Bhagya

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TN State Board 12th Economics Model Question Paper 3 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 3.00 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions: [20 x 1 = 20]

Question 1.
The branches of the subject Economics is………….
(a) Wealth and welfare
(b) production and consumption
(c) Demand and supply
(d) micro and macro
Answer:
(d) micro and macro

Question 2.
………. is another name for economics.
(a) Political economy
(b) Socialist economy
(c) Capitalist economy
(d) Planned economy
Answer:
(a) Political economy

Question 3.
Income method is measured by summing up of all forms of…………
(a) Revenue
(b) Taxes
(c) expenditure
(d) Income
Answer:
(d) Income

Question 4.
Match the following and choose the correct answer by using codes given below:

Code:

Answer:
(d) A-3, B-4, C-1, D-2+

Question 5.
According to classical theory, rate of interest is a reward for………..
(a) Investment
(b) Demand
(c) Capital
(d) Saving
Answer:
(d) Saving

Question 6.
Which of the following is not correctly matched:
(a) Say’s law of Market – Classical theory of Employment
(b) Adam Smith – Wealth of nations
(c) Keynes – The General theory of Employment, Interest and Money
(d) A.C. Pigou – French Economist
Answer:
(d) A.C. Pigou – French Economist

Question 7.
When investment is assumed autonomous the slope of the AD schedule is determined by the…………
(a) marginal propensity to invest
(b) disposable income .
(c) marginal propensity to consume
(d) average propensity to consume
Answer:
(c) marginal propensity to consume

Question 8.
Which of the following is correctly matched:
(a) J.M. Clark – Ceteris Paribus
(b) J.M. Keynes – Psychological law of consumption
(c) R.F. Khan – Accelerator model
(d) Duesenberry – Laissez-faire
Answer:
(b) J.M. Keynes – Psychological law of consumption

Question 9.
The basic distinction between M₁ and M₂ is with regard to…………..
(a) post office deposits
(b) time deposits of banks
(c) saving deposits of banks
(d) currency
Answer:
(b) time deposits of banks

Question 10.
Match the following and choose the correct answer by using codes given below:

Code:

Answer:
(a) A-1, B-2, C-3, D-4

Question 11.
Repo Rate meAnswer:…………
(a) Rate at which the Commercial Banks are willing to lend to RBI
(b) Rate at which the RBI is willing to lend to commercial banks
(c) Exchange rate of the foreign bank
(d) Growth rate of the economy
Answer:
(b) Rate at which the RBI is willing to lend to commercial banks.

Question 12.
Lowering the Bank rate off sets……….. tendencies.
(a) Deflationary
(b) Inflationary
(c) Stagflationary
(d) Hyper inflationary
Answer:
(a) Deflationary

Question 13.
Which of the following is a modem theory of international trade?
(a) absolute cost
(b) comparative cost
(c) Factor endowment theory
(d) none of these
Answer:
(c) Factor endowment theory

Question 14.
The headquarters of ASEAN is ……………..
(a) Jaharta
(b) New Delhi
(c) Colombo
(d) Tokyo
Answer:
(a) Jaharta

Question 15.
Which of the following is correctly matched
(a) Objectives of IMF – To promote textiles
(b) Functions of IMF – Exchange stability
(c) Facilities offered by IMF – Basic Debit Facility
(d) Achievements of IMF – Country discipline and co-operation
Answer:
(b) Functions of IMF – Exchange stability

Question 16.
………. refers to Government spending incurred by central, state, local government of a country.
(a) Public Finance
(b) Public Expenditure
(c) Public Revenue
(d) Social Welfare
Answer:
(b) Public Expenditure

Question 17.
Which of the following is the anticipated effect of Global wanning?
(a) Rising sea levels
(b) Changing precipitation
(c) Expansion of deserts
(d) All of the above
Answer:
(a) Rising sea levels

Question 18.
………… the state is all powerful in preparation and implementation of the plan.
(a) Centralized planning
(b) Planning by direction
(c) Indicative planning
(d) Imperative planning
Answer:
(d) Imperative planning

Question 19.
State whether the statements are true or false.
(i) Economic development was redefined in terms of reduction of poverty, inequality and unemployment with in the context of a growing economy.
(ii) New welfare oriented approach is “Redistribution with growth”.
(a) Both (i) and (ii) are true
(b) Both (i) and (ii) are false
(c) (i) is true but (ii) is false
(d) (0 is false but (ii) is true
Answer:
(a) Both (i) and (ii) are true

Question 20.
Assertion (A): Ronald Fisher introduced the concept of Standard Deviation.
Reason (R): Standard Deviation is one of the methods of Absolute measure of dispersion.
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’
(b) Both ‘A’ and ‘R’ are true but ‘R’ is not the correct explanation to ‘A’
(c) ‘A’ is true but ‘R’ is false
(d) ‘A’ is false but ‘R’ is true
Answer:
(d) ‘A’ is false but ‘R’ is true

PART – II

Answer any seven question in which Question No. 30 is compulsory. [7 x 2 = 14]

Question 21.
Define Mixed Economy (or) Mixedism.
Answer:
In a mixed economy system both private and public sectors co-exist and work together towards economic development. It is a combination of both capitalism and socialism. It tends to eliminate the evils of both capitalism and socialism.

In these economies, resources are owned by individuals and the government. India, England, France and Brazil are the examples of mixed economy.

Question 22.
Explain briefly NNP at factor cost.
Answer:
Net National Product refers to the value of the net output of the economy during the year. NNP is obtained by deducting the value of depreciation, or replacement allowance of the capital assets from the GNP. It is expressed as,
NNP = GNP – depreciation allowance.

Question 23.
Write the types of unemployment.
Answer:
Types of unemployment:

1. Cyclical Unemployment
2. Seasonal Unemployment
3. Frictional Unemployment
4. Educated Unemployment
5. Technical Unemployment
6. Structural Unemployment
7. Disguised Unemployment

Question 24.
Define marginal propensity to consume (MPC).
Answer:
Marginal Propensity to Consume:
The marginal propensity to consume may be defined as the ratio of the change in the consumption to the change in income. Algebraically it may be expressed as under:
MPC = \(\frac{ΔC}{ΔY}\)
Where, ΔC = Change in Consumption; ΔY = Change in Income
MPC is positive but less than unity, 0 < \(\frac{ΔC}{ΔY}\) < 1

Question 25.
What is gold standard?
Answer:
Gold Standard is a system in which the value of the monetary unit or the standard currency is directly linked with gold. The monetary unit is defined in terms of a certain weight of gold. The purchasing power of a unit of money is maintained equal to the value of a fixed weight of gold.

Question 26.
Define international trade.
Answer:
International Trade refers to the trade or exchange of goods and services between two or more countries. In other words, it is a trade among different countries or trade across political boundaries. It is also called as ‘external trade’ or ‘foreign trade’ or ‘inter-regional trade’.

Question 27.
Write the ‘ASEAN’ member of countries.
Answer:
ASEAN was established on 8 August 1967 in Bangkok by the five original member countries: Indonesia, Malaysia, Philippines, Singapore and Thailand.

Question 28.
What is public revenue?
Answer:
Public Revenue: Public revenue deals with the methods of raising public revenue such as tax and non-tax, the principles of taxation, rates of taxation, impact, incidence and shifting of taxes and their effects.

Question 29.
Define Global warming.
Answer:
Global warming is the current increase in temperature of the Earth’s surface (both land and water) as well as its atmosphere. Average temperatures around the world have risen by 0.75°C (1.4°F) over the last 100 years. About two thirds of this increase has occurred since 1975. Carbon dioxide, methane, Chlorofluoro Carbon, nitrous oxides are the green house gases warming the earth’s surface. So it is also called green house effect. The CO₂ is the most important of the green house gases contributing to 50% of global warming. Global warming adversely affects agriculture, horticulture and eco system.

Question 30.
Define economic development.
Answer:
Economic development refers to the problems of underdeveloped countries and economic growth to those of developed countries. Economic development deals with the problems of UDCs. Change is discontinuous and spontaneous.

Economic development is not determined by any single factor. Economic development depends on Economic, Social, Political and Religious factors.

PART – III

Answer any seven question in which Question No. 40 is compulsory. [7 x 3 = 21]

Question 31.
Indicates the Merits of Socialism.
Answer:

1. Reduction in Inequalities: No one is allowed to own and use private property to exploit others.
2. Rational Allocation of Resources: The central planning authority allocates the resources in a planned manner. Wastages are minimised and investments are made in a pre planned manner.
3. Absence of Class Conflicts: As inequalities are minimum, there is no conflict between rich and poor class. Society functions in a harmonious manner.
4. End of Trade Cycles: Planning authority takes control over production and distribution of goods and services. Therefore, economic fluctuations can be avoided.
5. Promotes Social Welfare: Absence of exploitation, reduction in economic inequalities, avoidance of trade cycles and increase in productive efficiency help to promote social welfare.

Question 32.
Write the statistical problems.
Answer:
The following are the some of the statistical problems:

1. Accurate and reliable data are not adequate, as farm output in the subsistence sector is not completely
2. informed. In animal husbandry, there are no authentic production data available.
3. Different languages, customs, etc., also create problems in computing estimates.
4. People in India are indifferent to the official inquiries. They are in most cases non-cooperative also.
5. Most of the statistical staff are untrained and inefficient.

Question 33.
What do you mean by propensity to consume?
Answer:
The consumption function or propensity to consume refers to income consumption relationship. It is a “functional relationship between two aggregates viz., total consumption and gross national income.”
Symbolically, the relationship is represented as C = f (Y)
Where, C = Consumption; Y Income; f = Function

Thus the consumption function indicates a functional relationship between C and Y, where C is the dependent variable and Y is the independent variable, i.e., C is determined by Y. This relationship is based on the ceteris paribus (other things being same) assumption, as only income consumption relationship is considered and all possible influences on consumption are held constant.

Question 34.
Explain Demand-pull and Cost push inflation.
Answer:
Demand-Pull Vs Cost-Push inflation:
(i) Demand-Pull Inflation: Demand and supply play a crucial role in deciding the inflation levels in the society at all points of time. For instance, if the demand is high for a product and supply is low, the price of the products increases.

(ii) Cost-Push Inflation: When the cost of raw materials and other inputsrises inflation results. Increase in wages paid to labour also leads to inflation.

Question 35.
Give a brief note on NBFI.
Answer:
Non-Banking Financial Institution (NBFI):

A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by the central bank.

The NBFIs do not carry on pure banking business, but they will carry on other financial transactions. They receive deposits and give loans: They mobilize people’s savings and use the funds to finance expenditure on investment activities. In short, they are institutions which undertake borrowing and lending. They operate in both the money and the capital markets.

NBFIs can be broadly classified into two categories. Viz.., (1) Stock Exchange; and (2) Other Financial institutions. Under the latter category comes Finance Companies, Finance Corporations, ChitFunds, Building Societies, Issue Houses, Investment Trusts and Unit Trusts and Insurance Companies.

Question 36.
What are import quotas?
Answer:
Import Control: Imports may be controlled by:

1. imposing or enhancing import duties
2. restricting imports through import quotas
3. licensing and even prohibiting altogether the import of certain non-essential items. But this would encourage smuggling.

Question 37.
Mention the objectives of ASEAN.
Answer:
Objectives of ASEAN:
The ASEAN Declaration states the aims and purposes of the Association as:

1. To accelerate the economic growth, social progress and cultural development in the region;
2. To promote regional peace and stability and adherence to the principles of the United Nations Charter;
3. To promote cooperation among the members of ASEAN through the exchange of knowledge and experience in the field of public sector auditing.
4. To provide a conducive environment and facilities for research, training, and education among the members
5. To serve as a centre of information and as an ASEAN link with other international organizations.

Question 38.
Mention any three methods of redemption of public debt.
Answer:
Methods of Redemption of Public Debt:
The process of repaying a public debt is called redemption. The Government sells securities to the public and at the time of maturity, the person who holds the security surrenders it to the Government. The following methods are adopted for debt redemption.

(i) Sinking Fund:

1. Under this method, the Government establishes a separate fund known as “Sinking Fund”.
2. The Government credits every year a fixed amount of money to this fund.
3. By the time the debt matures, the fund accumulates enough amount to pay off the principal along with interest.
4. This method was first introduced in England by Walpol.

(ii) Conversion:

1. Conversion of loans is another method of redemption of public debt.
2. It means that an old loan is converted into a new loan.
3. Under this system a high interest public debt is converted into a low interest public debt.
4. Dalton felt that debt conversion actually relaxes the debt burden.

(iii) Budgetary Surplus:

1. When the Government presents surplus budget, it can be utilised for repaying the debt.
2. Surplus occurs when public revenue exceeds the public expenditure.
3. However, this method is rarely possible.

Question 39.
State the meaning of e-waste.
Answer:

1. Electronic waste which is commonly referred as “e-waste” is the new byproduct of the Info Tech society.
2. It is a physical waste in the form of old discarded, end of life electronics.
3. It includes a broad and growing range of electronic devices from large household appliances such as refrigerators, air conditioners, cellular phones, computers and other electronic goods”.
4. Similarly, e-waste can be defined as the result when consumer, business and household devices are disposed or sent for re-cycling (example, television, computers, audio-equipments, VCR, DVD, telephone, Fax, Xerox machines, wireless devices, video games, other household electronic equipments).

Question 40.
How would you break the vicious circle of poverty?
Answer:
Breaking the Vicious Circle of Poverty:

1. The vicious circle of poverty is associated with low rate of saving and investment on the supply side.
2. In UDCs the rate of investment and capital formation can be stepped up without reduction in consumption. For this, the marginal rate of savings is to be greater than average rate of savings.
3. To break the vicious circle on the demand side, Nurkse suggested the strategy of balanced growth.
4. If investment is made in several industries simultaneously the workers employed in various industries will become consumers of each other’s products and will create demand for one another.
5. The balanced growth i.e. simultaneous investment in large number of industries creates mutual demand. Thus, through the strategy of balanced growth, vicious circle of poverty operating on the demand side of capital formation can be broken.

PART – IV

Answer all the questions. [7 x 5 = 35]

Question 41 (a).
Explain the Importance of Factor Cost.
Answer:

[OR]

(b) Critically explain Say’s law of market.
Answer:
Criticisms of Say’s Law:
The following are the criticisms against Say’s law:

1. According to Keynes, supply does not create its demand. It is not applicable where demand does not increase as much as production increases.
2. Automatic adjustment process will not remove unemployment. Unemployment can be removed by increase in the rate of investment.
3. Money is not neutral. Individuals hold money for unforeseen contingencies while businessmen keep cash reserve for future activities.
4. Say’s law is based on the proposition that supply creates its own demand and there is no over production. Keynes said that over production is possible.
5. Keynes regards full employment as a special case because there is under – employment in capitalist economies.
6. The need for state intervention arises in the case of general over production and mass unemployment.

Question 42 (a).
What is consumption function?
Answer:
Meaning of Consumption Function:
The consumption function or propensity to consume refers to income consumption relationship. It is a “functional relationship between two aggregates viz., total consumption and gross national income.”

Symbolically, the relationship is represented as
C = f(Y)
Where,
C = Consumption; Y = Income;/= Function
Thus the consumption function indicates a functional relationship between C and Y, where C is the dependent variable and Y is the independent variable, i.e., C is determined by Y. This relationship is based on the ceteris paribus (other things being same) assumption, as only income consumption relationship is considered and all possible influences on consumption are held constant.

[OR]

(b) Explain the Inflation Effects of production.
Answer:
Effects on Production: When the inflation is very moderate, it acts as an incentive to traders and producers. This is particularly prior to full employment when resources are not fully utilized. The profit due to rising prices encourages and induces business class to increase their investments in production, leading to generation of employment and income.

1. However, hyper-inflation results in a serious depreciation of the value of money and it discourages savings on the part of the public.
2. When the value of money undergoes considerable depreciation, this may even drain out the foreign capital already invested in the country.
3. With reduced capital accumulation, the investment will suffer a serious set-back which may have an adverse effect on the volume of production in the country. This may discourage entrepreneurs and business men from taking business risk.
4. Inflation also leads to hoarding of essential goods both by the traders as well as the consumers and thus leading to still higher inflation rate.
5. Inflation encourages investment in speculative activities rather than productive purposes.

Question 43 (a).
Describe the functions of Reserve Bank of India.
Answer:
Functions of Central Bank (Reserve Bank of India):
The Reserve Bank of India (RBI) is India’s central banking institution, which controls the monetary policy of the Indian rupee.
1. Monetary Authority: It controls the supply of money in the economy to stabilize exchange rate, maintain healthy balance of payment, attain financial stability, control inflation, strengthen banking system.

2. The issuer of currency: The objective is to maintain the currency and credit system of the country. It is the sole authority to issue currency. It also takes action to control the circulation of fake currency.

3. The issuer of Banking License: As per Sec 22 of Banking Regulation Act, every bank has to obtain a banking license from RBI to conduct banking business in India.

4. Banker to the Government: It acts as banker both to the central and the state governments. It provides short-term credit. It manages all new issues of government loans, servicing the government debt outstanding and nurturing the market for government securities. It advises the government on banking and financial subjects.

5. Banker’s Bank: RBI is the bank of all banks in India as it provides loan to banks, accept the deposit of banks, and rediscount the bills of banks.

6. Lender of last resort: The banks can borrow from the RBI by keeping eligible securities as collateral at the time of need or crisis, when there is no other source.

7. Act as clearing house: For settlement of banking transactions, RBI manages 14 clearing houses. It facilitates the exchange of instruments and processing of payment instructions.

8. Custodian of foreign exchange reserves: It acts as a custodian of FOREX. It administers and enforces the provision of Foreign Exchange Management Act (FEMA), 1999. RBI buys and sells foreign currency to maintain the exchange rate of Indian rupee v/s foreign currencies.

9. Regulator of Economy: It controls the money supply in the system, monitors different key indicators like GDP, Inflation, etc.

10. Managing Government securities: RBI administers investments in institutions when they invest specified minimum proportions of their total assets/liabilities in government securities.

11. Regulator and Supervisor of Payment and Settlement Systems: The Payment and Settlement Systems Act of 2007 (PSS Act) gives RBI oversight authority for the payment and settlement systems in the country. RBI focuses on the development and functioning of safe, secure and efficient payment and settlement mechanisms.

12. Developmental Role: This role includes the development of the quality banking system in India and ensuring that credit is available to the productive sectors of the economy. It provides a wide range of promotional functions to support national objectives. It also includes establishing institutions designed to build the country’s financial infrastructure. It also helps in expanding access to affordable financial services and promoting financial education and literacy.

13. Publisher of monetary data and other data: RBI maintains and provides all essential banking and other economic data, formulating and critically evaluating the economic policies in India. RBI collects, collates and publishes data regularly.

14. Exchange manager and controller: RBI represents India as a member of the International Monetary Fund [IMF], Most of the commercial banks are authorized dealers of RBI.

15. Banking Ombudsman Scheme: RBI introduced the Banking Ombudsman Scheme in 1995. Under this scheme, the complainants can file their complaints in any form, including online and can also appeal to the Ombudsman against the awards and the other decisions of the Banks.

16. Banking Codes and Standards Board of India: To measure the performance of banks against Codes and standards based on established global practices, the RBI has set up the Banking Codes and Standards Board of India (BCSBI).

[OR]

(b) Explain the State Industrial Development Corporations.
Answer:
State Industrial Development Corporations (SIDCOs):

1. The Industrial Development Corporations have been set up by the state governments and they are wholly owned by them.
2. These institutions are not merely financing agencies; they are entrusted with the responsibility of accelerating the industrialization of their states.

SIDCO (Small Industrial Development Corporation):

1. SIDCOs provide financial assistance to industrial concerns by way of loans guarantees and underwriting of or direct subscriptions to shares and debentures.
2. In addition to these, they undertake various promotional activities, such as conducting techno-economic surveys, project identification, preparation of feasibility studies and selection and training of entrepreneurs.
3. They also promote joint sector projects in association with private promoter in such type of projects.
4. SIDCOs take 26 percent, private co-promoter takes 25 percent of the equity, and the rest is offered to the investing public.
5. SIDCOs undertake the development of industrial areas by providing all infrastructural facilities and initiation of new growth centers.
6. They also administer various State government incentive schemes.
7. SIDCOs get refinance facilities form IDBI.
8. They also borrow through bonds and accept deposits.

Question 44 (a).
Explain briefly the Comparative Cost Theory.
Answer:
Ricardo’s Theory of Comparative Cost Advantage:

1. David Ricardo, the British economist in his ‘Principles of Political Economy and Taxation’ published in 1817, formulated a systematic theory called ‘Comparative Cost Theory’.
2. Ricardo demonstrates that the basis of trade is the comparative cost difference. In other words, trade can take place even if the absolute cost difference is absent but there is comparative cost difference.
3. According to Ricardo, a country can gain from trade when it produces at relatively lower costs. Even when a country enjoys absolute advantage in both goods, the country would specialize in the production and export of those goods which are relatively more advantageous.

Assumptions:

1. There are only two nations and two commodities (2×2 model)
2. Labour is the only element of cost of production.
3. All labourers are of equal efficiency.
4. Labour is perfectly mobile within the country but perfectly immobile between countries.
5. Production is subject to the law of constant returns.
6. Foreign trade is free from all barriers.
7. No change in technology.
8. No transport cost.
9. Perfect competition.
10. Full employment.
11. No government intervention.

Illustration:
Ricardo’s theory of comparative cost can be explained with a hypothetical example of production costs of cloth and wheat in America and India.

Comparative Cost Advantage
(Units of labour required to produce one unit)

It is evident from the example that India has an absolute advantage in production of both cloth and wheat.

However, India should concentrate on the production of wheat in which she enjoys a comparative cost advantage. (80/120 < 90/100). For America the comparative cost disadvantage is lesser in cloth production. Hence America will specialize in the production of cloth and export it to India in exchange for wheat. (Any exchange ratio between 0.88 units and 1.2 units of cloth against one unit of wheat represents gain for both the nations). With trade, India can get 1 unit of cloth and 1 unit of wheat by using its 160 labour units. In the absence of trade, for getting this benefit, India will have to use 170 units of labour. America also gains from this trade. With trade, America can get 1 unit of cloth and one unit of wheat by using its 200 units of labour. Otherwise, America will have to use 220 units of labour for getting 1 unit of cloth and 1 unit of wheat.

[OR]

(b) Briefly explain causes for Balance of payments disequillibrium.
Answer:
Causes for BoP Disequilibrium:
The following are the major causes producing disequilibrium in the balance of payments of a country.
(i) Cyclical Fluctuation:

1. .Cyclical disequilibrium in different countries is caused by their cyclical fluctuations, their phases and magnitude.
2. World trade shrinks during depression while trade flourishes during prosperity.

(ii) Structural Changes:

1. Structural disequilibrium is caused by the structural changes brought by huge development and investment programmes in the developing economies.
2. Such economies may have high propensity to import for want of capital for rapid industrialization, while export may not be boosted up to that extent.

(iii) Development Expenditure:

1. Development disequilibrium is caused by rapid economic development which results in income and price effects.
2. The less developed countries in the early stage of development are not self sufficient.
3. Income, savings and investment are abysmally low.
4. They depend upon developed countries for import of commodities, capital and technology.
5. Export potential is low and import intensity is high.
6. So the LDCs suffer from adverse BoP.

(iv) Consumerism:

1. Balance of payments position of a country is adversely affected by a huge increase in consumption.
2. This increases the need for imports and decreases the capacity to export.

(v) Demonstration Effect:

1. Deficit in the balance of payments of developing countries is also caused by demonstration effect which influences the people in UDCs to imitate western styled goods.
2. This will raise the propensity to import causing adverse balance of payments.
3. This is good for the developed countries.

(vi) Borrowing:

1. International borrowing and investment may cause a deficit in the balance of payments.
2. When the international borrowing is heavy, a country’s balance of payments will be adverse since it repays loans with interest.
3. Servicing of debt is a huge burden. That is why the IJDCs are forced to borrow more.

(vii) Technological Backwardness:

1. Due to technological backwardness, the people (Indians) are unable to use the energy (Solar) available with them.
2. As a result they import huge petroleum products from foreign countries, increasing the trade deficit.

(viii) Global Politics:

1. The rich countries (e.g. USA) need to sell their weapons to promote their economy and generate employment.
2. Hence, wars between countries (for example Iran and Irag, Pakistan and India) are stimulated In order to win the wars, the poor countries are forced to buy the weapons from weapon – rich countries, using their export earnings and creating trade deficit.
3. Thus UDCs are trapped forever.

Question 45 (a).
Explain the achievements of World Bank.
Answer:
Achievements of World Bank:
The World Bank is said to be successful in achieving its primary objective of reconstruction and-development of war ravaged nations. It helped greatly in the reconstruction of Europe after the World War II. It has been providing the developed and developing countries the same treatment in the process of growth.

1. It is noted that the Bank’s membership has increased from the initial number of 30 countries to 68 countries in 1960 and to 151 countries in 1988. The IBRD has 189 member countries.
2. The Bank grants medium and long-term loans (i.e., payable over a period of 15-20 years) for reconstruction and development purposes to the member countries. The actual term of a loan depends upon the estimated useful life of the equipment or plant financed.
3. Initially the World Bank’s loans were mainly directed at the European countries for financing their programmes of reconstruction. Later it changed its development loan strategy and lays more emphasis of financing schemes for the poor masses of the developing countries.
4. The World Bank grants loans to member countries only for productive purposes particularly for agriculture, irrigation, power and transport. In other words, the Bank strengthens . infrastructure needed for further development.
5. The International Development Association (IDA), the Soft Loan Window of the Bank provides loans to UDCs at very low rate of interest. However, the economic inequality among the member-countries goes on increasing. Many African countries are yet to improve their economic status.

[OR]

(b) Bring out the merits of indirect taxes over direct taxes.
Answer:
Merits of Direct Taxes:
(i) Equity:

1. Direct taxes are progressive i.e. rate of tax varies according to tax base.
2. For example, income tax satisfies the canon of equity.

(ii) Certainty:

1. Canon of certainty can be ensured by direct taxes.
2. For example, an income tax payer knows when and at what rate he has to pay income tax.

(iii) Elasticity:

1. Direct taxes also satisfy the canon of elasticity.
2. Income tax is income elastic in nature. As income level increases, the tax revenue to the Government also increases automatically.

(iV) Economy:

1. The cost of collection of direct taxes is relatively low.
2. The tax payers pay the tax directly to the state.

Merits of Indirect Taxes:
(i) Wider Coverage:

1. All the consumers, whether they are rich or poor, have to pay indirect taxes.
2. For this reason, it is said that indirect taxes can cover more people than direct taxes.
3. For example, in India everybody pays indirect tax as against just 2 percent paying income tax.

(ii) Equitable:
The indirect tax satisfies the canon of equity when higher tax is imposed on luxuries used by rich people.

(iii) Economical:

1. Cost of collection is less as producers and retailers collect tax and pay to the Government.
2. The traders act as honorary tax collectors.

(iv) Checks harmful consumption:

1. The Government imposes indirect taxes on those commodities which are harmful to health e.g. tobacco, liquor etc.
2. They are known as sin taxes.

(v) Convenient:

1. Indirect taxes are levied on commodities and services.
2. Whenever consumers make purchase, they pay tax along with the price.
3. They do not feel the pinch of paying tax.

Question 46 (a).
Bring out the merits and demerits of Direct taxes.
Answer:
Merits of Direct Taxes:
(i) Equity:

1. Direct taxes are progressive i.e. rate of tax varies according to tax base.
2. For example, income tax satisfies the canon of equity.

(ii) Certainty:

1. Canon of certainty can be ensured by direct taxes.
2. For example, an income tax payer knows when and at what rate he has to pay income tax. (Hi) Elasticity:
3. Direct taxes also satisfy the canon of elasticity.
4. Income tax is income elastic in nature.
5. As income level increases, the tax revenue to the Government also increases automatically. (iv) Economy:
6. The cost of collection of direct taxes is relatively low.
7. The tax payers pay the tax directly to the state.

Demerits of Direct Taxes:
(i) Unpopular:

1. Direct taxes are generally unpopular.
2. It is inconvenient and less flexible.

(ii) Productivity affected:

1. According to many economists direct tax may adversely affect productivity.
2. Citizens are not willing to earn more income because in that case they have to pay more taxes.

(iii) Inconvenient:
The tax payers find it inconvenient to maintain accounts, submit returns and pay tax in lump sum.

(iv) Tax Evasion:

1. The burden of direct tax is so heavy that tax-payers always try to evade taxes.
2. This ultimately leads to the generation of black money, which is harmful to the economy.

[OR]

(b) Brief the linkage between economy and environment.
Answer:
Linkage between Economy and Environment:

1. Man’s life is interconnected with various other living and non-living things.
2. The life also depends on social, political, ethical, philosophical and other aspects of economic system.
3. In fact, the life of human beings is shaped by his living environment.
4. The relationship between the economy and the environment is generally explained in the form of a “Material Balance Model”.
5. The model considers the total economic process as a physically balanced How between inputs and outputs.
6. Inputs are bestowed with physical property of energy which is received from the environment.
7. The interdependence of economics and environment.

Question 47 (a).
Describe the case for planning.
Answer:
The economic planning is justified on the following grounds.
(i) To accelerate and strengthen market mechanism: The market mechanism works imperfectly in underdeveloped countries because of the ignorance and unfamiliarity with it. A large part of the economy comprises the non-monetized sector.

(ii) To remove unemployment: Capital being scarce and labour being abundant, the problem of providing gainful employment opportunities to an ever-increasing labour force is a difficult task.

(iii) To achieve balanced development: In the absence of sufficient enterprise and initiative, the planning authority is the only institution for planning the balanced development of the economy.

• Development of Agriculture and Industrial Sectors: The need for developing the agriculture sector along with the industrial sector arises from the fact that agriculture and industry are interdependent.
• Development of Infrastructure: The agriculture and industrial sectors cannot develop in the absence of economic and social overheads. The building of canals, roads, railways, power stations, etc., is indispensable for agricultural and industrial development.
• Development of Money and Capital Markets: The expansion of the domestic and foreign trade requires’ not only the development of agricultural and industrial sectors along with social and economic overheads but also the existence of financial institutions.

(iv) To remove poverty and inequalities: Planning is the only path open to underdeveloped countries, for raising national and per capita income, reducing inequalities and poverty and increasing employment opportunities.

[OR]

(b) Central Statistical Office (CSO)
Answer:

1. The Central Statistical Office is one of the two wings of the National Statistical Organisation (NSO).
2. It is responsible for co-ordination of statistical activities in the country and for evolving and maintaining statistical standards.
3. Its activities include compilation of National Accounts; conduct of Annual Survey of Industries and Economic Censuses, compilation of Index of Industrial Production as well as Consumer Price Indices.
4. It also deals with various social statistics, training, international cooperation, Industrial Classification, etc.
5. The CSO is headed by a Director- General who is assisted by 5 Additional Director- Generals looking after the National Accounts Division, Social Statistics Division, Economic Statistics Division, Training Division and the Coordination and Publication Division.
6. CSO is located in the Sardar Patel Bhawan, Parliament Street, New Delhi. The Industrial
   Statistics Wing of CSO is located in Kolkata.
7. The Computer Centre also under the CSO is located in R K Puram, New Delhi.

Students can Download Tamil Nadu 12th Economics Model Question Paper 5 English Medium Pdf, Tamil Nadu 12th Economics Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 12th Economics Model Question Paper 5 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 3.00 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions:

Question 1.
Macro economics is a study of …………
(a) Individuals
(b) firms
(c) nations
(d) aggregates
Answer:
(d) aggregates

Question 2.
State whether the statements are true or false.
(i) Profit Motive of Capitalist Economy.
(ii) Basic problems are solved by customs and traditions.
(a) Both (i) and (ii) are true
(b) Both (i) and (ii) are false
(c) (i) is true but (ii) is false
(d) (i) is false but (ii) is true
Answer:
(c) (i) is true but (ii) is false

Question 3.
………. is also known as Disposable Personal Income.
(a) Personal Income
(b) Disposable Income
(c) Consumer Income
(d) Product Income
Answer:
(b) Disposable Income

Question 4.
Assertion (A): National Income is a measure of the total value of the goods and services produced in an economy for a year.
Reason (R): GNP – is the total value of output produced and income received in a year by domestic residence of a country.
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’
(b) Both ‘A’ and ‘R’ are true but ‘R’ is not the correct explanation to ‘A’
(c) ‘A’ is true but ‘R’ is false
(d) ‘A’ is false but ‘R’ is true
Answer:
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’

Question 5.
The basic concept used in Keynes Theory of Employment and Income is
(a) Aggregate demand
(b) Aggregate supply
(c) Effective demand
(d) Marginal Propensity Consume
Answer:
(c) Effective demand

Question 6.
State whether the statements are true or false.
(i) Keynesian theory is – Aggregate demand – Aggregate supply approach. Saving – Investment approach.
(ii) This approach explained the determination level of Income and employment.
(a) Both (i) and (ii) are true
(b) Both (i) and (ii) are false
(c) (i) is true but (ii) is false
(d) (i) is false but (ii) is true
Answer:
(a) Both (i) and (ii) are true

Question 7.
It the MPC is 0.5, the multiplier is……..
(a) 2
(b) 1/2
(c) 0.2
(d) 20
Answer:
(a) 2

Question 8.
Which of the following is correctly matched:
(a) Aftalion – 1909
(b) Hawtrey – 1914
(c) Bickerdike – 1915
(d) J.M. Clark – 1916
Answer:
(a) Aftalion – 1909

Question 9.
MV stands for………….
(a) demand for money
(b) supply of legal tender money
(c) supply of bank money
(d) total supply of money
Answer:
(b) supply of legal tender money

Question 10.
The modern economy is described as………….
(a) Demand Economy
(b) Supply Economy
(c) Money Economy
(d) Wage Economy
Answer:
(c) Money Economy

Question 11.
EXIM bank was established in……………
(a) June 1982
(b) April 1982
(c) May 1982
(d) March 1982
Answer:
(d) March 1982

Question 12.
Match the following and choose the correct answer by using codes given below:

Code:

Answer:
(b) A-4, B-3, C-1, D-2

Question 13.
Balance of Trade means:……….
(a) Import and export of invisible items only
(b) Import and export of both visible and invisible items
(c) Import of visible items only
(d) Import and export of visible items only
Answer:
(d) Import and export of visible items only

Question 14.
Which of the following is correctly matched:
(a) SDR – Special Drawing Rights
(b) IMF – India Monetary Fund
(c) BOP – Balance of Price
(d) BOT – Balance of Technology
Answer:
(a) SDR – Special Drawing Rights

Question 15.
The word budget has been derived from the French word “bougette” which means:……….
(a) A small bag
(b) An empty box
(c) A box with papers
(d) None of the above
Answer:
(a) A small bag

Question 16.
Assertion (A): Canons of Taxation are Economical, Equitable, Convenient, Certain Efficient and Flexible.
Reason (R): Adam Smiths four canons of taxation are Canon of Ability, Canon of Certainty, Canon of Convenience, Canon of Economy.
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’
(b) Both ‘A’ and ‘R’ are true but ‘R’ is not the correct explanation to ‘A’
(c) ‘A’ is true but ‘R’ is false
(d) ‘A’ is false but ‘R’ is true
Answer:
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’

Question 17.
Which one of the following causes of global warming?
(a) Earth gravitation force
(b) Oxygen
(c) Centripetal force
(d) Increasing temperature
Answer:
(d) Increasing temperature

Question 18.
Heavy machineries located inside big factories and industrial plants also emit pollutants into the ………..
(a) land
(b) soil
(c) air
(d) water
Answer:
(c) air

Question 19.
Match the following and choose the correct answer by using codes given below:

Code:

Answer:
(a) A-2, B-1, C-4, D-3

Question 20.
Econometrics is the amalgamation of
(a) 3 subjects
(b) 4 subjects
(c) 2 subjects
(d) 5 subjects
Answer:
(a) 3 subjects

PART – II

Answer any seven question in which Question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
Write the Disposable Income.
Answer:

1. Disposable Income is also known as Disposable personal income.
2. It is the individuals income after the payment of income tax.
3. This is the amount available for households for consumption.

Question 22.
Write a short note on “Educational Unemployment”.
Answer:

1. Sometimes educated people are underemployed or unemployed when qualification does not match the job.
2. Faulty education system, lack of employable skills, mass student turnout and preference for white collar jobs are highly responsible for educated unemployment in India.

Question 23.
Write the Accelerator Assumptions.
Answer:
Assumptions:

1. Absence of excess capacity in consumer goods industries.
2. Constant capital – output ratio
3. Increase in demand is assumed to be permanent
4. Supply of funds and other inputs is quite elastic
5. Capital goods are perfectly divisible in any required size.

Question 24.
Explain disinflation.
Answer:
Disinflation: Disinflation is the slowing down the rate of inflation by controlling the amount of credit (bank loan, hire purchase) available to consumers without causing more unemployment. Disinflation may be defined as the process of reversing inflation without creating unemployment or reducing output in the economy.

Question 25.
Write the meaning of Money supply.
Answer:

1. In India, currency notes are issued by the Reserve Bank of India (RBI) and coins are issued by the Ministry of Finance, Government of India (GOI).
2. Besides these, the balance is savings, or current account deposits, held by the public in commercial banks is also considered money.
3. The currency notes are also called fiat money and legal tenders.

Question 26.
Define Commercial banks.
Answer:
Commercial bank refers to a bank, or a division of a large bank, which more specifically deals with deposit and loan services provided to corporations or large/middle-sized business – as opposed to individual members of the public/small business.

Question 27.
Define “Cash Reserve Ratio”.
Answer:

1. Under this system the Central Bank controls credit by changing the Cash Reserves Ratio.
2. For example, if the Commercial Banks have excessive cash reserves on the basis of which they are creating too much of credit,this will be harmful for the larger interest of the economy.
3. So it will raise the cash reserve ratio which the Commercial Banks are required to maintain with the Central Bank.

Question 28.
Write a brief note on flexible exchange rate.
Answer:
Flexible Exchange Rates: Under the flexible exchange rate (also known as floating exchange rate) system, exchange rates are freely determined in an open market by market forces of demand and supply.

Question 29.
Define World Trade Organisation.
Answer:

1. WTC headquarters located at New York, USA.
2. It featured the landmark Twin Towers which was established on 4th April 1973.
3. Later it was destroyed on 11th September 2001 by the craft attack.
4. It brings together businesses involved in international trade from around the globe.

Question 30.
Define “Public Revenue”.
Answer:

1. Public revenue occupies an important place in the study of public finance.
2. The Government has to perform several functions for the welfare of the people.
3. They involve substantial amount of public expenditure which can be financed only through public revenue.
4. The amount of public revenue to be raised depends on the necessity of public expenditure and the people’s ability to pay.

PART – III

Answer any seven question in which Question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
Write a note on Mixed Economy.
Answer:
Mixed Economy (Mixedism):

1. In a mixed economy system both private and public sectors co-exist and work together towards economic development.
2. It is a combination of both capitalism and socialism. It tends to eliminate the evils of both capitalism and socialism.
3. In these economies, resources are owned by individuals and the government.
4. India, England, France and Brazil are the examples of mixed economy.

Question 32.
Define the term “Household sector”.
Answer:

1. The household sector is the sole buyer of goods and services, and the sole supplier of factors of production, i.e., land, labour, capital and organisation.
2. It spends its entire income on the purchase of goods and services produced by the business sector.
3. The household sector receives income from firm sector by providing the factors of production owned by it.

Question 33.
List out the assumptions of Say’s law.
Answer:
The Say’s Law of market is based on the following assumptions:

1. No single buyer or seller of commodity or an input can affect price.
2. Full employment.
3. People are motivated by self interest and self – interest determines economic decisions.
4. The laissez faire policy is essential for an automatic and self adjusting process of full employment equilibrium. Market forces determine everything right.
5. There will be a perfect competition in labour and product market.
6. There is wage-price flexibility.
7. Money acts only as a medium of exchange.
8. Long – run analysis.
9. There is no possibility for over production or unemployment.

Question 34.
Aggregate Supply Function meaning and components.
Answer:
Aggregate supply function is an increasing function of the level of employment. Aggregate supply refers to the value of total output of goods and services produced in an economy in a year. In other words, aggregate supply is equal to the value of national product, i.e., national income.
The components of aggregate supply are:

1. Aggregate (desired) consumption expenditure (C)
2. Aggregate (desired) private savings (S)
3. Net tax payments (T) (Total tax payment to be received by the government minus transfer payments, subsidy and interest payments to be incurred by the government) and
4. Personal (desired) transfer payments to the foreigners (Rf) (e.g. Donations to international relief efforts)

Question 35.
State the concept of super multiplier.
Answer:
Super Multiplier: (k and p interaction)

1. The super multiplier is greater than simple multiplier which includes only autonomous investment and no induced investment, while super multiplier includes induced investment.
2. In order to measure the total effect of initial investment on income, Hicks has combined the k and p mathematically and given it the name of the Super Multiplier.
3. The super multiplier is worked out by combining both induced consumption and induced investment.

Question 36.
Explain the primary functions of money.
Answer:
(i) Money as a medium of exchange:
This is considered as the basic function of money. Money has the quality of general acceptability, and all exchanges take place in terms of money.

(ii) Money as a measure of value:
The second important function of money is that it measures the value of goods and services. In other words, the prices of all goods and services are expressed in terms of money. Money is thus looked upon as a collective measure of value.

Question 37.
Distinguish between CRR and SLR.
Answer:

S.No.	CRR	SLR
1.	The Central Bank controls credit by changing the Cash Reserv es Ratio.	Statutory Liquidity Ratio (SLR) is the amount which a bank has to maintain in the form of cash, gold or approved securities.
2.	Commercial Banks have excessive cash reserves on the basis of which they are creating too much of credit, this will be harmful for the larger interest of the economy.	The quantum is specified as some percentage of the total demand and time liabilities.
3.	So it will raise the cash reserve ratio which the Commercial Banks are required to maintain with the Central Bank.	The liabilities of the bank which are payable on demand anytime, and those liabilities which are accruing in one month’s time due to maturity.

Question 38.
Write Adam Smith’s theory of Absolute Cost Advantage Assumptions.
Answer:
Assumptions:

1. There are two countries and two commodities (2 × 2 model).
2. Labour is the only factor of production.
3. Labour units are homogeneous.
4. The cost or price of a commodity is measured by the amount of labour required to produce it.
5. There is no transport cost.

Question 39.
Explain the major achievements of WTO.
Answer:
The major achievements of WTO are as follows

1. Use of restrictive measures for BoP problems has declined markedly;
2. Services trade has been brought into the multilateral system and many countries, as in goods, are opening their markets for trade and investment;
3. The trade policy review mechanism has created a process of continuous monitoring of trade policy developments.

Question 40.
State and explain instruments of fiscal policy.
Answer:
Fiscal Instruments:
Fiscal Policy is implemented through fiscal instruments also called ‘fiscal tools’ or fiscal levers: Government expenditure, taxation and borrowing are the fiscal tools.
(i) Taxation:

1. Taxes transfer income from the people to the Government.
2. Taxes are either direct or indirect.
3. An increase in tax reduces disposable income.
4. So taxation should be raised to control inflation.
5. During depression, taxes are to be reduced.

(ii) Public Expenditure:

1. Public expenditure raises wages and salaries of the employees and thereby the aggregate demand for goods and services.
2. Hence public expenditure is raised to fight recession and reduced to control inflation

(iii) Public debt:

1. When Government borrows by floating a loan, there is transfer of funds from the public to the Government.
2. At the time of interest payment and repayment of public debt, funds are transferred from Government to public.

PART – IV

Answer all the questions. [7 × 5 = 35]

Question 41 (a).
Briefly explain the objective factors of consumption functions.
Answer:
Objective Factors:
(i) Income Distribution:
If there is large disparity between rich and poor, the consumption is low because the rich people have low propensity to consume and high propensity to save.

(ii) Price level:

• Price level plays an important role in determining the consumption function.
• When the price falls, real income goes up; people will consume more and propensity to save of the society increases.

(iii) Wage level:

• Wage level plays an important role in determining the consumption function and there is positive relationship between wage and consumption.
• Consumption expenditure increases with the rise in wages.
• Similar is the effect with regard to windfall gains.

(iv) Interest rate:

• Rate of interest plays an important role in determining the consumption function.
• Higher rate of interest will encourage people to save more money and reduces consumption.

(v) Fiscal Policy:
When government reduces the tax the disposable income rises and the propensity to consume of community increases.

(vi) Consumer credit:

• The availability of consumer credit at easy installments will encourage households to buy consumer durables like automobiles, fridge, computer.
• This pushes up consumption.

(vii) Demographic factors:

• Ceteris paribus, the larger the size of the family, the grater is the consumption.
• Besides size of family, stage in family life cycle, place of residence and occupation affect the consumption function.

(viii) Duesenberry hypothesis:
Duesenberry has made two observations regarding the factors affecting consumption.

• The consumption expenditure depends not only on his current income but also past income and standard of living.
• Consumption is influenced by demonstration effect. The consumption standards of low income groups are influenced by the consumption standards of high income groups..

(ix) Windfall Gains or losses:
Unexpected changes in the stock market leading to gains or losses tend to shift the consumption function upward or downward.

[OR]

(b) Explain the keynes psycological law of consumption asumptions.
Answer:
Keynes’s Law is based on the following assumptions:
(i) Ceteris paribus (constant extraneous variables):
The other variables such as income distribution, tastes, habits, social customs, price movements, population growth, etc. do not change and consumption depends on income alone.

(ii) Existence of Normal Conditions:

• The law holds good under normal conditions.
• If, however, the economy is faced with abnormal and extraordinary circumstances like war, revolution or hyperinflation, the law will not operate.
• People may spend the whole of increased income on consumption.

(iii) Existence of a Laissez-faire Capitalist Economy:

• The law operates in a rich capitalist economy where there is no government intervention.
• People should be free to spend increased income.
• In the case of regulation of private enterprise and consumption expenditures by the State, the law breaks down.

Question 42 (a).
What are the effects of Inflation on the Economy?
Answer:
The effects of inflation can be classified into two heads:

1. Effects on Production and
2. Effects on Distribution.

1. Effects on Production:
When the inflation is veiy moderate, it acts as an incentive to traders and producers. This is particularly prior to full employment when resources are not fully utilized. The profit due to rising prices encourages and induces business class to increase their investments in production, leading to generation of employment and income.

• However, hyper-inflation results in a serious depreciation of the value of money.
• When the value of money undergoes considerable depreciation, this may even drain out the foreign capital already invested in the country.
• With reduced capital accumulation, the investment will suffer a serious set-back which may have an adverse effect on the volume of production in the country.
• Inflation also leads to hoarding of essential goods both by the traders as well as the consumers and thus leading to still higher inflation rate.
• Inflation encourages investment in speculative activities rather than productive purposes.

2. Effects on Distribution:

• Debtors and Creditors: During inflation, debtors are the gainers while the creditors are losers.
• Fixed-income Groups: The fixed income groups are the worst hit during inflation because their incomes being fixed do not bear any relationship with the rising cost of living.
• Entrepreneurs: Inflation is the boon to the entrepreneurs whether they are manufacturers, traders, merchants or businessmen, because it serves as a tonic for business enterprise.
• Investors: The investors, who generally invest in fixed interest yielding bonds and securities have much to lose during inflation.

[OR]

(b) Describe the functions of IDBI.
Answer:
Functions of IDBI:

1. The functions of IDBI fall into two groups (i) Assistance to other financial institutions; and (ii) Direct assistance to industrial concerns either on its own or in participation with other institutions.
2. The IDBI can provide refinance in respect of term loans to industrial concerns given by the IFC, the SFCs, other financial institutions notified by the Government, scheduled banks and state cooperative banks.
3. A special feature of the IDBI is the provision for the creation of a special fund known as the Development Assistance Fund.
4. The fund is intended to provide assistance to industries which require heavy investments with low anticipated rate of return.
5. Such industries may not be able to get assistance in the normal course.
6. The financing of exports was also undertaken by the IDBI till the establishment of EXIM BANK in March, 1982.

Question 43 (a).
Describe the subject matter of International Economics.
Answer:
Subject Matter of International Economics:
The subject matter of International Economics includes large number of segments which are
classified into the following parts.
1. Pure Theory of Trade: This component explains the causes for foreign trade, composition, direction and volume of trade, determination of the terms of trade and exchange rate, issues related to balance of trade and balance of payments.

2. Policy Issues: Under this part, policy issues such as free trade vs. protection, methods of regulating trade, capital and technology flows, use of taxation, subsidies and dumping, exchange control and convertibility, foreign aid, external borrowings and foreign direct investment, measures of correcting disequilibrium in the balance of payments etc are covered.

3. International Cartels and Trade Blocs: This part deals with the economic integration in
the form of international cartels, customs unions, monetary unions, trade blocs, economic unions and the like. It also discusses the operation of Multi National Corporations (MNCs).

4. International Financial and Trade Regulatory Institutions: The financial institutions like International Monetary Fund IMF, IBRD, WTO etc which influence international economic transactions and relations shall also be the part of international economics.

[OR]

(b) Bring out the components of balance of payments account.
Answer:
Components of BOPs:
The credit and debit items are shown vertical lv in the BOP account of a country. Horizontally, they are divided into three categories, i.e.

1. The current account,
2. The capital account and
3. The official settlements account or official reserve assets account.

1. The Current Account: It includes all international trade transactions of goods and services, international service transactions (i.e. tourism, transportation and royalty fees) and international unilateral transfers (i.e. gifts and foreign aid).

2. The Capital Account: Financial transactions consisting of direct investment and purchases of interest-bearing financial instruments, non-interest bearing demand deposits and gold fall under the capital account.

3. The Official Reserve Assets Account: Official reserve transactions consist of movements of international reserves by governments and official agencies to accommodate imbalances arising from the current and capital accounts.

The official reserve assets of a country include its gold stock, holdings of its convertible foreign currencies and Special Drawing Rights (SDRs) and its net position in the International Monetary Fund (IMF).

Question 44 (a).
What are trade blocks?
Answer:
1. Trade blocks cover different kinds of arrangements between or among countries for mutual benefit. Economic integration takes the form of Free Trade Area, Customs Union, Common Market and Economic Union.

2. A free trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, e.g. SAFTA, EFTA.

3. A customs union is defined as a type of trade block which is composed of a free trade area with no tariff among members and (zero tariffs among members) with a common external tariff, e.g. BENELUX (Belgium, Netherland and Luxumbuarg).

4. Common market is established through trade pacts. A group formed by countries within a geographical area to promote duty free trade and free movement of labour and capital among its members, e.g. European Common Market (ECM).

5. An economic union is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production and a common external trade policy, (e.g. European Economic Union).

[OR]

(b) Briefly explain the achievements of SAARC.
Answer:
Achievements of SAARC:

1. The establishment of SAARC Preferential Trading Agreement (SAPTA) and reduction in tariff and non-tariff barriers on imports.
2. The setting up of Technical Committees for economic cooperation among SAARC countries relating to agriculture, communications, education, health and population, rural development, science and technology, tourism, etc.
3. SAARC has established a three-tier mechanism for exchanging information on poverty reduction programmes which is passed on to member countries.
4. SAARC Agricultural Information Centre (SAIC) in 1988 works as a central information institution for agriculture related resources like fisheries, forestry, etc.
5. South Asian Development Fund (SADF) for development projects, human resource development and infrastructural development projects. With all these tall claims, the inter- SAARC Trade has not gone beyond three percent in the last 30 years.

Question 45 (a).
Explain the methods of debt redemption.
Answer:
The process of repaying a public debt is called redemption. The Government sells securities to the public and at the time of maturity, the person who holds the security surrenders it to the Government. The following methods are adopted for debt redemption.
(i) Sinking Fund:

• Under this method, the Government establishes a separate fund known as “Sinking Fund”.
• The Government credits every year a fixed amount of money to this fund.
• By the time the debt matures, the fund accumulates enough amount to pay off the principal along with interest.
• This method was first introduced in England by Walpol.

(ii) Conversion:

• Conversion of loans is another method of redemption of public debt.
• It means that an old loan is converted into a new loan.
• Under this system a high interest public debt is converted into a low interest public debt.
• Dalton felt that debt conversion actually relaxes the debt burden.

(iii) Budgetary Surplus:

• When the Government presents surplus budget, it can be utilised for repaying the debt.
• Surplus occurs when public revenue exceeds the public expenditure.
• However, this method is rarely possible.

(iv) Terminal Annuity:

• In this method, Government pays off the public debt on the basis of terminal annuity in
  equal annual installments. .
• This is the easiest way of paying off the public debt.

(v) Repudiation:

• It is the easiest way for the Government to get rid of the burden of payment of a loan.
• In such cases, the Government does not recognise its obligation to repay the loan.
• It is certainly not paying off a loan but destroying it.
• However, in normal case the Government does not do so; if done it will lose its credibility.

(vi) Reduction in Rate of Interest:
Another method of debt redemption is the compulsory reduction in the rate of interest, during the time of financial crisis.

(vi) Capital Levy:

1. When the Government imposes levy on the capital assets owned by an individual or any institution, it is called capital levy.
2. This levy is imposed on capital assets above a minimum limit on a progressive scale.
3. The fund so collected can be used by the Government for paying off war time debt obligations.
4. This is the most controversial method of debt repayment.

[OR]

(b) Describe the various types of deficit in budget.
Answer:
The Indian Government budget, budget deficit is of four major types.

1. Revenue Deficit
2. Budget Deficit
3. Fiscal Deficit, and
4. Primary Deficit

1. Revenue Deficit:
It refers to the excess of the government revenue expenditure over revenue receipts. It does not consider capital receipts and capital expenditure. Revenue deficit implies that the government is living beyond its means to conduct day-to-day operations.
Revenue Deficit (RD) = Total Revenue Expenditure (RE) – Total Revenue Receipts (RR) When RE – RR > 0

2. Budget Deficit:
Budget deficit is the difference between total receipts and total expenditure (both revenue and capital)
Budget Deficit = Total Expenditure – Total Revenue

3. Fiscal Deficit:
Fiscal deficit (FD) = Budget deficit + Government’s market borrowings and liabilities

4. Primary Deficit:
Primary deficit is equal to fiscal deficit minus interest payments. It shows the real burden of the government and it does not include the interest burden on loans taken in the past. Thus, primary deficit reflects borrowing requirement of the government exclusive of interest payments.
Primary Deficit (PD) = Fiscal deficit (PD) – Interest Payment (IP)

Question 46 (a).
Briefly explain classification of Public expenditure.
Answer:
Classification of public expenditure are as follows:
(i) Classification on the Basis of Benefit:
Cohn and Plehn have classified the public expenditure on the basis of benefit into four classes:

• Public expenditure benefiting the entire society, e.g., the expenditure on general administration, defence, education, public health, transport.
• Public expenditure conferring a special benefit on certain people and at the same time common benefit on the entire community, e.g., administration of justice etc.
• Public expenditure directly benefiting particular group of persons and indirectly the entire society, e.g., social security, public welfare, pension, unemployment relief etc.
• Public expenditure conferring a special benefit on some individuals, e.g., subsidy granted to a particular industry.

(ii) Classification on the Basis of Function:
Adam Smith classified public expenditure on the basis of functions of government in the ‘ following main groups:

• Protection Functions: This group includes public expenditure incurred on the security of the citizens, to protect from external invasion and internal disorder, e.g., defence, police, courts etc.
• Commercial Functions: This group includes public expenditure incurred on the development of trade and commerce, e.g., development of means of transport and communication etc.
• Development Functions: This group includes public expenditure incurred for the development infrastructure and industry.

[OR]

(b) Explain Balanced and Unbalanced Budget.
Answer:
Balanced Budget
Balanced budget is a situation, in which estimated revenue of the government during the year is equal to its anticipated expenditure.

Unbalanced Budget
The budget in which Revenue & Expenditure are not equal to each other is known as Unbalanced Budget.
Unbalanced budget is of two types:

1. Surplus Budget
2. Deficit Budget

1. Surplus Budget
The budget is a surplus budget when the estimated revenues of the year are greater than anticipated expenditures.

2. Deficit Budget
Deficit budget is one where the estimated government expenditure is more than expected revenue.

Question 47 (a).
Write a note on
(a) Climate change and
(b) Acid rain.
Answer:
(a) Climate Change:
The climate change refers to seasonal changes over a long period with respect to the growing accumulation of greenhouse gases in the atmosphere.

Recent studies have shown that human activities since the beginning of the industrial revolution, have contributed to an increase in the concentration of carbon dioxide in the atmosphere by as much as 40%, from about 280 parts per million in the pre-industrial period, to 402 parts per million in 2016, which in turn has led to global warming.

Several parts of the world have already experienced the warming of coastal waters, high temperatures, a marked change in rainfall patterns, and an increased intensity and frequency of storms. Sea levels and temperatures are expected to be rising.

(b) Acid Rain:

1. Acid rain is one of the consequences of air pollution.
2. It occurs when emissions from factories, cars or heating boilers contact with the water in the atmosphere.
3. These emissions contain nitrogen oxides, sulphur dioxide and sulphur trioxide which when mixed with water becomes sulfurous acid, nitric acid and sulfuric acid.
4. This process also occurs by nature through volcanic eruptions.
5. It can have harmful effects on plants, aquatic animals and infrastructure.

[OR]

(b) Discuss the economic determinants of economic development Economic Factors?
Answer:
Economic Factors:
1. Natural Resource: The principal factor affecting the development of an economy is the availability of natural resources. The existence of natural resources in abundance is essential for development.

2. Capital Formation: Capital formation is the main key to economic growth. Capital formation refers to the net addition to the existing stock of capital goods which are either tangible like plants and machinery or intangible like health, education and research.

3. Size of the Market: Large size of the market would stimulate production, increase employment and raise the National per capita income. That is why developed countries expand their market to other countries through WTO.

4. Structural Change: Structural change refers to change in the occupational structure of the economy. Any economy of the country is generally divided into three basic sectors: Primary sector such as agricultural, animal husbandry, forestry, etc; Secondary sector such as industrial production, constructions and Tertiary sector such as trade, banking and commerce.

5. Financial System: Financial system implies the existence of an efficient and organized banking system in the country.

6. Marketable Surplus: Marketable surplus refers to the total amount of farm output cultivated by farmers over and above their family consumption needs. This is a surplus that can be sold in the market for earning income.

7. Foreign Trade: The country which enjoys favorable balance of trade and terms of trade is always developed. It has huge forex reserves and stable exchange rate.

8. Economic System: The countries which adopt free market mechanism (laissez faire) enjoy better growth rate compared to controlled economies.

Students can Download Tamil Nadu 12th Economics Model Question Paper 2 English Medium Pdf, Tamil Nadu 12th Economics Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 12th Economics Model Question Paper 2 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 3.00 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions: [20 x 1 = 20]

Question 1.
The country following Capitalism is……….
(a) Russia
(b) America
(c) India
(d) China
Answer:
(a) Russia

Question 2.
The value of NNP at production point is called……….
(a) NNP at factor cost
(b) NNP at market cost
(c) GNP at factor cost
(d) Per capita income
Answer:
(a) NNP at factor cost

Question 3.
The basic concept used in Keynes Theory of Employment and Income is……….
(a) Aggregate demand
(b) Aggregate supply
(c) Effective demand
(d) Marginal Propensity Consume
Answer:
(c) Effective demand

Question 4.
The aggregate effective demand would increase the level of……….
(a) unemployment
(b) employment
(c) cyclical unemployment
(d) open unemployment
Answer:
(b) employment

Question 5.
The term super multiplier was first used by……….
(a) J.R.Hicks
(b) R.G.D. Allen
(c) Kahn
(d) Keynes
Answer:
(a) J.R.Hicks

Question 6.
Paper currency system is managed by the………..
(a) Central Monetary authority
(b) State Government
(c) Central Government
(d) Banks
Answer:
(a) Central Monetary authority

Question 7.
What is the name of inflation without a rise in price level?
(a) Repressed Inflation
(b) Hyper Inflation
(c) Galloping Inflation
(d) Cost-Push Inflation
Answer:
(a) Repressed Inflation

Question 8.
Moral suasion refers…………
(a) Optimization
(b) Maximization
(c) Persuasion
(d) Minimization
Answer:
(c) Persuasion

Question 9.
Current account deposits are operated by……….
(a) agriculturists
(b) business men
(c) government servants
(d) labourers
Answer:
(b) business men

Question 10.
Terms of Trade of a country show………..
(a) Ratio of goods exported and imported
(b) Ratio of import duties
(c) Ratio of prices of exports and imports
(d) Both (a) and (c)
Answer:
(c) Ratio of prices of exports and imports

Question 11.
Match the following and choose the correct answer by using codes given below:

Codes

Answer:
(a) A-2, B-1, C-3, D-4

Question 12.
International Development Association is an affiliate of…………
(a) IMF
(b) World Bank
(c) SAARC
(d) ASEAN
Answer:
(b) World Bank

Question 13.
International Monetary Fund headquarters are present in……….
(a) Geneva
(b) Washington DC
(c) England
(d) China
Answer:
(b) Washington DC

Question 14.
The difference between total expenditure and total receipts including loans and other liabilities is called……….
(a) Fiscal deficit
(b) Budget deficit
(c) Primary deficit
(d) Revenue deficit
Answer:
(a) Fiscal deficit

Question 15.
Adam Smith classified public expenditure on the basis of Production Functions, Commercial Functions and……….. Functions.
(a)’ Defence
(b) Growth
(c) Development
(d) Government
Answer:
(c) Development

Question 16.
Match the following and choose the correct answer by using codes given below:

Code:

Answer:
(d) A-4, B-1, C-2, D-3

Question 17.
The process of nutrient enrichment is termed as
(a) Eutrophication
(b) Limiting nutrients
(c) Enrichment
(d) Schistosomiasis
Answer:
(b) Limiting nutrients

Question 18.
Types of Noise pollution. (Pick the odd one out.)
(a) Atmospheric noise pollution
(b) Industrial noise pollution
(c) Man made noise pollution
(d) Acid rain pollution
Answer:
(d) Acid rain pollution

Question 19.
A process by which we estimate the value of dependent variable on the basis of one or more independent variables is called………….
(a) Correlation
(b) Regression
(c) Residual
(d) Slope
Answer:
(b) Regression

Question 20.
CSO Director Generals are (Pick the odd one out.)
(a) National Accounts Division [NAD]
(b) Sample Statistics Division [SSD]
(c) Economic Statistics Division [ES]
(d) Co-ordination and Publication Division [CPD]
Answer:
(b) Sample Statistics Division [SSD]

PART – II

Answer any seven question in which Question No. 30 is compulsory. [7 x 2 = 14]

Question 21.
Define Mixed Economy (or) Mixedism.
Answer:
In a mixed economy system both private and public sectors co-exist and work together towards economic development. It is a combination of both capitalism and socialism. It tends to eliminate the evils of both capitalism and socialism. In these economies, resources are owned by individuals and the government. India, England, France and Brazil are the examples of mixed economy.

Question 22.
Write the Factor Incomes group.
Answer:
Factor incomes are grouped under labour income, capital income and mixed income.

1. Labour income – Wages and salaries, fringe benefits, employer’s contribution to social security.
2. Capital income – Profit, interest, dividend and royalty
3. Mixed income – Farming, sole proprietorship and other professions.

Question 23.
Give reasons for labour retrenchment at present situation.
Answer:

1. Modem technology being capital intensive requires less labourers and contributes to technological unemployment.
2. Now a days, invention and innovations lead to the adoption of new techniques there by the existing workers are retrenched.
3. Labour saving devices are responsible for technological unemployment.

Question 24.
Write two approaches of the equilibrium level of Income in Keynesian theory?
Answer:
There are two approaches to determination of the equilibrium level of income in Keynesian theory. These are:

1. Aggregate demand – Aggregate supply approach
2. Saving – Investment approach

Question 25.
Define average propensity to consume (APC).
Answer:
Average Propensity to Consume:
The average propensity to consume is the ratio of consumption expenditure to any particular level of income.” Algebraically it may be expressed as under:
APC = \(\frac{C}{Y}\)
Where, C = Consumption; Y = Income

Question 26.
Define inflation.
Answer:

1. Inflation is a consistent and appreciable rise in the general price level.
2. In other words, inflation is the rate at which the general level of prices for goods and services is rising and consequently the purchasing power of currency is falling.
3. “Too much of Money chasing too few goods” – Coulbourn
4. “A state of abnormal increase in the quantity of purchasing power” – Gregorye

Question 27.
Write the meaning of Open market operations.
Answer:

1. In narrow sense, the Central Bank starts the purchase and sale of Government securities in the money market.
2. In Broad Sense, the Central Bank purchases and sells not only Government securities but also other proper eligible securities like bills and securities of private concerns.
3. When the banks and the private individuals purchase these securities they have to make payments for these securities to the Central Bank.

Question 28.
What do you mean by public debt?
Answer:
The state has to supplement the traditional revenue sources with borrowing from individuals, and institutions within and outside the country. The amount of borrowing is huge in the under developed countries to finance development activities. The debt burden is a big problem and most of the countries are in debt trap.

Question 29.
What do you mean by ecosystem?
Answer:
An ecosystem includes all living things (plants, animals and organisms) in a given area, interacting with each other, and also with their non-living environments (weather, earth, sun, soil, climate, atmosphere). Ecosystems are the foundations of the Biosphere and they determine the health of the entire earth system.

Question 30.
What are the social indicators of economic development?
Answer:
Social Indicators:
Social indicators are normally referred to as basic and collective needs of the people. The direct provision of basic needs such as health, education, food, water, sanitation and housing facilities check social backwardness.

PART – III

Answer any seven question in which Question No. 40 is compulsory. [7 x 3 = 21]

Question 31.
Outline the major merits of capitalism.
Answer:
Merits of Capitalism

1. Automatic Working: Without any government intervention, the economy works automatically.
2. Efficient Use of Resources: All resources are put into optimum use.
3. Incentives for Hard work: Hard work is encouraged and entrepreneurs get more profit for more efficiency.
4. Economic Progress: Production and productivity levels are very high in capitalistic economies.
5. Consumers Sovereignty: All production activities are aimed at satisfying the consumers.
6. Higher Rates of Capital Formation: Increase in saving and investment leads to higher rates of capital formation.
7. Development of New Technology: As profit is aimed at, producers invest on new technology and produce quality goods.

Question 32.
Write briefly about national income and welfare.
Answer:
National Income is considered as an indicator of the economic wellbeing of a country.
The per capita income as an index of economic welfare suffers from limitations which are stated below:

1. The economic welfare depends upon the composition of goods and services provided. The greater the proportion of capital goods over consumer goods, the improvement in economic welfare will be lesser.
2. Higher GDP with greater environmental hazards such as air, water and soil pollution will be little economic welfare.
3. The production of war goods will show the increase in national output but not welfare.
4. An increase in per capita income may be due to employment of women and children or forcing workers to work for long hours. But it will not promote economic welfare.

Question 33.
Give short note on Expenditure method.
Answer:
List out the assumptions of Say’s law.
The Say’s Law of market is based on the following assumptions:

1. No single buyer or seller of commodity or an input can affect price.
2. Full employment.
3. People are motivated by self interest and self – interest determines economic decisions.
4. The laissez faire policy is essential for an automatic and self adjusting process of full employment equilibrium. Market forces determine everything right.
5. There will be a perfect competition in labour and product market.
6. There is wage-price flexibility.
7. Money acts only as a medium of exchange.
8. Long – run analysis.
9. There is no possibility for over production or unemployment.

Question 34.
Explain any three subjective and objective factors influencing the consumption function.
Answer:
Subjective Factors:

1. The motive of precaution: To build up a reserve against unforeseen contingencies. e.g. Accidents, sickness.
2. The motive of foresight: The desire to provide for anticipated future needs. e.g. Old age.
3. The motive of calculation: The desire to enjoy interest and appreciation.

Objective Factors:

1. Income Distribution: If there is large disparity between rich and poor, the consumption is low because the rich people have low propensity to consume and high propensity to save.
2. Price level: Price level plays an important role in determining the consumption function. When the price falls, real income goes up; people will consume more and propensity to save of the society increases.
3. Wage level: Wage level plays an important role in determining the consumption function and there is positive relationship between wage and consumption. Consumption expenditure increases with the rise in wages. Similar is the effect with regard to windfall gains.

Question 35.
Explain the Evolution Of money.
Answer:

1. The introduction of money as a medium of exchange was one of the greatest inventions of mankind.
2. Before money was invented, exchange took place by Barter, that is, commodities and services were directly exchanged for other commodities and services.
3. Under the barter system, buyers and sellers of commodities had to face a number of difficulties.
4. Surplus goods were exchanged for money which in turn was exchanged for other needed goods.
5. Goods like furs, skins, salt, rice, wheat, utensils, weapons, etc. were commonly used as money.
6. Such exchange of goods for goods was known as “Barter Exchange” or “Barter System”.

Question 36.
What is E-Banking?
Answer:
Online banking, also known as internet banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution’s website.

The online banking system typically connects to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services.

Question 37.
Explain the objectives of WTO.
Answer:

1. To ensure reduction of tariff and other barriers.
2. To eliminate discrimination in trade.
3. To facilitate higher standard of living.
4. To facilitate optimal use of world’s resources.
5. To enable the LDCs to secure fair share in the growth of international trade.
6. To ensure linkages between trade policies, environmental policies and sustainable development.

Question 38.
What are the functions of finance commission of India.
Answer:

1. The distribution between the Union and the States of the net proceeds of taxes, which may be divided between them and the allocation among the states of the respective shares of such proceeds;
2. To determine the quantum of grantsin- aid to be given by the Centre to states [Article 275 (1)] and to volve the principles governing the eligibility of the state for such grant-in-aid;
3. Any other matter referred to the Commission by the President of India in the interest of sound finance. Several issues like debt relief, financing of calamity relief of states, additional excise duties, etc. have been referred to the Commission invoking this clause.

Question 39.
Explain the limitations of statistics.
Answer:
1. Statistics is not suitable to the study of qualitative phenomenon: Since statistics is basically a science and deals with a set of numerical data. It is applicable to the study of quantitative measurements. As a matter of fact, qualitative aspects like empowerment, leadership, honesty, poverty, intelligence etc., cannot be expressed numerically and statistical analysis cannot be directly applied on these qualitative phenomena.

2. Statistical laws are not exact: It is well known that mathematical and physical sciences are exact. But statistical laws are not exact and statistical laws are only approximations. Statistical conclusions are not universally true. They are true only on an average.

3. Statistics table may be misused: Statistics must be used only by experts; otherwise, statistical methods are the most dangerous tools on the hands of the inexpert. The use of statistical tools by the inexperienced and untrained persons might lead to wrong conclusions.

4. Statistics is only one of the methods of studying a problem: Statistical method does not provide complete solution of the problems because problems are to be studied taking the background of the countries culture, philosophy, religion etc., into consideration. Thus the statistical study should be supplemented by other evidences.

Question 40.
Briefly explain the kinds of measures of dispersion.
Answer:
There are two kinds of measures of dispersion, namely

1. Absolute measure of dispersion
2. Relative measure of dispersion

1. Absolute measure of dispersion indicates the amount of variation in a set of values in terms of units of observations.

2. Relative measures of dispersion are free from the units of measurements of the observations. They are pure numbers. They are used to compare the variation in two or more sets, which are having different units of measurements of observations.

3. Standard Deviation is one of the methods of Absolute measure of dispersion. Karl Pearson introduced the concept of standard deviation in 1893. Standard deviation is also called Root- Mean Square Deviation. The reason is that it is the square-root of the mean of the squared deviation from the arithmetic mean. It provides accurate result. Square of standard deviation is called Variance.

PART – IV

Answer all the questions. [7 x 5 = 35]

Question 41 (a).
What is Market price and Equations?
Answer:

[OR]

(b) Narrate the equilibrium between ADF and ASF with diagram.
Answer:
Equilibrium between ADF and ASF

• Under the Keynes theory of employment, a simple two sector economy consisting of the household sector and the business sector is taken to understand the equilibrium between ADF and ASF.
• All the decisions concerning consumption expenditure are taken by the individual households, while the business firms take decisions concerning investment.
• It is also assumed that consumption function is linear and planned investment is autonomous.
• There are two approaches to y determination of the equilibrium level of income in Keynesian theory. These are :1. Aggregate demand – Aggregate supply approach, 2. Saving – Investment approach
• In this chapter, out of these two, aggregate Tg demand and aggregate supply approach is alone explained to understand the determination of equilibrium level of income and employment.
• The concept of effective demand is more Q clearly shown in the figure.
• In the figure, the aggregate demand and aggregate supply reach equilibrium at point E. The employment level is N₀ at that point.
• At ON₁ employment, the aggregate supply is N₁ R₁. But they are able to produce M₁ N₁. The expected level of profit is M₁R₁.
• To attain this level of profit, entrepreneurs will employ more labourers.
• The tendency to employ more labour will stop once they reach point E.
• At all levels of employment beyond, ON₀, the aggregate demand curve is below the aggregate supply curve indicating loss to the producers.
• Hence they will never employ more than ON₀ labour.
• Thus effective demand concept becomes a crucial point in determining the equilibrium level of output in the capitalist economy or a free market economy in the Keynesian system.
• It is important to note that the equilibrium level of employment need not be the full employment level (N₁) from the Figure, it is understood that the difference between N₀ – N₁ is the level of unemployment.
• Thus the concept of effective demand becomes significant in explaining the under employment equilibrium.

Question 42 (a).
Explain Keynes psychological law of consumption function with diagram.
Answer:
The three propositions of the law

Proposition (1):
Income increases by Rs 60 crores and the increase in consumption is by Rs 50 crores.
Proposition (2):
The increased income of Rs 60 crores in each case is divided in some proportion between consumption and saving respectively, (i.e., Rs 50 crores and Rs 10 crores).
Proposition (3):
As income increases consumption as well as saving increase. Neither consumption nor saving has fallen.

Diagrammatically, the three propositions are explained in figure. Here, income is measured horizontally and consumption and saving are measured on the vertical axis. C is the consumption function curve and 45° line represents income consumption equality.

Proposition (1):
When income increases from 120 to 180 consumption also increases from 120 to 170 but the increase in consumption is less than the increase in income, 10 is saved.

Proposition (2):
When income increases to 180 and 240, it is divided in some proportion between consumption by 170 and 220 and saving by 10 and 20 respectively.

Proposition (3):
Increases in income to 180 and 240 lead to increased consumption 170 and 220 and increased saving 20 and 10 than before. It is clear from the widening area below the C curve and the saving gap between 45° line and C curve.

[OR]

(b) Explain the functions of money.
Answer:

1. Primary Functions:
(i) Money as a medium of exchange: This is considered as the basic function of money. Money has the quality of general acceptability, and all exchanges take place in terms of money.

(ii) Money as a measure of value: The second important function of money is that it measures the value of goods and services. In other words, the prices of all goods and services are expressed in terms of money. Money is thus looked upon as a collective measure of value.

2. Secondary Functions:
(i) Money as a Store of value: Savings done in terms of commodities were not permanent. But, with the invention of money, this difficulty has now disappeared and savings are now done in terms of money. Money also serves as an excellent store of wealth, as it can be easily converted into other marketable assets, such as, land, machinery, plant etc.

(ii) Money as a Standard of Deferred Payments: Borrowing and lending were difficult problems under the barter system. In the absence of money, the borrowed amount could be returned only in terms of goods and services. But the modem money-economy has greatly facilitated the borrowing and lending processes.

(iii) Money as a Means of Transferring Purchasing Power: The field of exchange also went on extending with growing economic development. The exchange of goods is now extended to distant lands.

3. Contingent Functions:
(i) Basis of the Credit System: Money is the basis of the Credit System. Business transactions are either in cash or on credit.

(ii) Money facilitates distribution of National Income: The task of distribution of national income was exceedingly complex under the barter system.

(iii) Money helps to Equalize Marginal Utilities and Marginal Productivities: Consumer can obtain maximum utility only if he incurs expenditure on various commodities in such a manner as to equalize marginal utilities accruing from them. Now in equalizing these marginal utilities, money plays an important role, because the prices of all commodities are expressed in money.

(iv) Money Increases Productivity of Capital: Money is the most liquid form of capital. In other words, capital in the form of money can be put to any use.

4. Other Functions:
(i) Money helps to maintain Repayment Capacity: Money possesses the quality of general acceptability. To maintain its repayment capacity, every firm has to keep assets in the form of liquid cash. The firm ensures its repayment capacity with money.

(ii) Money represents Generalized Purchasing Power: Purchasing power kept in terms of money can be put to any use. It is not necessary that money should be used only for the purpose for which it has been served.
(iii) Money gives liquidity to Capital: Money is the most liquid form of capital. It can be put to any use.

Question 43 (a).
Elucidate the functions of Commercial Banks.
Answer:
The functions of commercial banks are broadly classified into primary functions and secondary functions.

Functions of Commercial Banks
I. Primary Functions:
1. Accepting Deposits: It implies that commercial banks are mainly dependent on public deposits.
There are two types of deposits
(i) Demand Deposits: It refers to deposits that can be withdrawn by individuals without any prior notice to the bank. In other words, the owners of these deposits are allowed to withdraw money anytime by writing a withdrawal slip or a cheque at the bank counter or from ATM centres using debit card.

(ii) Time Deposits: It refers to deposits that are made for certain committed period of time. Banks pay higher interest on time deposits. These deposits can be withdrawn only after a specific time period by providing a written notice to the bank.

2. Advancing Loans: It refers to granting loans to individuals and businesses. Commercial banks grant loans in the form of overdraft, cash credit, and discounting bills of exchange.

II. Secondary Functions:
The secondary functions can be classified under three heads, namely, agency functions, general utility functions, and other functions.
1. Agency Functions: It implies that commercial banks act as agents of customers by performing various functions.

• Collecting Cheques: Banks collect cheques and bills of exchange on the behalf of
  their customers through clearing house facilities provided by the central bank.
• Collecting Income: Commercial banks collect dividends, pension, salaries, rents, and interests on investments on behalf of their customers. A credit voucher is sent to customers for information when any income is collected by the bank.
• Paying Expenses: Commercial banks make the payments of various obligations of customers, such as telephone bills, insurance premium, school fees, and rents.

2. General Utility Functions: It implies that commercial banks provide some utility services to customers by performing various functions.

• Providing Locker Facilities: Commercial banks provide locker facilities to its customers for safe custody of jewellery, shares, debentures, and other valuable items. This minimizes the risk of loss due to theft at homes. Banks are not responsible for the items in the lockers.
• Issuing Traveler’s Cheques: Banks issue traveler’s cheques to individuals for traveling outside the country. Traveler’s cheques are the safe and easy way to protect money while traveling.
• Dealing in Foreign Exchange: Commercial banks help in providing foreign exchange to businessmen dealing in exports and imports. However, commercial banks need to – take the permission of the Central Bank for dealing in foreign exchange.

3. Transferring Funds: It refers to transferring of funds from one bank to another. Funds are transferred by means of draft, telephonic transfer, and electronic transfer.

4. Letter of Credit: Commercial banks issue letters of credit to their customers to certify their creditworthiness.

• Underwriting Securities: Commercial banks also undertake the task of underwriting securities. As public has full faith in the credit worthiness of banks, public do not hesitate in buying the securities underwritten by banks.
• Electronic Banking: It includes services, such as debit cards, credit cards, and Internet banking.

III. Other Functions:

1. Money Supply: It refers to one of the important functions of commercial banks that help in increasing money supply.
2. Credit Creation: Credit Creation means the multiplication of loans and advances. Commercial banks receive deposits from the public and use these deposits to give loans:

[OR]

(b) Describe the Merger of Banks.
Answer:
Merger of Banks:

1. Union Cabinet decided to merge all the remaining five associate banks of State Bank Group with State Bank of India in 2017.
2. After the Parliament passed the merger Bill, the subsidiary banks have ceased to exist.
3. Five associates and the Bharatiya Mahila Bank have become the part of State Bank of India (SBI) beginning April 1, 2017.
4. This has placed State Bank of India among the top 50 banks in the world.
5. The five associate banks that were merged are State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT).
6. The other two Associate Banks namely State Bank of Indore and State Bank of Saurashtra had already been merged with State Bank of India.
7. After the merger, the total customer base of SBI increased to 37 crore with a branch network of around 24,000 and around 60,000 ATMs across the country.

Question 44 (a).
Explain the Adam Smith’s Theory of Absolute Cost Advantage Theory and Assumptions with diagram.
Answer:
Adam Smith’s Theory of Absolute Cost Advantage:
Adam Smith argued that all nations can be benefitted when there is free trade and specialisation in terms of their absolute cost advantage.

The Theory:
According to Adam Smith, the basis of international trade was absolute cost advantage.

Trade between two countries would be mutually beneficial when one country produces a commodity at an absolute cost advantage over the other country which in turn produces another commodity at an absolute cost advantage over the first country.

Assumptions:

1. There are two countries and two commodities (2×2 model).
2. Labour is the only factor of production.
3. Labour units are homogeneous.
4. The cost or price of a commodity is measured by the amount of labour required to produce it.
5. There is no transport cost.

Illustration:
Absolute cost advantage theory can be illustrated with the help of the following example.

Absolute Cost Advantage:

1. From the illustration, it is clear that India has an absolute advantage in the production of wheat over China and China has an absolute advantage in the production of cloth over India.
2. Therefore, India should specialize in the production of wheat and import cloth from China.
3. China should specialize in the production of cloth and import wheat from India.
4. This kind of trade would be mutually beneficial to both India and China.

[OR]

(b) Bring out the functions of World Bank.
Answer:
Functions of IBRD (or) World Bank:
The World Bank performs the major role of providing loans for development works to member countries, especially to underdeveloped countries. The World Bank provides long¬term loans for various development projects. Article 1 of the Agreement states the functions performed by the world bank as follows.
(i) Investment for productive purposes: The World Bank performs the function of assisting in the reconstruction and development of territories of member nations through facility of investment for productive purposes. It also encourages the development of productive facilities and resources in less developed countries.

(ii) Balanced growth of international trade: Promoting the long range balanced growth of trade at international level and the maintaining equilibrium in BOPs of member nations by encouraging international investment.

(iii) Provision of loans and guarantees: Arranging the loans or providing guarantees on loans by various other channels so as to execute important projects.

(iv) Promotion of foreign private investment: The promotion of private foreign investment by means of guarantees on loans and other investment made by private investors. The Bank supplements private investment by providing finance for productive purpose out of its own resources or from borrowed funds.

(v) Technical services: The World Bank facilitates different kinds of technical services to the member countries through Staff College and experts.

Question 45 (a).
Explain the scope of public finance.
Answer:
Scope of Public Finance:
The subject ‘Public Finance’ includes five major sub-divisions, viz., Public Revenue, Public Expenditure, Public Debt, Financial Administration and Fiscal Policy.

(i) Public Revenue:
Public revenue deals with the methods of raising public revenue such as tax and non-tax, the principles of taxation, rates of taxation, impact, incidence and shifting of taxes and their effects.

(ii) Public Expenditure:
This part studies the fundamental principles that govern the Government expenditure, effects of public expenditure and control of public expenditure.

(iii) Public Debt:

1. Public debt deals with the methods of raising loans from internal and external sources.
2. The burden, effects and redemption of public debt fall under this head.

(iv) Financial Administration:

1. This part deals with the study of the different aspects of public budget.
2. The budget is the Annual master financial plan of the Government.
3. The various objectives and steps in preparing a public budget, passing or sanctioning, allocation evaluation and auditing fall within financial administration.

(v) Fiscal Policy:
Taxes, subsidies, public debt and public expenditure are the instruments of fiscal policy.

[OR]

(b) Briefly explain causes for the increase in public debt.
Answer:
Causes for the Increase in Public debt:
The causes for enormous growth of public debt may be studied under the following sub-headings:
1. War and Preparation of war
Waging war has become one of the important causes for incurring debts by the governments. In modem times, the preparation for war and nuclear defence programmes take away the major share of the government’s revenue and so it incurs debt.

2. Social obligations
Modem states are considered to be ‘Welfare States and they have to undertake many social obligations like public health, sanitation, education,insurance, transport and communications, etc., besides providing the minimum necessaries of life to the citizens of the country. To finance these, the State has to incur a heavy public debt.

3. Economic Development and Deficit
The government has to undertake many projects for economic development of the country. Construction of railways, power projects, irrigation projects, heavy industries, etc., could be thought of only by means of mobilising resources in the form of public debt. Due to heavy public expenditure, the governments always face deficit budget. Such deficits have to be financed only through borrowings.

4. Employment
Most of the governments of modem days face the problem of unemployment and it has become the duty to solve this by making huge public expenditure. To solve the unemployment problem, and to fight recession, the government has to make huge expenditures. For this the States have to resort to public debt.

5. Controlling inflation
The Government can withdraw excess money from circulation, by raising public debt and thus prevent prices from rising.

6. Fighting depression
During the depression phase, private investment is lacking. The Government applies compensatory public spending by borrowing from internal and external sources.

Question 46 (a).
What is land pollution? Mention the causes of land pollution.
Answer:
The land pollution is defined as, “the degradation of land because of the disposal of waste on the land”. Any substance (solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such a way that it alters the environment causes land pollution.
Causes of Land Pollution:
(i) Deforestation and soil erosion:

1. Deforestation carried out to create dry lands is one of the major concerns.
2. Land that is once converted into a dry or barren land, can never be made fertile again, whatever the magnitude of measures to convert it.

(ii) Agricultural activities:

1. With growing human and pet animal population, demand for food has increased considerably.
2. Farmers often use highly toxic fertilizers and pesticides to get rid off insects, fungi and bacteria from their crops.
3. However the overuse of these chemicals, results in contamination and poisoning of land.

(iii) Mining activities:
During extraction and mining activities, several land spaces are created beneath the surface.

(iv) Landfills:

1. Each household produces tones of garbage each year due to changing economic lifestyle of the people.
2. Garbage like plastic, paper, cloth, wood and hospital waste get accumulated.
3. Items that cannot be recycled become a part of the landfills that cause land pollution.

(v) Industrialization:

1. Due to increasing consumerism more industries were developed which led to deforestation.
2. Research and development paved the way for modem fertilizers and chemicals that were highly toxic and led to soil contamination.

(vi) Construction activities:

1. Due to urbanization, large amount of construction activities are taking place.
2. This has resulted in large waste articles like wood, metal, bricks, plastic.
3. These are dumped at the outskirts of urban areas that lead to land pollution.

(vii) Nuclear waste:

1. The leftover radioactive materials, harmful and toxic chemicals affect human health.
2. They are dumped beneath the earth to avoid any casualty.

[OR]

(b) What are the effects of Land pollution?
Answer:
Effects of Land Pollution:
(i) Soil pollution:

1. Soil pollution is another form of land pollution, where the upper layer of the soil is damaged.
2. This is caused by the ovemse of chemical fertilizers, and pesticides.
3. This leads to loss of fertile land.
4. Pesticides kill not only pests and also human beings.

(ii) Health Impact:

1. The land when contaminated with toxic chemicals and pesticides lead to problem of skin cancer and human respiratory system.
2. The toxic chemicals can reach our body through foods and vegetables.

(iii) Cause for Air pollution:

1. Landfills and waste dumping lead to air pollution.
2. The abnormal toxic substances spread in the atmosphere cause transmit respiratory diseases among the masses.

(iv) Effect on wildlife:

1. The animal kingdom has suffered mostly in the past decades.
2. They face a serious threat with regards to loss of habitat and natural environment.
3. The constant human activity on land is leaving it polluted, forcing these species to move farther away.
4. Sometimes several species are pushed to the verge of extinction or disappear due to no conducive environment.

Question 47 (a).
Trace the evolution of economic planning in India.
Answer:
The evolution of planning in India is stated below:

(i) Sir M. Vishveshwarya (1934): a prominent engineer and politician made his first attempt in laying foundation for economic planning in India in 1934 through his book, “Planned Economy of India”. It was a 10 year plan.

(ii) Jawaharlai Nehru (1938): set-up “National Planning Commission” by a committee but due to the changes in the political era and second World War, it did not materialize.

(iii) Bombay Plan (1940): The 8 leading industrialists of Bombay presented “Bombay Plan”. It was a 15 Year Investment Plan.

(iv) S.N Agarwal (1944): gave the “Gandhian Plan” focusing on the agricultural and rural economy.

(v) M.N. Roy (1945): drafted ‘People’s Plan”. It was aiming at mechanization of agricultural production and distribution by the state only.

(vi) J.P. Narayan (1950): advocated, “Sarvodaya Plan” which was inspired by Gandhian Plan and with the idea of Vinoba Bhave. It gave importance not only for agriculture, but encouraged small and cottage industries in the plan.

[OR]

(b) Find the Standard Deviation of the following data:
14, 22, 9, 15, 20, 17, 12, 11
Answer:

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Maths Guide Pdf Chapter 4 Inverse Trigonometric Functions Ex 4.1 Textbook Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Maths Solutions Chapter 4 Inverse Trigonometric Functions Ex 4.1

Question 1.
Find all the values of x such that
Solution:
(i) sin x = 0
⇒ x = nπ
where n = 0, ±1, ±2, ±3, ……., ±10
(ii) sin x = -1
⇒ x = (4n – 1) \(\frac{\pi}{2}\), n = 0, ±1, ±2, ±3, 4

Question 2.
Find the period and amplitude of
Solution:
(i) y = sin 7x
For Amplitude use the form
y = a sin(bx – c) + d
Amplitude = |a|
a = 1, ∴ |a| = 1
Period using the formula = \(\frac{2π}{|b|}\) = \(\frac{2π}{|7|}\) = \(\frac{2π}{7}\)
∴ Amplitude = 1
Period = \(\frac{2π}{7}\)

(ii) y = -sin (\(\frac{1}{3}\)x)
a = -1, b = \(\frac{1}{3}\)
∴ Amplitude = |a| = |-1| = 1
Period = \(\frac{2π}{|b|}\) = \(\frac{2π}{| \frac{1}{3}|}\) = 3(2π) = 6π

(iii) y =4 sin (-2x)
a = 4, b = -2
Amplitude = |4| = 4
Period = \(\frac{2π}{|b|}\) = \(\frac{2π}{|-2|}\) = \(\frac{2π}{2}\) = π

Question 3.
Sketch the graph of y = sin (\(\frac{1}{3}\)x) for 0 ≤ x ≤ 6π
Solution:

Question 4.
Find the value of
(i) sin^-1 (sin(\(\frac{2π}{3}\)))
(ii) sin^-1 (sin(\(\frac{5π}{4}\)))
Solution:

Question 5.
For what value of x does sin x = sin^-1 x?
Solution:
sin x = sin^-1 x is possible only when x = 0 (∵ x ∈ R)

Question 6.
Find the domain of the following
(i) f(x) = sin^-1 (\(\frac{x²+1}{2x}\))
Solution:
f(x) = sin^-1 (\(\frac{x²+1}{2x}\))
Range of sin^-1x is [-1, 1]
-1 ≤ \(\frac{x²+1}{2x}\) ≤ 1
Multiply by 2x² ≥ 0

∴ solution is [-1, 1]

(ii) g (x) = 2 sin^-1 (2x – 1) – \(\frac{π}{4}\)
Range of 2 sin^-1 x is [-1, 1]
-1 ≤ 2x – 1 ≤ 1
2x – 1 ≤ 1 (or) 2x – 1 ≥ -1
2x ≤ 2 (or) 2x ≥ -1 + 1
x ≤ 1 (or) 2x ≥ 0 ⇒ x ≥ 0
x ≥ 0 and x ≤ 1
∴ solution is [0, 1]

Question 7.
Find the value of
(sin\(\frac{5π}{9}\) cos\(\frac{π}{9}\) + cos\(\frac{5π}{9}\) sin\(\frac{π}{9}\))
Solution:
sin (A + B) = sin A cos B + cos A sin B

Students can Download Tamil Nadu 12th Economics Model Question Paper 4 English Medium Pdf, Tamil Nadu 12th Economics Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 12th Economics Model Question Paper 4 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 3.00 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions: [20 × 1 = 20]

Question 1.
An economic system where the economic activities of a nation are done both by the private and public together is termed as……….
(a) Capitalistic Economy
(b) Socialistic Economy
(c) Globalisic Economy
(d) Mixed Economy
Answer:
(d) Mixed Economy

Question 2.
In a socialist economy, all decisions regarding production and distribution are taken by
(a) market forces
(b) central planning authority
(c) customs and traditions
(d) private sector
Answer:
(b) central planning authority

Question 3.
State whether the statements are true or false.
(i) Capitalism and Socialism are same approaches.
(ii) Capitalism and Socialism are two extreme and opposite approaches.
(a) Both (i) and (ii) are true
(b) Both (ii) and (ii) are false
(c) (i) is true but (ii) is false
(d) (i) is false but (ii) is true
Answer:
(d) (i) is false but (ii) is true

Question 4.
Net National product at factor cost is also known as………….
(a) National Income
(b) Domestic Income
(c) Per capita Income
(d) Salary
Answer:
(a) National Income

Question 5.
……….. helps to build economic models both in short run and long run.
(a) National Income
(b) Personal Income
(c) Per Capita Income
(d) State Income
Answer:
(d) State Income

Question 6.
Match the following and choose the correct answer by using codes given below:

Code:

Answer:
(a) A-2, B-1, C-4, D-3

Question 7.
Assertion (A): The Income method is called Factor Earning Method.
Reason (R): This method approaches National Income from the distribution side.
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’
(b) Both ‘A’ and ‘R’ are true but ‘R’ is not the correct explanation to ‘A’
(c) ‘A’ is true but ‘R’ is false
(d) ‘A’ is false but ‘R’ is true
Answer:
(a) Both ‘A’ and ‘R’ are true and ‘R’ is the correct explanation to ‘A’

Question 8.
Keynes theory pursues to replace, laissez faire by……….
(a) No government intervention
(b) Maximum intervention
(c) State intervention in certain situation
(d) Private sector intervention
Answer:
(c) State intervention in certain situation

Question 9.
……….. defines “Full employment as that level of employment at which any further increase in spending would resort in an inflationary spiral of wages and prices”
(a) Lerner
(b) J.M. Keynes
(c) J.B. Say
(d) Adam Smith
Answer:
(a) Lerner

Question 10.
State whether the statements are true or false.
(i) The function of money is a medium of exchange on the one side and a store of value on the other side is called Keynesianism. ‘
(ii) Macro approach to national problems.
(a) Both (i) and (ii) are true
(b) Both (i) and (ii) are false
(c) (i) is true but (ii) is false
(d) (i) is false but (ii) is true
Answer:
(a) Both (i) and (ii) are true

Question 11.
The multiplier tells us how much……….changes after a shift in………..
(a) Consumption, income
(b) investment, output
(c) savings, investment
(d) output, aggregate demand
Answer:
(d) output, aggregate demand

Question 12.
Accelerator Model was made by………..
(a) J.M. Keynes
(b) J.M. Clark
(c) R.F. Khan
(d) Marshall
Answer:
(b) J.M. Clark

Question 13.
Which of the following is correctly matched:
(a) Aggregate Income – C
(b) Consumption expenditure – I_A
(c) Autonomous Investment – Y
(d) Induced Private Investment – I_P
Answer:
(d) Induced Private Investment – I_P

Question 14.
During depression the level of economic activity becomes extremely………..
(a) high
(b) bad
(c) low
(d) good
Answer:
(c) low

Question 15.
Online Banking is also known as …………
(a) E-Banking
(b) Internet Banking
(c) RTGS
(d) NEFT
Answer:
(b) Internet Banking

Question 16.
Fixed Deposits are otherwise known as
(a) Bank Deposits
(b) Customer’s Deposits
(c) Time Deposits
(d) Money Deposits
Answer:
(c) Time Deposits

Question 17.
IMF is a prerequisite to become a member of
(a) SDR
(b) SAF
(c) World Bank
(d) SAF
Answer:
(c) World Bank

Question 18.
Environmental goods are ………….
(a) Market goods
(b) Non-market goods
(c) Both
(d) None of the above
Answer:
(b) Non-market goods

Question 19.
Expansion of NITI Aayog?
(a) National Institute to Transform India
(b) National Institute for Transforming India
(c) National Institution to Transform India
(d) National Institution for Transforming India
Answer:
(d) National Institution for Transforming India

Question 20.
Which of the following is not correctly matched:
(a) Financial planning
(b) NITI Aayog
(c) Seven pillars of effective governance
(d) Physical planning
Answer:
(c) Seven pillars of effective governance

PART – II

Answer any seven question in which Question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
Explain the Expenditure Method (Outlay Method) precautions. Precautions
Answer:

1. Second hand goods: The expenditure made on second hand goods should not be included.
2. Purchase of shares and bonds: Expenditures on purchase of old shares and bonds in the secondary market should not be included.
3. Transfer payments: Expenditures towards payment incurred by the government like old age pension should not be included.
4. Expenditure on intermediate goods: Expenditure on seeds and fertilizers by farmers, cotton and yam by textile industries are not to be included to avoid double counting. That is only expenditure on final products are to be included.

Question 22.
Give short note on frictional unemployment.
Answer:
Frictional Unemployment (Temporary Unemployment) :
Frictional unemployment arises due to imbalance between supply of labour and demand for labour. This is because of immobility of labour, lack of necessary skills, break down of machinery, shortage of raw materials etc. The persons who lose jobs and in search of jobs are also included under frictional unemployment.

Question 23.
Define Marginal Propensity to Save (MPS).
Answer:
Marginal Propensity to Save (MPS):
Marginal Propensity to Save is the ratio of change in saving to a change in income. MPS is obtained by dividing change in savings by change in income. It can be expressed algebraically as
MPS = \(\frac{ΔS}{ΔY}\)
ΔS = Change in Saving;
ΔY = Change in Income
Since MPC + MPS = 1
MPS = 1 – MPC and MPC = 1 – MPS

Question 24.
What is the meaning of trade cycle?
Answer:
Meaning of Trade Cycle
A Trade cycle refers to oscillations in aggregate economic activity particularly in employment, output, income, etc. It is due to the inherent contraction and expansion of the elements which energize the economic activities of the nation. The fluctuations are periodical, differing in intensity and changing in its coverage.

Question 25.
What is the meaning of Open Market Operations?
Answer:
In narrow sense, the Central Bank starts the purchase and sale of Government securities in the money market. In Broad Sense, the Central Bank purchases and sells not only Government securities but also other proper eligible securities like bills and securities of private concerns.

Question 26.
What is credit creation?
Answer:
Credit Creation means the multiplication of loans and advances. Commercial banks receive deposits from the public and use these deposits to give loans: However, loans offered are many times more than the deposits received by banks. This function of banks is known as ‘Credit Creation’.

Question 27.
State any two merits of trade.
Answer:

1. Trade is one of the powerful forces of economic integration.
2. The term ‘trade’ means exchange of goods, wares or merchandise among people.

Question 28.
What is Secular Disequilibrium?
Answer:
Secular Disequilibrium: The secular or long-run disequilibrium in BOP occurs because of long-run and deep seated changes in an economy as it advances from one stage of growth to another. In the initial stages of development, domestic investment exceeds domestic savings and imports exceed exports, as it happens in India since 1951.

Question 29.
Who are “dialogue partners”?
Answer:
The ASEAN, there are six “dialogue partners” which have been participating in its deliberations. They are China, Japan, India, South Korea, New Zealand and Australia.

Question 30.
Mention the indicators of development.
Answer:

1. Economic development is regarded as a process whereby there is an increase in the consumption of goods and services by individuals.
2. From the welfare perspective, economic development is defined as a sustained improvement in health, literacy and standard of living.

PART – III

Answer any seven question in which Question No. 40 is compulsory. [7 x 3 = 21]

Question 31.
Enumerate the features of mixed economy.
Answer:
Features of Mixed Economy:
1. Ownership of Property and Means of Production: The means of production and properties are owned by both private and public. Public and Private have the right to purchase, use or transfer their resources.

2. Coexistence of Public and Private Sectors: In mixed economies, both private and public sectors coexist. Private industries undertake activities primarily for profit. Public sector firms are owned by the government with a view to maximize social welfare.

3. Economic Planning: The central planning authority prepares the economic plAnswer: National plans are drawn up by the Government and both private and public sectors abide. In general, all sectors of the economy function according to the objectives, priorities and targets laid down in the plan.

4. Solution to Economic Problems: The basic problems of what to produce, how to produce, for whom to produce and how to distribute are solved through the price mechanism as well as state intervention.

5. Freedom and Control: Though private has freedom to own resources, produce goods and services and distribute the same, the overall control on the economic activities rests with the government.

Question 32.
What is the solution to the problem of double counting in the estimation of national income?
Answer:

1. The value obtained is actually the GNP at market prices. Care must be taken to avoid double counting.
2. The value of the final product is derived by the summation of all the values added in the productive process.
3. To avoid double counting, either the value of the final output should be taken into the estimate of GNP or the sum of values added should be taken.
4. Double counting is to be avoided under value added method.
5. Any commodity which is either raw material or intermediate good for the final production should not be included.
6. For example, value of cotton enters value of yam as cost, and value of yam in cloth and that of cloth in garments.
7. At every stage value added only should be calculated.

Question 33.
Mention the expenditure method (or) out-lay method.
Answer:
The Expenditure Method (Outlay method): The total expenditure incurred by the society in a particular year is added together. To calculate the expenditure of a society, it includes personal consumption expenditure, net domestic investment, government expenditure on consumption as well as capital goods and net exports. Symbolically,
GNP = C + I + G + (X – M)
C – Private consumption expenditure
I – Private Investment Expenditure
G – Government expenditure
X – M = Net exports

Question 34.
Discuss the estimating the national income through the Income Method precautions.
Answer:

1. Transfer payments are not to be included in estimation of national income as these payments are not received for any services provided in the current year such as pension, social insurance etc.
2. The receipts from the sale of second hand goods should not be treated as part of national income as they do not create new flow of goods or services in the current year.
3. Windfall gains such as lotteries are also not to be included as they do not represent receipts from any current productive activity.
4. Corporate profit tax should not be separately included as it has been already included as a part of company profit.

Question 35.
Specify the limitations of the multiplier.
Answer:

1. There is change in autonomous investment.
2. There is no induced investment
3. The marginal propensity to consume is constant.
4. Consumption is a function of current income.
5. There are no time lags in the multiplier process.
6. Consumer goods are available in response to effective demand for them.
7. There is a closed economy unaffected by foreign influences.
8. There are no changes in prices.
9. There is less than full employment level in the economy.

Question 36.
Explain the uses of multiplier.
Answer:
Uses of multiplier

1. Multiplier highlights the importance of investment in income and employment theory.
2. The process throws light on the different stages of trade cycle.
3. It also helps in bringing the equality between S and I.
4. It helps in formulating Government policies.
5. It helps to reduce unemployment and achieve full employment.

Question 37.
Write a note on metallic money.
Answer:

1. After the barter system and commodity money system, modem money systems evolved.
2. Among these, metallic standard is the premier one.
3. Under metallic standard, some kind of metal either gold or silver is used to determine the standard value of the money and currency.
4. Standard coins made out of the metal are the principal coins used under the metallic standard.
5. These standard coins are full bodied or full weighted legal tender.
6. Their face value is equal to their intrinsic metal value.

Question 38.
What is the meaning of Crypto currency?
Answer:
Crypto Currency:
A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a Central Bank,

Decentralised crypto currencies such as Bitcoin now provide an outlet for Personal Wealth that is beyond restriction and confiscation.

Question 39.
Write the TRIPs agreement.
Answer:
Agreement on Trade Related Intellectual Property Rights (TRIPs):

1. Intellectual Property Rights include copy right, trade marks, patents, geographical indications, trade secrets, industrial designs, etc.
2. TRIPS Agreement provides for granting product patents instead of process patents.
3. The period of protection will be 20 years for patents, 50 years for copy rights, 7 years for trade marks and 10 years for layout designs.
4. As a result of TRIPS, the dependence of LDCs on advanced countries for seeds, drugs, fertilizers and pesticides has increased.
5. Farmers are depending on the industrial firm for their seeds.

Question 40.
What is Crony capitalism?
Answer:
Social Organization:

1. People show interest in the development activity only when they feel that the fruits of development will be fairly distributed.
2. Mass participation in development programs is a pre-condition for accelerating the ‘ development process.
3. Whenever the defective social organization allows some groups to appropriate the benefits of growth.
4. Majority of the poor people do not participate in the process of development.
5. This is called crony capitalism.

PART – IV

Answer all the questions. [7 x 5 = 35]

Question 41 (a).
Explain the Aggregate Demand Function with Diagram.
Answer:
In the Keynesian model, output is determined mainly by aggregate demand. The aggregate demand is the amount of money which entrepreneurs expect to get by selling the output produced by the number of labourers employed.

Therefore, it is the expected income or revenue from the sale of output at different levels of employment.
Aggregate demand has the following four components:

1. Consumption demand
2. Investment demand
3. Government expenditure and
4. Net Export (export – import)

The desired or planned demand (spending) is the amount that households, firms, the governments and the foreign purchasers would like to spend on domestic output.

In other words, desired demand in the economy is the sum total of desired private consumption expenditure, desired investment expenditure, desired government spending and desired net exports (difference between exports and imports). Thus, the desired spending is called aggregate spending (demand), and can be expressed as:
AD = C + I + G + (X – M)
The diagram explains that aggregate demand price increases or decreases with an increase or decrease in the volume of employment. Aggregate demand curve increases at an increasing rate in the beginning and then increases at a decreasing rate.

This shows that as income increases owing to increase in employment, expenditure of the economy increases at a decreasing rate.

[OR]

(b) Describe the Effective demand.
Answer:

1. The starting point of Keynes theory of employment and income is the principle of effective demand.
2. Effective demand denotes money actually spent by the people on products of industry.
3. The money which entrepreneurs receive is paid in the form of rent, wages, interest and profit.
4. Therefore effective demand equals national income.
5. An increase in the aggregate effective demand would increase the level of employment.
6. A decline in total effective demand would lead to unemployment.
7. Therefore, total employment of a country can be determined with the help of total demand of a country.
8. According to the Keynes theory of employment, “Effective demand signifies the money spent on consumption of goods and services and on investment.
9. The total expenditure is equal to the national income, which is equivalent to the national output”.
10. The relationship between employment and output of an economy depends upon the level of effective demand which is determined by the forces of aggregate supply and aggregate demand.
    ED = Y = C + I = Output = Employment
11. Effective demand determines the level of employment in the economy.
12. When effective demand increases, employment will increase.
13. When effective demand decreases, the level employment will decline.
14. The effective demand will be determined by two determinants namely consumption and investment expenditures.
15. The consumption function depends upon income of the people and marginal propensity to consume.
16. According to Keynes, if income increases, consumption will also increase but by less than the increase in income.

Question 42 (a).
Illustrate the working of Multiplier.
Answer:
Working of Multiplier:
1. Suppose the Government undertakes investment expenditure equal to Rs 100 crore on some public works, by way of wages, price of materials etc.
2. Thus income of labourers and suppliers of materials increases by Rs 100 crore. Suppose the MPC is 0.8 that is 80 %.
3. A sum of Rs 80 crores is spent on consumption (A sum of Rs 20 Crores is saved).
4. As a result, suppliers of goods get an income of Rs 80 crores.
5. They intum spend Rs 64 crores (80% of Rs 80 cr).
In this manner consumption expenditure and increase in income act in a chain like manner. The final result is ΔY = 100 + 100 × 4/5 + 100 × [4/5]² + 100 × [4/5]³ or,
ΔY = 100 + 100 × 0.8 + 100 × (0.8)² + 100 × (0.8)³
= 100 + 80+ 64 + 51.2… = 500
that is 100 × 1/1 – 4/5
100 × 1/1/5
100 × 5 = Rs 500 crores
For instance if C = 100 + 0.8Y, I = 100,
Then Y = 100+ 0.8Y + 100
0. 2Y = 200
Y = 200/0.2 = 1000 → Point B
If I is increased to 110, then
0. 2Y = 210
Y = 210/0.2 = 1050 → Point D
For Rs 10 increase in I, Y has increased by Rs 50.
This is due to multiplier effect.
At point A, Y = C = 500
C = 100 + 0.8 (500) = 500; S = 0
At point B, Y = 1000
C = 100 + 0.8 (1000) = 900; S = 100 = I
At point D, Y = 1050
C = 100 + 0.8 (1050) = 940; S = 110 = I
When I is increased by 10, Y increases by 50.
This is multiplier effect (K = 5)
K = \(\frac{1}{0.2}\) = 5

[OR]

(b) Explain about Marginal Efficiency of Capital [MEC] short run factors and long run factors.
Answer:
(a) Short – Run Factors
(i) Demand for the product:

• If the market for a particular good is expected to grow and its costs are likely to fall, the rate of return from investment will be high.
• If entrepreneurs expect a fall in demand for goods and a rise in cost, the investment will decline.

(ii) Liquid assets:

• If the entrepreneurs are holding large volume of working capital, they can take advantage of the investment opportunities that come in their way.
  The MEC will be high.

(iii) Sudden changes in income:

• The MEC is also influenced by sudden changes in income of the entrepreneurs.
• If the business community gets windfall profits, or tax concession the MEC will be high and hence investment in the country will go up.
• On the other hand, MEC falls with the decrease in income.

(iv) Current rate of investment:

• Another factor which influences MEC is the current rate of investment in a particular industry.
• If in a particular industry, much investment has already taken place and the rate of investment currently going on in that industry is also very large, then the marginal efficiency of capital will be low.

(v) Waves of optimism and pessimism:

1. The marginal efficiency of capital is also affected by waves of optimism and pessimism in the business cycle.
2. If businessmen are optimistic about future, the MEC will be likely to be high.
3. During periods of pessimism the MEC is under estimated and so will be low.

(b) Long – Run Factors
The long run factors which influence the marginal efficiency of capital are as follows:
(i) Rate of growth of population:

• Marginal efficiency of capital is also influenced by the rate of growth of population.
• If population is growing at a rapid speed, it is usually believed that the demand of various types of goods will increase.
• So a rapid rise in the growth of population will increase the marginal efficiency of capital and a slowing down in its rate of growth will discourage investment and thus reduce marginal efficiency of capital.

(ii) Technological progress:

• If investment and technological development take place in the industry, the prospects of increase in the net yield brightens up.
• For example, the development of automobiles in the 20th century has greatly stimulated the rubber industry, the steel and oil industry etc.
• So we can say that inventions and technological improvements encourage investment in various projects and increase marginal efficiency of capital.

(iii) Monetary and Fiscal policies:
Cheap money policy and liberal tax policy pave the way for greater profit margin and so MEC is likely to be high.

(iv) Political environment:
Political stability, smooth administration, maintenance of law and order help to improve MEC.

(v) Resource availability:
Cheap and abundant supply of natural resources, efficient labour and stock of capital enhance the MEC.

Question 43 (a).
Briefly explain the Monetary Economics and money.
Answer:
Monetary Economics is a branch of economics that provides a framework for analyzing money and its functions as a medium of exchange, store of value and unit of account. It examines the effects of monetary systems including regulation of money and associated financial institutions.

Meaning

1. Money is anything that is generally accepted as payment for goods and services and repayment of debts and that serves as a medium of exchange.
2. A medium of exchange is anything that is widely accepted as a means of payments.
3. In recent years, the importance of credit has increased in all the countries of the world.
4. Credit instruments are used on an extensive scale.
5. The use of cheques, bills of exchange, etc., has gone up.
6. It should however, be remembered that money is the basis of credit.

[OR]

(b) What are the objectives of Monetary Policy? Explain.
Answer:
The specific objectives of monetary policy are Objectives of monetary policy:

1. Neutrality of Money
2. Stability of Exchange Rates
3. Price Stability
4. Full Employment
5. Economic Growth
6. Equilibrium in the Balance of Payments

1. Neutrality of Money:

• Economists like Wicksteed, Hayek and Robertson are the chief exponents of neutral money.
• They hold the view that monetary authority should aim at neutrality of money in the economy.
• Monetary changes could be the root cause of all economic fluctuations.
• According to neutralists, the monetary change causes distortion and disturbances in the proper operation of the economic system of the country.

2. Exchange Rate Stability:

• Exchange rate stability was the traditional objective of monetary authority.
• This was the main objective under Gold Standard among different countries.
• When there was disequilibrium in the balance of payments of the country, it was automatically corrected by movements.

3. Price Stability:

• Economists like Crustave Cassel and Keynes suggested price stabilization as a main objective of monetary policy.
• Price stability is considered the most genuine, objective of monetary policy.
• Stable prices repose public confidence,
• It promotes business activity and ensures equitable distribution of income and wealth.

4. Full Employment:

• During world depression, the problem of unemployment had increased rapidly.
• It was regarded as socially dangerous, economically wasteful and morally deplorable.
• Thus, full employment was considered as the main goal of monetary policy.

5. Economic Growth:

• Economic growth is the process whereby the real per capita income of a country increases over a long period of time.
• It implies an increase in the total physical or real output, production of goods for the satisfaction of human wants.
• Monetary policy should promote sustained and continuous economic growth by maintaining equilibrium between the total demand for money and total production capacity and further creating favourable conditions for saving and investment.

6. Equilibrium in the Balance of Payments:
Equilibrium in the balance of payments is another objective of monetary policy which emerged significant in the post war years.

Question 44 (a).
What do you mean by balance of payments?
Answer:
Balance of Payments (BOP):
1. BoP is a systematic record of a country’s economic and financial transactions with the rest of the world over a period of time.

2. When a payment is received from a foreign country, it is a credit transaction while a payment to a foreign country is a debit transaction.

3. The principal items shown on the credit side are exports of goods and services, transfer receipts in the form of gift etc., from foreigners, borrowing from abroad, foreign direct investment and official sale of reserve assets including gold to foreign countries and international agencies.

4. The principal items on the debit side include imports of goods and services, transfer payments to foreigners, lending to foreign countries, investments by residents in foreign countries and official purchase of reserve assets or gold from foreign countries and international agencies.

[OR]

(b) Explain the relationship between Foreign Direct Investment and economic development.
Answer:
Foreign Direct Investment (FDI) and Trade:

1. FDI is an important factor in global economy.
2. Foreign trade and FDI are closely related. In developing countries like India
3. FDI in the natural resource sector, including plantations, increases trade volume.
4. Foreign production by FDI is useful to substitute foreign trade. .
5. FDI is also influenced by the income generated from the trade and regional integration schemes.
6. FDI is helpful to accelerate the economic growth by facilitating essential imports needed for carrying out development programmes like capital goods, technical know-how, raw materials and other inputs and even scarce consumer goods.
7. FDI may be required to fill the trade gap.
8. FDI is encouraged by the factors such as foreign exchange shortage, desire to create employment and acceleration of the pace of economic development.
9. Many developing countries strongly prefer foreign investment to imports.
10. However, the real impact of FDI on different sections of an economy.

Question 45 (a).
Describe the Types of Terms of Trades.
Answer:
Types of Terms of Trade:
The different concepts of terms of trade were classified by Gerald M.Meier into the following three categories:
Terms of Trade related to the Ratio of Exchange between Commodities:

1. Net Barter Terms of Trade:
This type was developed by Taussig in 1927. The ratio between the prices of exports and of imports is called the “net barter terms of trade’. It is named by Viner as the ‘commodity terms of trade’.
It is expressed as:
T_n = (P_x / P_m) × 100
Where,
T_n = Net Barter Terms of Trade
P_x = Index number of export prices
P_m = Index number of import prices
This is used to measure the gain from international trade. If ‘T_n’ is greater than 100, then it is a favourable terms of trade which will mean that for a rupee of export, more of imports can be received by a country.

2. Gross Barter Terms of Trade:
This was developed by Taussig in 1927 as an improvement over the net terms of trade. It is an index of relationship between total physical quantity of imports and the total physical quantity of exports.
T_g = (Q_m / Q_x) × 100
Where,
Q_m = Index of import quantities
Q_x = Index of export quantities
If for a given quantity of export, more quantity of import can be consumed by a country, then one can say that terms of trade are favourable.

3. Income Terms of Trade:
The income terms of trade was given by G.S.Dorrance in 1948. It is the index of the value of exports divided by the price index for imports multiplied by quantity index of experts. In other words, it is the net barter terms of trade of a country multiplied by its exports- volume index.
T_y = (P_x / P_m ) Q_x
Where,
P_x = Price index of exports
P_m = Price index of imports
Q_x = Quantity index of exports

[OR]

(b) Write a note on ‘BRICS’.
Answer:
BRICS:

1. BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.
2. Since 2009, the BRICS nations have met annually at formal summits.
3. South Africa hosted the 10th BRICS summit in July 2018.
4. The agenda for BRICS summit 2018 includes Inclusive growth, Trade issues, Global governance, Shared Prosperity, International peace and security.
5. It’s headquarters is at Shanghai, China.
6. The New Development Bank (NDB) formerly referred to as the BRICS Development Bank was established by BRICS States.
7. The first BRICS summit was held at Moscow and South Africa hosted the Tenth Conference at Johanesberg in July 2018.
8. India had an opportunity of hosting fourth and Eighth summits in 2009 and 2016 respectively.
9. The BRICS countries make up 21 percent of global GDP. They have increased their share of global GDP threefold in the past 15 years.
10. The BRICS are home to 43 percent of the world’s population.
11. The BRICS countries have combined foreign reserves of an estimated $4.4 trillion

Question 46 (a).
Bringout the objectives of SAARC.
Answer:
Objectives of SAARC:
According to Article I of the Charter of the SAARC, the objectives of the Association are as follows:

1. To promote the welfare of the people of South Asia and improve their quality of life;
2. To accelerate economic growth, social progress and cultural development in the region;
3. To promote and strengthen collective self-reliance among the countries of South Asia;
4. To contribute to mutual trust, understanding and appreciation of one another’s problems;
5. To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields;
6. To strengthen co-operation with other developing countries;
7. To strengthen cooperation among themselves in international forums on matters of common interest;
8. To cooperate with international and regional organisations with similar aims and purposes.

[OR]

(b) Explain the principles of federal finance.
Answer:
Principles of Federal Finance:
In the case of federal system of finance, the following main principles must be applied:

1. Principle of Independence.
2. Principle of Equity.
3. Principle of Uniformity.
4. Principle of Adequacy.
5. Principle of Fiscal Access.
6. Principle of Integration and coordination.
7. Principle of Efficiency.
8. Principle of Administrative Economy.
9. Principle of Accountability.

1. Principle of Independence:

• Under the system of federal finance, a Government should be autonomous and free about the internal financial matters concerned.
• It means each Government should have separate sources of revenue, authority to levy taxes, to borrow money and to meet the expenditure.
• The Government should normally enjoy autonomy in fiscal matters.

2. Principle of Equity:
From the point of view of equity, the resources should be distributed among the different states so that each state receives a fair share of revenue.

3. Principle of Uniformity:
In a federal system, each state should contribute equal tax payments for federal finance.

4. Principle of Adequacy of Resources:

• The principle of adequacy means that the resources of each Government i.e. Central and State should be adequate to carry out its functions effectively.
• Here adequacy must be decided with reference to both current as well as future needs.
• Besides, the resources should be elastic in order to meet the growing needs and unforeseen expenditure like war, floods etc.

5. Principle of Fiscal Access:

• In a federal system, there should be possibility for the Central and State Governments to develop new source of revenue within their prescribed fields to meet the growing financial needs.
• In nutshell, the resources should grow with the increase in the responsibilities of the Government.

6. Principle of Integration and coordination:

• The financial system as a whole should be well integrated.
• There should be perfect coordination among different layers of the financial system of the country.
• Then only the federal system will survive.
• This should be done in such a way to promote the overall economic development of the country.

7. Principle of Efficiency:

• The financial system should be well organized and efficiently administered.
• Double taxation should be avoided.

8. Principle of Administrative Economy:

• Economy is the important criterion of any federal financial system.
• That is, the cost of collection should be at the minimum level and the major portion of revenue should be made available for the other expenditure outlays of the Governments.

9. Principle of Accountability:
Each Government should be accountable to its own legislature for its financial decisions i.e. the Central to the Parliament and the State to the Assembly.

Question 47 (a).
What are the similarities of Public and Private Finance?
Answer:
(i) Rationality:

• Both public finance and private finance are based on rationality.
• Maximization of welfare and least cost factor combination underlie both.

(ii) Limit to borrowing:

• Both have to apply restraint with regard to borrowing.
• The Government also cannot live beyond its means.
• There is a limit to deficit financing by the state also.

(iii) Resource utilisation:

• Both the private and public sectors have limited resources at their disposal.
• So both attempt to make optimum use of resources.

(iv) Administration:

• The effectiveness of measures of the Government as well as private depends on the administrative machinery.
• If the administrative machinery is inefficient and corrupt it will result in wastages and losses.

[OR]

(b) What are the functions of NITI Aayog?
Answer:
Functions of NITI Aayog:

1. Cooperative and Competitive Federalism: To enable the States to have active participation in the formulation of national policy.
2. Shared National Agenda: To evolve a shared vision of national development priorities and strategies with the active involvement of States.
3. Decentralized Planning: To restructure the planning process into a bottom-up model.
4. Vision and Scenario Planning: To design medium and long-term strategic frameworks towards India’s future.
5. Network of Expertise: To mainstream external ideas and expertise into government policies and programmes through a collective participation.
6. Harmonization: To facilitate harmonization of actions across different layers of government, especially when involving cross-cutting and overlapping issues across multiple sectors; through communication, coordination, collaboration and convergence amongst all the stakeholders.
7. Conflict Resolution: To provide platform for mutual consensus to inter-sectoral, inter¬departmental, inter-state as well as centre-state issues for all speedy execution of the government programmes.
8. Coordinating Interface with the World: It will act nodal point to harness global expertise and resources coming from International organizations for India’s developmental process.
9. Internal Consultancy: It provides internal consultancy to Central and State governments on policy and programmes.
10. Capacity Building: It enables to provide capacity building and technology up-gradation across government, benchmarking with latest global trends and providing managerial and technical know-how.
11. Monitoring and Evaluation: It will monitor the implementation of policies and progammes and evaluate the impacts.

Students can download 6th Science Term 2 Chapter 5 The Cell Questions and Answers, Notes, Samacheer Kalvi 6th Science Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 6th Science Solutions Term 2 Chapter 5 The Cell

Samacheer Kalvi 6th Science The Cell Text Book Back Questions and Answers

I. Choose the correct answer:

Question 1.
The unit of measurement used for expressing dimension (size) of cell is
(a) centimeter
(b) millimeter
(c) micrometer
(d) meter
Answer:
(c) micrometer

Question 2.
Under the microscope, Priya observes a cell that has a cell wall and a distinct nucleus. The cell that she observed is
(a) a plant cell
(b) an animal cell
(c) a nerve cell
(d) a bacteria cell
Answer:
(d) a bacteria cell

Question 3.
A ‘control centre’ of the eukaryotic cell is
(a) Cell wall
(b) Nucleus
(c) Vacuoles
(d) Chloroplast
Answer:
(b) Nucleus

Question 4.
Which one of the following is not a unicellular organism?
(a) Yeast
(b) Amoeba
(c) Spirogyra
(d) Bacteria
Answer:
(c) Spirogyra

Question 5.
Most organelles in a eukaryotic cell are found in the
(a) Cell wall
(b) cytoplasm
(c) nucleus
(d) Vacuole
Answer:
(b) cytoplasm

II. Fill in the Blanks

1. The instrument used to observe the cell is ………..
2. I control the food production of a cell. Who am I? ………..
3. I am like a policeman. Who am I ………?
4. The Term “cell” was coined by ………..
5. The egg of an Ostrich is the ……….. single cell.

Answer:

1. Microscope
2. Chloroplast
3. Cell membrane
4. Robert Hooke
5. Largest

III. True or False. If False, give the correct answer.

1. A cell is the smallest unit of life.
2. Nerve cell is the longest cell
3. Prokaryotes were the first form of life on earth.
4. The organelles of both plants and animals are made up of cells. (Organelles – Found inside the cell)
5. New cells are produced from existing cells.

Answer:

1. True
2. True
3. True
4. False
5. True

IV. Match the following

Answer:
1. – c
2. – d
3. – e
4. – a
5. – b

V. Arrange in a correct sequence

Question 1.
Elephant, Cow, Bacteria, Mango, Rose plant.
Answer:
Bacteria, Mango, Rose plant, Cow, Elephant.

Question 2.
Hen Egg, Ostrich egg, Insect egg.
Answer:
Insect egg, Hen egg, Ostrich egg

VI. Analogy

1. Prokaryote : Bacteria :: Eukaryote : ………..
2. Spirogyra : Plant cell :: Amoeba : ………….
3. Food producer : Chloroplasts :: Power house : …………

Answer:

1. Plants, Animals
2. Animal cell
3. Mitochondria

VII. Give a Very short answer:

Question 1.
Who discovered the cell in 1665?
Answer:
The English scientist Robert Hooke discovered the cell in 1665 from cork slices kept under a microscope.

Question 2.
What type of cells do we have?
Answer:
We have a Eukaryotic type of cells.

Question 3.
What are the essential components of a cell?
Answer:
A typical cell consists of three major parts.

1. An outer cell membrane
2. A liquid cytoplasm
3. Nucleus

Question 4.
What are the organelles found only in plant cells?
Answer:

1. Cell wall
2. Chloroplast

Question 5.
Give any three examples of eukaryotic cells.
Answer:

1. Plant cells
2. Animal cells
3. Most of fungi and Algae

Question 6.
Which one is called as “Area of movement”?
Answer:
The cytoplasm is a watery, gel-like material in which cell parts move. So it is known as an “Area of movement”.

Question 7.
Shiva said, “Bigger onion has larger cells when compared to the cells of the smaller onion”! Do you agree with his statement or not? Explain why?
Answer:
No, the big onion and small onion both of them have plant cell and the size of every cell remains the same whether it is of a small onion or big one. The shape is larger means that the number of cells is more in bigger onion.

VIII. Give a short answer:

Question 1.
Why cells are called building blocks of life?
Answer:
A brick is a basic building block of a wall, likewise, the cells are the basic structural and functional unit of every living organism. So the cells are called as building blocks of life.

Question 2.
Identify any four parts of the plant cell?

Answer:
A – Cell Wall,
B – Cytoplasm,
C – Nucleus,
D – Mitochondria

Question 3.
Distinguish between prokaryotic and eukaryotic cells
Answer:

Question 4.
Make sketches of animal and plant cells which you observe under the microscope.
Answer:

Cell Wall & Chloroplasts – Absent in Animal Cells
Centrioles – Absent in Plant Cells

Question 5.
Write about the contribution of Robert Hooke in cell biology
Answer:
Robert Hooke was a scientist and inventor. He improved the microscope and built a compound microscope. One day he made thin sections of the cork and observed many small identical chambers through his microscope. They were hexagonal in shape. Based on these observations Hooke published a book named Micrographia in the year 1665, where he first used the term Cell. He describes the structure of tissue using the term cell.

IX. Answer in detail:

Question 1.
Tabulate any five cell organelles and their function.
Answer:

Question 2.
Draw a neat labelled diagram of a prokaryotic cell.
Answer:

X. Project (For Students)

Question 1.
Use your imagination and create a 3-D model of a plant cell?

Question 2.
You can use numerous food materials such as jelly and some cake to make a cell body. Cell organelles can be made using nuts and dry fruits. You can display the model in your classroom and invite teachers or students from other classes to rise questions on the project and try to give answers.

Samacheer Kalvi 6th Science The Cell Additional Important Questions and Answers

I. Choose the right answer:

Question 1.
The first cell formed in the earth
(a) Eukaryotic cell
(b) Algal cell
(c) Fungal cell
(d) Prokaryotic cell
Answer:
(d) Prokaryotic cell

Question 2.
Robert Hooke published a book named ______ in the year 1665.
(a) Cellula
(b) Micrographia
(c) Cell biology
(d) Organelles
Answer:
(b) Micrographia

Question 3.
The pigment present in leaf to absorb light is
(a) chlorophyll
(b) chloroplast
(c) chromoplast
(d) leucoplast
Answer:
(a) chlorophyll

Question 4.
The largest cell is the egg of an ______ with 170-millimeter width.
(a) Ostrich
(b) viper
(c) tortoise
(d) Hen
Answer:
(a) Ostrich

II. Assertion and Reason

Question 1.
Assertion (A) : Chloroplast is a cell organelle
Reason (R) : An organelle is a distinct part of the cell which has a particular structure and Function.
(a) Assertion (A) and Reason R – True and R is the correct explanation of A
(b) Both A and R – true but R is not the correct explanation of A
(c) A True but R False
(d) A False but R True
Answer:
(a) Assertion (A) and Reason R – True and R is the correct explanation of A

Question 2.
Assertion (A) : Mitochondria is an important organ cell of the cell
Reason (R) : Mitochondria is involved in food preparation
(a) Assertion (A) and Reason R – True and R is the correct explanation of A
(b) Both A and R – true but R is not the correct explanation of A
(c) A True but R False
(d) A False but R True
Answer:
(c) A True but R False

III. Match the Following:

Answer:
1. – B
2. – D
3. – E
4. – C

IV. Very Short Answer:

Question 1.
Arrange the following cells in the order of their size.
(a) Bacteria cell
(b) Frogs egg
(c) Hen’s egg
(d) Human egg.
Answer:
(a) Bacterial cell
(b) Human egg
(c) Frogs egg
(d) Hen’s egg

Question 2.
How do you distinguish between living and dead cells?
Answer:
Living cells have a nucleus (Eg.) Onion peel cells.
Non-Living cells don’t have a nucleus (Eg.) Cork ceils.

Question 3.
Name the largest Angiosperm cell
Answer:
The largest Angiosperm cell is citrus reticulata (clearly visible in orange pulp) & citrus maxima.

Question 4.
Name the organelle without membrane.
Answer:
Ribosomes are the cell organelle in which the membrane is absent.

Question 5.
Identify the following diagram and label A, B, C, D

Answer:
The diagram is the structure of the chloroplast
A – outer membrane
B – inner membrane
C – Thylakoid
D – stroma

Question 6.
Identify the following diagram and label A, B, C

Answer:
A – Outer Membrane
B – Cristae
C – Matrix

Question 7.
Identify the following diagram and label A, B, C

Answer:
Structure of Nucleus
A – Nuclear membrane
B – Nuclear pore
C – Nucleolus
D – Chromatin reticulum

Students can download 10th Science Chapter 23 Visual Communication Questions and Answers, Notes, Samacheer Kalvi 10th Science Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 10th Science Solutions Chapter 23 Visual Communication

Samacheer Kalvi 10th Science Visual Communication Text Book Back Questions and Answers

I. Choose the best answer:

Question 1.
Which software is used to create animation?
(a) Paint
(b) PDF
(c) MS Word
(d) Scratch
Answer:
(d) Scratch

Question 2.
All files are stored in the _______.
(a) folder
(b) box
(c) pai
(d) scanner.
Answer:
(a) folder

Question 3.
Which is used to build scripts?
(a) Script area
(b) Block palette
(c) Stage
(d) Sprite
Answer:
(a) Script area

Question 4.
Which is used to edit programs?
(a) Inkscape
(b) Script editor
(c) Stage
(d) Sprite.
Answer:
(b) Script editor

Question 5.
Where you will create category of blocks?
(a) Block palette
(b) Block menu
(c) Script area
(d) sprite
Answer:
(b) Block menu

II. Match the following:

Answer:
A. (v)
B. (iv)
C. (ii)
D. (iii)
E. (i)

III. Answer the following:

Question 1.
What is Scratch?
Answer:
Scratch is a software used to create animations, cartoons and games easily. Scratch, on the other hand, is a visual programming language.

Question 2.
Write a short note on the editor and its types.
Answer:
Editors or text Editors are software programs that enable the user to create and edit text files Editors are generally classified into 5 types as,

1. Line Editor [Ex: teco]
2. Stream Editor [Ex: Sed]
3. Screen Editor [Ex: Notepad]
4. Word processors [Ex: MS – word]
5. Structure Editor [Ex: Netbeans IDE].

Question 3.
What is stage?
Answer:
Stage is the background appearing when we open the scratch window. The background will most often be white. You can change the background colour as you like.

Question 4.
What is Sprite?
Answer:
The characters on the background of a Scratch window are known as Sprite. Usually, a cat appears as a sprite when the Scratch window is opened. The software provides facilities to make alternations in the sprite.

Samacheer Kalvi 10th Science Visual Communication Additional Important Questions and Answers

I. Choose the best answer:

Question 1.
The output we get from any application is commonly referred as
(a) file
(b) data
(c) record
(d) folder
Answer:
(a) file

Question 2.
_______ is used to choose the block to use.
(a) Script area
(b) Block palette
(c) Block menu
(d) Sprite.
Answer:
(b) Block palette

Question 3.
Which app is used, we can draw and edit pictures?
(a) My computer
(b) Notepad
(c) Paint
(d) Games
Answer:
(c) Paint

Question 4.
Choose the odd one from the following _______.
(a) File
(b) Folder
(c) Memory space
(d) Mouse.
Answer:
(d) Mouse.

Question 5.
Write a good example for visual communication.
(a) Picture
(b) Cinema
(c) Radio
(d) FM
Answer:
(b) Cinema

Question 6.
Choose the wrong statement from the following statements _______.
(a) The scripts tab contains additional tabs of costumes and sounds.
(b) Block palette is used to choose the block to use.
(c) The right contains additional tabs of costumes and sounds.
(d) Scratch is software.
Answer:
(a) The scripts tab contains additional tabs of costumes and sounds.

Question 7.
Choose the incorrect pair:
(a) Windows – operating system
(b) Visual – Cinema
(c) Costume – editor
(d) Stage – a input device
Answer:
(d) Stage – a input device

Question 8.
Identify which is not a file format _______.
(a) CSS
(b) PSO
(c) PNG
(d) EPS.
Answer:
(b) PSO

Question 9.
Choose the incorrect statement:
(a) More people are using windows operating system.
(b) We can collect our notes in Notepad application.
(c) We can draw pictures in paint application.
(d) A folder is a file name.
Answer:
(d) A folder is a file name.

Question 10.
The start button is present in the ______ corner of the computer.
(a) Center
(b) top
(c) left
(d) right.
Answer:
(c) left

Question 11.
Assertion (A) : Pictures and audio-visuals gives us more understanding than teaching and writing on the black board.
Reason (R) : The device which helps in explaining the concepts easily through pictures is known as visual communication device.
(a) Both assertion and reason are true, and reason is the correct explanation assertion.
(b) Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) Assertion is true but reason is false.
(d) Assertion is false but reason is true.
Answer:
(a) Both assertion and reason are true, and reason is the correct explanation assertion.

Question 12.
Pick the odd one out:
(a) LINUX
(b) Paint
(c) Spread sheet
(d) PPTs
Answer:
(a) LINUX

II. Match the following:

Answer:
A – (iii)
B – (i)
C – (iv)
D – (ii)

III. Answer the following:

Question 1.
What is the reason, we prefer computer?
Answer:
The reason, we prefer computer is its speed and the ability to store data.

Question 2.
What is a folder?
Answer:
A folder is a storage space that contains multiple files. We can create files as per the user’s need.

Question 3.
What is a file?
Answer:
The output we get from any application is commonly referred as file.
Therefore, the application for the specific purposes determines the nature of the file.

Question 4.
Name the different parts of Scratch Editor?
Answer:

• Stage
• Sprite
• Script Editor / Costume Editor.

Question 5.
Explain the using script editor?
Answer:
Script editor / costume editor: Where you edit your programs or your sprite’s pictures.
You should see a single window with at least the following three panes: the stage (top left), the Sprite List (bottom left), and the Scripts tab (right), which contains the Blocks tab and the Scripts Area. The right pane also contains two additional tabs, Costumes and Sounds.
The script editor has three main parts:

1. Script area: Where you build scripts.
2. Block menu: Where you choose the category of blocks (programming statements) to use.
3. Block palette: Where your choose the block to use.

Question 6.
Write a note on Script editor.
Answer:
Script editor/costume editor: Where you edit your programs or your sprite’s pictures. You should see a single window with at least the following three panes: the Stage (top left), the Sprite List (bottom left), and the Scripts tab (right), which contains the Blocks tab and the Scripts Area. The right pane also contains two additional tabs, Costumes and Sounds.

Students can download 6th Science Term 2 Chapter 2 Electricity Questions and Answers, Notes, Samacheer Kalvi 6th Science Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 6th Science Solutions Term 2 Chapter 2 Electricity

Samacheer Kalvi 6th Science Electricity Text Book Back Questions and Answers

I. Choose the correct answer:

Question 1.
The device which converts chemical energy into electrical energy is
(a) fan
(b) solar cell
(c) cell
(d) television
Answer:
(c) cell

Question 2.
Electricity is produced in
(a) transformer
(b) power station
(c) electric wire
(d) television
Answer:
(b) power station

Question 3.
Choose the symbol for battery

Answer:

Question 4.
In which among the following circuits does the bulb glow?

Answer:

Question 5.
_______ is a good conductor
(a) silver
(c) rubber
(b) wood
(d) plastic
Answer:
(a) silver

II. Fill in the Blanks

1. ………. are the materials which allow electric current to pass through them.
2. Flow of electricity through a closed circuit is …………
3. ……… is the device used to close or open an electric circuit.
4. The long perpendicular line in the electrical symbol represents its ………… terminal.
5. The combination of two or more cells is called a ………..

Answer:

1. Conductors
2. electric current
3. Key
4. positive
5. battery

III. True or False. If False, give the correct answer.

1. In a parallel circuit, the electricity has more than one path.
2. To make a battery of two cells, the negative terminal of one cell is connected to the negative terminal of the other cell.
3. The switch is used to close or open an electric circuit.
4. Pure water is a good conductor of electricity.
5. Secondary cell can be used only once.

Answer:

1. True
2. False – The negative terminal of one cell is connected to positive terminal of other cell.
3. True
4. False – Pure water is an insulator.
5. False – Secondary cells can be used many times.

IV. Match the following

Answer:
1. – Battery
2. – Bulb does not glow
3. – Open key
4. – Bulb glows
5. – Cell

V. Arrange in Sequence

Answer:
A DEVICE THAT CONVERTS CHEMICAL ENERGY INTO ELECTRICAL ENERGY IS CALLED A CELL.

VI. Give Very Short Answers

Question 1.
In the given circuit diagram, which of the given switches) should be closed. So that only the bulb A glows.

Answer:
K₁ and K₂ should be connected to glow bulb A in the circuit

Question 2.
Assertion (A) : It is very easy for our body to receive electric shock.
Reason (R) : Human body is a good conductor of electricity.
a. Both A and R are correct and R is the correct explanation for A.
b. A is correct, but R is not the correct explanation for A.
c. A is wrong but R is correct.
d. Both A and R are correct and R is not the correct explanation for A.
Answer:
(a) Both A and R are correct and R is the correct explanation for A.

Question 3.
Can you produce electricity from a lemon?
Answer:

1. We can produce electricity from the lemon.
2. Take lemon as an electrolyte, copper plate as positive terminal, and small hairpin as the negative terminal. This setup will work as a cell.
3. If we connect the electric bulb with it bulb will glow.

Question 4.
Identify the conductor from the following figures.

Answer:
Metallic chain is a conductor.

Question 5.
What type of circuit is there in a torchlight?
Answer:
Simple circuit system is used in a torchlight.

Question 6.
Circle the odd one out. Give a reason for your choice.
Answer:
Switch, Bulb, Battery, Generator.
Generator is the source of electricity. Others are parts of a circuit.

VII. Give Short Answers:

Question 1.
Draw the circuit diagram for the series connection.
Answer:

Question 2.
Can the cell used in the clock give us an electric shock? Justify your answer.
Answer:

1. The cell used in the clock will not give us an electric shock because the voltage of that cell is very low nearly 1.5 v.
2. So it will not affect our body.

Question 3.
Silver is a good conductor but it is not preferred for making electric wires. Why?
Answer:

1. Silver is a costly metal.
2. So economically we can not use it in electric wires.

VIII. Answer in detail:

Question 1.
What is the source of electricity? Explain the various power stations in India.
Answer:

1. In thermal power stations, thermal energy is generated by burning coal, diesel, or gas to produce steam.
2. Steam is used to rotate the turbine to generate electricity.
3. Here heat energy is converted into electric energy.

Hydel power stations:

1. In hydel power stations, the turbine is made to rotate by the flow of water from dams.
2. Here kinetic energy is converted into electric energy.

Atomic power station:

1. Here nuclear energy is used to boil water
2. The steam thus produced is used to rotate the turbine, as a result, electricity is produced.
3. Here nuclear energy is converted into mechanical energy.

Windmills:

1. In windmills, wind energy is used to rotate turbines to produce electricity.
2. Here kinetic energy is converted into electrical energy.

Question 2.
Tabulate the different components of an electric circuit and their respective symbols.
Answer:

Question 3.
Write short notes on conductors and insulators.
Answer:
Conductors:
The rate of flow of electric charges in a circuit is called electric current. The materials which allow electric charges to pass through them are called conductors.
Examples: Copper, iron, aluminum, impure water, earth, etc.,

Iniulaton (Non-Conductors):
The materials which do not allow electric charges to pass through them are called insulators or non-conductors.
Examples: plastic, glass, wood, rubber, china clay, ebonite, etc.

IX. Questions Based on Higher Order Thinking Skills

Question 1.
Rahul wants to make an electric circuit. He has a bulb, two wires, a safety pin, and a piece of copper. He does not have any electric cell or battery. Suddenly he gets some idea. He uses lemon instead of a battery and makes a circuit. Will the bulb glow?
Answer:
1. Yes, the bulb will glow.
2. Insert a piece of copper on one side of lemon, safety pin on another side. This system will work as a battery.
3. Copper rod – Positive terminal
Safety pin – Negative terminal, Lemon – Electrolyte
4. Connect the connecting wire in both the terminals and finally connect to the bulb.
5. The current produced is passed through the circuit and the bulb will glow.

X. Search ten words in the given word grid and classify them as conductors and insulators

Question 1.

Answer:

Samacheer Kalvi 6th Science Electricity Additional Important Questions and Answers

I. Choose the right answer:

Question 1.
Here heat energy is converted into electric energy
(a) Thermal power station
(b) Atomic power station
(c) Hydel power station
(d) Windmills
Answer:
(a) Thermal power station

Question 2.
In atomic power station, ________ is used to rotate the turbine.
(a) water
(b) steam
(c) Air
(d) diesel
Answer:
(b) steam

Question 3.
Which one of the following is using secondary using cells?
(a) Hand watch
(b) Robo toy
(c) Laptop
(d) None of these
Answer:
(c) Laptop

Question 4.
If two or more ________ are connected in series in a circuit, then it is called a series circuit.
(a) keys
(b) cells
(c) connecting wires
(d) bulbs
Answer:
(d) bulbs

Question 5.
……….. fish is able to produce an electric current.
(a) Goldfish
(b) Electric Eel
(c) Katla
(d) Salamon fish
Answer:
(b) Electric Eel

II. Fill in the blanks:

1. Any device from which electricity is produced is called ………..
2. The place in Kanyakumari district that has more windmills is ………..
3. ……….. have long economic lives and low operating cost.
4. A chemical solution that produces positive and negative ions is used as ………….
5. ……….. invented the electric bulb.

Answer:

1. Source of electricity
2. Aralvaimozhi
3. Hydel power stations
4. electrolyte
5. Thomas Alva Edison

III. Say True of False.

1. Atomic power stations convert nuclear energy into electric energy.
2. The cell can be used only once is called secondary cells.
3. We can produce electricity from potatoes.
4. An ammeter is connected in parallel in circuits.
5. The voltage of the torchlight battery is 1.5 v.

Answer:

1. True
2. False
3. 3. True
4. False
5. True

IV. Match the Following:

Answer:
1. – iii
2. – i
3. – iv
4. – ii
5. – v

V. Assertion and Reason

Question 1.
Assertion (A) : Experiments with electricity should only be performed with torch or radio batteries.
Reason (R) : Household electric supply will have high voltage and dangerous
a. Both A and R are correct and R is the correct explanation for A.
b. A is correct, but R is not the correct explanation for A.
c. A is wrong but R is correct.
d. Both A and R are correct and R is not the correct explanation
Answer:
a. Both A and R are correct and R is the correct explanation for A.

Question 2.
Assertion (A) : Primary cells can not be recharged, they can be used only once.
Reason (R) : In vehicles, we use primary cells.
a. Both A and R are correct and R is the correct reason for A.
b. A is true but R is not correct.
c. Both A and R are correct, but R is not the correct reason for A
d. A is not correct but R is correct
Answer:
b. A is true but R is not correct

VI. Very Short Answer:

Question 1.
What are the places in which atomic power stations located in Tamil Nadu?
Answer:

1. Kalpakkam, Kanchipuram district.
2. Koodankulam, Tirunelveli district.

Question 2.
List out the parts required to make an electric circuit
Answer:
A key, connecting wires, dry cell or battery, and electric bulb.

Question 3.
How to connect the cells in torchlight to glow bulbs?
Answer:
1. Connect the positive terminal of one cell with the negative terminal of another cell.
2. The bulb will glow.

Question 4.
How electric current is produced in Thermal power stations?
Answer:
The thermal energy generated by burning coal is used to produced steam. The steam thus produced is used to rotate the turbine. While the turbine rotates, the coil of wire kept between the electromagnet rotates. Due to electromagnetic induction, electricity is produced.

Question 5.
What is meant by a battery or collection of cells?
Answer:
Two or more cells are combined together to make a battery or collection of cells.

VII. Long Answer Questions:

Question 1.
What is a cell? Explain the types of cells.
Answer:
A device that converts chemical energy into electrical energy is called a cell. Cells are classified, in two types. They are-

1. Primary cells,
2. Secondary cells.

1. Primary cells:

• They can not be recharged.
• They can be used only once.
• They are small in size.
• Eg. Cells used in clocks, watches, and toys, etc.

2. Secondary cells:

• A cell that can be recharged many times is called secondary cells.
• Depending upon usage size may vary.
• Eg. Secondary cells are used in mobile phones, laptops, emergency lamps, and vehicle batteries.

Question 2.
What are the safety measures to safeguard a person from electric shock?
Answer:
Safety measures to safeguard a person from electric shock:

1. Switch off the power supply.
2. Remove the connection from the switch.
3. Push him away using non-conducting materials.
4. Give him first aid and take him to the nearest health centre.

Students can download 10th Social Science Economics Chapter 1 Gross Domestic Product and its Growth: an Introduction Questions and Answers, Notes, Samacheer Kalvi 10th Social Science Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 10th Social Science Solutions Economics Chapter 1 Gross Domestic Product and its Growth: an Introduction

Samacheer Kalvi 10th Social Science Gross Domestic Product and its Growth: an Introduction Text Book Back Questions and Answers

I. Choose the correct answer

Question 1.
GNP equals:
(a) NNP adjusted for inflation
(b) GDP adjusted for inflation
(c) GDP plus net factor income from abroad
(d) NNP plus net property income or abroad
Answer:
(c) GDP plus net factor income from abroad

Question 2.
National Income is a measure of ……………
(a) Total value of money
(b) Total value of producer goods
(c) Total value of consumption goods
(d) Total value of goods and services
Answer:
(d) Total value of goods and services

Question 3.
Primary sector consist of:
(a) Agriculture
(b) Automobiles
(c) Trade
(d) Banking
Answer:
(a) Agriculture

Question 4.
……………… approach is the value added by each intermediate good is summed to estimate the value of the final good.
(a) Expenditure approach
(b) Value-added approach
(c) income approach
(d) National Income
Answer:
(b) Value-added approach

Question 5.
Which one sector is highest employment in the GDP?
(a) Agricultural sector
(b) Industrial sector
(c) Service sector
(d) None of the above
Answer:
(a) Agricultural sector

Question 6.
Gross value added at current prices for services sector is estimated at …………… lakh crore in 2018-19.
(a) 91.06
(b) 92.26
(c) 80.07
(d) 98.29
Answer:
(b) 92.26

Question 7.
India is ……………. largest producer in agricultural product.
(a) 1^st
(b) 3^rd
(c) 4^th
(d) 2^nd
Answer:
(d) 2^nd

Question 8.
India’s life expectancy at birth is ………….. years.
(a) 65
(b) 60
(c) 70
(d) 55
Answer:
(a) 65

Question 9.
Which one is a trade policy?
(a) irrigation policy
(b) import and export policy
(c) land-reform policy
(d) wage policy
Answer:
(b) import and export policy

Question 10.
Indian economy is ……………
(a) Developing Economy
(b) Emerging Economy
(c) Dual Economy
(d) All the above
Answer:
(d) All the above

II. Fill in the blanks

1. ………………… sector is largest sector in India.
2. GDP is the indicator of ………………… economy.
3. Secondary sector otherwise called as …………………
4. ………………… sector is the growth engine of Indian economy.
5. India is ………………… largest economy of the world.
6. India is ………………… fastest growing nation of the world.
7. ………………… policy envisages rapid industrialization with modernization for attaining rapid economic growth of GDP.

Answers:

1. Service
2. economic health
3. Industrial sector
4. Service
5. 6^th
6. fifth
7. Industrial

III. Choose the correct statement

Question 1.
The rate of saving is low in India for the following reason
(i) Low per capita income.
(ii) Poor performance and less contribution of public sector.
(iii) Poor contribution of household sector.
(iv) Savings potential of the rural sector not tapped fully.
(a) (i), (ii), (iv) are correct
(b) (i), (ii) and (iii) are correct
(c) (i), (ii), (iii) and (iv) are correct
(d) (i), (iii) and (iv) are correct
Answer:
(c) (i), (ii), (iii) and (iv) are correct

IV. Match the following

Answer:
A. (iii)
B. (iv)
C. (v)
D. (i)
E. (ii)

V. Give Short Answer

Question 1.
Define National income
Answer:
National Income is a measure of the total value of goods and services produced by an economy over a period of time, normally a year. National Income is also known as Gross National Product or GNP or National Dividend.

Question 2.
What is meant by Gross Domestic product?
Answer:
The Gross Domestic product is the market value of all the goods and services produced in the country during a time period.

Question 3.
Write the importance of Gross domestic product.
Answer:
The GDP is one of primary indicators used to measure the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time period, often referred to as the size of the economy.

Question 4.
What is Per-Capita Income?
Answer:
Per-Capita Income is an indicator to show the living standard of people in a country. It is obtained by dividing the National Income by the population of a country. It is also called as output per person of an economy.

Question 5.
Define the value added approach with example.
Answer:
In the value added approach, the value added by each intermediate good is summed to estimate the value of the final goods. Take example of a cup of tea which is a final good. The goods used to produce it are – tea powder, milk and sugar. These things (goods) are ‘intermediate goods’ since they form a part of the final good, i.e., the cup of tea. Each intermediate good the tea powder, milk and sugar, adds value to the final output, the cup of tea.

Question 6.
Name the sectors contribute to the GDP with examples.
Answer:
The three sectors that contribute to the GDP are primary sector (or) Agricultural Sector, Secondary Sector (or) Industrial Sector, Tertiary Sector (or) Service Sector. Eg: Agricultural based allied activities. Farm, fishing

1. Mining and Foresty – Primary sector.
2. Major Industries and small scale Industries – Industrial sector.
3. Transport and Communication, Post and Telegraph, Banking, Education, Entertainment, Health care and Information Technology.

Question 7.
Write the sector wise Indian GDP composition in 2017.
Answer:

Question 8.
What are the factors supporting to develop the Indian economy?
Answer:
Factors supporting to develop the Indian economy :

• A fast growing population of working age.
• India has a strong legal system and many English language speakers
• Wage costs are low here.
• India’s economy has successfully developed highly advanced and attractive clusters of business in the technology space.

Question 9.
Write the name of economic policies in India.
Answer:
Agricultural Policy, Industrial Policy, New Economic Policy, Domestic Trade Policy, International Trade Policy, Employment Policy, Currency and Banking Policy, Fiscal and Monetary policy, Wage Policy, Population policy.

Question 10.
Write a short note:
1) Gross National Happiness (GNH)
2) Human Development Index (HDI)
Answer:
1) Gross National Happiness or GNH is a global indicator of progress, which measures both sustainable economy and social developments, while protecting the environment and culture:

2) The Human Development Index or HDI is a statistic composite index of life expectancy, education and per capita income indicators, which are used to rank countries into four tiers of human development. A country scores a higher HDI when the lifespan is higher, the education level is higher and the gross national income or GNI per capital is higher.

VI. Write in detail answer

Question 1.
Briefly explain various terms associated with measuring of National Income.
Answer:
(i) Gross National Product (GNP): It is the total value of goods and services produced and income received by the domestic residents of a country. It includes profit earned from capital invested abroad.
GNP = C + I + G + (X – M) + NFIA

(ii) Gross Domestic Product (GDP): It is the value of output of goods and service produced by the factors of production within the Geographical boundaries of a country.
GDP = GNP – NFIA

(iii) Net National Product (NNP): It is arrived by deducting Depreciation value from the Gross National Product.
NNP = GNP – Depreciation

(iv) Net Domestic Product ( NDP): It is arrived by deducting the value of depreciation from the Gross Domestic Product.
NDP = GDP – Depreciation

(v) Per-Capita Income: It is obtained by dividing the National Income by the population of a country.
PCI = N.I / population
In the above context,
C – Consumption expenditure
I – Investment expenditure
G – Government expenditure
NFIA – Net Factor Income earned from Abroad
Depreciation – Wear and Tear expenses

(vi) Personal Income: It is the total money income received by all the individual of a country from all possible sources before direct taxes.
PI = NI Corporate Income Taxes – Undistributed Corpo – rate profit – social security Contribution + Transfer payment

(vii) Disposable Income (DI): It means the actual income which can be spent on consumption by the people of the country.
DI = PI – Direct taxes

Question 2.
What are the methods of calculating Gross Domestic Product?
Answer:
Methods of calculating Gross Domestic Product or GDP:

1. Expenditure Approach – In this method, the GDP is measured by adding the expenditure on all the final goods and services produced in the country during a specified period.
2. Income Approach – This method looks at GDP from the perspective of the earnings of the men and women who are involved in producing the goods and services.
3. Value-added Approach – In the value – added approach the value added by each intermediate good is summed to estimate the value of the fiscal good. The sum of the value added by all the intermediate goods used in productions gives us the total value of the final goods produced in the economy.

Question 3.
Write about the composition of GDP in India.
Answer:
The composition of GDP in India include three sectors which are listed as
(i) Agricultural Sector
(ii) Industrial Sector
(iii) Service Sector.

(i) Agricultural Sector: It is also known as primary sector. Agricultural activities, Agricultural based allied activities, cattle farm, fishing, mining, forestry, mining are all included in this sector. Their total production is the pirimary sector contribution to India’s GDP.

(ii) Industrial Sector: It is also known as secondary sector. Production of goods using raw materials in the form of either Small Scale Industries, or Large Scale Industries like Iron and steel, Automobiles etc., are included in this sector. Their total production is the secondary sector contribution to India’s GDP.

(iii) Service Sector: It is also known as Tertiary sector. It includes Government, transport and communications, Scientific Research, Post and telegraph, trade, Banking, Education, Entertainment, Health care and Information Technology’ in this sector. Their total production is the service sector contribution to India’s GDP.

Sector-wise contribution of GDP (2018 – 19)
Agricultural Sector – 14.39 %
Industrial Sector – 31.46%
Sen/ice Sector – 54.15%

Question 4.
Write the differences between the growth and the development.
Answer:

Question 5.
Explain the Developmental path based on GDP and employment.
Answer:
Developmental path based on GDP and employment

1. In the development path of India, at first undertook the policy of closed trade. It means that trade and interaction with the outside world remained limited.
2. In 1991, India finally decided to open its borders to free trade and liberalised its economy by allowing foreign companied to enter the Indian economy.
3. A thrust was given to employment generation under the Five Year Plans. Rural development was also given importance in India.
4. The public sector was given significant importance. Private companies and industries were subject to strict regulations and standards. It was believed that the Government was the sole protector of the people and would work towards social welfare.
5. India has sustained rapid growth of GDP for most of the last two decades leading to rising per capita income and a reduction in absolute poverty. Per capital incomes have doubled in 12 years.

Question 6.
Explain the following policies.
Answer:
Agricultural Policy: It means a set of decisions and actions taken by the government relating to domestic agriculture and imports of agricultural products.

The policy mainly focus on the following areas:

(a) Risk Management and Adjustment
(b) Economic Stability
(c) Natural Resources
(d) Environmental Sustainability
(e) Research and Development
(f) Market for domestic agricultural commodities

In general, the agricultural policy includes Price policy, Land Reform policy, Green Revolution, Irrigation policy, Food policy, Labour policy and co operative policy.

Industrial policy: It means a set of decisions taken by the government relating to industrial sector, domestic production, trade, self-sufficiency and modernisation.

The policy mainly focus on the following areas:

1. Employment generation
2. Utilisation of Natural resources
3. Boosting the other sector development
4. Research and Development
5. Modernisation
6. Environmental protection
7. Trade
8. Development of small scale industries.

In general, the Industrial policy include Textile Industry policy, Sugar industry policy, Price policy, Small scale industries policy, Industrial Labour policy.

New Economic Policy: The New Economic Policy was introduced in 1991 which includes LPG. LPG refers to Liberalisation, Privatisation and Globalisation. Therefore the policy is called LPG model.

The main objective of this model was to make the economy of India, the fastest developing economy of the world to become equal to the biggest economies of the world. Definitely, this model had influenced India’s Economic growth and development.

VII. Activity and Project

Question 1.
Students are collect the Gross Domestic Product datas of Tamilnadu and compare the other state of Karnataka and Kerala’s GDP.
Answer:
Tamil Nadu, Karnataka, Kerala GDP are called SGDP- State Gross Domestic Product. This comparison help us to understand, the performance of each state and comparatively which state has performed better. Given here, is a sample of the activity and students should elaborate it and make it as perfect project.

[For refer Table – 12 CSO – Central Statistical Organisation, New Delhi ]

Question 2.
Students are collect the details of Employment growth of Tamilnadu.
Answer:

1. The Employment Growth of Tamil Nadu refers to the rate of growth of work force or labour force of the state. The students should understand that this can be compared between the two Census (2001 and 2011).
2. The state of TamilNadu total population grew from 62.41 million in 2001 to 72.15 million in 2011.
3. Between these two Censuses, the total number of workers in the slate increased by 1.18% that is from 27.88 million to 32.88 million.
4. Among the districts work participation is the lowest at 36.3% in Kanyakumari despite the fact it has high literacy level. It is nigh in Erode with 53.1% as per 2011 Census.
5. Taking the above given sample information, students should, do activity considering the labour force participation men. women ratio scpaiaiciy.

Samacheer Kalvi 10th Social Science Gross Domestic Product and its Growth: an Introduction Additional Important Questions and Answers

I. Choose the correct answer

Question 1.
‘Your mother is cooking’- In this statement, cooking is …………………
(a) Good
(b) Service
(c) Both (a) and (b)
(d) None
Answer:
(b) Service

Question 2.
‘Economic growth is one aspect of economic development’. Who said it?
(a) Amarthya Sen
(b) Manmohan Singh
(c) Mehabub ul Haq
(d) Ramachandra Guha
Answer:
(a) Amarthya Sen

Question 3.
Goods and Service has a market …………………
(a) value
(b) price
(c) Both (a) and (b)
(d) to fix a price
Answer:
(c) Both (a) and (b)

Question 4.
Which one of the following is not an example of tertiary sector?
(a) Communication
(b) Banking
(c) Transport
(d) Forestry
Answer:
(d) Forestry

Question 5.
The intermediate Goods value are indirectly included in the measurement of …………………
(a) GDP
(b) GNP
(c) SGDP
(d) NDP
Answer:
(a) GDP

Question 6.
GDP of a country can be calculated by ……………..
(a) 2 Approach
(b) 3 Approach
(c) 4 Approach
Answer:
(b) 3 Approach

Question 7.
The ………………… value is derived from the price at which the Goods and Services are sold in the market.
(a) currency
(b) frequency
(c) Nation’s
(d) Trade
Answer:
(a) currency

Question 8.
National Income is otherwise called as ……………..
(a) Real Income
(b) Money Income
(c) Gross National Product
Answer:
(c) Gross National Product

Question 9.
Imagine your father knows book binding technique and after you get new books for this year, he bounded and gave you. Whether binding charges are included on the GDP?
(a) Included
(b) Partially Included
(c) Not included
(d) Both (a) and (b)
Answer:
(c) Not included

Question 10.
The method by which we arrive at National Income in India is …………..
(a) Product method
(b) Expenditure method
(c) Product and Income method
Answer:
(c) Product and Income method

Question 11.
If the ………………… goods are included in the GDP, it will result in Double counting.
(a) Final
(b) Intermediate
(c) Import
(d) Export
Answer:
(b) Intermediate

Question 12.
Commonly, National Income is called as …………………
(a) GNP
(b) GDP
(c) NNP
(d) PCI
Answer:
(a) GNP

Question 13.
………………… is also called as National Dividend.
(a) GNP
(b) GDP
(c) NNP
(d) NFIA
Answer:
(a) GNP

Question 14.
GNP ………………… net factor from abroad.
(a) Excludes
(b) includes
(c) Sums up
(d) (a) and (c)
Answer:
(d) (a) and (c)

Question 15.
GDP ………………… net factor income from abroad.
(a) Excludes
(b) includes
(c) Sums up
(d) (a) and (c)
Answer:
(a) Excludes

Question 16.
GNP minus depreciation gives …………………
(a) NDP
(b) NNP
(c) GDP
(d) NFIA
Answer:
(b) NNP

Question 17.
NDP is the value of depreciation excluded from …………………
(a) GDP
(b) NNP
(c) NFIA
(d) (X-M)
Answer:
(a) GDP

Question 18.
………………… denotes the standard of living of the people.
(a) NNP
(b) NDP
(c) PCI
(d) NFIA
Answer:
(c) PCI

Question 19.
………………… represents all sources of income excluding direct taxes.
(a) GNP
(b) PCI
(c) PI
(d) DI
Answer:
(c) PI

Question 20.
Personal income minus direct taxes will give …………………
(a) DI
(b) DPI
(c) PI
(d) both (a) and (b)
Answer:
(d) both (a) and (b)

Question 21.
The quarterly GDP estimates for the ………………… quarter includes months January, February and March.
(a) first
(b) second
(c) third
(d) fourth
Answer:
(d) fourth

Question 22.
The quarterly GDP estimates of the month July, August and September includes ………………… quarter.
(a) first
(b) second
(c) third
(d) fourth
Answer:
(b) second

Question 23.
The first quarter of the GDP estimates includes the months …………………
(a) Jan, Feb, March
(b) July, Aug, Sep
(c) April, May, June
(d) Oct, Nov, Dec.
Answer:
(c) April, May, June

Question 24.
October, November, December, months are included in ………………… quarter estimates of GDP.
(a) first
(b) second
(c) third
(d) fourth
Answer:
(c) third

Question 25.
The modern concept of GDP was first developed by Simon Kuznets in the year …………………
(a) 1930
(b) 1932
(c) 1933
(d) 1934
Answer:
(d) 1934

Question 26.
There are ………………… methods to calculate GDP.
(a) 4
(b) 3
(c) 6
(d) 1
Answer:
(b) 3

Question 27.
The prices paid to the factors of production are included in the ………………… approach
(a) Income
(b) Expenditure
(c) Value added
(d) None
Answer:
(a) Income

Question 28.
………………… helps in the estimation of purchasing power.
(a) GNP
(b) GDP
(c) NDP
(d) NNP
Answer:
(b) GDP

Question 29.
Adding up all the expenditures incurred in a country during a specific period of time is called ………………… method.
(a) Income
(b) Expenditure
(c) Value added
(d) None
Answer:
(b) Expenditure

Question 30.
GDP measures only the quantity but not …………………
(a) quality
(b) price
(c) market value
(d) trade
Answer:
(a) quality

Question 31.
There are ………………… sectors in an economy.
(a) one
(b) two
(c) three
(d) four
Answer:
(c) three

Question 32.
India is the ………………… largest producer of agricultural products.
(a) first
(b) second
(c) third
(d) fourth
Answer:
(b) second

Question 33.
Amartya Sen is an ………………… Economist.
(a) American
(b) Australian
(c) Indian
(d) Pakistani
Answer:
(c) Indian

Question 34.
The key parameters of economic growth of an economy are its GDP and ………………… which helps in measuring the actual size of the economy.
(a) GNP
(b) NFIA
(c) Depreciation
(d) PCI
Answer:
(a) GNP

Question 35.
The GDP of India is ………………… million United States dollars.
(a) 19.3
(b) 2.8
(c) 3.6
(d) 7.8
Answer:
(b) 2.8

Question 36.
The GDP of United States is ………………… million.
(a) 19.3
(b) 2.8
(c) 3.6
(d) 7.9
Answer:
(a) 19.3

Question 37.
India is ranked ………………… in Globe as regard to GDP.
(a) fourth
(b) fifth
(c) sixth
(d) third
Answer:
(c) sixth

Question 38.
United States is ranked ………………… in Globe as regard to GDP.
(a) third
(b) fourth
(c) second
(d) first
Answer:
(d) first

Question 39.
Economic Growth is ………………… in nature.
(a) quantitative
(b) qualitative
(c) both (a) and (b)
(d) peculiar
Answer:
(a) quantitative

Question 40.
Economic ………………… is a broader concept.
(a) Development
(b) Growth
(c) Project
(d) None
Answer:
(a) Development

Question 41.
………………… helps to measure the real development of an economy.
(a) GDP
(b) HDI
(c) GNHI
(d) NNP
Answer:
(b) HDI

Question 42.
The concept of Economic development is mainly applicable to ………………… economies.
(a) Developed
(b) Developing
(c) Under developed
(d) Less developed
Answer:
(b) Developing

Question 43.
The concept of Economic Growth is mainly applicable to ………………… economies.
(a) Developed
(b) Developing
(c) Less developed
(d) Under developed
Answer:
(a) Developed

Question 44.
The concept of Human Development Index was put forward by …………………
(a) Amartya Sen
(b) Mahbub-ul-Haq
(c) Wangehuck
(d) Simon Kuznets
Answer:
(b) Mahbub-ul-Haq

Question 45.
The concept of HDI was first introduced at the …………………
(a) United Nations
(b) United Stated
(c) United Kingdom
(d) UAE
Answer:
(a) United Nations

Question 46.
The concept of HDI was introduced in the year
(a) 1960
(b) 1970
(c) 1990
(d) 1980
Answer:
(c) 1990

Question 47.
India lies in ………………… Human Development Index Category.
(a) High
(b) Low
(c) Medium
(d) Very Low
Answer:
(c) Medium

Question 48.
India’s HDI value for 2017 is …………………
(a) 0.001
(b) 0.540
(c) 0.640
(d) 0.340
Answer:
(c) 0.640

Question 49.
When a country’s HDI increases, it removes the country from …………………
(a) Development
(b) Poverty
(c) Trade disputes
(d) Stagnation
Answer:
(b) Poverty

Question 50.
GNHI is a philosophy that guides the government of …………………
(a) America
(b) Nepal
(c) Bhutan
(d) India
Answer:
(c) Bhutan

Question 51.
Co-operative policy is a part of ………………… policy.
(a) Agriculture
(b) Industry
(c) NEP
(d) Wage
Answer:
(a) Agriculture

Question 52.
The city ………………… has emerged as a hub for global software business today.
(a) Chennai
(b) Mumbai
(c) Bangalore
(d) Calcutta
Answer:
(c) Bangalore

Question 53.
The structural reforms brought in India recently are …………………
(a) GST
(b) Demonetisation
(c) Both (a) and (b)
(d) None
Answer:
(c) Both (a) and (b)

Question 54.
The measure of the value of goods and services produced in an area, industry (or) sector of the economy is called …………………
(a) GDP
(b) GNP
(c) GVA
(d) NDP
Answer:
(c) GVA

Question 55.
According to IMF, India is ………………… fastest growing nation of the World.
(a) 3^rd
(b) 2^nd
(c) 4^th
(d) 5^th
Answer:
(d) 5^th

II. Fill in the blanks

1. In order to know the performance of India, one should know the ………………. of our country.
2. Goods are difference from ……………….
3. Services are ……………….
4. The GDP is the ………………. value of final goods and services produced in the country.
5. The price at which the goods are sold in the market is called ……………….
6. The GDP is measured in terms of ………………. value of our country.
7. “The final goods and services will not be a part of other goods and Services”, said by ……………….
8. The goods that are used in the production of other goods are called as ………………. goods.
9. If the intermediate goods are included in the GDP, then it will result in ……………….
10. Commonly National Income is called as ……………….
11. National Income (or) GNP is also called as ……………….
12. Profits earned from abroad is ………………. with GDP to get GNP.
13. If the total value of goods and services are calculated within the geographical boundary of a country it is called
14. The process of loosing the value of anything is called as ……………….
15. The Income of individuals from all sources before payment of taxes is called as ……………….
16. Personal income minus Direct taxes will give ……………….
17. ………………. used the term Per Capita Income for the first time in 1867-68.
18. ………………. is the name of the book written by Dadabhai Navroji.
19. GDP minus depreciation gives ……………….
20. GNP minus depreciation gives ……………….
21. ………………. is the indicator of standard of living of people in a country.
22. The formulae to calculate PCI is ……………….
23. The cost of saree brought by your brother to your mother ………………. from China will be from India’s GDP.
24. My uncle sends money to his family in India from Dubai. It is included in India’s ……………….
25. GDP is measured both annually and ……………….
26. There are ………………. quarters with which GDP is measured.
27. January, February, March refers to the ………………. quarter of the measurement of GDP.
28. April to June measured as the ………………. quarter in measurement of GDP.
29. The path of development of India in recent years is moving from agricultural sector to ………………. sector.
30. Wage costs are ………………. in India.
31. GNHf is a philosophy instituted as the goal of government of ……………….
32. India is now experiencing a period of ……………….
33. As per HDI, India is in the ………………. human development category.
34. In ………………. India, opened up to free trade policy.
35. Economic development is a ………………. preocess.
36. In India, ………………. city is considered as a hub for global software businesses.
37. The new model of economic reforms put forward in 1991 by India is called as ………………. model.
38. According to IMF, GDP growth rate of India in 2018 is projected at ……………….
39. According to World economic outlook, India is ………………. fastest growing nation of the World.
40. According to IMF World Economic Outlook ………………. is in the rank as a fastest growing nation of the world.

Answers:

1. GDP
2. Services
3. Intangible
4. Market
5. Market value
6. Rupee
7. Tyler Cowen and Alex Tabarrok
8. Intermediate
9. Double counting
10. Gross National Product
11. National Dividend
12. Included
13. GDP
14. Depreciation
15. Personal income
16. Disposable income
17. Dadabhai Navroji
18. Poverty and Unemployment
19. NDP
20. NNP
21. Per Capita Income
22. N.I. / population
23. Excluded
24. GNP
25. Quarterly
26. Four
27. Fourth
28. First
29. Service
30. Low
31. Bhutan
32. Demographic transition
33. Medium
34. 1991
35. Continuous
36. Bangalore
37. LPG
38. 7.3%
39. Fifth
40. Bangladesh

III. Choose the correct statement

Question 1.
(i) Only the final goods are included in the GDP.
(ii) If the value of the Intermediate goods are included,, it will result in double counting,
(iii) The rupee values are desired from the prices at which the goods and services are sold in the market.
(iv) There is no sensible way to add the quantities of goods produced with those of the services produced.
(a) (i), (ii), (iv) are correct
(b) (i), (ii), (iii) are correct
(c) (i), (ii), (iii) and (iv) are correct
(d) (i), (iii) and (iv) are correct
Answer:
(c) (i), (ii), (iii) and (iv) are correct

Question 2.
(i) Personal income minus direct taxes gives the disposable income.
(ii) GDP of India includes the market value of all the goods and services produced in the global level.
(iii) Disposable Income minus Transfer payments plus subsidies gives personal income.
(iv) The Quantum of wear and tear expenses are called Depreciation.
(a) (i), (ii), (iv) are correct
(b) (i), (ii), (iii) are correct
(c) (i), (ii), (iii) and (iv) are correct
(d) (i), (iv) are correct
Answer:
(d) (i), (iv) are correct

Question 3.
(i) income methods sums up all forms of income earned by individuals who are involved in the production of goods and services.
(ii) There are several methods to calculate National income or GDP.
(iii) The Modern concept of GDP was first developed by Simon Kuznets in 1934.
(iv) The annual GDP of financial year 2017-18 will include only the goods and services produced during that financial year.
(a) (i), (ii), (iv) are correct
(b) (i), (ii), (iii) are correct
(c) (i), (ii), (iii) and (iv) are correct
(d) (i), (iii), (iv) are correct
Answer:
(d) (i), (iii), (iv) are correct

Question 4.
(i) GDP measures only quantity but not quality.
(ii) CSO conducts annual survey based on Indexes like Index on Industrial Production (llP) and Consumer Price Index (CPl).
(iii) High level of Per Capita real GDP will lead to low level of pollution and low suicidal rate.
(iv) India is the largest producer of agricultural products in the world.
(a) (i), (ii), (iv) are correct
(b) (i), (ii), (iii) are correct
(c) (i), (ii) are correct
(d) (i), (iii), (iv) are correct
Answer:
(c) (i), (ii) are correct

Question 5.
(i) Economic Growth is one aspect of Economic Development-Said by Economist Amartya Sen.
(ii) HDl is apt tool to measure the real development in an economy.
(iii) United States of America ranks top in the globe in terms of its GDP.
(iv) Economic development is quantitative in nature.
(a) (i), (ii), (iv) are correct
(b) (i), (ii), (iii) are correct
(c) (i), (ii), (iii) and (iv) are correct
(d) (i), (iii), (iv) are correct
Answer:
(b) (i), (ii), (iii) are correct

Question 6.
(i) Poverty alleviation came as a corollary of rural development.
(ii) In 2011, The UN Genera! Assembly passed Resolution Happiness towards a Holistic approach to development.
(iii) There are nine domains in GNHI
(iv) There are two structural reforms recently brought in India- demonetisation and Goods and Services Tax.
(a) (i), (ii), (iv) are correct
(b) (i), (ii), (iii) are correct
(c) (i), (ii), (iii) and (iv) are correct
(d) (i), (iii), (iv) are correct
Answer:
(c) (i), (ii), (iii) and (iv) are correct

IV. Assertion and Reason

Question 1.
Assertion (A): Economic Development is a broader concept.
Reason (R): It is long-term in nature and includes variables like removal of poverty, Rise in life expectancy rate etc.
(a) A is correct and R is the relevant explanation to A.
(b) A is correct and R is not the relevant explanation to A
(c) A is wrong, R is correct.
(d) A is wrong and R is wrong.
Answer:
(a) A is correct and R is the relevant explanation to A.

Question 2.
Assertion (A): There are two major structural reforms brought in India recently. They are demonetization and Goods and Services Tax.
Reason (R): India economy is the 5th fastest growing nation of the World.
(a) A is correct, and R is the relevant explanation to A.
(b) A is correct and R is not the relevant explanation to A
(c) A is wrong, R is correct.
(d) A and R is wrong.
Answer:
(b) A is correct and R is not the relevant explanation to A

Question 3.
Assertion (A): Intermediate goods are not counted in calculating the GDP.
Reason (R): Their value is already included in the final goods.
(a) A is correct and R is the relevant explanation to A.
(b) A is correct and R is not the relevant explanation to A
(c) A is wrong, R is correct
(d) A and R is wrong.
Answer:
(a) A is correct and R is the relevant explanation to A.

Question 4.
Assertion (A): Economic Growth is a quantitative measure.
Reason (R): It considers the increase in the output produced in an economy in a particular period of time.
(a) A is correct and R is the relevant explanation to A.
(b) A is correct and R is not the relevant explanation to A
(c) A is wrong, R is correct
(d) A and R is wrong.
Answer:
(a) A is correct and R is the relevant explanation to A.

V. Match the following

Question 1.
Match the Column I with Column II.

Answer:
A. (iv)
B. (i)
C. (v)
D. (ii)
E. (iii)

Question 2.
Match the Column I with Column II.

Answer:
A. (v)
B. (iii)
C. (vi)
D. (ii)
E. (iv)

VI. Give Short Answer

Question 1.
What is Gross Value Added?
Answer:
Gross Value Added or GVA is the measure of the value of goods and services produced in an area, industry of sector of an economy. In national accounts GVA is output minus intermediate consumption; it is a balancing item of the national accounts’ production account.

Question 2.
Distinguish between goods and services.
Answer:

Goods	Services
Goods are tangible	Services are intangible
Goods can be separated from its owner	Services cannot be separated from its owner
Eg: Table, chair, Apple etc.,	Service of a teacher, Lawyer, cook in a hotel etc.,
Goods are products	Services are activities

Question 3.
In what two ways is the GDP measured in India?
Answer:
In India GDP is measured both annualy and quarterly. The annual GDP is for a financial year which is from April 1 of one year, for example 2017 to March 31 of the next year, for example 2018.
This is written as 2017-18.
The quarterly GDP estimates are for each of the four quarters into which India’s financial year is divided.
First quarter, denoted Q1 : April, May and June .
Second Quarter – Q2 : July, August and September
Third Quarter – Q3 : October, November and December
Fourth Quarter – Q4 : January, February and March

Question 4.
What is meant by Intermediate good? Give example.
Answer:
The goods which will be used for the production of other goods are called Intermediate goods. Eg: Sugar.

Question 5.
How do you arrive at NNP?
Answer:
We arrive at the NNP by deducting the value of depreciation from Gross National Products. NNP = GNP (-) Depreciation.

Question 6.
What is meant by GVA?
Answer:
Gross Value Added is called as GVA. It is the measure of the value of goods and services produced in an area (or) sector of an economy.
GVA = GDP + Subsidies – Taxes.

Question 7.
Give examples for tertiary sector.
Answer:
Tertiary sector include Trade, Hotel industry, Transport, Storage, Communication, Finance, Insurance, Real estate, Social services, Postal and Telegraph, Banking, Education, Entertainment, Health care and Information Technology, etc.

Question 8.
What is the financial year of India?
Answer:
The financial year is the year of the calculation of GDP. In India it starts from April 1^st and ends on March 31^st.

Question 9.
What is Depreciation?
Answer:
Decline in the value of capital assets (machineries) due to tear and wear is measured as depreciation.

Question 10.
Write few parameters to measure economic growth?
Answer:
Human Resources, Natural Resources, Advancement in technology, Capital formation, Political and social economic factors are few parameters to measure economic growth.

Question 11.
What is Disposable Income (DI)?
Answer:
Disposable Income means actual income which can be spent on consumption by individuals and families, thus, it can be expressed as DPI = PI – Direct Taxes.

VII. Answer in Detail

Question 1.
Explain the limitations of GDP.
Answer:
(i) Non – Marketed items are left out of GDP: GDP includes only the goods and services that are sold in the market, Non-Marketed items are not included. Eg: Services provided by parents to their children, clean air has no market value (or) price. Hence it is left out of GDP.

(ii) GDP measures only quantity not quality: At times, we can see some products which are available at large quantities in the product, at a very low price. Only the quantity sold and its price is measured in GDP. Quality of the product is not taken care of.

(iii) Income Distribution: The GDP of a country may be growing rapidly. But income may not be distributed equally. This brings a lot of unequal distribution of income and wealth. GDP actually do not suggest on income distribution.

(iv) Way of life of the people: A high level of Per-Capita real GDP, may lead to a very low health condition of the people, an undemocratic political system, High pollution, High suicidal rate.

Question 2.
How are three sectors of an economy are interdependent?
Answer:
There are many activities that are undertaken by directly using natural resources, it is an activity of the primary sector.
The secondary sector covers activity in which the natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. It is the next step after primary.

The third category of activities falls under tertiary sector. These activities help in the development of the primary- and secondaiy sectors. These activities by themselves, do not produce goods but they are an aid or a support for the production process, for example, transport and communication, etc.

Thus, we can clearly say tiiat the three sectors of an economy are highly interdependent.

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Maths Guide Pdf Chapter 3 Theory of Equations Ex 3.6 Textbook Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Maths Solutions Chapter 3 Theory of Equations Ex 3.6

Question 1.
Discuss the maximum possible number of positive and negative roots of the polynomial equation 9x⁹ – 4x⁸ + 4x⁷ – 3x⁶ + 2x⁵ + x³ + 7x² + 7x + 2 = 0.
Solution:
P(x) = 9x⁹ – 4x⁸ + 4x⁷ – 3x⁶ + 2x⁵ + x³ + 7x² + 7x + 2
The number of sign changes in P(x) is 4.
∴P(x) has at most 4 positive roots.
P(-x) = -9x⁹ – 4x⁸ – 4x⁷ – 3x⁶ – 2x⁵ – x³ + 7x² – 7x + 2
The number of sign changes in P(-x) is 3.
P(x) has almost 3 negative roots.
Since the difference between the number of sign changes in co-efficient P(-x) and the number of negative roots of the polynomial P(x) is even.
The number of negative roots = at most 2.

Question 2.
Discuss the maximum possible number of positive and negative roots of the polynomial equations x² – 5x + 6 and x² – 5x + 16 . Also, draw a rough sketch of the graphs.
Solution:
y = x² – 5x + 6
x = 1, y = 1 – 5 + 6 = 2
x = 2, y = 4 – 10 + 6 = 0
x = 0, y = 6
x = 3, y = 9 – 15 + 6 = 0
x = -1, y = 1 + 5 + 6 = 12
x = 4, y = 16 – 20 + 6 = 2

(1, 2), (0, 6), (-1, 12)
P(x) = (x² + 5x + 6) (x² – 5x + 16)
= x⁴ – 5x³ + 16x² – 5x³ + 25x² – 80x + 6x² – 30x + 96 = 0
= x⁴ – 10x³ + 47x² – 110x + 96 = 0
It has two sign changes
∴ It has two positive real roots
P(-x) = x⁴ + 10x³ + 47x² + 110x + 96
It has no sign change, no negative real roots
y = x² – 5x + 16

Question 3.
Show that the equation x⁹ – 5x⁵ + 4x⁴ + 2x² + 1 = 0 has atleast 6 imaginary solutions.
Solution:P(x) = x⁹ – 5x⁵ + 4x⁴ + 2x² + 1
(i) The number of sign changes in P(x) is 2. The number of positive roots is atmost 2.
(ii) P(-x) = -x⁹ + 5x⁵ + 4x⁴ + 2x² + 1. The number of sign changes in P(-x) is 1. The number of negative roots of P (x) is atmost 1. Since the difference of number of sign changes in P(-x) and number of negative zeros is even.
P(x) has one negative root.
(iii) 0 is not the zero of the polynomial P(x). So the number of real roots is almost 3.
∴ The number of imaginary roots at least 6.

Question 4.
Determine the number of positive and negative roots of the equation x⁹ – 5x⁸ – 14x⁷ = 0.
Solution:
P(x) = x⁹ – 5x⁸ – 14x⁷. It has only one sign change.
∴ It has one positive roots.
P(-x) = -x⁹ – 5x⁸ + 14x⁷. It has only one sign change.
It has one negative root.
∴ It has one positive and one negative roots.

Question 5.
Find the exact number of real roots and imaginary of the equation x⁹ + 9x⁷ + 7x⁵ + 5x³ + 3x.
Solution:
P(x) = x⁹ + 9x⁷ + 7x⁵ + 5x³ + 3x.
There is no change in the sign of P(x) and P(-x), P(x) has no positive and no negative real roots, but 0 is the root of the polynomial equation P(x).