UGC NTA NET/JRF Exam, December-2024 Economics

Total Questions: 100

41. Which of the following is/are not applicable to classical theory of trade?

(A) Labour theory of value
(B) One factor model
(C) It satisfies zero-sum game
(D) It is a multi-factor model
(E) Factors of production are mobile domestically and intemationally
Choose the correct answer from the options given below:

Correct Answer: (d) C, D, E Only
Solution:

The Classical Theory of Trade is mainly based on the Labor Theory of Value and the One-Factor Model, which was proposed by Adam Smith (Theory of Absolute Advantage) and David Ricardo (Theory of Comparative Advantage). Therefore, options C, D, and E do not apply to the Classical Theory of Trade.

Note: The commission/examining body considered option (c) of this question to be the correct

42. In a Life Table which one of the following does not fit

Correct Answer: (c) Age specific birth rate can be derived from a Life Table
Solution:

The Life Table primarily analyzes mortality and survival rates, not birth rates. It typically has eight (8) columns, including age-specific death rate (qx) and age-specific life expectancy (ex).

It is useful for calculating age-specific life expectancy but does not provide age-specific birth rates because birth rate data relates to fertility, not mortality.

43. Given the following statements about major schools of thought in macro economics, state which ones are correct :

(A) The New Keynesians assume Rational Expectation and market imperfections and highlight the role of aggregate demand.

(B) The Monetarists assume Rational expectation, non-competitive markets and highlight the role of monetary policy.

(C) The New Classicals assume Rational Expectation, competitive markets and highlight policy irrelevance.

(D) The Classicals assume a competitive, and frictionless economy and highlight policy

(E) The Keynesians assume wage and price flexibility and highlight policy effectiveness.
Choose the correct answer from the options given below :

Correct Answer: (a) A, C & D Only
Solution:

Among the given macroeconomic ideologies, statements A, C, and D are correct.
B. Monetarists, especially those led by Milton Friedman, generally assume Adaptive Expectations, not Rational Expectations.
They typically accept competitive markets and consider the role of monetary policy to be important.

E. Traditional Keynesian Economists believe that wages and prices are rigid (sticky), not flexible. They emphasize that government fiscal and monetary policies are effective in stabilizing the economy.

44. Effective demand problem may arise even in a competitive market economy under Rational Expectation, if there is :

Correct Answer: (b) Coordination Failure.
Solution:

The Effective Demand problem can arise in a competitive market due to coordination failure, where businesses and consumers fail to align their expectations correctly. If firms expect low demand, they cut production and jobs, which causes income and spending to fall, leading to even lower demand.

45. The basis of Consumer Surplus in Marshall's Utility Analysis is the :

Correct Answer: (c) Law of Diminishing Marginal Utility
Solution:

The basis of Consumer Surplus in Marshall's Utility Analysis is the Law of Diminishing Marginal Utility. Consumer surplus is defined as the difference between the price an individual is willing to pay for a good and the price they actually pay.

46. Generalised least square method of estimation can be used in which of the following cases :

(A) Auto correlated disturbances
(B) Multicollinearity among explanatory variables
(C) Heteroscedastic disturbances
(D) Overfitted models
(E) Incorrect functional forms
Choose the correct answer from the options given below:

Correct Answer: (c) A & C Only
Solution:

The Generalized Least Squares (GLS) method can primarily be used when autocorrelation or heteroskedasticity is found in the error terms. Therefore, statements A and C are correct.

B. GLS does not solve the problem of correlation (multicollinearity) between explanatory variables; other methods like Ridge Regression are suitable for this.

D. GLS does not solve over-fitted models; for this, model selection techniques like AIC/BIC or regularization methods are used.

E. If the wrong functional form or mathematical form is used, GLS cannot correct it; the model needs to be re-specified.

47. Arrange the following from first (oldest) to last :

(A) The Logic of Investment Planning - Sukhamoy Chakravarty
(B) Choice of Techniques - Amartya Sen
(C) Shadow Prices - Jan Tinbergen
(D) The Tragedy of the Commons - G. Hardin
(E) Marginal Utility - Alfred Marshall
Choose the correct answer from the options given below :

Correct Answer: (e) (*)
Solution:

The correct chronological order (from oldest to newest) is as follows:

Book / ConceptAuthorPublication Year
(E) Marginal UtilityAlfred Marshall1890
(C) Shadow PriceJan Tinbergen1950–1960
(B) Choice of TechniquesAmartya Sen1959
(D) The Tragedy of the CommonsG. Hardin1968
(A) The Logic of Investment PlanningSukhamoy Chakravarty1970–1980

48. Arrange the following scholars' population theories in chronological order :

(A) Karl Marx
(B) Edwin Cannan
(C) T.R. Malthus
(D) C.R. Blacker
Choose the correct answer from the options given below:

Correct Answer: (e) (*)
Solution:

The correct chronological order of the population theories is as follows:
(C) T.R. Malthus - 1798
(A) Karl Marx - 1867
(B) Edwin Cannan - 1900
(D) C.R. Blacker - 1940-1950
The official answer from the commission was option (c) (C, B, A, D), which places Cannan before Marx. The theoretically correct answer is C,A,B,D.

49. Match LIST-I with LIST-II

LIST-ILIST-II
A. Unit Root testI. Durbin-Watson Test
B. Contingency tableII. Student's t-Test
C. Regression coefficientIII. Stationarity
D. AutocorrelationIV. 𝓍² Test (Chi-square test)

Choose the correct answer from the options given below:

Correct Answer: (b) A-III, B-IV, C-II, D-I
Solution:
LIST-ILIST-II
A. Unit Root testStationarity
B. Contingency table𝓍² Test (Chi-square test)
C. Regression coefficientStudent's t-Test
D. AutocorrelationDurbin-Watson Test

50. Arrange the following from earlier to the latest

(A) Price-Specie-Flow Mechanism
(B) Comparative Advantage
(C) Absolute Advantage
(D) Intra-Industry Trade
(E) Mercantilism
Choose the correct Answer from the options given below:

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

(E) Mercantilism (1561-1626)
(A) Price-Specie Flow Mechanism (1752)
(C) Absolute Advantage (1776)
(D) Comparative Advantage (1817)
(B) Inter-Industry Trade (1975)