RAJIV INTERNATIONAL SCHOOL

PRE BOARD- 1 (2024-25)

CLASS: XII
SUBJECT:
SAMPLE QUESTIONECONOMICS (SET-1)
PAPER (2023-24)

ECONOMICS (030) CLASS XII

TIME: 3 HOURS M.M. – 80

GENERAL INSTRUCTIONS:
1. This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development
2. This paper contains 20 Multiple Choice Questions of 1 mark each.
3. This paper contains 4 Short Answer Questions of 3 marks each to be answered in 60 to 80
words.
4. This paper contains 6 Short Answer Questions of 4 marks each to be answered in 80 to 100
words.
5. This paper contains 4 Long Answer Questions of 6 marks each to be answered in 100 to 150
words.

Q.NO. MARKS
SECTION A – MACRO ECONOMICS

1 Read the following statements carefully:

Statement 1: Consumption function assumes that, consumption changes at a constant rate as
income changes.
Statement 2: Autonomous consumption is the ratio of total consumption (C) to total income
(Y).
In light of the given statements, choose the correct alternative from the following:
a) Statement 1 is true and Statement 2 is false.
b) Statement 1 is false and Statement 2 is true.
c) Both Statements 1 and 2 are true.
d) Both Statements 1 and 2 are false. 1

2 For a closed economy (with no foreign trade), which one of the following is correct?
a) GDP = GNP b) GDP > GNP
c) GDP < GNP d) GDP + GNP=0 1

3 The value of __________ can be greater than one.

(Choose the correct alternative to fill up the blank)
a) Marginal Propensity to Consume b) Average Propensity to Consume
c) Marginal Propensity to Save d) Average Propensity to Save 1

4 As per the Reserve Bank of India (RBI) press report, dated 29th December, 2022:
"Net external commercial borrowings to India recorded an outflow of US$ 0.4 billion in the
second quarter (2022-23)"
The above transaction will be recorded in the _______ account on ______ side of
Balance of payments account of India. (Choose the correct alternative to fill up the blanks)
a) current, credit b) current, debit
c) capital, credit d) capital, debit 1
1
5 “The value of all goods and services can be expressed in monetary units.”
On the basis of the given statement, identify the function performed by money:
a) Medium of exchange b) Store of Value
c) Unit of account d) Means of standard of deferred payments 1

6 Find the missing figures and choose the correct alternative:

Round Deposits Loans (80%) Reserve Ratio (20%)

I 1,000 800 200

II 800 ….(i)…. 160

.. .. ..

.. .. ..

Total …(ii)… …(iii)… …(iv)…

Alternatives:
a) 640,1000,4000,5000 b) 960,5000,4000,1000
c) 640,4000,1000,5000 d) 640,5000,4000,1000 1

7 Graphically, Aggregate Demand function can be obtained by vertically adding the

_________ and _________ function.(Choose the correct alternative to fill up the blanks)
a) consumption, saving
b) consumption, investment
c) investment, saving
d) aggregate supply, consumption 1

8 Identify the correct reason(s) that may affect the demand for foreign exchange in an
economy.
I. Imports of visibles
II. Exports of invisibles
III. Remittances by residents working abroad
IV. Purchase of assets abroad
Alternatives:
a) I and II b) II and III
c) III and IV d) I and IV 1

9 Suppose for a given economy,

S= -60 + 0.1Y
I= ₹ 4,000 crore
(Where S = Saving Function, Y = National Income and I = Investment Expenditure)
Equilibrium level of Income would be ₹ ______ crore.
(Choose the correct alternative to fill up the blank)

2
 Alternatives:
a) 4,000 b) 40,000
c) 40,600 d) 60,400 1

10 Read the following chart carefully and choose the correct alternative:

Capital
Account

External External
Investments
Borrowings Assistance

Direct
Investment _______

Alternatives:
a) Interest received on loans b) Multilateral Loans
c) Portfolio Investment d) Government Aid 1

11 ‘Current account deficit in an economy must be financed by a corresponding capital account

surplus’. 3
Do you agree with the given statement?
statement Give valid reason(s) in support of your answer.

12 (A) On the basis of the given data, estimate the value of Domestic Income:

S. No. Items Amount

(₹in
in crore)
i. Household Consumption
onsumption Expenditure 600
ii. Gross Fixed Capital Formation 200
iii. Change in stock 40
3
iv. Government Final C Consumption Expenditure 200
v. Net Exports (-)40
vi. Net Indirect Taxes 120
vii. Net Factor Income FFrom Abroad 20
viii. Consumption of Fixed Capital 40

OR
(B) State the meanings of the following:
3
(i) Externalities (ii) Operating Surplus (iii)Consumption
Consumption Goods

13 For a hypothetical economy, the government incurs an investment expenditure of ₹ 1,000

crore. If the value of Marginal Propensity to Save (MPS) falls from 0.25 to 0.10.
0.10
Calculate the value of increase in income due to change in the value of Marginal Propensity 4
to Save (MPS).

3
14 (A) "In an economy, ex-ante Aggregate Demand is more than ex-ante Aggregate Supply."
Elaborate the possible impact of the same, on the level of output, income and employment. 4
OR
(B) “With an objective to reduce inflation, Reserve Bank of India may promote the
commercial banks to park their surplus funds with it.” 4
Discuss the rationale behind the step taken by the Reserve Bank of India.

15 Elaborate the ‘Banker’s Bank and Supervisor’ function performed by the Reserve Bank of
India. 4

16 (A) On the basis of the given information, calculate the value of:
(i) Fiscal deficit 3
(ii) Primary deficit 2
S.No. Items 2021-22
(₹in crore)
(i) Revenue Receipts 20
(ii) Capital Expenditure 15
(iii) Revenue Deficit 10
(iv) Non-debt creating capital receipts 50% of revenue receipts
(v) Interest Payments 4
(B) State any two features of public goods. 1
OR
(C) Explain the economic stability objective of Government Budget. 3

(D) ‘Under the Ayushmaan Bharat Scheme, the Government provides free medicines to the
economically backward section of the society’.
Identify and discuss the nature of the government expenditure indicated in the given 3
statement.

17 (a) Giving valid reasons, explain how the following would be treated while estimating
domestic income?
(i) Payment made by American tourist for goods purchased in India. 3
(ii) Tomatoes grown by Ms. Puja in her kitchen garden.

(b) "Machine purchased by a firm is always a capital good." Do you agree with the given 3
statement? Give valid reasons for your answer.

SECTION B – INDIAN ECONOMIC DEVELOPMENT

18 Identify the correct combination of the ‘Goals of Indian Five Year Plans’:
a) Growth, Equality, Modernisation, Self-Reliance
b) Development, Equality, Modernisation, Sustainability
c) Good Health, Education, Modernisation, Sustainability
d) Growth, Equity, Modernisation, Self-Reliance 1

4
19 ‘China
China has performed exceedingly well in various health and economic indicators
indicators’.
Identify which of the following is not a health indicator?
a) Infant Mortality Rate (per 1000 live births)
b) Life Expectancy at Birth (years)
c) Percentage of people below poverty line (National)
d) Maternal Mortality Rate (per 1 lakh births) 1

20 The shackles of agriculture during the colonial rule were permanently broken by the Green
Revolution that resulted from the application of ___
___. (Choose the correct alternative to fill up the blank)
I. High Yielding Varieties (HYV)
II. Mechanization of Agriculture
III. Chemical Fertilizers and Pesticides
IV. Organic Fertilizers and Pesticides
Alternatives:
a) I, II, IV b) I, II, III
c) II, III, IV d) I, III, IV 1

21 Study the following picture and answer the given question:

Women in rural households take up bee

bee-keeping as an entrepreneurial activity. Such kind of
activities may be envisaged under _________ as diversification activity.
(Choose the correct alternative to fill up the blank)
a) Animal husbandry b) Fisheries
c) Horticulture d) Poultry 1

22 Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative
from those given below.
Assertion (A): In 1991, as an immediate measure to resolve the Balance of Payments crisis,
the rupee was devalued against foreign currencies.
Reason (R): Devaluation of currency was eminent, to replenish the deteriorated foreign
exchange reserves.
Alternatives:
a)Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A).
b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of Assertion (A).
c) Assertion (A) is true, but Reason (R) is false.
d) Assertion (A) is false, but Reason (R) is true. 1

5
23 Under _________ in China, farmers and industrial units were required to buy and sell fixed
quantities of inputs and outputs on the basis of prices fixed by the government and the rest
were purchased and sold at market prices.
(Choose the correct alternative to fill up the blank)
a) Commune System b) Great Leap Forward 1
c) Dual Pricing d) Great Proletarian Cultural Revolution

24 Micro credit programmes play a vital role in ensuring an overall development of the rural
economy as they____________.(Choose the correct alternative to fill up the blank)
(i) provide financial support
(ii) lead to women empowerment
(iii) enhance the reach of formal credit system
Alternatives:
a) (i) and (ii) b) (ii) and (iii) 1
c) (i) and (iii) d) (i), (ii) and (iii)

25 _______may be defined as the measure of the extent of demographic participation in the

social and political decision making.
(Choose the correct alternative to fill up the blank)
a) Economic indicator b) Liberty indicator
c) Health indicator d) Demographic indicator 1

26 Read the following statements carefully:

Statement 1: The nature of unemployment problem in India is uni-faceted.
Statement 2: Worker-Population ratio is an indicator used for analysing the employment
situation in a country.
In light of the given statements, choose the correct alternative from the following:
a) Statement 1 is true and Statement 2 is false.
b) Statement 1 is false and Statement 2 is true.
c) Both Statements 1 and 2 are true.
d) Both Statements 1 and 2 are false 1

27 From the set of the events given in column I and corresponding facts given in Column II,
choose the correct pair of statements:
Column I Column II
A. Adoption of mixed economic I. The common development policy of
system India and China
B. Introduction of economic II. Imposed by World Bank
reforms in China
C. Great Leap Forward Campaign III. Focussed on massive industrialization
D. First Five Year Plan of Pakistan IV. Announced in 1953
Alternatives:
a) A-I b) B-II
c) C-III d) D-IV 1

6
28 (A) “During the colonial period, a number of socio-economic
socio economic indicators were in a dilapidated
state.” 3
List any three such indicators that led to the worsening of India’s demographic profile.
OR
(B) “The pre-independent
independent India’s occupational structure experienced growing regional 3
variation.”
Justify the above statement with valid explanation.

29 “Ravya
Ravya was initially working as an office clerk in a firm. In the pursuit to attain,
attain a higher
position and income, she attended a few on-the-job
on job training sessions. These sessions
contributed positively to her skills and expertise.”
Explain the impact of Ravya’s decision on human capital formation. 3

30 “In the late 1970s, China introduced the One

One-child
child policy that led to arrest in the population
coupled with skewed sex ratio.”
Justify the given statement with valid arguments in support of your answer. 4

31 (A) State and elaborate whether the following statements are true or false, with valid
arguments:
(i) Agricultural marketing is a process that ensures the transportation of various agricultural 2
commodities only.
(ii) Jan-Dhan Yojana has been a crucial step for financial resource mobilization in the 2
Indian economy.
OR
(B) “Since independence, the government has been playing an important role in generating
4
employment directly or indirectly.” Discuss.

32

Identify the situation depicted in the given image. Suggest the impact of the indicated
situation, on the Indian economy.

33 (A) Green revolution transformed India from a subsistent food grain economy to a food
surplus economy.” 3
Justify the statement, giving reasons in support of your answer.

(B) “In order to protect domestic industries, India followed the regime of restrictions on
3
imports.”

7
 Briefly outline and discuss such steps taken by the government to promote import
substitution policy.
OR
(C) “In India, after 1947 land reforms were introduced on a large scale.” 3
In the light of the given statement, discuss any one such land reform.

(D) “In the post-reform period, the Government of India decided to retain profit-making
Public Sector Undertakings (PSUs). It provided a special status to PSUs to enable them to
3
expand in the global market.”
Do you agree with the given statement? Give valid reasons in support of your answer.

34 Read the following text carefully:

Sustainable development is the development that meets the needs of the present, without
compromising the ability of future generations to meet their own needs. India is critical in
determining the success in a pursuit to achieve sustainable development.
The Union Budget 2023 presented by Finance Minister Nirmala Sitharaman builds on India’s
commitment to lead the global action against climate change, preserve biodiversity and
support sustainable development.
The government has accelerated the pace of Green Growth as India is facing the grave reality
of depleting natural resources, limited supply of water, minerals, and fossil fuels. In a bid to
counter the climate threat, India has committed to achieving net zero by 2070; released a
low-carbon development strategy; and introduced the concept of ‘LiFE’ (Lifestyle for
Environment) to promote responsible consumption.
The Green Growth actions include several pointed measures that would facilitate the much-
needed steady decarbonization of Indian industries, reduce dependency on fossil fuel imports
and establish technology and market leadership in this sunrise sector. For instance:
The allocation of Rs 35,000 crore of priority capital investment towards achieving net zero
by 2070 and clean energy transition ensures the country’s energy security.
The outlay of Rs 19,700 crore for the Green Hydrogen Mission will mobilise a green
hydrogen production capacity of 5 metric million tonnes by 2030.
Moreover, to encourage the optimal use of wetlands, enhance biodiversity, carbon stock,
eco-tourism opportunities and income generation for local communities, the Amrit Dharohar
scheme will be implemented over three years.
Source: https://economictimes.indiatimes.com/industry/renewables/view-budget-2023-ensured-india-is-primed-for-green-growth

On the basis of the given text and common understanding, answer the following questions:
(i) Define sustainable development. 2
(ii) Briefly elaborate, any two reasons behind the objective of Green Growth being set up by 4
the Indian Government.