NTA UGC NET/JRF Exam, June 2020 Economics

These are referred to as impure Public goods - a package of Private good and Public good. Why consumers are willing to pay more for these goods is complex. Whatever the reason, it is clear some consumers are willing to pay for green actions that do not benefit them directly.

One example of green goods is ‘green electricity'. Green power is simply electricity produced using renewable sources of energy. Of course, electricity itself is completely indistinguishable from non-green electricity.

There are two ways in which consumers may buy green electricity; either by buying it directly or by contributing to the cost of building green electricity capacity.

Consumers are clearly willing to spend more for green electricity and their preference for green production is indicated by the recent rise in popularity of retail carbon offsets. Offsets of emissions have long been used by firms to buy and sell the obligation to reduce emissions.

In the USA, new emitters setting up a business in an urban area have to ‘offset' their emission additions by finding (and paying) existing firms to reduce their emissions. In recent years, firms have used offsets to effectively reduce their emissions in order to provide a green image, particularly in the case of carbon emissions.

The purchase of offsets, by consumers is different when consumers buy offsets. They are making a purely voluntary contribution to the environment. Retail offsets are a way in which consumers can produce a green product from a brown product.

For example, one can make his part of the flight carbon neutral by paying someone else to reduce his or her carbon emission. This is formalized in an offset market whereby sellers of offsets reduce emissions and then sell these 'reductions'.

An example of green good is:
A. White paper
B. Wind power
C. Forest products
D. Solar energy
Choose the correct answer from the options given below:

A. To reduce emissions
B. To provide green image
C. For emission addition
D. To satisfy consumer preferences
Choose the correct answer from the options given below:

The important point is that ensuring security and protection of property rights is a basic public good and this can be provided only by the government. The governments have the task of distributing incomes and alleviating poverty.

After the Great Depression and influenced by keynesian economics, public spending was assigned a central role. Thus, the role of public finance is inextricably linked to the role of the state. From merely ensuring safety, security and property rights, governments have expanded their activities to providing variety of public services with externalities.

The expansion has been a subject matter of debate. Musgrave considers that the expansion of the public sector has been necessary and constructive development and strong public sector is needed along with the capitalist market.

In constrast, Buchanan argues that dispute arises when the state expands to areas beyond the realm of boundaries of the protective state into a productive or tax-transfer state. a a In India, state intervention through public finance policy has to play an important role besides ensuring the safety and security of people and their property rights.

These include the need to overcome large social and physical infrastructure deficit, provide correctives to missing and imperfect markets, introduce measures to reduce actue inequalities and poverty and provide correctives to widespread information asymmetry.

Interventions are needed also to provide externalities in terms of market development, irrigation, storage and price support in agriculture to deal with market imperfections and supply volatility.

Similary, generalized externalities have to be ensured for the manufacturing and service sectors through competitive levels of infrastructure. India's public finance policies have enabled the government to play a catalytic role in the development of the economy as a whole.

In addition over the years, there has been a significant increase in transfers from the govenment such as for employment guarantee and food security, national housing scheme. Swachchh Bharat Abhiyan, Ujjawala Yojana's, Pradhan Mantri Kisan Samman Nidhi, periodic loan waives, etc.

Which one of the following objectives of public finance is NOT correct?

A. The expansion of the public sector has been a necessary and constructive development and a strong public sector is needed along with the capitalist market.
B. There are several reasons for the state to embrace a much larger role.
C. In India, state intervention through public finance policy has to play an important role.
D. Keynesian economic states that the state has to ensure full employment.
Choose the correct answer from the options given below:

A. Market development
B. Money supply
C. Storage and price support in agriculture
D. Irrigation
Choose the correct answer from the options given below: