UGC NTA NET/JRF Exam, December-2024 Economics

Regarding the optimal solution of a Linear Programming Problem with two decision variables, the optimal solution is either an extreme point (corner point) or on the line segment connecting two extreme points.

The optimal solution is the one among all feasible solutions that maximizes or minimizes the objective function (as the case may be). There are two alternative methods for finding the optimal solution in linear programming.

The non-mathematical or Graphical Method, which can only be used to find the optimal solution for simple LPPs. The mathematical method, which is called the Simplex Method.

Under this method, many potential solutions are tested using mathematical equations, and relatively inferior solutions are rejected one by one until the optimal solution is obtained.

Although both the Graphical and Simplex methods are different ways to find the optimal solution to a problem, they arrive at the same result.

The exchange rate is the rate of exchange between the currencies of two countries. This rate indicates how many units of the second country's currency can be exchanged for one unit of the first country's currency.

Export activities (A): When a country's exports increase, the demand for that country's currency rises, which can increase the exchange rate.

Import activities (D): When a country's imports increase, the supply of that country's currency increases, which can decrease the exchange rate.

Interest rate (C): High interest rates can attract foreign investors, increasing the demand for the currency and raising the exchange rate. Statements (B) Open market operations and (E) Multi-expansion of credit do not directly influence the exchange rate in the same fundamental way as the others.

"Upward equity" in taxation, often referred to as Progressive Taxation, is required. A progressive tax is one in which the tax rate increases as income increases, possibly reaching a point where a very large part of the increase in income goes to the government.

Actor Proportions Theory: This is also known as the Heckscher-Ohlin Theory. It is a classical theory, not a modern one.

It states that countries will export goods whose production uses factors that are locally abundant, and import goods whose production uses factors that are locally scarce.

Offer Curve Analysis: This shows the equilibrium of reciprocal demand but is not considered a modern theory of trade.

Human Skills Theory: This states that countries have an advantage in exporting goods whose production requires a high level of human skills.

Product Cycle Theory: This explains that as a product moves through its life cycle, the location of its production evolves, which changes international trade patterns.

Monopolistic Competitive Trade Theory: This states that countries trade specialized goods within similar industries. which is characteristic of monopolistic competition.

Therefore, the Factor Proportions Theory and the Offer Curve Analysis are not modern theories of trade.

1. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) is a training and placement program that provides skill training to rural poor youth to secure employment. This scheme was launched on September 25, 2014, on the birth anniversary of Pandit Deendayal Upadhyaya.

2. Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched by the Government of India as a poverty reduction strategy to provide connectivity to unconnected habitations.

3. Swachh Bharat Mission (SBM) falls under the Department of Drinking Water and Sanitation. Ministry of Jal Shakti, which administers the Swachh Bharat Mission (Grameen). The Swachh Bharat Mission-Urban is administered by the Ministry of Housing and Urban Affairs.

4. National Social Assistance Programme (NSAP) is a welfare program administered by the Ministry of Rural Development.

Therefore, the option (c) Swachh Bharat Mission is NOT a program exclusively for rural development among the given options.

In the Kaldor-Hicks Criterion, the situation C is once superior to D, and then the situation D is superior to C. This is an inconsistent conclusion. This is called the 'Scitovsky Paradox'.

To overcome this paradox, Scitovsky presented his double criterion. Under the Scitovsky double criterion, there is a requirement that the original Kaldor-Hicks criterion must be fulfilled, and the reverse test must not be fulfilled.

Note: However, the commission/examining body considered option (d) of the question to be correct.

When the number of variables in an objective function is greater than two, it's no longer possible to graph the function.
Assume that
y = f (x₁, x₂..........xₙ) and the constraint (x₁, x₂.........xₙ) =0
The second partial derivative is f (= ∂²y/∂xᵢ ∂ⱼ)
where i,j = 1,2,3,....n.

The satisfaction of the first-order condition identifies some values as stationary values of the objective function. If, at a stationary value of y, we find that d₂y is positive definite, this is sufficient to establish that
value of y as a minimum.

Similarly, the negative definiteness of d₂y is a sufficient condition for the stationary value to be a maximum.

This raises the question of how to express d²y and how to determine its positive or negative definiteness when the function has three variables. For this purpose, the Hessian matrix is used, which is as follows:
Whose leading principal minors can be written as follows:
Thus, based on the determinant criteria for positive and negative definiteness, we can state the second-order sufficient condition for a maximum as follows:

Using this condition, we must evaluate all the leading principal minors at the stationary point, where f₁ = f₂ = f₃ = 0.

Marginal Efficiency of Capital (MEC): This is the rate at which the revenue generated from an additional capital investment equals the rate of the cost of capital. Marginal Efficiency of Investment (MEI):

This is the rate at which the revenue generated from an additional investment equals the rate of the cost of investment. Upon evaluating both MEC and MEI, it is found that when the net investment rate is zero, both MEC and MEI are equal to each other.

The reason for this is that when the net investment rate is zero, the stock of capital is constant, and there is no need for additional capital investment. In this situation, both MEC and MEI are equal.

If a quantitative variable in a regression analysis has 'm' categories, then 'm-1' dummy variables can be added to the model. Dummy coding is used to represent categorical data in a regression model.