Economics (030) Class Xii (2014-15) Worksheet Page 6
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21b)
Floating exchange
c)
Managed floating
21. In an economy the autonomous investment is 100 and the consumption is C=80+0.4Y.
Is the economy in equilibrium at an income level 400? Justify your answer.
(3)
OR
In an economy the autonomous investment is 60 and the marginal propensity to
consume is 0.8. If the equilibrium level of income is 400, then the autonomous
consumption is 30. True or False? Justify your answer.
22. In an economy planned saving is greater than planned investment. Explain how the
economy achieves equilibrium level of national income.
(3)
23. Only one Product X is produced in the country. Its output during the year 2012 and
2013 was 100 units and 110 units respectively. The market price of the product
during the year was Rs 50 and Rs 55 per unit respectively. Calculate the percentage
change in real GDP and nominal GDP in year 2013 using 2012 as the base year. (4)
24. What is meant by “balance of payment” account? Distinguish between the "balance
on current account" and "balance of trade" account. In which account would
remittances from family members from abroad be accounted?
(4)
25. State the various components of the Income Method that are used to calculate
national income.
(4)
OR
State any four precautions that need to be kept in mind when using the value added
method for calculating national income.
26. In the government of India's budget for the year 2013-14, the Finance Minister
(6)
proposed to raise the excise duty on cigarettes. He also proposed to increase income
tax on individual earning more than Rs. one crore per annum.
Identify and explain the types of taxes proposed by the Finance Minister. Was the
objective only to earn revenue for the government? What possible welfare objectives
could the Government be considering?
27. Draw a straight line consumption curve. From it derive the saving curve. Explain the
process of derivation on the diagram, show:
(6)
a)
The income level at which APC=1
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