CUET -QUESTION BANK

SUBJECT: ECONOMICS

Contributed by:
DPS SECTOR 45, GURGAON
DPS JAIPUR
DHARAV HIGH SCHOOL
 Subject: Introductory Macroeconomics
Chapter: National Income Accounting

Question Page No. of

S No. NCERT
1. Which of the following is an intermediate good? Pg 11
(a) Refrigerator installed in a cold storage
(b) Unsold coal with the traders at the end of the year
(c) Printer purchased by a lawyer
(d) Paper purchased by a publisher

2. Which of the following is not a flow variable?

(a) Investment Pg 11
(b) Depreciation
(c) Production
(d) Capital

3. Which of the following is true if Gross Domestic Capital Formation is less than
Gross Fixed Capital Formation? Pg 21
(a) Consumption of fixed capital is zero
(b) Net change in stock is positive
(c) Net change in stock is zero
(d) Net change in stock is negative

4. Market Value of the final goods and services produced within the domestic
territory of a country during an accounting year is called : Pg 11
(a) GDP at market price
(b) GNP at market price
(c) GDP at factor cost
(d) GNP at factor cost

5. Food processor used by the households is an example of:

(a) Capital Good Pg 11
(b) Intermediate Good
(c) Consumption Good
(d) Producer Good

6. Which of the following is a final good?

(a) Wheat purchased by a baker Pg 11
(b) Wheat purchased by a dealer for sale
(c) Wheat purchased by a firm
(d) Unsold wheat at the end of the year

7. Which of the following is not a stock variable?

(a) Inventory Pg 12
(b) Foreign Exchange Reserves
(c) Savings
(d) Capital
8. Which of the following is true if Gross Domestic Product at factor cost is equal to
Gross Domestic Product at market price? Pg 21
(a) Consumption of fixed capital is zero
(b) Net change in stock is positive
(c) Net Indirect Tax is zero
(d) Net change in stock is negative

9. Which of the following would be the domestic territory of India?

(a) State Bank of India in Paris Pg 14
(b) Office of Reliance Industries in New York
(c) Indian Embassy in Russia
(d) German Embassy in India

10. Given that domestic income is ₹ 2000 crores, operating surplus is ₹ 500 crores and
COE is ₹ 1100 crores, MISE will be: Pg 22
(a) 1600
(b) 600
(c) 1500
(d) 400

11. Match the variables of column I and column II and choose the correct alternative
from options given below: Pg 21, 22,26

Column I Column II
1. Construction of residential property (i) Net Indirect taxes are zero.
2. Mid-day meal provided to school (ii) Operating Surplus
children
3. Undistributed profits of firms (iii) Gross Domestic Capital
Formation
4. GDP at market price is equal to GDP (iv) Government final consumption
at factor cost expenditure
Alternatives:
(a) 1-(i), 2-(ii), 3-(iii), 4-(iv)
(b) 1-(iv), 2-(ii), 3-(iii), 4-(i)
(c) 1-(iii), 2-(ii), 3-(iv), 4-(i)
(d) 1-(iii), 2-(iv), 3-(ii), 4- (i)

12. Match the variables of column I and column II and choose the correct alternative
from options given below: Pg 21,22

Column I Column II
A. Value Added i. NDPfc
B. Value Output ii. Value Output – Intermediate
Consumption
C. National Income iii. Sales + Change in stock
D. Domestic Income iv. NNPfc
 Alternatives:
(a) A -i, B-ii, C-iii, D-iv
(b) A -iv, B-iii, C-ii, D-i
(c) A -ii, B-iii, C-iv, D-i
(d) A -i, B-ii, C-iv, D-iv

13. Find the missing figures and choose the correct alternative :
Pg 20
Production Unit Value of Intermediate Value Added
Output (₹) Consumption (₹) (₹)
Farmer
1,000 0 (i)__
Baker
2,000 1,000 (ii)__
Grocer
(iii)___ 2,000 200
Total
5,200 3,000 (iv)__

(a) (i) 1000, (ii) 3000, (iii) 1800, (iv) 2200

(b) (i) 1000, (ii) 1000, (iii) 2200, (iv) 2200
(c) (i) 1000, (ii) 1000, (iii) 1800, (iv) 2000
(d) (i) 1000, (ii) 3000, (iii) 2200, (iv) 2200

14. Which of the following statements are correct regarding final goods?
(Choose the correct alternative) Pg 11
1. These goods are purchased for investment purpose.
2. These goods have derived demand.
3. They are purchased by consumer households for final consumption.
4. They are purchased by firms to be used up in the process of production.

Alternatives:
(a) 1 only
(b) 1, 2 and 3
(c) 1 and 3
(d) 2 and 4

15. Which of the following statements are correct regarding intermediate goods?
(Choose the correct alternative) Pg 12
1. These goods are purchased for resale during the same year.
2. These goods have derived demand.
3. They are purchased by consumer households.
4. They are purchased by firms and remain within the production boundary.

Alternatives:
(a) 1 only
(b) 1, 2 and 4
(c) 1 and 3
(d) 2 and 4
16. Food items purchased by a production unit are:
1. Single use consumer goods Pg 12
2. Single use producer goods
3. Durable use consumer goods
4. Durable capital goods
Choose the correct answer from the options given below:
(a) 1 only
(b) 2 only
(c) 1 and 2
(d) 2,3 and 4

17. Given below are the steps for calculation of National Income by Value Added
Method. Place them in sequence and identify the correct alternative: Pg 22
1. Calculate the domestic income.
2. Estimate GDP at market price
3. Classify production units as Primary, Secondary and Tertiary.
4. Estimate NFIA to arrive at NNP at factor cost.
Alternatives:
(a) 1, 2, 3, 4
(b) 1, 4, 3, 2
(c) 3, 2, 1, 4
(d) 2, 3, 1, 4

18. Given below are the steps for calculation of National Income by Income Method.
Place them in sequence and identify the correct alternative: Pg 22
1. Estimate and add Net Factor Income from Abroad.
2. Identify and classify the production units.
3. Estimate the factor income paid by each sector.
4. Calculate NDPfc.
Alternatives:
(a) 1, 2, 3, 4
(b) 1, 4, 3, 2
(c) 3, 2, 4, 1
(d) 2, 3, 4, 1

19. Given below are the steps for calculation of National Income by Expenditure
Method. Place them in sequence and identify the correct alternative: Pg 21
1. Estimate and add Net Factor Income from Abroad.
2. Calculate GDPmp.
3. Subtract NIT and Depreciation.
4. Identify the Economic Units incurring Final Expenditure.
Alternatives:
(a) 1, 2, 3, 4
(b) 1, 4, 3, 2
(c) 3, 2, 1, 4
(d) 4, 2, 3, 1

20. Read the following statements - Assertion (A) and Reason (R). Choose the
correct alternative Pg 29
from the options given below:
 Assertion (A) – Real GDP shows increase in GDP due to increase in the general
price .
Reason (R) – Real GDP can be calculated if Nominal GDP and deflator are
given.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanationof Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is
not the correctexplanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.

21. Read the following statements: Assertion and Reason.

Choose one of the correct alternatives given below: Pg 21
Assertion (A): Old age pension is not included while computing domestic income.
Reason (R): Transfer income does not contribute to current flow of goods and
services.
Alternatives:
(a) Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct but (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

Economic growth has raised living standards around the world. However, modern
economies have lost sight of the fact that the standard metric of economic growth,
GDP, merely reflects a nation’s welfare. NSO has estimated a contraction in Real
GDP by 7.7% in 2020-21 as compared to a growth of 4.2% in 2019-20. This is the
fourth contraction in India’s GDP since 1960-61. This is a result of decreased
economic activities and has resulted in low employment levels in the country.

Source: The Economic Times

22. Read the following statements - Assertion (A) and Reason (R). Choose the
correct alternative Pg 29
from the options given below:
Assertion (A) – Real GDP is always less than the Nominal GDP of a country.
Reason(R) – Real GDP is a better measure to make periodic comparison in the
physical output of goods & services over different years.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanationof Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is
not the correctexplanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.

23. Rakhi’s mother is a doctor and she treated Rakhi during sickness. How would you
 treat this while calculating domestic income? Pg 25
(a) It is an economic activity hence will be included in the domestic income.
(b) It is a non-economic activity and it is difficult to measure its economic
value, hence it will not be included in the domestic income.
(c) It is not a leisure activity hence will be included in the domestic income.
(d) It is a positive externality hence its value will be included in domestic
income.

24. Calculate the value of Real GDP if Nominal GDP is ₹ 15,000 crore and GDP
deflator is 125. Pg 29
(a) ₹ 11,250 crore
(b) ₹ 12,000 crore
(c) ₹ 18,750 crore
(d) ₹ 15,125 crore

25. Which of the following is true if GDP at market price equates GDP at factor cost? Pg 24
(a) Depreciation is zero
(b) Subsidy is zero
(c) Indirect tax is zero
(d) Net indirect tax is zero

Answer Key
S No. Answer
1. (d) Paper purchased by a publisher

2. (d) Capital

3. (d) Net change in stock is negative

4. (a) GDP at market price

5. (c) Consumption Good

6. (d) Unsold wheat at the end of the year

7. (c) Savings

8. (c)Net Indirect Tax is zero

9. (c) Indian Embassy in Russia
10. (d) 400

11. (d) (iii), (iv), (ii), (i)

12. (c) A -ii, B-iii, C-iv, D-i

13. (b) (i) 1000, (ii) 1000, (iii) 2200, (iv) 2200

14. (c)1 and 3

15. (b)1, 2 and 4

16. (b) 2 only

17. (c)3, 2, 1, 4

18. (d) 2, 3, 4, 1

19. (d)4, 2, 3, 1

20. (b)Both Assertion (A) and Reason (R) are true and Reason (R) is not the correctexplanation
of Assertion (A)

21. (b)Both Assertion (A) and Reason (R) are true and Reason (R) is not the correctexplanation
of Assertion (A)

22. (d) Assertion (A) is false but Reason (R) is true.

23. (b) It is a non-economic activity and it is difficult to measure its economic value, hence it will not be
included in the domestic income.

24. (b) ₹ 12,000 crore

25. (d) Net indirect tax is zero

 Name of the Subject: Economics
Name of the Chapter: Money and Banking

Question Page No. of

S No. NCERT
1. The rate at which the Central Bank lends money to the commercial banks for their
short term needs is called: Pg 39
(a) Repo Rate
(b) Reverse Repo Rate
(c) Bank Rate
(d) Interest Rate

2. Which of the following statements is false?

(a) Inter –bank deposits do not form a part of the money supply. Pg 47
(b) Money can be legally used to make payments of debt and other
obligations.
(c) One rupee coin is considered as limited legal tender.
(d) Money held by the public includes Money-Creating Sector

3. High powered money consists of :

(a) saving account deposits, current account deposits and time deposits Pg 48
(b) cash reserves with commercial banks and currency held with the public
(c) paper notes, coins, cash reserves with commercial banks and demand deposits
(d) paper notes and coins held with the general public

4. Calculate the value of credit multiplier if total deposits created by commercial

banks is ₹ 40,000 and LRR is 20%. Pg 41
(a) 5
(b) 8
(c) 4
(d) 2

5. Which of the following measure will be adopted by the RBI to increase money
Pg 42
supply in the economy:
(a) selling government securities
(b) purchase of securities by the RBI
(c) increasing the repurchase rate
(d) increasing the discount rate

6. RBI announces a 2% increase in Cash Reserve Ratio, the ability of commercial

banks to create credit will: Pg 43
(a) decrease
(b) increase
(c) remain unaffected
(d) may increase or decrease
7. What will be the effect of an increase in the Repo Rate on the money supply in the
economy? Pg 43
(a) Money supply will increase
(b) Money supply will decrease
(c) Money supply will remain same
(d) Money supply will increase and then decrease

8. Money supply refers to total volume of money:

(a) held by the public at a point of time Pg 38
(b) held by the public over a period of time
(c) held by the Government at a point of time
(d) held by the Government over a period of time

9. Central Bank is the lender of last resort for all commercial banks.Which of the
following is not the aim behind this function of central bank? Pg 42
(a)To help commercial bank overcome its loss.
(b)To save banks from collapse
(c)To enable banks to lend loan
(d)To maintain people’s trust in banking system

10. The value of credit Multiplier will be high when

(a) the value of CRR and SLR is high Pg 42
(b) the value of CRR and SLR is low
(c) the value of CRR and SLR is zero
(d) the value of CRR and SLR is infinity

11. Match the variables of column I and column II and choose the correct alternative
from options given below: Pg 44-45
Column I Column II
1. Coins (i) Derivative Deposits
2. Demand Deposits (ii) Primary Deposits
3. Initial Deposits (iii) Limited Tender
4. Secondary Deposits (iv) Saving account &Current account deposits

(a) 1-(i), 2-(ii), 3-(iii), 4-(iv)

(b) 1-(iv), 2-(ii),3- (iii), 4-(i)
(c) 1-(iii), 2-(ii), 3-(iv), 4-(i)
(d) 1-(iii),2- (iv), 3-(ii), 4-(i)

12. Identify the correct pair from Column I and Column II

List I List II Pg 42-43
A. Cash reserve ratio I. Rate at which RBI lends money
to commercial banks
B. Open market operations II. Instrument used for the long term
needs of the commercial banks
C. Margin requirements III. Difference between amount of
loan and market value of
securities
D. Repo rate IV. Sale and purchase of securities
 Choose the correct answer from the options given below:
(a) A-(i) b
(b) B-(ii) c
(c) C-(iii)
(d) D-(iv)

13. Match the variables of column I and column II and choose the correct alternative
from options given below: Pg 37 & 48
Column I Column II
1. Bank money (i) unlimited legal tender
2. paper notes (ii) limited legal tender
3. coin (iii) Exchange of goods for goods
4. Barter system (iv) Non legal tender

(a) 1-(i), 2-(ii), 3-(iii), 4-(iii)

(b) 1-(iv), 2-(i),3- (ii), 4-(iii)
(c) 1-(iii), 2-(ii), 3-(iv), 4-(i)
(d) 1-(iii),2- (iv), 3-(ii), 4-(i)

14. Demand Deposits includes:

I. Saving Deposits Pg 39
II. Current account Deposits
III. Saving Deposits above minimum balance
IV. Time Deposits
Choose the correct answer from the options given below:
(a) I only
(b) I and II only
(c) I, II and III only
(d) II, III and IV only

15. Money supply in India is regulated by:

I. Reserve Bank of India Pg 38
II. Commercial Banks
III. Financial Institutions
IV. Public Banks
Choose the correct answer from the options given below:
(a) I only
(b) I and II only
(c) I, II and III only
(d) II, III and IV only

16. Which of the following is not a function of money?

I. Medium of exchange Pg 37
II. Store of value
III. Standard of deferred payments
IV. Control of inflation

Choose the correct answer from the options given below:

(a) IV only
 (b) I and II only
(c) I, II and III only
(d) II, III and IV only

17. Which of the following is not a step involved in the process of credit creation by
the commercial banks: Pg 41
I. Commercial banks grant loan to the borrower by opening their deposit
account.
II. Commercial banks keep a fraction of deposit as fixed by the RBI
III. There is a constant flow of new deposits into the banks.
IV. Commercial banks lend to the borrowers from the LRR.

Choose the correct answer from the following options given below:
(a) IV only
(b) I and II only
(c) I, II and III only
(d) II, III and IV only

18. Why do people demand money?

I. Transaction motive Pg 44& 45
II. Speculative motive
III. Precautionary motive
IV. Controlling inflation
Choose the correct answer from the following options given below:
(a) IV only
(b) I and II only
(c) I, II and III only
(d) II, III and IV only

19. If Mohan has two pumpkins and he wants cucumber against it, how many
cucumbers will has get in exchange? Identify the drawback of barter system Pg 37
highlighted in the given situation.

Choose the correct answer from the following options given below:
(a) Lack of measure of value
(b) Lack of Store of value
(c) Lack of Standard of deferred payments
(d) Lack of medium of exchange

20. Read the following statements - Assertion (A) and Reason (R). Choose the correct
option from the alternatives given below: Pg 48
Assertion (A): Cheques, bank drafts, bill of exchange, etc are known as Non Legal
Tenders.
Reason (R): Non Legal Tenders do not have legal backing and their acceptance is
totally optional

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, 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.

21. Read the following statements - Assertion (A) and Reason (R). Choose the correct
alternative from the options given below: Pg 40
Assertion (A): Secondary deposits are always more than the Primary deposits.
Reason (R): Commercial banks can create secondary deposits by way of loans
many times more than their cash reserves.

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, 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.

India has witnessed various monetary standards in its monetary history. The
present monetary system in India is managed and controlled by RBI. In India
rupee has been regarded as the standard currency and all transactions are made in
terms of rupee. In India the monetary authority is Reserve Bank of India. India
follows the paper currency standards as currency followed in India is made up of
paper. Coins are limited legal tender money and can be used for making small
payments where as paper notes are unlimited legal tender and can be used for
making payments of any amount. India follows the minimum reserve system for
note issue. Under this system Central Bank is required to keep a minimum reserve
of gold and foreign exchange and on this basis RBI can issue any number of
notes.
Source: Economic Times
22. Which of the following statements is false?
(a) In modern economy, money comprises cash and bank deposits Pg 48
(b) Money can be legally used to make payments of debt and other obligations
(c) RBI maintains a current account for keeping Government’s cash balance
(d) All currency notes and coins in India are issued by RBI

23. Which of the following is not a function performed by the Central Bank in its
capacity as Banker’s Bank? Pg 42
(a) Maintaining cash reserves of commercial banks
(b) Lender of Last Resort
(c) Managing the public debt
(d) Clearing House

24. High powered money consists of : Pg 48

(a) currency and demand deposits
(b) cash reserves with commercial banks and currency held with the public
(c) paper notes, coins, cash reserves with commercial banks and demand deposits
(d) paper notes and coins held with the public
 25. Read the following statements - Assertion (A) and Reason (R). From the given Pg 40
alternatives choose the correct one:

Assertion (A): Demand deposits are created by commercial banks.

Reason (R): Demand deposits form a significant part of the total money supply in
the economy.

(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

Answer Key
S No. Answer
1. (a) Repo Rate

2. (d) Money held by the public includes Money-Creating Sector

3. (b) cash reserves with commercial banks and currency held with the public
4. (a) 5

5. (b) purchase of securities by the RBI

6. (a) decrease

7. (b) Money supply will decrease

8. (a) held by the public at a point of

9. (c)To enable banks to lend loan

10. (b) the value of CRR and SLR is low

11. (d) 1-(iii),2- (iv), 3-(ii), 4-(i)

12. (c) C-(iii)

13. (b) 1-(iv), 2-(i),3- (ii), 4-(iii)

14. (b) I and II only

15. (a) I only

16. (a) IV only

17. (a) IV only

18. (c) I, II and III only

19. (a) Lack of measure of value

20. (a) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion
(A)

21. (a) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct
explanation of Assertion (A)

22. d) All currency notes and coins in India are issued by RBI
23. c) Managing the public debt
24. b) cash reserves with commercial banks and currency held with the public

25. b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)
 Font size- Time New Roman 12
Economics
Determination of Income and Employment

Question Page No. of

S No. NCERT
1. A consumption function describes the relation between _________________. 54
1. Consumption and income
2. Consumption and savings
3. Consumption and investment
4. Consumption and change in consumption

2. Marginal Propensity to Consume cannot be __________ . 54

1. More than zero
2. zero
3. one
4. More than one

3. The value of Multiplier will be two when 62

1. MPC is greater than MPS
2. MPC is less than MPS
3. MPC is equal to MPS
4. MPC is equal to two
4. With increase in National Income by ₹ 4000 crores, savings increased by ₹ 1000 62
crores, the value of multiplier will be:
1. 2 times
2. 3 times
3. 4 times
4. 5 times

5. What does C/Y indicate? 55

1. APC
2. APS
3. MPC
4. MPS
6. An economy is in equilibrium when: 59
1. Ex-ante Aggregate Demand is equal to ex – ante Aggregate Supply
2. Ex-post Aggregate Demand is equal to ex – post Aggregate Supply
3. Ex-ante investment is equal to ex – ante Aggregate Supply
4. Ex-ante consumption is equal to ex – ante Aggregate Supply

7. The situation of excess demand leads to _______________ in long run. 64

1. Rise in prices
2. Fall in prices
3. No change in price
4. Rise in unemployment

8. If APC in an economy is 0.7, APS will be ______. 55

1. 1.0
 2. 0.3
3. 0.5
4. 1.5
9. ____________ refers to a situation when Aggregate Demand is less than 64
Aggregate Supply corresponding to full employment level of output in the
economy.
1. Deficient Demand
2. Excess Demand
3. Involuntary unemployment
4. Voluntary unemployment
10. When aggregate demand is less than aggregate supply: 57
1. Inventories fall
2. Inventories rise
3. Inventories remain unchanged
4. Inventories rise initially and then fall
11. Match the list I with list II 57 and 61
List I List II
A. Multiplier I. Cannot be zero
B. Under employment equilibrium II. AD = AS when the resources are
not fully employed
C. AD > AS III. National Income is likely to rise
D. Consumption IV. Directly related to MPC

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 57 and 61

List I List II
A. APS I. Can be negative
B. Consumption II. Actual investment
C. Ex-post investment III. Cannot be zero
D. MPS = 0 IV. Multiplier = infinity

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

13. Match the list I with list II 60

List I List II
A. MPS I. APS = (-) 0.30
B. APC = 1.30 II. Availability of credit
C. C = Y III. Slope of saving curve
D. Factor affecting investment IV. Break-even point
 Choose the correct answer from the options given below:
1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Which of the following is true? 54 and 61

A. Multiplier can be zero
B. APS can be zero
C. MPS can be zero
D. APC cannot be zero
Choose the correct answer from the options given below:
1. A, B and D only
2. A, D and C only
3. B, C and D only
4. A, C and D only

15. Which of the following is incorrect? 64

A. Increase in taxes will increase Aggregate Demand
B. Bank Rate is increased to correct excess demand
C. Bank Rate is decreased to correct excess demand
D. Decrease in government expenditure will increase Aggregate Demand

Choose the correct answer from the options given below:

1. A, B and D only
2. B, C and D only
3. A, C and D only
4. A, B and D only

16. Which of the following will lead to the value of Multiplier as one? 62
A. When MPS = 1
B. When MPC = 1
C. When MPS = zero
D. When MPC = zero
Choose the correct answer from the options given below:
1. A and D only
2. C and D only
3. B and C only
4. B and D only

17. Correct the sequence: 64

A. The economy is in full employment equilibrium.
B. Aggregate Demand falls
C. Decline in prices in long run
D. The government increases taxes
E. The situation of deficient demand arises
Choose the correct answer from the following options given below:
1. A, C, E, D, B
2. A, D, B, E, C
3. B, C, D, E, A
 4. C, D, E, A, B

18. Correct the sequence: 64

A. The economy is in full employment equilibrium.
B. Aggregate Demand rises
C. Rise in prices in long run
D. The government decreases taxes
E. The situation of excess demand arises
Choose the correct answer from the following options given below:
1. A, C, E, D, B
2. A, D, B, E, C
3. B, C, D, E, A
4. C, D, E, A, B

19. Correct the sequence: 64

A. The economy is in full employment equilibrium.
B. Aggregate Demand rises
C. Rise in prices in long run
D. Consumption expenditure rises
E. The situation of excess demand arises
Choose the correct answer from the following options given below:
1. A, C, E, D, B
2. A, D, B, E, C
3. B, C, D, E, A
4. C, D, E, A, B

20. Read the following statements: Assertion and Reason. 56

Choose one of the correct alternatives given below:
Assertion (A): Change in inventory is called inventory investment.
Reason (R): Investment decisions are not dependent on market rate of interest.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

21. Read the following statements: Assertion and Reason. 54

Choose one of the correct alternatives given below:
Assertion (A): A consumption function describes the relation between
consumption and income.
Reason (R): Even if income is zero, some consumption still takes place.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true
 Case Study 65
When at a particular price level, aggregate demand for final goods is equal to
aggregate supply of final goods, the final goods or product market reaches
equilibrium. Aggregate demand for final goods consists of ex-ante consumption,
ex-ante investment, government spending, etc, the rate of increase in ex-ante
consumption due to a unit increment in income is called marginal propensity to
consume. Under a constant final goods price and constant rate of interest over
short run to determine the level of aggregate demand for final goods in the
economy and aggregate supply being perfectly elastic at this price, aggregate
output is determined solely by the level of aggregate demand. An increase or
decrease in autonomous spending causes aggregate output of final goods to
increase or decrease by a larger amount through the multiplier process.
Source: NCERT
22. When aggregate output is determined solely by the level of aggregate demand. 65
This principle is known as ________________.
1. Effective Demand principle
2. Effective Supply principle
3. Ex-ante investment
4. Ex- ante consumption

23. If MPC is assumed to be a constant 65

1. Consumption curve will be upward sloping convex
2. Consumption curve will be upward sloping concave
3. Consumption curve will be upward sloping straight line
4. Consumption curve will be downward sloping
24. At equilibrium 65
1. C = Y
2. APC = APS
3. MPC = MPS
4. AD = AS
25. If APC = 1, APS will be ________. 65
1. one
2. zero
3. infinity
4. two

Answer Key
S No. Answer
1. 1.Consumption and income
2. 4.More than one
3. 3.MPC is equal to MPS
4. 3. 4 times
5. 1.APC
6. 1.Ex-ante Aggregate Demand is equal to ex – ante Aggregate Supply

7. 1.Rise in prices
8. 2. 0.3
9. 1.Deficient Demand
10. 2. Inventories rise
11. 2.A-IV, B-II, C-III, D-I

12. 4.A-I, B-III, C-II, D-IV

13. 1.A- III, B- I, C-IV, D- II

14. 3. B, C and D only

15. 3. A, C and D only
16. 1.A and D only
17. 2.A, D, B, E, C

18. 2.A, D, B, E, C

19. 2.A, D, B, E, C

20. 3.Assertion (A) is true but Reason(R) is false

21. 2.Both Assertion (A) and Reason (R) are correct but (R) is not the correct explanation of Assertion (A)

22. 1.Effective Demand principle

23. 3. Consumption curve will be an upward sloping straight line
24. 4.AD = AS
25. 2. zero
 Font size- Time New Roman 12
Economics
Government Budget and the Economy

Question Page No. of

S No. NCERT
1. Which of the following is a capital receipt? 68
1. GST
2. Interest receipt
3. Dividend
4. Borrowings from public

2. Which of the following is a revenue receipt? 68

1. Custom Duties
2. Loan from World Bank
3. Sale of shares of a Public Sector Undertaking
4. Borrowings from public

3. Which of the following is not a capital receipt? 69

1. GST
2. Loan from World Bank
3. Sale of shares of a Public Sector Undertaking
4. Borrowings from public

4. The intervention of the government whether to expand demand or reduce it 68

constitutes the _________________.
1. Allocation function
2. Redistribution function
3. Stabilisation function
4. Allotment function.

5. Which of the following is an indirect tax? 68

1. Corporation tax
2. Income tax
3. Tax on property
4. Excise Duty

6. Which of the following is not an indirect tax? 68

1. Corporation tax
2. Custom Duties
3. GST
4. Excise Duty

7. ______________ is the excess of government’s revenue expenditure over revenue 71

receipts.
1. Revenue Deficit
2. Fiscal Deficit
3. Primary Deficit
4. Balanced Budget
8. When the government may spend an amount equal to the revenue it collects, it is 70
called _________.
1. Revenue Deficit
2. Fiscal Deficit
3. Primary Deficit
4. Balanced Budget

9. ______________ is an expenditure of the government which results in creation of 70

physical or financial assets or reduction in financial liabilities.
1. Capital expenditure
2. Revenue expenditure
3. Total expenditure
4. Non – plan expenditure

10. Recovery of loans is an example of _____________. 72

1. Non – Debt creating capital receipt
2. Debt Creating capital receipt
3. Revenue Receipt
4. Fiscal Deficit

11. Match the list I with list II 69

List I List II
A. Net Borrowings at home I. Small saving schemes
B. Fiscal Deficit II. Non-excludable
C. Public goods III. Judges financial health of the
public sector and stability of the
economy
D. Cash grants – in - hand IV. Non-tax revenue

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 68

List I List II
A. Progressive taxation I. Stabilisation function
B. Loans II. Create a liability
C. Revenue Expenditure III. Normal functioning of
government departments
D. Correct fluctuations in the IV. Higher income, higher tax rate
economy

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV
13. Match the list I with list II 72
List I List II
A. Primary Deficit I. Focus on present fiscal
imbalances
B. Fiscal Deficit II. Excludable
C. Private goods III. Judges financial health of the
public sector and stability of the
economy
D. Income tax IV. tax revenue

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Which of the following is true? 72

A. Primary Deficit can be zero
B. Public goods are non- excludable
C. Disinvestment is a revenue receipt
D. Sale of shares of PSUs is a non- debt creating capital receipt
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

15. Which of the following is true? 68

A. Primary Deficit cannot be zero
B. Public goods are non- excludable
C. Disinvestment is a capital receipt
D. Sale of shares of PSUs is a non- debt creating capital receipt
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

16. Which of the following is true? 67

A. Non paying users of public goods are free riders.
B. Both government and private sector co-exist in mixed economy.
C. The government cannot affect the personal disposable income.
D. Public goods may be produced by the government or the private sector.
Choose the correct answer from the options given below:
1. A, B and D only
2. A, B and C only
3. B, C and D only
4. A, C and D only
17. Arrange the following in correct sequence: 68
A. The aggregate demand exceeds available output.
B. Government imposes high taxation
C. Inflation may occur
D. Disposable income falls
E. Aggregate demand falls to the desired level.
Choose the correct answer from the following options given below:
1. A, C, B, D, E
2. A, B, C, D, E
3. B, C, D, E, A
4. C, D, E, A, B

18. Arrange the following in correct sequence: 68

A. The aggregate demand is not sufficient for full utilisation of available
output.
B. Government reduces taxation
C. Deflation may occur
D. Disposable income rises
E. Aggregate demand increases to the desired level.
Choose the correct answer from the following options given below:
1. A, C, B, D, E
2. A, B, C, D, E
3. B, C, D, E, A
4. C, D, E, A, B

19. Arrange the following in correct sequence: 68

A. The aggregate demand exceeds available output.
B. Government reduces expenditure
C. Inflationary tendencies may occur
D. Aggregate demand falls to the desired level.
Choose the correct answer from the following options given below:
1. A, C, B, D
2. A, B, C, D
3. B, C, D, A
4. C, D, A, B

20. Read the following statements: Assertion and Reason. 69

Choose one of the correct alternatives given below:
Assertion (A): Expenditure on maintaining law and order is a revenue
expenditure.
Reason (R): Expenditure on maintaining law and order neither creates an asset nor
causes a reduction in liabilities for the government.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true
21. Read the following statements: Assertion and Reason. 72
Choose one of the correct alternatives given below:
Assertion (A): Fiscal Deficit indicates total borrowing requirements of the
government from all sources.
Reason (R): Higher revenue deficit always leads to higher fiscal deficit.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

Case Study
Observe the picture carefully and answer the questions that follow:

Source: www.iasparliament.com/current-affairs/union-budget-2023-24-on-fiscal-
consolidation
22. When Fiscal Deficit is equal to interest payments, primary deficit will be ______. 72
1. zero
2. equal to revenue deficit
3. equal to total expenditure
4. equal to interest payments

23. The trends shown in the picture are represented as: 71

1. % of total deficit
2. % of GDP
3. % of total expenditure
4. % of total receipts
24. Gross Fiscal Deficit is equal to: 72
1. Total expenditure – (Revenue receipts + Non – debt creating capital
receipts)
2. Total expenditure – (Revenue receipts + Debt creating capital receipts)
3. Total expenditure – (Revenue receipts - Non – debt creating capital
receipts)
 4. Total expenditure + (Revenue receipts + Non – debt creating capital
receipts)

25. Revenue Deficit is equal to _______________. 69

1. Revenue expenditure – Revenue receipts
2. Revenue expenditure + Capital receipts
3. Revenue expenditure – Capital receipts
4. Revenue expenditure + Revenue receipts

Answer Key
S No. Answer
1. 4.Borrowings from public
2. 1.Custom Duties
3. 1.GST
4. 3.Stabilisation function
5. 4.Excise Duty
6. 1.Corporation tax
7. 1.Revenue Deficit
8. 4.Balanced Budget
9. 1.Capital expenditure
10. 1.Non – Debt creating capital receipt
11. 4.A-I, B-III, C-II, D-IV

12. 2.A-IV, B-II, C-III, D-I

13. 4.A-I, B-III, C-II, D-IV

14. 1.A, B and D only

15. 4.B, C and D only

16. 1.A, B and D only

17. 1.A, C, B, D, E

18. 1.A, C, B, D, E

19. 1.A, C, B, D

20. 1.Both Assertion (A) and Reason (R) are correct and (R) is the correct explanation of Assertion (A)

21. 3.Assertion (A) is true but Reason(R) is false

22. 1.zero
23. 2. % of GDP
24. 1.Total expenditure – (Revenue receipts + Non – debt creating capital receipts)

25. 1.Revenue expenditure – Revenue receipts

 ECONOMICS
UNIT 5- BALANCE OF PAYMENTS

Question Page No. of

S No. NCERT
1. Which of the following constitutes supply of foreign exchange ? 92
1. Foreign tourists visiting the Red Fort
2. Import of goods from Japan
3. Purchase of land in England
4. Indian going abroad for higher studies
2. When the price of foreign exchange falls, its demand will: 91
1. rise
2. fall
3. first rise then fall
4. remain unchanged
3. Trade surplus implies: 87
1. Export of goods and services is more than their import.
2. Import of goods and services is more than their export.
3. Import of goods is less than export of goods.
4. Import of goods is more than their export.
4. The exchange rate in which the central bank intervenes to buy and sell foreign 95
currencies in an attempt to moderate exchange rate movements is called:
1. Fixed Exchange Rate
2. Flexible Exchange Rate
3. Both Floating and Fixed Exchange Rate
4. Managed Floating Exchange Rate
5. Which of the following is not a component of the Current Account of the Balance of 87
Payments :
1. Trade in goods
2. International transaction of assets
3. Trade in services
4. Unilateral transfers to and from abroad
6. Which of the following is not a component of the Capital Account of the Balance of 88
Payments ?
1. Receipts of loans from abroad
2. Purchase of shares in foreign companies
3. Purchase of machinery from abroad
4. Purchase of land by an Indian in UK
7. Which of the following does not hold true for autonomous transactions in the 89
Balance of Payments ?
1. They bridge the gap in the Balance of Payments
2. They are carried out for profit motive
3. They are called ‘above the line’ items of the BOP
4. They are independent of the state of the BOP
8. If the price of one US Dollar changes from ₹ 75 to ₹ 70, it signifies that : 92
1. Indian rupee is depreciating.
2. Both Indian rupee as well as US Dollar are appreciating.
3. US Dollar is depreciating, and Indian rupee is appreciating.
 4. Both US Dollar and Indian rupee are depreciating.
9. A change in the exchange rate of the Indian Rupee and the British Pound from ₹ 80 92
to a Pound to ₹ 85 to a Pound would mean:
1. Indian exports to Britain will increase.
2. Indian imports from Britain will increase.
3. Indian exports to Britain will decrease.
4. There will be no change in exports and imports between India and Britain.
10. Autonomous transactions lead to : 89
1. Decrease in official reserves
2. Increase in official reserves
3. Either an increase or decrease in official reserves
4. No impact on official reserves
11. Match the list I with list II 85
List I List II
A. Open Economy I. Investors get opportunity to
choose between domestic and
foreign assets.
B. Output Market II. Firms can choose where to locate
production and workers where to
work.
C. Financial Market III. Interaction between countries
through various channels.
D. Labour Market IV. An economy can trade in goods
and services with other countries.

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 95

List I List II
A. Managed Floating Exchange Rate I. Government needs to maintain
large stocks of foreign exchange
reserves.
B. Devaluation II. Fixed Exchange Rate System
C. Flexible Exchange Rate System III. Government does not need to
maintain large stocks of foreign
exchange reserves.
D. Fixed Exchange Rate System IV. Central Bank intervenes to buy
and sell foreign currencies.

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV
13. Match the list I with list II 89
List I List II
A. Accommodating Transactions I. Official Reserve Transactions.
B. Balance of Payments Equilibrium II. Decrease in Official Reserve
C. Balance of Payments deficit III. Current Account Deficit is
financed entirely by international
lending
D. Balance of Payments surplus IV. Increase in Official Reserves

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Which of the following are components of Capital Account ? 88

A. Foreign Direct Investment
B. Portfolio Investment
C. Sale of Assets to foreign companies
D. Trade in Invisibles
Choose the correct answer from the options given below:
1. A, B and C only
2. A, C and D only
3. B, C and D only
4. A, B and D only

15. Which of the following statements hold true for Balance on Current Account ? 87
A. A Current Account surplus means that the nation is a lender to the other
countries.
B. Current Account is in balance when receipts and payments on Current
Account are equal.
C. Trade in Assets and Balance on Invisibles are the two components of
Balance on Current Account
D. Trade Balance and Balance on Invisibles are the two components of Balance
on Current Account

Choose the correct answer from the options given below:

1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

16. Foreign Exchange is demanded by the domestic residents for : 91

A. Making gains through speculation
B. Imports of goods and services
C. Sale of assets to foreign countries
D. Unilateral transfers sent abroad
Choose the correct answer from the options given below:
1. A, B and D only
2. A, B and C only
 3. A, C and E only
4. B, C and D only

17. Arrange the following in correct sequence : 92

A. Demand for foreign goods and services increases.
B. Depreciation of domestic currency will take place.
C. International Travelling by Indians has increased.
D. Demand curve for foreign currency will shift to the right.
E. Domestic residents will now have to pay more rupees for a dollar.

Choose the correct answer from the following options given below:
1. A, C,E,D,B
2. A,B,C,D,E
3. B,C,D,E,A
4. C,A,D,B,E

18. Arrange the following in correct sequence : 92

A. Indian rupee is depreciating in value.
B. Indian goods will become cheaper for the Americans.
C. There will be an inflow of foreign currency and Balance of Payments
situation will improve.
D. Domestic residents will have to pay more rupees for a dollar.
E. Indian exports will increase.

Choose the correct answer from the following options given below:
1. A, D,B,E,C
2. A,B,C,D,E
3. B,C,D,E,A
4. C,D,E,A,B

19. Correct the sequence : 95

A. With fluctuations in the Exchange Rate Market, the exchange rate increases
to ₹ 82 for one US Dollar.
B. The Central Bank intervenes to restrict the fluctuation below ₹ 80 for one US
Dollar.
C. The Indian Rupee strengthens against the US Dollar.
D. The Central Bank buys foreign currency.
E. The world has moved on to the Managed Floating Exchange Rate System.

Choose the correct answer from the following options given below:
1. E,A,B,D,C
2. A,B,C,D,E
3. B,C,D,E,A
4. C,D,E,A,B

20. Read the following statements: Assertion and Reason. 92

Choose the correct alternative from the options given below:
Assertion (A): If the price of one US Dollar changes from ₹ 75 to ₹ 70, imports from
the US will increase.
Reason (R): American goods will become more expensive in India.
 Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

21. Read the following statements: Assertion and Reason. 93

Choose one of the correct alternatives given below:
Assertion (A): In the Fixed Exchange Rate System, the rate is fixed by the
Commercial Banks.
Reason (R): In the Fixed Exchange Rate System, the government undertakes to
buy and sell foreign currency to regulate the Exchange Rate.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

Case Study
India's balance of payments is likely to slip into a $45-50 billion deficit in the
current fiscal year, according to an internal assessment by the finance ministry. This
order of forex outflow may keep the rupee under pressure, but the Centre is
confident the deficit can be managed comfortably with foreign exchange reserves at
a healthy $531 billion.
The Economic Times

22. Investment by Apple in India will be recorded on the ___________ side of the 88
_____________ account.
1. credit ; current
2. credit ; capital
3. debit ; current
4. debit ; capital
23. The Balance of Payments record the international transactions in : 86
1. goods only
2. services only
3. goods, services and assets
4. goods and services only
24. When the Current Account Deficit is entirely financed by the Capital Account 89
Surplus, it means :
1. Trade in visibles = Trade in Assets
2. Current Account > Capital Account
3. Current Account + Capital Account = 0
4. Current Account < Capital Account
25. Surplus in Balance of Payments arises because of : 89
1. Accommodating Transactions
2. Selling of forex by the RBI
 3. Buying of forex by the RBI
4. Autonomous Transactions

Answer Key
S No. Answer
1. 1.Foreign tourists visiting the Red Fort
2. 1.rise
3. 3.Import of goods is less than export of goods.
4. 4.Managed Floating Exchange Rate
5. 2. International transaction of assets
6. 3. Purchase of machinery from abroad
7. 1. They bridge the gap in the Balance of Payments
8. 3. US Dollar is depreciating, and Indian rupee is appreciating.
9. 1. Indian exports to Britain will increase.
10. 4. No impact on official reserves
11. 3. A-III, B-IV, C-I, D-II
12. 2. A-IV, B-II, C-III, D-I
13. 4. A-I, B-III, C-II, D-IV
14. 1. A, B and C only
15. 1. A, B and D only
16. 1. A, B and D only
17. 4. C,A,D,B,E
18. 1. A,D,B,E,C
19. 1. E,A,B,D,C
20. 3. Assertion (A) is true but Reason(R) is false
21. 4. Assertion (A) is false but Reason(R) is true
22. 2. credit ; capital
23. 3. goods, services and assets
24. 3. Current Account + Capital Account = 0
25. 4. Autonomous Transactions
 COMMON UNIVERSITY ENTRANCE TEST (2023-2024)
Economics
Ch-1 Indian economy on the eve of Independence

Question Page No. of

S No. NCERT
1. Which of the following statement is not true regarding the economic policies 5
pursued by the colonial government in India?
1. These were concerned more with the protection of the economic interests
of their home country.
2. It transformed India into supplier of raw materials & consumer of finished
industrial products from Britain.
3. It helped the Indian industries, both capital & handicrafts, grow and
compete with the British industries.
4. These policies promoted the economic interests of the colonial
government.
2. Whose estimates regarding India’s national and per capita income during the 5
colonial rule were considered very significant?
1. William Digby
2. Dadabhai Naoroji
3. R.C. Desai
4. V.K.R.V Rao
3. What was India’s growth of aggregate real output and per capita output per year 5
during the first half of the twentieth century?
1. Less than 2% and 0.5% respectively
2. Less than 1% and 0.5% respectively
3. Less than 2.5% and 1% respectively
4. Less than 0.5% and 0.5% respectively
4. About what percent of the country’s population derived livelihood directly or 5
indirectly from agriculture during the British rule?
1. Above 90%
2. Below 75%
3. About 85%
4. Less than 80%
5. Which French traveller described 17th century Bengal as “richer than Egypt”? 5
1. Jean-Baptiste Tavernier
2. Abbe Barthelemy
3. Jean Thevenot
4. Francois Bernier
6. What was the reason for slight growth in the agricultural sector in absolute terms 6
even when the sector experienced stagnation during the colonial rule?
1. Expansion of the aggregate area under cultivation
2. Better irrigation facilities
3. Land reforms
4. Removal of Zamindari system
7. Which of the following measure was not needed for the agricultural sector during 7
the colonial rule?
1. Investment in terracing and drainage
2. Implementation of flood control measures
3. Efforts towards desalination of soil
4. Export promotion in agriculture
8. The repercussions of the policy of systematically de-industrialising India were 7
massive unemployment and
1. massive shift of people from agriculture to industrial sector in India.
2. increase in export of finished products from India.
3. migration of people from rural to urban areas.
4. a new demand for cheap manufactured goods from Britain in the Indian
consumer market.
9. Which of the following statement is not true with respect to the new industrial 8
sector in India?
1. It successfully replaced India’s traditional handicraft industries.
2. Growth rate of the new industrial sector was dismal.
3. Its contribution to the GDP was very small.
4. Very limited area of operation of the public sector.
10. Identify the reason that adversely affected the structure, composition and volume 8
of India’s foreign trade?
1. Exploitative zamindari system
2. Forced commercialisation of agriculture
3. Restrictive policies of commodity production, trade and tariff
4. Lack of incentive for modern industrial sector
11. Which of the following is not true regarding the export surplus of India’s foreign 8,9
trade during the colonial rule?
1. It did not result in any flow of gold or silver into India.
2. It led to better availability of several essential commodities in the domestic
market.
3. It was used to make payments for the expenses incurred by an office set up
by the colonial government in Britain.
4. It financed the import of invisible items by the colonial government.
12. What was trade via the Suez Canal significant to British? 9
1. British ships could now sail around Africa to reach India.
2. It made access to the Indian market difficult for other European countries.
3. It reduced the cost of transportation.
4. It made it easier for the British to import raw materials into India.
13. Match the list I with list II 6,7,8,11
List I List II
A. De-industrialisation policy I. Intensified British control over
India’s foreign trade
B. Agricultural stagnation II. 1850
C. Opening of Suez canal III. Decline of handicraft industries
D. Introduction of railways in India IV. Land settlement system

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
 4. A-I, B-III, C-II, D-IV

14. Match the list I with list II 7

List I List II
A. Jute textile mills I. Mainly dominated by Indians
B. First Iron and steel industry II. 1907
C. Capital goods industry III. Promotes further industrialisation
D. Cotton textile mills IV. Concentrated in Bengal

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

15. Match the list I with list II 9,10,11,12

List I List II
A. Introduction of railways in India I. 1850
B. First census in British India II. 1921
C. Year of Great divide III. 1881
D. Inauguration of aviation sector in IV. 1932
India

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

16. Which of the following were the reasons for a worldwide market for our 4
handicraft products before the advent of the British rule?
A. Inexpensive and affordable
B. Fine quality of material used
C. High standards of craftmanship
D. High aesthetic value
E. Environment friendly
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

17. Which of the following social development indicators during the colonial rule are 10
correct?
A. Infant mortality rate was about 80 per thousand.
B. Female literacy was only about 17%.
C. Public facilities were either unavailable or highly inadequate.
D. Life expectancy was about 44 years.
 E. Literacy level was less than 16%.
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

18. Which of the following statements justify French traveller, Bernier’s statement in 5
the 17th century that “Bengal is richer than Egypt”?
A. Bengal exported cotton, silk, sugar and butter in abundance.
B. Bengal produced wheat, vegetables, fowls etc. amply for its own
consumption.
C. Bengal had rich deposits of gold and other precious metals.
D. Bengal had endless number of canals for navigation and irrigation.
E. Bengal had wealthiest & richest temples of that time.
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

19. Besides Britain, with which other countries did India have foreign trade? 8
A. Greece
B. Ceylon
C. Persia
D. Egypt
E. China
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

20. Which of the following are the reasons for the dismal level of agricultural 6
productivity during the British rule?
A. Excessive use of fertilisers
B. Commercialisation of agriculture
C. Lack of irrigation facilities
D. Implementation of the Zamindari system
E. Low levels of technology
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
21. The correct sequence involved------------ 7,8,9,10,
A. First railway bridge built by the British in India
B. Inauguration of the aviation sector in India
C. Opening of Suez Canal
D. Year of Great Divide
E. Incorporation of TISCO
Choose the correct answer from the following options given below:
1. A, C, E, D,B
2. A, B, C, D, E
3. B, C, D, E, A
4. C, D, E, A, B
22. Read the following statements: Assertion and Reason. 11
Choose one of the correct alternatives given below:
Assertion (A): People, mostly living in rural areas, suffered grievously during
natural calamities and famines.
Reason (R): There always remained an acute shortage of all weather roads to
reach out to rural areas during the rainy season.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

23. Read the following statements: Assertion and Reason. 11

Choose one of the correct alternatives given below:
Assertion (A): Railways enabled people to undertake long distance travel and
thereby break geographical and cultural barriers.
Reason (R): The social benefits, which the Indian people gained owing to the
introduction of the railways, were outweighed by the
country's huge economic loss.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

During the colonial period, the occupational structure of India, i.e., distribution of 11
working persons across different industries and sectors, showed little sign of
change. The agricultural sector accounted for the largest share of workforce,
which usually remained at a high of 70-75 per cent while the manufacturing and
the services sectors accounted for only 10 and 15-20 per cent respectively.
Another striking aspect growing regional variation the Parts of the then Madras
Presidency (comprising areas of the present-day states of Tamil Nadu, Andhra
Pradesh, Kerala and Karnataka), Bombay and Bengal witnessed a decline in the
dependence of the workforce on the agricultural sector with a commensurate
increase in the manufacturing and the services sectors. However, there had been
 an increase in the share of workforce in agriculture during the same time in states
such as Orissa, Rajasthan and Punjab.
24. Which sector of the Indian economy had the largest share of workforce during the
colonial period?
1. Tertiary sector
2. Secondary sector
3. Public sector
4. Primary sector
25. Name any two states that witnessed a shift of their workforce from the primary to
the other two sectors?
1. Odisha and Bengal
2. Odisha and Punjab
3. Kerala and Karnataka
4. Karnataka and Rajasthan
26. Which term is used to describe the distribution of workforce across different
industries and sectors?
1. Demographic profile
2. Occupational structure
3. Sectoral growth
4. Societal distribution
Along with the development of roads and railways, the colonial dispensation also 12
took measures for developing the inland trade and sea lanes. However, these
measures were far from satisfactory. The inland waterways, at times, also proved
uneconomical as in the case of the Coast Canal on the Orissa coast. Though the
canal was built at a huge cost to the government exchequer, yet, it failed to
compete with the railways, which soon traversed the region running parallel to the
canal, and had to be ultimately abandoned. The introduction of the expensive
system of electric telegraph in India, similarly, served the purpose of maintaining
law and order. The postal services, on the other hand, despite serving a useful
public purpose, remained all through inadequate.
27. Why was the Coast Canal on the Orissa coast abandoned by the British
government?
1. The British government had built a better canal on the Bengal coast.
2. Trade around the Coast canal had collapsed.
3. The canal was characterised by huge water losses.
4. Railways proved to be more economical than the Coast canal.
28. Which of the following statement is not true with respect to the telegraph system
introduced by the British?
1. It served the British interests more as against those of the native people.
2. It enhanced the administrative efficiency of the British government.
3. It was an important medium of communication for the local people.
4. It helped the colonial government in maintaining law and order.
29. Why were the Britishers interested in developing the inland trade and sea lanes?
1. To provide basic amenities to the people.
2. To subserve various colonial interests.
3. To protect itself from other imperialist powers.
4. To help the people break the geographical and cultural barriers.

Answer Key
S No. Answer
1. 3. It helped the Indian industries, both capital & handicrafts, grow and compete with the British
industries.
2. 4. V.K.R.V Rao
3. 1. Less than 2% and 0.5% respectively
4. 3. About 85%
5. 4. Francois Bernier
6. 1. Expansion of the aggregate area under cultivation
7. 4. Export promotion in agriculture
8. 4. a new demand for cheap manufactured goods from Britain in the Indian consumer market.
9. 1. It successfully replaced India’s traditional handicraft industries
10. 3. Restrictive policies of commodity production, trade and tariff
11. 2.It led to better availability of several essential commodities in the domestic market.
12. 3. It reduced the cost of transportation.
13. 3.A-III, B-IV, C-I, D-II
14. 2. A-IV, B-II, C-III, D-I
15. 4. A-I, B-III, C-II, D-IV
16. 4. B, C and D only
17. 2. C, D and E only
18. 1. A, B and D only
19. 3. B, C and E only
20. 2. C, D and E only
21. 1. A, C, E, D, B
22 1. Both Assertion (A) and Reason (R) are correct and (R) is the correct explanation of Assertion (A)
23 2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct explanation of Assertion (A)
24 4. Primary sector
25 3. Kerala and Karnataka
26 2. Occupational structure
27 4. Railways proved to be more economical than the Coast canal.
28 3. It was an important medium of communication for the local people.
29 2. To subserve various colonial interests.
 CUET QUESTION BANK (2023-24)
ECONOMICS
CHAPTER 2: INDIAN ECONOMY 1950-1990

Question Page No. of

S No. NCERT(IED)
1. The motive behind the introduction of land reforms in India was 23

1. self-sufficiency in foodgrains
2. agricultural development
3. equity in agriculture
4. industrial development

2. Before the advent of Green Revolution in 1960s, India was primarily dependent 23
on____________ for supply of foodgrains.

1. United States of America (USA)

2. Britain (United Kingdom)
3. Mexico
4. Union of Soviet Socialist Republics (USSR)

3. The committee established to foster the growth and promotion of small scale 29
industries in India was

1. Mahalanobis
2. Tapas Majumdar
3. TRYSEM
4. Karve

4. The segment of agricultural produce that farmers sell in the market after 25
fulfilling their own consumption needs is

1. consumer surplus
2. marketable surplus
3. trade surplus
4. producer surplus

5. Who is known as the architect of Indian planning? 20

1. P.C Mahalanobis
2. Pt. Jawahar Lal Nehru
3. A.M Khusro
4. M.S Swaminathan

6. At the time of India's independence, what proportion of the population relied on 24

agriculture for their livelihood?

1. 60%
2. 65%
 3. 70%
4. 75%

7. Land Reforms were successful in _____ and _______ because these states had 24
governments committed to the policy of land to the tiller.

1. Rajasthan and Maharashtra

2. Punjab, Andhra Pradesh
3. Kerala, West Bengal
4. Tamil Nadu, Haryana

8. Match the list I with list II 22,23

List I List II
A. Land reform measures refer to I. Abolition of zamindari system
B. First land reform measure after II. Change in the ownership of the
independence land
C. Tenancy reform III. HYV technology
D. New agricultural strategy IV. Regulation of rent

Choose the correct answer from the options given below:

1. A- IV, B- I, C-II, D- III
2. A-II, B-I, C-IV, D-III
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV
9. Match the list I with list II 19,24,26,30
List I List II
A. Prime Minister I. Seeds that give large proportion
of output
B. Quota II. The monetary assistance given
by the government for
production activities
C. HYV seeds III. Chairperson of the planning
commission
D. Subsidy IV. Quantity of goods that can be
imported

Choose the correct answer from the options given below:

1. A- III, B- IV, C-I, D- II
2. A-II, B-I, C-IV, D-III
3. A-II, B-III, C-I, D-IV
4. A-I, B-III, C-II, D-IV

10. Which of the following statements are true ? 18,19

A. The goals of the five year plans were growth, modernisation, self-
reliance and equity.
B. In a capitalist society, the goods produced are distributed among people
not on the basis of what people need but on the basis of purchasing
power.
C. In 1950, the Planning Commission was set up with the President as its
chairperson.
 D. The concept of five year plans was borrowed from the former Soviet
Union, the pioneer in national planning.
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

11. Which of the following statements are true ? 24,25,30,31

A. In the first phase of green revolution, larger number of states were
covered and benefited than its second phase.
B. The green revolution enabled the government to procure sufficient
amount of food grains to build a stock which could be used in times of
food shortage.
C. Tariffs are a tax on imported goods which make imported goods more
expensive and discouraged their use.
D. Protection from the foreign competition enabled the development of
indigenous industries in the areas of electronics and automobile sectors
which otherwise could not have developed.
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

12. Arrange the following events in chronological order based on the historical 19,29,32
development policies of India, Pakistan, and China:
A. Planning Commission was set up
B. Modern Bread, a government’s bread manufacturing firm was sold to private
sector.
C. Industrial Policy Resolution was introduced
D. Green Revolution in India
E. Karve Committee used small scale industries for promoting rural
development

Choose the correct answer from the following options given below:
1. A,B,C,E,D
2. A,B,E,D,C
3. C,A,E,D,B
4. B,A,C,D,E

13. Read the following statements: Assertion and Reason. 27

Choose one of the correct alternatives given below:
Assertion (A): Economists have found that poor nations can progress only if they
have a sound agricultural sector.
Reason (R): Industries promote modernisation and provide stable employment
compared to agriculture.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
 2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true
14. Read the following statements: Assertion and Reason. 17
Choose one of the correct alternatives given below:
Assertion (A): Jawaharlal Nehru was in favour of socialism but not the kind of
socialism established in the former Soviet Union where all means of production
were owned by the government.
Reason (R): Nehru believed that changing the ownership pattern of land and
other properties of citizens in a democratic country like India, as was done in the
former Soviet Union, was not possible.
Alternatives:
1.Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2.Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3.Assertion (A) is true but Reason(R) is false
4.Assertion (A) is false but Reason(R) is true
15. Read the following statements: Assertion and Reason. 23
Choose one of the correct alternatives given below:
Assertion (A): Land ceiling means fixing the minimum size of land which could
be owned by an individual.
Reason (R): The purpose of land ceiling was to reduce the concentration of land
ownership in a few hands.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true
Case Study - 1 26
The economic justification of subsidies in agriculture is, at present, a hotly
debated question. It is generally agreed that it was necessary to use subsidies to
provide an incentive for adoption of the new HYV technology by farmers in
general and small farmers in particular. Any new technology will be looked
upon as being risky by farmers. Subsidies were, therefore, needed to encourage
farmers to test the new technology. Some economists believe that once the
technology is found profitable and is widely adopted, subsidies should be phased
out since their purpose has been served. Further subsidies are meant to benefit
the farmers but a substantial amount of fertiliser subsidy also benefits the
fertiliser industry; and among farmers, the subsidy largely benefits the farmers in
the more prosperous regions. Therefore, It is argued that there is no case for
continuing with fertiliser subsidies; it does not benefit the target group and it is a
huge burden on the government's finances.
On the other hand, some believe that the government should continue with
agricultural subsidies because farming in India continues to be a risky business.
Most farmers are very poor and they will not be able to afford the required
inputs without subsidies. Eliminating subsidies will increase the inequality
 between rich and poor farmers and violate the goal of equity. These experts
argue that if subsidies are largely benefiting the fertiliser industry and big
farmers, the correct policy is not to abolish subsidies but to take steps to ensure
that only the poor farmers enjoy the benefits.

16. The primary objective of providing subsidies for the adoption of new high
yielding variety (HYV) technology in agriculture is:
1. to benefit the fertiliser industry
2. to incentivize farmers to experiment with and embrace the new technology
3. to increase government revenue
4. to support only prosperous farmers
17. When is it appropriate to gradually reduce or eliminate subsidies for a new
agricultural technology?
1. As soon as the technology is introduced
2. Once the technology proves to be financially viable and gains widespread
adoption
3. Never, subsidies should continue indefinitely
4. Only when the government's finances are strained
18. Who receives the greatest benefit from subsidies for fertilizers ?
1. The fertiliser industry
2. Small farmers in general
3. Large and prosperous farmers
4. Government finances
19. The possible outcome of discontinuing agricultural subsidies is:
1. Decreased profits for the fertiliser industry
2. Faster adoption of new technologies
3. Higher government revenue
4. A rise in disparity between wealthy and less privileged farmers
20. As per certain experts, what should be the government's approach if subsidies
primarily favor large-scale farmers and the fertilizer industry?
1. Abolish subsidies altogether
2. Maintain subsidies as they are
3. Ensure that the advantages of subsidies are exclusively accessible to
impoverished farmers.
4. Increase subsidies to further benefit big farmers
Case Study – 2 30
The industrial policy that India adopted was closely related to the trade policy. In
the first seven plans, trade was characterised by what is commonly called an
inward looking trade strategy. Technically, this strategy is called import substi-
tution. This policy aimed at replacing or substituting imports with domestic
production. For example, instead of importing vehicles made in a foreign
country, industries would be encouraged to produce them in India itself. In this
policy the government protected the domestic industries from foreign
competition. Protection from imports took two forms: tariffs and quotas. Tariffs
are a tax on imported goods; they make imported goods more expensive and
discourage their use. Quotas specify the quantity of goods which can be
imported. The effect of tariffs and quotas is that they restrict imports and,
therefore, protect the domestic firms from foreign competition.

The policy of protection was based on the notion that industries of developing
 countries were not in a position to compete against the goods produced by more
developed economies. It was assumed that if the domestic industries were
protected they would learn to compete in the course of time. Our planners also
feared the possibility of foreign exchange being spent on import of luxury goods
if no restrictions were placed on imports. Nor was any serious thought given to
promote exports until the mid-1980s.

21. The central aim of India's trade policy throughout the initial seven plans was to
1. encourage domestic manufacturing while decreasing reliance on imports.
2. encourage imports to boost the economy
3. foster foreign competition for domestic industries
4. support luxury imports
22. The technical term for the trade strategy characterized by replacing or
substituting imports with domestic production is
1. Export orientation
2. Inward-looking trade strategy
3. Import expansion
4. Tariff strategy
23. What measures did the government implement to shield domestic industries
from foreign competition within the import substitution policy?
1. By lowering tariffs on imported goods
2. By encouraging imports of foreign products
3. By imposing taxes on domestically produced goods
4. By using tariffs and quotas to restrict imports
24. What fundamental assumption underpinned the protectionist policy?
1. Domestic industries in developing countries were already competitive
2. Protecting domestic industries would lead to immediate success
3. Developing countries could not compete with more developed economies
4. Luxury imports were essential for economic growth
25. When did India seriously consider promoting exports?
1. Right from the beginning of the import substitution policy
2. In the mid-1980s
3. Only after achieving complete import substitution
4. During the first seven plans

Answer Key
S No. Answer
1. 3. equity in agriculture
2. 1. United States of America (USA)
3. 4. Karve
4. 2. marketable surplus
5. 1. P.C Mahalanobis
6. 4. 75%
7. 3. Kerala, West Bengal
8. 2. A-II, B-I, C-IV, D-III
9. 1. A- III, B- IV, C-I, D- II
10. 1. A, B and D only
11. 4. B, C and D only
12. 3. C,A,E,D,B
C.Industrial Policy Resolution was introduced(1948)
A.Planning Commission was set up(1950)
E.Karve Committee used small scale industries for promoting rural development (1955)
D.Green Revolution in India (1960s)
B.Modern Bread, a government’s bread manufacturing firm was sold to private sector.(2001)
13. 4. Assertion (A) is false but Reason(R) is true
14. 1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
15. 4. Assertion (A) is false but Reason(R) is true
16. 2. to incentivize farmers to experiment with and embrace the new technology
17. 2. Once the technology proves to be financially viable and gains widespread
adoption
18. 1. The fertiliser industry
19. 4. A rise in disparity between wealthy and less privileged farmers
20. 3. Ensure that the advantages of subsidies are exclusively accessible to
impoverished farmers.
21. 1. encourage domestic manufacturing while decreasing reliance on imports.
22. 2. Inward-looking trade strategy
23. 4. By using tariffs and quotas to restrict imports
24. 3. Developing countries could not compete with more developed economies
25. 2. In the mid-1980s
 COMMON UNIVERSITY ENTRANCE TEST (2023-2024)
Economics
Ch-3 Liberalisation, Privatisation and Globalisation: An appraisal

Question Page No. of

S No. NCERT
1. In the late 1980s, India’s foreign exchange reserves declined to a level that was 40
not adequate to finance imports
1. for more than two weeks
2. for more than one month
3. for more than two days
4. for more than one week
2. Which international organisations helped India resolve the economic crisis of 40
1991?
1. SAARC and World bank
2. World Bank and IMF
3. IMF and Asian Development Bank
4. Asian Development Bank and World Bank
3. Which condition was stated to assist India during the economic crisis of 1991? 40
1. regulation of the private sector
2. increased role of the government
3. remove trade restrictions between India and other countries
4. allowing international intervention in domestic matters
4. Correcting the BoP deficit and bringing inflation under control were a part of 40
1. Structural reforms
2. Infrastructure reforms
3. Fiscal reforms
4. Stabilisation reforms
5. The government policy that was introduced during 1991 to put an end to the 41
regulations on the economic activities undertaken in the country and open
various sectors of the economy was
1. Liberalisation
2. Globalisation
3. Industrialisation
4. Privatisation
6. The two major foreign exchange reforms introduced under the liberalisation 42
policies in and after 1991 were the adoption of flexible exchange rate system and
1. Revaluation of Rupee
2. Depreciation of Rupee
3. Devaluation of Rupee
4. Appreciation of Rupee
7. The concept in which a company hires regular service from external sources, 45
mostly from other countries, which was previously provided internally or from
within the country is called
1. Insourcing
2. Contracting
3. Endorsing
4. Outsourcing
8. Which of the following was not one of the reasons for establishing GATT? 46
 1. Provide equal opportunities to all countries in the international market for
trading purposes.
2. To administer all multilateral agreements.
3. To regulate the domestic and international trade of the member countries.
4. To eliminate protectionism and enable countries trade freely among
themselves.
9. The predecessor organisation to the World Trade Organisation was 46
1. General Arrangement on Trade and Tariff
2. General Agreement on Trade and Tariff
3. General Agreement on Trade and Treaty
4. General Arrangement on Transfer and Tariff

10. Why has India’s membership of the WTO been questioned by some scholars? 48
1. Developed countries file complaints over agricultural backwardness in the
developing countries
2. Developed countries are forced to open their markets.
3. Major volume of international trade occurs among the developing nations.
4. Developing countries are not allowed access to the markets of developed
countries.
11. Match the list I with list II 40,46
List I List II
A. World Bank I. Short term measures
B. GATT II. Long term measures
C. Stabilisation measures III. IBRD
D. Structural reforms IV. WTO

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 41,42,46

List I List II
A. RBI I. 2017
B. FIIs II. Merchant bankers
C. WTO III. 1995
D. GST IV. Facilitator of financial sector

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

13. Match the list I with list II 44,45

List I List II
A. Disinvestment I. SAIL
 B. Maharatna II. Integration of the economy of the
country with the world economy
C. Navratna III. Selling off part of the equity of
PSEs
D. Globalisation IV. Hindustan Aeronautics Limited

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Match the list I with list II 41,42

List I List II
A. Financial sector I. Fiscal policy
B. GST II. Direct tax
C. Tax reforms III. Foreign exchange market
D. Corporation tax IV. Levied on commodities

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

15. Which of the following were a part of the industrial sector reforms introduced 41
under the liberalisation policies in and after 1991?

A. Quota restrictions were imposed on certain industries

B. Abolition of industrial licensing for all industries
C. Public sector industries included atomic energy generation and some core
activities in railway transport
D. De-reservation of goods produced by small-scale industries
E. Allowing market-based prices in most industries
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

16. Which of the following statements are true with respect to outsourcing? 45

A. Outsourcing has intensified, in recent times, because of the growth of fast

modes of communication.
B. Many of the services such as voice-based business processes, etc. are being
outsourced by companies in developed countries to India.
C. Outsourcing has aggravated the problem of unemployment in India.
D. The low wage rates and availability of skilled manpower in India have
made it a destination for global outsourcing in the post-reform period.
E. Rural areas have immensely benefited from outsourcing.
 Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

17. Which of the following were a part of the financial sector reforms introduced 41
under the liberalisation policies in and after 1991?

A. All the banks are free to set up new branches without the approval of RBI
B. Reduce the role of RBI from a regulator to a facilitator
C. Establishment of private sector banks, Indian as well as foreign
D. Foreign institutional investors still not allowed to invest in Indian financial
markets
E. Foreign investment limit in banks was raised to around 74%
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

18. Which of the following were a part of the tax reforms introduced under the 42
liberalisation policies in and after 1991?

A. Regressive tax structure introduced

B. Corporation tax gradually increased
C. Reduction in direct taxes
D. Introduction of a unified indirect tax system
E. Simplification of the tax payment procedure
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

19. The introduction of GST was expected to 42

A. Generate additional revenue for the government

B. Reduce tax evasion
C. Provide more control over private sector
D. Create ‘one nation, one tax and one market’
E. Provide financial assistance to PSUs
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only

20. The aims of the Trade and Investment policy reforms under liberalisation were to 42,43
 A. Protect the domestic industries from foreign competition
B. Promote the efficiency of local industries
C. Increase international competitiveness of industrial production
D. Increase foreign investments
E. Encourage the adoption of traditional technologies
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
21. Which of the following steps were a part of the Trade and Investment policy 42,43
reforms introduced under the liberalisation policies in and after 1991?

A. Tax benefits on import of essential commodities

B. Export duties increased to promote exports
C. Dismantling of Quantitative restrictions on imports and exports
D. Reduction of tariff rates
E. Removal of licensing procedures for imports
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
22. What was the main aim of the policy of Privatisation? 44
A. Improve financial discipline of the private companies
B. Provide strong impetus to the inflow of FDI
C. Improve financial discipline and promote modernisation
D. Improve the performance of the PSUs by effectively utilising private
capital and managerial capabilities
E. Regulate and control the private sector
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
23. Which of the following statements are true with respect to WTO? 46,47
A. WTO is expected to establish a rule-based trading regime in which nations
cannot place arbitrary restrictions on trade.
B. Its purpose is to enlarge production and trade of services to ensure
optimum utilisation of world resources and to protect the environment.
C. It aims to provide greater market access to all the countries of the world.
D. The WTO agreements facilitate international trade through removal of
tariff as well as non-tariff barriers.
E. The WTO is the predecessor organisation to the GATT.
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
24. An assessment of the Indian economy during the reforms reveals that 48,49
 A. Foreign exchange reserves and foreign investment received a setback.
B. The growth of GDP increased from 5.6 per cent during 1980-91 to 8.2 per
cent during 2007-12.
C. During the reform period, the growth of agriculture declined.
D. The growth in GDP was mainly driven by the growth in the service sector.
E. The reform process substantially reduced poverty and unemployment.
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
25. What led to the decline in the growth of agricultural sector during the reform 50
period?
A. Expansion of fertiliser subsidy
B. Import-oriented policy strategies of the government
C. Reduction in import duties on agricultural products.
D. Fall in public investment in agriculture.
E. Removal of minimum support price
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and E only
3. B, C and E only
4. B, C and D only
26. The correct sequence involved------------ 39,40,42,43,46
A. Implementation of Unified indirect tax system
B. India’s economic crisis
C. Introduction of NEP
D. Establishment of WTO
E. Quantitative restrictions on imports of agricultural goods fully removed
Choose the correct answer from the following options given below:
1. A, C,E,D,B
2. A,B,C,D,E
3. B,C,D,E,A
4. C,D,E,A,B

27. Read the following statements: Assertion and Reason. 44

Choose one of the correct alternatives given below:
Assertion (A): Government companies are converted into private companies by
outright sale of public sector companies.
Reason (R): By withdrawal of ownership and management of public sector
companies, the government companies can be converted into
private companies.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true
28. Read the following statements: Assertion and Reason. 44
Choose one of the correct alternatives given below:
Assertion (A): The granting of status to the public sector enterprises resulted in
better performance of these companies.
Reason (R): Greater operational, financial and managerial autonomy was
granted to the ‘miniratnas’.

Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

29. Read the following statements: Assertion and Reason. 46

Choose one of the correct alternatives given below:
Assertion (A): Multinational corporations headquartered in India are controlled
and regulated by the Indian government.
Reason (R): ONGC, HCL Technologies, Dr Reddy’s Laboratories are a few
examples of multinational corporations.

Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

The origin of the financial crisis can be traced from the inefficient management of 39,40
the Indian economy in the 1980s. We know that for implementing various policies
and its general administration, the government generates funds from various
sources such as taxation, running of public sector enterprises etc. When
expenditure is more than income, the government borrows to finance the deficit
from banks and also from people within the country and from international
financial institutions. When we import goods like petroleum, we pay in dollars
which we earn from our exports.

Development policies required that even though the revenues were very low, the
government had to overshoot its revenue to meet challenges like unemployment,
poverty and population explosion. The continued spending on development
programmes of the government did not generate additional revenue. Moreover,
the government was not able to generate sufficiently from internal sources such as
taxation. When the government was spending a large share of its income on areas
which do not provide immediate returns such as the social sector and defence,
there was a need to utilise the rest of its revenue in a highly efficient manner. The
income from public sector undertakings was also not very high to meet the
growing expenditure. At times, our foreign exchange, borrowed from other
countries and international financial institutions, was spent on meeting
 consumption needs. Neither was an attempt made to reduce such profligate
spending nor sufficient attention was given to boost exports to pay for the growing
imports.
30. Which of the following is not a source of income for the government?
1. Income from Public sector undertakings
2. Taxation
3. Providing subsidies to the farmers
4. Export surplus
31. The economic crisis of 1991 was mainly due to insufficient taxation, continued
spending on welfare programmes even without gains, spending international
borrowings on consumption needs and
1. excessive grants and donations to other countries
2. greater reliance on export promotion
3. growing imports without sufficient promotion of exports
4. Inefficient management of export surplus
32. The foreign exchange borrowed from other countries must be used by the
government for
1. infrastructural development
2. promoting welfare programmes
3. providing grants and donations
4. finance administrative expenses
Every year, the government fixes a target for disinvestment of PSEs. For instance, 50,51
in 1991-92, it was targeted to mobilise Rs 2500 crore through disinvestment. The
government was able to mobilise 3,040 crores more than the target. In 2017-18,
the target was about 1,00,000 crores, whereas, the achievement was about
1,00,057 crores. Critics point out that the assets of PSESs have been undervalued
and sold to the private sector. This means that there has been a substantial loss to
the government. Moreover, the proceeds from disinvestment were used to offset
the shortage of government revenues rather than using it for the development of
PSEs and building social infrastructure in the country.
33. Which of the following is not an objective of disinvestment?
1. Improve public finances
2. Reduce the financial burden on the government
3. Fund growth
4. Checking inflation
34. Why has the policy of disinvestment been criticised?
1. Proceeds from disinvestment have been used to finance government’s
revenue expenditures.
2. Assets of the public sector enterprises have been sold at a higher value to
the private sector.
3. Priority was given to develop public sector enterprises from the proceeds
of disinvestment.
4. Funds from disinvestment were used to procure government assets.

35. The term social infrastructure does not include

1. public health and nutrition
2. drinking water and sanitation
3. power and communication
4. education and skilling
 Answer Key
S No. Answer
1. 1. for more than two weeks
2. 2. World Bank and IMF
3. 3. remove trade restrictions between India and other countries
4. 4. Stabilisation reforms
5. 1. Liberalisation
6. 3. Devaluation of Rupee
7. 4. Outsourcing
8. 3. To regulate the domestic and international trade of the member countries.
9. 2. General Agreement on Trade and Tariff
10. 4. Developing countries are not allowed access to the markets of developed countries.
11. 3. A-III, B-IV, C-I, D-II
12. 2. A-IV, B-II, C-III, D-I
13. 1. A- III, B- I, C-IV, D- II
14. 3. A-III, B-IV, C-I, D-II
15. 2. C, D and E only
16. 1. A, B and D only
17. 3. B, C and E only
18. 2. C, D and E only
19. 1. A, B and D only
20. 4. B, C and D only
21. 2. C, D and E only
22. 3. B, C and E only
23. 1. A, B and D only
24. 4. B, C and D only
25. 2. C, D and E only
26. 3. B,C,D,E,A
A. Implementation of Unified indirect tax system (2017)
B. India’s economic crisis (1991)
C. Introduction of NEP (1991)
D. Establishment of WTO (1995)
E. Quantitative restrictions on imports of agricultural goods fully removed (2001)

27. 2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct explanation of Assertion (A)
28. 1. Both Assertion (A) and Reason (R) are correct and (R) is the correct explanation of Assertion (A)
29. 4. Assertion (A) is false but Reason(R) is true
30. 3. Providing subsidies to the farmers
31. 3. growing imports without sufficient promotion of exports
32. 1. infrastructural development
33. 4. Checking inflation
34. 1. Proceeds from disinvestment have been used to finance government’s revenue expenditures.
35. 3. power and communication
 CUET- QUESTION BANK-2023-24
Name of the Subject: -Economics
Name of the Chapter: - Human Capital Formation

Question Page
S.No. No. of
NCERT
1. Identify the correct statement for human capital. 86
1. It is tangible
2. It is done through conscious decision of the possessor.
3. It is separable from its owner
4. It is mobile between countries
2. The importance of Human Capital was recognised in …..five year plan. 88
1. Seventh
2. Eight
3. Sixth
4. Third
3. In which year did the Indian Government made free and compulsory education for 93
age group of 6 to 14 years.
1. 2001
2. 2003
3. 2009
4. 2007
4. Education by individual is like spending on …….by companies with the objective 84
of increasing future ………over a period of time.
1. perishable good, investment
2. consumer goods, profits
3. capital goods, profits
4. public good, investment
5. Identify the incorrect statement in context of human capital formation choose the 94,95
correct alternative.
1. Women education makes an unfavourable impact on fertility rate
2. Absolute number of illiterates in India is as much as India’s population
was at the time of independence.
3. The Indian education pyramid is steep, indicating lesser and lesser number
of people reaching the higher education level.
4. Spread of education and health services across different sectors of society
to ensure economic growth and equity

6. The differences in literacy rates between males and females is reducing which 95
signifies a positive development in ……………..
1. Large industries
2. Gender equity
3. Physical capital
4. Density per square kilometre
7. Which one of the following organisations regulates the health sector in India? 91
(Choose the correct alternative)
1. ICMR
2. UGC
 3. RBI
4. AICTE
8. Identify the correct indicators of development in Education and Health Sectors: 89
1. Real Per Capita Income, Infant Mortality Rate, worker population rate and
Density per square kilometer
2. Real Per Capita Income, Infant Mortality Rate, inflation rate and sex ratio.
3. Real Per Capita Income, Infant Mortality Rate, bank rate and life
expectancy
4. Real Per Capita Income, Infant Mortality Rate, literacy rate and life
expectancy.
9. The expenditure on education by the government is expressed as a percentage 92
of……………
1. Fiscal deficit
2. Gross domestic product
3. Gross capital formation
4. Budget receipts
10. On the basis of the data given below, identify the incorrect statement in terms of 94
educational attainments in India:

Particulars 1990 2000 2011 2017-18

Adult literacy rate
• Male 61.9 68.4 79 82
• Female 33 45.4 59 66
Primary Completion rate
• Male 78 85 92 93
• Female 61 69 94 96
Youth literacy rate
• Male 76.6 79.7 90 93
• Female 54.2 64.8 82 90

Alternatives:
1. In case of females, the adult literacy rate doubled from 1990 to 2017.
2. The percentage of students completing the last year of primary school was
high in females as compared to males from 2011 to 2018
3. Indicators of educational achievements showed improvement in case of
females leading to economic independence.
4. In case of females, youth literacy rate was less than males from 1990 to
2018.

11. Match the list I with list II 90

List I List II
A. Teacher – pupil ratio I. Health status
B. Human development II. Means to an end
C. Human capital III. Quality of education
D. Mortality rate IV. Ends in themselves

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
 2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-II, D-I
4. A-I, B-III, C-II, D-IV
12. Match the list I with list II Page 85
List I List II
A. Preventive medicine I. Medical intervention during illness
B. Social medicine II. Enhanced labour productivity
C. Curative medicines III. Vaccination
D. Good sanitation facilities IV. Health expenditure

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

13. Match the list I with list II 84,85

List I List II
A. Expenditure on information I. Enhanced productivity
B. On the job training II. End in themselves.
C. Rural urban migration III. Labour market
D. Human development IV. Unemployment

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Educational achievements in a country are indicated in terms of ………. 94

A. Adult literacy level
B. Primary education completion rate
C. Scholarship rate
D. Youth literacy rate
Choose the correct answer from the options given below:
1. A, C and D only
2. A, B and D only
3. B and C only
4. C and D only

15. The reasons for poor human capital formation in India are…………… 88
A. Gender Equality
B. High Growth of Population
C. Brain drain
D. Insufficient resources
Choose the correct answer from the options given below:
1. A, B and D only
2. C and D only
3. A and B only
 4. B, C and D only

16. Education is still a challenging proposition in the country due to many factors. 94
Identify the factors and choose the correct alternative

A. Large number of illiterates

B. Gender equality
C. Inadequate vocationalisation of education
D. Agriculture
Choose the correct answer from the options given below:
1. A, B and D only
2. B, C and D only
3. A, B and C only
4. B and D only

17. Identify the correct sequence of alternatives given in column II y matching them 93
with items Column I:
A. Tapas Majumdar Committee
B. Free and compulsory education
C. University grant commission
D. 2% education cess

Choose the correct answer from the following options given below:
1. A, C,D,B
2. A,B,C,D,
3. B,C,D,A
4. C,A,D,B

18. Health expenditure directly increases the supply of labour force and is a source of 85
capital formation.
Identify the types of health expenditure and choose the correct alternative:
A. Vaccination
B. Provision of housing
C. Mid-Day meal
D. Social medicine
Choose the correct answer from the options given below:
1. A, B and D only
2. C and D only
3. A and B only
4. B, C and D only

19. Read the following statements: Assertion and Reason. Choose one of the correct 95
alternatives given below:
Assertion (A): The difference between literacy rates between males and females
are reducing.
Reason (R): It signifies negative development in gender equity
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
 explanation of Assertion (A)
3. Assertion (A) is true, but Reason(R) is false
4. Assertion (A) is false, but Reason(R) is true

20. Read the following statements: Assertion and Reason. Choose one of the correct 85
alternatives given below:
Assertion (A): Technically qualified persons migrate to other countries because of
higher salaries that they may get in such countries.
Reason (R): The enhanced earnings in the new place outweigh the costs of
migration
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true, but Reason(R) is false
4. Assertion (A) is false, but Reason(R) is true

21. Read the following statements: Assertion and Reason. Choose one of the correct 88
alternatives given below:
Assertion (A): Rapidly rising population adversely affects quality of human
capital.
Reason (R): Population reduces per head availability of the existing facilities
relating to housing, sanitation, drainage, etc.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true, but Reason(R) is false
4. Assertion (A) is false, but Reason(R) is true

Read the passage and answer question number 22 to 25.

Devli has become the voice of children deprived of education due to poverty,
exploitation, or slavery. Three generation of her family had been slave in the
stone quarries of Haryana, living and dying without ever seeing the outside world
until she and 112 others were rescued in 2004.
Devli is now 11 and lives in Jodhpur with her family. She recently represented
deprived children at the launch of ‘Education for all: class of 2015’ at the United
Nation New York. She silenced the gathering of some the world’s most powerful
people when she told them how she has managed to get 15 children from her
village to attend the school, and threw out a challenge:
“If I, as a girl, could enrol 15, is it not possible for all the world leaders to enrol
all children into school?”
As a result, the leaders pledge resources to ensure that the Millennium space
Development Goal in education is achieved and to help educate over 15 million
children around the world.

https://campaignforeducation.org/images/downloads/f1/925/the-big-read-en.pdf
 22. Which of the following could aid in human capital formation? 95
1. Contracting the labour market by less supply of jobs.
2. Reducing larger industries with more complex equipment.
3. Reducing open markets with increased stability.
4. Promoting gender equality in the family.
23. Which of the following source of human capital formation exhibits high cost of 85
living and transportation?
1. Expenditure on health
2. Expenditure on migration
3. Expenditure on education
4. Expenditure on information
24. Which of the following is not the problem of human capital formation in India/ 88,89
1. Low academic standards
2. Low savings
3. Deficient manpower planning
4. Rising population
25. To improve skill and productivity, a firm provides basic skills to its worker under 85
the supervision of skilled worker. This refers to ……source of human capital
formation.
1. Investment in machinery
2. Skill development programme
3. Tangible
4. On the job training
26. ……………is the reason for rural urban migration in India. 85
1. Unemployment
2. Health facilities
3. In-campus training
4. Devaluation

Answer Key
S No. Answer
1 2. It is done through conscious policy formulations

2. 1.Seventh
3 1.2001
4 3.Capital goods, profit
5 1.Women education makes a unfavourable impact on fertility rate
6 2.Gender equity
7 1.ICMR
8 4. Real per Capita income, infant mortality rate, literacy rate, life expectancy.
9 2.Gross domestic product
10 3.In case of females ,youth literacy rate is less than males from1990 to 2018
11 3.A-III,B-IV,C-II,D-I
12 3.A-III,B-IV,C-I,D-II
13 1- A-III,B-I,C-IV,D-II
14 2 -A,B and D only
15 4-B ,C and D only
16 4.B and D only
17 4-C, A,D,B
18 1-A, B D only
19 3-Aassertion A is true and Reason R is false
20 1.Both assertion and reason are true and R is the correct explanation of A
21 1-Both Assertion A is true and Reason is correct and R is the correct explanation of A
22 4- promoting gender equality
23 2. Expenditure on migration
24 2-low savings
25 4.On the job training
26 1.Unemployment
 Font size- Time New Roman 12
Name of the Subject: - Economics
Name of the Chapter: -Rural Development

Question Page No.

S.No of
NCERT
1. Identify which of the following statement is not correct with reference to self- 101-102
help groups.
1. Group members in need of funds can borrow at nominal rate of interest.
2. Borrowing in micro credit system are mainly taken for consumption
purposes.
3. Micro credit system has helped men in rural areas to become self-
dependent.
4. Formal credit system has failed to provide credit to the needy people in
the rural areas.
2. Agriculture marketing does not comprise of____________. 104
1. Transportation of the produce to the marketplace for sale
2. Grading of the produce according to the quality
3. Storage of the produce for sale in future
4. Credit taken to meet expenditure on agriculture
3. The basic objective of the cooperative societies is _________. 102
1. To ensure timely flow of credit to the industrialist
2. To provide credit through money lenders
3. To make available credit facilities to only big farmers
4. Provide adequate credit to the farmers at reasonable rate of interest
4. Which of the following is not a benefit of organic farming? 111
1. Cheaper Inputs
2. Attractive returns on investment
3. Greater import possibilities
4. Higher Nutritional Value
5. ‘Kudumbashree’ is a women oriented community based poverty reduction 102
programme being implemented in :
1. Tamil Nadu
2. Goa
3. Arunachal Pradesh
4. Kerala
6. Identify the incorrect statement from the following: 106-107
1. Diversification into other sectors is essential to enable rural people to
overcome poverty
2. It is an essential component because there is greater risk in depending
exclusively on farming for livelihood
3. It provides supplementary gainful employment
4. Diversification activities are not beneficial for farmers
7. Agriculture loan default rates have been chronically high. Identify the correct 103
statement in reference to it.
1. Lack of deposit mobilisation
2. Lending to worthwhile borrower.
3. Dependency on middlemen
4. Effective loan recovery.
8. The system of farming that restores, maintains and enhances the ecological 110
balance is called…....
1. White revolution
2. Organic farming
3. Dairy farming
4. Leather industry
9. Diversifications provide productive sustainable livelihood option to rural 106
people. With reference to the given statement, diversification includes………
1. Same cropping pattern
2. Shift of work force from agriculture to allied activities
3. Risk for Manufacturing sector
4. Promoting trade by intermediaries
10. Horticulture sector contribute nearly one-third of the value of agricultural 109
output and ……..of gross domestic product of India
1. 2%
2. 4%
3. 6%
4. 8%
11. Match the list I with list II 104,109,
List I List II 101,105
A. Distress sale I. Emerging alternate marketing channel
B. Golden revolution II. Rise in production of horticulture crops.
C. NABARD III. Coordinating all financial
institutions engaged in rural credit.
D. Uzhavar sandies IV. Forced sale of the produce by the farmer at
an unfavourable price.

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 110,104,

List I List II 102, 108
A. Information technology I. Maintenance of buffer stock
B. Public distribution system II. Create a nation-wide milk grid
C. Micro credit programme III. Attainment of food security
D. Operation flood IV. Credit at concessional rates of
interest

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

13. Match the list I with list II 109, 110,

List I List II 107, 102
 A. Livestock I. Agro-processing industry
B. Organic farming II. Land Development bank
C. Non-farm sector III. Increase stability in income
D. Formal institution IV. Provide healthy food

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14 Micro credit programmes play a crucial role in the development in the rural 103
economy because ……..
A. They help in women empowerment
B. They increase the reach of the formal credit
C. Credit is made available at concessional rates of interest
D. Change in cropping pattern
Choose the correct answer from the options given below:
1. A, C and D only
2. B, C and D only
3. A and B only
4. A and C only

15 The policy instruments to improve agricultural marketing: 105

A. Assurance of minimum support price for agriculture
B. Maintenance of buffer stock of wheat and rice by food corporation of
India
C. Shift of workforce from agricultural to allied activities
D. Distribution of food grains and sugar through public distribution system
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

16 Which of the following highlights the role of information technology (IT) in 110
rural development?
A. It helps in achieving sustainable development
B. It helps in attainment of food security
C. Promotion of cooperative marketing
D. It disseminates information regarding emerging technologies

Choose the correct answer from the options given below:

1. A, B and D only
2. C and D only
3. B and C only
4. B and D only

17 Farmers faced problems in marketing their produce. Identify and choose the 104
correct answer.
 A. Faulty weighing
B. Manipulation of accounts
C. Lack of irrigation facilities
D. Lack of informed prices
Choose the correct answer from the following options given below:
1. A, B and C
2. A, B and D
3. B and D
4. C and D

18 Identify the correct sequence involved------------ 108, 102,

A. Operation flood 109
B. Jan-dhan yojana
C. Nationalisation of Banks
D. Golden Revolution
Choose the correct answer from the following options given below:
1. A, C, D, B
2. A, B, C, D
3. B, C, D, A
4. C, A, D,B

19 Read the following statements: Assertion and Reason. 105

Choose one of the correct alternatives given below:
Assertion (A): National and multinational fast-food chains are increasingly
entering into contracts with the farmers.
Reason (R): National and Multinational fast-food chains purchase desired
quality of produce at predetermined prices.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true, but Reason(R) is false
4. Assertion (A) is false, but Reason(R) is true

20 Read the following statements: Assertion and Reason. 111

Choose one of the correct alternatives given below:
Assertion (A): Organic farming helps in sustainable development of
agriculture.
Reason (R): Yields from organic farming are less than modern farming in the
initial years.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true, but Reason(R) is false
4. Assertion (A) is false, but Reason(R) is true

Read the passage and answer question number 22 to 25.

 A farmer of Chittorgarh district has been successfully cultivating different
varieties of strawberry in his fields, the first such initiative in Rajasthan. Jagdish
Prajapat of Nimbahera tehsil in the district initially planted strawberry plants
brought from Himachal Pradesh and Maharashtra. The local climate proved
favourable in ripening of the fruit crop. He is currently farming different
varieties of strawberry in 6-7-acre land and sends the produce to Delhi and
Ahmedabad.

“In beginning, I brought the plants from Himachal Pradesh and Mahabaleshwar
in Maharashtra. However, this year my own farming tactics proved fruitful and
I managed to create crops from the strawberry plants present in my field. I spend
about ₹3 lakh per acre of land and the yield is about 50 quintal per acre. On an
average, 2 kg pack costs about Rs 200,” Prajapat told HT.

For successful strawberry farming, Prajapat applies all techniques suggested by

the agricultural department. These techniques include drip irrigation, plastic
mulching sheet bed for moisture protection and fertigation as per nutrients
recommendation to maintain the premium quality and shape of the plants. Like
most plants and flowers, strawberry also has numerous varieties. Winter variety
did very well in Prajapat’s farm. This plant was cultivated in the first week of
September with 12,000 plants in his field. The crops are ready for harvesting
by March-April. Varieties such as Raniya, Pamaroj, Camilla, Nebila, Sweet
Charlie, Chandler and Aofa were also tried out by him, but the local climate
and natural resources benefitted the winter variety more.
Prajapat believes that favourable air, water and soil conditions for cultivation
of strawberries exist in many places in Rajasthan. Insects and plant sickness are
a challenge, but all crops possess a certain degree of risk. He also hopes to get
himself involved in strawberry processing but will only proceed in this
direction after receiving ample guidance.

https://www.hindustantimes.com/indore/a-farmer-in-rajasthan-s-chittorgarh-
successfully-grows-different-varieties-of-strawberry/story-
NtjsstHbJ3atQmcJ57B9ZI.html

21. Identify the incorrect statement from the following: 109

1. Horticulture has emerged as a successful sustainable livelihood option
for farmers in India.
2. Horticulture is an important sector for potential diversification.
3. India is blessed with supportive climatic and soil conditions for
horticulture.
4. Horticulture is the business related to producing, storing and
distributing foodgrains.
22. The need for diversification arises because………….. 106
1. Greater risk in depending exclusively on farming for livelihood.
2. Agriculture is less crowded
3. Non-farm sectors have no dynamic linkages.
4. Provides less stability.
23. Non-farm sector possesses………among agricultural and non-agricultural 107
growth.
1. Soil degradation
2. Low employment rate
 3. Dynamic linkages
4. Unequal income distribution
24. The sector providing alternative livelihood options to 70 million small and 109
marginal farmers is:
1. Livestock
2. Agro processing
3. Apni mandi
4. Fisheries
25. Multinational companies provide seeds and other inputs, but also assure 105
procurement of the produce at ……………
1. Floor price
2. Minimum support price
3. Market prices
4. Predecided prices
26. Flower harvesting, nursery maintenance, hybrid seed production and tissue 109
culture, propagation of fruits and flowers and food processing are highly
remunerative employment options for …………….. in rural areas.
1. manager
2. woman
3. architect
4. male

Answer Key
S No. Answer
1. 3-Micro credit system has helped men in rural areas to become self depedent
2. 4-Credit taken to meet expenditure on agriculture
3. 4-provide adequate credit to the farmers at reasonable rate of interest
4. 3-Greater import possibilities
5. 4-Kerala
6. 4-Diversification ativities are not beneficial for farmers
7. 1-lack of deposit mobilisation
8. 2-oranic farming
9. 2-Shift of workforce from agriculture to allied activities
10. 3-6%
11. 2-A-IV, B-II, C-III, D-I
12. 1-A-III,B-I,C-IV,D-II
13. 3-A-III,B-IV, C-I, D-II
14. 4-A and C
15. 1-A,B,D
16. 1-A,B,D
17. 2-A,B,D
18. 4-C,A,D,B
19. 1-Both Assertion A and reason are correct and R is the correct explanation of A
20. 2-Both assertion (A) and Reason (R) are correct but (R) is not the correct explanation.
21. 4-Horticulture is a business related to producing, storing and distributing foodgrains.
22. 1-Greater risk in depending exclusively on farming for livelihood
23. 3-Dynamic linkage
24. 1-Livestock
25. 4-predecided price
26. 2-woman
 Name of the Subject : Economics
Name of the Chapter: Employment

Question Page No. of

S No. NCERT
1. The total money value of all final goods and services produced in a country is 93
called its:
1. Gross Domestic Product
2. Net Domestic Product
3. Gross National Product
4. Net National Product

2. Net earnings for the country will be zero, when: 94

1. We have exported more in value terms than imported
2. We have exported less in value terms than imported
3. When exports and imports are of same value
4. When exports and imports are not of same value

3. Activities which contribute to the Gross National Product are called: 94

1. Economic activities
2. Non-Economic activities
3. Economic and non-Economic activities
4. Foreign and domestic activities
4. Which of the following statements related to workers are not true? 95
1. All those who are engaged in economic activities, are workers
2. If some of them temporarily abstain from work, they are not workers
3. Those who help the main workers are also workers
4. Those who are self-employed are also workers
5. Which of the following indicator is used for analysing the employment situation 95
in a country?
1. Unemployed-population ratio
2. Worker-population ratio
3. Labour-population ratio
4. Population-labour ratio
6. Higher worker-population ratio indicates: 96
1. Engagement of people in economic activities is greater
2. Engagement of people in economic activities is medium
3. Engagement of people in economic activities is low
4. Engagement of people in economic activities is least
7. Total number of people who reside in a particular locality at particular point of 96
time is known as :
1. Work force
2. Labour force
3. Population
4. Workers
8. Workers who own and operate an enterprise to earn a livelihood are known as : 97
1. Self-employed
2. Casual wage labourers
 3. Regular salaried employees
4. Factory workers
9. In India, the major source of livelihood for both men and women is : 98
1. Casual wage work
2. Regular salaried employment
3. Self -employment
4. Hired workers
10. In the course of economic development of a country, labour flows: 99
1. from agriculture to industry and services
2. from industry to agriculture and services
3. from services to agriculture and industry
4. from agriculture to services and industry
11. Match the list I with list II 100
List I List II
A. Self-employment I. They are not hired on a
permanent basis and do not get
regular income
B. Wage employment II. Worker sells his labour and earn
wages in return
C. Regular workers III. They are hired on a permanent
basis and get regular income
D. Casual workers IV. Worker uses his own resources to
make living

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 102

List I List II
A. A cement shop owner I. Self employed
B. A construction worker II. Regular salaried employee
C. A civil engineer III. Casual wage worker
D. Formal workers IV. Work in organised sector

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

13. Match the list I with list II 102,97

List I List II
A. Casualisation of workforce I. A situation where more person
are employed than required
B. Distress employment II. A situation where people work in
their own business
 C. Disguised unemployment III. The process of moving from
regular employment to casual
wage employment
D. Self- employment IV. People are forced to do low
payed job due to poverty

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Which of the following statement is true? 104

A. Number of women workers in India are generally under estimated.
B. Many activities undertaken by women workers are not recognised
productive work.
C. More women are found in regular salaried employment.
D. Ratio of women workers in rural areas is more than the workers in urban
areas
Choose the correct answer from the options given below:
1. A, B and D only
2. C, D and A only
3. B, C and A sonly
4. B, C and D only

15. Which of the following statements is not true? 107

A. Disguised unemployment is a situation in which people are not able to find
work during a particular season of the year.
B. Self –employment is an arrangement in which a worker sells his labour
and gets wages in return.
C. There are vast differences in male and female participation ratio in
employment scenario of India.
D. The ratio of woman workers is more in rural areas compared to urban
areas
Choose the correct answer from the options given below:
1. Only A
2. Only A and B
3. Only B,C and D
4. Only A, B and D

16. Which of the following statements is true: 96

A. Hired workers refer to regular wage employees.
B. There is no difference between labour force and work force.
C. Service sector is the main source of employment in India.
D. Disguised unemployment and seasonal unemployment are the two types of
unemployment usually found in rural India.
Choose the correct answer from the options given below:
1. Only A
2. Only A , B and C
3. Only D
 4. Only B, C and D

17. Read the following statements: Assertion and Reason. 104

Choose the correct option from the alternatives given below:
Assertion (A): In India, private sector is largest sector for formal employment.
Reason (R): Government, both state and central, generate employment
opportunities directly and indirectly.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

18. Read the following statements: Assertion and Reason. 105

Choose the correct option from the alternatives given below:
Assertion (A): Labour force can increase or decrease only when the number of
persons actually working or willing to work increases or decreases.
Reason (R): Labour force is not related to wage rate.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

19. Read the following statements: Assertion and Reason. 107

Choose the correct option from the alternatives given below:
Assertion (A): In a situation of disguised unemployment, more than the required
number of persons are working on a particular farm.
Reason (R): In a situation of disguised unemployment, marginal productivity of
labour is positive.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the
correct explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

20. Read the following statements: Assertion and Reason. 108

Choose the correct option from the alternatives given below:
Assertion (A): unemployment and poverty are inseparable twins.
Reason (R): unemployment is the root cause of social-economic evils.
Alternatives:
 1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

21. Read the following statements: Assertion and Reason. 104

Choose the correct option from the alternatives given below:
Assertion (A): In India organised sector provides employment to about 70% of the
total workforce.
Reason (R): Informal workers are not entitled to social security benefits such as
provident fund, gratuity, pension etc.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

Case Study 107

Read the following case study carefully and answer the questions 22-27 on the
basis of the same:

Logically there are only four major criteria according to which a person may be
called unemployed or under-employed. We may call a person unemployed or
under-employed if either:
(i) He is gainfully occupied during the year for a number of hours (or days) less
than some normal or optimal hours (or days) less than some normal or optimal
hour (or days) defined as full employment hour or days;
(ii) He earns less than minimum desirable income per year;
(iii) He is willing to do more work than he is doing at present: he may either be
activity searching for more work or be available for more work if it is offered on
terms to which he is accustomed;
(iv) He is removable from his present employment in the sense that his
contribution to output is less than some normal productivity, and therefore his
removal would not reduce output if the productivity of the remaining workers is
normalised with minor changes in technique or organisation.
22. The number of persons actually working or willing to work, irrespective of the
wage rate is called:
1. Labour supply
2. Labour force
3. Work force
4. Participation rate
23. Prime reason for the rising unemployment in India is __________.
1. Use of labour-intensive technology
2. Lack of capital intensive technology
3. Jobless growth
4. Higher formal workforce
 24. In India, which of the following is not a source of data for unemployment?
1. National sample survey office
2. Labour force survey
3. Employment exchanges
4. Ministry of labour
25. ___________unemployment occurs when the number of workers engaged in a job
is much more than actually required to accomplish it.
1. Disguised
2. Seasonal
3. Open
4. Frictional
26. Read the following statements carefully and choose the correct alternative among
those given below:

Statement 1: Primary sector is the major source of employment to majority of

workers in India.
Statement 2: Women workers contribute very less in primary sector.

(i) Both the statements are true.

(ii) Both the statements are false.
(iii)Statement 1 is true and Statement 2 is false.
(iv) Statement 2 is true and Statement 1 is false.

Answer Key
S No. Answer
1. 1.Gross domestic product

2. 3.When exports and imports are of same value

3. 1.Economic activities

4. 2.If some of them temporarily abstain from work, they are not workers

5. 2.Worker-population ratio

6. 1.Engagement of people in economic activities is greater

7. 3.Population

8. 1.Self-employed

9. 3.Self -employment

10. 1.From agriculture to industry and services

11. 2.A-IV, B-II, C-III, D-I

12. 4.A-I, B-III, C-II, D-IV
13. 3.A-III, B-IV, C-I, D-II
14. 1.A, B and D only
15. 2.Only A and B

16. 3.Only D
17. 4.Assertion (A) is false but Reason(R) is true

18. 2.Both Assertion (A) and Reason (R) are correct but (R) is not the correct explanation of Assertion (A)

19. 3.Assertion (A) is true but Reason(R) is false

20. 3.Assertion (A) is true but Reason(R) is false

21. 4.Assertion (A) is false but Reason(R) is true

22. 2.Labour force
23. 2.Informalisation of workforce
24. 4.Ministry of labour
25. 1.Disguised
26. (iii)Statement 1 is true and Statement 2 is false.
 Name of the Subject: Economics
Name of the Chapter: Environment and sustainable development

Question Page No. of

S No. NCERT
1. How many categories of industries have been identified by CPCB in India, which 124
are significantly polluting?
1. 20
2. 18
3. 19
4. 17
2. The Government of India setup the Central Pollution Control Board (CPCB) in: 123
1. 1975
2. 1978
3. 1974
4. 1981
3. UNCED stands for: 124
1. United National Conference on Ecology and Deforestation
2. Unified National Conference on Environment & Development
3. Unique Nations Conference on Environment Development
4. United Nations Conference on Environment and development
4. Which part of the definition of sustainable development was emphasised by the 125
Brundtland commission:
1. Social stability
2. Protecting the future generation
3. Resource depletion
4. Preservation of resources
5. Absorptive capacity of environment means: 117
1. Sustaining life by providing genetic and biodiversity
2. Providing aesthetic services
3. The resource extraction is not above the rate of regeneration
4. The ability of environment to absorb degradation
6. According to Herman Daly, the carrying capacity of the environment is like a 117
1. Plimsoll line of the ship
2. Development line
3. Sustainable line
4. Environment line
7. Which of the following is a good example of cleaner and greener energy source: 126
1. Hydro power
2. Nuclear power
3. Thermal power
4. Solar power
8. The opportunity costs of negative environment impact is : 118
1. Low
2. Medium
3. High
4. Zero
9. Which of the following is not used as a strategy for sustainable development? 125
1. Use of bio-gas
2. Use of Solar power
3. Use of thermal power
4. Use of Hydel power
10. Which of the following can convert organic matter into compost faster than 128
normal composting process?
1. Butterflies
2. Earthworms
3. Ants
4. Snakes
11. Match the list I with list II 128
List I List II
A. Solar energy can be converted I. Neem
into electricity
B. Bird which helps in controlling II. Peacock
pests
C. Animal which helps in III. Snake
controlling pests
D. Use of pesticides based on plant IV. Photovoltaic cell
products

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

12. Match the list I with list II 116,117,118

List I List II
A. Biotic I. All living elements
B. Global warming II. Phenomenon of reductions in the
amount of ozone in the
stratosphere
C. Ozone depletion III. Gradual increase in the average
temperature of the earth’s lower
atmosphere
D. Renewable resources IV. Continuous supply of the
resources remains available

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

13. Match the list I with list II 126,127

List I List II
 A. Absorptive capacity I. Total planetary inheritance and
the totality of resources
B. Environment II. Required for meeting the basic
needs of all.
C. Wind power III. Ability of environment to absorb
degradation
D. Redistribution of resources IV. Cleaner and greener source of
energy

Choose the correct answer from the options given below:

1. A- III, B- I, C-IV, D- II
2. A-IV, B-II, C-III, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV

14. Choose the correct answer from the options given below: 121,124
List I List II
A. Chipko movement I. Aimed at raising the quality of
life for both present and future
generation
B. Poverty II. Traditional knowledge and
practices
C. Sustainable development III. Was launched to prevent
indiscriminate tree- felling
D. Strategy for sustainable IV. Cause of environmental crisis
development
1. A- III, B- IV, C-I, D- II
2. A-I, B-IV, C-II, D-III
3. A-II, B-III, C-IV, D-I
4. A-IV, B-I, C-II, D-III

15. Choose the correct pair from the options given below: 116, 117
List I List II
A. Physical elements I. Plants and animals
B. Renewable resources II. Fossil fuels
C. Degradation of land III. Loss of fertility of land
D. Excessive tree-felling IV. An example of misuse of
resources
1. A- I
2. B- II
3. C- III
4. D- IV

16. Which of the following statement is true: 117, 118

A. The opportunity cost of negative environmental impacts are low.
B. Absorptive capacity means the ability of the environment to absorb
degradation.
 C. The economic development that we have achieved so far has come at a
very heavy price at the cost of environmental quality.
D. The environmental issues of waste generation and pollution have become
critical today.

Choose the correct answer from the options given below:

1. A, B and D only
2. C, D and A only
3. B, C and A only
4. B, C and D only

17. Find out correct sequence on the basis of year of establishment: 118,125
A. Chipko movement
B. Pollution control board
C. Kyoto Protocol
D. Environment protection Act

Choose the correct answer from the following options given below:
1. A, C, D, B
2. A, B, D, C
3. B, A, D, C
4. C, D, A, B

18. Read the following statements: Assertion and Reason. 121

Choose the correct option from the alternatives given below:
Assertion (A): The Chipko movement took place in Himalyan region of
ultralisation (then part of Uttar Pradesh) to protect trees and forest stated for
government backed logging.
Reason (R): Appiko movement was started on 8/9/1983 when felling of trees
started in Sirsi.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

19. Read the following statements: Assertion and Reason. 127

Choose the correct option from the alternatives given below:
Assertion (A): Mini-Hydel plants are environment friendly.
Reason (R): Mini-Hydel plants do not change the land use pattern in areas where
they are located. Also, they generate enough power to meet local demands.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
 2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

20. Read the following statements: Assertion and Reason. 119

Choose the correct option from the alternatives given below:
Assertion (A): Environmental degradation is a paradoxical situation.
Reason (R): Expanding production activity is the principal cause of environmental
degradation in the urban areas.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

21. Read the following statements: Assertion and Reason. 119

Choose the correct option from the alternatives given below:
Assertion (A): Poverty leads to environmental degradation.
Reason (R): Poor people are dependent on resources from forests which they sell
to earn livelihood.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

Case Study 123

Read the following case study carefully and answer the questions 22-27 on the
basis of the same:

Twenty-one of the world’s 30 cities with the worst levels of air pollution are in
India, according to data compiled in IQ Air Visual’s 2019 World Air Quality
report; six Indian cities are in the top ten. Indeed, air pollution is pervasive in
many parts of India, causing massive public health and environment crisis. The
economic cost of fossil fuel, air pollution alone is estimated at INR 10,700 billion,
or 5.4 per cent of the country’s annual GDP. An estimated one million deaths
each year, and 980,000 pre-term births, are attributed to air pollution from fossil
fuel in India.
Among all the cities in India, some of the worst levels of air pollution are seen in
its capital territory, Delhi. The impacts are devastating, including in the degree of
particulate matter concentrations in the air (environmental), reduction in life
expectancy (health), and high costs that the state is incurring to resolve the crises
(economic). Source: Times of India, Nov 5, 2022
22. The fossil fuel emit the poisonous gas called:
 1. Methane
2. Neon
3. Carbon dioxide
4. Argon
23. Gaseous emissions from industries and vehicles is the principal cause of:
1. Water pollution
2. Air pollution
3. Noise pollution
4. Land pollution
24. The high costs that the state is incurring to resolve the crisis is an example of ----
cost.
1. Absolute
2. Relative
3. Opportunity
4. Real

25. Air pollution causes ------------------

1. Hypertension
2. Anxiety
3. Hepatitis
4. Diarrhoea
26. Read the following statements carefully and choose the correct alternative among
those given below:

Statement 1: Mechanisation has raised the level of Air pollution.

Statement 2: Air pollution causes diseases like diarrhoea and hepatitis.

1. Both the statements are true.

2. Both the statements are false.
3. Statement 1 is true and Statement 2 is false.
4. Statement 2 is true and Statement

Answer Key
S No. Answer
1. 4.17
2. 3.1974
3. 4.United Nations Conference on Environment and development
4. 2.Protecting the future generation

5. 4.The ability of environment to absorb degradation

6. 1.Plimsoll line

7. 4.Both (1) & (2)

8. 3.High
9. 3.Use of thermal power
10. 2.Earthworms
11. 2.A-IV, B-II, C-III, D-I

12. 4.A-I, B-III, C-II, D-IV

13. 1.A- III, B- I, C-IV, D- II

14. 1.A- III, B- IV, C-I, D- II

15. 3.C- III

16. 4.B, C and D only

17. 3. B, A,D, C

18. 2.Both Assertion (A) and Reason (R) are correct but (R) is not the correct explanation of Assertion (A)

19. 1.Both Assertion (A) and Reason (R) are correct and (R) is the correct explanation of Assertion (A)

20. 2.Both Assertion (A) and Reason (R) are correct but (R) is not the correct explanation of Assertion (A)

21. 1.Both Assertion (A) and Reason (R) are correct and (R) is the correct explanation of Assertion (A)

22. 3.Carbon dioxide

23. 2.Air pollution
24. 3.Opportunity
25. 1.Hypertension
26. 3.Statement 1 is true and Statement 2 is false.
 CUET QUESTION BANK (2023-24)
ECONOMICS
CHAPTER 8: COMPARATIVE DEVELOPMENT EXPERIENCES OF INDIA AND
ITS NEIGHBOURS

Question Page No. of

S No. NCERT(IED)
1. Major reason behind formation of special economic zones by China was 137
1. to increase workforce
2. to make handicrafts
3. to attract foreign investors
4. to increase production
2. In China, commune system is related to : 136
1. agriculture
2. industry
3. service
4. mining
3. Structural changes refers to shift in the economic system from agriculture to 137,138
industry and services. Which of the following countries has outperformed others
in a shift to service sector in 1980s?
1. Nepal
2. China
3. India
4. Pakistan
4. Liberty indicator relates to 143
1. Political freedom
2. Freedom to gain knowledge
3. Freedom to access health services
4. Freedom to choose profession
5. A campaign in China in 1958 where people were encouraged to set up industries 136
in their backyard was named as :
1. Great leap forward
2. Great proletarian cultural revolution
3. Anti- rightist movement
4. Four pests campaign
6. The fertility rate is very high in: 138
1. Pakistan
2. India
3. China
4. USA
7. Match the list I with list II 136,138
List I List II
A. Great Proletarian Cultural I. 1953
Revolution
B. Great Leap Forward Campaign II. 1978
C. Economic reforms in China III. 1958
D. China’s economic planning(First IV. 1966
Five Year Plan)
 Choose the correct answer from the options given below:
1. A- III, B- I, C-IV, D- II
2. A-IV, B-III, C-II, D-I
3. A-III, B-IV, C-I, D-II
4. A-I, B-III, C-II, D-IV
8. Match the list I with list II 136,138,143,
List I List II
A. One child norm in China I. 1951
B. Economic reforms in India II. 1958
C. First five year plan in India III. 1979
D. Commune system in China IV. 1991

Choose the correct answer from the options given below:

1. A- III, B- IV, C-I, D- II
2. A-IV, B-II, C-III, D-I
3. A-II, B-IV, C-I, D-III
4. A-I, B-III, C-II, D-IV

9. Which of the following statements are true ? 138,139,140

A. China is the largest nation in the world.
B. China was able to maintain near double digit growth during 1980s.
C. About 10 per cent of China’s total land area is suitable for cultivation.
D. The total cultivable area in China accounts for 40 per cent of the
cultivable area in India.
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

10. Which of the following statements are true ? 140,141

A. In 1980s, Pakistan was faster in shifting its workforce to service sector
than India and china.
B. In the last five decades, the growth of agriculture sector, which employs
the largest proportion of workforce in all the three countries(India,
Pakistan & China), has increased.
C. China and Pakistan have more proportion of urban population than India.
D. In the normal course of development, countries first shift their
employment and output from agriculture to industry and then to services.
Choose the correct answer from the options given below:
1. A, B and D only
2. A, C and D only
3. A, B and C only
4. B, C and D only

11. Arrange the following events in chronological order : 135,136,143,144

A. Establishment of People’s Republic of china
B. At this time, 26000 communes were covering almost all the farm
population in China
C. Economic reforms in China
 D. Creation of Pakistan
E. Economic reforms in india
Choose the correct answer from the following options given below:
1. A, D,E,C,B
2. D,A,C,B,E
3. B,C,D,E,A
4. D,A,B,C,E
12. Arrange the following events in chronological order with respect to Pakistan’s 137,138
developmental path:
A. Pakistan like India also followed the mixed economy model with co-
existence of public and private sectors.
B. Nationalisation of capital goods industries
C. Private sector was encouraged and incentives were given
D. Introduction of Green Revolution
E. Economic reforms were initiated in the country
Choose the correct answer from the following options given below:
1. A,B,C,D,E
2. A,D,B,C,E
3. B,C,D,E,A
4. C,D,E,A,B
13. Arrange the following events in chronological order based on the historical 136
development policies of India, Pakistan, and China:
A. China announced its First Five Year Plan.
B. India announced its First Five Year Plan.
C. Pakistan announced its First Five-Year Plan (Medium Term Development
Plan).
D. China is working on its 14th Five Year Plan.
E. Pakistan is working on its 12th Five Year Development Plan.

Choose the correct answer from the following options given below:
1. A,B,C,E,D
2. A,B,C,D,E
3. B,A,C,E,D
4. B,A,C,D,E
14. Read the following statements: Assertion and Reason. 136
Choose one of the correct alternatives given below:
Assertion (A): The aim of Great Leap Forward campaign initiated in China was
to transform agrarian economy into a modern economy through
rapid industrialisation.
Reason (R): Under Great Leap Forward campaign students and professionals
were sent to work and learn from the countryside.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

15. Read the following statements: Assertion and Reason. 136

 Choose one of the correct alternatives given below:
Assertion (A): After the establishment of the People's Republic of China under
one-party rule, all critical sectors of the economy, enterprises, and
lands owned and operated by individuals were brought under
government control.
Reason (R): The key policy of the Chinese Communist Party's was to
implement a socialist planned economy and consolidate control
over key sectors of the economy.
Alternatives:
1. Both Assertion (A) and Reason (R) are correct and (R) is the correct
explanation of Assertion (A)
2. Both Assertion (A) and Reason (R) are correct but (R) is not the correct
explanation of Assertion (A)
3. Assertion (A) is true but Reason(R) is false
4. Assertion (A) is false but Reason(R) is true

Case Study - 1 135

Over the last two decades or so, the economic transformation that is taking place
in different countries across the world, partly because of the process of
globalisation, has both short as well as long-term implications for each country,
including India. Nations have been primarily trying to adopt various means
which will strengthen their own domestic economies. To this effect, they are
forming regional and global economic groupings such as the SAARC, European
Union, ASEAN, G-8, G-20, BRICS etc. In addition, there is also an increasing
eagerness on the parts of various nations to try and understand the
developmental processes pursued by their neighbouring nations as it allows them
to better comprehend their own strengths and weaknesses vis-à-vis their
neighbours.
16. In the last two decades, which of the following has played a role in fostering
economic transformation in numerous countries?
1. Political stability
2. Globalisation
3. Natural disasters
4. Isolationist policies
17. An example of a regional economic coalition is
1. G-20
2. BRICS
3. European Unioin
4. OPEC
18. The rationale for the establishment of regional and global economic alliances is
1. To create military alliances
2. To promote cultural exchange
3. To strengthen their domestic economies
4. To establish political dominance
19. The main benefit of nations trying to understand the developmental processes of
their neighbouring countries is
1. To promote competition and rivalry
2. It allows them to interfere in their neighbour’s affairs
3. It helps them assimilate their own strengths and weaknesses
4. It leads to political conflicts
20. Identify the given logo of member countries with international group?

1. SAARC
2. BRICS
3. OPEC
4. EUROPEAN UNION (EU)
Case Study – 2 139
One of the much-talked issues around the world about China is its growth of
Gross Domestic Product. China has the second largest GDP (PPP) of $22.5
trillion in the world, whereas, India's GDP (PPP) is $9.03 trillion and Pakistan's
GDP is $0.94 trillion, roughly about 11 per cent of India's GDP. India's GDP is
about 41 per cent of China's GDP.
When many developed countries were finding it difficult to maintain a growth
rate of even 5 per cent, China was able to maintain near double-digit growth
during 1980s as can be seen from the Table. Also, notice that in the 1980s,
Pakistan was ahead of India: China was having double-digit growth and India
was at the bottom. In 2015-17, there has been a decline in Pakistan
and China's growth rates, whereas, India met with moderate increase in growth
rates. Some scholars hold the reform processes introduced in Pakistan and
political instability over a long period as reasons behind the declining growth
rate in Pakistan. We will study in a later section which sector contributed to
different growth rates in these countries.

21. One factor that did not contribute to China’s growth of GDP is
1. Global trade partnerships
2. Establishment of SEZs
3. Commune system
4. Openness to foreign investments
22. The primary factor contributing to china’s status as the world’s second largest
economy is:
1. A large population and labour force.
2. Extensive natural resource reserves.
3. Exceptional technology and innovation.
 4. Strong political influence in global affairs.
23. One reason that led to Pakistan outpacing India in terms of economic growth in 1980s
was:
1. Pakistan had a larger population than India.
2. India was facing political instability.
3. India was focusing on high-tech industries.
4. Pakistan had a more extensive infrastructure.
24. Why is political stability often considered a vital factor in economic growth?
1. It attracts foreign investments.
2. It ensures a competitive labor force.
3. Political stability has no impact on economic growth.
4. It fosters a favourable environment for businesses.
25. One of the primary factors contributing to the declining growth rate in Pakistan
is
1. Political stability
2. Robust infrastructural development
3. Energy shortages
4. High agricultural productivity

Answer Key
S No. Answer
1. 3. to attract foreign investors
2. 1. agriculture
3. 4. Pakistan
4. 1. Political freedom
5. 1. Great leap forward
6. 1. Pakistan
7. 2. A-IV, B-III, C-II, D-I
8. 1. A- III, B- IV, C-I, D- II
9. 4. B, C and D only
10. 1. A, C and D only
11. 4. D,A,B,C,E
D. Creation of Pakistan(1947)
A. Establishment of People’s Republic of china(1949)
B. At this time, 26000 communes were covering almost all the farm population in China(1958)
C. Economic reforms in China(1978)
E. Economic reforms in india(1991)
12. 2. A,D,B,C,E
A. Pakistan like India also followed the mixed economy model with co-existence of public and private
sectors.(1950s)
D. Introduction of Green Revolution(1960s)
B. Nationalisation of capital goods industries(1970s)
C. Private sector was encouraged and incentives were given(1980s)
E. Economic reforms were initiated in the country(1988)
13. 3.B,A,C,E,D
B. India announced its first Five Year Plan for 1951-56.
A. China announced its First Five Year Plan in 1953.
C. Pakistan announced its first five-year plan (Medium Term Development Plan) in 1956.
 E. As of 2018, Pakistan is working on its 12th Five Year Development Plan (2018-23).
D. As of 2021, China is working on its 14th Five Year Plan (2021-25).
14. 3. Assertion (A) is true but Reason(R) is false
15. 1. Both Assertion (A) and Reason (R) are correct and (R) is the correct explanation of Assertion (A)
16. 2. Globalisation
17. 3. European Unioin
18. 3. To fortify their domestic economies
19. 3. It helps them assimilate their own strengths and weaknesses
20. 2. BRICS
21. 3. Commune system
22. 1. A large population and labor force
23. 2. India was facing political instability(emergency, assassination of Indira Gandhi, Sikh riots)
24. 4. It fosters a favorable environment for businesses.
25. 3. Energy shortages