SECTION A (Macro Economics)
1 The value of Marginal Propensity to Save is found to be unitary. Investment multiplier could be: (Choose correct alternative)
Zero B. Infinity C. 10 D. 1
2 Central Bank has fixed Legal Reserve Ratio as 10% of the deposits collected by the commercial banks. The deposit multiplier could be -------------- times. (Choose correct alternative)
A. 4 B. 5 C. 6 D. 10
3 …………………………………… could lead to an increase in the demand for foreign exchange in the economy. (choose the correct alternative)
A. Foreign Direct Investment.
B. Deficit in Balance of Trade
C. Surplus in Balance of Trade
D. Transfer payments from abroad.
4 How is ‘Repo Rate’ different from ‘Bank Rate’?
5 Giving reason state whether the following statement is true or false.‘Fund collected by the government through provident fund deposits is stated as revenue receipt in government budget’.
6 From the set of statements given in Column I and Column II, choose the correct pair of statement.
Column I Column II
a. Deficient demand (i) Accumulation of inventory in the economy
b. Import of goods from abroad (ii) Increases aggregate demand in the economy
c. Changes in stock (iii) Opening stock minus closing stock
d. Average propensity to save (iv) Can never be negative.
7 What does fiat money mean?
8 Name any one measure to correct fiscal deficit in government budget.
OR
How is primary deficit calculated in government budget?
9 From the following identify the item that could lead to domestic currency depreciation.
A. Foreign Direct Investment flow into the country.
B. Surplus in balance of payment account
C. Large flow of investment by domestic firms to abroad
D. Flow of current transfers from abroad
10 Identify the final good from the following.
A. Electricity used by a trader of garments in his shop
B. Petrol purchased by a house hold for using in their car.
C. Readymade garments purchased by a trader for sale.
D. Bread purchased by a restaurant.
11 Why do we include export and exclude import in domestic expenditure
OR
Define GDP deflator. How is Real GDP calculated from nominal GDP? Explain the purpose of calculating constant price GDP.
12 How does Central Bank of a country use ‘Bank Rate Policy’ to control credit creation and money supply in an economy?
13 By providing services like free primary education, free health facilities, maintenance of law and order etc, which of the two objectives that government expects to perform through its budget? Explain.
14 An increase of Rs.100 crore in investment in an economy resulted in a total increase income of Rs400/- crores. Calculate the following.
a. Marginal propensity to consume
b. Change in savings
c. Change in consumption expenditure
d. Value of multiplier.
15 Are the concepts of demand for domestic goods and domestic demand for goods same? Explain
OR
What are the components of current account of balance of payment account? Also distinguish
between current account and capital account of balance of payment account.
16 Define investment multiplier. How is it related to Marginal Propensity to consume? Explain the process of multiplier.
OR
‘An economy is functioning at equilibrium’. What do you mean by this statement? If the economy is not at equilibrium, what adjustment mechanism will take place to bring back the economy at equilibrium? Explain using diagram.
17 Calculate national income by income and expenditure method (figures in rupees crores)
1. Compensation of employees 1330
2. Government final consumption expenditure 380
3. Indirect taxes 400
4. Gross domestic fixed capital formation 630
5. Mixed income of self employed 1600
6. Rent, interest and profits 500
7. Net addition to stock 100
8. Export of goods and services 170
9. Import of goods and services 180
10. Private final consumption 2900
11. Net factor income from abroad 100
12. Subsidies 30
13. Consumption of fixed capital 200
SECTION B ( Indian Economic Development)
18 ------------------------------------ can be considered as the architect of Indian Five Year Plans.
A. P.C. Mahalanobis
B. Dada Bhai Naoroji
C. V. K. R. V Rao
D. Dr. Manmohan Singh
19 Golden Revolution indicates:
A. Increase in the production of Organic farming products
B. Increase in the production of livestock
C. Increase in the production of wheat and rice
D. Increase in the production of horticultural crops
20 The concept explaining the three phases of falling death and birth rate associated with economic development is known as -----------------------------------.
A. Infant Mortality Rate
B. Life expectancy at birth
C. Demographic Transition
D. Overall Mortality Rate
21 Identify the stabilisation measure from the following.
A. Policy to correct balance of payment deficit
B. Policy of Liberalization
C. Policy of globalization
D. Policy to privatization
22 People whose income always lie below poverty line and sometimes may get a little more money are grouped under the category of --------------------- poor.
OR
People whose income regularly moves in and out of the poverty line and occasionally poor are categorized as ------------------poor.
23 The campaign initiated by china, which was aimed at industrializing the country on a massive scale was known as: ---------------------------.(Choose the correct alternative)
A. The Great Proletarian Cultural Revolution.
B. The Great Leap Forward
C. The policy of Special Economic Zones
D. The Commune system
24 A system whereby all the farmers can pool their milk produced according to different grading and the same is processed and marketed to urban centers through cooperatives is referred as -----------------------------------.
25 Which one of the following statement is true in the case of India when we compare China and Pakistan?
A. High degree of urbanization
B. Very high fertility rate
C. Growth due to manufacturing sector
D. High density of population
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