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BPSC 70th ICCE Main Exam - FAO Post - Economics Optional Paper
Student's Copy
Serial No.
02/GO/CC/M-2025 - 44
ECONOMICS 3400054
Time : 3 Hours ] [ Full Marks : 300
Section -I
~-I
1. Answer the following questions : (10x5=50)
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(a) Explain the concept of Marginal Rate of Substitution (MRS) with the help of an
example. What happens to MRS when consumer moves downward along the
indifference curve ?
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(b) What do you understand by external economies and external diseconomies ?
Discuss the factors which account for increasing returns to scale.
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(c) Explain how income method is different from the value-added method in
measurement of National Income ? Discuss the problem of double counting in
measuring National Income.
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(d) How does the balance of payments differ from the balance of trade ? Why must
a country's balance of payment always be balanced in theory ?
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(e) How effectively are commercial banks of Bihar supporting entrepreneurship and
start-ups in the state ? What suggestions would you like to give in this regard ?
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02/GO/CC/M-2025 - 44 ( Tum Over)
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mm2. " From the point of view of economic policy decisions, the phenomenon of liquidity
trap warns us that the power of monetary authority to reduce the rate of interest and
through it to raise the level of investment, income and employment in the economy
is severely limited." Explain this statement fully with the help of diagrams. 50
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Discuss the meaning and main objectives of monetary policy. Explain the working
and effectiveness of main instruments of monetary policy with respect to influencing
the cost and availability of credit in a developing economy.
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3. Distinguish between the principles of equi-absolute sacrifice, equi-proportional
sacrifice and equi-marginal sacrifice in taxation. Which principle would cause least
aggregate sacrifice in taxation ? Use diagram and equations in order to explain
your answer. 50
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Under what conditions will free international trade in commodities tends to equalize
factor prices in the two trading countries ? Explain.
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02/GO/CC/M-2025 - 44 (2) ( Continued)
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Section- II
~-II
4. Answer the following questions : (10x5=50)
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(a) What do you understand by Multi-dimensional Poverty Index (MPI) ? How is it
calculated? What are the advantages of the MPI poverty measure over income
poverty measure ?
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(b) What are the factors causing regional disparities in India ? What steps have
been taken to reduce these regional disparities ?
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(c) How are Micro, Small and Medium Enterprises (MSMEs) classified ? How do
MSMEs contribute to the economy ? What are the challenges that hinder their
potential?
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(d) What are the primary objectives of fiscal policy ? Discuss Fiscal Responsibility
and Budget Management Act, 2003.
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(e) What are the challenges faced by agricultural sector in Bihar? What has been the
impact of policies on productivity and farmers' income in Bihar ? Comment.
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02/GO/CC/M-2025 - 44 ( 3) ( Turn Over)
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5. What do you mean by agricultural diversification ? Explain the importance of
agricultural diversification for sustainable and inclusive development of Indian
economy. 50
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What is renewable energy? For Vikasit Bharat 2047 explain the role of renewable
energy.
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6. Write a critical note on tax reforms in India after 1991. 50
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Discuss the significant issues, programmes and policies of the government related
to poverty eradication and employment generation in the Bihar economy.
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02/GO/CC/M-2025 - 44 (4)
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