NTA UGC NET/JRF Exam, June 2019 Economics (Shift-II)

Total Questions: 100

91. Multiplicative decomposition model is used to

(a) deseasonalise the time series data
(b) build cost of living index
(c) test a hypothesis
(d) estimate probability

Correct Answer: (a) deseasonalise the time series data

Solution:

The multiplicative decomposition model is used to deseasonalize time series data, which means removing seasonal effects from a time series.

It's a method used in time series analysis that breaks down a time series into its indivdiual components: trend, seasonality and random noise.

92. Match List-I with List-II

List-I (Property)	List-II (Definition/Category)
A. Skewness	(i) Dispersion
B. Variance	(ii) Random variation
C. Earthquake	(iii) Ratio of variances
D. F-test	(iv) Lack of symmetry

Choose the correct option from those given below:

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

Correct Answer: (b) A-iv B-i C-ii D-iii

Solution:

List-I (Property)	List-II (Definition/Category)
Skewness	Lack of symmetry
Variance	Dispersion
Earthquake	Random variation
F-test	Ratio of variances

93. Solve the efollowing equation?

(a) 15
(b) 16
(c) 27
(d) 20

Correct Answer: (c) 27

Solution:

Determinant of a 3 x 3 matrix
|A| = a (ei - fh) – b (di - fg) + c (dh - eg)
|A| = 6 (- 11) (– 2) – (— 5) (-5) – 5 (3) (– 2) – (3) (-5)) +5 ((3) (- 5) — (3) (— 11)) by calculating it we will get |A|= 27

94. If AR = 15 and MR = 5, the price elasticity of demand is

(a) 2.3
(b) 1.5
(c) 1.75
(d) 1

Correct Answer: (b) 1.5

Solution:

AR = 15
& MR = 5
Price elasticity of demand =
Note: The relationship between these three is: MR = AR: {(e -1)/e} which denotes that MR is directly related to AR but change twice the proportion of AR whereas MR is inversely related to elasticity of demand.

95. Difference equation is concerned with

(a) discrete changes
(b) continuous changes
(c) Both of the above
(d) None of the above

Correct Answer: (a) discrete changes

Solution:

Discrete changes are distinct changes that can be split into smaller, more frequent changes to create a smooth, continuous change.

Difference equation concerned with discrete changes in dependent variables with respect to discrete changes in independent variable. It is a equation which contains the difference of variable.

96. A linear programming problem can be solved by using

(a) ARIMA techniques
(b) Simplex method
(c) Unit root method
(d) None of the above

Correct Answer: (b) Simplex method

Solution:

The simplex method is a mathematical technique used to find the best solution to a set of simultaneous equations with constraints.

It's standard method for solving linear programming models, which are optimization problems that often involve inequalities and a function.

97. In an open economy input-output model, the viability is examined by

(a) Hawkins-Simon conditions
(b) Kuhn-Tucker conditions
(c) Dickey-Fuller test
(d) Goldfeld-Quandt test

Correct Answer: (a) Hawkins-Simon conditions

Solution:

The Hawkins-Simon condition is a necessary condition for the existence of a positive solution in an input-output system.

It states that the sum of the element in each column of the input output matrix must be less than or equal to one. Each column represents the total input requirements for each sector of the economy.

98. Applying OLS to simultaneous equations results in the parameters being

(a) inefficient
(b) inconsistent
(c) biased
(d) biased and inconsisten

Correct Answer: (d) biased and inconsisten

Solution:

If ᶜᵒᵛ(e, x) =\=0 the OLS estimator is inconsistent, i.e., its value does not converge to the true value of the parameter with the sample size, morever, the OLS estimator is biased. It is clear that ẞ¹ coverges to a value that is not the true value ẞ¹, so that makes it biased.

99. The cost function of a monopolist is C = 40 + 12X. Write his demand function as P = 60 - 3X. What is his profit maximising output level ?

(a) 12
(b) 11
(c) 8
(d) 9

Correct Answer: (c) 8

Solution:

Cost function of a monopolist
C = 40 + 12X
For finding profit maximising output level MC = MR So,
12 = 60 - 6x
6x = 60 - 12
6x = 48
x = 48/6 = 8

100. A simultaneous equation model is exactly identified, if

(a) unique numerical values of structural parameters can be obtained
(b) more than one numerical value can be obtained for some of the parameters of the structural equation
(c) unique solution of all the structural coefficients is not possible
(d) structural coefficient cannot be estimated

Correct Answer: (a) unique numerical values of structural parameters can be obtained

Solution:

A simultaneous equation model is defined as a model in economics and other fields where two or more equations are used together to determine the values of multiple variables simultaneously.

Simultaneous equation model is exactly identified if unique numerical values of structural parameters can be obtained.

These are those equation which describes how independent variables and dependent variables are related to each other. These tells how unknown quantities and equations are related to each other.