UGC NTA NET/JRF Exam, June-2025 Economics (Shift-II)

Total Questions: 100

21. Which of the following conditions are required for the set of consumers to exhibit parallel, straight wealth expansion paths at any price vector Р?

A. Preferences admit indirect utility function of the Gorman form.
B. Preferences are heterogeneous.
C. Wealth is equally distributed among all consumers.
D. All consumers have preferences that are homothetic.
E. All consumers have identical preferences that are quasilinear with respect to the same goods.
Choose the correct answer from the options given below:

Correct Answer: (b) A, D & E Only
Solution:

Conditions that lead to parallel, straight wealth expansion paths. A wealth expansion path (also known as an income expansion path or Engel curve) traces the optimal consumption bundles as wealth (income) changes, holding prices constant.

For these paths two be parallel & straight, it implies that as wealth increases, all consumers increase their consumption of goods in the same proportions.

22. Which of the following game does not have any Nash Equilibrium?

Correct Answer: (c) Matching Pennies Game
Solution:

The matching Pennies Game does not have a Nash equilibrium in pure strategies.

It's a zero-sum game where two players choose either "Heads" or "Tails"
One player wins if the choices match, the other wins if they don't.
No pure strategy can be optimal because each player wants to outguess the other.
The only equilibrium is in mixed strategies, where ach player randomizes with 50% probability.
Conclusion - Matching Pennies has no pure strategy Nash equilibrium, only a mixed strategy equilibrium.

23. Match List-I with List-II

List-I (Concepts)List-II (Classifications)
A. Income elasticity greater than oneI. Substitute goods
B. Positive cross price elasticityII. Inferior goods
C. Downward sloping price consumption curve (PCC)III. Luxurious goods
D. Negative income effectIV. Relative elastic demand

Choose the correct answer from the options given below:

Correct Answer: (d) A-III, B-I, C-IV, D-II
Solution:
List-I (Concepts)List-II (Classifications)
A. Income elasticity greater than oneIII. Luxurious goods
B. Positive cross price elasticityI. Substitute goods
C. Downward sloping price consumption curve (PCC)IV. Relative elastic demand
D. Negative income effectII. Inferior goods

24. Arrange the following countries in descending order based on their current account balance as a percent of GDP in the period Q2 FY 25 as per the Economic Survey 2024-25.

A. India
B. Russia
C. China
D. U.K.
E. South Africa
Choose the correct answer from the options given below:

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

Based on the Economy Survey 2024-25 the countries by current account balance as a % of GDP in Q & FY 25.

CountryCurrent Account Balance (% of GDP)Notes
China2.1% of SurplusStrong export performance & manufacturing resilience
Russia1.8% SurplusHigh energy exports & reduced imports amid geopolitical shifts
India-1.2% deficitSupported by service exports & remittance
South Africa-2.0% deficitTrade in balance capital outflows impacted balance.
U.K.-3.5% deficitPersistent trade deficit & Weak export growth.

25. The idea of constructing poverty-weighted indices of growth is.

Correct Answer: (a) To give at least equal weight to all income groups in society.
Solution:

Poverty-weighted indices of growth are designed to measure economic growth by specifically considering how income gains are distributed, with a particular focus on the impact on lower-income groups & the poor.
Three indices-
1. Prioritize the poor- They intentionally assign more weight to income gains experienced by lowerincome groups, rather than giving equal weight to all income levels.

2. Promote inclusive growth- The aim's to ensure that economic growth is not only high in terms of overall output but also inclusive & equitable, meaning its benefits are broadly shared occurs the population.

3. Inform policy making- They provided valuable insights for policymakers to asses whether economic growth is effectively reducing poverty and inequality or, conversely, exacerbating existing disparities.

26. Arrange the following crisis in chronological order (starting from oldest).

A. OPEC Oli Crisis
B. International Debt Crisis
C. East Asian Financial Crisis
D. Argentina Economic Crisis
E. Eurozone Crisis
Choose the correct answer from the options given below:

Correct Answer: (a) A, B, C, D, E
Solution:
CrisisYear
A. OPEC Oil Crisis1973 & 1979
B. International Debt Crisis1982
C. East Asian Financial Crisis1997
D. Argentinian Economic Crisis1999–2002
E. Eurozone Crisis2009 (onwards)

27. Arrange the following derivative markets in India in chronological order (starting from oldest to latest).

A. Commencement of trading in options on individual securities.
B. Introduction of interest rate futures.
C. Commencement of trading in Stock Futures.
D. Introduction of Futures trading based on the Index.
E. Commencement of trading in Index options.
Choose the correct answer from the options given below :

Correct Answer: (b) D, E, А, C, B
Solution:
Trading InstrumentDate
D. Introduction of Futures trading based on the Index12 June, 2000
E. Commencement of trading in Index options4 June, 2001
A. Commencement of trading in options on individual securitiesJuly 2, 2001
C. Commencement of trading in Stock FuturesNovember 9, 2001
B. Introduction of interest rate futuresJune 24, 2003

28. If Q = f (K, L) is a homogeneous production function of degree one, which of the following satisfies Euler's theorem?

Correct Answer: (b)
Solution:

29. Match List-I with List-I

List-I (Property)List-II (Formula)
A. β₂ for Chi-square distributionI. (n-2)
B. Skewness for Chi-square distributionII. 48n +12n²
C. Mode for Chi-square distributionIII. (12/n) +3
D. μ₃ for Chi-square distributionIV. √2/n

Choose the correct answer from the options given below:

Correct Answer: (e) (*)
Solution:
List-I (Property)List-II (Formula)
A. β₂ for Chi-square distribution(12/n) + 3
B. Skewness for Chi-square distribution√2/n
C. Mode for Chi-square distribution(n - 2)
D. μ₃ for Chi-square distribution48n + 12n²

30. If the income effect is in the opposite direction as the substitution effect, but the substitution effect dominates, then the good is_______.

Correct Answer: (b) Inferior but not giffen
Solution:

This means that as the price of the good decreases, consumers will buy more of it due to the substitution effect (buying more of the cheaper good), but less of it due to the income effect (feeling weathier & potentially consuming less of the good).
However, because the substitution effect is stronger, the overall impact is an increase in quantity demanded, which is characteristic of an inferior good.

* If the income effect is in the opposite direction as the substitution effect, but the substitution effect dominates, then the good is →
Inferior but not giffen.