TIME: Awagarh Public Sr.

Secondary School
3 HRS SUBJECT-ECONOMICS
CLASS 12TH
HALF YEARLY

PART A MACRO ECONOMICS 40

Q.1 Read the following statements carefully: 1
Statement 1: Consumption function assumes that, consumption changes at a
constant rate as income changes.
Statement 2: Autonomous consumption is the ratio of total consumption (C)
to total income (Y). In light of the given statements, choose the correct
alternative from the following:
a) Statement 1 is true and Statement 2 is false.
b) Statement 1 is false and Statement 2 is true.
c) Both Statements 1 and 2 are true.
d) Both Statements 1 and 2 are false.
Q.2 Demand deposits include. 1
a. Saving account deposits and fixed deposits.
b. Saving account deposits and current account deposits.
c. Current account deposits and fixed deposits.
d. All types of deposits.
Q.3 “The value of all goods and services can be expressed in monetary units.” On 1
the basis of the given statement, identify the function performed by money:
a) Medium of exchange
b) Store of Value
c) Unit of account
d) Means of standard of deferred payments
Q.4 What is meant by fiscal year in Indi? 1
A-1st April to 31 March
B-5 April to 20 March
C-3 April to 25March
D-None of these
Q.5 Suppose for a given economy, S= -60 + 0.1Y I= ₹ 4,000 crore (Where S = 1
Saving Function, Y = National Income and I = Investment Expenditure)
Equilibrium level of Income would be ₹ ______ crore. (Choose the correct
alternative to fill up the blank)
Q.6 1

Q.7 Read the following statements carefully: 1

Statement 1: The maximum value of Marginal Propensity to Consume (MPC)
can be unity.

Statement 2: As the income of an economy increases, the proportionate

increase in the level of consumption is always more than the increase in the
level of income.
In light of the given statements, choose the correct option from the
following:
A. Statement 1 is true and Statement 2 is false.
B. Statement 1 is false and Statement 2 is true.
C. Both Statements 1 and 2 are true.
D. Both Statements 1 and 2 are false.
Q.8 APC + APS should always be equal to 1 1
a) False
b) Depends on their values
c) None of these
d) True
Q.9 1

Q.10 What do you mean by credit creation by commercial banks? 1

a) It is the process of loan creation
b) It is the process of creation of foreign exchange
c) It is the process of total withdrawal creation
d) It is the process of total deposit creation
Q.11 3

A.

B.
Q.12 Do you agree with the statement, ‘Machine purchased is 3
always a final
good’. Give reason for your answer.

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Q.13 4
A

13.B

2
2
Q.14 What are the precautions to be taken while calculating national income 4
through product method, specially value-added method?
Q.15 Elaborate the ‘Banker’s Bank and Supervisor’ function performed by the 4
Reserve Bank of India.
OR

a) What is meant by Cash reserve ratio? How does it increase the money 2
supply in the economy?

b)What is meant by Open market operation? How does it reduce the money 2
supply in the economy?
Q.16 Q. Read the following case carefully and answer the questions that follow: 6

The government of a country is attempting to estimate its National Income for the financial year
2023-2024. They collected the following data:

 Total output produced in the country: ₹5000 crores

 Net factor income from abroad: ₹200 crores
 Indirect taxes: ₹300 crores
 Subsidies: ₹100 crores
 Consumption of fixed capital (depreciation): ₹400 crores
 Gross Domestic Product at Market Price (GDP at MP): ₹5300 crores

Based on the above data, answer the following questions:

a. Calculate the Net Domestic Product at Market Price (NDP at MP). (2 marks)
b. Calculate the Net National Product at Market Price (NNP at MP). (2 marks)
c. Explain the concept of Net National Product at Factor Cost (NNP at FC). How can it be
derived from NNP at MP? (2 marks)
Q.17 Case Study (6 Marks) 6

Q. Read the following case carefully and answer the questions that follow:

In recent years, the central bank of Nation Y has faced a dilemma regarding the control of
inflation, which has been fluctuating between 6% and 8%. To curb inflation, the central bank has
adopted various monetary policies, including increasing the repo rate and tightening the money
supply.

The following data provides insights into the banking sector and the money market for the year
2023-2024:

1. The total money supply in the economy at the beginning of the year was ₹50,000 crores.
2. To curb inflation, the central bank increased the repo rate from 4.5% to 5.5%, leading to
a rise in the cost of borrowing for commercial banks.
3. The cash reserve ratio (CRR) was increased from 3% to 4%, causing banks to hold a
higher portion of their deposits as reserves with the central bank.
4. Despite the tightening of the money supply, the demand for loans remained high,
especially in the housing and automobile sectors, where the interest rates for consumers
rose by an average of 1.5%.
5. Commercial banks, in response to the monetary policy changes, increased their lending
rates from 8% to 9.5%.
6. However, inflation persisted, with prices of essential goods and services continuing to
rise, leading to a debate about the effectiveness of monetary policy in controlling
inflation.
7. Meanwhile, the Statutory Liquidity Ratio (SLR) was kept unchanged at 18%. The
central bank is now considering further tightening by using Open Market Operations
(OMO) to control the money supply.

Questions:

a. Explain how an increase in the repo rate affects the lending rates of commercial banks. (2
marks)
b. Calculate the increase in the reserves that commercial banks need to maintain if the total
deposits in the banking system amount to ₹80,000 crores and the CRR is raised from 3% to 4%.
(2 marks)
c. Discuss the impact of an increase in the Cash Reserve Ratio (CRR) on the money supply in the
economy. How does it help control inflation? (2 marks)

PART:B (INDIAN ECONOMIC DEVELOPMENT)

Q.18 ________________was the Indian finance minister in 1991,acknowledged for his 1
capabilities to steer away from the economic crisis looming large on the erstwhile Indian
economy.
a)Dr. Subramanium Swamy
b)Pranab Mukherjee
c)Dr. Manmohan Singh
d)Dr Urjit Pate

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Q.19 .In India, what type of economic system is being followed? 1
a. Capitalism
b. Socialism
c. Monarchy
d. Mixed

Q.20 .External Factors responsible for industrial sickness 1

a. Lack of management
b. Government policies related with production, distribution and
prices
c. Excessive overhead expenses
d. Diversion of funds

Q.21 1

Q.22 .LPG stands for: 1

a. Liberalisation, Production and Global Cooperation
b. License, Privatisation and Globalisation
c. Liberalisation, Privatisation and Globalisation
d. License, Permit and Goods
Q.23 In which year was India’s first five year plan launched ? 1
a-1955
b-1951
c-1947
d-1940
1
Q24
Q25 1

Q26 Which of the following statements is true about the licensing policy followed 1
by the Indian Economy in the 1950-1990 era?

a. It helped to promote regional equality in the industry

b. It helped to check the undue expansion of the industrial sector
c. It helped to promote regional equality in the industry as well as to check the
undue expansion of the industrial sector
d. None of the above
Q27 Which of the following statements is true about the occupational structure of 1
the Indian economy during British rule?
a. The occupational structure of the Indian economy during the British
rule was stagnant
b. The occupational structure of the Indian economy during the British
rule was underdeveloped
c. The occupational structure of the Indian economy during the British
rule was both stagnant and underdeveloped
d. The occupational structure of the Indian economy during British rule
was developed
Q28 Why was Indian economy referred to as an agricultural economy on the eve of 3
independence?
Q29 3

Q30 What are the main components of the New Economic Policy introduced in 3
1991?
OR
Discuss the impact of globalization on India's service sector, particularly the
IT industry.

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Q33 Explain the major problems faced by the Indian economy on the eve of 3
independence.
OR
Discuss the role of agriculture in the Indian economy before independence.
Q34 ‘Atmanirbhar Bharat’had been at the roots of the Indian planning process in 4
the form of ‘Self Reliance’ as an objective of the planning process .
(Do you agree with the given statement ? Justify the rationale of the given
statement.

Q35 (Case Study) 6

After gaining independence, India adopted a planned economy model and began implementing
Five-Year Plans to steer its economic development. The first two decades focused on
establishing a strong industrial base, led by the public sector. Key industries like steel, coal, and
heavy machinery were nationalized, as it was believed that the private sector did not have the
capacity to develop these large-scale industries. The government also focused on self-reliance
and import substitution to reduce dependence on foreign goods.

The 1960s marked the introduction of the Green Revolution, which sought to modernize Indian
agriculture with high-yielding variety seeds, chemical fertilizers, and better irrigation techniques.
While it resulted in increased food grain production, particularly in wheat, the benefits were
largely confined to a few regions like Punjab, Haryana, and Western Uttar Pradesh, leaving other
parts of India behind.

By the 1980s, the public sector had grown inefficient and became a financial burden, with many
public sector undertakings (PSUs) running at a loss. The economy also faced slow growth, high
inflation, and increasing fiscal deficits. These challenges created the groundwork for the
economic reforms of 1991.

Questions:

a. Describe the role of the public sector in India’s economic growth during the 1950-1990 period,
and discuss its limitations.
b. How did the Green Revolution transform Indian agriculture? What were its limitations in
terms of regional inequality and environmental impact?
c. What were the key economic challenges faced by India in the 1980s? Discuss how these
challenges contributed to the need for economic reforms in the 1990s.

OR

( CASE STUDY)

During the British colonial rule, the Indian economy faced several challenges that deeply
affected its structure. Agriculture was the main occupation, but it remained stagnant due to lack
of investment and proper infrastructure. The industrial sector, on the other hand, was dominated
by British capital and saw little growth, while India's international trade was heavily biased in
 favor of the British economy. The handicrafts sector, once a pride of India, declined due to
competition from British manufactured goods.

Questions:

a. Identify and explain two major structural problems in the Indian economy on the eve of
independence.
b. How did British economic policies affect India’s agriculture and handicraft industries?
c. Suggest two ways in which these issues could have been addressed after independence.

Q36  What are the main components of the New Economic Policy introduced in 1991?(4) 8
 Discuss the impact of globalization on India's service sector, particularly the IT industry.
(4)

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