I08/1 I
2010
ECONOMICS
Paper 1
Time.' 3 HOUTS} [Maximum Marks: 300

INSTRUCTIONS
Each question is printed both in English and in Kannada.
Answers must be written in the medium specified (English or Kannada) in the Admission Ticket issued to you, which must be stated clearly on the cover of the answer book in the space provided for this purpose. In case ofany doubt in the Kannada text, please refer to English text.
This paper has four parts:
A 20 marks
B 100 marks
C 90 marks
D 90 marks

Marks allotted to each question are indicated in each part.
All questions in Part Part B and Part C are compulsory. Answer any three questions in Part D.

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08/1 PART A 4x5=20 Answer each question in about 50 words. Each question carries 5 marks.
1. Explain the following in technical terms
Returns to scale
Simple monopoly
Oligopoly
Growth Accounting


I3} 08/1


50 idcfrTM IJ1X1M. 5 eJoff'rrro.

eo1!lrlli Cliowoc;t (Returns to Scale)

[Turn over
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08/1 PARTB lOxlO=lOO Answer each question in about 100 words. Each question carries 10 marks. Define and explain the relationship between each of the following pairs of concepts
2.
Unbalanced trade and Current account deficit

3.
Trade creation and Trade diversion effects

4.
Pure public good and Pure private good

5.
Lorenz curve and Gini coefficient

6.
Marginal rate of substitution and Marginal rate of technical substitution

7.
Consumer surplus and Producer surplus

8.
Naminal rate of exchange and Effective rate of exchange

9.
Price elasticity of demand and Income elasticity of demand

10.
First Theorem and Second Theorem of Welfare Economics

11.
Marginal product and Average product of labour


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4. (pure public good)

(pure private good).

[Turn over
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08/1 (6
PARTe 6x15=90
Answer each question in about 150 words. Each question carries
15 marks.

12. Explain the important properties of IS and LM curves. In what way are
these curves useful to derive macroeconomic equilibrium of an economy?
13. Do you agree that factor endowments can be a basls for international
trade? If yes, theoretically justify your answer.
14. How do you identify a market as perfectly competitive? Distinguish the conditions for price and output determination of a perfectly competitive firm in short run and long run.
15.
Diagrammatically show the relationship between price and consumption of two commodities by using indifference curves. How do you derive an ordinary demand curve for a commodity from this relationship?

16.
Analyse the relationship between money, prices and output in terms of the quantity theory of money.

17.
Consider the following hypothetical values on macroeconomic parameters in Harrod-Domar model of economic growth.


National Income Aggregate savings Capital output ratio Population growth rate
100 8 8 2
250 20 5 1
400 30 4 0·5

Using the above data, answer the following
Find out the investment rate given that aggregate savings are
equal to aggregate investment.
Obtain the equilibrium growth rate of national income.
When is the equilibrium growth rate of per capita national income
the highest and why


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08/1 (8I

PAJtT D 3x30=90
Answer any three Df the following questions, each zn about 300 words. Each question carries 30 marks.
18.
Distinguish the objectives of International Monetary Fund and the World Bank. What major programmes of these institutions have been helpful to the developing countries?

19.
Distinguish the measures of national income in a closed and an open economy.

20.
Explain the sources of economic growth in Solow's neo-classical model of economic growth. Are these sources relevant for economic growth of a planned economy?

21.
Analyse the major macroeconomic objectives and instruments of monetary policy in a planned developing country.

22.
Explain the measures to overcome the adverse balance of payments in a developing country.



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Note: The English version of the instructions is printed on the front cover of this question paper.
I08/2 I
2010
ECONOMICS
Paper 2
Time: 3 Hours J Maximum Marks: 300

INSTRUCTIONS
Each question is printed both in English and in Kannada.
Answers must be written in the medium specified (English or KannadaJ in the Admission Ticket issued to you, which must be stated clearly on the cover of the answer book in the space
provided for this purpose. In case of any doubt in the Kannada text, please refer to English text.
This paper has four parts
A 20 marks
B 100 marks
C 90 marks
D 90 marks

Marks allotted to each question are indicated in each part.
All questions in Part Part B and Part C are compulsory. Answer any three questions in Part D.

o;lJi;
08/2 I2)
PART A 4x5=20
Answer each question in about 50 words. Each question carries 5 marks.
1. Explain the following with reference to the Indian economy

National Pension Scheme


Goods and Services Tax


Direct Tax Code


The Group of Twenty


08/2

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08/2 (41
PARTB lOxlO=100'
Answer each question in about 100 words. Each question carries 10 marks.
2.
Analyse the policy importance of the economic size and composition of India's informal sector and workers. Mention the major social protection programmes for informal workers in India.

3.
Explain the current composition and definition of the modern small-scale and medium-scale enterprises in India. Are there any special definitions of small and medium scale enterprises in Karnataka State?

4.
Explain the significance of Inclusive growth strategy in India's Eleventh Five Year Plan.

5.
Comment on the nsefulness of the Index of Industrial Production as a measure of industrial growth in India and Karnataka.


6. Highlight the usefulness of Unique Identification System for
effective implementation of economic policies in India.
7.
What are the objectives of Universal Service Obligation Fund in telecom sector Mention the key activities under this fund for rural development.

8.
Analyse the objectives and instruments of the national food management policy in India.


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9. Consider the following basic data from India's National Accounts
Statistics

Macroeconomic variable Value (Rs. in crore)
1. Gross Fixed Capital Formation (GFCF) 1346501
2. Changes in stocks 96203
3. Consumption of Fixed Capital 434468
4. Valuables 49709
5. Net domestic savings 612658
6. Net public sector savings -37285
7. Net corporate savings 78508

Using the above data, define and compute the following variables:
Gross Capital Formation

Net Fixed Capital Formation


Net Capital Formation


Net Household Sector Savings


Gross Domestic Savings
10. Analyse the implications of the following growth rate of per capita income and per capita consumption (at 2004 -05 prices) in India
Year Growth rate of per capita income Growth rate of per capita .consumption
2005 -06 7·6 7·3
2007 -08 8·1 8·3
2009 -10 5·3 2·7

11. Explain the objective and performance of Special Economic Zones In
India.
(71 08/2
9. il<


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l. M.lt. (GFCF) 1346501
2. coom;Jorlo;lO Wo'UoloSr$ M 96203
3. 434468
4. 49709
5. ;0"1.0;1 ero'll3il@rlltJ 612658
6. ;0"1.0;1 ero'll3il@rlo;IJ -37285
7. ;0"1.0;1 ero'll3il@rlltJ 78508

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w'iiiI, :3Uol ecso@o' !.lo;lw'clrt :3Uol !.lo;loSclrt
2005 -06 7·6 7·3
2007 -08 8·1 8·3
2009 -10 5·3 2·7


[Turn over
08/2 . I8) PARTC 6x15=90
Answer each question in about 150 words. Each question carries 15 marks.
12. ,What aTe the major national programmes for urban development in India Explain your answer by objectives and coverage of these programmes with special reference to Karnataka.
13. Consider the following select cross-country data from the World Bank's
recent report on Doing Business.
Country Ease of doing business (rank among countries) Number of days to start a business Days to enforce a contract Days to close a business Days to export
Thailand 12 32 479 2·7 14
China 89 37 406 1·7 21
India 133 30 1420 7 17
Pakistan 85 20 976 2·8 22
Singapore 1 3 150 0·8 5

Using the above data, explain India's, competitiveness in attracting
international business and investment, and ways to improve the
competitiveness.
14. Critically examine the measures for promotion of investment and
employment generation in the Karnataka Industrial Policy 2009 -2014.
15. How does Wholesale Price Index measure food and non-food price inflation in India Is there any attempt to construct this Index for Karnalaka State? ..
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16. Analyse the implications of progressive reduction of peak customs duty in
terms of the following data
Year Peak duties Customs duty collection (Rs. in crore) Imports eRs. in crore) Customs duty as a percent of imports
1999 -00 40 47091 215237 21·88
2004-05 20 55470 501065 11·08
2008 -09 10 101710 1374436 7·4

17. Explain the relationship between the revenue deficit, fiscal deficit and
primary deficit of the Government of India by using the following data
Variables Value (Rs. in crore) at current prices
1. Revenue expenditure 897232
2. Total expenditure 1020838
3. Tax revenues 474218
4. Non·tax revenues 140279
5. Major subsidies 106004
6. Defense expenditlue 86879
7. Total capital receipts (::;borrowings and other liabilities loans) 400996
8. Recovery of loans 4225
9. Other capital receipts (mainly PSU disinvestment) 1120
10. Total interest payments 225511

11 08/2
16. (peak customs duty)


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1999 -00 40 47091 215237 21·88
2004 -05 20 55470 501065 1l·08
2008 -09 10 101710 1374436 7·4

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1. 897232
2. 1020838
3. eJ rt d 474218
4. 140279
5. 106004
6. 86879
7. 400996
8. me.> m 4225
9. PSU 1120
10. !.l 225511

[Turn over
08/2 (12

PARTD 3x30=90
Answer any three of the following questions, each m about 300 words. Each question carries 30 marks.
18.
Explain the current methodology for estimation of official poverty by the Planning Commission in India. What are the current methodological debates for estimation of poverty and BPL households

19.
Analyse the mBJor policy objectives and instruments of price policy for agricultural produce in India with special reference to Kamataka State.

20.
By What strategies the current Medium Term Fiscal Plan in Karnataka aims to the objectives of economic growth and equity? Substantiate your answer.


'21. What aTe the economic indicators of the recent global financial crisis In what ways has the crisis resulted in a slowdown of the Indian economy?

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08/2 (14
22. Consider the following indicators of human development for select districts in 2001. Using the value of these indicators, classify the districts according to their levels of human development. What policy. suggestions do you' offer to the Government of Karnataka based on your classifications
Districts Value of Education Index Value of Health Index Value of Income Index Value of Human Development Index
Bangalore Urban 0·705 0·887 0·666 0·753
Raichur 0·648 0·524 0·469 0·547
Chamarajanagar 0·642 0·570 0·518 0·576
Dakshina Kannada 0·707 0·825 0·636 0·722
Uttara Kannada 0·632 0·781 0·546 0·653
Belgaum 0·712 0·699 0·532 0·648
Shimoga 0·707 0·766 0·547 0·673
Bangalore Rural 0·692 0·662 0·605 0·653
Gulbarga 0·632 0·572 0·490 0·564
Koppal 0·642 0·576 0·529 0·582
Bellary 0·685 0·618 0·549 0·617
Bagalkot 0·597 0·636 0·539 0·591
Dharwar 0·615 0·758 0·553 0·642
Haveri 0·620 0·699 0·491 0·603
. Bijapur 0·627 0·642 .0·499 0·589
Gadag 0·628 0·750 0·525 0·634
Udupi 0·713 0·842 0·588 0·714
Kodagu 0·638 0·833 0·621 0·697
Bidar 0·638 0·689 0·470 0·599

I 15 I 08/2
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0-642 0-570 0-518 0-576
0-707 0-825 0-636 0-722
0-632 0-781 0-546 0-653
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0-707 0-766 0-547 0-673
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0-632 0-572 0-490 0-564
0-642 0-576 0-529 0-582
0-685 0-618 0-549 0-617
0-597 0-636 0-539 0-591
0-615 0-758 0-553 0-642
0-620 0-699 0-491 0-603
0-627 0-642 0-499 0-589
0-628 0-750 0-525 0-634
eJ) 0-713 0-842 0-588 0-714
0-638 0-833 0-621 0-697
z:ler:tcr< 0-638 0-689 0-470 0-599


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of this question paper.