IES INDIAN ECONOMIC SERVICE 2022 QUESTION PAPER 1 2 3 4 WITH COMPLETE SOLUTION

IES GENERAL ECONOMICS PAPER 1-2022 GENERAL ECONOMICS PAPER 1 Time Allowed: Three Hours Maximum Marks: 200 Question Paper Specific Instructions Please read each of the following instructions carefully before attempting questions:

There are THIRTEEN questions divided under THREE sections.

The ONLY question in Section A is compulsory.

In Section B FIVE out of SEVEN questions are to he attempted

In Section C, THREE out of FIVE questions are to be attempted.

Candidates should attempt questions/parts as per the instructions given in the sections.

The number of marks carried by a question/part is indicated against it.

Candidates are required to write clear, legible and concise answers.

Attempts of questions shall be counted in sequential order. Unless struck off, attempt of question shall be counted even if attempted partly.

Any page or portion of the page left blank in the Question-cum-Answer (QCA) Booklet must be clearly struck off.

Answers must be written in ENGLISH only.

SECTION A (Compulsory Section)

Q1. Answer all the following seven parts. 5×7=35 (a)Show that the ordinary demand curve will have a greater demand elasticity than the compensated demand curve. 5 (b)Discuss the Lerner Index of monopoly power. 5 (c)Illustrate graphically the effects of advertising on price and output in monopolistic competition. 5 (d)Distinguish between Partial Equilibrium and General Equilibrium Approaches. 5 (e)"The social optimal output occurs where Marginal Social Benefits (MSBS) equal Marginal Social Costs (MSCs)." Examine the statement. 5 (f) Solve the following 2*2 game :

B1 B2 A1 2 3 A2 4 -1 Player A

Player B

(g) Show that TSS = ESS + RSS.

SECTION B Answer any five out of the following seven questions: 18×5=90 Q2.Consider the 2-variable linear regression model: Yi = α + βX i; + Ui , i= 1, 2,….., n, where notations have their usual meanings. (a)Estimate the parameters α and β by the OLS method. Also estimate standard errors of these estimates. 10 (b)Describe the testing procedure of B and estimate the 95% confidence interval of B. 08 Q3. (a) Define Indirect Utility Function. Derive the Indirect Utility Function from the Direct Utility Function. 06 (b)Consider the Indirect Utility Function: V = M² 4P1P2 where notations have their usual meanings. Derive the demand functions for x₁ and x2. 06 (c)Consider the utility function and budget equation of a consumer respectively: U = x1x2, M = p1 x1 + p2 x2, where notations have their usual meanings. Derive the expenditure function of the consumer. 06 Q4. (a) Show that a monopolists produces output in the elastic range of demand. 08 Q6. Consider an economy consisting of two consumers, one producer, one ordinary good, one public good and one primary factor. Show that Pareto optimality conditions are not valid for the public good. 18 Q7. (a)Explain the concept of stability and its different types. 6 (b)Explain the stability conditions in a single market both in the Walrasian process and Marshallian process. 12 Q9. (a)Consider the first-order autoregressive scheme in the general regression model. How would you estimate the variance, covariance and autocorrelation coefficient of the disturbance term of the model? 9 (b)Describe the Durbin-Watson (DW) test of autocorrelation. 7 (c)Given a sample of 50 observations and 4 explanatory variables, what can you say about autocorrelation if the computed Durbin-Watson (DW) values are: (i) 1-05, (ii) 2.50 and (iii) 3-97? [DWL= 1·378, DWU = 1.721 at 5% level of significance, n = 50, k = 4] 9

Q10. (a)Graphically explain the Lorenz curve as a measure of income inequality. 5 (b)How would you derive the Gini coefficient from the Lorenz curve ? 10 (c)How would you derive the Gini coefficient from the Pareto law of income distribution ? 10 Q11. (a)"It is not possible to construct social preferences from individual preferences without violating one or more of the five axioms." Examine the statement given by Arrow. 12 (b)Consider the economy with two goods and fixed factor supplies. Assume that the social welfare function defined in commodity space : w = (x₁ + 2) x2 and that society's implicit production function x₁ -2x2 - 1 = 0. 6 (c) Explain ‘Compensation Principle’ and ‘Test Criteria’ formulated by Hicks-Scitovsky. 7

IES GENERAL ECONOMICS PAPER 2-2022 GENERAL ECONOMICS Paper - II Time Allowed: Three Hours Maximum Marks: 200 Question Paper Specific Instructions Please read each of the following instructions carefully before attempting questions: There are SIXTEEN questions divided under THREE sections. The ONLY question in Section A is compulsory. In Section B, SIX out of NINE questions are to be attempted. In Section C, FOUR out of SIX questions are to be attempted. Candidates should attempt questions/parts as per the instructions given in the sections. The number of marks carried by a question/part is indicated against it. Candidates are required to write clear, legible and concise answers and to adhere to word limits, wherever indicated. Failure to adhere to word limite may be penalized. Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a question shall be counted even if attempted partly. Any page or portion of the page left blank in the Question-cum-Answer (QCA) Booklet must be clearly struck off. Answers must be written in ENGLISH only. SECTION A (Compulsory Section) Q1. Answer the following questions in about 100 words each: 5×6=30 (a) What is the real cash balance effect? 5 (b) Which policy will be effective if the IS Curve is vertical? 5 (c) Illustrate, with a suitable example, how call options can be used for the purpose of speculation. 5 (d) Explain the difference between the concepts of convergence and conditional convergence. 5 (e) Explain the multiple exchange rate system and the advantages associated with it. 5 (f) Explain how the transfer pricing is generally used by a multinational corporation as a method of increasing profit. 5 SECTION B Answer any six out of the following nine questions in about 200 words each: 15*6=90 Q2. How can Quesnay’s Tableau Economique be regarded as a forerunner of modern circular flow of income and expenditure withou government? 15 Q3. Explain the differences among Gross National Product, National Income and Disposable Income. What adjustments have to made in order to calculate Green National Income? 15 Q4. Enumerate the basic differences between Keynesian and Monetarist schools of thought in stimulating demand. 15 Q5. Explain the relationship between finance and economic development in the context of a modern modern - using market economy. 15 Q6.Discuss Rostow’s stage theory of growth and compare it with Lewis’ econoimc development with unlimited supplies of labour. 15 Q7. What is instrumental in Solow’s growth model and what are its limitations? 15 Q8. Explain the relationship between the relative prices of output and relative factor rewards in the light of Stolper- Samuelson theoremn. 15 Q9.Do you agree that an economy cannot simultaneously maintain a fixed exchange rate, free capital movement and an independent monetary policy?Explain 15 Q10. Explain the changes in principles of multilateral trade negotiations over the globe since 1995. 15

IES GENERAL ECONOMICS PAPER 3 2022 GENERAL ECONOMICS Paper - III Time Allowed: Three Hours Maximum Marks: 200 Question Paper Specific Instructions Please read each of the following instructions carefully before attempting questions: There are SIXTEEN questions divided under THREE sections. The ONLY question in Section A is compulsory. In Section B, SIX out of NINE questions are to be attempted. In Section C, FOUR out of SIX questions are to be attempted. Candidates should attempt questions/parts as per the instructions given in the sections. The number of marks carried by a question/part is indicated against it. Wherever any assumptions are made for answering a question, they must be clearly indicated. Diagrams/Figures, wherever required, shall be drwan in the space required for answering the question itself. Unless otherwise mentioned, symbols and notations have their usual standard meanings. Candidates are required to write clear, legible and concise answers and to adhere to word limits, wherever indicated. Failure to adhere to word limits may be penalized. Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a question sha ll be counted even if attempted partly. Any page or portion of the page left blank in the Question-cum-Answer (QCA) Booklet must be clearly struck off. Answer must be written in ENGLISH only.

SECTION “A” 1.Answer all the following parts in about 100 words each: 5*6=30
1.(a) Differentiate bequest value and existence values with example. 1.(b) What is the rationale behind zero-based budgeting? 1.(c) Clarity why a monopolist does not have a supply curve. 1.(d)Explain Laffer Curve with a diagram. 1.(e)What are India's Green Growth Challenges? 1.(f)The decentralized planning effectively reduces the regional disparities.' Substantiate your views.

SECTION 'B' Answer any six questions out of the following nine in about 200 words each: 15x6=90 2.'Collective actions by local communities can help to control the environmental degradation.' Explain. 15 3.Give an account of the Theory of Contestable Market propounded by W. J. Baumol. 15 4.Using suitable diagram, show that under monopoly, the consumer surplus is lower, but the producer surplus is higher than that of a perfect competitive market. 15 5.'Patents grant monopoly power and hence necessarily reduce the short term and long term welfare of the economy.' Argue in favour or against the statement. 15 6.Distinguish between institutions and organizations. How can they lead to path dependency? 15 7.Explain the doctrine of Environmental Kuznets curve with diagram. How does the sound environmental regulations shift the curve? 15 8.Discuss the significance of the Principle of Ability to pay in the context of justified equality in the payment of tax. 15 9.Elucidate the importance of monetary policy in managing the public debt. 15 10.Would you identify the expenditure to save the white tigers in India as use value?Elaborate. 15

SECTION 'C'

Answer any four questions out of the following six in about 300 words each : 20x4-80 11.Explain different categories of market-based instruments to control environmental pollution.20 12.'Market economy and development planning complement each other." Elaborate your views on this. 20 13.Present the basic arguments and discussions of Kyoto Protocol and Paris Climate Agreements. Identify the status of the US in these agreements. What is carbon credit ?20 14.'The unskilled surplus labour is a source for increasing foreign exchange.'Substantiate. 20 15.Cost-Benefit Analysis has been developed to make expenditure decisions more appropriate.Explain the statement with your comments. 20 16.(a) 'Kinked demand hypothesis is not a theory of pricing, but a tool for explaining why is price sticky in oligopoly. Discuss. (b)A monopolist has two demand functions in two separate markets. They are: P₁ = 80-5Q₁ P₂=170-20Q₂ O Type here to search If the marginal cost of the monopolist is Rs10 and his fixed cost is Rs 50, find the equilibrium prices and quantities in the two markets. How do they change if the fixed cost changes to ₹100 ? 8+12=20 IES INDIAN ECONOMY PAPER 4 2022

SECTION 'A'

1. Answer all six parts from this section. Answer to each should be in about 100 words. 5x6-30 1.(a)Write down the key recommendations of the 15th Finance Commission of India. 5 1.(b)What are the basic approaches of financial sector reforms in India? 5 1.(c)Discuss how e-NAM and derivatives market linkages can benefit farmers in India. 5 1.(d)Discuss the role of Monetary Policy Committee (MPC) in India in the context of inflation targeting. 5 1.(e)Write down the main features of foreign trade policy (2015-20) of India. 5 1.(f)Analyse the trends in 'Fuel and Power' inflation in India based on WPI. 5

SECTION 'B' Answer any six questions from this section. Answer to each should be in about 200 words. 15x6-90

2. "India has a worse underemployment problem than unemployment." Do you agree? Give reasons. 15 3.Analyse the performance of commodity futures markets in India. Critically evaluate the working of Forward Markets Commission (FMC) in India. 15 4.Describe the measures taken by the Government of India to tackle the problem of black money. To what extent these measures are successful in addressing the problem? 15 5.What is competition policy? Why do we need a national competition policy (NCP)? How does NCP affect economic growth in India? 15 6.Discuss the opportunities and challenges of India's insurance sector. How the insurance sector reforms can resolve these challenges ? 15 7.Analyse the effects of tariff protections on domestic industries in India. Evaluate India's trade openness and tariff policy since the 1991 reforms. 15 8.Explain the rationale for various monetary policy measures undertaken by the RBI during COVID-19 Pandemic in India. 15 9.How is core inflation different from CPI headline inflation ? What is the rationale in measuring core inflation ? Explain. 15
3. What is the Aspirational Districts Programme of the Government of India? Discuss how it is a manifestation of the inclusive development agenda. 15

SECTION 'C' Answer any four questions from this section. Answer to each should be in about 300 words. 20×4=80 11.(a)Differentiate between the strategies for self-reliance through protection and self-reliance through globalisation. 10 11.(b)Evaluate Public Expenditure Management Policy as an instrument of fiscal reforms in India. 10 12 .What are the basic principles of fiscal management in India? Discuss the role of FRBM rules (2004) to improve the fiscal health at sub-national level. 20 13.(a)Critically examine whether growing population is the cause of poverty or poverty is the main cause of population growth in India. 10 13.(b)Analyse the trend in consumption inequality in India since the early 1990s. 10 14.Examine the complementarity between technological change and institutional change in enhancing agricultural growth in India. Suggest some measures for adoption of technologies for sustainable farming system in India. 20 15.Discuss the characteristic features of internal migration in India. Explain how urbanisation is linked with migration. What are the major determinants of rural to urban migration in large agglomerations in India? 20 16.Analyse the complementarity, difference and integration between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). "FDI is necessary but not sufficient condition for economic growth in India". Critically examine. 20

QUESTION PAPER SPECIFIC INSTRUCTIONS

Please read each of the following instructions carefully before attempting questions.

There are SIXTEEN questions divided under THREE Sections.

The ONLY question in Section 'A' is compulsory.

In Section 'B', SIX out of NINE questions are to be attempted.

In Section 'C', FOUR out of SIX questions are to be attempted.

Candidates should attempt questions/parts as per the instructions given in the Sections.

The number of marks carried by a question/part is indicated against it.

Candidates are required to write clear, legible and concise answers and to adhere to word limits, wherever indicated. Failure to adhere to word limits may be penalized.

Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a question shall be counted even if attempted partly.

Any page or portion of the page left blank left blank in the Question-cum-answer (QCA) Booklet must be clearly struck off. Answers must be written in ENGLISH only.