UGC NET Solved Question Paper II in Commerce { 2013 September }

1. Government regulation of business is basically intended to

(A) Make sure all business units have the opportunity to be successful.

(B) Warn consumers against unfair business practices

(C) Make sure business firms are socially responsible.

(D) Protect the public from the negative consequences of business behaviour.

Answer: (D)

2. What is not the advantage of SEZ?

(A) Improvement of infrastructure in the hinterland.

(B) Diversion of large tracts of farm land.

(C) Attracting foreign investment.

(D) All of the above.

Answer: (B)

3. Which type of the complaints are not to be entertained by Consumer Forums under the Consumer Protection Act, 1986?

(A) A defective product purchased 1½ years back.

(B) Misleading advertisement in a newspaper.

(C) Services provided free of cost.

(D) Tie in sales.

Answer: (C)

4. Which of the following is a WTO procedure to promote globalisation?

(A) Promotion of free trade.

(B) Reduction of budgetary subsidies.

(C) Reduction in shipping costs.

(D) Promotion of foreign portfolio investment.

Answer: (A)

5. Match the following regarding disinvestment in India:

List – I                                                                                                                        List – II

(a) Disinvestment Policy by the Chandrashekhar Government                                  I. 1999

(b) Rangarajan Committee on disinvestment in public sector enterprises                  II. 1996

(c) Strategic and nonstrategic classification of public enterprises for disinvestment III. 1991-92

(d) Formation of Disinvestment Commission                                                             IV. 1993


         I II III IV

(A) (c) (d) (a) (b)

(B) (a) (b) (c) (d)

(C) (c) (b) (a) (d)

(D) (a) (d) (c) (b)

Answer: (A)

6. When a partnership is dissolved and the following claims need to be met out piece-meal of the cash released, which is the correct sequence in which these claims have to be met?

(a) Any partner’s loan

(b) Capital and Current account balances

(c) Expenses of dissolution

(d) Outsider’s claim (both payable and accrued)


(A) (c), (d), (a), (b)

(B) (b), (c), (a), (d)

(C) (a), (b), (d), (c)

(D) (a), (b), (c), (d)

Answer: (A)

7. In practice, accountants consider revenue from sales if a transaction meets the following condition(s):

(A) The seller has passed the legal or economic ownership of the goods to the buyer.

(B) The seller and the buyer have agreed on the price of the goods.

(C) The buyer has paid the price of the goods or it is certain that he will pay the price.

(D) All of the above.

Answer: (D)

8. The main difference between marginal costing and absorption costing lies in the treatment of

(A) Direct cost

(B) Fixed overhead

(C) Variable overhead

(D) Semi-variable overhead

Answer: (C)

9. Which of the following items is not an appropriation of profit for a limited company?

(A) Corporate tax payable

(B) Ordinary dividend payable

(C) Debenture interest payable

(D) Preference dividend payable

Answer: (C)

10. Which of the following is not applicable to responsibility accounting?

(A) Accounting Centre

(B) Cost Centre

(C) Investment Centre

(D) Profit Centre

Answer: (A)

11. Which one of the following is not the basic assumption of Cardinal Utility analysis?

(A) Rationality of Consumer.

(B) Utility cardinally measurable.

(C) Diminishing marginal utility of money.

(D) Hypothesis of independent utilities.

Answer: (C)

12. Which one of the following is not a property of indifference curve?

(A) Negatively sloping.

(B) Convex to the point of origin.

(C) Indifference curves necessarily have to be parallel.

(D) Two indifference curves do not intersect each other.

Answer: (C)

13. Find the correct matching between items of List-I and the items of List-II.

List – I                                                            List – II

(a) Increase in demand                                    (i) Leftward movement along the demand curve.

(b) Contraction of demand                             (ii) Rightward shift of the demand curve.

(c) Cross demand                                            (iii) Demand of more than one commodity to satisfy one specific want.

(d) Joint demand                                             (iv) Demand of one commodity with changes in the prices of another related commodity


       (i) (ii) (iii) (iv)

(A) (b) (a) (d) (c)

(B) (a) (b) (c) (d)

(C) (b) (a) (c) (d)

(D) (a) (b) (d) (c)

Answer: (A)

14. According to the Law of Variable Proportions, the second stage of production ends when

(A) Marginal productivity of the variable input becomes maximum.

(B) Both marginal productivity and average productivity of the variable input are equal.

(C) Marginal productivity of the variable input becomes zero and average productivity is positive.

(D) Marginal productivity of the variable input is negative but average productivity is positive.

Answer: (C)

15. Total Revenue (TR) function and the Total Cost (TC) function of a perfectly competitive market firm are as follows:

TR = 480 Q – 8 Q2

TC = 400 + 8 Q2

The profit maximizing output would be:

(A) 60

(B) 15

(C) 50

(D) None of the above

Answer: (B)

16. From a population with mean of 220 and standard deviation of 30, a sample of 36 was drawn at random. Calculate the standard error of the sampling distribution and choose the correct answer from the following options.

(A) 7.3

(B) 6.2

(C) 6.0

(D) 5.0

Answer: (D)

17. A committee of six people is to be formed from a group of seven men and four women. What is the probability that the committee will have exactly two women?

(A) 0.456

(B) 0.803

(C) 0.962

(D) None of the above

Answer: (D)

18. From the following Anova table, calculate the ‘F’ value and select the correct answer from the options given below:

  ANOVA Table

Sources of Variation                           Sum of Squares                       Degrees of Freedom

Between columns                                            100                                            3

Between rows                                                 24                                           16

Total                                                                124                                          19

(A) 22.2

(B) 31.5

(C) 33.3

(D) 36.2

Answer: (A)

19. For a hypothesis test, alpha (α) is 0.05 and beta (β) is 0.10. The power of this test is _______

(A) 0.95

(B) 0.90

(C) 0.80

(D) 0.15

Answer: (B)

20. Which one(s) of the following statements is (are) correct with respect to Decision Support System (DSS)?

(i) It (DSS) is used by middle level management.

(ii) DSS applies to mostly structured problems.

(iii) DSS relies on mathematical models for analysis.

(iv) DSS is largely heuristics based.


(A) (i) and (ii) are correct.

(B) (i) and (iii) are correct.

(C) (i), (ii) and (iii) are correct.

(D) All the four are correct.

Answer: (C)

21. Given below are two statements, one labelled as Assertion (A), and the other labelled as Reason (R). Select the correct answer using the code given below:

Assertion (A): Strategies necessarily need to be changed over time to suit environmental changes.

Reason (R): To remain competitive, organisations develop those strategies that create value for customers.


(A) (A) is correct, but (R) is incorrect.

(B) Both (A) and (R) are correct.

(C) (A) is incorrect, but (R) is correct.

(D) Both (A) and (R) are incorrect.

Answer: (B)

22. Which of the following is not true about proactive planning?

(A) Way of thinking about managing the future risks.

(B) Anticipating future contingencies.

(C) Reacting to external events.

(D) Getting ready with alternative routes for unforeseen situations.

Answer: (C)

23. Which of the following is not a characteristic of non-programmed decisions?

(A) Problems are unique and novel.

(B) There are no pre-established policies or procedures to rely on.

(C) The conditions for non-programmed decisions are highly certain.

(D) These are the responsibility of top-management.

Answer: (C)

24. Which of the following is an ethical behaviour of a manager?

(A) Trading stocks on the basis of inside information.

(B) Padding expense accounts.

(C) Not divulging trade secrets to competitors.

(D) Being severely critical of competitors.

Answer: (C)

25. Which of the following is suggested by Blake and Mouton as the best leadership behaviour?

(A) Low concern for people but high concern for production.

(B) Low concern for both people and production.

(C) High concern for both people and production.

(D) High concern for people and low concern for production.

Answer: (C)

26. Which segmentation approach is the most compatible with the spirit of the marketing concept?

(A) Benefit sought

(B) Income

(C) Social class

(D) Family size

Answer: (A)

27. Which of the stages of new product development process can be skipped?

(A) Business analysis

(B) Idea screening

(C) Product testing

(D) Test marketing

Answer: (D)

28. The price-setting method which most closely corresponds to the concept of product positioning is

(A) Cost-plus pricing

(B) Going-rate pricing

(C) Perceived value pricing

(D) Psychological pricing

Answer: (C)

29. The most important retail marketing decision a retailer has to make is to

(A) Select the product assortment.

(B) Identify its target market.

(C) Choose the desired service level.

(D) Develop an effective store atmosphere.

Answer: (B)

30. Which element of the promotion mix do wholesalers primarily use?

(A) Advertising

(B) Personal selling

(C) Public relations

(D) Trade show

Answer: (B)

31. Out of the following alternative methods of project evaluation and selection used in capital budgeting, which one of the combinations in the code corresponds to discounted cash flow methods?

(i) Internal Rate of Return

(ii) Pay Back Period

(iii) Profitability Index

(iv) Net Present Value


(A) (i), (ii), (iii)

(B) (i), (iii), (iv)

(C) (ii), (iii), (iv)

(D) (i), (ii), (iii), (iv)

Answer: (B)

32. When the expected level of EBIT exceeds the indifferent point for two alternative financial plans, (Equity financing and Debt-financing), then

(A) The use of debt financing would be advantageous to increase EPS.

(B) The use of equity financing would be advantageous to maximize EPS.

(C) The use of debt-financing would reduce EPS.

(D) The use of equity financing would keep the EPS constant.

Answer: (A)

33. Which one of the following is not the assumption of the Modigliani-Miller Irrelevance Theory of Dividend Policy?

(A) No personal or corporate income taxes.

(B) Dividend policy has its effect on firm’s cost of equity.

(C) Capital investment policy is independent of its dividend policy.

(D) Stock floatation or transaction cost does not exist.

Answer: (B)

34. Match the items of List-I with the items of List-II.

List – I                                                                        List – II

(i) Financial Breakeven- point                         (a) Rate of discount at which NPV is zero.

(ii) Cost-Volume-Profit Analysis                                (b) Cost of capital remains the same for different degrees of financial leverage.

(iii) Internal Rate of Return                                        (c) Analysis to study relationship among fixed costs, variable costs, sales volume and profits.

(iv) Net Operating Income Approach                         (d) The minimum level of EBIT needed to satisfy all fixed financial charges.


        (a) (b) (c) (d)

(A) (iii) (iv) (ii) (i)

(B) (i) (ii) (iii) (iv)

(C) (iv) (iii) (i) (ii)

(D) (i) (ii) (iv) (iii)

Answer: (A)

35. Assertion (A): The focus of working capital management revolves around managing the operating cycle of the working capital.

Reason (R): It is because the concept is useful to ascertain the requirements of cash to meet the operating expenses of a going concern.


(A) Both (A) and (R) are true, but (R) is not the explanation of working capital management.

(B) Both (A) and (R) are false.

(C) (A) is true, but (R) is false.

(D) (A) is false, but (R) is true.

Answer: (A)

36. Which of the following terms includes the task, duties and responsibilities of a particular job?

(A) Job Evaluation

(B) Job Enrichment

(C) Job Analysis

(D) Job Enlargement

Answer: (C)

37. Match the following lists and indicate the correct pairing:

List – I                                                List – II

1. Simple Ranking                               a Evaluation by Superiors, Peers and Subordinates.

2. Paired Comparison                          b Order of rating from best to worst.

3. 360-Degree Appraisal                     c Standardised quantitative rating.

4. Graphic Rating                                d Comparing ratings to one another.

The correct pairing is

      1 2 3 4

(A) b d a c

(B) a b c d

(C) c d a b

(D) d a b c

Answer: (A)

38. In which method of performance appraisal, the evaluator keeps a written record of significant events and how difficult employees behaved during such events?

(A) Field Review Method

(B) BARS Method

(C) Critical Incidents Method

(D) Assessment Centre Method

Answer: (C)

39. In connection with HRD, what is incorrect?

(A) It is a reactive function.

(B) It develops total organisation.

(C) It focuses on autonomous work groups.

(D) It is an integrated system.

Answer: (D)

40. In which method of training, job conditions are duplicated with equipments and machines which are identical with those used at the work place?

(A) On the job training

(B) Apprenticeship training

(C) Vestibule training

(D) Internship training

Answer: (C)

41. Which one of the following techniques is used by the Commercial Banks in India to measure the risk arising from trading activity?

(A) Network Analysis

(B) Sensitivity Analysis

(C) Value at risk methodology

(D) E.V.A.

Answer: (C)

42. Which of the following schemes introduced by NABARD is intended to provide credit to farmers?

(A) Rural Infrastructure

Development Fund

(B) Kisan Credit Card

(C) Micro-Finance

(D) Co-Operative Development Fund

Answer: (B)

43. Which one of the following is a recent E-Banking initiative in Commercial Banks in India?




(D) NET Banking

Answer: (C)

44. Which of the following fee-based services are provided by IDBI?

(i) Credit syndication

(ii) Corporate trustee services

(iii) Custodial services

(iv) Foreign services

Identify the correct code:


(A) (i), (ii) and (iv)

(B) (i) and (ii)

(C) (ii), (iii) and (iv)

(D) (iii) and (iv)

Answer: (A)

45. SIDBI provides financial assistance in the following forms:

(i) Bills financing

(ii) Project financing

(iii) Re-finance assistance

(iv) Resource support to institutions

Which of the following sequence is correct?

(A) (i), (iii), (iv) and (ii)

(B) (ii), (iv), (i) and (iii)

(C) (iii), (i), (iv) and (ii)

(D) (iv), (i), (iii) and (ii)

Answer: (C)

46. BOP problems in India cannot be attributed only to

(A) Large trade deficit

(B) Increase in invisible surplus

(C) Sensitive behaviour of foreign creditors, including NRI foreign-currency depositors.

(D) The declining role of concessional external finance.

Answer: (B)

47. Arrange the stages in anti-dumping investigation process in right sequence.

(i) Initiation

(ii) Preliminary screening

(iii) Rejection of unsubstantiated information

(iv) Provisional findings

(v) Final findings and measures

(vi) Permitting the exporting country to modify the practices


(A) (i), (ii), (iii), (iv), (vi), (v)

(B) (i), (ii), (iv), (iii), (vi), (v)

(C) (ii), (iv), (iii), (i), (vi), (v)

(D) (ii), (iii), (i), (vi), (iv), (v)

Answer: (D)

48. A situation where any advantage given by one member of the WTO to another member is extended to all WTO members is referred to as

(A) Trade Diversion

(B) Inter Regional Principle

(C) Most Favoured Nation

(D) Least Traded Nation

Answer: (C)

49. The collapse of which of the following systems is related to the Triffin Paradox?

(A) Gold Standard

(B) Exchange rate mechanism (in 1992)

(C) Bretton Woods

(D) None of the above

Answer: (C)

50. Which of the following is/are the assumptions of the Law of One Price?

(i) Restriction on the movement of goods between countries.

(ii) No transportation costs.

(iii) No tariffs

(A) Both (i) and (ii)

(B) Only (i)

(C) Both (ii) and (iii)

(D) (i), (ii) and (iii)

Answer: (C)

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