PRE-BOARD EXAMINATION 2020-21

CLASS XII
Economics
General Instructions:

1. (This question paper contains two parts:

Part A: Macroeconomics (40 marks)
Part B: Indian Economic Development (40 marks)
2. Marks for questions are indicated against each question.
3. Question No. 1-10 and Question No. 18-27 (including two Case Based Questions) are 1
mark questions and are to be answered in one word/sentence.
4. Case Based Questions (CBO's) are Question No. 7-10 and Question No. 25-27.
5. Question No. 11-12 and Question No. 28-29 are 3 marks questions and are to be
answered in 60-80 words each.
6. Question No. 13-15 and Question No. 30-32 are 4 marks questions and are to be
answered in
7. 80-100 words cach.
8. Question No. 16-17 and Question No. 33-34 are 6 marks questions and are to be
answered is
9. 100-150 words each.
10. Answers should be brief and to the point and the above word limit be adhered to as far
as possible.

Part-1
(Macroeconomics)

1. The components of money supply are: (Choose the correct alternative)

(a) Paper currency (b) Coins
(c) Demand deposits (d) All of these

2. If planned savings are greater than planned investment, inventories will decrease). (Choose
the correct alternative)

3. Fiscal deficit equals: (Choose the correct alternative)

(a) Primary deficit minus interest payments
(b) Primary deficit plus interest payments
(c) Total budget expenditure minus total budget receipts
(d) None of the above

4._____________bank nurtures the market for government securities in India. (Choose the
correct alternative)
(a) Commercial banks (b) Central bank alternative)
(c) World bank (d) All of these
5. ____________(zero/one) is the value of MPC, when the investment multiplier is 1. (Choose
the correct alternative)
Or

When consumption expenditure is more than income, the value of APS will be ___________
(positive/negative). (Choose the correct answer)

6. In the budget, expenditure on land is (capital/revenue) expenditure. (Choose the correct

alternative)

Read the following news report and answer questions 7-10 on the basis of the same:
The Indian economy saw its worst contraction in decades, with Gross Domestic Product (GDP)
shrinking by a record 23.9% in the April to June quarter in comparison to the same period last
year. The contraction reflects the severe impact of the COVID-19 lockdown, which halted most
economic activities, as well as the slowdown trend of the economy even pre-COVID-19.

The Indian economy is in a deeply vicious cycle, where demand is contracting so heavily, while
the capacity to neutralise this contraction has also contracted equally because of the tax
revenue contraction. Agriculture was the only sector which recorded modest growth of 3.4% in
year-on-year terms. All other sectors saw contraction, with the steepest fall coming from the
50% in construction, and 47% fall in trade, hotels, transport and communication. Manufacturing
shrank more than 39%, while mining and quarrying dropped 23%.

On the expenditure side, private consumption fell 26.7%, while investments, as reflected by
gross fixed capital formation plunged 47%, and exports contracted almost 20%. Government
final consumption expenditure grew 16.4%. The Hindu; August 31st, 2020

7. Gross investment is also known as _____________ (gross capital formation/gross domestic

capital formation). (Choose the correct alternative)

8. The biggest driver of economic growth is: (Choose the correct alternative)

(a) Consumption demand (b) Inventory investment

(c) Gross fixed capital formation (d) None of these

9. Net exports is calculated as (Exports - Imports/Imports - Exports). (Choose the correct

alternative)

10. _____________ is crucial for revenue collection. (Choose the correct alternative)
(a) National Income (b) Gross value added
(c) Net value added (d) Nominal GDP

11. Why does the demand for foreign currency fall and supply rises when its price rises?
Explain.
12. 'Exchange rate of US$ rose considerably in India.' Explain the impact of this statement on
Indian exports and analyse its repercussion on the general masses.
Or
State the components of the current account of Balance of Payments.

13. What has been the aim of demonetisation?

14. (a) Given the consumption function C = 250 + 0.75Y, what will be the value of the multiplier?
(b) Draw a savings function curve and locate the break-even point on this curve.

15. How is GST administered in India?

Or
Explain the role of government budget in fighting inflationary and deflationary tendencies.

16. (a) Calculate GDP at market price by Income Method:

(Rs. in crores)
(i) Compensation of employees 120
(ii) Exports 25
(iii) Mixed Income of the self-employed 140
(iv) Imports 30
(v) Interest on national debt 5
(vi) Private final consumption expenditure 255
(vii) Gross fixed capital formation 65
(vii) Consumption of fixed capital 40
(ix) Subsidies 10
(x) Government's final consumption expenditure 35
(xi) Change in stocks 20
(xii) Indirect tax 45
(xiii) Net factor income from rest of the world (-) 10
(xiv) Rent, interest and profit 50

(b) Explain the basis of classifying goods into final goods and intermediate goods, with the help
of suitable examples.
Or
(a) Calculate Net National Product at Market Price from the following data:
(Rs. in crores)
(i) Compensation of employees 250
(ii) Mixed income of self-employeds 600
(iii) Profit 80
(iv) Interest 40
(v) Rent 30
(vi) Net factor income to abroad (-)10
(vii) Net exports 15
(viii) Consumption of fixed capital 20
 (ix) Net indirect taxes 10
(x) Net current transfers to abroad 8
(b) Explain how the following should be treated while estimating national income:
(i) Free medical facilities by the employer
(ii) Income arising out of the sale of shares

17. Explain the role of Bank Rate policy and changes in the government expenditure in
correcting checking deficient demand in an economy.

Part-B
(Indian Economic Development)

18. In Pakistan, about _____________ per cent of people work in agriculture. (Choose the
correct alternative)
(a) 43 (b) 47
(c) 41 (d) 39

19. Read the following statements-Assertion (A) and Reason (R). Choose one of the
correct alternatives given below:
Assertion (A): Privatisation process leads to a change in management with a change in
ownership.
Reason (R): Change in management is not a necessary condition for the process of
privatization.
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 and 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.

20. From the set of events/systems given in column and corresponding relevant fact given in
Column II, choose the correct pair of statement:

Column I Column II

A) Food for Work i) Noted Programme initiated in the 1975

B) Rural Employment Generation ii) Self-employment Programme
Programme (REGP) iii) For the rural poor
C) National Urban Livelihoods Mission iv) Launched in 2009
D) Pradhan Mantri Jhan Dhan Yojna

Alternatives:
(a) (A) - (i) (b) (B) - (ii)
(c) (C) - (ii) (d) (D) - (iv)

21. About ______________ per cent of female workforce is employed in the primary sector in
India. (Choose the correct alternative)
(a) 53 (b) 63
(c) 73 (d) 83
22. The Operation Flood programme was successfully implemented from the year ________.
(Choose the correct alternative)
(a) 1892 (b) 1982
(c) 1966 (d) 1995
Or
Data on unemployment in India can be obtained from __________________.(Choose the
correct alternative)
(a) Reports of Census of India (b) National Sample Survey Organisation
(c) Directorate General Employment of India (d) All of these

23. In ___________, economic reforms were initiated in Pakistan. (Choose the correct
alternative)
(a) 1978 (b) 1988
(c) 1952 (d) 1965

Read the following case study carefully and answer the questions 24-27 on the basis of
the same:
Agriculture is the backbone of Indian economy because of its high share in employment and
livelihood creation. The share of Agriculture in the GDP has registered steady decline yet this
sector provides direct employment to more than 50% of total workforce in the country and large
proportion of the population depends upon agro-based industries and trade of agriculture
products. About 60% of the population of our country is rural and the main occupation is
agriculture. So, a large proportion of the land of the country is used for agriculture and
horticulture. Horticulture is the branch of agriculture that deals with the art, science, technology
and business of vegetable garden plant growing. Agriculture is the mainstay for 80% of the rural
population of the states. The Post-Green Revolution period saw diversification of the agricultural
sector towards the crops that have experienced higher growth in the yield, which was
characterized as technology-led diversification. Much of the area was diverted towards high
value food grain crops including rice, wheat and maize. This has led to emerging scenarios of
specialization in many states of the country. The need for agricultural diversification arises due
to various factors. As many parts of India have witnessed quite a high number of farmer
suicides, diversification of the crop mix can be an efficient mechanism for diminishing the impact
of risk on farmers' welfare.

24. The production of a diverse variety of crops rather than one specialized crop is called
__________ (diversification of crop production/diversification of production activity).
25. Much of the agricultural employment activities are concentrated in the_________(rabi/kharif)
season.

26. The Golden Revolution was a period of very high productivity in (horticulture/pisciculture).

27. The sector providing alternate livelihood options to 70 million small and marginal farmers is
________________ (agro-processing/livestock).

28. Critically appraise the performance of the public sector enterprises.

29. Highlight the positive contributions made by the British in India.

Or
What was the two-fold motive behind the systematic deindustrialisation affected by the British in
pre-independent India?

30. Under the colonial regime the real motive behind the development of infrastructure was to
meet various colonial interests. Accept/Refute the above statement. Give reason in support of
your answer.

31. Experts predict that by 2020, India could earn more than 500 billion rupees, through
'medical tourism Do you agree? Elaborate.
Or
What is Global Burden of Disease'? Analyse any three main factors responsible for it.

32. On the basis of the following data answer of the following question.

Country Urbanisation Infant Mortality Rate

(Per 1,000, live births)

India 33 38
Pakistan 39 66

(a) Comment on the Infant Mortality Rate among India and Pakistan.
(b) Pakistan is more urbanised than India.' Do you agree?

33. 'We have a moral obligation to hand over the planet earth in good order to the future
generation'.Do you agree with the above statement? Suggest any five measures to achieve the
above obligation.

34. "The reform process initiated in the early 1990s resulted in a decline in the number of
workers employed in the formal sector. Critically analyse.
Or
What is meant by economic infrastructure? Explain its importance in economic development.