Podar International School, Rajkot
Time : 1 Hour STD 12 Commerce Economics Total Marks : 25
Chapter Test
* Choose The Right Answer From The Given Options.[1 Marks Each] [6]
1. Which variables are defined as any quantity measured at a particular point of
time?
a. Stock.
b. Flow.
c. Investment.
d. Inventory.
2. Building, plant and machinery are capital goods. In the light of this statement,
following are the characteristics of capital goods excluding:
a. They are of high value.
b. They are the assets of the company.
c. They are used for less than one year.
d. They are used in production process.
3. Gross Investment = Net Investment + ______.
a. Net Indirect Tax.
b. Reserve.
c. Depreciation.
d. None of these.
4. Which is not a characteristic of a service?
a. Intangibility.
b. Variability.
c. Inseparability.
d. Imperishability.
5. _______ refers to the flow of money across different sectors of the economy.
a. Real flow.
b. Circular flow.
c. Money flow.
d. Both (a) and (c).
6. Which of the following is not an example of depreciation?
a. A plant producing rubber shoes becomes obsolete when demand shift
from rubber shoes to leather shoes.
b. A plant producing black and white televisions becomes obsolete when
technology is discovered to produce colour televeisions.
c. Fall in the market value of the assets during the period of economic
recession.
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d. Fall in the value of your school building.
* a statement of Assertion (A) is followed by a statement of Reason (R). [4]
Choose the correct option.
7. Assertion (A): Expenditure on maintenance of machinery is an intermediate
expenditure.
Reason (R): All expenditures on repair and maintenance incurred by the firm are
treated as part of intermediate consumption.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation
of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false
8. Assertion (A): Unexpected obsolescence is an element of depreciation.
Reason (R): Loss of value of fixed assets owing to unexpected obsolescence is
called capital loss.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation
of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is False but Reason (R) is True
d) Both of the statements are false
9. Assertion (A): Subsidy is a transfer payment.
Reason (R): Subsidy contributes to current flow of goods and services.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation
of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True
10. Assertion (A): Depreciation is also termed as consumption of fixed capital
Reason (R): Depreciation refers to that value of fixed capital that is used up in
the process of production.
Alternatives:
a) Both Assertion and Reason are true and Reason (R) is the correct explanation
of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
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explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True
* Given Section consists of questions of 3 marks each. ( Write Any 3 ) [9]
11. Distinguish between stocks and flows. Give an example of each.
12. Giving reason, classify the into intermediate or final goods.
Coal used by consumer households.
13. Giving reason, classify the into intermediate or final goods.
Cotton used by a cloth mill.
14. Classify the into consumer, intermediate or capital goods.
Passenger bus service used by a consumer household.
15. What is meant by circular flow of income?
* Given Section consists of questions of 6 marks each. [6]
16. Describe the four major sectors in an economy according to the macroeconomic
point of view.
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