#### Important 1 Mark Creative Questions (New Syllabus) 2020

12th Standard

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Economics

Time : 00:45:00 Hrs
Total Marks : 49

Part A

49 x 1 = 49
1. Micro means __________.

(a)

Large

(b)

Big

(c)

Small

(d)

Both 'a' and 'b'

2. From the households sectors receives the income?

(a)

households sector

(b)

government expenditure

(c)

external sector

(d)

firm sector

3. Which of the following statements regarding the circular-flow diagram is true?

(a)

If Vijay works for XYZ Solutions Ltd. and receives a salary payment, the transaction takes place in the market for goods and services.

(b)

If Vijay works for XYZ Solutions Ltd. and receives a salary payment, the transaction takes place in the market for goods and services.

(c)

None of these answers

(d)

The factors of production are owned by households.

4. Formula for calculating NNP at factor cost.

(a)

$\frac{Nominal\ GDP}{Real\ GDP}\times 100$

(b)

NNP at Market Prices - Indirect taxes + Subsidies.

(c)

GNP - Depreciation allowance

(d)

Output = Income = Expenditure

5. __________ Framework is useful for economists as well as policy makers.

(a)

Social Accounting

(b)

Statistics

(c)

Capital Gains

(d)

None of these

6. (X – M) is net export which can be……….?

(a)

positive or negative

(b)

positive

(c)

negative

(d)

none of the above

7. Assertion (A) : When Indian national income is expressed in terms of US\$, the former looks very low.
Reason (R) : If Purchasing Power Parity (PPP) method is adopted India looks better

(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

8. Rate of interest is a stock

(a)

Socialism

(b)

Keynesianism

(c)

Classicism

(d)

All the above

9. ___________ was set up in July 1982.

(a)

ARDC

(b)

NABARD

(c)

ICICI

(d)

Indian Bank

10. Say’s law of market says:

(a)

Supply creates its own demand

(b)

Demand creates supply

(c)

Income generates demand

(d)

Savings create demand

11. Assertion (A) :In developing countries like India, the nature of unemployment is different from that of developed countries.
Reason (R) :In developed countries, the unemployment is purely temporary or cyclical or frictional

(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

12. Match the correct codes

 1 J.B. Say’s Market Law i A person receives his income from production which is spent on the purchase of goods and services produced by others 2 Keynes theory of employment ii Denotes money actually spent by the people on products of industry 3 Market Law Meaning iii Effective demand signifies the money spent on consumption of goods and services and on investment 4 Effective demand iv Supply creates its own demand
(a)

(1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

(b)

(1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

(c)

(1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

(d)

(1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

13. Consumption function is the relationship ______ between and the national income.

(a)

Consumption expenditure

(b)

Government expenditure

(c)

Distribution expenditure

(d)

Investment expenditure

14. The average propensity to save is measured by _________

(a)

C/Y

(b)

C x Y

(c)

S/Y

(d)

C + Y

15. What is the nature of the relationship between the national income and induced investment?

(a)

positive

(b)

negative

(c)

zero

(d)

infinite

16. MEC for a capital good was found out to be 10% and the market rate of interest is 9%, then the investment

(a)

Not profitable

(b)

Profitable

(c)

Breakeven

(d)

Cannot say

17. Assertion (A):The multiplier is directly related to MPC and inversely related to MPS.:
Reason (B):The accelerator principle explains the effect of changing consumption expenditure upon volume of investment.

(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.

18. A high marginal propensity to consume implies which of the following

(a)

A small change in consumption when income changes

(b)

A high savings rate

(c)

A high marginal tax rate

(d)

A low marginal propensity to save

19. When prices are raised drastically(rapidly) we call it

(a)

Galloping inflation

(b)

Mild inflation

(c)

Hyper Inflation

(d)

Deflation

20. Irving Fisher'_______s was published in 1911.

(a)

Quantity theory of money

(b)

Liquidity preference

(c)

Quality theory of money

(d)

Both 'b' and 'c'

21. According to Marshall’s equation, the value of money is influenced not only by changes in M, but also by changes in

(a)

K

(b)

P

(c)

Kl

(d)

Pl

22. In Fisher’s transaction velocity model, one of the following is not an assumption

(a)

Velocity of circulation of money is constant

(b)

The volume of transactions is constant

(c)

Full employment

(d)

P is considered as an active factor

23. Finance is the life blood of all economic activities such as________

(a)

trade

(b)

commerce

(c)

agriculture

(d)

all the above

24. Pick the financial tool which are the safe and easy way to protect money while traveling.

(a)

Demand Draft

(b)

ATM

(c)

Master Card

(d)

Traveller’s Cheque

25. The specific objectives of monetary policy are

(a)

Neutrality of money

(b)

Tax control

(c)

Stability of exchange rates

(d)

Price stability

26. Which of the following is not the work of RBI?

(a)

Bank of the banks

(b)

Credit controller

(c)

Custodian of foreign currency

(d)

Allocating funds directly to the farmers for agricultural development

27. Which of the following is not one of the Central bank’s monetary policy tools?

(a)

Buying bonds on the open market

(b)

Selling bonds on the open market

(c)

Raising or lowering taxes

(d)

Raising or lowering the reserve requirement ratio

28. _______ includes both visible and invisible items.

(a)

Balance of payment

(b)

Balance of Trade

(c)

Foreign Trade

(d)

None of these

29. The modern theory explains the phenomenon of international trade on the basis of ___________.

(a)

Labour theory of value

(b)

Factor endowment theory

(c)

General theory of value

(d)

Ricardo theory

30. Identify the odd one out.

(a)

IMF

(b)

IBRD

(c)

WTO

(d)

RBI

31. Devaluation means deliberate reduction of the official rate at which……………….?

(a)

domestic currency is exchanged for another currency

(b)

domestic currency is blocked for another currency

(c)

domestic import is exchanged for another import

(d)

none of the above

32. In the classical model of Ricardo, the direction of trade is determined by:

(a)

absolute advantage

(b)

comparative advantage

(c)

physical advantage

(d)

which way the wind blows

33. The economist who said that international trade was based upon the concept of absolute advantage was:

(a)

David Ricardo

(b)

Adam Smith

(c)

J.S.Mill

(d)

Bertil Ohlin

34. "Foreign capital infinitely prefers situations where the upside potential is vast, if risks must be taken to get in" - was said by __________.

(a)

Adam smith

(b)

Rudi Dorbush

(c)

Alfred Marshall

(d)

J.M. Keynes

35. SDR stands for __________.

(a)

Special Drawing Resource

(b)

Special Drawing Rights

(c)

Special Daily Rights

(d)

Special Detail Rights

36. India’s current quota in the IMF is SDRs (Special Drawing Rights)………..?

(a)

5,821.5 million

(b)

6,821.5 million

(c)

5,621.5 million

(d)

8,821.5 million

37. Which of the followings are called Brettonwoods Twins?

(a)

IMF & International Bank for Reconstruction and Development (IBRD)

(b)

IMF & World Trade Organisation

(c)

IBRD & World Trade Organisation

(d)

None of the above

38. Financial operation of the government  _____________

(a)

Treasury

(b)

Bills of payment

(c)

Bills of exchange

(d)

All the above

39. The term fiscal is derived from Greek word which means basket and symbolizes the………………?

(a)

public purse

(b)

tax

(c)

fees

(d)

public revenue

40. Which of the following Taxes are not Levied and Collected by the union but Assigned to the States (Art.269)?

(a)

Duties in respet of succession to property other than agricultural land.

(b)

Estate duty in respect of property other than agricultural land

(c)

Taxes on railway fares and freights

(d)

None of the above

41. __________ gases are released in to the atomssphere during the burning of fossil fuels

(a)

Nitrogen oxides

(b)

Sulfur oxides

(c)

Acid rain

(d)

Ammonia

42. Pure public goods pose a ________________?

(a)

free-rider problem

(b)

environment tax

(c)

environment fee

(d)

none of the above

43. The concept__________ refers to the structural changes towards betterment

(a)

Economic fluctuation

(b)

Economic growth

(c)

Economic development

(d)

None of these

44. What are the main approaches of approaches to the concept of development?

(a)

The traditional approach and the new welfare oriented approach

(b)

The modern approach and classical approach

(c)

Lewis approach and Sen’s approach

(d)

None of the above

45. The idea of _____________ was strengthened during the Great Depression in 1930s.

(a)

political planning

(b)

industrial planning

(c)

economic planning

(d)

democratic planning

46. The vicious circle theory states that

(a)

growing government assistance create addiction to welfare programs

(b)

low income levels create pressure for money creation.

(c)

low income levels create pressure for cheap imports

(d)

low per capita income creates low savings that keep incomes low.

47. ________ data already exist in some form: published or unpublished in an identifiable secondary source.

(a)

primary

(b)

vital

(c)

raw

(d)

secondary

48. Find the incorrect match.
I. Σdxdy = Sum of product of the deviations x and y series from their assumed means.
II. Σdx2 = Sum of the squares of the deviations of x series from an assumed mean
III. Σdy2= sum of the deviation of x series from an assumed mean of x
IV. Σdx= Sum of the squares of the deviations of y series from an assumed mean

(a)

I, II, III, IV are correct

(b)

I, II, III are correct, IV is incorrect

(c)

II and IV are incorrect, I and III are correct

(d)

III and IV are only incorrect

49. The branch of economics wherein mathematics and statistics are used to measure and analyze economics activities is called _________.

(a)

Applied Economics

(b)

Econometrics

(c)

Statistics

(d)

Macro Economics