DELHI PUBLIC SCHOOL, SITAPUR

PRE-BOARD - II (2023-24)
TIME: 3 Hour SUBJECT: ECONOMICS CLASS XII Max. Marks: 80

Time: 3 Hours Max. Marks: 80

General Instructions:
1. This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each.
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered in 100 to 150 words.

Section A -Macro Economics

Multiple Choice Questions (Q1 to Q10) 1 x 10=10

1. Retail banking is to provide banking services

(a) entirely to agriculture sector only
(b) only to self-help group for their survival
(c) only to individual customers in an integrated manner
(d) None of the above

2. Statement I: Intersectoral flows refer to the flow of goods and services as well as flow of money among different
sectors of the economy.
Statement II: Intersectoral interdependences are satisfied through a system of mutual exchanges, and mutual
exchanges lead to intersectoral flows of money as well as goods and services.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are false
(b) Both statements are true
(c) Statement I is true and Statement II is false
(d) Statement I is false and Statement II is true

3. In the COVID-19 times, many economists have raised their concerns that Indian economy may have to face a
deflationary situation, due to reduced economic activities in the country. Suppose you are a member of the high -
powered committee constituted by the Reserve Bank of India (RBI). You have suggested that as the supervisor of
commercial banks, of the money supply be ensured, by the Reserve Bank of India (RBI).
(a) release (b) restriction
(c) contraction (d) None of these

4. The money multiplier in an economy increases with .

(a) increase in banking habits of the population
(b) increase in the population of the country
(c) increase in cash reserve ratio
(d) increase in statutory liquidity ratio
5. Statement I: Autonomous transactions are independent of the state of BoP account.
Statement II: Balance of payments is an accounting statement that records monetary transactions between residents
of a nation and the rest of the world.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are true
(b) Both statements are false
(c) Statement I is false and Statement II is true
(d) Statement I is true and Statement II is false

6. Suppose that the Balance of Trade (BoT) of a nation, exhibits a surplus of 20,000 crores.
The import of merchandise of the nation is half of the exports of merchandise to the rest of the world.
The value of exports would be crores.
(a) 24,000 (b) 35,000
(c) 30,000 (d) 40,000

7. S = – 100 + 0.2Y is the saving function in an economy. Investment expenditure is 5,000. Calculate the equilibrium
level of income.
(a) 23,000 (b) 25,000
(c) 25,500 (d) 24,500
OR
Which of the following is not a tool of monetary policy?
(a) Cash reserve ratio (b) Tax rate
(c) Interest rate (d) Open-market operations of the Central Bank

8. If total expenditure is 2,000 and total receipts is 1,500, fiscal deficit will be equal to:
9. (a) 1,400 (b) 600
(c) 3,000 (d) Can’t be determined

If primary deficit is 3,000 and interest payment is 500, the fiscal deficit is
(a) 4,100 (b) 4,200
(c) 3,500 (d) 4,000

10. Assertion: In absence of any legal heir of an individual, government distributes its financial assets.
Reason: Non-tax revenues of government budget is categorized under capital component.
Alternatives
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

11. Assertion: Capital of balance of payment is non -recurring in nature.

Reason: Capital transfers affects the assets and liabilities of a country.
Alternatives
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
Short Answer Questions (Q11 to Q12) 3x 2=6

12. Calculate ‘Gross National Product at Factor Cost from the following data by expenditure method:
Items (in crores)
Private final consumption expenditure 1,000
Net domestic capital formation 200
Profits 400
Compensation of employees 800
Rent 250
Government final consumption expenditure 500
Consumption of fixed capital 60
Interest 150
Net current transfers from rest of the world (–) 80
Net factor income from abroad (–) 10
Net exports (–) 20
Net indirect taxes 80

13. Describe any three sources of demand for foreign exchange.

or
What is Balance of Payments? Give meanings of trade balance and current account balance.

Short Answer Questions (Q13 to Q15) 4 x 3 = 12

14. Derive the formula,

1
K =MPS
Where K = Investment Multiplier
MPS = Marginal Propensity to Save

15. In the given figure, what does the gap ‘KT’ represent? State and discuss any two fiscal measures to correct the
situation.
16. Read the given excerpt taken from the article ‘What is ‘Money” published by The Economic Times on 20th
September 2022
“The money came into existence to overcome the drawbacks of the barter system. Earlier, people used to exchange
goods and services as a form of commerce. This often led to many disadvantages, one of which was the double
coincidence of wants. To solve this problem, a standard medium of exchange, money, was introduced.”
Explain in brief the function of money highlighted in the given excerpt.
or
Define credit multiplier. What role does it play in determining the credit creation power of the banking system? Use
a numerical illustration to explain.

Long Answer Questions (Q16 to Q17) 6 x 2 = 12

17. (i) “Management of a water polluting oil refinery says that the it (oil refinery) ensures welfare through its
contribution to Gross Domestic Product”. Defend or refute the argument of management with respect to GDP
as a welfare measure of the economy.
(ii) Giving reason, explain the treatment assigned to the following while estimating national income
(a) Interest paid by banks on deposits by individuals
(b) National debt interest

18. (i) From the following data about a government budget, find out the following
(a) Revenue deficit
(b) Fiscal deficit
(c) Primary deficit
Contents (in Cr.)
Tax revenue 47
Capital receipts 34
Non-tax revenue 10
Borrowings 32
Revenue expenditures 80
Interest payments 20
(ii) Explain the budgetary measures for achieving the objective of setting up of production units in backward
regions.
or
(i) Classify the following taxes into direct and indirect tax. Give reasons for your answer.
(a) Corporation tax
(b) Entertainment tax
(c) Excise duty
(ii) Distinguish between primary and revenue deficit?

Section B -Indian Economic Development

Multiple Choice Questions (Q18 to Q27) 1 x 10=10

19. Which of the following factors are not considered while constructing the HDI Index?
(a) A good environment as measured by appropriate environment policies
(b) A decent standard of living as measured by GDP per capita
(c) Long and healthy life measured by life expectancy at birth
(d) Knowledge as measured by the adult literacy rate
20. An adulterated element leak into the ground filtration, and carried into a ground water reservoir is known as
(a) Water pollution
(b) Air pollution
(c) Land contamination
(d) Noise pollution
or
After mining activity has been conducted, the huge holes that are left behind, are used for .
(a) waste storage
(b) waste disposal
(c) wastewater storage
(d) waste and water storage

21. is the most preferred form of employment among women in India.

(a) Technical employment
(b) Self-employment
(c) Both (a) and (b)
(d) Wage employment
or
Increase in the proportion of casual workers as a proportion of total workforce is known as .
(a) Informalisation
(b) Casualisation
(c) Employment elasticity of growth
(d) None of the above

22. Which of the following measures does not come under the purview of an improved agricultural marketing system?
(a) Assurance of MSP, provision of food through PDS and maintenance of buffer stocks
(b) Regulation of markets to create an orderly and transparent marketing system
(c) Cooperative marketing, in realising fair prices for farmers’ products
(d) All of the above comes under the purview of an improved agricultural marketing system

23. Match the following

Column I Column II
A. Economic Development in China (i) Mao
B. India’s new Development Policy (ii) China
C. The Great Leap Forward (iii) 1978
D. Commune (iv) 1991
Codes
A B C D
(a) (i) (ii) (iii) (iv)
(b) (ii) (i) (iv) (iii)
(c) (iii) (iv) (i) (ii)
(d) (iv) (ii) (i) (iii)
24. Statement I: There is a need for the owner of the human capital to be present in the place of production.
Statement II Human capital is intangible; it is endogenously built in the body and mind of its owner.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are false
(b) Both statements are true
(c) Statement I is true and Statement II is false
(d) Statement I is false and Statement II is true

25. Statement I: Education is a wider concept and encompasses literacy.

Statement II A person is considered literate if he/she has ability to read and write in any language. A person is
educated if he/she can find a work and can earn some income.
In the light of the given statements, choose the correct alternative from the following
(a) Both statements are true
(b) Both statements are false
(c) Statement I is true and Statement II is false
(d) Statement I is false and Statement II is true

26. is a form of market intervention by the Government of India to insure agricultural produces against any
sharp fall in farm prices.
(a) Quality Assured Prices (QAP)
(b) Structural Adjustment Prices (SAP)
(c) Minimum Support Prices (MSP)
(d) Adequate Prices
or
Agricultural marketing does not comprise of
(a) storage of the produce for sale in future
(b) credit taken to meet expenditure on agriculture
(c) transportation of the produce to the market place for sale
(d) grading of the produce according to the quality

27. Assertion (A) Railways brought a significant change in the structure of the Indian economy.
Reason (R) It enabled people to break geographical and cultural barriers and promoted commercialization of
agriculture.
Alternatives
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

28. Assertion (A) Primary sector is an important source of labour supply to the secondary and tertiary sectors of the
economy.
Reason (R) When productivity rises in agriculture (owing to the use of innovative technology), less labour is needed
to produce a given level of output.
Alternatives
(a) Assertion is true, but Reason is false
(b) Assertion is false, but Reason is true
(c) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(d) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
Short Answer Questions (Q28 to Q29) 3x 2=6

29. The figure given below depicts that India’s environmental problems pose a dichotomy- they are poverty induced and
at the same time arise due to affluence in living standards. Do you agree with the given statement? Justify.

30. Bring out the need for on-the-job-training for a person.

or
Defend or refute the statement with valid explanation
“There are more number of regular salaried employees found in urban areas than in rural areas”.

Short Answer Questions (Q30 to Q32) 4 x 3 = 12

31. Compare and analyse the given data of India and China, with valid reasons.
Country Annual Growth Rate of Population (2015) Gender Ratio (Per thousand males)
India 1.2 % 929
China 0.5 % 941
Source World Development Indicators, 2015

32. (i) Give the meaning of demonetisation?

(ii) Discuss briefly any two major steps taken by the Government of India on ‘Financial Sector’ front under the
Economic Reforms of 1991.
or
Deepesh argues that in the era of privatisation, there is no need for government intervention in education and
health sectors. However, his friend Mahesh argues that education and health care services create social benefits and
therefore there is a need for government intervention in education and health sectors. Decide with reasons, who is
right?

33. State whether the following statements are true or false, with valid arguments
(i) Substituting fertiliser subsidies with agricultural subsidies as the farmer was benefitting fertiliser industry and
not the target group has been the topic of immense debate regarding provision of subsidies during 1960’s and
70’s.
(ii) The main reason for constituting Karve Committee in 1955 was setting capital good industries in rural areas and
thus promoting rural development.
Long Answer Questions (Q33 to Q34) 6 x 2 = 12

34. (i) Define worker population ratio.

(ii) What do you understand by the term ‘distress sale’?
(iii) Literacy rates in India have increased but so has the absolute number of illiterates. Why?
or
(i) Enlist some problems faced by farmers during the initial years of organic farming.
(ii) “In recent times, the Indian economy has experienced the problem of casualisation of the workforce. This
problem has only been aggravated by the outbreak of Covid-19.”
Do you agree with the given statement? Discuss any two disadvantages of casualisation of the workforce in the
light of the above statement.

35. Read the following text carefully and answer the given questions on the basis of the same and common
understanding One of the most compelling reasons for studying environmental science and management is the fact
that, in the view of many leading authorities, we are now experiencing an environmental crisis, indeed, many
authors have claimed that the present environmental crisis is unprecedented in its magnitude, pace and severity
(Park 2001). Awareness of this environmental crisis has grown since the 1970s, partly as a result of the
prominence given to major so- called ‘environmental’ disasters such as the Sahelian droughts of the 1970s and
1980s and the nuclear accident at Chernobyl in 1986.
A major assessment of the global environment published in 1999, the UNEP Global Environment Outlook 2000
Report (UNEP 1999), drew attention to two critical, recurring themes
 the fact that the global human ecosystem is threatened by grave imbalances in productivity and in the
distribution of goods and services as evidenced by the fact that a large proportion of the human population
lives in poverty and that a widening gap exists between those who benefit from economic and technological
development and those who do not
 the fact that accelerating changes are occurring at the global scale, with rates of economic and social
development outstripping progress in achieving internationally co-ordinated environmental stewardship-
with the result that improvements in environmental protection due to new technologies are being ‘cancelled
out’ by the magnitude and pace of human population growth and economic development.
Consequently, a wide range of environmental problems has emerged, those problems include anthropogenic climate
change (‘global warming’), the depletion of stratospheric ozone (the ‘ozone hole’), the acidification of surface
waters (‘acid rain’), the destruction of tropical forests, the depletion and extinction of species, and the precipitous
decline of biodiversity. Yet, while all of these problems have physical (environmental) manifestations, their causes -
and their potential solutions - are invariably bound up with human attitudes, beliefs, values, needs, desires,
expectations and behaviours. Thus, the symptoms of the environmental crisis cannot be regarded purely as physical
problems requiring solutions by environmental ‘specialists’, instead, they are intrinsically human problems and they
are intimately related to the question of what it means to be human.
(i) “Opportunity costs of negative environ-mental impact are high.” Comment.
(ii) There exists a positive correlation between environmental sustainability and economics development. Do you
agree? Give suitable reason in support of your answer.

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