Explain the role of the following in correcting deficient deman

Subject

Economics

Class

CBSE Class 12

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Sample Papers

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 Multiple Choice QuestionsShort Answer Type

31.

Explain the 'redistribution of income' objective of Government budget. 

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32.

From the following data about a Government budget, find out (a) Revenue deficit, (b) Fiscal deficit and (c) Primary deficit:
                                                                                       (Rs. Arab)
(i) Capital receipts net of borrowings                                       95
(ii) Revenue expenditure                                                        100
(iii) Interest payments                                                            10
(iv) Revenue receipts                                                             80
(v) Capital expenditure                                                          110

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33.

Giving reasons classify the following into intermediate products and final products:
Furniture purchased by a school.

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34.

Giving reasons classify the following into intermediate products and final products:
Chalks, dusters, etc. purchased by a school. 

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35.

Explain the role of the following in correcting 'deficient demand' in an economy: 
Open market operations.


Open Market Operations (OMO) refer to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. To curtail deficit demand, the central bank purchases securities in the open market. With purchase of securities, the central bank pumps in additional money into the economy. With the additional money the level of Aggregate Demand in the economy increases. Thus, the deficit demand is corrected.

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36.

Explain the role of the following in correcting 'deficient demand' in an economy: 
Bank rate

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37.

Explain the role of the following in correcting 'excess demand' in an economy: 
Bank rate

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38.

Explain the role of the following in correcting 'excess demand' in an economy: 
Open market operations

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 Multiple Choice QuestionsLong Answer Type

39.

Distinguish between collusive and non-collusive oligopoly. Explain how the oligopoly firms are interdependent in taking price and output decisions.

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40.

Explain the process of money creation by the commercial banks with the help of a numerical example. 

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