NTA UGC NET/JRF Re-Exam, June-2024 Economics

Total Questions: 100

11. What is the permissible limit of foreign Direct Investment in India's defence industry through government route?

Correct Answer: (d) 100 percent
Solution:

As per the current FDI policy in India, the permissible limit of FDI in the defense industry through government route is up to 100% however, this is only allowed in cases where it is likely to result in access to modern technology.

12. Match List-I with List-II.

List-IList-II 
(A) General Heteroscadesticity t-test(I) Ramsey
(B) General test for auto correlation(II) Hausman
(C) Test of simultaneity(III) White
(D) General test of specification error(IV) Breusch-Godfrey

Choose the correct answer from the options given below

Correct Answer: (c) (A)-(III), (B)-(IV), (C)-(II), (D)-(I)
Solution:
List-IList-II 
(A) General Heteroscadesticity t-test(I) White
(B) General test for auto correlation(II) BreuschGodfrey
(C) Test of simultaneity(III) Hausman
(D) General test of specification error(IV) Ramsey

13. Which of the following is the biggest item of grants-in-aid the states assige assigned by the Fifteenth Finance Commission?

Correct Answer: (c) Local bodies grants
Solution:

The largest item of grant in aid standard signed by the 15th finance commission was the grant to local bodies, which was Rs 4.36 lakh crore. This grant was for the period 2021-22 to 2025-26. The grant was divided into the following categories:

■ Rural local bodies, Rs 2.4 lakh crore
■ Urban local bodies, Rs 1.2 lakh crore
■ Health grants, Rs 70,051 crore.
The 15th finance commission also, recommended other grants, including:
■ Performance incentives; Rs 4,800 crore for states to improve educational outcomes. ■ Online learning; Rs 6,143 crore for higher education in India.
■ Agricultural reforms; Rs 45,000  crore as a performance-based Incentive for states.

14. Arrange the names of following economists chronoliogically in order their Nobel prize awards (starting from earliest to the latest):

(A) Arthur Lewise
(B) Gunnar Myrdal
(C) Miltion Friedman
(D) A.V. Banerjee
(E) Lawrence Klein
Choose the correct answer from the options given below:

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

Economist received Noble prize in year in chronological order-
(i) Gunnar Myrdal - 1974
(ii) Milton Friedman - 1976
(iii) Arthur Lewise – 1979
(iv) Lawrence Klein - 1980
(v) A.V. Banerjee - 2019.

15. Consider the following statements:

(A) If a market generates a side effect or externality then the market solution are inefficient.
(B) If a market is efficient, then the quantity produced in the market maximize both producer's and consumer's surplus.
(C) Consumer's surplus is the buyer's WTP minus the seller's cost.
(D) Smith's invisible hand concept implies that competitive market outcome generates equity among the members in the society.
(E) Competitive market equilibrium is Pareto efficient.
Choose the correct answer from the options given below:

Correct Answer: (a) (A), (B), (E) only
Solution:

(i) If a market generates a side effect or externality then the market solution are inefficient.
(ii) If a market is efficient, then the quantity produced in the market maximize both produceries and consumer's surplus.
(iii) competitive market equilibrium is pareto efficient. rate.

16. What does not come under the purvies of the function of Reserve Bank of India?

Correct Answer: (d) Multiple expansion of credit
Solution:

The RBI's primary functions include acting as a banker's bank, a custodian of foreign reserves, a credit controller, and overseeing the printing and circulation of currency notes.
The RBI is the lender of last resort in India. This means that RBI provides loans to commercial banks when they are unable to get funds from other sources. Multiple expansion of credit is done commercial banks create credit through multiple expansions of demand deposits.

17. Match List-I with List-II.

List-IList-II
(A) NITI Aayog(I) Tit-for-Tat strategy
(B) R. Axelrod(II) Efficiency wage theory
(C) J. Stiglitz(III) K.N. Raj
(D) India's first five year plan (1951-1956)(IV) Knowledge support

Choose the correct answer from the options given below:

Correct Answer: (c) (A)-(IV), (B)-(I), (C)-(II), (D)-(III)
Solution:
List-IList-II
(A) NITI Aayog(IV) Knowledge support
(B) R. Axelrod(I) Tit-for-Tat strategy
(C) J. Stiglitz(II) Efficiency wage theory
(D) India's first five year plan (1951-1956)(III) K.N. Raj

18. Match List-I with List-II.

List-IList-II
(A) Arbitrage(I) An investor accepts and desires foreign exchange risk.
(B) Hedging(II) Refers to the time when the foreign currency changes, most often the spot rate.
(C) Speculation(III) It is related to buying currency from the monetary centre where its cheaper.
(D) Foreign exchange risk(IV) Relation to avoidance of foreign exchange risk.

Choose the correct answer from the options given below:

Correct Answer: (a) (A)-(III), (B)-(IV), (C)-(1), (D)-(II)
Solution:
List-IList-II
(A) ArbitrageIt is related to buying currency from the monetary centre where its cheaper.
(B) HedgingRelation to avoidance of foreign exchange risk.
(C) SpeculationAn investor accepts and desires foreign exchange risk.
(D) Foreign exchange riskRefers to the time when the foreign currency changes, most often the spot rate.

19. When import are restricted with quota rather than a tariff, the cost is sometimes magnified by a process known as________ .

Correct Answer: (a) Rent seeking
Solution:

When imports are restricted with quota rather than a tariff, the cost is sometimes magnified by a process known as Rent seeking.

20. In the leakage-injection approach to income determination, an increase in lump-sum tax ceteris paribus shifts:

Correct Answer: (c) The saving plus tax line to the left
Solution:

In the leakage-injection approach to income determination, an increase in lump-sum tax ceteris paribus shifts the savings plus tax line to theleft.

Notes- In the leakage - injection approach to income determination an increase in a lump sum tax would cause the "leakage" curve to shift upward as it represents a withdrawal of money from the circular flow of income, thereby reducing aggregate demand and potentially lowering the equilibrium level of income.