ELPRO INTERNATIONAL SCHOOL, PUNE

Session: 2021-22
Unit Test 1
Set A

Name : Date : 25/ 06/ 2021

Class : XII Time : 2 Hours

Subject: ECONOMICS Max Marks: 50 Marks

General Instructions

1) Please check that this question paper contains 5 printed pages.

2) Please check that this question paper contains 20 questions.
3) Please write down the serial number of the question before attempting it.
4) 15 minute time has been allotted for reading the paper. During this time the students will
read the question paper only and will not write any answer in the answer book during this
time
5) All questions are compulsory.
6) Marks for questions are indicated against each.
7) Attempt all parts of the question together.
8) Question no 3-5 are Case based Questions based on a diagram.
9) Question number 1-10 are very short answer questions carrying 1 mark each. They are
required to be answered in one sentence each.
10) Question number 11-14 are short answer questions carrying 3 marks each. Answers to
them should normally not exceed beyond 60- 80 words each.
11) Question number 15-18 are also short answer questions carrying 4 marks each. Answers
to them should normally not exceed beyond 80 -100 words each.
12) Question number 19-20 are long answer questions carrying 6 marks each. Answers to
them should normally not exceed beyond 100-150 words each.
13) Answers should be brief and to the point and the above word limit be adhered to as far as
possible.

Q1. Define Depreciation. 1

Q2. State under what conditions the following statements may be true: 1
a) Domestic income is greater than National income.
b) Value of output is equal to value added.
 Q3-Q5 Case Based Question:

Analyse the following diagram and answer the questions based on it:

Q3. In the above model, how many sectors exit? Name them. 1

Q4. When money moves out of the circular flow of income, it is known as ____________ (Fill in the 1
blank with the appropriate answer)

Q5. What are factors of production and who own them? 1

Q6. Identify the correct sequence of the alternatives given in Column II and match them with their 1
respective terms in Column I.

Column-I Column-II

A-Demand Deposits i - Sum of currency, demand deposits, and other deposits of

RBI

B-Double Coincidence of ii- Sum of currency, demand deposits and time deposits
wants

C- Broad concept of Money iii- When 2 persons are making demand for the same type of
supply good
 D- Narrow concept of iv- Sum of Current Account and Saving Account Deposits
Money supply

Choose the correct alternative:

a) iv, ii, iii, i

b) iv, iii, ii , i
c) iii, iv, ii, i
d) iii, iv, i, ii

Q7. Read the following statements Assertion (A) and Reason (R). Choose one of the correct 1
alternatives given below.
Assertion (A): The currency notes do not carry as much value in it as is denominated, still has
general acceptance.
Reason (R): Currency notes are backed by a legal promise from the Central bank and the central
government of the country.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true, but Reason (R) is false.
d) Assertion (A) is false, but Reason (R) is true.

Q8. When will GDP of an economy be equal to GNP? 1

Q9. Credit creation depends upon_______________. (Choose the correct alternative) 1

a) Initial level of deposits

b) Money multiplier
c) Both (a) and (b)
d) None of the above

Q10. If cash reserve ratio is 15% and statutory liquidity ratio is 20%, money multiplier would be ‘5’ 1
(State whether true/false and justify)

Q11. Write any 6 points of differentiation between Macroeconomics and Macroeconomics. 3

Q12. Define Stock and Flow. Classify the following as Stock and Flow. 3

1) Savings
 2) Wealth
3) National Income of a country
4) Capital

Q13. Calculate NDP at FC from the following data: 3

SR ITEMS AMOUNT
NO.
(Rs Crores)

1 Rent 400

2 Royalty 200

3 Interest 500

4 Compensation of employees 1000

5 Profits 500

6 Mixed Income 1000

Q14. Illustrate with a hypothetical example the process of credit creation. 3

Q15. Explain the interdependence between microeconomics and macroeconomics with the help of 2 4
illustrations.

Q16. Distinguish between Real Flow and Money Flow. 4

Q17. Explain the components of Factor Income of the Income Method. 4

Q18. What is the main aim of Commercial Banks? Explain the “Accepting Deposits” function of the 4
Commercial Banks.
Q19. a) Are the following a part of the country’s Net Domestic Product at Market Price? Yes/No. 3
Explain.

1) Net Exports
2) Net factor income from abroad
3) Consumption of Fixed capital

b) “GDP as an index of welfare may understate or overstate welfare.” Explain the statement using 3
examples of positive and negative externality.

Q20. Read the following statements. Do you agree with the given statement? Justify your answer with 6
valid reasons.

1) One rupee notes are issued by the RBI and bear the sign of the Governor.
2) The borrower under Cash Credit facility is charged interest on all the amount credited to
his account.
3) To increase the money supply in the economy, RBI reduces the margin requirements.