FEDERAL PUBLIC SERVICE COMMISSION COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS IN BPS – 17 UNDER THE FEDERAL GOVERNMENT, 2000.
ECONOMICS, PAPER – II
TIME ALLOWED: 3 HOURS MAXIMUM MARKS: 100
NOTE: Attempt FIVE questions in all, including Question No.7 which is Compulsory. All questions carry equal marks.
1. Trace the reasons for economic slow down in the country over the, last, few years and come up with possible remedial measures.
2. Going through the overall dismal record of. Pakistan’s planned developmental efforts, should we conclude that long or medium term planning in Pakistan is a futile exercise. Discuss.
3. It is alleged that the nationalization of early 1970’s was a disaster for the Pakistan’s economy. How do you look at this issue of nationalization?
4. Keeping in view the experience of Ayub era, it looked as it growth and distribution had virtually, no ‘relationship in Pakistan. The latest experience has, however, made people to reconsider this relationship. Discuss.
5. Over the last few years, it has been proved that it is the agriculture sector which has kept the Pakistani’s economy alive. Elaborate this statement and identify the future prospects in the sector.
6. Write notes on the followings:
a) Balance of Payment situation in Pakistan.
b) Unemployment Problem in Pakistan.
COMPULSORY QUESTION
7. Write only the correct answers in the Answer Book. Don’t’ reproduce the questions.
(1) If production in Pakistan’s Agriculture is subject to Law of diminishing returns, then to obtain successive’ increases in output of one extra unit.
(a) Smaller and smaller amounts of the variable input will be needed.
(b) Adding more of the variable input will do more harm than good because it must diminish total output instead of increasing it.
(c) The total cost of hiring each additional unit of the variable input must steadily increase.
(d) Greater and greater amount of the variable input will be needed.
(e) None of the above is necessarily true.
(2) The Law of downward sloping demand says that:
(a) An excess of supply over demand will cause a reduction in Price’.
(b) As people’s income increase they normally buy more of a commodity.
(c) When price falls quantity bought’ normally increases.
(d) Quantity bought of any good will ultimately decline as it goes out of fashion or is replaced by something better.
(3) In a “lorenz-curve diagram absolute equality in income distribution would appear as:
(a) A curved line well bowed out from the diagonal.
(b) A curved line close to the diagonal.
(c) A rights angled line.
(d) A diagonal line.
(e) None of the above.
(4) A Government’s fiscal policy would properly be defined as it’s policy with respect to:
(a) The relation between the total of it’s purchases of goods and services and the total of it’s welfare payments.
(b) Regulation and control of banking and credit.
(c) The total and types of it’s expenditure, and the manner of financing these e expenditures.
(d) That part of Government operation whose services are sold to the public.
(e) None of the above.
(5) Corporation income (profits tax is defined as a tax levied on:
(a) All dividends paid to stock holders. (b) The value added production by each corporation. (c) The corporation’s total net sales. (d) Additions to corporate retained earnings. (e) Dividends paid plus undistributed profits.
(f) All of the above.
(6) In Pakistan the largest item of non development budget has always been:
(a) Debt servicing (b) Defense (c) Civil Administration (d) Subsidies (e) none of the above.
(7) In GNP and NNP statistics, “investment” includes:
(a) Any durable product produced through the agency of Government, such as new roads. (b) Any purchase of a new common stock issue. (c) Any increase in the amount of year and inventories over their year beginning amount. (d) Any commodity bought by a consumer but not fully consumed by the year end. (e) None of the above.
(8) During the last financial year (1999 – 2000) the tax yielding the largest revenue for the Federal Government was:
(a) Income tax. (b) Value added tax. (c) Excise duty. (d) Customs duty. (e) Sales tax. (f) Surcharge (petroleum &Gas) (g) Property tax.
(9) If the amount of investment suddenly falls other things being equal:
(a) GNP will begin to fall & continue as such but the ultimate fall will be less than the I fall. (b) GNP will fall immediately by an amount much greater than the I fall but will show no further tendency to fall. (c) GNP will fall immediately by an amount less than the I fall. (d) It is more likely that GNP will rise rather than fall. (e) GNP will begin to fall and continue as such until it has fallen by an amount considerably greater than the I fall.
(10) Money supply will increase whenever commercial banks:
(a) Increase their deposits with the State Bank.(b) Increase their loans to the public. (c) Increase their demand deposit Liabilities by receiving coins or bills from the public as a deposit. (d) Withdraw part of their deposits from the ‘State Bank. (e) Reduce their demand deposit liabilities by paying out part of these accounts in the form of coins or paper bills. ‘
(11) The “Marginal efficiency of investment” Schedule means:
(a) A schedule showing how – the total volume of investment spending will change with changes in the interest rate. (b) A schedule showing how the true rate of interest on an interest bearing security will vary as its market price varies. (c) An indicator of the extent to which changes in investment spending will change the level of GNP. (d) An estimate of the rate of profit which any investment project will yield to it’s owner. (e) None of the above.
(12) If Government increase it’s expenditure with no increase in tax rates, the component parts of GNP are to be affected as follows:
(a) The G (Government) component of, GNP will rise but there will be a partial offsetting reduction in the C component. (b) G will rise but there is no assured reason for expecting C to rise or to fall. (c) C will rise and so will C.
(d) C will rise but there is no assured reason for G to rise or fall. (e) both G and C will fall.
(13) The burden of a large domestic debt is described as follows:
(a) There is no burden at all.
(b) The burden is essentially comparable to that of an externally held debt. .
(c) There is no direct burden to be borne by future generation although such generation may have to bear an indirect burden.’
(d) Although there is an direct burden, it will not be borne by future generations.
(e) By none of’ these.
(14) The most serious objection to the parity pricing program for farm goods has been that:
(a) Most of the benefits ‘have gone to the rich ‘farmers.
(b) It is inconsistent with the policy of improving farm technology and output through research’.
(c) This policy of keeping price above the market or competitive price has encouraged. resources to star in agriculture ‘instead of moving towards industry.
(d) The price support program has converted an elastic demand curve for farm products into an in-elastic one
(15) All of’ the following are recognized as aims of agricultural price programs except:
(a) Dampening the fluctuations in agricultural commodity prices.
(b) Maintaining some purchasing power of agricultural’ households.
(c) Shifting’- the elastic demand for agricultural commodities.
(d) Appeasing some politically powerful special interest groups.
(16) During the last eight years, the per capita income in Pakistan has been: ‘
(a) Increasing substantially because of decline in population growth (b) Decreasing. (c). Increasing only marginally. (d) Constant.
(17) Since 1960, the rate of economic -growth’ in ‘the country has been:
(a) On the decline continuously. (b) Increasing continuously. (c) Increasing occasionally. (d) Static in real terms.
(18) The share of manufacturing sector in Pakistan’s GNP is:
(a) 35% (b) 25% (c) 17% (d) 07%
(19) The growth’ in large scale manufacturing during the (July 1999 – March 2000) period was:
(a) 06% (b) 4.7% (c) 03%’ (d) 0%.
(20) The official unemployment rate in Pakistan is:
(a) 15% (b) 10.6% (c) 6.1% ‘(d) 04%.