Page 1 Sample Paper 06

Sample Paper 06
Class - 12th Exam - 2024 - 25
Economics (030)
Time : 3 Hours Max. Marks : 80
General Instructions :
1. This question paper contains two sections :
Section A – Macro Economics
Section B – Indian Economic Development
2. This paper contains 20 Multiple Choice Type Questions of 1 mark each.
3. This paper contains 4 Short Answer Type Questions of 3 marks each to be answered in 60 to
80 words.
4. This paper contains 6 Short Answer Type Questions of 4 marks each to be answered in 80 to
100 words.
5. This paper contains 4 Long Answer Type Questions of 6 marks each to be answered in 100 to
150 words.

SECTION-A - Macro Economics

1. Read the following statements carefully:

Assertion (A): Net Domestic Product (NDP) is always less than Gross Domestic Product
(GDP) due to the adjustment for depreciation.
Reason (R): Depreciation represents the wear and tear of capital goods over time, which
must be subtracted from GDP to obtain NDP, reflecting the actual addition to the economy’s
productive capacity.
Choose the correct option from those given below:
(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, but 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.

2. “The Reserve Bank of India has decided to conduct Open Market Operations by purchasing
government securities worth `20,000 crore. This move is intended to inject liquidity into the
economy and make more funds available for lending by commercial banks.”
Source: [RBI Press Release, 2023] (https://www.rbi.org.in/Scripts/BS_
PressReleaseDisplay.aspx?prid=54001)
What immediate effect does this action have on the money supply in the economy?

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Page 2 Sample Paper 06 CBSE 12th Economics

(A) Decrease in money supply (B) Increase in money supply

(C) No change in money supply (D) Decrease in bank reserves

3. The ratio that measures the change in consumption resulting from a change in income is called
the Marginal Propensity to ________, indicating consumer spending behavior.
Choose the correct option to fill in the blank.
(A) Save (B) Invest
(C) Consume (D) Expend

4. If the fiscal deficit is `10 lakh crore and interest payments are `2 lakh crore, the ________
deficit is `8 lakh crore.
Choose the correct option to fill in the blank.
(A) Revenue (B) Budgetary
(C) Primary (D) Capital

5. The difference between Gross Domestic Product (GDP) and Net Domestic Product (NDP) is
______.
Choose the correct option to fill in the blank.
(A) Depreciation (B) Net Indirect Taxes
(C) Net Factor Income from Abroad (D) Personal Disposable Income

6. Read the following statements carefully:

Statement 1: The process of money creation by commercial banks involves accepting deposits
and making loans, where the initial deposit leads to a multiplied increase in the total money
supply through the credit creation process.
Statement 2: The reserve ratio set by the central bank has no impact on the money creation
ability of commercial banks because banks can create unlimited credit regardless of reserve
requirements.
In light of the given statements, choose the correct option from the following:
(A) Both Statements 1 and 2 are true.
(B) Statement 1 is false and Statement 2 is true.
(C) Both Statements 1 and 2 are false.
(D) Statement 1 is true and Statement 2 is false.

7. When an economy is operating below its full employment level due to insufficient aggregate
demand, it is experiencing a _______ gap. This situation can be mitigated by implementing
expansionary fiscal policies such as increasing government expenditure or decreasing taxes.
Choose the correct option to fill in the blank.
(A) Inflationary (B) Deflationary
(C) Recessionary (D) Expansionary
Page 3 Sample Paper 06

8. Read the following statements carefully:

Statement 1: The government budget is an annual financial statement that presents the
estimated receipts and expenditures of the government for a particular fiscal year, serving as a
tool for economic policy.
Statement 2: The primary deficit is calculated by subtracting interest payments from the fiscal
deficit, reflecting the government’s borrowing requirements excluding interest obligations.
In light of the given statements, choose the correct option from the following:
(A) Statement 1 is true and Statement 2 is false.
(B) Both Statements 1 and 2 are true.
(C) Statement 1 is false and Statement 2 is true.
(D) Both Statements 1 and 2 are false.

9. “During January to November 2007, India experienced a rise in overseas investment amounting
to a net $18.8 billion of stocks and bonds.”
This will be recorded in which account of balance of payments?
(A) Current account
(B) Capital account
(C) Both (A) and (B)
(D) Neither (A) nor (B)

10. Which of the following gives a correct definition of the term ‘near money’ ?
(A) Asset which has no store of value function.
(B) Asset which is a medium of exchange.
(C) Asset which has 100% liquidity.
(D) Asset which fulfils the store of value function and can be converted into a medium of
exchange at a short notice.

11. Credit creation by commercial banks is determined by _________ .

(A) Statutory Liquidity Ratio (SLR)
(B) Initial deposits
(C) Cash Reserve Ratio (CRR)
(D) All of these

12. Choose the correct statement from given below.

(A) Accommodating items are only recorded in capital account of BoP.
(B) Import of machinery will be recorded in capital account of BoP.
(C) Balance of trade records the exports and imports of invisible items.
(D) A surplus in BoT can rectify the deficit in BoP.
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13. Statement I : According to the theory of Keynesian Economics, the value of the Average
Propensity to Consume (APC) can never be zero.
Statement II : The Keynesian Aggregate Supply is perfectly elastic before the level of full
employment is attained.
In the light of the given statements, choose the correct alternative from the following
(A) Both statements are false
(B) Both statements are true
(C) Statement I is true and Statement II is false
(D) Statement I is false and Statement II is true

14. The government of India has decided to vaccinate the adult population of India (with Covaxin/
Covishield), without any charge. This would be categorised as_________.
(A) revenue nature income
(B) capital nature expenditure
(C) revenue nature expenditure
(D) capital nature income

15. Analyse the following chart carefully and answer the given question

When money moves out of the circular flow of income, it is known as________
(A) Leakages
(B) Dividends
(C) Injections
(D) None of the above

16. Which of the following is correct?

(A) APC + APS = 1 (B) APC = C/Y
(C) MPC = 1 – MPS (D) All of these
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17. Find the missing figures and choose the correct alternatives.
Consumption (C) Saving (S) Supply Aggregate (C + S)
80 –80 0
240 ...(i)... 200
...(ii)... 0 400
560 40 ...(iii)...
...(iv)... 80 800
Alternatives
(A) –40, 600, 400, 560 (B) 40, 400, 600, 720
(C) –40, 400, 600, 720 (D) –40, 400, 800, 560

18. Assertion : There is an inverse relationship between the value of investment multiplier and
marginal propensity to consume.
Reason : Saving is a leakage in the circular flow of income. Greater the savings, greater the
leakage and lower the value of investment multiplier.
In the light of the given statements, choose the correct alternative from the following
(A) Assertion is true, but Reason is false
(B) Assertion is false, but Reason is true
(C) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(D) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

19. Calculate Net National Product at Market Price from the following data
Items ` (in crores)
Net factor income from abroad (–) 5
Private final consumption expenditure 100
Personal tax 20
Gross national disposable income 170
Government final consumption expenditure 20
Corporation tax 15
Gross domestic capital formation 30
Personal disposable income 70
Net exports (–) 10
Savings of private corporate sector 5
Net national disposable income 145
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20. India’s balance of payments is in disequilibrium. Enumerate some of the factors, which according
to you, can be the causes of disequilibrium.


O
What is meant by managed floating?

21. In an economy, if initial investments are increased by ` 100 crores, discuss the working of
investment multiplier presuming marginal propensity to consume is 0.8.

22. “There are various components of money supply as used by the RBI”. Do you agree with the
given statement? Explain.

23. ‘Mission Develop India’ is the plan of government to create basic infrastructure. It comprises of
projects on irrigation, roads, housing, water supply and telecommunication connectivity.
Above stated example is a government expenditure or government revenue. Elaborate it. Also,
state the impact of this programme on rural growth.


O
Can a fiscal deficit occur without a revenue deficit?

24. (i) Explain the circular flow of income.

(ii) Distinguish between Real Gross Domestic Product and Nominal Gross Domestic Product.

25. (i) The figure given explains the working of a ‘reverse repo rate’ in context of a given economy.
In simple terms, explain how reverse repo rate helps in correcting the situation of ‘excess
demand’ ?

(ii) What are the elements important in the determination of investment?

O
(i) Explain the concept of deflationary gap and the role of ‘open market operations’ in
reducing this gap.
(ii) Using a well-labelled diagram, show how saving curve can be derived from consumption
curve.
Page 7 Sample Paper 06

Section-B - Indian Economic Development

26. “Modernisation as a planning objective refers to the use of new and modern technology in
production process.” In the context of the given statement, which of the following is/are the
components of modernisation a planning objective?
(A) Modernisation in the technology
(B) Modernisation in the outlook
(C) Both (A) and (B)
(D) Neither (A) and (B)

27. Assertion : Government policies have failed to address the vast majority of vulnerable people
who are living on orjust above the poverty line due to unemployment.
Reason : High growth alone is not sufficient to reduce unemployment. Without the active
participation of the poor, successful implementation of any programme is not possible.
In the light of the given statements, choose the correct alternative from the following:
(A) Assertion is true, but Reason is false
(B) Assertion is false, but Reason is true
(C) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(D) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

28. Which of the following provides a correct explanation of rural development?

(A) Social and legal upliftment of rural areas
(B) Social and economic upliftment of rural areas
(C) Economic and legal upliftment of rural areas
(D) Social and technical upliftment of rural areas

29. The main objective of the zamindars during the land settlement system was to
(A) collect rent with no interest in the economic condition of the cultivators
(B) cooperate with colonial government to improve the condition of agriculture
(C) improve the economic condition of the cultivators
(D) improve the crop yield by making significant contributions in technology and fertilisers
usage

30. ______ means designing and shaping the socio-economic processes in such a way so as to
achieve an objective.
(A) Economic Planning
(B) Economic Growth
(C) Economic Process
(D) Economic Development
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31. Arrange the given events in chronological order and choose the correct alternative
(i) Great Proletarian Cultural Revolution
(ii) Great Leap Forward Campaign
(iii) Introduction of Economic Reforms
(iv) First Five Year Plan
(A) (ii), (iv), (i), (iii)
(B) (ii), (iv), (iii), (i)
(C) (iv), (i), (ii), (iii)
(D) (iv), (ii), (i), (iii)

32. ________ has followed the classical development pattern of gradual shift from agriculture
to manufacturing and then to service.
(A) India
(B) China
(C) Pakistan
(D) All of these

33. Choose the correct pair

Column I Column II
(a) Voluntary (i) Worker is willing to work but is not getting work
unemployment
(b) Involuntary (ii) Worker is not willing to work at existing wage rate
unemployment
(c) Frictional (iii) A worker is not getting work in a particular season
unemployment
(d) Disguised (iv) Marginal productivity of a worker is zero
unemployment
Codes
(A) (c) - (iii) (B) (d) - (iv)
(C) (a) - (i) (D) (b) - (ii)

34. Statement I : Institutional credit availability is imperative for development of rural areas.
Statement II : Reserve Bank of India is the apex institution in rural banking to regulate the
banking system.
In the light of the given statements, choose the correct alternative from the following:
(A) Both the statements are correct
(B) Both the statements are incorrect
(C) Statement I is correct and Statement II is incorrect
(D) Statement II is correct and Statement I is incorrect
Page 9 Sample Paper 06

35. Observe the picture given below and choose the correct statement from the options given below.

(A) Investment in human capital reinforces GDP

(B) Health is the only component of human development
(D) Both (A) and (B)
(B) Both the statements are false

36. The figure given below provides a snapshot of the report published by UN WOMEN and other
associates. It asks how the United Nations system, and each individual entity, can better support
Member States to empower women and promote women’s leadership in disaster and climate
risk governance. On the basis of your understanding, can you comment on the relationship
between ‘Empowering women, means employing women’.
Page 10 Sample Paper 06 CBSE 12th Economics

37. Defend or refute the following statement with valid explanation.

‘Chinese structural reform process have always been appreciated for its success with no failures’.


O
Critically evaluate various strategies that have been adopted by the Chinese government for
its growth and development.

38. State whether the following statements are true or false, with valid arguments :
(i) There has been a decline in growth rate of agricultural sector during the reform period.
(ii) There were several hurdles faced by the land reform and the land ceiling legislation during
the pre-reform period.

39. The following table shows distribution of workforce in India for the year 1972-73. Analyse it
and give reasons for the nature of workforce distribution.
Place of Residence Workforce (in millions)
Male Female Total
Rural 125 69 194
Urban 32 7 39

40. “India, China and Pakistan have many similarities in their development strategies.” Elaborate.


O
(i) Define liberty indicators.
(ii) ‘China’s rapid industrial growth can be traced back to its reforms in 1978.’ Support the
given statement with valid explanation.

41. (i) Differentiate between a worker, non-worker and an unemployed person.

(ii) Give two examples of overuse of environmental resources.
(iii) Give any two points of differences between physical and human capital.


O
(i) Read the given lines taken from the article on ‘Sustainable human development means
living in harmony with nature’ published by International Science Council on 17th July,
2020.
“We cannot be developed unless our lives become reconnected and in balance, cooperation
and harmony with nature.” In light of the given statement, explain how development has
become a burden on the environment?
(ii) “Micro credit has an important role to play in meeting the credit requirements of the
poor”. Defend or refute the statement with valid explanation.
Page 11 Sample Paper 06

42. Read the following text carefully and answer the given question on the basis of the same and
common understanding
India agreed to the conditionalities of World Bank and IMF and announced the New Economic
Policy (NEP). The NEP consisted of wide ranging economic reforms. The thrust of the policies
was towards creating a more competitive environment in the economy and removing the barriers
to entry and growth of firms. This set of policies can broadly be classified into two groups: the
stabilisation measures and the structural reform measures. Stabilisation measures are short-
term measures, intended to correct some of the weaknesses that have developed in the balance
of payments and to bring inflation under control. In simple words, this means that there was a
need to maintain sufficient foreign exchange reserves and keep the rising prices under control.
On the other hand, structural reform policies are long-term measures, aimed at improving the
efficiency of the economy and increasing its international competitiveness by removing the
rigidities in various segments of the Indian economy. The government initiated a variety of
policies which fall under three heads viz., liberalisation, privatisation and globalisation.
Another reform measure taken to simplify the tax structure and avoid cascading of taxes has
been taken in the new millennial, in particular the Goods and Services Tax (GST). The genesis
of the introduction of GST in the country was laid down in the historic Budget Speech of 28th
February 2006, wherein the then
Finance Minister laid down 1st April, 2010 as the date for the introduction of GST in the
country. Thereafter, there has been a constant endeavour for the introduction of the GST in the
country whose culmination has been the introduction of the Constitution (122nd Amendment)
Bill in December, 2014.
(i) Justify the following statement with valid explanation
“Economic reforms have restricted the role of Public Sector Units (PSUs) in the country.”
Discuss.
(ii) On the basis of your knowledge and understanding, can you think of some reasons how
GST is beneficial from trade and industry’s perspective.