CBSE Class 12 Economics Sample Paper 2023

SECTION-A

SECTION A – MACRO ECONOMICS MARKS

1 Read the following statements carefully:
Statement 1: The consumption curve is an upward sloping straight line curve due to the direct relationship between income and consumption and the assumption of constant Marginal Propensity to Consume.
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other.
In the light of the given statements, choose the correct alternative from the following:
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 : C

2 ‘Owing to the Russia-Ukraine crisis, the world is experiencing rising crude prices due to supply-side issues.’
Identify the most likely impact on the Balance of Payment situation of the Indian economy from the following:
a) Production of cars in India will rise.
b) Production and sale of cycles in India will rise.
c) Inflow of US Dollars in India will rise.
d) Outflow of US Dollars from India will rise.

Answer : D

3 _________ is an institution that accept deposits for lending purposes.
(Fill up the blank with correct alternative)
a) Commercial Banks
b) Life Insurance Corporation
c) Reserve Bank of India
d) Government of India

Answer : A

4 Read the following statements carefully:
Statement 1: Export of financial services by India will be recorded on credit side of current account.
Statement2: Foreign Direct Investments in India will be recorded on credit side of capital account.
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 : C

5 Read the following statements carefully:
Statement 1 - Net investment is a stock concept.
Statement 2 - Capital is a flow concept.
In the light of the given statements, choose the correct alternative from the following:
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

OR

Read the following figure carefully and choose the correct pair from the alternatives given below: 

Alternatives:
a) Output, Production
b) Value added, Production
c) Output, Disposition
d) Wealth, Development

Answer : C

6 If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is ₹ 30 Crore, the relevant consumption function would be :
a) C=30+0.75 Y
b) C=(-)30+0.25Y
c) C=30-0.75Y
d) C=30-0.25Y

Answer : A

OR

If increase in National Income is equal to increase in consumption, identity the value of Marginal Propensity to Save :
a) Equal to unity
b) Greater than one
c) Less than one
d) Equal to zero

Answer : D

7 Money supply in India may increase if, ________________(Choose the correct alternative)
1. Reserve Bank of India(RBI) injects more money in circulation
2. the commercial banks expand their credit operation
3. tax rates are reduced by the Central Government
4. Reserve Bank of India increases the Bank Rate
Alternatives:
a) 1,2 and 3 are correct
b) 2,3 and 4 are correct
c) 1,3 and 4 are correct
d) 1,2 and 4 are correct

Answer : A

8 Suppose, following data is presented, for an imaginary economy: (all figures in ₹ ‘000 Crore)

Year     Visible Exports     Visible Imports
2010         280                     240
2020         580                     460
Identify, which of the statement about the period 2010 to 2020 is correct?
a) Improvement in balance of trade
b) Increase in trade deficit
c) Improvement in balance in invisibles items
d) Deterioration of balance of trade

Answer : A

OR

The following information is given for an imaginary country: (Image)

Balance on current account will be ____________ of ₹ ______ thousand Crore.
a) deficit, 10
b) surplus,5
c) deficit, 5
d) surplus, 10

Answer : B

9 Read the following statement -Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Ex-post Investments represent planned Investments; whereas ex-ante Investments represent actual level of investments.
Reason (R): At equilibrium level, Ex-ante Savings and Ex-ante Investments are always equal.
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 and 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 : D

10 Read the following statement -Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
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 and 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 : B