Class 12 Economics Sample Paper 2022-23

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CBSE class 12 economics sample paper 2022-23 is available for free download on myCBSEguide App and Student Dashboard. This year CBSE has made some big changes in the typology of questions. Now Class 12 Economics will have subjective-type questions.

Major Changes

Class 12 Economics model question paper has some changes this year. These are

  • There are some Statement based questions
  • Assertion and Reason type questions are also given
  • CBSE is asking a few analytical graph-based questions too
  • The last case study question is too lengthy

Download Economics Sample Paper 2022-23

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Class 12 Economics Sample Paper 2022-23

Class 12 – Economics
Sample Paper – 01 (2022-23)


Maximum Marks: 80
Time Allowed: : 3 hours


General Instructions:

  1. This question paper contains two sections:
    Section A – Macro Economics
    Section B – Indian Economic Development
  2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each.
  3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered in 60 to 80 words.
  4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered in 80 to 100 words.
  5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered in 100 to 150 words.

  1. SECTION A – MACRO ECONOMICS
  2. If you are given the following data,
    1. Total exports of merchandise ₹ 1,000 crore
    2. Total imports of merchandise ₹ 1,200 crore
    3. Total exports of invisibles ₹ 100 crore
    4. Total imports of invisibles ₹ 100 crore

    the capital account must have

    a) a credit balance of ₹ 300 crore
    b) a credit balance of ₹ 200 crore
    c) a debit balance of ₹ 200 crore
    d) a debit balance of ₹ 100 crore
  3. What type of loan is advanced by Commercial Banks?
    a) Loan and Advance
    b) All of these
    c) Cash Credit
    d) Overdraft
  4. The investment demand function is:
    a) The relationship between investment demand and the National income
    b) The relationship between investment demand and the rate of interest
    c) The relationship between investment demand and the consumption expenditure
    d) The relationship between investment demand and disposable income
  5. Which of the following statements is associated with general equilibrium analysis?
    a) Equilibrium across all markets in the economy
    b) None of these
    c) Equilibrium in the market of gold ornaments
    d) Equilibrium price of a good in the competitive market
  6. What is mpc or the marginal propensity to consume?
    a) none of these
    b) the proportion of total additional income to total additional planned savings
    c) the proportion of total additional planned savings to total additional income
    d) the fraction of total additional income that is used for consumption

    OR

    Average Propensity to Consume is equal to

    a) {tex}\frac{\text { Change in Consumption }}{\text { Change in Income }}\left(\frac{\Delta \mathrm{C}}{\Delta \mathrm{Y}}\right){/tex}
    b) {tex}\frac{\text { Change in Income }}{\text { Change in Consumption }} \left(\frac{\Delta \mathrm{Y}}{\Delta \mathrm{C}}\right){/tex}
    c) {tex}\frac{\text { Income }}{\text { Consumption }}\left(\frac{\mathrm{Y}}{\mathrm{C}}\right){/tex}
    d) {tex}\frac{\text { Consumption }}{\text { Income }}\left(\frac{\mathrm{C}}{\mathrm{Y}}\right){/tex}

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  7. The formula of investment multiplier in terms of MPC is:
    a) {tex}K = \frac{1}{{1 – MPC}}{/tex}
    b) {tex}K = \frac{1}{{1 – APC}}{/tex}
    c) {tex}K = \frac{1}{{1 – MPS}}{/tex}
    d) {tex}K = \frac{1}{{1 – APS}}{/tex}

    OR

    Aggregate demand can be increased by ________

    a) Increase CRR
    b) Increase in bank rate
    c) None of these
    d) Selling govt. securities by RBI
  8. The investment multiplier is the ratio of
    a) Change in the income to the change in the investment
    b) Change in the consumption to the change in the investment
    c) Change in the income to the change in the consumption
    d) Change in the investment to the change in the income
  9. Final balance of payments of a country is:
    a) Always balanced
    b) Fluctuates
    c) Always deficit
    d) Always surplus

    OR

    Which of the following is not included in the capital account balance?

    a) Flow of gold
    b) Flow of banking capital
    c) Loans
    d) Gifts and donations
  10. Assertion (A): Money supply does not include money held by Government and Commercial Banks.
    Reason (R): Government and Commercial Banks are themselves the supplier of money.

    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.
  11. Assertion (A): Allocation of resources in the area of international trade tends to become optimum.
    Reason (R): Flexible exchange rate system enhances efficiency in resource allocation.

    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.
  12. Should the following be treated as a normal resident of India? Give a reason for your answer.
    1. Foreigner working in the Indian embassy in Taiwan.
    2. Indian working in Asian Development Bank in Philippines.
    3. Indian student in USA who has been living there for five years.
  13. The value of imports of goods of India is RS.200 crore and value of exports of goods is Rs.250 crore. Whereas the value of imports of goods of USA is Rs.100 crore and value of exports of goods is Rs.19000 crore. Which countrys Balance of trade is positive?

    OR

    Suppose the exchange rate between the Rupee and the dollar was Rs. 30 = 1 USD in the year 2010. Suppose the prices have doubled in India over 20 years while they have remained fixed in USA. What, according to the purchasing power parity theory will be the exchange rate between dollar and rupee in the year 2030.

  14. Distinguish between the inflationary gap and deflationary gap. State two measures by which these can be corrected.
  15. Explain the role of Bank rate in influencing the availability of credit in an economy.
  16. Explain the role of reverse repo rate in controlling money supply.

    OR

    Elaborate, how does a Central Bank stabilize money supply through Bank Rate.

  17. Answer the following questions:
    1. Calculate Gross Value Added at Market Price (GVAMP) from the following data:
      ParticularsAmount (in ₹ lakhs)
      (i)Depreciation20
      (ii)Domestic Sales200
      (iii)Change in Stock(–) 10
      (iv)Exports10
      (v)Single-Use Producer Goods120
      (vi)Net Indirect Taxes20
    2. Find out:
      1. Net National Product at Market Price and
      2. Gross National Disposable Income:
        Items(Rs.in Crore)
        Net current transfers from abroad(-) 10
        Wages and salaries1000
        Net factor income abroad(-) 20
        Social security contribution by employers100
        Net indirect tax80
        Rent300
        Consumption of fixed capital120
        Corporation tax50
        Dividend200
        Undistributed profits60
        Interest400
  18. Answer questions (i) & (ii) OR questions (iii) & (iv).
    1. Categorise the following government receipts into revenue and capital receipts. Give reasons for your answer.
      1. Receipts from sale of shares of a public sector undertaking.
      2. Borrowings from public.
      3. Profits of public sector undertakings.
      4. Income tax received by government.
      1. Define Revenue Expenditure.
      2. Distinguish between Direct tax and Indirect tax.
    2. What do you understand by G.S.T? How good is the system of G.S.T as compared to the old tax system? State its categories.
    3. What is disinvestment? Does it refer to revenue receipt or capital receipt of the government? Give an example.
  19. SECTION B – INDIAN ECONOMIC DEVELOPMENT
  20. Unemployment is defined as:
    a) The section of population willing to work but unable to find employment
    b) The section of population that is waiting to be employed
    c) The section of the population that is not capable of being employed
    d) The section of population that are without the skills needed by employers
  21. Identify the statement which is not true:
    1. Under Five Year Plans, the government actively participated in economic activities.
    2. Growth with equity was the objective of Five Year Plans.
    3. The private sector was given an important role during Five Year Plans.
    4. The public sector was given a leading role in industrial development.
    a) Only B
    b) Only D
    c) Only A
    d) Only C

    OR

    Which statement is false regarding economic planning

    a) It is concerned with whole of economic life of a country
    b) It is the purposive adoption of resources to social ends
    c) It is a path of action in terms of policy measures which were followed in the past
    d) It is an organised efforts to achieve objective within fixed framework
  22. Land reforms were successful in the following states
    a) West Bengal and Karnataka
    b) Tamil Nadu and Kerala
    c) Kerala and west Bengal
    d) Punjab and Kerala

    OR

    Marketed surplus refers to the

    1. Portion of agricultural produce which is sold in the market by the farmers
    2. Portion of agricultural product which is sold by the government in the market
    3. Earning of the farmers which is left with the farmers
    4. Portion of agricultural product which is left with the farmer after selling in the market
    a) Option (ii)
    b) Option (iv)
    c) Option (iii)
    d) Option (i)
  23. Which of the following is false regarding NABARD?
    1. Maintain a research and development fund to promote research in agriculture
    2. It helps the flow of credit through co-operative banks, RRB’s etc
    3. It performs all the functions of RBI with regards to agriculture credit
    4. It helps farmers directly
    a) Only B
    b) Only C
    c) Only A
    d) Only D
  24. Match the following. Options are given below:
    a. Tariff barriersi. Imposed on the amount of imports and exports
    b. Non-tariff barriersii. Imposed on imports to make them costly
    c. Minority saleiii. Equity is offered to investors through domestic public issue

    a)

    1. (iii)
    2. (i)
    3. (ii)

    b)

    1. (i)
    2. (ii)
    3. (iii)

    c)

    1. (ii)
    2. (i)
    3. (iii)

    d)

    1. (ii)
    2. (iii)
    3. (i)
  25. What was the average youth literacy rate in 2015?
    a) 88%
    b) 95.5%
    c) 89.5%
    d) 74%
  26. Industrial Policy Resolution of 1956 to classify the industries in the category was adopted to
    a) To protect the domestic industry
    b) To increase the role of public sector
    c) All of these
    d) To promote regional equality
  27. Which of the following is a consequence of ozone layer depletion?
    a) Hampers growth of terrestrial plants
    b) All of these
    c) Lower production of phytoplankton
    d) Skin cancer in humans

    OR

    Which of the following is a cause of Ozone depletion?

    a) Water Pollution
    b) Air Pollution
    c) Noise Pollution
    d) None of these
  28. Assertion (A): The French traveler, Bernier, described Bengal as richer than Egypt producing amply for self-consumption and exporting in abundance.
    Reason (R): Prosperity and stability were the key characteristics of life in rural India.

    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.
  29. Assertion (A): The economic divide in the gulf between rich and poor farmers has substantially risen over time.
    Reason (R): A big push of investment needs to be given to Indian agriculture to raise productivity levels at par with the advanced nations.

    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.
  30. How do the Air pollution factor contribute to the environmental crisis in India? What problem do they pose for the government?
  31. You are residing in a village. If you are asked to advise the village panchayat, what kinds of activities would you suggest for the improvement of your village which would also generate employment?

    OR

    In India, the self-employed constitutes about 60% of employees. The incidence of underemployment is the highest among the self-employed. As an economist, suggest measures that may be taken to ensure more productive employment for the self-employed.

  32. Comment on the growth rate trends witnessed in China and India in the two decades with the help of table given below.
    GDP%IndiaChina
    1991-20005.710.4
    2001-20056.39.5
    2017-20186.76.4
  33. Answer first two questions (i & ii) OR answer the last question (iii):
    1. What was the limit of automatic approval for direct foreign investment?
    2. What do you understand by devaluation of rupee?
    3. India has certain advantages which makes it a favourite outsourcing destination. What are these advantages?
  34. State whether the following statements are true/false, with valid arguments:
    1. Expenditure on acquiring information is also a source of human capital.
      a) True
      b) False
    2. Gains of migration are lesser than the costs of migration.
      a) True
      b) False

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  35. Answer first 3 questions (i, ii, iii) OR last 2 questions (iv, v):
    1. Why the need for diversification arises?
    2. What is the operation flood?
    3. What is the major aim of designing multi-agency system of rural banking?
    4. Why is it being considered necessary to replace the private moneylenders by institutional sources of credit?
    5. To solve the various problems associated with rural credit, enumerate the objectives which should be followed by the cooperative credit societies.
  36. Read the following text carefully and answer the questions given below:
    THE FUTURE POPULATIONS OF CHINA AND INDIA
    In the absence of catastrophic events such as nuclear war, the populations of India and China are destined to become even larger, and by a large margin. If the Chinese were to achieve a total fertility rate of as low as 1.7 children born per woman by 1990 and maintain fertility that low for 30 years, the population would increase to a maximum of 1.22 X 109 in 2020 about 75% greater than the 700 x 106 it was when the birth rate began its big decline in the mid-1960s. To limit the increase to this amount will require an extraordinary success of the birth planning program.
    For many years, 30% of parents would need to have only one child, and 70% only two. If a significant fraction had three or more, the proportion of one-child couples would need to be higher still. The social cost would be substantial. Many children would grow up with no siblings; many in the next generation would have no aunts, uncles, or cousins; very many parents would have no sons, and there would be an age structure with a marked relative shortage of younger workers, males of military age, etc. These features are very foreign to Chinese customs and values; the stringent and allegedly coercive means needed to achieve such low fertility might have adverse political effects as did less draconian measures in India.
    In India, the failure to have started a large decline in fertility as early as in China implies a prospective growth on the order of 75% or more of the current population-to a maximum of at least 1.2 x 109, because the current population is nearly the size the Chinese population was when the birth rate in China began its dramatic fall.
    The death rate in India is higher than that in China, but the prospective decline in fertility in India is surely more gradual; the attainment of a replacement-level (total fertility rate of about 2.2 or 2.3 children) is long in the future, to say nothing of attainment of lower rates.
    The reason for the large continuing increases in population in each country even after fertility is reduced is that population growth has its own momentum. High birth rates in the recent past mean that there will be many more potential parents for another generation than there are now. Even if every couple merely replaces itself, the population continues to increase by 50% or more.
    Thus, the world’s two largest populations are destined to become much larger. I believe today, as I did when working with Hoover, that if sensible economic policies are followed it will be possible to provide a somewhat better life for these larger populations than is enjoyed in the two countries today. Reducing fertility soon to no higher than needed for long-run replacement would improve the prospects significantly and would especially improve the social and economic future as seen from the perspective of early in the next century. Yet, the mistakes of the past cannot be cancelled; the birth rate cannot be lowered retrospectively. A lower birth rate now is desirable, but the ideal rate is not zero. There are social and political costs of excessive emphasis on the immediate achievement of very small families; the rights and sensibilities of the current population and the disequilibrating effects of drastic changes in age composition must enter the calculation of desirable population policies.
    (Source: https://www.pnas.org/content/pnas/80/6/1757.full.pdf)
    Questions:

    1. Outline any two implications (apart from population arrest) of the one-child policy of China introduced in the late 1970s.
    2. Delineate the reasons why the world’s two largest populations are destined to become much larger in the future?

Class 12 – Economics
Sample Paper – 01 (2022-23)


Solution

  1. SECTION A – MACRO ECONOMICS
  2. (b) a credit balance of ₹ 200 crore
    Explanation: a credit balance of ₹ 200 crore
  3. (b) All of these
    Explanation: All the options are the type of loan is advanced by Commercial Banks.
  4. (b) The relationship between investment demand and the rate of interest
    Explanation: Investment depends mainly on the rate of interest. As interest rate increases, investment decreases and vice versa.
  5. (a) Equilibrium across all markets in the economy
    Explanation: Equilibrium across all markets in the economy. General equilibrium analyzes the economy as a whole, rather than analyzing single markets like with partial equilibrium analysis. General equilibrium shows how supply and demand interact and tend toward a balance in an economy of multiple markets working at once.
  6. (d) the fraction of total additional income that is used for consumption
    Explanation: the fraction of total additional income that is used for consumption

    OR

    (d) {tex}\frac{\text { Consumption }}{\text { Income }}\left(\frac{\mathrm{C}}{\mathrm{Y}}\right){/tex}
    Explanation: {tex}\frac{\text { Consumption }}{\text { Income }}\left(\frac{\mathrm{C}}{\mathrm{Y}}\right){/tex}

  7. (a) {tex}K = \frac{1}{{1 – MPC}}{/tex}
    Explanation: {tex}K = \frac{1}{{1 – MPC}}{/tex}
    Where, 1 – MPC = MPS

    OR

    (c) None of these
    Explanation: None of these
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  8. (a) Change in the income to the change in the investment
    Explanation:  Investment multiplier implies that investment multiplies income and the extent of increase in income is given by K.
    {tex}\mathrm{K}=\frac{\Delta \mathrm{Y}}{\Delta \mathrm{I}} \quad \text { or } \quad \mathrm{K} \times \Delta \mathrm{I}=\Delta \mathrm{Y}{/tex}
    Where K is multiplier,
  9. (a) Always balanced
    Explanation: Always balanced

    OR

    (d) Gifts and donations
    Explanation: Gifts and donations are unilateral payments. These are recorded in the current account.

  10. (a) Both A and R are true and R is the correct explanation of A.
    Explanation: Both A and R are true and R is the correct explanation of A.
  11. (a) Both A and R are true and R is the correct explanation of A.
    Explanation: Allocation of resources in the area of international trade tends to become optimum since a Flexible exchange rate system enhances efficiency in resource allocation.
    1. Foreigner working in the Indian embassy in Taiwan is not a normal resident of India.
      Reason: He is not normally residing in India, and his centre of interest does not lie in.
    2. Indian working in Asian Development Bank in the Philippines is a normal resident of India.
      Reason: His centre of interest lies in India.
    3. Indian student in the USA who has been living there for five years is a normal resident of India
      Reason: His centre of interest lies in India. Also, as a rule of thumb, students studying abroad (no matter for how long) are treated as normal residents of the country they belong to.
  12. Balance of Trade (India)
    = Value of exports – Value of imports
    = 250-200= Rs.50crores
    Balance of Trade (USA)
    =19000 – 100 = Rs. 18,900 crore
    USA is in a better position as its BOT surplus is greater than that of India.

    OR

    The rupee-dollar exchange rate is given as Rs.30 in the year 2010. This implies that the price of  a good (say, book) is 1doller in USA and Rs.30 in India. It is given that prices have doubled in India over 20 years while they have remained fixed in the USA, so the cost of the book will be Rs. 60 in 2030 and the cost of the book remains the same i.e 1 doller in the USA since the prices are not changing. For these two prices to be equivalent, Rs.60 must be worth of 1 doller. The rupee, therefore, will depreciate.

    1. Open Market Operations refers to sale and purchase of securities by the Central Bank on behalf of government in the open market. It directly affects the supply of money in the hands of Commercial Banks and citizens of the country. In case of Deflation, the Central Bank purchased securities from public. It increases the supply of money in the economy and credit/money creation power of Commercial Banks. Thus, the Aggregate Demand increases and ultimately the economy attains equilibrium.
    2. Role of Open Market operations in Correcting Inflationary Gap in an Economy: In case of Inflation, the Central Bank sell the securities to the public. It reduces the supply of money in an economy and credit/ money creation power of Commercial Banks. Thus, the Aggregate Demand decreases and ultimately the economy attains equilibrium.
    1. Bank rate is the rate at which central bank lend money to commercial banks to meet their long term needs.
    2. RBI actively uses bank rate to control credit creations.
    3. EFFECT:
    4. In case of inflation, Central Bank increases Bank Rate.
    5. This results in increased rate of interest recovered by commercial banks, which discourages borrowing.
    6. As a result Consumption and AD falls and there is reduction in inflationary gap.
    7. In case of deflation, Central Bank decreases Bank Rate.
    8. This results in decrease in rate of interest, which encourages borrowing.
    9. As a result Consumption and then AD rises and there is reduction in deflationary gap.
  13. Reverse repo rate is the rate of interest offered by RBI when banks deposit their surplus funds with the RBI for short periods. When banks have surplus funds but have no lending (or) investment options, they deposit such funds with RBI. Banks earn interest on such funds.  It is a monetary policy instrument which can be used to control the money supply in the country. If the Central Bank wants to increase the money supply in the economy, then it reduces the reverse repo rate With fall in reverse repo rate, the commercial banks reduce the deposits of surplus funds with the Central Bank, thereby increasing the money supply. On the other hand, if the Central Bank wants to decrease the money supply, then it increases the reverse repo rate. With the rise in reverse repo rate, the commercial banks increase the deposits of surplus funds with the Central Bank, thereby decreasing the money supply. Thus, reverse repo rate plays an important role in controlling money supply.

    OR

    Bank rate is the rate of interest at which central bank lends money to commercial banks. It relates to the instant loan requirement of the commercial banks. An increase in bank rate may force commercial banks to increase their lending rate. It will make borrowings costlier to the general public. This leads to discouraging people to borrow and will thus restrict money supply in the economy and accordingly inflation is corrected.
    On the other hand,  when the bank rate is decreased, the market rate of interest is also decreased. Accordingly the cost of capital decreases. This increases the demand for credit and therefore, the supply of money tends to rise. Accordingly, deflation is corrected.

  14. Answer the following questions:
    1. GVAMP = [(ii) + (iii) + (iv)] – (v) ( GVAMP=Domestic Sales+Export+Change In Stock-Intermediate Consumption)
      = [200 + (-)10 + 10] – 120
      = 200 – 120
      = ₹ 80 lakhs
    2. INCOME METHOD
      1. Net National Product at Market Price
        NDP​​​​FC = Compensation of employees (Wages and salaries + Social security contributions by employers) + Operating Surplus {Rent+ Interest + Profit (Corporation tax + Dividend + Undistributed profits)} + Mixed income
        = (1000 + 100) + [300 + 400 + (50 + 200 + 60)] + 0
        = Rs.2110 crore
        NNP​​​​MP = NDP​​​​FC + Net indirect taxes + Net factor income from abroad
        = 2110 + 80 – (-20)
        = 2210 crore
      2. Gross National Disposable Income
        = NNPMP + Consumption of fixed capital + Net current transfers from abroad
        = 2210 + 120 + (-10)
         = Rs.2320 crore
  15. Answer questions (i) & (ii) OR questions (iii) & (iv).
      1. Receipts from sale of shares of public sector undertaking is a capital receipt because it results in a reduction of assets.
      2. Borrowing from public is a capital receipt because borrowing creates a liability.
      3. Profits of public sector undertaking is a revenue receipt because it neither creates a liability nor reduces any asset.
      4. Income tax received by the government is a revenue receipt as it neither creates a liability nor reduces any asset.
      1. Revenue Expenditures are those expenditures of the government that neither create any assets nor reduce any liabilities of the government. E.g. Interest paying on borrowing.
      2. Direct taxes are those taxes in which the impact and incidence of the tax lie on the same entities. The burden of direct taxes cannot be shifted on any other entity like Income tax. Whereas, Indirect taxes are those taxes in which the impact and incidence of the tax lie on different entities. The burden of indirect taxes can be shifted to other entities like GST.
    1. G.S.T. stands for Goods and Service Tax and this tax system has been introduced by the Indian Government recently. At first, it has been a headache for people as they were not much aware of it but slowly and gradually everyone got to know how it works.
      G.S.T. is better than the old taxation system because, under this system, people need not pay for the additional taxes, which the sellers have to pay. During the earlier taxation system, the shopkeepers made their customers pay for the taxes imposed on themselves but now everything has been fixed and is under control. Customers too are fully aware of how to use their right in the case of taxation.
    2. Disinvestment refers to the withdrawal of existing investment. For Example, The government of India is undertaking disinvestment by selling its shares in the Maruti Udyog. It is a capital receipt of the government as it reduces assets of the government.
  16. SECTION B – INDIAN ECONOMIC DEVELOPMENT
  17. (a) The section of population willing to work but unable to find employment
    Explanation: The section of population willing to work but unable to find employment
  18. (d) Only C
    Explanation: The private sector was given an important role during Five Year Plans is an incorrect statement.

    OR

    (c) It is a path of action in terms of policy measures which were followed in the past
    Explanation: Economic planning is a term used to describe the long term plans of an incumbent government to manage the economy. Economic planning is a common feature of big government and usually dictates increased spending and deficits to fund government programs and public works projects.

  19. (c) Kerala and west Bengal
    Explanation: Kerala and west Bengal

    OR

    (d) Option (i)
    Explanation: Portion of agricultural produce which is sold in the market by the farmers

  20. (b) Only C
    Explanation: NABARD is an apex institution handling policy, planning and operations in the field of rural credit and related economic activities.
  21. (c)
    1. (ii)
    2. (i)
    3. (iii)

    Explanation: Tariff barriers lead to a rise in the price of the imported commodities while non tariff barriers restrict the quantity that can be imported. Minority sale involves the sale of less than 49% stake of a PSU to the private sector.

  22. (c) 89.5%
    Explanation: 89.5% was the average youth literacy rate in 2015.
  23. (d) To promote regional equality
    Explanation: To promote regional equality
  24. (b) All of these
    Explanation: All the options are consequences of ozone layer depletion.

    OR

    (b) Air Pollution
    Explanation: Ozone depletion refers to a reduction in ozone in the atmosphere. This occurs owing to the excessive use of cooling substances in air conditioners and refrigerators.

  25. (a) Both A and R are true and R is the correct explanation of A.
    Explanation: Prosperity and stability were the key characteristics of life in rural India. Thus, the French traveller, Bernier, described Bengal in the 17th century as “richer than Egypt” producing amply for self-consumption and exporting in abundance.
  26. (b) Both A and R are true but R is not the correct explanation of A.
    Explanation: Due to the Green revolution the economic divide- the gulf between rich and poor farmers has substantially risen over time. Poverty is so widespread in Indian agriculture that the Government often resorts to loan waiving schemes causing a mounting burden on the Indian exchequer.
  27. In India, air pollution is wide-spread in urban areas because of vehicles, factories and other reasons. Air pollution is a great concern because it has serious harmful effects on the general population. For example, the number of motor vehicles has increased from about 3 lakh in 1957 to 67 crores to 2003. In 2003, personal transport vehicles (two wheelers vehicles and cars only) constituted . about 80% of the total number of registered vehicles. This growth directly contributes to air pollution.
  28. I would suggest the following activities generate employment in village
    1. There should be multiple cropping in the village.
    2. Cottage industry should be encouraged.
    3. More and more facilities of education, health services, roads, etc should be created in the village.
    4. Other activities related to agriculture such as plantation, horticulture, dairying, animal husbandry should be encouraged.

    OR

    The incidence of underemployment is the highest among the self-employed. This statement is correct. Following are some measures that may be taken to ensure fuller and more productive employment for the self-employed:

    1. Assistance to Farmers- A comprehensive system of assistance to farmers should be set up. It should provide them with credit, inputs like improved seeds, saplings, fish seedlings, fertilisers, technical guidance, irrigation facilities, etc. These facilities should be made available to persons having tiny holdings or no holdings.
    2. Redistribution of Land- There should be the redistribution of land, followed by an effective programme of assistance and guidance to the beneficiaries.
    3. Support Mechanism- The policy should emphasise further improvements in the support mechanism for the self-employed engaged in non-agriculture. For example, technical guidance, credit, easy availability of equipment, infrastructural facilities, raw material at reasonable prices, market guidance, etc.
  29. After independence in 1947, India and Pakistan embarked upon planned development programmes. They relied largely on the public sector to spearhead the process of growth and development.
    Undoubtedly, China is the leader in the economic growth rate. Its growth has crossed 9% whereas India has crossed 5% growth rate up to 2005. The table shows that the growth rate of GDP between 1991-2000 was higher in comparison to India. But during the period 2001-05, this difference reduced to some extent. Even the GDP in China was almost higher than that of India. But in 2017-18 the GDP growth rate of India was higher than that of China.
  30. Answer first two questions (i & ii) OR answer the last question (iii):
    1. The limit of automatic approval for direct foreign investment was 51% for a wide range of industries.
    2. Devaluation of Rupee refers to the fall in the value of rupee in terms of foreign currency. Specifically, it implies a deliberate official lowering of the value of the country’s currency with respect to the foreign currency. Devaluation prevails under the fixed exchange rate regime. This implies that the value of rupee has fallen and the value of the foreign currency has risen. It means that now (after devaluation)  1 US $ can be exchanged for more rupees. This encourages export and discourages imports as the former is cheaper now for foreign countries and the latter is expensive for them.
    3. Most multinational corporations and even small companies are outsourcing their services to India because of the following advantages:
      1.  Availability of Cheap Labour :  India is a country with a large population and thus has abundant supply of labour. Due to this reason, labour in India is available at low wage rates. This helps the foreign companies in reducing their cost of operation by outsourcing their business processes to India.
      2. Skill and Accuracy: India has made a pool of talent in the form of educated and trained youth who have the required skill and can work with accuracy in the business processes such as accounting, record keeping, IT consultancy, etc. There is an availability of English speaking persons and skilled human resources are plenty in India. They are highly conscious towards quality.
      3. Continuity and Risk Management :  Periods of high employee turnover add uncertainty to the operations of a company. Outsourcing will provide a level of continuity to the company while reducing the risk that a substandard level of operation would bring to the company.
      4. Reduced Overhead: Overhead costs of performing back office functions are extremely high but due to the outsourcing these costs can be reduced.
      5. Advanced Technology: There is availability of advanced technology at par with western countries.
      6. Flexible Human Resource: We have flexible human resource to work in various time zones.
      7. Multilingual Support: Indians can also offer multilingual support to their customers.

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  31. State whether the following statements are true/false, with valid arguments:
    1. (a) True
      Explanation: True. Expenditure on acquiring information is a source of human capital.
    2. (b) False
      Explanation: False, gain of migration is more than its cost.
  32. Answer first 3 questions (i, ii, iii) OR last 2 questions (iv, v):
    1. The need for diversification of agriculture arises from the fact that there is a greater risk in depending exclusively on farming for livelihood.
    2. Operation flood is a system whereby all the farmers can pool their milk produce on a cooperative basis and the same is marketed to urban areas through cooperatives.
    3. The major aim of designing multi-agency system is to dispense adequate credit for diverse needs at cheaper rates.
    4. It has been considered necessary to replace the private moneylenders by institutional sources of credit because:
      1. The supply of credit was irregular and depended largely on personal relations between the borrower and the lender.
      2. Since the borrower was generally illiterate, the moneylender often resorted to downright cheating such as failure to record the repayments in full.
      3. The moneylenders often took advantage of the ignorance and helplessness of the cultivator to exploit him.
      4. The landless tenants and farm workers, who had no land to offer as security, found it difficult to borrow. The loans were available on very difficult terms, and the borrowers were often burdened with permanent debt.
    5. To solve the various problems associated with rural credit, cooperative credit societies should pursue the following objectives:
      1. They should provide adequate credit support, covering all areas of needs of farmers.
      2. They should ensure the timely flow of credit to the farmers.
    1. The one-child norm was introduced in China in the late 1970s to control the population. The major implications are:(any two)
      1. It was the major reason for its low population growth.
      2. It also led to a decline in the sex ratio, the proportion of females per 1000 males
      3. It would also bear a social cost that children would grow up with no siblings.
      4. After a few decades, there would be more elderly people in proportion to young people.
    2. Even after adopting various measures to contain the bulging population and reducing fertility, the populations of India and China are destined to become even larger. The death rate in India is higher than that in China, but the prospective decline in fertility in India is surely more gradual. The attainment of a replacement level (total fertility rate of about 2.2 or 2.3 children) is long in the future to achieve a low population growth. Besides, population growth has its own momentum. Even if every couple merely replaces itself, the population continues to increase by 50% or more.

 


 

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