Model Paper 3 Economics - Model Paper 3

The equilibrium exchange rate is determined at the point where the

The creation of ________ is called credit creation.

Which of the following is an example of intermediate goods?

When income is zero, savings will be ________.

Issue of new currency notes is a method of

What is depreciation of rupee? What is its likely impact on Indian imports and how?

Why is it said that the balance of payments is always balanced?

Calculate National income or NNP at FC.

Particulars	₹ in crores
(i) GDP at MP	4,800
(ii) Indirect Taxes	300
(iii) Net Factor income from abroad	80
(iv) Consumption of Fixed Capital	200
(v) Subsidies	60

National Income = ₹ 4,440 Crores

Explain the banker to the Government9 function of the Central bank.

With reference to Consumption Function answer the following questions:
i. What is consumption function?
ii. What is break even point?
iii. Consumption curve starts from Y-axis. What does this implies?

What is the investment multiplier? Explain the relationship between marginal propensity to consume and investment multiplier.

What is Fiscal Policy? 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.

(i) A large fiscal deficit leads to a higher revenue deficit in future. Do you agree with the statement? Give reasons in support of your answer.
(ii) Giving reasons, classify the following as direct and indirect taxes:
i. Income Tax
ii. Goods and Services Tax
iii. Corporate Tax
iv. Capital Gains Tax

i.Mention the situations in which following equations will hold true:
i. Value of Output is equal to Value Added.
ii. National income at Current Price = National income at Constant Price
iii. Gross domestic capital formation = Gross domestic fixed capital formation
iv. Operating Surplus = Rent + Royalty + Profit
ii.Giving valid reasons explain, which of the following will not be included in the estimation of National Income of India?
a. Purchase of shares of Sethi Ltd. by an investor in the Bombay Stock Exchange.
b. Salaries paid by Indian Embassy situated at Japan, to the local workers.
c. Depreciation on capital assets charged by firms.

Agriculture is a dominant sector of our economy and credit plays an important role in increasing agriculture production. The following are the institutional sources of agricultural credit except:

Match the following. options are as follows

a. Industries Act	i. 1973
b. MRTP	ii. 1951
c. FERA	iii. 1956

Statement I: During the British colonial period, India's agriculture was starved of investment in terracing, flood-control, drainage and desalinisation of soil.
Statement II: While a small section of farmers changed their cropping pattern from food crops to commercial crops, a large section of tenants, small farmers and sharecroppers neither had resources and technology nor had incentive to invest in agriculture.

We are now faced with increased demand for environmental resources and services but their supply is limited due to ________.

___________ announce its five year plan in 1951. While___________announced its five year plan in 1956.___________ announced its five year plan in 1953.

Write a note on changing structure of employment.

How do the Water contamination factor contribute to the environmental crisis in India? What problem do they pose for the government?

Government allocates forest lands to industries to use forest materials as industrial raw materials. Twelve years after setting up a paper mill in Uttar Kanara area, bamboo has been wiped out from that area. Even if a paper mill employs thousands of workers, but if they deprive the daily needs of million people, is it acceptable? What do you think?

Identify how Human Development Index is calculated? What is the position of India in the World Human Development Index?

What measures have been taken for globalisation of Indian economy?

Why there was need for economic reforms?

Give a chronology of different Five Year Plans of India.

The Impact of COVID-19 on South Asian Economies - Pakistan
EARLY IMPACT OF THE PANDEMIC On February 26, 2020, Pakistan confirmed its first two cases of COVID-19. The pandemic could not have come at a worse time: the economy was growing at a tepid rate, jobs were hard to come by, and high inflation continued to erode the purchasing power of millions of households. As the case count grew, fear that the virus would spread rapidly across the country led to a vociferous “lockdown versus livelihoods” debate. Khan made a public case for protecting livelihoods and argued against a countrywide lockdown. Nevertheless, provincial governments began to issue their own lockdown orders, shutting down all nonessential businesses. The enforcement of these orders brought Pakistan’s economy to a standstill by the end of March.
Early estimates predicted that the economy would lose between 12 and 18 million jobs during the lockdown. The World Bank predicted that the country would enter its first recession in decades. Consequently, on March 24, 2020, Khan announced a stimulus package to prop up the economy and pave the way for a quick recovery. Totaling Rs.1.2 trillion (about 3 percent of GDP), the stimulus included an Rs.200 billion fund to protect laborers, Rs.150 billion to expand the country’s existing cash transfer program to poor families, and another Rs. 100 billion for pandemic-related emergencies.
The biggest success of the stimulus was the rapid expansion of the country’s cash transfer mechanism. More than 15 million families received funds through the program, ensuring that millions of citizens did not fall into extreme poverty. The State Bank also played a key role in supporting the economy, extending credit to small- and medium-sized businesses and protecting millions of jobs in the formal economy. The cumulative support provided by the central bank reached Rs. 1.3 trillion by October 2020. It also sharply cut interest rates from 13.25 percent to 9 percent in April 2020 and pushed them down to 7 percent by the end of June. As its domestic economy struggled, Pakistan had to pause its USD 6 billion fiscal stabilization program (which had started in 2019) and seek emergency relief from the IMF. By mid-April, the IMF also approved a USD 1.39 billion loans to alleviate the economic pain from the pandemic. In the following months, the World Bank provided USD 505 million in low-interest, soft loans; the Asian Development Bank approved a USD 500 million emergency loan; and the Asian Infrastructure Investment Bank approved a USD 250 million loans. Nevertheless, by December 2020, debt relief program talks with the IMF stalled as the Khan government resisted the demands and restrictions posed by the IMF. These included demands to increase energy tariffs and to sustainably reduce debt in the power sector, among others.
Questions:
i. Discuss the projected impact of the countrywide lockdown on Pakistan’s economy.
ii. Analyse the implications of the pandemic on the domestic economy of Pakistan.

i. Discuss briefly, how institutional reforms (land reforms) have played a significant role in transforming Indian agriculture.
ii. Write a note on National Bank for Agricultural and Rural Development (NABARD).

i. What is organic farming and how does it promote sustainable development?
ii. Classify rural credit in different categories on the basis of time period.