ECOMICS SAMPLE PAPER CLASS XII

Practice Worksheet- MACROECOMNOMICS CLASS XII

CBSE Sample Papers for Class 12 Economics with marking scheme and solutions to download in PDF form. Text book solutions and CBSE previous years papers of all region Delhi, Foreign and All India (Delhi Outside) of 2018, 2017, 2016, 2015, 2014 main and compartment (Reappear exams) papers with solutions and marking scheme. Click here to get the latest CBSE Syllabus 2019-20Sample papers and marking scheme of 2019, 2018, 2017 and previous years papers with solutions and answers. Main stream exams and compartment examinations..

Ques 1. Define consumption of fixed capital

Ques 2. Who are normal residents of India?

a) Border workers of Nepal who daily cross the border to work in India

b) WHO located in India

c) American officials working in US embassy in India

d) Indian officials working in Indian embassy in China

Ques3. Is there any difference between depreciation and consumption of fixed capital? Explain

Ques4. Giving reasons classify the following into stock and flow;

a) Depreciation

b) Production

c) Capital

d) Income

Ques 5. Define expected obsolescence

Ques 6. Distinguish between consumer goods and capital goods. Which of these are final goods?

Ques 7. Give example of leakages and injections

Ques 8. Money flows are opposite to real flows. Explain

Ques 9. Define nominal GDP. Why do we need to convert it to real GDP?

Ques 10. “NFIA can be positive, negative or zero” Defend or refute

Ques 11. Distinguish between domestic product and national product. When can domestic product be more than national product?

Ques 12. How will you treat the following while estimating national income of India? Give reasons for your answer.

a) Salaries received by Indian residents working in Russian Embassy in India

b) Profits earned by an Indian bank from its branches abroad

c) Salaries received by an Indian working in a branch of foreign bank in India

Ques 13. Should the following be treated as final expenditure or intermediate expenditure? Give reasons

a) Purchase of furniture by a firm

b) Expenditure on uniforms for nurses by a hospital

c) Expenditure on maintenance of an office building

d) Expenditure on improvement of a machine in a factory

Ques 14. How is intermediate expenditure of the government treated while estimating national income?

Ques 15. Calculate national income by expenditure method and Income method from the following data:

Items	Crores
Net Domestic Capital Formation	500
Compensation of employees	1800
Consumption of fixed capital	100
GFCE	1200
PFCE	2500
Rent	450
Interest	200
Net exports	-100
Profit	1100
NFIA	-50
Net Indirect Taxes	250

                                                                                                                                                                                Ans: 3800

Ques 16. Will the following factor income be included in domestic factor income of India? Give reasons for your answer:

a) Compensation of employees to residents of Japan working in Indian Embassy in Japan

b) Profits earned by a branch of foreign bank in India

c) Rent received by an Indian resident from his building rented out to Russian Embassy in India

d) Profits earned by a branch of SBI in England

Ques 17. Calculated GNP­_FCby income method and expenditure method using the following data:

Opening stock	30
Profit	60
Closing Stock	20
Interest	470
Consumption of Fixed Capital	20
PFCE	460
Mixed Income	100
Net Imports	10
NFIA	5
COE	300
Net Capital Formation	500
Net Indirect Taxes	20
GFCE	100
Rent	100

                                                                                                                                                                                Ans: 1045

Q1State the meaning and components of money supply

Q2. Identify the components of money supply amongst the following:

a) Coins and notes held by the public

b) Net Demand deposits held by the commercial banks

c) Interbank deposits

d) Time deposits with the commercial banks

Q3. Explain the effect of bank rate on credit creation by commercial banks.

Q4. How does a central bank influence credit creation by commercial banks by open market

operations? Explain.

Q5. Explain the effect of CRR on credit creation by commercial banks

Q6. What are margin requirements? How does lowering or raising of margin requirements affect the

availability of credit?

Q7. Explain the distinction of SLR and CRR.

Q8. Explain the functions of Central Bank.

Q9. Currency is issued by the central bank, yet we say that commercial banks create money. Explain.

How is this money creation by commercial banks likely to affect the national income? Explain with a

numerical example.

Q10. What is meant by repo rate? How does the central bank use this measure to control

inflationary conditions in an economy?

Q11. How does the introduction of plastic money enhance the convenience of both the depositor

and the bank? Explain

Q12. What are the quantitative and qualitative instruments of credit control in the monetary policy

of RBI?

Q13. What is money multiplier? How will you determine its value?

Q14. What is high powered money?

Q15. Differentiate between commercial banks and central bank.

Unit 3- Determination of Income and Employment

Q1. If APC of an economy is 0.8, then what will be the saving at income level of 1000 ?

Q2. Derive the saving function from the following consumption function: C=100+0.6Y

Q3. Define aggregate demand. State its components.

Q4. Distinguish between APC and MPC. Can the value of APC be greater than 1? Explain

Q5. State whether the following statements are true or false and give reasons.

a) Sum of APC and MP is always equal to 1

b) Value of APC is always less than 1

c) The value of MPS can never be negative

d) When value of APS is negative then value of MPS will also be negative

e) If MPS is 1 then k is also equal to 1

f) Inventories accumulate when planned investment is less than the planned saving

g) According to Keynes there always exists a state of full employment in the economy

Q6. What is full employment? Can there be some unemployment under the situation of full

employment?

Q7. Estimate the value of AD in an economy if

a) Autonomous Investment= 120 crores

b) MPS= 0.2

c) Autonomous Consumption Expenditure= 50

d) National Income= 2000 (Ans; 1770 crore)

Q8. Define Ex- Ante consumption. Explain the distinction between autonomous consumption and

induced consumption.

Q9. Derive Consumption curve from the saving curve and explain the method of derivation.

Q10. If the ration between MPC and MPS is 3:1 then what will be the value of multiplier?

Q11. Explain the relationship between Investment multiplier and MPC

Q12. Calculate investment expenditure from the following data about an economy which is in

equilibrium:

National Income = 700

MPC = 0.8

Autonomous Consumption Expenditure= 70 (Ans: 70)

Q13. Why must AD equal to AS at the equilibrium level of income? Explain with the help of a

diagram.

Q14. Explain the concept of under employment equilibrium with the help of a diagram. Show on the

same diagram the additional investment expenditure required to reach full employment equilibrium.

Q15. Explain the meaning of investment multiplier. What can be the minimum value and why?

Q16. In an economy 75% of the increase in income is spent on consumption. Investment is increased

by 1000 crore. Calculate a) total increase in income b) Total increase in consumption expenditure

Ans: a)4000 b)3000

Q17. Define deflationary gap.

Q18. Explain the role of taxation in reducing excess demand.

Q19. What is deficient demand? Explain the role of ‘Bank rate” in removing it.

Q20. Distinguish between inflationary gap and deflationary gap. Show deflationary gap on the

diagram. Can the gap exist at equilibrium level of income? Explain

Q21. What is excess demand? Explain the role of reverse repo rate in removing it.

Q22. Explain how government spending be helpful in removing deficient demand?

Q23. Fill in the blanks:

a) _____________ demand does not affect the level of output

b) Deficient demand may be caused by ____________ in government spending.

c) _________ causes general price level to fall.

d) To control the situation of excess demand, government should ___________ its expenditure.

CBSE Sample Papers for Class 12 Economics with marking scheme and solutions to download in PDF form. Text book solutions and CBSE previous years papers of all region Delhi, Foreign and All India (Delhi Outside) of 2018, 2017, 2016, 2015, 2014 main and compartment (Reappear exams) papers with solutions and marking scheme. Click here to get the latest CBSE Syllabus 2019-20Sample papers and marking scheme of 2019, 2018, 2017 and previous years papers with solutions and answers. Main stream exams and compartment examinations..