1. Which one is/are the correct statement from the following?

(A) The lower t-statistics, the more significant true population parameter
(B) The higher the t-statistics, the more true population parameter is significant Ans
(C) The higher the standard Error of sample parameter, the more true population
parameter is significant
(D) None
2. One of the following is correct about coefficient of determination (R^2)?
(A) The higher value of R^2, the best the model fit the data
(B) The lower value of R^2, the lesser the model fit the data
(C) The higher value of R^2, the lesser the model fit the data
(D) A and B Ans
3. Heteroscedasticity problem result in?
(A) Biased OLS estimators
(B) OLS Estimators are inefficient Ans
(C) Has no problem
(D) OLS estimator are inconsistent
4. In econometric model, the existence of the disturbance term is due to:
(A) Perfect specification of the model
(B) Accurate measurement of variables
(C) Omission of other variables Ans
(D) Existence of predictable element
5. Type I error in econometrics indicates that;
(A) Failing to reject null hypothesis when it is false
(B) Rejecting the null hypothesis when it is true Ans
(C) Reject the null hypothesis when it is false
(D) None
6. Assume a researcher want to study factors affecting students’ performance using Ordinary Least square
model where CGPA of students taken as dependent variable and sex, race, Educational facilities, class
attendance, program, Age, hours of study per day, income and Personal computer as explanatory
variables and get the following regression result as shown in table below: Based on the below STATA result
answer the following questions. The number of observation and value of F-statistics used for this
regression analyses are_______________ and ____________
(A) 199 and 586.05
(B) 201 and 576.07
(C) 200 and 586.07 Ans
(D) 190 and 596.07
7. Assume a researcher want to study factors affecting students’ performance using Ordinary Least square
model where CGPA of students taken as dependent variable and sex, race, Educational facilities, class
attendance, program, Age, hours of study per day, income and Personal computer as explanatory
variables and get the following regression result as shown in table below: Based on the below STATA result
answer the following questions. In the regression result which variable/s is/ are statistically significant at
5% significance level?
(A) PC ownership, Age, Income of student’s, Hours of study and Sex of students
(B) Income of student’s, PC ownership, Age, Hours of study and Class attendance
(C) Hours of study, Income of student’s, PC ownership, Age and Educational
facilities Ans
(D) All
8. Assume a researcher want to study factors affecting students’ performance using Ordinary Least square
model where CGPA of students taken as dependent variable and sex, race, Educational facilities, class
attendance, program, Age, hours of study per day, income and Personal computer as explanatory
variables and get the following regression result as shown in table below: Based on the below STATA result
answer the following questions. Which one is the correct interpretation for the coefficient of Income
variable?
(A) Being the other variables constant, as income of students increased by one unit, the
students CGPA increased by 1.09 unit Ans
(B) Being the other variables constant, as income of students increased by one unit,
the students CGPA increased by 0.09 unit
(C) Being the other variables constant, as income of students increased by one unit, the
students CGPA decreased by 1.09 unit
(D) Being the other variables constant, as income of students increased by one unit, the
students CGPA reduced by 0.09 unit
9. Assume a researcher want to study factors affecting students’ performance using Ordinary Least square
model where CGPA of students taken as dependent variable and sex, race, Educational facilities, class
attendance, program, Age, hours of study per day, income and Personal computer as explanatory
variables and get the following regression result as shown in table below: Based on the below STATA result
answer the following questions. How much the explanatory power of the model?
(A) Students CGPA explained by explanatory variables incorporated into the model by
96% Ans
(B) Students CGPA explain the explanatory variables by 96%
(C) Explanatory Variables explained by dependent variable by 96% All
10. Attempt the following hypothetical evidence. Mr. Garasu is working in USA but his citizen is Ethiopian.
Mr. John is working in Ethiopia but his citizen is American. One of the following statements is false in GDP
and GNP accounting.
(A) Mr. John income must be included in GDP of Ethiopia
(B) Mr. Garasu income must be included in GNP of Ethiopia
(C) GDP of Ethiopian is the value of all goods and services produced in the territory of
Ethiopia in one year.
(D) GNP of Ethiopia is the value of all goods services produced by all Ethiopian leaves
only in Ethiopia Ans
11. Suppose Ethiopian Nominal GDP is 110 trillion ETB and Real GDP is 100 trillion ETB. Based on the
evidences and definition Nominal GDP and Real GDP one of the following statements is false.
(A) GDP deflator is 1.1
(B) Real GDP is equal to Nominal GDP multiplied by GDP deflator Ans
(C) Real GDP is calculated by output produced multiplied by the selected base year
price
(D) Nominal GDP is calculated by output produced multiplied by the price during
production
12. One of the following is false about the change in aggregate demand.
(A) Consumer spending shift the aggregate demand curve to the right and improve
equilibrium level output, by keeping other factors constant.
(B) Positive Consumer expectations in the future shift the aggregate demand curve and
improve equilibrium level of output, by keeping other factors constant.
(C) Increase in interest rate shift the aggregate demand curve to the right and
improve equilibrium level of output, by keeping other factors constant. Ans
(D) Increase in net export shift the aggregate demand curve to the right and improve
equilibrium level of output, by keeping other factors constant.
13. One of the following is false about shift in short run aggregate supply curve.
(A) By keeping other factor constant, decrease in wages shift short run aggregate
supply curve to the right.
(B) By keeping other factor constant, decrease in the price of imported inputs shift
short run aggregate supply curve to the right.
(C) By keeping other factor constant, depreciation of domestic currency shift short
run aggregate supply curve to the right. Ans
(D) By keeping other factor constant, increase of labor supply shift short run
aggregate supply curve to the right.
14. One of the following is true about the relationship about sticky wage model, Where P= Price, W/P=
Real wage Price, Ld= Labor demand, Y= Output.
(A) ↑P → ↑W/P → ↑Ld →↑ Y
(B) ↑P → ↓W/P → ↑Ld →↑ Y Ans
(C) ↑P → ↓W/P → ↓Ld →↑ Y
(D) ↑P → ↑W/P →↓ Ld →↑ Y
15. Which one of the following do not shifts long run aggregate supply curve.
(A) Change arising from capital
(B) Change arising from natural resource
(C) Change arising from Domestic input prices Ans
(D) Change arising from technology
16. One of the following is false when short run macroeconomic equilibrium is not achieved.
(A) When price is above equilibrium more goods demanded than goods supplied. Ans
(B) When price is above equilibrium more goods supplied than goods demanded.
(C) When price is below equilibrium more goods demanded than goods supplied.
(D) None
17. Which one is true about IS curve?
(A) Shows the combination of interest rates and levels of output for which planned
spending equals income Ans
(B) Shows the combination of interest rates and levels of output for which money supply
equals money demand
(C) It is an upward-sloping curve.
(D) All
18. Which one of the following statements is false?
(A) An increase in government expenditure is represented by a rightward shift in the IS
curve.
(B) An Increasing tax is represented by a rightward shift in the IS curve. Ans
(C) Money supply does not depend on the interest rate
(D) None of the above
19. The way in which the central bank influences the quantity of money circulation by buying or selling
government securities is?
(A) Open market operation Ans
(B) Money printing
(C) Discount rate
(D) None of the above
20. Which is odd from the following statements?
(A) Expansionary fiscal policy will shift the IS curve to the origin Ans
(B) Increase in tax level shifts the IS curve to the right
(C) IS and LM curve together could determine the r* and Y*
(D) Monetary policy has an effect in determining national income
21. The marginal propensity to consume is:
(A) Increasing if the marginal propensity to save is increasing.
(B) Is the ratio of total consumption to income
(C) the amount by which consumption changes when disposable income increases by
one birr Ans
(D) The change in consumer spending minus the change in aggregate disposable
income.
22. Which theory of consumption holds that there is psychological and family member pressure on a
person or household living in a high-income community to spend more on consumption?
(A) Fisher’s Intertemporal Model of Consumption
(B) Modigliani Life Cycle Hypothesis
(C) Relative Income Hypothesis Ans
(D) Permanent Income Hypothesis
23. In a situation where an externality occurs, the "third party" refers to those who
(A) Buy the product from others.
(B) Produce the product for others.
(C) Trade the product with others outside the nation or community.
(D) Are not directly involved in the transaction or activity. Ans
24. The two main characteristics of a public good are
(A) Production at constant marginal cost and rising demand.
(B) Non-excludability and production at rising marginal cost.
(C) Non-rivalry and non-excludability. Ans
(D) Non-rivalry and large negative externalities.
25. Calculate the price elasticity of demand by using Arc method if in response to an increase in price
from 10 to 12 dollars, the quantity demanded decrease from 50 to 30 unites.
(A) -3
(B) -2.5 Ans
(C) 3.5
(D) -3
26. Find elasticity of substitution for the production function
(A) εs=1 Ans
(B) εs>1
(C) εs<1
(D) εs=∞
27. Which one of the following is not true about technological progress means
(A) The ability to produce more output using same number of inputs
(B) The ability to produce a given quantity of output using fewer inputs
(C) The ability to produce more output by using more inputs Ans
(D) None
28. A firm’s production function changes from
(A) Neutral technological progress Ans
(B) Labor depending technological progress
(C) Capital depending technological progress
(D) None
29. When an additional unit of output is produced, the extra cost to society is the
(A) Marginal private cost.
(B) Marginal external cost.
(C) Marginal damage.
(D) Marginal social cost Ans
30. Given the following equations, which one of the flowing is the optimal solution of the given problem if
it is solved by graphical method?
(A) (2,6) Ans
(B) (4, 3)
(C) (0, 9)
(D) (6, 0)
31. Based on the the following questions, what is the value of Z or objective function if the optimal
solution is substituted?
(A) 18
(B) 36 Ans
(C) 35
(D) None
32. If at least one artificial variable appears in the basis at a non-zero level (with +ve value in b-column)
and the optimality condition is satisfied, then?
(A) Infeasible solution and inconsistent constraints Ans
(B) Feasible solution and consistent constraints
(C) Degenerate solution and consistent and redundant constraints
(D) All
33. By referring to the problem given below What is the value of objective function (Z)?
(A) 20
(B) 30
(C) 40 Ans
(D) 10
34. By referring the following problems given below which one of the following represent the shadow price
of the problem in above table?
(A) (0,0) Ans
(B) (0,1)
(C) (1,1)
(D) None
35. By referring the following problems given below, what should be the value of c1 and c2 are
correspondingly in below table
(A) (-2,3) Ans
(B) (0,1)
(C) (10,20)
(D) None
36. By referring the following problems given below, what are the initial value of the first and the second
resource in above problem?
(A) (10,20)
(B) (10,30) Ans
(C) (30,10)
(D) None
37. Which of the following relationship between efficiency, optimality and sustainability are mismatched?
(A) Resource allocation cannot be optimal unless it is efficient
(B) Efficient resource use are optimal if it satisfy societal objectives
(C) Sustainable resource is occur if resource allocation efficient, socially optimal &
taking care of posterity
(D) All efficient resource allocation is socially optimal Ans
38. Which of the following is false about environmental economics, resource economics & ecological
economics?
(A) Environmental Economics→ focus on governing common-pool natural resources
problems Ans
(B) Natural Resources Economics→focus on governing common-pool natural resources
problems
(C) Environmental economics→ focus on use/management of natural environment
(D) Ecological economics→ focus on natures and human housekeeping
39. Which sustainability concepts is known as “Economists on sustainability”
(A) Utility/consumption and natural capital stock are non-declining overtime Ans
(B) Resources are managed so as to maintain a sustainable yield of resource services’
(C) Satisfies minimum conditions for ecosystem resilience through time
(D) Consensus building and institutional development
40. Ecologist and capitalist operate at the start point of marginal damage cost (MDC) and Marginal
Abatement cost (MAC) respectively because?
(A) Zero tolerance for damage due to pollution
(B) Zero tolerance for damage and cheaper to pollute Ans
(C) Cheaper to pollute and zero tolerance for damage
(D) Cheaper to pollute than pollution abatement
41. Among economic valuation technique that is most controversial of nonmarket valuation methods and
most used for estimating non-use value is?
(A) Contingency valuation methods
(B) Hedonic pricing methods Ans
(C) Travel cost methods
(D) Willingness to pay
42. Among environmental policy instruments that is most popular and appealing methods for reducing
environmental damages and centralized approach of pollution control?
(A) Transferable emission permits
(B) Emission standards Ans
(C) Effluent charge
(D) Subsidy
43. When emissions rate is low then environment can be assimilated this leads no link between present
emissions & future damage. What type of efficiency do you use in such situation?
(A) Fund pollutant efficiency
(B) Static efficiency Ans
(C) Stock pollutant efficiency
(D) Dynamic efficiency
44. Which among the alternatives cannot become the best possible strategy to achieve agricultural
production sustainably:
(A) A more equitable access to productive resources
(B) Increasing self-reliance of farmers and rural people
(C) Increasing self-reliance of farmers and rural people Ans
(D) A greater reliance on genetically modified crop and animal species
45. Assume that a person has working on job descriptions such as trader, teacher, and farmer to make a
living. Thus this person’s condition doing various job to make his living can be best described by:
(A) Specialization
(B) Entrepreneur
(C) Diversification Ans
(D) None
46. Which one is true about the system?
(A) A System is only observable matter
(B) Synergies is not important in system
(C) A System can be a mind image Ans
(D) From the whole we cannot get emergent property in a system thinking
47. Except one, all describe farming system research.
(A) Farmers had a right to be involved in the technology development process
(B) It evolved primarily as a result of a lack of success in developing relevant improved
technologies
(C) It is developed due to successful application of Green Revolution idea in poorer
agricultural areas Ans
(D) It believes that, farmers could help in identifying the appropriate path to agricultural
development.
48. Which one is true about strategic research?
(A) It try to adjust new technology to specific environments and circumstances
(B) It intended to solve indefinite problems
(C) It intended to solve specific problems Ans
(D) A and B
49. Which one is false about sustainable livelihood?
(A) It is a holistic approach
(B) It also tries to sketch out the independence between the different aspects of
poverty Ans
(C) It’s the way of thinking about objectives, scopes and priorities for development to
enhance poverty elimination
(D) It’s a way for understanding a famine and food insecurity
50. From the following, one is not the purpose of livelihood zone mapping.
(A) Used as a lens’ through which to view a number of problems in a given
area/community
(B) Used as information sources about a given area or community
(C) Used for interpreting problems/hazards with the livelihood context
(D) None Ans
51. Which of the following statement does not affect the magnitude of own-price elasticity of demand?
(A) The length of the time horizon over which we are looking at the change in consumer
behavior
(B) The availability (or lack thereof) of close substitutes for the good in question
(C) The amount by which quantity supplied will change as price changes Ans
(D) All of the above
52. If the demand function of banana is P = 100 – 2.5Q and the price of banana is Birr 20 per K.g, then
what is the price elasticity demand for banana?
(A) 0.25 Ans
(B) 1.6
(C) 0.625
(D) 0.64
53. Which of the following statement is the correct if the own-price elasticity of supply is equal to 0.5?
(A) A 1% increase in price will result in a 50% increase in quantity supplied
(B) A 1% increase in price will result in a 5% increase in quantity supplied.
(C) A 1% increase in price will result in a 2% increase in quantity supplied.
(D) A 1% increase in price will result in a 0.5% increase in quantity supplied. Ans
54. Which of the following statement is true about the relationship between the price elasticity of demand
and total revenue?
(A) If demand is price inelastic, then increasing price will decrease total revenue.
(B) If demand is price elastic, then decreasing price will increase total revenue. Ans
(C) If demand is perfectly inelastic, then total revenue is the same at any price.
(D) Elasticity is constant along a linear demand curve and so too is total revenue.
55. Suppose consumers demanded 100 units of Orange when its price is Birr 5 per unit. The firm knows
that the elasticity of demand of the item is -0.5. What is the expected quantity demanded of the item
when its price declines to 4?
(A) 90
(B) 12.5
(C) 110 Ans
(D) 112.5
56. When marginal product reaches its maximum, what can be said of total product?
(A) total product must be at its maximum
(B) total product starts to decline even if marginal product is positive
(C) total product is increasing if marginal product is still positive Ans
(D) total product levels off
57. The firm's short-run marginal-cost curve is increasing when:
(A) marginal product is increasing.
(B) total fixed cost is increasing.
(C) marginal product is decreasing. Ans
(D) average fixed cost is decreasing.
58. Which one of the following is not merit /benefit of using questionnaire method of data collection?
(A) It can be used only when all of the respondents are educated and cooperating Ans
(B) it is free from the bias of the interviewer; answers are in respondents’ own words
(C) respondents have adequate time to give well thought out answers
(D) respondents who are not easily approachable can also be reached conveniently
59. The methodology section of the research plan/proposal typically specifies
(A) The research participants
(B) The apparatus, instruments, and materials for the research study
(C) The planned research procedures
(D) All of the above Ans
60. In selection of a topic for study/ research problem:
(A) Subject which is overdone should be normally chosen
(B) Controversial subject should become the choice of an average researcher
(C) Too narrow or too vague problems should be avoided Ans
(D) Familiar and feasible subject area should not be selected for study
61. The section where you fully interpret and evaluate your results is known as ----------
(A) Introduction
(B) Methods
(C) Results
(D) Disscussions Ans
62. A variable which is not influenced by other variables in experiment is called -----------
(A) Experimental variable
(B) Dependent variable
(C) Independent variable
(D) Confound variable Ans
63. Which of the following statement is correct about sampling error?
(A) Sampling error decreases with decrease in sample size.
(B) It happens to be of a larger magnitude in case of homogeneous population.
(C) The measurement of sampling error is called the precision of the sampling plan. Ans
(D) If we decrease the sample size, the precision can be improved.
64. Which one of the following statement is incorrect?
(A) Non-parametric test is less sensitive and powerful than parametric tests
(B) Parametric tests needs larger samples in order to generate the same level of
significance Ans
(C) Non parametric tests can be used to compare the qualities of two or more groups or
samples
(D) Descriptive and inferential statistics are the two classes of parametric tests
65. Suppose Ethiopia produce Wheat more efficiently than Sorghum crop, due to this reason Ethiopia
export wheat to other nation and import sorghum from other nation. Which type of international trade
theory Ethiopian country following in this case?
(A) Absolute advantage theory
(B) Comparative Advantage theory Ans
(C) Theory of Laissez faire
(D) None
66. One is different from other trade protection in that it protect domestic producers from foreign
competition through directly supporting them?
(A) Tariff
(B) Quota’s
(C) Subsidy Ans
(D) All
67. Suppose Ethiopia and China agree to remove all tariff and non-tariff trade barriers between them and
they impose identical trade protection against USA, Which type of economic integrations which made
between Ethiopia and China?
(A) Economic Union
(B) Monetary Union
(C) Customs Union Ans
(D) A and B
68. Based on the following information given below answer question. Suppose that, before trade produce
at market equilibrium E, as determined by the intersection of its domestic demand and supply schedule.
Then the economy opened to the foreign trade and world prices $8000 less than the domestic price. Line
Sd+ w shows the supply of X available to the small nation consumers from the domestic and foreign
source combined. Under free trade the domestic X industry is being damaged by foreign competition.
Assume the small national Government imposes a specific tariff of $1000 on X imports. The introduction of
the tariffs raises the home prices of imports by the full amounts of the duty and the increase falls entirely
on the domestic consumers. As a result the overall supply curve shift upward by the amount of tariff from
Sd+w to Sd+w+t. The protective tariff results in a new equilibrium quantity at point G. Identify the
incorrect statement

(A) Before the tariff domestic consumers buy from domestic firms only 20X at $8000
(B) With the tariff, the prices of X rises to $9500 in the domestic market and domestic
producers supply 20 units of X Ans
(C) Under free trade the shortage of X goods 60 units fulfilled by imports
(D) None
69. Based on the following information given below answer questions. Suppose that, before trade produce
at market equilibrium E, as determined by the intersection of its domestic demand and supply schedule.
Then the economy opened to the foreign trade and world prices $8000 less than the domestic price. Line
Sd+ w shows the supply of X available to the small nation consumers from the domestic and foreign
source combined. Under free trade the domestic X industry is being damaged by foreign competition.
Assume the small national Government imposes a specific tariff of $1000 on X imports. The introduction of
the tariffs raises the home prices of imports by the full amounts of the duty and the increase falls entirely
on the domestic consumers. As a result the overall supply curve shift upward by the amount of tariff from
Sd+w to Sd+w+t. The protective tariff results in a new equilibrium quantity at point G. As a result the
government imposes the tariff on imported goods X
(A) Domestic X prices is $9000
(B) Domestic production increases by 20 units
(C) Domestic consumption falls by 40 units Ans
(D) None
70. Based on the following information given below answer questions. Suppose that, before trade produce
at market equilibrium E, as determined by the intersection of its domestic demand and supply schedule.
Then the economy opened to the foreign trade and world prices $8000 less than the domestic price. Line
Sd+ w shows the supply of X available to the small nation consumers from the domestic and foreign
source combined. Under free trade the domestic X industry is being damaged by foreign competition.
Assume the small national Government imposes a specific tariff of $1000 on X imports. The introduction of
the tariffs raises the home prices of imports by the full amounts of the duty and the increase falls entirely
on the domestic consumers. As a result the overall supply curve shift upward by the amount of tariff from
Sd+w to Sd+w+t. The protective tariff results in a new equilibrium quantity at point G. One of the
following is not correct about the effects of imposition of tariff to protect domestic producers from foreign
competition?
(A) Consumer surplus that is transferred to the domestic producers of the import
competing industry is areas of “a”
(B) Areas of “b and d” represent deadweight loss
(C) The Government revenue gained due to imposition of tariff is $20,000
(D) None Ans
71. Based on the following information given below answer questions. Suppose that, before trade produce
at market equilibrium E, as determined by the intersection of its domestic demand and supply schedule.
Then the economy opened to the foreign trade and world prices $8000 less than the domestic price. Line
Sd+ w shows the supply of X available to the small nation consumers from the domestic and foreign
source combined. Under free trade the domestic X industry is being damaged by foreign competition.
Assume the small national Government imposes a specific tariff of $1000 on X imports. The introduction of
the tariffs raises the home prices of imports by the full amounts of the duty and the increase falls entirely
on the domestic consumers. As a result the overall supply curve shift upward by the amount of tariff from
Sd+w to Sd+w+t. The protective tariff results in a new equilibrium quantity at point G. One of the
following is not correct regarding the effect of tariff on national welfare?
(A) Before the tariff was levied, consumer surplus equal to areas of a+b+c+d+e+f+g.
(B) With the tariff consumer surplus equals areas of a+b+c only Ans
(C) the tariff provides the government with additional tax revenue which is equal to
$20,000
(D) None
72. From the following one is not true about Simple farm planning.
(A) It is procedure adopted either for a part of the land or for one enterprise
(B) It is very simple and easy to implement.
(C) Major changes are contemplated in the existing organization of farm business. Ans
(D) The process of change should always begin with these simple plans.
73. What to produce? Is _______________problem.
(A) Factor-factor
(B) Product-product Ans
(C) Factor-product
(D) All
74. The function of successful farm manager is:
(A) Formation of the goals
(B) Decision making and taking action
(C) Recognition and definition of a problem
(D) All of the above Ans
75. Which one of the following is/are true about advantage of farm budgeting.
(A) Budgeting assists the farm manager to select factors of production more wisely.
(B) Budgeting is money saving activity
(C) Budgeting provides an excellent learning device on how to organize and reorganize
farms.
(D) All Ans
76. Which one of the following is not true about Fixed or durable resource?
(A) Resources whose use remains the same regardless of the level of production
(B) Resources which exist only in the short run and in the long run they are zero
(C) Resources which exist both in the short run and in the long run. Ans
(D) None
77. From the following one is not true about enterprise budget with partial budget and enterprise budget
with a whole-farm budget.
(A) Only one in an enterprise budget; in a whole-farm budget, all enterprises in the farm
are included.
(B) A single unit for an enterprise budget, the entire farm for a whole farm budget
(C) An enterprise budget uses variable input costs and fixed input costs, while only
variable input costs are used in a partial budget.
(D) Both an enterprise budget and partial budget uses variable input costs and fixed
input costs. Ans
78. _____ implies planning of activities in a manner that achieves some optimal result with restricted
resources.
(A) Budgeting
(B) Planning
(C) Programming Ans
(D) Linear
79. One of the following relationships is incorrect in National income accounting.
(A) Net domestic product = Gross Domestic product – depreciation
(B) Net national product = Gross national product – depreciation
(C) Disposable income = Income + Transfer payment – Taxes
(D) National income = Net Domestic product + Indirect taxes Ans
80. The substitution effect indicates that a profit-seeking firm will use:
(A) More of all inputs if production costs fall.
(B) More of all inputs if production costs fall. More of an input whose price has fallen and
less of other inputs in producing a given output. Ans
(C) More of those input whose marginal productivity is the greatest.
(D) Less of an input whose price has fallen and more of other inputs in producing a
given output.