Page 1 Sample Paper 05

Sample Paper 05
Class - 12th Exam - 2024 - 25
Economics (030)
Time : 3 Hours Max. Marks : 80
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 Type Questions of 1 mark each.
3. This paper contains 4 Short Answer Type Questions of 3 marks each to be answered in 60 to
80 words.
4. This paper contains 6 Short Answer Type Questions of 4 marks each to be answered in 80 to
100 words.
5. This paper contains 4 Long Answer Type Questions of 6 marks each to be answered in 100 to
150 words.

SECTION-A - Macro Economics

1. Read the following statements carefully:
Assertion (A): Under a flexible exchange rate system, the exchange rate is determined by the
forces of demand and supply in the foreign exchange market.
Reason (R): In a flexible exchange rate system, the central bank frequently intervenes in the
foreign exchange market to stabilize the currency.
Choose the correct option from those given below:
(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.

2. “The Ministry of Statistics and Programme Implementation reports that India’s Nominal
Gross Domestic Product (GDP) grew by 10% in the fiscal year 2022-23, while the Real GDP
increased by only 6%. This discrepancy highlights the impact of inflation on the overall price
levels of goods and services in the economy during this period.”
Source: [Ministry of Statistics and Programme Implementation, GDP Estimates 2023](http://
mospi.gov.in/gdp-estimates-2023)
Which economic indicator is used to measure the effect of price level changes on GDP in this
context?
(A) GDP at Factor Cost (B) GDP Deflator
(C) Net National Product (D) Gross Investment
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3. Money serves several crucial functions in an economy, including acting as a medium of exchange
and a ________ of value, allowing individuals to save purchasing power for future use.
Choose the correct option to fill in the blank.
(A) Store (B) Measure
(C) Unit (D) Standard

4. When aggregate demand equals aggregate supply at the level of full employment, the economy
is said to be in ________ equilibrium.
Choose the correct option to fill in the blank.
(A) Partial (B) Underemployment
(C) Overemployment (D) Full employment

5. From the given diagrams, identify the correct option that indicates the ‘Saving Curve’ passing
through the origin drawn at a particular slope.

(A) (ii) (B) (iv)

(C) (iii) (D) (i)

6. The balance of payments account that records transactions related to trade in goods and
services, income, and unilateral transfers is called the ______.
Choose the correct option to fill in the blank.
(A) Capital Account (B) Current Account
(C) Financial Account (D) Official Reserve Account

7. Read the following statements carefully:

Statement 1: The circular flow of income in a two-sector economy illustrates how households
and firms interact in product and factor markets, demonstrating that the real flow and money
flow move in opposite directions, thereby maintaining the equilibrium in the economy.
Statement 2: In the calculation of national income using the expenditure method, transfer
payments such as unemployment benefits and scholarships are included because they represent
government expenditure that stimulates economic activity.

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Page 3 Sample Paper 05

In light of the given statements, choose the correct option 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.

8. In the banking system, the Cash Reserve Ratio (CRR) is the percentage of a bank’s total
deposits that must be maintained with the central bank as reserves. A reduction in the CRR
by the central bank will _______ the ability of commercial banks to create credit in the
economy.
Choose the correct option to fill in the blank.
(A) Decrease (B) Not affect
(C) Increase (D) Eliminate

9. Read the following statements carefully:

Statement 1: Full employment refers to a situation where all available resources in the economy
are fully utilized, and there is no involuntary unemployment, implying that everyone willing to
work at the prevailing wage rate is employed.
Statement 2: Involuntary unemployment occurs when individuals are willing to work at the
current wage rate but cannot find employment due to insufficient aggregate demand in the
economy.
In light of the given statements, choose the correct option from the following:
(A) Both Statements 1 and 2 are false.
(B) Statement 1 is true and Statement 2 is false.
(C) Both Statements 1 and 2 are true.
(D) Statement 1 is false and Statement 2 is true.

10. Read the following figure carefully and choose the correct option from the alternatives given
below:

Alternatives :
(A) Real (B) Circular
(C) Nominal (D) Either (A), (B) or (C)

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Page 4 Sample Paper 05 CBSE 12th Economics

11. Explain “Bankers” bank function of the Central Bank.

O
What do you know about the following?
(a) Legal tender
(b) Fiat money
(c) High powered money

12. Read the given text carefully and answer the questions that follow:
Money was historically an emergent market phenomenon that possess intrinsic value as a
commodity; nearly all contemporary money systems are based on unbacked fiat money without
use value. Its value is consequently derived by social convention, having been declared by a
government or regulatory entity to be legal tender; that is, it must be accepted as a form of
payment within the boundaries of the country, for “all debts, public and private”, in the case
of the United States dollar. Contexts which erode public confidence, such as the circulation of
counterfeit money or domestic hyperinflation, can cause good money to lose its value.
(a) What is money?
(b) State the components of money supply.

13. Explain the ‘problem of double counting’ in the estimation of national income with the help of
an example. How can this problem be avoided?


O
What are ‘non-monetary exchanges’ ? Explain with suitable examples how they are a limitation
of the GDP as an ‘indicator of welfare’.

14. Find Gross Value Added at Market Price from the given data:
(`Lakh)
(i) Depreciation 20
(iv) Domestic sales 200
(v) Net change in stocks (—)10
(vi) Exports 10
(vii) Single use producer goods 120

15. Read the given text carefully and explain the basis of classifying taxes into direct and indirect
tax with examples.
To run a nation judiciously, the government needs to collect tax from the eligible citizens; paying
taxes to the local government is an integral part of everyone’s life, no matter where we live
in the world. Now, taxes can be collected in any form such as state taxes, central government
taxes, direct taxes, indirect taxes, and much more. For your ease, taxation is divided into two
categories, viz. direct taxes and indirect taxes. This segregation is based on how the tax is being
paid to the government.
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Page 5 Sample Paper 05

16. (a) On the basis of given figures interpret India’s performance in BoP and foreign exchange
reserve.

(b) Distinguish between depreciation of a currency and devaluation of a currency.

17. Draw a hypothetical propensity to consume curve and from it derive the propensity to save
curve. Explain the steps involved.


O
Explain the ‘Consumption Function’ with the help of a schedule and diagram.

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Page 6 Sample Paper 05 CBSE 12th Economics

Section-B - Indian Economic Development

18. Observe the image given below and choose the most appropriate option.

(A) Higher population is a bane for the country

(B) Development is sustainable when there is inter-generational consideration
(C) Growth always stimulates personal development
(D) All of the above

19. Read the following statements carefully:

Statement 1: The informal sector provides high job security and formal contracts to workers.
Statement 2: Informalisation of the workforce refers to the increasing number of workers in the
informal sector.
In light of the given statements, choose the correct option 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.

20. Read the following statements carefully: Assertion (A) and Reason (R). Choose the correct
option from those given below:
Assertion (A): Sustainable development prioritizes economic growth over environmental
concerns.
Reason (R): Sustainable development aims to meet present needs without compromising the
ability of future generations to meet their own needs.
Options:
(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.
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Page 7 Sample Paper 05

21. Compared to its neighbours, India’s economic growth has been ______ due to its ______
strategies, which include a mix of agriculture, industry, and services sectors.
Choose the correct option to fill up the blank.
(A) slower; protectionist
(B) comparable; diversified
(C) higher; monopolistic
(D) inconsistent; isolationist

22. Under colonial rule, which sector contributed the most to India’s GDP on the eve of independence?
Which of the following is/are correct ?
(i) Industrial sector
(ii) Agricultural sector
(iii) Service sector
(iv) Mining sector
Option :
(A) (i) only (B) (ii) only
(C) (iii) only (D) (iv) only

23. Which of the following was NOT a primary focus of India’s Five Year Plans between 1950 and
1990?
Which of the following is correct ?
(A) Enhancing agricultural productivity
(B) Promoting industrialization
(C) Reducing poverty and unemployment
(D) Expanding military capabilities

24. Identify which of the following statements is correct about the Liberalisation, Privatisation,
and Globalisation (LPG) policy introduced in India.
Which of the following is correct ?
(A) LPG policy aimed to increase state control over key industries.
(B) LPG policy restricted foreign direct investment in India.
(C) LPG policy involved deregulation of industries and reducing import tariffs.
(D) LPG policy focused solely on agricultural reforms.

25. Which of the following are components of human capital?

Which of the following is correct ?
(A) Physical assets and infrastructure
(B) Education and health
(C) Financial investments
(D) Natural resources

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Page 8 Sample Paper 05 CBSE 12th Economics

26. “Rural development involves improving the quality of life and economic well-being of people
living in rural areas. One of the key issues is providing adequate credit facilities to farmers,
which can help them invest in modern agricultural practices and improve productivity.”
Which institution plays a crucial role in providing credit and supporting rural development in
India?
(A) Urban cooperative banks
(B) Industrial Development Bank of India (IDBI)
(C) National Bank for Agriculture and Rural Development (NABARD)
(D) Securities and Exchange Board of India (SEBI)

27. Which of the following are key characteristics of the informal sector in India?
Which of the following is correct ?
(A) Formal employment contracts and job security
(B) Lack of social security benefits and irregular wages
(C) High levels of occupational safety
(D) Flexible working hours and informal job arrangements

28. Give the steps taken towards ‘Privatisation’ in 1991.

O
State the fiscal reforms introduced under the New Economic Policy in 1991.

29. Interpret the given picture on account of economic reforms of 1991.

30. India and Pakistan, two neighboring countries in South Asia, exhibit notable demographic
differences. India has an annual population growth rate of 1.2%, while Pakistan’s growth
rate is higher at 2.1%. This indicates that Pakistan’s population is growing at a faster pace
compared to India. In terms of sex ratio, India has 929 females per 1000 males, whereas
Pakistan has a slightly better sex ratio of 947 females per 1000 males. These statistics highlight
the demographic challenges and differences faced by the two nations.
(a) Comment upon the annual population growth rate in India and Pakistan.
(b) Comment upon the Sex Ratio in both the above countries.

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Page 9 Sample Paper 05

31. What do you mean by globalisation? Give its main features.

O
Highlight the main features of Indian economy on the eve of independence.

32. What activities you would suggest to generate employment in rural areas?

33. Read the following text carefully and answer the given questions on the basis of the same and
common understanding: People, generally are emotionally attached to their place of birth. But
millions of people leave their places of birth and residence. There could be variety of reasons.
These reasons can be put into two broad categories, i.e., push factor, these cause people to
leave their place of residence or origin; and pull factors, which attract the people from different
places.
In India, people migrate from rural to urban areas mainly due to poverty, high population
pressure on the land, lack of basic infrastructural facilities like healthcare, education, etc.
Apart from these factors, natural disasters such as flood, drought, cyclonic storms, earthquake,
tsunami, wars and local conflicts also give extra push to migrate. On the other hand, there are
pull factors which attract people from rural areas to cities. The most important pull factor for
majority of the rural migrants to urban areas is the better opportunities, availability of regular
work and relatively higher wages. Better opportunities for education, better health facilities
and sources of entertainment, etc., are also quite important pull factors.
Hence, migration is a response to the uneven distribution of opportunities over space. People
tend to move from place of low opportunity and low safety to the place of higher opportunity
and better safety. This, in turn, creates both benefits and problems for the areas, people migrate
from and migrate to. Consequences can be observed in economic, social, cultural, political and
demographic terms.
(a) Explain, why in India people mainly migrate from rural to urban areas?
(b) Explain, how expenditure on migration is a source of human capital formation?

34. Why is the world faced with an environmental crisis?

O
Provide any three suggestions to improve agricultural marketing.

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