CBSE 12 Economics Question Paper-2020 Set-4 by Pavan | Practice Test to Test Your Knowledge
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CBSE 12 Economics Question Paper-2020 Set-4

CBSE 12 Economics Question Paper-2020 Set-4

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2020 Set-4, helping students understand exam trends and practice real paper format

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

Duration

30 min

Questions

30

Marking

Negative

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Questions Preview

Two components of money supply are _ and ___.

A
Currency and Demand deposits
B
Currency and Bank deposits
C
Bank deposits and Credit cards
D
Currency and Savings deposits

The main aim of monetary policy is _____.

A
to bring price stability in the economy
B
employment generation in the country
C
to increase trade surplus
D
to generate greater tax revenue

If income rises from 50,000 to 60,000, consumption increases from 40,000 to 48,000. What is the value of Marginal Propensity to Consume (MPC)?

A
0.80
B
0.20
C
0.10
D
0.90

Loans offered by commercial banks ______ the money supply in the economy.

A
increase
B
decrease

2,000 note lying in the wallet of Rohini, a student, is an example of ______ variable.

A
stock
B
flow

State whether the given statement is true or false: 'Unexpected obsolescence is a component of depreciation.'

A
True
B
False

Define intermediate consumption.

A
The value of goods and services used in the production process
B
The final goods consumed by households
C
Goods that are consumed without being produced
D
Capital goods used for manufacturing

The sum of factor payments is equal to _.

A
Domestic Income
B
National Income
C
Per Capita Real Income
D
Per Capita Nominal Income

State whether the given statement is true or false: 'Expenditure on Ujjwala Yojana launched by the Government is an example of capital expenditure.'

A
True
B
False

Define full employment.

A
The situation where everyone in the workforce is employed without inflationary pressure
B
When only skilled workers are employed
C
When the government guarantees jobs to all citizens
D
A scenario where unemployment is more than 5% of the population

What is the primary objective of fiscal policy?

A
To control inflation
B
To stabilize currency
C
To regulate money supply
D
To influence aggregate demand

If the value of Average Propensity to Consume (APC) is 0.8 and National Income is `4,000 crore, the value of savings will be ______.

A
`100 crores`
B
`200 crores`
C
`800 crores`
D
`500 crores`

What is the difference between Gross Domestic Product (GDP) and Gross National Product (GNP)?

A
GDP includes income earned by residents within the country, GNP includes income earned by citizens abroad.
B
GNP includes taxes and subsidies, while GDP does not.
C
GDP is used for domestic policy making, while GNP is used for international trade.
D
GNP measures government expenditure, while GDP measures consumer spending.

Which of the following is a characteristic of a mixed economy?

A
The government controls all production and distribution
B
Private and public sectors coexist
C
There is no private ownership
D
Only the market determines production and consumption

Which of the following is NOT an example of capital expenditure in the government budget?

A
Construction of highways
B
Purchase of defense equipment
C
Salaries of government employees
D
Building hospitals

What does the term 'inflation' refer to?

A
A rise in the general price level of goods and services
B
A decrease in the purchasing power of money
C
The increase in GDP over time
D
A stable increase in the value of currency

What is the balance of payments?

A
A record of all economic transactions between residents of a country and the rest of the world
B
The government's annual budget
C
The total imports and exports of a country
D
A measure of a country's internal economic activities

What is the purpose of exchange rate policies?

A
To control inflation and stabilize the economy
B
To influence the demand and supply of foreign exchange
C
To regulate the value of government bonds
D
To increase foreign direct investment

What is the primary aim of taxation?

A
To redistribute wealth
B
To raise revenue for government spending
C
To control inflation
D
To reduce the national debt

Which of the following is a direct tax?

A
Income tax
B
Sales tax
C
Excise duty
D
Customs duty

What is the role of the central bank in a country's economy?

A
To regulate the supply of money and credit
B
To provide loans to private businesses
C
To collect taxes and spend on infrastructure
D
To determine interest rates in the economy

What does the term 'current account' in the balance of payments refer to?

A
Trade in goods and services, income, and current transfers
B
All international loans and financial investments
C
Foreign direct investment and capital flows
D
Government expenditure on foreign projects

Which of the following is an example of a non-tariff barrier?

A
Import quota
B
Customs duties
C
Value-added tax (VAT)
D
Excise duties

What is the main purpose of public debt?

A
To finance government expenditure
B
To control inflation
C
To redistribute income in the economy
D
To reduce the national deficit

What is the primary function of commercial banks?

A
To issue currency
B
To collect taxes for the government
C
To accept deposits and provide loans
D
To control interest rates in the economy

Which of the following is NOT an example of an external debt?

A
Loans from foreign governments
B
Bonds issued in foreign markets
C
Bank loans from international banks
D
Government borrowing from domestic banks

What does the term 'deflation' refer to?

A
A decrease in the general price level of goods and services
B
An increase in the value of currency
C
A rise in unemployment rates
D
A stable price level in the economy

What is the formula for calculating the GDP deflator?

A
Nominal GDP / Real GDP * 100
B
Real GDP / Nominal GDP * 100
C
National Income / Gross Domestic Product * 100
D
Exports / Imports * 100

Which of the following is an example of capital expenditure?

A
Building roads and bridges
B
Government subsidies to industries
C
Interest payments on national debt
D
Salaries of government employees

Which of the following is an example of a direct tax?

A
Income tax
B
Sales tax
C
Customs duty
D
Value-added tax