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Board Paper of Class 12-Commerce 2020 Economics All India(Set 2) - Solutions

General Instructions:
Read the following instructions very carefully and strictly follow them:
(i) Question paper comprises two Sections – A and B. All questions are compulsory.
(ii) Question number 1 10 and 18 – 27 are very short-answer questions carrying 1 mark each. They are required to be answered in one word or one sentence each.
(iii) Question number 11 – 12 and 28 – 29 are short-answer questions carrying 3 marks each. Answer to them should not normally exceed 60 – 80 words each.
(iv) Question number 13 – 15 and 30 – 32 are also short-answer questions carrying 4 marks each. Answers to them should not normally exceed 80 – 100 words each.
(v) Question number 16 – 17 and 33 – 34 are long answer questions carrying 6 marks each. Answers to them should not normally exceed 100 – 150 words each.
(vi) Answer should be brief and to the point also the above word limit be adhered to as far as possible.
(vii) There is no overall choice. However, an internal choice has been provided in 2 questions of one mark, 2 questions of three marks, 2 questions of four marks and 2 questions of six marks. Only one of the choices in such questions have to be attempted.
(viii) In addition to this, separate instructions are given with each section and question, wherever necessary.

  • Question 1
    ___________ is the agent and adviser to the Government of India.
    (Fill in the blank with correct answer)

  • Question 2
    State whether the following statement is true or false :
    "To reduce inflation, the Central Bank should reduce Cash Reserve Ratio (CRR)." VIEW SOLUTION

  • Question 4
    Government expenditure incurred on defence items is a type of _________ expenditure in the Government Budget.
    (Fill in the blank with correct answer)

  • Question 5
    A car purchased by a household is a ___________.
    (Choose the correct alternative)
    (A) single use capital good
    (B) single use consumer good
    (C) durable consumer good
    (D) semi-durable consumer good


    GNP deflator is represented by which of the following formulae?
                                                                                    (Choose the correct alternative)
    (A) Nominal GNPReal GNP×100

    (B) Real GNPNominal GNP×100

    (C) Real GNPChange in Rate of Inflation×100

    (D) Change in Rate of InflationReal GNP×100 VIEW SOLUTION

  • Question 6
    If the Government establishes a new university, this expenditure incurred in the Government Budget will be a type of ________ expenditure.
    (Fill in the blank with the correct answer)

  • Question 7
    If the entire additional income of an economy is consumed, the value of investment multiplier will be __________. (Choose the correct alternative)
    (A) zero (0)
    (B) not defined (∞)
    (C) one (1)
    (D) ten (10) VIEW SOLUTION

  • Question 8
    Suppose in a hypothetical economy, the income rises from 500 crores to 600 crores. As a result, the consumption expenditure rises from 400 crores to 500 crores. Marginal propensity to consume in such a case would be _______________.
    (Choose the correct alternative)
    (A) 0·8
    (B) 0·4
    (C) 1·0

  • Question 9
    'Charity from Abroad' will be recorded on __________ (credit/debit) side of the Balance of Payment accounts. (Fill in the blank with correct answer) VIEW SOLUTION

  • Question 10
    Give any two examples of non-tax revenue receipts. VIEW SOLUTION

  • Question 11
    "Gross Domestic Product (GDP) is not the best indicator of the economic welfare of a country." Defend or refute the given statement with valid reasons. VIEW SOLUTION

  • Question 12
    Discuss the working of the adjustment mechanism if, Aggregate Supply is greater than Aggregate Demand.


    If in an economy :
    Marginal propensity to save (MPS) = 0·2
    Change in initial investment (∆I) = 2,000 crores
    Find the value of the following:
    (a) Investment multiplier (K)
    (b) Change in final income (∆Y) VIEW SOLUTION

  • Question 13
    How does the Central Bank control the credit with the help of 'Bank Rate'? Explain.


    Elaborate any two instruments of credit control, exercised by the Reserve Bank of India. VIEW SOLUTION

  • Question 14
    "The Government Budget of a country cannot have fiscal deficit without the existence of revenue deficit." Defend or refute the given statement. VIEW SOLUTION

  • Question 15
    "US dollar has recorded a jump of 0.75 paise per dollar (p/$) in the last one month; this situation might bring smiles and sorrows to different types of traders (exporters and importers)." Justify the given statement. VIEW SOLUTION

  • Question 16
    Using the following data of an imaginary economy, calculate and compare the Real Gross Domestic Product (GDP) for the given years :
    Year 2015-16 2016-17
    Nominal GDP Rate 9% 8%
    GDP deflator 150 160


    (a) “Circular flow of income in a two-sector economy is based on the axiom that one's expenditure is other's income." Support your answer with valid reasons.
    (b) Distinguish between 'value of output' and 'value added'. VIEW SOLUTION

  • Question 17
    In the given figure, what does the gap 'KT' represent ? State and discuss any two fiscal measures to correct the situation.

  • Question 18
    Which of the following is not an advantage of organic farming?
    (Choose the correct alternative)
    (A) Cheap inputs
    (B) Attractive returns on investment
    (C) Greater possibilities for import
    (D) High nutritional value VIEW SOLUTION

  • Question 19
    Name the apex institution for rural financing in India. VIEW SOLUTION

  • Question 20
    _________ is an example of a commercial source of energy.
    (Choose the correct alternative)
    (A) Firewood
    (B) Coal
    (C) Agricultural waste
    (D) Dried dung cakes VIEW SOLUTION

  • Question 21
    Identify and match the correct sequence of alternatives of organisations given in Column I with their respective functions in Column II:
    Column I Column II
    a.  WTO (i) provides short-term loans to solve the Balance of Payments problem.
    b.  RBI (ii) is a multilateral trade negotiating body.
    c.  IMF (iii) facilitates lending for reconstruction and development.
    d.  IBRD (iv) is the Central Bank of India.
    Choose the correct alternative from the following:
    (A) a-(ii), b-(i), c-(iii), d-(iv)
    (B) a-(ii), b-(iv), c-(iii), d-(i)
    (C) a-(ii), b-(iii), c-(iv), d-(i)
    (D) a-(ii), b-(iv), c-(i), d-(iii) VIEW SOLUTION

  • Question 22
    Which one of the following organisations regulates the health sector in India?
    (Choose the correct alternative)

    (A) ICMR
    (B) UGC
    (C) AIСТЕ
    (D) RBI


    In the year _______, the Indian Government made education free and compulsory for all children between 6 - 14 years. (Choose the correct alternative)
    (A) 2001
    (B) 2009
    (C) 2003
    (D) 2007 VIEW SOLUTION

  • Question 23
    State whether the following statement is true or false :

    "Land ceiling means fixing the minimum limit of land holding for an individual."


  • Question 24
    ___________ policy was implemented in the first seven five-year plans of India, to protect domestic industries.
    (Fill in the blank with the correct answer)

  • Question 25
    State whether the following statement is true or false :
    "Proportion of people living below poverty line is more in India as compared to Pakistan." VIEW SOLUTION

  • Question 27
    Mao initiated the 'Great Leap Forward' in the year __________.
    (Choose the correct alternative)
    (A) 1951
    (B) 1955
    (C) 1958
    (D) 1962 VIEW SOLUTION

  • Question 28
    "Recently the Government of India has decided to merge MTNL and BSNL on account of rising losses." Justify the steps taken by the Government of India. VIEW SOLUTION

  • Question 29
    "Power sector in India has major challenges to face. "Discuss the given statement with valid reasons.


    "India has failed to implement the recommendations of Education Commission of 1964 - 66." Give valid arguments in support of the given statement. VIEW SOLUTION

  • Question 30
    Compare and analyse the given data of India and China with valid reasons:
    Country Annual growth rate of population (2015) Sex ratio (per thousand males)
    India 1-2% 929
    China 0.5% 941

    Source: World Development Indicators, 2015 VIEW SOLUTION

  • Question 31
    Comment upon any two salient features of demographic conditions of India on the eve of Independence. VIEW SOLUTION

  • Question 32
    Discuss briefly, how institutional reforms (land reforms) have played a significant role in transforming Indian agriculture.


    "Import restrictions were imposed in India with the dual objective to save foreign exchange reserves and to be self-sufficient." Justify the given statement with valid arguments. VIEW SOLUTION

  • Question 33
    Define the following :
    (a) Poverty Line
    (b) Human Capital
    (c) Self-Help Groups
    (d) Green Revolution VIEW SOLUTION

  • Question 34
    (a) Comment upon the informalisation of labour force in India.
    (b) Define the worker-population ratio.


    Critically examine the results of Poverty Alleviation Programmes implemented in India since independence. VIEW SOLUTION
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