CBSE 12 Economics Question Paper-2020 Set-5 by Pavan | Practice Test to Test Your Knowledge
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  3. CBSE 12 Economics Question Paper-2020 Set-5
CBSE 12 Economics Question Paper-2020 Set-5

CBSE 12 Economics Question Paper-2020 Set-5

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2022 Set-5, helping students understand exam trends and practice real paper format

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

Duration

30 min

Questions

30

Marking

Negative

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Questions Preview

_ deficit includes interest payment by the Government on the past loans.

A
Fiscal deficit
B
Revenue deficit
C
Primary deficit
D
Budget deficit

To reduce credit availability in the economy, the Central Bank may ______.

A
Buy securities in the open market
B
Sell securities in the open market
C
Reduce reserve ratio
D
Reduce repo rate

State, whether the following statement is true or false: ‘Purchase of machinery by a producer is an intermediate good.’

A
True
B
False

Which of the following is not used as a strategy for Sustainable Development?

A
Use of bio-gas
B
Use of solar power
C
Use of thermal power
D
Use of hydel power

Maternal Mortality Rate is high in __.

A
China
B
Pakistan

_ is an example of a Public Good.

A
National Defence
B
Private Health Insurance
C
Freshwater
D
Private Education

The GDP of a country measures __.

A
The total income of the country
B
The wealth of the country
C
The total population
D
The number of companies in the country

A high rate of inflation typically leads to __.

A
A decrease in purchasing power
B
An increase in the value of money
C
An increase in the cost of living
D
A decrease in the cost of living

The term ‘Monetary Policy’ refers to __.

A
The management of the money supply and interest rates
B
The management of government expenditure
C
The collection of taxes by the government
D
The creation of public sector jobs

The largest component of Gross Domestic Product (GDP) is __.

A
Consumption
B
Investment
C
Government Spending
D
Net Exports

Which of the following is a tool of fiscal policy?

A
Changing interest rates
B
Taxation and government spending
C
The money supply
D
Control of exchange rates

Inflation is caused by __.

A
An increase in aggregate demand
B
A decrease in aggregate demand
C
A decrease in the money supply
D
A decrease in government spending

Which of the following is a short-run objective of monetary policy?

A
Reducing long-term inflation expectations
B
Maintaining financial market stability
C
Achieving a high growth rate of money supply
D
Promoting national wealth

Which of the following is an example of fiscal policy?

A
Cutting taxes to stimulate economic growth
B
Adjusting the money supply
C
Lowering interest rates to encourage spending
D
Regulating foreign exchange rates

What does the term ‘aggregate demand’ refer to?

A
The total demand for goods and services in an economy
B
The demand for specific products in the market
C
The total income earned by consumers
D
The total investment in the economy

The term ‘microeconomics’ refers to the study of __.

A
The behavior of individual consumers and firms
B
The overall economy
C
Government policies on national issues
D
The national income and employment levels

Which of the following is considered a private good?

A
National defense
B
Clean air
C
Food
D
Public parks

The GDP deflator is used to measure __.

A
The change in the prices of all goods and services
B
The overall employment rate
C
The growth rate of the economy
D
The changes in government expenditure

An increase in government spending will lead to __.

A
An increase in aggregate demand
B
A decrease in aggregate demand
C
A decrease in inflation
D
An increase in unemployment

Which of the following is NOT a function of money?

A
Medium of exchange
B
Store of value
C
Measure of economic policy
D
Unit of account

Which of the following is an example of monetary policy?

A
Changing the interest rate
B
Setting government taxes
C
Government spending on infrastructure
D
Subsidies on food

The 'law of demand' states that __.

A
As the price of a good rises, the demand for it decreases
B
As the price of a good rises, the demand for it increases
C
The supply of a good increases with a higher price
D
Demand for goods is independent of price

What is a characteristic of a perfectly competitive market?

A
Many buyers and sellers, homogeneous products
B
A few large sellers dominate the market
C
Barriers to entry are high
D
There is only one seller

Which of the following is a consequence of inflation?

A
Decreased purchasing power of money
B
Increase in the real value of wages
C
Decreased prices of goods
D
Decrease in the demand for money

Which of the following is considered a macroeconomic variable?

A
National unemployment rate
B
Price of a specific product
C
Income of a specific individual
D
Total production of a firm

Which of the following describes the law of supply?

A
As price increases, supply increases
B
As price increases, demand decreases
C
As price decreases, supply increases
D
Supply does not depend on price

Which of the following is a key feature of a monopoly?

A
One seller and many buyers
B
Many sellers and one buyer
C
Many sellers and many buyers
D
One buyer and one seller

Which of the following is an example of a 'public good'?

A
National Defence
B
Private Education
C
Freshwater
D
Private Health Care

The 'marginal propensity to consume' (MPC) refers to __.

A
The change in consumption resulting from a change in income
B
The total amount spent by households on goods
C
The proportion of income saved by households
D
The total wealth accumulated by households

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

A
Private ownership of resources
B
Centralized control of production
C
Decentralized decision making
D
Supply and demand determine prices