DELHI PUBLIC SCHOOL, SAIL TOWNSHIP, RANCHI

CLASS XII
PRACTICE PAPER
ECONOMICS

TIME 3HRS TOTAL MARKS - 80

1. Read the following statements, assertion a and reason are. Choose the correct option from
those given below.
Assertion(A): Deficient demand in an economy is solely caused by a decrease in propensity to
consume.
Reason (R ): Factors such as higher taxes, reduced government expenditure, lower investment
increased imports and decreased exports.Collectively contribute to a decrease in aggregate
demand leading to deficient demand in the economy. [1]

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 ) is not the correct explanation of Assertion (A).
(c ) Assertion (A) is true but Reason (R ) is false.
(d) Assertion (A) is false and Reason (R ) is true.

2. “The Government of a developing country is implementing a major infrastructure project to

improve transportation networks across the country.The project involves the construction of new
highways, bridges and public transportation systems to enhance connectivity and facilitate
economic growth.”

In the above paragraph which type of expendi terrace focused for economic growth?
(a) Revenue (b) Capital
(c) Financial (d) Economical [1]

3. GNP FC is equals to. NNP FC when

(a) Net factor income from abroad is zero.
(b) Net indirect tax is zero.
(c ) Consumption of fixed capital is zero.
(d) All of the above are zero. [1]

4. Suppose the price of one UK Pound has increased from Rs 70 to Rs 80 owing to market
forces .This means that value of Indian currency (Rs) has ____.
(a) Appreciated (b)Depreciated
(c) Revalued (d)Devalued [1]
5. From the trip given to gram identify the break even point

(a) Point B (b) Point A [1]

(c) Both (a) and (b) (d)Neither (a) nor (b)
6. “In the annual budget 2022- 23, the Government of India set up disinvestment targets of Rs
65,000 crore.”
Such proceeds from disinvestment can be classified as________ receipts in the government
budget as it leads to ______of the Government .
(a)Capital ,Decrease in assets.
(b) Revenue, Increase in assets
(c )Capital, Increase in liabilities
(d) Revenue, Decrease in liabilities. [1]
7. Read the following statements carefully:

Statement 1: In a two sector economy consumption expenditure and investment expenditure are
the two components of aggregate demand.
Statement 2: Aggregate demand curve always starts from point of origin with positive slope.

In the 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. [1]
8. _______ refers to a situation when AD is equal to AS beyond the full employment level.
(a) Full employment equilibrium.
(b) Over full employment equilibrium.
(c) Underemployment equilibrium.
(d) None of these.

9. Read the following statements carefully:

Statement 1: Recovery of loans is a non debt creating capital receipt.
Statement 2: Recovery of loans causes a reduction in assets of the government..
In the 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.

10. Based on the given diagram

The export and import in the month of August
in 2024 reflects a_____ of USD ____ billion.
(Choose the correct option to fill up the blank)
(a)Deficit,29.65 (b)Surplus,29.65
(c )Deficit,24.02 (d)Surplus,24.02

11.(a) On the basis of the given data estimate the value of Net National Product at factor cost
(NNP FC) using the following
information. [3]

Items Rs (in crore)

(i)Household consumption expenditure 1,200

(ii)Business fixed investment 800

expenditure

(iii)Government final consumption 500

expenditure

(iv)Excess of Imports over Exports 100

(v)Net Indirect Taxes 150

(vi)Change in inventory (-)50

(vii)Consumption of fixed capital 200

(viii)Net Factor Income from Abroad 80

(ix)Public Fixed Investment 70

OR
(b) State the steps pertaining to the estimation of National Income under the value added
method. [3]

12. “Through its budgetary policy, government allocates resources in accordance with the
requirements of the country.”
Justify the statement with valid reasons. [3]

13.(i)”Trade deficit must exist if a country is facing a situation of current account deficit.”Defend
or refute the statement with valid arguement. [3]
(ii) State the meaning of balance of trade. [1]
14. “Consumption and savings curves compliment each other.”Do you agree with the
statement?Explain with valid reasons. [4]
15. “An economy facing unintended accumulation of inventories would try to reduce
aggregate demand” do you agree with the statement?Support your answer with valid
reasons. [4]
16. Read the following text carefully
The reserve bank of india's monetary policy dilemma:
The Reserve Bank of India is facing a challenging situation as it strives to strike a balance
between controlling inflation and promoting economic growth.In recent months India has
experienced a surge in inflation due to rising food and fuel prices while economic growth
remains sluggish.
The RBI must formulate an effective monetary policy response to address these competing
priorities.Amidst the inflationary pressures, the RBI is under pressure to raise interest rates to
curb inflation and stabilize prices.However , raising interest rates could dampen investment and
consumption further slowing down economic growth.
The RBI must formulate an effective monetary policy response to address these competing
priorities. Amidst the inflationary pressures, the RBI is under pressure to raise interest rates to
curb inflation and stabilize prices. However, raising interest rates could dampen investment and
consumption, further slowing down economic growth.
On the other hand keeping interest rates low to stimulate growth may exacerbate inflationary
pressures. Additionally, the RBI is grappling with external factors such as volatile global oil
prices and uncertainty in global financial markets. Fluctuations in oil prices could impact India's
import bill and current account deficit. Putting further strain on the economy.
The RBI faces challenges in communicating. Its monetary policy decisions effectively to the
public and financial markets. Clear communication is essential to managing expectations and
maintaining credibility, but conveying complex economic concepts in a way that is accessible to
the general public can be daunting task. As the RBI navigate these complexities, it must
carefully weigh. the trade-offs between inflation control and economic growth. Considering both
short-term challenges and long-term objectives for Sustainable development.
(i) Growth of Indian economy requires investment in this context how Reserve Bank of India
Can use the instrument of cash reserve ratio? [2]
(ii)Discuss the dilemma Reserve Bank of India faces in implementing the monetary policies.
. [4]
17.(a) Suppose only one good ‘X’ is produced in the country. Output of good X during year 2018
and 2019 were 100 units and 110 units respectively. The market price of the product during the
2 years was ₹50, and ₹55 per unit respectively. Calculate the percentage change in Real Gross
Domestic Product in year 2019 using 2018 as the base year. [3]

(b) Management of a water polluting oil refinery says that it ensures welfare through its
contribution to gross domestic product defend or refute the argument of management with
respect to GDP as a welfare measure of the economy. [3]
OR
19.Statement 1:Commercialisation of agriculture was coercively introduced by the Britishers.
Statement 2:The aim of commercialisation of agriculture was to support the British Industries.
20.Assertion(A):Human capital is not traded in the market ,however its services are traded.
Reason(R): Human capital is intangible in nature.
21.After independence ,in order to bring equity in agriculture, land reforms/policies were
introduced by the government that includes_________.(i)Abolition of zamindari system(ii)Green
Revolution(iii)Land Ceiling. Alternatives
(a)Only (i)
(b)Only (ii)
(c) Both (i) and (ii)
(d) (i),(ii),(iii)
22.Which of the following highlights the role of Information Technology(IT) in Rural
development? (i)It helps in achieving sustainable development (ii)It helps in attainment of food
security(iii)It disseminates information regarding information regarding emerging technology.
(a)Only (i)
(b)Only (iii)
(c)(i) and (iii)
(d)(i) ,(ii) and (iii)
23._________was the predecessor organisation to World Trade Organisation(WTO).
(a)international Bank for Reconstruction and Development.
(b)International Monetary Fund(IMF) (c)Reserve Bank of India
(d)General Agreement on Tariffs and Trade.
24.__________acts as a measure of the extent of Democratic participation in social and political
decision making.
(a)Human Development Index
(b)Liberty Indicator
(c)Economic Growth
(d)Poverty Index
25.According to Herman Daly (an environmentalist)which of the following is not an essential
step towards achieving sustainable development?
(a)Limiting human population to carrying capacity of the environment
(b)Input inefficient technological progress
(c)Rate of extraction of renewable resources should not exceed rate of regeneration
(d)Correction of inefficiencies arising of pollution,
26.The percentage of female workforce is lower in urban areas because:
(a)Female education in India is still a far cry
(b)Females in urban areas does not prefer to take jobs
(c)Job work women is governed by family decisions
(d)Both (a)and (c)
27.Which of the following statements highlight the glaring deficiencies of rural banking system?
(a)Institutional credit has invariably been tied to collateral
(b)Laxity in recovery of loans, owing to political reasons
(c)Both (a) and (b)
(d)None of these
28.Critically appraise the Industrial growth that took place during the Economic policy [3]
reform 1991.
OR

29. “In the late 1970s, China introduced the One child policy that led to arrest in the population,
coupled with skewed sex ratio.”Justify the given statement with valid arguments in support of
your answer. [3]

30.” All the three countries, India, Pakistan and China have mainly many similarities in their
developmental strategies. Till 1980s, all the three countries had similar growth rates and per
capita incomes.” Evaluate any two factors those led to rapid growth in economic development in
china . [4]

31.(a) The 2023 G20 summit delivered a series of key commitments underscoring the urgency
and gravity of addressing climate change.The commitments collectively represent a significant
step towards a sustainable and climate resilient future.

In the light of the above statements depict two reasons for this climate change in India and
suggest the solutions to overcome these problems. [4]
OR
(b) Keeping in view the present scenario what should be the objectives of education in india?
[4]

32.Identify the picture below.Discuss its importance in rural development. [1+3]

.
33. Read the following text carefully.
Although not a surprise, the pandemic has aggravated the situation of unemployment in India
significantly.The Indian economy continues to wriggle out of the hands of unemployment since
March 2022, when all economic activities came to a standstill. According to the Centre for
Monitoring Indian Economy (CMIE) the unemployment rate in India as of June 2021 stands at
12.8%. In March 2021, the unemployment rates were 6.5% from where they rose to 8% by April
2021. To understand the graveness of the issue, one must understand that the rate of
unemployment in India during 2018 was only 6.1%. India's economy was already slowing down
before the pandemic and the worst came along with the lockdown. India's unemployment rate
stood by 7.8% for the week ended November 2022, and the labor participation rate at 39.3%,
resulting in a sharp fall in employment rate at 36.24%.While this is a sign of weakening labor
markets over the last 4 weeks ,it also reflects the inability of the labor markets to absorb
adequate proportions of the working age population during the festive season of 2020.
(a)Define unemployment. [1]
(b)What are the causes of unemployment in India? [3]
(c )Suggest any two measures to generate women employment in India? [2]
34.(a) ‘Atmanirbhar Bharat’ had been the roots of the Indian planning process in the form of
‘selfreliance’ as an objective of the planning process.Do you agree with this given
statement?Justify the rationale of the given statement. [4]
(b)’Land ceiling promotes equity Support the given statement with valid explanation.
OR
(c ) Restrictive policies of commodity production, trade and tariff pursued by the British
government negatively affected india's foreign trade during the colonial period. Explain the
impact of the indicated situation on the structure ,composition and the volume of india's foreign
trade. [3]
(d) Discuss the main causes of india agricultural stagnation during the colonial period.
[3]