Economics Optional Paper 1- 2015 | UPSC Previous Year Question Papers and Video Analysis PDF Download

 Page 1


CS (Main) Exam:2015
C-AVZ-O-FDPA
3T?f?W ( W - W )
W ? : Wk
3^ : 250
(f^ T TO! % 3rft ^ ^ f^rf^f^TcT 3fcfo a ^ T c fr t q j)
3TT3 T O f I cm] ^ 3 T l ^ ^ ^ f I
feT W TOft % 3rR ^ ?!
TO M I 1 3^ 5 3 H p | c i| 4 ? c T C T = J T ^ t TOl 3 $ 3Ir*fa ^Tg ^ T^5 TO Tffa TOl % "3 t K
"Sfr^j M ^ h/ 'T P T % fcl^ PV^ 3^ "3 ^ 1 % 1^ t? I
T O ^ % 3tR ^ f f 3 n i^ fd 3 f r R l ^ ^t1%^, # I W 3 ^ 3 3TN% T ^ T - ^ 3 fo*TT W I , 3 fo w ^TT FTB
3^Z§ T O - ^ - 3 tR (^ J o ^fto TTo) ^Rcl«W % ^ J 3 ^ F f H ^ f^TT *TRI ^ i f ^ l 1 % fecT % srfcfftrfi 3RJ
fqRft ^T«R 3 fc# ^ 3^R ^ ^ 3 ^ M ^ l 
TOt ^ tffaT, RlftRg t, ^1 to r *T R T ^Tfkl
U!tf>/fcR I^I^uI, 1^, '97't % "3fK ^ % f r R P lR g WT? ^T C 3T3R cM H l/^n ^1
TO^ % 3t R} ^ 7 T U H T sMU^K ^ f t I ^ WT ^t, c fl TO % ¥R1 ^ ^ f t ^ ^ 3 x T C 3 R T c T : f^T
^ ^ I TO-^?-3tK J^l^fH 3 W ft |3ff ^ 3 *T % . 3 F H ^ 3 TOI -3 T H T ^T% ^|
ECONOMICS (PAPER-I)
Time Allowed : Three Hours Maximum Marks : 250
QUESTION PAPER SPECIFIC INSTRUCTIONS
(Please read each of the following instructions carefully before attempting questions)
There are EIGHT questions divided in two Sections and printed both in HINDI and 
in ENGLISH.
Candidate has to attempt FIVE questions in all.
Question Nos. 1 and 5 are compulsory and out of the remaining, THREE are to be attempted 
ch6osing at least ONE question from each Section.
The number of marks carried by a question/part is indicated against it.
Answers must be written in the medium authorized in the Admission Certificate which must 
be stated clearly on the cover of this Question-cum-Answer (QCA) Booklet in the space 
provided. No marks will be given for answers written in medium other than the authorized 
one.
Word limit in questions, wherever specified, should be adhered to.
Graphs/illustrations, wherever required, may be drawn/given in the space provided for 
answering the question itself.
Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a 
question shall be counted even if attempted partly. Any page or portion of the page left blank 
in the Question-cum-Answer Booklet must be clearly struck off.
1
[ P.T.O.
Page 2


CS (Main) Exam:2015
C-AVZ-O-FDPA
3T?f?W ( W - W )
W ? : Wk
3^ : 250
(f^ T TO! % 3rft ^ ^ f^rf^f^TcT 3fcfo a ^ T c fr t q j)
3TT3 T O f I cm] ^ 3 T l ^ ^ ^ f I
feT W TOft % 3rR ^ ?!
TO M I 1 3^ 5 3 H p | c i| 4 ? c T C T = J T ^ t TOl 3 $ 3Ir*fa ^Tg ^ T^5 TO Tffa TOl % "3 t K
"Sfr^j M ^ h/ 'T P T % fcl^ PV^ 3^ "3 ^ 1 % 1^ t? I
T O ^ % 3tR ^ f f 3 n i^ fd 3 f r R l ^ ^t1%^, # I W 3 ^ 3 3TN% T ^ T - ^ 3 fo*TT W I , 3 fo w ^TT FTB
3^Z§ T O - ^ - 3 tR (^ J o ^fto TTo) ^Rcl«W % ^ J 3 ^ F f H ^ f^TT *TRI ^ i f ^ l 1 % fecT % srfcfftrfi 3RJ
fqRft ^T«R 3 fc# ^ 3^R ^ ^ 3 ^ M ^ l 
TOt ^ tffaT, RlftRg t, ^1 to r *T R T ^Tfkl
U!tf>/fcR I^I^uI, 1^, '97't % "3fK ^ % f r R P lR g WT? ^T C 3T3R cM H l/^n ^1
TO^ % 3t R} ^ 7 T U H T sMU^K ^ f t I ^ WT ^t, c fl TO % ¥R1 ^ ^ f t ^ ^ 3 x T C 3 R T c T : f^T
^ ^ I TO-^?-3tK J^l^fH 3 W ft |3ff ^ 3 *T % . 3 F H ^ 3 TOI -3 T H T ^T% ^|
ECONOMICS (PAPER-I)
Time Allowed : Three Hours Maximum Marks : 250
QUESTION PAPER SPECIFIC INSTRUCTIONS
(Please read each of the following instructions carefully before attempting questions)
There are EIGHT questions divided in two Sections and printed both in HINDI and 
in ENGLISH.
Candidate has to attempt FIVE questions in all.
Question Nos. 1 and 5 are compulsory and out of the remaining, THREE are to be attempted 
ch6osing at least ONE question from each Section.
The number of marks carried by a question/part is indicated against it.
Answers must be written in the medium authorized in the Admission Certificate which must 
be stated clearly on the cover of this Question-cum-Answer (QCA) Booklet in the space 
provided. No marks will be given for answers written in medium other than the authorized 
one.
Word limit in questions, wherever specified, should be adhered to.
Graphs/illustrations, wherever required, may be drawn/given in the space provided for 
answering the question itself.
Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a 
question shall be counted even if attempted partly. Any page or portion of the page left blank 
in the Question-cum-Answer Booklet must be clearly struck off.
1
[ P.T.O.
T s H Jg — A / SECTION-—A
1. M i ( l 3 3 Trdft TO WFT 150 S Tsft 3 :
Answer the following questions in about 150 words each : 10x5=50
(a) zrn sfo xgm % % t o ^ ^
Explain the backward sloping supply curve of labour as a choice between 
income and leisure.
(b) ' y f c R l f t c I I % S R F f a , c T ^ F T c T 3 , 4 m « ^ ^ t o $ (i) W T R ?
^ T T O , $ 1 s f o ( i l l / ^ % ^ T f ^ f r S r % 3 ^ T T 3 t f q f t * T f c ^
Under perfect competition, in the short run, find out graphically, without using 
average cost curve, the conditions in equilibrium for the existence of (i) normal 
profit, (ii) supernormal profit and (iii) loss.
(c) sftfq % to ? c wn wrnn-w$fe$ ^ ^ t o
State Okun’s law and find out the expectations-augmented Phillips curve.
(d) % f c R # 1 W T 5 T # 3 eft ¦ p r a i ^ t % ^ c p f t n % I T U c f T R T t e
TT$q 3rqi^ (*fto T T ^ o tfto) «F I ^5[f^TR W T 1 W fft f l ” W l W lW i
“If the interest elasticity of demand for money is low, the monetarists could 
predict the real GNP simply by the -use of money supply.” Explain this 
statement.
(e) ^ ^ ^ 'sm ^ ^ wftfci
(io T ^ T o 3TI|o) ^ f^ f 3 T «F R TW ffec! f?
Explain repo rate and reverse repo rate. How do changes in the repo rate affect 
EMIs of borrowers?
2. (a) sm %c^ t o 3 W itt ^ I?
In what way Kaldor’s model of income distribution is basically a Keynesian 
theory? 20
(b) V12 t o 3 T O T $ 3frMltef(i (a ifM ^ T f^ R ) ^FIK ^ ^ ^
wftfcfo w ^ -M ? n ^ ¥rfti °ft m \m w i 11
Explain how Nash equilibrium provides a solution to the problem of strategic 
interdependence among firms in an oligopolistic market. 20
(c) yfci'ip? ( w ^ r ) wm % w 3 ^vk t o t t?
W 3 f^rrc f ?
How is Kaldor-Hicks compensation principle an improvement over Pareto 
optimality criterion? What are Scitovsky’s views in this regard? 10
c-?ra£-©-5firpfl/3o 2
Page 3


CS (Main) Exam:2015
C-AVZ-O-FDPA
3T?f?W ( W - W )
W ? : Wk
3^ : 250
(f^ T TO! % 3rft ^ ^ f^rf^f^TcT 3fcfo a ^ T c fr t q j)
3TT3 T O f I cm] ^ 3 T l ^ ^ ^ f I
feT W TOft % 3rR ^ ?!
TO M I 1 3^ 5 3 H p | c i| 4 ? c T C T = J T ^ t TOl 3 $ 3Ir*fa ^Tg ^ T^5 TO Tffa TOl % "3 t K
"Sfr^j M ^ h/ 'T P T % fcl^ PV^ 3^ "3 ^ 1 % 1^ t? I
T O ^ % 3tR ^ f f 3 n i^ fd 3 f r R l ^ ^t1%^, # I W 3 ^ 3 3TN% T ^ T - ^ 3 fo*TT W I , 3 fo w ^TT FTB
3^Z§ T O - ^ - 3 tR (^ J o ^fto TTo) ^Rcl«W % ^ J 3 ^ F f H ^ f^TT *TRI ^ i f ^ l 1 % fecT % srfcfftrfi 3RJ
fqRft ^T«R 3 fc# ^ 3^R ^ ^ 3 ^ M ^ l 
TOt ^ tffaT, RlftRg t, ^1 to r *T R T ^Tfkl
U!tf>/fcR I^I^uI, 1^, '97't % "3fK ^ % f r R P lR g WT? ^T C 3T3R cM H l/^n ^1
TO^ % 3t R} ^ 7 T U H T sMU^K ^ f t I ^ WT ^t, c fl TO % ¥R1 ^ ^ f t ^ ^ 3 x T C 3 R T c T : f^T
^ ^ I TO-^?-3tK J^l^fH 3 W ft |3ff ^ 3 *T % . 3 F H ^ 3 TOI -3 T H T ^T% ^|
ECONOMICS (PAPER-I)
Time Allowed : Three Hours Maximum Marks : 250
QUESTION PAPER SPECIFIC INSTRUCTIONS
(Please read each of the following instructions carefully before attempting questions)
There are EIGHT questions divided in two Sections and printed both in HINDI and 
in ENGLISH.
Candidate has to attempt FIVE questions in all.
Question Nos. 1 and 5 are compulsory and out of the remaining, THREE are to be attempted 
ch6osing at least ONE question from each Section.
The number of marks carried by a question/part is indicated against it.
Answers must be written in the medium authorized in the Admission Certificate which must 
be stated clearly on the cover of this Question-cum-Answer (QCA) Booklet in the space 
provided. No marks will be given for answers written in medium other than the authorized 
one.
Word limit in questions, wherever specified, should be adhered to.
Graphs/illustrations, wherever required, may be drawn/given in the space provided for 
answering the question itself.
Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a 
question shall be counted even if attempted partly. Any page or portion of the page left blank 
in the Question-cum-Answer Booklet must be clearly struck off.
1
[ P.T.O.
T s H Jg — A / SECTION-—A
1. M i ( l 3 3 Trdft TO WFT 150 S Tsft 3 :
Answer the following questions in about 150 words each : 10x5=50
(a) zrn sfo xgm % % t o ^ ^
Explain the backward sloping supply curve of labour as a choice between 
income and leisure.
(b) ' y f c R l f t c I I % S R F f a , c T ^ F T c T 3 , 4 m « ^ ^ t o $ (i) W T R ?
^ T T O , $ 1 s f o ( i l l / ^ % ^ T f ^ f r S r % 3 ^ T T 3 t f q f t * T f c ^
Under perfect competition, in the short run, find out graphically, without using 
average cost curve, the conditions in equilibrium for the existence of (i) normal 
profit, (ii) supernormal profit and (iii) loss.
(c) sftfq % to ? c wn wrnn-w$fe$ ^ ^ t o
State Okun’s law and find out the expectations-augmented Phillips curve.
(d) % f c R # 1 W T 5 T # 3 eft ¦ p r a i ^ t % ^ c p f t n % I T U c f T R T t e
TT$q 3rqi^ (*fto T T ^ o tfto) «F I ^5[f^TR W T 1 W fft f l ” W l W lW i
“If the interest elasticity of demand for money is low, the monetarists could 
predict the real GNP simply by the -use of money supply.” Explain this 
statement.
(e) ^ ^ ^ 'sm ^ ^ wftfci
(io T ^ T o 3TI|o) ^ f^ f 3 T «F R TW ffec! f?
Explain repo rate and reverse repo rate. How do changes in the repo rate affect 
EMIs of borrowers?
2. (a) sm %c^ t o 3 W itt ^ I?
In what way Kaldor’s model of income distribution is basically a Keynesian 
theory? 20
(b) V12 t o 3 T O T $ 3frMltef(i (a ifM ^ T f^ R ) ^FIK ^ ^ ^
wftfcfo w ^ -M ? n ^ ¥rfti °ft m \m w i 11
Explain how Nash equilibrium provides a solution to the problem of strategic 
interdependence among firms in an oligopolistic market. 20
(c) yfci'ip? ( w ^ r ) wm % w 3 ^vk t o t t?
W 3 f^rrc f ?
How is Kaldor-Hicks compensation principle an improvement over Pareto 
optimality criterion? What are Scitovsky’s views in this regard? 10
c-?ra£-©-5firpfl/3o 2
3. (a) ifrfsfr ^ flfc T # ft t” ^
^ W FTrTI 3 ^ ^ TO ^ R !
"Under rational expectations hypothesis, systematic monetary policy will be 
ineffective.” Explain this statement using a suitable model. 20
(b) 3 3 #% ^ tlt?FTTft % 3 T f^ % Wen 3Tf*F TH ^ 3TR^i f
3 ?K ^ ^ % \
Show that liquidity preference is neither necessary nor sufficient for the 
existence of involuntary unemployment in Keynesian system. 20
(c) 'p srrjft % ^ s?K ^ wr % ^
^ tf^ i
Derive money multiplier when a part of money supply is exogenous and the 
other part is endogenous. 10
4. (a) 3 ffeTC TpO FfrfcI ^ 3 T ^ T T c^ , fg; % ^
T f^ T T (in/ «IN K ^ ^ w n - w n
In the event of persistent inflation in an economy, what changes the Central 
Bank will bring about in (i) reserve ratios, (ii) bank rate and (Hi) open market 
operations? 20
(b) “ w f a M % SlfeRSfl T R tRTr^ $\l ^UrHch ^ ^ f l” W ^ ^TT^T
H K cf % % W\ 3 ^ W W
“Subsidies have both positive and negative impacts on the economy.” Explain 
this statement and illustrate your answer with Indian experience. 20
(c) tw m ~ £ \ ^ 3 % "g sa m a**f 3?k -&{$\ B ife i ^
Explain the meaning and significance of money illusion on the part of workers 
in the Keynesian theory of employment. 10
— B / SECTION— B
5. M i r a 3 3 3 ^ TO W1W \ 150 ^ t[ ^ tf^ T T :
Answer the following questions in about 150 words each : 10x5=50
(a) w 3tn t ^ ^
|? 3T^ 3tR % ^ 3 c T $
Do you think that the root of Harrod’s instability problem lies in the 
assumption of wage-price rigidity? Give arguments in favour of your answer.
(b) ‘feHaT IF E T fl ~m % ? WTK ^ t&Wm % ^l ^ ^ cfl |?
What is ‘immiserizing growth'? How can it be prevented through trade policy 
interventions?
c-?raz.-©-jrtr0fl/3O 3 [ P.T.O.
Page 4


CS (Main) Exam:2015
C-AVZ-O-FDPA
3T?f?W ( W - W )
W ? : Wk
3^ : 250
(f^ T TO! % 3rft ^ ^ f^rf^f^TcT 3fcfo a ^ T c fr t q j)
3TT3 T O f I cm] ^ 3 T l ^ ^ ^ f I
feT W TOft % 3rR ^ ?!
TO M I 1 3^ 5 3 H p | c i| 4 ? c T C T = J T ^ t TOl 3 $ 3Ir*fa ^Tg ^ T^5 TO Tffa TOl % "3 t K
"Sfr^j M ^ h/ 'T P T % fcl^ PV^ 3^ "3 ^ 1 % 1^ t? I
T O ^ % 3tR ^ f f 3 n i^ fd 3 f r R l ^ ^t1%^, # I W 3 ^ 3 3TN% T ^ T - ^ 3 fo*TT W I , 3 fo w ^TT FTB
3^Z§ T O - ^ - 3 tR (^ J o ^fto TTo) ^Rcl«W % ^ J 3 ^ F f H ^ f^TT *TRI ^ i f ^ l 1 % fecT % srfcfftrfi 3RJ
fqRft ^T«R 3 fc# ^ 3^R ^ ^ 3 ^ M ^ l 
TOt ^ tffaT, RlftRg t, ^1 to r *T R T ^Tfkl
U!tf>/fcR I^I^uI, 1^, '97't % "3fK ^ % f r R P lR g WT? ^T C 3T3R cM H l/^n ^1
TO^ % 3t R} ^ 7 T U H T sMU^K ^ f t I ^ WT ^t, c fl TO % ¥R1 ^ ^ f t ^ ^ 3 x T C 3 R T c T : f^T
^ ^ I TO-^?-3tK J^l^fH 3 W ft |3ff ^ 3 *T % . 3 F H ^ 3 TOI -3 T H T ^T% ^|
ECONOMICS (PAPER-I)
Time Allowed : Three Hours Maximum Marks : 250
QUESTION PAPER SPECIFIC INSTRUCTIONS
(Please read each of the following instructions carefully before attempting questions)
There are EIGHT questions divided in two Sections and printed both in HINDI and 
in ENGLISH.
Candidate has to attempt FIVE questions in all.
Question Nos. 1 and 5 are compulsory and out of the remaining, THREE are to be attempted 
ch6osing at least ONE question from each Section.
The number of marks carried by a question/part is indicated against it.
Answers must be written in the medium authorized in the Admission Certificate which must 
be stated clearly on the cover of this Question-cum-Answer (QCA) Booklet in the space 
provided. No marks will be given for answers written in medium other than the authorized 
one.
Word limit in questions, wherever specified, should be adhered to.
Graphs/illustrations, wherever required, may be drawn/given in the space provided for 
answering the question itself.
Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a 
question shall be counted even if attempted partly. Any page or portion of the page left blank 
in the Question-cum-Answer Booklet must be clearly struck off.
1
[ P.T.O.
T s H Jg — A / SECTION-—A
1. M i ( l 3 3 Trdft TO WFT 150 S Tsft 3 :
Answer the following questions in about 150 words each : 10x5=50
(a) zrn sfo xgm % % t o ^ ^
Explain the backward sloping supply curve of labour as a choice between 
income and leisure.
(b) ' y f c R l f t c I I % S R F f a , c T ^ F T c T 3 , 4 m « ^ ^ t o $ (i) W T R ?
^ T T O , $ 1 s f o ( i l l / ^ % ^ T f ^ f r S r % 3 ^ T T 3 t f q f t * T f c ^
Under perfect competition, in the short run, find out graphically, without using 
average cost curve, the conditions in equilibrium for the existence of (i) normal 
profit, (ii) supernormal profit and (iii) loss.
(c) sftfq % to ? c wn wrnn-w$fe$ ^ ^ t o
State Okun’s law and find out the expectations-augmented Phillips curve.
(d) % f c R # 1 W T 5 T # 3 eft ¦ p r a i ^ t % ^ c p f t n % I T U c f T R T t e
TT$q 3rqi^ (*fto T T ^ o tfto) «F I ^5[f^TR W T 1 W fft f l ” W l W lW i
“If the interest elasticity of demand for money is low, the monetarists could 
predict the real GNP simply by the -use of money supply.” Explain this 
statement.
(e) ^ ^ ^ 'sm ^ ^ wftfci
(io T ^ T o 3TI|o) ^ f^ f 3 T «F R TW ffec! f?
Explain repo rate and reverse repo rate. How do changes in the repo rate affect 
EMIs of borrowers?
2. (a) sm %c^ t o 3 W itt ^ I?
In what way Kaldor’s model of income distribution is basically a Keynesian 
theory? 20
(b) V12 t o 3 T O T $ 3frMltef(i (a ifM ^ T f^ R ) ^FIK ^ ^ ^
wftfcfo w ^ -M ? n ^ ¥rfti °ft m \m w i 11
Explain how Nash equilibrium provides a solution to the problem of strategic 
interdependence among firms in an oligopolistic market. 20
(c) yfci'ip? ( w ^ r ) wm % w 3 ^vk t o t t?
W 3 f^rrc f ?
How is Kaldor-Hicks compensation principle an improvement over Pareto 
optimality criterion? What are Scitovsky’s views in this regard? 10
c-?ra£-©-5firpfl/3o 2
3. (a) ifrfsfr ^ flfc T # ft t” ^
^ W FTrTI 3 ^ ^ TO ^ R !
"Under rational expectations hypothesis, systematic monetary policy will be 
ineffective.” Explain this statement using a suitable model. 20
(b) 3 3 #% ^ tlt?FTTft % 3 T f^ % Wen 3Tf*F TH ^ 3TR^i f
3 ?K ^ ^ % \
Show that liquidity preference is neither necessary nor sufficient for the 
existence of involuntary unemployment in Keynesian system. 20
(c) 'p srrjft % ^ s?K ^ wr % ^
^ tf^ i
Derive money multiplier when a part of money supply is exogenous and the 
other part is endogenous. 10
4. (a) 3 ffeTC TpO FfrfcI ^ 3 T ^ T T c^ , fg; % ^
T f^ T T (in/ «IN K ^ ^ w n - w n
In the event of persistent inflation in an economy, what changes the Central 
Bank will bring about in (i) reserve ratios, (ii) bank rate and (Hi) open market 
operations? 20
(b) “ w f a M % SlfeRSfl T R tRTr^ $\l ^UrHch ^ ^ f l” W ^ ^TT^T
H K cf % % W\ 3 ^ W W
“Subsidies have both positive and negative impacts on the economy.” Explain 
this statement and illustrate your answer with Indian experience. 20
(c) tw m ~ £ \ ^ 3 % "g sa m a**f 3?k -&{$\ B ife i ^
Explain the meaning and significance of money illusion on the part of workers 
in the Keynesian theory of employment. 10
— B / SECTION— B
5. M i r a 3 3 3 ^ TO W1W \ 150 ^ t[ ^ tf^ T T :
Answer the following questions in about 150 words each : 10x5=50
(a) w 3tn t ^ ^
|? 3T^ 3tR % ^ 3 c T $
Do you think that the root of Harrod’s instability problem lies in the 
assumption of wage-price rigidity? Give arguments in favour of your answer.
(b) ‘feHaT IF E T fl ~m % ? WTK ^ t&Wm % ^l ^ ^ cfl |?
What is ‘immiserizing growth'? How can it be prevented through trade policy 
interventions?
c-?raz.-©-jrtr0fl/3O 3 [ P.T.O.
( c) ^ T N R ^ 3 t o 3 ^ R W ^ T T T O T | ?
How does carbon trading help in reducing environmental degradation?
(d) f o a f t g s a % i ^ f f t ^ f f t % ^ t c t r - ' s ^ r ^ t o w ^ s m f c r a
^R ct I?
How do depreciation and appreciation in the external value of a currency
impact a country’s balance of payments?
(e) ‘ 3?K 3R R jfcTcT TorftM ^ f,
?|” ^ W ^ TO
“Balanced and unbalanced growth strategies are not substitutes but 
complementary to each other.” Explain this statement.
6. (a) i\-^n 3, wttc ^ crtt to r
^ J T 3 T $ J c * T S T U H R
In the context of a two-country model, derive foreign trade multiplier and 
explain its working. What will be its repercussion? 20
(b ) Tfrto m 3 fR 3nfe m 3 ^tt ^ ^ ^ ^tnr fare 3
^ I M R m "S fc t^ T -Slcrlcl 1?? T r R % <*>K«| Mt^cl 
Distinguish between Monetary union and Economic union. Do the proliferating 
trading blocks adversely affect the free trade in the world? Give reasons for 
your answer. 20
(c) tercralta ^rif % ^rfMWi % tot affi ^tt f t M I?
What are the advantages and disadvantages of capital mobility for developing 
countries? 10
7 . (a) a-fa ^?fk ^ tftfrcr f , cR ^ Ict-srtct^
( ^ 3 T c T - ^ r T m r t e i h ” ^ w ^ t f ^ i
“As long as the substitution possibilities between foreign and domestic 
resources are limited, the dual-gap analysis is relevant.” Critically examine this 
statement. 20
(b ) ^ 3?sN^sn 3, fa, ^ sn , ^ --3 ? ^ fa c r a r 4 k tera (stro ^ ^ D )
fa f , ^ ^ wftctt 3 (i)^ \ 4 k w w 'm m ^ ^ tt^ ^ ^ ^
^ T I 3 T T ^ r a I ^K 3 rfc T oZrfrf) ^ T ^ M M t ^ 3 ^ T T 3 T W m 1 1
In an economy having two sectors, namely, goods-producing sector and 
Research and Development (R & D) sector, prove with the help of new growth 
theory that (i) both capital and aggregate output must grow at the same rate 
and (ii) per capita output must grow at the rate of growth of technology. 20
( c ) *r i% fc r ^ TO T I ? w 3 T O ^ T T J % 3TTf?fo 3 T IT O a f t ^ T R t o 3I3TR
W f s f c T T c ^ U T ^ I f I
What is indicative planning? In this context, explain how State and markets 
can play a synergetic role in economic development. 10
4
Page 5


CS (Main) Exam:2015
C-AVZ-O-FDPA
3T?f?W ( W - W )
W ? : Wk
3^ : 250
(f^ T TO! % 3rft ^ ^ f^rf^f^TcT 3fcfo a ^ T c fr t q j)
3TT3 T O f I cm] ^ 3 T l ^ ^ ^ f I
feT W TOft % 3rR ^ ?!
TO M I 1 3^ 5 3 H p | c i| 4 ? c T C T = J T ^ t TOl 3 $ 3Ir*fa ^Tg ^ T^5 TO Tffa TOl % "3 t K
"Sfr^j M ^ h/ 'T P T % fcl^ PV^ 3^ "3 ^ 1 % 1^ t? I
T O ^ % 3tR ^ f f 3 n i^ fd 3 f r R l ^ ^t1%^, # I W 3 ^ 3 3TN% T ^ T - ^ 3 fo*TT W I , 3 fo w ^TT FTB
3^Z§ T O - ^ - 3 tR (^ J o ^fto TTo) ^Rcl«W % ^ J 3 ^ F f H ^ f^TT *TRI ^ i f ^ l 1 % fecT % srfcfftrfi 3RJ
fqRft ^T«R 3 fc# ^ 3^R ^ ^ 3 ^ M ^ l 
TOt ^ tffaT, RlftRg t, ^1 to r *T R T ^Tfkl
U!tf>/fcR I^I^uI, 1^, '97't % "3fK ^ % f r R P lR g WT? ^T C 3T3R cM H l/^n ^1
TO^ % 3t R} ^ 7 T U H T sMU^K ^ f t I ^ WT ^t, c fl TO % ¥R1 ^ ^ f t ^ ^ 3 x T C 3 R T c T : f^T
^ ^ I TO-^?-3tK J^l^fH 3 W ft |3ff ^ 3 *T % . 3 F H ^ 3 TOI -3 T H T ^T% ^|
ECONOMICS (PAPER-I)
Time Allowed : Three Hours Maximum Marks : 250
QUESTION PAPER SPECIFIC INSTRUCTIONS
(Please read each of the following instructions carefully before attempting questions)
There are EIGHT questions divided in two Sections and printed both in HINDI and 
in ENGLISH.
Candidate has to attempt FIVE questions in all.
Question Nos. 1 and 5 are compulsory and out of the remaining, THREE are to be attempted 
ch6osing at least ONE question from each Section.
The number of marks carried by a question/part is indicated against it.
Answers must be written in the medium authorized in the Admission Certificate which must 
be stated clearly on the cover of this Question-cum-Answer (QCA) Booklet in the space 
provided. No marks will be given for answers written in medium other than the authorized 
one.
Word limit in questions, wherever specified, should be adhered to.
Graphs/illustrations, wherever required, may be drawn/given in the space provided for 
answering the question itself.
Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a 
question shall be counted even if attempted partly. Any page or portion of the page left blank 
in the Question-cum-Answer Booklet must be clearly struck off.
1
[ P.T.O.
T s H Jg — A / SECTION-—A
1. M i ( l 3 3 Trdft TO WFT 150 S Tsft 3 :
Answer the following questions in about 150 words each : 10x5=50
(a) zrn sfo xgm % % t o ^ ^
Explain the backward sloping supply curve of labour as a choice between 
income and leisure.
(b) ' y f c R l f t c I I % S R F f a , c T ^ F T c T 3 , 4 m « ^ ^ t o $ (i) W T R ?
^ T T O , $ 1 s f o ( i l l / ^ % ^ T f ^ f r S r % 3 ^ T T 3 t f q f t * T f c ^
Under perfect competition, in the short run, find out graphically, without using 
average cost curve, the conditions in equilibrium for the existence of (i) normal 
profit, (ii) supernormal profit and (iii) loss.
(c) sftfq % to ? c wn wrnn-w$fe$ ^ ^ t o
State Okun’s law and find out the expectations-augmented Phillips curve.
(d) % f c R # 1 W T 5 T # 3 eft ¦ p r a i ^ t % ^ c p f t n % I T U c f T R T t e
TT$q 3rqi^ (*fto T T ^ o tfto) «F I ^5[f^TR W T 1 W fft f l ” W l W lW i
“If the interest elasticity of demand for money is low, the monetarists could 
predict the real GNP simply by the -use of money supply.” Explain this 
statement.
(e) ^ ^ ^ 'sm ^ ^ wftfci
(io T ^ T o 3TI|o) ^ f^ f 3 T «F R TW ffec! f?
Explain repo rate and reverse repo rate. How do changes in the repo rate affect 
EMIs of borrowers?
2. (a) sm %c^ t o 3 W itt ^ I?
In what way Kaldor’s model of income distribution is basically a Keynesian 
theory? 20
(b) V12 t o 3 T O T $ 3frMltef(i (a ifM ^ T f^ R ) ^FIK ^ ^ ^
wftfcfo w ^ -M ? n ^ ¥rfti °ft m \m w i 11
Explain how Nash equilibrium provides a solution to the problem of strategic 
interdependence among firms in an oligopolistic market. 20
(c) yfci'ip? ( w ^ r ) wm % w 3 ^vk t o t t?
W 3 f^rrc f ?
How is Kaldor-Hicks compensation principle an improvement over Pareto 
optimality criterion? What are Scitovsky’s views in this regard? 10
c-?ra£-©-5firpfl/3o 2
3. (a) ifrfsfr ^ flfc T # ft t” ^
^ W FTrTI 3 ^ ^ TO ^ R !
"Under rational expectations hypothesis, systematic monetary policy will be 
ineffective.” Explain this statement using a suitable model. 20
(b) 3 3 #% ^ tlt?FTTft % 3 T f^ % Wen 3Tf*F TH ^ 3TR^i f
3 ?K ^ ^ % \
Show that liquidity preference is neither necessary nor sufficient for the 
existence of involuntary unemployment in Keynesian system. 20
(c) 'p srrjft % ^ s?K ^ wr % ^
^ tf^ i
Derive money multiplier when a part of money supply is exogenous and the 
other part is endogenous. 10
4. (a) 3 ffeTC TpO FfrfcI ^ 3 T ^ T T c^ , fg; % ^
T f^ T T (in/ «IN K ^ ^ w n - w n
In the event of persistent inflation in an economy, what changes the Central 
Bank will bring about in (i) reserve ratios, (ii) bank rate and (Hi) open market 
operations? 20
(b) “ w f a M % SlfeRSfl T R tRTr^ $\l ^UrHch ^ ^ f l” W ^ ^TT^T
H K cf % % W\ 3 ^ W W
“Subsidies have both positive and negative impacts on the economy.” Explain 
this statement and illustrate your answer with Indian experience. 20
(c) tw m ~ £ \ ^ 3 % "g sa m a**f 3?k -&{$\ B ife i ^
Explain the meaning and significance of money illusion on the part of workers 
in the Keynesian theory of employment. 10
— B / SECTION— B
5. M i r a 3 3 3 ^ TO W1W \ 150 ^ t[ ^ tf^ T T :
Answer the following questions in about 150 words each : 10x5=50
(a) w 3tn t ^ ^
|? 3T^ 3tR % ^ 3 c T $
Do you think that the root of Harrod’s instability problem lies in the 
assumption of wage-price rigidity? Give arguments in favour of your answer.
(b) ‘feHaT IF E T fl ~m % ? WTK ^ t&Wm % ^l ^ ^ cfl |?
What is ‘immiserizing growth'? How can it be prevented through trade policy 
interventions?
c-?raz.-©-jrtr0fl/3O 3 [ P.T.O.
( c) ^ T N R ^ 3 t o 3 ^ R W ^ T T T O T | ?
How does carbon trading help in reducing environmental degradation?
(d) f o a f t g s a % i ^ f f t ^ f f t % ^ t c t r - ' s ^ r ^ t o w ^ s m f c r a
^R ct I?
How do depreciation and appreciation in the external value of a currency
impact a country’s balance of payments?
(e) ‘ 3?K 3R R jfcTcT TorftM ^ f,
?|” ^ W ^ TO
“Balanced and unbalanced growth strategies are not substitutes but 
complementary to each other.” Explain this statement.
6. (a) i\-^n 3, wttc ^ crtt to r
^ J T 3 T $ J c * T S T U H R
In the context of a two-country model, derive foreign trade multiplier and 
explain its working. What will be its repercussion? 20
(b ) Tfrto m 3 fR 3nfe m 3 ^tt ^ ^ ^ ^tnr fare 3
^ I M R m "S fc t^ T -Slcrlcl 1?? T r R % <*>K«| Mt^cl 
Distinguish between Monetary union and Economic union. Do the proliferating 
trading blocks adversely affect the free trade in the world? Give reasons for 
your answer. 20
(c) tercralta ^rif % ^rfMWi % tot affi ^tt f t M I?
What are the advantages and disadvantages of capital mobility for developing 
countries? 10
7 . (a) a-fa ^?fk ^ tftfrcr f , cR ^ Ict-srtct^
( ^ 3 T c T - ^ r T m r t e i h ” ^ w ^ t f ^ i
“As long as the substitution possibilities between foreign and domestic 
resources are limited, the dual-gap analysis is relevant.” Critically examine this 
statement. 20
(b ) ^ 3?sN^sn 3, fa, ^ sn , ^ --3 ? ^ fa c r a r 4 k tera (stro ^ ^ D )
fa f , ^ ^ wftctt 3 (i)^ \ 4 k w w 'm m ^ ^ tt^ ^ ^ ^
^ T I 3 T T ^ r a I ^K 3 rfc T oZrfrf) ^ T ^ M M t ^ 3 ^ T T 3 T W m 1 1
In an economy having two sectors, namely, goods-producing sector and 
Research and Development (R & D) sector, prove with the help of new growth 
theory that (i) both capital and aggregate output must grow at the same rate 
and (ii) per capita output must grow at the rate of growth of technology. 20
( c ) *r i% fc r ^ TO T I ? w 3 T O ^ T T J % 3TTf?fo 3 T IT O a f t ^ T R t o 3I3TR
W f s f c T T c ^ U T ^ I f I
What is indicative planning? In this context, explain how State and markets 
can play a synergetic role in economic development. 10
4
8. (a) Sfcniwi (# i ^ 3m o p tt I? o w n fa w ^ u$to sm
3 fas w r *wip|g fa*n ^t % \
What do you mean by ‘green accounting*? Discuss how this concept can be 
incorporated in national income accounting. 10
(b) ^ ^ w rftm ^ tr v£\ 3 (% # ^ )
w isr! ^ 'm .
Discuss the role of renewable energy resources in order to maintain 
environmental sustainability with special reference to India. 20
(c) crm-ffe ^ % t o afo % t o 3 ffe ^ f t i ” 3 W fa
cFTC-ffe ^ fa^ *n 3RK?gto M TSft qft^T
“Global warming will certainly increase the cry of the earth and the cry 
of the poor.* In this context, examine the international efforts to reduce 
global warming. 20
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c -m z -e -t f B -m / s o 5 SB6—400