MARKING SCHEME
CLASS XII
ECONOMICS (030) MM-80
Q.No ANSWERS Marks
PART A - MACRO ECONOMICS
1 ( b) Wealth 1
2 (a ) Minimum reserve system 1
3 (c) currency held by the public and demand deposits with commercial 1
bank.
4 (b ) B-ii 1
5 (b) Fixed exchange rate 1
6 (a ) Visible items 1
7 increase 1
8 ( b) rise in aggregate demand 1
9 inflationary gap 1
10 (d) no change in output/employment but increase in general price level. 1
11 A good can be a final good or an intermediate good. it is depend on the use 1
of the good.
Explanation 2
12 (a) The given statement is false as the Current Account of Balance of
Payments records unilateral transfers along with exports and imports 1½
of goods and services.
(b) The given statement is false as the borrowings from abroad are
recorded in the Capital Account of Balance of Payments on the 1½
credit side as it results in an inflow of foreign currency in the
economy.
or
Explanation of ‘ balance of payments always balances’ 3
13 Credit creation process 3
Hypothetical example 1
14 Given , Saving function(C)= -200+0.5Y, Investment(I)=400, Level of
income (Y)=1500
1
At Equilibrium level AD = AS
Or
S=I
-200 + 0.5Y = 400
0.5Y = 600
Y = 600/0.5 2
Y = 1200.
The equilibrium level of income = ₹ 1200 crores.
The given income (₹ 1500 crores) is greater than equilibrium level of
income (₹ 1200 crores). Therefore, the economy is not in equilibrium. 1
15 The situation suggests that Aggregate Demand is less than Aggregate
Supply. Following two fiscal measures may be taken to control it:
(a) Decrease in Taxes - To curb the situation, the government may
decrease the taxes. This may increase the purchasing power in the 2
hands of the general public. This may increase the Aggregate Demand
in the economy to bring it equal to the Aggregate Supply.
(b) Increase in Government Expenditure - The government may also
increase its expenditure. This may increase the purchasing power in the 2
hands of the general public which in turn may increase the Aggregate
Demand in the economy to bring it equal to the Aggregate Supply.
16 steps of income method 3
steps of expenditure method 3
Or
Formula
1
Calculation
4
Answer GDP at MP = 1725
1
17 (a ) Visible items 1
PART (B) – INDIAN ECONOMIC DEVELOPMENT
18 Increase 1
19 ( b) rise in aggregate demand 1
20 inflationary gap 1
21 (d) no change in output/employment but increase in general price level. 1
22
Commune 1
23 ( b ) 1979 1
24 irregular rainfall 1
25 Indebtedness
1
26 Regional Rural Banks 1
27 1
Land Development Banks
28 Meaning of Agricultural marketing 1.5
Any three measures adopted by government such as – Regulation of 1.5
markets, Physical Infrastructure etc.
Or
The given statement is defended as in the recent past India has witnessed 3
many foreign nationals visiting for surgeries, organ transplant, dental and
even cosmetic care. The prime reason for this phenomenon can be quoted
as:
(i) Health services in India offer latest medical technologies with
qualified professionals.
(ii) All these medical services are less costly in India as compared to
similar health care services in other countries.
29 Work force = number of people employed
Labour force = number of people employed + number of people 3
unemployed but willing to do job .
With explanation
30
The agricultural sector was adversely affected by the reform process in the
following manner-
(i) Public investment in agriculture sector especially in
infrastructure like irrigation, power etc. has been reduced in
the reform period
(ii) Reduction of fertilizer subsidy has increased the cost of 4
production affecting thereby the small and marginal farmers
(iii) Increased international competitiveness due to liberalisation
and reduction of import duties.
(iv) Shift from food crops to cash crops due to export-oriented
policy in agriculture led to a rise in prices of food-grains.
31 Any four long term objectives of economic planning in India such as –
(i) Economic growth 1
(ii) Modernization
1
(iii) Economic stability
(iv) Self reliance ( or any other relevant objectives) with explanation 1
1
32 Explanation of one child policy of china 2
Great leap forward campaign of china 2
33 (a ) meaning of sustainable development 1
Any three strategies of it 2
(b ) any two method for identifying poor such as calorie consumption
method , MPCE etc 3
34 Meaning of infrastructure 1
Economic and social infrastructure 3
Relationship between national income and improvement in infrastructure
2
