CBSE 12 Economics Question Paper-2019 by Pavan | Practice Test to Test Your Knowledge
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  3. CBSE 12 Economics Question Paper-2019
CBSE 12 Economics Question Paper-2019

CBSE 12 Economics Question Paper-2019

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2019, helping students understand exam trends and practice real paper format

2025-08-06
Pavan Pavan
CBSE Class 12 Economics 2019 Grade 12

Duration

30 min

Questions

28

Marking

Negative

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State the reason why Total Variable Cost (TVC) curve and Total Cost (TC) curve are parallel to each other.

A
Because both TVC and TC increase with the same slope.
B
Because both curves represent fixed costs.
C
Because total cost is the sum of fixed and variable costs.
D
Because fixed costs remain constant at all levels of output.

If the Total Revenue of a firm increases by 45,000 due to an increase in sale of Good X from 50 units to 65 units, then marginal revenue will be?

A
3,000
B
1,500
C
45,000
D
4,500

A Production Possibility Curve would be ______ curve if all the available resources in an economy are equally efficient to produce both the goods.

A
a straight line
B
concave to origin
C
convex to origin
D
upward sloping

Which of the following is a variable cost?

A
Salary of permanent staff
B
License fees
C
Rent of premises
D
Wages

Distinguish between Normative Economics and Positive Economics, with suitable examples.

A
Normative economics is about value judgments while positive economics deals with facts.
B
Normative economics is about facts while positive economics deals with value judgments.
C
Both are about analyzing data.
D
Normative economics deals with laws of economics.

Why do central problems arise? Discuss briefly.

A
Due to scarcity of resources.
B
Because of a lack of government intervention.
C
Due to unlimited human wants.
D
Because of uneven distribution of wealth.

Calculate and comment on nature of price elasticity of demand, if, with a rise in price of Good X from 10 to 12, the quantity demanded falls by 40%.

A
Elastic
B
Inelastic
C
Unitary
D
Perfectly elastic

'As the price of a good falls, the resulting increased purchasing power may be a reason for increase in quantity demanded'. Do you agree with the given statement? Give reason for your answer.

A
Yes, because it increases real income.
B
No, because it leads to a decrease in demand.
C
Yes, because it decreases the total expenditure.
D
No, because purchasing power has no impact on demand.

Elaborate the price discrimination feature of monopoly.

A
Monopoly sets different prices for different customers based on willingness to pay.
B
Monopoly charges a single price for all customers.
C
Monopoly charges lower prices for high-income consumers.
D
Monopoly does not practice price discrimination.

Why is the number of firms limited in an oligopoly market? Explain.

A
Because of high entry barriers and market control by a few firms.
B
Because firms in an oligopoly face little competition.
C
Because of price wars among many firms.
D
Because of government intervention.

Explain the chain effect in the market for Good X, if: a) increase in market demand is less than the decrease in market supply.

A
The price will rise and quantity will fall.
B
The price will fall and quantity will remain the same.
C
The price will rise and quantity will remain the same.
D
The price will remain unchanged and quantity will rise.

Examine the effects of the following on the supply curve of a Good X, using suitable diagram: a) fall in own price of Good X.

A
The supply curve will shift leftward.
B
The supply curve will shift rightward.
C
The supply curve will remain unchanged.
D
The supply curve will become vertical.

What is money supply?

A
The total amount of money in circulation in an economy.
B
The total amount of gold reserves in a country.
C
The total amount of government bonds in circulation.
D
The total amount of credit available in an economy.

What is meant by Reverse Repo Rate?

A
The rate at which the central bank borrows money from commercial banks.
B
The rate at which the central bank lends money to commercial banks.
C
The rate at which the government borrows money.
D
The rate at which commercial banks lend money to the central bank.

Which of the following is a revenue receipt of the government?

A
Funds raised by the government by issuing National Saving Certificates.
B
Sale of 40% shares of a public sector undertaking to a private enterprise.
C
Profits of LIC, a public enterprise.
D
Amount borrowed from Japan for construction of Bullet Train.

Identify which of the following statements is true?

A
Fiscal deficit is difference between planned revenue expenditure and planned revenue receipts.
B
Fiscal deficit is difference between total planned expenditure and total planned receipts.
C
Primary deficit is the difference between total planned receipt and interest payments.
D
Fiscal deficit is the sum of primary deficit and interest payment.

Estimate the value of Aggregate Demand in an economy if: a) Autonomous Investment (I) = 100 Crore, b) Marginal Propensity to Save = 0.2, c) Level of Income (Y) = 4,000 crores, d) Autonomous Consumption Expenditure (c) = 50 Crore.

A
4,250 Crore
B
4,500 Crore
C
4,000 Crore
D
5,000 Crore

Explain how the level of effective demand is attained in an economy if, Aggregate Demand is more than the Aggregate Supply.

A
When AD > AS, producers increase their output to meet the demand.
B
When AD > AS, producers decrease output, leading to higher prices.
C
When AD > AS, the economy faces a recession.
D
When AD > AS, the central bank intervenes by increasing interest rates.

What is meant by problem of double counting? How this problem can be avoided?

A
Double counting occurs when goods are counted more than once; this can be avoided by using value-added method.
B
Double counting occurs when the same good is counted twice at different stages; avoid by summing only final goods.
C
Double counting happens due to inflation; avoid by adjusting for price changes.
D
Double counting is when income is counted twice; this can be avoided by adjusting wages.

Elaborate ‘economic growth’ as an objective of government budget.

A
Economic growth refers to the increase in the total income of a country.
B
Economic growth focuses on reducing inflation and unemployment.
C
Economic growth is aimed at reducing the income inequality.
D
Economic growth is the increase in the number of industries in a country.

How the following tools can be used for credit control by the central bank in an economy: a) Open Market Operations b) Margin Requirements.

A
Open Market Operations involve buying and selling government bonds to control money supply.
B
Margin Requirements control the minimum amount of money banks must hold in reserve.
C
Both Open Market Operations and Margin Requirements are used to control inflation.
D
Both tools control the exchange rates between different currencies.

State any two precautions that must be taken into consideration while estimating national income by value added method.

A
Avoid double counting and ensure that only final goods are included.
B
Include both intermediate and final goods in the calculation.
C
Consider the total amount of savings and exports.
D
Ensure that taxes are excluded from the calculation.

How an initial increase in investment affects the level of final income of the economy? Show its working with a suitable numerical example.

A
An increase in investment leads to an increase in the final income by the multiplier effect.
B
An increase in investment reduces the final income due to inflationary pressures.
C
An increase in investment has no effect on the final income of the economy.
D
An increase in investment only affects the savings rate of the economy.

a) According to recent media reports: ‘USA has accused China of currency devaluation to promote its exports’. In the light of the given media report comment, how exports can be promoted through Currency devaluation? b) What is meant by Current Account Deficit (CAD) and Current Account Surplus (CAS)? State their significance.

A
Currency devaluation makes a country's goods cheaper for foreign buyers, boosting exports.
B
Currency devaluation increases the cost of imports, making domestic goods more competitive.
C
Currency devaluation reduces inflation, making exports more attractive.
D
Currency devaluation has no impact on exports.

Differentiate between National Income at Current Prices and National Income at Constant Prices. Which of the two presents a better view of the economic growth of the economy and why?

A
National Income at Current Prices includes the impact of inflation, while National Income at Constant Prices excludes inflation, offering a clearer view of real growth.
B
National Income at Constant Prices includes the impact of inflation, while National Income at Current Prices excludes inflation.
C
National Income at Constant Prices provides a higher figure compared to National Income at Current Prices.
D
Both methods give the same result, and neither is better for measuring economic growth.

Explain the concept of Producer's Equilibrium.

A
Producer's equilibrium occurs when the marginal cost equals marginal revenue.
B
Producer's equilibrium occurs when the total cost equals total revenue.
C
Producer's equilibrium occurs when the producer maximizes profit.
D
Producer's equilibrium occurs when the market is in perfect competition.

State the two main reasons behind the economic growth objective in government budgets.

A
Increase in income and employment opportunities.
B
Increase in government spending and reduction in taxes.
C
Increase in investment and consumption.
D
Decrease in public debt and private savings.

Discuss the concept of the circular flow of income in a two-sector economy.

A
The circular flow of income represents the movement of money between producers and consumers.
B
The circular flow of income represents the movement of goods and services between two countries.
C
The circular flow of income represents the flow of capital within a single industry.
D
The circular flow of income includes government intervention and international trade.