Economics CSS Paper I 2008

FEDERAL PUBLIC SERVICE COMMISSION COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS IN BPS-17 UNDER THE FEDERAL GOVERNMENT, 2008
Economics Paper – I
Part I (MCQs)
Question No.1 Select the best option /answer and fill in the appropriate box on the answer sheet.
1. in the theory of the firm, profit maximization is always synonymous with:
(a) profitability (b) economic profit making (c) maximization of the sales revenue (d) both (a) and (c) (e) none of these
2. the law of demand is valid when price elasticity of demand is:
(a) inelastic (b) perfectly elastic (c) unitary elastic (d) both (a) and (c) (e) none of these
3. at the breakeven point a producer covering entire opportunity cost of production happens to produce under a market structure characterized as:
(a) perfectly competitive (b) monopoly (c) oligopoly (d) monopolistic competition (e) all of these
4. in the short run, the decreasing returns to scale are caused by the existence of:
(a) internal diseconomies (b) external economies (c) technical inefficiency (d) allocative inefficiency (e) both (b) and (d)
5. the left hand side variable of the saving function is always:
(a) endogenous (b) exogenous (c) insignificant (d) significant (e) both (b) and (d)
6. the macro management model of the classical function economist assigns the supreme role to the:
(a) fiscal policy (b) monetary policy (c) commercial policy (d) market (e) both (b) and (c)
7. while determining the national income equilibrium of an open economy, exports are considered to be:
(a) exogenous (b) endogenous (c) autonomous (d) both (a) and (c) (e) both (b) and (c)
8. counterpart of the intercept of consumption function is the intercept of:
(a) import function (b) exports (c) saving function (d) X-M (e) None of these
9. price stability in an economy is indicative of:
(a) presence of sound money (b) rising output (c) rising employment (d) both (a) and (c) (e) none of these
10. the Central Bank of a country plays a significant role in her macroeconomics performance by regulating the:
(a) money supply (b) supply credit (c) interest rate (d) money market (e) all of these
11. the relationship depicted by the Phillips curve is not valid if the change in general price level is :
(a) positively related with output (b) negatively related with output (c) positively related with employment (d) negatively related with employment (e) all of these
12. with each successive stage of its operation, the marginal cost of a firm in the banking sector:
(a) increase (b) decrease (c) remains constant (d) remains unpredictable (e) none of these
13. the theory of comparative advantage from international trade considers the difference between the trading countries’ factor prices arising from the different in:
(a) factor productivity (b) factor intensity (c) factor availability (d) both (a) and (c) (e) all of these
14. Marshell-lerner condition for stability of a foreign exchange market enquires that the sum total of the elasticity of demand for exports and demand for imports is:
(a) cross elasticity of demand (b) income elasticity of demand (c) price elasticity of demand (d) both (b) and (c) (e) none of these
15. expenditure switching policies for adjusting the balance of disequilibrium include:
(a) commercial policy (b) fiscal policy (c) monetary policy (d) both (b) and (c) (e) all of these
16. deadweight loss of a trade tariff is higher if the demand and supply functions of importable are:
(a) inelastic (b) elastic (c) completely inelastic (d) both (a) and (c) (e) none of these
17. An increasingly higher marginal income tax is:
(a) progressive (b) regressive (c) proportional (d) both (b) and (c) (e) none of these
18.the reallocative role of public economies indicates the existence of:
(a) Production externalities (b) Inefficiency in resource utilization (c) Consumption externalities (d) Both (a) and (c) (e) None of these
19.a price control interferes with the market by:
(a) causing market imperfection (b) disallowing the market to work (c) introducing price floor or ceiling (d) both (b) and (c) (e) all of these
20. in the presence of elastic supply and demand conditions, sales tax on a product interferes with the market by causing:
(a) welfare loss (b) efficiency loss (c) deadweight loss (d) both (a) and (b) (e) all of these
Part – II
Q2. The demand function is a static model, while the shifts is demand introduces those dynamics which render the law of demand invalid. Discuss and explain with the help of diagrams? (20)
Q3. What is economic profit? Diagrammatically distinguish between profit maximization and economic profit making and discuss the difference between the limitation of the latter for a monopoly and a perfectly competitive firm? (20)
Q4. “Keynes’s general theory was less of an anti-thesis of the classical economists and more of antinodes for both the great depression and the looming threat of communism” discuss? (20)
Q5. “The central bank of country is the watchdog of her economy” discuss and substantiate your answer by critically analyzing the role and performance of state bank of Pakistan in the macro management of the country? (20)
Q6. What is the relationship between debt burden and deficit financing ? discuss and compare two major sources of public debt and discuss their relative implications fro national budget and sustainable development in a country like Pakistan? (20)
Q7. “ For labor abundant countries , the comparative advantage from international trade only exists within a static model, while the real world dynamics mainly benefit the countries which happen to be both capital abundant and
technologically advance” discuss in the perspective of factors responsible for Doha round stalemate? (20)
Q8. Do you agree that the role of US dollar as the vehicle currency is a legacy of the bretton woods system of exchange rate determination ? Why the latter was introduced and what factors were responsible for its demise? (20)

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  • March 29, 2024 at 7:42 am
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