Series:SA01 Code No.

EC1/A/A
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ECONOMICS (CLASS 12)

TERM 1

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.

QUESTIONS

SECTION A

(20 questions out of 24 questions are to be attempted)

1. Budgetary policy of the government is also known as________.

a) Monetary policy
b) Economic policy
c) Fiscal policy
d) None of the above
2. Trade Balance is recorded in which of the following component of balance of Payment?
 a) Current account
b) Capital account
c) Official reserves account
d) Foreign portfolio
3. Which of the following is the rate of interest at which the RBI lends money to the commercial
banks?
a) Open Market Operations
b) Repo Rate
c) Cash Reserve ratio
d) Bank rate
4. Which of the following is not the component of capital account of Balance of Payment?
a) NRI deposits
b) Current transfers
c) Borrowing
d) Banking capital
5. Who is not the supplier of money?
a) Central bank
b) Commercial bank
c) Government
d) Households
6. M1 of money supply does not include-
a) Currency held by the public
b) Net-Time deposits
c) Demand deposits with NABARD
d) Other deposits in RBI
7. What is the relationship between demand for foreign exchange and exchange rate?
a) Inverse
b) Direct
c) No relationship
d) None of the above
8. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- A progressive tax is said to be progressive when the rate of tax increases with an
increase in income.
Statement 2- the real burden of the tax is more on the poor and less on the rich
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. Assertion(A): Export and import of capital goods (machinery) is NOT included in the capital
account.
Reason(R): Export and import of all types of goods is recorded as ‘merchandise’ or ‘visible trade’
in the current account of BOP.
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.
10. What will be the total demand deposits created when CRR = 10% and initial deposit = Rs.1000?
a) 1000
b) 5000
c) 10000
d) 12000
11. When was the first five plan started in India?
a) 31st march 1956
b) 31st march 1950
c) 1st April 1951
d) 1st April 1956
12. When was the first official decennial census conducted in India?
a) 1861
b) 1871
c) 1881
d) 1891
13. Read the following statements carefully and choose the correct alternative from the following:
Statement 1-MGNREGA stands for Mahatma Gandhi National Rural Employer Guarantee Act.
Statement 2- It guarantees 100 days of wage-employment in a financial year to urban
household.
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
14. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- Expenditure on Health is one of the sources of human capital formation.
Statement 2- It helps to build productive labor force and improve quality of life.
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 alternative from the following:
Statement 1- Total fish production accounts for 0.8% of the total GDP in India.
Statement 2- There is a low participation of women in export and internal marketing of fishing.
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. From the following given sets of statements in column I and II, choose the correct pair of
statements.
COLUMN I COLUMN II

A Revenue Receipts I Increases Liability

B Capital Receipts II Reduces Assets
C Revenue Expenditure III Increases Assets
D Capital Expenditure IV Increases Liability
Alternatives:
a) A-I
b) B-II
c) C-III
d) D-IV

17. When was the ‘Operation Flood’ started by National Dairy Development Board?
a) 1950
b) 1960
c) 1970
d) 1980
18. Which of the following is not one of the causes of poverty?
a) Population Explosion
b) low Agricultural Productivity
c) High literacy rate
d) Inequalities of Income
19. Which of the following is/are the qualitative instruments of credit control?
1. Cash Reserve Ratio
2. Credit Rationing
3. Open Market Operations
a) Only 1
b) Only 3
c) Both 1 and 3
d) Neither 1 nor 3
20. Which five-year plan pointed out that “the benefits of economic development must accrue
more and more to the relatively less privileged classes of society”?
a) 1st five-year plan
b) 2nd five-year plan
c) 4th five-year plan
d) 5th five-year plan.
21. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- Unilateral transfers are one sided payment, Eg. Gifts, Grants and Remittances.
Statement 2- They are accounted in the capital account of BoP.
 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
22. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- Pradhan Mantri Jan-Dhan Yojana is formulated in 2015 which encourages people
to open bank accounts.
Statement 2- This scheme intends to transfer all the benefits of government schemes and
subsidies to account holders directly.
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

23. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- GATT was founded in 1995 as the successor organization to the World Trade
Organization (WTO).
Statement 2- WTO was established in 1948 with 23 countries as the global trade organization.
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. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- More than half of the India’s foreign trade was restricted to Ceylon.
Statement 2- The opening of the Suez Canal intensified British control over India’s foreign trade.
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

SECTION B
(20 questions out of 24 questions are to be attempted)

25. Assertion(A): Industrial growth has also recorded a slowdown after LPG reforms
Reason(R): This was because of decreasing demand of industrial products due to cheaper
imports, inadequate investment in infrastructure.
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.
26. From the following given sets of statements in column I and II, choose the correct pair of
statements.
COLUMN I COLUMN II
A. 1950 1. National Development Council
B. 1951 2.NITI Aayog
C. 1952 3. First Five-year Plan
D. 2015 4. Planning Commission

A B C D

a) 4 3 1 2
b) 3 1 2 4
c) 1 3 4 2
d) 4 1 3 2

27. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- Through banks, the government provides partial financial assistance to SHGs which
provides the loan for self-employment activities.
Statement 2- Swarna Jayanti Gram Swarozgar Yojana (SGSY) is one such programme.
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
28. Assertion(A): Export duties have been removed as part of Trade and Investment Policy reforms.
Reason(R): It reduces the competitive position of Indian goods in the international markets.
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.
29. Assertion(A): Managed floating exchange rate system is a blend of flexible exchange rate system
and a fixed exchange rate system.
Reason(R): Under Managed floating exchange rate system, though exchange rate is determined
by market forces but central banks intervene to moderate the exchange rate system.
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. Assertion(A): The capital deficit is more harmful to the country than the revenue deficit.
Reason(R): The Capital deficit shows the maladministration and inefficiency of the government
of the country.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A).
b) Both Assertion (A) and Reason (R) are false 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.
31.

Figure showing Number of poor (in Millions) in India, 1973-2012,

On the basis of the given diagram, identify the year when the number of poor recorded in Rural
India is highest as compared to other time period between 1973-2012.
a) 1993-1994
b) 1999-2000
c) 2004-2005
d) 2009-2010
32.

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

What was the impact of the increase in demand of foreign currency in relation with domestic
currency?
 a) Currency Appreciation
b) Currency revaluation
c) Currency devaluation
d) Currency depreciation
33. Consider the statements regarding Rural Employment Generation Programme (REGP) and
choose the incorrect option.
1. This programme aim to create wage-employment opportunities in rural areas.
2. It was implemented by Khadi and Village Industries Commission.
3. Under this programme, one could get financial assistance in the form of bank loans to set up
irrigation, power and transport for agriculture.
a) Only 2
b) Only 1 and 2
c) Only 1 and 3
d) All of the above
34. Assertion(A): In India, the farming community uses the mixed crop-livestock farming system.
Reason(R): Livestock production provides increased stability in income, food security without
disrupting other food-producing activities.
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 false 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.
35. Assertion(A): The railways affected the structure of the Indian economy in two important ways.
Reason(R): It enabled people to undertake long distance travel and break geographical and
cultural barriers and fostered commercialization of agriculture.
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 false 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.
36. When was the Tata Iron and Steel Company (TISCO) incorporated?
a) 1901
b) 1905
c) 1907
d) 1927
37. Assertion(A): Dividend received on investment is the capital receipt of government.
Reason(R): Capital Receipt either reduces assets or increases liability.
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 false 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. Assertion(A): Import of goods and services reflects the demand of foreign currency.
Reason(R): Import of goods and services shows inflow of foreign exchange.
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 false 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.
39. Consider the following statements regarding Indian economy during reforms.
1. The post-1991 witnessed a rapid growth in GDP on a continual basis for two decades.
2. The growth of agriculture has declined during the reform period.
3. Industrial sector reported an exorbitant growth.
4. The growth of Service sector has drastically declined.
5. This indicates that this growth is mainly driven by growth in Secondary sector.
a) Only 1 and 2 are correct
b) Only 1, 3 and 5 are correct
c) Only 4 and 5 are correct
d) All of the above
40. Read the following statements carefully and choose the correct alternative from the following:
Statement 1- India was following an inward-looking trade strategy which is commonly called
import substitution.
Statement 2- This policy aims at replacing or substituting domestic production with imports.
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
41. Assertion(A): There was the growing Uniformity in the share of workforce in different sectors
across the Indian sub-continent.
Reason(R): Parts of the then Madras, Bombay and Bengal presidency witnessed a decline in the
dependence of the workforce on the primary sector and vice-versa in Orissa, Rajasthan and
Punjab.
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 false 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.
42. Who was the first person in the pre-independent india to discuss the concept of a poverty line?
a) Shaheen Rafi Khan
b) Damian Killen
c) Dadabhai Naoroji
d) Findlay Shirras
43. Assertion(A): There is convergence in the measure of human capital but no sign of convergence
of per capita real income.
Reason(R): The causality between human capital and economic growth flows in either direction.
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 false 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.
44. Assertion(A): A good indicator of economic growth is steady increase in Gross domestic product
(GDP).
Reason(R): GDP is the market value of all goods and services produced in a country during a year
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. Assertion(A): Government discourages production of harmful products through heavy taxes and
encourages production of socially useful goods like Khadi by providing subsidies.
Reason(R): Government reallocates resources in accordance with the economic and social
priorities 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 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
46. Assertion(A): Rapid expansion of the banking system had a negative effect on rural farm and
non-farm output.
Reason(R): Rural banking helped farmers to avail services and credit facilities and 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
47. Goods and Services Tax Act, 2016 which came into effect from July 2017, is expected to:
(Choose the correct alternative)
(a) Generate additional revenue for the government
(b) Reduce tax evasion
 (c) Create ’one nation, one tax and one market’
(d) All of these
48. An Indian Real Estate Company receives rent from Google in New York. This transaction would
be recorded on ______ side of ______ account.
a) Credit, current
b) Credit, capital
c) Debit, capital
d) Debit, current

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:

49. Which of the following exactly defines the ‘trade balance’?

a) It is the difference between the export and import of the country.
b) It is recorded in the current account of Balance of Payment.
c) Both a and b
d) Neither a nor b
50. What is the trade balance of the above data released by Economic survey 2017-18?
a) +2,80,138
b) +1,12,442
c) -1,12,442
d) -2,80,138
51. What is the invisible balance of the above data released by Economic survey 2017-18?
a) 67,455
b) 97,147
c) 55,983
d) 26,291
52. What is the current account balance of the above data released by Economic survey 2017-18?
 a) -1,12,442
b) +97,147
c) -44,987
d) -15,296
53. Assertion(A): Export of goods and services are recorded as negative (-) items.
Reason(R): Exports cause flow of foreign exchange into the domestic economy.
(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
54. Consider the following statements regarding current transfers and choose the incorrect option.
1. These are unilateral transfers by residents settled abroad.
2. In BoP accounts, current transfers are treated as an element of ‘invisibles’
3. For example, Gifts, Grants and remittances.
a) Only 1 and 2
b) Only 1 and 3
c) Only 2 and 3
d) None of the above

Q.No. 55-60 are to be answered on the basis of the following data:

Colonial policies of the British government almost reversed the composition, or structure of output, as
well as the composition of exports and imports. Also, the pace of growth was severely hit. No systematic
official attempts were ever made of estimating per capita income (indicating per-head availability of
goods and services in the economy). However, some individuals made some modest attempts to
measure per capita income during the British period. These included VKRV Rao, Dadabhai Naoroji,
Findlay Shirras, William Digby and RC Desai. Rao’s study was most comprehensive and systematic. He
found that during the first half of the 20th century, while national income showed a modest growth of
about 2 per cent, per capita income showed a dismal growth of about 0.5 per cent.

55. Who was the first to estimate national income under British rule?
a) VKRV Rao
b) Dadabhai Naoroji
c) Findlay Shirras
d) William Digby
56. Whose attempts to measure per capita income during the British period was the most
comprehensive and systematic?
a) VKRV Rao
b) Dadabhai Naoroji
c) Findlay Shirras
d) William Digby
57. In the history of demographic transition, which year is regarded as the year of great divide?
a) 1900
b) 1909
 c) 1911
d) 1921
58. What was the growth of national income in the first half of 20th century?
a) 1.5%
b) 2.0%
c) 0.5%
d) 2.5%
59. Assertion(A): The products of handicraft industries enjoyed a worldwide market.
Reason(R): The imports from India had the reputation of the fine quality of materials used and
high standards of craftsmanship.
(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
60. Assertion(A): There was higher yield of cash crops in certain areas of Indian sub-continent during
British rule.
Reason(R): The agriculture in British India was highly commercialized.
(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