NAVODAYA VIDYALAYA SAMITI (SHILLONG REGION)

PRE -BOARD:2 Session 2022-23

ECONOMICS (030)
Class XII
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.Which of the following component(s) is/are not included in money supply?

(a) Stock of gold with RBI (b) Currency with private individuals
(c) Currency with business firms (d) All of these

2. Read the following statements-Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Market price is the difference between factor cost and net indirect tax.
Reason (R): Depreciation is added to net investment to convert into gross investment.
Alternatives:
(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

3. Read the following statements-Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Government should reduce subsidies to curb revenue deficit.
Reason (R): Providing subsidies on a LPG cylinder is a part of revenue expenditure.
Alternatives:
(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

4. The two key constituents of aggregate demand are________.

(a) Investment and growth (b) Consumption and Investment
(c) Both (a) and (b) (d) Neither (a) nor (b)
OR
Which of the following is not a reason for excess demand?
(a) Deficit financing (b) Fall in the propensity to consume
(c) Rise in aggregate demand (d) Increase in investments

5.Foreign exchange transaction which are independent of other transaction in the balance of
payment account are called:
(a)Current transaction (b)Capital transaction
(c)Autonomous transaction (d) Accommodating transaction

6. Read the following statements carefully:

Statement 1: APC is the ratio of consumption expenditure to total income, i.e., APC C = Y
Statement 2: MPC is the ratio of change in consumption to change in income, i.e., MPC CY∆∆ =
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

7. Read the following statements carefully:

Statement 1: Recovery of loans, borrowing and disinvestment etc. are the examples of revenue
receipts.
Statement 2: The receipts which neither create any liability nor lead to any reduction in asset are
called revenue receipts.
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

8. Find out odd one out among the following ,with respect to the “ Balance of payment” in India.
(a) Investment by Indian investor under the Make in India programme.
(b) Loan received from Japan.
(c) Investment from abroad
(d) Purchase of machinery from abroad.

9. If the Marginal Propensity to Consume is greater than Marginal Propensity to Save, the value of
the multiplier will be:
(a) less than 2 (b) equal to 2 (c) equal to 5 (d) greater than 2

10. Supply of money refers to:

(a) currency held in the government account
(b) currency held by Reserve Bank of India (RBI)
(c) currency held by the public
(d) currency held by the public and demand deposits with commercial banks

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

11.Calculate ‘value of output’ from the following data:

Net value added at factor cost 100
 Intermediate consumption 75

Excise duty 20
Subsidy 5
Consumption of fixed capital 10

12. What is marginal propensity to consume? How is it related to investment multiplier?

OR
Explain all the changes that will take place in an economy when aggregate demand is not equal to
aggregate supply.

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

13. Explain how the following measures can be used to correct inflation?
(a) Bank Rate, (b) Cash Reserve Ratio
OR
Explain “Bankers” bank function of the Central Bank.

14. How does giving incentives for exports influence foreign exchange rate? Explain.

15.Explain the concept of fiscal deficit in a government budget. What does it indicate?

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

16. (a) Calculate GDPMP from the given data: 4

Rs in
Crore
i Net factor income to abroad 10
ii Indirect tax 240
iii Net exports 40
iv Private final consumption expenditure 1200
v Consumption of fixed capital 70
vi Opening stock 20
vii Closing stock 10
viii Net current transfers to abroad -30
ix Subsidies 40
x Net domestic capital formation 220
xi Government final consumption expenditure 200
(b) Explain how shall the payment of electricity bill by a school will be treated as a intermediate
expenditure ,which will be not included while estimating National Income.So it will be excluded.

17. (a)Calculate Investment expenditure from the following data about an economy which is in
equilibrium.
(i)National Income =1000
(ii)Marginal propensity to save =0.2
(iii)Autonomous consumption expenditure =100
(b)Explain the equilibrium level of national income with the help of Saving and Investment
Curves.
 Section B -Indian Economic Development

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

18. Read the following statements carefully:

Statement 1: Cultural Revolution in China is also known as Great Leap Forward Cultural
Revolution.
Statement 2: In cultural revolution, students and professionals were sent to work and learn from the
foreign countries.
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. Name the state which is held as a success story in the efficient implementation of milk
cooperatives.
(a) Gujarat (b) Maharashtra (c) Andhra Pradesh (d) Punjab

20. Identify the correct pair from the following Column I and Column II and choose the correct
alternative:

(a) C - (iii) (b) D - (iv) (c) A - (i) (d) B - (ii)

21.India enterned the______stage of demographic transition after the year 1921.

(a) second (b) fourth (c) fourth (d) third

OR
From the set of events/systems given in Column I and corresponding relevant fact given in Column
II, choose the correct pair of statement:

22.Match the situations given in Column I with their respective implications given in Column II and
choose the correct alternatives
23.Read the following statements-Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Second Five Year Plan emphasize on the establishment of heavy industries.
Reason (R): Third Five Year Plan introduced the concept of import substitution as a strategy of
industrialization. Alternatives:
(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
OR
Read the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): International monetary fund was set in 1944.
Reason (R): To promote international monetary cooperation through a permanent institution which
provides machinery for consultation and collaboration on international monetary problems.
Alternatives:
(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

24.States where land reforms were successful on account of they being committed to the policy of
‘land to the tiller’
are:
(a) Punjab and Kerala (b) Kerala and West Bengal
(c) Andhra Pradesh and West Bengal (d) Kerala and Andhra Pradesh

25. Which of the following is not true for small scale industries?
(a) SSI is capital intensive and therefore, increases productivity.
(b) SSI is labour intensive and therefore, employment oriented.
(c) SSI shows locational flexibility and is therefore, equality oriented.
(d) SSI needs small investment and is therefore, equity oriented.

26. Read the following statements carefully:

Statement 1: Seasonal workers are the worst affected by seasonal unemployment in India.
Statement 2: Population is the total number of people who reside in a particular locality at a
particular point of time.
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

27. Arrange the following events of China in chronological order and choose the correct alternative:
(i) Special Economic Zones
(ii) Great Proletarian Cultural Revolution
(iii)Commune System
(iv) Establishment of People’s Republic of China
Choose the correct alternative:
(a) (iv), (i), (ii), (iii) (b) (iv), (iii), (ii), (i) (c) (ii), (iv), (iii), (i) (d) (ii), (iv), (i), (iii)

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

28.Define organic farming.Mention any three limitations of organic farming.

29.Defend or refute the following statement with valid explanation:

‘Disguised unemployment is a common form of unemployment in rural India’
OR
Critically evaluate the role of rural banking system in the process of rural development in
India.

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

30. What do you mean by Globalisation? Give its main features.

OR
Highlight the main features of Indian economy on the eve of independence

31.Answer the following questions on the basis of the following data:

(a) Comment upon the People Below Poverty line among the three countries.
(b) Comment upon the percentage of Undernourished Children among China and Pakistan.

32. “The government should continue with agricultural subsidies.” Do you agree? Give reason in
support of your answer.
OR
“Globalisation has produced some negative results for India.” Explain.

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

33.What is rural development? “Co-operative marketing is considered as the third aspect of

government initiative.” Explain.
 OR

(a)“Micro-credit programmes are playing vital role in meeting credit requirements of the poor.”
Elaborate.

(b)Explain the principal role of human capital formation in accelerating the rate of economic growth.

34.Read the following text carefully and answer the given questions on the basis of the same and
common understanding: People, generally are emotionally attached to their place of birth. But
millions of people leave their places of birth and residence. There could be variety of reasons. These
reasons can be put into two broad categories, i.e., push factor, these cause people to leave their place
of residence or origin; and pull factors, which attract the people from different places.In India,
people migrate from rural to urban areas mainly due to poverty, high population pressure on the
land, lack of basic infrastructural facilities like healthcare, education, etc. Apart from these factors,
natural disasters such as flood, drought, cyclonic storms, earthquake, tsunami, wars and local
conflicts also give extra push to migrate. On the other hand, there are pull factors which attract
people from rural areas to cities. The most important pull factor for majority of the rural migrants to
urban areas is the better opportunities, availability of regular work and relatively higher wages.
Better opportunities for education, better health facilities and sources of entertainment, etc., are also
quite important pull factors.Hence, migration is a response to the uneven distribution of
opportunities over space. People tend to move from place of low opportunity and low safety to the
place of higher opportunity and better safety. This, in turn, creates both benefits and problems for
the areas, people migrate from and migrate to. Consequences can be observed in economic, social,
cultural, political and demographic terms.

(a) Explain, why in India people mainly migrate from rural to urban areas?

(b) Explain, how expenditure on migration is a source of human capital formation?