CBSE 12 Economics Question Paper-2020 Set-3 by Pavan | Practice Test to Test Your Knowledge
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  2. Practice Tests
  3. CBSE 12 Economics Question Paper-2020 Set-3
CBSE 12 Economics Question Paper-2020 Set-3

CBSE 12 Economics Question Paper-2020 Set-3

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2020 Set-3, helping students understand exam trends and practice real paper format

2025-08-08
Pavan Pavan
CBSE Class 12 Economics 2020 Grade 12

Duration

30 min

Questions

30

Marking

Negative

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Questions Preview

If the entire additional income of an economy is consumed, the value of investment multiplier will be ___.

A
zero (0)
B
not defined (∞)
C
one (1)
D
ten (10)

GNP deflator is represented by which of the following formulae?

A
100 * GNP at current prices / GNP at constant prices
B
100 * GNP at constant prices / GNP at current prices
C
100 * Inflation rate / GNP at current prices
D
100 * GNP at current prices / Inflation rate

A car purchased by a household is a ___.

A
single-use capital good
B
single-use consumer good
C
durable consumer good
D
semi-durable consumer good

State whether the following statement is true or false: 'To reduce inflation, the Central Bank should reduce Cash Reserve Ratio (CRR).'

A
True
B
False

Which of the following is the correct agent and adviser to the Government of India?

A
Central Bank of India
B
Finance Minister
C
RBI
D
Planning Commission

What is the investment multiplier if the entire additional income is consumed?

A
1
B
2
C
infinity
D
zero

Which of the following is an example of a commercial source of energy?

A
Coal
B
Firewood
C
Agricultural waste
D
Dried dung cakes

The GNP deflator is calculated using the formula:

A
100 * Nominal GDP / Real GDP
B
100 * Real GDP / Nominal GDP
C
100 * Inflation rate / GDP
D
100 * Nominal GDP / Inflation rate

Which of the following statements is true about a country’s fiscal deficit?

A
It is always equal to the revenue deficit
B
It indicates the total borrowings of the government
C
It is the sum of the revenue and capital expenditures
D
It is always less than the total tax revenue

Which of the following is not an advantage of organic farming?

A
Cheap inputs
B
Attractive returns on investment
C
Greater possibilities for import
D
High nutritional value

State the correct agent for regulating monetary policy in India.

A
Reserve Bank of India
B
Finance Ministry
C
Indian Government
D
NITI Aayog

In which year did the Indian Government make education free and compulsory for children aged 6-14 years?

A
2001
B
2009
C
2003
D
2007

Which organization regulates the health sector in India?

A
ICMR
B
UGC
C
AICTE
D
RBI

Which of the following statements about inflation is true?

A
Inflation occurs when aggregate demand is higher than aggregate supply
B
Inflation can be caused by an increase in government spending
C
Inflation leads to deflation
D
Inflation reduces the purchasing power of money

If the government purchases a new car, it is an example of ___.

A
Public consumption
B
Government expenditure
C
Private consumption
D
Capital formation

What is the role of the government in the economy?

A
To control inflation
B
To promote free trade
C
To regulate markets and ensure social welfare
D
To reduce taxes

The 'Fiscal Deficit' refers to the difference between ___.

A
Total expenditure and total revenue of the government
B
Government income and government expenditure
C
Export and import revenue
D
Government investment and savings

The 'Gross Domestic Product' measures ___.

A
The total income generated within a country
B
The total output of a country
C
The total wealth of a country
D
The inflation rate

What is the primary objective of monetary policy?

A
To control inflation and stabilize the currency
B
To promote foreign trade
C
To boost government revenue
D
To increase taxes

Which of the following is considered a fiscal tool?

A
Interest rate changes
B
Tax rates
C
Money supply
D
Exchange rates

Which of the following economic indicators measures the total market value of all goods and services produced within a country in a given time period?

A
GDP
B
Inflation
C
Unemployment rate
D
Consumer price index

What does the 'Marginal Propensity to Consume (MPC)' represent?

A
The increase in consumption resulting from an increase in income
B
The total consumption at any given income level
C
The ratio of savings to income
D
The total expenditure by the government

Which of the following is NOT a characteristic of a developed economy?

A
High income levels
B
Low levels of industrialization
C
High standard of living
D
Advanced technological infrastructure

What is the term 'Liquidity Trap' used to describe?

A
A situation where monetary policy is ineffective
B
A situation where the government increases spending
C
A market condition where demand for money increases
D
A situation where inflation rises uncontrollably

Which of the following is a monetary policy tool?

A
Interest rate adjustments
B
Government spending
C
Tax cuts
D
Wage controls

What is the main purpose of the 'Reserve Bank of India (RBI)'?

A
To regulate the Indian stock market
B
To regulate the banking system
C
To collect taxes
D
To monitor government expenditure

Which of the following is true about 'inflation targeting'?

A
It focuses on controlling the money supply
B
It aims to keep inflation within a target range
C
It involves increasing government spending
D
It targets reducing unemployment rates

Which of the following is a primary goal of fiscal policy?

A
To control inflation
B
To regulate wages
C
To manage the government’s tax policies
D
To maintain equilibrium in the economy

Which organization is responsible for managing inflation in India?

A
Ministry of Finance
B
RBI
C
SEBI
D
NITI Aayog

Which of the following is an example of a durable consumer good?

A
Furniture
B
Clothing
C
Food items
D
Beverages