Pre-Boàrd -2

Session 2021-22
Subject-Economics (030)
Time: 1Y hrs. Class XII
GENERAL INSTRUCTIONS: M.M:40
There are a total 60 questions in this paper out of which 50 questions are to be attempted.
2This 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.
.
S. All questions
carry equal marks.
There is no negative marking.
SECTION-A
Which of the following is not a function of Ceptral Bank in India?
(a) Controller of money supply in the economy
(6) Creator of money supply in the economy
(c) Banker to the government and banks
(d) Custodian of foreign exchange reserves
Components' of money supply in India includes.....
(a) curency with public and time deposits with post offices and..
(b) currency with public and time deposits with commercial banks
(C) Cumency with public and demand deposits with
post oftices
(d) Currency with public and demand deposits with commercial banks
Q.3. Choose the correct pair from given below
Column A Column B
A. Currency Authority (i) Commercial Bank
B. Creator of Currency (i) Central Bank Currency
C. CurrencyNote Ciil) Limited Legal Tender
D. Currency Coin . (iv) Minted by Central Government
Choose from the options below
(a) A-(i)
b)B-(i)
(c) C-(il)
(d) D -iv)
Q4 Match the following pairs from given below.
ColumnA Column B
(a) Surplus budget ) Shortage of receipts Over expenditures
(b)Balanced budget 1i) Equality of receipts budget and expenditure
(c) Deficit budget ii) Excess of receipts over expenditures
(d) Revenue deficit (iv)Excess of revenue expenditure over receipts.
Choose from the options below

A BCD
Ti)
A BC D

a) (i) in}iv) oi i) ti) til tiv)

c) fii) tii (ii) (iv) dl iv) li) ti) (i)

Q.5 --deficit is the difference between borrowing and interest payment.

(a) Revenue
(b) Fiscal
(c) Primary
(d) Both (b)and (c)
Q.6 Ms. Sakshi, an economies teacher, was explaining the concept of 'minimum percentage of tlie to.:
deposits to be kept by any commercial bank with the Central Bank of the country, as per norm: and
statute prevailing in the country'.
From the following, choose the correct alternative which specities towards the concept explained by her?
a) Cash Reserve Ratio
b) Repo Rote
c) Bank Rote
d) Statutory Liquidity Ratio

Q.7 Two friends Mira and Sindhu were discussing the exchange rate systems,
Under this system, the exchange rates are determined by the harket forces of demand and sup
However, deliberate efforts are made by the competent authority to keep the exchange rates within a
specific range'.
The above-mentioned statement was given by Sindhu, identify the type of exchange rate system was she
talking about?
a) Fixed Exchange Rate
b) Floating Exchange Rate
c) Managed Floating Exchange Rate
d) Managed Fixed Exchange Rate
I. Read the following hypothetical case study carefully and answer the questions 8-10 on the basis ofthe same:
Shaktikanta Das, the RBI govermor, said that CoVID-19 economic crisis has hit the Indian economy hard but
has improved India's BoP Situation. He further added that we have benefitted from falling prices in the
beginning of COVID crisis plus a weak demand for imported goods.
This was backed by a boom in export of technology focused service sectors which led to a positive chait #
the current account balance. "GDP growth is slowly turning the corner and large capital expent re
a
announced by the government will support economic activity and investment", said RBI governor.
Choose the correct option:

Q.8 Large-scale export of technology focussed service sector produce is a part of:
(a) merchandise account
(b) balance of trade
(c) balance of unilaterals
(d) balance of invisibles
Q.9 Autonomous items in BoP accounting are a part of:
(a) current account
(b) capital account
(c) both (a) and (b)
(d) none of these
payment includes:
Q.10 Measures to improve the adverse balance of
(a) currency devaluation
(b) import substitution
(c) exchange control
(d) all of these

Q.11 Balance of payment is calculated as

(a) it reveals the debt status of the country
(b) it indicate study valuation of country's currency
(c) it unables the government to decide on the fiscal and trade policies
(d)all of these
0.12 During the ninitial phase of industrialisation e», public sector was given leading role due to
which of the following reason(s)?
a) Lack of capital with private sector
b) Equitable distribution of goods in the economy
c) Welfare motive of public sector
d) All of the above
 Q.13 Telegram facility in India was introduced in
ejl850
b)1853
(c)1921
(d) None of these
Q.i4 Jail cost of living was given by.. *

a) Dadabhai Naoroji
b) VKRV Rao
c)P.C. Mahalnobis
d) S.D. Tendulkar

.5 Schedule B IPR 1956 is comprised of how many industries?

(a) l6
(b)12
(c)10
(d)8

.refers to the economic help given by the government to the farmers to reduce the income
gaps of rich and poor farmers.

(a) Loans
(b) Subsidy
(c) Concession
(d) All of the above

7 The two-fold motive of the colonial government leads to systematic deindustrialisation of

IndianHandicraft industry. Choose the most appropriate option from the given below
True
(a)
(b)False
(c) Partially true
(d) Incomplete statement

Q.18 Choose the incorrect fair from given below.

Column A Column B
(A) Schedule A (i)27 public sector ofiPR1956 industries
(B) Land ceiling (i) Fixing maximum limit on holding of land by an individual
(C) Golden revolution ii) Wheat revolution

(D) Dis-Investment (iv)Selling a part bf equity investment holding of PSUs

Choose from the options below
(a) A-(i)
(b) B-i)
(c)C-(ii)
(d) D -(iv)
Q.19 Read the following statements-Assertion (A) and Reason (R). Choose one
of the correct alternatives given below:
Assertion (A): India is emerging as an important outsourcing destination
of the world
Reason (R): India offers an abundant supply of labour at a low wage
rate.
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 Assertion
(c) Assertion (A) is true but Reason (R) is false of (A)
(d) Assertion (A) is false but Reason (R) is true
Q.20 Read the following statements-Assertion (A) and Reason Choose one of the correct alternatives given below:
().
ASSertion (A): NEP has encouraged disinvestment by the government.
come under a severe
NCtson (): Owing to NEP, monctary policy of the governiment has
stress.
Alernatives:
(a) oth Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Renson (R) are true and Reason (R) is not the corect explanation of Assertion (A)
() Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Q.21 Read the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives given below
Assertion (A): Multilateral trade ngreements are trade agreements between any two countries of the world.
Keason (R): Foreign exchange reforms were implemented to resolve Bop crisis in the country
Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(6) 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

Q.22 Read the following statements carefully and choose the correct alternatives given below:
Statement -Poverty line in India is defined in terms of monetary value of the minimum
1

nutritional (calorific) requirements of an individual in a day.

Statement 2 - The definition of poverty line in monetary terms has not changed over the years.
Alternatives:
a) Both the statements are true.
b) Both the statements are false.
c) Statement is true and Statement 2 is false
1

d) Statement 2 is true and Statement 1 is false

Q.23 Churning poor are the people

(a) who are born in poverty, live in poverty and die in poverty
(b) who are below poverty line but are occasionally better-off than those who are always poor
(c) who keep moving up and down the poverty line
(d) none of these

Q.24 Which of the following is related to Agricultural marketing?

a) storage
b) processing
c) preservation
.d) neof these

SECTIONB
Q.25 If CRR is 10 per cent and SLR is 15 percent, value of money multiplier will be
(a) 2
(b) 3
(c) 4
(d) Can't be determined

Q.26 Read the following statements-Assertion (A) and Reason (R). Choose'óne of the correct
alternatives.
given below:
Assertion (A): CRR is determined by the Reserve Bank India.
of
Reason (R): The central bank offers loans to the government
Alternatives: bem
(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 or
 Assertion (A)
(C) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

4 Kead the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
ASsertion (A): All commercial banks function under the control of the central bank.
economy
Keason (R): The principal function of the central bank is to control the supply of credit the
in
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of
Assertion (A)
(D) 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 are true

8 Read the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
ASsertion (A) Currency in circulation is the most liquid form of money.
Reason (R) Liquidity is the' cae of convertibility of an asset into cash..

Alternatives
(a) Assertion (A) is true and Reason (R) is a correct reason of Assertion (A)
(b) Assertion (A) is true, but Reason (R) is not a correct reason of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Both are false

Q.29.... . is the price paid in domestic currency for buying a unit of the foreign currency.
(a) Foreign exchange rate
(b) Cross exchange rate
(c) Interest rate
(a)Trade rate
for
Increase in the value of foreign currency with respect to domestic currency due to rise demand
in
Q.30
foreign currency-is known as:
(a) depreciation
(b) devaluation
(c) appreciation
(drevaluation

Q.31 Which of the following is t included in the current account of BoP?

(a) Government transaction
(6) Private transaction
(c) Foreign direct investment
(d) All of these

Q.32 Balance of payments is composed of:

(a) capital account
(6) current account
(c) both (a) and (b)
(d)none of these

.33 From the set of statements given in Column I and Column II, choose the correct pair of statements
Column 1 Column II
(A) Cooperative farming () A technical reform
(B) Industrial Policy Resolution, 1956 ii) Industrial licensing
(C) Industrial concessions (i11) Given to industries for expanding of existing firms
 (D) Import quota (iv) Lowers the price of imported commodity
Alternatives:
a) A-l
b) B-ii
c)C- iii
d) D-iv

Q. 34 ldentify the incorreet statenment from the following:

1991
a) The programme of economic reforms in India was started on 24th July
based on structura
b) Rising share of industrial sector in the GDP is a sign of economic growth
transfornnation in the economy.
c) Globalisation focuses more on the free movement of labour than capital in the
international market.
d) Despite Green Revolution lndia has to import food grain to meet domestic demand.

Q.35 Read the following statements Assertion (A) and Reason (R):
-

to become
Assertion (A) - Major policy initiatives (land reforms and Green Revolution) helped India
self-sutlicient in food grains production.
after the
Reason(R) - The proportion of people depending on agriculture did not decline as expected
Green Revolution.
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 trueand 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.

Q.36 Inward looking trade strategy relies on:

a) export promotion
b) import substitution
c) export subsidy
d) none of these

Q.37 Industrial Policy Resolution 1956 laid emphasis on the role of

a) public sector
b) private sector
c)joint sector
d) none of these

Q.38 Read the following statements carefully and choose the correct alternatives given below:
Statement 1- Licensing (as in case of liquor) is necessary for the regulation of the industry.
Statement 2-Demonetisation was a mjor event of the Year 1999.
Alternatives:
a) both the statements are true
b) both the statements are false
c) statement is true and statement 2 is false
1

d) statement 2 is true and statement is false

1

Q.39 Read the following statements carefully and choose the correct alternatives given below:
Statement 1- 'Skill India' program launched by the government is an attempt to increase human capital
formation.
Statement2- 'Start- ups' and 'Skill India' programs are complementary to each other.
Alternatives:
a) both the statements are true
b) both the statements are false
 c) statement 1
is true and statement 2 is false
d)statement 2 is true and statement I is
false
Q.40 Identify which of the following statements
is true?
(a The huge investment required in the field of education makes private sector participation in the
of education essential. field
() Education for the children in
age group 6-14 years has been recognised as a right by the Indian
government.
(C) Education leads
to social growth but does not play any significant role in economic
(d) As far as literacy rate is concerned, India growth.
is at par with the developed
countries
Q41 Apart from education, which of the following is a tool for human capital formation?
alternative) (Choose the correct
(a) On-the-job training
(6) Investment in infrastructure
(c) Industrial growth
(d) Agricultural growth

Q.42 Read the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Human capital and human development are not identical concepts.
Reason (R): Human capital is means to achieve human development.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion
(A)
(6) 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 butReason (R) is true

Q.43 Rural Employment Generation Programme aimed at:

(a) self-employment opportunities in small towns and villages
(b) self-employment opportunities only to urban unemployed
(c) self-employment opportunities to educated unemployed
(d) none of these

Q.44 Read the following statements-Assertion (A) and Reason (R). Choose one of the correctalternatives
given below:
Assertion (A): Casual employment pushes people into indebtedness which reinforces poverty.
Reason (R): India is a country sustaining cyclical unemployment.
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

Q.45 Read the following statements carefully and choose the correct alternatives given below:
Statement1- Poverty can be described as lack of capability to earn the essentials of life.
Statement 2 The people who never move above the poverty line are called occasional poor.
-

Alternatives:
a) both the statements are true
b) both the statements are false
c) statement 1 is true and statement 2 is false
d) statement 2 is true and statement 1 is false
 *******

Q.46 Read the following statements carefully and choose the correct alternatives given below:
Statement 1-Capital formation is the key to eradicate the poverty in india
Statement 2 Progressive taxation helps in reducing poverty
-

Alternatives:
a) both the statements are true
b) both the statements are false
c) statement 1 is true and statement 2 is false
d) statement 2 is true and statement I is false

Q.47 Read the following statements-Assertion (A) and Reason (R). Choose one of the correctalternetive
given below:
Assertion (A): Diversification of crops helps stabilisation of farm incôme by lowering the market ri:k.
Reason (R): Livestock farming in India is an important source of employment for the women.
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 or
Assertion (A)
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true

Q.48 Read the following statements-Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A): Non-institutional credit often led to a debt trap for the farmers.
Reason (R): Moneylenders, traders and commission agents charged exorbitantly high interest rates frc
the farmers and manipulated the accounts.
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

SECTION-C
Read the following report carefully and answer the questions 49-54 on the basis of the same: Budget
GDP.
2020-21 estimated the Gross Tax Revenue (GTR) to be 21.23 lakh crore which is10.8 per cent of
over
This builds into growth of 12 per cent over the revised estimates (RE) of2019-20 and 20.6 per cent
personal income tax, cons:ituie
2019-20 PA. The direct taxes, comprising mainly of corporate and
Rí a
around 55 per cent of GTR. These were envisaged to grow al12.7 per cent relative to 2019-20
indirect taxes were expected to grow
27.2 per cent relative to 2019-20 PA. On the other hand, the
11.1 per cent vis-à-vis 2019-20 RE and 15 perent as against 2019-20 PA. The contribution
of difierett.
taxes in GTR as envisaged in 2020-21 BE.
-Economic Survey, 2020-21
Choose the correct option:

Q.49 Which of the following is a direct tax?

(a) Service tax
b) Tax on agricultural income
(c) Value added tax
(d) Customs chaty

Q.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
 (g)these are unilateral payments
(these may be direct or indirect
.51 Wich of the following is not an example of non-tax income ofthe government?
(a) Escheat
(b)Electricity bill
(c Fees
(d)None of these

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
(cIt focuses on GDP by way of public investment
(d) None of these

Q.53 Corporate tax is an example of

a) direct tax
b) indirect tax
c) both a and b
d)inone of these

Q.54 Tax is:

a) an optional payment
b)ia compulsory payment
c)a legal payment
d)both B and C

Read the following hypothetical text and answer the questions that follow(55-60)

The performance of Indian economy during the period of first seven five-year plans (1950-1990) was
satisfactory if not very impressive. On the eve of independence, India was an industrially backward country, but
during this period of first seven plans our industries became far more diversified, with the stress being laid on
the public investments in the industrial sector. The policy of import substitution led to protection of the
domestic industries against the foreign producersbut we failed to promote a strong export surplus. Although
public sector expanded to a large extent but it could not bring desired level of improvement in the secondary
sector. Excessive government regulations prevented the natural trajectory of growth of entrepreneurship as
there wasno competition, no innovation and no modernization on the front of the industrial sector. Many Public
Sector Undertakings (PSUs) incufred huge losses due to operational inefficiencies, red-tapism, poor technology
and otheri similar reasons. These PSUs continued to function because it was difficult to close a government
undertaking even it is a drain on country's limited resources. On the Agricultural front, due to the measures
taken under the Green Revolution, India more or less became self sufficient in the production of food grains.
So, the needs for reform of economic poliey was widely felt in the context of changing global economic
scenario to achieve desired growth in the country.

Q.55 Which of the following was not a reason for the public sector to play a major role in the initial phase of
Indian Economic Planning?
(a) Private entrepreneurs lacked sufficient capital for investment.
(b Govenment aimed at social welfare.
(c The market was big enough to encourage private industrialists for investment.
(d) The government wanted to protect the indigenous producers from the foreign competition.

0.56 Inward looking trade strategy aimed at....

(a)iprotecting domestic Industries from International
competition
(bIndustrialization
(cImproving performance of public sector
(dNone of the above
Q.57 Mechanization of the Indian agriculture was one of
the causes of..in India.
(a) Green Revolution
(b) White Revolution
(c) Yellow Revolution
(d) None of the above

Q.58 Read the following statements Assertion (A) and Rcason

-
(R).
Assertion (A): Many public sector undertakings incurred
huge losses due to operational inefficiercies
Reason (R): Red-tapism was one of the reasons for continuation
of such enterprises.
Select the correct alternative from the following:
(a) Both Assertion (A) and Reason (R) are true,
and Reason (R) is the correct explanation of the
Assertion (A).
(6) Both Assertion (A) and Reason (R) are true,
but Reason (R) is not the correct explanation of the
Assertion (A).
(c) Assertión (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.

Q.59 Public sector aimed at

a) profit maximization
b) human welfare
c) social welfare
d) none of these

Q.60 In the growth strategy of (1950-90), large scale industry was developed with a view
to :
a) achieving the objectives of employment and equity
b) building an infrastructural base in the country
c) achieving the objective of Social Justice
d) none of these