Scholars’ Academy

GUESS PAPER – II
BOARDS - 2024
XII - ECONOMICS
Time Allowed – 3 Hours M.M-80

SECTION-A (INTRODUCTORY MACRO ECONOMICS)

1. Read the following statements carefully:

Statement 1: Value of APS is 1 at breakeven level of income.
Statement 2: MPS is the ratio of change in saving to change in income.
In the 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. Complete the given formula:

Gross
Net investment = investment —

(a) Depreciation (b) Interest (c) Profit (d) Subsidies (1)

3. A company located in India receives a loan from a company located abroad, How is this transaction recorded
in India’s Balance of Payments Account?
(a) Credit side of Current Account (b) Debit side of Current Account
(c) Credit side of Capital Account (d) Debit side of Capital Account (1)

4. Ms. Sakshi, an economics teacher, was explaining the concept of ‘minimum percentage of the total deposits
to be kept by any commercial bank with the Central Bank of the country, as per norms and statute prevailing
in the country’.
From the following, choose the correct alternative which specifies towards the concept explained by Ms.
Sakshi?
(a) Cash Reserve Ratio (b) Repo Rate
(c) Bank Rate (d) Statutory Liquidity Ratio (1)

5. Read the following statements carefully:

Statement 1: Depreciation of domestic currency leads to rise in exports.
Statement 2: Devaluation and depreciation of currency are one and the same thing.
In the 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)

6. In an economy, if APC = 0.8, what should be the value of savings at the income level of ₹2,000 crores?
(a) ₹400 crores (b) ₹ 500 crores (c) ₹100 crores (d) ₹200 crores (1)

7. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given
below:
Assertion (A): There is a positive relationship between saving and income.
Reason (R): Savings are positive even at zero level of National Income.
(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 and 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)
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8. Which of the following is not the function of money?

(i) Medium of exchange (ii) Price stability
(iii) Store of value (iv) Unit of account
(a) (i) and (ii) are correct (b) Only (ii) is correct
(c) (iii) and (iv) are correct (d) (i), (ii), (iii) and (iv) are correct (1)

9. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given
below:
Assertion (A): Ex-ante investment refers to the intended investment to be made during the year.
Reason (R): Ex-ante savings refers to the intended savings to be made during the year.
(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 and 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)

10. Suppose that the Balance of Trade (BOT) of a nation, exhibits a surplus of ₹20,000 crores. The import of
merchandise of the nation is half of the exports of merchandise to the rest of the world. The value of exports
would be ₹____________ crores.
(a) 30,000 (b) 40,000 (d) 24,000 (d) 35,000 (1)

11. Find out National Income from the following data:

(₹ in crores)
(i) Factor income from abroad 15
(ii) Private final consumption expenditure 600
(iii) Consumption of fixed capital 50
(iv) Government final consumption expenditure 200
(v) Net current transfers to abroad (—) 5
(vi) Net domestic fixed capital formation 110
(vii) Net factor income to abroad 10
(viii) Net imports (—) 20
(ix) Net indirect tax 70
(x) Change in stocks (—) 10 (3)

12. (A) “Foreign Institutional Investors (FIIs) remained net seller 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
(B) ‘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. (3)

13. Given that National Income is ₹80 crore and consumption expenditure is ₹64 crore, find out Average
Propensity to Save. When income rises to ₹100 erore and consumption expenditure to ₹78 crore, what will
be the values of Average Propensity to Consume and Marginal Propensity to Consume? (4)

14. Explain the distinction between ‘Statutory Liquidity Ratio’ and ‘Cash Reserve Ratio’. (4)

15. (A) Explain the national income determination in an economy using saving and investment approach. Use
diagram.
Or
(B) Explain and graphically represent the concept of inflationary gap. Explain any two measures of
removing this gap. (4)

16. (a) Distinguish between stock and flow. Between net investment and capital, which is a stock and which is a
flow?
(b) Write down some of the limitations of using GDP as an index of welfare of a country. (3+3)
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17. (A) Explain the concept of ‘primary deficit’ in a government budget. What does it indicate?
(B) What is a government budget? Name two sources each of revenue receipts and capital receipts.
Or
(C) On what basis is government expenditure classified into capital expenditure and revenue expenditure?
Give an example of each.
(D) Explain how the government budget can help in fair distribution of income in the economy. (3+3)

SECTION
SECTION-B (INDIAN
INDIAN ECONOMIC DEVELOPMENT)
DEVELOPMENT

18. What was the nature of Indian economy on the eve of independence?
(a) Stagnant (b) Backward
(c) Underdeveloped (d) All of the above (1)

19. Along with the World Bank and ____________, WTO is the third economic pillar of worldwide dimensions.
(a) International Economic Associ
Association (IEA) (b) International Funding Organisation (IFO)
(c) International
nternational Development Bank (I
(IDB) (d) International Monetary Fund (IMF) (1)

20. The commune system was officially abolished in China by:

(a) 1980 (b) 1983 (c) 1998 (d) 1995 (1)

21. Which of the following is an institutional source of rural credit?

(a) Moneylenders (b) Regional Rural Banks (RRBs)
(c) Traders (d) Landlords (1)

22. From the set of statements given in Column I and Column II, choose the correct pair of statem
statement: 1
Column I Column II
A. SAARC (i) It was founded in 1980.
B. European Union (ii) It was founded in 1990.
C. MEAN (iii) It was formed in 1976.
D. GLF Campaign (iv) It was initiated in 1968.
(a) A — (i) (b) B — (ii) (c) C - (iii) (d) D — (iv) (1)

23.

Which concept of rural banking is highlighted in the above picture?

(a) Regional Rural Banks (b) Micro-credit Programmes
(c) Digital India (d) Cooperative Societies (1)

24. Read the following statements carefully:

Statement 1: VKRV Rao’s estimates of measuring national income and per capita income were considered
very significant during the colonial period.
Statement 2: In 1950, the maximum amo amount of investment in a small scale industry was ₹5 lakh only.
(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)

25. Read the following statements— —Assertion

Assertion (A) and Reason (R). Choose one of the correct alternatives given
below:
Assertion (A): China and India are ahead of Pakistan in reducing ppeople
eople below poverty line.
Reason (R): In Pakistan, most of the foreign exchange earnings came from Pakistani workers in the middle
middle-
east and exports of highly volatile agricultural products.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanatio
explanation of Assertion (A)
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(b) Both Assertion (A) and Reason (R) are true and 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)

26. In which of the following

lowing layers of the atmo
atmosphere is ozone shield found?
(a) Troposphere (b) Exosphere
(c) Stratosphere (d) Mesosphere (1)

27. Read the following statements— —Assertion

Assertion (A) and Reason (R). Choose one of the correct alternatives given
below:
Assertion (A): Pakistan has experienced a phenomenal rise in its growth rate.
Reason (R): Domestic investment and FDI has been shrinking in Pakistan.
(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 and 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)

28. State whether the following

llowing statements are true or false, with valid arguments:
(a) Human capital is tangible and can be easily sold in the market.
(b) Organic farming generates less employment opportunities. (3)

29. (A) What are the disadvantages

ages of unemployment? Explain.
Or
(B) Why is rural development important? (3)

30. Compare China with India and Pakistan on the basis of demographic trends. (4)
Demographic indicators, 2017-18
Country Estimated
ated Population Annual Growth of Density
(in million) Population (%) (per sq. km.
India 1352 1.03 455
Pakistan 1393 0.46 148
China 212 2.05 275

31. (A) Explain the occurrence of events which led to introduction of economic reforms in Ind
India.
Or
(B) Explain the need for ‘Privatisation’. What are the ways in which PSUs can be privatised? (4)

32. Interpret the given picture on account of current environmental challenges. (4)

33. (A) Discuss the importance of cooperative marketing in India.

(B) Discuss India’s potential as a knowledge economy.
Or
(C) “Higher income leads to high level of human capital.” Comment.
(D) “School dropouts are giving way to child labour.” Discuss how this is a loss of human capital. (3+3)
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34. Read the following text carefully:

Since the adoption of New Economic Strategy in 1991, there has been a drastic change in the Indian
economy. With the arrival of liberalisation, the government has regulated the private sector organisations to
conduct business transactions with fewer restrictions.
For the developing countries, liberalisation has opened economic borders to foreign companies and
investments. Earlier, the investors had to encounter difficulties to enter countries with many barriers.
These barriers included tax laws, foreign investment restrictions, accounting regulations, and legal issues.
Economic liberalisation reduced all these obstacles and waived a few restrictions over the control of the
economy to the private sector. -
Some of the objectives of liberalisation are:
• To boost competition between domestic businesses
• To promote foreign trade and regulate imports and exports
• To improve the technology and foreign capital
• To develop a global market for a country
• To reduce the debt burden of a country
• To unlock the economic potential of a country by encouraging the private sector and multinational
corporations to invest and expand
• To encourage the private sector to take an active part in the development process
• To reduce the role of public sector in future industrial development
• To introduce more competition into the economy with the aim of increasing efficiency
On the basis of the given text and common understanding, answer the following questions:
(a) Explain the policy of ‘Liberalisation’.
(b) State positive and negative impact of liberalisation on India. (2+4)