CS (MAIN) EXAM:2018

EGT-P-ECON
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ECONOMICS (PAPER-I)
IＧｔ ｩ ｭｾ＠ 1.-.,Uowed : Three Hou rs I
Maxim1..1m Marks : 2 50 j
QUESTION P APER SPBCIFIC INSTRU CTI ONS
(Please read eac.;h of lhe followin g instructions carefully be.fore attempting questioos)
There arc E IOHT q-uestions cli,rided in two Sections ru1d printed bolb in HIND£ and
in E rGLISH.
Candtdatc: has t.o attempt FIVE question s in all,
Question Nos. 1 and 5 are compulsory ancl o u t of he remaining_, THREE ｾｲ｣＠ to be attempted
｣ｨｯｾ ｝ ｮｧＮ＠ ut least 0 E ｱＱＮｬｴ［ｓｾｩｯｮ＠ from each Section.
The number of marks carried by a question/part is indicate d ageirnat it.
Answers must be Y.' rltten in the medium ｡ｵｴｨｯｲｩｺｾ＠ in Ehe Admission Certificate which
ｭｵｾｴ＠ be slated dearly on the cover of this Question- cum-An swer (QCA} Booklet in the
space prmdded. No ma:rl{S v.rj.]J be:: given for an!;lwcra written in a medium other t.ha.n th o
authodzed one.
Word Limtt in questions, ｷｨ･ｲ ﾷ ･ｶｾＺｲ＠ specified . should be ｾ､ｨ･ｲ＠ to.
Graphsfillustrat iom;, wherever required, rnay b e dr awn/given in the space provided for
answering the question its.eU.
Attempts of qu csdons shall be counted in ｾ･ｃＬｊｵｮ ｬ ｩ｡ｬ＠ order. Unless sttuck off, ｡Ｎｕｴｾｭｰ＠ r;>f i!
question shall be counted even if attempted ｰｾｲ ｬｴ ｹ Ｎ＠ Any page or po:ttion of the page left b lanl<
in the Question-cum-A n swcr Booklet must be clearly struck off.

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 '1 li!U'I'-A I S:EcTIOB-=A.
1. ｾＢＧ＠ R1fatt 11 if ｾ＠ ｾＱ＠ ｾ＠ '3'VR t."ri'Fi 150 :tTii:1i ｾ＠ ｾ＠ ｾ＠
Answe.T the following questions in .about 1SO words each : lOxS:-50

{a) 1p!f1 ｾｴｆｦｩ｡Ｚ＠ ｬｦｩｮｱｾ＠ ｾ＠ ｾ＠ ｾｦＣｬｴＮｩＧｯ＠ ｾ＠ aTIUe,;tlffil ｾ＠ ｾ＠ ｾ＿＠

Does a m·o n opolistically c-ompetitive market iead to excess capacity under pric.i!
competition?

fhJ -mtt ｾ＠ <lil mm m ｾ＠ ·JWtiH1 tm ｾ＠ 1alt ｾ＠ 1f1fi ｾ＠ -m ｾ ｾ＠

ｅｾｨｲｩｮ＠ some of the tnQasures for assessing the monopoly power ·Gif a firm.

(C} ｾＰ＠ ｾｯ Ｍ Ｇｑｩｬｦｯ＠ ｾｄ＠ ｾ＠ riP1 ｾ＠ F:t ｾ＠ ｾ＠ ＩｩＨＡＧｾ ｩｦ ｩｴＱ＠ 'dtij¥4i)ift ｾ＠ m ｾ＠ f.rTil ｾ＠
ｾ＠ ｾ＠ m t ｾ＠ ｾ＠ ｾ ﾷ ｾ ｲ ＱＶｒｕｔ＠ iiA ｾ＠ ｾ ｾ＠
LM mod.e-1, show bow expected de.flatiort may cau se tlquiUbrium
U's:ing the ｉｓ ｾ＠
output ·be Temain at less tha_n ｦｵｬｾ･ｭｰｯｹｮｴ＠ level.

(d) ｾ＠ ｾ Ｍ ｾ＠ ｾ＠ Ｈｾｬ＼ｦｩ＿ｲＺｱＩ＠ ｾ＼ｲ＠ ｾ＠ llf)l ｾ＠ ｾ＠ ｾ＠ ｾＷ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠

ｾ ｉ＠
]s stagilatlon a Jogic:a] outcome of KcyYH:'aisn orthodwcy? Owe reasons for
,you·r answer.

{e) ｾＭＶ＠ ｾ＠ ｾ＠ ｾ＿＠ ｾ＠ ｾ＠ ｾ＠ ｾｗＢｨｦｩ ｩ ｾＢＧ］ｴ＠ ｾ＠ -;ftftr ji ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠

-llftll
1ffl ｾ ﾷ＠ q?t '51mF.«r ｾ＠ il l
What :is ｨ ｩｧｨＭｰｯ
money? Explain how change:s. in short-term monetary ﾷ ｾｲ｣Ｍ､＠
policy affect b i t;;h- powe.rod. money and money mul.tipller"

2. (a} ｾ＠ ｾ＠ 1% ｾ＠ ＨｾＱＩ＠ ｾ＠ ｦｴＭｾ＠ ｾ＠ ｾ＠ ｾ＠ CfiW1I ｾ＠ ｾ＠ il ｾ＠ ｾ＠ q?J

lWm ｾｩｮ＠ ｾ ｉ＠
E:xple.in why in a duopoly model of ｣ｯｬｵｳｩｮｾ＠ each ｲｾｭ＠ has an incentiv·e to.
cheat the cth.e;r. 15

(b) ｾ＠ fih ｾ＠ ｾ＠ ii ｾｉｦ＠ ili ｾ＠ ｾ＠ ｾ＠ ｬｦｩｾ＠ wm ｾ＠ ｾ＠ amufi ｾ＠ ｾ＠

ｾ＠ ｾｴｬ＠
Show how a. dominant finn with a competitive fringe can ｾ｣ｴ＠ as a price Jcac::l.oli i n
an oligopoly market. 15
..
t(c} ｾ＠
ｾ＠ ｾ＠
ｾ＠
ｾ＠
ｾ＠
ｾ＠
RFntl :cfu ｾ＠
ＧＡｾ＠ ｾ＠ lA! ｾ
ｾ
ｉ＠
ﾷ＠ mu ｾ＠ ｾ＠ «R -ii ｾ＠ * ｾ＠ ｾ＠ il if>lft ｾ＠

Givr!! an outline o,f Kaldor's theory of distnbution. Aliso explain the implications
of an increase in the wage l-evel and. a reduction in the s,a\;'ing ;rate: oo the
disb'ibudon of ｩｮﾫＺｯｭｾＮ＠ 20

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 3. (a) lRE
ln the simple Keynesia..n .mo·del, if c:on slln'l.p tion and in\o'es.t rnent are both
functions of ｩｮ｣ｯｭ･ｾ＠ how would the :multiplier be affected? LS

lb) ｾＱｦ･＠ ｾ＠ t 7 31 l;piil?!<ti ＡｻＵＺＰ Ｑ ｾ＠ rr:!l 'W-IT ｴｩｾＢｬ＠ L('ll'ift ( ｾＩ＠ ｩｦｈｾ＠ lt!l ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾＧｬｦｱ＠
ｾ＠
｜ｖｨｾ ｴ＠ is hyslcres'is? Explain the impact of h yst.cre'c&if;ll in Or.adualhn Monetarist
and. Eclectic Keynesian frameworks. 15
(c) '1<f cte:LRJ<fil ｦｾ＠ ;;m ｾＧｩ ｬ ｩＧｬ＠ if'i'ffi ｾ＠ -31Jq1 CIIW!Ai:fi ｾ＠ lW1· ｾ＠ ｾ＠ 'fiw m ｾ＠ ｾｲ＠
•
How will you dlerl\lie t he real aggregate demand curite using the N ｾ＠ ｃｬｾ｡ｩｂ＠
Th eoi]•? 20

4. (W PIIil ｾ＠ ＧＨＮｾ ｾ＠ iFil' ｾ＠ ｾ ＿＠ ｾ＠ ｾ＠ ｾ＠ Q#Tr:w4H I 'if1l ｾｍ＠ .m- ｾ＠ ｴｌｉｾ ｉ Ｔ ｬｩ［＠ I

What is inten::st re,tc targetinng? E >-" Piain u sin g the concept of Taylor role. l5

tbJ '3V:r ttr ﾷ ﾷ｛ｾ ｦｴ ｬＺＱ､ ｬ＠ mr ｾ＠ ｾｩｴ＠ ｾ＠ 'if'.iq;r ｾＭ＠ q;r ｾ＠ ｾ＠ '3'141;11(01 'it ｾ＠
ｾ ｾ ｾ＠
In an open economy with high capitEU mobility, :monetary management can be
a :successful tual Lo increase output. Explain. 15

(c) ｾ＠ ｾ＠ 'm rn:g 1ft 'ircn ｾ＠ 'tlfrTｾ＠ ｾ＠ ｾ＠ ｾ＠ 1f\ 1=1m. ｾ＠ ｾ ﾷ ｉ＠ ｾ＠ Ｓｾ ﾷ Ｑｴ［ｶ ｩ＠ M ｾ＠

ｾ ｦ＾ＢＧ ｾｬ＠
The bU'rden of tax depends u pon the e lasticity of demand and supply of a
commodity or service_ Ell: plain with suitable ｾｸＮ｡ｭｰｬ･ｳ Ｎ＠ 20

ｾ Ｍ ｂ＠ I ｓｾｴ｣ｮ ｾ ｯｎ＠ B:

s.. ｒｾｙＺｩｲＦ ｡＠ ll ii ｾ＠ ｾ＠ ifil ｾ＠ ｾ＠ ISO ｾ＠ ｴｦｬｾ＠ ｾ＠ :

ｬ｜ｮＶｗｾ＠ tne follQwing question s in a b out 150 words each : l O)t 5 • 50

(a) ｾ＠ ｾ＠ ｾ＠ -q, m ﾷ ｾｩｦ＠ ｾＹ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｩＡｾ ｉ ｗｉ ＿＠

Under what condi.tions win de\r,a luation create trnde surplu s and mere.,. s:e
out:put in the simple ｋｾｹｮ･ｳ ｩ ｡ｮ＠ rramework?
(bJ ｾ＠ ｾ＠ q:qr ｾ＠ ｾ ＿＠ ｴｲｾ ｬ ＧＴＱｩ ｬ＠ 'f!..Ritti"' ｾ＠ ｾ＠ ｾ＠ ｾ＠ 'q{ ifff ｾ＠ ｾ ｦｴ＠ ｾ＠ !
•
What are shadow prices? \Vhy are m.h.cse pn:ferr·e d over market prices in
project ,e valuat ion?
..
(c) ｾ＠ ｾ＠ ';t ｾ＠ ｾ＠ ｾ＠ ｕ ｾｬｦ ｬ ､＠ ｾ＠ ｾ＠ ｾ＠ ｻｾＩ＠ ｾ＠ G{ 'it ｾｵｱＺ［＠ tOt mi41k!Fcll;fl
ｾＢ＠ ｾ＠ ｾ＠ m1!lm ｾ＠ ｾ＠ t ｾ＠ ｾ＠ 'riii1:l m?
In Harrod's model of growth, if the expected growth rate exoeeds the· wru-ranted
growth :rate. wha.t wiU be the relation ibenveen the actua} growth rate Ｚ ｾｮ､＠ the
･ｸｰｾ｣ ｴ｣Ｚ､＠ g rowth rate?

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 (clJ ｩＩｈＱ ｾ＠ ｾ＠ T<fiR ｾ＠ :314'14i(:'fit l ｾ＠ ｾ＠ ｾ＠ ｾ＿＠ ｾ＠ ｾ＠ q;J ｾ＠ ｾ＠ ｾ＠ WJT iffl
ｾＷ＠
How do externallties lead to market failure? How can this situation be
remedied?

(e) met Mf.lttU ｾ＠ ｾ＠ ｾ＠ ｾ＠ 3iiMDI (#tifliclfaq ｾＩ＠ ｾ＠ 1ffiffi' <fl ｾ＠ ｾ＠ ｾ＠

O'ivo an outline of a model of spc-culati,•e attack under fvced. exchange rete.

•
6. {a} ｾ ｗｉ＠ » ｑｾ＠ l<id 1ir t1 Iii! 1='t. f.f; ｾ＠ ｾ＠ ｾ＠ "ffi'Ta 'It'! ｾ＠ ｾ＠ '1#1 ｾ Ｍｵ ｣Ｍｱ ｴ ｦｩ＠ ｾ＠ ｦｾ＠ ｾ＠
ｾ ｾ＠
Explain, with the help of d iagram , how Habcrlcr1 s theory or opp ortunity cost
is o.n improvt!mmt over the compa.ra:tive cost theory of Ricardo. 15

(hJ ｾＧｦｬＢｒＱ＠ -q-{ q;)a ·nvn ｾ＠ qm ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＠ q{ Ｇ＼ｾ ｉ ｒｬ｣ｴｾｮ＠ -ti

ｾ＠ I Qqi;41$Qtl

A quota on import a..nd an c,qua.J- import tariff are equivalent in a oompctJrlvc

market but not u-nder m onopoly. Explain.. 15

(c) ｾ＠ ｾ＠ <til4(0(-<ft ｾ＠ ｴｾ＠ ｾ＠ ｾ＠ ｾ＠ uti i6 ｾ＠ ｾ＠ ｾ＠ ｾ ｾ＠ ｾ＠ -q:( ｾ＠ \TlJiR

ｩｕＨＱＧｾ ＼Ｑ＠ ｾ ｾ＠
\Vhat is. Doha. D-evdopmen t Agenda? Explain how it ncgotia ted TRJPS and
TRIMS among nations. 20

7. (a) lfA'q ｾ＠ ｾ＠ f4cfim ｾ Ｑ＠ ｓｬｾｴｦ＾ ･ｦｬ＠ cF.I ｾ＠ ｾ＠ '{f<fiffi t 3ffi Ｓｬｾ＼＾ｱ＠ ｾ＠ ｾ＠ ｭｦｬ ｾ＠
ｾ＠ ｾ＠ 3ffi .mlm <j{ ｾ＠ tl ｾ ﾷ＠
Development of human ca.pi lal may lead to conslant r-eturns and pr.opd an
e-conomy t o aclf-su staining economic growth. Expla__tn. 15

(b) Ｚｦ［ｊｬｾＧＡＬ ｾ＠ ｱｦｾ Ｂｬ ｬ＠ ｾ＠ ｾ＠ 3l1ll ｾｴｩＪＴ Ｑ ＢｈＱ ｡ｦｬ＠ ｾ＠ ＠ｾ alFt ｾ＠ ｾＧａ＠ t I Cfll1 ｾ＠ • • ｾ＠ ｾ＠
ｾ｡＠ nQJ ｆ｡＼ｩｭＺｴ ｾ＠ ｾ＠ ｾ＠ o3iFi ｾ Ｑ＠ ｾ＠ ｾ＠ ｱｾｶｮ＠ ｾ＠ ｾ＠ ｾ＠ ｾ＿＠ ｾ＠
3m ｾ＠ ｾ＠ <ft ｾｉ＠
..
Kuzn ets hypothesis predicts decline in income inequalities in the long run. In
recen t decades do t:rends m income inequaJities in deveLoped a nd developing
economics support this hypo thesis? Give reasons for your answer. 15

(c) WI <fit 31tflfii d ｾ＠ \i ltN ＳＱｔｦＧｾ＠ ｾ＠ 't ｾ＠ ｾ＠ ｾ＠ ｾ＠ q;r ｾ＠ ＼ｦｩｴｾ＠ I W "JtiTI1II "tf\
"Q_o ｾｯ＠ :k-t iil'it 'iWT ..iiLHliii"'l t?
Examine Arthur Lewis model of economic development with unlimited supplies
of labou r. What is A. K. Sen's critique of that a pproach ? 20

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 s.. (tJJ Q'I$411Q\ fcl1 m ｾ＠ ｾ＠ ｾ＠ .q ｾ＠ q ｾ＠ ｾ＠ ｾ＠ ｾＭ＠ ｾ＠ ｾ＠ inft ｾ＠ 1
Explain why the market and the State have complementary roles in economic
development. 15
(b) ｾ＼ｴｩｑｮＨＮＧ＠ Ｓｦ､ｑｃＴｾ＠ ｾ＠ !Jfi'JftiJI ｾ＠ ｾ＠ ｾ＠ ｾ＠ qqM(OII f:l""t'hti(OI ｾ＠ , ?
How does rural economic activity create ·e nvironmental degradation in
developin g economiC"S? 15

(c) ＢｩｦｬｕＧｉｗｾ＠ ｾ＠ ｾ＠ Uｾ Ｍ ｾ＠ -funt ｾ＠ ｾＭｩｬｦｴ［＠ lfl ｾ＠ ｾ＿＠

• What policies. would you sUR8C:!!lt to combat. negative environmentaJ
exter nalities? 20

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s BS9-540
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