#### Model 1 Mark Book Back Questions (New Syllabus) 2020

12th Standard

Reg.No. :
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Economics

Time : 01:00:00 Hrs
Total Marks : 66

Part A

66 x 1 = 66
1. Socialist Economy promote  __________.

(a)

Social welfare motive

(b)

Collective welfare motive

(c)

Profit motive

(d)

Both 'a' and 'b'

2. Identify which is not a part of classification of economy based on Status of Development

(a)

Mixed Economy

(b)

Developed and underdeveloped economie

(c)

Undeveloped economies

(d)

Developing economies

3. Planning is an integral part of a Capitalist economy.
In socialist system, all decisions are undertaken by the central planning authority

(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

4. The interaction of individuals and firms in a market can be described as a_______ of money, goods and services and resources through product and factor markets.

(a)

Constant flow

(b)

Stable flow

(c)

Circular Flow

(d)

Circular Flow

5. Percapita Income =

(a)

National Income - Population

(b)

Personal Income

(c)

National Income $\div$ Population

(d)

National Income x Population

6. GNP at Market prices = GDP at Market Price+ __________.

(a)

Net Market Income

(b)

(c)

Botha' and 'b'

(d)

Personal Income

7. The per capita income of an economy can be calculated by __________.

(a)

Dividing GDP by population

(b)

Dividing GNP by population

(c)

Multiplying GNP by population

(d)

Dividing GNP by number of people employed

8. Secondary sector is __________

(a)

Industry

(b)

(c)

Agriculture

(d)

Manufacture

9. ________refers to saving an investment activities?

(a)

Firm sector

(b)

Household sector

(c)

Capital sector

(d)

Corporate sector

10. Personal Income includes:

(a)

Dividend distributed

(b)

Social insurance contributions

(c)

Corporate profit

(d)

None of the above

11. GDP Deflator is equal to________

(a)

$\cfrac { (NominalGDP) }{ (NominalGDP) } \times 100$

(b)

$\cfrac { (RealGDP) }{ (NominalGDP) } \times 100$

(c)

$\cfrac { (NominalGNP) }{ (RealGNP) } \times 100$

(d)

$\cfrac { (NominalNDP) }{ (RealNDP) } \times 100$

12. Every economy in the world aims at attaining the level of _________

(a)

Full employment

(b)

Unemployment

(c)

Seasonal unemployment

(d)

Educated unemployment

13. Based on Keynesianism __________ is vice.

(a)

Saving

(b)

Production

(c)

Consumption

(d)

None of these

14. Which of the following economies have the unemployment is purely temporary or cyclical or frictional?

(a)

Developed Economies

(b)

Underdeveloped economies

(c)

Developing economics

(d)

None of the above

15. The idea that a general cut in wages will finally lead to a state of full employment was suggested by:

(a)

Keynes

(b)

Marshall

(c)

J.B.Say

(d)

A.C.Pigou

16. Suppose there is full employment and vertical aggregate supply schedule. An increase in the nominal money supply

(a)

reduces the rate of interest and changes the composition of output

(b)

causes a proportional increase in real output

(c)

has no effect on the real money supply or the composition of output

(d)

causes the real money supply to increase, which changes composition of output

17. In the classical model:

(a)

flexible markets will keep the economy at a full-employment level of spending and output

(b)

both households’ saving activity and firms’ investment activity are quite sensitive to changes in the interest rate.

(c)

adjustments in the interest rates quickly correct any imbalances between saving and investment

(d)

all of the above

18. __________ principle explains the relationship between consumption expenditure and capital expenditure

(a)

Multiplier

(b)

Accelerator

(c)

Super Multiplier

(d)

All the above

19. ______________ is the correct formula of MPS.

(a)

ΔS/ΔY

(b)

ΔI/ΔY

(c)

ΔP/ΔQ

(d)

ΔC/ΔY

20. The ratio of consumption expenditure to any particular level of income is called as..?

(a)

The average propensity to consume

(b)

The average propensity to saving

(c)

The average propensity to investment

(d)

The marginal propensity to consume

21. What is relevant in the context of MEC?
I. The prospective yield from a capital asset.
II. The supply price of a capital asset.

(a)

I only relevant

(b)

II only relevant

(c)

Both I and II are relevant

(d)

Both are irrelevant

22. When MPC = 0.5, the value of multiplier is

(a)

5

(b)

0.5

(c)

2

(d)

4

23. Assertion (A): Consumption is an increasing function of income because consumption expenditure increases with increase in income.
Reason (R): When income is negative, people spend out of their past savings on consumption because they must eat in order to live.

(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

24. Assume a simple, closed economy with no government. The marginal propensity to consume (mpc) = 0.75. Then the value of the multiplier is:

(a)

1.34

(b)

0.57

(c)

4

(d)

1.75

25. The symbol of India rupee came into use on________

(a)

15th July, 2010

(b)

16th July, 2010

(c)

15th June, 2010

(d)

16th June, 2010

26. What is the basis of the Credit System.?

(a)

State

(b)

Computer

(c)

PAYTM

(d)

Money

27. What is SLR?

(a)

It is the fraction of the total demand and time deposits of the commercial banks is the form of specified liquid assets

(b)

Reserve Money consists of two things (a) vault cash in banks and (b) deposits of commercial banks with RBI.

(c)

It is the fraction of the deposits the banks must keep with RBI.

(d)

It is the ratio of money held by the public in currency to that they hold in bank deposits

28. In which country the first hyper inflation of the 21st century took place?

(a)

Zimbabwe

(b)

Namibia

(c)

Venezuela

(d)

India

29. Assertion (A): Fisher extended his original equation of exchange to include bank deposits M1 and its velocity V1.
Reason (R): In a modern economy, bank’s demand deposits or credit money and its velocity play a vital part in business.

(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 fals

(d)

A is false but R is true.

30. "Commercial banks are the institutions that make short term loans to business and in the process create money" was said by_______

(a)

Culbertson

(b)

(c)

Ricardo

(d)

J.M. Keynes

31. _______means rate at which the RBI is willing to lend to commercial banks

(a)

Interest rate

(b)

Growth rate

(c)

Repo rate

(d)

Bank rate

32. ______ implies that commercial banks provide some utility services to customers by performing various functions.

(a)

Moral Suasion

(b)

General Utility Functions

(c)

Open market operation

(d)

Credit rationing

33. _____ and _____ are the frequently used tools with which the RBI can control the availability and the supply of money in the economy.

(a)

The Repo Rate and the Reverse Repo Rate

(b)

CRR, SLR

(c)

Moral Suasion, Credit Ceiling

(d)

The Reverse Repo Rate, The Repo Rate

34. The specific objectives of monetary policy are

(a)

Neutrality of money

(b)

Tax control

(c)

Stability of exchange rates

(d)

Price stability

35. Which bank was introduced first ATM machine in India?

(a)

RBI

(b)

HSBC

(c)

PNB

(d)

ICICI bank

36. 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

37. ________ refers to the exchange of goods and services with the political and geographical boundaries of a nation.

(a)

(b)

(c)

(d)

38. Mercantilism

(a)

Is the philosophy of free international trade

(b)

Was a system of export promotion and barriers to imports practiced by governments

(c)

Was praised by Adam Smith in The Wealth of Nations

(d)

Both (a) and (c)

39. The principal items on the …………. include imports of goods and services, transfer payments to foreigners, lending to foreign countries.

(a)

BoT side

(b)

debite side

(c)

credit side

(d)

BoP side

40. The trade balance of a country is represented by

(a)

the difference between imports and exports

(b)

the total imports and exports

(c)

the report between imports and exports

(d)

the difference between income and expenditure

41. Assume that Country A is relatively abundant in labor and Country B is relatively abundant inland. Note that wages are the returns to labor and rents are the returns to land. According to thefactor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B.

(a)

wages and rents should fall in Country A

(b)

wages and rents should rise in Country A

(c)

wages should rise and rents should fall in Country A

(d)

wages should fall and rents should rise in Country A

42. The balance on current account
I equals the absolute value of the balance on capital account.
II is financed by savings.
III is net grants minus remittances.
IV includes goods, services, and unilateral transfers.

(a)

I and II only.

(b)

II and III only

(c)

I and IV only

(d)

None of the above

43. The IMF headquarters are in ______.

(a)

Geneva

(b)

Chennai

(c)

Washington D.C

(d)

Mysore

I. Financial – Assistance to correct short and medium term deficit in BOP;
II. Regulatory – Counseling and technical consultancy
III. Consultative - Code of conduct and

(a)

All are correctly matched

(b)

II only correctly matched

(c)

All are incorrectly matched

(d)

I only correctly matched

45. Expand the term SAIC

(a)

American Information Centre

(b)

Agricultural Information Centre

(c)

Agrarian Information Centre

(d)

Agricultural Investment Centre

46. Budget estimates are prepared by _____________

(a)

Ministry of Finance

(b)

Public finance

(c)

Public Revenue

(d)

All the above

47. Public finance is concerned with the income and expenditure of

(a)

Private sector

(b)

Agricultural sector

(c)

Public authorities

(d)

Industrial sector

48. ………………… can be ensured by direct taxes?

(a)

Canon of certainty

(b)

Canon of convenience

(c)

Canon of economy

(d)

Canon of equity

49. The objective of taxation by the Government are

(a)

Raising revenue for the state

(b)

To maintain economic stability

(c)

To remove disparities in the distribution of income

(d)

All of the above

50. Assertion (A): The effectiveness of measures of the Government as well as private depends on the administrative machinery.
Reason (R): If the administrative machinery is inefficient and corrupt it will result in wastages and losses

(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.

51. Ground water contamination occurs when man made products such as

(a)

Gasoline

(b)

Oil

(c)

Water

(d)

Chemical

52. Ecosystems are the foundations of the ____________ and they determine the health of the entire earth system

(a)

Atmosphere

(b)

Economy

(c)

Biodiversity

(d)

Biosphere

53. Eutrophication is an increase____________ in water bodies.

(a)

level of minerals

(b)

level of vitamins

(c)

level of nutrients

(d)

level of balance

(a)

Overall lowering of environmental qualities.

(b)

Adverse change brought in by human activities.

(c)

Ecological imbalance

(d)

All the above

55. Assertion (A): Wastes contain harmful chemicals and toxins which make the water poisonous for aquatic animals and plants.
Reason (R): Sewage, garbage, and liquid waste of households, agricultural runoff, and effluents from factories are discharged into lakes and rivers.

(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.

56. The period of Eighth plan was

(a)

1978-83

(b)

1985-90

(c)

1992-97

(d)

1990-95

57. 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

58. Who attributed the cause for economic development to innovation?

(a)

Dalton

(b)

Lewis

(c)

Schumpeter

(d)

Nurkse

59. Find the incorrect match

(a)

Sir M. Vishveshwarya (1934): “Planned Economy of India”.

(b)

Jawaharlal Nehru (1938): “National Planning Commission

(c)

Bombay Plan (1940): ‘People’s Plan”

(d)

None of the above

60. Which of the following is not a problem in comparing developed and developing countries’ GNP?

(a)

GNP is understated for developed countries since a number of items included in their national incomes are intermediate goods

(b)

The economic contribution of a housewife in a peasant family may not be measured in GNP in a poor country.

(c)

GNP is understated for developing countries since many of their labor intensive good have no impact on exchange rate since they are not traded.

(d)

GNP is overstated for countries where the price of foreign exchange is less than market clearing price.

61. Assertion (A): The prime goals of economic planning are stabilization in developed countries and growth in LDCs.
Reason (R): The failure of market mechanism invited state intervention in economic activities through planning.

(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.

62. Find the author who said this “Statistics as a science of estimates and probabilities”

(a)

Croxten and Crowden

(b)

Boddington

(c)

Irving Fisher

(d)

Lowernce

63. There are two kinds of measures of dispersion, namely

(a)

Absolute measure of dispersion and Relative measure of dispersion

(b)

Relative measure of dispersion and Relative measure of dispersion

(c)

Absolute measure of dispersion and Absolute measure of dispersion

(d)

Relative measure of dispersion and Absolute measure of dispersion

64. Who said “Econometrics is concerned with the empirical determination of economic laws”

(a)

Galton

(b)

H Theil

(c)

Fisher

(d)

Dalton

65. A scatter plot of number of teachers and number of people with commerce degrees for cities in India reveals a positive association. The most likely explanation for this positive association is:

(a)

Teachers encourage people to get college degrees, so an increase in the number of teachers is causing an increase in the number of people with college degrees.

(b)

Larger cities tend to have both more teachers and more people with college degrees, so the association is explained by a third variable, the size of the city

(c)

Teaching is a common profession for people with college degrees, so an increase in the number of people with college degrees causes an increase in the number of teachers.

(d)

Cities with higher incomes tend to have more teachers and more people going to college, so income is a confounding variable, making causation between number of teachers and number of people with college degrees difficult to prove.

66. In a linear regression equation, Y=a + bX, what is the b denote?

(a)

the regression coefficient, the slope of the line.

(b)

the intercept with the y-axis

(c)

the correlation coefficient, the strength of the line

(d)

the score on the variable x.