DELHI PUBLIC SCHOOL, HYDERABAD

Competency Enhancer I
Class: XII Time: 1 hr
Subject: Economics Max. Marks:30
Instructions:
1. All questions are compulsory.
2. Marks for questions are indicated against each.
3. Questions 1-20 are very short-answer questions carrying 1 mark each.
4. Question Nos. 21 to 22 are short-answer questions carrying 3 marks each to be answered within 60-80 words each.
5. Question No. 23(a) is a numerical question.
6. Question No. 23(b) carries 2 marks which is to be answered within 60-80 words.
7. Word limit is not applicable to numericals.
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SECTION - A
1. There is an inverse relationship between Legal Reserve Ratio and value of Money
Multiplier. True/False? 1
2. What do you mean by Aggregate Demand? 1
3. After the introduction of liberalization measures, India’s foreign exchange reserves
increased from about __________ in 1990-91 to about _________ in 2014-15. 1
4. Calculate sales from the following data: 1
S.NO. PARTICULARS RS. IN
LAKHS
i. Subsidies 200
ii. Opening stock 100
iii. Closing stock 600
iv. Intermediate Consumption 3000
v. Consumption of fixed capital 700
vi. Profit 750
vii. Net value added at factor cost 2000
5. Give any two examples of non-tax revenue receipts. 1
6. Credit Creation by commercial banks is determined by: 1
(a) Cash Reserve Ratio
(b) Statutory Liquidity Ratio
(c) Initial Deposits
(d) All of the above
7. During the British rule, what was the overall literacy rate in India? 1
8. Why, despite implementation of Green Revolution, 65 percent of India’s population
continued to be engaged in the agricultural sector till 1990? 1
9. India’s first Five Year Plan was launched in the year__________. (1951/1956/1960) 1
10. When the value of marginal propensity to save increases, the following changes occur
(Choose the correct option): 1
(a) Consumption curve & AD curve become steeper, Savings curve becomes flatter
(b) Savings curve & AD curve become steeper, Consumption curve becomes flatter
(c) Consumption curve & AD curve become flatter, Savings curve becomes steeper
(d) Saving curve becomes steeper, Consumption curve becomes flatter & AD curve
remains unaffected.
11. Which of the following is/ are intermediate expenditure: 1
(a) Flour purchased by a household to prepare bread & give in charity.
(b) Maruti Cars purchased by Varun Motors car dealers.
(c) Car purchased by an employer for use by his firm.
(d) None of the above.
12. HYV seeds were the main reason for Green Revolution. True/ False. 1
13. In an economy, the investment expenditure is Rs.100 crores and consumption expenditure
C = 100 + 0.80Y. Determine the equilibrium level of income. 1
14. The transient poor may be classified as __________ and ______________. 1
15. Outsourcing is good for India because (choose the correct alternative): 1
(a) It provides employment to a large number of educated unemployed people in
India.
(b) India does not have enough resources and technology to develop the
manufacturing sector.
(c) The agricultural sector in India is poorly developed.
(d) None of the above
16. Who introduced the concept of “Jail Cost of Living”? (Choose the correct alternative) 1
(a)Mahatma Gandhi (b) Jawaharlal Nehru (c) Dadabhai Naoroji (d)None of these
17. Give one precaution that has to be taken while estimating National Income using
Expenditure method. 1
18. How did decline of handicrafts industry affect the agricultural sector during the British
rule? 1
19. On the eve of independence, nearly ___________ of India’s population lived mostly in the
villages and derived livelihood, directly or indirectly from agriculture. (Choose the correct
alternative): 1
(a) 80% (b) 65% (c) 85% (d) 75%
20. Identify the correct statement: 1
(a) Reduction in the contribution of agriculture in the GDP of a nation makes it
dependent on other countries for food requirements.
(b) According to the Industrial Policy Resolution 1956, industries like aircraft and
shipping came under Schedule B.
(c) Disinvestment is an example of liberalization in India.
(d) In India, the success of Green Revolution was experienced in two phases.
21. (a) How was commercialization of agriculture during the British rule responsible for the
stagnation in the agricultural sector in India?
(b) What is ‘Perspective Plan’? How is it related to ‘Five Year Plans’? 1 ½+1 ½=3
22. (a) Match the items given under Column I with the suitable statements under Column II.
Pick the right combination from the given options.
COLUMN I COLUMN II
1 Removal of export duties (i) Financial sector reforms
2 Encouragement of Private banks (ii) Industrial sector reforms
3 Decrease in role of public sector (iii) Trade & Investment policy reforms
4 Devaluation of rupee (iv) Foreign exchange reforms
A. (i),(ii),(iii),(iv) B.(iv), (i), (ii),(iii) C. (iv),(iii),(ii),(i) D. (iii),(i),(ii),(iv)

(b) Define the terms Poverty line and Head Count Ratio. 1+2=3
23. (a) Calculate Factor Income to Abroad from the following data:
S.NO. PARTICULARS RS. IN CRORES
i. GNP at MP 4500
ii. Replacement of fixed capital 100
iii. Indirect taxes 300
iv. Subsidies 200
v. Factor income from abroad 700
vi. NDP at FC 3900

(b)Will provision be made for reduction in the value of machinery due to communal riot
attacks? Give reason. 2+2=4

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