SampleQuestion Paper

tes Maxitnum Marks : 40

Alloa'Cd: 90
Titne
INSTRUCTIONS:
GENERAL two parts — Section A: Introductory Macroeconomics (18 marks)
(l) Questionpapercont,uns
Section B: Indian Econmnic Developntent (22 marks).
in thc question paper. All questions are ccnnpulsory.
Thereare 40 questions
I to 3 and 19 to 23 are Multiple Choice Questions (MCQs).
(it) Questionsno.
4 to 6 and 24 to 28 are Assertion-Reason type Questions.
(iil)Questionsno.
to 18 and 29 to 40 are Case Study Based MCQs.
(it') Questionsno. 7
inside this Test Booklet. When you are directed to open the Test Booklet, take out
(v) The Answer sheet is
the Answer Sheet and fill in the particulars on SIDE-2 carefully with Blue/Black ball point pen only. In no
case pencil is to be used. Read "General Instructions for Candidates" on SIDE-I carefully.
(VI) The candidateshould ensure that the Answer Sheet is not folded. Do not make any stray marks on the Answer Sheet.
Do not write your Roll Number anywhere else except in the specified space in the Test Booklet/Answer Sheet.

SECTION-A (Introductory Macroeconomics)

1. The balance of trade shows a deficit of {500 crores, the value of exports is {1000crores. What is the
value of imports?
(a) {1,500crore (b) <500 crore (c) {5,000 crore (d) {1,000 crore
2. Whichof the following is not included in money supply?
(a) Currency held by public (b) Inter-bank-deposits
(c) Demand deposits in Banks (d) Saving deposits with post office banks.
3. Fiscal deficit — = Primary deficit. (Fill up the blank with a correct alternative)
(a) Subsidies (b) Dividends (c) Interest payments (d) Revenue deficit
Read thefollowing statements —Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
(a) Assertion and Reason both are correct Statements and Reason is correct explanation for Assertion.
(b) Assertion and Reason both are correct statements but Reason is not correct explanation for Assertion.
(c) Assertion is true but Reason is false.
(d) Assertion is false but Reason is true.
4. Assertion (A): Demand deposits are also called bank money.
Reason (R):Demand deposits are created by commercial banks.
5. Assertion (A): The trade account is also called the merchandise account.
Reason (R):The balance of exports and imports of visible and invisible items is called balance of trade.
6. Assertion (A): Capital expenditure creates assets for the government.
Reason (R): Repayment of loans is an example of capital expenditure.
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 7 to 10):
The Reserve Bank of India (RBI) on Friday kept interest rates on hold while assuring to maintain
support for reflecting the economy by ensuring ample liquidity to manage the government'snear-
record borrowing.
OMR-I
 OMR—2 ShivDasChaptorwise Question Bank (Economics Xll)

lhe six-member MonetaryPolicyCommittee (MPC)voted to continue with the accommodative Stance

as long as it is necessary to revive growth and mitigate the impact of Covid-19 on the economy while
ensuring that inflation remains within the target, Governor Shaktikanta Das said,
While the Union Budget 2021 laid down an expansive fiscal strategy over the mediurn term to strengthen the
growth engine In the economy, the RBIaffirmed its support to such a plan through appropriate monetary tools.
To absorb higher government borrowings, the Central Bank provided retail investors a direct option
to invest in government securities. It also sapped some funds from banks by raising the Cash Reserve
Ratio (CRR)and using the money for more targeted market operations.
The MPC, which cut borrowing costs by 115 basis points last year, kept the repurchase or repo rate
unchanged at 4 percent. Consequently, the reverse repo rate will also continue to earn 3.35 per cent for
banks for their deposits kept with the RBI.
Das announced the restoration of CRR- the amount of deposits lenders must set aside as reserves - to
3.5 per cent in March and 4 per cent in May.
The cash returning to the central bank can be used by it for open market operations and Other liquidity
measures.
7. The two essential conditions for a financial institution to become a bank are:
(a) accepting deposits and lending (b) printing currency notes
(c) both (a) and (b) (d) neither (a) nor (b)
8. Which of the following is not a quantitative method of credit control?
(a) open market operation (b) bank rate policy
(c) legal reserve requirements (d) margm requirements
9. The central bank does not performs the following functions.
(a) conducts sale and purchase of securities for foreign governments securities.
(b) acts as a lender of the last resort.
(c) controls money supply and credit.
(d) manages the nation's reserves of international currency.
10. Loans offered by commercial banks the money supply in the economy.
(a) Decrease (b) Increase (c) No change (d) None of these
Read the given para and answer thefollowing MCQs by choosing the most
No. 11 to 14):
appropriate options (Question
The Union Budget, which is presented by the Finance Minister of India,
comprises Capital Budget and
Revenue Budget. The Capital Budget is further categorised into capital
receipts and capital expenditure.
Capital receipts are receipts that create liabilities or reduce financial assets.
cash flows. Capital receipts can be both non-debt and debt receipts. They also refer to incommg
Loans from the general public,
foreign governments and the Reserve Bank of India (RBI)form a crucial
part of capital receipts.
Capital receipts are loans taken by the government from the public, borrowings
and institutes, and borrowings from the RBI.Recovery of loans given from foreign countries
by the Centre to states and others
is also included in capital receipts. In the balance sheet, capital receipts
are mentioned in the liabilities
section. The capital receipt has a nature of non-recurrence.
All capital receipts are tax-free, unless there is a proviso to tax it.
Capital receipts can be both non-debt
and debt receipts.
Non-debt receipts are those which do not incur any future repayment burden
Almost 75 per cent of the total budget
for the government.
receipts are non-debt receipts like recovery of loans and
disinvestment, issue of bonus shares, etc. advances,
Debt Receiptshave to be repaid by the government. Around 25 per
cent of government expenditure
is financed through borrowing.A reduction in debt receipt (or borrowing)
economy's financial
can be a big leap for the
health. Most of the capital receipts of the government are debt
loans, issuance of special securities to public-sector banks, external debt, receipts like Market
etc.
11. Following is not a characteristic of capital receipts:
(a) they are irregular and non recurring.
(b) they create a future obligation to return the amount.
(c) they decrease government's liabilities.
(d) they lead to reduction in assets of the government.
 OMR Based Sample
Question Paper • OMR—a
an implication of fiscal deficit:
following is not
circle of borrowings is created.
(a) a viciousdeflationary pressure.
(b) leads to
foreign dependence.
(c) increases
economic burden for future generations
('O creates
expenditure refers to the expenditure which neither assets nor liabilities.
13.Revenue reduces (b) reduces, creates
(a) Creates, (d) Increases, creates
increases
(c) Creates,
the following statements is true?
14.Whichof is a revenue receipt.
(a) loans from IMFdeficit necessarily leads to higher fiscal deficit.
(b) higher revenue
government represent a situation of fiscal deficit.
(c) borrowings by
the excess of capital receipts over the revenue receipts
(J) revenue deficit is
answer the following MCQs by choosing the most appropriate options (Question
Readthe givenpara and
No. 15 to 18):
India posted its first current account surplus of 1.7% of GDP in April-December 2020 quarter after mne
years. The last time we witnessed a surplus was in 2007. Many analysts and trade pundits welcome
shot in the arm to investor confidencein the country as
this development as it can give a much-needed
well as the Indian currency.
A current account surplus has a direct positive impact on the rupee. The current account reflects all
payments between countries for goods, services, dividends and interests. A surplus in the current
account means that the country is expected to receive payment in rupees. This means other countnes are
likely to buy rupee and sell foreign currencies. This means the rupee could appreciate in the near future.
Whilea current account surplus is welcome, it is important to understand how the surplus has been
achieved. A current account surplus occurs partly due to an increase in exports. This leads to a stronger
economyand an increase in consumer spending.
On the other hand, it could also be a result of weak domestic demand. This could result in lower
consumer spending and decrease in imports. Meanmg, exports did not rise, but imports fell. Hence,
analystsin some quarters feel that a surplus indicates a weak economic growth in the country.
Some analysts feel that a current account surplus is not a cause for celebration as it reflects weak
Investment demand in the country. This directly impacts the pickup of imports from the country. In the
last four months itself, imports fell by 16.33%due to lower gold and oil imports. This reflects poorly on
the investment opportunities in the country.
15. Account transactions bring about a change in the current level of a country's income.
(a) Capital (b) Current (c) Fixed (d) None of these
16. Identify the incorrect statement from the following:
(a) capital account is a stock concept
(b) capital transactions bring about a change in the capital stock of a country.
(c) capital account includes portfolio investments
(d) capital account surplus arises when debit items are more than credit items.
17. International transactions which take place due to some economic motive are called
(a) accommodating transactions. (b) autonomous transactions.
(c) both (a) and (b) (d) neither (a) nor (b)
18. Match the following:
Column I Column
Il
I. Accommodatin transactions A. inflows of foreign exchange
2. Balance of trade B. one way transaction.
3. Unrequited transactions C. difference between exports and
imports of goods.
4. Credit side D. transactions done to cover the deficit or surplus in BOP
 OMR—4 ShivDasChapterwise Question Bank (Economics XJI)

SECTION-B(Indian Economic Development)

19. Indian economy on the eve of Independence displayed the following characteristics:
(a) colonial (b) stagnant
(c) backward (d) all of the above
areas and is now
20. Identify the program which was launched to promote self employment in rural
known as Deendayal Upadhyay Yojana-National Rural Livelihoods Mission.
Yojana
(a) Swarnapyantl Gram Swarozgar Yopna (b) SampoornaGrameen Rozgar
Yojana
(c) SwarnajayantiShakti Rozgar Yojana (d) SampoornaGram Swarozgar
21. The second stage of demographic transition began;
(a) after 1921 (b) before 1921
(c)from1921 (d) none of the above
22. Which of the following is not a merit of human capital formation?
(a) Improves technical knowledge (b) Enlarges the size of business
(c) Increasescost of prod uction (d) Changes social outlooks
23. More than of the world's poor live in India.
(a) half (b) one-third (c) one-fourth (d) one-fifth
alternatives given
Read the following statements—Assertion (A) and Reason (R). Choose one of the correct
below:
Assertion.
(a) Assertion and Reason both are correct statements and Reason is correct explanation for Assertion.
(b) Assertion and Reason both are correct statements but Reason is not correct explanation for
(c) Assertion is true but Reason is false.
(d) Assertion is false but Reason is true.
24. Assertion (A): On-the-job-training is a source of human capital formation.
Reason (R): Workers may be sent off-campus for training.
25. Assertion (A): Under the New EconomicPolicy, quantitative restrictions on imports and exports were
greatly reduced.
Reason (R): The inward looking trade strategy, followed before 1991, increased the efficiency and
competitiveness of domestic industries.
26. Assertion (A): During the pre-Britishperiod, the land settlement system was one of the main reasons
for stagnation in agriculture.
Reason (R): Though, a large proportion of the population was dependent on agriculture, the country
was not self-sufficient in food.
27. Assertion (A):The Government plays an important role in education and health service markets.
Reason (R): Government has acquired monopoly power in the education and health service markets.
28. Assertion (A): Unemployment and underemployment are majorly responsible for poverty in India.
Reason (R): The poor are unable to acquire quality education and skills.
Read the given para and answer the following MCQs by choosing the most appropriate options (Question
No. 29 to 32):
The Green Revolution changed India's status from a food deficient country to one of the world's leading
agricultural nations. Until 1967,the government largely concentrated on expanding the farming areas.
But the population was growing at a much faster rate than food production. This required immediate
and drastic action to increase the yield which came in the form of the Green Revolution.
The three basic elements in the method of the Green Revolution were-continuing expansion of farming
areas, double cropping in the existing farm land and using seeds with improve genetics. Green
Revolution was a technologypackage consistingof improved High YieldingVarieties of two staple
serials (rice and wheat), irrigation or controlled water supply and fertilizers and pesticides. The Green
Revolution has enabled the government to procure sufficient amounts of food grains to build a stock
which could be used in times of food shortage.
 OMR Basod Sample Question Paper
• OMR—S
benefited the Revolution, the involved
nation had
while the risk the it would the
risks.one such the big the required
since onlv thereby of
and JndJ,1has also failed to extend the concept of I
the Green Revolution. Yield Varjety
the benefits of or regions and has largely retnajned confined to food only.
to all crops the following:
seeds from
Identify the correct also called the wheat
29. phase of Green
(a) The helped in removing the inequalities in rural poverty,
Green revolution dependence on tnonsoons for irrigation.
revolution helped in rernoving the
(c) Green fixed the nunimum support price to ensure fair returns to the farmers
(d)Governnwnt production is meant for self consumption.
30. In farnung (b) Vertical farnung (c) Dry farming (d) None of these
(d) Subsistence matching them with respective
correct sequence of alternatives given in Column Il by
31.Identify the
terms in Column l.
Column I Column Il
A. Increase in production of food grains using High Yielding
1. Land Ceiling Variety seeds.
B. Portion of Agricultural produce sold in the market.
2. Land Reforms
C. Fixing the maximum limit of land holding for an individual.
3. Green Revolution
4. Marketed Surplus
D. Change in the ownership of land (land to tillers)

32.Whichof the following is not a land reform measure?

(a) Abolition of intermediaries. (b) Tenancy reforms.
(c) Fixation of minimum support prices for crops. (d) Ceiling on land holdings.
Readthegiven para and answer thefollowing MCQs•by choosing the most appropriate options (Question
No. 33 to 36):
Liberalisationhas tremendously expanded the scope of the private industry in India. Prior to
liberalisation, 17 of the most important industries were exclusively reserved for the public sector. Later
many of the industries were liberalised. Industries in the private sector faced several regulations like
Industrial Licensing,clearance from MRTP Act and Foreign Exchange restrictions etc. which would
hinder private investments.
With the liberalisationpolicy, these restrictions were removed, offering large scope for the expansion
of the private sector. The liberalisation policy of the Government has strengthened the performance of
Indian industries by becoming more competitive. Contrary to the fear expressed by several people that
liberalisationwould result in foreign competition and strangling down of Indian industries, several
Indian industrieshave substantiallyincreased their sales and also profits.
The increasein competition is reflected in the increase in marketing costs and fall in profitability, .but
total profits have increased, due fo higher sales. Another indication of increasing competitive strength
of Indian companiesis the rise in their export intensity, i.e., the ratio of exports to total sales. The
growth impulse provided by the liberalisationhas increased competition in the domestic market and
also larger business opportunities in foreign maykets.
33. one of the taxes eliminated after implementation of goods and services tax.
(a) VAT (b) Custom duty
(c) Sales tax (d) None of these
34. Trade between more than two countries is known as:
(a) bilateral trade (b) multilateral trade
(c) foreign trade
35. (d) both (a) and (b)
Identify the correctsequenceof
alternatives given in Column Il by matching them with respective
 OMR-G ShivDasChapterwise Question Bank (Economics Xll)
Il
Column
ColumnI
2017
'I. Establishtnentof eneral a 'reement on trade and tariff
B. 2016
2. Establtshtnent of World Trade Or anisation
c. 1948
3. 1m lenwntatton of CST
1995
4, Demonetisation b Indian overnment

36. Which of the following is not a tax reform?

(a) simplification of the tax procedures. (b) devaluation of rupee.
(c) removal of export duties. (d) both B and C
Read the given para and answer thefollowing MCQs by choosing the most appropriate options (Question
No. 37 to 40):
Due to the economicdownturn caused by Covid-19pandemic, India's GDP contracted by 23.9 %. in
the first quarter. However, a silver lining in this degrowth scenario can be noted as agriculture grew by
3.4%.Despitegreen shoots, agriculturein India has been ailing for a long It has been grappling
with issues like fast depleting groundwater, soil degradation, fragmented markets barely functioning
agricultural extension services and speeding up of climate change.
It is due to these factors that agriculture cannot overturn contraction in other sectors, but along with
the non-farm rural sector, it could jump-start the economy. Apart from this, Non-Farm rural activities
(livestock,fisheriesand food processing,etc.) are advantageous in lifting the poor above the poverty
line. Therefore,it becomesimperativeto identify the issues of the non-farm rural sector in India to
focus on building strong growth links between the non-farm rural economy and agriculture.
The non-farm sector, particularly in rural areas, is being accorded wide recognition in recent years. A
planned strategy of rural non-farm developmentmay prevent many rural people from migrating to
urban industrial and commercial centres. Non-farm rural industries are generally less capital-intensive
and more labour absorbing.Thus, they can play a criticalrole in employment growth in rural areas.
Efforts are needed to identifyappropriateand effectiveinstitutionalvehicles for the development of
non-farm sector policy and interventions for creating employment opportunities.
37. Identify the incorrectstatementregarding self help groups from the given statements:
(a) SHGs focus on rural poor, small and marginal farmers etc.
(b) it is a micro credit program.
(c) they provide long term credit.
they promote thrift in small proportions by a minimum contribution from each member.
38. Cooperatives have received a setback during the recent past due to:
(a) inefficient financial management.
(b) lack of appropriate link between marketing and processing cooperatives.
(c) fluctuating farm production.
(d) both (a) and (b)
39. Horticulture provides remunerative employment options in the following
(a) flower harvesting
areas:
(b) hybrid seed production
(c) nursery maintenance (d) all of the above
40. From the given statementsin Column I and Column 11,identify the
correct pair of statements:
Column I ColumnIl
1. Organic Farming A. rise in the production of fruits and vegetables
2. Diversification B. eco friendly system of agriculture
3. White Revolution C. pooling and then marketing of milk through cooperatives
4. Golden revolution D. shifting of workforce from agriculture to other
allied activities
(a) I-A
(d) 4-0