InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 4651. |
What are projective techniques ? |
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Answer» Method used in the study of personality and social motives in which a subject is presented with a relatively ambiguous stimulus and asked to describe it in a meaningful way or to tell a story about it. |
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| 4652. |
How does the knowledge of psychology help in preventing crime ? |
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Answer» In a legal sense, person of 21 years and above convicted by the court of law for violating the provisions of IPS and CPC is labelled a criminal in our country and the illegal act for which he is convicted is known as crime. Any behavious like pickpocketing, gambling, burglary, robbery, theft, dacoity, rape, kidnapping and abduction attempts at suicide, murder, riots, destroying another’s property, sexual assault, prostitution, cheating, counterfeiting, failure to deposit taxes and revenue, etc. are termed criminal behaviour. Prevention : The remedy for criminal behaviour demands preventive measures. The preventive measures involve improve-ment of social factors and environmental conditions that are responsible for the germination and perpetuation of criminal behaviour. The problem is a gigantic one and needs the cooperation of parents, members of the family, neighbourhood, community, school or college authorities, religious heads, police and government officials responsible for the social and psychological environment of the inhabitants of a society. The following measures may be fruitful in the prevention task: Since today’s delinquents are tomorrow’s criminals, maximum efforts should be made for the prevention, control and treatment of the identified delinquents. There is great need for social reforms and breaking social and caste barriers. The task narrowing the gulf between the rich and the poor, linguistic groups and religious sects should be given priority. The importance of moral values should be inculcated. There should be an end to the crisis of character threatening the existence of the moral base and legal codes of our society. The system of education and national planning need re-thinking and re-modification for minimising economic difficulties of our youth and adults. The problem of unemployment has to be checked and the professional dissatisfaction as well as frustration effecting the vast population of the younger generation should be curbed. Attempts should be made to minimize undesirable influence of literature, films and other mass media. The parents, elders, government authorities, social, religious, educational and political leaders should be such that they become ideals of socially desirable behavior. The society should feel the necessity of providing social and legal justice to its citizens. In case of environmental deprivations and hazards of life, the affected individual should be helped, protected and rehabilitated. Thus, there is a need for modifying the environmental conditions so that one does not fall victim to social and emotional maladjustment or lured by the criminals and drifted by instinctive behavior to commit crimes. |
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| 4653. |
Examine the defective crystal given below and answer the question that follows:A+B-A+B-A+B-B-A+B-A+B-A+A+B-A+B-A+B-State if the above defect is stoichiometric or non-stoichiometric. How does this defect affect the density of the crystal? Also, write the term used for this type of defect. |
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Answer» 1. Stoichiometric defect 2. Density decreases 3. Schottky defect |
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| 4654. |
Give the reason for each of the following:1. For ferric hydroxide sol, the coagulating power of phosphate ion is more than chloride ion.2. Medicines are more effective in their colloidal form. 3. Gelatin is added to ice creams. |
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Answer» 1. This is because PO43- ion has more charge than Cl– ion. 2. Phosphate ion PO43-. 3. To stabilise ice creams |
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| 4655. |
For the complex ion [Fe(CN)6]3- state:(i) the type of hybridisation.(ii) the magnetic behaviour.(iii) the oxidation number of the central metal atom |
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Answer» (i) d2sp3 (ii) Paramagnetic due to one unpaired electron (iii) +3 |
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| 4656. |
(a) Mention two ways by which efficiency of labour can be improved.(b) What does the term ‘nationalisation of banks’ mean ?(c) Why is India considered to be in a virtual debt trap ?(d) Give any two reasons for giving the monopoly right of note issue to the Central Bank.(e) Mention any two duties of a consumer. |
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Answer» (a) (i) Training (ii) By using technology (b) Nationalisation is a process whereby a national government or state takes over the private sector. Government of India decided to nationalise 14 major commercial banks in 1969. (c) Virtual debt trap is a situation under which a borrower is led into a cycle of reborrowing, or rolling over, their loan payments because they are unable to afford the schedule payments on the principal of loan. (d) (i) This brings uniformity to the monetary system. (ii) The currency issued by the Central Bank is its monetary liability. It ensures public faith in the currency system. (e) (i) He/She should be aware of his rights. (ii) He/She should be aware of his duties. |
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| 4657. |
Name any two sources of external debt for India. |
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Answer» Sources of external debt are International Monetary Fund (IMF), International Finance Corporation (IFC), World Bank, Asian Development Bank, etc. |
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| 4658. |
Mention two ways by which efficiency of labour can be improved. |
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Answer» Methods to improve the efficiency of Indian labour are : (i) Productivity linked wages. (ii) Improved working conditions |
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| 4659. |
What does the term 'nationalisation of banks' mean? |
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Answer» Nationalization of banks is a process whereby a national government or State takes over the bank into public ownership by an Act or ordinance or some other kind of orders. |
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| 4660. |
Differentiate between creeping and running inflation. |
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Answer» Difference between Creeping inflation and Running inflation are :
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| 4661. |
State two ways in which the government can promote economic development. |
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Answer» Ways in which the government can promote economic development are : 1. Increase in Public Expenditure : If public expenditure increases, it will lead to an increase in money supply which will in turn increase the per capital income over a period of time. 2. Export Incentives : If exports are encouraged, the net factor income earned from abroad rises which will lead to an increase in Gross National Product (GNP). 3. Infrastructure Development : Public sector investment in the infrastructure sector like power, transport and communication, heavy industries, education, etc. paves the way for agricultural and industrial development of a country. |
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| 4662. |
Read the extract given below and answer the questions that follow: Aug 17,2015 Mumbai Bankers today said, the sharp fall in inflation to 3.38% for July has raised hopes of another rate cut by RBI at September review of the policy. “Obviously, if more find’more and more positive news on inflating front comes. It’s a reasonable expectation to expect that rules will be out at the September policy”, reported Mr. Aditya Puri the Mangaing Director of HDFC Bank. He said the Governor of RBI, Mr. Raghuram Rajan had earlier said that RBI is actively looking at rate cut.1. Name the policy implemented by RBI to control and regulate money supply. 2. Define creeping inflation. What is its impact on the economy? 3. Explain how the following measures are adopted by RBI to control inflation: 1. Change in Reserve Ratio 2. Credit Rationing. |
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Answer» 1. Monetary Policy. 2. Creeping inflation: It occurs when there is a sustained rise in prices over time at a mild rate, say around 2 to 3 percent per year. It is also known as mild inflation. Creeping inflation keeps the economy away from stagnation. But some economists regard it as dangerous for the economy. They say creeping inflation may look simple in the begining but with the passage of time it may acquire alarming proportions. 1. Cash Reserve Ratio: By regulating CRR, the RBI tries to control inflation. In the time of inflation, the Central Bank raises the CRR. An increase in the CRR leads to reduction in cash reserves with the commercial banks. Therefore, commercial banks will not be in position to create only a smaller amount of credit. 2. Credit Rationing: Credit rationing aims at fixing the maximum or ceiling of total amount of bank loans and/or fixing the maximum limit of loans for a specific purpose. The central bank may fix the maximum amount of loans for every commercial bank. For instance, during the period of inflation, RBI reduces the maximum amount of loan which the commercial banks can give to the traders so as to prevent hoarding of goods by traders. |
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| 4663. |
Explain four ways by which an entrepreneur can promote economic development. |
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Answer» Ways by which entrepreneur can promote the economic development of a country: 1. A capable entrepreneur can assess the risk in advance and plan accordingly. He is the one who brings all the factors of production to one platform which can promote economic development of a country. 2. The industrial health of a nation depends on the level of entrepreneurship existing in it, economic development of the economy depends on entrepreneurial talent existing in the nation. 3. Entrepreneurship begets and. also injects entrepreneurship by starting a chain reaction when the entrepreneur continuously tries to improve the quality of existing goods and services and add new ones e.g. when computers came into the market there was continuous improvement in the models. 4. By harnessing the entrepreneurial talent a society comes out of traditional lethargy to modem industrial culture. 5. What to produce, how much to produce and how efficiently it is to be produced depends on the class of entrepreneur who commands it that is why entrepreneur can promote the economic development of a country. |
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| 4664. |
Discuss four ways in which an entrepreneur contributes to Economic development. |
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Answer» Entrepreneurs play an important role in production. In every type of production, element of risk always exists. It is only the entrepreneur who bears risks involved in business. It is due to this fact that entrepreneurship is regarded as an indispensable factor of production. As the risk element in the business (due to operation of several unforeseen factors such as change in demand, technology, etc.) has gone up in modem production, the importance of entrepreneurship has increased considerably. In fact, greater the element of risk, greater is the importance of entrepreneurship in production. The truth is that the economic development of a country is determined by the number and quality of its entrepreneurs. (i) The size of national income which is considered the indicator of economic development of a nation is largely determined by the amount and quality of entrepreneurial resources. What is produced, how much is produced and how efficiently is produced, all depend upon the class of entrepreneurs. A country will be able to produce a large amount of output and generate a large national income if it possesses a large number of entrepreneurs with a modem outlook. (ii) Secondly, entrepreneurs mobilise idle savings of the public through the issues of shares and . debentures. Investment of these public savings in industry results in capital formation which is regarded crucial for economic development. (iii) Thirdly, entrepreneurs generate employment opportunities and thus help to reduce unemployment problem in the country. (iv) Fourthly, they also set up industries in the backward areas of the country to avail various concessions and subsidies provided by the government. In this way, they help to reduce regional disparities in the country. |
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| 4665. |
Mention one way by which the Government can reduce the disparity in income and wealth distribution of its citizens in a developing economy. |
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Answer» The Government can reduce the disparity in income and wealth distribution of its citizens in a developing economy by using progressive system of taxation under which the rich are made to pay the taxes at a higher rate in comparison to the poor who pay at a lower rate. |
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| 4666. |
Who controls the credit supply in an economy ? What is this policy called ? Explain how the following can control inflation in an economy.(i) Cash Reserve Ratio (ii) Statutory Liquidity Ratio |
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Answer» Reserve Bank of India controls the credit supply in an economy. This policy is called Monetary Policy. (i) Cash Reserve Ratio (CRR) : It refers to the minimum amount of funds that a commercial bank has to maintain with the Reserve Bank of India in the form of deposits. For example, suppose the total assets of a bank are worth ?200 crores and the minimum cash reserve ratio is 10%. Then the amount that the Commercial Bank has to maintain with RBI is ?20 crores. An increase in CRR reduces the lending ability of the Commercial Banks. If this ratio rises to 20%, then the reserve with RBI increases to ?40 crores.Thus, less money will be left with the commercial bank for lending. This will eventually lead to considerable decrease in the money supply. (ii) Statutory Liquidity Ratio (SLR) : SLR is concerned with maintaining the minimum reserve of assets with RBI, whereas the cash reserve ratio is concerned with maintaining cash balance (reserve) with RBI. So,SLR is defined as the minimum percentage of assets to be maintained in the form of either fixed or liquid assets with RBI. The flow of credit is reduced by increasing this liquidity ratio and vice-versa. A rise in SLR will restrict the banks to pump money in the economy, thereby contributing towards decrease in money supply. |
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| 4667. |
Explain two ways by which the government can reduce income inequalities in a developing economy. |
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Answer» (i) By following progressive taxation system. (ii) By increasing government expenditure in backward regions. |
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| 4668. |
(a) Mention two causes of low efficiency of labour in India.(b) Mention any two forms of consumer exploitation. (c) Define Public debt.(d) Indirect taxes are regressive in nature. How can they be made progressive? |
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Answer» (a) Two causes of low efficiency of labour in India: 1. Hot and Enervating Climate—India is a subtropical country and its climate is hot and enervating. It reduces the worker’s stamina for hard and continuous work for long hours. 2. Low wages—The wages of labour in India are low in general and so is the standard of living. As such, the workers are not in a position to keep themselves physically and mentally fit and in sound health, this become a cause of low efficiency. (b) Two forms of consumer exploitation: 1. Underweight and Under-measurements—The goods being sold in the market are sometimes not measured or weighted correctly. 2. Duplicate Articles—In the name of genuine parts or goods, fake or duplicate items are being sold to the customers. (c) Public Debt—“National debt is a debt which a state owes to its subjects or to the nationals of other countries.” —Findlay Shirras In simple words, Public Debt refers to the loan raised by the government within the country or outside the country. The government may borrow from individuals, business enterprises and banks, etc. when its expenditure exceeds its revenue. But it is not a source of revenue like tax. (d) Indirect taxes are regressive in nature as it is generally imposed on the consumption of goods. They are indiscriminately in that sense the poor people have to pay as much as rich people. It can be made progressive and equitable by imposing heavy taxes on luxury goods consumed by the rich consumers and low taxes on the essential commodities. |
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| 4669. |
Explain any four ways by which Public Sector Enterprises play a dominant role in an economy. |
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Answer» 1. Development of infrastructure : Development of infrastructure comprising transport, power, communication, basic industries, etc. is a precondition of growth. Expenditure on the development of infrastructure is known as Social Overhead Costs. Pace of industrial development cannot be accelerated without their establishment. Their development requires huge capital investment, which cannot be mobilised by the private sector. Moreover, these projects do not promise high profits. The private entrepreneurs would therefore be reluctant to undertake them. 2. Development of backward areas : The goal of achieving a reduction in economic inequality between regions becomes easy to reach, if industries are setup in the backward areas. But the profit seeking private industrialists often are not enthusiastic enough to set up industry in the backward regions. The government, therefore, finds it necessary to start industrial production in these areas on its own. 3. Basic facilities: There are a large number of activities which are the primary responsibilities of the government. The government must spend on these. Providing health and education facilities for all is one example. Running proper schools and providing quality education, particularly elementary education, is the duty of the government. India’s size of illiterate population is one of the largest in the world. 4. Other problems : There are many other problems like malnourishment, high infant mortality rate, unsafe drinking water, lack of housing facilities, etc. which need special attention. These problems can be solved only with the help of government. |
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| 4670. |
Name a market where selling cost is not required. Give a reason for your answer. |
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Answer» Under perfect competition, firms produce homogeneous products which are similar in size, colour, packing, quality, etc. So, firms need to spend money on product differentiation. |
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| 4671. |
Differentiate between current and savings deposits. |
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Answer» Demand deposit or current accounts are generally held by business firms or institutions to carry out their day to day transactions without any limit on there transactions whereas saving deposits are generally held by common public with a limit on number of free withdrawals. |
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| 4672. |
Discuss three instances when demand will increase. |
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Answer» Instances when demand will increase : (i) Increase in the price of the goods increased the quantity demanded of the goods. (ii) Increase in income will increased in demand of normal goods. (iii) Change in tastes of liking goods increases the demand of that goods. (iv) Expectations of buyers of increase in income or prices in the future will increase in demand. |
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| 4673. |
Identify and define the degree of price elasticity of supply from the diagram for the supply curves S1, S2, S3, S4. |
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Answer» (1) Perfectly Inelastic Supply : When there is no change in quantity supplied in response to any price change, the supply is said to be perfectly or completely inelastic. Here, ∈s = 0 (ii) Unit Elastic Supply: When proportionate change in supply equals the proportionate change in price, the supply is said to be unit elastic. Here, ∈s = 1 (iii) Elastic Supply: When change in quantity supplied is more than proportionate change in own price, the supply is said to be elastic. Here, ∈s > 1 (iv) Inelastic Supply : When the change in quantity supplied is less than proportionate change in own price, supply is said to be inelastic. Here, ∈s < 1 . |
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| 4674. |
Differentiate between current and savings deposits. |
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| 4675. |
Briefly explain any two impacts of shifting cultivation on the ecosystem. |
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Answer» (i) Forests are burnt leading to reduction in Forest area. (ii) Area is cleared off, by removing the trees and vegetation. |
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| 4676. |
What happens to the demand curve when there is an increase in demand? |
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Answer» When there is an increase in the demand then the demand curve shifts to right. This could be caused by a number of factors, including a rise in income, a rise in the price of a substitute or a fall in the price of a complement. For example, if drinking cola becomes more fashionable demand will increase at every price. |
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| 4677. |
Explain any three demerits of division of labour. |
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Answer» (a) Loss of creativity : Since the worker is only expert in the part of whole job, his creative instinct remains unsatisfied and gradually he loses his creativity. (b) Greater Risk of Unemployment : When the worker remove d from or leave the job on his own it become very difficult for him to find the same type of job again as he is unfamiliar with the other parts of the process. (c) Monotony of Work : Under division of labour, the job becomes monotonous and the worker gradually loses interest in it. |
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| 4678. |
Name any two industries where division of labour is possible. |
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Answer» The two industries are dairy and jute industry where division of labour is possible. |
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| 4679. |
Explain how the following factors affect the supply of a commodity : (i) State of technology.(ii) Price of factors of production.(iii) Goals of the firm.(iv) Future price expectations. |
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Answer» (i) State of Technology : State of technology increases the supply of commodity because technology improvement reduces the cost and raises the profit of the producers. (ii) Price of Factors of production : increase or decrease of supply of commodity dependents largely on increase or decrease of price of factors. if prices of factors increases the cost of product is increases leads to discourages the suppliers to increase the supply. And if prices of factors decrease, the finished product becomes cheaper and margin of profit increases results in increase of supply of commodity. (iii) Goals of the firm : it is often assumed that firms operate with a view to maximize their profits. But now days it is based on the principle that when the sales are increased, the ultimate profits also increase. Sometimes firms wish to capture extensive markets for their products so as to maximize their sales. Ultimately increases the supply of commodity. (iv) Future Price Expectations : Seller’s expectations about the future price affect the supply. If a seller expects the price to rise in the future, he will withhold his stock at present and so there will be less supply now. Besides change in price, change in the supply may be in the form of increase or decrease in supply. |
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| 4680. |
Discuss any three characteristics of capital. |
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Answer» Characteristics of Capital are : (i) Capital is man-made- It is created by man. Its supply is increased or decrease by the efforts of man. (ii) Capital is a passive factor- It is a passive factor of production because it becomes ineffective without cooperation of labour. (iii) Capital depreciates- If capital is used again and again it depreciates. (iv) Capital is prospective- Capital is considered much prospective, as the accumulation of capital yields an income. |
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| 4681. |
Briefly explain any two impacts of shifting cultivation on the ecosystem. |
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Answer» Impact of Shifting cultivation on ecosystem are : (i) Shifting cultivators are blamed for the deforestation, land degradation, atmospheric pollution and global climatic change. (ii) It has brought lots of changes in the ecological settings of the surroundings environment. The loss of forest cover influences the climate that contributes to loss of biodiversity. (iii) Shifting cultivators affect the economic activity and threaten the livelihoods and cultural integrity of forestdependent people. |
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| 4682. |
What is considered as capital in economics? |
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Answer» Capital is defined as “ All those man-made goods which are used in further production of wealth.” According to Bohm Bawerk, “Capital is the produced means of production.” Capital is one of the three factors of production. The others are land and labor. Goods with the following features are capital goods as opposed to consumer goods or durable goods :
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| 4683. |
Name a market where selling cost is not required. Give a reason for your answer |
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Answer» In Perfect competition market selling cost is not required because in this market situation there are large number of buyers and sellers selling of homogeneous good at a single uniform price. The price in this market is set by industry and the output sold by each firm is very small as compared to the total combined output of all firms. So, a seller cannot charge high price for a homogeneity product. Thus, uniform pricing is prevail for all firms. |
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| 4684. |
Define the following terms :(a) Price elasticity of Demand (b) Proportional taxation (c) Capital formation (d) Labour (e) Inflation. |
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Answer» (a) Price elasticity of Demand : According to Boulding, “Price elasticity of demand measures the responsiveness of the quantity of a good demanded to the change in its price.” (b) Proportional Taxation : Proportional tax is the taxing mechanism in which the taxing authority charges the same rate of tax from each taxpayer, irrespective of income. This means that lower class, or middle class, or upper class people pay the same amount of tax. (c) Capital Formation : It means making and increasing of more capital goods, such as machines, tools, factories, buildings, raw materials, fuels, etc., which are to be further used in producing more goods. According to Benham, “ The amount a country adds to its capital during a period, is known as the capital formation during that period.” (d) Labour : A Labour is always indicates some kind of ‘mental’ or ‘physical’ exertion undertaken with a motive to earn money. According to Marshall, “Any exertion of mind or body undergone partly or wholly with a view to some good other than the pleasure derived directly from the work is called Labour”. (e) Inflation : 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. |
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| 4685. |
Given below is the market supply schedule of a commodity. The individual supply schedules of firms B and C are given, prepare the individual schedule for Firm A:Price in Rs.No. of units supplied by Firm ANo. of units supplied by Firm B No. of units supplied by Firm CTotal Supply10251060203020100303530140404040180 |
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Answer» Individual Schedule for Firm A :
Calculate individual schedule for Firm A : (Total Supply of Unit )- (No. of Units Supplied by Firm B + No. of Units supplied by Firm C) At Rs. 10 — 60 – (25 + 10) = 25 At Rs. 20 — 100 – (30 + 20) = 50 At Rs. 30 — 140 – (35 + 30) = 75 At Rs. 40 — 180 – (40 + 40) = 100 |
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| 4686. |
(a) Briefly explain any two merits of direct taxes.(b) Expand the term RTI. How does this help a citizen of India ?(c) ‘Define price elasticity of demand.(d) What is food adulteration ? Mention any one harmful effect of food adulteration.(e) What is degressive tax ? |
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Answer» (a) (i) Equitable : A direct tax is an equitable tax as it is levied according to the tax paying capacity of the people. Under progessive taxation system, tax rate increase as the income increases. (ii) Economical : Direct taxes are economical in the sense that cost of collecting them is low. They are usually collected ‘at the source’. \ (b) RTI is Right Information Act which empower citizens to find out what is happening in government. The citizens have the right to seek any information from any public office. (c) Price elasticity of demand means the change in the quantity demanded of a commodity in response to change in its price. In other words, it measures the degree of change of demand in response to change in price. (d) Food adulteration is the act of intentionally debasing the quality of food offered for sale either by substitution of inferior substances or by the removal of some valuable ingredients. Example : Addition of melamine into milk, addition ot Vanaspati into Ghee. Honey is adulterated with sugar, brick powder in chilly powder. Harmful effects of food adulteration are : (i) Food adulteration reduces the quality of the food and this weakens the health of the one who consumes them, thereby increasing the cost of health care. (ii) It can also cause heart diseases, loss of eye-sight or tumour. (e) Under the system rate of tax increases upto a certain limit but after that a uniform rate is charged. |
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| 4687. |
State two measures taken by the Government to reduce income inequality in an economy. |
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Answer» The two measures taken by the government to reduce the income inequality in the economy are: 1. Progressive taxation reduces absolute income inequality when the higher rates on higher-income individuals are imposed. 2. Luxuries items or those items which are consumed by the rich section of the society are heavily taxed in comparison to necessity items. |
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| 4688. |
In which form of market do producers and consumers have perfect knowledge about the market conditions? |
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Answer» In perfect competition market every producer and every consumer is assumed to have perfect knowledge of price, utility, quality and production methods of products. They have full knowledge of the prevailing price of the product, as also the prices being asked by the sellers and being offered to the buyers. |
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| 4689. |
Discuss how prices of related goods affect the demand for a commodity. |
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Answer» Related goods are of two kinds: Substitute goods Complementary goods A change in the price of substitute directly affects the demand for a given commodity. When the price of substitute goods rises demand for the given commodity also rises. An increase or decrease in the prices of complementary goods inversely affects the demand for the given commodity. |
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| 4690. |
Discuss the mechanism of investment multiplier with the help of a numerical example. |
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Answer» Increase in investment in an economy generates a multiplier effect on its national income. The extent of multiplier effect (and therefore, the extent of the total increase in income) depends on the marginal propensity to consume (MPC). Higher the MPC, greater would be the multiplier effect and vice-versa. Working of Multiplier: An additional investment of Rs 100 crores (ΔI) is made to construct a flyover. This extra investment will generate an extra income of Rs 100 crores in the first round. But this is not the end of the story. If MPC is assumed to be 0.90, then recipients of this additional income will spend 90% of RS 100 crores, i.e., Rs 90 crores as consumption expenditure and the remaining amount will be saved. It will increase the income by Rs 90 crores in the second round. In the next round, 90% of the additional income of Rs 90 crores, i. e., Rs 81 crores will be spent on consumption and the remaining amount will be saved. This multiplier process will go on and the consumption expenditure in every round will be 0.90 times of the additional income received from the previous round. |
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| 4691. |
Study the cost function of a firm given below: Output (Units)0123TC (₹)3090110120Calculate : AFC, AC and MC. |
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| 4692. |
Explain how public expenditure can be used as an instrument of fiscal policy to solve the problem of :(i) Income inequality(ii) Inflation |
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Answer» (i) Public expenditures are income generating and include all types of government expenditure such as capital expenditure on public works, relief expenditures, subsidy payments of various types, transfer payments and other social security benefits. Government may spend money on performance of its large and ever-growing functions and also for deliberately bringing in Income equality. it initiate a fresh wave of public works, such as construction of roads, irrigation facilities, sanitary works, ports, electrification of new areas etc. Government expenditure involves employment of labour as well as purchase of multitude of goods and services and with the help of progressive tax system, it try to eliminate income inequality. (ii) Public expenditure is also used as a policy instrument to reduce the severity of inflation and to bring down the prices. This is done by reducing government expenditure when there is a fear of inflationary rise in prices. Reduced incomes on account of decreased public spending helps to eliminate excess aggregate demand and help to correct inflationary situation in economy. |
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| 4693. |
Discuss any two limitations of credit creation by commercial banks. |
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Answer» Lack of cash : The total amount of cash, available to the banking system limits the volume of credit that can be create. Credit is based on cash. The banks must keep a certain percentage of cash reserve. The total volume of credit cannot ordinarily be larger than the total amount of cash available multiplied by the customary reserve-ratio. The Central Bank control credit by measures, like open market operations and variations of the reserve ratio, which affect the quantity of cash in the hands of the banks and thereby influence their lending policy. The habits of the people The habit regarding the holding of cash can affect credit creation. If liquidity-preference increases, there will be less cash in the hands of the bank and they will be forced to lend less. In countries with an under developed banking system, the people tend to hoard cash. This reduce the power of banks to create credit. |
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| 4694. |
Discuss briefly the various components of balance of payment. |
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Answer» Components of Balance of Payment Account. (1) Current Account : Current Account is that Account which report Import and Export of Goods and Services and unilateral transactions. In other words transaction relating to Trade in Goods and Services and Transfer Payment constitute the Current Account . Components of Current Account : (i) Visible Items : It includes the exports and imports of all physical goods. Their difference is known as trade balance. It may be balanced, surplus or deficit. (ii) Invisible Items: It can be classified in : (a) Non-factor Services : It includes services rendered and received by the residents of country with respect to rest of the world, such as transportation services, financial services (insurance, banking services) provided to foreign tourists, students etc. Services provided to rest of world is included in credit side and services received on debit side. (b) Income on Investments : It includes interest on foreign loans, profit, receipts of payments, royalties, etc. Receipts of these income are included in credit side and payments are included in debit side. (iii) Transfer Payments : It refers to the unilateral transfers, such as foreign gifts, donations, etc., which domestic residents and Government receives or residents and Government makes to abroad. There is no repayment for such items. They can be classified into:- Official transfer payments (transfer payments by Government) and private transfer payments (transfer payments by individuals, institutions or organisations). Receipts of these transfers are included in credit side and payments of these transfer are included in debit side. (2) Capital Account : Capital Account is that Account which records all such transactions between residence of the country and rest of the world which cause a change in the assets or liability status of the residence of a country or it’s Government. Components of capital accounts - (i) Private Capital : It includes short term and long term capital, which includes (a) Short Term Capital : Purchase of short term securities, speculative purchase of foreign currency, etc. (b) Long Term Capital : Foreign Direct Investment, Portfolio investment, long term loans., etc (ii) Official Capital : It includes loans, re-purchase and re-sale of securities sold to the foreigners, sale or purchase of gold from abroad, etc. (iii) Banking Capital : Banking capital essentially covers movements in the external financial assets and liabilities of commercial and co-operative banks authorized to deal in foreign exchange. The purchase of an assets in another country is included in debit side and sale is included in credit side. |
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| 4695. |
Discuss the various components of the current account of the balance of payment. |
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Answer» (i) Merchandise: It refers to all such items of exports and imports which are visible and therefore also called Visible Trade’ relating to exports and imports. Current account showing export and import of visible is often referred to balance of trade account. (ii) Invisible: It refers to all such items which are rendered to rest of the world or received from the rest of the world in the form of services they include the following principal services like travel, transport alias insurance asking and services rendered to the rest of the world are treated like exports and the services received from the rest of the world are treated as imports. (iii) Transfers: It refers to unilateral transfers i.e., gifts or donations. These are broadly divided as (a) official transfers (b) private transfers. (iv) Investment income: It refers to income by way of rent, interest and profit. Income earned by our country is shown as receipts, while income earned from the rest of the world from our country is shown as payments. (v) Compensation of employees: It refers to the income earned or paid to the rest of the world by way of wages and salaries. |
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| 4696. |
Highlight two differences between sales tax and income tax. |
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| 4697. |
What is meant by(i) Union budget (ii) State budget |
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Answer» (i) It is the budget prepared by the central government for the country as a whole. This budget is presented in two parts. (1) Railway budget and (2) Main Budget. (ii) It is repaired by state govt, such as one budget of Punjab govt. UP govt. etc. |
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| 4698. |
Explain four ways of Redemption of Public Debt. |
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Answer» (1) Sinking Fund Approach: The Government at the regular interval saves a certain amount of money from its budget to meet up the debt obligations and uses this fund for the same when they have accumulated enough money. (2) Conversion Approach: 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, 111 high-interest public debt is converted into a low-interest public debt. Prof. Dalton felt that debt conversion actually relaxes the debt burden. (3) Utilization of Budgetary Surplus: When the Government earns surplus in the budget, it must be utilised for paying the debt. A surplus occurs when public revenue exceeds public expenditure. However, this method is rarely found. (4) Terminal Annuity: In this method. The government pays off the public debt on a fee basis of a terminal annuity into equal annual instalments including interest along with the principal amount. This is the easiest way of paying off the public debt. |
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| 4699. |
The United Nations apart from its main organs also work through its allied agencies. In this context, answer the following questions: (a) Write the expanded form of UNESCO. Mention two of its functions in the field of education. (b) Explain three vital roles that the WHO plays in combating diseases. (c) Mention four functions of the Security Council in maintaining peace. |
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Answer» (a) UNESCO: United Nations Educational Scientific and Cultural Organization. Functions of UNESCO in the field of Education: 1. Removal of illiteracy by encouraging adult education, distance education and open school system. 2. Emphasis on education of women and girls. 3. Financial Assistance for the disable children. 4. Grants and fellowship to teachers and scholars, organized library system and promote international understanding. 5. Organizes book fairs and festivals. (b) (i) It helps the countries to build up infrastructure in health. (ii) It promotes research for developing new technologies in health, nutrition, maternal and child care etc. (iii) It provides safe drinking water. (iv) It organizes immunizations to prevent six major communicable diseases like Polio, Diphtheria, Measles, Tetanus, Tuberculosis and Whooping Cough. (v) It prevents death among infants from diarrhoea. (vi) It trains medical personnel to tackle emergency situations in relation to health. (vii) It sets standards for many life saving drugs. (viii)It provides information and consultation on health matters and health awareness. (c) Functions of the Security Council: 1. To investigate the dispute or situation which might lead to international friction. 2. To recommend ways of adjusting, or settling such disputes according to the terms of the settlement. 3. To make plans for the establishment of a system to regulate armaments. To determine the existence of a threat to peace, or an act of aggression and to suggest what remedial action should be taken. 4. To make military action against an aggressor. |
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| 4700. |
Briefly explain oral stage of psycho sexual development. |
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Answer» Oral stage is the initial psychosexual stage during which the developing infant’s main concerns are with oral gratification. The oral phase in the normal infant has a direct bearing on the infants activities during the first 18 months of life. Freud said that through mouth the infant makes contact with the first object of libido, the mother’s breast. Oral needs are also satisfied by thumb-sucking, other objects like dolls, toys or blankets into the mouth. Freud believed that by the end of first year oral phase begins to shift towards anal region. |
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