CBSE Economics Class 12 Sample Paper 2 Page 1

Sample Paper 2
ECONOMICS (030)
Class XII Session 2023-24
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 ´ 10=10

1. Read the following statements carefully:

Statement 1: A tax system that is progressive applies higher tax rates to higher levels of income.
Statement 2: A regressive tax is one where the average tax burden decreases with income.
In the light of the given statements, choose the correct alternative from the following:
(a) Statement 1 is false and statement 2 is true
(b) Statement 1 is true and statement 2 is false
(c) Both statements 1 and 2 are false
(d) Both statements 1 and 2 are true

2. Assertion (A): Highway and road works announced in Kerala, Tamil Nadu, West Bengal and Assam in budget
2021.
Reason (R): Such announcement will increase revenue expenditure of the government.
Choose one of the correct alternatives given below:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is false but Reason (R) is true
(d) Assertion (A) is true but Reason (R) is false

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3. Read the following figure carefully and choose the correct pair from the alternatives given below:

(a) A - Revenue expenditure; B - Fiscal deficit

(b) A - Revenue expenditure; B - Fiscal budget
(c) A - Capital budget; B - Revenue expenditure
(d) A - Revenue expenditure; B - Capital budget

4. “Fiscal policy is a tool used by the government to stabalise the economy and promote economic growth.”
How does fiscal policy aim to stabilise the economy?
(a) By controlling interest rates (b) By regulating international trade
(c) By managing government spending and taxation (d) By controlling the money supply

5. While financing a deficit, under which measure government can print more currency?
(a) Disinvestment (b) By issuing bonds
(c) Deficit financing (d) None of these

6. On the basis of the given bars, identify the percentage change in the collection of GST in February 2019-20

(a) Negative (b) 8.5%

(c) 8.10% (d) 8.20%

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CBSE Economics Class 12 Sample Paper 2 Page 3

7. Flow of Goods and Services and factors of production across different sectors in a barter economy is known as:
(a) Monetary Flow
(b) Circular flow
(c) Capital Flow
(d) Real flow

8. Find the missing figures and choose the correct option.

Income Consu-mption TC TY MPC
(Marginal Propensity to
Consume)
0 300 –– –– ––
200 350 50 ...(i)... 0.25
400 400 ...(ii)... 200 0.25
600 450 50 200 ...(iii)...
800 500 50 200 0.25
Alternatives
(a) 50, 200, 0.25
(b) 200, 50, 0.25
(c) 50, 200, 0.50
(d) 200, 50, 0.50

9. The shackles of agriculture during the colonial rule was permanently broken by the given revolution that resulted
from the application of_______.
(i) High Yielding varieties (HYV)
(ii) mechanisation of agriculture
(iii) chemical fertilisers and pesticides
(iv) organic fertilisers and pesticides
Codes
(a) (i), (ii) and (iv) (b) (i), (ii) and (iii)
(c) (ii), (iii) and (iv) (d) (i), (iii) and (iv)

10. Current account is in ‘Balance’ when______.

(a) Receipts on current account < payments on current account
(b) Receipts on current account > payments on current account
(c) Receipts on current account = payment on current account
(d) None of these

Short Answer Questions (Q11 to Q12) 3´2=6

11. “Foreign Institutional Investors (FIIs) remained net seller in the Indian capital markets over the last few weeks”.
—The Economic Times
State and discuss the likely effects of the given statement on foreign exchange rate with reference to the Indian
Economy.

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12. Calculate intermediate consumption from the following:

(` in lakhs)
(i) Value of output 2,000
(ii) Depreciation 40
(iii) Subsidy 10
(iv) Sales tax 30
(v) Net Value Added at factor cost 1,600


o
If the Real GDP is `300 and Nominal GDP is `330, calculate the Price Index (base = 100).

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

13. Explain the concept of ‘Excess demand’ with the help of a diagram.

14. Explain the concept of ‘deficient demand’ with the help of a suitable diagram.


o
Explain any one fiscal and two monetary measures to correct the deflationary gap.

15. Explain the concept and working of multiplier with the help of a suitable schedule.

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

16. (a) Distinguish between stock and flow variables with suitable examples.
(b) Calculate Gross Domestic Product at factor cost from the following data:

(Z in crores)
(i) Gross national product at factor cost 3,750
(ii) Compensation of employees 2,000
(iii) Net exports (—)50
(iv) Profit 700
(v) Net domestic capital formation 1,000
(vi) Opening stock 150
(vii) Closing stock 200
(viii) Gross fixed capital formation 1,050
(ix) Interest 600
(x) Rent 400
(xi) Factor income from abroad 20


o
Explain the precautions that should be taken while estimating national income by value added method.

17. Read the following text carefully and discuss briefly the relevant function of the Central Bank, indicated.
The Reserve Bank of India (RBI) is the central bank of India whose primary function is to manage and govern
the financial system of the country. It is a statutory body established in the year 1935 under the Reserve Bank of

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CBSE Economics Class 12 Sample Paper 2 Page 5

India Act, 1934. The central bank regulates the issue and supply of the Indian rupee. It also looks after the central
government’s money. The central bank plays the role of the bankers’ bank and regulates the banking sector. It also
plays an important role in India’s development story by supporting the government in its developmental projects
and policies.

Section B -Indian Economic Development

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

18. Statement 1: Environment is able to perform its functions easily as long as the demand on these functions is within
its carrying capacity.
Statement 2: The Environment (Protection) Act was in passed 1990.
In the light of the given statements, choose the correct alternative from the following:
(a) Statement 1 is false and statement 2 is true (b) Statement 1 is true and statement 2 is false
(c) Both statements 1 and 2 are false (d) Both statements 1 and 2 are true

19. Assertion (A): Disguised unemployment is present in India.

Reason (R): Agricultural productivity at the margin is close to zero.
In the light of the given statements, choose the correct alternative from the following:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is false but Reason (R) is true
(d) Assertion (A) is true but Reason (R) is false

20. Jobless growth leads to unemployment because:

(a) GDP growth is slow
(b) Labour refuses to migrate
(c) Growth is due to technology
(d) Labour is very expensive

21. “Green revolution was a major reason of rise in productivity of farming”. What is/ are the advantage(s) of
conventional farming methods?
(a) Higher output
(b) Cost effective
(c) Wider range
(d) All of these

22. Due to the recent efforts of which international body the Indian government, initiated the modernization of
informal sector?
(a) WTO
(b) World Bank
(c) G-20
(d) International Labour ganisation

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23. When extraction is above the rate of regeneration of the resource and the wastage are outside the absorptive
capacity of the environment, then environment fails to perform its one of the vital function. What is that function?
(a) It supplies resources (b) It assimilates waste
(c) It sustains life (d) It provides aesthetic services

24. Along with horticultural crops, golden revolution caused an increase in the production of_______.
(a) milk (b) honey
(c) livestock (d) dry fruits

25. Small Finance Banks had mobilised deposits of 82,488 crores and extended credit of 90,576 crores to small and
marginal farmers and Micro, Small and Medium Enterprises (MSMEs) by the end of FY 2019-20. How will it
affect the economy?
(a) Economic strengthening of rural areas
(b) Financial inclusion of people
(c) Growth of MSMEs and agriculture sector become faster
(d) All of these

26. From the given image, it is clear that outsourcing from India is not always an advantage for developed countries.
Select the reason(s) for the same.

(a) Leads to managerial interference (b) Leads to unemployment in their country

(c) Neither (a) nor (b) (d) Both (a) and (b)

27. From the set of events/systems given in Column I and corresponding relevant fact given in Column II, choose the
correct pair of statement:
Column I Column II
A. Economic reforms in China (i) 1988
B. Great Leap Forward Campaign (ii) 1968
C. Great Proletarian Cultural Revolution (iii) Between 1980 - 1984
D. Special Economic Zones (iv) 1975
Alternatives:
(a) C - (iii) (b) D - (iv)
(c) A - (i) (d) B - (ii)

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Short Answer Questions (Q28 to Q29) 3´2=6

28. Elaborate the exploitative nature of the colonial government in India with the help of suitable examples.

29. Why were the benefits of Green Revolution restricted to few states and few crops in initial stages of planning?


o
How did the government promote regional equality in industrial development?

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

30. (a) Interpret the given picture on account of current environmental challenges.

(b) What do you mean by biocomposting? How is it helpful in promoting sustainable development?

31. Evaluate the role of the rural banking system in India.

o
“Is it possible to develop Information Technology as an alternate livelihood option”? Give reasons.

32. Enlist all the factors involved in the introduction of the economic reforms by way of the announcement of the
New Economic Policy (NEP).

Long Answer Questions (Q33 to Q34) 6 ´ 2 = 12

33. Suggest measures to make the rural areas in India more vibrant (Include two success stories of rural development
experiments carried out in India).


o
The following table shows distribution of workforce in India for the year 1972-73. Analyse it and give reasons for
the nature of workforce distribution.

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Place of Residence Workforce (in millions)

Male Female Total
Rural 125 69 195
Urban 32 7 39

34. Read the following text carefully and answer the given questions on the basis of the same and common
understanding:
The China-Pakistan Economic Corridor (CPEC) has deepened the decades-long strategic relationship between the
two nations. But it has also sparked criticism for burdening Pakistan with mountains of debt and allowing China
to use its debt-trap diplomacy to gain access to strategic assets of Pakistan.
The foundations of CPEC, part of China’s Belt and Road Initiative, were laid in May 2013. At the time, Pakistan
was reeling under weak economic growth. China committed to play an integral role in supporting Pakistan’s
economy.
Pakistan and China have a strategic relationship that goes back decades. Pakistan turned to China at a time when it
needed a rapid increase in external financing to meet critical investments in hard infrastructure, particularly power
plants and highways. CPEC’s early harvest projects met this need, leading to a dramatic increase in Pakistan’s
power generation capacity, bringing an end to supply-side constraints that had made rolling blackouts a regular
occurrence across the country.
Pakistan leaned into CPEC, leveraging Chinese financing and technical assistance in an attempt to end power
shortages that had paralysed its country’s economy. Years later, China’s influence in Pakistan has increased at an
unimaginable pace.
China as Pakistan’s Largest Bilateral Creditor: China’s ability to exert influence on Pakistan’s economy has grown
substantially in recent years, mainly due to the fact that Beijing is now Islamabad’s largest creditor. According to
documents released by Pakistan’s Finance Ministry, Pakistan’s total public and publicly guaranteed external debt
stood at $44.35 billion in June 2013, just 9.3 per cent of which was owed to China. By April 2021, this external
debt had ballooned to $90.12 billion, with Pakistan owing 27.4 per cent - $24.7 billion - of its total external debt
to China, according to International Monetary Fund (IMF).
Additionally, China provided financial and technical expertise to help Pakistan build its road infrastructure,
expanding north-south connectivity to improve the efficiency of moving goods from Karachi all the way to Gilgit-
Baltistan (PoK). These investments were critical in better integrating the country’s ports, especially Karachi, with
urban centers in Punjab and Khyber-Pakhtunkhwa provinces.
Despite power asymmetries between China and Pakistan, the latter still has tremendous agency in determining
its own policies, even if such policies come at the expense of the long-term socio- conomic welfare of Pakistani
citizens.
(a) Outline and discuss any two economic advantages of China Pakistan Economic Corridor (CPEC) accruing to
the economy of Pakistan.
(b) Analyse the implication of bilateral ‘debt-trap’ situation of Pakistan vis-a-vis the Chinese economy.


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