UGC NTA NET/JRF Exam, December-2024 Economics

Total Questions: 100

31. Read the following example and choose the correct answer from the given options:

If a professor only gives letter grades in an exam, we know that the student who got an 'A' performed better than the student who got a 'B', but we cannot say how much better they were using the ordinal scale, nor can we say whether the difference in preference between the 'A' and 'B' grades is the same as the difference between the 'B' and 'C' grades.

Correct Answer: (d) Indifference Curve Analysis
Solution:

The example above only provides ordinal information through grades, which tells us which student performed better, but not how much better. Furthermore, the difference between the various grades is not measurable.

This characteristic relates to Indifference Curve Analysis (or Ordinal Utility Analysis), which ranks consumer preferences without assigning quantifiable measures of satisfaction.

32. The Big Push Theory considers the process of development to be essentially dependent on which of the following :

Correct Answer: (a) Comprehensive Planning
Solution:

The Big Push Theory is a significant theory in development economics, put forth by economist Rosenstein-Rodan. This theory posits that a massive, coordinated, and planned investment is essential for the development of any backward economy.

According to this theory, large-scale investment must be made simultaneously in various sectors so that the development of one sector can promote the development of others. The correct answer is (a) Comprehensive Planning.

33. Arrange the following areas/models in descending order of the magnitude of the Crowding Out Effect:

(A) Classical Macro Model
(B) Full Keynesian System, assuming normal conditions
(C) IS-LM Framework, assuming normal conditions
(D) Simple Keynesian Model
"Choose the correct answer from the options given below:"

Correct Answer: (e) (*)
Solution:

(A) Full Keynesian System, assuming normal conditions: Here, the crowding out effect is the highest because this system is built on normal conditions and incorporates various aspects of economic activity.

(C) IS-LM Framework, assuming normal conditions: In this framework, the crowding out effect is less than in the Full Keynesian System but is still significant because it is based on the precondition of normal conditions.

(A) Classical Macro Model: In these models, the crowding out effect is at a medium level. These models include various aspects of economic activity but are not based on the precondition of normal conditions.

(D) Simple Keynesian Model: In these models, the crowding out effect is the lowest. These models focus on only a few specific aspects of economic activity and are not based on the precondition of normal conditions.

Note: The commission/examining body considered the answer to this question to be option (a) A. B, C, D.

34. Asymmetric information in the Market for Lemons results in:

(A) A gradual decline in the average price.
(B) Higher-quality products being gradually withdrawn from the market.
(C) Adverse selection by one party. С.
(D) Lower-quality products being gradually withdrawn.
Choose the correct answer from the options given below:

Correct Answer: (d) Only A, B, C
Solution:

The Market for Lemons model, introduced by George Akerlof, explains how the average quality of goods traded can decrease due to asymmetric information

(where sellers know the quality better than buyers).
(A) A gradual decline in the average price.
(B) Better-quality products being gradually withdrawn from the market.
(C) Adverse selection by one party.

35. Arrange the following in chronological order

(A) Adam Smith
(B) David Ricardo
(C) David Hume
(D) Paul R. Krugman
(E) Jan Tinbergen
Choose the correct answer from the options given below:

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

The correct chronological order by lifespan is :
(C) David Hume (1711-1776)
(A) Adam Smith (1723-1790)
(B) David Ricardo (1772-1823)
(E) Jan Tinbergen (1903–1994)
(D) Paul R. Krugman (1953-Present)

36. Which of the following agencies is responsible for the compilation of National Income Statistics in India?

Correct Answer: (d) Central Statistical Organisation (CSO)
Solution:

The calculation of National Income in India was historically done by the Central Statistical Organisation (CSO). On May 23, 2019, the National Sample Survey Office (NSSO) and the CSO were merged to form the National Statistical Office (NSO).

Now, the task of calculating National Income is carried out by the NSO (which effectively took over the role of the CSO).

37. Match List-I with List-II :

List-IList-II
A. Type II ErrorI. P₀₁ × P₁₀ = 1
B. Mean > ModeII. Does not reject H when H is not true.
C. Homogeneous PopulationIII. Positively Skewed Distribution.
D. Time Reversal TestIV. Simple Random Sampling.

Choose the correct answer from the options given below:

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

The correct matching is :

List-IList-II
A. Type II ErrorDoes not reject H₀ when H₀ is not true.
B. Mean > ModePositively Skewed Distribution.
C. Homogeneous PopulationSimple Random Sampling.
D. Time Reversal TestP₀₁ × P₁₀ = 1

38. Match List-I with List-II :

List-IList-II
A. Free Trade Area (FTA)I. All tariffs are removed among members, and a common external trade policy is adopted for non-members (often including free movement of factors of production).
B. Customs Union (CU)II. All tariffs are removed among members, and the group adopts a common external commercial policy for non-members.
C. Common MarketIII. All members of the group remove tariffs on each other's products while maintaining their freedom to establish their own trade-values.
D. Economic UnionIV. The most advanced stage of trade integration.

Choose the correct answer from the options given below:

Correct Answer: (a) A-III, B-II, C-I, D-IV
Solution:
List-IList-II
A. Free Trade Area (FTA)All members of the group remove tariffs on each other's products while maintaining their freedom to establish their own trade-values.
B. Customs Union (CU)All tariffs are removed among members, and the group adopts a common external commercial policy for non-members.
C. Common MarketAll tariffs are removed among members, and a common external trade policy is adopted for non-members (often including free movement of factors of production).
D. Economic UnionThe most advanced stage of trade integration.

39. How can a Central Bank increase the money supply in the economy :

(A) By increasing the Cash Reserve Ratio
(B) By buying government securities from the public
(C) By reducing the Cash Reserve Ratio
(D) By reducing the Repo Rate
Choose the correct answer from the options given below:

Correct Answer: (c) Only B, C, D
Solution:

A Central Bank can increase the money supply in the economy by the following methods:
1. By lowering monetary rates such as the Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Repo Rate.

2. By purchasing securities from the public through Open Market Operations.
3. By cutting the Bank Rate.
4. By printing new currency.

40. Match LIST-I with LIST-II

LIST-ILIST-II
A. Simple random samplingI. Non-probability Sampling.
B. Systematic samplingII. Random choice of items from each stratum.
C. Quota SamplingIII. Random selection of the first unit and systematic selection of the rest.
D. Stratified random samplingIV. Equal probability of selection for each item in all trails.

Choose the correct answer from the options given below:

Correct Answer: (a) A-IV, B-III, C-I, D-II
Solution:
LIST-ILIST-II
A. Simple random samplingIV. Equal probability of selection for each item in all trails.
B. Systematic samplingIII. Random selection of the first unit and systematic selection of the rest.
C. Quota SamplingI. Non-probability Sampling.
D. Stratified random samplingII. Random choice of items from each stratum.