This Paper has 25 answerable questions with 0 answered.
Roll No……………… | |
Time allowed : 3 hours | Maximum marks : 100 |
Total number of questions : 8 | Total number of printed pages : 2 |
PART — A |
(Answer Question No.1 which is compulsory and any three of the rest from this part.)
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Marks |
1. | (a) | State, with reasons in brief, whether the following statements are true or false: | 3each | |
| | (i) | A production possibility curve is negatively sloped and is concave to the origin because the opportunity cost is not only positive but increases as more of a good is produced. | | (0) |
| | (ii) | When income alone of a consumer increases, the demand curve for a normal good shifts parallel upwards. | | (0) |
| | (iii) | If the marginal rate of substitution between two normal goods is constant, the shape of such an indifference curve will be convex to the origin. | | (0) |
| | (iv) | Giffen goods are an exception to the law of demand because these are ‘status–related goods’, the demand for which is not much dependent on changes in their prices. | | (0) |
| | (v) | The higher the marginal propensity to consume, the higher will be the value of (Keynesian) multiplier. | | (0) |
| (b) | Distinguish between any two of the following: | 5each | |
| | (i) | ‘Price competition’ and ‘non–price competition’. | | (0) |
| | (ii) | ‘Price–maker firm’ and ‘price–discriminator firm’. | | (0) |
| | (iii) | ‘Pure monopoly’ and ‘simple monopoly’. | | (0) |
2. | (a) | “A rational consumer attains an optimum basket of goods when the marginal utilities of individual goods and services are equal to each other.” Comment. | 4 | (0) |
| (b) | “A linear demand curve will have different price–elasticities of demand on its different points, ranging from zero to infinity.” Explain and illustrate with the help of appropriate figure(s). | 4 | (0) |
| (c) | Explain that at equilibrium level of income— (i) | ‘Aggregate demand’ is equal to ‘aggregate supply’; and | (ii) | ‘Planned saving’ is equal to ‘planned investment’. | | 7 | (0) |
3. | (a) | “As equal increments of one input are added, the inputs of other productive services being held constant, beyond a certain point, the resulting increments of product will decrease, i.e., the marginal product will diminish.” Explain the above law and give causes of ‘increasing returns’ during its first stage. | 8 | (0) |
| (b) | Explain how does an industry (market) and firm(s) under perfect competition attain their price and output equilibrium under the short–run. Give appropriate figure(s). | 7 | (0) |
4. | (a) | What are the main functions performed by a central bank of a country ? | 8 | (0) |
| (b) | Critically explain the Ricardian theory of comparative cost advantage in international trade. | 7 | (0) |
5. | (a) | Explain the methods of measurement of national income in a country and suggest the most appropriate method for estimation of national income in India. | 8 | (0) |
| (b) | “A perceptible and sustained rise in the general price–level is known as inflation”. Explain the phenomenon and suggest ways to control it. | 7 | (0) |
PART — B |
(Answer ANY TWO questions from this part.)
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6. | (a) | What is meant by ‘market–failure’ and what are its causes ? | 4 | (0) |
| (b) | Does the ‘business environment’ include ‘economic environment’ ? Give some important components of business environment. | 4 | (0) |
| (c) | Indian economy seems to have taken a U&ndashturn in the present day liberalised economic regime from a command economy of pre–economic reforms period (before 1991). Explain the main areas of thrust of the Industrial Policy Resolution, 1991 in this context. | 7 | (0) |
7. | (a) | Explain the objectives and instruments of monetary policy. Do you agree that monetary policy is more effective during inflationary periods ? | 8 | (0) |
| (b) | Describe and explain how fiscal policy can be effectively used by a government to achieve accelerated economic growth and distributive justice. | 7 | (0) |
8. | (a) | Write short notes on the following : | 4each | |
| | (i) | Need and justification of dis-investment process in India | | (0) |
| | (ii) | Optimum foreign exchange reserves. | | (0) |
| (b) | What is meant by ‘financial system’ of an economy ? Does India have a sound financial system ? | 7 | (0) |