GURUKUL TUTION CENTER

CLASS :- 12 (ECONOMICS)
1. Which of the following statements best describes macroeconomics?

a) It focuses on the behavior of individual consumers and firms.

b) It studies the functioning of individual markets and their equilibrium.

c) It examines the overall behavior of an economy as a whole.

d) It analyzes the microeconomic aspects of production and distribution.

2. Macroeconomics deals with the study of:

a) Individual economic units.

b) Market structure and competition.

c) Aggregate economic variables.

d) Consumer preferences and choices.

3. The main objective of macroeconomics is to:

a) Analyze the production and costs of individual firms.

b) Understand the behavior of consumers in the market.

c) Study the aggregate behavior of the entire economy.

d) Examine the price determination in various industries.

4. Which of the following is a macroeconomic variable?

a) Price of a specific brand of smartphone.

b) Consumer demand for a particular product.

c) National income of a country.

d) Cost of production for a single firm.

5. The gross domestic product (GDP) is a measure of:

a) Total savings in the economy.

b) Total exports minus total imports.

c) Total value of goods and services produced in an economy.

d) Total government expenditure in a given year.

6. Gross Domestic Product (GDP) is a measure of:

a) Total income earned by citizens

b) Total output produced within a country

c) Total savings in an economy

d) Total imports and exports of a country

7. Which of the following is not included in the calculation of GDP?

a) Government purchases of goods and services

b) Personal consumption expenditures

c) Transfer payments from the government

d) Business investments in new machinery

8. Which of the following is an example of a final good or service?

a) Flour used by a bakery to make bread

b) Steel used by an automobile manufacturer to produce cars

c) Fuel used by a transportation company to run its vehicles

d) A loaf of bread purchased by a consumer from a bakery

9.Net Domestic Product (NDP) can be calculated by subtracting which of the following from GDP?

a) Indirect taxes

b) Government expenditures

c) Depreciation

d) Personal income taxes

10.. Which of the following is used to measure the level of economic inequality in a country?

a) Gross National Product (GNP)

b) Consumer Price Index (CPI)

c) Lorenz curve

d) Human Development Index (HDI)

11. The expenditure approach to measuring GDP includes which of the following components?

a) Consumption expenditure

b) Investment expenditure

c) Government expenditure

d) All of the above

12. Which of the following is not a component of National Income?

a) Rent

b) Wages and salaries

c) Interest

d) Profits earned by foreign companies in the country

13. The difference between a country’s exports and imports is known as:

a) Gross National Product (GNP)

b) Balance of Trade

c) Trade deficit
d) Current account surplus

14. National Income Accounting helps in measuring the:

a) Level of unemployment in the economy

b) Rate of inflation in the economy

c) Overall economic growth of a country

d) Stock market performance

15. Which of the following measures the value of all final goods and services produced by a country’s residents, both
domestically and abroad?

a) Gross Domestic Product (GDP)

b) Gross National Product (GNP)

c) Net National Product (NNP)

d) National Income (NI)

16. Which of the following functions of money refers to the ability of money to be easily converted into goods and services?

a) Medium of exchange

b) Unit of account

c) Store of value

d) Measure of value

17. Which of the following is not a characteristic of money?

a) Durability

b) Divisibility

c) Limited supply

d) Portability

18. The central bank is responsible for:

a) Regulating commercial banks

b) Providing loans to individuals

c) Printing currency notes

d) Collecting taxes from the public

19. The process of converting deposits into loans by commercial banks is known as:

a) Deposit creation

b) Deposit withdrawal

c) Deposit conversion

d) Deposit transfer

20. Which of the following is not a function of the Reserve Bank of India (RBI)?

a) Issuing currency notes

b) Controlling inflation

c) Regulating stock market

d) Managing foreign exchange reserves

21. The main function of commercial banks is to:

a) Control monetary policy

b) Issue currency notes

c) Provide loans and accept deposits

d) Conduct open market operations

22. Which of the following is not a component of the money supply in an economy?

a) Currency with the public

b) Demand deposits with commercial banks

c) Time deposits with commercial banks

d) Government securities

23. The interest rate at which the Reserve Bank of India lends money to commercial banks is known as:

a) Repo rate

b) Reverse repo rate

c) Cash reserve ratio

d) Statutory liquidity ratio

24. Open market operations refer to the buying and selling of:

a) Government securities by commercial banks

b) Currency by the central bank

c) Gold and silver by the government

d) Foreign exchange by commercial banks

25. Which of the following is an example of non-bank financial institution?

a) State Bank of India

b) Punjab National Bank

c) Life Insurance Corporation (LIC)

d) HDFC Bank

NUMERICAL BASED QUESTIONS

Question:
1. The following table provides data on the income and expenditure of an imaginary country in a particular year (all
values are in millions of currency units):

| Categories of Expenditure | Amount (in millions) |

|---------------------------|---------------------|
| Consumption Expenditure | 400 |

| Investment Expenditure | 200 |

| Government Expenditure | 100 |

| Exports | 150 |

| Imports | 100 |

| Indirect Taxes | 50 |

| Subsidies | 20 |

Calculate the following:

1. Gross Domestic Product (GDP)

2. Net Domestic Product at Factor Cost (NDPFC)

3. Net National Product at Market Prices (NNPMP)

4. Personal Income (PI)

5. Disposable Income (DI)

Assume that there are no statistical discrepancies.

Note: GDP = Gross Domestic Product, NDPFC = Net Domestic Product at Factor Cost, NNPMP = Net National Product at
Market Prices, PI = Personal Income, DI = Disposable Income.

You may assume that there is no saving or depreciation in this particular year.

2. Consider the following data for an economy in a given year:

Consumption expenditure ©: $500 billion

Investment expenditure (I): $200 billion

Government expenditure (G): $300 billion

Exports (X): $250 billion

Imports (M): $150 billion

Calculate the following:

a) Gross Domestic Product (GDP)

b) Net Domestic Product at Factor Cost (NDPFC)

c) Net National Product at Factor Cost (NNPFC)

d) Personal Income (PI)

e) National Disposable Income (NDI)

Use the formula:

GDP = C + I + G + (X – M)

NDPFC = GDP – Depreciation

NNPFC = NDPFC – Net Indirect Taxes

PI = NNPFC – Corporate Tax – Retained Earnings

NDI = PI + Transfer Payments – Direct Taxes

Assume that there are no net subsidies in the economy.

3 . Question:

Consider the following data for an economy in a given year:

Consumption expenditure ©: $500 billion

Investment expenditure (I): $200 billion

Government expenditure (G): $300 billion

Exports (X): $400 billion

Imports (M): $350 billion

Calculate the following:

a) Gross Domestic Product (GDP)

b) Net Domestic Product (NDP)

c) Gross National Product (GNP)

d) Net National Product (NNP)

e) Net National Disposable Income (NNDI)

Assume there is no statistical discrepancy.

Hint: Use the formula GDP = C + I + G + (X – M).