जीपीएससी परीक्षा पूर्वतयारी

1 Which of the following statements is true?

 A Average fixed cost curve is a horizontal straight line running parallel to X-axis.

 B Corresponding to the level of output at which the average fixed cost curve intersects the X-axis, total cost is highest.

 C Marginal cost curve intersects the average cost curves at the least average cost point.

 D Average cost curve starts rising prior to the marginal cost curve.

 E None of the above

 Correct Answer C

 Marks 1

2 Equilibrium occurs in a two-sector model when

 A Saving equals investment

 B Consumption plus investment equals the value of output

 C Planned saving equals planned investment

 D Aggregate spending equals the revenues of the business sector

 E None of the above

 Correct Answer C

 Marks 1

3 The concept of "deadweight loss" is relevant to consumer surplus when:

 A Consumer preferences change dramatically

 B The market is perfectly competitive

 C The price elasticity of demand is zero

 D Markets deviate from equilibrium due to price controls or taxes

 E None of the above

 Correct Answer D

 Marks 1

4 Which of the following statements is true?

 A Relative Income Hypothesis asserts that people can quickly and easily adjust their living standards downwards but upward

 adjustment is very difficult.

 B Permanent Income Hypothesis states that the transitory component of income significantly influences the consumption behavior.

 C Relative income hypothesis assumes that marginal propensity to consume and hence multiplier are constant.

 D Life Cycle Hypothesis states that the saving behavior of the individuals during their working life is motivated by their desire to

 maintain consumption levels after retirement.

 E None of the above

 Correct Answer D

 Marks 1

5 According to the traditional cost theory, the "average fixed cost" curve:

 A Slopes upward as output increases

 B Slopes downward as output increases

 C Is perfectly horizontal

 D Remains constant at all levels of output

 E None of the above

 Correct Answer B

 Marks 1

6 Which of the following statements is true regarding the shadow price (dual value) in linear programming?

 A It represents the rate of change of the objective function value with respect to a unit change in the right-hand side of a constraint.

 B It represents the value of the objective function at the optimal solution.

 C It is always equal to zero for binding constraints.

 D It is computed using the simplex method.

 E None of the above

 Correct Answer A

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7 In the Lewis model, what does the term “surplus labour” refer to?

 A An amount of labour that is so high that it deflates wages throughout the economy

 B Labour that does not have at least a primary level education

 C Labour that can be withdrawn from the low productivity agricultural sector without a decrease in the total production

 D Labour that is exploited by the capitalist class

 E None of the above

 Correct Answer C

 Marks 1

8 Given the consumption function C = 256 + 0.85Y, we may infer that, as Y increases

 A Average propensity to consume remains constant

 B The marginal propensity to consume and average propensity to consume will be decreasing

 C The average propensity to consume is constant but marginal propensity to consume will be decreasing

 D The average propensity to consume will be decreasing but marginal propensity to consume will be constant

 E None of the above

 Correct Answer D

 Marks 1

9 Interest Rate Parity (IRP) implies that:

 A Interest rates should change by an equal amount but in the opposite direction to the difference in inflation rates between two

 countries

 B The difference in interest rates in different currencies for securities of similar risk and maturity should be consistent with the

 forward rate discount or premium for the foreign currency

 C The interest rates between two countries start in equilibrium, any change in the differential rate of inflation between the two

 countries tends to be offset over the long-term by an equal but opposite change in the spot exchange rate

 D In the long run real interest rate between two countries will be equal

 E None of the above

 Correct Answer B

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10 A saddle point in game theory refers to

 A A point after which no player gets any profits irrespective of his/her strategy

 B A point after which no player gets any losses irrespective of his/her opponent’s strategy

 C The solution or outcome of a strictly determined game

 D It is another name for dominant equilibrium

 E None of the above

 Correct Answer C

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11 Suppose the money supply and price level are constant, and the demand for money is a function of income and the rate of interest.

 When the income level increases, there is

 A An increase in the quantity of money demanded and an increase in the rate of interest

 B An increase in the quantity of money demanded and a decrease in the rate of interest

 C A decrease in the quantity of money demanded and a decrease in the rate of interest

 D A decrease in the quantity of money demanded and an increase in the rate of interest

 E None of the above

 Correct Answer A

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12 Comprehension Read the following passage and answer the questions given below: 

The examination system is both an opiate and a poison. It is an opiate because it lulls us into believing that all is well when most is

 ill. ‘Look,’ the public says, ‘at this list of scholarships; see how many children have got their School Certificates: something is

 happening; the school is doing its job.’ Something no doubt is happening; but it may not be education: it may be the administration

 of a poison which paralyses or at least slows down the natural activities of the healthy mind. The healthy human being finding

 himself a creature of unknown capacities in an unknown world, wants to learn what the world is like, and what he should be and do

 in. To help him in answering these questions is the one and only purpose of education

13 As an opiate and a poison, the examination system respectively

 A paralyses or slows down natural activities and lulls the healthy mind

 B lulls the healthy mind and paralyses or slows down its physical activities

 C paralyses or slows down natural activities and lulls the mind

 D lulls the healthy mind and paralyses or slows down its natural activities

 E None of the above

 Correct Answer D

 Marks 1