ALAGU JOTHI ACADEMY SET - A

An International CBSE School

CLASS XII PERIODIC ASSESSMENT -I MAY (2024-25)

Time: 09:30 AM – 12:45 PM ECONOMICS (030) Max. Marks : 80
Date: 10-05-24 Duration : 3 Hrs.

GENERAL INSTRUCTIONS:
This question paper is divided into 4 sections – A, B, C, and D.
Section – A contains 20 Very short answer type questions. Each question in this section carries 1 mark.
Section – B contains 4 short answer type questions. Each question carries 3 marks.
Section – C contains 6 short answer type questions. Each question carries 4 marks.
Section – D contains 4 long answer type questions. Each question carries 6 marks

SECTION- A
1. The notable economist whose estimates India’s per capita income during the colonial period was
considered very significant:
a) Dadabhai Naoroji b) William Digby c) VKRV Rao d) R.C Desai
2. _________ is one of the main positive contributions made by the British in India.
a) Construction of all-weather roads b) Introduction of railways
c) Development of inland trade and sea lanes d) None of these
3. India’s demographic condition on the eve of independence was characterised by:
a) High level of literacy, high mortality rates, high life expectancy and high level of poverty.
b) Low level of literacy, low mortality rates, low life expectancy and Low level of poverty.
c) Low level of literacy, low moratlity rates, high life expectancy and high level of poverty.
d) Low level of literacy, high mortality rates, low life expectancy and high level of poverty.
4. Read the following statements relating to foreign trade during British rule and choose the correct
sequence of these statements.
i) India was an exporter of products like raw silk, cotton, etc.
ii) Britain maintained monopoly control over India’s foreign trade.
iii) India generated a large export surplus
iv) Exports did not result in any flow of wealth into the country
Alternative:
a) i), ii), iii), iv) b) iv), iii), ii), i) c) ii), i), iii), iv) d) iv), i), ii), iii)
5. Which of the following industries were in operation in our country at the time of independence?
a) Cotton and Jute textile industries b) Iron and steel industries
c) Sugar, cement and paper industries d) All of these
6. Small scale units are differentiated from large scale units on the basis of _________________.
a) Volume of output b) Amount of investment c) Volume of sale d) Size of unit area
7. At the time of independence private sector did not come forward to start capital goods industries due to:
a) Lack of capital b) Lack of demand
c) Both a) and b) d) None of the above
8. When was the planning commission set up?
a) 1949 b) 1950 c) 1956 d) 1850
9. refer to taxes levied on imported goods.
a) Quotas b) Tariffs c) Lagaan d) None of these

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10. The first Industrial policy Resolution in Independent India was introduced in the year_____.
a) 1948 b) 1950 c) 1954 d) 1956
11. Select the correct combination between the following columns.
Column A Column B
A. Trade barriers (i) Reduction in the value of domestic currency in comparison
to foreign currencies as a result of market forces
B. Devaluation (ii) Tariff and quota
C. Depreciation (iii) Selling part of equity of PSEs to the public
D. Disinvestment (iv) Deliberate downward adjustment of domestic currency
with respect to foreign currencies
Codes
a) A-(iii) B-(i) C-(iv) D-(ii) b) A-(ii) B-(i) C-(iii) D-(iv)
c) A-(ii) B-(iv) C-(i) D-(iii) d) A-(ii) B-(iii) C-(i) D-(iv)

Read the following statement given below and choose the correct alternative:
a) Both assertion and reason are true. Reason is the correct explanation of assertion
b) Both assertion and reason are true. Reason is not the correct explanation of assertion
c) Assertion is true but reason is not
d) Reason is true but assertion is not

12. Assertion (A) - Globalisation resulted in jobless growth in India.

Reason (R) - Ineffective policy of disinvestment is a negative effect of economic reforms.
13. Assertion (A): FDI leads to economic colonialism.
Reason (R): FDI leads to economic colonialism. Because FDI implies ownership and management of the
domestic enterprises by the foreign companies. Higher FDI leads to higher economic control
of the foreign companies in the domestic market. This is what economic colonialism implies.
14. Assertion (A) - The navratnas were granted financial and operational autonomy in the working of the
companies
Reason (R) - The government decided to give special treatment to some profit making PSU
15. Which of the following is a Navaratna?
a) Indian Oil Corporation Limited b) Steel Authority of India Limited
c) Hindustan Aeronautics Limited d) Airport Authority of India
16. Which of the following is a step that the central bank will take to encourage greater investment in the
economy?
a) It will look to increase the cash reserve ratio
b) It will look to reduce the cash reserve ratio
c) It will look to increase the bank rate
d) It will look to sell the government securities in the open market
17. Which of the following statements is true about the Indian monetary system?
a) The Indian monetary system is based on the gold standard
b) The Indian monetary system is based on the credit money standard
c) The Indian monetary system is based on the paper standard
d) The Indian monetary system is based on the metallic standard
18. Whenever the central bank offers securities in the open market, the credit creation capability of the
banking industry is expected to
a) Fall b) Rise c) May rise or may fall d) No effect

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19. What happens when margin requirements are increased?
a) It decreases borrowing capacity and money supply
b) It increases borrowing capacity and money supply
c) It encourages people to borrow more, resulting in a rise in the money supply.
d) There is no change in the money supply

20. Which of the following equations is true?

a) Initial deposits = Total deposits x Money multiplier
b) Total deposits = Initial deposits x Money multiplier
c) Total deposits = Initial deposits + Money multiplier
d) Initial deposits = Total deposits LRR

SECTION- B
21. Write a note on the Zamindari system in India.
22. The Industrial Policy Resolution, 1956 categorised industries on the basis of ownership. State those
categories.
23. Define the term ‘money’? Explain its components.
(OR)
What is credit money? Explain the forms of credit money?
24. Highlight the salient features of India’s pre-independence occupational structure.

SECTION- C
25. Discuss the impact of Railways on the Indian economy during British rule.
(OR)
Explain the need and type of land reforms implemented in the agriculture sector.
26. Indicate the volume and direction of trade at the time of independence. Were there any positive
contributions made by the British in India? Discuss.
27. Why was public sector given a leading role in industrial development during the planning period?
28. Why were reforms introduced in India?
29. Explain any two functions of a Central Bank.
30. What are open market operations? How do these work as a method of credit Control?

SECTION- D
31. While subsides encourage farmers to use new technology, they are a huge burden on government finances.
Discuss the usefulness of subsides in the light of this fact.

(OR)

Explain the statement that green revolution enabled the government to procure sufficient food grains to
build its stocks that could be used during times of shortage.

32. Explain briefly the merits and demerits of the economic reforms introduced in 1991.

33. How do commercial banks create deposits? Explain.

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34. (a) Why was it necessary for a developing country like India to follow self-reliance as a planning
objective?

(b) Case study:

The central bank of India i.e. Reserve Bank of India, is the apex institution that control the entire
financial market. It's one of the major functions is to maintain the reserve of foreign exchange. Also, it
intervenes in the foreign exchange market to stabilise the excessive fluctuations in the foreign exchange
rate.

In other words, it is the central bank's job to control a country's economy through monetary policy; if the
economy is moving slowly or going backward, there are steps that central bank can take to boost the
economy. These steps, whether they are asset purchases or printing more money, all Involve injecting more
cash into the economy. The simple supply and demand economic projection occur and currency will
devalue. When the opposite occurs, and the economy is growing, the central bank will use various methods
to keep that growth steady and in-line with other economic factors such as wages and prices.
Whatever the central bank does or in fact don't do, will affect the currency of that country.Sometimes, it is
within the central bank's interest to purposefully effect the value of a currency.
For example, if the economy is heavily reliant on exports and their currency value becomes too high,
importers of that country's commodities will seek cheaper supply; hence directly effecting the economy.

Answer the following:

1. Which of the following tools are used by the central bank to control the flow of money in domestic
economy?
a) Fiscal tools b) Quantitative monetary tools
c) Qualitative monetary tools d) Both (b) and (c)
2. Dear money policy of central bank, which is used to keep the growth steady and in-line with other
economic factors, refers to
a) Tighten the money supply in the economy
b) Ease the money supply in the economy
c) Allow commercial banks to work under less strict environment
d) Both (b) and (c
3. Which of the following steps should be taken by the central bank if there is an excessive rise in the foreign
exchange rate?
a) Supply foreign exchange from its stock
b) Demand more of other foreign exchange
c) Not intervene in the market as the exchange rate is determined by the market forces
d) Help central government to stabilize the foreign exchange rate.

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