CBSE Class 12 Economics Important Questions 2027 (Repeated in Board Exams)

In a two sector economy, the flow of factor payments moves from ______ to ______. (A) firms, households (B) firms, government (C) banks, households (D) households, firms

Read the following statements carefully. Statement 1: Final goods are those goods which normally lose their identity in the production process. Statement 2: Final goods may get transformed during the consumption process by a consumer. Choose the correct option: (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.

For a hypothetical economy, assuming there are only two firms (X and Y) with equal values of Gross Value Added (GVA). On the basis of the following data, estimate the value of Domestic Sales of both the firms (X and Y): (i) Value of Output of firm Y 700, (ii) Purchases by firm X from firm Y 200, (iii) Exports by firm X 100, (iv) Purchases by firm Y from firm X 150, (v) Additions to Stock of firm X 50. (Amount in `crore)

Ms. Reeta D'Costa, retired from the post of Income Tax Commissioner in the year 2023. Apart from her pension, she also receives the following from various sources: Rental income from a flat she owns; Interest income from her fixed deposits; Money sent by her children settled abroad. Identify and classify her monthly incomes into 'factor income' and 'transfer income', with valid reasons.

"Real Gross Domestic Product (GDP) is estimated to attain a level of `173.82 lakh crore in the year 2023-24. The corresponding Nominal GDP is estimated to stand at `295.36 lakh crore in the same year." On the basis of the given data, the value of GDP deflator would be ______. A. 295.36 B. 58.85 C. 169.92 D. 173.82

On the basis of the given data, estimate the value of Domestic Income (NDP_FC): (i) Household Consumption Expenditure 800, (ii) Gross Business Fixed Capital Formation 150, (iii) Gross Residential Construction Investment 120, (iv) Government Final Consumption Expenditure 170, (v) Excess of Imports over Exports 20, (vi) Inventory Investment 140, (vii) Gross Public Investment 500, (viii) Net Indirect Taxes 70, (ix) Net Factor Income From Abroad (-)50, (x) Consumption of Fixed Capital 40. (Amounts in `crore)

To arrive at the value of Gross Value Added at Market Price (GVA_MP) ______ must be added to Gross Value Added (GVA) at Basic Prices. (A) Product Taxes (B) Net Product Taxes (C) Production Taxes (D) Net Production Taxes

Meera and Shahid are two classmates comparing India's economic growth over the years. Meera referred to the increase in Gross Domestic Product (GDP) at current prices prevailing in market, while Sahid insisted on considering GDP after adjusting for inflation. Their debate on which of the two measures gives a true picture of people's well-being remained inconclusive. Considering the above situation, elaborate with valid reason, which of the two variables is considered a better indicator of welfare and why?

Distinguish between Stock and flow variables, using suitable examples.

Calculate the value of Net Value Added at Factor Cost (NVA_FC): (i) Operating Surplus 3,740, (ii) Increase in unsold stock 600, (iii) Sales 10,625, (iv) Purchase of raw materials 2,625, (v) Consumption of fixed capital 500, (vi) Subsidies 400, (vii) Indirect taxes 1,200. (Amounts in `crore)

Elaborate the concept of Externalities with the help of suitable example.

Distinguish between 'Value Addition' and 'Final Value of Output'.

"Under the provisions stated in the Section 20 and Section 21 of the Reserve Bank of India (RBI) Act, 1934, the RBI is mandated to handle the banking operations of the Government of India." In the light of the given statement, elaborate the indicated function of the Reserve Bank of India.

"In the Indian Banking System, the Statutory Liquidity Ratio (SLR) plays a vital role in controlling the credit creation capacity of the Commercial Banks, as it ______." (A) ensures that all the deposits are converted into liquid assets. (B) requires banks to maintain a percentage of deposits in the form of liquid assets. (C) sets the maximum interest rate which the banks can charge on loans. (D) promote banks from lending beyond a specific proportion of their total reserves.

Read the following statements: Assertion (A): Money is of perishable nature and is generally accepted by all at any point of time. Reason (R): Money serves as a store of value, facilitating individuals to transfer purchasing power from the present to the future. Choose the correct option: (A) Both A and R are true, and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

In an economy, the currency held by the public, Net Demand Deposits with Commercial Banks and Net Time Deposits with Commercial Banks stand at `1,42,000 crore, `22,000 crore and `86,000 crore respectively. The value of Money Supply (M1) would be `______ crore. (A) 2,50,000 (B) 86,000 (C) 1,64,000 (D) 1,42,000

Suppose in an economy, primary deposits are `500, if the Reserve Ratio is 25%. Estimate the total deposits created and the total lending by the banking system.

"Irfaan (a student) borrows `80,000 to finance his college fee. He plans to begin repaying the loan six months after his graduation, making payments over a span of ten years." Based on above text, identify the indicated function of money. (A) Medium of Exchange (B) Unit of Account (C) Standard of Deferred Payments (D) Store of Value

(Based on the RBI rate-setting text above) Discuss the likely consequence on money supply if the rate setting panel would have decreased the said rate.

Suppose in an economy, the Marginal Propensity to Consume (MPC) is 0.8. The government introduced an investment project of `1,000 crore which led to a manifold increase in National Income (Y) and Consumption Expenditure (C). Estimate: (a) Value of Investment Multiplier (k). (b) Missing Values of (i) and (ii). Table (Rounds, ΔI, ΔY, ΔC, ΔS): Round I: ΔI 1,000, ΔY 1,000, ΔC 800, ΔS 200; Round II: ΔY 800, ΔC 640, ΔS 160; ...; Total: ΔY ..(i).., ΔC ..(ii).., ΔS 1,000.

[Question for Visually Impaired Candidates only, in lieu of Q. No. 15] State and explain any two measures that can be taken by the Central Bank to control the situation of deficient demand.

In an economy; C = 200 + 0.75Y (where C is consumption expenditure and Y is National Income). Investment expenditure is `4,000 Crore. Calculate: (i) Equilibrium level of income. (ii) Total consumption expenditure at equilibrium income level.

In an economy, when ______ is insufficient to achieve the level of output corresponding to the full employment, the difference is termed a deflationary gap. (A) ex-ante Aggregate Demand (B) ex-post Aggregate Demand (C) ex-ante Aggregate Supply (D) ex-post Aggregate Supply

Identify, which of the following is true at the Break Even level of Income. (A) Slope of Consumption Curve = Slope of Saving Curve (B) Average Propensity to Consume (APC) = Average Propensity to Save (APS) (C) Slope of Saving Curve = Unity (1) (D) Average Propensity to Consume (APC) = Unity (1)

Refer the given image carefully (a balance scale showing 'Value of Money' falling on one side and 'General Price level' rising on the other). Explain any two measures that can be taken by the Central Bank to control the indicated macroeconomic problem (inflation / excess demand).

Define Effective Demand. Explain the adjustment mechanism to attain the level of Effective Demand, if ex-ante Aggregate Demand is more than ex-ante Aggregate Supply.

Suppose, the saving curve of an economy makes an intercept at a negative value of `50 crores. In the economy, 20% of an increase in income is saved. In the light of above context, identify the value of investment multiplier (K). (A) 2 (B) 5 (C) 10 (D) ∞ (infinite)

"Sum of the Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one." Justify the given statement with the help of a suitable argument.

Read the following statements carefully. Statement 1: The maximum value of Marginal Propensity to Consume (MPC) can be unity. Statement 2: As the income of an economy increases, the proportionate increase in the level of consumption is always more than the increase in the level of income. Choose the correct option: (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.

Explain the adjustment mechanism in case ex-ante savings are greater than ex-ante investments.

Read the following statements - Assertion (A) and Reason (R). Assertion (A): Full employment situation refers to absence of involuntary unemployment. Reason (R): Under full employment situation, all the willing and able bodied people get employment at the prevailing wage rate. Choose the correct alternative: (A) Both A and R are true and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

Classify the following as Revenue receipts or Capital receipts. Give valid arguments in support of your answer: Interest received on loan.

Read the following text: According to the Economic Survey 2024-25, the government budget's projections for the fiscal year 2025-26 indicate that gross direct tax revenue will rise by 12.7%, while gross indirect tax collections are expected to grow by 8.3% relative to FY 2024-25. Direct taxes include income tax and corporate tax, reflecting earnings and profits of households and firms, and play a key role in revenue growth. Indirect taxes encompass Goods and Services Tax (GST), custom duties and other transaction-based levies. Higher growth projected for direct taxes suggests a push to enhance tax buoyancy through improved compliance and reforms; indirect taxes are expected to benefit from consumption trends and GST administration improvements. The balanced tax strategy aims to mobilise resources while supporting fiscal consolidation and sustainable economic growth. Differentiate between the two types of taxes indicated in the above text, with suitable examples.

"Under the Ayushmaan Bharat Scheme, the government provides free medical treatment to the poorer section of the society." Identify and explain the nature of budget expenditure and its objective, indicated in the given statement.

As per the data presented in the Union Budget 2023-24, the total receipts of the government other than borrowings and the total expenditure are estimated at `27.2 lakh crore and `45 lakh crore respectively. The value of the ______ deficit would be `17.8 lakh crore. (A) revenue (B) fiscal (C) budgetary (D) primary

Distinguish between 'fiscal deficit' and 'revenue deficit'.

[Question for Visually Impaired Candidates only, in lieu of Q. No. 16 b(i)] Explain the stabilisation function of the Government Budget.

If a country exports goods worth of `600 crores and imports goods worth of `450 crores, the value of Balance of Trade of the country would be ______ of `______ crores. (A) deficit, 150 (B) surplus, 150 (C) deficit, 1,050 (D) surplus, 1,050

'Foreign Portfolio Investment (FPI) witnessed a sharp turnaround during 2023-24 with net FPI inflows of US$ 32.4 billion.' In which sub-account and on which side of the Balance of Payments account the above transaction will be recorded? Give reasons in support of your answer.

Read the following statements carefully. Statement 1: Depreciation of currency is an economic action undertaken by the government of a nation under the fixed exchange rate system. Statement 2: Under the floating exchange Rate system, authorities actively intervene in the foreign exchange market by way of maintaining foreign exchange reserves. In the light of the given statements, choose the correct option: (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.

Read the following statements: Assertion (A): Unilateral Transfers are recorded in the Current Account of the Balance of Payments (BoP) of a nation. Reason (R): Capital account records transactions which cause a change in the assets or liabilities of the country. Choose the correct option: (A) Both A and R are true, and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

Michel, an entrepreneur of Country Zeta, borrowed $5 million from an overseas bank to expand his textile business. During the same financial year, the Government of Country Zeta secured a loan of $30 Billion from an International Financial Institution to manage the ongoing Balance of Payments. Samuel, an Economics student categorised both of these transactions as 'autonomous transactions' in the BoP account of the country. Do you agree with his classification? Justify your answer with valid reasons.

Surplus in Balance of Payments (BOP) refers to the excess of ______. (A) Autonomous payments over Autonomous receipts (B) Current Account payments over Autonomous receipts (C) Capital Account receipts over Capital Account payments (D) Autonomous receipts over Autonomous payments

Read the following statements carefully. Statement 1: During the British rule in India, the export surplus was utilised to import of invisible items from Britain. Statement 2: Indians paid for the expenses incurred by an office set up by the colonial government in Britain. In the light of above statements, choose the correct option: (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.

"In the post-independence era, India adopted a protective tariff policy." Do you agree with the given statement? Justify your answer with any two valid arguments.

'Under the Industrial Policy Resolution (IPR) 1956 in India, the system of industrial licensing was introduced to promote regional equality.' Justify the given statement with valid arguments.

Describe briefly a rationale behind choosing 'Self-reliance' as a planning objective for the Indian economy.

"The British sought to achieve their vested interest through their policies of infrastructural development in India." Do you agree with the given statement? Justify your answer with valid explanation.

State and explain any two changes which were observed in India's occupational structure during the British Rule.

Read the following text: "In the recent times, the Government of India, has introduced several measures to encourage greater public participation in the capital market, including both primary and secondary stock markets." Under which sector have the above mentioned reforms been introduced? (A) Industrial (B) Financial (C) Taxation (D) Foreign Trade

Discuss briefly, how bilateral trade agreements are different from multilateral trade agreements?

'Strategic sale of a public sector undertaking and minority sale of their shares are methods of disinvestment.' Defend or refute the given statement with valid argument.

Mr. Ravi, an IT entrepreneur from Bengaluru, observed that several MNC's prefer India as their outsourcing Hub for services like software development, customer support, data management etc. His friend Priya believes this is due to certain inherent advantages of the Indian economy. In your opinion, state and explain any two factors that make India a preferred outsourcing destination.

Read the following statements: Assertion (A): Human capital formation increases the rate of participation of population to economic activities and leads to economic growth. Reason (R): Rate of participation of people refers to the percentage of people engaged in production process of a country. Choose the correct option: (A) Both A and R are true and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

Read the following statements: Assertion (A): Education facilitates the assimilation of knowledge and competencies. It also fosters inventive capacities and enhances the aptitude to integrate advance technology. Reason (R): Education plays a pivotal role in transforming cognitive perspectives and serves as a catalyst for the economic advancement of a nation. Choose the correct option: (A) Both A and R are true, and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

Read the following text: To ensure inclusive and quality education for all, the Indian government has launched several important schemes aimed at improving access, equity and learning outcomes, especially among disadvantaged group. The Right to Education (RTE) Act, passed by the India Parliament on August 4, 2009, guarantees free and compulsory education to every child between 6-14 years of age, ensuring all children have access to education in neighbourhood schools until they complete elementary education. Another key initiative is Sarva Siksha Abhiyan (SSA), introduced in 2001, one of India's flagship programmes for Universalisation of Elementary Education. Digital India Campaign, launched on July 1, 2015, focuses on transforming India into a digitally empowered society by improving mobile and internet connectivity, particularly in rural and remote regions, supporting digital learning and access to educational resources. Identify, which law guarantees free and compulsory education upto the age of 14 years. Explain, how does it help in enhancing access to education.

(Based on the education-schemes text above) In your opinion, how the increase in public spending on education contributed to India's social and economic transformation? Support your answer with valid arguments.

"In India, National Education Policy 2020 has stressed a lot on in-service training of the teachers." Identify the source of Human Capital Formation (HCF) indicated in the aforesaid statement.

Read the following statements: Assertion (A): The Government of India adopted the measure of regulation of markets to improve marketing conditions for agricultural products. Reason (R): Regulation of market ensured transparent pricing, fair trade practices, and protection for farmers against exploitation in agricultural marketing. Choose the correct option: (A) Both A and R are true, and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

State any two examples of allied activities.

Distinguish between self-employed and hired workers with the help of a suitable example.

State the meaning of 'Disguised Unemployment'.

Identify, which of the following, highlights a highly relevant issue associated with evolving employment trends in India's labour market? (A) Progressive increase in the share of permanent salaried employees. (B) Increase in the proportion of casually employed individuals. (C) Expansion of self-employment avenues in all regions. (D) Significant rise in job opportunities within the formal sector.

"Assuming in a hypothetical economy, Real Gross Domestic Product recorded a growth rate of 9% during a fiscal year. However, the economy faced a significant challenge in terms of creating an adequate number of employment opportunities." Identify the situation indicated in the given statement: A. Casualisation of workforce B. Informalisation of workforce C. Formalisation of workforce D. Jobless growth

[Question for Visually Impaired Candidates only, in lieu of Q. No. 32 (B)] Elaborate any two reasons behind more women employed in economic activities in Rural areas as compared to Urban areas.

"Sustainable development refers to the development that meets the need of the present generation without compromising the ability of the future generations, to meet their own needs." The above mentioned definition has been given by ______. (A) United Nations Conference on Environment and Development (B) United Nations Committee on Environment and Development (C) United Nations Committee on Protection of Environment (D) United Nations Conference on Protection of Environment

The population explosion and advent of Industrial Revolution led to the ______. A. reversal of supply-demand relationship of environmental resources B. decrease in demand for environmental resources C. decrease in the average temperature of the earth's lower atmosphere D. increase in the environmental quality

[Question for visually impaired candidates only, in lieu of Q. No. 19] Identify, which of the following is NOT one of the strategies for Sustainable Development. (A) Use of non-conventional sources of energy (B) Use of fossil fuel for transportation (C) Use of traditional knowledge (D) Use of organic compost manure

______ was setup in 1974 by the Indian government to address two major environmental concerns viz. water and air pollution. A. State Pollution Control Board B. Central Pollution Control Board C. Brundtland Commission D. Montreal Protocol

"Bio-pesticides help to reduce the ill-impacts of green revolution on soil and water bodies while promoting sustainable development." Justify the given statement with valid explanation.

"In the late 1970's China's population growth rate has sharply declined as compared to India." Elucidate the reasons and impacts of this situation.

"Pakistan was maintaining a healthy economic growth momentum of 6.3% till 1990s, however it lost its track of economic growth falling to 5.3% between 2015-17." Do you agree with the given statement? Justify your answer with valid arguments.

'The reform process implemented in the late 1970s, commonly known as China's open door policy, encompassed a wide range of reforms across sectors like agriculture, investment, industry etc. These reforms played a pivotal role in driving the rapid growth of the Chinese economy over subsequent decades.' In the light of the given text, discuss any two reforms responsible for the rapid economic growth of China.

Read the following statements: Assertion (A): Prior to economic reforms, public investment in social infrastructure by China resulted in better Human Development Indicators (HDI). Reason (R): China is ahead of India and Pakistan on many Human Development Indicators (HDI). Choose the correct option: (A) Both A and R are true and R is the correct explanation of A. (B) Both A and R are true, but R is not the correct explanation of A. (C) A is true, but R is false. (D) A is false, but R is true.

______ sector was the primary focus of the Great Leap Forward in China. (A) Tax (B) Industrial (C) Financial (D) Educational