Economics (Class 12) Term 2 Question Paper 2023
Section – A
(Macro Economics)
1. Read the following statements carefully:
Statement 1: In a two sector economy, consumption expenditure and investment expenditure are the two components of Aggregate Demand.
Statement 2 : Aggregate demand curve always start from point of origin with positive slope.
In the light of 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.
2. ‘Deficit in Balance of Payment (BOP) refers to the excess of ______
(Choose the correct alternative)
(a) Current account payments over Current account receipts.
(b) Capital account payments over Capital account receipts
(c) Autonomous payments over Autonomous receipts
(d) Accommodating payments over Accommodating receipts
3. “Money is an asset which can be stored for use in future.’ In the light of given statement, identify the function of money.
(Choose the Correct Alternative)
(a) A measure of value
(b) A standard of deferred payment
(c) A store of value
(d) A medium of Exchange
4. “Considering the depreciation of Indian Currency (8) in the international market, the Reserve Bank of India (RBI) has decided to purchase Indian currency (R) in the open market.”
This represents________exchange rate system.
(Fill up the blank with correct alternative)
(a) fixed
(b) flexible
(c) managed floating
(d) manipulated
5. (A) If in an economy, the Investment Multiplier is 4 and Autonomous Consumption is rs. 30 crore, the relevant consumption function would be _________
(Fill up the blank with correct alternative)
(a) C = 30 + 0.75 Y
(b) C = (-) 30 + 0.25 Y
(c) C = 30 + 0.25 Y
(d) C = (-) 30 – 0.25 Y
OR
(B) If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be _________
(Fill up the blank with correct alternative)
(a) equal to unity
(b) greater than one
(c) less than one
(d) equal to zero
6. (A) From the statements given in Column I and Column II, choose the correct pair.
| Column – I | Column – II |
| A. Vegetables grown in the Personal garden | i. Non marketing activity |
| B. A car used as a taxi | ii. Consumer good |
| C. An air-conditioner used by household | iii. Capital good |
| D. Scholarship given to students by government | iv. Factor income |
Alternatives:
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)
OR
(B) Complete the table:
| Producer | Value of output | Intermediate Consumption |
Value Added |
| Farmer Baker Retail Seller |
2000 (i) ……. 4,400 |
– 2000 (iii) …….. |
2000 2000 400 |
| Total | (ii) …… |
6,000 | (iv) …….. |
Alternatives :
(a) 4000, 10400, 4000, 4000
(b) 4000, 10400, 4000, 4400
(c) 2000, 6000, 6000, 4400
(d) 4000, 10400, 6000, 4000
7. (A) Suppose, the price of one UK Pound (£) has increased from ? 70 to 7 80, owing to market forces.
This means that value of Indian Currency (rs.) has _______
(Choose the correct alternative)
(a) appreciated revalued
(b) depreciated
(d) devalued
OR
(B) Suppose, Country X, has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant?
(Choose the correct alternative)
(a) A surplus trade balance in Country X (b)
(b) A deficit trade balance for Country X
(c) A rise in exports from Country X to Country Y
(d) A deficit trade balance for Country Y
8. Read the following statements – Assertion(A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A) : Full employment refers to, absence of involuntary unemployment.
Reason (R): Under full employment situation, all willing and able
bodied people get employment at prevailing wage rate.
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.
9. Read the following statements carefully:
Statement 1: Money supply (M.) in India does not include ‘demand deposits’ with commercial banks.
Statement 2: Money supply (My) refers to, assets available with the Commercial Banks during a particular period of time.
In the light of the given statements, choose the correct alternative.
(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.
10. If a linear consumption curve takes a parallel shift downwards, the value of investment multiplier will
(a) fall
(b) rise
(c) be doubled
(d) not change
11. (a) Giving valid reasons, state whether the following statements are
true or false:
(i) Dividend received from investment abroad is recorded on the credit side of the capital account.
(ii) Depreciation of the Indian Currency will lead to promotion of Indian exports.
OR
(b) Distinguish between Autonomous transactions and Accommodating transactions.
12. Suppose only one Good ‘X’ is produced in the country. Output of Good X during 2018 & 2019 were 100 unite & 110 units respectively. The market price of the product during the two years was ? 50 & 8 56 per unit respectively.
Calculate the percentage change in Real Gross Domestic Product (GDP) in year 2019, using 2018 as the base year.
13. As per the following news published in ‘The Hindu’ on 6th August, 2022 :
The Monetary Policy Committee (MPC) of the Reserve Bank of India raised the Repo Rate by 50 basis points.’
Identify and explain the likely cause and consequences behind this type of action taken by the Reserve Bank of India.
14. If planned savings exceeds planned investments in an economy, explain its likely impact on income, output and employment.
15. (a) Explain the role of Central Bank as Governments’ agent and advisor.
OR
(b) Define Reverse Repo Rate. Discuss briefly, how this instrument helps in controlling credit creation by commercial banks
16. Study the given picture carefully :
Sources of State and Local
government tax revenues for a financial year
Answer the following questions based on common knowledge and picture:
(a) Categorise the given items in the picture into tax /non-tax receipts.(b)
(b) “Government has started spending more on providing free services like education and health to the poor.”
In the light of above statement, explain how the government can use the budgetary policy in reducing ‘inequalities of income”.
17. (a) (I) Suppose in a financial year, the Gross Domestic Product (GDP) at market price of a country was ? 1,100 crore. Net factor income from Abroad was ? 100 crore, the net indirect taxes was ? 150 crore and National income was ? 850 crore.
Calculate the value of depreciation, on the basis of above information.
(II) “While estimating Gross Domestic Product (GDP) by expenditure method, entire focus is on expenditures incurred by the residents of the country.”
Do you agree with the given statement ? Give valid reason in support of your answer.
OR
(b) (I) How should the following be treated in estimating National Income of a Country? Give valid reasons.
(i) Profits earned by Foreign Banks in India.
(ii) Expenditure on upgradation of fixed asset by a firm.
(II) Calculate the value of Domestic Income from the following data :
| S. No. | Particulars | Amount in (Rs. crores) |
| (i) | Rent and Royalties
|
1,300 |
| (ii) | Net Indirect Taxes | 200 |
| (iii) | Wages & Salaries (in cash & in kind) | 1,700 |
| (iv) | Corporate Tax | 400 |
| (v) | Depreciation | 400 |
| (vi) | Retained Earnings | 300 |
| (vii) | Dividends | 400 |
| (viii) | Net Factor Income from Abroad | (-) 120 |
| (ix) | Mixed Income of Self Employed | 1,400 |
| (x) | Change in Stock | (-) 200 |
Section – B
(Indian Economic Development)
18. __________ is the apex institution which plans and evaluates policies related to rural credit needs.
(a) Cooperative Credit Societies
(b) Regional Rural Banks
(c) Self Help Groups
(d) NABARD
19. During the British rule in India, Indian agricultural output witnessed stagnation due to
(Choose the correct alternative)
(a) Decline in handicrafts
(b) Drain of Indian wealth
(c) Land Settlement
(d) Introduction of railways
20. (A) In the first phase of Green Revolution output was restricted mainly to ______
(Choose the correct alternative)
(a) Cereals and Pulses
(b) Wheat and Rice
(c) Cotton and Jute
(d) Jowar and Baira
OR
(B) _____ is known as the architect of Indian Planning.
(a) Jawaharlal Nehru
(b) P.C. Mahalanobis
(c) Dr. Manmohan Singh
(d) Dr. Rajendra Prasad
21. (A) Read the following statements carefully :
Statement 1 : Great Proletarian Cultural Revolution was introduced in China in 1950’8.
Statement 2: China’s growth is mainly contributed by the manufacturing sector.
In the light of 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.
OR
(B) Identify the incorrect statement from the following :
(Choose the correct alternative)
(a) China’s Economic growth rate is better than that of Pakistan.
(b) Pakistan is behind India in HDI ranking.
(c) One Child Policy norm was adopted in Pakistan
(d) In 1991, India adopted New Economic Reforms.
22. Identify, which of the following are associated with the problem of human capital formation in India?
(i) Brain drain
(ii) Low academic standards
(iii) Rising population
(iv) Changes in social outlook
Alternatives:
(a) (i) and (ii)
(b) (ii) and (iii)
(c)(i), (ii) and (ii)
(d) (i) and (iv)
23. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below :
Assertion (A) : During 1980’s, economic growth rate of Pakistan was more than that of India.
Reason (R): Pakistan followed the path of mixed economic structure with equal participation of the public and the private sector.
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.
24. Identify, which of the following is an incorrect kunction of environment?
(a) Supplies resources
(b) Assimilates waste
(c) Land degradation
(d) Provides aesthetic services
25. Read the following statements carofully:
Statement 1: Special Econemic Zones (SEZ’s) policy has led to huge Foreign Direct Investment (FDI) flow to China.
Statement 2: China’s rapid industrial growth was the result of its economic reform in 1981.
In the light of the given statements, choose the correct alternative:
(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.
26. Read the following statements carefully:
Statement 1: First Five Year Plan of China commenced in the year 1956.
Statement 2 : Both India and China adopted Socialist Economy model, following USSR.
In the light of the given statements, choose the correct alternative:
(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.
27. lenity, which of the following is the correct formula for calculating ‘Worker:-Population Ratio”?
(Choose the correct alternative)
28. Interpret the situation of earth as depicted in the given picture, with reference to current environmental challenges :
29. (a) “In rural areas of India, more members of a family are engaged in work, yet the gross income of the family is generally low.”
Identify the type of unemployment indicated in the above statement and explain the paradox associated with it.
OR
(b) Explain the role of micro-credit system in meeting credit requirements of poor.
30. (а) (i) State the meaning of ‘Privatisation’.
(ii) Agriculture sector has been adversely affected by the Economic reform process.’ Comment.
OR
(b) State and explain any two main causes behind infrastructural development by British rule.
31. State, with valid reasons whether, the following statements are true or false:
(a) “Higher productivity and production are the outcome of investment in human resources.”
(b) Rising population is not the cause for quality of human capital formation.
23. Compare and analyge the following information related to Annual Growth of Gross Domestic Product (GDP) of India and China:
Annual Growth of Gross Domestic Product
| Country | 1980 – 90 | 2015 – 17 |
| India | 5.7 | 7.3 |
| China | 10.3 | 6.8 |
