12th Standard Economics English Medium Important 1 Mark Creative Questions (New Syllabus) 2020

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Questions:

Multiple Choice Question

49 x 1 = 49

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

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

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

(a)

public purse

(b)

tax

(c)

fees

(d)

public revenue

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

The specific objectives of monetary policy are

(a)

Neutrality of money

(b)

Tax control

(c)

Stability of exchange rates

(d)

Price stability

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

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

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)

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

10.

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.

11.

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

12.

Assertion: In developing countries like India, the nature of unemployment is different from that of developed countries.
Reason: 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

13.

Say’s law of market says:

(a)

Supply creates its own demand

(b)

Demand creates supply

(c)

Income generates demand

(d)

Savings create demand

14.

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

(a)

(b)

(c)

(d)

15.

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

(a)

political planning

(b)

industrial planning

(c)

economic planning

(d)

democratic planning

16.

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

17.

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

18.

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

19.

________ data already exist in some form: published or unpublished in an identifiable secondary source.

(a)

primary

(b)

vital

(c)

raw

(d)

secondary

20.

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

21.

Assertion: When Indian national income is expressed in terms of US$, the former looks very low.
Reason: 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

22.

(X – M) is net export which can be_______?

(a)

positive or negative

(b)

positive

(c)

negative

(d)

none of the above

23.

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

24.

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

25.

Assertion: The multiplier is directly related to MPC and inversely related to MPS.
Reason: 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

26.

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

27.

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

28.

Pure public goods pose a ________________?

(a)

free-rider problem

(b)

environment tax

(c)

environment fee

(d)

none of the above

29.

Identify the odd one out.

(a)

IMF

(b)

IBRD

(c)

WTO

(d)

RBI

30.

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.

31.

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

(a)

positive

(b)

negative

(c)

zero

(d)

infinite

32.

From the households sectors receives the income?

(a)

households sector

(b)

government expenditure

(c)

external sector

(d)

firm sector

33.

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

(a)

Nitrogen oxides

(b)

Sulfur oxides

(c)

Acid rain

(d)

Ammonia

34.

SDR stands for __________.

(a)

Special Drawing Resource

(b)

Special Drawing Rights

(c)

Special Daily Rights

(d)

Special Detail Rights

35.

"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

36.

Financial operation of the government _____________

(a)

Treasury

(b)

Bills of payment

(c)

Bills of exchange

(d)

All the above

37.

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

38.

_______ includes both visible and invisible items.

(a)

Balance of payment

(b)

Balance of Trade

(c)

Foreign Trade

(d)

None of these

39.

The average propensity to save is measured by _________

(a)

C/Y

(b)

C x Y

(c)

S/Y

(d)

C + Y

40.

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

(a)

Consumption expenditure

(b)

Government expenditure

(c)

Distribution expenditure

(d)

Investment expenditure

41.

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

(a)

Social Accounting

(b)

Statistics

(c)

Capital Gains

(d)

None of these

42.

___________ was set up in July 1982.

(a)

ARDC

(b)

NABARD

(c)

ICICI

(d)

Indian Bank

43.

The concept__________ refers to the structural changes towards betterment

(a)

Economic fluctuation

(b)

Economic growth

(c)

Economic development

(d)

None of these

44.

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

45.

Rate of interest is a stock

(a)

Socialism

(b)

Keynesianism

(c)

Classicism

(d)

All the above

46.

Finance is the life blood of all economic activities such as________

(a)

trade

(b)

commerce

(c)

agriculture

(d)

all the above

47.

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'

48.

When prices are raised drastically(rapidly) we call it

(a)

Galloping inflation

(b)

Mild inflation

(c)

Hyper Inflation

(d)

Deflation

49.

Micro means __________.

(a)

Large

(b)

Big

(c)

Small

(d)

Both 'a' and 'b'

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Answers Key:

Multiple Choice Question

49 x 1 = 49

(d)
None of the above

(a)
Buying bonds on the open market

(a)
public purse

(d)
Allocating funds directly to the farmers for agricultural development

(b)
Tax control

(d)
Traveller’s Cheque

(a)
IMF & International Bank for Reconstruction and Development (IBRD)

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

(a)
5,821.5 million

10.

(d)
low per capita income creates low savings that keep incomes low.

11.

(d)
P is considered as an active factor

12.

(b)
Both A and R are true but R is not the correct explanation of A

13.

(a)
Supply creates its own demand

14.

(b)
P

15.

16.

(a)
Applied Economics

17.

(a)
The traditional approach and the new welfare oriented approach

18.

(d)
III and IV are only incorrect

19.

(d)
secondary

20.

(b)
Adam Smith

21.

(b)
Both (A) and (R) are true, but (R) is not the correct explanation of (A).

22.

(a)
positive or negative

23.

(b)
comparative advantage

24.

(d)
A low marginal propensity to save

25.

(b)
Both (A) and (R) are true, but (R) is not the correct explanation of (A)

26.

(a)
domestic currency is exchanged for another currency

27.

(b)
Profitable

28.

(a)
free-rider problem

29.

(d)
RBI

30.

(d)
The factors of production are owned by households.

31.

(a)
positive

32.

(d)
firm sector

33.

(d)
Ammonia

34.

(b)
Special Drawing Rights

35.

(b)
Rudi Dorbush

36.

(a)
Treasury

37.

38.

(a)
Balance of payment

39.

40.

(a)
Consumption expenditure

41.

(a)
Social Accounting

42.

(b)
NABARD

43.

44.

(b)
NNP at Market Prices - Indirect taxes + Subsidies.

45.

46.

(d)
all the above

47.

(a)
Quantity theory of money

48.

49.

12th Standard Economics English Medium Important 1 Mark Creative Questions (New Syllabus) 2020

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