Series i-Succeed 6-25/15 Roll No.

SQP Code:PB-6/15

Sample Iuestion Paper 08

Economics12" (Code 030)
beneral Instructions
compulsory.
1 This question paper contains 34 questions. All questions are Time:3 Hrs,
Thisquestion paper contains two sections
Section A- Introductory Macroeconomics Max. Marks: 80
Section B-Indian Economic Development
This paper contains 20 Multiple Choice Questions of 1 Mark each.
This paper contains 4 Short Answer Questions of 3 Marks each to be answered in 60 to 80 words.
This paper contains 6Short Answer Questions of 4Marks each to be answered in 80 to 100 words.
6
This paper contains 4 Long Answer Questions of 6 Marks each to be answered in 100 to 150words.
Attempt all parts of a question together.

Section AIntroductory Macroeconomics

1
Assertion (A) RBI is known as the apex bank (b) Decrease in the cost of import
of the Indian
economy. (c) Higher inflation rates in India
Reason (R) RBI does not deal directly with (d) Decrease in foreign investment in India
the public. (1) 3.
Alternatives The government can achieve its budget
(a) Both Assertion (A)
and
objective of 'redistribution of income' by
and Reason (R) is the Reason (R) are true
Assertion (A) correct explanation of (a)
(b) Both Assertion (A) and
managing the general price level in the
economy to the desired level
but Reason (R) is not theReason (R) are true, (b) increasing the Gross Domestic Products
of Assertion (A) correct explanation
(c) Assertion (A)is
true, but
(GDP) of the economy
(d)Assertion (A)is false, but Reason (R) is false (©) bringing the production of goods and ser
2. Reason (R) is true under its direct and absolute control
"Indian rupee rallies to two-month high (d) rationalisation of taxes in pro-poor directiot
likely dollar inflows." on 4.
Source https:l/shorturl.at/lQZJF Statement I The RBI shouldincrease thereg
rate to make borrowing more expensive,
What could be a potential impact of
Indian rupee appreciating against
the
the thereby
inflation. reducing money supply andcurbig
dollar, asmentioned in the headline? US (1)
(a) Increase in export competitiveness for Indian Statement II The RBI should decrease the
Cash Reserve Ratio (CRR) to increase the
goods
money supply and stimulate economic
activity.
 QuestionPaper 06
79

(a) Statement l is true and

false Statement lI is
(b) Statenment I is false and Statement Il is
true

(c) Both the statements are true ECONOMIÇ

A Both the statements are false GROWTH
6 Based on the pie chart, which
component is part of the current
account in the balance of
payments? (1)
Balance of Payment
Accounts

FDI
12.5% (a) Increase in economic growth
(b) Reducing inequality of income and
wealth
Exports (c) Reallocation of resources
53.8% Imports
33.8% (d) None of the above
9. Which items in balance of payments are
also called 'above the line' items? (1)

(a) Autonomous items

(b) Accommodating items
(a) Exports (b) Imports (c) Visible items (d) Invisible items
() FDI (d) None of these 10. Find the missing figures and choose the
6. Value of Marginal Propensity to correct alternatives. (1)
Consume (MPC) varies from Average
to (1) Income MPC MPS Saving Propensity
(a) negative infinity, positive infinity (S) to Save

(b) one, positive infinity (APS)

-90
(c) negative infinity, one
100 0.6 0.4 ..).. 0.4
(d) zero, one
200 0.6 0.4 ...(i).. ...iv)...
1. Statenment I Real and mnoney flows are
300 0.6 0.4 ...i).. 0.4 SP-06
the essence of modern economic activity.
Statement II Factor services flow from Alternatives
household to the producers without (a) 40, 60, 80, 0.4
which production activity is not (b)40, 80, 120, 0.4
possible. Likewise, factor incomes flow (c) 60, 80, 120, 0.4
from producers to the households (d) 80, 100, 120, 0.6
without which consumption activity is
not possible. (1) 11. From the following data, calculate the
value of domestic income (3)
Alternatives Items (in crores)
(a) Statement I is true and Statement II is false
(0) Statement I is false and Statement II is true Compensation of employees 2,000
(C) Both the statements are true Rent and interest 800
(a) Both the statenments are false Indirect taxes 120
8
Observe the image given below Corporate tax 460
Carefully and identify the objective that Consumption of fixed capital 100
zovernment should pursue to deal with
this situation. (1) Subsidies 20
 i Succeed
80 Economics Class h
Items ? (incrores) (ii) Explain howincreasing tax rates on
Dividend 940 higher income groups align with the
Undistributed profits 300 government's objective of
Net factor income from abroad 150
redistribution of income.
(3)
Mixed income of self-employed 200 16. (i) (a) "In the estimation of Gross
Or What precautions should be kept in
Domestic Product (GDP) using
mind while estimating national income expenditure method, the focus
by value added method?
lies only on expenditure by the
residents of the country." Do
12. When the price of a foreign currency youagree with the given
falls, the demand for that foreign statement? Give valid reasons
currency rises." Explain why? (3)
for your answer.
13. (1) What is high powered money? (1) (b) "Donmestic services (household
(ii) Explain the following functions of services) performed by a
the central bank woman are not considered as
(a) Lender of last resort an economic activity." Defend
(b) Banker to the government (3) or refute the given statement
14. (i) If national income is 100 crore and with valid reason. (4)
consumption 90 crore, find the (ii) Giving reasons, classify following
average propensity to save. (2 into intermediate products and final
(ii) When income rises to ? 120 crore products.
and consumption expenditure to (a) Comnputers installed in an office.
108 crore, what will be the (b) Mobile sets purchased by a
marginal propensity to consume mobile dealer. (2)
and marginal propensity to save? (2)
Or (i) Explain the
15. As per the following news
published in components of NFIA. (3)
The Ecornomic Times on 27th (ii) "Government incurs
January, expenditure
to
2022 popularise yoga among themasses."
"The fiscal deficit is keenly observed Analyse its impact on gross
8P-06 during the Budget as the size of the domesticproduct and welfare of
deficit may affect growth, price the people. (3)

stability, cost of production and 17. In a growing economy,

inflation. At times, a sustained high policymakers
and economists often debate the roles
fiscal deficit can impact a country's of consumption and saving. A nation's
rating. An increase in the fiscal deficit, economic health is closely tied to
however, can also boost a sluggish balance between these two factors.the
economy." High consumption can stimulate
Give the meaning of fiscal economicactivity, leading to
explain why is it importantdeficit
to
and production, employment andincreased
overall
beady eye on the fiscal deficit. keep a (4) growth. On the other hand, saving is
Or (i) "Tax rates on
crucial for capital formation, which can
higher lead to future
have been increased.'"income group investments and
economic stability.
Which objective of Recently, a country experienced a
budget is reflected ingovernment
this significant increase in consumer
statement?(1) spending, driven byfavourable
economic conditions.
 QuestionPaper06
81

The governmenttintroduced various

incentives to encourage " Economists are divided on whether
consumption,
such as tax cuts and | subsidies. this shift towards higher consumption
is beneficial or if it could lead to
However, Concerns have arisen
about
the long-termsustainability of such economic instability in the long run.
policies, particularly
regarding savings
rates, which have declined as a
Meanwhile, the central bank's data
shows that the economy is facing a
thisincreasedIconsumption. result
of
situation of deficient demand. Despite
The Country's central bank conducted a high consumption rates, production
surveythat revealed the capacities are underutilised, leading to
insights following higher unemployment and lower
The national average propensity to growth than expected.
Consume has risen sharply, with more () "High propensity to consume is a
households spending alarger portion virtue, while high propensity to
of their income. save isnot." Do you agree? Why or
why not? (3)
The average propensity to save has
decreased, raising concerns about the (ii) With the help of a diagram, explain
country's ability to fund future the situation of deficient demand in
investments. (3)
an economy.

sarion B Indian Economic Development

18. "Green revolution leads to marketable 20. Which of the given statements
surplus." What does it refers to? (1) characterise the status of the Indian
(a) Production of crops for economy during the British rule? (1)
self-consumption ()) Avibrant economy with well
(b) Production of crops for selling in market developed infrastructure
(c) Production of crops for maintaining
sufficient stock (ii) Stagnant economy with a heavy
(d) All of the above reliance on agricultural sector
19. Assertion (A) In the first seven year (i) Aflourishing market and
plans, trade in India was characterised integration with the global economy
(iv) Prevalence of rampant poverty and
'SP-06
by an 'inward looking trade strategy'
which is called 'import substitution'. unemployment
Codes
Reason (R) The policy aim was to
protect the domestic industries from (a) (i)and (iii) (b) (i) and (iv)
toreign competition in the form of (c) (i), (ii), and (iv) (d) (i) and (iv)
tariffs and quotas. (1)
21. "Both India and China adopted socialist
Alternatives economy model, following the USSR."
(a) Both Assertion (A) and Reason (R) are In a socialist economy, which of the
true and Reason (R) is the correct following is a key characteristic? (1)
explanation of Assertion (A) (a) Private ownership of production
(b) Both Assertion (A) and Reason (R) are resources

true, but Reason (R) is not the correct (b) Market determined prices for goods and
services
explanation of Assertion (A)
() Assertion (A) is true, but Reason (R) is (c) Centralised planning and control of
false resources

()Assertion (A) is false, but Reason (R) is (d) Minimal government intervention in
economic activities
true
 i Succeed
Economics Class n
Policy (NEP) (a) It is imperative for the Indian economy
22. The NationalEducation
introduction of a to undertake measures to promote rural
2020 emphasises the to provide development.
.........system in schools (b) Almost two-thirds of India's population
flexibility and enhance student
(1) depends on agriculture and nearly
learning. one-third of rural India lives under the
(a)semester (b)credit
(d) modular
trap of poverty.
(c) yearly (c) Promoting urban development is more
is crucial than rural development for
23. Statement I More female workforce economic growth.
found in rural areas as compared to
urban areas in India. (d) None of the above
Statement Il Self-employment is the 28. "The supply-demand reversal of
most favourable occupation among environmental resources account for
females in India. (1) the current environmentalcrisis,"
Alternatives Explain how? (3
(a) Statement I is true and Statement II is
29. Defend or refute the givern statement
false
(b) Statement I is false and Statement II is with valid explanation
true "It is necessary for firms to give
(c) Both the statements are true on-the-job training to its employees." (
(d) Both the statements are false
Or "NABARD plays a critical role in
24. isa women-oriented project to coordinating the rural financing
train the women about latest agricult system." Comment.
ural techniques in Tamil Nadu. (1)
30. (i))Observe the image given below and
(a) Kudumbashre (b) Self-help group briefly explain the functions
(c) TANWA (d) None of these performed by the environmernt
25. Acampaign in China in 1958, where around us. (3)
people were encouraged to set up indu
stries in their backyard, was named as (1)
(a) Great Leap Forward
(b) Great Proletarian Cultural Revolution
(c) Anti-Rightist Movement
(d) Four Pests Campaign
SP-UB 26. As per the image given below, which of
the following facilitates free trade? (1)

(ii) State any one point of difference

between renewable and non
renewable resources. (1)

31. "Features of Indian agriculture itselt

FREEPRADE explain the story of its backwardness."
Put out your views in the reference to
this statement. (4)

(a) Liberalisation (b) Privatisation 32. State whether the following statements
(c) Globalisation (d) Both (a) and (c) are true/false, with valid arguments
27. Which of the following
statements is ) There was a dire need to introduce
correct regarding the importance of land reform measures in the
ruraldevelopment in the Indian agricultural sector on the eve of
economy? (1) independence. (2)
 Paper06
83

(ü) The main objectives of the British

throughtheir institutions, performed moderately, but
opment policyinfrastructure
were to serve devel- amajority of its people still depend on
Owncolonial
their agriculture. India has taken many
provide basicinterests to not to
and initiatives to develop the infrastructure
people.
annenities the and improve the standard of living.
(2)
Or "The green revolution enabled the Scholars are of the opinion that political
government to procure instability, overdependence on
sufficient food
grainsto build its stocks that
remittances and foreign aid along with
could be volatile performance of agriculture
sed during times of shortage." sector are the reasons for the slowdown
petablish the rationale of the given of the Pakistan economy.
statemernt with valid
reasons.
33. ()""It has been realised that the labour
(4)
Yet, last five years, many macroe
conomic indicators began showing
force participation rate is very low positive and moderate growth rates
in India." Given this statement
reflecting the economic recovery.
suggest tew measures to raise the
Jabour force participation rate. (4)
In China, the lack of political freedom
(i) "Indian farmers have various and its implications for human rights
are major concerns; yet, in the last four
borrowing needs." Do you agree decades, it used the 'market system
with the given statement? Give without losing political commitment
valid reasons in support of your and succeeded in raising the level
answer. (2)
of growth alongwith alleviation of
Or (i) "It has been realised that poverty. You will also notice that unlike
Indiaand Pakistan, which are
agricultural finance is not available
in sufficient quantity at right time attempting to privatise their public
and at reasonable rate of interest." sector enterprises, China has used the
market mechanism to 'create additional
Asan agriculturist, suggest any two social and economic opportunities'.
measures to make the existing
system of agricultural finance serve By retaining collective ownership of
fully théneeds of agriculture land and allowing individuals to
cultivate lands, China has ensured
effectively. social security in rural areas. Public
(ü) "Developmental planning
envisaged that as the economy intervention in providing social infras- SP-06
grows, more and more workers tructure even prior to reformns has
would become formal sector brought about positive results in human
workers and the proportion of development indicators in China.
workers engaged in the informal (i) China's rapid industrial growth can
sector would dwindle." Justify with be traced back to its reforms in 1978.
Do you agree? Elucidate. (3)
valid argument.
Read the following text carefully and (ii) Compare the development experie
SWer the given questions on the basis nce of India, with China and Pakistan
of the same and common understanding with reference to gross domestic
product of these countries. (2)
India, China and Pakistan have travelled
Seven decades of developmental path (iii) According to the text, which
With varied results. Till the late 1970s, all country has used the market
of them were maintaining the same level mechanism to create additional
of low development. The last three social arnd economic opportunities
decades have takenthese countries to while retaining collective ownership
of land?
ditterent levels. India, with democratic