CBSE Economics Class 12 Sample Paper 1 Page 1

Sample Paper 1
ECONOMICS (030)
Class XII Session 2023-24
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 Questions type questions of 1 mark each.
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered in 100 to 150 words.

Section A -Macro Economics

Multiple Choice Questions (Q1 to Q10) 1 ´ 10=10

1. “Considering the depreciation of Indian Currency (`) in the international market, the Reserve Bank of India (RBI)
has decided to purchase Indian currency (`) in the open market.”
This represents________exchange rate system.
(a) fixed (b) flexible
(c) managed floating (d) manipulated

2. Statement 1: Demonetisation was the step taken by the Government of India in order to tackle the problems of
corruption, black money, terrorism and circulation of fake currency in the Indian Economy.
Statement 2: Demonetisation has ensured improved tax compliance in India over the period of time.
In the light of the given statements, choose the correct alternative 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

3. Complete the table

Producer Value of Output Intermediate Consumption Value Added
Farmer 3,000 –– 3,000
Baker ...(i)... 3,000 3,000
Retail Seller 6,600 ...(iii)... 600
Total ...(ii)... 6,000 ...(iv)...
(a) 600, 15,600, 6,000, 6,000
(b) 6,000, 15,900, 6,000, 6,400
(c) 3,000, 9,000, 6,000, 6,600
(d) 6,000, 15,600, 6,000, 6,000

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4. Identify the correct pair from the following Column I and Column II:
Column I Column II
A. At the Break Even point (i) Equals National Income
B. If MPC is equal to one (ii) Value of k is infinity
C. Value of aggregate demand (iii) Depends upon the investment
D. Consumption in the economy (iv) C >Y
Alternatives:
(a) C - (iii) (b) A - (i)
(c) D - (iv) (d) B - (ii)

5. Surplus in Balance of Payment (BoP) arises when:

(a) Autonomous payments > Autonomous receipts
(b) Autonomous receipts > Autonomous payments
(c) Accommodating receipts > Accommodating payments
(d) Accommodating payments > Accommodating receipts

6. Read the given chart carefully and choose the correct option from the alternatives given below:

(a) Import (b) Export

(c) Net Import (d) Net Export

7. If the value of export of goods of a country is `5,000 crores and the value of import of goods is `6000 crores, then
trade balance will be:
(a) 1,000 crores
(b) 2,000 crores
(c) -1,000 crores
(d) -2,000 crores

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8. Identify the incorrect statement with reference to Balance of Payments.

(a) Export of machinery is recorded in capital account.
(b) Current account records Exports and Imports transactions of a nation.
(c) Current account records all such transactions, which do not impact asset or liability status of a country.
(d) Transfer of funds to the relatives abroad, entered on debit side of current account.

9. Assertion (A): Acquisition of a domestic (Indian) company by a foreign (Australian) company will be recorded
on the credit side of Balance of Payment Account.
Reason (R): It leads to outflow of foreign exchange from the domestic economy.
In the light of the given statements, choose the correct alternative from the following:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is false but Reason (R) is true
(d) Assertion (A) is true but Reason (R) is false

10. Gifts and remittances to abroad are recorded on the______side and_____account in BoP Account.
(i) debit (ii) credit
(iii) current (iv) capital
(a) (i) and (iv)
(b) (ii) and (iv)
(c) (i) and (iii)
(d) (ii) and (iii)

Short Answer Questions (Q11 to Q12) 3´2=6

11. Explain how the allocation of resources can be influenced in the government budget through taxes, expenditure
and subsidies.

12. Calculate Net National Product at Market Price from the following data
Items ` (in crores)
Net factor income from abroad (–) 5
Private final consumption expenditure 100
Personal tax 20
Gross national disposable income 170
Government final consumption expenditure 20
Corporation tax 15
Gross domestic capital formation 30
Personal disposable income 70
Net exports (–) 10
Savings of private corporate sector 5
Net national disposable income 145


o
Explain how the government can use its budgetary policy in reducing the inequality of income in the country.

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Short Answer Questions (Q13 to Q15) 4 ´ 3 = 12

13. Elaborate the `Banker’s bank and supervisor’ function performed by the Reserve Bank of India.

14. How is Real Gross Domestic Product (GDP) different from Nominal Gross Domestic Product (GDP)? Explain
using a numerical example.


o
Interpret the given picture on account of GDP and Welfare.

15. Explain the ‘AD = AS’ approach of the theory of income determination. Use diagram. What changes take place
in the economy when AD > AS?

Long Answer Questions (Q16 to Q17) 6 ´ 2 = 12

16. (a) Define externalities. Give an example of negative externality. What is its impact on welfare?
(b) On the basis of the following data about an economy which constitutes of only two firms A and B. find out
the Value-added by Firm A and Firm B.
(` in crores)
(i) Sales by Firm A 300
(ii) Purchases from Firm B by Firm A 120
(iii) Purchases from Firm A by Firm B 180
(iv) Sales by firm B 600
(v) Closing Stock of Firm A 60
(vi) Closing Stock of Firm B 105
(vii) Opening Stock of Firm A 75
(viii) Opening Stock of Firm B 135
(ix) Indirect taxes by both Firms 90

17. Why is AD curve also called C + I curve? What are its components? Explain.


o
Show graphically the derivation of savings function from consumption function.

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Section B -Indian Economic Development

Multiple Choice Questions (Q18 to Q27) 1 ´ 10=10

18. As per scholars, what was the reason of fall in GDP growth rate in 2015-17 in Pakistan?
(a) Reform process
(b) Corruption
(c) Political instability
(d) All of these

19. Identify the correct pair from Column I and Column II and choose the correct alternative:
Column I Column II
A. Apni Mandi (i) It is in Pune.
B. Rythu Bazars (ii) These are the fruit markets in Andhra Pradesh.
C. Hadaspur Mandi (iii) It is in Punjab, Haryana and Rajasthan.
D. Uzhavar Sandies (iv) These are farmers markets in Maharashtra
Alternatives:
(a) C - (iii)
(b) D - (iv)
(c) A - (i)
(d) B - (ii)

20. Arrange the following events of Pakistan in chronological order and choose the correct alternative:
(i) Nationalisation of capital goods
(ii) Initiation of reforms
(iii) Pakistan got independence
(iv) Announcement of First Five Year Plan
Choose the correct alternative:
(a) (ii), (iv), (i), (iii)
(b) (iv), (iii), (ii), (i)
(c) (iii), (iv), (i), (ii)
(d) (iii), (ii), (i), (iv)

21. In context of the given image, identify the correct option:

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(a) A - India; B - China; C - Pakistan

(b) A - Pakistan; B - India; C - China
(c) A - China; B - India; C - Pakistan
(d) A - India; B - Pakistan; C - China

22. Nations are forming regional and global economic groupings for:
(a) to understand developmental processes of their neighbouring nations
(b) strengthening their own economies
(c) Neither (a) nor (b)
(d) Both (a) and (b)

23. Assertion (A): Animal husbandry is the part of diversification of productive activities in rural area.
Reason (R): It provides stable employment opportunities in off season.
In the light of the given statements, choose the correct alternative from the following:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is false but Reason (R) is true
(d) Assertion (A) is true but Reason (R) is false

24. The motive of British Government behind de-industrialisation was:

(i) To get raw material from India at cheap rate
(ii) To sell British manufactured goods in Indian market at high prices
(iii) To focus on development of agriculture
(iv) To get finished products from India at cheap rate
Choose correct option
(a) Only (iii) (b) (i) and (ii)
(c) Only (iv) (d) (ii) and (iv)

25. Study the following picture and answer the given question.

Women in rural households take up bee keeping as an entrepreneurial activity. Such kind of activities may be
envisaged under_______as diversification activity.
(a) animal husbandry (b) fisheries

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CBSE Economics Class 12 Sample Paper 1 Page 7

(c) horticulture (d) poultry

26. Statement 1: India has an edge over Pakistan in health facilities and skilled manpower.
Statement 2: Pakistan has an edge over India in reducing the proportion of population below poverty line.
In the light of the given statements, choose the correct alternative 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

27. By May 2019, nearly______crore women in India have become member in_____lakh women SHGs.
(a) 4, 44 (b) 2, 34
(c) 7, 64 (d) 6, 54

Short Answer Questions (Q28 to Q29) 3´2=6

28. How are small scale industries distinguished from large scale industries?


o
What were the drawbacks of the licensing policy followed by the government before 1991?

29. It is believed by some of the economists that ‘once the technology is found profitable and is widely adopted,
subsidies should be phased out’. Accept/Refute the above statement.

Short Answer Questions (Q30 to Q32) 4 ´ 3 = 12

30. Interpret the given picture on account of current environmental challenges.

31. What role can the government play in human capital formation in India?


o
How is agricultural diversification helpful for farmers? Explain.

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32. Elucidate the role played by the industrial sector in India.

Long Answer Questions (Q33 to Q34) 6 ´ 2 = 12

33. Compare the traditional approach with the recent approach towards environment.


o
Study the following chart showing the workers in formal and informal sectors and analyse the trend of the two
variables from 2011-12.

34. Read the following text carefully and answer the given questions on the basis of the same and common
understanding:
The term ‘sustainable development’ was used by the Brundtland Commission (1987) which coined what has
become the most often-quoted definition of sustainable development “development that meets the needs of the
present without compromising the ability of future generations to meet their own needs.” Sustainable development
does not focus solely on environmental issues. The United Nations 2005 World Summit Outcome Document refers
to the four ‘interdependent and mutually reinforcing pillars’ of sustainable development as including: economic
development, social development and environmental protection. The fourth pillar is indigenous people and
culture. Proponents of Sustainable Development argue that it provides a context in which overall sustainability is
improved where cutting edge Green development is unattainable. For example, a cutting edge treatment plant with
extremely high maintenance costs may not be sustainable in regions of the world with fewer financial resources.
Sustainability requires that human activity only use nature’s resources at a rate, which they can be replenished
naturally. Inherently, the concept of sustainable development is intertwined with the concept of carrying capacity.
(a) What is sustainable development? Does sustainable development solely focus on environment? Why?
(b) Explain any two strategies for sustainable development in India.


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