SUB CODE: 030

Roll No. ____________ Please check that this question paper contains
34 questions and has 04 printed pages.

HALF YEARLY EXAMINATION : 2019-20

CLASS – XII
SUBJECT- ECONOMICS
Time: 3:00 Hrs. SET - B Maximum Marks: 80

Instructions:-
1. All questions in both sections are compulsory. However, there is internal choice in some
questions.
2. Marks for questions are indicated against each question.
3. Question Nos. from 1 to 10 and from 18 to 27 are very short answer type questions carrying 1
mark each. They are required to be answered in one sentence.
4. Question Nos. from 11 – 12 and from 28 – 29 are short answer type questions carrying 3 marks
each. Answers to them should not normally exceed 60 words each.
5. Question Nos. 13 – 15 and from 30 – 32 are short answer type questions carrying 4 marks each.
Answers to them should not normally exceed 80 words each.
6. Question Nos. 16 – 17 and from 33 – 34 are long answer type questions carrying 6 marks each.
Answers to them should not normally exceed 120 words each.
7. Answers should be brief and to the point and above word limit be adhered to as far as possible.
PART – ‘A’ (MACRO ECONOMICS)
Q.1. In order to correct the situation of deflation : (1)
(a) securities are purchased by the commercial banks
(b) securities are sold by the commercial banks
(c) securities are purchased by the central bank
(d) securities are sold by the central bank
Q. 2. With an increase in SLR, flow of credit in the economy: (1)
(a) Increases (b) Decreases
(c) Remains unchanged (d) None of these
Or
The rate at which commercial banks are allowed to park their surplus funds with the
RBI is called:
(a) Bank rate (b) Repo rate
(c) Currency rate (d) Reverse repo rate
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Q.3. When domestic currency loses its value in relation to a foreign currency in the international
money market, it is a situation of : (1)
(a) Currency appreciation (b) Currency depreciation
(c) Currency devaluation (d) None of these
Q.4. When C = 75, MPC = 0.65 and Y = 1,500, consumption will be: (1)
(a) 900 (b) 975
(c) 1,050 (d) None of these
Q.5. Define autonomous consumption. (1)
Q.6. Find out the value of multiplier, when MPC is 0.75 (1)
Q.7. In order to correct the situation of excess demand: (1)
(a) Cost of credit is raised (b) Availability of credit is raised
(c) Availability of credit is reduced (d) Both (a) and (c)
Q. 8. Define forward market . (1)
Q.9. What is foreign exchange rate ? (1)
Q.10. Other things remaining the same, when in a country the market price of foreign currency falls,
national income is likely : (1)
(a) to rise (b) to fall
(c) to rise or to fall (d) to remain unaffected
Q.11. Read the following statements carefully. Write ‘True’ or ‘False’ with a valid reason.
(a) Value of multiplier will be infinity if entire additional income is converted (1½ + 1½ )
into additional consumption .
(b) When MPC = 0, the value of investment multiplier is also zero.
Or,
In an economy, an increase in investment leads to a 3 – time increase in national
income. Calculate marginal propensity to consume.
Q.12. “Economists are generally concerned about the rising marginal propensity to save (MPS) in
an economy”. Explain why ? (3)
Q.13. Explain the credit creation role of commercial banks with the help of a numerical example. (4)
Or,
Currency is issued by the central bank, yet we say that commercial banks create money. Explain.
How is this money creation by commercial banks likely to affect the national income ?
Q. 14. Explain the situation of deficient demand in an economy with the help of a diagram. (4)
Q. 15. Show diagrammatically, the effect on equilibrium level of income/output, of government spending.
(4)

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Q. 16. (a) In which sub- account and on which side of balance of payments account (3+3)
will foreign investments in India be recorded ? Give reasons.
(b) what will be the effect of foreign investments in India on exchange rate ? Briefly explain with
the help of diagram .
Or
Explain the components of capital account of balance of payments.
Q. 17. If national income is Rs. 100 crore and consumption expenditure Rs. 90 Crore, find out average
propensity to save. When income rises to 120 Crore and consumption expenditure to Rs. 108 Crore,
what will be the marginal propensity to consume and marginal propensity to save ? (2+2+2)

PART – ‘B’ ( Indian Economic Development )

Q.18. What do you mean by fiscal reforms ? (1)
Or
Define privatisation.
Q.19. An economy in which means of production are used in a manner such that social welfare is
maximised is called : (1)
(a) Mixed economy (b) Socialist economy
(c ) Capitalist economy (d) None of these
Q. 20. In which year was India’s First Five year plan launched ? (1)
(a) 1951 (b) 1947
(c ) 1940 (d) 1955
Q. 21. Decay of handicrafts was caused by : (1)
(a) British tariff policy (b) Competition from man – made machines
( c) New patters of demand (d) All of these
Q.22. Which of the following was the reason for the initiation of economic reforms in India ? (1)
(a) Mounting Fiscal Deficit (b) Rise in prices
(c ) Huge Deficit in Balance of Payments (d) All of These
Q. 23. Which of the following is the example of Indirect Tax ? (1)
(a) Income Tax (b) Wealth Tax
(c ) Goods and services Tax (d) None of These
Q. 24. Define devaluation. (1)
Q. 25. The people who never move above the poverty line are called: (1)
(a) Chronic poor (b) Non - poor
(c ) both (a) and (b) (d) None of These

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Q. 26. Overall literacy rate (census 2011) in India is: (1)
(a) 74% (b) 56%
(c ) 65% (d) 60%
Q. 27. What is meant by agricultural diversification? (1)
Q. 28. Do you think technical change in agriculture is more important than the institutional reforms ?
Justify your answer. (3)
Q.29. What, in opinion, is the lasting solution to the problem of poverty in India? (3)
Or
What is ‘MGNREGA’? Do you think it will finally address the problem of poverty in India ?
Q.30. India’s exports have declined even when rupee has depreciated in the recent past.
How do you explain this fact ? (4)
Q. 31. What are the main problems of human capital formation in India? Explain briefly. (4)
Or
How do government organizations facilitate the functioning of schools and hospitals in India?
Q. 32. Mention any four Poverty Alleviation Programmes adopted by the government and explain
each of them briefly . (4)
Q. 33. What is meant by globalization of the economy? State the measures adopted by the government
to promote globalization. (1+5)
Or
Write your views on the need for inclusive growth for the Indian Economy. Is inclusive growth
achievable for a developing economy like India when exposed to the process of privatization and
Globalisation ?
Q. 34. Critically evaluate the role of the rural banking system in the process of rural development in India .
(6)
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