PICTURE BASED QUESTIONS

CLASS XII

1. Read the given figure carefully and choose the correct alternative given below about the functions of
banks:

a) Credit creation function of commercial bank

b) Deposit mobilization function of commercial bank

c) Banker’s Bank function of Central Bank

d) Only c

ans: a

2. Read the given diagram carefully and identify which of the following options represents “Autonomous
Consumption”.

a) OR b) RC c) RY d) RI

ans. A

3.
This diagram shows components of Aggregate Demand (AD) in a two sector economy (Households +
Firms). C = C̅ + cY represents the consumption function, where C̅ = 1 autonomous consumption and c =
marginal propensity to consume (MPC). I = Ī represents autonomous investment, which is independent of
income. AD = C̅ + Ī + cY is the aggregate demand curve. Choose the correct option for the following
question on the basis of above information

What causes the Aggregate Demand (AD) curve to start above the origin (O)?

A. Presence of autonomous consumption only

B. Presence of autonomous investment only

C. Presence of both autonomous consumption and investment

D. Because AD depends only on income

Ans: C

4. Average Propensity to Consume is ------ at point B and Average Propensity to Save is ------ at point

A.

(a) 0,1 (b) 1,1 6. (c) 1,0 (d) 0,0

Ans. C

5. Based on the given diagram, Find the Primary deficit.

Ans: Primary deficit= fiscal deficit- interest payments

Fiscal deficit = borrowings

i.e. 15,000

while interest payments are 25% of revenue deficit

so Revenue deficit= revenue expenditure-revenue receipts

= 70,000-50,000

= 20,000 cr.

So Interest payments= 25% of 20,000

20,000*25/100=5,000 cr

Primary deficit = 15,000cr-5,000 cr

= 10,000 cr

So answer is 10,000 cr

6. Answer the following questions on the basis of given figure:

(a) What does the shaded area AOB indicate? Ans dissaving or saving is

negative

(b) What is the significance of Point B? ans Break even point where saving

is zero.
7. From the given diagram, identify the type of investment shown by horizontal line (I-I)

(a)Induced investment (b)Relative investment (c) Autonomous investment (d)Individual investment

Ans: C

8. Identify which objective of the government budget should we use to tackle the issue depicted in the image
given below.

Alternatives: (a) Allocation of resources (b) Reducing income inequalities (c) Economic stability (d)
Reducing regional disparities

Ans: C

9.

Observe the above picture and answer the following questions.

(i)When Aggregate Demand is less than Aggregate Supply at full employment, which gap will arise?

Ans deflationary gap

(ii) How can we correct the above gap using monetary policy? Explain any tow monetary measures.

Bank rate (explanation)

Open market operation(explanation)

Ans A. NNP mp B. NNP fc c. GDP fc d. NDP fc

11. Refers to the given diagram of circular flow of income. Which sector not included in the simple
economy.

Choose the correct option: A. Government C B. Business C. both a and b D. none of these

Ans A

12. With reference to the given diagram, which of the following is true at point R on X-axis.

A. Slope of consumption curve=1 B. Average propensity to save =0

C. Marginal propensity to save = -1 D. Average propensity to save =1

13. Study the given picture carefully and answer the following questions:

(i) Categorize the direct & indirect tax in the given picture.

(ii) Borrowing and other liabilities is treated as revenue receipt. State the given statement is true or false
with reason.

Ans: (i) Direct tax: income tax,corporation tax,

Indirext tax: Goods and services tax & other , Union Excise duty

(ii) Borrowing and other liabilities are not revenue receipts ,they are capital receipts as they create liability
on the government.

14. What does the following diagram indicate? What will be its impact on import and export of India?

Ans. Depreciation of domestic currency

Exports will increase,Imports decrease(explanation)

15. At the break-even point of income:

Ans B

16. Circular flow: Factor services from households to firms, factor payments from firms to households
represent:

A. Goods market B. Factor market C. Capital market D. Money market

Ans : B

17.

Refer to the given image carefully: Explain any two indicated measures taken by the Central Bank to control
the highlighted macroeconomic issue of deflation.

18. (I) Suppose in an economy, the Marginal Propensity to Consume (MPC) is 0.75. The government
increases its investment expenditure by ₹ 2,000 crore which leads to multiple rounds of income generation.
Estimate: (a) Value of Investment Multiplier (k) (b) Fill in the missing values (i) and (ii) in the table below:
19. In the given figure, what does the gap “KT” represents? (Choose the correct option)

(A) Aggregate demand equals to Aggregate Supply (B) A situation of Excess Demand (C) Full employment
equilibrium (D) A situation of Deficient Demand

Ans D

20. Read the following figure carefully and choose the correct pair from the alternatives given below:

(A). Output, production (B). Value added, production (C ). Output, disposition (D). Wealth, development

Ans A

21.

Explain two indicated measures in the picture above taken by the Govt to control the highlighted
macroeconomic issue.
Ans. Public Expenditure,

Tax(explanation)

22.

If the Consumption Curve (C) lies above the 45-degree line at a given income level, it indicates that:

A. Saving is positive. B. APC is equal to one. C. Dissaving (negative saving) is occurring. D. Investment is
zero.

Ans C

23.

As per a news report dated April 11, 2025: “Sales of household solar panels crossed one million marks in
FY 2025.” Analyse its impact on Gross Domestic Product (GDP) and economic welfare.

Ans Impact on GDP: GDP will increase due to high sale

Impact on welfare: Yes it will increase as it will reduce the consumption of electricity and more energy of
sun will be benefit and reduce the government expenditure on conventional energy.

_____________________________________________________________

24. The following figure represents which type of employment generation for rural development.
a) Self-employment under Prime Minister’s Rozgar Yojana

b) Wage employment under Food for work programme

c) Wage employment under Mahatma Gandhi National Rural Employment Guarantee act

d) Self-employment under Swarna Jayanti Shahari Rozgar Yojana

ANS. C

25. Go through the picture given and answer the following questions.

As a form of economic activity, outsourcing has intensified in recent years, Justify the statement giving valid
reasons that has made India a favourite destination for global outsourcing in the post reform period?

26. a. Interpret the given image on account of Population Policy and explain the resultant effects in China.

Ans: One Child Norm explanation

27.
Read the following statements carefully and choose the correct option:

Assertion (A): The proportion of regular salaried employees is higher among male workers than among
female workers in India. 1

Reason (R): A larger number of male workers are employed as casual wage labourers in agriculture
compared to female workers.

Ans Both are true but not related with each other.

28.

Answer the following questions on the basis of the given image:

(I) Identify the type of irrigation system shown in Panel A and Panel B.

(II) Explain any one advantage and one disadvantage of the irrigation system shown in Panel B over Panel
A.

29.
Following image present the shift of skilled labour to another country in search of better job opportunities. It
is known as:

(a) Medical tourism (c) Resource inflow (b) Dumping (d) Brain drain

Ans: d

30. Interpret the figure given below:

31. Study the image given below and suggest which of the following will not contribute towards
maintenance of sustainable development?

a) Conservation of resource b) Traffic congestion c) Reduction in Co2 emissions d) Recycling of waste

ans b

32.
On the basis of the picture above, answer the following questions: (i) Who are regular salaried employees?
(ii) Why the percentage of workers of regular salaried employees are high in urban area?

33. Analyse the given image and answer the following questions.

Which of the following concepts is most appropriately depicted in the given images? a) Environment crisis
(b) Sustainable development (c) Air pollution (d) Land degradation

Ans b

34. Interpret the given picture and explain any one strategy to control it from becoming an ecological
disaster.

35. Answer the following questions on the basis of the picture given below, and your general knowledge.

(i) Elaborate how a regulated “Agricultural Marketing System’ help the farmers to increase their income. (3
marks).
(ii) Do you think ‘regulation of markets’ has sufficiently improved agricultural marketing system?(1 marks).

36.

Identify the situation depicted in the given figure and explain any one sustainable strategy to effectively
overcome the problem.

37. Study the following image and identify the issues of farmers in rural areas.

(A) Winter season (C) Failure of crops (B) Bumper production (D) Minimum support price

Ans b

38. On the basis of the given image, explain the source of human capital formation which may contribute to
the economic growth in India.

Ans Expenditure on education