COUNCIL OF HIGHER SECONDARY EDUCATION, MANIPUR

MODEL ANSWER, 1999

SUBJECT: ECONOMICS

Model Answer/Scoring Key

 

Marking Scheme/Scoring Key/Instruction to Examiners

General Instructions

1.  The examiners are requested to cross Blank pages of an answer script and to sign the last page of it.
2.

 Mark ( S ) awarded to each question should be indicated at the left hand blank space. They are to be posted clearly on the cover page provided for the purpose. Please put cross marks against any un attempted question number. If there are cancellations due to wrong entry, the examiners are requested to append their signatures.
3.  The examiners are requested to indicate mistakes by underlining them or by putting cross marks thereon for every answer.
4.  If there are separate parts in a question, mark for each part is to be awarded and then they should be added up.
5. The examiners are requested to prepare the mark slips in all three counterfoils in serial number of codes as per top-sheet ( S ) of the packet ( S ).
6.  The examiners are requested to discuss and consult any matter with the Head Examiner/Asst. Head Examiners whenever necessity arises.
7.  In order to maintain uniformity in marking pattern by examiners a SCORING KEY is provided to every examiner.
8.  No half mark should be given from question number 1 to 2

Sd/-
 Head Examiner
ECONOMIC

Council of Higher Secondary Education, Manipur
Higher Secondary Exam. 1999
ECONOMICS

Full Marks - 100
Pass Marks – 33

1. D 1 1
2. B 1 1
3. D 1 1
4. C 1 1
5. B 1 1
6. A 1 1
7. C 1 1
8. C 1 1
9. A 1 1
10. B 1 1
11.  When the value of NFIA ( net factor income from abroad) is positive and be added to GDP. The value of GNP will be More then the value of GDP.
OR
 When the value of NFIA is negative and be subtracted from GDP, the value of GNP will be more then the value of GDP.		 1 1
12.  Low level of income in an economy. 1 1
13.  Paper notes have legal sanction. 1 1
14.  The burden of sales tax can be shifted. 1 1
1 5. The necessity arises to satisfy the multiplicityof wants. 1 1
16.  Break-even point of a firm is that situation where there is no profits ( normal profits onlyor TC=TR). 1 1
17.  Labour 1 1
18.  To bear the risk of business. 1 1
19. According to the L.P. theory, the rate of interest is determined by the demand for and supply of money. 1 1
20.  Piece wage 1 1
21.  In the keynesian approach,
AD = AS
AD is: Y= C+ 1……………… (1)
AS is Y = C+S ………………. (2)
Putting together ( 1) & (2), C+ 1= C + S Hence 1 = S.
OR
In the classical approach, as
1= f (r) in which di/dr <0………….(1)
S = f(r ) in which ds/dr >0 …………(2)
\ 1 = S		 4 4
22.
  1.   A central bank is generally owned by the governments, while a commercial bank may operate both in private and public sectors.
  2.  A central bank does not operate for profit motive, whereas a commercial bank, generally, operates for profit motive.
  3.  A central bank has the monopoly power of note issue, but a commercial bank can not issue notes.
  4. There is only one central bank in a country, but there can exist many commercial banks.
4 4
23.  A tax is a compulsory contribution from the taxpayer to the government to meet public expenditure/any other suitable definition.
 Unlike other sources, (i) a tax is a compulsory contribution on the state, state, (ii) revenue collected from taxes need not be spent on the same person etc.		 1+3=4 4
24.

 Public expenditure on social and economic activities promotes the ability to work and save. This increase in ability to work and save stimulates investment, and production,
Public expenditure on improvement of education, medical facilities, labour welfare, old age pension, employment insurance, etc will reduce disparities of income and wealth.

2+2 4
25.

 Fixed capital is one which is durable and can be used for a considerable long time whereas circulating capital refers to the capital which can be used only once in production.
Fixed capital=machines | building | dams | irrigation cannals | etc.
Circulating capital = raw materials | seeds | coal | etc.

 2+2 4
26.  Calculation of NDPFC  as follows :- GNPFC = GNPMP - net indirect taxes(Rs. 40,000 Crores – Rs.. 4000 crores ) = Rs. 36,000 crores.
NNPFC - Co=GNPFC -Consumption of fixed capital(Rs. 36,000 crores - Rs. 2000 crores )=Rs. 34,000 crores.
NDPFC = NNPFC - NFIA ( Rs. 34,000 Crores – Rs.300 crores ) = Rs. 33,700 crores.
OR
NDPFC  = GNPMP - (depreciation | Consumption of fixed capital - net indirect taxes + NFIA)
 = Rs. 40,000 crores - ( Rs 2000 crores + Rs. 4000 crores + Rs. 300 crores )
 = Rs. 33,700 crores. 		4 4
27. (i) The producer's sector,
(ii) The consumer's sector and
(iii) The government sector. 		3 3
28.

Any three of the following :-wage rates are different because of :- different productivities of skilled and unskilled workers | some jobs are more pleasant and less dangerous than others | differences not only between different groups and different jobs within a group but also between the same job at different places | the possibility of earning extra income | more responsibilities than others | etc.

 1X3 3
29. Fig. 1 3 3
30. The relationship between changes in income and the resultant change in consumption is defined as propensity to consume. Marginal propensity to consume is the rate at which consumption changes as income changes(MPC= -∆C/∆Y). on the other hand, average propensity to consume is the ratio between income and consumption ( APC=C/Y) 1+2 3
31. EP=(∆q/q)/(∆p/p)=∆q/q*p../∆p=∆q/∆p*p/q
=(12-10)/10χ(5-4)/5=2/10*5/1
=E=1		 3 3
32.  Black market | problem of allocation of limited supply among consumers.

Fig. 2

 1+2=3 3
33.

Any three of the following :-The supply of land is fixed | land cannot be moved | land is a free gift of nature | land is a passive factor and cannot produce anything | land is heterogeneous | land is a victim of the law of diminishing returns with greatest force.

3 3
34

 According to Ricardo, rent is determined by price via cost of production. However, price is not determined by rent. He stated," corn is high not because rent is paid, but rent is paid because corn is high". It implies that rent has no influence on the price of corn.

 3 3
35.  Investment which can increase to the existing stocks of capital is the real investment.
Two determinants are--
Marina| efficiency of capital and the rate of interest.
Explanations of these two determinants relating to real investments..................... 		2+ 6 8
36.

 Explanations of any four :-Medium of exchange | measure of value standard of deferred Payments | store of value | transfer of value | equalisation of marginal utilities | distribution of national income | basis of credit | tiquidity or uniformity of wealth and bearer of option.

  2+2+2+2 8
37.

 Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. Robbins’ criticisms against Marshall's welfare definition. His points of argument in favour of scarcity definition as a science (positive) -- study of human behaviour --endless wants -- scarce means and their alternative uses, Choice making or decision making is the means of tackling economic problems.

 2+6 8
38.

Price in a perfectly competitive market is determined by industry and passed on to the firms. The indevidual firm has to accept the equilibrium price and adjusts Its output to that ruling price in the circumstances. there may be abnormal profits and losses in the short run and still other firms may break - even (normal profits) in the long run. In the long run. the Price
is equal to AR=MR=MC=AC.

 8 8