CUET Economics 2026 PYQs20 May Shift 1. Free, no login required.

Inventory and Investment.

Inventories are treated as capital. Addition to stock of capital of a firm is known as investment. There can be three major categories of investment. Change in inventories may be planned or unplanned. In case, of an unexpected fall in sales, firm will have unsold stock of goods which it had not anticipated. Hence, there will be unplanned accumulation of inventories. In opposite case, where there is unexpected rise in sales, there will be unplanned decumulation of inventories.

What can be examples of planned accumulation or decumulation of inventories? Suppose firm wants to raise inventories from 100 shirts to 200 shirts during year. Expecting sales of 1100 shirts (1000 shirts during year as before), firm produces 1100 shirts (1000 + 100 =1100 shirts). If sales, are actually 1100 shirts (1000 shirts), then firm indeed ends up with a rise in inventories. The new stock of inventories is 200 shirts, which was indeed planned by firm. This rise is an example of planned accumulation of inventories. On the other hand, if firm had wanted to reduce inventories from 100 to 25, then it would produce 1100 shirts (1000-75 =925 shirts. This is because it plans to sell 75 shirts out of inventory of 100 shirts it started with ( so that inventory at ends of year becomes 100 -75 =25 shirts, which firm wants.). If sales, indeed turn out to be 1100 shirts (1000 as expected by firm, firm will be left with planned, reduced inventory of 25 shirts.

Inventory and Investment.

Inventories are treated as capital. Addition to stock of capital of a firm is known as investment. There can be three major categories of investment. Change in inventories may be planned or unplanned. In case, of an unexpected fall in sales, firm will have unsold stock of goods which it had not anticipated. Hence, there will be unplanned accumulation of inventories. In opposite case, where there is unexpected rise in sales, there will be unplanned decumulation of inventories.

What can be examples of planned accumulation or decumulation of inventories? Suppose firm wants to raise inventories from 100 shirts to 200 shirts during year. Expecting sales of 1100 shirts (1000 shirts during year as before), firm produces 1100 shirts (1000 + 100 =1100 shirts). If sales, are actually 1100 shirts (1000 shirts), then firm indeed ends up with a rise in inventories. The new stock of inventories is 200 shirts, which was indeed planned by firm. This rise is an example of planned accumulation of inventories. On the other hand, if firm had wanted to reduce inventories from 100 to 25, then it would produce 1100 shirts (1000-75 =925 shirts. This is because it plans to sell 75 shirts out of inventory of 100 shirts it started with ( so that inventory at ends of year becomes 100 -75 =25 shirts, which firm wants.). If sales, indeed turn out to be 1100 shirts (1000 as expected by firm, firm will be left with planned, reduced inventory of 25 shirts.

Inventory and Investment.

Inventories are treated as capital. Addition to stock of capital of a firm is known as investment. There can be three major categories of investment. Change in inventories may be planned or unplanned. In case, of an unexpected fall in sales, firm will have unsold stock of goods which it had not anticipated. Hence, there will be unplanned accumulation of inventories. In opposite case, where there is unexpected rise in sales, there will be unplanned decumulation of inventories.

What can be examples of planned accumulation or decumulation of inventories? Suppose firm wants to raise inventories from 100 shirts to 200 shirts during year. Expecting sales of 1100 shirts (1000 shirts during year as before), firm produces 1100 shirts (1000 + 100 =1100 shirts). If sales, are actually 1100 shirts (1000 shirts), then firm indeed ends up with a rise in inventories. The new stock of inventories is 200 shirts, which was indeed planned by firm. This rise is an example of planned accumulation of inventories. On the other hand, if firm had wanted to reduce inventories from 100 to 25, then it would produce 1100 shirts (1000-75 =925 shirts. This is because it plans to sell 75 shirts out of inventory of 100 shirts it started with ( so that inventory at ends of year becomes 100 -75 =25 shirts, which firm wants.). If sales, indeed turn out to be 1100 shirts (1000 as expected by firm, firm will be left with planned, reduced inventory of 25 shirts.

Inventory and Investment.

Inventories are treated as capital. Addition to stock of capital of a firm is known as investment. There can be three major categories of investment. Change in inventories may be planned or unplanned. In case, of an unexpected fall in sales, firm will have unsold stock of goods which it had not anticipated. Hence, there will be unplanned accumulation of inventories. In opposite case, where there is unexpected rise in sales, there will be unplanned decumulation of inventories.

What can be examples of planned accumulation or decumulation of inventories? Suppose firm wants to raise inventories from 100 shirts to 200 shirts during year. Expecting sales of 1100 shirts (1000 shirts during year as before), firm produces 1100 shirts (1000 + 100 =1100 shirts). If sales, are actually 1100 shirts (1000 shirts), then firm indeed ends up with a rise in inventories. The new stock of inventories is 200 shirts, which was indeed planned by firm. This rise is an example of planned accumulation of inventories. On the other hand, if firm had wanted to reduce inventories from 100 to 25, then it would produce 1100 shirts (1000-75 =925 shirts. This is because it plans to sell 75 shirts out of inventory of 100 shirts it started with ( so that inventory at ends of year becomes 100 -75 =25 shirts, which firm wants.). If sales, indeed turn out to be 1100 shirts (1000 as expected by firm, firm will be left with planned, reduced inventory of 25 shirts.

Inventory and Investment.

Inventories are treated as capital. Addition to stock of capital of a firm is known as investment. There can be three major categories of investment. Change in inventories may be planned or unplanned. In case, of an unexpected fall in sales, firm will have unsold stock of goods which it had not anticipated. Hence, there will be unplanned accumulation of inventories. In opposite case, where there is unexpected rise in sales, there will be unplanned decumulation of inventories.

What can be examples of planned accumulation or decumulation of inventories? Suppose firm wants to raise inventories from 100 shirts to 200 shirts during year. Expecting sales of 1100 shirts (1000 shirts during year as before), firm produces 1100 shirts (1000 + 100 =1100 shirts). If sales, are actually 1100 shirts (1000 shirts), then firm indeed ends up with a rise in inventories. The new stock of inventories is 200 shirts, which was indeed planned by firm. This rise is an example of planned accumulation of inventories. On the other hand, if firm had wanted to reduce inventories from 100 to 25, then it would produce 1100 shirts (1000-75 =925 shirts. This is because it plans to sell 75 shirts out of inventory of 100 shirts it started with ( so that inventory at ends of year becomes 100 -75 =25 shirts, which firm wants.). If sales, indeed turn out to be 1100 shirts (1000 as expected by firm, firm will be left with planned, reduced inventory of 25 shirts.

Agriculture and Environment

In our quest to increase agricultural production during the last five decades or so, we almost totally neglected the use of compost and completely switched over to chemical fertilisers. The result is that large tracts of productive land have been adversely affected, water bodies including ground water system have suffered due to chemical contamination and demand for irrigation has been going up year after year. Farmers, in large numbers all over the country, have again started using compost made from organic wastes of different types. In certain parts of the country, cattle are maintained only because they produce dung which is an important fertiliser and soil conditioner. Earthworms can convert organic matter into compost faster than the normal composting process. This process is now being widely used. Indirectly, the civic authorities are benefited too as they have to dispose reduced quantity of waste. With the advent of green revolution, the entire country entered into a frenzy to use more and more chemical pesticides higher yield. Soon, the advers impacts began to show, food products were contaminated, soil, water bodies and even groundwater were polluted with pesticides. Even milk, meat and fishes were found to be contaminated. To meet this challenge, efforts are on to bring in better methods of pest control. One such step is the use of pesticides based on plant products. Neem trees are proving to be quite useful. Several types of pest controlling chemicals have been isolated from neem and these are being used. Mixed cropping and growing different crops in consecutive years on the same land have also helped farmers.

Agriculture and Environment

In our quest to increase agricultural production during the last five decades or so, we almost totally neglected the use of compost and completely switched over to chemical fertilisers. The result is that large tracts of productive land have been adversely affected, water bodies including ground water system have suffered due to chemical contamination and demand for irrigation has been going up year after year. Farmers, in large numbers all over the country, have again started using compost made from organic wastes of different types. In certain parts of the country, cattle are maintained only because they produce dung which is an important fertiliser and soil conditioner. Earthworms can convert organic matter into compost faster than the normal composting process. This process is now being widely used. Indirectly, the civic authorities are benefited too as they have to dispose reduced quantity of waste. With the advent of green revolution, the entire country entered into a frenzy to use more and more chemical pesticides higher yield. Soon, the advers impacts began to show, food products were contaminated, soil, water bodies and even groundwater were polluted with pesticides. Even milk, meat and fishes were found to be contaminated. To meet this challenge, efforts are on to bring in better methods of pest control. One such step is the use of pesticides based on plant products. Neem trees are proving to be quite useful. Several types of pest controlling chemicals have been isolated from neem and these are being used. Mixed cropping and growing different crops in consecutive years on the same land have also helped farmers.

Agriculture and Environment

In our quest to increase agricultural production during the last five decades or so, we almost totally neglected the use of compost and completely switched over to chemical fertilisers. The result is that large tracts of productive land have been adversely affected, water bodies including ground water system have suffered due to chemical contamination and demand for irrigation has been going up year after year. Farmers, in large numbers all over the country, have again started using compost made from organic wastes of different types. In certain parts of the country, cattle are maintained only because they produce dung which is an important fertiliser and soil conditioner. Earthworms can convert organic matter into compost faster than the normal composting process. This process is now being widely used. Indirectly, the civic authorities are benefited too as they have to dispose reduced quantity of waste. With the advent of green revolution, the entire country entered into a frenzy to use more and more chemical pesticides higher yield. Soon, the advers impacts began to show, food products were contaminated, soil, water bodies and even groundwater were polluted with pesticides. Even milk, meat and fishes were found to be contaminated. To meet this challenge, efforts are on to bring in better methods of pest control. One such step is the use of pesticides based on plant products. Neem trees are proving to be quite useful. Several types of pest controlling chemicals have been isolated from neem and these are being used. Mixed cropping and growing different crops in consecutive years on the same land have also helped farmers.

Agriculture and Environment

In our quest to increase agricultural production during the last five decades or so, we almost totally neglected the use of compost and completely switched over to chemical fertilisers. The result is that large tracts of productive land have been adversely affected, water bodies including ground water system have suffered due to chemical contamination and demand for irrigation has been going up year after year. Farmers, in large numbers all over the country, have again started using compost made from organic wastes of different types. In certain parts of the country, cattle are maintained only because they produce dung which is an important fertiliser and soil conditioner. Earthworms can convert organic matter into compost faster than the normal composting process. This process is now being widely used. Indirectly, the civic authorities are benefited too as they have to dispose reduced quantity of waste. With the advent of green revolution, the entire country entered into a frenzy to use more and more chemical pesticides higher yield. Soon, the advers impacts began to show, food products were contaminated, soil, water bodies and even groundwater were polluted with pesticides. Even milk, meat and fishes were found to be contaminated. To meet this challenge, efforts are on to bring in better methods of pest control. One such step is the use of pesticides based on plant products. Neem trees are proving to be quite useful. Several types of pest controlling chemicals have been isolated from neem and these are being used. Mixed cropping and growing different crops in consecutive years on the same land have also helped farmers.

Agriculture and Environment

In our quest to increase agricultural production during the last five decades or so, we almost totally neglected the use of compost and completely switched over to chemical fertilisers. The result is that large tracts of productive land have been adversely affected, water bodies including ground water system have suffered due to chemical contamination and demand for irrigation has been going up year after year. Farmers, in large numbers all over the country, have again started using compost made from organic wastes of different types. In certain parts of the country, cattle are maintained only because they produce dung which is an important fertiliser and soil conditioner. Earthworms can convert organic matter into compost faster than the normal composting process. This process is now being widely used. Indirectly, the civic authorities are benefited too as they have to dispose reduced quantity of waste. With the advent of green revolution, the entire country entered into a frenzy to use more and more chemical pesticides higher yield. Soon, the advers impacts began to show, food products were contaminated, soil, water bodies and even groundwater were polluted with pesticides. Even milk, meat and fishes were found to be contaminated. To meet this challenge, efforts are on to bring in better methods of pest control. One such step is the use of pesticides based on plant products. Neem trees are proving to be quite useful. Several types of pest controlling chemicals have been isolated from neem and these are being used. Mixed cropping and growing different crops in consecutive years on the same land have also helped farmers.