CHENNAI SAHODAYA SCHOOLS COMPLEX

(General Instructions)

 Please check that this question paper contains ___8___ printed pages.
 Please check that this question paper contains ___34__ questions.
 Please write down the serial number of the question before attempting it.
 Reading time of 15 minutes is given to read the question paper alone. No writing
during this time.

COMMON EXAMINATION
Class-12
(ECONOMICS-030)
Roll No.: SET 1 Maximum Marks:80
Date: 08/01/2025 Time allowed: 3 hours
GENERAL INSTRUCTIONS:
I. This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development
II. This paper contains 20 Multiple Choice Type Questions of 1 mark each.
III. This paper contains 4 Short Answer Type Questions of 3 marks each to be
answered in 60 to 80 words.
IV. This paper contains 6 Short Answer Type Questions of 4 marks each to be
answered in 80 to 100 words.
V. This paper contains 4 Long Answer Type Questions of 6 marks each to be
answered in 100 to 150 words.

Q.NO. SECTION A - MACRO ECONOMICS MARKS

1. Total consumption expenditure by households under Keynesian Economics is a
combination of ______ and ______.
A. Autonomous Consumption, Autonomous Investments
B. Autonomous Investments, Induced Consumption 1
C. Induced Investments, Autonomous Investments
D. Autonomous Consumption, Induced Consumption
2. On the basis of the given data, calculate revenue deficit:
Sno Items Amount( ₹ in crore)
i Tax receipts 1,542
ii Revenue expenditure 1,927
iii Direct taxes 670 1
iv Non tax receipts 303

A. ₹ 1,845 crore B. ₹ 82 crore

C. ₹ 100 crore C. ₹ 588 crore
3. Choose the correct alternative from those given below.
Assertion (A): Transfer income is not included in national income.
Reason (R): Transfer income can be received either within the domestic territory or
from abroad.

Alternatives:
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A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of the Assertion (A).
B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of the Assertion (A).
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true

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4. In 2024, the Government has decided to hike its capital expenditure by 11.1%.

Which of the following could be a reason for this hike?

A. Increasing salaries of government employees 1
B. Repayment of mounting interests on international loans
C. Paying pending pensions to the government employees
D. Rapid employment generation through infrastructural projects
5. If in an economy the consumption and savings curve are parallel to each other, what
will be the value of the investment multiplier?
1
A. 1 B. 2 C. 3 D. 4
6. Which of the following statement is true?

A. Loans from IMF is a Revenue Receipt.

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B. Higher revenue deficit necessarily leads to higher fiscal deficit.
C. Borrowing by a government represents a situation of fiscal deficit.
D. Revenue deficit is the excess of capital receipts over the revenue receipts.
7. Read the following statements carefully:
Statement 1: Constant rate of change of consumption (ΔC) with respect to change in
income (ΔY), is the reason for the straight line consumption curve.
Statement 2: Marginal rate of change between consumption and income is defined
as Average Propensity to Consume (APC).
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In the light of the given statements, choose the correct alternative 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.
8. Given below are some basic activities that occur in an economy. Identify the
activity that would not help to study the economy in its totality?

A. government introducing policies 1

B. aggregate demand and supply of goods
C. determination of the consumer’s equilibrium
D. determination of equilibrium level of income and employment
9. Which of these do not fall under the purview of the Central Bank?
P: controlling money supply
Q: providing loans to citizens
R: issuing currency
S: holding foreign exchange reserves
1
Alternatives:
A. only S
B. only Q
C. Q and S
D. P and R
10. Choose the correct alternative to complete the given schedule:

Round Deposits Loans (90%) Reserve

Ratio(10%)
I 2000 1800 200
II …(i)… ….(ii)…. 180
…. … …. ….
1
…. …. …. …
TOTAL …(iii)… …(iv)… 2000
Alternatives :
A. 2000, 1620, 20000, 18000
B. 1800, 180, 2000, 18000
C. 1620, 180, 2000, 18000
D. 1800, 1620, 20000, 18000

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11.A) Suppose in an imaginary economy GDP at Market Price in a particular fiscal year
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was 4,000 crores, National Income was 2,500 crores, Net Factor Income paid by the
economy to Rest of the World was 400 crores and the value of Net Indirect Taxes is
450 Crores. Estimate the value of consumption of fixed capital for the economy
from the given data.

(OR)
11 B) Define ‘Subsidies’. Distinguish between ‘Product taxes’ and ‘Production taxes’
with examples.
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12. i) Define Revenue receipts. Does ‘Disinvestment’ constitute Revenue receipt? 3
Give reason.
ii) Give the meaning of a private good.

13. Study the following image :

(i) Define ‘Deflationary gap’. 1

(ii) Identify and briefly explain from the given image any one step which may be 3
taken by RBI to correct the situation of deflationary gap.

14. A) Elaborate the two components of Aggregate Supply in a two-sector economy. 4

(OR)
In an economy ex-ante Aggregate Demand is less than ex-ante Aggregate Supply."
14. B) Explain its impact on the level of output, income and employment. 4

15. ‘Barter system can work only when both buyer and seller are ready to exchange
each other’s good’. Explain how money has overcome this problem of barter. 4

16. Read the following text carefully:

India has recorded an improvement in its current account, achieving a surplus of

USD 5.7 billion, which equates to 0.6 per cent of its gross domestic product (GDP)
in the fourth quarter of fiscal year 2024, according to a recent report by CRISIL.
This is a significant shift from the USD 8.7 billion deficit (1.0 per cent of GDP)
reported in the third quarter, and a notable improvement compared to the USD 1.3
billion deficit (0.2 per cent of GDP) in the fourth quarter of the previous fiscal year.
Improvement in the current account balance is attributed to several factors,
including a narrowing merchandise trade deficit, an increased services trade surplus,
and a rise in remittances.

Financial flows also showed considerable improvement both on a quarterly and

yearly basis, resulting in a substantial foreign exchange reserve accretion of USD
30.8 billion during the fourth quarter–the highest in the past ten quarters.
The fourth quarter saw India’s current account surplus rise to 0.6 per cent of GDP, a

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significant recovery from the 1.0 per cent deficit recorded in the third quarter.
The trade deficit narrowed considerably to 0.9 per cent of GDP from 2.7 per cent in
the previous quarter.
FDI inflows increased to USD 19.8 billion during the fourth quarter, but this was
offset by accelerated FDI outflows, which rose to USD 17.9 billion from USD 10.7
billion.

Other investments, including non-resident Indian (NRI) deposits, external

commercial borrowings (ECBs), other loans, and trade credit, saw a significant
jump to USD 14.28 billion in the fourth quarter from USD 1.22 billion in the
previous quarter.
Forex reserves surged by USD 30.8 billion in the fourth quarter, compared to a USD
6.0 billion increase in the third quarter.
As of the end of March 2024, the reserves stood at USD 642.63 billion. The rupee
appreciated by 0.27 per cent during the quarter, averaging 83.02 per US dollar, in
contrast to a 0.7 per cent depreciation in the previous quarter.
……… 26 June, 2024-The Print……..
On the basis of the given article and common understanding, answer the following
questions.
i) What is current account balance? Enumerate the reasons for the improvement
in India’s current account balance as per the given report. 3
ii) In which sub account and on which side of the Balance of payment account
will ‘External commercial borrowings’ be recorded? Give reasons. 2
iii) “The rupee appreciated by 0.27 per cent during the quarter, averaging 83.02
per US dollar, in contrast to a 0.7 per cent depreciation in the previous 1
quarter”-What is meant by Rupee appreciation ?
17.(A) i) On the basis of the given data calculate National income.

S.No. Particulars ₹ in crore

1. Private final consumption 900 4
expenditure
2. Profit 100
3. Government final consumption 400
expenditure
4. Net indirect taxes 100
5. Gross domestic capital formation 250
6. Change in stock 50
7. Net factor income from abroad (-)40
8. Net domestic capital formation 230
9. Net imports 30
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ii) “Investment goods are intermediate goods as they are used up to produce other
goods’’ Defend or refute the given statement with valid reason.
(OR)

17(B) i) Briefly Discuss three precautions required while estimating national income
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by Income method.
ii) Distinguish between Depreciation and Capital loss. ‘Natural calamities in
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the hill states of India have led to massive destruction of capital assets.’
Identify the type of loss (depreciation or capital loss) indicated in the
aforesaid statement. Give valid reasons in support of your answer.
SECTION B – INDIAN ECONOMIC DEVELOPMENT

18. Which of the following highlights the role of Information technology in rural
development?
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i) It helps in achieving sustainable development
ii) It helps in attainment of food security

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iii) It disseminates information regarding emerging technologies

Alternatives:
A. Only i)
B. Only iii)
C. Only i) and iii)
D. i) ii) and iii)
19. C. Rajagopalachari, a founder of the Swatantra Party, coined the term 'permit-
license raj' to encapsulate the party's frustrations with Nehru's policies, writing in
his magazine Swarajya: I want the corruptions of the Permit/Licence Raj to go... I
want real, equal opportunities for all and no private monopolies created by the
Permit/Licence Raj.
How were these private monopolies indulging in the corruption that C.
1
Rajagopalachari talks about?

A. They led to lobbying and personal benefits for big industrial houses.
B. They continued to function even when running into losses.
C. They exploited the people by grossly increasing prices.
D. They could not compete with international products.
20. From the given image choose the options that suggest training of workers under the
supervision of a skilled worker.

A. Lectures B. On the job training

C. Group discussion D. Coaching or mentoring
21. Which of the following statements correctly describes demographic transition?
A. A sudden decline in the population growth rate due to migration
B. A change in the population density across different states in India 1
C. A significant increase in the birth rate and death rate simultaneously
D. A shift from high birth and death rates to low birth and death rates over time.
22. From the set of statements given in Column I and Column II, choose the correct pair 1
of statements:
Column I Column II
a. Medium term i China model of
development plan growth
b. NITI Aayog ii Reforms in India
c. Command iii Pakistan’s Five-year
economy plans
d. Economic iv Replacement for
Reforms 1991 Planning commission

Alternatives:
A. a-iv, b-i, c-iii, d-ii
B. a-iii, b -iv, c -i, d-ii
C. a-i, b-ii, c-iv, d-iii
D. a-iv, b-iii c-ii, d-i
23. Read the following statements: Assertion (A) and Reason (R). Choose the correct
alternative from those given below.

Assertion (A): The industrial sector reforms implemented under

1
liberalization policies in a country led to an increase in Foreign
Direct Investment in the manufacturing sector.
Reason (R): Liberalization policies aimed to toughen trade barriers, regulate
industries, and provide a conducive environment for Indigenous

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investors, making the manufacturing sector more attractive for FDI

.
Alternatives:
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of the Assertion (A).
B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of the Assertion (A).
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true.
24. In which year was the Central Pollution Control Board set up by the Indian
government to address two major environmental concerns viz. water and air
pollution?
1
(Choose the correct option to fill up the blank) .

A. 1974 B. 1947 C. 1964 D. 1982

25. United Nations General Assembly has enlisted a list of 17 Sustainable Development
Goals (SDGs) to be achieved by 2030. Accordingly, SDG 7 is to "Ensure that
everyone has access to enough, trustworthy, sustainable, and modern energy."
______ does not constitute a step toward achieving SDG 7.
1
A. CNG
B. Solar energy
C. Thermal power
D. Mini-hydel plants
26. There are two statements given below, marked as Assertion (A) and Reason (R).
Read the statements and choose the correct option.

Statement (1): The ratio of employed women in urban areas is generally lower
than that of employed women in rural areas.
Statement (2): There are a higher number of low-income employment 1
opportunities available in rural areas than in urban areas.
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
27. Which can be classified as one of the alternative sources of diversification from
farm output?
A. Green Revolution
1
B. Horticulture
C. Organic Farming
D. Conventional Farming
28. A) “Under the land reforms introduced after independence, the goal of equity was not
3
fully served by the abolition of intermediaries.’ Do you agree? Give reasons
(OR)
28. B) Why was public sector given a leading role in industrial development during the
3
planning period? Explain.
29. Define Liberty indicator .Give examples of liberty indicators.
3
30. Giving reasons state whether the following statements pertaining to China are true
or false:
A. Density of Population in China is the lowest.
B. China has the highest rate of Urbanisation. 4
C. Annual growth rate of population is the highest in China.
D. China ranks second in Human Development Index.
31.A) Recently the Government of India has taken numerous steps towards increasing the
farmer's income through agricultural diversification.”
4
In light of the above statement, explain any two advantages of diversification in
agriculture.
(OR)
31.B) “Active Government intervention is essential in education and health sectors in
4
India.”
Do you agree with the given statement? Give reasons in support of your answer

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32. During 2011-2012 India had about 473 million strong workforces. The given chart
shows the employment of this workforce in Formal and Informal sector

With the help of the given chart, answer the following questions.
a) Estimate the percentage of people working in Formal and Informal sector. 2

b) Why are there less number of people employed in the formal sector? 1

c) Define “Informalisation” of work force. 1

33. A) i) “Since independence the Union and State governments have played an
important role creating opportunities for employment generation. Briefly
explain the two broad categories of these efforts.
3
ii) "In order to protect the future of our planet, it is important to tackle carbon
emissions." In the light of the above statement discuss any two strategies to
tackle this global concern.
3
33. B) (OR)

i) “The difference in literacy rates between male and female have been
narrowing signifying a positive development in gender equity, still the need to
3
promote education for women is imminent”. Justify giving reasons.

ii) In recent years awareness of harmful effect of chemical-based fertilisers and

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pesticide is on a rise and there is a need to evolve an ecofriendly technology
for sustainable development. Identify one such technology and list three of its
advantages.

34. Read the following text carefully.

New Economic Policy of India was launched in the year 1991 under the leadership of P. V.
Narasimha Rao. This policy opened the door of the India Economy for the global exposure
for the first time. In this New Economic Policy P. V. Narasimha Rao government reduced
the import duties, opened reserved sector for the private players, devalued the Indian
currency to increase the export. This is also known as the LPG Model of growth .
New Economic Policy refers to economic liberalisation or relaxation in the import
tariffs, deregulation of markets or opening the markets for private and foreign
players, and reduction of taxes to expand the economic wings of the country.

Former Prime Minister Manmohan Singh is considered to be the father of New

Economic Policy (NEP) of India. Manmohan Singh introduced the NEP on July 24,
1991 Beginning with mid-1991, the govt. has made some radical changes in its

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policies related to foreign trade, Foreign Direct Investment, exchange rate, industry,
fiscal discipline etc. The various elements, when put together, constitute an
economic policy which marks a big departure from what has gone before.
The thrust of the policies has been towards creating a more competitive
environment in the economy as a means to improving the productivity and
efficiency of the system. This was to be achieved by removing the barriers to entry
and the restrictions on the growth of firms.

On the basis of the given text and common understanding, answer the
following questions.
3
i) “The NEP 1991 consisted of a wide-ranging economics reform and the thrust of
these policies was to create a competitive environment in the economy and
remove barriers to entry and growth of firms.”- Explain the two classifications
of these policies. 3

ii) Briefly explain the radical changes made in policies relating to Foreign
exchange.

……..End of paper…….