| If due to fall in the price of good X, demand for good Y rises, the two goods are: (choose the correct alternative) |
| (a) Substitutes |
| (b) Complements |
| (c) Not related |
| (d) Competitive |
| If Marginal Rate of Substitution is increasing throughout, the Indifference Curve will be: (choose the correct alternative) |
| (a) Downward sloping convex |
| (b) Downward sloping concave |
| (c) Downward sloping straight line |
| (d) Upward sloping convex |
| Giving reason comment on the shape of Production Possibilities curve based on the following schedule: | |
| Good X (units) | Good Y (units) |
| 0 | 30 |
| 1 | 27 |
| 2 | 31 |
| 3 | 12 |
| 4 | 0 |
| What is likely to be the impact of 'Make in India' appeal to the foreign investors by the Prime Minister of India, on the production possibilities frontier of India? Explain. |
| Or |
| What is likely to be the impact of efforts towards reducing unemployment on the production potential of the economy? Explain. |
| What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more units of a good are produced? |
| Or |
| Define Average Revenue. Show that Average Revenue and Price are same. |
| A consumer consumes only two goods X and Y, both priced at Rs. 2 per unit. If the consumer chooses a combination of the two goods with Marginal Rate of Substitution equal to 2, is the consumer in equilibrium? Why or why not? |
| What will a rational consumer do in this situation? Explain. |
| Or |
| A consumer consumes only two goods X and Y whose prices are Rs. 5 and Rs. 4 respectively. If the consumer chooses a combination of the two goods with marginal utility of X equal to 4 and that of Y equal to 5, is the consumer in equilibrium? Why or why not? What will a rational consumer do in this situation? Use utility analysis. |
| If MPC = 1, the value of multiplier is: (Choose the correct alternative) |
| (a) 0 (b) 1 |
| (c) Between 0 and 1 (d) Infinity |
| Primary deficit in a government budget is: (Choose the correct alternative). |
| (a) Revenvue expenditure - Revenvue receipts |
| (b) Total expenditure - Total receipts |
| (c) Revenvue dificit - Revenvue payments |
| (d) Fiscal dificit - Interest payments |
| Direct tax is called direct because it is collected directly from: (Choose the correct alternative) [1] |
| (a) The producers on goods produced |
| (b) The sellers on goods sold |
| (c) The buyers of goods |
| (d) The income earners |
| Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely: (Choose the correct alternative) |
| (a) to rise (b) to fall |
| (c) to rise or to fall (d) to remain unaffected |
| What are fixed and flexible exchange rates? |
| Or |
| Explain the meaning of Managed Floating Exchange Rate. |
| Explain the 'Banker's Bank as a function' of the central bank. |
| Or |
| Explain the 'Bank of Issue function' of the central bank. |
| An economy is in equilibrium. Calculate the Investment Expenditure from the following: |
| National Income = 800 |
| Marginal Propensity to Save = 0.3 |
| Autonomous Consumption =100 |
| Giving reason explain how the following should be treated in estimation of national income: |
| (i) Payment of interest by a firm to a bank |
| (ii) Payment of interest by a bank to an individual |
| (iii) Payment of interest by an individual to a bank |
| What is 'deficient demand'? Explain the role of 'Bank Rate' in removing it. |
| Or |
| What is 'excess demand'? Explain the role of 'Reverse Repo Rate' in removing it. |
| Calculate the 'National Income': | ||
| (Rs. crores) | ||
| (i) | Rent | 200 |
| (ii) | Net factor income to abroad | 10 |
| (iii) | National debt interest | 15 |
| (iv) | Wages and salaries | 700 |
| (v) | Current transfers from government | 10 |
| (vi) | Undistributed profits | 20 |
| (vii) | Corporation tax | 30 |
| (viii) | Interest | 150 |
| (ix) | Social security contributions by employees | 400 |
| (x) | Net domestic product accruing to government | 250 |
| (xi) | Net current transfers to rest of the world | 5 |
| (xii) | Dividends | 50 |
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