ECONOMICS:PAPER II Sample Questions Part II

ECONOMICS:PAPER II

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

solved by Noufal. P