Introduction — Economics STD 12 Humanities & Commerce — Question

What possible fiscal policy measures can be taken with respect to expenditure and income to correct (i) Excess demand and (ii) Deficient demand in the economy.

Calculate Net Value Added at factor cost from the following data:

		(Rs. lakhs)
1	Depreciation.	20
2	Intermediate cost.	90
3	Subsidy.	5
4	Sales.	140
5	Exports.	7
6	Change in stock.	(-)10
7	Import of raw materials.	3

Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.

Introduction of money has separated the acts of 'sale' and 'purchase'. How?

What are the important features of a capitalist economy?

Suppose that consumption equals C = 100 + 0.758, and investment equals I = 50 and Y = C + I. Find;

1. The equilibrium level of income,
2. The level of consumption at equilibrium,
3. The level of saving at equilibrium.

Distinguish between direct taxes and indirect taxes. Give an example of each.

Factors of production within the domestic territory determine domestic factor income. Do you agree?

Giving reason, classify the into factor income or transfer income.
Claim received from Insurance company by an injured worker.

What is meant by ‘investment multiplier’? Explain the relationship between marginal propensity to consume and investment multiplier.