@ Section A: Macroeconomics 1. Read the following statements carefully: Statement 1: Decline in government consumption is responsible for the decline in the Indian economy. Statement 2: The government should decrease its expenditure to correct a situation of deficient demand. In the light of the given statements, choose the correct alternative from the following: (a) Statement 1 is true and statement 2 is false () Statement 1 is false and statement 2 is true (c) Both statements 1 and 2 are true (@) Both statements 1 and 2 are false 2. Read the following figure carefully and choose the correct pair from the alternatives given below: Balance of Payments c—.. 10S Current Capital Account ‘Account ¥ ‘ + ¥ + 5 ¥ Portfolio Balance of Reserve A c B and other ee Investments | |_Account Alternatives: : (a) A: Net current transfers; B : Foreign direct investment; C : Net income from abroad () A: Foreign direct investment; B : Net current transfers; C : Net income from abroad (c) A: Net income from abroad; B : Foreign direct investment; C : Borrowings (d) A: Net current transfers; B : Net income from abroad; C : Foreign direct investment 3. A period of falling aggregate demand is attributed to a fall in: ; (a) Household consumption expenditure and Government consumption expenditure (b) Investment expenditure and Net exports (c) Both (a) and (6) (d) Neither (a) nor (6) : : 4. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives give below: ; ‘Assertion (A): Export of sugar is recorded in the capital account, Reason (R): ‘Atmanirbhar Bharat’ will decrease inflow of foreign exchange.10. Mu. ~ Savings is a Alternatives: (a) Both Assertion (A) and Reason (R) are true and Rea: (4) Both Assertion (A) and Reason (R) are true and Re: (c) Assertion (A) is true but Reason (R) is false (d) Assertion (A) is false but Reason (R) is true What role does the central bank (@) Issuer of currency (©) Lender of last resort son (R) is the correct explanation of Assertion (A) son (R) isnot the correct explanation of Assertion (4) Play when a commercial bank XYZ fails to meet obligation of its depositors? (6) Banker to the government (@) None of these Read the following statements carefully: Statement 1: Depreciation of domestic currency encourages exports. Statement 2: Appreciation of domestic currency discourages imports. Im the light of the given statements, choose the correct alternative from the following: (a) Statement 1 is true and statement 2 is false (®) Statement 1 is false and statement 2 is true (c) Both statements 1 and 2 are true (@ Both statements 1 and 2 are false concept, whereas capital is a concept. ©) flow; stock @) flow; flow Suppose, following data is presented, for an imaginary economy: Autonomous consumption = % 100 Marginal propensity to consume = 0.70 National Income = & 1000 Identify, which of the following statements is correct for consumption expenditure. (@) The value of consumption expenditure would be & 800. (6) The value of consumption expenditure would be ¥ 700. (©) The value of consumption expenditure would be € 600. (4) The value of consumption expenditure would be & 500. Read the following statements carefully: (a) stock; flow (©) stock; stock Statement 1: Bank Rate is the rate at which the central bank lends funds to the commercial banks, Statement 2: Cash Reserve Ratio (CRR) is the Proportion of deposits that commerical banks have to keep as cash reserves with the central bank. In the light of the given statements, choose the correct alternative from the following: (a) Statement 1 is true and statement 2 is false (4) Statement | is false and statement 2 is true (c) Both statements | and 2 are true (d) Both statements | and 2 are false Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below: Assertion (A): At the left of Break-Even point, APC is greater than one, Reason (R): At the left of Break-Even point, APS is positive. fa) Baa ee (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (a) (®) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A) (©) Assertion (A) is true but Reason (R) is false (@) Assertion (A) is false but Reason (R) is true “India’s GDP is expected to expand 7.5% in 2019-20: World Bank” —The Economic Times Does the given statement mean that welfare of people of India increase at the same rate? Comment with reason.Practice Papers 365 12. (A) “India is taking huge leaps in the index of Eas: : ; ¢ of Doing Business; as it production base to India.” In the light of the given statement, Onn Wp te wt flights and its likely impact on Indian economy. sa onal e ven (B) ‘Devaluation and De eo evaluation and Depreciation of the ena piepltans currency are one and the same thing,’ Defend or refute the above statement 13. (a) ‘We say that commercial banks create money, whil -, while we also say that th ight toi an tite y that the central bank has the sole right to issue (b) What is the likely impact of money creation by the commercial banks on national income? 14. (A) Inan economy, Savings function is given by S = (~) 50 + 0.2 Y and Y is & 2,000 crores. Consumption expenditure for the economy would be % 1,650 crores and the autonomous investment is € 50 crores and the Marginal Propensity to Consume is 0.8. True and False? Justify your answer with proper calculations. (B) Explain the meaning of: ith (@) Aggregate supply () Under-employment equilibrium 15. “Indian economy saw its worst contraction in decades. It is in a deep vicious cycle where demand is contracting heavily.” The Hindu; August 31st, 2020 State and discuss any two monetary measures that may be taken by the government of India to correct the situation indicated in the above news report. 16. (A) ‘All products do not contribute equally to economic welfare.’ Defend or refute the given statement with valid reasons. (B) ‘Commission received from sale of second hand goods’ should be included/not included in the estimation of national income. State with valid reason. or (©) The value of Nominal GNP of an economy was & 2,500 crores in particular year. The value of GNP of that country during the same year evaluated at the prices of base year was. % 3,000 crores. Calculate the GNP deflator of the year in percentage terms. Has the price level risen between the base year and the year under consideration? a (D) Giving reason, state how will the following be treated in the estimation of National Income: (a) Payment of interest by an individual to a bank on a loan to buy a car (B) Expenditure by government on providing free services 17. (a) On the basis of given chart, interpret the trend of fiscal deficit as a percent of budget estimates. Fiscal deficit as a percent of budget estimate +) Discuss briefly how can the government budge! help in reducing inequalities of income econom} ® 0) the gover budge 9g i fies of income in the vy iscu: Soction B: Indian i Jhout the colonial regime. 18. service remained inadequate throughout aun (@ Law and Orde (B) Postal @ Ports366 Together ewith® Economics—12 19. Read the following statements—Assertion (A) and Assertion (A): Land (% Assertion (A) is false but Reason (R) is true 20. The major share of total education expenditure is (a) Elementary education (©) Secondary education 21. In China, commune system is related to (@) agriculture (©) services 22. Read the following statements carefully: Statement 1: China introduced reforms originally taken by : (6) Higher education (@) Technical education to sector. (6) industry @ informal Statement 2: The Great Leap Forward (GLF) campaign took place in 1958, 4m the light of the given statements, choose the correct alternative from the following: (@) Statement 1 is true and statement 2 is false () Statement 1 is false and statement 2 is true (©) Both statements 1 and 2 are true (@) Both statements 1 and 2 are false Government. (ii) India generated huge export surplus, (#») Britain had a monopoly control over India’s (a) (@ and (iv) (©) @ and (ii) foreign trade. © (i and (ity (@) Only (ii) 24. The two major sources of human capital in a country are: (@) Investment in Education and Health (6) Investment in Education and On-the-job Trai (C) Investment in Education and Migration (@) Investment in Education and Information ining 25. Read the following statements—Assertion (A) and Reason (R). Choose ‘one of the correct alternatives given below: Assertion (A): From 2014, Pradhan Mantri Jan Dhi Reason (R): To facilitate the transfer of all the ben directly. Alternatives: (6) Both Assertion (A) and Reason (R) are true (c) Assertion (A) is true but Reason (R) is false (@) Assertion (A) is false but Reason (R) is true ian Yojana is available to people in India to open a bank account. efits of government schemes and subsidies to the accountholders (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) and Reason (R) is not the correct explanation of Assertion (A)Practice Papers 367 ‘lum 1 and corresponding relevant fet given in Column I, bout Chin, se to cannlaion eitec hy uring cel mia ao no jin education sector. ey ane in ou ft ef ie me eet ieee368 Papecer auté® Economics —12 3: era was responsible for the decline of traditional handicraft industries.” Discuss the rationale of fement with valid reasons, (0 procure sufficient food grains to b ish the rationale of the given statement wi or (©) Analyse the tend in the growth of GDP in the major sectors post 1991 on the bass of the data siven below, (©) Which sector has witnessed growth higher than the overall GDP growth in 2014-15? Growth of GDP and major sectors ( stocks that could valid reasons, 36 a a eer Industry 1 14 50 10 Services 67. 109 78. 98. To 36 82 66 74 Source: Economie Survey for various years ‘and answer the given questions on the basis ofthe same and common understanding: Human development is a process of enlarging the range of people's choices, increasing their opportunities for education, healthcare, income and empowerment and covering the full range of human choices from a sound physical environment to economic, social and political freedom, Thus, enlarging the range of people’s choices Read the following text careful the most significant aspect of human development. People’s choices may involve a host of other issu 4 long and healthy life, to be educated and have access to resources needed for a decent standard of living including political freedom, guaranteed human right and personel self-respect, etc. are considered some of the non-negotiable aspects of the human development Concerted efforts were made to look at development effort towards this was the publication of the First Human Development Report by United Nations Development Programme (UNDP) in 1990. Since then, this organisation has been bringing out World Human Development Report every year. This report does not only define human development, make amendments and changes its indicators but Also ranks all the countries of the world based on the calculated scores, According to the Human Development 993, “progressive democratisation and increasing empowerment of people are seen as the minimum ms for human development”. Moreover “development must be woven around people, We people around development” as was the case pre (@) The concept of human development is different from that of human eapital. How? (0) What 1¢ important aspects of human development’