Sample Question Paper - 1 (Expected Questions for CBSE Economics XII Examination 2020) Section - A (Macroeconomics) Q.1 If Real GDP = `240 crore and Price Index = 120, Nominal GDP = __________? (1) Q.2 __________ is the main source of money in an economy. (1) (a) Central bank (b) Commercial banks (c) Both (a) and (b) (d) Government Q.3 If the Reserve Ratio is 20% and the primary deposits are `100, the total lending by the banking system will be __________. (1) Q.4 Revenue deficit is calculated after deducting __________ from revenue expenditure. (1) (a) Fiscal deficit (b) Tax revenue (c) Non-tax revenue (d) Both (b) and (c) Q.5 Which of the following excludes interest payments? (1) (a) Revenue deficit (b) Fiscal deficit (c) Primary deficit (d) All of above Q.6 Given the consumption function of an economy: (1) C = `100 crore + 0.8 Y The equilibrium level of income is ` 800 crore. The values of the two components of the consumption function when the economy is in equilibrium are ________ . Q.7 If in an economy, the consumption and savings curves are parallel to each other, the value of investment multiplier will be______ . (1) Q.8 If marginal propensity to save is 20% and is constant at all levels of income and the subsistence level of the consumption in the economy is `100 crore, the consumption function of this hypothetical economy will be: (1) (a) C = 0. 2Y (b) C = 0.8Y (c) C = `900 crore + 0.2Y (d) C = `100 crore + 0.8Y Q.9 The price of one currency in terms of the other is known as the ________ . (1) (a) Purchasing Power Parity (b) Repo Rate (c) Reverse Repo Rate (d) Exchange Rate Q.10 In international trade if the domestic price of goods is more than the world price (1) (a) The country will become an exporter of the goods (b) The country will become an importer of the goods (c) The country will neither import nor export (d) Additional information is required Q.11 If in a locality, a new park is developed by the municipal corporation, it will have externalities, both positive and negative. State on example each of both types of externalities with reason. (3) Q.12 Saving function of an economy is given as: S = (–) 10 + 0.20Y If the ex-ante investments are `240 crores, calculate the following: (i) Equilibrium level of income in the economy. (ii) Additional investments which will be needed to double the present level of equilibrium income. (3) OR In an economy, autonomous consumption is `100 crore and autonomous investment is `60 crore. In this economy, with every increase in income, 80% of it is spent on consumption. The full employment level of income is `1000 crore. (a) Calculate the equilibrium level of income. (b) State whether the economy is facing a situation of excess demand or deficient demand. Give reasons in support of your answer. Calculate the required increase/decrease in investment to reach the full employment equilibrium. Q.13 Discuss any one of the following functions of a Central Bank: (4) (a) Lender of last resort (b) Bank Rate Policy Q.14 “Through its budgetary policy government allocates resources in accordance with the requirements of the country.” Do you agree with the given statement? Support your answer with valid reasons. (4) Q.15 “Government of India doubled the import duty on gold.” State and discuss the likely effects of the given statement on foreign exchange rate with reference to the Indian Economy. (4) OR Indian investors lend abroad. Answer the following questions: (a) In which sub-account and on which side of the Balance of Payments such lending is recorded? Give reasons. (b) Explain the impact of this lending on foreign exchange rate. (4) Q.16 (a) ‘Gross Domestic product (GDP) does not give us a clear indication of economic welfare of a country.’’ Define or refute the given statement with valid reasons. (3) (b) In an economy, following transactions took place: (i) Firm A sold to firm B goods of `80 crore; to firm C `50 crore; to households `30 crore and goods of value `10 crore remains unsold. (ii) Firm B sold to firm C goods of `70 crore; to firm D `40 crore; goods of value `30 crore were exported and goods of value `5 crore was sold to government. Calculate: (i) Value of output of Firm A and Firm B. (ii) Value added by Firm B (3) OR Suppose there are only two firms, A and B in an imaginary economy. Firm A uses no raw material and produces cotton worth `50 lakhs. Firm A gives `20 lakhs to the workers as wages and keeps the remaining `30 lakhs to be distributed as rent, interest and profits. Firm A sells its cotton to firm B, who uses it produce cloth. Firm B sells the cloth produced to consumers for `200 lakhs and gives `60 lakhs as wages and keeps the remaining income generated as profits. Assuming no depreciation and indirect taxes or subsidies, calculate GDP by three methods. (6) Q.17 “Excess of Aggregate Demand over Aggregate Supply corresponding to the full employment level causes rise in general price level.”Explain the given statement with diagram. Discuss one fiscal measure and one monetary measure to tackle the situation. (6) Section - B (Indian Economic Development) Q.18 India’s demographic condition on the eve of independence was characterised by: (Choose the correct alternative) (1) (a) High level of literacy, high mortality rates, high life expectancy and high level of poverty. (b) Low level of literacy, low mortality rates, low life expectancy and Low level of poverty. (c) Low level of literacy, low mortality rates, high life expectancy and high level of poverty. (d) Low level of literacy, high mortality rates, low life expectancy and high level of poverty. Q.19 Write the correct sequence of alternatives given in Column II by matching them with respective terms in Column I: (1) Column I Column II A. Growth (i) Adoption of new technology to increase the production of goods and services. B. Modernisation (ii) Avoiding imports of those goods which could be produced in India itself. C. Self-reliance (iii) Every Indian should be able to meet his/her basic needs such as food, a decent house, education and health, and inequility in the distribution of wealth should be reduced. D. Equity (iv) Increase in the country’s capacity to produce the output of goods and services within the country. Q.20 The Parliament passed a law, ___________ , to simplify and introduce a unified indirect tax system in India. (Fill up the blank with correct answer) (1) Q.21 The latest demonetisation of currency was undertaken by the Government of India on November 8, 2016 to tackle the problem of__________ . (Fill up the blank with correct answer) (1) Q.22 Identify the correct sequence of alternatives given in Column II by matching them with respective events of China in Column I: (1) Column I Column II (a) Regional and global economic grouping’s such as the SAARC, (i) Students and professionals were sent to work and learn G–8, G–20, ASEAN etc. from the country side. (b) The Great Leap Forward (GLF) campaign initiated by (ii) Means to strength then their own domestics China in 1958. economies. (c) The Commune system in China. (iii) People collectively cultivated lands. (d) The Great Proletarian Cultural Revolution introduced by (iv) Industrialising the country on a massive scale. Mao in 1965. Q.23 First five year plan of ____________ commenced in the year 1956. (Pakistan/China) (Fill up the blank with correct option) (1) Q.24 The educated unemployed from low–income families in rural and urban areas can get financial help to set up any kind of enterprise that generates employment under ______________. (Choose the correct alternative) (1) (a) Rural Employment Generation Programme (REGP) (b) Prime Minister’s Rozgar Yojana (PMRY) (c) Swarna Jayanti Shahari Rozgar Yojana (SJSRY) (d) Swarna Jayanti Gram Swarozgar Yojana (SGSY) Q.25 _______ was set up in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system. (Fill up the blank with correct answer) (1) OR Which of the following is working in the informal sector? (Choose the correct alternative) (1) (a) A private school teacher in a school which has 25 teachers. (b) The owner of a textile shop employing nine workers. (c) Driver of a bus company which has more than 10 buses with 20 drivers, conductors and others workers. (d) Civil engineer working in a construction company which has 10 workers. Q.26 ___________ is an indicator used by exports to gauge the number of people dying prematurely due to a particular disease, as well as, the number of years spent by them in a state of ‘disability’ owing to the disease. (Fill up the blank with correct answer) (1) Q.27 The concept of sustainable development was emphasised by ____________. (Fill up the blank with correct answer) (1) Q.28 “The opportunity costs of negative environmental impacts are high”. Do you agree with the given statement? Gives valued reasons in support of your answer. (3) OR Explain the role of micro-credit programmes in meeting the credit requirements of the poor. (3) Q.29 From the following table calculate the missing figures: (3) Region Estimated Population Estimated No. of workers Workforce Participation (in crore) (in crore) Rate (%) Rural 70 35 (i)______ Urban (ii)___ 20 40 Total – – (iii)______ Q.30 “During the British colonial rule, despite being the occupation of about 85% of India’s population, the agriculture sector continued to experience stagnation and, not infrequently, unusual deterioration.