Board Paper of Class 12-Humanities 2020 Economics All India(Set 2) - Solutions

• Question 1
  ___________ is the agent and adviser to the Government of India.

  (Fill in the blank with correct answer)

  VIEW SOLUTION

• Question 2
  State whether the following statement is true or false :
  "To reduce inflation, the Central Bank should reduce Cash Reserve Ratio (CRR)." VIEW SOLUTION

• Question 3
  Define Aggregate Demand. VIEW SOLUTION

• Question 4
  Government expenditure incurred on defence items is a type of _________ expenditure in the Government Budget.

  (Fill in the blank with correct answer)

  VIEW SOLUTION

• Question 5
  A car purchased by a household is a ___________.

  (Choose the correct alternative)

  (A) single use capital good
  (B) single use consumer good
  (C) durable consumer good
  (D) semi-durable consumer good
  

  OR

  
  GNP deflator is represented by which of the following formulae?
                                                                                  (Choose the correct alternative)
  (A) $\frac{\mathrm{Nominal} \mathrm{GNP}}{\mathrm{Real} \mathrm{GNP}}\times 100$
  
  (B) $\frac{\mathrm{Real} \mathrm{GNP}}{\mathrm{Nominal} \mathrm{GNP}}\times 100$
  
  (C) $\frac{\mathrm{Real} \mathrm{GNP}}{\mathrm{Change} \mathrm{in} \mathrm{Rate} \mathrm{of} \mathrm{Inflation}}\times 100$
  
  (D) $\frac{\mathrm{Change} \mathrm{in} \mathrm{Rate} \mathrm{of} \mathrm{Inflation}}{\mathrm{Real} \mathrm{GNP}}\times 100$ VIEW SOLUTION

• Question 6
  If the Government establishes a new university, this expenditure incurred in the Government Budget will be a type of ________ expenditure.

  (Fill in the blank with the correct answer)

  VIEW SOLUTION

• Question 7
  If the entire additional income of an economy is consumed, the value of investment multiplier will be __________. (Choose the correct alternative)
  (A) zero (0)
  (B) not defined (∞)
  (C) one (1)
  (D) ten (10) VIEW SOLUTION

• Question 8
  Suppose in a hypothetical economy, the income rises from ₹ 500 crores to ₹ 600 crores. As a result, the consumption expenditure rises from ₹ 400 crores to ₹ 500 crores. Marginal propensity to consume in such a case would be _______________.

  (Choose the correct alternative)

  (A) 0·8
  (B) 0·4
  (C) 1·0
  (D) 0·6 VIEW SOLUTION

• Question 9
  'Charity from Abroad' will be recorded on __________ (credit/debit) side of the Balance of Payment accounts. (Fill in the blank with correct answer) VIEW SOLUTION

• Question 10
  Give any two examples of non-tax revenue receipts. VIEW SOLUTION

• Question 11
  "Gross Domestic Product (GDP) is not the best indicator of the economic welfare of a country." Defend or refute the given statement with valid reasons. VIEW SOLUTION

• Question 12
  Discuss the working of the adjustment mechanism if, Aggregate Supply is greater than Aggregate Demand.
  

  OR

  
  If in an economy :
  Marginal propensity to save (MPS) = 0·2
  Change in initial investment (∆I) = ₹ 2,000 crores
  Find the value of the following:
  (a) Investment multiplier (K)
  (b) Change in final income (∆Y) VIEW SOLUTION

• Question 13
  How does the Central Bank control the credit with the help of 'Bank Rate'? Explain.
  

  OR

  
  Elaborate any two instruments of credit control, exercised by the Reserve Bank of India. VIEW SOLUTION

• Question 14
  "The Government Budget of a country cannot have fiscal deficit without the existence of revenue deficit." Defend or refute the given statement. VIEW SOLUTION

• Question 15
  "US dollar has recorded a jump of 0.75 paise per dollar (p/$) in the last one month; this situation might bring smiles and sorrows to different types of traders (exporters and importers)." Justify the given statement. VIEW SOLUTION

• Question 16
  Using the following data of an imaginary economy, calculate and compare the Real Gross Domestic Product (GDP) for the given years :
   

  Year	2015-16	2016-17
  Nominal GDP Rate	9%	8%
  GDP deflator	150	160

  
  

  OR

  
  (a) “Circular flow of income in a two-sector economy is based on the axiom that one's expenditure is other's income." Support your answer with valid reasons.
  (b) Distinguish between 'value of output' and 'value added'. VIEW SOLUTION

• Question 17
  In the given figure, what does the gap 'KT' represent ? State and discuss any two fiscal measures to correct the situation.
  VIEW SOLUTION