CBSE Economics Class 12 Sample Paper 18 Page 1

Sample Paper 18
ECONOMICS (030)
Class XII Session 2022-23
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. Which of the following statements do not support with the function of RBI as supervisor to the commercial banks?
(a) Extend loans to the commercial bank.
(b) Inspection of operations of banks.
(c) Regulates the expansion, merger, acquisition etc. of the bank.
(d) Formulates all rules and regulations for commercial bank.

2. Let foreign exchange rate between Indian Rupee and US dollar is ` 40/1$ and it changes to ` 50/1$. Which of the
following is the reason of depreciation of Indian currency?
(a) Increase in both demand and supply of US dollar.
(b) Increase in supply of US dollar and decrease in demand of US dollar.
(c) Increase in demand of US dollar and decrease in supply of US dollar.
(d) Decrease in both demand and supply of US dollar.

3. Statement I :The medium term target for Consumer Price Inflation (CPI) maintained by the RBI in context of the
Indian economy falls within the band of 3% ± 2%.
Statement II : When C function shoots from Y-axis, it indicates two arguments i.e. saving is negative when income
is zero; and consumption is positive when income is zero.
In the light of the given statements, choose the correct alternative from the following.
(a) Both statements are true
(b) Both statements are false
(c) Statement I is true and Statement II is false
(d) Statement I is false and Statement II is true

4. The difference between narrow money and broad money is ______

(a) saving deposits of banks
(b) time deposits with banks
(c) coins and currency
(d) only currency

Install NODIA App to See the Solutions.

Click Here To Install
Page 2 Sample Paper 18 CBSE Economics Class 12

5. Statement I : Profits received from investments abroad is recorded in the capital account.
Statement II : Import of machines is recorded in the current account.
In the light of the given statements, choose the alternative from the following :
(a) Both statements are true
(b) Both statements are false
(c) Statement I is true and Statement II if false
(d) Statement I is false and Statement II is true

6. Observe the given figure carefully and choose the correct pair from the alternatives given below :

(a) Flow, Flow

(b) Stock, Stock
(c) Flow, Stock
(d) Stock, Flow


o
Statement I : Purchase of machinery by a producer is an intermediate good.
Statement II : Durable goods are used-up in a single act of consumption.
In the light of the given statements, choose the correct alternative from the following :
(a) Both statements are true
(b) Both statements are false
(c) Statement I is true and Statement II is false
(d) Statement I is false and Statement II is true

7. The value of Aggregate Demand at an income level of ` 300 crore from the given data pertaining to an economy
equals ________
Savings function S = – 10 + 0.20Y
Planned investment = ` 100 crore
(a) ` 350 crore (b) ` 450 crore
(c) ` 150 crore (d) ` 250 crore


o
What will happen, when AS < AD ?
(a) The producers would plan same level of production.
(b) To clear unwanted stocks, the producers would plan a cut down in production.
(c) To rebuild the desire stocks, the producers would plan greater production.
(d) Both (a) and (c)

Install NODIA App to See the Solutions.

Click Here To Install
CBSE Economics Class 12 Sample Paper 18 Page 3

8. Suppose in a hypothetical economy, the income rises from ` 5,000 crore to ` 6,000 crore. As a result, the consumption
expenditure rises from ` 4,000 crore to ` 4,600 crore. Marginal propensity to consume in such a case would be
_______.
(a) 0.2 (b) 0.6
(c) 0.8 (d) 0.4


o
If Marginal Propensity to Save (MPS) is 0.25 and initial change in investment is ` 250 crores, then the final change
in income would be _______.
(a) ` 500 crore (b) ` 3,500 crore
(c) ` 1,000 crore (d) ` 1,200 crore

9. Assertion : Fiscal policy focuses on both the principles of economic growth and stability.
Reason : Stability is achieved by correcting the situation of inflationary and deflationary gap, while growth is
achieved by way of lower taxation and higher subsidies to the producers.
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

10. Assertion : Managed floating exchange rate system is an amalgamation of fixed exchange rate and flexible exchange
rate.
Reason : Central bank can manipulate the flexible exchange rate system.
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

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

11. Find net value added at market price.

Contents ` (in crore)
Output sold (units) 800
Price per unit of output 20
Excise 1,600
Import duty 400
Net change in stock (–) 500
Depreciation 1,000
Intermediate cost 8,000

12. Differentiate between current and capital account of BoP.

o
Giving reasons, explain whether the given statements are true or false.
(i) Improvement in exchange rate of the country’s currency is always beneficial for Balance of Payment (BoP).
(ii) Rise in foreign exchange rate cause a rise in its supply.

Install NODIA App to See the Solutions.

Click Here To Install
Page 4 Sample Paper 18 CBSE Economics Class 12

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

13. Keynesian theory tell us that inflationary gap emerges only when full employment is reached. But, in India we often
find high rate of inflation along with high rate of unemployment. How do you explain this paradox?

14. An economy is in equilibrium. Calculate the investment expenditure from the following. National Income = ` 800
Marginal Propensity to Save = 0. 3
Autonomous Consumption = 100

15. “Credit creation is inversely related to the reserve deposit ratio”.

Justify the given statement, using a hypothetical example.


o
Explain the ‘standard of deferred payment’ function of money. How has it solved the related problem created by
barter?

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

16. (i) Government incurs expenditure to popularise yoga among the masses. Analyse its impact on Gross Domestic
Product and welfare of the people.
(ii) Explain the precautions that are taken while estimating national income by value added method.

17. (i) The graph given below highlights the situation of gross fiscal deficit in context of the Indian economy taken
from RBI’s Bulletin on ‘Government Finances 2019-20: A half yearly review’. In context of the figure given
below, give the meaning of fiscal deficit and explain any two ways to deal with such a problem.

(ii) Tax rates on higher income group have been increased. Which economic value does it reflect? Explain.


o
(i) Explain the role of government budget in fighting inflationary tendencies.
(ii) Explain why public goods should be provided by the government.

Install NODIA App to See the Solutions.

Click Here To Install
CBSE Economics Class 12 Sample Paper 18 Page 5

Section B -Indian Economic Development

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

18. The chief casual factor responsible for the decline of handicrafts industry in India was
(a) high tariff on export of raw materials from India
(b) high tariff on import of British goods into India
(c) heavy duties on Indian handicrafts products
(d) All of the above

19. _______ industries were reserved for the public sector under Industrial Policy Resolution, 1956.
(a) 15 (b) 2
(c) 17 (d) 21


o
The other name of Village and Small-Scale Industries Committee set-up in 1955 is ______.
(a) Narasimham committee (b) Hussain committee
(c) Lakdawala committee (d) Karve committee

20. The main aim of ‘Great Leap Forward’ (GLF) in China was to ensure rapid increase of _______.
(a) services (b) exports
(c) agriculture (d) industries


o
Introduction of Economic Reforms in China took place in the year _______.
(a) 1988 (b) 1991
(c) 1978 (d) 1980
21. When extraction is above the rate of regeneration of the resource and the wastage are outside the absorptive capacity
of the environment, then environment fails to perform its one of the vital function. What is that function?
(a) It sustains life
(b) It provides aesthetic services
(c) It supplies resources
(d) It assimilates waste

22. State the correct combination between the following columns

Column A Column B
A. 1850 (i) Establishment of TISCO
B. 1921 (ii) Introduction of railways by the British
C. 1907 (iii) First railway bridge linking Bombay with Thane
D. 1854 (iv) The year of Great Divide
A B C D
(a) (i) (ii) (iii) (iv)
(b) (iii) (iv) (i) (ii)
(c) (ii) (iv) (i) (iii)
(d) (iv) (ii) (i) (iii)

Install NODIA App to See the Solutions.

Click Here To Install
Page 6 Sample Paper 18 CBSE Economics Class 12

23. Statement I Self Help Groups (SHGs) have emerged to fill the gap in formed credit system.
Statement II Formal credit system in India, is not only inadequate but also not fully integrated with rural social
community development.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are false
(b) Both statements are true
(c) Statement I is true and Statement II is false
(d) Statement I is false and Statement II is true

24. Statement I Proportion of people below poverty line is more in India with respect to Pakistan.
Statement II Maternal Mortality Rate (MMR) is high in Pakistan with respect to China.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are true
(b) Both statements are false
(c) Statement I is false and Statement II is true
(d) Statement I is true and Statement II is false

25. ______ includes quantitative aspects of per capita, GDP and the quality aspects of performance in health and
education.
(a) GDI
(b) HDI
(c) HD
(d) None of these


o
_______ is a geographical region that has economic laws different from a country’s typical economic laws.
(a) SEZ
(b) GLF
(c) NEP
(d) None of these

26. Assertion : Modernisation implies adoption of new technology along with a change in the social and economic
outlook.
Reason : Over the years, there have been a reduction in the gender wage parity and in the female labour force
participation rate.
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

27. Assertion : In 1970s, there was low population growth in China.

Reason : China introduced the one-child norm in late 1970s.
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

Install NODIA App to See the Solutions.

Click Here To Install
CBSE Economics Class 12 Sample Paper 18 Page 7

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

28. On the basis of the figure given below, explain what type of unemployment can this industry result in? Suggest for
two measures for reducing this kind of unemployment?

29. Defend of refute the statement with valid explanation.

“It is necessary to replace the private moneylenders by institutional sources of credit.”


o
According to the National Sample Survey Office’s (NSSO’s) data, the share of regular salaried workers in
employment was on the rise in 2017-18 with respect to 2011-12. For the year 2017-18, the proportion of regular
salaried workers rose to 13.1% in 2017-18 for rural areas, and 47% for urban areas. State any three reasons for this
observed trend across rural-urban areas?

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

30. (i) Define worker-population ratio.

(ii) Analyse the trends in sectoral distribution of work force in India on the basis of data
Trends in Employment Pattern (Sector-wise),
1972-2012 (in%)
Sector 1972-73 1983 1993-94 1999-2000 2011-2012
Primary 74.3 68.6 64 60.4 48.9
Secondary 10.9 11.5 16 15.8 24.3
Services 14.8 16.9 20 23.8 26.8
Total 100.0 100.0 100.0 100.0 100.0

31. State whether the following statements are true or false, with valid arguments
(i) The percentage share of agricultural sector in the exports of the country declined in the period 1950-1990.
(ii) The Gulf crisis and the collapse of Soviet Block was responsible, to a certain extent for the economic crisis of
1991.

32. The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons
in support of your answer.


o
(i) What do you understand by the term economy?
(ii) How are economies classified in the economic system?

Install NODIA App to See the Solutions.

Click Here To Install
Page 8 Sample Paper 18 CBSE Economics Class 12

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

33. (i) Unemployment in India is considered to be a chronic problem. Why?

(ii) What is meant by ‘jobless growth’?
(iii) Why have Self Help Groups (SHGs) been established?


o
(i) Enlist some problems faced by farmers during the initial years of organic farming.
(ii) “Human capital formation gives birth to innovation, invention and technological improvements”. Do you agree
with the given statement? Support your answer with valid arguments.

34. Read the following text carefully and answer the given questions on the basis of the same and common understanding.
The 20th century included the inception of modern family planning, which restricted the fertility of hundreds of
millions of couples around the world. Due to concerns about the world’s unprecedented rate of population growth
in the mid-20th century, some aid agencies and international organisations began to support the establishment of
family planning programs.
About 40 years later, in the mid-1990s, large-scale family planning programs were active in 115 countries.
China’s One Child Policy (OCP) is the largest among the World’s family planning programs. In the 1970s, after two
decades of explicitly encouraging population growth, policy-makers in China began enacting a series of measures
to curb it. The OCP was formally initiated in 1979 and firmly established across the country in 1980.
It was the first time that family planning policy became formal law in China. Differing from birth control policies
in many other countries, the OCP assigned a compulsory general ‘one-birth’ quota to each couple, though its
implementation has varied considerably across regions for different ethnicities at different times. The policy affected
millions of couples and lasted more than 30 years.
According to the World Bank, the fertility rate in China dropped from 2.81 in 1979 to 1.51 in 2000. The reduced
fertility rate is likely to have affected the Chinese labour market profoundly. In 1979, the Chinese government
formally initiated the OCP to alleviate social, economic, and environmental problems such as the high unemployment
rate and scarcity of land resources.
As opposed to many family planning policies in other countries, the OCP was compulsory rather than voluntary. As
the name suggests, the policy restricted a couple to having only one child. However, there were some exemptions.
The birth quota varied according to residence (urban/rural) and ethnicity (Han/non-Han).
Since Han ethnicity is by far the largest in China, accounting for 93% of the population, the policy mainly restricted
the fertility of people with Han ethnicity. In general, Han households in urban regions were only allowed to have
one child, while most households in rural areas could have a second child if their first was female (this exception
is called the “one-and-a-half-child policy”). Meanwhile, in most regions, households of non-Han ethnicity were
allowed to have two or three children, regardless of gender.
In March 1991, to show resoluteness, the Central Government listed family planning among the three basic state
policies in China’s Eighth Five Year Plan passed by the National People’s Council. The Eighth Five Year Plan
explicitly set a goal of reducing the natural growth rate of the country’s population to less than 1.25% on average
during the following decade. To achieve such a challenging objective, national leaders employed a “responsibility
system” to induce subnational or provincial officials to set high fine rates.
(i) Enumerate the effects of the policy of one child norm in China.
(ii) Comment on the growth rate trends witnessed in China and India in the last two decades.

******

Install NODIA App to See the Solutions.

Click Here To Install