Economics Term 1 2021-2022 Commerce (English Medium) Class 12 Question Paper Solution

'Free distribution of LPG connection to poor people is a sign of social justice.'

Identify the 'Objective of Government Budget' from the above mentioned statement.

Promote Economics Growth

Management of public enterprises

Create equitable distribution of income

Create fluctuation in revenue of the government

Exports and Imports of which of the following items will be component of 'Balance of Trade'?

Banking

Shipping

Merchandise

Insurance

In the context of commercial bank, which of the following alternative is correct?

1. Deposits are liabilities of banks.
2. Commercial banks are creator of money.
3. Commercial banks accept deposits of the general public.
4. Accept deposits of World Bank for Agriculture and Rural developments.

(i) and (ii)

(ii) and (iii)

(i), (ii) and (iii)

(i) and (iv)

Find the odd one out among the following, with respect to the 'Balance of Payments' in india.

Investments by Indian Investors under the Make in india Programme.

Loan received from Australia.

Investments from abroad.

Purchase of machinery from aboard.

Statement 1: Demonetisation was an initiative taken by the Government of India to curb black money, terrorism and circulation of fake currency.

Statement 2: Demonetisation has lead people to shift from cash payments to electronic payments.

Both the statement are true.

Both the statements are false.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

The total stock of money in circulation among the public ______ is called as 'money supply'.

during a period of time

during a calendar year

during a fiscal year

at a particular point of time

All currencies other than the domestic currency of a country are called as ______.

1. Foreign exchange rate
2. Foreign exchange
3. Foreign aid

Identify the correct alternative from the following.

(i) and (ii)

(i) and (iii)

(i), (ii) and (ill)

(ii) only

Statement 1: Government Budget is a detailed economic statement presented by Finance Minister.

Statement 2: Government Budget consists of financial programmes and policies of the government for the next year.

Both the Statement are true.

Both the Statement are false.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

From the following statements, choose the correct statement:

Trade deficit refers to the excess of 'total value of exports' over the 'total value of imports' of goods and services.

Trade surplus refers to the excess of 'total value of import' over the 'total value of exports' of goods and services.

Current account deficit in a nation occurs when the foreign exchange receipts in current account fall short of foreign exchange payments in current account.

Current account surplus in nation occurs when the credit items of Balance of Payments are less than the debit items of Balance of Payments.

From the following functions of the Central Bank, identify the odd one out:

A

B

C

D

Which of the following statement is correct with reference to the mixed economy system in India?

Predominance of free market economics system over the government regulated economy.

Absence of economic planning.

Ownership of factors of production only to private sector.

Co-existence of public and private sector.

Statement 1: Zamindari was introduced by the British, to ensure proper control over the revenue system in India.

Statement 2: Zamindari were given full freedom to collect and keep the rent collected by them.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Both statements are true.

Both statements are false.

______ was the objective of Import Substitution policy in India.

Production of high quality products

Protection of domestic industries from foreign competition

Promote imports

Promote privatisation

Statement 1: The official data on poverty in India is issued by NITI Aayog.

Statement 2: Since independence the number of poor people in India has declined.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Both statement are true.

Both statement are false.

Statement 1: Economic Reforms of 1991 paved the way for the liberalisation of Indian Economy.

Statement 2: Economic Reforms of 1991 relaxed the restrictions imposed by the government on private sector.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Both statement are true.

Both statement are false.

From the following statements regarding Goods and Services Tax (GST), identify the incorrect statement:

It ensures uniformity of tax rates across all states.

It ensures better tax compliance and tax collection.

All types of direct and indirect taxes have been subsumed by it.

It's imposed on the supply of goods and services.

From the following, which of the item would appear on the credit side of capital account of the balance of payment in India?

Education consultation from a firm in New York.

Borrowings from rest of the world.

Earthquake relief aid received from France.

Imports of edible oils.

Identify which of the following statement is not correct with reference to Self Help Groups?

Group members in need of funds can borrow at nominal rate of interest.

Borrowings in micro-credit system are mainly taken of consumption purposes.

Micro-credit system has helped men in rural areas to become self-dependent.

Formal credit system has failed to provide credit to the needy people in the rural areas.

Statement 1: Recovery of loans is a non-debt creating capital receipt.

Statement 2: Recovery of loans cause a reduction in assets of the government.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Both the statements are true.

Both the statements are false.

Which one of following features are identified for the 'Urban poor'?

1. Lack of income generating assets
2. Limited skills availability
3. Lack of job security
4. Lack of job opportunities

(i) and (ii)

(i), (ii) and (iii)

(i), (ii) (iii) and (iv)

(i) (iii) and (iv)

Which of the following is correct with reference of Ministry of Finance?

It issues coins only

It issues all type of currency notes

It issues one rupee note and coins

It issues only rupee note

On the eve of Independence, India's demographic condition was characterised by which of the following statement?

Low level of literacy, low mortality rates and high life expectancy.

High level of literacy, high mortality rates and low life expectancy.

Low level of literacy, high mortality rates and high life expectancy.

Low level of literacy, high mortality rates and low life expectancy.

'In India, agricultural subsidies have always been a topic of debate among the economic thinkers'.

Identify, which of the following statement is not an argument in favour of continuation of the agricultural subsidies in India.

Subsidies encourage farmers to adopt newer technologies.

Subsidies help farmers to face the uncertainties of future.

Subsidies aim to reduce the inequalities between rich and poor farmer.

Subsidies mainly benefits the fertilizer industry among farmers.

Identify the correct statement from the following:

India developed sound industrial base under the colonial rule.

India had very developed capital goods industries structure on the eve of independence.

Under the colonial rule, India generated export surplus.

The real motive of development of infrastructure under the british rule was to ensure development of India.

Consider the following statement about 'Portfolio Investment in India' and choose the correct alternative:

1. Investments by a foreign company to start its subsidiary company in india.
2. Investments by a foreign company to acquire some company in India.
3. A foreign investor buying shares in Indian markets.
4. A foreign investor buying Goods in Indian markets.

(i), (ii) and (iii)

(ii), (iii) and (iv)

(iii) only

(iii) and (iv)

Statement 1: Reserve Bank of India keeps a certain percentage of deposits as reserve to avoid 'too much lending to public'.

Statement 2: The reserve deposits ratio acts as a deterrence to the amount of credit created by the commercial banks.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Both the statement are true.

Both the statement are false.

Which of the following is not a valid statement in the context of Industrial policy Resolution (IPR) 1956?

Ownership and management of the core industries were given to the public sector

Tax benefits were given to industries being established in backward region to promote regional equalities.

A few industries were allowed to be owned by the private sector.

Goods produced by the small scale industries were deserved.

Assertion (A): After independence there was an expansion, in farm and non-farm output, income and employment.

Reason (R): Rural banking has helped farmers to avail benefits of credits facilities for meeting their needs.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true and Reason (R) is false.

Assertion (A) is false and Reason (R) is true.

Identify the incorrect statement from the following:

Human capital represents enhanced labour productivity.

Investment in human capital enhances efficiency and skills, implying economic growth.

Human capital is separable from its owner.

Human capital treats human beings as a means to an end.

Assertion (A): Urban poverty is considered as a spill over of the rural poverty.

Reason (R): Rural poor migrate to cities in search of employment and livelihood.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true and Reason (R) is false.

Assertive (A) is false and Reason (R) is true.

Read the following statements carefully and identify the false statement with respect to the Pradhan Mantri Jan Ohan Yojana.

It promotes habit of saving among masses.

Government uses it for direct benefit transfers under various schemes.

Each account holder is entitled to ₹ 5,00,000 accidental insurance and ₹ 3,00,000 life insurance.

It ensures financial inclusion of every account holder.

Which of the following statements is not false?

Higher education takes a major share of the total educational expenditure in India.

No education cess has been imposed by the government of India.

Educational achievements in a country are indicated in terms of about literacy level only.

Expenditure per student at tertiary level is higher than that of elementary level of education.

Structural composition refers to the ______.

number of people engaged in training

number of people engaged in different sectors

number of people engaged in tertiary sector

number of people facing unemployment

Statement 1: Modernisation refers to the use of new technology only.

Statement 2: To enhance the productivity in an economy, women must be given equal opportunities at work place.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Both the statements are true.

Both the statements are false.

Identify the incorrect statement from the following.

Diversification into other sector is essential to enable rural people to overcome poverty.

Diversification is an essential component because there is greater link in depending exclusively on farming for livelihood.

Diversification provides supplementary gainful employment.

Diversification activities are not beneficial.

Suppose money created by the banking system is ₹ 1,000 and the primary deposits is ₹ 250. The respective values of deposit multiplier and reserve ratio would be ______ and ______.

4, 25%

8, 12.5%

4, 12.5%

5, 20%

Identify the incorrect statement with reference to Balance of Payments.

Current account records Exports and Imports transactions of a nation.

Export of machinery is recorded in capital account.

Transfer of funds to the relatives abroad, entered on debit side of current account.

Current account records all such transactions which do not impact asset or liability status of a country.

Assertion (A): In developing countries, growth of human capital has been faster than the growth is rather nebulous.

Reason (R): Empirical evidence to prove that increase in human capital causes economic growth is rather nebulous.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true but Reason (R) is false.

Assertion (A) is true but Reason (R) is true.

A process that involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country is known as ______.

Agriculture Diversification

Agriculture Banking

Agriculture Management

Agriculture Marketing

'If India has to make real progress it has to develop its rural areas'

Which of the following is incorrect reason for the above mentioned statement?

Approximately one-third population of rural India still lives in abject poverty.

More than 50 percent India's population depends on agriculture for their livelihood.

Growth rate in Indian agriculture sector has been quite lower than of other sector.

Majority of rural people have access to the basic necessities of life.

Assertion (A): Notes and Coins are the only source of money supply in the economy.

Reason (R): Demand deposits with commercial bank is also a component of money supply.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true but Reason (R) is false.

Assertion (A) is false but Reason (R) is true.

Programme(s) that improves the food and nutritional status of poor are ______.

1. Mid-day meal scheme
2. Public distribution system
3. Integrated child development scheme
4. National family benefits scheme

(i), (ii), (iii) and (iv)

(i), (ii) and (iii)

(ii), (iii) and (iv)

(i) only

Number of times the commercial banks are able to create total deposits with the help of reserves ratio and initial deposits is known as ______.

Investment multiplier

Money multiplier

Domestication

Rationalisation

If Balance of Trade of nation shows deficit of ₹ 300 crore. The value of Exports are ₹ 400 crores and transfer payments are ₹ 50 crore. ₹ ______ crore will be the value of imports.

1700

1500

300

700

Statement 1: Unemployment and Poverty are directly related.

Statement 2: Unemployment refers to a situation when some one, who is able and willing to work, does not find work at prevailing wage rate; this may result into poverty of the masses.

Both the statements are true.

Both the statements are false.

Statement 1 is true and statement 2 is false.

Statement 2 is true and statement 1 is false.

Assertion (A): Managed floating exchange rate system is also known as 'hybrid system'.

Reason (R): Managed floating exchange rate system is a combination of a flexible and fixed exchange rate system.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true but Reason (R) is false.

Assertion (A) is false but Reason (R) is true.

From the following, identify the incorrect statement in the light of India's pre- independence occupational structure:

Agricultural sector accounted for the largest share of workforce.

Industrial and Service sectors grew at a faster rate than the agriculture sector.

Agriculture sector was marked with disguised unemployment.

Unbalanced growth was created due to unequal distribution of workforce.

Identify the organisation, which is functioning as an apex organisation to provide quality school education.

University Grants Commission

Indian Council for Medical Research

All India Council of Technical Education

National Council of Educational Research and Training

Identify the value of fiscal deficit:

6.09

7.96

3.85

4.12

If primary deficit is 0.88, the value of interest payment would be ______.

7.96

7.08

4.12

3.85

Revenue deficit in the government budget is ______.

Fiscal deficit + Interest Payments

Total Expenditure − Total Receipts

Total Receipts − Total Expenditure

Revenue Expenditure − Revenue Receipts

Which of the following is a non-tax receipts?

Gift Tax

Sales Tax

Dividend

Excise duty

Expenditure on old-age pensions is an example of ______ expenditure.

capital

revenue

debt creating

asset creation

______ is/are debt creating capital receipts for the Government.

Recovery of loans from State governments

Sale of Public Sector Undertakings

Borrowings from World Bank

Partial sale of government shares in a company

Assertion (A): Globalization has resulted in higher inflows of foreign exchange in the Indian economy.

Reason (R): Globalization implies integration of domestic economy with rest of the world through trade and capital flow.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true but Reason (R) is false.

Assertion (A) is false but Reason (R) is true.

Which of the following is not a feature of MSMEs?

It involves use of more labour and less capital

It aims at balanced regional development

It leads to concentration of wealth in few hands

Promotion of social welfare

On the basis of the given text and common knowledge, identify the incorrect statement.

A stronger participation of MSMEs helps in fulfilling export demand and accelerating growth in India.

Globalization brings innovation and hence enhances productivity.

MSMEs is a part of global value chains.

MSMEs are the nominal source of employment in India.

Identify the incorrect statements from the following:

MSMEs covers 80 percent of industries in the country.

MSMEs accounts for more than 50 percent of exports.

MSMEs provides job to over 120 million people.

MSMEs accounts for 31 percent of Gross domestic product.

Vocal for local initiative of the Government of India is a boon for the MSMEs segment as it ______.

1. reduces dependence on other countries for import
2. boost entrepreneurship in the country
3. save foreign exchange
4. uses superior technology

(i) and (ii)

(i), (ii) and (iv)

(i), (ii), (iii) and (iv)

(i), (ii) and (iii)

______ is the outcome of structural measure under new economic policy.

1. Improves efficiency
2. Increase International Competitiveness
3. Remove Rigidities

(i) only

(i) and (ii)

(i), (ii) and (iii)

(iii) only