ECONOMICS PREBOARD MS

2022-23
MM-80

1
Answer- d) resources are fully and efficiently utilized 1

2 Answer :(c) Flexible exchange rate system – (iii) Exchange rate determined by the
market forces of demand and supply of foreign exchange. 1

3 a 1

4 d. Assertion (A) is false but Reason (R) is true. 1

5 d. Both statements 1 and 2 are false

1
OR

a) Intermediate
b) Final

6 D1

OR
a. There is inverse relationship between MPS and multiplier

7 Ans.(d) Central bank- (iv) Provides ‘clearing house’ Facility 1

8 b)Both the statements are correct and reason is also correct.

OR

d. Accommodating Transactions 1

9 Assertion (A) is false but Reason (R) is true. 1

10 Both Assertion (A) and Reason (R) are true and Reason (R) is the correct 1
explanation of Assertion (A).
11 VALUE ADDED BY FIRM A=165 Lakhs
VALUE ADDED BY FIRM B=390 Lakhs 3
GDP fc=465 Lakhs

12 Under this system, central banks intervene to buy and sell foreign currency in 3
an attempt to moderate exchange rate movements whenever they feel that such
actions are appropriate. Official reserve transactions are, therefore, not equal 3
to zero.so, the statement is false
OR
Imports falls (to be explained)

13 AD= A + bY

b=1-mps
= 1-0.2
0.8
AD= 50+ 0.8(300)
= 50+ 240
= 290 crore.

14 a diagram with explanation 2

b The situation suggests that Aggregate Demand is less than Aggregate
Supply. Following two fiscal measures may be taken to control it:
Decrease in Taxes - To curb the situation, the government may decrease the
taxes. This may increase the purchasing power in the hands of the general
public. This may increase the Aggregate Demand in the economy to bring it
equal to the Aggregate Supply.
Increase in Government Expenditure - The government may also increase
its expenditure. This may increase the purchasing power in the hands of the
general public which in turn may increase the Aggregate Demand in the
economy to bring it equal to the Aggregate

15 Credit controller function of the Central Bank (to be explained) 4

OR

LRR is the minimum reserves that a commercial bank must maintain as per the
instructions of central bank.

Credit creation is inversely related to LRR.

For eg., Suppose LRR is 0.2 and initial deposits are 10,000. Total credit
 creation = Initial deposits x 1/ LRR = 10,000 x 1/ 0.5 = 10000 x 2 = 20000.

So any increase in LRR will decrease the credit creation power of the
commercial banks.

16 A) For making inter- temporal comparisons of GDP growth rate, a nation should always 2,4
take nominal GDP into consideration”. We refute the given statement as real GDP i.e
GDP measured at base year prices gives true picture of growth story since it rises only
when there is actual increase in production of goods and services and vice-versa.
B) “Salaries paid by Indian embassy in Japan to Japanese for rendering his/her services
to the embassy”
Included in domestic income of India as income is generated in our domestic
territory.
Not included in national income of India as income is not earned by our normal
resident and factor income is paid to abroad.

II Net Domestic Product at Factor Cost (NDPFC)

= Compensation of Employees + Rent + Interest + Profit + Mixed Income of Self-
Employed
= 3,000 + 600 + 700 + 1,000 + 8,000 = ` 13,300 crores
Net National Product at Market Price (NNPMP)
= NDPFC – Net Factor Income to Abroad + Net Indirect Taxes = 13,300 – 60 + 500
= ` 13,740 crores

17
Public Goods Private Goods 6
These goods are generally provided by the These goods are sold and purchased between
government. individual consumers and producers.
These goods cannot be provided through These goods are provided through market
market mechanism mechanism.
Eg.Nationaldefence,roads,government Eg.Clothes, cars, food items etc
administration etc

fiscal DFiscal deficit=500 CRORE

OR

A. Two components of revenue budget are Revenue Receipts and Revenue

Expenditure:
Revenue Receipts Revenue Expenditure
 They neither create any liability They neither create any asset nor
nor reduce any asset of the reduce any liability of the
government government
Eg. Taxes (GST),Non Eg.Salary,interest,pensionetc
Taxes(Interest,Dividend)
B Government budget can be used as an effective tool to pull the economy out of
recessionary tendencies. This function is known as Stabilisation function.
An economy may suffer from prolonged periods of unemployment or inflation. The overall
level of employment and prices in the economy depends upon the level of aggregate
demand which depends upon spending by people as well as government. The expenditures
can be influenced by taxation and expenditure policy of government.
During deflation/recession,government can increase its own expenditure and reduce tax
rates to increase the money supply and aggregate demand in the economy.

INDIAN ECONOMY
18 c ii,i,iv,iii

1
19 c) 1D, 2A, 3B, 4C
1
OR

d) All of these.

1
20 Answer: D (iv) 1

OR
Answer:b,c,d,e,a

21 D UzhavarSandies are one of the alternative marketing channels found in

Andhra Pradesh.

1
22 d 1

23 c. Both statements 1 and 2 are true 1

24 b 1
 25 d) All of the above 1

26 (b) the owner of textile shop employing nine workers.

27 D foreign investors.
OR
C Pakistan
1
28 Strategies- 3
1 use of non conventional source of energy
2 Solar Power through Photovoltaic Cells:
3 Any relevant point from picture.

29 a) During the period 1972-2016, the proportion of self employed declined from 3
61.4% in 1972-73 to 46% in 2015-16.
 The proportion of casual wage workers has increased from 23.2% to 33%
during the same period. 3
 The share of regular workers marginally increased from 15.4% in 1972 –
73 to 21% in 2015 – 16.
 This clearly shows the movement of workers from self employment to
casual wage workers. This process is called casualization of
workforce. (data optional)
b) Jobless growth is that situation when economic growth taken place but job
opportunities increase at a low rate. Jobless growth should be avoided to reduce
poverty because greater the level of employment will lead to more income and
growth for the economy. In job opportunities along with economic growth is the
ultimate solution tothe problem of poverty in India.

Or

Rapid expansion of the banking system had positive effect on rural farm and non-
farm output, income and employment. In spite of it, following problems have been
faced in the rural banking such as-
 The volume of rural credit in the country is still insufficient in comparison
to its demand and institutional sources have failed to cover the entire rural
farmers of the country.
 Less attention has been given on the credit requirements of needy (small
and marginal farmers) and the problem of overdue in agricultural credit
continues.
30 Compare and contrast the given data of India’s , Pakistan’s and China’s sectorial
contribution towards GDP.

31 The various land reforms implemented in the agricultural sector in India were:
4
(A) abolition of intermediaries mean that some 200 lakh tenants came into direct
contact with the govt - they were thus freed from being exploited by the
Zamindars.

However, in some areas, the former Zamindars continue to own large areas of
land by making use of some loopholes in the legislation. So the goal was not
fully served by abolition of Zamindars.

(B) the ownership conferred on tenants gave them the incentive to increase
output and this contributed to growth in agriculture. However there were cases
where tenants were evicted landowners came to be actual tillers, claiming
ownership of the land.

And even the tillers got ownership of land, the poorest of agriculture labourers
(such as sharecroppers and landless labourers) did not benefit from land reforms.

(c) The land ceiling legislation also faced hurdles. The big landlords challenged
the legislation in courts, delaying its implementation. They

used this delay to register their lands in the name of close relatives, thereby
escaping from the legislation. Legislation also had loopholes which were
exploited by the big landholders to retain their land.

(D) land reforms were successful in Kerala and West Bengal because these
states had governments committed to the policy of ‘ land to the tiller’.
Unfortunately other states did not have same level of commitment and vast
inequality in land holding continues

OR
Yes the above statement is correct. The objective of Atmanirbhar Bharat is to
make India self-reliant. It develops the spirit of innovation and
entrepreneurship among the citizens of India. It reduces the dependence on
foreign companies and on foreign products. The major slogan is vocal for
local that means we should manufacture and consume Indian products only.
We should make our manufactured product very competitive so that it beats
the foreign competition. The five pillars of Atmanirbhar Bharat is to focuse on
economy, infrastructure, system, vibrant demography and deman
32 Yes i agree to the given statement.
 4
(Any four relevant point of explanation)
33 False, Diversification towards livestock, fisheries etc decreases the risk of losing 2
income in primary sector. As it gives more options to people living I rural areas 2
to develop. 2
b)True , A computer operator in the state government office working on
temporary basis is categorized as formal sector worker.
c) True as it is part of expenditure on health, so source of human expenditure.

34 Industrial sector reforms to be explained. 3

Trade and Investment reforms to be explained. 3