12th Economics EM Study Material 2023 2024 English Medium PDF Download

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Chennai
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1.1 Introduction 1.8 Concepts of Macro Economics

1.2 Meaning of Macro Economics 1.8.1 Stock and flow variables
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adsaasal d a saaslaala d a saaslaala d a saaslaala da saaslaala d a saaslaala da saaslaala da saaslaala as
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Capitalistic : According to “Adam Smith” capitalistic economy is also termed as a free economy
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Mixed Economy : An economic system combining private and state enterprise.
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(a) Wealth of Nations (b) General Theory
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laiai laiai laiai
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13. Who is referred as ‘Father of Capitalism’? (ii) In other words macro economics deals
laiai ala ilai i i i [FRT-'22]
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sasa a
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saa22. laailai Inflation.
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Ans. (i)
m
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laiai ilai general price level.
adsaasal a
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a saaslaailai a saaslaailai a saaslaala
i i
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a d
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P Pad d by PaPdad
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laiai (c) l a ilai Smith alailai (d) Samuelson
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d a saasIndex d a saas d a as
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16. An economic system where the economic 23. What is meant by an ‘Economy’?
.
activities of a nation are done both ilai by the alailai [PTA-1, 5; HY-'19]i
laiai lsaailai and public
private lsaailatogether
i is lsaatermed as l aailai l aailai saisaslaaala
i
adsaasal
ks
a saa a saa a saa a sa a
s J.R. Hicks
Ans. a saas defined as, a saa
“An
s economy a as
d d
P Pa _______. P Pa
a a d d d d
P Pa[PTA-6; July-'22]
a a
P Pad d a
P Pad d a d d
P Pa and workers a d d
a make
P Pto PaPdad
cooperation of producers
(a) Capitalistic Economy goods and services that satisfy the wants of the
(b) Socialistic Economy
laiai
adsaasal
i i
(c)alaGlobalisic
asasa la alala
Economy
s sa
i i alala i i alala consumers”.alailai
i i alailai alailai
PaPdad(d) Mixed P aPdaada daadsasaEconomy] asasa
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asasa
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asasa dasasa
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as
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oo Pad of
17. Quantity of a commodity accumulated at a development.
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laiai lai
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[Ans. (b) stock] (iii) Undeveloped economies

18. Identify ilai the flow variable. [QY-'19;iSep-2020]
laiai laamoney laailai (b) assests laalai laailai(iv) Developing laailai economies i i
saaslaala
i i
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a d PaPa d PaPdad
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ur
ai i [Ans. (c) ilaincome] Ans. Adam Smith aailaisi the ‘Father ilaiof Capitalism’
laiai saaslala the sectors aslaaofilaai Two Sector i
aslaaModel. aslaailaiCapitalistic asleconomy aslaatermed laail.ai
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s as
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FRT-'22] PaPdad (Laissez faire,
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.s
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a d
PaPa and Firms]
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20. The Circular Flow Model that represents an 26. Define ‘Economic Model’. [PTA-6]
laiai open i Economy. i i [PTA-2] i (i) A Model i is a simplified irepresentation i i
saaslaaofla
l a ai l a a i l a a i Ans.
l a a i l a a i l a a i
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(a)
l
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Model d a saasal d a saasal d a
real
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(ii) Economists use models to describe

(c) Four Sector Model economic
laiai (d) ilaithe above[Ans.
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i
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27. ‘Circular Flow of Income’ - Define. [PTA-2]

Answer the following questions in
Ans. (i) The circular flow of income
laiai one sor ilai sentences
aslaatwo aslaailai aslaailai aslaailai aslaailai showing laailai is a model of
aslaailai
adsaasal a a
aPdadDefine Macro a sa a sa a s a an aeconomy
sa a saa
connections
s between
a sa as
21.
P PaPdaEconomics.
d PaPdad PaPdad dad
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an economy. PaPdad PaPdad
[PTA-4; QY-'19; FRT-'22; May-'22]
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Ans. (i) i The word ‘Macro’ilai is derived ilfrom the
laiai l a a i l a l a a i l a ilai aslaailai of production
andsfactors ilai
saaslaabetween economic i i
saaslaala
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i i
saaslaala
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saaslaala
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saaslaala
a
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laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
i i
saaslaala
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adsaasal d Sura’s
Part - C (v) Higher Rates of Capital Formation :
laiai i i
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i i
saaslaala
i i
saaslaala
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about a paragraph 31. Indicate the demerits of socialism. [PTA-1]
laiai 28. State i the
i importance i ofi Macro Economics. i i Ans. i i(i) Red aTapism i i and Bureaucracy laailai : i i
adsaasal d a
saaslaala d a saaslaa[PTA-5;
la a saaslaalaFRT-'22]dadsaaslaala
Mar-2020;
d As
d a saslaala are taken
decision d a saasgovernment
by d a saaslaala
agencies, as
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Ans. The importance and the need for introducing a approval of many officials and movement
m
macro outlook of an economy are given below. of files from one table to other takes time
laiai (i) l ai i
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a l
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l understand
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andsleads i red tapism.
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i i i i
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a
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P Pa :
a d a
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co
evolve suitable strategies and to solve the The major limitation of socialism is that
basic problemsaiprevailing in anaieconomy. this system does not provide any incentivei i
laiai laailai lalai lalai laailai laailai laailai saslaala
adsaasal aa a
(ii)
s s Understandings
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as the futureaPdaada
s a
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s needs s
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as for
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s a
efficiency.
s s
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a s
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and challenges of an economy as a whole. P P P
(iii) Limited Freedom of choice : P PaPdad
(iii) Macro economics provides ample opportunities Consumers do not enjoy freedom of choice
.
laiai a i to
i use scientific a investigation
i i to aunderstand
i i a i i over the iconsumption
i of goods
i i and services. i i
adsaasal
l a
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ks
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a
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P Pa d a
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(iv) Macro economics helps to make meaningful The State takes all major decisions.
comparison and analysis of economic indicators. 32. Enumerate the features of mixed economy.
laiai (v) l a ilaMacro
i i i
saaslaalahelps fordabetter
economics iai
saaslaalprediction
i i
saaslaala
i ai
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ilai
saaslaaSep-2020;
i i
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:
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29. Describe the different types of economic systems.
1. Ownership of Property and Means of
laiai lailai aailai [QY-'19; FRT aa&ilaMay-'22]
i aailai i i ilaiproductionaand i i
adsaasal a s a a
s are threedmajor a s a l
s types of economic a s a l
s systems.dadas s a l Production
a saaslaala : Thedmeans a saaslaaof a saslaala as
Ans.
a d dThere
a a d a a d d a a a d d
P Pproperties a
arePowned d a d d PaPdad
P Pa P Pa P Pa P Pa a Pa by both P private
Pa and
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They are,
ab
public. Public and Private have the right to

(i) Capitalistic Economy (Capitalism) : purchase,
laiai i i aslaailai is alsoatermed i i i i i iuse or transfer ai their
i resources. i i
adsaasal d a saaslaalaCapitalistic d a saeconomy d saaslaala as a freedadsaaslaala 2. d a saaslaala of Public
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In mixed economies, both private and public
of the government is minimum and market
ur
sectors coexist. Private industries undertake

laiai lsaailadetermines
i the
lsaaileconomic
ai activities.
lsaailai lsaailai i i
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activities for laailai Public sector
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i i
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(ii) Socialistic
d a sa a
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d a saa : d a saa
d a d a d a as
a
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public ownership and state control on economic view to maximize social welfare.
.s
laiai i activities.
i i i i i i3. Economic iai Planning :aThe i central planning i i
adsaasal saaslaalaMixed Economy saaslaala (Mixedism) saasla alai saaslaala saaslaalprepares
i
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d
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public sectors co-exist and work together both private and public sectors abide. In
laiai l a i atowards
i economic l aailai development. l aailai l aailai iai sectors of the
saaslaalall
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ilai
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i i
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30.
a
P Pa dOutline the major
a
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P Paacapitalism.
d a
P Pa d a a d
P Paccording to thea a d
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P Pa and
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[PTA-6; Aug-'21; July-'22] targets laid down in the plan.

Ans. (i) i Automatic Working :
laiai i
laalaWithout laailai saaslaala
i i
thedasaaslala
ai i4. Solution laailaito Economic saaslaalto
iProblems
ai : aThe
ai i
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economy
(ii) Efficient use of Resources : to produce, for whom to produce and how
to distribute are solved through the price
laiai lsaailaAll i resourcesalare aailaput
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laiai (iv)lailaConsumers
i Sovereignty
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d
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laiai i i
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laiai laiai laiai
laiai i i ilai
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Part - A 10. Market forces are _______.
Multiple C hoice Questions
il1ai Mark alailai
(a) Supply and price
laiai i i l a i i
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saaslaaand price asaasla
i
alai
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co
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2. Micro (c) Socialism (d) Mixed economy
laiai laailameans
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i i i
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.
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laiai a i i a i i a i i a i (a) Socialist
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saasal a l
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ks
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laiai laailai laailai laailai laailai i i
saaslaala [Ans.da(a) laailai i i
saaslaala
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aas All the above
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Alls the above]d a saas d a saasSocialist economy]
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[Ans. (b) Income theory] (c) Traditional Economy

5. Planned economy is (d) Commandi Economy
laiai i
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also
i laa_______.
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d a s d a aas d a saas d a d a sCapitalist
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a i i i
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6.Pa Father of socialism
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laiai sasala saslaala
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7. Example for Mixed Economy _______.
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(d) Four sector model

8. Combination of both capitalism and socialism
_______. [Ans. (c) Three sector model]
laiai laailai laailai laailai laailai laailai laailai i i
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adsaasal d a saas d a saas d a saas d as aa16.
s _______ d a is
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andPsocialism.
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i laailai laailaiIdentify the
17.
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d
i i
saaslaala as
PaPdad
laiai GNP lailai i: i Total money avalue

i i of final agoods
ai i and services produced
i i in a lcountry
i i duringaalailai
adsaasal asaasa a saaslaala particulara slala(one year)
saayear a slala
saincluding saaslaala and net
depreciation
a a saasaala
exports. asasa as
PaPdad d
PaPa d PaPad d d
PaPa d d
PaPa d d
PaPa d PaPdad PaPdad
Total money value of final goods and services produced in a country during a
m
NNP :
particular year excluding depreciation including net exports. ai i
laiai aslaailai aslaailai aslaailai aslaailai aslaailai saaslala
i i
saaslaala
adsaasal d a s
a d a s
a d asa d a s
a d a sa d a d a as
a d
P PNNP a
a at factorP cost
Pa d : The a
Ptotald a
Pa of incomePpayment
Pa d made P a d
toPfactors
a a
of production.
P Pa d a
P Pa d PaPdad
co
Personal Income : Total income received by the individuals of a country before payment of direct
laiai i i
saaslaala
i i i i
saaslaala taxes.dadsaaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
adsaasal d a d a d a d a d a d a as
a d
PaPDisposable PaPa
Income
d d
PaPa sum of thePconsumption
: It is the
aPa Pa a d d d
PaPa after the Ppayment
andPsaving of individuals
aPa PaPdad
of income tax.
.
laiai aslaailai Income i i
saaslaal:a Annual
i i
saaslaala income lailai laiai i i
saaslaala
i i
saaslaala
adsaasal person. dadsaasal
ks
Per
d a sacapital d a d aaverage d ofsaaasa
a d a da as
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa a
P Pa d a
P Pa d PaPdad
Social Accounts : The accounts of national income considering the social cost generated by
economic activities.
laiai laailai laailai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
adsaasal d a saas da saas d a d a d a d a d a as
: Rendering
PaPa useful services
PaPa like preparation
PaPa of meals, washing,
PaPa learningPbringing PaPdad
PaPUnpaid
a d Services
PaPa d
oo
d d d d aPa d
up children, services to their friends and relatives without payment.
laiai Capital iSector

i i: i It includesasaving
i i and investment i i activities.alailai i i i i
adsaasal d a saaslaala d a saaslaala d a saslaala d a saaslaala d a sasa d a saaslaala d a saaslaala as
a a d
P PTransfer a
P Pa
Payments
d a
P Pa
: Government
d a a d
P Ppayments
makes
a d a
Pa form of pensions
inPthe P Pa d a
P Pa d
unemployment PaPdad
www.Padasalai.Net
ab
allowance, subsidies, etc.

laiai ai i
slala
i i
saaslaal:a Nominal aslaailai is national ilai
saaslaaincome
i i ai i
saaslaalain term dofadasaageneral
i i
saaslaala
slala pricedalevel
adsaasal Real
d a saaIncome d a d a saincome d a expressed
d a as
PaPa d PaPa d a aP
of P a d
particular d
aPathe other words,
yearPin d
PaPa real income PaP
isathe buying P d
aPa of
power PaPdad
nominal income.
ur
laiai Outlay ilai

saaslaaMethod
i i
saaslaal:a The total aslaailai
saexpenditure
i i
saaslaalaby the society
incurred i i
saaslaainlaa particular ai i
saayear
i i
saaslaala
slalais calleddatotal
adsaasal d a d a d a d a d a d a as
a
P Pa d a
P Pa d a
P Pa d
expenditure of a society.
a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
Factor Cost : There are number of inputs that are included into a production process when
.s
laiai i i
saaslaala
i i
saaslaala producing laailai and services.
saasgoods
i i
saaslaalaThese inputs
ilaicommonlyaknown
saaslaaare
i i
saslaala as factors
i i
saaslaala
adsaasal d a d a of P a
production.
d da d a da da as
PaPa d PaPa d aPa d PaPa d PaPa d PaPa d PaPa d PaPdad
w
Market Price (MP) : The market price is the price that consumer will pay for the product when they
laiai i i i i purchase italfrom
i i the sellers. i i i i i i i i
adsaasal d a saaslaala d a saaslaala d asasaala d a saaslaala d a saaslaala d a saaslaala d a saaslaala as
a a d
P PCapital a
GainsP Pa
d a d
P Pa gains are the
: Capital
a a d
P Pdifference a d
P Pa a higher P
between a d a
Pa price andPaPlower
selling a d PaPdad
w
purchase price.
laiai ilai
saaslaaAccounting
i i i i
saaslaal:a “Socialdaaccounting
saaslaala is the aslaailai of measuring
sprocess
i i
saaslaalaand reporting
ilai
saaslaato
i i
saaslaala
stakeholders
adsaasal Social
d a d a d a a d a d a d a as
PaPa d PaPa d d
aPa and environmental
thePsocial PaPa d aPan
effectsPof d
a organisation’s d
PaPaactions”. PaPa d PaPdad
w
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 21
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
laiai Share Your
laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
saaslSample,
Onlydfor
ilai
saaslaaBook
ai or
i i
saaslaala
i i
saaslaala
a
P Pa d a
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laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
i i
saaslaala
iai
adsaasal d Sura’s
laiai
adsaasal a d
P Pa
a
d
i i
saaslaala
a d
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a
d
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saaslaala
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d
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saaslaala
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saaslaala
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d
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a
d
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laiai National ilaIncome

i byalail:ai Alfred Marshal
laailaidefined National i i Income asa“The ai ilabour and capital
aailai of country aslaailai
adsaasal asaaslaaMarshall
Alfred
d d a sasa actingdon asaasits natural a saaslaala produce
resources
d d a a slala a certain
sannually d a saaslnet d a
aggregate saof as
PPaa d aa
PP d aa d
PP
commodities,
aa d
P P and immaterial
material
aa d
P P including services aa d
P P of all kinds.
P PThis is aa d PaPdad
m
the true net annual income or revenue of the country or national dividend”.
laiai i i
saaslaalaIncomedaby
i i
saaslaal:a According laailSamuelson
ai aslaailaconcept
i aslaailai Income aailaindispensable
saisaslan
i i i
saaslaala
adsaasal National
d a d asaasto d a s“The
a ofasnational
d a d a d a as
a a d
P PSamuelson a
P Pa d a
P Pa d
preparation a d
P Pa the greatPissues
for tackling a d
Pa of unemployment, a
P Pa d a d
P Pa and
inflation PaPdad
co
growth”.
laiai laailai
GDPaDeflator i i
saaslaal:a The GDP laailai also known
saasdeflator,
i i
saaslaala as thedaimplicit
i i
saaslaala price deflator,
i i
saaslaalameasures aslaailai
sthe
adsaasal asas a impact a a a a a as
PaPdad d
PaPa d PaPaof inflationPon
d d aPathe gross domestic
d d PaPa product during
d PaPa a specifiedPaperiod,
d d d
Pa d PaPdad
usually a year.
.
: The averageaincome of a person
laiai Per Capita
ai i Income
saaslala aslaailai Capita aIncome.
aslailai Per capita laailai of a country in ia particular year
aslaailaby laailai is called Per
aslaailai
adsaasal
ks
a a s
a sa a s
a asIncome is obtained
a s
a dividing
a s
a anation
s incomea saby as
a d
P Pa d a d
P Pa d a d
P Pa d a
P Pad d a
P Pa d d a d
P Pa d a d
P Pa d PaPdad
population.
National Income by : “The net output of the commodities and services flowing during the year from
laiai lailai laiai laiai aslaailai into theasahands
aslaailai of the ultimate
laiai laiai
adsaasal Simon
asaasaKuznets asaasal the country’s
asaasal productiveasa
system asaasal consumers
asaasoral as
PaPdad PaPdad d aPdacountry’s PaPdaofdcapital goods”.
PaPdad PaPdad PaPdad
into
oo
Panet
Padaddition toPthe d stock
- Simon Kuznets.
Formulae
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala saa7.ai i
slala Disposable
aailai
saaslIncome
i i i i
saaslaalaincomed–adsaaslaala
adsaasal d a d a d a d a da =aP
dersonal
a as
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a d
P PDirect tax. P P
a a PaPdad
www.Padasalai.Net
ab
As the entire disposable income is not spent

laiai saaslaala on consumption,
i i aslaailai i i i i i i i i i i
adsaasal saaslaalaDomestic
1.adaadGross d a sproduct
a (GDP)
d a saaslaala d a d a saaslaala d a saaslaala d a saaslaala as
PP PaPa d PaPa d PaPa d d
Disposal d
PaPa income =Pconsumption
aPa +P d
saving.
aPa PaPdad
GDP by expenditure method at market prices 8. Percapita Income
ur
= C + Ia+i Gi + (X –M) ai i
laiai ai i
saaslala saaslala saaslala
i i
saaslaala Percapita ai i iai
saaslaalincome
slala = National
i i
saaslaala
adsaasal d a d a d a d a d a saaIncome d a d a as
a d
2.Pa Net Domestic
P a d
P PaProduct (NDP)a
P Pa d a
P Pa d a
P Pa d a d
P PaPopulation P Pa a d PaPdad
Net Domestic Product = GDP – Depreciation
.s
9. Real Income
laiai lailai aailai
saaslprices aailai
aslmarket i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
adsaasal 3.adaadsaasaGNP at market
d a = GDP
d a saat d a d a da da as
PP PaPa d Pa a d Pa a d National
PaPa Income atPconstant
d aPa d price PaPa d PaPdad
prices + Net factor incomePfrom abroad. P P1
w
= National income at current price ÷

laiai 4. ilai = GNP –aDepreciation
i i i i i i i i i i P0 i i
adsaasal d a saaslaaNNP d a saslaala d asaaslaala
allowance.
d a saaslaala d a saaslaala d a saaslaala d a saaslaala as
a
P Pa d a
P Pa d a
P Pa d a d
P Pa 10. GDP a d
P Pdeflator
a a
P Pa d a
P Pa d PaPdad
5.
w
NNP at factor cost = NNP at market prices –

Indirect taxes National GDP
laiai ilaalai i + subsidies. i
laalai laalai laailai
GDP deflator =
laailai Realas aslaailai
GDP
× 100
laiai
adsaasal s
6.aPdaada
as s
aa as s
daada
as s
aa as s
aaas a asasal a as
PaPdad = National
Personal Income PaPincome PaPdad
– (Social PaPdad PaPdad PaPdad PaPdad
w
P
11. Method of measuring National Income
security contribution and
undistributed lacorporate Output = Income = Expenditure.
laiai i i
saaslaala aslaailai asailai aslaailai aslaailai i i
saaslaala
i i
saaslaala
adsaasal d a d a s
a profits) d +
a s
a Transfer d a s
a 12. Incomed a s
a
method d a da as
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
payment.
Y = W + r + i + π F(R – P)
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala ai i i i
saaslaala method
slala The expenditure
i i
saaslaala
i i
saaslaala
adsaasal d a d a da d a saa13. d a d a d a as
GNP = C + I + G + (X – M)
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 22
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
laiai Share Your
laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
saaslSample,
Onlydfor
ilai
saaslaaBook
ai or
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a d
PaAll Leading a
P Pa d a
P Pa d a
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laiai i i
saaslaalaIncome
i i
saaslaala
i i
saaslaala
i i
adsaasal National
asaasal as
laiai
adsaasal d a
i i
saaslaala d a
i i
saaslaala d a
M
saaslaaodel
ilai
d a
Q
sauestions
aslaailai
d a
i i
saaslaala d a
i i
saaslaala d a
i i
saaslaala as
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
9. Per capita income is obtained by dividing the
Part - A National income by _______.
laiai laiai laiai laiai i i
saaslaala
i i
saaslaala
iai
saaslaalAug-'21;
i i
saaslaala
adsaasal Multiple
asaasal Choice
Padad
asaasaQl uestions
Padad
asaasal
Padad d
PaPa
ad d
aPa a
d
[PTA-3;
d
PaPa
a
d PaPa
May-'22]
d a
d as
PaPdad
P P P (a) PProduction
m
1. Net National product at factor cost is also (b) Population of a country
laiai known l a i a i as la i a i l a i a i
[PTA-3] l a i
saasal (c) Expenditure
a i
saaslaala
i i i i
saaslaala
i i
saaslaala
adsaasal d a saasal d a saasal d a saasal d a d a d a d a as
a d
P Pa (a) National a a d
P PIncome a
P Pa d a
P Pa d (d) PGNP
a d
Pa [Ans. (b) PPa a d
Population ofPa P
a a d
country] PaPdad
co
(b) Domestic Income
10. GNP = _______ + Net factor income from
(c) aPer ilai capita Income ilai (d) Salary.
laiai l l a l a ilai i i
sasa Income]dadsaslaala abroad.dadsaaslaala
i i i i
saaslaala
i i
saaslaala
adsaasal d a a
sasa d a a a
sas[Ans. (a) National
d a a a
d a d a as
PaPa d PaPa d PaPa d PaPa (a) PNNP
aPa d
PaPa (b) NDP PaPa d PaPdad
2. Primary sector is _______. (c) GDP (d) Personal income
.
laiai laiai [PTA-6; HY-'19; Mar-2020] [Ans. (c) GDP]
adsaasal l aslaailai (b) Trade aslaailai aslaailai aslaailai aslaailai i i
saaslaala
ks
a s
(a)
asaIndustry a s a s a s a s a s a as
a
P Pad d a a
P Pad d a a
P Pa d d a a
P Pad d a 11. NNP a
P Pastands
d d a for _______.
a
P Pad d a a
P Pad d PaPdad
(c) Agriculture (d) Construction. (a) Net National Product
[Ans. (c) Agriculture] (b) National Net product
laiai l a ilai l a ilai laailai laailai laailai i i
saaslaala
i i
saaslaala
adsaasal saa
3.adaadNational
s a income
d a saas ais measuredd a saas by usingd a saas (c) National
d a s a as Net Provident
d a d a as
PaPdad
PP
_______methods.
PaPa d
oo
PaPa d
[QY-'19; FRT, July-'22]
PaPa d d
PaPaNational Provident
(d) Net
PaPa d PaPa d
(a) Two (b) Three [Ans. (a) Net National Product]

laiai (c) a i
saasaFive
l a i l a i a i (d) Four l a i a i l a i a i l a i
al ia aailai value to
saaslgross laailai
adsaasal d a l
d a saasal d a saasal d a sal _______
saa12. d a sisaasdeducted from
d a d a saasget as
a
P Pa d a
P Pa d a d
P Pa[Ans. (b) Three] a
P Pa d
the P
a
net
d
Pavalue. a
P Pa d aPa d
P[Sep-2020] PaPdad
www.Padasalai.Net
ab
4. Income method is measured by summing up (a) Income (b) Depreciation

laiai of
saasall
laalaforms of _______.
i i
saaslaala
i i i i
aslaalaJuly-'22] asaaslaala (c) Expenditure
sa[FRT,
i i
saaslaala
i i i i
saaslaala
i i
saaslaala
adsaasal a a a a a a as
d
PaPa (a) Revenue
d PaPad d (b) d
PaPTaxes
a d PaPad d d
(d) PValue d
aPa of final goods[Ans. PaPad d PaPad d
(b) Depreciation] PaPdad
(c) expenditure (d) Income 13. The financial year in India is _______.
ur
[Ans. (d) Income]

laiai i i ilai [Govt. MQP-'19; HY-'19]
adsaasal saaslaala is the largest
5.adaadWhich a s aslaafigure? a s aslaailai a s aslaailai a s aslaailai a s aslaailai a
i i
saaslaala as
P P (a) Disposable a d d a
P Paincome (b) a d
a d a
P PPersonal a
P Pad d a (a) April
a
P Pa d d 1a to March 31
a
P Pad d a a
P Pad d PaPdad
Income (b) March 1 to April 30
(c) NNP (d) GNP
.s
(c) March 1 toi March 16

laiai ailai
a a ilai [Ans. laail(d)
ai GNP] saslaailai laiDecember ai i i i
adsaasal d a saas l
d a saas l a d a saas d a a (d) January
d a saasl1aato d a slala
saa31 d a saaslaala as
6.aPa Expenditure
P d PaPamethod is Pused
d aPa to estimate
d PaPa d

PaPa d Pa a d
[Ans.P(a) April 1 to March
d
PaPa 31] PaPdad
national income in _______.
w
(a) Construction sector 14. When net factor income from abroad is
laiai ilai
lsaaAgricultural lsaailai lsaailai ai i
slala deducted aslaailaNNP,
safrom
i theas
ilai
aslaavalue
net
i i
saaslaala
is _______.
adsaasal d a(b)
saa
d a Sector
saa
d a saa
d a saa
d a d a d a as
a d
P Pa (c) ServicePsector aPa d (d)a a d
P PBanking a
P Pa
sector
d a d
Pa National Product
(a) PGross a
P Pa d a d
P Pa[PTA-6] PaPdad
w
[Ans. (a) Construction sector] (b) Disposable Income

laiai 7. Tertiary i sector is also i called as _______ i sector i i i i i i i
saaslaala (c) NetdaDomestic
saaslaala Product
i i i i
adsaasal a saaslaala a saaslaala a saaslaala a a saaslaala a saaslaala as
PaPa
d d PaPad d PaP[PTA-1;
d
a d Sep-2020]
PaPad d aPa d
(d) PPersonal IncomePaPa d d PaPad d PaPdad
w
(a) Service (b) Income [Ans. (c) Net Domestic Product]

(c) Industrial (d) Production
laiai i i i aailaService] 15.i iThe value oflaNNP i i at production i i point is called i i
adsaasal asasla
a alai a saaslaala [Ans.
a saasl(a)
i
a saaslaala _______. a saasala a saaslaala a saaslaala as
a d d a d d a d d ad d a d d a d d a d[PTA-5]
d PaPdad
8.Pa National income
P P Pa is a measure P Paof the _______ P Pa P Pa P Pa P Pa
(a) NNP at factor cost
performance of an economy. [PTA-5; FRT-'22]
(b) NNP at market cost
laiai (a)ala Industrial
ilai laailai (b) Agricultural laailai laailai(c) GNP satasfactor laailai cost saslaailai i i
adsaasal d a sa s a d a saas d a saas d a s aas d a a d a a d a saaslaala as
PaPa (c) Economic
d PaPa d (d)
PaPConsumption
a d PaPa d aPa
(d) PPer
d
capita income PaPa d PaPa d PaPdad
[Ans. (c) Economic]
[Ans. (a) NNP at factor cost]
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 23
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
laiai Share Your
laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
saaslSample,
Onlydfor
ilai
saaslaaBook
ai or
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a d
PaAll Leading a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
i i
saaslaala
iai
adsaasal d Sura’s
16. The average income of the country is _______. Part - B i i
laiai (a) ilai
lsaaPersonal Income lsaailai lsaailai[PTA-4] saslaailai lsaailai saaslaala
i i
saaslaala
adsaasal d a saa
d a saa
d a saa
d a a A nswer a
the
d saa
following d a questions d a in as
a d
P Pa (b) Per capita a d
P Pincome
a a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
(c) Inflation Rate (d) Disposal Income one or two sentences
ai i [Ans.
laiai lala laailai (b) Per capita laailaincome]
i ai i
slala DefinedNational
saa21.
i i
saaslaala Income.
ilai
saaslaa[PTA-5;
i i
saaslaala
adsaasal 17.d a s
The
aas value ofd a saa
national
s incomed a saa
adjusted
s ford a a d a Mar-2020]
d a as
d
PaPa inflation isPcalled aPa d
_______. P
Pa a d d
PaPa Ans. According d
PaPa to Alfred d
PaPaMarshall, “The d
PaPalabour PaPdad
m
(a) Inflation Rate (b) Disposal Income and capital of a country acting on its natural
laiai (c) a i
GNP i a i i a i i a i resources aproduce
i i i annually i ai certain anet i i
adsaasal a
l
saasal a
a
l
saasal a
a
l
saasal a
a
l
saasal a
a saslaala a saaslaala a saslaala as
d d
P Pa (d) Real national
a d d
P Pa income P Pa
a a d d a
P Pad d aggregate
a
P Pad d of commodities,
a
P Pad d material
a
P Pad d and PaPdad
immaterial including services of all kinds. This
co
[Ans. (d) Real national income]
18. Which is a flow concept ? is the true net annual income or revenue of the
laiai laailai laailai laailai laailaicountry orsanationalai i
slala dividend”.
i i
saaslaala
i i
saaslaala
adsaasal d a(a)
saas Number of
d a saa
shirts
s (b) Total
d a saas wealth d a saas d a a d a d a as
d
PaPa (c) Monthly d
PaPincome
a d
PaPMoney
(d)
a aa d
supplyP P 22. Write PaPa d PaPa d PaPa d PaPdad
the formula for calculating GNP.
[Ans. (c) Monthly income]
.
[QY-'19; Sep-2020; FRT & May-'22]
laiai 19. PQLI l a i is
a i the indicator l ailaofi _______.alailai l aailai l aailai i i
saaslaaatlamarket dprices
i i
saaslaa+la
adsaasal l
ks
a saas a a saas a a sa s a a saas GNP atdmarket
Ans. a saas prices =dGDP a a as
a d
P Pa d(a) Economic a
P Padgrowth
d a d
P Pa d a
P Pad d a
P Pa d a
P Pa d a
P Pa d PaPdad
(b) Economic welfare Net factor income from Abroad.
(c) Economic progress GNP = C + I +i G + ((X–M) + (R – P))
laiai ilai
laaEconomic laailai laailai laailai laalai laailai i i
saaslaala
adsaasal d a(d)
saas d a aa
development
s s d a saas d a saas C -
d s as
Consumption
a a s as
Expenditure
d a a d a as
PaPdad
d
PaPa d
PaPa [Ans. (b)PEconomic
oo
aPa d PaPa
welfare]
d PaPa d PaPa d PaPa d
I - Investment Expenditure
20. The largest proportion of national income
comes G - Government Expenditure
laiai
adsaasal a saaslaailafromi _______.
a saaslaailai a saaslaailai[PTA-2] asaaslaailai a saaslaailai a
i i
saaslaala a
i i
saaslaala as
a d
P Pa d(a) Private sector
a
P Pad d a d
P Pa d a
P Pad d X–M d
P P-
a d
aDifference between a
P Pad d value exports
a d d
P Pa and PaPdad
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ab
(b) Local sector imports of goods.

(c) Publicilai sector alailai i iR–P - Netalfactor
laiai laaNone i i
saaslaala sector]dasaaslaala ailai incomesfrom alailaabroad
i alailai
adsaasal (d)
da as as of the
daabove[Ans.
sasa (a)
daPrivate dasasa da asa dasasa as
PaPad PaPad PaPad PaPad PaPad PaPad PaPad PaPdad
ur
23. What is the difference between NNP and NDP?

laiai lailai i i i i
saaslaala NNPdadsaaslaala
i i
saaslaala
i i i i
saaslaala NDPdadsaaslaala
i i
saaslaala
adsaasal Ans. aa
dadsaS.sNo. d a d a d a d a as
PaPa a
P Pa d a
P a a
P a d a
P Pa d a
P Pa a
P Pa d PaPdad
1. NNP refers to theP market value Pof NDP is the value of net output of the economy during
output the year.
.s
laiai 2. l a ilai NNP at factor

l a ilacost
i is the total
l a ilaofi income The iai
saaslaalcountry’s
iai
saaslaalequipment
capital i i
saaslaalaout or becomes
wears i i
saaslaala
adsaasal d a a
sasa d a a
sasa d a a
sasa da d a da da as
PaPa d paymentd
PaPa made to factors d
PaPa of production. d
PaPa outdated each d
PaPayear duringPthe d
aPaproduction process.
PaPa d PaPdad
w
3. Formula : NNP = GNP – depreciation Net Domestic Product = GDP – Depreciation.

laiai lailai lailai lailaallowance
i lailai lailai lailai lailai
adsaasal saasa
aPdaadTrace asaasa asaasa asaasa asaasa asaasa adsaasa as
24.
P PaPdad
the relationship PaPdadGNP and NNP.
between PaPdad PaPdad PaPdad PaPda[PTA-2] PaPdad
w
Ans. S. No. GNP NNP

laiai i i
sa1.aslaala GrossdaNational
i i
saaslaala Product laailai is the sNet
saas(GNP) aslaailaNational
i i i
saaslaala (NNP)
Product
i i
saaslaalato the value
refers laailai
saasof
adsaasal d a d a d a a d a d a d a as
PaPa d d
PaPmeasure
total a d
PaPflow
of the a of final goods d
PaPa the net output d
PaPaof the economy d
PaPaduring the year. PaPa d PaPdad
w
and services at market value resulting NNP is obtained by deducting the value of
laiai
adsaasal a s aslaailai from current
a s aslaailaproduction
i
a s asin
laailaa i country sdepreciation.
a aslaailai a
i i
saaslaala a
i i
saaslaala a
i i
saaslaala as
a d
P Pa d a during
a d
P Pa d a
a year, including
a d
P Pa d a net income
ad
P Pa d a a
P Pad d a d
P Pa d a d
P Pa d PaPdad
from abroad.
2. i GNP at Market prices = i GDP at i NNP = GNP – depreciation allowance
laiai i
saaslaala market a i i i
saaslaalaincomedadsaaslaala
slala + NetdaFactor
i i
saaslaala
i i i
saaslaala
i
saaslaala
i
adsaasal d a d asaaprices d a d a d a as
from Abroad.
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 24
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
laiai Share Your
laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
saaslSample,
Onlydfor
ilai
saaslaaBook
ai or
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a d
PaAll Leading a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai i i
saaslaalaIncome
i i
saaslaala
i i
saaslaala
i i
adsaasal National
asaasal as
laiai
adsaasal d a
i i
saaslaala d a
A
saadditional
ai i
slala d a saaslaala uestions
i i
d a
Q
saaslaala and
i i
d a saaslaanswers
ilai
d a
A i i
saaslaala d a
i i
saaslaala as
a
P Pa d a
P Pa d a a d a d
P Pa 8. GDP a a d a d a
P Pa price isPknown
Pa d PaPdad
Part - AP P P Pcalculate at market as
_______.
laiai
Multiple
lailai
Choice laQilauestions
i lail1ai Mark i i(a) GDP atafactor
laailai price saslaailai i i
adsaasal asaasa a
daadsasa Option.asaasa a saaslaala (b) NDP a sat
a sfactor price aa a saaslaala as
(i)aPdadChoose
P the
PaPCorrect PaPdad d
PaPa d d
PaPa d PaPdad d
PaPa d PaPdad
1. GNP stands for (c) GNP at factor price
m
(a) Net (d) GDP at Market price
laiai ilai National Product
lsaaGross lsaailai lsaailai lsaailai i i iai Market price] i i
adsaasal d a(b)
saa Net
dProduct
a saa
d as aa
d a saa
d a saaslaala[Ans. (d) d a saaslaalat
GDP
d a saaslaala as
a d
P Pa (c) Gross Net a d
P PaProvident P Pa a d a d
P Pa 9. GDP PPa d
bya expenditure a
P at d
Pa_______ price. a
P Pa d PaPdad
co
(d) Gross National Product (a) Factor price (b) Market price
ai i [Ans. (d) Gross National Product] i i(c) Real price (d) Allilai the abovealailai
laiai saaslalastands for laailai laailai saaslaala
i i
saaslaala saaslaa(b)
adsaasal 2. dadGDP d a saas d a saas d a d a d[Ans.
a Market sasa
aPdaadprice] as
PaPa (a) Gross Domestic PaPa d
Product PaPa d d
PaPa 10. NetPDomestic aPa d P aPa d
= GDP – _______.
P PaPdad
(b) Gross Direct Product (a) NNP (b) NDP
.
laiai (c) laGross
i i Domestic Provident
i i i i i i
(c) GNP i i ilai i i
adsaasal l a l aal a l
saasal a a l
saasal a a l
saasala a s(d)
aslaaDepreciation saaslaala
ks
d a saasaGross
(d) Derived
d a saasProduct d a d a d a d a a d a as
a
P Pa d a d
Pa (a) GrossPDomestic
P[Ans. aPa d a
P Pa
Product]
d P Paa d a ad
P P[Ans. a
P Pa d
(d) Depreciation] PaPdad
11. GNP is the total measure of the flow of _______
3. Formula for calculating NNP at factor cost. and services. i i
laiai laailai laailai laailai laailai(a) Semi sgoods
aslaala ilai
aslaaSemi aslaailai
adsaasal d a saas Nominal dGDP
a saas d a saas d a saas d a a d a s(b)
a finished
d a sagood as
PaPdad
d
PaPa (a) PaPa d × 100 PaPa
oo d PaPa d aPa
(c) PFinal
d a d
goods P Pa (d) None P
aa d
ofPthese
Real GDP
[Ans. (c) Final goods]
(b) aNNP at MarketaiPrices – Indirect taxes + 12. GNP includes _______ typesi of i final goods
laiai l i a i l a i l a i a i l a i a i l a i a i
saaslaala saaslaala
i i
adsaasal d a l
saasaSubsidies. d a saasal d a saasal d a saasal and services. d a saasal d a d a as
a d
P Pa (c) GNP –PDepreciation aPa d a
P Pa d
allowance a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
www.Padasalai.Net
ab
(d) Output = Income = Expenditure (a) Two (b) Four

(c) Five (d) Three [Ans. (c) Five]
laiai [Ans. a ila(b)
i NNP at lMarket
a ilai Prices la–ilaIndirect
i a ilaiGoods andalaservices
ilai a ilai in a yearalatoilai
adsaasal a l a a 13.
a l produced
a l
dasasa
4.aPadValue of output
adaadsasa taxes
PaPdad
a
asa+sSubsidies.]
PaPdad
asasa s sa
aada
PaPdimmediate
asasa
PaPdadis known as dasasa as
PaPdad
P PP = satisfy wants Pad
Pa_______.
(a) Sales + Change in stock (a) Production (b) Consumption
ur
(b) Sales – Change in stock (c) Distribution (d)laExchange

laiai ilai
aslaaSales aslaainilastock
i aslaailai aslaailai aslaailai i i
alaConsumption] saaslaala
i i
adsaasal d a(c)
sa ÷ Change
d a sa d a sa d a sa d a sa [Ans.
d a saas(b)
d a as
a d
P Pa (d) Sales ×PChange a d
Pa in stockP Pa a d a d
P Pa 14. Inventories a d
P Pa of finished a d
P Paand unfinished a d
P Pagoods PaPdad
[Ans. (a) Sales + Change in stock] are called _______.
.s
laiai 5. Percapita i i Income = i i i i i i i i ilai i i

adsaasal d a saaslaaNational
(a)
la
d a saaslaa–laPopulation
Income d a saaslaala d a saaslaala (a) NetdaInvestment
saaslaala d a s(b)
aaslaaInvestment
d a saaslaala as
d
PaPa (b) National a d
PaPIncome PaPa
+ Population
d PaPa d d
aPa Investment
(c) PGross d
PaPa (d) Both ‘a’ PaPand d
a ‘b’ PaPdad
[Ans. (c) Gross Investment]
w
(c) National Income ÷ Population

laiai ilai 15. The difference between value of exports and
adsaasal a
(d)
saaslaaNational Income
a saaslaai× laiPopulationa saaslaailai a saaslaailaiimportsasof aaslaa
ilai
goods and a s aslaailai is known
services
a a
i i
saaslaaasla as
a d
P Pa d [Ans. P a d
(c)Pa
National Income
d a d
P Pa ÷ Population]
d a
P Pad d a
P Pad d a
P Pad d a
P Pad d PaPdad
_______.
w
6. A country which has no economic relations (a) X–M (b) G+I (c) X × M
with iother countries iin termed as i (d) All the above i [Ans. (a) X–M]
laiai saaslaaOpen
i
la economy i
saaslaala (b) dClosed
i
saaslaaleconomy
a saaslaala
i i i
saaslaala
i
saaslaala
i
saaslaala
i i
adsaasal a(a) a a a a a a as
d d
PaPa (c) Planned PaP d
a d PaPa d PaPa 16. GNP
d d PaPat
da Market prices
d PaPa = GDP PataPaMarket
d d d d PaPdad
w
economy
Price + _______.
(d) Command economy
(a) Net Market Income
laiai alailai [Ans.
aailai (b) Closed aaeconomy]
ilai aailai(b) Net Factor aailaIncome
i aailai i i
adsaasal 7. d a s s
National
a a
Incomed a saa l saa
sprovides adacomprehensive
s l
d a s aas l
d a saasl from
d a saaslabroad d a saaslaala as
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a d a d
Pa ‘a’ and ‘b’ P Pa (d) Personal
(c) PBoth
a a d
P PIncome PaPdad
measure of _______ activities of a nation.
(a) Economic activity (b) Production activity [Ans. (b) Net Factor Income from abroad]
laiai i i
saaslaaConsumption
(c) la a
slala
i
saaactivity
i
saaslaala
i i
saa17. a i
slala NNP =d_______
i i i
saaslaala – Depreciation.
i i
saaslaala saaslaala
i i
adsaasal d a d a d a d a a d a d a as
d
PaPa (d) Industrial d
PaPactivity
a PaPa d PaPa d (a) PGNP
aPa d (b) GDP PaPa d PaPa d PaPdad
[Ans. (a) Economic activity] (c) NDP (d) All of these [Ans. (a) GNP]
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 31
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
laiai Share Your
laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
saaslSample,
Onlydfor
ilai
saaslaaBook
ai or
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a d
PaAll Leading a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
i i
saaslaala
iai
adsaasal d Sura’s
18. NNP at factor cost = NNP at Market Price – 29. Under social accounting method the economy
laiai _______ i i
saaslaala + Subsidies. saaslaala
i i
saaslaala
i i i i
saaslaala is divided aslaaila_______
sainto
i sectors. i i
saaslaala
i i
saaslaala
a d
P Pa (a) Direct P aPa d
taxes (b) d
P PCanons
a a of taxesa
P Pa d (a) four
a
P Pa d (b) two a
P Pa d a
P Pa d PaPdad
(c) Indirect taxes (d) None of these (c) several (d) three [Ans. (c) several]
30. _______ provides the social goods like public
laiai
ilai ila[Ans.
i
(c) Indirect ilai taxes] alailaihealth andaeducation i i i i i
adsaasal 19. a_______
d
a
sasa l a income
d a a l a
saissnever
a equalato
d sathe
a l a
sa nationaldadsasa d a saslaala etc.sasla
d a a alai d a saaslaala as
d
PaPa income. PaPa d PaPa d PaPa d
(a) PPrivate
aPa d
PaPa (b) Government PaPa d PaPdad
(a) Disposal Income (b) Percapita Income (c) Unorganised sector (d) None of these
m
(c) laPersonal Income [Ans. (b) Government]
laiai asailai aailai (d) GDP
asl[Ans.
Deflater
aslaailaIncome]
i ai i saasla
i i aailaindicated
i aailai
adsaasal d a sa d a sa (c) Personal
d a sa d a slala The
saa31. growth
________.d a alaan
of economy
d a saaslis d a saaslan
by as
P a d
Pa _______ Income
20.
a d
P Pa is the Pbuying a
Pa d
powerP P
a
of
a d a
P Pa d a
P Pa d a
P Pa d PaPdad
(a) Increase in general prices
co
nominal income. (b) Increase in national income
laiai (a)alaGrossilai Incomealailai (b) RealaIncome ilai ilai(c) Increase ilasavings i i i i
saaslaain
a a i
adsaasal d a sasaPercapita Income
(c) d a sasa (d) a
National
d
l a l
sasa Incomedadsasa (d) Increase d a in investment
[Ans. (b) Real Income] [Ans : (b) Increase in national income]
21. National Income expressed in terms of money 32. The per capita income of an economy can be
.
laiai at laailai
saas_______ prices.saaslaala
i i
saaslaala
i i i i
saaslaala calculated saaby ailai
sla________.
i i
saaslaala
i i
saaslaala
adsaasal
ks
d a d a d a d a d a d a d a as
d
P Pa (a) Constant
a a a d
P PPrice (b)a a d
P PMarket Price P Pa
a d a d
(a) PDividing
Pa GDP by PPa d
population
a a
P Pa d PaPdad
(c) Current Price (d) All the above (b) Dividing GNP by population
laiai

laailai = Incomesa=slaa_______.ila[Ans.
i (c) Current
laailai
Price] (c) Multiplying
laailai(d) Dividing laailaGNPiGNP by population
aslaailai of apeople i i
adsaasal 22.daOutput
saas d a a d a saas d a saas d a saas by
d a sanumber d saaslaala as
PaPdad
d
PaPa (a) Price PaPa d
oo d
PaPExpenditure
(b) a PaPa d aPa d
Pemployed PaPa d PaPa d
(c) Income (d) None of these [Ans : (b) Dividing GNP by population]
laiai [Ans. (b) Expenditure] 33. The total money value of afinal goods and
laiai asl=aailExpenditure.
ai aslaailai aslaailaiservicesaproducedaslaailai in the lailai i i
saaslaala
adsaasal 23. d a saasal = _______
Output d a sa d a sa d a sa d sa d a saascountry excluding
d a as
a d
P Pa (a) OutputP P(b) a a d a
P Pa d a
P Pa d a
P Pa
depreciation
d
is called a a d
P P________. a
P Pa d PaPdad
www.Padasalai.Net
Expenditure
ab
(c) Price (d) Income [Ans. (d) Income] (a) NDP (b) GDP
laiai 24. _______ laalai i reflects thelaailaeconomic
i welfare
laailai of the sa34.
(c) NNP a(d)
laailaiThe difference i GNP alaaila[i Ans : (a) NDP
lailabetween laa]ilai
adsaasal s as s as s as s s as NNP
s s and NDP is s a
____.
s as
PaPdadcountry. PaPdad
aa aa aa aa aPdaada aa aa
PaPdad PaPdad (a) PDepreciation PaPdad PaPdad PaPdad
(a) Personal Income (b) Percapita Income
(b) Current transfers from rest of the world
ur
(c) Disposal Income (d) All of these

(c) Indirect tax
laiai
adsaasal a saaslaa ilai a sa as[Ans.
laailai (b) Percapita
a saaslaailaIncome]
i
a saaslaailai(d) Net afactor iai
saaslaalincome from
a
laailai
saasabroad a
i i
saaslaala as
25.
a
P Pad dIncome earned
a
P Pad d through illegal
a
P Pad d activities are
a
P Pad d a d d
Pa : (d) Net factor a d d
P Pa income from a da d PaPdad
_______. P[Ans P Pabroad)
35. National income as commonly understood by
.s
(a) gambling and smuggling every one refers

laiai ilai extraction laaofilaliquor
i laailai laailai(a) GNP saslaa(b) ilai to ________. i i i
adsaasal d a
(b)
saas laaillicit
d a sa as d a saas d a saas d a a NNP asaasla
d alai d a saaslaala as
d
PaPa (c) gambling PaPa d (d)
PaPAll d
a of these PaPa d aPa
(c) PGDP d (d) NDP PaPa d [Ans P: a
(b) d
Pa NNP] PaPdad
[Ans. (d) All of these] 36. National income per person is used as an
w
26. _______ are excluded from national income. indicator of _______.

laiai (a)
ilai
lsaaCapital Gains lsaailai lsaailai lsaailai(a) standard i i
saaslaaoflaliving ofdapeople
i i
saaslaala
i i
saaslaala
adsaasal d a saa
d a sa a
d a saa
d a saa
d a d a as
a d
P Pa (b) Social Accounting a
P Pa d a
P Pa d a
P Pa d a d
Pa of the people
(b) Ppoverty a
P Pa d a
P Pa d PaPdad
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(c) Statistical Problems (c) the richness of people

(d) growth of iindustrialisationi
laiai
(d) None i of thesealaaila[Ans.
laailacare i (a) Capital
laailai
Gains]
laailai ai standard ai i i
adsaasal 27.daGreat
saas is required
d a sa s to calculate
d a saas_______. d as aas d a saaslaa:l(a)
[Ans
d a
laalliving
saasof d a saaslaala
of people] as
d
PaPa (a) CapitalPGains aPa d PaPa d d
PaPa 37. National d
PaPa income was d
Pacalled
Pa ‘nationalPdividend’ aPa d PaPdad
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(b) Social Accounting by _______.

(c) laDouble Counting (a) Irving Fisher (b) Alfred Marshall
laiai ilai l aailai l aailai l aailai(c) Samuelson laailai ilai Keynes alailai
aslaaJ.M.
(d)
adsaasal d a s
(d)
aa a
s Statistical dProblems
a sa as d a saas d a s aas d a saas d a sa s sa
aPdaada as
a
P Pa d a d
P Pa [Ans. (c)PDouble a
Pa d P a
P a d P Pa a d
Counting] 38. _______ is a measure of the total value of the
[Ans
P a
P d
a : (b) AlfredPMarshall] PaPdad
28. _______ Framework is useful for economists goods and services produced in an economy
laiai as well a ilaias policy makers. a ilai a ilai a ilaifor a year. alailai i i i i
adsaasal a(a)
a l
sasaSocial Accounting a a
sasa l
(b) a a
sasa l
Statistics a a
sasa l
a sasa a saaslaala a saaslaala as
PaPad d PaPad d Pa ad d d
Pa a d (a) PGNP
d
aPa d PaPa (b) GDP PaPa
d d d d PaPdad
(c) Capital Gains (d)PNone of these P (c) National income (d) Per capita income
[Ans. (a) Social Accounting] [Ans : (c) National income]
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 32
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
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laiai laiai laiai
laiai i i ilai
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saaslaalaIncome
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saaslaala
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adsaasal National
asaasal as
39. GDP = _______. 48. Transfer earnings is referred to ________.
laiai (a) l a i
GNP a i + Depreciationl a i a i l ai a i i i
saaslaala (a) Pension laailai
saaspayments to retired i i
saaslaalapersonsdadsaaslaala
i i
adsaasal d a saasal d a saasal d a saasal d a d a d a as
a
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a
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d earned
a
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d abroad a
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Income
a d
Pa paid as rent d
P Pato landlord P Pa
a a PaPdad
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(d) NNP – Depreciation (d) Medical payments made toi an employee ofi
laiai [Ans laail:a(b)
i G NP – aailai income searned
lNet laailai from saslaailai a company laailai saaslaala
i
saaslaala
i
adsaasal d a saas d a saas d a aas d a a d a s a
a s d a d a as
PaPa d PaPa d
abroad] PaPa d PaPa d [AnsPa:P(a)d
a Pension payments d
PaPa to retired d
PaPpersons]
a PaPdad
40. _______is the total value of output produced 49. The value of net national product will be more
m
and iincome receivedi in a year by idomestic than the value of net domestic product,laifiai
laiai aslaalai of a country.
residence aslaalai aslaalai aslaailai________. aslaailai aslaailai
adsaasal a sa a sa a sa a sa a s a a sa sasal
aPdaada as
PaPdad(a) GDP PaPdad PaPdNNP
(b) ad PaPdad P aPdad
(a) imports exceed exports P aPdad P PaPdad
co
(c) NDP (d) GNP (b) exports exceed imports
[Ans : i(d) GNP] (c) exportsaequal i i imports alailai
laiai i
saaslaaincome
la i i i
saaslaalaof calculating
i
saaslaalanationaldadsaaslaala
i i
saslaala
i i
saaslaala
adsaasal 41.dadThe method
d a d a (d) Pnone a
aPa of the above
d d a sasa d a as
PaPa income includes PaPa d aPa
the Pincome
d aPa
of Pthe
d PaPa d PaPa d PaPdad
____________. [Ans : (b) exports exceed imports]
50. Parallel economy refers to ________.
.
(a) afarmers only ai i
laiai ilai
aslabusinessmen aslala saaslaala
i i i i
saaslaala (a) agricultural
i i
saaslaala economy
i i
saaslaala
i i
saaslaala
adsaasal
ks
d a(b)
sa d a saonly d a d a d a d a d a as
a d
P Pa (c) servicePsector a d
Pa only a
P Pa d a
P Pa d a d
(b) Pindustries
Pa a
P Pa d a
P Pa d PaPdad
(d) factors of production (c) banking activities
[Ans l:a(d) ilai factors ofaproduction] (d) black money i in circulation
laiai laa ilai laailai laailai laa:ila(d) i i
saaslaala in circulation]
i i
saaslaala
adsaasal 42. d a saas
_________ employ
d a saas afactors of
d a s s
production
a to
d a saas d [Ans
a s a
a s blackd money
a d a as
PaPdad
PaPa d PaPa d
produce the goods and services.
oo
PaPa d d
PaPa 51. _______ d
PaPa is measured d
PaPbya using threePmethod.
aPa d
(a) Consumer (b) Business sectors (a) National Income
laiai ilai holds alailai (d) Farmers (b) Domestic Income
adsaasal a
(c)
saaslaaHouse a sa s a a saaslaailai a saaslaailai(c) Per capita
a s aslaailIncome
a
ai
a s(d)
a
ilai
aslaaPersonal Income
a
i i
saaslaala as
d
P Pa
a d a d d
P Pa [Ans : (b) d d
P PBusiness
a a sectors]
a d
P Pa d a
P Pad d a d d
P Pa (a) National a da d
P PIncome] PaPdad
www.Padasalai.Net
[Ans.
ab
43. ________ is not the correct indicator for the

52. Secondary sector is _______
livingi standards of the people.
laiai saaslaala (a) Industry s(b)
aslaaTrade
i i i i i i i i i ilai i i
adsaasal a saaslaaPer
(a) a saaslaala
la capita income a saaslaala a a saaslaala a a a saaslaala as
d d
PaPa (b) National d d
PaPincome
a PaPad d d
PaPa d (c) PAgriculture
d
aPa d PaPa (d) Manufacture
d d PaPad d PaPdad
[Ans. (a) Industry]
(c) Both
ur
53. Tertiary sector is _______

laiai (d) ilai of the above
lsaaNone lsaailai [Ans lsaa:il(c)
ai Both] saslaailai(a) Industry i i ilai i i
adsaasal 44. d a saa
According to a
the
d saa
year 2001, a s
Indian
d aa
per capita
d a a d a saaslaala d a aaslaaBanking
s(b) d a saaslaala as
a
P Pa d a
P Pa d a
P Pa d a
P Pa d aPa d
(c) PAgriculture a
P Pa d a
P Pa d PaPdad
income is _______dollar. (d) Import and Export [Ans. (b) Banking]
.s
(a) 520 (b) 460 (c) 240 (d) 900

laiai a ilai a ilai a i 460] a54.
il:a(b) i iGDP = _______ i i i i i i
adsaasal a a
sasa l
a a
sasa l
a[Ans
a
sasa l
a saslaala a saaslaala a saaslaala a saaslaala as
d d
aPa In _______Pmethod,
45.
P d
aPa d d d
PaPa of GDPPare
the measures
d
aPa d (a) PGDP
aPa at MarketPPrice
d d aPa + Net factor
d d PaPaincome
d d PaPdad
calculated for adding total value of output from abroad
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produced by all activities during a year. Nominal GDP

laiai lsaailai lsaailai lsaailai lsaailai(b) GDP s=aslaailai × i100
i i i
adsaasal d a(a)
saa Expenditure d a saa (b) dIncome
a saa
d a saa
d a a Real GDP d a saaslaala d a saaslaala as
a d
P Pa (c) Product a
P Pa d a a
P PAll
(d)
d
the aboveP P
a a d a
P Pa d a
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P Pa d PaPdad
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(c) GDP = GNP + Net factor income from

[Ans : (c) Product] abroad
laiai 46. Ina___________
a i i method,a i i the measures a ilaiof GDP alailai(d) All theaabove i i i i i i
adsaasal a sasa l l a
a a
sasa l l a
a a
sasa l
a sasa a saslaala a saaslaala a saaslaala as
PaPa are calculated
d d PaPaby adding all
d d PaPthe
da expenditures
d d
PaPa d [Ans. d
PaP(c) d
a GDP = GNP d d
PaPa+ Net factor PaPad d
income PaPdad
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made in the economy. from abroad]

(a) Income (b) Expenditure 55. Disposable income = _______.i i
laiai (c)
ilai
lsaaProduct lsaailai (d) Allsthe aslaaiabove
lai aslaailai aslaailai saaslaala
i i
saaslaala
adsaasal d a saa
d a saa
d a a d a sa d a s a a
Nominal
d GDP d a as
a
P Pa d a
P Pa d [Ans a
P :P(b)d
a Expenditure] a
P Pa d a d
Pa deflater = P Pa
(a) PGDP
a d a a
P×P100 d PaPdad
47. GDP indicates productive capacity for an Real GDP
_______. i i(b) GNP –aDepreciation allowance
laiai ilai
saaslaaeconomy
i i
saaslaala (b) demployment saaslaala
i i
saaslaala (c) GDP laailai i i
saaslaala
i i
saaslaala
adsaasal d a(a) d a a d a d a s–asDepreciation d a d a as
d
PaPa (c) income PaPa d d
PaPpopulation
(d)
a PaPa d PaPa d PaPa d PaPa d PaPdad
(d) Gross National Product
[Ans : (a) economy] [Ans. (d) Gross National Product]
laiai i i
saaslaala
i i
saaslaala
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saaslaala 33
i i
saaslaala
i i
saaslaala
i i
saaslaala
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saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
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laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
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laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
i i
saaslaala
iai
adsaasal d Sura’s
Part - D (iv) Care must be taken to avoid double counting.
laiai saaslaala in dadsaaslaala (v) The
i i i i i i i i aslaailaof i i aailai
savalue
i the final product
adsaasal A nswer
a saaslaalathe following
a saaslaala questions
a a a saaslaala is derived
a saaslby as
a d
P Pa d a d
P Pa d a
P Pad d a
P Pa a the
P Pad d summation aof
d
P Pa all
d the valuesaadded
P Pad d in PaPdad
one page 5 Marks the productive process.
(vi) To avoid double counting either the value
laiai 1. Discuss ilai the method ilameasuring the ilaNational ilai of the laailai output should iai taken in toathe i i
saasfinal saaslaalbe
a a i a i a
adsaasal a a l
sasa by Income
Income a a l a
sasMethod. a a
sasal
a a l
sasa a a a saslaala as
d
PaPa d d
PaPa d PaPad d d
PaPa d PaPestimate
d
a d of GNP. d
PaPa d d
PaPa d PaPdad
Ans. (i) Income method approaches National (vii) In India the gross value of the farm output
m
Income from the distribution side. is obtained as follows.
laiai (ii) ai i
saasal Nationaldaincome
l a la i i
saasal is calculated
a saasaby
l a i i
l adding asasal
a l a i a i (1) salThe aailaioutput of seach
aslaailcrop
ai is measuredsaaslaala
i i
adsaasal d a d a d a d a a sby multiplying
d a athe area shown d aby the as
a
P Pa d up allPthea d
Paincomes generated a d
P Pa in the course a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
average yield per hectare.
co
of producing national product.
(2) The total output of each commodity
laiai ilaSteps involved i: ilai ilai iai i i i i
saaslisaalvalued at market
saaslaalaprices. dadsaaslaala
l a i l a ai l a l a
adsaasal a sasa (1) Factor
a a sasincomes
a a l areagrouped
sasa underdadsasa
a a a a as
d
PaPa d d d
aPa income,Pcapital
Plabour d d
aPa income Pand aPa PaP(3)
a The net value
d d PaPaof the agricultural
d d PaPa output PaPdad
mixed income. is measured by making deductions
for the cost of seed, manures and
.
(2) National i income is calculated as
laiai aslaailai lai income
aslaafactor laailaneti i i
saaslaala aailai
saaslfertilisers etc.,sala i i
sala in these saaslaala
i i
adsaasal
ks
a sa domestic
a sa a saaplus
s factor a a a a a as
a d
P Pa d a d
Pa d
Pincomes a d d
P Pa In short, P Pa a d d a (4)
P Pad d Net value of
a
P Padthe
d output a
P Pad sectors
d PaPdad
from abroad. is derived by making deductions for
Y = w + r + i + π + (R–P) cost of materials used in the process
laiai l a ilai l a ilai l a ilai l a ilai
sasof
l aailaiproduction ilai depreciation
saaslaaand saaslaala
i i
adsaasal a sasa w
a = a wages
a
sasa r = arent a
sasa a a
sasa a a a a as
d d d d PaPa allowances
d PaPaetc., from gross
d PaPvalue
d of PaPdad
PaPa d i
d
P=aPainterest
oo d
πaP=a profits
P PaPa d d d a d
output.
R = Exports P = Imports (5) For example, value of cotton enters
laiai i (3) This method i is adopted for iestimating i aailai of yarn assacostlaailaand i i
saaslvalue
a i a i a i a i i value of yarn
adsaasal a
l
saasal a
the a
l
saasal
contributions
a
ofa sthe
a
l l a
asaremaining a
l
saasal a
a a a sof a saaslaala as
a d
P Pa d a d d
Pa viz.
Psector, a
P Pad d a
P Pad d a
P Pad d in cloth and
a
P Pad that
d cloth inagarments
P Pad d PaPdad
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(4) Data on income from abroad (the rest be calculated.

laiai i i of the world ilai sector or foreign ilai sector) a3.lailaiDiscuss theallimitations i i ai i Income
ofsaNational i i
adsaasal d a a
sasal a l a
ared
a l
obtained
a
a
sasa from d the
a a l
sa
a
saaccount of thed a sasa d a sasaala d a a slala d a saaslaaasla as
PaPa d aPa d
Pbalance of payments
d
PaPa of the country. PaPa d an index d
PaPa of economic d
PaPwelfare.
a PaPa d PaPdad
Items not to be included : Ans. (i) The economic welfare depends upon
ur
(1)lailaTransfer payments the composition of a goods and servicesi i

laiai asa ini estimation aslofaailai are not stoalbe aailaincluded
i aslaailai aslaailai aslaailai saaslaala
adsaasal d a sa d a sa national dincome.
a a s d a sa provided.
d a sa d a sa d a as
a d
P Pa (2) The receipts a d
P Pa from thePsale a d
Pa of second hand a
P Pa d a a d
(ii) P PHigher GDP P
a d a
Pa greater environmental
with P Pa d PaPdad
goods should not be treated as part of national hazards such as air, water and soil
.s
laiai i income. i i i pollution ai will

i be littleaeconomic
aiai welfare.
adsaasal aItems
i
saaslaalato be included a saaslaal:a
i
a saaslaala
i
a
i
saaslaala (iii) The a slala
saaproduction a swarslalgoods a aslaailai
sshow as
d d
PaPa (1) Imputed d d
PaPavalue of rent for d
PaPself
a d PaPad d PaPad d PaPaof
d d a will
PaPad d a
PaPdad
occupied house the increase in national output but not
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or offices is to be included. welfare.

laiai (2) lailaImputed valuelof aailaservices provided aailabyi owners salaailai(iv) An sincrease
adsaasal a saa a i
s of production a saa i
s unit (family a s a l
labour)
a s is to be a a s a aaslaailai in per a
ai i
saacapita
slala income a may
saa ai i
slala as
a d
P Pa d a
P Pad d a
P Pad d a
P Pad d a d d
P Pbea due to employment a
P Pad d a
of women
d d
P Pa and PaPdad
included.
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2. Discuss the methods of measuring the child0ren or forcing workers to work

National for long hours. But it will not promote
laiai laailai Incomesaby laaProduct
ilai Method. laailai laailai laailai laailai saaslaala
i i
adsaasal Ans.
d a s as
Product
a Method d a a: s d a saa s d a saas d a saa
economics welfare.
d a saa s d a as
PaPa d PaPa d PaPa d PaPa d aa d aPa d PaP a d PaPdad
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(i) Product method measures the output of the (v) P PTherefore the P physical quality of life index
country. It is also called inventory method. (PQLI) is considered a better indicator of
laiai (ii) i It is obtained for i the entire economy i during i economic i i i i i i
saaslaala welfare.dadsaaslaala
a i a i a i a i
adsaasal a
l a
saasal a year. dadsaasal l a
a
l
saasal a
a
l
saasal a
a a saaslaala as
a d
P Pa d a
P Pa a
P Pad d a
P Pad d (vi) a
P Pad
It d includes standard
a
P Pa of a
P Pad
living,d life PaPdad
(iii) The value obtained is actually the GNP at expectancy at birth and literacy.
market prices.
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala

PaPa d PaPa d PaPa d PaPa d PaPdad
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 38
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
laiai Share Your
laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
saaslSample,
Onlydfor
ilai
saaslaaBook
ai or
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saaslaala
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P Pa d a
P Pa d a d
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P Pa d a
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saaslaala
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7
laiai saaslaaC
saaslaala saaslaala saaslaala saaslaala saaslaala
adsaasal a d
P Pa
a
d asasa
PaPdad a d
P Pa
a
d
International
a d
P Pa
a
d a d
P Pa
a
d a d
P Pa
a
d a d
P Pa
a
d as
PaPdad
Economics
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
m
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
co
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
PaP a d
CHAPTER d
SNAPSHOT
PaPa PaPa d PaPa d PaPa d PaPa d PaPa d PaPdad
.
7.1 Introduction 7.8 Balance of Trade Vs Balance of Payments
laiai lsaailai lsaailai lsaailai ai i
slala aslaailai of Trade ai i
slala
i i
saaslaala
adsaasal
ks
7.2 a saa Meaning of a aa
International
s a saa
Economics a saa 7.8.1 dadsBalance
a a saa(BOT) a as
a d d a d d a d d a d d a a d d a d d PaPdad
Pa Subject matter
P7.3 P Pa of InternationalP Pa Economics P Pa P Pa Balance ofPPayments
7.8.2 Pa P Pa
(BOP)
7.4 Meaning of Trade 7.8.3 Components of BOPs
laiai laailai Internal aailai
saaslTrade
i i
saaslaala
i i
saaslaala aslaailai of Payments i i
saaslaalaDisequilibrium
i i
saaslaala
adsaasal d a saas7.4.1 d a d a d a 7.8.4 asBalance
d a d a d a as
PaPdad
d
PaPa 7.4.2 P aPa d
International PaPa
Trade
oo
d PaPa d d
PaPa Types of BOP
7.8.5
d
PaPaDisequilibrium PaPa d
7.4.3 Differences between ‘Internal 7.8.6 Causes for BOP Disequilibrium
laiai i i
saaslaala Trade’ ai i
slalaInternational
saaand
ilai
saaslaaTrade.
i i
saaslaala aslaailai to correct
7.8.7 sMeasures ilai
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7.5.1 The Classical Theory of 7.9 Exchange Rate

laiai i i i i i i i i 7.9.1 Meaning i i of Foreign Exchange
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7.5.4 Modern Theory of International
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7.9.5 Determination of Equilibrium

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and Modern Theory.

7.9.7 Types of Exchange Rates
laiai 7.6 aGains i i from International
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i i Types of Terms
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saaslaala - XII
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saaslaala
i i
saaslaala
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saaslaala
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adsaasal d Sura’s
Balance of Trade Vs Balance of Payments

laiai i i
saaslaala
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saaslaala
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saaslaala
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saaslaala
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adsaasal
Measures to Correct Bop Disequilibrium
a a a a a a a as
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Concept Map
7. International economics
Definition of Equilibrium Exchange Rate

Ricardo Theory of Comparative

Comparison Between Classical
as
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ab
Definition of FOREX
Rate of Exchange
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Theories of International Trade
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Meaning of Foreign Exchange (FOREX)

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saaslaala
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Introduction
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Meaning of International Economics
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Internal Trade
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Difference & between Internal
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Objectives of FDI
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saaslaala
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PaPa d PaPa d PaPa d PaPa d PaPa d PaPa d PaPa
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laiai i i
saaslaala
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saaslaala
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saaslaala 112
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adsaasal International
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laiai i i i i
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saaslaala
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Balance of Payments : The balance between the values of goods and services exchanged between two
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: It means official reduction in the value of a currency in terms of gold or other
P P P P P PaPdad
www.Padasalai.Net
ab
currencies.
laiai i i
saaslaala
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saaslaal:a The currency
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saaslaalof
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saaslaala
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saaslaala
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saaslaala
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Foreign Direct : The investment made by a multinational enterprise in a foreign country and
laiai Investment
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Foreign Institutional : Foreign Institutional Investment is an investment in hedge funds, insurance

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Portfolio : Foreign entry of fundsPinto a nation. P

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saaslaala 113
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P Pa d a
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laiai i i
saaslaala - XII
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saaslaala
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adsaasal d Sura’s
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laiai aslaalai aslaailai advantage. aalai
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goods, the country would specialize in the production and export of those
.
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laiai laiai laiai
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ks
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International Trade : A capital abundant country will export capital intensive goods. While the labour
abundant country will export ithe labour intensive
i goods.
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www.Padasalai.Net
ab
Foreign Direct : An investment in a foreign country that involves some degree of control and
laiai alailai laailai participation i i
saaslaalain management.
i i
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1. Net Barter Terms of Trade Tn a = (P / P ) × 100

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3. Income Terms of Trade Ty = (Px / Pm) Qx

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5. Double Factoral Terms of Trade T = (Px / Pm) (Fx/ Fm)
ff
laiai ai i i i
saaslaala(BoP) Account
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saaslaala 114
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saaslaala
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8. Favourable BoP ai i R i/ Pi > I

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Part -A 6. Exchange rates are determined in
laiai i i
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adsaasal MaPultiple
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.
laiai
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_______ aslaailai Aug-'21;aSRT aslaa&ilaMay-'22]
i aslaailai(c) stockasmarket
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as
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(c) Inter-regional (d) Home 7. Exchange rate for currencies is determined by
laiai [Ans. (a) supply and demand under the system of
laiai a ilai a ilExternal]
i a ilai i i i i i i
adsaasal d a a
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[Ans. (b) Flexible exchange rate]
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(d) All of the above.[Ans. (d) All of the above.]

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ai ai i
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4. In general, a primary reason why nations concept of single factoral terms of trade?
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laiai
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laiai i i
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12. If there is an imbalance in the trade balance 20. Benefits of FDI include, theoretically
(more
laiai saaslaalaimportsdathan saaslaaexports), it can beilareduced
i i ilai i i i ilai i i i i
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sain d a saaslaala
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(b) increasing export duties
laiai (c)ala stimulating
ilai exports
laailai laailai laailai(c) Increased laailemployment
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saaA saaslaa.la
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.
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laiai
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iai
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(a) Transactions of goods are recorded. mainly related to foreign trade.
(b) Transactions of both goods and services are 22. Define International trade. [PTA-4]
laiai ilai
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laiai [Ans.
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Tourism
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(a) merchandise trade account (iii) It is also called as ‘external trade’ or

(b) aservices accountai i ‘foreign trade’
laiai i i
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17. Cyclical disequilibrium in BOP occurs economic integration.
ur
because of (ii) The term

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elasticity of demand is different. 24. What is the main difference between Adam
(c) long-run changes in an economy
.s
Smith and Ricardo with regard to the

laiai (d) ilai (a) and (b).
Both ilai ilai ilaiemergenceaof iai i i i i
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laiai l i a i l a l a i l a i a i l a i a i
saaslaala
i i
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(c) the purchase of bonds or stock issued by a
laiai ilai company
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laaoverseas laailai laailai International laailatrade
i is theaicomparative
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i i
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laiai lsaailai byaalatextile
ilai company l aailoverseas]
a i laailai two countries laailai i i
saaslaaiflathe absolute
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Foreign direct d a sa s a
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d a saas d a saas d a d a as
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India [Aug-'21; July-'22] beneficial when one absent but there is
(a) Banking country produces comparative cost
laiai (b) ilai
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d PaPa d d PaPad d PaPad d aPa d
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laiai i i
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i i
saaslaala
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saaslaala
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saaslaala
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25. Define Terms of Trade. foreign aid, external borrowings and foreign direct
laiai ilai
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i i
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export prices to import prices. (iii) International Cartels and Trade Blocs :
laiai i i
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i i
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What
a you mean
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ofaaPayments?
s a s
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National
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d P aPdad
MQP - '19]
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(iv) International Financial and Trade
Ans. (i) Balance of Payments (BoP) is a systematic Regulatory Institutionsi: i
laiai laailarecord
i of saasla ilai
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.
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whilePaPpayment to aPforeign Pa countryPisPaa P Pa
economics. P Pa P Pa
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laiai 27. aWhat laailaisi meant by laailai
Exchange Rate? laailai ai i
slala trade d
aailai
saaslModern
with Theory
iai
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i i
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a a a d a d a as
PaPdad
d
PaPa PaPa d d
oo
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[PTA-2 PaPa d PaPa
trade. d PaPa d PaPa d
Ans. FOREX refers to foreign currencies. The Ans.
laiai mechanism
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currency systems is called FOREX system.
ab
It covers methods of payment, rules and 1. The Classical The Modern

laiai i i i i i i i i theory explains i i the theory i explains
i thealailai
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regulations
d saaslaala and da
of apayment saasla
the institutions
ala d a saaslaala phenomenon
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laiai laailai lailai lailai i i
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laiai i i
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laiai i i
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laiai i i i i ilai lsaalai i factor alaailai
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s alsaawithin a s alsaala s a s a lsaala(labour)
asas as
a d
P Pa d a d
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Pcountry PaPdad
aa
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aa
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aa
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(B) Modern Theory (ii) Endowments
(B) Internal (ii) 1776
(C) Factor i (iii) i Unrealistic
laiai laailaTrade
i laailai laailai laailai laalai i
aslaalaInternational i i
saaslaala
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co
(a) A-(iv), B - (iii), C - (i), D - (ii) (b) A-(ii), B - i(iii), C - (iv), D -i (i)
laiai (b) ilai B - (i), Cal-a(iii),
laaA-(ii), ilai D - (iv) alailai laailai laalai a i
sla-la(i)
i i
saaslaala
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A-(iii),
aa s
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(ii),
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(d) A-(i), B - (ii), C - (iii), D - (iv) (d) A-(i), B - (ii), C - (iii), D - (iv)
.
laiai lailai (a) [A-(iv), laiai laailaD i - (ii)] alaailai Ans. (c) i [A-(iii),
la ai
B - (iv),
laiai
C - (ii), D - (i)]i i
la a
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cloth false.
laiai i i i i
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saaslaala
i
saa1.a ExchangesControl:
i i aslaailai i i
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i i
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oo
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(iii) PaPa d aPa d d d
intervention in the forex market.
comparative cost two or more (ii) It is popular method employed to influence
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saaslaala
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saaslaala countries i i
saaslaala
i i the balance
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ab
published (a) Both (i) and (ii) are true

laiai Codes i i i i i i i i(b) Both (i)aland i i (ii) are false i i i i
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ur
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Ans. (b) [A-(iii), B - (iv), C - (i), D - (ii)] (i) Improvement in the techniques of
production
.s
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saaslaalaProduction.
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(C) Scarce factor (iii) Abundant [Ans. (c) (i) is true but (ii) is false]
factor
laiai laailai laailai i i
saaslaala and dadsaa3. ai i(i) Internal
slala
i i refers atolaithe
atrade
slala services
i exchangealaaofilai
sala political
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(D)
s Based on
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Ricardian Theory P Ohlin P P P P
geographical boundaries of a nation.
Codes :i (ii) International trade also known as
laiai l a i a l a i a i l a i a i la i a i domestic ilai .
saaslaa‘trade’
i i
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i i
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l
saasaA-(iv), B -d a saasCal- (i), D - d(ii)
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(b) A-(i), B - (ii), C - (iii), D - (iv) (b) Both (i) and (ii) are false
laiai (c) laA-(iii),
i i B - (i), C - i (ii),
i D - (iv) i i i i(c) (i) is true but
i i (ii) is falsealailai i i
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d DaP- a(i)
d d PaPad d (d) P(i) d
aPis d
a false but (ii)Pais d d
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Ans. (a) [A-(iv), B - (iii), C - (i), D - (ii)] [Ans. (a) Both (i) and (ii) are true]
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 126
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d PaPdad
laiai Kindly
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laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
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laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
i i
saaslaala
iai
adsaasal d Sura’s
(i) Nominal Exchange Rate : Then it could be said that the USD and
laiai i i
saaslaala Exchange aailai 75 salaailai
saaslRate
i i
saaslaala Indian ilai
saaslaarupee are at aailai
saaslpurchasing power i i
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a
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P Pa d P1 P d a
P Pa d a d
P Pparity.
a a
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This is the bilateral nominal exchange rate.
3. Explain the disadvantages of FDI.
laiai (ii)
alaailaReal
i ExchangealaailRate
ai : alaailai ai i ilai aailai to flow to laailai
adsaasal asas asas asas a saaAns. a saaslaaforeign
slala (i) Private a saasltends
capital a saasthe as
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a profit areas d d
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the PaPdad
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sectors.
m
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(ii) The technologies broughti in by the foreigni
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i lsaailai lailai investor l aailamayi not bealappropriate
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f market etc.
co
e = Nominal Exchange Rate
(iii) Foreign investment, sometimes, have
laiai i (2)
i If a pen ilcosts
i `50 in aIndia ilai and it alailai unfavorable i i aslaailathe
i Balancealaaofilai
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sasa l a l a
a a
sasa l a a
a sasa la
a sasa a saaslaala effect a saon asas as
d
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aPa 5 USD in Pthe
d d aPaUS.
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of PaaPcountry
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the drain of foreign exchange by way of
75 × 5 royalty, dividend , etc. is more than the
.
∴ Real Exchange Rate= =7.5
laiai l a i a i l a i a i l ai ai l a i a i investment i i
saaslaala madedby sathe
ilai
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50
ks
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rate is equal to
a
P P1,a d a
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the national politics.
the currencies are at purchasing (v) Foreign investors sometimes engage in
laiai i i power parity.
ilai ilai ilai unfair ilai unethical trade i i i i
adsaasal d a a
sasa l a l a
d a a
sasa l a
d a a
sasa l a
d a a
sasal a
d a saaslaaand d a saaslaala practices.d a saaslaala as
PaPdad
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USD, then the real exchange rate with encouraging foreign investment.
laiai lsaailai
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0l.a 66ila×i 75
3
a ilai a ilai(vii) the
Foreign iinvestment in some
a
destruction i or a
weakening
ilai cases
of
leads toi
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d a saasl a d a saaand
slala as
a
P Pa d a
P Pa 50 a
P Pa d a
P Pa d a a d
P Pmedium enterprises.
a
P Pa d a
P Pa d PaPdad
www.Padasalai.Net
2
ab
4. Draw the flow chart for correction of Balance Payment Disequilibrium.

laiai lailai i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
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saaslaala
adsaasal Ans. a
dadsasa d a d a d a d a d a d a as
PaPa PaPa d d
PaPa of BalancePof
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ur
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saaslaala
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saaslaala
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saaslaala
i i
saaslaala
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saaslaala
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saaslaala
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P Pa Automatic
d Correction
a
P Pa d a
P Pa d a
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P Pa d II. Deliberate
a
P Pa d Measures a
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1. Price adjustments
.s
2. Interstarate i of adjustments
laiai lailaadjustments i i
saaslaala
i i
saaslaala
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i i
saaslaala
i i
saaslaala
i i
saaslaala
adsaasal a aa
3. dIncome
s s d a d a da d a da d a as
a d
P3.aPCapital flowsP P
aa d d
PaPa Monetary Measures
Miscellaneous PaPa
Measures
d PaPdad
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1. Monetary Contraction 1. Foreign Loans

laiai i i
saaslaala
i i
saaslaala
i i / revaluation
saaslaala
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4. Incentives for Foreign remittances

laiai i i i i ilai i i 5. Import
lailai Substitutionlailai lailai
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Measures asaasa asaasa asaasa as
PaPa d PaPa d PaPa d PaPa d PaPdad PaPdad PaPdad PaPdad
w
laiai i i
saaslaala
i i
saaslaala
i i
saaslaala
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saaslaala
i i
saaslaala
i i
saaslaala
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saaslaala
a
P Pa d Export Promotion
a
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P Pa d a
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P Pa d Import
a
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1. Abolition / Reduction of Duties 1. Import Duties
laiai 2. Export iSubsidies
i i i i i i i 2. Import i i Quotas alailai i i
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P3.aPExport
d
a d Incentives
d
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PaPa d PaPa3. Import Prohibition
d d PaPdad d
PaPa d PaPdad

laiai i i
saaslaala
i i
saaslaala
i i
saaslaala 130
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
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laiai Kindly
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laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
saaslaais
This aailai
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saaslaala
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saaslaala
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saaslaala
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saaslaala
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saaslaala
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saaslaala
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8
laiai saaslaaC
saaslaala saaslaala saaslaala saaslaala saaslaala
adsaasal a d
P Pa
a
d asasa
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International Economic
a d
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a
d a d
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a
d a d
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a
d a d
P Pa
a
d a d
P Pa
a
d as
PaPdad
Organisations
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i i
saaslaala
m
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saaslaala
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saaslaala
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saaslaala
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i i
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saaslaala
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saaslaala
a
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co
laiai i i
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.
laiai i i
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saaslaala
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saaslaala
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saaslaala
i i
saaslaala
i i
saaslaala
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saaslaala
adsaasal
ks
a
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P Pa d a
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laiai i i
saaslaala SNAPSHOT
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
adsaasal CHAPTER
d a da d a d a d a d a d a as
PaPdad
PaPa d PaPa d PaPa
oo
8.1 Introduction 8.4.3 Achievements of WTO
laiai i i
8.2 aInternational
saslaala
Monetaryi i Fund. alailai
saaslaala
i i aslaailaiand India
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adsaasal d a d a asasa a a a a as
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Objectives of IMFPaPdad a d d
P Pa 8.5 Trade a
P PaBlocks a
P Pad d a d
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ab
8.2.2 Functions of IMF 8.6 South Asian Association for Regional

laiai 8.2.3
laailai Facilities offered
i i by IMFalailai i i Co-operation i (SAARC)
i i i i i
adsaasal d a saas8.2.4 a saaslaala of IMF
Achievements
d asasa a saaslaala a saaslaala a saaslaala a saaslaala as
PaPa d PaPa d PaPdad d
PaPa d 8.6.1 d
PaPa ObjectivesPofaPa
d d
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d PaPad d PaPdad
8.2.5 India and IMF 8.6.2 Functions of SAARC
ur
8.3 International Banki for Reconstruction and 8.6.3 Achievements of SAARC

laiai laailai aslaalai or World aslaailai aslaailai aslaailai i i
saaslaalaAsian Nations
i i
saaslaala
adsaasal d a saasDevelopment
d a s
(IBRD)
a d a saBank. d a sa8.7 a s
Association
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.s
8.3.2 Functions of IBRD 8.7.1 Objectives of ASEAN

laiai laailai Achievements i i
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adsaasal d a saas8.3.3 d a d a saasBank d a saas 8.7.2 d a saa
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8.8 BRICS
w
8.4 World Trade Organization 8.8.1 Objectives of BRICS

laiai laailai Objectives i i
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laiai i i
saaslaala
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saaslaala
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saaslaala
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saaslaala
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saaslaala
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[131]
laiai i i
saaslaala
i i
saaslaala
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saaslaala
i i
saaslaala
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saaslaala
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saaslaala
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saaslaala
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laiai laiai laiai
laiai i i ilai
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laiai i i
saaslaala - XII
i i
i i
saaslaala
i i
saaslaala
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saaslaala
iai
adsaasal d Sura’s
laiai i i
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international economic organisation
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. (SAARC)
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Objective of ASEAN
Functions of ASEAN
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SARRC : The South Asian Association for Regional Co-operation (SAARC)
laiai is an organisation of South Asian nations, which was established on
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saaslaala as
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co-operation with other developing countries.
laiai l ailai l a ilai ai i
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ilai
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.
laiai lsaailai lsaailai economies iai
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sreserve aslaailai by IMF.
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Trade related : TRIPs include copyright, trade mark, patents geographical indications,
laiai Intellectual i i property i i industrial ldesigns
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agreement agreement between more than two countries but not many.
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laiai ilai
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Part - A 9. The first ministerial meeting of WTO was held
at
laiai Multiple
alaailai ChoicealaaQ
ilauestions
i alaailai ilai(a) Singapore i i ilai i i
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laiai lsaailai lsaailai lsaailai lsaailai_______ years lsaailai lsaailai saaslaala
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(d) Doha Conference [Ans. (b) 3]
Which of the following is not the member
laiai ala ilai [Ans. (c)aBrettonlaailai WoodssaConference] laailai 11.
laailai laailai laailai laaofilai
adsaasal s s a
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a s
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as SAARC? s
aPdaada
as aas as aas a
[QY-'19]
s as
P PaPdaMonetary Fund
PaPdadis havingPits (a) PPakistan PaPdad(b) Sri Lanka PaPdad PaPdad
headquarters at
(c) Bhutan (d) China
.
[Govt. MQP & QY - '19; Sep-2020; SRT-'22]
laiai a i i ai i a i i a i
i a i i i[Ans.
i (d) China] i i
adsaasal (a) l a
saasaWashington
l sD.C.l
asal a (b) New l
saasYork
al a l a
sal SAARC l a
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saaslaala
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[Ans. (a) Washington D.C.]
[Ans. (a) 2]
laiai 3. IBRD ilaisi otherwisealcalled
ai i i i 13.i iThe headquarters i i of ASEAN isilai i i
adsaasal d a saaslaaIMF
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PaPdad
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laiai (d) i
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a i i Corporation a i i 14. a i The
i term BRIC a i was
i coined ina i i [Sep-2020] i i
adsaasal a
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4. The other name for Special Drawing Rights is (c) 2008 (d) 2010 [Ans. (a) 2001]
(a) Paper 15. ASEAN was created in [PTA-6]
laiai a ilai gold alailai [PTA-4; HY-'19; a ilaJuly-'22]
i a ilai(a) 1965 ala(b) ilai 1967 a ilai i i
adsaasal d a (b)a l
sasaQuotas dadsasa d a a
sasa l
d a a
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d a sasa d a a
sasa l
d a saaslaala as
d
PaPa (c) Voluntary PaPaExport Restrictions PaPa d PaPa d (c) P1972
aPa d (d) 1997 PaPa d [Ans.Pa(b) d
Pa 1967] PaPdad
(d) None of these [Ans. (a) Paper gold] 16. The Tenth BRICS Summit was held in July
ur
5. The organization which

i i provides long
i i term 2018 at
laiai iai
saaslaalis saaslaala
i i
saaslaala [PTA-3]dadsaaslaala (a) Beijing saaslaala
i i ilai
aslaaMoscow i i
saaslaala
adsaasal d a loan d a d a d a d a s(b)
a d a as
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[Ans. (c) Johannesburg]
.s
(b) International Monetary Fund

laiai i i i i i i 17. i New
i Development i i Bank is iassociated
i withi i
adsaasal d a saaslaaWorld
(c) la Trade
d a aaslaala
sOrganisation d a saaslaala d a saaslaala d a saaslaala d a saaslaala[PTA-5; May-'22]
d a saaslaala as
d
PaPa (d) BRICSPaPa d PaP(a)
[Ans. d
a World Bank] PaPa d aPa
(a) PBRICS
d
(b) WTO PaPa d PaPa d PaPdad
6. Which of the following countries is not a
w
(c) SAARC (d) ASEAN [Ans. (a) BRICS]

member of SAARC? i i Which of the following does
laiai
adsaasal a
l a
saasaSri
(a)
i a i
l Lanka a
l
saasal a a l
saasal
(b) dJapan
a
a i a i
a
18.
l a i a i
saasal ‘Six dialogue a
l a il a
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i
a asailnot
l a
saASEAN? ai come under
a
i i
saaslaala as
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P Pa d a a d
P PAfghanistan a
P Pad d a
P Pad d a
P Padof
d a[SRT-'22]
P Pad d PaPdad
(d) (a) China (b) Japan
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[Ans. (b) Japan] (c) India (d) North Korea

laiai 7. International i i Development i i Association ilai is an alailai ilai [Ans. ilai North Korea] i i
adsaasal a a
sasa l a l a
a a
sasa l a l a
a a
sasa l a
a sasa a a
sasa l a
a saaslaa(d) a saaslaala as
PaPa affiliate of PaPa
d d d d PaPad d d
PaPa 19. SAARC
d d
PaPa Agricultural
d d
PaPa Information
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d PaPdad
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(a) IMF (b) World Bank (SAIC) works as a central information

(c) SAARC (d) ASEAN institution for agriculture related resources
laiai lsaailai lsaailai [Ans. (b)sWorld lsaailai Bank] saslaailaiwas founded saaslaaon
ilai
saaslaala
i i i i
saaslaala
adsaasal d a saa
d a saa
d a aa
d a a d a d a d a as
a d
8.Pa _______ relates
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trade d (a) P1985
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secrets, etc., [PTA-2] [Ans. (b) 1988]
(a) laTRIPS 20. BENELUX is a form of [PTA-1]
laiai ilai a ilai (b) TRIMS a ilai a ilai(a) Free trade a ilarea
i a ilai i i
adsaasal d a (c)a
sasaGATS d a a
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(d) NAMA
d a a
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d a a
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d a a
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d a (b)
a
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PaPa d PaPa d d
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PaPa d aPa
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laiai i i
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saaslaala
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saaslaala 134
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i i the form ofi i
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Free saas
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Ans.
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d PaPa are a formPaP
d d ofa
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international reserves created by the IMF Market and Economic Union.
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in 1969 to solve the problem of international (ii) A free trade area is the region encompassing
laiai l ai a i
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d members in
a
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a a a free-trade d
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a a d
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proportion to their Fund quotas.
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SAFTA, EFTA.
(iii) SDRs are used as a means of payment by (iii) A customs union is defined as a type ofi i
laiai laailaFund
i members ilameet
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lblock laailai aslaala
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.
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lsaaialameans lsaailai
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aslaailai
common
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ks
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pacts. A group formed by countries within
called as ‘Paper Gold’.
a geographicalfree movement of labour and
22. Mention ilai any two aobjectives of ASEAN.
laiai l a l a ilai l a ilai l a ilai capital ilai its members.
saaslaaamong
i i
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i i
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organizations. movement of goods, services and the factors

laiai 23. Point i out
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i
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d a Union)
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Ans. Common market is established through trade packs.
.s
in orderitoi avoid unnecessary competitioni i

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laailai laailai laathem.
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25. What is Free trade area? [PTA-6; HY-'19] between countries for mutual benefits.
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and Economic union.
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signed a free trade agreement (FTA).

(ii) i Such agreementsiinvolve cooperation 30. Mention any three lending programmes of IMF.
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26. When and where was SAARC Secretariat Financial assistance to its member nations
established? [SRT-'22] to overcome their temporary difficulties
laiai aslaailSAARC
ai aslaailai was aestablished aslaailai indasaaslala
ai i i ai
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27. Specify any two affiliates of World Bank arrangement, the IMF provides additional
Group. [July-'22] borrowing aailaifacility up to 140% ilai of the member’s
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(ii) International Finance corporation. (IFC) financing facility was started in 1969. The
laiai i i
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saaslaala
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saaslaala 135
i i
saaslaala
i i
saaslaala
i i
saaslaala
i i
saaslaala
a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
P Pa d a
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P Pa d PaPdad
laiai Kindly
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laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
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PART - III ECONOMICS
laailai
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P Pad a
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d
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Time Allowed
i i : 3.00 Hours
i ]i (with Answers) [Maximum
i iMarks : 90
laiai la a la a i i
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Instructions : 7. The sum of the MPC and MPS is ________.
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(1) Check the question paper for fairness of
laiai laailai (a)
i 1 (b) 2 lailai
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a saaslaailisai any lacka sa slaaifairness,
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2) Use Blue or Black ink to write and underline 8. Arrange the following plans in correct
laiai andi pencil
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i i i i chronological
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PaPa d d
PaPaPART - I PaPa d PaPa d (i) Jawaharlal
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.
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i Vishveshwarya aailai Plan salaailai
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laiai laailai ai i i i i (iii), (i), i (iv),
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saaslaala
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and public together is termed as _______. (b) Prices are falling

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ilai Economy ilai ilai ila i aailai is increasing i i i i
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laiai la i a i l a a l a i i
saasal ______ dadsaaslaala
a i becomes
i i i
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4. Income Method is measured by summing up of
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all forms of ________. (c) Vice-President (d) Finance Minister

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5. Aggregate supply = (b) Adjustment Teller Machine

laiai (a)sasCl a ilai
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(c) C + S + T + (X - M) 13. Foreign direct investments which is not

a i i aail+ iS + T + Rf alaailai aailai i i ai i i i i i
s
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221
laiai i i
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laiai to OurlaEmail
laiai laiai laiai
laiai i i ilai
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14. Terms of Trade of a country show _______. PART - III
laiai l
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saasimported
i l a i a i l ai a i ilai
saaslaaQuestion laailai
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d a dNo.
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laiai (d) i Both
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i i Outline the major
i i merits of capitalism.
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_____. 33. What do you mean by aggregate demand?
laiai (a) Paper gold i i Mention aitslacomponents.
adsaasal aslaailai
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i i
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i i What is money i i supply? alailai i i
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d d PaPa d d of : PaPa d d d d
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.
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laiai i i i i i i 37.
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laiai la ai laiai la a lNote
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19.
Pa PaPdad of any country.
PaPdad 41. (a)
PaPIllustrate anaPdaeconomy
of P PaPdad
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(a) Monetary (b) Fiscal based on its activities.

(c)ai Wage (d) National income i i (OR) alailai
laiai saaslala
i i i
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saasabove
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saaslaala aailai (a) Discuss
saasl42.
i the
saaslaala
i various methods i i
saaslaala of estimating
i i
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d a None of
d the
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a
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P Pa d a
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PART - II (OR)
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laiai Note a i
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Question
i i
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a scope ofsa ai i
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(v) Not Correctly Matched (vi) Assertion & Reason

laiai i i 80562 i i 94222 i /i 81242ala01000

of releasing SURA’S Economics for +2 Standard. This

Dr. Arjun, M.A., M.Phil., Ph.D., Vellore

qualified teachers. Also, this guide will be an excellent

the subject effectively with this guide and prove their

78718 02000 All the Best

laiai alaailai alaailai alaailai alaailai alaailai alaailai alaailai

laiai i i i i i i iii alailai i i i i i i

email to : orders@surabooks.com / Whatsapp : 81242 01000.

1.1 Introduction 1.8 Concepts of Macro Economics

1.5 Limitations Sector Economy

1.7.1 Capitalistic Economy (Capitalism) 1.9.3 Circular Flow of Income in a Four

Circular Flow of Income in a

Circular Flow of Income in a

Circular Flow of Income in a

Three sector Economy

Four sector Economy

Circular Flow of Income

Stock and flow

adsaasal d asaaslaala d a saaslaala d a saaslaala d asaaslaala d a saaslaala d a saaslaala d a saaslaala as

adsaasal d a saaslaala d a saaslaala d a saaslaala d asaaslaala d a saaslaala d a saaslaala d asaaslaala as

laiai alailai alailai Macro aEconomics

Mixedism together towards economic development.

Incomei between different sectors of ani economy.

about tying together facts and theories”.

aslaailai Socialism aisslaadefined as a way

(c) Ragnar Frisch (d) Karl Marx of an economy.

 ai i[Govt. MQP-'19; (d) Production and Marketing

 [Ans. (b) J Mi Keynes] (b) Production i sector

5. Macro economics is a study of _______. (a) Capitalistic Economy

(c) a nation (d) aggregates (d) Mixed Economy

 [Ans. (b) stock] (iii) Undeveloped economies

laiai (c) laInternal

(ii) Economists use models to describe

27. ‘Circular Flow of Income’ - Define. [PTA-2]

public. Public and Private have the right to

sectors coexist. Private industries undertake

 [PTA-6; Aug-'21; July-'22] targets laid down in the plan.

(a) Price theory (b) Income theory features of the _______.

 [Ans. (b) Income theory] (c) Traditional Economy

(c) Mixed Economy

i i Marx alailai (d) J.R. aHicks

(a) India (b) France i (a) Single sector model

(d) Four sector model

Codes  Ans. (b) lail[A - (iii), B - (iv), C - (ii), D - (i)]

(c) A - (iv), B - (iii), C - (ii), D - (i) expansion

(B) Macro (ii) Inflation (a) A - (iii), B - (i), C - (iv), D - (ii)

general price (d) A - (ii), B - (iii), C - (iv), D - (i)

2.4 Basic Concepts of National Income 2.7.2 Difficulties in assessing depreciation

laiai 2.4.4i i NNP atalFactor i i Cost alailai i i ai i i i i i

National Income and

Factor Earning Method

PaPa PaPa PaPa PaPa PaPa PaPa PaPa

laiai GNP lailai i: i Total money avalue

laiai Capital iSector

allowance, subsidies, etc.

laiai Outlay ilai

laiai National ilaIncome

As the entire disposable income is not spent

= National income at current price ÷

NNP at factor cost = NNP at market prices –

1.7.1 Capitalistic Economy (Capitalism) 1.9.3 Circular Flow of Income in a Four

ai i[Govt. MQP-'19; (d) Production and Marketing

[Ans. (b) J Mi Keynes] (b) Production i sector

5. Macro economics is a study of _______. (a) Capitalistic Economy

[Ans. (b) stock] (iii) Undeveloped economies

27. ‘Circular Flow of Income’ - Define. [PTA-2]

[PTA-6; Aug-'21; July-'22] targets laid down in the plan.

[Ans. (b) Income theory] (c) Traditional Economy

Codes Ans. (b) lail[A - (iii), B - (iv), C - (ii), D - (i)]

2.4 Basic Concepts of National Income 2.7.2 Difficulties in assessing depreciation

(a) Two (b) Three [Ans. (a) Net National Product]

[Ans. (d) Income]

[Ans. (a) Construction sector] (b) Disposable Income

(a) Service (b) Income [Ans. (c) Net Domestic Product]

(c) Disposal Income (d) All of these

26. _ are excluded from national income. indicator of _.

(a) 520 (b) 460 (c) 240 (d) 900

made in the economy. from abroad]

7.5.1 The Classical Theory of 7.9 Exchange Rate

7.9.5 Determination of Equilibrium

(d) All of the above.[Ans. (d) All of the above.]

laiai sasla ala