DOON PUBLIC SCHOOL, HATHRAS
PRE-BOARD II EXAMINATION / 2024-25/ SET 1I
CLASS: XII
SUBJECT: ECONOMICS (030)
Time – 3 hrs. M.M: 80
Instructions:
(i) This question paper contains 5 pages with 34 questions. All questions are compulsory.
(ii) This question paper contains two Sections :
Section A Macro Economics
Section B Indian Economic Development
(iii) This paper contains 20 Multiple Choice Questions Type questions of 1 mark each.
(iv) This paper contains 4 Short Answer Questions Type-I questions of 3 marks each to be answered in 60 to 80
words.
(v) This paper contains 6 Short Answer Questions Type-II questions of 4 marks each to be answered in 80 to
100 words .
(vi) This paper contains 4 Long Answer Questions Type questions of 6 marks each to be answered in 100 to 150
words.
(vii) Attempt all parts of a question together.
Name: Roll No: Date:
SECTION A/ MACROECONOMICS
1. Read the following statements carefully :
Statement 1 : Savings function can be derived from Consumption function..
Statement 2 : Consumption curve must always start from the point of origin.
In light of the given statements, choose the correct alternative from the following : 1
(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.
2. Identify, flow variable from the following : (Choose the correct alternative) 1
(a) Distance between Delhi and Amritsar
(b) Annual expenditure of a school
(c) Bank balance of Mr. Mukesh as on 31st March, 2022
(d) Investments of Mr. Mohit as on 31st December, 2021
3. Identify, which of the following is not a function of the Reserve Bank of India. (Choose the correct
alternative) 1
(a) Controller of money supply
(b) Credit provider to commercial banks
(c) Central agency preparing the annual budget of the Government
(d) Issuer of currency
4. Read the following statements carefully : 1
Statement 1 : Import of gold from Dubai will be recorded on the debit side of the current account in
Balance of Payments of India.
Statement 2 : Outflow of Foreign Institutional Investment (FII) from Indian stock markets will be
recorded on the credit side of the capital account..
In light of the given statements, choose the correct alternative from the following :
(a) Statement 1 is true and Statement 2 is false.
1
(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.
5 If in an economy, the value of Investment Multiplier is 5 and dissavings are (-)100 crore, the relevant
savings at income level of ₹ 1,400 crore would be ₹ ________ crore. (Choose the correct alternative
to fill up the blank) 1
(a) 80 (b) 180
(c) 140 (d) 240
6. The range of value of Investment Multiplier is always between _____ and ______. (Choose the
correct alternative to fill up the blanks) 1
(a) zero (0), infinity (∞) (b) one (+ 1), infinity (∞)
(c) zero (0), one (+ 1) (d) minus one ( 1), plus one (+ 1)
7. If the central bank wants to reduce money supply in the economy, it may ___________. (Choose the
correct alternative to fill up the blank) 1
(i) increase Bank Rate
(ii) reduce Cash Reserve Ratio
(iii) sell securities in the open market
(iv) buy securities in the open market
Alternatives :
(a) (i) and (iii) (b) (ii), (iii) and (iv)
(c) (i), (iii) and (iv) (d) (i), (ii), (iii) and (iv)
8. Identify, which of the following is not a source of supply of foreign exchange for India. (Choose the
correct alternative) 1
(a) Exports of goods and services abroad
(b) Remittances by Indian workers working abroad
(c) Imports of goods and services from abroad
(d) Foreign Direct Investment (FDI) by a German automobile Manufacturer
Read the following statements : Assertion (A) and Reason (R). Choose the correct alternative
given below:(Q. 9 to 10)
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 notthe correct explanation of the
Assertion
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.
9. Assertion (A) : Ex-ante savings and Ex-ante investments are never equal to each other. 1
Reason (R) : At equilibrium level of income, aggregate demand may not be equal to the aggregate
supply.
10. Assertion (A) : The value of Average Propensity to Consume (APC) can never be zero or negative.
Reason (R) : Average Propensity to Consume (APC) is independent of the level of income. 1
11. Differentiate between Value of Output and Value Added . . 3
2
12. Discuss briefly the determination of exchange rate under the flexible exchange rate system. 3
OR
Differentiate between Surplus in Balance of Trade and Current Account Surplus. 3
13. Suppose consumption function for an economy is C = 100 + 0•75 Y (where C = consumption
function and Y = national income) and the investment expenditure is ₹ 200 crore. Estimate the
following : 2+2=4
(a) Equilibrium level of income
(b) Values of consumption and saving at equilibrium level of income
14. Suppose an imaginary economy is facing a situation of deficient demand in the short run time period.
Discuss briefly, the probable impacts of the same on the economy. 4
15. Using a suitable numerical example, explain the credit creation process of the banking system, in a
hypothetical economy. 4
16. (i) Two friends, Deepak and Krish were discussing the impact of increase in GST rates on luxury
items, as recently undertaken by the Government. Krish was of the view that most of the luxury
items (like foreign travel, imported cigarettes, etc.) should be taxed exorbitantly, while the items
related to daily consumption of poor and middle class should be tax-free. Identify and explain the
objective of the Government budget Krish is suggesting. 4
(ii) State any two examples of non-tax receipts of the Government. 2
17. Read the following text carefully :
In India, after Covid-19 period, household and private sector consumption, as measured by Private
Final Consumption Expenditure (PFCE), was < 39•7 trillion in nominal terms in Q1 FY23, compared
with < 28•4 trillion for the same period last year, and < 39•2 trillion in the fourth quarter (Q4) of
2021 22 (FY22). As a percentage of Nominal GDP, PFCE was 61•1 per cent, compared with 55•5
per cent in Q1 FY22. However, in real terms at constant prices, PFCE grew just 9•88
percent,compared with Q1 of 2019 20 the year before the Covid-19 pandemic.
"Recovery in domestic demand is reflected in the growth rates of PFCE and Gross Fixed Capital
Formation (GFCF) over the corresponding quarter of the previous year," said D.K. Srivastava.
GFCF came in at 19 trillion in Q1 FY23, compared with 14.4 trillion in Q1 FY22. However, it was
slightly lower than 20.2 trillion in Q4 FY22.In the media briefing after the GDP numbers, Finance
Secretary T.V. Somanathan said this trend was expected as GFCF in present Q1 was usually
lower than the previous year's Q4.
On the basis of the given text and common understanding, answer the following questions:
(a) Compare and analyse the trends of change in PFCE as a percentage of GDP, both in real and
nominal terms 4
(b) "Private Final Consumption Expenditure is an important factor determining Gross Domestic
Product at Market Price." Justify the given statement. 2
SECTION B
Indian Economic Development
18. In a __________ economy, resources are owned and operated by both public and private sectors.
(Choose the correct alternative to fill up the blank) 1
(a) Socialist (b) Capitalist
(c) Democratic (d) Mixed
3
19. Identify the correct alternative with reference to the following statement : 1
“ Between 1966-76, Mao introduced this movement under which professionals and students were asked to
work and learn from real life situations prevailing in the countryside of China.
(a) Commune System (b) Great Leap Forward
(c) Open Door Policy (d) Great Proletarian Cultural Revolution
20. Micro credit programmes play a vital role in ensuring an overall development of the rural economy as they
____________. (Choose the correct alternative to fill up the blank) 1
(i) provide financial support
(ii) lead to women empowerment
(iii) enhance the reach of formal credit system
Alternatives :
(a) Only (i) and (ii) (b) Only (ii) and (iii)
(c) Only (i) and (iii) (d) (i), (ii) and (iii)
21. __________ markets were organised to protect the farmers from malpractices in mandis. (Choose the correct
alternative to fill up the blank) 1
(a) Regulated (b) Periodic
(c) Daily (d) Weekly
22. Multiple reasons for economic slowdown and re-emergence of poverty in Pakistan may be enumerated
Identify which of the following might not be one of them. 1
(i) Rising dependence on foreign loans
(ii) Stable macroeconomic indicators
(iii) Unstable agricultural growth
Alternatives :
(a) (i), (ii) and (iii) (b) (ii) and (iii)
(c) (i) and (iii) (d) Only (ii)
Read the following statements carefully : (Q. 23 to 24 )
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.
23. Statement 1 : Lower child mortality rate is a better indicator of gender equality. 1
Statement 2 : Preference for a male child exists in India, Pakistan and China.
24. Statement 1 : Government can try to reduce unemployment through special poverty removal programmes..
Statement 2 : India provides fair constitutional protection to its citizens. 1
25. Identify which of the following does not reflect a direct relationship between human capital formation and
economic growth. 1
(a) Employability of an educated person is higher than that of an uneducated person.
(b) On-the-job training will reduce the skills of labour.
(c) Healthy workforce is a boon to the economy.
(d) Digital information helps in taking real time decisions.
Read the following statements : Assertion (A) and Reason (R). Choose the correct alternative given
below. (Q. 26 to 27)
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 notthe correct explanation of the Assertion
(c) Assertion (A) is true, but Reaso n (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.
4
26. Assertion (A) : The nature of unemployment problem in India is multi-faceted. 1
Reason (R) : Worker-Population ratio is an indicator used for analysing the employment situation in a
country.
27. Assertion (A) : Post independence, public sector was given a prominent role, due to requirement of huge
investments in the secondary sector. 1
Reason (R) : Industrial sector is the backbone of any economy..
28. Define worker-population ratio and give its significance. 3
29. Elaborate how a well-structured 'Agricultural Marketing System' helps the farmers to increase their income.
3
30. Discuss any two liberalisation measures pertaining to the financial sector, introduced by the Government of
India during the economic reform process of 1991. 4
31. Read the following schedule carefully :
Analyse the output growth trend in the three sectors over the given years between India and China. 4
32. "Many economists believe that the economic reforms process of 1991 had adversely affected the agricultural
sector." Do you agree with the given statement? Quote valid arguments in favour of your answer. 4
33. (i) Explain the role of education in the economic development of the nation. 4
(ii) State the importance of rural banking in an economy like India. 2
34. Read the following text carefully :
With independence, India chose the closed economy model in pursuit of its objective of industrial self-
sufficiency. As a result, industrial structure has become considerably important. In the post-independence era,
the industrial growth was rapid during the first two decades, especially during the Second and Third Plan
period. The Second Plan introduced Industrial Revolution in the country. The main reasons for high industrial
growth witnessed during this period were due to :
(i) Emphasis on industrialisation in economic policies.
(ii) Making industrial growth the main objective in the industrial policy and planning.
(iii) Huge investments being made to support capacity creation in the industrial sector.
(iv) Growing demands for a variety of new products on the part of the urban consumers and the relatively
better-off sections of the society.
(v) Pace of economic expansion supported by domestic savings and inflow of resources from abroad.
On the basis of the given text and common understanding, answer the following questions :
(a) State the time period of the Second Five Year Plan of India. 1
(b) Who is considered as the Father of the Second Five Year Plan of India ? 1
(c) Discuss briefly any two reasons behind the industrial growth during the Second and Third Five Year Plans
of India. 4
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