#### Important Questions Part-II

12th Standard EM

Reg.No. :
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Economics

Time : 01:00:00 Hrs
Total Marks : 60

Part - A

60 x 1 = 60
1. Macro economics is a study of_________

(a)

individuals

(b)

firms

(c)

a nation

(d)

aggregates

2. An economic system where the economic activities of a nation are done both by the private and public together is termed as__________

(a)

Capitalistic Economy

(b)

Socialistic Economy

(c)

Globalisic Economy

(d)

Mixed Economy

3. Identify which is not a part of classification of economy based on Level of National Income

(a)

Foreign Income Economies

(b)

Low Income Economies

(c)

Middle Income Economies

(d)

High Income Economies

4. Assertion (A) :Each individual and organization produce only those goods which ensure high profit.
Reason (R) :Profit is the driving force behind all economic activities in a capitalistic economy

(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

5. In the circular-flow diagram

(a)

Firms are sellers in the resource market and the product market

(b)

Households are sellers in the resource market

(c)

Firms are buyers in the product market

(d)

Spending on goods and services flow from firms to households

6. __________ is deducted from gross value to get the net value

(a)

Income

(b)

Depreciation

(c)

Expenditure

(d)

Value of final goods

7. PQLI is the indicator of_____________

(a)

Economic growth

(b)

Economic welfare

(c)

Economic welfare

(d)

Economic development

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

(a)

Social Accounting

(b)

Statistics

(c)

Capital Gains

(d)

None of these

9. Remittances made by NRIs to India in the context of national income accounting is called as….?

(a)

Remittance Income

(b)

NRI Income

(c)

Factor Payments

(d)

All of the above

10. Assertion (A) :Double counting is to be avoided under value added method.
Reason (R) :Any commodity which is either raw material or intermediate good for the final production should not be included.

(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.

11. Keynes theory emphasized on________ equilibrium

(a)

Very short run

(b)

Short run

(c)

Very long run

(d)

Long run

12. Say’s law stressed the operation of________ in the economy

(a)

Induced price mechanism

(b)

Automatic price mechanism

(c)

Induced demand

(d)

Induced investment

13. J.M. Keynes was born in _____________

(a)

1885

(b)

1884

(c)

1883

(d)

1882

14. In the Keynesian two sector economy, AD>AS, then

(a)

S=I

(b)

S>

(c)

S<I

(d)

S=0

15. Which of the following was not a classical economist?

(a)

(b)

Thomas R. Malthus

(c)

John Stuart Mill.

(d)

John Maynard Keynes

16. The average propensity to consume is measured by

(a)

C/Y

(b)

CxY

(c)

Y/C

(d)

C+Y

17. The multiplier tells us how much __________ changes after a shift in _____

(a)

Consumption , income

(b)

investment, output

(c)

savings, investment

(d)

output, aggregate demand

18. Accelerator (β) = _________

(a)

C + I

(b)

1/1 - MPC

(c)

$\frac{ΔC}{ΔC}$

(d)

ΔC/ΔY

19. 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

20. Psychological law of consumption states that the value of MPC is lies between zero and

(a)

1

(b)

2

(c)

3

(d)

4

21. _________is a decrease in the rate of inflation.

(a)

Disinflation

(b)

Deflation

(c)

Stagflation

(d)

Depression

22. Fisher’s Quantity Theory of money is based on the essential function of money as

(a)

measure of value

(b)

store of value

(c)

medium of exchange

(d)

standard of deferred payment

23. Barter system was introduced by________ tribes.

(a)

Mesopotamia

(b)

Phoenician

(c)

Babylonian

(d)

Jarwa

24. The new symbol of Rupee is an amalgamation of Devanagri ‘Ra’ and the ______ without the stem.

(a)

Arial ‘R’

(b)

Roman ‘R’

(c)

Italian ‘R’

(d)

Greek Script ‘R’

25. Find which is not a an example of Fixed income Groups?

(a)

wages

(b)

salary

(c)

pension

(d)

organization

26. Credit creation means

(a)

(b)

Revenue

(c)

Expenditure

(d)

Debt

27. Moral suasion refers.

(a)

Optimization

(b)

Maximization

(c)

Persuasion

(d)

Minimization

28. "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

29. The Contractionary monetary policy is _____, which maintains shortterm interest rates higher than usual or which slows the rate of growth in the money supply or even shrinks it

(a)

dear money policy

(b)

federal policy

(c)

fiscal policy

(d)

monetary policy

30. Of the three policy tools that the RBI can use to change the money supply, the one that does not affect the monetary base is

(a)

open market operations

(b)

changes in the discount rate

(c)

changes in the federal funds rate

(d)

reserve requirements

31. In the case of BOT,

(a)

Transactions of goods are recorded.

(b)

Transactions of both goods and services are recorded.

(c)

Both capital and financial accounts are included.

(d)

All of these

32. Foreign direct investments not permitted in India

(a)

Banking

(b)

Automic energy

(c)

Pharmaceutical

(d)

Insurance

33. Movements of goods (export and imports of commodities) are also known as…………

(a)

(b)

(c)

(d)

34. 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

35. In a portfolio investment

(a)

investors are directly involved in managing the operations.

(b)

as in direct investment, investors export goods and services abroad.

(c)

investors transfer the technology to local investors.

(d)

investors have no control over operations.

(a)

TRIPS

(b)

TRIMS

(c)

GATS

(d)

NAMA

37. Which of the following is not the member of SAARC?

(a)

Pakistan

(b)

Sri Lanka

(c)

Bhutan

(d)

China

38. Who are ASEAN initial original member countries?

(a)

India, China, Russia, Japan and Australia

(b)

Indonesia, Malaysia, Philippines, Singapore and Thailand

(c)

(d)

Brunei Darussalam, Vietnam, Laos and Myanmar and Cambodia joined.

39. Suppose that tomatoes from India face a 20 percent tariff in the China and a 25 percenttariff in Pakistan. If the China and Pakistan maintain free trade between each other, the these two countries belong to a

(a)

(b)

customs union

(c)

common market

(d)

monetary union

40. Which of the following statements is not correct?

(a)

Both the IMF & IBRD have headquarters in Washington

(b)

Both IMF & IBRD are the Constituent organizations of United Nations Organization

(c)

IBRD is also called World Bank

(d)

India's vote share in the International Monetary Fund is 10%

41. The tax possesses the following characteristics

(a)

Compulsory

(b)

No quid pro quo

(c)

Failure to pay is offence

(d)

All the above

42. The primary purpose of deficit financing is

(a)

Economic development

(b)

Economic stability

(c)

Economic equality

(d)

Employment generation

43. 'Public finance' includes __________ major sub divisions.

(a)

Three

(b)

Two

(c)

Four

(d)

Five

44. Which of the following is the most comprehensive measure of budgetary imbalances?

(a)

Fiscal Deficit

(b)

Revenue Deficit

(c)

Primary Deficit

(d)

All of the above

45. Match the correct codes

 1 Canon of Ability i The method of tax collection and the timing of the tax payment should suit the convenience of the people. 2 Canon of Certainty ii The Government has to spend money for collecting taxes, for example, salaries are given to the persons who are responsible for collecting taxes. 3 Canon of Convenience iii The Government must ensure that there is no uncertainty regarding the rate of tax or the time of payment. 4 Canon of Economy iv The Government should impose tax in such a way that the people have to pay taxes according to their ability.
(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) – (iii) (4) – (iv)

46. Who developed Material Balance Models?

(a)

Thomas and Picardy

(b)

AlenKneese and R.Y. Ayres

(c)

Joan Robinson and J.M. Keynes

(d)

Joseph Stiglitz and Edward Chamberiin'

47. The common source of outdoor air pollution is caused by combustion processes from the following ______________

(a)

Heating and cooking

(b)

(c)

Motor vehicles

(d)

All the above

48. ____________ is the current increase in temperature of earth's surface.

(a)

Land

(b)

Global warming

(c)

Climate change

(d)

Air

49. ____________ is one of the causes of production externalities.

(a)

Factory emission

(b)

Beehive pollination

(c)

Public safety

(d)

Noise pollution

50. Pure public goods pose a ________________?

(a)

free-rider problem

(b)

environment tax

(c)

environment fee

(d)

none of the above

51. Which is not the feature of economic growth?

(a)

Concerned with developed nations

(b)

(c)

Concerned with quantitative aspect

(d)

Wider concept

52. Which of the following plan has focused on the agriculture and rural economy

(a)

People's Plan

(b)

Bombay Plan

(c)

Gandhian Plan

(d)

Vishveshwarya Plan

53. Planning in India is

(a)

Centralized planning

(b)

Democratic planning

(c)

Partial Planning

(d)

Indicative planning

54. ________________ are/is the Chairperson of NITI Aayog and ___________ will be Ex-officio members.

(a)

The Prime Minister and The Finance Commission

(b)

The Prime Minister and Union Ministers

(c)

The Finance and Union Ministers

(d)

Union Ministers and The Prime Minister

55. Consider the following statements with regards to ‘Economic Planning’:
1. The concept of Economic planning in India is derived from Russia (the then USSR)
2. It is a process in which limited natural resources are used skillfully so that the desired goals can be achieved.
3. It derives its objectives and social premises from the fundamental rights enshrined in the constitution.
Select the correct answer from the given codes below:

(a)

1 and 2

(b)

2 only

(c)

1 and 2

(d)

1, 2, and 3

56. The value of the coefficient of correlation r lies between

(a)

0 and 1

(b)

-1 and 0

(c)

-1 and +1

(d)

-0.5 and +0.5

57. A process by which we estimate the value of dependent variable on the basis of one or more independent variables is called

(a)

Correlation

(b)

Regression

(c)

Residual

(d)

Slope

58. Which of the following is not a kind of correlation based on number of variables?

(a)

Simple Correlation

(b)

Multiple Correlation

(c)

Partial Correlation

(d)

Rank Correlation

59. A statistic is:

(a)

a sample characteristic

(b)

a population characteristic

(c)

unknown

(d)

normally distributed

60. __________ is a coefficient to measure the degree of relationship between two sets of data by using ranks of observations

(a)

Pearson’s Correlation Coefficient

(b)

Rank Correlation Coefficient

(c)

Partial Correlation

(d)

Multiple Correlation

61. Part - B

35 x 2 = 70
62. Define the term ‘Inflation

63. Who is the controll authority of socialistic economy?

64. What is Price Mechanism?

65. What are flow variables?

66. Expand the given equation :Y = C + I + G + (X-M).

67. Trace the relationship between GNP and NNP

68. Give an example of how real GDP could be increased even though no more output is produced

69. What is the features of GDPMP?

70. Give short note on frictional unemployment

71. What is effective demand ?

72. What are the assumptions of Say's Law of Market?

73. Mention few names of Classical theor

74. What is Aggregate demand?

75. Define average propensity to save (APS).

76. Write a short note on Dynamic multiplier.

77. Write the channel of effects of accelerator.

78. What is Stagflation?

79. Write about Money Increases Productivity of Capital in short.

80. Explain the term “Demand for Money”

81. What is credit creation?

82. Write a short on - Traveler’s Cheque.

83. Expansionary policy – Define.

84. State any two merits of trade.

85. Define - Favourable BOT

86. Write about the Supplementary Financing Facility of IMF.

87. Write a short note on zero based budget.

88. What is budget?

89. What do you mean by ecosystem?

90. Draw the chart depicting classification of externalities

91. Mention the indicators of development.

92. What do you mean by development?

93. Write a note on “Sarvodaya Plan”

94. What are the kinds of data?

95. What is Econometrics?

96. State the meaning of different types of data.

97. Part - C

25 x 3 = 75
98. Describe the different types of economic systems.

99. Draw the flow chart of four sector model.

100. Write a short note on per capita income

101. What are the items should not be included while estimating national income through income method?

102. Explain about aggregate supply with the help of diagram.

103. Distinguish between Fictional and Structural unemployment.

104. Specify the limitations of the multiplier.

105. Given the table, write the proposition for consumptions function (value in crores).

106. What are the determinants of money supply?

107. What are the components of Money Supply?

108. Bring out the methods of credit control

109. List out the functions of Commercial Banks

110. What are import quotas?

111. What are the major sectors benefited from FDI in India?

112. Discuss the elements of Automatic Correction in trade disequilibrium.

113. Mention any three lending programmes of IMF.

114. List the important objectives of IMF

115. State any three characteristics of taxation.

116. What are external public debt?

117. Specify the meaning of material balance principle

118. Explain the types of water pollution.

119. What are the non-economic factors determining development?

120. Write a short note on former Indian Planning Commission.

121. Mention the uses of Regression Analysis

122. Draw the various kinds of scatter diagram.

123. Part - D

10 x 5 = 50
124. Explain the merits of Mixed Economy.

125. Discuss the method measuring the National Income by Income Method.

126. Draw the diagram for Aggregate supply curves diagram.

127. Illustrate the working of Multiplier

128. Use the table below (for a simple economy with no foreign sector or government) to answer the questions that follow.

 (1) Income   (Y) (2) Consumption       (C) (3) Investment      (l) (4) Aggregate Demand AD=C+1 =Column(2) +Column(3) 0 30 (a) 50 300 300 20 (b) 400 (c) 20 410 500 480 20 500 600 (d) 20 (e)

Fill in the missing numbers in the spaces marked (a)-(c). Determine the consumption function, and use the result to fill in the remaining missing numbers (d)-(e). (f) Determine the equilibrium output level.

129. Compare and contrast RBI and other Commercial Banks.

130. Explain the any two types of Exchange Rates

131. Distinguish between Balanced and Unbalanced Budget

132. Discuss the Non- Economic Factors economic development.

133. The height of a child increases at a rate given in the table below. Fit the straight line using the method of least-square and calculate the average increase and the standard error of estimate.

 Month 1 2 3 4 5 6 7 8 9 10 Height: 52.5 58.7 65 70.2 75.4 81.1 87.2 95.5 102.2 108.4