NTA UGC NET/JRF Exam, December-2022 Economics (Shift-I)

Total Questions: 100

41. Nash equilibrium represents.

A. The outcome each time the game is played
B. Long-run equilibrium
C. A situation in which one player will not deviate, given the strategy of other player
D. Best response of the first mover
E. The pair of dominated strategies
Choose the correct answer from the options given below.

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

Nash equilibrium represents.
(1) Long-run equlibrium.
(2) A situation in which one player will not deviate, given the strategy of the other player

42. Which of the following are correct about loanable fund theory?

A. Dishoarding is a major source of supply of loanable funds.
B. Demand for hoarding is inversely related to the interest rate.
C. Equality between demand and supply of loanable funds is the only condition required for a stable equilibrium.
D. Wicksell was one of the propounders of the theory.
E. It introduced monetary factors into the theory of interest.
Choose the correct answer from the options given below.

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

In economics, the loanable funds doctrine is a theory of the market interest rate. According to this approach, the interest rate is determined by the demand for and supply of loanable funds. the term loanable funds includes all forms of credit, such as loans, bonds, or savings.

  • Demand for hoarding is in inversely related to the interest rate.
  • Wicksell was one of the propounders of the theory.
  • It introduced monetary factors into the theory of interest.

43. Which of the following are correct assumptions of Arrow's conditions of Social Welfare?

A. Responsiveness to individual preferences
B. Impositions
C. Dicatorship
D. Transitivity or consistency
E. Independent of irrelevant alternatives
Choose the correct answer from the options given below.

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

Arrow's conditions of social welfare (sequence wise)
Condition -1:- Transitivity or consistency.
Condition -2:-Responsiveness
Condition -3:- Independence of irrelevant Alternatives.
Condition -4:- Non imposition
Condition -5:- condition of Non-dictatorship A, D and E only.

44. The consequences of a country having a persistent current account surplus include.

A. Employment generation
B. Higher standard of living
C. Low inflation pressure
D. Currency appreciates in value
E. More pressure on public debt
Choose the correct answer from the options given below.

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

When current account surplus then it means that export > import. then the will be;
(1) Employment generation.
(2) Higher standard of living.
(3) currency appreciates in value.

45. For the computation of National income by the product method, which of the following sectors are considered.

A. Registered manufacturing
B. Agricultural and allied activities
C. Mining and quarrying
D. Unregistered manufacturing
E. Non-monetised activities
Choose the correct answer from the options given below.

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

• Registered manufacturing
• Agricultural and allied activities
• Mining and quarrying
• Unregistered manufacturing.
• Product method is also known as output method or value added method. In this method, we calculate the national income in terms of final goods and services produced in an economy during a particular period of time.

46. Which of the following statements are correct?

A. According to the accelerator model, investment demand is proportional to the change in GDP.
B. The real rate of interest is the nominal rate of interest plus the inflation rate. C. The higher the real interest rate, the higher is the rental cost of capital.
D. Investment is a stock concept.
E. Residential investment is low when mortage interest rates are high.
Choose the correct answer from the options given below.

Correct Answer: (b) A, Cand E only
Solution:

47. The properties of Mathematical Expectation are.

A. E(C) = 0, where C is constant
B. IF X and Y are random variables, then E(X+Y), E(X) + E(Y)
C. Var (X± C) = Var(X), where C is constant
D. If X and Y are independent random variables, then E(XY) = E(X).E(Y)
E. Var(aX) = a.Var(X), where a is constant
Choose the correct answer from the options given below.

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

The properties of mathmatical expectation are.
(i) If X & Y are random variables, then E (X + Y) = E (X) +E (Y)
(ii) Var (X± C) = Var (X),Where C is constant.
(iii) If X & Y are independent random variables, then E(XY) = E(X).E(Y)

48. Which of the following are correct are OLS estimation in the presence of autocorrelation?

A. The estimated coefficients are linear
B. The estimated coefficients are unbiased
C. The estimated coefficients are biased
D. The estimated coefficients are consistent
E. The estimated coefficients are efficients
Choose the correct answer from the options given below.

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

OLS estimation in the presence of auto correlation.
(1) The estimated coefficients are linear.
(2) The estimated coefficients are unbiased.
(3) The estimated coefficients are consistent.

49. Which of the following are correct in case of area under the standard normal probability curve.

A. Distance from the mean of ordinates in terms of ± σ at Z = ± 0.6745 is 0.55
B. Distance from the mean ordinates in terms of ± σ at Z = ± 1.96 is 0.95
C. Distance from the mean ordinates in terms of ± σ at Z = 2.0 is 0.9544
D. Distance from the mean ordinates in terms of ± σ at Z = ± 2.58 is 0.98
E. Distance from the mean ordinates in terms of ± σ at Z = ± 3.0 is 0.9973 Choose the correct answer from the options given below.

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

Cases of area under the standard normal probability curve.
(1) Distance from the mean ordinates in terms of ± σ at Z = ± 1.96 is 0.95
(2) Distance from the mean ordinates in terms of ± σ at Z = ± 2.0 is 0.9544
(3) Distance from the mean ordinates in terms of ± σ at Z = ± 3.0 is 0.9973

50. Which of the following satisfy the assumptions of the classical linear regression model?

A. The regression model is linear in the parameters
B. Zero mean value of disturbance U
C. The variance of U is constant
D. There is a serial autocorrelation between the disturbance terms
E. The number of observations must be greater than the number of parameters to be estimated
Choose the correct answer from the options given below.

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

Statements that satisfy the assumptions of the classical linear regression model.
(i) The regression model is linear in the parameters.
(ii) Zero mean value of disturbance Uᵢ
(iii) The number of observations must be greater than the number of parameters to be estimated.