STD 12 Economics Pre Board QP (21-22) Set I

Page 1 of 14 SET I
THE PSBB MILLENNIUM SCHOOL – GST & GERUGAMBAKKAM

PRE BOARD EXAMINATION – 2021 – 2022
ECONOMICS (030)
SET I
Class: XII Time: 90 Minutes
Date : Marks: 40
General instruction:
1. There are a total 60 questions in this paper, out of which 50 questions are to be attempted.
2. The paper is divided into three sections:
a. Section A contains 24 questions. Attempt any 20.
b. Section B contains 24 questions. Attempt any 20.
c. Section C contains 12 questions. Attempt any 10
3. All questions carry equal marks.
4. There is no negative marking.
-----------------------------------------------------------------------------------------------------------------------------
Section A
1. Capital expenditure is that estimated expenditure of the government by which
(a) Assets are increased
(b) Liabilities are decreased
(c) Both (a) and (b)
(d) Assets and Liabilities do not change
2. __________ refers to a system in which exchange rate for a currency is fixed by the government.
(a) Flexible exchange rate
(b) Floating exchange rate
(c) Fixed Exchange rate
(d) None of the above.
3. Those who regularly move in and out of Poverty are called __________.
(a) Chronically poor
(b) Churning poor
(c) Occasionally poor
(d) Transient poor
4. Decrease in value of any Country’s currency is ____________.

(a) Revaluation
(b) Devaluation
(c) Deflation
(d) All of the above.
5. Read the following statements carefully and choose the correct alternative from the following:
Statement 1: Buying goods from foreign countries is an expenditure for our country and income for
that foreign country.
Statement 2: Government of India initiated ‘Make in India’ to increase exports and manufacturing
infrastructure to attract investment from across the globe.
Page 2 of 14 SET I
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.
6. Pooja and Anil were discussing about measure to be taken to reduce the gap between rich and poor.
Under this measure government can increase its expenditure to provide free education, health etc.
The above statement was given by Anil. Identify the type of measure taken by Government to reduce
the gap between rich and poor.
(a) Monetary measure
(b) Constitutional measure
(c) Fiscal measure
7. Loans taken from world Bank are recorded in the:

(a) Credit side of the capital account
(b) Debit side of capital account
(c) Credit side of Current account
(d) Debit side of current account.
Statement 1: The SHG’s promote thrift in small proportions by a minimum contribution from each
member.
Statement 2: The institutional structure of rural banking consists of multi-agency institutions expected
to dispense adequate credit at cheaper rates.
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.
9. The calorie requirement is higher in the rural areas because:

(a) They do not enjoy as much as people in the urban areas
(b) Food items are expensive
(c) They are engaged in mental work
(d) People are engaged in physical labour.
10. Capital receipt is that receipt of the government which:

(a) Creates a liability
(b) Reduces the assets
(d) Neither (a) and (b)
11. Diversification in agriculture activities means finding alternative employment in

(a) Non-farm sectors
(b) Urban sectors
(c) Rural sectors
(d) None of these.
Page 3 of 14 SET I
12. From the following given sets of statements in column I and Column II, choose the correct pair
of Statement.
Column I Column II
(i)Rural Employment Generation (A)Generate wage employment for poor
Programs
(ii) Swarnajayanti Gram Swarozgar (B)Provides Minimum basic amenities
Yojana
(iii) Integrated Child Development (C) Improving the food and nutritional
Scheme status of the poor
(iv) Valmiki Ambedkar Awas Yojana (D) Encouraged to save and lend among
themselves.
Alternatives:
(a) (i) – A
(b) (ii) -B
(c) (iii) – C
(d) (iv) – D
13. Fiscal deficit =

(a) Total expenditure – total receipts other than borrowing
(b) Revenue Expenditure – Revenue Receipts
(c) Capital expenditure – Capital receipts
(d) Revenue Expenditure + Capital expenditure – revenue Receipts.
Statement 1: Primary deficit refers to the excess of total expenditure over total receipts during the
given fiscal year.
Statement 2: Primary Deficit indicates borrowing requirements of the government to meet deficit.
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.
15. Relative Poverty is prevalent in

(a) Capitalist Countries
(b) Socialistic Countries
(c) Communist Countries
(d) Developed Countries
16. _____________ was set up in 1982 as an apex body to coordinate the activities of all institutions
involved in the rural financing system.
(a) Regional rural bank
(b) Cooperative Bank
(c) NABARD
(d) Land Development Banks
Page 4 of 14 SET I
17. Sources of Human Capital Formation:

(a) Only Internal
(b) Only External
(c) Both Internal and External
18. ____________ affects the assets and liabilities of government.

(a) Taxes
(b) Fees and fines
(c) Disinvestment
(d) Forfeiture of bonds
Statement 1: Through agricultural marketing system, the farmers can sell their surplus in the retail
market.
Statement 2: Diversification of crop production implies shift from farming to non-farm activities.
Alternatives:
20. ____________ project was initiated to train women in latest agricultural techniques and
encourages women to actively participate in raising agricultural and family income.
(a) SHG
(b) MGNREGA
(c) SAGY
(d) TANWA
21. The rural banking structure in India consists of a set of multi-agency institutions. ________ is
expected to dispense credit at cheaper rates for agricultural purpose to the farmers.
(a) Small Industries Development Bank of India
(b) Regional Rural Bank
(c) NABARD
(d) Cooperative societies.
22. Human Capital includes:

(a) Health
(b) Education
(c) Professional Skill
23. It is ___________ training when the workers are trained in the firm itself under the supervision of a
skilled worker.
(a) Migration
(b) Social medicine
(c) On-the -job
Page 5 of 14 SET I
24. Minimum wages Act, minimum support price and free mid-day meal are _______ measure to reduce
inequalities of income and wealth.
(a) Constitution
(b) Legislative
SECTION -B
25. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A):Current Account Deficit occurs when the foreign exchange payments on the account
of visible, invisibles and current transfers are in excess over the receipts of visible, invisible and
current transfers.
Reason (R): Trade deficit exists if a country is facing a situation of Current Account Deficit.
From 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. Change from $1 = 71.49 INR to 72.82 is called ____________.

(a) Appreciation
(b) Depreciation
(c) Revaluation
(d) Devaluation
Assertion (A):Indian economy ispredominantly rural economy.
Reason (R): As per 2011 census, the country’s rural population is almost 83.25 crore (68.8% of
total population).
Alternatives:
Assertion (A).
(b) Both assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion(A).
28. What is the name of the vegetables and fruit market in Andhra Pradesh?
(a)Apni Mandi
(b) Hadaspar Mandi
(c) Rythu Bazars
(d) Uzhavar sandais
Page 6 of 14 SET I
29. Identify Which of the following statements is true?
(a) Fiscal deficit is difference between planned revenue expenditure and planned revenue receipts.
(b) Fiscal deficit is difference between total planned expenditure and total planned receipts.
(c) Primary deficit is the difference between total planned receipts and interest payments.
(d) Fiscal deficit is sum of primary deficit and interest payment.
Assertion (A): In India, the concept of poverty line is used to measure absolute poverty.
Reason(R): It is a poverty in which a person or a group of persons living below poverty line.
Alternatives:
Assertion (A).
(b)
(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.
31. From the set of pairs given in ColumnI and Column II, choose the correct pair:
Column I Column II
A. Exports and imports of goods (i) Accommodating item
B. Foreign Exchange reserve (ii) Autonomous item
C. Balance of Trade (iii) Difference between the exports
and imports of visible items.
D. Unilateral transfers (iv) Factor incomes in the form of
interest, rent etc.
Alternatives:
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)
32. Figure showing Growth of livestock in Major States between 2012 to 2019.
On the basis of given bar diagram, Identify the states which are able to increase the livestock as
compared to other states between 2012 – 2019.
(a) Uttar Pradesh, West Bengal, Maharashtra, Telangana.

(b) West Bengal, Madhya Pradesh, Telangana, Andhra Pradesh
(c) Rajasthan, Bihar, Karnataka, Gujarat
(d) Uttar Pradesh, West Bengal, Maharashtra, Bihar
Page 7 of 14 SET I
33.
On the basis of the above-mentioned

mentioned information answer the following question:
The Real Per Capita Income of India (as per the given data) has increased by ____________
(approximately) between 1951 to 2016-17.
2016 17. Fill in the blanks with correct alternative.
(a) 915%
(b) 1015%
(c) 815%
(d) 715%
Assertion (A): Current account transactions bring about change in the capital stock of a country.
Reason (R): ‘Make in India’ will ill increase supply (inflow) of foreign exchange in India causing
improvement in the balance of payments position.
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 Reasonason (R) are true and reason (R) is not the correct explanation of
Assertion (A).
Page 8 of 14 SET I
Statement 1: “Jail Cost of Living” Index was introduced by Amartya Sen.
Statement 2: Human Capital contributes substantially not only towards increasing labour
productivity but also stimulates innovation, creates ability to absorb new technologies.
Alternatives:
36. If the government increase tariff on imports of goods, how will it impact the state of BOP?
(a) This will lead to inflow of foreign exchange
(b) This will lead to outflow of foreign exchange
(c) There will be no impact on the state of BOP
Assertion (A):Poverty can bereduced even when income of the poor does not rise.
Reason (R): The poor can be offered essentials of life at subsidized rates.
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 butReason (R) is not the correct explanation of
Assertion (A).
Statement I: The flexible exchange rate system gives the government more flexibility to maintain
large stocks of foreign exchange.
Statement II: In the managed floating rate system, the government intervenes to buy and sell
foreign currencies.
Alternatives:
(a) Both statements are true.
(b) Both statements are false.
(c) Statement I is true and Statement II is false.
(d) Statement II is true and Statement I is false.
Assertion (A): Rapid Expansion of the banking system had a positive effect on rural farm and non-
farm output, income and employment.
Reason (R): The institutional credit arrangements continues to be inadequate as they have failed to
cover the entire rural farmers of the country.
Page 9 of 14 SET I
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 but Reason
eason (R) is not the correct explanation of
Assertion (A).
Assertion (A): Capital formation is the key to eradicate the poverty in India.
Reason (R): Lack of Capital implies lack of production capacity – low production capacity implies
low opportunities of employment. -Low
- level of employment implies high level of poverty.
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 but Reason (R) is not the correct explanation of
Assertion (A).
(c) Assertion
ion (A) is true but Reason (R) is false.
Assertion (A): Accommodating items of trade are undertaken to maintain the balance in the BOP
account.
Reason (R): Accommodating items are net consequences of autonomous transactions that are
undertaken to correct disequilibrium in autonomous items of BOP.
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 but Reason (R) is not the correct explanation of
Assertion (A).
42. Choose the correct alternatives to be filled in given blanks A and B:
Literacy
Development
B A
of Rural India
Infrastructure
Develop
ment
Page 10 of 14 SET I
Alternatives:
(a) Female literacy and land reforms
(b) Sanitation and Public Health
(c) Land Reforms and Poverty alleviation
(d) Irrigation and construction of village roads.
43. Various governments in India, at different times for different reasons introduced debt relief/waiver
schemes. Some economists argue that such schemes are extremely beneficial to the poor and
marginalized farmers while others argue that these schemes add to the fiscal burden of the
government. Others believe that theses schemes may develop the expectation of repeated bailouts
among the farmers which may spoil the credit culture among farmers.
The rural banking structure in India consists of a set of multiagency institutions. _________ is
expected to dispense credit for cheaper rate for agricultural purposes to farmers.
(a) NABARD
(b) Land Development Banks.
(c) Cooperative Banks
(d) Regional Rural Banks
44. Suppose that the Balance of Trade (BOT)of a nation shows a surplus of Rs.20,000 crore. The import
of merchandise of the nation is half the exports of the merchandise to rest of the world.
The export value would be _____________ crores.
(a) Rs.30,000
(b) Rs.24,000
(c) Rs.40,000
(d) Rs.36,000
Assertion (A): Poverty can be reduced by using labour intensive techniques of production.
Reason (R): India is a countryof large population. Dr Gunnar Myrdal suggested that if India want to
solve the problem of poverty, then it should follow labour intensive technology of production. This
will create employment opportunity in the country.
Alternative:
(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 but Reason (R) is not the correct explanation of
Assertion (A).
Assertion (A): A country always tries to balance the BOP i.e., balance in current account equals to
balance in capital account.
Reason (R): Balance BOP indicates stable economic relation withthe rest of the world.
Page 11 of 14 SET I
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 but Reason (R) is not the correct reason
explanation of assertion (A).
(c) Assertion (A) is true but Reason ® is false.
(d) Assertion (A) is false but reason (R) is true.
47. Identify the correct statement from the following:

(a) Budget deficit is equal fiscal deficit if interest payments are zero.
(b) Zero primary deficit represents a fiscal discipline.
(c) Fiscal deficit is equal to the borrowing requirements of government.
(d) Revenue deficit is need not to be inflationary.
48. Match the situations given in column I with their respective implications given in column II.
Column I Column II
(A) Headcount Ratio (i) 1999
(B) Food for Work Programme (ii) Never Poor
(C) Non-Poor (iii) 1970
(D) Sampoorna Grameen Rozgar (iv) A proportion of persons living
Yojana below the poverty line.
Alternatives:
(a) A-(ii), B-(iv), C-(i), D-(iii)
(b) A-(iv), B- (i), C-(ii), D-(iii)
(c) A-(iv), B-(iii), C-(ii), D-(i)
(d) A-(iii), B-(ii), C-(i), D-(ii)
SECTION – C
Q. No. 49 - 54 are answered based on the following data:
(Rs. in crores)
S. NO. Actual Budget
(2019-20) (2020-21)
1. Revenue Receipts 1684059 2020926
2. Tax Revenue
3. Non-Tax Revenue 1356902 1635909
327157 385017
4. Capital Receipts
1002271 1021304
5. Recovery of loans
18316 14967
6. Other Receipts
50304 210000
7. Borrowings and other
liabilities
933651 796337
8. Total receipts (1+4)
2686330 3042230
Page 12 of 14 SET I
9. Total Expenditure
2686330 3042230
10. On Revenue account of
which
2350604 2630145
11. Interest Payments
612070 708203
12. Grants in aid for
creation of capital
assets
185641 206500
13. On capital Account
335726 412085
14. Revenue deficit (10 – 1)
666545 609219
15. Effective Revenue deficit
480904 402719
16. Fiscal deficit 933651 796337
17. Primary deficit 321581 88134
49. The value of recovery of loan has __________ crores between 2019-20(Actual) and 2020-219
(budgeted estimate)
(a) Fallen by Rs.3349
(b) Risen by Rs.3349
(c) Fallen by Rs.3439
(d) Risen by Rs.3439
50. The percentage change in the Non-tax Revenue, between 2019-2020 (Actual)And 2020-21
(Budgeted Estimate) taking 2019-20 as base year would be ___________.
(a) 15.02%
(b) 16.20%
(c) 17.68%
(d) 20,01%
51. Identify which of the following is not an example of tax revenue for the government.
(a) Wealth tax
(b) Special Assessment
(c) Income tax
(d) Corporate tax
52. Identify the correct formula to calculate Fiscal deficit:

(a) Total expenditure – Total receipts (other than borrowings)
(b) Revenue Expenditure – Revenue receipts
(c) Capital Expenditure – capital Receipts
(d) Revenue Expenditure + Capital Expenditure – Revenue receipt
Page 13 of 14 SET I
Statement 1: Revenue and capital receipts are increasing but borrowings and other liabilities are
reducing.
Statement 2: Grants and aid for creation of capital assets decreased from 2019 to 2021.
Alternatives:
(c) Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and statement 1 is false.
54. The value of Primary deficit for the year 2020-21, would be ___________ crores.
(a) 321581
(b) 96133
(c) 609219
(d) 88134
Question No. 55 – 60 are to be answered based on the following data:
The first ever Human Development Report (2001) of India has been released. It focuses on the vital-
facts related to bureaucratic controls and poor governance of the country. The report was prepared
by the Planning commission under the guidance of its Deputy Chairmen, Mr. K.C. Pant. This 297-
page document was released on April 23, 2002 and submitted to the Prime minister. The report
states that from 1983 to 1993-94, the Human Development Index (HDI) improved nearly 2.6% per
annum and by over 3% per annum during the period 1993-2001. Rural and urban areas have shown
signs of improvement according to the report.
Kerala, Punjab, Tamil Nadu, Maharashtra and Haryana have good HDIs. But States like Bihar,
Uttar Pradesh, Madhya Pradesh, Rajasthan and Orissa have HDIs close to nearly one half to that to
Kerala. Funds must be distributed efficiently and effectively so that human development processes
do not suffer according to that report.
India’s growth in terms of HDI has shown dismal trends during the recent past. Lack of resources,
communal feelings and literacy are chief causes of decay of the average Indian. Further, politician,
bureaucrats and other element of the administration exploits the masses, executives, and business
houses. The economic and political systems need serious transformation. The socio-cultural fabric of
the nation the nation cannot be weaved again because of religious compulsion. Ironically, we believe
in religion so that our passage into the next world could be smooth and sans agonies. But we are
least worried about our course of action (and their outcomes) in this world. Religion often forces us
to dominate other communities and sects. We attack them at opportune moments and face reprisals
from them. This vicious cycle has been going on in India for the past 3000 years.
In order to develop the quality of life of Indians, the administration must become honest, efficient,
productive and agile. Plant workers must increase productivity and eschew violence and strikes.
Businessmen must conduct their business operations with honesty; they never do so. Further,
political parties must guide the electorate and also, the masses towards prosperity and not chaos. Our
psyche has to be changed; a change of government cannot lead us to a new era sans corruption and
poor governance. Economic growth is linked to the benefit of his or her nation. We have least
interest in our nation and that is why, we are not receiving anything from her. The targeted rate of
growth (of GDP) for the tenth plan is 8%. However, the GDP growth rate during Ninth Plan was a
meagre 5.4%. During the Eighth plan, this rate was 6.7%. How can we ensure consistent human
development on a national scale if our results always fall short of targets? Our economy should grow
at the rate of 7-8 percent. During 2001-02. It grew at the rate of 5.4%.
Page 14 of 14 SET I
55. Which State is lag in good HDI according to this report?

(a) Punjab
(b) Kerala
(c) Bihar
(d) Tamil Nadu.
56. When was first report on HRD was published?

(a) In 1998
(b) In 2000
(c) In 2001
(d) In 2005
57. What was the target for GDP Growth during 10thfive-year plan?
(a) 5%
(b) 8%
(c) 7%
(d) 10%
Statement 1: HDI is broadly an arrangement of social aggregates is averages of longevity,
knowledge and access to resources.
Statement 2: As per HDI 2020, India ranks 131th among 189 countries of the world.
Alternatives:
Alternatives:
(c) Statement I is true and Statement II is false.
(e) Statement II is true and Statement I is false.
Assertive (A):Human capital refers to the stock of skill, ability, expertise education and knowledge
in a nation at a point of time.
Reason (R):Human development is an end in itself which refers to the holistic development of the
individuals.
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 but Reason (R) is not the correct reason
explanation of assertion (A).
(c)Assertion (A) is true but Reason ® is false.
(d)Assertion (A) is false but reason (R) is true.
60. India’s HDI ranking is low because of:

(a) Poor literacy rate
(b) Poor educational facilities
(c) Poor health services
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Page 1 of 14 SET I

THE PSBB MILLENNIUM SCHOOL – GST & GERUGAMBAKKAM

4. Decrease in value of any Country’s currency is ____________.

7. Loans taken from world Bank are recorded in the:

9. The calorie requirement is higher in the rural areas because:

10. Capital receipt is that receipt of the government which:

11. Diversification in agriculture activities means finding alternative employment in

13. Fiscal deficit =

15. Relative Poverty is prevalent in

17. Sources of Human Capital Formation:

18. ____________ affects the assets and liabilities of government.

22. Human Capital includes:

26. Change from $1 = 71.49 INR to 72.82 is called ____________.

29. Identify Which of the following statements is true?

(a) Uttar Pradesh, West Bengal, Maharashtra, Telangana.

On the basis of the above-mentioned

42. Choose the correct alternatives to be filled in given blanks A and B:

47. Identify the correct statement from the following:

52. Identify the correct formula to calculate Fiscal deficit:

Question No. 55 – 60 are to be answered based on the following data:

55. Which State is lag in good HDI according to this report?

56. When was first report on HRD was published?

60. India’s HDI ranking is low because of:

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