NTA UGC NET/JRF Exam, Dec. 2020/June 2021 Commerce (Morning-Shift)

Total Questions: 100

41. Which of the following institutions are included in the 'World Bank Group'?

(a) International Finance Corporation
(b) International Monetary Fund
(c) World Trade Organization
(d) Multilateral Investment Guarantee Agency
(e) International Development Association
Choose the correct answer fromthe options given below

Correct Answer: (d) A, D and E only
Solution:

The world Bank group consists of five orgarisations
The International Bank for Reconstruction and development. (IBRD)
The International development Association (IDA)
To gether, IBRD and IDA make up the world Bank
The International finance corporation.
Multitateral centre for settlement of Inuistment Disputes.

42. Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to

(i) Political awareness social security and inclusion
(ii) Public health, education and literacy
(iii) Maintaining ecological balances and protecting environment
(iv) Gender diversity, profiteering and market controlling
(v) Rendering, sponsoring and donating to social charitable activities
Choose the correct answer from the options given below : 

Correct Answer: (b) B, C and E only
Solution:

Corporate social responsibility is the continuing commitment by buisness to behave ethically and contribute to:-
(i) Public helth education and literacy.
(ii) Maintaining ecological balances and protecting environment.
(iv) Rendering sponsoring and donating to social & charitable activities.
Corporate social responsibility is a concept used in managemetn science is that business should maximise their projits subject to their working in a socially responsible manner to promote the interests of the society.

43. Firm characteristics that help managers identify core compentencies include :

(i) Potential access to wide variety of markets
(ii) Significantly contribute to the perceived customer benefits
(iii) Value accretive and non competitive
(iv) Distinctive and difficult for competitors to imitate
Choose the most appropriate answer from the options given below :

Correct Answer: (c) A, B and D only
Solution:

Firm characteristics that help managers identify core compentmcies include :-
Potential access to coide variety of markets.
Significantly contribute to the perceived customer benefits.
Distinctive and difficult for competitors to imitate.
A core competency is a concept in management theory introduced by C.K. prahalad and gary hamel.
"A harmonized combination of multiple resources and skills that distinguish a firm in the 'market place' & there gore are the youndation of companics competitieseness.

44. ‘Which of the following distinction (s) is/are not correct between public issue and rights issue?

(a) In public issue, applications for shares are invited from the general public and in rights issue, the shares are offered to existing shareholders

(b) In public issue there is no question of any over-subscription and in rights issue the shares may be under subscribed or over subscribed leading to prorata allotment.

(c) The price of public issue is generally less than the.market price and in rights issue, the price is deliberately made less than the market price.

(d) In a public issue, the communication of the issue is through prospects or advertisements and in rights issue the communication. is between the company and the existing members of the company.

Choose the most appropriate answer from the options given below :

Correct Answer: (a) B only
Solution:

In public issue - when company offers its share to the general public or investors that is called public issue and when an issue of share in which demand enceeds the available supply is over-subscription of share:

Over - subscription case is occuce in publie issue also.
Right shares means the shares where the existing sharholders have the first right to subscribe the shares.
These are usually issued at the discount as compared to prevailing share price.

45. According to AS-2, which of the following costs should be included in valuing the inventories of a manufacturing company?

(i) Freight and insurance
(ii) Carriage outwards
(iii) Depreciation of factory plant
(iv) General administrative overheads
Choose the most appropriate answer from the options given below : 

Correct Answer: (d) A and C only
Solution:

According to AS-2 freight and insurance, Depreciation of factory plant costs should be included valuing the inventories of a manufacturing company.

Accounting standard -2 (valuation of inventories )
The cost of inventories should comprise of all costs of purchase Costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

46. Which of the following rules stands true while preparing schedule of changes in working capital?

(i) An increase in current assets increases working capital
(ii) An increase in current assets decreases working capital
(iii) An increase in current liabilities decreases working capital
(iv) An increase in current liabilities increase working capital
Choose the most appropriate answer from the options given below : 

Correct Answer: (a) A and C only
Solution:

Following rules stands true while preparing schedule of changes in working capital :-

47. Characteristics constituting the core of consumers rationality includes :

(a) Homogeneous expectations
(b) Non- satiation
(c) Selfish motive
(d) Clarity of preferences
(e) Possession of information
Choose the correct answer from the options given below :

Correct Answer: (a) A,B and C only
Solution:

Characteristic constituting the core of consumers rationality includes :- Non-satiation, selfish motive clarity of preference possession of information.

The concept of rational consumer describes the individual acting out of self-interest with the main aim of maximizing their private benefits through consumption.

48. ‘Why is indifference curve convex to the origin?

(a) Indifference curve slope downward to the right
(b) Two commodities are imprefect substitutes
(c) Declining marginal rate of substitution between commodities
(d) Diminishing marginal utilities
Choose the most appropriate answer from the options given below : 

Correct Answer: (b) B and C only
Solution:

An indifference curve being convex towards origin means that slope of the curve declines as the; consumer moves along the curve from lift to right.

Slope is nothing but marginal Rate of substation which means the number of units of the good on the y-axis the consumer is willing to sacrifice to obtain one more unit of the good on the x -axis.

So convexity means MRS declining as consumer obtains more and more of the good on the x-axis. This is due to the law of diminishing marginal utility.

49. Financial crises takes the form of

(a) Currency crisis
(b) Banking crisis
(c) Systematic financial crisis
(d) Foreign debt crisis
Choose the correct answer from the options given below :

Correct Answer: (b) A, B, D only
Solution:

Financial crises takes the form of currency crises Banking crisis, foreign debt crisis.

According to Eichengreen and portes - "A disturbance to financial markets, associated typically with falling assets prices and insolvency amongst debtors and intermediaries 'which ramifies through the financial system disrupting the market's capacity to allocate capital”.

50. Following are the problems that mar an optimal international diversification :

Correct Answer: (d) A,B,C,D only
Solution:

The problems than man an optimal international diversification, are :
→Unfavorable exchange rate movements.
→Frictions in international markets
→ Manipulation of security prices
→Unequal access to information.
→ The attempt to reduce risk by investing in more than lone nation is called international diversification.