CBSE Board Class 12 Economics Sample Paper (Set -10)

Harshit Rastogi
CBSE Board Class 12 Economics Sample Paper (Set -10)

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 -10)

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): A deficit in the balance of payments occurs when the total outflow of foreign exchange exceeds the total inflow.
Reason (R): A balance of payments deficit can be corrected by increasing exports and decreasing imports.

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. “An economy is experiencing a situation where firms are producing more goods than are being sold, leading to an unplanned accumulation of inventories. This unintentional stock build-up directly affects the calculation of national income, as it reflects changes in inventory investment within the economy.”

Source: [National Statistical Office Report, 2023](http://mospi.gov.in/nsoreport-2023)

Which component of the national income accounts is directly impacted by this unplanned inventory accumulation?

(A) Depreciation
(B) Change in Stock (Inventory Investment)
(C) Gross Fixed Capital Formation
(D) Net Exports

3. An increase in the Cash Reserve Ratio (CRR) mandated by the central bank will ________ the lending capacity of commercial banks by requiring them to hold more reserves.

Choose the correct option to fill in the blank.

(A) Increase
(B) Decrease
(C) Not affect
(D) Double

4. If the Marginal Propensity to Save (MPS) is 0.25, the value of the investment multiplier is ________.

Choose the correct option to fill in the blank.

(A) 4
(B) 2
(C) 5
(D) 1.25

5. Choose the correct alternatives to be filled in given blanks A and B.

(A) Low level of investment and low level of income
(B) Low level of income and low level of investment
(C) Low level of investment and low savings
(D) Low mobilisation of savings and low level of investment

6. Under the fixed exchange rate system, the value of the currency is ______ by the government or monetary authority.

Choose the correct option to fill in the blank.

(A) Determined by Market Forces
(B) Allowed to Float Freely
(C) Fixed or Pegged
(D) Ignored

7. Read the following statements carefully:
Statement 1: Intermediate goods are those goods that require further processing before they are ready for final use, and their values are not included separately in the calculation of Gross Domestic Product to avoid the problem of double counting.
Statement 2: Depreciation refers to the decrease in the value of fixed capital assets due to wear and tear over time, and it is added to Net Domestic Product to obtain Gross Domestic Product at factor cost.

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 false and Statement 2 is true.
(C) Both Statements 1 and 2 are false.
(D) Statement 1 is true and Statement 2 is false.

8. The central bank employs various monetary policy tools to regulate the money supply in the economy. One such tool is the _______ rate, which is the interest rate at which commercial banks can borrow short-term funds from the central bank against government securities.

Choose the correct option to fill in the blank.

(A) Bank
(B) Repo
(C) Reverse Repo
(D) Prime Lending

9. Read the following statements carefully:
Statement 1: The Average Propensity to Consume (APC) is the fraction of total income that is consumed, calculated as total consumption divided by total income, reflecting the overall consumption behaviour in the economy.
Statement 2: As income increases, the APC remains constant because consumption and income increase by the same absolute amount, indicating a linear consumption function.

In light of the given statements, choose the correct option from the following:

(A) Statement 1 is false and Statement 2 is true.
(B) Both Statements 1 and 2 are true.
(C) Statement 1 is true and Statement 2 is false.
(D) Both Statements 1 and 2 are false.

10. If exports in services during April-January 2023-24 were to increase by 7%, the new export  value would be closest to:

(A) 300.46 billion
(B) 284.45 billion
(C) 294.16 billion
(D) 305.16 billion

11. From the information given below, find Net Value Added at Factor Cost.

12. Giving reasons, explain whether the given statements are true or false.

(i) Current account of balance of payments account records only export and import of goods and services.
(ii) Foreign investments are recorded in the capital account of balance of payments.

OR

What is meant by flexible exchange rate system and fixed exchange rate systems?

13. Read the following statements carefully and write true or false with a reason.

(i) Excess demand raises the market value of output.
(ii) Prices and output increase in a situation of inflationary gap in an economy.

14. Consider the information given below:
(i) Autonomous consumption = Rs 5,000
(ii) Marginal Propensity to Save (MPS) = 0.2
(iii) Investment = Rs 20,000
On the basis of the above information’s, calculate
(a) Equilibrium level of national income
(b) Investment multiplier

15. ‘Lack of store of value’ was a major problem under barter system, but goods like diamond, gold can be easily stored for future use. Then why this was not a popular mean under barter system?

OR

Explain the ‘unit of account’ function of money. How has it solved the related problem created by barter?

16. Read the following text carefully :
Export receipts are not part of net factor income from abroad as they represent payments for domestically produced goods and services sold internationally. In national income estimation, corporate tax is excluded as a transfer payment, machinery purchase is included as investment, and uniforms for nurses are treated as intermediate consumption.

(i) Why are export receipts not a part of net factor income from abroad?
(ii) Giving reasons explain how should the following be treated in estimation of national income
(a) Payment of corporate tax by a firm
(b) Purchase of machinery by a factory for own use
(c) Purchase of uniforms for nurses by a hospital

17. (i) The figure given below explains the situation of mounting fiscal deficit in context of Indian economy.

Explain any three implications of large fiscal deficit.

Source GOI Controller General Accounts

(ii) Explain how government budget can be helpful in bringing economic stabilisation in the economy.

OR

(i) In the context of government budget, giving reasons, explain whether the following are a revenue receipt or a capital receipt.
(a) Interest received on the loans given to Sri-Lankan government during Covid-19
(b) Sale of public sector undertaking
(ii) Public expenditure is necessary for the development of the country. In the light of the statement, explain any two significance of public expenditure.

S-B – Indian Economic Development

18. Following image indicates which of the following source of human capital formation?

Above image indicates which of the following source of human capital formation?
(A) Investment in health
(B) Migration
(C) Investment in education
(D) On-the-job training

19. Read the following statements carefully:
Statement 1: Demonetization was a core component of the LPG (Liberalisation, Privatization, Globalisation) policy.
Statement 2: The Goods and Services Tax (GST) was introduced to simplify the indirect tax structure in India.

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): Human development and human capital formation are identical concepts.
Reason (R): Both focus exclusively on improving the educational qualifications of individuals.

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. Agricultural diversification in rural areas aims to ______ dependence on a single crop and ______ income sources, thereby enhancing economic stability for farmers.

Choose the correct option to fill up the blank.

(A) increase; limit
(B) maintain; stabilize
(C) reduce; diversify
(D) expand; consolidate

22. Which of the following are effects of economic development on the environment?

Which of the following is/are correct ?

(i) Deforestation
(ii) Air pollution
(iii) Water contamination
(iv) Biodiversity loss

Option :

(A) (i) and (ii)
(B) (i), (ii), and (iii)
(C) (ii), (iii), and (iv)
(D) (i), (ii), (iii), and (iv)

23. Which of the following factors have contributed to China’s rapid economic growth compared to India?

Which of the following is correct ?

(A) Lower investment in infrastructure
(B) Less emphasis on education
(C) Strong government planning and export-oriented policies
(D) Restricted foreign investment

24. Which of the following were significant challenges faced by the agricultural sector in India on the eve of independence?

Which of the following is correct ?

(A) High levels of mechanization
(B) Low productivity and dependence on monsoons
(C) Excessive use of fertilizers
(D) Surplus agricultural produce

25. Identify which of the following policies were part of the agricultural strategies in India’s Five Year Plans.

Which of the following is correct ?

(A) Green Revolution
(B) Nationalization of banks
(C) Import substitution
(D) Establishment of Special Economic Zones

26. “Liberalisation refers to the relaxation of previous government restrictions, usually in areas of social and economic policies. In the Indian context, it involved deregulation of industries, reduction in tariffs, and allowing private sector participation in sectors previously reserved for the public sector.”

What was the primary aim of liberalisation in India?

(A) To increase government control over the economy
(B) To make the economy more market-oriented and increase efficiency
(C) To isolate the Indian economy from global influences
(D) To restrict the entry of multinational corporations

27. Identify which of the following statements correctly describe the relationship between human capital and economic development.

Which of the following is correct ?

(A) Human capital has no significant impact on economic development
(B) Increased human capital leads to higher unemployment rates
(C) Human capital enhances productivity and drives economic growth
(D) Economic development reduces the need for human capital investment

28. ‘Farmers resort to onion distress sale’, an article published by Orissa Post on 17th May, 2021. On account of the figure given below, give the meaning of ‘distress sale’. Also explain any two obstacles that hinders the mechanism of agricultural marketing.

29. How does finance sector be regularised so that the objective of rural development can be achieved?

OR

Defend or refute the statement with valid explanation.

“Population explosion and the advent of industrial revolution have resulted in environmental crisis.”

30. Compare and analyse the ‘women worker population ratio’ in rural and urban areas based on following information.

Worker Population Ratio in India, 2017-2018

31. State whether the following statements are true or false, with valid arguments.

(i) It was quintessential for a developing country like India to pursue the goal of self-reliance on the eve of independence.
(ii) Indian government followed inward looking trade policy before initiation of economic reforms in 1991.

32. (i) Define a plan.
(ii) “The New Economic Policy is said to be liberal.” Comment.

OR

Discuss briefly the condition of agricultural sector at the time of independence.

33. Read the following text carefully and answer the given questions on the basis of the same and common understanding.
Comparative development of India and its neighbours is an important knowledge to possess as an Indian citizen.

As a rational citizen of a country, it is crucial to have a deep understanding of the developments in your country. In fact, it is also very important to learn about the developmental processes of your neighbouring countries.

Not only citizens but countries are also eager to understand the developmental system of their neighbours. This understanding enables comprehension of strengths and weaknesses of yours as well as the neighbouring countries. Due to the process of globalisation, it is essential for every nation to compete with developed countries.

Hence, it is important to study the comparative development of India and its neighbours.

The Chinese reform process began more strongly and comprehensively during the 1980s. At this time, India was in the mid-stream of a rather slow growth process. Although the two countries (Pakistan and India) started together, Pakistan has seen a better result in certain areas.

However, India is better placed than Pakistan in the area of skilled manpower and research and development institutions. It is common to find developmental strategies of a country as a model to others for lessons and guidance for their own development. It is particularly evident after the introduction of the reform process in different parts of the world.

In order to learn from economic performance of our neighbouring countries, it is necessary to have an understanding of the roots of their successes and failures. It is also necessary to distinguish between and contrast, the different phases of their strategies.

(i) “India, China and Pakistan have many similarities in their development strategies”.
Elaborate any three points.
(ii) Mention the areas where Pakistan have performed better than India.

34. (i) What is meant by the term ‘affluence trap’?
(ii) Explain the concept of sustainable development.
(iii) Sometimes people prefer to be voluntarily unemployed. Why?

OR

(i) “Multinational companies have not only contributed towards the IT sector but also have a tremendous role to play towards rural development”.
Justify the given statement with valid arguments.

(ii) “The opportunity costs of negative environmental impacts are high”. Defend or refute the
given statement with valid reasons.

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