Class 12 Shiv Das

2021-22
CBSE
Term 1
(Nov-Dec)
Chapterwise
QUESTION BANK
MC Q s
ECONOMICS
Competency Based Questions
• Case Studies with MCQs  • Objective Type MCQs
• Assertion-Reasoning

Chapterwise
• Keynotes
• Questions & Answers

OMR Based
Sample Question Paper

FOLLOW US
R.P.A. shivdasbooks
 © All
• No part of this book may be reproduced or cop-
ied in any form or by any means without the
written permission of the publishers.
Rights • The publishers have taken all possible
Reserved precautions in publishing this book, yet if any
mistake has crept in, the publishers shall not be
responsible for the same.
• All disputes shall be subject to the jurisdiction
of court at Delhi only.

PUBLISHED BY SHIV DAS & SONS

C-8, Sector 6, Noida
Uttar Pradesh-201 301, India

+91-9910055604, 7840040400
0120-4197490, 4305480

info@shivdas.in • www.shivdas.in
Trade contact: sales@shivdas.in

Printed at:
First Impression
Corporate Services Pvt. Ltd., E-114, Sector-63
Noida, Uttar Pradesh-201301
During the course of the year if there are any updates
in the Curriculum due to the Pandemic, we will
provide all the updates for free with the help of the
given Barcode.

FOR LATEST CBSE

2022 UPDATES
Scan The QR CODE

FREE DOWNLOADS
AND OTHER CONTENT

Scan QR Code

Scan The QR CODE

FOLLOW US
Shivdasbooks
C ontents
Term–1

Latest Syllabus (Issued by CBSE) ...(vi)

Competency Based Questions (CBQs)
PART A : INTRODUCTORY MACROECONOMICS
Unit 2 Money and Banking ... C-1
Unit 4 Government Budget and the Economy ... C-6
Unit 5 Balance of Payments ... C-11
PART B : INDIAN ECONOMIC DEVELOPMENT
Chapter 1 Indian Economy on the Eve of Independence ... C-16
Chapter 2 Indian Economy (1950-1990) ... C-22
Chapter 3 Liberalisation, Privatisation and Globalisation: An Appraisal ... C-29
Chapter 4 Poverty ... C-34
Chapter 5 Human Capital Formation ... C-39
Chapter 6 Rural Development ... C-44
Chapterwise CBSE Examination Questions
PART A : INTRODUCTORY MACROECONOMICS
Unit 2 Money and Banking ... 1
Unit 4 Government Budget and the Economy ... 17
Unit 5 Balance of Payments ... 35
PART B : INDIAN ECONOMIC DEVELOPMENT
Chapter 1 Indian Economy on the Eve of Independence ... 51
Chapter 2 Indian Economy (1950-1990) ... 57
Chapter 3 Liberalisation, Privatisation and Globalisation: An Appraisal ... 76
Chapter 4 Poverty ... 93
Chapter 5 Human Capital Formation ... 104
Chapter 6 Rural Development ... 115
OMR Based Sample Question Paper ...OMR-1
✽ • •• • ✽
 CBSE BOARD EXAM 2021-22

NEW PATTERN
(CBSE Circular no. Acad-51/2021) dated 5th July, 2021

TERM-1
50% Syllabus for Nov-Dec. 2021
Questions Types (90 Minutes)

CASE BASED MULTIPLE CHOICE ASSERTION-REASON

MCQs QUESTIONS TYPE MCQs

✰ CBSE to send Question Papers with marking scheme.

✰ Exams will be conducted in the school.
✰ OMR sheet to be used for Evaluation.
✰ Term-1 marks will add to the final result.

Internal Assessment
✰ 3 Periodic Tests
✰ Student Enrichment
✰ Portfolio
✰ Practical
✰ Speaking listening activities
✰ Projects
(v)
 Latest Syllabus (Issued by CBSE) (24 TH
July 2021)

ECONOMICS
COURSE STRUCTURE—CLASS XII (SESSION 2021-2022)
Theory
TERM-1
Time: 90 minutes Maximum Marks: 40

Units Marks Periods

Part A : Introductory Macroeconomics
6 8
✰ Money and Banking
✰ Government Budget and the Economy 6 15
✰ Balance of Payments 6 7

Sub Total 18 30
Part B : Indian Economic Development
✰ Development Experience (1947-90) and Economic Reforms since 1991:
  • Indian Economy on the eve of Independence
12 28
  • Indian Economy (1950-90)
  • Liberalisation, Privatisation and Globalisation : An Appraisal
✰ Current challenges facing Indian Economy
  • Poverty
10 17
  • Human Capital Formation
  • Rural development
Sub Total 22 45
Total 40 75
Project Work (Part 1): 10 Marks
Students would prepare only ONE project in the entire academic session, which is divided into 2 terms i.e.
Term I and Term II.

PART A : INTRODUCTORY MACROECONOMICS

UNIT 2 : MONEY AND BANKING  8 Periods
Money - meaning and supply of money - Currency held by the public and net demand deposits held by
commercial banks.
Money creation by the commercial banking system.
Central bank and its functions (example of the Reserve Bank of India): Bank of issue, Govt. Bank, Banker's
Bank, Control of Credit

(vi)
UNIT 4 : GOVERNMENT BUDGET AND THE ECONOMY  15 Periods
Government budget - meaning, objectives and components.
Classification of receipts - revenue receipts and capital receipts; classification of expenditure – revenue
expenditure and capital expenditure.

UNIT 5 : BALANCE OF PAYMENTS  7 Periods

Balance of payments account - meaning and components;
Foreign exchange rate - meaning of fixed and flexible rates and managed floating.

PART B : INDIAN ECONOMIC DEVELOPMENT

UNIT 6 : DEVELOPMENT EXPERIENCE (1947-90) AND ECONOMIC REFORMS SINCE 1991
 28 Periods
A brief introduction of the state of Indian economy on the eve of independence.
Indian economic system and common goals of Five Year Plans.
Main features, problems and policies of agriculture (institutional aspects and new agricultural strategy),
industry (IPR 1956; SSI – role & importance) and foreign trade.
Economic Reforms since 1991:
Features and appraisals of liberalisation, globalisation and privatisation (LPG policy);
Concepts of demonetization and GST

UNIT 7 : CURRENT CHALLENGES FACING INDIAN ECONOMY  17 Periods

Poverty: Absolute and relative; Main programmes for poverty alleviation: A critical assessment;

Human Capital Formation: How people become resource; Role of human capital in economic development;

Rural development: Key issues - credit and marketing - role of cooperatives; agricultural diversification

✽••••✽

(vii)
INTRODUCTORY
MACROECONOMICS Unit: Two

Money and Banking

COMPETENCY BASED
Competency Based Questions

a s
 Multiple Choice Questions (MCQs) (a) Store of value

iv D
(b) Unit of value
1. The rate at which Commercial Banks borrow

Sh
from Central Bank is called ________.
(a) Bank rate
(b) Legal reserve ratio
(c) Reverse repo rate
(d) Cash reserve ratio [Ans. (a)
2. The short term borrowing rate at which Reserve
Bank of India borrows money from Commercial
Banks is called ________.
(a) Bank rate 7. Which of the following is not included in
(b) Discount rate
(c) Repo rate (a) Currency held by public
(d) Reverse repo rate [Ans. (d)
3. What would be the total money creation in the
economy, If initial fresh deposits with banks =
`50,000 and LRR = 20%.
(a) `2,50,000 (b) `5,00,000
(c) `10,00,000 (d) `12,00,000 [Ans. (a)
4. ________ is the main source of money supply in
an economy.
(a) Central Bank
(b) Commercial Banks
(c) Government
(d) Both (a) and (b) [Ans. (d)
5. Measuring the value of goods and services
refers to which of the following functions of
money?
C–1
(c) Standard of deferred payments
(d) Medium of exchange [Ans. (b)
6. Which of the following functions of money
simplifies the process of borrowing and lending?
(a) Store of value
(b) Medium of exchange
(c) Standard of deferred payments
(d) Unit of value [Ans.(c)
money supply?
(b) Inter-bank-deposits
(c) Demand deposits in Banks
(d) Saving deposits with post office banks.
[Ans. (b)
8. Read the following dialogue between two
people.
Ramesh: I want 1 kg of potatoes.
Suresh: What will you give in exchange?
Ramesh: I can give you two litres of milk in
return for the potatoes.
Suresh: I don’t need milk. I want a pair of shoes.
Which of the following problem is being
faced by Ramesh and Suresh in their exchange
process?
 C–2 n Shiv Das Chapterwise Question Bank (Economics XII)

(a) Lack of double coincidence of wants  Assertion-Reason Questions

(b) Absence of common unit of value
(c) Lack of store of value DIRECTION: Read the following statements—
(d) Lack of standard of deferred payment Assertion (A) and Reason (R). Choose one of the correct
[Ans. (a) alternatives given below:
9. M1 of money supply does not include. (a) Assertion and Reason both are correct statements
and Reason is correct explanation for Assertion.
(a) Currency held by public
(b) Assertion and Reason both are correct statements
(b) Other deposits in RBI but Reason is not correct explanation for
(c) Demand deposits with the Commercial Assertion.
Banks (c) Assertion is true but Reason is false.
(d) Net time deposits with banks [Ans. (d) (d) Assertion is false but Reason is true.
10. Which Bank is authorised to issue currency? 1. Assertion: Supply of money is a flow variable.
(a) Central Bank Reason: It is measured at a point of time.
(b) Commercial Bank Ans. (d) Assertion is false but Reason is true.
Supply of money is a stock variable.
(c) Cooperative Bank 2. Assertion: Coins are limited legal tender money.
(d) Scheduled Bank [Ans. (a) Reason: Coins represent money which is accepted
Money and Banking

11. Which one of the following is a qualitative by the people to an unlimited extent.
measure of credit control by the Central Bank? Ans. (c) Assertion is true but Reason is false.
(a) Bank rate No person can be forced to accept beyond a certain limit.
3. Assertion: Demand deposits are also called bank
(b) Open market operations
money.
(c) Marginal requirements Reason: Demand deposits are created by

a s
(d) Cash reserve ratio [Ans. (c) commercial banks.

iv D
12. ________ refers to the proportion of total Ans. (a) Assertion and reason both are correct
deposits which Banks are required to keep in statements and reason is correct explanation for

Sh
the form of reserves with themselves. assertion.
(a) Cash deposit ratio 4. Assertion: LRR represents the minimum reserve
(b) Statutory liquidity ratio ratio essential to be maintained by banks.
Reason: Banks create deposits in the process of
(c) Bank rate
making loans to their customers.
(d) Reserve deposit ratio [Ans. (d) Ans. (b) Assertion and reason both are correct
13. Which one of the following is a quantitative statements but reason is not correct explanation
tool of credit control used by RBI? for assertion.
(a) Bank rate policy LRR is maintained to meet the cash requirements of the
depositors.
(b) Marginal requirements
5. Assertion: Open market operations are used to
(c) Moral suasion influence money supply in the economy.
(d) Direct action [Ans. (a) Reason: Central bank sells government securities
14. Which of the following is not the function of to increase the flow of credit in the economy.
the Central Bank? Ans. (c) Assertion is true but Reason is false.
(a) Banking facilities to government The Central Bank, through purchase and sale of government
securities, influences money supply in the economy as
(b) Lending to commercial banks
money is ultimately routed through banks.
(c) Banking facilities to public 6. Assertion: Bank rate is decreased when credit is
(d) Lending to government [Ans. (c) to be expanded.
15. The ratio of total deposits that a commercial Reason: Selective credit control involves
Banks has to keep with Reserve Bank of India specifying the amount and purpose for which
is called credit is to be given.
(a) Deposit ratio Ans. (b) Assertion and reason both are correct
statements but reason is not correct explanation
(b) Cash reserve ratio
for assertion.
(c) Legal reserve ratio A low bank rate reduces the cost of borrowing of commercial

(d) Statutory liquidity ratio [Ans. (b) banks and encourages them to use a greater proportion of
their funds for giving out loans.

7. Assertion: The Central Bank is also known as the
bank of issue.
Reason: The Central Bank enjoys the sole
monopoly of issuing currency to ensure control
over volume of currency and money supply.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
assertion.
8. Assertion: Demand deposits are created by
commercial banks.
Reason: Demand deposits form a significant part
of the total money supply in the economy.
Ans. (b) Assertion and reason both are correct
statements but reason is not correct explanation
for assertion.
Accepting deposits is an important function of commercial
banks.
9. Assertion: Only net demand deposits held by
commercial banks are taken as part of money
supply.
Reason: Only deposits of the public held by the
banks are included in money supply.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
s
a
assertion.
iv D
10. Assertion: Credit creation is inversely related to
the Legal Reserve Ratio.
Sh
Reason: LRR is fixed by the market forces of
demand and supply.
Ans. (c) Assertion is true but Reason is false.
Lower the money multiplier, lesser will be the total credit
creation by commercial banks.
 Case Based Questions
1. Read the para given below and answer the
questions that follow:
The Reserve Bank of India (RBI) on Friday kept
interest rates on hold while assuring to maintain
support for reflecting the economy by ensuring
ample liquidity to manage the government's
near-record borrowing.
The six-member Monetary Policy Committee
(MPC) voted to continue with the accommodative
stance as long as it is necessary to revive growth
and mitigate the impact of Covid-19 on the
economy while ensuring that inflation remains
within the target, Governor Shaktikanta Das said.
While the Union Budget 2021 laid down an
expansive fiscal strategy over the medium term
to strengthen the growth engine in the economy,
the RBI affirmed its support to such a plan
through appropriate monetary tools.
To absorb higher government borrowings, the
Central Bank provided retail investors a direct
option to invest in government securities.
Competency Based Questions (CBQs) n C–3
It also sapped some funds from banks by raising
the Cash Reserve Ratio (CRR) and using the
money for more targeted market operations.
The MPC, which cut borrowing costs by 115
basis points last year, kept the repurchase or repo
rate unchanged at 4 percent. Consequently, the
reverse repo rate will also continue to earn 3.35
per cent for banks for their deposits kept with the
RBI.
Das announced the restoration of CRR - the
amount of deposits lenders must set aside as
COMPETENCY BASED
reserves - to 3.5 per cent in March and 4 per cent
in May.
The cash returning to the central bank can be
used by it for open market operations and other
liquidity measures.
(i) The two essential conditions for a financial
institution to become a bank are:
(a) accepting deposits and lending
(b) printing currency notes
(c) both (a) and (b)
(d) neither (a) nor (b)
Ans. (a) accepting deposits and lending
(ii) Which of the following is not a quantitative
method of credit control?
(a) open market operation
(b) bank rate policy
(c) legal reserve requirements
(d) margin requirements
Ans. (d) margin requirements
(iii) The central bank does not performs the
following functions.
(a) conducts sale and purchase of securities for
foreign governments securities.
(b) acts as a lender of the last resort.
(c) controls money supply and credit.
(d) manages the nation’s reserves of international
currency.
Ans. (a) conducts sale and purchase of securities for
foreign governments securities.
(iv) Loans offered by commercial banks _______
(increase/decrease) the money supply in the
economy.
Ans. increase
2. Read the para given below and answer the
questions that follow:
The money supply is all the currency and other
liquid instruments in a country’s economy on
the date measured. The money supply roughly
includes both cash and deposits that can be used
almost as easily as cash.
Governments issue paper currency and coins
through some combination of their central
banks and treasuries. Bank regulators influence
 C–4 n Shiv Das Chapterwise Question Bank (Economics XII)
money supply available to the public through the
requirements placed on banks to hold reserves,
how to extend credit and other regulations.
Economists analyze the money supply and
develop policies revolving around it through
controlling interest rates and increasing or
decreasing the amount of money flowing in the
economy.
An increase in the supply of money typically
lowers interest rates, which in turn, generates
more investment and puts more money in
the hands of consumers, thereby stimulating
spending. Businesses respond by ordering more
raw materials and increasing production. The
increased business activity raises the demand
for labour. The opposite can occur if the money
supply falls or when its growth rate declines.
Money and Banking
(i) Which of the following statement is not true
regarding money supply?
(a) It is a stock variable. toward fixed capital in the country, fell
(b) It does not include money held by government
and the banking system.
(c) It includes term deposits with the banks.
s
(d) It includes currency held with the public.
a
Ans. (c) It includes term deposits with the banks.
iv D
(ii) From the set of statements given in Column I
Sh
and II, choose the correct pair of statements:
Column I Column II
1. Bank money A. exchange of money
for goods
2. Barter exchange B. a component of
money supply.
3. Demand deposits C. demand deposits
with banks created by
commercial banks
4. Legal tender D. money which can
be legally used to
make payment of
debts
(a) 1-A (b) 2-B
(c) 3-C (d) 4-D
Ans. (d) 4-D 2. Reverse Repo B. rate at which the RBI
(iii) Who regulates money supply in India?
(a) Government of India
(b) Reserve Bank of India
(c) Commercial banks
(d) Planning Commission
Ans. (b) Reserve Bank of India
(iv) Which of the following is not a function of The
Reserve Bank of India?
(a) It helps in barter exchange.
(b) It issues the currency of the country.
(c) It acts as a bank of the banking system.
(d) It is the custodian of the foreign exchange
reserves of the economy.
Ans. (a) It helps in barter exchange.
3. Read the para given below and answer the
questions that follow:
Heightened uncertainty in India caused by the
Coronavirus pandemic led to a surge in the
currency in circulation as people hoarded cash
or put money in accessible deposits to safeguard
themselves against salary cuts or job losses.
According to RBI data, India’s M3 money supply
rose 6.7% in the first five months of 2020 compared
with the same period in 2019, the highest growth
in seven years. Currency in circulation, which
measures money with the public and in banks
has also surged.
Gross capital formation, or total investments
significantly. Savings and current account
deposits fell 8% due to higher withdrawals. The
growth in currency notes held by the public was
much higher than the deposits made in banks.
A rise in money supply usually is seen as a
leading indicator of growth in consumption
and business investments, but the rise this time
was unlikely to bolster either, analysts said.
The increase was a reflection of higher cash
withdrawals by depositors to meet the needs
during the lockdown period, until normalcy
returns.
(i) _________ (quantitative/qualitative) instruments
of monetary policy affect the direction of credit
in the economy.
Ans. qualitative
(ii) Choose the correct pair of statements from the
given statements in Column I and II:
Column I Column II
1. LRR A. rate of interest at which
Central Bank lends to
commercial banks for
long term
Rate borrows money from
commercial banks
3. Bank Rate C. rate at which Central
Bank advances
short term loans to
commercial banks
4. Repo Rate D. minimum reserve
maintained by a
commercial bank

(a) 1-A (b) 2-B
(c) 3-C (d) 4-D
Ans. (b) 2-B
(iii) Which of the following statements is true?
(a) Money Multiplier is inversely related to LRR.
(b) Loans given by Commercial banks are equal
to the amount of deposits they receive.
(c) CRR is decreased to control inflation
(d) Demand deposits refer to the cash reserves of
Commercial Banks.
Ans. (a) Money Multiplier is inversely related to LRR.
(iv) The moral influence that the Central Bank
applies on member banks in order to get them
to act in line with its policy is called as________.
Ans. moral suasion (c) 5 (d) 4
4. Read the para given below and answer the
questions that follow:
The Reserve Bank of India is the Central Bank
of India, which means it is at the apex of the
banking structure of the economy. It is one of the
main governing bodies and regulatory bodies in
India and helps the government in its role as a
business facilitator.
s
The RBI was first established on the 1st of April
a
1935 and nationalized in 1949. The governing of
iv D
the RBI is done in accordance to the RBI Act by
Sh
the government. Its day to day affairs are taken
care of by the Board of Directors who are chosen
by the government.
The RBI is the only authorized body that can
issue currency in the country. So they print,
distribute and regulate the flow of currency in
the economy. The RBI provides the central and
state government with basic banking functions
and facilities like depositing money, remittances
etc. It can also make advances and provide loans
to the government whenever necessary. It also
supervises all other commercial banks in the
----------
Competency Based Questions (CBQs) n C–5
country and provides financial assistance to these
banks like short-term loans and advances. It is the
function of the RBI to maintain the value of the
rupee in the global economy. It does so by acting
as the custodian of foreign exchange reserves
in the country. It maintains enough reserves to
battle against fluctuations. The RBI also maintains
control of credit and money in the market. It uses
qualitative and quantitative methods to either
expand or contract the available credit in the
economy according to circumstances.
COMPETENCY BASED
(i) If the legal reserve ratio is 20%, the value of
money multiplier would be:
(a) 2 (b) 3
Ans. (c) 5
(ii) In order to encourage investment in the
economy, the central bank may:
(a) reduce cash reserve ratio.
(b) increase cash reserve ratio.
(c) sell government securities in open market.
(d) increase the bank rate.
Ans. (a) reduce cash reserve ratio.
(iii) The monetary policy generally targets to ensure:
(a) price stability in the economy.
(b) employment generation in the country.
(c) stable foreign relations.
(d) greater tax collections for the government.
Ans. (a) price stability in the economy.
(iv) Lowering the bank rate is a measure to:
(a) encourage foreign investment in the
economy.
(b) increase money supply in the economy.
(c) discourage investment activity in the
economy.
(d) increase government expenditure.
Ans. (b) increase money supply in the economy.
 INDIAN ECONOMIC
DEVELOPMENT
Indian Economy on
Indian Economy on the Eve of Independence
the Eve of Independence
Competency Based Questions
s
 Multiple Choice Questions (MCQs)
iv D a
1. One of the following statements about the
Sh
Indian economy is not true. Identify the
statement:
(a) Indian economy was flourishing before the
advent of British. (b) commercialisation of agriculture
(b) British developed the railway system in India
for their own benefit.
(c) India had a sound industrial base under the
British. any estimate about the national and per capita
(d) India’s foreign trade throughout the colonial
period was marked by a large export
surplus. [Ans. (c)
2. The British introduced the Railways in India in
the year _________.
(a) 1805 (b) 1855
(c) 1850 (d) 1860 [Ans. (c)
3. The second stage of demographic transition
began;
(a) after 1921 (b) before 1921
(c) from 1921 (d) none of the above
 [Ans. (a)
4. The public sector during the British rule,
remained confined to the following areas of
operation:
(a) railways
(b) power generation
C–16
Chapter: One
(c) both (a) and (b)
(d) none of the above [Ans. (c)
5. The stagnation in agriculture was caused mainly
due to:
(a) systems of land settlement
(c) zamindari system
(d) all of the above [Ans. (d)
6. Identify the economist who did not provide
income during the colonial period:
(a) Dadabhai Naoroji
(b) V.K.R.V. Rao
(c) Horace Secrist
(d) Findlay Shirras [Ans.(c)
7. Indian economy on the eve of Independence
displayed the following characteristics:
(a) colonial (b) stagnant
(c) backward (d) all of the above
[Ans. (d)
8. Which year was considered as the year of the
great divide?
(a) 1921 (b) 1947
(c) 1951 (d) 1931 [Ans. (a)
9. The export surplus during the British rule was
used to:
(a) import invisible items

(b) make payments for expenses incurred by an
office setup by the colonial government in
Britain.
(c) meet the expenses on War fought by the
British government
(d) all of the above [Ans.(d)
10. The first official census was conducted in the
year
(a) 1921 (b) 1951
(c) 1881 (d) 1851 [Ans. (c)
11. Occupational structure refers to:
(a) the total workforce of a country Reason: Though, a large proportion of the
(b) the distribution of working persons across
different industries and sectors
(c) population of a country Ans. (b) Assertion and reason both are correct
(d) None of the above [Ans. (b)
12. What was the nature of the Indian economy on
the eve of independence?
(a) Stagnant
(b) Backward
(c) Underdeveloped 3. Assertion: India’s foreign trade was restricted
(d) All of these [Ans. (d)
a s
13. In which of the following sectors is
iv D
manufacturing activity included?
(a) Primary (b) Tertiary
Sh
(c) Secondary (d) All of these [Ans. (c)
14. Which of the following was the major occupation
on the eve of independence?
(a) Industry
(b) Services
(c) Agriculture
(d) None of these  [Ans. (c)
15. What was the life expectancy at birth in India
on the eve of Independence?
(a) 44 years (b) 50 years
(c) 60 years (d) All of these [Ans. (a)
16. Where was the first iron and steel company
established?
(a) Kolkata (b) Jamshedpur
(c) Patna (d) Ranchi [Ans. (b)
 Assertion-Reason Questions
DIRECTION: Read the following statements—
Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
(a) Assertion and Reason both are correct statements
and Reason is correct explanation for Assertion.
(b) Assertion and Reason both are correct statements
but Reason is not correct explanation for
Assertion.
(c) Assertion is true but Reason is false.
(d) Assertion is false but Reason is true.
Competency Based Questions (CBQs) n C–17
1. Assertion: The policies of the colonial government
brought a fundamental change in the structure of
the Indian economy.
Reason: The economic policies pursued by the
colonial government favoured the promotion of
their economic interest.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
assertion.
2. Assertion: During the pre-British period, the land
settlement system was one of the main reasons
COMPETENCY
for stagnation in agriculture.
population was dependent on agriculture, the
country was not self-sufficient in food.
statements but reason is not correct explanation
for assertion.
Under this system, profits accruing out of the agricultural
sector went to the zamindars in the form of lagaan. The
zamindars and the colonial government did nothing to
improve the condition of agriculture.
only to Great Britain.
Reason: India became an exporter of primary
products like jute, Indigo etc.
Ans. (d) Assertion is false but Reason is true.
During the British rule, India became an exporter of primary
products and importer of finished goods.
4. Assertion: Lack of Capital Goods industry
hindered the industrialisation in India.
Reason: This was done to ensure that India was
not dependent on any country for the supply of
Capital goods and heavy equipment.
Ans. (c) Assertion is true but Reason is false.
During the British rule, there were hardly any Capital goods
BASED
industries to promote further Industrialisation in India.
This was done to ensure that India remained dependent for
their Capital goods requirements.
5. Assertion: During the British rule, there was a
huge export surplus due to excess exports.
Reason: The British government maintained
monopoly control over India's foreign trade and
used this export surplus for India's development.
Ans. (c) Assertion is true but Reason is false.
Huge amounts of goods were being exported to Britain each year
resulting in an export surplus (excess of exports over imports)
but it did not result in any flow of gold or silver into India.
6. Assertion: The public sector remained confined
to some departmental undertakings like railways,
communications etc.
Reason: The restricted growth of the public
sector was a drawback for the industrial sector.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
assertion.
 C–18 n Shiv Das Chapterwise Question Bank (Economics XII)
7. Assertion: Development of railways enhanced
commercialization of agriculture.
Reason: The British government developed
infrastructure in India to serve their own colonial
interests.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
Indian Economy on the Eve of Independence
assertion.
8. Assertion: On the eve of Independence, both
birth rate and death rate were very high.
Reason: Life Expectancy was also high at 68
years compared to the present 44 years
Ans. (c) Assertion is true but Reason is false.
This was because India was then in a state of backwardness.
On the eve of independence, both birth rate and death rate
 Case Based Questions
both were very high at 48 and 40 per thousand persons
respectively.
9. Assertion: The discriminatory tariff policy
followed by the British led to the decline of
Indian handicrafts.
Reason: The composition of exports and imports
of the Indian economy made it backward and
stagnant.
Ans. (b) Assertion and reason both are correct
s
a
statements but reason is not correct explanation
iv D
for assertion.
Under this discriminatory policy, export of raw materials
Sh
from India and imports of finished goods to India were made
tariff free while heavy duties were imposed on the export of
Indian handicrafts.
10. Assertion: Indian economy, under the British
Colonial rule, remained fundamentally agrarian.
Reason: Commercialization of agriculture, land
settlement system and partition of the country
adversely affected Indian agriculture.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
assertion.
11. Assertion: The large import surplus generated
during the colonial period came at a huge cost to
the Indian economy.
Reason: This created scarcity of essential
commodities in the domestic market and did
not result in any flow of gold and silver into our
country.
Ans. (d) Assertion is false but Reason is true.
There was export surplus (excess of exports over imports)
throughout the colonial period for which there was no
corresponding return of money.
12. Assertion: During the British rule, in agriculture,
low productivity resulted in low production.
Reason: Owners of the soil were different from
the tillers of the soil who had no incentive to
increase land productivity.
Ans. (a) Assertion and reason both are correct
statements and reason is correct explanation for
assertion.
13. Assertion: GDP and per capita income of the
country were very low during the British rule
Reason: Progress in social infrastructure and
not economic infrastructure contributed greatly
towards it.
Ans. (c) Assertion is true but Reason is false.
During the British rule, the Indian economy was stagnant
which is evident from the fact that the growth rate of output
was less than 2% and of per capita income about 0.5% per
annum.
1. Read the para given below and answer the
questions that follow:
Even as the country’s world famous handicraft
Industries declined, no corresponding modern
industrial base was allowed to come up to
take the place of pride so long enjoyed by the
former. The primary motive of the colonial
government behind this policy of systematic
deindustrialisation was to reduce India to the
status of a mere exporter of important raw
materials for the upcoming modern industries in
Britain and to turn India into a sprawling market
for the finished products of Britain’s modern
industries so that their continued expansion
could be ensured to the maximum advantage of
their home country.
In the unfolding economic scenario, the decline
of the indigenous handicraft Industries created
not only massive unemployment in India but also
a new demand in the Indian consumer market
which was profitably met by the increasing
imports of cheap manufactured goods from
Britain.
India was forced to open its large markets to
British goods which could be sold in India
without any tariff or duties compared to local
Indian producers who were heavily taxed. In
Britain, protectionist policies such as bans and
high tariffs or duties were implemented to restrict
Indian goods, specially textiles, from being sold
there, whereas raw cotton was imported from
India without tariffs to Britain factories which
manufactured textiles. British economic policies
gave them a monopoly over India's vast markets
and raw materials such as cotton.
(i) The decline of the handicraft industry was
caused due to:
(a) Discriminatory policies
(b) Low demand

(c) Indian imports (iii) Match the following:
(d) Export surplus
Ans. (a) Discriminatory policies
(ii) TISCO was established in ________.
(a) 1809 (b) 1907
(c) 1908 (d) 1806
Ans. (b) 1907
(iii) An industry that produces machines for
production of goods meant for consumption is
called ________ goods industry.
(a) Capital (b) Consumer
(c) Final (d) None of these
Ans. (a) Capital
(iv) Which industry suffered a setback due to the
partition of the country in 1947?
(a) handicraft (b) jute
(c) cotton (d) both (b) and (c)
Ans. (d) both (b) and (c) Independence was ________ per thousand in
2. Read the para given below and answer the
questions that follow:
The details of the demographic condition
regarding the population of British India were
primarily obtained through a Census in 1881.
s
Though suffering from several conditions, it
a
unveiled the unevenness in the growth of Indian
iv D
population. Consequently, in every ten years,
Sh
such census procedures were conducted. Prior to
1921, India was in the initial step of demographic
transition. The second step of transition started
after 1921.
At the time of independence, neither the total
population nor its growth rate was very high.
Despite this, the social development indicators
were not very promising.
The overall literacy level was less than 16% out
of which the female literacy level was negligible
at about 7%. Life expectancy was quite low at
about 44 years as compared to the present 69
years. There was a lack of public health facilities
which led to widespread water and air borne
diseases.
(i) _________ refers to an average number of years
that a person can expect to live.
(a) infant mortality rate
(b) life expectancy
(c) death rate
(d) birth rate
Ans. (b) life expectancy
(ii) The purpose of the British rule in India was to:
(a) develop the Indian economy
(b) develop the world economy
(c) promote British interest
(d) accelerate the process of industrialization in
India
Ans. (c) promote British interest
Competency Based Questions (CBQs) n C–19
Column I Column II
1. Female literacy rate A. Less than 2%
2. Year of the great divide B. 1850
3. Introduction of Railways C. About 7%
in India
4. India's annual growth D. 1921
rate during British
period
COMPETENCY
(a) 1-C, 2-D, 3-B, 4-A
(b) 1-B, 2-A, 3-D, 4-C
(c) 1-C, 2-D, 3-A, 4-B
(d) 1-A, 2-D, 3-B, 4-A
Ans. (a) 1-C, 2-D, 3-B, 4-A
(iv) The infant mortality rate at the time of
contrast to the present infant mortality rate of
___­_____ per thousand
(a) 218, 60 (b) 381, 63
(c) 218, 63 (d) 381, 60
Ans. (c) 218, 63
3. Read the para given below and answer the
questions that follow:
India’s economy under the British Colonial
rule remained fundamentally agrarian. About
85% of the country’s population lived mostly in
villages and derived their livelihood directly or
indirectly from agriculture. However, despite
being the occupation of such a large population,
the agricultural sector continued to experience
stagnation and deterioration. This stagnation
was mainly due to the various systems of land
settlement, particularly the zamindari system.
BASED
Under this system, the profit accruing out of the
agricultural sector went to the zamindars instead
of the cultivators who did nothing to improve
the condition of agriculture. To a large extent,
the terms of the revenue settlement were also
responsible for the zamindars adopting this
attitude. Other factors responsible for the low
levels of agricultural productivity were low
levels of technology, lack of irrigation facilities
and negligible use of fertilisers. Despite some
progress made in irrigation, India's agriculture
was starved of investment in terracing, flood
control, drainage and desalinisation of soil.
(i) Commercialisation of agriculture resulted in
shifting of agricultural production from _____
crops to ______ crops.
(a) food, cash (b) Wheat, Rice
(c) Both (a) & (b) (d) Neither (a) nor (b)
Ans. (a) food, cash
 C–20 n Shiv Das Chapterwise Question Bank (Economics XII)

(ii) The main reason for stagnation in agriculture
was:
(a) Commercialisation of agriculture.
(b) decline of handicraft Industries.
(c) discriminatory trade policies.
(d) land settlement system.
Ans. (d) land settlement system.
Indian Economy on the Eve of Independence
the factories of Britain. More than half of India's
foreign trade was restricted to Britain while the
rest was allowed with a few other countries. The
opening of the Suez Canal further intensified
British control over India's foreign trade. The
most important characteristic of India's foreign
trade throughout the colonial period was the

(iii) Match the following choosing the correct generation of a large export surplus which came
reason: at a huge cost to the country's economy.
(i) Which of the following is not a feature of
Column I Column II India's foreign trade during the British rule:
1. Low level of A. Fertile and (a) The export surplus generated was used for
agricultural productive land India’s benefit.
production on went to Pakistan (b) India was an exporter of primary products.
the eve of during partition. (c) Imports of Britain’s manufactured goods
independence were duty-free.
B. Low contribution (d) India imported consumer goods like cotton,
of industrial sector silk etc.
Ans. (a) The export surplus generated was used for
to GDP.
India’s benefit.
2. Poor state of C. Exploitative British
(ii) The Suez Canal was opened for transport in:
industrial sector policies.
(a) 1850 (b) 1853
during the
(c) 1869 (d) 1901
British rule. Ans. (c) 1869

a s
D. Commercialisation

D
(iii) Choose the correct pair of statement:
of agriculture.

i v
Column I Column II

h
(a) 1-B, 2-C (b) 1-C, 2-D

S
(c) 1-A, 2-C (d) 1-D, 2-B 1. India became an A. Capital goods like
Ans. (c) 1-A, 2-C exporter of machinery.
(iv) Identify the statement which is not true in the 2. Opening of the B. Primary products
context of the agricultural sector of India during Suez Canal such as cotton, jute,
the British rule: wool etc.
(a) commercialisation of agriculture helped 3. India started C. reduced transporta-
farmers economically. importing tion cost between
(b) agricultural sector was stagnant. India and Britain.
(c) farmers use old and outdated techniques of 4. India's foreign D. It also traded with
production. trade was mainly China, Ceylon and
(d) because of the terms of revenue settlement, with Britain Persia.
we are also responsible for the backward
state of agriculture. (a) 1-A (b) 2-B
Ans. (a) commercialisation of agriculture helped (c) 3-C (d) 4-A
Ans. (d) 4-A
farmers economically.
4. Read the para given below and answer the (iv) The large export surplus generated throughout
questions that follow: the colonial period was also used to pay for the
India has been an important trading nation ________ of ________ items.
since ancient times. But the restrictive policies of (a) Import, visible (b) Import, invisible
commodity production, trade and tariff pursued (c) Export, visible (d) Export, invisible
Ans. (b) Import, invisible.
by the colonial government adversely affected
the structure, composition and volume of India's 5. Read the para given below and answer the
foreign trade. Consequently, India became an questions that follow:
exporter of primary products such as raw silk, Under the colonial regime, basic infrastructure
cotton, wool, sugar etc. and an importer of such as railways, ports, water transport, posts
finished consumer goods like cotton, silk and and telegraphs did develop. However, the real
capital goods like light machinery produced in motive behind this development was not to

provide basic amenities to the people but to
sub serve various colonial interests. The roads
that were built primarily served the purposes of
mobilising the army within India and drawing
out raw materials from the countryside to the
nearest railway station or to the port, to send this
to England or other lucrative foreign destinations.
Introduction of the railways was considered as
the most important contribution by the British.
The railways affected the structure of the Indian
economy in more than one way. It enabled people
to undertake long-distance travel and thereby
break geographical and cultural barriers. It also
fostered commercialisation of Indian agriculture
which adversely affected the self sufficiency of
the village economies in India. The volume of
India’s exports undoubtedly expanded but its
benefits rarely accrued to the Indian people. The
social benefits, which the Indian people gained
owing to the introduction of the railways, were
thus outweighed by the country's huge economic
loss.
(i) Following is not a positive contribution made
s
by the colonial government:
a
(a) Telegraph and postal services
iv D
(b) Introduction of railways
Sh
----------
Competency Based Questions (CBQs) n C–21
(c) development of industries
(d) construction of roads
Ans. (c) development of industries
(ii) India benefited from the development of
Railways in the following ways:
(a) expansion of foreign trade
(b) helped in the process of industrialisation
(c) helped the people to travel from one place to
another
(d) both (b) and (c)
Ans. (d) both (b) and (c)
COMPETENCY
(iii) Arrange the following events of India before
independence in a chronological order:
I. opening of the Suez Canal
II. second stage of demographic transition
III. introduction of Railways
IV. first census of British India
(a) I. II. III, IV (b) II, I, IV, III
(c) III, I, IV, II (d) I, III, IV, II
Ans. (c) III, I, IV, II
(iv) During the colonial period the ________ sector
accounted for the largest share of the workforce.
(a) Industrial (b) Service
(c) agricultural (d) Agricultural
Ans. (c) agricultural
BASED
 OMR Based
Sample Question Paper

Time Allowed : 90 minutes Maximum Marks : 40

GENERAL INSTRUCTIONS:
(i) This Question paper contains two parts— Section A: Introductory Macroeconomics (18 marks)
Section B: Indian Economic Development (22 marks).
There are 40 questions in the question paper. All questions are compulsory.
(ii) Questions no. 1 to 3 and 19 to 23 are Multiple Choice Questions (MCQs).
(iii) Questions no. 4 to 6 and 24 to 28 are Assertion-Reason type Questions.
(iv) Questions no. 7 to 18 and 29 to 40 are Case Study Based MCQs.
(v) The Answer sheet is inside this Test Booklet. When you are directed to open the Test Booklet, take out
the Answer Sheet and fill in the particulars on SIDE-2 carefully with Blue/Black ball point pen only. In no
case pencil is to be used. Read “General Instructions for Candidates” on SIDE-1 carefully.

s
(vi) The candidate should ensure that the Answer Sheet is not folded. Do not make any stray marks on the Answer Sheet.

iv D a
Do not write your Roll Number anywhere else except in the specified space in the Test Booklet/Answer Sheet.

Sh
SECTION-A (Introductory Macroeconomics)
1. The balance of trade shows a deficit of `500 crores, the value of exports is `1000 crores. What is the
value of imports?
(a) `1,500 crore (b) `500 crore (c) `5,000 crore (d) `1,000 crore
2. Which of the following is not included in money supply?
(a) Currency held by public (b) Inter-bank-deposits
(c) Demand deposits in Banks (d) Saving deposits with post office banks.
3. Fiscal deficit – ________ = Primary deficit. (Fill up the blank with a correct alternative)
(a) Subsidies (b) Dividends (c) Interest payments (d) Revenue deficit
Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
(a) Assertion and Reason both are correct statements and Reason is correct explanation for Assertion.
(b) Assertion and Reason both are correct statements but Reason is not correct explanation for Assertion.
(c) Assertion is true but Reason is false.
(d) Assertion is false but Reason is true.
4. Assertion (A): Demand deposits are also called bank money.
Reason (R): Demand deposits are created by commercial banks.
5. Assertion (A): The trade account is also called the merchandise account.
Reason (R): The balance of exports and imports of visible and invisible items is called balance of trade.
6. Assertion (A): Capital expenditure creates assets for the government.
Reason (R): Repayment of loans is an example of capital expenditure.
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 7 to 10):
The Reserve Bank of India (RBI) on Friday kept interest rates on hold while assuring to maintain
support for reflecting the economy by ensuring ample liquidity to manage the government’s near-
record borrowing.
OMR–1
 OMR–2 n Shiv Das Chapterwise Question Bank (Economics XII)

The six-member Monetary Policy Committee (MPC) voted to continue with the accommodative stance
as long as it is necessary to revive growth and mitigate the impact of Covid-19 on the economy while
ensuring that inflation remains within the target, Governor Shaktikanta Das said.
While the Union Budget 2021 laid down an expansive fiscal strategy over the medium term to strengthen the
growth engine in the economy, the RBI affirmed its support to such a plan through appropriate monetary tools.
To absorb higher government borrowings, the Central Bank provided retail investors a direct option
to invest in government securities. It also sapped some funds from banks by raising the Cash Reserve
Ratio (CRR) and using the money for more targeted market operations.
The MPC, which cut borrowing costs by 115 basis points last year, kept the repurchase or repo rate
unchanged at 4 percent. Consequently, the reverse repo rate will also continue to earn 3.35 per cent for
banks for their deposits kept with the RBI.
Das announced the restoration of CRR - the amount of deposits lenders must set aside as reserves - to
3.5 per cent in March and 4 per cent in May.
The cash returning to the central bank can be used by it for open market operations and other liquidity
measures.
7. The two essential conditions for a financial institution to become a bank are:
(a) accepting deposits and lending (b) printing currency notes
(c) both (a) and (b) (d) neither (a) nor (b)
8. Which of the following is not a quantitative method of credit control?
(a) open market operation (b) bank rate policy
(c) legal reserve requirements (d) margin requirements
9. The central bank does not performs the following functions.
(a) conducts sale and purchase of securities for foreign governments securities.

a s
(b) acts as a lender of the last resort.

iv D
(c) controls money supply and credit.

Sh
(d) manages the nation’s reserves of international currency.
10. Loans offered by commercial banks _______ the money supply in the economy.
(a) Decrease (b) Increase (c) No change (d) None of these
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 11 to 14):
The Union Budget, which is presented by the Finance Minister of India, comprises Capital Budget and
Revenue Budget. The Capital Budget is further categorised into capital receipts and capital expenditure.
Capital receipts are receipts that create liabilities or reduce financial assets. They also refer to incoming
cash flows. Capital receipts can be both non-debt and debt receipts. Loans from the general public,
foreign governments and the Reserve Bank of India (RBI) form a crucial part of capital receipts.
Capital receipts are loans taken by the government from the public, borrowings from foreign countries
and institutes, and borrowings from the RBI. Recovery of loans given by the Centre to states and others
is also included in capital receipts. In the balance sheet, capital receipts are mentioned in the liabilities
section. The capital receipt has a nature of non-recurrence.
All capital receipts are tax-free, unless there is a proviso to tax it. Capital receipts can be both non-debt
and debt receipts.
Non-debt receipts are those which do not incur any future repayment burden for the government.
Almost 75 per cent of the total budget receipts are non-debt receipts like recovery of loans and advances,
disinvestment, issue of bonus shares, etc.
Debt Receipts have to be repaid by the government. Around 25 per cent of government expenditure
is financed through borrowing. A reduction in debt receipt (or borrowing) can be a big leap for the
economy's financial health. Most of the capital receipts of the government are debt receipts like Market
loans, issuance of special securities to public-sector banks, external debt, etc.
11.
Following is not a characteristic of capital receipts:
(a) they are irregular and non recurring.
(b) they create a future obligation to return the amount.
(c) they decrease government’s liabilities.
(d) they lead to reduction in assets of the government.
 OMR Based Sample Question Paper n OMR–3

12. Following is not an implication of fiscal deficit:

(a) a vicious circle of borrowings is created.
(b) leads to deflationary pressure.
(c) increases foreign dependence.
(d) creates economic burden for future generations.
13. Revenue expenditure refers to the expenditure which neither ________ assets nor _______ liabilities.
(a) Creates, reduces (b) reduces, creates
(c) Creates, increases (d) increases, creates
14. Which of the following statements is true?
(a) loans from IMF is a revenue receipt.
(b) higher revenue deficit necessarily leads to higher fiscal deficit.
(c) borrowings by government represent a situation of fiscal deficit.
(d) revenue deficit is the excess of capital receipts over the revenue receipts
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 15 to 18):
India posted its first current account surplus of 1.7% of GDP in April-December 2020 quarter after nine
years. The last time we witnessed a surplus was in 2007. Many analysts and trade pundits welcome
this development as it can give a much-needed shot in the arm to investor confidence in the country as
well as the Indian currency.
A current account surplus has a direct positive impact on the rupee. The current account reflects all
payments between countries for goods, services, dividends and interests. A surplus in the current
account means that the country is expected to receive payment in rupees. This means other countries are

s
likely to buy rupee and sell foreign currencies. This means the rupee could appreciate in the near future.

a
While a current account surplus is welcome, it is important to understand how the surplus has been

iv D
achieved. A current account surplus occurs partly due to an increase in exports. This leads to a stronger

Sh
economy and an increase in consumer spending.
On the other hand, it could also be a result of weak domestic demand. This could result in lower
consumer spending and decrease in imports. Meaning, exports did not rise, but imports fell. Hence,
analysts in some quarters feel that a surplus indicates a weak economic growth in the country.
Some analysts feel that a current account surplus is not a cause for celebration as it reflects weak
investment demand in the country. This directly impacts the pickup of imports from the country. In the
last four months itself, imports fell by 16.33% due to lower gold and oil imports. This reflects poorly on
the investment opportunities in the country.
15. _______ Account transactions bring about a change in the current level of a country’s income.
(a) Capital (b) Current (c) Fixed (d) None of these
16. Identify the incorrect statement from the following:
(a) capital account is a stock concept
(b) capital transactions bring about a change in the capital stock of a country.
(c) capital account includes portfolio investments
(d) capital account surplus arises when debit items are more than credit items.
17. International transactions which take place due to some economic motive are called________ :
(a) accommodating transactions. (b) autonomous transactions.
(c) both (a) and (b) (d) neither (a) nor (b)
18. Match the following:

Column I Column II
1. Accommodating transactions A. inflows of foreign exchange
2. Balance of trade B. one way transaction.
3. Unrequited transactions C. difference between exports and imports of goods.
4. Credit side D. transactions done to cover the deficit or surplus in BOP

(a) A, B, C, D (b) A, C, B, D
(c) D, B, C, A (d) D, C, B, A
 OMR–4 n Shiv Das Chapterwise Question Bank (Economics XII)

SECTION-B (Indian Economic Development)

19. Indian economy on the eve of Independence displayed the following characteristics:
(a) colonial (b) stagnant
(c) backward (d) all of the above
20. Identify the program which was launched to promote self employment in rural areas and is now
known as Deendayal Upadhyay Yojana- National Rural Livelihoods Mission.
(a) Swarnajayanti Gram Swarozgar Yojana (b) Sampoorna Grameen Rozgar Yojana
(c) Swarnajayanti Shakti Rozgar Yojana (d) Sampoorna Gram Swarozgar Yojana
21. The second stage of demographic transition began;
(a) after 1921 (b) before 1921
(c) from 1921 (d) none of the above
22. Which of the following is not a merit of human capital formation?
(a) Improves technical knowledge (b) Enlarges the size of business
(c) Increases cost of production (d) Changes social outlooks
23. More than _______ of the world’s poor live in India.
(a) half (b) one-third (c) one-fourth (d) one-fifth
Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given
below:
(a) Assertion and Reason both are correct statements and Reason is correct explanation for Assertion.
(b) Assertion and Reason both are correct statements but Reason is not correct explanation for Assertion.
(c) Assertion is true but Reason is false.

s
(d) Assertion is false but Reason is true.

iv D a
24. Assertion (A): On-the-job-training is a source of human capital formation.
Reason (R): Workers may be sent off-campus for training.

Sh
25. Assertion (A): Under the New Economic Policy, quantitative restrictions on imports and exports were
greatly reduced.
Reason (R): The inward looking trade strategy, followed before 1991, increased the efficiency and
competitiveness of domestic industries.
Assertion (A): During the pre-British period, the land settlement system was one of the main reasons
26.
for stagnation in agriculture.
Reason (R): Though, a large proportion of the population was dependent on agriculture, the country
was not self-sufficient in food.
27. Assertion (A): The Government plays an important role in education and health service markets.
Reason (R): Government has acquired monopoly power in the education and health service markets.
28. Assertion (A): Unemployment and underemployment are majorly responsible for poverty in India.
Reason (R): The poor are unable to acquire quality education and skills.
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 29 to 32):
The Green Revolution changed India’s status from a food deficient country to one of the world’s leading
agricultural nations. Until 1967, the government largely concentrated on expanding the farming areas.
But the population was growing at a much faster rate than food production. This required immediate
and drastic action to increase the yield which came in the form of the Green Revolution.
The three basic elements in the method of the Green Revolution were-continuing expansion of farming
areas, double cropping in the existing farm land and using seeds with improve genetics. Green
Revolution was a technology package consisting of improved High Yielding Varieties of two staple
serials (rice and wheat), irrigation or controlled water supply and fertilizers and pesticides. The Green
Revolution has enabled the government to procure sufficient amounts of food grains to build a stock
which could be used in times of food shortage.
 OMR Based Sample Question Paper n OMR–5

While the nation had immensely benefited from the Green Revolution, the technology involved was not
free from risks. One such risk was the possibility that it would increase the disparities between small
and big farmers since only the big farmers could afford the required inputs, thereby reaping most of
the benefits of the Green Revolution. India has also failed to extend the concept of High Yield Variety
seeds to all crops or regions and has largely remained confined to food grains only.
29. Identify the correct statement from the following:
(a) The second phase of Green revolution was also called as the wheat revolution.
(b) Green revolution helped in removing the inequalities in rural poverty.
(c) Green revolution helped in removing the dependence on monsoons for irrigation.
(d) Government fixed the minimum support price to ensure fair returns to the farmers
30. In _____________, production is meant for self consumption.
(a) Subsistence farming (b) Vertical farming (c) Dry farming (d) None of these
31. Identify the correct sequence of alternatives given in Column II by matching them with respective
terms in Column I.
Column I Column II
1. Land Ceiling A. Increase in production of food grains using High Yielding
Variety seeds.
2. Land Reforms B. Portion of Agricultural produce sold in the market.
3. Green Revolution C. Fixing the maximum limit of land holding for an individual.
4. Marketed Surplus D. Change in the ownership of land (land to tillers)
(a) D, B, A, C (b) A, C, D, B (c) D, B, C, A (d) C, D, A, B

a s
32. Which of the following is not a land reform measure?

iv D
(a) Abolition of intermediaries. (b) Tenancy reforms.

Sh
(c) Fixation of minimum support prices for crops. (d) Ceiling on land holdings.
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 33 to 36):
Liberalisation has tremendously expanded the scope of the private industry in India. Prior to
liberalisation, 17 of the most important industries were exclusively reserved for the public sector. Later
many of the industries were liberalised. Industries in the private sector faced several regulations like
Industrial Licensing, clearance from MRTP Act and Foreign Exchange restrictions etc. which would
hinder private investments.
With the liberalisation policy, these restrictions were removed, offering large scope for the expansion
of the private sector. The liberalisation policy of the Government has strengthened the performance of
Indian industries by becoming more competitive. Contrary to the fear expressed by several people that
liberalisation would result in foreign competition and strangling down of Indian industries, several
Indian industries have substantially increased their sales and also profits.
The increase in competition is reflected in the increase in marketing costs and fall in profitability, but
total profits have increased, due to higher sales. Another indication of increasing competitive strength
of Indian companies is the rise in their export intensity, i.e., the ratio of exports to total sales. The
growth impulse provided by the liberalisation has increased competition in the domestic market and
also larger business opportunities in foreign markets.
33. _____________ one of the taxes eliminated after implementation of goods and services tax.
(a) VAT (b) Custom duty
(c) Sales tax (d) None of these
34. Trade between more than two countries is known as:
(a) bilateral trade (b) multilateral trade
(c) foreign trade (d) both (a) and (b)
35. Identify the correct sequence of alternatives given in Column II by matching them with respective
terms in Column I.
 OMR–6 n Shiv Das Chapterwise Question Bank (Economics XII)

Column I Column II
1. Establishment of general agreement on trade and tariff A. 2017
2. Establishment of World Trade Organisation B. 2016
3. Implementation of GST C. 1948
4. Demonetisation by Indian government D. 1995

(a) B, A, D, C (b) C, A, D, B (c) D, A, B, C (d) C, D, A, B
36. Which of the following is not a tax reform?
(a) simplification of the tax procedures. (b) devaluation of rupee.
(c) removal of export duties. (d) both B and C
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 37 to 40):
Due to the economic downturn caused by Covid-19 pandemic, India’s GDP contracted by 23.9 %. in
the first quarter. However, a silver lining in this degrowth scenario can be noted as agriculture grew by
3.4%. Despite green shoots, agriculture in India has been ailing for a long time. It has been grappling
with issues like fast depleting groundwater, soil degradation, fragmented markets, barely functioning
agricultural extension services and speeding up of climate change.
It is due to these factors that agriculture cannot overturn contraction in other sectors, but along with
the non-farm rural sector, it could jump-start the economy. Apart from this, Non-Farm rural activities
(livestock, fisheries and food processing, etc.) are advantageous in lifting the poor above the poverty
line. Therefore, it becomes imperative to identify the issues of the non-farm rural sector in India to
focus on building strong growth links between the non-farm rural economy and agriculture.

a s
The non-farm sector, particularly in rural areas, is being accorded wide recognition in recent years. A

iv D
planned strategy of rural non-farm development may prevent many rural people from migrating to
urban industrial and commercial centres. Non-farm rural industries are generally less capital-intensive

Sh
and more labour absorbing. Thus, they can play a critical role in employment growth in rural areas.
Efforts are needed to identify appropriate and effective institutional vehicles for the development of
non-farm sector policy and interventions for creating employment opportunities.
37. Identify the incorrect statement regarding self help groups from the given statements:
(a) SHGs focus on rural poor, small and marginal farmers etc.
(b) it is a micro credit program.
(c) they provide long term credit.

(d) they promote thrift in small proportions by a minimum contribution from each member.
38. Cooperatives have received a setback during the recent past due to:
(a) inefficient financial management.
(b) lack of appropriate link between marketing and processing cooperatives.
(c) fluctuating farm production.

(d) both (a) and (b)

39. Horticulture provides remunerative employment options in the following areas:
(a) flower harvesting (b) hybrid seed production
(c) nursery maintenance (d) all of the above
40. From the given statements in Column I and Column II, identify the correct pair of statements:

Column I Column II
1. Organic Farming A. rise in the production of fruits and vegetables
2. Diversification B. eco friendly system of agriculture
3. White Revolution C. pooling and then marketing of milk through cooperatives
4. Golden revolution D. shifting of workforce from agriculture to other allied activities
(a) 1-A (b) 2-B (c) 3-C (d) 4-D
----------
 OMR Based Sample Question Paper n OMR–7

mÙkj if=kdk / ANSWER SHEET i`"B&1 / SIDE-1

uhps fn, x, fjDr LFkkuksa dks osQoy i`"B&2 ij mÙkj vafdr djus osQ fy;s vuqns'k
uhys@dkys ckWy IokbaV isu ls Hkjsa INSTRUCTIONS FOR MARKING ON SIDE-2
FILL IN THE FOLLOWING ENTRIES
WITH BLUE/BLACK BALL POINT
PEN ONLY 1. mi;qDr xksys dks xgjs fu'kku ls Hkjus osQ fy, osQoy uhys@dkys
ckWy IokbaV isu dk iz;ksx djsaA
iathdj.k la[;k / Registration No. Use Only Blue/Black Ball Point Pen to Darken the
appropriate Circle.
        /             /         2. Ñi;k iwjs xksys dks xgjs fu'kku ls Hkfj,A
Please darken the complete circle.
vH;FkhZ dk uke (cM+s v{kjksa esa)
Candidate’s Name (IN CAPITAL LETTERS) 3. izR;sd iz'u dk mÙkj osQoy ,d gh xksys esa xgjk fu'kku
yxkdj nhft, tSlk uhps fn[kk;k x;k gS %

Darken ONLY ONE CIRCLE for each Question as shown
below:
firk dk uke (cM+s v{kjksa esa) xyr xyr xyr xyr lgh
Father’s Name (IN CAPITAL LETTERS) Wrong Wrong Wrong Wrong Correct
2 3 ✘  2  3   ✘  2  3  ✔   2  3  4 1   2  3  
     
4. fdlh mÙkj osQ fy, ,d ckj xksys esa fu'kku yxkus osQ i'pkr~
dksbZ ifjorZu vuqekU; ugha gSA
fo|ky; dksM / School Code No change in the Answer once marked is allowed.
5. izR;sd iz'u dk mÙkj] mÙkj if=kdk esa ml iz'u osQ laxr Øekad
osQ lkeus fn, x, mi;qDr xksys esa fu'kku yxkdj nhft,A
Mark your answer only in the appropriate space in the

s
fo|ky; dk uke (pyrs gkFk ls fy[ksa) Answer sheet against the number corresponding to the

a
School Name (in running hand)

iv D
question.
6. mÙkj if=kdk ij vU; dgha dksbZ fu'kku u yxk,aA

Sh
Please do not make any stray marks on the Answer Sheet.
7. bl mÙkj if=kdk ij dPpk dke djuk euk gSA
Rough work must not be done on the Answer Sheet.
8. mÙkj if=kdk ij lisQn @ la'kks/u rjy dk iz;ksx u djsaA
Do not use white/correction fluid on the Answer Sheet.

mnkgj.kµi`"B&2 dks Hkjus dh fof/ (osQoy uhys@dkys ckWy IokbaV isu ls Hkfj,)
EXAMPLES—HOW TO FILL AND MARK ON SIDE-2 (WITH BLUE/BLACK BALL POINT PEN ONLY)
vxj vkidk iathdj.k la[;k vxj vkiosQ fo|ky; vxj vkidh iz'u vxj vkidh vxj iz'u uaú 08
A252/73552/7356 gS dk dksM 11266 gS iqfLrdk la[;k 1353646 gS p;fur Hkk"kk osQ fy, vkidk
If your Registration No. is If your School If your Test Booklet fgUnh gS mÙkj (2) gS
A252/73552/7356 Code is 11266 No. 1353646 If language If your Response
fo|ky; dksM iz'u iqfLrdk la[;k attempted is to Question No.
iathdj.k la[;k @ Registration No. School Code Test Booklet No. Hindi 08 is (2)
p;fur Hkk"kk
A 2 5 2 / 7 3 5 5 2 / 7 3 5 6 1 1 2 6 6 1 3 5 3 6 4 6 Language
attempted
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
B 1 2 1 2 2 2 2 1 2 2 2 2
2 2 2 2 2 2 2 2 2 2 2
C 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
D 4 4 4 4 4 4 4 4 4 4 4
4 4 4 4 4
4 4 4 4 4 4
G 5 5 5 5 5 5 5
5 5 5 5 5 5 5 5 5 5 5 5
Q.No. Response
M 6 6 6 6 6 6 6 6 6 6 6 6 6
6 6 6 6 6 Hindi
English 08 1 3 4
P 7 7 7 7 7 7 7 7 7
7 7 7 7 7 7 7 7 7 7 7 7
R 8 8 8 8 8 8 8 8 8 8 8
8 8 8 8 8 8 8 8 8 8 8 8
9 9 9 9 9 9 9 9 9 9 9
9 9 9 9 9 9 9 9 9 9 9 9
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0

vH;FkhZ bl ckr dk è;ku j[ksa fd iz'u iqfLrdk esa Nik gqvk dksM mÙkj iqfLrdk osQ Nis gq, dksM osQ leku gksuk pkfg,A blesa dksbZ folaxfr
gksus ij vH;FkhZ iz'u iqfLrdk vkSj mÙkj iqfLrdk dks cnyokus osQ fy, rqjar fujh{kd dks lwfpr djsaA
The candidate should check carefully that the Test Booklet Code printed on Side-2 of the Answer Sheet is the same as printed on
Test Booklet. In case of discrepancy, the candidate should immediately report the matter to the invigilator for replacement of both
the Test Booklet and the Answer Sheet.
OMR–8 n Shiv Das Chapterwise Question Bank (Economics XII)

i`"B&2 / SIDE-2 osQoy uhys@dkys ckWy IokbaV isu dk iz;ksx djsa /  mÙkj if=kdk la[;k/
USE BLUE/BLACK BALL POINT PEN ONLY Answer Sheet No.

p;fur Hkk"kk iz'u iqfLrdk dksM

Test Booklet Code
fo|ky; dksM iz'u iqfLrdk la[;k Language
iathdj.k la[;k @ Registration No. School Code Test Booklet No. attempted

/ / A1

A 1 1 1 1 1 1 1 1 1 1 1 1
1 1 1 1 1 1 1 1 1 1 1 1

B 2 2 2 2 2 2 2 2 2 2 2 2
2 2 2 2 2 2 2 2 2 2 2 2
C 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

D 4 4 4 4 4 4 4 4 4 4 4
4 4 4 4 4 4 4 4 4 4 4 4 Hindi
G 5 5 5 5 5 5 5 5 5 5 5
5 5 5 5 5 5 5 5 5 5 5 5

M 6 6 6 6 6 6 6 6 6 6 6
6 6 6 6 6 6 6 6 6 6 6 6 English

P 7 7 7 7 7 7 7 7 7 7 7
7 7 7 7 7 7 7 7 7 7 7 7

R 8 8 8 8 8 8 8 8 8 8 8
8 8 8 8 8 8 8 8 8 8 8 8
9 9 9 9 9 9 9 9 9 9 9
9 9 9 9 9 9 9 9 9 9 9 9
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0

Q.No. Response Q.No. Response

a b c d 21 a b c d
01
a b c d 22 a b c d
02
a b c d 23 a b c d
03
a b c d 24 a b c d
04

a s
a b c d 25 a b c d
05

D
a b c d 26 a b c d

v
06

h i
a b c d 27 a b c d
07

S
a b c d 28 a b c d
08
a b c d 29 a b c d
09
a b c d 30 a b c d
10
a b c d 31 a b c d
11
a b c d 32 a b c d
12
a b c d 33 a b c d
13
a b c d 34 a b c d
14
a b c d 35 a b c d
15
a b c d 36 a b c d
16
a b c d 37 a b c d
17
a b c d 38 a b c d
18
a b c d 39 a b c d
19
a b c d 40 a b c d
20

mÙkj if=kdk fujh{kd dks lkSaius ls igys vH;FkhZ ;g tk¡p dj ysa fd iathdj.k la[;k] fo|ky; dksM] iz'u iqfLrdk la[;k vkSj
p;fur Hkk"kk lgh <ax ls Hkj fn;s x, gSa vkSj fpfUgr dj fn;s x, gSaA
Before handling over the Answer Sheet to the invigilator, the candidate should check that Registration No., School Code,
Test Booklet No. & Language Attempted have been filled in and marked correctly.

vH;FkhZ dk uke
Candidate’s Name

vH;FkhZ osQ gLrk{kj (pyrs gkFk ls fy[ksa)

Candidate’s Signature (in running hand) fujh{kd osQ gLrk{kj@Invigilator’s Signature

----------