UGC NET Commerce December 2023 Question PaperPaper 2 with Answer Key

100 questions with the answer key and explanations.

1. Question 1

   ________ as defined under the Foreign Trade Policy (FTP), implemented by Director General of Foreign Trade has the main aim to "mentor new and potential exporters on the intricacies of foreign trade through counselling, training and outreach programmes" so that they can get into international trade.

   1. ANiryat Bharat Scheme
   2. BNiryat Bandhu Scheme
   3. CNiryat Benefit Scheme
   4. DNiryat Border Scheme

   Answer: (B) Niryat Bandhu Scheme

   Explanation

   The Niryat Bandhu Scheme was introduced by the Directorate General of Foreign Trade (DGFT) under the Foreign Trade Policy. It focuses on mentoring new and potential exporters through counselling, training, and outreach programmes to help them enter international trade.

   • A. Niryat Bharat Scheme — incorrect. No mentoring scheme under the Foreign Trade Policy operates under this title.
   • B. Niryat Bandhu Scheme — correct. 'Bandhu' signifies a friend or guide to assist first-time entrepreneurs.
   • C. Niryat Benefit Scheme — incorrect. This is not an official scheme recognized by DGFT.
   • D. Niryat Border Scheme — incorrect. The programme is nationwide and not confined to border areas.

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2. Question 2

   ________ is a marketing term for any design to prompt an immediate response or encourage an immediate sale.

   1. ACall for Promotion
   2. BCall for Activity
   3. CCall to Action
   4. DCall to Aspiration

   Answer: (C) Call to Action

   Explanation

   A Call to Action (CTA) is a marketing device designed to prompt an immediate response or encourage an immediate sale from prospective customers.

   • A. Call for Promotion — incorrect. This is not standard marketing terminology for response prompts.
   • B. Call for Activity — incorrect. Activity is generic and does not represent conversion terminology.
   • C. Call to Action — correct. Common CTA examples include imperatives such as 'Buy Now', 'Subscribe Today', or 'Sign Up'.
   • D. Call to Aspiration — incorrect. Aspiration relates to brand positioning rather than an immediate conversion prompt.

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3. Question 3

   The exporting firm is termed ‘rider’ where the other firm with an established distribution channel in the target country is termed as ‘Carrier’. This phenomenon is known as:

   1. ACounter Trade
   2. BBarter
   3. CPiggy Backing
   4. DSwitch Trading

   Answer: (C) Piggy Backing

   Explanation

   Piggybacking is an international distribution arrangement in which an exporting firm without foreign distribution channels (the rider) utilizes the established international network of another company (the carrier) to market its products abroad.

   • A. Counter Trade — incorrect. Countertrade refers to international trade by exchange of goods rather than currency payments.
   • B. Barter — incorrect. Barter is the direct exchange of goods without any monetary transaction.
   • C. Piggy Backing — correct. The rider rides on the carrier firm's distribution infrastructure in the target country.
   • D. Switch Trading — incorrect. Switch trading involves a third party buying a firm's counterpurchase credits at a discount.

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4. Question 4

   In International Commercial Terms (INCOTERMES), identify the one, under which the delivery of goods to the named place of destination (discharge) takes place at the seller's expense. Buyers assumes the cargo insurance, import custom clearance, payment of custom duties, taxes and other costs and risk.

   1. ACarriage and Insurance Paid To (CIP)
   2. BCost, Insurance and Freight (CIF)
   3. CCarriage Paid To (CPT)
   4. DCost and Freight (CFR)

   Answer: (C) Carriage Paid To (CPT)

   Explanation

   Under Carriage Paid To (CPT), the seller pays for the carriage of goods up to the named place of destination. The buyer assumes the risk once goods are handed to the carrier, including cargo insurance, import customs clearance, duties, and taxes.

   • A. Carriage and Insurance Paid To (CIP) — incorrect. Under CIP, the seller is obligated to purchase cargo insurance for the buyer.
   • B. Cost, Insurance and Freight (CIF) — incorrect. Under CIF, the seller pays insurance, and it applies strictly to maritime transport.
   • C. Carriage Paid To (CPT) — correct. The seller bears transport costs to the named destination while the buyer procures insurance and handles import clearance.
   • D. Cost and Freight (CFR) — incorrect. CFR applies only to sea and inland waterway transport to a named port, whereas CPT applies to any transport mode to a named place.

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5. Question 5

   In which ratio, will the remaining partners compensate the retiring partner for a share of goodwill?

   1. AProfit-sharing ratio
   2. BSacrificing ratio
   3. CGaining ratio
   4. DCapital ratio

   Answer: (C) Gaining ratio

   Explanation

   Upon the retirement of a partner, the continuing partners acquire the retiring partner's share in future profits. They compensate the retiring partner for goodwill in their gaining ratio.

   • A. Profit-sharing ratio — incorrect. Using the old or new profit-sharing ratio would misallocate the cost among the continuing partners.
   • B. Sacrificing ratio — incorrect. The sacrificing ratio applies to admission of a new partner where old partners surrender profit shares.
   • C. Gaining ratio — correct. Continuing partners debit their capital accounts in the gaining ratio and credit the retiring partner's capital account.
   • D. Capital ratio — incorrect. Compensation depends on the gain in profit share rather than capital balances.

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6. Question 6

   Which one of the following accounting concepts and conventions consider it reasonable to use the historical cost to record long-lived assets?

   1. AThe entity concept
   2. BGoing concern convention
   3. CMateriality convention
   4. DThe periodicity convention

   Answer: (B) Going concern convention

   Explanation

   The Going Concern convention assumes an enterprise will continue its operations indefinitely with no intention of liquidation. Because fixed assets are used to generate revenue over multiple operating cycles rather than sold immediately, historical cost less depreciation is recognized rather than current liquidation value.

   • A. The entity concept — incorrect. The business entity concept separates the owner from the enterprise.
   • B. Going concern convention — correct. Long-lived assets are retained for operational use, making historical cost accounting appropriate.
   • C. Materiality convention — incorrect. Materiality dictates reporting items that influence economic decisions of users.
   • D. The periodicity convention — incorrect. Periodicity divides the firm's economic life into regular reporting intervals.

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7. Question 7

   Luxmi industries issued shares of Rs. 1000 at a premium of Rs. 10 per share, payable Rs. 20 on application, Rs. 35 on allotment (including premium), and the balance on the first and final call. Mr. X who held 200 shares has paid only the application money and these shares were subsequently forfeited by the company. In this regard, by which amount share forfeiture account will be credited?

   1. ARs. 4000
   2. BRs. 2000
   3. CRs. 3000
   4. DRs. 200

   Answer: (A) Rs. 4000

   Explanation

   The Share Forfeiture Account is credited with the exact amount paid up by the defaulting shareholder towards the face value of the forfeited shares.

   Amount credited = Number of forfeited shares × Application money received per share
   Amount credited = 200 × Rs. 20
   Amount credited = Rs. 4,000

   • A. Rs. 4000 — correct. 200 shares paid at Rs. 20 application money equals Rs. 4,000.
   • B. Rs. 2000 — incorrect. Represents only 100 shares at Rs. 20.
   • C. Rs. 3000 — incorrect. Arbitrary calculation that fails to multiply shares by application money.
   • D. Rs. 200 — incorrect. Represents Rs. 1 per share rather than the Rs. 20 collected.

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8. Question 8

   Which of the following frameworks is considered as the Open International Standard for Digital Business Reporting?

   1. ACSR reporting
   2. BTBL reporting
   3. CXBRL reporting
   4. DPPP reporting

   Answer: (C) XBRL reporting

   Explanation

   XBRL (eXtensible Business Reporting Language) is the open international standard managed by XBRL International for exchanging and communicating business, financial, and performance data digitally.

   • A. CSR reporting — incorrect. Corporate Social Responsibility reporting is a disclosure practice rather than a digital syntax standard.
   • B. TBL reporting — incorrect. Triple Bottom Line reporting measures economic, social, and environmental performance.
   • C. XBRL reporting — correct. XBRL provides standardized machine-readable tags for digital regulatory reporting across global capital markets.
   • D. PPP reporting — incorrect. Public-Private Partnership is an infrastructure procurement model.

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9. Question 9

   Which one of the following statements is the most relevant to the substitution effect?

   1. AIn the real world, substitution effect is much larger than the income effect
   2. BMost of the goods are not reasonable substitutes
   3. CIn reality, the income effect represents its predominance over the substitution effect
   4. DSubstitution and income effects cannot be separated easily

   Answer: (A) In the real world, substitution effect is much larger than the income effect

   Explanation

   For most consumer goods, expenditure on any single commodity constitutes only a small proportion of a consumer's total budget. Consequently, the income effect of a price change is small, making the substitution effect significantly larger in magnitude.

   • A. In the real world, substitution effect is much larger than the income effect — correct. Because budget shares for individual goods are modest, the substitution effect dominates the price response.
   • B. Most of the goods are not reasonable substitutes — incorrect. Most consumer goods have viable substitutes across categories.
   • C. In reality, the income effect represents its predominance over the substitution effect — incorrect. The income effect predominates only when a single item absorbs a very large fraction of household income.
   • D. Substitution and income effects cannot be separated easily — incorrect. Economic theory decomposes total price effect into substitution and income components using Hicksian or Slutsky techniques.

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10. Question 10

    Identify the source of oligopoly which is also applicable to monopoly firms:

    1. AEconomies of scale may operate over a small range of outputs
    2. BHuge capital investments and specialized inputs are required to enter the market
    3. CLarge firms may own a patent for the exclusive right to produce a commodity
    4. DNew firms have chances to win customer loyalty

    Answer: (B) Huge capital investments and specialized inputs are required to enter the market

    Explanation

    The requirement of huge capital outlays and specialized inputs acts as a formidable barrier to entry in both monopoly and oligopolistic market structures, such as telecommunications, aerospace, and steel.

    • A. Economies of scale may operate over a small range of outputs — incorrect. To create a barrier to entry, economies of scale must operate over a sufficiently large range of outputs.
    • B. Huge capital investments and specialized inputs are required to enter the market — correct. Substantial upfront sunk costs and specialized physical inputs deter potential entrants in both markets.
    • C. Large firms may own a patent for the exclusive right to produce a commodity — incorrect. In an oligopoly, patents are held by multiple competing firms rather than providing an exclusive market-wide monopoly barrier.
    • D. New firms have chances to win customer loyalty — incorrect. Established customer loyalty favors incumbents and deters new entrants rather than facilitating entry.

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11. Question 11

    Which one of the following statements does not support the concept of third degree price discrimination?

    1. AThe firm must have monopoly power
    2. BThis type of price discrimination is most likely to occur in the manufacturing industries
    3. CThe firm must be able to keep the two markets separate
    4. DThe price elasticity and demand for the commodity must be different in the two markets

    Answer: (B) This type of price discrimination is most likely to occur in the manufacturing industries

    Explanation

    Third-degree price discrimination requires separating customer segments with different price elasticities of demand and preventing arbitrage between them. This is common in service industries (railways, cinema tickets, electricity) where resale is physically impossible, whereas in manufacturing industries tangible goods can easily be bought and resold.

    • A. The firm must have monopoly power — supports price discrimination. A price taker in perfect competition cannot set differentiated prices.
    • B. This type of price discrimination is most likely to occur in the manufacturing industries — does not support. Resale and arbitrage across geographic markets make price discrimination difficult for manufactured goods.
    • C. The firm must be able to keep the two markets separate — supports price discrimination. Market separation prevents leakages and resale.
    • D. The price elasticity and demand for the commodity must be different in the two markets — supports price discrimination. Differentiated pricing is profitable only when elasticities vary across groups.

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12. Question 12

    Which one of the following concepts measures the amount of capital that the firm can give up by using one additional unit of labour and still remain on the same isoquant?

    1. ADiminishing Marginal Rate of Substitution
    2. BEconomic Trade-off Region
    3. CDiminishing Marginal Rate of Technical Substitution
    4. DDiminishing Marginal Utility

    Answer: (C) Diminishing Marginal Rate of Technical Substitution

    Explanation

    The Marginal Rate of Technical Substitution (MRTS) of labour for capital measures the reduction in capital required to keep total output unchanged along an isoquant when one extra unit of labour is employed.

    MRTS of labour for capital = -ΔK / ΔL = MP of labour / MP of capital

    • A. Diminishing Marginal Rate of Substitution — incorrect. MRS applies to consumer indifference curves between two consumer goods.
    • B. Economic Trade-off Region — incorrect. Refers to the area between ridge lines on an isoquant map.
    • C. Diminishing Marginal Rate of Technical Substitution — correct. Measures factor substitution in production while staying on the same isoquant.
    • D. Diminishing Marginal Utility — incorrect. Pertains to consumer satisfaction from successive units of a good.

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13. Question 13

    Which of the following theories of capital structure articulates that a firm borrows up to the point where the tax benefit from extra debt is exactly equal to the lost that comes from the increased probability of financial distress?

    1. AThe static theory
    2. BNet income approach
    3. CModigliani-Miller theory
    4. DNet operating income approach

    Answer: (A) The static theory

    Explanation

    The Static Trade-off Theory of capital structure posits that a firm balances the corporate tax savings of debt financing against the expected costs of financial distress and bankruptcy. The optimal capital structure is reached where the marginal tax benefit equals the marginal cost of financial distress.

    • A. The static theory — correct. It trade-offs tax shields against financial distress costs to identify an optimal debt ratio.
    • B. Net income approach — incorrect. David Durand's Net Income approach implies that debt always reduces overall cost of capital.
    • C. Modigliani-Miller theory — incorrect. The original 1958 proposition establishes capital structure irrelevance in perfect capital markets.
    • D. Net operating income approach — incorrect. Argues that the overall cost of capital remains constant regardless of leverage.

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14. Question 14

    When a target company makes a counter bid for the stock of the bidder, the defensive strategy in reference is called?

    1. AGreenmail
    2. BPoison pill
    3. CPacman defense
    4. DGolden parachute

    Answer: (C) Pacman defense

    Explanation

    The Pac-Man defense is a hostile takeover defense strategy where the targeted company retaliates by making a counter-tender offer to acquire the bidder firm.

    • A. Greenmail — incorrect. Target pays a premium to buy back its own shares from a hostile bidder to avert a takeover.
    • B. Poison pill — incorrect. Target issues rights allowing existing shareholders to purchase additional shares at a deep discount, diluting the acquirer.
    • C. Pacman defense — correct. Named after the arcade game, the target turns around and attempts to swallow the predator.
    • D. Golden parachute — incorrect. Lucrative severance compensation awarded to top executives if terminated following a takeover.

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15. Question 15

    The earning per share for Avanti corporation is Rs. 4.0. The rate of return on investments is 16 per cent and the return required by its shareholders is 12 percent. What will be the price per share as per the Walter model, if the payout ratio is 40 per cent?

    1. ARs 24
    2. BRs 36
    3. CRs 40
    4. DRs 72

    Answer: (C) Rs 40

    Explanation

    Walter's dividend valuation model defines market price per share as:

    P = [D + (r / Ke) × (E - D)] / Ke

    Given:
    E = Rs. 4.0
    Payout ratio = 40%
    D = 40% of Rs. 4.0 = Rs. 1.60
    E - D = Rs. 4.0 - Rs. 1.60 = Rs. 2.40
    r = 16% = 0.16
    Ke = 12% = 0.12

    Calculation:
    r / Ke = 0.16 / 0.12 = 4 / 3
    (r / Ke) × (E - D) = (4 / 3) × 2.40 = Rs. 3.20
    Numerator = 1.60 + 3.20 = Rs. 4.80
    P = 4.80 / 0.12 = Rs. 40

    • A. Rs 24 — incorrect. Results from incorrect deduction of retained earnings.
    • B. Rs 36 — incorrect. Omits the return adjustment on retained earnings.
    • C. Rs 40 — correct. The formula yields exactly Rs. 40 per share.
    • D. Rs 72 — incorrect. Miscalculates the capitalization factor.

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16. Question 16

    Which one of the following instruments is often used to protect the value of a foreign currency denominated transaction?

    1. AForward contract
    2. BForward swap
    3. CForward hedge
    4. DForward premium

    Answer: (A) Forward contract

    Explanation

    A forward contract is a customized agreement between two parties to exchange a specified amount of currency at a predetermined exchange rate on an agreed future date. It is the primary financial instrument used to hedge and protect foreign currency transactions against exchange rate volatility.

    • A. Forward contract — correct. A contractual instrument locking in future exchange rates to eliminate currency risk.
    • B. Forward swap — incorrect. A swap combines a spot and forward transaction rather than being a single transaction hedge.
    • C. Forward hedge — incorrect. A forward hedge is the name of the risk-management technique, not the underlying contract instrument itself.
    • D. Forward premium — incorrect. The price difference where forward exchange rate exceeds spot rate.

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17. Question 17

    A discrete probability distribution________.

    1. Ais a listing of all possible values of the random variable
    2. Bassigns a probability to each possible value of the random variable
    3. Ccan assume the value between -1 and +1
    4. Dis independent of the parameters of the distribution

    Answer: (B) assigns a probability to each possible value of the random variable

    Explanation

    A discrete probability distribution defines a functional relationship that assigns a specific probability to each distinct numerical value that a discrete random variable can take.

    • A. is a listing of all possible values of the random variable — incorrect. Listing only values defines the sample space, not a probability distribution.
    • B. assigns a probability to each possible value of the random variable — correct. It maps each mutually exclusive discrete outcome to its corresponding probability.
    • C. can assume the value between -1 and +1 — incorrect. Probabilities are strictly bounded between 0 and 1.
    • D. is independent of the parameters of the distribution — incorrect. Probability distributions are defined directly by their parameters, such as n and p in a binomial distribution.

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18. Question 18

    The price earnings ratio for firms in a certain industry follows the normal distribution. A firm's price-earnings ratio has a standardized value (Z) = 1.0 and it is included in the highest ______ of firms in the industry.

    1. A99.73%
    2. B68.27%
    3. C15.87%
    4. D34.13%

    Answer: (C) 15.87%

    Explanation

    In a standard normal distribution, the area under the curve to the right of Z = 1.0 represents the upper tail of highest values.

    Cumulative probability up to Z = 1.0 is 0.8413
    Upper tail area = 1.0000 - 0.8413 = 0.1587 or 15.87%

    • A. 99.73% — incorrect. Corresponds to the area within ±3 standard deviations.
    • B. 68.27% — incorrect. Corresponds to the area within ±1 standard deviation.
    • C. 15.87% — correct. The top tier of values above Z = +1.0 comprises 15.87% of the distribution.
    • D. 34.13% — incorrect. Represents the area between the mean and Z = 1.0.

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19. Question 19

    In one-factor ANOVA, the computed F-value will be negative:

    1. Awhen there is no difference in the treatment of means.
    2. Bwhen there is no difference within treatments.
    3. Cwhen SST (total variance) is larger than SSE (error variance)
    4. Dunder no circumstances

    Answer: (D) under no circumstances

    Explanation

    In analysis of variance, the F-ratio is computed as the ratio of between-treatment mean square to within-treatment error mean square:

    F = MS between / MS within

    Because both numerator and denominator represent sums of squared deviations divided by degrees of freedom, both terms are strictly non-negative. Consequently, the calculated F-statistic can never be negative under any circumstances.

    • A. when there is no difference in the treatment of means. — incorrect. When sample means are equal, F equals 0, not a negative number.
    • B. when there is no difference within treatments. — incorrect. If within-group variance is 0, F approaches infinity.
    • C. when SST (total variance) is larger than SSE (error variance) — incorrect. SST is always greater than or equal to SSE because SST = SSB + SSE.
    • D. under no circumstances — correct. Sums of squared deviations can never be negative, making a negative F-value mathematically impossible.

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20. Question 20

    In a certain population, 22% of people are smokers. 57% of people are males and 12% males are smokers. If a person is chosen at random from the population, what is that probability that selected person is either a male or a smoker?

    1. A0.79
    2. B0.22
    3. C0.45
    4. D0.67

    Answer: (D) 0.67

    Explanation

    By the addition theorem of probability for non-mutually exclusive events:

    P(Male or Smoker) = P(Male) + P(Smoker) - P(Male and Smoker)

    Given probabilities:
    P(Male) = 0.57
    P(Smoker) = 0.22
    P(Male and Smoker) = 0.12

    Calculation:
    P(Male or Smoker) = 0.57 + 0.22 - 0.12
    P(Male or Smoker) = 0.79 - 0.12 = 0.67

    • A. 0.79 — incorrect. Simply adds 0.57 and 0.22 without subtracting the joint probability.
    • B. 0.22 — incorrect. Represents only the smoker probability.
    • C. 0.45 — incorrect. Represents non-smoking males rather than the union.
    • D. 0.67 — correct. Subtracting the overlapping probability gives 0.67.

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21. Question 21

    Effective mentoring requires trust and the level of trust reflects the mentor’s:

    1. ACompetence, consistency, communication abilities and control sharing readiness
    2. BConcerned, cooperativeness, communication abilities and coordination skills
    3. CCompetence, consistency, complexity and communication abilities
    4. DCommunication abilities, competence, concerned behaviour, control sharing readiness

    Answer: (A) Competence, consistency, communication abilities and control sharing readiness

    Explanation

    Trust in mentoring relationships is built on four core managerial attributes: professional competence, behavioral consistency, clear communication abilities, and willingness to share control and empower the mentee.

    • A. Competence, consistency, communication abilities and control sharing readiness — correct. These four dimensions reflect competence, reliability, openness, and empowerment.
    • B. Concerned, cooperativeness, communication abilities and coordination skills — incorrect. Lacks technical competence and consistency.
    • C. Competence, consistency, complexity and communication abilities — incorrect. Complexity hinders rather than fosters interpersonal trust.
    • D. Communication abilities, competence, concerned behaviour, control sharing readiness — incorrect. Omits consistency, which is indispensable for trust.

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22. Question 22

    Which one of the following consists of physical working conditions, work schedule, incentives and the number of people with whom the employee would normally interact?

    1. AJob profile
    2. BJob content
    3. CJob context
    4. DJob specification

    Answer: (C) Job context

    Explanation

    Job context encompasses the operational, physical, and social environment surrounding work performance, including working conditions, working hours, incentives, and coworker interactions.

    • A. Job profile — incorrect. A job profile provides an overview of duties and candidate qualifications.
    • B. Job content — incorrect. Job content relates strictly to actual tasks, activities, and functional duties performed.
    • C. Job context — correct. Describes the physical setting, schedule, incentive structure, and social environment in which the job is executed.
    • D. Job specification — incorrect. Details the qualifications, knowledge, skills, and traits required of a job holder.

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23. Question 23

    Which one of the following beliefs and behaviors does not characterise ‘collectivism’?

    1. ARelations are moral not contractual
    2. BRelations take precedence over tasks
    3. CIndividual opinions are independent of collective opinions
    4. DMaintaining harmony is highly valued

    Answer: (C) Individual opinions are independent of collective opinions

    Explanation

    In Hofstede's cultural framework, collectivism emphasizes group solidarity, interpersonal cohesion, and group consensus. Individual opinions in collectivist cultures are shaped by and subordinate to group norms, whereas autonomous and independent personal opinions are characteristic of individualism.

    • A. Relations are moral not contractual — characterises collectivism. Members view relationships through enduring moral obligations.
    • B. Relations take precedence over tasks — characterises collectivism. Preserving relationships is prioritized over transactional tasks.
    • C. Individual opinions are independent of collective opinions — does not characterise collectivism. In-group norms dictate opinions, making independence a trait of individualist societies.
    • D. Maintaining harmony is highly valued — characterises collectivism. Group harmony and avoiding direct confrontation are central values.

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24. Question 24

    Honeywell Inc's move from a hierarchical management structure to a much flatter and team-based structure is a good description of which one of the following?

    1. ACentralisation
    2. BDecentralisation
    3. CSpan of control
    4. DWork specialization

    Answer: (B) Decentralisation

    Explanation

    Decentralisation involves dispersing decision-making authority and operational autonomy down to self-managed teams and lower levels of an enterprise, replacing top-down bureaucratic control.

    • A. Centralisation — incorrect. Centralisation concentrates authority at executive leadership.
    • B. Decentralisation — correct. Flattening layers and empowering teams transfers decision rights away from central authority.
    • C. Span of control — incorrect. Describes the number of direct reports per supervisor rather than structural authority distribution.
    • D. Work specialization — incorrect. Refers to task division rather than authority delegation.

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25. Question 25

    Companies use ________ when they lack financial resources to carry out direct marketing and when they can earn more by doing so.

    1. AIntermediaries
    2. BInternationalisation
    3. CInfluencers
    4. DInnovation

    Answer: (A) Intermediaries

    Explanation

    Marketing intermediaries (distributors, wholesalers, and retailers) provide specialized distribution infrastructure and market coverage, allowing producers without capital for direct distribution to market products efficiently and achieve higher returns.

    • A. Intermediaries — correct. Middlemen bridge the gap between manufacturer and consumer when direct selling capital is limited.
    • B. Internationalisation — incorrect. Expanding into foreign markets requires substantial additional financial resources.
    • C. Influencers — incorrect. Influencers act as promotional agents rather than distribution channels.
    • D. Innovation — incorrect. Innovation involves product or process development rather than marketing channel structure.

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26. Question 26

    Which one of the following committees has suggested the establishment of NBFCs' regulatory framework?

    1. ARaj Study Group (1975)
    2. BChakravarty Committee (1985)
    3. CVaghul Committee (1987)
    4. DShah Committee (1992)

    Answer: (D) Shah Committee (1992)

    Explanation

    The Working Group on Financial Companies, chaired by Dr. A.C. Shah (Shah Committee, 1992), submitted recommendations to the Reserve Bank of India that laid the foundation for a comprehensive regulatory and supervisory framework for Non-Banking Financial Companies (NBFCs).

    • A. Raj Study Group (1975) — incorrect. Examined the acceptance of deposits by non-banking financial institutions.
    • B. Chakravarty Committee (1985) — incorrect. Reviewed the working of the Indian monetary system.
    • C. Vaghul Committee (1987) — incorrect. Formulated proposals for developing the Indian money market.
    • D. Shah Committee (1992) — correct. Recommended compulsory registration, prudential capital adequacy norms, and credit rating standards for NBFCs.

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27. Question 27

    The sequential stages of moral development in business organisations are characterised by:

    1. AConceptualised disposition, consistency and harmony, principled oriented
    2. BConsistency and harmony, conceptualised disposition, principled oriented
    3. CPrincipled oriented, conventional and preconventional
    4. DPreconventional, conventional, principled oriented

    Answer: (D) Preconventional, conventional, principled oriented

    Explanation

    Lawrence Kohlberg's framework of moral development traces moral reasoning through three progressive levels: preconventional, conventional, and post-conventional or principled.

    • A. Conceptualised disposition, consistency and harmony, principled oriented — incorrect. Uses arbitrary descriptive phrases rather than standard developmental levels.
    • B. Consistency and harmony, conceptualised disposition, principled oriented — incorrect. Out-of-order and non-standard terminology.
    • C. Principled oriented, conventional and preconventional — incorrect. Inverts the developmental sequence from highest to lowest.
    • D. Preconventional, conventional, principled oriented — correct. Reflects the sequence from self-interest obedience, to societal conformity, to universal ethical principles.

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28. Question 28

    Which one of the following are disposed to promote financial inclusion?

    1. APoor quality of services rendered
    2. BHigh transaction costs
    3. CUniversal access to financial services
    4. DLack of trust in the system

    Answer: (C) Universal access to financial services

    Explanation

    Financial inclusion is defined as the process of ensuring access to appropriate financial products and services needed by all sections of society at an affordable cost.

    • A. Poor quality of services rendered — incorrect. Substandard service discourages individuals from participating in formal finance.
    • B. High transaction costs — incorrect. Costly transactions act as a major barrier to financial inclusion.
    • C. Universal access to financial services — correct. Providing accessible banking and payment channels directly furthers financial inclusion.
    • D. Lack of trust in the system — incorrect. Institutional mistrust drives consumers away from formal financial channels.

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29. Question 29

    Which one of the following digital payment systems is developed and managed by the National Payments Corporation of India?

    1. APaytm
    2. BBharatPe
    3. CMastercard
    4. DRuPay

    Answer: (D) RuPay

    Explanation

    RuPay is India's indigenous card payment network conceived and operated by the National Payments Corporation of India (NPCI) to establish a domestic, interoperable retail electronic payment system.

    • A. Paytm — incorrect. A private Indian payments and financial services company.
    • B. BharatPe — incorrect. A private fintech firm providing merchant QR payment services.
    • C. Mastercard — incorrect. An American multinational payment card services corporation.
    • D. RuPay — correct. Developed and managed directly by NPCI as India's domestic payment scheme.

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30. Question 30

    Which amongst the following methods is not a method of generating sales leads in personal selling?

    1. AReferrals
    2. BNetworking
    3. CCoupons
    4. DCold calls

    Answer: (C) Coupons

    Explanation

    In personal selling, lead generation involves identifying potential individual or institutional buyers. Coupons are consumer sales promotion tools designed to incentivize immediate retail trial and purchases rather than prospecting methods used by sales personnel.

    • A. Referrals — generates leads. Sales representatives obtain prospective buyer recommendations from satisfied existing clients.
    • B. Networking — generates leads. Sales professionals cultivate business relationships at trade shows, conferences, and civic events.
    • C. Coupons — does not generate personal selling leads. Coupons are non-personal price-discount promotion instruments.
    • D. Cold calls — generates leads. Sales representatives contact unacquainted prospects directly to assess potential interest.

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31. Question 31

    _______ takes into account a host of inputs, such as buyer's image of the product performance, the channel deliverables, the warranty quality, customer support and softer attributes such as the suppliers reputation, trust worthiness and esteem.

    1. ATarget rate-of-return pricing
    2. BAuction-type pricing
    3. CEconomic-value-to-customer pricing
    4. DCompetitive pricing

    Answer: (C) Economic-value-to-customer pricing

    Explanation

    Economic-value-to-customer (perceived-value) pricing bases product price on the customer's perceived bundle of functional, emotional, and relational benefits, incorporating performance reputation, warranty, service delivery, and supplier prestige.

    • A. Target rate-of-return pricing — incorrect. Sets price to achieve a predetermined rate of return on invested capital.
    • B. Auction-type pricing — incorrect. Prices fluctuate dynamically based on competitive bids from buyers or sellers.
    • C. Economic-value-to-customer pricing — correct. Matches price against the customer's perceived total product utility and supplier attributes.
    • D. Competitive pricing — incorrect. Determines pricing primarily on competitors' prevailing market price points.

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32. Question 32

    The present value of future profits, the individual or segment will generate over a lifetime relationship with a brand or firm, is known as

    1. ALifelong Value
    2. BLifetime Value
    3. CLonglife Value
    4. DLongterm value

    Answer: (B) Lifetime Value

    Explanation

    Customer Lifetime Value (CLV or LTV) measures the net present value of the stream of future profits expected from an individual customer or customer segment over the duration of their relationship with the enterprise.

    • A. Lifelong Value — incorrect. Non-standard colloquial phrase.
    • B. Lifetime Value — correct. Represents the discounted net financial contribution of a customer across the customer lifecycle.
    • C. Longlife Value — incorrect. Not an established marketing metric.
    • D. Longterm value — incorrect. Too generic and not the formal customer equity term.

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33. Question 33

    A charitable trust (registered under section 12 AB of the Income Tax Act) is registered under GST in New Delhi. It provided yoga training to middle-aged people, coaching for Basket-ball to teenagers and skill development services to persons over the age of 65 years residing in New Delhi in the month of July. This trust is liable to pay GST on:

    1. AYoga training
    2. BSkill-development services
    3. CCoaching for basket-ball
    4. DCoaching for basket-ball and Yoga training

    Answer: (B) Skill-development services

    Explanation

    Under GST Notification No. 12/2017-Central Tax (Rate), charitable activities by an entity registered under Section 12AB are exempt from GST. Advancement of yoga and sports training by charitable entities are specifically exempt, whereas commercial skill development services to senior citizens without an approved government vocational scheme remain taxable.

    • A. Yoga training — exempt. Advancement of yoga is an express statutory charitable activity under Entry 1.
    • B. Skill-development services — liable to pay GST. General skill training provided by a trust outside designated national skill schemes does not qualify for charitable exemption.
    • C. Coaching for basket-ball — exempt. Training or coaching in sports by a registered charitable trust is specifically exempt under Entry 80.
    • D. Coaching for basket-ball and Yoga training — incorrect. Both activities enjoy explicit tax exemption under GST regulations.

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34. Question 34

    Which one of the following is invalid for the relationship among the agent, the sub-agent and the principal?

    (Source-level note: Options C and D preserve the source text spelling "principle")

    1. ASub-agent works under the control and on the directions of the agent
    2. BSub-agent is responsible to the agent only
    3. CPrivity of contract exists between the principle and the sub-agent
    4. DAgent is responsible to the principle for the acts of the sub-agent

    Answer: (C) Privity of contract exists between the principle and the sub-agent

    Explanation

    Under Section 192 of the Indian Contract Act, 1872, there is no privity of contract between the principal and a properly appointed sub-agent. The sub-agent is responsible directly to the agent, and the agent is responsible to the principal for the sub-agent's acts.

    • A. Sub-agent works under the control and on the directions of the agent — valid. Section 191 defines a sub-agent as employed by and acting under the control of the agent.
    • B. Sub-agent is responsible to the agent only — valid. Under Section 192, a sub-agent answers only to the agent, except in cases of fraud or wilful wrong.
    • C. Privity of contract exists between the principle and the sub-agent — invalid. There is no direct contractual link between the principal and the sub-agent.
    • D. Agent is responsible to the principle for the acts of the sub-agent — valid. The agent remains fully liable to the principal for the sub-agent's actions.

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35. Question 35

    In case of anti-competitive activities by a firm, the Competition Commission of India can impose a penalty which shall be not more than

    1. AFive percent of the average turnover/income of the firm of the three preceding financial years.
    2. BTen percent of the average turnover/income of firm of the three preceding financial years
    3. CFifteen percent of the average turnover/income of firm of the three preceding financial years
    4. DFive percent of the average turnover/income of firm of the five preceding financial years

    Answer: (B) Ten percent of the average turnover/income of firm of the three preceding financial years

    Explanation

    Section 27(b) of the Competition Act, 2002 empowers the Competition Commission of India (CCI) to impose a monetary penalty of not more than ten percent of the average turnover or income of the firm for the three preceding financial years for anti-competitive agreements or abuse of dominant position.

    • A. Five percent of the average turnover/income of the firm of the three preceding financial years. — incorrect. The statutory maximum ceiling is ten percent, not five percent.
    • B. Ten percent of the average turnover/income of firm of the three preceding financial years — correct. Matches the statutory penalty limit under Section 27(b).
    • C. Fifteen percent of the average turnover/income of firm of the three preceding financial years — incorrect. Exceeds the permissible ceiling prescribed by the Act.
    • D. Five percent of the average turnover/income of firm of the five preceding financial years — incorrect. The law uses a three-year average, not five years.

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36. Question 36

    Which one of the following is an exception to the doctrine of Constructive Notice.

    1. ADoctrine of Subrogation
    2. BDoctrine of Ultra Vires
    3. CCorporate Veil
    4. DTurquand Rule

    Answer: (D) Turquand Rule

    Explanation

    The Doctrine of Constructive Notice presumes that outsiders dealing with a company are aware of its registered public charter. The Turquand Rule (Doctrine of Indoor Management, established in Royal British Bank v Turquand) is the established legal exception protecting outsiders by allowing them to assume internal procedures were properly complied with.

    • A. Doctrine of Subrogation — incorrect. An insurance and surety principle where an insurer steps into the legal rights of the insured.
    • B. Doctrine of Ultra Vires — incorrect. Renders corporate acts beyond the memorandum void.
    • C. Corporate Veil — incorrect. The legal distinction separating a corporation's liabilities from its shareholders.
    • D. Turquand Rule — correct. Protects bona fide outsiders from internal company procedural irregularities.

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37. Question 37

    As per the sub-section (8A) of Section 139 of the Income Tax Act, a person may furnish an updated return of his income for the previous year relevant to such assessment year, within ______ from the end of assessment year?

    1. A6 months
    2. B12 months
    3. C24 months
    4. D36 months

    Answer: (C) 24 months

    Explanation

    Under Section 139(8A) of the Income Tax Act, 1961 (introduced by the Finance Act, 2022), an assessee can furnish an updated return (ITR-U) of income within 24 months from the end of the relevant assessment year, subject to payment of additional tax.

    • A. 6 months — incorrect. Far shorter than the statutory window provided for updated returns.
    • B. 12 months — incorrect. 12 months applies to additional tax rates of 25%, but the filing window itself extends to 24 months.
    • C. 24 months — correct. Assessees are permitted up to 24 months from the end of the relevant assessment year to file ITR-U.
    • D. 36 months — incorrect. Beyond the maximum permissible statutory period.

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38. Question 38

    Mr. X is holding equity shares of ABC Ltd with voting power of 26 per cent. Mrs. X is working in ABC Ltd at a salary of Rs. 20,000 p.m. The other income of Mr. X and Mrs. X are Rs. 6,00,000 and Rs. 3,00,000, respectively. The gross total income of Mr. X and Mrs. X are ________, ________ respectively for the Assessment Year 2023-24.

    1. ARs. 6,00,000 and Rs. 5,40,000
    2. BRs. 7,90,000 and Rs. 3,00,000
    3. CRs. 6,00,000 and Rs. 4,90,000
    4. DRs. 8,40,000 and Rs. 3,00,000

    Answer: (B) Rs. 7,90,000 and Rs. 3,00,000

    Explanation

    Under Section 64(1)(ii) of the Income Tax Act, salary paid to a spouse by a concern in which an individual holds a substantial interest (20% or more voting power) is clubbed into that individual's income in the absence of professional qualifications.

    Calculations for Assessment Year 2023-24:
    Gross salary of Mrs. X = 12 × Rs. 20,000 = Rs. 2,40,000
    Less standard deduction under Section 16(ia) = Rs. 50,000
    Net taxable salary = Rs. 1,90,000

    Income allocation:
    Mr. X holds 26% voting power (substantial interest)
    Mr. X's Gross Total Income = Rs. 6,00,000 + Rs. 1,90,000 = Rs. 7,90,000
    Mrs. X's Gross Total Income = Rs. 3,00,000 (her other income)

    • A. Rs. 6,00,000 and Rs. 5,40,000 — incorrect. Fails to apply the clubbing provisions of Section 64(1)(ii).
    • B. Rs. 7,90,000 and Rs. 3,00,000 — correct. Reflects standard deduction of Rs. 50,000 and salary clubbed into Mr. X's income.
    • C. Rs. 6,00,000 and Rs. 4,90,000 — incorrect. Assesses the net salary in Mrs. X's hands instead of clubbing it with Mr. X.
    • D. Rs. 8,40,000 and Rs. 3,00,000 — incorrect. Fails to deduct the statutory Rs. 50,000 standard deduction under Section 16(ia).

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39. Question 39

    Every seller who receives an amount exceeding ________ as consideration for sale of a motor vehicle, shall collect tax @ 1% of the sale consideration from the buyer at the time of receipt of such an amount.

    1. ARs. 25 lakhs
    2. BRs. 15 lakhs
    3. CRs. 10 lakhs
    4. DRs. 50 lakhs

    Answer: (C) Rs. 10 lakhs

    Explanation

    Section 206C(1F) of the Income Tax Act, 1961 requires every seller who receives consideration exceeding Rs. 10 lakhs on the sale of a motor vehicle to collect tax at source (TCS) at the rate of 1% from the buyer.

    • A. Rs. 25 lakhs — incorrect. Exceeds the statutory monetary threshold.
    • B. Rs. 15 lakhs — incorrect. Not an applicable TCS threshold under Section 206C.
    • C. Rs. 10 lakhs — correct. The statutory threshold under Section 206C(1F) is exactly Rs. 10 lakhs.
    • D. Rs. 50 lakhs — incorrect. Rs. 50 lakhs is the threshold for TCS on general sale of goods under Section 206C(1H), not motor vehicles.

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40. Question 40

    Which one of the following is the allowable deduction as per the Income Tax Act, 1961 in respect of entertainment allowance paid to a government employee?

    1. ALower of one-fourth of basic salary or Rs. 5000 or entertainment allowance received.
    2. BLower of one-fifth of basic salary or Rs. 5000 or entertainment allowance received
    3. CLower of one-fifth of salary or Rs. 5000 or entertainment allowance received.
    4. DLower of one-fourth of salary or Rs. 5000 or entertainment allowance received.

    Answer: (B) Lower of one-fifth of basic salary or Rs. 5000 or entertainment allowance received

    Explanation

    Section 16(ii) of the Income Tax Act, 1961 provides a deduction for entertainment allowance exclusively to government employees, limited to the least of: one-fifth (20%) of basic salary, Rs. 5,000, or the actual entertainment allowance received.

    • A. Lower of one-fourth of basic salary or Rs. 5000 or entertainment allowance received. — incorrect. The fraction prescribed by law is one-fifth, not one-fourth.
    • B. Lower of one-fifth of basic salary or Rs. 5000 or entertainment allowance received — correct. Accurately states the statutory criteria using basic salary.
    • C. Lower of one-fifth of salary or Rs. 5000 or entertainment allowance received. — incorrect. Salary for this deduction excludes all allowances and perquisites, meaning only basic salary is considered.
    • D. Lower of one-fourth of salary or Rs. 5000 or entertainment allowance received. — incorrect. Uses both the wrong fraction and non-basic salary definition.

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41. Question 41

    For Foreign Direct Investment, it is argued that a location in question attracts FDI because it combines the unique advantage of which of the following conditions?

    A. Internalisation Advantage
    B. First Mover Advantage
    C. Knowledge Advantage
    D. Ownership Advantage
    E. Location Advantage

    Choose the correct answer from the options given below:

    (Source-level note: Preserved source typo "Forigen" in original exam context)

    1. AE, A and C Only
    2. BE, A and D Only
    3. CC, B and D Only
    4. DC, E and D Only

    Answer: (B) E, A and D Only

    Explanation

    John Dunning's Eclectic Paradigm (the OLI model) posits that foreign direct investment occurs when an enterprise possesses three concurrent advantages:

    • Ownership advantage (D) — firm-specific competitive assets, intellectual property, or proprietary processes.
    • Location advantage (E) — country-specific factor endowments, natural resources, market size, or low labor costs.
    • Internalisation advantage (A) — benefits of exploiting advantages internally rather than licensing or outsourcing to third parties.

    Combining E, A, and D provides the three necessary conditions for FDI in Dunning's framework.

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42. Question 42

    Channel power is the ability to alter channel members' behaviour so that they take actions they would not have taken otherwise. From the following channel powers, list the ones which are subjective in nature:

    A. Legal Power
    B. Coercive Power
    C. Expert Power
    D. Referent Power
    E. Reward Power

    Choose the correct answer from the options given below:

    1. AD, A and C Only
    2. BD, A and B Only
    3. CA, B and E Only
    4. DA, C and E Only

    Answer: (A) D, A and C Only

    Explanation

    In marketing channel theory, power sources rooted in perception, identification, and professional expertise are classified as non-coercive and subjective powers.

    • D. Referent Power — subjective power derived from a channel member's desire to identify and affiliate with the prestigious brand leader.
    • C. Expert Power — subjective power based on perceived special knowledge, competence, and technical capability.
    • A. Legal Power — recognized legitimate authority, which together with referent and expert power forms non-coercive power bases in channel governance.
    • B. Coercive Power and E. Reward Power — objective, tangible economic instruments based on explicit penalties and contractual financial incentives.

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43. Question 43

    SAFTA (South Asian Free Trade Agreement) categorises member nations as Non-Least Developed Contracting States (NLDCS) and Least Developed Contracting States (LDCS). Identify the NLDCS states from the following

    A. Bangladesh
    B. Pakistan
    C. Bhutan
    D. India
    E. Sri Lanka

    Choose the correct answer from the options given below:

    1. AA, B and D Only
    2. BA, C and E Only
    3. CE, A and B Only
    4. DE, D and B Only

    Answer: (D) E, D and B Only

    Explanation

    Under the South Asian Free Trade Area (SAFTA) agreement, member states are classified into two groups for tariff reduction schedules:

    • Non-Least Developed Contracting States (NLDCS): India (D), Pakistan (B), and Sri Lanka (E).
    • Least Developed Contracting States (LDCS): Bangladesh (A), Bhutan (C), Maldives, Nepal, and Afghanistan.

    Therefore, the Non-Least Developed Contracting States in the provided list are Sri Lanka, India, and Pakistan (E, D, and B).

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44. Question 44

    Which of the following ratios are critically significant for an investor

    A. Debt-Equity ratio
    B. Price-Earning ratio
    C. Dividend yield
    D. Asset turnover ratio
    E. Debtor turnover ratio

    Choose the correct answer from the options given below:

    1. AA, B and C Only
    2. BD and E Only
    3. CB, C and D Only
    4. DA, D and E Only

    Answer: (A) A, B and C Only

    Explanation

    Investors evaluating equity investments focus on valuation multiples, cash dividend returns, and long-term financial solvency risk:

    • A. Debt-Equity ratio — measures long-term solvency, capital structure risk, and financial distress potential.
    • B. Price-Earning ratio — evaluates the company's market price relative to its net earnings per share.
    • C. Dividend yield — reflects the direct cash return on investment relative to market share price.
    • D. Asset turnover ratio and E. Debtor turnover ratio — operational activity ratios primarily used by internal operating management rather than investor valuation models.

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45. Question 45

    By reducing the sales price from Rs. 80 per unit to Rs. 78 per unit, the sales manager has succeeded in selling 1000 units more of a product. Which of the following decisive conclusions can be drawn from this?

    A. Sales price variance is unfavourable
    B. Sales volume variance is favourable
    C. Total sales variance is unfavourable
    D. Sales activity variance is Rs. 80000 (favourable)
    E. Sales price variance is Rs. 2000 (unfavourable)

    Choose the correct answer from the options given below:

    1. AA, B and C Only
    2. BC, D and E Only
    3. CA, B and D Only
    4. DB, D and E Only

    Answer: (C) A, B and D Only

    Explanation

    In standard costing, sales variances measure differences between actual and standard pricing and volumes:

    • A. Sales price variance is unfavourable — correct. Actual price (Rs. 78) is lower than standard price (Rs. 80), resulting in an adverse rate variance.
    • B. Sales volume variance is favourable — correct. The firm sold 1,000 units more than budgeted, increasing revenue contribution.
    • D. Sales activity variance is Rs. 80000 (favourable) — correct. Sales volume variance equals additional units multiplied by standard price (1,000 × Rs. 80 = Rs. 80,000 Favourable).
    • C and E — cannot be determined without knowing total actual volume, because price variance applies to all units sold.

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46. Question 46

    Which of the following are considered as the limitations of Cost-Volume-Profit analysis?

    A. Constant selling price regardless of sales volume
    B. Firm efficiency and productivity are constant and the costs are linear
    C. Margin of safety is constant at varied levels of sales
    D. Sales mix and the inventory levels are constant
    E. Profit is constant at varied levels of sales price

    Choose the correct answer from the options given below:

    1. AA, B and C Only
    2. BB, C and D Only
    3. CC, D and E Only
    4. DA, B and D Only

    Answer: (D) A, B and D Only

    Explanation

    Cost-Volume-Profit (CVP) analysis simplifies real-world economics through restrictive assumptions that also represent its principal limitations:

    • A. Constant selling price regardless of sales volume — a core limiting assumption ignoring price elasticity and quantity discounts.
    • B. Firm efficiency and productivity are constant and the costs are linear — assumes unit variable costs remain unchanged and fixed costs are strictly static.
    • D. Sales mix and the inventory levels are constant — assumes multi-product sales ratios never shift and production equals sales with zero inventory change.
    • C and E — incorrect. Margin of safety and profit dynamically fluctuate with sales changes in CVP models rather than remaining constant.

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47. Question 47

    Which of the following are relevant in technological innovations?

    A. Most innovations are incremental
    B. Most innovations involve the commercial utilization of ideas
    C. Innovations cannot be explained with isoquants
    D. Introduction of innovations is not stimulated by strong domestic rivalry and geographic concentrations
    E. The risk in introducing innovations is usually high

    Choose the correct answer from the options given below:

    1. AB, D and E only
    2. BA, C and E only
    3. CA, B and E only
    4. DA, B and C only

    Answer: (C) A, B and E only

    Explanation

    In the economics and management of technology:

    • A. Most innovations are incremental — valid. The vast majority of market innovations involve cumulative refinements to existing technologies.
    • B. Most innovations involve the commercial utilization of ideas — valid. Innovation differs from invention by taking ideas to commercial execution and market adoption.
    • E. The risk in introducing innovations is usually high — valid. Uncertainty surrounding technological feasibility and market acceptance makes innovation high-risk.
    • C. Innovations cannot be explained with isoquants — invalid. Process innovations are illustrated by inward shifts of isoquants reflecting productivity gains.
    • D. Introduction of innovations is not stimulated by strong domestic rivalry and geographic concentrations — invalid. Porter's Diamond model shows that domestic competition and industry clusters strongly catalyze innovation.

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48. Question 48

    Which of the following are relevant in deciding among different courses of action, the manager needs to consider the differential revenue and costs of alternatives?

    A. Opportunity costs and economic profits
    B. Fixed and Sunk Costs
    C. Marginal Revenue and Marginal Cost
    D. Incremental and marginal costs
    E. Economies and dis-economies of scale

    Choose the correct answer from the options given below:

    1. AA and D Only
    2. BB and C Only
    3. CD and E Only
    4. DA and B Only

    Answer: (A) A and D Only

    Explanation

    Managerial economics decision-making focuses strictly on relevant future revenues and costs that differ across decision alternatives:

    • A. Opportunity costs and economic profits — relevant. Opportunity costs measure the net benefit sacrificed from forgone alternatives to compute true economic profit.
    • D. Incremental and marginal costs — relevant. Incremental costs and differential cash flows reflect the extra cost incurred by adopting one course of action over another.
    • B. Fixed and Sunk Costs — irrelevant. Sunk costs are historical outlays that cannot be altered by future decisions and must be ignored.
    • C and E — provide operational optimization tools rather than decision criteria for discrete alternative choices.

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49. Question 49

    Which of the following are the reasons for substitution between domestic and MNC goods?

    A. Increased knowledge of foreign products due to international information revolution
    B. No need to conduct advertising campaigns
    C. Transportation costs having fallen to very low levels for most products
    D. Restricted international travel
    E. Tastes are consistent at the global level

    Choose the correct answer from the options given below:

    1. AA and C Only
    2. BD and E Only
    3. CC and D Only
    4. DA and B Only

    Answer: (A) A and C Only

    Explanation

    The increasing cross-elasticity and substitution between domestic products and multinational brand offerings is driven by two structural developments in the global economy:

    • A. Increased knowledge of foreign products due to international information revolution — digital telecommunications, the internet, and social media have made consumers aware of international brands and quality standards.
    • C. Transportation costs having fallen to very low levels for most products — containerized global shipping and air logistics have reduced freight costs, rendering foreign manufactured goods price-competitive in domestic markets.
    • B, D, and E — incorrect. MNCs invest heavily in local advertising, international travel has expanded rather than contracted, and local consumer preferences remain heterogeneous across markets.

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50. Question 50

    Which of the following are constituents of the trilemma of international finance?

    A. Fixed exchange rate
    B. Independent monetary policy
    C. Free mobility of capital
    D. Global recessionary tendency
    E. Rising inflationary conditions

    Choose the correct answer from the options given below:

    1. AA, B and C Only
    2. BC, D and E Only
    3. CB, C and E Only
    4. DA, C and D Only

    Answer: (A) A, B and C Only

    Explanation

    The Mundell-Fleming Trilemma (the Impossible Trinity) states that an open economy cannot simultaneously maintain all three macro-financial conditions:

    • A. Fixed exchange rate — pegging the currency value to a major foreign currency or basket.
    • B. Independent monetary policy — setting domestic interest rates and money supply according to internal macroeconomic objectives.
    • C. Free mobility of capital — unrestricted international capital inflows and outflows.

    A central bank can choose any two goals simultaneously, but must surrender the third.

    • D and E — macroeconomic conditions rather than policy regime choices forming the theoretical trilemma.

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51. Question 51

    Which of the following factors are attributed to the weakening of Indian rupee?

    A. Rupee payment for international trade
    B. Rising cost of imports
    C. Widening trade deficit
    D. Opening of Rupee vostro accounts
    E. Rupee UPI payments for overseas transactions

    Choose the most appropriate answer from the options given below:

    1. AA, B and C Only
    2. BC, D and E Only
    3. CA, D and E Only
    4. DB, C and D Only

    Answer: (A) A, B and C Only

    Explanation

    The depreciation and weakening of the Indian rupee against major global currencies is driven by external balance of payments pressures:

    • B. Rising cost of imports — elevated global crude oil and commodity prices sharply inflate India's import bill, creating heavy demand for foreign exchange.
    • C. Widening trade deficit — the excess of merchandise imports over exports increases net foreign currency outflows, putting downward pressure on the rupee exchange rate.
    • A. Rupee payment for international trade — settlement of trade deficits in domestic currency balances can exacerbate currency depreciation pressure when counterparties accumulate surplus rupees.
    • D and E — institutional measures designed to internationalize the rupee and facilitate bilateral clearing rather than direct causes of currency depreciation.

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52. Question 52

    When a country's currency is accepted as a reserve currency, the potential conflict may arise between which of following policy objectives?

    A. Domestic monetary policy
    B. Domestic fiscal policy
    C. External currency policy
    D. Foreign trade policy
    E. Inland trade policy

    Choose the correct answer from the options given below:

    1. AA, B, and C Only
    2. BA, C and D Only
    3. CB, D and E Only
    4. DC, D and E Only

    Answer: (B) A, C and D Only

    Explanation

    Robert Triffin's Dilemma highlights the inherent structural conflict facing any country whose national currency serves as an international reserve currency:

    • A. Domestic monetary policy — maintaining internal price stability and managing domestic employment and interest rates.
    • C. External currency policy — preserving international confidence in currency convertibility and exchange rate stability.
    • D. Foreign trade policy — running persistent current account and balance of payments deficits to supply global liquidity versus maintaining long-term solvency.

    Domestic fiscal policy and inland commerce do not constitute the core international reserve currency trade-off.

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53. Question 53

    In order to conduct exploratory data analysis, which of following are used by a researcher in the five number summary?

    A. Median
    B. First quartile
    C. Mean
    D. Third quartile
    E. Smallest and largest values

    Choose the correct answer from the options given below:

    1. AA, C, D and E Only
    2. BA, B, D, and E Only
    3. CB, C, D and E Only
    4. DA, B, C and E Only

    Answer: (B) A, B, D, and E Only

    Explanation

    John Tukey's five-number summary provides a non-parametric summary of a data distribution used to construct box-and-whisker plots:

    1. Smallest value (Minimum) (E)
    2. First quartile (Q1) (B)
    3. Median (Q2) (A)
    4. Third quartile (Q3) (D)
    5. Largest value (Maximum) (E)

    The arithmetic mean (C) is sensitive to extreme values and is excluded from the order-statistic five-number summary.

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54. Question 54

    Which of the following are considered while avoiding conflict?

    A. Conflict based on interpersonal relationships
    B. All conflicts are not bad and can be taken positively
    C. Conflict over content and goals of the work
    D. Conflicts do not support a group’s goal and improve its performance
    E. Conflict over how work gets done

    Choose the correct answer from the options given below:

    1. AA, B and C Only
    2. BA, B and E Only
    3. CA, C and E Only
    4. DB, C and D Only

    Answer: (C) A, C and E Only

    Explanation

    Organizational behavior research classifies organizational conflict into three distinct categories:

    • A. Conflict based on interpersonal relationships — relationship conflict focused on interpersonal friction and personality clashes, which is inherently dysfunctional.
    • C. Conflict over content and goals of the work — task conflict relating to project objectives, concepts, and deliverables.
    • E. Conflict over how work gets done — process conflict centering on delegation, responsibility, and operational procedures.

    Evaluating and mitigating workplace conflict requires addressing these three underlying categories (A, C, and E).

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55. Question 55

    Which of following are pre-experimental designs?

    A. One-group pre test-post test
    B. Pre-test post-test control group
    C. Quasi-experiments
    D. Static group comparison
    E. After-only study

    Choose the correct answer from the options given below:

    1. AD, B, C Only
    2. BA, D, E Only
    3. CA, C, E Only
    4. DE, B, D Only

    Answer: (B) A, D, E Only

    Explanation

    In experimental methodology, pre-experimental designs lack random assignment and formal control groups:

    • A. One-group pre test-post test — pre-experimental design measuring a single group before and after treatment.
    • D. Static group comparison — pre-experimental design comparing an intact treatment group against a non-randomized control group.
    • E. After-only study — one-shot case study observing a single group post-treatment without baseline measurement.
    • B. Pre-test post-test control group — a true experimental design with randomized control groups.
    • C. Quasi-experiments — a separate category of designs with non-randomized comparison groups.

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56. Question 56

    Which of the following managerial actions are followed to reduce resistance to change?

    A. Education and communication are strong tools for resistance to change
    B. Allows participation to those who oppose a change to participate in decision making
    C. Negotiation may become vital when resistance comes from a powerful source
    D. Employee counseling does not serve the purpose
    E. Coercion can be used to get support easily

    Choose the correct answer from the options given below:

    1. AA, B and C Only
    2. BB, C and D Only
    3. CB, C and E Only
    4. DA, C and D Only

    Answer: (A) A, B and C Only

    Explanation

    Kotter and Schlesinger formulate established managerial strategies to overcome organizational resistance to change:

    • A. Education and communication are strong tools for resistance to change — informs employees about the logic and necessity of change, reducing rumors and anxiety.
    • B. Allows participation to those who oppose a change to participate in decision making — engenders commitment and integrates valuable front-line perspectives.
    • C. Negotiation may become vital when resistance comes from a powerful source — offers tangible incentives or compromises to powerful stakeholders resisting change.
    • D and E — incorrect. Counseling is an established supportive tactic, whereas coercion generates lingering resentment rather than genuine support.

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57. Question 57

    Which of the following are objectives of Immediate Payment Service (IMPS)?

    A. To enable bank clients to use mobile instruments as a channel for accessing their bank accounts and remit funds
    B. To build the foundation for a full range of mobile based banking services.
    C. To sub-serve the goal of Reserve Bank of India (RBI) in digital payments.
    D. To make payments simpler with the mobile number of the beneficiary
    E. To restrain a nation-wide payment system facilitating one-to-one funds transfer

    Choose the most appropriate answer from the option given below:

    1. AA, C, D and E Only
    2. BA, B, C and D Only
    3. CB, C, D and E Only
    4. DB, A, E and D Only

    Answer: (B) A, B, C and D Only

    Explanation

    National Payments Corporation of India (NPCI) launched Immediate Payment Service (IMPS) with four central objectives:

    • A. To enable bank clients to use mobile instruments as a channel for accessing their bank accounts and remit funds — provides instant 24x7 interbank fund transfers via mobile.
    • B. To build the foundation for a full range of mobile based banking services. — acts as the underlying infrastructure for modern mobile banking applications.
    • C. To sub-serve the goal of Reserve Bank of India (RBI) in digital payments. — furthers the central bank's mandate for electronification of retail payments.
    • D. To make payments simpler with the mobile number of the beneficiary — allows transfers using mobile number and Mobile Money Identifier (MMID).
    • E — incorrect. The goal is to facilitate rather than restrain retail payments.

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58. Question 58

    Which of the following are functions of the Reserve Bank of India?

    A. Bank of issue
    B. Banker’s bank and lender of the last resort
    C. Regulator of fiscal policy
    D. Controller of credit
    E. Custodian of foreign exchange reserves

    Choose the most appropriate answer from the option given below:

    1. AA, B, C and D Only
    2. BA, B, D and E Only
    3. CB, C, D and E Only
    4. DA, B and D Only

    Answer: (B) A, B, D and E Only

    Explanation

    Under the Reserve Bank of India Act, 1934, the central bank discharges core central banking functions:

    • A. Bank of issue — holds monopoly over the issuance of currency notes in India.
    • B. Banker’s bank and lender of the last resort — maintains commercial banks' reserves and provides emergency liquidity.
    • D. Controller of credit — regulates money supply and credit through repo rate, reverse repo rate, CRR, SLR, and open market operations.
    • E. Custodian of foreign exchange reserves — manages the country's official reserves of foreign currencies and gold.
    • C. Regulator of fiscal policy — incorrect. Fiscal policy is determined and implemented by the Ministry of Finance, Government of India.

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59. Question 59

    The concept of product life cycle is based on which of the following key assumptions?

    A. Profits remain stable at different stages of product life cycle
    B. Products have an unlimited life
    C. Product sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller
    D. Products require different marketing, financial, manufacturing, purchasing and human resource strategies in each of the life cycle stages
    E. Products have a limited life

    Choose the most appropriate answer from the option given below:

    1. AB, C and D Only
    2. BA, B and C Only
    3. CA, C and D Only
    4. DC, D and E Only

    Answer: (D) C, D and E Only

    Explanation

    In marketing theory, Philip Kotler specifies the foundational premises of the Product Life Cycle (PLC):

    • C. Product sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller — follows introduction, growth, maturity, and decline phases.
    • D. Products require different marketing, financial, manufacturing, purchasing and human resource strategies in each of the life cycle stages — strategic mix shifts across each lifecycle stage.
    • E. Products have a limited life — products eventually become obsolete or superseded by newer technologies.
    • A and B — incorrect. Profits fluctuate substantially rather than remaining stable, and product lives are finite rather than unlimited.

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60. Question 60

    Emotional appeal is one of the types of advertising appeals, based on three ideas, namely

    A. Rational appeals generally go unnoticed
    B. Consumers watch all ads
    C. It can capture attention and foster an attachment
    D. Consumers ignore most ads
    E. Rational appeal generally gets noticed

    Choose the correct answer from the options given below

    1. AC, E, and D Only
    2. BC, E and B Only
    3. CC, A and D Only
    4. DC, A and B Only

    Answer: (C) C, A and D Only

    Explanation

    Emotional appeals in advertising strategy are grounded in behavioral psychology:

    • D. Consumers ignore most ads — in media clutter, the average consumer filters out and screens out commercial messages.
    • A. Rational appeals generally go unnoticed — factual, feature-heavy appeals often fail to trigger cognitive engagement or overcome consumer indifference.
    • C. It can capture attention and foster an attachment — emotional storytelling elicits psychological empathy and builds affective brand loyalty.
    • B and E — incorrect assumptions contradicted by empirical advertising and consumer behavior studies.

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61. Question 61

    Which are the states where every supplier of goods and/or services is required to obtain registration if his aggregate turnover exceeds the threshold limit of Rs. 20 lakh for supply of goods and/or services?

    A. Arunachal Pradesh
    B. Meghalaya
    C. Manipur
    D. Mizoram
    E. Sikkim

    Choose the most appropriate answer from the option given below:

    1. AB, C and A Only
    2. BC, D and E Only
    3. CE, B and A Only
    4. DA, B and D Only

    Answer: (C) E, B and A Only

    Explanation

    Under Section 22 of the CGST Act, 2017, aggregate turnover thresholds for GST registration vary across Special Category States:

    • Rs. 10 Lakh Threshold: Manipur (C), Mizoram (D), Nagaland, and Tripura.
    • Rs. 20 Lakh Threshold: Arunachal Pradesh (A), Meghalaya (B), and Sikkim (E), along with Uttarakhand and Puducherry.

    Therefore, the states subject to the Rs. 20 lakh registration threshold are Sikkim, Meghalaya, and Arunachal Pradesh (E, B, and A).

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62. Question 62

    Which of the following can become the member of an LLP?

    A. Resident Indians
    B. Limited Liability Partnership
    C. Corporation Sole
    D. Co-operative society
    E. Companies (including foreign companies)

    Choose the most appropriate answer from the option given below:

    1. AA, B and C Only
    2. BA, C and D Only
    3. CA, B and D Only
    4. DA, E and B Only

    Answer: (D) A, E and B Only

    Explanation

    Section 5 of the Limited Liability Partnership Act, 2008 provides that any individual or body corporate may become a partner in an LLP:

    • A. Resident Indians — eligible natural persons competent to contract.
    • B. Limited Liability Partnership — qualifying body corporate registered under the LLP Act.
    • E. Companies (including foreign companies) — qualifying body corporate under Section 2(1)(d).
    • C. Corporation Sole and D. Co-operative society — Section 2(1)(d) explicitly excludes a corporation sole and a co-operative society from the definition of a body corporate for LLP membership.

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63. Question 63

    The trademarks can be broadly classified into which of the following categories?

    A. Descriptive
    B. Normative
    C. Generic
    D. Explanatory
    E. Invented

    Choose the most appropriate answer from the option given below:

    1. AA, B and D Only
    2. BD, E and C Only
    3. CB, C and E Only
    4. DC, A and E Only

    Answer: (D) C, A and E Only

    Explanation

    In intellectual property law, the Abercrombie spectrum classifies trademarks along a recognized hierarchy of distinctiveness:

    • C. Generic — common dictionary names of goods, ineligible for trademark protection.
    • A. Descriptive — terms describing characteristics, ingredients, or qualities of products.
    • E. Invented — coined or fanciful marks created solely for branding with highest legal protection.
    • B and D — normative and explanatory are not recognized statutory trademark classifications.

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64. Question 64

    Which of the following are deemed to be dividend for the purpose of computing income chargeable under the head, Income from other sources, as per the Income Tax Act, 1961?

    A. Payment on buy-back of shares
    B. Payment to shareholders on reduction of capital
    C. Distribution of debentures to shareholders
    D. Loan granted to shareholders in the ordinary course of business
    E. Loan granted to shareholders by a closely held company

    Choose the correct answer from the options given below:

    1. AB and C Only
    2. BB, C and E Only
    3. CA, B and C Only
    4. DA and C Only

    Answer: (B) B, C and E Only

    Explanation

    Section 2(22) of the Income Tax Act, 1961 defines deemed dividend to include distributions of accumulated profits:

    • B. Payment to shareholders on reduction of capital — deemed dividend under Section 2(22)(c) to the extent of accumulated profits.
    • C. Distribution of debentures to shareholders — deemed dividend under Section 2(22)(b).
    • E. Loan granted to shareholders by a closely held company — deemed dividend under Section 2(22)(e) to substantial equity holders.
    • A and D — statutory exceptions. Section 2(22) specifically excludes payments for buy-back of shares and loans advanced in the ordinary course of money lending business.

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65. Question 65

    Which of the following will be clubbed into the income of Mr. Q whose Income from Profession is Rs. 85,000?

    A. Income from Mrs. Q's profession, Rs. 45,000
    B. Mrs. Q’s salary as a clerk, Rs. 66,000
    C. Minor son's earned interest on deposits of money gifted to him by his uncle, Rs. 15,000
    D. Minor daughter's earnings from sports, Rs 85,000
    E. Minor son's winnings from lottery, Rs 1,05,000

    Choose the correct answer from the options given below:

    1. AA, C, D and E Only
    2. BC, D and E Only
    3. CC and D Only
    4. DC and E Only

    Answer: (D) C and E Only

    Explanation

    Under Section 64(1A) of the Income Tax Act, 1961, income accruing to a minor child is clubbed into the total income of the parent having higher income, subject to specific statutory exceptions:

    • C. Minor son's earned interest on deposits — passive investment income subject to mandatory clubbing under Section 64(1A).
    • E. Minor son's winnings from lottery — casual winnings subject to mandatory clubbing under Section 64(1A).
    • D. Minor daughter's earnings from sports — exempt from clubbing because it is earned through personal talent and athletic skill.
    • A and B — Mrs. Q's professional earnings and clerk salary represent her independent personal income and cannot be clubbed into her husband's income.

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66. Question 66

    Match List I with List II to identify the permissible FDI route:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Nature of Business Activity)	List II (FDI Permitted under Automatic Route)
    A. Trading in Transferable Development Rights (TDR)	I. 49%
    B. Multi-Brand Retail Trading	II. Prohibited
    C. Satellite (Establishment and Operations)	III. 51%
    D. Petroleum Refining (by PSUs)	IV. 100%

    1. AA-IV, B-II, C-III, D-I
    2. BA-II, B-III, C-IV, D-I
    3. CA-I, B-III, C-II, D-IV
    4. DA-IV, B-II, C-I, D-III

    Answer: (B) A-II, B-III, C-IV, D-I

    Explanation

    A-II, B-III, C-IV, D-I

    India's Foreign Direct Investment policy prescribes sectoral caps and entry routes:

    • A. Trading in Transferable Development Rights (TDR) — II. Prohibited. Real estate business and trading in TDRs are completely prohibited for FDI.
    • B. Multi-Brand Retail Trading — III. 51%. Subject to government approval and local sourcing conditions.
    • C. Satellite (Establishment and Operations) — IV. 100%. Liberalized space sector norms allow up to 100% foreign investment.
    • D. Petroleum Refining (by PSUs) — I. 49%. Automatic route permits up to 49% FDI in public sector refinery operations.

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67. Question 67

    Match List I with List II for activity-based cost categories:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Activity Based Cost Centers)	List II (Costs incurred and accounted for)
    A. Unit-level activity center	I. Patent, trademark and copyright fees
    B. Batch level activity center	II. Direct material and labour costs
    C. Product level activity center	III. Plant depreciation and maintenance expenses
    D. Facility level activity center	IV. Material handling costs

    1. AA-II, B-IV, C-I, D-III
    2. BA-II, B-IV, C-III, D-I
    3. CA-I, B-III, C-II, D-IV
    4. DA-III, B-I, C-IV, D-II

    Answer: (A) A-II, B-IV, C-I, D-III

    Explanation

    A-II, B-IV, C-I, D-III

    Activity-Based Costing categorizes overhead costs into hierarchical levels:

    • A. Unit-level activity center — II. Direct material and labour costs incurred for each unit of product.
    • B. Batch level activity center — IV. Material handling costs and machine setup incurred per production batch.
    • C. Product level activity center — I. Patent, trademark, and product design fees that sustain a specific product line.
    • D. Facility level activity center — III. Plant depreciation and factory maintenance sustaining overall operational capability.

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68. Question 68

    Match List I with List II for economic demand effects:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Types of Effect)	List II (Description)
    A. Veblen effect	I. Conspicuous consumption
    B. Snob effect	II. Reduction in relative price of commodity
    C. Bandwagon effect	III. Negative network externality
    D. Substitution effect	IV. Positive network externality

    1. AA-I, B-II, C-III, D-IV
    2. BA-IV, B-III, C-II, D-I
    3. CA-II, B-III, C-IV, D-I
    4. DA-I, B-III, C-IV, D-II

    Answer: (D) A-I, B-III, C-IV, D-II

    Explanation

    A-I, B-III, C-IV, D-II

    Microeconomic consumption theory defines specific network and price effects:

    • A. Veblen effect — I. Conspicuous consumption where luxury goods are purchased for social prestige.
    • B. Snob effect — III. Negative network externality where demand drops as more consumers adopt the product.
    • C. Bandwagon effect — IV. Positive network externality where demand increases as more people buy the product.
    • D. Substitution effect — II. Reduction in relative price of commodity leading consumers to substitute toward it.

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69. Question 69

    Match List I with List II for bond valuation concepts:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Bond rates and risk)	List II (Description)
    A. Coupon rate	I. The interest rate required in the market on a bond
    B. Yield to maturity	II. It is obtained by dividing annual coupon (stated interest payment) by the bond price
    C. Interest rate risk	III. It germinates and originates from fluctuating interest rates
    D. Current (bond) yield	IV. The annual coupon (stated interest payment) divided by the face value of a bond

    1. AA-IV, B-I, C-III, D-II
    2. BA-II, B-III, C-I, D-IV
    3. CA-III, B-II, C-IV, D-I
    4. DA-I, B-III, C-II, D-IV

    Answer: (A) A-IV, B-I, C-III, D-II

    Explanation

    A-IV, B-I, C-III, D-II

    Fixed-income security metrics define yields and risks:

    • A. Coupon rate — IV. The stated annual interest payment divided by the face value of a bond.
    • B. Yield to maturity — I. The internal rate of return required by the market on a bond held to maturity.
    • C. Interest rate risk — III. Financial risk originating from fluctuating market interest rates that affect bond valuations.
    • D. Current (bond) yield — II. Calculated by dividing the annual coupon payment by the current market price of the bond.

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70. Question 70

    Match List I with List II for research design classifications:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Description Identifiers)	List II (Research design)
    A. The time dimension	I. Exploratory study
    B. The purpose of the study	II. Statistical study
    C. The topical scope of the study	III. Descriptive study
    D. The degree to which the research question has been crystallized	IV. Cross-sectional study

    1. AA-I, B-II, C-III, D-IV
    2. BA-III, B-I, C-IV, D-II
    3. CA-IV, B-III, C-II, D-I
    4. DA-II, B-IV, C-I, D-III

    Answer: (C) A-IV, B-III, C-II, D-I

    Explanation

    A-IV, B-III, C-II, D-I

    Cooper and Schindler classify research design dimensions:

    • A. The time dimension — IV. Cross-sectional study versus longitudinal study.
    • B. The purpose of the study — III. Descriptive study versus causal or reporting studies.
    • C. The topical scope of the study — II. Statistical study versus case study.
    • D. The degree to which the research question has been crystallized — I. Exploratory study versus formal study.

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71. Question 71

    Match List I with List II for management thinkers and their concepts:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Management Thinkers)	List II (Approach Dimensions)
    A. Kurt Lewin	I. Position power, Task structure, Leader member relations
    B. Fred E Fiedler	II. Authority and Responsibility, Unity of command, Scalar chain
    C. Henri Fayol	III. Power, Affiliation, Achievement
    D. David C. McClelland	IV. Unfreezing, Moving, Refreezing

    1. AA-I, B-II, C-III, D-IV
    2. BA-IV, B-I, C-II, D-III
    3. CA-IV, B-III, C-I, D-II
    4. DA-II, B-IV, C-III, D-I

    Answer: (B) A-IV, B-I, C-II, D-III

    Explanation

    A-IV, B-I, C-II, D-III

    Management theorists contributed distinct conceptual frameworks:

    • A. Kurt Lewin — IV. Three-step change model comprising Unfreezing, Moving, and Refreezing.
    • B. Fred E Fiedler — I. Contingency leadership theory based on Position power, Task structure, and Leader-member relations.
    • C. Henri Fayol — II. Principles of administrative management including Authority and Responsibility, Unity of command, and Scalar chain.
    • D. David C. McClelland — III. Acquired needs theory emphasizing Power, Affiliation, and Achievement motivations.

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72. Question 72

    Match List I with List II for NPS investment asset classes:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Asset classes)	List II (Type of Investments)
    A. Asset Class A	I. Equity shares of companies traded in futures and options segments
    B. Asset Class C	II. Government securities and state development loans
    C. Asset Class E	III. Alternate Assets
    D. Asset Class G	IV. Corporate bonds/debentures which are listed and rated not below A

    1. AA-I, B-IV, C-II, D-III
    2. BA-III, B-II, C-IV, D-I
    3. CA-III, B-IV, C-I, D-II
    4. DA-I, B-III, C-II, D-IV

    Answer: (C) A-III, B-IV, C-I, D-II

    Explanation

    A-III, B-IV, C-I, D-II

    The Pension Fund Regulatory and Development Authority (PFRDA) classifies National Pension System (NPS) investment classes:

    • A. Asset Class A — III. Alternate Assets (REITs, InvITs, AIFs).
    • B. Asset Class C — IV. Corporate bonds and debentures listed and rated not below A.
    • C. Asset Class E — I. Equity shares of companies traded in futures and options segments.
    • D. Asset Class G — II. Government securities and State Development Loans.

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73. Question 73

    Match List I with List II for market targeting frameworks:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Concepts (Targeting))	List II (Definition)
    A. Target Compatibility	I. Reflects the ability of a market segment to create superior value for the company
    B. Tactical Targeting	II. A reflection of the company’s ability, to create superior customer value
    C. Target Attractiveness	III. Focuses on customising company’s offerings according to the customers’ needs
    D. Strategic Targeting	IV. Ways in which the company can reach strategically important customers

    1. AA-I, B-II, C-III, D-IV
    2. BA-II, B-IV, C-I, D-III
    3. CA-II, B-III, C-I, D-IV
    4. DA-IV, B-III, C-II, D-I

    Answer: (B) A-II, B-IV, C-I, D-III

    Explanation

    A-II, B-IV, C-I, D-III

    In strategic marketing management:

    • A. Target Compatibility — II. Reflects the company’s internal capability and resources to create superior customer value for that segment.
    • B. Tactical Targeting — IV. Outlines the concrete communication and distribution channels through which the company reaches strategically important customers.
    • C. Target Attractiveness — I. Measures the ability of a market segment to create superior economic and strategic value for the company.
    • D. Strategic Targeting — III. Focuses on customising the company’s core value proposition and offerings according to specific customer needs.

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74. Question 74

    Match List I with List II for contract breach remedies:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Features)	List II (Remedies for breach of contract)
    A. Breach of promise to marry	I. Suit for injunction
    B. Part performance (as much as earned)	II. Rescission of contract
    C. Absolution from all obligations	III. Sue for quantum meruit
    D. Mode of securing the specific performance of negative terms of contract	IV. Vindictive damage

    1. AA-IV, B-III, C-II, D-I
    2. BA-I, B-II, C-III, D-IV
    3. CA-III, B-IV, C-I, D-II
    4. DA-II, B-I, C-IV, D-III

    Answer: (A) A-IV, B-III, C-II, D-I

    Explanation

    A-IV, B-III, C-II, D-I

    The Indian Contract Act, 1872 provides distinct judicial remedies for breach of contract:

    • A. Breach of promise to marry — IV. Vindictive or exemplary damages awarded to punish the breaching party and solace wounded feelings.
    • B. Part performance (as much as earned) — III. Quantum meruit claim allowing remuneration proportionate to the value of work completed.
    • C. Absolution from all obligations — II. Rescission of contract discharging the non-defaulting party from ongoing contractual duties.
    • D. Mode of securing the specific performance of negative terms of contract — I. Suit for injunction restraining a party from doing an act stipulated against.

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75. Question 75

    Match List I with List II for capital gains tax exemptions:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    List I (Assets Transferred)	List II (Exemptions of capital gains Sections 54-54 EC Income Tax Act)
    A. Agricultural Land	I. Section 54 B
    B. Residential House	II. Section 54 EC
    C. Land or Building or Both	III. Section 54 D
    D. Land and Building forming part of an industrial undertaking	IV. Section 54

    1. AA-III, B-II, C-I, D-IV
    2. BA-I, B-IV, C-II, D-III
    3. CA-IV, B-III, C-I, D-II
    4. DA-III, B-I, C-IV, D-II

    Answer: (B) A-I, B-IV, C-II, D-III

    Explanation

    A-I, B-IV, C-II, D-III

    Sections 54 to 54EC of the Income Tax Act, 1961 prescribe capital gains exemptions linked to specific asset transfers:

    • A. Agricultural Land — I. Section 54B exemption on transfer of land used for agricultural purposes reinvested in agricultural land.
    • B. Residential House — IV. Section 54 exemption on transfer of long-term residential house reinvested in residential house property.
    • C. Land or Building or Both — II. Section 54EC exemption on transfer of long-term capital assets invested in specified infrastructure bonds.
    • D. Land and Building forming part of an industrial undertaking — III. Section 54D exemption on compulsory acquisition of industrial land and building.

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76. Question 76

    Arrange the following rounds for multilateral trade negotiations under GATT/WTO in a chronological order.

    A. Kennedy
    B. Doha
    C. Annecy
    D. Torquay
    E. Tokyo

    Choose the correct answer from the options given below:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    1. AC, D, A, E, B
    2. BD, C, E, A, B
    3. CB, A, E, C, D
    4. DB, E, A, D, C

    Answer: (A) C, D, A, E, B

    Explanation

    C, D, A, E, B

    Multilateral trade negotiations under GATT and WTO progressed through successive historical negotiating rounds:

    • C. Annecy Round (1949) — second round held in France focusing on tariff concessions.
    • D. Torquay Round (1950–1951) — third round in England reducing import tariffs on thousands of items.
    • A. Kennedy Round (1964–1967) — sixth round introducing anti-dumping measures and substantial tariff cuts.
    • E. Tokyo Round (1973–1979) — seventh round tackling non-tariff barriers and trade codes.
    • B. Doha Round (2001–present) — WTO development round initiated in Qatar to lower trade barriers for developing nations.

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77. Question 77

    Arrange the steps in the book building process for public issue of shares in India.

    A. Determine issue price, market clearing price and price discovery
    B. Book runner and syndicate members generate awareness, create demand and run the order book
    C. Appointment of the merchant banker and syndicate members (SEBI registered intermediaries) as underwriters
    D. Preparation and filing of red herring prospectus with the SEBI for approval
    E. Allotment and listing of shares on stock exchange (s)

    Choose the correct answer from the options given below:

    (Source-level note: Preserved source typo "propectus" and "Chose" in original exam context)

    1. AC, D, B, A, E
    2. BD, C, A, B, E
    3. CA, B, C, D, E
    4. DB, C, D, E, A

    Answer: (A) C, D, B, A, E

    Explanation

    C, D, B, A, E

    SEBI regulations mandate sequential stages in the public issue book building process:

    • C. Appointment of merchant banker and syndicate members — issuer appoints Book Running Lead Managers and registered underwriters.
    • D. Preparation and filing of red herring prospectus — draft prospectus containing a price band is submitted to SEBI and ROC.
    • B. BRLM and syndicate members run the order book — marketing roadshows build investor demand while bids are logged during subscription.
    • A. Price discovery — syndicate analyzes cumulative demand bids to determine the market-clearing cut-off issue price.
    • E. Allotment and listing — shares are allotted to bidders and listed for secondary market trading.

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78. Question 78

    Arrange the following in a sequence with regard to price leadership sustainability:

    A. Small firms in the industry are allowed to sell all they want at that price
    B. Dominant firm acts as the residual supplier of the commodity
    C. The dominant firm sets the price for the commodity that maximizes its profits
    D. Small firms in the industry behave as price takers
    E. Dominant firm then comes into fill the market

    Choose the correct answer from the options given below:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    1. AA, B, C, D, E
    2. BE, D, C, B, A
    3. CA, C, B, D, E
    4. DC, A, E, B, D

    Answer: (D) C, A, E, B, D

    Explanation

    C, A, E, B, D

    In the dominant firm price leadership oligopoly model:

    • C. The dominant firm sets the price for the commodity that maximizes its profits — the price leader determines profit-maximizing market price based on residual demand.
    • A. Small firms in the industry are allowed to sell all they want at that price — competitive fringe producers supply whatever quantity matches their marginal cost.
    • E. Dominant firm then comes into fill the market — the dominant firm steps in to satisfy remaining unsatisfied consumer demand.
    • B. Dominant firm acts as the residual supplier of the commodity — the leader satisfies the gap between market demand and fringe supply.
    • D. Small firms in the industry behave as price takers — fringe competitors maintain stable pricing by treating the leader's price as given.

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79. Question 79

    Sequentially arrange the following impacts of the evolving global monetary system on the economies.

    A. Protectionism and nationalism
    B. Capital flows driving economic development
    C. Increased world trade with limited capital flows
    D. Expanded open economies
    E. Industrial economies increasingly open and emerging nations open slowly

    Choose the correct answer from the options given below:

    (Source-level note: Preserved source typo "Chose" in original exam context)

    1. AB, D, A, C, E
    2. BC, A, D, E, B
    3. CC, E, D, A, B
    4. DE, B, D, A, C

    Answer: (B) C, A, D, E, B

    Explanation

    C, A, D, E, B

    International finance traces the historical evolution of the international monetary system:

    • C. Increased world trade with limited capital flows — Classical Gold Standard era fostered trade expansion while cross-border capital was bounded.
    • A. Protectionism and nationalism — Interwar breakdown (1914–1944) precipitated tariff barriers, competitive devaluations, and autarky.
    • D. Expanded open economies — post-WWII Bretton Woods reconstruction liberalized trade regimes among allied economies.
    • E. Industrial economies increasingly open and emerging nations open slowly — post-Bretton Woods era (1970s–1980s) where developed nations deregulated while emerging markets retained capital controls.
    • B. Capital flows driving economic development — modern era of global financial integration and cross-border capital mobility financing emerging growth.

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80. Question 80

    Arrange the following steps of a well planned experiment in the sequential order.

    A. Specify the treatment levels
    B. Assign subject to groups and conduct pilot test
    C. Choose an experimental design suited to the hypotheses
    D. Control the environmental and extraneous factors
    E. Select relevant variables for testing

    Choose the correct answer from the options given below:

    1. AC, D, E, A, B
    2. BA, C, D, E, B
    3. CE, A, D, C, B
    4. DD, C, B, A, E

    Answer: (C) E, A, D, C, B

    Explanation

    E, A, D, C, B

    Experimental research methodology follows sequential stages:

    • E. Select relevant variables for testing — researcher identifies independent, dependent, and moderator variables.
    • A. Specify the treatment levels — operationalizes the levels and dosages of the experimental treatment.
    • D. Control environmental and extraneous factors — designs controls (elimination, constancy, matching) to isolate causal effects.
    • C. Choose an experimental design suited to hypotheses — selects appropriate factorial, completely randomized, or repeated-measures design.
    • B. Assign subjects to groups and conduct pilot test — implements randomization and validates procedures through pilot testing.

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81. Question 81

    Arrange the following group member's behavior outcomes in a sequence as per the successive stages of group building process.

    A. Eager, Anxious, Gather data about similarities and differences among members and keep things simple
    B. Upset and Depressed
    C. Less dissatisfied and a feeling of belongings to the group
    D. Confront the differences, feel angry or frustrated, lot of competition and hostilities.
    E. Inter dependence in personal relations, tendency to get involved in and problem solving

    Choose the correct answer from the options given below:

    1. AA, D, C, E, B
    2. BA, B, C, D, E
    3. CE, C, D, B, A
    4. DB, C, E, A, D

    Answer: (A) A, D, C, E, B

    Explanation

    A, D, C, E, B

    Bruce Tuckman's stages of group development track sequential psychological behaviors:

    • A. Forming — members are eager and polite, assessing similarities and orienting themselves.
    • D. Storming — interpersonal friction emerges as members confront differences, expressing frustration and competition.
    • C. Norming — group cohesion develops with reduced dissatisfaction and mutual belonging.
    • E. Performing — group reaches mature interdependence, dedicating collective energy to collaborative problem-solving.
    • B. Adjourning — dissolution of the team triggers closure emotions, with members feeling upset or mournful over separation.

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82. Question 82

    Arrange the following SBI-sponsored RRBs in an increasing order of their existence since formation.

    A. Rajasthan Marudhara Gramin Bank
    B. Telangana Gramin Bank
    C. Sausashtra Gramin Bank
    D. Madhyanchal Gramin Bank
    E. Arunachal Pradesh Rural Bank

    Choose the correct answer from the options given below:

    (Source-level note: Preserved source spelling "Sausashtra" in original exam context)

    1. AA, D, B, E, C
    2. BC, E, D, A, B
    3. CB, A, C, E, D
    4. DD, E, A, B, C

    Answer: (B) C, E, D, A, B

    Explanation

    C, E, D, A, B

    Chronological timeline of establishment of SBI-sponsored Regional Rural Banks:

    • C. Saurashtra Gramin Bank — established in 1978 in Gujarat, representing the earliest formed entity in this group.
    • E. Arunachal Pradesh Rural Bank — established in 1983 as the sole regional rural bank in Arunachal Pradesh.
    • D. Madhyanchal Gramin Bank — formed in November 2012 through amalgamation of rural banks in Madhya Pradesh.
    • A. Rajasthan Marudhara Gramin Bank — formed in April 2014 through amalgamation of Marudhara and Mewar gramin banks.
    • B. Telangana Gramin Bank — reorganized in October 2014 following the state bifurcation of Andhra Pradesh.

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83. Question 83

    Place the following service differentiators in a logical sequence:

    A. Speed and timing of delivery
    B. Maintenance and repair
    C. Returns
    D. Installation, training and consulting
    E. Ease of ordering

    Choose the correct answer from the options given below:

    1. AE, D, B, C, A
    2. BE, A, D, B, C
    3. CE, D, A, C, B
    4. DE, C, A, B, D

    Answer: (B) E, A, D, B, C

    Explanation

    E, A, D, B, C

    Philip Kotler models service differentiation across the sequential customer journey and product lifecycle:

    • E. Ease of ordering — simplicity and convenience for the customer to place the initial order.
    • A. Speed and timing of delivery — prompt, reliable fulfillment and physical delivery to the customer.
    • D. Installation, training and consulting — onboarding the buyer through setup, user training, and technical advisory.
    • B. Maintenance and repair — post-purchase ongoing service helping users keep products operating smoothly.
    • C. Returns — handling defective items, warranty returns, and reverse logistics.

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84. Question 84

    Arrange the following steps in the investigation process of combinations by the Competition Commission of India in the correct order.

    A. Call for a report from the Director General
    B. Invite any person, affected parties to file written objections
    C. Direct the parties of combination to publish details of the combination
    D. Call for additional information from the parties of the combination
    E. Issue a notice for show-cause to the parties of the combination

    Choose the correct answer from the options given below:

    1. AA, B, C, D, E
    2. BE, A, C, B, D
    3. CB, A, C, D, E
    4. DC, A, D, E, B

    Answer: (B) E, A, C, B, D

    Explanation

    E, A, C, B, D

    Section 29 of the Competition Act, 2002 sets out the procedural steps for investigating corporate mergers and combinations:

    • E. Issue a notice for show-cause — CCI issues a show-cause notice if it forms a prima facie opinion of appreciable adverse effect on competition.
    • A. Call for a report from the Director General — Commission directs the Director General to investigate and submit an inquiry report.
    • C. Direct parties to publish details — Commission orders merging parties to publish combination terms for public notice.
    • B. Invite written objections from affected parties — public and affected market participants submit representations within 15 days of notice.
    • D. Call for additional information — Commission requests further technical or financial disclosures before issuing its final order.

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85. Question 85

    Arrange the following in the ascending order of applicable TDS (Tax deducted at source) rates for the Financial Year, 2023-24.

    A. Payment of Rs. 6,55,000 rent by an individual in a year
    B. Payment of Rs 20,000 on winnings from horse races
    C. Payment of Rs 8,000 as dividend by cheque
    D. Payment of Rs. 35,000 to an individual contractor for repair by a university
    E. Payment of Rs 30,000 as fees for professional and technical services by a call center

    Choose the correct answer from the options given below:

    1. AA, B, C, D, E
    2. BD, E, A, C, B
    3. CE, D, C, B, A
    4. DA, E, C, D, B

    Answer: (B) D, E, A, C, B

    Explanation

    D, E, A, C, B

    Statutory withholding rates under the Income Tax Act, 1961 for Financial Year 2023-24:

    • D. Repair payment to individual contractor (Section 194C) — 1% withholding rate.
    • E. Fees for technical services paid by call center (Section 194J) — 2% withholding rate.
    • A. Rent payment by an individual exceeding Rs. 50,000 monthly (Section 194-IB) — 5% withholding rate.
    • C. Payment of dividend (Section 194) — 10% withholding rate.
    • B. Winnings from horse races (Section 194BB) — 30% withholding rate.

    Ascending order of rates: 1% (D) < 2% (E) < 5% (A) < 10% (C) < 30% (B).

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86. Question 86

    Given the statements:

    Assertion (A): A promoter, invariably is the one who has been associated with formation of the company
    Reason (R): A promoter is the one who undertakes to form a company with reference to a given object and who takes the necessary steps to accomplish that purpose

    In the light of the above statements, choose the most appropriate answer from the options given below:

    1. ABoth A and R are correct and R is the correct explanation of A.
    2. BBoth A and R are correct but R is NOT the correct explanation of A.
    3. CA is correct but R is not correct.
    4. DA is not correct but R is correct

    Answer: (A) Both A and R are correct and R is the correct explanation of A.

    Explanation

    Under company law principles established in Twycross v Grant and recognized under Section 2(69) of the Companies Act, 2013, a promoter conceives the corporate idea, arranges capital and incorporation, and launches the enterprise.

    • Assertion (A) is correct because a promoter's legal status is intrinsically bound to initiating and executing corporate incorporation.
    • Reason (R) is correct because legal precedent defines a promoter as the person who undertakes to form the company for a stated purpose and performs the preparatory legal and managerial steps.
    • Because Reason (R) defines the promoter's active role in corporate creation, it provides the direct causal explanation for Assertion (A).

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87. Question 87

    Given the statements:

    Assertion (A): Persons with high self-esteem are less susceptible to influence, more confident of achieving goals and more effective in social networking
    Reason (R): Self-esteem manifests in several behaviours. Persons with high self-esteem tend to report fewer negative emotions than persons with low self-esteem

    In the light of the above statements, choose the most appropriate answer from the options given below:

    1. ABoth A and R are true and R is the correct explanation of A.
    2. BBoth A and R are true but R is NOT the correct explanation of A.
    3. CA is true but R is false.
    4. DA is false but R is true

    Answer: (B) Both A and R are true but R is NOT the correct explanation of A.

    Explanation

    In organizational behavior research:

    • Assertion (A) is true because high self-esteem individuals exhibit confidence in internal capabilities, maintain autonomy against external conformist pressure, and network effectively.
    • Reason (R) is true because self-esteem correlates with affective well-being, with high self-esteem individuals reporting lower levels of anxiety and negative emotions.
    • While both statements represent verified empirical findings on self-esteem, reporting fewer negative emotions describes emotional affect rather than explaining the motivational mechanism behind low susceptibility to social influence.

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88. Question 88

    Given below are two statements:

    Statement I: The ordinary treasury bills that are marketable and have a secondary market are issued to the public and financial institutions.
    Statement II: Ad hoc treasury bills are issued only in favour of the Reserve Bank of India which is authorized to issue currency notes against them.

    In the light of the above statements, choose the most appropriate answer from the options given below:

    1. ABoth Statement I and Statement II are true
    2. BBoth Statement I and Statement II are false
    3. CStatement I is true but Statement II is false
    4. DStatement I is false but Statement II is true

    Answer: (A) Both Statement I and Statement II are true

    Explanation

    In Indian public debt management and money market operations:

    • Statement I is true. Ordinary (regular) Treasury Bills (91-day, 182-day, and 364-day) are issued through periodic competitive auctions to institutional and retail investors and are freely traded in secondary money markets.
    • Statement II is true. Ad hoc Treasury Bills were historically created by the Government of India on tap exclusively in favor of the Reserve Bank of India to automatically monetize fiscal deficits, against which RBI expanded the reserve money supply.

    Both statements accurately describe the characteristics of regular versus ad hoc Treasury bills.

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89. Question 89

    Given the statements:

    Assertion (A): Consumers may prefer to choose the channels based on their own shopping goals as well as price, product assortment and convenience.
    Reason (R): Some consumers are unwilling to "trade-up" to retailers offering higher-end goods, and "trade down" to discount retailers for private-label

    In the light of the above statements, choose the most appropriate answer from the options given below:

    1. ABoth A and R are correct and R is the correct explanation of A.
    2. BBoth A and R are correct but R is NOT the correct explanation of A.
    3. CA is correct but R is not correct.
    4. DA is not correct but R is correct

    Answer: (B) Both A and R are correct but R is NOT the correct explanation of A.

    Explanation

    In retail channel strategy and consumer shopping behavior:

    • Assertion (A) is correct because shoppers trade off channel attributes including product breadth, price competitiveness, checkout convenience, and shopping mission when selecting store and digital channels.
    • Reason (R) is correct because distinct customer segments exhibit polarized shopping habits, opting either for premium brands or economy private labels.
    • Reason (R) reflects a market segmentation phenomenon rather than providing the functional explanation for how consumers evaluate multidimensional channel utility in Assertion (A).

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90. Question 90

    Given below are two statements:

    Statement I: For a given sample size and level of significance (α), the critical value of Student’s t always exceeds that of z
    Statement II: For a given level of significance (α), the critical value of Student’s t increases as n increases.

    In the light of the above statements, choose the correct answer from the options given below:

    1. ABoth Statement I and Statement II are true
    2. BBoth Statement I and Statement II are false
    3. CStatement I is true but Statement II is false
    4. DStatement I is false but Statement II is true

    Answer: (C) Statement I is true but Statement II is false

    Explanation

    In theoretical sampling distributions:

    • Statement I is true. Because the t-distribution uses estimated sample standard deviation rather than known population standard deviation, it possesses greater dispersion and thicker tails, requiring a larger critical cutoff value than the standard normal z-distribution for any finite degrees of freedom.
    • Statement II is false. As sample size n increases, degrees of freedom rise and sample variance converges to population variance, causing the t-distribution's tails to thin and its critical value to decrease toward the z critical value.

    Therefore, Statement I is true while Statement II is false.

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91. Question 91

    Which one of the following is the reason, as per the passage, for crises in economic modelling?

    For most of its existence as a modern field of study since the 18th century, economics has fared reasonably well at explaining consumer and producer behavior. It explained why buyers choose the products they do, how firms produce them to maximize profit, and how markets discover the most efficient prices. This changed with the Great Depression, when aggregate variables came into play that needed a better understanding than an assumption that markets return to equilibrium after shocks. Thus came into existence macroeconomics, the most dismal aspect of the dismal science.

    Economics has since diversified into quite a few other branches, such as those employing statistics and psychology, but most of its disrepute originates from its failure to predict financial crises.

    'Macro' by its very nature - dealing with GDP, employment, inflation and other important but soporific matters and parameters - is headline-grabbing stuff. Governments come into play here, as do international relations. Yet, macro eludes the scientific method of testing hypotheses with repeated experiments: one can't conceivably wreck an economy to establish the effects of a shock. Instead, macroeconomists can only back-test their models against data that may be of questionable provenance. This makes prediction of the next stock market crash forever embarrassingly less exact than the return of Halley's Comet.

    Microeconomics, the reputable part of the endeavor, suffers from fewer limitations to controlled parameter experiments and delivers less equivocal insights. The explosion of commerce in the modern world owes itself in no small measure to predicting actions by the smallest economic agents: humans. Here, too, heroic assumptions are made, the foremost being that human beings are rational and information is free. The crisis in economic modelling arises from aggregating billions of micro truths into one macro truth. Models are improving, so are quantitative capabilities, and the qualitative judgements that drive macro policy will become more refined.

    1. AAggregating billions of micro truths into one macro truth
    2. BOnly equalization factors are considered in economic models
    3. CEconomic activities are not sufficient to study the macro environment
    4. DHuman beings behave irrationally

    Answer: (A) Aggregating billions of micro truths into one macro truth

    Explanation

    The passage explicitly states that 'The crisis in economic modelling arises from aggregating billions of micro truths into one macro truth.'

    • A. Aggregating billions of micro truths into one macro truth — correct. Verbatim reason provided in the text for the crisis in macroeconomic modelling.
    • B. Only equalization factors are considered in economic models — incorrect. Not mentioned or supported by the passage.
    • C. Economic activities are not sufficient to study the macro environment — incorrect. The passage discusses difficulties of controlled experiments rather than activity volume.
    • D. Human beings behave irrationally — incorrect. The passage notes that models assume humans are rational, but attributes the modelling crisis to aggregation.

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92. Question 92

    Match List I (Phenomenon) with List II (Reasons) based on the passage:

    List I (Phenomenon):
    A. Economics defines
    B. Learning of Great Depression
    C. Macro-economic variables
    D. Pitfalls of Micro economics

    List II (Reasons):
    I. Better understanding of aggregate variables
    II. GDP, Employment, and Inflation
    III. Human beings are rational and information is free
    IV. How markets discover the most efficient prices

    For most of its existence as a modern field of study since the 18th century, economics has fared reasonably well at explaining consumer and producer behavior. It explained why buyers choose the products they do, how firms produce them to maximize profit, and how markets discover the most efficient prices. This changed with the Great Depression, when aggregate variables came into play that needed a better understanding than an assumption that markets return to equilibrium after shocks. Thus came into existence macroeconomics, the most dismal aspect of the dismal science.

    Economics has since diversified into quite a few other branches, such as those employing statistics and psychology, but most of its disrepute originates from its failure to predict financial crises.

    'Macro' by its very nature - dealing with GDP, employment, inflation and other important but soporific matters and parameters - is headline-grabbing stuff. Governments come into play here, as do international relations. Yet, macro eludes the scientific method of testing hypotheses with repeated experiments: one can't conceivably wreck an economy to establish the effects of a shock. Instead, macroeconomists can only back-test their models against data that may be of questionable provenance. This makes prediction of the next stock market crash forever embarrassingly less exact than the return of Halley's Comet.

    Microeconomics, the reputable part of the endeavor, suffers from fewer limitations to controlled parameter experiments and delivers less equivocal insights. The explosion of commerce in the modern world owes itself in no small measure to predicting actions by the smallest economic agents: humans. Here, too, heroic assumptions are made, the foremost being that human beings are rational and information is free. The crisis in economic modelling arises from aggregating billions of micro truths into one macro truth. Models are improving, so are quantitative capabilities, and the qualitative judgements that drive macro policy will become more refined.

    1. AA-I, B-II, C-III, D-IV
    2. BA-II, B-III, C-I, D-IV
    3. CA-III, B-IV, C-II, D-I
    4. DA-IV, B-I, C-II, D-III

    Answer: (D) A-IV, B-I, C-II, D-III

    Explanation

    A-IV, B-I, C-II, D-III

    Mapping statements directly to textual evidence in the passage:

    • A. Economics defines — IV. How markets discover the most efficient prices (first paragraph notes economics explained how markets discover efficient prices).
    • B. Learning of Great Depression — I. Better understanding of aggregate variables (passage states the Depression showed aggregate variables needed better understanding).
    • C. Macro-economic variables — II. GDP, Employment, and Inflation (third paragraph lists GDP, employment, and inflation as core macro parameters).
    • D. Pitfalls of Micro economics — III. Human beings are rational and information is free (final paragraph identifies heroic assumptions of rationality and free information).

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93. Question 93

    Which of the following, as per the passage, are the major contribution of economics?

    A. Buyers behavior towards the products
    B. Firm’s behaviors for maximising profit
    C. Retailers behavior to maximize sale
    D. Market behavior to the most efficient prices
    E. Stakeholder’s behaviors to maximise wealth

    Choose the correct answer:

    For most of its existence as a modern field of study since the 18th century, economics has fared reasonably well at explaining consumer and producer behavior. It explained why buyers choose the products they do, how firms produce them to maximize profit, and how markets discover the most efficient prices. This changed with the Great Depression, when aggregate variables came into play that needed a better understanding than an assumption that markets return to equilibrium after shocks. Thus came into existence macroeconomics, the most dismal aspect of the dismal science.

    Economics has since diversified into quite a few other branches, such as those employing statistics and psychology, but most of its disrepute originates from its failure to predict financial crises.

    'Macro' by its very nature - dealing with GDP, employment, inflation and other important but soporific matters and parameters - is headline-grabbing stuff. Governments come into play here, as do international relations. Yet, macro eludes the scientific method of testing hypotheses with repeated experiments: one can't conceivably wreck an economy to establish the effects of a shock. Instead, macroeconomists can only back-test their models against data that may be of questionable provenance. This makes prediction of the next stock market crash forever embarrassingly less exact than the return of Halley's Comet.

    Microeconomics, the reputable part of the endeavor, suffers from fewer limitations to controlled parameter experiments and delivers less equivocal insights. The explosion of commerce in the modern world owes itself in no small measure to predicting actions by the smallest economic agents: humans. Here, too, heroic assumptions are made, the foremost being that human beings are rational and information is free. The crisis in economic modelling arises from aggregating billions of micro truths into one macro truth. Models are improving, so are quantitative capabilities, and the qualitative judgements that drive macro policy will become more refined.

    1. AA, B and D Only
    2. BA, B and C Only
    3. CB, D and E Only
    4. DA, B and E Only

    Answer: (A) A, B and D Only

    Explanation

    The opening paragraph specifies that economics 'explained why buyers choose the products they do [A], how firms produce them to maximize profit [B], and how markets discover the most efficient prices [D].'

    • A, B and D — explicitly named in the passage as the foundational achievements of economics.
    • C and E — neither retailer behavior nor stakeholder wealth maximization is cited in the passage.

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94. Question 94

    Statement I: Macroeconomists can only back-test their models against data that may be of questionable provenance.
    Statement II: Macroeconomic variables elude the scientific method of testing hypotheses with repeated experiments.

    In the light of the statements, choose the most appropriate answer:

    For most of its existence as a modern field of study since the 18th century, economics has fared reasonably well at explaining consumer and producer behavior. It explained why buyers choose the products they do, how firms produce them to maximize profit, and how markets discover the most efficient prices. This changed with the Great Depression, when aggregate variables came into play that needed a better understanding than an assumption that markets return to equilibrium after shocks. Thus came into existence macroeconomics, the most dismal aspect of the dismal science.

    Economics has since diversified into quite a few other branches, such as those employing statistics and psychology, but most of its disrepute originates from its failure to predict financial crises.

    'Macro' by its very nature - dealing with GDP, employment, inflation and other important but soporific matters and parameters - is headline-grabbing stuff. Governments come into play here, as do international relations. Yet, macro eludes the scientific method of testing hypotheses with repeated experiments: one can't conceivably wreck an economy to establish the effects of a shock. Instead, macroeconomists can only back-test their models against data that may be of questionable provenance. This makes prediction of the next stock market crash forever embarrassingly less exact than the return of Halley's Comet.

    Microeconomics, the reputable part of the endeavor, suffers from fewer limitations to controlled parameter experiments and delivers less equivocal insights. The explosion of commerce in the modern world owes itself in no small measure to predicting actions by the smallest economic agents: humans. Here, too, heroic assumptions are made, the foremost being that human beings are rational and information is free. The crisis in economic modelling arises from aggregating billions of micro truths into one macro truth. Models are improving, so are quantitative capabilities, and the qualitative judgements that drive macro policy will become more refined.

    1. ABoth Statement I and Statement II are true
    2. BBoth Statement I and Statement II are false
    3. CStatement I is true but Statement II is false
    4. DStatement I is false but Statement II is true

    Answer: (A) Both Statement I and Statement II are true

    Explanation

    Both statements are confirmed by direct textual statements in paragraph three:

    • Statement II is true. The author writes: 'macro eludes the scientific method of testing hypotheses with repeated experiments: one can't conceivably wreck an economy to establish the effects of a shock.'
    • Statement I is true. The text continues: 'Instead, macroeconomists can only back-test their models against data that may be of questionable provenance.'

    Therefore, Both Statement I and Statement II are true.

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95. Question 95

    Which of the following is the reason, as per the passage, for driving more effective macro policies?

    For most of its existence as a modern field of study since the 18th century, economics has fared reasonably well at explaining consumer and producer behavior. It explained why buyers choose the products they do, how firms produce them to maximize profit, and how markets discover the most efficient prices. This changed with the Great Depression, when aggregate variables came into play that needed a better understanding than an assumption that markets return to equilibrium after shocks. Thus came into existence macroeconomics, the most dismal aspect of the dismal science.

    Economics has since diversified into quite a few other branches, such as those employing statistics and psychology, but most of its disrepute originates from its failure to predict financial crises.

    'Macro' by its very nature - dealing with GDP, employment, inflation and other important but soporific matters and parameters - is headline-grabbing stuff. Governments come into play here, as do international relations. Yet, macro eludes the scientific method of testing hypotheses with repeated experiments: one can't conceivably wreck an economy to establish the effects of a shock. Instead, macroeconomists can only back-test their models against data that may be of questionable provenance. This makes prediction of the next stock market crash forever embarrassingly less exact than the return of Halley's Comet.

    Microeconomics, the reputable part of the endeavor, suffers from fewer limitations to controlled parameter experiments and delivers less equivocal insights. The explosion of commerce in the modern world owes itself in no small measure to predicting actions by the smallest economic agents: humans. Here, too, heroic assumptions are made, the foremost being that human beings are rational and information is free. The crisis in economic modelling arises from aggregating billions of micro truths into one macro truth. Models are improving, so are quantitative capabilities, and the qualitative judgements that drive macro policy will become more refined.

    1. AAssumption that markets return to equilibrium after shocks
    2. BImproved economic models are capable to understand qualitative and quantitative factors
    3. CEconomics has fared reasonably well during financial crises
    4. DEvery small measure is not capable to predict economic outcomes

    Answer: (B) Improved economic models are capable to understand qualitative and quantitative factors

    Explanation

    The passage concludes by observing that 'Models are improving, so are quantitative capabilities, and the qualitative judgements that drive macro policy will become more refined.'

    • B. Improved economic models are capable to understand qualitative and quantitative factors — correct. Synthesizes the passage's conclusion that advancing models and quantitative capabilities refine qualitative macro policy judgments.
    • A. Assumption that markets return to equilibrium after shocks — incorrect. The passage criticizes this assumption as having failed during the Great Depression.
    • C. Economics has fared reasonably well during financial crises — incorrect. The passage states economics fell into disrepute from its failure to predict crises.
    • D. Every small measure is not capable to predict economic outcomes — incorrect. Not stated in the text.

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96. Question 96

    In the recent years, the focus of private equity and venture capital in India, has been on

    Over $350 billion of private capital has been deployed over the last decade, which has propelled more than 5,000 enterprises. These new businesses are anchored in innovative business models combining the full potential of technology, facilitating every Indian to fulfil their aspirations.

    The big shift in the last decade is the reimagination of India as an addressable market of 300 million households, a massive shift from only 20 million households in tier-1 cities earlier. This has been propelled by the strong partnership between entrepreneurs and the PE/VC ecosystem. The share of FDI funnelled into PE/VC has surged to 50-60%, up from 20-30% two decades back.

    Besides the tremendous focus on value creation, the PE/VC industry has brought about multidimensional progress in the economy. The principles of responsible investing that this industry is committed to have enabled the building of a more equitable, inclusive economy, and one that has earned the trust of large global investors as an attractive investment destination.

    The PE/VC ecosystem sparked a renaissance, empowering young minds to take a bold leap. This led to a change in mindset where entrepreneurship is now an accepted livelihood and, indeed, a proud way of life. Today, startups and new businesses are celebrated, and many are giving up established careers to follow their heart, with families standing as stalwart supporters of entrepreneurship. The proportionality of risk and reward has been embraced, forging a harmonious relationship between uncertainty and achievement.

    Stories at home and those that went global are a testament to the power of partnerships between the capital provider and entrepreneurs, transforming a large democracy to be self-reliant, and elevating over a billion people to a new world of greater aspirations and confidence.

    This revolution has been largely possible because of GoI's thrust towards attracting capital. The frameworks of alternative investment funds (AIFs), GIFT City IFSC, Startup India programme and budget allocations, coupled with progressive amendments such as GST and India Stack, have made India an attractive destination for investment.

    1. ASelf-reliance
    2. BJob creation
    3. CInclusive growth
    4. DValue creation

    Answer: (D) Value creation

    Explanation

    Paragraph three opens by highlighting: 'Besides the tremendous focus on value creation, the PE/VC industry has brought about multidimensional progress in the economy.'

    • D. Value creation — correct. Direct textual citation of the primary focus of private equity and venture capital.
    • A. Self-reliance — incorrect. Mentioned as an overall democratic outcome rather than the direct PE/VC operational focus.
    • B and C — broader economic benefits rather than the explicitly stated industry focus.

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97. Question 97

    The principles of responsible investing to which private equity and venture capital industry is committed have resulted in which of the following outcomes for the Indian economy?

    A. Democratic decentralization
    B. Balanced regional growth
    C. Inclusive and equitable economy
    D. Larger export orientation
    E. Earned the trust of global investors

    Choose the correct answer:

    (Source-level note: Preserved source typo "answer form the options" in original exam context)

    Over $350 billion of private capital has been deployed over the last decade, which has propelled more than 5,000 enterprises. These new businesses are anchored in innovative business models combining the full potential of technology, facilitating every Indian to fulfil their aspirations.

    The big shift in the last decade is the reimagination of India as an addressable market of 300 million households, a massive shift from only 20 million households in tier-1 cities earlier. This has been propelled by the strong partnership between entrepreneurs and the PE/VC ecosystem. The share of FDI funnelled into PE/VC has surged to 50-60%, up from 20-30% two decades back.

    Besides the tremendous focus on value creation, the PE/VC industry has brought about multidimensional progress in the economy. The principles of responsible investing that this industry is committed to have enabled the building of a more equitable, inclusive economy, and one that has earned the trust of large global investors as an attractive investment destination.

    The PE/VC ecosystem sparked a renaissance, empowering young minds to take a bold leap. This led to a change in mindset where entrepreneurship is now an accepted livelihood and, indeed, a proud way of life. Today, startups and new businesses are celebrated, and many are giving up established careers to follow their heart, with families standing as stalwart supporters of entrepreneurship. The proportionality of risk and reward has been embraced, forging a harmonious relationship between uncertainty and achievement.

    Stories at home and those that went global are a testament to the power of partnerships between the capital provider and entrepreneurs, transforming a large democracy to be self-reliant, and elevating over a billion people to a new world of greater aspirations and confidence.

    This revolution has been largely possible because of GoI's thrust towards attracting capital. The frameworks of alternative investment funds (AIFs), GIFT City IFSC, Startup India programme and budget allocations, coupled with progressive amendments such as GST and India Stack, have made India an attractive destination for investment.

    1. AB and C Only
    2. BA and D Only
    3. CC and E Only
    4. DB, C and D Only

    Answer: (C) C and E Only

    Explanation

    Paragraph three states that responsible investing principles 'have enabled the building of a more equitable, inclusive economy [C], and one that has earned the trust of large global investors as an attractive investment destination [E].'

    • C and E — directly stated in the passage as the tangible outcomes of responsible investing.
    • A, B, and D — democratic decentralization, balanced regional growth, and export orientation are not mentioned in this context.

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98. Question 98

    Which of following, according to the passage, have made India an attractive destination for investments?

    A. Startup India program
    B. Make in India program
    C. Goods and Services Tax facilitation
    D. Alternative Investment funds
    E. Standup India program

    Choose the most appropriate answer:

    Over $350 billion of private capital has been deployed over the last decade, which has propelled more than 5,000 enterprises. These new businesses are anchored in innovative business models combining the full potential of technology, facilitating every Indian to fulfil their aspirations.

    The big shift in the last decade is the reimagination of India as an addressable market of 300 million households, a massive shift from only 20 million households in tier-1 cities earlier. This has been propelled by the strong partnership between entrepreneurs and the PE/VC ecosystem. The share of FDI funnelled into PE/VC has surged to 50-60%, up from 20-30% two decades back.

    Besides the tremendous focus on value creation, the PE/VC industry has brought about multidimensional progress in the economy. The principles of responsible investing that this industry is committed to have enabled the building of a more equitable, inclusive economy, and one that has earned the trust of large global investors as an attractive investment destination.

    The PE/VC ecosystem sparked a renaissance, empowering young minds to take a bold leap. This led to a change in mindset where entrepreneurship is now an accepted livelihood and, indeed, a proud way of life. Today, startups and new businesses are celebrated, and many are giving up established careers to follow their heart, with families standing as stalwart supporters of entrepreneurship. The proportionality of risk and reward has been embraced, forging a harmonious relationship between uncertainty and achievement.

    Stories at home and those that went global are a testament to the power of partnerships between the capital provider and entrepreneurs, transforming a large democracy to be self-reliant, and elevating over a billion people to a new world of greater aspirations and confidence.

    This revolution has been largely possible because of GoI's thrust towards attracting capital. The frameworks of alternative investment funds (AIFs), GIFT City IFSC, Startup India programme and budget allocations, coupled with progressive amendments such as GST and India Stack, have made India an attractive destination for investment.

    1. AA, B and C Only
    2. BA, C and D Only
    3. CA, D and E Only
    4. DC, D and E Only

    Answer: (B) A, C and D Only

    Explanation

    The final paragraph explicitly attributes India's investment attractiveness to: 'The frameworks of alternative investment funds (AIFs) [D], GIFT City IFSC, Startup India programme [A] and budget allocations, coupled with progressive amendments such as GST [C] and India Stack...'

    • A, C and D — all directly cited in the concluding paragraph.
    • B and E — Make in India and Standup India are not referenced anywhere in the text.

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99. Question 99

    According to the passage, which of the following is now being accepted as a way of life and livelihood?

    Over $350 billion of private capital has been deployed over the last decade, which has propelled more than 5,000 enterprises. These new businesses are anchored in innovative business models combining the full potential of technology, facilitating every Indian to fulfil their aspirations.

    The big shift in the last decade is the reimagination of India as an addressable market of 300 million households, a massive shift from only 20 million households in tier-1 cities earlier. This has been propelled by the strong partnership between entrepreneurs and the PE/VC ecosystem. The share of FDI funnelled into PE/VC has surged to 50-60%, up from 20-30% two decades back.

    Besides the tremendous focus on value creation, the PE/VC industry has brought about multidimensional progress in the economy. The principles of responsible investing that this industry is committed to have enabled the building of a more equitable, inclusive economy, and one that has earned the trust of large global investors as an attractive investment destination.

    The PE/VC ecosystem sparked a renaissance, empowering young minds to take a bold leap. This led to a change in mindset where entrepreneurship is now an accepted livelihood and, indeed, a proud way of life. Today, startups and new businesses are celebrated, and many are giving up established careers to follow their heart, with families standing as stalwart supporters of entrepreneurship. The proportionality of risk and reward has been embraced, forging a harmonious relationship between uncertainty and achievement.

    Stories at home and those that went global are a testament to the power of partnerships between the capital provider and entrepreneurs, transforming a large democracy to be self-reliant, and elevating over a billion people to a new world of greater aspirations and confidence.

    This revolution has been largely possible because of GoI's thrust towards attracting capital. The frameworks of alternative investment funds (AIFs), GIFT City IFSC, Startup India programme and budget allocations, coupled with progressive amendments such as GST and India Stack, have made India an attractive destination for investment.

    1. APE/VC ecosystem
    2. BRisk and uncertainty
    3. CInnovation and achievement
    4. DEntrepreneurship

    Answer: (D) Entrepreneurship

    Explanation

    Paragraph four states: 'This led to a change in mindset where entrepreneurship is now an accepted livelihood and, indeed, a proud way of life.'

    • D. Entrepreneurship — correct. Verbatim match for what is accepted as a livelihood and way of life.
    • A. PE/VC ecosystem — incorrect. The ecosystem is the catalyst, not the accepted livelihood.
    • B and C — descriptive themes of business activity rather than the identified career livelihood.

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100. Question 100

     Given the statements:

     Assertion (A): The private equity and venture capital ecosystem has sparked a renaissance, empowering young minds to take a bold leap.
     Reason (R): Today, startups and new business are celebrated and many are given up their established careers to follow their heart, with families standing as stalwart supporters.

     In the light of the statements, choose the correct answer:

     (Source-level note: Preserved source typo "many are given up" in original exam context)

     Over $350 billion of private capital has been deployed over the last decade, which has propelled more than 5,000 enterprises. These new businesses are anchored in innovative business models combining the full potential of technology, facilitating every Indian to fulfil their aspirations.

     The big shift in the last decade is the reimagination of India as an addressable market of 300 million households, a massive shift from only 20 million households in tier-1 cities earlier. This has been propelled by the strong partnership between entrepreneurs and the PE/VC ecosystem. The share of FDI funnelled into PE/VC has surged to 50-60%, up from 20-30% two decades back.

     Besides the tremendous focus on value creation, the PE/VC industry has brought about multidimensional progress in the economy. The principles of responsible investing that this industry is committed to have enabled the building of a more equitable, inclusive economy, and one that has earned the trust of large global investors as an attractive investment destination.

     The PE/VC ecosystem sparked a renaissance, empowering young minds to take a bold leap. This led to a change in mindset where entrepreneurship is now an accepted livelihood and, indeed, a proud way of life. Today, startups and new businesses are celebrated, and many are giving up established careers to follow their heart, with families standing as stalwart supporters of entrepreneurship. The proportionality of risk and reward has been embraced, forging a harmonious relationship between uncertainty and achievement.

     Stories at home and those that went global are a testament to the power of partnerships between the capital provider and entrepreneurs, transforming a large democracy to be self-reliant, and elevating over a billion people to a new world of greater aspirations and confidence.

     This revolution has been largely possible because of GoI's thrust towards attracting capital. The frameworks of alternative investment funds (AIFs), GIFT City IFSC, Startup India programme and budget allocations, coupled with progressive amendments such as GST and India Stack, have made India an attractive destination for investment.

     1. ABoth A and R are true and R is the correct explanation of A
     2. BBoth A and R are true but R is NOT the correct explanation of A
     3. CA is true but R is false.
     4. DA is false but R is true.

     Answer: (A) Both A and R are true and R is the correct explanation of A

     Explanation

     Paragraph four directly connects the renaissance to the cultural celebration and familial support of startups:

     • Assertion (A) is true. The text notes: 'The PE/VC ecosystem sparked a renaissance, empowering young minds to take a bold leap.'
     • Reason (R) is true. The text states: 'Today, startups and new businesses are celebrated, and many are giving up established careers to follow their heart, with families standing as stalwart supporters...'
     • Because the emergence of family support and social celebration of entrepreneurs is the direct behavioral manifestation of the entrepreneurial renaissance, Reason (R) serves as the direct explanation of Assertion (A).

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