DEVASTHALY VIDYAPEETH, BALLIA

ECONOMICS – 2021
CLASS - XII
A. Multiple Choice Questions
1. On the eve of Independence, Indian economy was:
(a) Stagnant and backward (b) Developed
(c) Self-reliant (d) Capitalist
2. In 1947, the growth rate of per capita income in India was approximately:
(a) 2% (b) 1.5%
(c) 0.5% (d) 2.5%
3. Name the economist whose estimates on GDP and per capita income during the British rule were considered very
significant.
(a) William Digby (b) Dr. V.K.R.V. Rao
(c) Dadabhai Naroji (d) Findlay Shirras
4. Which industry suffered a major setback during the British rule?
(a) Cement (b) Iron and steel (c) Handicraft (d) Paper
5. The most important infrastructure developed during the British rule was:
(a) Airways (b) Waterways (c) Railways (d) None of these
6. Which year is described as the "Year of Great Divide"?
(a) 1881 (b) 1921 (c) 1907 (d) 1931
7. The opening of Suez Canal served as a direct route for ships operating between:
(a) India and America (b) India and Sri Lanka
(c) India and Pakistan (d) India and Britain
8. The opening of the Suez Canal in 1869:
(a) Adversely affected the monopoly control of India's foreign trade
(b) Reduced the cost of transportation of goods between India and Britain
(c) Enhanced inter-state trade in India (d) Reduced the export of goods from India to Britain
9. The British introduced railways in India in the year
(a) 1849 (b) 1850 (c) 1851 .(d) 1859
10. The main reason for stagnation in agriculture during the British rule was:
(a) Lack of technology (b) Commercialisation of agriculture
(c) Land tenure system (d) De—industrialisation
11. The literacy rate and the female literacy rate of India at the time of independence were:
(a) 16 per cent, 7 per cent (b) 12 per cent, 7 per cent
(c) 32 per cent, 16 per cent (d) 16 per cent, 12 per cent
12. What was the principal source of occupation during the British rule?
(a) Agriculture (b) Mining
(c) Manufacturing (d) Trade and Commerce
13. When was first official Census conducted in India?
(a) 1882 (b) 1881 (c) 1885 (d) 1886
14. 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
(a) Both (i) and (ii) above (b) Both (ii) and (iv) above
(c) Only (iii) above (d) Only (iv) above
15. The decline of handicraft industries led to:
(i) Large scale unemployment
(ii) Encouraged the import of manufactured goods from Britain
(iii) Development of capital goods industries in India
(iv) Encouraged the export of manufactured goods to Britain
(a) (i), (ii) and (iii) above (b) (i), (iii) and (iv) above
(c) Both (i) and (ii) above (d) Both (i) and (iv) above
16. Mortality rate is one of the indicators of of an economy.
(a) Occupational structure (b) Unemployment
(c) Demographic profile (d) Foreign trade
17. High value of which of the following indicators reflected social backwardness during the British rule in India?
(a) Literacy Rate (b) Female literacy
(c) Infant Mortality Rate (d) Life Expectancy
18. On the basis of the workforce engaged in various sectors in pre-independent India, the following are ranked from the
highest to the lowest?
(a) Primary sector, Secondary sector, Tertiary sector (b) Tertiary sector, Primary sector, Secondary sector
(c) Secondary sector, Tertiary sector, Primary sector (d) Primary sector, Tertiary sector, Secondary sector

19. Which of the following statements is not true about the Indian economy during the British rule?
(a) Slow growth of agricultural and industrial sector
(b) The area of operation of public sector was very limited
(c) Drain of India's wealth despite export surplus.
(d) During the colonial period, the service sector accounted for the largest share of workforce.
20. Which of the following social indicators contributed to the worsening of India's demographic profile during the
colonial period?
(a) Low Infant Mortality rate (b) High Life expectancy
(c) Low Literacy rate (d) Low Birth rate and Death rate
21. Which of the following statements is not true about the foreign trade in context of Indian economy during the British
rule?
(a) India became exporter of primary products and an importer of finished consumer goods and capital goods from
Britain.
(b) India traded with many countries of the world despite discriminatory tariff policy pursued by the British
government.
(c) India generated huge export surplus.
(d) Britain had a monopoly control over India's foreign trade.
22. Which of the following statements is not true with regard to the development of railways by the British?
(a) It helped in breaking geographical and cultural barriers among people.
(b) It promoted commercialisation of Indian agriculture.
(c) The social benefits accruing due to development of railways outweighed the country's huge economic loss.
(d) It increased the volume of India's exports.
23. The export surplus generated during the British rule was used:
(a) To meet administrative expenses of the British government
(b) To meet expenses on war fought by the British government
(c) To import invisible items
(d) All of the above
24. The economic system adopted by India is
(a) Capitalistic (b) Socialistic
(c) Mixed Economy (d) None of these
25. When was Planning Commission setup?
(a) 1949 (b) 1950 (c) 1956 (d) 1850
26. In which year was India's First Five Year Plan launched?
(a)1951-56 (b) 1952-57 (c) 1947-52 (d) 1950-55
27. Which Five Year Plan was implemented during the year 2012—17?
(a) Eighteenth (b) Ninth (c) Eleventh (d) Twelfth
28. Which of the following is not a goal of perspective plans in India?
(a) GDP Growth (b) Equity (c) Land reforms (d) Self-reliance
29. In which economy means of production are owned, controlled and operated by the Government?
(a)Mixed Economy (b) Socialist Economy
(c) Capitalist Economy (d) None of these
30. In a Capitalist Economy means of production are owned, controlled and operated by:
(a) Private sector (b) Public sector (c) External sector (d) Both (a) and (b)
31. Name the body/institution which was engaged in the formulation of Five Year Plans in India.
(a) Planning Commission (b) Election Commission
(c) National Development Commission (d) None of these
32. When was NITI Aayog formed?
(a) 1950 (b) 1991 (c) 2015 (d) 2012
33. Who is the ex-officio chairman of the NITI Aayog?
(a) Prime Minister (b) Home Minister
(c) Finance Minister (d) President
34. Mahalanobis Model was started inFive Year Plan.
(a) First (b) Second (c) Tenth (d) Eleventh
35. Which of the following facts are associated with P.C. Mahalanobis?
(a) He is known as the architect of Indian planning.
(b) He started the journal Sankhya.
(c) He established the Indian Statistical Institute. (d) All of the above.
36. Who is known as the architect of Indian Planning?
(a) Jawaharlal Nehru (b) Dr. B.R. Ambedkar
(c) P.C. Mahalanobis (d) Dadabhai Naoroji
37. The production decision under which economic system is based upon the market forces of demand and supply?
(a) Capitalism (b) Socialism (c) Mixed (d) Monarchy
38. Which amongst the following are the central problems of an economy?
(a) What to produce (b) How to produce
(c) For whom to produce (d) All of the above
39. Which sector made the maximum contribution in the national income of India from the period 1950—91?
(a) Agriculture sector (b) Service sector
(c) Industrial sector (d) None of these
40. The term 'natural rate of unemployment' is consistent with the situation of:
(a) Full employment (b) Under employment
(c) Disguised unemployment (d) Structural unemployment
41. 'Modernisation' as a goal of planning in context of Indian economy aimed at:
(a) Use of new technology (b) Change in social outlook (c) Adopting western lifestyle (d) Both (a) and (b) above
42. The share of agricultural sector in India's GDP has tended to:
(a) Decline (b) Rise
(c) Remain constant (d) First decline then increase
43. Equity as a goal of planning aims to achieve the following objectives:
(a) Reduction in economic inequalities (b) Curbing concentration of economic power
(c) Uplifting the weaker sections of the society (d) All of the above
44. The nature of unemployment seen in agriculture is:
(a) Cyclical unemployment (b) Educational unemployment
(c) Disguised unemployment (d) Voluntary unemployment
45. In which year did the Green Revolution start in India?
(a) 1967-68 (b) 1980-81 (c) 19014)2 (d) 1947-48
46. Price Support policy means:
(a) Maximum price for produced goods
(b) Subsidy to farmers
(c) More price than industrial goods
(d) Minimum price fixed by the Government for the farmers

47. Tariffs and quotas were fixed under Industrial Policy Resolution 1956 with an objective of:
(a) Increasing exports (b) Increasing imports
(c) Restricting imports and protect domestic firms from foreign competition
(d) To increase foreign competition
48. Which of the following is a traditional source of rural credit?
(a) Regional Rural Bank (b) Village moneylender (c) Commercial Bank (d) Co-operative Bank
49. IPR 1956 laid emphasis on the role of:
(a) Public sector(b) Private sector (c) FDI (d) Large scale industries
50. Under IPR 1956, the policy of licensing and tax concessions was used to:
(a) Promote industrialisation in backward regions.
(b) To promote regional equality.
(c) To ensure that the quantity of goods produced was not more than what the economy required.
(d) All of the above
51. What was the maximum limit for investment in a small-scale industrial unit in the year 1950?
(a) Five Lakh (b) Ten lakh (c) One crore (d) Five crore
52. What is the investment limit for small scale industries at present?
(a) One crore (b) Three crores (c) Five crores (d) Ten crore9
53. Which of the following is not true for SSI?
(a) SSI shows locational flexibility (b) SSI is labour intensive
(c) SSI promotes equity (d) SSI is capital intensive
54. Types of goods which are exported and imported by a nation is called:
(a) Balance of trade (b) Direction of trade
(c) Composition of trade (d) Trade surplus
55. Which of the following is an institutional reform (land reform) in the agricultural sector?
(a) Expansion of irrigation facilities (b) Use of HYV seeds
(c) Ceiling on land holdings (d) Provision of credit
56. Which of the following statements is true about disguised unemployment?56
(a) It is found on large scale in the agricultural sector in India,
(b) The number of people engaged on a piece of land is more than what is actually required.
(c) The total output does not fall even if some workers are withdrawn.
(d) All of the above
57. Public Sector had a major role to play in the initial phase of planning because:
(a) Private entrepreneurs lacked sufficient capital for investment.
(b) Government aimed at social welfare.
(c) The market was not big enough to encourage industrialists to undertake major projects.
(d) All of the above
58. A strategy to earn foreign exchange by making domestic industries competitive in the international market is called:
(a) Export promotion (b) Import substitution
(c) Inward looking trade strategy (d) Both (b) and (c)
59. Indian agriculture is characterised by which of the following features?
(a) Dependence on monsoon (b) Disguised unemployment
(c) Sub-division and fragmentation of land holdings (d) All the above
60. Inward looking trade strategy aims at:
(a) Economising the use of foreign exchange through the policy of import substitution.
(b) Exposing domestic industries to international competition.
(c) Generating foreign exchange through export promotion.
(d) All of the above
61. Schedule A of IPR 1956 includes industries which are:
(a) Reserved for public sector (b) Open for both public and private sector
(c) Reserved for private sector (d) Small scale industries
62. When was the New Economic Policy announced?
(A) 1981 (B) 1991 (c) 1993 (d) 1995
63. Which of the following was the reason for the introduction of economic reforms in India?
(a) Rising fiscal deficit (b) Inflationary pressures (c) Declining foreign exchange reserves (d) All of these
64. LPG stands for:
(a) License, Permit and Globalisation
(b) License, Privatisation and Globalisation
(c) Liberalisation, Privatisation and Globalisation
(d) Liberalisation, Privatisation and Global Cooperation

65. Which of the following economic reforms were initiated by the government under liberalisation policy?
(i) Industrial sector reforms (ii) Tax reforms
(iii) Financial sector reforms (iv) Foreign exchange reforms
(a) Only (i) above (b) Only (ii) above
(c) Both (i) and (ii) above (d) All of the above
66. Vv'hich of the following changes was not a part of industrial sector reforms under the liberalisation policy?
(a) De-reservation of various goods produced by small-scale industries.
(b) Government to determine the prices of all commodities for maximisation of social welfare.
(c) A significant reduction in the industries reserved for public sector.
(d) Abolition of licensing policy.
67. Under the New Economic Policy 1991, how many industries are reserved for public sector?
(a) 8 (b) 17 (c) 12 (d) 2
68. At present, which of the following industries are reserved for the public sector?
(a) Railways (b) Atomic energy generation (c) Cotton textiles (d) Both (a) and (b) above
69. Which of the following are included in the financial sector in India?
(a) Banking and non-banking financial institutions
(b) Stock exchange market (c) Foreign exchange market
(d) All of the above
70. Which of the following changes is not a consequence of the financial sector reforms introduced in India in the year
1991?
(a) Establishment of private sector banks, Indian as well as foreign.
(b) Foreign investment limit in banks was raised.
(c) RBI had no control over the commercial banks.
(d) Foreign Institutional Investors (FII) are now allowed to invest in Indian financial markets.
71. Mudra Bank was set up to cater to the credit needs of which of the following?
(a) Farmers (b) Micro, Small and Medium Enterprises (c) Large Enterprises (d) Exporters and Importers
72. Fiscal reforms are related to which of the following?
(a) Taxation (b) Public expenditure
(c) Interest rate determination (d) Both (a) and (b) above
73. Which of the following is not a component of fiscal reforms?
(a) Taxation reforms (b) Public expenditure reforms (c) Change in interest rate (d) Control on public debt
74. Which of the following is an example of indirect tax?
(a) Income tax (b) Wealth tax
(c) Goods and services tax (d) Corporate profit tax
75. All indirect taxes have been subsumed under in the year 2017.
(a) Sales Tax (b) Goods and services tax (c) Value added tax (d) Excise duty
76. The phrase 'One tax one market, one nation' was coined for:
(a) Income tax (b) Sales tax
(c) Goods and services tax (d) Corporation tax
77. Which of the following was not the aim of demonetisation of currency by the government in the year 2016?
(a) Reducing corruption
(b) Digitalisation
(c) Increasing tax base through formalisation of economy
(d) Increasing the volume of cash transactions
78. If due to market forces of demand and supply the value of $1 changes from C60 to e 70, it implies:
(a) Depreciation of Dollar (b) Depreciation of Rupee
(c) Devaluation of Rupee (d) Appreciation of Rupee
79. Which of the following statements is not true in respect of devaluation of currency?
(a) More rupees are required to buy a unit of foreign currency.
(b) Imports are likely to rise.
(c) Exports are likely to rise.
(d) It may result in an inflow of foreign exchange.
80. Lowering the value of domestic currency in relation to a foreign currency by the government is called
(a) Appreciation (b) Depreciation
(c) Devaluation (d) Revaluation
81. refers to contracting out some of the services which were earlier performed within the country to other countries.
(a) Outsourcing (b) Globalisation (c) Privatisation (d) Liberalisation
82. Which of the following is not referred to as privatisation?
(a) Strategic sale of public sector enterprise to the private investors.
(b) Expansion of public sector. (c) Disinvestment in public sector enterprises.
(d) Withdrawal of government from management and ownership of the public enterprise.
83. ...................................refers to transfer of ownership, management and control of public sector enterprises to the
entrepreneurs in the private sector.
(a) Liberalisation (b) Globalisation (c) Privatisation (d) Devaluation
84. ................................refers to sale of equity of public sector units in the market.
(a) Globalisation (b) Devaluation (c) Disinvestment (d) Liberalisation
85. Which of the following was not the reason for the government to allow privatisation in the year 1991?
(a) To reduce private monopoly.
(b) To improve financial discipline and facilitate modernisation.
(c) To boost foreign direct investment.
(d) To improve managerial efficiency of PSUs.
86. .........................................means integrating the domestic economy with the world economy.
(a) Globalisation (b) Privatisation (c) Liberalisation (d) Disinvestment
87. In the post reform period, India has become a destination for global outsourcing due to:
(a) Availability of skilled labour (b) Availability of labour at low wage rate
(c) Development of IT sector (d) All of the above
88. Which international organisation replaced General Agreement on Trade and Tariffs (GATT):
(a) International Monetary Fund (IMF) (b) World Trade Organisation (WTO)
(c) World Health Organisation (WHO) (d) United Nations (UN)
89. When was WTO established?
(a) 1991 (b) 1984 (c) 1995 (d) 2005
90. At present, how many countries are members of WTO?
(a) 190 (b) 156 (c) 153 (d) 164
91. Trade between two countries is known as:
(a) Unila teral transfers (b) Bilateral trade
(c) Multi-lateral trade (d) None of the above
92. Which of the following strategies were used to promote globalisation of the Indian economy?
(a) Increase in the equity limit of foreign investment.
(b) Partial convertibility of rupee was allowed.
(c) Reduction in tariff and non-tariff barriers.
(d) All of these
93. What items are not included in Ml measure of supply?
(a) Currency and coins with public (b) Inter-bank deposits
(c) Other deposits with RBI (d) Net demand deposits with banks
94. High powered money consists of:
(a) Currency and coins held by the public
(b) Currency, cash reserves with banks and demand deposits
(c) Currency held by public and cash reserves with banks
(d) Currency and demand deposits
95. Money supply refers to:
(a) Total volume of money held by public at a particular point of time
(b) Total volume of money held by public over a period of time
(c) Total volume of money held by the government
(d) Both (a) and (b)
96. Money supply is a concept.
(a) Stock (b) Flow
(c) Both (a) and (b) (d) Neither (a) nor (b)
97. Which one of these is a limitation of the barter exchange?
(a) Lack of double coincidence of wants (b) Lack of store of value
(c) Lack of common measure of value (d) All of these
98. Read the following dialogue between two people:
Sita : I want 1 kg of potatoes
Rani : What will you give in exchange?
Sita : I can give you 2 litres of milk in return for the potatoes.
Rani : I don't need milk. I want a pair of shoe
Which of the following problem is being faced by Sita and Rani in their exchange process?
(a) Lack of double coincidence of wants (b) Absence of common units of value
(c) Lack of store of value (d) Lack of standard of deferred payment
99. Who regulates money supply?
(a) Government of India (b) Reserve Bank of India
(c) Commercial Banks (d) Planning Commission
100. Which of the following is not a problem of barter system of exchange? {CBSE, Delhi Comptt. 2016)
(a) Store of Value (b) Only Demand Deposits in Banks
(c) Unit of Account (d) Double Coincidence of Wants
101. Name the institution which performs the functions of accepting deposits, granting loans and making mestments,
with the aim of earning profits.
(a) Commercial Bank (b) Central Bank
(c) Neither (a) nor (b) (d) Both (a) and (b)
102. This function of Central Bank involves buying and selling of government securities from or to the public
and commercial banks.
(a) Selective Credit Controls (b) Legal Reserve Requirements
(c) Open Market operations (d) None of these
103. Name the credit control method which refers to difference between the amount Of loan and market value of the
security offered by the borrower against the loan.
(a) Selective Credit Controls (b) Moral Suasion
(c) Margin Requirements (d) Legal Reserve Requirements
104. This bank operates in public interest without any profit motive.
(a) Reserve bank of India (b) State Bank of India
(c) Canara Bank (d) Allahabad Bank
105. Through the process Of, commercial banks are able to create credit, which is in far of the initial deposits.
(a) Advancing ot loans (b) Money Creation
(c) Accepting Deposits (d) None of these
106. What will be the effect of increase in the 'Repo Rate' on the money supply?
(a) Money supply will increase (b) Money supply will decrease
(c) Money supply will remain same
(d) Money supply will initially increase and then it will decrease
107. The ratio of total deposits that a commercial bank has to keep with Reserve Bank of India is called..
(a) Statutory liquidity ratio (b) Deposit ratio
(c) Cash reserve ratio (d) Legal reserve ratio
108. Banks create credit:
(a) Out of nothing (b) On the basis of their securities
(c) On the basis of their total assets (d) On the basis of deposits
109. If the total deposits created by commercial banks is 10,000 crores and legal reserve requirements is 40%, then
amount of initial deposits will be
(a) 2,000 crores (b) 3,000 crores
(c) 4,000 crores (d) 14,000 crores
110. Which of the following will increase the money supply?
(a) Fall in repo rate (b) Purchase of securities in open market
(c) Decrease in cash reserve ratio (d) All of these
111. What is the other name for 'Money Multiplier'?
(a) Credit Multiplier (b) Deposit Multiplier
(c) Cash Reserve Ratio (d) None of these
112. In order to reduce credit in the country, RBI may:
(a) Buy securities in the open market (b) Sell securities in the open market
(c) Reduce cash reserve ratio (d) Reduce Repo Rate
113. The one rupee note and coins are issued by:
(a) RBI (Central Bank) (b) Commercial Bank
(c) Ministry of Finance (d) Central Government
114. Which of these is not a function of central bank?
(a) Accepting deposits of general public (b) Custodian ot Foreign Exchange Reserves
(c) Banker's Bank (d) Currency Authority
115. Other name for legal reserve requirement is
(a) Cash reserve ratio (b) Bank rate
(c) Statutory liquidity ratio (d) Variables
116. Repo rate is the rate at which:
(a) Commercial Banks purchase government securities from the central bank
(b) Commercial Banks can take loans from the central bank
(c) Commercial Banks can keep their deposits with the central bank
(d) Short-term loans are given by commercial banks
117. Which of the following is not a Quantitative Method of Credit Control?
(a) Open Market Operation (b) Margin Requirements
(c) Variable Reserve Ratio (d) Bank Rate Policy

118. Credit creation by commercial banks is determined by: (Choose the correct alternative)
(a) Cash Reserve Ratio (CRR) (b) Statutory Liquidity Ratio (SLR)
(c) Initial Deposits (d) All of the above
119. The central bank can increase availability of credit by: (Choose the correct alternative)
(a) Raising repo rate (b) Raising reverse repo rate
(c) Buying government securities (d) Selling government securities