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ICSE Class X Prelims 2025 : Economic Applications (Vivekananda Mission School (VMS), Joka, Kolkata)

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VIVEKANANDA MISSION SCHOOL PRE-BOARD EXAMINATION CLASS X (ICSE-2025) ECONOMIC APPLICATIONS TIME: 2 Hrs. FULL MARKS: 100 Candidates will get additional 15 minutes only to read the question paper. They must not start writing during this time. The intended marks of the questions or parts of the questions are given in []. Attempt All Questions from Section-A and any Four Questions from Section-B. Section - A (40 Marks) Attempt All Questions from this part Question:1 [20 X 1 = 20] Choose the correct option from the following questions: (i) Assertion: The crude oil reserves are going down for the entire world and countries need to find substitute fuel for crude oil. Reason: A country that is dependent on imports for crude oil will demand more crude oil in the future. (a)A is true but R is false (b)A is false but R is true (c)Both A and R are true, and R explains A (d)Both A and R are true, but R does not explain A (ii) Cycling is one of the new emergent and alternative mode of transportation that combine both travelling and physical activity in the most attractive way and aimed at moving towards green transportation mode. In this context, what is the impact on the demand for cycles indicated? (a) Increase in the demand for cycle (b) Expansion of the demand for cycle (c) Contraction of the demand for cycle (d) Decrease in the demand for cycle (iii) In case of contraction of supply, we move: (a) To right on another supply curve (b) From lower point to upper point (c) From upper point to lower point (d) Both (b) and (c) (iv) Which of the following is NOT a feature of Monopoly market? (a) Inelastic demand (b) Price discrimination (c) Non-Price competition (d) Absence of close substitute (v) Which of the following is the feature of Money? (a) Indivisibility (b) Homogeneous unit (c)Liquid asset 1 (d) Both (b) and (c) (vi) Current Account is mostly used by the traders. (a) True (b) False (vii) Identify the market form which earns normal profit in long run: (a) (b) (c) (d) Both (b) and (c) (viii)Match the following: 1 Prices offered by the Hairdressing industry depends on the services they provide and their uniqueness. 2 NASA in charge of US science and technology. 3 Concession in Railway Tickets for senior citizens as compared to normal passengers. 4 The sellers must quote the price that prevails in the market, which usually remains uniform (a) 1(R), 2(S), 3(Q), 4(P) 2 P Perfectly Competitive Market Q Monopoly Market R Monopolistically Competitive Market S Monopsony Market (b) 1(P), 2(Q), 3(R), 4(S) (c) 1(R), 2(Q), 3(S), 4(P) (d) 1(Q), 2(R), 3(S), 4(P) (ix) The supply of durable goods is usually (a) Elastic (b) Inelastic (c) Perfectly elastic (d) Perfectly inelastic (x) What kind of tax is shown below? (a)Proportional Tax (b)Progressive Tax (c)Regressive Tax (d)Degressive Tax (xi)Which type of Fiscal policy should be adopted by the Government in the following situation? (a) Increases Taxe rate (b) Increases Repo rate (c) Increases Government Expenditure (d) Both (a) and (c) (xii) Read the following statement and choose the correct option: It is the central bank's job to control a country's economy through monetary policy; if the economy is moving slowly or going backward, there are steps that central bank can take to boost the economy. The step is: 3 (a) Increase Repo Rate (b) Increase Reverse Repo Rate (c) Purchase Government bond in Money and Capital Market (d) Sale Government bond in Money and Capital Market (xiii)Reliance Digital has given Diwali Offer on these products. Identify the product for which there is a probability of highest sale.: Consumer s Down payment % Interest No Of durable products out of total price Instalments Mobile Phone 10% 10% 24 Months Laptop 15% 10% 12 to 15 Months Refrigerator 12% 9% 12 Months Smart TV 20% 15% 8 Months (a) Smart TV (b) Refrigerator (c) Mobile Phone (d) Laptop (xiv) Assertion: If the total investment in any country is more than the cost of physical wear and tear of capital goods, then there will be net capital formation. Reason: It refers to the process of net addition to the existing stock of capital over a period. (a) A is true but R is false (b) A is false but R is true (c) Both A and R are true, and R explains A (d) Both A and R are true, but R does not explain A (xv) Due to 8% rise in the price of the product, the demand falls by 1%. Which of the following product has this type of demand elasticity: (a) Dimond ring (b) Soap (c) Washing machine (d) Gas Cylinder (xvi)Identify the form of capital (a)Fixed capital (b) Money capital (c) Circulating capital (d) Social capital (xvii)Observe the relationship of the first pair of words and complete the second pair: Land is a means of production where . is both the means and ends of production. 4 (a) Labour (b) Capital (c) Raw materials (d) Entrepreneur (xviii) Assertion (A): Central Bank as a banker to the government, works as a custodian of cash reserves. Reason (R): The Central Bank acts as a clearinghouse for the transfer and settlement of mutual claims of Commercial Banks. (a) A is true but R is false (b) A is false but R is true (c) Both A and R are true, and R explains A (d) Both A and R are true, but R does not explain A (xix)Investors have been brought enthusiastically in India s public sector and have been rewarded for their efforts. Which objective of Government is getting satisfied in the statement? (a) Reduce competitive environment (b) To overcome budget deficit (c) To generate more employment opportunity (d) Both (b) and (c) (xx) Monopoly is a form of Buyer s Market. (a) True (b) False Question-2 (i)Fill in the blanks: CHANGE IN GENERAL PRICE LEVEL/ PER ANNUM [2] TYPES OF INFLATION 10% to 20% 2% to 2.5% 3% to 5% 100% and above (ii) Explain how Money can determine the employment of factor inputs in the market? [2] (iii) Read the passage and answer the following: For availing a gold loan, Muthoot Finance has reduced the loan-to-value ratio for gold loans from 75% to in 73%. Identify the situation when the institution is compelled to do so. [2] (iv) Differentiate between Impact and Incidence of tax. [2] (v) What will be the impact of Inflation on export sector of a country? [2] Question-3 (i) Read the passage and answer the following: 5 Inflation uncertainty is both the cause and result of inflation. Inflation uncertainty is considered one of the major costs of inflation since it not only distorts the decisions regarding future saving and investment due to lower predictability of the real value of future nominal payments, but it also extends the adverse effects of these distortions to the efficiency of resource allocation and the level of real activity. Do you believe that Inflation distorts future savings? [2] (ii) What is meant by non-Price competition? In which market this type of competition exists? [2] (iii) How does Central Bank act as custodian of foreign exchange reserve. [2] (iv) State two differences between the following diagrams: [2] Fig:1 Fig:2 (v) The efficiency of workers in India is observed to be lower than that in USA. Identify the possible reasons for it. [2] SECTION-B (60 Marks) Attempt any four questions. Question-4 (i) Consumers had money to spend, but there weren't enough goods to spend it on. Money printing and government spending increase aggregate demand that drove the inflating economy. Inflation increases along with National Income. (a)Identify the type of Inflation mentioned in the above passage. (b)Why does Inflation increase with national income? (c)Which fiscal policy (any two) will be undertaken by the Government to control this situation? [7] (ii) (a) Suppose A buys goods from B, he may not pay B immediately instead give B a bill of exchange stating the amount of money owed and the time when A will settle the debt. Now, B needs money immediately, so he will present this bill to the bank for discounting. Explain how bank will take part in this transaction. (b) Differentiate between Demand Deposit and Time Deposit. (c) Explain the features of the following type of loan. [8] 6 Question-5 (i) Disinvestments of government shareholdings in Central Public Enterprises (CPEs) started in 1991-92 as an integral part of the process of economic reforms. The total realization from disinvestments up to2004-05, from about 50 enterprises, had been Rs. 47,645 crores against the target of Rs. 96,800 crores. (a)What is meant by Disinvestment Policy? (b) State the objective of this Policy. (c) Identify the possible reasons (any two) for this economic reform policy. [7] (ii) When individuals work on a specific part in the production process, there is an observed improvement in output and competency. When many people work on the main task, there is a possibility of laxity and incompetence among workers. (a)Argue for or against the statement. (b)Explain the meaning of real capital. [8] Question-6 (i) (a)Identify the factor of production with logical explanation. (b)Explain the characteristics (any four) of it. (ii) (a) Identify the form of market for the above-mentioned goods and services. 7 [7] (b) Explain why you believe that Goods and Services belong to that form of market. (c) Explain any three features of this market form. [8] Question-7 (i) Explain how the following factors influence the elasticity of demand (a) Nature of the commodity (b) Proportion of expenditure in household budget (c) The price elasticity of demand of Good X is half the price elasticity of demand of Good Y.A 25% rise in price of Good Y reduces its demand from 400 to 300 units. What will be the percentage change in demand of Good X when its price falls from 10 to 8 per unit? [7] (ii) (a) Explain the role of an entrepreneur (any three) in economic development. (b) Access to secure land and housing is a precondition for reducing poverty, yet many millions of people live under the daily threat of eviction, or without sufficient security to invest what they have in improving their homes. Assessing the nature and scale of the problem is fraught with difficulties of definition as well as measurement. All attempts to assess the number of people globally who suffer from insecure land tenure and restricted rights have achieved limited success. What will be the impact of such issue on production in primary sector? [8] Question-8 (i) Introduction of new technology increases marginal product. (a) How would it affect Supply curve of a firm? (b) Will the seller always be ready to sell more of a commodity at a higher price in the market? (c) Identify two such situations when elasticity of supply is lower when there is substantial rise in the price due to rise in the demand for a commodity. [7] (ii) (a)Explain how money can be used to make future payment. (b)Explain the impact of Inflation on the following: (i)Debtors and Creditors (ii)Fixed Income earners (iii)Production Question-9 (i) (a) Differentiate between proportional tax and progressive tax. (b) Why is indirect tax regressive in nature? (c) Explain the role of public sector (any two) in economic development. (ii)Read the following passage and answer the questions: [8] [7] Is central bank independence an effective tool to control inflation in developing countries? Price stability is the major monetary policy objective of most central banks. The motivation behind this objective is the widely studied notion that inflation, above a certain threshold, is detrimental to the real economy (Sidrauski, 1967; Tobin, 1965).1 Developing countries are especially vulnerable to the negative effects of high inflation (Bick, 2010; Bittencourt, 2012; Burdekin et al., 2004; Ibarra and Trupkin, 2016; Kremer et al., 2013, among others). Therefore, much research has been devoted to find policies and institutions that promote price stability. Since the late 1980s, central bank independence that is, allowing central banks to control monetary instruments without political interference became the key institutional recipe to fight inflation, and inspired a wave of reforms 8 in central banks around the world (Goodfriend, 2007). Although most countries granted more independence to their central banks, there is no conclusive evidence of a general negative relationship between central bank independence and inflation for developing countries (Alpanda and Honig, 2014; Cukierman, 1992; Neyapti, 2012). (a)Explain how Central Bank can influence the price stability by using the following monetary variables: (i)Reverse Repo Rate (ii)Open Market Operation (b)Identify the reason why higher rate of inflation is detrimental to real economy. (c)Does inflation always affect Economy adversely? [8] 9

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