CUET 2026 May 11 Shift 2 Economics Question Paper- Download Answer Key and Solution PDF

Concept:


Government budget has different types of deficits and expenditure categories.

To solve this question, we must match each budget term with its correct formula or meaning.



Step 1: Match Primary Deficit.


Primary deficit is calculated as: \[ Primary Deficit = Fiscal Deficit - Interest Payments \]

In the question, it is given as: \[ Fiscal deficit - Net interest liabilities \]

So: \[ A \rightarrow II \]



Step 2: Match Fiscal Deficit.


Fiscal deficit represents the total borrowing requirement of the government.

It includes: \[ Net borrowing at home + Borrowing from RBI + Borrowing from abroad \]

So: \[ B \rightarrow I \]



Step 3: Match Revenue Deficit.


Revenue deficit is: \[ Revenue Deficit = Revenue Expenditure - Revenue Receipts \]

So: \[ C \rightarrow III \]



Step 4: Match Revenue Expenditure.


Revenue expenditure includes expenditure which does not create assets.

It is classified into: \[ Plan and non-plan expenditure \]

So: \[ D \rightarrow IV \]



Step 5: Final matching.


The correct matching is: \[ A-II,\quad B-I,\quad C-III,\quad D-IV \]

Hence: \[ \boxed{(B)} \] Quick Tip: Remember: \[ Primary Deficit = Fiscal Deficit - Interest Payments \] and \[ Revenue Deficit = Revenue Expenditure - Revenue Receipts \]

Concept:


Money supply measures and financial terms have specific formulas.

We must match each term with its correct definition.



Step 1: Match M1.


M1 is the narrow measure of money supply.

It includes: \[ Currency + Demand Deposits \]

So: \[ A \rightarrow IV \]



Step 2: Match M3.


M3 is a broader measure of money supply.

It includes: \[ M1 + Net time deposits of commercial banks \]

So: \[ B \rightarrow I \]



Step 3: Match Net Worth.


Net worth is calculated as: \[ Net Worth = Assets - Liabilities \]

So: \[ C \rightarrow II \]



Step 4: Match Money Multiplier.


Money multiplier is: \[ Money Multiplier = \frac{1}{CRR} \]

So: \[ D \rightarrow III \]



Step 5: Final matching.


The correct matching is: \[ A-IV,\quad B-I,\quad C-II,\quad D-III \]

Hence: \[ \boxed{(B)} \] Quick Tip: Remember: \[ M1 = Currency + Demand Deposits \] \[ M3 = M1 + Net time deposits \] \[ Money Multiplier = \frac{1}{CRR} \]

Concept:


A production function shows the relationship between inputs and output.

If both inputs are increased by the same proportion \(t\), then output may increase by the same, more than the same, or less than the same proportion.



Step 1: Match Production Function.


A production function with two inputs is written as: \[ f(x_1,x_2) \]

So: \[ A \rightarrow III \]



Step 2: Match Constant Returns to Scale.


Constant returns to scale means when inputs are increased \(t\) times, output also increases exactly \(t\) times.

So: \[ f(tx_1,tx_2)=t f(x_1,x_2) \]

Thus: \[ B \rightarrow IV \]



Step 3: Match Increasing Returns to Scale.


Increasing returns to scale means output increases more than proportionately.

So: \[ f(tx_1,tx_2)>t f(x_1,x_2) \]

Thus: \[ C \rightarrow I \]



Step 4: Match Decreasing Returns to Scale.


Decreasing returns to scale means output increases less than proportionately.

So: \[ f(tx_1,tx_2)
Thus: \[ D \rightarrow II \]



Step 5: Final matching.


The correct matching is: \[ A-III,\quad B-IV,\quad C-I,\quad D-II \]

Hence: \[ \boxed{(D)} \] Quick Tip: Returns to scale shortcut: \[ = means constant,\quad > means increasing,\quad < means decreasing \]