All questions of Economics CUET UG Mock Tests 2026 for Humanities/Arts Exam

It yields veey low tax and it contanis more complex regulation. not all taxatiin considered to be a gift tax it has some cases

Scheme for Indigent Senior Citizens – An Overview

The Scheme for Indigent Senior Citizens was launched by the Ministry of Rural Development in the year 2000. The primary objective of the scheme is to provide financial assistance to senior citizens who are living below the poverty line and have no means of support.

Features of the Scheme

The Scheme for Indigent Senior Citizens has the following features:

1. Eligibility Criteria: The scheme is meant for senior citizens who are 65 years of age or above and belong to below poverty line (BPL) families.

2. Financial Assistance: The scheme provides a monthly pension of Rs. 200 to eligible senior citizens.

3. Implementation: The scheme is implemented by the Ministry of Rural Development through the state governments and union territories.

4. Funding: The scheme is funded by the central government.

5. Identification of Beneficiaries: The beneficiaries are identified through a process of screening and verification by the state governments and union territories.

6. Coverage: The scheme covers senior citizens who are living alone or with their spouses, and who have no means of support.

7. Renewal: The financial assistance provided under the scheme is renewed annually, subject to the eligibility criteria being met.

Conclusion

The Scheme for Indigent Senior Citizens is an important initiative of the government to provide financial assistance to senior citizens who are living in poverty. The scheme has been successful in reaching out to a large number of beneficiaries and has helped to improve their quality of life.

Trade between countries determines prices of products in different countries.

Trade between countries has a significant impact on determining the prices of products in different countries. This is primarily due to the concept of comparative advantage, which states that countries specialize in producing goods and services that they can produce more efficiently and at a lower cost compared to other countries.

Comparative Advantage:

When countries engage in trade, they can take advantage of their comparative advantages. For instance, a country that has a large agricultural sector and favorable climate conditions may have a comparative advantage in producing agricultural products. On the other hand, a country with advanced technology and skilled labor may have a comparative advantage in producing high-tech goods.

Effects on Prices:

As countries specialize in producing goods that they have a comparative advantage in, they can produce these goods at a lower cost. This leads to a decrease in the prices of these goods in the global market. When these goods are imported into other countries, they can be sold at a lower price compared to domestically produced goods. This competition from imported goods puts pressure on domestic producers to lower their prices in order to remain competitive.

Imported Goods:

By importing goods from countries where they can be produced more efficiently, countries can offer a wider range of products to their consumers at lower prices. This benefits consumers by increasing their purchasing power and providing them with access to a variety of goods that may not be readily available domestically.

Exported Goods:

On the other hand, when a country exports goods to other countries, it can earn revenue and stimulate its economy. However, the prices of these exported goods may also be influenced by trade. If a country has a comparative advantage in producing a particular good, it can sell it at a lower price compared to other countries, which may affect the global market prices of that product.

Overall, trade between countries has a direct impact on prices of products in different countries. It allows countries to specialize in the production of goods they are most efficient at, resulting in lower prices for consumers and increased competition for domestic producers.

Foreign Exchange

Foreign exchange refers to the exchange of one country's currency for another country's currency. It is also known as forex or FX. The foreign exchange market is the largest and most liquid market in the world, with an average daily trading volume of over $5 trillion.

Stock of Foreign Currency

The term foreign exchange specifically refers to the stock of foreign currency held by a country's central bank. The central bank holds foreign currency reserves to facilitate international trade and to support the value of its domestic currency. These reserves are used to intervene in foreign exchange markets to stabilize the value of the domestic currency.

Importance of Foreign Exchange

Foreign exchange is important for international trade and investment. It allows businesses and individuals to buy and sell goods and services across borders. It also enables foreign investment, as investors can buy and sell assets denominated in foreign currencies.

Exchange Rates

Exchange rates are the prices at which one currency can be exchanged for another currency. They are determined by supply and demand in the foreign exchange market. Exchange rates can fluctuate rapidly in response to economic and political events, and can have a significant impact on international trade and investment.

Conclusion

In conclusion, foreign exchange refers to the exchange of one country's currency for another country's currency. The term specifically refers to the stock of foreign currency held by a country's central bank. Foreign exchange is important for international trade and investment, and exchange rates play a key role in determining the value of currencies.

The value of currency of a country is expressed in terms of US Dollar. The US Dollar is the most widely accepted and dominant currency in the world. It serves as the primary reserve currency and is used for international transactions and trade.

The US Dollar as a Reserve Currency:
- The US Dollar has been the dominant reserve currency since the end of World War II. Many countries hold US Dollars as part of their foreign exchange reserves to facilitate international trade and stabilize their economies.
- The US Dollar's status as a reserve currency is supported by the economic and political stability of the United States, as well as the size and liquidity of its financial markets.
- The US Dollar's reserve currency status also stems from the fact that the United States is the world's largest economy and has a strong influence on global trade and financial systems.

Factors Influencing the Value of Currency:
- The value of a currency is determined by various factors, including supply and demand dynamics, interest rates, inflation, economic growth, geopolitical factors, and market sentiment.
- Currency exchange rates fluctuate based on these factors, and the value of a currency relative to another currency is determined by the foreign exchange market.
- In the case of expressing the value of a currency in terms of US Dollars, the exchange rate between the two currencies is used to calculate the value.

Importance of Expressing Currency Value in US Dollars:
- The US Dollar's dominant position in the global economy makes it the standard currency for expressing the value of other currencies.
- Expressing currency value in US Dollars provides a common benchmark for comparison and facilitates international trade and investment.
- It allows businesses and individuals to easily understand the value of different currencies and make informed decisions regarding foreign exchange transactions.

Conclusion:
In conclusion, the value of a country's currency is generally expressed in terms of US Dollars due to its status as the dominant reserve currency and its widespread use in international trade and finance. The US Dollar's stability, liquidity, and influence on global economic systems make it the preferred currency for expressing the value of other currencies.

Decline of the Gold Standard in the 1920s
The gold standard was a monetary system where the value of a country's currency was directly linked to gold. Its importance diminished during the 1920s due to several economic and geopolitical factors.
Impact of World War I
- The First World War (1914-1918) disrupted global economies, leading to inflation and the need for governments to print more currency to finance military efforts.
- Many countries abandoned the gold standard temporarily to manage wartime expenditures, leading to a shift in monetary policies.
Post-War Economic Challenges
- After the war, economies faced significant challenges, including high unemployment and economic instability.
- The return to the gold standard was complicated by the need for countries to stabilize their currencies and manage debts incurred during the war.
Great Depression
- The late 1920s saw the onset of the Great Depression, which further weakened the gold standard.
- Countries were forced to adopt more flexible monetary policies to combat deflation and stimulate growth, moving away from the rigidities of the gold standard.
Shift to Fiat Currency
- The 1920s marked the beginning of a transition toward fiat currency systems, where the value of money is not based on physical commodities but rather on trust in the government.
- This shift allowed greater flexibility in monetary policy, which proved essential during economic crises.
In conclusion, the gold standard lost its importance during the 1920s due to the aftermath of World War I, economic instability, the onset of the Great Depression, and the transition to more adaptable monetary systems.

Current Account Recording of Payments and Receipts

Definition of Current Account:
The current account is a part of the balance of payments that records all the transactions related to goods, services, and income between a country and the rest of the world.

Recording of Payments and Receipts:
The current account records all the payments made by a country to the rest of the world as debits and all the receipts received from the rest of the world as credits.

Explanation of Debit and Credit:
Debit and credit are the two basic accounting terms used to record transactions. A debit entry is recorded when an account is increased, and a credit entry is recorded when an account is decreased.

Example:
Suppose a country imports goods worth $10 million from the rest of the world. This transaction will be recorded in the current account as a debit entry of $10 million. Similarly, if the country exports goods worth $12 million to the rest of the world, this transaction will be recorded in the current account as a credit entry of $12 million.

Conclusion:
In conclusion, the current account records all the transactions related to goods, services, and income between a country and the rest of the world. It records all the payments made by a country to the rest of the world as debits and all the receipts received from the rest of the world as credits.

Postal service
The colonial regime in many countries often left the postal service inadequate throughout their rule. Here's why:

Lack of infrastructure:
- Colonizers often did not prioritize developing postal infrastructure in their colonies, leading to a lack of proper networks and facilities.
- This resulted in slow and unreliable postal services, making communication difficult for the people living under colonial rule.

Focus on other services:
- Colonial powers typically focused more on services like law and order, railways, and ports, which were considered more essential for their economic and administrative purposes.
- As a result, the postal service was often neglected and remained inadequate compared to other services.

Communication control:
- The colonial administration often used the postal service to monitor and control communication within the colonies, rather than improving it for the benefit of the local population.
- This control over communication further hindered the development and efficiency of the postal service.

Legacy of neglect:
- Even after gaining independence, many former colonies continued to struggle with inadequate postal services due to the neglect and lack of investment during the colonial era.
- It took time and effort for these countries to modernize and improve their postal systems to meet the needs of their growing populations.
In conclusion, the postal service remained inadequate under the colonial regime due to a lack of infrastructure development, focus on other essential services, communication control, and the legacy of neglect that persisted even after independence.

AAY (Antyodaya Anna Yojana)

AAY is a government scheme that aims to provide highly subsidized food grains to the poorest of the poor families in India. Here is a detailed explanation of the scheme:

Background
The AAY scheme was launched in December 2000 as a part of the Targeted Public Distribution System (TPDS) with the aim of providing highly subsidized food grains to the poorest families in the country. The scheme was launched in response to the government's commitment to providing food security to the poorest sections of the society.

Eligibility Criteria
The AAY scheme covers the poorest of the poor families, which are identified by the state governments based on the following criteria:

- Families with no adult member between the ages of 16 and 59 years
- Female-headed households with no adult male member between the ages of 16 and 59 years
- Disabled persons who are unable to earn their livelihood
- Widows or terminally ill persons with no assured means of subsistence
- Families with a monthly income of less than Rs. 6,000

Benefits of the Scheme
The AAY scheme provides 35 kg of food grains per month to each eligible family at a highly subsidized rate of Rs. 3 per kg for rice and Rs. 2 per kg for wheat. The families under the AAY scheme are entitled to receive food grains even if they do not have a ration card.

Implementation of the Scheme
The implementation of the AAY scheme is the responsibility of the state governments, which are required to identify the eligible families and issue them the ration cards. The central government provides the food grains to the state governments at a subsidized rate, and the state governments are required to distribute the food grains to the eligible families through the Fair Price Shops (FPS).

Conclusion
The AAY scheme has been successful in providing food security to the poorest of the poor families in India. The scheme has helped to reduce hunger and malnutrition among the vulnerable sections of the society and has provided them with a basic safety net. However, there is still a long way to go in ensuring food security for all, and the government needs to take more effective measures to address this issue.

Poverty line for rural areas

The poverty line is used to determine the number of people living below the poverty line in a particular country. In India, the poverty line is defined as the minimum level of consumption necessary to meet the basic needs of a person.

Consumption worth rupees 328 per person a month

The poverty line defined for rural areas in India is consumption worth rupees 328 per person a month. This means that any person living in a rural area whose consumption is less than rupees 328 per month is considered to be living below the poverty line.

Importance of poverty line

The poverty line is an important tool for measuring and monitoring poverty in a country. It helps the government to identify the number of people living below the poverty line and to design policies and programs to help them.

Challenges in defining poverty line

Defining the poverty line is not an easy task. The poverty line should take into account the different needs of people living in different regions of the country. It should also take into account the different levels of consumption required to meet the basic needs of people living in different areas.

Conclusion

The poverty line defined for rural areas in India is consumption worth rupees 328 per person a month. This is an important tool for measuring and monitoring poverty in the country and for designing policies and programs to help people living below the poverty line. However, defining the poverty line is not an easy task and should take into account the different needs of people living in different regions of the country.

The correct answer is option 'A': Value of all final goods and services produced within the domestic territory of the country over one year period.

Explanation:
Gross Domestic Product (GDP) is a measure of the total value of all final goods and services produced within the domestic territory of a country over a specific time period, usually one year. It is used to gauge the economic performance and growth of a nation.

Components of GDP:
GDP is composed of various components that represent different sectors of the economy. These components include:

1. Consumption: This refers to the total spending by households on goods and services during the given period. It includes both durable goods (such as cars and appliances) and non-durable goods (such as food and clothing).

2. Investment: Investment represents the spending by businesses on capital goods, such as machinery, equipment, and infrastructure, in order to increase production and improve productivity. It also includes residential investment, which refers to the construction of new homes.

3. Government Spending: This component includes all government expenditures on goods and services, such as public infrastructure, defense, education, and healthcare. It represents the contribution of the government to the overall economy.

4. Net Exports: Net exports represent the difference between a country's exports and imports. If a country's exports exceed its imports, it has a trade surplus, which contributes positively to GDP. Conversely, if a country's imports exceed its exports, it has a trade deficit, which negatively affects GDP.

Final Goods and Services:
The GDP calculation only includes the value of final goods and services. Final goods are those that are consumed by the end-user and do not undergo further processing or production. Intermediate goods, on the other hand, are used as inputs in the production process and are not directly consumed.

For example, if a bakery purchases flour to produce bread, the value of the flour is not included in GDP because it is an intermediate good. However, the value of the bread sold to consumers is included in GDP as a final good.

Domestic Territory:
GDP measures the economic activity that occurs within the domestic territory of a country, regardless of whether the production is carried out by domestic or foreign entities. It includes all economic activities that take place within the country's borders, regardless of the nationality of the producers.

Time Period:
GDP is typically measured over a one-year period, although it can also be calculated on a quarterly or monthly basis. The chosen time period allows for comparisons and analysis of economic performance over time.

In conclusion, GDP represents the value of all final goods and services produced within the domestic territory of a country over a specific time period, usually one year. It is a comprehensive measure of economic activity and is composed of consumption, investment, government spending, and net exports.

Infant Mortality Rate

Infant mortality rate (IMR) is a crucial health indicator that measures the number of deaths of infants under the age of one year per 1000 live births. It is a significant measure of the health of a nation, reflecting the quality of healthcare, socioeconomic conditions, and overall living standards of people.

Description

The correct answer is option 'C,' which indicates that the infant mortality rate is the number of deaths up to the age of one year out of 1000 newborn babies. It means that for every 1000 babies born alive, how many infants die before their first birthday.

For example, if a country has an infant mortality rate of 20, it means that out of 1000 live births, 20 babies die before reaching the age of one year. The IMR is usually expressed per 1000 live births, which is a standard way of measuring infant mortality.

Significance

Infant mortality rate is a crucial health indicator that reflects the overall health status of a population. A high infant mortality rate indicates poor health conditions, inadequate healthcare facilities, poor living standards, and poverty in a country. It is a significant measure of the progress of a nation in improving the health and wellbeing of its citizens.

IMR is an essential measure for policymakers, health experts, and researchers to assess the effectiveness of healthcare policies, interventions, and programs aimed at reducing infant mortality. It is also an essential tool for monitoring progress towards achieving the Sustainable Development Goals (SDGs) set by the United Nations.

Conclusion

Infant mortality rate is a critical health indicator that measures the number of deaths of infants under the age of one year per 1000 live births. It is an essential measure of the health and wellbeing of a population and reflects the quality of healthcare, socioeconomic conditions, and overall living standards. It is a crucial tool for policymakers, health experts, and researchers to assess the effectiveness of healthcare policies, interventions, and programs aimed at reducing infant mortality.

Street light is an example of a public good.

- Public Good:
Public goods are goods that are non-excludable and non-rivalrous. This means that once a public good is provided, it is available for everyone to use, and one person's use of the good does not diminish its availability to others.

- Street Light as a Public Good:
Street lights are typically provided and maintained by the government or local authorities. They are essential for public safety and well-being, as they help illuminate roads and public spaces, reducing the risk of accidents and crimes. Since street lights benefit the entire community and are available for use by all without exclusion, they are considered a public good.

- Characteristics of Street Lights as a Public Good:
1. Non-excludable: It is not possible to prevent individuals from benefiting from street lights, even if they do not contribute to their provision.
2. Non-rivalrous: One person's use of street lights does not reduce the availability or usefulness of the lights to others.
3. Public Benefit: Street lights provide a public service by enhancing safety and visibility in public spaces.

In conclusion, street lights are a clear example of a public good due to their non-excludable and non-rivalrous nature, as well as their provision for the benefit of the entire community.

Introduction:
The Central Budget is an annual financial statement presented by the Finance Minister of India in the Parliament. It outlines the government's revenue and expenditure plans for the upcoming fiscal year.

Answer:
The correct answer is option 'B', i.e., 1st February. The Central Budget is presented in India on the last working day of February every year, except in the year of an election. In case of an election year, the budget is presented by the interim government before the elections.

Historical Background:
The first Central Budget of India was presented on 7th April 1860 by James Wilson, the then Finance Member of the India Council. This budget laid the foundation for the modern budget system in India. Since then, the Central Budget has undergone numerous changes and improvements over the years.

Significance of Central Budget:
The Central Budget is a crucial document that holds significant importance for the Indian economy. It outlines the government's plans and policies for the upcoming fiscal year, which affects the lives of every individual in the country. The budget reflects the government's priorities, including its focus on infrastructure development, healthcare, education, defense, and other key areas.

Conclusion:
In conclusion, the Central Budget is presented in India on the last working day of February every year, except in the year of an election. The budget holds immense significance for the Indian economy and is an essential tool for the government to implement its policies and plans.

The main aim of monetary policy is price stability in the economy. This policy is implemented by the central bank of the country, for instance, Reserve Bank of India (RBI), in India. The monetary policy is formulated by the central bank to manage the money supply in the economy, which ultimately affects the interest rates, inflation rate, and economic growth.

The following headings explain the main aim of monetary policy in detail:

1. Price Stability:
The primary objective of monetary policy is to ensure price stability in the economy. It means that the central bank tries to control the inflation rate by regulating the money supply. Inflation occurs when the general price level of goods and services increases. This situation leads to a decrease in the purchasing power of money. Therefore, the central bank tries to keep the inflation rate in check by controlling the money supply.

2. Economic Growth:
Although the primary objective of monetary policy is price stability, it also aims to promote economic growth. The central bank tries to maintain an optimal level of interest rates that can boost investment and consumption. When the interest rates are low, people tend to borrow more, which increases investment and consumption, leading to economic growth.

3. Employment Generation:
Monetary policy can also have an impact on employment generation. When the central bank reduces interest rates, it becomes cheaper for businesses and individuals to borrow money. This situation leads to an increase in investment and consumption, which ultimately creates job opportunities.

4. Trade Surplus:
The aim of monetary policy is not to increase trade surplus. However, it can indirectly affect the trade balance of the country. When the central bank reduces interest rates, the currency of the country may depreciate, making exports cheaper and imports expensive. This situation may lead to an increase in the trade surplus.

Conclusion:
The main aim of monetary policy is to ensure price stability in the economy. However, it can also have an impact on economic growth, employment generation, and trade balance. The central bank formulates the monetary policy to manage the money supply, which ultimately affects the interest rates, inflation rate, and economic growth.

Analysis of Statements
To determine the correctness of the statements regarding foreign investment and foreign exchange reserves in India, let's analyze each statement:
Statement 1
- The statement claims that foreign investment in India grew from approximately US $100 million in 1990-91 to US $467 billion in 2012-13.
- This statement is accurate as it reflects the significant increase in foreign direct investment (FDI) and foreign institutional investment (FII) during that period, driven by economic reforms and liberalization policies in India.
Statement 2
- This statement mentions that foreign exchange reserves increased from about US $6 billion in 1990-91 to about US $304 billion in 2013-14.
- This is also correct, as India experienced substantial growth in its foreign exchange reserves due to improved trade balances and inflows from investments.
Statement 3
- According to this statement, India is one of the largest holders of foreign exchange reserves globally.
- This statement is true, as India consistently ranks among the top countries in terms of foreign exchange reserves, particularly after the economic reforms.
Conclusion
- All three statements are correct.
- Thus, the correct answer is option 'D', meaning all statements are accurate and reflect the economic growth and stability of India during the specified periods.
This comprehensive analysis confirms that the significant rise in foreign investments and reserves has positioned India as a key player in the global economic landscape.