CBSE Economics Class 12 NODIA Sample Paper 6 Page 1

Sample Paper 6
ECONOMICS (030)
Class XII Session 2023-24
Time: 3 Hours Max. Marks: 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 type questions of 1 mark each.
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered in 100 to 150 words.

Section A -Macro Economics

Multiple Choice Questions (Q1 to Q10) 1 ´ 10=10

1. “During January to November 2007, India experienced a rise in overseas investment amounting to a net $18.8
billion of stocks and bonds.”
This will be recorded in which account of balance of payments?
(a) Current account (b) Capital account
(c) Both (a) and (b) (d) Neither (a) nor (b)

2. Which of the following gives a correct definition of the term ‘near money’?
(a) Asset which has no store of value function.
(b) Asset which is a medium of exchange.
(c) Asset which has 100% liquidity.
(d) Asset which fulfils the store of value function and can be converted into a medium of exchange at a short
notice.

3. Credit creation by commercial banks is determined by _________ .

(a) Statutory Liquidity Ratio (SLR)
(b) Initial deposits
(c) Cash Reserve Ratio (CRR)
(d) All of these

4. Choose the correct statement from given below.

(a) Accommodating items are only recorded in capital account of BoP.
(b) Import of machinery will be recorded in capital account of BoP.
(c) Balance of trade records the exports and imports of invisible items.
(d) A surplus in BoT can rectify the deficit in BoP.

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Page 2 NODIA Sample Paper 6 CBSE Economics Class 12

5. Statement I : According to the theory of Keynesian Economics, the value of the Average Propensity to Consume
(APC) can never be zero.
Statement II : The Keynesian Aggregate Supply is perfectly elastic before the level of full employment is attained.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are false (b) Both statements are true
(c) Statement I is true and Statement II is false (d) Statement I is false and Statement II is true

6. The government of India has decided to vaccinate the adult population of India (with Covaxin/Covishield),
without any charge. This would be categorised as_________.
(a) revenue nature income (b) capital nature expenditure
(c) revenue nature expenditure (d) capital nature income

7. Analyse the following chart carefully and answer the given question

When money moves out of the circular flow of income, it is known as________
(a) Leakages (b) Dividends
(c) Injections (d) None of the above

8. Which of the following is correct?

(a) APC + APS = 1 (b) APC = C/Y
(c) MPC = 1 – MPS (d) All of these

9. Find the missing figures and choose the correct alternatives.

Consumption Saving Supply Aggregate
(C) (S) (C + S)
80 –80 0
240 ...(i)... 200
...(ii)... 0 400
560 40 ...(iii)...
...(iv)... 80 800
Alternatives
(a) –40, 600, 400, 560 (b) 40, 400, 600, 720
(c) –40, 400, 600, 720 (d) –40, 400, 800, 560

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CBSE Economics Class 12 NODIA Sample Paper 6 Page 3

10. Assertion : There is an inverse relationship between the value of investment multiplier and marginal propensity
to consume.
Reason : Saving is a leakage in the circular flow of income. Greater the savings, greater the leakage and lower the
value of investment multiplier.
In the light of the given statements, choose the correct alternative from the following
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

Short Answer Questions (Q11 to Q12) 3´2=6

11. Calculate Net National Product at Market Price from the following data
Items ` (in crores)
Net factor income from abroad (–) 5
Private final consumption expenditure 100
Personal tax 20
Gross national disposable income 170
Government final consumption expenditure 20
Corporation tax 15
Gross domestic capital formation 30
Personal disposable income 70
Net exports (–) 10
Savings of private corporate sector 5
Net national disposable income 145

12. India’s balance of payments is in disequilibrium. Enumerate some of the factors, which according to you, can be
the causes of disequilibrium.


o
What is meant by managed floating?

Short Answer Questions (Q13 to Q15) 4 ´ 3 = 12

13. In an economy, if initial investments are increased by ` 100 crores, discuss the working of investment multiplier
presuming marginal propensity to consume is 0.8.

14. “There are various components of money supply as used by the RBI”. Do you agree with the given statement?
Explain.

15. ‘Mission Develop India’ is the plan of government to create basic infrastructure. It comprises of projects on
irrigation, roads, housing, water supply and telecommunication connectivity.
Above stated example is a government expenditure or government revenue. Elaborate it. Also, state the impact
of this programme on rural growth.


o
Can a fiscal deficit occur without a revenue deficit?
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Page 4 NODIA Sample Paper 6 CBSE Economics Class 12

Long Answer Questions (Q16 to Q17) 6 ´ 2 = 12

16. (i) Explain the circular flow of income.

(ii) Distinguish between Real Gross Domestic Product and Nominal Gross Domestic Product.

17. (i) The figure given explains the working of a ‘reverse repo rate’ in context of a given economy. In simple terms,
explain how reverse repo rate helps in correcting the situation of ‘excess demand’?

(ii) What are the elements important in the determination of investment?

o
(i) Explain the concept of deflationary gap and the role of ‘open market operations’ in reducing this gap.
(ii) Using a well-labelled diagram, show how saving curve can be derived from consumption curve.

Section B -Indian Economic Development

Multiple Choice Questions (Q18 to Q27) 1 ´ 10=10

18. “Modernisation as a planning objective refers to the use of new and modern technology in production process.”
In the context of the given statement, which of the following is/are the components of modernisation a planning
objective?
(a) Modernisation in the technology
(b) Modernisation in the outlook
(c) Both (a) and (b)
(d) Neither (a) and (b)

19. Assertion : Government policies have failed to address the vast majority of vulnerable people who are living on
orjust above the poverty line due to unemployment.
Reason : High growth alone is not sufficient to reduce unemployment. Without the active participation of the poor,
successful implementation of any programme is not possible.
In the light of the given statements, choose the correct alternative from the following:
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

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CBSE Economics Class 12 NODIA Sample Paper 6 Page 5

20. Which of the following provides a correct explanation of rural development?

(a) Social and legal upliftment of rural areas
(b) Social and economic upliftment of rural areas
(c) Economic and legal upliftment of rural areas
(d) Social and technical upliftment of rural areas

21. The main objective of the zamindars during the land settlement system was to
(a) collect rent with no interest in the economic condition of the cultivators
(b) cooperate with colonial government to improve the condition of agriculture
(c) improve the economic condition of the cultivators
(d) improve the crop yield by making significant contributions in technology and fertilisers usage

22. ______ means designing and shaping the socio-economic processes in such a way so as to achieve an objective.
(a) Economic Planning
(b) Economic Growth
(c) Economic Process
(d) Economic Development

23. Arrange the given events in chronological order and choose the correct alternative
(i) Great Proletarian Cultural Revolution
(ii) Great Leap Forward Campaign
(iii) Introduction of Economic Reforms
(iv) First Five Year Plan
(a) (ii), (iv), (i), (iii)
(b) (ii), (iv), (iii), (i)
(c) (iv), (i), (ii), (iii)
(d) (iv), (ii), (i), (iii)

24. ________ has followed the classical development pattern of gradual shift from agriculture to manufacturing and
then to service.
(a) India
(b) China
(c) Pakistan
(d) All of these

25. Choose the correct pair

Column I Column II
A. Voluntary unemployment (i) Worker is willing to work but is not getting work
B. Involuntary unemployment (ii) Worker is not willing to work at existing wage rate
C. Frictional unemployment (iii) A worker is not getting work in a particular season
D. Disguised unemployment (iv) Marginal productivity of a worker is zero
Codes
(a) C-(iii) (b) D-(iv)
(c) A-(i) (d) B-(ii)

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Page 6 NODIA Sample Paper 6 CBSE Economics Class 12

26. Statement I : Institutional credit availability is imperative for development of rural areas.
Statement II : Reserve Bank of India is the apex institution in rural banking to regulate the banking system.
In the light of the given statements, choose the correct alternative from the following:
(a) Both the statements are correct
(b) Both the statements are incorrect
(c) Statement I is correct and Statement II is incorrect
(d) Statement II is correct and Statement I is incorrect

27. Observe the picture given below and choose the correct statement from the options given below.

(a) Investment in human capital reinforces GDP

(c) Health is the only component of human development
(d) Both (a) and (b)
(b) Both the statements are false

Short Answer Questions (Q28 to Q29) 3´2=6

28. The figure given below provides a snapshot of the report published by UN WOMEN and other associates. It asks
how the United Nations system, and each individual entity, can better support Member States to empower women
and promote women’s leadership in disaster and climate risk governance. On the basis of your understanding, can

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CBSE Economics Class 12 NODIA Sample Paper 6 Page 7

you comment on the relationship between ‘Empowering women, means employing women’.

29. Defend or refute the following statement with valid explanation.

‘Chinese structural reform process have always been appreciated for its success with no failures’.


o
Critically evaluate various strategies that have been adopted by the Chinese government for its growth and
development.

Short Answer Questions (Q30 to Q32) 4 ´ 3 = 12

30. State whether the following statements are true or false, with valid arguments :
(i) There has been a decline in growth rate of agricultural sector during the reform period.
(ii) There were several hurdles faced by the land reform and the land ceiling legislation during the pre-reform
period.

31. The following table shows distribution of workforce in India for the year 1972-73. Analyse it and give reasons for
the nature of workforce distribution.
Place of Residence Workforce (in millions)
Male Female Total
Rural 125 69 194
Urban 32 7 39

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Page 8 NODIA Sample Paper 6 CBSE Economics Class 12

32. “India, China and Pakistan have many similarities in their development strategies.” Elaborate.


o
(i) Define liberty indicators.
(ii) ‘China’s rapid industrial growth can be traced back to its reforms in 1978.’ Support the given statement with
valid explanation.

Long Answer Questions (Q33 to Q34) 6 ´ 2 = 12

33. (i) Differentiate between a worker, non-worker and an unemployed person.

(ii) Give two examples of overuse of environmental resources.
(iii) Give any two points of differences between physical and human capital.


o
(i) Read the given lines taken from the article on ‘Sustainable human development means living in harmony
with nature’ published by International Science Council on 17th July, 2020.
“We cannot be developed unless our lives become reconnected and in balance, cooperation and harmony with
nature.” In light of the given statement, explain how development has become a burden on the environment?
(ii) “Micro credit has an important role to play in meeting the credit requirements of the poor”. Defend or refute
the statement with valid explanation.

34. Read the following text carefully and answer the given question on the basis of the same and common understanding
India agreed to the conditionalities of World Bank and IMF and announced the New Economic Policy (NEP).
The NEP consisted of wide ranging economic reforms. The thrust of the policies was towards creating a more
competitive environment in the economy and removing the barriers to entry and growth of firms. This set of
policies can broadly be classified into two groups: the stabilisation measures and the structural reform measures.
Stabilisation measures are short-term measures, intended to correct some of the weaknesses that have developed
in the balance of payments and to bring inflation under control. In simple words, this means that there was a
need to maintain sufficient foreign exchange reserves and keep the rising prices under control. On the other
hand, structural reform policies are long-term measures, aimed at improving the efficiency of the economy and
increasing its international competitiveness by removing the rigidities in various segments of the Indian economy.
The government initiated a variety of policies which fall under three heads viz., liberalisation, privatisation and
globalisation.
Another reform measure taken to simplify the tax structure and avoid cascading of taxes has been taken in the new
millennial, in particular the Goods and Services Tax (GST). The genesis of the introduction of GST in the country
was laid down in the historic Budget Speech of 28th February 2006, wherein the then
Finance Minister laid down 1st April, 2010 as the date for the introduction of GST in the country. Thereafter,
there has been a constant endeavour for the introduction of the GST in the country whose culmination has been
the introduction of the Constitution (122nd Amendment) Bill in December, 2014.
(i) Justify the following statement with valid explanation
“Economic reforms have restricted the role of Public Sector Units (PSUs) in the country.” Discuss.
(ii) On the basis of your knowledge and understanding, can you think of some reasons how GST is beneficial
from trade and industry’s perspective.


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