AMITY INTERNATIONAL SCHOOL, MAYUR VIHAR

PRACTICE PAPER TERM I EXAM

CLASS XII ECONOMICS

Time: 90 minutes 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 Kudumbashree , a small saving bank for poor women , was started in
(a) 1985 in Maharashtra
(b) 1991 in Karnataka
(c) 1993 in Tamil Nādu
(d) 1998 in Kerala
2 “Detailed guidelines have been issued by RBI on safe Deposits Locker facility offered by the Banks.
Including prohibition of linking allotment of lockers to placement of fixed deposits. Which of the
following functions of the central bank is highlighted in the case above?
(a) Supervisor
(b) Lender of last resort
(c) Clearing House
(d) Custodian of cash reserves
3 Balance of payment “surplus" arise
(Choose the correct alternative)
(a)When total inflows of foreign exchange is greater than total outflows of foreign exchange on
account of autonomous transactions with rest of the world.
(b)When total inflows of foreign exchange is less than total outflows of foreign exchange on
account of autonomous transactions with rest of the world
(c) When total inflows of foreign exchange is greater than total outflows of foreign exchange on
account of all transactions with rest of the world.
(d) When total inflows of foreign exchange is greater than total outflows of foreign exchange on
account of accommodating transactions with rest of the world.
4 Exchange rate between Indian Rupee and US Dollar has changed from 71.49 (November 2020) to
72.82 (January 2021) through changes in market forces of demand and supply. Therefore, it is
believed that India’s balance of payments this year is going to be ‘very very strong’, Commerce
Minister Piyush Goel said on Monday. The concept identified in the above case is applicable in
______________system of exchange rate.
(a) Fixed Exchange Rate
(b) Floating Exchange Rate
(c) Managed Floating Exchange Rate
(d) Managed Fixed Exchange Rate
5 Read the following statements carefully. Choose one of the correct alternatives given below:
Statement 1: Demonetisation increased demand deposit with banks.
Statement 2: The objective of demonetization was to prevent terrorism financing
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
Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – The value of final deposits created is determined only by the reserve ratio prevailing
in the monetary system.
Statement 2 – The process of credit creation directly relates to the value of reserve ratio.
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

7 Unilateral transfers are a part of:

a) Capital Account
b) Current Account
c) Balance of Trade Account
d) Both b and c

8 Identify which of the following statements is false: (Choose the correct alternative)
a) The government can finance its budgetary deficit through borrowings, disinvestment and deficit
financing
b) Fiscal deficit equals borrowings
c) Recovery of loans is a revenue receipt
d) Interest on loans is a non-tax revenue receipt

9 If inflation is higher in country A than in country B, and the exchange rate between the two
countries is fixed, what is likely to happen to the trade balance between the two countries?
(Choose the correct alternative)
a. Trade balance of country A will show a deficit whereas trade balance of country B will show a
surplus.
b. Trade balance of country A will show a surplus whereas trade balance of country B will show a
deficit.
c. Balance of trade of both the countries will be in balance.
d. None of the above.
10 If money multiplier is 4, then the percentage of LRR would be?

(Choose the correct alternative)

a) 0.25
b) 0.025
c) 2.5
d) 25

11 Read the following statements carefully. Choose one of the correct alternatives given below:
Statement 1: In 1955, the Village and Small -Scale Industries Committee, also called the Karve
Committee, noted the possibility of using small-scale industries for promoting rural
development.
 Statement 2: A small scale industry is defined with reference to the maximum investment
allowed on the assets of a unit.
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

12 More than half of India’s foreign trade was restricted to………………

(Choose the correct alternative)
a) China
b) Sri Lanka
c) Iran
d) Britain

13 Agrarian reforms included……..

(Choose the correct alternative)

(a) Technical reforms in agriculture

(b) Land reforms in agriculture
(c) Policy of subsidies to farmers
(d) All of the above

14 Read the following statements carefully. Choose one of the correct alternatives given below:
Statement 1 – The government uses Monthly Per Capita Income to categorise people into poor
and non-poor.
Statement 2 – The government uses Monthly Per Capita Income to categorise people into chronic
and transient poor.
Alternatives:
a. Both the Statements are true
b. Both the Statements are false
c. Statement 1 is true but Statement 2 is false.
d. Statement 1 is false but statement 2 is true

15 Read the following statements carefully. Choose one of the correct alternatives given below:
Statement 1 World Health Organisation replaced General Agreement on Trade and Tariff (GATT).
Statement 2: World Trade organisation was founded in 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 ------------------------------- refers to fixing the specified units of land which could be owned by an
individual.
(Fill up the blank with correct alternative)
a) Consolidation of land holdings.
b) Land ceiling
c) Cooperative farming.
d) Tariffs.

17 From the set of statements given in Column I and Column II, choose the correct pair of
statements:
 Column I Column II
A. Supply curve of foreign exchange (i) Downward sloping curve

B. Repayment of international loans (ii) A source of supply of foreign exchange

C. Exports from India to US (iii) Demand for foreign exchange from

India

D. Revaluation of domestic currency (iv) Central bank plays an important role

a) A(i)
b) B(ii)
c) C(iii)
d) D(iv)

18 TANWA (Tamil Nadu Women in Agriculture) is________ project initiated in Tamil Nadu.
(Fill in the blank with correct alternative)
a) Wage employment
b) Micro-Credit
c) Fishing community
d) Cooperative
19 Read the following statements: Assertion (A) and Reason (R).
Choose one of the correct alternatives given below:
Assertion (A): The impact and incidence of indirect tax lie on different persons.
Reason (R): Indirect taxes are levied on goods and services.
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 and Reason (R) is the not the correct explanation of
assertion.
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.

20 Task Force on Projections of Minimum Needs and Effective Consumption Demand’ was formed
in____________:
(Fill in the blank with correct alternative)
(a) 1979
(b) 1989
(c) 2005
(d) 1990
21 Decrease in CRR by RBI is likely to ____________ the demand for goods and services in the
economy:
(Choose the correct alternative)
a) Increase
b) Decrease
c) Unchanged
d) Stabilize
22 Commercialisation of agriculture helped in……………………….
(Fill in the blank with correct alternative)

a) Indian farmers supplement their incomes to become prosperous

 b) Increasing the production of food crops
c) Increasing the production of cash crops
d) In setting up of modern Indian industries.
23 Policy followed in the first seven five year plans of India, aimed at substituting imports with
domestic production.
(Fill up the blank with correct answer)
a. Inward looking trade
b. Outward looking trade
c. Import substitution
d. Both A and C
24 The main reason for decline of Handicraft Industry was……….
(Choose the correct alternative)
(a) Heavy tariff on export of raw materials from India
(b) Heavy duty on Indian handicrafts products
(c) Heavy tariff on import of finished goods from Britain
(d) All of these

Section B
(20 questions out of 24 questions are to be attempted)
25 Read the following statements of Assertion and Reason and choose the correct alternative:
Assertion (A): If there is a Trade deficit, then Current account cannot have a surplus.
Reason (R): Current account records trade of visible, invisibles and unilateral transfers.
Alternatives:
a) Both Assertion and Reason are correct statement and Reason is the correct explanation of
the Assertion.
b) Both Assertion and Reason are correct statement but Reason is not the correct
explanation of the Assertion.
c) Assertion is correct statement and Reason is incorrect statement.
d) Assertion is incorrect statement and Reason is correct statement.

26 Read the following statements - Assertion (A) and Reason (R).

Choose one of the correct alternatives given below:
Assertion (A): Central bank of a country has the exclusive right (monopoly right) of issuing
currency notes except one rupee note/coin.
Reason (R): Central bank’s aim is to ensure uniformity in circulation of currency.
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 and Reason (R) is the not 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

27 Read the following statements- Assertion (A) and Reason (R).

Choose one of the correct alternatives given below:
Assertion (A): The British introduced the railways in India in 1850 and it is considered as one of
their most important contributions.
Reason (R): Along with the development of roads and railways, the colonial dispensation also took
measures for developing water and air transport.
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 and 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 Cooperative Market have received a setback recently due to:
(i) Inefficient financial management
(ii) Fair Prices to farmers
(iii) Inadequate coverage of farmer members
(iv) Lack of appropriate link between marketing and process cooperatives.
(Choose the correct alternative)
a) (i) and (ii)
b) (iii) and (iv)
c) (ii),(iii) and (iv)
d) (i),(iii) and (iv)

29 Read the following statements - Assertion (A) and Reason (R).

Choose one of the correct alternatives given below:
Assertion (A) – Firms insist that worker should work for a specified of time after their on-the job-
training.
Reason(R) – Expenditure on- the-job training is a source of human capital formation as return on
such expenditure in form of enhanced labour productivity is equal to the cost of it.
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 and 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 Identify the correct sequence of alternatives given in Column II by matching them with respective
terms in Column
COLUMN I COLUMN II
A. Swarnjayanti Gram SwarozgarYojna i)100 days of wage employment
B. Food for work Programme ii)Self employment programme
C. Mahatma Gandhi National Rural iii) Self employment and Wage
Employment Guarantee Act employment programme
D.SwarnjayantiShahriRozgarYojna iv)Self Help Groups
Choose the correct option
a) i, iii, ii, iv
b) iv, iii, i, ii
c) iv, iii, ii, i
d) ii, iv, i, iii

31
 On the basis of above time series graph showing poverty trends in India between 1973 and 2000,
Identify which of the following statements are correct:
(i) Absolute Number of poor has declined in rural areas
(ii) The Head Count or Poverty ratio declined in urban areas
(iii) Absolute Number of poor has declined in urban areas
(iv) The Head Count or Poverty ratio has increased in rural areas.
a) (i) and (ii)
b) (ii)and (iii)
c) (iii) and (iv)
d) (i) and (iv)
32

On the basis of above mentioned information answer the following question:

The Real per Capita Income of India (as per given data) has increased by
___________(approximately) between 1991 and 2016-17.
(fill in the blank with Correct Alternative)
a)493%
b)593 %
c)393 %
d)693%
33 Read the following statements- Assertion (A) and Reason (R).
Choose one of the correct alternatives given below:
Assertion(A): In the era 1950-1990, rules and regulation which aimed at regulating economic
activities became major hindrance in growth and development of economy.
Reason(R): Removal of such barriers in form of rules and regulation is called liberalisation.
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 and 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. Choose one of the correct alternatives given below:
Statement 1 – The need for diversification arises in rural economy because agriculture as majority
of rural people work on land and there is greater risk in depending only on agriculture.
Statement 2 – The institutional structure of rural banking consist of set of multi-agency institutions
Reserve Bank of India and all branches of commercial banks.

Alternatives:
a)Both the Statements are true
b)Both the Statements are false
c) Statement 1 is true but Statement 2 is false.
d) Statement 1 is false but statement 2 is true

35
Match and arrange column II in correct sequence according to Column I:
Column I Column II
a) Minimum Reserve System
i) Lender of Last Resort
b) Assists banks by discounting of approved
securities and bills of exchange ii) Agent to Government
c) Gives Loans and Advances to Government iii) Issue of Currency
d) Managing Public Debt iv) Banker to Government

a.iii), ii), iv), i)

b. iii), i), ii), iv)
c.iii), iv), ii), i)
d. iii), i), iv), ii)
36
From the following statements given in Column I and Column II, choose the correct pair of
statements:
Column I Column II
A. First Official Census 1. 75%
B. Year of Great Divide 2. 25%
C. Share of workforce in manufacturing 3. 1921
and service sectors
D. Share of workforce in agricultural 4. 1881
sectors
A B C D
a. 3 4 2 1
b. 4 1 2 3
c. 4 3 2 1
d. 1 2 3 4
37
Read the following statements of Assertion and Reason and choose the correct alternative:
Assertion (A): Due to rise in demand for foreign exchange rupee is depreciating.
Reason (R): Government devalues its own currency sometimes.
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 and 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 Read the following statements - Assertion (A) and Reason (R).

Choose one of the correct alternatives given below:
Assertion (A): The reserve bank of India had, in March 2020, offered a three months moratorium
on loans enabling borrowers to defer repayment on EMI and other loans.
Reason (R): The loan moratorium was aimed at providing borrowers relief amid the economic
impact of the covid-19 pandemic.
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 and Reason (R) is the not 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

39 Read the following statements - Assertion (A) and Reason (R).

Choose one of the correct alternatives given below:
Assertion (A) – The aim of rural periodic markets was to create orderly markets in order to realise
full potential of rural markets.
Reason(R) – The creation of regulated markets did not make market conditions transparent and
trader friendly.
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 and 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.

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

40 Choose one of the correct alternatives given below:
Assertion (A) –Agriculture loan default rates have been chronically high.
Reason(R) – Rapid expansion of rural credit has helped farmers to avail services and variety of
loans for meeting their production needs.
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 and 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 the correct alternatives given below.
Assertion (A): Central bank acts as a banker to the government as it maintains cash balances in the
form of current account.
Reason (R): The central bank acts as a clearing house for transfer and settlement of mutual claims
of commercial banks.
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 and Reason (R) is the not 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

Identify the correct sequence (from Left side to Right Side of the diagram) of type of poor people
on the basis of above diagram:
a) Usually poor, Always Poor Churning Poor,Occasionally Poor
b)Usually poor, Always Poor Churning Poor,Occasionally Poor
c) Always Poor, Usually poor, Churning Poor ,Occasionally Poor
d)Always Poor, , Occasionally Poor, Usually poor Churning Poor
43 Mr Pankaj Joshi, has got an offer for a job in a new company in Bangalore .He is getting a rise of
Rs one lakh per month. But his teenage children are at a crucial stage of their education and
career.
His parents are old and used to living in Delhi. His wife is also a teacher in a Delhi school.
After a lot of family discussion Joshi family finally decides to shift to Bangalore.
Which of the following is not the reason for their shift?
a) Improvement in family Income
b) Improvement in Distribution of National Income
c) Improvement in job conditions
d) None of the above
44 Read the following statements - Assertion (A) and Reason (R).
Choose one of the correct alternatives given below:
Assertion (A) : If an Indian buys a UK car company, it enters capital account transactions as a debit
item.
Reasoning (R) : Sale of assets like sale of share of an Indian company to a Chinese customer is a
credit item on the capital account.
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 and 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.
45 Read the following statements carefully. Choose one of the correct alternatives given below:
Statement 1 – The government continues to provide financial assistance to individuals and families
under self employment programmes since third five year plan.
Statement 2 –Data related to poverty levels are published and collected by Planning Commission
and NSSO respectively in India.
Alternatives:
a. Both the Statements are true
b. Both the Statements are false
c. Statement 1 is true but Statement 2 is false.
d. Statement 1 is false but statement 2 is true
46 If a country has received foreign exchange worth 26,485 Us dollar on autonomous account and
has to make similar payments worth 24,200 US Dollar, then country will have
___________________________.
 a) Balance of payment Surplus = Us dollar 2285
b) Balance of trade Surplus = Us dollar 2285
c) Balance of payment deficit = Us dollar 2285
d) Balance of payment Surplus = Us dollar 2205
47 Identify the option which is not true in the context of demographic condition of India during
British rule?
(Choose the correct alternative)
a. High Birth Rate
b. Low Death Rate
c. Low Infant Mortality Rate
d. Both( b)and (c)
48 From the following set of statements given in column 1 and 2, choose the correct pair of
statements:
Column 1 Column 2
1. World Bank Report a. India and Knowledge Economy
2. Source of Human Capital Formation b. Creates of Social and Private Benefits
3. Deutsche Bank Report c. Information about level of salaries in a job
4. Human Capital d. Global Growth Centres
a) 1.a
b) 2.b
c) 3.c
d) 4.d
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: (in ₹ Crores)

49 The Budget outlay for Health and Wellbeing is Rs.2,23,846 crores in BE 2021-22 as against this
year’s BE of Rs. 94,452 crores, showing an increase of ____________ percentage.
Choose one of the correct alternatives given below:
a) 97
b) 107
c) 127
d) 137
50 Setting up of a national institution for One Health, will be considered as______________
 Expenditure by D/O Health Research:
Choose one of the correct alternatives given below:
a) revenue expenditure
b) non- development expenditure
c) capital expenditure
d) None of the above
51 The primary deficit in a government budget will be zero, when _______
Choose one of the correct alternatives given below:
(a) Revenue deficit is zero
(b) Net interest payments are zero
(c) Fiscal deficit is zero
(d) Fiscal deficit is equal to interest payment
52 Read the following statements - Assertion (A) and Reason (R).
Choose one of the correct alternatives given below:
Assertion: Budget is used as an instrument to combat deflation.
Reason: Deficit Budget plays a vital role in establishing economic stability in such a situation.
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 and Reason (R) is the not 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
53 Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – Budgeted Expenditure in 2021-22 has increased in all categories as per Health and
Well being expenditure data given by Government in comparison to budgeted Expenditure in
2020-21
Statement 2 – Budgeted Expenditure by Ministry of Ayush has gone up by Rs 848 Crores in 2021-
22 taking budgeted Expenditure in 2020-21 as a base.
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
54 Which of the following is an example of non debt creating capital receipts?
A) Borrowings from IMF
B) Loan from World bank
C) Sale of shares of PSUs
D) Escheats
Readtheexcerptgivenandanswerthequestion 55 to 60
The case for privatisation is based on the belief that the private sector is more efficient, and that
public sector units do better when in private hands. But what does the evidence tell us? These
are issues to ponder as India embarks on a major sell-off.
India, it seems,is onthe verge of its most ambitious privatisation drive ever. In theUnion Budget
for 2021-22, Finance Minister Nirmala Sitharaman announced that outside four strategic sectors,
public sector units (PSUs) in the non-strategic sectors would be privatised or closed. In the
strategic sectors themselves a bare minimum of PSUs will be present. The four sectors are
atomic energy, space and defence; transport and telecommunications; power, petroleum, coal
and other minerals; and banking, insurance and financial services.
We have not been told the time frame for implementation of this policy. The expression being
used is ‘privatisation’, not ‘disinvestment’, which is the sale of minority stakes inPSUs.
Thechangeinlexiconhas been widely noted. The government’s privatisation programme has the
support of much of the intellectual community. Several economistshave been urging the
government for years to step up privatisation, most recently at ameeting with the prime minister
in early January. The ideological reason is the superiorefficiencythat is said to be associated
 withthe private sectorrelative tothe publicsector.
The government has, however, not articulated the case for privatisation at any length. The
Economic Survey of 2019-20 highlighted the efficiency gains from privatisation. Inrecent months,
economists have said that the government needs to increase investmentin infrastructure and, in
the present fiscal situation, the necessary resources can come only from privatisation.
There you have the two principal reasons for privatisation. The ideological reason is thesuperior
efficiency that is said to be associated with the private sector relative to thepublic sector. The
practical reason is that the government’s finances are strained and it looks to augment its
resources by selling government assets, notably PSUs.

55 Read the following statements - Assertion (A) and Reason (R).

Choose one of the correct alternatives given below:
Assertion (A): Privatization of the PSU’s by selling of part of the equity of PSU’s to the public is
known as disinvestment.
Reason (R): The purpose was to improve financial discipline, modernization and improved
performance the PSU’s.
Alternatives:
a) Both the statements are true and reason (R) the correct explanation of assertion(A)
b) Both the statements 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.
56 Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – Government made attempts to improve the performance of PSU’s by giving them
greater autonomy in managerial and operational decision making.
Statement 2 –It is believed that public sector is more efficient than private sector.
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
57 Read the following statements - Assertion (A) and Reason (R).
Choose one of the correct alternatives given below:
Assertion (A): Privatisation can be done by Disinvestment and strategic sales of shares of Central
Public Sector Enterprises (CPSE’s.)
Reason: Sale of part of shares but retaining the control over management is known as
disinvestment.
Alternatives:
a)Both the statements are true and reason (R) the correct explanation of assertion (A)
b)Both the statements 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.

58 The Government in recent drive to privatization plans to privatize its CPSE’S leaving bare minimum
presence in 4 sectors … is not the strategic sector as given in the article.
Choose one of the correct alternatives given below:
a) Coal and mineral
b) Power and petroleum
c) Textile and handloom
d) Energy space and defence.

59 Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – Privatisation can be done by Disinvestment and strategic sales of shares of Central
Public Sector Enterprises (CPSE’s.)
Statement 2 –Privatisation could provide strong impetus to the inflow of FDI.
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 In the light of the given text and common knowledge, identify the incorrect statement: -
Choose one of the incorrect alternatives given below:
a) Several economists have been urging the government for years to step up privatisation.
b) To build up infrastructure in the present fiscal situation, the necessary resources can come
from privatisation.
c) The government’s privatisation programme has no support of the intellectual community.
d) Some public sector undertakings have been given special status as Maharatnas, Navratnas and
Miniratnas.