Happy convent public senior secondary school

12th Economics

Preboard

Time: 3 Hours M.M:80

General Instructions:
1. This question paper contains two parts:
Part A - Macro Economics (40 marks)
Part B - Indian Economic Development (40 marks).
2. Marks for questions are indicated against each question.
3. Question No. 1-10 and Question No. 18 – 27 (including two Case Based Questions) are 1-mark
questions and are to be answered in one word/sentence.
4. Case Based Questions (CBQ’s) are Question No. 7-10 and Question No. 25-27.
5. Question No. 11-12 and Question No. 28 – 29 are 3 marks questions and are to be answered in 60 -
80 words each.
6. Question No. 13-15 and Question No. 30 – 32 are 4 marks questions and are to be answered in 80-
100 words each.
7. Question No. 16-17 and Question No. 33 – 34 are 6 marks questions and are to be answered in 100-
150 words each.
Questions

Macroeconomics Marks
1.Value of Money Multiplier ……………… (increases/decreases/remains unchanged) with an increase in
Cash Reserve Ratio. (Fill up the blank with correct alternative) 1

2 Define an intermediate good. 1

3 What is the relation between marginal propensity to save and multiplier? 1

4 Name any two quantitative tools to control credit creation in an economy. 1

5 Under moral suasion, the RBI instructs commercial banks to channelise credit to the priority sector.
State whether the statement is true or false. Give reason. 1

6 Bank rate is for

a. Commercial banks by the government b. Commercial banks by the central bank

c. Central banks by the government d. Central bank by the commercial banks 1

7 State whether the given statement is true or false:

‘Managed Floating Exchange Rate is decided by market forces but remains within a specific range as
decided by the Central bank’. 1

8 Fiscal deficit is equal to borrowings. It is

1) False 2) True 3) Can’t say 4) Insufficient information 1

9 What are the two main components of Balance of payment account? 1

10 Government expenditure on Mid-Day Meal schemes running in government (state run) schools is a
type of ……………….………. expenditure in the government budget. (Fill up the blank with correct answer) 1

11 Giving reason identifies the following as final expenditure or intermediate expenditure.

(a) Expenditure on maintenance of office buildings.

(b) Expenditure on improvement of a machine in a factory. 3

12 Given below is the saving function of an economy:

S = -200 + 0.5Y

With the help of a numerical example, show that as the income increases, the APS also increases. 3

13 If the total deposit created by the commercial banks in Rs 20,000 crores and the primary deposit is
Rs. 2,500 crores, what is the value of money multiplier and reserve ratio? 4

14 “Foreign Institutional Investors (FIIs) remained net sellers in the Indian capital markets over the last
few weeks”. - The Economic Times. State and discuss the likely effects of the given statement on foreign
exchange rate with reference to the Indian Economy.

Or

‘Many large Multinational Corporations (MNCs) have recently shifted their investments from China and
have started their production in India, thereby boosting the Make in India plans of the Government’.
Presuming other factors being constant, discuss the effects of the given statement on Foreign Exchange
rates with reference to the Indian Economy. 4

15 Explain the allocation function of the government budget. 4

16 a) ‘Real Gross Domestic Product is a better indicator of economic growth than Nominal Gross
Domestic Product’. Do you agree with the given statement? Support your answer with a suitable
numerical example. 6

b) Calculate ‘Depreciation on Capital Asset’ from the following data

S. No particular AMOUNT

1 Capital value of the asset 1000cr

2 Estimated life of the asset 20yr

3 Scarp value Nil

17 Define investment multiplier, and explain the working of investment multiplier with additional
investment of Rs.1000 cr and 80% of increased income is spent on consumption. 6

Indian Economic Development

18 Name any two taxes which were subsumed in Goods and Services Tax (GST). 1
19 Find out which is not the correct reasons for the need of economic reforms India 1

a. Poor performance of public sector b. Inflation c. Surplus of Balance of Payment

d. Huge burden of debt

20 Which of the following economic reforms were taken up by the government under liberalisation
during the new economic reform era? 1

(a) Industrial sector reform (b) Tax reform (c) Financial sector reform (d) All of these

21 Agriculture marketing does not comprise of …………….… (Choose the correct alternative)

a) Transportation of the produce to the marketplace for sale.

b) Grading of the produce according to the quality.

c) Storage of the produce for sale in future.

d) Credit taken to meet expenditure on agriculture. 1

22 Under ………………………type of unemployment, marginal product gained by employing one additional

unit of labour is zero. (Fill up the blank with the correct answer) 1

23which of the following is not a biotic element

a)birds b)sunlight c)forest d)animals 1

24 Which of the following organisations regulates higher education in India?

(a) ICMR (b) AICTE (c) UGC (d) IMA 1

25 _____________ is the main reason for soil erosion.

a. Ozone depletion b. Air pollution c. Deforestation d. Noise pollution 1

26 Rank India, China, and Pakistan in terms of better value of human development index. 1

27 Introduction of Economic Reform in Pakistan took place in…………… (Choose the correct alternative) 1
a) 1978 b) 1980 c)1988 d) 1991

28 “Organic Farming has revolutionised the agriculture sector in India. Many people from urban areas
have moved to rural areas to opt for full time farming once again.” Identify a few limits and benefits of
organic farming in view of the statement above. 3

29 ‘Education Commission 1964-66 had recommended that at least 6 percent of GDP must be spent on
education’. How far India has been able to achieve the said goal? 3

30 “Subsidies put a heavy burden on the government’s finances, but are necessary for poor and
marginal farmers.” Defend or refute the given statement. 4

31 Define the following terms a) Disinvestment b) Import Substitution

OR
Define the following terms a) Outsourcing b) Quota 4

32 What is the important implication of one child norm in China? 4

33 Discuss the various remedial measures, which are needed to solve the problem of unemployment in
India. 6

34 Rapid expansion of the banking system in the rural areas had a positive effect on rural farms and
non-farm output, income, and employment. There are a number of problems faced by the agricultural
credit structure of the country. Discuss five problems faced in the rural banking system. 6