SESSION 2020-21

FIRST TERMINAL EXAM

XII ECONOMICS
Time: 3 Hour M/M:80

General Instructions: -
• Please check that this question paper contains Thirty-fourquestions.
• All questions are compulsory.
• Question number 1-20 are very-short answer questions carrying 1 mark each.
• Question number 21-24 are short answer questions carrying 3 marks each.
• Question number 25-30 are also short answer questions carrying 4 marks
each.
• Question number 30-34 are long answers question carrying 6 marks each.

Q1. The problem of ‘ Double counting’ can be avoided by

__________________________.
(a) counting only value added.
(b) counting only value of final products.
(c ) not counting value of intermediate products.
(d) all of these.

Q2. This is a measure of how much a country can consume in a given period
of time. It measures output regardless of where that production has
taken place ( in domestic territory or abroad).
(a) GNP at market price.
(b) GNP at factor cost.
(c ) NNP at market price.
(d) NNP at factor cost.

Q3. Supply of money refers to quantity of money___________________________.

(a) as on 31st March.
(b) during any specified period of time.
(c ) as on any point of time.
(d) during a fiscal year

Q4. Repo rate is the rate at which

(a) commercial banks purchase government securities from the central
bank.
(b) commercial banks can take loan from the central bank.
(c ) commercial banks can keep their deposits with the central bank.
(d) short term loans are given by the commercial banks.

Q5. Average propensity to consume can never be zero.

(a) True
(b) False
Q6. When the consumption curve in an economy lies above 45 degree line
from origin, the value of APC is:
(a) greater than one
(b) zero
(c ) one
(d) less than one

Q7. If MPC is 0.5, what will be change in consumption, if income increases

by Rs 100 crores?
(a) 60 crores
(b) 50 crores
(c) 40 crores
(d) 70 crores

Q8. If C=100+0.75Y, then the corresponding Saving function will be

expressed as:
(a) S= 100+0.25Y
(b) S= -100+0.75Y
(c ) S= -100+0.25Y
(d) S= 75+0.25Y

Q9. Autonomous Investment Curve (when on X-axis, income is shown and on

Y-axis, autonomous investment is shown) is always
(a) a horizontal straight line
(b) negatively related to income
(c ) an upward rising straight line
(d) always equal to income

Q10. Which of the following is a capital receipt in a government budget?

(a) interest receipts on account of loans by the central government
(b) dividends and profits on investments made by the government
(c) cash grants-in-aid from foreign countries and international
organisations
(d) none of the above

Q11. Identify the tax whose burden can’t be shifted.

(a) GST
(b) income tax
(c ) sales tax
(d) VAT

Q12. Which of the following statement is true for fiscal deficit?

(a) represents the borrowings of the government.
(b) is the difference between total expenditure and total receipts of the
government
 (c ) is the difference between total expenditure and total receipts other
than borrowings
(d) increases the future liabilities of the government

Q13. _____________________________ is said to occur, when the government

increases the exchange rate in a fixed exchange rate system.

Q14. Price of one currency in relation to foreign currency is determined by

forces of demand and supply is known as
_________________________________.

Q.15 Occasional intervention by the central bank of influence the exchange

rate is known as:
(a) Managed floating (b) Hedging
(c) Appreciation (d) Depreciation

Q.16 Arrange the following events of India before the independence in

chronological order:
(i) The opening of the Suez Canal
(ii) Introduction of the railways
(iii) Second stage of demographic transition
(iv) Incorporation of the Tata Iron and Steel Company

Q.17 India’s demographic condition on the eve of independence was

characterized by:
(a) High level of literacy, high mortality rates, high life expectancy and
high level of poverty.
(b) Low level of literacy, low mortality rates, low life expectancy and
Low level of poverty.
(c) Low level of literacy, low mortality rates, high life expectancy and
high level of poverty.
(d) Low level of literacy, high mortality rates, low life expectancy and
high level of poverty.

Q.18 The country’s growth rate of aggregate real output during the first half of
the twentieth century was only
(i) _________________ and per capita real output was (ii) ________________

Q.19 Schedule ____________ comprise of industries which would be exclusively

owned by the state:
(a) A (b) B
(c) C (d) None of these

Q.20 When was the Planning Commission set up?

(a) 1947 (b) 1948
(c) 1949 (d) 1950
Q.21 Explain Demographic profile of India at the time of Independence.

Q.22 (i) What will be the effect on exports of India due to depreciation of
Indian currency.
(ii) What will be the effect on imports of India due to depreciation of
Indian currency.
(iii) What will be the effect on exports and imports of India due to
appreciation of Indian currency.

Q.23 Calculate ‘Sales’ from the following:

S. Items (`)
No.
(i) Subsidies 200
(ii) Opening stock 100
(iii) Closing stock 600
(iv) Intermediate consumption 3000
(v) Consumption of fixed capital 700
(vi) Profit 750
(vii) Net value added at factor cost 2000
(viii) Exports 100

Q.24 From the following data about a government budget find (a) Fiscal deficit
and (b) Primary deficit:
S. Particulars (` in crore)
No.
(i) Tax revenue 1,000
(ii) Revenue deficit 775
(iii) Interest receipts by the government on net domestic
lending 400
(iv) Recovery of loans 135
(v) Capital expenditure 575
(vi) Proceeds from sale of shares in PSUs 100
(vii) Interest payments on accumulated debts 1,000

Q.25 Explain policies for growth of Agriculture.

Q.26 Explain the concept of investment multiplier.

Q.27 Identify the following as revenue expenditure/ receipt or capital

expenditure/ receipt. Give reasons.
(i) Salary paid to Army officers.
(ii) 10% shares purchased by the Government in a private company.
(iii) Expenditure on construction of Metro Rail.
(iv) Grants given by central government to state government.
Q.28 Explain difference between Balance of trade and Balance of payments.

Q.29 Are following included in domestic income? Give reasons.

(i) Salaries to Russian residents working in Indian embassy in
Russia.
(ii) Rent received by an Indian from his building in London.
(iii) Family members working free on the farm owned by the family.
(iv) Payment of interest on borrowings by general government.

Q.30 Explain money creation/ credit creation/ credit multiplier.

Q.31 The saving function of an economy is given as: S = - 250 +0.25Y

If the planned investment is `2,000 crore, calculate the following:
(a) Equilibrium level of income in the economy.
(b) Aggregate demand at income of `5,000 crore.

Q.32 What was the condition of agriculture at the time of independence?

Q.33 Explain criticism of industrial and trade policies of first seven plans.

Q.34 Calculate national income by (a) Income method and (b) Expenditure
method.
S. Particulars (` in crore)
No.
(i) Rent 50
(ii) Net factor income from abroad 5
(iii) Compensation of employees 500
(iv) Indirect taxes 100
(v) Government final consumption expenditure 120
(vi) Subsidies 30
(vii) Royalty 20
(viii) Net exports (-) 20
(ix) Interest 40
(x) Corporate tax 20
(xi) Profit after tax 100
(xii) Private final consumption expenditure 630
(xiii) Change in stocks 10
(xiv) Net domestic fixed capital formation 60