WEST CHENNAI SAHODAYA CLUSTER EXAMINATION (2024 – 25)

CLASS XII
ECONOMICS – (030) SET -3
TIME:3hrs 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 Question of 1 marks each.
3. This paper contains 4 Short Answer Questions of 3 marks each to be answered in 80 to
100 words.
4. This paper contains 6 Short Answer Questions of 4 marks each to be answered in 80 to
100 words.
5.This paper contains 4 Long Answer Questions of 6 marks each to be answered in 100 to
150 words.

Q.NO SECTION-A MACROECONOMICS MARKS

1. Assertion (A): Deficient Demand leads to underemployment 1

equilibrium.
Reason (R): During deficient demand, equilibrium is determined
at a level less than full employment

(a) Both Assertion (A) and Reason (R)are true and Reason (R) is
the correc explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is
not the correct explanation of Assertion (A)
(c) Assertion (A) is the true but Reason (R) is false.
(d) Assertion (A) is the false but Reason (R) is true.

2. Which of the following is a term deposit? 1

(a) Chequeable deposit

(b)Non- Chequeable deposit
(c) Fixed Deposit
(d) Both (b) and (c)

1
3. If in an economy, the value of investment multiplier is 4 and Autonomous 1
Consumption is 30 crores, the relevant consumption function would be:

(a) C = 30 + 0.75Y
(b) C = (–) 30 + 0.25Y
(c) C = 30 – 0.75Y
(d) C = 30 – 0.25Y

OR
If increase in national income is equal to increase in consumption, Indentify the
value of marginal propensity to save:

(a) Equal to unity

(b) Greater than one
(c) Less than one
(d) Equal to zero

4. Statement 1: A person can be a citizen of one country and at the same time a 1
resident of another country.

Statement 2: National Product includes production activities of units located

within domestic territory, operated both by residents and non-residents.

(a) Both the statements are true.

(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

5. Look at the following data of a given country. 1

No. Items Value (in million US dollars)
1. Exports ( of goods) 150
2. Imports ( of goods) 200
3. Net invisibles 20

Which of following is incorrect?

(a) Balance of trade is unfavourable for the country
(b) Balance of payment cannot be determined by the data
(c) There is a current account deficit of 30 million US dollars
(d) There is a capital surplus of 50 million US dollars

6. Which of the following is not a flow?

1
(a) Capital
(b) Income
(c) Investment
(d) Depreciation 2
7. When Nominal Gross Domestic Product (GDP) is 840 crores and price Index is 1
120, then the Real Gross Domestic Product (GDP) will be ______________

(a) 700 crores

(b) 900 crores
(c) 800 crores
(d) 500 crores

8. Number of times the commercial banks are able to create total deposits with the 1
help of reserve ratio and initial deposits is known as ___________

(a) Investment Multiplier

(b) Money Multiplier
(c) Demonetisation
(d) Remonetisation

9. In which of the following exchange rate system, government or central bank 1

does not play any role in determining the equilibrium exchange rate?

(a) Managed Floating Exchange Rate System

(b) Fixed Exchange Rate System
(c) Both (a) and (b)
(d) Flexible Exchange Rate System

10. Which is the most liquid measure of the money supply? 1

(a) M1
(b) M2
(c) M3
(d) M4

11. Domestic services (household service) performed by a woman are not 3

considered as an economic activity. Defend or refute the given statement with
valid reason.
OR

Management of water polluting oil refinery says that it ensures welfare through
its contribution to Gross Domestic Product. Defend or refute the argument of
management with respect to GDP as a welfare measure of economy.

12 Discuss the function of central bank as Banker, Agent and Advisor to the
government. 3

3
13. Calculate National Income. 4
Particulars ₹ In crores
(i) Compensation of employees 13,300
(ii) Wages in kind 200
(iii) Indirect taxes 3800
(iv) Gross domestic fixed capital formation 6200
(v) Operating surplus 5000
(vi) Mixed income of self employed 16,100
(vii) Net factor income from abroad 300
(viii) Net exports (-) 100

14. Complete the following table:

4
Income Marginal Saving Average
₹ propensity to ₹ propensity to
consume save
0 - -90 -
100 0.6 - -
200 0.6 - -
300 0.6 - -

OR
The saving function is given as S = -120 + 0.4 (Y).
Determine (i) Consumption function
(ii) Consumption at the income level of ₹ 600 crores.

15. State whether the following transaction will be recorded (i) on the credit side or 4
debit side (ii) in the current account or capital account in the balance of
payment account with reason.
(i) Investment from abroad.
(ii) Interest on loan received from Russia.

16. Read the following case study carefully and answer the question on the basis of
the same:
Accelerating growth is the objective of every Budget as it should be of this
one. But this budget should pay special attention to bringing the widened
inequality in the economy. While noting that the COVID – 19 pandemic has
caused enormous distress to the low-income segment who operate in the
informal economy, the upper income segment have not only been able to
protect their income but have in fact been able to grow their savings and wealth.

(i) Explain how the government can use the budgetary policy in reducing 3
inequality of income in the economy.
(ii) What is the difference between revenue budget and capital budget? 3

4
17. Explain the concept of inflationary gap with the help of diagram. What is its 6
impact on the output, employment and price level in the economy?
OR
Explain the steps taken to derive saving curve from the consumption curve. Use
diagram.

SECTION-B INDIAN ECONOMIC DEVELOPMENT

18. India has become a preferred outsourcing destination because of ___________. 1

(i) Availability of unskilled labour (ii) Quality of IT service

(iii) Availability of skilled labour (iv) Cheap labour

Choose the correct alternative:

(a) Only (i) (b) (i) and (ii) (c) Only (ii) (d) (ii) (iii) and (iv)

19. Identify the correct pair of statement given in column I and II below: 1
Column I Column II
(A)Subsidies (i )Maximum quantity of goods that can be
Imported
(B) Karve Committee (ii) Using large-scale industries to promote rural
1955 Development
(C) Import substitution (iii) To encourage farmers for adopting new
Policy Technology
(D) Quota (iv) To protect domestic firms

(a) A-i
(b) B-ii
(c) C-iii
(d) D-iv

20. In china , commune system is related to ____________ sector 1

(a) Agriculture
(b) Industry
(c) Service
(d) Informal

21. India is not a member of which of the following regional/global economic

grouping? 1

(a) SAARC
(b) BRICS
(c) G-7
(d) G-20

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22. Identify the incorrect statement from the following: 1
(a) Diversification into other sector is essential to enable rural people to
overcome poverty.
(b) Diversification is an essential components because there is greater risk in
Depending exclusively on farming for livelihood.
(c) Diversification provides supplementary gainful employment
(d) Diversification activities are not beneficial

_
23. __________ means production of crops for sale in the market rather than for 1
self consumption.

(a) Zamindari System

(b) Commercialisation of Agriculture
(c) Land settlement system
(d) None of these

24. __________ refers to disposal of equity of public sector units in the market. 1

(a) Globalisation
(b) Privatisation
(c) Disinvestment
(d) Liberalisation

25. Assertion (A): Economists emphasize on the need for expanding educational 1
opportunities, as it accelerates development process.
Reason (R): Educated people facilitate adaptation of new technology and
stimulates innovation.

(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 and Reason (R) is not the
correct explanation of Assertion (A)
(c) Assertion (A) is the true but Reason (R) is false.
(d) Assertion (A) is the false but Reason (R) is true.

26. Arrange the following events of China in chronological order and choose the 1
correct alternative:

(i) Great Proletarian Cultural Revolution (ii) Great Leap Forward campaign
(iii) Introduction of Economic Reforms (iv) First five year plan

Choose the correct alternative:

(a) ii, iv, iii, i (b) iv, ii, i, iii (c) ii, iv, i, iii (d) iv, i, ii, iii

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27. In which year, India adopted High Yielding Varieties programme for the first 1
time.

(a) 1977
(b) 1966
(c) 1986
(d) 1956

28. Interpret the given picture on account of unemployment problem in India and 3
explain with example.

29. Mention the major functions of World Trade Organisation. 3

OR
Why did RBI have to change its role from controller to facilitator of financial
sector in India?

30. Discuss briefly, how institutional reforms/land reforms have played a 4

significant role in transforming Indian agriculture.
OR
Why was public sector given a leading role in industrial development during the
planning period?
31. Is it necessary to generate employment in the formal sector rather than in the 4
informal sector? Why?

4
32. Answer the following question based on the following data:
(a) Comment upon the HDI rank among the three countries
(b)Which country has the highest life expectancy?

Country HDI Value HDI Rank Life

Expectancy at
Birth (Year)
India 0.645 130 69.7
China 0.761 87 76.9
Pakistan 0.557 154 67.3
Source: Human Development Report2019and 2020
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33. Agriculture marketing needs urgent attention in the scheme of securing rapid 6
rural development. Explain the steps taken by the government in developing
rural market.
OR
Bring out the importance of animal husbandry and Horticulture as a source of
diversification?

34 Read the following text carefully and answer questions Numbers (a) and (b)
given below:

Green investment and sustainability are priorities in public policy.India has

emerged as a global leader at the front of the climate change.India has pledged
to seek solution for the future.
Government schemes and policies such as Swachh Bharat
Mission,PradhanMantriAwasYojana, Smart Cities, DeenDsayalUpadhyay Gram
JyotiYojana among other, all contribute towards achieving sustainable
development goals. The government has contributed to maintain economic
growth by introducing and implementing various policies and measures relating
to sustainable development,climate change, energy efficiency and air pollution.
Pradhan MantriUjjwalaYojana Scheme, has actively contributed to cleaner
air.Ithas resulted in drastic reduction of respiratory diseases and ultimately
death as per recent medical report.
The Jal Jeeven Mission was launched with the objective of achieving water
security. We have seen 68 percent decline in the size of population of various
animal species and amphibian over the last 60 years. The issue of green house
gases and rising temperature of the earth are a global concern. India is one of
those countries that will be affected by the over 2 degree Celsius rise in global
temperature.
‘India has already taken a lot of steps in the area of innovation and development
of different production methodologies which are environmentally friendly in the
long run.’
(The Economic Times;Oct.27,2021)
(a) State and discuss any two steps involved in attaining sustainable 3
development in India.
(b) From the given text, state any three factors which challenged the carrying 3
capacity of the environment.

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