CBSE Economics 2024 Answer Key

CBSE economics board paper 2024 has concluded. Here is the answer key for macro economics part for CBSE economics question paper 2024. Question paper Series No 11-58/1/1

Q No Solution
1Answer (a).
2Answer (c)
3Answer (a)
4Answer (d)
5Answer (d)
6Answer (d)
7Answer (c)
8Answer (d)
9Answer (b). MPC = 0.75, So MPS = 0.25.
Multiplier = 1/MPS
K = 1/0.25 = 4
10Answer (c). Goods exports - Goods Imports = Balance of Trade
1200 - Goods Imports = 500
Goods Imports = 700
Note : Data on transfer payments is not relevant
11(a) Household final consumption expenditure 470
Government final consumption expenditure 320
Gross Domestic Capital formation
Add - Inventory Investment -40 160
Net Exports
Exports 50
Less - Imports 60 -10
Gross Domestic Product at Market Price 940
Less - Consumption of Fixed Capital 35
Less - Net Indirect Taxes 50
Net Domestic Product at Factor Cost 855

Answer 11 (b) (i). Externalities refers to good and bad impact of an economic activity without paying the price or penalty for that. It can be both positive and negative

Example Positive Externality - New factory in a locality gives employment to lot of people

Example Negative Externality - New factory in a locality generates air pollution resulting into diseases

Note : There can be various examples of externalities and not necessarily the example mentioned here

Answer 11 (b) (ii) . Operating Surplus refers to income from property and entrepreneurship. It is sum total of Rent, Royalty, Interest and Profits. It arises both in private and government enterprises. However it does not arise in general government.

Answer 12

Fixed exchange rateFlexible exchange rate
Determined by the governmentDetermined by the forces of supply and demand in international money market
Planned and introduced by the government or RBILinked to change in the market force of supply and demand
Leads to devaluation or revaluationLeads to depreciation and appreciation
Government keep large stock of foreign exchangeDoes not require large stock of foreign exchange 
Very low degree of speculationVery high degree of speculation
Difference between Fixed and Flexible Exchange rate Systems

Answer 13 (a)


Step 1 - Consumption at 0 income = Income - Savings = 0 - (-30) = 30

Step 2 - Find Consumption using APC values APC = C/Y C = Y * APC

Step 3 - Now find savings by Income - Consumption

Step 4 - Find APC at 0 level of income. C / Y = 30/0

Step 5 - Find MPS = ▲S / ▲Y

Answer 13 (b) . Since ex ante AS < AD so  a) economy is not in equilibrium b) there will be loss of profits for suppliers. So the suppliers will increase the output resulting into rise in employment and rise in employment will result into rise in income

Answer 14. The statement is partly true. In India only Central bank and Ministry of Finance can issue currency Central bank issues all paper notes except Rs 1 note. Ministry of finance issues all coins and Rs 1 paper note. It is pertinent to note that no other private concern/bank etc. can issue currency in India

Answer 15. a) This news item is discussing about setting of Bank rate and repo rate under RBI monetary policy. In the last 2 years the inflation has risen and to control inflation RBI was increasing the policy rates. However now RBI thinks that inflation is coming under control and there is no need to increase the policy rates further so it is keeping the policy rates unchanged

Answer 15. b) If the rate setting panel would have decreased the said rate then this will increase money supply in the economy. This is due to a) banks borrowing more from RBI due to lower rates b) commercial banks in turn would reduce the borrowing rates for people so people will take more credit and hence money supply will increase

Answer 16 (a) . i) Revenue ii) Capital iii) Capital

Answer 16 (b) (i) . Note there is a misprint in the Legend. It is written Revenue Expenditure (RE) 2022-2023. It should read as Revised Estimates (RE) 2022-2023

Transportation. Expenditure is showing an uptrend in the past 3 years from 2021-22 to 2023-24

YearRs Lakh Cr% Chg

Expenditure has increased by 17.47% in 2022-2023. It has further increased by 32.56% in 2023-2024

Rural Development. The expenditure is almost constant minor fluctuations

YearRs Lakh Cr% Chg

Expenditure has increased by 6.11% in 2022-2023. However it has fallen by 2.06% in 2023-2024

Answer 16 (b) (ii)

FeatureFiscal DeficitRevenue Deficit
MeaningTotal Expenditure - Total Receipts (Excluding Borrowings) of GovernmentRevenue Expenditure - Revenue Receipts of Government
RepresentsGovernment total borrowings requirementsGovernment inefficiency in meeting its Operational costs
ImpactIncreases national DebtLimits Government ability to spend on social welfare programs

Answer 17 (a) . In a two sector economy there are only two sectors. a) Households b) Firms.

In circular flow there are two types of flow. Real Flows and Money Flows

Real Flow includes supply of factor services by households to firms and supply of goods and services by firms to households

Money Flow represents expenditure on goods and services by households and factor payments by firms to households

Answer 17(b) . Yes I agree with the given statement.

YearCommodityQuantityPriceGDP at MP (Nominal)
2011-2012Wheat20 TonnesRs 100/TonneINR 2000
Cloth100 metres5/metreINR 500
Sugar5 TonnesRs 500/TonneINR 2500
TotalINR 5000
2019-2020Wheat20 TonnesRs 1000/TonneINR 20000
Cloth100 metres20/metreINR 2000
Sugar5 TonnesRs 1600/TonneINR 8000
TotalINR 30000
Estimation of Nominal GDP

Note that the GDP has risen from INR 5000 to INR 30000 even when output is constant. This increase is due to increase in price level

YearCommodityQuantityPriceGDP at MP (Nominal)
2011-2012Wheat20 TonnesRs 100/TonneINR 2000
Cloth100 metres5/metreINR 500
Sugar5 TonnesRs 500/TonneINR 2500
TotalINR 5000
2019-2020Wheat30 TonnesRs 100/TonneINR 3000
Cloth200 metres5/metreINR 1000
Sugar10 TonnesRs 500/TonneINR 5000
TotalINR 9000
Estimation of Real GDP

Note that the GDP has risen from INR 5000 to INR 9000 even when prices are constant. This increase is due to increase of output

The above example illustrates that nominal GDP can increase due to increase in prices as well as increase in output. However real GDP can increase only due to rise in production of Goods and Services.

The economic growth of a nation can happen only with rise in output and hence Real GDP is a better indicator of economic growth of a nation

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