Royal Singh

Royal academy Auraiya

ECOMONICS PRACTICE
Class 12 - Economics
Time Allowed: 1 hour and 30 minutes Maximum Marks: 68

1. Income of the family is the example of which variable? [1]

a) Both stock and flow b) Stock

c) Neither stock nor flow d) Flow

2. Which one of the following is an intermediate expenditure? [1]
A. Expenditure on purchase of furniture by a firm for its own use
B. Expenditure on maintenance by a firm
C. Expenditure on purchase of tractor by a firm for its own use

h
D. Machine bought by a household

a) Only C
ing
b) Only D

c) Only B d) Only A
lS
3. Those goods which satisfy human wants directly are called: [1]

a) intermediate goods b) capital goods

ya

c) consumer goods d) Investment goods

4. Stock variable is defined as a variable which is: [1]
Ro

a) Measured over a period of time b) Measured at a particular point of time

c) Cannot be measured d) Measured but time is not defined

5. Which of the following are stocks? [1]

a) Profits b) Wealth

c) Exports d) Saving
6. Which of the following is not a flow? [1]

a) Capital b) Depreciation

c) Income d) Investment
7. Market price and factor cost will be equal when there is: [1]

a) No indirect tax b) No indirect tax and no subsidy

c) No direct tax d) No subsidy

8. Domestic territory of country includes [1]

a) embassies of a country located abroad b) political frontiers

c) territorial water d) All of these

1/5
contact us on :7905222754
 9. In a two sector economy, in which of the following way the households may dispose off their entire earning or [1]
income?

a) Savings b) To buy imported goods.

c) Payment of taxes to the government. d) Spending on the goods and services

produced by the domestic firms.
10. Value added refers to: [1]

a) Output – intermediate consumption b) Expenditure on intermediate goods

c) Production of non-durable goods d) Production of durable goods

11. If the GDP deflator is 150% and real GDP is ₹ 1,100 the nominal GDP will be: [1]

a) ₹ 1,100 b) ₹ 2,750

c) ₹ 733 d) ₹ 1,650
12. Which one of the following is not included in compensation of employees? [1]

a) Payment of bonus to employees b) Free medical facilities by the employer

c) House rent allowance to employees d) Festival gift from the employer

h
13. Net indirect tax is ________. ing [1]

a) income tax b) difference between indirect taxes and

Subsidies
lS
c) corporate tax d) difference between direct taxes and
subsidies
14. Assertion (A): The flour purchased by a baker is considered an intermediate good. [1]
ya

Reason (R): The flour is used for the production of bread, cakes and biscuits to be sold to the consumer.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
Ro

explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

15. Assertion (A): Inventory is a stock variable. [1]
Reason (R): It is measured at a given point of time.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

16. Assertion (A): Domestic Income is equal to National Income in case of Closed Economy. [1]
Reason (R): Closed Economy has no economic relations with rest of the world.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

17. Assertion (A): Steel sheets used for making automobiles and copper used for making utensils are intermediate [1]
goods.

2/5
contact us on :7905222754
 Reason (R): They are purchased with the purpose of using them completely during the same year for production
of steel gates/utensils.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

18. Assertion (A): Brokerage on the sale/purchase of shares and bonds is to be included. [1]
Reason (R): They form the value of final goods and so need to be included with respect to the Value Added
Method.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

19. Assertion (A): Operating Surplus does not arise in the general government sector. [1]
Reason (R): General Government produces goods and services with the aim of earning profit without an
intention of social welfare.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the

h
explanation of A. correct explanation of A.

c) A is true but R is false.

ing
d) A is false but R is true.
20. Should purchase of wheat in the wholesale market be treated as the purchase of intermediate goods? [3]
21. Give reasons and categorise the following into stock and flow variables. [4]
lS

i. Profits
ii. Capital
ya

iii. Savings
iv. Balance in Bank account
Ro

22. Explain the circular flow of income in a three sector economy [6]
23. Giving reason, explain the treatment assigned to the following while estimating national income: [3]
i. Expenditure on the maintenance of an office building.
ii. Expenditure on adding a floor to the office building.
24. Define Real Gross Domestic Product (GDP). Is Gross Domestic Product a true index of the economic welfare of [4]
the people? Give two reasons in support of your answer.
25. Write down some of the limitations of using GDP as an index of the welfare of a country. [4]
26. Define the following: [6]
i. Capital Goods
ii. Gross Domestic Product
iii. Flow Variables
iv. Income from property and entrepreneurship
27. From the following data, estimate the value of Net Indirect Taxes (NIT): [3]

S.No. Particulars Amount (₹ in crore)

(i) Net National Product at Market Price (NNPMP) 1,400

(ii) Net Factor Income from abroad (-)20

3/5
contact us on :7905222754
 (iii) Gross National Product at Factor Cost (GNPFC) 1,300

(iv) Consumption of fixed capital 100

28. How will you treat the following while estimating National Income? Give reasons for your answer. [4]
i. Salaries received by non-residents Indian working in Russian Embassy in India.
ii. Profits earned by an Indian bank from its branches abroad.
iii. Entertainment tax received by the government.
29. From the following data show that, Net Value Added at factor cost (NVAFC) is equal to the sum of factor [6]

income:

S.No. Particulars Amount (in ₹ crore)

i. Consumption of fixed capital 90

ii. Imports of raw material 120

iii. Change in stock 240

iv. Goods and Services Tax 60

h
v. Domestic sales 2,160

vi. Distributed profits

ing 180

vii. Retained earnings 120

viii. Purchase of raw material 840

lS

ix. Exports 240

x. Rent and Royalty 90

ya

xi. Compensation of employees 720

Ro

xii. Interest 540

30. Estimate the missing values (?), if the value of Gross Domestic Product at factor cost (GDPfc) by Expenditure [6]

Method and Income Method is ₹ 920 crore:

S.No. Items Amount (in ₹ crore)

(i) Consumption of Fixed Capital 170

(ii) Change in Stock 140

(iii) Mixed-Income of Self-employed 180

(iv) Operating Surplus ?

(v) Gross Domestic Fixed Capital Formation 140

(vi) Government Final Consumption Expenditure ?

(vii) Net Exports (-)50

(viii) Net Indirect Taxes 60

(ix) Private Final Consumption Expenditure 470

4/5
contact us on :7905222754
(x) Compensation of Employees 375

(xi) Employers' Contribution to Social Security Schemes 150

h
ing
lS
ya
Ro

5/5
contact us on :7905222754