CUET 2024 Economics Question Paper with Answers & Solutions

Correct answer: A

A market economy is one where economic agents (consumers and firms) can freely exchange their endowments/commodities with each other through markets, with minimal government interference.

Correct answer: B

(A) is correct: MU = change in TU per additional unit. (C) is correct: MU = 0 when TU is maximum/constant. (E) is correct: indifference curves slope downward left to right. (B) is wrong (two ICs never intersect) and (D) is wrong (diminishing MRS gives the IC its convex shape). So (A), (C) and (E) only.

Correct answer: B

Equilibrium = plans of all consumers and firms match (I). Excess supply = supply greater than demand (III). Inferior good = demand falls as income rises (II). Price ceiling = government-imposed upper limit (IV). So A-I, B-III, C-II, D-IV.

Correct answer: C

A demand curve with unitary elasticity (e=1) at every point is a rectangular hyperbola, where expenditure (P×Q) is constant along the curve.

Correct answer: C

The inequality $p_1x_1 + p_2x_2 \leq M$ represents all bundles the consumer can afford and is termed the budget constraint. (The set of all affordable bundles is the budget set, but the inequality itself is the budget constraint per NCERT.)

Correct answer: B

(A) Adam Smith is the Father of Economics, (B) Keynes gave the theory of income, output and employment, (C) four-sector model = C+I+G+(X−M) are correct. (D) is wrong: store of value is a secondary/derivative function of money; the primary function is medium of exchange. So (A), (B) and (C) only.

Correct answer: A

Wealth of Nations (C) = 1776; Economic Consequences of the Peace (D) = 1919; General Theory (A) = 1936; Mahalanobis FRS (B) = 1945. Ascending order: (C), (D), (A), (B).

Correct answer: C

With no government there are no government expenditure (G) and taxes (T); with no foreign trade there are no imports (M) and exports (X). Hence G = T = M = X = 0.

Correct answer: B

GDP deflator = Nominal GDP / Real GDP = 1100/1000 = 1.1.

Correct answer: C

Flows are measured over a period of time (B correct); stocks are measured at a point of time (D correct); GVA at FC + Indirect Taxes − Subsidies = GVA at MP (E correct). (A) and (C) reverse the definitions. So (B), (D) and (E) only.

Correct answer: C

When supply is infinitely elastic at constant price, output is determined solely by aggregate demand. This is Keynes's Effective Demand Principle.

Correct answer: D

By the Fisher relation, Nominal Interest Rate = Real Interest Rate + Inflation Rate.

Correct answer: D

Multiplier = 1/MPS. At MPS=0.4, multiplier=2.5; at MPS=0.5, multiplier=2. An increase in MPS decreases the multiplier.

Correct answer: D

The paradox of thrift (NCERT): if all people increase the proportion of income they save, the total value of savings in the economy will not increase—it will decline or remain unchanged, because aggregate demand and income fall.

Correct answer: B

Ex-post refers to realized/actual values (what has actually happened), while ex-ante refers to planned/intended values.

Correct answer: D

Multiplier = ΔY/ΔI, so ΔI = ΔY/multiplier = 800/5 = ₹160 crore.

Correct answer: D

(A) CRR is a quantitative tool controlling money supply—correct. (D) RBI selling bonds (OMO sale) absorbs reserves—correct. (E) RBI changing the repo/bank rate at which it lends to commercial banks influences money supply—correct. (B) wrong: OMO types are outright and repo, not 'upright'. (C) wrong: a fall in bank rate increases (not decreases) money supply. So (A), (D) and (E) only.

Correct answer: B

Bank Rate = minimum rate for long-term funds (II). Marginal Standing Facility is the penal rate above repo (III). Repo Rate involves securities pledged for repurchase (I). Reverse Repo = central bank borrows funds from commercial banks (IV). So A-II, B-III, C-I, D-IV.

Correct answer: C

The central bank does not deal directly with the public; accepting deposits and giving loans to people is the function of commercial banks. The other three are central bank functions.

Correct answer: C

Article 112 of the Constitution deals with the Annual Financial Statement, i.e., the Union Budget.

Correct answer: A

Capital receipts either create a liability (e.g., borrowings) or reduce assets (e.g., disinvestment) of the government.

Correct answer: B

Gold Standard (pre-1930s) → Bretton Woods Conference (1944) → Smithsonian Agreement (1971) → Establishment of WTO (1995). Ascending: (D), (B), (A), (C).

Correct answer: B

When the price/value of the domestic currency rises in terms of foreign currency under a flexible (floating) exchange rate, it is appreciation. (Devaluation/revaluation are policy changes under a fixed rate system.)

Correct answer: B

Pegged exchange rate system = fixed exchange rate system (II). Managed floating = dirty floating (III). Bretton Woods Conference = setting up of IMF and World Bank (I). Third element in BOP = Errors and Omissions account (IV). So A-II, B-III, C-I, D-IV.

Correct answer: B

Casualization shifts workers to casual/informal jobs lacking job security and social protection, thereby increasing the vulnerability of the workforce.

Correct answer: D

Nationalization of RBI (1949) → Third Five Year Plan (1961–66) → Establishment of NABARD (1982) → FRBMA (2003). Ascending: (D), (C), (A), (B).

Correct answer: B

Carrying capacity (NCERT) means resource extraction does not exceed the rate of regeneration and wastes remain within the assimilative/absorptive capacity of the environment.

Correct answer: C

The Right to Education Act, 2009 makes free and compulsory education a Fundamental Right (Article 21A) for children aged 6–14 years.

Correct answer: C

By installed power generation capacity (higher to lower): Thermal > New and renewable energy > Hydro > Nuclear. So (B), (C), (D), (A).

Correct answer: C

Chronological order: MRTP Act (1969) → FERA (1973) → FEMA (1999) → Competition Act (2002). Ascending: (D), (C), (B), (A).

Correct answer: C

China's Great Leap Forward campaign was initiated in 1958.

Correct answer: B

Great Leap Forward aimed at massive-scale industrialisation (II). Mao Zedong introduced the Great Proletarian Cultural Revolution (III). Brundtland Commission focused on protecting future generations (I). Our Common Future is the seminal report defining sustainable development (IV). So A-II, B-III, C-I, D-IV.

Correct answer: B

The first phase of the Green Revolution was mid-1960s to mid-1970s and the second phase from mid-1970s to mid-1980s, when HYV technology spread to many states and crops.

Correct answer: B

Per NCERT, Pakistan's improved growth in the 1980s was attributed to a good harvest (the agriculture sector performing well), not to a sustained institutionalised process.

Correct answer: C

An unexpected rise in sales means goods are sold faster than planned, leading to an unplanned fall (decumulation) of inventories.

Correct answer: B

The currency deposit ratio is the ratio of currency held by people to deposits. During festive seasons people hold more cash for spending, so the currency deposit ratio increases (NCERT).

Correct answer: C

The European Monetary Union (with the euro introduced as an electronic currency and the EMU's third stage) was established in 1999.

Correct answer: C

In a two-sector circular flow, households supply factor services to firms, and firms produce goods and services. There is no government in a two-sector model, so options A and D are wrong. So firms produce goods and services is correct.

Correct answer: B

(A) Ex ante saving = what is planned to save—correct. (C) Ex post saving = what has actually happened (realized saving)—correct. (B) is wrong (ex post is realized, not planned) and (D) is garbled/wrong. So (A) and (C) only.

Correct answer: B

Annual Financial Statement = main budget document (III). Capital Receipts create liabilities or reduce financial assets (I). Capital Payment creates financial assets or reduces liabilities (IV). Export > Import = trade surplus (II). So A-III, B-I, C-IV, D-II.

Correct answer: D

The passage states: 'Indirectly, the civic authorities are benefitted too as they have to dispose reduced quantity of waste.'

Correct answer: C

The passage states earthworms can convert organic matter into compost faster than the normal composting process—i.e., they take less time.

Correct answer: B

The passage states water bodies including ground water systems have suffered due to chemical contamination (and demand for irrigation went up year after year).

Correct answer: B

The passage states cattle are maintained in certain parts only because they produce dung which is an important fertilizer and soil conditioner.

Correct answer: A

The passage centrally discusses composting from organic wastes and earthworm-based (bio) composting and its benefits, so the most suitable title is Biocomposting.

Correct answer: C

The passage states India was well known for handicraft industries in cotton and silk textiles, metal and precious stone works etc.

Correct answer: D

The passage states the colonial government's policies were concerned more with the protection and promotion of the economic interests of their home country than with the development of the Indian economy.

Correct answer: B

The passage lists the notable estimators as Dadabhai Naoroji, William Digby, Findlay Shirras, V.K.R.V. Rao and R.C. Desai.

Correct answer: D

The passage states growth of aggregate real output was less than two per cent coupled with a meagre half per cent growth in per capita output per year.

Correct answer: C

The passage states Indian products enjoyed a worldwide market based on the reputation of the fine quality of material used and the high standards of craftsmanship.