SHAHEED BHAI DIALA JI PUBLIC SCHOOL

LONGOWAL (Distt. Sangrur Pb.)

PRE-BOARD 2 EXAMINATION (2020-2021)
CLASS XII ECONOMICS (030)
Time Allowed: 3 Hours M.M: 80
General Instructions:
a) This question paper contains two parts: Part A - Macro Economics (40 marks) Part B - Indian Economic Development (40
marks).
b) Question No. 1-10 and Question No. 18 – 27 (including two Case Based Questions) are 1 mark questions and are to be
answered in one word/sentence.
c) Case Based Questions (CBQ’s) are Question No. 7-10 and Question No. 24-27.
d) Question No. 11-12 and Question No. 28 – 29 are 3 marks questions and are to be answered in 60 - 80 words each.
e) Question No. 13-15 and Question No. 30 – 32 are 4 marks questions and are to be answered in 80-100 words each.
f) Question No. 16-17 and Question No. 33 – 34 are 6 marks questions and are to be answered in 100-150 words each.
g) Answers should be brief and to the point and the above word limit be adhered to as far as possible.
Part-A (Macro-Economics)

Q1. Aircraft of Air India operated between Canada and England are the parts of the economics territory of
a) Canada b) England c) India d) Canada and England both (1)

Q2. Which one is a qualitative measure of credit control?

a) Bank rate b) open market operation c) CRR d) Margin Requirement (1)

Q3. Which of the following is not helpful in controlling money supply?

a) Free market policy b) Bank rate c) CRR d) Change in margin requirements (1)

Q4. Match the following:

COLUMN I COLUMN II
a. Ex-Post Saving i. Planned value of saving in an economy
b. Ex-Ante Saving ii. Saving function
c. S = -C+MPS(Y) iii. Equilibrium level of output
d. S = I iv. Actual value of saving in an economy

Q5. Autonomous transactions take place on

a) Current Account b) Capital Account c) Official Reserve Account d) Both (a) and (b) (1)

Q6. Balance of trade is (-) ₹ 500 crores and the value of exports is ₹ 1,200 crores. What will be the value of imports?
a) ₹ 700 crores b) ₹ 1,700 crores c) ₹ 500 crores d) ₹ 1,200 crores (1)

Read the following and answer question 7-10 on the basis of same
In country “A” foreign exchange rate move up and down due to change in the factors influencing supply and demand
and the government neither announce any official exchange rate nor takes steps to enforce it.
In country “B” foreign exchange rate basically determined by the market forces but government actively participate
in the foreign exchange market and frequently intervene to buy or sell currencies or change their monetary (credit)
policies to affect their exchange rates.
In country “C” government specify exactly the rate at which dollars will be officially converted into other currencies
such as Japanese Yen, German Marks, Swiss Franc, Italian Lira, and so on
Q7. Country “A” follows which foreign exchange rate regime:
a) Fixed exchange rate system c) Dirty floating system
b) Floating exchange rate system d) None of the above (1)

Q8. Country “C” follows which foreign exchange rate regime:

a) Fixed exchange rate system c) Dirty floating system
b) Floating exchange rate system d) None of the above (1)

Q9. Country “B” follows which foreign exchange rate regime:

a) Fixed exchange rate system c) Dirty floating system
b) Floating exchange rate system d) None of the above (1)

Q10. Which method is mostly followed by the countries now a days? (1)

Q11. “Final goods include only those goods which are consumed by households.” Defend or refute the given
statements with valid reason.
OR
“Circular flow principle is based on the assumption that one’s expenditure will become other’s income.” Explain the
given statement. (3)

Q12. Defend or refute the given statements with valid reasons.

a) “Ex-ante aggregate demand is always equal to Ex-ante Aggregate supply.”
b) “Ex-ante Savings and Ex-ante Investments are always equal.” (3)

Q13. Using a hypothetical numerical example, explain the proces s of credit creation by a commercial bank. (4)

Q14. “India is taking huge leaps in the index of Ease of Doing Business, as a result many MNC ’s are shifting their
production base to India”
In the light of the above statement, comment upon the flow of foreign exchange and its likely impact on the Indian
Economy. (4)

Q15. a) Define revenue expenditure

b) Distinguish between Direct tax and Indirect tax. (4)

Q16. a) Calculate the value of ‘Change in Stock’ from the following data:
Sr. No. Items Amount ( in ₹ Crore)

i. Sales 400
ii. Net value added at Factor Cost (NVAFC) 200
iii. Subsidies 10

iv. Change in stock ?

v. Depreciation 40

vi. Intermediate consumption 100

 b) Define Real Gross Domestic Product. (4+2)

Q17. a) In an economy, if initial investments are increased by ₹ 100 crores, discuss the working of investment
multiplier presuming marginal propensity to consume 0.8
b) If the saving function is S = (-) 10 + 0.2Y how can consumption function be derived from the given saving
function. (4+2)

SECTION-B (Indian Economic Development)

Q18. Which of the following statements is not true about the foreign trade in context of Indian economy during the
British rule?
a) India became exporter of primary products and an importer of finished consumer goods and capital goods
from Britain
b) India traded with many countries of the world despite discriminatory tariff policy pursued by the British
government.
c) India generated huge export surplus
d) Britain had a monopoly control over India’s foreign trade. (1)

Q19. When was NITI Aayog formed?

a) 1950 b) 2019 c) 2015 d) 2012 (1)

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below

Q20. Assertion: The problem of ‘gender bias’ in offering opportunities of education to male and female children is
still prevalent. The enrolment ratio of female to male is still low.
Reason: Migration of qualified citizens of a country is a sign of progress. This accelerates the process of human
capital formation.
a) Both assertion (A) and Reason (R) are true and Reason (R) is correct explanation of Assertion (A)
b) Both assertion (A) and Reason (R) are true and Reason (R) is not correct explanation of Assertion (A)
c) Assertion (A) is true and Reason (R) is false
d) Assertion (A) is false but Reason (R) is true (1)

Q21. Assertion: The State Bank of India was set up in 1955 with a focus on rural credit.
Reason: The government realized that the rural credit needs could not be met by the cooperative credit
societies alone, and that the commercial banks should play an important role.
a) Both assertion (A) and Reason (R) are true and Reason (R) is correct explanation of Assertion (A)
b) Both assertion (A) and Reason (R) are true and Reason (R) is not correct explanation of Assertion (A)
c) Assertion (A) is true and Reason (R) is false
d) Assertion (A) is false but Reason (R) is true (1)

Q22. When were economic reforms introduced in Pakistan?

a) 1947 c) 1978
b) 1988 d) 1991 (1)

Q23. Which of the following is a reason for poor human capital formation in India?
a) Brain drain c) High growth of population
b) Insufficient resources d) All of these (1)
Read the following case study carefully and answer the question number 24-27
In a survey it was indicated that through measure taken by the government to improvise the condition of poor in
India, which included subsidies on purchase of basic food items, lower taxes for the poor and capital grants to the
poor. There were a lot of legislative measure taken as well to ensure their upliftment that yielded fruitful results to
some extent, like minimum wages act, ‘price floor’ policy and right to education.
Q24. While ‘price policy’ etc. comes under the legislative reforms, what comprised of tax concessions, subsidies and
capital grants?
a) Monetary reforms c) Income reforms
b) Fiscal reforms d) Grants reforms (1)

Q25. What is meant by minimum wages act? (1)

Q26. The stipulated minimum price that must be offered to the farmers for the purchase of their output is
called ________ (1)
Q27. What is capital grants? (1)

Q28. “It is necessary to create employment in the formal sector rather than in the informal sector.” Defend or
refute the given statement with valid arguments.
Or
Defend or refute the following statements:
a) Infrastructure facilities raise productivity in tertiary sector of the economy.
b) In any country as the income rises, the composition of infrastructure requirements changes significantly. (3)

Q29. “Rapid increase in economic growth surely trickles down to the people under the absolutely poor category.”
Defend or refute the given statement with valid arguments. (3)

Q30. “Agriculture sector appears to be adversely affected by economic reform process.” Explain the given
statement.
OR
India is often called the ‘Outsourcing Destination’ of the world. Discuss the prime reasons for this name given to
India. (4)

Q31. “India, China and Pakistan have travelled more than seven decades of developmental path with varied results.”
Explain the given statement with valid arguments. (4)

Q32. Discuss briefly the rationale behind choosing ‘Self-reliance’ as a planning objective for the Indian economy. (4)

Q33. a) State the meaning of ‘Poverty line’ (2)

b) Define the following
i) Carrying capacity of environment
ii) Absorptive capacity of environment (4)

Q34. a) “The Indian Health System needs a stronger dose of public expenditure to cure itself.” Justify the given
statement with valid arguments. (3)
b. Explain the six system of Indian medicine. (3)

Or
a) Why are less women found in regular salaried employment?
b) Analyse the recent trends in sectoral distribution of workforce in India:
Trend in Employment Pattern (Sector-wise and Status-wise), 1972-2018 (in %)

Item 1972-73 1983 1993-94 2011-12 2017-18

Primary 74.3 68.6 64 48.9 44.6
Secondary 10.9 11.5 16 24.3 24.4
Services 14.8 16.9 20 26.8 31.0
Total 100 100 100 100 100