Does importing a package imports the subpackages as well? e.g. Does importing com.MyTest.* also import com.MyTest.UnitTests.*?

No you will have to import the subpackages explicitly. Importing com.MyTest.* will import classes in the package MyTest only. It will not import any class in any of it's subpackage.

What is the difference between declaring a variable and defining a variable?

In declaration we just mention the type of the variable and it's name. We do not initialize it. But defining means declaration + initialization. e.g String s; is just a declaration while String s = new String ("abcd"); Or String s = "abcd"; are both definitions.

Can a level class be private or protected?
No. A level class can not be private or protected. It can have either "public" or no modifier. If it does not have a modifier it is supposed to have a default access. If a level class is declared as private the compiler will complain that the "modifier private is not allowed here". This means that a level class can not be private. Same is the case with protected.

What type of parameter passing does Java support?
In Java the arguments are always passed by value .

Primitive data types are passed by reference or pass by value?
Primitive data types are passed by value.

Objects are passed by value or by reference?
Java only supports pass by value. With objects, the object reference itself is passed by value and so both the original reference and parameter copy both refer to the same object .