DIRECTORATE OF EDUCATION, GNCT OF DELHI

PRACTICE PAPER
SESSION: 2024-25
CLASS XII
ECONOMICS (030)

TIME: 3 HOURS Max Marks – 80

GENERAL INSTRUCTIONS:
I. This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development
II. This paper contains 20 Multiple Choice Type Questions of 1 mark each.
III. This paper contains 4 Short Answer Type Questions of 3 marks each to be answered in 60 to
80 words.
IV. This paper contains 6 Short Answer Type Questions of 4 marks each to be answered in 80 to
100 words.
V. This paper contains 4 Long Answer Type Questions of 6 marks each to be answered in 100 to
150 words.

Q. SECTION A – MACRO ECONOMICS

No. MARKS
1 Read the following statements carefully:
Statement 1: If in an economy the level of income increases (∆Y), it will always
proportionately increase the level of consumption (∆C).
Statement 2: Marginal Propensity to Consume (MPC) and Marginal Propensity to
Save(MPS) are always equal to each other.
In the light of the given statements, choose the correct alternative from the following:
(A) Statement 1 is true and Statement 2 is false.
(B) Statement 1 is false and Statement 2 is true.
(C) Both Statements 1 and 2 are true.
(D) Both Statements 1 and 2 are false. 1
2 Primary deficit in a government budget will be zero when ……….
a. Revenue deficit is zero
b. Net interest payment is zero
c. Fiscal deficit is zero
d. Fiscal deficit is equal to interest payment 1
3 To arrive at the value of Net Value Added at Market Price (NVAMP)
must be added to Net Value Added (NVA) at Basic Prices.
(Choose the correct option to fill up the blank)
A. Product Taxes B. Net Product Taxes 1
C. Production Taxes D. Net Production Taxes
4 “As per the National Stock Exchange (NSE) data, dated 9th June, 2023, there was a net
selling off worth ₹ 309 crore by Foreign Institutional Investors (FIIs) over the period of
one month i.e., 9th May, 2023 - 9th June, 2023.”
The above mentioned transactions will be recorded on __________ side of ___________
1

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 account of Balance of Payments of India.
(Choose the correct alternative to fill in the blanks)
(A) Debit, Current
(B) Credit, Capital
(C) Credit, Current
(D) Debit, Capital 1
5 In an imaginary economy, autonomous consumption = ₹ 200 crore and marginal
propensity to save = 0.3. The saving function for the economy would be _________.
(Choose the correct alternative to fill in the blank)

(A) 200 + 0.7Y

(B) (-) 200 + 0.3Y
(C) 200 + 0.3Y 1
(D) (-) 200 + 0.7Y
6 As per the data presented in the Union Budget 2024-25, the total revenue receipts of
the government and the revenue expenditure are estimated at ₹35.04 lakh crore and ₹
40.85 lakh crore respectively.
The value of the deficit would be ₹ 5.81 lakh crore.
(Choose the correct option to fill up the blank)
A. Revenue
B. Fiscal
1
C. Budgetary
D. Primary
7 Read the following statements carefully:
Statement 1: The maximum value of Average Propensity to Consume (APC) )can be
unity.
Statement 2: As the income of an economy increases, the proportionate increase in the
level of consumption is always equal to the increase in the level of income.
In light of the given statements, choose the correct option from the following:
A. Statement 1 is true and Statement 2 is false.
B. Statement 1 is false and Statement 2 is true.
C. Both Statements 1 and 2 are true.
1
D. Both Statements 1 and 2 are false.
8 In order to discourage any fall in Aggregate Demand, the Government of India may
_______ the ________.
(Choose the correct alternative to fill in the blanks)
(A) Decrease, Repo Rate
(B) Increase, Reverse Repo Rate
(C) Decrease, Government Expenditure
1
(D) Decrease, Tax Rate

9 Read the following statements carefully:

Statement 1: Interest payments do not lead to any decrease in liabilities of the
government.
Statement 2: Disposal of equity by the Public Sector Undertakings in the market
may lead to a decrease in the assets of the government.
2

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 In light of the given statements, choose the correct option from the following:

A. Statement 1 is true and Statement 2 is false.

B. Statement 1 is false and Statement 2 is true. 1
C. Both Statements 1 and 2 are true.
D. Both Statements 1 and 2 are false.
10 Based on the given diagram:
Overall Trade (Merchandise + Services)

Source: https://commerce.gov.in/wp-content/uploads/2024/02/PIB-Press-Release-
January-2024-1.pdf
The trade under current account during April - January 2023-24 reflects a of
USD billion. (Choose the correct option to fill up the blank)
A. Surplus, 70.43 1
B. Surplus, 111.99
C. Deficit, 70.43
D. Deficit, 111.99

For Visually Impaired Candidates:

indicates the situation of Balance of Trade Deficit in the Balance of
Payments Account.
A. Exports of goods > imports of goods 1
B. Exports of goods < imports of goods
C. Exports of services < imports of services
D. Exports of goods & services < imports of goods and services
11 On the basis of the given data, estimate the value of Domestic Income (NDPFC):
(A) S.NO Items Amount ((₹ in
crore)
i. Household Consumption Expenditure 1200
ii. Gross Business Fixed Capital Formation 800
iii. Gross Residential Construction Investment 70
iv. Government Final Consumption Expenditure 500
v. Excess of Imports over Exports 100
vi. Inventory Investment (-)50
vii. Gross Public Investment 500
viii. Net Indirect Taxes 150
ix. Net Factor Income From Abroad 80
3

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 x. Consumption of fixed capital 30 3

OR
State with reasons whether the following will be included in national income.
11
(B) a) Salary of an Indian working in Russian embassy in India.
b) Dividend received by a foreign investor from an Indian company.
3
12 “Revenue receipts of the government may be categorized under two heads.”
State and explain the two heads of revenue receipts. 3

13 (I) ‘RBI sold $33 billion to curb Rupee volatility.’

A) Which exchange rate system is the above move associated with? 1
B) Why do you think this step was taken by the RBI? 2

(II) State the meaning of ‘Balance of Payments Surplus.’

1
14 In an economy C =200 + 0.75Y is the consumption function where C is consumption
(A) expenditure and Y is National Income. Investment expenditure is ₹ 4,000. Calculate the 4
equilibrium level of income and consumption expenditure.

OR
14 Complete the following
(B)

15 Suppose, the Indian Government decides to boost public investments with a defence
project of ₹ 40,000 crore.
Explain the likely impacts of the given situation on the Income, Employment and Output
of the economy, assuming that 80% of the increase in income is consumed. 4

16 Read the following text carefully:

The demand for money tells us what makes people desire a certain amount of money.
Since money is required to conduct transactions, the value of transactions will determine
the money people will want to keep: the larger is the quantum of transactions to be made,
the larger is the quantity of money demanded. Since the quantum of transactions to be
made depends on income, it should be clear that a rise in income will lead to rise in
demand for money. Also, when people keep their savings in the form of money rather
than putting it in a bank which gives them interest, how much money people keep also
depends on rate of interest. Specifically, when interest rates go up, people become less
interested in holding money since holding money amounts to holding less of interest-
earning deposits, and thus less interest received. Therefore, at higher interest rates,
4

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 money demanded comes down.

On the basis of the given text and common understanding, answer the following
questions:
(I) State the various purposes for which money is demanded. 3
(II) “The quantum of transactions to be made depends on income.”
Do you agree with the given statement? What steps may be taken by the banks to control 3
the demand for money in the economy?

17 On the basis of the following hypothetical data:

(A) (all figures in ₹ crore)
Year Nominal GDP Nominal GDP
adjusted to base
year prices
2022 6,000 4,000
2023 6,300 4,500

(I) Calculate the percentage change in Real Gross Domestic Product in the year 3
2023 using 2022 as the base year.
(II) Compare the percentage change in real and nominal GDP of this economy.
What can you say about the economic growth of this country. 3
OR

17 (I) “Basis of classification of a good into final good and intermediate good
depends on the economic nature of its use.” 3
(B) Defend or refute the statement, with the help of a suitable example.
(II) “All the capital goods produced in a year do not constitute an addition to the
capital stock already existing.”
Identify the concept indicated in the aforesaid statement. Give valid reasons in 3
support of your answer.
SECTION B – INDIAN ECONOMIC DEVELOPMENT
18 Read the given image carefully

STRATEGIES FOR
mini hydel
SUSTAINABLE ?
plants
DEVELOPMENT

use of solar
energy

Choose the correct option which indicates the strategies for sustainable development
i. Bio composting
ii. Use of thermal energy
iii. Use of wind energy
5

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 iv. Deforestation
Options:
A. (i) and (ii)
B. (ii) and (iii)
C. (i) and (iv)
D. (i) and (iii)
For Visually Impaired Candidates:
Identify, which of the following is not a correct strategy for sustainable development?
(i) Segregation of waste
(ii) Deforestation
(iii) Use of thermal power
Alternatives:
1
A. (i) only
B. (ii) only
C. (ii) & (iii)
D. (i) & (ii)
19 Read the following statements carefully:
Statement 1: Under the colonial rule, basic infrastructure (like railways, post and
telegraph etc.) was developed.
Statement 2: The real motive behind the infrastructural development in India was to
strengthen the British interests.
In light of the given statements, choose the correct option from the following:
A. Statement 1 is true and Statement 2 is false.
B. Statement 1 is false and Statement 2 is true.
C. Both Statements 1 and 2 are true.
D. Both Statements 1 and 2 are false. 1

20 Read the following statements: Assertion (A) and Reason (R). Choose the correct option
from those given below:
Assertion (A): Human capital formation is required for effective use of physical capital.
Reason (R): Formation of human capital raises life expectancy of the people.

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. 1
21 __________ was established in 1951 and has now been replaced with ______.
(Choose the correct option to fill up the blank)
A. Planning Commission, Niti Ayog
B. Niti Ayog, Planning Commission
C. Public Sector, Private Sector 1
D. Socialism , Capitalism

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22 The non-farm activities in rural areas consist of _________________.
(Choose the correct option to fill up the blank)
(i) Poultry
(ii) Multiple Cropping
(iii) Bee-Keeping
(iv) Horticulture
Alternatives :
A. (i) and (iv) 1
B. (i), (iii) and (iv)
C. (i), (ii) and (iii)
D. (i), (ii), (iii), and (iv)
23 Identify, which of the following statement is incorrect about the trade reforms
introduced in 1991? (Choose the correct option)
a) Dismantling of quantitative restrictions on imports and exports
b) Reduction of tariff rates
c) Foreign Institutional Investors were allowed to invest in Indian financial markets
1
d) Removal of licensing procedures for imports.
24 Which one of the following was Not the impact of one-child policy norm in China?
[a] Population growth reduced
[b] Burden of old aged people increased
[c] Working population reduced in China arresting the economic growth
[d] Chine became the most populated country of the world.
1
25 Identify, which of the following is not a correct function of environment?
(i) Exclusion of waste
(ii) Sustenance of life
(iii) Provide aesthetic services
Alternatives :
(A) (i) only
1
(B) (ii) only
(C) (ii) & (iii)
(D) (i) & (ii)
26 “A construction site manager hires two workers on daily basis.”
Identify the situation indicated in the given statement and choose the correct option.
A. Jobless Growth
B. Self Employed 1
C. Regular Worker
D. Casual Labour
27 ______________ is a women-oriented community-based poverty reduction programme
being implemented in Kerala.
(Choose the correct option to fill up the blank)
7

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 A. Kudumbashree B. TANWA
C. Saansad Adarsh Gram Yojana D. Prakruti 1
28 Elaborate the reasons owing to which the private sector was regulated under the 3
(A) Industrial Policy Resolution, 1956.
OR
28 “Under the liberalisation measures taken by the Government of India, regulation of
(B) industrial sector was extremely crucial.”
Reject or support the given statement with valid arguments..
3
29 (a)“Scholars find son- preference as a common phenomenon in India, Pakistan and 2
China.” Justify the given statement in the light of skewed sex-ratio.

(b) State any two liberty indicators. 1

30 ‘China’s rapid industrial growth can be traced back to its reforms in 1978.’
In the light of the given text, discuss any two reforms responsible for the rapid ec onomic
growth of China. 4

31 “The participation rate of people in economic activities in rural areas is more than that
(A) in urban areas.” Justify the given statement. 4

OR
31 “Self-Help Groups provide stimulus to socio-economic development in rural areas.”
(B) Justify the given statement with valid explanation. 4

32 (I) Interpret the given picture and explain any one strategy to control it from becoming
2
an ecological disaster.

2
(II) State the two components of environment.

For Visually Impaired Candidates in lieu of 32 (I) :

Explain why the opportunity cost of environmental crisis is very high. 2

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33 Read the following text carefully:
In October, 2014, The Government of India introduced a new scheme called Saansad
Adarsh Gram Yojana (SAGY). Under this scheme, Members of India's Parliament need
to identify and develop one village from their constituencies. To begin with, MPs can
develop one village as a model village by 2016, and two more by 2019, covering over
2,500 villages in India. According to the scheme, the village can have a population of
3,000-5,000 in the plains and 1,000-3,000 in the hills and should not be MPs' own or
their spouse's village. MPs are expected to facilitate a village development plan,
motivate villagers to take up activities and built infrastructure in the areas of health,
nutrition and education.
The main objectives of SAGY are:
1. To trigger processes which lead to holistic development of the identified Gram
Panchayats
2. To substantially improve the standard of living and quality of life of all sections
of the population through
o Improved basic amenities
o Higher productivity
o Enhanced human development
o Better livelihood opportunities
o Reduced disparities
o Access to rights and entitlements
o Wider social mobilization
o Enriched social capital
3. To generate models of local level development and effective local governance
which can motivate and inspire neighbouring Gram Panchayats to learn and adapt
4. To nurture the identified Adarsh Grams as schools of local development to train
other Gram Panchayats.
Source: www.pib.nic.in accessed on 24 October 2014

On the basis of the given text and common understanding, answer the following
questions:
(I) Write a short note on Saansad Adarsh Gram Yojana. 3

(II) State any three objectives of this yojana. 3

34 (I) Why, despite the implementation of green revolution, 65 per cent of India’s 4
(A) population continued to be engaged in the agriculture sector till 1990?
(II) Indicate the volume and direction of trade at the time of independence. 2
OR

34 (I) ‘Why was public sector given a leading role in industrial development during the
(B) planning period? 3

(II) Explain the rationale behind choosing 'Modernisation’ as a central planning objective
in India's development strategy. 3

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