(General Instructions)

❖ Please check that this question paper contains __7____ printed pages.
❖ Please check that this question paper contains ____34_ questions.
CHENNAI SAHODAYA SCHOOLS COMPLEX
❖ Please write down the serial number of the question before attempting it.
❖ Reading time of 15 minutes is given to read the question paper alone. No writing
during this time.
(Add instructions pertaining to the specific subject)

COMMON EXAMINATION
Class-12
ECONOMICS - 030/1
Roll No.: Maximum Marks:80

Date: 05/01/2024 Time allowed: 3 hours

SECTION - A
1 For a closed economy (with no external sector), which one of the following is
correct?
(Choose the correct alternative)
1
a. GDP = GNP
b. GDP +GNP =0
c. GDP > GNP
d. GDP < GNP
2 Read the following statements and choose the correct alternative

Statement 1 – Fiscal deficit is always greater than primary deficit

Statement 2 – Fiscal deficit indicates borrowing requirement of the
government.

In the light of the given statements, choose the correct alternative from the
following: 1
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.

3 As per the government budget, the interest payments are estimated at ₹10,000
crores which is 40% of the primary deficit. The Fiscal deficit will be _____.

1
(Choose the correct alternative to fill up)
 a. ₹35,000 crs.
b. ₹4000 crs.
c. ₹25, 000 crs.
d. ₹10, 000 crs.
4 The difference by which actual aggregate demand exceeds the aggregate demand
required to establish full employment equilibrium is known as ______.

(Choose the correct alternative to fill up)

1
a. Deflationary gap
b. Inflationary gap
c. Full employment equilibrium
d. Underemployment equilibrium
5 Decrease in Cash Reserve Ratio leads to _____.

(Choose the correct alternative to fill up )

1
a. Fall in Aggregate Demand
b. Rise in Aggregate Demand
c. No Change in Aggregate Demand
d. Fall in general price level.
6 If ₹79 are required to buy $1, instead of ₹.77 earlier means ______.

a. Depreciation of domestic Currency

1
b. Appreciation of domestic currency
c. Depreciation of Foreign currency
d. No change in rate of foreign exchange.
1

OR
Identify the incorrect statement:

e. APC can be equal to one

f. APC can be less than one
g. APC can be equal to zero
h. APC can be more than one
7 Gifts and remittances sent abroad are recorded on the _____side of the ____
account in Balance of Payment.
(Choose the correct alternative to fill up the blanks) 1
a. credit, capital
b. debit, capital
c. credit, current
d. debit, current
8 In the web of financial interactions, when individuals harmoniously enter into
agreements to honor the repayment of a loan at a designated point
of time in the future, they are engaging in which pivotal function of money :
1
a. Store of value
b. Measure of value
c. Medium of exchange
d. Standard of deferred payment.

9 Read the following statements and choose the correct alternative

Statement 1 – Currency notes and Coins are issued by the RBI.
Statement 2 – Currency notes are also called Legal Tender as they can be
 refused by any citizen of the country for settlement of any kind of
ransaction.
In the light of the given statements, choose the correct alternative from the
following:
a. Statement 1 is true and statement 2 is false 1
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.

10
Read the following statements - Assertion (A) and Reason (R). Choose one of the
correct
Assertion (A) : Money supply includes money held by all financial
institutions..
Reason (R) : Money held by the Government does not come into
circulation.
Alternatives:
a. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct 1
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

11 Should the following be treated as final expenditure or intermediate expenditure?

Give reasons for your answers. 3
a. Purchase of furniture by a firm.
b. Expenditure on maintenance by a firm.

12 Find GDPMP from the data given below :

S. No. Particulars Rs. In Crores
i. Mixed income of self employed 400 3
ii. Old age pension 40
iii. Dividends 200
iv. Operating surplus 1,800
v. Wages and salaries 1,000
vi. Profits 800
vii. Employers contribution to Social Security schemes 100
viii. Net factor income from abroad - 20 3
ix. consumption of fixed capital 100
x. Net indirect taxes 100
 OR

The consumption curve makes an intercept at ₹200 crores on the Y axis. If MPC
and MPS are equal, then,
a) Derive the saving and consumption function
b) determine the consumption expenditure at break even point
c) Also determine the equilibrium level of income if investments are ₹100 crores.

13 Money as a 'unit of account’ and ‘Medium of exchange’ helped in solving the the 4
Problems created by barter. Explain.

4
OR

Describe the banker to the Government function of the central bank.

14 (a) Distinguish between revenue receipts and capital receipts of the government
budget with suitable examples . 4

(b) Define the term public good.

15 (a) State any four sources of supply of foreign exchange.

4
(b). If inflation is higher in country A than in country B, and the exchange rate
between the two countries is fixed, what is likely to happen to the trade balance
between the two countries? Explain.

16 (a) Explain the meaning of real GDP and nominal GDP. Which of the two presents
better view of the economic growth of an economy? Explain why due to the 4
presence of non-monetary production, real national income on its own cannot be
treated as a true index of welfare?
2

(b). “National income includes income earned by factors of production, within the
domestic territory only.” Defend or refute the given statement giving valid reasons.

17 Explain the concept of deflationary gap with the help of a diagram. What is its
impact on output, employment and price level in the economy? Explain how the
6
Reserve Bank of India uses 'open market operations' and 'repo rate' to correct the
above situation.
OR
Why must aggregate demand be equal to aggregate supply at the equilibrium 6
level of income and output? Explain with the help of a diagram the adjustment
mechanism.

SECTION - B
18 The Industrial Policy Resolution 1956(IPR-1956) placed the industries in three
categories.
Which one of the following do you think is correct? Identify by choosing the
correct option.

a. Schedule A - exclusively owned by the private sector, Schedule B- industries

 in which private sector could supplement state sector, Schedule C -
industries exclusively owned by the government. 1
b. Schedule A - industries in which private sector could supplement state sector,
schedule B-exclusively owned by the private sector, Schedule C - industries
exclusively owned by the government.
c. Schedule A -exclusively owned by the public sector, Schedule B- industries in
which private sector could supplement state sector, Schedule C - industries
which could be owned by the private sector
d. Schedule A -exclusively owned by the private sector, Schedule B- industries
could be owned by the private sector, Schedule C - industries which private
sector could supplement state sector

19 Read the following statements carefully:

1
Statement 1 – Granting of the Navaratna status to public sector enterprises, helped
in improving the performance of public sector undertakings in India.
Statement 2 – The government facilitated the expansion of Navaratna public sector
enterprises and enabled them to become global players .
In the light of the given statements, choose the correct alternative 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 Identify the incorrect statement from the following:
(Choose the correct alternative)
a. China was compelled by the international agencies to introduce structural
reforms. 1
b. China is ahead of India and Pakistan on many human development indicators.
c. China introduced structural reforms in year 1978 on its own initiative.
d. China’s industrial sector has maintained high growth rate.
21 In 1955, the________ committee, noted the possibility of using small scale
industries for promoting rural development.
(Choose the correct alternative to fill up the blank) 1
a. Tapas majumdar committee
b. Karvy community
c. The Brundtland committee
d. khadi
1
OR

The inward-looking trade strategy is also called__________.

a. Privatization
b. Import substitution

c. Globalization
d. Liberalisation

22 Read the following statements carefully:

Statement 1 – In 1965, Mao introduced the great proletarian cultural revolution
(1966- 67) under which students and professionals were sent to
work and learn from the countryside.
Statement 2 – The present day fast industrial growth in China can be traced

back to the reforms introduced in 1953.

In the light of the given statements, choose the correct alternative from the 1
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.

23 Read the following statements - Assertion (A) and Reason (R). Choose one of the
correct alternatives given below:

Assertion (A): The Public Sector played an extensive role in promoting

the industrial sector in the initial years of planning.
Reason (R): Indian industrialists had the capital to undertake investment
in industrial ventures required for the development of our economy and
the market was big enough to encourage industrialists to undertake
major projects.
Alternatives:
a. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct
1
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.

24 Read the following statements - Assertion (A) and Reason (R). Choose one of the
correct alternatives given below:
Assertion (A): Self-help groups have emerged to fill the gap in the
formal credit system.
Reason (R): The formal credit delivery mechanism has not only been
proven inadequate but also has not been fully integrated into the
overall rural social and community development.
Alternatives:
a. Both Assertion (A) and Reason (R) are true, and Reason (R) is the 1
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.
25 ________ may be defined as a measure of the extent of demographic participation
in the social and political decision making.
(Choose the correct alternative to fill up the blank)
1
a. Economic indicator
b. liberty indicator
c. health indicator
d. demographic indicator
26 World Bank was known as _____

(Choose the correct alternative to fill up the blank) 1

a. Federal Reserve Bureau
b. International Bank for Reconstruction and Development (IRDB)
c. International Monetary Fund (IMF)
d. Imperial Bank
27 Choose the correct pair of statements:

Column I Column II
a. Adoption of mixed economic system I. The common development
policy of India and China

b. Introduction of economic reforms in China II. Imposed by World Bank

c. Great leap forward campaign III. Focused on massive
industrialization 1
d. First 5 year plan of Pakistan IV Announced in 1953

a. A-I
b. B-II
c. C-III
 d. D-IV
28 Discuss any two major policy initiatives taken by the Government in the 3
agricultural sector after independence.

3
OR

‘GST is a game changing reform for Indian economy’. Justify.

29 Lakshmi studies in an Upper primary school run by the government of Tamil Nadu.
She gets to have her breakfast in the school which keeps her active and is able to
focus on what is being taught. She gets to eat her breakfast through.
“The Chief Minister’s Breakfast Scheme” Which is a pioneer scheme in India and a
model for others to emulate. 3
Explain how the scheme helps children like Lakshmi? Do you think this expenditure
incurred by the Government is an investment on human capital? Explain.

30 Read the following picture and answer the following questions.

a. As a form of economic activity, outsourcing has intensified in recent

b. Justify the statement giving valid reasons that has made India a favorite
destination for global outsourcing in the post reform period?

31 Define the following :

4
a. Jobless growth
b. Casualization of workforce
c. Micro credit programs
4
d. Human Development.
OR
Identify the benefits and limitations of organic farming.

32 Read the following table and answer the following questions based on the data
given.
Demographic Indicators, 2000-01

Annual Growth Densit

Population
Rate of y (per Sex Fertility Urbanisatio
Country (in
Population sq. Ratio Rate n
millions)
(1990-2003) km)

India 1103.6 1.7 358 933 3.0 27.8

China 1303.7 1.0 138 937 1.8 36.1 4

Pakistan 162.4 2.5 193 922 5.1 33.4
a. Comment on the population growth rate among the three countries

b. How has China arrested the growth rate of its population. What are the
 implications you foresee as a result of this arrest?

33 a). Identify any four factors contributing to land degradation in India. 4

2
b). Explain any one strategy that can be adopted for sustainable development

OR
State whether the following statements are true or false. 6
Give reasons for your answers.
a. The differences in literacy rates between males and females are narrowing
signifying a positive development in gender equality.
b. Agricultural diversification is essential for sustainable livelihoods.
c. The opportunity costs of negative environmental impacts are high.

34 Case Study: Read the following and answer the following on the basis of the same.
The G20 is made up of 19 countries and the EU. The 19 countries are Argentina,

Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy,

Japan, the Republic of Korea, Mexico, the Russian Federation, Saudi Arabia,

South Africa, Turkey, the UK, and the US.

India holds the Presidency of the G20 from 1 December 2022 to 30 November
2023.
It works to address major issues related to the global economy, such as
international financial stability, climate change mitigation and sustainable
development.
• The G20 Summit, under the theme of “One Earth, One Family, One Future,” (
Vasudhaiva kutumbakam) , discussed important issues such as food security, climate
change and energy development, health and digitalization .
Some of the outcomes of the summit are:
• The African Union joined the G20 as a permanent member.
• A new organisation called the Global Biofuel Alliance (GBA) was launched, to 6
promote the development and adoption of sustainable biofuels, and set relevant
standards and New Delhi Leaders Declaration was adopted with consensus.
• A group of countries made a joint agreement to build a rail and shipping corridor
linking India with the Middle East and Europe called the India-Middle East-Europe
Economic Corridor. The group comprises India, Saudi Arabia, the United Arab
Emirates, Jordan, Israel and the European Union.
1. Why are regional and economic groupings formed? Name any two such
groupings.

2. What do you understand by the theme ‘Vasudhaiva kutumbakam' ? List two

important issues that relates to the world as one family.

3. What was the step taken towards infrastructure development in the summit?

Give two suggestions for a cleaner and greener environment to G-20 countries
and their leaders?
8