Students can access the CBSE Sample Papers for Class 12 Economic with Solutions and marking scheme Term 2 Set 9 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Economics Term 2 Set 9 with Solutions
General Instructions :
- This is a subjective question paper containing 13 questions.
- This paper contains 5 questions of 2 marks each, 5 questions of 3 marks each and 3 questions of 5 marks each.
- 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
- 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
- 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
- This question paper contains Case/Source Based Questions.
Maximum Marks: 40
Time: 2 Hours
Short Answer (SA) Type I Questions (2 Marks)
Question 1.
If the Real GDP is ₹400 and Nominal GDP is ₹450, calculate the Price Index, (base = 100).
Or
Find Gross Value Added at Factor Cost.
| Item | ₹ (in crores) |
| Units of Output Sold | 2,000 |
| Price Per Unit of Output | 20 |
| Depreciation | 2,000 |
| Change-in-stock | (-) 500 |
| Intermediate Cost | 15,000 |
| Subsidy | 3,000 |
Answer:
Real GDP = ₹400; Nominal GDP = ₹450
Price Index = \(\frac{\text { Nominal GDP }}{\text { Real GDP }} \times 100=\frac{450}{400}\) x 100 = 112.5
Or
Gross Value Added at Factor Cost (GVAFC) = (Output Sold x Price Per Unit) + Change-in-stock – Intermediate Cost + Subsidy
= (2,000 x 20) + (- 500) -15,000 + 3,000
= 4,000 – 15,500 + 3,000
= ₹27,500 crore
Question 2.
Given below is the consumption function of an economy.
C = 100 + 0.5Y
With the help of a numerical example, show that in this economy as income increases, Average Propensity to Consume (APC) will decrease.
Answer:
C = 100 + 0.5 Y, substituting the values of Y as 400, 500 and 600, we get the schedule as below
| y | C | APC = \(\frac{C}{Y}\) |
| 400 | 300 | 0.75 |
| 500 | 350 | 0.70 |
| 600 | 400 | 0.67 |
In the given schedule, we can observe that as income rises, APC declines from 0.75 to 0.67.
Thus, as income is increasing, APC is decreasing.
Question 3.
Write a short note on the Great Proletarian Cultural Revolution of China.
Or
Mention any two failures in the structural reforms of Pakistan.
Answer:
Great Proletarian Cultural Revolution (1966-76) In 1965, Mao Tse Tung started a cultural revolution on a large scale. In this revolution, students and professionals were sent to work and learn from the countryside. Unlike GLF, campaign the cultural revolution did not have an explicit economic rationale.
Or
Failures of structural reforms in Pakistan are
- Growth rate of GDP and its sectoral constituents have fallen in 1990s.
- Poverty and unemployment are still areas of major concerns.
Question 4.
Observe the data given below carefully and answer the question.
Stunting and Underweight (%) among Children Below Age 5 Prevalence of Stunting and Underweight among Children Below 5 Years at State-level, 2014
Source Annual Health Survey Report, A Report on Clinical, Anthropometric and Bio-Chemical Survey (Part II)
Name two states that have highest percentage of underweight children in the country under 2 SD category. What does it indicate?
Or
The problem of land degradation in India is increasing. What are the factors responsible for it?
Answer:
Jharkhand and Uttar Pradesh have highest underweight children population in the mentioned category. This indicates the poor health infrastructure of these states and unequal distribution of resources.
Or
Land in India suffers from varying degrees and types of degradation mainly due to excessive use and inappropriate management practices.
The factors responsible for land degradation in India are (any two)
- Loss of vegetation occurring due to deforestation.
- Unsustainable fuel, wood and fodder extraction.
- Shifting cultivation.
Question 5.
What changes will take place to bring an economy in equilibrium if planned savings are greater than planned investment?
Answer:
In such a situation, the following changes will occur
- Stocks of the producers would be in excess of the desired limit.
- Profits will start shrinking.
- The desired level of output for the subsequent year will face a cut.
- Levels of income and employment will tend to shrink to the point where S = I.
Thus, the economy will come back to a state of equilibrium.
Short Answer (SA) Type II Questions (3 Marks)
Question 6.
Name and explain the various types of factor incomes.
Answer:
Factor incomes are broadly classified as under
(i) Compensation of Employees It includes wages and salaries in cash and facilities such as free education to children, free medical facilities, housing, free uniform, etc. employer’s contribution to social security scheme and pension on retirement.
(ii) Operating Surplus It refers to income from one’s property and entrepreneurship.
It includes the following items
- Rent
- Interest
- Profit
Profit is further split into three components as a dividend, corporate profit tax and retained earnings.
(iii) Mixed-Income It refers to the incomes of the self-employed persons using their own labour, land, capital and entrepreneurship to produce goods and services.
Question 7.
Complete the following table
Or
Draw the straight line saving curve for an economy and derive from it the consumption curve, explaining the method of derivation. Show a point on the consumption curve at which Average Propensity to Consume (APC) is equal to 1.
Answer:
Below diagram clearly depicts, savings at zero level of income is negative and equal to OA. It implies that consumption at zero level of income is positive and equal to OB. Therefore, consumption curve starts from B.
At OY1, level of savings is equal to zero which implies consumption is equal to income. So, the consumption curve must pass through Y line (sloped 45°). It cuts Y at E. Now, joining Band £ and extending it forward, we get consumption curve.
Diagram Showing Derivation of Consumption Curve
Here, straight line consumption curve shows level of consumption at zero level of income and C = Y at Y1 level of income. Now, APC = \(\frac{C}{Y}\)
∴ APC is equal to 1, when consumption is equal to income i.e., C = Y. This occurs at point E.
Question 8.
Observe the graphs carefully and answer the question.
Source Health Statistics, Statistical Report 2912, RGI
Note HP – Himachal Pradesh, AP – Andhra Pradesh, TN – Tamil Nadu, UP – Uttar Pradesh, WB – West Bengal, J&K – Jammu & Kashmir
Health sector in India is affected by urban-rural and rich-poor divide. Briefly explain how?
Direction Read the following text carefully and answer questions 9 and 10 given below Global warming and climate change have the potential to alter biological systems. More specifically, changes to near-surface air temperatures will likely influence ecosystem functioning and thus the biodiversity of plants, animals, and other forms of life. The current geographic ranges of plant and animal species have been established by adaptation to long-term seasonal climate patterns. As global warming alters these patterns on timescales considerably shorter than those that arose in the past from natural climate variability, relatively sudden climatic changes may challenge the natural adaptive capacity of many species.
A large fraction of plant and animal species are likely to be at an increased risk of extinction if global average surface temperatures rise another 1.5 to 2.5 °C (2.7 to 4.5 °F) by the year 2100.
Species loss estimates climb to as much as 40 percent for a warming in excess of 4.5 °C (8.1 °F)-a level that could be reached in the IPCC’s higher emissions scenarios. A 40 percent extinction rate would likely lead to major changes in the food webs within ecosystems and have a destructive impact on ecosystem function.
Surface warming in temperate regions is likely to lead changes in various seasonal processes-for instance, earlier leaf production by trees, earlier greening of vegetation, altered timing of egg laying and hatching, and shifts in the seasonal migration patterns of birds, fishes, and other migratory animals. In high-latitude ecosystems, changes in the seasonal patterns of sea ice threaten predators such as polar bears and walruses; both species rely on broken sea ice for their hunting activities.
Also in the high latitudes, a combination of warming waters, decreased sea ice and changes in ^ ocean salinity and circulation is likely to lead to reductions or redistributions in populations of algae and plankton. As a result, fish and other organisms that forage upon algae and plankton may be threatened. On land, rising temperatures and changes in precipitation patterns and drought frequencies are likely to alter patterns of disturbance by fires and pests.
Numerous ecologists, conservation biologists and other scientists studying climate warn that rising surface temperatures will bring about an increased extinction risk. In 2015, one study that examined 130 extinction models developed in previous studies predicted that 5.2 percent of species would be lost with a rise in average temperatures of 2 °C (3.6 °F) above temperature benchmarks from before the onset of the Industrial Revolution. The study also predicted that 16 percent of Earth’s species would be lost if surface warming increased to about 4.3 °C (7.7 °F) above preindustrial temperature benchmarks.
Other likely impacts on the environment include the destruction of many coastal wetlands, salt marshes, and mangrove swamps as a result of rising sea levels and the loss of certain rare and fragile habitats that are often home to specialist species that are unable to thrive in other environments.
For example, certain amphibians limited to isolated tropical cloud forests either have become extinct already or are under serious threat of extinction. Cloud forests – tropical forests that depend on persistent condensation of moisture in the air-are disappearing as optimal condensation levels move to higher elevations in response to warming temperatures in the lower atmosphere.
Source https://zvww.britannica.com/science/global-warming/Environmental-consequences-of-global- warming
Answer:
It is correctly said that health sector in India suffers from urban-rural and rich-poor divide. 70% population is living in rural areas but only 20% of the total hospitals are located in rural areas. In other words, 80% of total hospitals are available for only 30% of urban population.
There are only 0.36% hospitals for one lakh people in rural areas whereas it is 3.6 % hospitals per one lakh population in urban areas, i.e. number of hospitals in urban areas is 10 times the number of hospitals in rural areas. In villages, specialised medical care is completely missing like pediatrics, gynecology, anesthesia and obstetrics.
PHCs located in rural areas do not have even X-ray or blood test facilities. 20% of doctors passing, leave the country for better prospects. Many others are interested in urban areas, rare are the ones interested in rural areas. The poorest one-fifth spends 12% of their income on health while rich spend only 2% of their income on health.
Question 9.
Over the past few decades, the detrimental impact of global warming has impacted the mankind in a big way, state its impact on mankind.
Answer:
The gradual increase in the average temperature of Earth’s lower atmosphere is called global warming. It occurs due to greenhouse gases such as carbon dioxide, methane etc.
The following are the effects of global warming (any three)
- During the past century, the atmospheric temperature has risen by 1.10°F or 0.60°C.
- This has led to the melting of polar ice, resulting in an increase in sea levels. This has further led to the risk or coastal flooding.
- Disruption of drinking water supplies is dependent on the melting of snow.
- It has led to the extinction of certain species.
- It has led to more frequent tropical storms.
Question 10.
Briefly explain few measures to control environmental degradation.
Answer:
The following measures are needed to prevent environmental degradation (any three)
(i) Population Control Rising population is a threat, especially for developing countries like India as it possess threat on the environment. Therefore, it is absolutely essential to check the rising population if the environment is to be protected.
(ii) Social Awareness must be spread among the people to understand the negative consequences of pollution. This will help in reducing overuse of environmental resources.
(iii) Water Management For the protection of environment, provisions must be made to supply clean drinking water to the people. Also we need to make people aware of the judicial use of available fresh water. Also, people need to reduce misuse of ground water.
(iv) Improvement in Housing For the protection of environment, living places of the people should be made neat and clean. Houses should be constructed keeping in view the environmental challenges.
Long Answer (LA) Type Questions (5 Marks)
Question 11.
What are the various means by which countries are trying to strengthen their own domestic economies?
Answer:
The following are the various means through which the nations are trying to strengthen their own domestic economies
(i) Nations are forming various regional and economic groupings like SAARC, European Union, G-8, G-20, ASEAN, etc. in order to strengthen their economies through economic cooperation among the countries in the group to safeguard their common interests.
(ii) They are also trying to know and analyse the developmental process adopted by their neighboring nations, so as to evaluate their strengths and weaknesses and formulate policies accordingly.
(iii) Nations have also resorted to liberalising their economies by minimising government interference in economic activities. The economy is governed by market forces that promote efficiency and strengthen the economy.
(iv) Nations have also adopted the process of globalisation to integrate their economies with other economies of the world in order to provide wide international market for their domestic producers and attract foreign investment.
(v) In recent past, India managed to establish good domestic industries, that has not only helped in development of infrastructure but also led to increase in outsourcing services and inflow of foreign exchange.
Question 12.
From the following data, calculate the Net National Product at Market Price (NNPMP) by
(i) Expenditure method
(ii) Income method
| Items | ₹ (in crores) |
| Personal Consumption Expenditure | 700 |
| Wages and Salaries | 700 |
| Gross Business Fixed Investment | 60 |
| Gross Residential Construction Investment | 60 |
| Inventory Investment | 20 |
| Profits | 100 |
| Government Final Consumption Expenditure | 200 |
| Rent | 50 |
| Exports | 40 |
| Imports | 20 |
| Interest | 40 |
| Net Factor Income from Abroad | (-) 10 |
| Depreciation | 20 |
| Subsidies | 10 |
| Indirect Taxes | 20 |
| Mixed-Income of Self-employed | 140 |
Or
Find out the Net Value Added at Factor Cost (NVAFC) of a producing unit from the following data. What will be the value of national income in this situation?
| Items | ₹ (in lakhs) |
| Total Sales | 24,000 |
| Closing Stock | 4,200 |
| Opening Stock | 3,000 |
| Indirect Taxes | 1,200 |
| Subsidies | 900 |
| Depreciation | 1,800 |
| Purchase of Raw Material from Other Firms | 6,000 |
Answer:
(i) Net National Product at Market Price (NNPMP) by Expenditure Method
Gross Domestic Product at Market Price (GDPMP) = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation (Gross Business Fixed Investment + Gross Residential Construction Investment + Inventory Investment) + Net Exports
= 700 + 200 (60 + 60 + 20) + 20
= ₹1,060 crore
NNPMP = GDPMP + Net Factor Income from Abroad – Depreciation
= 1/160 + (-10) – 20 = 1,060 – 30
= ₹1,030 crore
(ii) Net National Product at Market Price (NNPmp )by Income Method
Net Domestic Product at Factor Cost
(NDPFC) = Compensation of Employees + Operating Surplus + Mixed Income
= 700 + (100 + 50 + 40) + 140
= 700 + 190 + 140
= ₹1,030 crore
NNPMP = NDPFC + Net Indirect Tax (Indirect Tax – Subsidies) + Net Factor Income from Abroad
= 1,030 + (20 – 10) + (-10)
= 1,030 + 10 – 10
= ₹1,030 crore
Or
Gross Value Added at Market Price (GVAMP) = Value of Output [Sales + Change-in-stock (Closing Stock – Opening Stock)] – Intermediate Consumption
GVAMP = 24,000 + (4,200 – 3 D00) – 6,000
GVAMP = 25,200 – 6,000
= ₹19,200 lakhs
Net Value Added at Factor Cost (NVAFC)
= GVAMP – Depreciation – Net Indirect Tax (Indirect Tax – Subsidies)
= 19,200 – 1,800 – (1,200 – 900)
= 19,200 – 2,100
= ₹17,100 lakh
National income is NNPFC. So, NNPFC = NVAFC + NFIA. As in this case NFIA is not given, so, assuming it to be zero, value of NNPFC will became equal to the value of NVAFC i.e., ₹17,100 lakhs.
Question 13.
(i) Briefly explain the components of aggregate supply.
(ii) If national income is ₹90 crore and consumption expenditure is ₹81 crore, find out Average Propensity to Save. When income rises to ₹100 crore and consumption expenditure to ₹88 crore, what will be the Marginal Propensity to Consume and Marginal Propensity to Save?
Answer:
(i) The two main components of AS are
- Consumption expenditure (C)
- Saving (S)
A major portion of income is spent on consumption of goods and services and the balance is saved.
Aggregate Supply/National Income = Consumption + Savings or Y = AS = C + S
(ii) Here, in first condition, Y = ₹90 crore C = ₹81 crore
Average Propensity to Save
\(\mathrm{APS}=\frac{S}{Y}=\frac{Y-C}{Y}=\frac{90-81}{90}=0.10\)
Again, when the income and consumption expenditure rise,
Y = ₹100 crore
C = ₹88 crore
ΔC = 88 – 81 = ₹7 crore
ΔY = 100 – 90 = ₹10 crore
Marginal Propensity to Consume (MPC)
\(=\frac{\Delta C}{\Delta Y}=\frac{7}{10}=0.70\)
Again, Marginal Propensity to Save (MPS)
= 1 – MPC = 1 – 07 = 0.30