CBSE 12 Economics Question Paper-2022 Set-1 by Pavan | Practice Test to Test Your Knowledge
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  3. CBSE 12 Economics Question Paper-2022 Set-1
CBSE 12 Economics Question Paper-2022 Set-1

CBSE 12 Economics Question Paper-2022 Set-1

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2022 Set-1, helping students understand exam trends and practice real paper format

2025-08-14
Pavan Pavan
CBSE Class 12 Economics 2022 Grade 12

Duration

25 min

Questions

23

Marking

Negative

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Questions Preview

Using a suitable example, distinguish between positive externalities and negative externalities.

A
Positive externalities are benefits to a third party from an economic transaction, while negative externalities are costs to a third party.
B
Positive externalities are costs to a third party, while negative externalities are benefits to a third party.
C
Both are costs incurred by the parties involved in a transaction.
D
Both are benefits received by the parties involved in a transaction.

Justify the following statement with valid argument: 'At higher levels of income people generally have lower Marginal Propensity to Consume (MPC).'

A
At higher income levels, people tend to save more and spend a smaller proportion of their additional income, leading to a lower MPC.
B
At higher income levels, people tend to spend more and save less, leading to a higher MPC.
C
MPC is always constant, regardless of the income level.
D
MPC is a measure of a person's total income.

State any two harmful effects of Global warming.

A
Increased agricultural productivity and more stable weather patterns.
B
Rise in sea levels and increased frequency of extreme weather events.
C
Lower global temperatures and reduced melting of polar ice caps.
D
Decreased risk of infectious diseases and improved air quality.

Calculate equilibrium level of income for a hypothetical economy, for which it is given that: (i) Autonomous Investments (I₀) = ₹ 2,500 crores, and (ii) Consumption Function; C = 1000 + 0.8Y where C = Consumption and Y = Income

A
₹17,500 crores
B
₹15,000 crores
C
₹12,500 crores
D
₹10,000 crores

In any country, as the income rises the composition of infrastructure requirements changes significantly.' Do you agree with the given statement? Support your answer with suitable argument.

A
Yes, as income rises, the demand shifts from basic infrastructure like roads to more advanced infrastructure like high-speed internet and airports.
B
No, infrastructure requirements remain the same regardless of income levels.
C
Yes, but only in developed countries, not in developing countries.
D
No, as income rises, people only demand more of the same type of infrastructure.

Estimate the value of Nominal Gross Domestic Product (GDP) for a hypothetical economy. The values of Real Gross Domestic Product (GDP) and Price Index are given as 500 crores and 125 respectively.

A
₹400 crores
B
₹625 crores
C
₹500 crores
D
₹750 crores

Compare and analyse the health status of India and Sri Lanka, on the basis of any two indicators from the given schedule: Indicators of Health in India in Comparison with other nations, 2015-17.

A
India has a higher Infant Mortality Rate and a higher Under-5 Mortality Rate than Sri Lanka.
B
Sri Lanka has a higher Infant Mortality Rate and a higher Under-5 Mortality Rate than India.
C
Both countries have the same Infant Mortality Rate and Under-5 Mortality Rate.
D
India has a higher percentage of infants immunized (DTP) than Sri Lanka.

Using a hypothetical example, elaborate the working of investment multiplier in an economy.

A
The investment multiplier shows how a change in investment leads to a proportionate change in income, with a higher MPC resulting in a larger multiplier effect.
B
The investment multiplier shows that a change in investment has no effect on total income.
C
The investment multiplier indicates that a change in investment leads to a smaller change in income.
D
The investment multiplier is a measure of total savings in an economy.

From the following data, calculate the value of Gross National Product at Factor Cost (GNPFC): (i) Compensation of Employees: 12,000; (ii) Rent and Interest: 1,120; (iii) Indirect taxes: 1,500; (iv) Profits: 1,100; (v) Depreciation: 210; (vi) Subsidies: (-) 120; (vii) Net Factor Income from Abroad: 1,800; (viii) Mixed Income of Self Employed: 1,300. Amounts are in crores.

A
₹17,020 crores
B
₹16,720 crores
C
₹17,520 crores
D
₹15,000 crores

India has been dealing with the problem of Deficient Demand, since the imposition of Covid lockdown in March 2020'. State and discuss any two monetary policy measures to combat the situation of Deficient Demand in India.

A
Increasing the bank rate and selling government securities in the open market.
B
Decreasing the bank rate and purchasing government securities in the open market.
C
Increasing the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
D
Implementing a higher margin requirement on loans.

In the recent past the Government of India has taken vital steps to revive and popularise Indian System of Medicine (ISM)'. Do you agree with the given statement? Justify your answer with valid reasons.

A
Yes, the government has promoted traditional medicine systems like AYUSH to improve healthcare access and preserve cultural heritage.
B
No, the government has exclusively focused on modern medicine, neglecting traditional systems.
C
Yes, but these steps have not been effective in increasing the popularity of ISM.
D
No, the government has banned the practice of traditional medicine.

State and discuss any two reasons showing slowdown in the Chinese economy.

A
The slowdown is due to increased dependence on real estate and robust industrial production.
B
The slowdown is caused by power shortages, the COVID-19 pandemic, and government regulations on sectors like education and technology.
C
The slowdown is due to a surge in consumer demand and an increase in foreign investment.
D
The slowdown is caused by a significant increase in GDP growth and stable debt levels.

Explain any two measures you would suggest as an economic advisor to China.

A
Increasing government spending on infrastructure and reducing bank lending to stimulate growth.
B
Reducing government intervention and increasing regulations on key sectors.
C
Stabilizing credit growth and directing resources towards high-end manufacturing.
D
Encouraging dependence on the real estate sector and increasing taxes on consumer goods.

What is the primary function of a Consumption Function?

A
To show the relationship between a country's exports and imports.
B
To show the relationship between a household's consumption spending and its disposable income.
C
To calculate the total investment in an economy.
D
To determine the level of government spending.

What does a Marginal Propensity to Save (MPS) of 0.25 indicate?

A
For every additional rupee of income, a person spends ₹0.25.
B
For every additional rupee of income, a person saves ₹0.25.
C
The total savings in the economy are ₹0.25.
D
The total consumption in the economy is ₹0.25.

Which of the following is a stock variable?

A
National Income
B
Investment
C
Wealth
D
Exports

The formula for calculating the investment multiplier is:

A
1 / (1 - MPC)
B
1 / MPC
C
1 / MPS
D
Both A and C

What is the relationship between the investment multiplier (k) and the Marginal Propensity to Consume (MPC)?

A
They are inversely related.
B
They are directly related.
C
There is no relationship between them.
D
The investment multiplier is always smaller than the MPC.

Which of the following is NOT a measure of money supply?

A
M1
B
M2
C
M3
D
M4

What is the formula to calculate Gross National Product at Factor Cost ($GNP_{FC}$) using the income method?

A
Compensation of Employees + Rent and Interest + Profits + Mixed Income of Self-Employed + Net Factor Income from Abroad
B
Compensation of Employees + Rent and Interest + Profits + Mixed Income of Self-Employed - Indirect Taxes
C
GDP at market price - Depreciation + Net Factor Income from Abroad
D
Consumption + Investment + Government Spending + (Exports - Imports)

Which of the following would be included in the national income of a country?

A
Transfer payments like old-age pensions.
B
Income from illegal activities.
C
Compensation of employees paid to residents.
D
Income earned by foreign nationals working abroad.

How can the Reserve Bank of India (RBI) combat a situation of deficient demand?

A
By increasing the Cash Reserve Ratio (CRR).
B
By selling government securities in the open market.
C
By decreasing the bank rate.
D
By raising the margin requirements.

What is the main objective of 'sustainable development'?

A
To maximize current consumption without considering future generations.
B
To meet the needs of the present without compromising the ability of future generations to meet their own needs.
C
To focus exclusively on economic growth.
D
To reduce population growth at all costs.