[Answerkey] CSAT 2013 GS: Economy: Questions solved with explanation, reference, all four sets (A,B,C,D)

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Mrunal's Win22 Series for Economy Updates for UPSC Prelims & Mains 2022
  1. Prologue
  2. Banking Related
  3. Foreign Trade Related
  4. Inflation
  5. GDP and allied topics

Prologue

  • Out of 100 GS questions in UPSC CSAT 2013, there were 18 questions from Economy.
  • All questions from Static portion, Not even one Economy related question from current affairs.
  • But don’t think that your majoori (labour) has gone in vain. Whatever you prepared for Economy current affairs –that will definitely help you directly/indirectly in Mains, Essay and interview (or atleast let’s hope so again hahaha.)
  • Thankfully no question on trivial dates and numbers of Economy (bad news for the next year sales of those special issues/editions on Economy).

Almost all of these questions can be solved by reading following:

  1. NCERT Textbooks on Economics
  2. NIOS PDF set on Economics
  3. Indian Economy by Ramesh Singh (McGraw Hill Education)
  4. Finance Chapter from India 2013 (Yearbook).
  5. And of course the Main Villain: Mrunal.org/economy

Within Economy topic, the internal breakup looks like this:

Banking 7
Foreign trade 3
Inflation 3
GDP, Development and allied topics 5
Total 18

chart-csat2013-economy

Banking Related

bank rate

1. An increase in the Bank Rate generally indicates that the

  1. market rate of interest is likely to fall
  2. Central Bank is no longer making loans to commercial banks
  3. Central Bank is following an easy money policy
  4. Central Bank is following a tight money policy

Bank Rate=RBI lends money to its clients for long term loans @this interest rate.

Tight monetary policy= when RBI raises the rates to decrease liquidity.

Answer choice Comment
  1. market rate of interest is likely to fall
Not possible. because if RBI lends money to its clients @higher rate, they won’t reduce their loan interest rates, because it’ll reduce their profit margin.
  1. Central Bank is no longer making loans to commercial banks
Ridiculous.
  1. Central Bank is following an easy money policy
Reverse is happening.
  1. Central Bank is following a tight money policy
This is the answer.

RBI’s regulatory powers

2. The Reserve Bank of India regulates the commercial banks in matters of

  1. liquidity of assets
  2. branch expansion
  3. merger of banks
  4. winding-up of banks

Select the correct answer using the codes given below.

  1. 1 and 4 only
  2. 2, 3 and 4 only
  3. 1, 2 and 3 only
  4. 1, 2, 3 and 4

RBI regulates Liquidity of Assets via SLR hence B is false, because it doesn’t have (1)

If existing bank requires RBI permission. Hence (A) is false because it doesn’t have (2).

Amalgamation /Merger of two bank require RBI’s approval. Thus final answer is D.

credit to villagers

3. Which of the following grants/ grant direct credit assistance to rural households?

  1. Regional Rural Banks
  2. National Bank for Agriculture and Rural Development
  3. Land Development Banks

Select the correct answer using the codes given below:

  1. 1 and 2 only
  2. 2 only
  3. 1 and 3 only
  4. 1, 2 and 3

NABARD doesn’t give “direct” credit assistance. It provides credit via intermediaries such as Microfinance companies, cooperative society, RRB. Therefore, 2 is false. Any answer choice that contains 2 is false. And thus we’re left with C only 1 and 3.

liquid assets

4. Consider the following liquid assets:

  1. Demand deposits with the banks
  2. Time deposits with the banks
  3. Savings deposits with the banks
  4. Currency

The correct sequence of these decreasing order of Liquidity is

  1. 1-4-3-2
  2. 4-3-2-1
  3. 2-3-1-4
  4. 4-1-3-2
  • Currency (#4) is most liquid, because you can use it as and when you want.
  • Time deposit with bank (#1) (e.g. fixed deposit), are least liquid compared to savings/demand deposit with banks and currency(#4).
  • That means decreasing order of liquidity will be 4-*-*-1.
  • and Demand deposit with bank >more liquid> savings deposit
  • final order is 4-1-3-2 Answer choice D

OMO

  1. In the context of Indian economy, Open Market Operations refers to
  1. borrowing by scheduled banks from the RBI
  2. lending by commercial banks to industry and trade
  3. purchase and sale of government securities by the RBI
  4. None of the above

Recall the Liquidity adjustment facility article: Click me

Open market operation= when RBI buys/sells securities in open market…. in case of OMO, first party permanently sells the Government security to second party. Second party is free to do whatever it wants with that security.

Hence Answer C

Another source: NCERT Macroeconomics class 12, page 44

Open market operations: RBI purchases or sells government securities to general public…

PSL

6. Priority Sector Lending by banks in India constitutes the lending to

  1. agriculture
  2. micro and small enterprises
  3. weaker sections
  4. All of the above

Answer is (D) all of above. For more, refer

money supply

7. Supply of money remaining the same when there is an increase in demand for money, there will be

  1. a fall in the level of prices
  2. an increase in the rate of interest
  3. a decrease in the rate of interest
  4. an increase in the level of income and employment

If supply of onion is same, but junta demands more onion, what will vegetable-seller do? Increase price to get more profit. When same thing happens with money, the banks/lenders will do the same by increasing interest rates.

Answer is (B).

Foreign Trade Related

BoP

1. The balance of payments of a country is a systematic record of

  1. all import and export transactions of a country during a given period of time, normally a year
  2. goods exported from a country during a year
  3. economic transaction between the government of one country to another
  4. capital movements from one country to another

Question contains problematic wording. Consider this:

Balance of Payment (BoP) As per definition in ch.6, NCERT Macroeconomics, class 12.

  • Balance of payment records the transaction in goods, service and assets between ‘residents’ (and not governments) of one country with the rest of world.

This makes option C is wrong.

Balance of trade (BoT) It is the balance of exports and imports. So option (A) is actually talking about BoT and not BoP.BoP is a more than just import and export transactions because it includes Current account (inside that balance of trade, gifts, remittance, dividend etc.) + Capital account (FDI, FII, ECB etc.)

economy-Bot-vs-Bop

  • B and D are irrelevant.
  • anyways in the given the mess, I pick A as the answer.

Update Jun-26-2014: UPSC uploaded official answerkey. Correct answer is: A.

Components of Capital Account

2. Which of the following constitute Capital Account?

  1. Foreign Loans
  2. Foreign Direct Investment
  3. Private Remittances
  4. Portfolio Investment

Select the correct answer using the codes given below.

  1. 1, 2 and 3
  2. 1, 2 and 4
  3. 2, 3 and 4
  4. 1, 3 and 4

Recall article on 6th Chapter of Economic Survey Click me

or just observe the chart given under previous question.

Remittances (item#3) fall under Current Account. Therefore any answer choice that includes #3, is wrong. Eliminate them.

  1. 1, 2 and 3
  2. 1, 2 and 4
  3. 2, 3 and 4
  4. 1, 3 and 4

Thus we’re left with answer (B)

Components of Forex Reserve

3. Which one of the following groups of items is included in India’s foreign-exchange reserves?

  1. Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries
  2. Foreign-currency assets, gold holdings of the RBI and SDRs
  3. Foreign-currency assets, loans from the World Bank and SDRs
  4. Foreign-currency assets, gold holdings of the RBI and loans from the World Bank

Recall article on ch6 of Economic survey

Click me

India’s foreign exchange reserves is made up of

  1. Foreign currency assets (FCA) (US dollar, euro, pound sterling, Canadian dollar, Australian dollar and Japanese yen etc.)
  2. gold
  3. special drawing rights (SDRs) of IMF
  4. Reserve tranche position (RTP) in the International Monetary Fund (IMF)

Hence the closest answer choice is (B): Foreign-currency assets, gold holdings of the RBI and SDRs

Other answer choices talk about loans from foreign countries/World bank: while those have some relevance in current/capital account classification type MCQs, but in case of forex reserve they’re irrelevant.

Another reference for this answer: India 2013 (Yearbook) Page 334, last two lines.

Inflation

benefit to debtors

1. Consider the following statements:

  1. Inflation benefits the debtors.
  2. Inflation benefits the bond-holders.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Refer page 7.8 in Indian Economy by Ramesh Singh, topic title “Effects of Inflation”–> I. On Creditors and Debtors.

  • Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation.
  • Bond holders= this person has lend money (to debtor) and received bond in return. So he is lender, he suffers.
  • Therefore Answer choice is (A) 1 only (Debtor benefits from inflation).

by the way, they haven’t specifically used the word “inflation indexed bonds”, hence we cannot say Inflation benefits the bond-holders.

inflation cause

2. A rise in general level of prices may be caused by

  1. an increase in the money supply
  2. a decrease in the aggregate level of output
  3. an increase in the effective demand

Select the correct answer using the codes given below.

  1. 1 only
  2. 1 and 2 only
  3. 2 and 3 only
  4. 1, 2 and 3

All three lead to inflation. Answer (D)

inflation cause

3. Which one of the following is likely to be the most inflationary in its effect?

  1. Repayment of public debt
  2. Borrowing from the public to finance a budget deficit
  3. Borrowing from banks to finance a budget deficit
  4. Creating new money to finance a budget deficit

Printing/creating new money to finance a budget deficit will be the most inflationary effect. Because it increases money supply without any increase in production of goods and services. Recall the Israel Palestine article (click me): How Germany suffered Hyperinflation when government started printing money just to pay war reparation costs under Treaty of Versailles. Check this photo: A German woman burns currency, because its paper was cheaper fuel than coal!

hyperinflation

and @Public Administration players, recall the great Laxmikanth and his chapter on Financial administration:

Currency expansion: Under this method, government prints more currency to repay debts. This results in inflation and destroys the fixed value of money claims. This method was used by Germany after First World War.

GDP and allied topics

National income, meaning of

1. The national income of a country for a given period is equal to the

  1. total value of goods and services produced by the nationals
  2. sum of total consumption and investment expenditure
  3. sum of personal income of all individuals
  4. money value of final goods and services produced

Observe the glossary given on page 100 and 101 in NCERT Macroeconomics class 12.
National income= NNP @Market price MINUS indirect tax PLUS subsidies.
then what is NNP @Market price? (NNP_MP)

NNP_MP=GNP-Depreciation.

then what is GNP?

GNP=GDP + Net factor income from abroad. In other words, GNP includes the aggregate income made by all citizens of the country, whereas GDP includes incomes by foreigners within the domestic economy and excludes the incomes earned by the citizens in foreign economy.

Thus answer is (A).

Another source: As per NIOS Economy Chapter 12, topic #12.3

National income of a country is defined as the sum of total factor incomes accruing to the residents of that country from the production activity performed by them both within and outside the economic territory in a year.

Hence the closest answer among the given = (A).
Update Jun-26-2014: UPSC uploaded official answerkey. Correct answer is: D. money value of final goods and services produced.

disguised unemployment, meaning of

2. Disguised unemployment generally means

  1. large number of people remain unemployed
  2. alternative employment is not available
  3. marginal productivity of labour is zero
  4. productivity of workers is low

Suppose three people work in farm, produce 200kg wheat. If one of them is removed, still farm produces 200kg wheat. That is disguised unemployment. Marginal productivity is zero. Hence Answer C.
Another example of disguised unemployment is ministers in Mohan’s cabinet. Whether you keep or remove Pawan and Ashwini, the efficiency of government doesn’t change.
economy disguised unemployment in UPA

Economic growth, factors responsible

3. Economic growth in country X will necessarily have to occur if

  1. there is technical progress in the world economy
  2. there is population growth in X
  3. there is capital formation in X
  4. the volume of trade grows in the world economy

NIOS Economy, Ch 36, bullet point 29.3:

Internally capital formation takes place when a country does not spend all its current income and consumption, but saves a part of it and uses it for investment for increasing further production. This act of saving and investment is described as capital accumulation or capital formation.
Therefore, answer is (C)

B is wrong because
NIOS Economy, Ch 38 population and economic development,

  • The high growth rate of population adversely affects capital formation in the developing economies. More resources are used for meeting the fast increasing consumption needs. This leaves less resources for increasing productivity capacity of the economy. This adversely affects the future growth rate of these economies.
  • The developing countries already have a large labour force, which remains underutilised due to lack of capital. The fast increasing population makes the task of absorbing the labour force in productivity activities all the more difficult. So the large increasing population is more of a liability than an asset in these economies.

A and D are wrong because
The positive developments happening in World economy (choice A and D) won’t help economic growth in the given country, if it is a closed economy.
Final answer (C)

Deficit Financing purpose

4. In India, deficit financing is used for raising resources for

  1. economic development
  2. redemption of public debt
  3. adjusting the balance of payments
  4. reducing the foreign debt

as per page 273, Development and Environmental Economics by Ne Thi Somashekar

Deficit financing is a pragmatic tool of economic development and has been used by Indian government to obtain necessary resources to finance the five year plans.

Answer (A)

Demographic Dividend

5. To obtain full benefits of demographic dividend, what should India do?

  1. Promoting skill development
  2. Introducing more social security schemes
  3. Reducing infant mortality rate
  4. Privatization of higher education

To rip maximum demographic dividend, India has to promote skill development. This is what Economic Survey and 12th FYP have been advocating. Ans (A)

Answerkeys for remaining topics, coming soon. + thanks Mr. Palas Nuwal and Mr.Shiva Ram for providing inputs.

Indian History Freedom Struggle Pratik Nayak

332 Comments on “[Answerkey] CSAT 2013 GS: Economy: Questions solved with explanation, reference, all four sets (A,B,C,D)”

  1. @Murali

    time deposits are the least liquid assets. So, the correct order is 4-1-3-2

    ……………………………………………………………………………….
    cut off for GENERAL will hover around 188 to 196 this time
    for OBC will be 163-169
    for SC it will be 155-160
    for ST it will be 150-155

  2. @Mrunal bhai- Thanks a lot for supporting and nurturing the SAPNA of civil services in me. My pre- exam was wonderful and credit goes to you , BUT NOW…..i am not prepared for mains , my subject(sociology) is also not prepared..I have to start from scratch and i am working , the syllabus is like PACIFIC OCEAN and i don’t know the depth also .(may be many Mariana trench are there). Syllabus is scattered like island in the sea of books and IGNOU material.. now What to do?????

    People use to say following thing are needed to be done

    1.Note preparation .(when locating syllabus is such herculean task ,then preparing note ? how to think of that )
    2.answer writing practice (@Mrunal bhai: how to know that my answer is right or wrong )
    3.New paper article tracking and keeping note of that too.(huuh !)
    4.This Four paper of G.S

    Mrunal bhai , can i continue all these with my 9.5 hr Job ,is it practically possible ? but i know one thing that i can’t leave my job(that’s other mater if they fire me).

    i am following your TIPs of “Study in minute”. but i think it is not enough now…

    plz suggest some thing.

    1. Crazy guy! Dont you already know the answer to your questions? Why disturb Mrunal bhai for such silly things!!! Just take a sabbatical and prepare whole heartedly for Mains. Ab yeh mat kehna ki job se break nahin le sakta!!! With your prep level, you need atleast 10-12 hours atleast per day.. if you can manage this with job, then fine…

      Sociology to ho jayegi… GS is a monster!!!!!

      1. there is always a best way to do the things. @baldev i think that you have left your prep. and picked up the job of full time commentary ( khi khi khi). I have solution , i know how to do it, i will do it, OK ! .but dear , MRUNAL bhai always comes with very amazing solution to any problem , Like he is DOCTOR and until and unless you to tell the full problem to doctor he will be not able to cure you. Not only me many of comrades are struggling with this question only

        so be don’t be bully always(as i have seen your earlier comment) be little bit sensitive & ALL the best to you dear.

        1. Dear, sorry if you felt being bulldozed by me. Just that i felt that it is a very naive question at this juncture…You should have asked this question a year back or atleast 6 months before prelims…Anyways, it is never too late…

          Hope you come out with flying colours.. All the best to you too :)

          1. @baldev
            Where did you get at this “at-least” 10-12 hours per day.
            Quality of study is more important than quantity.
            Let Mohit ask the question to Mrunal Sir ,Why are u bothering others unnecessary.Has he asked for ur wise opinion? U do ur own work but if ur work is troubling others without any reason then keep doing it.But u r wasting ur own time.

  3. PAPER 1- 85 + paper 2- 120 total=205 :(….1st attempt GM category..i know der is no possibility of clearing prelims with these marks considering the comparatively ‘easy’ nature of question paper. feeling low..:( somebody plz tell what should i do? continue my prep or call it a quit…?

    1. @Motivation :- dear let us suppose that cutoff will be 210., and you have scored 205 , 210-205= 05 =2 question.
      Only two question dear. you are so close. look, just start mild prep. for mains and continue it till November – December. it will have two benefit

      1. you will enhance your knowledge and wisdom and it will keep you in active mode
      2. Mains syllabus is not going to change in 2014. so if you prep for mains now, your prep level will be good for next time.. :)

      HOW TO DO IT?
      1. make group of like minded people,plz avoid SAD SOULs and POMPOUS SOUL ,be on ground reality ,observe your self and observe reality.

      2. start preparing your notes and add on that notes with various other source(fronline,outook,OP-ED of hindu and indian express)

      3.use AIR FM GOLD , Hindu and try to make opinion whenever you read a article in THEHINDU and comment on it(what ever,don’t worry about quality of your writing it will gradually improve.)
      4.Consider your self as administrator and try to think and behave in that way only.

      COMRADE , follow the strategy of STRUGGLE TRUCE STRUGGLE as it is a long journey of 2-3 years (for average guy ,with average luck).maintain your clam and be +ve always.

  4. hi Mrunal sir,
    am udayakumar. took prelims this time ( Ist attempt)
    i know i wont get select because my preparation was not organised.
    but i came to know about ur blog recently during march month.
    i dont know economics or like economics
    but because of you and your knowledge, i got 15 of 18 correct.
    what would be happy than this for me.

    thanks for the support.
    i read upto only ch 6 of ESurvey, now i am reading the remainings. i getting lured to you.

    long live man.

    1. nice ! keep it up…. there is always 1st time . there is always next time , so if not this time then next time….

      you have very +ve attitude , you will definitely do it man. :)

  5. Does anyone have economics as their optional? Could you please share your strategy..which book are u referring for micro? I have done eco.hons n I’m more comfortable with varian…i just need a second opinion since this is my first attempt

    1. Hello Tanya,

      I have economics optional. I am referring to Varian for Micro. Henderson and Quandt would also be helpful.

      All the best,

      Leena

    1. go for rankers, i took from vajiram and i tell u they dont explain half of the syllabus and will just give u print outs, total waste of money. go to vajiram only if u have strong background in commerce. Moreover hardly practice questions are given in the class….all the time notes dictation.

  6. the greatest problem with ppl who predict. high cut off is tat they go to coaching centers all of indians who take this exams dnt have deep pockets to join a center.at the v start wen I just completed my college (2012) passout I checked sites of these teaching institutions who ask from 40k to 70k even a lakh. I ran away. for a guy like me who had to take loan even for my degree this was too much.there are ppl outside coaching centers and mind u they form the majority. there are ppl who join coaching thinking u join u pass attitude. so lets not speculate on cut offs more importantly on opinion from coaching center students. which in my opinion is silly.I did my own studies completely am around 220+(obc) thou disappointed. I did my best.my plan was target 60% and I did get it.so just c if u reached ur target and start preparation folks.civil servants cant be ppl who believe in rumours.remember a civil servant represents STEEL FRAME OF INDIA for heavensake lets SHOW SOME STEEL

  7. So well friends, i hv been seeing this cut off talks and blah blah
    ok let me tell you something “An EXAM like GSI can never be tagged as easy or difficult” reason you may be knowing economics and may be polity or even history but you may not know every aspect of EnB or you may know about EnB but wud lack in even simplest of questions, you see the pressure situation in exam gets us to do many a times silly mistakes which we cant even think know but trust me frnds it must have happened with many like even after knowing an answer had ticked mark some other ,some questions in economy were simple but myself applied logic in every question and it became over logical thus my came out to be wrong
    and how the hell just the day passed from morning to evening on sunday and people started giving analysis about how this exam was even before getting the answers verified
    i am so sure many wud have thot so as well but in these aftermath your thinking is now been changed reason u analysed every thing u did verify from multiple sources and come to a conclusion that u have made mistakes rather silly mistakes chanting here about studies is one thing but solving it in examination hour is completly different and this wud happens and wud happen even in mains as well,may we all succeed to that.
    Ok now since everyone has given talks of cut offs then let me tell you something i completely agree wid d person someone who talked abt CUT OFF FACTORS: attendance,vacancies,level of examz
    so here let me inform you
    this years exam has seen too poor attendance 50-55% that u also know, and vacancies have slightly increased ,i m just saying the facts
    now the difficulty level of exams: so hell is everyone talking abt GSI but i think u need to know abt an xam GSII which is primarily important no online site or big names of institutions other than giving answers keys for GS II talked abt deep analysis and outcomes, i wud remind u that cut off is made up of both these not just of 1 exam, and since many say GS 1 was easy but there were many for whom
    GS II was equally tough, in respect of time as u know in apti u need to be hard fast which is not a tendancy of every student.
    I am amazed many many many ppl saying they did 85-90-95/100 and 75-79/80 qstions in both exams respectively but ask them HOW ?they will say RANDOM.
    ok lets say both xams were easy as a cakewalk even a X class adolescent can do so everyone shud…. BUT even after that u cant say that cut off will go INA MINA DIKA etc. there are few questions whose answers wont be find as right ,that only teachers wud know and we get sum shocks after seeing official answerkey, Did anyone thot abt 2011 cut off 198? everyone assumed some or other equation and last year since exam was milky many experts gave opionon of merit being 220 or 230 and this time i m seeing 250 :D :D
    as mrunal said last year, since India won WC 2011 by 6 wickets wud it mean any oder team wud win the next WC by 6±1 wickets? cant it win by Runs or cant it be a draw?
    so cut off talks are rather useless if u believe in god then can ask for his help as u did watever u cud now its matter of destiny which is not in our hands

    1. Wonderful honey…but one simple doubt..”An EXAM like GSI ” what exam is this GSI??? Geological Survey of India???

      1. it is “GENERAL STUDIES PAPER ONE”. bhai @deejay- are you joking or you really don’t know ? if you answer is later question is yes , then LOLZ . puri ramayan khatam ho gayi at last -sita kyoun thi ???

  8. HELP MRUNAL!!!

    The Reserve Bank of India regulates the commercial banks in matters of

    liquidity of assets
    branch expansion
    merger of banks
    winding-up of banks
    ans 1,2,3,4 Amalgamation /Merger of two bank require RBI’s approval. Thus final answer is D

    but mrunal in banking regulation bill u hav mentioned that merger of bank is regulated by CCI(competition commisiion of India)
    please help me out friends!!! totally confused

      1. Banking Mergers and acquisition fall under purview of CCI which is concurrent with RBIs jurisdiction and not CCIs or RBIs exclusive jurisdiction.
        That was the issue which was explained in the article as—copy pasting from there,read it carefully:
        “Chindu: Friends, I also propose that only RBI’s permission should be necessary for Bank mergers and acquisitions. Competition Commission of India should not play any role in it.
        Opposition: Not acceptable. Again this is new provision added after Standing Committee gave its report. So, send the bill back to Standing Committee.
        Chindu: No, no, no. if bill goes back to standing Committee, then it’ll delay the implementation.Ok I back off, I remove this provision.CCI will have the power to investigate and clear mergers and acquisitions in the banking sector.”
        ==> concurrent powers of cci n rbi

  9. A big thanks to you Sir……..I did not read any other book or any source other than your posts….I did awesome in economy…..was feeling like bring it on UPSC

  10. Regarding Q#7 supply of money remaining the same when there is an increase in demand for money, there shall be currency appreciation. Hence same amount of currency will buy more commodities, so I guess answer will be fall in price levels. Please clarify.

    1. More money leads to price increase.

      Eg : If I have more money i can pay better rent and buy better food. Even other person can do the same.
      For competition my land lord increase my rent, same with the company which provides us food and commodity.
      Hence price keeps on increasing rather than decreasing.

      1. money supply is not more ,only demand is more . which means the value of money has increased or in other words you can buy more goods from the same amount of money (as people do not want to part with their money )which again means the value of goods has decreased.

        1. bhai you are assuming that demand for money translates to demand for goods(may be it is correct but I am not sure). For the other option, if demand for money increases this means people want more cash in their hand. Now from simple law of economics we know that as demand increases prices go up. In this case price to pay is interest rate which shall go up.

          1. @ abhishek Yes you are correct but that is one of the effect. If the supply of money is constant and demand has increased no one wud want to part from his /her money easily including banks hence there will be an overall decrease in level of prices of good and increase in “price” of money (which is bank rate). All i m saying is increase in bank rate is a special case .

  11. @ILS4IAS,
    Usually the cut off for SC are always higher than ST category. Do you think the cut off for ST will be higher than SC category this year (2013)

    1. haha…dude how can u expect anybody to answer this…???…most probably SC cut off wud be higher than ST’s…

  12. Hi Mrunal sir,

    I am in a great fix regarding coaching class for Public Admin & GS for mains in Delhi.

    Plz help,,,,, Thanks in advance…

  13. sir,
    from last few days i was busy calculating my marks from various answer keys…including bajira,rau’s etc…
    Finally,taking few doubful answers on negative side…i m scoring around 213-216…
    Here what appears in delhi..either guys are boasting to much or coaching institues are confused…they are
    guessing a cot-off of aound 225..which i seriously doubt…….kindly give ur valuable inputs in this regard……

  14. Thanks for your suggestion Leena :) ..Varian is awesome for basic conceptual clarity…will check out Henderson and Quandt.

    Best Regards
    Tanya

    1. because it include both national and foreign income so answer A is only national income where as answer D is both national and foreign…

    2. Please 1st go through the meaning of ‘Nationals’ as per Tax & Economics then you will get why answer A is correct. Option D is very general in nature & need many assumption (Like you took the assumption of both national & foreign) so it can’t be the correct option.

  15. frnds
    what about contour bunding???
    gktoday.in answer is b but may be answer d???
    any say abt dat or any reference page??

  16. also ques regarding balance of payment. i think answer ll be economic transaction wala… what say frnds…????

    1. yeah i wrote “C” as my answer,,,,,,but all answer keys are mentioning “A”…

      i used mah mind like JASOOS VIJAY and darkened the C option ,,,,but all my hopes were vanished by the answer keys,,,,

    1. mrunal sir ka blog padhte ho aur cutoff ki baat karte ho..what an irony!!!
      better start preparing for mains,nai hota pre to agle saal kaam aa jayga

      1. wah bhai wah….Agree. MRUNAL BHAI KA BLOG PADTE HO AUR CUTOFF KI BATEIN KARTE HO , fan ho gaya tera mai bhai. wah!! bahut khub…

      1. @ Prince >> Its not just wiki reference. Keynes definition of national income is the same and doesn’t matter if you see in wiki or in some other source. Option A has the word “nationals” in that. The moment you restrict it to nationals you are gone. Option D is the correct answer.

        What Mrunal sir says is this “GNP=GDP + Net factor income from abroad. In other words, GNP includes the aggregate income made by all citizens of the country, whereas GDP includes incomes by foreigners within the domestic economy and excludes the incomes earned by the citizens in foreign economy”.

        GNP is GDP + Net factor income. GDP includes incomes by foreignors. So how come you can restrict national income to nationals alone. Above all, when Keynes says something it has to be taken into account. I get a feeling that this question is directly picked from Keynesian economics definition

        1. I have gone through all major economic concepts while studying economics till master level & found Various concept & various definition has been given by different economist regarding the same term but the definition which describes the term best accepted by the world. Same goes with this question……

          Same goes with Balance of payment question…..again there are various definitions by different economist & on that basis 3 options seems correct but the universal accepted answer is option A.

          So don’t just do the googling & pick the answer which 1st comes to you.

          Hope I cleared few doubts..

  17. hmmmm ur right prince but it is only a definition given by Keyenes… and i think definition given by such an emminent economist is always correct written anywhere.. as nobody can edit that definition :-)

    1. If you go through the deep analysis regarding National Income then option 1 is correct. Even if you go through Keyenes’s full concept regarding the National Income then you will find option 1 is correct. Keyenes this definition is only a part of his analysis.
      The word ‘Nationals (here denotes Indian people stay in India & abroad)’ makes 1st option correct.

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