Model Paper 2 Economics - Model Paper 2

Flexible exchange rate system has the advantage:

Demand deposits include ________.

Flow is a concept which is:

Aggregate demand is equal to ________.

________ is equal to the difference between AD beyond full employment and AD at full employment.

The central bank needs to intervene under the managed floating system. Do you agree with the given statement? Support your answer with valid reasons.

List the items of the Current Account of Balance of Payments account. Also define Balance of Trade.

Explain the concept of economic territory with reference to national income.

What is monetary policy? State any three instruments of monetary policy.

Explain the concept of consumption function.

India’s GDP contracted 23.9% in the April-June quarter of 2020-21 as compared to same period of 2019-20, suggesting that the lockdown has hit the economy hard.
State and discuss any two fiscal measures that may be taken by the Government of India to correct the situation indicated in the above news report.

(i)Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget
i. Expenditure on scholarships
ii. Expenditure on building a bridge
(ii). The government food subsidy given to run the Public Distribution System is more than Rs.75,000 crore. Why the government provide subsidy on food.

i.Given the following data, find the values of Government Final Consumption Expenditure and Mixed Income of Self-Employed:

S.no.	Contents	Amount (in ₹ Crores)
(i)	National Income	7,100
(ii)	Government Final Consumption Expenditure	?
(iii)	Gross Domestic Capital Formation	1,000
(iv)	Mixed-Income of Self-Employed	?
(v)	Net Indirect Taxes	200
(vi)	Net Factor Income from Abroad	100
(vii)	Private Final Consumption Expenditure	4,000
(viii)	Consumption of Fixed Capital	300
(ix)	Profits	120
(x)	Wages and Salaries	1,500
(xi)	Net Exports	500
(xii)	Operating Surplus	3,000

ii.How are the following treated while estimating private final consumption expenditure? Give reasons for your answer.
i. Exports.
ii. Direct purchases made abroad by resident households.
iii. Final consumption expenditure of non-profit institutions serving households.
iv. Change in stocks.

Study the following picture:


Identify the kind of activities, which may be envisaged under_____as diversification activity.

Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I:

Column I	Column II
(a) Land Ceiling	(i) Increase in production of food grain using high yielding variety seeds
(b) Land reforms	(ii) Portion of agricultural produce sold in the market
(c) Green Revolution	(iii) Fixing the maximum limit of land holding for an individual.
(d) Marketed Surplus	(iv) Change in the ownership of land (land to tillers)

Statement 1: Agriculture was commercialised during the British rule to cater to the needs of British industries for necessary raw materials.
Statement 2: The fall in production of food crops was responsible for frequent famines in India during the British days

The ________ of the environment implies that the resource extraction rate is not above the rate of resources regeneration.

Pakistan introduced its economic reforms in the year ________.

Why is women's household work not recognised as work?

Green revolution has led to increase in the use of chemical pesticides which in turn pollutes the environment. What measures can be taken to resolve this problem?

How has population explosion and the advent of industrial revolution resulted in environmental crisis?

Is rapidly growing population a constraint in the process of human capital formation? Explain.

Write a brief note on International Bank for Reconstruction and Development (IBRD).

What was Navratna Policy? Make a list of companies included in Navratnas.

Distinguish between planning objectives and plan objectives on any four basis.

Read the following text carefully and answer the questions given below:
India and China: so close yet so far
Given the good economic growth figures for India and the Chinese economic slowdown, it is worth wondering about the capacity of the former to replace the impetus lost by the latter. In fact, India, with a population close to 1,300 million, is the only emerging economy that could possibly follow in the footsteps of the Asian giant. However, in spite of them sharing notable features such as powerful demographics and a reduction in poverty, affecting hundreds of millions of people in both countries, India's growth is still far from the two-digit figures we had come to expect from China until very recently.
Throughout the last 35 years, both countries have gradually moved apart in economic terms. While China grew at an average rate of 10% for three decades, India advanced at a rate of just over 6% and, although these figures seem to be reversing at present (China grew by 6.9% in 2015 Q3 compared with India's 7.4%), India still has a long way to go. At the end of the 1970s, both economies were similar in size: India's share in the global economy was close to 3.0% and even exceeded China's share of 2.4%, but just over three decades later China accounts for 17.2% of the world economy in economic terms while India's share is less than half its neighbor's (7.1%). A dichotomy that can also be seen in other economic variables such as GDP per capita which, in India, has scarcely increased fourfold (from 1,000 dollars in 1980 to 3,780 currently) while in China it is now 14 times bigger (from close to 750 dollars to 10,538).
The contrast between the two countries is also evident in terms of international trade. Whereas exports of goods from China and India represented just 1% and 0.5% respectively of the world's exports in 1980, by 2014 China was exporting close to 13% of all global exports compared with 1.7% by India. By 2009 China had already become the world leader in exports, taking over from Germany, while India has been and continues to be a much more closed economy (19th in the world export ranking).
In summary, the gap separating India from China is considerable and has been widening for more than three decades, so it is not logical to assume that India can become the world's new China overnight. However, the country has huge potential for growth, especially if we take into account the reforms it is starting to implement: whether India prospers as much as its neighbour will depend on the success of those reforms.
Questions:
i. Analyse the contrasting features of India and China in terms of their economic growth.
ii. Examine the proposition that 'India can become the world's new China overnight'.

i. What are the emerging alternate marketing channels (or agricultural products? Explain their benefits.
ii.Self-Help Groups provide stimulus for institutionalised lending, employment generation and women empowerment in the rural areas. Justify the given statement with valid explanation.

i. State the sources of agricultural credit in India.
ii.Discuss the Different Policy Instruments initiated by the government to improve Agricultural Marketing.