CLASS 12 (CBSE)
PRE-BOARD –I (2020-21)
CLASS: XII TIME: 3 Hours
SUBJECT: ECONOMICS MARKS: 80
General Instructions
I. Question Nos.1-10 and 18-27 are very short answer questions carrying 1 mark each.
II. Question Nos.11-12 and 28-29 are short answer questions carrying 3 marks each.
III. Question Nos.13-15 and 30-32 are also short-answer questions carrying 4 marks each.
IV. Question Nos.16-17 and 33-34 are long answer questions carrying 6 marks each.
SECTION-A (MACROECONOMICS)
1. Which one of the following is not included in the estimation of national income?
a. Leisure time activities
b. Brokerage on the sale of bonds
c. Imputed value of production for self-consumption
d. Employer’s contribution to provident fund
2. In India, coins are issued by:
a. State Bank of India c. Reserve Bank of India
c. Ministry of Finance d. Ministry of Development
3. A commercial bank is that financial institution:
a. which only accepts deposits from the people.
b. which only offers loans to the people.
c. which accepts deposits from the people as well as offers loans to them.
d. which only deals in foreign exchange transactions.
4. Identify the correct pair of formula from the following column I and II:
(Choose the correct alternative)
Alternatives:
a. A-iii b. B-ii c. C-i
5. Identify which of the following statement is true? (Choose the correct alternative)
a. Flexible exchange rate determined by the Government.
b. Fixed exchange rate determined by forces of demand and supply of foreign exchange.
c. Managed floating rate is determined by market forces and the Government.
6. Import of Machinery is recorded in _____ side of _______account.
a. debit, current b. Credit, current
c. credit, capital d. Debit, capital
Read the following news report and answer Questions 7-10 on the basis of the same:
The Reserve Bank of India (RBI), cut Repo Rate to 4.4%, the lowest in at least 15 years. Also, it reduced the Cash Reserve Ratio (CRR) maintained by the banks for the first time in over seven years. CRR for all banks was cut by 100 basis points to release ₹ 1.37 lakh crores across the banking system. RBI governor Dr. Shaktikanta Das predicted a big global recession and said India will not be immune. It all depends how India responds to the situation. Aggregate demand may weaken and ease core inflation. The Economic Times; March 27th, 2020
7. Monetary policy is the policy of ________ (Central Government/ Central Bank) to control money supply and credit creation in the economy.
8. During the excess demand, central bank _____ (Decreases/ Increases) the margin.
9. Deficient Demand leads to : __________ (deflationary gap / inflationary gap)
10. In a situation of Inflationary gap at the full employment level of income:
a. AD>AS b. AD=AS
c. AD<AS d. None of these
11. State the valued reasons, which of the following statement is true or false:
a. GDP at market price = NDP at market price – Depreciation.
b. National income is the sum total of factor income.
12. State, giving valid reasons, whether the following statements are true or false:
a. Forward market allows hedging.
b. Managed floating is the mixture of both flexible and floating exchange rate systems.
13. Explain, using a numerical example, how an increase in reserve deposit ratio affects the credit creation power of the banking system.
14. If in an economy: Change in initial investment Rs. 700 crore . Marginal propensity to save =0.2. Find the value of investment multiplier and change in final income.
15. Covid 19 hit the economy in a drastic way.
State and discuss any two fiscal measures that may be taken by the Government of India to correct the situation.
16. A).Calculate Net Domestic Product at Factor Cost:
i. Net current transfers to abroad=15
ii. Private final consumption expenditure=800
iii. Net imports = -20
iv. Net domestic capital formation =100
v. Net factor income to abroad=10
vi. Depreciation =50
vii.Change in stock =17
viii. Net indirect tax=120
ix. Government final consumption expenditure =200
x. Exports=30
16. B). Explain ‘non –monetary exchanges as a limitation of using gross domestic product as an index of welfare of a country .
17. a. Elaborate the objective of Economic Growth in the Government budget.
b. Discuss briefly how the Government budget can be used as an effective tool in the process of reducing regional disparities.
PART B- INDIAN ECONOMIC DEVELOPMENT
18. Whose estimate of national income was considered very significant?
a. VKRV Rao b. Dadabhai Naoroji
c. William Digby d. RC Desai
19. What was the one major proposal of new industrial policy 1991?
a. NRI’s will not be allowed for capital investment in India
b. Facility of FDI upto 51%
c. Import restrictions on technical
d. Abolition of industrial licensing except for six industries
20. Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Disinvestment is a compulsion for the government to tackle budgetary deficit.
Reason (R): Disinvestment leads to privatization and follow of NEP of 1991
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) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
21. Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Electricity is the life line of production activity in the economy
Reason (R): Electricity is the life line of production activity in the economy . Increase in the price in the electricity will cause a rise in the production cost which may discourage production activity in the economy.
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) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
22. From the set of events/ system given in column I and corresponding relevant fact given in column II, choose the correct pair of statement:
a. A-i b. B-ii c. C-iii
23. In which year economic reforms introduced in Pakistan. (Choose the correct alternative)
a. 1951 b. 1991 c. 1988 d. 1978
24. How is the growth of an economy measured in economics?
25. Name the two forms of foreign investment.
26. The growth of GDP increased from 5.6 percent during 1980-91 to 8.2 percent during 2007-12. This growth is mainly driven by growth in which sector?
27. India is seen as a successful exporter of __________ in the reform period.
28. Describe any three suggestions to improve agriculture marketing.
29. How has the nature of workforce changed in India in recent times?
30. What measurers have been taken to give more priority to private sector in the development al process of the Indian Economy?
31. Make in India had been at the roots of the Indian planning process in the form of Modernisation as an objective of the planning process.
Do you agree with the given statement? Justify the rationale f the given statement.
32. Compare and analyse the given data of India of India and Pakistan with valued arguments.
Annual Growth of Gross Domestic Product (%)
33.a).Discuss briefly, how institutional reforms(land reforms) have played a significant role in transforming India agriculture.
b. while FDI in retail has proved to be growth- friendly in china, why should there be opposition to it in India ? Give your Opinion.
34. “Rural Economic development is essential for Indian Economic development”. Do you agree with the given statement? Support your answer with valid reasons.
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