DELHI PUBLIC SCHOOL, HYDERABAD

Achievement Augmenter –Dt.04.08.2020

Class: XII Time: 2hrs
Subject: Economics Max. Marks: 50
Instructions:
1. All questions are compulsory.2. Marks for questions are indicated against each.
3. Question Nos. 1 to20 are very short-answer questions carrying 1 mark each.
4. Question Nos. 21 to 24are short-answer questions carrying 3 marks each to be answered within 60 words each.
5. Question Nos.25 to 27carry 4 marks each to be answered within 70 words each.
6. Question No. 28 is a numerical question carrying 6 marks.
7. Diagrams, if any, to be drawn using pencil. 8. Word limit is not applicable for numericals.
_____________________________________________________________________________________

1. Define Normal Resident of a country. 1

2. Measurement of national Income at current prices provides a reliable base of comparison.
True/ False? 1
3. __________ phase involves flow of factor income from firms to the households. 1
4. National Income of a country is a ________ concept. (stock/ flow) 1
5. Out of the following, who are not residents of India? 1
(a) Indians going abroad for medical treatment.
(b) Indians working in a branch of an American Bank in India.
(c) Indians working permanently in UNESCO office in New York.
(d) Indians working in Indian Embassy in Japan.
6. Which of the following equations is incorrect? 1
(a) Domestic Income = Operating Surplus + Profit + Compensation of Employees +
Mixed Income
(b) Domestic Income = Operating Surplus + Compensation of Employees +
Mixed Income
(c) Domestic Income = Rent & Royalty + Interest + Profit + Compensation of Employees
+ Income of self-employed
(d) Domestic Income = National Income + Factor Income to Abroad - Factor Income
from Abroad
7. Which of the following is not included in Compensation of employees? 1
(a) Employer’s contribution to provident fund
(b) Bonus paid to employees
(c) House rent Allowance paid to employees
(d) Entertainment allowance paid to employees
8. According to a report forwarded by the Reserve Bank of India, there was a fall in rate of
inflation as measured by Consumer Price Index (CPI) on a year-on-year basis to 5% from
8% in the previous year. What does this statement mean?
(Choose the correct option): 1
(a) CPI has fallen (b) CPI has risen at a rate lower than the preceding year
(c) CPI is constant (d) None of the above
9. Identify the correct sequence of alternatives given in Column II by matching them with
respective terms in Column I. 1
COLUMN I COLUMN II
a. Gross domestic capital i. National concept
formation
b. Net exports ii. Includes depreciation
c. Gross Domestic Product iii. Income method
d. Net factor income from iv. Is not a good measure of welfare
abroad

---- ------- v. Domestic concept

10. Purchase of Microsoft shares by Reliance India Ltd. is a __________ transaction.
(cash/ financial) 1

11. Expenditure method of estimating National income is also known as ______________

Method. 1
12. M1 measure of money supply is also known as _________ money. 1
13. What do you mean by net demand deposits in the context of money supply? 1
14. What is bank money? 1
15. ________________ is the main source of money supply in an economy. 1
(a) Central bank (b) Commercial banks (c) Both (a) & (b) (d) Government
16. Leave travel allowance paid to employees is included in National Income because
_ ___________. (Give reason) 1
17. Free Covid-19 testing kits provided by Wipro. Is it included in Domestic Income? 1
18. Give one item not included in ‘Other Deposits with Central Bank’. 1
19. Factor income paid to non-residents within the domestic territory of a country is ______
____________ while estimating National Income. (Choose the correct alternative): 1
(a) added to Domestic Income
(b) deducted from Domestic Income
(c) None of the above
20. ________________ measures the average level of prices of all the goods and services that
make up the Gross Domestic Product. 1
21. The same good can be a final good as well as an intermediate good. Defend or refute the
statement and give reasons for your answer. 3
22. Which among the following are capital goods and which are consumer goods? Give
reasons for your answer. 3
(a) A car used as a taxi (b) Air-conditioner in a house
23. Explain ‘Mixed income of self-employed’ and give two examples. 3
24. When lockdown is announced in the country due to Covid-19 pandemic, only some
sectors are able to adopt the “Work from home” approach. What will be the overall
impact on the country’s GDP and welfare in the given situation? Explain with reasons. 3
25. Explain the M1 measure of money supply in detail. 4
26. How should the following be treated while estimating National Income? Give reasons. 4
(a) Fees to a mechanic paid by a firm
(b) Expenditure on construction of Metro by the Hyderabad Metro Rail Corporation
(c) Expenditure on purchase of antique furniture by a family
(d) Fees and commission received by an auction house for sale of antiques
27. What is real GDP? State the three limitations of Gross Domestic Product as an index
of economic welfare. 4
28. A sells Rs.300 worth of his output to B, Rs.200 worth of his output to C and Rs.500 worth
of his output to households. The sales of B to A, C and D are worth Rs.400, Rs.200 and
Rs.300 respectively. C sells to A, B and D, output worth Rs.100 each. Sales by C to
households are worth Rs.900. D sells to households output worth Rs.700. His exports are
worth Rs.300 while stock worth Rs.200 remains unsold with D. Estimate the value added
by A, B, C and D respectively. 6

********