| When income of the consumer falls the impact on price-demand curve of an inferior good is: (choose the correct alternative) |
| (a) Shifts to the right. |
| (b) Shifts to the left. |
| (c) There is upward movement along the curve. |
| (d) There is downward movement along the curve. |
| If Marginal Rate of Substitution is constant throughout, the Indifference curve will be: (choose the correct alternative. |
| (a) Parallel to the x-axis. |
| (b) Downward sloping concave. |
| (c) Downward sloping convex. |
| (d) Downward sloping straight line. |
| Giving reason comment on the shape of Production Possibilities Curve based on the following schedule: | |
| Good X (units) | Good Y (units) |
| 0 | 10 |
| 1 | 9 |
| 2 | 7 |
| 3 | 4 |
| 4 | 0 |
| What will be the impact of recently launched 'Clean India Mission' (Swachh Bharat Mission) on the Production possibilities curve of the economy and why? |
| Or |
| What will likely be the impact of large scale outflow of foreign capital on Production Possibilities curve of the economy and why? |
| Define cost. State the relation between marginal cost and average variable cost. |
| Or |
| Define revenue. State the relation between marginal revenue and average revenue. |
| A consumer consumes only two goods X and Y both priced at Rs. 3 per unit. If the consumer chooses a combination of these two goods with Marginal Rate of Substitution equal ?to 3, is the consumer in equilibrium? Give reasons. What will a rational consumer do in this situation? Explain. |
| Or |
| A consumer consumes only two goods X and Y whose prices are Rs. 4 and Rs. 5 per unit respectively. If the consumer chooses a combination of the two goods with marginal utility of X equal to 5 and that of Y equal to 4, is the consumer in equilibrium? Give reason. What will a rational consumer do in this situation? Use utility analysis. |
| The value of multiplier is: (choose the correct alternative) |
| (a) \[\frac{1}{MPC}\] (b) \[\frac{1}{MPS}\] |
| (c) \[\frac{1}{1-MPS}\] (d) \[\frac{1}{MPC-1}\] |
| Borrowing in government budget is: (choose the correct alternative) |
| (a) Revenue deficit (b) Fiscal deficit |
| (c) Primary deficit (d) Deficit in taxes |
| The non-tax revenue in the following is: (choose the correct alternative) |
| (a) Export duty (b) Import duty |
| (c) Dividends (d) Excise |
| Other things remaining unchanged, when in a country the price of foreign currency rises, national income is: (choose the correct alternative) |
| (a) Likely to rise |
| (b) Likely to fall |
| (c) Likely to rise and fall both |
| (d) Not affected |
| Name the broad categories of transactions recorded in the 'capital account' of the Balance of Payments Accounts. |
| Or |
| Name the broad categories of transactions recorded in the 'current account' of the Balance of Payments Accounts. |
| Explain the 'bank of issue' function of the central bank. |
| Or |
| Explain 'Government's Bank' function of central bank. |
| An economy is in equilibrium. Calculate national income from the following. |
| Autonomous consumption =100 |
| Marginal propensity to save = 0.2 |
| Investment expenditure = 200 |
| Giving reason explain how should the following be treated in estimation of national income: |
| (i) Expenditure by a firm on payment of fees to a chartered accountant |
| (ii) Payment of corporate tax by a firm |
| (iii) Purchase of refrigerator by a firm for own use |
| Explain the concept of Inflationary Gap. Explain the role of Repo Rate in reducing this gap. |
| Or |
| Explain the concept of Deflationary Gap and the role of 'Open Market Operations' in reducing this gap. |
| Calculate National Income: | ||
| (Rs. crores) | ||
| (i) | Personal tax | 80 |
| (ii) | Private final consumption expenditure | 600 |
| (iii) | Undistributed profits | 30 |
| (iv) | Private income | 650 |
| (v) | Government final consumption expenditure | 100 |
| (vi) | Corporate | 50 |
| (vii) | Net domestic fixed capital formation | 70 |
| (viii) | Net indirect tax | 60 |
| (ix) | Depreciation | 14 |
| (x) | Change in stock | (-) 10 |
| (xi) | Net imports | 20 |
| (xii) | Net factor income to abroad | 10 |
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