CBSE Class 12 Economics Practice Paper 2023 & Marking Scheme for Last Minute Revision, Download PDF

Section A

Q. No

Question

Marks

Q1

Read the following statements carefully:

Statement 1: Aggregate demand is the sum total of consumption and investment expenditures.

Statement 2: Total consumption consists of an autonomous component and an induced component.

Choose the correct option based on the above statements.

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

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Q2

“The World Bank has been extending loans to Country X on favourable terms for infrastructure, poverty alleviation, and rural development projects for four decades.”

Identify the reason for these loans to be listed as external assistance under the capital account of the Balance of Payments.

A. The loans have been taken from an entity outside the country.

B. The loans aim to improve the standard of living in the country.

C. The loans have crossed the three-decade period.

D. The loans can be paid off over a longer period.

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Q3

The Reserve Bank of India can increase the money supply in the economy by ____________. (Choose the correct alternative)

A. demonetisation of currency

B. buying government bonds

C. increasing the cash reserve ratio

D. persuading banks to discourage loans

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Q4

There are two statements given below, marked as Statement (1) and Statement (2). Read the statements and choose the correct option.

Statement (1): The Balance of Payments is a key economic indicator of a country’s economic well-being.

Statement (2): It is a summary of all economic transactions of a country and the rest of the world in a given financial year.

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

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Q5

Given below are some basic activities that occur in an economy. Identify the activity that would not help to study the economy in its totality?

A. government introducing policies

B. aggregate demand and supply of goods

C. determination of the consumer’s equilibrium

D. determination of equilibrium level of income and employment

OR

The total consumption and investment curves are given below:

Identify which of the following represents “Autonomous Consumption”.

A. OR

B. RC

C. RY

D. RI

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Q6

As the Marginal Propensity to Save (MPS) increases, the value of the investment multiplier ____________. (Choose the correct alternative)

A. increases

B. decreases

C. becomes zero

D. does not change

OR

What is the value of the investment multiplier, when the Marginal Propensity to Consume (MPC) is 0.1?

A. 10

B. 1.1

C. 0.01

D. 100

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Q7

Which of these do not fall under the purview of the Central Bank? P: controlling money supply

Q: providing loans to citizens

R: issuing currency

S: holding foreign exchange reserves

Alternatives: 

A. only S

B. only Q

C. Q and S

D. P and R

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Q8

The money exchanged in which of the following situations will not be considered as Invisible items under the Balance of Payments?

A. An Indian flying to the US for his medical treatment.

B. Oil India Limited (OIL) purchasing crude oil from Iraq.

C. The Indian diaspora remitting money to their families at home

D. Tata consultancy services (TCS) providing cloud consulting to African nations.

OR

Identify the situation that can be certainly deduced from a “capital and current account equilibrium”?

A. The current account deficit is financed by the selling of foreign exchanges.

B. There is an inverse relationship between the current and the capital account.

C. The capital account has to be equal to the current account to achieve equilibrium.

D. The country is running into an economic deficit and requires borrowing from foreign reserves.

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Q9

There are two statements given below, marked as Statement (1) and Statement (2). Read the statements and choose the correct option.

Statement (1) When aggregate supply is plotted as a 45°line graph, the economy is said to be at equilibrium.

Statement (2) The total amount spent on aggregate demand is equal to the total expenditure in the country.

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

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Q10

Choose the equation that represents the equilibrium condition in a two-sector economy.

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