जीपीएससी परीक्षा पूर्वतयारी

1 Tobin's q theory suggests that an increase in the stock market valuation relative to the replacement cost of assets leads to:

 A Higher investment and economic growth

 B Lower investment and economic contraction

 C Stagnant investment and economic stability

 D Changes in consumer spending patterns

 E None of the above

 Correct Answer A

 Marks 1

2 Crowding out will occur when

 A A decrease in the money supply raises interest rates which crowd out interest-sensitive private sector spending

 B An increase in taxes of the private sector reduces private sector disposable income and spending

 C A reduction in income taxes causes higher interest rates, which crowd out interest-sensitive private sector spending

 D A reduction in government spending causes induced consumption spending to fall

 E None of the above

 Correct Answer C

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 3 Which of the following best describes the concept of "increasing returns to scale" in the endogenous growth model?

 A Output increases proportionally with inputs

 B Output increases at a decreasing rate with inputs

 C Output increases at an increasing rate with inputs

 D Output remains constant regardless of inputs

 E None of the above

 Correct Answer C

 Marks 1

4 According to the Harrodian economic growth model, an increase in autonomous consumption will lead to what effect on

 equilibrium income?

 A Increase in equilibrium income

 B Decrease in equilibrium income

 C No change in equilibrium income

 D Fluctuations in equilibrium income

 E None of the above

 Correct Answer B

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5 One of the important goals of the economic liberalization policy is to achieve high convertibility of the Indian rupee. Which of the

 following is not a benefit of convertibility?

 A Convertibility of the rupee will stabilize its exchange value against major currencies of the world.

 B It will attract more foreign capital inflow in India

 C It will help promote exports

 D It will discourage imports to India

 E None of the above

 Correct Answer D

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6 The theory that predicts that trade occurs because of differences in the availability of factor inputs across countries and the

 differences in the proportions in which the factor inputs are used in producing different products is called:

 A The Stolper-Samuelson theory.

 B The Heckscher-Ohlin theory.

 C Comparative advantage.

 D Absolute advantage.

 E None of the above

 Correct Answer B

 Marks 1

7 In the Solow growth model, suppose initially that the economy is in its steady state, in which the saving rate is lower than the

 golden-rule saving rate. Suppose the saving rate is changed to the golden-rule saving rate, which of the following is true for the

 effect on consumption per worker?

 A Consumption per worker is always higher than the initial steady-state level of consumption in both transition path and the new

 steady state.

 B Consumption per worker is always lower than the initial steady-state level of consumption in both transition path and the new

 steady state.

 C Consumption per worker may be higher or lower than the previous steady-state level of consumption on the transition path, but the

 new steady state level of consumption is higher.

 D Consumption per worker may be higher or lower than the previous steady-state level of consumption on the transition path, but the

 new steady state level of consumption is lower.

 E None of the above

 Correct Answer C

 Marks 1

8 According to Rostow's theory, which stage is characterized by increased investment in infrastructure, urbanization, and

 improvements in education and healthcare?

 A Pre-conditions for take-off

 B Take-off

 C Drive to maturity

 D Age of high mass consumption

 E None of the above

 Correct Answer C

 Marks 1

9 Which of the following statements is true?

 A In the short run, a competitive firm may incur losses but the monopolist will always earn abnormal profits.

 B A monopolist can be in equilibrium whether costs are increasing, decreasing or constant but a competitive firm can be in

 equilibrium only under decreasing cost conditions.

 C In the long run, the monopolist will earn normal profits while a competitive firm earns abnormal profits.

 D Consumers’ surplus is more under conditions of perfect competition than under monopoly.

 E None of the above

 Correct Answer D

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10 The term ‘collusion’ refers to

 A A situation in which government jointly sets prices with the market leader in an oligopoly

 B A situation in which government jointly sets prices with the small players in an industry in the larger interests of the society

 C A situation in which all firms in an industry decide the price and output

 D A situation in which two powerful groups of an industry join hands with the government to rule the industry

 E None of the above

 Correct Answer C

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11 How many stages of economic growth were defined and analysed by Rostow which all economies are supposed to pass through in

 the course of their development?

 A Seven

 B Five

 C Four

 D Three

 E None of the above

 Correct Answer B

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12 The basic difference between IS and LM curve is that

 A IS curve explains money market and LM curve explains goods market

 B IS curve explains goods market and LM curve explains money market

 C IS curve explains money in circulation and LM curve explains goods in demand

 D IS curve explains monetary policy and LM curve explains fiscal policy

 E None of the above

 Correct Answer B

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 13 In an economy M1 is equal to currency with public + Demand deposits with banks + Demand portion of savings deposits with

 Banks + Other Deposits with RBI, where currency with public is equal to

 A Currency in circulation less currency with commercial banks

 B Notes and coins in circulation and cash with banks

 C Notes and coins in circulation and demand deposits with banks

 D Demand deposits with banks, other deposits and small coins in circulation

 E None of the above

 Correct Answer C

 Marks 1