SOLUTIONS
2024 BOARD EXAM
CBSE CLASS 12-HUMANITIES ECONOMICS Board Paper 2024 — Set 3
2024
ECONOMICS
CLASS 12-HUMANITIES
CBSE EXAMINATION PAPER-2024
ECONOMICS
(Solved)
General Instructions :
Read the following instructions carefully and follow them :
- This question paper contains 38 questions. All questions are compulsory.
- This question paper is divided into 5 sections.
- Section A – questions number 1 to 5 are case based questions
- Section B – questions number 6 to 20 are multiple choice questions
- Section C – questions number 21 to 26 are short answer type i
- Section D – questions number 27 to 34 are short answer type ii
- Section E – questions number 35 to 38 are long answer
- There is no overall choice given in the question paper. However, an internal choice has been provided in few questions.
- Use of calculator is NOT allowed.
Section A
(1) Assertion (A): Voluntarily unemployed people are those able-bodied people who are not willing to work at the prevailing wage rate. Reason (R): There exists zero involuntary unemployment at full employment level of equilibrium.
[1 Marks](1) Statement 1: Reserve ratio and Credit creation process are inversely related. Statement 2: Central Bank of an economy performs the vital function of controlling the credit creation process. Choose the correct alternative from the following:
[1 Marks](1) Assertion (A): The agricultural sector under British rule was primarily the base of the sectoral growth of India. Reason (R): British rulers wanted to take maximum advantage of the Indian agricultural output, for growth of industries in England.
[1 Marks](1) State the meaning of green growth and net zero emissions.
[2 Marks](2) Discuss briefly the interconnection between green growth and net zero emissions.
[3 Marks](3) Illustrate any one factor to promote net zero emission.
[1 Marks]Read the following text carefully :
In the contemporary world with a lot of sustainable development concerns, green growth and net zero emissions are two important concepts which are generally discussed together. These two concepts are essential for the future of the Earth, as by working together on them we can create a more sustainable future for ourselves and for the generations to come. Green growth refers to, the economic growth that is achieved in a way that minimizes environmental impact, whereas, net zero emission is the state of achieving balance between anthropogenic emission of greenhouse gases and removal of such emissions.
There exists a robust connection between the two concepts :
(1) Green growth can help to reduce greenhouse gas emissions, which is essential for achieving net zero emissions.
(2) Green growth can help to create jobs and boost economic growth, which can help to make it more affordable for countries to invest in net zero emissions technology.
A nation can do a lot to promote these two factors together, like :
(a) Investing in renewable energy sources which do not produce greenhouse gases.
(b) Adopting energy efficient measures, such as insulation and other such appliances which can help to reduce energy consumption.
(c) Altering transportation habits, like adopting walking, biking and using public transportation as they are lower-carbon ways to travel.
On the basis of the given text and common understanding, answer the following questions :
(1) State the meaning of green growth and net zero emissions.
(2) Discuss briefly the interconnection between green growth and net zero emissions.
(3) Illustrate any one factor to promote net zero emission.
Section B
Read the following statements : Assertion (A) and Reason (R). Choose the correct alternative from those given below :
Assertion (A) : Voluntarily unemployed people are those able bodied people who are not willing to work at the prevailing wage rate.
Reason (R) : There exists zero involuntary unemployment at full employment level of equilibrium.
Alternatives :
Identify which of the following statements is incorrect with reference to an economy.
According to the Reserve Bank of India's RBI's Statistical Supplement released on 19th May, 2023 :
" India's foreign exchange reserves grew for the third straight week and reached near an approximate level of $ 600 Billion "
The above situation will _________ the __________ side of Balance of Payments account of India. (Choose the correct alternative to fill in the blanks)
Read the following statements carefully :
Statement 1 : Reserve ratio and Credit creation process are inversely related.
Statement 2 : Central Bank of an economy performs the vital function of controlling the credit creation process.
In light of the given statements, choose the correct alternative from the following :
In order to discourage any fall in Aggregate Demand, the Government of India may _________ the _________.
(Choose the correct alternative to fill in the blanks)
Read the following statements carefully :
Statement 1 : Constant rate of change of consumption (△C) with respect to change in income ( △Y), is the reason for the straight line consumption curve.
Statement 2 : Marginal rate of change between consumption and income is defined as Average Propensity to Consume (APC).
In the light of the given statements, choose the correct alternative from the following :
Read the following statements : Assertion (A) and Reason (R). Choose the correct alternative from those given below :
Assertion (A) : In case of an unfavourable Balance of Trade, the Current Account of the nation may be in surplus.
Reason (R) : Net invisible receipts of a nation can exceed the Net visible receipts.
Alternatives :
Which of the following is/are not an objective of regulated agricultural market ?
(i) To discourage improvement of marketing infrastructure for farmers.
(ii) To make marketing systems efficient and effective for farmers to get best price for their products.
(iii) To discourage farmers to improve the quantity and quality of their produce.
Alternatives :
Read the following statements carefully :
Statement 1 : Land ceiling was one of the Government policies to promote equity in the agriculture sector.
Statement 2 : Land reforms resulted in abolition of the Zamindari system in the post independence period.
In light of the given statements, choose the correct alternative from the following :
Read the following statements : Assertion (A) and Reason (R). Choose the correct alternative given below :
Assertion (A) : Goods and Services Tax (GST) was implemented by the Government of India on 8th November, 2016.
Reason (R) : GST was introduced to implement a unified indirect tax system in India.
Alternatives :
Identify which of the following is not a member nation of G20.
Production of varied forms of crops against one specialised crop is called diversification of ___________.
(Choose the correct alternative to fill in the blank)
Identify which of the following is not a Human Development Indicator (HDI).
The correct option is 'Unemployment'. Human Development Indicators (HDIs) typically include metrics like Maternal Mortality Rate, Life Expectancy at Birth, and Adult Literacy Rate, which measure various aspects of health, education, and overall development. Unemployment, while significant for economic analysis, is not classified as an HDI.
Read the following statements carefully :
Statement 1 : Human development is based on the idea that education and health are integral to human well-being.
Statement 2 : Human capital treats humans as a means to an end.
In light of the given statements, choose the correct alternative from the following :
On the basis of the data given below, identify the incorrect statement with reference to annual growth of GDP (%) :
Alternatives :
Section C
On the basis of the given data, estimate the value of National Income:
To estimate National Income using the Income Method, we calculate the aggregate value of all factor incomes such as wages, rent, interest and profits.
Steps to estimate National Income:
1. Collect data on incomes earned by different factors of production in the economy.
2. Sum up wages paid to labour, interest earned by capital, rent received by landowners and profits of entrepreneurs.
3. Adjust for any indirect taxes minus subsidies so that only factor incomes are considered.
4. The resulting total is the National Income.
If the data includes growth rate of National Income, for example 18% growth in 1994-95, National Income can be estimated by increasing the previous year’s National Income by that percentage.
This method ensures measuring the actual income generated in the economy, which reflects the country’s economic performance effectively.
(a) Imports of Goods and Services: When residents of a country import more goods and services from abroad, they need more foreign currency to pay for these imports, which increases the demand for foreign exchange.
(b) Foreign Investment and Travel: If a country's citizens invest or travel more in foreign countries, they require foreign currency for investment or travel expenses, leading to higher demand for foreign exchange.
These factors increase the demand curve for foreign exchange, shifting it to the right. However, the actual impact depends on other variables like price elasticity and income levels abroad.
State any three precautions to be taken while estimating National Income by Expenditure Method.
1. Only the final goods and services should be included to avoid double counting. Intermediate goods used in production must be excluded.
2. Transfer payments like pensions, scholarships, and gifts should not be included as they do not represent payments for goods or services.
3. Depreciation or capital consumption allowance should be excluded because it does not represent new production during the year but the wear and tear of existing assets.
"Trade and Investment Policy of India had undergone comprehensive changes in the post reforms period of 1991."
Do you agree with the given statement ? Justify your answer with any two valid arguments.
Yes, I agree that India's Trade and Investment Policy underwent comprehensive changes after the 1991 reforms.
(a) Firstly, the government introduced liberalisation by removing many import restrictions and industrial licensing requirements. This helped industries to access better technology and compete internationally.
(b) Secondly, foreign investment policies were relaxed which encouraged greater foreign direct investment (FDI) in India. This brought in not only capital but also advanced technology and management skills, boosting economic growth.
These changes shifted India from an inward-oriented economy to a more open and globally competitive one.
Discuss any two salient features of Indian industrial sector during the period of 1950-1990.
(1) Diversification of Industry: Initially, Indian industry was mainly focused on cotton textiles and jute. However, by 1990, the industrial sector became well diversified with growth in steel, chemicals, and machinery. This was largely due to the development of the public sector which played a major role in setting up new industries.
(2) Increase in Industrial Contribution to GDP: The contribution of the industrial sector in GDP increased significantly from about 13% in 1950-51 to nearly 24.6% in 1990-91. This shows that industry played a larger role in the Indian economy, indicating overall economic development and growth during this period.
"In India, National Education Policy 2020 has stressed a lot on in-service training of the teachers."
(i) Identify the source of Human Capital Formation (HCF) indicated in the aforesaid statement.
(ii) Elaborate the likely impacts of this source on the economic development of India.
Section D
In a two-sector economy, which includes only households and firms, aggregate supply has two main components:
(a) Consumption Expenditure (C): This is the total value of goods and services that households plan to buy for personal use. It forms part of the aggregate supply as it reflects demand for products already produced.
(b) Investment Expenditure (I): This is the total spending by firms on capital goods like machinery, equipment, or inventories. It is an important part of aggregate supply because it adds to the future production capacity of the economy.
Therefore, the total aggregate supply (AS) in a two-sector economy is the sum of consumption expenditure and investment expenditure, i.e., AS = C + I. This shows the total goods and services firms are willing to produce and supply at different levels of income or GDP in the economy.
"Open market operations by Reserve Bank of India (RBI) help in regulating money supply in the economy."
Justify the given statement with valid arguments."
When RBI buys government bonds: It pays by issuing cheques which add to the reserves of the banking system. This increases the money supply as banks have more funds to lend.
When RBI sells government bonds: Buyers pay money to RBI which reduces the reserves of banks. This decreases the money supply as banks have less money to lend.
Thus, through OMOs, RBI can increase or decrease the money available in the economy which helps in controlling inflation and stabilizing the economy effectively.
Elaborate the 'Government's Bank and Advisor function of the Central Bank of a nation.
Advisor Function: The central bank advises the government on financial and monetary matters. It gives suggestions related to currency, credit, and banking policies to help maintain economic stability. It also advises on the best ways to manage the economy's money supply and inflation. This advisory role helps in framing better economic policies for the country.
Study the given image carefully :
Identify the situation depicted in the image and suggest the impact of the indicated situation in the Indian economy.
Note: The following question is for the Visually Impaired Candidates only in lieu of Q. No. 32
Impact on Indian economy: This situation highlights the transformation of India into a knowledge economy by emphasizing the importance of skill development using technology. Skilled youth trained in digital tools can contribute to innovation, improve productivity, and create new job opportunities. This leads to sustainable economic growth, reduces unemployment, and helps India compete globally in technology-driven sectors. Hence, education and empowerment through technology are vital for India’s future economic development.
State and elaborate whether the following statements are true or false, with valid arguments :
(i) Organic Farming has essentially become the need of the hour.
(ii) In the recent past, the Government of India has taken crucial steps, like Jan-Dhan Yojana, for efficient allocation of financial resources.
(ii) In the recent past, the Government of India has taken crucial steps, like Jan-Dhan Yojana, for efficient allocation of financial resources: This statement is true. The Jan-Dhan Yojana was implemented to promote financial inclusion by providing banking facilities to the unbanked population. It helps efficient allocation and direct transfer of financial resources to individuals, reducing leakages and improving rural development by giving farmers and rural people access to credit and savings in a transparent way.
From the given data, compare and analyse India and China's sectoral contribution towards Gross Value Added (GVA).
1. Agriculture Sector: India has a significantly higher contribution from agriculture at 16% compared to China which has only 7%. This shows India still relies more on agriculture in its economy.
2. Industry Sector: Although the exact percentage for India is not given here, it is mentioned that China has 41% contribution from industry which is relatively high, indicating China is more industrialized.
3. Services Sector: In both countries, the service sector contributes the highest share of GVA, showing a shift towards a service-oriented economy.
Analysis: Overall, China has moved more towards industry and services with a lower agricultural contribution, reflecting a more developed and diversified economy. India, while having a strong service sector, still has a relatively larger agricultural share, indicating its economy is still transitioning. This pattern is typical in economic development where countries move from agriculture to industry and then to services for growth.
(i) Define worker - population ratio and describe its usefulness.
(ii) State the meaning of Disguised Unemployment'.
(a) For a hypothetical economy, the government incurs an additional investment expenditure of ₹ 5,000 crore. Assuming that the Marginal Propensity to Save (MPS) becomes half from its present level of 20%, estimate the change in income due to this fall in Marginal Propensity to Save (MPS).
(b) State the meaning of autonomous investment .
Section E
(i) Every coin has two sides debate over farm subsidies is one such classic example of the same
Justify the given statement with two arguments each in favour of and against the continuation of the farm subsidies.
(ii) State the importance of "Growth with equity" of Indian economic planning.
"The real motive behind infrastructural development in India was to strengthen the British interests."
Do you agree with the given statement ? Justify your answer with valid arguments.
(ii) Navratna policy has facilitated the maintenance, promotion and disinvestment of Public Sector Undertakings (PSUs).
Justify the given statement with valid explanation.
(i) Explain the concept of circular flow of income in a two-sector economy.
(ii) Gross Domestic Product (GDP) and sum of Gross Value Added (GVA) in an economy are always equal
Justify the given statement with valid arguments.
(ii) Justification for Equality of GDP and Sum of GVA: Gross Domestic Product (GDP) is the total value of all goods and services produced within an economy during a period. The Gross Value Added (GVA) is the value added by each firm or industry after subtracting the cost of intermediate goods. When we sum up the GVA of all firms or industries in the economy, it equals the total output of the economy, which is GDP. Mathematically, GDP = GVA1 + GVA2 + ... + GVAn. This equality holds because GDP by the product method is calculated by adding the value added at each stage of production. Therefore, sum of GVA across all sectors correctly represents the GDP in an economy.
(i) Gross Domestic Product (GDP) Deflator is represented by the ratio of Real GDP and Nominal GDP."
Do you agree with the given statement ? Justify your answer with valid arguments and a hypothetical numerical example.
(ii) State the meaning of 'Income from Property and Entrepreneurship'.
(i) GDP Deflator and Its Correct Representation:
I do not agree with the statement that GDP Deflator is the ratio of Real GDP to Nominal GDP. In fact, GDP Deflator is the ratio of Nominal GDP to Real GDP. Nominal GDP measures the value of goods and services at current market prices, whereas Real GDP measures the same but at constant prices, removing the effect of price changes. GDP Deflator is an index that shows how much prices have changed, calculated as:
GDP Deflator = (Nominal GDP ÷ Real GDP) × 100
For example, if the Nominal GDP is 1200 crore and the Real GDP is 1000 crore, then GDP Deflator = (1200 ÷ 1000) × 100 = 120. This means prices have increased by 20% compared to the base year.
(ii) Income from Property and Entrepreneurship:
Income from property and entrepreneurship refers to the earnings generated by individuals or entities through ownership of assets or by running businesses. 'Income from Property' includes rent, interest, and dividends earned by owning land, buildings, or financial assets. 'Income from Entrepreneurship' refers to the profits earned by carrying out business activities, which reward the entrepreneur’s efforts and risk-taking.
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