Arts (English Medium) Class 12 - CBSE Question Bank Solutions for Economics

‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.

Give the relationship between the revenue deficit and the fiscal deficit.

Suppose that for a particular economy, investment is equal to 200, government purchases are 150, net taxes (that is lump-sum taxes minus transfers) is 100 and consumption is given by C = 100 + 0.75Y (a) What is the level of equilibrium income? (b) Calculate the value of the government expenditure multiplier and the tax multiplier. (c) If government expenditure increases by 200, find the change in equilibrium income.

Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?

Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.

We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y (a) Find the equilibrium income. (b) What are tax revenues at equilibrium Income? Does the government have a balanced budget?

Are the concepts of demand for domestic goods and domestic demand for goods the same?

Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.

Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.

Explain the relation between government deficit and government debt.

Does public debt impose a burden? Explain.

Are fiscal deficits inflationary?

Discuss the issue of deficit reduction.

What do you understand by G.S.T?

If inflation is higher in country A than in Country B, and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries?

Discuss some of the exchange rate arrangements that countries have entered into to bring about stability in their external accounts.

Highlight the salient features of India’s pre independence occupational structure.

Agriculture sector appears to be adversely affected by the reform process. Why?

There is a downward trend in inequality world-wide with a rise in the average education levels. Comment.

Examine the role of education in the economic development of a nation.