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BRIGHT RIDERS SCHOOL, ABU DHABI

PRACTICE PAPER-3 (2024-25)
CLASS: XII

DATE: MAX. MARKS: 80

SUBJECT: ECONOMICS TIME ALLOWED: 3 HRS

General Instructions:
 Please check that this question paper contains 10 printed pages.
 Please check that this question paper contains 34 questions.
 All questions are compulsory.
 Marks for each question are indicated against it.
 This question paper contains two sections:
 Section A – Macro Economics, Section B – Indian Economic Development
 This paper contains 20 Multiple Choice Questions type questions of 1 mark each.
 This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered
in 60 to 80 words.
 This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered
in 80 to 100 words.
 This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered
in 100 to 150 words.
Answer the following questions:
SECTION A – MACRO ECONOMICS

1. Increase in Real Gross Domestic Product (GDP) implies _____________ in the

economy. (Choose the correct alternative to fill up the blank) (1)
(a) increase in the level of income
(b) increase in the general price level
(c) increase in flow of goods and services
(d) decrease in aggregate demand

2. Read the following statements carefully:

Statement 1: Tax is a legally compulsory payment.
Statement 2: Direct taxes are capital receipts of the government.
In light of the given statements, choose the correct alternative from the following: (1)
(a) Both Statements 1 and 2 are true.
(b) Both Statements 1 and 2 are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 1 is false and Statement 2 is true..

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3. Balance of Payments deficit is the excess of ____________. (Choose the correct alternative to fill
up the blank) (1)
(a) Current Account Payment over Current Account Receipts
(b) Capital Account Payment over Capital Account Receipts
(c) Autonomous Payments over Autonomous Receipts
(d) Accommodating Payments over Accommodating Receipts

4. Read the following statements: Assertion (A) and Reason (R). Choose the correct
alternative from those given below:
Assertion (A): Recovery of loans is a revenue receipt for the government.
Reason (R): Recovery of loans leads to decline in financial assets of the government.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of the Assertion (A).
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of the Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.: (1)

5. If a country exports goods worth ₹ 600 crore and imports goods worth ₹ 450 crore, the
value of Balance of Trade of the country would be in ____________. (Choose the correct alternative
to fill up the blank) (1)

(a) deficit of ₹ 150 crore (b) surplus of ₹ 150 crore

(c) deficit of ₹ 1,150 crore (d) surplus of ₹ 1,150 crore
6. A tax whose burden cannot be shifted to others is imposed generally on_________.
(Choose the correct alternative to fill up the blank) (1)
(a) producer of goods
(b) seller of goods
(c) buyer of goods
(d) income earners:

7. In the given figure, what does the gap ‘EF’ represent? (Choose the correct alternative): (1)

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 (a) Deflationary gap
(b) Inflationary gap
(c) Excess demand
(d) Full employment equilibrium

8. In order of encourage investments in the economy, the Central Bank may _________. (Choose the
correct alternative to fill up the blank) (1)
(a) reduce Cash Reserve Ratio
(b) increase Cash Reserve Ratio
(c) increase Bank Rate
(d) sell off government securities in open market

9. Average Propensity to Consume refers to ____________. (Choose the correct alternative to fill up
the blank) (1)
(a) level of income at which savings are equal to income
(b) additional income that is not saved
(c) ratio of savings to the income
(d) ratio of consumption to the income:

10. Read the following statements carefully: (1)

Statement 1 : Ex-ante savings represent value of planned savings.
Statement 2 : Savings are directly related to the level of national income.
In light of the given statements, choose the correct alternative from following:
(a) Both Statements 1 and 2 are true.
(b) Both Statements 1 and 2 are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 1 is false and Statement 2 is true.:

11. Suppose in an imaginary economy, Gross Domestic Product (GDP) at market price in 2019-20
was ₹ 5,000 crore, National Income was ₹ 3,500 crore, Net Factor Income paid by the economy
to rest of the world was ₹ 450 crore and the Net Indirect Taxes was ₹ 400 crore. Estimate the value
of consumption of fixed capital for the economy from the information given above. (3)
OR
State any three precautions that are taken while estimating national income by
production method.

12. From the following data, calculate Revenue deficit and Primary deficit: (3)

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13. State the meaning of the following: (4)
(i) Investment multiplier
(ii) Full employment
OR
Describe the adjustment mechanism, if ex-ante aggregate demand (AD) is less than ex-ante
aggregate supply (AS).

14. From the following data about an economy, calculate: (a) Equilibrium level of national income (b)
Total consumption expenditure at equilibrium level of national income (i) C = 200 + 0.75 Y, where
C = Consumption, Y = Income (ii) Investment expenditure (I0) = ₹ 4,000 crore. (4)

15. Explain two sources of supply of foreign exchange. (4)

16. Answer the following questions: (2+4)

(a) State the meaning of domestic income.

(b) Discuss briefly how distribution of income affects the welfare of an economy.
OR
(a) From the following data show that, Net Value Added at factor cost (NVAFC) is equal
to the sum of factor income:

17. Answer the following: (3+3)

(i) “As per announcement made by the Governor of Reserve Bank of India (RBI) on May 4, 2022, it
has been decided to increase the Cash Reserve Ratio (CRR) by 50 basis points from 4% to 4.5%.”
Analyse the impact of this step of RBI on total credit creation in the economy.

(ii) Explain the ‘Store of Value’ function of money.

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 SECTION B – INDIAN ECONOMIC DEVELOPMENT

18. Read the following statements carefully:

Statement 1: Economic reforms of 1991 created a growth path for all the sectors simultaneously.
Statement 2: Economic reforms of 1991 ensured accelerated growth rate in agriculture
sector.
In light of the given statements, choose the correct alternative 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)

19. An arrangement in which a worker uses his own resources to make a living is known as __________
employment. (Choose the correct alternative to fill up the blank) (1)
(a) Self (b) Regular-salaried
(c) Casual (d) Wage

20. Which of the following is not the feature of economic policies pursued under economic planning
of India till 1991? (1)
(a) Import substitution
(b) Self-reliance
(c) Unrestricted flow of foreign capital
(d) Land reforms

21. The Government of India enacted the ‘Right to Education’ as a fundamental right for all children in
the age group of _________ years.
(Choose the correct alternative to fill up the blank)
(a) 6-14 (b) 6-12
(c) 5-13 (d) 5-14
(1)

22. Read the following statements carefully: (1)

Statement 1: Human capital benefits only individuals and not the society.
Statement 2: There are positive externalities of investment in human capital as
society.
In the light of the given statements, choose the correct alternative 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.

23. “In order to reduce over-dependence on agriculture sector, it is necessary to opt for
diversification.” With reference to the given statement, diversification includes ________.
(Choose the correct alternative to fill up the blank) (1)
(i) Change in cropping pattern
(ii) Shift of workforce to agriculture allied activities
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 (iii) Shift of workforce to non-agriculture sector
Alternatives :
(a) (i) and (ii) (b) (i), (ii) and (iii)
(c) (i) and (iii) (d) Only (i):

24. Read the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives
given below: (1)
Assertion (A): China has the highest life expectancy in the world.
Reason (R): Maternal Mortality Rate of India is higher than that of China.
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) are true 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 but Reason (R) is true.

25. In the 1970s, Pakistan nationalised the industries related to ____________ goods. (Choose the
correct alternative to fill up the blank)
(a) Consumer
(b) Sports
(c) Capital
(d) Defence: (1)

26. India is not a member of which of the following regional/global economic groups? (Choose the
correct alternative) (1)
(a) SAARC (b) BRICS
(c) G-7 \(d) G-20

27. In terms of the sectoral contribution to Gross Domestic Product (GDP), economy of
India is relying more on _________ sector. (Choose the correct alternative to fill up the blank)
(a) Primary (b) Secondary
(c) Tertiary (d) Financial (1)

28. Elaborate any two ill-effects of Deforestation as depicted in the given picture. (3)

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29. “Casual workers often work in very poor working conditions.” Justify the given statement.
Elaborate (3)
OR
State and discuss any two obstacles that hinder the mechanism of agricultural marketing.

30. Explain how ‘expenditure on information’ and ‘expenditure on migration’ acts as a source of human
capital formation. (4)
OR

Explain any two objectives behind providing more and more institutional credit to farmers.

31. “Post-1947 India and Pakistan adopted similar developmental strategies for their respective
development paths. Do you agree with the given statement? Give valid reason for your answer.
trend of the workforce on the basis of industry and residence. (4)

32. “Despite being the main occupation of about 85% of the country's population during British rule,
agricultural sector continued to experience stagnation” Briefly explain any two reasons responsible
for the backwardness of Indian agriculture on the eve of independence.

33. Answer the following (3+3)

(i) Distinguish between ‘Green Revolution’ and ‘Golden Revolution’.
(ii) State any three limitations of organic farming.
34. Read the following text carefully and answer the given questions on the basis of the same and
common understanding:
Goods and Service Tax collections rose almost 20% in April 2022 to reach a fresh high of nearly ₹
1.7 lakh crore, pointing to a continued buoyancy in revenue due to higher economic activity and
tighter regulation. For the first time gross GST collection has crossed the ₹ 1.5 lakh crore mark.
Total number of e-way bills generated in the month of March 2022 was ₹ 7.7 crore, which is 13%
higher than ₹ 6.8 crore e-way bills generated in the month of February 2022, which reflects recovery
of business activity at a faster pace. During April 2022, ₹ 1.1 crore GST returns were filed. The
filing percentage for GSTR 3B in April 2022 was 84.7% as compared to 78.3% in April 2021.

(i) “Goods and Services Tax (GST) is a comprehensive indirect tax”. Elucidate.

(ii) “Buoyancy in revenue reflected recovery of business activities at a faster pace.” Justify the
given statement with a valid explanation.
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