Explain the role of the following in correcting excess demand

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.

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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


Open Market operations as an Instrument to Correct Excess Demand:
Open Market Operations refer to the buying and selling of securities either to the public or to the commercial banks in an open market. To curtail excess demand the central bank sells securities in the open market. By selling the securities in the open market, the central bank withdraws excess money from the economy. This results in a lower Aggregate Demand in the economy and excess demand is controlled.

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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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