Dear students, if you are in Class 12 for the academic year 2024-25, this information is very important for you. Today, we are going to share a CBSE Board Class 12 Economics Sample Paper through this website. This sample paper can be extremely useful for your exam, and with the help of these sample papers, you can score well in your examination.
Note: CBSE Board Class 12 Economics Sample Paper has been created by experienced teachers, and some questions from it may appear in your exam.
CBSE Board Class 12 Economics Sample Paper (Set -3)
Class – 12th Exam – 2024 – 25
Economics (030)
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 Type Questions of 1 mark each.
3. This paper contains 4 Short Answer Type Questions of 3 marks each to be answered in 60 to
80 words.
4. This paper contains 6 Short Answer Type Questions of 4 marks each to be answered in 80 to
100 words.
5. This paper contains 4 Long Answer Type Questions of 6 marks each to be answered in 100 to
150 words.
SECTION-A – Macro Economics
1. Read the following statements carefully:
Assertion (A): Involuntary unemployment exists when people who are willing and able to work at the prevailing wage rate cannot find employment.
Reason (R): Involuntary unemployment occurs due to insufficient aggregate demand in the economy, leading to an equilibrium below full employment.
Choose the correct option from those given below:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation
of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but 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.
2. “In the Union Budget 2023-24, the government has increased its allocation for healthcare and education sectors while reducing expenditure on defense. This shift aims to promote human capital development and achieve a more equitable distribution of income.”
Source: [Union Budget Highlights, 2023-24](https://www.indiabudget.gov.in/doc/
budget_highlights.pdf)
Which budgetary objective is the government primarily focusing on with these changes?
(A) Reallocation of Resources
(B) Economic Stability
(C) Managing Public Enterprises
(D) Reducing Fiscal Deficit
3. The balance of payments is a comprehensive and systematic record of all ________
transactions made between residents of a country and the rest of the world over a specified period.
Choose the correct option to fill in the blank.
(A) Economic
(B) Political
(C) Cultural
(D) Social
4. According to the National Statistical Office, the Gross Domestic Product (GDP) at market price is `200 lakh crore, and Net Factor Income from Abroad (NFIA) is (-5) lakh crore. The value of the ________ would be `195 lakh crore.
Choose the correct option to fill in the blank.
(A) Gross National Product (GNP)
(B) Net Domestic Product (NDP)
(C) Net National Product (NNP)
(D) Net Domestic Product at Factor Cost
5. From the given diagrams, identify the correct option that indicates the ‘Marginal Cost Curve’ passing through the origin drawn at a particular slope.
(A) (iii)
(B) (iv)
(C) (ii)
(D) (i)
6. The level of income at which Aggregate Demand equals Aggregate Supply is called the ______.
Choose the correct option to fill in the blank.
(A) Equilibrium Level of Income
(B) Break-even Point
(C) Full Employment Level
(D) Inflationary Gap
7. Read the following statements carefully:
Statement 1: A balanced budget occurs when total government revenues equal total government expenditures in a fiscal year, resulting in neither a surplus nor a deficit.
Statement 2: Running a budget deficit can stimulate economic growth during a recession by increasing aggregate demand through higher government spending or lower taxes.
In light of the given statements, choose the correct option from the following:
(A) Both Statements 1 and 2 are false.
(B) Statement 1 is true and Statement 2 is false.
(C) Both Statements 1 and 2 are true.
(D) Statement 1 is false and Statement 2 is true.
8. The balance of payments is a comprehensive record of all economic transactions between the residents of a country and the rest of the world. It is divided into the current account and the _______ account.
Choose the correct option to fill in the blank.
(A) Financial
(B) Capital
(C) Trade
(D) Income
9. Read the following statements carefully:
Statement 1: Nominal GDP measures the value of all final goods and services produced within a country’s borders in a given period using current prices, without adjusting for inflation, thus reflecting changes in both price and output levels.
Statement 2: Real GDP is calculated by valuing output in a given year at the prices prevailing in the base year, thereby adjusting for changes in the price level and providing a measure of actual economic growth.
In light of the given statements, choose the correct option from the following:
(A) Both Statements 1 and 2 are true.
(B) Statement 1 is true and Statement 2 is false.
(C) Statement 1 is false and Statement 2 is true.
(D) Both Statements 1 and 2 are false.
10. Based on the given diagram:
The trade balance in services during January 2024 reflects a __________ of USD _____
billion.
(Choose the correct option to fill up the blank)
(A) surplus, 16.75
(B) surplus, 18.90
(C) deficit, 16.75
(D) deficit, 18.90
11. What are official reserve transactions (ORT)? Explain their importance in the Balance of Payments Account.
OR
Explain why there is a rise in demand for foreign exchange when its price falls.
12. What is depreciation of Rupee? What is its likely impact on Indian imports and how?
13. Suppose in the budget, the government proposed to raise the excise duty on cement. It also proposed to raise the income tax on individuals earning more than rupees one crore per annum.
(a) Identify and explain the type of taxes proposed by the government.
(b) Was the objective only to earn revenue for the government?
(c) What possible welfare objective could the government be considering?
14. “Economists are generally concerned about the rising Marginal Propensity to Save (MPS) in an economy.” Why so? Explain.
OR
Explain all the changes that take place in an economy, when AD is not equal to output.
15. Read the following text carefully :
The barter system lacked a store of value, making future transactions difficult. While gold and diamonds could store value, they were not widely used due to their scarcity, high transaction costs, lack of liquidity, and divisibility issues, making them impractical for daily exchanges.
Why were gold and diamonds not widely used as a store of value under the barter system
despite their ability to retain value?
16. Read the following text carefully :
Underemployment equilibrium occurs when an economy is in equilibrium but operates below full employment. As Keynes explained, this situation arises when aggregate demand (AD) is less than the output (Y) at full employment. In the diagram, point X represents underemployment equilibrium, where AD equals Y, but the output (OQ) is less than full employment output (OF). The gap AB represents deficient demand, and QF reflects idle capacity. An increase in investment boosts AD, production, and employment, shifting the equilibrium from point X to full employment equilibrium (point F), where AD equals Y at full employment.
(a) What is underemployment equilibrium, and how does it affect the economy?
(b) How does an increase in investment help in achieving full employment equilibrium?
17. (a) From the following data, calculate National Income by Income Method:
(b) “India’s GDP is expected to expand 7.5% in 2019-20: World Bank” —The Economic Times Does the given statement mean that welfare of people of India increase at the same rate?
Comment with reason.
OR
(a) On the basis of the following data about an economy which constitutes of only two firms,
find out Value added by firms A and B.
(b) If the Real Gross Domestic Product is `200 and the Nominal Gross Domestic Product is `210, calculate the Price Index (base = 100).
Section-B – Indian Economic Development
18. Observe the given picture carefully and answer the question that follows:
Roadside vending is an increasing variety of_____unemployment.
(A) informal
(B) formal
(C) Neither (A) nor (B)
(D) Both (A) and (B)
19. Read the following statements carefully:
Statement 1: Human capital refers solely to the educational qualifications of individuals.
Statement 2: Investments in health and education are crucial for human capital formation.
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.
20. Read the following statements carefully: Assertion (A) and Reason (R). Choose the correct option from those given below:
Assertion (A): Credit facilities in rural areas are predominantly provided by cooperative
societies.
Reason (R): Cooperative societies offer easier access to credit for farmers and rural entrepreneurs.
Options:
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but 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.
21. Employment in the informal sector is characterized by ______ and ______ for workers, often leading to precarious job conditions.
Choose the correct option to fill up the blank.
(A) high salaries; extensive benefits
(B) formal contracts; job security
(C) technological advancements; skilled labor
(D) lack of job security; minimal benefits
22. Sustainable development aims to _________.
Which of the following is/are correct ?
(i) Meet present needs
(ii) Preserve resources for future generations
(iii) Enhance economic growth at any cost
(iv) Balance economic, social, and environmental goals
Option :
(A) (i) and (ii)
(B) (ii) and (iii)
(C) (i), (ii), and (iv)
(D) (i), (ii), (iii), and (iv)
23. In comparison with Pakistan, India has achieved higher levels of _______.
Which of the following is correct ?
(A) Military expenditure
(B) Human development indicators
(C) Trade deficits
(D) Population growth rates
24. Identify which of the following statements is correct about the industrial sector in India on the eve of independence.
Which of the following is correct ?
(A) The industrial sector in India was significantly underdeveloped due to colonial policies.
(B) India had a robust manufacturing base that rivaled British industries.
(C) The majority of industrial growth was driven by indigenous entrepreneurs.
(D) Industrial infrastructure was well-developed across rural areas.
25. Which of the following was a common objective of India’s Five Year Plans between 1950 and 1990?
Which of the following is correct ?
(A) Promoting rapid industrialization
(B) Reducing agricultural output
(C) Increasing dependency on imports
(D) Decreasing public sector investments
26. “In 1991, India faced a severe economic crisis characterized by high fiscal deficits, a depleting foreign exchange reserve, and rising inflation. In response, the government introduced the New Economic Policy focusing on liberalization, privatization, and globalization to integrate the Indian economy with the global market.”
Which of the following was a key component of the New Economic Policy of 1991?
(A) Nationalization of all private enterprises
(B) Reduction of trade barriers and encouragement of foreign investment
(C) Increase in government subsidies for public sector units
(D) Implementation of protectionist trade policies
27. Which of the following are considered sources of human capital formation in India?
Which of the following is correct ?
(A) Natural resources and capital goods
(B) Education and healthcare services
(C) Infrastructure and technology
(D) Foreign investment and trade
28. Explain the concept of ‘Privatisation’. Throw light on the “different status designated to the Public Sector enterprises (PSEs)”.
29. Explain the ‘Permit license raj’.
OR
Explain the ‘policy of protection’ in industries.
30. The Infant Mortality Rate (IMR) and percentage of undernourished children highlight health disparities. Pakistan has an IMR of 66 per 1000 live births, much higher than China’s IMR of 9. Similarly, 45% of children in Pakistan are undernourished compared to just 9% in China, reflecting significant differences in health outcomes.
Answer the following questions.
(a) Infant Mortality Rate (IMR) in Pakistan
(b) Percentage of Undernourished Children among the given two countries.
31. Mention any four features of small scale industries.
OR
How is agricultural diversification helpful for farmers? Explain.
32. Analyse the growth of GDP and changing structure of employment.
33. Read the following text carefully and answer the given questions on the basis of the same and common understanding:
Chipko Movement, also called Chipko Andolan, non-violent social and ecological movement by rural villagers, particularly women, in India in the 1970s, aimed at protecting trees and forests slated for government-backed logging. The movement originated in the Himalayan region of Uttarakhand (then part of Uttar Pradesh) in 1973 and quickly spread throughout the Indian Himalayas. The Hindi word Chipko means “to hug” or “to cling to” and reflects the demonstrators’ primary tactic of embracing trees to impede loggers. The interior roads built for the conflict attracted many foreign-based logging companies that sought access to the region’s vast forest resources. Although the rural villagers depended heavily on the forests for subsistence both directly, for food and fuel, and indirectly, for services such as water purification and soil stabilization-government policy prevented the villagers from managing the lands and denied
them access to the lumber. Many of the commercial logging endeavors were mismanaged, and the clear-cut forests led to lower agricultural yields, erosion, depleted water resources and increased flooding throughout much of the surrounding areas.
(a) What was Chipko Movement? How were villagers depended upon forest for their survival?
(b) How have people tried to prevent indiscriminate cutting of trees? Discuss the two
movements started by them for achieving the objective.
34. “Global CO2 levels hit new record in 2017.” — The United Nations
(a) Why is the world faced with an environmental crisis?
(b) Why do environmental problem emerge in recent times?
OR
“Existence of widespread unemployment in India is the cumulative result of many causes.”
Explain any four main causes of unemployment in India.