CBSE Class 12 Economics Question Paper 2023 (Series: HFG1E/5) with Solutions

Students can use CBSE Previous Year Question Papers Class 12 Economics with Solutions and CBSE Class 12 Physics Question Paper 2019 (Series: HFG1E/5) to familiarize themselves with the exam format and marking scheme.

CBSE Class 12 Economics Question Paper 2023 (Series: HFG1E/5) with Solutions

Time Allowed: 3 hours
Maximum Marks: 80

General Instructions:

This question paper contains 34 questions. All questions are compulsory.
These question Paper contains two sections:
- Section A – Macro Economics
- Section B – Indian Economics Development
This question paper contains two sections:
This paper contains 20 Multiple Choice Questions type questions of 1 mark each.
This paper contains 4 Short Answer Questions type-I questions of 3 marks each to be answered in 60 to 80 words.
This paper contains 6 Short Answer Questions type-II questions of 4 marks each to be answered in 80 to 100 words.
This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered in 100 to 150 words.
Attempt all parts of a question together.

( Set-1; 58/5/1 )
Section-A: Macro Economics

Question 1.
‘Money is an asset which can be stored for use in future’. [1]
In the light of given statement, identify the function of money. (Choose the correct alternative)
(a) A measure of value
(b) A standard of deferred payment
(c) A store of value
(d) A medium of Exchange
Answer:
(c) A store of value

Question 2.
“Considering the depreciation of Indian Currency (₹) in the international market, the Reserve Bank of India (RBI) has decided to purchase Indian currency (₹) in the open market.”
This represents ………………. exchange rate system. (Fill up the blank with correct alternative) [1]
(a) Fixed
(b) flexible
(c) managed floating
(d) manipulated
Answer:
(c) managed floating

Question 3.
Read the following statements carefully: [1]
Statement 1: In a two sector economy, consumption expenditure and investment expenditure are the two components of Aggregate Demand.
Statement 2: Aggregate demand curve always starts from point of origin with positive slope.
In the light of given statements, choose the correct alternative from the following:
(a) Statement 1 is true and Statement 1 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.
Answer:
(a) Statement 1 is true and Statement 1 is’ false.

Question 4.
‘Deficit’ in Balance of Payment (BOP) refers to the excess of …………. [1]
(Choose the correct alternative)
(a) Current account payments over Current account receipts.
(b) Capital account payments over Capital account receipts.
(c) Autonomous payments over Autonomous receipts.
(d) Accommodating payments over Accommodating receipts.
Answer:
(c) Autonomous payments over Autonomous receipts.

Question 5.
(A) From the statements given in Column I and Column II, Choose the correct pair.

Column – I	Column – II
A. Vegetables grown in the Personal garden	(i) Non marketing activity
B. A car used as a taxi	(ii) Consumer good
C. An air-conditioner used by household	(iii) Capital good
D. Scholdership given to students by government	(iv) Factor income

(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)
Answer:
(a) A – (i)

(B) Complete the table:
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 1
Alternatives:
(a) 4000,10400, 4000, 4000
(b) 4000,10400, 4000, 4400
(c) 2000, 6000, 6000, 4400
(d) 4000, 10400, 6000, 4000
Answer:
(b) 4000,10400, 4000, 4400

As we know, Value of Output = Value Added + Intermediate consumption
∴ For Baker, (i) = 2,000 + 2,000
(i) = 4,000
Now, Total (Value of output) (ii) = 2000 + (i) + 4,400
= 2,000 + 4,000 + 4,400
∴ (ii) = 10,400

For Retail seller, 4,400 = (iii) + 400
∴ (iii) = 4,400 – 400
= 4,000

Total (Value of Added) (iv) = 2000 + 2000 + 400
∴ (iv) = 4,400

Question 6.
(A) If in an economy, the Investment Multiplier is 4 and Autonomous Consumption is ?30 crore, the relevant consumption function would be ……………. [1]
(Fill up the blank with correct alternative)
(a) C = 30 + 0.75Y
(b) C = -30 + 0.25Y
(c) C = 30 + 0.25Y
(d) C = -30 – 0.25Y
Answer:
(a) C = 30 + 0.75Y

(a) As we know, Investment Multiplier = \(\frac{1}{1-MPC}\)
⇒ 4 =
⇒ 4 – 4 MPC = 1
⇒ 4 MPC = 3
MPC = \(\frac{3}{4}\) = 0.75

False

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(B) If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be ………… (Fill up the blank with correct alternative) [1]
(a) equal to unit
(b) greater than one
(c) less than one
(d) equal to zero
Answer:
(d) equal to zero

Question 7.
Read the following statements carefully: [1]
Statement 1: Money Supply (M ₁ ) in India does not include ‘demand deposits’ with commercial Banks.
Statement 2: Money Supply (M ₁ ) refers to, assets available with the Commercial Banks during a particular period of time.
In the light of the given statements, choose the correct alternative.
(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.
Answer:
(d) Both statements 1 and 2 are false.

Question 8.
(A) Suppose, the price of one UK Pound (£) has increased from ₹70 to ₹80, owing to market forces. (Choose the correct alternative) 1
This means that value of Indian Currency (₹) has ………..
(a) appreciated
(b) depreciated
(c) revalued
(d) devalued
Answer:
(b) depreciated

(B) Suppose, Country X has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant? [1]
(Choose the correct alternative)
(a) A surplus trade balance in Country X
(b) A deficit trade balance for Country X
(c) A rise,in exports from Country X to Country Y
(d) A deficit trade balance for Country Y
Answer:
(b) A deficit trade balance for Country X

False

Question 9.
Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below: [1]
Assertion (A): Full employment refers to, absence of involuntary unemployment.
Reason (R) : Under full employment situation, all willing and able bodied people get employment at prevailing wage rate.
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 but 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.
Answer:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Question 10.
In an economy, the value of Marginal Propensity to Save (MPS) is 0.25, what will be the value of increase in income, if investments increased by ₹200 crores? [1]
(a) ₹200 crores
(b) ₹150 crores
(c) ₹1,000 crores
(d) ₹800 crores
Answer:
(d) ₹800 crores

As we know, Multiplier (K) = \(\frac{1}{MPS}\) ⇒ K = \(\frac{1}{0.25}\) = 4
Also, K = \(\frac{\Delta \mathrm{Y}}{\Delta \mathrm{I}}\) ⇒ 4 = \(\frac{\Delta \mathrm{Y}}{200}\)
ΔY = ₹800 crores

Question 11.
Suppose only one Good ‘X’ is produced in the country. Output of Good X during year 2018 and 2019 were 100 units and 110 units respectively. The market price of the product during the two years was ₹50 and ₹55 per unit respectively.
Calculate the percentage change in Real Gross Domestic Product (GDP) in year 2019 using 2018 as the base year. [3]
Answer:
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 4

Question 12.
(a) Giving valid reasons, state whether the following statements are true and false:
(i) Dividend received from investment abroad is recorded on the credit side of the capital account.
(ii) Depreciation of the Indian Currency will lead to promotion of Indian exports.
Or
(b) Distinguish between Autonomous transactions and Accommodating transactions. [3]
Answer:
(a) (i) False, Dividend received is part of the Current Account of the Balance of Payments and not of the Capital Account. Thus, dividend received from investment abroad is recorded on the credit side of Current Account, as neither assets nor liabilities of the country get affected.

depreciation of the Indian currency implies that more rupees are now required to buy a foreign currency, say a dollar . this also implies that with a given amount of foreign currency more goods can be bought from the domestic market . depreciation of the Indian currency will lead to promotion of Indian exports as Indian exports become relatively cheaper for the rest of the world .

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Difference between Autonomous transactions and Accommodating transactions
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 5

Question 13.
If planned savings exceed planned investments in an economy, explain its likely impact on income, output and employment. [4]
Answer:
According to the Savings and Investment approach, tjie national income in an economy is in equilibrium when planned savings (S) are equal to planned investment (I). Savings are the excess of income over consumption expenditure whereas investment refers to the expenditure incurred on creation of new capital assets.
We can understand this with the help of a schedule and diagram:
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 6
This can be explained with the help of the given diagram:

SS is the savings curve that shows planned savings at different levels of income. It starts from a negative value because there must be some consumption when income is zero.
Investment curve (II) is parallel to X-axis representing autonomous investment which remains unchanged as income increases.
E is the equilibrium point where S = I and OY*,is the equilibrium level of income. Where ex-ante Savings is equal to ex-ante Investment.

True

Question 14.
As per the following news published in “The Hindu” on 6th August, 2022:
The Monetary Policy Committee (MFC) of the Reserve Bank of India raised the Repo Rate by 50 basis points.” Identify and explain the likely cause and consequences behind this type of action taken by the Reserve Bank of India. [4]
Answer:
Repo Rate is the rate of interest charged by Central Bank on loans given to Commercial Banks. During a situation of excess demand leading to inflation, the Central Bank raises the Repo rate which discourages commercial banks in borrowing from the Central Bank. Increase in Repo rate forces Commercial banks to increase their own lending rates making credit costlier. As a result, the demand for loans falls discouraging investment. Also reduction in availability of credit helps in correcting the situation of excess demand and reducing inflationary gap.

Question 15.
(a) Explain the role of Central Bank as Governments’ agent and advisor. [4]
Or
(b) Define Reverse Repo Rate. Discuss briefly, how this instrument helps in controlling credit creation by commercial banks. [4]
Answer:
(a) A Central Bank conducts the banking accounts of government departments. It performs the same banking functions for the government as a Commercial bank performs for its customers. It accepts their deposits and undertakes inter-bank transfers. It also gives loans to the government.
As an agent, it manages the government’s public debt. It undertakes payment of interest on this debt and other related services to public debt. It accepts the payments of taxes from the public on behalf of the government and makes payments for the cheques issued by the government.
It also gives advise to the government regarding money market, capital market, government loans and on economic policy matters.
Or
(b) When the Commercial banks have surplus funds they can deposit the same with the Central Bank and earn interest. The rate of interest paid by the Central Bank on such deposits is called Reverse Repo Rate.
When Reverse Repo Rate is increased, it encourages the Commercial banks to deposit more of their funds with the Central Bank. This has a negative effect on the lending capability of Commercial banks as it reduces the liquidity of the banks. Thus, this controls credit creation by Commercial banks.
Whereas, lowering Reverse Repo Rate has the opposite effect as it increases the Credit Creation capacity of Commercial banks.

Question 16.
(a) (I) How should the following be treated in estimating National Income of a Country? Give valid reasons. 3
(i) Profits earned by Foreign Banks in India.
(ii) Expenditure on upgradation of fixed asset by a firm.
(II) Suppose in a financial year, the Gross Domestic Product (GDP) at market price of a country was ?1,100 crore. Net factor income from Abroad was GOO crore, the net indirect taxes was G50 crore and National income was ?850 crore. 3
Calculate the value of depreciation, on the basis of above information.
Or
(b) (I) ” While estimating Gross Domestic Product (GDP) by expenditure method, entire focus is on expenditures incurred by the residents of the country”. [3]
Do you agree with the given statement? Give valid reason in support of your answer.
(II) Calculate the value of Domestic Income from the following data: [3]
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 2
Answer:
(a) I. (i) Profit earned by foreign Banks in India is not included in National Income because it is factor income earned by a non-resident (foreign banks) from its contribution to production inside the domestic territory of India i.e., factor income paid to abroad and hence it is deducted.
(ii) Yes, expenditure on upgradation of fixed asset by a firm will be included in National Income as it is a part of gross fixed capital formation.

II. NNP _FC = GDP _MP – Net Indirect Taxes – Depreciation + Net Factor Income from abroad
⇒ ₹850 = ₹1100 – ₹150 – Depreciation + ₹100
Depreciation = ₹1100 + ₹100 – ₹150 – ₹850 = ₹200 crore
Or
(b) I. No, I do not agree with the -given statement. In Expenditure method, the focus is on final expenditure on final goods and services (both consumption goods and capital goods) produced within the domestic territory of the country.
The goods produced within the domestic territory can be purchased by residents (Private final consumption expenditure), Government final consumption expenditure, firms and government (Gross Domestic Capital Formation) and Non-residents (Net exports i.e., Excess of exports over imports). Imports are deducted because they are not produced within our domestic territory.

II. Domestic Income (NDPFC) = (i) + (iii) + (iv) + (vi) + (vii) + (ix)
= ₹1300 + ₹1700 + ₹400 + ₹300 + ₹400 + ₹1400 = ₹5500 crores

Question 17.
Study the given picture carefully:
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 3
Answer the following questions based on common knowledge and picture: [3]
(a) Categorise the given items in the picture into tax/non-tax receipts.
(b) “Government has started spending more on providing free services like education and health to the poor.” [3]
In the light of above statement, explain how the government can use the budgetary policy in ‘ reducing ‘inequalities of income’.
Answer:

Tax Receipts	Non-Tax Receipts
Individual Income tax Property Tax Sales & Gross Receipts Corporate Income Tax	Fines Motor Vehicle License Fee

Section B : Indian Economic Development

Question 18.
During the British rule in India, Indian agricultural output witnessed stagnation due to ………… (Choose the correct alternative) [1]
(a) Decline in handicrafts
(b) Drain of Indian wealth
(c) Land settlement
(d) Introduction of railways
Answer:
(c) Land settlement

Question 19.
(A) In the first phase of Green Revolution, output was restricted mainly to ………….. (Choose the correct’ alternative) [1]
(a) Cereal and Pulses
(b) Wheat and Rice
(c) Cotton and Jute
(d) Jowar and Bajra
Answer:
(b) Wheat and Rice

(B) …………… is known as the architect of Indian Planning. [1]
(a) Jawaharlal Nehru
(b) P.C. Mahalanobis
(c) Dr. Manmohan Singh
(d) Dr. Rajendra Prasad
Answer:
(b) P.C. Mahalanobis

Question 20.
(A) Read the following statements carefully:
Statements : Great Proletarian Cultural Revolution was introduced in China in 1950’s.
Statement 2 : China’s growth is mainly contributed by the manufacturing sector.
In the light of given statements, choose the correct alternative from the following: [1]
(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.
Answer:
(d) Both statements 1 and 2 are false.

(B) Identify the incorrect statement from the following: (Choose the correct alternative) 1
(a) China’s Economic growth rate is better than that of Pakistan.
(b) Pakistan is behind India in HDI ranking.
(c) One Child policy norm was adopted in Pakistan.
(d) In 1991, India adopted New Economic Reforms.
Answer:
(c) One Child policy norm was adopted in Pakistan.

Question 21.
……………. is the apex institution which plans and evaluates policies related to rural credit needs. [1]
(a) Cooperative Credit Societies
(b) Regional Rural Banks
(c) Self Help Groups
(d) NABARD
Answer:
(d) NABARD

Question 22.
Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below: [1]
Assertion (A): During 1980’s, economic growth rate of Pakistan was more than that of India.
Reason (R): Pakistan followed the path of mixed economic structure with equal participation of the public and the private sector.
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 but 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.
Answer:
(c) Assertion (A) is true, but Reason (R) is false.

Question 23.
Identify, which of the following are associated with the problem of human capital formation in India? 1
(i) Brain drain
(ii) Low academic standards
(iii) Rising population
(iv) Changes in social outlook
Alternatives:
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i), (ii) and (iii)
(d) (i) and (iv)
Answer:
(c) (i), (ii) and (iii)

Question 24.
Read the following statements carefully: [1]
Statement 1: Special Economic Zones (SEZ’s) policy has led to huge Foreign Direct Investment (FDI) flow to China.
Statement 2: China’s rapid industrial growth was the result of its economic reform in 1981.
In the light of the given statements, choose the correct alternative:
(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.
Answer:
(a) statement 1 is true and Statement 2 is false.

Question 25.
Identify, which of the following is an incorrect function of environment? [1]
(a) Supplies resources
(b) Assimilates waste
(c) Land degradation
(d) Provides aesthetic services
Answer:
(c) Land degradation

Question 26.
Identify, which of the following is the correct formula for calculating ‘Worker-Population Ratio’?
(a) \(\frac{\text { Total Labour Force }}{\text { Total Population }} \times 100\)
(b) \(\frac{\text { Total Workers }}{\text { Total Population }} \times 100\)
(c) \(\frac{\text { Total Population }}{\text { Total Labour Force }} \times 100\)
(d) \(\frac{\text { Total Population }}{\text { Total Workers }} \times 100\)
Answer:
(b) \(\frac{\text { Total Workers }}{\text { Total Population }} \times 100\)

Question 27.
Read the following statements carefully: [1]
Statement 1: First Five Year Plan of China commenced in the year 1956.
Statement 2: Both India and China adopted Socialist Economy model, following USSR. In the light of the given statements, choose the correct alternative:
(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.
Answer:
(d) Both statements 1 and 2 are false.

Question 28.
Interpret the situation of earth as depicted in the given picture, with reference to current environment challenges. [3]
CBSE Class 12 Economics Question Paper 2019 (Series HFG1E5) with Solutions 8
Answer:
The given image depicts the environmental challenge of ‘Global Warming’. Global warming is a gradual increase in the average temperature of the earth’s lower atmosphere. It is caused by increases in carbon dioxide and other greenhouse gases. Burning of fossil fuels and deforestation are the major causes of Global Warming.

True

Question 29.
(a) “In rural areas of India, more members of a family are engaged in work, yet the gross income of the family is generally low.”
Identify the type of unemployment indicated in the above statement and explain the paradox associated with it. [3]
Or
(b) Explain the role of micro-credit system in meeting credit requirements of poor. [3]
Answer:

(a) The given statement indicates a situation of disguised unemployment. It is a situation when
fhore than actually required number of workers are engaged in work. It is a very common type of unemployment in rural areas. Though there has been a sharp increase in the number of people working in agriculture but at the same time there has not been any corresponding increase in the area under cultivation.

False

True

Question 30.
Compare and analyse the following information related to Annual Growth of Gross Domestic Product (GDP) of India and China: [4]
Annual Growth of Gross Domestic Product

Country	1980-90	2015-17
India	5.7	73
China	10.3	6.8

(Source: Asian Development Bank, Philippines, World Development indicator – 2018)
Answer:
During 1980-90, China was able to maintain a double digit growth rate of 10.3 % whereas India’s GDP was growing at a rate of 5.7%.
During 2015-17, there was a decline in China’s growth rate which came down to 6.8%, whereas India’s growth rate registered an increase from 5.7% to 7.3%.

Question 31.
(a) (i) State the meaning of ‘Privatisation’. [1]
(ii) ‘Agriculture sector has been adversely affected by the Economic reform process’. Comment. [3]
Or
(b) State and explain any two main causes behind infrastructural development by British rule. [4]
Answer:
(a) (i) Privatisation is the processes of withdrawal of the government from ownership and management of public sector companies and setting it to private entities and individuals.
(ii) Reforms have not been able to benefit Agriculture where the growth rate has been decelerating. It is because public investment in agricultural infrastructure like irrigation, power, roads, market linkages etc. (which played a crucial role in the Green Revolution) has reduced in the reform period. Also, removal of fertilizer subsidy increased the cost of production which severely affected the small and marginal farmers.

Due to LPG polices, there was reduction in import duties on agricultural products and lifting of quantitative restrictions on agricultural products which resulted in increased international competition for the Indian farmer.
Or
(b) The British sought to achieve the following for their own benefit through the policies of infrastructure development:

Railways were developed to market the finished products imported from UK, into the interiors of the country.
Roads were constructed to mobilise the army and for carrying raw materials from the countryside to the nearest railway station or port for sending it to Britain.
The Post and Telegraph was developed for controlling and maintaining law and order situation in India.

Question 32.
State, with valid reasons whether, the following statements are true or false:
(a) “Higher productivity and production are the outcome of investment in human resources.”
(b) Rising population is not the cause for quality of human capital formation. [2]
Answer:
(a) Given statement is true because of the following reasons:

Higher productivity of physical capital. Human capital formation increases productivity of physical capital accelerating the pace of economic growth as physical capital is created and, therefore, can be handled better by intelligent and skilled human beings.
Higher productivity levels. Human capital raises productivity levels in a country. Education gives people additional skills to earn more and enhance their living standards.

(b) Given statement is false.
Continuous rise in population has adversely affect the quality of human capital. It has reduced the per-capita availability of benefits of economic growth. Benefits of economic growth relating to housing, hospitals, education etc. have reduced due to rising population. Rising population has also lowered the capacity to possess skill and expertise required for economic growth.

Question 33.
(a) (i) Define Agricultural diversification. [2]
(ii) State the meaning of organic farming. Discuss how does it help in promoting sustainable development. [4]
Or
(b) (i) Discuss the need for promoting women’s education in India. [3]
(ii) Explain absorptive capacity of environment with example. [3]
Answer:
(a) (i) Agricultural diversification refers to the re-allocation of some of farm’s productive resources such as land, capital, farm equipment and labour to other produces particularly to non-farming activities.
(ii) Organic farming is a whole system of farming that restores, maintains and enhances the ecological balance. It is a system of farming that focuses on maintaining soil health (rather than plant health) so that farming becomes a sustainable process along with an eco-friendly environment.
In recent years, considerable efforts have been made to create awareness about the harmful effects of conventional agriculture that relies heavily on chemical fertilizers and toxic pesticides. These fertilizers and pesticides enter the food supply, penetrate the water sources, harm livestock, deplete soil fertility and devastate the natural ecosystem. So, efforts are being made to develop technologies which are eco-friendly and are essential for sustainable development. Organic farming is one such eco-friendly technology. Organic farming is a system of farming that relies upon the use of organic inputs for cultivation. It uses crop rotation, animal manures and composts and natural pest control to maintain fertility of the soil.

: (b) (i) It is important to educate the women of a country because: (a) (i) It is important to educate the women of a country because: (b) (i) It is important to educate the women of a country because: (b) (i) It is important to educate the women of a country because: (i) (ii) (iii) (iii) (iii) (iii) (iii) (i)

It makes them economically independent and improves their social status.
Educating the women of a country significantly improves the quantity and quality of healthcare for women and children in a country.
It also favourably impacts the fertility rate as educated women understand the advantages and disadvantages of limiting the family size.
Promoting women’s education would also promote gender equality.

iii) Absorptive capacity means the ability of the environment to absorb degradation . due to excess wastes being generated, we are on the threshold of an environmental crisis . the past development has polluted and dried up rivers and other aquifers making water an economic gold .

True

Question 34.
Read the following text carefully and answer the given questions on the basis of the same and common understanding:
India urged the World Trade Organisation (WTO) to relax rules to allow the country to export food grains from its public stocks to the nations facing food crises. India can help, reduce food insecurity but there is hesitation on the part of the WTO, in relaxing its rules. India’s Finance Minister said food, fuel and fertilizers are global public goods and ensuring access of these for developing and emerging economies is critical. She also shared India’s experiences, including robust gains in agriculture production, citizen centric food security programmes and innovative delivery mechanisms such as the One Nation one Ration Card Scheme. (Source : The Economic Times; July 16, 2022)
(a) State and discuss any two objectives of World Trade Organisation. [4]
(b) Name any two steps taken by India to strengthen the food security. [2]
Answer:
(i) Objective of WTO are One of the objectives of WTO is to establish a rule based trading regime in which nations cannot place arbitrary restriction on trade.
(ii) WTO aims at enlarging production and trade of services to ensure optimum utilisation of world resources.

False

True

Introduction of citizen-centric food security programmes.
Introduction of innovative delivery mechanisms such as One Nation One Ration Card Scheme.

( Set III: 58/5/2)

False

Question 12.
Suppose only one Good ‘X’ is produced in the country. Output of ‘Good X’ during 2018 & 2019 were 100 units & 120 units respectively. The market price of the product during the two years was₹50 & ₹60 per unit respectively.
Calculate the percentage change in Real Gross Domestic Product (GDP) in year 2019, using 2018 as the base year. [3]
Answer:

Year	Units	Price per unit (₹)	Real GDP (₹) Units × Price Per Unit
2018	100	50	5,000
2019	120	60	6,000

True

Question 29.
(a) State with valid reason whether the following statement is true or false: [3]
‘Self employed workers are different from hired workers.’
Or
(b) Explain the importance of credit availability to farmers in rural development. [3]
Answer:
(a) Statement is true.
Self employed workers are those workers who are engaged in their own business or own profession For example, a farmer working on his own farm whereas hired workers are those workers who work for others. They render their services to others and in return for their services get paid in the form of wages or salaries, For example, a teacher working in a school.
Or
Credit is the lifeline of farming in the rural sector. It is important because:
(i) Growth of rural economy primarily depends on infusion of capital, regularly to realise higher productivity and production in agriculture and non-agricultural sector.
(ii) As the gestation period between crop sowing and realisation of income after production is quite long, farmers’ need for money (credit) increases to meet the initial investment on seeds, fertilizers, implements and some other family expenses like marriage, death, religious ceremonies etc.

(Set-III: 58/5/3)

False

Question 10.
If a linear consumption curve takes a parallel shift downwards, the value of investment multiplier will . [1]
(a) fall
(b) rise
(c) be doubled
(d) not change
Answer:
(b) rise

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