Economics · Sample Paper 3

General instructions

Section A · Introductory Macroeconomics

1. Question 11 mark

   J.M. Keynes's 'General Theory' was published in

   1. A.1776
   2. B.1936
   3. C.1950
   4. D.1991
2. Question 21 mark

   The value added method of measuring national income is also called the

   1. A.income method
   2. B.product method
   3. C.expenditure method
   4. D.consumption method
3. Question 31 mark

   Which of these is NOT included in domestic factor income?

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

   The ratio of deposits that banks must keep with the RBI is the

   1. A.SLR
   2. B.CRR
   3. C.repo rate
   4. D.bank rate
5. Question 51 mark

   Which is a qualitative tool of credit control?

   1. A.CRR
   2. B.open market operations
   3. C.margin requirements
   4. D.bank rate
6. Question 61 mark

   High-powered money (monetary base) consists of

   1. A.currency held by public and reserves of banks
   2. B.demand deposits only
   3. C.time deposits
   4. D.gold reserves only
7. Question 71 mark

   If APC is 0.8, APS is

   1. A.0.8
   2. B.0.2
   3. C.1.8
   4. D.1
8. Question 81 mark

   Deflationary gap exists when aggregate demand is

   1. A.more than full-employment output
   2. B.less than full-employment output
   3. C.equal to it
   4. D.zero
9. Question 91 mark

   Which of these is a direct tax?

   1. A.GST
   2. B.income tax
   3. C.customs duty
   4. D.excise duty
10. Question 101 mark

    Exports of services are recorded in the

    1. A.capital account
    2. B.current account
    3. C.reserve account
    4. D.errors account
11. Question 113 marks

    Distinguish between nominal GDP and real GDP. Which is a better measure of economic welfare?

12. Question 123 marks

    Explain the role of the RBI as the controller of credit (any three tools).

13. Question 134 marks

    Calculate GDP at market price by the expenditure method: private final consumption expenditure ₹1 200 crore; government final consumption expenditure ₹300 crore; gross domestic capital formation ₹400 crore; exports ₹150 crore; imports ₹200 crore.

14. Question 144 marks

    In an economy, the investment multiplier is 5 and investment increases by ₹200 crore. Find (i) MPC (ii) the increase in income (iii) the increase in consumption.

15. Question 154 marks

    Distinguish between a fixed exchange rate and a flexible exchange rate system. Give one merit of each.

16. OR

    Question 154 marks

    What is meant by depreciation and appreciation of a currency? How does depreciation of the rupee affect exports?

17. Question 166 marks

    Explain any three objectives of the government budget. Distinguish between revenue deficit and fiscal deficit, giving the implication of each.

18. Question 176 marks

    Explain the determination of equilibrium level of income using the aggregate demand and aggregate supply approach, with a diagram.

19. OR

    Question 176 marks

    What is money supply? Explain the measures M1 and M3 and the factors that affect money supply.

Section B · Indian Economic Development

1. Question 181 mark

   Under British rule, India's economy was mainly a supplier of

   1. A.finished goods
   2. B.raw materials
   3. C.machinery
   4. D.services
2. Question 191 mark

   The zamindari system was introduced under the

   1. A.Ryotwari settlement
   2. B.Permanent Settlement
   3. C.Mahalwari system
   4. D.Five-Year Plans
3. Question 201 mark

   HYV seeds were introduced in India as part of the

   1. A.White Revolution
   2. B.Green Revolution
   3. C.Blue Revolution
   4. D.Industrial Policy
4. Question 211 mark

   The licensing policy restricted

   1. A.foreign trade only
   2. B.the setting up and expansion of industries
   3. C.agriculture
   4. D.education
5. Question 221 mark

   Disinvestment means

   1. A.selling part of the equity of public sector enterprises
   2. B.buying private firms
   3. C.increasing taxes
   4. D.closing banks
6. Question 231 mark

   Which body regulates higher education in India?

   1. A.NCERT
   2. B.UGC
   3. C.RBI
   4. D.NABARD
7. Question 241 mark

   Regional Rural Banks were set up in

   1. A.1969
   2. B.1975
   3. C.1991
   4. D.2000
8. Question 251 mark

   Workers who work for others on a daily wage basis without job security are

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

   The carrying capacity of the environment is exceeded when

   1. A.resource extraction is below regeneration
   2. B.resource extraction exceeds regeneration
   3. C.pollution is zero
   4. D.population falls
10. Question 271 mark

    The 'One Child Policy' was introduced in

    1. A.India
    2. B.Pakistan
    3. C.China
    4. D.Japan
11. Question 283 marks

    State three achievements of the Indian economy during 1950–1990.

12. Question 293 marks

    Why is investment in human capital important? Give three reasons.

13. Question 304 marks

    Explain the reforms in the financial sector under the 1991 New Economic Policy.

14. Question 314 marks

    What is rural credit? Explain the role of NABARD and SHGs in rural credit.

15. Question 324 marks

    Distinguish between formal and informal sector employment. Why is the informal sector growing in India?

16. OR

    Question 324 marks

    Explain four strategies for sustainable development in India.

17. Question 336 marks

    Explain the state of India's foreign trade and infrastructure on the eve of independence.

18. OR

    Question 336 marks

    Compare India, China and Pakistan on any three human development indicators and explain the reasons for China's faster growth.

19. Question 346 marks

    Discuss the state of education in India and the government's efforts to improve it.