ECONOMICS (030)

3 marks should be answered in 60 to 80 words

4 marks should be answered in 80 to 100
words
6 marks should be answered in 100 to 150 words

Q.No. Answer Split up Total

SECTION – A- MACRO ECONOMICS

1 d) Option a) and c) 1 1

2 b) ₹3,200 crores 1 1

3 a) 1 1

OR

d) Resources are fully and efficiently utilized.

4 0.2 1 1

OR

d) D-(iv)

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

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

7 d) Statement 2 is true and Statement 1 is false 1 1

8 b) Net exports 1 1

9 a) Both the statements are true. 1 1

10 a) Stock, Flow 1 1

OR

₹240 crores

11 Limitation of using GDP as an indicator of welfare of a country are as

follows

1. Inflation
2. GDP ignores externalities 1
3. GDP disregards income pattern 1
(or any three limitation)
1 3
12 A) 40 + 0.8Y 1
B) 5
C) ₹200 crores 1
OR 1 3
Investment multiplier refers to the concept that any increase in investment 1
spending has a more than proportionate positive impact on income
1
MPC = 0.1
 MPS = 0.9 1

13 Loans are children of deposit and deposits are children of loans. It means
deposits are the results of loan activities of a bank and loans are given
after the deposit in the bank. This is the most important function of
commercial bank , credit creation 4 4
OR

It is the important function of Central Bank

As a banker to the government: as a banker, the central bank performs

banking functions for the government by accepting the government
deposits and granting loans to the government.

As an advisor to the government : as an advisor , the central bank gives 2

advice to the government regarding economic policy matters, money
market , capital market and government loans.
2 4

14 The central bank needs to intervene in this system 2

In order to restrict the fluctuations in the exchange rate within certain 2 4

limits

15
No, trade deficit occurs when value of goods/ visibles imported is more than
the value of goods / visibles exported.

Trade deficit = Value of imports – Value of exports.

Trade deficit is only one of the four components of current account. So even
though there is a trade deficit there can be a surplus in other 3 components
which will ultimately lead to surplus in current account.

16 A. 1.Stabilization policy is a strategy enacted by the government 1

to maintain a healthy level of economic growth
2. Fiscal policy can do this by increasing or decreasing
aggregate demand 1
3. To smooth out the business

cycle (0r any relevant three 1 3

answers ) 1
B. 1.It shows fiscal policy of the government 1
2. Government approach to allocation of resources in the country
1 3
3. Correct the situation of inflationary / deflationary gap
6
(0r any relevant three answers )
17 Formula 1
Calculation
1
GDPfc = ₹1.300 crores
Formula 1 3
Calculation
Factor income to abroad = ₹80 crores 1
OR 1
A. It helps to distribute resources, keeping in view the social and economic
advantages of the country. The factors that influence the allocation of 1 3
resources are:
Allowance or Tax concessions 6
Direct production of goods and services Minimize
inequalities in income and wealth Economic stability
Manage public enterprises
Economic growth.
Decrease regional differences (
Or any relevant answer)
B. Government expenditure on various heads such as defense, 3
administration, infrastructure, education, and health care, etc. affects
the lives of the citizens and overall economy. Also, the budget is
important because Governments use it as a medium for implementing
economic policies in the country.
( Or any relevant answer)
3 6

SECTION – B – INDIAN ECONOMIC DEVELOPMENT

18 b) A-(ii);B-(iv);C-(i);D-(ii) 1 1

19 b) It leads to economic growth 1 1

or
c)
20 c) iv, I, ii, iii 1 1

OR

c)Pakistan

21 b)China 1 1

22 b)Both Assertion (A) and Reason (R) are true and Reason (R) is not the 1 1
correct explanation of Assertion (A).

23 b)Both Assertion (A) and Reason (R) are true and Reason (R) is not the 1 1
correct explanation of Assertion (A).

24 d)Various systems of land settlement 1 1

25 c) I, ii, iii 1 1

26 a)Both the statements are true. 1 1

27 a)Prashant Chandra Mahalanobis 1 1

28 Cause – Zamindari system 1

Explanation - 2 3
29 A. Overuse of environmental resources 1.5
1. Excess use of electricity leads to depletion of resources like coal
and water
2. Excess use of petrol and diesel in vehicles.
(or any two relevant instances of overuse )

B. Misuse of environmental resources

1. Soil degradation due to improper use of fertilizers
2. Drying up of rivers due to supply of water from them to
dams and reservoirs. 1.5
( or any two relevant instances of misuse) 3
OR
Environment performs four functions: supplies resources,
3
assimilates wastes, sustains life by providing genetic and
bio diversity and provides aesthetic services. 3

30 Growth of rural economy depends on timely infusion of capital. Credit in 2

rural areas is required:

1. To meet certain expenses because the gestation period between

crop sowing and realization of income after production is too long.
2. To invest in seeds, manure and fertilizers. Non-farm sectors such
as cottage and small scale industries also require capital.
3. For rural people for self-employment.

The sources of credit in rural system are:

1. Non institutional sources: Money lenders, friends, relatives and

land owners.
2. Institutional sources: National Bank for Agriculture and Rural
Development (NABARD), Self Help Groups (SHGs), Regional
Rural Banks, Commercial Banks, Co-operative Banks, Co-
operative Financing societies. 2
OR
Both growth and equity are the two important aspects of India’s five year
plans. While growth refers to the increase in GDP over a long period of
time equity refers to an equitable distribution of GDP so that the benefits
due to higher economic growth are shared by all sections of population.
Equity implies social justice. Growth itself is desirable but growth in itself
does not guarantee the welfare of people. Growth is assessed by the
market value of goods and services (GDP) and it may be possible that the
goods and services that are produced may not benefit the majority of 4
population. In other words, only a few with high level of living and money
income may get the share of GDP. Hence, growth with equity is a rational
and desirable objective of planning. This objective ensures that the benefits
of high growth are shared by all the people equally and, hence, this not
only leads to reduction of inequality of income, poverty promotion of
egalitarian society but also enables everyone to be self-reliant. Therefore,
to conclude, it can be said that growth with equity is the most important
objective of an economic planning.

4 4
31 Comparison should be done on 1x4

Population

Density of population

Growth of population

Sex ratio

Fertility rate 4

Urbanization

(Any four)

32 No, employment generated in the country does not commensurate with 1

the growth of GDP in India because India has experienced Jobless growth
1
in the last 50-60 years.
2 4
Causes of jobless growth -

33 The goals of Five Years Plan

1. Growth
2. Modernization
3. Self-reliance 1x6
4. Equity
5. Full employment
6. Rising investment income ratio 6
OR

Meaning of Agricultural marketing

Marketing Prior to independence

Steps –
1
Transparent marketing conditions
1
Physical infrastructure facilities
4
Cooperative marketing

MSP

Buffer stock
6
PDS

34 A. 1. Unstable government, 2. Homegrown Terror Groups or Ailing 2

Economy
B. 1.India GDP has consistently stayed higher
2. India is today the fastest growing Trillian-dollar economy in the world 4
th th
3. It jumped from 9 spot in 2010 to the 5 spot in a spam of just 9
years

4. India’s GDP has risen almost 140 percent

5. the GDP of India is almost 10 times that of Pakistan

6