Practice sheet

Statement questions
Class 12 - Economics
Time Allowed: 1 hour Maximum Marks: 75

1. Which of the following statements is wrong? [1]

a) This export surplus was used for the b) All of the above betterment of
Indian economy.

c) Foreign trade was mainly directed towards d) India generated export surplus during Britain and
its colonies during British rule. British rule.

2. Which of the following statements is not true about the demographic condition of India during the Colonial [1]
period?

a) Infant mortality rate was very high. b) Female literacy rate was just 7%.

c) Life expectancy was too high. d) After 1921, India entered the second stage
of demographic transition.

3. Identify the false statement in context of India's foreign trade. [1]

a) Surplus in foreign trade account. b) Import of gems and pearls from Britain.

c) Importer of finished goods. d) Exporter of raw material.

4. Which of the following is false regarding Positive effect of British rule? [1]

a) Introduction of Railways b) Provision of post and telegraph service

c) Development of ports d) Monopoly on foreign trade

5. Which of the following statement(s) is/are true for British period? [1]

a) India attained self-sufficiency in foodgrain b) There were check over famines production

c) Effective administrative setup d) All of these

6. Identify the statement which is not true in the context of demographic condition of India: [1]

a) Poor health facilities b) High birth rate and death rate

c) High literacy rate d) High infant mortality rate

7. Choose the statements which truly state about infrastructure condition on the eve of India's independence. [1]
a. Roads were constructed by Britishers primarily for movement of army.
b. Railways were introduced in 1820.
c. Indian exports expanded during this period.
d. Britishers took measures to develop inland trade and sea routes.

a) (a), (b) and (c) b) (a), (c) and (d)

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 c) (a), (b) and (d) d) (b), (c) and (d)

8. Which of the following statement is false in the context of the industrial sector during the colonial period? [1]
A. There was a marked decline in handicraft industries.
B. The British government promoted capital goods industries.
C. The public sector had a limited role to play.
D. Contribution of industries to Gross Domestic Product was very small.

a) Only C b) Only A

c) Only B d) Only D

9. Which of the given statement is incorrect with regard to the demographic status of India on the eve of [1]
independence?

a) India entered the second stage of b) The first census year of British India was demographic transition
post-1941. 1881.

c) Infant Mortality rate startled at 218 per d) Fem ale literacy rate was as low as 1%.
thousand live births.

10. Identify which of the following statement is correct: [1] a. British colonial rule made India net importer of raw
material.
b. The real motive behind infrastructure development by Britishers was to serve the people of India.
c. India generated large export surplus during the British rule.
d. Indian handicraft industry enjoyed world-wide reputation under the British rule.

a) Option (b) b) Option (a)

c) Option (d) d) Option (c)

11. Identify the incorrect statement from the following: [1]

a) Russian economic model was the base for b) Import substitution was the strategy used to the
Indian economic system. save foreign exchange.

c) Small Scale Industries are one of the d) License policy ensured regional equality.
essential tools for employment generation.

12. A plan should have some well-specified goals. Which of the following is incorrect with regard to the goals of [1]
five-year plans in India?
a. An increase in the country's capacity to produce goods and services
b. Change in the socioeconomic outlook
c. Building an industrial economy with widening w age-parities
d. Ensuring the fruits of development is reaped by all

a) Option (b) b) Option (c)

c) Option (d) d) Option (a)

13. Which of the following statement is correct with reference to the mixed economy system in India? [1]

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 a. Predominance of free market economic system over the government regulated economy. b. Absence of
economic planning.
c. Ownership of factors of production only to private sector.
d. Co-existence of public and private sector.

a) Option (a) b) Option (d)

c) Option (c) d) Option (b)

14. Identify the statement which is not true: [1]

i. Under Five Year Plans, the government actively participated in economic activities.
ii. Growth with equity was the objective of Five Year Plans. iii. The private sector was given
an important role during Five Year Plans.
iv. The public sector was given a leading role in industrial development.

a) Only B b) Only D

c) Only A d) Only C

15. Which of the following is not true for small scale industries? [1]

a) SSI shows locational flexibility and is b) SSI needs small investment and is therefore, therefore,
equality oriented. equity oriented.

c) SSI is labour intensive and therefore, d) SSI is capital intensive and therefore, employment
oriented. increases productivity.

16. Which of the following is not true about economic crisis of India in 1990? [1]

a) BOP was in deficit of ₹30,000 crore b) Foreign exchange reserves showed a

marginal rise owing to policies between
1950 to 1990

c) Inflation rate was very high at 16.8% per d) India was highly indebted country, pay annum
₹10,000 crore as interest payment

17. Which of the following is incorrect with regard to the financial sector reforms taken under the purview of new
[1] economic policy, 1991?
a. Role of RBI shifted from regulator to facilitator of financial institutions.
b. Foreign investment limit in banks was raised to around 70 percent.
c. Foreign Institutional lnvestors (Flls)are now allowed to invest in Indian financial markets.
d. Banks can set up new branches without the approval of RBI provided they fulfil certain conditions

a) Option (c) b) Option (d)

c) Option (a) d) Option (b)

18. From the following statements regarding Goods and Services Tax (GST), identify the incorrect statement: [1]

a) It's imposed on the supply of goods and b) All types of direct and indirect taxes have services.
been subsumed by it.

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 c) It ensures uniformity of tax rates across all d) It ensures better tax compliance and tax states.
collection.

19. Which of the following statements correctly represents actions taken by the government towards liberalisation?
[1]
P. levying high tariffs to discourage import and promoting the consumption of domestic goods and services
Q. devaluation of the rupees to encourage inflow of foreign exchange
R. allowing for private banks to make decisions independent of the RBI restrictions
S. fixing prices of certain industrial goods in order to support increased consumption of these goods to boost the
manufacturing industry

a) Q and S only b) P and Q only

c) P and R only d) Q and R only

20. Which of the following statements is true? [1]

a) Disinvestment is broader than privatisation. b) Every disinvestment is privatisation.

c) Privatisation and disinvestment is one and d) Every privatisation is disinvestment.

the same thing.

21. Which of the following is the CORRECT difference between physical and human capital? [1]

a) Physical capital can be sold but human b) Physical capital cannot be separated from its capital
cannot be sold. owner while human capital can.

c) Physical capital provides both private and d) The depreciation of physical capital can be social
benefits while human capital provides arrested with more investment while human only social
benefits. capital will continue to deplete.

22. Which of the following statements is true? [1]

a) Physical capital and human capital both can b) Physical capital and human capital both
are be built by imports mobile

c) Physical capital and human capital both can d) Physical capital and human capital both
can be separated from their owners be created through efforts

23. Which of the following statement is true? [1]

a) Human development is based on the idea b) Major share of education expenditure goes that
education and health are integral to to higher education. human well-being.

c) Education and literacy can be used as d) No education cess is imposed by the synonyms of
each other. government on all union taxes.

24. Which of the following statements is true? [1] i. Major share of education expenditure goes to higher
education.
ii. No education cess is imposed by the government on all union taxes. iii. Human development is
based on the idea that education and health are integral to human well-being. iv. Education and
literacy can be used as synonyms of each other.

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 a) Option (ii) b) Option (i)

c) Option (iv) d) Option (iii)

25. Which of the following statement is correct? [1] a. Human capital and Human Development are the same thing
b. Human capital treats human being as means
c. Human capital is intangible whereas physical capital is tangible
d. Physical capital cannot be sold in the market
a) Option (a) b) Option (b)

c) Option (c) d) Option (d)

26. Which of the following statements is not false? [1]

a. Higher education takes a major share of the total educational expenditure in India.
b. No education cess has been imposed by the government of India.
c. Educational achievements in a country are indicated in terms of adult literacy level only.
d. Expenditure per student at tertiary level is higher than that of elementary level of education.

a) Option (c) b) Option (b)

c) Option (d) d) Option (a)

27. Identify the incorrect statement in context of human capital. [1]

a) Human capital is intangible in nature b) Human capital is inseparable from its owner

c) Human capital cannot be sold in market like d) Human capital is perfectly mobile
commodity

28. Which of the following is false regarding Human Capital? [1]

a) It is separable from its owner b) It increase the efficiency to produce tangible

goods

c) It can be built through policy formulation d) It creates both private and social benefits

29. Which among the following is incorrect with regard to the positive aspect of human capital formation? [1]

a) Improves technical knowledge b) Increases the cost of production

c) Increases productivity d) Changes the social outlook

30. Identify the incorrect statement from the following: [1]

a) Human capital represents enhanced labour b) Investment in human capital enhances

productivity. efficiency and skills, implying economic
growth.

c) Human capital is separable from its owner. d) Human capital treats human beings as a
means to an end.

31. Statement I: Though, in terms of numbers, our livestock population is quite impressive but its productivity is
[1]
quite low as compared to other countries.

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 Statement II: There is broad consensus that IT can play a critical role in achieving sustainable development and food
security in the twenty-first century.

a) Both the statements are true. b) Statement II is true, Statement I is false.

c) Statement I is true, Statement II is false. d) Both the statements are false.

32. Statement I: Presently, fish production from inland sources contributes about 35 per cent to the total value of
[1] fish production and the balance 65 per cent comes from the marine sector (sea and oceans).
Statement II: Today total fish production accounts for 0.9 per cent of the total GDP.

a) Statement I is true, Statement II is false. b) Statement II is true, Statement I is false.

c) Both the statements are false. d) Both the statements are true.
33. Statement I: In Operation Flood system the farmers are assured of a fair price and income from the supply of
[1] milk to urban markets.
Statement II: Gujarat, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Maharashtra, Punjab and Rajasthan,
are major milk producing states.

a) Statement II is true, Statement I is false. b) Both the statements are true.

c) Both the statements are false. d) Statement I is true, Statement II is false.

34. Statement I: There is an increasing demand for organically grown food to enhance food safety throughout the [1]
world.
Statement II: Studies across countries have shown that organically grown food has more nutritional value than
chemical farming.

a) Both the statements are true. b) Statement II is true, Statement I is false.

c) Both the statements are false. d) Statement I is true, Statement II is false.

35. Statement I: Organic produce has less blemishes and a greater shelf life than sprayed produce. [1] Statement II:
Organic farming helps in sustainable development of agriculture in India.

a) Statement I is true, Statement II is false. b) Statement II is true, Statement I is false.

c) Both the statements are true. d) Both the statements are false.

36. Identify which of the following statement is not correct with reference to Self Help Groups? [1]
a. Group members in need of funds can borrow at nominal rate of interest.
b. Borrowings in micro-credit system are mainly taken for consumption purposes.
c. Micro-credit system has helped men in rural area to become self-dependent.
d. Formal credit system has failed to provide credit to the needy people in the rural areas.

a) Option (d) b) Option (b)

c) Option (c) d) Option (a)

37. Identify the incorrect statement from the following. [1]

a. Diversification into other sector is essential to enable rural people to overcome poverty.
b. Diversification is an essential component because there is greater risk in depending exclusively on farming for
livelihood.

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 c. Diversification provides supplementary gainful employment.
d. Diversification activities are not beneficial.

a) Option (c) b) Option (b)

c) Option (d) d) Option (a)

38. Which of the given statement is incorrect regarding the role of NABARD? [1] a. It performs all the functions of RBI
with regard to agricultural credit
b. It helps the flow of credit through cooperative banks, regional rural banks etc
c. Maintain a research and development fund to promote research in agriculture
d. Provides support to farm sector only

a) Option (a) b) Option (b)

c) Option (d) d) Option (c)

39. Which of the given statement is correct with regard to the non-institutional source of credit? [1] a. There are
government bodies to supervise informal sector
b. Moneylenders ask for a reasonable rate of interest
c. Cost of informal loans to the borrower is quite high
d. Moneylenders use fair means to get their money back

a) Option (c) b) Option (a)

c) Option (b) d) Option (d)

40. Identify the incorrect statement from the following: [1]

a. Horticulture has emerged as a successful sustainable livelihood option for farmers in India.
b. Horticulture is an important sector for potential diversification and value addition in agriculture.
c. India is blessed with supportive climatic and soil conditions for horticulture.
d. Horticulture is the business related to producing, storing and distributing food grains.

a) Option (b) b) Option (a)

c) Option (c) d) Option (d)

41. Which of the following is false regarding NABARD? [1]

A. Maintain a research and development fund to promote research in agriculture
B. It helps the flow of credit through co-operative banks, RRB’s etc
C. It performs all the functions of RBI with regards to agriculture credit
D. It helps farmers directly

a) Only B b) Only C

c) Only A d) Only D

42. Which of the following is false regarding SHG’s? [1]

a) Small and informal association of poor b) Provide rural credit by mobilising their own persons
resources

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 c) Introduced in 1982 d) Improve rural’s poor access to formal credit
system

43. Which of the following given statement is correct? [1] a. Primary co-operative societies operate at district
level
b. Diversification of agriculture is essential to provide sustainable livelihood options to rural people
c. In organic farming, only short-term fertility of the soil is maintained
d. 14 major commercial banks were nationalised in 1980

a) Option (a) b) Option (c)

c) Option (b) d) Option (d)

44. If India has to make real progress she has to develop its rural areas. Which of the following is incorrect [1]
reason for the above mentioned statement?
a. Approximately one-third population of rural India still lives in abject poverty.
b. More than 50 per cent India’s population depends on agriculture for their livelihood.
c. Growth rate in the Indian agriculture sector has been quite lower than of other sector.
d. Majority of rural people have access to the basis necessities of life.

a) Option (c) b) Option (a)

c) Option (b) d) Option (d)

45. Identify the incorrect statement from the following. [1]

a. Diversification in agriculture sector provides sustainable livelihood rural population.
b. Diversification includes - change in cropping pattern, shift of workforce from agriculture to other allied activities
and non-agriculture sector.
c. Objective of investment in new agricultural avenues (non-farm activities) increases financial risks for the rural
population.
d. Diversification reduces the proportion of unemployed population in the rural areas to considerable limits.

a) Option (b) b) Option (d)

c) Option (a) d) Option (c)

46. Statement I: In the past few decades, primary sector has create maximum jobs in India. [1]
Statement II: Greater proportion of women workers are found in rural areas as a component of Indian work
force.

a) Statement I is true, Statement II is false. b) Both the statements are false.

c) Statement II is true, Statement I is false. d) Both the statements are true.

47. Statement I: During the period 1950-2010, in the Indian economy, without generating employment, we have
[1] been able to produce more goods and services.
Statement II: In 2017-18 there was a moderate rise in the share of regular salaried employees.

a) Both the statements are false. b) Statement II is true, Statement I is false.

c) Statement I is true, Statement II is false. d) Both the statements are true.

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48. Statement I: Women carrying out works like cooking, fetching water and fuelwood and participate in farm [1]
labour, should not be called workers.
Statement II: If the worker-population ratio is higher, it means that the engagement of people is greater; if the
ratio for a country is medium, or low, it means that a very high proportion of its population is not involved
directly in economic activities.

a) Both the statements are true. b) Statement I is true, Statement II is false.

c) Statement II is true, Statement I is false. d) Both the statements are false.

49. Statement I: Those who are self-employed are also workers. [1]
Statement II: Those activities which contribute to the gross national product are called economic activities.

a) Statement II is true, Statement I is false. b) Statement I is true, Statement II is false.

c) Both the statements are true. d) Both the statements are false.

50. Statement I: An establishment with four hired worker is known as formal sector establishment. [1] Statement ll:
Those who work in private sector establishments which employ 10 hired workers or more are called informal sector
workers.

a) Both the statements are false. b) Both the statements are true.
c) Statement-II is true, Statement-I is false. d) Statement-I is true, Statement-II is false.

51. Which of the following is false regarding India Vision 2020: Employment? [1]
A. By the year 2020, the primary sector’s employment in the total workforce is expected to increase to less than
45% percent.
B. India needs to generate in the order of 200 million additional employment opportunities over the next two
decades.
C. Increase the role of SME’s which create a majority of jobs.

a) (B) b) None of these

c) (C) d) (A)

52. Which of the following is false regarding Disguised unemployment [1]

a) Mounting pressure of population in rural b) Feature of agrarian economy areas

with no alternative employment

c) More people are engaged than required d) Marginal productivity of worker is high

53. Which of the following is false regarding formal sector [1]

a) Worker of this sector called formal workers b) They can form trade union

c) All of these are false d) Workers are not entitle to social security
benefits

54. Which of the following is the correct definition of self-employed? [1] i. Not able to find jobs during some months of
the year
ii. Own and operate their own enterprises
iii. Receive wages on a regular basis by the employer

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 iv. Casually engaged in other individuals enterprises

a) Only ii b) Only i

c) Only iv d) Only iii

55. Which of the following is false regarding the labour force? [1]

a) Exclude mentally challenged people b) Include those engaged in productive

activities

c) Exclude very young and very old people d) It includes all member of the population

56. Statement I: Renewable resources are those which can be used without the possibility of the resource becoming
[1]
depleted or exhausted.
Statement II: Carrying capacity means the ability of the environment to absorb degradation.

a) Both the statements are true. b) Both the statements are false.

c) Statement I is true, Statement II is false d) Statement II is true, Statement I is false.

57. Statement I: In order to address two major environmental concerns in India, viz. water and air pollution, the
[1] government set up the Central Pollution Control Board (CPCB) in 1974.
Statement II: The CPCB has identified 14 categories of industries (large and medium scale) as significantly polluting.

a) Both the statements are true. b) Statement II is true, Statement I is false.

c) Statement I is true, Statement II is false. d) Both the statements are false.

58. Statement I: The Pollution Control Boards (PCBs) prepare manuals, codes and guidelines relating to treatment
[1]
and disposal of sewage and trade effluents.
Statement II: The CPCB (Central Pollution Control Board) has identified seventeen categories of industries (large
and medium scale) as significantly polluting.

a) Both the statements are false. b) Statement II is true, Statement I is false.

c) Statement I is true, Statement II is false. d) Both the statements are true.

59. Statement I: Use of chlorofluorocarbons has led to ozone depletion. [1]

Statement II: The problem of ozone depletion is caused by high levels of chlorine and bromine compounds in
the stratosphere.

a) Both the statements are true. b) Both the statements are false.

c) Statement II is true, Statement I is false. d) Statement I is true, Statement II is false.

60. Statement I: Global warming and ozone depletion contribute to increased financial commitments for the [1]
government.
Statement II: The opportunity costs of negative environmental impacts are high.

a) Both the statements are true. b) Both the statements are false.

c) Statement II is true, Statement I is false. d) Statement I is true, Statement II is false.

61. Which of the following statements about sustainable development is true? [1]

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 a) Sustainable development can only support b) Sustainable development can support a high limited
levels of consumption. quality of life with continued population
growth.

c) Sustainable development will be able to d) Sustainable development is only possible support

everyone in the world at the States for people living in wealthy countries.
level of consumption.

62. Which of the following statement is correct? [1]

a) Global warming is entirely a natural b) Global warming is simply an another term phenomenon
used for green house effect

c) Global warming is caused by ozone d) Global warming is the rise in average depletion
temperature at the earth’s surface

63. Read the following statements carefully: [1]

Statement 1: Special Economic Zones (SEZ's) policy has led to huge Foreign Direct Investment (FDI) flow to China.
Statement 2: China's rapid industrial growth was the result of its economic reform in 1981.
In the light of the given statements, choose the correct alternative:

a) Both statements 1 and 2 are true. b) Both statements 1 and 2 are false.

c) Statement 1 is false and Statement 2 is true. d) Statement 1 is true and Statement 2 is false.

64. Read the following statements carefully: [1] Statement 1: Great Proletarian Cultural Revolution was
introduced in China in 1950's.
Statement 2: China's growth is mainly contributed by the manufacturing sector.
In the light of given statements, choose the correct alternative from the following:

a) Statement 1 is true and Statement 2 is false. b) Both statements 1 and 2 are false.

c) Both statements 1 and 2 are true. d) Statement 1 is false and Statement 2 is true.

65. Statement I: The total cultivable area in China accounts for 40 per cent of the cultivable area in India. [1]
Statement II: Until the 1980s, more than 80 per cent of the people in China were dependent on farming as their
sole source of livelihood.

a) Statement I is true, Statement II is false. b) Both the statements are true.

c) Both the statements are false. d) Statement II is true, Statement I is false.

66. Read the following statements carefully: [1]

Statement 1: Liberty indicators measure the extent of constitutional protection given to the citizens.
Statement 2: India provides fair constitutional protection to its citizens.
In light of the given statements, choose the correct alternative from the following:

a) Both Statements 1 and 2 are true. b) Statement 1 is false and Statement 2 is true.

c) Both Statements 1 and 2 are false. d) Statement 1 is true and Statement 2 is false.

67. Statement I: In the 1980s, Pakistan was ahead of India in terms of Annual Growth of Gross Domestic Product [1]
(%).

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 Statement II: The reform processes introduced in Pakistan and political instability over a long period as reasons
behind the declining growth rate in Pakistan.

a) Statement II is true, Statement I is false. b) Both the statements are true.

c) Both the statements are false. d) Statement I is true, Statement II is false.

68. Statement I: Under the Commune system in China, people collectively cultivated lands. [1]
Statement II: In 1958, there were 26,000 communes covering almost all the farm population of China.

a) Both the statements are true. b) Both the statements are false.

c) Statement I is true, Statement II is false. d) Statement II is true, Statement

69. Statement I: While India and Pakistan became independent nations in 1947, People's Republic of China was [1]
established in 1949.
Statement II: While India announced its first Five Year Plan in 1951, Pakistan announced its first five year plan,
now called the Medium Term Development Plan, in 1953. China announced its First Five Year Plan in 1956.

a) Statement II is true, Statement I is false. b) Statement I is true, Statement II is false.

c) Both the statements are true. d) Both the statements are false.

70. Statement I: When many developed countries were finding it difficult to maintain a growth rate of even 5 per
[1]
cent, India was able to maintain near double-digit growth during 1980s.
Statement II: In 2015-17, there has been a decline in Pakistan and China's growth rates, whereas, India met
with moderate increase in growth rates.

a) Statement II is true, Statement I is false. b) Both the statements are true.

c) Both the statements are false. d) Statement I is true, Statement II is false.

71. Identify the incorrect statement from the following: [1]

(Choose the correct alternative)

a) In 1991, India adopted New Economic b) One Child Policy norm was adopted in
Reforms. Pakistan.

c) China's Economic growth rate is better than d) Pakistan is behind India in HDI ranking.
that of Pakistan.

72. Arrange the following events in chronological order and choose the correct answer from the given alternatives:
[1] i. Establishment of the People’s Republic of China
ii. Creation of Pakistan
iii. First Five-Year Plan of India iv. First Five-Year Plan of China
Alternatives:

a) (ii), (i), (iii),(iv) b) (iv), (iii), (ii), (i)

c) (iii), (ii), (i), (iv) d) (i), (iv), (ii), (iii)

73. Which of the following is false regarding China? [1]

a) Sex ratio is biased and low b) Density of population is lowest

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 c) Fertility rate is low d) Population is very small

74. On the basis of the data given below, identify the incorrect statement in terms of annual growth of GDP (%):
[1] (Choose the correct alternative)
Annual Growth of Gross Domestic Product (%), 1980-2017

Source: Key Indicators for Asia and Pacific 2016. Asian Development Bank. Philippines: World Development
Indicators 2018 Alternatives:

a) India experienced a rapid rise in Gross b) China was able to maintain near doubleDomestic
Product during 2015-17. digit growth during the 1980s.

c) Both China and Pakistan experienced a d) Pakistan was ahead of India during 1980decline in
growth rate during 2015-17. 2017.

75. Arrange the following events in chronological order and choose the correct alternative: [1] i. Establishment of
People's Republic of China
ii. Creation of Pakistan
iii. First Five-Year Plan of India iv. First Five-Year Plan of China
Alternatives:

a) (i), (iv), (ii), (iii) b) (iii), (ii), (i), (iv)

c) (ii), (i), (iii), (iv) d) (iv), (iii), (ii), (i)

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