MAHA SET 2015 Question Paper 2 Economics

Test Booklet No.
F
ECONOMICS
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2

Economics
Paper II

II
Time Allowed : 75 Minutes] [Maximum Marks : 100
Note : This Paper contains Fifty (50) multiple choice questions. Each question
carries Two (2) marks. Attempt All questions.
(50) (2)

1. In case of positive cross-elasticity, 1.
price consumption curve would
be :
(A)
(A) Upward sloping
(B)
(B) Downward sloping
(C)
(C) Horizontal straight line
(D)
(D) Vertical straight line
2. Monetary policy will be more 2.
effective in Keynesian macro-
economic equilibrium if speculative
demand for money responds :
(A)
(A) Weakly to change in interest
rate
(B)
(B) Strongly to change in interest
rate
(C)
(C) Does not respond at all to
interest rate
(D) Only when interest rate is above (D)
a threshold level
3 [P.T.O.

3. Real burden of tax is equal to : 3.

(A) Disutility in parting with
(A)
purchasing power

(B) The amount of money paid as

tax (B)

(C) The amount of tax as proportion

of income
(C)
(D) Increase in disposable income

4. The income elasticity of demand for
(D)
imports is equal to :

(A) The marginal propensity to 4.

import

(B) The average propensity to
(A)
import
(B)
(C) The marginal propensity to

import divided by the average (C)

propensity to import

(D) The average propensity to
(D)
import minus the average

propensity to export
4

5. Which sector contributes the highest 5.
share in gross domestic savings at

present ?
(A)
(A) Public sector
(B)
(B) Government sector
(C)
(C) Private corporate sector
(D)
(D) Domestic sector

6. According to Marx, main source of 6.

capital accumulation under

capitalism is :
(A)

(A) Constant capital
(B)
(B) Variable capital
(C)
(C) Savings by the workers
(D)
(D) Savings by the farmers
7.
7. Arithmetic Mean of deviations is :
(A) 1
(A) 1

(B) –1
(B) –1

(C) 0 (C) 0

(D) (D)

5 [P.T.O.

8. Differential attitude to risk of 8.
individuals plays an important role

in .............

(A) Transaction demand for money

(B) Quantity theory of money (A)

(C) Precautionary demand for
(B)
money
(C)
(D) Portfolio choice theory of money

9. Which of the following is not an (D)

objective of the National Food
9.
Security Mission ?

(A) Sustainable increase in

production of rice, wheat and (A)
pulses

(B) Restoring soil fertility and
(B)
productivity at individual farm

level

(C) Promoting use of bio-pesticides
(C)
and organic fertilizers

(D) Creation of employment

opportunities (D)

6

10. Bhandari Committee was related 10.

to .................... .

(A) The entry of private units in (A)
telecommunication sector

(B) The reorganization of Railway (B)
zones
(C)
(C) The reconstruction of RRBs
(D)
(D) The reforms in oil sector

11. Which one of the following is the 11.
correct cause of demographic
dividend in India ?
(A)
(A) Falling dependency ratio
(B)
(B) Increasing urbanization process
(C)
(C) Increasing dependency ratio

(D) Falling birth and death rates (D)

12. Who among the following 12.
economists, developed the ‘Theory of
Circular Causation’ ?
(A)
(A) G. Myrdal
(B)
(B) R. Nurkse

(C) J.R. Hicks (C)

(D) J. Robinson (D)

7 [P.T.O.

13. Who was the Chairman of the 13.
Commission on Centre-State
Relations ? (A)
(A) Justice R.S. Sarkaria (B)
(B) K.N. Raj (C)
(C) L.K. Jha (D)
(D) Wanchoo 14.
14. The marginal propensity to import
is defined as :
M
(A)
M X
(A)
X X
(B)
X Y
(B)
Y M
(C)
M Y
(C)
Y M
(D)
M Y
(D)
Y 15.
15. Return to human capital is part of
money demand function of :

(A) Baumol (A)

(B) Tobin (B)

(C) Friedman (C)

(D) Keynes (D)

8

16. The area which lies under the 16.
demand curve for a given good
measures : (A)
(A) Marginal utility (B)
(B) Total utility (C)
(C) Disutility (D)
(D) Marginal cost of production 17.
17. Keynes’s speculative demand for
money suggests that if everybody
expects price of bond to rise
tomorrow, then speculative demand
for money curve will be : (A)
(A) Perfectly inelastic (B)
(B) Unit elastic (C)
(C) Perfectly elastic (D)
(D) Vertical
3
18. C = 20 + Y,
18. If the consumption function is given 4
3
by C = 20 + Y, then the value of
4
multiplier will be.....................
4
(A)
4 3
(A)
3
1
1 (B)
(B) 4
4
(C) 4 (C) 4

(D) 5 (D) 5
9 [P.T.O.

19. Which one of the market forms is 19.
associated with kinked demand
curve faced by a firm ?
(A)
(A) Monopoly
(B)
(B) Perfect competition
(C)
(C) Oligopoly
(D)
(D) Monopolistic competition
20.
20. In Keynesian consumption function,
the property shows :

(A) MPC = APC (A) =

(B) MPC < APC
(B) <
(C) MPC > APC

(D) APC = zero
(C) >
21. At present, the number of recognized
central trade union is 12. Which of
the following trade unions continues (D) =
to be largest among all 12 trade 21.
unions in India ?

(A) Hind Mazdoor Sabha (HMS)

(B) Centre for Indian Trade Unions (A) (HMS)
(CITU)
(B) (CITU)
(C) All India Trade Union Congress
(C)
(AITUC)
(AITUC)
(D) Bhartiya Mazdoor Sangh
(BMS) (D) (BMS)

10

22. The sum of 50 observations is 500, 22.
the sum of squares of observations
is 6000 and their median is 12.
Then the coefficient of skewness will
be :
(A) –2.34
(A) –2.34
(B) +3.34
(B) +3.34
(C) –1.34
(C) –1.34
(D) +2.34
(D) +2.34
23.
23. The development process under
capitalism has been described as
‘Creative destruction’ by :
(A)
(A) Karl Marx
(B)
(B) A.N. Hansen
(C)
(C) R. Luxemburg

(D) J. Schumpeter (D)

24. If buoyancy coefficient of a tax is 24.

greater than unity, it indicates
.................... in the tax structure.

(A) Built in flexibility (A)

(B) Built in stability (B)

(C) Built in elasticity (C)

(D) Built in accountability (D)
11 [P.T.O.

25. The tariff that maximises a country’s 25.

welfare is :

(A) Prohibitive tariff (A)

(B) Effective tariff (B)

(C) Optimum tariff (C)

(D) Protective tariff (D)

26.
26. In simple money multiplier formula,

if deposits rise by 100 and the target

increase in money supply is 500,

cash reserve ratio should be ........
(A) 30%
(A) 30%
(B) 50%
(B) 50%
(C) 25%
(C) 25%
(D) 20%
(D) 20%
27.
27. Long-run normal price is that which

is likely to prevail :

(A) All the times
(A)
(B) In market period (B)

(C) In short-run period (C)

(D) In long-run period (D)
12

28. Match the following and choose the 28.
correct answer from the codes given
below :
I
List I
(a)
(a) Inflation-unemployment trade
off (b)

(b) Portfolio balance approach (c)
(c) Multiplier-accelerator inter-
(d)
action
II
(d) Quantity theory of money
(1)
List II

(1) James Tobin (2)

(2) A.W. Phillips (3)

(3) Irving Fisher (4)
(4) Paul Samuelson

Codes :
(a) (b) (c) (d)
(a) (b) (c) (d)
(A) (1) (3) (2) (4)
(A) (1) (3) (2) (4)
(B) (2) (1) (3) (4)
(B) (2) (1) (3) (4)

(C) (1) (2) (4) (3) (C) (1) (2) (4) (3)

(D) (2) (1) (4) (3) (D) (2) (1) (4) (3)

13 [P.T.O.

29. The cost assigned to factors of 29.

production that the firm neither

hires nor purchases is called :

(A) Social cost
(A)
(B) Opportunity cost
(B)
(C) Economic cost
(C)
(D) Imputed cost
(D)
30. Under Lead Bank Scheme the lead
30.
bank were asked to adopt ..........

(A) Village
(A)
(B) Town
(B)
(C) District
(C)
(D) State
(D)
31. If cov(X, Y) = X Y, then ‘r’ will be
31. cov(X, Y) = X ‘r’
equal to :

(A) 1 (A) 1

(B) 0 (B) 0

(C) –1 (C) –1

(D) (D)
14

32. Government’s capital expenditure 32.
falls as a result of :

(A) Primary deficit (A)
(B) Fiscal deficit
(B)
(C) Budget deficit
(C)
(D) Revenue deficit
(D)
33. Devaluation can improve the
33.
balance of payments only when the
sum of elasticity of demand for
imports and elasticity of demand for
exports is :

(A) Equal to one (A)

(B) Greater than one (B)

(C) Smaller than one (C)
(D) Zero
(D)
34. Classical investment theory
34.
advocates normally all of the
following, except :
(A)
(A) Perfect competition
(B)
(B) Absence of externalities

(C) A living wage (C)

(D) A state of general equilibrium (D)

15 [P.T.O.

35. In case money wage rate does not 35.

grow in proportion to inflation rate,

the long-run Phillips curve will be :

(A) Vertical (A)

(B) Horizontal
(B)

(C) Steeper than short-run curve
(C)
but not vertical

(D) Flatter than short-run curve
(D)
but not vertical

36. Normal profits are considered
36.
as :

(A) Explicit costs
(A)

(B) Implicit costs
(B)

(C) Social costs (C)

(D) Private costs (D)

16

37. Which rural sector is not included 37.

in ‘Bharat Nirman Yojana’ ?

(A) Irrigation (A)

(B) Water supply (B)

(C) Education (C)

(D) Telephone (D)

38. Which one of the following 38.

economists stated that the

advancement of international trade

will have adversities to a developing

country ?
(A)
(A) Ricardo
(B)
(B) Adam Smith

(C)
(C) Karl Marx

(D) R. Prebisch (D)

17 [P.T.O.

39. Upper turning point and lower 39.

turning point are used in the

business cycle model of :

(A) Hicks (A)

(B) Samuelson (B)

(C) Kaldor
(C)

(D) Goodwin
(D)

40. For perfect complementarity
40.
between X and Y :

(A) MRTSXY
(A) MRTSXY will be zero

(B) MRTS XY MRTSYX
(B) MRTS XY and MRTSYX both

will be zero

(C) MRTSXY will be constant (C) MRTSXY

(D) MRTSYX will be constant (D) MRTSYX

18

41. In simple Keynesian output 41.

determination model, to the right of

equilibrium point we have :
(A)

(A) Aggregate demand is more than

aggregate supply
(B)
(B) Aggregate demand is less than

aggregate supply

(C)
(C) Aggregate demand is constant

(D) Aggregate supply is constant (D)

42. The slope of price line is given by 42.

the ......................

(A) Taste and preferences of the
(A)
consumer
(B)
(B) Prices of both the commodities

(C)
(C) Price of commodity X alone

(D) Price of commodity Y alone (D)

19 [P.T.O.

43. Which state has maximum branches 43.

of public sector commercial banks at

present ?
(A)
(A) Uttar Pradesh
(B)
(B) Maharashtra
(C)
(C) Karnataka
(D)
(D) Gujarat
44.
44. Lorenz curve is a graphic method

of studying :
(A)
(A) Correlation
(B)
(B) Index numbers
(C)
(C) Averages
(D)
(D) Dispersion
45.
45. The concept of the ‘reserve army of

labour’ is due to :

(A) Karl Marx (A)

(B) David Ricardo (B)

(C) Adam Smith (C)

(D) J.S. Mill (D)

20

46. A public good is : 46.

(A) A good that the public must pay (A)
for

(B) Non-rival in consumption
(B)
(C) More costly than a private
(C)
good
(D)
(D) Paid for by the government
47.
47. Grants from the centre to the states
under the recommendations of
Finance Commission are known as :
(A)
(A) Plan grants
(B)
(B) Development assistance
(C)
(C) Statutory grants
(D)
(D) Discretionary grants
48.
48. Which of the following is true in case
of a positively skewed curve ?

(A) mean has the lowest value (A)

(B) mode has the highest value (B)

(C) mean has the highest value (C)

(D) mode has a value more than (D)

median
21 [P.T.O.

49. The general equation of the budget 49.

constraint line is :

(A) PXQX + PYQY = M (A) PXQX + PYQY = M

(B) PX/M = QX (B) PX/M = QX

(C) PXQX + QX = M (C) PXQX + QX = M

(D) PX + QX = M (D) PX + QX = M

50. Which of the following transactions 50.

is a debit in the Current Account ?

(A) The export of merchandise (A)

(B) The export of services (B)

(C) A gift to a foreigner (C)

(D) A gift from a foreigner (D)

22

ROUGH WORK

23 [P.T.O.

ROUGH WORK

24