
U UU OMR R -S U

U
4. U U (A), (B), (C) (D)

U UU U

(C) U
5. U U I U U- U

where (C) is the correct response.

5. Your responses to the items are to be indicated in the Answer
Sheet given inside the Paper I booklet only. If you mark
at any place other than in the ovals in the Answer Sheet, it
will not be evaluated.
6. Read instructions given inside carefully.
7. Rough Work is to be done in the end of this booklet.
8. If you write your name or put any mark on any part of the
test booklet, except for the space allotted for the relevant
entries, which may disclose your identity, you will render
yourself liable to disqualification.
9. You have to return the test question booklet to the
invigilators at the end of the examination compulsorily
and must not carry it with you outside the Examination
Hall.
10. Use only Blue/Black Ball point pen.
11. Use of any calculator or log table etc., is prohibited.
12. There is NO negative marking.

D0108

(i)

U U U
S U U U , U

6. U U
7. (Rough Work) S DU U U
8. U-S U

, U U U
U
9. U # U U-S U UU

U U # U U
U

/ U ZU S U
11. U (UU) U U

12. U U
10.

P.T.O.

ECONOMICS
PAPERII
Note :

This paper contains fifty (50) multiple choice questions, each question carrying
two (2) marks. Attempt all of them.

1.

The Cobb-Douglas Production Function assumes that the elasticity of substitution is :

(A) One
(B) Two
(C) Three
(D) Four

2.

A consumer attains his/her equilibrium at the point where :

(A) Total Utility5Price
(B) Marginal Utility > Price
(C) Marginal Utility < Price
(D) Marginal Utility5Price

3.

Pareto Optimality can take place at any point on :

(A) Laffer Curve
(B) Engel Curve
(C) Contract Curve
(D) Lorenz Curve

4.

According to Says Law, unemployment can be removed by :

(A) Rise in wages
(B) Fall in wages
(C) Taxing wages
(D) Subsidising wages

5.

Which of the following is generally referred to as a broader measure of money supply ?

(B) M2
(C) M3
(D) M4
(A) M1

6.

In case of proportional relation between consumption and income :

(A) APC > MPC
(B) APC5MPC
(C) APC < MPC
(D) APC5MPS

7.

Indicative Planning is :
(A) Rigid
(C) Autocratic

8.

The
(A)
(B)
(C)
(D)

9.

In Nurksian formulation of the thesis of the vicious circle of poverty in the context of an
underdeveloped country, the inducement to invest is limited by :
(A) Lack of savings
(B) Lack of investment opportunities
(C) Size of the market
(D) The policy of the government

D0108

(B)
(D)

Comprehensive
Flexible

major difference between Harrod-Domar and Solow models of growth lies in :

Substitutability between labour and capital
Returns to Scale
Returns to variable factor
Growth of income

S
II
U

(50)

SD

(2)

1.

-U S

(A)
2.

3.

5.

(B)

>

(C)

<

(D)

9.

(D)

UU UU (cU) U S
U

(B)

(C)

UU

(D)

U, UU mU #

(A)

U U

(B)

U UU

(C)

U U U

(D)

M1

(B)

M2

(C)

M3

(D)

M4

(D)

U S

APC > MPC

APC < MPC

(B)
(D)

APC5MPC
APC5MPS

(A)
8.

(A)
(C)
7.

(C)

(A)

(A)
6.

(B)

U # U

(A)
4.

(B)

(C)

h UU-UU U U U S

(A)

U S

(B)

(C)

U U

(D)

- , c , U
U mU h

(A)

(B)

(C)

U U

(D)

UU

D0108

P.T.O.

10.

Taxes raised are credited into :

(A) Consolidated Fund
(C) Public Accounts

11.

Items which are of recurring nature are covered under :

(A) Capital Budget
(B) Revenue Budget
(C) Cash Budget
(D) Unified Budget

12.

The difference between total revenue and total expenditure is called :

(A) Capital deficit
(B) Revenue deficit
(C) Fiscal deficit
(D) Budgetary deficit

13.

Borrowings from foreigners are known as :

(A) Export of goods
(B)
(C) Capital receipts
(D)

14.

Quantitative restrictions on imports by a country will lead to :

(A) Decreased demand for imported products
(B) Increased demand for imported products
(C) Increased supply of imported products
(D) Decreased supply of imported products

15.

According to Economic Survey 2007-2008, Indias exports as per cent of GDP in 20062007 stood at :
(A) 11.0
(B) 14.0
(C) 16.0
(D) 19.0

16.

The fiscal deficit of the Central Government in India as percentage of GDP in 20062007 stood at :
(A) 1.4
(B) 3.4
(C) 5.4
(D) 4.1

17.

As per the UNDPs Global Human Development Report 2007, Indias relative ranking
out of 177 countries in respect of HDI was :
(A) 123
(B) 131
(C) 128
(D) 125

18.

Gross Domestic Savings as percent of GDP at current market prices in India in 20062007 was :
(A) 30.8
(B) 34.8
(C) 37.7
(D) 39.2

19.

In a regression equation of X on Y, bxy is equal to :

(A)

20.

byx

(B)

(B)
(D)

Contingency Fund
Private Accounts

Unrequited receipts
Current receipts

(C)

Which of the following averages is known as root-mean square ?

(A) Quadratic Mean
(B) Harmonic Mean
(C) Geometric Mean
(D) Combined Mean

D0108

(D)

r2
by x

10.

11.

U #

(A)

(B)

(C)

(D)

(A)
12.

14.

(B)

(C)

U U

(D)

US U

(D)

U U

U U

(A)
13.

(B)

(C)

(A)

(B)

(C)

(D)

mU U U U U

(A)

(B)

(C)

(D)

15.

2007-08 U, 2006-07 GDP M U

(A) 11.0
(B) 14.0
(C) 16.0
(D) 19.0

16.

U UU U U 2006-07 GDP

(A)
17.

1.4

(B)

3.4

(C)

5.4

(D)

4.1

2007 U s UU UU U, HDI , 177

U ?

(A)

123

(B)

131

(C)

128

(D)

125

18.

2006-07 , U U U GDP
(A) 30.8
(B) 34.8
(C) 37.7
(D) 39.2

19.

X U Y U , bxy UU
(A)

20.

byx

(B)

(C)

(D)

r2
by x

(D)

-- (MU--SU) ?

(A)
D0108

(B)

(C)

P.T.O.

Consider the following statements and select the correct answer from the codes given below
for questions 21 to 30 (Assertion and Reasoning type item).
21. Assertion (A) : Under oligopoly, all firms are aware of their inter-dependence.
Reason
(R) : Personal rivalries do not exist among firms under oligopoly.
(A) Both (A) and (R) are false
(B) Both (A) and (R) are true but (R) is not the explanation of (A)
(C) (A) is true, but (R) is false
(D) (A) is false, but (R) is true
22.

Assertion (A) : Giffen goods have a positively sloped demand curve.

Reason
(R) : The positive substitution effect in their case is more than offset by
negative income effect.
(A) Both (A) and (R) are true and (R) is the correct explanation of (A)
(B) (A) is true, but (R) is false
(C) Both (A) and (R) are false
(D) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

23.

Assertion (A) : According to Hicks, trade cycle occurs due to the interaction between
multiplier, and accelerator.
Reason (R) :
In Hicksian business cycle theory, accelerator is impotent in the
depression phase.
(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) Both (A) and (R) are false
(D) (A) is true, but (R) is false

24.

Assertion (A) : Duesenberry hypothesised that consumption income relationship is

irreversible.
Reason (R) :
Consumption depends not only on current income but also on previous
peak income.
(A) Both (A) and (R) are true, but (R) is not the correct explanation of (A)
(B) Both (A) and (R) are true, and (R) is the correct explanation of (A)
(C) (A) is true, but (R) is false
(D) Both (A) and (R) are false

25.

Assertion (A) : Backwash effects imply an unfavourable situation arising in

underdeveloped countries.
Reason (R) :
Undue emphasis on exports of raw-materials at the expense of the
growth of domestic manufacturing.
(A) (A) is true, but (R) is false
(B) Both (A) and (R) are false
(C) Both (A) and (R) are true and (R) is the correct explanation of (A)
(D) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

D0108

 U U

21

30

( U U )

U U U

21.

22.

(A) :
(R) :

U , S Z U M
U Z m l

(A)

(A) U (R)

(B)

(A) U (R)

, U

(C)

(A)

(R)

(D)

(A)

(R)

, U

(A) :
(R) :

, U

(R), (A)

ScUU

U M
S , S , U mU U
c U

23.

(A)

(A) U (R)

(B)

(A)

(R)

(C)

(A) U (R)

(D)

(A) U (R)

, U

, U

(A) :

(R), (A)

ScUU

(R), (A)

ScUU

U, U U U

(R) :

24.

25.

U h , U U

(A)

(A) U (R)

(B)

(A) U (R)

(C)

(A) U (R)

(D)

(A)

(R)

, U

(A) :
(R) :

(R), (A)
(R), (A)

KU
U U U U U U

(A) U (R)

, U

(B)

(A) U (R)

(C)

(A)

(R)

(D)

(A) U (R)

, U

(R), (A)

(R), (A)

ScUU

ScUU

U S
h U U U

(A)

(A)

(B)

(A) U (R)

(C)

(A) U (R)

(D)

(A) U (R)

, U

D0108

ScUU

(A)

(A) :
(R) :

ScUU

, U

(R)

(R), (A)

ScUU

(R), (A)
7

ScUU

P.T.O.

26.

Assertion (A) : Low levels of labour productivity exist in underdeveloped countries.

Reason (R) :

27.

(A)

Both (A) and (R) are false

(B)

(A) is true, but (R) is false

(C)

Both (A) and (R) are true and (R) is the correct explanation of (A)

(D)

Both (A) and (R) are true, but (R) is not the correct explanation of (A)

Assertion (A) : In India, more and more farmers are getting pushed out of agriculture.
Reason (R) :

28.

(A) is true, but (R) is false

(B)

Both (A) and (R) are false

(C)

Both (A) and (R) are true, and (R) is the correct explanation of (A)

(D)

Both (A) and (R) are true, but (R) is not the correct explanation of (A)

Assertion (A) : Jagdish Bhagwati stated that a country, in its growth process, would
experience immiserizing growth and deterioration of terms of trade.
Income elasticity of demand for the countrys exports is high.

(A)

Both (A) and (R) are true

(B)

(A) is false, but (R) is true

(C)

Both (A) and (R) are true and (R) is the correct explanation of (A)

(D)

(A) is true, but (R) is false

Assertion (A) : Coefficient of Concurrent Deviations is calculated between the

direction of deviations and not their magnitudes.
Reason (R) :

30.

Their land base is becoming smaller.

(A)

Reason (R) :

29.

It is due to the lack of physical capital.

If it is desired to study the correlation between two series in a very

casual manner.

(A)

(A) is false, but (R) is true

(B)

(A) is true, but (R) is false

(C)

Both (A) and (R) are true, but (R) is not the correct explanation.

(D)

Both (A) and (R) are true and (R) is the correct explanation.

Assertion (A) : James Buchanan viewed that primary burden of public debt is shifted
to posterity.
Reason (R) :

Public debt is paid by taxing the posterity.

(A)

(A) is true, but (R) is false

(B)

(A) is false, but (R) is true

(C)

Both (A) and (R) are false

(D)

Both (A) and (R) are true and (R) is the correct explanation of (A).

D0108

26.

27.

28.

(A) :
(R) :

SU U

(A)

(A) U (R)

(B)

(A)

(R)

(C)

(A) U (R)

(D)

(A) U (R)

, U

, U

(A) :
(R) :

(R), (A)

(R), (A)

ScUU

U , () U U U
U UU U

(A)

(A)

(B)

(A) U (R)

(C)

(A) U (R)

(D)

(A) U (R)

, U

, U

(A) :

ScUU

(R)

(R), (A)

ScUU

(R), (A)

ScUU

, h U
U U Z U

(R) :

29.

(A)

(A) U (R)

(B)

(A)

(C)

(A) U (R)

(D)

(A)

(R)

, U

, U

(A) :

(R)

(R), (A)

ScUU

SU

(R) :

/ M U
U

30.

(A)

(A)

(B)

(A)

(C)

(A) U (R)

, U

(D)

(A) U (R)

, U

(A) :

(R)

(R)

, U

(R), (A)

(R), (A)

ScUU

ScUU

UU U
SU

(R) :

U U U

(A)

(A)

(B)

(A)

(C)

(A) U (R)

(D)

(A) U (R)

D0108

, U

(R)

(R)

, U

(R), (A)
9

ScUU

P.T.O.

For questions No. 31 to 38, the candidates are required to tick (3) mark the option having
the right chronological order.
31. (i)
Theory of monopolistic competition
(ii) Gurnots Theory of Duopoly
(iii) Marshalls Theory of Quasi-rent.
(iv) Sweezys kinked demand curve Analysis
Codes :
(A) (iv) (iii) (i)
(ii)
(B) (i)
(iii) (ii) (iv)
(C) (ii) (iii) (i)
(iv)
(D) (iii) (i)
(iv) (ii)
32.

(i)
Peacock-Wiseman hypothesis
(ii) Buchanans An Economic Theory of Clubs
(iii) Wagner hypothesis
(iv) Findlay Shirrass canons of public expenditure
Codes :
(A) (i)
(iii) (ii) (iv)
(B) (iii) (i)
(iv) (ii)
(C) (ii) (iv) (iii) (i)
(D) (iii) (iv) (i)
(ii)

33.

(i)
Inventory Theoretic Approach
(ii) Restatement of the Quantity Theory of Money
(iii) Fishers Equation of Exchange
(iv) Tableau Economique
Codes :
(A) (i)
(iii) (ii) (iv)
(B) (iii) (ii) (i)
(iv)
(C) (iv) (iii) (i)
(ii)
(D) (ii) (i)
(iv) (iii)

34.

(i)
Introduction of Rolling Plan
(ii) The movement from Planning to Market mechanism
(iii) Feldman-Mahalanobis Model
(iv) Declaration of Plan holiday
Codes :
(A) (i)
(iii) (iv) (ii)
(B) (ii) (iv) (i)
(iii)
(C) (iii) (iv) (i)
(ii)
(D) (i)
(iii) (ii) (iv)

D0108

10

 31 38 , U U
31.

U S h
(ii) UU m-U h
(iii) - h
(iv) S$
(i)

U
(A)
(B)
(C)
(D)
32.

(iv),
(i),
(ii),
(iii),

(iii),
(iii),
(iii),
(i),

(i),
(ii),
(i),
(iv),

(ii)
(iv)
(iv)
(ii)

-$
(ii) h
(iii) U
(iv) U UU
(i)

U
(A)
(B)
(C)
(D)
33.

(i),
(iii),
(ii),
(iii),

(iii),
(i),
(iv),
(iv),

(ii),
(iv),
(iii),
(i),

(iv)
(ii)
(i)
(ii)

UU UU
(ii) USUUU UU U
(iii) U
(iv) U
(i)

U
(A)
(B)
(C)
(D)
34.

(i),
(iii),
(iv),
(ii),

(iii),
(ii),
(iii),
(i),

(ii),
(i),
(i),
(iv),

(iv)
(iv)
(ii)
(iii)

U U
(ii) U () U
(iii) U- U
(iv)
(i)

U
(A)
(B)
(C)
(D)
D0108

(i),
(ii),
(iii),
(i),

(iii),
(iv),
(iv),
(iii),

(iv),
(i),
(i),
(ii),

(ii)
(iii)
(ii)
(iv)
11

P.T.O.

35.

(i)
Specific Target-group Oriented Programmes
(ii) Introduction of Family Planning
(iii) Direct Anti-poverty Programmes
(iv) Minimum Needs Programme
Codes :
(A) (ii) (i)
(iv) (iii)
(B) (i)
(iii) (ii) (iv)
(C) (iv) (iii) (i)
(ii)
(D) (iii) (ii) (iv) (i)

36.

(i)
WTO Ministerial Meeting at Cancun
(ii) WTO Ministerial Meeting at Hong Kong
(iii) WTO Ministerial Meeting at Singapore
(iv) WTO Ministerial Meeting at Doha
Codes :
(A) (i)
(iii) (ii) (iv)
(B) (iii) (iv) (i)
(ii)
(C) (ii) (iii) (i)
(iv)
(D) (iv) (ii) (iii) (i)

37.

(i)
National Rural Employment Guarantee Programme (N.R.E.G.P.)
(ii) Sampooran Gramin Rozgar Yojana (S.G.R.Y.)
(iii) Antyodaya Anna Yojana (A.A.Y.)
(iv) Pradhan Mantri Gram Sadak Yojana (P.M.G.S.Y.)
Codes :
(A) (i)
(iv) (iii) (ii)
(B) (iii) (i)
(ii) (iv)
(C) (iv) (ii) (iii) (i)
(D) (iii) (iv) (ii) (i)

38.

Chairman of the Finance Commission

(i)
N.K.P. Salve
(ii) C. Rangarajan
(iii) P.V. Rajmannar
(iv) K.C. Niyogi
Codes :
(A) (i)
(iv) (iii) (ii)
(B) (iv) (iii) (i)
(ii)
(C) (iv) (i)
(ii) (iii)
(D) (iii) (i)
(iv) (ii)

D0108

12

35.

(i)

cU UUU-

(ii)

UU U

(iii)

-U

(iv)

36.

(A)
(B)
(C)
(D)

(ii),
(i),
(iv),
(iii),

(i),
(iii),
(iii),
(ii),

(iv),
(ii),
(i),
(iv),

(iii)
(iv)
(ii)
(i)

(i)

WTO U U

(ii)

WTO U U

(iii)

U WTO U U

(iv)

WTO U U

37.

(A)
(B)
(C)
(D)

(i),
(iii),
(ii),
(iv),

(iii),
(iv),
(iii),
(ii),

(ii),
(i),
(i),
(iii),

(iv)
(ii)
(iv)
(i)

(i)

MU U UU (N.R.E.G.P.)

(ii)

U UU (S.G.R.Y.)

(iii)

(A.A.Y.)

(iv)

(P.M.G.S.Y.)

U
(A)
(B)
(C)
(D)
38.

(i),
(iii),
(iv),
(iii),

(iv),
(i),
(ii),
(iv),

(iii),
(ii),
(iii),
(ii),

(ii)
(iv)
(i)
(i)

(i)

...

(ii)

. UU

(iii)

.. UU

(iv)

..

U
(A)
(B)
(C)
(D)
D0108

(i),
(iv),
(iv),
(iii),

(iv),
(iii),
(i),
(i),

(iii),
(i),
(ii),
(iv),

(ii)
(ii)
(iii)
(ii)
13

P.T.O.

Matching item (Questions No. 39 to 46) : This consists of two lists of Events / Theories
/ Models / Statements, etc. and the other of authors / years. The candidates are required
to match an item in one list with an item in the other and mark the correct matching
option, given in the code.

39.

List-I

List-II

(a)

Limit pricing theory

(i)

E.H. Chamberlin

(b)

Selling Costs

(ii)

Robin Marris

(c)

Sales maximisation model

(iii)

J.S. Bain

(d)

Growth maximising model of the firm (iv)

William Baumol

Code :
(a)

(b)

(c)

(d)

(A)

(iii)

(i)

(iv)

(ii)

(B)

(ii)

(iv)

(i)

(iii)

(C)

(ii)

(i)

(iv)

(iii)

(D)

(iii)

(ii)

(iv)

(i)

40.

List-I

List-II

(a)

Increasing Returns to Scale

(i)

b1, b2 < 1

(b)

Diminishing Returns to Scale

(ii)

b11b2 > 1

(c)

Constant Returns to Scale

(iii)

b11b2 < 1

(d)

Diminishing Returns to Factors

(iv)

b11b251

Code :
(a)

(b)

(c)

(d)

(A)

(i)

(iv)

(iii)

(ii)

(B)

(iv)

(i)

(ii)

(iii)

(C)

(ii)

(iii)

(iv)

(i)

(D)

(ii)

(iii)

(i)

(iv)

D0108

14

 U U / h / U / U U /
U -I -II U U U

39.

-I

-II

(a)

U h

(i)

.. U

(b)

(ii)

U U

(c)

U U

(iii)

..

(d)

h U U

(iv)

U
(a)

(b)

(c)

(d)

(A)

(iii)

(i)

(iv)

(ii)

(B)

(ii)

(iv)

(i)

(iii)

(C)

(ii)

(i)

(iv)

(iii)

(D)

(iii)

(ii)

(iv)

(i)

-I

40.

-II

(a)

(i)

b1, b2 < 1

(b)

(ii)

b11b2 > 1

(c)

SU

(iii)

b11b2 < 1

(d)

U O

(iv)

b11b251

U
(a)

(b)

(c)

(d)

(A)

(i)

(iv)

(iii)

(ii)

(B)

(iv)

(i)

(ii)

(iii)

(C)

(ii)

(iii)

(iv)

(i)

(D)

(ii)

(iii)

(i)

(iv)

D0108

15

P.T.O.

41.

List-I

List-II

(a)

Revealed Preference hypothesis

(i)

A. Bergson

(b)

Quasi rent

(ii)

B.S. Minhas

(c)

Elasticity of substitution

(iii)

A. Marshall

(d)

Social welfare function

(iv)

P.A. Samuelson

Code :
(a)

(b)

(c)

(d)

(A)

(iii)

(i)

(ii)

(iv)

(B)

(iv)

(iii)

(ii)

(i)

(C)

(iv)

(i)

(ii)

(iii)

(D)

(ii)

(iii)

(iv)

(i)

42.

List-I

List-II

(a)

Tableau Economique

(i)

Richard Stone

(b)

Life cycle hypothesis

(ii)

Robert Mundell

(c)

An open economy version

of IS-LM model

(iii)

Francois Quesnay

National income accounting

(iv)

Franco Modigliani

(d)

Code :
(a)

(b)

(c)

(d)

(A)

(ii)

(iii)

(iv)

(i)

(B)

(iii)

(i)

(ii)

(iv)

(C)

(iii)

(iv)

(ii)

(i)

(D)

(iv)

(iii)

(i)

(ii)

43.

List-I

List-II

(a)

Physical Quality of Life Index

(i)

W.W. Rostow

(b)

Organic Composition of Capital

(ii)

R.F. Harrod

(c)

Warranted rate of growth

(iii)

Morris D. Morris

(d)

Stages of growth theory

(iv)

Karl Marx

Code :
(a)

(b)

(c)

(d)

(A)

(iv)

(iii)

(i)

(ii)

(B)

(iii)

(iv)

(i)

(ii)

(C)

(ii)

(iii)

(i)

(iv)

(D)

(iii)

(iv)

(ii)

(i)

D0108

16

41.

-I -II U
-I

-II

(a)

(i)

(b)

(ii)

..

(c)

(iii)

(d)

(iv)

..

U
(A)
(B)
(C)
(D)

(a)
(iii)
(iv)
(iv)
(ii)

(b)
(i)
(iii)
(i)
(iii)

(c)
(ii)
(ii)
(ii)
(iv)

(d)
(iv)
(i)
(iii)
(i)

-I

42.

-II

(a)

(i)

UU SU

(b)

(ii)

UU U

(c)

IS-LM U S

(iii)

(iv)

SU

(d)

UcU U

U
(A)
(B)
(C)
(D)
43.
(a)
(b)
(c)
(d)

(a)
(ii)
(iii)
(iii)
(iv)

(b)
(iii)
(i)
(iv)
(iii)

(c)
(iv)
(ii)
(ii)
(i)

(d)
(i)
(iv)
(i)
(ii)

-I


h U
h h S

(i)
(ii)
(iii)
(iv)

-II
U.U. USU
U.. UU
U U. U

U
(A)
(B)
(C)
(D)
D0108

(a)
(iv)
(iii)
(ii)
(iii)

(b)
(iii)
(iv)
(iii)
(iv)

(c)
(i)
(i)
(i)
(ii)

(d)
(ii)
(ii)
(iv)
(i)
17

P.T.O.

44.

45.

List-I
(a) Income effect of devaluations
(b) Price effect of devaluation
(c) A measure to correct disequilibrium
in BOP
(d) International liquidity
Code :
(a) (b) (c) (d)
(A) (ii) (i)
(iii) (iv)
(B) (iv) (iii) (ii) (i)
(C) (iv) (ii) (i)
(iii)
(D) (iii) (ii) (i)
(iv)
List-I
(a) Regulation of Capital market
(b) Selective credit control
(c) Minimum support price
(d) Plan transfers
Code :
(a) (b) (c) (d)
(A) (iv) (i)
(ii) (iii)
(B) (iv) (iii) (ii) (i)
(C) (ii) (iii) (iv) (i)
(D) (iv) (iii) (i)
(ii)

46.

List-I
(i)

nc

(b)

np

(c)

nc X

(iii)

(d)

np X

(iv)

D0108

(ii)

(b)
(iii)
(i)
(ii)
(iv)

(iii)
(iv)

S.D.Rs
Absorption approach

(i)
(ii)
(iii)
(iv)

List-II
CACP
Gadgil formula
RBI
SEBI

List-II

(a)

Code :
(a)
(A) (ii)
(B) (iii)
(C) (iv)
(D) (iii)

(i)
(ii)

List-II
Depreciation
Elasticity approach

(c)
(iv)
(ii)
(i)
(i)

(d)
(i)
(iv)
(iii)
(ii)
18

-I

44.
(a)
(b)
(c)
(d)

U
(A)
(B)
(C)
(D)

B.O.P. U U
UcU U
(a)
(ii)
(iv)
(iv)
(iii)

(b)
(i)
(iii)
(ii)
(ii)

(c)
(iii)
(ii)
(i)
(i)

(ii)

(iii)

S D Rs

(i)

(iv)

(d)
(iv)
(i)
(iii)
(iv)

-I

45.

-II

-II

(a)

(i)

CACP

(b)

(ii)

(c)

(iii)

RBI

(d)

(iv)

SEBI

U
(A)
(B)
(C)
(D)

(a)
(iv)
(iv)
(ii)
(iv)

(b)
(i)
(iii)
(iii)
(iii)

(c)
(ii)
(ii)
(iv)
(i)

(d)
(iii)
(i)
(i)
(ii)

-I

46.

-II
(i)

(a)

nc

(b)

np

(c)

nc X

(iii)

(d)

np X

(iv)

(ii)

U
(A)
(B)
(C)
(D)
D0108

(a)
(ii)
(iii)
(iv)
(iii)

(b)
(iii)
(i)
(ii)
(iv)

(c)
(iv)
(ii)
(i)
(i)

(d)
(i)
(iv)
(iii)
(ii)
19

P.T.O.

Read the following passage below and answer questions from 47 to 50 on your
understanding of the passage :
One argument for protection that stands up to close economic scrutiny is the
infant - industry argument. It holds that a nation may have a potential comparative
advantage in a commodity, but because of lack of know-how and the initial small level
of output, the industry cannot successfully compete with more established foreign firms.
The infant-industry argument for protection is correct but requires several important
qualifications. First, such an argument is more justified for developing nations where
capital markets may not function properly. Second, as experience has shown that
protection, once given, is difficult to remove. Third, what trade protection in the form
of an import tariff, can do an equivalent production subsidy to the infant industry can
do better. The reason is that a purely domestic distortion such as this should be overcome
with purely domestic policy such as direct production subsidy to the infant industry. A
production subsidy is also a more direct form of aid and it is easier to remove than an
import tariff. A better policy would be to provide a direct subsidy to the industry.
Similarly, a direct tax would also be better than a tariff to discourage activities that give
rise to external diseconomies because the tax does not distort relative prices and
consumption.

47.

48.

The obstacles for an industry to compete with more established foreign firms are due to :
(A)

Lack of know-how and technology

(B)

Lack of Capital and initial small level of output

(C)

Lack of know-how and initial small level of output

(D)

Lack of flexibility.

Developing countries are characterised by :

(A)

Improper functioning of money markets

(B)

Absence of capital markets

(C)

Absence of both money markets and capital markets

(D)

Improper functioning of the capital market

D0108

20

 UU U UU U U 47 50
U

U U l
UcU S U U
() U UU SU l, Z
S U U , -l U
, UcU UU U
M U U, U U
U U , M U UU
U (U) -l U h U
h U M h U U -l
-U U M U
- U l U U
U s UU U
U U
47.

48.

Z S U l
(A)

U l

(B)

U U SU

(C)

U U SU

(D)

mU U
(A)

U U

(B)

U S

(C)

U U U S

(D)

U U

D0108

21

P.T.O.

49.

50.

Which is appropriate form of trade protection ?

(A)

Export tariff

(B)

Import tariff

(C)

Export subsidy

(D)

Non-tariff barriers

Which of the following is appropriate activity giving rise to external economics ?

(A)

A direct tax

(B)

Tariff

(C)

Trade policies

(D)

Production subsidy

-oOo-

D0108

22

49.

50.

U U M ?
(A)

(B)

(C)

(D)

U-

s U ?
(A)

(B)

(C)

(D)

-oOo-

D0108

23

P.T.O.

Space For Rough Work

D0108

24