Please refer to Class 12 Economics Sample Paper with solutions provided below. All sample papers for Economics Class 12 have been designed as per the latest paper pattern issued by CBSE for the current academic year. Students should practice these guess papers for Class 12 Economics as it will help them to gain more understanding of the type of questions that are expected to be asked in upcoming Class 12 Economics exams. Please click on the links below to access free CBSE Sample Papers for Class 12 Economics.
Class 12 Economics Sample Paper Term 1 Set A
Section A
1. ……… is/are not considered as a banking institution.
(a) Commercial banks
(b) Central bank
(c) Insurance companies
(d) All of these
Answer
C
2. Read the following statements carefully and choose the correct alternative from the following.
Statement I Relative poverty is used to headcount the number of poors in the country.
Statement II India is comparatively poorer than the USA is an example of absolute poverty.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
D
3. India’s heavy good industries were suffering due to the colonial policies of deindustrialisation, however one industry set up in 1907 as a heavy industry still functions is ……… .
(a) BHEL
(b) TISCO
(c) RIL
(d) None of these
Answer
B
4. The first passenger train ran between Bombay to Thane was operated in ……… .
(a) 1850
(b) 1853
(c) 1890
(d) None of these
Answer
B
5. Money supply in an economy refers to the quantity of money.
(a) During a fiscal year
(b) As on 31st March every year
(c) At a given point of time
(d) At a pre-specified date
Answer
C
6. In post-independence period, focus of Indian planning was self-reliance or independent in terms of production. In present time, the NDP led central government also focused on the same ideology to cope up with the outbreak of covid–19 pandemic.
Which of the following programme relates to the same?
(a) Kaushal Bharat
(b) Atmanirbhar Bharat
(c) Ujjawala Programme
(d) None of these
Answer
B
7. Land reform measures were successfully implemented in the states of ………… .
(a) Punjab
(b) Haryana
(c) Kerala
(d) Uttar Pradesh
Answer
C
8. Read the following statements carefully and choose the correct alternative from the following.
Statement I Fiscal deficit is always inflationary in nature.
Statement II Fiscal deficits of the government budget forces the government to borrow in the present period.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
B
9. India became a member country of World Trade Organisation in year …………… .
(a) 1947
(b) 1951
(c) 1995
(d) 2000
Answer
C
10. Read the following statements carefully and choose the correct alternative from the following.
Statement IM1 is the most liquid measure of money supply used in India.
Statement II Broad money is the most non-liquid measure of money supply.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
C
11. In India, the expenditure on health and education is the responsibility of ………… .
(a) Union government
(b) State government
(c) Private individual
(d) Both (a) and (b)
Answer
D
12. Which of the following industry was famous for exports earnings in the initial years of British rule?
(a) Jute
(b) Cotton
(c) Handicraft
(d) None of these
Answer
C
13. In India’s case, ……… is/are major cause of poverty.
(a) British exploitation of India
(b) poor state of agriculture in India
(c) low growth rate and high population growth
(d) All of the above
Answer
D
14. India is majorly an agarin economy with majority of population depending upon agriculture for their living. Over the years, the dependency of people for living in this sector has declined but still it employs the majority of population. In spite of highest contributor to employment, this sector is considered as the non-highest contributor to employment in the country. Which of the following reasons can be attributed for the same?
(a) Low productivity of agriculture
(b) Lower proportion of landholdings for the majority of population
(c) Neglected in the reform process
(d) All of the above
Answer
D
15. If central bank increases the cash reserve ratio, the ability of commercial banks to create currency will ……… .
(a) increase
(b) decrease
(c) remain constant
(d) Either (a) or (b)
Answer
B
16. The growth rate of agricultural output during 2007-12 was …………… .
(a) 1.5% per annum
(b) 5% per annum
(c) 6% per annum
(d) 32% per annum
Answer
D
17. Government’s expenditure on education for all indicates which of the following objective of budget?
(a) Reducing inequality of income and wealth
(b) Economic growth
(c) Fiscal discipline
(d) Social welfare
Answer
D
18. Depreciation of foreign currency leads to ………… .
(a) increase in imports from domestic country
(b) increase in exports from domestic country
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer
A
19. Read the following statements carefully and choose the correct alternative from the following.
Statement I Devaluation of domestic currency refers to the increase in the value of domestic currency as planned by the government.
Statement II Devaluation of currency improves the export compatibility of the country.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
B
20. Over the years, India has experienced dependency on the agriculture. Though there is a significant decline in the population depending on agriculture in post reform period but it remained uneven. Which of the following states experienced highest decline in the dependency in agriculture?
(a) Punjab
(b) West Bengal
(c) Maharashtra
(d) Both (b) and (c)
Answer
D
21. If balance of trade deficit is ₹ 400 crores and value of exports is ₹ 300 crores, value of imports will be …………… .
(a) ₹ 300 crores
(b) ₹ 400 crores
(c) ₹ 700 crores
(d) Can’t be determined
Answer
C
22. Read the following statements carefully and choose the correct alternative from the following.
Statement I Legal reserve ratio in India is comprised of CRR and SLR.
Statement II If legal reserve ratio is 25%, value of money multiplier will be 10.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
A
23. Choose the correct pair from given below.
Column I Column II
A. Rise in exchange rate (i) Appreciation of domestic currency
B. Fall in exchange rate (ii) Depreciation of domestic currency
C. Import of goods (iii) Supply of foreign exchange
D. Foreign tourist in domestic country (iv) Export of services
Codes
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)
Answer
D
24. Foreign exchange transactions dependent on other items are referred to as ………… .
(a) Current account items
(b) Capital account items
(c) Autonomous items
(d) Accommodating items
Answer
D
Section B
25. When government spending exceeds its receipts without creating debt, it is known as ………… .
(a) Revenue deficit
(b) Fiscal deficit
(c) Primary deficit
(d) None of these
Answer
A
26. Assertion (A) Commercial banks functions as the lender of last resort for the general bank.
Reason (R) Central bank as a banker to the banks also regulates the operations of the commercial bank on a regular basis.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
C
27. Balance in invisible account of balance of payments is equal to ……… .
(a) Export of services – Import of goods
(b) Export of goods – Import of services
(c) Export of services – Import of services
(d) Export of goods – Import of goods
Answer
C
28. Read the following statements carefully and choose the correct alternative from the following.
Statement I Export and import from rest of the world leads to inflow of foreign currency.
Statement II Inflow of foreign exchange leads to surplus in BoP.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
B
29. Assertion (A) Development of infrastructure in different parts of the country is a revenue expenditure.
Reason (R) Developmental expenditures are generally recorded in capital account of BoP.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
C
30. Assertion (A) Information is a component of human capital which enhances labour productivity.
Reason (R) Over the years, the information and technology has played increasingly important role in human development.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
B
31. Which of the following items are not taxed under GST?
(a) Petroleum products
(b) Alcohol items
(c) Both (a) and (b)
(d) None of these
Answer
C
32. Indian goods and services tax is comprised of ……… slabs.
(a) 3
(b) 4
(c) 5
(d) 6
Answer
C
33. Assertion (A) When there is a trade deficit and current account deficit, there will always be BoP deficit.
Reason (R) Capital and current account are two major components of balance of payments account.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
C
34. Read the following statements carefully and choose the correct alternative from the following.
Statement I High fluctuations of fixed exchange rate system is controlled by RBI.
Statement II Accommodating transactions are only meant for adjusting the state of balance of payment.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
B
35. Government of Delhi decided to allocate a portion of the budget for the construction of smog towers in the city to reduce the pollution levels that increases during the month of November-December in the city. Which of the following expenditure of budget it refers to?
(a) Revenue expenditure
(b) Capital expenditure
(c) Non-developmental expenditure
(d) None of these
Answer
B
36. Choose the incorrect statement from given below.
(a) TISCO is the first heavy based industry established post-independence
(b) Economic benefits of poverty alleviation programmes do reach the target population in The country
(c) There is no on-job-training in agricultural sector in India
(d) All of the above statements are incorrect
Answer
A
37. Assertion (A) Autonomous items of balance of payments are recoded across all the accounts of BoP.
Reason (R) Items which are independent of the state of balance of payment are known as above the line items.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
B
38. As the money supply in the economy increases, purchasing power of money ………… .
(a) increases
(b) decreases
(c) remains constant
(d) Both (a) and (b)
Answer
B
39. Assertion (A) Heavy tariffs were imposed during the initial reforms to protect domestic companies from foreign competition.
Reason (R) Import substitution industrialisation was the policy adopted by the Indian policy makers post-independence.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
B
40. Read the following statements carefully and choose the correct alternative from the following.
Statement I New economic policies in India were an outcome of deep economic crisis.
Statement II During the economic crisis before 1990s, India applied for a loan of $10 billion from IMF.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
A
41. Assertion (A) Minimum Support Price (MSP) is given to the farmers who could not sell their produce at the regulated market setup by the government.
Reason (R) The organised market was formed to protect the farmers from market intermediaries.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
B
42. Goods and Services Tax was introduced in 2017 as an important policy measure under …………… .
(a) direct tax system
(b) indirect tax system
(c) Both (a) and (b)
(d) None of these
Answer
B
43. Assertion (A) Goods and services tax is purely a consumption-based tax imposed on consumption of goods and services.
Reason (R) GST council replaced personal consumption tax to introduce goods and services tax.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Both are false
Answer
D
44. Choose the correct pair from given below.
Column I Column II
A. Socialist economy (i) Co-existence of public and private sector
B. Self-reliance (ii) Interdependence between countries
C. First five-year plan (iii) Promotion of agriculture
Codes
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) All of these
Answer
C
45. Assertion (A) Modernisation implies adoption of new technology along with a change in the economic situation.
Reason (R) New production techniques can only be adopted with modernisation of outlook.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
A
46. Read the following statements carefully and choose the correct alternative from the following.
Statement I Introduction of GST led to decrease in overall tax rates.
Statement II Burden of GST is unevenly distributed under GST.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
A
47. Observe the picture given below.
Which of the features of new economic policy is shown in the above image?
(a) Greater choice of consumers
(b) Integration of markets
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer
C
48. Choose the incorrect pair from given below.
Column I Column II
A. ICMR (i) Indian Council of Medical Research
B. AYUSH (ii) Indian System of Medicines
C. UGC (iii) Universal Graduation Committee
Codes
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) All of these
Answer
C
Section C
Direction : – Read the following case study and answer questions 49 to 54 on the basis of the same.
Tamil Nadu Women in Agriculture (TANWA) is a project initiated in Tamil Nadu to train women in latest agricultural techniques. It induces women to actively participate in raising agricultural productivity and family income.
At a Farm Women’s Group in Thiruchirapalli, run by Anthoniammal, trained women are successfully making and selling vermicompost and earning money from this venture. Many other Farm Women’s Groups are creating savings in their group by functioning like mini banks through a micro-credit system. With the accumulated savings, they promote small-scale household activities like mushroom cultivation, soap manufacture, doll making or other income-generating activities.
49. Assertion (A) TANWA is trained group of women to become self-employed by organising them in self-help groups.
Reason (R) Self-help groups and micro credit institutions have helped in bridging the gap between formal and informal credit.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
B
50. Self-help groups and micro credit programmes are present in ………… areas.
(a) rural
(b) urban
(c) Both (a) and (b)
(d) None of these
Answer
C
51. Read the following statements carefully and choose the correct alternative from the following.
Statement I The farmers in rural areas get trapped due to absence of formal credit.
Statement II Formal sector credit of rural areas are mostly accessed by large farmers.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
C
52. In the above paragraph, the activities like mushroom cultivation, soap manufacture, doll making are an example of ………… .
(a) farm activity
(b) non-farm activity
(c) small scale manufacturing
(d) Both (b) and (c)
Answer
D
53. In which of the following areas, TANWA focuses for employment?
(a) Farming
(b) non-farm activities
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer
B
54. Non-farm activities are promoted for which of the following reasons?
(a) It gives regular source of income
(b) It involves less cost
(c) It can be done along with farming
(d) All of these
Answer
D
Direction : – Read the following case study and answer questions 55 to 60 on the basis of the same.
The budget has lowered the Gross Tax Revenue (GTR) estimate for FY20 by a massive ₹ 3 lakh crore or 12% with sharpest cut of ₹ 1.55 lakh crore or 20% in corporate tax estimate, but if the April-December data put out by the Controller General of Accounts recently and trend share of collections in the fourth quarter of a financial year are of any guidance, the actual GTR could still fall short of the Revised Estimate (RE) by around ₹ 1 lakh crore.
As per an FE analysis, the approximate shortfall in each tax category from the respective REs could be as follows personal income tax ₹ 63,000 crore; corporate tax ₹ 37,000 crore; GST (including compensation cess) ₹ 11,000 crore, customs ₹ 21,000 crore; excise ₹ 21,000 crore.
While these add up to over ₹ 1.5 lakh crore, the government could manage to mop up some ₹ 25,000-30,000 crore from the indirect tax resolution scheme (the amount tax-payers have agreed to settle their disputes is close to ₹ 40,000 crore and a bulk of it could be collected before March-end). Also, the GST collections seem to be rising (January mop up was about ₹ 1.11 lakh crore, the second highest in any month since the launch of the tax) and if the trend is sustained, the shortfall could be reduced to that extent.
55. Which of the following is/are the sources of government revenue as mentioned in the above paragraph?
(a) Tax revenue
(b) Escheat
(c) Profits
(d) All of these
Answer
A
56. Gross Tax Tevenue (GTR) of the government budget is comprised of
(a) direct taxes only
(b) indirect taxes only
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer
C
57. Goods and Service tax mentioned in the above paragraph is ……… in nature.
(a) Proportional
(b) Progressive
(c) Regressive
(d) None of these
Answer
A
58. Read the following statements carefully and choose the correct alternative from the following.
Statement I Tax revenues are not debt-creating receipts of the budget.
Statement II Taxes are legal and compulsory payments and hence can’t be avoided.
Alternatives
(a) Statement I is correct and Statement II is incorrect
(b) Statement II is correct and Statement I is incorrect
(c) Both the statements are correct
(d) Both the statements are incorrect
Answer
C
59. Identify the non-tax revenue from the options given below.
(a) Export duty
(b) Import duty
(c) Dividends
(d) Excise
Answer
C
60. Assertion (A) A fall in tax revenue during the FY20 leads to fall in economic growth.
Reason (R) The regular and sustained growth of the economy is one of the major objectives of the central government budget.
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, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
Answer
B
