Economics · Sample Paper 2

General instructions

Section A · Introductory Macroeconomics

1. Question 11 mark

   Which of these is a macroeconomic variable?

   1. A.price of rice
   2. B.a firm's output
   3. C.aggregate demand
   4. D.a household's income
2. Question 21 mark

   Net investment equals gross investment minus

   1. A.indirect taxes
   2. B.depreciation
   3. C.subsidies
   4. D.net factor income from abroad
3. Question 31 mark

   Which of these is a transfer payment?

   1. A.wages
   2. B.old-age pension
   3. C.rent
   4. D.profit
4. Question 41 mark

   The function of money that solves the problem of double coincidence of wants is

   1. A.store of value
   2. B.medium of exchange
   3. C.unit of account
   4. D.standard of deferred payment
5. Question 51 mark

   The rate at which the RBI lends short-term funds to commercial banks against government securities is the

   1. A.reverse repo rate
   2. B.repo rate
   3. C.bank rate
   4. D.CRR
6. Question 61 mark

   The central bank of India is the

   1. A.SBI
   2. B.RBI
   3. C.NABARD
   4. D.SEBI
7. Question 71 mark

   If MPS is 0.2, the value of the investment multiplier is

   1. A.2
   2. B.4
   3. C.5
   4. D.8
8. Question 81 mark

   At the break-even point of the consumption function,

   1. A.saving is positive
   2. B.saving is zero
   3. C.consumption is zero
   4. D.APC < 1
9. Question 91 mark

   Which of these is a capital receipt?

   1. A.tax revenue
   2. B.borrowings
   3. C.interest received
   4. D.dividend received
10. Question 101 mark

    Foreign exchange demand rises when

    1. A.exports rise
    2. B.imports rise
    3. C.tourists come to India
    4. D.FDI comes in
11. Question 113 marks

    Explain the circular flow of income in a two-sector economy.

12. Question 123 marks

    Distinguish between revenue expenditure and capital expenditure with one example each.

13. Question 134 marks

    Calculate (i) net domestic product at factor cost and (ii) national income from: compensation of employees ₹800 crore; rent ₹200 crore; interest ₹150 crore; profit ₹400 crore; mixed income of self-employed ₹300 crore; net factor income from abroad ₹(−)20 crore.

14. Question 144 marks

    In an economy, $C=50+0.75Y$ and autonomous investment is ₹150 crore. Find (i) the equilibrium level of income (ii) consumption at equilibrium (iii) saving at equilibrium.

15. Question 154 marks

    Explain how the equilibrium exchange rate is determined in a flexible exchange rate system.

16. OR

    Question 154 marks

    What is meant by a deficit in the balance of payments? Distinguish between autonomous and accommodating transactions.

17. Question 166 marks

    From the following budget data (₹ crore), calculate (i) revenue deficit (ii) fiscal deficit (iii) primary deficit. Revenue receipts 900; non-debt capital receipts 100; borrowings 300; revenue expenditure 1 100; capital expenditure 200; interest payments 150. What does a high fiscal deficit indicate?

18. Question 176 marks

    What is excess demand? Explain its effects and two monetary measures to correct it.

19. OR

    Question 176 marks

    Explain the functions of money. How does money overcome the difficulties of the barter system?

Section B · Indian Economic Development

1. Question 181 mark

   The drain of India's wealth during colonial rule refers to

   1. A.export of agricultural goods only
   2. B.transfer of wealth to Britain without return
   3. C.migration of workers
   4. D.losses in war
2. Question 191 mark

   Which industry was set up by Tata in 1907?

   1. A.cotton mill
   2. B.Tata Iron and Steel Company (TISCO)
   3. C.jute mill
   4. D.shipbuilding
3. Question 201 mark

   The model of India's Second Five-Year Plan was based on the ideas of

   1. A.Jawaharlal Nehru
   2. B.P.C. Mahalanobis
   3. C.M. Visvesvaraya
   4. D.Amartya Sen
4. Question 211 mark

   Land ceiling means

   1. A.minimum land a farmer must own
   2. B.maximum land an individual can own
   3. C.tax on land
   4. D.consolidation of holdings
5. Question 221 mark

   Which of these is an element of globalisation?

   1. A.raising tariffs
   2. B.outsourcing
   3. C.nationalisation
   4. D.licensing
6. Question 231 mark

   Which of these contributes to human capital formation?

   1. A.on-the-job training
   2. B.buying land
   3. C.building factories
   4. D.importing machinery
7. Question 241 mark

   Self-help groups mainly help in providing

   1. A.large industrial loans
   2. B.micro-credit to the poor
   3. C.foreign exchange
   4. D.insurance
8. Question 251 mark

   Workers who own and operate an enterprise to earn a livelihood are

   1. A.casual workers
   2. B.self-employed
   3. C.regular salaried employees
   4. D.hired workers
9. Question 261 mark

   Which of these is a non-renewable resource?

   1. A.solar energy
   2. B.coal
   3. C.wind energy
   4. D.forests
10. Question 271 mark

    Pakistan started economic reforms in

    1. A.1978
    2. B.1988
    3. C.1991
    4. D.2001
11. Question 283 marks

    What was the import substitution policy? Why was it adopted?

12. Question 293 marks

    State three problems of human capital formation in India.

13. Question 304 marks

    Explain four reforms introduced in the industrial sector under the New Economic Policy of 1991.

14. Question 314 marks

    What is agricultural diversification? Why is it needed?

15. Question 324 marks

    Explain four ways in which the environment's functions are threatened in India.

16. OR

    Question 324 marks

    What is jobless growth? Give two reasons for it in India.

17. Question 336 marks

    Compare the development strategies of India and China. What lessons can India learn from China?

18. OR

    Question 336 marks

    Explain the role of cooperative marketing and agricultural marketing reforms in improving farmers' incomes.

19. Question 346 marks

    Explain the trends in the distribution of the workforce across sectors in India and the increasing 'informalisation' of the workforce.