Page 1 Sample Paper 08

Sample Paper 08
Class - 12th Exam - 2024 - 25
Economics (030)
Time : 3 Hours Max. Marks : 80
General Instructions :
1. This question paper contains two sections :
Section A – Macro Economics
Section B – Indian Economic Development
2. This paper contains 20 Multiple Choice Type Questions of 1 mark each.
3. This paper contains 4 Short Answer Type Questions of 3 marks each to be answered in 60 to
80 words.
4. This paper contains 6 Short Answer Type Questions of 4 marks each to be answered in 80 to
100 words.
5. This paper contains 4 Long Answer Type Questions of 6 marks each to be answered in 100 to
150 words.

SECTION-A - Macro Economics

1. Read the following statements carefully:
Assertion (A): The investment multiplier is inversely related to the Marginal Propensity to
Consume (MPC).
Reason (R): A higher MPC leads to a larger multiplier effect because more of each additional
unit of income is spent on consumption.
Choose the correct option from those given below:
(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.

2. “The government has reported a fiscal deficit of 5% of GDP for the fiscal year 2022-23, which
it plans to finance by borrowing from the market. This borrowing is expected to cover the gap
between total expenditure and total receipts.”
Source: [Fiscal Policy Statement, 2023](https://www.finmin.nic.in/reports/fiscal-
policy-statement-2023)
Which of the following best describes the fiscal deficit?
(A) Total expenditure minus total revenue receipts
(B) Total expenditure minus total capital receipts
(C) Total expenditure minus total receipts excluding borrowings
(D) Total revenue expenditure minus total revenue receipts
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3. Under a flexible exchange rate system, the foreign exchange rate is determined by the forces
of demand and ________ in the foreign exchange market without direct government
intervention.
Choose the correct option to fill in the blank.
(A) Policy (B) Supply
(C) Government (D) Control

4. An economy’s Nominal GDP increased from `150 lakh crore to `165 lakh crore, while the GDP
deflator increased from 100 to 110. The Real GDP growth rate is ________ percent.
Choose the correct option to fill in the blank.
(A) 10% (B) 5%
(C) 15% (D) 0%

5. From the given diagrams, identify the correct option that indicates the ‘Consumption Curve’
passing through the origin drawn at a particular angle.

(A) (i) (B) (iii)

(C) (ii) (D) (iv)

6. If the Marginal Propensity to Consume (MPC) is 0.75, the value of the investment ______
would be 4.
Choose the correct option to fill in the blank.
(A) Deflator (B) Multiplier
(C) Accelerator (D) Propensity

7. Read the following statements carefully:

Statement 1: Capital receipts in a government budget include loans raised by the government,
disinvestment proceeds, and recovery of loans given by the government, contributing to the
financing of capital expenditures.
Statement 2: Revenue expenditures are those that lead to the creation of assets or reduction of
liabilities, such as spending on infrastructure projects or repayment of public debt.

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In light of the given statements, choose the correct option from the following:
(A) Statement 1 is false and Statement 2 is true.
(B) Statement 1 is true and Statement 2 is false.
(C) Both Statements 1 and 2 are false.
(D) Both Statements 1 and 2 are true.

8. In a flexible exchange rate system, the exchange rate is determined by the forces of demand
and supply in the foreign exchange market without direct intervention from the _______.
Choose the correct option to fill in the blank.
(A) Central Bank
(B) Commercial Banks
(C) Government
(D) Exporters

9. Read the following statements carefully:

Statement 1: Net Factor Income from Abroad (NFIA) is the difference between factor income
received from the rest of the world by domestic residents and factor income paid to the rest
of the world, and it can be positive, negative, or zero depending on the economic interactions.
Statement 2: If NFIA is negative, it implies that the Gross National Product (GNP) of a
country is greater than its Gross Domestic Product (GDP), indicating a net outflow of factor
income to abroad.
In light of the given statements, choose the correct option from the following:
(A) Statement 1 is false and Statement 2 is true.
(B) Both Statements 1 and 2 are false.
(C) Statement 1 is true and Statement 2 is false.
(D) Both Statements 1 and 2 are true.

10. Choose the correct alternatives to be filled in given blanks A, B and C.

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Page 4 Sample Paper 08 CBSE 12th Economics

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

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

11. ‘Exchange rate of US$ rose considerably in India.’ Explain the impact of this statement on
Indian exports and analyse its repercussion on the general masses.


O
State the components of the current account of Balance of Payments.

12. ‘Many large Multinational Corporations (MNCs) have recently shifted their investments from
China and have started their production in India, thereby boosting the Make in India plans
of the Government’. Presuming other factors being constant, discuss the effects of the given
statement on Foreign Exchange rates with reference to the Indian Economy.

13. How is GST administered in India?

O
Explain the role of government budget in fighting inflationary and deflationary tendencies.

14. India’s GDP contracted 23.9% in the April-June quarter of 2020-21 as compared to same period
of 2019-20, suggesting that the lockdown has hit the economy hard”.
— Hindustan Times, 1st September 2020
State and discuss any two fiscal measures that may be taken by the Government of India to
correct the situation indicated in the above news report.

15. Read the following text carefully and explain the relevant function of the money indicated here.
It was virtually impossible to store surplus value in the barter economy. The discovery of money
has eliminated this difficulty. With the help of money, people can store surplus purchasing
power and use it whenever they wish to. Savings in the form of money are not only secure but
the possibility of it being disrupted is very low. Besides, money can be carried around and is
portable. By facilitating accumulation of money, money has become the only basis of promoting
capital formation.

16. Read the following text carefully :

Capital expenditure refers to funds used by the government for acquiring or maintaining fixed
assets such as infrastructure, machinery, or buildings.Analyzing its trends helps assess long-term
investments and their impact on economic growth. Interpret the given shown trend in capital
expenditure. Also state reason why government has relied on it after Covid-19 disruptions.


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17. (a) Calculate GDP at market price by Income Method:

(` in crores)
(i) Compensation of employees 120
(ii) Exports 25
(iii) Mixed Income of the self-employed 140
(iv) Imports 30
(v) Interest on national debt 5
(vi) Private final consumption expenditure 255
(vii) Gross fixed capital formation 65
(viii) Consumption of fixed capital 40
(ix) Subsidies 10
(x) Government’s final consumption expenditure 35
(xi) Change in stocks 20
(xii) Indirect tax 45
(xiii) Net factor income from rest of the world (—) 10
(xiv) Rent, interest and profit 50
(b) Explain the basis of classifying goods into final goods and intermediate goods, with the
help of suitable examples.


O

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(a) Calculate Net National Product at Market Price from the following data:
(` in thousand crores)
(i) Compensation of employees 250
(ii) Mixed income of self-employeds 600
(iii) Profit 80
(iv) Interest 40
(v) Rent 30
(vi) Net factor income to abroad (—) 10
(vii) Net exports 15
(viii) Consumption of fixed capital 20
(ix) Net indirect taxes 10
(x) Net current transfers to abroad 8
(b) Explain how the following should be treated while estimating national income:
(i) Free medical facilities by the employer
(ii) Income arising out of the sale of shares

Section-B - Indian Economic Development

18. As per the image given below, which of the following facilitates free trade?

(A) Liberalisation (B) Privatisation

(C) Globalisation (D) Both (A) and (C)

19. Read the following statements carefully:

Statement 1: The British colonial rule significantly improved India’s per capita income on the
eve of independence.
Statement 2: The infrastructure developed during colonial rule primarily benefited the British
economy rather than India’s.


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In light of the given statements, choose the correct option 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.

20. Read the following statements carefully: Assertion (A) and Reason (R). Choose the correct
option from those given below:
Assertion (A): The Five Year Plans aimed to achieve self-sufficiency in food production in
India.
Reason (R): The Green Revolution was a part of the Five Year Plans to boost agricultural
productivity.
Options:
(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.

21. Liberalisation policies in India led to the reduction of ______ and ______, thereby
attracting more foreign investment and fostering economic growth.
Choose the correct option to fill up the blank.
(A) trade barriers; regulatory constraints
(B) taxes; subsidies
(C) agriculture; services
(D) public sector; private sector

22. Human capital refers to the skills and knowledge possessed by individuals. Which of the
following are sources of human capital?
Which of the following is/are correct ?
(i) Education
(ii) Health
(iii) Training
(iv) Natural resources
Option :
(A) (i), (ii), and (iii)
(B) (ii) and (iv)
(C) (i) and (iv)
(D) (i), (ii), (iii), and (iv)
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23. Identify which of the following are key issues in rural credit systems in India.
Which of the following is correct ?
(A) Limited access to credit and high interest rates
(B) Abundance of credit facilities and low interest rates
(C) Excessive formal banking presence
(D) Overregulation of credit markets

24. Which of the following are characteristics of the informal sector in India?
Which of the following is correct ?
(A) High job security and benefits
(B) Formal employment contracts
(C) Regular working hours
(D) Lack of job security and limited social benefits

25. Which of the following factors have contributed to India’s slower economic growth compared
to its neighbors?
Which of the following is correct ?
(A) Strong governmental planning
(B) Bureaucratic red tape
(C) Higher investment in infrastructure
(D) Export-oriented policies

26. “On the eve of India’s independence, the industrial sector was characterized by the dominance
of traditional handicrafts and cottage industries, which had declined significantly due to stiff
competition from machine-made goods imported from Britain. The lack of modern industries
and technological innovation led to regional imbalances and widespread unemployment among
artisans and craftsmen.”
What was a significant consequence of the industrial scenario in pre-independent India?
(A) Equitable regional development across the country
(B) Growth of indigenous technological innovations
(C) Massive unemployment and regional disparities
(D) Increase in foreign direct investment in traditional industries

27. Identify which of the following policies were introduced under the Industrial Policy Resolution
of 1956.
Which of the following is correct ?
(A) Promotion of public sector enterprises
(B) Deregulation of private industries
(C) Encouraging foreign direct investment in all sectors
(D) Privatization of key industries
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28. Highlight the positive contributions made by the British in India.

O
What was the two-fold motive behind the systematic deindustrialisation affected by the British
in pre-independent India?

29. Observe the given figure carefully and answer the question that follows:

What was the offer before green revolution and why Indian farmers were not ready for the same
offer after green revolution?

30. ‘Under the colonial regime the real motive behind the development of infrastructure was to
meet various colonial interests.’ Accept/Refute the above statement. Give reason in support of
your answer.

31. Elucidate the functions of Central Pollution Control Board (CPCB) to address the environmental
concerns in India.


O
“Indiscriminate felling of trees led to environmental problems.” Do you agree? Give reason to
justify your answer.

32. On the basis of the following data answer the following questions.
Country Urbanisation Infant Mortality Rate (Per 1,000 live births)
India 33 38
Pakistan 39 66
(a) Comment on the Infant Mortality Rate among India and Pakistan.
(b) ‘Pakistan is more urbanised than India.’ Do you agree?
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33. Read the following text carefully and answer the given questions on the basis of the same and
common understanding:
India’s land is undergoing degradation or desertification. In 2011-2013, it stood at 29.3 per cent
of the total land, representing an increase of 0.57 per cent (which is 1.87 million hectares in
area) compared with 2003-2005, according to a report-cum-atlas by ISRO’s Space Applications
Centre. Soil erosion due to water and wind, and degradation of vegetation cover were the main
processes that has led to land degradation. Almost 90 per cent of the states experienced a rise —
notably Delhi and the northeastern states — in land degradation in 2011-2013 compared with
2003-2005 while four states showed slight decreases in land degradation. Reclaiming degraded
lands will require a strict land-use policy and better watershed management initiatives, say
experts.
Land degradation can exacerbate climate change and threaten agricultural productivity, water
quality, biodiversity, sustainable development, and the living conditions of humans and wildlife,
among other effects. Globally, a third of our land is degraded, affecting 3 billion people, and it
is expected to worsen with rising demand for food.
(a) What is land degradation? State the factors responsible for land degradation.
(b) State and discuss any two principal causes of environmental degradation.

34. ‘We have a moral obligation to hand over the planet earth in good order to the future generation’.
Do you agree with the above statement? Suggest any five measures to achieve the above
obligation.


O
‘The reform process initiated in the early 1990s resulted in a decline in the number of workers
employed in the formal sector.’ Critically analyse.

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