1

SAMPLE QUESTION PAPER - 01 (2023-24)

ECONOMICS (THEORY)

Maximum Marks: 80 Time: 3 hours

General instructions:
1. This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development
2. This paper contains 20 Multiple Choice Questions of 1 mark each.
3. This paper contains 4 Short Answer Questions of 3 marks each to be answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions of 4 marks each to be answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions of 6 marks each to be answered in 100 to 150 words.

SECTION A – MACRO ECONOMICS

1. What characterizes the connection between aggregate demand (AD) and aggregate supply (AS) that results in economic
equilibrium?
(a) AD < AS (b) AD > AS (c) AD = AS. (d) AD has no impact on AS.

2. The value of ____ can be greater than 1.

(a) Marginal propensity to consume. (b) Average propensity to consume
(c) Average propensity to save. (d) Marginal propensity to save.

3. Which factor primarily determines the exchange rate under a fixed exchange rate system?
(a) Supply and demand in the foreign exchange market
(b) Central bank intervention
(c) Government fiscal policy
(d) International trade agreements

4. What is the primary function of money in an economy?

(a) Storing value (b) Facilitating barter transactions
(c) Generating interest income (d) Promoting economic growth

5. Graphically, Aggregate Demand function can be obtained by vertically adding the _________ and _________ function.
(a) Consumption, saving (b) Consumption, investment
(c) Investment, saving (d) Aggregate supply, consumption.

6. What is the primary objective of the Monetary Policy Committee (MPC) in India?
(a) Maximizing bank profits (b) Controlling inflation and promoting economic growth
(c) Regulating foreign exchange rates (d) Managing government fiscal policies.

7. Suppose for a given economy,

S= -60 + 0.1Y
I= ₹ 4,000 crore
(Where S = Saving Function, Y = National Income and I = Investment Expenditure)
Equilibrium level of Income would be ₹ ______ crore.

8. What does the "current account" of the balance of payments primarily represent?
(a) Capital flows related to investments
(b) Exports and imports of goods and services
(c) Financial aid and grants received from foreign governments
(d) Foreign exchange rate fluctuations
Visit: www.toprankers.com or Call us at +91-7676564400 for Boards & CUET Courses and Free Counselling
 2
9. Which of the following is a part of normal resident of India?
(a) Indian official working in Indian embassy in USA
(b) Australian tourist staying for 5 days in India
(c) Indians staying for medical treatment in UK
(d) None of the above

10. In a floating exchange rate system, exchange rates are primarily determined by:
(a) Market forces of supply and demand (b) Government regulations and restrictions
(c) International treaties and agreements (d) Central bank interventions

11. Explain the leading functions of commercial banks?

12. On the basis of the given data, estimate the value of Domestic Income:
S. No. Items Amount (₹ in crore)
i. Household Consumption Expenditure 600
ii. Gross Fixed Capital Formation 200
iii. Change in stock 40
iv. Government Final Consumption Expenditure 200
v. Net Export (-)40
vi. Net Indirect Taxes 120
vii. Net Factor Income From Abroad 20

OR

B) State the meanings of the following:

(i) Externalities
(ii) Operating Surplus
(iii) Consumption goods

13. A) "In an economy, when ex-ante Aggregate Demand exceeds ex-ante Aggregate Supply, it is essential to explore the
potential consequences on output, income, and employment."
Discuss the potential effects of this imbalance on the levels of output, income, and employment.

OR

B) "In an effort to combat inflation, the Reserve Bank of India may encourage commercial banks to deposit their excess
funds with it."

Examine the reasoning behind the Reserve Bank of India's decision to take this measure

14. How does money overcome the problems of barter system?

15. In a fictional economy, the government decides to increase its investment expenditure by 50 crores. If the Marginal
Propensity to Consume (MPC) is 0.75, calculate the change in income resulting from this expenditure increase.

16. (A) Provide sound justifications for how the following would be accounted for when calculating domestic income:
(i) The payment made by an American tourist for goods bought in India.
(ii) Tomatoes cultivated by Ms. Pooja in her personal garden.

OR

(B) "A machine acquired by a company is invariably categorized as a capital asset." Do you concur with this assertion?
Support your response with cogent rationales.

Visit: www.toprankers.com or Call us at +91-7676564400 for Boards & CUET Courses and Free Counselling
 3
17. A) Based on the provided data, compute the following values:
(i) Fiscal deficit
(ii) Primary deficit
Given information for the fiscal year 2021-22 (in ₹in crore):
(i) Revenue Receipts: ₹25 crore
(ii) Capital Expenditure: ₹18 crore
(iii) Revenue Deficit: ₹12 crore
(iv) Non-debt creating capital receipts: 60% of revenue receipts
(v) Interest Payments: ₹5 crore
B) State any two features of public goods.

OR

C) What is a balanced government budget? Explain any two multiplier effect of a balanced budget.
D) Explain the objectives of resource allocation and income distribution in a government budget.

SECTION B – INDIAN ECONOMIC DEVELOPMENT

18. Determine the accurate pairing of the 'Objectives of Indian Five Year Plans.
(a) Growth, Equality, Modernisation, Self-Reliance
(b) Development, Equality, Modernization, Sustainability
(c) Good Health, Education, Modernization, Sustainability
(d) Growth, Equity, Modernization, Self-Reliance

19. What was the primary goal of Indian Five Year Plans during the period from 1950 to 1990?
(a) Achieving self-sufficiency in food production
(b) Promoting rapid industrialization
(c) Expanding the service sector
(d) Enhancing international trade

20. Micro credit programmes play a vital role in ensuring an overall development of the rural economy as they____________.

(i) provide financial support

(ii) Lead to women empowerment
(iii) Enhance the reach of formal credit system.
Alternatives:
(a) (i) and (ii) (b) (ii) and (iii) (c) (i) and (iii) (d) (i), (ii) and (iii)

21. What is the poverty line based on in India?

(a) International income standards
(b) Average expenditure on food
(c) Average expenditure on non-food items
(d) Per capita income of the country

22. _______may is defined as the measure of the extent of demographic participation in the social and political decision
making.
(a) Economic indicator (b) Liberty indicator
(c) Health indicator (d) Demographic indicator

23. New agricultural strategy was also known as?

(a) White revolution (b) Agricultural revolution
(c) Green revolution (d) Land revolution

24. Which agency in India is responsible for implementing the Mid-Day Meal Scheme to promote human capital formation
among schoolchildren?
(a) Ministry of Health and Family Welfare (b) Ministry of Education
(c) Ministry of Women and Child Development (d) Ministry of Rural Development

Visit: www.toprankers.com or Call us at +91-7676564400 for Boards & CUET Courses and Free Counselling
 4
25. What is the significance of Gross Enrollment Ratio (GER) in the context of human capital formation?
(a) It measures the proportion of children attending primary school.
(b) It assesses the percentage of the population with access to healthcare.
(c) It indicates the percentage of eligible students enrolled in higher education.
(d) It quantifies the labor force participation rate.

26. Read the following statements carefully:

Statement 1: The nature of unemployment problem in India is uni-faceted.
Statement 2: Worker-Population ratio is an indicator used for analyzing the employment situation in a country.
In light of the given statements, choose the correct alternative from the following:
(a) Statement 1 is true and Statement 2 is false.
(b) Statement 1 is false and Statement 2 is true.
(c) Both Statements 1 and 2 are false.
(d) Both Statements 1 and 2 are true.

27. When the price index increases, what does it imply?

(a) Value of currency increases
(b) No effect on value of currency
(c) Value of currency decreases
(d) None of these

28. The Zamindari system of land settlement was responsible for the stagnation of Indian agriculture. Explain.

OR

Explain the various systems of collecting land revenue prevalent under the British rule.

29. Why calorie based norm is not adequate to identify the poor?

30. Discuss briefly the meaning of economic reforms. Explain the main economic reforms.

31. a) Explain how infrastructure impacts productivity and induces investment?

b) Green revolution transformed India from a subsistent food grain economy to a food surplus economy.” Justify the
statement, giving reasons in support of your answer

OR

c) "In India, significant land reforms were implemented extensively following the year 1947."
Please choose one of these land reforms for discussion based on the provided statement."
d) Differentiate between social and economic infrastructure.

32. Write a brief note on SAARC.

33. Since independence, the government has been playing an important role in generating employment directly or
indirectly.” Discuss in detail.

34. Direction: Read the following hypothetical text and answer the given questions: Infrastructure is often called as the
lifeline of the economy of a nation. It comprises of a well established and well knit network of power, telecom, ports,
airports, roads, civil aviation, railways and road transport in a country. Countries need adequate infrastructure so that
various economic activities in an economy are executed efficiently, smoothly and above all in time. The deficiencies in
the of infrastructural needs of a nation cannot be made up through imports rather the best approach is that it must be
created within the domestic economy to put it on through the higher growth trajectory. However, building of
infrastructure requires large and lumpy investment and has a relatively long gestation period. Due to this fact,
infrastructural facilities are either built or run by the government and public sector enterprises and if private sector is
permitted to make investment and run infrastructural projects, they must be regulated in order to ensure quality
infrastructure to one and all in the society.

Visit: www.toprankers.com or Call us at +91-7676564400 for Boards & CUET Courses and Free Counselling
 5

I. Identify the main category of infrastructure mentioned in the above paragraph.

(choose the correct alternative)
(a) Social (b) Economic (c) Personal (d) Financial

II. The demand-supply gap of major infrastructural facility like power, transport can be met through__________ (fill up the
blank with correct answer)

III. State whether the given statement is true or false: ‘Infrastructure is often called as the lifeline of the economy of a
country, as it helps in increasing the productivity of the factors of production and enhancing the quality of life’.

IV. State reasons as to why infrastructural facilities are mainly built or run by the government and public sector
enterprises?

Visit: www.toprankers.com or Call us at +91-7676564400 for Boards & CUET Courses and Free Counselling