The Great Economic Shift: From Global Shocks to Nepal’s New Reality

The last few years have felt like an endurance test for the global economy. Between a once-in-a-century pandemic, geopolitical tensions, and skyrocketing supply chain costs, the "old" economic rules were rewritten. For a landlocked nation like Nepal, these global ripples often feel like tidal waves by the time they reach our borders.

By analyzing the data from the recent Economic Survey alongside global trends, we can see a clear picture of how we survived the storm and where our "new normal" is headed.

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Theory and Practice of Fiscal Policy: From Stabilization to Structural Reform

Fiscal Policy is the use of government spending and taxation to influence the economy. It is one of the two primary tools for macroeconomic management—the other being monetary policy (managed by central banks).

In simple terms, fiscal policy is how a government decides to earn money (taxes) and spend money (expenditure) to achieve specific goals like economic growth, full employment, and price stability.

In Nepal, Fiscal Policy is the primary economic instrument used by the Government of Nepal (GoN) to manage the national economy through the annual Federal Budget. It operates via three main channels: government expenditure (G), revenue collection through taxation (T), and public borrowing.

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MA Economics Entrance Exam Paper 2024 (50 MCQs) : Important to Banking Exam

MA in Economics, Tribhuvan University, Entrance Exam - 2024

1. Which of the following is NOT a feature of a mixed economy?

a) Government Intervention         b) Free Market

c) Private Property                      d) Complete absence of market

 

2. Which tax system is based on the principle of equity?

a) Progressive tax system              b) Regressive tax system

c) Proportional tax system               d) Indirect Tax system

 

3. What is the major source of government revenue in Nepal?

a) Direct Tax                     b) Indirect taxes

c) Grants                           d) Borrowing

 

4. Which is an example of a capital gains tax in Nepal?

a) Tax on vehicle ownership        b) Tax on profit from selling property

c) Tax on consumption goods      d) Tax on import

 

5. What is the main objective of a government budget?

a) Reducing taxes                      b) Managing public expenditure and revenue

c) Increasing foreign reserves   d) Privatizing public services

6. What does the concept of "marginal utility" measure?

a) Total satisfaction          b) Additional satisfaction from one more unit

c) Difference in costs       d) Cost per

 

7. What is the current per capita income of Nepalese people (approx.)?

a) USD 1350 per person per year       b) USD 1430 per person per year

c) USD 1456 per person per year       d) USD 1600 per person per year

 

8. Who introduced the concept of "invisible hand"?

a) John Maynard Keynes           b) Adam Smith

c) David Marshall                      d) Alfred Marshall

 

9. Which of the following measures economic inequality?

a) Consumer Price Index             b) Gini Coefficient

c) GDP per capita                        d) Purchasing Power Parity

 

10. What is the main goal of economic development?

a) Higher popular growth                  b) Increased GDP

c) Improves standard of living          d) greater Trade balance

 

11. Which of the following is a normative economic statement?

a) Nepal's inflation rate is 6%.         b) Government should reduce unemployment.

c) Exports increased by 5% last year  d) The economy is in recession.

 

12. What does "opportunity cost" refer to?

a) Cost of producing goods                  b) Money spent on production

c) The next best alternative forgone    d) The profit from an investment

 

13. Which curve depicts income inequality graphically?

a) Laffer Curve               b) Lorenz Curve

c) Engel Curve                d) Kuznets Curve

 

14. What kind of good has a negative income elasticity of demand?

a) Normal goods                 b) Inferior goods

c) Luxury goods                 d) Substitute goods

 

15. What is the primary focus of microeconomics?

a) National output              b) Firm-level decisions

c) Exchange rates              d) Aggregate demand

 

16. Which economic concept relates to "guns versus butter"?

a) Trade-off decisions               b) Perfect competition

c) Market equilibrium              d) Economic surplus

 

17. What does a vertical supply curve indicate?

a) High elasticity of supply                  b) Low elasticity of supply

c) Perfectly inelastic supply                d) Infinite elasticity of supply

 

18. If nominal GDP rises faster than real GDP, this indicates:

a) Increased unemployment             b) Inflation

c) Deflation                                      d) Economic growth

 

19. Price elasticity of demand is measured as the:

a) Ratio of percentage change in price to quantity demanded

b) Ratio of percentage change in quantity demanded to price

c) Ratio of percentage change in quantity demanded to percentage change in price

d) Ratio of percentage change in price to percentage change in quantity demanded

 

20. What is the shape of the total cost curve in the short run?

a) Downward sloping           b) U-shaped

c) Upward sloping               d) Horizontal

 

21. What type of market structure has only one buyer?

a) Monopsony                      b) Oligopoly

c) Perfect Competition        d) Monopolistic Competition

 

22. What is the slope of the demand curve of a firm in a perfectly competitive market?

a) Downward sloping               b) Horizontal

c) Vertical                                 d) Upward sloping

 

 

 

23. Which of the following when one party has more information than another?

a) Public goods                    b) Asymmetric information

c) Externalities                     d) Market power

 

24. The profit-maximizing condition for a firm is:

a) AR=AC               b) MC=MR           c) TC=TR               d) MR=AR

 

25. Indifference curves for perfect complements are:

a) Straight lines               b) Convex to the origin

c) L-shaped                     d) Downward slopping

 

26. Marginal cost intersects the average cost at:

a) Falling part                   b) minimum point

c) rising part                     d) none of them

 

27. What type of goods have a positive cross-price elasticity?

a) Complements                  b) Substitutes

c) Inferior goods                 d) Normal goods

 

28. Which market structure features collusion?

a) Oligopoly                b) Monopolistic competition

c) Monopoly               d) Perfect competition

 

 

29. What is producer surplus?

a) Difference between revenue and cost

b) Difference between willingness to sell and price received

c) Difference between consumer's pay and producer's receipt receipt

d) Difference between producer's expectation and actual

 

30. Which of the following is true under the expenditure approach of GDP in close economy?

a) C+1              b) C+I+G               c) C+I+G+(X-M)               d) C+I+S+T

 

31. The Phillips Curve shows the relationship between:

a) Inflation and umemployment          b) GDP and investment

c) Taxes and government spending     d) Saving and interest rates

 

32. What happens to real GDP during a recession?

a) It increases                      b) It decreases

c) It remains constant          d) It fluctuations randomly

 

33. Which of the following is an example of expansionary fiscal policy?

a) Increasing taxes            b) Reducing government spending

c) Reducing taxes             d) Selling government bonds

 

 

 

 

34. What is the natural rate of unemployment?

a) Zero unemployment                  

b) Unemployment when the economy is at full employment

c) Cyclical unemployment only

d) Structural unemployment only

 

35. The Keyynesian Cross model is used to analyze:

a) Monetary policy effectiveness     b) Aggregate demand and output equilibriuim

c) Supply-side economics                  d) Trade balance

 

36. What is "crowding out" in fiscal policy?

a) Increase in government borrowing reducing private investment

b) Reduction in taxes causing inflation

c) Increase in exports reducing imports

d) Government spending increasing private spending

 

37. What is measured by the Consumer Price Index (CPI)?

a) Changes in the cost of a consumption basket of goods and services

b) Total production in the economy

c) Income inequality            

d) Unemployment rates

 

 

 

38. Which policy tool is used to control inflation?

a) Re-purchase Agreement (Repo)        b) Decrease in interest rate

c) Reverse repo                                     d) Increase in money supply

 

39. What is stagflation?

a) Low inflation and high growth  

b) High inflation and low unemployment

c) High inflation and high unemployment

d) Low inflation and low unemployment

 

40. What shifts the aggregate supply curve to the right?

a) Increase in raw material costs      b) Technological advancements

c) Increase in tax rates                     d) Wage hikes

 

41. In the IS-LM model, what does the IS curve represent?

a) Equilibrium in the goods market      b) Equilibrium in the money market

c) Balance of trade                               d) Full employment output

 

42. Which of the following measures central tendency?

a) Variance        b) Standard deviation         c) Median          d) Interquartile range

 

43. The sum of all probabilities for a probability distribution is:

a) 0            b) 1         c) Infinity                 d) Depends on the data

 

44. In a normal distribution, approximately what percentage of data fall within one standard deviation from the mean?

a) 50%                                    b) 68%               

c) 95%                                   d) 99.7%

 

45. Which of the following sampling methods is random?

a) Convenience sampling                    b) Snowball sampling

c) Stratified sampling                          d) Purposive sampling

 

46. What does the p-value represent in hypothesis testing?

a) Probability of the null hypothesis being true

b) Probability of observing the data given the null hypothesis is true

c) Probability of the alternative hypothesis being true

d) Margin or error

 

47. What is the variance of a data set with values 2, 4, 6, 8?

a) 4                b) 5             c) 6               d) 8

 

48. Which graphical tool is used to show the relationship between two variables?

a) Bar chart                             b) Histogram         

c) Scatter plot                         d) Pie chart

 

 

 

49. What does a high standard deviation indicate?

a) Data points are close to the mean  

b) Data points are widely spread from the mean

c) The data has a small range           

d) Data is normally distributed

 

50. Which of the following is NOT a measure of dispersion?

a) Range                                  b) Standard deviation

c) Median                              d) Interquartile range

 

Thank You!!!

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MA Economics Entrance Exam - 2023, Tribhuvan University (TU)

  

Tribhuvan University

Entrance Exam - 2023

MA Economics

1. Market failure is a concept of

a) disequilibrium in control market          

b) disequilibrium in free unregulated market

c) disequilibrium in regulated market

d) disequilibrium in monopoly Market

 

2. GDP deflator is defined as the ratio of:

a) nominal GDP to real GDP   

b) real GDP to nominal GDP

c) nominal GDP to money supply

d) real GDP to money supply

 

3. If D_x = 420-30p and S_x= 120+20p, what is the equilibrium Price?

a) Rs. 4           b) Rs. 7           c) Rs. 6         d) Rs. 3

 

4.  The second derivative of 2x⁵ is:

a) 40x³             b) 36x²          c) 72x⁴             d) none of the above

 

5. The value of correlation coefficient always lies in between

a) 0 to 1         b) -1 to 0        c) -1 to +1        d) none of the above

6. If  = , find the value of x and y.

a) 6, 3           b) 3, 6        c) 3, -3        d) -3, 4

 

7. If |A| = , the value of determinant |A| is,

a) 32          b) 40           c) 48           d) 60

 

8. If Q = AL^aK^b, the operation of decreasing return to scale in production is,

a) a + b = 0                     b) a + b = 1

c) a + b < 1                     d) a + b > 1

 

9. The term 'liquidity Trap' is associated with

a) Relatively elastic speculative money demand

b) Perfect inelastic speculative money demand

c) Unitary elastic speculative money demand

d) Perfect elastic speculative money demand

 

10. What is the probability of getting total value of 2 or 12 when two dice rolling at a time?

a) 0.1111        b) 0.0556        c) 0.2500             d) 9.2222

 

11. If the curve is negative skewed, the relationship among mean, median and mode is

a) mean > median > mode          b) mean < median < mode

c) mean = median = mode          d) (mean < median) = mode

 

12. In the context of fiscal federalism, what is the primary purpose of government expenditure at the local level?

a) Reducing inflation                       b) promoting economic growth

c) Allocating resources efficiently  d) Controling interest rate

 

13. How does fiscal federalism contribute to the distribution of government expenditure among different levels of government?

a) Centralized decision-making          b) Equal distribution to all regions

c) Decentralized decision-making   d) Strict control by local gov.

 

14. Which principle of allocation ensures that resources are distributed based on the specific needs and characteristics of local governments?

a) Equalization                         b) Proportion representation

c) Centralized allocation          d) Random distribution

 

15. How does government expenditure at the local level impact the overall economy?

a) It has no effict on the ecomomy  

b) Stimulates economic activity at the local level

c) Only effects national economy indicators

d) Increase inflation without benefits

 

16. What does a government budget primarily entail?

a) Private sector finaces                   b) Allocation of public resources

c) Individual income management   d) Corporate financial planning

 

17. Which of the following is a typical focus of the capital budget?

a) Day-to-day operational expenses

b) Long-term investment projects

c) Short-term debt repayment

d) Routine administrative costs

 

18. What is the main purpose of providing subsidies in a government budget?

a) General additional revenue                  b) Encourage competition

c) Support specific economic activities   d) Reduce inflation rates

 

19. When a government faces a low capacity of spending, what is likely to be affected?

a) Increased economic growth        b) Inflation rates

c) Efficient resource utilization      d) Public infrastructure development

 

20. In the context of a government budget, what does the term ''allocation'' refer to?

a) Total revenue generation 

b) Distribution of resources to various sectors

c) Tax collection methods     

d) Public debt management

 

21. Managerial Economics is:

a) Dealing only micro aspects      b) Only a normative science

c) Deals with practical aspects     d) All of the above

 

22. In the case of perfect elasticity, the demand curve is:

a) Vertical          b) Horizontal         c) Flat         d) Steep

 

23. The distinction between variable cost and fixed cost is relevant only in:

a) Long period                       b) short period      

c) Medium period                 d) Mixed period

 

24. The process of analyzing and forecasting demand if know as:

a) Demand estimation            b) Demand analysis

c) Demand function                d) Demand forecasting

 

25. Which of the following is not a function of managerial economicsts:

a) Advice on trade and public relation    b) Investment analysis

c) Economic analysis of agriculture      d) Supervision and control

 

26. Average revenue is the revenue per:

a) Unit commodity sold             b) Total commodity sold

c) Marginal commodity sold     d) None of these

 

27. The opportunity cost of a given activity is:

a) The value of next best activity

b) The value of material used

c) The cost of input used

d) None of these

 

28. In a study concluding that subject who drink caffeine are more likely to have high blood pressure, the independent variable is:

a) The time of consuming caffeine       b) The blood pressure

c) The consumtion of caffeine              d) The subjects

 

29. Economics if often blamed for not adequately addressing the issue of economic inequality. Which economic concept is criticized for exacerbating inequality?

a) Progressive taxation                    b) Trickle-down economics

c) Universal basic income               d) Social Safety nets

 

30. ………… is a gift of natur.

a) Land            b) Labour         c) Capital        d) Organisation

 

31. Income minus saving is equal to:

a) Consumption         b) Production       c) Investment         d) Demand

 

32. ……… means absence of competition.

a) Monopoly     b) Perfect        c) Imperfect        d) Oligopoly

 

33. In thress sector economy, Y equals:

a) C+I        b) C+I+G         c) C+I+G+(X-M)       d) None of these

 

34. Under the keynesian model, aggregate expenditure is measured along:

a) Vertical axis                 b) Horizontal axis

c) Vertical Intercept        d) 45 degree line

 

35. Which of the fillowing is not a topic studied in macroeconomic?

a) GDP                                b) The unemployment rates

c) The inflation rate            d) The perice of Dell computers

 

36. Critics argue that economics fails to address market failure adequately. What is an example of a market failure?

a) Efficient resource allocation     b) Pefect information

c) Externalities                              d) Price stability

 

37. Unemployment means that:

a) There is excess demand in the labour market

b) There are some people who will not work at the going wage rate.

c) At the going wage rate, there are people who want to wark but can't find work.

d) People are not willing to work at the going wage rate.

 

38. According to the classical economists, the economy ……

a) It self-correcting                             b) Will never be at full employment

c) Has sticky prices in many industries 

d) Requires fine-tuning to reach full employment.

 

39. Economics is sometimes criticized for its emphasis on economic growth as the primary indicator of prosperity. What is a potential downside associated with this focus?

a) Job creation                             b) Environmental degradation

c) Income equality                      c) Technological advancement

40. Multiple counting during National Income accounting can be avoided by:

a) Including transfers in their calculation

b) Counting both intermediate and finak goods

c) Only counting final goods

d) Only counting intermediate goods

 

41. GDP data are criticized as being inaccurate measure of economic welfare because:

a) They do not take into account changes in the amount of leisure

b) They do not take into account all changes in product quality

c) They do not take into account the adverse effects of economic activity on the environment.

d) All of the above considerations.

 

42. Gross investment is a:

a) Flow, as is depreciation                        b) Flow, as is capital

c) Stock, whereas depreciation is a flow  d) Stock, whereas capital is a flow

 

43. In a private closed economy, when aggregate expenditure equal GDP:

a) Consumption equals investment    

b) Consumption equals aggregate expenditure

c) Planned investment equals saving

d) Disposable income equals consumption minus saving

 

 

44. During the COVID-19 pandemic, which economic sector was most significantly impacted globally?

a) Technology    b) Healthcare   c) Tourism & hospitality   d) Manufacturing

 

45. What indicators are typically included in the calculation of the Human Development Index (HDI)?

a) Income, life expectancy and education

b) GDP, Inflation rate and literacy rate

c) Unemployment rate, healthcare access and poverty rate

d) Stock market performance, infrastructure development and cultural diversity

 

46. What is the currency of Japan?

a) Won        b) Yen         c) Baht         d) Ringgit

 

47. Why do investors often consider investing in land?

a) Guaranteed high return                   b) Quick liquidity

c) Potential for capital appreciation    d) Low risk

 

48. What was the primary contribution of Milton Friedman, a nobel laureate in economics?

a) Behavioral economics         b) Monetary policy & quantity theory of money

c) Development economics     d) Game theory

 

 

 

 

49. The concept of 'Trickle-down economics' is often debated. What does it suggest?

a) Economic inequality benefits society

b) Economic benefits for the wealth will eventually benefit everyone

c) Redistribution of wealth is unnecessary

d) Government intervention harms economic growth

 

50. What is a common criticism directed towards economic models?

a) Lack of mathematical rigor

b) Overemphasis on empirical evidence

c) Inability to predict market trends

d) Inflexibility in adapting to real-world complexities 

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