CWA ICWA Foundation : Economics and Business Fundamentals - June2012

CWA ICWA Foundation • Economics and Business Fundamentals • June 2012

This Paper has 72 answerable questions with 1 answered.

P—3(EBF) Syllabus 2008
Time Allowed : 3 Hours	Full Marks : 100

The figures in the margin on the right side indicate full marks.
SECTION I (60 Marks)
Answer Question No.1 which is compulsory and any two from the rest.

The figures in the margin on the right side indicate full marks.

SECTION I (60 Marks)

Answer Question No.1 which is compulsory and any two from the rest.

(a)

Answer the following :

1x9=9

(i)

Deductive method involves

(A)	Applying ethical reasoning
(B)	Using mathematical reasoning
(C)	Moving from particular to general
(D)	Moving from general to particular

(0)

(ii)

The concept of consumer’s surplus was propounded by

(A)	Malthus
(b)	Alfred Marshall
(c)	Robbins
(d)	Pigou

(0)

(iii)

Law of Demand Explains

(A)	Qualitative relationship
(B)	Quantitative relationship
(C)	Functional relationship
(D)	None of the above

(0)

(iv)

Economics is a

(A)	Positive science
(B)	Normative science
(C)	Exact science
(D)	Both (A) and (B)

(0)

(v)

Utility is

(A)	Cardinal
(B)	Ordinal
(C)	Neutral
(D)	Both (A) and (B)

(0)

(vi)

In the long run monopolists earn

(A)	Nominal profit
(B)	Abnormal profit
(C)	Loss
(D)	Heavy loss

(0)

(vii)

We cannot produce

(A)	Any thing
(B)	Every thing
(C)	Useless things
(D)	Good things

(1)

(viii)

A monopolist can control

(A)	Price
(B)	Output
(C)	Both (A) and (B)
(D)	Either (A) or (B)

(0)

(ix)

Under perfect competition demand curve, AR and MR are

(A)	the same
(B)	not the same
(C)	AR more than MR
(D)	MR more than AR

(0)

(b)

Fill in the blanks :

1x12=12

(i)

Utility is ________________ in nature.

(0)

(ii)

The want satisfying power of a thing is called ______________

(0)

(iii)

_________________ function of money makes it available for future use.

(0)

(iv)

Money is created by the __________________ bank.

(0)

(v)

The production of food grains according to Malthus increases at ____________ progression.

(0)

(vi)

The rate of interest charged by the Central Bank from other banks is called __________________

(0)

(vii)

A firm maximizes its profit where its marginal revenue is equal to its ___________________.

(0)

(viii)

The formula for calculating optimum population is ____________ related to Interest rate.

(0)

(ix)

Per Capita Income = National Income/ _____________

(0)

(x)

Money is matter of functions four:
a medium, a measure, a standard and a ______________

(0)

(xi)

In Capitalism factors of production _____________ are owned.

(0)

(xii)

The laws of economics should not be compared with the laws of physics, chemistry or maths but should be compared with the simple law of _________________.

(0)

(c)

State which of the following statements is ‘true’ and which is ‘false’.

1x9=9

(i)

Good money drives bad money out of circulation is called Gresham’s law.

(0)

(ii)

In perfect competition every firm is price maker and not price taker.

(0)

(iii)

All companies which have not been incorporated in India are foreign companies.

(0)

(iv)

Direct taxes lead to inflation.

(0)

(v)

Increase and decrease in demand is the same as expansion and contraction of demand.

(0)

(vi)

Product differentiation is the characteristic of monopolistic competition.

(0)

(vii)

Micro economics deals with behaviour of individual units.

(0)

(viii)

Under the law of variable proportions one factor is variable and others are fixed.

(0)

(ix)

Only physical capital is essential for production.

(0)

(d)

Define the following terms in not more than two lines:

1x6=6

(i)

Disguised unemployment;

(0)

(ii)

Marginal propensity to save;

(0)

(iii)

Positive Economics;

(0)

(iv)

Price Elasticity of Demand;

(0)

(v)

Price Discrimination;

(0)

(vi)

Deficit Financing.

(0)

Write short note on the following:

4x3=12

(a)

Resolutions requiring special notice;

(0)

(b)

Implicit cost;

(0)

(c)

Backward bending labour supply curve.

(0)

(a)

Discuss the role of NABARD in rural development.

(0)

(b)

What is limited liability partnership? Discuss its strengths and weaknesses.

(0)

What is taxable capacity? Explain the factors on which taxable capacity depends.

2+10

(0)

SECTION II (40 Marks)
Answer Question No.6 which is compulsory and any two from the rest.
Marks

SECTION II (40 Marks)

Answer Question No.6 which is compulsory and any two from the rest.

Marks

(a)

Answer the following :

1x6=6

(i)

A holding company can control

(A)	Only one subsidiary company
(B)	One or more subsidiary companies
(C)	Only three companies
(D)	Any number of companies

(0)

(ii)

A resolution requiring special notice is

(A)	Not an independent class of resolution
(B)	An independent class of resolution
(C)	A kind of ordinary resolution
(D)	None of the above

(0)

(iii)

Kinked demand curve is a characteristic of

(A)	Monopoly
(B)	Perfect competition
(C)	Monopolistic Competition
(D)	Oligopoly

(0)

(iv)

Balance of Trade comprises of

(A)	Exports
(B)	Imports
(C)	Exports and Imports
(D)	Any number of companies

(0)

(v)

Examples of statutory companies are

(A)	Reserve Bank of India
(B)	Damodar Valley Corporation
(C)	State Bank of India
(D)	All of the above

(0)

(vi)

Various objectives of business are

(A)	Economic objectives
(B)	Social objectives
(C)	Human objectives
(D)	All of the above

(0)

(b)

Fill in the blanks :

1x6=6

(i)

In capitalism the _________________ hand guides all human efforts.

(0)

(ii)

To control inflation interest rates should be ________________ by the banks.

(0)

(iii)

Inflation is unjust, deflation is inexpedient but of the two ______________ is worst.

(0)

(iv)

The deductive method proceeds from ______________ to the particular.

(0)

(v)

NNP = GNP − _____________

(0)

(vi)

The minimum number of members in a public company is _____________.

(0)

(c)

State whether the following are ‘True’ and which is ‘False’

1x6=6

(i)

Mild inflation is also bad for the economy.

(0)

(ii)

Now private limited companies can also get their securities listed on stock exchange.

(0)

(iii)

SEBI is not a market regulator.

(0)

(iv)

Centrally planned economies increase the competitive spirit.

(0)

(v)

One of the aspects of social environment is taxation.

(0)

(vi)

Liability clause is a part of Articles of association.

(0)

(d)

Define the following terms not more than two lines:

1x6=6

(i)

Special Resolution;

(0)

(ii)

Lame duck;

(0)

(iii)

EGM;

(0)

(iv)

Bonus shares;

(0)

(v)

Preliminary expenses;

(0)

(vi)

Consumer co-operatives.

(0)

(a)

A public limited company was incorporated on 30.12.2011. Give the latest date by which it should hold its first AGM.

(0)

(b)

There may be instances when a public limited company may not be required to hold its AGM neither in the year of incorporation nor in the following year, explain.

(0)

(a)

What is a special business?

(0)

(b)

There may be instances where a private limited company may have even more than 50 members. Illustrate.

(0)

(c)

"Foreign company is not a company". Discuss.

(0)

Write a letter to the Divisional Manager of the Insurance Company for sending its surveyor for assessment of loss caused to your company due to fire in your godown.

(0)

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