‘Smt.Sulochanadevi Singhania School, Thane CLASS | SUBJECT EXAM | DATE | MARKS | TIME | NO.OF SIDES Xil ECONOMICS | PRELIM | 23/12/24| 80 |3HRS. i INSTRUCTIONS TO CANDIDATES: > You are allowed additional fifteen minutes for only reading the question paper > You must NOT start writing during reading time. ; > This question paper has 7 printed pages. > It is divided into three sections and has 13 questions in all. e > All questions are compulsory. Answer all questions. ce > Section A has sixteen subparts which are very short answer qu@stions. Each question carries 4 mark, > While attempting Multiple Choice Questions in Sectior’A, you are required to write only ONE option as the answer. > Section B has eight questions which are short"answer questions. Each question carries 4 marks > Section C has four questions which are long answer questions. Each question carries 8 marks. > Internal choices have been provided in two questions in Section B and in one question in. Section C. > The intended marks for questions are given in brackets []. SECTION A (16 MARKS) QUESTION j, “Which of the following formulas is correct? a) Real GDP= Price index/ Nominal GDP X100 b) Real GDP= Nominal GDP/Price index X 100 _c) Nominal GDP = Real GDP/Price index 100 d) Nominal GDP= Price index/Real GDP. X 100ii. IfAC= O,then AS will be a) Equalto AY b) Greater than AY ¢) Equal to AC d) Less than AY What will be the effect of Progressive taxation: a) Tax liability increases with increase in absolute terms, income taxed remains the same. en b) Tax liability increases with increase in absolute terms, but also as a proportion of the income. AX ) Tax liability increases with increase in income. d) Tax liability increases with fewer effects on income. but the proportion of <> ;. Identify what is not true for Marginal Cost Curve:- a) MC is common for both ATC and AVC. cx b) The MC curve is U-shaped because of the law of variable proportions. ¢) When MC=AC, MC remains constant. d) MC for any level of output can be calculated by.taking the slope of the TC curve corresponding to the level of output. v. Calculate, if the value of multiplier is 4, then what will be the value of MPC and MPS? a) 0.85,0.15 b) 0.25,0.75 c) 0.15,0.85 d) 0.75,0.25 vi. The short-term Shut down point-of production for a firm operating under perfect competition will most likely toloccur when the AR or P per unit is equal to: a) AVC per unit b) MC per unit ©) MR per unit d) ATC per unit. vii. Read the following statements - Assertion (A) and Reason (R ). Choose the correct alternatives given below: Assertion (A): The level of output as determined by the equality of Y and AD neosssarily means the level of full employment, Reason (R): The equilibrium level of output may be greater than the full employment level of output(in case of excess demand) or less than the full employment level of output (in case of deficient demand.))is the correct a) Both assertion (A) and reason (R ) are true and Reason (R ‘explanation of Assertion (A) . b) 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. d) Assertion (A) is false, but Reason (R ) is true. viii, Purchase on shares by the government is related to:- a) Revenue Receipt b) Capital expertiture TeCay>te ©) Revenue expenditure d) Capital Expenditure ix) With help of a given diagram, why does Marginal utility eurve is declining though positive, as output is increasing up to point F? a x) What are the reasons for the more elastic demand curve for a toothpaste firm? xi) How is the deflationary gap generated in the economy? xil) State whether the following-statement is True or False and Give reason for the same: GNP MP is equal to. GDP MP when Net Indirect taxes are zero. xii) How will aggregate demand be affected by the increase in CRR? xiv) Why is the primary deficit called as a measure of fiscal discipline of the government? xv) Explain the importance of personal income and private income. xvi A restrictive fiscal policy can be successfully used to wipe out the BOP deficit- ‘support your answer. k Section B (32 Marks) Question 2 i) In order to understand the Giffen goods, it is necessary to distinguish between the two concepts of income- Identify and explain the same and draw the demand curve for the Giffen goods. (2) ii) What does convexity of indifference curve per imply? (2)rca increase in d }) What willbe the simultaneous changes in the market forces when is more than increase in supply? i) Which stage is considered as economic absurdity? and why? Question 4 i) Justify: C= atcY : . ii) Identify the following diagram in which the government makes the investment. wa ; how does it change over time? Illustrate and Prove: C+l= C+S Question 5 i) Draw and explain the shut down and break-even’ point with the help of derivation of the short-run supply curve under perfect competition, 2) ii) Why is MR=MC, a necessary condition but not the sufficient condition for the firm to earn maximum profit Justify your answet. 2) Question 6 i) Which method of debt redemption is possible and effective when the government enjoys good creditworthiness'and why? ii) Is it possible that a fis¢al deficit in a government budget can emerge without a revenue deficit? - Justify your answer. i) Distinggish between income from property and income from entrepreneurship under the classification of Operating surplus. (2) (2) 2) ii) With the help of the above image of one of the market systems, what are the restrictions he has put on the other sellers which made the entry closed for others- give reason. (2)i eee ‘Amount (@) in crore ‘S.No | Items eS aa (i) | Old age pension {iy | Wages and salaries in.cash © tion to employees (ii) _ | Rent free accommodat (vy _ | Employer's contribution to PF * () __| Payment of LIC premium by the employees (wi) _ | Contribution to Provident fund by employees OR Question 12 i) GDP at constant prices is a better and more rel Do you agree? ii) Calculate the following with income and expenditure methods, Jiable index of growth of an economy- (2) ©) Sr.no__ | items Amount (@) in crore @ Government of final consumption:éxpenditure 1100 i) Net Exports (30) Mixed income of self employed 700 Interest Rent ‘Consumption of fixed capital Net domestic capital formation Private final consumption expenditure Profit Net indirect taxes Net factor income from abroad ‘Compensation of employeesQuestion 8 ') “India is taking huge Leaps in the index of Ease of Doing Business; as a result, many MNCs are shifting their production base¢ to India.” In the light of the above statement, ‘comment upon the flow of foreign exchange and its likely impact on the Indian economy @ il) With the help of the above statement, categorize the components of the Capital account in the BOP transactions. 2) OR S Determination of exchange rat inthe flexible exchange market where the demand for the dollar is in excess. A @) ) low to find profit-maximising output with the help of TR-TC approach. (4) Section C (32 marks) Question 10 i) Why does the Budget line slopes negatively? @ ii) Strike out the difference between Ordinal and cardinal utility approach. (2) ii) Explain the following approach: ‘A consumer attains his equilibrium when he maximizes his satisfaction, given his income and prices of two commodities. (4) Question 11 i) What will be the effect on returns'to a factor when the ratio of labour is more than the ‘optimum fixed factor which is a-capital? (2) ii) Minimum wage rate is helpful for the labor to protect his fundamental right to get the minimum wages for his work- Explain the role of the government in the Price(wage) fixation policy with the help of a suitable diagram. © Question 12 i)lilustrate the Closed economy model with the role of the government. (4) ii) From the'following data,calculate the value of Compensation of Employees and explain with reason which items are excluded from the national income calculation? (4) (eT: 0]question 13 Read the following extract and answer the following questions: a ae ree en committee (MPC) is largely expected to hold the key fa eet i eleventh straight meeting, but a few economists have i asis points (bps) cut following the recent growth numbers.GDP expanded 5.4% in the September quarter, the slowest pace in seven quarters and sharply below the polled estimate of 6.5%.The RBI may infuse liquidity via a possible 50 bps cash reserve ratio (CRR) cut on Dec. 6, and bring out other instruments over the next few months, economists at HSBC said in a note. The move to lower CRR is @ welcome step as it releases funds for banks to lend. RBI's stance on inflation and, therefore, on Repo rate will have long term implications of lowering inflation and stabilising currency. Questions: a) In the measures of money supply, the degree of liquidity is less in case of time deposits- why? (1) 'b) Explain the effectiveness of the trade union to increase the cost-push inflation. (1) ¢) How does the central bank's management of high-powered money influence overall economic stability and the effectiveness of monetary policy? 2) d) With reference to the above extract, explain the process of credit creation, where initial deposit is Rs. 1000 with CRR.ds 20% to meet the demand for cash by its depositors. (4) ALL THE BEST.........