Economics Study Material KV Bhandara Aug 2018 PDF

List of participants in the two day work shop for pgt economics (kvs mumbai region)
Date:3rd and 4th august 2018
COURSE DIRECTOR: SHRI MAHIPAL SINGH,PRINCIPAL, KV BANDHARA.
नाम पदनाम के वि के नाम

श्रीमती गीता आर के वि आरएचई,पुणे
श्री कै लाि वगरी बीईजी, पुणे
श्रीमती अनुपमा वतिारी स्नातकोत्तर विक्षक भाांडुप, मुांबई
(अथथिास्त्र)
सुश्री सान्या सचदेिा आयएनएस माांडिी, गोिा
श्री वनविल कु मार एसएम लाईन कामठी
श्री अांककत कु मार एनएडी , करां जा
श्री जयमाल ससह डीआईएटी वगरीनगर, पुणे
श्री अरसिद उराडे िीएसएन नागपुर
कु मारी रािी एनडीए, िड़किासला,पुणे
श्री सांदीप अिीकर नां 1 िायुसेना कें द्र, लोहगाि,पुणे
श्रीमती वस्नग्धा वमश्रा सीएमई, पुणे
श्रीमती अनीता नवजया गणेिसिड, पुणे
श्रीमती कनक यादि एमआयआरसी,अहमदनगर
श्री पी पासिान नां 2 कु लाबा, मुांबई
श्रीमती अमृता गुवलया िायुसेना कें द्र, ठाणे
डॉ रवमम कालड़ा मानिुद,थ मुांबई
श्रीमती समता ससह नां 2 िायुसेना कें द्र, लोहगाि,पुणे
श्रीमती रीना पालीिाल कोलीिाड़ा,मुांबई
श्रीमती सीमा वमश्रा आईआईटी,पिई,मुांबई
RD
GROUP FORMED FOR THE WORKSHOP (3 AUGUST 2018)
NOTE: THE TOPICS OF BOTH MICRO ECONOMICS AND MACRO ECONOMICS WILL BE DEALT WITH A STRESS ON TEECHINIQUES
USED BY THE TEACHERS IN THE CLASSES TO MAKE THE TOPICS SCORING CATERING TO THE NEEDS OFBRIGHT, AVERAGE AND
SLOW LEARNERS
2) AT THE END OF EACH TOPIC THE NUMERICALS AND ASSESMENT TOOLS ON THE SAME WILL BE DISCUSSED )
GROUP NAME OF THE PARTICIPANTS KV TOPIC

Group 1
श्री कै लाश गगरी बीईजी, पुणे Production possibility
curve,marginal opportunity
cost ,numeicals and methods
to make schedules easy
डॉ रगमम कालड़ा मानखुर्,द मुुंबई
सुश्री सान्या सचर्ेवा आयएनएस माुंडवी, गोवा
Group 2 Consumer equilibrium and
demand
श्रीमती रीना पालीवाल कोलीवाड़ा,मुुंबई
श्री सुंर्ीप अवीकर नुं 1 वायुसेना कें द्र,
लोहगाव,पुणे
श्री जयमाल ससह डीआईएटी गगरीनगर, पुणे
श्रीमती अनीता अनगजया गणेशसखड, पुणे
श्रीमती गिग्धा गमश्रा सीएमई, पुणे
Group 3 Producer behavior and
supply
श्रीमती समता ससह नुं 2 वायुसेना कें द्र,
श्री अरसवर् उराडे वीएसएन नागपुर
श्री पी पासवान नुं 2 कु लाबा, मुुंबई
श्री अुंककत कु मार एनएडी , करुं जा
कु मारी राखी एनडीए, खड़कवासला,पुणे
Group 4 Forms of market ,market
equilibrium
श्रीमती अमृता गुगलया वायुसेना कें द्र, ठाणे
श्रीमती कनक यार्व एमआयआरसी,अहमर्नगर
श्रीमती सीमा गमश्रा आईआईटी,पवई,मुुंबई
श्री गनगखल कु मार एसएम लाईन कामठी
श्रीमती अनुपमा गतवारी भाुंडुप, मुुंबई
th
GROUP FORMED FOR THE WORKSHOP (4 AUGUST 2018)
NOTE: THE TOPICS OF BOTH MICRO ECONOMICS AND MACRO ECONOMICS WILL BE DEALT WITH A STRESS ON TEECHINIQUES
USED BY THE TEACHERS IN THE CLASSES TO MAKE THE TOPICS SCORING CATERING TO THE NEEDS OFBRIGHT, AVERAGE AND
SLOW LEARNERS
2) AT THE END OF EACH TOPIC THE NUMERICALS AND ASSESMENT TOOLS ON THE SAME WILL BE DISCUSSED )
GROUP NAME OF THE PARTICIPANTS KV TOPIC

Group 1 श्रीमती रीना पालीवाल कोलीवाड़ा,मुुंबई Measurement of national
income ,easy way to teach
conceptsand derivation of
numericals
श्री सुंर्ीप अवीकर नुं 1 वायुसेना कें द्र,
श्री पी पासवान नुं 2 कु लाबा, मुुंबई
श्रीमती समता ससह नुं 2 वायुसेना कें द्र,

कु मारी राखी एनडीए, खड़कवासला,पुणे
Group 2 PROCESS OF CREDIT
CREATION BY COMMERCIAL
BANKS AND DISCUSSION OF
SOME PROBABLE AND
MOST LIKELY QUESTIONS ON
MONEY AND BANKING
,GOVERNMENT BUDGET,
श्री कै लाश गगरी बीईजी, पुणे
श्रीमती कनक यार्व एमआयआरसी,अहमर्नगर
श्रीमती अनुपमा गतवारी भाुंडुप, मुुंबई
श्रीमती गिग्धा गमश्रा सीएमई, पुणे
Group 3 DETERMINATION OF INCOME AND

EMPLOYMENT MAKING NUMERICALS
AND THEORY QUESTIONS MORE EASY
DISCUSSION AND INTERACTION ON THE
strategies for teaching
Concept which are
considered difficult in the
topic
श्री अरसवर् उराडे वीएसएन नागपुर
श्रीमती सीमा गमश्रा आईआईटी,पवई,मुुंबई
श्री जयमाल ससह डीआईएटी गगरीनगर, पुणे
सुश्री सान्या सचर्ेवा भाुंडुप, मुुंबई
Group 4 DISCUSSION ON THE

STRATEGIES TO MAKE THE
TOPIC OF BALANCE OF
PAYMENTS AND FOREIGN
EXCHANGE RATE MORE
SCORING AND EASY TO THE
STUDENTS ON THE BASIS OF
TECHINIQUES USED BY THE
PARTICIPANTS
श्रीमती अमृता गुगलया वायुसेना कें द्र, ठाणे
श्री गनगखल कु मार एसएम लाईन कामठी
डॉ रगमम कालड़ा मानखुर्,द मुुंबई
श्री अुंककत कु मार एनएडी , करुं जा
श्रीमती अनीता कनोगजया गणेशसखड, पुणे
KENDRIYA VIDYALAYA SANGATHAN MUMBAI REGION
TWO DAYS WORK SHOP FOR PGT ECONOMICS OF MUMBAI REGION
STRATEGIES TO IMPROVE THE CLASS XII RESULT 2018-19
Was held on 3rd and 4th August 2018 at Kendriya Vidyalaya Rangehills Estate under the
guidance and direction of shri.MAHIPAL SINGH ,PRINCIPAL KV BHANDARA.
REPORT ON DAY ONE (3RD AUGUST 2018)
The workshop began with an invocation to God and a welcome address by the venue director
Shri.P.S.SANGOLE (PRINCIPAL KV RHE,PUNE) followed by a briefing on the objective of the
workshop by Shri.MAHIPAL SINGH, PRINCIPAL KV BHANDARA, Director of the work shop.
The particiants were divided into groups and topics from micro economics were allotted to
them and after a brief discussion each member specifically explained the techniques adopted
by them to make the topics easy. It was an interactive session and many new ways of making
teaching learning of economics easy. Simple ways for making schedules, drawing the diagrams
were given by the course director and the participants. The course director gave tips for solving
numerical, clearing concepts for all the topics and continuously motivated the participants by
uplifting their morale. Each participant submitted a question paper with marking scheme and
blue print as suggested by the director. In the post-lunch session the participants worked on
making work-sheets with answers for each topic which could be used as a tool in class for
assessment of learning objective. The day’s proceeding was adhered to strictly on the basis of
programme drafted.
REPORT ON DAY 2(4TH AUGUST 2018)
The groups were changed and new groups were formed and the topics of macro economics
were divided. Each group was assigned a unit to explain the techniques adopted by them to
make the topics easy with stress on the slow learners. It was a brief revision of the syllabus for
the participants as well and some activities and play way methods were given by the
participants to make concepts of macro economics more comprehensive. The participants were
also given tips by the course director for calculating national income. In the post-lunch session
there was a review of the materials prepared and question papers submitted and strategy to
use the materials prepared.The work shop concluded on a positive note with an assurance to
remove the fear in the minds of the students regarding economics and achieve quantitative and
qualitative improvement of the results.
A TOTAL NUMBER OF 19 REGULAR PGTS ATTENDED THE COURSE OUT OF THE REGISTERED 23.
KENDRIYA VIDYALAYA RANGE HILLS ESTATE KHADKI PUNE-20
TWO DAY WORK SHOP FOR PGT ECONOMICS MUMBAI REGION DATE:3RD AND 4TH AUGUST 2018
SCHEDULE OF THE PROGRAMME OF THE TWO DAY WORK SHOP

TOPIC :STRATEGIES FOR IMPROVEMENT OF BOARD RESULT
NOTE: THE TOPICS OF BOTH MICRO ECONOMICS AND MACRO ECONOMICS WILL BE DEALT WITH A
STRESS ON TEECHINIQUES USED BY THE TEACHERS IN THE CLASSES TO MAKE THE TOPICS SCORING
CATERING TO THE NEEDS OFBRIGHT, AVERAGE AND SLOW LEARNERS
2) AT THE END OF EACH TOPIC THE NUMERICALS AND ASSESMENT TOOLS ON THE SAME WILL BE
DISCUSSED )
3RD August, 2018

SR NO EVENT/TOPIC TIME :FROM -TO
1 INAUGURATION 8.00 AM TO 8.30 AM
2 FORMATION OF GROUPS 8.30AMTO 8.45 AM
INTRODUCTION :TOPIC OF MARGINAL 8.45 AM TO 9.30AM
3 OPPORTUNITY COST ,PPC
4 Unit 2: Consumer's Equilibrium and 9.30 AM TO 10.30 AM
Demand :
.
TEA-BREAK 10.30AM TO 11.00AM
5 Unit 3: Producer Behaviour and Supply : 11.AM TO 12.30 PM
6 LUNCH BREAK 12.30PM TO 1.15 PM

7 Unit 4: Forms of Market and Price 1.15.PM TO 2.00PM
Determination under Perfect Competition
with simple applications:- DISCUSSION OF
SOME PROBABLE AND MOST LIKELY QUESTIONS
ON FORMS OF MARKET WITH A PERSPECTIVE
FOR SLOW LEARNERS
8 Preparing strategies for making 2,00PM TO2.30 PM

difficult topics(from the point of view
of the students ) easy to comprehend
9 PREPERATION OF WORK SHEETS, ASSESMENT 2.30 PM T0 4.00PM
TOOLS NUMERICALS ON THE TOPICS COVERED
DURING THE DAY BY THE GROUPS ON TOPICS
ALLOTTED
4TH AUGUST 2018
SR NO TOPIC TIME FROM-T0
1 MEASUREMENT OF NATIONAL INCOME- MAKING 8.00AM T0 9.30 AM
METHODS OF CALCULATING NATIONAL INCOME EASY
ON THE BASIS OF TECHINIQUES USED BY THE
PARTICIPANTS
2 PROCESS OF CREDIT CREATION BY COMMERCIAL BANKS 9.30AM TO 10.30 AM
AND DISCUSSION OF SOME PROBABLE AND MOST
LIKELY QUESTIONS ON MONEY AND BANKING
,GOVERNMENT BUDGET
3 TEA –BREAK 10.30TO 11.00 AM
4 DETERMINATION OF INCOME AND EMPLOYMENT 11.AM TO 12..00PM
MAKING NUMERICALS AND THEORY QUESTIONS MORE
EASY DISCUSSION AND INTERACTION ON THE
strategies for teaching Concept which
are considered difficult in the topic
5 TIPS TO IMPROVE RESULTS BY THE PARTICIPANTS 12.00PM TO 12.30 PM
HAVING GIVEN HIGH PERFORMANCE INDEX IN THE LAST
SESSION
6 LUNCH- BREAK 12.30-PM TO 1.15 PM
7 DISCUSSION ON THE STRATEGIES TO MAKE THE TOPIC OF 1.15 PM TO 2.00PM
BALANCE OF PAYMENTS AND FOREIGN EXCHANGE RATE
MORE SCORING AND EASY TO THE STUDENTS ON THE
BASIS OF TECHINIQUES USED BY THE PARTICIPANTS
8 DISCUSSING THE STRATEGIES FOR IMPROVING QUALITY 2.00PM TO 2.30 PM
OF THE RESULT and LISTING THEM OUT FOR FURTHER
ACTION
9 CONSOLIDATION OF WORK SHEETS ,NUMERICALS AND 2.30 PM TO 4.00PM
QUESTION PAPERS PREPARED IN THE TWO DAY SESSION
AND CONCLUDING REMARKS
Blue Print
Sample Paper
Class-XII
Economics
Theory M: 80 Duration: 3 Hours
Very Long Total

Short Short
short answer
Unit Name of unit answer answer
answer 6
3 marks 4 marks
MCQ marks
1 Introduction 1 3(1) 4
2 Consumer’s Equilibrium and demand 3(1) 4(1) 6(1) 13
3 Producer’s behavior and supply 1(3) 4(1) 6(1) 13
Forms of market and price

4 determination under perfect 4(1) 6(1) 10
competition with simple applications
National income and related
5 1(1) 3(1) 6(1) 10
aggregates
6 Money and Banking 6(1) 6
Determination of income and
7 1(1) 3(1) 4(2) 12
employment
8 Government Budget and economy 6(1) 6
9 Balance of payments 1(2) 4(1) 6
Total 1*8=8 3*4=12 4*6=24 6*6=36 80

Sample Question Paper
Class – XII M. Marks – 80
Subject – Economics Time – 3 Hours
General Instructions
i. All questions are compulsory

ii. Marks for each questions are indicate against each.
iii. Question No. 1-4 AND 13-16 are very short answer questions which carry one mark each. They
are required to be answer in one sentence only each.
iv. Question No. 5-6 and 17-18 are short answer questions which carry 3 marks each. Answer
should not exceed 60 words for each question.
v. Question No. 7-9 and 19-21 are short answer questions which carry 4 marks each. Answer
should not exceed 70 words for each question.
vi. Question No. 10-12 and 22-24 are long answer questions which carry 6 marks. Answer should
not exceed 100 words for each question.
vii. Word-limitation is not applicable for numerical question.
साभान्म ननदे श
i. सबी प्रश्न अननवामय है

ii. प्रत्मेक प्रश्न के अॊक उसके साभने है
iii. प्रश्न सॊख्मा 1-4 तथा 13-16 अनत रघु उत्तयीम प्रश्न है इनभे से प्रत्मेक प्रश्न के 1 अॊक है जजनका उत्तय
अधधकतभ एक वाक्म भें आऩेक्षऺत है
iv. प्रश्न सॊख्मा 5-6 तथा 17-18 अनत रघु उत्तयीम प्रश्न है इनभे से प्रत्मेक प्रश्न के 3 अॊक है जजनका उत्तय
अधधकतभ 60 शब्दों भें आऩेक्षऺत है
v. प्रश्न सॊख्मा 7-9 तथा 19-21 अनत रघु उत्तयीम प्रश्न है इनभे से प्रत्मेक प्रश्न के 4 अॊक है जजनका उत्तय
vi. प्रश्न सॊख्मा 10-12 तथा 22-24 अनत रघु उत्तयीम प्रश्न है इनभे से प्रत्मेक प्रश्न के 6 अॊक है जजनका उत्तय
vii. सॊख्मात्भक प्रश्नो के लरए शब्द सीभा अननवामय नहीॊ है
Section – A (Introductory Microeconomics)
बाग-अ (प्रायजभबक व्मजटि अथयशास्त्र)
1. Decisions on the central problems in a market economy are taken by 1

a. The govt or central authority
b. Institutions
c. Market forces
d. None of these
एक फाजाय अथयव्मवस्त्था भें आधथयक ननर्यम लरए जाते है
a. सयकाय मा केंद्रीम शजक्तमों द्वाया

b. सॊस्त्था द्वाया
c. फाजाय शजक्तमों द्वाया
d. इनभे से कोई नहीॊ
2. Variable cost per unit of output is called 1

a. Total fixed cost
b. Average variable cost
c. Average fixed cost
d. Marginal cost
प्रनत इकाई जस्त्थय रागत को क्मा कहा जाता है
a. कुर जस्त्थय रागत

b. औसत ऩरयवतयनशीर रागत
c. औसत जस्त्थय रागत
d. सीभान्त रागत
3. AR and MR are parallel to X-axis in which of the following market 1
a. Monopoly
b. Oligopoly
c. Monopolistic
d. Perfect competition
ककस फाजाय भें औसत सभप्राजतत औय सीभान्त सभप्राजतत X-अऺ के सभान्तय होते है
a. एकाधधकाय
b. अल्ऩाधधकाय
c. एकाधधकायी प्रनतमोधगता
d. ऩर्
ू य प्रनतमोधगता
4. If supply of a product increases, equilibrium price will 1

a. Rise
b. Fall
c. Either of two
d. Neither of two
मदद वस्त्तु की ऩत
ू ी फढ़ती है तो सॊतर
ु न कीभत
a. फढ़े गा
b. घिे गा
c. दोनों भें कोई बी
d. दोनों भें से कोई नहीॊ
5. What do you mean by economic problem and why does it arise? 3

आधथयक सभस्त्मा क्मा है मह क्मों उत्ऩन्न होती है
Or
If there is improvement in technology or increase in resources then what will happen to PPC?
Discuss and explain it.
मदद तकनीक भें सध
ु ाय होता है मा सॊसाधनों भें वद्धृ ि होती है तो PPC ऩय क्मा प्रबाव ऩड़ेगा सभझाइमे!
6. When price of a commodity is Rs.10 per unit, the consumer buys 20 units of that good. When
price rises to Rs.15 per unit, the consumer consumes 15 units. Calculate elasticity of demand.
3
मदद वास्त्तु की कीभत 10 रूऩमे प्रनत इकाई है तो उऩबोक्ता उसकी 20 इकाईमा खयीदता है जफ कीभत 15
रूऩमे प्रनत इकाई हो जाती है तो उऩबोक्ता 15 इकाईमा उऩबोग कयता है , भाॊग की रोच ऻात कीजजमे !
7. What do you mean by indifference curve? Explain it with the help of table and diagram. 4
तिस्त्थता वक्र क्मा होता है इसे तालरका व धचर की सहामता से स्त्ऩटि कीजजमे !
8. Why do firms earn only normal profit under perfect competition market in the long run? Explain
पभे ऩर्
ू य प्रनतमोधगता फाजाय के अॊतगयत दीघयकार भें केवर साभान्म राब ही क्मों कभाती है ? सभझाइमे !
4
Or
Why demand curve of a firm in monopoly market is less elastic. Explain.

एकाधधकाय फाजाय भें भाॊग वक्र काभ रोचदाय क्मों होता है | स्त्ऩटि कीजजमे
9. What do you mean by MSP (Minimum support price)? What are the effects of this? 4
न्मन
ू तभ सभथयन कीभत क्मा होती है ? इसके क्मा प्रबाव है ?
10. What do you mean by consumer equilibrium? Explain it with the help of indifference curve
approach. 6
उऩबोक्ता सॊतर
ु न क्मा होता है धचर व तालरका द्वाया स्त्ऩटि कीजजमे !
Or
Explain how following factors affecting the price elasticity of demand.
a. Availability of substitute
b. Time period
फतामे की ननभन कायक एक वस्त्तु की भाॊग की रोच को कैसे प्रबाद्धवत कयते है
अ. प्रनतस्त्थाऩना की उऩरभ्धता
फ. सभम अवधध
11. Find out the missing figures from the table below 6
Quantity Total cost Total fixed Total
cost variable
cost
0 - -
1 - - 30
2 120 -
3 - - 55
4 - 60 60
5 160 - -
6 190 - -
ननभन सायर्ी को ऩयू ा कये
इकाईमाॊ कुर रागत कुर जस्त्थय कुर

रागत ऩरयवतयनशीर
रगत
0 - - -
1 - - 30
2 120 -
3 - - 55
4 - 60 60
5 160 - -
6 190 - -
12. What is equilibrium price? What will be the effect on equilibrium price and quantity if there is
increase in demand? Explain chain effect. 6
सॊतर
ु न कीभत क्मा है ? मदद भाॊग भें वद्धृ ि होती है तो सॊतर
ु न कीभत व भारा ऩय क्मा प्रबाव ऩड़ेगा इसके
प्रबाव की व्माख्मा कये !
Section – B (Introductory Macroeconomics)
बाग- फ (प्रायजभबक सभजटि अथयशास्त्र)
13. Opening stock can be ascertained as – 1

a. Sales + change in output
b. Value of Output + value added
c. Closing stock + change in stock
d. Closing stock – change in stock
आयॊ लबक स्त्िॉक ननकरा जा सकता है -
a. बफक्री + उत्ऩादन भें अॊतय

b. उत्ऩादन का भल्
ू म + भल्
ू म वद्धृ ि
c. अॊनतभ स्त्िॉक + आयॊ लबक स्त्िॉक
d. अॊनतभ स्त्िॉक - आयॊ लबक स्त्िॉक
14. If APC increases what will happen to APS will 1

a. Decrease
b. Increase
c. Both
d. Neither
मदद APC फढ़ता है तो APS
a. फढ़े गा
b. घिे गा
c. दोनों होगा
d. इनभे से कुछ नहीॊ
15. Calculate the value of import, if the net export of the economy is Rs. 1000 and value of export is
1400. (In Crores) 1
a. 200
b. 400
c. 600
d. 800
मदद अथयव्मवस्त्था का शि
ु ननमायत 1000 कयोड़ रूऩमे औय ननमायत का भल्
ू म 1400 कयोड़ रूऩमे है तो आमत
ककतना होगा?
e. 200
f. 400
g. 600
h. 800
16. Foreign exchange rate is determined where 1
a. Demand exceeds supply

b. Supply is less than demand
c. Demand and supply become equal
d. None of these
द्धवदे शी द्धवननभम दय ननधायरयत होती है जफ
a. भाॊग ऩत
ू ी से अधधक हो
b. ऩत
ू ी भाॊग से अधधक हो
c. भाॊग औय ऩत
ू ी फयाफय हो
d. इनभे से कोई नहीॊ
17. Explain the components of domestic income. 3

घये रु आम के घिको का वर्यन कये
18. Explain the concept of deflationary gap with the help of schedule and diagram. 3
आबावी भाॊग की अवधायर्ा को ये खा धचर की सहामता से सभझाइमे |
OR
“Saving and consumption curves are complementary curves” comment.

"फचत औय उऩबोग एक दस
ू ये के ऩयू क होते है " व्माख्मा कये !
19. From the following schedule compute APC, APS, MPC and MPS 4
INCOME 50 100 150 200
SAVING 20 60 75 120
ननभन सायर्ी की भदद से औसत उऩबोग प्रवनृ त, औसत फचत प्रवनृ त, सीभान्त उऩबोग प्रवनृ त, सीभान्त
फचत प्रवनृ त ऻात कीजजमे
आम 50 100 150 200
फचत 20 60 75 120
OR
If there is an additional investment in the economy of 100 Cr, what will be the addition income
generated when MPC is 0.25.
मदद अथयव्मवस्त्था भें 50 कयोड़ का अनतरयक्त ननवेश होता है तो आम भें ककतनी अनतरयक्त वद्धृ ि होगी मदद
सीभान्त उऩबोग प्रवनृ त 0.25 है
20. What is multiplier? Explain the relationship between MPC and Multiplier. 4
ननवेश गर्
ु क क्मा है ? गर्
ु क व सीभान्त उऩबोग प्रवनृ त भें सभफन्ध स्त्ऩटि कीजजमे
21. State four main sources of supply of foreign exchange. 4
द्धवदे शी द्धवननभम की ऩत
ू ी के 4 स्रोत फताईमे
22. Explain any two functions of central bank. 6

केंद्रीम फैंक की ककन्ही दो कामो को सभझाइमे !
OR
What is credit creation? If primary deposit is 1000 and credit multiplier is 10 then what will be
the credit creation in the economy. Explain its process.
साख ननभायर् क्मा है ? मदद प्रायॊ लबक जभा 1000 तथा साख गर्
ु क 10 है तो साख ननभायर् ककतना होगा
इसकी प्रकक्रमा को सभझाइमे !
23. Explain the following 6

a. Fiscal deficit
b. Revenue deficit
c. Primary deficit
ननभनलरखखत को स्त्ऩटि कीजजमे
a. याजकोषीम घािा
b. सभप्राजतत घािा
c. आयॊ लबक घािा
24. Calculate national income from the following data using income and expenditure method.
ननभन आॊकड़ों की सहामता से आम द्धवधध तथा व्मम द्धवधध से याटरीम आम ऻात कीजजमे !
S.No. Items (Rs. In

Crores)
1 Private final consumption expenditure 200
2 Subsidies 30
3 Net income from abroad (-) 20
4 Indirect tax 40
5 Rent 5
6 Govt final consumption expenditure 40
7 Operating surplus 10
8 Net domestic fixed capital formation 10
9 Wages and salary 70
10 Net export 10
11 Change in stock 10
12 Employer’s social security contribution 20
13 Mixed income 130
S.No. भद कयोड़ भें

1 ननजी अॊनतभ उऩबोग व्मम 200
2 सहानमकी 30
3 द्धवदे शो से शि
ु कायक आम (-) 20
4 अप्रत्मऺ कय 40
5 रगान 5
6 सयकायी अॊनतभ उऩबोग व्मम 40
7 प्रचारन अधधशेष 10
8 शि
ु घये रु जस्त्थय ऩॉज
ू ी ननभायर् 10
9 भजदयू ी व वेतन 70
10 शि
ु ननमायत 10
11 स्त्िॉक भें ऩरयवतयन 10
12 भालरकों का साभाजजक सयु ऺा भें मोगदान 20
13 लभधित आम 130
Marking Scheme
Class – XII M. Marks – 80
Subject – Economics Time – 3 Hours
Q.no. Expected Answer Marks

1 C 1
2 B 1
3 D 1
4 B 1
5 Economic problem is basically problem of choice. It arises due to limited resources 3
and unlimited wants having alternative uses.
OR
If there is improvement in technology or increase in resources, In both cases PPC will

shift to the right. Because by the improvement in technology more production of
both the goods can be done or by increase in resources will also make it possible to
increase the production of both the goods.
6 0.4 (1 mark for formula, 2 mark for calculation) 3
7 Indifference curve is a which shows different combinations of two goods, which 4
provide equal satisfaction.
Combinations Good 1 Good 2

A 1 10
B 2 7
C 3 5
D 4 4
8 All firms earn only normal profit because of free and exit of the firms. In case of 4
abnormal profit new firms enter in the market bringing down abnormal profit to
normal profit and In case of loss, firms will leave the industry making loss to normal
profit.
OR
Demand curve in monopoly market is less elastic because there is only one firm and
there is no availability of substitutes. Even if, monopoly firm increases price, buyers
demand will not change much because substitutes are not available and seller is only
one.
9 Minimum support price is the price determined by Govt above equilibrium price 4
determined by demand and supply. its also known as Floor price. its determined to
stabilize the income of producer. It protects producers from loss. Its made to make
excess supply
10 Consumer will obtain equilibrium position when MRS = Px/Py, slope of indifference 6
curve and slope of budget line) , when 2 conditions are fulfilled
a. Indifference curve is tangent to budget line
b. Indifference curve is convex to origin
(explanation-3 marks, diagram and its explanation – 3 marks)
OR
a. Availability of substitutes – if substitutes are available in the market then
demand would be elastic because if price of one commodity increases
consumer can move to substitute commodity. If substitute is not
available, demand would be less elastic because consumer cannot buy
other commodity.
b. Time period – In short period demand would be less elastic because
habits and preferences cannot be changed easily in short period and its
not easy to change in demand in a short period. Whereas In long run,
habits, preference and demand can be changed easily therefore demand
would be more elastic.
11 Quantity TC TFC TVC 6
0 60 60 00
1 90 60 30
2 120 60 60
3 115 60 55
4 120 60 60
5 160 60 100
6 190 60 130
12 Definition-1 mark, assumptions of law of demand-1 mark, schedule-1 marks, diagram 6
& explanation-3 marks
13 D 1
14 A 1
15 B 1
16 C 1
17 Consumption of employees, operating surplus, mixed income.. their parts also 3
18 Aggregate demand is less than aggregate supply at full employment level. 3
(Meaning 1 mark , diagram-2 marks)
OR
Saving and consumption curves are complementary because income is equal to
consumption and saving, Y = C+S, We can consumption from saving function.
consumption at the income 0 is dissaving and would be shown negative Y-intercept.
19 4
Income Saving Consumption APC APS MPC MPS
50 20 30 0.6 0.4 - -
100 60 40 0.4 0.6 0.2 0.8
150 75 75 0.5 0.5 0.7 0.3
200 120 80 0.4 0.6 0.1 0.9
OR
400
20 Multiplier is the process in which there occurs multiple change in income due to 4
change in initial investment. There is positive relationship between MPC and income,
if MPC increases, multiplier will increase and vice versa.
21 a. Export of goods & services 4
b. Remittances sent by NRIs
c. Donations
d. Tourism
22 Money supply is the total stock of money of various kinds at any particular point of 6
time
Four measures of money supply M1, M2, M3, M4 (explanation of each)
OR
Credit creation is dependent on primary deposit. Banks usually keep certain

percentage of deposit of and lend rest of the money.
If credit multiplier is 10 and PD is 1000 then credit creation would be 10,000
There is positive relationship between credit multiplier and credit likewise positive
relationship between PD and credit creation.
23 Fiscal deficit – its the excess of Total expenditure over Total receipts (except 6
borrowing) – it shows burden on govt and government’s over expenditure
than receipts
Revenue deficit – excess of revenue expenditure over revenue receipts, it
shows govt spending more than revenue.
Primary deficit – it’s the difference between fiscal deficit and interest
payment. It shows deficit occurring to present.
24 Income method – 6
Wages& salry + operating surplus+mixed income+ NFYA = 210
Expenditure method -
Private final consumption expenditure + gvt final consumption expenditure+net
domestic capital formation + change in stock + net export – indirect tax + subsidies +
NFYA = 210
KENDRIYA VIDYALAYA SANGATHAN, MUMBAI REGION
BLUE- PRINT
SUB: ECONOMICS CLASS: XII
Very short Short Short Long

S answer/MCQ Answer Answer Answer
UNITS Marks
N
1 Mark 3 Marks 4 Marks 6 Marks
1 Introduction 1 1 4
Consumer’s
2 Equilibrium and 3 1 1 13
Demand
Producer Behaviour
3 1 1 1 13
and supply
Forms of Market and

Price Determination
4 under perfect 1 1 10
competition with
simple applications
National Income and

5 1 1 10
Related Aggregates
6 Money and Banking 2 6
Determination of
7 Income and 2 1 1 12
Employment
Government Budget
8 1 6
and the Economy
9 Balance of Payment 2 1 6
8x1=8 4x3=12 6x4=24 6x6=36 80

SAMPLE QUESTION PAPER (ECONOMICS)
MAX. MARKS :- 80 TIME:- 3 HRS
Q.NO QUESTIONS MARKS

1 Define Indifference map. 1
2 In the short run, when a firm produces zero output, its total 1
cost is equal to _____
a) Zero
b) variable cost
c) Fixed cost
d) Marginal cost
3 What is rationing? 1
4 When demand increases with no change in supply, equilibrium 1
price and equilibrium quantity _____
5 Explain the difference between an inferior good and a normal 3
good.
6 What are the factors which affects the price elasticity of 3
demand?
OR
Explain the characteristics of an oligopoly market . 3
7 What will be the impact of launched “clean India Mission “ on 4
the production possibilities curve of the economy and why?
8 Explain the implication of the following in a perfectly 4
competitive market :-
a) large number of buyers
b) Freedom of entry and exit of firms
9 Market for a good is in equilibrium. The demand for the good 4
deceases. Explain the chain effects of this change.
OR
The elasticity of demand of x is -1.25. its price falls for Rs.10 to 4

Rs. 8 per unit . calculate the percentage in its demand .
10 State the different phases of change in Total Product and 6
Marginal Product in the Law of Variable Proportions . Use
diagram .
OR
Explain the implication of differentiated product and perfect
knowledge feature of perfect competition
11 Explain the meaning and conditions of producers equilibrium 6
using MC and MR approach. use diagram .
12 Explain with the help of diagram the effect of the following on 6
the supply of a good.
a) A rise in the rate of excise duty
b) A fall in the price of other goods
c) A fall in the price of factor inputs .
13 If the value of MPC is 0.8,calculate the value of multiplier. 1
14 Out of the following which value can be greater than one 1
a) APC
b) MPC
c) APS
d) MPS
15 Define devaluation of domestic currency . 1
16 Balance of trade refers to balance of exports and imports of 1
____
A) Visible items
B) Invisible items
C) Both
D) None
17 Tax rates on higher income groups have been increased. which 3
economic value does it reflect ? Explain .
18 Explain the difference between revenue receipts and capital 3
receipts .
OR
Government decides to raise its expenditure on
producing public utilities. What will be the impact of
this on the public ? explain .
19 Machine purchased is always a final good. Do you agree? Give 4

reasons for your answer .
20 Explain the effects of appreciation of domestic currency on 4
imports and exports .
21 What role of RBI is known as lender of last resort ? 4
OR
Explain how money has solved the problem of double 4
coincidence of wants .
22 Calculate GNP at market price from the following data 3

S.NO ITEMS RS. CR
1 Compensation of employees 800
2 Profits 200
3 Dividends 50
4 Gross national product at 1400
market price
5 Rent 150
6 Interest 100
7 Gross domestic capital 300
formation
8 Net fixed capital formation 200 3
9 Change in stock 50
10 Factor income from abroad 60
11 Net indirect taxes 120
B) How is the value of net exports calculated ?
c) What is a positive externality ?
23 Distinguish between APC and MPC by giving a numerical 6
example .
OR
Classify the following into the capitals receipts and revenue
receipts . Give reasons for your answer .
a) Recovery of loans 6
b) Interest received on loans
c) Dividend received from public enterprises
d) Grants from foreign governments .
24 There is improvement in the balance of trade over the year. 6

Explain its effect on GDP.
MARKING SCHEME
Q.NO ANSWER MARKS

1 It is locus of different combinations of two goods, the 1
consumer consumes, which give same level of utility .
2 Fixed cost 1
3 Allocating the limited supply of essential commodities among 1
consumers through Fair Price Shops.
4 Rises 1
5 Inferior good Normal good 3
Demand decrease when Demand rises when the income
the income of the of the consumer increases and
consumer increases and vice versa
vice versa
In Direct relationship Direct relationship
6 a) Number of substitutes available for the good 3
b) Proportion of income spent on the good
c) Nature of the good
OR
A) Firms are mutually dependent on each other
B) Firms avoid price war due to fear of loss
C) Oligopoly market has few firms
7 Reduction in the chances of people falling sick. 4
Ensure better health , means regular work, increases the
efficiency of the people ,shift in the PPC curve to the right
8 a) The number of buyers so large that each individual 4
buyer has a negligible share in the market demand for
the good . No individual buyers can influence the
market price .
b) There is no obstacle for the firms to move into and out
of the industry . When firms makes profit they will
enter the market and when they make loss they exist .
9 Price remain the same . situation of excess supply emerges 4
Excess supply leads to a competition between sellers causing
price to fall. Fall in price will lead to increase in demand and
fall in supply. Price continues to fall in the market till the
market is in equilibrium again at a lower price .
OR
% change in price = change in price /price * 100

-2/10*100 = -20%
Ed= % change in qtydd /% change in price
-1.25= % change in qtydd/-20
= 1.25X20
= 25%
10 The law of variable proportion states that if we on using 6
more and more units of a variable factor with a fixed factor ,
TP will increase at increasing rate , then increase at
diminishing rate , reaches maximum and finally falls .
MP will first increase , then start falling but remain positive
,then become zero . Use diagram .
OR
Buyers differentiated among the products of different sellers 6
on the basis of their packaging ,colour, shape, brand name
etc. The differentiated products are close substitute of each
other .
All producers and consumers have perfect knowledge about
the product . Nobody is ignorant . They all are aware of ruling
price .
11 Producers equilibrium refers to a situation where the 3
producer gets maximum profit. According to MC and MR
approach ,the producer is in equilibrium when MR= MC and 3
MC curve cuts the MR curve . use diagram
12 a) when the rate excise duty is increased by government , 2
the unit cost production will rise .with higher cost of
production , less would be supplied than before at the
given price and supply curve will shift .
b) Suppose wheat and sunflower are the goods which a
farmer produces .if the price of sunflower falls, then it 2
would not be profitable for the farmer to produce
more sunflower .so farmer will start producing wheat
and supply will increase .
c) When price of inputs used in the production of a good 2
goes down, the unit cost of production will decline .At a
lower cost of production, producers will increase the
supply of the commodity.
Use diagram
13 K=5
14 a) APC
15 Raise in the price of foreign currency in terms of domestic 1
currency by the government.
16 A) Visible items 1
17 It reflects fair distribution of income 3
Government motive is towards equal distribution of income
and wealth and bring social justice in the economy .
18 Revenue receipts Capital receipts
It neither create liabilities It either create liabilities or
nor lead to reduction in lead to reduction in assets
assets .
e.g sale tax , income tax e.g borrowing , recovery of
loans
OR
When government decides to raise its expenditure on public 3
utilities like parks, street lighting , roads etc, it reflects the
value of social welfare .Every body will benefit from theses
public utilities, without any discrimination. This is a step
towards welfare maximization .
19 NO, machine purchased can be final good or intermediate 4

good depending on the purchase .
Purchased by household for personal use or producer for
production unit then final good .
Purchased by firm for resale purposes , then it is treated as
intermediated good.
20 Imports – it will become cheaper 4
Exports – costlier
21 If banks cant not get money for their short term credit they 4
can knock the door of RBI for help. When commercial bank
suffers the crisis during such period RBI offers loan to the
commercial banks to cope up with the crisis .
OR
Buyer can easily pay money to the seller in the transaction 4
and on the other hand, seller can buy whatever he wants to
buy from the money received .
22 3
a) GDP FC= NDPFC-CFC
= 800+200+150+100+50
= 1300 CR
b) Net Exports = exports – Imports 3
c) Activity resulting in benefits to others is called a positive
externality .
23 APC is the total consumption expenditure as proportion of 6
total income . APC=C/Y
MPC refers to the proportion of change in consumption
expenditure to change in income . MPC=change in
consumption /change in income .
e.g suppose income is Rs.500 and the consumption
expenditure is Rs.600
APC= C/Y
= 600/500
=1.2
Suppose income increase from Rs.500 to Rs,600 and

Consumption rises from 400 to 460.
MPC= 60/100
= 0.60
OR 1 ½ marks
a) Capital receipts – Assets of the government are each
reduced.
b) Revenue receipts –Neither increase liability nor 6
reduces assets
c) Revenue receipts –Neither increase liability nor
reduces assets
d) Revenue receipts –Neither increase liability nor
reduces assets
24 If there improvement in the balance of trade over the years in 6

the economy, it is very favorable for the growth of GDP.
Exports will rise and imports will fall. Exports will bring foreign
exchange and import expenditure will also fall thus fall in
outflow of foreign exchange .increase in export will lead to
increase in employment opportunity and increase domestic
income.
CLASS-XII QUESTION PAPER SUBJECT- ECONOMICS
TIME-3:00 HOURS M.M.:80MARKS
Section A
1. The time period in which some factors are variable and some factors are fixed is referred to as: 1
a. Very long run b. Long run
c. Short run d. Very short run
2. Which among the following market has the firm which is price taker? 1
a. Monopoly b. Oligopoly
c. Perfect competition d. Monopolistic competition
3. What will be the slope of average revenue curve if total revenue increases at constant rate? 1
4. Define marginal cost. 1
5. Explain the law of demand with the help of demand schedule? 3
OR
How is price elasticity of demand affected by –
a. Number of substitutes available for the good.
b. Nature of the good
6. What is price ceiling? Explain its implications. 3
7. Explain the problem of what to produce with the help of production possibility curve. 4
OR
What will be the impact of Make in India appeal to the foreign investors on the production
possibilities frontier of India and why?
8. Explain the distinction between change in demand and change in quantity demanded . 4
9. At a price of Rs. 8 per unit, the quantity supplied of a commodity is 200 units. Its price elasticity of
supply is 1.5. If its price rises to Rs. 10 per unit, calculate its quantity supplied at new price. 4
10. Price of good X = 8, MUx = 40, Price of good Y = 5, MUy = 50. Find whether the consumer is in
equilibrium or not. Give reason in support of your answer. What should a rational consumer do in such
situation? 6
11. What does the Law of Variable Proportions show? What are the different phases in the law of
variable proportion in terms of marginal product? Give reason behind each phase. 6
OR
What is Producer s equilibrium? Explain the conditions of producer s equilibrium through the marginal
cost and marginal revenue approach. Use Diagram.
12. Market for a good is in equilibrium. Demand for the good Decreases . Explain the chain of effects
of this change. 6
Section B
13. Which of the following is a qualitative instrument of credit control? 1
a. Bank rate b. Repo rate
c. Open market operation d. Margin requirements
14. If consumption function of an economy is given as: C= 40+0.6Y, then MPS is: 1
(a)1 (c) 0.4
(b) 0.6 (d) None of these
15. Define money supply. 1
16. Define autonomous consumption. 1
17. Explain the effect of depreciation of domestic currency on exports. 3
18. Distinguish between accommodating and autonomous items in BOP. 3
OR
State three main source of Supply of foreign currencies into the domestic economy.
19. Write down the limitations of using GDP as an index of welfare of a country. 4
20. What do you mean by open market operations? How does this reduce the excess money supply in
the economy? 4
21. In an economy investment increases from 300 to 500, as a result of this equilibrium level of income
increases by 2000. Calculate the marginal propensity to consume. 4
OR
Explain the steps in deriving saving curve from a consumption curve. Use diagram.
22. Giving reasons, categorize the following into revenue expenditure & capital expenditure and
revenue receipts & capital receipts. 6
(i) Subsidies (ii) Grants given to state governments
(iii) Repayment of loans (iv) Construction of school building
(v) Dividends on investment made by government (vi) Corporation tax
23. Explain the concept of deflationary gap (deficient demand). What is its impact on output,
employment and price level in the economy? How it can be controlled by government spending and
taxation policy? 6
24. From the following data, calculate National Product at Market Price by 6
(i) income method and (ii) expenditure method:
Items (Rs.In Crores)
a. Mixed income of self- employed 400
b. Compensation of employees 500
c. Private final consumption expenditure 900
d. Net factor income from abroad (-) 20
e. Net indirect tax 100
f. Consumption of fixed capital 120
g. Net domestic capital formation 280
h. Net exports (-)30
i. Profits 350
j. Rent 100
k. Interest 150
l. Government final consumption expenditure 450
OR
Will the following be included in National Income of India? Give reasons for your answer.
a. Financial help given to flood victims
b. Profits earned by an Indian bank from its branches abroad.
c. Salaries paid to non-resident Indians working in Indian Embassy in America.
d. Interest received by an individual from banks

MARKING SCHEME
ANSWER KEY
SECTION A: MICROECONOMICS
1. Scarcity is a situation where the availability of resources
falls short of their requirements.
2. (d)
3. TR will be maximum.
4. Ed= change in quantity demanded x original price
Change in price original quantity
5. Economics as a ͚Normative science͛ deals with situations
of value judgments or condition of ͚what ought to be͛.
Eg. India should create more employment opportunities.
6. =(4\2) x (5\20)
= 0.5 (Ed<1, relatively inelastic demand).
7. 3.6 (Ed>1, relatively elastic demand).
8. Indeterminateness of Demand Curve: in an oligopoly form
of market no single firm can predict its prospective sales
with perfection. This is because any given change in the
price/output decision by a rival firm would initiate a series
of actions, reactions and counter actions by other.
Therefore there is no certain nature and position of
demand curve under this form of market for a firm.
9. (a) MPP initially rises to its maximum.
(b) MPP then decrease (stays positive) to become zero
(c) MPP becomes negative.
10. (a) False
(b) True
(c) True
(d) False
11. Numerical answer solve with the formula
12. PRICE FLOOR
A Price floor is the lowest legal price of a commodity at
which it can be solved, fixed by the government. Price floors
are used by the govt. to prevent prices for being too low. The
main reason for imposing the price floor policy is the farewell of
the producers/ farmers.
Examples, the minimum wages, minimum support price.
CONSEQUENCE: Buffer stock
SECTION B: MACROECONOMICS
13. (c)
14.(i)
15. (ii)
16. Subsidies are the economic assistance given by the govt. to
the firms and households, with a motive of general welfare.
17. (i) At equilibrium level of income = 1000 crore
(ii) C= 150 crore
18. Ex- post investments are the actual level of the investments
in the economy whereas the Ex-Ante investments are the
planned level of the investments in the economy.
19. GDP doesn͛t account for externalities.
Positive externality: Eg, increases welfare
Negative externalities: Eg, pollution from factories, decreases
welfare.
20. (i) Quantitative techniques (ii) Qualitative techniques
21. Proper answers (fiscal deficits and economic growth).
22. National income = 5350 crore
GNP at MP = 6250 crore
NDP at FC = 5400 crore
23. Range of investment multiplier = one to infinity
Relation: if MPC rises, investment multiplier: positive
relation, whereas if MPS arises, investment multiplier falls:
inverse relation. (Relation to be supported by the numerical
examples or explanation).
24. (a) when price of foreign currency in terms of domestic
currency rises in the foreign exchange market it is termed as
depreciation of domestic currency
(b) managed floating system is a hybrid system which is
amalgamation of the fixed exchange rate system and floating
exchange rate system
MODEL QUESTION PAPER
Class XII
Subject- Economics
Time- 3.00 hrs M.M 80
General Instructions:
i) All questions in are compulsory.

ii) Marks for questions are indicated against each.प्रश्नों के गे क
ं ंगगत हैं.
iii) Questions No. 1-4 and 13-16 are very short answer questionscarrying, 1
mark each.
iv) Questions No. 5-6 and 17-18 are short-answer questions carrying, 3 marks
each. Answers to them should normally not exceed 60 words each.
V)Questions No. 7-9 and 19-21 are also short-answer question & carrying 4
marks each. Answers to them should normally not exceed 70 words each..
vi.Questions No.10-12 and 22-24 are long-answer questions carrying 6 marks

each. Answers to them should not exceed 100 words each.
vii) Answers should be brief and to the point and the above word limits should
be adhered to as far as possible.
Section A
1. What do you mean by Production possibility. 1
2 Give two examples of fixed cost. 1
3. State one reason for rightward shift in supply curve. 1
4. What is meant by production function.1
5. Explain the central problem of “How to Produce”. 3
6. When the price of a good rises from Rs 20 per unit to Rs 30 per unit, the
revenue of the firm producing this goods rises from Rs 100 to Rs
300.Calculate price elasticity of supply. 3
Or
Complete the following table-
Unit of labour Average Product Marginal Product

1 8
2 10
3 10
4 9
5 4
6 7
Unit of labour Average Product Marginal Product

1 8
2 10
3 10
4 9
5 4
6 7
7. Define demand. Name the factors affecting market demand. 4
8 What is the behavior of (a) Average Fixed Cost and (b) Average Variable Cost
as more and more units of a good are produced ? 4
Or
Define Average Revenue. Show that Average Revenue and Price are same
9 Explain the implication of “large number of buyers and sellers” of perfectly

competitive market. 4
10 Explain Consumer equilibrium with the help of Indifference curve analysis.

6
OR
Explain the relationship between-
i) Price of other goods and demand for given good.
ii) Income of buyers and demand for a good.
11 What are the different phases in the Law of Variable Proportions in terms of
marginal product? Give reason behind each phase. Use diagram. 6
12Market for a good is in equilibrium. The supply of good ‘‘decreases’’.

Explain the chain of effects of this change. 6
Section B
13. What is ‘aggregate supply’ in macroeconomics? 1
14. Define multiplier. 1
15. Give name of two parts of the balance of payment account. 1
16. Give two sources of demand for foreign exchange. 1
17.An economy is in equilibrium, calculate marginal propensity to consume-
National income-1000,Autonomous consumption expenditure-200,Investment

expenditure-100. 3
Or
C=100+0.4Y is the consumption function of the economy where C is

consumption expenditure and Y is National income, Investment expenditure is
1100.Calculate
i) equilibrium level of National Income

ii) Consumption expenditure at equilibrium level of National income.
18.What is ‘deficient demand’? Explain the role of ‘Bank Rate’ in removing it. 3
19.What is aggregate demand ? State its components. 4
Or
Explain how controlling money supply is helpful in reducing excess demand?
20.Distinguish between the fixed exchange rate and the floating exchange
rate. If exchange rate falls, explain its effects on exports and imports. 4
21.Giving reasons categories the following into stock and flow:
i) Capital ii) Saving iii)Gross domestic product iv) Wealth4
22. Calculate National income from following data-
a)Private final consumption expenditure- 900
b) Profit- 100
c) Government final consumption expenditure- 400

Net indirect tax- 100
Gross domestic capital formation- 250
Change in stick- 50
Net factor income from abroad- (-)40
Consumption of fixed capital- 20
Net import 30
23. Explain the following function of money-
a) Medium of exchange
b) Standard of deferred payment.
How has it solved the the related problem of money barter. 6
24. What is the difference between Revenue expenditure and Capital

Expenditure? Explain how taxes and government expenditure can be used to
influence distribution of income in society?6
or
What is the difference between direct tax and indirect tax ? Explain the role of
government budget in influencing allocation of resources?
MODEL QUESTION PAPER
MARKING SCHEME
Class XII Subject- Economics
M.M 80 Duration- 3.00 hrs
______________________________________________________________________
MARKING SCHEME
Q Answer Marks
NO
1 Correct defination 1 mks
2 Correct answer 1/2mks each
3 Any one reason 1 mks
5 Labour intensive technique and capital 3mks
intensive technique with explanation
6 P TR Q 1 mks
20 100 5 1mks calculation
30 300 10 1mks answer
P/Q*ΔQ/ΔP Or
20/5*5/10 1 and ½ mks each for AP
ANS 2 and mp
Or
Correct calcuation
7 Correct definition 1 mks each
Any 3 factors with explanation 1 mks each
8 Correct answer with diagram 4mks
Or Or
Definition of average revenue 1mks
Explanation with diagram and table 3 mks
9 Explanation of implication of large numbers of 4 mks
buyers and sellers
10 Indifference curve definition 1 mks
Condition for equilibrium 2 mks
Explanation with diagram 3 mks
Or Or
Relationship of both with explanation 3 mks each
11 The Phases are : 1 and 1/2mks
Phase : I MP rises upto A
Phase : II MP falls but is positive i.e. between A
and B.
Phase : III MP falls and is negative i.e. after B
Reasons
Phase I : Initially variable input is too small as
compared to the fixed input, As
production is increased there is specialization 3 mks
of variable inputs and efficient
use of the fixed input leading to rise in
productivity of the variable input. As a
result MP rises.
Phase II : After a level of output a pressure on
fixed input leads to fall in
productivity of the variable input. MP starts
falling but remains positive.
Phase III : The amount of variable input
becomes too large in comparison to the fixed
input causing decline in total product. MP
becomes negative
digram
1 and 1/2mks
12 Given equilibrium, Supply ͚decreases͛. - Price remaining 6 mks
unchanged, excess demand emerges. - Excess demand
leads to competition between buyers causing price to rise.
- Rise in price causes fall (contraction) in demand and rise
(expension) in supply. - Rise in price continues till the
market is in equilibrium again at a higher price.
15 Current and capital account ½ mks each
16 Any 2 correct sources ½ mks each
17 Calculation 2mks
answer 1mks
Or OR
i) Y=C+I Calculation 2 mks and
Y=100+0.4Y+1100 answer 1 mks
0.6Y=1200
Y=2000
II) C=100+0.4Y
= 100+(0.4Y*2000)
=100+800=900
18 Correct definition 1 mks

Explanation 2 mks
19 Correct definition 1 mks
Components with explanation 3 mks
Or Or
Excess demand definition 1 mks
explanation 3 mks
20 Explanation of effects 4 mks
21 Capital is stock because it is measured at a 1 mks each
point of time.
Saving is flow because it is measured during a
period of time
Gdp is flow because it is measured during a
period of time
Wealth is stock because it is measured at a
point of time.
22 Formula 1mks
Calculation 900+400+250-20-30-100+(-)40 4 mks
Answer-1360 1mks
23 Medium of exchange function 3 mks each
Standard of deferred payment explanation
24 Any 3 differences 1 mks each
Equitable distribution of income explanation 3 mks
Or Or
Any 3 difference 1 mks each
Or Or
Allocation of resources explanation 3 mks
BLUE PRINT CLASS XI
SNO. UNIT UNIT TITLE VERY SHORT (MCQ)
1 MARKS
1 UNIT I INTRODUCTION -
2 UNIT II CONSUMER EQUILIBRIUM & DEMAND 3
3 UNIT III PRODUCER'S BEHAVIOUR & SUPPLY -
4 UNIT IV FORMS OF MARKET & PRICE DETERMINATION 1
INTRODUCTORY MACRO ECONOMIC
5 UNIT V NATIONAL INCOME & RELATED AGGREGATES
6 UNIT VI MONEY & BANKING
7 UNIT VII DETERMINATION OF INCOME & EMPLOYEMENT
8 UNIT VIII GOVERNMENT BUDGET & THE ECONOMY
9 UNIT IX BALANCE OF PAYMENT
SUB TOTAL 8X1=8
SS XII ECONOMICS
SHORT ANSWER SHORT ANSWER LONG ANSWER TOTAL
3 MARKS 4 MARKS 6 MARKS
- 1 - 4
- 1 1 13
1 1 1 13
1 - 1 10
ONOMICS
4 X 3 = 12 6 X 4 = 24 6 X 6 = 36 80 (24)
SAMPLE QUESTION PAPER ECONOMICS
INSTRUCTIONS-
a) All question in both sections are compulsory. However there is
internal choice in some questions.
b) Marks for questions are indicated against each question.
c) Question no. 1-4 & 13-16 are very short answer question carrying 1m
each. They are required to be answered in one sentence.
d) Question no. 5-6 & 17-18 are short answer question carrying 3m
each. Answer to them should not normally exceed 60 words each.
e) Question no. 7-9 & 19-21 are also short answer question carrying 4m
f) Question no. 10-12 & 22-24 are long answer question carrying 6m
g) Answers should be brief and to the point and above word limit be
adhered to as far as possible.
_____________________________________________________________________________________
SECTION A- MICROECONOMICS.
1. State the meaning of scarcity.
(1m)
2. If a firm s production department data says that the total variable

cost for producing 8 units and 10 units of output is Rs.2500 and
Rs.3000 respectively, marginal cost of 10th unit will be
(1m)
a) Rs.100 b) Rs.150 c) Rs.500 d) Rs.250
3. If the value of marginal revenue is zero, total revenue will be?

(1m)
4. State the formula for price elasticity of supply by percentage

method. (1m)
5. Define normative economics , with a suitable example.

(3m)
6. Distinguish between the demand and quantity determined.

(3m)
7. Comment upon the degree of elasticity of demand for Good-X, in the

following given situations, if the price of the commodity rises from Rs. 5
per unit to Rs. 7 per unit and the quantity demanded falls from 20 units
to 16 units, using proportionate method.
(3m)
8. Discuss the primary reason for indeterminateness of demand under

the oligopoly form of market. (4m)
9. State and explain the behavior of marginal physical product, under

returns to a factor, using a hypothetical schedule.
(4m)
10. Identify which of the following is true for the indifference curves.
Give valid reason for choice of your answer.
a) Lower indifference curve represents lower level of satisfaction.

b) Two regular convex to origin indifference curves can intersect each
other.
c) Indifference curve must be convex to origin at the point of tangency

with the budget line at the consumer s equilibrium.
d) Indifference curve are drawn under the cardinal approach to

consumer equilibrium. (6m)
11. Complete the following Cost schedule.

(6m)
Units Marginal Average Total Cost Average Fixed

Produced Cost Variable Cost Cost
0 - - 60 -
1 60 ….. 120 ….
2 ……. …… 174 ….
3 ……. 54 ….. ….
4 54 …... ….. 15
5 …… 57 345 ….
12. Define price floor. What is the common cost of fixation of floor
price by the government? Explain any one likely consequence of this
nature of intervention by the government.
Section-B: macroeconomics
13. Supply of money refers to quantity of money
(1m)
a) As on 31st march. b) During any specific

period of time.
c) As on any point of time. d) During a fiscal year.
14. Primary deficit is equal to:

(1m)
a) Fiscal deficit less Interest b) Revenue

Deficit less borrowings
c) Borrowing less interest of payment. d)

Borrowing less Fiscal Deficit
15. Which of the following is not a Qualitative method of credit

control? (1m)
a) Open market operation b) Margin

requirements
c) Variable reserve ratio d) Bank rate

policy
16. What are Subsidies ?

(1m)
17. If an economy :
(3m)
a) Consumption function is given by C =100 + 0.75 Y b) Autonomous

investment is Rs. 150 crore.
Estimate (i) Equilibrium level of income. (ii) Consumptions and savings

at the equilibrium level of income.
18. Distinguish between Ex-post and Ex-ante investments.

(3m)
19. GDP as an index of welfare may understate or overstate welfare .
Explain the statement using examples of a positive and a negative
externality. (4m)
20. Discuss how the central bank plays the role of controller of credit
in an economy? (4m)
21. (a) Fiscal deficit is necessarily inflationary in nature . Do you

agree? Support you answer with valid reason.
(b) Elaborate economic growth as an objective of government

budget. (2+2 = 4 )
22. Compute (a) National Income (b) GNP at MP and (c) NDP at FC from
the following table.
S.NO Items Amount (in cr.)

1 Mixed income of self employed 2500
2 Net factor income from abroad (-) 50
3 Rent 500
4 Consumption of fixed capital 400
5 Corporation tax 700
6 Profits 300
7 Net retained earnings of private enterprises 500
9 Net indirect taxes 500
10 Net exports (-) 40
11 Interest 500
12 Direct taxes paid by households 300
23. What is the range of values of investment multiplied? Clarify the
relation of investment multiplier with marginal propensity to consume
(MPC) and with marginal propensity to save (MPS). (6m)
24. (a) Explain how Depreciation of currency promotes exports of a
country?
(b) Draft short note on Managed floating exchange rate system ?

(6m)
MARKING SCHEME
ANSWER KEY
SECTION A: MICROECONOMICS
1. Scarcity is a situation where the availability of resources
falls short of their requirements.
2. (d)
3. TR will be maximum.
4. Ed= change in quantity demanded x original price
Change in price original quantity
5. Economics as a ͚Normative science͛ deals with situations
of value judgments or condition of ͚what ought to be͛.
Eg. India should create more employment opportunities.
6. =(4\2) x (5\20)
= 0.5 (Ed<1, relatively inelastic demand).
7. 3.6 (Ed>1, relatively elastic demand).
8. Indeterminateness of Demand Curve: in an oligopoly form
of market no single firm can predict its prospective sales
with perfection. This is because any given change in the
price/output decision by a rival firm would initiate a series
of actions, reactions and counter actions by other.
Therefore there is no certain nature and position of
demand curve under this form of market for a firm.
9. (a) MPP initially rises to its maximum.
(b) MPP then decrease (stays positive) to become zero
(c) MPP becomes negative.
10. (a) False
(b) True
(c) True
(d) False
11. Numerical answer solve with the formula
12. PRICE FLOOR
A Price floor is the lowest legal price of a commodity at
which it can be solved, fixed by the government. Price floors
are used by the govt. to prevent prices for being too low. The
main reason for imposing the price floor policy is the farewell of
the producers/ farmers.
Examples, the minimum wages, minimum support price.
CONSEQUENCE: Buffer stock
SECTION B: MACROECONOMICS
13. (c)
14.(i)
15. (ii)
16. Subsidies are the economic assistance given by the govt. to
the firms and households, with a motive of general welfare.
17. (i) At equilibrium level of income = 1000 crore
(ii) C= 150 crore
18. Ex- post investments are the actual level of the investments
in the economy whereas the Ex-Ante investments are the
planned level of the investments in the economy.
19. GDP doesn͛t account for externalities.
Positive externality: Eg, increases welfare
Negative externalities: Eg, pollution from factories, decreases
welfare.
20. (i) Quantitative techniques (ii) Qualitative techniques
21. Proper answers (fiscal deficits and economic growth).
22. National income = 5350 crore
GNP at MP = 6250 crore
NDP at FC = 5400 crore
23. Range of investment multiplier = one to infinity
Relation: if MPC rises, investment multiplier: positive
relation, whereas if MPS arises, investment multiplier falls:
inverse relation. (Relation to be supported by the numerical
examples or explanation).
24. (a) when price of foreign currency in terms of domestic
currency rises in the foreign exchange market it is termed as
depreciation of domestic currency
(b) managed floating system is a hybrid system which is
amalgamation of the fixed exchange rate system and floating
exchange rate system
Practice Paper
MARKING SCHEME
QN ANSWERS Marks
SECTION-A
1 (d) the choice of goods and services 1
2 (a)MU 1
3 Marginal rate of substitution refers to the rate at which the consumer is willing to 1
sacrifice good-Y for a unit more of good-X.
4 (b)fall in demand for other 1
5 PPC is drawn on the assumption that the given resources are fully as well as efficiently 3
utilized. Unemployment is a situation when resources are not fully utilized. Or, it is a
situation of underutilization of resources. It would mean that the economy is not
operating on the PPC but somewhere inside the PPC. PPC would not shift.
OR
‘Make in India’ campaign focuses on the inflow of foreign capital in the domestic
economy. It would increase the availability of resources in the domestic economy.
Accordingly, PPC would shift to the right.
6 Meaning: Producer’s equilibrium refers to a situation where profits are maximized. 1 3

Mark.
Conditions: i) MR=MC
ii) MC is greater than MR beyond the point of equilibrium. 2 Marks.
7 P=50, P1=60, ΔP=10, Q=200, Ed= (- )1 4

Formula: 1 Mark
ΔQ 5
Calculation: 1 Mark - 1= x
ΔQ= - 40 1 Mark
New Quantity= 160 1 Mark
8 (i)When TR increases at decreasing rate MR should be diminishing. 1 Mark 4

(ii)When TR increase at constant rate MR should be constant. 1 Mark
Proper diagram: 2 Marks.
OR
Output
TVC AVC MC
(Units)
1 20 20 20
2 32 16 12
3 54 18 22
Page 1 of 5
4 80 20 26
9 Due to large number of firms, homogenous product and perfect knowledge, price is 4
determined by the forces of market demand and market supply. A firm sells its output
at the given price. Therefore, a firm under perfect competition is a price taker, not a
price maker. Or any other relevant points.
10 𝑀𝑈𝑥 6
Consumer attains equilibrium when: = MU of money
𝑃𝑥
[ Here, MUx = Marginal utility of X; Px = Price of X ]
Or when: MUx = Px * MU of money
When X= 4, MUx = Px * Mum = 6 [ Mum = 1]

The consumer should purchase 4 units in order to get maximum satisfaction.
OR
Taking MUm as constant, a fall in Px (by way of subsidy) would mean that
𝑀𝑈𝑥
> MUm. The consumer’s equilibrium is disturbed. But the change is good for the
𝑃𝑥
consumer. Induced by lower Px, the consumer increases the consumption of LPG. A
𝑀𝑈𝑥
rise in the consumption of LPG leads to a fall in MUx. The equilibrium = MUm is
𝑃𝑥
now established at a higher level of consumption of LPG. The subsidy plays its role by
increasing the consumption of LPG, as desired by the government. Consumer’s
equilibrium is shifted to a higher level of satisfaction, even when his income remains
constant.
11 Change in Supply Change in Quantity Supplied 6

Price constant, change in other factors Price changes, other factors constant.
Shift of supply curve, either right or left. Movement along the supply curve,
either upward or downward.
Increase and decrease in supply. Expansion and contraction of supply
Diagram Diagram
Any other relevant points. 1 Mark each point. Diagrams 2 marks. (4+2 = 6)
12 6
When drought severally damages the wheat crop, it leads to decrease in supply. Supply
curve shifts to the left. 2 marks.
Correct diagram: 2 marks.
Fall in equilibrium quantity, rise is equilibrium price: 2 marks.
SECTION-B
13 (a)Rs.60 1
14 (a)autonomous investment 1
15 Balance of trade is defined as the difference between the value of imports and exports of 1
Page 2 of 5
only physical goods or visible items.
16 (i)domestic currency has depreciated 1
17 As a banker’s bank, central bank has almost the same relation with other banks in the 3
country as a commercial bank has with its customers. It accepts deposits from the
commercial banks and offers them loans. The rate at which the central bank offers loans
to the commercial banks is called repo rate. The rate at which commercial banks are
allowed to park their surplus funds with the RBI is called reverse repo rate.
OR
Central bank is a banker, agent and financial advisor to the government. As a banker to
the government, it manages accounts of the government. As an agent to the government,
it buys and sells securities on behalf of the government. As an advisor to the
government, it frames policies to regulate the money market.
18 i)Exchange has become much simpler, and therefore, expanded considerably. 3

Expansion of exchange leads to expansion of value addition.
ii) Exchange function of money has changed the nature of production activity.
Production now is done more for the market and less for self-consumption.
iii) Exchange function of money has separated the acts of sale and purchase.
Accordingly, size of the market has considerable expanded.
19 (i)False. National income can be less than domestic income. National income is greater 4
than domestic income only when net factor income from abroad is positive.
(ii)False. Income from exports is a part of net exports and therefore a component of
gross domestic product. (2+2 = 4)
20 Investment multiplier refers to the number of times by which there is increase in income 4
as a result of increase in investment. It is measured as the ratio between change in
income and change in investment. 2 marks.
Any suitable example: 2 marks.
21  Devaluation is the fall in the value of domestic currency in relation to foreign 4

currency as planned by the government in a situation when exchange rate is not
determined by the forces of supply and demand but fixed by the government of
different countries.
 Depreciation is the fall in the value of domestic currency in relation to foreign
currency in a situation when exchange rate is determined by the forces of supply and
demand in the international money market.
OR
Cancellation of coal blocks allocation is likely to cause a fall in supply of coal,
Particularly for the production of electricity. Since coal is the core input for the
generation of power in India, a cut in domestic supply is bound to cause a rise in
imports. Our import bill is bound to rise. A rise import payments implies a rise in
Page 3 of 5
current account deficit, other things remaining constant.
22 Deficient demand refers to a situation when aggregate demand is short of aggregate 6

supply corresponding to full employment in an economy. 1 Mark.
Proper diagram with explanation: 3 marks.
Role of Open market operations: During the situation of deficient demand, the central
bank tries to buy securities. Purchase of securities injects purchasing power into the
market. Consequently, aggregate demand is increased: 2 marks.
23 i) Revenue deficit = Revenue expenditure – Revenue receipts 6

= Rs. 22,250 – Rs 17,750 crore
= Rs. 4,500crore
ii) Fiscal deficit = (Revenue expenditure + Capital expenditure ) – ( Revenue receipts +
capital receipts(net of borrowings))
=( 22,250+28,000) – (17,750+20,000)
= 50,250 – 37,750
=Rs. 12,500crore.
iii) Primary deficit = Fiscal deficit – Interest payments
= 12,500 – 5,000
= Rs. 7,500crore. (2+2+2 =6)
OR
(i) Receipts from sale of shares of public sector undertaking are a capital receipt, as it
causes reduction in assets of the government.
(ii) Borrowing from public is a capital receipt, as it creates liability for the
government.
(iii) Profit of public sector undertakings is a revenue receipt, because it neither creates
liability not leads to reduction in assets of the government.
(iv) Income tax received by the government is a revenue receipt, because it neither
creates liability nor leads to reduction in assets of the government. (1 ½ x 4 = 6)
24 (i) National Income by Income Method 6

NNPfc = Compensation of Employees + Rent + Interest + Profit + NFIA
= 1200 + 300 + 200 + 600 + (-)50
= 2300 – 50
= 2250
Natiional Income = Rs. 2250 crores.
(ii) National Income by Expenditure Method
NNPfc = Private final consumption expenditure + Govt. final consumption
expenditure + Net domestic capital formation + Net exports + Net factor
income from abroad – Net Indirect taxes
= 1300 + 730 + 360 + (-)20 + (-)50 – 70
= 2390 – 140
= 2250
National Income = Rs. 2250 crores.(3 + 3 = 6)
Page 4 of 5
Page 5 of 5
Practice Paper
CLASS: XII MaximumMarks: 80

SUBJECT: ECONOMICS Time Allowed: 3.00 Hours
i. Please check that this question paper contains 9 printed pages.
ii. Please check that this question paper contains 24 questions.
iii. Please write down the Serial Number of the question before attempting it.
iv. All questions in both the sections are compulsory.
v. Marks for questions are indicated against each question.
vi. Question Nos. 1-4 and 13-16 are very short-answer questions carrying 1 mark each. They are
required to be answered in one sentence each.
vii. Question Nos. 5-6 and 17-18 are short-answer questions carrying 3 marks each. Answer to them
should normally not exceed 60 words each.
viii. Question Nos. 7-9 and 19-21 are also short-answer questions carrying 4 marks each. Answer to them
ix. Question Nos. 10-12 and 22-24 are long-answer questions carrying 6 marks each. Answer to them
x. Answer should be brief and to the point and the above word limits should be adhered to as
far as possible.
SECTION A
1. The problem of ‘what to produce’ relates to: 1
(a) the choice of technique
(b) distribution of income
(c) market value of goods and services
(d) the choice of goods and services.
2. The rate at which Total Utility changes is indicated by: 1

(a) MU (b)TU (c)both (a) and (b) (d)none of these
3. Define Marginal rate of substitution. 1
4. If two goods are complementary, then rise in the price of one, result in: 1
(a) rise in demand for other
(b) fall in the demand for other
(c) rise in demand for both
(d) fall in demand for both
5. “Massive unemployment shifts the PPC to the left”. Defend or refute.

3OR
‘Make in India’ campaign would shift the PPC to the right. How?
6. What is meant by producer’s equilibrium? What are its main conditions? 3
7. Price of the commodity increase from Rs.50 to Rs.60 per unit. Quantity
demanded initially was 200 units. What should be the new quantity so that
elasticity of demand is established to be unitary? 4
Page 1 of 4
8. What will be the effect of the following changes in Total Revenue, on marginal
revenue? Show in a diagram.
i. Total revenue increases at a decreasing rate.
ii. Total revenue increases at a constant rate. 4
OR
Complete the following table:
Output (Units) TVC AVC MC
1 20 - -
- - 16 12
3 54 - -
- - 20 26
9. Why a firm under perfect competition is a price taker not a price maker?
Explain. 4
10. The price of a commodity is Rs.6 per unit. As per following table how many
units should the consumer purchase to maximize satisfaction? (Assumed that
utility is expressed in utils and 1 util = Rs.1). Give reasons for your answer. 6
Consumption(units) TU (utils) MU (utils)

1 10 10
2 18 8
3 25 7
4 31 6
5 34 3
6 34 0
OR
𝑀𝑈𝑥
Explain economic value of the following equation, 𝑃𝑥 = MUm when x is
domestic fuel (LPG) and Px is lower by way of subsidy by the government.
11. Differentiate between ‘change in supply’ and ‘change in quantity supplied’.

Use diagrams. 6
12. Due to drought the crop of wheat has been damaged, what kind of supply do
you expect in the market? How will the market adjust itself to new supply?
Show with the help of a diagram. 6
SECTION B
13. If MPS is 0.6, what will be ΔS when income increases by Rs. 100? 1
(a) Rs.60 (b)Rs.50 (c)Rs.40 (d)Rs.70
14. Investment which is dependent on the level of income is called: 1

(a) Autonomous investment
(b) Induced investment
Page 2 of 4
(c) Fixed investment
(d) Inventory investment
15. What is meant by ‘balance of trade’? 1
16. If Rs.120 are required to buy $2, instead of Rs.100 earlier, then: 1
(a) Domestic currency is depreciated
(b) Domestic currency is appreciated
(c) No change in the value of domestic currency
(d) None of the above
17. Explain ‘Banker’s Bank’ function of the central bank. 3

OR
Explain ‘Banker to the government’ function of central bank.
18. Why we need Foreign Exchange? 3
19. Giving reasons, state the following whether ‘True’ or ‘False’. 4

i. National income is always greater than domestic income.
ii. National Income at constant prices is the real indicator of growth.
20. What is meant by investment multiplier? Explain with the help of suitable
example. 4
21. Explain current account of Balance of Payment.

OR
Explain capital account of Balance of Payment. 4
22. Explain the equilibrium level of an economy with the help of Aggregate
demand and Aggregate supply. 6
23. Calculate Revenue deficit, Fiscal deficit and Primary deficit from the following:
Items Rs. crore

1 Revenue expenditure 22250
2 Capital expenditure 28000
3 Revenue receipts 17750
4 Capital receipts (net of borrowings) 20000
5 Interest payment 5000
6 Borrowing 12500
OR
Categorise the following government receipts into revenue and capital
receipts. Give reasons:
i. Receipts from the sale of shares of a publicsector undertaking.
ii. Borrowing from public.
iii. Profit of public sector undertaking
iv. Income tax received by the government 6
Page 3 of 4
24. Calculate national income by (i) Income method and (ii) Expenditure method
from the following data.
Items Rs. Crore
i Net domestic capital formation 360
ii Interest 200
iii Rent 300
iv Private final consumption expenditure 1300
v Government final consumption expenditure 730
vi Net exports -20
vii Net indirect taxes 70
viii Net current transfers from the rest of the world 80
ix Consumption of fixed capital 60
x Net factor income from abroad -50
xi Profits 600
xii Compensation of employees 1200
---------------x-----------------
Page 4 of 4
Sample Question Paper
Class XII (2017-18)
Economics (030)
MM. 80 Time: 3 Hours
Q.No. SECTION A : MICROECONOMICS Marks

1 Which of the following is a statement of normative nature in economics? 1
a) Economics is study of choices/alternatives.
b) Government should be concerned with how to reduce unemployment
c) According to an estimate, in spite of severe shortage, more than 10% of houses
in Indian cities are lying vacant.
d) Accommodation of Refugees is posing a big problem for the Europe
2 Define Marginal Physical Product. 1
3 A firm is operating with a Total Variable Cost of 500 when 5 units of the given 1
output are produced and the Total Fixed Costs are 200, what will be the Average
Total Cost of producing 5 units of output?
i) 140 ii) 100 iii ) 120 iv) 300
4 In an imperfectly competitive market, if the Total Revenue is maximum, Marginal 1
Revenue will be ......................
5 State and discuss any two factors that will shift the Production Possibility Frontier 3
(PPF)to the right.
Or
Draft a hypothetical schedule for a straight line Production Possibility Curve.
6 Giving reason, state the impact of each of following on demand curve of a normal 3
good ‘X’ if
i) Price of its complementary good falls.
ii) News reports claims that consumption of product X has harmful effect
on human health.
iii) Income of consumer increases,
7 a. Arrange the following coefficients of price elasticity of demand in ascending order: 1
-0.87, -0.53, -3.1, -0.80
b. Comment upon the degree of elasticity of demand for commodity X,if the price of 3
the commodity falls from 28 per unit to 23 per unit and its quantity demanded rises
from 50 units to 100 units.
8 What is meant by Price Floor? Discuss in brief, any one consequence of imposition of 4
floor price above equilibrium price with help of a diagram.
. Or
How is the price of a commodity determined in a perfectly competitive market?
Explain with help of a diagram.
9 Explain how the following factors affect the supply of the commodity (any two) 4
a) Price of factor inputs b) State of technology c) Government taxation
Policy
10 a) A consumer, Mr Aman is in state of equilibrium consuming two goods X and Y, 2
with given prices Px and Py . What will happen if ?
b) Identify which of the following is not true for the Indifference Curves theory. Give 4
valid reasons for choice of your answer:
a. Lower indifference curve represents lower level of satisfaction.
b. Two indifference curves can intersect each other.
c. Indifference curve must be convex to origin at the point of tangency with
the budget line at the consumer’s equilibrium.
d. Indifference curves are drawn under the ordinal approach to consumer
equilibrium.
OR
A consumer has total money income of 500 to be spent on two goods X and Y with
prices of 50 and 10 per unit respectively. On the basis of the given information,
answer the following questions:
a. Give the equation of the budget line for the consumer. 1
b. What is the value of slope of the budget line? 1
c. How many units can the consumer buy if he is to spend all his money
income on good X? 2
d. How does the budget line change if there is a 50% fall in price of good Y? 2
11 a) Why is Total Variable Cost curve inverse S- shaped? 2

b) What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a 4
rectangular Hyperbola? Explain with help of a diagram.
12 Suppose the value of demand and supply curves of a Commodity-X is given by the 6
following two equations simultaneously:
Qd = 200 –10p Qs = 50 + 15p
i) Find the equilibrium price and equilibrium quantity of commodity X.
ii) Suppose that the price of a factor inputs used in producing the
commodity has changed, resulting in the new supply curve given by the
equation
Qs’ = 100 + 15p
Analyse the new equilibrium price and new equilibrium quantity as
against the original equilibrium price and equilibrium quantity.
SECTION B : MACROECONOMICS
13 Define money supply? 1
14 State one fiscal measure that can be used to reduce the gap between rich and poor. 1
15 Define the capital receipts of a government. 1

16 From the following data calculate Fiscal Deficit 1
S.No Item • in Billions

1 Capital Receipt 68
2 Revenue Expenditure 160
3 Interest Payment 20
4 Borrowings 32
5 Tax Revenue 50
6 Non- Tax revenue 10
17 Estimate the value of ex-ante AD, when autonomous investment and consumption 3
expenditure (A) is 50 crores, and MPS is 0.2 and level of income is 300 crores.
Or
Calculate Multiplier when MPC is and . From the calculations establish the relation
between size of Multiplier and size of MPC?
18 Discuss the significance of 45 degree line in Keynesian Economics. 3
19 Elaborate ‘economic growth’ as objective of government budget. 4
20 Use following information of an imaginary country: 4
Year 2014 – 2015 2015– 2016 2016 - 2017
Nominal 6.5 8.4 9

GDP
GDP deflator 100 140 125
i) For which year is real GDP and nominal GDP same and why?
ii) Calculate Real GDP for the given years. Is there any year for which Real GDP falls?
21 How will ‘Reverse Repo Rate’ and ‘Open Market Operations’ control excess money 4
supply in an economy?
Or
Illustrate with the help of a hypothetical numerical example the process of credit
creation.
22 a) Define Externality. 2
b) Find National Income from following using expenditure method 4
• (in crores)
1 Current transfers from rest of the world 50

2 Net Indirect taxes 100
3 Net Exports - 25
4 Rent 90
5 Private Final Consumption Expenditure 900
6 Net Domestic Capital Formation 200
7 Compensation of Employees 500
8 Net Factor Income from Abroad - 10
9 Government Final Consumption Expenditure 400
10 Profit 220
11 Mixed Income of Self Employed 400
12 Interest 230
Or
Will the following factor income be included in domestic factor income of India? Give
reasons for your answer:-
(i) Compensation of employees to the resident of Japan working in Indian
embassy in Japan.
(ii) Payment of fees to a Chartered Accountant by a firm
(iii)Rent received by an Indian resident from Russian embassy in India.
(iv) Compensation given by insurance company to an injured worker.
23 State whether the following statements are true or false. Give valid reasons for your 6
answers.
(i) Unplanned inventories accumulate when planned investment is less than planned
saving.
(ii) Deflationary gap exists when aggregate demand is greater than aggregate supply at
full employment level.
(iii) Average propensity to save can never be negative.
24 a) ‘Devaluation and Depreciation of currency is one and the same thing’. Do you 3
agree? How do they affect the exports of a country?
b) What is meant by ‘official reserve transactions’? Discuss their importance in 3
Balance of Payments.
Marking Scheme
Economics (030)
Cass XII (2017-18)
SECTION A : MICROECONOMICS
1 b) Government should be concerned with how to reduce unemployment 1
2 Marginal Physical Product is the change in output produced by employing one additional unit 1
of the variable input. It can be calculated as :
=
or
= -
3 i) 140 1
4 Zero. 1
5 Two factors that may shift the Production Possibility Frontier of an economy away from 3
origin (to the right) are:
(a) Increase in resources available to an economy (natural, physical or human resource).
New resources may increase the output potential in an economy resulting in shift of
PPF away from origin.
(b) Improvement in technology, when technology improves the production potential

increases, i.e. economy may be able to produce more output using existing resources
efficiently.
Or
Since Marginal Rate of Transformation is constant, PPC will be a straight line.
6 (i) Demand of the good X will increases, hence demand curve of good X shifts towards 3
right.
(ii) Demand of Good X may decrease as people may be inclined to consume less due to
media reports of harmful effect of the good X, as a result, demand curve may shift
towards left.
(iii)When income of consumer increases the disposable income increases and consumer is
in a better position of spending more on the good X. Hence consumer may consume
more of the commodity due to which the demand for the good increases and demand
curve shifts away from origin.
7 a) -0.53, -0.80, -0.87,- 3.1 (minus sign only represents the inverse relation between price and 4
quantity demanded)
b)
Price (in ) Quantity (in units)
Original = 28 Original = 50
New = 23 New = 100
Ed = Change in Quantity Demanded x Original Price

Change in Price Original Quantity (Absolute values taken)
= X
= 5.6 (Ed>1, relatively more elastic demand.)
8 A Floor price is the minimum price at which a commodity can be sold legally. Floor price if 4
fixed above the equilibrium price, serves the purpose of welfare of the producers (say
farmers). When price floor is fixed at P” quantity demanded will contract to OQ” but at this
price, suppliers will be ready to supply OQ’. As a result, surplus of QQ” will emerge.
Imposition of floor prices above equilibrium price will have the following major implications:
a) Surpluses: The quantity actually brought and supplied will shrink as a direct consequence
of price flooring, as a result, a part of producer’s stock will remain unsold. As shown in the
figure the surplus of Q’Q” arises.
b) Buffer Stock: In order to maintain the support price, the government may design some
programmes to enable producers to dispose of their surplus stocks. One such programme can
take the form of buffer stock. Government may purchase the surplus to store or sell it at
subsidised prices. Subsidy is required to lower the price and make it competitive in the
market. Government may also use it as aid and send it to other countries.
(any one to be explained)
Or
Price of a commodity is determined by market demand and market supply of a commodity,

(i.e. industry is the price maker).
An individual producer/firm has no role in the determination of the price of the commodity
(firm is a price taker).
No individual seller or buyer can influence the price of the commodity.
DD and SS are Market demand and market supply curves intersecting at E. OQ quantity
(Equilibrium Quantity) would be offered for sale and demanded by the buyers at OP price
(Equilibrium Price) per unit. The industry is in equilibrium.
9 Supply of a commodity is affected by following factors: 4
a) Price of factor Inputs: If factor input price increases, cost of production generally rises,
accordingly producers are willing to supply less at the existing price as the profit probability
decreases. This implies leftward shift in supply curve and vice-versa, keeping other factors
constant.
b) State of Technology: Improvement in technique of production raises productivity and
generally lowers per unit cost of production, consequently the probability to earn more profit
also increases and hence the producer is induced to supply more, as a result supply curve
shifts towards right.
c) Government Taxation Policy: If government increases taxes, it will affect the cost of
production adversely and hence supply decreases. But if Government decreases the tax the
cost of production will fall and the producer will be induced to increase the supply of the
commodity,ceteris paribus.
10 a) If , then it means that satisfaction derived from consumption of good X is greater 2
than the satisfaction derived from consumption of Good Y.

Mr Aman will reallocate his income by spending more on good X. Utility derived from X
goes on diminishing and reverse preposition occurs for Good Y, this process will continue till
becomes equal to .
b) The second statement ‘ Two regular convex to origin indifference curves can intersect
each other' is not true as the intersection of two regular indifference curves indicate one 4
such point (point of intersection) which yields the similar satisfaction of two different
indifference curves which is not possible. In the figure there are two indifference curves
IC1 and IC2 intersecting each other, there is clear violation of assumption of monotonic
preference.
As per figure satisfaction derived at point A = satisfaction derived at point C ( on IC1)
And satisfaction derived at point D = satisfaction derived at point E ( on IC2)
At intersecting point B;
Satisfaction derived by consumer at points A, C and B is equal and

A = C = B (On IC1)
D = E = B (On IC2)
Consequently A = D (which is absurd)
Thus we can say that IC’s can’t intersect each other.
OR
a)
+ =M 1
50 + 10 = 500
b) Slope of Budget Line = (-) = (-) = (-) 5 1
c) IfQy= Zero, then

2
50Qx + 10Qy = 500
50Qx + 10(0) = 500

= = 10 units
d) 2
Old Py = 10
New Py = 5
(50% of 10 = 5)
If Py falls the consumer will be able to buy more of good Y in the same money income pushing
the Y-intercept of the Budget Line away from origin, keeping the X-intercept constant, it rotates
outwards and the equation will be 50Qx +5Qy = 500.
11 a) Total Variable Cost is zero at zero level of output. It initially increases at decreasing rate 2
and later it increases at increasing rate. TVC is an inversely S-shaped curve due to the Law of
Variable Proportion.
b) Per unit fixed cost is known as Average Fixed Cost. As the value of Total Fixed Cost 4
doesn’t vary at any level of output in short run and if it is divided by an incremental number
the result would be diminishing with the same proportion as that of the proportion of increase
of the number of units and the product will be same.
Since TFC remains same at different levels of output, AFC falls as the level of output is
increased.
The AFC keeps on falling as the level of output increases. AFC can never become zero.
12 (i) We know that the equilibrium price and quantity are achieved at; 3
Qd = Qs
200- 10 p = 50 +15p
150 = 25p
Therefore, Equilibrium Price p = 6

And, Equilibrium Quantity q = 200 – (10) (6) = 140 units
ii) If the price of factor of production has changed, then under the new conditions;
3
Qd = Qs
200- 10p = 100 + 15p
25p = 100

And, Equilibrium Quantity q = 200 – (10)(4) = 160 units
Thus as the equilibrium price is decreasing the equilibrium quantity is increased.
SECTION B : MACROECONOMICS
13 Money supply of a country is a stock of money in circulation at any point of time. 1
14 a. Increasing the investment expenditure which will directly benefit the poor. 1
b. Increasing the taxes on rich and using the same amount to benefit the poor.
(any one or any other relevant measure)
15 All money mobilised by government that either creates a liability of repayment on 1
Government or involves reduction in some of an asset by selling it off.
16 Fiscal Deficit = Borrowings = 32 Billion 1
17 MPC = 1 – MPS 3
MPC = 1 – 0.2
MPC = 0.8
AD = C+I
AD = A +bY
AD = 50 + 0.8 (300)
AD = 290 Crores
Or
Multiplier =
When MPC = ;
K= = =5
When MPC =
K= = = 2
Observing the same we may conclude that there exist positive or direct relation between MPC
and Investment Multiplier.
Investment Multiplier coefficient measures the change in final income with respect to given
change in the initial investment in the economy. It carries direct relation with rate of growth in
an economy, i.e. higher the MPC more chance of growth exists in an economy. But, it is a two
sided sword hence if investment falls in an economy the income may also fall.
18 Aggregate Supply is obtained by adding consumption and saving schedules. The straight line 3
obtained which will originate from point of origin will form a 45 degree angle there by
establishing the relation of
Y = C+S
Level of Income (Y) Consumption Saying (Y-C) Y = AS = C+S
expenditure ( C )
0 200 -200 0
100 250 -150 100
200 300 -100 200
300 350 -50 300
400 400 0 400
500 450 50 500
600 500 100 600
700 550 150 700
At all points on 45 degree line, Consumption is equal to Income. It helps under the Keynesian
Economic analysis.Since the two variables (consumption/Aggregate Expenditure and Income)
are measured in the same units, the 45-degree line has a slope of one and it bisects the 90-
degree angle formed by the two axes.
19 Economic Growth implies a sustainable increase in real GDP of an economy, i.e. an increase 4
in volume of goods and services produced in an economy. Budget can be an effective tool to
ensure the economic growth in a country.
i) If the government provides tax rebates and other incentives for productive ventures
and projects, it can stimulate savings and Investments in an economy.
ii) Spending on infrastructure of an economy enhances the production activity in
different sectors of an economy.Government expenditure is a major factor that
generates demand for different types of goods and services in an economy which
induces growth in private sector too.
However, before planning such expenditure, rebates and subsidies government should check
the rate of inflation and tax rates. Also there may be the risk of debt trap if loans are too high
to finance the expenditure.
20 i) For the year 2011 as it’s the base year 4
ii) The Real GDP declined in the year 2015-2016. It could be due to high rate of inflation or
price levels.
Year 2014-2015 2015 - 2016 2016 – 2017

Nominal GDP 6.5 8.4 9
GDP Deflator 100 140 125
Real GDP
= x 100 6.5 6 7.2

21 Reverse Repo rate is the rate at which Central Bank borrows money funds commercial banks. 4
Increase in Reverse Repo Rate induces banks to transfer more funds to Central Bank and
reduces banks’ ability to create credit.
Open Market Operations refers to buying and selling of government securities by Central
Bank from/to public and commercial banks. Sale of such securities reduces the reserve of
commercial banks and adversely affects bank’s ability to create credit and hence decreases the
money supply in the economy.
Or
The credit creation by commercial banks is determined by amount of initial deposit and the
legal reserve ratio.
Suppose customer deposits 1000 in bank. Bank has to pay interest on this amount for which
bank should lend this money to someone. A part of the amount is to be retained with bank to
meet its customer’s obligations. Say, if LRR is 20%, the banks will keep 20% of deposits as
reserves and will lend remaining 80% i.e. 800. Those who borrow will spend this money and
same 800 will come back to banks in form of deposits. This raises the total deposits to
1,800 now. Banks again keep 20% of 800 as reserve and lend 640 to those who needs. This
will further raise the deposits with banks. In this way deposits will go on increasing @ 80% of
the last deposit. The number of times the total deposit will become, is determined by money
multiplier i.e. 1/LRR = 1/0.2 = 5 times.
Total deposits will be Initial Deposits X Money Multiplier = 1000 X 5 = 5,000
22 a. Externality occurs when the actions of consumers or producers give rise to 6

negative or positive side effects on third party who are not part of these
actions, and whose interests are not taken into consideration. E.g. :-
introduction of metro rail on one hand has increased the prices of property but
has also saved the time and money of general public and has provided safe
means of transport
b. National Income by Expenditure Method = Private Final Consumption

Expenditure + Government Final Consumption Expenditure + Net Domestic
Capital Formation + Net Exports + NFIA - NIT
National Income by Expenditure Method = v + ix + vi + iii + viii - ii
National Income by Expenditure Method = 900 + 400 + 200 + (-25 ) + (-10)

- 100
National Income by Expenditure Method = 1365 Crores
Or
(i) Yes it will be included as its part of Factor Income earned in domestic territory of the
country.
(ii) Payment of fees to a Chartered Accountant is an intermediate expenditure for the firm.
Hence it is to be deducted from the value of output of the firm to obtain value added. Hence it
is not included in domestic factor income of India
(iii) No, as rent received be Indian resident from Russian embassy will be part of Fcator
Income received from abroad as Russian Embassy is not part of domestic territory of the
country.
(iv) No, as compensation is given by insurance company to employee and not by employer.
23 i) True, as planned savings are more causing the Marginal Propensity to Consume to reduce 6
thus Aggregate Demand will fall and producers will have accumulation of inventory.
ii) False, Inflationary Gap exists when actual Aggregate Demand is more than Aggregate
Supply corresponding to full employment level of output in the economy.
iii) False, at income levels which are lower than break-even point, Average propensity to save
can be negative as there will be dissaving in the economy.
24 a) Depreciation and Devaluation both imply a fall in external value of a currency; however the 3
term depreciation is used under the floating exchange rate system that is when the exchange
rate system is determined by the combined market forces of demand and supply. A currency
loses or gains value because of fluctuations in demand and supply.
The term devaluation is used in a system of fixed exchange rates. In this system, the exchange
value of a currency is decided by the government. Devaluation of currency is the deliberate
action of the government.
Depreciation and devaluation of a currency normally encourages exports from a country, as
exports become cheaper for the foreign nationals and foreign currency can now buy more of
domestic goods, i.e. the international competitiveness of the goods and services of such a
nation gets better.
b) The transactions carried on by monetary authorities of a country, which causes changes in 3

official reserves are termed as official reserve transactions
Autonomous receipts and autonomous payments give rise to either deficit or surplus on
balance of payments. The central bank may finance a deficit by :
i. reducing reserves of foreign currency
ii. by borrowing from the IMF or monetary authorities
This will be shown as decrease in reserves.The central bank may use surplus to purchase
foreign securities, foreign currency, gold etc. which may result in increase in reserves of the
nation.
BLUE- PRINT

UNITS Marks
N
Consumer’s
Demand
Producer Behaviour
3 1 1 1 13
and supply
Forms of Market and

Price Determination
competition with
simple applications
National Income and

5 1 1 10
Related Aggregates
Determination of
Employment
Government Budget
8 1 6
and the Economy
8x1= 8 4x3= 12 6x4= 24 6x6= 36 80

ें द्री विद्याल न, ा
SAMPLE QUESTION PAPER

क्षा: 12 िी वि : 80
वि : र्थ ास्त्र वनिाथरि : 3.00
CLASS: XII Maximum Marks: 80
SUBJECT: ECONOMICS Time Allowed: 3.00 Hours.
Roll No.िोल न.
ा ान् वनर्दे :
i. ा ााँच ि लें क प्रश्न त्र ें कद्र प्रष्ठ 8 |
ii. ा ााँच ि लें क प्रश्न त्र ें 24 प्रश्न |
iii. ा प्रश्न ा त्ति वल ना रु िन ल, प्रश्न ा क्र ा िश् वल |
iv. र्दोनों ण् ों ी प्रश्न वनिा थ |
v. प्रत् प्रश्न वनिाथरि ा न कर्द ए ैं |
vi. प्रश्न ख् ा 1-4 र्ा 13-16 व ल त्तिात् प्रश्न , व न ें प्रत् ा1 ैं | न प्रत् ा त्ति ए िाक् ें
ी वक्ष ैं |
vii. प्रश्न ख् ा 5-6 र्ा 17-18 ल त्तिात् प्रश्न , व न ें प्रत् 3 ैं | न प्रत् ा त्ति ा ान् 60
ब्र्दों वि न ीं ोना चाव ए |
viii. प्रश्न ख् ा 7-9 र्ा 19-21 ी ल त्तिात् प्रश्न , व न ें प्रत् 4 ैं | न प्रत् ा त्ति ा ान् 70
ब्र्दों वि न ीं ोना चाव ए |
ix. प्रश्न ख् ा 10-12 र्ा 22-24 ल त्तिात् प्रश्न , व न ें प्रत् 6 ैं | न प्रत् ा त्ति ा ान्
100 ब्र्दों वि न ीं ोना चाव ए |
x. त्ति वक्षप्त र्ा थ् ात् ोन चाव ए र्ा र्ा ि ि र्दी ब्र्द ी ा थ ी कर्दए ान चाव ए |
i. Please check that this question paper contains 8 printed pages.
ii. Please check that this question paper contains 24 questions.
iii. Please write down the Serial Number of the question before attempting it.
iv. All questions in both the sections are compulsory.
v. Marks for questions are indicated against each question.
vi. Question Nos. 1-4 and 13-16 are very short-answer questions carrying 1 mark each. They are
required to be answered in one sentence each.
vii. Question Nos. 5-6 and 17-18 are short-answer questions carrying 3 marks each. Answer to them
viii. Question Nos. 7-9 and 19-21 are also short-answer questions carrying 4 marks each. Answer to
them should normally not exceed 70 words each.
ix. Question Nos. 10-12 and 22-24 are long-answer questions carrying 6 marks each. Answer to
them should normally not exceed 100 words each.
x. Answer should be brief and to the point and the above word limits should be adhered to
as far as possible.
ण्
SECTION A
1. ‘क् ा त् ार्दन क ा ाए’ ी स् ा वनम्न ें क वि ? 1
( ) वनक ा चनाि
( ) ा वि ि
( ) िस् र्ा िाओं ा ाि ल्
(र्द) िस् र्ा िाओं ा चनाि
The problem of ‘what to produce’ relates to :
(a) the choice of technique
(b) distribution of income
(c) market value of goods and services
(d) the choice of goods and services.
2. व र्दि ल ोव ा रििर् थ ो ी , वनर्देव ी ा ी : 1

( ) ी ा ोव ा ( ) ल ोव ा
( ) र्दोनों र्ा (र्द) न ें ो न ी
The rate at which Total Utility changes is indicated by:

(a) MU (b)TU (c)both (a) and (b) (d)none of these
3. ी ा प्रव स्र्ा न र्दि ो रि ाव ीव ए | 1
Define Marginal rate of substitution.
4. र्दो िस् एाँ ि िस् एाँ , ए ी ी ें िवि : 1

( ) र्द ि ी ााँ ें िवि ो ी
( ) र्द ि ी ााँ ें ी ो ी
( ) र्दोनों िस् ओं ी ााँ ें िवि ो ी
(र्द) र्दोनों िस् ओं ी ााँ ें ी ो ी
If two goods are complementary, then rise in the price of one, results in:
(a) rise in demand for other

(b) fall in the demand for other
(c) rise in demand for both
(d) fall in demand for both
5. “ ड़ ान ी िो ािी, त् ार्दन ािना िक्र ो ा ी ि व ा ी ”| क्ष र्िा 3

वि क्ष ें वि ीव ए |
र्िा
‘ न व ा’ व ान त् ार्दन ािना िक्र ो र्दाव नी ि व ाए ा | ?
“Massive unemployment shifts the PPC to the left”. Defend or refute.

OR
‘Make in India’ campaign would shift the PPC to the right. How?
6. त् ार्द लन क् ा ात् थ ? ी ख् े क् ा-क् ा ? 3
What is meant by producer’s equilibrium? What are its main conditions?
7. ए िस् ी ी ें रु.50 रु.60 िवि ो ी | रुिा ें 200 ा ात्रा ी ााँ 4

ी | ााँ ी ी लोच ा िा ि स्र्ाव ोन वलए न ात्रा ी ााँ क नी
ोनी चाव ए?
Price of the commodity increase from Rs.50 to Rs.60 per unit. Quantity
demanded initially was 200 units. What should be the new quantity so that
elasticity of demand is established to be unitary?
8. ल ें वनम्न रिि न थ ोन , ी ा ि क् ा प्र ाि ो ा? ि ी वचत्र ें 4

कर्द ा ए |
( ) ल ी हु र्दि ा
( ) ल वस्र्ि र्दि ा
र्िा
वनम्न ावल ा ो थ ीव ए |
ल रििर् थ रििर् थ
त् ार्दन ( ा ााँ) ी ा ला
ला ला
1 20 - -
- - 16 12
3 54 - -
- - 20 26
What will be the effect of the following changes in Total Revenue, on marginal
revenue? Show in a diagram.
i. Total revenue increases at a decreasing rate.
ii. Total revenue increases at a constant rate.
OR
Complete the following table:
1 20 - -
- - 16 12
3 54 - -
- - 20 26
9. थ प्रव ोव ा ा ाि ें ए थ ी स्िी ाि ो ी , ी वन ाथ ा न ीं, क् ों? स् ि
4
ीव ए|
Why a firm under perfect competition is a price taker not a price maker?
Explain.
10. ए िस्ी ी प्रव ा रु.6 , वनम्न ाि ी ए ोक्ता ो नी वि ो
वि िन वलए क नी ा ााँ रिर्दनी चाव ए? ( व वलव ए ी ोव ा र ल 6
ें व्यक्त ी ा ी ि 1 र ल = रु. 1 ). त्ति ाि र्दीव ए |
ो ( ा ााँ) ल ोव ा ( र ल) ी ा ोव ा ( र ल)
1 10 10
2 18 8
3 25 7
4 31 6
5 34 3
6 34 0
र्िा
𝑀𝑈𝑥
𝑃𝑥
= MUm , ी ि र्र्थ ल् ो ा ए, x िल िन (LPG) ि Px
ि ाि द्वािा वब् ी ाध् ी ा ी |
The price of a commodity is Rs.6 per unit. As per following table how many
units should the consumer purchase to maximize satisfaction? (Assumed that
utility is expressed in utils and 1 util = Rs.1). Give reasons for your answer.
Consumption(units) TU (utils) MU (utils)
1 10 10
2 18 8
3 25 7
4 31 6
5 34 3
6 34 0
OR
𝑀𝑈𝑥
Explain economic value of the following equation, 𝑃𝑥
= MUm when x is
domestic fuel (LPG) and Px is lower by way of subsidy by the government.
11. ‘ र् थ ें रिि थन’ र्ा ‘ र् थ ी ात्रा ें रिि थन’ ि ो ा एाँ | ि ी वचत्र ना ए 6

|
Differentiate between ‘change in supply’ and ‘change in quantity supplied’.
Use diagrams.
12. ाि हुाँ ी ल िा ो ी , ा ाि ें क प्र ाि र् थ ी क्षा ि 6

? न र् थ ाि ा ाि न ो क प्र ाि ा ोव ि ा? ि द्वािा
ा एाँ |
Due to drought the crop of wheat has been damaged, what kind of supply do
you expect in the market? How will the market adjust itself to new supply?
Show with the help of a diagram.
ण्
SECTION B
13. ी ा च प्रिवत्त 0.6 , ें रु.100 िवि ोन ΔS ा ल् क् ा ो ा? 1

( ) रु.60 ( ) रु.50 ( ) रु,40 (र्द) रु.70
If MPS is 0.6, what will be ΔS when income increases by Rs. 100?
(a)Rs.60 (b)Rs.50 (c)Rs.40 (d)Rs.70
14. स् ि ि वन िथ िन िाल वनि ो ा ा ा : 1

( ) स्ि चवल वनि
( ) प्ररि वनि
( ) चल वनि
(र्द) वच वनि
Investment which is dependent of the level of income is called:

(a) Autonomous investment
(b) Induced investment
(c) Fixed investment
(d) Inventory investment
15. ‘व्या ाि लन’ क् ा ात् थ ? 1
What is meant by ‘balance of trade’?
16. िथ रु,100 ी लना ,ें ी 2 लि रिर्दन वलए रु.120 ी िश् ा , ो: 1

( ) िल द्रा ा ल् ह्रा हु
( ) िल द्रा ी ल् िवि हु
( ) िल द्रा ल् ें ो रिि थन न ीं
(र्द) न ें ो न ी
If Rs.120 are required to buy $2, instead of Rs. 100 earlier, then:
(a) Domestic currency is depreciated
(b) Domestic currency is appreciated
(c) No change in the value of domestic currency
(d) None of the above
17. ें द्री ैं ‘ ैं ों ा ैं ’ ा थ ो स् ि ीव ए | 3
र्िा
ें द्री ैं ‘ ि ाि ा ैं ’ ा थ ो स् ि ीव ए |
Explain ‘Banker’s Bank’ function of the central bank.

OR
Explain ‘Banker to the government’ function of central bank.
18. द्रा ा थ ‘विवन ा ाध् ’ त्त्ि ो स् ि ीव ए | 3
Explain the significance of ‘medium of exchange’ function of money.
19. ाि ों ार्, वनम्न ो ‘ ी’ र्िा ‘ ल ’ ाएाँ | 4

I. ‘िाष्ट्री ’ ा ‘ िल ’ वि ो ी |
II. वन ाथ ों , विर्द ों वनिल ािन ा ा ो ी |
Giving reasons, state the following whether ‘True’ or ‘False’.
i. National income is always greater than domestic income.
ii. Income from exports is a part of net factor income from abroad.
20. वनि क् ा ात् थ ? वच र्दा ि द्वािा ा एाँ | 4
What is meant by investment multiplier? Explain with the help of suitable

example.
21. द्रा ा ि ल् न र्ा ल् ह्रा ीच ि स् ि ीव ए | 4

र्िा
ाि वप्र ो थ द्वािा ो ला ब्ल ि न िद्द िन ाि चाल ा ें ा ि ा
प्र ाि ो ा? स् ि ीव ए |
Differentiate between devaluation and depreciation of currency.

OR
How is cancellation of Coal Blocks Allocation by the supreme court of India
likely to affect our current account deficit? Explain.
22. ािी ााँ क् ा ? िव वचत्र द्वािा स् ि ीव ए| र िन ें ली ा ाि 6

कक्र ाओं ी व ा ो स् ि ीव ए |
What is deficient demand? Explain it with the help of a diagram. Explain the
role of open market operations in correcting it.
23. वनम्न ाि ी िा स्ि ा , िा ोव ा ा ि प्रार्व ा ा ा लन ीव ए | 6

र्दें रु. िोड़ ें
1 िा स्ि व्य 22250
2 ाँव व्य 28000
3 िा स्ि प्रावप्त 17750
4 ाँव प्रावप्त ााँ ( िाि लािा ) 20000
5 ब् ा ान 5000
6 िाि 12500
र्िा
वनम्नवलव ि ािी प्रावप्त ों ो िा स्ि प्रावप्त ों र्ा ाँव प्रावप्त ों ें िर् थ ीव ए |
ाि ा एाँ |
I. ािथ वन क्षत्र क्र िों ी व कक्र प्राप्त प्रावप्त ााँ |
II. ािथ वन
III. ािथ वन क्षत्र क्र ा ला
IV. ि ाि द्वािा प्राप्त ि
Calculate Revenue deficit, Fiscal deficit and Primary deficit from the following:
Items Rs. crore
1 Revenue expenditure 22250
2 Capital expenditure 28000
3 Revenue receipts 17750
4 Capital receipts (net of borrowings) 20000
5 Interest payment 5000
6 Borrowing 12500
OR
Categorise the following government receipts into revenue and capital
receipts. Give reasons:
i. Receipts from the sale of shares of a public sector undertaking.
ii. Borrowing from public.
iii. Profit of public sector undertaking
iv. Income tax received by the government
24. विवि र्ा व्य विवि द्वािा िाष्ट्री ा रि लन ीव ए| 6
र्दें रु. िोड़ ें

i वनिल िल ाँ ी वन ाथ 360
ii ब् ा 200
iii ल ान 300
iv नीव व ो व्य 1300
v ि ािी व ो व्य 730
vi वनिल वन ाथ -20
vii वनिल प्रत् क्ष ि 70
viii न् र्द ों वनिल चाल स् ा ि 80
ix स्र्ा ी ाँ ी ा ो 60
x विर्द ों वनिल ािन -50
xi ला 600
xii थचारि ों ा ारिश्र ी 1200
Calculate national income by (i) Income method and (ii) Expenditure method
from the following data.
Items Rs. Crore
i Net domestic capital formation 360
ii Interest 200
iii Rent 300
iv Private final consumption expenditure 1300
v Government final consumption expenditure 730
vi Net exports -20
vii Net indirect taxes 70
viii Net current transfers from the rest of the world 80
ix Consumption of fixed capital 60
x Net factor income from abroad -50
xi Profits 600
xii Compensation of employees 1200

MARKING SCHEME
Q ANSWERS Marks
N
SECTION-A
1 (d) the choice of goods and services 1
2 (a)MU 1
3 Marginal rate of substitution refers to the rate at which the consumer is willing to 1
sacrifice good-Y for a unit more of good-X.
4 (b)fall in demand for other 1
5 PPC is drawn on the assumption that the given resources are fully as well as efficiently 3
utilized. Unemployment is a situation when resources are not fully utilized. Or, it is a
situation of underutilization of resources. It would mean that the economy is not
operating on the PPC but somewhere inside the PPC. PPC would not shift.
OR
‘Make in India’ campaign focuses on the inflow of foreign capital in the domestic
economy. It would increase the availability of resources in the domestic economy.
Accordingly, PPC would shift to the right.
6 Meaning: Producer’s equilibrium refers to a situation where profits are maximized. 1 3

Mark.
Conditions: i) MR=MC
ii) MC is greater than MR beyond the point of equilibrium. 2 Marks.
7 P=50, P1=60, ΔP=10, Q=200, Ed= (- )1 4

Formula: 1 Mark
ΔQ 5
Calculation: 1 Mark -1= x
ΔQ= - 40 1 Mark
New Quantity= 160 1 Mark
8 (i)When TR increases at decreasing rate MR should be diminishing. 1 Mark (ii)When 4

TR increase at constant rate MR should be constant. 1 Mark
Proper diagram: 2 Marks.
OR
1 20 20 20
2 32 16 12
3 54 18 22
4 80 20 26
9 Due to large number of firms, homogenous product and perfect knowledge, price is 4
determined by the forces of market demand and market supply. A firm sells its output at
the given price. Therefore, a firm under perfect competition is a price taker, not a price
maker. Or any other relevant points.
10 Consumer attains equilibrium when: 𝑀𝑈𝑥 = MU of money 6

𝑃𝑥
[ Here, MUx = Marginal utility of X; Px = Price of X ]
Or when: MUx = Px * MU of money

When X= 4, MUx = Px * Mum = 6 [ Mum = 1]
The consumer should purchase 4 units in order to get maximum satisfaction.
OR
Taking MUm as constant, a fall in Px (by way of subsidy) would mean that
𝑀𝑈𝑥
> MUm. The consumer’s equilibrium is disturbed. But the change is good for the
𝑃𝑥
consumer. Induced by lower Px, the consumer increases the consumption of LPG. A
𝑀𝑈𝑥
rise in the consumption of LPG leads to a fall in MUx. The equilibrium 𝑃𝑥 = MUm is
now established at a higher level of consumption of LPG. The subsidy plays its role by
increasing the consumption of LPG, as desired by the government. Consumer’s
equilibrium is shifted to a higher level of satisfaction, even when his income remains
constant.
11 Change in Supply Change in Quantity Supplied 6

Price constant, change in other factors Price changes, other factors constant.
Shift of supply curve, either right or Movement along the supply curve,
left. either upward or downward.
Increase and decrease in supply. Expansion and contraction of supply
Diagram Diagram
Any other relevant points. 1 Mark each point. Diagrams 2 marks. (4+2 = 6)
12 When drought severally damages the wheat crop, it leads to decrease in supply. Supply 6
curve shifts to the left. 2 marks.
Correct diagram: 2 marks.
Fall in equilibrium quantity, rise is equilibrium price: 2 marks.
SECTION-B
13 (a)Rs.60 1
14 (a)autonomous investment 1
15 Balance of trade is defined as the difference between the value of imports and exports of 1
only physical goods or visible items.
16 (i)domestic currency has depreciated 1
17 As a banker’s bank, central bank has almost the same relation with other banks in the 3
country as a commercial bank has with its customers. It accepts deposits from the
commercial banks and offers them loans. The rate at which the central bank offers loans
to the commercial banks is called repo rate. The rate at which commercial banks are
allowed to park their surplus funds with the RBI is called reverse repo rate.
OR
Central bank is a banker, agent and financial advisor to the government. As a banker to
the government, it manages accounts of the government. As an agent to the government,
it buys and sells securities on behalf of the government. As an advisor to the
government, it frames policies to regulate the money market.
18 i)Exchange has become much simpler, and therefore, expanded considerably. 3

Expansion of exchange leads to expansion of value addition.
ii) Exchange function of money has changed the nature of production activity.
Production now is done more for the market and less for self-consumption.
iii) Exchange function of money has separated the acts of sale and purchase.
Accordingly, size of the market has considerable expanded.
19 (i)False. National income can be less than domestic income. National income is greater 4
than domestic income only when net factor income from abroad is positive.
(ii)False. Income from exports is a part of net exports and therefore a component of
gross domestic product. (2+2 = 4)
20 Investment multiplier refers to the number of times by which there is increase in income 4
as a result of increase in investment. It is measured as the ratio between change in
income and change in investment. 2 marks.
Any suitable example: 2 marks.
21  Devaluation is the fall in the value of domestic currency in relation to foreign 4

currency as planned by the government in a situation when exchange rate is not
determined by the forces of supply and demand but fixed by the government of
different countries.
 Depreciation is the fall in the value of domestic currency in relation to foreign
currency in a situation when exchange rate is determined by the forces of supply and
demand in the international money market.
OR
Cancellation of coal blocks allocation is likely to cause a fall in supply of coal,
Particularly for the production of electricity. Since coal is the core input for the
generation of power in India, a cut in domestic supply is bound to cause a rise in imports.
Our import bill is bound to rise. A rise import payments implies a rise in current account
deficit, other things remaining constant.
22 Deficient demand refers to a situation when aggregate demand is short of aggregate 6

supply corresponding to full employment in an economy. 1 Mark.
Proper diagram with explanation: 3 marks.
Role of Open market operations: During the situation of deficient demand, the central
bank tries to buy securities. Purchase of securities injects purchasing power into the
market. Consequently, aggregate demand is increased: 2 marks.
23 i) Revenue deficit = Revenue expenditure – Revenue receipts 6

= Rs. 22,250 – Rs 17,750 crore
= Rs. 4,500 crore
ii) Fiscal deficit = (Revenue expenditure + Capital expenditure ) – ( Revenue
receipts + capital receipts(net of borrowings))
=( 22,250+28,000) – (17,750+20,000)
= 50,250 – 37,750
=Rs. 12,500 crore.
iii) Primary deficit = Fiscal deficit – Interest payments
= 12,500 – 5,000
= Rs. 7,500 crore. (2+2+2 =6)
OR
(i) Receipts from sale of shares of public sector undertaking are a capital receipt, as it
causes reduction in assets of the government.
(ii) Borrowing from public is a capital receipt, as it creates liability for the government.
(iii) Profit of public sector undertakings is a revenue receipt, because it neither creates
liability not leads to reduction in assets of the government.
(iv) Income tax received by the government is a revenue receipt, because it neither
creates liability nor leads to reduction in assets of the government. (1 ½ x 4 = 6)
24 (i) National Income by Income Method 6

NNPfc = Compensation of Employees + Rent + Interest + Profit + NFIA
= 1200 + 300 + 200 + 600 + (-)50
= 2300 – 50
= 2250
Natiional Income = Rs. 2250 crores.
(ii) National Income by Expenditure Method
NNPfc = Private final consumption expenditure + Govt. final consumption
expenditure + Net domestic capital formation + Net exports + Net
factor income from abroad – Net Indirect taxes
= 1300 + 730 + 360 + (-)20 + (-)50 – 70
= 2390 – 140
= 2250
National Income = Rs. 2250 crores.(3 + 3 = 6)
BLUE- PRINT

UNITS Marks
N
Consumer’s
Demand
Producer Behaviour
3 1 1 1 13
and supply
Forms of Market and

Price Determination
competition with
simple applications
National Income and

5 1 1 10
Related Aggregates
Determination of
Employment
Government Budget
8 1 6
and the Economy
8x1=8 4x3=12 6x4=24 6x6=36 80

ें द्री विद्याल न, ा
SAMPLE QUESTION PAPER

क्षा: 12 िी वि त : 80
वि : र्थ ास्त्र वनिाथरित : 3.00
CLASS: XII Maximum Marks: 80
SUBJECT: ECONOMICS Time Allowed: 3.00 Hours.
ा ान् वनर्दे :
i. र्द नों ण् ों ी प्रश्न वनिा थ |
ii. प्रत् प्रश्न वनिाथरित ा न दर्द ए ैं |
iii. प्रश्न ख् ा 1-4 तर्ा 13-16 वत ल त्तिात् प्रश्न , विन ें प्रत् ा1 ैं | न प्रत् ा त्ति ए
िाक् ें ी वक्षत ैं |
iv. प्रश्न ख् ा 5-6 तर्ा 17-18 ल त्तिात् प्रश्न , विन ें प्रत् 3 ैं | न प्रत् ा त्ति ा ान् त
60 ब्र्दों वि न ीं ना चाव ए |
v. प्रश्न ख् ा 7-9 तर्ा 19-21 ी ल त्तिात् प्रश्न , विन ें प्रत् 4 ैं | न प्रत् ा त्ति
ा ान् त 70 ब्र्दों वि न ीं ना चाव ए |
vi. प्रश्न ख् ा 10-12 तर्ा 22-24 ल त्तिात् प्रश्न , विन ें प्रत् 6 ैं | न प्रत् ा त्ति
ा ान् त 100 ब्र्दों वि न ीं ना चाव ए |
vii. त्ति वक्षप्त तर्ा तथ् ात् न चाव ए तर्ा र्ा ि ि र्दी ब्र्द ी ा त थत ी दर्दए िान
चाव ए |
i. All questions in both the sections are compulsory.
ii. Marks for questions are indicated against each question.
iii. Question Nos. 1-4 and 13-16 are very short-answer questions carrying 1 mark each.
They are required to be answered in one sentence each.
iv. Question Nos. 5-6 and 17-18 are short-answer questions carrying 3 marks each. Answer
to them should normally not exceed 60 words each.
v. Question Nos. 7-9 and 19-21 are also short-answer questions carrying 4 marks each.
Answer to them should normally not exceed 70 words each.
vi. Question Nos. 10-12 and 22-24 are long-answer questions carrying 6 marks each.
Answer to them should normally not exceed 100 words each.
vii. Answer should be brief and to the point and the above word limits should be adhered to
as far as possible.
ण्
SECTION A
1. वनम्न ें क् ा चनाि ी स् ा वित न ीं ? 1
( ) वतरिक्त ( ) ािनों ा ि वप
( ) ीव त िश् ताए (र्द) ीव त ािन
Which of the following is not concerned with the problem of choice?
(a)excessive income (b)alternative use of resources
(c)unlimited wants (d)limited resources
2. ए क्ता
तलन ें न ि िल x िस्त ी ा िता , िस्त ी वत 1
ा िन ि 50 र ल ान ी ात व ता व लती ि MUm=10
| x िस्त ी ी त क् ा ी?
( ) रु.5 ( ) रु.40 ( ) रु.10 (र्द) रु.4
The consumer is in equilibrium and is consuming commodity-x only. The

marginal utility from last unit consumed of commodity-x = 50 utils and
MUm=10. What will be the price of the commodity-x.
(a)Rs 5 (b)Rs. 40 (c)Rs.10 (d)Rs.4
3. ि क् ा तात् थ ? 1
What is meant by budget set?
4. ा ान् त वचवन ि चा ी ा ती : 1
( ) ल चर्दाि ( ) ल चर्दाि ( ) र्थ ल चर्दाि (र्द) र्थ ल चर्दाि
The demand for Sugar and Tea usually :
(a)Elastic (b)inelastic (c)perfectly elastic (d)perfectly inelastic
5. ि र्थव्यिस्र्ा ें ािनों ा ा क्षथ ता त त् ार्दन ािना िक्र 3

प्र ावित ता ? ि द्वािा स् ष्ट िें |
र्िा
‘ ल ाित व ान’ ा ािती र्थव्यिस्र्ा त् ार्दन ािना िक्र ि क्त प्र ाि
क् ा ा? ि द्वािा स् ष्ट िें |
How is the Production Possibility curve affected when resources are

inefficiently employed in an economy? Explain with diagram.
OR
What is likely impact of ‘Skill India Campaign’ on PPC of the Indian economy?
Explain with diagram.
6. ि र्थ प्रवत व ता ािाि ें ए थ MR = MC न ि ी त् ार्दन ात्रा ें िवि िती , 3

स् ष्ट िें द क् ा ा?
Explain what happens if a firm under perfect competition increases its output
even when MR=MC?
7. ए क्ता रु.8 प्रवत ा ए िस्त ी 160 ा ों ी ा िता , ी त ि 4

रु. 6 प्रवत ा ती | िस्त ी ा ी ी तलच2 ,त न ी त ि क्ता द्वािा
िस्त द द तनी ा ों द ा ी िाए ी?
A consumer buys 160 units of a good at a price of Rs.8 per unit. Price falls to
Rs.6 per unit. How much quantity will the consumer buy at the new price if
price elasticity of demand is (-) 2?
8. ल ें क् ा रिितथन ाि : 4
( ) ी ात वस्र्ि
( ) ी ात ें ी ी
र्िा
ि थ ी ल वस्र्ि ला त रु. 10 , ल रििती ला त, ल ला त, त रििती ला त
तर्ा त ला त ा लन ीविए |
त् ार्दन( ा) 1 2 3 4
ी ात ला त 6 5 4 6
What change in Total Revenue will result when:

(i) Marginal revenue is constant and
(ii) Marginal revenue is decreasing
OR
Calculate Total Variable Cost, Total Cost, Average Variable Cost and Average
Cost when total fixed cost of a firm is Rs.10.
Output 1 2 3 4
Marginal Cost 6 5 4 6
9. ए ावि ाि प्रवत व ता ािाि त थत त् ार्दन वि र्द वनव तार्थ ी व्याख् ा ीविए |

4
Explain the implications of product differentiation under monopolistic
competition market.
10. ए क्ता नात, िस्त x ी ी त ती ि िस्त x िन ें
6
तलन ी वस्र्वत ें ािा ती त ी प्रवतदक्र ा क् ा ी? स् ष्ट ीविए |
र्िा
ए वस्क्र 20रु. ें चा िाता , व नी न ल ी4 वस्क्र ा | ए रु

ी ी ात व ता 4 | क् ा न ि वि वस्क्र ान चाव ए र्िा र्द
िना चाव ए? स् ष्ट ीविए |
How will you, as a consumer, react to the situation when price of x (Px) falls
and your state of equilibrium is disturbed for the consumption of Good-X?
Explain.
OR
Ice-cream sells for Rs.20, Mohini has already consumed 4 ice-creams. Her
marginal utility of one rupee is 4. Should she consume more ice-creams or
stop the consumption? Explain.
11. र्तथ प्र ावित िनिाल ी चाि ाि ों ी चचाथ ीविए | 6
Discuss any four factors affecting supply.
12. ि ार् स् ष्ट िें , क् ा ाि ािाि ें प्रचवलत ी त: 6

( ) तलन ी त वि
( ) तलन ी त
Explain with diagram, what will happen if the price prevailing in the market is:
(i) Above the equilibrium price

(ii) Below the equilibrium price
ण्
SECTION B
13. ि ी ात प्रिवत्त 0.4 ि ें रिितथन रु.1000 , चत ें वनम्न ें क् ा 1

रिितथन ा?
( ) रु.400 ( ) रु.500 ( ) रु.600 (र्द) रु.250
If MPC = 0.4 and ΔY = 1000, what will be ΔS?
(a)Rs 400 (b)Rs. 500 (c)Rs.600 (d)Rs.250
14. वतरिक्त ा र्दि िन वलए दद्र नीवत वनम्न ें द ों ना ा िाए ा? 1

( ) ि ि ें ी ( ) न र्द िक्षर् न ात ें िवि
( ) ििावन तिलता न ात ें ी (र्द) न ें ी
Which of the following components of monetary policy can be adopted to

correct excess demand?
(a) decrease in repo rate (b) increase in CRR
(c) decrease in SLR (d) all of these
15. ‘व्या ाि ’ ा लन द ा िाता ? 1
How is ‘balance of trade’ estimated?
16. विर्द ी द्रा ी ा तर्ा विर्द ी विवन र्दि ीच क् ा ि ता ? 1

( ) वि रित ( ) प्रत् क्ष ( ) ान न ात ें (र्द) ि न ीं
What is the relationship between demand for foreign exchange and exchange
rate?
(a) Inverse (b) Direct (c) Equal ratio (d) No relation
17. ‘ ली ािाि प्रवतदक्र ाओं’ द्वािा ें द्री ैं र् ी लब्िता वन त्रीत िता ? 3

र्िा
ि ि नीवत क् ा ? र्थव्यिस्र्ा ें र् ी र्तथ वन त्रीत िता ?
How does a central bank control the availability of credit by ‘open market
operations’?
OR
What is repo rate policy? How does it control the supply of credit in the
economy?
18. ािर्ों ार्, वनम्न ‘ ी’ र्िा ‘ लत’ ता ए| 3

( ) द्रा न, रिर्दना तर्ा चन द दक्र ाओं ल द ा
( ) द्रा ी र्तथ ें िावर्वय ैं ों ा ल ों ी ा ि ाओं ा ाि ता
Giving reasons, state the following whether ‘True’ or ‘False’:
(i) Money has separated the acts of sale and purchase.

(ii) Money supply includes demand deposits of people with the commercial
banks.
19. क् ा वनम्नवलव त ािन ाित िल ािन ा व स् ा ों ? ािर् ता ए | 4

( ) विर्द ी ैं ों द्वािा ाित ें न ी ा ाओं िीत द ा हु ला |
( ) ाित ें रि न र्दतािा ें ा थित ािती ि िा ी द्वािा प्राप्त ितन |
( ) ािती नी द्वािा स ा ि ें नी ा ा िीत ला |
(र्द) चीन ें ािती र्दतािा ें ा थित चीनी िव िा ी दर्द ा ा थचारि ों ा
ारिश्रव |
Will the following factor incomes be a part of domestic factor income of India?
Give reasons.
(i) Profit earned by foreign bank from their branches in India.
(ii) Salary received by Indian residents, working in American embassy in
India.
(iii) Profit earned by Indian company from its branch in Singapore.
(iv) Compensation of employees given to residents of China working in Indian
embassy in China.
20. लन C= 50 + 0.5Y , र्थव्यिस्र्ा ें ि ा C व्य , Y िाष्ट्री ि 4

वनि व्य रु. 2000 ि ड़ | वनम्न ा लन ीविए:
( ) तलन स्ति ि िाष्ट्री
( ) तलन स्ति ि व्य
C= 50 + 0.5Y is the consumption function, where C is consumption

expenditure and Y is national income and Investment expenditure is Rs. 2000
crores in an economy. Calculate :
(i) Equilibrium level of national income.
(ii) Consumption expenditure at equilibrium level of income.
21. विर्द ी द्रा ी ती ें िवि ािर् विवन र्दि ि न िाल प्र ाि स् ष्ट ीविए| 4
र्िा
तान ात ें र्दश् तर्ा र्दश् र्दों क् ा तात् थ ? र्दश् र्दों र्द र्दा िर्
र्दीविए |
Explain the effect of an increase in supply of foreign currency on exchange
rate.
OR
What is meant by visible and invisible items in the balance of payment
account? Give two examples of invisible items.
22. ि ी ा ता वतरिक्त ा ी स् ा स् ष्ट ीविए| र्दि िन ें ििावन 6
तिलता न ात ी व ा स् ष्ट ीविए|
Explain the problem of excess demand with the help of a diagram. Explain
the role of Statutory Liquidity Ratio (SLR) in correcting it.
23. ि ािी ि ी व्याख् ा ीविए | ि ािी ि द्द ों ी चचाथ ीविए | 6
र्िा
ािर् र्द ि वनम्न व्य तर्ा िी व्य ें ि ी त ीविए|
( ) वब् ी
( ) िाय ि ािों दर्द ा िान िाला नर्दान
( ) र्ों ा न थ तान
(र्द) विद्याल िनों ा वन ाथर्
Define government budget. Discuss the objectives of government budget.
OR
Giving reasons categorise the following in to revenue expenditure and capital
expenditure.
(i) Subsidies
(ii) Grants given to state government
(iii) Repayment of loans
(iv) Construction of school buildings
24. वनम्न र्दी िान ािी िाि ि ( ) िल , तर्ा ( ) िाष्ट्री ा लन ीविए| 6
र्दें रु. ि ड़ ें
i. िर्दिी 10,000
ii. द िा ा 5,000
iii. ब् ाि 400
iv. ला ा 3,000
v. व श्रीत 400
vi. वितरित ला 200
vii. ावल ों द्वािा ा ावि िक्षा ें र्दान 400
viii म् नी ि 400
ix. विर्द ों वनिल ािन 1,000
From the following information, calculate (a) Domestic income, and (b)
National income.
Items In Rs. Crores
i. Wages 10,000
ii. Rent 5,000
iii. Interest 400
iv. Dividend 3,000
v. Mixed income 400
vi. Undistributed profit 200
vii. Social security contribution by employer 400
viii Corporation tax 400
ix. Net factor income from abroad 1,000


MARKING SCHEME
QN ANSWERS Ma
rks
SECTION-A
1 (a)Excessive income 1
2 (a)Rs. 5. 1
3 Budget set refers to a set of all the attainable combinations of two goods, given market 1
price of the goods and income of the consumer.
4 (b)Inelastic 1
5 If resources are inefficiently employed in an economy, it implies that the economy is not 3
maximizing its output with given resources. It is a situation when the concerned economy
is not operating on the production possibility curve, but is somewhere within the
production possibility frontier.
OR
‘Skill India Campaign’ is expected to improve the quality of labour force in the economy.
The level of technology would rise. Accordingly, PPC is expected to shift to the right.
6 When producer produces output beyond MC=MR, producer does not get maximum profit 3
because each units of output produced beyond MC=MR brings losses to the producer,
means after equilibrium TVC exceeds TR of the units produced after equilibrium.
7 Formula = 1 mark. 4
𝛥 8
-2 = − x 1 mark
6
ΔQ = 80 1 mark
New quantity = 240 1 mark
8 (i) Total revenue will increase at constant rate when marginal revenue is constant. 4
(ii) Total revenue will increase at decreasing rate when marginal revenue is decreasing.
OR
TVC = 6 11 15 21
TC = 16 21 25 31
AVC = 6 5.5 3 5.25
AC = 16 10.5 8.33 7.75
9 Product differentiation allows a firm a partial control over price of its product. It causes 4
high elasticity of demand for the firm’s product owing to the availability of a large
number of close substitutes. It offers a wide range of differentiated product to the
consumers. Accordingly, consumer’s welfare is raised. If product differentiation is fake,
it leads to exploitation of the consumers through higher price.
10 As a consumer, I strike my equilibrium when: Px = MUx (in terms of money). 6
In case Px falls, my gain in terms of MUx becomes greater than my sacrifice in terms of
Px. Thus, MUx > Px.
This induces me to buy more of Good-X. As consumption of X increases, MUx will
decline, in accordance with the law of diminishing marginal utility. I shall stop at a point
when: MUx = Px.
Thus, a fall in Px will induce me to buy more of Good-X.
OR
𝑀𝑈𝑥
A consumer attains equilibrium when: 𝑥
= MUm.
𝑀𝑈𝑥
Substituting the given values, we get = 4, implying that in a state of equilibrium,
Mohini’s marginal utility MUx must be equal to 80 units. If, having consumed 4 ice-
creams , Mohini’s MUx = 80 utils. She must stop consuming more. However if MUx >
80 she would consume more ice creams till MUx reduces to 80 and in terms of its money
worth is equal to Rs.20.
11 (i) Change in technology 6

(ii) Change in factor prices
(iii)Change in number of firms
(iv) Change in taxation
Or any other relevant point with explanation. (4 x 1.5 = 6)
12 (i) When price prevailing in the market is above the equilibrium price, demand will be 6
less than supply. Excess supply will force the market price to slide sown causing
extension of demand and contraction of supply. The process of extension and
contraction would continue till the equilibrium between supply and demand is
stuck.(3)
(ii) When price prevailing in the market is below the equilibrium price, demand will be
more than supply. Pressure of excess demand will cause a rise in market price causing
contraction of demand and extension of supply. The process of contraction and
extension would continue till the equilibrium between supply and demand is struck.(3)
SECTION-B
13 (c) Rs. 600 1
14 (b) increase in CRR 1
15 Balance of Trade = Exports of Goods – Imports of Goods 1
16 (a) inverse 1
17 Open market operations refer to the sale and purchase of securities in the open market by 3
the central bank. By selling the securities, the central bank soaks cash from the economy.
And by buying the securities, the central bank releases cash in the economy.
OR
(i) Repo rate is the rate at which commercial banks can borrow money from the central
bank to tackle the shortage of liquidity (cash). (1 + 2 = 3)
A rise in repo rate would discourage the commercial banks to build their cash reserves for
the creation of credit. This reduces the supply of money by the commercial banks. On
the other hand, a fall in repo rate induces commercial banks to build their cash reserves
for the creation of credit. This increases the supply of credit by the commercial banks.
18 (ii) True, with the introduction of money, an individual can buy or sell a thing without 3
selling or buying anything in return. (2 x 1.5 = 3)
(iii)True, demand deposits of the people with the commercial banks are a component of
money supply. Because, these deposits are converted in cash just by writing a cheque.
19 (i) Yes, because the branch of foreign bank is within the domestic territory of India. 4
(ii) No, because American embassy in India is not a part of domestic territory of India.
(iii)No, because the branch of Indian company is not within the domestic territory of
India
(iv) Yes, because Indian embassy in China is a part of domestic territory of India. (1x4=4)
20 Given, C = 50 + 0.5Y; I = 2,000 4

At equilibrium, Y = C + I
Y = 50 + 0.5Y x 2000; Y + 2050 + 0.5 Y; Y – 0.5Y = 2050; 0.5Y = 2050;
Y = 4100.
C = 50 + 0.5Y; = 50 + 0.5(4100); = 50 + 2050;
C = 2100. (3 + 3 = 6)
21 Increase in supply of foreign currency is reflected by a shift in supply curve to the right, as 4
in diagram: (diagram- 2 marks)
d Y
dD d S
d S1
dR
d Rate of
Exchanged R1
d S
d o d X
d Demand and supply of dollar
SS : initial supply curve for US Dollar

S1S1 : Shift in supply curve to the right
Consequently: Price of US dollar falls from OR to OR1. (2 marks)
Domestic currency appreciates in relation to US dollar.
OR
Exports and imports of goods are considered as visible items of balance of payment.
Exports and imports of services are considered as invisible items of balance of payment.
Any two examples of invisible items: factor services, non-factor services, current
transfers etc. (1 + 1 + 2 = 4)
22 Excess demand refers to the situation when aggregate demand is in excess of aggregate 6
supply corresponding to full employment in the economy. 1 mark.
Correct diagram: 3 marks
During situation of excess demand, SLR is raised with a view to decrease liquidity.
Higher SLR reduces credit creation capacity of the commercial banks. Accordingly,
availability of credit reduces in the capital market. This reduces AD, as required to
correct excess demand. 2 marks.
23 Government budget is a statement of the government receipts and government 6

expenditure during the period of the financial year. 1 mark.
Objectives:
(i) Allocation of resources
(ii) Redistribution of income and wealth
(iii)Economic stability
(iv) Employment opportunities
(v) Balanced regional growth
Or and other relevant point. (1-mark each point with explanation) 5 marks
OR
(i) Subsidies: Revenue expenditure, because it neither reduces liability nor creates assets
of the government.
(ii) Grants given to state govt: Revenue expenditure, because it neither reduces liability
nor creates assets of the government.
(iii)Repayment of loans: Capital expenditure, because it reduces liability of the
government.
(iv) Construction of school building: Capital expenditure, because it adds to the assets of
the government. (4 x 1.5 = 6)
24 (i) Domestic Income (NDPfc): 6

= (wages + social security contribution) + (Rent + Interest + Dividend + Corporation
tax + undistributed profit) + Mixed Income
= (10000 + 400) + (5000 + 400 + 3000 + 400 + 200) + 400
= Rs.19,800 crore.
(ii) National Income (NNPfc):
= Domestic income + Net factor income from Abroad
= 19800 + 1000
= Rs. 20,800 crore. (3 + 3 = 6)
BLUE-PRINT of Question Paper
Economics
Class XII (2017-2018)
Duration: 3 Hours Max. Marks : 80
S. Typology of Questions Very Short Short Long Marks %

No Short Answer Answe Answer
. Answer I3 r II 4 6
/MCQ 1 Marks Marks Marks
mark
1. Remembering: (Knowledge 2 - 2 2 22 27%
based simple recall questions, to
know specific facts, terms,
concepts, principles, or theories;
identify, define, orr ecite,
information)
2. Understanding: (Comprehension 2 1 2 1 19 24%
to be familiar with meaning and to
understand conceptually,
interpret,compare,contrast,
explain,paraphrase or interpret
information)
3. Application: (Use abstract 2 1 1 1 15 19%
information in concrete situation,
to apply knowledge to new
situations; Use given content to
interpret a situation, provide an
example, or solve a problem)
4. High Order Thinking Skills: 1 1 1 1 14 17%
(Analysis & Synthesis – Classify,
compare,contrast, or differentiate
between different pieces of
information,organize and/or
integrate unique pieces of
information from a variety of
sources)
5. Evaluation and Multi-disciplinary: 1 1 - 1 10 13%
(Appraise, judge, and/or justify
the value or worth of a decision
or outcome, or to predict
outcomes based on values)
Total 8*1 = 8 4*3 = 6*4 = 6*6 = 80 100
12 24 36 (24) %
Note: There will be internal choice in questions of 3 marks, 4 marks and 6 marks in both
sections (A and B). (Total 3 internal choices in section A and total 3 internal choices in section
B.)
(NASIK & AHMEDNAGAR)
FIRST PRE-BOARD EXAMINATION 2017-18
SUBJECT:-ECONOMICS CLASS: XII
Time allowed: 3 hours Maximum Marks: 80
Instructions:
(i) All questions in both sections are compulsory.

(ii) Marks are indicated against each question.
(iii) Question No. 1 – 4 and 13 – 16 are very short answer questions carrying 1
mark each. They are required to be answered in one sentence.
(iv) Question No. 5 – 6 and 17 – 18 are short answer questions carrying 3 marks
each. Answers to them should not normally exceed 60 words each.
(v) Question No. 7 – 9 and 19 – 21 are short answer questions carrying 4 marks
each. Answers to them should not normally exceed 70 words each.
(vi) Question No. 10 – 12 and 22 – 24 are long answer questions carrying 6
marks each. Answers to them should not normally exceed 100 words each.
(vii) Answers should be brief and to the point and the above word limit be
adhered to as far as possible.
निर्दे :
1. र्द िों ों ें प्रश्न नि ार्य ।ैं
2. प्रश्नों ि ा ि दर्दर् ए ।
3. प्रश्न ख्र्ा 1-4 र 13-16 हु ा ाल प्रश्न न ि ें प्रत्र् प्रश्न
1 ।न प्रत्र् प्रश्न ा त्तर ए ाक्र् ें िा ान ए।
4. प्रश्न . 5 - 6 र 17 - 18 ा ाल प्रत्र् प्रश्न 3 । ि प्रत्र् त्तर ा ान्र्
60 ब्र्द नि ि ीं ि ान ए।
5. प्रश्न . 7 - 9 र 1 9 -21 ा ाल प्रश्न ैं प्रत्र् 4 ।ैं
प्रत्र् प्रश्न त्तर ा ान्र् 70 ब्र्द नि ि ीं ि ान ए।
6. प्रश्न ख्र्ा 10 - 12 र 22-24 ल त्तर प्रश्न ैं 6 ों ।ैं प्रत्र् प्रश्न
त्तर ा ान्र् 100 ब्र्द नि ि ीं ि ान ए।
7. प्रश्नों त्तर निप्त र ब र्दि ार िा ान ए र र क्त ब्र्द ा र् ा
ालि र।
SECTION A
1. What is meant by Normative Economics? 1

ाि य ास्त्र क्र्ा ल ?
2. An exception to the law of demand is: 1

a) normal good b) giffen good
c) articles of distinction d) both (b) and (c)
ा ािि नलए ए ार्द :
) ा ान्र् च् ा ) निम्नस् र र् स् ए
) च्च ल्र् ा ग्र ) र्द िों ( ) र( )

3. Give one reason for a leftward shift of demand curve. 1
ा क्र ाईं र क्र्ों ा ?ए ार र्द।
4. What is the value of elasticity of demand on rectangular hyperbola demand curve?

(Choose the correct alternative) 1
(a)Unity (b) Infinity (c)Zero (d)Greater than 1
र् ा ार न र लर् ी ा क्र र ा ील ा ल्र् क्र्ा ? ( न ल् िें)
(ए) ए ( ) ि ( ) न्र् ( )1 ा
5. Explain the meaning of opportunity cost with the help of production possibility
schedule. 3
त् ार्दि ा िा ि ी र्दर्द र ला ा य ा ।
OR
Union Health Minister of India has recently launched ‘Mission Indradhanush’:Full

Immunization for all children by 2020. State its impact on production possibility
curve of the economy.
ार ें द्र र् स् ास््र् त्र ि ाल ें 'न ि द्रिि ' ा ार द र्ा :2020 च्चों
नलए य ा र । व्य
य स् ा त् ार्दि ा िा क्र र ा प्र ा ा ए।
6. An individual is both the owner and the manager of a mall taken on lease. Identify
implicit and explicit cost from this information. Also, give reasons. 3
ए व्यनक्त र्द िों ानल र ट्ट र नलर्ा ल ा प्र ि । ाि ार प्रत्र्ि
र स् ष्ट ला ी ाि रें र ा ार र्द।
7. A consumer consumes only two goods X and Y. The marginal rate of substitution is
2. Prices per unit of X and Y are Rs.5 and Rs.4 respectively. Is the consumer in
equilibrium? What will be the further reaction of the consumer? Give reasons. 4
क्ता ल र्द ा ाि X रY ा ि र ा ।ैं प्रन स् ा ि ी ा र्दर 2 । द X रY
ी प्रन र्नि क्र 5 र4 र् ।ैं क्र्ा क्ता लि ें ? क्ता ी ी प्रन दक्रर्ा क्र्ा
? ार र्द न र्।
8. A 15 percent rise in the price of a commodity raises its supply from 300 to 345 units.
Calculate its price elasticity of supply. 4
ए स् ी ी ें 15 प्रन ी र ी र् य 300 345 ा र्ों ा ।
र् य ी ी ी ल िा ी िा रें ।
9. Why can a firm not earn abnormal profits under perfect competition in the long run?
Explain. 4
ए यल र् प्रन स् िाय ा ान्र् ला क्र्ों ि ीं ा ? ार ें
ाए।
OR
Give the meaning of ‘collusive oligopoly’. Explain any two features of oligopoly.
' भ्रन ल् ज्ञाि ' ा य र्द । ल् ज्ञाि द र्द न ाओं ाए।
10. A consumer consumes only two goods X and Y whose prices are Rs.2 and Rs.1 per
unit respectively. If the consumer chooses a combination of the two goods with marginal
utility of X being 4 and that of Y also being 4, is the consumer in equilibrium? Give
reasons. Explain what will a rational consumer do in this situation. 6
क्ता ल र्द ा ाि X रY ी र ा न ि ल्र् क्र 2 र1 र् प्रन र्नि ।ैं र
क्ता र्द स् ओं र् ि ा र्ि र ा ,X ी ा र् न ा4 रY ा 4 , क्र्ा क्ता
लि ें ? ार र्द न र्। ाए द नस् न ें ए य क्ता क्र्ा र ा ।
11.Explain the conditions of producer’s equilibrium in terms of ‘marginal cost and

marginal revenue’. Use diagram. 6
' ा ला र ा रा स् ' र्द य ें नि ाय ा लि ी ों स् ष्ट रें । न त्र ा र्
रें ।
OR
Explain the behavior of marginal product under the law of variable proportions. Use
diagram.
र त् ार्द व्य ार ि ा ा ािि ा ा । न त्र ा र् रें ।
12. It is expected that replacement of all existing taxes on good X by the single Goods
and Services Tax will bring down overall tax on good X substantially. Explain its likely
chain of effects on the equilibrium price and quantity of good X. Use diagram. 6
म् र्द ी ा द ब ल ड् र र् य क् द्वारा च् एक् र र्दा रों प्रन स् ा ि
ें च् एक् र ग्र र ा ी र्द ा। ा ल्र् र च् एक् ी ात्रा र प्र ा ी
ी ा िा श्र ला ा । न त्र ा र् रें ।
SECTION B
13. Read the following dialogue between two people. 1
Vijay : I want 1 kg of mango.
Anuj : What will you give in exchange?
Vijay : I can give you one pair of shoes in return for the mangoes.
Anuj : I don’t need shoes. I want some rice.
Which of the following problems is being faced by Vijay and Anuj in their exchange
process?
(a) Lack of double coincidence of wants (b)Lack of store of value
(c)Lack of standard of deferred payment (d)Absence of common units of value
न र् र ि द्वारा ि एक् ें प्रदक्रर्ा ें र्द ल ों निम्न ा ायला ें -
न र् : 1 द ल ग्रा ान ए ।
ि : र्दल ें क्र्ा र्द ?
न र् : ए र्द ा हु।
ि : ी र ि ीं, ा ल ान ए ।
र दर्दर् ए ा ायला ें क्र्ा स्र्ा ा ा िा द र्ा ा र ा ?
(ए) ा ी र्द र र् ा ा ( ) ल्र् ी र्द ाि ा ा
( ) स् न ाि ाि ा ा ( ) ल्र् ी ा ान्र् ा र्ों ी ि नस् न
14.Fiscal deficit equals:(Choose the correct alternative) 1
a) Interest payments b) Borrowings
c) Interest payments less borrowing d) Borrowings less interest payments
न त्त र् ा ा रा र : ( न ल् िें)
ए) ब्र्ा ाि ) िार
) ब्र्ा ाि िार ) िार ब्र्ा ाि
15. Give two examples of capital receipts. 1
प्रानप्त र्द र्दा र र्दें ।
16. Define money supply. 1

ी र् य रर ान रें ।
17. Explain the significance of ‘margin requirement’ in correcting deflationary gap in the
economy. 3
यव्य स् ा ें स् ीन र रि नलए ' ार् यि श्र् ा' त् ा ।

OR
Explain the role of government expenditure in correcting inflationary gap in an economy.
यव्य स् ा ें द्रास् ीन राल िारि ें र ार ों ी न ा ा ।
18. An economy is in equilibrium . the economy’s consumption function is C = 160 +

0.6Y where C is consumption expenditure and Y is national income. National income is
Rs.1,400. Find out the equilibrium level of consumption expenditure and investment
expenditure. 3
ए यव्य स् ा लि ें यव्य स् ा ा ार C =160 + 0.6 Y ाC व्यर् र
Y राष्ट्र र् र् । राष्ट्र र् र् 1,400 र् । व्यर् र नि व्यर् लि स् र ा ा ल ाए।
19. Distinguish between real and nominal GDP. Which of the two is a better index of
welfare of the people and why? 4
ास् न र िा ात्र र्द ार्। र्द िों ें ि ल ों ल्र्ा ाए र
ा र क्र्ों?
20. The Government, under ‘Ujjawala Yojana’, is providing free LPG kitchen gas
connections to the families ‘below the poverty line’. What objective the government is
trying to fulfil through the government budget and how? Explain. 4
' ज्ज् ला र् िा' र ार र र ा ि रर ारों फ् एल र िक् ि
प्रर्दाि र । र ार रा रि नलए र ार द द्दश्र् ा प्रर्ा रर र ?
ार ें ाए।
OR
ा
Distinguish between revenue expenditure and capital expenditure in government

budget. Give two examples of each.
र ार ें रा स् व्यर् र व्यर् र र्दें । प्रत्र् र्द र्दा र र्दें।
21.Explain the process of credit creation by the commercial banks with help of an
example. . 4
ए र्दा र ी ार् ा ान नयर् ैं ों द्वारा क्रन र ि ी प्रदक्रर्ा ाए।
22.Distinguish between depreciation of currency and appreciation of currency. How are

exports and imports impacted in these situations? 6
द्रा ल्र्ह्रा र द्रा ी रा िा र र्द न र्। ि नस् न र्ों ें निर्ाय र र्ा
प्र ान ?ैं
23.Assuming that increase in investment is Rs.1,000 crores and Marginal Propensity to

Consume is 0.5, explain the working of multiplier. 6
ािा ा र ा द नि ें रनि 1 ार र र् र ार् यिल प्र ेंन नलए 0.5 ,
ा ा ी व्याख्र्ा र।
OR
Explain with the help of diagram how equilibrium level of income in an economy is
determined by saving and investment curves. Will there always be full employment at
the equilibrium level of income?
र ी र्दर्द ाए द द व्य
य स् ा ें र् ा लि स् र र नि नििायरर
ा । क्र्ा ा र् लि स् र र यर ार ा?
24. Calculate (a) GDP at market price by Income method and (b) National Income by
the Expenditure method: 6
िा रें - )ए( र् न नि द्वारा ा ार ल्र् र र ) (व्यर् न निद्वारा राष्ट्र र् र्:
(Rs. In crores)
( र ए)
(i)Compensation of employees 120
य ाररर्ों ा
(ii)Exports 25
निर्ाय
(iii)Mixed income 140
न नश् र्
(iv)Imports 30
र्ा
(v)Interest on national debt 5
राष्ट्र र् र ब्र्ा
(vi)Private final consumption expenditure 255
नि न व्यर्
(vii)Gross fixed capital formation 65
ल निनि नि ाय
(viii)Consumption of fixed capital 40
निनि ी
(ix)Subsidies 10
नब्
(x)Government’s final consumption expenditure 35
र ार ा न य व्यर्
(xi)Change in stocks 20
स् ें र्दला
(xii)Indirect tax 45
प्रत्र्ि र
(xiii)Net factor income from rest of the world (-)10
ा ी र्दनिर्ा ि ार र्
(xiv)Rent, interest and profit 50
द रार्ा, ब्र्ा र ला
MARKING SCHEME
Q.No. Expected Answer Division of Marks

1. It is that branch of economics which deals with 1 mk
such issues which involve valu judgement and are
not verifiable.
2. d) both (b) and (c) 1 mk
3. Any one point required ,example 1 mk
- Fall in price of substitute good
- Unfavourable change in taste
4. (a) Unity 1 mk
5. Definition – opportunity cost 1mk
Explanation 1mk
Prodn. Possibility.Schedule 1mk
OR
Expln.- Immunization will ensure emergence of
robust labour force. When this force is added to
existing stock of manpower, resource pool of
country expected to rise. PPC expected to shift to
right.
6. Managerial services - his own – implicit cost. ½ mk
Reason- defn. of implicit cost. 1mk
Lease of mall – pay to others – explicit cost ½ mk
Reason- defn. of explicit cost. 1mk
7. Consumer is not in equilibrium as MRS > Px/Py . 2 1mk

> 5/4.
His reaction- consume more of X, move down 1 ½ mk
along IC till equilibrium is attained.
Reason – Equilibrium conditions 1 ½ mk
8. Es = % change in qty. supplied/ % change in its 1 mk for formula
price
=(45/300 * 100) / 15 2 mk for calculation
= 15/15
=1 1mk for final answer
9. In long run firm can earn only normal profits, there 4 mk
will be zero abnormal profits due to freedom of
entry and exit of firms.If abnormal profits arise,
new firms enter and such profits are wiped out. If
abnormal losses arise, some existing firms will
leave the industry.
OR
Defn. – collusive industry 2mk
Any two features such as- few big sellers, high 2mk
degree of interdependence.
10. Given, MUx = 4, Px = 2, MUy=4, Py=1. 1mk
Substitute the above values in equilibrium
condition.
No, consumer is not in equilibrium as MU x/Px < 2mk
MUy/Py which is not satisfying the eq. condn.
Consumer will consume more of Y so that its MU 3mk –expln.
will fall as per law of DMU. He will consume less
of X which will lead to rise in its MU. This process
continues till equilibrium is established.
11. Diagram 2mk – diagram
2 equilibrium conditions- 1mk – eq. conditions
(i) MR = MC 3mk – expln.
(ii) MC cuts MR from below.
Expln. To include points where MR>MC and
MR<MC.
OR
Diagram 2mk – diagram
Statement of law of variable proportions in terms 1mk- State. Of law
of MP. 3mk – 3 stages
Behaviour of MP-
(i)Increasing returns where MP is rising.
(ii)Diminishing returns where MP is falling but
remains positive.
(iii)Negative returns where MP is negative.
12. Diagram 2mk – diagram

Due to decrease in tax rate there will be increase 4mk – expln.
in supply, supply curve will shift rightwards.
Explaining the chain of effects using the diagram.
New equilibrium – Eq. price falls and Eq. qty
rises.
Section B
13. (a) Lack of double coincidence of wants 1mk
14. (b) Borrowings 1mk
15. (i)Recovery of loans and (ii)Borrowings 1mk- any two examples
16. It refers to the stock of money available in the 1mk
economy at a point of time.
17. Deflationary gap is when AS>AD. Margin 3mk
requirement refers to minimum down payment
that borrowers have to make as percentage of
their total borrowing from commercial banks.In
deflation, margin req. is lowered, which acts as
incentive to borrow,in turn this induces borrowers
to raise credit, laeding to rise in AD.
OR
Inflationary gap is when AD>AS. Correcting this
gap involves reducing expenditure. A cut in govt.
exp. Esp.non-development exp. Like on defence,
law and order,subsidies will cause an overall fall
in AD.
18. Y =C + I 3mk
C=160 + 0.6Y
C=160 +0.6(1400)
C =160 + 840
C=1000
I = Y-C
I=1400-1000
I=400
19. Difference- (i)Real is measured at constant prices 2mk for distinguishing
while nominal is measured at current prices. (ii)
Real increases only when prodn. Increases while
nominal can increase even when there is no
increase in prodn.
Real GDP is a better measure because only real 2mk
GDP shows the change in flow of goods and
services in the economy.
20. Objective – (i) increase in social welfare 4mk
(ii)addressing environmental issue by providing
cleaner energy.
Expln. Of above points.
OR
Revenue exp.- neither creates assets nor reduces 2mk for differences
liabilities. Example- exp. On salaries, exp. On ½ mk for each example
interest payments.
Capital exp.- either creates asstes or reduces
liabilities. Example- exp. On purchasing building,
exp. On purchase of shares.
21. Commercial banks create credit in form of 4mk
demand deposits. If initial deposit Rs.1000/- And
LRR is 10%. Banks can loan out 900, keeping
100 as reserves. This process goes on. Total
deposits= 1/LRR * Initial deposit.
22. Depreciation – definition.When domestic currency 3mk
depreciates, its value in terms of foreign currency
falls. Thus, domestic goods become cheaper and
exports rise, while our imports decline.
Appreciation – definition. When domestic
currency appreciates, its value in terms of foreign 3mk
currency rises. Thus, domestic goods become
expensive and exports fall, while our imports rise.
23. Multiplier is the ratio between change in income 1mk for formula
and change in investment.K=∆Y/∆I , K=1/1-MPC. 2mk for working process
Working of multiplier- 3mk for expln.
Round 1- ∆I = 1000, so ∆Y is = 1000, as exp. Of
1000 becomes income of households.
Round 2- ∆Y is = 500.
And so on.
OR
Diagram 2 mk for diagram
Equilibrium is determined at the point where ex- 3mk
ante/ planning saving is equal to ex-ante
investment.
Explain two cases- (i)S>I and (ii)S<I.
No, there may or may not be a situation of full 1mk
employment at point of equilibrium because eq.
point refers to when desired level of saving is
equal to desired investment level. This equality
may or may not coincide with full employment
situation.
24. (a)GDPmp by Income method = (i) +(iii) + (xiv) + 3mk

(viii) +(xii) – (ix)
= 120+140+50+40+45-10
=385 crores.
(b)NI ny Expenditure method = (vi)+(x) +(xi)+(vii) 3mk
+(ii-iv) – (viii) – (xii)+ (ix) +(xiii)
=255+35+20+65 + (25-30) – 40 - 45+ 10 +(-10)
=285 crores.
Kendriya Vidyalaya Sangathan, Mumbai region
Sample Paper 2018-19
Subject - Economics
Class XII
Time allowed: 3 hours Maximum marks: 100
General instructions:
 All questions in both sections are compulsory though there is internal choice
in some questions.
 Marks for questions are indicated against each question.
 Question numbers 1-4 and 13 -16 are very short answer questions carrying 1
mark each. They are required to be answered in one sentence or one word.
 Question numbers 5-6 and 17-18 are short answer questions carrying 3
marks each. They are required to be answered in normally 60 words each.
 Question numbers 10-12 and 21-24 are long answer questions carrying 6
marks each they are required to be answered in normally 100 words each.
SECTION-A: MICROECONOMICS
1. In case resources of an economy are reduced the PPC will: (1)

a) Shift rightwards b) Shift leftwards
c) Rotate along x-axis d) Rotate along y-axis
र्थव्य स्र्ा ें ं ा ों ी त् ा ं ा ा क्र ां ी ा ा:
a) ाईं खि ा b) ाईं खि ा
c) X-Axis ा d) Y-Axis ा
2. Under perfect competition firm is: (1)

a) Price make b) Price taker
c) Both a and b d) None of these
र्थ प्रखि ोख िा ंि थि थ ोि :
a) ी ि ख ाथ b) ी ि स् ा
c) a b ो ों d) ें ो ीं
3. Define implicit cost. (1)

ख ख ि ला ि ो र ाखिि ीख ।
4. State one exception to the law of demand. (1)

ां ख क ा ो िा ।
5. Explain the central problem “what to produce” in an economy. (3)

र्थव्य स्र्ा ें ें द्र स् ा “क् ा त् ा क ा ा ” ो ा ।
6. A consumer consumes only two goods each priced at Rs. 1 per unit. If the
consumer chooses a combination of the two goods with marginal rate of substitution
equal to 2, is the consumer in equilibrium? Give reasons. Explain what will a rational
consumer do in this situation. (3)
ोक्ताल ो स्िओं ा ो िा ख ी ी ि ₹1 प्रखि ा । ोक्ता ो

स्िओं ा ो िा िो ी ांि प्रखिस्र्ा ी 2 ोि , क् ा ोक्ता
ंिल ें ? ा र् स् ष्ट ीख । ा ोक्ता खस्र्खि ें क् ा ा, ा ।
Or
Explain the properties of indifference curve (Any three).

ि स्र्िा क्र ी ख ििाओं ो ा ( ो ि )।
7. Differentiate between increase in demand and increase in quantity demanded of a

commodity. (4)
क स्ि ी ां ें खि ं ां ी ात्रा ें खि ंि ो स् ष्ट ीख ।
8. Explain the implication of the following in a perfectly competitive market (4)

a) Large number of buyers
b) Free entry and exit of firms
र्थ प्रखि ोख िा ा ा ें ख म्नखलखिि प्र ा ो ा ।
a) क्रिाओं ी ख ंख् ा
b) ों ा स् िंत्र प्र ोड़ ा
Or
Giving reasons state whether the following statements are true or false:
a) A monopolist can sell any quantity he likes at a price.
b) When equilibrium price of a good is less than its market price there will be
competition among the sellers.
ा र् स् ष्ट ि हु िा क ख म्नखलखिि र् ा लि:
a) ख ार थक ी ि क ि ात्रा ि ।
b) ंिल ी ि ा ा ी ि ो िो ख क्रिाओं प्रखिस् ाथ ढ़ ा ।
9. What is change in supply? Explain the effect of “Tax imposed on good” on the
supply of the good (draw diagram). (4)
र्िथ ें र िथ क् ा ? “ स्ि ों ो ल ा ” स्िओं ी र्िथ क् ा प्र ा ड़ ा ( क्र
ा )।
10. Complete the following table: (6)

ख म्नखलखिि िाखल ा ो ा ीख :
Output Total Average Fixed Cost Average Variable Marginal Cost
(Units) Cost (Rs) Cost (Rs) (Rs)
(Rs)
0 36 ∞ 0 0
1 - - - 18
2 - - - 14
3 - - 16 -
4 - - -- 24
Or
Define the law of variable proportion. Explain the law with the help of diagram and
schedule. Also explain it's different stages.
र िी ाि ख ो र ाखिि ीख । ख ो क्र ं ा र् ी ा िा
ा । ख ख न्न र्ों ो ा ।
11. Define elasticity of demand. Explain the factors affecting elasticity of demand
(any four). (6)
ां ी लो क् ा ि ?
ैं ां ी लो ो प्र ाख ि ाल ा ों ी व्याख् ा ीख
( ो ा )।
12. Suppose the demand and supply curves of a commodity X is given by the
following two equations simultaneously
Qd = 200 - p Qs = 50 + 2p
Find the equilibrium price and equilibrium quantity.
Suppose that the price of a factor of production producing the commodity has
changed, resulting in the new supply curve given by the equation:
Qs= 80 + 2 p
Analyse the new equilibrium price and equilibrium quantity as against the original
equilibrium price and quantity. (6)
क स्ि ी ां ं र्िथ क्र ो ख म्नखलखिि र् ें ा ल ख ।

Qd = 200 - p Qs = 50 + 2p
ोक्त ंिल ात्रा ं ंिल ी ि ो ज्ञाि ीख ।
ा लख क स्ि ो प्र ाख ि ाल ा ों ी स्ि ी ी ि ें र िथ ो
ािा ख र र्ा स् रु र्िथ क्र ा र् ख म्नखलखिि ो ािा -
Qs= 80 + 2 p
ित् श्चाि ि
ं ल ात्रा ं ंिल ी ि ो ज्ञाि ीख ।
SECTION-B: MACROECONOMICS
13 Disinvestment is which type of receipt in the budget? (1)

(a)tax revenue receipt (b)other capital receipt
(c)capital receipt (d)non-tax revenue receipt
ख ख ी क प्र ा ी प्राखि ों ंि िथ ?
(a) ा स् प्राखि ां (b) न् ं ि प्राखि ां
(c) ं ि प्राखि ां (d) ि ा स् प्राखि ां
14. Propensity to save is the (1)

(a) additional income that is not to be saved
(b) level of saving at which saving and consumption are equal
(c) ratio of saving to income
(d) tendency of the consumer towards higher savings
ि प्र खि -
(a) खिर क्त ख ी ि ीं ी
(b) ि स्ि ख ें ि ो ा ो
(c) ि ा ाि
(d) ोक्ता ा ख ि ी ा
15. When household consumption expenditure =Rs.9000, private investment

expenditure= Rs.7000, government expenditure=Rs. 12000, exports= Rs. 1000 and
imports= Rs. 3000, what will be the level of AD in an Open Economy? (1)
ल ो व्य =₹9000, ख ख व्य = ₹7000, ा व्य =₹12000, ख ाथि=
₹1000 ं ाि =₹3000 , िो िल र्थव्य स्र्ा ंि थि ग्र र्िथ ा स्ि क् ा ो ा?
16 .Write the full form of GST. (1)

(GST) ा ख स्िा ीख ।
17 . Explain the “Banker to the government” function of the central bank. (3)
ें द्र ैं “ ा ी ैं ” ा थ ो ा ।
Or
Distinguish between Cash Reserve Ratio and Statutory Liquidity Ratio.
खिि ाि ं ाख ि लिा ाि ें ंि स् ष्ट ीख ।
18 . Define investment multiplier. Explain its relationship with MPC and MPS. (3)
ख र् ो र ाखिि ीख । ा ं ं MPC MPS ार् स् ष्ट ीख ।
19 . Explain the functions of money. (4)

द्रा ा ों ी व्याख् ा ीख ।
20 .What is fiscal deficit? Explain its implications for the economy. (4)
ा ोि ा ा क् ा ? र्थव्य स्र्ा ड़ ाल प्र ा ों ी व्याख् ा ीख ।
Or
Is the following revenue expenditure or capital expenditure in the context of
government budget? Give reasons.
(a) expenditure on collection of taxes
(b) expenditure on purchasing computers
ा ें ख म्नखलखिि ा स् व्य र् ा ं ि व्य ? ा र् िा ।
(a) ो ो ंग्रख ि व्य
(b) ं प् ीि ा व्य
21. How will the following be treated while estimating National Income? Give
reasons. (4)
(a) expenditure on education of children by a family
(b) payment of electricity bill by a school
ख म्नखलखिि ो ाष्ट्र र् ा ें क ि ाख ल क ा ा ा? ा र् िा ।
(a) च्चों ी ख िा र ा द्वा ा व्य
(b) ख द्याल द्वा ा ख ल ख ल ा िा
22. In an economy C = 50 + 0.5 Y is the consumption function (where C =

consumption expenditure and Y = National Income) and investment expenditure is
Rs. 6000 calculate: (6)
i. Equilibrium level of national income
ii. Saving at equilibrium level of national income
र्थव्य स्र्ा ें C = 50 + 0.5 Y ि ल ( ां C= ि ल ं Y= ाष्ट्र )
ख व्य ₹6000 ।
i. ाष्ट्र ा ंिल स्ि
ii. ाष्ट्र ंिल स्ि ि ी ात्रा
Or
Define deficit demand. Explain the deficit demand with the help of diagram. Also
explain how Repo Rate and Open Market Operations can be used as a tool to
correct the deficit demand in the economy.
न् ां ो र ाखिि ीख । न् ां ो क्र ी ा िा ा । िल ा ा ी प्रकक्र ा
ं ो ा स्ि ाल ि हु न् ां ी स् ा ो र्थव्य स्र्ा ें क ा ा िा
?
23. (a) Differentiate between balance of trade and balance of payment. (3+3=6)
(b) Explain any three sources of demand for foreign currency.
(a) िा ि ं व्या ा ि ें ंि स् ष्ट ीख ।
(b) ख ख ख ी ां क न् ि स्रोिों ो ा ।
24. Calculate (a) GDP at market price through the income method and (b) National
income by expenditure method (6)
ख म्नखलखिि ज्ञाि ीख :
(a) ख ख द्वा ा ल ल त् ा ा ा ी िों
(b) व्य ख ख द्वा ा ाष्ट्र ी र् ा
S.No. Items Rs in crores
i. Compensation of employees 120
ii. Exports 25
iii. mixed income of the self employed 140
iv. imports 30
v. interest on national debt 5
vi. private final consumption expenditure 255

vii. gross fixed capital formation 65
viii. consumption of fixed capital 40
ix. subsidies 10
x. government final consumption expenditure 50
xi. change in stocks 20
xii. indirect tax 45
xiii. net factor income from the rest of the world -10
xiv. rent interest and profits 50
****************************************************************************
Kendriya Vidyalaya Sangathan, Mumbai region
Sample Paper 2018-19
Subject - Economics
Class XII
MARKING SCHEME
Ans 1. (b) 1 mark
Ans 2. (b) 1 mark
Ans 3.Correct definition 1 mark
Ans 4. Any one reason 1 mark
Ans 5. Resouces are limited and wants unlimited 1 mark

Choice of consumer goods and producer goods, war time goods and peace time
goods, explain 2 marks
Ans 6. . The consumer attains equilibrium when

MRS= PX/PY 1 mark
In the given question
MRS> PX/PY
Using values
2>1/1 1 mark
The consumer would react to this situation by consuming more of goods X in

place of good Y 1 mark
Or
Any three properties with explanations 1×3=3 marks
Ans 7.Any four differences 1×4=4 marks
Ans 8.Correct explanations 2×2=4marks

Or
False 1 mark
Correct explanation 1 mark
True 1 mark
Correct explanation 1 mark
Ans 9.Meaning of change in supply 1 mark

Explanation of the effect of “Tax imposed on good” on the supply of
the good 2 marks
Diagram 1 mark
Ans 10. ½ mark for each value filled correctly

Output total average fixed cost average variable cost marginal cost
(units) cost (Rs) (Rs) (Rs)
(Rs)
0 36 ∞ 0 0
1 54 36 18 18
2 68 18 16 14
3 84 12 16 16
4 108 9 18 24
Or
Definition 2 marks
Table 1 mark
Diagram 1mark
Explanation of stages 2 Marks
Ans 11.Definition 2 marks

Factors headings/points (any four) ½ mark each
Explanation of points (any four) ½ mark each
Ans 12. At equilibrium 1 mark

Qd = Qs
Solving the equation 1 mark
Equilibrium price P = 50 1 mark
Equilibrium quantity Q = 150 units 1 mark
New equilibrium price P = 40 1 mark

New equilibrium quantity Q = 160 units 1 mark
Ans 13.(b) 1 mark
Ans 14. (c) 1 mark
Ans 15.Aggregate demand = Rs. 29000
Ans 16.Goods and services tax.
Ans 17.Central functions as banker to government 1 mark

As an agent 1 mark
As a financial advisor 1 mark
Ans 18. Define investment multiplier. 1 mark

Explain its relationship with MPC 1 mark
Explain its relationship with MPS 1 mark
Ans 19.Any four functions with explanation 1×4=4 marks
Ans 20.Meaning of Fiscal deficit 1 mark

its implications 1×3=3 marks
Or
Expenditure on collection of taxes is a revenue expenditure because it neither
causes the rise in assets of the government nor does it lead to a reduction in the
liabilities of the government.
Expenditure on purchasing computers is a capital expenditure because this results in
the creation of assets for the government. Hence, such expenditures add to the
assets of the government. 2×2=4marks
Ans 21. Expenditure on education of children by a family is included in the estimation

of national income since it is a part of private final consumption expenditure. 2 marks
Payment of electricity bill by a school is not included in national income since it is a
part of intermediate consumption. 2 marks
Ans 22 . Equilibrium level of national income =Rs.12100 3 marks

Saving = Rs. 6000 3 marks
Or
Definition 1 mark
Diagram with explanation 2 marks
Repo rate 1½ mark
Open market operations 1½ mark
Ans 23 a)Any three differences 1×3=3 marks

b)Any three sources 1×3=3 marks
Ans 24. GDP at MP by the Income method = 120 + 140 + 50 + 40 + 45 - 10

=Rs 385 crores 3 marks
NNP at FC by the expenditure method = 255 + 50 + 20 + 65 + 25 - 30 - 40 +(-10) -
(45 + 10)
=Rs 300 crores 3 marks
******************************************************************************************
BLUE PRINT
PRACTISE PAPER 2018
ECONOMICS(030)
Name of the Unit Very Short Short Short Long Total

Answers Answer Answer Answer
(1mark) (3 marks) (4 marks) (6 marks)
INTRODUCTION 1 1 4
CONSUMER BEHAVIOUR 1 1 1 13
PRODUCER BEHAVIOUR 1(3) 1 1 13
& SUPPLY
FORMS OF MARKET 1 1 10
NATIONAL INCOME 1 1 10
DETERMINATION OF 2 1 12
INCOME
MONEY AND BANKING 1(2) 1 6
GOVERNMENT BUDGET 1(2) 1 6
BALANCE OF PAYMENT 1 6
TOTAL 1(8) 3(4) 4(6) 6(6) 80(24)
Mrs. Seema Mishra
PGT(Eco.) KV IIT Powai, Mumbai

PRACTICE PAPER -2018
Subject: ECONOMICS (030)
Class XII
( Marking Scheme)
Q.No Value points to answers Marks

Allocation
1 MCn = TVCn –TVCn-1 (1/2)
MC16 = TVC16 –TVC15
= 3,500 – 3,000 = 500 (1/2)
2 Economics as a ‘normative science’ deals with situations of value judgments or (1/2)
condition of ‘what ought to be’. Eg. India should create more employment (1/2)
opportunities.
3 It means change in total physical product when an additional unit of a variable input is 1
employed, other factors remaining fixed.
4 It is the total quantity of the commodity offered for sale by all the firms in the market at 1
different prices at a particular time period.
5 There are three central problems of an economy-
(a) What to produce and in what quantity? 1
(b) How to produce? 1
(c) For whom to produce? 1
(Brief explanation of each point.)
Or
PPC is concave to the origin because of rising MOC. In other words, in order to produce an
additional unit of one commodity more and more units of other commodity are 3
sacrificed.
Diagram and its explanation
6 (i) Demand of the good X will increases, hence demand curve of good X shifts towards
right. (ii) Demand of Good X may decrease as people may be inclined to consume less due
to media reports of harmful effect of the good X, as a result, demand curve may shift
towards left. 3
(iii)When income of consumer increases the disposable income increases and consumer is
in a better position of spending more on the good X. Hence consumer may consume more
of the commodity due to which the demand for the good increases and demand curve
shifts away from origin.
7 Out of the given options, (B) is incorrect. 1
Indifference Curves have a property that two ICs cannot intersect. Suppose, there are any
two ICs intersecting each other. As per the figure A =C ( on IC1) D= E (on IC2) But if we see
the peculiarity of point B (the point of intersection), this would result into absurd 2
situation of A=C=B & D=C=B, which is not possible, as they are violating the basic
definition of the Indifference Curves.
Diagram also. 1
OR
(a) PxQx + PyQy = M 25Qx + 10Qy = 250 1
(b) Slope of Budget Line = (-) Px/Py = (-) 25/10 = (-) 2.5 1
(c) If Qy is to be Zero 25Qx + 10Qy = 250 25Qx + 10(0) = 250 Qx = 250/25 = 10 units 1
(d) If Py falls the consumer will be able to buy more of good Y in the same money income 1
pushing the Y-intercept of the Budget Line away from origin, keeping the X-intercept
constant. (shifts outwards) .
8 According to the law of variable proportion, the Marginal product of a variable factor
initially rises with its employment level, but after reaching a certain level of employment, 1
it starts falling.
Initially Total product increases at increasing rate, then it increases at diminishing rate, 1
after reaching its maximum level it declines.
Diagram and explanation 2
9 Non- Price Competition:- Firms try to avoid price competition .They use other methods 1
like advertising, customer care, free gifts etc. to stay in market.
They follow policy of price rigidity. 1
Firms generally keep price of their product within close range of its rival products to avoid 1
price wars.
Example 1
10 (a) If MUx/Px > MUy/Py, then it means that satisfaction of Mr. Aman, derived
from spending a rupee on Good X is greater than the satisfaction derived
from spending a rupee on Good Y.
Mr. Aman, will reallocate his income by substituting Good X for Good Y.
As the consumption of Good X increases the marginal utility derived from 3
it goes on diminishing and reverse proposition occurs for Good Y, this
(b) process will continue till MUx/Px becomes equal to MUy/Py.
If Py falls, MUx/Px < MUy/Py, then it means that satisfaction derived from
spending a rupee on Good X is lesser than the satisfaction derived from
spending a rupee on Good Y.
Mr. Aman will reallocate his income by substituting Good Y for Good X.
As the consumption of Good Y increases the marginal utility derived from 3
it goes on diminishing and reverse proposition occurs for Good X, this
process will continue till MUx/Px becomes equal to MUy/Py.
11 PRICE FLOOR
A price floor is the lowest legal price of a commodity at which it can be
sold, fixed by the government. Price floors are used by the government to 2
prevent prices from being too low.
The main reason for imposing the price floor policy is the welfare of the
producers / farmers. 2
Eg the minimum wages, minimum support price
Consequence:
Buffer Stock: In order to maintain the minimum support price, the
government may have to build buffer stocks to enable producers to dispose
of their surplus stocks. The government purchases the surplus stocks
available with the f a rme r s /producers; these stocks are released in case 2
the production of the supported commodity suffers.
OR
PRICE CEILING
Price ceiling means the maximum limit that the government imposes on
2
the price of a commodity. Price ceilings are used by the government to
prevent prices from being too high.
The main reason for imposing price ceilings is to protect the interests of the
consumers in situations in which they are not able to afford needed 2
commodities. For example, during the recent rise in the prices of pulses.
Consequence:
Shortages of the commodity and Rationing: In case of price ceiling the
quant i ty actually supplied in the market will shrink; as a result, a 2
large chunk of consumer’s demand will go unsatisfied. To deal with such
a situation the government may resort to rationing of the commodity.
12 a) False: Since the firm under Perfect Competition is a price taker, AR 2
curve will be a straight line parallel to X-axis.
b) True: Since TFC remains unchanged / constant. 2
c) False: When MR is falling but positive, TR will be rising. 2
(brief explanation of each)
13 Money Supply refers to total stock of money in circulation in an economy at a given point 1
of time.
14 Bank Rate, Repo rate, Reserve Repo rate, Open Market operations etc (any one) 1
15 It is the difference between Fiscal Deficit and Interest payments. 1
16 The burden of Direct tax cannot be shifted where as the burden of Indirect tax can be 1
shifted.
17 C= 100+0.75Y
I = 150
(i) At equilibrium level of income:
Y=C+I
Y=100+0.75Y + 150
Y - 0.75Y = 250
Y = 250/0.25 = Rs.1,000 (in crores) 1
(ii) C =100+0.75Y = 100+0.75(1000) = 100 + 750 = Rs. 850 (in crores) 1
Y = C + S or S= Y-C = 1,000-850 = Rs. 150 (in crores) 1
OR
C+I approach
Aggregate demand, given by C+I, is the planned demand by the various
sectors of the economy. Whether this planned demand is realized or not
depends on amount of goods and services (aggregate output or Y) produced
1 (1/2)
in the economy. Thus it is only when planned expenditure is equal to the
aggregate output does the economy achieve equilibrium.
ie AD=Y
If AD>Y, inventory level with producers falls and they increase output.
1(1/2)
This happens till AD=Y
Opposite happens if AD<Y
18 It is the ratio of change in income to the initial change in investment expenditure. 1
K= 1/(1-MPC) and K= 1/MPS 2
Explanation of relation
19 1. Real GDP: when GDP is measured at constant prices or the base 1
year’s prices is known as Real GDP. GDP at constant prices will
only increase when there is an increase in the flow of goods and
2. Nominal GDP: when GDP is measured at the prevailing or the 1
current year’s prices is known as Nominal GDP. GDP at current
prices may increase even if there is no increase in flow of goods and
Any suitable numerical example. 2
OR
Precautions of Product Method:
Avoid double counting
2. Production for self consumption should be included
3. Sale of second hand goods is not to be included
4. Production from illegal activities is not to be included
4
5. Value of services rendered by housewives/family members is not to
be included
( any four)
20 The government seeks to accelerate the pace of growth by establishing public 2
sector enterprises especially where private monopolies occur or private sector does
not exist.
Explanation with example 2
21 Creation of credit is one of the crucial functions performed by a commercial
bank in modern times. The commercial bank is responsible for putting
money (produced/created by central bank) in circulation through the 3
process of credit creation or the lending process.
Numerical Illustration, may be based on the following assumptions:
i. There is only one bank in the economy.
ii. Initial deposits are say 10,000 crores and the legal reserve requirement proposed
by the central bank is 10%. 3
iii. Credit Creation = Initial deposits x 1 = 10,000 / 0.1
LRR
= 1,00,000 crores.
Students may provide a schedule for deriving the same.
22 According to AD/AS approach, 2
AD= C+I, AS= C+S
At equilibrium, AD= AS
C+I=C+S
I=S
Explanation with diagram. 2
OR
Excess Demand refers to the situation when AD >AS at full employment level. 2
Explanation with Diagram.
To control excess demand bank rate is increased, which makes credit costlier, purchasing 2
power is curtailed. AD falls and excess demand is corrected.
23 a) Balance of payments is defined as the statement of accounts of a country’s 1
inflows and outflows of foreign exchange in a fiscal year. 2
Components: Explanation of components of current account and capital account.
b) The transactions carried on by monetary authorities of a country, which causes
changes in official reserves are termed as official reserve transactions Autonomous
receipts and autonomous payments give rise to either deficit or surplus on balance of 3
payments. The central bank may finance a deficit by : i. reducing reserves of foreign
currency ii. by borrowing from the IMF or monetary authorities This will be shown as
decrease in reserves.The central bank may use surplus to purchase foreign securities,
foreign currency, gold etc. which may result in increase in reserves of the nation.
24 Domestic income to be calculated by Expenditure method as per given values. 3

GDPMP = GFCE + PFCE+ GDFCF+ CIS+ NE 3
NNPFC = GDPMP – Dep.+ NFIA - NIT
Net national Disposable Income= NNPMP + Net current transfers from ROW
Mrs. Seema Mishra
PGT(Eco.), KV IIT Powai, Mumbai

PRACTICE PAPER -2018
Subject: ECONOMICS (030)
Class XII
Time : 3 Hours Maximum Marks : 80
Instructions:
1. All questions in both sections are compulsory. However, there is internal choice in some questions.
2. Marks for questions are indicated against each question.
3. Question No.1-4 and 13-16 are very short answer questions carrying 1 mark each. They are required to be
answered in one sentence.
4. Question No.5-6 and 17-18 are short answer questions carrying 3 marks each. Answers to them should not
normally exceed 60 words each.
5. Question No.7-9 and 19-21 are also short answer questions carrying 4 marks each. Answers to them should
not normally exceed 70 words each.
6. Question No.10-12 and 22-24 are long answer questions carrying 6 marks each. Answers to them should not
normally exceed 100 words each
7. Answers should be brief and to the point and the above word limit be adhered to as far as possible.
Section A: Microeconomics
1. If it is given that the total variable cost for producing 15 units of output is Rs.3000 and for 16 units is
Rs.3,500 . Find the value of Marginal Cost. (1)
2. Define normative economics, give a suitable example. (1)
3. Give meaning of ‘Returns to a Factor’. (1)
4. What is market supply of a product? (1)
5. Explain the central problems of an economy. (3)
OR
Why is Production Possibility Curve concave to the origin? Explain.
6. Giving reason, state the impact of each of following on demand curve of a normal good ‘X’ if (3)
ii) News reports claims that consumption of product X has harmful effect on human health.
iii) Income of consumer increases,
7. Identify which of the following is not true for the Indifference Curves. Give valid reasons for choice (4)
of your answer:
a. Lower indifference curve represents lower level of satisfaction.
b. Two regular convex to origin indifference curves can intersect each other.
c. Indifference curve must be convex to origin at the point of tangency with the budget
line at the consumer’s equilibrium.
d. Indifference curves are drawn under the ordinal approach to consumer equilibrium.
OR
A consumer has total money income of 250 to be spent on two goods X and Y with prices Rs of 25
and Rs10 per unit respectively. On the basis of the information given, answer the following questions:
a. Give the equation of the budget line for the consumer.
b. What is the value of slope of the budget line?
c. How many units can the consumer buy if he is to spend all his money income on good X?
d. How does the budget line change if there is a fall in price of good Y?
8. What does the law of variable proportions shows? State the behavior of total product according (4)
to this law.
9. Explain the implications of non-price competition in an oligopoly market. (4)
10. A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given prices (6)
Px and Py. Explain what will happen if :
a. MUx / Px is greater than MUy / Py.
b. Py falls
11. Define Price Floor. What is the common purpose of fixation of floor price by the government? (6)
Explain any one likely consequence of this nature of intervention by the government.
OR
Define Price Ceiling. What is the common purpose for the price ceiling imposed by the government?
Explain any one likely consequence of this nature of intervention by the government in the price
determination process. (2+2+2)
12. State, with valid reasons, which of the following statement are true or false: (6)
a. Average Revenue curve under the Perfect Competition is a downward sloping curve.
b. AFC curve is a rectangular hyperbola curve.
c. When MR is falling but positive, TR will also be falling and positive.
Section B: Macroeconomics
13. What does Supply of money refers to? (1)
14. Write one Quantitative Method of credit control? (1)
15. Define Primary deficit. (1)
16. Give one difference between Direct tax and Indirect tax. (1)
17. If in an economy: (3)
a) Consumption function is given by C = 100 + 0.75 Y, and
b) Autonomous investment is 150 crores.
Estimate (i) Equilibrium level of income and (ii) Consumption and Savings at the equilibrium level of income.
OR
Explain how the economy achieves equilibrium level of income using Consumption - Investment (C+I)
approach. (3)
18. What is investment multiplier? Explain the relation of investment multiplier with marginal (3)
propensity to consume (MPC) and with marginal propensity to save (MPS).
19. Explain the concepts of Real GDP and Nominal GDP, using a suitable numerical example. (3)
OR
State the various precautions of Product Method that should be kept in mind while
estimating national income. (4)
20. Elaborate ‘Economic Growth’ as an objective of government budget. (4)
21. Explain briefly the credit creation process as handled by the commercial banks. (4)
22. Explain how the economy achieves equilibrium level of income using Savings Investment (S-I)
approach. Use diagram. (4+2)
OR
Explain the problem of excess demand in an economy with the help of a diagram. Explain the role
Of bank rate in correcting it.
23. (a) Define Balance of Payments. Write the names of its components. (3+3)
(b) What is meant by ‘official reserve transactions’? Discuss their importance in Balance of Payments.
24. Compute (a) Domestic Income and (b) Net National Disposable Income. (6)
S.No. Items Amount (in Rs. Crores)

1 Net Exports 155
2 Government final consumption expenditure 2500
3 Subsidies 120
4 Gross domestic fixed capital formation 1190
5 Net factor income to abroad 125
6 Net decrease in inventories 100
7 Net Exports (-) 420
8 Net Indirect Taxes 470
9 Net Current transfers from abroad 350
10 Current replacement cost 145
PREPARED BY Mrs. Seema Mishra PGT(Eco.) KV IIT Powai Mumbai

BLUE PRINT
PRACTISE PAPER 2018
ECONOMICS(030)
Name of the Unit Very Short Short Short Long Total

Answers Answer Answer Answer
(1mark) (3 marks) (4 marks) (6 marks)
INTRODUCTION 1 1 4
CONSUMER BEHAVIOUR 1 1 1 13
PRODUCER BEHAVIOUR 1(3) 1 1 13
& SUPPLY
FORMS OF MARKET 1 1 10
NATIONAL INCOME 1 1 10
DETERMINATION OF 2 1 12
INCOME
MONEY AND BANKING 1(2) 1 6
GOVERNMENT BUDGET 1(2) 1 6
BALANCE OF PAYMENT 1 6
TOTAL 1(8) 3(4) 4(6) 6(6) 80(24)
Mrs. Seema Mishra
PGT(Eco.) KV IIT Powai, Mumbai

PRACTICE PAPER-2018
Economics (030)
STD: XII
TIME: 3HRS MAX.M: 80
Instructions:
1. All questions in both sections are compulsory. However, there is internal choice in some
questions.
2. Marks for questions are indicated against each question.
3. Question No.1-4 and 13-16 are very short answer questions carrying 1 mark each. They
are required to be answered in one sentence.
4. Question No5-6 and 17-18 are short answer questions carrying 3 marks each. Answers to
them should not normally exceed 60 words each.
5. Question No.7-9 and 19-21 are also short answer questions carrying 4 marks each.
Answers to them should not normally exceed 70 words each.
6. Question No.10-12 and 22-24 are long answer questions carrying 6 marks each. Answers
to them should not normally exceed 100 words each
7. Answers should be brief and to the point and the above word limit be adhered to as far as
possible.
SECTION-A
1. State any two central problems under ‘problem of allocation of resources’. (1)
2. If it is given that the total variable cost for producing 15 units of output is 3000 and for 16
units is 3,500. Find the value of Marginal Cost. (1)
3. Which of the can be referred to as ‘point of satiety’? (1)
i) Marginal Utility is negative iii) Total Utility is rising
ii) Marginal utility is zero iv) Total Utility is falling
4. Define Marginal Physical Product. (1)
5. State and discuss any two factors that will shift the Production Possibility Frontier (PPF) to
the right.
Or
Draft a hypothetical schedule for a straight line Production Possibility Curve . (3)
6. State the impact of each of following on demand curve of a normal good ͚X͛ if
ii) News reports claims that consumption of product X has harmful effect on human health.
iii) Income of consumer increases. (3)
7. ‘Higher indifference curve represents higher level of satisfaction to the consumer’. Explain
the statement, also state the underlying assumption related to this property of indifference
curve. (4)
Or
A consumer consumes two goods X and Y. Explain what will happen if MUx/Px is greater
than MUy/Py?
8. Explain how the following factors affect the supply of the commodity (any two)
a) Price of factor inputs
b) State of technology
c) Government taxation Policy. (4)
9. Explain ‘black marketing’ as a direct consequence of price ceiling. (4)
10.Suppose the demand and supply curves of a Commodity-X is given by the following two
equations simultaneously:
Qd = 200 – p Qs = 50 + 2p
i) Find the equilibrium price and equilibrium quantity.
ii) Suppose that the price of a factor of production producing the commodity has
changed, resulting in the new supply curve given by the equation
Qs’ = 80 +2p
Analyse the new equilibrium price and new equilibrium quantity as against the
original equilibrium price and equilibrium quantity. (3+3)
11. Show diagrammatically the conditions for consumer’s equilibrium, in Hicksian analysis
of demand. (6)
OR
A consumer has total money income of 500 to be spent on two goods X and Y with prices of 50 and 10
per unit respectively. On the basis of the given information, answer the following questions:
a. Give the equation of the budget line for the consumer.
b. What is the value of slope of the budget line?
c. How many units can the consumer buy if he is to spend all his money income on good X?
d. How does the budget line change if there is a 50% fall in price of good Y?
12. a) Why is Total Variable Cost curve inverse S- shaped? (2)
b) What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a rectangular
Hyperbola? Explain with help of a diagram. (4)
SECTION-B
13. If an economy is to control recession like most of the Euro-Zone nations, which of the
following can be appropriate: (1)
i) Reducing Repo Rate iii) Both (i) and (ii)
ii) Reducing CRR iv) None of (i) and (ii)
14. Which of the following agency is responsible for issuing 1 currency note in India? (1)
i) Reserve Bank of India. iii) Ministry of finance
ii) Ministry of Commerce iv) Niti Aayog
15. The government budget of a hypothetical economy presents the following information,
which of the following value represents Budgetary Deficit. (1)
(all fig. in crores).
A. Revenue Expenditure = 25,000
B. Capital Receipts = 30,000
C. Capital Expenditure = 35,000
D. Revenue Receipts = 20,000
E. Interest Payments = 10,000
F. Borrowings = 20,000
i) 12,000 iii) 20,000
ii) 10,000 iv) None of the above.
16. Which of the following statement is true? (1)

i) Loans from IMF is a Revenue Receipt.
ii) Higher revenue deficit necessarily leads to higher fiscal deficit.
iii) Borrowing by a government represents a situation of fiscal deficit.
iv) Revenue deficit is the excess of capital receipts over the revenue receipts.
17. If in an economy Saving function is given by S = (-) 50 + 0.2 Y and Y = 2000 crores;
consumption expenditure for the economy would be 1,650 crores and the autonomous
investment is 50 crores and the marginal propensity to consume is 0.8. True or False?
Justify your answer with proper calculations.
Or
“Economists are generally concerned about the rising Marginal Propensity to Save (MPS)
in an economy”. Explain why?
(3)
18.Explain how the economy achieves equilibrium level of income using Savings-
Investment (S-I) approach. (3)
19. Suppose in an imaginary economy GDP at Market Price in a particular fiscal year was
4,000 crores, National Income was 2,500 crores, Net Factor Income paid by the
economy to Rest of the World was 400 crores and the value of Net Indirect Taxes is
450 Crores. Estimate the value of consumption of fixed capital for the economy from the
given data. (4)
OR
Discuss any two differences between GDP at constant prices and GDP at current Prices.
20. What is meant by Repo Rate? How does the Central Bank use this measure to
control inflationary conditions in an economy? (4)
21. Elaborate ͚economic growth͛ as objective of government budget. (4)
22. Find National Income from following using expenditure method. (6)
s.no Particulars (in crores)
1 Current transfers from rest of the world 50
2 Net Indirect taxes 100
3 Net Exports -25
4 Rent 90
6 Net domestic capital formation 200
8 NFIA -10
9 Govt final consumption expenditure 400
10 profit 220
11 Mixed income of self employed 400
12 Interest 230
23) “Governments across nations are too much worried about the term fiscal deficit”. Do you
think that fiscal deficit is necessarily inflationary in nature? Support your answer with valid
reasons.
OR
State whether the following statements are true or false. Give valid reasons for your answers.
(i) Unplanned inventories accumulate when planned investment is less than planned saving.
(ii) Deflationary gap exists when aggregate demand is greater than aggregate supply at full
employment level.
(iii) Average propensity to save can never be negative. (6)
24) a) ͚Devaluation and Depreciation of currency is one and the same thing͛. Do you agree?
How do they affect the exports of a country? (3)
b) What is meant by ͚official reserve transactions͛? Discuss their importance in Balance of
Payments. (3)
-----------------------
Prepared by Mrs. Reena Paliwal PGT(Eco.) KV Koliwada, Mumbai
PRACTICE PAPER MARKING SCHEME
Q.NO VALUE POINTS MARKS

(1) ) What to produce and in what quantity? (1/2)
b) How to produce? +
c) For Whom to produce? (1/2)
(Any Two)
(2) MCn = TVCn –TVCn-1 (1/2)

MC16 = TVC16 –TVC15
= 3,500 – 3,000 (1/2)
= 500
(3) ii) Marginal Utility is zero (1)

(4) Marginal Physical Product is the change in output produced by employing (1)
one additional unit
of the variable input.
(5) Two factors that may shift the Production Possibility Frontier of an (3)
economy away from
origin (to the right) are:
(a) Increase in resources available to an economy (natural, physical or
human resource).
New resources may increase the output potential in an economy resulting in
shift of
PPF away from origin.
(b) Improvement in technology, when technology improves the production
potential
increases, i.e. economy may be able to produce more output using existing
resources efficiently.
(6) (i) Demand of the good X will increases, hence demand curve of good X (3)
shifts towards
right.
(ii) Demand of Good X may decrease as people may be inclined to
consume less due to media reports of harmful effect of the good X, as a
result, demand curve may shift
towards left.
(iii)When income of consumer increases the disposable income increases
and consumer is
in a better position of spending more on the good X. Hence consumer may
consume
more of the commodity due to which the demand for the good increases
and demand
curve shifts away from origin.
(7) Higher indifference curve represents higher level of satisfaction, in other (4)
words any combination that lie on a higher indifference curve i.e. away
from origin represents higher level of satisfaction.
Combination B>A
(OX2,OY1 > OX1,OY1)
Good X
The underlying assumption here is the assumption of monotonic preference
which represents that a consumer will prefer a combination which contains
more of at least one and no less of the other.
Or
If MUx/Px>MUy/Py, then it means that satisfaction of the consumer

derives from spending a rupee on Good X greater than the satisfaction
derived from spending a rupee on Good Y.
The consumer will reallocate his income by substituting Good X for Good
Y. As the consumption of Good X increases the marginal utility derived
from it goes on diminishing and reverse proposition occurs for Good Y,
this
process will continue till MUx/Px becomes equal to MUy/Py.
(2+1+1)
(4)
(8) Supply of a commodity is affected by following factors: (4)

a) Price of factor Inputs: If factor input price increases, cost of production
generally rises,
accordingly producers are willing to supply less at the existing price as the
profit probability
decreases. This implies leftward shift in supply curve and vice-versa,
keeping other factors
constant.
b) State of Technology: Improvement in technique of production raises
productivity and
generally lowers per unit cost of production, consequently the probability
to earn more profit
also increases and hence the producer is induced to supply more, as a result
supply curve
shifts towards right.
c) Government Taxation Policy: If government increases taxes, it will
affect the cost of
production adversely and hence supply decreases. But if Government
decreases the tax the
cost of production will fall and the producer will be induced to increase the
supply of the
commodity,ceteris paribus.
(9) Black marketing may be termed as a direct consequence of price-ceiling, as (4)

it implies a situation whereby the commodity under the government’s
control policy is illegally sold at a higher price than the one fixed by the
government, it may primarily arise due to the presence of consumers who
may be willing to pay higher price for the commodity than to go without it.
(10) i) We know that the equilibrium price and quantity are achieved at; (6)
Qd = Qs
200- p =50 + 2p
(-) 3p = (-) 150
And, Equilibrium Quantity q = 200 – 50 = 150 units
ii) If the price of factor of production has changed, then under the new
conditions;
Qd = Qs
200- p = 80 + 2p
(-) 3p = (-) 120
And, Equilibrium Quantity q = 200 – 40 = 160 units
Thus as the equilibrium price is decreasing the equilibrium
quantity is increased.
(11) i) Budget line is tangential to the Indifference curve at a unique (6)

combination of two goods.
i.e, Slope of Indifference Curve = Slope of Budget line
or MRSxy = (-) Px /Py
ii) Indifference Curve is strictly convex to origin at the point of
tangency
i.e., MRSxy must be diminishing.
Good Y
o
Good X
Explanation to the diagram
(12) a) Total Variable Cost is zero at zero level of output. It initially increases at (6)
decreasing rate
and later it increases at increasing rate. TVC is an inversely S-shaped curve
due to the Law of
Variable Proportion.
b) Per unit fixed cost is known as Average Fixed Cost. As the value of
Total Fixed Cost
doesn’t vary at any level of output in short run and if it is divided by an
incremental number
the result would be diminishing with the same proportion as that of the
proportion of increase
of the number of units and the product will be same.
Since TFC remains same at different levels of output, AFC falls as the level
of output is
increased.
The AFC keeps on falling as the level of output increases. AFC can never
become zero
(13) (iii) Both (i)and (ii) (1)
(14) (iii)Ministry of finance (1)
(15) (iv) None of the above. (1)
Budgetary Deficit = Revenue expenditure+Capital Expenditure-(Revenue
receipts+ Capital receipts)
= 25000+ 35000-(20000+3000)
= 50,000 crores
.
(16) (iii) Borrowing by a government represents a situation of fiscal deficit (1)
(17) Yes all the given values are correct (3)
S= -50+0.2Y
S= -50+.02(2000)
=-50 +400
1
= 350 crores
At equilibrium level of income:
Y=C+S
2,000 = C + 350
C = 2000 – 350 = 1,650(in crores)
MPC + MPS = 1
MPC + 0.2 = 1
OR
Since sum of MPC and MPS is unity any increase in Marginal

Propensity to Save (MPS) would directly lead to decrease in Marginal
Propensity to Consume (MPC). This means that may lead to lesser
proportion of the additional income going to consumption which is a vital
factor of Aggregate Demand/Expenditure. This may further lead to fall in
equilibrium level of income in the economy.
1
1
3
23. As per the S-I approach equilibrium if achieved where ex-ante Savings
are C = 1-0.2 = 0.8
(18) As per the S-I approach equilibrium if achieved where ex-ante Savings are (3)
equal to ex-ante investments. Savings and investments indicate leakages
and injections respectively, thus at equilibrium the leakages and injections
are equal to each other.
(19) NNPfc = GDPmp – Consumption of fixed capital – Net factor income to (4)
abroad – Net indirect taxes
2500 = 4000-CFC -450 -400
2500 = 3150 – CFC
CFC = 650 (in crores)
or
Two main difference between GDP at current prices and at constant price
are:
1. GDP at current prices are measured at Current Year’s Prices
whereas GDP at constant prices are measured at base year’s prices.
2. GDP at current prices may increase even if there is no flow of goods
and services whereas GDP at constant prices will only increase
when there is an increase in the flow of goods and services.
(1x4)
(20) Reverse Repo rate is the rate at which Central Bank borrows money funds (4)
commercial banks.
Increase in Reverse Repo Rate induces banks to transfer more funds to
Central Bank and
reduces banks’ ability to create credit.
Open Market Operations refers to buying and selling of government
securities by Central
Bank from/to public and commercial banks. Sale of such securities reduces
the reserve of
commercial banks and adversely affects bank’s ability to create credit and
hence decreases the
money supply in the economy.
(21) Economic Growth implies a sustainable increase in real GDP of an (4)

economy, i.e. an increase
in volume of goods and services produced in an economy. Budget can be
an effective tool to
ensure the economic growth in a country.
i) If the government provides tax rebates and other incentives for
productive ventures
and projects, it can stimulate savings and Investments in an economy.
ii) Spending on infrastructure of an economy enhances the production
activity in
different sectors of an economy.Government expenditure is a major factor
that
generates demand for different types of goods and services in an economy
which
induces growth in private sector too.
However, before planning such expenditure, rebates and subsidies
government should check
the rate of inflation and tax rates. Also there may be the risk of debt trap if
loans are too high
to finance the expenditure.
(22) National Income by Expenditure Method = Private Final Consumption (6)
Expenditure + Government Final Consumption Expenditure + Net
Domestic
Capital Formation + Net Exports + NFIA - NIT
National Income by Expenditure Method = v + ix + vi + iii + viii - ii
National Income by Expenditure Method = 900 + 400 + 200 + (-25 ) + (-
10)
- 100
National Income by Expenditure Method = 1365 Crores
(23) The term fiscal deficit is the difference between the government's total (6)
expenditure and its total receipts (excluding borrowing).
Such borrowings are generally financed by issuing new currency which
may lead to inflation, however, if the borrowings are for the infrastructural
developmental purposes this may lead to capacity building and may not be
inflationary.
or
i) True, as planned savings are more causing the Marginal Propensity to

Consume to reduce
thus Aggregate Demand will fall and producers will have accumulation of
inventory.
ii) False, Inflationary Gap exists when actual Aggregate Demand is more
than Aggregate
Supply corresponding to full employment level of output in the economy.
iii) False, at income levels which are lower than break-even point, Average
propensity to save
can be negative as there will be dissaving in the economy.
(24) a) Depreciation and Devaluation both imply a fall in external value of a (6)
currency; however the term depreciation is used under the floating
exchange rate system that is when the exchange rate system is determined
by the combined market forces of demand and supply.
A currency loses or gains value because of fluctuations in demand and
supply.
The term devaluation is used in a system of fixed exchange rates. In this
system, the exchange
value of a currency is decided by the government. Devaluation of currency
is the deliberate
action of the government.
Depreciation and devaluation of a currency normally encourages exports
from a country, as
exports become cheaper for the foreign nationals and foreign currency can
now buy more of
domestic goods, i.e. the international competitiveness of the goods and
services of such a
nation gets better.
b) The transactions carried on by monetary authorities of a country, which

causes changes in
official reserves are termed as official reserve transactions
Autonomous receipts and autonomous payments give rise to either deficit
or surplus on
balance of payments. The central bank may finance a deficit by :
i. reducing reserves of foreign currency
ii. by borrowing from the IMF or monetary authorities
This will be shown as decrease in reserves.The central bank may use
surplus to purchase
foreign securities, foreign currency, gold etc. which may result in increase
in reserves of the
nation.
Reena Paliwal PGT(Eco.)

Group 2 Question Paper
Subject –Economics
Class XII
 All questions in both sections are compulsory thoughthere is internal choice in

some questions.
mark each.They are required to be answered in one sentence or one word.
1.In case resources of an economy are reduced the PPC will: (1)
a) Shift rightwards b)Shift leftwards
c) Rotate along x-axis d)Rotate along y-axis
अर्थव्मवस्र्ाभें संसाधनोंकीकभीसेउत्ऩादनसंबावनावक्रकहांकीओयजाएगा:
a) दाईंओयखिसकेगा b)फाईंओयखिसकेगा
c)X-Axis ऩयघूभेगा d)Y-Axis ऩयघूभेगा

a)Price maker b)Price taker
c)Both a and b d)None of these
ऩूर्प्र
थ तिमोगगिाकेअंिगथि पभथहोिीहै :
a) कीभितनधाथयक b) कीभि स्वीकायक
c) aऔयbदोनों d) इनभें सेकोईनह ं

तनहहिरागिकोऩरयबाषषिकीजजए।

भांगकेतनमभकेककसीएकअऩवादकोफिाइए।
5.Explain the central problem “what to produce” in an economy. (3)

अर्थव्मवस्र्ाभें केंद्र मसभस्मा “क्माउत्ऩादनककमाजाए” कोसभझाइए।
एकउऩबोक्िाकेवरदोवस्िुओंकाउऩमोगकयिाहै जजसकीकीभि₹1
प्रतिइकाईहै ।अगयउऩबोक्िादोवस्िुओंकेऐसेसभावेशकोचन
ु िाहै िोउसकीसीभांिप्रतिस्र्ाऩनकीदय2
होिीहै , क्माउऩबोक्िासंिुरनभें है?
कायर् स्ऩष्टकीजजए।एकसभझदायउऩबोक्िाइसजस्र्तिभें क्माकये गा,सभझाइए।
Or

िटस्र्िावक्रकीषवशेषिाओंकोसभझाइए (कोईिीन)।
7.Differentiate between increase in demand and increase in quantity demanded of a

commodity. (4)
ककसीवस्िुकीभांगभें वषृ िएवंभांगकीभात्राभें वषृ िकेअंियकोस्ऩष्टकीजजए।
8.Explain the implication of the following in a perfectly competitive market (4)

a)Large number of buyers
b)Free entry and exit of firms
थ तिमोगगिाफाजायभें तनम्नलरखििकेप्रबावकोसभझाइए।
a) क्रेिाओंकीअगधकसंख्मा
b) पभोंकास्विंत्रप्रवेशवछोड़ना
Or
कायर्स्ऩष्टकयिेहुएफिाइएककतनम्नलरखििकर्नसह है मागरि:
a) एकगधकारयकपभथककसीबीकीभिऩयककिनीबीभात्राफेचसकिीहै ।
b) जफसंिुरनकीभिफाजायकीभिसेकभहोगीिोषवक्रेिाओंकेफीचप्रतिस्ऩधाथफढ़जाएगी।
9.What is change in supply? Explain the effect of “Tax imposed on good” on the
ऩूतिथभेंऩरयविथनक्माहै? “वस्िुऩयकयोंकोरगाने” सेवस्िुओंकीऩूतिथऩयक्माप्रबावऩड़ेगा (वक्रफनाइए)।
10. Complete the following table:

(6)तनम्नलरखिििालरकाकोऩूयाकीजजए:
(Rs)
0 36 ∞ 0 0
1 - - - 18
2 - - - 14
3 - - 16 -
4 - - -- 24
Or
Define the law of variable proportion.Explain the law with the help of diagram and
ऩरयविीअनुऩािकेतनमभकोऩरयबाषषिकीजजए।इसतनमभको वक्रएवंसायर्ीकीसहामिासेसभझाइए।
इसकेषवलबन्नचयर्ोंकोबीसभझाइए।
11.Define elasticity of demand. Explain the factors affecting elasticity of demand (any
four). (6)
भांगकीरोचसेआऩक्मासभझिेहैं? भांगकीरोचकोप्रबाषविकयनेवारेकायकोंकीव्माख्माकीजजए
(कोईचाय)।
Qd = 200 - p Qs = 50 + 2p
Qs= 80 + 2 p
ककसीवस्िुकीभांगएवंऩूतिथवक्रकोतनम्नलरखििसभीकयर्भें भानर जजए।

Qd = 200 - p Qs = 50 + 2p
उऩयोक्िसेसंिर
ु नभात्राएवंसंिर
ु नकीभिकोऻािकीजजए।
भानर जजएककसीवस्िक
ु ोप्रबाषविकयनेवारेकायकोंकीवजहसेउसवस्िक
ु ीकीभिभें ऩरयविथनहोजािाहै
जजसकेऩरयर्ाभस्वरुऩनईऩतू िथवक्रकासभीकयर्तनम्नलरखििहोजािाहै -
Qs= 80 + 2 p
ित्ऩश्चािनईसंिुरनभात्राएवंसंिुरनकीभिकोऻािकीजजए।
13Disinvestment is which type of receipt in the budget? (1)

षवतनवेशफजटकी ककसप्रकायकीप्राजतिमोंकेअंिगथिआएगी?
(a)कययाजस्वप्राजतिमां (b)अन्मऩंज
ू ीगिप्राजतिमां
(c)ऩंज
ू ीगिप्राजतिमां (d)कये िययाजस्वप्राजतिमां

(a)additional income that is not to be saved
(b)level of saving at which saving and consumption are equal
(c)ratio of saving to income
(d)tendency of the consumer towards higher savings
फचिप्रवजृ त्िहै-
(a) अतिरयक्ि आम जजसकीफचिनह ंकीगई
(b)फचि स्ियजजसभें फचिऔयउऩबोगफयाफयहो
(c)फचिऔयआमकेफीचकाअनऩ
ु ाि
(d)उऩबोक्िाकाअगधकफचिकीओयझक
ु ाव
15.When household consumption expenditure =Rs.9000, private investment

जफघये रूउऩबोगव्मम = ₹9000, तनजीतनवेशव्मम= ₹7000, सयकाय व्मम = ₹12000, तनमाथि=
₹1000एवंआमाि =₹3000 है , िोिर
ु अर्थव्मवस्र्ाकेअंिगथिसभग्रऩूतिथकास्ियक्माहोगा?

जीएसट (GST) काषवस्िायकीजजए।
केंद्र मफैंकके “सयकायकीफैंक” कामथकोसभझाइए।
Or
नकदआयक्षऺिअनुऩािएवंवैधातनकियरिाअनुऩािभें अि
ं यस्ऩष्टकीजजए।
तनवेशगुर्ककोऩरयबाषषिकीजजए।इसकासंफंधMPC औयMPS केसार्स्ऩष्टकीजजए।

भुद्राकेकामोंकीव्माख्माकीजजए।
याजकोषीमघाटाक्माहै ? इससे अर्थव्मवस्र्ाऩयऩड़नेवारेप्रबावोंकीव्माख्माकीजजए।
Or
सयकाय फजटभें तनम्नलरखिियाजस्वव्ममहै अर्वाऩूंजीगिव्मम? कायर्फिाइए।
(a) कयोकोसंग्रहहिकयनेऩयव्मम
(b) कंतमूटयकीिय दाय ऩयव्मम
21.How will the following be treated while estimating National Income? Give reasons.
(4)
तनम्नलरखििकोयाष्र मगर्नाभें ककसियहशालभरककमाजाएगा? कायर्फिाइए।
(a) फच्चोंकीलशऺाऩयऩरयवायद्वायाव्मम
(b) षवद्मारमद्वायाबफजर केबफरकाबग
ु िान

एकअर्थव्मवस्र्ाभें C = 50 + 0.5 Y
फचिपरन (जहांC=फचिपरन एवंY=याष्र मआम) औयतनवेशव्मम ₹6000है ।
i. याष्र मआमकासंिुरनस्िय
ii. याष्र मआमकेसंिुरनस्ियऩयफचि कीभात्रा
Or
न्मूनभांगकोऩरयबाषषिकीजजए। न्मूनभांगकोवक्रकीसहामिासेसभझाइए। िर
ु ेफाजायकीप्रकक्रमाएवंयेऩो
ये टकाइस्िेभारकयिेहुएन्मूनभांग कीसभस्माकोअर्थव्मवस्र्ा भें कैसेठीकककमाजासकिाहै ?
23.(a) Differentiate between balance of trade and balance of payment. (3+3=6)

(a) बुगिानशेषएवंव्माऩायशेषभें अि
(b) षवदे शीषवतनमभकीभांगकेककन्ह िीनस्रोिोंकोसभझाइए।
24.Calculate (a) GDP at market price through the income method and (b) National
तनम्नलरखििसेऻािकीजजए:
(a) आमषवगधद्वायासकरघये रउ
ू त्ऩादफाजायकीभिोंऩय
(b) व्ममषवगधद्वायायाष्र मआमकीगर्ना
ii. Exports 25
iv. imports 30
ix. subsidies 10
********************ALL THE BEST************************

Group 2
Class XII Subject –(Economics)

some questions.
a) दाईओयखिसकेगा b)फाईंओयखिसकेगा

a)Price make b)Price taker
c) aऔयb दोनों d) इनभें सेकोईनह ं



Or


commodity. (4)

Or

(Rs)
0 36 ∞ 0 0
1 - - - 18
2 - - - 14
3 - - 16 -
4 - - -- 24
Or
ऩरयविीअनऩु ािकेतनमभकोऩरयबाषषिकीजजए।इसतनमभको वक्रएवंसायर्ीकीसहामिासेसभझाइए।
four). (6)
Qd = 200 - p Qs = 50 + 2p
Qs= 80 + 2 p
ककसीवस्िक
ु ीभांगएवंऩतू िथवक्रकोतनम्नलरखििसभीकयर्भें भानर जजए।
Qd = 200 - p Qs = 50 + 2p
उऩयोक्िसेसंिुरनभात्राएवंसंिुरनकीभिकोऻािकीजजए।
भानर जजएककसीवस्िुकोप्रबाषविकयनेवारेकायकोंकीवजहसेउसवस्िुकीकीभिभें ऩरयविथनहोजािाहै
जजसकेऩरयर्ाभस्वरुऩनईऩूतिथवक्रकासभीकयर्तनम्नलरखििहोजािाहै -
Qs= 80 + 2 p

(a)कययाजस्वप्राजतिमां (b)अन्मऩूंजीगिप्राजतिमां
(c)ऩूंजीगिप्राजतिमां (d)कये िययाजस्वप्राजतिमां

(c)फचिऔयआमकेफीचकाअनुऩाि
(d)उऩबोक्िाकाअगधकफचिकीओयझुकाव


Or
नकदआयक्षऺिअनऩ
ु ािएवंवैधातनकियरिाअनऩ
ु ािभें अि
तनवेशगर्
ु ककोऩरयबाषषिकीजजए।इसकासंफंधMPC औयMPS केसार्स्ऩष्टकीजजए।

भद्र
ु ाकेकामोंकीव्माख्माकीजजए।
Or
(4)
(b) षवद्मारमद्वायाबफजर केबफरकाबुगिान

Or
न्मन
ू भांगकोऩरयबाषषिकीजजए। न्मन ू भांगकोवक्रकीसहामिासेसभझाइए। िर

ii. Exports 25

iv. imports 30
ix. subsidies 10
********************ALL THE BEST************************

Group 2 Question Paper
Subject –Economics
Class XII

some questions.
a) दाईंओयखिसकेगा b)फाईंओयखिसकेगा

a)Price maker b)Price taker
c) aऔयbदोनों d) इनभें सेकोईनह ं



Or


commodity. (4)

Or

(Rs)
0 36 ∞ 0 0
1 - - - 18
2 - - - 14
3 - - 16 -
4 - - -- 24
Or
ऩरयविीअनुऩािकेतनमभकोऩरयबाषषिकीजजए।इसतनमभको वक्रएवंसायर्ीकीसहामिासेसभझाइए।
four). (6)
Qd = 200 - p Qs = 50 + 2p
Qs= 80 + 2 p
ककसीवस्िुकीभांगएवंऩूतिथवक्रकोतनम्नलरखििसभीकयर्भें भानर जजए।

Qd = 200 - p Qs = 50 + 2p
उऩयोक्िसेसंिर
ु नभात्राएवंसंिर
ु नकीभिकोऻािकीजजए।
भानर जजएककसीवस्िक
ु ोप्रबाषविकयनेवारेकायकोंकीवजहसेउसवस्िक
ु ीकीभिभें ऩरयविथनहोजािाहै
जजसकेऩरयर्ाभस्वरुऩनईऩतू िथवक्रकासभीकयर्तनम्नलरखििहोजािाहै -
Qs= 80 + 2 p

(a)कययाजस्वप्राजतिमां (b)अन्मऩंज
ू ीगिप्राजतिमां
(c)ऩंज
ू ीगिप्राजतिमां (d)कये िययाजस्वप्राजतिमां

(c)फचिऔयआमकेफीचकाअनऩ
ु ाि
(d)उऩबोक्िाकाअगधकफचिकीओयझक
ु ाव


Or
नकदआयक्षऺिअनुऩािएवंवैधातनकियरिाअनुऩािभें अि
तनवेशगुर्ककोऩरयबाषषिकीजजए।इसकासंफंधMPC औयMPS केसार्स्ऩष्टकीजजए।

भुद्राकेकामोंकीव्माख्माकीजजए।
Or
(4)
(b) षवद्मारमद्वायाबफजर केबफरकाबग
ु िान

Or
न्मूनभांगकोऩरयबाषषिकीजजए। न्मूनभांगकोवक्रकीसहामिासेसभझाइए। िर

ii. Exports 25
iv. imports 30
ix. subsidies 10
********************ALL THE BEST************************

UNIT-7 DETERMINATION OF INCOME AND EMPLOYMENT
Answers:-
Ans-1. If S > I, the level of national income falls.
Ans-2. At equilibrium level of national income, planned saving is equal to planned investment.
Ans-3. The problem of excess demand and deficit demand can be solved through various fiscal
policy measures:
1) Increase in Taxes. 2) Reduction in government expenditure.
Ans-4. Open Market Operations refers to the sale and purchase of government securities by the
central bank to influence credit creation by commercial banks.
Ans-5. The value of MPC will not be greater than one because increment in consumption (ΔC)
cannot be more than the corresponding increment in income (ΔY), i.e., ΔC<ΔY.
Ans-6. When MPS = 0, MPC = 1- 0=1.

Ans-7. ΔY = 1,100 -1,000 = 100, ΔS = 30, MPS = ΔS/ΔY = 30/100 = 0.30
1- MPS =MPC
i.e., 1-0.30 = 0.70 = MPC.
Ans-8. It is not necessary that full employment occur when AD = AS or S = I . It means that full
employment may or may not occur at AD =AS or S = I.
Ans-9 : If I>S, the level of national income expands.

Ans-10. If S > I, the level of national income falls.
Q.11 Fill in the blanks:
i. NNPfc.
ii. 0.6.
iii. 0.3.
iv. 5.
v. inversely
Q12. State weather true or false:
i. True
ii. False
iii. True
iv. False
v. True
Q 13. Consider the following consumption function C= 120 + 0.4Y. Answer the following
i. S= -120+0.6Y
ii. 180
iii. 200.
Q 14. It is because change in consumption can never be greater than change in income.
Q 15. Aggregate demands falls.

Group 1
National Income Accounting( Measurement of National Income)
One Mark questions.

1. When will the domestic income be greater than the national income?
----------------------------------------------------------------------------------------------------------------
2 What must be added to domestic factor income to obtain national income?

----------------------------------------------------------------------------------------------------------------
3 Explain the meaning of non-market activities
---------------------------------------------------------------------------------------------------------------------
4 Define nominal GNP.
---------------------------------------------------------------------------------------------------------------------
5 Define Real GNP.
------------------------------------------------------------------------------------------------------------------
6 Meaning of real flow.
---------------------------------------------------------------------------------------------------------------------
7. Define money flow.

--------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
8 Distinguish between GDPMp and GNP FC

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
9 Distinguish between nominal GNP and real GNP
10. Explain the main steps involved in measuring national income through product
method
---------------------------------------------------------------------------------------------------------------------
----
1. Calculate Value Added at factor cost from the following. ITEMS Rs. CRORES
a. Purchase of raw materials 30
b. Depreciation 12
c. Sales 200
d. Excise tax 20
e. Opening stock 15
f. Intermediate consumption 48
g. Closing stock 10
Answer
Ans 1: When the net factor income from abroad is negative.
Ans 2. Net factor income from abroad.
Ans3. Non marketing activities refer to acquiring of many final goods and services not through
regular market transactions. E.g. vegetable grown in the backyard of the house.
Ans 4. GNP measured in terms of current market prices is called nominal GNP.
Ans5. GNP computed at constant prices (base year price) is called real GNP.
Ans6. It refers to the flow of goods and services between different sectors of the economy. Eg.
Flow of factor services from household to firm and flow of goods and services from firm to
household.
Ans7 It refers to the flow of money between different sectors of the economy such as firm,
household etc. Eg. Flow of factor income from firm to house hold and consumption
expenditure from house hold to firm.
Ans8. The difference between both arise due to (1) Net factor income from abroad. and 2) Net
indirect taxes. In GDPMp Net factor income from abroad is not included but it includes net
indirect taxes.
Ans 9 GNP FC = GDPMp + net factor income from abroad – net indirect taxes
Ans. Nominal GNP is measured at current prices. Since this aggregate measures the value of
goods and services at current year prices, GNP will change when volume of product changes
or price changes or when both changes.
Real GNP is computed at the constant prices. Under real GNP, value is expressed in terms of
prices prevailing in the base year. This measure takes only quantity changes. Real GNP is the
indicator of real income level in the economy.
Ans10 a) Classify the producing units into industrial sectors like primary, secondary and
tertiary sectors.
b) Estimate the net value added at the factor cost.
c) Estimate value of output by sales + change in stock
d) Estimate gross value added by value of output – intermediate consumption
e) Deduct depreciation and net indirect tax from gross value added at market price to
arrive at net value added at factor cost = NDP Fc
f) Add net factor income received from abroad to NDP Fc to obtain NNP FC which is
national in
Ans 11
GVA MP =sales+ change in stock -IC
= 200+(10-15)-48
=147 Cr
NVA FC= GVAMP-NIT-Dep
=147-20-12
=115Cr
GROUP 2
WORKSHEET ON MONEY, BANKING AND BUDGET
Q.1. Define money supply.
Q.2. What are demand deposits?
Q.3. What are time deposits?
Q.4. Write down two essential conditions to become a bank.
Q.5. Define Cash Reserve Ratio.
Q.6. What is meant by Statutory Liquidity Ratio?
Q.7. Define Legal Reserve Ratio.
Q.8. What is a central bank?
Q.9.What is money multiplier?
Q.10. Calculate the value of money multiplier and total deposits created if intial
deposit is Rs.4000/- crore and LRR is 10%.
Q.11. List two measures of qualitative credit control of RBI.
Q.12. List two measures of quantitative credit control of RBI.
Q.13. Define Bank rate.
Q.14. Define repo rate.
Q.15. Define reverse repo rate.
Q.16. What are open market operations?
Q.17. Define budget.
Q.18. Define revenue receipts.
Q.19 Distinguish between tax and fees.

Q.20. Identify the following as capital receipts or revenue receipts ;
Disinvestment proceeds, recovery of loans, borrowing , taxes.
Q.21. What is fiscal deficit?
Q.22. What are capital receipts .
Q.23. What is revenue expenditure?
Q.24. Fiscal deficit equals to_______
Q.25. What is primary deficit?
Q.26. Define revenue deficit .
Q.27. Give example of indirect taxes.
Q.28. What is direct tax?
Q.29. Give examples of direct taxes .
Q.30. What do you mean by zero primary deficit?

ANSWERS FOR WORKSHEET BY GROUP 2
MONEY, BANKING AND BUDGET
A.1. Money supply refers to total stock of money in circulation in an economy at a

given point of time.
A.2. Deposits which can be withdrawn from the banks on demand through
cheque are known as demand deposits.
A.3. Time deposits are deposits which have a fixed period of maturity and can be
withdrawn only after a specified period of time.
A.4. Two essential conditions to become a bank are:
(1)Accepting deposits and (2) Advancing loans.
A.5. CRR refers to minimum percentage of time and demand deposits required to
be kept by every commercial bank with RBI.
A.6. It refers to minimum percentage of time and demand deposits required to be

kept by every commercial bank with themselves in the form of liquid assets.
A.7. It is the minimum ratio (fixed by RBI) of deposits of commercial banks which
is legally compulsory for them to keep as reserves.
A.8. It is an apex institution that controls and regulates banking operations and
money supply of a country.
A.9. It is the multiple by which total deposits increase due to initial deposits.
A.10. Money multiplier = 1/LRR = 1/10% = 10.
Total deposit = Initial deposit x Money multiplier
= 4000 x 10
= Rs.40,000crore.
A.11. Moral suasion and Selective credit control.
A.12. Bank rate and Repo rate.
A.13. It is the minimum rate at which the central bank of a country gives credit to
the commercial banks to meet their long term needs.
A.14. It is the minimum rate at which the central bank of a country gives credit to
the commercial banks to meet their short term needs.
A.15. It is the rate of interest at which commercial banks keep their surplus funds
with the central bank.
A.16. It refers to purchase and sale of government securities in the open market
by the central bank.
Ans.17. Budget is an annual financial statement of estimated income and

expenditure of government .
Ans.18 Revenue receipts are those receipts which neither create any liabilities nor
reduce any assets.
Ans.19 Taxes are compulsory payment for which nothing is promised by the
government in return for paying the taxes to the payer while fees is a payment for
the services rendered by the government..
Ans.20. Capital receipts – Disinvestment proceeds, recovery of loans and

borrowing.
Revenue receipts – taxes.
Ans.21. Fiscal deficit is the excess of total expenditure over total receipts
excluding borrowings.
Ans.22. Capital receipts are those receipts which either reduces assets and
creates liabilities.
Ans.23. Revenue expenditure refers to the expenditure that neither creates any
asstets nor reduces any liabilities.
Ans.24. Borrowings .
Ans.25. It is the difference between fiscal deficit and interest payment.
Ans.26. It is the excess of revenue expenditure over the revenue receipts during
the financial year .
Ans.27. Entertainment taxes, service taxes ,GST .
Ans.28. Direct taxes are those taxes where impact and incidence of tax lies on the
same person.
Ans.29. Income tax , Property tax ,Wealth tax etc.
Ans.30. It means that the government has to resort to borrowings only to make
interest payments for the previous years.
WORKSHEET
UNIT-7: DETERMINATION OF INCOME AND EMPLOYMENT

Questions:-
Q1.What happen to the national income if intended saving is exceed intended investment.
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q2. What is the position of planned savings and planned investment of firms at the equilibrium
level of income and output?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q3. How can the problems of excess demand be combated with the help of fiscal policy?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q4. What is meant by open market operation?

Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q.5 Why can the value of MPC be not greater than one?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q.6. What is the value of MPC when MPS is zero?

Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q.7. When disposable income rises from Rs. 1,000 to Rs. 1,100, savings rise by Rs. 30. Find
out marginal propensity to save?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q.8. Does full employment occur when AD = AS or S = I?

Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q.9. If in an economy intended investment is greater than intended savings, what is the effect
of it on national income?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q10. What happen to the level of national income if intended savings exceed intended
investment?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q.11 Fill in the blanks:
i. The aggregate that represents national income is _________________.

ii. If the consumption function is C = 40 + 0.6Y, the value of MPC is _____________.
iii. If MPC = 0.7, then the value of MPS is _____________.
iv. If the Value of MPS is 0.2, then the value of the investment multiplier is ____________.
v. The investment multiplier is __________ related to MPS.
Q12. State weather true or false:
i. MPC can never be negative. ____________

ii. APC can be less than zero. ____________
iii. APS can be negative. ____________
iv. APC + MPC = 1 ____________
v. When investment multiplier is 1, the value of MPC is zero. ____________
Q 13. Consider the following consumption function C= 120 + 0.4Y. Answer the following
i. Derive the savings function………………………………….

ii. Determine savings at the income level of Rs. 500 crores…………………………..
iii. Find the level of income at which savings well be zero……………………………..
Q 14. Why can the value of MPC be not greater than 1?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Q 15. What happens in an economy, when credit availability is restricted and credit is made
costlier?
Ans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
................... ......................................................
Determination of Income and Employment
Group 3
VERY SHORT ANSWER TYPE QUESTIONS

Q 1 What is aggregate supply?
Ans. It is the money value of all final goods and services available in an economy during an accounting
year.
Q 2 Define involuntary unemployment.
Ans. It refers to a situation where able bodied persons are willing to work at the prevailing wage rate but
unable to find job.
Q 3 What is full employment?
Ans. It refers to a situation in which all those people, who are willing and able to work at the existing
wage rate, get employment.
Q 4 What is underemployment equilibrium?
Ans. It is a state of equilibrium when AS=AD, before full employment level.
Q 5 What is consumption function?
Ans. It shows the relationship between consumption and income. C=f(Y)
Q 6 Define MPC.
A s. It is the ratio of cha ge o co su ptio to cha ge i i co e. MPC=∆c/∆y.
Q 7 Define investment.
Ans. It refers to the addition to the stock of capital goods in the nature of structure equipment and
inventory.
Q 8 What is APS?
Ans. It is the ratio of total saving to total income APS = S/Y
Q 9 Define Multiplier.
A s. It is the ratio of a cha ge i i co e to a cha ge i i vest e t. K= ∆Y/∆I
Q 10 Define Autonomous investment.
Ans. It is the investment made irrespective the level of income. It remains same at all levels of income.
Q 11 Define autonomous consumption.
Ans. It refers to the minimum level of consumption even when income is zero.
Q 12 What is relationship between APC and APS?
Ans. APC + APS= 1
Q 13 Define excess demand.
Ans. It refers to a situation where aggregate demand is more than aggregate supply at full employment
level.
Q 14 What is deficient demand?
Ans. It refers to a situation where aggregate demand is less than aggregate supply at full employment
level.
Q 15 If planned savings are greater than planned investments what will be its effect on inventories?
Ans. Inventories will rise.

Determination of Income and Employment
Group 3
VERY SHORT TYPE QUESTIONS
Q 1 What is aggregate supply?
Q 2 Define involuntary unemployment.
Q 3 What is full employment?
Q 4 What is underemployment equilibrium?
Q 5 What is consumption function?
Q 6 Define MPC.
Q 7 Define investment.
Q 8 What is APS?
Q 9 Define Multiplier.
Q 10. Define Autonomous investment.
Q 11 Define autonomous consumption.
Q 12 What is relationship between APC and APS?
Q 13 Define excess demand.
Q 14 What is deficient demand?
Q 15 If planned savings are greater than planned investments what will be its effect on inventories?
Worksheet (Topic: Foreign Exchange Rate)
Q1. Define foreign exchange.
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q2. What do you mean by foreign exchange rate?
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q3. Give two reasons of demand for foreign exchange.
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q4. Give two sources of supply of foreign exchange.
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q5. Explain Managed floating exchange rate system .
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q6 Why does supply curve of foreign exchange slope upward?
………………………………………………………………………………………………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………...
Q7. What will be the effect on imports if foreign exchange rate increases?
………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………………………………….
Q8. How can increase in foreign direct investment affect the price of foreign exchange?
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q9. Name the market exchange rate system in which central bank actively intervenes.
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Q10. state the three functions of foreign exchange market.
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
Worksheet of Balance of Payment
Q1. What is meant by balance of payments?
Q2 what is meant by balance of trade?
Q3 name two transactions that determine balance of trade.
Q4 name three invisible items of balance of payment.
Q5 A strategy of growth that favors domestic production of goods, which are imported from rest of the world is called:
Q6. Current account BoP records:
Q7 Capital account BoP records all such transactions which cause:
Q8 Name two items related to current account BOP.
Q9 Name two items related to capital account BOP
Q10. How is balance of trade estimated?

Answers of Balance of Payment worksheet
Ans.1 BOP refers to the statement of accounts recording all monetary transactions of a country with rest of the world in an
accounting year.
Ans2 it is the difference between the value of import and exports of only physical goods.
Ans3 1. Export of goods 2. Import of goods
Ans4 1. Export and import of services such as shipping insurance and banking.
2. interest and dividend payment between countries.
Ans5. Import substitution
Ans6. a. Exports and imports of goods
b. Exports and imports of services
c. Current transfers
Ans7. Change in the ownership of assets between one country and rest of the world
Ans8 1.export and import of goods 2.Export and import of services.
Ans9 1. International sale and purchase of financial assets
2. International sale and purchase of real assets.
Ans10 BOT = export of goods – import of goods.

Worksheet (Topic: Producer’s Equilibrium)
1. Define Marginal Product.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
2. Define Total Product.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
3. Define Average Product.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
4. What is short run?
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
5. What is long run?
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
6. What do you mean by fixed factor? Give two examples.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
7. What do you mean by variable factor? Give two examples.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
8. Define law of variable proportion.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
9. What is the behavior of MP in increasing return to a factor?
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
10. What is the behavior of MP in diminishing return to a factor?
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
11. Why MC is ‘U’ shaped?
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
12. Give any two reasons for increasing return to a factor.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
13. Give any two reasons for diminishing return to a factor.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
14. Define Marginal Cost.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
15. Define Total Cost.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
16. Define Average Cost.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
17. Define Marginal Revenue.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
18. Define Total Revenue.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
19. Define Average Revenue.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
20. Write the meaning of producer’s equilibrium.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
GROUP NO 2
Consumer’s equilibrium and demand

ONE MARK QUESTIONS AND ANSWERS
1. What do you mean by utility?
Ans :- Utility is the want satisfying power of a commodity.

2. How is total utility derived from marginal utility?
Ans :- Total utility is the sum total of marginal utilities of various units of a commodity.
TUn= MU1+MU2+MU3------ +MUn
3. State the law of equi-marginal utility.
Ans :- It states that a consumer gets maximum satisfaction when the ratio of the marginal utilities of two
goods and their prices is equal i.e., MUx / Px = MUy / Py
4. What will you say about MU when TU is maximum?
Ans :- MU is zero when TU is maximum

5. Give the reason behind a convex indifference curve.
Ans :- Diminishing marginal rate of substitution.
6. Give the formula for calculating the slope of the budget line.
Ans :- It is equal to the ratio of the prices of the two commodities , i.e., Px / Py
7. Suppose a consumer͛s preferences are monotonic. What can you say about his preference ranking
over the bundles (10,10),(10,9) and (9,9)?
Ans :- Consumer will monotonically prefer bundle (10,10) to (10,9) and (9,9) and also prefer bundle
(10,9) to (9,9)
8. A rise in the income of the consumer leads to a fall in the demand for commodity ͚x͛. What type of
good is commodity ͚x͛?
Ans :- Inferior good

9. What do you mean by substitute and complementary goods? Give two examples each.
Ans :- Substitute goods are those goods which can be used in place of each other. Ex. Tea and Coffee.
Complementary goods are those goods which are used together to satisfy a given want. Ex : Car and
petrol.
10. Mention one factor that causes a leftward shift of the demand curve.
Ans :- Fall in income of a consumer.

11. What causes a movement along the demand curve of a commodity?
Ans :- When the price of a commodity changes and other factors remain constant, there will be
movement along the demand curve.
12. What is demand function?
Ans: - A demand function shows the functional relationship between the quantity demanded and the
factors on which demand depends on.
13. Define price elasticity of demand.
Ans :- It refers to the degree of responsiveness of quantity demanded to change in price.

GROUP NO 2
Consumer’s equilibrium and demand

ONE MARK QUESTIONS
1. What do you mean by utility?
2. How is total utility derived from marginal utility?
3. State the law of equi-marginal utility.
4. What will you say about MU when TU is maximum?
5. Give the reason behind a convex indifference curve.
6. Give the formula for calculating the slope of the budget line.
GROUP NO 2
7. Suppose a consumer͛s preferences are monotonic. What can you say about his preference ranking
over the bundles (10,10),(10,9) and (9,9)?
8. A rise in the income of the consumer leads to a fall in the demand for commodity ͚x͛. What type of
good is commodity ͚x͛?
9. What do you mean by substitute and complementary goods? Give two examples each.
10. Mention one factor that causes a leftward shift of the demand curve.
11. What causes a movement along the demand curve of a commodity?
12. What is demand function?
13. Define price elasticity of demand.

GROUP NO 2
FORMS OF MARKET- Oligopoly
Worksheet 2
Q.1 In which market homogeneous goods are sold ?
Q.2 when there are small no.of firms ,what will be the market form?
Q.3 In which market form, firms are reluctanat to change the price?
Q.4 what will be the shape of demand curve in perfect competition and oligopoly?
Q.5 Distinguish between collusive and non collusive oligopoly?

Forms of Market
Worksheet 1
Q1. What is a market?

Q2. Define perfect competition.
Q3. In which market form a firm is a price taker?
Q4. What do you understand by product differentiation?
Q5. State any two features of perfect competition market.
Q6. What is a cartel?
Q7. What are patents?
Q8. What are selling costs?
Q9. Define non price competition.
Q10. Why is a demand curve under monopoly less elastic as compared to
monopolistic competition?
Q11. When a firm is called price maker?
Q12. What is perfect oligopoly?
Q13. Differentiated product is a feature of:

(a) Monopolistic competition (b) oligopoly only
(c) Both monopolistic and oligopoly (d) monopoly
Q14. AR curve coincides with MR curve in

(a) monopoly (b) oligopoly
(c) perfect competition (d) all of these
Q15. Why is the number of firms small in oligopoly?

ANSWERS
Forms of Market
Worksheet 1
Ans.1 it refers to a region where the buyers and sellers of a commodity come in
contact with each other to carry the transaction of purchase and sale of the
commodity.
Ans2. It refers to a market situation where there are very large number of buyers
and sellers dealing in a homogeneous product at a price fixed by the industry.
Ans.3 Perfect competition
Ans4. It refers to when producers produce different products on the basis of
brand, colour, shape etc., but that products should be a close substitute to each
other.
Ans. 5 Large number of sellers and buyers, Homogenous product
Ans6. It is a group of firms which have agreed to work together so as to avoid
competition and secure monopoly control of the market.
Ans.7 Patents entitle the owner an exclusive right to a production process.
Ans8. These refer to the expenses incurred on marketing , sales, promotion and
advertisement of the product to highlight the features of the product.
Ans9. It means competing with others firms by offering free gifts, extra product,
etc. without reducing the prices.
Ans10. It is because of no close substitutes of the product available under
monopoly as compared to monopolistic competition.
Ans12. If the firms produce homogeneous product, like cement or steel, the
industry is called a perfect oligopoly.
Ans11. Monopoly
Ans13. (c) both monopolistic and oligopoly
Ans. 14. (c) perfect competition
Ans.15 because firms operate on a big scale producing a significant part of total
output of the industry, there is high interdependence amongst sellers and
barriers to entry of firms exist.
Chapter 1: Introduction: Worksheet II
1. Which of the following subject matter is studied in Microeconomics?

i. The theory of consumer behavior
ii. Aggregate Demand and supply
iii. Government budget
iv. National Income
2. Which of the following is not studied in Macroeconomics?
i. Employment Level
ii. Aggregate demand and aggregate supply
iii. National Income
iv. Individual Firm
3. Economic Problem arises because of:
i. Resources are scarce
ii. Wants are unlimited
iii. Resources have alternative uses
iv. All the above
4. Which of the following is not a central problem of an economy
i. What to produce
ii. How to produce
iii. For whom to produce
iv. Indiscipline among students
5. Any point outside the boundary of the PPC shows:
i. Under utilization of resources.
ii. Unattainable combination of output
iii. Efficient utilization of resources
iv. None of these
6. In which situation PPC shifts to the right
i. Discovery of new resources
ii. Reduction in resources
iii. Inefficient technology
iv. None of these
7. The PPC is
i. Downward sloping
ii. Upward sloping
iii. Parallel to the X axis
iv. All of the above
8. An economy produces two goods wheat and cloth. Find out MOC using the following table
Wheat Cloth i. 1
100 0 ii. 10
90 25 iii. 0.4
iv. 0.25
9. Value of a factor in its next best alternative use is:
i. Social cost
ii. Opportunity cost
iii. Marginal rate of substitution
iv. PPC
10. Which of the following countries will face central problems?
i. India
ii. China
iii. USA
iv. All of these

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List of participants in the two day work shop for pgt economics (kvs mumbai region)

Date:3rd and 4th august 2018

COURSE DIRECTOR: SHRI MAHIPAL SINGH,PRINCIPAL, KV BANDHARA.

नाम पदनाम के वि के नाम

GROUP NAME OF THE PARTICIPANTS KV TOPIC

GROUP NAME OF THE PARTICIPANTS KV TOPIC

श्रीमती समता ससह नुं 2 वायुसेना कें द्र,

Group 3 DETERMINATION OF INCOME AND

Group 4 DISCUSSION ON THE

TWO DAYS WORK SHOP FOR PGT ECONOMICS OF MUMBAI REGION

STRATEGIES TO IMPROVE THE CLASS XII RESULT 2018-19

REPORT ON DAY ONE (3RD AUGUST 2018)

REPORT ON DAY 2(4TH AUGUST 2018)

SCHEDULE OF THE PROGRAMME OF THE TWO DAY WORK SHOP

3RD August, 2018

6 LUNCH BREAK 12.30PM TO 1.15 PM

8 Preparing strategies for making 2,00PM TO2.30 PM

Theory M: 80 Duration: 3 Hours

Very Long Total

3 Producer’s behavior and supply 1(3) 4(1) 6(1) 13

Forms of market and price

9 Balance of payments 1(2) 4(1) 6

Total 1*8=8 3*4=12 4*6=24 6*6=36 80

Class – XII M. Marks – 80

Subject – Economics Time – 3 Hours

i. All questions are compulsory

i. सबी प्रश्न अननवामय है

बाग-अ (प्रायजभबक व्मजटि अथयशास्त्र)

1. Decisions on the central problems in a market economy are taken by 1

एक फाजाय अथयव्मवस्त्था भें आधथयक ननर्यम लरए जाते है

a. सयकाय मा केंद्रीम शजक्तमों द्वाया

2. Variable cost per unit of output is called 1

प्रनत इकाई जस्त्थय रागत को क्मा कहा जाता है

a. कुर जस्त्थय रागत

4. If supply of a product increases, equilibrium price will 1

5. What do you mean by economic problem and why does it arise? 3

Why demand curve of a firm in monopoly market is less elastic. Explain.

फतामे की ननभन कायक एक वस्त्तु की भाॊग की रोच को कैसे प्रबाद्धवत कयते है

ननभन सायर्ी को ऩयू ा कये

इकाईमाॊ कुर रागत कुर जस्त्थय कुर

Section – B (Introductory Macroeconomics)

बाग- फ (प्रायजभबक सभजटि अथयशास्त्र)

13. Opening stock can be ascertained as – 1

आयॊ लबक स्त्िॉक ननकरा जा सकता है -

a. बफक्री + उत्ऩादन भें अॊतय

14. If APC increases what will happen to APS will 1

मदद APC फढ़ता है तो APS

a. Demand exceeds supply

द्धवदे शी द्धवननभम दय ननधायरयत होती है जफ

17. Explain the components of domestic income. 3

आबावी भाॊग की अवधायर्ा को ये खा धचर की सहामता से सभझाइमे |

“Saving and consumption curves are complementary curves” comment.

21. State four main sources of supply of foreign exchange. 4

22. Explain any two functions of central bank. 6

23. Explain the following 6

ननभनलरखखत को स्त्ऩटि कीजजमे

S.No. Items (Rs. In

S.No. भद कयोड़ भें

Class – XII M. Marks – 80

Subject – Economics Time – 3 Hours

Q.no. Expected Answer Marks

If there is improvement in technology or increase in resources, In both cases PPC will

Combinations Good 1 Good 2

Total 18=8 34=12 46=24 66=36 80