ECONOMICS ----Sample Questions Part II----UGC NET

Sample Questions Part II

1. Vicious Circle of Poverty was proposed by :
(A) A. Marshall (B) J.M.Keynes
(C) RagnerNurkse (D) M.Friedman

2. In Harrod-Domar model, if the growth rate of income is 5% and capital-output ratio is3, then saving rate must be:
(A) 5% (B) 3% (C) 8% (D) 15%

3. Union Excise Duties are a part of Central Government's :

(A) Non-tax Revenue (B) Tax revenue
(C) Capital receipts (D) None of the above

4. Pump priming' should be resorted to at a time of :

(A) Inflation (B) Deflation
(C) Reflation (D) None of the above

5. VAT is imposed:
(A) on final stage of production
(B) on first stage of production
(C) directly on consumers
(D) at every stage between production and consumption

6. Tax on inherited property is an example of :
(A) Sales Tax (B) Income Tax (C) Wealth Tax (D) VAT

7. When government expenditure exceeds total government receipts, the budget deficitis:
(A) positive (B) negative (C) zero (D) indeterminate

8. The Laffer curve demonstrates the relationship between :
(A) inflation and the nominal interest rate
(B) tax rate and total tax revenues
(C) the real interest rate and investment demand
(D) none of the above

9. Devaluation, other things remaining the same, will make the balance of payments of a country worse if the elasticity of exports and elasticity of imports of a developing country will be:
(A) greater than 1 (B) less than 1 (C) equal to 1 (D) none of the above

10. The secular deterioration of terms of trade hypothesis initially was advanced by :
(A) RaulPrevisch (B) J.M.Keynes (C) Adam Smith (D) J.S. Mill




Answers: 1.C, 2. D, 3. B, 4.B, 5. D, 6. C, 7.A, 8.B, 9. B, 10. A

Non-Performing Asset - NPA .

Non-Performing Asset - NPA .
A classification used by financial institutions that referto loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 daysthe loan is considered to be a non-performing asset.
Also known as “non-performing loan”.

Repo & Reverse repo rate

What is a Repo Rate?
Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate isthe rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive.

In a reverse repo Reserve Bankborrows money from banks by lending securities. The interest paid by Reserve Bank in this case is called reverse repo rate.

Tight or Restrictive Monetary Policy

Controlling Domestic Credit(DC) means operating a Tight or Restrictive Monetary Policy.