Time Allowed: 3 Hours Maximum Marks: 80

SAMPLE PAPER, 2017 - 18

XII ECONOMICS

Time Allowed: 3 Hours Maximum Marks: 80

______

(i) All questions in both sections are compulsory. However, there is internal choice in some questions.

(ii) Marks for questions are indicated against each question.

(iii) Question No.1-4 and 13-16 are very short answer questions carrying 1 mark each. They are required to be answered in one sentence.

(iv) Question No.5-6 and 17-18 are short answer questions carrying 3 marks each. Answer to them should not normally exceed 60 works each.

(v) Question No. 7-9 and 19-21 are also short answer questions carrying 4 marks each. Answers to them should not normally exceed 70 words each.

(vi) Question No.1-012 and 22-24 are long answer questions carrying 6 marks each. Answers to them should not normally exceed 100 words each.

(vii) Answers should be brief and to the point and the above word limit be adhered to as far as possible.

SECTION A: INTRODUCTORY MICRO ECONOMICS

1. When price of a good falls, the impact on demand curve of its complementary good is indicated by: 1

(a) a shift in demand curve to the right (b) a shift in demand curve to the left

2. If MUX = 4, MUY = 10 and PY =5, the consumer strikes his equilibrium when PX is: -

(a) 1 (b) 2

3. Define budget line:- 1

4. When more of a commodity can be sold only at the lower price, firm’s demand curve will

be:- 1

(a) downward sloping from left to right (b) upward sloping from left to right

5. Explain the behaviour of short run average cost curve:- 3

6. Explain the effects of ‘price ceiling’:- 3

Explain the effects of ‘floor price’:-

7. Labour absorbing technology is given up in preference to capital-intensive technology. State its economic value in the context of production possibility frontier for the domestic economy:- 4

In case technology remains, what option do we have to raise the level of output?PTO

Give reason in support of your answer.

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7. Elasticity of demand and slope of demand curve are two different concepts. Do you agree? Give reasons 4

8. How is short run production function different from long run production function? 4

9. “A spurt in input prices has increased the cost of production of capital goods.”

Use a diagram and economic theory to analyse the impact of the above statement on the supply of capital goods and its impact on the market equilibrium in the domestic economy. 6

10. A consumer consumes only two goods X and Y. State the conditions of consumer’s equilibrium with the help of utility analysis. How is equilibrium affected when price of one good falls? 6

11. Competition means rivalry. But under perfect competition there is no rivalry. How do you explain this fact. Use suitable diagram. 6

Monopolistic competition includes the elements of both monopoly as well as perfect

competition. Explain how.

SECTION B: INTRODUCTORY MACRO ECONOMICS

12. Which is the most important component of money supply? 1

14. Which of the following is a bank? 1

(a) UTI (b) LIC (c) UBI (d) IDBI

15. Define balance of payments:- 1

16. Which of the following is a source of foreign exchange? 1

(a) Grants (b) Exports

17. Explain the role of repo rate in correcting the deficiency of demand in an economy 3

18. In an economy, the autonomous consumption is 220 and the marginal propensity to save

is 0.4. If the equilibrium level of income is 1,700, then the investment expenditure in

this economy will be 400. True of False? Justify your answer:- 3

In an economy, the equilibrium level of income is 900 and the autonomous saving is

-100. If marginal propensity to save is 0.3, consumption expenditure in this economy will

be 500. True or False? Justify your answer.

19. Distinguish between intermediate goods and final goods:- 4

State the two ways of avoiding the problem of double counting in estimating

National income:-

20. Explain the process of credit creation by the commercial banks:- 4

21. Distinguish between depreciation of currency and appreciation of currency. :-

How are exports and imports impacted in these situations? 4

22. Explain the significance of export promotion in correcting the situation of deflationary

gap in the economy. 6

23. How is budgetary policy used to promote GDP growth in the economy? 6 PTO

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24. Calculate Gross National Product at Market Price by (a) Income Method, and

(b) Expenditure Method:- 6

Items (Rs.in crore)

(i) Net exports 25

(ii) Rent 35

(iii) Private final consumption expenditure 415

(iv) Interest 45

(v) Dividends 50

(vi) Undistributed profits 10

(vii) Corporate tax 15

(viii) Government final consumption expenditure 115

(ix) Net domestic capital formation 65

(x) Compensation of fixed capital 400

(xi) Consumption of fixed capital 25

(xii) Net indirect taxes 65

(xiii) Net factor income from abroad (-) 10

From the following data calculate National Income by (a) Income Method, and (b) Expenditure Method:

Items (Rs. In crore)

(i) Private final consumption expenditure 330

(ii) Mixed income of self-employed 25

(iii) Gross domestic fixed capital formation 50

(iv) Opening stock 15

(v) Compensation of employees 230

(vi) Closing stock 25

(vii) Government final consumption expenditure 80

(viii) Operating surplus 180

(ix) Consumption of fixed capital 10

(x) Net indirect taxes 15

(xi) Net factor income from abroad (-)5

(xii) Exports 20

(xiii) Imports 30

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