ICSE Class 10 Question Paper 2020 for Economic Applications

ECONOMIC APPLICATIONS

(Two Hours)

Answers to this Paper must be written on the paper provided separately.

You will not be allowed to write during the first 15 minutes.

This time is to be spent in reading the question paper.

The time given at the head of this Paper is the time allowed for writing the answers.

Attempt all questions from Part I and any four questions from Part II.

The intended marks for questions or parts of questions are given in brackets [ ].

PART I (40 Marks)
Attempt all questions from this Part

Question 1

(a) Mention one important difference between land and capital. [2]

(b) In which form of market is the seller a price maker? Justify your answer. [2]

(c) What is meant by an overdraft facility? [2]

(d) State two positive roles played by Public Sector Undertakings in India. [2]

(e) Draw a neat diagram to show a relatively elastic supply curve. [2]

Question 2
(a) Construction of dams has negative impacts on the ecosystem. [2]
Give two reasons to justify the statement.

(b) What is meant by labour in economics? [2]

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(c) A consumer purchased 60 units of a good at ₹ 7 per unit. But when price rises [2]
to ₹ 12 per unit, demand contracts to 40 units. Calculate the price elasticity of
demand.

(d) Entrepreneurship is not labour even though there are human factors associated [2]
with the same business. Explain.

(e) Complete the following hypothetical individual supply schedule: [2]
Price in ₹ Quantity supplies in kgs.
40 25
35 (i)
30 18
25 (ii)

Question 3
(a) Differentiate between walking inflation and running inflation. [2]

(b) Explain horizontal division of labour with an example. [2]

(c) State two ways in which the Government can play an important role in the rapid [2]
agricultural development of a country.

(d) How is circulating capital different from fixed capital? [2]

(e) What is joint demand? Give an example. [2]

Question 4
Define the following terms:

(a) Regressive Taxation [2]

(b) Monopsony [2]

(c) Migration [2]

(d) Money [2]

(e) Perfectly inelastic demand [2]

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PART II (60 Marks)
Attempt any four questions from this Part

Question 5
(a) Define capital formation. [7]
Explain three important factors affecting the rate of capital formation.

(b) Discuss any four negative impacts of industrialization. [8]

Question 6
(a) What is a Central Bank? Explain the following functions of a Central Bank: [7]

(i) Issuing paper notes

(ii) Acting as a banker to the Government

(iii) Lender of the Last resort

(b) (i) Prepare a hypothetical individual demand schedule. [8]

(ii) Draw the individual demand curve based on the schedule.

(iii) Explain any two determinants of demand other than price.

Question 7
(a) What is privatization? Explain three arguments favouring privatization. [7]

(b) What do you understand by Efficiency of Labour? [8]

Explain three factors affecting efficiency of labour.

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Question 8

(a) What is a monopolistically competitive market? [7]

Explain the following features of this market:

(i) Non-price competition

(ii) Presence of Selling cost

(iii) Price policy which is followed.

(b) Explain any four factors affecting productivity of land. [8]

Question 9
(a) What are direct taxes? [7]

Explain how direct taxes:

(i) are equitable

(ii) increase civic sense

(iii) are economical

(b) What are Commercial Banks? [8]
Name any two Commercial Banks of India.
Explain the difference between Cash Credit and Bank Loans lent by the
Commercial Banks.

Question 10
(a) Read the extract given below and answer the questions that follow:

NDTV Profit, May 01, 2019

State Bank of India, the country’s largest lender, has reduced interest rate
on savings bank accounts with balance of Rs. 1 lakh or more from today.
The State Bank of India customers with Rs. 1 lakh or more in their savings
account will earn an interest of 3.25 percent.

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Meanwhile, customers with less than Rs. 1 lakh in their savings bank
accounts will continue to earn interest at the rate of 3.50 percent.

The move to reduce interest rate on deposits of more than Rs. 1 lakh
comes as the State Bank of India is linking the interest rate to the RBI’s
repo or short-term lending rate. The interest rate on savings bank
account may move up or down depending on what stance the Reserve
Bank of India takes at the bi-monthly monetary policy meeting.

(i) What is monetary policy? [2]

(ii) What is Bank Rate? What is the effect of a reduction in Bank Rate? [4]

(iii) Will a reduction in the interest rate on savings account encourage or [1]
discourage savings?

(b) Several causes have been identified by researchers for the poor performance [8]
of the public sector enterprises in India.

Identify and explain four such causes.

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