CUET 2024 Economics Mock 04

Q1. Which of the following is not an example of depreciation?

(a) A plant producing rubber shoes becomes obsolete when demand shifts from rubber shoes to leather shoes
(b) A plant producing black and white television becomes obsolete when technology is discovered to produce
colored television.
(c) Fall in the market value of assets during the period of economic downturn.
(d) Fall in the value of your residential apartment

Q2. A car purchased by households is a

(a) Single-use capital goods
(b) Single-use consumer goods
(c) Durable consumer goods
(d) Semi-durable consumer goods

Q3. When money moves out of circular flow of income, it is known as

(a) Leakages
(b) Injections
(c) Both a and b
(d) None of the above

Q4. The value of MPS is 0.45, autonomous consumption is ₹ 100 Cr, and Y is ₹ 900 Cr. Consumption is _____.
(a) 550
(b) 405
(c) 495
(d) 595

Q5. Combined factor income, which can’t be separated into various income components, is known as
(a) Mixed income of self-employed
(b) Compensation of employees
(c) Deferred income
(d) Any of the above

Q6. Which of the following is cause of rightward shift in demand curve?

(i) Price of substitute goods rises
(ii) Price of complementary goods rises
(iii) Population is increasing.
(iv) Taste and preference of the product is fading.
Choose the correct option
(a) (i) and (iii)
(b) (ii) and (iv)
(c) (i) and (ii)
(d) (i), (iii) and (iv)

Q7. The demand for goods increases as the price increases because consumers may perceive them as more
valuable if they are more expensive. The goods are called
(a) Giffin goods
(b) Normal goods
(c) Veblen goods
(d) Inferior goods

Q8. If an economy experiences an additional investment of ₹ 1,000 Cr and MPC is 0.25, what would be the
total increase in income?
(a) 1666.67 Cr
(b) 1333.67 Cr
(c) 1333.34 Cr
(d) 1667.34 Cr

Q9. Which of the following is a determinant of human capital formation?

(i) On-the-job training
(ii) Expenditure on Health
(iii) migration
(iv) Expenditure on buying arms
Choose the correct option
(a) (i) and (ii)
(b) (ii) and (iv)
(c) (i), (ii) and (iii)
(d) (i), (iii) and (iv)

Q10. What was the form of money used immediately after barter system?
(a) Commodity money
(b) Precious metals
(c) Coinage
(d) Currency notes

Q11. Which of the following is/are the important component(s) of credit creation process?
(a) Legal reserve
(b) Bank rate
(c) Primary deposit
(d) Both (a) and (c)

Q12. Which factor distinguishes Veblen goods from Giffen goods?

(a) Income elasticity of demand
(b) Price elasticity of demand
(c) Cross-price elasticity
(d) Substitute goods.

Q13. Perfectly elastic AS implies that

(i) there is fully utilization of resources in the economy
(ii) there is unemployment of resources in the economy
(ii) there is excess capacity in the economy
Choose the correct option
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i), (ii) and (iii)
(d) None of the above

Q14. What does the abbreviation "IFAD" stand for in the context of agricultural development?
(a) International Foundation for Agricultural Development
(b) International Fund for Agricultural Development
(c) International Forum for Agricultural Development
(d) International Federation for Agricultural Development

Q15. The central bank can increase availability of credit by

(i) Rise in Imports
(ii) margin requirements are reduced
(iii) Buying government securities
(iv) Selling government securities
Choose the correct option
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i), (ii) and (iii)
(d) None of the above

Q16. Which of the following are the demerits of LPG Policies?

(i) Stimulant for Industrial Production
(ii) Neglect of Agriculture
(iii) Economic Colonialism
(iv) Consumer's Sovereignty
Choose the correct option
(a) (i) and (ii)
(b) (i), (ii) and (iii)
(c) (ii) and (iii)
(d) None of the above

Q17. ________is equal to the difference between ‘AD beyond full employment’ and ‘AD at full employment’.
(a) Recession
(b) Inflationary gap
(c) Deflationary gap
(d) None

Q18. As part of its agreement with WHO conventions, India distributed free COVID-19 vaccines to many third-
world countries. Which of the following types of expenditure is this?
(a) Revenue expenditure
(b) Capital expenditure
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Q19. A downward movement along the demand curve for foreign exchange indicates
(a) appreciation of currency
(b) depreciation of currency
(c) devaluation of currency
(d) revaluation of currency

Q20. Match the correct pair from given below.

Column I Column II
A. Interest receipts (i) Tax levied on goods imported into India
B. Customs duty (ii) Non-tax revenue receipts
C. disinvestment (iii) Tax levied on the manufacture of goods in India
D. Excise duty (iv) Capital receipts
Choose the correct option
(a) A-(ii), B-(i), C-(iii), D-(iv)
(b) A-(i), B-(ii), C-(iii), D-(iv)
(c) A-(ii), B-(i), C-(iv), D-(iii)
(d) A-(i), B-(ii), C-(iv), D-(iii)

Q21. The number of deaths of children less than one year of age per 1000 live births is referred as____
(a) Maternal Mortality rate
(b) Infant Mortality rate
(c) Infant Mortality ratio
(d) Maternal Mortality ratio
Q22. You are having shares of a company worth ₹ 5,000. You are thinking of selling that shares now or wait
for 2 more months. Let’s say, after 2 months, shares would be worth ₹ 6,000. If you sell the shares now, then
your opportunity cost would be-
(a) ₹ 6000
(b) ₹ 1000
(c) ₹ 5000
(d) ₹ 1100

Q23. What is peculiar about the structural transformation process in context of Indian economy?
(a) Balanced development of all the sectors with equal contribution to the GDP
(b) Direct jump from agriculture to services with later contributing more to the GDP
(c) Transformation in the economic outlook from agrarian to industrial
(d) A jump from agriculture to industry with later contributing more to the GDP

Q24. What does the acronym "MUDRA" stand for in the context of financial institutions in India?
(a) Micro Units Development and Rural Assistance
(b) Micro Units Development and Regional Assistance
(c) Micro Units Development and Refinance Agency
(d) Micro Units Development and Rural Advancement

Q25. Which of the following is correct with regard to the financial sector reforms taken under the purview of
new economic policy, 1991?
(i) Role of RBI shifted from regulator to facilitate or of financial institutions.
(ii) Foreign investment limit in banks was raised to around 70 percent.
(iii) Foreign Institutional Investors (Flies) are now allowed to invest in Indian financial markets.
(iv) Banks can set up new branches without the approval of RBI provided they fulfill certain conditions
Choose the correct option
(a) (i) and (ii)
(b) (i), (ii) and (iii)
(c) (i), (iii) and (iv)
(d) None of the above

Q26. Match the correct pair from given below.

COLUMN I COLUMN II
A. Urbanization (i) a policy action of the government that withdraws the
status of 'legal tender' from the existing currency
B. Industrialization (ii) to promote regional equality
C. Industrial Licensing (iii) led to infrastructural growth in the economy.
D. demonetization (iv) led to the growth of civilization.

Choose the option below

(a) A (i), B-(ii), C-(iii), D-(iv)
(b) A-(ii), B-(iii), C-(i), D-(iv)
(c) A-(iii), B-(ii), C-(iv), D-(i)
(d) A-(iv), B-(iii), C-(ii), D-(i)

Q27. Which of the following was an economic reform under the liberalization-industrial sector reforms?
(i) Abolition of Industrial Licensing
(ii) De-reservation of production areas
(iii) Abolishment of Import Quotas and Licensing
(iv) Freedom to import capital goods and technology
Choose the correct option
(a) (i) and (ii)
(b) (i), (ii) and (iv)
(c) (i), (ii) and (iii)
(d) All of the above

Q28. Arrange them in chronological order:

(i) The Industrial (Development and Regulation) Act
(ii) The Green Revolution
(iii) The Monopolies and Restrictive Trade Practices (MRTP) Act
(iv) The Foreign Exchange Regulation Act (FERA)
Choose from the options below
(a) (i), (iii), (iv), (ii)
(b) (ii), (iii), (iv), (i)
(c) (i), (ii), (iii), (iv)
(d) (iv), (ii), (i), (iii)

Q29. Which of the following statements is correct about physical capital?

(i) It is separate from its owner.
(ii) It can be built even through imports.
(iii) It is tangible and can be easily sold in the market like any other commodity.
(iv) It refers to the means of production (machines, infrastructure, etc.).
Choose the correct option
(a) (i) and (ii)
(b) (i), (ii) and (iv)
(c) (i), (ii) and (iii)
(d) All of the above

Q30. People as a resource means...

(a) a country's natural capital in terms of their existing productive skills
(b) a country's human capital in terms of their existing productive skills
(c) a country's overall capital in terms of their existing productive skills
(d) a country's technical capital in terms of their existing productive skills

Q31. Which of the given statements is correct with regard to the non-institutional source of credit?
(a) There are government bodies that supervise the informal sector
(b) Moneylenders ask for a reasonable rate of interest
(c) Cost of informal loans to the borrower is quite high
(d) Money lenders use fair means to get their money back

Q32. It is essential to expand banking services in rural areas due to______

(a) Bringing more people under the purview of formal sources of credit
(b) Providing institutional support at lower rates of interest
(c) Increased awareness among the rural masses
(d) All of the above

Q33. Agriculture laborers, farmers, owners of small enterprises that employ less than 10 workers fall
under the category of
(a) The formal sector
(b) The informal sector
(c) Regular workers
(d) None

Q34. Percentage of population participating in production activity is called___

(a) The wage rate
(b) the population rate
(c) Labor supply rate
(d) Participation rate

Q35. Match the correct pair from the given below.

Column I Column II
A. Renewable resource (i) Heath care
B. Non-Renewable resource (ii) LPG
C. Component of social infrastructure (iii) Banking services
D. Component of economic infrastructure (iv) Geothermal Energy

Choose the correct option

(a) A-(iii), B-(i), C-(ii), D-(iv)
(b) A-(iv), B-(ii), C-(i), D-(iii)
(c) A-(iv), B-(ii), C-(iii), D-(i)
(d) A-(i), B-(ii), C-(iii), D-(iv)
.
Q36. In which city, 1st All Indian Institute of Medical Science has been set up?
(a) Chennai
(b) Pune
(c) Karnataka
(d) New Delhi

Q37. After mining, the huge holes left behind are used for
(a) Waste water storage
(b) Waste and water storage
(c) Waste disposal
(d) Waste storage

Q38. What was the main objective of China's Great Leap Forward (GLF) campaign in 1958?
(a) Achieving political reform
(b) Promoting rural collectivization
(c) Ensuring urban industrialization
(d) Improving healthcare and education

Q39. Arrange the given events in China in chronological order and choose the correct alternative.
(i) Great proletarian cultural revolution
(ii) Great leap forward campaign
(iii) Introduction of economic reform
(iv) First five-year plan
(a) (ii), (iv), (iii), (i)
(b) (iv), (ii), (i), (iii)
(c) (ii), (iv), (i), (iii)
(d) (iv), (i), (ii), (iii)

Q40. Which of the following regional economic groups is formed between India, China, and Pakistan?
(a) ASEAN
(b) G-8
(c) SAARC
(d) All of these

Directions Q41- Q45

Read the passage and answer the following questions:
It is common to find a country's developmental strategies used as a model for others to use as lessons and
guidance for their own development. It is particularly evident after the introduction of the reform process in
different parts of the world. In order to learn from the economic performance of our neighboring countries, it
is necessary to have an understanding of the roots of their successes and failures. It is also necessary to
distinguish between, and contrast, the different phases of their strategies. Though countries go through their
development phases differently, let us take the initiation of reforms as a point of reference. We know that
reforms were initiated in China in 1978, Pakistan in 1988, and India in 1991. Let us briefly assess their
achievements and failures in the pre- and post-reform periods.
Why did China introduce structural reforms in 1978? China did not have any compulsion to introduce
reforms as dictated by the World Bank and International Monetary Fund to India and Pakistan. The new
leadership at that time in China was not happy with the slow pace of growth and lack of modernization in the
Chinese economy under Maoist rule. They felt that the Maoist vision of economic development based on
decentralization, self-sufficiency, and the shunning of foreign technology, goods, and capital had failed.
Despite extensive land reforms, collectivization, the Great Leap Forward, and other initiatives, the per capita
grain output in 1978 was the same as it was in the mid-1950s.

Q41. Why did China introduce structural reforms in 1978?

(a) Pressure from the World Bank and IMF
(b) Dissatisfaction with the slow pace of growth and lack of modernization
(c) Following the Maoist vision of economic development
(d) To align with India and Pakistan's reform initiatives

Q42. Which organization did not dictate reforms to China but influenced India and Pakistan?
(a) United Nations (UN)
(b) World Bank
(c) International Monetary Fund (IMF)
(d) Asian Development Bank (ADB)

Q43. Which neighboring country of China initiated structural reforms in 1988?

(a) India
(b) Pakistan
(c) Vietnam
(d) South Korea

Q44. What was the primary goal of China's economic reforms in 1978?
(a) Achieving self-sufficiency
(b) Promoting collectivization
(c) Encouraging decentralization
(d) Accelerating economic growth and modernization

Q45. What was the primary focus of the Maoist vision of economic development in China?
(a) Emphasis on foreign investment
(b) Pursuit of rapid urbanization
(c) Prioritizing self-sufficiency and decentralization
(d) Promotion of international trade

Directions Q46- Q50

Read the passage and answer the following questions:
With the advent of the green revolution, the entire country entered into a frenzy to use more and more
chemical pesticides for higher yields. Soon, the adverse impacts began to show: food products were
contaminated, soil, water bodies, and even groundwater were polluted with pesticides. Even milk, meat, and
fish were found to be contaminated.
To meet this challenge, efforts are underway to bring in better methods of pest control. One such step is the
use of pesticides based on plant products. Neem trees are proving to be quite useful. Several types of pest-
control chemicals have been isolated from neem, and these are being used. Mixed cropping and growing
different crops in consecutive years on the same land have also helped farmers.
In addition, awareness is spreading about various animals and birds that help control pests. For example,
snakes are one of the prime groups of animals that prey on rats, mice, and various other pests. Similarly, large
varieties of birds, for example, owls and peacocks, prey on vermin and pests. If these are allowed to dwell
around agricultural areas, they can clear large varieties of pests, including insects. Lizards are also important
in this regard. We need to know their value and save them.
Sustainable development has become a catchphrase today. It is indeed a paradigm shift in development
thinking. Though it has been interpreted in a number of ways, adherence to this path ensures lasting
development and non-declining welfare for all.

Q46. What adverse consequences resulted from the excessive use of chemical pesticides during the Green
Revolution?
(a) Decreased crop yields
(b) Soil enrichment
(c) Contaminated food products and polluted water bodies
(d) Enhanced groundwater quality

Q47. What agricultural practice, mentioned in the text, involves planting different crops in consecutive years
on the same land?
(a) Crop rotation
(b) Monoculture
(c) Organic farming
(d) Terracing

Q48. What role do lizards play in the context of pest control?

(a) They are pests themselves.
(b) They are a source of contamination.
(c) They help control insects and pests.
(d) They have no impact on pest control

Q49. What does the text suggest as a sustainable alternative to chemical pesticides for pest control?
(a) Increased use of chemical pesticides
(b) Reliance on monoculture
(c) The use of natural predators and plant-based pesticides
(d) Abandoning agriculture

Q50. What is the primary environmental issue caused by the excessive use of chemical pesticides?
(a) Improved soil fertility
(b) Contamination of soil, water, and food
(c) Enhanced groundwater quality
(d) Reduced pest populations

Solutions:
S1. Ans. (c)
Sol. During an economic recession, these losses are not considered depreciation. The loss of value fixed assets
owing to unexpected obsolescence is called 'capital loss'.

S2. Ans. (c)

Sol. A car is a durable consumer good because it can be used repeatedly over a long period of time. car is
purchased by household for their own personal use, and it is not used in the production of other goods or
services.

S3. Ans. (a)

Sol. When money moves out of the circular flow of income, it is known as a leakage. Leakages reduce the
amount of money available for spending, which can slow down economic growth. Here are some examples of
leakages: Saving, Taxes, Imports

S4. Ans. (d)

Sol. Given:
MPS = 0.45
Autonomous consumption = 100
Y = 900
MPC = 1 - MPS
MPC = 1 - 0.45 = 0.55.
Consumption = Autonomous consumption + MPC × Income
Consumption = 100 + 0.55 × 900 = 495
Therefore, the consumption is 595.

S5. Ans. (a)

Sol. Mixed income of self-employed is the income that self-employed individuals earn from their businesses. It
includes the income from their labor, as well as the income from their capital. This income cannot be
separated into its component parts, such as wages and profits.

S6. Ans. (a)

Sol. The increase in the price of a substitute good and the increase in population will cause a rightward shift
in the demand curve.
When the population increases, there are more people who are potential consumers of the good. This will
also increase the demand for the good.
When the price of a substitute good rises, consumers will switch to the original good, which will increase the
demand for the original good.

S7. Ans. (c)

Sol. Veblen goods are luxury goods that are more desirable as their price increases. This is because the high
price of the good is seen as a status symbol. Examples of Veblen goods include luxury cars, designer clothes,
and expensive jewelry.
Giffen goods are goods for which demand increases as the price increases. This is because the good is a
necessity for low-income consumers, and as the price increases, they have less money to spend on other
goods, so they buy more of the Giffen good.

S8. Ans. (c)

Sol. Given:
Investment = ₹ 1,000
MPC = 0.25
Multiplier = 1 / (1 - 0.25) = 1.33334
Total increase in income = 1000 * 1.33334 = 1333.34
Therefore, the total increase in income is 1333.34

S9. Ans. (c)

Sol. Determinants of Human Capital Formation:
(i) On-the-job training: Acquiring new skills while working.
(ii) Expenditure on Health: Investment in healthcare for well-being.
(iii) Migration: Movement leading to skill acquisition.
Expenditure on buying arms: Not a determinant; related to defense.

S10. Ans. (a)

Sol. Commodity money refers to a form of money that has intrinsic value based on the material from which it
is made. In the transition from the barter system to a more organized monetary system, commodities like
grains, cattle, or other valuable goods were often used as a medium of exchange before the development of
more standardized forms of money like coins or currency notes.

S11. Ans. (d)

Sol. Legal reserve: This refers to the amount of money that banks are required to hold in reserve by law. It's a
fraction of their total deposits and is usually set by the central bank. Banks are required to keep a certain
percentage of their deposits as a reserve to ensure the stability of the banking system
Primary deposit: Primary deposits are the initial deposits made by customers in banks. These deposits form
the basis for the creation of additional credit by banks through the process of lending and fractional reserve
banking.

S12. Ans. (a)

Sol. The factor that distinguishes Veblen goods from Giffen goods is their income elasticity of demand. Veblen
goods have a positive income elasticity of demand, meaning that as consumers' incomes increase, they
demand more of these goods because they are associated with prestige and status. On the other hand, Giffen
goods have a negative income elasticity of demand,

S13. Ans. (b)

Sol. Perfectly elastic aggregate supply (AS) implies that the economy has excess capacity, and there is
unemployment of resources in the economy. In this situation, AS can increase without any upward pressure
on prices because the economy is not operating at its full potential. Therefore, option (b) is the correct choice.

S14. Ans. (b)

Sol. The International Fund for Agricultural Development (IFAD) is an international financial institution and
specialized agency of the United Nations that provides grants, loans, and equity investments to developing
countries to help them improve food security and rural development. It was established in 1974 and is
headquartered in Rome, Italy.

S15. Ans. (b)

Sol. Reducing margin requirements: When margin requirements are lowered, borrowers are required to put
up less of their own money to secure a loan. This encourages more borrowing and increases the availability of
credit.
Buying government securities: When the central bank buys government securities in the open market, it
effectively injects money into the financial system. This added liquidity gives banks more funds to lend, which
in turn increases the availability of credit.

S16. Ans. (c)

Sol. Neglect of Agriculture: One of the criticisms of LPG policies is that they can lead to neglect of the
agriculture sector as resources are often diverted towards industrialization and services.
Economic Colonialism: Some critics argue that LPG policies can lead to economic colonialism, where foreign
corporations and interests exert significant influence and control over a country's economy.
Other options are merits of LPG policies

S17. Ans. (b)

Sol. Inflationary gap occurs when the economy is operating beyond its full employment level. This can happen
when the government increases spending, businesses invest more, or there is an increase in aggregate
demand from other factors. When AD is greater than AS, businesses are able to sell all of their output at
higher prices. This leads to inflation.

S18. Ans. (a)

Sol. The expenditure incurred by India to distribute free COVID-19 vaccines is a transfer payment which is
non tax revenue expenditure. A transfer payment is a payment made by the government to individuals or
organizations without any goods or services being received in return. Examples of transfer payments include
social security benefits, welfare payments, and foreign aid.

S19. Ans. (a)

Sol. A downward movement along the demand curve for foreign exchange means that people are willing to
buy less foreign exchange at each price. This can happen because the domestic currency has appreciated,
making foreign goods more expensive.

S20. Ans. (c)

Sol. Interest receipts: are the receipts that the government gets from lending money. They are a non-tax
revenue receipt.
Customs duty: is a tax levied on goods imported into India. It is a tax revenue receipt.
Disinvestment: is the sale of government assets. It is a capital receipt.
Excise duty: is a tax levied on the manufacture of goods in India. It is a tax revenue receipt.

S21. Ans. (b)

Sol. The number of deaths of children less than one year of age per 1000 live births is referred to as Infant
Mortality Rate (IMR).
IMR is an important indicator of the health of a country. A high IMR indicates that many children are dying
before they reach their first birthday. This can be due to a number of factors, including poverty, poor
sanitation, lack of access to healthcare, and malnutrition.

S22. Ans. (b)

Sol. If you sell the shares now, you will receive ₹5,000.
If you wait for 2 more months and the shares become worth ₹6,000, then your potential gain would be ₹6,000
- ₹5,000 = ₹1,000.
So, the correct answer is (b) ₹1,000.

S23. Ans. (b)

Sol. The peculiar thing about the structural transformation process in the context of the Indian economy is
that there has been a direct jump from agriculture to services, with the latter contributing more to the GDP.
There are a number of reasons for this. One reason is that India has a large and growing population, which
has created a large demand for services such as transportation, healthcare, and education. Another reason is
that India has a well-educated workforce, which is well-suited to the services sector.

S24. Ans. (a)

Sol. MUDRA stands for Micro Units Development and Rural Assistance. It is a financial institution in India
that provides loans to micro and small enterprises (MSEs). It was launched in 2015 by the Government of
India.
MUDRA has three schemes:
Shishu (Micro): Loans up to ₹50,000
Kishore (Small): Loans between ₹50,000 and ₹10 lakh
Tarun (Medium): Loans between ₹10 lakh and ₹1 crore

S25. Ans. (c)

Sol. The following are correct with regard to the financial sector reforms taken under the purview of new
economic policy, 1991:
(i) Role of RBI shifted from regulator to facilitator of financial institutions.
(iii) Foreign Institutional Investors (FIIs) are now allowed to invest in Indian financial markets.
(iv) Banks can set up new branches without the approval of RBI provided they fulfill certain conditions.
Foreign investment limit in banks was raised to around 70 percent. This is incorrect. The foreign investment
limit in banks was initially raised to 20% in 1991, and it has been gradually increased to the current level of
74%.

S26. Ans. (d)

Sol. A. Urbanization - (iv) led to the growth of civilization.
B. Industrialization - (iii) led to infrastructural growth in the economy.
C. Industrial Licensing - (i) a policy action of the government that withdraws the status of 'legal tender' from
the existing currency.
D. Demonetization - (ii) to promote regional equality.

S27. Ans. (b)

Sol. Abolition of Industrial Licensing was a significant step, allowing industries to set up and expand without
the need for government licenses.
De-reservation of production areas refers to the removal of restrictions on where certain industries could
operate, promoting greater flexibility.
Freedom to import capital goods and technology was an essential aspect of industrial sector reforms,
allowing industries to access advanced technology and machinery.
Abolishment of Import Quotas and Licensing was foreign exchange not industrial sector reform

S28. Ans. (c)

Sol. Industrial (Development and Regulation) Act (1948)
Green Revolution' (1967-68)
Monopolies and Restrictive Trade Practices (MRTP) Act (1969)
Foreign Exchange Regulation Act (FERA) (1973)

S29. Ans. (d)

Sol. The correct option is indeed (d) "All of the above," and here's an explanation of each statement:
(i) It is separable from its owner: Physical capital, such as machinery or infrastructure, can be owned by
individuals or entities separate from the owner. It can be bought, sold, or transferred between different
owners.
(ii) It can be built even through imports: Physical capital can be obtained through imports. This means that a
country or entity can acquire machinery, equipment, or infrastructure by purchasing them from other
countries, even if they are not produced domestically.
(iii) It is tangible and can be easily sold in the market like any other commodity: Physical capital consists of
tangible assets that have a market value. These assets can be sold or traded in the market, just like any other
physical commodity.
(iv) It refers to the produced means of production (machines, infrastructure, etc.): Physical capital
encompasses the produced means of production, including machinery, factories, transportation networks,
and other tangible assets used in the production of goods and services.

S30. Ans. (b)

Sol. The term "people as a resource" refers to the idea that the population of a country represents its human
capital. This human capital includes the skills, knowledge, education, and productive abilities of the people,
which can be harnessed to contribute to the country's economic growth and development. So, option (b) is
the correct choice.

S31. Ans. (c)

Sol. Non-institutional sources of credit, such as moneylenders and informal lenders, often charge high interest
rates and fees, making the cost of borrowing expensive for the borrowers. This is a characteristic of the
informal credit sector.

S32. Ans. (d)

Sol. All of the above
Expanding banking services in rural areas is essential for several reasons:
(a) It helps bring more people under the purview of formal sources of credit, reducing their dependence on
informal and expensive credit sources.
(b) It provides institutional support at lower rates of interest, making credit more affordable and accessible
to rural populations.
(c) Increased awareness among rural masses about banking services and financial literacy can lead to better
financial inclusion and economic development in these areas.

S33. Ans. (b)

Sol. Agricultural laborers, farmers, and owners of small enterprises with less than 10 workers typically fall
into the category of the informal sector. The informal sector is characterized by economic activities that are
not regulated or protected by the government, and it often lacks formal contracts, social security benefits, and
job stability.

S34. Ans. (d)

Sol. The percentage of the population that is actively participating in production or labor force activities is
called the "participation rate." It is a key measure in labor market analysis and reflects the proportion of the
population that is either employed or actively seeking employment.

S35. Ans. (c)

Sol. The correct matching of the columns is as follows:
A. Renewable resource - (iv) Geothermal Energy
B. Non-Renewable resource - (ii) LPG (Liquefied Petroleum Gas)
C. Component of social infrastructure - (i) Health care
D. Component of economic infrastructure - (iii) Banking services

S36. Ans. (d)

Sol. The All-India Institute of Medical Sciences (AIIMS) is located in New Delhi, India. It was established in
1956 as an autonomous institution under the Ministry of Health and Family Welfare, Government of India.
AIIMS is one of the premier medical institutes in India and is considered to be one of the best medical schools
in the world.

S37. Ans. (c)

Sol. After mining, the huge holes left behind are often used for (c) Waste disposal. These large excavated areas
can be repurposed for various purposes, including waste disposal and landfill sites, as they can provide ample
space for the safe disposal of waste materials.

S38. Ans. (b)

Sol. The main objective of China's Great Leap Forward (GLF) campaign in 1958 was to achieve rapid economic
growth. The GLF was a series of economic and social programs implemented by the Chinese government
under the leadership of Mao Zedong. The goal of the GLF was to transform China from an agrarian society into
an industrial power in a short period of time.
To achieve this goal, the Chinese government collectivized agriculture and promoted the use of backyard steel
furnaces. The GLF also led to the creation of communes, which were large agricultural and industrial units.
However, the GLF was a disaster. The collectivization of agriculture led to widespread food shortages, and the
backyard steel furnaces produced low-quality steel. The GLF also led to the deaths of millions of people due to
famine and disease.
The GLF was abandoned in 1962, but its legacy continues to be debated. Some historians argue that the GLF
was a necessary step in China's development, while others argue that it was a major setback.

S39. Ans. (b)

Sol. correct chronological order is:
(iv) First five-year plan (1953-1957)
(ii) Great Leap Forward campaign (1958-1962)
(i) Great proletarian cultural revolution (1966-1976)
(iii) Introduction of economic reform (1978 onwards)
The First Five-Year Plan was a period of economic development in China from 1953 to 1957. It was launched
by the Chinese government under the leadership of Mao Zedong. The goal of the plan was to industrialize
China and improve the lives of the Chinese people.
The Great Leap Forward campaign was a period of economic and social upheaval in China from 1958 to 1962.
It was launched by Mao Zedong in an attempt to rapidly industrialize China and overtake the United States.
The campaign was a disaster, and it led to widespread famine and the deaths of millions of people.
The Great Proletarian Cultural Revolution was a period of political and social turmoil in China from 1966 to
1976. It was launched by Mao Zedong in an attempt to purge the Chinese Communist Party of his opponents.
The Cultural Revolution was a very destructive period, and it led to the deaths of millions of people.
The introduction of economic reform was a period of economic liberalization in China that began in 1978. It
was launched by Deng Xiaoping in an attempt to modernize China and improve the lives of the Chinese
people. The economic reforms have been very successful, and they have helped to make China one of the
fastest-growing economies in the world.

S40. Ans. (c)

Sol. SAARC is the only regional economic group formed between India, China, and Pakistan.
ASEAN: The Association of Southeast Asian Nations (ASEAN) is a regional intergovernmental organization
comprising ten Southeast Asian countries. It was established on 8 August 1967 by Indonesia, Malaysia, the
Philippines, Singapore, and Thailand. The goals of ASEAN are to accelerate economic growth, social progress,
cultural development, and political stability in the region through cooperation in trade, investment, industry,
agriculture, tourism, and other areas.
G-8: The Group of Eight (G8) is an intergovernmental forum consisting of the world's seven largest advanced
economies and the European Union. The G8 was established in 1975 and its members are Canada, France,
Germany, Italy, Japan, Russia, the United Kingdom, and the United States. The G8 meets annually to discuss
global economic and political issues.
SAARC: The South Asian Association for Regional Cooperation (SAARC) is a regional intergovernmental
organization comprising eight South Asian countries. It was established on 8 December 1985 by Bangladesh,
Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka. The goals of SAARC are to promote economic
cooperation, social development, and cultural exchanges in the region.

S41. Ans. (b)

Sol. The leadership in China initiated reforms in 1978 because they were unhappy with the slow economic
growth and the lack of modernization that had been achieved under the Maoist rule. They felt that the Maoist
vision, which emphasized decentralization, self-sufficiency, and a reluctance to embrace foreign technology
and capital, had not yielded the desired results.

S42. Ans. (b)

Sol. The World Bank did not dictate reforms to China but played a significant role in influencing economic
reforms in India and Pakistan.

S43. Ans. (b)

Sol. Pakistan initiated structural reforms in 1988, following its own economic policies.

S44. Ans. (d)

Sol. The primary goal of China's economic reforms in 1978 was to accelerate economic growth and
modernization

S45. Ans. (c)

Sol. The Maoist vision of economic development in China emphasized prioritizing self-sufficiency and
decentralization as key elements of its economic strategy.

S46. Ans. (c)

Sol. Excessive use of chemical pesticides led to contamination of food products and pollution of water bodies,
including soil and groundwater. This contamination had detrimental effects on both the environment and
public health.

S47. Ans. (a)

Sol. Crop rotation is the practice of growing different crops in consecutive years on the same land. It helps
improve soil fertility, manage pests, and reduce the risk of soil depletion.

S48. Ans. (c)

Sol. Lizards play a role in pest control by preying on insects and pests, helping to reduce their populations in
agricultural areas.

S49. Ans. (c)

Sol. The text suggests that a sustainable alternative to chemical pesticides involves the use of natural
predators (e.g., snakes, owls) and plant-based pesticides (e.g., neem-based pesticides) for pest control, which
is more environmentally friendly.

S50. Ans. (b)

Sol. The primary environmental issue caused by the excessive use of chemical pesticides is Contamination of
soil, water, and food.
The contamination of soil, water, and food due to excessive pesticide use is a significant environmental
concern, and it highlights the importance of adopting sustainable and eco-friendly pest control methods to
mitigate these adverse effects on the environment and public health.