SOLUTIONS
2025 BOARD EXAM
CBSE CLASS 12-HUMANITIES ECONOMICS Board Paper 2025 — Set 6
2025
ECONOMICS
CLASS 12-HUMANITIES
CBSE EXAMINATION PAPER-2025
ECONOMICS
(Solved)
General Instructions :
Read the following instructions carefully and follow them :
- This question paper contains 39 questions. All questions are compulsory.
- This question paper is divided into 5 sections.
- Section A – questions number 1 to 2 are case based questions
- Section B – questions number 3 to 21 are multiple choice questions
- Section C – questions number 22 to 27 are short answer type i
- Section D – questions number 28 to 35 are short answer type ii
- Section E – questions number 36 to 39 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
Read the following text carefully :
The National-Level Multi-State Cooperative Society recently approved by the Union Cabinet for promoting organic production and exports, will help the farmers to increase their income manifold.
The arrangements for testing of land and selection of natural form of products will be set up in each district in the coming five years. Government has also decided to setup a cooperative society in all Panchayats, which will ensure that the Central G reach the farmers. Wide use of urea has spoiled farm land, and lakhs of farmers have moved towards organic farming. To get better prices, there is a need for marketing and certification of such produce. Furthermore, steps must be taken to ensure that fake organic products do not hit the market.
On the basis of given text and common understanding, answer the following questions :
(1) Define organic farming.
(2) State any two benefits of organic farming.
(3) Explain the steps taken by the government to promote organic product.
Read the following text carefully:
The Union Budget 2025-26 introduces a series of measures aimed at strengthening the Micro, Small and Medium Enterprises (MSME) sector. It recognises the role of MSMEs as one of the key engines in India's journey of development, along with agriculture, investment and exports.
As a vital contributor to India's industrial landscape, the MSME sector plays a crucial role in manufacturing sector, exports and employment generation.
The new budgetary provisions aim to build on this strong foundation by fostering innovation, enhancing competitiveness and ensuring better access to resources.
Furthermore, the Government's ongoing initiatives like Udyam registration portal, PM Vishwakarma, PMEGP, SFURTI, and the Public Procurement Policy continue to demonstrate a combined effort towards integrating and empowering MSMES.
On the basis of given text and common understanding, answer the following questions:
(1) MSMEs play a pivotal role in the India's journey of development Do you agree with the given statement?" Give valid reason in support of your answer.
(2) Explain key measures initiated by the Government for strengthening MSMEs.
Section B
Read the following statements carefully:
Statement 1: Keeping other things constant, there exists positive correlation between the price of foreign exchange and its demand.
Statement 2: The foreign exchange rate indicates a country's purchasing power in international markets.
In the light of the given statements, choose the correct option from the following :
Statement 1 is false because a rise in the price of foreign exchange actually reduces demand for foreign exchange, as it increases the cost of purchasing foreign goods, leading to a decrease in imports. Statement 2 is true as it refers to the concept of purchasing power parity, indicating the significance of stable purchasing power in international markets.
Using the given information, complete the table:
(Choose the correct option)
Find Real GDP for 2014–2015 (i) GDP Deflator=(6.5 /Real GDP)×100=100⇒6.5/Real GDP=1⇒Real GDP=6.5
Find GDP Deflator for 2016–2017 (ii)
GDP Deflator=(97.2)×100=1.25×100=125
(i) Real GDP (2014–15) = 6.5 (ii) GDP deflator (2016–17) = 125
answer 6.5, 125
Commercial banks are regarded as money creators because:
(Choose the correct option)
Suppose, the consumption function is given as: C = 205 + 0.9 Y( where c= Total Consumption and Y = National Income) The value of Investment Multiplier (K) would be __________.
(Choose the correct option to fill in the blank)
Marginal Propensity to Consume (MPC) exhibits the slope of __________ function.
(Choose the correct option to fill in the blank)
Read the following statements carefully:
Statement 1: Open Market Operations refers to purchase/sale of Government Securities (G-Sec) by the Central Bank.
Statement 2: To decrease money supply, Central Bank will sell the Government Securities to commercial banks.
In the light of the given statements, choose the correct option from the following :
Aggregate expenditure in the economy during an accounting year is also known as __________.
(Choose the correct option to fill in the blank)
The 45° line in Keynesian economics indicates __________.
(Choose the correct option to fill in the blank)
Identify, which of the following is not a feature of physical capital. (Choose the correct option)
(i) Tangibility
(ii) Tradability
(iii) Immobility
The correct option is (ii) and (iii). Immobility is not a feature of physical capital because physical capital is generally mobile between countries. Tradability is also a feature of physical capital since it can be easily sold in the market. Therefore, the characteristics of immobility and tradability do not apply to physical capital.
Prime beneficiary of the Minimum Support Price (MSP) fixed by the government is _____________.
(Choose the correct option to fill in the blank)
The correct answer is 'Farmer' because the Minimum Support Price (MSP) is a policy instrument aimed at protecting the income of farmers by ensuring they receive a guaranteed price for their crops. This is explicitly mentioned in the context provided, which highlights that MSP is designed to benefit farmers by stabilizing their incomes.
Identify, the incorrect feature associated with the formal sector of employment in any economy. (Choose the correct option)
Read the following statements carefully :
Statement 1 : In order to address the problem of water and air pollution in India, the Government of India had established the Central Pollution Control Board (CPCB).
Statement 2 : Deforestation leads to the permanent destruction of indigenous forests.
In the light of the given statements, choose the correct option from the following :
Modernization is an important economic planning objective that focuses on ___________. (Choose the correct option to fill in the blank)
(i) Adoption of innovative technology
(ii) Bringing positive change in social outlook
(iii) Equal distribution of income and wealth
(iv) Abolition of intermediaries
Recently, India hosted and chaired the summit of ___________ one of the regional and economic groupings.
(Choose the correct option to fill in the blank)
Under ___________ unemployment the marginal productivity of a worker is equal to zero.
(Choose the correct option to fill in the blank)
____________ is one of the demographic indicators in which Pakistan is ahead of India and China.
(Choose the correct option to fill in the blank)
Outsourcing from India has become more intensified in recent times due to the expansion of the ___________ sector. (Choose the correct option to fill in the blank)
The correct option is 'Information Technology' because the context highlights the growth of the IT sector as a major factor in the intensification of outsourcing from India, which has facilitated efficient communication and numerous outsourcing services to developed countries.
Suppose the percentage of casual workers rises in an economy as compared to the regular workers. This situation may be known as ___________ of workforce. (Choose the correct option to fill in the blank)
(i) Formalisation
(ii) Casualisation
(iii) Unemployment
Section C
Calculate the value of 'Sales' from the following data:
Calculate Value of Output
Net Value Added at Factor Cost (NVA<sub>FC</sub>) = ₹2,000 lakh
Consumption of Fixed Capital (CFC) = ₹700 lakh
Intermediate Consumption = ₹3,000 lakh
Value of Output=2000+700+3000=₹5700 lakh
Apply Sales Formula
Opening Stock = ₹100 lakh
Closing Stock = ₹600 lakh
Sales=5700−600+100=₹5200 lakh
State and explain any two precautions that must be taken while estimating national income by income method .
Identify and explain any one function of Central Bank as indicated in the image given below :
Many economists believe that India paid a very heavy price for the British industrialisation, by becoming their feeder economy. Justify the given statement with any one valid argument.
Some economists argue that :
Post-1991 economic reforms, globalisation played a major role in poor performance of the industrial sector.
Present your arguments to justify the given statement.
Critically appraise, infrastructural development in India during the British rule.
Section D
Compare and analyse the following information related to distribution of employment in India :
State and explain any two steps undertaken by the Government of India for the protection and promotion of Small-scale Industries between 1950 -1990.
Elaborate the role of land ceiling as an institutional reform in agricultural sector during the planning period of India.
Argue in favour of the need for different forms of government intervention in education and health sectors.
(i) Distinguish between Balance of Payments and Balance of Trade.
(ii) Define Current Account Surplus.
(i) Using suitable example, distinguish between Foreign Direct Investments (FDI) and Foreign Institutional Investments (FII).
(ii) State one example of External Assistance as a component of capital account.
Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) are two forms of foreign investments but differ significantly. FDI refers to an investment made by a company or individual in one country in business interests located in another country. For example, a Japanese automobile company setting up a manufacturing plant in India represents FDI, as it involves establishing a long-term, direct interest in the local economy. On the other hand, FII pertains to investments in the financial markets of a country, primarily through stocks and bonds, without acquiring direct control or management of the companies. For instance, a US-based mutual fund investing in Indian equities is an example of FII. While FDI is aimed at gaining a lasting interest and control, FII focuses on portfolio investments with intent for profits through stock price appreciation, thus reflecting a more passive approach. One prominent example of external assistance as a component of the capital account is the net external assistance recorded in the financial statements. In the provided context, this is represented by external assistance netting at 0.15 million USD. This type of assistance often comes as loans or grants from international organizations or foreign governments, aimed at promoting economic development. Such assistance can support various sectors, including infrastructure, health, and education, thus enhancing a country's growth potential and fiscal stability.
Margin requirement are extrements are extremely helpful in correcting the situation of deflationary gap in an economy. Justify the given statement with valid arguments .
(i)'In an economy, ex-ante investment (I) exceeds ex-ante savings (S)'.
Explain the likely impact of the given situation on output, employment and income.
(ii) Define excess demand.
Section E
(i) China used the tool of Special Economic Zones for its economic development very effectively. Justify the given statement with valid explanation.
(ii) Mention and discuss any two indicators of human development, where China has performed well.
China effectively used Special Economic Zones (SEZs) as a strategy to stimulate its economic development. By establishing SEZs, the government aimed to attract foreign investment and enhance manufacturing capabilities. These zones provided favourable conditions for businesses, including tax incentives, simplified regulations, and infrastructure support. This approach allowed China to maintain rapid industrial growth and a high GDP per capita, surpassing the growth rates of India and Pakistan. While India and Pakistan struggled with privatization efforts, China leveraged its market system to generate social and economic opportunities without compromising political stability. The SEZs also ensured rural social security by retaining collective land ownership, while individuals cultivated the land. Consequently, China managed to maintain near double-digit growth in the 1980s, alleviating poverty and boosting economic prospects, contrasting sharply with the stagnation seen in its regional counterparts.
China has demonstrated notable improvements in various human development indicators, with life expectancy and literacy rates being two prominent examples. Life expectancy in China has significantly increased over the years, reaching approximately 77 years by 2019. This remarkable statistic reflects the advancements in healthcare, nutrition, and living conditions, which have collectively contributed to healthier populations. Additionally, China boasts a high literacy rate, which stood at around 96% during the same period. This achievement can be attributed to the comprehensive education policies implemented by the government, focusing on accessibility and quality of education. The emphasis on education has empowered individuals, contributed to economic growth, and enhanced overall quality of life. Together, these indicators underscore China's commitment to improving human development and highlight its position as a leader compared to India and Pakistan.
(i) Explain any two similar developmental strategies followed by India and Pakistan in post 1947 era.
(ii) State and discuss any two reasons for slow economic growth in Pakistan.
(i) Domestic income is always less than national income. Do you agree with the given statement ? Support your answer with valid arguments.
(ii) Distinguish between positive externalities and negative externalities with suitable examples.
(i) In a two-sector economy, consumption expenditure by households is always equal to aggregate expenditure on goods and services produced by the firm. Do you agree with the given statement ? Support your answer with valid explanation.
(ii) Problem of Double Counting leads to overestimation of output in an economy. Justify the given statement with the help of suitable example.
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