CBSE Class-12 Exam 2020 : Question Paper (Economics)

• Subject :-Economics
• Class : XII
• Year : 2020

SECTION A

(Macro Economics)

1. In order to control the money supply in the economy, the Central Bank may ________.(Choose the correct alternative) 1
(A) buy securities in the open market
(B) sell securities in the open market
(C) reduce cash reserve ratio
(D) reduce repo rate

2. State whether the following statement is true or false :
‘‘Government Budget is an important monetary policy instrument.’’ 1
OR
Disinvestment is a ________ (capital/revenue) receipt of the government. (Choose the correct alternative) 1

3. Effective demand is defined as ________. (Fill in the blank with the suitable definition) 1

4. Two components of money supply are ________ and ________.(Fill in the blanks with correct answers) 1

5. State whether the following statement is true or false :‘‘Expected obsolescence is included in depreciation.’’ 1 

6. Fiscal deficit can be estimated using the formula ________.(Fill in the blank with the correct formula) 1

7. According to the theory of Keynesian Economics, the value of Average Propensity to Consume can never be ________. (Choose the correct alternative) 1
(A) zero
(B) unity (1)
(C) more than one
(D) less than one

8. ________ is one of the most important sources of demand for foreign currency.(Fill in the blank with the correct answer) 1

9. State whether the following statement is true or false : ‘‘As per Keynesian theory in an economy, full employment can never exist.’’ 1 

10. Define ‘Trade Surplus’. 1

11. ‘‘Final goods include only those goods which are consumed by the households.’’ Defend or refute the given statement with valid reason. 3
OR
‘‘Circular flow principle is based on the assumption that one’s expenditure will become other’s income.’’ Explain the given statement. 3

12. Justify the following statement, with valid reason.
‘‘Ex-ante Aggregate Demand is always equal to Ex-ante Aggregate Supply.’’ 3
13. Using a hypothetical numerical example, explain the process of credit creation by a commercial bank. 4
OR
‘‘Central Bank acts as the banker to the government.’’ Elaborate the given statement. 4

14. ‘‘India is taking huge leaps in the index of Ease of Doing Business, as a result many MNCs are shifting their production base to India.’’ In the light of the above statement, comment upon the flow of foreign exchange and its likely impact on the Indian Economy. 4

15. (a) Define ‘Revenue Expenditure’.
(b) Distinguish between Direct tax and Indirect tax. 1+3

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Courtesy: CBSE