CBSE(NCERT) GRADE 12 ECONOMICS 2024 SET1 — CBSE 12th Economics Previous Year Question Paper with Solutions

Q1 mcq 1 mark

Read the following statements carefully : Statement 1 : If in an economy the level of income increases (Y), it will always proportionately increase the level of consumption (C). Statement 2 : Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS) are always equal to each other. In the light of the given statements, choose the correct alternative from the following :

A. Statement 1 is true and Statement 2 is false.
B. Statement 1 is false and Statement 2 is true.
C. Both Statements 1 and 2 are true.
D. Both Statements 1 and 2 are false.

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Q2 mcq 1 mark

Identify the correct equation from the following :

A. $\text{GDP}_{MP} = \text{NNP}_{FC} + \text{Depreciation}$
B. $\text{NDP}_{FC} = \text{NNP}_{FC} + \text{Net Indirect Taxes}$
C. $\text{GNP}_{MP} = \text{GDP}_{MP} + \text{Net Factor Income from Abroad}$
D. $\text{NNP}_{FC} = \text{NDP}_{MP} + \text{Depreciation}$

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Q4 mcq 1 mark

9th June, 2023, there was a net selling off worth <309 crore by Foreign Institutional Investors (FIIs) over the period of one month i.e., 9th May, 2023 - 9th June, 2023. The above mentioned transactions will be recorded on __________ side of __________ account of Balance of Payments of India. (Choose the correct alternative to fill in the blanks)

A. Debit, Current
B. Credit, Capital
C. Credit, Current
D. Debit, Capital

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Q5 mcq 1 mark

Identify the incorrect feature(s) of money supply ($M_1$) from the following: (i) It is measured at a point of time. (ii) It does not include stock of money held by the government. (iii) It is always the currency in the hands of the Central Bank of a nation. Alternatives:

A. (i) and (ii)
B. (ii) and (iii)
C. (ii) only
D. (iii) only

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Q6 mcq 1 mark

Total consumption expenditure by households under Keynesian Economics is a combination of __________ and __________. (Choose the correct alternative to fill in the blanks)

A. Autonomous Consumption, Autonomous Investments
B. Autonomous Investments, Induced Consumption
C. Induced Investments, Autonomous Investments
D. Autonomous Consumption, Induced Consumption

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Q7 mcq 1 mark

Find the missing figures and choose the correct alternative:

A. (i) 1000, (ii) 800, (iii) 20000, (iv) 25000
B. (i) 5000, (ii) 3200, (iii) 25000, (iv) 20000
C. (i) 1000, (ii) 3200, (iii) 25000, (iv) 20000
D. (i) 1000, (ii) 800, (iii) 20000, (iv) 25000

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Q8 mcq 1 mark

In Balance of Payments (BOP), the meaning of deficit is the excess of __________. (Choose the correct alternative to fill in the blank)

A. autonomous receipts over autonomous payments
B. autonomous payments over current account payments
C. capital account payments over capital account receipts
D. autonomous payments over autonomous receipts

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Q9 mcq 1 mark

Suppose for a hypothetical economy: $C = 100 + 0.75Y$ (where $C$ = Consumption and $Y$ = Income), $I_0 = 400$ ($I_0$ = Autonomous Investment). Value of Investment Multiplier $(K)$ would be ____________. (Choose the correct alternative to fill in the blank)

A. 5
B. 4
C. 6
D. 3

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Q10 mcq 1 mark

Suppose, the Balance of Trade of an imaginary economy shows a favourable balance of $500$ crore. The values of merchandise exports are $1200$ crore and transfer payments are $400$ crore. The value of merchandise imports would be __________ crore. (Choose the correct alternative to fill in the blank)

A. 1700
B. 750
C. 700
D. 900

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Q10 long answer 3 marks

On the basis of the data given below for an imaginary economy, estimate the value of Net Domestic Product at Factor Cost ($NDP_{FC}$): S. No. | Items | Amount (in crore) (i) Gross Domestic Fixed Capital Formation | 200 (ii) Exports | 50 (iii) Government Final Consumption Expenditure | 320 (iv) Consumption of Fixed Capital | 35 (v) Household Final Consumption Expenditure | 470 (vi) Inventory Investment (Net) | 40 (vii) Imports | 60 (viii) Net Indirect Taxes | 50 (ix) Net Factor Income from Abroad | 20

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Q11 short answer 2 marks

Elaborate the concept of Externalities with the help of suitable example.

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Q12 short answer 1 mark

Define Operating Surplus.

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Q12 short answer 3 marks

Distinguish between fixed exchange rate system and flexible exchange rate system.

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Q13 long answer 4 marks

In a hypothetical economy, planned aggregate supply is less than planned aggregate demand. Explain its effect on output, income and employment levels.

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Q13 long answer 4 marks

(a) Complete the following table. Construct/Express the Consumption function at $200\,\text{crore}$ level of income. Income (Y) (in crore) Savings (in crore) Average Propensity to Consume (APC) Marginal Propensity to Save (MPS) 0 ( ) 30 100 1 200 0·85 300 0·8 OR (b) Ex-ante Aggregate Supply is less than ex-ante Aggregate Demand. Explain its impact on the level of output, income and employment.

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Q14 short answer 2 marks

Justify the following statements with valid arguments : (a) The Central Bank is the sole currency issuing authority of an economy. (b) Money serves as a measure of standard of deferred payments.

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Q15 short answer 2 marks

8th June, 2023: Reserve Bank of India (RBI) rate setting panel unanimously decided to keep the benchmark lending rate unchanged at 6·5%. The committee voted to remain focused on the withdrawal of accommodating monetary policy. On the basis of given text and common understanding, answer the following questions : (a) Identify and discuss the economic issue indicated in the above text. (b) Discuss the likely consequence on money supply if the rate setting panel would have decreased the said rate.

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Q16 long answer 4 marks

(a) Classify the following as Revenue receipts or Capital receipts. Give valid arguments in support of your answer : (i) Interest received on loan. (ii) Disinvestment receipts from the sale of a government company. (iii) Financial assistance by the Government of USA for promoting girl education in India. OR (b) (i) Study the following chart carefully and analyse the changing trends in the government expenditure on : (I) Transport (II) Rural Development TREND OF MAJOR ITEMS OF EXPENDITURE (lakh crore) (b) (ii) Distinguish between fiscal deficit and revenue deficit. Note : The following question is for the Visually Impaired Candidates only in lieu of Q. No. 16 b(i). Explain the stabilisation function of the Go

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Q17 short answer 3 marks

(a) Explain in brief the concept of circular flow of income in a two-sector model. (b) Real GDP is a better indicator of economic growth of a country as compared to nominal GDP. Do you agree with this statement? Support your answer with a valid hypothetical example.

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Q18 mcq 1 mark

Read the following statements Assertion (A) and Reason (R). Choose the correct alternative given below: Assertion (A): The excessive regulation of permit license raj prevented certain private firms from becoming fairly competitive. Reason (R): Private sector wasted huge amounts in obtaining licenses rather than on improving the product quality and international competitiveness. 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, 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.

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Q19 mcq 1 mark

In the decade of the 1970s, Pakistan nationalized its ________ industries. (Choose the correct alternative to fill in the blank)

A. Medical infrastructure
B. Consumer goods
C. Capital goods
D. Foreign trade

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Q20 short answer 2 marks

Classify the following as Revenue receipts or Capital receipts. Give valid arguments in support of your answer: Interest received on loan.

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Q20 mcq 1 mark

Read the following statements carefully: Statement 1: Under the colonial rule, basic infrastructure (like railways, post and telegraph etc.) was developed. Statement 2: The real motive behind the infrastructural development in India was to strengthen the British interests. In the light of the given statements, choose the correct alternative from the following:

A. Statement 1 is true and Statement 2 is false.
B. Statement 1 is false and Statement 2 is true.
C. Both Statements 1 and 2 are true.
D. Both Statements 1 and 2 are false.

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Q21 short answer 2 marks

Classify the following as Revenue receipts or Capital receipts. Give valid arguments in support of your answer: Disinvestment receipts from the sale of a government company.

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Q21 mcq 1 mark

Identify which of the following alternatives indicate the incorrect components combination of Agriculture Marketing System:

A. Assembling, Storage, Processing, Packaging
B. Production, Assembling, Processing, Grading
C. Assembling, Processing, Packaging, Transportation
D. Processing, Packaging, Grading, Distribution

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Q22 short answer 2 marks

Classify the following as Revenue receipts or Capital receipts. Give valid arguments in support of your answer: Financial assistance by the Government of USA for promoting girl education in India.

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Q22 mcq 1 mark

Read the following statements Assertion (A) and Reason (R). Choose the correct alternative given below: Assertion (A): World Trade Organization (WTO) is expected to establish the rule-based trading regime, to avoid unilaterally placed arbitrary restrictions by member nations. Reason (R): It is imperative to enlarge world production and ensure optimum utilization of world resources along with environmental protection. 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, 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.

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Reading Passage

TREND OF MAJOR ITEMS OF EXPENDITURE (lakh crore)

Q23 short answer 2 marks

Study the following chart carefully and analyse the changing trends in the government expenditure on: (I) Transport (II) Rural Development

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Q23 mcq 1 mark

Read the following statements Assertion (A) and Reason (R). Choose the correct alternative given below: Assertion (A): China has used the market mechanism to create additional social and economic opportunities for its citizens. Reason (R): Social infrastructure creation by the government has brought positive results in human development indicators in China. Alternatives:

A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation
C. Assertion (A) is true, but Reason (R) is false
D. Assertion (A) is false, but Reason (R) is true

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Q24 short answer 2 marks

Distinguish between fiscal deficit and revenue deficit.

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Q24 mcq 1 mark

Identify from the following alternatives the incorrect objectives of regulated agriculture market: (i) To make the marketing system efficient and effective for farmers to get best price of their products. (ii) To discourage improvement of marketing infrastructure for farmers. (iii) To prevent exploitation of farmers. (iv) To discourage farmers from improving quality and quantity of their produce. Alternatives:

A. (i) and (ii)
B. (i) and (iii)
C. (iii) and (iv)
D. (ii) and (iv)

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Q25 long answer 4 marks

Explain the stabilisation function of the Government Budget.

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Q25 mcq 1 mark

Economic reforms were introduced in India and Pakistan in the years __________ and __________, respectively. (Choose the correct alternative to fill in the blanks)

A. 1988, 1978
B. 1991, 1978
C. 1991, 1988
D. 1981, 1991

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Q26 short answer 3 marks

Discuss briefly the concept of circular flow of income in a two-sector model.

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Q26 mcq 1 mark

Read the following statements carefully: Statement 1: As per the National Sample Survey Organization (NSSO), unemployment is a situation in which all those who, owing to lack of work, are not working, but are seeking work from prospective employers. They express their willingness/availability to work under the prevailing conditions of work and remuneration. Statement 2: Disguised Unemployment is generally a massive problem in a highly populated country like India. In the light of the given statements, choose the correct alternative from the following:

A. Statement 1 is true and Statement 2 is false.
B. Statement 1 is false and Statement 2 is true.
C. Both Statements 1 and 2 are true.
D. Both Statements 1 and 2 are false.

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Q27 short answer 3 marks

Do you agree with the given statement? Justify your answer with a valid hypothetical numerical example. economic growth of a nation as compared to the Nominal Gross Domestic Product (GDP).

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Q27 mcq 1 mark

Identify which of the following is not a member nation of G20:

A. Brazil
B. Australia
C. Bangladesh
D. Argentina

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Q28 long answer 3 marks

(a) 'lopsided' Do you agree with the given statement? Justify your answer with valid arguments. OR (b) Elaborate the reasons owing to which the private sector was regulated under the Industrial Policy Resolution, 1956.

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Q29 short answer

India, National Education Policy 2020 has stressed a lot on in-service training of the teachers (i) Identify the source of Human Capital Formation (HCF) indicated in the aforesaid statement. (ii) Elaborate the likely impacts of this source on the economic development of India.

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Q30 short answer

(a) United Nations Department of Economic and Social Affairs populous country in the month of April 2023. Explain the consequences of one-child policy adopted by China in the 1970s. (b) Discuss the impacts of Special Economic Zones (SEZs) on the economic growth of China.

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Q31 short answer

(a) State and elaborate whether the following statements are true or false, with valid arguments : (i) In the recent past, the Government of India has taken crucial steps, like Jan-Dhan Yojana, for efficient allocation of financial resources. (ii) Worker population ratio is an indicator, used for analyzing the employment situation in a nation. OR (b) (i) Elaborate the (ii) Mention any two examples of diversification activities in the non-agro processing industries.

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Q33 short answer

(a) (i) Under the industrialisation measures adopted by the Government of India, regulation of the industrial sector was very important. Explain by splitting the given statement into facts or support. (ii) Even after the Green Revolution, 65 per cent of India's population was engaged in agriculture till the 1990s. Explain the statement with valid arguments. OR (b) (i) Growth with equity as an objective of Indian economic planning is also an excellent example. Support the given statement with two arguments each in favour and against maintaining agricultural subsidies. (ii) Explain the importance of growth with equity as an objective of the Indian economic plan.

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Q43 short answer 1 mark

State any two problems faced by farmers during the initial years of organic farming.

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Q44 long answer 3 marks

Technology plays a vital role. Justify the given statement.

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Q45 long answer 3 marks

of India, regulation of industrial sector was extremely. Reject or support the given statement with valid arguments.

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Q46 long answer 3 marks

agriculture sector till the 1990s. Justify the given statement with valid explanation.

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Q47 long answer 4 marks

Every coin has two sides debate over farm subsidies is one such classic example of the same. Justify the given statement with two arguments each in favour of and against the continuation of the farm subsidies.

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Q48 short answer 2 marks

State the importance of growth with equity of Indian economic planning.

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Reading Passage

In order to address two major environmental concerns in India, viz. water and air pollution, the government set up the Central Pollution Control Board (CPCB) in 1974. This was followed by states establishing their own state level boards to address all the environmental concerns. They investigate, collect and disseminate information relating to water, air and land pollution, lay down standards for sewage/trade effluent and emissions. These boards provide technical assistance to governments in promoting cleanliness of streams and wells by prevention, control and abatement of water pollution, and improve the quality of air and to prevent, control or abate air pollution in the country. These boards also carry out and sponsor investigation and research relating to problems of water and air pollution and for their prevention, control or abatement. They organize, through mass media, a comprehensive mass awareness programme for the same. The PCBs prepare manuals, codes and guidelines relating to treatment and disposal of sewage and trade effluents. They assess the air quality through regulation of industries. In fact, state boards, through their district level officials, periodically inspect every industry under their jurisdiction to assess the adequacy of treatment measures provided to treat the effluent and gaseous emissions. It also provides background air quality data needed for industrial siting and town planning. The pollution control boards collect, collate and disseminate technical and statistical data relating to water pollution. They monitor the quality of water in 125 rivers (including the tributaries), wells, lakes, creeks, ponds, tanks, drains and canals.

Q49 short answer 1 mark

State any two concerns owing to which the Central Pollution Control Board (CPCB) was established.

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Q50 long answer 2 marks

Explain any two functions performed by the Central Pollution Control Board (CPCB).

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Q51 long answer 3 marks

Describe any two strategies adopted by India to ensure sustainable development.

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Reading Passage

They assess the air quality through regulation of industries. In fact, state boards, through their district level officials, periodically inspect every industry under their jurisdiction to assess the adequacy of treatment measures provided to treat the effluent and gaseous emissions. It also provides background air quality data needed for industrial siting and town planning. The pollution control boards collect, collate and disseminate technical and statistical data relating to water pollution. They monitor the quality of water in 125 rivers (including the tributaries), wells, lakes, creeks, ponds, tanks, drains and canals.

Q52 short answer 3 marks

Elaborate any two strategies to ensure sustainable development as adopted by India.

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