Students can access the CBSE Sample Papers for Class 12 Economics with Solutions and marking scheme Term 2 Set 7 will help students in understanding the difficulty level of the exam.

## CBSE Sample Papers for Class 12 Economics Term 2 Set 7 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.
Find net value added at factor cost: (₹ Lakh)
(i) Durable use producer goods with a life span of 10 gears 10
(ii) Single-use producer goods 5
(iii) Sales 20
(iv) Unsold output produced during the year 2
(v) Taxes on production 1
NVAFC = Sales + Unsold Output – Single use
producer goods – Depreciation – Taxes on production
= 20 + 2 – 5 – (10/10) – 1
=20 + 2 – 5 – 1 – 1
= ₹15 lakhs

Question 2.
If in an economy: Change in Initial investments (Δl) = ₹700 crores Marginal Propensity to Save (MPS) = 0.2 Find the values of the following:
(A) Investment Multiplier (K)
(B) Change in final income (ΔY) (2)
OR
Estimate the change in initial investment if Marginal Propensity to Save (MPS) is 0.10 and change in final income is ₹15,000 crores. (2)
K = 1/M PS
K = 1/0.2 = 5
ΔY = K(Δl)
ΔY = 5 x ₹700
= ₹3.500 crores
OR
Investment Multiplier (K) = 1/MPS
K = 1/0.10 = 10
K = ΔY/Δl
10 = ₹15.000/Δl
Δl = ₹1.500
Change in initial investment
= ₹1.500 crore

Question 3.
State whether the following statement is true or false:
“As per Keynesian theory in an economy, full employment can never exist.”
OR
State whether the following statement is true or false:

Aggregate demand curve including aggregate expenditure at different levels of income slopes downward from left to right. (2)
True
Full employment can never exist as some people mΔY not be willing to work at all or not willing to work at the prevailing wage rate. It is known as voluntary unemployment. Thus, some natural rate or unemployment alwΔYs exists in the economy.
OR
False
Expenditure is positively related to income thus, aggregate demand curve including aggregate expenditure at different levels of income slopes upward from left to right.

Question 4.
Distinguish between ‘Green Revolution’ and ‘Golden Revolution. (2)
Green Revolution refers to the large increase in production of food grain resulting from the use of high yield variety (FIYV) seeds of food crops (like wheat and rice) and supportive technology during mid 1960s to mid 70s. Whereas, Golden Revolution refers to the process where India has emerged as a leader in producing a variety of horticulture crops.

Question 5.
Is it necessary to generate employment in the formal sector rather than in the informal sector? Why?
OR
Since independence, the benefits of the increase in economic growth in India have trickled down to the people at the bottom of population pyramid. Defend or refute with valid reason. (2)
Workers and enterprises in the informal sector do not get regular income; they do not have any protection or regulation from the government. Workers are dismissed without any compensation. Technology used in the informal sector enterprises is outdated; they also do not maintain any accounts. Workers of this sector live in slums and are squatters. Thus, it is necessary to generate employment in the formal sector rather than in the informal sector.
OR
The statement is refuted as there have been different factors (like massive rate of growth of population, unequal distribution of wealth, skewed benefits accruing from green revolution, etc.) due to which benefits of increase in the Gross Domestic Product have not trickled down completely to the people at the bottom of population pyramid.

Question 6.
“Some infrastructural facilities have a direct impact on production of goods and services while others give indirect support by building the social sector of the economy.” Elucidate. (3)
Some divide infrastructure into two categories – economic and social. Infrastructure associated with energy, transportation and communication are included in the former category thus, economic infrastructure is the basic facilities which directly benefit the process of production and distribution in an economy. Those related to education, health and housing are included in the latter thus, social infrastructure gives indirect support by building the social sector of the economy.

Question 7.
“The Great Leap Forward intended to transform China from an agrarian economy to modern society.” Explain.
OR
Nations incorporate international membership and encompass geopolitical entities that operationally transcend a single nation-state? Explain why. (3)

Read the following case carefully and answer questions number 8 and 9 given below:

Budget 2021: Covid-19 brings back focus on Yoga, industry puts these demands Yoga has been part of Indian culture for thousands of years and is widely accepted around the world for its health and wellness creating aspects. The global coronavirus pandemic, caused by severe acute respiratory syndrome coronavirus 2 or SARS-CoV-2, has once again shifted focus towards this age-old practice. While in a pre-COVID era most people opted for yoga as a weight loss measure, the pandemic has made them aware of the importance of their wellness, health, and immunity for which practicing yoga is best. Boosting immunity is an essential requisite to fight against highly infectious coronavirus. Several studies have proved that dedicated pranayamas and systematic tailor-made asana practices could build up the immunity in the body that will help fight the viral infection.

Experts believe that the yoga industry is making the desired impact on the people of India and in turn, it seems to create a change in the development of individuals and also become a national interest. Shilpa Ambre – CFO, SARVA Yoga – told Financial Express Online that it is the right time to promote the industry by extending all the required support. Praising the Modi government for exceptionally brilliant work in spreading the importance of yoga in the past few years, Mita Vinay said that allocating some dedicated budget will help the yoga industry flourish at the right time and the right way. She also feels that loans at a low-interest rate will help yoga teachers start their own yogashala or studios. “Many talented teachers are not able to go all out spreading the positive effects of yoga because of the lack of the opportunity, I would like to see a low-interest loan provided to the yoga teachers who wish to open their yogashala or studio.”

https://www.financialexpress.com/budget/budget-2021-covid-19-brings-back-focus-on-yoga-industry-puts-these-demands /2156744/
The Great Leap Forward (GLF) campaign initiated in 1958 aimed at industrialising the country on a massive scale. People were encouraged to set up industries in their backyards. In rural areas, communes were started. Under the Commune system, people collectively cultivated lands. In 1958, there were 26,000 communes covering almost all the farm population.
OR
Regional economic integration/groupings are one of the major tools for developing international trade activities. It focuses on the transformation of a small nationaL economy into a larger economic unit. Regional and economic groups such as SAARC, European Union, ASEAN, G-8, G-20, BRICS, etc. are formed to increase economic cooperation between neighboring nations or those with similar economic interests. The formation of grouping is considered more important in developing countries because all developing countries face competition not only from developed countries but also within themselves due to the limited economic space. In addition, co-operation with other economies in our region is also necessary, as all major economic activities in the region contribute to the overall human development of the shared environment.

Question 8.
How allocating budget to popularize yoga will impact GDP? (3)
Government expenditure on popularizing yoga raises Gross Domestic Product because it is government’s final consumption expenditure.

It is a productive expenditure which improves the productive capacity of the economy. Yoga helps to improve the quality of the labour force by enhancing mental and physical stability of the people. This improves the production process and higher the production efficiency, higher will be the GDP growth.

Question 9.
Government should allocate budget to popularize yoga among the masses. Analyse its impact welfare of the people. (3)
Expenditure on spreading the importance of Yoga will raise welfare of the people because yogic exercises improve health and thus, raises efficiency of the people. Several studies have proved that dedicated pranΔYamas and systematic tailor-made asana practices could build up the immunity in the body that will help fight the viral infection and increases efficiency.

Question 10.
Answer the following questions on the basis of the following data:
(A) Comment upon the population growth rates among the three countries.
(B) Which country has most skewed in sex ratio?

Source: World Development Indicators, 2015.
www.worldbankorg
(A) The given data shows that the annual
growth rate of population is maximum in Pakistan standing at 2.1%, whereas; the same stands at a meager 0.5% in case of China (might be a direct result of the One-Child Policy adopted). The annual population growth rate of India is in the danger zone of more than 1% p.a. India will be overtaking China as the most populous country in the world in near future.

(B) Amongst the three countries stated above, India has most skewed data sex ratio (929 female per 1000 male). This is one of the major concerns for the demographers in India.

Question 11.
(A) “Domestic/household services performed by a woman may not be considered as an economic activity”. Defend or refute the given statement with valid reason.

(B) ‘Compensation to the victims of a cyclone is an example of a welfare measure taken by the government”. State with valid reason, should it be included/not included in the estimation of national income of India. (5)
(A) The given statement is defended; as it is difficult to measure the monetary value of the services performed by a woman (homemaker). Therefore, these activities mΔY not be considered as an economic activity.

(B) Compensation given to the victims of a cyclone is an example of a social welfare measure taken by the government. However, it is not included in estimation of national income as it is a transfer pΔYment which does not lead to corresponding flow of goods and services.

Question 12.
The saving function of an economy is given as:
S = – 25 + 0.25 Y.
If the planned investment is ₹200 crores, calculate the following:
(A) Equilibrium level of income in the economy.
(B) Aggregate demand at income of ₹ 500
crores. (5)
OR
Answer the following questions based on the data given below:
(i) Planned investment = ₹100 crore
(ii) C = 50 + 0.5 Y
(A) Determine the equilibrium level of income.
(B) Calculate the saving and consumption expenditure at equilibrium level of National Income. (5)
(A) We know that the equilibrium level of income in an economy is determined when: S = l
According to the question:
– 25 + 0.25Y = 200
0.25Y = 225
Y = ₹900 crores

(B) We know that in an economy: AD = C + l According to the question, AD at income of ₹900 crores will be;
AD = 25+(l – 0.25)Y + 200
AD = 25+0.75(500) + 200
AD = ₹600 crore
OR
(A) At equilibrium level of income, Y = C + 1
Y = (50 + 0.5Y) +100
Y – 0.5Y = 150
Y = 150/0.5 = ₹300 crores
Equilibrium level of income
= ₹300 crores

(B) S = – C + (1 – b) Y
= – 50 + (1 – 0.5) (300)
= ₹ 100 crores
Y = C + S
300 = C + 100
C = 300 – 100 = ₹ 200 crores

Question 13.
“It refers to facilities and systems that enable the functionality of a community. The lack of it places pressure on the existing systems in place. Overcrowded schools and healthcare facilities, overpopulation, and unemployment lead to an underperforming economy.”

Identify the type of infrastructure and its importance for an economy. (5)