Model Paper 4 Economics - Model Paper 4

The demand for foreign exchange and the exchange rate has

The monetary policy generally targets to ensure ________.

Which of the following is not an example of flow variable?

According to the theory of Keynesian Economics, the value of Average Propensity to Consume can never be ________.

A situation when AS = AD along with fuller utilisation of resources in the economy is called:

When foreign exchange rate in a country is on the rise, what impact is it likely to have on imports and how?

What is Balance of Payments? What does it comprise?

Explain how does following helps to control the credit creation.
i. Open market operation
ii. Margin requirement of loans.

In an economy the consumption function is C = 500 + 0.75Y, where C is consumption expenditure and Y is income. Calculate the equilibrium level of income. Calculate the equilibrium level of income and consumption expenditure when investment expenditure is ₹5,000.

Explain, how the Reverse Repo Rate helps in correcting Excess Demand in an economy?

(i) Explain briefly any two objectives of a government budget.
(ii) Explain revenue receipts in a government budget with appropriate examples.

Farmers cannot retain the product for a long time they have to sell it immediately. Which defect of agriculture is shown in this system?

Select the correct combination between the following columns.

Column A	Column B
(a) Socialism	(i) Coexistence of both public and public sector
(b) Capitalism	(ii) Produced goods are distributed on the basis of purchasing power of the people.
(c) Mixed economic system	(iii) What, how and for whom to produce
(d) Central problems of an economic system	(iv) Produced goods are distributed on the basis of need and not affordability.

Statement I: During the colonial period, The agricultural sector accounted for the largest share of workforce, which usually remained at a high of 70-75 per cent while the manufacturing and the services sectors accounted for only 10 and 15-20 per cent respectively.
Statement II: Parts of the then Madras Presidency (comprising areas of the present-day states of Tamil Nadu, Andhra Pradesh, Kerala and Karnataka),Bombay and Bengal witnessed a decline in the dependence of the workforce on the agricultural sector with a commensurate increase in the manufacturing and the services sectors.

In Delhi, the use of _____ as fuel in public transport system has significantly lowered air pollution.

China has the ______ largest GDP.

Why is it not easy to maintain an employment growth rate of 2% for a country like India?

Recently Indians have drifted away from the traditional knowledge and practices and caused large scale damage to environment. Explain how, adopting the traditional practices can be helpful in achieving the objective of sustainable development.

Explain the concepts of the greenhouse effect and greenhouse gases.

Trace the relationship between human capital and economic growth.

Explain negative impacts of liberalisation and globalisation on business and industry in India.

As a form of economic activity, outsourcing has intensified in recent times. Most MNCs, and even small companies, are outsourcing their services to India. Defend or refute the above statement.

Why was public sector given a leading role in industrial development during the planning period?

At the turn of the century, Pakistan had the highest GDP per capita when compared with India, Bangladesh, and Vietnam. Twenty years later, it is at the bottom of the group. Political upheaval, a violent insurgency fed by the war in Afghanistan, and the inability of successive governments to carry out reforms are to blame for this decline. Today, a polarized political environment and elite intrigue among civilian, judicial, and military institutions have made sustainable economic growth and reforms that much more unlikely. The COVID-19 pandemic has further sharpened the challenge.
Inflation is still the biggest issue facing the government today. Headline inflation climbed to 9 percent in September 2020 and double-digit food inflation continues to erode citizens’ purchasing power. This has worsened the situation for millions of households who have seen a decline in their purchasing power since 2016, according to data from the Pakistan Bureau of Statistics. In its most recent monetary policy statement, the State Bank of Pakistan raised its concerns as well, warning that while “core inflation has been relatively stable,” food inflation remains a risk, “especially in the wake of recent flood-related damages and potential locust attacks.” With households spending a larger share of their incomes on food—an emerging wheat crisis is compounding problems—consumption spending on other items will remain subdued, leading to a lack of economic growth in a country where consumer spending drives more than 80 percent of the economy.
At the same time, a weak economic recovery around the world, particularly in the European Union and the United States, will subdue demand for Pakistan’s exports. After declining by 20 percent on a year-on-year basis in August, exports grew by 6 percent in September. The outlook, however, remains bleak due to a weak global economic recovery. The issue has been further exacerbated by chronic structural inefficiencies — exporters who received additional orders in recent weeks are facing gas and cotton shortages. This means export growth is unlikely to drive a significant uptick in economic activity and employment. As a result, the structural issue with Pakistan’s economy, i.e., its inability to earn sufficient foreign income to pay for its import and debt servicing needs, remains its Achilles’ heel.
Questions:
i. Discuss the underlying problem with Pakistan's sustainable growth?
ii. Anticipate the outcome of Pakistan’s foreign income vis-à-vis its export growth.

i. Explain the need for rural development.
ii. Explain different sources of credit in rural areas.

i. Discuss the importance of credit in rural development.
ii. The Government of India has taken various measures to align the agricultural marketing system with the growing production activities in the rural areas.
Do you agree with the given statement? Give any two valid reasons in support of your answer.