AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

SAMPLE PAPER-2

SECTION A – MACRO ECONOMICS

Q.1. Read the following statements carefully: (1)

Statement 1: A tax system that is progressive applies higher tax rates to higher levels of income.
Statement 2: A regressive tax is one where the average tax burden decreases with income.
In light of the given statements, choose the correct option from the following:
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.

Q.2. Read the following statements: Assertion (A) and Reason (R). (1)
Choose the correct option from those given below:
Assertion (A): Highway and road works are generally announced in the government budget.
Reason (R): Such announcement will increase revenue expenditure of the government.
Options:
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.

Q.3. Read the following figure carefully and choose the correct pair from the option given below: (1)

Options:
A. A - Revenue Expenditure; B - Fiscal Deficit B. A - Revenue Expenditure; B - Fiscal Budget
C. A - Capital Budget; B - Revenue Expenditure D. A - Revenue Expenditure; B - Capital Budget

Q.4. “Fiscal policy is a tool used by the government to stabalise the economy and promote economic growth.”
How does fiscal policy aim to stabilise the economy? (Choose the correct option) (1)
A. By controlling interest rates B. By managing government spending and taxation
C. By regulating international trade D. By controlling the money supply

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Q.5. While financing a deficit, under which measure government can print more currency?
(Choose the correct option) (1)
A. Disinvestment B. Deficit Financing
C. Issuing Bonds D. None of These

Q.6. Flow of Goods and Services and factors of production across different sectors in a barter economy is known
as________. (Choose the correct option to fill up the blank) (1)
A. Monetary Flow B. Circular Flow
C. Capital Flow D. Real Flow

Q.7. On the basis of the given bars, identify the percentage change in the collection of GST in February 2019-20. (1)

(Choose the correct option)

Options:
A. Negative B. 8.10%
C. 8.34% D. 8.20%

Q.8. The shackles of agriculture during the colonial rule was permanently broken by the given revolution that
resulted from the application of____________. (1)
(i) High Yielding Varieties (HYV) (ii) Mechanisation of Agriculture
(iii) Chemical Fertilisers and Pesticides (iv) Organic Fertilisers and Pesticides
(Choose the correct option to fill up the blank)
Options:
A. (i), (ii) and (iv) B. (i), (ii) and (iii)
C. (ii), (iii) and (iv) D. (i), (iii) and (iv)

Q.9. Current account is in ‘Balance’ when: (Choose the correct option) (1)
A. Receipts on Current Account < Payments on Current Account
B. Receipts on Current Account > Payments on Current Account
C. Receipts on Current Account = Payments on Current Account
D. None of These

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Q.10. Find the missing figures and choose the correct option. (1)

Income (Y) Consumption (C) Change in Consumption Change in Income MPC

0 300 - - -
200 350 50 ...(i)... 0.25
400 400 ...(ii)... 200 0.25
600 450 50 200 ...(iii)...
800 500 50 200 0.25
Options:
A. 50, 200, 0.25 B. 200, 50, 0.25
C. 50, 200, 0.50 D. 200, 50, 0.50

Q.11. “Foreign Institutional Investors (FIIs) remained net seller in the Indian capital markets over the last few
weeks”. —The Economic Times State and discuss the likely effects of the given statement on foreign exchange rate
with reference to the Indian Economy. (3)

Q.12. (A) Calculate intermediate consumption from the following: (3)

[Link] Items Amount (in ₹ lakh)

(i) Value of Output 2,000
(ii) Depreciation 40
(iii) Subsidy 10
(iv) Sales Tax 30
(v) Net Value Added at Factor Cost (NVAFC) 1,600
OR
Q.12. (B) If the Real GDP is Rs.300 and Nominal GDP is Rs.330, calculate the Price Index (base = 100). (3)

Q.13. Explain the concept of ‘Excess demand’ with the help of a diagram. (4)

Q.14. (A) Explain the concept of ‘deficient demand’ with the help of a suitable diagram. (4)
OR
Q.14. (B) Explain any one fiscal and one monetary measures to correct the deflationary gap. (4)

Q.15. Explain the concept and working of investment multiplier with the help of a suitable schedule. (4)

Q.16. Read the following text carefully and discuss briefly the relevant function of the Central Bank, indicated. The
Reserve Bank of India (RBI) is the central bank of India whose primary function is to manage and govern the financial
system of the country. It is a statutory body established in the year 1935 under the Reserve Bank of India Act, 1934.
The central bank regulates the issue and supply of the Indian rupee. It also looks after the government’s money. The
central bank plays the role of the bankers’ bank and regulates the banking sector. It also plays an important role in
India’s development story by supporting the government in its developmental projects and policies. (6)

Q.17. (A) Explain the precautions that should be taken while estimating national income by value added method.(6)
OR
Q.17. (B)
(I) Distinguish between stock and flow variables with suitable examples. (3)

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

(II) Calculate Gross Domestic Product at Factor Cost (GDPFC) from the following data: (3)

[Link] Items Amount (in ₹ lakh)

(i) Gross National Product at Factor Cost (GNPFC) 3,750
(ii) Compensation of Employees 2,000
(iii) Net Exports (-) 50
(iv) Profit 700
(v) Net Domestic Capital Formation 1,000
(vi) Opening Stock 150
(vii) Closing Stock 200
(vii) Gross Domestic Fixed Capital Formation 1,050
(ix) Interest 600
(x) Rent 400
(xi) Factor Income from Abroad 20

SECTION B – INDIAN ECONOMIC DEVELOPMENT

Q.18. Read the following statements carefully: (1)

Statement 1: Environment is able to perform its functions easily as long as the demand on these functions is within
its carrying capacity.
Statement 2: The Environment (Protection) Act was in passed 1990.
In light of the given statements, choose the correct option from the following:
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.

Q.19. Read the following statements: Assertion (A) and Reason (R). (1)
Choose the correct option from those given below:
Assertion (A): Disguised unemployment is present in India.
Reason (R): Agricultural productivity at the margin is close to zero in disguised unemployment.
Options:
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.

Q.20. When extraction is above the rate of regeneration of the resource and the wastage are outside the absorptive
capacity of the environment, then environment fails to perform its one of the vital function. What is that function of
environment? (Choose the correct option) (1)
A. It supplies resources B. It assimilates waste
C. It sustains life D. It provides aesthetic services

Q.21. Small Finance Banks had mobilised deposits of 82,488 crores and extended credit of 90,576 crores to small and
marginal farmers and Micro, Small and Medium Enterprises (MSMEs) by the end of FY 2019-20. How will it affect the
economy? (Choose the correct option) (1)
A. Economic strengthening of rural areas B. Financial inclusion of people
C. Growth of agriculture sector become faster D. All of these

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Q.22. Jobless growth leads to unemployment because________. (Choose the correct option to fill up the blank) (1)
A. GDP growth is slow B. Labour refuses to migrate
C. Growth is due to technology D. Labour is very expensive

Q.23. “Green revolution was a major reason of rise in productivity of farming”.

What is/ are the advantage(s) of conventional farming methods? (Choose the correct option) (1)
A. Higher Output B. Cost Effective
C. Wider Range D. All of These

Q.24. Due to the recent efforts of which international body the Indian government, initiated the modernization of
informal sector? (Choose the correct option) (1)
A. WTO B. World Bank
C. G-20 D. International Labour Oganisation

Q.25. From the given image, it is clear that outsourcing to India is not always good for developed countries. (1)

Select the reason(s) for the same. (Choose the correct option)
Options:
A. Leads to managerial interference B. Leads to unemployment in their country
C. Neither (a) nor (b) D. Both (a) and (b)

Q.26. Along with horticultural crops, golden revolution caused an increase in the production of_______.
(Choose the correct option to fill up the blank) (1)
A. Milk B. Honey
C. Livestock D. Dry Fruits

Q.27. From the set of terms given in Column I and corresponding facts given in Column II.
Choose the correct pair of statements: (1)

Column I Column II
(a) Economic Reforms in China i 1998
(b) Great Leap Forward Campaign ii 1968
(c) Great Proletarian Cultural Revolution iii Between 1980-1984
(d) Special Economic Zones iv 1975
Options:
A. (a)-i B. (b)-ii
C. (c)-iii D. (d)-iv)

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Q. 28. Elaborate the exploitative nature of the colonial government in India with the help of suitable examples. (3)

Q.29. (A) Why were the benefits of Green Revolution restricted to few states and few crops in initial stages of
planning? Discuss? (3)
OR
Q.29. (B) How did the government promote regional equality in industrial development? (3)

Q.30. Interpret the given picture on account of current environmental challenges. (4)

Q.31. (A) Evaluate the role of the rural banking system in India. (3)
OR
Q.31. (B) “Is it possible to develop Information Technology as an alternate livelihood option”? Give reasons. (4)

Q.32. Enlist all the factors involved in the introduction of the economic reforms by way of the announcement of the
New Economic Policy (NEP). (4)

Q.33. (A) Suggest measures to make the rural areas in India more vibrant (Include two success stories of rural
development experiments carried out in India). (6)
OR
Q.33. (B) Analysis the following table and give reasons for the nature of workforce distribution (6)
Distribution of workforce in India for the year 1972-73.

Workforce (in millions) Male Female Total

Rural 125 69 194
Urban 32 7 39

Q.34. Read the following text carefully:

The China-Pakistan Economic Corridor (CPEC) has deepened the decades-long strategic relationship between the
two nations. But it has also sparked criticism for burdening Pakistan with mountains of debt and allowing China to
use its debt-trap diplomacy to gain access to strategic assets of Pakistan. The foundations of CPEC, part of China’s
Belt and Road Initiative, were laid in May 2013. At the time, Pakistan was reeling under weak economic growth.
China committed to play an integral role in supporting Pakistan’s economy.

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Pakistan and China have a strategic relationship that goes back decades. Pakistan turned to China at a time when it
needed a rapid increase in external financing to meet critical investments in hard infrastructure, particularly power
plants and highways. CPEC’s early harvest projects met this need, leading to a dramatic increase in Pakistan’s power
generation capacity, bringing an end to supply-side constraints that had made rolling blackouts a regular occurrence
across the country.
Pakistan leaned into CPEC, leveraging Chinese financing and technical assistance in an attempt to end power
shortages that had paralysed its country’s economy. Years later, China’s influence in Pakistan has increased at an
unimaginable pace.
China as Pakistan’s Largest Bilateral Creditor: China’s ability to exert influence on Pakistan’s economy has grown
substantially in recent years, mainly due to the fact that Beijing is now Islamabad’s largest creditor. According to
documents released by Pakistan’s Finance Ministry, Pakistan’s total public and publicly guaranteed external debt
stood at $44.35 billion in June 2013, just 9.3 per cent of which was owed to China. By April 2021, this external debt
had ballooned to $90.12 billion, with Pakistan owing 27.4 per cent - $24.7 billion - of its total external debt to China,
according to International Monetary Fund (IMF).
Additionally, China provided financial and technical expertise to help Pakistan build its road infrastructure,
expanding north-south connectivity to improve the efficiency of moving goods from Karachi all the way to Gilgit
Baltistan (PoK). These investments were critical in better integrating the country’s ports, especially Karachi, with
urban centers in Punjab and Khyber-Pakhtunkhwa provinces.
Despite power asymmetries between China and Pakistan, the latter still has tremendous agency in determining its
own policies, even if such policies come at the expense of the long-term socio- economic welfare of Pakistani
citizens.
On the basis of the given text and common understanding, answer the following questions:
(I) Outline and discuss any two economic advantages of China Pakistan Economic Corridor (CPEC) accruing to the
economy of Pakistan. (3)
(II) Analyse the implication of bilateral ‘debt-trap’ situation of Pakistan vis-a-vis the Chinese economy. (3)

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

MARKING SCHEME OF SAMPLE PAPER-2

SECTION A – MACRO ECONOMICS

A.1. C. Both Statements 1 and 2 are true.

A.2. C. Assertion (A) is true, but Reason (R) is false.
A.3. D. A - Revenue Expenditure; B - Capital Budget
A.4. B. By managing government spending and taxation
A.5. B. Deficit Financing
A.6. D. Real Flow
A.7. C. 8.34%
A.8. B. (i), (ii) and (iii)
A.9. C. Receipts on Current Account = Payments on Current Account
A.10. B. 200, 50, 0.25
A.11. It implies that there is fall in the value of domestic currency against foreign currency i.e depreciation of
domestic currency. Depreciation implies that domestic goods became cheaper in terms of foreign currency and
hence the demand for exports increases and import decreases. As a result there will be increase in production,
employment, aggregate demand which causes higher economic growth. This results in increase of national income.

A.12. (A)
GVAMP = VOO – IC
1,660 = 2,000 – IC
IC = 2,000 – 1,660
IC = 340 Lakh
Working:
GVAMP = NVAFC + DEP + NIT
= 1,600 + 40 + (30 – 10)
= 1,600 + 40 + 20
= 1,660 Lakh

OR
A.12. (B)
Price Index = Nominal GDP / Real GDP X 100
= 330 / 300 X 100
= 110

A.13. EXCESS DEMAND

Meaning:
Excess demand refers to the situation when aggregate demand (AD) is more than aggregate supply (AS)
corresponding to full employment in the economy. AD > AS : Corresponding to Full Employment
Causes:
(i) Increase in Private Consumption Expenditure: (ii) Increase in Investment Expenditure:
(iii) Increase in Government Expenditure: (iv) Increase in Exports:
(v) Decrease in Imports: (vi) Decrease in Tax Rates:

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Impact:
1. Impact on Employment: Curve:
As there is full utilization of the resources available in the
economy, thus there is full employment. Hence excess
demand does not lead to any increase in the level of
employment.
2. Impact on Output:
Since the resources have already been utilized to the full, thus
excess demand does not lead to any increase in the output.
3. Impact on Prices:
As output and employment cannot change, so the ultimate
pressure is on the price. Prices tends to rise leading to inflation
which causes inflationary gap.

A.14. (A)
DEFICIENT DEMAND
Meaning:
Deficient demand refers to the situation when aggregate demand (AD) is less than of aggregate supply (AS)
corresponding to full employment in the economy. AD < AS : Corresponding to Full Employment
Causes:
(i) Reduction in Private Consumption Expenditure: (ii) Reduction in Investment Expenditure:
(iii) Reduction in Government Expenditure: (iv) Decrease in Exports:
(v) Rise in Imports: (vi) Increase in Tax Rates:
Impact:
1. Impact on Employment: Curve:
As the level of investment falls in an economy the level of
employment also decreases there by causing unemployment
in the economy.
2. Impact on Output:
Due to fall in the investment and employment in the
economy the output also tends to fall.
3. Impact on Prices:
As there is excess supply in the economy thus the prices
tends to decrease leading to deflation which causes
deflationary gap.

OR
A.14. (B)
Deflationary Gap:
Deflationary Gap refers to the situation when aggregate demand (AD) is less than of aggregate supply (AS)
corresponding to full employment in the economy. AD < AS : Corresponding to Full Employment

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

Fiscal Measure:
Taxes: A Tax is a compulsory payment to government without expectations of direct benefits to the tax payers.
In Deflationary Gap Situation: Tax Rate Decreased
The government should offered new subsidies and reduce the rate of existing tax rates. It will increase the
disposable income. Therefore the consumption and investment will rise in the economy. Hence Aggregate demand
increase and Deflation Controlled.

Monetary Measure:
Bank Rate: It refers to the rate of interest at which the central bank lends money to the commercial banks for long
term requirement.
In Deflationary Gap Situation: Bank Rate Decreased
During deficit demand or deflationary gap or deflation central bank decreases the bank rate. Borrowing became
cheaper and commercial bank borrows more from the central bank. This will raise the ability of bank to create
credit. Decrease in the bank rate forces the commercial bank to decrease their lending rates to business and general
public. This makes credit cheaper. As result borrower borrow more from commercial banks for consumption and
investment. Hence Aggregate demand increase and Deflation Controlled.

A.15. The working process of the increase in investment on the National Income, is based on the assumption that
one’s expenditure is another’s income. As one’s expenditure is another’s income, an increase in consumption
expenditure results in an increase in income. This process continues till the sum of the change in savings becomes
equal to the change in the investment. Lets take Increase in investment Rs.10,000 and value of MPC = 0.8
Round Increase in Increase in Increase in Increase in
Investment (I) Income (Y) Consumption (C) Saving (S)
1 10,000 10,000 8,000 2,000
2 - 8,000 6,400 1,600
3 - 6,400 5,120 1,280
- - - - -
Total 10,000 50,000 40,000 10,000
Investment Multiplier (K) = 1/1−MPC
= 1/1−0.8
= 5 Times.

A.16. Principles function of the central bank highlighted in the para are :
1. Issuing Notes/Currency Authority/Issue of Currency:
Central bank is the sole authority for the issue of currency in the country. All currency issued by the central bank is
its monetary liability. Central Bank of a country have exclusive right of issuing notes. Notes issued by the central
bank are circulated as Legal tender Money. Central Bank issued all the currency notes in India except one rupee
note. The monopoly of issuing notes of central bank ensures uniformity in facilitates exchange.

2. Bankers to the Government: (Banker, Agent and Advisor)

Central bank is a banker, agent and financial advisor to the government. (CG & SG). Advice to government
especially on monetary, banking and financial matters. It buys and sells securities on behalf of the government in
open market. It helps in framing policies to regulate the money market. Central bank accepts receipts and makes
payments for the government. It provides short terms credit to the government in times of difficulties. The
government borrows money by selling treasury bills to RBI.

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

3. Banker’s to the Bank: (Supervisory Role)

The central bank, the bankers bank and also play a supervisory role. It has almost the same relation with other
banks in the country as commercial bank has with his customer’s. It is the custodian of cash reserve of the
commercial banks. In every country the banks required by law or by tradition to keep a certain percentage of their
deposits. Central bank uses these reserves to give loan to commercial banks. Central bank regulates the commercial
banks to their licensing, branch expansion, liquidity of assets, management, amalgamation and liquidations. The
control is exercised by periodic inspections of the banks and the returns filed.

A.17. (A) PRECAUTIONS (While Calculating National)

VALUE ADDED METHOD
Included Not Included
Commission/ Brokerage paid on Sale and Purchased Transfer Payment like old age pension, scholarships,
of Second Hand Goods. unemployment allowances, pocket expense etc.
Imputed Rent of the Owner Occupied House. Value of Second Hand Goods.
Imputed Value of Production for Self-Consumptions. Sale/Purchase of Shares and Bonds.

OR
A.17. (B)
(I) DISTINGUISH BETWEEN STOCK VARIABLE & FLOW VARIABLE
BASIS STOCK CONCEPT FLOW CONCEPT
Meaning A stock is a economic variable A flow is economic variable whose
whose quantity measured at quantity measured over a
particular point of time. specified period of time.
Nature Static Concept Dynamic Concept
Time Dimensional No Yes
Influences by Flow Variable Stock Variable
Import and Export aspect Do Not Have Have
Examples Capital, Wealth, Bank Balance, Saving, Income, Investment,
Debt, Inventories, Money Supply Export, Profit, Production etc.
etc.
(II)
NDPFC = COE + OS + MI
= 2,000 + (400 + 600 + 700) + 0
= 2,000 + 1,700 + 0
= 3,700 Lakh
GDPFC = NDPFC + DEP
= 3,700 + 100
= 3,800 Lakh
Working:
DEP = GDCF – NDCF
= (1,050 + 50) – 1,000
= 1,100 – 1,000
= 100

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

SECTION B – INDIAN ECONOMIC DEVELOPMENT

A.18. A. Statement 1 is true and Statement 2 is false.

A.19. A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
A.20. B. It assimilates waste
A.21. D. All of these
A.22. C. Growth is due to technology
A.23. D. All of These
A.24. D. International Labour Oganisation
A.25. B. Leads to unemployment in their country
A.26. B. Honey
A.27. D. (d)-iv)
A. 28. The exploitative nature of the colonial government in India
1. Zamindari System: (Land Settlement System)
The Zamindars exploit the cultivator by imposing lagan irrespective of their Poor economic condition. Zamindars
took the land of farmers when they were not able to deposit the Lagan on fixed dates. Profit accruing out of the
agriculture sector went to the Zamindars instead of the cultivators did nothing to improve the condition of
agriculture. It is also called Land Revenue System.
2. Huge Competition From Machine-Made Products: (Decline of Handicraft Industries)
Indian handicraft product had worldwide market and reputation but Machine-made products from Britain were low
cost products and gave a hard competition to the handicraft products in India. It forced the Indian craftsmen to
shut-down their enterprises and which leads to massive unemployment. On the other hand the main reason for
decline of handicraft Industry was the introduction of ‘Discriminatory Tariff Policy’ by the colonial government. No
tax on export and import on Britain goods and heavy taxes on Indian exported and imported of goods.
3. Drain of Indian Wealth: (Surplus Trade But Benefits to the British)
Export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the
expenses incurred by an office set up by the colonial government in Britain, expenses on war, fought by the British
government. Due to this there is shortage of various essential commodities in India.

A.29. (A) Revolutionary rise in output is confined mainly to the production of food grains such as wheat and rice.
There has been no similar rise in the production of pulse and commercial crops, like jute, cotton, tea etc. Spread of
Green Revolution has not been uniform across all regions. Remarkable Impact in Punjab, Haryana, Maharashtra
and Tamil Nadu and Remain Subdued in Eastern U.P., Bihar, Madhya Pradesh and Odisha. The economic divide is
the gulf between the rich and the poor farmer-has substantially risen over time. Poverty is so wide-spread in
Indian agriculture that the government often resorts to loan-waiving schemes. Yet Suicides among the farmers is
emerging to be a serious challenge. Green Revolution relies on the use of expensive inputs and intensive
irrigation. Also the means of irrigation are grossly deficient and the poor farmer often looks to the weather to
irrigate his fields. Consequently, It has largely been confined to the rich farmers.

OR
A.29. (B) Following are the effects of policies on industrial development:
1. Protection from Foreign Competition:
Through Import Substitution enabled the development of local industries in the areas of electronics and automobile
sectors, which otherwise could not have developed.
2. Industry Diversification:
The industrial sector became well diversified by 1990, largely due to public sector. It was no longer restricted to
cotton textiles and jute. It also included engineering goods and a wide range of consumer goods.
3. Key Role in Promoting of Small-Scale Industries:
Gave opportunities to people with small capital to get into business. New investment opportunities helped in
generating more employment. It promoted growth with equity.

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 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

A.30. The given picture account:

1. LAND DEGRADATION
Decline in the overall quality of soil, water or vegetation condition, commonly caused by human activities. In India,
land suffers from different types of degradation, mainly because of following factor:-
(i) Indiscriminate use of agro-chemicals such as fertilisers and pesticides
(ii) Improper planning and management of irrigation systems
(iii) Non-adoption of adequate soil conservation measures
(iv) Loss of vegetation occuring due to deforestation etc.
2. AIR POLLUTION
It is the presence of materials in air in such concentration, which are harmful to human and the environment. In
India, air pollution is widespread in urban areas where vehicles are the major contributors. Vehicular emissions are
of particular concern and have the maximum impact on the general population. India is one of the 10th most
industrial nation in the world. The Central Pollution Control Board has identified 17 categories of industries as
significantly polluting.

A.31. (A) Rural banking has raised the level of rural farm and non-farm output, income and employment, especially
after the Green Revolution. The following are the advantages of rural banking facilities
(i) Raising farm and non-farm output by providing services and credit facilities to farmers.
(ii) Achieving food security which is clear from the abundant buffer stocks of grains.
(iii) Generating self-employment in rural areas by providing credit.

OR
A.31. (B) Governments can predict areas of food insecurity and vulnerability using appropriate information and
software tools so that action can be taken to prevent or reduce the likelihood of an emergency. IT also has a positive
impact on the agriculture sector as it can disseminate information regarding emerging technologies & its
applications, prices, weather and soil conditions for growing different crops, etc. IT also has potential of
employment generation in rural areas. Experiments with IT and its application to rural development are carried out
in different parts of India.

A.32. Following observations highlight the need for economic reforms:

1. Shortage of Foreign Exchange Reserves: (Adverse BOP)
Imports grew at a very high rate without matching growth of exports. As a result foreign exchange reserves fell to
the lowest level. There were not sufficient reserves for even a fortnight to finance imports.
2. Inefficient Management of Public Sector:
The constant spending on development programmes of the government did not generate additional revenue. The
government was not able to generate sufficient revenue from internal sources such as taxation, revenue from
public sector enterprises.
3. Debts Burden: (Rise in Fiscal Defict)
To meet consumption expenditure government borrows from other country and international institutions. Due
financial crisis foreign exchange reserve was not sufficient to pay the interest to international lenders. Further no
country or international funder was willing to lend to India.
4. Effect of Inflationary Pressure: (Rise in Prices)
Prices of many essential goods rose sharply. The rise in prices was mainly due to increase in money supply and
shortage of essential goods. (Mainly due to Iraq War-Gulf Crises)

BY DR. AJAY RANA CONTACT: 9105069317, 9528282801 13

 AR SAMPLE PAPERS SOLUTION ECONOMICS CLASS 12 FOR BOARD EXAM

A.33. (A) Two success stories of rural development experiments carried out in India are:
1. Tamil Nadu Women in Agriculture (TANWA)
TANWA is a project initiated in Tamil Nadu to train women in latest agricultural techniques launch in 1986. It
induces women to actively participate in raising agricultural productivity and family income. Women are forming
Farm Women’s Groups, which function like SHG. Many other Farm Women’s Groups are creating savings in their
group by functioning like mini banks. With the accumulated savings, they promote small-scale household activities
like mushroom cultivation, soap manufactures, doll making or other income- generating activities.

2. The Poor Women’s Bank

‘Kudumbashree’ is a women-oriented community-based poverty reduction programme being implemented in
Kerala. In 1995, a thrift and credit society was started as a small savings bank for poor women with the objective to
encourage savings. The thrift and credit society mobilised Rs 1 crore as thrift savings. These societies have been
acclaimed as the largest informal banks in Asia in terms of participation and savings mobilised.

OR
A.33. (B) The table shows the Distribution of workforce in India for the year 1972-73.
(i) In 1972-73, out of total workforce of 233 million, 194 million workforce work in rural areas and 39 million
workforce work in urban areas. It indicates that in the given period most of the workforce was engaged in
agricultural activities (around 83%) as compared to other activities (around 17 %).
(ii) In rural areas, out of total workforce, 125 million are male and 69 million are female. On the other hand, in urban
areas, out of total workforce, 32 million are male and only 7 million are female.
(iii) The female participation in workforce is low in rural as well as in urban areas due to historical reason, lack of job
opportunities available to them, more involvement of female in household chores, etc.
(iv) Although female participation in workforce is higher in rural area, but they are employed in low skilled jobs, self-
farm activities. In urban areas men are earning higher salary and owing to this reason urban families discourage
women from doing job.

A.34.
(I) Two economic advantages of China Pakistan Economic Corridor (CPEC) accruing to the economy of Pakistan are:
(a) China provided financial and technical expertise to help Pakistan build its road infrastructure, expanding north-
south connectivity to improve the efficiency of moving goods from Karachi all the way to Gilgit Baltistan (PoK).
(b) CPEC’s early harvest projects met this need, leading to a dramatic increase in Pakistan’s power generation
capacity, bringing an end to supply-side constraints that had made rolling blackouts a regular occurrence across the
country.
(II) China’s ability to exert influence on Pakistan’s economy has grown substantially in recent years, mainly due to
the fact that Beijing is now Islamabad’s largest creditor. According to documents released by Pakistan’s Finance
Ministry, Pakistan’s total public and publicly guaranteed external debt stood at $44.35 billion in June 2013, just 9.3
per cent of which was owed to China. By April 2021, this external debt had ballooned to $90.12 billion, with Pakistan
owing 27.4 per cent - $24.7 billion - of its total external debt to China, according to International Monetary Fund
(IMF).

BY DR. AJAY RANA CONTACT: 9105069317, 9528282801 14