DPS-MODERN INDIAN SCHOOL, DOHA- QATAR

FIRST PRE-BOARD EXAMINATION (2023-2024)

CLASS: XII

SUBJECT: ECONOMICS (030) DATE: 09-

12-2023
Time: 3 Hours
Maximum 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 of 1 mark each.
3. This paper contains 4 Short Answer Questions of 3 marks each to be
answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions of 4 marks each to be
answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions of 6 marks each to be
answered in 100 to 150 words.
6. Please check that this question paper contains 17 printed pages only.
7. Please check that this question paper contains 34 questions.

Part A Introductory Macroeconomics

1. Read the following statements carefully: 1

Statement 1: Saving curve makes a negative intercept on the
vertical axis at zero level of income.
Statement 2: There is an inverse relationship between
Investment multiplier and Marginal Propensity to Save.
In light of the given statements, choose the correct alternative
from the following:

Page 1 of 18
 (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.
2. At the end of the production process, how much value is added 1
in the output?
Producer Value of output Intermediate Value added
Consumption
Farmer 2000 …… 2000
Baker 4000 …… …….
Grocer -------- …… 400

(a) 4000
(b) 4400
(c) 3600
(d) 4200
3. The following information is given for an imaginary country: 1
S.no Items Amount
(₹ in
crores)
1. Autonomous Consumption 100
2. expenditure 2,000
3. National Income 100
Autonomous Investment

The value of Marginal Propensity to consume (MPC) will

be_______
(a) 0.5

Page 2 of 18
 (b) 0.9
(c) 0.7
(d) 1.0
4. Which of the following will be debited in Capital Account of 1
India’s Balance of Payment Account?
(a) An Indian woman buying a Chinese company.
(b) An Indian woman sending remittances home for the UK.
(c) An American company buying shares of an Indian company.
(d) An American company selling mobile phones to Indian
customers.
5. ‘Reserve Bank of India (RBI) imposes ₹ 25 Lakh penalty on Axis 1
Bank for violating KYC rules.’
September 1, 2020 A person read this headline and wondered
which of the following functions; RBI has performed while doing
this?
(a) Banker to the government
(b) Banker’s bank and supervision
(c) Custodian of FOREX
(d) Controller of money supply
6. In the context of the commercial bank, which of the following 1
alternative is INCORRECT.

Page 3 of 18
 (i) The value of money multiplier is 20%.
(ii) The total M1 is ₹ 500.
(iii) The total assets of the bank is Reserves plus Loan.
(iv) Liability of the bank is equal to Loan.
Alternatives:
(a) i and ii
(b) Only iv
(c) iii and iv
(d) Only iii
7. Find the missing figures and choose the correct alternative: 1
Incom Marginal Propensity to Savings Average
e consume Propensity to
consume
100 40 0.60
200 ……..ii 90 …..iv
……i …….iii 125 0.50

(a) i.- 250, ii – 0.3, iii – 0.5, iv – 0.55

(b) i.- 250, ii – 0.5, iii – 0.3, iv – 0.55
(c) i.- 250, ii – 0.55, iii – 0.5, iv – 0.3
(d) i.- 300, ii – 0.3, iii – 0.5, iv – 0.55
8. Out of the following, which value can be greater than one? 1
(a) APC
(b) MPC
(c) APS
(d) MPS
9. Identify the correct reason(s) that may affect the demand for 1

Page 4 of 18
 foreign exchange in an economy.
I. Imports of visible
II. Exports of invisibles
III. Remittances by residents working abroad
IV. Purchase of assets abroad
Alternatives:
(a) I and II
(b) II and III
(c) III and IV
(d) I and IV
1 Read the following chart carefully and choose the correct pair 1
0. from the alternatives given below

Balance of
Payments

Current Capital
Account Account
Balance Balance

Portfolio &
Balance of Reserve
A B other
Trade Account
Investments

(a) A: Invisible Balance ; B: Foreign Direct Investment

(b) A : Non-factor Income Balance ; B : Net Income from Abroad

(c) A : Factor Income Balance ; B : Net Factor Income to Abroad

Page 5 of 18
 (d) A : Factor Services ; B : Foreign Direct Investment

1 Calculate Gross Fixed Capital Formation from the following 3

1. data:

Particulars ₹. in
Crores
(i) Private final consumption expenditure 1,000
(ii) Government final consumption expenditure 500
(iii) Net exports (-)50
(iv) Net factor income from abroad 20
(v) Gross domestic product at market price 2,500
(vi) Opening stock 300
(vii Closing stock 200
) 3
Or
Elaborate on the concepts of Nominal Gross National Product
and
Real Gross National Product with examples to illustrate the
significance of these measures in economic decision-making.
1 ‘Current account deficit in an economy must be financed by a 3
2. corresponding capital account surplus.’
Do you agree with the given statement? Give valid reason in
support of your answer.
1 Draw a hypothetical propensity to consume curve and from it 4
3. draw the propensity to Save curve.

Or

Explain the concept of Full employment, Under employment,

4
Full employment equilibrium. Also explain situation of Full
Employment does not mean a Situation of Zero Unemployment

1 In the given figure, what does the gap ‘KT’ represent? State its 4
4. impact on Income, Employment and Output. Explain any two

Page 6 of 18
 fiscal measures to correct the situation.

1 (a) How can 'Jan-Dhan Yojana' be used as an instrument to 4

5 increase supply of money by the commercial banks?

(b) Explain how 'margin requirements' are helpful in controlling

credit creation.

1 (a) Revenue deficit is estimated to be ₹ 20,000 crore, and 4

6. borrowing is estimated to be ₹ 15,000 crore. If expenditure on
interest payment is estimated to be 50% of the revenue deficit, 2
find fiscal deficit and primary deficit.
(b) ‘Under the Ayushmaan Bharat Scheme, the Government
provides free medicines to the economically backward section
of the society’.
Identify and discuss the nature of the government expenditure
indicated in the given statement.
4
Or
(a) Calculate Revenue deficit, Fiscal Deficit and Primary Deficit.

Particulars (₹ in Arab)

(i) Tax revenue 47

(ii) Capital receipts 34

Page 7 of 18
 (iii) Non-tax revenue 10

(iv) Borrowings 32

(v) Revenue expenditure 80

(vi) Interest payments 20

2
(b) “National highway is a private good because it is funded by
taxes.” Defend or refute the given statement with valid
arguments.
1 (a) Sale of petrol and diesel cars is rising particularly in big 6
7. cities. Analyse
its impact on gross domestic product and welfare.
(b) What precautions must be taken while estimating national
income by
income method?
PART B INDIAN ECONOMIC DEVELOPMENT

1 From the following statements, choose the INCORRECT 1

8. statement:

(a) Increase in the foreign exchange reserves from about US $

6 billion in 1990-91 to about US $ 413 billion in 2018-19.

(b) Industries reserved for the public sector are a part of atomic
energy generation and some core activities in railway transport.

(c) In 2016, the Indian Parliament passed a law, Goods and

Services Tax Act 2015, to simplify and introduce a unified
indirect tax system in India.

(d) Structural reform policies are long-term measures, aimed at

improving the efficiency of the economy and increasing its

Page 8 of 18
 international competitiveness.

1 ‘China has performed exceedingly well in various health and 1

9. economic indicators. Identify which of the following is not a

health indicator?

(a) Infant Mortality Rate (per 1000 live births)

(b) Life Expectancy at Birth (years)

(c) Percentage of people below poverty line (National)

d) Maternal Mortality Rate (per 1 lakh births)

2 In India, _____education takes a major share of total education 1

0. expenditure.

(a) Elementary (b)

Secondary

(c) Higher (d) All

of the above

2 Study the following data and answer the given question: 1

1.

Which of the following countries showa brighter side of gender

equality?

Page 9 of 18
 (a) India (b)
China

(c) Pakistan (d)

Both (b) and (c)

2 Read the following statements: Assertion (A) and Reason (R). 1

2. Choose the correct alternative from those given below.

Assertion (A): The industrial sector reforms implemented

under 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 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 Assertion (A).

(b) Both Assertion (A) and Reason (R) are true, but Reason (R)
is explanation of Assertion (A).

(c) Assertion (A) is true, but Reason (R) is false.

(d) Assertion (A) is false, but Reason (R) is true

2 Study the following picture and answer the given question: 1

3.
The opportunity cost of industrialisation is very high, not only
affecting the human life but also disturbed the ecosystem

Page 10 of 18
 adversely. In the given picture, which industrial sector is
highlighted?

(a) Hirakund Valley Project (b) Yamuna

River Project

(c) Sabarmati River Project (d) Damodar

Valley Project

2 Industrial Policy Resolution (IPR) 1956 formed the basis of the 1

4. ____Five Year Plan.

(a) First
(b) Fourth

(c) Second
(d) Third

2 Regular salaried employees are more in urban areas than rural 1

5. areas because____

(i) more industries in urban areas

Page 11 of 18
 (ii) educational attainments and skills

(iii) illiteracy and lack of skills

(a) i , ii , and iii are correct (b) ii and

iii are correct

(c) i and iii are correct (d) i and ii

are correct

2 Read the following statements carefully: 1

6.
Statement 1: Livestock sector alone provides alternate
livelihood options to over 65 million small and marginal farmers
including landless labourers.

Statement 2: Under Jan Dhan Yojana, bank account holders

can get ₹. 1-2 lakh accidental insurance coverage and overdraft
facilities for ₹. 10,000.

In 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

2 From the set of statements given in Column I and Column II, 1

7. choose the correct pair of statements:

Column I Column II

Page 12 of 18
 A. Great India Divide i. 2014
B. Economic Reforms in Pakistan ii. 1997
C. Saansad Adarsh Gram Yojana iii. 1921
D. Kyoto Protocol iv. 1988

(a) A- iii ; B – ii ; C – i ; D – iv (b) A- iii ; B – iv ; C

– i ; D – ii

(c) A- iv ; B – i ; C – ii ; D – iii (d) A- i ; B – ii ; C –

iii ; D – iv

2 ‘ Simran and her family going for regular medical check-up . 3

8. She has also increased her family medical insurance after

having a review of several insurance company on internet.

In the light of above, information explain why investment in

healthcare and access to information crucial for the formation
of human capital which contribute positively to a nation's
economic expansion and overall well-being.

2 (A) Identify and briefly explain three key features of the Indian 3
9. economy on the eve of independence that contributed to its

predominantly stagnant structure.

Or
3
(B) Describe three key features of India's foreign trade on the
eve of independence. Illustrate with examples the country's
trading patterns with other nations.

3 ‘The figure given below highlights the ‘Human population and 4

Page 13 of 18
0. carrying capacity of the environment.’

In the light of the given image, give the meaning of carrying

capacity with the help of current examples and explain how
population explosion has resulted in depletion of natural
resources.

Source: https://www.mrgscience.com/ess-topic-84-human-
population-carrying capacity.html

3 Give a thorough analysis of four primary obstacles 4

1. encountered by rural banking establishments when fostering

financial inclusion and driving economic growth within a

developing nation.

3 In recent times, the Indian Economy has experienced the 4

2. problem of casualization of the workforce. This problem has

only been aggravated by the outbreak of COVID-19.’

Do you agree with the given statement? Discuss any two

disadvantages of casualization of the workforce in the light of
the above statement.

Page 14 of 18
 Or
4

Study the following chart showing the Growth of Employment

and Gross Domestic Product. Analyse the trend of the two
variables from 1990-2012.

3 (a) "Considering 'Agricultural Subsidy as a Vice,' analyse three 6

3. prominent negative implications stemming from agricultural

subsidies associated with providing subsidies to farmers.

(b) Do you think the navaratna policy of the government helps

in improving the performance of public sector undertakings in
India? How?

Or
6
(a) Agriculture sector appears to be adversely affected by the

Page 15 of 18
 reform process. Why?

(b) Highlighting three significant adverse impacts, conduct a

comprehensive analysis to evaluate the potential negative
repercussions of implementing the economic strategy of Import
Substitution in developing nations.

3 Read the following text carefully: 6

4.
SINO-PAK FRIENDSHIP CORRIDOR

The China-Pakistan Economic Corridor (CPEC) relationship between the

two nations. But it has also sparked criticism for burdening Pakistan with
mountains of debt and allowing China to use its debt strategic assets of
Pakistan.

The foundations of CPEC, part of China’s Belt and Road Initiative, were laid
in May 2013. At the time, Pakistan was reeling under weak economic
growth. China committed to play an integral role in supporting Pakistan’s
economy.

Pakistan and China have a strategic relationship that goes back decades.
Pakistan turned to China at a time when it needed a rapid increase in
external financing to meet critical investments in hard infrastructure,
particularly power plants and highways. CPEC’s early harvest projects met
this need, leading to a dramatic increase in Pakistan’s power generation
capacity, bringing an end to supply-side constraints that had made rolling
blackouts a regular occurrence across the country.

Pakistan leaned into CPEC, leveraging Chinese financing and technical

assistance in an attempt to end power shortages that had paralyzed its
country’s economy. Years later, China’s influence in Pakistan has
increased at an unimaginable pace.

China As Pakistan’s Largest Bilateral Creditor: China’s ability to exert

Page 16 of 18
influence on Pakistan’s economy has grown substantially in recent years,
mainly due to the fact that Beijing is now Islamabad’s largest creditor.
According to documents released by Pakistan’s finance ministry,
Pakistan’s total public and publicly guaranteed external debt stood at
$44.35 billion in June 2013, just 9.3 percent of which was owed to China.
By April 2021, this external debt had ballooned to $90.12 billion, with
Pakistan owing 27.4 percent —$24.7 billion — of its total external debt to
China, according to the International Monetary Fund (IMF)

Additionally, China provided financial and technical expertise to help

Pakistan build its road infrastructure, expanding north-south connectivity
to improve the efficiency of moving goods from Karachi all the way to
Gilgit-Baltistan (POK). These investments were critical in better integrating
the country’s ports, especially Karachi, with urban centers in Punjab and
Khyber Pakhtunkhwa provinces.

Despite power asymmetries between China and Pakistan, the latter still
has tremendous agency in determining its own policies, even if such
policies come at the expense of the long term socioeconomic welfare of
Pakistani citizens. https://www.usip.org/publications/2021/05/pakistans-
growing-problem-its-china-economic-corridor .

(a) Outline and discuss any two economic advantages of China

Pakistan Economic Corridor (CPEC) accruing to the economy of
Pakistan.

(b) Analyse the implication of bilateral ‘debt-trap’ situation of

Pakistan vis-à-vis the Chinese Economy.

Page 17 of 18
Page 18 of 18