Competitive Exams: Economics MCQs (Practice-Test 46 of 122)

  1. When exchange rates are stable and a country at full employment has a surplus balance of payments, it will result in a

    1. decline in price level

    2. decline in money income

    3. rise in price level

    4. rise in money income

  2. Match List I with List II and select the correct answer

    List-I List-II
    1. C = 4 + 0.6 Y

    2. I = 80 − 5i

    3. 0.3 y − 20 i − 150 = 0

    4. 0.3 y + 20 i − 150 = 0

    1. LM function

    2. IS function

    3. consumption functions

    4. Investment function

    • A
    • B
    • C
    • D
      • 3
      • 4
      • 1
      • 2
      • 4
      • 3
      • 1
      • 2
      • 3
      • 4
      • 2
      • 1
      • 4
      • 1
      • 2
      • 3
  3. When income rise, the impact on the liquidity preference curve is that

    1. it shifts to the left

    2. it does not shift at all

    3. it shifts to the right

    4. there is a change in its slope

  4. Human Development Index (HDI) is a composite index of

    1. health, literacy and employment

    2. national income size of population and the general price level

    3. national income, per capita income and per capital consumption

    4. physical resources, monetary resources and population size.

  5. According to the Harrod-Domar model, the warranted rate of growth, given the incremental capital-output ratio, depends on the

    1. rate of growth of labour force

    2. marginal productivity of investment

    3. marginal efficiency of capital

    4. saving-income ratio

  6. According to J R hicks, technical progress is said to be neutral if it raises

    1. the marginal physical productivity of labour and capital in the same proportion

    2. the average productivity of labour and capital in the same proportion

    3. the wage ‘rate and the interest’ rage in the same proportion

    4. the interest-rate and the profit-rate in the same proportion

  7. According to Kuznets, during process of development the income inequalities tend to

    1. decrease

    2. increase

    3. increase first and then decrease

    4. decrease first and then increase

  8. Perfectly elastic supplies of labour play a crucial role in

    1. Malthus'model of growth

    2. Kuznets'model of growth

    3. The Prebisch hypothesis

    4. Lewis'model of growth

  9. Consider the following statements: The correct order of specific stages of demographic transition associated with economic development is

    1. low birth rate with low death rate.

    2. high birth rate with high death rate.

    3. high birth rate with low death rate.

    Which of the above statements are correct?

    1. 1, 2, 3

    2. 2, 1, 3

    3. 2, 3 1

    4. 3, 2, 1

  10. Consider a Ricardian economy that is endowed with 45 units of labour. It can produce two goods: Gagar-halwa and Kulfi. One unit of labour can produce 4 kilos of Gajar-halwa or 6 kilos of Kulfi. The international priceof Gajar-halwa in terms of Kulfi is 2. In free trade, this country will produce.

    1. 15 kilos of Kulfi

    2. 130 kilos of Kulfi

    3. 180 kilos of Gaja-Halwa

    4. 270 kilos of Gajar-Halwa

  11. Consider tow countries: Ghana and Zaire, Assuming a heckscher-Ohlin framework, let the total supplies of capital and labour in the two countries be Ka = 300, La = 150 for Ghana and KI = 110 and LI = 50 for Zaire. Each country produces two goods. Cocoa and Peanuts and in both countries cocoa is more labour intensive in production. The Heckscher-Ohlin theory predicts that

    1. Zaire exports Cocoa to Ghana

    2. Zaire imports Coca from Ghana

    3. Zaire imports Peanuts from Ghana

    4. both a and c will hold

  12. If protection is given to a small importcompeting industry, consumer surplus and domestic profits will, respectively

    1. rise, rise

    2. Fall, fall

    3. rise, fall

    4. fall, rise

  13. Which one of the following conditions is NOT assumed by the factor price equalization theorem?

    1. the countries are characterised by different factor endowments.

    2. the countries are characterized by different production functions

    3. the industries are characterised by different factor intesities

    4. Each country will export the commodity which uses its abundant factor relatively intensively.

  14. India is large exporter of tea and a small exporter of bicycles. In this context, which one of the following is true?

    1. An export subsidy to tea would improve India's term of trade in the world tea market

    2. an export subsidy to tea would worsen India's terms of trade in the world tea market

    3. an export subsidy to bicycles would improve India's terms of trade in the world bicycle market

    4. an export subsidy to bicycles would worsen India's terms of trade in the world bicycle market

  15. There are two countries: Sugarland and Salt land. Each country produces sugar and salt. The former exports sugar and the latter, salt. Starting from free trade equilibrium, a tariff on salt by Sugarland would affect the offer curves and the relative price of sugar from Sugarland's perspective in which one of the following ways?

    1. Shift the offer curve of Saltland, increase the price of sugar

    2. Shift the offer cure of Saltland, decrease the price of sugar

    3. Shift the offer curve of Sugarland, increase the price of sugar

    4. shift the offer curve of Sugarland, decrease the price of sugar