2nd PUC

Students can Download 2nd PUC Accountancy Model Question Paper 2 with Answers, Karnataka 2nd PUC Accountancy Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Accountancy Model Question Paper 2 with Answers

Time: 3 Hrs 15 Min
Max. Marks: 100

Instructions: –

1. All sub questions of Section – A should be answered continuously at one place.
2. Provide working notes wherever necessary.
3. 15 minutes extra time has been allotted for the candidates to read the questions.
4. Figures in the right hand margin indicates full marks.

Section – A

I. Answer any Eight questions, each question carries One mark : ( 8 × 1 = 08 )

Question 1.
Receipt and payment account is a summary of all capital receipts and payments (state true / false)
Answer:
False

Question 2.
State any one feature of partnership.
Answer:
Nature of the business/Profit or loss sharing ratio.

Question 3.
At the time of admission of a new partner, general reserve appearing in the old balance sheet is transferred to:
(a) All partner capital accounts
(b) New partner’s capital A/c
(c) Old partners capital A/c
(d) None of the above
Answer:
Old partners capital A/c

Question 4.
Why gain ratio is required on retirement of a partners?
Answer:
For the purpose of writing off the goodwill created to the extent of retiring partner’s share.

Question 5.
………………. is minimum numbers of members in a public Ltd., company.
Answer:
Seven

Question 6.
Debenture holder are ………………. of the company.
Answer:
Creditors

Question 7.
Expand EBIT.
Answer:
Earning before interest and tax.

Question 8.
The financial statement of a business enterprise include.
(a) Balance sheet
(b) Statement of profit and loss
(c) Cash flow statement
(d) All of the above
Answer:
All of the above

Question 9.
Name any one type of Turnover Ratio.
Answer:
Inventory turnover ratio

Question 10.
Give an example for investing activities.
Answer:
Cash payments to acquire fixed assets.

Section – B

II. Answer any Five questions, each question carries Two marks : ( 5 x 2 = 10 )

Question 11.
State any two features of receipts and payments a/c.
Answer:
Features of receipts and payments account:

1. it is a real account
2. It is prepared on cash system of accounting.

Question 12.
Name any two methods for calculation of interest on drawings.

Fixed capital system	Fluctuating capital system
Two separate accounts are maintained for each partner i.e., capital account and current account.	Each partner has one account, i.e., capital account.
Capital account balance remains unchanged unless there is addition to or withdraw of capital	Capital account balance fluctuates from year to year.

Question 13.
What is Revaluation A/c?
Answer:
Revaluation account is an account prepared in connected with recording of increase or decrease in the value of assets and liabilities and to find out the profit or loss on revaluation.

Question 14.
Give the meaning of Realisation Account.
Answer:
Realisation account is an account prepared at the time of dissolution of a firm to ascertain the profit or loss on the realisation of assets and payment of liabilities.

Question 15.
State any two types of issue of shares.
Answer:
Preference shares
Equity shares.

Question 16.
List any two objective of financial statements.
Answer:
Two objectives of financial statements:

1. To present a true and fair view of the financial performance, ie., profit / loss of the business
2. To provide information about cash flows.

Question 17.
What is Trend Analysis?
Answer:
It is a financial statement analysis method that determines the direction upwards or downwards and involves computation of percentage relationship that each statement items bear to the same item in the base year. .
Or
It is a financial statement analysis technique that shows changes in the amounts of corresponding • financial statement items over a period of time.

Question 18.
What is cash flow statement?
Answer:
A cash flow statement is a statement showing inflows (receipts) and outflows (payments) of cash during a particular period.

Section – C

III. Answer any Four questions, each question carries Six marks : ( 4 x 6 = 24 )

Question 19.
Anita and Kavita are partners sharing profits in the ratio 3 : 2 with capital of ₹ 1,00,000 and ₹ 60,000 respectively. Interest on capital is agreed at 6% per annum. Kavita is to be allowed an annual salary of ₹ 5,000. During the year Anita withdrew ₹ 10,000 and Kavita ₹ 5,000 for personal use. The interest on the same being ₹ 1000 and ₹ 500 respectively. The profit for the year ending March 31, 2018, amounted ₹ 25,000.
Prepare profit and loss appropriation account.
Answer:
Profit and loss appropriation a/c for the year ending 31st March 2018

Question 20.
Prakash and Akash are partners sharing profits and losses in the ratio of 3 : 2. They admitted Ramesh into the partnership giving him 1/5th share which he acquire from Prakash and Akash in 2:1 ratio.
Calculate New Profit Sharing Ratio.
Answer:
Share sacrificed = Sacrifice Ratio x New Partner’s share

New share = Old share – Share sacrificed

Ramesh = \(\frac{1}{5}\) i.e., \(\frac{3}{15}\) [NPSR =7 : 5 : 3]

Question 21.
Akash, Anil and Adarsh are partners sharing profits and losses in the ratio of 3 : 2 : 1. Their capitals as on 01.04.2017 were ₹ 70,000, ₹ 90,000 and ₹ 60,000 respectively. Akash died on 31.12.2017 and the partnership deed provided the following:
a. Interest on capital at 8% p.a.
b. Akash’s salary ₹ 2,000 per month.
c. His share of accrued profit upto the date of death based on previous years profit. Firm’s
profit for 2016-17 ₹ 24,000.
d. His share of goodwill ₹ 12,000.
Ascertain the amount payable to Akash’s excecutor by preparing Akash1’s Capital A/c

Question 22.
A company Ltd issued 20,000,12% debentures of ₹ 100 each at a premium of ₹ 10 per debenture payable as follows:
On application ₹ 30
On allotment ₹ 60 (Including premium)
On first and final call ₹ 20.
All the debentures were subscribed and the money duly received.
Pass the journal enters upto the stage of first and final call money due.
Answer:

Question 23.
From the following information extracted from the books of Karnataka Ltd. Prepare Balance Sheet of the company as at 31.03.2017 as per schedule. III of the companies act of 2013.
Tab;le
Answer:

Question 24.
Current Ratio is 3 : 2 and working capital is ₹ 1,00,000. Calculate the amount of current assets
and current liabilities.
Answer:

Given →p Current Ratio =3 : 2
Working Caphal = Current assets – Current Liabilities
1,00,000 = 3 – 2, 1,00,000=1
∴ Current Assets = 1,00,000 x \(\frac{3}{1}\) = 3,00,000
∴ Current Assets = 1,00,000 x \(\frac{3}{1}\) = 3,00,000

Question 25.
From the following information calculate cash flows from financing activities

During the year secured loan repaid ₹ 4,00,000 with interest of ₹ 20,000 and received dividend of ₹ 50,000
Answer:
Cash Flows from financial activities

[Note : As per AS – 3 (Revised] Cash inflow arising from interest and dividend received should be shown as cash flow from investing activities]

Section – D

VI. Answer any Four questions, each question carries Twelve marks : ( 4 x 12 = 48 )

Question 26.
Following are the Balance Sheet and Receipts and Payments Account of Sharada Education Society:

Adjustments:
1. Audit fees ₹ 2500 still due.
2. Charge ₹ 250 as deprecation on furniture
3. Half of the donation is to be considered as revenue
4. Outstanding Subscriptions ₹ 2000 and Subscriptions received in advance ₹ 1500 Prepare
(a) Income and Expenditure account.
(b) Balance Sheet as on 31-3-2018.
Answer:

Working Notes:
Calculation of O/s Interest on Govt. Bonds

Question 27.
Digvijay, Brijesh and Parakram were partners in a firm sharing profits in the ratio of 2:2 :1. Their balance sheet as on March 31,2018 was as follows.
Answer:

Brijesh retired on March 31.2018 on the following terms.
1. Goodwill of the firms was valued at ₹ 60,000 and goodwill account to be raised to the extent of retiring partner’s share and Written off immediately.
2. Bad debts amounting to ₹ 2,000 were to be written off.
3. Patents were considered as valueless.
Prepare:
(i) Revaluation Account
(ii) Partners Capital AccoOnts and
(iii) Balance Sheet of Digvijay and Parakram after Brjesh retirement.
Answer:

Question 28.
Anita and Sunita are partners sharing Profits and Losses equally. Their balance sheet as on 3 1.03.2018 was as follows:

On the above date the firm was dissolved The folloiing information is available:
a. Assets realised as follows : Debtors ₹ 25,600, Stock ₹ 39,000 Building ₹ 66,000
b. Anita took over 50% of Investments at 10% less on its book value and remaining
Investments was sold at a gain of 20%.
c. Furniture was taken over by Sunita at ₹ 12,000
d. Realization expenses amounted to ₹ 2,000
Prepare:
(a) Realization A/c
(b) Partners’ Capital Accounts
(c) Cash A/c
Answer:

Question 29.
ABC Company Ltd., Issued 20,000 equity shares of ₹ 10 each The amount was payable as follows:
On application ₹ 2
On allotment ₹ 3
On first and find call ₹ 5.
All the shares were subscribed Akash holding 500 shares did not pay first and final call money.
The directors forfeited his shares and these shares were re-issued to Sagar at ₹ 7 per share as fully paid up.
Give the necessary journal entries in the book of the company.
Answer:
Journal Entries in the books of ABC company Ltd.

Question 30.
X Ltd issued 2,000 , 10% debentures of ₹ 100 each on 1.4.2017 at a discount or lUYo and
redeemable at premium of 10%.
Give journal entries relating to the issue of debentures and debenture interest fo the period
ending March 31,2018 assuring that interest was paid half yearly on September30 and March
31 and tax deducted at source is 10%.
Answer:

Question 31.
Prepare Common size Balance sheet of Bombay Textile Ltd From the following information:

Answer:

Question 32
From the following Particulars calculate:
a. Net – asset turnover ratio
b. Fixed asset turnover ratio
c. Working capital turnover ratio
d. Operating profit ratio
e. Return on capital employed ratio
f. Earning per share ratio.

Particular	₹
Revenue from operations	15,00,000
Net fixed assets	50,00,000
Working capital	10,00,000
Operating Profit	5,00,000
Profit after interest & tax	3,00,000
Interest and tax expenses	2,00,000
Dividend paid t preference shares	1,00,000
Capital employed	40,00,000

Answer:

Section – E
(Practical Oriented Questions)

V. Answer any Two questions, each question carries Five marks: ( 2 X 5 10 )

Question 33.
Classify the following items into capital and Revenue
a. X-Ray plant purchased by a hospital.
b. Interest received.
e. Sale of old sports materials.
d. Carriage paid on goods purchased.
e. Donation received for constructing a swimming Pool.
Answer:
a. Capital
b. Revenue
c. Capital
d. Revenue
e. Capital

Question 34.
Prepare Executors loan Account with imaginary figures showing the repayment in two annual equal installments along with interest.
Answer:

Question 35.
‘Write the Proforma of cash flows from operating activities under Direct method.
Answer:
Cash flows from operating Activities (Direct method)

Students can Download 2nd PUC Accountancy Previous Year Question Paper March 2019, Karnataka 2nd PUC Accountancy Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Accountancy Previous Year Question Paper March 2019

Time: 3 Hrs 15 Min
Max. Marks: 100

Instructions: –

1. All sub questions of Section – A should be answered continuously at one place.
2. Provide working notes wherever necessary.
3. 15 minutes extra time has been allotted for the candidates to read the questions.
4. Figures in the right hand margin indicates full marks.

Section – A

I. Answer any Eight questions, each question carries One mark : (8 × 1 = 8)

Question 1.
Government grant is treated as __________ receipt.
Answer:
Revenue receipt.

Question 2.
When the partners current accounts are prepared in partnership firm?
Answer:
Partners current account is prepared when the partners maintain their capital under Fixed Capital Method.

Question 3.
If the amount brought by a new partner is more than his share in capital, the excess is known as ___________
Answer:
Hidden Goodwill

Question 4.
Give the formula for calculation of new profit sharing ratio on retirement of a partner.
Answer:
New profit ratio = Old Ratio + Gain Ratio.

Question 5.
What is buy-back of shares?
Answer:
Buy – back of shares :
Also known as repurchase of shares by the company that issued them or purchase of its own shares from the market.

Question 6.
Debentures cannot be redeemed out of:
(a) Profits
(b) Provisions
(c) Capital
(d) All the above
Answer:
(b) Provisions

Question 7.
Financial statements generally include:
(a) Comparative statement
(b) Fund flow statement
(c) Income statement and balance sheet
(d) None of the above
Answer:
(c) Income statement and balance sheet

Question 8.
Financial analysis is used only by the creditors. State True / False.
Answer:
False.

Question 9.
Give one example for current liability.
Answer:
Current liabilities → Creditors, Bills payable, Short term provisions, Short term borrowings.

Question 10.
Expand ICAI.
Answer:
The Institute of chartered Accountants of India.

Section – B

II. Answer any Five questions, each question carries Two marks : (5 × 2 = 10)

Question 11.
State any two features of Receipts and Payments account.
Answer:
Features of receipts and payments account
(a) It is real account
(b)It is prepared on cash system of accounting.

Question 12.
Name any two contents of partnership deed.
Answer:
contents of partnership deed.
(a) Name and addresses of the firm
(b)Name and address of all the partners or any other

Question 13.
Goodwill of the firm is valued at two years purchase of the average profit of last four years. The total profits for last four years is ? 40,000.
Calculate the goodwill of the firm.
Answer:
Calculation of Good will:
Good will = Average profit of last 4 year x Number of years of purchase of Average profits.
Average profits = \(\frac { 40,000 }{ 4 }\) = Rs. 10000
Good will = Rs. 10,000 × 2 year purchase = Rs. 20,000

Question 14.
Give the Journal entry for the asset taken over by a partner in case of dissolution of partnership firm.
Answer:
Partner capital account Dr.
To Realisation A/c

Question 15.
What is forfeiture of shares?
Answer:
Forfeiture of shares means cancellation of the rights of the shareholders on the shares held by him for Non payment of allotment money or call money or both, on such shares.

Question 16.
Give the meaning of financial statements.
Answer:
Financial statements are the basic and formal annual reports through which the company communicates financial information to its owners and other stake holders/extemal parties.

Question 17.
List out any two techniques of financial statement analysis.
Answer:

1. Comparitive statements
2. common size statements
3. Trend and ratio analysis

Question 18.
Mention any two activities which are classified as per AS – 3.
Answer:
The two activities classified as per AS – 3 are

1. Operating Activities
2. Investing activities.

Section – C

III. Answer any Four questions, each question carries Six marks : (4 × 6 = 24)

Question 19.
Yashas and Abhi are partners in a firm, sharing profits and losses in the ratio of 2:1. Yashas withdrew the following amounts during the year 2017-18 are given as under:
₹ 4,000 on 1.6.2017
₹ 10,000 on 30.09.2017
₹ 6,000 on 30.11.2017
₹ 12,000 on 1.1.2018
Interest on drawings is to be charged at 8% p.a.
Calculate the amount of interest to be charged on Yashas drawings for the year ending 31.3.2018.
Answer:
Calculation of Yashas interest on Drawing for the year ending 31.3.2018

Interest on Drawings = Total product \(\times \frac{\text { Rate }}{100} \times \frac{1}{12}=1,60,000 \times \frac{8}{100} \times \frac{1}{2}\) = Rs. 1067

Question 20.
Swarna, Swapna and Vidya are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Vidya retires from the firm. Swarna and Swapna agreed to share equally in future.
Calculate the gain ratio of Swarna and Swapna.
Answer:
Calculation of Gain Ratio :

∴ Gain Ratio =1:3

Question 21.
Shobha, Sudha and Rathna are partners. Sharing profits and losses in the ratio 2:2:1.
Their Balance sheet as on 31.03.2018 was as follows:

Rathna died on 30.06.2018. Her executor’s should be entitled to :
(a) Her capital on the date of last Balance sheet.
(b) Her share of reserve fund on the date of last Balance sheet.
(c) Her share of profit up to the date of death, on the basis of previous year’s profit. Previous year profit is Rs. 20,000.
(d) Her share of goodwill. Goodwill of the firm is valued at Rs. 40,000.
(e) Interest on capital at 10% p.a
You are required to ascertain amount payable executors of Rathna by preparing Rathna’s capital account. .
Answer:

Question 22.
Ganesh co., ltd., purchased assets of the book value of Rs. 99,000 from another firm. It was agreed that purchase consideration be paid by issuing 11% debenture of Rs. 100 each. Assume debentures have been issued.
(a) At par
(b) At discount of 10% and
(c) At a premium of 10%
Record necessary Journal entries.
Answer:

Question 23.
From the following information, prepare statement of profit and loss for the year ended 31.03.2018 as per schedule – III of the companies Act. 2013.
Answer:

Answer:

Question 24.
Calculate current ratio and Liquid ratio from the following information :

Answer:
Calculation of Ratios:

Current Liabilities Rs.50,000
Note: Current Assets = Trade receivable + Cash in hand + cash at Bank + Inventories + Advance Tax
= 30000+ 10000+ 10000+ 20000+ 10000 = Rs.80,000

Note: Liquid / Quick assets = Current assets – Stock – Prepaid expenses
= Rs. 80,000 – 20,000 – 10,000 = Rs. 50,000

Question 25.
Mangala ltd. arrived at a Net income of Rs. 5,00,000 for the year ended 31.03.2018. Depreciation for the year was Rs. 2,00,000. There was a profit of Rs. 50,000 on assets sold which was transferred to statement of profit and loss. Trade receivable increased during the year Rs. 40,000 and Trade payables also increased by Rs. 60,000.
Compute cash flow from operating activities by the indirect method.
Answer:

Section-D

VI. Answer any four questions, each question carries Twelve marks : (4 × 12 = 48)

Question 26.
From the following Receipts and payments account and Balance sheet of union club, prepare Income and Expenditure account for the year ended 31.03.2018 and the Balance sheet as on that date.

Receipts and payments a/c for the year ended 31.03.2018

Adjustments:
(a) Subscription outstanding on 31 March, 2018 ₹ 10,000.
(b) Salary outstanding on 31 March, 2018 ₹ 1,000.
(c) Depreciate furniture and Books at 10% each (only on opening Balances)
(d) Donation to be capitalised.
(e) Electricity charges paid in Advance ₹ 650.
Answer:

Question 27.
Given below is the Balance sheet of Kumar of Kumar and Rajashekar, who are carrying on partnership business as on 31 March, 2018. Kumar and Rajashekar share profits and losses in the ratio of 2 :1.


Shamanth is admitted as a partner on the date of the Balance sheet on the following terms.
(a) Shamanth bring in Rs. 1,00,000 as his capital and Rs, 60,000 as his share of goodwill for l/4th share in profits.
(b) Plant is to be appreciated to Rs. 1,20,000 and the value of Building is to be appreciated by 10%.
(c) Stock is found over valued by Rs. 5,000.
(d) A provision for Doubtful debts is to be created at 5% on Debtors. Prepare Revaluation account, partners capital accounts and Balance sheet of the constituted firm after admission of the new partner.
Answer:

Question 28.
Rekah and Chetana sharing profits as 3 :1 and they agree upon dissolution. The balance sheet as on 31 March, 2018 is as under :

Additional information:
(a) Rekah took over plant and Machinery at an agreed value of ₹ 12,000.
(b) Stock and furniture were sold for f 8,400 and ₹ 2,780 respectively.
(c) Debtors were taken over by Chetana at ₹ 13,000.
(d) Liabilities were paid in full by the firm.
(e) Realisation expenses were ₹ 320.
Prepare:
(a) Realisation A/c
(b) Partners’ Capital Accounts and
(c) Bank A/c
Answer:

Question 29.
Vigneshwara Trading Co., Ltd., issued 10,000 ordinary shares of ₹ 100 each, at a premium of ₹ 10 per share. The amount payable is as follows:
On application ₹ 20
On Allotment ₹ 40 (including premium)
On First and final call ₹ 50.
All the shares were subscribed and the money duly received except the first and final call on 500 shares. The directors forfeited there shares and re-issued them as fully paid at ? 80 per share.
Pass the necessary Journal entries in the books of the company.
Answer:

Question 30.
Give the Journal entries for issue of Debentures for the following cases in the Books of Reliance co., Ltd. .
(a) Issue of ₹ 2,00,000,9% Debentures of ₹ 100 each at par and redeemable at par.
(b) Issue of ₹ 2,00,000,10% Debentures of ₹ 100 each at a premium of 5% but redeemable at par.
(c) Issue of ₹ 2,00,000,12% Debentures of ₹ 100 each at a discount of 5%, redeemable at par.
(d) Issue of ₹ 2,00,000, 8% Debentures of ₹ 100 each at par but redeemable at a premium of 5%.
Answer:

Question 31.
From the following information, prepare comparative Balance sheet of Honda company Ltd.,

Answer:

Question 32.
From the following particulars calculate:
(a) Inventory turn over ratio.
(b) Trade receivable turn over ratio
(c) Trade payable turn over ratio
(d) Gross profit ratio
(e) Operating ratio
(f) Net profit ratio.

Answer:

Section-E
(Practical Oriented Questions)

V. Answer any Two questions, each question carries Five marks: (2 × 5 = 10)

Question 33.
Write two partners capital accounts under fluctuating capital system with 5 imaginary figure.
Answer:

Question 34.
Prepare Executor’s loan account with imaginary figures showing the repayment in two annual equal installments along with interest.
Answer:

Question 35.
Name the major heads under which the following items will be presented in the Balance sheet of a company
(a) Share Capital
(b) Debentures
(c) Trade payables
(d) Furniture
(e) Inventory
Answer:

Students can Download 2nd PUC Economics Model Question Paper 4 with Answers, Karnataka 2nd PUC Economics Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Economics Model Question Paper 4 with Answers

Time: 3 hrs 15 minutes
Max. Marks: 100

PART-A

I. Choose the correct answer (1 × 5 = 5)

Question 1.
Traditionally, the subject matter of economics has been studied under the following broad branches.
(a) Micro and macroeconomics
(b) Positive and normative
(c) Deductive and inductive
(d) None of the above
Answer:
(a) Micro and macroeconomics

Question 2.
The increase in total revenue for a unit increase in the output is
(a) Marginal revenue
(b) Average revenue
(c) Total revenue
(d) Fixed revenue
Answer:
(a) Marginal revenue

Question 3.
The firms earn super normal profit as long as the price is greater than the minimum of
(a) Marginal cost
(b) Total cost
(c) Average cost
(d) Fixed cost
Answer:
(c) Average cost

Question 4.
The individuals or institutions which take economic decisions are:
(a) Economic variables
(b) Economic agents
(c) Economists
(d) None of the above
Answer:
(b) Economic agents

Question 5.
When demand exceeds the available output under conditions of high level of employment, this may give rise to
(a) Inflation
(b) Deflation
(c) Stabilisation
(d) None Of the above
Answer:
(a) Inflation

II. Fill in the blanks (1 × 5 = 5)

Question 6.
As income increases, the demand curve for normal goods shifts towards_______
Answer:
Right side.

Question 7.
For a price-taking firm marginal revenue is equal to______
Answer:
Market price.

Question 8.
Savings is that part of income that is______
Answer:
Not consumed.

Question 9.
Non-paying users of public goods are known as
Answer:
Free riders.

Question 10.
_______is a mixture of a flexible and fixed exchange rate system.
Answer:
Managed floating exchange rate.

III. Match the following: (1 × 5 = 5)

Question 11.

Answer:
1-e;2-a; 3-b; 4-c; 5-d.

IV. Answer the following questions in a sentence or a word each. (1 × 5 = 5)

Question 12.
Define marginal revenue.
Answer:
Marginal revenue of a firm is defined as the increase in total revenue for a unit increase in the firm’s output. It is obtained by dividing the change in total revenue by change in quantity.

Question 13.
What is duopoly?
Answer:
It is a market with two sellers or firms with many buyers. It is special case of oligopoly market.

Question 14.
What do you mean by final goods?
Answer:
These are the goods which are meant for final use and will not pass through any more stages of production or transformations.

Question 15.
Give the meaning of marginal propensity to save (MPS).
Answer:
It is the change in savings per unit change in income. It is denoted by ‘S’ and is equal to 1-c.

Question 16.
Give the meaning of official reserve sale.
Answer:
When the Reserve Bank of India sells foreign exchange when there is deficit balance of payments, it is called official reserve sale.

PART-B

V. Answer any NINE of the following in 4 sentences each. (2 × 9 = 18)

Question 17.
What is MRS?
Answer:
MRS is the rate at which the consumer will substitute one product for another so that her total utility remains constant. It can be represented as follows:
MRS = ∆Y/∆X

Question 18.
What are the differences between budget line and budget set?
Answer:

Budget Line	Budget Set
• It is locus of different combinations of the two goods which the consumer consumes and whose price exactly equals his income. • It is also known as price line.	• It is a collection of all bundles available to a Consumer at the existing price at his given level of income. • It is also known as opportunity set.

Question 19.
Give the meaning of the concepts of short run and long run.
Answer:
The concepts of short-run and long run are defined aa a period simply by looking at whether all the inputs can be varied or not. It is not advisable to define short run and long run in terms of days, months or years.

In the short run, at least one of the factor – labour or capital cannot be varied and therefore, remains fixed. In order to vary the output level, the firm can vary only the other factor. The factor that remains fixed is called the fixed factor and the other factor which the firm can vary is called the variable factor.

In the long run, all factors of production can be varied. A firm in order to produce different levels of output, in the long run, may vary both the inputs simultaneously. So, in the long run there is no fixed factor.

Question 20.
State the conditions needed for profit by a firm under perfect competition.
Answer:
The following conditions needed for profit by a firm under perfect competition:

• The Price P must be equal to MC.
• Marginal cost must be non-decreasing at q₀.
• The firm to continue to produce, in the short run, price must be greater than the average variable cost and in the long run, price must be greater than the average cost.

Question 21.
Give the meaning of shut down point.
Answer:
In the short run, the shut down point is that point of minimum average variable cost where short run marginal cost curve cuts the average variable cost curve. In the long run, the shut down point is the minimum of long run average cost curve.

Question 22.
Write any two possible ways in which simultaneous shift of both demand and supply curve.
Answer:
The simultaneous shifts can happen in four possible ways:

1. Both supply and demand curves shift rightwards.
2. Both supply and demand curves shift leftwards.
3. Supply curve shifts leftward and demand curve shifts rightward
4. Supply curve shifts rightward and demand curve shifts leftward.

Question 23.
Write the equation of GDP_MP and GDP_FC.
Answer:
The equations of GDP and market prices (GDP_MP), and GDP at factor cost (GDP_FC) are as follows:
GDP_MP = C + I + G + X-M
Where, C is consumption expenditure, I is investment expenditure; G is government’s consumption and investment expenditure; X is exports and M is imports.
GDP_FC = GDP_MP – NIT (where, NIT is net indirect taxes).

Question 24.
Write the difference between nominal and real GDP.
Answer:

Nominal GDP	Real GDP
• It is the value of GDP at current prevail­ing prices	• It is evaluated at constant set of prices, i.e. by keeping base year’s price index
• It is not reliable	• It is reliable
• It does not give real picture of economic development of a country	• It gives real picture of economic development of a country

Question 25.
Differentiate the meaning of CRR and SLR.
Answer:
The cash reserve ratio (CRR) is a certain percentage of bank deposits which a commercial bank is required to keep as cash reserves with itself.

The statutory liquidity ratio (SLR) refers to the ratio of deposits which the commercial banks have to maintain a certain percentage of their total deposits and time deposits with themselves in the form of liquid assets, as per the directions of RBI.

Question 26.
Distinguish between excess demand and deficient demand.
Answer:
If the equilibrium level of output is more than the full employment level; it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called excess demand.

If the equilibrium level of output is less than the full employment of output, it is due to fact that demand is not enough to employ all factors of production. This situation is called deficient demand.

Question 27.
Mention the non-tax revenues of the central government.
Answer:
The non-tax revenues of the central government mainly consist of the following:

1. Interest receipts on account of loans by the central government.
2. Dividends and profits on investments made by the government.
3. Fees and other receipts for services rendered by the government.
4. Grants-in-aid from foreign countries and international organizations.

Question 28.
Who are free riders? Why are they called so?
Answer:
If some users do not pay and it is difficult, and sometimes impossible to collect fees for the public good, such run paying users are known as free riders.

They are called so because consumers will not voluntarily pay for what they can get for free and for which there is no exclusive title (ownership) to the property being enjoyed.

Question 29.
When do surplus and deficit arise in capital account?
Answer:
Surplus in capital account arises when the capital inflows are greater than capital outflows. Deficit in capital account arises when capital inflows are lesser than capital outflows.

Question 30.
Differentiate between depreciation and devaluation.
Answer:
The difference between depreciation and devaluation is as follows:

Depreciation	Devaluation
• Here the price of foreign currency in terms of domestic currency increases.	• Here, the government deliberately makes the domestic currency cheaper by increasing exchange rate.
• It happens because of market forces, i.e. demand for foreign exchange and supply of foreign exchange.	• It is a deliberate action of government.

PART-C

VI. Answer any SEVEN of the following questions in 12 sentences each. (4 × 7 = 28)

Question 31.
Write a short note on a centrally planned economy.
Answer:
A planned economy also called as socialistic economy is that economy where the economic activities are controlled by the central government. Here, the government takes decisions about the allocation of resources in accordance with objectives to attain economic and social welfare. Examples are Russia, China, North Korea, etc.

In centrally planned economy, the government takes decisions about the allocation of resources in accordance with the predetermined goals and objectives to attain maximum social welfare. Government decides what to produce? how to produce? and what prices are to be fixed? In a centrally planned economy, the basic economic problems are solved as follows:

1. Regarding what to produce, the government may produce those goods and services which are most useful for its society.
2. Regarding how to produce, the most suitable technique in production is adopted whether labour intensive or capital intensive in accordance with the situation in the economy.
3. Regarding whom to produce, the goods and services are produced to those people who are suffering from hunger though there is a loss.
4. It gives importance to the quality of life rather than quantity of production.
5. It focuses the resources on rapid economic development.

Question 32.
Briefly explain the budget set with the help of a diagram.
Answer:
The budget set is the collection of products that the consumer can buy with is income at the prevailing market prices. The budget set is also known as opportunity set. It includes all the bundles (all possible combination of two goods) which the consumer can purchase with his given level of income.
The budget equation can be written as follows:
P₁X₁ + P₂ X₂ ≤ M.
Consider, for example, a consumer who has Rs?20 and suppose both the goods are priced at Rs.5 and are available only in integral units. The bundles that this consumer can afford to buy are (0,0), (0,1), (0,2), (0,3), (0,4), (1,0), (1,1), (1,2), (1,3), (2,0), (2,1), (2,2), (3,0), (3,1) and (4,0).

Among these bundles, (0,4), (1,3), (2,0), (2,2), (3,1) and (4,0) cost exactly Rs.20 and all the other bundles cost less than Rs.20. If both the goods are perfectly divisible, the consumer’s budget set would consist of all bundles (x₁, x₂) such that x₁ and x₂ are any numbers greater than or equal to 0 and P₁X₁ + P₂ X₂≤ M.
The budget set can be represented in a diagram as follows:

Quantity of bananas is measured along the horizontal axis and quantity of mangoes is measured along the vertical axis. Any point in the diagram represents a bundle of the two goods. The budget set consists of all points on or below the straight line having the equation P₁X₁ + P₂ X₂≤ M.

Question 33.
The following table gives the TP schedule of labour. Find the corresponding average product and marginal product schedules.

Answer:
Calculation of average product (AP) and marginal product (MP). AP is obtained by dividing TPL by labour (L) and MP is obtained from TPL with the help of formula TC_n – TC_n-1

Question 34.
Explain the long-run costs.
Answer:
In the long run, all inputs are variable. There are no fixed costs, the total cost and the total variable cost coincide in the long run. There are two types of long-run costs. They are as follows:

1. Long-run average cost (LRAC):
The long-run average cost is the cost per unit of output produced. It is obtained by dividing the total cost by the output produced. It can be calculated as follows:
LRAC = TC/q
Where, TC is total cost and ‘q’ is quantity of output produced.

2. Long-run marginal cost:
The long-run marginal cost is the change in total cost per unit of change in output. When output changes in discrete units, then, if we increase production from q₁ – 1 to q₁ units of output, the marginal cost of producing q₁^th unit will be measured as follows:
LRMC = (TC at q1 units) – (TC at q₁ – 1 units) or LRMC – TC_n – TC_n-1

Question 35.
Discuss the determinants of a firm’s supply curve.
Answer:
A firm’s marginal cost curve is a part of its marginal cost curve. Any factor that affects a firm’s marginal cost curve is a determinant of its supply curve. Following are the two factors determining a firm’s supply curve:

a. Technological progress:
The organisational innovation by the firm leads to more production of output. That means, to produce a given level of output, the organizational innovation allows the firm to use fewer units of inputs. It is expected that this will lower the firm’s marginal cost at any level of output, i.e. there is a rightward shift of the MC curve. As the firm’s supply curve is essentially a segment of the MC curve, technological progress shifts the supply curve of the firm to the right. At any given market price, the firm now supplies more quantity of output.

b. Input prices:
A change in the prices of factors of production (inputs) also influences a firm’s supply curve. If the price of input (e.g. wage) increases, the cost of production also increases. The consequent increase in the firm’s average cost at any level of output is usually accompanied by an increase in the firm’s marginal cost at any level of output which leads to upward shift of the MC curve. That means, the firm’s supply curve shifts to the left and the firm produces less quantity of output.

Question 36.
Explain the features of perfect competition.
Answer:
Perfect competition is a market where there will be existence of large number of buyers and sellers dealing with homogenous products. It is a market with highest level competition.

1. Large number of sellers and buyers:
The first condition which a perfectly competitive market must satisfy is concerned with the sellers’ side of the market. The market must have such a large number of sellers that no one seller is able to dominate in the market. No single firm can influence the price of the commodity. The sellers will be the firms producing the product for sale in the market. These firms must be all relatively small as compared to the market as a whole.

Their individual outputs should be just a fraction of the total output in the market. There must be such a large number of buyers that no one buyer is able to influence the market price in any way. Each buyer should purchase just a fraction of the market supplies. Further, the buyers should have any kind of union or association so that they compete for the market demand on an individual basis.

2. Homogeneous products:
Another prerequisite of perfect competition is that all the firms or sellers must sell completely identical or homogeneous goods. Their products must be considered to be identical by all the buyers in the market. There should not be any differentiation of products by sellers by way of quality, colour, design, packing or other selling conditions of the product.

3. Free entry and free exit for firms:
Under perfect competition, there is absolutely no restriction on entry of new firms in the industry or the exit of the firms from the industry which want-to leave. This condition must be satisfied especially for long period equilibrium of the industry.

If these three conditions are satisfied, the market is said to be purely competitive. In other words, a market characterized by the presence of these four features is called purely competitive. For a market to be perfect, some conditions of perfection of the market must also be fulfilled.

4. Price taker:
The single distinguishing character of perfect competition is the price-taking behaviour of the firms. A price-taking firm believes that if it sets a price above the market price, it will be unable to sell any quantity of the good that it produces. On the other hand, if the firm set the price less than or equal to the market price, the firm can sell as many units of the good as it wants to sell.

The firms in the perfect competitive market are price takers. That means, the producers will continue to sell their goods and services in the price existing in the market. Firms have no control over the price of the product.

5. Information is perfect:
Price taking is often thought to be a reasonable assumption when the market, has many firms and buyers have perfect information about the price prevailing in the market. Since all firms produce the same good and all buyers are aware of the market price, the firm in question loses all its buyers if it raises price.

Question 37.
Briefly explain in what way macroeconomics is different from microeconomics.
Answer:
The micro and macroeconomics are distinguished on the following grounds:
1. Scope:

• Microeconomics study in individual units so its scope is narrow.
• Macroeconomics study in aggregates, so its scope is wider.

2. Method of study:

• The microeconomics follows slicing method as it studies individual unit.
• The macroeconomics follows lumping method as it studies in aggregates.

3. Economic agents:

• In microeconomics, each individual economic agent thinks about its own interest and welfare.
• In macroeconomics, economic agents are different among individual economic agents and their goal is to get maximum welfare of a country.

4. Equilibrium:

• Microeconomics studies the partial equilibrium in the country.
• Macroeconomics studies the general equilibrium in the economy.

5. Domain:

• Microeconomics consists of theories like consumer’s behaviour, production, and cost, rent, wages, interest, etc.
• Macroeconomics comprises of theory of income, output, and employment, consumption function, investment function, inflation, etc.

Question 38.
Explain the examples of planned accumulation and decumulation of inventories.
Answer:
Inventories are the unsold goods, unused raw materials or semi-finished goods which a firm carries from a year to the next year. Change in inventories may be planned or unplanned. A planned change in inventories is the change in the stock of inventories which has occurred in a planned way. The planned accumulation and decumulation of inventories are explained with example as follows.

Suppose a firm wants to increase the inventories from 200 T-shirts to 400 T-shirts during the year. Expecting sales of 2000 T-shirts during the year, the firm produces 2000 + 200 = 2200 T-shirts. If the sales are actually 2000 T-shirts, the firm ends up with a rise of inventories. The new stock of inventories is 400 T-shirts, which was planned by the firm. This is planned accumulation of inventories.

On the other hand, if the firm had wanted to reduce the inventories from 200 to 50, then it would produce 2000 – 150 = 1850 T-shirts. This is because it plans to sell 150 T-shirts out of the inventory of 200 T-shirts it started with. Then the inventory at the end of the year becomes 200 – 150 = 50 T-shirts, which the firm wants. If the sales turn out to be 2000 T-shirts as expected by the firm, the firm will be left with the planned reduced inventory (decumulation) of 50 T-shirts.

These are the two instances of planned accumulation and planned decumulation of inventories.

Question 39.
Give the meaning of transaction motive and speculative motive of demand for money and liquidity trap.
Answer:
1. Transaction motive:
Transaction motive demand for money refers to holding money to carry out transactions. If we receive our income weekly and make payments on the first day of every week, we need not hold any cash balance throughout the rest of the week. But our expenditure patterns do not normally match our receipts. People earn incomes at discrete points in time and spend it continuously throughout the interval.
The transaction demand for money is represented as follows:
M^d_T = k. T
Where, T is the total value of transactions in the economy over unit period and k is a position fraction.

2. Speculative motive:
Some people hold cash to invest bn shares, debentures, gold, immovable properties, etc. The speculative demand for money refers to the demand for money that people hold as idle cash to speculate with the aim of earning capital gains and profits. The speculative demand for money can be written as follows:
\(M_{s}^{d}=\frac{r_{\max }-r}{r-r_{\min }}\)
Where, r is the market rate of interest and r_max and r_min are the upper and lower limits of r, both positive constants. It clearly states that as r decreases from r_max to r_min, the value of speculative demand for money decreases from zero to infinity.

Question 40.
Briefly explain the balance of trade.
Answer:
Balance of trade is the difference between the value of exports and value of imports of goods of a country in a given period of time. Export of goods is entered as a credit item in balance of trade. Import of goods is entered as a debit item in balance of trade. It is also called as trade balance.

Balance of trade is said to be in balance when exports of goods are equal to the imports of goods, i.e. balanced balance of trade.
Surplus balance of trade arises if country’s exports of goods are more than its imports.

Deficit balance of trade arises if a country’s imports of goods are more than its exports. Balance of trade is narrow concept and it may not show the international economic position of an economy. It gives partial picture of international transactions and it is less reliable. It does not include net invisibles, i.e. the difference between the value of exports and value of imports of invisibles (services) of a country in a given period of time.

Question 41.
Write the chart of components of currentaccount.
Answer:

PART-D

VII. Answer any Six of the following questions in 20 sentences each. (6 × 4 = 24)

Question 42.
Explain the optimal choice of consumer with the help of diagram.
Answer:
It is assumed that the consumer chooses her consumption bundle on the basis of her taste and preferences over the bundles in the budget set. It is generally assumed that the consumer has well defined preferences over the set of all possible bundles. She can compare any two bundles. In other words, between any two bundles, she either prefers one to the other or she is indifferent between the two goods.

It is further assumed that the consumer is a rational individual. A rational individual clearly knows’ what is good or what is bad for her and in any given situation, she always tries to achieve the best for herself. From the bundles which are available to her, a rational consumer always chooses the one which gives her maximum satisfaction. The consumer always tries to move to a point on the highest possible indifference curve given her budget set.

Thus, the optimum point would be located on the budget line. A point below the budget line cannot be the optimum. Compared to a point below the budget line, there is always some point on the budget line which contains more of at least one of the goods and no less of the other. Thus, the consumer’s preferences are monotonic.

The point at which the budget line is tangent to one of the indifference curves would be the optimum i choice of consumer. This is because, the budget line other than the point at which it touches the indifference curves lies on a lower indifference curve is considered as inferior. So such a point cannot be the consumer’s optimum. The optimum bundle is located on the budget line at the point where the budget line is tangent to an indifference curve.
This can be explained with the help of the following diagram:

In the above diagram, PQ is budget line, IC₁, IC₂and IC₃ are indifference curves showing different levels of satisfaction. Banana is measured in OX axis and mango is measured in OY axis.

The above diagram illustrates the consumer’s optimal choice also known as consumer’s equilibrium. At (x₁, x₂), the budget line PQ is tangent to the indifference curve IC₂. The indifference curve just touching the budget line is the highest possible indifference curve given the consumer’s budget set.

Bundles, on the indifference curve above IC₂ are not affordable. Points on the indifference curve IC₂ are certainly inferior to the points on the IC₂ as they lie on IC₁. Therefore, (x₁, x₂) is the consumer’s optimum bundle.

Question 43.
Explain the short run supply curve of a firm with the help of a diagram.
Answer:
Supply of a firm refers to the quantity that it chooses to sell at a given price, given technology and given prices of factors of production. Supply curve of a firm shows the levels of output that the firm chooses to produce corresponding to different values of the market price by keeping technology and prices of factors of production constant.

1. Short-run supply curve of a firm:
Let us derive a firm’s short-run supply curve. The derivation of the & supply curve can be split into two parts viz., firm’s profit-maximizing output level when the market price is greater than or equal to minimum average variable cost and the firm’s profit-maximizing output level when the market price is less than the minimum average variable cost.
Case 1:
Price or average revenue greater than or equal to the minimum AVC:
This can be explained with the help of the following diagram.

If the market price is P₁, which exceeds the minimum of AVC, the firm starts out by equating P₁ with SMC on the rising part of the SMC curve which leads to the output level q₁ But the AVC at q₁ does not exceed the market price P₁. Thus, when the market price is P₁, the firm’s output level in the short run is equal to q₁.

Case 2:
Price is less than minimum AVC: If the market price is P₂ which is less than the minimum AVC, at all positive output levels, AVC exceeds P₂ In other words, it cannot be the case that the firm supplies a positive output. So, if the market price is P₂ the firm produces zero output.

Combining both the cases, we can conclude that a firm’s short-run supply curve is the rising part of the short-run marginal curve from and above the minimum average variable cost together with zero output for all prices strictly less than the minimum AVC. This can be represented in the following diagram:

In the above diagram, the short-run supply curve of a firm, which is based on its short-run marginal cost curve and average variable cost is represented by the curve which rises from the minimum point of AVC curve. The bold line represents the short-run supply curve.

Question 44.
Explain the short-run equilibrium of a monopoly firm with the help of the simple case of zero cost.
Answer:
Every monopolist aims at maximizing profit. Here, we try to analyze the profit-maximizing behaviour to determine the quantity produced by a monopoly firm and price at which it is sold.

Let us imagine that there exists a village situated far way from other villages. In this village, there is exactly one well from which water is available. All residents are completely dependent for their water requirements on this well. The well is owned by one person who is able to prevent others from drawing water from it except through purchase of water.

The person who purchases the water has to draw the water out of the well. The well owner is thus a monopolist firm which bears zero cost in producing the good. We shall analyse this simple case of a monopolist bearing zero costs to determine the amount of water sold and the price at which it is sold.

The short ran equilibrium of the monopolist with zero cost can be explained with the help of the following diagram:

In the above diagram, TR, AR and MR curves are revenue curves. The profit received by the firm equal the revenue received by the firm minus the cost incurred. Since TC is zero, profit is maximum when TR is maximum. This occurs when output is of 10 units. This is the level when.MR equals zero. The amount of profit is given the length of the vertical line segment from ‘a’ to the horizontal axis.

Question 45.
Briefly explain the expenditure method of measuring GDP.
Answer:
Expenditure method is the alternative way to calculate the GDP by looking at the demand side of the products. Here the aggregate value of the output in the economy by expenditure method will be calculated in the following way.

In this method, we add the final expenditures that each firm makes. Final expenditure is that part of expenditure which is undertaken not for intermediate purposes. If the baker buys Rs.50 worth of wheat from the farmers is considered as intermediate good and the final expenditure received by the baker is 200. Then the aggregate value of output of the economy is Rs.200 + Rs.50 = Rs.250.

Let us assume that firm i makes the final expenditure .on the following accounts:

1. Final consumption expenditures on the goods and services by households denoted as C_i
2. Final investment expenditure incurred by the firms on capital goods denoted as I_i
3. The expenditure that the government makes on the final goods and services produced by the firm, denoted as G_i
4. The export revenues that firm i earns by selling its goods and services abroad denoted as X_i

Now the total final consumption, investment, government and export expenditures received by the firm i. Now GDP according to the expenditure method is expressed as follows:
GDP = \(\sum_{i=1}^{N}\) RV_i = C + I + G + X- M
\(\sum_{i=1}^{N}\)RV_f is the sum of final consumption expenditure-C, investment -I, government – G and exports -X and imports-M, received by all the firms in the economy.

Question 46.
Requirement of reserves acts as a limit to money (credit) creation. Explain.
Answer:
The RBI decides a certain percentage of deposits which every bank must keep as reserves. This is done to ensure that no bank is over lending. This is a legal requirement and is binding on the banks. This is called the CRR (cash reserve ratio).

Apart from the CRR, banks are also required to keep some reserves in liquid form in the short term. This ratio is called SLR (Statutory Liquidity Ratio). The statutory requirement of the reserve ratio acts as a limit to the amount of credit that banks can create.

For example, let us assume that Canara Bank starts with a deposit of Rs.1000 made by Mr.X. The U . reserve ratio is 20%. Thus, Canara Bank has Rs.800 (1000 – 200=800, i.e. 20% of 1000 is deducted) to lend and the bank lends out of Rs.800 to Mr.Y, which is shown in the bank’s deposits in the next round as liabilities, making a total of Rs. 1800 as deposits. Now Canara bank is required to keep 20% of 1800, i.e, 360 as cash reserves.

The bank had started with Rs.1000 as cash. Since it is required to keep only Rs.360 as reserves it lends Rs.640 (1000-360=640)-. The bank lends out Rs.640 to Mr. Z. This in turn shows up in the bank, as deposits. The process keeps repeating itself till all the required reserves become Rs. 1000. The required reserves will be Rs. 1000 only when the total deposits become Rs.5000. This is because, for deposits of Rs.5000, cash reserves would have to be Rs.1000 (20% of 5000= 1000).

In the above table, t le first column lists each round. The second column depicts the total deposits with the bank at the beginning of each round. 20% of these deposits need to be deposited with the RBI as required reserves (3^rd column). What the bank lends in each round gets added to the deposits with the bank in the 2^nd round 4^th column indicates the loans made by the banks.

Question 47.
Explain the changes in taxes with the help of a diagram.
Answer:
We know that a decrease in tax leads to increase in disposable income at each level of income. This. shifts the aggregate expenditure schedule upwards by a fraction c of the decrease in taxes. This can be shown in the following diagram:

In the above diagram, income is measured in X-axis and aggregate demand is measured in Y-axis. When the tax is decreased, there will be increase in consumption and output and the tax multiplier is negative. The tax multiplier is given as:
∆Y/∆T = -c/1-c.
It shows that the tax multiplier is smaller in absolute value. This is because an increase in government spending directly affects total spending whereas taxes enter the multiplier process through their impact on disposable income, which influences household consumption. Thus, with decrease in taxes, consumption and total spending increases in the first instance by c∆T.

For example, assume that the marginal propensity to consume is 0.8. The government expenditure multiplier will then be.
1/1-c = 1/1 – 0.8 = 1/0.2 = 5.

For an increase in government spending by 100, the equilibrium income will increase by 500 (5 × 100). The tax multiplier is given by -c/1-c = -0.8/1—0.8 = -0.8/0.2 = -4. Therefore, a tax cut of 100 will increase equilibrium income by 400.

If the different values of the marginal propensity to consume are taken to calculate the values of the two multipliers, we find that the tax multiplier is always one less in absolute value than the government expenditure multiplier. If an increase in government spending is matched by an equal increase in taxes, so that the budget remains balanced, output will rise by the amount of the increase in government spending.

Question 48.
Explain the foreign exchange market with fixed exchange rates with the help of a diagram.
Answer:
Under fixed exchange rate system, the government decides the exchange rate at a particular level. The foreign exchange market with fixed exchange rates can be explained with the help of following diagram:

In the above diagram, the market-determined exchange rate is e where demand and supply intersect. However, if the government wants to encourage exports for which it needs to make rupee cheaper for foreigners it would do so by fixing a higher exchange rate say, Rs.70 per dollar from the current exchange rate of Rs.65 per dollar.

Thus, the new exchange rate set by the government is E, where E, is greater than E. At this exchange rate, supply of dollars exceeds the demand for dollars. The RBI intervenes to purchase the dollars for rupees in the foreign exchange market in order to absorb this excess supply which has been marked as AB in the diagram.

Thus, by interfering, the government can maintain any exchange rate in the economy. If the government wants to set an exchange rate at a level E₂ there would be an excess demand for dollars, the government would have to withdraw dollars from its past holds of dollar. If the government fails to do so, it will encourage black market transactions.

PART-E

VIII. Answer any two of the following project-oriented questions. (5 × 2=10)

Question 49.
Find the missing products of the following table.

Answer:

Question 50.
Write a note on demonetisation.
Answer:
Demonetisation was a new step taken by the Government of India on 8^th November 2016. It was introduced to tackle the problem of corruption, black money, terrorism and Circulation of fake currency in the economy. Old currency notes of Rs.500 and Rs. 1000 were no longer legal tender. New currency notes in denomination of Rs.500 and Rs.2000 were introduced. The public were advised to deposit old currency notes in their bank account till 31^st of March 2016 without any declaration and up to 31^st March 2017 with the RBI with declaration.

In order to avoid a complete breakdown and scarcity of cash, government allowed exchange of Rs.4000 old currency notes with new currency restricting to a person per day. Further, till 12^th December 2016, old currency notes were acceptable as legal tender at petrol pumps, government hospitals and for payment of government dues like taxes, power bills, etc.

This initiative had both appreciation and criticism. There were long queues outside banks and ATM centres. There was acute shortage of currency notes and had adverse effect on economic activities. But now, normalcy has returned.

The demonetisation also has positive effects. It improved tax compliance as a large number of people were bought in the tax ambit. The savings of individual were channelized into the formal financial system. As a result, banks have more resources at their disposal which can be used to provide more loans at low rate of interest.

Demonetisation helps in curbing black money, reducing tax evasion and corruption will decrease. It also helps in tax administration in another way, by shifting transaction out of the cash economy into the formal payment system. Now a days, households and firms have started to shift from cash payment to electronic payments.

Question 51.
Prepare a budget on monthly income and expenditure of your family.
Answer:
The budget is a financial statement which includes anticipated income and anticipated expenditure. An imaginary monthly income and expenditure of a family is given below:
Budget for the month of January-2019

This family has a surplus budget as its income is more than expenditure.

Students can Download 2nd PUC Political Science Previous Year Question Paper June 2019, Karnataka 2nd PUC Political Science Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Political Science Previous Year Question Paper June 2019

Time: 3 Hrs 15 Min
Max. Marks: 100

I. Answer the following questions in a word or a sentence each. (10 × 1 = 10)

Question 1.
When did the Constitution of India come into force?
Answer:
26^th January 1950.

Question 2.
Name the Iron Man of India.
Answer:
Sardar Vallabha Bhai Patel.

Question 3.
Expand NOTA.
Answer:
None of The Above.

Question 4.
Mention the Party system in India.
Answer:
Multy Party System.

Question 5.
Which day is celebrated as “Labours’ Day”?
Answer:
1^st may as celebrated as The Labours Day.

Question 6.
Salumarada Thimmakka belongs to which district?
Answer:
Ramanagara District.

Question 7.
What is coalition government?
Answer:
According to F.A.Ogg “Coalition is a system where members of multiple political parties unite to form a government or Ministry”.

Question 8.
What is the root word of Terrorism?
Answer:
Latin word Terrere.

Question 9.
What is Privatization?
Answer:
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector to private sector.

Question 10.
What is Apartheid?
Answer:
Discrimination on the basis of colour is called Apartheid.

II. Answer any ten of the following questions in two words or two sentences each: (10 × 2 = 20)

Question 11.
Give two examples of All India Services.
Answer:

1. Indian Administrative service.
2. Indian police service.

Question 12.
What are the three popular slogans of Dr. B.R. Ambedkar?
Answer:
Education, Agitation, Organisation.

Question 13.
Mention the caste based inequality.
Answer:
Discriminating the people on the grounds of caste is called caste based inequality.

Question 14.
Name any two persons who identified the identity politics.
Answer:

1. L.A. Kauffman
2. Barbara Smith.

Question 15.
What are the two hurdles to create corruption-free India?
Answer:

1. Lack of moral values
2. Political criminalization.

Question 16.
What is globalisation?
Answer:
A process of integrating the economy of a country with world economy is called globalisation.

Question 17.
Name two permanent members of the Security Council.
Answer:

1. USA
2. Russia.

Question 18.
Mention two SAARC summits which are held in India.
Answer:

1. 2^nd summit-1986-Bangalore (Nandi Hills)
2. 14^th summit-2007 – Delhi.

Question 19.
Write any two ‘Code names’ of nuclear tests conducted by India.
Answer:

1. 1974 nuclear test (smiling of Buddha)
2. 1998 nuclear test (Sakti-I and Sakti-II).

Question 20.
What is ‘Perestroika and ‘Glasnost’?
Answer:
Perestroika means restructuring and Glasnost means openness. It was introduced by the then President of USSR Mikhail Gorbachev.

Question 21.
Name the leaders who have signed ‘Panchsheel’.
Answer:
Jawaharlal Nehru and Chinese PM Zhou-en-Lai signed Panchasheel on 29^th April 1954.

III. Answer any eight of the following questions in 15-20 sentences each: (8 × 5 = 40)

Question 22.
Write the advantages of Elector’s Photo Identity Card.
Answer:
The EPIC was introduced by the then Chief Election Commissioner, T.N Sheshan (1990¬1996) to conduct free and fair elections and to remove evil practices like corruption, impersonation (bogus voting), etc., It was introduced in India in 1993. The arrangements were made to issue EPIC to prevent impersonation of electors.

Initially, it was difficult to issue identity cards to all the voters due to some technical problems. But during the term of M.S.Gill, the possession of EPIC by the voters was made compulsory. It is an official document issued by the Election Commission to all the eligible voters. It consists of all the information like voters’ age, name, photo, gender, address, constituency, date of issue, etc.

Question 23.
Explain the features of civil service.
Answer:
Features of Civil Services:
1. Professional body:
As Herman Finer puts it, Civil Service is a professional body of officials who are, permanent, paid and skilled. It is a whole time job and career service.

2. Hierarchy:
As per the scaler system, each civil servant has to obey his immediate superior, where higher ranking administrative officers with discretionary powers supervise their subordinates. The authority runs from above and helps to make administration stable.

3. Political Neutrality:
Civil Servants refrain always from political activities. They perform their duties without being aligned to any one political regime.

4. Anonymity:
Civil servants work behind the screen and remain anonymous even though they work for the Government. Recognition for good work or censure for any omission goes only to the concerned minister and not to. the civil servants.

5. Impartiality:
The Civil Servants have to apply the laws of the state while performing the duties without showing any favour, bias or preference to any groups or sections of the society.

6. Service motto:
They have to work for the welfare of society. They must be humble and service minded towards the public and not authoritative.

7. Permanent:
Civil Servants are called permanent executives. They discharge duties until they attain the age of superannuation. Both at the central and in Karnataka State Services, the age of retirement is sixty years. Even though disciplinary action is taken as per rules, there is security of service.

8. Jurisdiction of Law:
Every Civil Servant has to function within the prescribed jurisdiction of law. If they cross the limit, they are met with disciplinary actions.

9. Special Training:
Once the candidates are selected for top civil services, they are deputed to in-service training to acquire special skills in administration, like the Lai Bahadur Shastry Academy of Administration located in Mussoorie for the training of the newly appointed IAS officers. Sardar Vallabhbhai Patel Police Academy located in Hyderabad trains the newly appointed IPS officers.

Question 24.
What are the causes for backward class movement?
Answer:
1. Social discrimination:
These communities faced social discrimination like superior and inferior throughout the years. They were not allowed to come to the mainstream. Hence they started agitation to get the facilities and their due share in the post-independence period.

2. Economics Exploitation:
Exploitation leads to economic inequality among the backward classes. Many of these communities were Below Poverty Line (BPL) and were poverty-stricken. To get these facilities, they united together and started agitation.

3. Educational backwardness:
Upper caste monopolised the field of education and denied access to these communities. As education is fundamental for self-development these backward communities are against the upper caste and organised agitation.

4. Denial of Political representation:
A few communities dominated political field and other backward classes were totally neglected. During 1920, the agitation started in Mysore Province by Backward classes to get political participation to Non-Brahmins led by Sri Kantharaje Urs.

5. Unification:
It is difficult to achive anything without any unity and integrity. Hence Backward classes who are more than 350 in number were unorganised and scattered. To unit them and to fight for their cause, movement was started.

Question 25.
Discuss the political implications of Peasant movement.
Answer:
Political implications:
The successive Governments have taken measures to reduce the problems of peasants by the following methods.

1. Agricultural Loans:

• National Crop Insurance Programme (NCIP).
• National Agricultural Insurance Scheme (NAIS).
• Weather Based Crop Insurance Scheme(WBCS).
• Primary Land Development Bank (PLD).

2. National Agriculture Scheme:
For agricultural improvements, National Development Council (NDC) has made enormous arrangements in 2007 and the National Agriculture scheme was implemented with a view to enhance 4% in agricultural production. The main objective of this plan is to determine agricultural policy of all the states and provide essential facilities.

3. Waiving of debts:
When farmers are not able to get the yield to their expectations they cannot clear the debts. To uplift the farmers from debts the Government have taken necessary measures to waive the debts of farmers. This has reduced the suicide and death rate of farmers.

4. Establishment of Peasant Liason centres:
To protect farmers from low quality seeds, fertilizers and protect crops from diseases, Peasant Liason centres are opened to provide necessary implements and information related, at Hobli level.

5. Veterinary services:
Government is proving veterinary services to the livestock which also supports agriculture. Though encouraging dairying and saavayava Krishi (Organic agriculture) which are allied sectors.

6. Land Reforms Act:
National Land Reforms Act was implemented in Karnataka in 1974 when Sri Devaraj Urs was the Chief Minister of Karnataka. Land reforms Act of 2013 provides more compensation to Landowners, rehabilitation and settlement facilities, retaining the ownership of land with farmers,

no forceful acquisition of agricultural land till the final settlement facilities, retaining the ownership of land with farmers, no forceful acquisition of agricultural lands till the final settlement. Providing the same quantum of land elsewhere in the case of SCs and STs.

Question 26.
Explain the various components of Nation building.
Answer:
The process of Nation-building started with the attainment of independence. The leaders of modern India initiated the process in the right direction as they worked out the details in an orderly and systematic way. However, during implementation, they had to face numerous problems associated with national reconstruction resulting in a slow process.

The process of nation-building is an offshoot of the concept of nation-states. The idea of nation-states emerged after the signing of the treaty of West Phalia (1648) by Western Countries. The people of the common religious and traditional backgrounds living in a definite territory with like-mindedness and ‘we’ feeling form the nation. Common language, culture, and history aspirations help the common people to form nationality.

1. Components to community support:
To realise the process of nation-building, collective support and endeavour of the people are essential. The quality of the people reflects the quality of a nation. Disciplined work culture and patriotic feeling also contribute for nation-building. In a democracy, people are the kingmakers.

Hence, they are expected to elect competent and honest representatives. They formulate a sound public opinion on important national issues. As J.S. Mill said ‘Eternal vigilance is the price of democracy’.

2. Good Governance:
Good governance ensures accountability, transparency, efficiency, responsibility, and responsiveness. In addition, the use of technology has given rise to e-Governance. India is one of the leading countries in the world in the adoption of the system-of e-governance.

3. Committed Leadership:
History depicts many examples of committed leadership. Eg. the US President F. D. Roosevelt solved the crisis of Economic depression by adopting the New Deal Policy and US became a superpower at global level after the II World War. In India Nehru’s leadership largely contributed to the process of nation-building.

He formulated goals for nation-building and introduced planning system, adopted industrialization policy and socialistic pattern of society. He had vision and farsightedness for the transformation of India. Hence Nehru is called the Architect of Modern India.

4. Political Culture:
Political Culture constitutes a set of values, attitudes, and behaviour towards a political system. It requires an ideal political behaviour to national reconstruction. Leaders have to embody the principles of national interest, public service, probity, and statesmanship.

5. Power Sharing:
To realize the goal, political power needs to be shared among all sections of society. The concentration of political power in the hands of a few people and some families leads to the emergence of authoritarianism and dictatorship.

As H.J. Laski rightly puts it “A decision which affects all must be decided by all” To attain this reservation is provided to the SCs and STs and women at different levels of Government. It ensures social justice which is the foundation of socio-economic democracy.

6. Universal Education:
For the development of a nation universal education is of paramount importance. It enables the person to understand his potentiality and strengthens dignity. As Gandhi said, “Education is the light of life”. It encourages people to develop the spirit of enquiry the ability to analyze the national problems and to work for national progress.

Education also equips the people to shun fanaticism, parochialism, communalism, casteism and religious fundamentalism. The Right To Education Act 2009 implemented in 2010 is a step in this direction.

7. National Character:
Nationalism and patriotism are the foundations to build a national character. Each country has its distinct national character which denotes one’s nativity-as the conservatism of UK, ‘Land of Liberty’ of US, Ethnicity of Africa, Aboriginal of Australia, cultural diversity of India. Love and respect for one’s country and national symbols such as national flag, national anthem, and national monuments are the prerequisites.

One has to acquire knowledge about the history of his motherland and its contributions to human civilizations. Realizing the significance of national character, the makers of the Indian constitution have asserted the supremacy of popular sovereignty in the preamble reading with the expression.” We the people of India”.

8. Mass Media:
Mass Media is regarded as the Fourth Estate in democracy as it plays a vital role in nation-building. It highlights the omissions and commissions of the government and acts as a bridge between the government and the public. It . is an effective instrument of political socialization, modernization, and development. In India, the ‘Freedom of Expression’ is a fundamental right under Art. 19 of the Constitution.

9. Responsible Intelligentsia:
The contribution of intellectuals is recognized all over the world. Research and innovations in important areas of human life have contributed to the national development. In India the development in the field of social sciences, M.N. Srinivas, Amartya Sen, S. Shettar, Gail Omvedt, Kancha, Ilaya, Vandana. Shiva, S.N. Balagangadhara, AshishNandy, Rajiv Malhotra and others.

In Science and Technology Sir M. Vishveshwaraiah, Sir C.V. Raman, Dr. Raja Ramanna, Dr. M.G.K. Menon, Dr. CNR Rao. Dr. U.R. Rao, Dr. APJ Abdul Kalam, and others have greatly contributed for India’s present position at global level.

10. National Integration:
It is the process of uniting the people emotionally, psychologically and politically, Sardar Vallabha Bai Patel, Vinoba Bhave, Lai Bahadhur Shastri, J.B. Kriplani, Acharya Narendra Dev played a key role in the national integration. November 19th is being observed as National integration day, the birthday of Smt. Indira Gandhi.

Question 27.
How is illiteracy as an impediment to the Indian democracy? Discuss.
Answer:
Illiteracy means inability of a person to read and write in any language. Amartya Sen described illiteracy as one of ‘unfreedoms’. According to the census report of 2001, a person who can read and write with understanding in any language may be called a literate person and a person who can only read but cannot write is not a literate person.

Illiteracy is both a curse and an impediment to democracy. Illiterates are easily exploited and mislead by politicians and vested interests to realize their goals. The successful working of democracy depends upon political awareness which can be acquired only through education.

The 2011 census report records the literacy rate in Kerala as 94%, Karnataka at 75.36% and Bihar at 61.80%.

1. Lack of Political Awareness:
Illiteracy contributes for political apathy. Illiterate masses due to their ignorance and indifferences do not take part in political process. They are not able to understand the importance of vote, they do not understand the idealogies of political parties, their manifestos and the performance of ruling party, election rules, and process.

2. Low Percentage of votes:
Since the first general election, the percentage of polling has not crossed 60%. This is due to illiteracy and lack of political awareness. Political legitimacy cannot be achieved to a full extend by low percentage of polling.

3. Money and Muscle Power:
The nexus between politicians and businessmen is noticeable. The politicians are tactful enough to get votes from the poor people who are illiterate through dubious means like rigging and booth capturing and threatening the voters using muscle power. This has led to criminalization of politics.

4. Politics of Populism:
The voters in India are attracted by politics of populism. Illiteracy and poverty force them to depend upon the facilities of the Government. They fail to understand that the populist programmes bring them into mainstream of the Society. Indulgence in politics of populism makes the people to depend on the Government for everything without becoming creative individuals. This becomes an impediment to national development.

5. Emergence of Dictatorship:
When people are not politically conscious, show apathy to vote, an ambitious leader transforms democracy into a dictatorship.

Question 28.
Explain the remedies for communalism.
Answer:
Promotion of Secularism and National Integration are very good remedial measures.
1. Secularism:
The constitution makers adopted secularism in order to create sense of security and equality among different religious groups. The state also follows a policy of neutrality in religious matters. Article 26 provides every religious denomination or any section has the right to establish religious institutions and manage their affairs.

In December 2013, the Central Cabinet approved the “Prevention of Communal Violence (Access to justice and Reparations) Bill” to punish the offenders who instigate and indulge in communal riots. It is yet to be passed by parliament.

2. National integration:
It is the process of uniting the people emotionally and politically. India is a land of diversity. It is in a limited sense to call this a single nation because it has various religion, languages, castes, cultures, etc. So for the success of Indian democracy, promotion of national integration is necessary.

To preserve and sustain National integration many provisions have been adopted in the Constitution, like National integration Council, Zonal Councils, National security Council and armed forces play a greater role in the protection of National integration.

3. Neighbourhood Peace Committees:
The aftermath of Babri Masjid demolition and subsequent communal riots and social tensions in different places and ineffective Governmental measures has made it vital to establish Neighbourhood Peace Committees with eminent or prominent people as its members. These members must be nominated from each community in riot prone or communally sensitive areas.

The main objectives are arresting and containing social tensions which may flare up communal riots in the neighbourhood areas taking precautionary measures to prevent the eruption of communal clashes.

In the aftermath of conflict restoring normalcy and pacifying affected people. Establishing harmonious relationship between the communities and extending all possible help to affected people.

Question 29.
Explain the organisation and functions of Lokayukta.
Answer:
Though the institution of Lokayukta was introduced for the first time in Odisha it was not able to implement. Maharashtra was the first state to implement in 1973 and Karnataka in 1984. It investigates the allegation against officials like corruption, favouritism, nepotism, injustice and other grievances.

It does not include Judges, Speaker, Chairman, Accountant General, Chairman and Members of State Public Service Commission, Judges of civil and criminal court. The Lokayukta receives the petition from the public and conducts enquires. It has power to raid on the houses and offices of the corrupt officials.

Lokayukta in Karnataka:
The Government headed by Sri Ramakrishna Hegde adopted the institution of Lokayukta in 1984. It comprises of a retired judge of the Supreme Court or Chief Justice of the High. Court is Upa Lokayukta.

The committee consisting of Chief Minister, Chief Justice of High Court, Speaker of the Assembly, Chairman of the Council and leaders of the opposition are consulted by the governor regarding the appointment. They are appointed for 5 years. They can be removed from the office by the governor, on the charge of misbehavior or incapacity proved in the state Legislature.

Question 30.
Describe the role of youth against terrorism.
Answer:
1. Youth against Terrorism:
Terrorism is used in various forms like international terrorism, domestic terrorism, economic terrorism, cultural terrorism, cyber terrorism, etc., Terrorism means deliberately and violently targetting civilians by inflicting physical or mental agony, wound or death that creates fear psychosis for political gains.

2. Role of youth against terrorism:
The concept of minority leads to fear of attack and results in religious fundamentalism. Hence, both the youth and the society have to pressurise the Government concerned, to create awareness and educate those who are indulging in anti-national and inhuman terrorist activities. Particularly for the youth priority should be given to peace and security of the inhabitants of the country.

Youth have to develop patriotism that is national feeling and involve themselves in constructive activities like nation-building by helping the Government against terrorist and militant activities taking place in their neighbourhood which is their prime duty.

Youth have to take the initiative within the Jurisdiction of law, to fight against terrorism as it happened in Naxalite prone states like Bihar, Jharkhand, and Chattisgarh, where Salwajudum (village army) fought against the Naxalites.

Youth must understand the complicated and multi-faceted terrorism rationally. They have to isolate the terrorism and inoculate their potential recruits. A successful counter-terrorism action requires a combination of coercive and conciliatory policies.

It is the responsibility of the youth to spread the importance of education that saves the younger generation from the clutches of terrorism and communalism as it happened in the case of Ms. Malala Yusufa Zai of Pakistan, who survived the terrorist attack.

Question 31.
Discuss the meaning and importance of liberalisation.
Answer:
Importance of liberalization is as follows:
a. Liberalisation believes in ‘free market economy’. Therefore, it implies the gradual reduction of government control. This means the abolition of a licence-raj. It results in the removal of red-tape, procedural delay and bureaucratic regulation of economic activities.

b. Liberalisation lays the foundations for multiplication of business, trade, and commerce. In a free market economy, diversification of business, trade, and organisation takes place.

c. As there is expansion of business and as more and more capital is injected into the economy, the use of technology and automation becomes necessary. This helps in mechanization of work and computerization of administrative processes. Efficiency and economy are ensured.

d. Under the process of liberalization, the consumer is benefitted in many ways. There is a wider choice of goods and services. There is a great improvement in quality of goods and after-sales services.

e. Liberalisation introduces a competitive market system. In every matter there is free competition. To the extent such competition is regulated by government, the competition is healthy. This ensures not only better standards of goods and services, but also reasonable prices.

f. Finally, liberalization in the long-run brings about economic growth and progress of the nation. Of course, there must be adequate, planned and goal oriented governmental regulation.

Question 32.
Mention the objectives of UNO.
Answer:
The objectives of UN are incorporated in Article 1 of the UN Charter. They are:

1. To maintain international peace and security.
2. To develop friendly relations among the nations.
3. To seek co-operation in solving international economic, social, cultural and humanitarian problems.
4. To co-operate in promoting respect for human rights.
5. To maintain freedom for all without discrimination on the basis of race, sex, languages or religion.

Question 33.
Write about Non-alignment.
Answer:
The most important principle of Indian foreign policy is non-alignment. It means detachment from any military bloc and solving all international problems through mutual co-operation and peaceful methods. After the II World War, the world was divided into two military blocs, one led by USA and another by USSR. Many countries of the world became the allies of these two military blocs.

But India was not aligned to any of the military blocs. India was the first country to speak of non alignment and major contributor to the emergence of Non-Align Movement. India, Yugoslavia, Indonesia, Egypt, and Ghana were the original supporters of the movement.

IV. Answer any two of the following questions in 30 to 40 sentences: (2 × 10 = 20)

Question 34.
Describe the Government of India Act 1935.
Answer:
The reforms of 1919, failed to fulfill the aspirations of the people of India. The Congress under the leadership of Mahatma Gandhi started agitation for ‘Swaraj’ to be attained through ‘Non-co-operation’.

As per the Government of India Act 1919, a statutory commission was to be appointed at the expiration of ten years after the passing of the Act for the purpose of inquiring into the working of the system and the development of representative institutions in India.

The British Government appointed a Statutory Commission (Simon Commission) in 1927, to enquire into the report of the 1919 Act. This was done as a concession to the Indian demand for an early revision of the Act. The commission headed by Sir John Simon consisted of 7 members from the British Parliament.

It did not have a single Indian as a member. It was taken as an insult to the self-respect of India and hence was boycotted. Amidst protests of, “Simon, go back”, the commission visited India. It announced in 1929, that ‘Dominion status’ was the goal of Indian developments.

Gandhi lead the 1^st Round Table Conference held in 1930. Dr. Ambedkar lead the 2^nd in 1931 and again the 3^rd Round table Conference in 1932. The outcome of these conferences was announced in the form of ‘white paper’. It provided for –

• Educational facilities and reservation in politics for depressed classes.
• Universal Adult Franchise.
• Prohibition of social boycott.
• Communal representation.
• Separate electorate for the untouchables. Simon commission brought the report of the resolutions of the conferences, but Gandhi opposed the separate electorate for untouchables and decided to fast unto death.

Congress leaders met Gandhi in his regard, and he was convinced. The resolution was modified by providing reservations for depressed classes instead of separate electorate for the untouchables. This was popularly known as ‘Poona pact’ signed by Gandhi and Ambedkar.

A White paper was prepared on the results of these conferences. It was examined by the Joint select committee of the British Parliament and in accordance with its recommendations, the Government of India Act 1935 was passed.

The act contained 321 Articles and 13 schedules. The important provisions of the Act are:
1. Federation:
The Act provided for the establishment of ‘Federation of India’. It consisted of provinces of British India and the Princely states as units. For the first time, an attempt was made to establish a Federal Government.

2. Distribution of power:
It divided legislative powers between the Central and Provincial legislatures. There was a threefold division.
a. Federal list:
It consisted of 59 subjects like external affairs, currency, defense, etc., over which the federal legislature had legislative power.

b. Provincial list:
It consisted of 54 subjects like police, education, etc., over which provincial legislatures had jurisdiction.

c. Concurrent list:
This consisted of 36 subjects like criminal law, civil procedures, marriage, and divorce, etc., over which both the federal and provincial legislatures had competence.

d. The Residuary powers were vested with the Governor-General.

3. Diarchy at the centre:
The Diarchy which was established in the provinces by the Act of 1919 was now adopted at the centre. The executive authority vested with the Governor-General included the following:

a. The administration of reserved subjects like defence, external affairs, etc. was done by Governor-General with the help of ‘Councilors’, who were appointed by him and not responsible to the legislature.

b. In the matters of transferred subjects, Governor-General acted, on the advice of ‘Council of Ministers’, who were responsible to the legislature.

4. The Federal Legislatures:
The central legislature was bi-cameral consisting of Federal Assembly and the Council of States.

a. The Council of States consisted of 260 members, of which 156 (60%) were elected from British India and 104 (40%) were nominated by the Princely States.

b. Federal Assembly consisted of 375 members, of which 250 (67%) were elected by the legislative Assemblies and 125 (33%) nominated by the Rulers of the Princely States.

The Council was to be a permanent body 1/ 3^rd of its members were to retire after 3 years. The term of House of Assembly was 5 years. Indirect method of election was prevalent for the House of Assembly. There were Bi-cameral legislatures in Bengal, Bombay, Bihar and Madras and rest of the provinces had Unicameral legislatures.

5. Federal Court:
It provided for the first time, the establishment of Federal Court of India in Delhi. It was established in 1937 and consisted of a Chief Justice and 6 additional Judges appointed by his Majesty’s Government on the basis of high legal qualifications.

• It had original jurisdiction to decide disputes between the Centre and the Provinces.
• Appellate Jurisdiction over decisions of the High courts.
• Advisory Jurisdiction to advice the Governor-General on any point of Law.

It was the highest court in India. The Federal court functioned in India for about 12 years, till its transformation into Supreme Court of India in 1950, under the present constitution. The credit for its excellent works goes to Sir Maurice Gwyer, who guided the court in its formative years as its first Chief Justice.

6. Provincial Autonomy:
By this act, the provinces no longer remained as delegates of Central Government but became autonomous units of administration. The act introduced Provincial Autonomy. It was introduced in 11 provinces viz, Madras, Bombay, Bengal, the United Provinces, Punjab, Bihar, Central Provinces, Assam, the North Western Frontier Province, Orissa, and Sind.

The provinces were administered by the ministers. The differences between the reserved and 0- transferred subjects were dropped. All subjects were placed under the charge of ministers who were made responsible and removable by the Legislative Assembly. Thus, the executive was responsible to legislature.

The legislative relations between the Central Government and the Provinces were regulated according to three lists of subjects provided under this Act.

a. However, ‘Dominion status’ which was promised by the Simon Commission in 1929 was not conferred by this Act.

b. The intention to establish Federation of India did not materalize because opposition for the merger from the rulers of Princely states.

c. The degree of provincial autonomy introduced at the provincial level was limited as Central Government retained important powers and control. The Governor was given pivotal position, with discretionary powers on important matters. He was not bound by the advice of ministers. Thus, the claim of conferring provincial autonomy was very limited.

Question 35.
Explain the nature of party system in India.
Answer:
Nature:
The nature of the Indian party system can be traced back to the Indian National Movement. Indian National Congress (INC) was founded by A.O. Hume in 1885. It was a forum to unite the people of India to fight against the British Imperialism.

Due to ideological differences, Muslim League was founded in 1906. Other parties like Hindu Maha Sabha, Communist Party of India, Forward Block, and Praja Socialist Party, etc., emerged in the successive years. Later, in the post-independence period, Jan Sangh, Janatha Party, Bharatiya Janatha Party, Janata Dal, Nationalist Congress Party, have grown according to the needs of the time and they started to work to get power.

1. Extra Constitutional growth:
There is no reference in the Constitution of India about how many political parties are to be existed in the country. According to Article 19 of the Constitution, all citizens can have the freedom to form associations or unions. Political parties are established on the basis of this liberty. Hence, political parties have no constitutional base.

2. Prevalence of Multi-party system:
India is a divergent country with many religions, tribes, languages, culture, and traditions. This heterogeneity leads to the emergence of many political parties to protect their interests in the mainstream of the country.

3. Spilt and merger:
It is a common phenomenon in the Indian party system. Various reasons contributed for this split like ideological differences, egoism, power hunger, etc.

4. End of single-party era:
India was under Congress rule till 1977. The happenings between 1975-1977, forced small parties to unite and fight against Congress and capture power and put an end to the single-party era.

5. Dissident activities:
The meanness of leaders like personal attitudes, favouritism, nepotism lead to dissident activities. Repetition of such happenings instigates leaders to go against the ideology of the party and paves was to political instability.

6. Defection:
Elected members of the Legislature change their parties often for personal benefits or differences of opinion and other reasons. It ruins the values of democracy and destabilizes the government.

7. Leader worship:
Most of the political parties in India emphasize on the leaders rather than the ideologies of the parties. The leader decides the destiny of the political party e.g. Jawaharlal Nehru and Indira Gandhi of Congress, A.B. Vajpayee of BJP. Leaders with charisma dominate the whole party.

8. Alliances without principles:
Political parties are formed with principles of democracy and secularism but they ignore them for want of power and make unholy alliances.

9. Dominance of Regional parties:
The presence of regional parties during the first general elections did not influence the voters and they were rejected. During the 1980s, they emerged very strong and dominated the political scenario, e.g. DMK, A1ADMK, Telugu Desam, Shiv Sena National, Conference, AGP, JD(S), RJD, SJP, BJD and other parties playing a significant role during the formation of Government.

10. Religious, Lingual and Regionalism:
The basis of political parties in India is religion, language, regionalism and the like. e.g. Muslim league, Akalidal, Shiv Sena, DMK, A1ADMK, Maharashtra Ekikaran Samiti (MES) Telangana Rastriya Samiti (TRS) and others. In spite of the rules of the Election Commission, such political parties exist.

11. Leftist and Rightist Parties:
Party system in India consists of Leftist and Rightist ideologies, e.g. CPI, CPI (M), Forward Block, RPI and Socialist parties who have belief in revolutionary ideology and drastic changes in the system form the left front. Parties like Congress, BJP, SP, NCP, BSP, RJD, JD (U), JD (S) and others who believe in moderate changes in the system form the right front.

12. The era of coalition:
When no single political party secures absolute majority like-minded political parties come together and join as a single largest group to form a coalition Government. The era of coalition started during 1977 when Janata Party came to power headed by Sri Morarjee Desai as Prime Minister at the centre along with other parties. This was followed by National Front, United Front, NDA, UPA, etc.

Question 36.
Describe the democratic movement of Nepal.
Answer:
21^st century is known as the era of democratic movements. These movements in Afro-Asian nations started to overthrow despotic, autocratic and other authoritarian governments. Nepal was a small landlocked kingdom in Southern Asia lying between India to the south and Tibet to the north.

Monarchy was prevalent in Nepal since 18^th centuries. During the rule of Birendra Bir Bikram Shah Dev, democratic Maoist movements started mainly because of the influence of India and China.

In 1980 limited democracy resulted in the creation of multi-party parliamentary monarchy. The political war was launched by the communist Party of Nepal (Maoist) in 1996, with the overthrow of the Nepalese monarchy and establishing a people’s Republic. Maoist insurgency began in 1996 ended with the Communist victory in 2001. The comprehensive Peace Accord was signed on 21^st November 2006. The Crown prince massacred king Birendra and the royal family.

Bringing the unpopular Gyanendra to the throne. Nepal witnessed a popular movement in 2006. The movement was aimed at restoring democracy. At the same time, the king reinstated old Nepal house of Representatives, with an assurance of permanent peace and the multi-party democracy. The king called upon the Seven Party Alliance (SPA) to bear the responsibility of taking the nation on the path of national unity and prosperity.

The popular Government assumed office on 18^th May 2006 and withdrawn all the privileges given to the king unanimously. The bill included-Imposing tax on the royal family and its assets.

• Ending the Raj Parishad, a Royal Advisory council.
• Eliminating Royal references from army and Government titles.
• Declaring Nepal a secular country, not the Hindu Kingdom.
• Scrapping the national anthem until a new one is composed.
• Eliminating the king’s position as the supreme commander of the army.

This is popularly known as the “Nepalese Magna Carta”.

Question 37.
Explain the concepts of International relations.
Answer:
The core concepts of International relations pertaining to politics are as follows:
1. State Sovereignty:
Jean Bodin has described the concept of Sovereignty in his work “De Republica”. He emphasizes on the state Sovereignty within their territorial jurisdiction. No State can dictate others and all States are equal in matters of status, dignity, and honour.

For instance, India under the British imperialism lost its sovereignty and gained its statehood only in 1947. Iraq during the Gulf war in 1990, is an example for aggression on the Sovereignty.

2. National Interests:
It is the action of the State in relation to other States. As Frankel opined, it refers to the aspiration of the state. The determinants of national interest are qualities of personalities and ideals of the decision-makers.

3. Power Blocs:
With the beginning of the cold war, two power blocs emerged, i.e., USA and USSR. President of U.S. Harry S. Truman believed in the spread of democracy whereas the Warsaw Pact under Soviet policy sought the spread of Communism. Capitalistic ideology spread in UK, France, Germany, and Communist ideology spread in Poland, Bulgaria, Rumania, and Hungery.

4. Polarity:
Polarities in international relations refer to the arrangement of power within the international system. The concept arose from bi-polarity during the cold war between the two superpowers.

The disintegration of the USSR has led to uni-polarity with the United States as the superpower. With rapid economic growth in 2010, China became the world’s second-largest economy. Combined with the respectable international position, China has emerged as a major power in the multi-polar world.

5. Balance of Power:
The concept of Balance of Power refers to relative power position of States as actors in international relations, with its emphasis on the cultivation of power and the utilization of power for resolving the problems. Morgenthau used the term ‘Balance of Power’ as an approximately equal distribution of power. It is an inseparable part of the power politics.

V. Answer any two of the following questions in 15-20 sentences each: (2 × 5 = 10)

Question 38.
Discuss the Chief Secretary and his functions.
Answer:
Chief Secretary is the head of the Secretariat in every state. He is in charge of the administrative setup. His authority includes all departments of the Secretariat. By reason of his experience and standing, he is able to ease out difficulties and frictions to give general guidance to other officers.

Thus he gives leadership to the administrative setup of the state. He maintains rapport between the State government and the Union government and other State government.

Functions:
The Chief Secretary performs the following functions:

1. He is the Principal Adviser to the Chief Minister.
2. He acts as the Cabinet Secretary and attends cabinet meetings.
3. He exercises general supervision and control over the entire Secretariat.
4. He looks after all matters beyond the purview of other secretaries.
5. As chief of all the secretaries, he presides over a large number of committees and is a member of many others.
6. He is the secretary by rotation, of the zonal council of which the state is a member.
7. He has control over the staff attached to the ministers.
8. He is the bridge between that State and Central or other state Governments.
9. He receives confidential communication from the Government of India and conveys them to the Chief Minister.

As the head of the administrative Machinery, Chief of the Civil Services, Mentor and conscience keeper of civil services, he plays a significant role in the state administration.

OR

Write about the 69^th Republic day celebration in your college.
Answer:
Republic Day a memorable ocassion for the nation; was celebrated in our college this year also. Under the guidance of the teachers, students had decorated the college ground one day before and erected the podium as well as a stage for cultural programmes.

Sri Shankaranarayana – an eminent freedom fighter and politician was invited as Chief guest. As per schedule time at 9 a.m. the Chief guest arrived at our College premises. Our Principal welcomed the guest with honour, respect. After invocation and prayer, the function took off on a smooth note. The Chief guest hoisted the tricoloured national flag. President of our College Union read out the welcome speech. Principal of our College presided over the function.

The Chief Guest in his guest speech highlighted the significance of Republic day celebrations and what were the problems faced by Vallabhabhai Patel in uniting the 502 provinces and division of states according to basis of language and culture. He also explained patel’s bold steps taken to unite Hyderabad, Junagadh and Jammu and Kashmir while migrating people faced many problems. The speech was very interesting and very useful to Political Science students.

After the function was over, there were some cultural programmes like singing, dancing, mime, mono acting and skit about people migrating to India or Pakistan. Their problems were highlighed in the skit. The programme was much appreciated. The function came to an end with a vote of thanks and distribution of sweets.

Question 39.
Explain the basic principles of India’s foreign policy in brief.
Answer:
1. Non-Alignment:
The basic principles of foreign policy are Non-Alignment. After the II World War, the world war divided into two military blocs, one led by the USA and another by USSR. Many countries blocs. But India was not aligned to any of the military blocs. India was the first country to speak of non-alignment and major contributor to the emergence of the Non-Align Movement.

Jawaharlal Nehru Prime Minister of India, Gen. Sukarno President of Indonesia, Josif Broz Tito President of Yugoslavia Kwame Nkrumah Prime Minister of Ghana and Gamal Abdel Nasser Leader of Egypt were the founders of this movement. The first summit of NAM which was held at Belgrade, Yugoslavia in 1961 with 25 member countries.

At present, it has 128 members. Recent NAM Summit concluded in August 2012 at Tehran Iran. Venezuela will host the next 17^th NAM Summit in 2015.

2. Opposition of Imperialism and colonialism:
As a colony of the British over 200 years, India firmly stood in opposition to any form of imperialism and colonialism. India. played a major role in liberating the newly independent countries of Asia and Africa from colonial shackles.

3. Faith in the UN:
As a founding members of 6N, India has played a major role in achieving world peace. India as a major democratic country in the world is collaborating with UN agencies viz: UNESCO, UNICEF, UNDP, UNIDO. Indian foreign policy supports and regards the UN as an agency for world peace.

It has always advocated for peaceful settlement of international disputes within the purview of the UN. India has contributed its troops to the UN peacekeeping force operations in the tense and conflicated areas and different regions, especially in diffcult missions of the world.

4. Fairness of means:
With the inspiration of Gandhian ideas, India has always emphasized fair means in resolving international disputes. India has supported peaceful and non-violent methods and opposed the war, aggression and power politics anywhere in the world. In the Asian relations conference, New Delhi on 2^nd April of 1947.

Indian foreign policy expresses full faith in peaceful means for the settlement of dispues. India repudiates the use of force, it belives in peace achieved through peaceful means a good end through right and just means.

5. Anti – aparthied and racial discrimination:
India has stood by the principles of racial equality and opposes discrimination on the basis of race, religion caste, colour, and sex. India opposed and rejected the doctrine of white supremacy, it has been the most outspoken critic of racism. Equal and honourable treatment of all in the world in India’s goal. India is always against of the policy of apartheid followed in the South Africa and it’s broke off diplomatic relations with it as a protest to social discrimination.

6. Panchasheel:
Panchasheel continues to be another fundamental principle of Indian foreign policy. An agreement signed between Indian Prime Minister Jawaharlal Nehru and Chinese Prime Minister Zhou-en-Lai on April, 29^th 1954, sought to govern the relationship between India and China on the basis of five principles.

• Mutual respect for each others territorial integrity and sovereignty.
• Mutual non-agression.
• Mutual non-interference in each other’s internal affairs.
• Equality and mutual benefits.
• Peaceful co-existence.

It is a principle of peaceful co-existence with other nations, it guided the basis of relationship between 1954-57 marked by numerous visits and exchanges. This period is described as the Sino-Indian honeymoon.

7. Tie with the commonwealth:
Although India gets its independence from British imperalism she decided to remain within the common-wealth of Nations. The British Queen is the Head of the Commonwealth, it is made up of Britain and other countries which had once been her colonies, Traditionally India had many economic ties with the UK and other member countries of the Commonwealth Association.

In many commonwealth Heads of Government Meetings (CHOGM) strident declarations were passed regarding the problem of social discrimination, apartheid, violation of human rights and other issues of democracy in the member countries and the world. The 23^rd CHOGM was held in Colombo, Sri Lanka in November 2013. Next Summit will be designated at Tanzania in 2015.

8. Disarmament:
Major concern of India’s foreign policy in the post-cold war period is disarmament and arms race in the world. As a leader of NAM, India established beyond doubt that arms race is at the expense of human development. Expenditure on arms and ammunitions depletes distorts economic progress, programs for removal of poverty, eradication of diseases spread of education and easy availability of basic needs.

9. Sympathy towards divided Countries:
Partition of India and Pakistan due to divide and rule policy of British in 1947, resulted in terrible communal riots, enormous sufferings of people who moved out of their homes and had to begin their life again as refugees. Because of the bitter experience of this incident. India is sympathetic towards the bifurcation of Palestine in Arab, South and North Korea, East and West Germany (Now unified) and Vietnam.

10. Concern towards small countries:
India’s foreign policy emphasizes its come towards small countries of the world. India supported Malasia (1948), Ghana (1957) and Bangladesh (1971) to encourage and emerge as independent nations. Most of the decolonized territories are mini and microstates, small both in area and popultion, got the membership in NAM because of India’s support.

Since its independence, India is extending economic assistance to small countries in the world and always in the forefront of reconstruction and rehabilitation of the war-torn or small nations affected by natural disasters.

11. Affinity towards Afro-Asian Countries:
Though India has the relations with all countries of the world, she has special affinity towards the countries in Asia and Africa which are very near and following the principles followed by her. India supported at the freedom struggle of African countries e.g. Namibia became independent in March 1990, Nelson Mandela the first black leader became the President of South Africa in May 1994. In the first Afro-Asian countries summit at Bandung in 1955.

12. Against Cold War:
Cold war began with the formation of two power blocs at the end of II world war viz. US and USSR. Rivalry between them resulted in the emergence of many military alliances eg: NATO (North Atlantic Treaty Organisation) ANZUS (Australia New Zealand United States alliance) SEATO (South East Asian Treaty Organisation). Bagdad Pact, CENTO (Central Treaty Organization). As a leader of NAM, it stayed away from the two blocs.

India’s policy was neither negative nor passive, as Pandit Nehru declared to the world that NAM was not a policy of ‘fleeing away!’ India tried to reduce the rivalry between two blocs and chose to involve other members of the non-aligned group, in this mission. With the disintegration of USSR the cold war ended.

OR

Write about the Indo-Soviet relations.
Answer:
Russia is the world’s largest country extending halfway around the globe. To the west, it borders Finland, Norway, Estonia, Latvia, and Belarus. The much longer southern frontier extends into Central Asia. India’s relation with the former USSR has been a part of history, but it developed rapidly after the visits of Khrushchev and Bulganin to India and Nehru’s visit to the Soviet Union.

Since 1955, Indo- Soviet relations have reached a new scale and dimension and regarded as a good example of bilateral and inter-state relations. The Soviets have openly declared that Indo-Soviet friendship has become a part of their ‘tradition’. People to people relationship is a comer stone of their foreign policy.

Soviet Union contributed immensely for the development of industries and technology in India. The defence ties between the two countries helped India in building a credible defence structure. Its steadfast diplomatic support in the UN, on the Kashmir and Goa issues, is commendable. The use of Veto-power in the Security Council to support India in 1971 war with Pakistan was crucial.

Soviet Russia adopted the Communist ideology and India accepted Democratic Socialism. Despite the ideological differences, the two countries forged a long time Treaty of friendship for 20 years.

Factors of Indo-USSR close ties:

• Both India and USSR consider that the peaceful settlement of disputes between states as most crucial for the future of human race.
• Both believe in natural freedom and social equality as a prerequisite of just world order.
• Support to liberation movements across the world are recognized by both the countries.
• Both Countries opposed all forms of colonialism, imperialism, and racial discrimination.

Thus, India and USSR have realized geopolitical significance and the need to strengthen bilateral ties. This is to ensure the settlement of regional problems and establishment of global peace and prosperity.

1. Disintegration of Soviet Union:
In 1985 Mikhail Gorbachev, the President of USSR introduced economic and political reforms of ‘Perestroika’(restructuring ) and ‘Glasnost (openness). That stopped the arms race with US, withdrew Soviet troops from Afghanistan, helped the unification of Germany, ended the cold war.

Other weaknesses inherent in the Soviet Union led to the disintergration of USSR and formation of 15 new countries in 1991. India recognized all of them as Sovereign states and established new diplomatic relations. Ten of them joined together to form a new associations with Russia called (CIS) (Commonwealth of Independent States).

2. Bilateral relations:
The new leadership in Russia and other Republics of the erstwhile Soviet Union hold India in high regard due to India’s secular approach to politics, its stable democratic system of assuring rights and equality to all its citizens, self reliant industrial and economic base and its genuine concern for vital global issues e.g. peace, disarmament, economic development, human rights and democratization of international organization particularly of the UN and its agencies.

Russia continues its support to India to become a permanent member in UN Security Council. India and Russia both have multi-faceted relationships involving strategic and high level cooperation. The process of bilateral annual summits has given great impetus to bilateral relations. Indo- Russia cooperation has continued to move stronger on the basis mutual interest, faith, friendship, and past relations.

Students can Download 2nd PUC Accountancy Model Question Paper 3 with Answers, Karnataka 2nd PUC Accountancy Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Accountancy Model Question Paper 3 with Answers

Time: 3 Hrs 15 Min
Max. Marks: 100

Instructions: –

1. All sub questions of Section – A should be answered continuously at one place.
2. Provide working notes wherever necessary.
3. 15 minutes extra time has been allotted for the candidates to read the questions.
4. Figures in the right hand margin indicates full marks.

Section – A

I. Answer any Eight questions, each question carries One mark : ( 8 x 1 = 08)

Question 1.
What is non-profit organization?
Answer:
It is the organization that are for used for the welfare of the society and not for. profit earning.

Question 2.
The minimum number of partners in a partnership is
(a) 10
(b) 20
(c) 1
(d) 2
Answer:
(d) 2

Question 3.
State any one reason for admitting a partner.
Answer:

1. To increase the capital
2. To expand the business.

Question 4.
Write any two circumstances for the retirement of a partner.
Answer:

1. Old age of the partner.
2. Insolvency of that partner.

Question 5.
State any two types of Joint Stock Company.
Answer:

1. Public company
2. Private company.

Question 6.
What is ‘Capital Reserve’?
Answer:
Capital Reserve is a reserve that is created out of capital profits i.e. gains or profits arising from other than the normal activities of business operations i.e. activities other than sale or purchase of goods and services. This reserve is utilised to meet future capital losses, if any, and to issue bonus shares. It cannot be distributed as dividend among the shareholders.

Question 7.
Mention the techniques of Financial Statement Analysis.
Answer:

1. Comparative statements
2. Common size statements
3. Trend and ratio analysis.

Question 8.
What do you mean by ratio analysis?
Answer:
It is a simple arithmetical expression of the relationship of one number to another. It is indicated as the quotient of two numbers and can be expressed as a fraction, proportion, percentage on as a number of items.

Question 9.
What are the uses of securities premium?
Answer:
As per the Section 78 of the Companies Act of 1956, the amount of securities premium can be used by the company for the following activities:

Question 10.
Cash flow statement prepared as per standard issued by ICAI.
(a) AS1
(b) AS2
(c)AS3
(d)AS4
Answer:
(C) AS3

Section – B

II. Answer any Five questions, each question carries Two marks : ( 5 x 2 = 10 )

Question 11.
Give two example for capital receipts and payment in non-trading concern.
Answer:
Capital receipts – endowment fund, lagacies.
Capital payment – fixed assets purchases, investment.

Question 12.
What is meant by fixed capital system?
Answer:
In this system the capital of the partners remains constant or unaltered unless additional capital is invested or capital itself is withdrawn by mutual agreement.

Question 13.
What is Sacrifice Ratio?
Answer:
It is a ratio sacrificed by the old partners to the new partner.

Question 14
Give the journal entry to close partners loan account on Dissolution of Firm.
Answer:
Partners Loan A/c Dr.
To Cash/Bank A/c
[Being Partner Loan A/c closed]

Question 15.
What is oversubscription?
Answer:
When the public apply for more shares than those offered to them, it is said to be oversubscription of shares.

Question 16.
Give the meaning of Interim Dividend. ,
Answer:
It is the dividend paid by the company in between Annual General body meetings.

Question 17.
State any two uses of Financial Statement Analysis.
Answer:

1. It is useful to the Finance Manager to make constant reviews of the actual financial operations of the firm.
2. It helps the lenders who provide long term finance to the business enterprises.

Question 18.
What is Cash Flow Statement?
Answer:
A Cash Flow Statement is a statement showing inflows and outflows of cash and cash equivalents from operating, investing and financing activities of a company during a particular period. It explains the reasons of receipts and payments in cash and change in cash balances during an accounting year in a company.

Section – C

III. Answer any Four questions, each question carries Six marks : ( 4 x 6 = 24 )

Question 19.
Pratham and Chethan are partners sharing profits and losses in the ratio of 3:2. On 1-4-2013 they had capital of ₹ 60,000 and ₹ 40,000 respectively.
According to their partnership deed, they are entitled to the following:
(a) Interest on capital at 6% p.a.
(b) Interest on Drawings at 5% p.a.
(c) Chethan is allowed a salary of ₹ 500 p.m. for first 6 months and for the remaining period f ₹ 1000 p.m.
(d) Their drawings during the year Pratham ₹ 8,000 and Chethan ₹ 10,000. Interest on the same ₹ 400 and ₹ 500 respectively.
The profits for the year before makihg the above adjustments was ₹ 24,100.
Profit and loss appropriation for the year ending 31-3-2014
Answer:

Question 20.
Ramesh and Suresh are partners sharing profits and losses in the ratio of 3:2. They admit Satish into the partnership with \(\frac { 1 }{ 5 }\)^th share. Calculate the new profit sharing ratio of all the partners.
Answer:
Total share of the firm = 1
Satish’s share \(\frac { 1 }{ 5 }\)
Remaining Share = \(1-\frac{1}{5}=\frac{4}{5}\)
New profit sharing ratio of the partners
Ramesh: \(\frac{4}{5} \times \frac{3}{5}=\frac{12}{25}\)
Suresh: \(\frac{4}{5} \times \frac{2}{5}=\frac{8}{25}\)
Satish: \(\frac{1}{5} \times \frac{5}{5}=\frac{5}{25}\)
Ramesh : Suresh : Satish is 12:8:5

Question 21.
Anil, Sunil and Rahul are the partners sharing profits and losses in the ratio of 3:2:1. Their capitals as on 1-4-2014 were ₹ 70,000, ₹ 90,000 and ₹ 60,000 respectively.
Anil died on 31-12-2014 and the partnership deed provided the following:
(a) Interest on Anil’s capital at 8% p.a.
(b) Anil’s salary ₹ 2,000 p.m.
(c) His share of accrued profit upto the date of death based on previous year’s profit. Firm’s profit for 2013-2014 was ₹ 24,000.
(d) His share of Good will was ₹ 12,000
Ascertain the amount payable to Anil’s executor by preparing Anil’s Capital A/c. Ans. Anil’s Capital A/c
Answer:

Question 22.
ABC Ltd. issues Rs.10,000,12% debentures of Rs.100 each payable Rs.30 on application and remaining amount on allotment. The public applied for 9,000 debentures which were fully allotted, and all the relevant allotment money duly received. Give journal entries in the books of ABC Ltd.
Answer:

Question 23.
Karnataka Co. Ltd. had the following Assets and Liabilities as on 31-3-20 14:
Current Assets ₹ 2,40,000
Current liabilities ₹ 60,000
Quick Assets ₹ 1,20,000
Calculate: (I) Current Ratio (ii) Quick Ratio.
Answer:

Question 24.
Show the following items ¡n the Balance sheet as per the provisions of the companies Act, 1956 in (Revised) Schedule VI:

Answer:

Question 25.
Anand Ltd., arrived at a net income of ₹ 5,00,000 for the year ended March 31,2014. Depreciation for the year was ₹ 2,00,000. There was a profit of ₹ 50,000 on assets sold which was transferred to Statement of Profit and Loss account. Trade Receivables increased during the year ₹ 40,000 and Trade Payables also increased by ₹ 60,000. Compute the cash flow from operation activities by the indirect approach.
Answer:

Section – D

VI. Answer any Four questions, each question carries Twelve marks : ( 4 x 12 = 48 )

Question 26.
A company issues the following debentures:
1. 10,000 2% debentures of ₹ 100 each at par but redeemable at premium of 5% after 5 . years;
2. 10,000,12% debentures Qf ₹ 100 each at a discount of 10% but redeemable at par after 5 years;
3. 5,000,12% debentures of ₹ 1000 each at a premium of 5% but redeemable at par after 5 years;
4. 1,000,12% debentures of ₹ 100 each issued to a supplier of machinery costing ? 95,000.
5. The debentures are repayable after 5 years; and 300,12% debentures of ₹ 100 each ns a collateral security to a bank which has advanced a loan of ₹ 25,000 to the company for a period of 5 years.
6. Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.
Answer:
Entires

Question 27.
Srlkanth, Girish and Manju are partners sharing profits and losses equally. Their balance sheet as on 31-3-2014 was as follows:

Manju retired on 1-4-2014 from the business and the following adjustments are ta
a) Goodwill of the firm is created ₹ 18,000 (Ret PBLas).
b) Maintain provision for doubtful debts at 5% on Debtors.
c) Increase stock by ₹ 4,000.
d) Depreciate Machinery and Furniture by 10% each.
Prepare:
I) Revaluation A/c
ii) Goodwill A/c
iii) All the partner’s capital A/c
iv) Balance Sheet as on 1-4-2014
Answer:

Question 28.
Girija and Sudha are partners sharing profits and losses in the ratio of 3:2. They dissolved their firm on 31-3-2014.

The details available are:
a) Assets realised as follows:
Debtors ₹ 22
Furniture ₹ 14,000
Buildings ₹ 40,00
Stock ₹ 16,000
Motor car ₹ 25,000
b) Investment is taken over by Girija at Book value.
c) Computer is taken over by Sudha at 10% less.
d) All liabilities are paid in full
e) Realisation on Expenses ₹ 2,500
Prepare:
I) Realisation A/c
ii) Partners capital k/c
iii) Bank AJc
Answer:

Question 29.
Varsha Co. Ltd. issued 10,000 Preference Shares at ₹ 100 each at a premium of ₹ 5 per share payable as follows:
₹ 10 on Application
₹ 45 on Allotment (including premium)
₹ 30 on First call ₹ 20 on Final call
All the shares were subscribed and the money duly received except on final call for 500 shares. The Directors forfeited these shares and re-issued at ₹ 90 each fully paid.
Pass the necessary Journal Entries related to the above information.
Answer:

Question 30.
From the following Balance Sheet of Narayan Industries Ltd., compute the trend percentage using 31-3-2011 as the base year.

Answer:

Question 31.
Following is the Balance Sheet and Rcceipts and Payments Account of Bengaluru Education Society.


Adjustments: a) 0/S subscription for 31-3-2014 ₹ 5,000.
b) 0/S Salary for 31-3-2014 ₹ 600.
c) Half of the Entrance fee is to be capitalised.
d) Depreciate Furniture at 10°/e and Books at 30%.
Prepare:
I) Income and Expenditure A/c for the year ending 31-3-2014.
ii) Balance Sheet.
Answer:

Question 32.
From the following information calculate:
(i) Gross Profit Ratio
(ii) inventory Turnover Ratio
(iii) Current Ratio
(iv) Liquid Ratio
(y) Net Profit Ratio
(vi) Working Capital Ratio:
Revenue from Operations – ₹ 15,20,000
Net Profit – ₹ 3,60,000
Cost of Revenue from Operations – ₹ 19,20,000
Long-term Debts  – ₹ 9,00,000
Trade Payablcs ₹ 1,00,000
Average Inventory – ₹ 8,00,000
Current Assets – ₹ 7,60,000
Fixed Assets – ₹ 14,40,000
Current Liabilities – ₹ 6,00,000
Net Profit before Interest and Tax – ₹ 8,00,000
Answer:

Section – E
(Practical Oriented Questions)

V. Answer any Two questions, each question carries Five marks : ( 2 x 5 = 10 )

Question 33.
How do you treat the following in the absence of partnership deed?
a) Interest on capital
b) Interest on drawings
c) Interest on loan
d) Distribution of profit or losses
e) Salary to partner.
Answer:
a) Interest on capital – Nil
b) Interest on drawings- Nil
c) Interest on loan – 6% P.a
d) Distribution of profit or losses – Equally
e) Salary to partner – Nil

Question 34.
Write the pro-forma of Vertical Balance Sheet of the Joint Stock Company with appropriate . heads.
Answer:

Question 35.
Prepare comparative income statement of profit and loss with five imaginary figures
Answer:
Comparative Statement of profit and loss for the year ended March 31, 2014, and 2015.

Students can Download 2nd PUC Political Science Model Question Paper 5 with Answers, Karnataka 2nd PUC Political Science Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Political Science Model Question Paper 5 with Answers

Time: 3 Hrs 15
Max. Marks: 100

I. Answer the following questions in one word or a sentence each: (10 × 1 = 10)

Question 1.
Which act allowed separate electorates to Muslims for the first time during British rule?
Answer:
The Indian Councils Act of 1909 allowed a separate electorate to Muslims.

Question 2.
Article’370 of the Indian Constitution is related to which state?
Answer:
Article 370 of the Indian Constitution is related to Jammu and Kashmir.

Question 3.
Which organ is considered as permanent executive?
Answer:
Civil servants are considered as permanent executive.

Question 4.
Where KPSC is situated?
Answer:
KPSC is situated at Bengaluru.

Question 5.
Name the economist who described “Illiteracy is one of unfreedom”.
Answer:
The economist Amartya Sen.

Question 6.
Which is the root word of corruption?
Answer:
It is derived from the Latin word “rumpire” meaning “to break”.

Question 7.
What is “Laissez-faire”?
Answer:
“Laissez-faire” is the other word for “Liberalisation”.

Question 8.
Which is the strongest organ of the UN?
Answer:
Security Council is the strongest organ of the UN.

Question 9.
What is meant by Bi-polarity?
Answer:
Distribution of power, where, two powerful states have a major influence at global level.

Question 10.
What is perestroika?
Answer:
Perestroika means “restructuring”.

II. Answer any 10 of the following questions in 2-3 sentences each: (10 × 2 = 20)

Question 11.
What is “Patel Scheme”?
Answer:
Sardar Patel took charge of the Indian states Department and V.P. Menon became secretary on 5^th July 1947. They dealt with matters arising between central Government and the Indian states. The biggest individual factor in the above spectacular event was the personality of Sardar Patel.

The success of Integration is attributed to his astute statesmanship, intense patriotism and great administrative skill. He handled the Kings of Princely states with patience, tact and sympathy. He was a man of Iron will. The integration of states is his greatest contribution to independent India.

Question 12.
What is meant by Leftist parties? Give an example.
Answer:
Parties who have belief in revolutionery idiology and want to bring drastic changes in the existing system eg.: CPI.

Question 13.
Who established ‘Bahishkrit Hitaka- rani Sabha’?
Answer:
Dr. B.R. Ambedkar established ‘Bahishkrit Hitakarani Sabha’.

Question 14.
Write a short note on ‘ Saalu marada Thimmakka’.
Answer:
Achievement of Saalu Marada Thimmakka:
Thimmakka and Bikkalu Chikkaiah, a childless couple of Hulikal village of Magadi Taluk, Ramanagara District, started planting Banyan saplings by the road side between Kudur and Hulikal. They reared, cared and guarded them with their meagre earning with sheer love and affection.

The Government of Karnataka has taken the responsibility of these 248 trees. This great achievement of Saalu Marada Thimmakka is recognised and honoured by awarding Rajyothsava and National Awards. A seminar paper was presented in the UN on her contribution to environment. To create awamess among people, ‘World Environment Day’ is celebrated on 5^th June every year.

Question 15.
What is Gender based inequality?
Answer:
When discrimination is made on the basis of gender denying equal opportunities to the fairer sex, it is called gender based inequality.

Question 16.
Name any two eminent persons who played a key role in the national integration.
Answer:
Mahatma Gandhiji, VallabhaBhai Patel.

Question 17.
Name any two acts enacted to curb Terrorism.
Answer:

1. Terrorist And Disruptive Activities Prevention t Act(TADA)in 1987.
2. Prevention Of Terrorism Act [POTA] in 2001.

Question 18.
Give the meaning of Crony capitalism’.
Answer:
Crony capitalism is a negative term used to refer to the business dealings carried out by the Government Officers in a capitalist economy.

Question 19.
Why ‘Amphictyonic League’ was established in ancient Greece?
Answer:
Amphictyonic League was established in the early 6^th century BC with a view to regulate interstate relations to avoid wars and to promote unity among nations.

Question 20.
Name the two pairs of sister cities between India and China.
Answer:
Delhi and Beijing, Bangalore and Chengdu are the two pairs of sister cities between India and China.

Question 21.
What is Apartheid?
Answer:
Apartheid is discrimination on the basis of skin color.

Question 22.
Name the two factors which caused close ties between India and Soviet Russia.
Answer:
Factors for Indo-USSR close ties.

1. India and USSR considered the peaceful settlement of disputes between states as most crucial for the future of the human race.
2. Both believed in national freedom and social equality as pre-requisite of just world order.
3. Support to liberation movements across the world recognized by both countries.

III. Answer any eight of the following questions in 15-20 sentences each: (8 × 5 = 40)

Question 23.
Write the provisions of Indian Independence Act 1947.
Answer:
Provisions:
1. The Act Provided that on 15th August 1947, the appointed date, two independent dominions, India and Pakistan, would be set up and the Act provided for complete transfer of power.

2. The dominion of India got the territories of Bombay, Madras, UP, Central Provinces, Bihar, Assam, Delhi, Ajmer, Coorg, etc., and the rest of India except Sindh, Baluchistan, West Punjab, East Bengal, northwest Frontier Province and Sylhet in Assam, which became the territories of Pakistan. For demarcating the boundaries, a Boundary Commission was formed with Sir Cyril Radcliffe as the Chairman.

3. The Crown was no longer the source of authority.

4. The Governor-General and provisional Governors were to act as constitutional heads. They lost extra-ordinary powers to legislate.

5. The office of the Secretary of State was abolished.

6. From 15^th August 1947, the British Crown lost all rights of Paramountcy over India and the Indian states were free to join either Indian Union or Pakistan.

7. The power in each dominion was transferred to the Constituent Assembly which became fully sovereign from 15^th August 1947 and was absolutely free to frame the constitution. The Constituent Assemblies had a dual role i.e. Constituent and Legislative. They functioned as Central Legislature, till the new Legislatures were formed.

8. Until the new Constitution was framed, the Act of 1935 would govern the Centre and the Provinces with necessary modifications.

Question 24.
Write about the integration of Junagadh and Hyderabad provinces with the Indian union.
Answer:
1. Junagadh:
The Nawab of Junagadh declared accession to Pakistan much against the wishes of the people of the state. They were in favor of joining India. After the declaration of accession, they rose in rebellion against the Nawab. As a result, he fled to Pakistan. A Plebiscite was held in which the people voted to accede to Indian Union. Later Junagadh was merged with Saurashtra.

2. Hyderabad :
Hyderabad, the largest of the Princely States was surrounded by Indian Territory. Its ruler the ‘Nizam’ wanted an independent status. He made a ‘Standstill Agreement’ with India in November 1947 to maintain the status quo which existed before 1947. But the Indian Government felt that an independent Hyderabad would pose security threats.

In the meantime, there was a movement against the oppressive rule of the Nizam. The peasantry and the women joined in large numbers. His paramilitary forces named Razakars, raped, maimed, looted, murdered and targeted the non Muslims. To end this anarchy, the Indian army entered into Hyderabad in September 1948. This police action is known as ‘Operation Polo’. The Nizam surrendered and it was followed by complete accession of Hyderabad into Indian Union.

Question 25.
Explain any five features of Indian Political Party System.
Answer:
Nature :
The nature of Indian party system can. be traced back to the Indian National Movement. Indian National Congress (INC) was founded by A.O. Hume in 1885. It was a forum to unite the people of India to fight against British Imperialism. Due to ideological differences, Muslim League was founded in 1906.

Other parties like Hindu Maha Sabha, Communist Party of India, Forward Block and Praja Socialist Party, etc., emerged in the successive years. Later, in the post-independence period, Jan Sangh, Janatha Party, Bharatiya Janatha Party, Janata Dal, Nationalist Congress Party, according to the needs of the time and they started to work to get power, etc were floated.

1. Extra Constitutional growth :
There is no reference in the Constitution of India about M how many political parties are to exist in the country. According to Article 19 of the Constitution, all citizens can have the freedom to form associations or unions. Political parties are established on the basis of this liberty. Hence, political parties have no constitutional base.

2. Prevalence of Multi-party system :
India is a divergent country with many religions, tribes, languages, culture, and traditions. This heterogeneity leads to the emergence of many political parties to protect their interests in the mainstream of the country.

3. Spilt and merger :
It is a common phenomenon in the Indian party system. Various reasons contributed for this split like ideological differences, egoism, power hunger, etc.

4. End of single-party era:
India was under Congress rule till 1977. The happenings between 1975-1977, forced small parties to unite and fight against Congress and capture power and put an end to the single-party era.

5. Dissident activities:
Meanness of leaders like personal attitudes, favoritism, nepotism leads to dissident activities. Repetition of such happenings instigates leaders to go against the ideology of the party and paves way to political instability.

6. Defection:
Elected members of the Legislature change their parties often for personal benefits or differences of opinion and other reasons. It ruins the values of democracy and destabilizes the government.

7. Leader worship:
Most of the political parties in India emphasize the leaders rather than the ideologies of the parties. The leader decides the destiny of the political party e.g. Jawaharlal Nehru and Indira Gandhi of Congress, A.B. Vajpayee of BJR Leaders with charisma dominate the whole party.

8. Alliances without principles:
Political parties are formed with principles of democracy and secularism but they ignore them for want of power and make unholy alliances.

9. Dominance of Regional parties:
The presence of regional parties during the first general elections did not influence the voters and they were rejected. During 1980s, they emerged very strong and dominated the political scenario, e.g. DMK, ALADMK, Telugu Desam, Shiv Sena, National Conference, AGP, JD(S), RJD, SJP, BJD and other parties playing a significant role during the formation of Governments.

10. Religious, Lingual and Regionalism:
The basis of political parties in India is religion, language, regionalism and the like. e.g. Muslim league, Akalidal, Shiv Sena, DMK, AIADMK, Maharashtra Ekikaran Samiti (MES) Telangana Rashtriya Samiti (TRS) and others. In spite of the rules of the Election Commission, such political parties exist.

11. Leftist and Rightist Parties:
Party system in India consists of Leftist and Rightist ideologies, e.g. CPI, CPI (M), Forward Block, RPI and Socialist parties who have belief in revolutionary ideology and drastic changes in the system form the left front. Parties like Congress, BJP, SP, NCP, BSP, RJD, JD (U), JD (S) and others who believe in moderate changes in the system form the right front.

12. The era of coalition:
When no single political party secures absolute majority like minded political parties come together and join as a single largest group to form a coalition Government. The era of coalition started during 1977 when Janata Party came to power headed by Sri Morarjee Desai as Prime Minister at the center along with other parties. This was followed by National Front, United Front, NDA, UPA, etc.

Question 26.
Write about the organization of State Public Service Commissioner.
Answer:
The Constitution of India provides for the establishment of a Public Service Commission for each state or two or more states jointly, Accordingly, the Karnataka Public Service Commission was set up consisting of a Chairman and such other members to be determined by the Governor of the state from time to time.

At least half of the Members of the Commission should have Administrative experience with a minimum of 10 years service of the state. The remaining members must be men representing varied interests of the community. At present, there is a Chairman and nine members.

1. Appointment:
The Chairman and the members of the KPSC are appointed by the Governor, on the recommendations of the State Cabinet.

2. Term:
The Chairman and the members of the KPSC are appointed for a period of six years or till they attain the age of 62 years whichever is earlier. The members of the KPSC are not eligible P for reappointment to hold office in the KPSC after retirement.

3. Removal:
The Chairman and other members of the State Commission can be removed under the same circumstances as applicable to the Chairman and members of the UPSC.

Functions:

1. To conduct competitive examinations for the recruitment of candidates to state services.
2. To conduct departmental exami- nations for promotions.
3. To prepare rules of recruitment, promotion and transfer of civil servants from one service to another.
4. To advise the State Government on all matters relating to problems of Civil Services in the state.
5. To submit annual reports regarding its working to the state Governor.

Question 27.
Explain any five functions of the Deputy Commissioner.
Answer:
The Deputy Commissioner. (DC) is the head of U the District. He also acts as the District Magistrate Superintendent of police (SP), District Treasury Officer. Deputy Director of Pre University Education, Social Welfare Officer, Deputy Director of Public Instruction District Medical Officer, Deputy Registrar and other functions under the jurisdiction of the Deputy Commissioner. The Deputy Commissioner performs the following functions.

1. Law and order and Magisterial powers:
Deputy Commissioner enjoys magisterial powers. Being the District Magistrate, he maintains law and order and performs other judicial functions in the district.

2. Revenue functions:
It includes maintenance of Land Records and its assessment, collection of Land Revenue and other public dues and settlement of land disputes. Assistant Commissioners and Tahsildars work under the overall supervision and control of the Deputy Commissioner.

3. Development Functions:
It includes Public Health, Educational Rural Development, Social Welfare (Scheduled Caste and Scheduled Tribe) and Welfare of Backward Classes and Minorities and Protection of Weaker sections of the Society.

4. Regulatory Functions:
It includes control, regulation, and distribution of Food and Civil Supplies and essential commodities. He also controls the matters relating to excise, stamps, and registration.

5. Electoral Functions:
Deputy Commissioner is the District Election Officer and he is in charge of elections to Parliament, State Legislature and Local bodies.

Question 28.
Write a short note on Mandal Commission.
Answer:
The Union Government appointed one more Commission headed by Sri B.P. Mandal in 1979. It submitted its report in 1980 and came into effect on 7^th August 1990. It identified 3743 Castes and Communities as Backward which formed 52% of the total population. Some of the recommendations of the Commission are :

1. The Other Backward Classes (OBC’s) have to be provided 27% reservation in employment. It encompasses the services that come under the jurisdiction of both Central and State governments including technical and professional institutions.

2. If the OBCs are selected in open competition, they should not be brought under 27% reservation and have to be treated as general. This also applies to promotion.

3. In case of backlog, it should be preserved for three years.

4. The maximum age limit should be enhanced for an appointment like that of SCs and STs.

Question 29.
Write the political implications of Human Rights movement.
Answer:
Political Implications:
1. National Human Rights Commission:
The Commission came into existence on 8^th January 1994 consisting of a Chairman who is retired or sitting Chief Justice of India along with the members. The Commission has to prepare a list of human rights and get the approval by the government. Whenever a violation is committed, systematic inquiries are to be conducted and transparency should be maintained with the help of judiciary.

The commission has to enact new laws whenever the existing laws do not enact new laws when ever the existing laws do not cater to the needs of the inquiry. While doing so, it has to respect the prevailing international laws, contracts, and resolutions.

2. State Human Rights Commission:
As per the Human Rights act of India, each state is authorized to establish a State Human Commission consisting of a Chairman who is retired or sitting Supreme Court judge or Chief Justice of High Court along with members. As per the direction of the Act, the Commission was set up in Karnataka in 2005 in the same model to that of national level.

3. Child rights:
Violation of Human rights particularly on child rights are seen everywhere. The Deputy Commissioner is authorized to look into the details of exploitation on children. Measures are to be taken to register the complaints through ch i Id helpline in matters related to child labour, child abuse, encouraging begging and others.

4. Creating Awareness:
Speedy disposal of the grievances registered in the commission at the different levels proves that people are definitely aware of the movements and its achievements. Human Rights Movements have gone a long way in providing peaceful and happy life by creating awareness and remedies for the grievances.

Question 30.
“Communalism is the major threat to Indian democracy”. How?
Answer:
Communalism is an ideology of the followers of one particular religion considers the followers of other religions as inferior. Particular religion is witnessed as a homogenous and distinct group, disrespecting other religions. Communalism as a threat to Indian Democracy.

1. Threat to National Integrity:
Hostility among various religious groups is a serious threat to national unity and integrity in India. Partition of subcontinent on religious differences in 1947 has adversely affected social harmony in India. This is continued among both religious communities and leads to communalism in democratic Government.

2. Threat of Nationalism and Patriotism:
Communalism leads to various forms of religious fundamentalism and orthodox. Religious fundamentalists exploit their community people. breeds bigotry and religious identity. In such a social environment, national and patriotic feelings are marginalized and even forgotten. Therefore, communalism endangers nationalism and patriotism.

3. Impediment to National Development:
Lack of National outlook, secular attitude, and holistic approach sometimes lead to their selfish ends of few religious leaders. Through their provocative speeches and writings create communal disturbances that naturally affect the national development programmes.

4. Weak Political Leadership:
Political parties and leadership have failed to arrest and contain communalism in India. Communal politics emerged by Political parties which influenced by caste and communal considerations of voters and creates opportunities to indecisive and weak political leadership.

5. Threat to National sovereignty:
A Nation which experiences chronic internal conflicts and socio-religious divisions may become a weak country. Gradually it may lead to foreign invasion and threat to sovereignty. “United we stand, divided we fall” is the dictum to be remembered by the people and political leaders of India. Otherwise, our national sovereignty may disappear.

Question 31.
List out the features of a coalition government.
Answer:
The term coalition is derived from the Latin words ‘Co’ which means together and ‘alescere’ which means to grow up. It is an act of coalescing or uniting into one body or a union of parties. When different political forces join together, coalition is formed. Coalition politics is a system of governance by a group of political parties or by several political parties. A coalition Government means the formation of a Government by a Group or alliance of political parties.

Features:

1. Coalition is the product of multiparty system.
2. It is a democratic arrangement.
3. It challenges single-party dominance and in which smaller parties come together to defeat bigger ones in elections and snatch power.
4. Coalition may be a pre-poll arrange mentor a post-poll arrangement.
5. Alliance partners prefer to have a Common Minimum Programme (CMP) for governance.
6. During national emergency or crisis, a national Government is formed through coalition.
7. Coalition deteriorates the supreme status of the Prime Minister who heads the Government.
8. A person agreeable not only to the big party but also to the alliance partners becomes the leader of the house and naturally heads the Government.
9. Coalition partners are always free to cease their relations and fight on one’s own identity.
10. Around 70 coalitions have been formed in our country since 1937, and it is said that coalitions are politically unstable.

Question 32.
What are the causes of the rise of identity politics?
Answer:
Identity politics is defined by one’s own identity based on race, ethnicity, gender, language religion. It is the politics of recognition and a movement to claim recognition. A person may have multiple identities but he perceives only a single identity at a time. Movements of lesbians, black civil rights, wave of feminists, etc., have brought legitimacy to identity politics.
Causes for the rise of identity politics are as follows:

• Maladministration leads to the poor economic growth of a particular region or geographical backwardness of the people of a particular ethnic identity.
• The rise of regional parties has created the local awareness of language or region.
• Extreme poverty, exploitation, lack of opportunity and threat to existing group privileges to the ethnic groups.
• Ethnic groups’ fear of assimilation resulting in cultural dilution.
• Rise in standard of living, literacy and aspiration, socio-political awareness have led to identity politics.
• Lack of share in natural resources, fear of loss of land, political power and economic growth.
• Fear of losing scope in educational employment fields.Fear of losing ethnic identities like language and culture.

Question 33.
Discuss about the Kashmir issue between India and Pakistan.
Answer:
Kashmir Issue:
In India’s perspective Kashmir is an integral part of the Republic of India and to Pakistan. It is a disputed territory. The argument of Pakistan on Kashmi5r is that, since the partition of the country was done on religious basis and majority of population are Muslims, Kashmir should be part- of Pakistan. This argument failed to recognise the following facts:

• Partition was done of the British Indian provinces and not of the Indian princely states. Jammu and Kashmir was a princely state even though the population was largely M us- lim (77%).
• National Conference was the only major political party in Kashmir, which was-atfiIiated to Congress, it was opposed to Pakistan and had faith in secular politics.
• The Indian princely states had the freedom to join either India or Pakistan.
• India a secular state consisted of multi-reli-gious population.

So the Kashmiris formally decided to join India after the invasion of its territory by Pakistani tribal’s supported by the members of Pakistan Army.

In October 1947, Kashmir was invaded by tribal infiltrators of Pakistan. This forced the Maharaja to seek Indian military help. India reacted positively after ‘Instrument of Accession’ was signed on 26,^th October 1947. To resolve the crisis, the Constituent Assembly of India made a special provision through Art. 370, to provide a separate constitution to the state along with other provisions.

In 1951, the Constituent Assembly met in the state to frame a Constitution. In February 1954, the accession of the state to India was ratified by the constitution, legalising it. In November 1956. it adopted a constitution legalising the status of as a unit of the Indian Union.

Question 34.
Write a note on the doctrine of‘Panchasheel’.
Answer:
Panchsheel continues to be another fundamental principle of Indian foreign policy. An agreement signed between Indian Prime Minister Jawaharlal Nehru and Chinese Prime Minister Zhow-en-Lai on April, 29^th 1954, sought to govern the relationship between India and China on the basis of five principles.

• Mutual respect for each other’s territorial integrity and sovereignty.
• Mutual non-aggression.
• Mutual noninterference in each other’s internal affairs.
• Equality and mutual benefits.

It is a principle of peaceful co-existence with other countries, it guided the basis of relationship between 1954-57 marked by numerous visits and exchanges. This period is described as Sino-Indian honeymoon.

IV. Answer any 2 of the following in 30 to 40 sentences: (2 x 10 = 20)

Question 35.
Explain the functions of Election Commission of India.
Answer:
Democratic system in India provides for impartial, free and fair elections. The framers of Indian constitution clearly made provisions for an independent, statutory body called Election Commission to conduct elections in India. Article – 324 to 329 in part deals with the composition, powers, and functions of the Election Commission. The Election Commission conducts elections to the office of the President, Vice President Union Parliament, Legislature of State, Union territories and Local bodies.

1. Composition of Election commission:
Article 324 provides for the office of the Election Commission of India. It consists of the Chief Election Commissioner and the other Election Commissioners. Till 1993, it was a single-member body but later on, it became a three-member body during the Prime Ministership of Sri P.V. Narasimha Rao.

2. Appointment and Removal:
According to Art. 342 (2), Chief Election Commissioner and other ‘ Election Commissioners are appointed by the President of India on the advice of Union Cabinet. The term of office is 6 years or till they reach the age of 65 years. Article 324 (6) makes provisions for the salaries, allowances and other privileges to the Chief Election Commissioners, Election Commissioners, and the Personnel. The Parliament determines their salaries from time to time.

3.Removal:
According to Article 324(5) the Chief ‘Election Commissioner and other Election. Commissioners can be removed from their office in the same manner as the Judges of Supreme Court, on the grounds of misbehavior and incapacity to discharge their constitutional obligations.
Power and functions:
According to Article 324,
1. the Election Commission does the following.

• Prepares electoral roll and its periodical revision.
• Holds elections to Parliament, State Legislatures and offices of President and Vice President.
• After the announcement of elections, it decides the time table.
• It conducts by-elections to vacant seats.
• It grants recognition to political parties as National and State parties.

According to Election Emblem Act 2000

For National party:

1. 6% of valid votes in 4 or more States in LokSabha or VidhanaSabha election and 4 LokSabha seats in any State or States or
2.  Minimum 2% of Lok Sabha seats in 3 States.

For State party:

• 6% of valid votes in Lok Sabha or VidhanaSabha elections from the State and two VidhanaSabha seats, or
• 3% seats of total Vidhana Sabha seats in the States or success at least in three constituencies.
• It scrutinizes the nomination papers.
• It allots symbols to political parties and independent candidates.
• It appoints officers and other staff members to conduct election and make necessary arrangements.
• It can order for re-poll in any constituency or any polling booth.
• It can withhold the election results on valid grounds.
• The President or the Governor acts on the advice of the Election Commission at the time of disqualification of members of the house.
• It enforces the code of conduct for the candidates and political parties i.e. the election expenses and submission of accounts after election, environmental protection against noise pollution etc., during elections.
• As per the Representation of People’s Act (RPA) of 1950 and 1951, Election Commission of India conducts the process of election.

Question 36.
Explain the essentials of Nation building.
Answer:
The process of Nation-building started with the attainment of independence. The leaders of. modem India initiated the process in the right direction as they worked out the details in an orderly and systematic way. However, during implementation, they had to face numerous problems associated with national reconstruction resulting in a slow process.

The process of nation-building is an offshoot of the concept of nation-states. The idea of nation-states emerged after the signing of the treaty of West Phalia (1648) by Western Countries. The people of the common religious and traditional backgrounds living in a definite territory with like-mindedness and ‘we’ feeling form the nation. Common language, culture, and history aspirations help common people to form nationality.

1. Components to community support:
To realise the process of nation-building, collective support and endeavor of the people are essential. The quality of the people reflects the quality of a nation. Disciplined work culture and patriotic feelings also contribute to nation-building. In a democracy, people are the kingmakers. Hence, they are expected to elect competent and honest representatives. They formulate a sound public opinion on important national issues. As J.S. Mill said ‘Eternal vigilance is the price of democracy’.

2. Good Governance:
Good governance ensures accountability, transparency, efficiency, responsibility, and responsiveness. In addition, the use of technology has given rise to e-Governance. India is one of the leading countries in the world in the adoption of the system of e-governance.

3. Committed Leadership:
History depicts many examples of committed leadership. Eg.: US President F. D. Roosevelt solved the crisis of Economic depression by adopting the New Deal Policy and US became a superpower at global level after the II World War.

In India Nehru’s leadership largely contributed to the process of nation-building. He formulated goals for nation-building and introduced the planning system, adopted industrialization policy and socialistic pattern of society. He had vision and farsightedness for the transformation of India. Hence Nehru is called the Architect of Modem India.

4. Political culture:
Political Culture constitutes a set of values, attitudes, and behavior towards a political system. It requires an ideal political behavior for national reconstruction. Leaders have to embody the principles of national interest, public service, probity, and statesmanship.

5. Power Sharing:
To realize the goal, political power needs to be shared among all sections of society. The concentration of political power in the hands of a few people and some families leads to the emergence of authoritarianism and dictatorship.

As H.J. Laski rightly puts it “ A decision which affects all must be decided by all” To attain this reservation is provided to the SCs and STs and women at different levels of Government. It ensures social justice which is the foundation of socio-economic democracy.

6. Universal Education:
For the development of national universal education is of paramount importance. It enables the person to understand his potentiality and strengthens dignity. As Gandhi said, “Education is the light of life”. It encourages people to develop the spirit of inquiry the ability to analyze the national problems and to work for national progress.

Education also equips the people to shun fanaticism, parochialism, communalism, casteism and religious fundamentalism. The Right To Education Act 2009 implemented in 2010 is a step in this direction.

7. National Character:
Nationalism and patriotism are the foundations to build a national character. Each country has its distinct national character which denotes one’s nativity-as the conservatism of UK, ‘Land of Liberty’ of US, Ethnicity of Africa, Aboriginal of Australia, cultural diversity of India.

Love and respect for one’s country and national symbols such as national flag, national anthem, and national monuments are the prerequisites. One has to acquire knowledge about the history of his motherland and its contributions to human civilizations. Realizing the significance of national character, the makers of the Indian constitution have asserted the supremacy of popular sovereignty in the preamble reading with the expression.” We the people of India”.

8. Mass Media:
Mass Media is regarded as the Fourth Estate in democracy as it plays a vital role in nation-building. It highlights the omissions and commissions of the government and acts as a bridge between the government and the public. It is an effective instrument of political socialization. modernization and development. In India, the ‘Freedom of Expression’ is a fundamental right under Art. 19 of the Constitution.

9. Responsible Intelligentsia:
The contribution of intellectuals is recognized all over the world. Research and innovations in important areas of human life have contributed to national development.

In India the development in the field of social sciences, M.N. Srinivas, Amartya Sen, S.Shettar, Gail Omvedt, Kancha, Ilaya, Vandana Shiva, S.N. Balagangadhara, AshishNandy, Rajiv Malhotra and others. In Science and Technology Sir M. Vishveshwaraiah, Sir C.V. Raman, Dr. Raja Ramanna, Dr. M.G.K. Menon, Dr. CNR Rao. Dr. U.R. Rao, Dr. APJ Abdul Kalam, and others have greatly contributed for India’s present position at global level.

10. National Integration:
It is the process of uniting the people emotionally, psychologically and politically, Sardar Vallabha Bai Patel, Vinoba Bhave, Lai Bahadhur Shastri, J.B. Kriplani, Acharya Narendra Dev played a key role in the national integration. November 19^th is being observed as National integration day, the birthday of Smt. Indira Gandhi.

Question 37.
Discuss the importance and political implications of Globalisation.
Answer:
Globalisation is the process of intergrating the economy of the country with world economy. It is a movement towards greater interaction. Integration and interdependence among people and organisation across borders. The strongest manifestation of Globalisation has been the increasing economic integration among the countries in trade and investment.

An important attribute of globalization is the increasing degree of openness, which has three dimensions, ie., international trade, international investment, and international finance. It involves creation of networks and activities transcending economic, social and geographical boundaries.

The Economy of India had undergone significant policy shifts at the beginning of the 1990s. This new model of economic reforms is commonly known as the liberalization, privatization and global- isation(LPG) model.

The chain of reforms that took place with regard to business, manufacturing and financial industries targeted at strengthening the economy of the country to a more proficient level. These economic reforms had influenced the overall economic growth of the country in a significant manner.

In brief, the salient points of Globalisation are:

1. Efficiency.
2. Transfer of technology
3. Concept of a global village
4. Mobility of labour force
5. Global competition resulting in better performance
6. Outsourcing and
7. Optimum utilization of human resources.

The political implications of globalisation are as follows.
1. Power subjugation:
The effects of globalisation brought lots of changes in the world economy. For small countries it is inevitable to accept the economic decisions of strong countries. Hence it affects the soverignty of a country in totality.

2. Affects Sovereignty:
As a result of globalisation in the fields of economy, trade, transportation, etc., the sovereign countries are bound by decisions of strong countries. Hence it affects the sovereignty of a country totally.

3. Cultural Invasion:
Culture is a complex whole and exclusive to each country. The influence of globalisation in the name of cultural exchange not only invades but also degenerates the youth who are the architects of the future.

4. Enslavement of Lifestyle:
Globalisation has largely affected the younger generation. Food habits, general behavior, mutual relationships, respect to elders, human values and ultimately the whole generation has become slave in the clutches of globalisation.

5. Elimination of subsidies:
The major impact of globalisation is the curtailment of subsidies to all sectors including agriculture in a phased manner. The worst-hit are the peasants who are the backbone of the country.

6. Political Instability:
The impact of globalisation mainly is economic depression, boom or even recession which directly affects the political stability of a country. Hence development comes to a standstill.

Thus globalisation as a process of integrating the economy of the country with world economy has gone a long way.

Question 38.
Explain the basic concepts of International Relations.
Answer:
The core concepts of International Relations pertaining to politics are as follows:
1. State Sovereignty:
Jean Bodin has described the concept of Sovereignty in his work “De Republica”. He emphasizes on the state Sovereignty within their territorial jurisdiction. No State can dictate others and all States are equal in matters of status, dignity, and honour. For instance, India under British imperialism lost its sovereignty and gained its state hood only in 1947. Iraq during the Gulf war in 1990, is an example for aggression on the Sovereignty.

2. National Interests:
It is the action of the State in relation to other States. As Frankel opined, it refers to the aspiration of the state. The determinants of national interest are qualities of personalities and ideals of the decision-makers.

3. Power Blocs:
With the beginning of the cold war, two power blocs emerged, i.e., USA and USSR. President of U S. Harry S. Truman believed in the spread of democracy whereas the Warsaw Pact under Soviet policy sought the spread of Communism. Capitalistic ideology spread in UK, France, Germany, and Communist ideology spread in Poland, Bulgaria, Rumania, and Hungery.

4. Polarity:
Polarities in international relations refer to the arrangement of power within the international system. The concept arose from bi-polarity during the cold war between the two superpowers. The disintegration of the USSR has led to uni-polarity with the United States as the superpower. With rapid economic growth in 2010, China became the world’s second largest economy. Combined with the respectable international position, China has emerged as a major power in the multi-polar world.

5. Balance of Power:
The concept of Balance of Power refers to relative power position of States as actors in international relations, with its emphasis on the cultivation of power and the utilization of power for resolving the problems. Morgenthau used the term ‘Balance of Power’ as approximately equal distribution of power. It is an inseparable part of power politics.

V. Answer any two of the following questions in 15-20 sentences each: (2 × 5 = 10)

Question 39.
Write the main points of Nepalese ‘Magna Carta’.
Answer:
Nepal witnessed a popular movement in 2006. The movement was aimed at restoring democracy. At the same time, the King reinstated the old Nepal House of Representatives, with an assurance of permanent peace and multi party democracy. The King called upon the Seven Party Alliance (SPA) to bear the responsibility of taking the nation on the path of national unity and prosperity.

The popular Government assumed office on 18^th May 2006 and withdrew all the privileges given to the King unanimously. The bill included.

1. Imposing tax on the royal family and its assets.
2. Ending the Raj Parishad, a Royal Advisory council.
3. Eliminating Royal references from army and Government titles.
4. Declaring Nepal a secular country and not the Hindu Kingdom.
5. Scrapping the National Anthem until a new one is composed.
6. Eliminating the King’s position as the supreme commander of the army.

This is popularly known as ‘Nepalese Magna Carta’. Nepal became a Federal Democratic Republic with a President, a Prime Minister and a Council of Ministers in office to run the Government.

OR

Question
Mention the main provisions of State Reorganisation Act of 1956.
Answer:
States Re-organisation Act – 1956 The states reorganisation committee was constituted in December 1953 with Justice Fazl Ali, K.M. Panikkar and Hridayanath Kunzru as members, to examine the issue and recommend the principles for reorganisation keeping in view the objectivity and indiscrimination. The commission reported in 1955. The recommendations were discussed and debated and finally, the state reorganisation act was passed in November 1956.

The objective of this Act explains “The states of India, as they exist today have been formed largely as a result of historical accidents and circumstances and hence there was a demand for the reorganization of the component units of the Indian Union on a more rational basis, after taking into account, not only the growing importance of regional languages but also financial and administrative considerations.” The main features of the Act are:

1. Abolishing the distinction between parts A, B, C, and D states.

2. Establishment of two categories of units

• States
• Union territories.

3. The abolition of Rajpramukhs.

4. The Act provided for the creation of 14 states and 6 Union Territories.

After 1956, the acceptance of the Principle of linguistic states did not mean that all states immediately became linguistic. There was ‘bilingual’ Bombay state consisting of Gujarati and Marathi speaking people. After a popular agitation, the separate states of Maharashtra and Gujarat were created in 1960.

In Punjab also, there were two linguistic groups Hindi speaking and Punjabi speaking. The Punjabi speaking people demanded a separate state. The Sikh communalists led by AkaliDal and Hindu communalists, led by Bharatiya Jan Sangh used the linguistic issue to promote communal politics.

The SRC had also refused to accept the demand on the ground that it would not solve the language or communal problem of Punjab. After several powerful movements finally in 1966, Punjab was divided into Punjab and Haryana.

Yet, it is not the end of reorganization of states. Language alone did not remain the sole basis of reorganisation of states. Regional culture and complaints of regional imbalance have led to the demands of smaller states. Vidarbha in Maharashtra, Harith Pradesh in Uttar Pradesh and Gorkhaland in West Bengal are demanding statehood. The bifurcation of Andhra Pradesh into Telangana and Seemandhra is declared and divided also in 2013.

Earlier, it was felt that linguistic states may foster separation and thus weaken national unity. But, linguistic state reorganisation has removed some major sources of grievances, which could have led to divisive tendencies. It has only strengthened National unity.
At present, there are 29 States and 7 Union territories in India.
For list of states

Sr. No.	State.
1.	Andhra Pradesh
2.	Arunachal Pradesh
3.	Assam
4.	Bihar
5.	Chhattisgarh
6.	Goa
7.	Gujarat
8.	Haryana
9.	Himachal Pradesh
10.	Jammu & Kashmir
11.	Jharkhand
12.	Karnataka
13.	Kerala
14.	Madhya Pradesh
15.	Maharashtra
16.	Manipur
17.	Meghalaya
18.	Mizoram
19.	Nagaland
20.	Odisha
21.	Punjab
22.	Rajasthan
23.	Sikkim
24.	Tamil Nadu
25.	Telangana
26.	Tripura
27.	Uttar Pradesh
28.	Uttarakhand
29.	West Bengal

Union Territories:

Sr. No.	Union Territories
1.	Andaman and Nicobar Islands
2.	Chandigarh
3.	Dadra and Nagar Haveli
4.	Daman and Diu
5.	Delhi (NCT)
6.	Lakshadweep
7.	Puducherry

Question 40.
Discuss the role of India in the establishment of SAARC.
Answer:
During the 1960’s and 70s the tendency towards regional arrangements became much more prominent despite many hurdles. The emergence of Bangladesh and the Simla Agreement of 1972, became the turning points towards regional cooperation. President Zia-ur-Rahaman discussed the issue of regional co-operation with the new Indian Prime Minister, Moraji Desai.

He had also informally discussed the idea of regional co-operation with the leaders of South Asian countries during the regional and international meetings. Several factors seem to have influenced President Zia-Ur-Rahaman regarding the establishment of a regional organisation in South Asia during 1975-1979.

For Zia-Ur-Rahaman’s successful contribution in the process of Regional Organisations in South Asia, he is called as the founding father of SAARC. Between 1980 and 1983, four meetings at the Foreign Secretary level took place to establish the principles of organisation and identify areas for co-operation. Several Foreign Ministers level meetings were held between 1983 and 1985.

The first meeting of Foreign Ministers in New Delhi was held on the 1^st and 2nd of August 1983. In her inaugural address, the then Prime Minister of India Mrs. Indira Gandhi described South Asia as a troubled region and said “I am glad we are making a beginning, we have our political differences, but economic co-operation will give a strong impetus to closer friendship and greater stability in South Asia.

With unity, we can hope to move ahead for future freedom, peace, and prosperity.” She also warned that we should be ever vigilant against the attempts of external powers influencing our functioning. SAARC marks the establishment of an Association to promote and develop co-operation. Finally, the first Summit meeting of the Heads of States or Governments of South Asian countries was held at Dhaka on the 7^th and 8^thof December 1985.

Its members are 8 countries of South Asia, namely Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Ip 2010, Afghanistan became the 8th member of SAARC. Six observers of SAARC are China, Japan, European Union, Republic of Korea, United States and Iran.

OR

Write the features of Civil Services.
Answer:
Features of Civil Services:-
1. Professional body:
As Herman Finer puts it, Civil Service is a professional body of officials who are, permanent, paid and skilled. It is a whole time job and career service.

2. Hierarchy:
As per the scaler system, each civil servant has to obey his immediate superior, where higher ranking administrative officers with discretionary powers supervise their subordinates. The authority runs from above and helps to make administration stable.

3. Political Neutrality:
Civil Servants refrain always from political activities. They perform their duties without being aligned to any one political regime.

4. Anonymity:
Civil servants work behind the screen and remain anonymous even though they work for the Government. Recognition for good work or censure for any omission goes only to the concerned minister and not to. the civil servants.

5. Impartiality:
The Civil Servants have to apply the laws of the state while performing the duties without showing any favor, bias or preference to any groups or sections of the society.

6. Service motto:
They have to work for the welfare of society. They must be humble and service minded towards the public and not authoritative.

7. Permanent:
Civil Servants are called permanent executives. They discharge duties until they attain the age of superannuation. Both at the central and in Karnataka State Services, the age of retirement is sixty years. Even though disciplinary action is taken as per rules, there is security of service.

8. Jurisdiction of Law:
Every Civil Servant has to function within the prescribed jurisdiction of law. If they cross the limit, they are met with disciplinary actions.

9. Special Training:
Once the candidates are selected for top civil services, they are deputed to in-service training to acquire special skills in administration, like the Lai Bahadur Shastry Academy of Administration located in Mussoorie for the training of the newly appointed IAS officers. Sardar Vallabhbhai Patel Police Academy located in Hyderabad trains the newly appointed IPS officers.

Students can Download 2nd PUC Accountancy Model Question Paper 1 with Answers, Karnataka 2nd PUC Accountancy Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Accountancy Model Question Paper 1 with Answers

Time: 3 Hrs 15 Min
Max. Marks: 100

Instructions: –

1. All sub questions of Section – A should be answered continuously at one place.
2. Provide working notes wherever necessary.
3. 15 minutes extra time has been allotted for the candidates to read the questions.
4. Figures in the right hand margin indicates full marks.

Section – A

I. Answer any Eight questions, each question carries One mark : ( 8 × 1 = 08 )

Question 1.
Government grant is treated as …………….. receipt.
Answer:
Revenue Receipt

Question 2.
State the minimum number of persons required to form a partnership.
Answer:
2 persons

Question 3.
Accumulated profits are transferred to all partners’ capital account including new partner [True / False].
Answer:
False

Question 4.
Amount due to deceased partner is settled in the following manner ………….
[a] Immediate full payment
[b] Transferred to loan account
[c] Partly Paid in cash and balance transferred to loan account
[d] All of the above
Answer:
All of the above

Question 5.
Profit on forfeited shares is transferred to account
Answer:
Capital reserve

Question 6.
Name any one method of redemption of debentures.
Answer:
Payment is lump sum or any ether one

Question 7.
Write one objectives of financial statements.
Answer:
To provide information about economic resources and obligations of a business or any other one.

Question 8.
Comparative statement analysis is also known as …………
[a] Dynamic analysis
[b] Horizontal analysis
[c] Vertical analysis
[d] External anlysis.
Answer:
[b] Horizontal analysis

Question 9.
Expand E.P.S
Answer:
E.P.S = Earnings per share

Question 10.
Give an example for cash inflows from financing activities.
Answer:
Cash proceeds from issuing shares (equity or / and preference) or any other.

Section – B

II. Answer any Five questions, each question carries Two marks : ( 5 × 2 = 10 )

Question 11.
What is Capital Fund? 2 marks
Answer:
Capital fund is the difference between the assets and liabilities of the not for profit organization. It is aggregate capital items like legacies, entrance fees and lite membership fees.

Question 12.
Write any two contents of partnership deed.
Answer:
Contents of partnership deed.

1. Name and addresses of the firm.
2. Name and address of all the partners or any other

Question 13.
State any two methods of valuation of goodwill.
Answer:
The important methods of valuation of goodwill are as follows

1. Average profits method
2. Super profits method or any other

Question 14.
Give the journal entry for a liability taken over by a partner on dissolution of firm.
Answer:

Question 15.
What is Oversubscription?
Answer:
It is a situation, when applications for more shares of a company are received than the number offered to the public for subscription.

Question 16.
Write any two limitations of financial statements.
Answer:

1. Do not reflect current situation
2. Assets many not realize or any other.

Question 17.
State any two uses of financial statement analysis.
Answer:
Uses of financial analysis

1. Help the financial manger to take better decision.
2. Helps the management is measuring the success of the companies operations or any other.

Question 18.
Mention any two activities which are classified for preparation of cash flow statement as per AS – 3
Answer:
Two activities for the preparation of cash flow statement are :

1. Operating activities
2. Investing activities or
3. Financing activities

Section – C

III. Answer any Four questions, each question carries Six marks : ( 4 × 6 = 24 )

Question 19.
Mahesh, a partner in firm withdrew the following amounts during the year ended March 31,
May 01, 2017 – ₹ 10,000
September 30, 2017 – ₹ 8,000
November 01, 2017 – ₹ 7,000
January 31,2018 – ₹ 12,000
Calculate interest on his drawings at 9% p.a. under product method.
Answer:
Calculation of Interest in Drawings under product month

Interest = Total products x Ratio of interest x \(\frac { 1 }{ 2 }\) = \(2,17,000 \times \frac{9}{100} \times \frac{1}{12}\)
= ₹ 1627.50 or ₹ 1,628

Question 20.
Ankit, Suchit and Chandru are partners in a firm sharing profits and losses in the ratio of 4:3 : 2 Ankit retires from the firm. Suchit and Chandru agreed to share in the ratio of 5 :3 in future. Calculate gaining ratio of suchit and Chandru.
Answer:
O.RS Ratio = Anikita -4 : Suchita – 2 : Chandra – 2
NPSR = Suchita – 5 : Chandra – 3
Share of Gain = New Share – Old share

Question 21.
A, B and C are the partners in a business sharing profits and losses in the ratio of 2 : 2 : 1 respectively. Their Balance Sheet as on 31st March 2017 was as follows:

C died on 30 th Sept, 2017. The partnership deed provides the following:

1. The deceased partner will be entitled to his share of profit up the date of death calculated on the basis of previous year’s profit.
2. He will be entitled to his share cf goodwill of the firm calculated on the basis of three years purchase of average of last four years profit. The profits for last four years arc given below;
   2013-14 ₹ 80,000 ; 2014-15 ₹ 50,000; 2015-16 ₹ 40,000 and 2016-17 ₹ 30,000.
3. Interest on capital is to be allowed at 12% p.a.
   Prepare C’s Executors account.

Answer:

Question 22.
Anand Co., Ltd, issued 10,000,10% debentures at ₹ 100 each payable as :
₹ 20 on application
₹ 50 on allotment and }
₹ 30 on first and final call
All the debentures were subscribed and money duly received.
Pass necessary journal entries.
Answer:

Question 23.
From the following particulars, prepare a statement of profit and loss for the year ending 31st March 2017 as per the schedule III of the companies Act of 2013:

Answer:

Note to Accounts : Employee benefit expenses

Question 24.
From tbe following particulars, Calculate current ratio and quick ratio:

Answer:

Question 25.
Praful Ltd, arrived at a net income of ₹ 5,00,000 for the year ended March 31,2018. Depreciation for the year was ₹ 2,00,000. There was a profit of ₹ 50,000 on asset sold which was transferred to statement of profit and loss. Trade receivables increased during the year ₹ 40,000 and Trade payables also increased by ₹ 60,000.
Compute the cash flow from operating activities by the indirect method.
Answer:
Cash Flows from operating activities (Indirect method)

Section – D

VI. Answer any Four questions, each question carries Twelve marks : ( 4 × 12 = 48 )

Question 26.
Following are the Balance Sheet and Receipts and Payments Account of Golden Sports Club, Vijayapur:

Adjustments:
(a) Outstanding subscriptions for 2018 ₹ 1,000.
(b) Outstanding salary as on 3 1-03-2018 ₹ 5,OO0
(c) Half of the entrance fees to be capitalised.
(d) Depreciate sports materials @ 20% per annum
Prepare (i) Income and Expenditure account for the year ending 31-03-2018 and (ii) Balance Sheet as on that date.
Answer:

Question 27.
Raja and Rani are partners in a firm sharing profits and losses in the ratio of 3:2. Their balance sheet as on 3 1.03.2018 was as follows:

On 01.04.2018 they admitted Mantri as a partner and offer him 1/5th share in the future profits on the following terms:
a. Mantri has to bring in ₹ 30,000 as his capital and ₹ 10,000 towards goodwill. Goodwill is to be withdrawn by the old partners.
b. Depreciate Machinery by 5%
c. Appreciate buildings by 10%
d. PBD is maintain at 4,000 and Investments are to be revalued at ₹ 25,000
Prepare : (i) Revaluation Account, (ii) Partners Capital Accounts and
(iii) Balance Sheet of the firm after admission.
Answer:

Question 28.
Tanu and Sonu are partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their firm on 31.03.2018. Their Balance Sheet was as follows:

The following information is available :
a. Machinery were given to creditors in full settlement of their account and stock were given to bills payable in full settlement.
b. Investments are taken over by Soqu at book value. Sundry Debtors book value of ₹ 50,000 were taken over by Tanu at 10% less and remaining debtors realised ₹ 51,000.
c. Sonu paid realization expenses of ₹ 1,000 and she was to get a remuneration of ₹ 2,000 for completing the dissolution process.
Prepare:
(a) Realisation A/c }
(b) Partners’ Capital Accounts and
(c) Bank A/c
Answer:

Question 29.
Sun India Ltd., issued 20,000 shares of ₹100 each at a premium of ₹ 10 each. The amount was payable as follows:
₹ 20 on application
₹ 50 on allotment [including premium]
₹ 40 on first and find call.
All the shares were subscribed and money duly received except the first and final call money on 1,000 shares. The directors forfeited these shares and re-issued them as fully paid @ ₹ 90 per share.
Pass the journal entries relating to issue, forfeiture and re-issue of shares in the books of the company.
Answer:

Question 30.
Give journal entries for the following:
a. Issue of ₹ 2,00,000 12% debentures of ₹ 100 each at par and redeemable at par.
b. Issue of ₹ 50,000,10% debentures of ₹ 100 each at a premium of 5% but redeemable at par.
c. Issue of ₹ 3,00,000,8% debentures of ₹ 100 each at a discount of 5% repayable at par.
d. Issue of ₹ 100,000, 9% debentures of ₹ 100 each at par but repayable at a premium of 5%.
Answer:
In the Books of Company

Question 31.
From the following balance sheets of LG Industries Ltd., compute the Trend percentages using 31.3.2016 as base year.

Answer:

Question 32.
From the following particulars calculate :
a. Inventory turnover ratio
b. Trade receivable turnover ratio
c. Trade payable turnover ratio
d. Gross profit ratio
e. Operating ratio
f. Net Profit ratio

Particulars	₹
Revenue from operations	10,00,000
Gross profit	2,00,000
Average inventory	1,00,000
Net credit revenue from operations	6,00,000
Average Trade Receivables	1,50,000
Net Credit Purchases	5,00,000
Average Trade payables	2,50,000
Operating expenses	1,00,000
Net profit	1,00,000

Answer:
From the following particulars calculate :

Section – E
(Practical Oriented Questions)

V. Answer any Two questions, each question carries Five marks: ( 2 × 5= 10 )

Question 33.
Write two partners capital accounts under fluctuating capital system with 5 imaginary figure.
Answer:

Question 34.
Write proforma of Balance Sheet of a company with main heads only.
Answer:
Balance Sheet as at 31 st March 20

Question 35.
Prepare comparative income statement of profit and loss with five imaginary figures
Answer:
Comparative Statement of profit and loss for the year ended March 31, 2014 and 2015.

Students can Download 2nd PUC Economics Model Question Paper 2 with Answers, Karnataka 2nd PUC Economics Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Economics Model Question Paper 2 with Answers

Time: 3 hrs 15 minutes
Max. Marks: 100

PART-A

I. Choose the correct answer (1 × 5 = 5)

Question 1.
The scarce resources of an economy have
(a) Competing usages
(b) Single usages
(c) Unlimited usages
(d) None of the above
Answer:
(a) Competing usages

Question 2.
In perfect competition buyers and sellers are
(a) Price makers
(b) Price takers
(c) Price analysts
(d) None of the above
Answer:
(b) Price takers

Question 3.
market structure which produces heterogeneous.products is called
(a) Monopoly
(b) Monopolistic competition
(c) Perfect competition
(d) None of the above
Answer:
(b) Monopolistic competition.

Question 4.
In 1936, British economist J.M.Keynes published his celebrated book.
(a) Wealth of Nations
(b) Theory of Interest
(c) General Theory of Employment, Interest, and Money.
(d) Theory of Employment
Answer:
(c) General Theory of Employment, Interest, and Money.

Question 5.
The taxes on individual and firms are
(a) Direct taxes
(b) Indirect taxes
(c) Fixed taxes
(d) Non-tax revenues
Answer:
(a) Direct taxes

II. Fill in the blanks (1 × 5 = 5)

Question 6.
Wants satisfying capacity of commodity is______
Answer:
Utility.

Question 7.
In a perfectly competitive market, equilibrium occurs when market demand_____market supply.
Answer:
Equals

Question 8.
cY shows the dependence of consumption on______
Answer:
Income

Question 9.
Non-paying users of public goods are known as______
Answer:
Free riders

Question 10.
______is the record of trade in goods and services and transfer payments.
Answer:
Current account

III. Match the following (1 × 5 = 5)

Question 11.

Answer:
1 -e; 2-a; 3 -b; 4-c; 5 -d.

IV. Answer the following questions in a sentence or a word each. (1 × 5 = 5)

Question 12.
To which side does a supply curve shift due to the technological progress?
Answer:
The supply curve shifts to the right due to the technological progress.

Question 13.
What is monopoly?
Answer:
It is a market with one seller or firm with many buyers.

Question 14.
Write the meaning of autonomous consumption.
Answer:
The consumption which is independent of income is called as autonomous consumption.

Question 15.
What are public goods?
Answer:
Public goods are the goods and services provided by the government and which cannot be provided by the market mechanism. Example, roads, defence, etc.

Question 16.
What do you mean by open economy?
Answer:
An open economy is one which interacts with rest of the world through various channels.

PART-B

V. Answer any NINE of the following in 4 sentences each. (2 × 9 = 18)

Question 17.
What do you mean by inferior goods? Give example.
Answer:
The inferior goods are those goods for which the demand increases with the fall in income of consumer and vice-versa. That is, there will be a negative relationship between income of consumer and demand for inferior goods. Here, the income of consumer and demand move in opposite directions. Example: low-quality goods.

Question 18.
State the law of demand?
Answer:
Law of demand states that other things being equal, there is a negative relation between demand for a commodity and its price. In other words, when price of the commodity increases, demand for it falls and when price of the commodity decreases, demand for it rises, other factors remaining the constant.

The law can be explained in the following manner, i.e. “Other things being equal, a fall in price leads to expansion in demand and a rise in price leads to contraction in demand”.

Question 19.
Write the meaning and formula of marginal product.
Answer:
Marginal product of an input is defined as the change in output per, unit of change in the input when all other inputs are held constant. It is the additional unit of output per additional unit of variable input. It is calculated by dividing the change in output by change in input labour. The formula is
MP_L = ∆TP_L/∆L.

Question 20.
Mention the conditions needed for profit by a firm under perfect competition.
Answer:
The following conditions needed for profit by a firm under perfect competition:

• The price P must be equal to MC
• Marginal cost must be non-decreasing at q₀
• The firm to continue to produce, in the short run, price must be greater than the average variable cost and in the long run, price must be greater than the average cost.

Question 21.
Define equilibrium price and quantity.
Answer:
Equilibrium price is the price at which equilibrium is reached in the market.
The equilibrium quantity is defined as the quantity which is bought and sold at equilibrium price. Therefore, price and quantity will be at equilibrium when
Q^d(p*) = q^s(p*)
p* denotes the equilibrium price and Q^d (p*) and q^s(p*) denote the market demand and market supply, respectively.

Question 22.
State the meaning of average revenue and marginal revenue.
Answer:
Marginal revenue of a firm is defined as the increase in total revenue for a unit increase in the firm’s output. It is obtained by dividing the change in total revenue (∆TR) by change in quantity (∆q). Thus,
MR = ∆TR/∆q.
Average revenue:
We calculate average revenue, by dividing total revenue by the quantity sold. The following formula used:
AR = TR/q.

Question 23.
What are the four factors of production? Mention their rewards.
Answer:
The four factors of production are land, labour, capital and organisation. The rewards of these factors of production are as follows:

1. Land gets rent
2. Labour gets wages
3. Capital gets interest
4. Organisation gets profit.

Question 24.
Distinguish between stock and flow. Give example.
Answer:

Stock	Flow
• It is that quantity of economic variable which is measured at a particular point of time. • Examples are capital, inventory, wealth, foreign exchange reserves, etc.	• It refers to that quantity of economic variable measured over a period of time. • Examples are net investment, salary, national income, etc.

Question 25.
Give the meaning of CRR and SLR.
Answer:
The cash reserve ratio (CRR) is a certain percentage of bank deposits which a commercial bank is required to keep as cash reserves with itself.

The statutory liquidity ratio (SLR) refers to the ratio of deposits which the commercial banks have to maintain a certain percentage of their total deposits and time deposits with themselves in the form of liquid assets, as per the directions of RBI.

Question 26.
Write the meaning of excess demand and deficient demand.
Answer:
If the equilibrium level of output is more than the full employment level, it is due to the fact that the demand is more than the level of output produced at full employment level. This situation is called excess demand.

If the equilibrium level of output is less than the full employment of output, it is due to fact that demand is not enough to employ all factors of production. This situation is called deficient demand.

Question 27.
Give the meaning of investment multiplier. Write its formula.
Answer:
Investment multiplier is the ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure. Its formula is
Investment Multiplier = ∆Y/∆A= 1/1-c.
Where, ∆Y is the total increment in final goods output, ∆A is initial increment in autonomous expenditure and c is size of the multiplier.

Question 28.
Write the difference between public provision and public production.
Answer:
The difference between public provision and public production are as follows:

Public Provision	Public Production
• A set of facilities financed by the government through its budget. • These are used without any direct payment. Examples are free education, mid-day meals, etc.	• When the goods produced directly by the government, it is called public production. • These are used with direct payment. Examples are electricity, water supply, etc.

Question 29.
Mention the three linkages of open economy.
Answer:
The three linkages of open economy are as follows:

• Output market linkage
• Financial market linkage
• Labour market linkage.

Question 30.
What is the difference between current account and capital account?
Answer:
The difference between current account and capital account are as follows:

Current Account	Capital Account
• It is the record of trade in goods and services, and transfer payments. • It consists of factor and non-factor incomes apart from gifts, remittances, and grants.	• It is the record of all international transactions of assets. • It includes money, stocks, bonds, government debt, etc.

PART-C

VI. Answer any SEVEN of the following questions in 12 sentences each. (4 × 7 = 28)

Question 31.
Briefly explain the production possibility frontier.
Answer:
The production possibility frontier is a graphical representation of the combinations of two commodities (cotton and wheat) that can be produced when the resources of the economy are fully utilized. It is also called as production possibility curve (PPC) also known as transformation curve.

It gives the combinations of cotton and wheat that can be produced when the resources of the economy are fully utilized. This can be graphically represented as follows.

As per the above graph, the points lying strictly below the production possibility curve represents a combination of cotton and wheat that will be produced when all or some of the resources are either underemployed or are utilized in a wasteful fashion.

Question 32.
Explain the in difference map with the diagram.
Answer:
A family of indifference curves is called as in difference map. It refers to a set of indifference curves for two commodities showing different levels of satisfaction. The higher indifference curves show higher level of satisfaction and lower indifference curve represent lower satisfaction. A rational consumer always chooses more of that product which offers him a higher level of satisfaction which is represented in higher indifference curve. It is also called ‘monotonic preferences’.

The consumer’s preferences over all the bundles . can be represented by a family of indifference curves as shown in the following diagram.

In the given diagram, we see the group of three indifference curves showing different levels of satisfaction to the consumer. The arrow indicates that bundles on higher indifference curves are preferred by the consumer to the bundles on lower indifference curves.

Question 33.
Explain isoquant with the help of a diagram.
Answer:
An isoquant is the set of all possible combinations of the two inputs that yield the same maximum possible level of output. Each isoquant represents a particular level of output and is labelled with that amount of output. It is just an alternative way of representing the production function.
The concept of isoquant can be explained with the help of following diagram:

The given diagram generalizes the concept of isoquant. In the above diagram, labour is measured in OX axis and capital is measured in OY axis. There are 3 isoquants for the three output levels, viz. q=q₁ q=q₂ and q=q₃. Two input combinations (L₁, K₂) and (L₂, K₁) give us the same level of output q₁.

If we fix capital at K₁ and increase labour to L₃, output increases and we reach a higher isoquant q=q₂. When marginal products are positive, with greater amount of one input, the same level of output can be produced only using lesser amount of the other. Therefore, isoquant curves slope downwards from left to right (negatively sloped).

Question 34.
Write a brief note on returns to scale.
Answer:
The returns to scale can happen only in the long run as both the factors (labour and capital) can be changed. One special case, in the long run, occurs when both factors are increased by the same proportion or factors are scaled up.

a. Constant returns to scale:
When a proportional increase in all inputs results in an increase in output by the same proportion, the production function is said display constant returns to scale.

b. Increasing returns to scale:
When proportional increase in all inputs results in an increase in output by a larger proportion, the production function is said to display increasing returns to scale.

c. Decreasing returns to scale:
When a proportional increase in all inputs results in an increase in output by a smaller proportion, the production function is said to display decreasing returns to scale.

For example, if in a production process, all inputs get doubled. As a result, if the output gets doubled, the production function exhibits constant returns to scale, if output is less than doubled, exhibits decreasing returns to scale and if it is more than doubled, exhibits increasing returns to scale.

Question 35.
Explain the determinants of a firm’s supply curve.
Answer:
A firm’s marginal cost curve is a part of its marginal cost curve. Any factor that affects a firm’s marginal cost curve is a determinant of its supply curve. Following are the two factors determining a firm’s supply curve:

a. Technological progress:
The organisational innovation by the firm leads to more production of output. That means to produce a given level of output, the organisational innovation allows the firm to use fewer units of inputs. It is expected that this will lower the firm’s marginal cost at any level of output, i.e. there is a rightward shift of the MC curve. As the firm’s supply curve is essentially a segment of the MC curve, technological progress shifts the supply curve of the firm to the right. At any given market price, the firm now supplies more quantity of output.

b. Input prices:
A change in the prices of factors of production (inputs) also influences a firm’s supply curve. If the price of input (e.g. wage) increases, the cost of production also increases. The consequent increase in the firm’s average cost at any level of output is usually accompanied by an increase in the firm’s marginal cost at any level of output, which leads to an upward shift of the MC curve. That means the firm’s supply curve shifts to the left and the firm produces less quantity of output.

Question 36.
Write a short note on profit maximization of a firm under the following conditions

1. P=MC
2. MC must be none decreasing at q₀.

Answer:
A firm always wishes to maximize its profit. The firm would like to identify the quantity q₀, the firm’s profits are less at q₀ For profits to be maximum, the following conditions must hold at q₀.

1. The price P must equal MC (P = MC):
Profit is the difference between total revenue and total cost. Both total revenue and total cost increase as output increases. As long as the change in total revenue is greater than the change in total cost, profits will continue to increase.

The change in total revenue per unit increase in output is the marginal revenue and the change in total cost per unit increase in output is the marginal cost.

Therefore, we can conclude that as long as marginal revenue is greater than marginal cost, profits are increasing and as long as marginal revenue is less than marginal cost, profits will fall. It follows that for profits to be maximum, marginal revenue should be equal to marginal cost.

For the perfectly competitive firm, we have established that the MR=P. So the firm’s profit-maximizing output becomes the level of output at which P = MC.

2. Marginal cost must be non-decreasing at q₀:
It means that the marginal cost curve cannot slope downwards at the profit-maximizing output level. This can be explained with the help of diagram:

In the given diagram, at output levels q₁ and q₄ the market price is equal to the marginal cost. However, at the output level q_1, the marginal cost curve is downward sloping. The q₁ is not profit-maximizing output level.

If we observe all output levels left to the q₁ the market price is lower than the marginal cost. But the firm’s profit at an output level slightly smaller than q₁ exceeds that corresponding to the output level q₁ Therefore, q₁ cannot be a profit-maximizing output level.

Question 37.
Explain the role of the government (state) and household sector in both developed and developing countries.
Answer:
1. Role of government:
In both the developed and developing countries, apart from capitalist sector, there is the institution of state. The role of the state includes framing laws, enforcing them and delivering justice. The state here refers to the government which performs various developmental functions for the society as whole.

It undertakes production, apart from imposing taxes and spending money on building public infrastructure, running schools, providing health services, etc. These economic functions of the state have to be taken into account when we want to describe the economy of the country.

2. Role of household sector:
By household we mean a single individual who takes decisions relating to her own consumption or a group of individuals for whom the decisions relating to consumption are jointly determined. Households consist of people. These people work in firms as workers and earn wages.

They are the one who work in government departments and earn salaries or they are the owners of firms and earn profits. Therefore, the market in which the firms sell their products could not have been functioning without the demand coming from the households. Further, they also earn rent by leasing land or earn interest by lending capital.

Question 38.
Write a note on externalities.
Answer:
An externality is a cost or benefit conferred upon second or third parties as a result of acts of individual production and consumption. But the cost or benefit of an externality cannot be measured in money terms because it is not included in market activities.

In other words, externalities refer to the benefits or harm a firm or an individual causes to another for which they are not paid or penalized. They do not have any market in which they can be bought and sold. There are two types of externalities viz.,

1. Positive externalities
2. Negative externalities.

For example, let us imagine that there is chemical fertilizer industry. It produces the chemical fertilizers required for agriculture. The output of the industry is taken for counting GDP of an economy. This is positive externality.

While carrying out the production, the chemical fertilizer industry may also be polluting the nearby river. This may cause harm to the people who use the water of the river. Hence their health will be affected. Pollution also may kill fish and other organisms of the river. As a result, the fishermen of the river may lose their livelihood. Such harmful effects that the industry is inflicting on others, for which it will not bear any cost are called negative externalities.

Question 39.
Write the meaning of transaction motive and speculative motive of demand for money and liquidity trap.
Answer:
a. Transaction motive:
Transaction motive demand for money refers to holding money to carryout transactions. If we receive our income weekly and make payments on the first day of every week, we need not hold any cash balance throughout the rest of the week. But our expenditure patterns do not normally match our receipts. People earn incomes at discrete points in time and spend it continuously throughout the interval.
The transaction demand for money is represented as follows:
M^d_T = k. T
Where, T is the total value of transactions in the economy over unit period and k is a position fraction.

b. Speculative motive:
Some people hold cash to invest on shares, debentures, gold, immovable properties, etc. The speculative demand for money refers to the demand for money that people hold as idle cash to speculate with the aim of earning capital gains and profits. The speculative demand for money can be written as follows:
\(M_{s}^{d}=\frac{r_{\max }-r}{r-r_{\min }}\)
Where, r is the market rate of interest and r_max and r_min are the upper and lower limits of r, both positive constants. It clearly states that as r decreases from r_max to r_min, the value of speculative demand for money decreases from zero to infinity.

Question 40.
Write a note on balance of trade.
Answer:
Balance of trade is the difference between the value of exports and value of imports of goods of a country in a given period of time. Export of goods is entered as a credit item in balance of trade. Import of goods is entered as a debit item in balance of trade. It is also called as trade balance. Balance of that is said to be in balance when exports of goods are equal to the imports of goods, i.e. balanced balance of trade.

Surplus balance of trade arises if country’s exports of goods are more than its imports. Deficit balance of trade arises if a country’s imports of goods are more than its exports. Balance of trade is narrow concept and it may not show the international economic position of an economy. It gives partial picture of international transactions and it is less reliable. It does not include net invisibles, i.e. the difference between the value of exports and value of imports of invisibles (services) of a country in a given period of time.

Question 41.
Explain the law of diminishing marginal utility with the help of a table and diagram.
Answer:
One of the most important propositions of the cardinal utility approach to demand was the Law of Diminishing Marginal Utility. German Economist Gossen was the first to explain it. Therefore, it is called Gossen’s First Law.

According to Alfred Marshall, “The additional benefit which a person derives from a given increase of a stock of a thing diminishes, other things being equal, with every increase in the stock that he already has”.

This law simply tells us that, we obtain less and less utility from the successive units of a commodity as we consume more and more of it.

Assumptions of the Law of DMU

1. Uniform quality and size of the commodity:
The successive units of the commodity should not differ in any way either in quality or size.

2. Suitable quantity of consumption:
The Commodity units should not be very small, e.g. milk should be in glasses and not in spoons.

3. Consumption within the same time:
Consumption must be continuous. There should not be so much difference in time between the consumption of successive units.

4. No change in the price of the commodity or its substitutes:
The law is based on the assumption that the commodity’s price is not changed with successive units. The price of the substitutes is also kept at the same level.

5. Utility can be measured in cardinal numbers, i.e. 1, 2, 3, 4, …….

6. Consumer must be rational, i.e. every consumer wants to maximize his satisfaction.

The basis of this law is that every want needs to be satisfied only up to a limit. After this limit is reached the intensity of our want becomes zero. It is called complete satisfaction of the want. Therefore, we consume more and more units of a commodity to satisfy our need, the intensity of our want for it becomes less and less.

Therefore, the utility obtained from the consumption of every unit of the commodity is less than that of the units consumed earlier. This can be explained with the help of the following table.

Units of Apples	Total Utility (TU)	Marginal Utility (MU)
1	30	30
2	50	20
3	65	15
4	75	10
5	80	5
6	82	2
7	82	0
8	80	-2

Suppose a man wants to consume apples and is hungry. In this condition, if he gets one apple, he has very utility for it. Let us say that the measurement of this utility is equal to 30 utils. Having eaten the first he will not remain so hungry as before. Therefore, if he consumes the second apple he will have a lesser amount of utility from the second apple even if it was exactly like first one.

The utility he got from the second apple equals 20 units, the third, fourth, fifth and sixth apples give him utility equal to 15, 10, 5 and 2 units respectively. Now, if he is given the seventh apple he has no use for it. That means the utility of the seventh apple to the consumer is zero.

It is just possible that if he is given the eighth apple for consumption, it may harm him. Here the utility will be
negative, i.e. -2. Therefore, we are clear that the additional utility of the successive apples to the consumer goes on diminishing as he consumes more and more of it.

The Law of Diminishing Marginal Utility can be explained with the help of the following diagram.

In the diagram, the horizontal axis shows the units of apples and the vertical axis measures the MU and TU obtained from the apple units. The total utility curve will be increasing in the beginning and later falls. The marginal utility curve is falling from left down to the right clearly tells us that the satisfaction derived from the successive consumption of apples is falling.

The marginal utility of the first apple is known as initial utility. It is 30 utils. The marginal utility of the seventh apple is zero. Therefore, this point is called the satiety point. The marginal utility of the eighth apple is -2. So, it is called negative utility and lies below the X-axis.

PART-D

VII. Answer any Six of the following questions in 20 sentences each. (6 × 4 = 24)

Question 42.
Explain the market equilibrium with the fixed number of firms with the help of diagram.
Answer:
Under perfect competition, market is said to be in equilibrium when quantity demanded is equal to the quantity supplied. Here, with the help of market demand curve and market supply curve, we will determine where the market will be in equilibrium when the number of firms is fixed.
This can be illustrated with the help of the following diagram.

The given diagram illustrates equilibrium for a perfectly competitive market with a fixed number of firms. SS is market supply curve and DD is market demand curve. The market supply curve SS shows how much of the commodity firms would wish to supply at different prices and the demand curve DD tells us how much of the commodity, the consumer would be willing to purchase at different prices.

At point E, the market supply curve intersects the market demand curve which denotes that quantity demanded is equal to quantity supplied. At any other point, either there is excess supply or there is excess demand.

OP is the equilibrium price and Oq is the equilibrium quantity. If the price is P₁, the market supply is q₁ and market demand is q₄. Therefore, there is excess demand in the market equal to q₁q₄ Some consumers who are either unable to obtain the commodity at all or obtain it in insufficient quantity will be willing to pay more than P₁ The market price would tend, to increase.

All other things remaining constant, when the price increases the demand falls and quantity supplied rises. The market moves towards equilibrium where quantity demanded is equal to quantity supplied. It happens at P where supply decisions match demand decisions.

If the price is P₂, the market supply q₃ will exceed the market demand q₂ which leads to excess supply equal to q₂q₃ Some firms will not be able to sell quantity they want to sell. Therefore, they will lower their price.

All other things remaining constant, when the price falls, quantity, demanded rises and quantity supplied falls to equilibrium price P where the firms are able to sell their desired output as market demand equals market supply at P. So, the P is the equilibrium price and the corresponding quantity q is the equilibrium quantity.

Question 43.
Explain the short-run equilibrium of a monopolist firm, when the cost of production is positive by using TR and TC curves with the help of diagram.
Answer:
The short-run equilibrium of a monopolist firm, when the cost of production is positive by using TR and TC curves can be explained with the help of diagram as follows:

In the given diagram, total cost, total revenue, and profit curves are drawn. The profit received by the firm equals the total revenue minus the total cost. In the diagram, if quantity q₁ is produced, the total revenue is TR₁ and total cost is TC₁. The difference TR₁ – TC₁ is the profit received. The same is depicted by the length of the line segment AB, i.e. the vertical distance between the TR and TC U curves at q₁ level of output.

If the output level is less than q₂, the TC curve lies above the TR curve, i.e. TC is greater than TR and therefore profit is negative and the firm makes losses. The same situation exists for output levels greater than q₃. Hence, the firm can make positive profits only at output levels between q₂ and q₃.

where TR curve lies above the TC curve. The monopoly firm will chose that level of output which maximizes its profit. This would be level of output for which the vertical distance between TR and TC is maximum and TR is above the TC, i.e. TR – TC is maximum. This occurs at the output level q₀.

Question 44.
Explain the macroeconomic identities.
Answer:
The macroeconomic identities are as follows:

1. Gross domestic product (GDP):
Gross domestic product measures the aggregate production of final goods and services taking place within the domestic economy during a year. But the whole of it may not accrue to the citizens of the country. It includes GDP at market prices and GDP at factor cost.

GDP at market price is the market value of all final goods and services produced within a domestic territory of a country measured in a year. Here everything is valued at market prices. It is obtained as follows:
GDP_MP = C + I + G + X – M
GDP at factor cost is gross domestic product at market prices minus net indirect taxes. It measures money value of output produced by the firms within the domestic boundaries of a country in a year.
GDP_FC = GDP_MP – NIT.

2. Gross national product:
It refers to all the economic output produced by a nation’s normal residents, whether they are located within the national boundary or abroad. It is defined as GDP plus factor income earned by the domestic factors of production employed in the rest of the world minus factor income earned by the factors of production of the rest of the world employed in the domestic economy. Therefore,
GNP = GDP + Net factor income from abroad.

3. Net national product (NNP):
A part of the capital gets consumed during the year due to wear and tear. This wear and tear is called depreciation. If we deduct depreciation from GNP the measure of aggregate income that we obtain is called net national product. We get the value of NNP evaluated at market prices. So,
NNP = GNP – Depreciation.

4. Net national product (NNP) at factor cost:
The NNP at factor is the sum of income earned by all factors in the production in the form of wages, profits, rent, and interest, etc. belong to a country during a year. It is also known as national income. We need to add subsidies to NNP and deduct indirect taxes from NNP to obtain NNP at factor cost.
NNP_FC = NNP at market prices – indirect taxes + subsidies

5. Personal income (PI):
It refers to the part of national income (NI) which is received by households. It is obtained as follows:
PI = NI – Undistributed Profits -Net interest payments made by the households – Corporate tax + Transfer payments to the households from the government and firms.

6. Personal disposable income (PDI):
If we deduct the personal tax payments (income tax) and non-tax payments (fines, fees) from personal income, we get PDI. Therefore,
PDI = PI – Personal tax payments – Non-tax payments.

Question 45.
Explain the functions of money. How does money overcome the shortcomings of a barter system?
Answer:
The functions of money are broadly classified as follows:

1. Primary functions
2. Secondary functions
3. Contingent functions.

I. Primary functions: The primary functions of money are as follows:

a. Medium of exchange:
Money plays an important role as a medium of exchange. It facilitates exchange of goods for money. It has solved the problems of barter system. Barter exchanges become extremely difficult in a large economy because of the high costs people would have to incur looking for’suitable persons to exchange their surpluses. It helps the people to sell in one place and buy-in another place. Money has widened the scope of market transactions. Money has become a circulating material between buyers and sellers.

b. Measure of value/unit of account:
The money acts as a common measure of value. The values of all goods and services can be expressed in terms of money. As a measure of value, money performs following functions:

1. The value of all goods and services measured and expressed in terms of the money
2. Rate of exchange of goods and services expressed in money
3. Facilitates the maintenance of accounts
4. It facilitates price mechanism
5. It makes goods and services comparable in terms of price.

For instance, when we say that the value of a book is Rs.500 we mean that the book can be exchanged for 500 units of money where a unit of money is rupee in this case. If the price of a pencil is Rs.5 and that of a pen is Rs.10 we can calculate the relative price of a pen with respect to a pencil, i.e. a pen is worth 10/5=2 pencils.

II. Secondary functions: The secondary functions of money are as follows:

a. Store of value:
People can save part of their present income and hold the same for future. Money can be stored for precautionary motives needed to overcome financial stringencies. Money solves one of the deficiencies of barter system, i.e. difficulty to cany forward one’s wealth under the barter system.

For instance, we have an endowment of wheat which we do not wish to consume today entirely. We may regard this stock of surplus wheat as an asset which we may wish to consume or even sell-off”, for acquiring other commodities at some future date. But wheat is a perishable item and cannot be stored beyond a certain period.

Also, holding the stock of rice required a lot of space. We may have to spend considerable time and resources looking for people with a demand for wheat when we wish to exchange our stock for buying other commodities. This problem can be solved if we sell our wheat for money. Money is not perishable land its storage costs are also less.

b. Standard of deferred payments:
All the credit transactions are expressed in terms of money. The payment can be delayed or postponed. So, money can be used for delayed settlement of dues or financial commitments.

c. Transfer of value:
Money acts as a transfer of value from person to person and from place to place. As a transfer of value, money helps us to buy goods, properties or anything from any part of the country or the world. Further, money earned in different places can be brought or transferred to anywhere in the world.

III. Contingent functions of money: Other than primary and secondary functions, money also performs other functions which are as follows:

a. Basis of credit:
Money serves as a basis of the credit. The modem credit system exists only because of existence of money.

b. Distribution of national income:
Money helps in distribution of national income. The reward paid to factors of production in the form of rent, wages, interest, and profit are nothing but the distribution of national income at factor prices.

c. Provides liquidity and uniformity:
Money provides liquidity to all kinds of assets both moveable and immovable. Money can be converted into any type of asset and all assets can be converted into money.

d. Helps in consumers’ and producers’ equilibrium:
All goods and services are expressed in terms of money. The consumer attains equilibrium when the price of a product is equal to his marginal utility. Similarly, the producers reach equilibrium if they get maximum satisfaction. Both consumers and producers try to achieve equilibrium with the help of money.

Question 46.
Explain the classification of receipts.
Answer:
The government budget consists of revenue budget and capital budget. Both the budgets have receipts viz., revenue receipts and capital receipts.

I. Revenue receipts:
Revenue receipts are those receipts which do not lead to a claim on the government. They include the following:

1. Tax revenue.
2. Non-tax revenue.

1. Tax revenues:
These are the important component of revenue receipts. Tax revenue consists of direct tax and indirect taxes. The direct tax includes income tax, corporate tax and indirect tax includes excise duty (tax on production of goods in the country), customs duties (tax on exports and imports) and service tax (GST-goods and services tax has been introduced in place of indirect taxes from 1^st July 2017). Other direct taxes like wealth tax and gift tax have never brought in large amount of revenue and thus they are called as paper taxes.

2. Non-tax revenue:
The non-tax revenue of the central government consists of the following:

• Interest receipts on account of loans by the central government
• Dividends and profits on investments made by the government
• Fees and other receipts for services rendered by the government
• Grants-in-aid from foreign countries and international organizations.

II. Capital receipts:
All those receipts of the government which create liability or reduce financial assets are termed as capital receipts. The government receives money by way of loan or from the sale of its assets. Loans have to be repaid to the agencies from whom the government has borrowed. Thus it creates liability. Sale of government assets like sale of shares in public sector undertakings (disinvestment) reduces the total amount of financial assets of the government.

When government takes fresh loans it means that it has to be returned with interest. Similarly, when government sells an asset it means that in future its earnings from that asset will disappear. Thus, these receipts can be debt creating or non-debt creating.

Question 47.
Briefly explain the foreign exchange market with fixed exchange rates with the help of a diagram.
Answer:
Under fixed exchange rate system, the government decides the exchange rate at a particular level. The foreign exchange market with fixed exchange rates can be explained with the help of following diagram.

In the given diagram, the market-determined exchange rate is e where demand and supply intersect. However, if the government wants to encourage exports for which it needs to make rupee cheaper for foreigners it would do so by fixing a higher exchange rate say, Rs.70 per dollar from the current exchange rate of Rs.65 per dollar.

Thus, the new exchange rate set by the government is E₁ where E₁ is greater E. At this exchange rate, supply of dollars exceeds the demand for dollars. The RBI intervenes to purchase the dollars for rupees in the foreign exchange market in order to absorb this excess supply which has been marked as AB in the diagram.

Thus, by interfering, the government can maintain any exchange rate in the economy. If the government wants to set an exchange rate at a level E₂ there would be an excess demand for dollars, the government would have to withdraw dollars from its past holds of dollar. If the government fails to do so, it will encourage black market transactions.

Question 48.
Briefly explain the expenditure method of measuring GDP.
Answer:
Expenditure method is the alternative way to calculate the GDP by looking at the demand side of the products. Here, the aggregate value of the output in the economy by expenditure method will be calculated in the following way.

In this method, we add the final expenditures that each firm makes. Final expenditure is that part of expenditure which is undertaken not for intermediate purposes. If the baker buys Rs. 50 worth of wheat from the farmers is considered as intermediate good and the final expenditure received by the baker is 200. Then the aggregate value of output of the economy is Rs. 200 + Rs. 50 = Rs. 250.

Let us assume that firm ‘i’ makes the final expenditure on the following accounts:

1. Final consumption expenditures on the goods and services by households denoted as C_i.
2. Final investment expenditure incurred by the firms on capital goods denoted as I_i.
3. The expenditure that the government makes on the final goods and services produced by the firm, denoted as G_i.
4. The export revenues that firm i earns by selling its goods and services abroad denoted as X_i.

Now the total final consumption, investment, government and export expenditures received by the firm i. Now GDP according to the expenditure method is expressed as follows:

GDP = ΣN_i-1RV_i = C + I + G + X-M

ΣN_i-1 RV_i is the sum of final consumption C, investment is I, government is G and exports is X expenditures (M is imports) received by all the firms in the economy.

PART-E

VIII. Answer any two of the following project-oriented questions. (5 × 2=10)

Question 49.
A consumer wants to consume two goods. The price of bananas is Rs.4 and price of mangoes is Rs.5. The consumer income is Rs.20.

1. How many bananas can she consume if she spend her entire income on that good?
2. How many mangoes can she consume if she spend her entire income on that good?
3. Is the slope of budget line is downward or upward?
4. Are the bundles on the budget line equal to the consumers’ income or not?
5. If you want to have more of banana, you have to give up mangoes. Is it true?

Answer:

1. 5 Bananas (20/4).
2. 4 Mangoes (20/5).
3. Slope of budget line is downward.
4. Yes, the bundles on the budget line are equal to the consumer’s income.
5. True, if we want to have more of banana we have to give up mangoes.

Question 50.
From the following data calculate personal income and personal disposable income.

(a)	Net domestic product at factor cost	8,000
(b)	Net factor income from abroad	200
(C)	Undisbursed profit	1,000
(d)	Corporate tax	500
(e)	Interest received by households	1,500
(f)	Interest paid by households	1,200
(g)	Transfer income	300
(h)	Personal tax	500

Answer:
Personal income = Net domestic product at factor cost + Net factor income from abroad + (Interest received by households – Interest paid by households) + Transfer income – Corporate tax – Undisbursed profit.
Therefore, – PI = 8000 + 200 + (1500 – 1200) + 300 – 500 -1000
= 8000 + 200 + 300+300-500-1000
= 7300
Personal Disposable Income = Personal Income – Personal Tax
Therefore PDI = 7300 – 500
= 6800.

Question 51.
Name the currencies of any five countries of the following USA, UK, Germany, Japan, China, Argentina, UAE, Bangladesh, Russia.
Answer:

Countries	Currency
USA	US dollars
UK	British Pound
Germany	Euro
Japan	Japanese Yen
China	Chinese yuan
Argentina	Argentine peso
UAE	UAE dirham
Bangladesh	Bangladeshi taka
Russia	Russian Ruble

Students can Download 2nd PUC Statistics Previous Year Question Paper March 2018, Karnataka 2nd PUC Statistics Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Statistics Previous Year Question Paper March 2018

Time: 3 Hrs 15 Min
Max. Marks: 100

Section – A

I. Answer ANY TEN of the following questions: (10 × 1 = 10)

Question 1.
Define cohort.
Answer:
Cohort is a group of individuals who presumed to be born at the same time and who experience the same mortality conditions.

Question 2.
What is the value of Index Number for the base year?
Answer:
100.

Question 3.
Which weights are used in the construction of Laspeyre’s Price Index Number?
Answer:
Base year quantity : q₀

Question 4.
What is Time Series?
Answer:
Chronological arrangement of statistical data is called time series.

Question 5.
Under what condition Poisson distribution tends to Normal distribution?
Answer:
When λ is very large i.e., λ → ∞ poisson distribution tends to normal distribution.

Question 6.
Write the range of a Chi-square distribution.
Answer:
(0, ∞).

Question 7.
Which is the best estimator of population mean?
Answer:
Sample mean: x̄.

Question 8.
What is parameter space?
Answer:
Set of all admissible values of parameter is called parameter space.

Question 9.
In Statistical Hypothesis, if H₁ : μ < 50 kg then write H₀.
Answer:
H₀: μ = 50.

Question 10.
What is meant by Statistical Quality Control?
Answer:
It is the method of controlling the quality of the products using statistical technique.

Question 11.
What is feasible region (FR) in LPP?
Answer:
Feasible region is the area which satistifies by all constraints and non-negativity restrictions.

Question 12.
When is a Transportation Problem (TP) balanced?
Answer:
If Σa_i – availiability = Σb_j – Requirements, then T.P is called balanced.

Section – B

II. Answer ANY TEN of the following questions: (10 × 2 = 20)

Question 13.
Mention the methods of collecting Vital Statistics.
Answer:

• Registration method
• Census method.

Question 14.
Write any two limitations of Index Number.
Answer:

1. Many formulae are used and they give different answers for the Index.
2. As the customs and habits change from time to time, uses of commodities also vary.

Question 15.
For the following data compute Value Index Number: Σp₀q₀ = 300 and Σp₁q₁ = 375.
Answer:

Question 16.
From the following Time Series data, calculate trends values by the method of SemiAverages

Answers:
Let x and y be year and profit, ŷ – trend analyss values

Question 17.
Define Interpolation and Extrapolation.
Answer:
Interpolation is the technique of estimating the value dependent variable(Y) for any intermediate ) value of the independent variable(X).
Extrapolation is the technique of estimating the value of dependent variable (Y) any value of independent variable (X) which is outside the given series.

Question 18.
Write down the Bernoulli distribution with parameter p – 0.4.
Answer:
p(x)= p^x q^1-x : x = 0,1; q = 1 – p = 1 – 0.4 = 0.6
p(x)= 0.4^x 0.6^1-x x = 0,1
OR

Question 19.
State any two features of student /-distribution.
Answer:
n is the parameter, Mean = 0, Range = (-∞, ∞)

Question 20.
Define Point estimation and Interval estimation.
Answer:
‘While estimating the unknown parameter, if a specific value is proposed as an estimate, which is called Point estimation’.
‘While estimating the unknown parameter instead of a specific value, an interval is proposed, which is likely to contain the parameter is called Interval estimation’

Question 21.
If n₁ = 40, n₂ = 60 and P₁ = 0.02 and P₂ = 0.01 then find S.E. (p₁ – p₂).
Answer:
S.E. (p₁ – p₂) = \(\sqrt{\frac{p_{1} Q_{1}}{n_{1}}+\frac{p_{2} Q_{2}}{n_{2}}}\) ∴ Q₁ = 1 – P₁ = 1 – 0.002 = 0.98
Q₂ = 1 – P₂ = 1 – 0.01 = 0.99
S.E (p₁ – p₂) = \(\sqrt{\frac{0.02 \times 0.98}{40}+\frac{0.01 \times 0.99}{60}}\) = 0.0256

Question 22.
What do you mean by Process control and Product control?
Answer:
Controlling the quality of the product during the manufacturing process itself is called process control.
Controlling the quality of the finished products/manufactured products is called product control.

Question 23.
The objective function and two solutions of an LPP are Max Z = 5X + 4Y and A(12,10); B(14, 4). Find the optimal solution.
Answer:
Z_A = 5(12) + 4(10) = 100; Z_B = 5(14) + 4(4) = 86.
Z_A is maximum. The optimal solution is at A: x = 12, y = 10.

Question 24.
From the following Transportation Problem test whether solution is degenerate.

Answer:
Number of allocations = 4
m(rows) + n(columns) – 1 = 3 + 3 – 1 = 5
Here allocations ≠ m+n-1, the solution is degenerate.

Section – C

III. Answer any ten of the following questions: (8 × 5 = 40)

Question 25.
From the following data calculate Crude Birth Rate (CBR) and General Fertility Rate (GFR):

Answer:

= \(\frac{1270}{54,000+55,820}\) × 1000 = 11.564 Births/1000 population

= 35.7746 Births/1000 population of women of child bearing age.

Question 6.
Calculate Un-weighted geometric mean price index number for the following data.

Answer:

Unweighted G.M. P.I No: P₀₁ = AL \(\left[\frac{\sum \log \mathrm{P}}{n}\right]\)
= AL \(\left[\frac{11.5641}{5}\right]\) = AL [2.3128] = 205.4944

Question 27.
What is Consumer Price Index Number (CPI)? Write its four uses.
Answer:
Refer Page No 47. Q.No. 09 and 17

Question 28.
Compute the trend values by finding 3 yearly moving averages for the following data.

Answer:
Let X and Y be the year and sales

Question 29.
Interpolate and Extrapolate the population of India for the census years 1981 and 2021 from the following data.

Answer:
Let X and Y be the census year and population

Number of known values ofy.n = 5. The Binomial expansion (y- 1)⁵ = 0;
y₅ – 5y₄ + 10y₃ – 10y₂ + 5y₁ – y₀ = 0 ………. (1)
122 – 5(103)+ 10(84)- 10y₂ + 5(55) – 44 = 0
122 – 515 + 840 – 10y₂ + 275 – 44 = 0; – 10y₂ + 678 = 0
∴ y = 67.8 crores is the population in 1981.
From equation (1) suffixes of y are increased by 1.
We get: y₆ – 5y₅ + 10y₄ – 10y₃ + 5y₂ – y₁ = 0
y₆ – 610 + 1030 – 840 + 339-55 = 0
y₆ – 136 = 0 ∴ y₆ = 136 crores is the population in 2021.

Question 30.
The number of accidents in a year attributed to taxi drivers in a city follows Poisson distribution with mean 2.5. Out of 2000 taxi drivers, find approximately the number of drivers with
(a) One accident,
(b) More than 2 accidents in a year
Answer:
Let X be the number accidents follows poisson distribution with the parameter λ = 2.5, N = 2000

No. of drivers with one accident = 0.2053 x 2000 = 410.6 = 411

(ii) P(more than 2 accidents) = p(x > 2) = 1 – p(x ≤ 2)
= 1 – [p(x = 0) + p(x = 1) + p(x = 2)]

= 1- e^-25 [1+2.5 +3.125] = 1 – 0.0821 × 6.625
= 1 – 0.5439 = 0.4561
No. of drivers with more than 2 accidents = 0.4561 × 2000 = 912.2.

Question 31.
In a Hyper Geometric distribution, if a = 6, b = 9 and n = 4 then find
(a) P(X = 2)
(b) Standard Deviation
Answer:

Question 32.
A manufacturer claims that less than 2% of the products are defective. A retailer buys a hatch of 400 products from the manufacturer and find that 12 are defectives. Test at 1% level of significance that whether the manufacturer claims is justifiable.
Answer:
Given: P = 2% = 0.0 2, Q = 0.98, n = 400, x = 12 and so p = \(\frac{x}{n}=\frac{12}{400}\) =o.03, ∝ = 1%
H₀: 2% of the products are defective (P = 0.02)
H₁ : less than 2% of the products are defective (P < 0.02) {Lower tail test -K}

Under H₀ the test statistic is:-

At ∝ = 1% the lower tail crtical value -K = -2.33
Here Z_cal lies in (Acceptance Region)
∴ H₀ is accepted.
Conclusion: 2% of the products are defective (P = 0.02)

Question 33.
A random sample of size 16 has mean 53. The sum of the squared deviations taken from mean is 150. Can this sample be regarded as taken from the population having mean 56? (K = ±2.13)
Answer:
Given :n= 16, x̄ = 53, Σ(X— X̄)² =150, µ = 56
H₀: Population mean = µ = 56
H₁ : Population mean differs from µ ≠ 56 {Two tailed test ± K = ± 2.13)

Under H₀, the test statistic is


Critical Values ± K = ±2.13 given.
Here t_cal lies in R.R (Rejection Region)
∴ H₀ is rejected and H₁ is accepted
Conclusion: Population mean differs from µ ≠ 56

Question 34.
Ten samples of size 50 each were inspected and the number of defectives in each of them was as follows.

Obtain the control limits for np-chart.
Answer:
Given: No. of defectives: Σd= 15, Sample no. K = 10 and n- 50

Standard not known, the control limits for np-chart are:
C.L = np̄ = 50 × 0.03 = 1.5
L.C.L = np̄ – 3\(\sqrt{n \bar{p} \bar{q}}\) = 50 × 0.03 – 3\(\sqrt{50 \times 0.03 \times 0.97}\) = -2.118 = 0 [Takenas’0′]
U.C.L = np + 3\(\sqrt{n \bar{p} \bar{q}}\) = 50 × 0.03 + 3\(\sqrt{50 \times 0.03 \times 0.97}\) = 5.1187

Question 35.
Solve the following game by Maxi-min and Mini-max principle. Is game fair?

Answer:

By Maxi min-minimax principle –

• Maximin (∝) – minimum pay-off in each row is/are circled.
• Minimax(β)-Maximum pay-off in each column is/are boxed.
• Saddle point occurs at (1,3). Here pay-off ‘0’ is circled as well as boxed.
• Suggested optimal strategies for the players are: For player A-A₁, For players B-B₃
• Value of the game: V = 0, yes the game is fair.

Question 36.
The capital cost of a machine is Rs. 10,500. Its resale value is Rs. 500. The maintenance costs are as follows:

When should the machine be replaced?
Answer:
Given: P = 10,500, S_n= 500 and so (P – S_n) = (10,500 – 500) = 10,000 is fixed for all the years.

From the above table the annual average maintenance cost A(n) is minimum for n = 5, is the optimal period for replacement of the machine and A(5) = ₹ 3,660/-

Section-D

IV. Answer any two of the following questions: (2 × 10 = 20)

Question 37.
(a) From the following data show that Town-A is healthier.

Answer:
Here Deaths per 1000 are A.S.D Rs of Town A and B as A,B; P_s be the standard population

Here SDR (A) < SDR (B , so town – A is healthier

(b) Compute the Gross Reproduction Rate (GRR) from the following data

Answer:

Here , W.S.F.R – Women Specific fertility rate

W.S.F.R.(15-19)= \(\frac { 20 }{ 1600 }\) × 1000 = 12.5 1600
Similarly W.S.F.Rs can be calculated for the other age groups.

i = age width = 5; ΣW.S.F.R = 225
G.R.R = 5 × 225 = 1125 Female births/1000 Women population.

Question 38.
Compute Fisher’s Price Index Number. Show that Fisher’s Index Number satisfies TRT and FRT.

Answer:


T.R.T: p₀₁ × p_1o = 1 Except 100

Satisfies T.R.T

Question 39.
Fit a parabolic trend of the form Y = a + bX + cX² for the following Time Series.

Answer:
Let x and y be the year and production

From the normal equation na + bΣx + cΣx² = Σy; 5a + b.0 + c. 10 = 115
5a + 10c = 115 … (1) From: aΣx + bΣx² + cΣx³ = Σxy
a.0 + b. 10 + c.0 = -25; b = -2.5 and From: aΣx² + bΣx³ + cΣx⁴ = Σx²y ;
a. 10 + b.0 + c.34 = 237; 10a + 34c = 237 … (2)
from(l) and (2) 5a + 10c=115 × 2

0 – 14c = -7; ∴ c = 0.5; Put c = 0.5 in (1)
5a + 10(0.5)= 115; a = 22
The fitted parabolic trend equation is:-
y = a + bx + cx²; y =22 – 2.5x + 0.5x²

Question 40.
Fit a Binomial distribution for the following data and test at 5% level of significance that Binomial distribution is a good fit.

Answer:
Let x be the number of defective items is a Binomial variate with the parameter n = 5, and P is obtained as below:
Let f be the number of samples, then from the frequency distribution:


5p = \(\frac { 600 }{ 200 }\) , p = \(\frac { 3 }{ 5 }\) = 0.6, q=0.4
200 5
Then the p.m.f is:-
p(x) = ⁿC_xp^x q^n-x; x = 0,1,2 ….. n
p(x) = ⁵C_x 0.6^x 0.45^{5 – x}; x = 0,1,2, 5
Theoretical frequency : Tx = p(x) N
T₀ = ⁵C₀ 0.6⁰ 0.4^5-0 × 200 = 2.048
Using recurrence relation :


The fitted observed and theoretical frequency distribution (Approx) is:

CHI-SQUARE TEST:

H₀: Binomial distribution is good fit (0_i = E_i)
H₁ Binomial distribution is not good fit (0_i ≠ E_i) {upper tail text K₂}
Under H₀, the χ²-test statistic is:-

since P is estimated/calculated from the data and so (n – 1 – 1) = (n-2) d.f

χ²_cal =0.1206
At ∝ = 5% for (n- 2) = 5-2 = 3 d.f the upper tail critical value K₂= 7.81
Here χ²_cal lies in AR (Acceptance region).
Therefore H₀ is accepted.
Conclusion: B.D is a good fit.

Section-E

V. Answer any two of the following questions: (2 × 5 = 10)

Question 41.
X is a normal variate with parameters mean (μ) = 50 and variance (σ²) = 16. Find the probability that
Answer:
Given: μ = 50, Variance = σ² = 16; σ = 4


= Area from 1.5 to (-∞)
= 1 – 0.0668 = 0.9332

(ii) P(52 < X < 55) = P\(\left(\frac{52-50}{4}<Z<\frac{55-50}{4}\right)\)
= p(0.5 < Z < 1.25)
= Area from 0.5 to ∞ -Area from 1.25 to ∞
= 0.3085 – 0.1056 = 0.2029

Question 42.
From the following data regarding average weight of boys and girls. Test whether the mean weight of boys are greater than mean weight of girls.

Answer:
Let n₁ = 64, n₂ = 48, x̄₁, = 63, x̄₂ = 60, S₁² -64, S₂² = 144 .
H₀: Mean weight of boys and girls are same (µ₁ = µ₂)
H₁ : Mean weight of boys is more than girls (µ₁ > µ₂) {upper tail test ± K}
Under H₀ the test statistic is :


At ∝ = 5% the upper tail critical value K = 1.65
Here Z_cal lies in A.R (Acceptance region).
∴ H₀ is Accepted.
Conclusion: Mean weight of boys and girls are same.

Question 43.
To test the effectiveness of vaccination against Tubeculosis (TB) and following data was obtained.

Test at 1% level of significance whether vaccination and attack of TB are independent.
Answer:
H₀: Vaccination and attack of T.B are independent.
H₁ : Vaccination and attack of T.B are dependent
The given data can be written under 2 × 2 contigency table as below:-
The 2 × 2 contingency table is:

From the contingency table the χ² – test statistic is –

At ∝ = 1% for l.d.f. the uppertail critical value K₂  = 6.65
Here χ²_cal lies in R.R (rejection region)
∴ H₀ is rejected and H₁ is accepted.
Conclusion: Vaccination and attack of T.B. are independent.

Question 44.
The annual demand for an item is 3000 units. Capital cost is Rs. 7 per unit. Inventory carrying cost is 20% of capital cost per annum. If setup cost is Rs. 150 then find
(a) Economic Order Quanity and
(b) Optimum number of orders.
Answer:
Given: R = 3000/year, P = 7, I = 20% per year
C₁ = PI = 7 × 20% = 1.4/year, C₃ = 150
Shortages not allowed use E.O.Q model I

Students can Download 2nd PUC Political Science Model Question Paper 4 with Answers, Karnataka 2nd PUC Political Science Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus and score more marks in your examinations.

Karnataka 2nd PUC Political Science Model Question Paper 4 with Answers

Time: 3 Hrs 15 Min
Max. Marks: 100

I. Answer the following questions in one word – or a sentence each. (10 x 1 = 10)

Question 1.
Who is called as the ‘Iron Man of India’?
Answer:
Sardar Vallabhbhai Patel is called as the ‘Iron Man of India’.

Question 2.
Which Political party secured majority in the First General Election?
Answer:
Indian National Congress (INC) secured majority in the First General Election.

Question 3.
Who appoints the Chief Election Commissioner of India?
Answer:
The President of India, on the advice of Union cabinet, appoints the Chief Election Commissioner of India.

Question 4.
Expand EPIC.
Answer:
Elector’s Photo Identity Card.

Question 5.
Give an example of Central Services.
Answer:
Indian Foreign Services.

Question 6.
Who is the head of District Administration?
Answer:
The Deputy Commissioner (DC) is the head of the District Administration.

Question 7.
What is Economic exploitation?
Answer:
Economic exploitation refers to the economic inequality between the Backward Classes and other forward classes.

Question 8.
Which day is celebrated as The Labours Day?
Answer:
1^st of May is celebrated as The Labours Day.

Question 9.
What is a democratic movement?
Answer:
Afro-Asian nations started to overthrow despotic, autocratic other authoritarian governments and demanded democratic rights through movements. This is called democratic movement and 21^st century is known as the era of democratic movements.

Question 10.
Who was the architect of India’s foreign policy?
Answer:
Pandit Jawaharlal Nehru was the architect of India’s foreign policy.

II. Answer any 10 of the following questions in 2-3 sentences: (10 × 2 = 20)

Question 11.
What is Paramountcy?
Answer:
Paramountcy of Suzerainty refers to the Princely states accepting British supremacy but enjoyed little freedom in internal affairs.

Question 12.
When and where did the Backward Classes Movement start in Kama- taka?
Answer:
During 1920, an agitation was started by Backward classes in the Mysore Province to get political participation to Non-Brahmins and was led by Sri Kantaraje Urs.

Question 13.
What is the ‘Child Labour System’?
Answer:
Children working below the age group of 14 years in industries, mines, etc. are deprived from getting basic education.

Question 14.
State any two features of Coalition government.
Answer:
Features:

1. Coalition is the product of multiparty system.
2. It is a democratic arrangement.
3. It challenges single party dominance and in which smaller parties come together to defeat bigger ones in elections and snatch power.
4. Coalition may be a pre-poll arrange mentor a post-poll arrangement.

Question 15.
On what matters the central government can advise the states during normal times?
Answer:
On issues like the Railways, proper means of communication and transports, ensuring the welfare of SCs and STs, the central government advises the states.

Question 16.
State any two obstacles in removing corruption in India.
Answer:
Bribery, fraud, nepotism, and cronyism are the hurdles in creating a corruption-free India.

Question 17.
Name any two racial groups of Syria.
Answer:
Syria has a multi-ethnic population comprising of Arabs, Kurds, Armenians, Assyrians, and Turkmens.

Question 18.
What is national power?.
Answer:
It is the sum total of the strength and capabilities of the State harnessed and applied, to the attainment of its national objectives.

Question 19.
State any two objectives of the U.N.
Answer:

1. To maintain international peace and security.
2. To develop friendly relations among nations.

Question 20.
When was the first NAM summit held and where?
Answer:
The first summit of NAM was held at Belgrade, Yugoslavia in 1961.’

Question 21.
Name the two power blocks.
Answer:
With the beginning of cold war, two power blocs have emerged, i.e., USA for spreading Democracy and the Soviet Union for spreading Communism.

Question 22.
Write any two reasons for the liberation of Bangladesh.
Answer:
The communal clashes in Tripura. Millions of refugees fled to India which caused uneasy law and order situation upsetting Indian economy and social peace.

III. Answer any eight of the following questions in 15-20 sentences each: (8 × 5 = 40)

Question 23.
State the main provisions of the Indian Independance Act of 1947.
Answer:
Provisions:
1. The Act Provided that on 15^th August 1947, the appointed date, two independent dominions, India and Pakistan, would be set up and the Act provided for complete transfer of power.

2. The dominion of India got the territories of Bombay, Madras, UP, Central Provinces, Bihar, Assam, Delhi, Ajmer, Coorg, etc., and the rest of India except Sindh, Baluchistan, West Punjab, East Bengal, North West Frontier Province and Sylhet in Assam, which became the territories of Pakistan. For demarcating the boundaries, a Boundary Commission was formed with Sir Cyril Radcliffe as the Chairman.

3. The Crown was no longer the source of authority.

4. The Governor General and provisional Governors were to act as constitutional heads. They lost extra-ordinary powers to legislate.

5. The office of the Secretary of State was abolished.

6. From 15^th August 1947, the British Crown lost all rights of Paramountcy over India and the Indian states were free to join either Indian Union or Pakistan.

7. The power in each dominion was transferred to the Constituent Assembly which became fully sovereign from 15^th August 1947 and was absolutely free to frame the constitution. The Constituent Assemblies had a dual role i.e. Constituent and Legislative. They functioned as Central Legislature, till the new Legislatures were formed.

8. Until the new Constitution was framed, the Act of 1935 would govern the Centre and the Provinces with necessary modifications.

Question 24.
Explain the “Patel Scheme”.
Answer:
Sardar Patel and V.P. Menon dealt with matters arising between Central Government and Indian states, during the process of integration. Patel handled the princes with patience, tact, sympathy and an iron hand. The process of integration was three-fold and known as the ‘Patel Scheme’.

1. Merger of small states with adjoining provinces:
About 216 states were merged with provinces adjoining them, e.g: Merger of 24 states of Orissa, 14 states of Central Province, Pudukottai with Madras, etc. These merged states were included in part B of the Constitution.

2. Grouping of small states:
Many small states grouped themselves to form a big state with the ruler of the most important becoming the Rajpramukhs e.g.: Union of Saurashtra, Patiala, and East Punjab States Union (PEPSU), etc. These unions were called part B states.

3. Integration into Chief Commiss- oner’s Provinces:
About 61 states which were quite small and backward were converted into centrally administered areas as Chief Commissioner’s Provinces and were called Part-C States, e.g.: Himachal Pradesh, Ajmer, Coorg, Cooch-Bihar, etc.

Question 25.
What are the advantages of EVM?
Answer:
The Electronic Voting Machine(EVM) is one of the important innovations of modem technology. It has replaced the system of ballot box and ballot papers with the most effective Electronic Voting Machine. EVM consists of a controlling Unit and a Balloting Unit and both are interconnected with a cable.

The balloting unit is kept in the place where voters exercise votes. The controlling unit is with the polling officer. After the voter proves his identity, by pressing the blue button on the balloting unit against the candidate’s symbol he casts his vote. With the beeping sound, the voting procedure gets completed.

Uses of EVM:

1. EVM can be easily operated and saves time.
2. It is simple to operate by the voter to cast vote.
3. Quick and accurate results.
4. Economic and Eco If friendly.
5. Avoids invalid votes.
6. Control of irregularities.
7. NOTA option is provided.

Question 26.
Explain the role of Deputy Commissioner in District Administration.
Answer:
The Deputy Commissioner. (DC) is the head of U the District. He also acts as the District Magistrate Superintendent of police (SP), District Treasury Officer. Deputy Director of Pre University Education, Social Welfare Officer, Deputy Director of Public Instruction District Medical Officer, Deputy Registrar and other functions under the jurisdiction of the Deputy Commissioner. The Deputy Commissioner performs the following functions.

1. Law and order and Magisterial powers:
Deputy Commissioner enjoys magisterial powers. Being the District Magistrate, he maintains law and order and performs other judicial functions in the district.

2. Revenue functions:
It includes maintenance of Land Records and its assessment, collection of Land Revenue and other public dues and settlement of land disputes. Assistant Commissioners and Tahsildars work under the overall supervision and control of the Deputy Commiss- ioner.

3. Development Functions:
It includes Public Health, Educational Rural Development, Social Welfare (Scheduled Caste and Scheduled Tribe) and Welfare of Backward Classes and Minorities and Protection of Weaker sections of the Society.

4. Regulatory Functions:
It includes control, regulation, and distribution of Food and Civil Supplies and essential commodities. He also controls the matters relating to excise, stamps, and registration.

5. Electoral Functions:
Deputy Commissioner is the District Election Officer and he is in charge of elections to Parliament, State Legislature and Local bodies.

Question 27.
Explain the political implications of Peasants Movement.
Answer:
Political implications:
The successive Governments have taken measures to reduce the problems of peasants by the following methods.
1. Agricultural Loans:

• National Crop Insurance Programme (NCIP).
• National Agricultural Insurance Scheme (NAIS).
• Weather Based Crop Insurance Scheme. (WBCS)
• Primary Land Development Bank (PLD).

2. National Agriculture Scheme:
For agricultural improvements, National Development Council (NDC) has made enormus arrangements in 2007 and National Agriculture scheme was implemented with a view to enhance 4% in agricultural production. The main objective of this plan is to determine agricultural policy of all the states and provide essential facilities.

3. Waiving of debts:
When farmers are not able to get the yield to their expectations they cannot clear the debts. To uplift the farmers from debts the Governement have taken necessary measures to waive the debts of farmers. This has reduced the suicide and death rate of farmers.

4. Establishment of Peasant Liason centres:
To protect farmers from low quality seeds, fertilizers and protect crops from diseases, Peasant Liason centres are opened to provide necessary implements and information related, at Hobli level.

5. Veterinary services:
Government is proving veterinary services to the livestock which also supports agriculture. Though encouraging dairying and saavayava Krishi (Organic agriculture) which are allied sectors.

6. Land Reforms Act:
National Land Reforms Act was implemented in Karnataka in 1974 when Sri Devaraj Urs was the Chief Minister of Karnataka. Land reforms Act of 2013 provides more compensation to Landowners, rehabilitation and settlement facilities, retaining the ownership of land with farmers, no forceful acquisition of agricultural land till the final settlement facilities, retaining the ownership of land with farmers, no forceful acquisition of agricultural lands till the final settlement. Providing the same quantum of land elsewhere in the case of SCs and STs.

Question 28.
Elucidate the role of Saalumarada Thimmakka in Environmental protec- tion.
Answer:
Achievement of Saalu Marada Thimmakka:
Thimmakka and Bikkalu Chikkaiah, a childless couple of Hulikal village of Magadi Taluk, Ramanagara District, started planting Banyan saplings by the roadside between Kudur and Hulikal. They reared, cared and guarded them with their meagre earning with sheer love and affection.

The Government of Karnataka has taken the responsibility of these 248 trees. This great achievement of Saalu Marada Thimmakka is recognised and honoured by awarding Rajyothsava and National Awards. A seminar paper was presented in the UN on her contribution to environment. To create awamess among people, ‘World Environment Day’ is celebrated on 5^th June every year.

Question 29.
How the gender based inequality is a slur to Democracy?
Answer:
Discriminations made on the basis of men and women, denying equal opportunities to the fairer sex are called gender based inequalities. It is the result of gender bias favoring male throughout the ages. The prevalence of gender based inequality in family, economic, cultural, educational and political fields are seen.
Causes:
1. Manu Smriti:
Earlier the Hindu society followed ‘Manu Smriti’ which asserted that women should always be under the guardianship of men at different stages of her life. He wanted her to be within the four walls, restricting her from the happenings of the society.

2. Male domination:
The society is based on physical strength of man where he dominates the female. He does not want that female should take over his responsibility and authority at home as well as in society.

3. Denial of education:
Male domination is reflected in the field of education too. Denying education for girls for many centuries has made them incapable in many fields. Men occupied major jobs and secured well and dominating positions in the entire society.

4. Dowry system:
The practice of dowry system contributes for inequality of gender. Boys are treated as assets and girls as burden. The attitude also intensifies the discrimination between men and women.

5. Inadequate representation:
Women constitute 50% of the total population. They are inadequately represented in the field of politics and economics. Even though women are as capable as men, they are not allowed in these fields. Women have little or no opportunities in participating in public life.

Question 30.
What are the constitutional measures taken to eradicate illiteracy as per the 86^th Constitutional Amendment Act.
Answer:
Article 45 envisages states to provide free and compulsory education. It has not been implemented properly. Hence, through the 86^th Constitutional Amendment, it is made compulsory. The Parliament of India passed the 86^th constitutional amendment act in 2002. Accordingly, 21A is inserted in the constitution which aimed at making right to education a fundamental right for children between 6 to 14 years of age.
Its main provisions are:
1. Compulsory education means obligation of the government to provide free elementary education and ensure compulsory admission and attendance and completion of education to every child in the age group of 6 to 14.

2. It is a compulsory duty of parents and guardians to send the children to schools.

3. The schools must have minimum facilities such as adequate pupil I-teacher ration, trained teachers, infrastructure and playgrounds.

4. The Central Government and State Government bear the expenditure on the basis of agreed formula (in 2013 it was in the ratio of 65:35)

5. The school management committee or the local authority should identify the dropouts or out of school children and admit them in classes appropriate to their age. Before admission, they have to be given special training.

As per section 12, (1) C of the RTE Act, private aided and non-minority unaided schools must reserve 25 percent of seats for children belonging to Backward Classes and disadvantaged groups in neighborhood areas (7.5% for ST category and 16% for other Backward Groups.)

Question 31.
“The youth of India can change the Indian Political System”. Discuss.
Answer:
India is a vast country with 1.2 billion population. Being the seventh-largest country geographically, it can just be described as a mini continent. Universal Adult Franchise is provided for both men and women belonging to all castes, colors, regions, languages, religions, etc., In spite of presence of several hurdles like poverty, illiteracy, inequality, communalism, and terrorism.

India has crossed several other hurdles and milestones and proved to be a vibrant democracy. Registration of new voters is a continuous process. As franchise brings a voice to voters in democracy due care must be taken to the enrolment of women and youth. As per 61^st Amendment to the constitution, the voting age reduced to 18 years from 21 during 1986 when Sri Rajiv Gandhi was the Prime Minister.

With the reduction in voting age the size of the electorate increased heavily providing an opportunity to the younger generation to participate in choosing their representatives. The country that respects its youth can bring new thinking in all walks of life including politics. Youth have the energy to liberate and purify the political arena of the country as they normally do not accept traditional caste barriers.

Usually, leaders of older generations do not prefer youth in politics as they are revolutionary and reject the traditional mindset. “ Youth have the courage and the capacity to understand burning issues like boundary, language, river, water, ethnic disputes.

Increase in number of youth in politics enhances the credibility of democracy. The honest involvement of youth in politics being away from violence is the need of the hour to strengthen the system. Recent development shows a large number of youth participating and winning both Loka Sabha and Assembly elections.

Question 32.
Explain any five areas of co-operation between India and SAARC.
Answer:
In the rapidly changing global environment, regional integration in South Asia has assumed a new strategic significance. As a largest economy of the South Asian region, it is imperative and right time for India to inculcate an environment of trust among SAARC partners. India stands to gain substantially from greater economic integration in the region.
1. Summit level cooperation:
India has participated in all the summit level meetings. During the 16^th SAARC summit held in New Delhi on 3^rd and 4^th April 2007, the leaders recognized collectively in fulfilling this in a better way with the rest of the world. The Prime Minister of India Mr. Rajiv Gandhi attended the first SAARC summit held in Bangladesh in 1985. He emphasized the core issue of economic development in the South Asian region with joint efforts.

India is committed to fastening the sense of a South Asian Identity through the SAARC process, enhancing mutual confidence in multiple areas in trying to leverage India’s rapid economic growth into win-win arrangements with her neighbors.

The change perhaps started in about 2002 in India, has gained momentum since India acquired the Chairmanship of SAARC in April 2007. Among several factors that are perhaps responsible for this positive movement, the more important one is the acceleration in economic growth in all major regional economics especially India.

2. SAARC regional Centres:
India is having two regional centers:-

1. SAARC Documentation center (SDC) in New Delhi.
2. SAARC Disaster Management Centre (SDMC) in New Delhi.

3. SAARC Development Fund (SDF):
India has been 6ne of major contribution to the SAARC Development Fund. The Fund has the areas of action social, economic and infrastructure. India has offered US $100 million for the SAARC fund to be utilized for projects in other SAARC countries.

4. Economic co-operation:
The Agreement on SAARC Preferential Trading Arrangement (SAPTA) was signed in 1993 and four rounds of trade negotiations have been concluded. The Agreement on South Asian Free Trade Area (S AFTA) was signed. Creation of Export Promotion Zones and Special Economic Zones in each SAARC member country as’ pointed out by industrial bodies which enhances investment and will thus encourage Intra-SAARC investments.

5. People-to-people Countries:
For strengthening cooperation in information and media related activities of the Association, the heads of National Television and Radio Organisations of member countries meet annually. The SAARC Audio-Visual exchange (SAVE) Committes disseminates information both on SAARC and its member States through regular Radio and TV programme.

6. Educational Cooperation:
India proposed to create a center of excellence in the form of a South Asian University (SAU), which can provide world class facilities and professional faculty to students and researchers drawn from each country of the region. The south Asian university is established in India.

Question 33.
Write a note on the principles of Panchasheel.
Answer:
Panchsheel continues to be another fundamental principle of Indian foreign policy. An agreement signed between Indian Prime Minister Jawaharlal Nehru and Chinese Prime Minister Zhow-en-Lai on April, 29th 1954, sought to govern the relationship between India and China on the basis of five principles.

1. Mutual respect for each other’s territorial integrity and sovereignty.
2. Mutual non-aggression.
3. Mutual noninterference in each other’s internal affairs.
4. Equality and mutual benefits.

It is a principle of peaceful co-existence with other countries, it guided the basis of relationship between 1954-57 marked by numerous visits and exchanges. This period is described as Sino-Indian honeymoon.

Question 34.
Analyze the Kashmir issue in India and Pakistan relations.
Answer:
In India’s perspective, Kashmir is an integral part of the republic of India and to Pakistan, it is a disputed territory. The argument of Pakistan on Kashmir is that, since the partition of the country was done on religious basis and majority of, population are Muslims, Kashmir should be part of Pakistan. This argument failed to recognize the following facts:

1. Partition was done of the British Indian Provinces & and not of the Indian princely states.
2. National Conference was the only major political party in Kashmir, which was affiliated to Congress. It was opposed to Pakistan and had faith in secular politics.
3. The Indian princely states had the freedom to join either India or Pakistan.
4. India was a secular state consisting of a multi-religious population.

So, Kashmir formally decided to join India after the invasion of its territory by Pakistani tribals supported by the Pakistan Army.

IV. Answer any 2 of the following in 30 to 40 sentences: (2 × 10 = 20)

Question 35.
Distinguish between direct and indirect elections.
Answer:
Direct Election:
In this system, all the eligible Voters of the nation directly elect their representatives through secret ballots without any intermediaries. For e.g. the Lok Sabha (House of People) and Vidhana Sabha (State Legislative Assembly) in India and the House of Commons in U.K and House of Representatives in the USA are directly elected.

Features of Direct election are:
1. More democratic:
Eligible voters have a wider choice to elect their representatives directly. This provides a direct relationship between the voter and their representatives.

2. Responsive:
Since there is a direct relationship between voters and the representatives, they are responsive to the needs and aspirations of the people.

3. Creates political awareness:
In the direct election, voters come in direct contact with their representatives. Voters are curious about them and gather information through mass media and print media about political parties, their manifesto, and personalities of the candidates. In this way, the voters get educated.

4. Selection of eligible candidates:
The voters test the capacities, capabilities of the candidates and finally elect them since there is a rapport between the two.

5. Public relationship:
In view of the forthcoming OH elections, representatives keep regular contact with their constituencies and electorate.

6. Indirect election:
It is another method of election where voters elect a group of members in the first instance to form an ‘Electoral College’ as an intermediary body to elect representatives. For e.g. the President of India and USA are elected through electoral colleges, which consists of the representatives of people. The members of Rajyasabha and members of the State Legislative Council are indirectly elected by the people.

7. Selection of best candidates:
In this method, candidates are elected by the intelligent Voters. For e.g. at the first step, people elect their representatives to the Electoral College and at the second step, they in turn judiciously elect the final representatives of legislature or Head of the nation. This method involves double election.

8. Prevents unhealthy campaign:
It avoids all sorts of evils like dirty propaganda tricks and instigation of people for petty issues to divide them. For e.g. in the election of President of India, the average voters are kept outside and only the elected members of both the Houses of the Parliament participate to elect them.

9. Peaceful voting:
In this method, there is no scope for illegal activities or fights during the election as it happens in the direct election. In the electoral. process, only a small number of enlightened voters peacefully exercise their votes judiciously. The elections are conducted according to well-defined norms and values.

10. Little scope for emotions:
Elected Representatives are not carried away by passions or sentiments nor can they be influenced like an average voter. There is no chance of misusing sensitive issues for political gains. The higher leaders are elected by people representatives and act with a sense of responsibility.

11. Suitable to developing nations:
Since majority of the voters are ignorant, not educated and intelligent hence a small group of politically educated and wise voters elect responsible and public-spirited representatives.

Question 36.
Describe the essentials of Nation-Building
Answer:
The process of Nation-building started with the attainment of independence. The leaders of. modem India initiated the process in the right direction as they worked out the details in an orderly and systematic way. However, during implementation, they had to face numerous problems associated with national reconstruction resulting in a slow process.

The process of nation-building is an offshoot of the concept of nation-states. The idea of nation-states emerged after the signing of the treaty of West Phalia (1648) by Western Countries. The people of the common religious and traditional backgrounds living in a definite territory with like mindedness and ‘we’ feeling form the nation. Common language, culture, and history aspirations help common people to form nationality.

1. Components to community support:
To realise the process of nation building, collective support and endeavor of the people are essential. The quality of the people reflects the quality of a nation. Disciplined work culture and patriotic feelings also contribute to nation-building. In a democracy, people are the kingmakers. Hence, they are expected to elect competent and honest representatives. They formulate a sound public opinion on important national issues. As J.S. Mill said ‘Eternal vigilance is the price of democracy’.

2. Good Governance:
Good governance ensures accountability, transparency, efficiency, responsibility, and responsiveness. In addition, the use of technology has given rise to e-Governance. India is one of the leading countries in the world in the adoption of the system of e-governance.

3. Committed Leadership:
History depicts many examples of committed leadership. Eg.: US President F. D. Roosevelt solved the crisis of Economic depression by adopting the New Deal Policy and US became a superpower at global level after the II World War. In India Nehru’s leadership largely contributed to the process of nation-building. He formulated goals for nation-building and introduced the planning system, adopted industrialization policy and socialistic pattern of society. He had vision and farsightedness for the transformation of India. Hence Nehru is called the Architect of Modem India.

4. Political culture:
Political Culture constitutes a set of values, attitudes, and behavior towards a political system. It requires an ideal political behavior for national reconstruction. Leaders have to embody the principles of national interest, public service, probity, and statesmanship.

5. Power Sharing:
To realize the goal, political power needs to be shared among all sections of society. The concentration of political power in the hands of a few people and some families leads to the emergence of authoritarianism and dictatorship. As H.J. Laski rightly puts it “ A decision which affects all must be decided by all” To attain this reservation is provided to the SCs and STs and women at different levels of Government. It ensures social justice which is the foundation of socio-economic democracy.

6. Universal Education:
For the develop- ment of national universal education is of paramount importance. It enables the person to
understand his potentiality and strengthens dignity. As Gandhi said, “Education is the light of life”. It encourages people to develop the spirit of inquiry the ability to analyze the national problems and to work for national progress. Education also equips the people to shun fanaticism, parochialism, communalism, casteism and religious fundamentalism. The Right To Education Act 2009 implemented in 2010 is a step in this direction.

7. National Character:
Nationalism and patriotism are the foundations to build a national character. Each country has its distinct national character which denotes one’s nativity-as the conservatism of UK, ‘Land of Liberty’ of US, Ethnicity of Africa, Aboriginal of Australia, cultural diversity of India.

Love and respect for one’s country and national symbols such as national flag, national anthem, and national monuments are the prerequisites. One has to acquire knowledge about the history of his motherland and its contributions to human civilizations. Realizing the significance of national character, the makers of the Indian constitution have asserted the supremacy of popular sovereignty in the preamble reading with the expression.” We the people of India”.

8. Mass Media:
Mass Media is regarded as the Fourth Estate in democracy as it plays a vital role in the nation building. It highlights the omissions and commissions of the government and acts as a bridge between the government and the public. It is an effective instrument of political socialization. modernization and development. In India, the ‘Freedom of Expression’ is a fundamental right under Art. 19 of the Constitution.

9. Responsible Intelligentsia:
The contribution of intellectuals is recognized all over the world. Research and innovations in important areas of human life have contributed to national development.

In India the development in the field of social sciences, M.N. Srinivas, Amartya Sen, S.Shettar, Gail Omvedt, Kancha, Ilaya, Vandana Shiva, S.N. Balagangadhara, AshishNandy, Rajiv Malhotra and others. In Science and Technology Sir M. Vishveshwaraiah, Sir C.V. Raman, Dr. Raja Ramanna, Dr. M.G.K. Menon, Dr. CNR Rao. Dr. U.R. Rao, Dr. APJ Abdul Kalam, and others have greatly contributed for India’s present position at global level.

10. National Integration:
It is the process of uniting the people emotionally, psychologically and politically, Sardar Vallabha Bai Patel, Vinoba Bhave, Lai Bahadhur Shastri, J.B. Kriplani, Acharya Narendra Dev played a key role in the national integration. November 19th is being observed as National integration day, the birthday of Smt. Indira Gandhi.

Question 37.
Describe the democratic movements in Nepal.
Answer:
21^st century is known as the era of democratic movements. These movements in Afro-Asian nations started to overthrow despotic, autocratic and other authoritarian governments. Nepal was a small landlocked kingdom in Southern Asia lying between India to the south and Tibet to the north. Monarchy was prevalent in Nepal since 18^th centuries. During the rule of Birendra Bir Bikram Shah Dev, democratic Maoist movements started mainly because of the influence of India and China.

In 1980 limited democracy resulted in the creation of multi-party parliamentary monarchy. The political war was launched by the communist Party of Nepal (Maoist) in 1996, with the overthrow of the Nepalese monarchy and establishing a people’s Republic. Maoist insurgency began in 1996 ended with the Communist victory in 2001. The comprehensive Peace Accord was signed on 21 ^st November 2006. The Crown prince massacred king Birendra and the royal family.

Bringing the unpopular Gyanendra to the throne. Nepal witnessed a popular movement in 2006. The movement was aimed at restoring democracy. At the same time, the king reinstated old Nepal house of Representatives, with an assurance of permanent peace and the multi-party democracy. The king called upon the Seven Party Alliance (SPA) to bear the responsibility of taking the nation on the path of national unity and prosperity.

The popular Government assumed office on 18^th May 2006 and withdrawn all the privileges given to the king unanimously. The bill included-

1. Imposing tax on the royal family and its assets.
2. Ending the Raj Parishad, a Royal Advisory council.
3. Eliminating Royal references from army and Government titles.
4. Declaring Nepal a secular country, not the Hindu Kingdom.
5. Scrapping the national anthem until a new one is composed.
6. Eliminating the king’s position as the supreme commander of the army.

This is popularly Known as the “Nepalese Magna Carta”.

Question 38.
Discuss India’s role in the establishment of UN and its powers.
Answer:
Independent India viewed its membership of the United Nations a guarantee for maintaining international peace and security. UN membership has also served as an opportunity for leadership, in world affairs. India stood at the forefront during the UN’s tumultuous years of struggle against colonialism, apartheid, global disarmament and creation of more equitable international economic order.

India has used platform of the General Assembly for voicing against imperialism, colonialism and apartheid in 1954, India took a leading part in securing political sanctions against the racialist regime of South Africa, in 1965 it supported the UN sponsored economic boycott of Rhodesia. It gave full support to the Angolan liberation movement and to the cause of Independence of Namibia.

India also played and active role in setting up of the united nations conference on trade and development (UNCTAD) and calling for the creation of a New International economic order (NIEO). India is a member of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), International labour organisation (ILO), World Health Organisation (WHO), Food and Agricultural Organisation (FAO), United Nations International Development Organisation (UNIDO), etc.

V. Answer any two of the following questions in 15-20 sentences each: (2 × 5 = 10)

Question 39.
Write a note on Union Secretariat.
Answer:
1. The Central Secretariat:
The word secretariat means Office of the Secretaries. For the purpose of administration, the Government of India is divided into different Ministries and Departments which constitute the Central Secretariat. For efficient discharge of business allotted to a ministry, it is divided into various Departments, Wings, Divisions, Branches, and Sections.

2. Hierarchical order of Central Secretariat:

• Department(Secretary)
• Wing(Additional/Joint Secretary)
• Division(Deputy Secretary)
• Branch(Under Secretary)
• Section (Section Officer)

3. Department:
This is the primary unit of a ministry. It is pertinent to point out the difference between a ministry and a department. A single ministry may have several departments within a ministry, each is headed by the secretary. A Minister remains in power for a period of five years.

Generally, the Cabinet Secretary belongs to the permanent civil service and remains in office till he retires. It has been observed that the portfolios of ministers change frequently, particularly with every change of leadership or through occasional reshuffles in the council of ministry.

4. Wings:
Depending upon the volume of work in a ministry, one or more wings can be set up. An Additional Secretary or Joint Secretary is in charge of the Wing. He is given independent charge, subject to the overall responsibility of the Secretary.

5. Division:
A Wing of the Ministry is then divided into Divisions for the sake of efficient and expeditious disposal of business allotted to the ministry. Two branches ordinarily constitute a division which is normally under the charge of a Deputy Secretary.

6. Branch:
A Branch normally consists of two sections and is under the charge of an Under Secretary. He is also called as Branch Officer.

7. Section:
Headed by a Section Officer, a section consists of Assistants, Upper Division and Lower Division Clerks. The initial handling of cases, noting and drafting is carried on by these Assistants

OR

Write a note on Anti defection law.
Answer:
Defection is change of loyalty to another party, without resigning from his elected post for benefits. Defector gets elected on one party’s ticket and tries to enjoy power in another party. The word defection also called ‘Floor Crossing in UK and ‘Carpet Crossing’ in Nigeria. The term ‘Defection’ is used in India. Defection is commonly known as ‘House funding’. Defectors . are called ‘Fence-sitters’ or Turn Coats.

Sri Rajiv Gandhi, the then Prime Minister of India decided to remove the evils of defection. Hence, Anti defection Act came into force on 1^st April through the 52^nd Constitution Amendment. The main intention of the law was to combat “the evils of political defections”. The provisions are:

1. A member of Parliament or state legislature belonging to any political party shall be disqualified if he voluntarily quits his party.

2. He will be disqualified from his membership if he votes against his party whip in the session.

3. A member of Parliament or State Legislature belonging to any political party shall be disqualified from his membership if he votes in the session without prior permission of his party.

4. A nominated member shall be disqualified from his membership in the upper house, if he joins any political party after six months from the date on which he assumes his position.

5. If the 1/3^rd strength of any political party merges with another political party, it shall be considered as defection.

6. A person disqualified under this Act shall not be provided any office of profit.

7. The Anti-defection law determines the size of the council of Ministers. The size of the council of Ministers of Union shall exceed 15% of the total members of the Lok Sabha and similar to that of state legislative Assembly.

8. Speakers can initiate action against the members under Anti-defection law.

9. The Chairpersons of Legislative are permitted to frame the rules to implement this law.

Question 40.
Discuss the nature of Crony Capitalism.
Answer:
Crony capitalism is a negative term used to refer the business dealings carried out by the Government officers in a capitalist economy.
Nature of crony capitalism are as follows:-
1. Favours political authorities:
Crony capitalism is a system in which, close associates of the people in power who enact laws and execute policies, get favors that have a large economic impact.

2. Cronies are rewarded:
with the provision to charge higher prices for their output, than would prevail in a competitive market. Funds are funneled to the enterprises of cronies through government-controlled banks.

3. Protection of assets:
Crony capitalism allows Government to guarantee a subset of asset holders that their property rights are protected. As long as their assets are protected, these asset holders will continue to invest as if there were universal protection of property rights.

4. Share in the rents generated by the asset holders:
The members of the Government or members of their families, share the rents generated by the asset holders. This may take the form of jobs, co-investments or even transfers of stock. Crony capitalism goes & hand in hand with corruption.

5.The concentration of economic Power:
A few business groups are cronies, influence state policies and pool their assets in private corporate sectors. Such concentration gives birth to crony capitalism. Crony capitalism is an economic phenomenon with political consequences. In crony capitalism, the Government makes deals in closed doors, without public review and approval.

OR

Write a note on the relationship between India and America.
Answer:
India’s freedom movement had drawn much inspiration from the colonial history of US. President F.D. Roosevelt’s positive contribution to the 1942 Cripps Mission negotiation to help India proceed on the road to independence received a positive and grateful response from the Indian leaders. Pandit Nehru identified a number of positive factors that favored the growth of Indo US relations during his visits to US.

Because of this historical background and shared democratic values of both countries, they acquired a pattern of good and positive relationship. Both nations have a common faith in democratic institutions and way of life and are dedicated tot he cause of peace and freedom.

1. Economic Relations:
After Indian Independence, the US extended its economic aid under ‘Truman’s’ Four Point Program of 1950, consisting of American technical skills, knowledge and investment capital. It provided wheat loan to India to manage the famine in some parts of the country in 1951. The major aid has been in the shape of surplus commodity assistance provided under Public Law 480 (PL 480) in 1956, which was repayable in rupees.

Under the supervision of United States Agency for International Development (USAID), it gave the development loans. With these aids and support US topped the list of countries that gave economic aid to India. In recent years India decided to liberalize its economy and integrate it with the global economy.

India’s impressive economic growth rates have made the country an attractive economic partner for the US. In the past cold war era, both countries found themselves closer and committed to extending their economic co-operation in other fields. The Indian economy had close ties India’s total exports in the software sector and extended job opportunities to lakhs of Indians in its silicon valley.

2. Military Relations:
After the II World War US built many military alliances (NATO, ANZUS, SEATO, Bagdad Pact, and CENTO). As the leader of western bloc, it expects newly liberated countries which are not aligned with any of these military alliances, not to oppose US in any organization including UN.

India keeping away from the military alliances, its principled support tot he liberation movements and crusade against apartheid racism and racial discrimination were interpreted by US as unfriendly act. Obviously it led to a misunderstanding between India and US relations.

The US military support to Pakistan its military ally in 1954, created apprehensions in India regarding regional military balance and it widened the gap between India and Pakistan. When the liberation struggle was going on in Goa, the US supported Portuguese claims to keep Portugal as its ally in NATO, out victory of India was interpreted by US as ‘hypocrisy’ and ‘hallow moralist’

As its global strategy to curb the Communism, US respond positively with military assitance to India in 1962. Indo-China war. But it acted against India in Indo-Pak conflict in 1965 and Indo-Pak war on Bangladesh in 1971. The US has military bases in the Indian ocean in the Island called Diego Garcia, India opposed to these bases because these can threaten any of the states which are on the banks of the Indian Ocean.

Inspite of Indian protest, the US has not taken off the bases from the Island. By minimizing our misunderstandings and by better appreciaiton of each other, there is a need to work out a pattern of mutual benefit relationship with the US.

3. Socio-cultural Relations:
India and US have close socio-cultural relations, eg. Fort Foundation grants aid for scientific, technical, education, and cultural activities. There is co-operation in the field of cultural exchange scientific and educational interaction, a large number of people of Indian origin living in the US hold potential of a greater co-operation. Thousands of Indian scholars acquired their advanced knowledge from the educational institutions of the US.