| Updated On - Oct 16, 2024
GATE 2024 Economics (XH-C1) Question Paper PDF is available here. IISc Banglore conducted GATE 2024 Economics (XH-C1) exam on February 4 in the Forenoon Session from 9:30 AM to 12:30 PM. Students have to answer 65 questions in GATE 2024 Economics (XH-C1) Question Paper carrying a total weightage of 100 marks. 10 questions are from the General Aptitude section and 55 questions are from Core Discipline.
GATE 2024 Economics (XH-C1) Question Paper with Answer Key PDF
| GATE 2024 Question Paper PDF | GATE 2024 Answer Key PDF |
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GATE 2024 Economics (XH-C1) Question Paper Solutions
| S.No | Question | Correct Option | Solution & Explanation |
|---|---|---|---|
| 1 | Which one of the following measures in the Keynesian framework is adopted to tame inflation in an economy? (A) Reduction in government spending (B) Reduction in the bank rate (C) Reduction in the repo rate (D) Increase in merchandise exports | (A) Reduction in government spending | In the Keynesian framework, reducing government spending decreases overall demand, which helps control inflationary pressures. |
| 2 | If the difference between actual GDP and the trend output varies inversely with the difference between actual unemployment rate and the natural rate of unemployment, then such a relationship is called: (A) Okun’s law (B) New Keynesian aggregate supply curve (C) Taylor Rule (D) New Keynesian Phillips curve | (A) Okun’s law | Okun's law states that for every 1% increase in the unemployment rate above the natural rate, a country's GDP will be roughly 2-3% lower than its potential GDP. It relates the output gap to the unemployment gap. |
| 3 | When transfer of income happens from the “not richer” individual to the “not poorer” individual, then such a transfer is known as: (A) Regressive transfer (B) Additive transfer (C) Direct transfer (D) Indirect transfer | (A) Regressive transfer | A regressive transfer is one where income or wealth is transferred in a way that benefits individuals who are relatively well-off, reducing income equality. |
| 4 | In the context of the Harris-Todaro model of rural-urban migration, which one of the following is TRUE? (A) Unemployment in the urban sector emerges because rural-urban migration occurs primarily due to the higher expected wage income in the urban sector (B) Unemployment in the urban sector emerges because rural workers migrate to the cities due to the expected shortage of unskilled labor in the urban sector (C) Unemployment in the urban sector emerges because the rural wage rate is institutionally fixed by the local body at a higher level than the urban wage rate (D) Unemployment in the rural sector emerges because urban workers migrate to the rural sector due to the higher expected wage income in the advanced economies | (A) Unemployment in the urban sector emerges due to the higher expected wage income in the urban sector | The Harris-Todaro model explains that rural-urban migration occurs due to higher expected wage income in urban areas, leading to urban unemployment as not all migrants find jobs immediately. |
| 5 | The Minimum Support Prices in India are notified based on the recommendations of which one among the following Commissions? (A) Commission for Agricultural Costs and Prices (B) Commission for Farmers’ Benefits and Costs (C) Commission for Agricultural Subsidy Costs and Prices (D) Commission for Agricultural Subsidy Benefits and Costs | (A) Commission for Agricultural Costs and Prices | The Commission for Agricultural Costs and Prices (CACP) recommends MSPs to ensure fair prices for farmers. |
| 6 | In an economy, the dependency ratio is the ratio of: (A) non-working age group population to the working age group population (B) number of children to adults in the total population (C) number of unemployed to employed workers in the total labor force (D) total foreign aids and grants to the total (net) factor income from abroad | (A) non-working age group population to the working age group population | The dependency ratio shows the burden on the working population to support children and the elderly (non-working age group). |
| 7 | Which one of the following is NOT a source of finance of the Government of India? (A) Land revenue (B) Income tax (C) Corporate tax (D) Import duty | (A) Land revenue | Land revenue is typically a source of income for state governments, not the central government. The central government relies on income tax, corporate tax, and import duties. |
| 8 | Which of the following statements is/are TRUE? (A) A firm experiences economies of scale when an increase in its output of a good or service brings a reduction in the average total cost of production (B) A firm experiences economies of scope when an increase in its range of goods produced brings down the average total cost of production (C) A firm experiences economies of scale when an increase in the range of products produced brings down the short-run average total cost of production (D) A firm experiences economies of scope when an increase in its output of a good or service brings a reduction in the marginal cost of production | (A) and (B) | Economies of scale reduce average costs as output increases, and economies of scope reduce costs when a firm produces a variety of goods. |
| 9 | Two friends, Aditi and Raju, are deciding whether to watch a movie or go to a music concert. Both prefer to spend the evening together but Aditi prefers the movie while Raju prefers the concert. The payoff matrix indicates: (A) 0 (B) 1 (C) 1/ 3 (D) 2 /3 | (A) 0 | The Nash Equilibria occur where neither player can improve their payoff by unilaterally changing their strategy, leading to the equilibrium values of 0 |
| 10 | Which of the following statements is/are FALSE? (A) The arbitrage pricing theory says that the prices which producers in different countries set for a particular product will be the same if the prices are expressed in the same currency using the current exchange rate (B) The interest rate parity theory says that the interest rates on similar assets in two countries will always be the same (C) The Purchasing Power Parity theory says that the total prices of any basket of products which apply in two different countries will be the same, if the prices are expressed in the same currency using the current exchange rate (D) The real exchange rate between two countries is the rate at which a particular basket of products produced in one country can be traded with a similar basket produced in another country | (A) and (B) | Statement (A) is false because the arbitrage pricing theory (APT) does not claim prices will be the same globally. Statement (B) is false as the interest rate parity theory suggests that differences in interest rates between two countries will adjust based on expected changes in the exchange rate, not that they are always equal. |
| 11 | Suppose XYZ Corp. is fully financed by equity; it is earning Rs. 2.50 per share; its capitalization rate is 20%. There are 10,000 shares outstanding, and the replacement cost of the firm’s real assets is Rs. 1,25,000. XYZ Corp.’s value of Tobin’s q is _________. | Tobin’s q = 1 | Tobin's q is calculated as the ratio of the market value of the firm to the replacement cost of its real assets. Here, Tobin's q equals 1, indicating that the market value of the firm is equal to the replacement cost of its real assets. |
| 12 | If ‘KARAMCHAND’ is coded as ‘ICPCKEFCLF’, what should be the code of ‘CREATION’? (A) ATCCRKMP (B) ETGCVKQP (C) APCCRJMP (D) ETCGKRPM | (A) ATCCRKMP | Solution: The coding pattern alternates: odd-position letters shift 2 backward, and even-position letters shift 2 forward. 'CREATION' becomes 'ATCCRKMP'. |
| 13 | In a code, ‘they play cricket together’ is ‘mv kb lb iv’, ‘they score maximum points’ is ‘gb lb mb kv’, and so on. What is the code for ‘earned maximum points’? (A) gv gb kv (B) mv kb mb (C) lb iv ob (D) ob mb iv | (A) gv gb kv | Solution: By matching common words and codes across sentences, 'earned' = gv, 'maximum' = gb, and 'points' = kv. Hence, the code for 'earned maximum points' is 'gv gb kv'. |
| 14 | Which statement weakens the argument that brain size does not directly correlate with intelligence? (A) Recent studies refute the hypothesis... (B) Neanderthal people’s extinction... (C) Homo Sapiens destruction... (D) Neanderthal people, with smaller brains... | (A) Recent studies refute... | Solution: Option (A) weakens the argument by challenging the claim that region-specific brain development correlates with progress, directly refuting the presented hypothesis. |
| 15 | Which action is appropriate for students not attending classes post-pandemic? (A) Disciplinary action... (B) Counseling sessions... (C) Surveys... (D) Course content change... | (B) & (C) Counseling and Surveys | Solution: Counseling sessions help address students' personal challenges, while surveys gather data to identify the reasons for absenteeism. Disciplinary action or immediate course changes might not solve the underlying issues. |
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2. “I have not yet decided what I will do this evening; I ______ visit a friend.”
“I have not yet decided what I will do this evening; I ______ visit a friend.”
mite
would
might
didn’t
3. What are the number of numbers possible divisible by 3 if we choose 4 numbers from the set S = {4,5,7,8,9}
What are the number of numbers possible divisible by 3 if we choose 4 numbers from the set S = {4,5,7,8,9}
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