TN State Board 12th Economics Question Paper 2024

The sum of the Marginal Propensity to Consume (MPC) and the Marginal Propensity to Save (MPS) is always 1. This is because any additional unit of income earned by a consumer must either be spent (MPC) or saved (MPS). Therefore, MPC + MPS = 1. Options A, C, and D are mathematically incorrect based on Keynesian consumption theory.

GST (Goods and Services Tax) is an indirect tax that replaced various multiple indirect taxes, primarily acting as a comprehensive Sales tax or Value Added Tax (VAT) on the supply of goods and services. Income tax, Corporation tax, and Local taxes are different categories of taxation that do not function as the primary equivalent of GST.

Structural unemployment arises from shifts in the structure of an economy, such as changes in technology, consumer demand, or resource availability. This is a common feature in a dynamic society where constant innovation and economic shifts occur. It is less relevant in a static or socialist society where the labor market is less driven by rapid structural transformation.

A Capitalist Economy (or Market Economy) is defined by the private ownership of the means of production, where decisions are driven by profit motive and market forces. Socialist economies rely on public ownership, and mixed economies involve a blend of both. Globalist is not an economic system type defined by ownership.

Correlation measures the relationship between two variables. When variables move in the same direction (i.e., when one increases, the other increases), it is termed a positive correlation. Negative correlation refers to variables moving in opposite directions.