CBSE Class 12 2025 Economics 58-6-1 Question Paper Set-1: Download Solutions with Answer Key

If the value of Investment Multiplier (K) is 5, the relevant saving function would be ___________.

• (A) \(S = -60 + 0.25Y\)
• (B) \(S = -60 + 0.75Y\)
• (C) \(S = -60 + 0.20Y\)
• (D) \(S = -60 + 0.60Y\)

Identify, which of the following items will not be included in estimating National Income of India.

• (A) Salary to Indian residents working at the Russian Embassy in India
• (B) Income generated from smuggling
• (C) Payments to farm workers in the form of foodgrains
• (D) Interest paid by a firm to a bank

If an upward sloping straight line consumption function makes an intercept at the Y-axis at a positive coordinate, it implies that Marginal Propensity to Consume (MPC) _______ and Average Propensity to Consume (APC) _______ as the income increases.

• (A) remains constant, rises
• (B) rises, rises
• (C) remains constant, falls
• (D) falls, falls

Read the following statements – Assertion (A) and Reason (R) carefully. Choose the correct option from those given below :


Assertion (A): Other things remaining constant, devaluation of domestic currency may lead to rise in National Income of the nation.


Reason (R): Devaluation of domestic currency refers to reduction in the value of domestic currency by the government with respect to foreign currency under the fixed exchange rate system.

• (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, but 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.

Central Bank can decrease the money supply in the economy by ________ .

• (A) lowering the cash reserve
• (B) increasing the bank rate
• (C) lowering the bank rate
• (D) purchase of G-Secs (Government Securities)

If the total credit created by the banks is ₹ 500 and Reserve Ratio is 20%, the value of primary deposits would be ________ .

• (A) ₹ 200
• (B) ₹ 300
• (C) ₹ 100
• (D) ₹ 500

Using the given information, complete the following table:

Income (Y) (in ₹ crore) & Savings (in ₹ crore) & Consumption (in ₹ crore) & Average Propensity to Consume (APC)
0 & (i) & 30 & -
100 & 0 & 30 & 1
200 & 30 & 170 & 0.85
300 & 60 & 240 & 0.8

Identify, which of the following is not a source of demand for foreign exchange.

• (A) Imports of goods and services
• (B) Gifts by Indians to their families living abroad
• (C) Indian tourists visiting foreign countries
• (D) Loans from Rest of the World

Suppose in an economy, planned spending is greater than planned output. Identify the correct option with respect to effects on the economy:

(i) Decrease in planned inventories in the economy

(ii) Rise in National Income

(iii) Decrease in real output level in the economy

(iv) Decrease in employment level in the economy

• (A) Only (i)
• (B) (i) and (ii)
• (C) (iii) and (iv)
• (D) (ii), (iii) and (iv)

Read the following statements carefully:


Statement 1: The price of a given currency in terms of another is known as bank rate.


Statement 2: Demand curve for foreign exchange is a downward sloping curve.

• (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.

Calculate Net Domestic Product at Market Price (NDP_MP) from the data given below:

S. No. & Particulars & Amount (in ₹ lakh)
(i) & Gross Domestic Product at Factor Cost & 2200
(ii) & Subsidies & 50
(iii) & Indirect Taxes & 70
(iv) & Net Factor Income from Abroad & 100
(v) & Consumption of Fixed Capital & 150
(vi) & Net Exports & 40

Estimate the value of Aggregate Demand (AD) in an imaginary economy:

State the meaning of propensity to consume.

"An economy is operating at under-employment level of income." What does this situation indicate? Discuss any one fiscal measure to tackle this situation.

Elaborate using a hypothetical numerical example, how a given initial increase in investment affects the level of final income of the economy.

"In the 1990s, on the advice of Reserve Bank of India (RBI), the Government of India took a decision of hypothecation of gold reserves to different nations."

In the light of the above statement, discuss briefly the role of the Central Bank as Banker, Agent, and Adviser to the Government.

(a) Describe how the Government’s role in providing public goods impacts community welfare.

(i) Suppose, there are only three firms in a hypothetical economy, viz. A, B, and C. During a given period of time, the following transactions were undertaken by them:


(I) Firm A sold goods worth ₹ 2,000 to Firm B and ₹ 1,200 to Firm C.

(II) Firm B sold goods worth ₹ 1,100 to Firm A and ₹ 3,500 to Firm C.

(III) Firm C sold to households for final consumption goods worth ₹ 5,700.


Estimate the value of Net Domestic Product at Market Price (NDP\(_{MP}\)) assuming depreciation to be ₹ 120.

Explain the likely impact of construction of 2000 new schools providing high-quality education in a nation on Gross Domestic Product and welfare in an economy.

(i) Distinguish between Real Gross Domestic Product (GDP) and Nominal Gross Domestic Product.

As per a news dated April 11, 2023:

“Electric Vehicle sales crossed one million mark in FY 2023.”

Analyse its impact on Gross Domestic Product (GDP) and economic welfare.

Read the following statements – Assertion (A) and Reason (R) carefully. Choose the correct alternative from those given below:


Assertion (A): The year 1921 is called the Year of Great Divide.

Reason (R): After the year 1921, India experienced a sharp rise in its population growth rate.

• (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, but 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.

Mao initiated the 'Great Leap Forward' movement in the year .................

• (A) 1951
• (B) 1955
• (C) 1958
• (D) 1962

"The Indian Government adopted a policy of fixing maximum land holding limit (ownership) for an individual."

\text{It is commonly known as .............

• (A) Green Revolution
• (B) Land Ceiling
• (C) Marketable Surplus
• (D) Golden Revolution

Study the following image and identify the measure adopted by the Government to improve agricultural marketing.


Based on the image, the measure adopted is a regulated market system where agricultural produce is bought and sold in a regulated environment to ensure fair prices and reduce exploitation.

• (A) Cooperative credit societies
• (B) Regulated markets
• (C) Transportation facilities
• (D) Dissemination of information

Identify, which of the following correctly defines liberalization.

• (A) Outright sale of part of shares of Public Sector Undertakings (PSUs)
• (B) Increased integration with the rest of the world
• (C) Removal of restrictions imposed by government on different sectors of the economy
• (D) Focus on import substitution

In China, under ............, peasants were provided with pooled land to create larger fields that could yield greater output and they shared farm implements.

• (A) Joint Farming System
• (B) Commune System
• (C) Great Proletarian Cultural Revolution
• (D) Green Revolution

White Revolution is associated with ............

• (A) Horticulture
• (B) Fisheries
• (C) Dairy Production
• (D) Animal Husbandry

................ indicator may be defined as the measure of the extent of demographic participation in social and political decision-making.

• (A) Economic
• (B) Liberty
• (C) Health
• (D) Demographic

Read the following statements carefully:


Statement 1: Employment is an activity which enables a person to earn means of livelihood for his/her family.


Statement 2: A worker is one who contributes to the process of Gross Domestic Product (GDP) by rendering his productive services.

• (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.

Which of the following country/countries followed the Five Year Planning structure of economic development?


\text{(i) India \quad (ii) China \quad (iii) Pakistan \quad (iv) USA

• (A) (i), (ii) and (iii)
  (B) (ii) and (iii)
  (C) (i) and (iv)
  (D) Only (iv)

(a) "During the British rule, the contribution of the industrial sector to the Gross Domestic Product (GDP) remained very low."

Justify the given statement with valid arguments in support of your answer.

Explain ‘Investment in Education’ as a source of human capital formation.

Evaluate any two factors that led to the rapid growth in economic development in China.

"IT can play a critical role in achieving sustainable development and food security in the 21st century in the country."

Justify the given statement with valid arguments.

Explain the importance of credit availability in rural development.

"It is necessary to generate more employment in the formal sector rather than in the informal sector."

Justify the given statement with valid arguments.

(i) "Globalisation has been a process for India with only positive results."

Defend or refute the given statement with valid explanation.

Discuss briefly the role of small scale industries in generating employment and equity in India under the planning period.

(a) State the meaning and objective of green finance.