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

CBSE 12 Economics Question Paper-2022 Set-3

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2022 Set-3, helping students understand exam trends and practice real paper format

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

Duration

28 min

Questions

30

Marking

Negative

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Questions Preview

When does Net Factor Income from Abroad (NFIA) show Negative Value?

A
When factor income paid to the rest of the world is greater than factor income received from the rest of the world.
B
When factor income received from the rest of the world is greater than factor income paid to the rest of the world.
C
When factor income received from the rest of the world equals factor income paid to the rest of the world.
D
When the domestic income is greater than the national income.

State the meaning of retained earning.

A
The portion of profits that a company distributes to its shareholders as dividends.
B
The portion of a company's profits that are held back for future investment or to pay off debt.
C
The total revenue of a company before deducting any expenses.
D
The total amount of a company's sales in a fiscal year.

Based on the following schedule, what is the value of Marginal Propensity to Save (MPS) at the income level of ₹ 150 crore?

A
0.4
B
0.6
C
0.2
D
0.8

Based on the following schedule, what is the value of Autonomous Consumption?

A
₹ 10 crore
B
₹ 20 crore
C
₹ 30 crore
D
₹ 40 crore

In an economy, 75% of an increase in income is spent on consumption. Investment has increased by ₹ 1,000 crore. Based on the given information, calculate the total increase in income.

A
₹ 4,000 crore
B
₹ 3,000 crore
C
₹ 1,000 crore
D
₹ 5,000 crore

State any two precautions to be taken while estimating National Income by Expenditure Method.

A
Expenditure on second-hand goods should not be included, and expenditure on intermediate goods should also be excluded.
B
Expenditure on second-hand goods should be included, and expenditure on intermediate goods should be excluded.
C
Expenditure on intermediate goods should be included, and transfer payments should be excluded.
D
Only government expenditure should be included, and all private expenditure should be excluded.

Distinguish between Gross Domestic Product at Market Price and Net Domestic Product at Market Price.

A
GDP at Market Price includes depreciation, while NDP at Market Price excludes it.
B
NDP at Market Price includes depreciation, while GDP at Market Price excludes it.
C
GDP at Market Price is calculated at factor cost, while NDP at Market Price is calculated at market price.
D
GDP at Market Price and NDP at Market Price are the same.

Explain with valid arguments: 'In India, the women's participation rate is lower in urban areas than in the rural areas.'

A
This is due to better education and a greater proportion of women pursuing professional careers in urban areas, which are not captured in simple participation rates.
B
This is because urban women are less educated and less willing to work.
C
This is due to a lack of employment opportunities in urban areas, which forces women to work in rural areas.
D
This statement is incorrect; women's participation rates are higher in urban areas than in rural areas.

Do you agree with the given statement? Explain: 'Infrastructure contributes directly to the economic development of a country.'

A
No, infrastructure only has an indirect impact on a country's economic development by improving social services.
B
Yes, infrastructure provides a strong foundation for economic activity, improving productivity and quality of life, which directly contributes to economic development.
C
No, a country's economic development is solely dependent on its labor force and natural resources.
D
Yes, but only social infrastructure like schools and hospitals, not economic infrastructure like roads and power.

Distinguish between 'Value of Output' and 'Value Addition'.

A
Value of Output is the market value of all goods and services produced, while Value Addition is the difference between the Value of Output and Intermediate Consumption.
B
Value Addition is the market value of all goods and services produced, while Value of Output is the difference between the two.
C
There is no difference between Value of Output and Value Addition.
D
Value of Output is always greater than Value Addition.

Justify the following statement: 'Full employment is an essential condition to be fulfilled under Keynesian Economics Principles.'

A
Keynesian economics assumes a state of underemployment equilibrium, where the economy can be in equilibrium at less than full employment, so it is not an essential condition.
B
Full employment is the primary goal, and all Keynesian policies are aimed at achieving it immediately.
C
Keynesian economics is a theory of full employment only.
D
The statement is correct, as all economic theories are based on the assumption of full employment.

'Involuntary Unemployment is a situation where an able bodied person unwilling to work does not get work at the prevailing wage rate.' Do you agree with the given statement? Elucidate briefly.

A
Yes, involuntary unemployment refers to people who are unwilling to work.
B
No, the statement is incorrect. Involuntary unemployment refers to able-bodied persons who are willing to work at the prevailing wage rate but are unable to find employment.
C
Yes, the statement is correct, but only for developed economies.
D
No, involuntary unemployment is a situation where a person is willing to work, but only at a higher wage rate.

State the meaning of 'Retained Earnings'.

A
The portion of profits that a company distributes to its shareholders as dividends.
B
The portion of a company's profits that are held back for future investment or to pay off debt.
C
The total revenue of a company before deducting any expenses.
D
The total amount of a company's sales in a fiscal year.

Calculate the Equilibrium level of Income for an imaginary economy, if it is given that: (a) Consumption function, $C=400+0.6~Y$ where C= Consumption, Y= Income (b) Autonomous Investments ($I_{0}$)= ₹2,000 crore

A
₹6,000 crore
B
₹5,000 crore
C
₹12,000 crore
D
₹10,000 crore

Define an inflationary gap. Mention how the government can control the situation of inflationary gap by using a taxation policy.

A
An inflationary gap is when aggregate demand exceeds aggregate supply at full employment. The government can control this by increasing taxes, which reduces disposable income and aggregate demand.
B
An inflationary gap is when aggregate demand is less than aggregate supply. The government can control this by decreasing taxes.
C
An inflationary gap is a situation of high unemployment. The government can increase government expenditure to fix this.
D
An inflationary gap is a situation where the economy is in equilibrium. The government does not need to intervene.

Define a deflationary gap. Mention how the government can control the situation of deflationary gap by using a taxation policy.

A
A deflationary gap is when aggregate demand is less than aggregate supply at full employment. The government can control this by decreasing taxes, which increases disposable income and aggregate demand.
B
A deflationary gap is when aggregate demand exceeds aggregate supply. The government can control this by increasing taxes.
C
A deflationary gap is a situation of high inflation. The government can increase taxes to fix this.
D
A deflationary gap is a situation of low unemployment. The government can decrease government expenditure to fix this.

Calculate the Equilibrium level of Income for an imaginary economy, if it is given that: (a) Consumption function, $C=500+0.80~Y$ where C= Consumption, Y= Income (b) Autonomous Investments ($I_{0}$)= ₹1,000 crore

A
₹15,000 crore
B
₹7,500 crore
C
₹5,000 crore
D
₹10,000 crore

Calculate the Equilibrium level of Income for an imaginary economy, if it is given that: (a) Saving function, $S=(-)500+0.2~Y$ where S= Savings, Y= Income (b) Autonomous Investments ($I_{0}$)= ₹1,500 crore

A
₹10,000 crore
B
₹7,500 crore
C
₹15,000 crore
D
₹5,000 crore

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
Decreasing the bank rate and purchasing government securities in the open market.
B
Increasing the bank rate and selling 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.

Distinguish between Real Gross Domestic Product and Nominal Gross Domestic Product, using a suitable numerical example.

A
Real GDP is calculated using current year prices, while Nominal GDP is calculated using base year prices.
B
Real GDP is adjusted for inflation and reflects the actual volume of goods and services, while Nominal GDP is not adjusted for inflation.
C
Nominal GDP is a more accurate measure of economic growth than Real GDP.
D
Real GDP includes only services, while Nominal GDP includes only goods.

State any two precautions to be adopted while estimating National Income by Income Method.

A
Including transfer payments and income from illegal activities.
B
Excluding transfer payments and not including capital gains.
C
Including income from the sale of second-hand goods and windfall gains.
D
Excluding all non-factor incomes and gifts.

State and discuss any two reasons for the 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.

'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.

Based on the given data, compare any two parameters for the economies of India and China.

A
India has a higher Human Development Index (HDI) rank than China.
B
China has a higher life expectancy at birth and a higher GDP per capita (PPP $US) than India.
C
India has a higher GDP per capita (PPP $US) than China.
D
The HDI value for India is higher than for China.

'India and Pakistan have started their development journey at the same time but both have travelled different paths.' Justify with valid arguments.

A
Both countries have followed the same development strategies and have achieved similar outcomes.
B
India adopted a mixed economy model, while Pakistan focused on a free market system.
C
India and Pakistan have different political histories that led to different economic policies and outcomes, with India performing better on most indicators.
D
Both countries have focused on the same sectors for economic growth, leading to similar development paths.

State any two precautions to be adopted while estimating National Income by Value Added Method.

A
Do not include the value of intermediate goods and avoid double counting.
B
Include the value of second-hand goods and transfer payments.
C
Include the value of intermediate goods to get a more accurate total.
D
Include only the value of final goods for the domestic economy.

Discuss briefly the problem of 'Double Counting', using a suitable example.

A
The problem of including the value of intermediate goods in the national income calculation, leading to an overestimation of the final value of goods and services.
B
The problem of not including the value of intermediate goods, which leads to an underestimation of national income.
C
The problem of counting the value of a product at only one stage of production.
D
The problem of including only the final goods and services, which is the correct method.

In a hypothetical economy, planned savings fall short of planned investments, leading to fall in employment and income. Do you agree with the given statement? Support your answer with a valid explanation.

A
Yes, because a shortfall in savings means an excess of aggregate demand, which leads to a decrease in income and employment to restore equilibrium.
B
Yes, because savings are the primary driver of income in a two-sector economy.
C
No, because when planned savings are less than planned investment, it indicates an excess of aggregate demand, leading to an increase in income and employment.
D
No, because savings and investment are always equal in a hypothetical economy.

State and discuss any one component of Aggregate Demand in a two-sector economy.

A
Consumption, which is the total expenditure by households on goods and services.
B
Government expenditure, which is the spending by the government on public services.
C
Net exports, which is the difference between exports and imports.
D
Taxes, which are mandatory payments to the government.