Students can access the CBSE Sample Papers for Class 12 Economics with Solutions and marking scheme Term 2 Set 6 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Economics Term 2 Set 6 with Solutions
Time allowed: 2 Hours
Maximum Marks: 40
General Instructions:
- This is a Subjective Question Paper containing 13 questions.
- This paper contains 5 questions of 2 marks each, 5 questions of 3 marks each and 3 questions of 5 marks each.
- 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
- 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
- 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
- This question paper contains Case/Source Based Questions.
Question 1.
Distinguish between autonomous investment and induced investment.
OR
Distinguish between ex-ante investment and ex-post investment. (2)
Answer:
Autonomous investment refers to the investment which is independent of the level of income in the economy, whereas, induced investment changes as the rate of interest or level of income changes in the economy.
OR
Ex-ante investment is the desired or planned investment corresponding to different income levels in the economy whereas, ex-post investment is the actual investment in the economy during the period of one year.
Question 2.
From the following data, calculate:
(A) Consumption Expenditure and
(B) Investment Expenditure for the economy.
| Particulars | Amount (in ₹) |
| The equilibrium level of income | 5,000 |
| Autonomous consumption | 500 |
| Marginal Propensity to Save | 0.4 |
OR
If in an economy:
Change in initial Investments (Δl) = ₹500 crore
Marginal Propensity to Save (MPS) = 0.2
Find the values of the following:
(A) Investment multiplier (k)
(B) Change in final income (ΔY) (2)
Answer:
(A) We know that:
Consumption expenditure = C + bY
= 500 + 0.6 (5,000)
= ₹ 3,500 crore
(B) Also, at equilibrium level,
Y = C + 1
5,000 = 3,500 + l
l = 1,500 crore
OR
(A) K = 1/MPS
K = 1/0.2 = 5
(B) ΔY = K(ΔI)
ΔY = 5 x 500
= ₹ 2,500 crore
Question 3.
Are the following workers a beggar, a thief, a smuggler, a gambler? Why? (2)
Answer:
All those who are engaged in economic activities, in whatever capacity — high or low, are workers. Thus, they are not workers, as they are not engaged in any economic activity.
Question 4.
“India has emerged as a hotspot for medical tourism”. Defend the statement with valid arguments. (2)
Answer:
The given statement is defended as in the recent past India has witnessed many foreign nationals visiting for surgeries, organ transplant, dental and even cosmetic care. The prime reason for this phenomenon can be quoted as:
- Health services in India offer latest medical technologies with qualified professionals.
- All these medical services are less costly in India as compared to similar health care services in other countries.
Question 5.
Why is self-employed workforce higher in rural areas?
OR
Compare and analyze the distribution of working persons in different industries during the year 2017-18 on the basis of ‘gender or sex’. (2)
Answer:
Most of the rural people are mainly engaged in agriculture and do farming on their own plots thus, self-employed workforce higher in rural areas.
OR
Though both men and women workers are concentrated in the primary sector, women workers’ concentration is very high there. About 57 percent of the female workforce is employed in the primary sector whereas less than half of males work in that sector. Men get opportunities in both secondary and service sectors.
Question 6.
Which of the following items will be included/not included while estimating Gross Domestic Product? Give valid reasons in support of your answer.
(A) Wages received by an Indian working in the British Embassy in India
(B) Financial aids received from abroad after “Fani cyclone”
(C) Purchase of second-hand machinery from abroad. (3)
OR
If GDPFC = ₹ 24,760, operating surplus = ₹ 13,450, mixed-income = ₹ 4,260 and consumption of fixed capital = ₹ 530, then what will be the value of compensation of employees? (3)
Answer:
(A) Wages received by an Indian working in British embassy in India is not a part of economic territory of India, as British Embassy is a part of Economic territory of Britain.
(B) Financial aid is a transfer income as no factor service is provided in return. Hence, it is not included while estimating the value of GDP.
(C) Purchase of second hand machinery from abroad is not included as the value of imports are deducted while estimation GDP of a country.
OR
GDPFC = Operating Surplus + Mixed Income + Consumption of Fixed Capital + Compensation of Employees 24,760 = 13,450 + 4,260 + 530 + Compensation of Employees Compensation of Employees = 24,750 – 13,450 – 4,260 – 530 = ₹6,520
Question 7.
Give reasons for the slow growth and re-emergence of poverty in Pakistan. (3)
Read the following case carefully and answer question number 8 and 9 given below:
Some economists have projected that India will become the third biggest economy in the world a few decades from now. For that to happen, India will have to boost its infrastructure investment. In any country, as the income rises, the composition of infrastructure requirements changes significantly.
For low-income countries, basic infrastructure services like irrigation, transport and power are more important. As economies mature and most of their basic consumption demands are met, the share of agriculture in the economy shrinks and more service-related infrastructure is required. This is why the share of power and telecommunication infrastructure is greater in high-income countries.
Thus, development of infrastructure and economic development go hand in hand. Agriculture depends, to a considerable extent, on the adequate expansion and development of irrigation facilities. Industrial progress depends on the development of power and electricity generation, transport and communications. Obviously, if proper attention is not paid to the development of infrastructure, it is likely to act as a severe constraint on economic development.
Answer:
The reasons for the slowdown of growth and re-emergence of poverty in Pakistan’s economy are agricultural growth and food supply situation were based not on an institutionalized process of technical change but on good harvest. When there was a good harvest, the economy was in good condition, when it was not, the economic indicators showed stagnation or negative trends.
Question 8.
“Some economists have projected that India will become the third biggest economy in the world a few decades from now. For that to happen, India will have to boost its infrastructure investment.” Explain the importance of infrastructure in the light of this statement. (3)
Answer:
Infrastructure is critical to rapid economic growth and poverty eradication in the country. Adequate infrastructure in the form of a road and rail transport system, ports, power, airports and their efficiency are also needed to integrate the Indian economy and other world economies. The expansion in infrastructure facilities such as irrigation, rural electrification, roads and road transport will promote agricultural growth and setting up of agro-processing industries.
Question 9.
“The share of power and telecommunication infrastructure is greater in high-income countries.” Why? (3)
Answer:
In any country, as the income rises, the composition of infrastructure requirements changes significantly. For low-income countries, basic infrastructure services Like irrigation, transport and power are more important. As economies mature and most of their basic consumption demands are met, the share of agriculture in the economy shrinks and more service-related infrastructure is required. This is why the share of power and telecommunication infrastructure is greater in high-income countries.
Question 10.
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 |
Answer:
(A) The given data shows that China could arrest its annual population growth rate with the implementation of some stringent measures in late 1970’s like the introduction of one child norm. This step has been instrumental in controlling the growth of population in China. India stands virtually more than double to China at its annual population growth rate of 1.2% as compared to China’s annual population growth rate of 0.5% pa.
(B) The social dynamics of both the countries are similar to each other; sex ratio is low and biased in both the countries due to preference for male child. Whereas, India stands at 929 females per 1000 males, China is not far ahead at 941 females per 1000 males.
Question 11.
(A) “Gross Domestic Product (GDP) does not give us a clear indication of economic welfare of a country.” Defend or refute the given statement with valid reason.
(B) If in a locality, a new park is developed by the municipal corporation, it will have externalities, both positive and negative. State one example for each of both types of externalities with reason. (5)
Answer:
(A) Yes, given statement is defended. As GDP may not take into account
- Non-monetary exchanges like services of housewife
- Externalities i.e. benefits and harms which are caused due to economic activities
- Distribution of income.
(B) The park in neighborhood can be a source of positive externality as it helps in reducing pollution and thereby improving health and efficiency.
The park in a neighborhood can be a source of negative externality if it is used by anti-social elements. This can increase crime and lead to insecurity.
Question 12.
(A) Calculate national income from the following data: (₹ in crores)
(i) Private final consumption expenditure 900
(ii) Profit 100
(iii) Government final consumption expenditure 400
(iv) Net indirect taxes 100 M Gross domestic capital formation 250
(Vi) Change in stock 50
(vii) Net factor income from abroad (-)40
(viii) Consumption of fixed capital 20
(ix) Net imports 30
(B) Describe the expenditure method of calculating Gross Domestic Product at Market Price. (5)
OR
(A) Describe incomes from property and entrepreneurship.
(B) Calculate Gross Value Added at Market price (GVAMP) from the following data: (5)
| Particulars | Amount (in ₹ lakh) |
| Depreciation | 20 |
| Domestic Sales | 200 |
| Change in Stocks | (-) 10 |
| Exports | 10 |
| Single-use producer oods | 120 |
| Net Indirect Taxes | 20 |
Answer:
(A) National Income = Private final consumption expenditure + Government final consumption expenditure + Gross domestic capital formation – Consumption of fixed capital – Net imports – Net indirect taxes + Net factor income from abroad = 900 + 400 + 250 – 20 – 30 – 100 + (-)40 = ₹1,360 crore
(B) To calculate GDPMP by the expenditure method, we add up final expenditures on the goods and services produced by all the economic sectors of an economy. Expenditures incurred on consumption and investment are final expenditures.
These are classified into:
(i) Private final consumption expenditure.
(ii) Government final consumption expenditure.
(iii) Gross domestic capital formation.
(iv) Net exports = Exports less Imports
The sum total of these expenditures is GDPMP.
OR
(A) Incomes from property and entrepreneurship are incomes earned by property owners. It includes, rent and royalty, profit, interest. It can also be termed as Operating Surplus.
(B) GVAMP = [(ii)+(iii)+(iv)]-(v)
= [200 + (-)10 + 10] – 120
= 200 – 120
= ₹80 lakhs
Question 13.
Explain the determination of equilibrium level of national income using ‘saving and investment’ approach. Use diagram. Also explain the effects if saving is greater than investment. (5)
Answer:
The equilibrium is where S = l
i.e. at E, where the savings curve ‘S’ and investment curve ‘l’ intersect.
If S > I, it means AD < AS. This leads to unplanned inventories.
Producers reduce output till S = I again.