Kerala SET 2019 Jul Question Paper _6_

A
19706 120 MINUTES
1. According to the second law of H .H. Gossen, the condition for consumer equilibrium is:
A) = B) =

C) > D) Both A & B are correct

Answer the questions 2-3 by considering the following table.

2. Suppose Mr. X has six Rupees at his disposal and he wants to spend on apples and
mangoes in order to obtain maximum total utility. Which of the following combination
will bring him maximum total utility?

Money Units (in Rs.) Marginal Utility of Apple Marginal Utility of Mango
1 8 6
2 7 5
3 6 4
4 5 3
5 4 2
6 3 1

A) Re.1 on Apple and Rs 5 on mangoes
B) Rs.3 on apple and Rs.3 on mangoes
C) Rs. 4 on Apple and Rs.2 on mangoes
D) Rs. 5 on apple and Re.1 on Mango

3. Considering the above table, which of the following two combinations give the same
total utility?
A) Rs 3 each on Apples and Mangoes & Rs.5 on Apples and Re.1 on Mango
B) Re.1 on Apple and Rs 5 on Mangoes & Rs.5 on Apples and Re.1 on Mango
C) Rs. 4 on Apple and Rs.2 on Mangoes & Rs.5 on Apple and Re.1 on Mango
D) Rs. 4 on Apple and Rs.2 on Mangoes & Rs 3 each on Apples and Mangoes

4. Let us suppose that the base year price index is for 2014=100. In the year 2018, national
product at current price was Rs.15000 cr and the price index was 120. National product
at constant price in the year 2018 would be:
A) 12500 cr B) 10000 cr C) 15000 cr D) 18000 cr

5. If the Keynesian consumption is C=a+by, autonomous consumption is 50, MPC =0.5
and the increased income is 200, find out the total consumption
A) 100 B) 150 C) 200 D) 300

6. Which of the following variable is termed as Solow residual in the Cobb-Douglas
production function, Q=ALα Kβ
A) β B) α. C) A D) K

7. Government of India in its Economic Survey tabled in July 2019 envisaged an
ambitious plan to transform Indian economy into a 5 trillion economy by 2024-25 for
which India needs a sustained real GDP growth rate of
A) 5% B) 5.6 % C) 7% D) 8%

8. Which of the following five year plan targeted the twin objectives of removal of poverty
and economic self reliance?
A) First B) Third C) Fourth D) Fifth

9. Which of the following is true about the comparative cost doctrine of David Ricardo?
I. Nation should specialize in the production of those commodities in which they
have comparative cost advantage
II. Nation should import the commodity in which absolute disadvantage is greater
III. Nation should import those commodities in which they have comparative
disadvantage
IV. Nation should import those commodities in which absolute disadvantage is less

A) I alone is correct B) I and II are correct
C) I, II and III are correct D) III and IV are correct

10. If a nation faces constant cost or MRT, the shape of its production possibility curve
should be:
A) Concave to the origin
B) Convex to the origin
C) A negatively sloped straight line
D) Either A or B

11. In a data table, row heading is designated as:
A) Caption B) Stub C) Head note D) Sub head

12. Which of the following is an example of averages of the second order?
I. Mean deviation II. Arithmetic mean
III. Standard deviation IV. Median

A) I alone is correct B) I and II are correct
C) I and III are correct D) I, II, III and IV are correct

13. “For goods that are unrelated in consumption, efficiency requires that tax rates be
inversely proportional to elasticities” this definition best explains:
A) The Ramsey rule B) Laffer curve
C) Bayer’s rule D) Musgrave hypothesis

14. Money is a “temporary abode of purchasing power “this definition comes under:
A) Conventional approach
B) Friedman’s Chicago approach
C) Gurley and Shaw Approach
D) Central bank approach

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15. Which of the following is true about M2 as a measure of money supply?
I. M2=Currency held by the public +net demand deposits of banks +other
deposits of the RBI+ savings deposits with post office savings bank
II. M2= M1+savings deposits with post office savings bank
III. M2= M1+net time deposits of banks
IV. M2= M1+currency held by the public

A) I alone is correct B) I and II are correct
C) II and III are correct D) I, II, III and IV are correct

16. Which one of the following is a non- marketable financial asset?
A) NSC B) Bonds C) Shares D) Equities

17. Two financial assets dealt in ISLM model are:
A) Bond and Equities B) Share and equities
C) Debentures and bonds D) Bond and money

18. In the Solow growth model, steady state exists when:
A) Investment and depreciation rates are equal
B) Rate of growth of investment is greater than rate of growth of depreciation
C) Rate of growth of depreciation is greater than rate of growth of investment
D) Depreciation per worker is zero

19. In the Arthur Lewis’ model, the capitalist surplus arises due to the fact that in the
capitalist sector marginal productivity of labour is:
A) Higher than subsistence wage
B) Equal to subsistence wage
C) Higher than capitalist wage
D) Less than efficiency wage

20. In India, core inflation denotes:
A) Inflation rate with food and fuel
B) Inflation rate without food items
C) Inflation rate without food and fuels
D) Inflation without food and beverages

21. Minimum Support Price (MSP) for minor forest products in India is declared by:
A) Ministry of Tribal Affairs
B) Ministry of Environment Forest and Climate change
C) Ministry of Consumer affairs
D) Commission for Agricultural costs and prices

22. The Hecksher-Ohlin theory predicts that international trade would results in:
A) Difference in factor prices between nations remain unchanged
B) Difference in factor prices between nations increases
C) Difference in factor prices between nations decreases
D) Difference in factor prices between nations sometimes increases, sometimes
decreases

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23. “At constant relative commodity prices, the growth of only one factor leads to an
absolute expansion in the output of the commodity using the growing factor
intensively and to an absolute reduction in the output of the commodity using the non
growing factor intensively” Identify the theorem
A) Hecksher- Ohlin theorem B) Rybczynski theorem
C) Metzler theorem D) Leontief Paradox

24. For a Giffen good, which of the following is true?
A) Substitution effect is negative
B) Income effect is negative
C) Income effect is greater than substitution effect
D) All of these

25. The equivalent of Income Consumption Curve (ICC) in producer’s equilibrium is called:
A) Price Consumption Curve B) Expansion path
C) Corner solution D) Iso-cost line

26. After the formation of the Customs Union, which of the static effect leads to an
increase in welfare?
A) Trade diversion B) Trade creation
C) Trade optimization D) Trade integration

27. Which one of the following is best defined as “it is the square root of the mean of the
squares of the deviations of all values of a series from their arithmetic mean.”
A) Harmonic mean B) Range
C) Quartile deviation D) Standard deviation

28. If the market rate of interest rises, the market price of bond may:
A) Remain unchanged B) Falls
C) Increases D) First increases then falls

29. Liquidity trap refers to a situation where, at a certain very low interest:
A) The speculative demand for money becomes perfectly elastic
B) The speculative demand for money becomes perfectly inelastic
C) The precautionary demand for money becomes perfectly inelastic
D) The precautionary demand for money becomes perfectly elastic

30. Match List I with List II and select the correct answer.
List 1 List II
a) Standard Deviation 1. Deviations may be taken from mean, median or mode
b) Mean deviation 2. Signs of deviation ( + or (−) ) are not ignored
c) Coefficient of variation 3. (SD)2
d) Variance 4. x100

A) a- 1, b-2, c- 4,d-3 B) a-2, b-1, c-4 , d-3
C) a-4, b-1, c-2, d-3 D) a-1, b-2, c-3, d-4

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31. “A circular constellation of forces tending to act and react one another in such a way as
to keep a poor country in a state of poverty” is called:
A) Abject poverty B) Vicious circle of poverty
C) Relative poverty D) Absolute poverty

32. Which among the following scheme is unrelated to energy sector?
A) UDAY B) DDUGJY C) UDAN D) PMUY

33. Which among the following is NOT a founding member of European Economic
Community (EEC)?
A) France B) Italy C) Belgium D) Spain

34. Match List I with List II and select the correct answer.
List 1 List II
a) Classical economists 1. Leon Walras & W S Jevons
b) Neoclassical economists 2. J Hicks & A Hansen
c) Keynesian economists 3.C Warburton & Anna Schwartz
d) Monetarists 4. Adam Smith & David Ricardo

A) a- 1, b-2, c- 3,d-4 B) a-4, b-3, c-2 , d-1
C) a-4, b-1, c-2, d-3 D) a-1, b-2, c-4, d-3

35. Zero –Based Budgeting (ZBB) means
I. Prepare a budget from the scratch
II. Unlimited financing
III. Preparing the budget by neglecting the history of expenditure

A) I alone is correct B) I. and II. are correct
C) I and III. are correct D) II and III are correct

36. If the MPK is ½ and MPL is 4, this means that:
A) Capital is more productive than labour
B) One unit of labour is 8 times more productive than one unit of capital
C) One unit of labour is 4 times more productive than one unit of capital
D) One unit of labour is 2 times more productive than one unit of capital

37. Which of the following law states “bad money drives out good?”
A) Okun’s law B) Gurley-shaw’s law
C) Gresham’s law D) Say’s law

38. The idea of ‘Creative destruction’ is associated with
A) J Schumpeter B) Amarthya Sen C) Debraj Ray D) J M Keynes

39. NIRD is situated at:
A) New Delhi B) Hyderabad C) Chennai D) Mumbai

40. The Stolper- Samuelson theorem examines the effects of:
A) Technology on factor productivity
B) Factor endowments in commodity prices
C) Trade and tariff on income distribution
D) Trade on economic growth

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41. In macroeconomics a ‘general glut’ refers to:
A) Lack of involuntary unemployment
B) Demand greater than supply
C) Income greater than expenditure
D) Excess supply over demand

42. The technique of combining two or more overlapping series of index numbers with
different base years into one with a common base year is called:
A) Splicing B) Interpolation C) Extrapolation D) Index mixing

43. In the short run production function, a rational producer would choose to produce at a
stage and point in which:
A) Stage I where MP and AP rises
B) Stage II where the MP and AP diminishing but positive
C) Stage III where MP and AP are negative
D) Stage II where AP falls and MP rises

44. High powered money in India refers to:
A) Commercials bank’s reserve with RBI
B) All loans and securities of banks
C) Dollar and other foreign currencies held by RBI
D) Currency that has been issued by the Government of India and RBI

45. An ‘Open consistency model’ of the fourth five year plan of India was designed by
A) Harrod and Domar B) P C Mahalanobis
C) A S Manne and Rudra D) K N Raj and Minhas

46. North- south divide among rich and poor countries are depicted by
A) Radcliff line B) Kuznets line
C) Brandt line D) Myrdal line

47. The System of National Accounts (SNA) is an internationally agreed standard for the
estimation of economic activity and national income, it was envisaged by:
A) The United Nations
B) International Bank for Reconstruction and Development
C) International Finance Corporation
D) The International Monetary Fund

48. Which among the following is the largest contributor of Green House Gases (GHGs) and
resultant global warming?
A) Carbon dioxide B) Nitrous oxide C) Methane D) CFCs

49. If a tariff that is imposed on the basis of percentage/proportion of the value of the
imported good is called:
A) Compound tariff B) Ad valorem tariff
C) Specific tariff D) Double column tariff

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50. The term Eurocurrency is best explained by:
I. It is the official currency of the European Union
II. Eurocurrency denotes short term borrowing also
III. If a Japanese company deposits Yen in a Canadian bank, then Yen will be
considered as Eurocurrency
IV. If an American company deposits Dollar in a Paris Bank, then dollar will be
considered as Eurocurrency

A) I alone is correct B) IV alone is correct
C) II and IVare correct D) II, III and IV are correct

51. Which of the following rule tells us that for achieving a desired number of targets require
an equal number of instruments?
A) Golden rule B) Tinbergen rule
C) Great rule of 70 D) Brandt Rule

52. Which among the following is a method of reducing inflation quickly?
A) Cold –Turkey method B) Keeping money supply method
C) Hot-Turkey method D) Snake in the tunnel method

53. Labour Bureau, Shimla for many decades, collecting Rural Prices from the same fixed
shops every month across India, is an example of:
A) Cross sectional data B) Panel data
C) Pooled data D) Time series data

54. Yi = β1 + β2Xi + Ui denotes:
A) Sample regression function
B) Population regression function
C) Nonlinear regression function
D) Dummy regression function

55. If the Cobb- Douglas production function is Q=A Lα Kβ, and the value of α=2 and β=1, then
A) Factor intensity is 2 and it is labour intensive
B) Factor intensity is 2 and it is capital intensive
C) Factor intensity is 0.5 and it is labour intensive
D) Factor intensity is 0.5 and it is capital intensive

56. Which of the following statement(s) is (are) correct?
I. When the MR of a firm becomes negative, this indicates that firm’s TR is
decreasing with output
II. If the AR curve is straight line then MR curve will also be a straight line
III. If the TR curve of firm is straight line passing through the origin; it indicates that
price is equal to MR
A) I only B) I and II Only C) I and III only D) I, II and III

57. Deflation is beneficial to:
I. Pensioners II. Equity holders
III. Salaried class IV. Debtors

A) I alone B) I and II C) I and III D) I, II, III and IV

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58 The types of luxury goods for which the quantity demanded increases as the price
increases
A) Veblen goods B) Snob effect
C) Bandwagon effect D) Giffen goods

59. In the case of Homoscedasticity, error terms having
A) constant variance B) Positive variance
C) positive mean D) Zero mean

60. The long run equilibrium condition for a firm and industry in a perfectly competitive
market is:
A) P=MR=SAC=LAC B) P=MR=lowest point on the LAC curve
C) P=MR=SMC=LMC D) All of these

61. Match List I with List II and select the correct answer.
List 1 List II
a) First order condition for the maximization of profit of a firm 1. TC cuts TR from above
b) Second order condition for profit maximization of a firm 2. MC should cut MR
from below
c) Firm is in equilibrium 3. MC=MR
d) Breakeven point of a firm 4. Total profit is
maximum

A) a- 1, b-2, c- 3,d-4 B) a-2, b-1, c-3 , d-4
C) a-3, b-2, c-4, d-1 D) a-4, b-3, c-2, d-1

62. Possible interpretation of the fitted equation model Cx = - 1.08 + 0.387 * income + ei
where Cx is the cost of x
I. Iincome has a significant positive influence on the estimated cost of x
II. Income has a significant negative influence on the estimated cost of x
III. As income increases by 10 per cent, cost of x increases by 3.8 per cent
IV. Intercept of the fitted model is (-) 1.08

A) I. alone is correct B) I and II are correct
C) II, III and IV are correct D) I, III and IV are correct

63. Adolf Wagner divided the public expenditure into two categories; they are:
I. Expenditure on internal and external security
II. Expenditure on culture and welfare
III. Expenditure on public works
IV. Expenditure on public distribution system

A) I. alone is correct B) I and II are correct
C) I and III are correct D) II and III are correct

64. If mean and median for certain asymmetric data is 23 and 24 respectively, then the
mode is:
A) 25 B) 24 C) 28 D) 26

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65. Which among the following is not a part of the five freedoms envisaged by Amarthya Sen?
A) Economic freedom B) Transactional freedom
C) Procedural freedom D) Creative freedom

66. The Rate at which the Scheduled banks can borrow funds overnight from RBI against
government securities:
A) MSF rate B) Repo rate
C) Reverse repo rate D) Base rate

67. Who among the following are the first women Managing Director and first woman Chief
Economist (Economic Counsellor) of IMF?
A) Michael Camdessus & Mrs Joan Robinson
B) Camille Gutt & Jacques Polak
C) Ivar Rooth & Gita Gopinath
D) Christine Lagarde & Gita Gopinath

68. Selection of units is based on a sample interval is
A) Stratified sampling B) Purposive sampling
C) Systematic sampling D) Cluster sampling

69. An international agreement to control greenhouse gases that went into effect in February
2005.
A) Montreal Protocol B) Sustainable Development Goal
C) Kyoto Protocol D) Millennium Development Goal

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70. If the determinant of a matrix = is 3, then:
A) = B) = −1 C) =1+2 D) = +1

71. Non- sampling errors occurs when
I. Select a sample that is too small to represent the population
II. Due to the definitional ambiguity of the investigator and the respondent
III. Due to mistakes committed by investigators while recording the data
IV. Pseudo-opinions given by respondents

A) I and II are correct B) II and III are correct
C) II, III and IV are correct D) IV alone is correct

72. The Naive behavior of the firms in Cournot model denotes
A) Each firm, while trying to maximize profit assumes, that its rival will keep its
output constant
B) Firms never learn from their past experiences
C) Each firm, while trying to maximize profit assumes, that its rival will increase its
output
D) Firms learn from their past mistakes.

73. Who is the author of the book “The Theory of Moral Sentiments”?
A) Recardo B) Prebisch C) Adam Smith D) Rodan

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74. Match list I with list II
List I List II
a) Brahmanada 1. Theory of low level equilibrium trap
b) Morris D Morris 2. PQLI
c) Nelson 3. Inverted ‘U’ hypothesis
d) Kuznet 4. Wage good model
5. HDI
A) a-4, b-2, c-1, d-5 B) a-3, b-2, c-4, d-1
C) a-4, b-5, c-1, d-3 D) a-4, b-2, c-1, d-3

75. Musgrave and Musgrave termed the impact point of tax as:
A) An economic incidence B) Tax incidence
C) Statutory incidence D) Social accounting

76. Which of the following statements are true about Ricardo’s growth model?
I. Ricardo’s production function is subject to increasing returns
II. Agriculture sector is subject to diminishing returns
III. Manufacturing sector is subject to increasing returns
IV. From a historical date onwards diminishing return of the agriculture sector
outweigh the increasing returns of the manufacturing sector

A) I and II are correct B) II and III are correct
C) II, III and IV are correct D) I and IV are correct

77. Which of the following pair is NOT correct?
A) Growth theory: An exposition –R M Solow
B) Why nations fail –A Lewis
C) Capital in the twenty first centuries –Thomas Piketty
D) The augmentative Indian – Amartya Sen

78. Match List I with List II and select the correct answer.
List I List II
a) ‘Ru Pay’ 1. Vijay Shekar
b) ‘Yono’ 2. Flipkart
c) ‘Phonepe’ 3. SBI
d) ‘PayTM’ 4. National Payments Corporation of India Limited

A) a-4, b-3, c-2, d-1 B) a-2, b-1, c-4, d-3
C) a-3, b-1, c-2, d-4 D) a-4, b-3, c-1, d-2

79. In India, the agriculture crop year begins every year in the month of:
A) July B) June C) April D) January

80. Which of the following is not an item of Official Reserve Assets of economies in general?
I. Gold holdings of the nation’s monetary authority
II. Nation’s Reserve position in the IMF
III. Special Drawing Rights
IV. Nation’s reserve position in WTO
A) II and IV are correct B) I and II are correct
C) II is correct D) IV is correct

10

81. According to the Marshall-Lerner condition, currency depreciation has no effect on a
country’s trade balance if the elasticity of demand for its exports plus the elasticity of
demand for its imports equals:
A) 0.1 B) 0.5 C) 1.0 D) 2.0

82. Government action to stabilize economic activity by stimulating it in a recession and
reducing it in an inflationary boom is known as:
A) Crowding out B) Zero budgeting
C) Fine -tuning D) Controlled expansion

83. The statistical relationship between unemployment rate and the growth rate of an
economy is associated with
A) Taylor principle B) Okun’s law
C) Phillips curve D) Kuznets law

84. In a Chi-square test to a contingency table of 4 rows and 4 columns, the degree of
freedom would be:
A) 9 B) 4 C) 16 D) 1

85. Multicollinearity is specific to:
I. Sample estimates II. Population estimates
III. Time series data IV. Pooled data

A) I, II, III. and IV are correct B) I,II and IV are correct
C) I, II and III are correct D) I, III and IV are correct

86. If each factor is paid equal to its marginal physical product, then the total value of the
product must get exhausted is called:
A) Autonomous behavior of Chamberlin
B) Euler’s theorem
C) Ricardian theory of distribution
D) Bennett’s theorem

87. Game in which the gains of one player are equal to the losses of the other player is known as:
A) Maxi-min strategy B) Pure strategy
C) Hog cycles D) Zero-sum game

88. In the case of UDCs
A) Backwash effect+ Spread effect
B) Backwash effect< Spread effect
C) Spread effect < Backwash effect
D) None of these

89. Which of the following growth model recognizes that economic growth depends on the
pattern of income distribution?
A) Kaldor’s model B) Lucas model
C) Harrod’s model D) Romer’s model

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90. Which of the following growth model suggests that instability problem of the Harrod can
be corrected by making capital and labour substitutable with each other:
A) Domar’s model B) Solow model
C) Arrow’s model D) Lewis model

91. National statistics day of India is celebrating on:
A) June 1 B) July 5 C) June 29 D) July 20

92. The Tarapore committee is related to:
A) Current Account Convertibility
B) Capital Account Convertibility
C) Insurance Sector Reforms
D) Banking Sector Reforms

93. The rate used to convert a stream of benefits and/or costs into its present value.
A) Discount rate B) Dividend
C) Intrinsic Value D) Rate of interest

94. The term used to describe a change in the pattern of trade in response to the formation of
customs union in which country begins to import from a less efficient supplier is:
A) Trade diversion B) Trade creation
C) Trade intensification D) Regional integration

95. When MPC is 0.8, the value of multiplier is
A) 0.5 B) 5 C) 0.05 D) 2

96. In India the powers of rural local self-governments have been formalized under the -------
amendment to the constitution
A) 73rd B) 74th C) 110th D) 75th

97. The profit-seeking monopolist operates at a level of output where
A) Price = MC B) MR = MC
C) MC = AC D) All of the above

98. The ‘Appiko movement’ was started in which of the following State of the Indian union:
A) Kerala B) Madhyapradesh
C) Gujarat D) Karnataka

99. Moral hazards refers to:
A) Illegal behavior of insurers induced by insurance policies
B) Illegal behavior insurance companies to cheat its customers
C) Insurance induced behavior that makes the event ensured more likely to occur
D) Hazardous behavior of the insured and insurance companies

100. Economists associated with Shadow pricing are:
I. J Tinbergen II. EJ Mishan
III. H B Chenery IV. KS Kretchmer

A) I, and II only B) II and IV only
C) II and III only D) I, II, III and IV

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101. ‘There are some projects that appropriate more external economies than they create’
which Hirschman termed as
I. Convergent series II. Divergent series
III. Induced investment IV. Autonomous investment

A) I alone is correct B) I and II are correct
C) I and III are correct D) I and IV are correct

102. Which one of the following method is a surrogate market method for the valuation of an
environmental good?
A) Defensive expenditure method
B) Contingent valuation method
C) Choice experiments
D) Hedonic pricing method

103. Arrange the following districts of Kerala in the descending order of sex ratio based on
2011census
A) Pathanamithitta, Kannur, Alapuzha, Thrissur
B) Kannur , Alapuzha , Pathanamthitta, Thrissur
C) Thrissur, Pathanamthitta, Alapuzha, Kannur
D) Kannur, Pathanamthitta, Thrissur, Alappuzha

104. Which among the following statement/s is/ are correct?
Statement I -- The Life Cycle Hypothesis was developed by Albert Ando and Modigliani
Statement II -- The basic assumption of absolute income hypothesis is that current
consumption expenditure is a function of current real income.

A) Statement I is correct
B) Statement II is correct
C) Both statements are correct
D) None of the above

105. Small industrial Development Bank of India (SIDBI) is a development financial
institution in India, headquartered at
A) New Delhi B) Lucknow C) Mumbai D) Chennai

106. If it rains, a taxi driver can earn Rs 500 per day. If it is fair, he can lose Rs 50 per day. If
the probability of rain is 0.30 what is his expectation?
A) Rs 115 B) Rs 450 C) Rs 535 D) Rs 295

107. If the total cost function is C=8x3 + 3x2 - 6x +3, marginal cost is:
A) 11x2 +5x - 3 B) 24x2 + 6x +3
C) 24x2 + 6x – 6 D) 24x + 3

108. The revealed preference theory assumes
A) Single Ordering B) Weak Ordering
C) Double Ordering D) Strong Ordering

109. Market demand curve is positively sloped in the case of:
A) Band wagon effect B) Veblen effect
C) Snob effect D) Price effect
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110. Match List I with List II and select the correct answer.
List I List II
a) Travel cost method 1.Jordan Louviere
b) Choice Modeling 2.Wood and Trice
c) Contingent Valuation method 3.Ridker and Henning
d) Hedonic pricing method 4.Ciriacy-Wantrup

A) a-1, b-2, c-3, d-4 B) a-4, b-3, c-2, d-1
C) a-3, b-1, c-2, d-4 D) a-2, b-1, c-4, d-3

111. Primary deficit is:
A) Fiscal deficit – interest payment
B) Fiscal deficit + interest payment
C) Fiscal deficit + revenue deficit
D) Fiscal deficit – Revenue deficit

112. The service tax was introduced in India in
A) 1993 B) 1998 C) 1994 D) 2000

113. If a monopolist offers a 10% discount to students for his product and charging others the
market price, it is a case of:
A) First degree price discrimination
B) Second degree price discrimination
C) Third degree price discrimination
D) Fourth degree price discrimination

114. Which of the statement(s) is / are the draw backs of CPI?
I. It is based on whole sale price only so it fails to reflect true cost of living
II. It fails to reflect the substitution of goods by typical consumers so that it fails to
reflect the real cost of living
III. It is an index of typical goods and typical consumers so that it fails to reflect the
real cost of living
IV. It fails to reflect the changes in the quality of goods so that it fails to reflect the
real cost of living

A) I only B) II, III & IV only
C) I, III & IV only D) I and IV only

115. Match List I with List II and select the correct answer.
List I List II
a) Indian Statistical Institute 1. M N Roy
b) Expenditure tax 2. Raja Chelliah
c) Tax reforms 3. P C Mahalanobis
d) People’s plan 4. Nicholas Kaldor

A) a-4, b-3, c-2, d-1 B) a-3, b-1, c-2, d-4
C) a-3, b-4, c-2, d-1 D) a-4, b-3, c-1, d-2

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116 India’s rank according to Human Development Report-2018:
A) 133 B) 130 C) 135 D) 129

117. Maruthi Suzuki in its Pune plant, it was observed that the probability of a defective
engine is (0.1) ( assumes binomial distribution) what will be the mean and standard
deviation for the distribution of defective engine in a total of 400 ?
A) 40 and 6 respectively B) 6 and 40 respectively
C) 100 and 400 respectively D) 4 and 40 respectively

118. In the Harrod’s growth model , if the Actual growth rate (G) is less than the Warranted
growth rate (Gw), then the economy may experiences:
I. Inflation II. Deficiency of demand
III. Over production IV. Recession and depression

A) I alone is correct B) II and III are correct
C) I, II and III are correct D) II, III and IV are correct

119. A value of 1 in Gini index represents:
A) Low inequality B) Maximum inequality
C) Average inequality D) 1% inequality

120. The Non -Accelerating-Inflation Rate of Unemployment (NAIRU) denotes:
A) The employment rate when inflation is zero
B) The rate of unemployment when inflation is zero
C) The rate of unemployment when fiscal policy is effective
D) Same as the rate of structural unemployment.

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