CBSE Economics Class 12 Sample Paper 5 Page 1

Sample Paper 5
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. If the value of export of merchandise is `1,500 crore and imports of goods are 20% more than exports, the value
of imports and trade deficit will be `______ crores and `_______crores respectively.
(a) 1,800, 3,300
(b) 1,800, 300
(c) 1,200, 300
(d) 1,200, 3,300

2. Choose the correct alternatives to be filled in given blanks A and B.

(a) Low level of income and low level of investment

(b) Low level of investment and low level of income
(c) Low mobilisation of savings and low level of investment
(d) Low level of investment and low savings

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3. Assertion (A): Fiscal deficit shows a better position of the government expenditure in comparison to budget
deficit.
Reason (R): Fiscal deficit reflects borrowings requirement of the government.
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

4. Which of the following is not a reason for excess demand?

(a) Deficit financing (b) Fall in the propensity to consume
(c) Rise in aggregate demand (d) Increase in investments

5. Suppose you are a member of the Advisory Committee to the Finance Minister of India’. The Finance Minister is
concerned about the rising revenue deficit in the budget.
Which of the following measures can be used to control the rising revenue deficit of the government?
(a) Increase taxation (b) Reduce the burden of subsidy
(c) Reduce government administrative expenses (d) Any of these

6. Which of the following is the implication of revenue deficit?

(i) A high revenue deficit shows fiscal indiscipline.
(ii) It shows wasteful expenditure of government on administration.
(iii) It implies that government is dissaving.
(a) (i), (ii) and (iii) (b) (i) and (ii)
(c) (ii) and (iii) (d) (i) and (iii)

7. Statement 1: Sector which transforms one physical good into another physical good is tertiary sector.
Statement 2: Consumption of fixed capital refers to fall in the value of fixed assets due to normal wear and tear
and foreseen obsolescence.
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

8. The following information is given for an imaginary country:

(all figures in `lakh)
(i) Durable use producer goods with a life span of 10 years 10
(ii) Single use producer goods 5
(iii) Sales 20
(iv) Unsold output produced during the year 2
(v) Taxes on production 1
Identify the correct value of NVAFC from the given options.
(a) `10 lakh
(b) `20 lakh
(c) `15 lakh
(d) `25 lakh

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9. Read the following figure carefully and choose the correct option from the alternatives given below:

Alternatives :
(a) Real
(b) Circular
(c) Nominal
(d) Either (a), (b) or (c)

10. Identify the correct pair from the following Column I and Column II.

Column I Column II
A. Excess demand (i) When AD is exceeds AS at the full employment level of income
B. Inflationary gap (ii) Ratio of change in consumption expenditure to change in income
C. Autonomous consumption (iii) When AD less than AS at the full employment level of income
D. Marginal Propensity to Save (iv) Consumption expenditure planned to be incurred during a given
period
Alternatives:
(a) C - (iii) (b) A - (i)
(c) D - (iv) (d) B - (ii)

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

11. Explain “Bankers” bank function of the Central Bank.

o
What do you know about the following?
(a) Legal tender
(b) Fiat money
(c) High powered money

12. Read the given text carefully and answer the questions that follow:
Money was historically an emergent market phenomenon that possess intrinsic value as a commodity; nearly
all contemporary money systems are based on unbacked fiat money without use value. Its value is consequently
derived by social convention, having been declared by a government or regulatory entity to be legal tender;
that is, it must be accepted as a form of payment within the boundaries of the country, for “all debts, public and
private”, in the case of the United States dollar. Contexts which erode public confidence, such as the circulation
of counterfeit money or domestic hyperinflation, can cause good money to lose its value.
(a) What is money?
(b) State the components of money supply.

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

13. Explain the ‘problem of double counting’ in the estimation of national income with the help of an example. How
can this problem be avoided?


o
What are ‘non-monetary exchanges’? Explain with suitable examples how they are a limitation of the GDP as an
‘indicator of welfare’.

14. Find Gross Value Added at Market Price from the given data:
(`Lakh)
(i) Depreciation 20
(iv) Domestic sales 200
(v) Net change in stocks (—)10
(vi) Exports 10
(vii) Single use producer goods 120

15. Read the given text carefully and explain the basis of classifying taxes into direct and indirect tax with examples.
To run a nation judiciously, the government needs to collect tax from the eligible citizens; paying taxes to the
local government is an integral part of everyone’s life, no matter where we live in the world. Now, taxes can be
collected in any form such as state taxes, central government taxes, direct taxes, indirect taxes, and much more.
For your ease, taxation is divided into two categories, viz. direct taxes and indirect taxes. This segregation is based
on how the tax is being paid to the government.

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

16. (a) On the basis of given figures interpret India’s performance in BoP and foreign exchange reserve.

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(b) Distinguish between depreciation of a currency and devaluation of a currency.

17. Draw a hypothetical propensity to consume curve and from it derive the propensity to save curve. Explain the
steps involved.


o
Explain the ‘Consumption Function’ with the help of a schedule and diagram.

Section B -Indian Economic Development

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

18. In which of the following areas, Pakistan has an edge over India?
(i) Export of software after economic reforms
(ii) Number of Phd’s produced in science and engineering every year
(iii) Percentage of undernourished children
(a) (i) and (iii) (b) (ii) and (iii)
(c) only (iii) (d) (i) and (ii)

19. Statement 1: In 1997, a UN conference on climate change was held in Japan.

Statement 2: Global warming refers to the destruction of ozone in the ozone layer, due to presence of chlorine
from man-made chlorofluorocarbons and other forces.
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

20. “The goal of equitable or rational distribution of land was not fully served by abolition of intermediaries”. Why?
(a) Owning to policy loopholes, former zamindars continued to owe large lands
(b) In some areas, zamindars claimed to be self-cultivators
(c) Lack of political will
(d) All of the above

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21. What is the full form of PPP in terms of Gross Domestic Product?
(a) Purchasing Power Price
(b) Purchasing Power Parity
(c) Public Private Partnership
(d) None of these

22. Which of the following are major fish producing states in India?
(i) Odisha
(ii) Gujarat
(iii) Maharashtra
(iv) Andhra Pradesh
(a) (i), (ii) and (iii) (b) (i), (ii) and (iv)
(c) (i), (iii) and (iv) (d) (ii), (iii) and (iv)

23. Assertion (A): Pakistan shifted its policy orientation in late 1970s and 1980s.
Reason (R): A variety of regulated policy framework after independence lead to slow growth of Pakistan.
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. A campaign in China in 1958 where people were encouraged to set up industries in their backyard was named as:
(a) Anti-rightist Movement
(b) Great Leap Forward
(c) Four Pests Campaign
(d) Great Proletarian Cultural Revolution

25. Match the situations given in Column I with their respective implications given in Column II and choose the
correct alternative:
Column I Column II

A. White revolution (i) It is also known as the Neel Kranti Mission

B. Blue revolution (ii) It was found by MS Swaminathan
C. Golden revolution (iii) It is also known as Operation Flood.
D. Green revolution (iv) It is related to increased production of honey and horticulture.
Alternatives:
(a) A - (iii), B - (iv), C - (ii), D - (i)
(b) A - (iii), B - (i), C - (ii), D - (iv)
(c) A - (iii), B - (ii), C - (i), D - (iv)
(d) A - (iii), B - (i), C - (iv), D - (ii)

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26. Observe the image given below and choose the most appropriate option.

(a) Higher population is a bane for the country

(b) Development is sustainable when there is inter-generational consideration
(c) Growth always stimulates personal development
(d) All of the above

27. Which duty has been removed to increase the competitive position of Indian goods in the international markets?
(a) Custom duty
(b) Import duty
(c) Export duty
(d) None of these

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

28. Give the steps taken towards ‘Privatisation’ in 1991.

o
State the fiscal reforms introduced under the New Economic Policy in 1991.

29. Interpret the given picture on account of economic reforms of 1991.

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

30. Answer the following questions on the basis of the following data:
Country Annual Growth of Population (%) Sex Ratio
India 1.2 929
Pakistan 2.1 947
(a) Comment upon the annual population growth rate in India and Pakistan.
(b) Comment upon the Sex Ratio in both the above countries.

31. What do you mean by globalisation? Give its main features.

o
Highlight the main features of Indian economy on the eve of independence.

32. What activities you would suggest to generate employment in rural areas?

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

33. Why is the world faced with an environmental crisis?

o
Provide any three suggestions to improve agricultural marketing.

34. Read the following text carefully and answer the given questions on the basis of the same and common
understanding: People, generally are emotionally attached to their place of birth. But millions of people leave
their places of birth and residence. There could be variety of reasons. These reasons can be put into two broad
categories, i.e., push factor, these cause people to leave their place of residence or origin; and pull factors, which
attract the people from different places.
In India, people migrate from rural to urban areas mainly due to poverty, high population pressure on the land, lack
of basic infrastructural facilities like healthcare, education, etc. Apart from these factors, natural disasters such
as flood, drought, cyclonic storms, earthquake, tsunami, wars and local conflicts also give extra push to migrate.
On the other hand, there are pull factors which attract people from rural areas to cities. The most important pull
factor for majority of the rural migrants to urban areas is the better opportunities, availability of regular work and
relatively higher wages. Better opportunities for education, better health facilities and sources of entertainment,
etc., are also quite important pull factors.
Hence, migration is a response to the uneven distribution of opportunities over space. People tend to move from
place of low opportunity and low safety to the place of higher opportunity and better safety. This, in turn, creates
both benefits and problems for the areas, people migrate from and migrate to. Consequences can be observed in
economic, social, cultural, political and demographic terms.
(a) Explain, why in India people mainly migrate from rural to urban areas?
(b) Explain, how expenditure on migration is a source of human capital formation?

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