0%

Peevees
Public School
NILAMBUR-KERALA

ACADEMIC YEAR 2024-25

MODEL ASSESSMENT I

Maximum marks: 80 Time allowed: 3 Hours

Subject: ECONOMICS Class: XII C

Day and Date: Wednesday,01/01/2025
General Instructions:
e This Question Paper contains two sections.
e Section A : Macroeconomics
e Section B : Indian Economic Development
e This paper contains 20 Multiple Choice Questions of 1 mark each.
e This paper Contains 4 Short Answer Questions of 3 marks each to be answered in 60-80 words.
e This paper contains6 Short Answer Questions of 4 marks each to be answered in 80-100 words.
e This paper contains 4 Long Answer Questions of 6 marks to be answered in 100 — 150 words.

SECTION — A
Macroeconomics
1. The trade balance graph from the Ministry of Commerce shows that there was a __ __ of
USD during April-July 2024. 1

Total Trade during April-July 2024

300 292.64

290
280 272.72
§ 270 261.47
m 260 245.18
2 250
240
230
220
April-July 2023 April-July 2024

QExports @ Imports

Source; Ministry of Commerce, Trade Balance Report 2024

(a) Deficit, 31.17 (b) Deficit, 27.54

(c) Surplus, 31.17 (d@) Surplus, 27.54
2. Aggregate demand can be increased by: 1
(a) increasing bank rate
(>) selling government securities by Reserve Bank of India
(c) increasing cash reserve ratio
(d@) None of the above

1
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD 1 | DECEMBER 2024 | XII C| ECONOMICS] ANI V
3. Read the following statements carefully: 1|
Statement 1: Stock of money with commercial banks is a part of money supply.
Statement 2: Gross demand deposits are not a part of money supply.
In the light of the given statements, choose the correct alternative from the following:
(a) Statement | is true and statement 2 is false
(b) Statement | is false and statement 2 is true
(c) Both statements | and 2 are true
(d) Both statements | and 2 are false
4. Two friends Naman and Hemant were arguing on recording a particular statement in Balance of
Payments Account of India. Identify who is correct? 1
Newent Make in India campaign will bring foreign investments in India and are recorded on the
credit side of the capital account.
Make in India campaign will bring foreign investments in India and are recorded on the
Hemanti of the current account.
(a) Naman is correct (6b) Hemant is correct
(c) Both are correct (¢@) Both are incorrect
5. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct
alternatives given below: 1
Assertion (A): Deposits by people in Provident Fund and NSC are revenue receipts of the
government.
Reason (R): Revenue receipts are the receipts which neither create liabilities nor leads to any
reduction is the assets of the government.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(6) 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

6. Suppose in an economy, the initial deposits of t 400 crore lead to the creation of total deposits worth
% 4,000 crore. Under the given situation, the value of reserve requirements would be 3h
(a) 0.01 (b) 1 (c) 01 (d) 0.4
7. Which of the following statements is true? 1
(a) Bread is always a consumer good
(b) All producer goods are not capital goods
(c) Transfer income is received for providing a good or service in return
(d¢) Interest paid by a household on car loan from a bank is a factor payment
8. From the given diagram, which level of income represents under employment equilibrium such
that point E represents full employment equilibrium. 1
Y

2
2§ wo
o a
£3
$2
3 S
<

oO

Options:
(a) OY, (b) E,Y, (c) OY, (d) E,Y,

2
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD | | DECEMBER 2024 | XII C] ECONOMICS] ANI V
 ce
9. Choose the correct alternative to be filled in given blanks A, B and C. 1

Revenue Capital

i pian) Rane
B Revenue Cc Capital
Expenditure Expenditure

(a) A — Revenue receipts, B — Capital receipts, C - Government budget

(b) A — Capital receipts, B- Government budget, C — Revenue receipts
(c) A—- Capital receipts. B — Revenue receipts, C - Government budget
(d@) A - Government budget, B — Revenue receipts, C — Capital receipts
10. Read the following statements carefully: 1
Statement I: Equilibrium in Balance of Payments is achieved when the net value of all the receipts
and payments is zero.
Statement 2: Export and import of goods and services are recorded in the “Current Account’ of BoP.
In the light of the given statements, choose the correct alternative from the following:
(a) Statement | is true and statement 2 is false
(b) Statement | is false and statement 2 is true
(c) Both statements | and 2 are true
(dq) Both statements | and 2 are false
(a4) “Domestic/household services performed by a woman may not be considered as an economic
acuvity.” Defend or retute the given statement with valid reason.
(b) “Compensation to the victims of a cyclone is an example of a welfare measure taken by the
government.” State with valid reason, should it be included/not included in the estimation of
national income of India. 3

12. (A) “Indian Rupee (%) plunged to all time low of % 84.48 against the US Dollar ($)”.
—The Economic Times

In the light of the above report, discuss the impact of the situation on Indian exports and
imports. 3
Or

(B) “Trade Deficit must exist if a country is facing a situation of Current Account Deficit (CAD).”
Defend or refute the given statement with valid arguments. 3
Read the following text carefully: 4
Reserve Bank of India (RBI) on Friday said it has imposed a penalty of % 5.72 crore on Federal
Bank for deficiencies in regulatory compliance. A penalty of % 70 lakh has also been imposed

on Bank of India for non-compliance with certain provisions of Know Your Customer (KYC)
norms and instructions on compliance function in banks issued by RBI, it said in a statement.
About Federal Bank, RBI said the bank failed to ensure that no incentive (cash or non-cash)
was paid to its staff engaged in insurance broking/corporate agency services by the insurance
company, according to a separate statement. — The Times of India; 8th July 2022
Based on the given text and common understanding, explain the relevant function of the Central
Bank (RBI) indicated here.
14. In an economy, C = 200 + 0.5 Y is the consumption function where C is the consumption
expenditure and Y is the national income. Investment expenditure is % 400 crores. Is the economy
in equilibrium at an income level 7 1,500 crores? Justify your answer. 4

3
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD | | DECEMBER 2024 | XII C] ECONOMICS] ANI V
15. (A) The Government, under Ujjwala Yojana, is providing free LPG kitchen gas connections to
the families ‘below the poverty line’, What objective is the government trying to fulfil through
the government budget and how? Explain. 4
Or
(B) Explain the distinction between the following:
(a) Revenue expenditure and Capital expenditure in a government budget
(b>) Primary deficit and Fiscal deficit 4
16. Read the following text carefully:
Aggregate Demand (AD) and Aggregate Supply (AS) in the Indian Economy
In macroeconomics, Aggregate Supply (AS) and Aggregate Demand (AD) are key ideas that are
used to comprehend a nation’s total economic activity. This case study looks at how changes in
AD and AS have affected the Indian economy, with an emphasis on current developments and
legislative solutions.
Historical Context
Pre-Liberalisation Era; !"dia had relatively slow economic growth before economic reforms in
1991, marked by a regulated economy with litthe dynamism in AD and AS. Rigid demand and
inefficient manufacturing led to widespread high inflation and stagnant growth. From 1991
onwards, after economic changes brought about trade liberalisation, stronger investment, and
higher consumer expenditure, AD soared. The labour market changes, increased efficiency, and
adoption of technology all contributed to the expansion of the AS side.
Recent Trends
Trends in Aggregate Demand (AD)
° India’s economy expanded rapidly between 2014 and 2019, propelled by
Aismbandemin ay expenditures, stronger consumer spending, and more investment. A shift
to the right in the AD curve indicated a rise in the demand for products and services.
* As a result of decreased corporate investment, a decline in consumer
GSekalrd 2Randewipions to international trade, the pandemic significantly reduced AD. A
leftward shift in the AD curve resulted in lower output and a decline of the economy.

‘Trends in Aggregate Supply (AS)

© Supply Chain Disruptions: The COVID-19 pandemic also had an effect on AS by causing supply
networks to become unstable, which resulted in a shortage of raw materials and production
delays. As a result, the AS curve shifted to the left, which fuelled supply-side inflation.
e Post-Pandemic Recovery: Efforts were made to improve productivity and restructure supply
chains as the economy started to recover. However, AS was still impacted by ongoing problems
with the supply chain and growing material prices.
Difficulties

e Inflation: Maintaining a balance between AD and AS to curb inflation and bolster growth is
still a difficult task, particularly in times of supply chain interruptions and escalating commodity
COSTS.

¢ Economic Inequality: Ensuring that the advantages of growth are shared fairly and that changes
in AD and AS do not disproportionately impact lower-income groups, ensuring that it benefits
more than just the wealthiest segments of society.
On the basis of the given text and common understanding, answer the following questions:
(a) What effects did the 1991 economic changes have on India’s Aggregate Supply (AS) and
Aggregate Demand (AD)?
(b) In the Indian economy, what are some of the main obstacles to striking a balance between
Ageregate Supply (AS) and Aggregate Demand (AD)? 3+3=6

4
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD | | DECEMBER 2024 | XII C] ECONOMICS] ANI V
 17. (A) (i) Interpret the given picture on account of domestic and national income.

(i) From the given data, find the value of Net National Product at Market Price:

S.No. Particulars ‘ Peas

(i) Gross domestic fixed capital formation 400
(ii) Private final consumption expenditure 8.000
(il) Government final consumption expenditure 3,000
(iy) Change in stock 50
(v) Consumption of fixed capital 40

(i) Net indirect taxes 100

(vil) Net exports (-) 60
(viii) Net factor income to abroad (-) 80
(ix) Net current transfers from abroad 100
(x) Dividend 100
34+3
Or

(B) (i) What is real flow and money flow?

(ii) What precautions should be taken while measuring national income using income method.
3+3

SECTION — B
Indian Economic Development

18. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct
alternatives given below: 1
Assertion (A): Airport Authority of India has given the status of Maharatnas.
Hindustan Aeronautics Limited has given the status of Navrainas.
Reese Ges:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(>) Both Assertion (A) and Reason (R) are true and Reason (R) ts not the correct explanation
of Assertion (A)
(c) Assertion (A) is true but Reason (R) ts false
(d) Assertion (A) is false but Reason (R) is true

19. was formed on the proposal of Zia-ur-Rahman, the Former President of Bangladesh. 1
(a) G-8 or G-7 (b) ASEAN
(c) BRICS (d) SAARC

5
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD 1 | DECEMBER 2024 | XII C| ECONOMICS] ANI V
20. During the British rule, the economic policies pursued by the colonial government in India
were concerned more with the protection and promotion of the economic interests of their
home country than with the development of the Indian economy. Such policies brought about
a fundamental change in the structure of the Indian economy — transforming the country into
supplier of raw materials and consumer of finished industrial products from Britain. The growth
of the aggregate real output was less than 2%, during the first half of the 20th century and the
growth of [per capita income was just 0.5% p.a. Why was this a challenge for India’s foreign
trade? I
(a) India’s foreign trade was unbalanced, with important raw materials being exported.
(>) India’s foreign trade was oriented to feed the Industrial Revolution in Britain,
(c) Export earnings were used to make payments for the expenses of wars fought by the British
government.
(d) The agricultural sector accounted for the largest share of the total workforce in India, almost
70-75%.
21. From the set of events/systems given in Column | and corresponding relevant fact given in Column II,
choose the correct pair of statement: 1
Column I Column II
A. Apni Mandi () [tis located in Pune.
B. Rvthu Bazars (i) These are the fruit markets located in Andhra
. Pradesh.
C, Hadaspur Mandi (ii) Wis located in Punjab, Haryana and Rajasthan.
D.. Uthavar Sandies (iv) These are farmer markets in Maharashtra.
Alternatives:
(a) A-(i) (b) .
C = (iii) eo
vi ‘ : -
22. “Carrying capacity of the environment is like a plimsoll line of the ship.”
(d) Dit) 5 eri This= statement was given
:
by: 1

(a) Brundtland Commission (b) Herman Daly

(c) Edward Barbier (d) John Tucker
23. Based on the chart, which sector experienced the highest growth rate in 2017-18?
Growth of agriculture and allied sectors
18+
16+
14>
12+

bt
= 10F

® 6
s
4

at | [
0
gt 2017-18 [2018-19 2019-20 2020-21 2021-22 2022-23
4

PR Crops Ma
Livestock GEE Fishing
and aquacutture =O Apnculture

Source: National Statistical Office (NSO) MM’ Statistics & Pi

(a) Crops (b) Livestock

(c) Fishing and Aquaculture (d) Agriculture

6
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD | | DECEMBER 2024 | XII C] ECONOMICS] ANI V
24. The two well-managed iron and steel firms during 1950-90s were located in and
1
(a) Mumbai; Nagpur (6) Kolkata; Jamshedpur
(c) Mumbai; Jamshedpur (d) Nagpur: Bhopal
25. Arrange the following events of India in the correct chronological order and choose the correct
alternative: I
({) Introduction of New Economic Policy
(fi) Enactment of GST
(fii) Establishment of Tata Airlines
(iv) Recent Announcement of Demonetisation
(a) (it), (2), (iv), (1) (b) (iii). (4). (2), (i)
(c) (ii). (iv), (i), (d) (iii). (i). (tv), &)
26. Read the following statements carefully: 1
Statement 1: Indian farmers were forced to produce cash crops under the British rule.
Statement 2: Zamindari system was first implemented in Bengal presidency under the British rule.
In the light of the given statements, choose the correct alternative from the following:
(a) Statement | is truc and statement 2 is false
(b) Statement 1 is false and statement 2 is true
(c) Both statements | and 2 are true
(d) Both statements | and 2 are false
27. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct
alternatives given below: ; ; ; ; 4
Assertion (A): A major change occurred after 1969 when India adopted social banking and multi-
agency approach to adequately meet the needs of rural credit.
Reason (R): Self-help groups have emerged to fill the gap in the formal credit system in rural areas.

Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation ot
Assertion (A)
(b>) Both Assertion (A) and Reason (R) are true and Reason (R) ts not the correct explanation
of Assertion (A)
(c) Assertion (A) is true but Reason (R) ts false
(d) Assertion (A) is false but Reason (R) is true
28. Interpret the given picture on account of current environmental challenges. 3

7
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD 1 | DECEMBER 2024 | XII C| ECONOMICS] ANI V
 29. (A) Discuss any two steps taken by the government in the direction of improving agricultural
marketing system in India, since independence. 3
Or
(B) Discuss the importance of credit in rural development. 3
30. State whether the following statements are true or false, with valid arguments: 4
(a) Green Revolution has enabled the government to procure sufficient food grains to build its
stocks that could be used during times of shortage.
(b) India’s first official census was undertaken in year 1850.
31. Firms spend on giving on-the job-training to their workers. This may take different forms: one,
the workers may be trained in the firm itself under the supervision of a skilled worker; two, the
workers may be sent for off-campus training. In both these cases, firms incur some expenses.
Firms will, thus, insist that the workers should work for a specific period of time, after their
on-the-job training, during which it can recover the benefits of the enhanced productivity owing
to the training.
In light of the given text. bring out the need for on-the-job training for a person. 4d
32. (A) “Inward looking trade strategy’ adopted by India in the first seven plans basically aimed at
substituting imports with domestic products.” Discuss. 4
Or

(B) “The government should continue with agricultural subsidics.” Do you agree? Give reason in
support of your answer. 4
33. Read the following text carefully:
The China-Pakistan Economic Corridor (CPEC) has deepened the decades-long strategic relationship
between the two nations. But it has also sparked criticism for burdening Pakistan with mountains
of debt and allowing China to use its debt strategic assets of Pakistan.
The foundations of CPEC, part of China’s Belt and Road Initiative, were laid in May 2013. At that
time, Pakistan was reeling under weak economic growth. China committed to play an integral
role in supporting Pakistan’s economy.

Pakistan and China have a strategic relationship that goes back decades. Pakistan turned to China
at a time when it needed a rapid increase in external financing to meet critical investments in
hard infrastructure, particularly power plants and highways. CPECs early harvest projects met
this need, leading to a dramatic increase in Pakistan's power generation capacity. bringing an
end to supply-side constraints that had made rolling blackouts a regular occurrence across the
country.
-akistan leaned into CPEC, leveraging Chinese financing and technical assistance in an attempt
to end power shortages that had paralysed its country’s economy. Years later, China’s influence
in Pakistan has increased at an unimaginable pace.
China as Pakistan’s Largest Bilateral Creditor: China's ability to exert influence on Pakistan's
economy has grown substantially in recent years, mainly due to the fact that Beijing is now
Islamabad’s largest creditor. According to documents released by Pakistan's Finance Ministry,
Pakistan's total public and publicly guaranteed external debt stood at $44.35 billion in June 2013,
just 9.3 per cent of which was owed to China. By April 2021, this external debt had ballooned
to $90.12 billion, with Pakistan owing 27.4 per cent—$24.7 billion—of its total external debt to
China, according to the International Monetary Fund (IMP).
Additionally, China provided financial and technical expertise to help Pakistan build its road
infrastructure, expanding north-south connectivity to improve the efficiency of moving goods
from Karachi all the way to Gilgit-Baltistan (POK). These investments were critical in better
integrating the country’s ports, especially Karachi, with urban centers in Punjab and Khyber
Pakhtunkhwa provinces.

SECTION E

8
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD | | DECEMBER 2024 | XII C] ECONOMICS] ANI V
 Despite power asymmetries between China and Pakistan, the latter sll has tremendous agency in
determining its Own policies. even if such policies come at the expense of the long-term socio-
economic welfare of Pakistani citizens.
Source: https://www.usip.org/publications/ 2021/05 /pakistans-growing-problem-its-china-cconomic-comidor-Modified

On the basis of the given text and common understanding, answer the following questions:
(a) Outline and discuss any two cconomic advantages of China Pakistan Economic Corridor
(CPEC)accruing to the economy of Pakistan.
(b) Analyse the implication of bilateral ‘debt-trap’ situation of Pakistan vis-a-vis the Chinese
Economy. 3+3
34. (A) Define worker-population ratio. What does it signify?
(B) Mention any two advantages of organic farming.
(C) State and discuss any two principal causes of environmental degradation. 2+24+2
Or

(D) “India has failed to implement the recommendations of Education Commission of 1964-66.”
Give valid arguments in support of the given statement.
(E) “Human capital formation gives birth to innovation, invention and technological improvements.”
Do you agree with the given statement? Support your answer with valid arguments. 3+3

Fis FIs 2g 2s 2k 2k 2k 2s os 2s 2s 2s 2 2k 2k 2k 2k ok ok

ALL THE BEST

9
PEEVEES PUBLIC SCHOOL NILAMBUR | PRE BOARD | | DECEMBER 2024 | XII C] ECONOMICS] ANI V