CUET Economics Previous Year Solved Paper 1 (15 July 2022 Slot-2) - Humanities/Arts MCQ

Current account refers to an account which records all the transactions relating to export and import of goods and services and unilateral transfers during a given period of time

When the exchange rate changes from Rs.95 for a pound to Rs.100 for a pound, it means that the Indian rupee has depreciated (or weakened) against the British Pound. This change in exchange rate affects the trade between the two countries in the following ways:

Indian Exports to Britain:

• The depreciation of the Indian rupee makes Indian goods and services cheaper for British consumers.
• This price advantage is likely to encourage British importers to buy more Indian products and services, leading to an increase in Indian exports to Britain.
• Therefore, option A (Indian exports to Britain will increase) is the correct answer.

Indian Imports from Britain:

• On the other hand, the depreciation of the Indian rupee makes British goods and services more expensive for Indian consumers.
• This price disadvantage is likely to discourage Indian importers from buying British products and services, leading to a decrease in Indian imports from Britain.

Overall Trade Impact:

• The depreciation of the Indian rupee against the British Pound will likely lead to an increase in Indian exports to Britain and a decrease in Indian imports from Britain.
• This change in trade dynamics can potentially improve the trade balance between the two countries by reducing India's trade deficit with Britain.

Loan taken by a firm for productive activities

Fall in the value of fixed asset due to normal wear and tear and foreseen obsolescence is called depreciation.

(GVAfc = NVAfc + Dep.) (GVAfc = 200 + 40 = 240 Crore)

Activities resulting in benefits to others are called positive externalities and increase welfare whereas those resulting in harm to others are called negative externalities and thus decrease welfare.

Intermediate goods refer to those goods which are used either for resale or for further production

Planned Inventory: In case of an expected fall in sales, the firm will have unsold stock of goods which had not been anticipated.

The correct answer is: **A: A, B and D only

The currency issued by the Reserve Bank of India (RBI) can be referred to by several names, such as:

1. High powered money: This term is used to describe the currency in circulation, as it has a significant impact on the money supply and the overall economy. High powered money includes currency notes and coins issued by the RBI.
2. Reserve money: Also known as the monetary base, reserve money is the total amount of currency in circulation and the reserves held by banks with the central bank (RBI). This is the base on which the banking system creates credit and expands the money supply.
3. Monetary base: This term is synonymous with reserve money, referring to the total amount of currency in circulation and the reserves held by banks with the central bank (RBI). The monetary base serves as the foundation for the banking system to create credit and expand the money supply.

The other two options, C and E, are not accurate names for the currency issued by the Reserve Bank of India:

• Bank money: This term typically refers to the credit created by commercial banks through the process of lending and deposit creation. Bank money is not a term used to describe the currency issued by the RBI.
• Fiscal base: This term is not related to currency issuance. Instead, it refers to the tax revenue and other sources of income that a government relies on to fund its spending and meet its obligations.

The supply of money means the total stock of all the forms of money (paper money, coins and demand deposits of banks) which are held by the public at any particular points of time.

The correct answer is C: A, B, C, and D only.

Economic policies adopted by both India and Pakistan include:

Mixed economy:

• Both countries have adopted a mixed economy system, where both public and private sectors coexist and contribute to the economic development.
• In a mixed economy, the government plays a significant role in the allocation of resources, while private enterprises also operate freely.

Import-substitution:

• Both India and Pakistan have adopted import-substitution policies to reduce their dependence on imports and promote domestic industries.
• This policy aims to encourage domestic production and reduce the reliance on foreign goods, thereby saving foreign exchange and fostering self-reliance.

Green Revolution:

• The Green Revolution refers to the period of rapid agricultural growth and increased food production, resulting from the introduction of high-yielding variety seeds, fertilizers, pesticides, and modern agricultural practices.
• Both India and Pakistan have benefitted from the Green Revolution, which has helped in achieving food security and reducing poverty in rural areas.

Five Year Plans:

• Both countries have implemented Five Year Plans, which are centralized and integrated national economic programs aimed at achieving specific developmental goals within a specific period.
• The Five Year Plans help in prioritizing and allocating resources to different sectors of the economy, such as agriculture, industry, infrastructure, and social services, to achieve balanced and sustainable development.

In 1969 when India adopted social banking and multi-agency approach to meet rural credit. Kudumbashree, the Kerala State Poverty Eradication Mission was launched on 17th May 1998.NABARD came into existence on 12 July 1982.The Green Revolution in India was initiated in the 1960.

The objective of the Karve Committee was to focus on rural development, particularly in the area of Small Scale Industries. The committee was formed in India during the 1950s to address issues related to rural development and promote growth in this sector.

Small Scale Industries:

• - These industries are characterized by their small size, low capital investment, and limited number of employees.
• - They play a crucial role in the economic development of rural areas by providing employment opportunities and promoting regional growth.
• - Small Scale Industries help in the equitable distribution of wealth and resources by minimizing the concentration of economic power.

Role of the Karve Committee:

• The committee aimed to identify the problems faced by small-scale industries and suggest suitable measures to overcome them.
• It studied the existing infrastructure and resources available in rural areas to support the growth and development of Small Scale Industries.
• The committee suggested various policies and programs to promote the growth of these industries, such as providing financial assistance, technical support, and marketing assistance.

Significance of the Karve Committee:

• The recommendations made by the Karve Committee helped in the formulation of various policies and schemes to support the growth of Small Scale Industries in India.
• The committee's focus on rural development and Small Scale Industries contributed to providing employment opportunities, reducing poverty, and promoting regional growth in rural areas.
• The committee's work laid the foundation for future initiatives and policies aimed at boosting the growth of Small Scale Industries and overall rural development in India.

Downward Movement of Demand Curve - When the price of the commodity falls, the quantity demanded rises. It leads to the downward movement of the demand curve. It is also known as expansion of demand.

Budget Set It refers to the set of all possible combinations of two goods which a consumer can afford at given income and prices in the market.

The correct answer is C: A, B, and D.

The liberation of trade and investment regime in the Indian Economy in 1991 aimed to provide for:

A. International competitiveness of industrial production:

• To enable Indian industries to compete on a global scale and increase their market share in international trade.

B. Promotion of competitiveness of local industries:

• To encourage domestic industries to improve their efficiency and productivity to compete with foreign industries in the local market.

D. Adoption of modern technologies:

• To facilitate the transfer and adoption of advanced technologies and practices from developed countries, helping Indian industries to modernize their production processes and improve their product quality.

The correct option is C: Gender equality in decision making within the family. This feature is not typically found amongst the poor because of the following reasons:

• Traditional gender roles: In many poor households, traditional gender roles are more prevalent, which often leads to women having less say in family decisions.
• Lack of education and awareness: Due to limited access to education and information, many people in poor households may not be aware of the importance of gender equality and its benefits for the family and society.
• Financial dependence: Women in poor families are often financially dependent on their male counterparts, which can limit their decision-making power within the family.
• Social and cultural norms: In some communities, social and cultural norms dictate that men should be the primary decision-makers in the family, which can lead to gender inequality in decision making.

In contrast, options A, B, and D describe common challenges faced by poor individuals and families:

• - Malnutrition and hunger: Poor households often struggle to access adequate food and nutrition, which can lead to malnutrition and hunger.
• Lack of basic literacy and skill: Limited access to education and training opportunities can result in poor individuals lacking basic literacy and skills needed for sustainable employment and personal development.
• Unable to negotiate their legal wages: Poor workers may not be aware of their legal rights or may lack the resources to advocate for fair wages, leading to exploitation and underpayment.

Human capital refers to the stock of skill, ability, expertise, education, and knowledge in a nation at a point of time. Education investment is recognised as one of the main sources of human capital along with other sources like health, migration, on-job training, and information.

Incidence of poverty is estimated by the Planning Commission (NITI Aayog).

The first seven five years plans gave importance to self-reliance which means avoiding imports of those goods which could be produced in India itself.

Answer: A. Occupational structure

The Occupational structure refers to the distribution of the workforce among various sectors of the economy, such as agriculture, industry, and services. The contribution made by agriculture, industrial, and services sectors together helps in determining the occupational structure of a country or region.

• Agriculture sector: This sector includes activities related to farming, forestry, fishing, and livestock. It involves the production of food, raw materials, and other goods through the cultivation of plants and the raising of animals.
• Industrial sector: This sector includes activities related to manufacturing, mining, construction, and utilities. It involves the production of goods, such as machinery, chemicals, textiles, and metals, by processing raw materials from the agriculture sector or extracting resources from the earth.
• Services sector: This sector includes activities related to trade, finance, education, healthcare, and other professional and social services. It involves the provision of services to consumers, businesses, and governments through various means, such as retail, transportation, or consulting.

The distribution of the workforce among these three sectors and their respective contributions to a country's economy can provide insights into the overall occupational structure and the economic development of the country. A shift from a predominantly agricultural-based economy to a more balanced distribution among agriculture, industry, and services sectors usually indicates a progressing economy, while a higher concentration of workforce in the services sector can indicate a more advanced economy.

The correct answer is B: A and C only.

• A. Primary sector is still the major source of employment in India: This statement is correct. Despite the growth of the secondary and tertiary sectors, the primary sector, which includes agriculture, forestry, and fishing, remains the largest source of employment in India. A significant portion of the population still relies on agriculture for their livelihood.
• B. All the public sector establishment and those private sector establishment are called formal sector: This statement is incorrect. The formal sector includes only those establishments that are registered, follow government regulations, and provide social security benefits to their employees. It includes both public and private sector establishments, but not all private sector establishments fall under the formal sector. Some may be part of the informal sector.
• C. Majority of Indian work force is employed in the informal sector: This statement is correct. The informal sector consists of establishments that are unregistered, do not follow government regulations, and do not provide social security benefits to their employees. A significant majority of the Indian workforce is employed in the informal sector, which includes small-scale industries, street vendors, and casual laborers.
• D. Majority of Indian work force is regular salaried: This statement is incorrect. The majority of the Indian workforce is engaged in the informal sector, where workers are typically not provided with regular salaries or social security benefits.
• E. Growth of employment has decelerated: This statement is debatable. While there has been a slowdown in employment growth in some sectors, employment opportunities in others, such as the service sector, have been growing. Overall, the growth of employment in India has been relatively slow in recent years, but it is not universally decelerating.

The organization that collects data related to unemployment in India is the National Sample Survey Organization (NSSO). The reasons for this are:
Large-scale surveys:

• The NSSO conducts large-scale surveys across the country, covering various socio-economic aspects, such as employment, education, and health.

Periodic data collection:

• The organization collects data on a periodic basis, which helps in tracking changes in unemployment rates over time.

Representative samples:

• The NSSO uses a representative sample of the population to ensure that the data collected accurately reflects the reality of the entire country.

Data reliability:

• The data collected by the NSSO is considered reliable and is widely used by policymakers, researchers, and other stakeholders to analyze and address unemployment-related issues in India.

Collaboration with other organizations:

• The NSSO works closely with other organizations and government agencies, such as the Central Statistical Organization, to ensure that the data collected is comprehensive and accurate.

(AD = C + I), Let Y = 0
So, 250 = (150 + 0.6Y + I)
(250 = 150 + I)
(I = 250 – 150 = 100 Cr).