CBSE Sample Papers for Class 12 Economics Set 4 with Solutions

Students can access the CBSE Sample Papers for Class 12 Economics with Solutions and marking scheme Set 4 will help students in understanding the difficulty level of the exam.

CBSE Sample Papers for Class 12 Economics Set 4 with Solutions

Time : 3 Hours
Maximum Marks: 80

General Instructions :

1. This question paper contains two sections:
   Section A – Macro Economics
   Section B – Indian Economic Development
2. This paper contains 20 Multiple Choice Questions of 1 mark each.
3. This paper contains Short Answer Questions of 3 marks each to be answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions of 4 marks each to be answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions of 6 marks each to be answered in 100 to 150 words.

Section-A (40 Marks)
Macro Economics

Question 1.
Read the following statements carefully: [1]
Statement 1: Aggregate Supply curve is positively sloped making an angle of 45° at the origin.
Statement 2: According to Keynes, excess capacity exists at under employment equilibrium.
Choose the correct alternative from the following:
(a) Statement 1 is true and statement 2 is false.
(b) Statement 2 is true and statement 1 is false.
(c) Both statements 1 and 2 are true.
(d) Both statements 1 and 2 are false.
Answer:
(c) Both statements 1 and 2 are true.

Explanation:
(i) According to Keynes, In the short ran, technology remains constant and AS can be increased only by additional application of existing resources (labour) available in the country. So, AS is directly proportional to level of employment which is why, AS curve makes an angle of 45° at the origin.
(ii) Under employment equilibrium is a situation when AD = AS but without fuller utilisation of resources. There exists an excess capacity or idle resource (labour) or involuntary unemployment.

Question 2.
While measuring the Gross Domestic Product of a country, which of the following is not considered? [1]
(a) Non- monetary transactions
(b) Inequalities among rich and poor
(c) Neither (a) nor (b)
(d) Both (a) and (b)
Answer:
(d) Both (a) and (b)

Explanation:
(i) GDP does not take in to consideration non- monetary transactions (commodity for commodity) as it is not feasible to measure the value of all transactions occurred without involving money.
(ii) It also doesn’t consider the increased inequalities among rich and poor. GDP can be increased even if it is concentrated in few hands and majority of population is deprived of it.

Question 3.
The range of Investment Multiplier varies from _____________ (i) ________ to ___________ (ii) ___________. [1]
(a) -1, +1
(b) + 1, ∞
(C) +1,0
(d) +1,-1
Answer:
(b) + 1, ∞

Explanation:
Value of Investment multiplier ranges from 0 to ao. Its value is dependent upon value of MPC. MPC ranges from 0 to 1.
When MPC =0
\(\mathrm{K}=\frac{1}{1-\mathrm{MPC}}=\frac{1}{1-0}=\frac{1}{1}=1\)
When MPC =1
\(\mathrm{K}=\frac{1}{1-\mathrm{MPC}}=\frac{1}{1-1}=\frac{1}{1-0}=\infty\)

Question 4.
As per The Financial Express, published dated April 22, 2023: [1]
“According to the World Bank, Private Remittances or transfer of Money from NRI to friends and relatives in India crossed the threshold (100 billion dollars) in 2022, with an impressive year-on-year growth of 12%.”
The above transaction will be recorded in the ________ account on the _________ side of Balance of Payment Account of India.
(a) Balance of Trade, Debit
(b) Balance of Invisibles, Credit
(c) Capital account, Debit
(d) Capital account, Credit
Answer:
(b) Balance of Invisibles, Credit

Explanation: NRI remittances from abroad to friends and relatives in India are a unilateral transfers or one sided income from rest of the world. So, it will be recorded in the Balance of Invisible account of current account of BOP. It leads to inflow of foreign exchange form rest of the world. So, it is a positive or credit side item of BOP.

Question 5.
Identify the type of money highlighted in the given picture: [1]

(a) Fiat Money
(b) Fiduciary Money
(c) Legal Tender Money
(d) Full Bodied Money
Answer:
(b) Fiduciary Money

Explanation: The type of money highlight in the given picture is fiduciary money.
(i) Fiduciary money is the money which is backed up with the trust between payer and payee. For e.g., Cheque.
(ii) Fiat Money is the legal tender money which is circulated in the country and backed up with the authority of government For e.g., coins and currency notes.
(iii) Full-bodied money is that money in which money value of money is equal to commodity value of money. For e.g., 10 gram gold coin.

Question 6.
Choose the correct alternative from the following: [1]
A. Money creation = 1/__________ (i) _________ × Initial Deposits.
B. Money Multiplier =________ (ii) _________ /Initial Deposits.
C. Money Multiplier = 1/____________ (iii) __________.
Alternatives:
Initial Deposits.
A. Total Deposits
B. Legal Reserve Ratio
C. Primary Deposits
D. Secondary Deposits
(a) (i)- B; (ii)- A; (iii)- B
(b) (i)- A; (ii)- B; (iii)- C
(c) (i)- C; (ii)- B; (iii)- A
(d) (i) -C; (ii)- D; (iii)- A
Answer:
(a) (i)- B ; (ii)- A; (iii)- B

Explanation:
Money Creation= \(\frac{1}{\text { LRR }} \times Initial Deposits\)
Money Creation= \(Total Deposits\overline{\text { Initial Deposits }}\)
Money Multiplier= \(\frac{1}{\text { LLR }}\)
LRR = Legal Reserve Ratio

Question 7.
__________ refers to a situation in the economy when Planned Aggregate Expenditure is equal to Planned output with no excess capacity in the economy. [1]
(a) Full employment
(b) Under Employment Equilibrium
(c) Deflationary Gap
(d) Full employment Equilibrium
Answer:
(d) Full employment Equilibrium

Explanation:
(i) Full employment equilibrium means Equilibrium in the economy (AD =AS) along with fuller employment of resources. There is no excess capacity in the economy.
(ii) Full employment refers to a situation when there is fuller utilisation of resources but not with Equilibrium.
(iii)Under employment equilibrium means AD equals AS with idle capacity in the economy.
(iv)Deflationary Gap means AD falls short of AS corresponding to full employment in the economy.

Question 8.
Identify the correct cause(s) of the situation highlighted in the given picture. Also choose the correct category of this transaction. [1]

I. Favourable Balance of Payments
II. Unfavourable Balance of Payments
III. Autonomous items of BOP
IV. Accommodating items of BOP
Choose the correct option:
(a) II and III
(b) II and IV
(c) I and III
(d) I and IV
Answer:
(b) II and IV

Explanation: The given picture shows taking loan by a country from IMF, and a country takes loan from IMF when it suffers BOP crisis in the country. It occurs due to increased imports, decreased exports and low foreign exchange reserves.
Accommodating transactions are those which are undertaken deliberately by the monetary authority of a country to Balance BOP. For e.g., taking loan from IMF or world bank.

Question 9.
Find the Missing Figures and Choose the correct alternatives: [1]

Income (in ₹ crores)	Saving (in ₹ crores)	Consumption (in ₹ crores)	Average Propensity to Save
0	(-) 30	___ (A) ____
10	_________ B) ________	20	(C)

(Choose the correct alternative to fill in the blanks)
(a) (-) 30; 30; 3
(b) 30; (-) 10; (-) 1
(c) 50; (-) 20; 2
(d) (-) 30; 10; 2
Answer:
(b) 30; (-) 10; (-) 1

Explanation:
A:
Y =C + S
0 = C + (-) 30
0 =C-30
30 =C

B:
Y =C + S
10 = 20 + S
10-20 = S
(-) 10 = s
APS-f -<-)!§ = (-)!

Question 10.
Which of the following item(s) lead to demand for Foreign exchange : [1]
A. Export of Basmati Rice to USA.
B. Import of machinery from abroad
C. Expenditure incurred by Indians on shopping in Canada
D. Expenditure incurred by foreigners on shopping in India
Alternatives:
(a) A and D
(b) B and D
(c) A, C and D
(d) A, B and C
Answer:
(b) B and D

Explanation: Foreign exchange market performs 3 functions:
(i) Demand for foreign exchange occurs due to imports from abroad and direct purchases made by Indian tourists in abroad.
(ii) Supply of foreign exchange occurs due to exports to abroad and direct purchases made by foreign tourists in India.

Question 11.
“Fixed Exchange Rate is determined by the forces of demand and supply of foreign exchange in the international market.”
Do you agree with the given statement? Give valid reason(s) in support of your answer. [3]
Answer:
No, I don’t agree with the given statement.
Reasons:
(i) It is flexible exchange rate which is determined by the forces of demand and supply of foreign exchange in the international market.
(ii) Fixed exchange rate is not determined by the market forces. Rather, it is fixed by government either in form of gold or US dollar.
(iii) If demand for foreign exchange rises, exchange rate goes up and if demand for foreign exchange falls, exchange rate goes down.
(iv) If Supply of foreign exchange rises, exchange rate goes down and if supply of foreign exchange falls, exchange rate goes up.

Question 12.
(A) On the Basis of given data, estimate the value of ” Operating Surplus”: [3]

Items	Amount (in ₹ crores)
Profits	400
Mixed Income of Self- employed	1400
Consumption of fixed capital	400
Wages and Salaries	2000
Corporate tax	60
Retirement pension	300
Net Factor Income from abroad	100
National Income	10,000

OR
(B) State the meaning of following: [3]
(i) Externalities
(ii) Domestic Income
(iii) Capital Formation

Answer:
(A)
National Income = NNP_FC = 10,000 crore
NDP_FC = NNP_FC– Net factor Income from abroad
= 10,000- 100 = 9,900 crores

NDP_FC = Compensation of Employees + Operating Surplus + Mixed income of self- employed
9,900 = 2,300 + Operating Surplus + 1,400
9,900 = 3,700 + Operating Surplus
9,900- 3,700 = Operating Surplus
Operating Surplus = 6,200 crores
Compensation of Employees = Wages and Salaries + Retirement Pension
= 2,000 + 300 = 2,300 crores

OR

(B) (i) Externalities: It refers to positive or negative impact of an economic activity without paying price or penalty for that. For e.g., Metro project in Gurugram hiked the property rates of nearby property. It is caused by a produce that is not financially increased.
(ii) Domestic Income: It refers to factor income earned by normal residents as well as non-residents of a country within the domestic boundary of a country in an accounting year. It is symbolised as NDPFC i.e., Net Domestic Product at Factor Cost.
(iii) Capital Formation: The process of addition of capital goods like machinery in the economy is known as capital formation. It is also known as Investment and a flow concept.

Question 13.
Suppose, the Break Even level of Income in an economy is ₹15,000 crores. If the economy saves 20 % of additional income, then calculate the value of autonomous consumption. Also, find out what additional investment is required to increase national income to₹45,000 crores. [4]
Answer:
Given :
At Break Even, Y= C = ₹15,000 crores
MPS = 20% = 0.2
To Find:
Autonomous Consumption =?
Additional Investments = ΔI to attain Y = 45,000 crores
MPC =1- MPS = 1- 0.2 = 0.8
C = \(\overline{\mathrm{C}}\)+ MPC. Y
15,000 = \(\overline{\mathrm{C}}\) + 0.8 (15,000)
15,000 = \(\overline{\mathrm{C}}\) + 12,000
15,000 = \(\overline{\mathrm{C}}\) + 12,000
\(\overline{\mathrm{C}}\) =15,000-12,000
\(\overline{\mathrm{C}}\) = 3,000 crores
Initial Y = 15,000 crores
New Y = 45,000 crores
ΔY = 45,000- 15,000 = 30,000 crores
Now, Investment Multiplier(k) = \(\frac{1}{\mathrm{MPS}}=\frac{1}{0.2}=5\)
\(\mathrm{k}=\frac{\Delta \mathrm{Y}}{\Delta \mathrm{I}}\)
\(5=\frac{30,000}{\Delta \mathrm{I}}\)
\(\Delta \mathrm{I}=\frac{30,000}{5}\)
ΔI = 6,000 crores

Question 14.
(A) “The process of Investment multiplier ceases to work when marginal propensity to consume becomes zero.” [4]
Do you agree with the given statement? Give argument(s) in support of your answer.
OR
(B) “RBI may decrease Legal Reserve Ratio as in economy these is a very low level of demand due to decreased money supply.”
Explain the role of CRR in correcting the deflationary gap in an economy:
Answer:
(A) Yes, I do agree with the given statement.
Reasons:
(i) Investment multiplier depends upon value of MPC. Higher MPC, higher the value of multiplier and vice-versa.
(ii) Change in investment leads to change in income and change in income leads to change in consumption. The consumption expenditure of one becomes income of other individual. He spends a part of it and saves the rest of it. The part he spends again becomes income of another
individual.
(iii) This process continues till the additional consumption becomes zero.
(iv) That’s why, this process stops to work when MPC becomes zero.

OR

(B) During deficient demand, Central Bank reduces the CRR. The result of reducing CRR will be seen in the surplus cash reserves with the banks which can be offered for credit. The bank’s credit reduces SLR, this will have expansionary effect on the credit position of the banks leading to increase in their lending capacity, borrowing thereby AD increases.

Question 15.
Discuss the issue of currency function of Central Bank. [4]
Answer:
Function of Central Bank: Issuing currency:
(i) RBI is the apex monetary authority of a country and has exclusive right to issue the currency in the country.
(ii) Currency issued by RBI is legal tender money as it is backed up by the support of government.
(iii) Since it can issue the currency, it can also withdraw the same currency from circulation which is called demonetisation.
(iv) No other bank can issue and withdraw the legal tender money.
(v) It brings uniformity and builds trust of people in the currency.

Question 16.
(A) On the basis of given information, calculate the value of: [3]
(i) Revenue Expenditure
(ii) Primary Deficit [2]

Items	Amount (in ₹ thousand crores)
Capital Expenditure	240
Non- debt Capital Receipts	220
Interest Payments	10% of Capital Expenditure
Revenue Deficit	40
Tax Collection	60
Non-tax revenue receipts	90

(B) State the meaning of Capital Expenditure with suitable example. [1]
OR
(C) Explain ‘Allocation of Resources’. Objective of government budget. [3]
(D) “RBI has declared a dividend of Rs. 87,416 crores to the government.” [3]
-The Times of India, May 20, 2023
Identify and discuss the type of receipt of government.
Answer:
(A) (i)
Revenue Deficit = Revenue Expenditure- Revenue Receipts
40 = Revenue Expenditure- (Tax receipts + Non-tax receipts)
40 = Revenue Expenditure- ( 60 + 90)
40 = Revenue Expenditure- 150
Revenue Expenditure =150 +40
Revenue Expenditure = 190 crores

(ii) Interest Payments = 10% of Capital Expenditure
= 10% × 240 = 24 crores
Fiscal Deficit = (Capital Exp. + Revenue Expenditure)- (Non-debt capital Receipts + Revenue Receipts)
= ( 240 + 190)- (220 + 150)
= 430-370
= 60 crores
Primary Deficit = Fiscal Deficit- Interest Payments
= 60 -24 = 36 crores

(B) Capital Expenditure: Those Expenditures of government which Either (i) create assets for the government.
Or (ii) reduces liabilities of the government.
For e.g.,
(i) Expenditure on roadways, railways, flyovers etc. creates assets for the nation.
(ii) Expenditure on repayment of loans by government reduces liabilities of government.

(C) Allocation of Resources:

1. India is a mixed economy having both private and public sector,
2. Objective of private sector is to earn and maximise profits. So, it allocates its resources to the production of those goods which it finds profitable and ignores the social welfare.
3. Objective of public sector is to maximise social welfare. So, it allocates its resources to the production of those goods which it finds socially desirable.
4. Budget tries to balance both objectives and uses the tools- tax and subsidy.
5. Heavy taxation is imposed on those goods and services which are harmful for society like recently, government introduced GST on online gaming to protect the people especially youth from this addiction.
6. Subsidy is given on socially desirable goods like swadeshi products so as to encourage their consumption.

(D) (i) Dividend paid by RBI to central government is a Non-tax Revenue Receipt of the government.
(ii) RBI is a statutory body that enjoys the patronage of government.
(iii) RBI also earns profit from buying and selling government securities or gold from international market.
(iv) Dividend received by Central government by any public sector unit is receipt of government and it is of recurring nature.
(v) It neither reduces liabilities of government nor creates assets for the government. So, it comes under Revenue receipts of government.

Question 17.
(A) Categorise the following as Stock or Flow. Give valid argument(s) in support of your answer: [3]
(i) Gold ornaments lying in bank locker
(ii) Production of Cloth in a cloth mill
(iii) Interest on loan
(B) “Increase in Nominal GDP is a true indicator of economic growth of a country.” Do you agree with the given statement? Give any one valid reason in support of your answer. [3]
Answer:
(A) (i) It is a stock concept as it can be measured at a point of time.
(ii) It is a flow concept as it can be measured over a period of time i.e. per day, per month, per year.
(iii) It is also a flow concept as it can be measured over a period of time.
(B) No, I don’t agree with the given statement.
Reason:
(i) Nominal GDP refers to market value of all the final goods and services produced in the domestic boundary of a country in an accounting year, measured at current year prices.
(ii) Increase in Nominal GDP can occur with increase in prices only, even if there is no increase in quantity produced in the country.
(iii) Because of Increase in prices only, market value of goods increases but there is no value addition and generation of employment.
(iv) Increase in Real GDP is a true indicator of economic growth of a country, as it shows the increased in quantity produced, as it is measured at constant prices. It signifies the extent of value addition and employment generation in the country

Section-B (40 Marks)
Indian Economic Development

Question 18.
Read the following statements carefully and choose the correct alternative: [1]
Statement 1: V.K. R.V. Rao and R.C. Desai contributed to national income estimates in India.
Statement 2: During British rule, India was a net importer of raw materials and exporter of finished goods.
(a) Statement 1 is true and Statement 2 is false.
(b) Statement 1 is false and Statement 2 is true.
(c) Both Statements 1 and 2 are true.
(d) Both Statements 1 and 2 are false.
Answer:
(a) Statement 1 is true and Statement 2 is false.

Explanation:
(i) V. K. R. V. Rao, R.C. Desai, Dada Bhai Naoroji and Findlay Shirras contributed to national income and per capital estimates in India for the first time before Independence.
(ii) During British rule, India was a net exporter of raw materials and importer of finished goods.

Question 19.
Which one of the following country(s) followed the path of economic reform under Pressure from World Bank and IMF? [1]
(a) China and Pakistan
(b) India and Pakistan
(c) India and China
(d) India, China and Pakistan
Answer:
(b) India and Pakistan

Explanation: India and Pakistan initiated the economic reforms under pressure from World Bank and IMF because these nations had to approach these international institutions for loans due to BOP crisis in their countries. But it was not so in case of China.

Question 20.
Which argument(s) is appropriate in favour of farm subsidies in India? [1]
(I) Poor farmers cannot afford required Inputs
(II) Agriculture is a main source of livelihood for millions
(III) Majority of fanners are poor
(IV) India is developing nation so it becomes necessary
Alternatives:
(a) I, II
(b) I, II, III
(c) II, III, IV
(d) I, II, III, IV
Answer:
(d) I, II, III, IV

Explanation: Even today, majority of population is engaged in agriculture in India. It provides source of livelihood for millions of people. Also, poor and marginal farmers cannot purchase the required inputs like tractors, threshers, seeds, pesticides, fertilizers, power and irrigation facilities. That is why, agricultural subsidy is favoured in developing nations like India.

Question 21.
Study the following picture and answer the given question: [1]

Farmers and big companies enter into an agreement to produce a particular crop(s) in their field.
Financial help and technical assistance is also provided to the farmers and farmers sell the crop(s) to
these companies at a pre-determined prices. Identify the type of Channel:
(a) Corporate funding to farmers
(b) Minimum Support Price
(c) Contract Farming
(d) Rural Credit
Answer:
(c) Contract Farming

Explanation: Contract farming refers to that channel in which farmers enter in to contract with companies. Companies advance them cash and technical support to produce a particular Crop and later on, purchase these crops from farmers at a pre determined price. It reduces the market risk of price fluctuations and enhances the size of market.

Question 22.
Read the following statement: Assertion (A) and Reason (R). Choose the correct alternative from those given below: [1]
Assertion (A): FERA was replaced in place of FEMA under NEP, 1991.
Reason (R): Disinvestment is a policy adopted under the process of Privatisation.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.
Answer:
(d) Assertion (A) is false, but Reason (R) is true.
Explanation:
(i) Foreign Exchange Management Act (FEMA) was replaced in place of Foreign Exchange Regulation Act (FERA) under NEP, 1991.
(ii) Disinvestment is a part of privatisation in which share of PSUs are sold to private sector units.
It can also be defined as the action of an organisation (or government) selling or liquidating an asset or subsidiary.

Question 23.
Under one child policy the proportion of ____________ had started mounting up in china. [1]
Choose the correct alternative:
(a) Younger people
(b) Elderly people
(c) Children
(d) Both (a) and (b)
Answer:
(b) Elderly people

Explanation: Under China’s one-child policy, the proportion of elderly people had started mounting up. This is because the one-child policy limited most urban couples to having only one child, which resulted in a lower birth rate. At the same time, life expectancy in China was increasing, which meant that people were living longer. As a result, the population was aging, and there was a growing proportion of elderly individuals (those aged 60 and above) in relation to the total population.

Question 24.
Which of the following statement(s) are correct? [1]
(A) Varghese Kurian is known as father of Green Revolution in India.
(B) Operation flood programme is also known as White Revolution.
(C) M.S. Swaminathan is known as father of white revolution in the world.
(D) Norman Borlaug is known as father of green revolution in the world.
Choose the correct alternative:
(a) A and C
(b) A and D
(c) D and C
(d) B and D
Answer:
(d) B and D

Explanation:
(i) Varghese Kurian- Father of White Revolution in India.
(ii) M. S. Swaminathan- Father of Green Revolution in India.
(iii) Norman Borlaug- Father of Green Revolution in the world.
(iv) Operation Flood Programme- White Revolution in India.

Question 25.
__________ (i) ___________ has the highest share in GDP in India while __________ (ii) __________ has the lowest share in GDP in Pakistan. [1]
(a) Service sector, primary sector
(b) Primary sector, Industrial sector
(c) Service sector, Industrial sector
(d) Industrial sector, primary sector
Answer:
(b) Primary sector, Industrial sector

Explanation:
(i) India’s service sector has the highest share of 53% in GDP.
(ii) Pakistan’s industrial sector has the lowest share of 18% in GDP.

Question 26.
Read the following statements carefully: [1]
Statement 1: Hire and Fire policy is most common practice of Public sector.
Statement 2: A self-employed person owns his business and earns profit.
Alternatives:
(a) Statement 1 is true and Statement 2 is false.
(b) Statement 2 is true and Statement 1 is false.
(c) Both Statements 1 and 2 are true.
(d) Both Statements 1 and 2 are false
Answer:
(b) Statement 2 is true and Statement 1 is false.

Explanation:
(i) Hire and Fire policy is the most common practice of Private sector in which if there is a need of employees, they are hired immediately and if there is no need of employees, they are removed from their jobs. But it is not in case of public sector. Public sector gives job security to its employees.
(ii) A self-employed person does not work under anyone but runs his own business and earns profit as a reward for his service.

Question 27.
Which of the following publishes Human Development Report of different Countries: [1]
(a) United Nations Development Programme
(b) World Health Organization
(c)) World Trade Organization
(d) International Monetary Fund
Answer:
(a) United Nations Development Programme

Explanation: Every year, United Nations Development Programme (UNDP) publishes Human Development Report (HDR) of different countries and rank countries on the basis of their Human Development Index (HDI).

Question 28.
(A) “Karve Committee in 1955 was constituted for Small Scale Industrial Development in rural areas.” [3]
Discuss the significance of SSI in context of rural areas.
OR
(B) “Inward Looking Trade Strategy focused on reliance on Import Substitution rather than Export Promotion.”
Do you agree with the given statement? Support your answer with valid argument(s).
Answer:
(A) Importance of Small Scale Industry:

1. Labour Intensive: SSI uses such kind of technology which is labour intensive i.e., more use of labour and less use of capital. So, it generates employment in the country which is necessary for India having huge population.
2. Need of small investment: Setting up of small scale industry needs less investment as compared to large scale industry. So, economic power is not concentrated in big industrial houses.
3. Promotes balanced regional development: SSI can be set up across different parts of the country because of less investment and flexibility of location. It promotes equity in development of different regions.

OR

(B) Yes, I do agree the given statement.
Arguments:

1. Import substitution refers to production of those goods in the domestic boundary of a country which are imported from other countries, and it was adopted by India so as to save foreign exchange which is used for making payments for imports.
2. Government focused on saving foreign exchange through import substitution rather than generating foreign exchange by promoting exports to other countries.
3. It was also adopted to protect the domestic industries from international competition.
4. The saved foreign exchange was to be utilised for development programmes in the country.

Question 29.
State, giving valid reasons, whether the following statements are true or false: [3]
(i) Gender Bias is not a hindrance in the human capital formation in India.
(ii) On the Job training programmes are merely a waste of money on the employees.
Answer:
(i) False, Gender Bias is certainly a hindrance in the human capital formation in India. Human Capital is an asset for the country and helps in its growth and development, and it is not confined to education, health and skills of male population only. Educational and health needs are equally important for female population as well that they can equally contribute in the human capital formation of a country.
(ii) False, On the Job training programmes are not a waste of money on the employees but it adds on their skills, as every field requires updating of new skills required for jobs. It enhances their efficiency and productivity which is not only good for the organisation but also for the nation as well.

Question 30.
From the data given below, compare the indicators of Human Development of India, Pakistan and China. [4]

Country	HDI	Life Expectancy at Birth (in years)	Maternal Mortality Rate (per 1,00,000 live births)
India	0.640	68.8	174
Pakistan	0.562	67.7	186
China	0.752	76.4	27

Answer:

1. Life expectancy of India is 68 years while it is 67 years in Pakistan and 76 years in China. China is ahead of both countries India and Pakistan. There is not much difference in life expectancy of India and Pakistan.
2. Maternal Mortality Rate in India is 174 per 1 lakh live births while it is 186 in Pakistan and 27 In China. It is quite much lower in China than India and Pakistan. Pakistan lags behind both India and China in maternal mortality rate but not much different with India.
3. HDI of India is 0.640 while it is 0.562 in Pakistan and 0.752 in China. Again, China is ahead of both counties India and Pakistan. It is because of better life expectancy, lower maternal mortality rate, lower infant mortality rate, better education and standard of living in China.
4. India and Pakistan both should work on their education and health sectors to be at par with China.

Question 31.
(A) “Rural credit is the lifeblood of agriculture in rural areas. Various types of credit are given to farmers for different purposes.”
Justify the given statement with valid argument(s). [2]
OR
(B) “Tata Consultancy Services (TCS), an IT giant ends work from home, witnesses rise in female employees resigning from job.” [2]
-India.com, June 13, 2023
In the light of above statement, what could be the possible reasons behind the step taken by female employees? Suggest any two ways in which female participation in workforce can be increased in corporate sector.
Answer:
(A) Types of Rural credit:

1. Short-term credit: Short term credit is given generally for a period from 6 months to one year, and it is given for purchasing inputs for farming like seeds, fertilizers, pesticides etc. as small and marginal farmers do not have enough resources to buy these inputs.
2. Medium-term credit: Medium term credit is given generally for a period from1 year to 5 years, and it is given for purchasing tractors, threshers, digging of wells and construction of fences etc. These Credit needs are greater than short term credit needs.
3. Long-term credit: Long term credit is given generally for a period from 5 years to 20 years, and it is given for purchase of additional land and for permanent improvements on the existing land. These credit needs are much greater than medium term and short term credit needs.

OR

(B) Reasons behind resignation by female staff:

1. Work from home option to female staff gives them flexibility of time which is not possible to work from office. They can submit their work done as per their convenience of time but in office they are bound to do it during office hours.
2. Work from home saves their time, money and energy wasted in travelling from home to office.
3. Taking care of family along with job is also a factor in resigning from job which could not be possible in case of work from office.

Ways to increase female participate in corporate sector:

1. Female should be given option to work from home so that they can manage their home and take care of family as well.
2. Efforts should be taken to reduce gender bias. For e.g. salary package at par with their male counterparts for the same work. It will encourage them to pursue career in corporate sector

Question 32.

Identify the sector of employment depicted in the image and discuss various issues faced by this sector. [4]
Answer:
Informal or unorganised sector of employment is depicted in the given image. Informal sector includes private sector units having less than 10 workers. Workers engaged in farming and self-employed are also included in this sector. For e.g., small shopkeepers, street vendors, rickshaw pullers etc. Issues faced by Unorganised sector:

1. People engaged in informal sector do not get fixed wages and salaries at the end of every month. Their rewards fluctuate with the market uncertainties.
2. They do not get perks like dearness allowance, house rent allowance, travelling allowances etc.
3. There is no provision of social security benefits like provident fund, pension, gratuity etc. for workers in informal sector.
4. There is no trade union for raising their voice and protecting their rights.

Question 33.
(A) “India witnessed a spurt rise in production of wheat and rice. It was as a positive outcome of technical reforms introduced during the phase of green revolution in the country.” [3]
Elaborate the features of technical reforms introduced during that time.
(B) “In the post reform period, gradual disinvestment was done in public sector units and doors were opened for the private sector.” [3]
List any three gains that Indian Economy benefitted from this step after 1991.
OR
(C) “Increased westernisation and consumerism are obvious outcomes of globalisation.” [3]
Justify this statement with valid argument(s).
(D) “India adopted a mixed economic system rather than a controlled economic system after Independence.” [3]
State the features of mixed economic system.
Answer:
(A) Technical Reforms introduced during Green Revolution:

1. Introduction of HYV technology: High yielding variety seeds were used rather than traditional seeds for food crops like wheat and rice. It gave rise to their productivity and led to a substantial rise in production of these crops.
2. Use of pesticides and insecticides: Pesticides and Insecticides were used on very large scale to kill pests and insects. It was done to protect the crops from various diseases.
3. Irrigation facility: Irrigational facilities like canals and well were expanded which led to increase in area under cultivation. Without irrigational facilities, there was no use of HYV seeds and chemical fertilizers.

(B) Gains of Privatisation:

1. Many domestic private companies came into existence in different sectors of the economy. For e.g., telecom, insurance, consumer goods and capital goods. It gave rise to GDP and employment to a large extent in the country.
2. It increased the competition among public sector and private sector which is good for improving quality of products and make prices competitive. Ultimately, consumer is benefitted from competition.
3. Consumers enjoyed sovereignty i.e., they could choose the goods and services as per their likes and prices among a wide variety of choices available in the market.
4. Objective of private sector is profit maximisation. So they worked with full dedication and enthusiasm. It led to increase in efficiency and productivity of private enterprises which made them competitive with MNCs in the country and at international level as well.

OR

(C) Increased westernisation and consumerism are obvious outcomes of Globalisation. Arguments in favour of given statement are as follows:

1. As the country opened doors for rest of the world, many multinational companies were set up. It contributed to economic growth and employment in the country.
2. Greater job opportunities led to increase in income of people and hence, increase in demand is quite obvious.
3. Global brands were now available in the country and people choose them over indigenous products.
4. Not only products, western culture like clothing styles, food products, language and even festivals attracted the Indian youth. It badly impacted the Indian culture.
5. Saving was a common practice among Indians, and now, people spend beyond their pockets and even borrow to look rich and modern.

(D) Features of Mixed Economic System:

1. An Economic System in which both private and public sector exists.
2. Private sector produces those goods and services which it finds profitable and uses such technology which is cost effective as objective of private sector is profit maximisation.
3. Public sector produces those goods and services which it finds socially desirable like schools, hospitals and uses such technology which benefits the society as objective of public sector is social welfare.
4. Government also performs traditional functions like law and order, defence, pensions, subsidies etc.
5. Price in private sector is left to the free play of market forces like demand and supply while prices in public sector is fixed by government considering the social needs.
6. Government performs the function of regulator for private sector. For e.g., TRAI for telecom sector, SEBI for capital market, RBI for money market so that private sector doesn’t exploit the interest of consumers.

Question 34.
Read the following text carefully and answer the given questions on the basis of the same and common understanding:
Rain Water Harvesting (RWH), is useful for the accumulation and deposition of rainwater in specially prepared collection and catchment areas, such as roofs, or areas on the ground, and has numerous benefits. In water-rich countries like Malaysia or Colombia, for instance, RWH has proven useful in improving water security at household and personal scales, and with financial viability. Rainwater can act as a buffer against shortfall, as an alternative primary source in rural areas that lack conventional water supply systems, and as a backup supply source in urban areas.

A cost-benefit analysis of RWH options pointed out that these options are not economically viable, but without quantifying the multipurpose benefits of RWH. For instance, RWH systems can mitigate service interruptions from centralised water distribution systems, or overuse of water from wells in arid regions. RWH can also be used to store rainwater for emergencies such as earthquakes, and as an adaptation strategy to cope with climate extremes such as droughts. In addition, RWH can help reduce the impacts of flooding through the reallocation of water in small watersheds dedicated for agroforestry and reduced urban runoff.

If well managed, rainwater quality can be safe in combination with a framework of international standards. Rainwater is considered an ‘improved water source,’ according to the WHO & UNICEF Joint Monitoring Programme (WHO & UNICEF, 2019), when these parameters and standards are met. Therefore, investments in up scaling RWH count towards meeting the targets agreed by national governments for WASH as part of the Sustainable Development Goals (SDG 6).
Source:https://blogs.worldbank.org/water/roofs-rain-and-life-rainwater-harvesting-safe-water-supply-andsustainable-co-benefits
(i) What do you understand by Rain water harvesting? [2]
(ii) Discuss how rain water harvesting helps in attaining Sustainable Development? [4]
Answer:
(i) Rain water harvesting is a technology in which rain water is collected from roofs, streets, parks and roads, etc. and then stored underground and purified for usable purposes. It enhances the level of ground water and compensates the shortage of water.
(ii) Rain water harvesting is helpful in attaining Sustainable Development in the following ways:
(a) It solves the problem of shortage of water across the world. Future generation will be able to get plenty of water for their needs.
(b) It leads to reduction in soil erosion and floods as water gets collected deep underground.
(c) Rain water is free from harmful chemicals that can be used for irrigation in the fields, which do not harm the crops and soil fertility remains intact.
(d) It replenishes the ground water level which is helpful in sustaining the lie of water creatures.