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26.

(i)

Current account deposits The bank does not pay any interest on deposit in this account. Saving account deposits Interest is paid on deposits is this account. (iii) Fixed/ term deposits

(ii)

Interest paid on such deposits is higher than the interest paid on deposits under saving account

27.

In current account, transactions relating to export and import of goods and services and transfer payment are recorded. In capital account transaction relating to international purchases and sales of assets are recorded. Import of machinery is included under import of goods and so it is recorded under current account.

(1)

(½) (½) (½) (½)

(½) (3)

28.

The central bank acts as a banker to the government. The government keeps its cash balance with the central bank. The central bank accepts receipts and makes payments for the government. It also provides short term credit facility to the government. It also manages the public debt. It also advises the government on banking and financial matters.

(4)

OR

(a)

Money is acceptable as means of exchange. A person can sell his goods or

services services

in exchange for money and can use this money for buying that he needs. Thus money acts as a medium of exchange,

the

goods

and

(2)

(b)

Deferred payments mean payments to be made in future. Money serves as a

standard for deferred payments. remains more or less stable.

Money

can

perform

this

function

only

if

its

value

(2)

29.

(a)

Y I

=K=

1 MPS

1000 1 250 MPS =

MPS = 0.25

MPC = 0.75 So MPC = 0.75

(1)

(b)

(c)

S = Y x MPS = 1000 x 0.25 = Rs. 250 Crores C = Y x MPC = 1000x0.75 = Rs. 750 Crores

(1)

(1)

(d)

K=

Y

I

=

1000

250

=4

(1)

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