NTA UGC NET/JRF Exam, June 2020 Economics

Total Questions: 100

61. Banking Cash Transaction Tax (BCTT) was introduced with effect from:

Correct Answer: (b) 1st June, 2005
Solution:

The BCTT was imposed from 1st June, 2005. If you are withdrawing money above the limit that the bank has specified, you are liable to pay tax to the government.

62. Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R

Assertion A: According to Walt W. Rostow, the Principle Strategy of Development necessary for take-off was the mobilization of domestic and foreign savings.

Reason R: Mobilization of domestic and foreign savings is necessary to generate sufficient investment to accelerate economic growth.
In light of the above statements, choose the correct answer from the options given below.

Correct Answer: (a) Both A and R are true and R is the correct explanation of A
Solution:

According to Walt W. Rostow, the principle strategy of development necessary for take-off was the mobilization of domestic and foreign savings. It is true because, during take off, the economy self-sufficient and ready to take off.

For reason, it is true that the mobilization of domestic and foreign savings is necessary to generate sufficient investment to accelerate economic growth because countries can raise and spend their own funds to provide for their people and then increase economic growth.

63. According to traditional neoclassical growth theory, output growth results from:

A. Increase in labour quantity and quality
B. Increase in capital
C. Increase in exports
D. Improvement in technology
Choose the correct answer from the options given below:

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

According to traditional neo-classical growth theory, output growth results from one or more factors, such as; an increase in labour quantity and through population growth and education. An increase in capital through savings and investment improvement in technology.

64. Given below are two statements:

Statement I: The endogeneous growth theorists suggest, investment in human capital, innovation and knowledge leads to economic growth.

Statement II : Investment in human capital, innnovation and knowledge reduces the diminishing returns on investment

In light of the above statements, choose the most appropriate answer from the options given below.

Correct Answer: (a) Both Statement I and Statement II are correct
Solution:

Endogeneous growth theory maintains that economic growth is primarily the result of internal forces, rather than external ones. It argues that improvement in productivity can be tied directly to faster innovation and more investments in human capital from governments and private sector institutions.

Investment in human capital increase economic growth and decreases diminshing returns because human capital is such a factor that increases according to time and also increases the efficiency and knowledge of workers.

An increase in efficiency and knowledge will reduce the diminishing return as wastage will be reduced.

65. A decision free framework to identify a country's most binding constraints on economic growth is termed as:

Correct Answer: (b) Growth diagnostics
Solution:

Growth Diagnostic is a methodology to determine the obstacles to a country's capacity to grow. It is a unified framework for identifying the binding constraints to growth, which is key to formulating growth strategies.

66. Arrange the following growth economists in chronological order of when they proposed their theories:

A. Harrod
B. Schumpeter
C. Rostow
D. Solow Choose the correct answer from the options given below:

Correct Answer: (a) B, A, D, C
Solution:

Schumpeter - 1911
Harrod - 1939
Solow - 1956
Rostow - 1960

67. A growth model in which there are diminishing returns on each factor of production but constant returns to scale and exogenous technological change that generates long term economic growth is the:

Correct Answer: (d) Solow model
Solution:

The solow growth model focuses on long-run economic growth. A key component of economic growth is saving and investment. An increase in saving and investment raises the capital stock and thus raises the full employment national income and product.

68. A graph reflecting the relationship between a country's per capita income and its inequality of income distribution is the:

Correct Answer: (d) Kuznets Curve
Solution:

The relation between income inequality and economic development is given by kuznets in his 1955 article.

"Economic Growth and Income Inequality" this graph represents the relationship between a country' per distribution inequality.

69. Match List-I with List-II

List-I (Theory/Concept)List-II (Proponent)
A. Critical Minimum Effort TheoryI. C.P. Blacker
B. Neo-Classical Growth ModelII. W.W. Rostow
C. Demographic Transition TheoryIII. R. Solow
D. Age of High Mass ConsumptionIV. H. Leibenstein

Choose the correct answer from the options given below:

Correct Answer: (d) A-IV, B-III, C-I, D-II
Solution:

The correct match is:-

List-I (Theory/Model)List-II (Proponent)
A. Critical Minimum Effort TheoryI. H. Leibenstein
B. Neo-Classical Growth ModelII. R. Solow
C. Demographic Transition TheoryIII. C.P. Blacker
D. Age of High Mass ConsumptionIV. W.W. Rostow

70. Harrod-Domar considers a functional economic relationship in which the growth rate of the gross domestic product depends:

A. Directly on the national net savings rate
B. Inversely on the national capital-output ratio
C. Directly on industrial growth
D. Inversely on agricultural growth
Choose the correct answer from the options given below:

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

The Harrod-Domar considers a functional economic relationship in which the growth rate of the gross domestic product depends directly on the national net savings rate and inversely on the national capitaloutput ratio. Harrod's model is the Engligh Version of Domar's model.