DELHI PUBLIC SCHOOL, BANGALORE SOUTH

SAMPLE PAPER (2023-24)

SUBJECT- ECONOMICS
CLASS: XII TIME:3 Hrs
MM: 80
General Instructions:
1. Answer all the questions.
2. Marks are indicated against each question.

PART - A
Answer all the questions:
1.The component not included in money supply. 1
a. Currency with private individuals b. Currency with business firm
c. Stock of gold with RBI d. All of these
2. ------------ instruments of monetary policy affect the direction of credit in the economy. 1
3. What is meant by normal residents of a country? 1
4. Which of the following products are intermediate products or final products? Give
reasons. 1
i. Purchase of ticket for train journey by an individual.
ii. Machine bought by a firm for its own use.
State whether the following statement is true or false with a reason:
5. Income earned by foreigners working in branch of a foreign bank in India is a part of the
domestic factor income of India. True or False. 1
6. Does national income include the income earned by non-residents of a country who
happen to be citizens of that country? 1

CASE BASED QUESTIONS:

Read the following case study carefully and answer the questions on the basis of the same:
As dark clouds of economic slowdown cast shadows over the household demand and
overall consumption, the RBI may further cut the repo rate in its upcoming MPC meet. Aditi
Nayar, Principal Economics, ICRA, expect that MPC to announce a further asymmetric cut of
25 basis points in the repo rate and 35 basis points in the reverse repo rate. After 250 basis
points cut in the last 1.5 years, including 115 basis points cut in the repo rate since the
coronavirus pandemic began, the rates are believed to be at the bottom of the cycle. With
the rising inflation outlook and prevailing uncertainty over growth outlook, the Brickwork
Ratings expects the RBI, MPC to adopt a wait and watch approach and hold the repo rate at
4% and continue with its accommodative monetary policy stance in its upcoming meeting.
Highlighting other options to foster demand, it added that the RBI may use other liquidity
tools such as OMO’ wisely and cautiously so that once the situation normalizes and
economic activities resume, it has enough armour to help bring the economy back on track
and also support the government to manage the restrained fiscal situation.
The Financial Express: July 2020.
7. Value of MPS can be greater than one. True /False Give reason. 1
8. An economy facing unintended accumulation of inventories would try to ----------
aggregate demand. 1
9. Higher the value of MPC ---------- is the value of multiplier. 1
10. If MPS is 0.2, how much new investment is required to increase national income by
Rs. 800 Cr.? 1
a. 640 Cr. b. 160 Cr. c. 400 Cr. d. None of these.
11. Define AD. Explain various components of AD. 3
12. “The central government relies on RBI just like general public relies on commercial 3
banks”. Identify and explain the function of RBI
13. Outline the steps required to be taken in deriving saving curve from consumption 4
curve.
14. a. Differentiate between gross domestic product at current price and at constant price. 4
b. Will the following be included in the National Income? Give reason.
i. Payment of interest on a loan taken by an employee from the employer.
ii. Purchase of refrigerator by a firm for own use.
15. How the following tools can be used for credit control by the central bank in the 4
economies.
a. Open Market Operation.
b. Margin requirement.
16. a. In an economy planned saving is greater than planned investment. Explain all changes
that will take place in the economy.
b. Discuss the significance of 45-degree line in Keynesian economics. 6
17. a. Calculate Net Value Added at Market Price from the following: 6
ITEMS Rs. Cr.
i. Sale of rice by the farmer in the local market 8000
ii. Purchase of tractor 4000
iii. Procurement of rice by the govt. from the farmer 400
iv. Expenditure made on the maintenance of existing capital stock 200
v. Indirect taxes 40
vi. Subsidy 30
b. How does increase in inequalities in distribution of income affects welfare of the
society?
 PART – B INDIAN ECONOMIC DEVELOPMENT
18. Government intervention is essential in education and health sector because: 1
i. These sectors create private and social benefits.
ii. Expenditure on these make substantial long-term impact which cannot be easily
reversed.
iii. Monopoly situation may emerge and unnecessary exploitation of the service seeker
can be avoided.
a. (i) and (ii) b. (ii) and (iii)
c. (i), (ii) and (iii) d. None of these
19. Read the following statement-Assertion (A) and Reason (R)choose one of the correct
alternatives given below: 1
Assertion (A): Human capital formation not only increases the productivity of human
resources, but also stimulates innovations and inventions.
Reason (R) : Investment in human capital enable people enjoy a higher standard of living.
Alternatives:
a. Both Assertion and Reason are true and Reason is the correct explanation of
Assertion.
b. Both Assertion and Reason are true and Reason is not the correct explanation of
Assertion.
c. Assertion is true but Reason is false.
d. Assertion is false but Reason is true.

CASE BASED QUESTIONS:

Read the following case study carefully and answer the questions on the basis of the
same:
Bill relating to commodities The Essential Commodities (Amendment) Bill, 2020
(Provisions) . To remove commodities like cereals, pulses, oilseeds, onion and potatoes from
the list of essential commodities. It will do away with the imposition of stockholding limits
on such items except under "extraordinary circumstances" like war. This provision will
attract private sector / FDI into farm sector as it will remove fears of private investors of
excessive regulatory interference in business operations. (a).To bring investment for farm
infrastructure like cold storages, and modernising food supply chain. To help both farmers
and consumers by bringing in price stability. (b)To create competitive market environment
and cut wastage of farm produce.
20. When the farmers sell the agricultural surplus to tradesmen at lower prices it is
known as ________. 1
21. National Agricultural Federation (NAFED) was established in the year _________. 1
22. Out of the following statements which one is correct?
a) Life expectancy is higher in Pakistan as compared to India
b) Pakistan’s GDP per capita is higher than India
c) China’s performance in providing sanitation is better than India
d) Pakistan ranks higher in HDI as compared to India. 1
 23.Read the following statement carefully and choose the correct alternative: 1
Statement 1: To address noise pollution in India, the government set up the Central
Pollution Control Board in 1974.
Statement 2: The CPCB has identified 37 categories of industries as significantly.
polluting
a. Statement 1 is true and statement 2 is false.
b. Statement 2 is true and statement 1 is false.
c. Both the statements are true.
d. Both the statements are false.
24. Arrange the following 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,iii,iii
b) iii,ii,i,iv
c) ii,i,iii,iv
d) iv,iii,ii,i
25.Borrowings from SHGs are mainly confined to--------------- 1
a) Consumption b) Production
b) Both a and b c) None of these.
26.State whether following statement is True or False with reason:
‘China introduced reforms in 1987 to address the slow pace of economic growth. The reforms
in China were dictated by the World Bank and international Monetary Fund’. 1
27. Some people look for jobs in newspapers, some look for a job through friends and
relatives. In many cities, people standing in some select areas looking for people to employ
them for that day’s work. Some go to factories and offices and give their biodata and ask
whether there is any vacancy in their factory or office. Some go to employment exchanges.
The situation described in the above paragraph is called----------. 1
a. Disguised unemployment b. Seasonal unemployment
c. Open unemployment d. None of these.
28. What is organic farming? Mention any two advantages of organic farming in India. 3
29. The rate of participation of women is more in rural areas as compared to urban areas.
Explain. 3
30. ‘Information Technology plays a very significant role in achieving sustainable
development and food security’-Comment. 4
31. State any four pressing environmental concerns of India. 4
32. Critically appraise the growth of education sector in India during 1952-2014. 4

33. Compare and contrast the development of India, China and Pakistan with respect to
sectoral contribution. 6
34. Study the following chart showing the Growth of Employment and Gross Domestic 6
product and analyse the trends of the two variables from 1951-2012.
Do you think that in the last 70 years, employment generated in the country is
commensurate with the growth of GDP in India?

Comment on the two patterns of variable shown in the chart.

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 DELHI PUBLIC SCHOOL BANGALORE SOUTH
MID TERM EXAM
SOLUTION
CLASS: XII
1. (c) Stock of gold with RBI

2. Qualitative/ Selective credit control method

3. Normal resident of a country refers to an individual or an institution who ordinarily resides in the
country and who’s Centre of economic interest also lies in that country.

4. i. Final product because it is final consumption expenditure.

ii. Final product because it is used for final consumption.

5. True. This is because the branch of a foreign bank is located within domestic territory of India.

6. No. NI includes income of only the normal residents of a country but it does not include the
income of the non-residents, even when they happen to the citizen of that country.

7. False. Change in savings can never be greater than change in income.

8. Increase

9. Higher

10. 160 Cr.

11. Definition

AD=C+I+G+(X-M)

12. Banker to the government function.

Explain about Banker, Agent and Adviser function of the Central Bank
13. Diagram

Explanation of derivation of saving curve

14. a. GDP at current price measures NI using current year price prevailing in the market.
GDP at constant price measures NI using constant price or Base years price.
b. (i) Payment of interest on a loan taken by an employee from the employ is not included in the
estimation of NI as the loan is not taken for production purposes.
15. OMO- Buying and selling of securities by the govt. during inflation govt. will sell securities sand
During deflation govt. will buy the securities.
Margin requirement – Difference between the collateral surrendered and the loan granted.
During inflation RBI increases the margin requirement and during deflation RBI will decrease
the Margin requirement.

16. S>I
Consumer is not consuming as much as the firm expected them to
As a result, inventory rises above the desired level
To clear unwanted stock, firms would plan to reduce production till S=I
b. 45-degree line is AS curve which starts from the origin. It indicates that each and ave rpoint on
the AS curve is equi-distant from the horizontal and vertical axis.
17. a. NVAMP = Sale of rice in local market (+) Procurement by govt. (–) Expenditure made on the
maintenance of existing capital (Depreciation)
= 8000+400-200
=Rs. 8200 Cr.
b.Equilibrium level of income (y) (AD=AS=Y
At equilibrium Y=C+I
Y=60+0.8Y+70 AD=C+I)
0.2Y=130
Y=Rs.650cr
ii) I=Rs.80cr
At equilibrium y=C+I
Y=60+0.8Y+80
0.2Y=140
Y=Rs.700 cr

PART B :IED
18. (C)
19. (B)
20. Distress sales
21. 1958
22.( c)
23.(d)
24. ( c)
25. (a)
26. False .China introduced its reforms in 1978.There was no compulsion from world bank and IMF
to open up their economy like India or Pakistan
27. Open unemployment
28. Organic farming is a eco-friendly technology which is a whole system of farming that restores,
maintains and enhances the ecological balance
i. It is a means to replace the expansive agricultural inputs with the cheaper locally produced
organic inputs.
ii. Organic food possesses more nutritional value
iii. It is pesticide-free (any relevant point)
29. i. Female education in India is a challenge which implies low opportunities for jobs.
ii. In most urban family’s job of women is still governed by family decisions rather than that of
individuals.
iii. Higher employment of women in rural areas is owing to widespread rural poverty.

30.i. IT can play a crucial role in achieving sustainable development.

ii. It can predict areas of food security using information and software tools.
iii. It can disseminate information regarding emerging technologies and its applications, prices,
weather and soil conditions for growing different crops
Iv. It also has a potential of generating employment in rural areas. (Explain the points)
31. i) Bio diversity loss
ii) Land degradation
iii) Deforestation
iv)Water pollution.
32. _ Inadequate government expenditure on education.
_ Higher education a few takers.
_ Regional differences in education attainment.
_ Education for all still a distant dream
-_ In 1950 Constitution of India was passed stating free and compulsory education for all children
up to the age of 14 years
_ Right to education was passed in the year 2009.
_ Other education programmes were initiated by the government to ensure education for all.

33. _China
Area suitable for cultivation is only about 10% reason.
Proportion of workforce in Agriculture decreased to 26% contributing to 7% of GDP.
Secondary sector with a workforce of 28% with 41% contribution of GDP
Service Sector with a workforce of 46% with 52% contribution to GDP
India
Agriculture with workforce of 43% contributed 16% of GDP
Industry 25% with 30% contribution to GDP
Service is 54% of contribution with 32% of workforce.
India and Pakistan shifted from agriculture to service sector while China shifted from agriculture to
industry then to service sector.
Pakistan
Agriculture contributed 24% with 41% of workforce.
Industry contributed 19% with 24% of workforce.
Service sector 57% with 35% of workforce
With relevant reasons

34. – Since 70 years of planned development, India aimed at expansion of economy through increase
in national product and employment.
During the period of 1950 -2010 GDP of India grew positively ranging between 4% to 7% and was
higher than the growth of employment. However there was always fluctuation in the growth f GDP.
During this period employment grew at a stable rate of about 2%.
During this period there was a widening gap between the growth of GDP and employment.
It means that in the Indian economy we have been able to produce more goods and services but
without generating employment. This phenomenon is referred to as jobless growth.
(Explain according to the data given in the graph)