Class 12 – Economics (30)

Sample Paper 1 (2023-24)

Maximum Marks: 80
Time Allowed:3 hours

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

1.​Statement I: External assistance is recorded in the capital account of the Balance of Payments.
Statement II: The Central Bank may finance a deficit in balance of payments by reducing reserves of foreign currency.
a)​Both the statements are false.
b)​Both the statements are true.
c)​Statement II is true and statement I is false.
d)​Statement I is true and statement II is false.
2.​By supply of money we mean:
a)​Money available with the public
b)​All of these
c)​Deposits with post office savings bank
d)​Money deposited in the bank
3.​Suppose in a hypothetical economy, the income rises from ₹ 5,000 crores to ₹ 6,000 crores. As a result, the consumption
expenditure rises from ₹ 4,000 crores to ₹ 4,600 crores. Marginal propensity to consume in such a case would be
​ ​ .
a) 0.8
b) 0.4
c) 0.2
d) 0.6
4.​Suppose the market determined exchange rate is ₹70/
. However, theIndianGovernmentfixesahigherexchangerateof₹75/ for some reason. The is called
​ of Rupee.
a)​Depreciation
b)​Devaluation
c)​Appreciation
d)​Revaluation
5.​The coefficient b measures
a)​The slope of the consumption
b)​The slope of the income
 c)​The slope of savings
d)​The slope of the investment
6.​When does a situation of deficient demand arise in an economy?
a)​AD < AS
b)​S < I
c)​AD > AS
d)​S > I
7.​When income is zero, savings will be​ .
a)​infinity
b)​negative
c)​zero
d)​positive

8.​Net capital formation causes:

a)​increase in cost
b)​increase in depreciation
c)​increase in profits
d)​increase in production capacity
9.​Central Bank as​ , manages public debt of the govt.
a)​Agent
b)​Financial Advisor
c)​Supervisor
d)​Custodian of Foreign Exchange
10.​The demand for foreign exchange and the exchange rate has

a)​Inverse relationship
b)​Indirect relationship
c)​Direct relationship
d)​Exponential relationship
11.​Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.
12.​List the items of the Current Account of Balance of Payments account. Also define Balance of Trade.

OR

When the price of a foreign currency falls, the demand for that foreign currency rises. Explain why?
13.​Explain two fiscal measure by which excess demand in an economy can be reduced.
14.​From the following data about an economy, calculate its equilibrium level of income:
Marginal propensity to consume = 0.75
 Autonomous consumption = 200
Investment = 6000

OR

An economy is in equilibrium. From the following data, calculate the Marginal Propensity to Save.
a.​Income = Rs.10,000
b.​Autonomous consumption = Rs. 500
c.​Consumption expenditure = Rs. 8,000
15.​Central Bank acts as the banker to the government. Elaborate the given statement.
16.​Answer the following questions:
1.​ i. Calculate sales from the following data.
[Link]. Contents (Rs. in Lakhs)
(i) Subsidies 200
(ii) Opening Stock 100
(iii) Closing Stock 600
(iv) Intermediate Consumption 3,000
(v) Consumption of Fixed Capital 700
(vi) Profit 750
(vii) Net Value Added at Factor Cost 2,000
ii. From the following data relating to a firm, calculate its Net Value Added at Factor Cost:
Items (₹ in lakh)
(i) Subsidy 40
(ii) Sales 800
(iii) Depreciation 30
(iv) Exports 100
(v) Closing stock 20
(vi) Opening stock 50
(vii) Intermediate purchases 500
(viii) Purchase of machinery for own use 200
(ix) Import of raw material 60
2.​OR
i.​Calculate Gross National Product at market price and Net National Disposable Income from the following data.
Particulars (Rs. in Crore)
Net current transfers to abroad (-)5
Profits 70
Consumption of fixed capital 30
Rent 40
Indirect tax 20
 Indirect tax 100

Royalty 10
Compensation of employees 600

Subsidy 5
Net factor income from abroad (-)25
ii.​Calculate GVA at factor cost of a firm:
Items (₹)
(i) Net production taxes 600
(ii) Product taxes 400
(iii) Price per unit of output 10
(iv) Net change in stocks (-) 50
(v) Purchases of raw materials 10000
(vi) Import of raw materials 3000
(vii) Import of machines 20000
(viii) Product subsidies 100
Additional information: Output sold is 2000 units.

17.​Answer the following questions:

I)Explain the objectives of resource allocation and income distribution in a government budget?

II)Giving reasons, categorise the following into revenue receipts and capital receipts:
i.​Recovery of loans
ii.​Corporation tax
iii.​Dividends on investments made by government
iv.​(Sale of a public sector undertaking.

SECTION B – INDIAN ECONOMIC DEVELOPMENT

18.​Find the odd one out based on their type of employment.
a)​Transport operator
b)​A cobbler
c)​A tuition master
d)​Owners of a saloon chain
19.​Which policy aimed to combine the establishment of rural communes with a crash programme of village
industrialisation?
 a)​Great Proletarian Cultural Revolution
b)​SEZ
c)​Great Leap Forward
d)​Economic reform
20.​In 1950, the Planning commission was set up with the​ as its chairperson.
a)​President
b)​Governor
c)​None of these
d)​Prime Minister
21.​Which scheme provides adequate and timely support from the banking system to the farmers for their cultivation needs
in a flexible manner

a)​KBC
b)​KCC
c)​KMM
d)​KMC
22.​Assertion (A): Indian markets are now increasingly shedding their monopolistic character, and becoming more and more
competitive in nature.
Reason (R): The launch of LPG policies has caused a significant shift.
a)​Both A and R are true and R is the correct explanation of A.
b)​Both A and R are true but R is not the correct explanation of A.
c)​A is true but R is false.
d)​A is false but R is true.
23.​High level of physical and human capital can lead to a higher level of​ .
a)​Inflation
b)​Population
c)​Poverty
d)​Economic growth
24.​ Infant mortality rate is as low as​ per thousand in China compared with​ per thousand in India
a) 30, 60
b) 35, 65
c) 30, 63
d) 20,45
25.​Two major environmental issues facing the world today are​ and ​
a)​global warming and air pollution
b)​ozone depletion and pollution
c)​global warming and ozone depletion
d)​air pollution and noise pollution
26.​Which of the given statements are correct with regard to commercialisation of agriculture?
a.​Production for self-consumption
 b.​Production of cash crops instead of food crops
c.​Production of crops for sale in the market
d.​Commercialisation improved the economic status of the farmers
a)​(ii) and (iii)
b)​(iii) and (iv)
c)​(ii) and (iv)
d)​(i) and (iv)
27.​Select the correct combination between the following columns
Column A Column B
(a) 1955 (i) Setting up of Planning Commission
(b) Tariff (ii) Protection from trade
(c) Green revolution (iii) Wheat and Rice
(d) 1950 (iv) Committee for small scale industries
a) (a) - (ii), (b) - (iii), (c) - (i), (d) - (iv)
b) (a) - (iv), (b) - (ii), (c) - (i), (d) - (iii)
c) (a) - (iv), (b) - (ii), (c) - (iii), (d) - (i)
d) (a) - (i), (b) - (ii), (c) - (iii), (d) - (iv)
28.​Why do you think that soil erosion is one of the area which needs to be tackled in order to preserve the environment?

OR

Reversal of supply demand relationship has had a major effect on the degradation of the quality of environment.
Elaborate.
29.​Raj is going to school. When he is not in school, you will find him working in his farm. Can you consider him a
worker? Why?
30.​ Which economic system do you think was most suited to Indian economy and why?
31.​State the measures adopted by the Indian Government under the policy of liberalization.

OR

What measures have been taken for globalisation of Indian economy?

32.​Is rapidly growing population a constraint in the process of human capital formation? Explain.
33.​Answer the following questions:
1.​ i. Explain the role of non-farm employment in promoting rural diversification.
ii. How does organic farming promote sustainable development?
2.​OR
i.​Why do you attach so much importance to agriculture in present Indian economy?
ii.​Explain the importance of self help groups (SHGS) in rural areas.
34.​Read the following text carefully and answer the questions given below:
THE FUTURE POPULATIONS OF CHINA AND INDIA
In the absence of catastrophic events such as nuclear war, the populations of India and China are destined to become
even larger, and by a large margin. If the Chinese were to achieve a total fertility rate of as low as 1.7 children born per
9
woman by 1990 and maintain fertility that low for 30 years, the population would increase to a maximum of 1.22 X 10
in 2020 about 75% greater than the 700 x 106 it was when the birth rate began its big decline in the mid-1960s. To limit
the increase to this amount will require an extraordinary success of the birth planning program.
For many years, 30% of parents would need to have only one child, and 70% only two. If a significant fraction had three
or more, the proportion of one-child couples would need to be higher still. The social cost would be substantial. Many
children would grow up with no siblings; many in the next generation would have no aunts, uncles, or cousins; very
many parents would have no sons, and there would be an age structure with a marked relative shortage of younger
workers, males of military age, etc. These features are very foreign to Chinese customs and values; the stringent and
allegedly coercive means needed to achieve such low fertility might have adverse political effects as did less draconian
measures in India.
In India, the failure to have started a large decline in fertility as early as in China implies a prospective growth on the
order of 75% or more of the current population-to a maximum of at least 1.2 x 109, because the current population is
nearly the size the Chinese population was when the birth rate in China began its dramatic fall.
The death rate in India is higher than that in China, but the prospective decline in fertility in India is surely more gradual;
the attainment of a replacement-level (total fertility rate of about 2.2 or 2.3 children) is long in the future, to say nothing
of attainment of lower rates.
The reason for the large continuing increases in population in each country even after fertility is reduced is that
population growth has its own momentum. High birth rates in the recent past mean that there will be many more
potential parents for another generation than there are now. Even if every couple merely replaces itself, the population
continues to increase by 50% or more.
Thus, the world's two largest populations are destined to become much larger. I believe today, as I did when working
with Hoover, that if sensible economic policies are followed it will be possible to provide a somewhat better life for
these larger populations than is enjoyed in the two countries today. Reducing fertility soon to no higher than needed for
long-run replacement would improve the prospects significantly and would especially improve the social and economic
future as seen from the perspective of early in the next century. Yet, the mistakes of the past cannot be cancelled; the
birth rate cannot be lowered retrospectively. A lower birth rate now is desirable, but the ideal rate is not zero. There are
social and political costs of excessive emphasis on the immediate achievement of very small families; the rights and
sensibilities of the current population and the disequilibrating effects of drastic changes in age composition must enter
the calculation of desirable population policies.
(Source: [Link]
Questions:
i.​Outline any two implications (apart from population arrest) of the one-child policy of China introduced in the
late 1970s.
ii.​Delineate the reasons why the world's two largest populations are destined to become much larger in the future?