ICSE Class 10 Economics Board Exam Question Paper 2022 with Solutions

ICSE Class 10 Economics Board Exam Question Paper with Solutions

SECTION A

Question 1.
Choose the correct answers to the questions from the given options. (Do not copy the question. Write the correct answer only.)

(i) The debt that does not yield income to the government is called as : [1 Mark]
(a) Productive
(b) Unproductive
(c) Lateral
(d) Standard

Answer: (b) Unproductive

An unproductive debt refers to loans raised by the government for war or consumption purposes which do not create any productive assets or yield any direct income.

Teacher's Note:
a) Remember that productive debt creates income-yielding assets like railways or power plants.
b) Unproductive debt is a financial burden as it has to be repaid from general tax revenues.

(ii) WPI stands for : [1 Mark]
(a) Wholesale Print Index
(b) Wholesale Point Index
(c) Wholesale Price Index
(d) Whole Point Index

Answer: (c) Wholesale Price Index

WPI measures the changes in the prices of goods sold in wholesale markets before they reach consumers.

Teacher's Note:
a) WPI is one of the key indices used to measure inflation in India.
b) Do not confuse WPI with CPI, which stands for Consumer Price Index.

(iii) Revenue expenditure is......in nature. [1 Mark]
(a) Non-recurring
(b) Recurring
(c) Simple
(d) Complex

Answer: (b) Recurring

Revenue expenditure is incurred regularly for the normal day-to-day functioning of the government and maintenance of government services.

Teacher's Note:
a) Recurring expenses happen repeatedly, like salary payments and administrative costs.
b) Capital expenditure, on the other hand, is non-recurring in nature as it creates long-term assets.

(iv) Income tax is an example of: [1 Mark]
(a) Direct tax
(b) Indirect tax
(c) Social tax
(d) Goods and service tax

Answer: (a) Direct tax

A direct tax is paid by the person on whom it is legally imposed, meaning the burden of the tax cannot be shifted to anyone else.

Teacher's Note:
a) Income tax and corporation tax are classic examples of direct taxes in India.
b) Indirect taxes like GST allow the incidence of tax to be shifted to the final consumer.

(v) When the rate of inflation is between 10% - 20% per annum then it is...........stage of inflation. [1 Mark]
(a) Running
(b) Hyper
(c) Creeping
(d) Slow

Answer: (a) Running

Running inflation occurs when prices rise rapidly at a double-digit rate, typically between 10% and 20% per annum.

Teacher's Note:
a) Creeping inflation is a slow rise in prices (less than 3% annually).
b) Hyperinflation involves extremely rapid price rises exceeding 50% or more per month.

(vi) The sum total of all debt is called as…………. [1 Mark]
(a) Redeemable debt
(b) Irredeemable debt
(c) Net debt
(d) Gross debt

Answer: (d) Gross debt

Gross public debt refers to the total amount of money that the government owes at any given time.

Teacher's Note:
a) Gross debt includes all internal and external borrowings of the government.
b) Net debt is calculated by subtracting the sinking fund and other financial reserves from gross debt.

(vii) The revenue derived by the government from public enterprises is also known as: [1 Mark]
(a) Commercial revenue
(b) Administrative revenue
(c) Socially desired tax
(d) Local tax

Answer: (a) Commercial revenue

Commercial revenue refers to the prices, fees, or profits earned by the government through the sale of goods and services produced by public sector enterprises.

Teacher's Note:
a) Examples include profits from railways, postal services, and public sector undertakings.
b) Administrative revenue is earned through official functions like court fees, license fees, and fines.

(viii) Bureau of Indian Standards (BIS) is a ....... of the government to protect the consumers from exploitation by retailers or producers. [1 Mark]
(a) Commercial measure
(b) Administrative measure
(c) Technical measure
(d) Welfare measure

Answer: (c) Technical measure

BIS certification acts as a technical standard and quality control measure to ensure goods meet prescribed safety and quality specifications.

Teacher's Note:
a) Technical measures involve quality standards and grading (like BIS, AGMARK, Hallmark).
b) These standards help consumers identify safe and standardized products.

(ix) The other name for demand deposit is ……………….. [1 Mark]
(a) Saving deposit
(b) Current deposit
(c) Posting account
(d) Time deposit

Answer: (b) Current deposit

Demand deposits can be withdrawn by the depositor on demand at any time without prior notice, which is a key characteristic of current account deposits.

Teacher's Note:
a) Demand deposits include both current account and savings account deposits withdrawable on demand.
b) Time deposits (such as fixed deposits) cannot be withdrawn before maturity without a penalty.

(x) ........is also called as the Lender of Last Resort. [1 Mark]
(a) Commercial bank
(b) Central bank
(c) Canara bank
(d) Federal hank

Answer: (b) Central bank

The central bank acts as the lender of last resort by providing emergency financial assistance to commercial banks facing acute liquidity shortages.

Teacher's Note:
a) This function prevents commercial bank failures and maintains stability in the banking system.
b) In India, the Reserve Bank of India (RBI) serves as the central bank and lender of last resort.

SECTION B

(Attempt any three questions from this Section.)

Question 2.

(i) Define the term public finance. [2 Marks]

Answer:
1. Public finance is a branch of economics that studies the income and expenditure of public authorities such as central, state, and local governments.
2. It examines how governments raise revenue through taxes, borrowings, and fees, and how public funds are allocated to various public services.

Teacher's Note:
a) Mention that public finance deals with financial activities of the government.
b) Key components include public revenue, public expenditure, public debt, and financial administration.

(ii) What does consumer awareness mean? [2 Marks]

Answer:
1. Consumer awareness refers to making a consumer conscious about their rights, duties, and safety regarding the goods and services they purchase.
2. It empowers consumers to make informed choices, avoid market exploitation, and seek legal redressal when cheated.

Teacher's Note:
a) An aware consumer checks for quality marks like ISI, AGMARK, or Hallmark.
b) It prevents fraudulent trade practices by retailers and producers.

(iii) Write three differences between commercial and central bank. [3 Marks]

Answer:

Teacher's Note:
a) Present differences in a tabular format with clear comparison points for clarity.
b) Emphasize that the central bank does not deal directly with the general public.

(iv) (a) What is food adulteration? [3 Marks]

Answer:
1. Food adulteration is the practice of adding inferior, harmful, or sub-standard substances to food items, or removing vital nutrients from them.
2. This makes food unsafe, impure, and hazardous for human consumption.

Teacher's Note:
a) Adulterants reduce the nutritional value of food and can cause serious health hazards.
b) Examples include mixing chicory in coffee or stones in pulses.

(iv) (b) Mention any two harmful effects of food adulteration. [3 Marks]

Answer:
1. Consumption of adulterated food causes severe health disorders such as food poisoning, stomach infections, liver damage, and chronic illnesses.
2. It can lead to nutritional deficiencies in children and vulnerable sections of society due to the removal of essential nutrients.

Teacher's Note:
a) State specific health issues to score full marks.
b) Mentioning long-term toxic effects demonstrates good conceptual understanding.

Question 3.

(i) Mention the two sources of public revenue. [2 Marks]

Answer:
1. Tax revenue: Taxes collected from individuals and corporations (e.g., income tax, GST).
2. Non-tax revenue: Income earned through administrative fees, fines, profits from public enterprises, and gifts or grants.

Teacher's Note:
a) Clearly distinguish between tax and non-tax sources.
b) Mention examples for each category to ensure completeness.

(ii) Explain the meaning of savings deposits. [2 Marks]

Answer:
1. Savings deposits are bank accounts maintained by individuals to encourage personal savings by offering a modest rate of interest.
2. These accounts have certain restrictions on the number and amount of withdrawals permitted within a given period.

Teacher's Note:
a) Explain that these are primarily meant for households and small savers.
b) Mention that they provide liquidity along with a small return on parked funds.

(iii) Discuss any three causes of cost push inflation. [3 Marks]

Answer:
1. Increase in wages: Sharp rises in wage rates demanded by trade unions increase the cost of production, leading firms to raise prices.
2. Increase in raw material prices: Rising prices of essential inputs like crude oil, steel, and power drive up production costs.
3. Indirect taxes: Imposition of heavy excise duties, customs duties, or sales taxes by the government increases the cost of final goods.

Teacher's Note:
a) Cost-push inflation happens when overall prices increase due to increases in the cost of wages and raw materials.
b) Supply-side bottlenecks are the primary driver of this type of inflation.

(iv) Explain any three duties of a consumer. [3 Marks]

Answer:
1. Asking for cash memos and receipts: Consumers must insist on obtaining a cash memo and warranty card for all purchases to serve as proof of transaction.
2. Checking quality marks: Consumers should check for standardization marks like ISI, AGMARK, and Hallmark before buying products.
3. Reading product labels: Consumers must carefully read instructions, manufacturing dates, expiry dates, and ingredient lists on product packaging.

Teacher's Note:
a) Duties complement consumer rights and ensure responsible purchasing behavior.
b) Possession of bills and warranty cards is mandatory for filing complaints in consumer courts.

Question 4.

(i) Mention any two examples of administrative revenue. [2 Marks]

Answer:
1. Fees: Payments made for specific government services, such as passport fees or court fees.
2. Fines and penalties: Monetary punishments imposed on lawbreakers for violating government rules and regulations.

Teacher's Note:
a) Administrative revenue arises from the regulatory functions of the government.
b) Other examples include license fees and escheats.

(ii) What does COPRA stand for? [2 Marks]

Answer:
1. COPRA stands for the Consumer Protection Act.
2. It was enacted in India in the year 1986 to provide simple, speedy, and inexpensive redressal to consumer grievances.

Teacher's Note:
a) Spell out the full form correctly without spelling errors.
b) Note that COPRA established a three-tier quasi-judicial machinery for consumer dispute resolution.

(iii) Why has the public expenditure increased in recent times? Give any three reasons. [3 Marks]

Answer:
1. Increase in defense expenditure: Modern defense modernization, advanced weaponry, and maintaining armed forces require massive government spending.
2. Population growth: Rapid population increase demands greater expenditure on public health, sanitation, education, and civic amenities.
3. Welfare state activities: Governments in modern welfare states spend heavily on poverty alleviation, social security, and subsidies for weaker sections.

Teacher's Note:
a) Public expenditure has shown an upward trend in developing countries like India.
b) Infrastructure development and debt servicing also contribute significantly to rising expenditures.

(iv) Explain any three rights of a consumer. [3 Marks]

Answer:
1. Right to Safety: The right to be protected against products, production processes, and services that are hazardous to health or life.
2. Right to be Informed: The right to be informed about the quality, quantity, potency, purity, standard, and price of goods to protect against unfair trade practices.
3. Right to Seek Redressal: The right to seek legal remedy against unfair trade practices, exploitation, or unscrupulous exploitation, including compensation for defective goods.

Teacher's Note:
a) Mention three distinct rights out of the six basic consumer rights defined under COPRA.
b) Providing clear definitions ensures full marks.

Question 5.

(i) Explain the term proportional tax. [2 Marks]

Answer:
1. A proportional tax is a tax where the rate of taxation remains constant regardless of the taxpayer's income level.
2. Both rich and poor taxpayers pay the exact same percentage of their income as tax.

Teacher's Note:
a) For example, if the tax rate is 10%, a person earning Rs. 10,000 pays Rs. 1,000 and a person earning Rs. 1,00,000 pays Rs. 10,000.
b) Contrast this with progressive taxes, where the tax rate increases as income increases.

(ii) What does food basket mean with reference to inflation? [2 Marks]

Answer:
1. A food basket refers to a representative collection of food items commonly consumed by a typical household, used to calculate food price inflation.
2. Changes in the aggregate cost of this fixed basket over time measure the impact of food inflation on the cost of living.

Teacher's Note:
a) It includes essential items like cereals, pulses, vegetables, milk, and cooking oil.
b) Monitoring the food basket helps policymakers gauge food security and price stability.

(iii) Explain any three ways how consumers are exploited by the retailers? [2 Marks]

Answer:
1. Under-weighing and under-measuring: Retailers often use manipulated weights and measures to give consumers less than the paid quantity.
2. Charging higher prices: Retailers sometimes charge prices higher than the Maximum Retail Price (MRP).
3. Selling adulterated goods: Mixing inferior or harmful substances in food grains and edible items to increase profit margins.

Teacher's Note:
a) State three clear methods of exploitation.
b) Mentioning sale of expired goods is also an accepted valid point.

(iv) (a) Define the term demand-pull inflation. [3 Marks]

Answer:
1. Demand-pull inflation occurs when aggregate demand for goods and services in an economy outpaces aggregate supply.
2. This excess demand bids up prices across the board, leading to general price inflation ("too much money chasing too few goods").

Teacher's Note:
a) Emphasize that demand exceeds supply.
b) It is typically caused by an increase in the money supply or government spending.

(iv) (b) Explain any two causes of demand-pull inflation. [3 Marks]

Answer:
1. Increase in money supply: Printing excess currency or expansionary monetary policies increase disposable incomes, driving up consumer demand.
2. Increase in government expenditure: Heavy public spending on infrastructure and social programs injects purchasing power into the economy, boosting aggregate demand.

Teacher's Note:
a) List two clear macroeconomic causes.
b) Population growth and rising exports can also fuel demand-pull inflation.

Question 6.

(i) Explain the term consumer price index. [2 Marks]

Answer:
1. The Consumer Price Index (CPI) is an index that measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
2. It is widely used as a primary indicator to measure retail inflation and changes in the cost of living.

Teacher's Note:
a) CPI reflects price changes experienced directly by households.
b) It differs from WPI, which measures wholesale prices.

(ii) What is the impact of inflation on wages and salaried class people? [2 Marks]

Answer:
1. Inflation adversely affects wages and salaried class people because their incomes are generally fixed in the short term.
2. As prices of goods and services rise, their purchasing power declines, leading to a fall in their standard of living.

Teacher's Note:
a) Salaried individuals and wage earners suffer most during inflation because wages do not rise as fast as prices.
b) Mentioning the reduction in real income is crucial for full marks.

(iii) Give any three points of difference between direct and indirect tax. [3 Marks]

Answer:

Teacher's Note:
a) Present the differences cleanly in tabular form.
b) Use correct economic terminology such as "incidence" and "impact".

(iv) (a) Define inflation. [3 Marks]

Answer:
1. Inflation is defined as a sustained, persistent, and appreciable rise in the general price level of goods and services in an economy over a period of time.
2. It results in a corresponding decrease in the purchasing power of money.

Teacher's Note:
a) Emphasize that inflation is a persistent rise, not a one-time price spike.
b) Note that when prices rise, the value of money falls.

(iv) (b) What does creeping inflation mean? [3 Marks]

Answer:
1. Creeping inflation refers to a mild and slow rate of price rise, typically below 3% per annum.
2. It is considered beneficial and harmless for economic growth as it provides a mild incentive to producers without eroding consumer purchasing power severely.

Teacher's Note:
a) Specify the percentage threshold (usually 1% to 3% annually).
b) Highlight that moderate price increases stimulate investment and output.