TS Intermediate Economics 1st Year Model Paper 2023

SECTION A

Note: (i) Answer ANY THREE of the following questions in 40 lines each.

(ii) Each question carries TEN marks

1. Describe the Law of Diminishing Marginal Utility, its limitations, and importance.

Answer: The Law of Diminishing Marginal Utility states that as a person consumes more units of a good or service, the additional satisfaction (marginal utility) derived from each successive unit decreases, while the utility from the first few units is higher.

For example, if you eat a piece of cake, the first piece will give you the most satisfaction. However, as you continue eating, each additional piece will provide less satisfaction than the previous one.

Limitations:

It assumes constant conditions: The law assumes that no other factors change (e.g., the consumer’s mood or environment) while consumption increases.
Applicable only to goods and services: The law doesn’t apply to all types of goods, especially those with non-decreasing marginal utility, such as addictive substances or certain investments.
Subject to individual preferences: The rate at which utility diminishes may vary from person to person.

Importance:

Helps in understanding demand: It explains consumer behavior and demand patterns for goods and services.
Basis for pricing: Producers use this concept to set optimal prices for goods and services.
Consumer equilibrium: It is used in determining the optimal consumption bundle for a consumer, where the marginal utility per unit of money is equal across all goods.

2. Explain the meaning of Perfect Competition. Illustrate the mechanism of Price Determination under Perfect Competition.

Answer: Perfect competition refers to a market structure where numerous small firms produce identical products, and no single firm has the power to influence the market price. In a perfectly competitive market, there are no barriers to entry or exit, and all firms and consumers have perfect information.

Characteristics of Perfect Competition:

Large number of buyers and sellers: No individual buyer or seller can influence the price.
Homogeneous products: All firms sell identical products.
Free entry and exit: Firms can enter or leave the market without restrictions.
Perfect information: All participants have full knowledge of prices, products, and market conditions.
Price takers: Firms are price takers and accept the market price determined by the overall demand and supply.

Price Determination Mechanism under Perfect Competition:

Supply and Demand interaction: The price in a perfectly competitive market is determined by the intersection of the market supply and demand curves.
- When demand exceeds supply, prices rise, encouraging producers to increase production.
- When supply exceeds demand, prices fall, leading producers to reduce output.
In the short run: Firms may make profits or incur losses, depending on their cost structures and market prices.
In the long run: Firms enter or exit the market based on profitability. If firms are making a profit, new firms enter, increasing supply and driving prices down until firms earn normal profit (zero economic profit). If firms are incurring losses, they exit the market, reducing supply and pushing prices up until firms earn normal profit again.

3. Critically examine the Law of Variable Proportions.

Answer: The Law of Variable Proportions, also known as the Law of Diminishing Returns, explains the relationship between the quantity of a variable input (such as labor) and the output produced, holding other inputs constant (such as capital).

Stages of the Law:

Increasing Returns: In the initial stage, as more units of the variable input are added to a fixed amount of other inputs, output increases at an increasing rate.
Diminishing Returns: In the next stage, as more units of the variable input are added, the output increases at a decreasing rate. The marginal product of the variable input starts to decline.
Negative Returns: In the final stage, adding more units of the variable input reduces total output, resulting in negative returns.

Critical Examination:

Assumption of a fixed factor: The law assumes that one factor (e.g., capital) is fixed while others are variable. This assumption may not always hold in real-world scenarios.
Short-run applicability: The law applies in the short run when one factor is fixed, but in the long run, all factors of production can be adjusted.
Limited to certain production processes: It may not be applicable to all production processes, especially in industries where technology or economies of scale come into play.

Importance:

Helps firms in decision-making: It guides firms in optimizing their input usage for maximum productivity.
Cost management: Understanding diminishing returns helps in cost planning and price determination.

4. Explain the Keynesian Theory of Employment.

Answer: The Keynesian Theory of Employment, developed by economist John Maynard Keynes, focuses on the role of aggregate demand in determining the level of employment in an economy. Keynes argued that the total demand for goods and services in an economy (aggregate demand) determines the level of employment.

Key Concepts:

Aggregate Demand: The total demand for goods and services in the economy, which consists of consumption, investment, government spending, and net exports.
Full Employment: Keynes suggested that economies can be at equilibrium with unemployment if aggregate demand is insufficient. Full employment does not automatically occur in all markets.
Involuntary Unemployment: Unlike classical economics, Keynes believed that unemployment can exist even if wages are flexible due to a lack of aggregate demand.
Multiplier Effect: An increase in government spending or investment can lead to an increase in total income and employment through multiple rounds of spending.

Policy Implications:

Government intervention: Keynes advocated for active government intervention in the economy, especially through fiscal policy (increasing government spending and lowering taxes) to boost aggregate demand and reduce unemployment.

5. What are the various methods of calculating National Income? Explain them.

Answer: National Income refers to the total monetary value of all goods and services produced in a country during a specific period, usually a year.

There are three main methods to calculate National Income:

Income Method:
- This method calculates national income by adding up all the incomes earned by individuals and firms in the country, including wages, rent, interest, and profits.
- Formula:
$\text{National Income} = Wages + Rent + Interest + Profits$
- It focuses on the distribution of income to the factors of production (labor, land, capital, and entrepreneurship).
Expenditure Method:
- This method calculates national income by adding up all the expenditures made on final goods and services in the economy. It considers consumption, investment, government spending, and net exports (exports minus imports).
- Formula:
$\text{National Income} = C + I + G + (X – M)$
- Where $C$
Production (or Output) Method:
- This method calculates national income by adding up the value-added at each stage of production in the economy. The value added is the difference between the value of output and the value of intermediate goods used in production.
- Formula:
$\text{National Income} = \sum (\text{Value Added in each sector})$
- This method avoids double-counting by considering only the value added at each stage of production.

Importance:

These methods help to estimate the total economic activity in a country, guiding policy decisions, economic planning, and international comparisons.

SECTION – B

Note: (i) Answer ANY EIGHT of the following questions in 20 lines each.

(ii) Each question carries FIVE marks.

6. What is Utility? What are its types?

Answer: Utility refers to the satisfaction or pleasure derived by a consumer from the consumption of goods and services. It is the subjective measure of satisfaction or happiness that an individual gains from a particular product.

Types of Utility:

Total Utility: The total satisfaction derived from consuming a certain quantity of a good or service. It increases as more units are consumed but at a decreasing rate according to the Law of Diminishing Marginal Utility.
Marginal Utility: The additional satisfaction or utility gained from consuming one more unit of a good or service.
Actual Utility: The utility derived from the consumption of a good at a given point in time.
Expected Utility: The anticipated satisfaction from consuming a good or service in the future.
Cardinal Utility: Assumes utility can be measured in exact numbers, and the consumer is able to compare and quantify the satisfaction from different goods.
Ordinal Utility: Suggests that utility can only be ranked and not measured numerically, where the consumer is able to rank preferences but not measure the exact level of satisfaction.

7. Explain the exceptions to the Law of Demand.

Answer: The Law of Demand states that, ceteris paribus, when the price of a good increases, the quantity demanded decreases, and vice versa. However, there are several exceptions to this law:

Giffen Goods: These are inferior goods that see an increase in demand as their price rises, due to the income effect outweighing the substitution effect.
Veblen Goods: Goods for which demand increases as the price rises because they are seen as status symbols (e.g., luxury items like designer handbags or expensive cars).
Speculative Bubbles: In certain speculative markets (e.g., stocks or real estate), consumers may demand more of an asset as its price rises, hoping to profit from future price increases.
Necessities: For essential goods, like medicines, demand may not decrease with an increase in price because they are required regardless of cost.
Expectations of Future Price Increases: If consumers expect prices to rise in the future, they might increase current demand, even if the price increases in the present.

8. Explain the scarcity definition of Economics.

Answer: The scarcity definition of economics is the view that economics is the study of how individuals and society make choices in the face of limited resources. It is based on the idea that the resources available to produce goods and services are finite, but human wants are virtually unlimited. This scarcity forces societies to prioritize how resources are allocated and how goods and services are distributed among competing uses.

Key Points:

Scarcity leads to the need for allocation decisions.
It results in trade-offs, where choosing one option means forgoing another.
Scarcity is central to the study of economics because it explains the need for efficiency in resource use.

9. Point out the importance of Price Elasticity of Demand.

Answer: Price Elasticity of Demand (PED) measures the responsiveness of the quantity demanded of a good to a change in its price. It is important for the following reasons:

Pricing Decisions: Understanding PED helps businesses set prices optimally to maximize revenue.
- If demand is elastic, lowering prices may increase total revenue.
- If demand is inelastic, increasing prices may lead to higher revenue.
Tax Policy: Governments use the concept of elasticity to predict the impact of taxes on goods. Taxing inelastic goods is preferable because consumers are less responsive to price increases.
Consumer Behavior: PED reveals how consumers adjust their purchasing habits when prices change, aiding businesses in forecasting demand patterns.
Market Analysis: It helps in determining which products will see significant changes in demand when prices fluctuate, assisting firms in managing supply levels.

10. What are the characteristics of Monopolistic Competition?

Answer: Monopolistic Competition is a market structure that combines elements of both perfect competition and monopoly. The characteristics of monopolistic competition include:

Large Number of Firms: There are many firms in the market, each producing a differentiated product.
Product Differentiation: Each firm offers a unique product that is somewhat different from others, allowing firms to have some control over prices.
Free Entry and Exit: Firms can easily enter or leave the market without significant barriers.
Non-Price Competition: Firms often compete through advertising, product quality, and branding, rather than through price alone.
Some Price Control: Due to product differentiation, firms have some degree of pricing power but face competition from close substitutes.
Elastic Demand: The demand curve for each firm’s product is relatively elastic, meaning a small change in price can significantly affect the quantity demanded.

11. What are the internal Economies of Scale?

Answer: Internal Economies of Scale refer to cost savings that a firm experiences as it increases its scale of production. These economies arise from the firm’s internal factors and the way it operates. Some key types of internal economies of scale include:

Technical Economies: Improved production techniques, machinery, and processes that reduce per-unit costs as output increases.
Managerial Economies: Larger firms can afford to hire specialized managers, which increases efficiency.
Financial Economies: Larger firms may obtain finance at lower interest rates, improving their financial efficiency.
Marketing Economies: Bigger firms can spread marketing costs over a larger output, reducing the per-unit marketing cost.
Purchasing Economies: Bulk buying of raw materials allows firms to negotiate lower prices, reducing costs.

12. What are the determining factors of Real Wages?

Answer: Real wages refer to the income of workers adjusted for inflation. They represent the purchasing power of wages. The factors that determine real wages include:

Productivity of Labor: Higher worker productivity leads to higher wages because workers can produce more goods and services, which generates more value for employers.
Supply and Demand for Labor: The availability of workers and the demand for their skills influence real wages. A shortage of skilled labor can push wages up.
Cost of Living: A rise in the cost of living leads to an increase in real wages to maintain workers’ purchasing power.
Minimum Wage Laws: Government-imposed wage floors can influence the level of real wages.
Bargaining Power: Workers’ ability to negotiate wages through unions or individual bargaining affects real wages.
Inflation: Inflation erodes the purchasing power of wages, which means higher nominal wages are needed to maintain real wages.

13. List out various items of Public Expenditure.

Answer: Public Expenditure refers to the spending by the government on goods and services for the benefit of the public. Various items of public expenditure include:

Defense and Security: Spending on military and police forces for national security and law enforcement.
Public Welfare: Expenditure on health care, education, unemployment benefits, pensions, and other social services.
Infrastructure Development: Spending on transportation (roads, railways), utilities (electricity, water), and other public infrastructure projects.
Debt Repayment: Payments made by the government to service national debt (interest and principal).
Public Administration: Expenses related to the functioning of government offices and civil services.
Environmental Protection: Spending on programs aimed at protecting the environment, such as pollution control and wildlife preservation.
Subsidies: Government grants to support specific industries or sectors, such as agriculture or energy.
Research and Development: Investment in scientific research and innovation.

14. What are the factors that determine National Income?

Answer: National Income is the total monetary value of all goods and services produced within a country in a given time period. The factors that determine national income include:

Labor Force: The size and skill level of the workforce directly affect national income.
Capital: The quantity and quality of capital (machinery, buildings, etc.) available for production contribute to higher output.
Technology: Technological advancements increase productivity and therefore the national income.
Natural Resources: The availability and efficient use of natural resources (minerals, land, etc.) impact the production capacity.
Government Policies: Fiscal and monetary policies, including taxes, subsidies, and government spending, can influence national income.
Foreign Trade: Exports and imports affect national income, as exports contribute to income while imports can reduce domestic production.
Investment: Investment in infrastructure, industries, and services boosts national income by increasing the productive capacity of the economy.

15. What is Statistics? Explain its relationship with Economics.

Answer: Statistics is the science of collecting, analyzing, interpreting, and presenting numerical data. It involves methods for organizing data, drawing inferences from data, and making decisions based on this data.

Relationship with Economics:

Data Collection: Economics relies heavily on statistical data for studying trends, consumer behavior, production, and income distribution.
Analysis of Economic Problems: Economists use statistical methods to test hypotheses, analyze patterns, and develop economic models.
Economic Planning: Government uses statistics to design policies for national income, employment, inflation, and growth.
Forecasting: Econometric models (statistical models used in economics) are used for forecasting future economic conditions.

16. Explain the Primary and Secondary functions of Money.

Answer: Primary Functions of Money:

Medium of Exchange: Money is used to facilitate the exchange of goods and services.
Unit of Account: Money provides a common measure for valuing goods and services, making it easier to compare prices.
Store of Value: Money allows individuals to store purchasing power for future use.

Secondary Functions of Money:

Standard of Deferred Payments: Money is used to settle debts or obligations that are to be paid in the future.
Transfer of Value: Money can be used to transfer value from one individual or place to another (e.g., through payments or remittances).
Measure of Value: Money serves as a measure of the relative value of different goods and services.

17. What is Mode? What are its Merits and Drawbacks?

Answer: Mode is a statistical measure of central tendency that represents the value that occurs most frequently in a given data set.

Merits:

Simplicity: The mode is easy to calculate and understand.
Applicable to Non-Numeric Data: It can be used for categorical or nominal data where other measures of central tendency (like mean or median) are not applicable.
Robust to Extreme Values: Unlike the mean, the mode is not affected by extremely high or low values.

Drawbacks:

Not always unique: Some datasets may have more than one mode (bimodal or multimodal).
Less informative: It may not provide a clear picture of the data’s overall distribution, especially in skewed distributions.
Limited to Frequency: The mode only focuses on the most frequent value, ignoring other important aspects of the dataset.

SECTION C

Note: (i) Answer ANY FIFTEEN of the following questions in 5 lines each.

(ii) Each question carries TWO marks

18. What is Microeconomics?

Answer: Microeconomics is the branch of economics that deals with the behavior of individual households, firms, and industries, and how they make decisions regarding the allocation of limited resources. It focuses on the supply and demand within individual markets, consumer choices, production, pricing, and the distribution of goods and services.

Key areas of study in microeconomics include:

Demand and Supply Analysis: Understanding how the price and quantity of goods are determined in the market.
Consumer Behavior: How consumers make choices to maximize utility given their budget constraints.
Production and Costs: How firms decide what to produce and the costs associated with production.
Market Structures: Different market types, including perfect competition, monopoly, monopolistic competition, and oligopoly.
Factor Markets: The markets for inputs like labor, capital, and land.

19. Draw the Indifference Map.

Answer: An Indifference Map is a graphical representation of a consumer’s preferences. It consists of a series of indifference curves, each showing different combinations of two goods that provide the consumer with the same level of satisfaction or utility.

Key Points:

Indifference Curve: A curve that shows all the combinations of two goods that give the consumer the same level of satisfaction.
Higher Curves: Curves further away from the origin represent higher levels of satisfaction.
Downward Sloping: Indifference curves typically slope downwards, reflecting the trade-off between the goods.
Convex to the Origin: Indifference curves are usually convex to the origin, indicating diminishing marginal rate of substitution.

Graphically: The axes represent quantities of two goods (e.g., Good X on the horizontal axis and Good Y on the vertical axis). Each curve shows combinations of X and Y that yield the same utility.

20. Explain Capital Goods.

Answer: Capital Goods are physical assets or resources used by businesses in the production of other goods and services. These goods are not directly consumed but are used to produce consumer goods and services.

Examples include:

Machinery: Machines used in factories to produce goods.
Buildings: Factories, warehouses, and office buildings used in business operations.
Tools and Equipment: Items like computers, vehicles, or tools that help in production.
Infrastructure: Roads, railways, and power plants that support business activities.

Importance:

Capital goods are essential for increasing the productive capacity of an economy.
Investment in capital goods leads to greater efficiency and growth.

21. What is Price Line / Budget Line?

Answer: A Price Line or Budget Line represents all possible combinations of two goods that a consumer can buy given their income and the prices of the goods. It shows the trade-off between the two goods while staying within the budget constraint.

Formula:

$P_X \cdot X + P_Y \cdot Y = I$

Where:

$P_X$
$X$
$I$

Key Points:

The budget line shows the maximum amount of one good that can be bought for each possible level of the other good.
The slope of the budget line represents the opportunity cost of one good in terms of the other (the rate at which one good can be substituted for another while maintaining the same budget).

22. What is Demand Function?

Answer: A Demand Function represents the relationship between the quantity of a good or service demanded and its price, along with other factors such as income, tastes, and the prices of related goods.

Mathematically, it is expressed as:

$Q_d = f(P, I, T, P_r)$

Where:

$Q_d$
$P$
$I$
$T$
$P_r$

A typical demand function assumes that as the price increases, the quantity demanded decreases, illustrating the Law of Demand.

23. What are Money Costs?

Answer: Money Costs refer to the actual expenditure incurred by a firm or individual in the production or consumption of goods and services. It includes the direct monetary expenses such as wages, raw materials, rent, and other costs that are measurable in terms of money.

Money costs can be classified into:

Fixed Costs: Costs that do not vary with the level of output, e.g., rent, salaries.
Variable Costs: Costs that vary with the level of output, e.g., raw materials, labor.
Total Costs: The sum of fixed and variable costs.

Money costs are important for determining pricing, profit margins, and the overall financial viability of a business.

24. Explain Unitary Elastic Demand.

Answer: Unitary Elastic Demand refers to a situation where the percentage change in quantity demanded is exactly equal to the percentage change in price. In other words, the absolute value of the price elasticity of demand (PED) is equal to 1.

Mathematically, if the percentage change in quantity demanded equals the percentage change in price:

$\text{PED} = 1$

For example, if the price of a good increases by 10%, and as a result, the quantity demanded decreases by 10%, then the demand is unitary elastic.

Characteristics:

Total revenue remains constant when price changes in the case of unitary elasticity.
The demand curve for unitary elastic goods is neither steep nor flat but has a proportional relationship between price and quantity.

25. What are the Selling Costs?

Answer: Selling Costs refer to the expenses incurred by a business in promoting, advertising, and selling its products or services. These costs are associated with the efforts made to persuade consumers to purchase the goods.

Types of selling costs include:

Advertising and Promotion: Expenses on advertisements in media (TV, print, online).
Sales Salaries: Wages or commissions paid to salespeople.
Marketing Research: Costs of researching consumer preferences and market trends.
Sales Support and Distribution: Costs involved in packaging, transportation, and customer service.

Selling costs are important because they influence the pricing strategies and profitability of firms. High selling costs can lead to higher prices for consumers or reduced profits for firms.

26. Explain Cross Elasticity of Demand.

Answer: Cross Elasticity of Demand (CED) measures the responsiveness of the quantity demanded of one good to a change in the price of another good. It is calculated as:

$\text{Cross Elasticity of Demand} = \frac{\% \text{ Change in Quantity Demanded of Good A}}{\% \text{ Change in Price of Good B}}$

Types of Cross Elasticity of Demand:

Positive Cross Elasticity (Substitute Goods): If the price of Good B rises, the quantity demanded of Good A increases (e.g., tea and coffee). This indicates that the two goods are substitutes.
Negative Cross Elasticity (Complementary Goods): If the price of Good B rises, the quantity demanded of Good A decreases (e.g., cars and gasoline). This indicates that the two goods are complements.
Zero Cross Elasticity (Unrelated Goods): If the change in the price of Good B does not affect the demand for Good A, the goods are unrelated.

Importance: Cross elasticity helps firms understand how changes in the prices of related goods will impact the demand for their products, enabling them to make informed pricing and production decisions.

27. What is Contract Rent?

Answer: Contract Rent refers to the agreed-upon rent that is specified in a lease agreement or contract between a landlord and a tenant. It is the fixed amount that the tenant is required to pay periodically (monthly, annually) for the use of a property. Contract rent is determined at the start of the lease and remains constant or follows terms set in the agreement, regardless of changes in market conditions or the value of the property.

28. Expand C.S.O. What is its responsibility?

Answer: C.S.O. stands for Central Statistical Organisation. It is an agency of the Government of India responsible for coordinating and overseeing statistical activities across the country. The main functions of the CSO include:

Collection and compilation of statistical data: The CSO collects, compiles, and disseminates national statistical data on various sectors such as economy, employment, inflation, and population.
National Income Accounting: The CSO is responsible for calculating India’s national income, GDP, and related economic indicators.
Conducting Surveys: It conducts surveys to gather data on various economic and social aspects of India.
Publication of Reports: The CSO publishes annual reports and statistical bulletins on important economic and social statistics.

29. What is Net Interest?

Answer: Net Interest is the difference between the total interest earned on investments or loans and the interest paid on debts or liabilities. In the context of banking or finance, it refers to the interest income earned by a financial institution after accounting for the interest paid on deposits, loans, or bonds issued by the institution.

Formula:

$\text{Net Interest} = \text{Interest Earned} – \text{Interest Paid}$

Net interest is an important indicator of a bank’s profitability and financial health.

30. What is a Budget?

Answer: A Budget is a financial plan that outlines expected income and expenditures over a specified period of time, typically annually. It is used by individuals, businesses, and governments to manage their finances, allocate resources, and set financial goals. Budgets help ensure that spending does not exceed income, allowing for financial stability.

Key components of a budget:

Income: Sources of revenue or earnings.
Expenditures: Expected costs and expenses, both fixed and variable.
Surplus or Deficit: The difference between income and expenditure. A surplus occurs when income exceeds expenditures, while a deficit happens when expenditures exceed income.

31. What is Clearance House?

Answer: A Clearance House is a financial institution or system that facilitates the settlement of payments between banks, clearing and reconciling financial transactions. The main function of a clearance house is to match and clear payment instructions and ensure that funds are transferred correctly between parties, typically in interbank transactions.

In simpler terms, it acts as an intermediary that ensures all financial transactions are settled efficiently and accurately. Clearing houses are commonly used in the settlement of checks, securities, or other financial instruments.

32. Write, in brief, about GST.

Answer: GST stands for Goods and Services Tax. It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition in the production and distribution process. GST replaces various indirect taxes like VAT, service tax, excise duty, and more, with a single unified tax structure.

Key features of GST:

Single Tax Structure: It simplifies the indirect tax system by merging multiple taxes into one.
Tax on Value Addition: GST is levied at each stage of the supply chain on the value added.
Destination-Based Taxation: GST is collected at the point of consumption rather than production.
Four Tax Slabs: Goods and services are taxed at different rates: 5%, 12%, 18%, and 28%.

GST aims to create a uniform tax system, increase tax compliance, and reduce the cascading effect of taxes.

33. What is a Pie-diagram?

Answer: A Pie Diagram (or Pie Chart) is a circular graphical representation of data, where the circle is divided into slices to illustrate numerical proportions. Each slice represents a category’s contribution to the whole. The size of each slice is proportional to the value it represents.

Uses:

It is commonly used to show relative percentages or proportions of different categories within a dataset.
Each sector of the pie chart is labeled with the corresponding category and its percentage.

Pie diagrams are visually appealing and easy to understand, but they are best suited for datasets with a limited number of categories.

34. What is Token Money?

Answer: Token Money refers to a type of money whose value is less than the value printed on the coin or note. It usually has no intrinsic value and is issued by a government or financial authority as a form of legal tender. Token money is primarily used for transactions, and its value is based on the trust in the issuer rather than the material value of the money itself.

Examples of token money:

Coins made of inexpensive metals such as copper or aluminum.
Paper currency, which has no intrinsic value but is accepted for trade due to its legal status.

35. Explain the concept of Harmonic Mean?

Answer: The Harmonic Mean (H.M.) is a type of average that is used when dealing with rates or ratios. It is calculated by taking the reciprocal of the arithmetic mean of the reciprocals of the data values.

Formula:

$H.M. = \frac{n}{\frac{1}{x_1} + \frac{1}{x_2} + \cdots + \frac{1}{x_n}}$

Where:

$x_1, x_2, \ldots, x_n$
$n$

The harmonic mean is particularly useful when averaging rates, such as speed or efficiency, where the reciprocal of the quantities is more relevant.

36. What is Currency?

Answer: Currency is a medium of exchange that is issued by a government or central bank and is used as legal tender for transactions. It is typically made of paper or coins and is recognized as a valid means of payment for goods and services. Currency facilitates trade by providing a standardized method for exchanging value.

Key types of currency:

Physical Currency: Banknotes and coins.
Digital Currency: Electronic money used in online transactions (e.g., e-money, cryptocurrencies).

37. Compute median for the following data: 5, 7, 7, 8, 9, 10, 12, 15, and 21.

Answer: To calculate the median, we first need to arrange the data in ascending order (which is already done in this case):

Data: 5, 7, 7, 8, 9, 10, 12, 15, 21

Since the number of data points is odd (9), the median is the middle value, which is the value at position $\frac{9 + 1}{2} = 5$

Thus, the median is 9.