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# Commerce UGC NTA NET JRF Solved Previous Year Paper Commerce July-2016

1. For the following statements of Assertion (A) and Reasoning (R) indicate the correct code from the alternatives given :
Assertion (A) : Liberalization means corporatisation of departmental undertakings and public undertakings.
Reasoning (R) : Freedom to public sector undertakings to access capital market.
Codes :
A. Both (A) and (R) are true and (R) is correct explanation of (A).
B. Both (A) and (R) are true but (R) is not a correct explanation of (A).
C. (A) is true but (R) is false.
D. (A) is false but (R) is true.
Ans : A

2. Match the items of List – I with List – II and indicate the correct code :
List – I List – II
(a) Fiscal Policy (i) Mitigation of National hazards
(b) Technology Policy (ii) Balance of Payment
(c) Macro-Economic Policy (iii) Fiscal Federalism
(d) Monetary Policy (iv) Inflation
Codes :
(a) (b) (c) (d)
A. (i) (ii) (iii) (iv)
B. (iii) (i) (ii) (iv)
C. (iv) (iii) (i) (ii)
D. (ii) (i) (iv) (iii) 1
Ans : B

3. Which of the following factor is not directly responsible for slowing down the growth of infrastructure?
A. High level of perceived political risk.
B. High level of sunk cost.
C. High probability of time and cost over-run.
D. Introduction of competition in all sectors.
Ans : D

4. Out of the following which is not a major component of Gross Domestic Product (GDP)?
A. Personal Consumption Expenditure
B. Gross Private Domestic Investment
C. Net Personal Income
D. Net Exports
Ans : C

5. Which of the following is not a forum of Consumer Dispute Redressal System?
A. Local forum
B. District forum
C. State Forum (State Commission)
D. National Commission
Ans : A

6. X Ltd. purchased 70 per cent of the shares of Y Ltd. at a price of Rs. 1,00,000. Share capital of Y Ltd. was of Rs. 70,000 and its accumulated profits amounted to Rs. 90,000. What would be the amount of Minority Interest in the consolidated Balance Sheet?
A. Rs. 25,000 B. Rs. 70,000
C. Rs. 1,00,000 D. Rs. 40,000
Ans : *

7. Match the items in Column – I with the items in Column – II and indicate the correct code :
Column – I Column – II
(a) Debt-Equity ratio (i) Net profit before interest and tax/ Interest on long term loans
(b) Proprietary ratio (ii) Equity share capital + Reserves /Preference share capital + Interest bearing finance
(c) Interest coverage ratio (iii) Long term debts/Shareholder’s Funds
(d) Capital gearing ratio (iv) Shareholder’s Funds/Total Assets
Codes :
(a) (b) (c) (d)
A. (i) (ii) (iii) (iv)
B. (iii) (iv) (i) (ii)
C. (iii) (iv) (ii) (i)
D. (ii) (iii) (iv) (i)
Ans : B

8. Ram and Shyam are partners in a firm with capital of Rs. 4,80,000 and Rs. 3,10,000, respectively. They admitted Ganesh as a partner with 1/4 th share of profit. Ganesh brings Rs. 3,00,000 as his capital. Ganesh’s share of goodwill will be
A. Rs. 1,10,000 B. Rs. 27,500
C. Rs. 17,500 D. Rs. 70,000
Ans : B

9. Which of the following is a deferred revenue expenditure?
A. Legal expenses incurred on the purchase of land.
B. Expenses on a mega advertisement campaign while launching a new product.
C. Expenses incurred on installation of a new machine.
D. Wages paid for construction of an additional room in the building.
Ans : B

10. The amount of depreciation charged to Profit and Loss Account varies every year under :
A. Fixed instalment method
B. Annuity method
C. Diminishing balance method
D. Insurance policy method
Ans : C

11. Ordinal utility analysis of the consumer’s behaviour is considered superior to the cardinal utility analysis mainly due to
A. assumption of the rationality of the consumer’s behaviour.
B. possibility of the derivation of the consumer’s demand.
C. bifurcation of price effects into income and substitution effects.
D. consideration of the available limited resources for satisfying consumer’s demand.
Ans : C

12. For the following statements of Assertion (A) and Reasoning (R) indicate the correct code :
Assertion (A) : Price reduction normally leads to an increase in the demand for a commodity.
Reason (R) : Price reduction leads to the entry of new buyers of the commodity in the market.
Codes :
A. (A) is correct but (R) is not correct.
B. (A) is not correct but (R) is correct.
C. Both (A) and (R) are correct and (R) offers full explanation of (A).
D. Both (A) and (R) are correct but (R) does not offer full explanation of (A).
Ans : D

13. The minimum Long Run Average Cost (LAC) can be determined on a
I. LAC curve for a normal production function
II. LAC curve for a linear production function
III. Planning curve
IV. Envelope curve
Codes :
A. I II III B. II III IV
C. I III IV D. I II IV
Ans : C

14. Monopoly is not considered desirable from the point of view of the society mainly because the monopolist endeavours to
A. earn net revenue on sale of all goods including those involving no cost of production.
B. earn net revenue on sale of goods in short run as well as long run.
C. charge different prices for the same product from the different categories of buyers.
D. produce below economic capacity level when he exhibits satisfaction with normal profit only.
Ans : D

15. Product-line pricing strategy includes which combination of the following?
I. Public utility pricing
II. Complementary goods pricing
III. Spare parts pricing
Codes :
A. I II III B. II III IV
C. I II IV D. I III IV
Ans : B

16. When the data are classified only on the basis of descriptive characteristics which cannot be quantified is known as
A. Geographical classification
B. Chronological classification
C. Qualitative classification
D. Quantitative classification
Ans : C

17. Which one of the following is a false description?
A. In a moderately asymmetrical distribution, the empirical relationship between Mean, Mode and Median suggested by Karl Pearson is : Mean – Mode = 3 (Mean – Median)
B. Coefficient of variation is an absolute measure of dispersion.
C. Measure of skewness indicates the direction and extent of skewness in the distribution of numerical values in the data set.
D. Kurtosis refers to the degree of flatness or peakedness in the region around the mode of a frequency curve.
Ans : B

18. Match the items of List – I with the items of List – II and indicate the code of correct matching :
List – I List – II
(a) Coefficient of (i) $\gamma _{xy}=\frac{\sigma _x}{\sigma _y}$
(b) Spearman’s Rank correlation coefficient (ii) $1-\frac{6\mathrm{\Sigma }d^2}{n(n^2-1)}$
(c) Regression coefficient of x on y variable (iii) $\frac{\mathrm{\Sigma xy}}{n\sigma _x\sigma _y}$
(d) Karl Pearson’s formula of calculating γ (iv) $\gamma ^2$
Codes :
(a) (b) (c) (d)
A. (i) (ii) (iii) (iv)
B. (i) (iv) (ii) (iii)
C. (iv) (iii) (ii) (i)
D. (iii) (ii) (iv) (i)
Ans : *

19. Statement – I : When the null hypothesis is true but as per the hypothesis-testing, it is rejected, it is known as beta type error in hypothesis testing.
Statement – II : Chi-square test is exclusively a non-parametric test.
Codes :
A. Both the statements are true.
B. Both the statements are false.
C. Statement – I is true while Statement – II is false.
D. Statement – I is false while Statement – II is true.
Ans : B

20. Computers that recognize data as discrete signals are called?
A. Analog computers B. Digital computers
C. Hybrid computers D. Super computers
Ans : B

21. Herbert Simon’s concept of administrative man assumes that
(a) He has satisfying approach in decision making rather than the maximising approach.
(b) He can make decisions without determining all possible alternatives.
(c) He is completely rational in decision making.
A. (a) only B. (b) only
C. Both (a) and (b) D. (a), (b) and (c)
Ans : C

22. Which of the following statement(s) is/are correct about scalar chain principle as given by Fayol?
(a) Each communication, going up or down, must flow through each position in the line authority.
(b) Chain of communication cannot be broken under any circumstances.
A. Only (a) is correct.
B. Only (b) is correct.
C. Neither (a) nor (b) is correct.
D. Both (a) and (b) are correct.
Ans : A

23. A mission statement should be
(a) Self-explanatory
(b) Elaborate
(c) Distinctive
(d) Feasible
Codes :
A. (a) only
B. (a) and (b)
C. (a), (b) and (c)
D. (a), (c) and (d)
Ans : D

24. Match List – I and List – II and indicate the correct code :
List – I List – II
(a) Equity theory (i) Motivation depends on ratios of inputs and outcomes of self and others.
(b) Vroom’s theory (ii) People are motivated to achieve a goal to the extent that they expect that certain action will help them to reach the goal.
(c) Porter and Lawler model (iii) There exists a complex relationship among motivation, performance and satisfaction.
(d) Herzberg’s theory (iv) A challenging job that has opportunities for achievement, recognition, responsibility and growth will motivate employees.
Codes :
(a) (b) (c) (d)
A. (i) (ii) (iii) (iv)
B. (ii) (i) (iii) (iv)
C. (iii) (ii) (i) (iv)
D. (i) (iii) (ii) (iv)
Ans : A

25. Assertion (A) : ‘Grapevine’ tends to be more active during periods of change, excitement, anxiety and sagging economic conditions.
Reason (R) : Employees use this communication to fill in important information gaps and clarify management decisions.
Codes :
A. (A) is right and (R) is wrong.
B. (A) is wrong and (R) is right.
C. Both (A) and (R) are right and (R) explains
(A).
D. Both (A) and (R) are right but (R) does not explain (A).
Ans : C

26. Which type of differentiation is used to gain competitive advantage through the way a firm designs its distribution coverage, expertise and performance?
A. Channel differentiation
B. Services differentiation
C. People differentiation
D. Product differentiation
Ans : A

27. Which one of the following is the most likely result of a marketing strategy that attempts to serve all potential customers?
A. All customers will be delighted.
B. Customer-perceived value will be increased.
C. The company will need to follow up with a demarketing campaign.
D. Not all customers will be satisfied.
Ans : D

28. Which of the following is not a primary activity in Michael Porter’s value chain?
A. Inbound logistics
B. Operations
C. Outbound logistics
D. Procurement
Ans : D

29. Which of the following represents consistency of results when the test instrument is used repeatedly?
A. Validity
B. Reliability
C. Relativity
D. Sensitivity
Ans : B

30. Assertion (A) : Too many stimuli make a person accommodated to those sensations.
Sensory adaptation is a problem that concerns many advertisers, which is why they try to change their advertising campaigns regularly.
Reason (R) : To cut through advertising clutter and to ensure that consumers perceive advertisement, marketers try to increase sensory input.
Codes :
A. (A) is right and (R) is wrong.
B. (A) is wrong and (R) is right.
C. Both (A) and (R) are right but (R) does not explain (A).
D. Both (A) and (R) are right and (R) explains
(A).
Ans : D

31. Which of the following is not a feature of payback period method?
A. It is simply a method of cost recovery and not of profitability.
B. It does not consider the time value of money.
C. It does not consider the risk associated with the projects.
D. It is very difficult to calculate.
Ans : D

32. Which of the following is not a source of credit information of prospective customers?
A. Letter of Credit B. Bank Reference
C. Trade Enquiry D. Credit Bureau
Ans : A

33. The portion of earnings which is distributed among shareholders in the form of dividend is called
A. Proprietary Ratio
B. Earnings-yield Ratio
C. Payout Ratio
D. Retention Ratio
Ans : C

34. Select the correct code regarding motives for holding inventories by firms :
(a) Transaction motive
(b) Environmental motive
(c) Precautionary motive
(d) Speculative motive
(e) Competitive motive
Codes :
A. (a), (b), (c), (d) B. (a), (b), (d), (e)
C. (a), (d), (e) D. (a), (c), (d)
Ans : D

35. Which of the following formulae is related to operating leverage?
A. $\frac{Contribution}{Operating\ Profit}$
B. $\frac{Sales-\ Variable\ Cost\ }{Earnings\ before\ Interest\ and\ tax}$
C. $\frac{Percentage\ change\ in\ EBIT\ }{Percentage\ change\ in\ sales}$
D. All of the above
Ans : D

36. Which of the following is not true in case of HRM?
A. Employees are seen as an investment to be nurtured as well as a cost to be controlled.
B. Conflicts are dealt with by team members within their teams.
C. Preference is for collective bargaining of pay and working conditions.
D. Emphasis is on competitive pay and conditions to stay ahead of competitors.
Ans : C

37. Which one of the following is an advantage of Magazines as a source of recruitment?
A. Less expensive
C. Reach a diverse audience
D. Many unmotivated applicants
Ans : C

38. Examine the following statements and choose the correct code :
Assertion (A) : Human Resource planning must always be seen within the strategy making context.
Reason (R) : Human Resource planning process removed from the realities of the business will be a waste of time.
Codes :
A. Both (A) and (R) are correct.
B. Both (A) and (R) are wrong.
C. (A) is correct, but (R) is wrong.
D. (A) is not correct, but (R) is correct.
Ans : A

39. Match the items of List – I with the items of List – II and select the correct code :
List – I List – II
(a) Golden parachutes (i) The right to purchase a stated number of shares of a company stock at today’s price at some time in the future.
(b) Gain sharing (ii) An incentive plan that engages employees in a common effort to achieve productivity objectives and share the gains.
(c) Stock-option (iii) Payments companies make in connection with a change in ownership or control of a company
(d) Annual bonus (iv) Plans designed to motivate short term performance of managers and are tried to company profitability.
Codes :
(a) (b) (c) (d)
A. (iii) (i) (ii) (iv)
B. (i) (ii) (iii) (iv)
C. (ii) (iii) (i) (iv)
D. (iii) (ii) (i) (iv)
Ans : D

40. Which one of the following is not a function of plant council?
A. Recommend and improve safety, health and welfare measures.
B. Determination of productivity schemes taking into consideration the local conditions.
C. Planning, implementation and review of monthly targets and schedules.
D. Review of working of shop level bodies.
Ans : A

41. Assertion (A) : “Banks globally are facing more challenges now, and Macro sustainability is a necessity but not sufficient for sustainable economic growth.”
Reason (R) : “Putting regulations in place is only one part and their implementation is equally important for achieving growth and sustainability.”
Codes :
A. (A) and (R) both are true and (R) is correct explanation of (A).
B. (A) and (R) both are true but (R) is not the correct explanation of (A).
C. (A) is true and (R) is false.
D. (A) is false and (R) is true.
Ans : A

42. Banking on telephone service includes :
(i) Automatic balance voice out
(ii) Inquiry all term deposit account
(iii) Direct cash withdrawl
(iv) Utility bill payment
(v) Voice out last five transactions
Codes :
A. (i), (ii), (iii) and (v)
B. (i), (ii), (iv) and (v)
C. (ii), (iii), (iv) and (v)
D. All (i), (ii), (iii), (iv) and (v)
Ans : B

43. Which one of the following banks currently ranks number one in India in terms of market capitalization?
A. State Bank of India
B. I.C.I.C.I. Bank
C. U.T.I. Bank
D. I.D.B.I. Bank
Ans : A

44. Match the items of Column – I with the items in Column – II and suggest the correct code :
Column – I Column – II
(a) Interbank call market (i) Money market
(b) Commercial Bills (ii) Promissory note
(c) Commercial paper market (iii) Short-term maturity
(d) Treasury bills (iv) Government papers
Codes :
(a) (b) (c) (d)
A. (i) (ii) (iv) (iii)
B. (iii) (i) (ii) (iv)
C. (i) (iii) (iv) (ii)
D. (iv) (iii) (ii) (i)
Ans : B

45. Match the items of List – I with List – II with regard to the BASEL III norms and select the correct code :
List – I List – II
(a) Pillar 1 (i) Supervisory review process
(b) Pillar 2 (ii) Market discipline
(c) Pillar 3 (iii) Minimum regulatory capital requirements based on Risk Weighted Assets
(RWAs)
Codes :
(a) (b) (c)
A. (i) (ii) (iii)
B. (i) (iii) (ii)
C. (iii) (ii) (i)
D. (iii) (i) (ii)
Ans : D

46. Assertion (A) : Comparative cost theory is static in character.
Reason (R) : Comparative cost theory is based on fixed supplies of factors of production.
Codes :
A. (A) is correct, but (R) is incorrect.
B. (R) is correct, but (A) is incorrect.
C. (A) and (R) both are correct, but (R) is not the correct explanation of (A).
D. (A) and (R) both are correct and (R) is the correct explanation of (A).
Ans : D

47. Match the items of List – I with List – II with regard to Balance of Payments equilibrium :
List – I List – II
(a) Exchange control (i) Exporters surrender foreign exchange to the central bank.
(b) Trade Policy Measure (ii) Bank rate raised by the central bank
(c) Expenditure reducing policy (iii) Reduction in foreign exchange rate
(d) Expenditure switching policy (iv) Enhancing exports by granting subsidies
Codes :
(a) (b) (c) (d)
A. (i) (iv) (ii) (iii)
B. (i) (ii) (iii) (iv)
C. (iii) (ii) (iv) (i)
D. (iv) (iii) (ii) (i)
Ans : A

48. Which among the following is closely associated with intellectual property rights?
A. GATS
B. TRIMS
C. TRIPs
D. MFN
Ans : C

49. What is not correct about International Development Association (IDA)?
(a) Following earthquake in 2015, IDA has helped Nepal rebuild and recover.
(b) IDA ranks as the highest performing multilateral development bank in 2016.
(c) IDA is a subsidiary bank of IBRD.
(d) India has procured highest amount of international loan from IDA.
Codes :
A. (a) and (b)
B. (c)
C. (d)
D. (a) and (c)
Ans : C

50. As per the Foreign Trade Policy 2015-2020, a three star export house should have :
A. Export performance (FOB/FOR) of US Dollar 100 million during current and previous two years.
B. Export performance (FOB/FOR) of US Dollar 500 million during current and previous two years.
C. Export performance (FOB/FOR) of US Dollar 1000 million during current and previous two years.
D. Export performance (FOB/FOR) of US Dollar 2000 million during current and previous two years.

Note :
This paper contains seventy five (75) objective type questions of two (2) marks each. All questions are compulsory.
Ans : A*

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