GD GOENKA PUBLIC SCHOOL

Holiday Homework.
Class XII
Subject: Economics(30)

CHAPTER 10- GOVERNMENT BUDGET.

1. Explain the redistribution of income objective of a
government budget.
2. Can there be a fiscal deficit in the government budget
without a revenue deficit? Explain
3. Government has started spending more on providing
free services like education and health of the poor.
Explain the economic value in the reflex.
4. Does public debt impose a burden? Explain.
5. Differentiate between fiscal deficit and primary deficit.
6. The government decides to give budgetary incentives
for making investment in backward region. Explain these
possible incentives and the reasons.
7. Differentiate between Revenue Expense and Capital
Expense.
8. What is Government Budget? Explain how taxes and
subsidies can be used to influence allocation of
resources.
CHAPTER 11- FOREIGN EXCHANGE
1. Explain the effect of appreciation of domestic currency
on the imports. (CBSE 2012, 2010, 2013)
2. Why does the demand curve of the foreign exchange
slope downwards?
3. How can RBI help in bringing down the foreign exchange
rate which is very high?
4. How can increase in FDI affect the price of foreign
exchange?
5. A country deliberately keeps the value of its currency
low under the managed floating system. Discuss briefly
how it will affect the exports of the country.
6. Distinguish between Nominal Exchange Rate and Real
Exchange Rate. If you were to decide whether to buy
domestic goods or foreign goods, which rate would be
more relevant?
7. Write short note on the following given terms-
i) Hedging Function
ii) Forward Market
iii) Spot Market

CHAPTER 12- BALANCE OF PAYMENT

1. What are official reserve transactions? Explain their
importance in the BOP? (2017)
2. Define Current Account Surplus. (CBSE 2021, CBSE
2020)
3. Distinguish between autonomous and
accommodating transactions. (CBSE 2014, CBSE 2017)
4. BOP is always balanced in accounting sense. Defend
or Refute. Justify.
5. Indian investors borrow from abroad.
Answer the following-
i) In which sub account and on which side of the BOP
account will this borrowing be recorded? Give
Reason.
ii) Explain what is the impact of these borrowings on
the Exchange Rate. (CBSE 2016)
6. How is the cancellation of the Coal blocks association
by the Supreme Court of India lightly to affect our
current account deficit?
7. A country with great deficit cannot have a current
account surplus in the BOP. Do you agree with the
given statement? Discuss with reason. (CBSE 2019)