केंद्रीय विद्यालय संगठन, अहमदाबाद संभाग

KENDRIYA VIDYALAYA SANGATHAN, AHMEDABAD REGION

प्री-बोर्ड परीक्षा 2023-24
PRE-BOARD EXAMINATION 2023-24
SUBJECT: ECONOMICS SET II-A M.M.:80
CLASS: XII TIME: 3 Hrs.
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.
Q. no Section A: Macro Economics Marks
1 Read the following statements carefully: 1
Statement 1: Increase in margin requirements can control deflationary
trends in the economy.
Statement 2: REPO rate should be increased and reverse REPO rate
should be decreased to control inflationary trends.
Considering 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.
OR
Read the following statements carefully:
Statement 1: If consumption function is shown as C = 100 + 0.1 Y the
saving function should be S = 100 + 0.9 Y
Statement 2: More the value of marginal propensity to save more will be
the value of investment multiplier.
Considering 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 Which among the following statement is true regarding the balance of 1
payment account:
A. A surplus in the current account of Balance of payment may results
in deficit in capital account of BOP.
B. Transactions in the current account affect the assets and liability
status of the country.
C. The current account of balance of payment account includes
transactions in goods, services and portfolio investments.
D. Imports of machinery by the country are recorded on the credit side
of the current account as it results in an inflow of foreign exchange.

Page 1 of 7
3 If the value of marginal propensity to consume is 0.8 and marginal 1
propensity to save is 0.1 then the value of investment multiplier will be
…… and ….. respectively.
A. 5, 1 B. 5, 10 C. 2.5, 10 D. 8, 10
4 ‘A barter system has other deficiencies. It is difficult to carry forward 1
one’s wealth under the barter system. Suppose you have an endowment
of rice which you do not wish to consume today entirely. You may regard
this stock of surplus rice as an asset which you may wish to consume, or
even sell off, for acquiring other commodities at some future date’.
Which function of money can remove this deficiency of barter?
A. Medium of exchange C. Standard of deferred payments
B. Unit of account D. Store of value.
5 Read the following statements and choose the correct alternatives: 1
I. Domestic income and national income is the difference of net factor
income from abroad.
II. Domestic income can be greater than national income if the factor
income from abroad is more than factor income to abroad.
III. If subsidies are greater than indirect taxes, the value of GDPMP will
be less than GDPFC
IV. GDP at market price is not a good measure of welfare.
Alternatives:
A. I, II, III, IV C. II, III, IV
B. I, III, IV D. I, II, III
6 1
Read the following chart about the transactions of BOP carefully and
choose the correct alternative for boxes I and II.

Capital Account Current Account

...I... ...II...

Portfolio investment Unilateral transfers

A. Export of goods, Lending C. Borrowings, lending
B. Import of goods, Borrowing D. Borrowings, export of goods
7 1
If the legal reserve ratio is 25% and the initial deposits are of Rs 2000
crore what will be the correct alternative regarding total credit creation?
A. 8000 B. 6000 C. 10000 D. 800
8 Which among the following can be defined as ‘Investment’? 1
I. It is gross domestic capital formation.
II. It is the sum of gross domestic fixed capital formation and change in
stocks.
III. It is the sum of net domestic fixed capital formation, depreciation
and change in stocks.
IV. It is the sum of net domestic capital formation and depreciation.
Alternatives:
A. I, II, III, IV C. I, III, IV
B. II, III, IV D. I, II, III

Page 2 of 7
9 Which among the following is included while computing the domestic 1
income of India?
A. Free food provided by the government to flood victims.
B. Profits earned by branch of foreign bank in India.
C. Old age pension
D. Salary of Indian citizen working in US embassy in New Delhi.
10 Which among the following will be the impact of increase in foreign 1
investment in India?
A. The foreign exchange rate is likely to rise in the country.
B. Domestic goods become comparatively cheaper for foreigners.
C. Exports are likely to rise from the country.
D. None of the above.
11 ‘Current account surplus means exports of goods are greater than imports 3
of goods’.
Do you agree with the statement? Give valid reasons in support of your
answer.
Or
‘‘Current account surplus of BOP may result in capital outflows ’. Do you
agree with the statement? Give valid reasons in support of your answer.
12 Based on the given data find operating surplus. 3
Sl. no Particulars Rs. (cr)
1 Gross national product at market price 10000
2 Wages and salaries 5000
3 Contribution to social security scheme by employer 250
4 Net imports -500
5 Mixed income of self-employed persons 2000
6 Net indirect tax 100
7 Consumption of fixed capital 50
8 Net factor income from abroad 20
13 How central bank can increase the money supply by using: 4
A. Cash reserve ratio B. Statutory liquidity ratio
Or
Explain how the central bank control money supply in the economy by
using: A. REPO rate and B. Reverse REPO rate
14 A. Differentiate between stock and flow variables. ‘Investment is a flow 4
concept while capital is a stock concept’. Explain how?
B. Nominal GDP is Rs 5000 crore, and the price index is 150. Find the
real DGP. How real GDP is a good measure of welfare.
15 An economy spends 90% of its income on consumption. How much 4
investment is required to raise the income by Rs 4000 crore? Compute the
change in consumption due this increase in income.
16 Describe the economic scenario when ex-post Aggregate Demand 6
surpasses ex-post Aggregate Supply and its potential consequences on
price levels, production and employment.
OR
Explain the situation of excess aggregate demand at full employment
level. Explain how Fiscal policy measures can control this situation.
17 Classify the following as revenue receipt, capital receipt, revenue 6
expenditure and capital expenditure with valid reason.
A. Dividends D. Recoveries of loans
B. Grant in aid to state government E. Construction of roads
C. Goods and service tax F. Repayment of loans

Page 3 of 7
 OR
A. Explain the objective of Government Budget as reallocation of
income and wealth.
B. Differentiate between revenue receipt and capital receipt of the
government.
Section B: Indian Economic Development
18 Read the following statements: Assertion (A) and Reason (R). Choose the 1
correct alternative.
from those given below.
Assertion (A): One child norm introduced in China in the late 1970s as the
major reason for low population growth.
Reason (R): This measure led to a decline in the sex ratio, the proportion
of females per 1000 males.
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 not
the correct explanation of Assertion (A).
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true.
19 From the set of the events given in column I and corresponding facts 1
given in Column II, choose the correct pair of statements:
Column I Column II
1 Economic reforms in China a 1991
2 Economic reforms in Pakistan b 1988
3 Economic reforms in India c 1978
4 Medium term development plan d 1953
Choose the correct pair:
A. 1 – a B. 2 – b C. 3 – c D. 4 - d
20 Arrange the following events in chronological order: 1
I. Nationalization of capital goods industry in Pakistan
II. Medium term development plan
III. Great leap forward
IV. First five-year plan of India
Alternatives:
A. II, III, IV, I B. IV II, I, III C. II, I, IV, III D. IV, II, III, I
21 Read the following statements and choose the correct alternative: 1
Statement 1: Human capital formation is possible by spending on
information.
Statement 2: Human Capital formation has the ultimate goal of increasing
productivity of human being.
Alternatives:
A. Both the statements are true
B. Both the statements are false
C. Statement 1 is true and statement 2 is false
D. Statement 2 is true and Statement 1 is false
22 Which among the following is not the fiscal reform adopted by the 1
government of India in year 1991?
A. Devaluation of Indian Rupee
B. Deregulation of industrial sector
C. Role of RBI from regulator to facilitator
D. None of the above

Page 4 of 7
23 Choose the correct alternative regarding the infrastructural development 1
During the colonial period.
I. The British introduced the railways in India in 1853
II. It fostered commercialization of Indian agriculture which adversely
affected the self-sufficiency of the village economies in India.
III. The real motive behind this development was not to provide basic
amenities to the people but to sub serve various colonial interests.
IV. The roads that were built primarily served the purposes of
mobilizing the army within India.
Alternatives:
A. I, II, III, IV C. I, III, IV
B. II, III, IV D. I, II, III
24 A farmer practices organic farming and uses crop rotation and natural 1
predators to control pests. Is there an advantage of this approach
provided as compared to conventional pesticides use?
A. Faster and predictable pest eradication
B. Lower labor costs for pest management
C. Increased risk of crop failure and reduced yields
D. Reduced harm to beneficial insects and pollinators
25 Read the following statements: Assertion (A) and Reason (R). Choose the 1
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 not
the correct explanation of Assertion (A).
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true.
26 Read the following statements carefully: 1
Statement 1: Jobless growth has been a significant challenge in the Indian
economy in recent years.
Statement 2: Despite witnessing economic growth, the Indian economy
has been struggling to create sufficient employment opportunities to
absorb the growing workforce.
Considering 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
Or
Which among the following is true statement regarding migration as a
source of human capital formation?
A. People migrate in search of jobs that fetch them higher salaries
B. Unemployment is the reason for the rural-urban migration in India
C. Migration in both these cases involves cost
D. All of the above

Page 5 of 7
27 Which among the following statement is not true about the development 1
path of China?
A. China follows the mixed economy model with co-existence of public
and private sectors.
B. In the 1978, China adopted economic reforms.
C. Great leap forward was meant for mass industrialisation.
D. In 1958, Great leap forward initiated in the country.
28 Highlight the salient features of India’s pre-independence occupational 3
structure.
OR
Give a quantitative appraisal of India’s demographic profile during the
colonial period.
29 Agricultural diversification can change the scenario of rural economy. 3
Explain.
30 Compare and contrast the development of India, China and Pakistan with 4
respect to some salient human development indicators.
Or
A. Define the liberty indicator. Give two examples of liberty indicators.
B. What is the important implication of the ‘one child norm’ in China?
31 Rural development is a comprehensive term. Explain the key issues of 4
rural development.
32 A. Is it necessary to generate employment in the formal sector rather 4
than in the informal sector? Why?
B. Why are less women found in regular salaried employment?
33
6
Distinguish between the following.
A. Strategic and Minority sale of PSU
B. Bilateral and Multi-lateral trade
C. Tariff and Non-tariff barriers.
OR
A. What is marketable surplus? What is the use of marketable surplus?
B. What is sectoral composition of an economy? Is it necessary that
the service sector should contribute maximum to GDP of an
economy? Comment.

Page 6 of 7
34 Read the following text carefully:
The world is facing an unprecedented environmental crisis characterized by
various interconnected challenges. Several factors have contributed to this
alarming situation, threatening the delicate balance of ecosystems and the
well-being of both humans and wildlife. One of the primary causes of the
environmental crisis is the rapid growth of human population. The
increasing demand for resources, food and energy has led to extensive
deforestation, habitat destruction and overconsumption of natural
resources. Industrialization and modernization have played a significant
role in exacerbating the environmental crisis. The reliance on fossil fuels
and the emission of greenhouse gases have resulted in global warming and
climate change, leading to extreme weather events, rising sea levels and
disruptions in natural cycles. The unchecked discharge of pollutants and
waste from industries has further contaminated air, water and soil,
endangering human health and biodiversity. Another critical factor
contributing to the environmental crisis is the expansion of agriculture and
urbanization. The conversion of forests and natural habitats into agricultural
lands and urban areas has led to the loss of biodiversity and fragmentation
of ecosystems. This has disrupted the natural habitats of numerous species,
leading to the extinction of many plants and animal species. Moreover,
human activities such as irresponsible waste management and improper
disposal of plastics have resulted in the accumulation of plastic waste in
oceans and landfills, causing harm to marine life and contaminating the
environment. The excessive use of chemical fertilizers and pesticides in
agriculture has also led to soil degradation, water pollution and loss of
biodiversity. The environmental crisis is a complex issue with various
interconnected causes. The rapid growth of human population,
industrialization, urbanization, and irresponsible waste management
practices are some of the major contributors to this crisis. Addressing these
causes requires a collective effort from governments, industries and
individuals to adopt sustainable practices and promote environmental
conservation.
On the basis of the given text and common understanding, answer the
following question:
A. Elucidate the primary causes of the environmental crisis described in 2
the passage.
B. Discuss the connection between industrialization and the ongoing
2
environmental crisis.
C. Explain the impact of agriculture and urbanization on the 2
environment.

Page 7 of 7