CWA/ICWA Foundation :: Economics and Business Fundamentals : June 2006

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) Economics is a
(A)Pure science
(B)Physical science
(C)Social science
(ii) Profit is
(A)a contractual income
(B)a certain income
(C)a mixed income
(iii) A regression tax is one where burden falls
(A)more on the rich
(B)more on the corporate sector
(C)more on the poor
(iv)  A firm under perfect competition
(A)earns only normal profits in long run
(B)earns super normal profits in long run
(C)may make losses in long run
(v) If demand is inelastic a rise in price
(A)makes no change in consumer expenditure
(B)increases consumer expenditure
(C)decreases consumer expenditure
1x5
(b) Fill in the blanks :
 
(i)________ economics deals with the analysis of small individual units of the economy.
(ii)Demand for inferior goods ________ with increase in income.
(iii)Creation of utility is called ________.
(iv)There is inverse relationship between value of money and _______.
(v)IFC is affiliated to the ________.
 1x5
(c) Define the following terms in not more than two sentences:
(i)
(ii)
(iii)
(iv)
(v)
(vi)		 Marginal propensity to save
Direct tax
Fiscal policy
Oligopoly
Quasi – rent
Inflation
1x6
2. Explain the law of diminishing marginal utility. What are the limitations of the law? 12+5
3. What do you understand by the term national income? How would you measure the national income of a country? What difficulties are involved in its measurement? 4+8+5
4. Define Central Banking. What are the functions of Central Banking? 5+12
5. Discuss (a) the canons of taxation,
            (b) function of N.A.B.A.R.D		 8+9
Please turn over
 

( 2 )

C-3(EBF)
Revised syllabus
Marks
SECTION II
Answer Question No. 6 which is compulsory and any two from the rest.
 
6. (a) Answer the following :
(i)  State enterprises are
(A)owned by the State
(B)controlled by the State
(C)owned, managed and controlled by the State
(ii) SEBI stands for
(A)Stock Exchange Board of India
(B)Securities Exchange Board of India
(C)Securities Earnings Board of India
(iii) OTC Exchange of India
(A)helps large corporations raise funds
(B)provides promoter’s contribution or seed capital
(C)offers small and medium sized companies access to a market as well as a chance to raise finance
(iv) Statutory meeting is a meeting
(A)convened once in the life of company
(B)convened once in a year
(C)convened as and when required
(v) Statutory meeting is a meeting
(A)Bank deposits
(B)Revaluation reserves
(C)Capital redemption reserves
1x5
(b) State which of the following statements are “True” and which are “False”: 1x5
(i)One share one vote is the principle governing co-operative type of organization.
(ii)Decoding is a process involved in communication.
(iii)Social responsibility is a way to demonstrate an organization concern for society.
(iv)Misstatements in prospectus lead to cancellation of listing.
(v)A proxy is entitled to speak in the meeting of a company.
(c) Define the following terms in not more than two sentences:
(i)Foreign company
(ii)Jobber
(iii)Special resolution
(iv)Minor as a partner
(v)Public utility organization
(vi)Listed securities
 1x6
7. Distinguish between
(a)Memorandum of Association and Articles of Association;
(b)Company limited by shares and Unlimited Companies.
 9+8
8. Define a Prospectus. Why and by whom is it issued? What are the usual contents of a Prospectus? 3+4+10
9. Explain the concept of Social Responsibility of a Business. 17
10. Write short notes on:
(a)Barrier to communication;
(b)Role of four animals in stock exchange;
(c)Board meetings;
(d)Registration of partnership.
 4+5+4+4

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