1. Throughout the first decade of the 21st century, net increases in Indian direct investments in
the Far East (funds outflows) exceeded net new Far East direct investment in India.
Each of the following, if true, could help to account for this trend except:
a) Land values in the Far East were increasing at a faster rate than in India.
b) Labour mobility was higher in India than in the Far East.
c) The cost of labour (wages) was consistently lower in the Far East than in India.
d) Corporate liquidity was lower in India than in the Far East.
2. Inflation can only be fundamentally caused by two factors—Supply side factors and demand
side factors. These factors are either reductions in the supply of goods and services or
increases in demand due to either the increased availability of money or the reallocation of
demand. Unless other compensating changes also occur, inflation is bound to result if either of
this occurs. In economies prior to the introduction of banks (a pre banking economy) the
quantity of money available, and hence, the level of demand, was equivalent to the quantity of
gold available. If the statements above are true, then it is also true that in a pre banking
economy
a) any inflation would be the result of reductions in the supply of goods and services.
b) if other factors in the economy are unchanged, increasing the quantity of gold available
would lead to inflation.
c) if there is a reduction in the quantity of gold available, then, other things being equal,
inflation would result.
d) Whatever changes in demand occur, there would be compensating changes in the supply
of goods and services.
3. Which of the following best completes the argument below?
One effect of the FM radio was a collapse in the market for audio cassettes. Formerly, people
had to buy audio cassettes in order to listen to their favorite music, but the advent of FM radio
changed all that by ‘giving people music on tap’. Similarly, the introduction of crops
genetically engineered to be resistant to pests will
a) increase the size of crop harvests.
b) increase the cost of seeds.
c) reduce demand for chemical pesticides.
d) reduce the value of farmland.
4. Most large retail stores of all goods and brands hold discount sales in the month of
November. The original idea of price reduction campaigns in November became popular
when it was realized that the sales of products would generally slow down following the
Diwali rush, were it not for some incentive. The lack of demand could be solved by the
simple solution of reducing prices.
There is now an increasing tendency among major chains of stores across the country to have
their “November sales” begin before Diwali. The idea behind this trend is to endeavor to sell
the maximum amount of stock at a profit, even if that may not be at the maximum profit.
Which of the following conclusions cannot be drawn from the above?
a) The incidence of “early” November sales results in lower holdings of stocks with the
corollary of lower stock holding costs.
b) Demand is a function of price; as you lower price, demand increases.
c) Major stores seem to think it makes sense to have the November sales campaigns pre-
Diwali.
d) The major department stores do not worry as much about profit maximisation as they do
about sales maximisation.
5. Of the world’s largest AIDS cases countries in 2010, three had the same share of world AIDS
patients as they had in 2000. These three countries may serve as examples of countries that
succeeded in holding steady their share of the AIDS disease.
Which of the following, if true, would most seriously undermine the idea that these countries
serve as examples as described above?
a) Of the three countries, two had a much larger share of world AIDS incidence in 2000
than in 2010.
b) Countries should strive to reduce their share of the total AIDS patients in the world,
rather than try to hold it constant.
c) The three countries have different rates of population growth.
d) None of these.
6. In a famous experiment at the IISC campus, when a cat smelled milk, it salivated. In the
experiment, a bell was rung whenever food was placed near the cat. After a number of trials,
only the bell was rung, whereupon the cat would salivate even though no food was present.
Such behaviour has been observed in other animals such as dogs, monkeys, etc. and is a vital
input for training domesticated animals.
Which of the following conclusions may be drawn from the above experiment?
a) Cats and other animals can be easily tricked.
b) The ringing of a bell was associated with food in the mind of the Cat.
c) A conclusion cannot be reached on the basis of one experiment.
d) Two stimuli are stronger than one.
7. At a rally in the Moinul Haque Stadium, candidate Laloo exclaimed: “Nearly everyone at the
rally is behind me. It looks like I am going to be elected.”
Which of the following statements, if true, best supports the above conclusion?
a) Laloo’s opponent also appeared at the rally.
b) The rally was attended by almost all the residents of Laloo’s constituency.
c) Laloo was never defeated in an election.
d) Laloo was an undesirable candidate.
8. Ram is a terrible driver. He has had at least five traffic violations in the past year.
Which of the following can be said about the above claim?
a) This is an example of an argument that is directed against the person making an argument
rather than the argument itself.
b) The argument is fallacious because it contains an illegitimate parallelism.
c) The above argument obtains its strength from a similarity of two compared situations.
d) The argument is built upon an assumption that is not stated but is concealed.
9. Since the late 1970s, there has been a dramatic decline in the incidence of traditional
childhood diseases such as chicken pox, in India. This decline has been accompanied by an
increased incidence of scleroid malaria, a hitherto rare viral infection among children. Few
adults, however, have been affected by the disease. Which of the following, if true, would
best help to explain the increased incidence of scleroid malaria among children?
a)Hereditary factors determine in part, the degree to which a person is susceptible to the
virus that causes scleroid malaria.
b) The decrease in traditional childhood diseases and the accompanying increase in
scleroid malaria have not been found in any other country.
c) Children who contract chicken pox develop an immunity to the virus that causes scleroid
malaria.
d) None of these.