CWA/ICWA Foundation :: Economics and Business Fundamentals: Decmber 2004

C-3(EBF)
Revised Syllabus

Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks.
SECTION I (50 marks)
Answer Question No. 1 which is compulsory and any two from the rest.
Marks
1. (a) Answer the following:
(i) The difference between gross national income and gross domestic product is
(a)Net factor income from abroad
(b)Indirect taxes and subsidies;
(c)Depreciation;
(d)Invisible items.
(ii) Gross elasticity of demand is a measure of
(a)Consumer responsiveness to income
(b)Consumer responsiveness to proces of related goods;
(c)Consumer responsiveness to taxes;
(d)Consumer responsiveness to advertisement.
(iii) Invisible items are included in
(a)Balance of trade account;
(b)Balance of payment account;
(c)Official reserves account;
(d)Reserve Bank of India's account.
(iv) Value of money changes
(a)In direct proportion to money supply;
(b)In inverse proportion to money supply;
(c)In accordence with change in bank rate;
(d)In proportion to savings and investement.
4
(b) Fill in the blanks:
(i)_________ economics deals with the analysis of individual units of an economy.
(ii)_________ has no cost of production though it is an agent of production.
(iii)_________ is determined by the force of total demand and supply.
(iv)A central bank has the monopoly of _________.
(v)In a mixed economy we find some elements of ________ and elements of _________.
 6
(c) Define the following in one sentence:
(i)Disguised unemployment;
(ii)Human capital;
(iii)Marginal propensity to consumer;
(iv)Administered peices.
 6
2. Explain how price is determined under perfect competion. Illustrate your answer diagrammatically. 12+5
3. (a) Define central bank. How does it differ from commertial bank? 3+6=9
(b) Discuss the function of the NABARD. 8
4. (a) What do you understand by the term National Income? 5
(b) How would you measure the National Income of a country? 12
5. (a) What are the causes of inflation? 5
(b) What are its effects? 6
(c) How would you control it? 6
Please turn over

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C-3(EBF)
Revised syllabus
 		 Marks
SECTION II (50 marks)
AnswerQuestion No. 6 which is compulsory and any two from the rest
 
6. (a) Answer the following:
(i)  Economic environment includes
(a)Customs and traditions;
(b)Foreign trade and prices;
(c)Government regulations on services;
(d)Constitutional right and duties.
(ii)  Semantic barriers to communication refer to
(a)Receiver misinterpreting the symbols used by sender;
(b)Sender misusing the symbols;
(c)Receiver clarifying the symbol with sender;
(d)Receiver not being able to decode the symbol sent by sender.
(iii)  Obligation of a business towards society is
(a)Socio-economic obligations;
(b)Socio-lrgal obligations;
(c)Socio-political obligations;
(d)Socio-medical obligations.
(iv)  Limited liability means
(a)A firm canot borrow beyond a legal limit;
(b)Liability of the chairman is alone limited;
(c)Liability of all the partners is limited;
(d)Liability of all the shareholders is limited.
4
(b) State which of the following statements are "True" and which are "False".
(i)  Like a joint stock company, a co-operative society is also treated as an independent legal entity.
(ii)  Memorandum of association explains the relation ship between company and employees.
(iii)  Class meetings are arranged for bringing out a change in the rights and privileges of preference shareholders and to take them into confidence.
(iv)  A notice and a report are the same thing in the eye of law
4
(c) Define the following in one or two sentences:
(i)
(ii)
(iii)
(iv)		  A sleeping partner;
 A foreign company;
 A tejiwalla;
 Decoding and understading the message.
6
(d) Fill in the gaps of the following:
(i)
(ii)
(iii)
(iv)		  The agreement for running a partnership business is for_________.
 Without requisite________ a meeting Cannot be held.
 Debentureholders are really _________ of the company.
 Decoding and understading the message.
4
7. Distinguish beteen: 8+8
  (a) A co-operative organisation and a joint stock company
(b) Certificate of incorporation and certificate to commence business.
8. (a) Who is a promoter of a company? Is he a trustee of a company? 2+6=8
(b) What is meant by "Listing of Secrities" in a stock exchange? Explain its significance to investors. 4+4=8
9. (a) What is an Extra Ordinary General Meeting? Mention five usual business that are conducted at such meetings. 7+5=12
(b) What are public utility services? 4
10. (a) Explain the importance of communication in business. 8
(b) What are the 5 important "C's" in a business letter? 8

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