HMJ/C 58/C/1

Strictly Confidential: (For Internal and Restricted use only)

Senior Secondary School Certificate Examination, September 2020

Marking Scheme – ECONOMICS (030)

(PAPER CODE –58/C/1) – SET 1

General Instructions: -

1. You are aware that evaluation is the most important process in the actual and correct assessment of the
candidates. A small mistake in evaluation may lead to serious problems which may affect the future of
the candidates, education system and teaching profession. To avoid mistakes, it is requested that
before starting evaluation, you must read and understand the spot evaluation guidelines carefully.
Evaluation is a 10-12 days mission for all of us. Hence, it is necessary that you put in your best
efforts in this process.

2. “Evaluation policy is a confidential policy as it related to the confidentiality of the examinations

conducted, evaluation done and several other aspects. Its leakage to the public in any manner
could lead to derailment of the examination system and affect the life and future of millions of
the candidates. Sharing this policy/document to anyone, publishing in any magazine and
printing in newspapers/website etc. may invite action under IPC”.

3. Evaluation is to be done as per instructions provided in the Marking Scheme. It should not be done
according to one’s own interpretation or any other consideration. Marking Scheme should be strictly
adhered to and religiously followed. However, while evaluating, answers which are based on latest
information or knowledge and/or are innovative, they may be assessed for their correctness
otherwise and marks be awarded to them.

4. The Head-Examiner must go through the first five answer books evaluated by each evaluator on the
first day, to ensure that evaluation has been carried out as per the instructions given in the Marking
Scheme. The remaining answer books meant for evaluation shall be given only after ensuring that
there is no significant variation in the marking of individual evaluators.

5. Evaluators will mark( √ ) wherever answer is correct. For wrong answer ‘X”be marked. Evaluators
will not put right kind of mark while evaluating which gives an impression that answer is correct and
no marks are awarded. This is most common mistake which evaluators are committing.

6. If a question has parts, please award marks on the right-hand side for each part. Marks awarded for
different parts of the question should then be totaled up and written in the left-hand margin and
encircled. This may be followed strictly.

7. If a question does not have any parts, marks must be awarded in the left-hand margin and encircled.
This may also be followed strictly.

8. If a student has attempted an extra question, answer of the question deserving more marks should be
retained and the other answer scored out.

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9. No marks to be deducted for the cumulative effect of an error. It should be penalized only once.

10. A full scale of marks 80 has to be used. Please do not hesitate to award full marks if the answer deserves it.

11. Every examiner has to necessarily do evaluation work for full working hours i.e. 8 hours every day
and evaluate 20 answer books per day in main subjects and 25 answer books per day in other subjects
(Details are given in Spot Guidelines).

12. Ensure that you do not make the following common types of errors committed by the Examiner in the
past:-
· Leaving answer or part thereof unassessed in an answer book.
· Giving more marks for an answer than assigned to it.
· Wrong totaling of marks awarded on a reply.
· Wrong transfer of marks from the inside pages of the answer book to the title page.
· Wrong question wise totaling on the title page.
· Wrong totaling of marks of the two columns on the title page.
· Wrong grand total.
· Marks in words and figures not tallying.
· Wrong transfer of marks from the answer book to online award list.
· Answers marked as correct, but marks not awarded. (Ensure that the right tick mark is correctly and
clearly indicated. It should merely be a line. Same is with the X for incorrect answer.)
· Half or a part of answer marked correct and the rest as wrong, but no marks awarded.

13. While evaluating the answer books if the answer is found to be totally incorrect, it should be marked
as cross (X) and awarded zero (0)Marks.

14. Any unassessed portion, non-carrying over of marks to the title page, or totaling error detected by the
candidate shall damage the prestige of all the personnel engaged in the evaluation work as also of the
Board. Hence, in order to uphold the prestige of all concerned, it is again reiterated that the
instructions be followed meticulously and judiciously.

15. The Examiners should acquaint themselves with the guidelines given in the Guidelines for spot
Evaluation before starting the actual evaluation.

16. Every Examiner shall also ensure that all the answers are evaluated, marks carried over to the title
page, correctly totalled and written in figures and words.

17. The Board permits candidates to obtain photocopy of the Answer Book on request in an RTI
application and also separately as a part of the re-evaluation process on payment of the processing
charges.

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Q. SECTION- A MACRO ECONOMICS

NO. Marks
EXPECTED ANSWER

1 __________ (Aggregate Demand/Aggregate Supply) refers to total

ex-ante expenditure in an economy during an accounting
year. (Fill in the blank with the correct alternative)

Answer: Aggregate Demand 1

2 State whether the following statement is true or false :

‘‘Industrial waste driven into rivers is an example of positive
externality.’’

Answer: False 1

3 Define Current Account Surplus.

Answer: Current Account Surplus (CAS) refers to excess of the

receipts from value of export of visible items, invisible items and
unilateral transfers over the payments for value of import of visible 1
items, invisible items and unilateral transfers.

OR

Equilibrium in Balance of Payments is achieved when the net value of

all the receipts and payments is ___________ (zero/positive).
(Fill in the blank with the correct alternative) 1
Answer: zero

4 If Marginal Propensity to Save (MPS) is equal to zero, the value of

investment multiplier will be _______.
(Fill in the blank with the correct answer)
1
Answer: not defined (∞)

State two components of Money Supply.

5
Answer: Two components of Money Supply are:
a. Currency with public
b. Demand deposits of commercial banks ½+½

6 If Autonomous Consumption (C) is greater than zero, it indicates that

the National Income of the economy will be __________.
(A) rising
(B) falling
(C) zero
(D) constant

Answer: Marks should be allotted to any of the option answered by the student. 1

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7 State whether the following statement is true or false :

‘‘Devaluation of currency is said to occur when the exchange rate is
increased under the fixed exchange rate system.’’

Answer: True 1

8 Define ‘Tax’

Answer: Tax is compulsory payment imposed by the government on

individual and firms. 1

9 The process of buying and selling of securities by the Central Bank of

a country is known as ________. (Fill in the blank with the correct
alternative)
(A) Margin Requirement
(B) Open Market Operations
(C) Cash Reserve Ratio
(D) Statutory Liquidity Ratio
1
Answer: (B) Open Market Operations

10 _____________ is an example of a non-tax revenue receipt.

(Fill in the blank with the correct answer)
Answer: Fees
(any other correct answer should be allotted full marks) 1

11 ‘‘Final goods are those goods which are consumed only by the
households.’’
Defend or refute the given statement with a valid argument.

Answer: The given statement is not correct and is thus refuted. Final
goods are those goods which are purchased/consumed either by
households or by the producers for investment purpose, i.e., these are 3
the goods which have crossed the production boundary.
OR
Discuss briefly the meaning of ‘Value Addition’.

Answer: Value addition is the excess of the value of output over the
value of intermediate consumption.
Value Addition = Value of Output – Value of Intermediate 3
Consumption.

12 From the following data, calculate:

(a) Consumption Expenditure and
(b) Investment Expenditure for the economy.
S. No. Particulars Amount (in ₹)
(i) Equilibrium level of income 5,000
(ii) Autonomous consumption 500
(iii) Marginal Propensity to Save 0.4

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Answer:
a) We know that:
Consumption expenditure = ć + bY ½
= 500 + 0.6 (5,000) ½
= ₹ 3,500 crores ½

b) Also, at equilibrium level, Y = C+ I ½

5,000 = 3,500 + I ½
I = ₹ 1,500 crores ½

13 ‘‘A country deliberately keeps the value of its currency low under the
managed floating system.’’ Discuss briefly how it will affect the
exports of the country.

Answer: If a country deliberately keeps the value of its currency low

as compared to the foreign exchange, to keeps its currency cheaper
vis-a-vis foreign currency, under the managed floating system.

Such a step ensures international competitiveness of the goods and 4

services of the country in the international market leading to an
increase in the exports of the country to the rest of the world.
(to be marked as a whole)
OR
On which side and in which sub-account of Balance of Payments, will
‘foreign investment in India’ be recorded? State valid reason for your
answer.

Answer: ‘Foreign investment in India’ will be recorded on the credit

side of the Capital account in the Balance of Payment account. 2

‘Foreign investment in India’ is of capital nature (increasing the assets

of the country) also leading to inflow of foreign currency of the 2
country.

14 Describe the ‘Banker to the Government’ function of the Central

Bank.

Answer: Central Bank performs similar banking functions for the

government as commercial banks perform for its customers. Its
functions include providing loans to the government, working as an
agent of the government, managing the public debts for the
government etc. 4

The Central Bank also advises the government regarding the money
market, capital market and also on policy matters.
(to be marked as a whole)

15 Distinguish between fiscal deficit and revenue deficit in a Government

Budget.
Answer:

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Basis Fiscal Deficit Revenue Deficit

Definition Fiscal deficit is the The revenue deficit

excess of the refers to the excess of
government’s total government’s estimated
estimated expenditure revenue expenditure
and its total estimated over its estimated
receipts excluding revenue receipts
borrowing
2+2
Fiscal Deficit = Total Revenue Deficit =
Expenditure – (Revenue Revenue Expenditure –
Receipts + Non-debt Revenue Receipts
creating capital receipts)

16 (a) Giving valid reasons, state how the services of a ‘School Teacher’
will be undertaken in estimation of National Income.

Answer: a) The services of a school teacher will be included in the 2

national income of the country as it contributes to the current flow of
services in the economy.

(b) Distinguish between ‘Real Gross Domestic Product’ and ‘Nominal

Gross Domestic Product
Answer:
Basis Real Gross Domestic Nominal Gross
Product Domestic Product

Definition Real Gross Domestic Nominal Gross

Product (GDP) is defined
as the market value of all
final goods and services
produced in a year,
measured at the prices of
a given base year.
Domestic Product 2+2
(GDP) is the market
value of all final goods
and services, produced
in a year, measured at
the prices of current year

17 (a) ‘‘To boost the falling demand in the economy, Reserve Bank of
India recently reduced Repo Rate and Reverse Repo Rate.’’ Elaborate
the rationale behind the steps taken by the Central Bank.

Answer: The steps taken by the Central Bank to boost the falling
demand in the economy are justified as the reduction in the Repo rate
and Reverse Repo Rate will increase the availability of funds in the
market through the commercial banks.
Rationale: A decrease in Repo/Reverse Repo Rate will push the
commercial banks to reduce the lending rate and will eventually make 4
the borrowings cheaper for the general public. As a result the
consumption demand in the economy may increase.
(to be marked as a whole)

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(b) Define involuntary unemployment.

Answer: Involuntary Unemployment refers to a situation in which all
those people who are willing and able to work at the existing wage 2
rate do not get work.
OR
What is meant by deflationary gap? State any two monetary measures
to correct the situation of deflationary gap.

Answer: Deflationary gap is the amount by which the actual aggregate

demand falls short of the level of aggregate demand required to 2
establish the full employment equilibrium.

Two monetary measures to control deflationary gap are as under:

i. Cash Reserve Ratio (CRR): Lowering the CRR may raise the
lending capacity of the commercial banks. This may lead to 2
rise in the aggregate demand in the economy.

ii. Open Market Operation (OMO): The Central Bank may

purchase the government securities in the open market to pump
additional funds into the hands of the general public. 2
(any other valid answer should be allotted marks)

SECTION- B INDIAN ECONOMIC DEVELOPMENT

18 In China, commune system is related to ___________

sector. (Fill in the blank with the correct alternative)
(A) agriculture
(B) industry
(C) service
(D) informal

Answer: (A) agriculture 1

19 Define ‘infrastructure’ 1

Answer: Infrastructure refers to the support system of economic and

social development of the country.

20 Economic growth combined with ___________ (equity/disparity) was 1

the principal goal of planning in India.
(Fill in the blank with the correct alternative)

Answer: equity.

21 State whether the following statement is true or false : 1

‘‘Elementary education covers both primary and middle level
education.’’

Answer: False

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22 Great Leap Forward (GLF) was the campaign launched by Mao in the
year _________. (Choose the correct alternative) 1
(A) 1952
(B) 1958
(C) 1960
(D) 1968

Answer: (B) 1958

23 Opening of ___________ Canal significantly reduced the cost of

transportation of goods between Britain and India. (Fill in the blank)

Answer: Suez 1

24 State whether the following statement is true or false :

‘‘Smoke emitted by the industries leads to environmental pollution.’’

Answer: True 1

25 In the Industrial Policy Resolution of 1956, industries were classified

in ____________ (two/three) categories.
(Fill in the blanks with the correct alternative) 1
Answer: three

26 In which of the following type of unemployment, is the marginal

productivity of the worker zero? (Choose the correct alternative)
(A) Structural unemployment
(B) Involuntary unemployment
(C) Seasonal unemployment
(D) Disguised unemployment

Answer: (D) Disguised unemployment 1

27 Define Marketed Surplus.

Answer: Marketed surplus is the portion of agricultural produce

which is sold in the market by the farmers after meeting their own 1
consumption requirement.
OR
What is meant by Agricultural Productivity?

Answer: Agricultural Productivity refers to output per hectare of land. 1

28 State and discuss any two principal causes of environmental

degradation.

Answer: Two principal causes behind environmental degradation:

i. Population Rise - Rising population is one of the major
causes for degradation of the environment as it adds to the 1½
burden on natural resources, leading to environmental crisis.

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ii. Consumption Levels: It has been observed that the

developing and developed nations have witnessed affluent
consumption levels in the past, bringing disequilibrium in the
demand and supply of the natural resources, pushing the 1½
world to the threshold of the environmental crisis.
(any other valid answer should be allotted marks)
OR
Mention any two advantages of organic farming in India.

Answer: Advantages of Organic farming:

i. Provides healthy food grown through natural processes.
ii. Generates higher income through exports, as demand for these 1½
organically grown crops is rising at a faster rate than chemical
grown food. (any other valid answer should be allotted marks) 1½

29 Discuss the role of the rural banking system in the process of rural
development in India.

Answer: In India, the rural banking system has come up with a lot of
support for the farmers and has led to rural development, directly or
indirectly.
i. Farmers have begun to avail adequate credit at cheaper rates 1½
from the formal credit sources for their production needs.
ii. It has helped to increase the rural farm and non-farm output, 1½
income and employment in rural areas.
(any other valid answer/argument to be marked)

30 The policy of liberalisation changed the role of Reserve Bank of India

(RBI) from ‘a regulator’ to ‘a facilitator’ in the financial
sector. Defend or refute the given statement with valid arguments.

Answer: The given statement is defended. Financial institutions in

India are regulated through various norms of the Reserve Bank of
India (RBI).
As a regulator (prior to liberalisation), RBI used to fix interest rate
structure for the commercial banks, however, as a facilitator (post-
liberalisation) the RBI now facilitates the free market forces to act
accordingly. In the post liberalisation era, greater autonomy has been
ensured for financial institutions for their functioning. 4
(to be marked as a whole) (Any other valid argument to be marked accordingly)

31 Compare India and Pakistan on the basis of their demography

Answer: India and Pakistan can be compared on demographic front as

follows (as per the World Bank Report 2015):
i. The population growth rate of the two nations is growing
rapidly. Indian population is growing at around 1.2% p.a.
whereas that of Pakistan is growing at around 2.1% p.a.
ii. The fertility rate of the two nations depicts the clear reason
for the difference in the population growth rate. The fertility

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rate on an average of India stands at 2.3 kids per female and

that of Pakistan stands at 3.7 kids per female.
iii. The sex ratio of the two nations stand quite near to each
other, showing preference of male child in both the nations.
India stands at 929 females per 1000 males and Pakistan 2+2
stands at 947 females per 1000 males. (any two points)
(any other valid answer/argument to be marked)
(marks should not be deducted if data is not provided, as data is only indicative in nature)

32 Discuss briefly the rationale behind choosing ‘self-reliance’ as an

objective for the planning process of the Indian economy.

Answer: ‘Self-reliance’ as an objective for the planning process of the

Indian economy was promoted by the policy makers to avoid
dependence on the foreign countries on account of goods, capital and
technology. It was feared that dependence on imported food supplies, 4
foreign technology and foreign capital may make India’s sovereignty
vulnerable to foreign interference in our policies.

OR
‘‘India is often called as ‘outsourcing hub’ of the world.’’ State and
discuss the prime reasons for this name given to India.

Answer: Reasons for India as outsourcing destination-

i. Availability of skilled manpower- India has vast skilled 2
manpower which enhances the faith of MNCs for investment
in India. 2
ii. Favourable Government policies- MNCs get various types of
lucrative offers from the Indian government such as tax
holidays, tax concessions etc.
(any other valid argument should be allotted marks)

33 (a) Define worker-population ratio. What does it signify?

Answer: Worker-population ratio is calculated by dividing the total
number of workers in a country by the population of the country and
multiplying it by 100. 2
Worker-population ratio is an indicator which is used for analysing the
employment situation in the country. This ratio is useful in knowing
the proportion of population that is actively contributing to the
production of goods and services of a country. 2

(b) Discuss any two reforms which have been initiated recently to
meet the energy crisis in India.
Answer: Two reforms to meet energy crisis in India are as follows:
i) Improvement in Plant Load Factor has increased the operational 1
efficiency of the power stations.
ii) Check on transmission and distribution losses have reduced the
transmission losses and saved a lot of funds for the power 1
distribution companies. (any other valid argument should be allotted marks)
OR

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‘‘In India, the Poverty Alleviation Programmes have been found

unsatisfactory due to many reasons.’’ Comment on any three such
reasons.
Answer: Poverty Alleviation Programmes (PAPs) have been found
unsatisfactory on the following counts:
i. The staff members responsible for the implementation of PAPs
could not work efficiently because of complex procedures. 2
ii. Lack of monitoring and follow up actions also lead to the
failure of PAPs. 2
iii. Control of the power groups of the villages, over the delivery
mechanism of the PAPs, was another reason for the 2
unsatisfactory results. (any other valid point should be allotted marks)

34 (a) State how investment in human capital contributes to growth of an

economy.
Answer: Investment in human capital formation enhances efficiency,
skill, capabilities implying economic growth. Human Capital
formation stimulates innovation and creates ability to absorb new 4
technology. Technical skills acquired through sources of human
capital formation such as education, training and sound health etc.
provides opportunity to labour supply to make better use of given
resources. (to be marked as a whole)

(b) Define the following (Any two) :

(i) Golden Revolution
(ii) White Revolution
(iii) Green Revolution

ANSWER:
i. Golden revolution- A significant increase in the production of
horticulture in India is termed as Golden Revolution.

ii. The movement for massive rise in the milk production in

India is termed as white revolution; it is a system whereby
milk producers of an area may pool their milk to take
advantages of cooperative sale system.

iii. Green Revolution refers to large scale increase in production

of food grains (like wheat, rice etc.) resulting from the use of 1+1
high yielding variety seeds, chemical fertilizers, modern
sophisticated agricultural machines/tools/equipments etc.

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