I08/1
2005

ECONOMICS
Paper 1
Tlnle Hours Jf Maxinwm lvIarhs 300
INSTRUCTIONS
Each questIOn is prtnted both in English and ur Kannada.
Answers lHUS! be lL,Titten in the medium specitied (English or Kunllwla) in the Admission Tic/wt issued to you, which must be stated clearly on the cuuer of the answer book in the space prouuled (or purpose. No credit will be given for the ans[vers written in a medium other than that specified in the Admission Tichet. In case of an:y doubt in the Kannada text, please refer to EnglLsh text.
TIlLS paper has jrJllr parls
A 20 marks
B 100 marks
C 90 marks
D 90 marks

allotted to each question are indicated in each part.
All question" in Part Part B and Part C are compulsory, Answer any three question:;; Ln Part D.
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08/1
PART A Define the following concepts in less than 50 words each. carnes 5 marhs. 4x5=20 Each question
l. (cJ Consumer surplus Oligopoly Marginal utility of money Price elasticity of demand

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08/1 I
PART B 10x10=100 Distinguish the following pairs of cuncepts in less than 100 words mch. Each question carries 10 marks.
1.
Marginal rate of substitution and Ilarginal rate of transformation

2.
Nominal rate of exchange and Effective rate of exchange

3.
Current account and Capital account of balance-of-payments

4.
Free trade and Restricted trade

5.
Monopoly and monopsony

6.
Ricardian and Marshallian Tent

7.
Invention and Innovation in the theory of profits

8.
Nominal wage and Real wage

9.
Cardinal utility and Ordinal utility

10.
Complements and Substitutes


08/1



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08/1 (6 I
PART C
AnSlver the following questions in less than 150 words each. Each question carnes 15 marhs.
1.
Analyse the main objectives and instruments of monetary policy in a developing country.

2.
What are the important features of perfect competition? Explain the price and output determination of a firm in short and long run under perfect competition.

3.
Explain the basic concepts and methods of estimation of national income In an open economy.

4.
Explain the equilibrium of a consumer by using indifference curve analysis. Using diagrams, show the income effect for this consumer when

both the goods consumed are normal goods, and one of the goods consumed is an inferior good.

5.
Given that output is at equilibrium level, analyse the macroeconomic relationship between agb'Tegate demand, consumption, savings and investment in a closed economy without the government sector.

6.
Explain the functions of money and types of money supply. Analyse the relationship between transactions and in terms of the quantity theory of money.



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0811 (8
PART D 3x30=91J
Answer any three the following questions, m less than 300 words each. Each question carries 30 marks.
1.
What does 'Fiscal Policy' mean? Distinguish different types of government budget deficits. Explain the fiscal instruments for reduction in these deficits without compromising on macro-economic objectives.

2.
Vhat does 'Economic Growth' or 'Development' mean Explain the determinants of economic growth in the Harrod-Damar modeL Comment on the usefulness of this model for economic planning in developing countries.

3.
In what ways have the establishment and working of the International Monetary Fund and the World Bank been to the developing countries Do you think that the continuation of these institutions has any justification under globalisation of capital

4.
What do you mean by 'Adverse Balanc:e of Payments' Explain the measures to achieve favourable balance of payments in a developing country.

5.
Consider the following hypothetical data on production, price and cost of a firm:


-Total (units) l-Price per unit­Total cost Rs. Rs.
I 60

1 60

,f 60

60 T 244
4 60
5 60
J
6 60


j 60
268

8 60 I 296

9 60 344
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08/1 10)
Using the above data, answer the following
Find out (al Ivlarginal cost, (bJ Average cost, Average variable

Average revenue, Total revenue, and Marginal revenue, tor each level of production.
Find the total profit, when marginal cost is equal to marginal revenue.
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135



2005

ECONOMICS

Paper 2

Hours j Maxu!lum Marhs 300
INSTRUCTIONS

Each question is pnnted both in English and in Kannada.
Answers nwst be written in the medium specified (Enghsh or [(annada) in the Admission Tichel issued to you, which must be stated clearly on the COlier of the ansu.'cr book III fhp space prut}ided fbr tJns purpose. No credit roil! be gUH'll (or the answers writtell in a medium other than that specified in the Admissum Trrhct. In case of any doubt in the Kannada text, please refer to English text.
Tlus paper has four parts:
A 20 marks
n 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. AnSI-vel' any three questions in Part D.
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08/2 121
PART A 4x5=:JL

Deline the followinR concepts in less than 50 words each. Each question carries 5 maThs.
1. Poverty hnp in India

Consumer price index for industrial workers in Karnataka State


Intellectual property rights
Cd) Service taxation in India



3 08/2



1.
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08;2 141
PART B lOx]O=lOO

Answer the following questions in less than JOO each. Each questIOn carries 15 marks,
1.
Distinguish the essential characteristics of Indian economy as a federal, mixed and open economy.

2.
Explain the construction of iVholesale Price Index in India. In what ways is this Index used as a measure of price inflation in the country?

3.
Explain the current composition and definition of the modern small-scale enterprises in India.

4.
What are the objectives of India's Tenth Five Year Plan? Do you think that these objectives are similar to the objectives of India's Ninth Five Year Plan? Substantiate your answer.

5.
Distinguish the current functions of India's Planning Commission and Karnataka's State Planning Board.

6.
Explain the major objectives and stratcbries of Karnataka's New Industrial Policy 2001 -2006.

7.
Distinguish the fiscal deficit, primary deficit and revenue deficit of the Government of India.

8.
Explain the major objectives for promoting foreign direct investment in India. Di.stinguish the major components of India's foreign investment inflows since 1991.

9.
Analyse the objectives and instruments of the price stabilization policy of agricultural commodities in India.

10.
Explain the current objectives and instruments of fiscal transfers from the Union Government to State governments in India.


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PART C 6x15=90

Answer the j'ollou)ing que8tions in less than 150 roords each. Each question carries 15 marks.
1. Consider the following economic data on India's Gross Domestic Product at factor cost and constant (1993 prices
1 .... I
1. Primary sectar-·-T 2:39253 i-275153 343806 I (Rs. in croTe)

1

Secondary sector 229098 279066 :351046


Rs. in croTe)
Tertiary sector 395312 554776 i 735696
(Rs. in crore)

14. Total GDP (Rs. in crare) I 701863 899563 T1148:367

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;5. Total population 1
I 856 928

I (in million persons)
L .. -i
Using the above data, answer the following

What is the measure of national income used In the table?


Analyse the growth of total national income and per capita national mcome.


Analyse the changes in the sectoral share in national income.


Analyse the growth of components of national income.
2.
Critically examine the measures for promotion and development of small-scale industries by the Government of India since 1991.

3.
What are the objectives of fiscal reforms in Karnataka Do you think that the strategies of fiscal reforms are consistent with the objectives of economic in the State? Substantiate your answer.

4.
Describe the major reforms in India's commercial banking sector. Do you think that the effects of these reforms have been positive on lending to the priority sectors by commercial banks? Substantiate your answer.


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5. Consider the fol1awing economic data on current account transactions ill India's balance of payments at current prices:

Trade in goods and services 1990 -91 :1997 -98 12001 2003
i .j.

1. Trade in goods (Rs. in crare)
Imports

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Exports


Trade in services (Rs. in crore) Receipts Payments
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50086 33153 190508 132703 1 264589 207852 368102 296767
13396 13829 86245 49323 147778 102639 243103 123816


Using the above data, analyse the performance of India's foreign trade in terms of

grmvth of exports and imports,


nature and gTowth of balance of trade, and


nature and growth of current account balance.


6. ¥lhat does Value Added Taxation mean? Compare the working and implications of a VAT and a sales tax with a numerical example.



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0812 (10 I
PART D

Answer any three of the following questions, in less than 300 words each. Each question carries 30 marks.
1. Consider the following economic data Karnataka's Gross State Domestic Product (GSDP) at factor cost and constant (1993-94) pric:es
Sectors -96 1990 -00 -041


1. Primary sector (Rs. in crore) 15208
18868 16114


2. Secondary sector (Rs. in craTe) 12107
17080 22910

3.
Tertiary sector eRs. in crure) 18852 27903 41525

4.
Total GSDP IRs. in crore) :5. Total population (in million persons)




Using the above data, answer the following:

Analyse the growth of total State income and per capita State Income.


Analyse the changes in the sectoral share in the State income.


Analyse the growth of the sectoral components of the State income.


Compare the performance of Karnataka's f,'Yowth and composition of State with the national level, using the data in question 1 of Part C.


2.
Analyse the policy measures and prob'Yammes for alleviation of poverty in rural and urban India and Karnataka state since 1991.

3.
Analyse the major policy objectives and instruments for the development of the agricultural sector in India's Tenth Five Year. Highlight the special policies and programmes for increasing the productivity of the agricultural sector during this pl!1n period with special reference to Karnataka State.

4.
"'lhat does 'Food Security' mean Explain the working of the Public Distribution System for food f,'Yains in India. Do you think that the Public Distribution System for food b'Tains is an effective instrument of food security in India?


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5. Consider the following economic data on India's Gross Domestic Savings and Capital Formation at market prices:
Savings and Capital Formation -00 200:3· 04 Ii. Gross DomestIc


--Household sector-----1;:0736-216140 -404401-671692' 20304[ 585-42 84329 j i __Public.scctor --9429
Cap}tal_FormationT
I Public sector -57633 9097.'7...+J34484 154086 -224202 I 323778 Is.:. Tot".! GiJP
Using the above data, answer the follmving
Analyse the bTfOwth of gross domestic savmgs by its sources.
(bl Analyse private the growth of gross sectors capital formation by the public and
Analyse ratio. the levels and growth of Savings ratio and Investment
Analyse the relationship between the bJTOwth of national mcoOle,

savings and capital formation.

4.

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