NBSE Question Papers Economics Term-1 (Set-3) for Class 12

Class 12  SET-3 Series NBSE/XII/2021 TERM-I Code No. 030/12/3 Roll No.  Candidates must write the Code No. on the title page of the OMR Sheet. l Please check that this question paper contains 12 printed pages. l Code number given on the right hand side of the question paper should be written on the title page of the OMR sheet. l Please check that this question paper contains 60 questions. l 15 minutes time has been allotted to read this question paper. ECONOMICS Time Allowed : 90 Minutes Maximum Marks : 40 General Instructions: 1. There are a total 60 questions in this paper out of which 50 questions are to be attempted. 2. This paper is divided into three sections: (a) Section A – Contains 24 questions. Attempt any 20 questions. (b) Section B – Contains 24 questions. Attempt any 20 questions. (c) Section C – Contains 12 questions. Attempt any 10 questions. 3. All questions carry equal marks. 4. There is no negative marking. NBSE 2021 1 [P.T.O.

SECTION-A (20 questions out of 24 questions are to be attempted) 1. The focus of government budget is ......................... (a) to maximise fiscal deficit (b) to minimise fiscal deficit (c) to maximise expenditure (d) to maximise revenue 2. Capital account BOP records all such transactions which cause ......................... (a) change in the ownership of assets between one country and rest of the world (b) movement of goods between one country and rest of the world (c) movement of services between one country and rest of the world (d) none of these 3. Identify the systems followed by Reserve Bank of India for issuing currency? (a) Proportionate system (b) Simple deposit system (c) Minimum reserve system (d) Fixed fiduciary system 4. Identify which of the following statements is true? (a) Invisibles in BOP accounts include monetary transactions related to current transfers (b) Expenditure by tourists is included in the balance of trade (c) Financial transactions relate to international sale and purchase of real assets (d) Balance of payments records transactions which are related to only goods 5. Read the following statements carefully and choose the correct alternative from the following: Statement 1: The government increased the equity limit of foreign investment. Statement 2: With increase in equity limit, foreign investment both direct and indirect were reduced. Alternatives: (b) Both statements are false (a) Both statements are true (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 6. Repo rate is the rate at which: (a) commercial banks purchase government securities from the central bank (b) commercial banks can take loans from the central bank (c) commercial banks can keep their deposits with the central bank (d) short-term loans are given by commercial banks 7. Venezuelan President Nicolas Maduro carried out one of the greatest currency devaluations in history over the weekend—a 95 per cent plunge that will test the capacity of an already beleaguered population to stomach even more pain. The official rate for the currency will go from about 285,000 per dollar to 6 million, a shock that officials tried to partly offset by raising the minimum wage 3,500 per cent to the equivalent of just $30 a month. While Maduro boasted in Friday night's announcement that the International Monetary Fund wasn't involved in the policies, aspects of the moves bore a resemblance to a classic orthodox economic adjustment, albeit with some confusing twists. (The Economic Times, August 20, 2018) Devaluation of currency is possible in: (a) managed floating (b) fixed exchange rate regime (c) flexible exchange rate regime (d) both (a) and (b) NBSE 2021 2

8. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Scholarship is a revenue expenditure. Statement 2: Scholarship does not lead to any type of asset formation. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 9. Indian government repays the loan taken from the IMF. This transaction would be recorded on ..................... side of ..................... account. (i) credit (ii) capital (iii) debit (iv) current Identify the correct alternatives from the following: Alternatives: (a) (ii) and (iii) (b) (i) and (iii) (c) (iii) and (ii) (d) (i) and (iv) 10. The central bank: (a) is an apex bank (b) is the sole agency of note-issuing (c) focuses on stability and growth of the economy (d) all of these 11. In ............, Karve committee was constituted for aiming the development of small-scale industries. (a) 1951 (b) 1953 (c) 1955 (d) 1958 12. During colonial period, India's demographic profile showed: (a) high birth rate (b) high death rate (c) high infant mortality rate (d) all of these 13. The maximum size of cultivable land holding that an individual can own is known as: (a) subsistence farming (b) small holding (c) consolidation of holding (d) ceiling on holding 14. Read the following statements carefully and choose the correct alternative from the following: Statement 1: In the determination of poverty line cut-off, consumption is a preferred parameter than income. Statement 2: Consumption reflects actual use of the goods and services by an individual, as well as the type of goods actually used. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 15. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Farmers in India were forced to take up the cultivation of Indigo. Statement 2: The dyeing and bleaching of textile in the textile industry of Britain required Indigo. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false NBSE 2021 3 [P.T.O.

16. ...................... is a gain of Green Revolution in India. (a) Spurt in crop productivity (b) Change in farmers’ outlook (c) Substantial rise in acreage (d) Modern agriculture 17. From the following given sets of events and their years in column I and column II respectively, choose the correct pair. Column I Column II A. Demonetisation (i) 2015 B. Planning Commission (ii) 1947 C. N1TI Aayog (iii) 2016 D. First Five-year plan ( iv) 1951 (a) A-i (b) B-ii (c) C-iii (d) D-iv 18. Micro credit programmes are becoming popular among small borrowers owing to their: (a) formal credit delivery mechanism involving minimum rate of return (b) informal credit delivery mechanism involving minimum rate of return (c) informal credit delivery mechanism involving minimum legal formalities (d) none of these 19. Expenditure on salaries is an example of: (b) non-plan expenditure (a) plan expenditure (d) none of these (c) both (a) and (b) 20. Which of the following is a reason of poverty in India? (a) Rising prices (b) Rising population (c) Low level of GDP (d) All of these 21. Supply of money refers to ........................... (a) currency held by the public (b) currency held by Reserve Bank of India (RBI) (c) currency held by the public and demand deposits with commercial banks (d) currency held in the government account 22. “Demographic refers to particular characteristics of a population. It include; age, race, ethnicity, gender, marital status, income, education and employment. ” Identify which of the following is not true about India's demographic profile during the British rule? (a) Both birth rate and death rate were very high, nearly 68 and 60 per thousand respectively (b) Infant mortality rate was very high, nearly 180 per thousand (c) Both (a) and (b) (d) None of these 23. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Expenditure on interest payment is a capital expenditure. Statement 2: Expenditure on interest payment neither creates assets nor causes a reduction in liabilities for the government. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false NBSE 2021 4

24. Indian economy was a ................. economy on the eve of independence. (a) backward (b) stagnant (c) mixed (d) all of these SECTION-B (20 questions out of 24 questions are to be attempted) 25. Read the following statements—Assertion (A) and Reason (R): Assertion (A): Money sent by the NRIs to their families in India is to be recorded in current account of BOP. Reason (R): Export of machinery is to be recorded in the current account of BOP. From the given alternatives choose the correct one: Alternatives: (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 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. 26. If legal reserve ratio is 20%, the value of money multiplier would be .................. (a) 2 (b) 3 (c) 5 (d) 4 27. Read the following statements—Assertion (A) and Reason (R): Assertion (A): The gains of Green Revolution excluded small and marginal farmers. Reason (R): HYV technology required expensive inputs which were beyond the reach of marginal farmers. From the given alternatives choose the correct one: Alternatives: (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 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. 28. ........................... and ........................... are agricultural diversification. (i) Animal husbandry (ii) Travel agency (iii) Fisheries (iv) School Alternatives: (a) (i) and (ii) (b) (ii) and (iii) (c) (iii) and (iv) (d) (i) and (iii) 29. Read the following statements—Assertion (A) and Reason (R): Assertion (A): Rapidly rising population adversely affects the quality of human capital. Reason (R): Population reduces per head availability of the existing facilities relating to housing, sanitation, drainage. etc. From the given alternatives choose the correct one: Alternatives: (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A). NBSE 2021 5 [P.T.O.

(b) Both Assertion (A) and Reason (R) 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. 30. From the set of statements or schemes and their years given in column I and column II respectively, choose the correct pair of statements: Column I Column II A. Study group formed by planning commission for eliminating poverty (i) 2005 B. “Task force on the projection of the minimum needs and effective (ii) 1962 consumption demand.” C. Mahatma Gandhi National Rural Employment Guarantee Act (iii) 1979 D. Jan Dhan Yojana (iv) 2014 Alternatives: (a) A–(i) (b) B–(ii) (c) C–(ii) (d) D–(iv) 31. Figure showing trends of Poverty in India, 1973-2012 On the basis of the given chart, identify in which year the number of poor are highest in rural India between 1973-2012 (a) 1983-84 (b) 1993-94 (c) 2004-05 (d) 2009-10 32. Select Indication of Development in Education and Health Sectors Particulars 1951-52 1981-82 1991-92 2001-02 2016-17 Real Per Capita Income (In `) 7,651 12,174 15,748 23,095 77,059 Crude Death Rate (Per 1,000 Population) 25.1 12.5 9.8 8.1 6.3 Infant Mortality Rate 146 110 80 63 33 Life Expectancy at Birth Male 37.2 54.1 59.7 63.9 67 (In Years) Female 36.2 54.7 60.9 66.9 70 Literatcy Rate (%) 16.67 43.57 52.21 65.20 76 Source: Economic survey for years, Ministry of Finance National statement office & Ministry of statistics and Programme Implementation: Government of India. NBSE 2021 6

On the basis of the above mentioned information answer the following question: The female life expectancy of India(as per the given data) has increased by(approx.) between 1951-52 and 2016-17: (a) 27.9% (b) 93.3% (c) 84.2% (d) 41.6% 33. Read the following statements—Assertion (A) and Reason (R): Assertion (A): Plans should have goal, i.e., without goals there is no planning. Reason (R): Planning is defined as a strategy that defines how to allocate the country’s scarce resources to different uses with a view to achieving a given set of goals. From the given alternatives choose the correct one: Alternatives: (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 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. 34. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Urban poverty is a spillover of rural poverty Statement 2: People tend to migrate from rural areas to urban areas in search of jobs Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 35. Read the following statements carefully and choose the correct alternative from the following: Statement 1: The central bank is an apex bank of the entire banking system of a country. Statement 2: All banks are to work according the guidelines and directives of the central bank. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 36. Arrange the following event in the correct chronological order: (i) The year after which the population of India is increasing (ii) Establishment of Tata Iron and Steel Company (TISCO) (iii) The first population Census in India was conducted (iv) Opening of Suez Canal Alternatives: (b) (i), (ii), (iv), (iii) (a) (iv), (iii), (ii), (i) (d) (iv), (i), (iii), (ii) (c) (iii), (iv), (ii), (i) NBSE 2021 7 [P.T.O.

37. Read the following statements—Assertion (A) and Reason (R), choose one of the correct alternatives given below: Assertion (A): Capital account transactions do not give rise to future claims. Reason (R): Capital account transactions reveal borrowings from rest of the world. Alternatives: (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 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. 38. ........... include saving account deposits and current account deposits. (a) Time deposits (b) Demand deposits (c) Other deposits (d) Recurring deposits 39. Read the following statements—Assertion (A) and Reason (R), choose one of the correct alternatives given below: Assertion (A): Milk cooperatives have played a major role in bringing White Revolution in the country. Reason (R): Agricultural marketing is the farmers' act of bringing their produce to the market for sale. Alternatives: (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 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. 40. Read the following statements—Assertion (A) and Reason (R), choose one of the correct alternatives given below: Assertion (A): Animal husbandry is an important area of employment in India different from crop farming. Reason (R): Animal husbandry is associated with Golden Revolution. Alternatives: (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 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. 41. Read the following statements—Assertion (A) and Reason (R), choose one of the correct alternatives given below: Assertion (A): Both primary and secondary deposits are demand deposits. Reason (R): Both primary and secondary deposits can be withdrawn on demand by writing cheques. NBSE 2021 8

Alternatives: (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 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. 42. Choose the correct alternatives to be filled in given blanks A and B. Low A Demand Depression Low B Investment (a) Low level of technological development and Low level of savings (b) Low level of production and high level of unemployment (c) Low Mobilization of savings and Low level of unemployment (d) Low level of Investment and Low savings 43. Human capital is a set of a person's abilities and skills, having a direct impact on one's economic, and social activity potential. The definitions of human capital usually emphasis the individuals, education, skills, abilities and knowledge that increase the productivity of his economic activity however, the content of the concept is much broader. Human capital includes both technical and social skills. The concept of ‘human resources’ is also widely exploited, and refers to the number and the proportion of working age people in the society. Most families decide to incur huge expenditure on education, even though they have to raise loans. Identify the correct alternative why they do so: (a) because education is everyone’s right (b) because there is no other alternative (c) because returns are greater than expenditure (d) both (a) and (c) 44. If the balance of trade shows a deficit of ` 300crore and the value of imports is ` 500crore, the value of exports is (in `): (a) 600 crore (b) 300 crore (c) 200 crore (d) 800 crore 45. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Under Mid-day Meal Scheme, free lunch is supplied to children in all classes in government, government-aided, local body and other schools. Statement 2: Under MGNREGA, employment is offered for a minimum period of 100 days. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false NBSE 2021 9 [P.T.O.

46. Read the following statements—Assertion (A) and Reason (R), choose one of the correct alternatives given below: Assertion (A): Balance of payments records transactions related to goods as well services. Reason (R): Current account balance includes the balance of trade as well as balance on invisibles. Alternatives: (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 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. 47. Which of the following is a good effect of LPG policies on the Indian economy? (a) Vibrant economy (b) Consumer's sovereignty (c) Increase in foreign exchange reserves (d) All of these 48. Match the situations given in column I with their respective implications given in column II: Column I Column II A. Physical capital (i) the produced means of production B. Human capital (ii) low savings C. Not Human capital formation problem (iii) stock of skill and expertise of a nation at a point of time D. Human capital leads to (iv) Technical improvement (a) A-(iii), B-(iv), C-(i), D-(ii) (b) A-(i),B-(iii),C-(ii),D-(iv) (c) A-(ii), B-(iv), C-(i), D-(iii) (d) A-(ii),B-(iii),C-(iv),D-(i) SECTION-C (10 questions out of 12 questions are to be attempted) Question No. 49-54 are to be answered on the basis of the followings data: Budget 2020-21 estimated the Gross Tax Revenue (GTR) to be ` 24.23 lakh crore which is 10.8 per cent of GDP. This builds into growth of 12 per cent over the revised estimates (RE) of 2019-20 and 20.6 per cent over 2019-20 PA. The direct taxes, comprising mainly of corporate and personal income tax, constitute around 55 per cent of GTR. These were envisaged to grow at 12.7 per cent relative to 2019-20 RE and 27.2 per cent relative to 2019-20 PA. On the other hand, the indirect taxes were expected to grow at 11.1 per cent vis-a-vis 2019-20 RE and 15 per cent as against 2019-20 PA. The contribution of different taxes in GTR as envisaged in 2020-21 BE (Source: Economic Survey, 2020-21 49. Which of the following is a direct tax? (b) Tax on agricultural income (a) Service tax (d) None of these (c) GST 50. Tax receipts are revenue receipts because: (a) these do not lead to decrease in assets of the government (b) these create additional liabilities of the government NBSE 2021 10

(c) these are unilateral payments (d) these may be direct or indirect 51. Which of the following is not an example of non-tax income of the government? (a) Escheat (b) Electricity bill (c) Fees (d) None of these 52. Which of the following is not true about revenue budget? (a) It does not impact asset and liability status of the government (b) High revenue receipts are a sign of growing economy (c) It focuses on GDP by way of public investment (d) None of these 53. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Revenue budget impacts asset-liability status of the government. Statement 2: High capital receipts are often related to compulsions of borrowings. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 54. If capital receipts = ` 27 lakh, revenue expenditure = ` 63 lakh, revenue receipts = ` 50 lakh, borrowings = ` 20 lakh and interest payments = ` 13 lakh, then fiscal deficit will be (a) ` 7 lakh (b) ` 13 lakh (c) ` 14 lakh (d) ` 20 lakh Question No. 55-60 are to be answered on the basis of the followings data: The economic crisis of 1990-91 was turned by the new government of Prime Minister PV Narasimha Rao and Finance Minister Dr. Manmohan Singh into an opportunity for introducing far reaching economic reforms. Politicians in ruling parties as well as in opposition did not understand much of the economic mess the country had fallen into. These politicians, therefore, wanted to give time to the new Finance Minister to prove his worth. In the early days of the economic crisis Dr. Singh, with the full support of the Prime Minister, found it relatively easy to get his prescriptions accepted by the Union Cabinet. At Cabinet meetings other politicians kept quiet, only to wait and watch the evolving policy measures being formulated by Dr. Manmohan Singh. The first action taken by Dr. Singh towards restoring macroeconomic stability and external confidence was to devalue the Indian rupee in two steps, in 1991, aggregating 18 per cent against Special Drawing Rights, This was ably supported by the Reserve Bank of India through a tighter monetary policy. With economic skill and little political interference, India succeeded in overcoming its macro-economic crisis in about two years. This was probably the fastest and least painful recovery under the stabilization package agreed with the IMF by any developing country. (Source: Charon D. Wadhva, Journal of South Asian Studies, 2000) 55. ........................ is known as the, prime architect of economic reforms in India. (a) Dr. Manmohan Singh (b) P.V. Narasimha Rao (c) R. Venkataraman (d) None of them 56. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Consumer sovereignty is the outcome of economic reforms. Statement 2: India became an emerging economic power due to economic reforms. NBSE 2021 11 [P.T.O.

Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 57. Read the following statements—Assertion (A) and Reason (R): Assertion (A): Trade and investment policy underwent a substantial change in the wake of privatisation. Reason (R): There has been a substantial jump in private foreign investment after the adoption of LPG policies. From the given alternatives choose the correct one: Alternatives: (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 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. 58. When India approached World Bank and IMF; it was sanctioned a loan of: (a) $ 8 billion (b) $ 8 million (c) $ 7 billion (d) $ 7 million 59. Read the following statements carefully and choose the correct alternative from the following: Statement 1: Indian economy had to agree for opening up to foreign investors before it was sanctioned the loan. Statement 2: Indian economy had to agree for removal of quantitative restrictions before it was sanctioned the loan. Alternatives: (a) Both statements are true (b) Both statements are false (c) Statement 1 is true but Statement 2 is false (d) Statement 2 is true but Statement 1 is false 60. Read the following statements—Assertion (A) and Reason (R): Assertion (A): New economic reforms paved way for increased consumer sovereignty. Reason (R): Diverse global markets allowed a wide variety available to the consumers. From the given alternatives choose the correct one: Alternatives: (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 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. NBSE 2021 12