MATA JAI KAUR PUBLIC SCHOOL

Ashok Vihar, New Delhi

Session: 2021 - 22
PRE BOARD EXAMINATION - CLASS 12
Time: 90 minutes SUBJECT - ECONOMICS Maximum Marks: 40

GENERAL INSTRUCTIONS:
1. There are a total 60 questions in this paper out of which 50 questions are to be
attempted.
2. This paper is divided into three Sections:
a. Section A – Contains 24 questions. Attempt any 20 questions.
b. Section B – Contains 24 questions. Attempt any 20 questions.
c. Section C – Contains 12 questions. Attempt any 10 questions.
3. All questions carry equal marks.
4. There is no negative marking.

Q.NO. QUESTIONS

SECTION A
(20 questions out of 24 questions are to be attempted)
1 Identify the correct formula to calculate Fiscal Deficit. (Choose the correct alternative)
(a) Total expenditure - Total Receipt (other than borrowings)
(b) Revenue Expenditure - Revenue Receipt
(c) Capital Expenditure - Capital Receipt
(d) Revenue Expenditure + Capital expenditure - Revenue Receipt.

2 Suppose that the Balance of Trade (BOT) of a nation, exhibits a surplus of 30,000 crores. The
import of merchandise of the nation is half of the exports of merchandise to the rest of the world.
(Fill up the blank with correct alternative)
The value of exports would be________ crores?
(a) 30,000
(b) 60,000
(c) 24,000
(d) 35,000
3 Identify which of the following is not a function of the Reserve Bank of India? (Choose the correct
alternative)
(a) To act as the banker to the Government of India.
(b) To act as the custodian of the gold reserve of India.
(c) To act as the financial advisor to the Government of India.
(d) To issue coins and one rupee note.
4 The value of US dollar $ 1 has gone down from Rs. 74 to Rs. 73. It means that : (Choose the correct
alternative)
(a) Indian rupee has depreciated.
(b) Indian rupee has appreciated.
(c) US dollar has depreciated.
(d) Both (b) and (c).
5 Read the following statements carefully and choose the correct alternative from the following :
Statement 1- Demonetisation was aimed to curb the entry of unaccounted foreign exchange in the
economy.
Statement 2- The demand deposits with the commercial banks fell immediately after the
demonetisation.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.

6 Ms. Sushma, a homemaker, wishes to deposit her savings in the bank so that she can earn some
interest on the amount. She also wants the money to be available when she needs that in the
form of cash or to be payable through cheque. If you are an employee of a commercial bank then,
from the following options, choose the type of account that you would recommend her to open ?
(a) Savings Account
(b) Current Account
(c) Term Deposit Account
(d) None of the above

7 If you are the head of an expert committee which has to suggest some solutions for improving the
trade balance. Then which of the following steps would you recommend if the government has to
decide the exchange rate ?
(Choose the correct alternative)
(a) Depreciation of domestic currency.
(b) Appreciation of domestic currency.
(c) Devaluation of domestic currency.
(d) Revaluation of domestic currency.
8 Read the following statements carefully and choose the correct alternative from the following:
Statement 1- Borrowings by government represents a situation of fiscal deficit.
Statement 2-- Government budget shows planned- receipts and payments of the government for
upcoming fiscal year.
Alternatives :
(a)Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
9 Which of the following is/are recorded on credit side of capital account?
(i) Export of machinery.
(ii) Grant from IMF.
(iii) Lending to foreign countries.
(iv) Profit from foreign branch of domestic companies.
Identify the correct alternatives from the following:
Alternatives:
(a) (i) and (ii)
(b) (ii) only
(c) (iii) and (iv)
(d)None of the above
10 Total deposits created by commercial banks is Rs. 2,400 crores and LRR is 25%. The amount of
initial deposits is________ (Fill up the blank with correct alternative)
(a) Rs. 1200 crore
(b) Rs. 1000 crore
(c) Rs. 600 crore
(d) Rs. 800 crore

11 Industrial Policy Resolution (IPR) 1956 provide extensive role to _______ sector. (Fill up the blank
with correct alternative)
(a) Public sector
(c) Both public and private sector
(b) Private sector
(d) External sector
12 Which of the following is not an achievement of economic planning ? (Choose the correct
alternative)
(a) Economic growth
(c) Population explosion
(b) Social justice
(d) Technological transformation
13 _________is a strategy to save foreign exchange by encouraging domestic producers to produce
goods which are imported. (Fill up the blank with correct alternative)
(a) Import Promotion
(c) Export Substitution
(b) Export Promotion
(d) Import Substitution

14 Read the following statements carefully and choose the correct alternatives given below:
Statement 1- Under Public Distribution System, fair price shops have been set up in villages and
backward areas lo sell all types of commodities.
Statement 2-Under Pradhan Mantri Jan-Dhan Yojana, people in India are encouraged to open bank
accounts.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
15 Read the following statements carefully and choose the correct alternatives given below:
Statement 1-- GATT was established in 1923 with 48 member countries.
Statement 2-GATT was replaced by World Trade Organisation in the year 1995.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 Is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.

16 Who was the ex-officio Chairman of the Planning Commission ? (Choose the correct alternative)
(a) President of India
(b) Vice President of India
(c) Prime Minister of India
(d) Speaker of Lok Sabha
17 From the following given sets of statements in Column I and II.
(Choose the correct pair of statements)

Column I Column II

(A) Current Account Surplus (i) Receipts < Payments

(B) Current Account Surplus (ii) Receipts > Payments

(C) Unbalanced Current Account = (iii)Receipts = Payments

(D)Current Account Deficit (iv)Receipts < Payments

Alternatives :
(a) (A)-(i)
(b) (B)-(ii)
(c) (C)- (ii)
(d) (D) - (iv)
18 _______ means comprehensive and continuous process to improve socio-economic aspects of
people of rural areas. (Fill up the blank with correct alternative)
(a) Economic development
(b) Rural development
(c) Human development
(d)Infrastructure development
19 Which of the following is capital expenditure ? (Choose the correct alternative)
(a) Grants given to state governments
(c) Payment of pension
(b) Payment of subsidies
(d) Purchase of shares
20 Which of the following is a long-term approach to eradicate poverty? (Choose the correct
alternative)
(a) Cheaper housing
(b) GDP growth
(c) Subsidised food
(d) Free education
21 Total credit creation by commercial banks is Rs 40,000 crores. CRR and SLR are 8% and 12%
respectively. The initial deposit in this case was _______. (Fill up the blank with correct
alternative)
(a) Rs 8,000 crores
(b) Rs 2,00,000 crores
(c) Rs 10,000 crores
(d) None of the above
22 'Investment in human capital contributes positively to economic growth.' Which of the following
does not support the above statement? (Choose the correct alternative)
(a) Investment in human capital leads to innovations.
(b)Investment in human capital enhances productivity.
(c) Investment in human capital helps in adopting new technology.
(d)Investment in human capital creates unnecessary financial burden.
23 Read the following statements carefully and choose the correct alternatives given below :
Statement 1-- The second phase of Green Revolution started in mid 1970s.
Statement2-- The benefits of Green Revolution were restricted mainly to crops like wheat and
nice.
Alternatives :
(a) Both the statements are true.
(b)Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
24 The Small Scale Industries (SSIs) are characterised by: (Choose the correct alternative)
(a) Labour intensive technology.
(b) Locational flexibility.
(c) Low capital requirements.
(d) All of the above.
SECTION B
(20 questions out of 24 questions are to be attempted)
25 Read the following statements -- Assertion (A) and Reason (R) :
Assertion (A) - Domestic currency appreciates when there is a rise in foreign exchange rate.
Reason (R) - A rise in the export raises the level of aggregate demand which raises the level of
national income.
From the given alternatives choose the correct one :
Alternatives :
(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.
26 Money has the highest liquidity among all financial assets because . (Fill up the blank with correct
alternative)
(a) It does not have wide acceptability.
(b) It is a common medium of exchange.
(c) It can be kept in bank accounts.
(d) It is issued by government.
27 Read the following statements -- Assertion (A) and Reason (R) :
Assertion (A) - During the first few decades after independence, the private sector was kept under
state control through a system of licenses.
 Reason (R) - The mixed economy model adopted by India aimed to promote equitable
development in the country.
From the given alternatives choose the correct one :

Alternatives :
(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.
28 'Information technology plays a very significant role in achieving sustainable development and
food security.' Which of the following statement contradicts this statement ? (Choose the correct
alternative)
(a} Information technology can be used to reduce dietary requirements of people.
(b) Information technology can be used by the farmers for receiving up to date information
regarding prices, weather and soil conditions.
(c) Information technology can be used by the government to predict areas of food insecurity.
(d) Information technology can be used by the government to identify areas of food surplus.
29 Read the following statements - Assertion (A) and Reason (R) :
Assertion (A) -- Migration slows down the process of human capital formation in the domestic
economy.
Reason (R) -- Rising population slows down the process of human capital formation as it reduces
the per head availability of education, housing, food etc.
From the given alternatives choose the correct one :
Alternatives :
(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.
30 From the set of statements given in Column I (Name of the Scheme) and Column II (Objective
of Poverty Alleviation Program), choose the correct pair of statements :
Column I Column II
(Name of the Scheme) (Objective of Poverty Alleviation Program)
(A) Crop Diversification (i) Livestock raising and selective breeding.
(B) Golden Revolution (ii) A shift from single cropping system to
multiple cropping system.
(C) Agriculture Marketing (iii) A process that involves functions of
assembling, storage, packaging etc.
(D) Animal Husbandry (iv) Production of honey and horticulture.
Alternatives:
(a} (A) -(ii), (B) - (i), (C)- (iv), (D) - (ii)
(b) (A) - (i), (B} - (ii), (C) - (iii), (D)- (iv)
(c) (A) - (ii), (B) - (iv), (C)- (iii), (D)-(i)
(d) (A) - (i}, (B) - (iii), (C) - (iv), (D) - (ii)
31 Table showing sectoral contribution to GDP (%) :

On the basis of the given table, the _______sector and_______ sector contributed most to the
GDP in the year 1951 and 1991 respectively. (Fill up the blanks with correct alternative)
(a) Agriculture, Agriculture
(b)Services, Agriculture
(c) Agriculture, Services
(d) Services, Industry
32 The given picture shows the (Fill up the blank with correct alternative)

(a) The concept of liberalisation.

(c) The concept of privatisation.
(b) The concept of disinvestment.
(d) The concept of outsourcing.
33 Read the following statements -- Assertion (A) and Reason (R):
Assertion (A) - Quota and tariffs were the two instruments used by India to discourage imports.
Reason (R) – In the first seven Five Year Plans, India followed an inward-looking trade strategy to
substitute imports with domestic production.

From the given alternatives choose the correct one :

Alternatives:
(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.

34 Read the following statements carefully and choose the correct alternatives given below:
Statement 1- Minimum Support Price is fixed by the government to safeguard its own interests.
Statement 2- Maharashtra is held as a success story in the implementation of milk cooperation.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 false.

35 Read the following statements carefully and choose the correct alternatives given below :
Statement 1- RBI acts as the banker to the central government and commercial banks acts as
banker to the state governments.
Statement 2 -- Money held by government does not come into actual circulation in the country.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
36 Who was the first to discuss the concept of poverty line?
(a) Dadabhai Naoroji
(b) Mahatma Gandhi
(c) Jawaharlal Nehru
(d) None of these
37 Read the following statements - Assertion (A) and Reason (R), choose one of the correct
alternatives given below :
Assertion (A) - Deficit in BoP refers to a situation when receipts of the country arising out of capital
account are less than the corresponding payments to the rest of the world during the period of an
accounting year.
Reason (R) - Overall BoP deficit or surplus can be adjusted through official reserve transactions.
Alternatives :
(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.
38 Credit creation depends on amount of initial deposits and ________.
(a) Bank rate
(b) Legal reserve ratio
(c) Margin requirement
(d) All of these
39 Read the following statements carefully and choose the correct alternatives given below:
Statement 1 : Expenditure on health care services like hospitals, medicines and medical education
is a source of human capital formation.
Statement 2 : Human capital formation means a process of adding to the stock of human capital
over a long period of time.
Alternatives :
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false..
40 Read the following statements -- Assertion (A) and Reason (R), choose one of the correct
alternatives given below :
Assertion (A): Farmers require credit to meet expenditure on seeds, fertilisers and other
implements making them borrow money from various sources.
Reason (R): There is long gestation period involved between crop sowing and realisation of
income.
Alternatives:
(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.
41 Read the following statements - Assertion (A) and Reason (R), choose one of the correct
alternatives given below:
Assertion (A) : In India, the supply of money is regulated by the Reserve Bank of India (RBI) which
acts as the monetary authority of the country.
Reason (R) : After the recent demonetisation in India, households and firms have begun to shift
from electronic payment technologies to cash payment.
Alternatives :
(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.
42 Read the following statements - Assertion (A) and Reason (R).
Assertion (A): Relative poverty refers to poverty across different classes, or countries.
Reason(R): In India the concept of poverty line is used as a measure of absolute poverty.
From the given alternatives choose the correct one :
Alternatives :
(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.
43 An expert committee has recommended to the government that it should invest in human capital
formation to overcome poverty and achieve rapid growth.
Which of the following is not a source of human capital formation?
(Choose the correct alternative)
(a) Migration
(c) Health facilities and services
(b) On-the-job training
(d) Tourism
44 _________is a rate in which the central bank allows the exchange rate to be determined by
market forces but intervenes at times to influence the rate. (Fill up the blank with correct
alternative)
(a) Fixed exchange rate
(b) Managed floating exchange rate
(c) Flexible exchange rate
(d) None of the above
45 Read the following statements carefully and choose the correct alternatives given below :
Statement 1 - The purpose of MGNREGA is to enhance livelihood security in rural areas by
providing at least 100 days of wage employment.
Statement 2 - Relative poverty exists in every country because income is unequally distributed in
almost all the countries.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
46 Read the following statements - Assertion (A) and Reason (R), choose one of the correct
alternatives given below :
Assertion (A) : Portfolio investments are recorded in the capital account of balance of payments.
Reason (R) : Portfolio investments cause a change in the assets of the country.
Alternatives :
(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.
47 Identify the correct statement from the following: (Choose the correct alternative)

(a) During the British rule, more than 50% of India's foreign trade was confined to USA.
(b) Industrial sector was the main source of livelihood for most of the people during the British
rule.
(c) During colonial period, India's demographic profile showed low birth rate and high death rate.
(d) Indian handicraft industry enjoyed worldwide reputation before the British rule.

48 Which organisation regulates the health sector in India ? (Choose the correct alternative)
(a) WTO
(c) IMF
(b) ICMR
(d) NSSO
 SECTION C
(10 questions out of 12 questions are to be attempted)
Q. No. 49-54 are to be answered on the basis of the following data:
Growth of GDP and Major Sectors (in%)

The GDP growth rate of which sector has never been below the total GDP growth rate? (Choose
49 the correct alternative)
(a) Agriculture
(b) Industry
(c) Services
(d) Can't be determined
50 Read the following statements carefully and choose the correct alternatives given below:
Statement 1- Agriculture sector appears to be adversely affected by the reform process.
Statement 2- As a result of export oriented policy, there has been a shift from the production of
food grains to the cash crops.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
51 Read the following statements - Assertion (A) and Reason (R):
Assertion (A) - Self-reliance continued to be a part of industrial policy under economic reforms.
Reason (R) New Economic Policy (NEP) aims to remove all types of controls. Producers are free to
decide their scale and level of production.
From the given alternatives choose the correct one :
(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.
52 In the light of the given data and common knowledge, identify the incorrect statement: (Choose
the correct alternative)
(a) Economic reforms have not been able to benefit the agriculture sector because investment in
agriculture has been reduced.
(b) No sector has ever achieved a double digit GDP growth.
(c) Economic reforms have resulted in high level of growth in services sector.
(d) The contribution of industrial sector to growth of GDP has been fluctuating.
53 Read the following statements carefully and choose the correct alternatives given below:
Statement 1- Economic reforms have been biased towards industries and ignored agriculture.
Statement 2- Hundreds of small-scale units throughout the country have been forced to close
down in the face of growing competition from MNCs.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is false.

54 Read the following statements -- Assertion (A) and Reason (R) :

Assertion (A) -- The rate of growth of India's GDP used to be about 4% in pre-reforms period.
Reason (R) -- Economic reforms have resulted in the increase in efficiency of particularly the in
industrial and services sector.
From the given alternatives choose the correct one :
(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.
Q. No. 55-60 are to be answered on the basis of the following text:
In a federal country like ours, the constitution of India demarcates the governance structure
through a three-tier system - the Union government, State governments, and Local governments.
In the scheme of distribution of power among them, the central or Union government enjoys the
highest position. Under the Constitution of India, the central government is constitutionally bound
to lay down the 'annual financial report' of the country. This report is commonly known as the
Union Budget of India. The Union Budget holds the same character as the budgets of other levels
of government, except in the source of revenue and expenditure. The Union Budget comprises the
most extensive account of the Indian government, and it can be considered the statement of the
government's income and expenditure presented in Parliament every year.
55 Greater fiscal deficit implies___________. (Choose the correct alternative)
(a) greater borrowings by the government
(b) fiscal indiscipline in the economy
(c) fiscal responsibility
(d) Both (a) and (b).
56 The period from 1st April of a year to 31st March of subsequent year for which budget is
presented is called (Fill up the blank with correct alternative)
(a) Fiscal year
(b) Calendar year
(c) Academic year
(d) Budget year
57 Which type of expenditure is made in bridge construction?
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Both (a) and (b)
(d) None of the above
58 Which of the following are sources of capital receipts for government?
(Choose the correct alternatives)
(i) Recovery of loans.
(ii) Corporation tax.
(iii) Dividends on investments made by government.
(iv) Sale of a public sector undertaking.
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (ii) and (iv)
(d) (i) and (iv)
59 Read the following statements carefully and choose the correct alternative given below:
Statement 1- Capital receipts are the receipts of recurring nature.
Statement 2- Revenue receipts do not create liabilities or cause reduction in the assets.
Alternatives :
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
60 ___________ is zero when net interest payments equal the borrowings.
(Fill up the blank with correct alternative)
(a) Fiscal deficit
(b) Primary deficit
(c) Revenue deficit
(d) Budget deficit