APPSC MATERIAL

Tuesday, October 19, 2010

APPSC GROUP-2 INDIAN ECONOMY QUESTIONS

1. The Laffer Curve explain the relationship between which of the following?
(a) Tax rates and tax revenue
(b) Tax rates and employment
(c) Tax rates and income
(d) Tax rates and government expenditure
Ans. (a)

2. What does an increase in the ratio of revenue deficit to gross fiscal deficit indicate?
(a) An increase in investment
(b) An increase in the utilization of borrowed funds for revenue purposes
(c) An increase in the utilization of borrowed funds for imports
(d) An increase in the utilization of borrowed funds for lending
Ans. (b)

3. If in a year, the gross fiscal deficit of government is Its. 3,00,000 crores, revenue deficit is Rs. 1,50,000 crores and interest payments are Rs. 80,000 crores, which is the primary deficit of the government in the year?
(a) Rs. 23,000 crores
(b) Rs. 45,000 crores
(c) Rs 70,000 crores
(d) Rs. 2, 20,000 crores
Ans. (d)

4. Which of the following may not be considered as a merit of the opportunity cost theory over the Ricardian theory of comparative cost?
(a) It takes into account two or more factors of production instead of labour theory of value
(b) It takes into account the possibilities of trade under all the laws of production, instead of constant costs only as in the Ricardian theory
(c) The theory provides a theoretical framework for general equilibrium approach
(d) The theory considers the welfare point of view neglected by the Ricardian theory
Ans. (b)

5. Which one of the following statements is correct?
The Heckscher-Ohlin theory states that the most important cause of trade is the difference in:
(a) preferences
(b) technology
(c) magnitude
(d) factor endowments
Ans. (d)

6. Which one of the following statements is correct? The Leontief Paradox makes
(a) a critical analysis of Haberler theory of opportunity cost
(b) an empirical study of factor-price equalization theory of Samuelson
(c) an empirical testing of Mills theory of reciprocal demand
(d) an empirical testing of Heckscher-Ohlin theory of international trade
Ans. (d)

7. What is the theory that opening a country to world markets gives an opportunity to utilize unemployed and underemployed resources known as?
(a) Ricardian theory
(b) Heckscher-Ohlin theory
(c) Vent-for surplus theory
(d) Strategic trade theory
Ans. (c)

8. Which of the following are the basic components of typical IMP stabilization programme?
A. Liberalization of foreign exchange.
B. Devaluation of the official exchange rate.
C. A comprehensive anti-inflation programme.
D. General opening-up of the economy to international commerce including foreign
investment.
Select the correct answer using the code given below:
(a) A and C
(b) B and D
(c) A, C and D
(d) A, B, C and D
Ans. (d)

9. Which one of the following best characterizes the Bretton Woods System of exchange rates?
(a) Adjustable fixed exchange rates
(b) Fixed e rates
(c) Adjustable pegged exchange rates
(d) Pegged, exchange rates
Ans. (b)

10. Which of the following is the highest form of economic integration among different nations?
(a) Custom Union
(b) Free Trade Area
(c) Economic Union
(d) Common Market
Ans. (c)

11. Which one of the following explains balance-of-payment adjustment mechanism under the gold standard?
(a) Devaluation
(b) Flexible exchange rates
(c) Income-adjustment mechanism
(d) Price-specie flow mechanism
Ans. (d)

12. Which one of the following statements is not correct?
(a) The distinction between expenditure switching and expen4iture changing was propounded by FL U. Johnson
(b) The Absorption Approach to BOP was developed by Sydney Alexander
(c) The Elasticity Approach to BOP was associated with Stolper – Samuelson
(d) Stability condition in the foreign exchange market is known as Marshall – Lerne condition
Ans. (c)

13. In the Balance-of-Payment Account, the transfer payments are included in which one of the following?
(a) Current account
(b) Service account
(c) Capital account
(d) Official reserves account
Ans. (a)

14. Which of the following is not a non-tariff barrier?
(a) Voluntary export restraint
(b) Health and product standards
(c) Environmental protection laws
(d) Ad-valorem duties
Ans. (d)

15. Which one of the following statements is correct?
The production possibility curve under increasing
opportunity cost is
(a) concave to the origin
(b) convex to the origin
(c) a straight line parallel to the x – axis
(d) a straight line parallel to the y – axis
Ans. (a)

16. Match List -I (Terms of Trade) with List- II (Explanation) and select the correct answer using the codes given below the lists:
List-I List-II
(Terms of Trade) (Explanation)
A. Gross barter terms of trade 1.The ratio between the quantity of a country’s
imports and exports
B. Income terms of trade 2. (Index of export prices)
x (export quantity)
Index of import prices

C. Single factoral terms of trade 3. Obtained by multiplying the commodity terms of
trade by an index of productivity
changes in domestic export industries
4. The ratio of a country’s export price index to its
import price index
Code:
A B C
(a) 3 4 1
(b) 1 2 3
(c) 3 2 1
(d) 1 4 3
Ans. (b)

17. Under which one of the following fundamental assumptions, Solow was able to show that steady state growth was possible and stable?
(a) Flexible JVL ratio
(b) Flexible S/Y ratio
(c) Constant growth-rate of population
(d) Constant rate of technical change
Ans. (a)

18. Match List -I (Concept) with List -II (Explanation) and select the correct answer using the codes given below the lists:
List-I List- II
(Concept) (Explanation)

A. Vicious circle of poverty 1. Massive increase in investment to initiate economic
development in LDC’s
B. Balanced growth 2. A stagnant low level of investment
C. Big push 3. Simultaneous investment in all inter-related industries
Code:
A B C
(a) 2 3 1
(b) 1 2 3
(c) 2 1 3
(d) 1 3 2
Ans. (a)

19. Who among the following developed the Wage-Goods model?
(a) M. Dobb
(b) A. K. Sen
(c) Vakil and Brahmananda
(d) P C. Mahalanobis
Ans. (c)

20. Using Flarrod-Domar growth equation. What is the rate of growth of a closed economy with C/Y = 3/4and AK / ÀY = 3 where, C = consumption, Y =output, K =

capital?
(a) 8.66%
(b) 8.50%
(c) 8.33%
(d) 7.50%
Ans. (c)

21. Match List -I (Economist) with List– II (Concept/Theory) and select the correct answer using the codes given below the lists:

List- I List-II
(Economist) (Concept/Theory)
A. Ragner Nurkse 1. Backwash effects
B. Paul N. Rosenstein Rodan 2. Theory of balanced growth
C. Gunnar Myrdal 3. The big push theory
D. A.O. Hirschxnan 4. Theory of unbalanced growth
Code:
A B C D
(a) 2 1 3 4
(b) 4 3 1 2
(c) 2 3 1 4
(d) 4 1 3 2
Ans. (c)

22. Match List I (Property of -a Plan) with List II (Model Used) and select the correct answer using the codes given below the lists:
List -I List -II
(Property of a Plan) (Model used)
A. Feasibility 1. Input-output model
B. Consistency 2. Linear programming
C. Optimality 3. Harrod- Domar type
Codes:
A B C
(a) 1 2 3
(b) 3 1 2
(c) 2 3 1
(d) 1 3 2
Ans. (b)

23. What is the technical progress that increases the productivity of labour (L) proportionately more than the productivity of capital (K) and results in an increase in L/K at constant relative factor prices, called?
(a) Labour saving technical progress
(b) Natural technical progress
(c) Wage saving technical progress
(d) Capital-saving technical progress
Ans. (d)

24. Match List I with List I and select the correct answer using the codes given below the lists:
List-I List -II
A. Aggregate Growth Model 1. Western models as applied to the
situation of developing countries
B. Multi-sector Growth Model 2. Analysis of growth in terms of inter-
dependence of sectors
C. Harrod-Domar Growth Model 3. Deals with the entire economy by
examining a set of important macro
variables
D. The False Paradigm Model 4. For a specific growth-rate and a given
capital output ratio, the required rate of
domestic investment is determined
Codes:
A B C D
(a) 4 2 3 1
(b) 3 1 2 4
(c) 3 2 4 1
(d) 4 3 1 2
Ans. (c)

25. Consider the following statements:
Lewis’ model of development with unlimited supplies of labour will fail to work to the full extent if:
A. there is no disguised unemployment in the traditional sector.
B. modem sector wages do not remain constant up to the point that surplus labour is exhausted.
C. investment in the modern sector is labour-saving.
Which of the statements given above is/are correct?
(a) A only
(b) A and B
(c) B and C
(d) A, B and C
Ans. (c)

26. Which one of the following models explains the paradox pertaining to the rural-urban migration in the context of rising urban employment?
(a) Lewis model
(b) Todano model
(c) Solow model
(d) Mahalanobis model
Ans. (b)

27. The Mahalanobis model was developed for which of the following plans?
(a) First Five Year Plan
(b) Second Five Year Plan
(c) Third Five Year Plan
(d) Fourth Five Year Plan
Ans. (b)

28- What is the correct sequence of the following approaches to development in terms of their chronological emergence?
A. Basic needs approach.
B Per capita income approach.
C. Human development index approach.
Select the correct answer using the codes given below:
(a) A, B, C
(b) B, A, C
(c) B, C, A
(d) A, C, B
Ans. (b)

29. On which of the following grounds is increasing inequality justified in initial stages of development?
(a) It puts greater incomes in the hands of those who have greater average propensity to consume
(b) It puts greater incomes in the hands of those who have greater average propensity to save
(c) It puts greater incomes in the hands of those who have greater marginal propensity to consume
(d) It puts greater incomes in the hands of those who have greater marginal propensity to save
Ans. (a)

30. Which of the following is meant by growth in the context of growth and development?
(a) Growth of gross national product in money terms
(b) Growth of per capita income in money terms
(c) Growth of gross national product in real terms
(d) Growth of per capita income in real terms
Ans. (c)

31. What is the ratio between the price of a country’s export goods and price of its import goods known as?
(a) Single factoral terms of trade
(b) Double factoral terms of trade
(c) Net barter terms of trade
(d) Income terms of trade
Ans. (c)

32. The two gaps in a two-gap model refer to which of the following?
A. Revenue expenditure gap
B. Saving investment gap
Select the correct answer using the codes given below:
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)

33. Which of the following is not a characteristic of indicative planning?
(a) The government sets targets for all sectors of the economy including those dominated by private enterprises
(b) The emphasis is on consistency of the targets with each other
(c) Given the consistency of targets with each other, the government directs the private enterprises to attain those targets
(d) The government provides the right incentives to the private sector to attain the targets
Ans. (b)

34. If median and mode of a set of observations are 20.6 and 26 respectively, then what is the value of mean of the observation?
(a) 16
(b) 17.9
(c) 18.4
(d) 19
Ans. (b)

35. Lorenz curve enables one to study which of the following?
(a) Averages
(b) Dispersion
(c) Correlation
(d) Index numbers
Ans. (b)

36. Which one of the following is correct for a normal distribution?
(a) Standard deviation > Mean deviation> Quartile deviation
(b) Quartile deviation > Mean deviation > Standard deviation
(c) Mean deviation> Standard deviation > Quartile deviation
(d) Quartile deviation > Mean deviation > Standard deviation
Ans. (a)

37. Coefficient of correlation is independent of which of the following?
(a) Change of origin only
(b) Change of scale only
(c) Change of origin and scale
(d) None of the above
Ans. (c)

38. The Command Area Development Programme (CADP) has been renamed as which one of the following?
(a) Command Area Development and Water Management Programme
(b) Command Area Development and Forest Conservation Programme
(c) Command Area Development and Pollution Control Programme
(d) None of the above
Ans. (a)

39. Which one of the following indices satisfies both time reversal and factor reversal tests?
(a) Laspeyre’s index number
(b) Fischer’s index number
(c) Paasche’s index number
(d) Kelly index number
Ans. (b)

40. Which one of the following index numbers is based on geometric mean?
(a) Laspeyre’s index number
(b) Fischer’s index number
(c) Paasche’s index number
(d) Bowley’s index number
Ans. (b)

APPSC GROUP-2 INDIAN ECONOMY QUESTIONS

1. What does infant mortality rate refer to?
(a) The ratio of number of children who die before their fifth birthday out of every 1000 live births
(b) The ratio of number of children who die before their first birthday out of every 100 live births
(c) The ratio of number of children who die before their fifth birthday out of every 100 live births
(d) The ratio of number of children who die before their first birthday out of everyl000 live births
Ans. (d)

2. Which among the following is not a committed expenditure of the Government of India?
(a) Interest payments
(b) Pay and allowances
(c) Transfers to States and Union Territories
(d) Loans and advances to States and Union Territories
Ans. (d)

3. Consider the following statements:
A. Annual Survey of Industries (ASI) extends to the entire country
B. ASI covers all factories registered under Sections 2m (i) and 2m (ii) of the Factories Act 1948.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)

4. Who was the Chairman of the committee appointed in 2006 for setting out a roadmap towards fuller capital account convertibility?
(a) S.S. Tarapore
(c) C. Rangarajan
(d) M. Narasimham
(d) O.P. Sodhani
Ans. (a)

5. In which of the following years, was the trade balance favorable to India?
(a) 1970-71 and 1974-75
(b) 1972-73 and 1976-77
(c) 1972-73 and 1975-76
(d) 1971-72 and 1976-77
Ans. (b)

6. Consider the following statements:
A. The Fifth Economic Census was conducted by CSO in the year 2007.
B. Intelligent Character Recognition (ICR) technology is being used for detailed processing of the data collected in the Fifth Economic Census.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)

7. During which of the following years, average growth/rate (at constant prices) of agriculture and allied sectors negative?
(a) 2002-03
(b) 2003-04
(c) 2005-06
(d) 2006-07
Ans. (a)

8. Which of the following are the goals of Santa Shiksha Abhiyan (SSA)?
A. All children of 6-14 years age in school/EGS (Education Guarantee Scheme) Centre/bridge course by the year 2015.
B. Bridge all gender and social category gaps at primary stage by the year 2007 and at elementary education level by the year 2010.
C. Universal retention by the year 2020.
Select the correct answer using the codes given below:
(a) A and B
(b) B and C
(c) A and C
(d) A, B and C
Ans. (a)

9. Consider the following:
A. Kennedy Round of negotiations.
B. Uruguay Round of negotiations.
C. Tokyo Round of negotiations.
Which is the correct chronological sequence of the
above?
(a) A, B, C
(b) C, A, B
(c) A, C, B
(d) B, A, C
Ans. (a)

10. Why is demographic dividend likely to be manifested in India in future?
(a) Population in the age group between 8-15 years is likely to increase
(b) Population of children below 7 years is likely to increase
(c) Population in the age group of 15-64 years is likely to increase
(d) Population in the age group above 65 years is likely to increase
Ans. (c)

11. Which one of the following is not the target stipulated in the Tenth Five-Year Plan?
(a) Creating 50 million job opportunities
(b) Reduction in poverty ratio from 26 percent to 21 percent
(c) Reducing gender gaps in literacy and wages rates by 50 percent
(d) Doubling per capita income in 8 years
Ans. (d)

12. Consider the following items which are assigned weight in calculating wholesale price index in India
1. Primary articles
2. Fuel, power light and lubricants
3. Food products
4. Chemicals and chemical products
Which one of the following is the correct order of the above items in descending order in terms of their weight in the price index?
(a) 1-2-3-4
(b) 1-2-4-3
(c) 4-3-2-1
(d) 1-3-2-4
Ans. (b)

113. Consider the following components of financial saving of the household sector in India
1. Currency
2. Deposits
3. Shares and debentures
4. Insurance funds
Which one of the following is the correct order of the aforesaid items in descending order in terms of their contribution to the financial saving of the household sector in the year 2005-06?
(a) 1-2-3-4
(b) 2-1-3-4
(c) 2-4-1-3
(d) 4-2-l-3
Ans. (b)

14. What is the approximate share of SSIs in gross industrial value added in the Indian economy?
(a) 25%
(b) 30%
(c) 40%
(d) 45%
Ans. (d)

15.Consider the following sectors, contributing to India’s real GDP during the year 2005-06:
1. Agriculture and allied activities
2. Industry
3. Construction
4. Community social and personal services
Which one of the following is the correct descending order in respect of their contribution?
(a) 1-4-3-2 .
(b) 1-2-4-3
(c) 3-4-2-1
(d) 3-2-1-4
Ans. (c)

16. The 12th Finance Commission has recommended to bring down the revenue deficit of the centre and states to zero by which year?
(a) 2006- 07
(b) 2007- 08
(c) 2008- 09
(d) 2009 -10
Ans. (c)

17. In which of the following years, the share of FIL (net) flows into Indian economy was the highest?
(a) 1999-2000
(b) 2000-01
(c) 2003-04
(d) 2004-05
Ans. (d)

18. Among different items of import of capital goods to India during the year 2005-06, which one of the following was the highest in the value terms ?
(a) Machine tools
(b) Electronic goods including computer software
(c) Transport equipments
(d) Project goods
Ans. (a)

19. Among the items of export of agricultural and allied products from India during the year 2005-06, which one of the following was the highest in the value
(a) Tea
(b Coffee
(c) Rice
(d) Marine products
Ans. (c)

20. Consider the follow important sources of tax revenue for the Central Government
1. Corporation tax
2. Taxes on income other than corporation tax
3. Union excise duties
4. Service tax
Which one of the following is the correct order of the aforesaid taxes in descending order in terms of their yield as proposed in the Union Budget 2006-07?
(a) 1-2-3-4
(b) 1-3-2-4
(c) 2-3-1-4
(d) 4-2-3-1
Ans. (b)

21. The Twelfth Finance Commission has recommended States’ share in the divisible pool of taxes at what percentage?
(a) 26.5 percent
(b) 28.5 percent
(c) 29.5 percent
(d) 303 percent
Ans. (c)

22. Consider the following statements about the National Agricultural Insurance Scheme (NAIS):
1. The scheme has been implemented from Rabi 1999-2000 season.
2. The scheme is availab1a non-loanee farmers only.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(c Neither 1 nor 2
Ans. (a)

23. In the total deployment of gross bank credit, which one of the following sectors had the maximum share as in March, 2006?
(a) Agriculture and allied activities
(b) Services
(c) Personal loan
(d) Trade
Ans. (a)

24. As per use-based classification, which one of the following sectors had recorded highest growth in the year 2005-06?
(a) Basic goods
(b) Capital goods
(c) Consumer goods
(d) Intermediate goods
Ans. (b)

25. In which one of the following years, the National Food Processing Policy was formulated?
(a) 2003
(b) 2004
(c) 2005
(d) 2006
Ans. (c)

26. Consider the following statements:
Accelerated Irrigation Benefit Programme (AIBP) was modified in the year 2004 to provide
1. the central assistance in the form of 70 percent loan and 30 percent grant for non-special category states.
2. the central assistance in the form of 10 percent loan and 90 percent grant for special category states.
3. the central assistance in the form of conversion of the loan to grant if projects are completed on schedule.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 3
(c) 2 and 3
(d) 1, 2 and 3
Ans. (d)

27. The Command Area Development Programme (CADP) has been renamed as which one of the following?
(a) Command Area Development and Water Management Programme
(b) Command Area Development and Forest Conservation Programme
(c) Command Area Development and Pollution Control Programme
(d) None of the above
Ans. (a)

28. Consider the following statements:
A. The coverage of Integrated Child Development Programme is limited and often the youngest children in the 0-3 year age group get left out of its ambit.
B. According to ICMR, at any given time, 7-15% of Indian children suffer from mental disorder
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (b)

29. Which group of infrastructure industry has the highest gap in targets and achievements of production during the year 2006-07?
(a) Fished Steel
(b) Crude Petroleum
(c) Power
(d) Fertilizers
Ans. (a)

30. The National Horticulture Mission (NHM) has aimed at doubling the horticultural production. For this, the target year is
(a) 2010
(b) 2011
(c) 2012
(d) 2015
Ans. (c)

31 Consider the following agreements:
A. ISLFTA. (India -Sri Lanka Free Trade Agreement).
B. SAFTA (South Asia Free Trade Area).
C. CECA (Comprehensive Economic Co-operation Agreement between India and Singapore).
D. SAPTA (South Asia Preferential Trade Area).
Which one of the following is the correct chronological sequence of the above agreements?
(a) A, C, B, D
(b) D, A, B, C
(c) B, A, D, C
(d) A, B, C, D
Ans. (a)

32. Which region of India has the lowest Thermal Plant Load Factor (PLF) for thermal power generation in the year 2006-207?
(a) Northern
(b) Western
(c) North-Eastern
(d) Southern
Ans. (c)

33. Consider the following statements:
A. Varsha Bima, the rainfall insurance scheme, is managed by the Agricultural Insurance Company of India Ltd. (ATCIL).
B. The scheme was introduced during the 2007 south-west monsoon period.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (a)

34. Thx on Banking Cash Transactions (withdrawals) over a certain threshold in a single day w introduced in the Union Budget of which year?
(a) 2002-03
(b) 2004-05
(c) 2005-06
(d) 2006-07
Ans. (c)

35. Who among the following has suggested migration to accrual accounting system from cash based accounting system in India?
(a) I.V. Reddy
(b) R.H. Patil
(c) D.N. Ghosh
(d) C. Rangarajan
Ans. (c)

36. In which of the following years was the tax revenue as a percentage of GDP the lowest?
(a) 2002-03
(b) 2003-04
(c) 2004-05
(d) 2005-06
Ans. (a)

37. Which one of the following is the proportion of rain-fed agriculture to the net sown area in India?
(a) 40%
(b) 50%
(c) 60%
(d) 72%
Ans. (a)

38. Consider the following statements about industrial relations on the basis of Economic Survey:
A. There was a constant decline in the number of strikes and lockouts during 2000-OS in India.
B. The maximum number of strikes and lockouts in the year 2006 were experienced by Kerala, followed by Tamil Nadu and West Bengal.
Which of the statements given above is/are correct?
(a) A only
(b) B only
(c) Both A and B
(d) Neither A nor B
Ans. (a)

39. What is a strategy which makes an all-out effort to provide the masses of people in India access to basic facilities such as health, education, clean drinking water, etc., termed as?
(a) Inclusive growth strategy
(b) Exclusive growth strategy
(c) Rapid growth strategy
(d) Balanced growth strategy
Ans. (a)

40. Which of the following sectors has the largest percentage share in India’s total exports for the period April 2006 October 2007?
(a) Chemicals and related goods
(b) Engineering goods
(c) Gems and jewellery
(d) Textiles including readymade garments
Ans. (b)

41. It Which sector has attracted highest FDI inflows during the period from August 1991 to September2006 (in % share)?
(a) Services sector
(b) Electrical equipments
(c) Telecommunications
(d) Transportation industry
Ans. (b)

42. Which one of the following statements is correct?
(a) External Debt / GDP ratio has declined consistently after the year 2003
(b) External Debt / GDP ratio has fluctuated after the year 2003
(c) External Debt/GOP ratio has increased after the year 2003
(d) External Debt/GDP ratio has remained constant after the year 2003
Ans (a)

43. NSSO regularly collects rural retail prices on monthly basis from selected markets for compilation of Consumer Price Index Number. Which one of the following is the correct pair of samples collected for the purpose?
(a) 403 villages and 39 urban centers
(b) 503 villages and 49 urban centers
(c) 603 villages and 59 urban centers
(d) 703 villages and 69 urban centers
Ans. (c)

44. Which one of the following is not proposed in the approach paper to the 11th Five Year Plan as important new social interventions?
(a) Provide freedom and resources to select institutions so that they attain global standards by the year 2011-12.
(b) Grant old age pension to the widows, handicapped and deserted and separated women.
(c) Ensure adequate representation of women in• elected bodies, State Legislatures, and the Parliament.
(d) Provide emergency obstetrics care facilities within 2 hours travel from every habitat.
Ans. (d)

45. Which of th€ following statements pertaining to the strategy to raise agricultural output during the 11th Five Year Plan, are correct?
A. Double the rate of growth of irrigated area.
B. Improve water management, rain water harvesting and watershed development.
C. Provide easy access to credit at affordable rates.
Select the correct answer using the codes given below:
(a) A and B
(b) B and C
(c) A and C
(d) A, B and C
Ans. (a)

46.. With one area of infrastructure is not included in Bharat Nirman Scheme (2005-09)?
(a) Irrigation
(b) Rural roads
(c) Rural health
(d) Rural housing
Ans. (c)

47. Which of the following is/are not monitorable target(s) for the 11th Five Year Plan?
A. Accelerate growth rate of GDP to 10% by the end of the plan and then maintain it in the 12th Five Year Plan.
B. Double per capita income by 201647.
C. Create 20 million new work opportunities.
Select the correct answer using the codes given below:
(a) A only
(b) B only
(c) C only
(d) B and C
Ans. (c)

APPSC GROUP-2 INDIAN ECONOMY QUESTIONS

1. Prebisch-Singer thesis enunciates which of the following?

1. International trade has been operating as a mechanism of international inequalities and has, therefore, retarded the development of less developed countries.

2. The strategy of import substitution as a means to achieve self-sufficiency in industrial production, has led to ma! allocation of resources and a very bad effect on industrial productivity.

Select the correct answer by using the code given below

(a) l only

(b) 2 only

(d) Neither 1 nor 2

Ans. (a)

2. If the supply of a commodity is very inelastic in the exporting country and demand for the same is fairly elastic in the importing country, the imposition of tariff will have which one of the following?

(a) A very large protective effect

(b) No protective effect at all

(d) A very small protective effect

Ans. (a)

3. If an Indian exporter exports to Bangladesh Rs. 50,000 worth of goods payable in three months, the balance of payment for India will show which one of the following?

(a) Current account credit goes up and capital account debit also goes up by Rs. 50,000 each

(b) Current account credit goes down and capital account debit goes up by Rs. 50,000 each

(d) Current account credit goes up and capital account debit goes down by Rs. 50,000 each

Ans. (d)

4. Devaluation makes Balance of Payments worse in the short-run and then improves it in the long-run. What is this phenomenon known as?

(a) Marshall -Lerner condition

(b) J-curve effect

(d) Backwash effect

Ans. (b)

5. Which one of the following is considered as non-debt creating foreign investment inflow?

(a) External assistance

(b) Foreign direct investment

(d) Commercial borrowings

Ans. (b)

6. Exchange rates are kept same in all the parts of market by using which one of the following?

(a) SDRs

(b) Arbitrage

(d) Speculation

Ans. (b)

7. An over-valued currency in the foreign exchange market

will have which one of the following impacts in India?

(a) Make imports costlier and exports cheaper

(b) Will ha4e no effect on cost of imports

(d) Make imports cheaper and exports costlier

Ans. (d)

8. The inflationary impact of the inflow of foreign capital in

India is neutralized by the Reserve Bank of India by which

one of the following methods?

(a) Permitting outflow of foreign exchange

(b) Sale of securities in the open market

(d) Permitting depreciation of Indian rupee in the foreign exchange market

Ans. (b)

9. Which one of the following is the correct sequence in the process of economic integration between different countries?

(a) Common market—Free trade area—Custom union— Economic union

(b) Free trade area—Custom union—Common market— Economic union

(d) Common market—Free trade area—Economic union— Custom union

Ans. (b)

10. Under Gold Standard, how can a surplus in a country’s balance of payments be eliminated?

(a) By inflow of gold and a rise in general price level

(b) By outflow of gold and a rise in general price level

(d) By outflow of gold and a fall in general price level

Ans. {d)

11. Which one of the following governs the theory which brings parity with respect to convertibility of currency into gold content?

(a) Mint parity of exchange

(b) Special Drawing Rights

(d) Multiple exchange rate

Ans. (a)

12. In order to reduce the balance of payment deficits of the member countries, which one of the following schemes was introduced by the World Bank in 1980?

(a) Buffer stock loans

(b) Supplementary loans

(d) Gold loans

Ans. (c)

13. Special Drawing Rights (SDRs) introduced by the IMP are in which form?

(a) Gold

(b) Both silver and gold

(d) Book-keeping entry only

Ans. (d)

14. Which one of the following does not constitute a part of the jurisdiction of WTO?

(a) Trade related tariff and non-tariff barriers

(b) Trade related intellectual property rights

(d) Regional trade agreements

Ans. (d)

15. Assertion (A) A balance of payments deficit is always and every where a monetary phenomenon.

Reason (R): A balance of payments deficit cannot be corrected through changes in money supply

Codes:

(a) Both A and R are individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (c)

16. Which one of the following is not a component of foreign aid of a country?

(a) Bilateral grant

(b) Multilateral grant

(d) Commercial borrowing

Ans. (d)

17. What is the assumption that economic growth will percolate down to all sectors, known as?

(a) Dispersal theory

(b) Trickle down theory

(d) Decentralized growth theory

Ans. (b)

18. In plan models, which type of model is generally used to check consistency among various sectors?

(a) Harrod -Domar model

(b) Input-output model

(d) Solow model

Ans (b)

19. Consider the following A dual economy implies

1. the existence of domestic and export markets.

2. modern industry and commercial agriculture co-existing with subsistence farming and traditional handicrafts.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans. (b)

20. Theory of linkages is most appropriate for which kind of development models?

(a) Balanced growth models

(b) Unbalanced growth models

(d) One sector growth models

Ans. (b)

21. With which one of the following is backward bending supply curve usually associated.

(a) Land

(b) Labour

(d) Organisation

Ans. (b)

22. Which one of the following is the correct expression for the actual rate of growth (g)?

(a) g = s/c

(b) g = s x c

(d) g =

Where s = the ratio of saving to income

c = actual incremental capital- output ratio

Ans. (a)

23. Inverted-U hypothesis of Kuznets is associated with movement of which one of the following?

(a) Consumption inequality

(b) Wealth inequality

(d) Tax inequality

Ans. (c)

24. Match List-I with List-II and select the correct answer by using the code given below the lists:

List-I List -II

(Model) (Proposition)

A. Marxist model of economic development 1.Give importance to

non-economic variables

B. Harrod-Domar growth model 2. Flexible capital-output ratio is assumed

C. Solow’s growth model 3. Productive capacity is equal to

aggregate demand

D. Kaldor’s growth model 4. Structural Mal –adjustment in a

growing economy

Code:

A B C D

(a) 4 2 3 1

(b) 1 3 2 4

(d) 1 2 3 4

Ans. (c)

25. Which one of the following is a component of disequilibrium mentioned often in the context of trade and development?

(a) Revenue gap

(b) Savings-investment gap

(d) Expenditure gap

Ans. (b)

26. The Feldman – Mahalanobis growth model, which one of the following strategies is followed?

(a) Emphasize the consumer goods first and then the investment goods

(b) Emphasize the investment goods first and consumer goods later

(d) Put emphasis on foreign trade only

Ans. (c)

27. Consider the following sectors:

1. Electrical Equipments

2. Service Sector

3. Food Processing Industries

4. Metallurgical Industries

Which one of the following is the correct sequence in ascending order in terms of their share in attracting FDI inflows in India?

(a) 4-3-2-1

(b) 1-2-3-4

(d) 1-2-4-3

Ans. (a)

28. What is the major underlying assumption of efficiency wage models?

(a) Labour productivity depends on level of nutrition

(b) Labour productivity is independent of number of labourers -

(d) Capital and labour productivities are equal

Ans. (b)

29. How is ‘Path dependency defined as?

(a) A condition of the past affecting the past situation

(b) A comparatively fast path of progress of economy

(d) A slow path of progress of the economy

Ans. (c)

30. What are the sufficient conditions for operation of stage theories of growth?

1. Well-integrated commodity and money markets.

2. Highly developed transport facilities

3. Well-trained workforce and an efficient bureaucracy

4. Existence of a federal structure.

Select the correct answer by using the codes given below

(a) 1, 2, and 4

(b) 2, 3, and 4

Ans. (d)

31. What is the correct sequence of the Marxian stage theory of growth?

1. Slavery

2. Primitive Communism

3. Socialism

4. Communism

5. Feudalism

6. Capitalism

Select the correct answer by using the codes given below

(a) 1—2—3—4—5—6

(b) 2—1—5—6—3—4

(d) 2—1—5–6—4—3

Ans. (b)

32. Capital fundamentalism refers to which one of the following?

(a) Capital structure of a country

(b) Accelerated capital accumulation for development

(d) Growth of capital expenditure

Ans. (b)

33. To make meaningful international comparisons of income and living standards, which one of the following is most appropriate?

(a) A measure of purchasing power parity

(b) A measure of per capita income

(d) An index of infrastructure development

Ans. (a)

34. If the Paasche’s index is 196 and Fishers’ index is 210, what is the value of the Laspeyre’ index?

(a) 220

(b) 215

(d) 230

Ans. (c)

35. consider the following statements

The coefficient of correlation.

1. is not affected by a change of origin and scale.

2. lies between —a and + ct

3. is a relative measure of linear association between two or more variables.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3

(d)1, 2 and 3

Ans. (c)

36. In a certain distribution, the following results were obtained

X = 45, Median = 48, Coefficient of skew ness = — 0.3.

What is the value of standard deviation?

(a) 20

(b) 25

(d) 30

Ans. (d)

37. The first quartile derived from set of observations is 27 and its quartile deviation is 17. What is its third quartile?

(a) 59

(b) 61

(d) 57

Ans (b)

38. What is a cumulative percentage curve called?

(a) Frequency density curve

(b) Ogive curve

(d) Frequency polygon

Ans. (b)

39. Assertion (A) : Fisher’s index number is an ideal one.

Reason (R) : In the Fisher’s index number, the upward bias of Laspeyre’s index and downward bias of Paasche’s index are balanced to a great extent.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true -

Ans. (c)

40. Match List-I with List-II and select the correct answer using the code given below the lists:

List –I List-II

(Type of Unemployment) (Associated Fact)

A. Frictional Unemployment 1.Non-availability of job

B. Structural Unemployment 2. Marginal productivity is zero

C. Seasonal Unemployment 3. Use of obsolete technology for production

D. Disguised Unemployment 4. Population pressure on land

Code:

A B C D

(a) 4 2 1 3

(b) 1 3 4 2

(d) 1 2 4 3

Ans. (b)

41. According to the 60th Round of NSSO Survey on Employment and Unemployment, unemployment rate on current daily status basis (number of person days per 1000 person days) was highest for which one of the following categories?

(a) Rural male

(b) Rural female

(d) Urban female

Ans. (a)

42. Which one of the following committees was set up to review the concept of poverty line?

(a) S. Chakravarty Committee

(b) D.T, Lakdawala Committee

(d) R.C. Dust Committee

Ans. (b)

43. Which one of the following countries has the highest life expectancy at birth?

(a) Pakistan

(b) India

(d) Sri Lanka

Ans. (d)

44. According to Census-2001 data, what is the urban population as percentage of total population of India?

(a) 23.3%

(b) 25.7%

(d) 28.9%

Ans. (c)

45. Which category of the target groups is not included in the SHG bank linkage programme for micro-finance to agriculture?

(a) Unemployed non-agricultural labourers

(b) Agricultural and non-agricultural labourers

(d) Artisans and craftsmen

Ans. (a)

46. Consider the following components of money supply in India

1. Currency in circulation.

2. Banker’s deposits with the RBI

3. Other deposits with the RBI

4. Demand deposits of banks

Which of the above are the components of Reserve Money?

(a) l and 3

(b) l, 2 and 3.

(d) 2, 3 and 4

Ans. (B)

47. Consider the following statements for Indian Millennium Deposits (IMDs) scheme.

1. The scheme was launched by the Reserve Bank of India.

2. It was intended for NRIs and resident Indians both.

3. The tenure of IMDs was 5 years.

Which of the statements given above is/are correct?

(a) 3 only

(b) 2 only

(d) 2 and 3

Ans. (a)

48. Consider the following statements in respect of the Tenth Plan

1. This plan has specific monitorable targets in respect of poverty.

2. Decline in incremental capital-output ratio is to be achieved through creating new capacities.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans. (a)

49. In which of the following y was the highest growth of general index of industrial production in India registered?

(a) 2001-02

(b) 2002-03

(d) 2004-05

Ans. (d)

50. Growth rate in NNP at factor cost (at constant prices) has been highest during which Five-Year Plan?

(a) Ninth Plan

(b) Eighth Plan

(d) Fifth Plan

Ans. (b)

APPSC GROUP-2 INDIAN ECONOMY (MACRO ECONOMICS) QUESTIONS

1. Assertion (A): An oligopolist faces demand curve which has a kink at the level of the prevailing price.

Reason (R): The segment of the demand curve above the prevailing price level or kink is highly inelastic and the segment of the demand curve below the prevailing price level is elastic.

Codes:

(a) Both A and R are individually true and. R is the correct explanation of A

(b) Both A and It are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (c)

2. Consider the following statements relating to marginal rate of technical substitution (MRTS).

1. The MRTS in case of an isoquant measures the rate at which one input is substituted for the other.

2. The M of input X for input Y at a point on an isoquant is equal to the positive slope of the isoquant at that point.

3. The MRTS equals to the ratio of the marginal product of input V to the marginal product of input X.

Which of the statements given above are correct?

(a) 1 and 2

(b) 2 and 3

(d) 1, 2 and 3

Ans. (c)

3. When is an isoquant L – shaped?

(a) When the two factors are complementary

(b) When the two factors are perfect substitutes

(d) When the two factors are imperfect substitutes

Ans. (c)

4. A firm’s average total cost is Its 60, its average variable cost is Rs. 55 and its output is 50 units. What is its total fixed cost?

(a) Less than Rs. 200

(b) Between Rs. 200 and Rs. 300

(d) Firm has no fixed cost

Ans. (c)

5. Under constant returns to scale, which one of the following is the nature of the long -run average cost curve?

(a) Parallel to output axis

(b) Upward rising

(d) Identical to short-run average cost curve

Ans. (a)

6. In the figure shown below, MN and QR are two straight line demand curves parallel to each other.

Consider the following statements

1. The slope and elasticity of demand is same on the demand curves MN and QR, at the price P0

2. The slopes are same but elasticity of demand is more on demand curve MN than demand curve QR, at price

3. Elasticities of demand are same but slope of demand curve MN is less than that of QR at the price P

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) 2 and 3

Ans. (b)

7. When the negative income effect is greater than substitution effect, it is the case of which one of the following?

(a) Giffen goods

(b) Inferior goods

(d) Normal goods

Ans. (d)

8. Which one of the following statements is correct?

Consumption possibility frontier is same as

(a) the indifference curve

(b) the budget line

(d) the demand curve

Ans. (b)

9. Which one of the following statements is not correct?

(a) Normal goods have a positive income elasticity of demand

(b) Inferior goods have a negative income elasticity of demand

(d) Luxury goods have an income elasticity of demand that is equal to one

Ans. (d)

10. A firm has certain initial equilibrium price, when demand function QD = 50 — 3P and supply function is 20 + 3P. If the firm’s demand function is shifted to C = 68 — 3P, what is the initial equilibrium price and the new equilibrium price, respectively?

(a) 5 and 6

(b) 5 and 8

(d) 8 and 5

Ans. (b)

11.Cournot model assumes which of the following?

1. There are two firms operating in the market.

2. The firms face a kinked demand curve.

3. Each firm acts on the assumption that their competitors

will not react to her decision to change output.

Select the correct answer by using the code given below

(a)

(b) 2 and 3

(d)1, 2 and 3

Ans. (c)

12. Which one of the following statements is correct?

The Sweezy mode of oligopoly assumes that price elasticity of demand

(a) is higher for a price increase than for a price decrease

(b) is lower for a price increase than for a price decrease

(d) cannot change for a price decrease

Ans. (a)

13. Which one of the following statements is correct?

(a) Demand for factors of production is an independent demand

(b) Demand for factors of production is a derived demand

(d) Demand for factors of production is same as the demand for commodities

Ans. (b)

14. What is the principle which is applied to redress the imbalance between distribution and welfare, known as?

(a) Principle of taxation

(b) Compensation principle

(d) Principle of supply

Ans. (b)

15. The inconsistency of which one of the following criteria is labelled as Scitovsky Paradox?

(a) Little Criterion

(b) Pareto Criterion

(d) Kaldor Flicks Criterion

Ans. (d)

16. consider the following statements

The distribution of two commodities between two individuals is Pareto optimal if

1. one individual cannot be made better off without making the other worse off.

2. the individuals are on their consumption contract curve.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

Ans. (c)

17. What is maximizing the level of satisfaction with the given level of inputs and technology, called?

(a) Technical efficiency

(b) Allocative efficiency

(d) X- efficiency

Ans. (d)

18. Which one of the following statements is correct? An increase in money supply in Keynesian framework results in

(a) a higher level of income and a higher rate of interest

(b) a lower level of income and a lower rate of interest

(d) a lower level of income and a higher rate of interest

Ans. (c)

19. Which one of the following statements is correct?

A fall in the money supply results in the

(a) rightward shift in the IS curve

(b) rightward shift in the LM curve

(d) leftward shift in the LM curve only

Ans. (d)

20. Which one of the following statements is correct?

The IS function indicates the

(a) locus of the money market equilibrium

(b) locus of the commodity market equilibrium

(d) locus of both money and labour market equilibrium

Ans. (b)

21. Which one of the following statements is correct? According to Keynes, fresh investment would be possible only if

(a) the marginal efficiency of capital exceeds the rate of interest

(b) the marginal efficiency of capital is less than the rate of interest

(d) the marginal efficiency of capital is negative

Ans. (a)

22. Which one of the following statements is correct?

Autonomous investment is

(a) functionally related to interest rate

(b) functionally related to both income and interest rate

(d) independent of income and interest rate

Ans. (d)

23. Consider the following statements

1. The MPC is higher in a poor country and lower in a rich country.

2. Higher the MPC, higher will be the value of multiplier.

3. Lower the M lower will be the value of multiplier.

Which of the statements given above are correct?

(a) 1 and 2

(b) 1 and 3

(d) 1 2 and 3

Ans. (a)

24. Match List-I with List-II and select the correct answer by using the code given below the lists

List – I List -II

(Economist) (Concept)

A. A. C. Pigou 1. Liquidity Preference

B. J.M. Key 2. Real Balance Effect

C. J.R. Hicks-A.H. Hansen 3. Ratchet Effect

D. J.S. Duesenberry 4. IS-LM Analysis

Code:

A B C D

(a) 2 1 4 3

(b) 4 3 2 1

(d) 4 1 2 3

Ans. (a)

25.

In the diagram given above, which one of the following is indicated by the point A lying below the IS curve?

(a) Excess demand in the commodity market

(b) Excess supply in the money market

(d) Equilibrium income and interest

Ans (a)

26. In the. permanent income hypothesis of consumption, components ‘of which one pair has a proportional relationship?

(a) Permanent income and transitory income

(b) Permanent income and transitory consumption

(d) Transitory income and transitory consumption

Ans (c)

27. Which one of the following statements is correct? Crowding our in an economy can be avoided if

(a) government finances its expenditure by new money supply

(b) government finances its expenditure by taxes

(d) government finances its expenditure by raising cash reserve ratio

Ans. (c)

28. Which one of the following statement is correct?

According to Say’s law of market.

(a) demand creates its own supply

(b) supply creates its own demand

(d) demand and supply are never equal

Ans. (b)

29. Which one of the following statements in respect of the National Income Accounting is correct?

(a) Budget deficit is equal to savings-invest gap

(b) Budget deficit is more than savings-investment gap

(d) Budget deficit is always zero

Ans. (d)

30. Which of the following is/are included in National Income Accounting?

1. Purchase of shares and bonds.

2. Value of residential investment.

3. Value of production for self consumption.

4. Value of intermediate goods.

Select the correct answer by using the codes given below:

(a) l and 2

(b) 2 only

(d) 3 and 4

Ans. (c)

31. Consider the following statements

1. The equilibrium between the aggregate demand and aggregate supply may take place at a point of less-than-full employment in an economy.

2. The .size of deficient demand is inversely proportional to the deflationary gap.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2only

(d) Neither 1 nor 2

Ans. (a)

32. Assertion (A) : Gross National Product will always be more than the Gross Domestic Product.

Reason (R): To get Gross National Product, not factor income from abroad is added to Gross Domestic product

Codes:

(a) Both A and R are individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (d)

33. what is the empirically fitted relationship between the rate of change of money wages and rate of unemployment, known as?

(a) Baumal’s Hypothesis

(b) Keynesian Model

(d) Phillip’s Curve

Ans. (d)

34. In the simplified version of Friedman’s quantity theory of money, velocity of circulation of money depends on which of the following?

(a) Rate of interest and rate of price change

(b) Rate of interest and rate of change of income

(d) Rate of change of price and rate of: change of investment

Ans. (b)

35. Consider the following assets

1. Cash held by public

2. Equity shares of banks

3. Deposits of banks

4. RBI bonds

Which of the above assets are considered as part of money supply?

(a) 1 and 2

(b) 1 and 3

(d) 1, 3 and 4

Ans. (b)

36. which one of the following is stated by the quantity theory of money?

(a) An increase in the nominal money supply causes a proportional increase in the price level

(b) An increase in the real money supply causes a proportional increase in the price level

(d) An increase in the real money supply causes a proportional increase in real GNP

Ans. (a)

37. Consider the following statements

1. Bond price and interest rate are positively related.

2. Bond price and interest rate are negatively related.

3. Credit creation varies directly with Cash Reserve Ratio (CER).

4. Credit creation varies inversely with Cash Reserve Ratio (CRR).

Which of the statements given above are correct?

(a) 1 and 2

(b) 1 and 4

(d) 2 and 4

Ans. (d)

38. Suppose, due to an open market purchase of government securities, reserves in the commercial banks increase by Rs. 1,000. If the reserve ratio is 20 percent, what will be the increase in money supply?

(a) Its. 5,000

(b) Rs. 4,000

(d) Rs. 1,000

Ans. (c)

39. Which one of the following is not a component of demand-pull inflation?

(a) An increase in government expenditure with no change in tax rate

(b) A downward shift h savings function

(d) An upward shift of investment function

Ans. (c)

40. Assertion (A) Indirect taxes promote inequality in the distribution of income.

Reason (R): Poor bear more burden of indirect taxes.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (a)

41. which one of the following statements is correct?

According to Peacock and Wiseman, public expenditure grows

(a) steadily over a period of time

(b) at a. constant rate in relation to GNP

(d) at a lower rate in relation to GNP

Ans. (c)

42. As compared to traditional budgeting, in case of Performance and Programme Budgeting System (PPBS), which one of the following statements is correct?

(a) It stresses on outcome only

(b) It stresses on expenditure allocation only

(d) It stresses less on outcome and more on expenditure allocation

Ans. (c)

43. Which one of the following statements is coned?

Zero-base budgeting implies that

(a) it emphasizes physical targets rather than financial targets

(b) spending on all programmes is re-examined and justified each year rather than following add-on every year

(d) it focuses on centralization of expenditure

Ans. (b)

44. Which one of the following statements is correct?

The revenue from the imposition of an advolarem tax and that of a unit tax in a perfectly competitive market which results in the same price rise, are

(a) more for advolarem tax

(b) more for unit tax

(d) zero for both the taxes

Ans. (c)

45. in which one of the following groups of taxes, do impact and incidence of tax coincide?

(a) Income tax and corporation tax

(b) Income tax and excise duties

(d) Excise duties and sales tax

Ans. (a)

46. The concept of optional taxation, based on whatever criteria, has to. cover decision-making at which of the following levels?

1. The aggregate amount of taxations and its division between direct and indirect taxations.

2. The composition and rate schedules of direct and indirect taxes.

3. The composition and revenue schedules of indirect taxes.

4. The composition and revenue schedules of direct taxes.

Select the correct answer by using the code given below:

(a) 1 and 4

(b) 1 and 3

(d) 2, 3 and 4

Ans. (c)

47. According to Cohn Clark, what is taxable capacity?

(a) 20 percent of National income

(b) 25 percent of National Income

(d) 35 percent of National Income

Ans. (b)

48. Which one of the following is not the Canon of taxation as stated by Adam Smith?

(a) Canon of equality

(b) Canon of certainty

(d) Canon of productivity

Ans. (d)

49. Which curve shows that how much of its import commodity is required by a nation in exchange for various quantities of its export commodity?

(a) Offer curve

(b) indifference curve

(d) Production possibility curve

Ans. (a)

50. Which of the following is/are correct in respect of opportunity cost theory?

1. A straight line production possibility curve indicates constant opportunity cost.

2; The production possibility curve under increasing cost would be concave to the origin.

Select the correct answer by using the code given below:

(a) l only

(b) 2 only

(d) Neither 1 nor 2

Ans. (c)

APPSC GROUP-2 INDIAN ECONOMY QUESTIONS

The shift in the SS curve to S’S’ is due to an imposition of a tax.

Which of the following areas in the diagram shows excess burden of the tax?

(a) ODIY

(b) SDA

(d) CAD

Ans. (c)

2. Consider the following statements:

A. The number of firms is large both under perfect competition and monopolistic competition.

B. There is freedom of entry and exit in both perfect competition and monopolistic competition.

C. In both perfect competition and monopolistic competition, every firm is a price taker and quantity adjuster.

Which of the statements given above are correct?

(a) A, B and C

(b) B and C

(d) A and B

Ans. (d)

3. Match List I (Market Type) with List-II (Implication) and select the correct answer using the codes given below the lists:

List-I List-II

(Market Type) (Implication)

A. Perfect competition 1. Collusion of firms

B. Monopoly 2. Excess capacity

C. Monopolistic competition 3. Uniform price

D. Oligopoly 4. Blocked entry

Code:

A B C D

(a) 2 4 3 1

(b) 3 1 2 4

(d) 3 4 2 1

Ans. (d)

4. In the Kinked Demand Curve Model, suppose MC curve shifts upward in the discontinuous range of MR curve.

Which one of the following is correct? At equilibrium,

(a) price rises but quantity remains the same

(b) price and quantity both remain the same

(d) price and quantity both rise

Ans. (b)

5. Consider the following statements:

Short run profit is maximum under perfect competition when

A. second order condition is satisfied.

B. MC curve cuts MR curve from below.

C. MC curve cuts MR curve from above.

Which of the statements given above is/are correct?

(a) A and C

(b) A and B

(d) B only

Ans. (b)

6. Which of the following is not a necessary condition of perfect competition?

(a) Large number of firms in the industry producing homogeneous products

(b) Free entry and free exit of firms

(d) Absence of artificial restrictions by the government

Ans. (c)

7. Consider the following statements:

A. The shape of a unitary elastic demand curve is a rectangular hyperbola.

B. The shape of a perfectly elastic demand curve is a rectangular hyperbola.

C. Perfectly inelastic demand curve is parallel to the price axis.

D. Perfectly elastic demand curve is parallel to the quantity axis.

Which of the statements given above are correct?

(a) A and B

(b) A, C and D

(d) B and D

Ans (b)

8. Which one of the following statements is correct?

A straight line demand curve (cutting both the axis) is elastic

(a) throughout the length of the demand curve

(b) at the mid-point

(d) above the mid-point towards the price axis

Ans. (d)

9. Under perfect competition, supply curve is identified as which one of the following?

(a) Rising portion of marginal cost curve

(b) Rising portion of average total cost curve

(d) Portion of marginal cost above the average variable cost curve

Ans. (d)

10. Which one of the following is the correct sequence of magnitude of minima in ascending order in marginal cost (MC) curve, average cost (AC) curve and average variable cost (AVC) curve?

(a) MC, AVC, AC

(b) AVC, AC, MC

(d) AC, MC, AVC

Ans. (a)

11. Consider the following statements:

A. The vertical distance from average cost (AC) curve to average variable cost (%&VC) curve is average fixed cost (AEC).

B. AVC curve, AC curve and marginal cost (MC) curve are ‘U shaped.

C. AFC curve is horizontal to ‘X’ axis.

Which of the statements given above are correct?

(a) 1 and 2

(b) 2 and 3

(d) 1, 2 and 3

Ans. (a)

12. Short-run marginal cost of a firm does not contain any element of which of the following?

(a) Costs of raw materials

(b) Salaries of the managerial staff

(d) Cost of fuel for operating machines engaged in production.

Ans. (c)

13. Suppose a fisherman has a fishing net and a boat. He alone hunts fish in sea for which he has to pay no license fee etc. Fish, caught by him, will have which one of the following?

(a) Zero economic cost of production as he makes no out-of-pocket payment to anybody and is working of his own

(b) Negative economic cost of production because he enjoys fishing and has to make no payment

(c) Positive cost of production due to his sacrificing the opportunity of working elsewhere and renting out fishing net and boat etc

(d) Infinite cost of production

Ans. (a)

14. Income consumption line of the ‘Consumer Theory’ is analogous in ‘Production Theory’ to which one of the following?

(a) Expansion path

(b) Isoquant line

(d) Isocost line

Ans. (a)

15. Which of the following is not correct in respect of Cobb-Douglas production function?

(a) It was originally based on the empirical study of US manufacturing industry.

(b) It is a linearly homogeneous production function, taking into account two factors, labour and capital, for the entire output of the manufacturing industry.

(c) It tells us that output depends upon labour and capital, and that part of output which cannot be explained by labour and capital, is attributed to the residual.

(d) It is based on the assumption of operation of law of diminishing returns.

Ans. (d)

16. Which one of the following statements is correct? If the elasticity of substitution between two factors X and Y be zero, then it implies that for a given change in outputs,

(a) X and Y will always change by the same proportion

(b)Y changes but X remains the same

(d) X and Y both change necessarily by different proportion

Ans. (a)

17. Consider the following statements:

According to the law of variable proportions; total product is maximum when

A. marginal product becomes zero.

B. marginal product curve cuts average product curve from above.

C. slope of marginal product curve is zero.

D. tangent of the total product curve is parallel to the horizontal axis.

Which of the statements given above are correct?

(a) A and D

(b) C and D

(d) B and C

Ans. (c)

18. Assertion (A): The monopolist never operates on the portion of the demand curve which is inelastic. Reason (R) When elasticity of demand is less than unity MR is negative.

Ans (a)

19. Assertion (A): The Revealed Preference Hypothesis excludes the study of Giffin Paradox

Reason (R) Revealed Preference Hypothesis considers only negative income elasticity of demand whereas Giffin Paradox relates to positive elasticity of demand.

Ans. (c)

20. Assertion (A): Indifference curve for perfect substitute goods is a downward sloping straight line. Reason (R): For perfect substitute goods, MRS is falling.

Ans. (a)

21. Assertion (A): There is no excess capacity under monopolistic competition in the long run. Reason (R): The demand curve under monopolistic competition is downward sloping.

Ans. (d)

22. Assertion (A): M curve lies below the VMP curve under imperfect competition.

Reason (R): Under imperfect competition MR <>

Ans. (a)

23. Which of the following statements about Pareto Optimum are correct?

A. It changes with changes in the distribution of income.

B. At the Pareto Optimum, MRS in consumption = MRT in production.

C. It is not unique.

D. It is obtained under imperfect competition.

Select the correct answer using the codes given below:

(a) A and B

(b) A, B and C

(d) B and C

Ans. (b)

24. Match List- I (Economist) with List -II (Concept) and select the correct answer using the codes given below the lists:

List- I List -II

(Economist) (Concept)

A. Pareto 1. Compensation Principle

B. Hicks-Kaldor 2. Social Welfare Function

C. Bergson 3. Social Optimum

D. Scitovsky 4. Double Criterion Compensation

Code:

A B C D

(a) 3 1 2 4

(b) 2 4 3 1

(d) 2 1 3 4

Ans. (a)

25. Which one of the following statements is correct?

In a production process with two factors, land and labour, if the marginal productivity of land is negative, then it is in

(a) the stage I for land and stage II for labour

(b) the stage II for land and labour

(d) the stage I for labour and stage III for land

Ans. (b)

26. Which one of the following statements is correct?

The Engel Curve for Giffen goods is

(a) positively sloped

(b) negatively sloped

(d) horizontal

Ans. (b)

27. Which one of the following statements is correct? According to the classical economists, the existence of unemployment at any time is only of temporary nature and can be considered as

(a) structural unemployment

(b) cyclical unemployment

(d) disguised unemployment

Ans. (c)

28. Which one of the following statements is correct?

Creeping inflation is a situation in which the rate at

which price level rises is:

(a) very high

(b) high

(d) slow

Ans. (d)

29. Which of the following groups are adversely affected by inflation?

A. Wage earners in the informal sector.

B. Profit earners.

C. Salary earners with salaries indexed to inflation

D. Pensioners with fixed pensions.

Select the correct answer using the codes given below:

(a) A and B

(b) C and D

(d) B and C

Ans. (a)

30. Which one of the following is a qualitative credit control method?

(a) Open market operations

(b) Bank-rate

(d) Moral suasion

Ans. (d)

31. What kind of change is to be made in (i) Cash reserve ratio, and (ii) Bank rate, to control inflation?

(a) (i) should increase but (ii) should decrease

(b) (ii) should increase but (ii) should decrease

(d) Both should decrease

Ans. (c)

32. Which one of the following pairs is called an open market operation?

(a) Selling and buying of securities or bills by the central bank

(b) Selling and buying of foreign exchange

(d) Selling and buying of gold in the open market by commercial banks

Ans. (a)

33. The money multiplier in an economy increases with which one of the following?

(a) Increase in the cash reserve ratio

(b) Increase in the statutory liquidity ratio

(d) Increase in the population of the country

Ans. (c)

34.

In the context of the figure above which of the following statements is/are correct?

A. Investment is autonomous.

B. Saving is autonomous.

C. Investment is dependent on income.

D Saving is dependent on income.

Select the correct answer using the codes given below:

(a) B and C

(b) A and D

(d) A only

Ans. (b)

35. consider the following consumption saving functions:

A. C = 200+0.8Y

B. S = 200+0.2Y

C. C = 150+0.8Y

D. S = -150+0.2Y

Which of the above are consistent pairs of functions?

(a) A and B

(b) A and D

(d) C and D

Ans. (d)

36. There are 2 assets A and B in which one can invest his savings of Rs. 1,000/. Assume that there is no risk and interest rate is 10%.

Asset A gives a return of Rs. 100/- in perpetuity

Asset B gives Rs. 200/. at the end of year 1 and Rs. 900/- at-the end of the year 2.

Which one of the following statements is correct?

(a) Present value of A and B are the same.

(b) Present value of B is higher than that of A.

(d) Information is inadequate to determine the present value of A and B

Ans. (c)

37. Which one of the following statements is correct?

Value of output and value-added can be distinguished if we know

(a) the value of intermediate inputs

(b) the value of net indirect taxes

(d) the value of consumption of fixed capital

Ans. (a)

38. Given:

% Change in nominal GNP = 1.8

% change in population = 0.5

% change in price level = 1.3

What is the approximate percentage change in real per -capita GNP?

(a) Zero

(b) 0.5

(d) 1.3

Ans. (a)

39. Match List- I (Concept) with List -II (Economist) and select the correct answer using the codes given below the lists:

List I List II

(Concept) (Economist)

A. Liquidity trap 1. M. Friedman

B. Demonstration effect 2. A.C. Pigou

C. Permanent income hypothesis 3. J. Duesenberry

D. Wealth effect 4. J.M. Keynes

Code:

A B C D

(a) 4 3 1 2

(b) 1 2 4 3

(d) 1 3 4 2

Ans. (a)

40. Which one of the following statements is correct?

To derive disposable income from national income, one has to

(a) deduct income taxes and add transfer payments.

(b) deduct income taxes and deduct transfer payments

(d) add income taxes and deduct transfer payments

Ans. (a)

41. Approach paper to 11^th five plan, issued by the Planning Commission refers to the merger of which one of the following pairs of government programmes?

(a) Sarva Shiksha Abhiyan with Mid-day Meal Programme

(b) Jawahar Rojgar Yojana with Mid-day Meal Programme

(d) Shram Shakti Yojana with Jawahar Rojgar Yojana

Ans. (a)

42. Which one of the following statements is correct? J.M. Keynes assumed that supply of money as a function of rate of interest is

(a) perfect elastic

(b) highly elastic

(d) perfectly inelastic

Ans. (a)

43. Who developed the Time Preference Theory of interest?

(a) Irving Fisher

(b) N. Senior

(d) J.M. Keynes

Ans. (a)

44.

In the graph given above, what does the point B indicate?

(a) Excess supply in the goods market and excess demand in the money market

(b) Excess demand in the goods market and excess supply in the money market

(d) Excess demand in both goods and money market

Ans. (b)

45. Which one of the following is the most important determinant of speculative demand for money?

(a) Income

(b) Interest rate

(d) Prices

Ans. (b)

46. Which one of the following equations was used by Fischer to exp the Quantity Theory of Money ?

(Symbols have their usual meanings)

(a) MV= PT

(b) MP = VT

(d) PV = MT

Ans. (a)

47. If Y is the total money income of the community M is the money supply and P is the price level, than how is Vy (The income velocity of money) defined as?

(a) Vy = M/Y

(b) Vy = Y/M

(d) Vy = PY/M

Ans. (d)

48. When shall an increase in money supply have a small effect on nominal Gross Domestic Product?

(a) If the velocity is decreasing

(b) If the velocity is unchanged

(d) If the Government spending is also increasing

Ans. (d)

49. There are a number of banks in a market. The initial total primary deposit is Rs. 1,000. Every bank is required to maintain a 10% reserve legally The transactions are completely made through cheque and no transaction is made in cash. W1{at will be the total credit creation in the market?

(a) Rs. 1,000

(b) Rs 5,000

(d) None of these

Ans. (c)

50. Which one of the following is a source of non-tax revenue for governments?

(a) Import duty on cars

(b) Octroi at cheek points on roads.

(d) Excise duty or beverages

Ans. (c)

HALL TICKET FOR RE-EXAMINATION FOR SCREENING TEST FOR GROUP-I SERVICES (GENERAL RECRUITMENT)NOTIFICATION NO.39/2008 & SUPPLEMENTARY NOTIFICATION NO.10

HALL TICKET FOR RE-EXAMINATION FOR SCREENING TEST FOR
GROUP-I SERVICES (GENERAL RECRUITMENT)NOTIFICATION NO.39/2008 & SUPPLEMENTARY NOTIFICATION NO.10/2009 CLICK HERE

Monday, October 18, 2010

CSAT (Civil Services Aptitude Test) 2011 Syllabus

The Syllabus of CSAT 2011 is out. There is NO optional paper this time. There are two papers and syllabus and pattern of examination is as follows:
Paper I :
200 marks Duration : Two Hours

Current events of national and international importance
History of India and Indian national Movement
Indian and World Geography: Physical, social, economic geography of India and World
Indian Polity and Governnance: Constitution, Political System, Panchayati Raj , Public Policy, Rights issues
Economic and Social Development: Sustainble development, Poverty, Inclusion, Demographics, Social sector initiatives.
General issues on Environmental Ecology, Biodiversity, Climate Change,- that don’t require subject specialization.
General Science

Paper II : 200 marks (Duration 2 hours)

Comprehension
Interpersonal skills including communication Skills
Logical reasoning and analytical ability
Decision making and Problem solving.
General mental ability
Basic Numeracy (Numbers and their relations, orders of magnitude etc.) dat
Interpretation Skills (Charts, Graphs, tables, Data Sufficiency Class X Level)
English language Comprehension Skills.

Official Link : http://persmin.gov.in/WriteReadData/SV/13018_4_2008-AIS-1.pdf

APPSC LECTURERS IN GOVERNMENT DEGREE COLLEGES IN A.P. COLLEGIATE EDUCATION SERVICE 2010 NOTIFICATION

APPSC LECTURERS IN GOVERNMENT DEGREE COLLEGES IN A.P. COLLEGIATE EDUCATION SERVICE 2010 NOTIFICATION CLICK HERE

APPSC ASSISTANT ELECTRICAL INSPECTORS IN A.P. INSPECTORATE SERVICES 2010 NOTIFICATION

APPSC ASSISTANT ELECTRICAL INSPECTORS IN A.P. INSPECTORATE SERVICES 2010 NOTIFICATION CLICK HERE

APPSC DEPUTY INSPECTOR OF SURVEY IN A.P. SURVEY SETTLEMENTS AND LAND RECORDS SUB SERVICE NOTIFICATION

APPSC DEPUTY INSPECTOR OF SURVEY IN A.P. SURVEY SETTLEMENTS AND LAND RECORDS SUB SERVICE NOTIFICATION CLICK HERE

Sunday, October 17, 2010

Anti-Defection Law

Extract from the Constitution of India

191. Disqualifications for membership. - (1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State-

(a) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder;

(b) if he is of unsound mind and stands so declared by a competent court;

(d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgement of allegiance or adherence to a foreign State;

(e) if he is so disqualified by or under any law made by parliament.

Explanation.-For the purposes of this clause. a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State specified in the First Schedule by reason only that he is a Minister either for the Union or for such State.

(2) A person shall be disqualified for being a Member of the Legislative Assembly or Legislative Council of a State if he is so disqualified under the Tenth Schedule

TENTH SCHEDULE

Articles 102(2) and 191(2)

Provisions as to disqualification on ground of defection.

1. Interpretation.- in this Schedule, unless the context otherwise requires,-

(a) “House” means either House of Parliament or the Legislative Assembly or, as the case may be, either House of the Legislature of a State;

(b) “legislature party,” in relation to a member of a House belonging to any political party in accordance with the provisions of paragraph 2 or paragraph 4, means the group consisting of all the members of that House for the time being belonging to that political party in accordance with the said provisions;

(c) “original political party,” in relation to a member of a House, means the political party to which he belongs for the purposes of sub-paragraph (1) of paragraph 2 ;

(d) “paragraph” means a paragraph of this schedule.

2. Disqualification on ground of defection.- (1) Subject to the

provisions of [paragraphs 4 & 5, a member of a House belonging to any political party shall be disqualified for being a member of the House-

(a) if he has voluntarily given up his membership of such political party; or

(b) if he votes or abstains from voting in such House contrary to any direction issued by the political party to which he belongs or by any person or authority authorized by it in this behalf, without obtaining, in either case, the prior permission of such political party, person or authority and such voting or abstention has not been condoned by such political party, person or authority within fifteen days from the date of such voting or abstention.

Explanation.- For the purposes of this sub-paragraph.-

(a) an elected member of a House shall be deemed to belong to the political party, if any, by which he was set up as a candidate for election as such member;

(b) a nominated member of a House shall.-

(i) where he is a member of any political party on the date of his nomination as such member, be deemed to belong to such political party;

(ii) in any other case, be deemed to belong to the political party of which he becomes, or, as the case may be, first becomes, a member before the expiry of six months from the date on which he takes his seat after complying with the requirements of article 99 or, as the case may be, article 188.

(2) An elected member of a House who has been elected as such otherwise than as a candidate set up by any political party shall be disqualified for being a member of the House if he joins any political party after such election.

(3) A nominated member of a House shall be disqualified for being a member of the House if he joins any political party after the expiry of six months from the date on which he takes his seat after complying with the requirements of article 99 or, as the case may be, article 188.

(4) Notwithstanding anything contained in the foregoing provisions of this paragraph, a person who, on the commencement of the Constitution (Fifty-second Amendment) Act, 1985, is a member of a House (whether elected or nominated as such) shall.-

(i) where he was a member of a political party immediately before such commencement, be deemed, for the purposes of sub-paragraph (1) of this paragraph, to have been elected as a member of such House as a candidate set up by such political party;

(ii) in any other case, be deemed to be an elected member of the House who has been elected as such otherwise than as a candidate set up by any political party for the purposes of sub-paragraph (2) of this paragraph or, as the case may be, be deemed to be a nominated member of the House for the purposes of sub-paragraph (3) of this paragraph.

4. Disqualification on ground of defection not to apply in case of merger.- (1) A member of a House shall not be disqualified under sub-paragraph (1) of paragraph 2 where his original political party merges with another political party and he claims that he and any other members of his original political party-

(a) have become members of such other political party or, as the case may be, of a new political party formed by such merger; or

(b) have not accepted the merger and opted to function as a separate group, and from the time of such merger, such other political party or new political party or group, as the case may be, shall be deemed to be the political party to which he belongs for the purposes of sub-paragraph (1) of paragraph 2 and to be his original political party for the purposes of this sub-paragraph.

(2) For the purposes of sub-paragraph (1) of this paragraph, the merger of the original political party of a member of a House shall be deemed to have taken place if, and only if, not less than two-thirds of the members of the legislature party concerned have agreed to such merger.

5. Exemption.- Notwithstanding anything contained in this schedule, a person who has elected to the office of the Speaker or the Deputy Speaker of the House of the People or the Deputy Chairman of the Council of States or the Chairman or the Deputy Chairman of the Legislative Council of a State or the Speaker or the Deputy Speaker of the Legislative Assembly of a State, shall not be disqualified under this Schedule,-

(a) if he, by reason of his election to such office, voluntarily gives up the membership of the political party to which he belonged immediately before such election and does not, so long as he continues to hold such office thereafter, rejoin that political party or become a member of another political party; or

(b) if he, having given up by reason of his election to such office his membership of the political party to which he belonged immediately before such election, rejoins such political party after he ceases to hold such office.

6. Decision on questions as to disqualification on ground of defection.-(1) If any question arises as to whether a member of a House has become subject to disqualification under this schedule, the question shall be referred for the decision of the Chairman or, as the case may be, the Speaker of such House and his decision shall be final.

Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final.

(2) All proceedings under sub-paragraph (1) of this paragraph in relation to any question as to disqualification of a member of a House under this schedule shall be deemed to be proceedings in Parliament within the meaning of article 122 or, as the case may be, proceedings in the Legislature of a State within the meaning of article 212.

7. Bar of jurisdiction of courts.- Notwithstanding anything in this Constitution, no court shall have any jurisdiction in respect of any matter connected with the disqualification of a member of a House under this schedule.

8. Rules. – (1) Subject to the provisions of sub-paragraph (2) of this paragraph, the Chairman or the Speaker of a House may make rules for giving effect to the provisions of this Schedule, and in particular, and without prejudice to the generality of the foregoing, such rules may provide for-

(a) the maintenance of registers or other records as to the political parties, if any, to which different members of the House belong;

(b) the report which the leader of a legislature party in relation to a member of a House shall furnish with regard to any condonation of the nature referred to in clause (b) of sub-paragraph (1) of paragraph 2 in respect of such member, the time within which and the authority to whom such report shall be furnished;

(c) the report, which a political party shall furnish with regard to admission to such political party of any members of the House and the officer of the House to whom such report shall be furnished; and

(d) the procedure for deciding any question referred to in sub-paragraph (1) of paragraph 6 including the procedure for any inquiry which may be made for the purpose of deciding such question.

(2) The rules made by the Chairman or the Speaker of a House under sub-paragraph (1) of this paragraph shall be laid as soon as may be after they are made before the House for a total period of thirty days which may be comprised in one session or in two or more successive sessions and shall take effect upon the expiry of the said period of thirty days unless they are sooner approved with or without modifications or disapproved by the House and where they are so approved, they shall take effect on such approval in the form in which they were laid or in such modified form, as the case may be, and where they are so disapproved, they shall be of no effect.

(3) The Chairman or the Speaker of a House may, without prejudice to the provisions of article 105or,as the case may be, article 194, and to any other power which he may have under this Constitution direct that any wilful contravention by any person of the rules made under this paragraph may be dealt with in the same manner as a breach of privilege of the House.

Pages

Tuesday, October 19, 2010

Monday, October 18, 2010

Sunday, October 17, 2010