NTA UGC NET/JRF Exam, June 2020 Commerce (Evening-Shift)

Total Questions: 100

31. A price ceiling below the equilibrium price often leads to.............

Correct Answer: (c) Shortage of the commodity and black marketing
Solution:

When a price ceilling is set below the equilibrium price, quantity demanded will exceed| quantity supplied, and excess demand or shortages will result when a price floor is set above the equilibrium| price, the quantity supplied will exceed the quantity demanded, and excess supply or surpulses will result.

The shortage of the commodity and black marketing economy drives out legitimate industry that can't compete with the lower costs of illegal operations. Some black market players deliberately create shortages in legal goods to force people to purchase from them. The tax-free mature of the black market means the government losses revenue.

32. For a decline in price, Total Revenue (TR) increases if demand is...............

Correct Answer: (a) Elastic
Solution:

Total revenue is price multiplied by quantity demanded (TR = P x Qd) if demand is elastic at a given price level, than a compay should cut its price, the percentage drop in price will result in an even larger percentage increase in the quantity sold thus raising total revenue.

However, if demand is inelastic at the original quantity level, then the company raises its prices the percentage increase in price will result in a smaller percentage decrease in the quantity sold and total revenue will rise.

33. When consumers seeks to be different and exclusive by demanding less of a commodity as more people consumes it. This phenomenon is known as

Correct Answer: (b) Snob effect
Solution:

When consumers seek to be different and) exclusive by demanding less of a commodity as more people consume it. This phenomenon is known as the Snob effect.

It is a phenomenon described in micro economics as a Situation where the demand for a certain good by individuals of a higher income leyel is inversely related to its demand by those of a lower income level.

34. Which of the following policy has lost its sheen consequent to implementation of the GST Laws in India?

Correct Answer: (b) Fiscal policy
Solution:

Fiscal policy has lost its sheen consequent to the implementation of the GST laws in India. Fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures.

35. Reverse Repo Rate is a tool used by the Reserve Bank of India primarily to...........

Correct Answer: (b) Absorb liquidity
Solution:

The reverse repo rate is an important monetary policy tool used by the Reserve Bank of India (RBI) to control liquidity and inflation in the economy.

Under the Reserve Repo Rate, banks deposit excess fund with the RBI and earn interest for it. In case the RBI is falling short on money, they always ask commercial banks to pitch in with funds and offer| them great reverse repo rates in return.

36. A multinational firm is the one which..........

Correct Answer: (c) Control and operates production facilities in multiple countries
Solution:

A multinational corporation (MNC) or multinational enterprise (MNE) a corporation registered in more than one country or has operations in more than one country.

It is a large corporation which both produces and sells goods or services in various countries.

These are large companies with operations in several countries across the world. Thus multinational corporation are an important source of foreign direct investment (FDI).

37. Grouping of countries committed to remove all barriers to the free flow of goods and service between themselves and also pursue independent external trade policies is called

Correct Answer: (a) Free trade area
Solution:

Free trade area: This is the most basic form| of economic cooperation member countries remove all barriers to trade between themselves but are free to independently determine trade policies with nonmember! nations. An example is the North American free trade agreement (NAFTA)

38. Intellectual Property Rights (IPRs) protect the use of information and ideas that are of

Correct Answer: (c) Commercial value
Solution:

The four type of intellectual property rights include-
1. Trade Secrets
2. Trademarks
3. Copyrights
4. Patents
The economic and commercial value of PRs: IPRs means of protecting business interests, encouraging innovation and technology transfer and promoting trade and investment.

39. Uppasala model for internationalisation of business operations is not valid for.............

Correct Answer: (b) Services organisations
Solution:

The Uppsala model is one of the theories describing the Internationalization process of firms. The model states that firms first choose to enter nearby markets with low market commitment.
The Uppsala model is based on four core concept: market commitment, market knowledge, current activities and commitment decision.

The 1977 model is grounded in the broader research program on International business, led by professor sune carison which was launched following the establishment of the institute of business studies at the university of Uppsala in the late 1950.

40. Who coined the metaphor "Invisible hand" in the Theory of Moral Sentiments?

Correct Answer: (d) Adam Smith
Solution:

The invisible hand, metaphor introduced by the 18ᵗʰ century Scottish philosopher and economist Adam Smith in 1759 characterizes the mechanisms through which beneficial social and economic outcomes may arise from the accumulated self-interested actions of individuals none of whom intends to bring about such outcomes.

In his first book, "The theory of moral sentiments". Smith proposed the idea of an invisible hand the tendency of free markets to regulate themselves by means of competition supply and demand and selfinterest.