UGC NET Paper 2 Mock Test - 1 (Management) - UGC NET MCQ

An inferior good is an economic term that describes a good whose demand drops when people's incomes rise. This occurs when a good has more costly substitutes that see an increase in demand as incomes and the economy improve.
In economics, the demand for inferior goods decreases as income increases or the economy improves. When this happens, consumers are more willing to spend on costly substitutes. Some of the reasons behind this shift may include quality or a change to a consumer's socio-economic status.

A complementary good is a good whose use is related to the use of an associated or paired good. Two goods (A and B) are complementary if using more of good A requires the use of more of good B. For example, the demand for one good (printers) generates demand for the other (ink cartridges). If the price of printer increases, then there will be decrease in demand of printer and hence there will be a backward shift in demand for the ink cartridges.

The consumer surplus is the difference between the highest price a consumer is willing to pay and the actual market price of the good or service. Consumer surplus is an economic measurement of consumer benefits.

The four systems of Management in terms of Leadership styles are related to Rensis Likert. The four management systems as identified by Likert were: Exploitative Authoritative, Benevolent Authoritative, Consultative and Participative.

Henry Fayol has been regarded by many as the father of the modern operational management theory, and his ideas have become a fundamental part of modern management concepts. Fayol is often compared to Frederick Winslow Taylor who developed Scientific Management.

F.W. Taylor has done the following studies for improving the production process:

• Time Study: Time study is the technique of observing and recording the time required by a workman of reasonable skills and ability to perform each element of the tasks in a job.
• Motion Study: Motion study is a technique which involves close observations of the movement of body and limbs of an individual required to perform a job.
• Fatigue Study: Fatigue study helps in maintaining the operational efficiency of the workers.

The control cycle is the iterative process of planning, monitoring outcomes, assessing results, and making revisions. Control cycle is based on following steps:
Adjustment → Action → Feedback → Evaluation

Porter and Lawler model is related to motivation. The Porter and Lawler theory of motivation is based on the assumption that rewards cause satisfaction and that sometimes performance produces reward.

According to Dale Yoder, ''Selection is the process in which candidates for employment are divided into two classes - those who are to be offered employment and those who are not''. Selection means a process by which qualified personnel may be chosen from applicants offering their services to the organisation for employment.

The Hind Mazdoor Sabha is a national trade union centre in India.The HMS was established in Howrah, West Bengal on 29th December, 1948, by socialists, Forward Bloc followers and independent unionists.

Publicity is the public visibility or awareness for any product, service or company. It may also refer to the movement of information from its source to the general public, often but not always via the media. It is not a paid form of mass communication that involves getting favourable response of buyers by placing commercially significant news in mass media. Publicity comes from reporters, columnists, and journalists.

The internal sources of recruitment mean hiring people from within the organisation. The transfer, promotion, and employee referrals are the common forms of the internal sources of recruitment.

Benefits provided for temporary and permanent disability disfigurement, medical expenses and medical rehabilitation are referred to as workers' compensation. It is a state-mandated insurance programme that provides benefits to employees who suffer job-related injuries and illnesses.

A whistle-blower is a person who exposes secretive information or activity that is deemed illegal, unethical, or not correct within a private or public organisation. The Whistle-blower Protection Act, 2014 states that whistle-blowers are to be protected since they intend to bring out truth.

Gross national product (GNP) is a broad measure of a nation's total economic activity. GNP is the value of all finished goods and services produced in a country in one year by its nationals. To calculate GNP following methods are used:
(a) Income method
(b) Value Added method
(c) Expenditure method

The Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flow from a particular project equal to zero.

The cost of equity is the return a company requires to decide if an investment meets capital return requirements.
The cost of equity can be measured as
Re = 
Where, Re = cost of equity
D₁ = yearly dividend per share
P₀ = share price
g = growth rate

Issuing stock is a type of equity financing, meaning that management gives up ownership by allowing others to invest money and buy part of the company. Public issue through prospectus is the most popular method of issuing stocks of a company.
Under this method, the company issues a prospectus to the public inviting offers for subscription. The investors who are interested, apply for the securities they are willing to buy.

Options involve the least risk for the holder. Options give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date. Call options and put options form the basis for a wide range of option strategies designed for hedging, income, or speculation.

The price-to-earnings ratio, often called the P/E ratio, is the ratio of market price per share to annual earnings per share for a company's stock. It measures the payback period for your investment in years. The factors affecting P/E multiple are dividend pay-out ratio, required return and expected growth rate.
Price Earnings Ratio Formula
P/E = (Stock Price Per Share)/(Earnings Per Share)
Or
P/E = (Market Capitalization)/(Total Net Earnings)
Or
Justified P/E = (Dividend Payout Ratio)/(R - G)
where;
R = Required Rate of Return
G = Sustainable Growth Rate

The Bharatiya Mazdoor Sangh (BMS) is one of the trade union organisations in India.
Indian National Trade Union Congress (INTUC) is the trade union wing of the Indian National Congress.
The All India Trade Union Congress (AITUC) is the oldest trade union federations in India.
The Federation of Indian Chambers of Commerce and Industry is an association of business organisations in India. It was established in 1927.
Hence, FICCI is odd one out as all others are trade unions.

Objectives provide direction, serve as standards for evaluating performance and motivate members of the organisation. Objectives are short-term and medium-term goals that an organisation seeks to accomplish. An organisation's objectives play a large part in developing organisational policies and determining the allocation of organisational resources.

According to Michael Porter, a strategy that aims at producing products and services considered unique industry wide and directed at consumers who are relatively price-insensitive is known as Differentiation.
Product differentiation goes hand-in-hand with developing a strong value proposition to make a product or service attractive to a target market or audience. If successful, product differentiation can create a competitive advantage for the product's seller and ultimately build brand awareness. Examples of differentiated products might include the fastest high-speed internet service or the most gas-efficient electric vehicle in the market today.

The Capital Asset Pricing Model (CAPM) is a finance theory that establishes a linear relationship between the required return on an investment and risk.
The model is based on the relationship between an asset's beta, the risk-free rate (typically the Treasury bill rate) and the equity risk premium, or the expected return on the market minus the risk-free rate.

A macro-environment is the condition that exists in the economy as a whole, rather than in a particular sector or region. The factors that make up the macro-environment are economic factors, demographic forces, technological factors, natural and physical forces, political and legal forces, and social and cultural forces.

American Marketing Association (AMA) defines advertising as "any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor".
The AMA is the only organisation that provides direct benefits to marketing professionals in both business and education and assists in personal and professional career development among marketing professionals, and to advance the science and ethical practice of marketing disciplines.

Selection of specific media, where the advertisements will be run and when they will be run, to reach the target market is called Media Planning. It is the process of identifying and selecting media outlets – mainly newspapers, magazines, websites, TV and radio stations, and outdoor placement.

A marketing database is built as an aid to market research. It is the process of gathering, analysing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service.

At the test marketing stage of new product development process, the product and marketing programmes are tested in realistic market settings. Test marketing is an experiment conducted in a field laboratory (the test market) comprising of actual stores and real-life buying situations, without the buyers knowing they are participating in an evaluation exercise. It simulates the eventual market-mix to ascertain consumer reaction.

Market segmentation is the process of dividing prospective consumers into different groups depending on factors like demographics, behaviour and various characteristics. Market segmentation helps companies better understand and market to specific groups of consumers that have similar interests, needs and habits. Before a company decides to target a particular market segment, some important factors like market size, growth rate, structural attractiveness are to be examined against organisation's objectives and resources.