MANVASA VIDYA PUBLIC SCHOOL

Monthly Test (2024-2025)

Subject- Economics
1
Time – 1 Hours Class- XII M.M - 40
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General instructions–
All questions are compulsory
i Question No. 1 to 8 are multiple choice type questions. Each question carries 1 mark.
ii .Section – B Question No. 9 to 12 are calculation based questions. Each question carries 3 marks.
iii. Section – C Question No. 13 to 17 are very short answer type questions. Each question carries 2 marks.
iv. Section – D Question No. 18 & 19 are long answer type questions. Each question carries 5 marks.
Section- A
1.Assertion: In the circular flow of income, households receive factor income.
Reason: Factor income represents payments made to factors of production, including wages, rent, interest, and
profit.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

2.Transfer payments are included in the calculation of national income.
Reason: Transfer payments represent payments made by the government to individuals without any
corresponding productive activity.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true

3) Assertion: Intermediate goods are counted in the calculation of GDP.
Reason: Intermediate goods are those used in the production of final goods and services.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

4) Assertion: The value-added method calculates GDP by summing the value added at each stage of production.
Reason: It avoids double-counting of intermediate goods.

a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.
b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false.

d) Assertion is false, but Reason is true.

5.Assertion (A): Banks use the depositors' money to lend to their customers, which is termed as loans.

Reason (R): Borrowers from various sectors like industry, agriculture, education, and construction avail loans to
conduct their economic activities.

A
Both A and R are true, and R is the correct explanation of A.
B
Both A and R are true, but R is not the correct explanation of A.
C
A is true, but R is false.
D
A is false, but R is true.
6.Read the following statements - Assertion (A) and Reason (R):
Assertion (A) - At the time of independence, the Indian economy was a 'depleted economy.
Reason (R) - Depleted economy refers to an economy, where no arrangements have been made to replace the
physical assets, depreciated due to excessive use. From the given options choose the correct one:

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
7Which of the following statements accurately describes the consumption function?
a) The consumption function is a relation between income, savings, price and consumption
b) The consumption function is a relation between income and consumption
c) The consumption function is a relation between price, savings and consumption
d) The consumption function is a relation between income, price and savings
8.
 Section B
9) Explain the three phases of the circular flow of income.
10) Can the value of marginal propensity to save be negative? If yes, when?
11) What is the relationship between average propensity to save and average propensity to
consume?

12Calculate APC and APS from the following schedule

Income (Y) 100 200 300

Consumption (C) 80 120 180

Section C
13. Give three differences between real flow and money flow.
14Give the meaning of ex-ante savings.
 15. Name two components of aggregate demand in a closed economy.
16. Give the meaning of full employment.
Section D
17Write a note on the Zamindari system in India.
18.What were the motives behind deindustrialization by Britishers in India?