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 |
| 1 | Answer (a). |
| 2 | Answer (c) |
| 3 | Answer (a) |
| 4 | Answer (d) |
| 5 | Answer (d) |
| 6 | Answer (d) |
| 7 | Answer (c) |
| 8 | Answer (d) |
| 9 | Answer (b). MPC = 0.75, So MPS = 0.25. Multiplier = 1/MPS K = 1/0.25 = 4 |
| 10 | Answer (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 GDFCF 200 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 rate | Flexible exchange rate |
| Determined by the government | Determined by the forces of supply and demand in international money market |
| Planned and introduced by the government or RBI | Linked to change in the market force of supply and demand |
| Leads to devaluation or revaluation | Leads to depreciation and appreciation |
| Government keep large stock of foreign exchange | Does not require large stock of foreign exchange |
| Very low degree of speculation | Very high degree of speculation |
Answer 13 (a)
| Income | Savings | Consumption | APC | MPS |
| 0 | -30 | 30 | Infinity | - |
| 100 | 0 | 100 | 1 | 0.3 |
| 200 | 30 | 170 | 0.85 | 0.3 |
| 300 | 60 | 240 | 0.80 | 0.3 |
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
| Year | Rs Lakh Cr | % Chg |
| 2021-2022 | 3.32 | - |
| 2022-2023 | 3.90 | 17.47% |
| 2023-2024 | 5.17 | 32.56% |
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
| Year | Rs Lakh Cr | % Chg |
| 2021-2022 | 2.29 | - |
| 2022-2023 | 2.43 | 6.11% |
| 2023-2024 | 2.38 | -2.06% |
Expenditure has increased by 6.11% in 2022-2023. However it has fallen by 2.06% in 2023-2024
Answer 16 (b) (ii)
| Feature | Fiscal Deficit | Revenue Deficit |
| Meaning | Total Expenditure - Total Receipts (Excluding Borrowings) of Government | Revenue Expenditure - Revenue Receipts of Government |
| Represents | Government total borrowings requirements | Government inefficiency in meeting its Operational costs |
| Impact | Increases national Debt | Limits 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.
| Year | Commodity | Quantity | Price | GDP at MP (Nominal) |
| 2011-2012 | Wheat | 20 Tonnes | Rs 100/Tonne | INR 2000 |
| Cloth | 100 metres | 5/metre | INR 500 | |
| Sugar | 5 Tonnes | Rs 500/Tonne | INR 2500 | |
| Total | INR 5000 | |||
| 2019-2020 | Wheat | 20 Tonnes | Rs 1000/Tonne | INR 20000 |
| Cloth | 100 metres | 20/metre | INR 2000 | |
| Sugar | 5 Tonnes | Rs 1600/Tonne | INR 8000 | |
| Total | INR 30000 |
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
| Year | Commodity | Quantity | Price | GDP at MP (Nominal) |
| 2011-2012 | Wheat | 20 Tonnes | Rs 100/Tonne | INR 2000 |
| Cloth | 100 metres | 5/metre | INR 500 | |
| Sugar | 5 Tonnes | Rs 500/Tonne | INR 2500 | |
| Total | INR 5000 | |||
| 2019-2020 | Wheat | 30 Tonnes | Rs 100/Tonne | INR 3000 |
| Cloth | 200 metres | 5/metre | INR 1000 | |
| Sugar | 10 Tonnes | Rs 500/Tonne | INR 5000 | |
| Total | INR 9000 |
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
