UGC-NET (June 2025) · India · National Testing Agency
Original practice questions written to the published syllabus · not past papersHow economies grow and develop, what part agriculture plays as they transform, and how farm, trade, food, fiscal and climate policies differ across the world's agricultural economies, compared through cases from every continent.
In the exams: Economic and social issues papers in agricultural development bank and central bank officer recruitment (heavy); agricultural economics PhD entrance and fellowship examinations, development and policy units (heavy); agricultural, food and development policy modules in master's programmes on several continents (present)
How our questions for UGC-NET spread across the units of Economic Development and Agricultural Economies of the World. Difficulty: 5 easy, 15 medium, 4 hard.
| Poverty and inequality | 5 | |
| Measuring growth and development | 4 | |
| Rural labour, migration and remittances | 4 | |
| Structural transformation and the role of agriculture | 2 | |
| Agricultural trade and the WTO | 2 | |
| Economics of climate change and natural resources | 2 | |
| Development institutions: World Bank, IMF, FAO and IFAD | 2 | |
| Comparative development paths | 1 | |
| Food security and nutrition | 1 | |
| Public finance and monetary basics | 1 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
Nominal GDP of an economy grows by 11 per cent in a year and the GDP deflator rises by 4 per cent. Using the exact relation, real GDP growth is closest to:
C. 6.7 per cent
Real growth = (1.11 / 1.04) − 1 = 6.73 per cent, i.e. about 6.7. Simple subtraction gives 7.0, which is only the approximation; 15.4 multiplies the two rates up instead of deflating; 2.8 divides 11 by 4.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
As incomes rise in an economy, the share of household spending on food tends to fall even though food spending rises in absolute terms. This regularity is known as:
D. Engel's law
Engel's law, from Ernst Engel's household budget studies, says the income elasticity of food demand is below one. Say's law concerns supply creating demand, Gresham's law that bad money drives out good, and Wagner's law that public spending rises with income.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
Mexico's Progresa (1997) and Brazil's Bolsa Família (2003) are best described as:
B. conditional cash transfers tied to schooling and health visits
Both pay cash to poor families on condition that children attend school and the family attends health check-ups. Public works guarantees (such as Ethiopia's PSNP or rural employment guarantees), input vouchers (such as Malawi's) and ration systems are different instruments.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
A transfer of income from a poor person to a slightly less poor person, both remaining below the poverty line, increases which measure but leaves the other two unchanged?
A. The squared poverty gap (P2)
The transfer leaves the number of poor unchanged (P0 and the share below the line) and leaves the total shortfall unchanged (P1), but because P2 squares each gap it rises when the poorest person's gap widens. P2 satisfies Sen's transfer axiom; P0 and P1 do not.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
Of 800 persons of working age, 380 are employed and 20 are unemployed and seeking work. The labour force participation rate (LFPR) and the employment-to-population ratio are:
A. LFPR 50 per cent; employment ratio 47.5 per cent
Labour force = 380 + 20 = 400; LFPR = 400/800 = 50 per cent. Employment-to-population ratio = 380/800 = 47.5 per cent. 95 per cent is employed as a share of the labour force; the swapped pair reverses the two measures; 52.5 adds the unemployed twice.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
In the Harris–Todaro model, the urban wage is 200 currency units a day, the probability of finding an urban job is 0.6, and the rural wage is 100. What does the model predict?
C. Migration continues, because the expected urban wage of 120 exceeds 100
Expected urban wage = 0.6 × 200 = 120 > 100, so migration continues until the expected urban wage equals the rural wage, which happens mainly through rising urban unemployment, not a falling urban wage (the urban wage is institutionally fixed in the model). 80 wrongly multiplies 200 by the 0.4 unemployment probability.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
Under International Labour Organization definitions, a person counts as unemployed if they are:
D. without work, available for work and actively seeking work
ILO unemployment needs all three conditions: without work, currently available and actively seeking. Working fewer hours than wanted is time-related underemployment; unpaid family workers count as employed.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
A Pigouvian tax on a polluting farm input should be set equal to:
C. the marginal external damage at the efficient level of use
Pigou's rule sets the tax at marginal external cost at the social optimum, so private decisions internalise the externality. Average private cost, cumulative damage or doubling the price are not tied to the marginal externality.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
Within the World Bank Group, grants and highly concessional long-term credits to the poorest countries come from the:
C. International Development Association
IDA, established in 1960 and funded by donor replenishments every three years, serves the poorest countries. IBRD lends at near-market terms to middle-income and creditworthy countries; IFC invests in private firms; MIGA insures investments against political risk.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
The term 'Washington Consensus', coined by John Williamson in 1989, refers to:
D. market-oriented reforms such as fiscal discipline and privatisation
Williamson listed ten reforms widely advocated by Washington-based institutions for Latin America: fiscal discipline, tax reform, liberalised interest and exchange rates, trade liberalisation, openness to FDI, privatisation, deregulation and secure property rights among them. The exchange-rate treaty describes Bretton Woods; 0.7 per cent is the UN aid target.
Further reading: Laisha manual: Economic Development and Agricultural Economies of the World; Todaro and Smith, Economic Development; OECD PSE Manual; WTO Agreement on Agriculture; FAO SOFI
Ten here, 24 in the app. The Laisha app has every practice question we have written to UGC-NET in this subject, marked as you go, with timed papers, a jump-to-unanswered list and a certificate when you pass at 70 per cent.
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