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65IMP QUESTIONS

PART-12 BY- Gobind RawatPaper-2 (economics)

Don’t miss these Repeated questions

www.chanakyagroupofeconomics.com

1.in classical macro economics the money supply determined by prices.

2.According to classical economist decline in money wages and prices

will lead to high level of of employment and output.

3.Monetary policy is more effective when investment is interest elastic

and demand for money is interest inelastic.

4.In H-O theory Nation will export commodity

which is intensive in its relatively abundant factors

and intensive in its relatively cheap factor.

1.Giffen paradox occurs when income effect is negative and greater than

substitution effectwww.chanakyagroupofeconomics.com

6.Software industries in India is best example of parterz approach.

7.According to Keynes aggregate consumption is a function of current

disposable income.

8.In long run consumption function is linear and proration.(APC=MPC)

9.Permanent income depend partly on current income(Y1) and partly on

previous income.(Yo)

10 1.Absolute income hypothesis-1929-44

2.Relative income hyp.-1948

3.Permanent income hyp.-19578

4.Life cycle hyp-1950 www.chanakyagroupofeconomics.com

11.In Keynesian analysis – interest rate is determined by demand for and supply of

money.

12.In liquidity trap situation- people prefer to keep keep money in cash rather than

invest in bonds.

13.Tobin in his theory – liquidity preferences as behavior toward risk discuss

speculative demand for money.

14.Thus, the IS curve is the locus of those combinations of rate of interest and the

level of national income at which goods market is in equilibrium.


15.According to Keynes, demand for money to hold depends upon transactions

motive, precaution motive and speculative motive.

16.The LM curve tells what the various rates of interest will be at different levels

of income.

17.The lower the elasticity of liquidity preference for speculative motive with

respect to the changes in the rate of interest, the steeper will be the LM curve.

18.Monetary policy is perfectly ineffective when LM curve is horizontal.

20. Main feature of oligopoly market is - Interdependence


21.In Bertrand’s model adjustable variable is price not output

22.Finance commission was set up under article 280 in 1951.

F-C is a statutory body.

Finance commission was set up under article 280 in 1951.

F-C is a statutory body.

23.The main task of 15TH F-C is-

“Strengthen cooperation federation improve the quality of public spending and help

protect fiscal stability.”


24. Harrod technical progress is labour augmenting or neutral.

25.Metzler state that- income distribution and imposing of tariff become favorable

to abundant factor and unfavorable to the scarce factor..

26..This theory is also known as –the effect of tariff on domestic prices.

27.Malthus was only classical to emphasized importance of demand for

determination of output.

28.C-D production function is linear homogenous production function.

Sum of exponent is equal to 1. α + β=1

29.CES assume –elasticity of substitution is constant but not equal to one.

30.Arther Lewis developed his theory utilization of surplus manpower in

1950.

He wrote famous book- “economic development with unlimited supply of

labour”.

He focused on structural transformation of primary subsistence economy.

31.Gravity model of international trade is given by Jan Tinbergen in 1962,

it is used for bilateral context it take into account the distance among trading

Nations.

32.Time preference theory of interest given by Fisher.


33Cartels under oligopoly market aims to maximize Industry profit.

34.Slusky equation split between price, income and substitution effect.

35.First time extensive input output model is used in third five year plan.

36.Capital account of BOP include foreign loans, FDI, banking and other forms of

capital, borrowing but not private remittances.

37.Harrod domar production function is based on leontief production function.


38.A key property of AK model absence of diminishing returns with respect to

capital.

This theory assume constant saving rate

Is Saving rate is exogenously determined

39.In Pasinetti growth model interplay take place among profit rate distribution of

income, and economic growth

40.Logistic Curve depict the long run behaviour of population.


41.Coase theorem of environmental economics implies only a few people are

involved in production activity .

property rights are clearly recognized.

negotiation cost are low.

42.Purchase of government securities by RBI lead to increase money supply and

sale of Government Security by RBI will lead to reduce money supply in the

economy.

43.SLR can vary from 25 to 40% and CRR can vary from 3% Tu To 15%.

44.Deepak Parekh committee e related to financing the development of

infrastructure. www.chanakyagroupofeconomics.com

45.goilporia committee related with banking service improvements.

Rangarajan committee related with balance of payment.

Narsimham committee related with banking sectors improvement.

46.According to Kuznet APS remain stable and constant.

47.Coefficient of correlation is independent to change of origin and scale.

48.Budget incidence of government related with effect of both government

expenditure and taxes on distribution of income.


49.According to NFHS- 4 total fertility rate is 2.2 under 5 mortality rate is 50

infant mortality rate is 41 institutional birth 79 and MMR is 42.

50.Omkar Goswami Committee related with industrial sickness in India.

Arjun Sengupta committee related with Public Sector enterprise autonomy

Rakesh Mohan committee related with infrastructural development.

51.According to fisher and clerk theory sequence of development is

1. Agriculture 2.industry and 3. service.

52.According to Verdoons law, long and productivity grows proportionately to

the square root of output growth


53.The following books and their authors

Capitalism and freedom written by Milton friedman.

Argumentative Indian written by Amrita Sen.

The Rise and fall of nations written by Ruchi Sharma .

I do what I do written by Raghuram Rajan.

54.According to Robinson Uzawa theorem steady state growth is possible if the

technical progress is both Hicks and Harrod neutral

55.Leibenstein in his theory critical minimum effort the population is income

depressing.


56.Exceptions of H-O theory of International Trade given by both

leontief Paradox and Linder hypothesis.

57.Keynes- interest is monetary phenomenon.

Fisher- interest is a non monetary phenomenon

Classical- interest is real phenomenon

Wicksell rate of interest is what monetary and non monetary

phenomenon

58.Keynes developed monetary theory “theory of interest”.He considered output, employment, and interest rate as a monetary phenomenon

59.Keynes combined the value theory of classical and his monetary theorythrough theory of output.

60.Acc. To Keynes adjustment in BOP is possible through- income

61.Acc. To classical adjustment in BOP is possible through- deflation and

exchange depreciation.


62.Acc. To modern economist. adjustment in BOP is possible through-

income, output, and expenditure.

63.

T-test is used for test of significance of regression coefficient in regression

model.

64.F-test is used to the two independent estimation of population variance.

65.Testing of overall significance of regression by –F-test.

Test for the significance of the adjusted coefficient of multiple

determination is –F-Test.


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