CUET Economics Previous Year Solved Paper 2 (16 July 2022 Slot-1) - Humanities/Arts MCQ

Opportunity cost is commonly defined as the next best alternative. Also, known as the alternative cost, it is the loss of gain which could have been gained if another alternative was chosen.

Complementary goods are goods that are typically used together, When the price of a certain good decreases, the demand for its complementary good will increase.

(Ed = Percentage Change in Quantity Demanded / Percentage Change in Price)

Flow: These are defined as any quantity measured per unit at a particular period of time.

Depreciation involves loss of value of assets due to the passage of time and obsolescence.

Nominal flows refer to the flow of money in the form of money income and spending on goods and services.

A normal resident of a country refers to an individual or an institution who ordinarily resides in the country and whose centre of economic interest also lies in that country. Normal residents include both, individuals and institutions

(NNPfc = NDPfc + NFIA)
(NFIA = –300)
(Net Factor Income From Abroad is 500 and Net
Factor Income to Abroad is 800)

(GDPmp = PFCE + GFCE + GDCF + Net Exports)
(GDPmp = 350 + 100 + 90 + 10) (GDPmp = 550 Cr.)

(S = Y – C) (Autonomous Consumption is 300

so Saving at Zero Income level is –300)

Excess Demand: When the planned aggregate expenditure is greater than the available output at full employment level, the situation is termed as excess demand

Measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures.

The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935.

Main objectives of the government budget is as follows: Reallocation of resources, Redistribution of activities, Stabilizing economic activities Management of public enterprises and Economic growth.

The debt receipts are those which are to be repaid by the government.

Primary deficit = Fiscal deficit – Interest
payments. Therefore, the primary Deficit can be zero, if Fiscal Deficit = Interest Payments

Supply of foreign exchange: refers to the amount of foreign currency available in a country for the purpose of international transactions. It could be in the form of exports, foreign investments, remittances, and other sources that bring in foreign currency to a country. In the case of India, let's analyze each option:

A: Imports of goods from China

• Imports lead to an outflow of foreign exchange, as India has to pay China in foreign currency (usually US dollars) to buy these goods. So, this option would actually reduce the supply of foreign exchange in India.

B: Indian students going to the U.K for engineering

• Indian students going to the UK for higher education would also cause an outflow of foreign exchange. The students would need to pay their tuition fees and living expenses in foreign currency, resulting in a decrease in the supply of foreign exchange in India.

C: Purchase of land in U.S.A

• When Indians purchase land in the USA, they need to pay in foreign currency, usually US dollars. This transaction would also result in a decrease in the supply of foreign exchange in India, as foreign currency is being spent to buy the property.

D: Donations received from European countries

• Donations received from European countries would increase the supply of foreign exchange in India. The donations would be made in foreign currency (such as Euros), which would then be converted into Indian Rupees. This inflow of foreign currency would raise the supply of foreign exchange in India.

Therefore, the correct answer is **D: Donations received from European countries**.

A revaluation is an upward change in the  currency’s value

The correct order of sequence in which RBI undertakes open market operation is as follows:

1. Impending increase in deflation (C):

• The Reserve Bank of India (RBI) intervenes in the economy to maintain price stability, growth and liquidity. If deflation is impending, RBI may undertake open market operations to boost the money supply and stimulate economic growth.

2. RBI buys government bonds in the open market (D):

• To increase the money supply, RBI buys government bonds in the open market. This injects money into the economy, as banks and financial institutions sell bonds to RBI and receive cash in return.

3. Increase in reserves in the economy (B):

• As a result of RBI's purchase of government bonds, the banks and financial institutions that sold the bonds now have more cash in their reserves. This increases their ability to lend to businesses and consumers, which can help stimulate economic growth.

4. Increase in the money supply (A):

• The purchase of government bonds by RBI leads to an increase in the money supply, as more cash is now circulating in the economy. This can help counter deflationary pressures and support economic growth.

5. Economy recovery (E):

• With increased money supply and higher reserves in the banking system, lending activities are likely to pick up. This can lead to higher investments and consumption, ultimately resulting in economic recovery.

The first phase of the green revolution was started in the mid-1960, Karve committee was set up in the year 1955, Industrial Policy Resolution of 1956 (IPR 1956) is a resolution adopted by the Indian parliament in April 1956, 1 April 1951 with the launching of the First Five Year Plan (1951-56.

NITI Aayog was formed via a resolution of the Union Cabinet on 1 January 2015

Answer: B. B, C only

Globalization in India has produced various positive and negative results. Among these, the positive results include:

• Greater access to global markets: As India has opened its economy to the world, it has allowed Indian businesses to access global markets, leading to increased exports, foreign investments, and overall economic growth.

• Increased possibility for greater participation of large industries of developing countries: Globalization has allowed Indian industries to become more competitive and participate in global markets, contributing to economic growth and development.

• Better and advanced technology: Globalization has enabled India to adopt advanced technologies from developed countries, improving the efficiency and productivity of its industries.

However, globalization has also produced some negative results, such as:

• Increased economic disparities among nations and people: While globalization has led to overall economic growth, it has also widened the gap between the rich and the poor, both within India and across the world.
• Domestic companies face stiff competition from multinational companies: Many small and medium-sized Indian companies struggle to compete with large multinational corporations, leading to job losses and a decline in local industries.