Practice paper

Set 3

Economics

Time: 3 Hours Max. Marks: 80

General Instructions:

1. This question paper contains two sections:

Section A - Macro Economics

Section B - Indian Economic Development

2. This paper contains 20 Multiple Choice Questions (Q. No. 1 to 10 and Q. No. 18 to 20) type

questions are of 1 mark each.

3. This paper contains 4 Short Answer Questions (Q. No. 11, 12 and Q. No. 28, 29) type questions are

of 3 marks each to be answered in 60 to 80 words.

4. This paper contains 6 Short Answer Questions (Q. No. 13 to 15 and Q. No. 30 to 32) type
questions

are of 4 marks each to be answered in 80 to 100 words.

5. This paper contains 4 Long Answer Questions (Q. No. 16, 17 and Q. No. 33, 34) type questions are

of 6 marks each to be answered in 100 to 150 words.

SECTION A - MACRO ECONOMICS

1. Read the following statements carefully. Choose the correct alternative among those given below.

Statement I : GDP at factor cost is Gross Domestic Product at market prices and subsidy less indirect

taxes.

Statement II : All producer goods are final goods.

(a) Both the statements I and II are true.

(b) Both the statements I and II are false.

(c) Statement I is false but statement II is true.

(d) Statement I is true but statement II is false.

2. _________measures the slope of consumption function.

(a) APC

(b) MPC

(c) APS

(d) MPS3. In the following question, a statement of Assertion (A) is followed by a statement of
Reason (R).
Choose the correct alternative among those given below.

Assertion (A) : Ex-post investment includes both planned as well as unplanned investment.

Reason (R) : Autonomous investment is independent of the level of income.

(a) Both (𝐴) and (𝑅) are true and (𝑅) is the correct explanation of (𝐴).

(b) Both⁡(𝐴) and (𝑅) are true but (𝑅) is not the correct explanation of (𝐴).

(c) (A) is true but (𝑅) is false.

(d) (A) is false but ( 𝑅 ) is true.

4. Tax, the impact of which lies on the person on whom it is legally imposed is known as

(a) indirect tax

(b) direct tax

(c) value added tax

(d) service tax.

5. If the total deposits created by commercial banks is ₹10,000 and Legal Reserve Ratio is 20%. What

are the values of money multiplier and initial deposits respectively?

(a) 5 and ₹1,000

(b) 4 and ₹2,000

(c) 5 and ₹2,000

(d) 6 and ₹ 3,000

6. Repo rate is the rate at which

(a) commercial banks purchase government securities from the Central Bank.

(b) commercial banks can take loans from the Central Bank.

(c) commercial banks can keep their deposits with the Central Bank.

(d) short-term loans are given by commercial banks.

7. Two statements are given below. Read the statements carefully and choose the correct alternative

among those given below.

Statement I : Central bank is a bank of all the banks as well as a bank of the government.

Statement II : All financial institutions are banking institutions.

(a) Both the statements I and II are true.

(b) Both the statements I and II are false.

(c) Statement I is true but statement II is false.

(d) Statement II is true but statement I is false.

8. Find the missing figures and choose the correct alternative.

9. Which of the following is not concerned with banking organisation?

(a) Bank rate (b) Credit creation

(c) Fiscal deficit (d) Cash Reserve Ratio

10.Read the following chart and identify (i) and (ii).

11.Assuming real income to be ₹200 crore and price index to be 135, calculate nominal income.
12.State whether the following statements are true or false by giving appropriate reasons.

(i) When MPC is zero, the value of investment multiplier will also be zero.

(ii) Value of MPS can never be negative.

(iii) The value of APS can never be greater than 1.

OR

"Indian investors lend abroad". Answer the following questions with respect to the statement.

(a) In which sub-account and on which side of the Balance of Payments account, such lending is

recorded? Give reasons.

(b) Explain the impact of this lending on market exchange rate.

13.Explain the role of margin requirements for correcting the deflationary gap.

14.How can 'Jan-Dhan Yojana' be used as an instrument to increase supply of money by the
commercial

banks?

15."Less developed countries often devalue their currency". Identify the likely cause behind such
type of

action.

OR

Justify the statement 'increase in interest rate in the domestic economy leads to an appreciation of

domestic currency'.

16.Calculate (a) 𝑁𝑁𝑁𝑃FC by expenditure method and (b) NNP ⁡FC by value added method
(b) Differentiate between revenue receipts and capital receipts.

OR

(a) What are the implications of a large revenue deficit? Give two measures to reduce it.

(b) "Govt. has issued B.P.L. (Below Poverty Line) cards to the poor people in India, so that they can

avail not only subsidised medical facilities at big hospitals, butensure a minimum food from ration

shops". Which objective of budget is fulfilled here? Explain its need through the budget.

SECTION B - INDIAN ECONOMIC DEVELOPMENT

18.In which year, railways was introduced in India?

(a) 1850

(b) 1860

(c) 1890

(d) 1892

19.Identify the correctly matched pair in Column A and Column B from the following :
(a) I- (A)

(b) 1I− (B)

(c) III - (C)

(d) IV - (D)

20.Fiscal reforms comprise

(a) Reforms in tax structure

(b) Reforms in Public expenditure and Public debt

(c) Reforms in Interest rates

(d) Both (a) and (b).

21.Identify the most important outcomes of globalisation in the given picture

(a) Communication channel (b) Privatisation (c) Investment (d) Outsourcing

22. Which of the following are the indicators of educational achievements in a country?

(i) Youth literacy rate.

(ii) Expenditure on education.

(iii) Primary education completion rate.

(iv) Adult literacy level.

(a) (i), (ii) and (iii) only

(c) (ii), (iii) and (iv) only

(b) (iii) and (iv) only

(d) (i), (iii) and (iv) only

23. In the following question, two statements are given. Read the statements carefully and choose
the

correct alternative among those given below.

Statement I: NABARD was set up in 1982.

Statement II : It is an apex body to coordinate the activities of all institutions involved in the rural

financing system.

(a) Both the statements I and II are true.

(b) Both the statements I and II are false

(c) Statement I is true but statement II is false.

(d) Statement II is true but statement I is false.

24. You are a company owner and have given employment to 300 employees. If 10 employees are

dismissed by you without loss of production, then this situation will be described as

(a) casual unemployment

(b) disguised unemployment

(c) structural unemployment

(d) seasonal unemployment.

25. Identify which of the following is renewable resource?

(a) Petroleum

(b) Water

(c) Coal

(d) Iron

26. Human Development Index measures _______in an economy.

(a) quality of life

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SOLUTIONS

(b) birth rate

(c) death rate

(d) quality of education

27.The features - Large population, low fertility rate and high degree of urbanisation are pertaining to

(a) India

(b) China

(c) Pakistan

(d) Asia.

28.Interpret the given picture on account of population growth.

29.What are the benefits of organic farming? Give one example of the crop which could be grown.

organically. OR

What will happen, if there is no additional employment generated in the economy even though we
are able to produce goods and services in the economy?

30.Give reasons which make India an outsourcing destination for the world.

31.(a) Name any one government organisation that regulate university education in India.

(b) 'Indian education system is considered faulty from the employment angle'. Do you agree?

Explain.

OR

What were the main causes of India's agricultural stagnation during the colonial period?

32.State whether the following statements are true/ false, with valid argument.

(a) GST : One India One Tax is a myth.

(b) Devaluation of rupee is weakened through administrative action.

33.(a) What do you mean by rural development?

(b) Bring out the key issues in rural development.

OR
(a) An establishment with four hired workers is known as (formal/informal) sector establishment.

Justify your answer.

(b) Compared to urban women, more rural women are found working. Why?

34.Read the following passage and answer the given questions on the basis of the same and
common

understanding.

A commission on Air Quality Management in NCR and adjoining areas was promulgated vide

ordinance dated 13th July 2021 for better coordination, ordination, research, identification and

resolution of problems surrounding the air quality index.

To control emissions from stubble burning, under Central Government Scheme on 'Promotion of

Agricultural Mechanisation for in-situ management of Crop Residue in the States of Punjab, Haryana,

Uttar Pradesh and NCR of Delhi', agricultural machines and equipment for in-situ crop residue

management are promoted with 50 percent subsidy to the individual farmers and 80 percent
subsidy

for establishment of custom hiring centres.

All diesel vehicles older than 10 years and all petrol vehicles older than 15 years have been banned
in

Delhi and NCR.

Expressways and Highways have been operationalised to divert non-destined traffic away from

Delhi.

Shifting industries to clean fuel and installation of Online Monitoring of Industrial Emission and

Effluent systems in red category industries in Delhi NCR is in progress.

Source: Eco-Survey (modified)

(a) Explain, how the opportunity cost of negative environmental impact are high?

(b) Give any three points explaining strategies for sustainable development by India.