2015 Mains Challenge – 1 Sept 04

2015 Mains Challenge – 2 – Sept 05

2015 Mains Challenge – 3 Sept 07

2015 Mains Challenge – 4: Sept 08

2015 Mains Challenge – 5: Sept 09

2015 Mains Challenge – 6: Sept 10

2015 Mains Challenge – 7: Sept 11

2015 Mains Challenge-8: Sept 14

2015 Mains Challenge-9: Sept 15

2015 Mains Challenge-10: Sept 16

2015 Mains Challenge-11: Sept 17

2015 Mains Challenge-12: Sept 18

2015 Mains Challenge-13: Sept 21

2015 Mains Challenge-14: Sept 22

2015 Mains Challenge-15: Sept 23

2015 Mains Challenge-16: Sept 26

2015 Mains Challenge-17: Sept 28

2015 Mains Challenge-18: Sept 29

2015 Mains Challenge-19: Sept 30

2015 Mains Challenge-20: Oct 07

2015 Mains Challenge-21: Oct 08

2015 Mains Challenge-22: Oct 09

2015 Mains Challenge-23: Oct 12

2015 Mains Challenge-24: Oct 14

2015 Mains Challenge-25: Oct 15

2015 Mains Challenge-26: Oct 16

2015 Mains Challenge-27: Oct 19

2015 Mains Challenge-28: Oct 20

2015 Mains Challenge-29: Oct 21

2015 Mains Challenge-30: Oct 22

2015 Mains Challenge-31: Oct 26

2015 Mains Challenge-32: Oct 27

2015 Mains Challenge-33: Oct 29

2015 Mains Challenge-34: Oct 31






2014 Mains Challenge – 1

2014 Mains Challenge – 2

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2014 Mains Challenge – 4

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2014 Mains Challenge – 37

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2014 Mains Challenge – 40

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2014 Mains Challenge – 43

2014 Mains Challenge – 44

2014 Mains Challenge – 45

2014 Mains Challenge – 46


 Challenge  1

  1. Compare and contrast the ‘Swadeshi’ of 1905 and the ‘Swadeshi’ promoted later by Mahatma Gandhi. (200 Words)
  2. What were the shortages faced by the manufacturing sector at the dawn of Independence? (100 Words)
  3. Critically assess the Tendulkar committee’s approach to measuring poverty in India. (150 Words)


Challenge – 2

  1. State the two fundamental theorems of Welfare Economics and comment on their contemporary relevance. (200 words)

2.         a) What is Moral Hazard? Discuss with an example. (150 words)

b) Explain ‘Free- rider’ problem. Suggest possible solutions. (150 words)


Challenge 3

Question 1

a)State and explain Coase theorem.  (150 words)

b) What is money multiplier? What are its determinants? (150 words)

Question 2

What is liquidity trap? Explain the trap from the standpoint of both Demand for money and supply of money considered separately. Examine the policy implications of existence of trap. (200 words)


Challenge 4

Question 1.

Satisfying the conditions of Pareto- optimality is necessary but not sufficient for maximising social welfare. Comment. (200 words)

Question 2.

“Supply creates its own demand”. Compare and contrast the traditional versus the modern interpretation of the statement. (200 words)


Challenge 5

Question 1.

“The distinction between micro and macro economics is getting narrower and narrower day by day. Recent developments in economic theory suggest that there are micro foundations of macro-economics just as there are macro foundations of micro-economics.” Elucidate with adequate and appropriate references to economic analyses.

Question 2.

What is fiscal deficit? Comment on India’s current fiscal status. Do you think the current policy measures are adequate? If not, suggest policies.

Challenge 6

Question 1.

Bring out the relationship between price and wage policy. (200 words)

Question 2.

Describe the fiscal and monetary policies of economics stabilisation. Make a comparative analysis of their effectiveness in developed and developing nations. (200 words)


Challenge 7

Question 1.

Enumerate the role of deficit financing as a mode either of productive mobilisation of domestic factor endowments or of generating effective demand for domestic goods and services in Indian Economic context since 1970s. (200 words)

Question 2.

Write an account of the problem of increasing unemployment and under-employment in the Indian Economy. Are the measures taken by the government effective in checking the above problem. If not, suggest alternative measures that are used by  developing and developed countries in countering unemployment and underemployment. (200 words)


Challenge 8

Question 1

What do you think constitutes Globalisation? How far have we moved in the process of Globalisation? What are the short run and long run benefits of Globalisation? (200 words)

Question 2

What is Capital Account Convertibility? What are the major challenges for India to move towards it?  (200 words)

Question 3

A) Distinguish Portfolio management from FDI  (150 words)

B) Distinguish FDI from FII   (150 words)

C)Distinguish Current Account from Capital Account (150 words)


Challenge 9

Question 1 

Give short notes on a) A.K Sen’s Poverty Alleviation Strategy (100 words).

b) A.K Sen’s Capability approach (100 words).  Also elaborate the relationship between the two (100 words).

Question 2

Examine the importance of ‘Cost of Service approach’ in Taxation in India. (200 words)


Challenge 10

Question 1

What are the merits and demerits of subsidies in Indian context? (200 words)

Question 2

Elaborate on the changing role of Finance commission and RBI in the recent times in India. (200 words)


Challenge 11

Question 1

Describe Gini coefficient as a measure of inequality. (200 words)

Question 2

What is market failure? Explain its causes. (150 words)


Challenge 12

Question 1

Describe the terms Capability poverty and human poverty? Bring out the similarities and differences. What are their various forms in the Indian economy since independence? (250 words)

Question 2

Bring out the distinction between Marshallian and Walrasian approaches to Price determination.(250 words)


Challenge 13

Question 1

Short notes on the important contributions of C.N Vakil.(150 words)

Question 2

How does RBI manage the Liquidity in the financial system? Name some of the instruments introduced and measures taken in recent times for regulating Indian financial system.(200 words)


Challenge 14

Question 1

What are the goals of Public finance and explain their importance in the process of Public policy. Elucidate with examples. (200 words)

Question 2

What do you understand by the following terms: (a)Crony Capitalism ( 50 words)     (b) Development (50 words)            (c) Poverty (50 words)            d) Famine and Starvation (50 words)

Question 3

Define the term Money Illusion and explain its role in determination of output and employment.(200 words)


Challenge 15

Question 1

 What according to Arrow, are the axioms required for translating individual preference into social preferences? Why is it impossible to construct social preferences satisfying those axioms? (200 words/ CSM-2009)

Question 2

“Subjective approach to taxation leads to least aggregate sacrifice principle”. Elucidate. Also give the limitations of this principle.(200 words/ CSM-2009)


Challenge 16

Topic: Demand for and Supply of Money


The Monetarists assume the velocity of money to be relatively stable and predictable. Substantiate this assumption with the quantity theory of money and prices. How far do you agree with this assumption? (200 words)


Challenge 17

Topic: Demand for and Supply of Money


Is Friedman’s quantity theory of money close to Classical or Keynesian approach to the aggregate demand for money? Give justifications for your answer.


Challenge 18

Topic: Alternative Distribution Theories: Ricardo, Kaldor, Kalecki


 How does Kalecki’s theory of distribution share the value of output between labour and capital?  (200 words)


Challenge 19

Topic: Alternative Distribution Theories: Ricardo, Kaldor, Kalecki


 Compare and contrast the distribution theories of Ricardo and Kalecki. (200 words)


Challenge 20

Topic:Development and Environmental Sustainability 


What are the limitations of Environmental Kuznets curve (EKC)?  (200 words)


Challenge 21

Topic:Development and Environmental Sustainability

Question 1

Distinguish between Strong and weak sustainability.  (200 words)

Question 2

Short notes on Green NNP. (200 words)


Challenge 22

Topic : Indian Economy post-liberalisation


 What are the problems and implications of the National Food security Act for India’s commitments under the WTO Agreement on Agriculture? (200 words)


Challenge 23

 Topic: Indian Economy post-liberalisation: Agriculture and WTO


“Institutional arrangements such as WTO are essential for ensuring a level playing field so that considerations of comparative advantage can have a free and fair play”. Elaborate. (200 words)


Challenge 24

 Topic : Indian Economy post-liberalisation:  Intellectual property rights


 “Attempts to ensure Intellectual property protection has resulted in the failure of knowledge spillovers from industrialised countries to developing countries like India”. Comment. (200 words)


Challenge 25

Topic : Indian Economy post-liberalisation: Intellectual property rights


Write a short note on problems involved in the implementation of Intellectual Property Act in India. (200 words)


Challenge 26

 Topic : Decentralized planning – 73rd and 74th Constitutional amendments, Fiscal Federalism


Discuss the salient economic importance and drawbacks of 73rd and 74th Constitutional amendments. (200 words)


Challenge 27

 Topic: Decentralized planning: 73rd and 74th Constitutional amendments, Fiscal Federalism


Examine the fiscal federal system as it operates in India.What improvements would you suggest. (200 words)


Challenge 28

 Topic: Decentralized planning: 73rd and 74th Constitutional amendments, Fiscal Federalism


As Economists, what do you think are the major concerns in bifurcation of a state? Examine the current demand for smaller states and its implication on India’s political economy. (200 words)


Challenge 29


“A dominant firm acts as a price leader and other firms adjust their outputs accordingly. Comment. (200 words/ CSM-2009).


Challenge 30

Topic: Money – Banking


Explain Expectations theory of the term structure of interest rates. Is Expectations theory sufficient to explain the changes in interest rates? (200 words)


Challenge 31

 Topic: Money – Banking


Write a short note on the steps taken by RBI to regulate financial intermediaries in the recent times. (200 words)


Challenge 32

 Topic: Money – Banking


Short note on Baumol’s Inventory analysis of transaction demand for money. (200 words)


Challenge 33

 Topic: Money – Banking


What are the impacts of plastic money (debit and credit cards) on the money demand and money supply? (200 words)


Challenge 34

 Topic: Money – Banking


Define the following: a) High powered money b) Statutory Liquidity ratio.  (200 words)


Challenge 35

  1. Write on drain theory as developed by Dada Bhai Naroji. How does it explain sustained poverty during British rule in India? (150 words)
  2. Mixed economy is an outcome of the compromise between laissez faire capitalism and socialist state control of resources. Elaborate mention its salient features.  (150 words)


Challenge 36

1) Why the classical view of the labor market is called Auction market? What are the assumption behind this ? (150 words)
2) State the basic features of the Mahalanobis model.  (150 words)


Challenge 37

  1.  How is the development looked upon by A.K. Sen in terms of freedom and poverty as unfreedoms? Point out his narration of five dimensions of poverty. (150 words)
  2. State the basic features of Mahalanobis model. (150 words)


Challenge 38

  1. An underdeveloped money and capital market has been a major cause of slow economic growth in India.” In the light of this statement, give relative importance of financial sector vis-a-vis real sector in Indian Economy? (300 words)
  2.  Explain how the origin of Keynesian revolution can be found in the problem of unemployment?  (150 words)


Challenge 39

  1. An underdeveloped money and capital market has been a major cause of slow economic growth in India.” In the light of this statement, give relative importance of financial sector vis-a-vis real sector in Indian Economy? (300 words)
  2.  Explain how the origin of Keynesian revolution can be found in the problem of unemployment?  (150 words)


Challenge – 40

  1. ” A close connection between the finances on the one hand, and politics and administration on the other hand, and the influence of the latter on former cannot be avoided. This is all the more true in India”. Do you agree with this statement of C. N. Vakil? Is it relevant today? (300 Words)
  2.  The industrial development agenda framed by the Industrial Policy, 1956 transformed the Indian Economy substantially from an agriculture to an Industrial economy. Elucidate. State in brief sectoral composition of growth during the period before 1990’s. (300 Words)


Challenge – 41

  1. Transformation of rural sector is key to economic development as it sustains two-thirds of Indian population. How physical connectivity, electronic connectivity and knowledge connectivity may be helpful in this transformation? Explain the linkages.(300 words)
  2. What variables will shift the position of LM schedule? Explain how a change in each of the variable will shift the schedule? (200 words)


Challenge – 42

  1.  Inflation is not purely a monetary phenomenon in India and hence scope of monetary policy of RBI to contain it is limited. Discuss (300 words)
  2.  Explain the relationship between the effectiveness of monetary policy and the interest elasticity of investment. Will the monetary policy be more or less effective the higher the interest elasticity of investment demand? Explain also the relationship between the fiscal policy and the interest elasticity of money demand. Why do the two relationship differ? (300 words)


Challenge – 43

1.Do you agree that focused and target oriented technological interventions under National Food Security Mission (NFSM) have made significant impact since its inception? Justify? (150 words)

2.Why are we so assured that when the money and product market are in equilibrium, the bond market will also be in equilibrium? (150 words)


Challenge – 44

1.”Partial Capital Account Convertibility cannot serve the purpose of integrating Indian Economy with global economy” analyse critically . (150 words)

2.” Money is more important in the Keynesian system than in the classical system”. Do you agree? Or would you maintain that the opposite is true? (150 words)

Challenge – 45

1.What are the key initiatives proposed in foreign trade policy. 2009-14 for market diversification and technological upgradation to give a boost to export? (150 words)

 2.Compare Keynesian and Monetarist views on how the velocity of money is determined. How do their differing views on velocity affect their respective policy conclusions? (150 words)

Challenge – 46

1.Write on “dichotomy of development” and “urban bias” in Indian Economy. (150 words)

 2.What is “crony capitalism”? How it compromises economic and social justice issues? Explain. (150 words)
3.Explain the concept of rational expectations. How does this view of how expectations are formed differ from the assumption that workers form expectations of current and future price levels based on past information about prices? (250 words)

Challenge – 47

1.What is the present policy of disinvestment of the Government of India? What modification can be introduced in order to make it fruit bearing? (200 Words)

2.What are the major objectives of the Direct Tax Code Bill, 2010 ? Will it be effective in generating enhanced tax revenues? (200 Words)
3.Within the new classical framework, how would you explain a sustained departure from potential output such as that experienced by the United States during the deep recession of 2007-09? (250 Words)

Challenge 48

1) Indian planning structure and system still remains largely in favor of a centralized system of planning. The 73rd and 74th Constitutional Amendments have hardly brought about any change in reality in the nature of Indian planning process”. Critically evaluate this statement .(300 words)

2) Analyze the effects of autonomous fall in the demand for a country’s export under fixed and flexible exchange rate systems. In each case, indicate the effects on the country’s balance of payments and on the exchange rate. (200 Words)
3) Describe the Bretton Woods system of exchange rate determination that was set up at the end of World War-II and lasted until 1973. (200 Words)

Challenge – 49

1) Accelerated growth of tertiary sector during the past two decades in Indian Economy has posed multiple challenges. Discuss (300 Words) 

2) Explain what it means to say that we have perfect capital mobility. Why the Balance of Payment schedule is horizontal in the case of perfect capital mobility? (200 Words)
3) Consider the effect of a lump sum tax cut from T0 to T1, in a fixed exchange rate system. Consider both imperfect and perfect capital mobility. In which case will the tax cut have a larger effect on income? (200 words)

Challenge – 50

1) Account for the changes in employment pattern in India after liberalization. What are your suggestions for employment security in the “informal” sector of the economy? Discuss. (300 words)

2) “Speculators may do no harm as bubbles on a steady state of enterprise, but the position is serious when enterprise becomes the bubble on whirlpool of speculation. When capital development of a country becomes a byproduct of the activities of a casino, the job is likely to be undone ” Explain in the context of global financial crisis and its impact on Indian Economy. (300 words)
3) Suppose fiscal policy in a country is characterized by excessive government spending. Also suppose the central bank in that country is targeting the interest rate. What effect will the overly expansionary fiscal policy have on the money supply? on Output and inflation? (200 words)

Challenge – 51

1) Explain the determination of output and employment in a macroeconomy under the conditions when individual are subject to 

  i) no money illusion
 ii) money illusion
(200 words)
2) An individual finds that all his receipts (including income) and payment transactions are in the form of money that bears no interest. However he can convert money into bonds and earn interest income but that involves  a fixed cost of each conversion transaction. What are the determinants of the individual’s demand for holding money? (200 words)
3) Explain the concept of an automatic fiscal stabilizer. Give Examples. (200 words)

Challenge – 52

1) Under Bertrand price competition with homogenous products in an oligopoly demonstrate how is the equilibrium price that will prevail arrive at ? (300 words) 

2) What relationship do you see between the problems many countries have experienced with money supply targeting and the move to inflation targeting? (200 words)
3) Before Marshall some classical economists argued that it was cost of producing goods that determined price, others were of the view that it was utility of goods that determined price. Explain how Marshallian time period analysis of value helped to resolve this controversy? (200 words)

Challenge – 53

1) If workers supply labour on the basis of an expected real wage, how is the aggregate supply of output determined in the economy? Suppose aggregate demand and supply are below the natural rate of employment and output. Would the new classical economist advocate any particular policy of intervention when the economy is in such a situation ? ( 300 words) 

2) What are the main goals of central bank? What are the instruments by which the central bank manages the liquidity in the financial system and how does it use these instruments to achieve its goal? (300 words)
3) In an economy characterized by two consumers two commodities show how general equilibrium of exchange is attained. State your assumption clearly.  (200 words)

Challenge – 54

1) After 2003 till 2008 many emerging economies including India received huge capital inflows. To contain the effect of these flows the central bank sterilized the inflows. What is sterilization and how does it affect the supply of money in the economy? (300 words) 

2) What are the three basic goals of public finance? Can these goals be coordinated into an overall pattern of policy or they are always in conflict? ( 150 words)
3) “General equilibrium analysis is solely concerned with relative prices” Explain (200 words)

Challenge – 55

1) Summarize the main arguments of the trade optimist and trade pessimist with regard to trade policy for developing countries. Which arguments does the data tend to support? (200 Words) 

2) Kaldor in his theory of distribution argues unlike Kalecki that it is not reasonable to neglect the constraints of labour shortage, and analyse a situation of full employment. Show how investment and saving propensities determine distributive shares in Kaldor approach. Suppose that investment is not exogenous as in Kaldor’s original model but that it varies with profits. What does it mean for the stability of Kaldor model of distribution? (200 words)
3) Write the criticism of Ricardian theory of distribution? (200 words)

Challenge – 56

1) ” He skates on thin ice who identifies profit with monopoly and monopoly with profit” Explain? (200 words)

2) Under Bertrand price competition with homogenous products in an oligopoly demonstrate how is the equilibrium price that will prevail arrived at? (300 words)
3) Expand on the following three explanations for the Kuznets hypothesis about inequality and development i) Cohort size hypothesis ii) the effect of openness on inequality iii) the strong versus the weak version of hypothesis.  (300 Words)

Challenge – 57

Q) Explain Chamberlain’s concept of excess capacity.What according to him is responsible for emergence of excess capacity under monopolistic competition? ( 200 words)

Q) Suppose the goods, financial, current account and foreign exchange markets are initially in equilibrium . The economy has low or imperfect capital mobility and operates at fixed exchange rate. The economy is subject to favorable demand shock that raises expenditure. What is the impact of the shock on aggregate income and interest rate in the short run? How is the balance of payment equilibrium is achieved?  ( 300 words)
Q) Why are fiscal policy multipliers smaller in magnitude in the variable price fixed wage version of the Keynesian model than in the fixed price IS-LM model.? Why are these multiplier still smaller when we allow the money wage as well as the price level to be variable? (200 words)

Challenge 58

1) What is a speculative attack on a currency? Suppose the economy has a fixed exchange rate and government is following an expansionary macroeconomic policy. The government increases the budget deficit which it finances through a monetary expansion. How does it leads to a crisis? What is the timing of speculative attack? (300 words)

2) Analyze the effects of an increase in the money supply within the Keynesian model where both the price level and money wage are assumed to be variable. Include in your answer the effects on the level of real income, the price level, the interest rate and the money wage. (200 words)

Challenge – 59

1) Macroeconomics is usually approached via the outcomes of economic interaction in the following four markets -commodities, money, bond and labour markets. The classical economist focused on which three of the four markets? In which market does the loanable fund theory of interest rate determination of the classical economist focus and how is the interest rate is determined? The Neo Classical synthesis focus on which three markets? In which market the interest primarily determined in the liquidity preference theory? (300 words)

2) Compare monetarist and Keynesian views on the proper conduct of fiscal policy. For both monetarist and Keynesians, explain not only their conclusions regarding fiscal policy but also how these conclusions are related to their respective theories. (200 words)
3) Explain the concept of the natural rate of unemployment. What are the implications of Milton Friedman’s theory of the natural rate of unemployment for the effectiveness of economic stabilization policies? (200 words)

Challenge – 60

1) Discuss in detail the views of VKRV Rao on deficit financing? (150 words)

2) How would a supply shock such as an exogenous increase in the price of oil, affect the aggregate price level and the level of real output in the new classical model? (200 words)
3) Within the classical model analyze the effects of an increase in the marginal income tax rate. Explain how output, employment and price level are affected. Consider the cases in which the increased revenue produced by the tax increase results in a decline in bond sales to the public and in which it results in lower money creation. ? (300 words)

Challenge – 61

1) How is GST different from VAT? What is the grand bargain suggested by the Thirteenth Finance Commission for implementation of GST? (300 words)

2) What are the fiscal and monetary implications of vertical IS and vertical LM curves? (250 words)

Challenge – 62

1) What do you mean by Hindu rate of growth? Why has it been argued that poverty cannot be eradicated under Hindu rate of Growth? (200 words)

2) Examine Kalecki’s model of distribution. Do you consider it a correct explanation of distribution? (300 words)

Challenge – 63

Q) Trace the growth of real per capita income in India in the pre liberalisation period, keeping in view the interplay of increasing population and increasing real national income ( 300 words)

Q) What do you mean by money multiplier? What are the factors that determine the value of the multiplier? (200 words)

Challenge – 64

Q) Explain why in spite of economic planning income-distribution has turned more unequal through time? (200 Words)

Q) “Transaction demand for money is interest rate elastic”. Explain in reference to the post Keynesian theories of demand for money? (200 words)

Challenge – 65

1) Population is not just a denominator to deflate aggregates. It is determined by the level and pattern of economic development” Comment. (250 words)

2) Why are trading blocks formed? Explain the welfare impact of such trading blocks for non-member countries? (200 words)

Challenge – 66

1) Distinguish between cooperative, contractual and corporate farming. Which of these is best suited for India and why? (250 words)

Challenge – 67

Q) Delineate the trends in the growth and industrial composition of public sector in India during the pre-liberalization period. (200 words)