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Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Commerce MCQ


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30 Questions MCQ Test Sample Papers for Class 12 Commerce - Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) for Commerce 2024 is part of Sample Papers for Class 12 Commerce preparation. The Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) questions and answers have been prepared according to the Commerce exam syllabus.The Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) below.
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Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 1

The Government can achieve its budget objective of ‘Redistribution of Income’ by____________.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 1

The government’s objective of ‘redistribution of income’ can be achieved by levying high rate of tax on the rich and making expenditure of that amount for the welfare of the poor. Thus, rationalization of taxes or targeting those people who are poor.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 2

Balance of Payments of an economy records_____________ for a fiscal year.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 2

Balance of payment of an economy records exports and imports of goods and services, unrequited transfers and capital transfers received and paid. Thus, by making transactions of these, foreign exchange is received and paid. Thus, inflow and outflow of foreign exchange to/from the economy takes place in balance of payment.

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Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 3

Identify which of the following bank does not interact directly with the general public?

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 3

Reserve bank of India does not interact directly with the public. As Central bank deals with commercial banks and commercial banks deal with the public. Deposits are made by public with the commercial banks and central bank deal with commercial banks in controlling money supply and credit through various instruments or policies.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 4

Identify which of the following is not an example of ‘invisible item’ under Current Account of the Balance of Payments transactions:

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 4

All the three options (a), (b) and (c) are invisible items under current account of the balance of payment transaction. But merchandise linked transactions are the goods exported or imported which is a part of visible items.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 5

Read the following statements carefully and choose the correct alternative from the following:
Statement 1: Demonetization was the step taken by the Government of India in order to tackle the problems of corruption, black money, terrorism and circulation of fake currency in the Indian Economy.
Statement 2: Demonetization has ensured improved tax compliance in India over the period of time.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 5

Demonetization means taking away notes or coin from its status as legal tender. Both the statements are true as demonetization is a step taken by the government to deal with the problem of corruption, black money, terrorism and circulation of fake currency in the Indian economy. Also, it has improved tax compliance over a period of time.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 6

Ms. Sakshi, an economics teacher, was explaining the concept of ‘minimum percentage of the total deposits to be kept by any commercial bank with the Central Bank of the country, as per norms and statute prevailing in the country’.
From the following, choose the correct alternative which specifies towards the concept explained by her?

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 6

Ms. Sakshi, an economics teacher explained the concept of ‘cash reserve ratio’ by saying that minimum percentage of the total deposits (net demand and time deposits) which is kept by any commercial bank with the central bank. Because through Cash reserve ratio, Central bank is able to control the money supply.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 7

Two friends Mira and Sindhu were discussing the exchange rate systems. ‘Under this system, the exchange rates are determined by the market forces of demand and supply. However, deliberate efforts are made by the competent authority to keep the exchange rates within a specific range’.
The above-mentioned statement was given by Sindhu, identify the type of exchange rate system was she talking about?

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 7

The type of exchange rate that Sindhu is talking about is ‘Managed floating exchange rate’. In this type of exchange rate, with the help of market forces of demand and supply, exchange rate is determined. And competent authority, i.e., country’s central bank intervenes so as to maintain the exchange rate within a specific range. Central bank also keeps reserves of foreign exchange within the targeted value. Managed floating exchange rate is also called as ‘Dirty floating’.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 8

Read the following statements carefully and choose the correct alternative from the following:
Statement 1: Public goods are those goods and services that are collectively consumed by the public.
Statement 2: Public goods are excludable and rivalrous in nature.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 8

Public goods are those goods which are collectively consumed by the public. The given statement 1 is true. For example, air.  But the statement 2 is false as public goods are non-excludable and non-rival in nature. Taking the example of air, no one can be excluded from consuming it and also if one group of people consumes the public good, here, air then the consumption of air for other people do not fall. 

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 9

Under the Balance of Payments structure of a nation, the two main categories of accounts for the classification of the transactions are ________ and ________.  
i. current account
ii. unilateral transfer account
iii. capital account
iv. loan account
Identify the correct alternatives from the following:

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 9

Balance of payment of a country comprises of two accounts: (a) Current account, and (b) Capital account. Current account records transactions related to export and import of goods and services, unilateral transfers received and paid to and from rest of the world and capital account records transactions related to Borrowings and loans given, Investment made to and from rest of the world, and change in foreign exchange reserves.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 10

Identify which of the following is not a function of the Reserve Bank of India?

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 10

RBI, i.e. central bank of India performs various functions such as banker to the government of India, custodian of gold reserve of India, financial advisor to government of India, also act as banker to commercial banks. But RBI does not perform the function of issue of coins and one-rupee notes. This function of issue of onerupee notes and coins is performed by ministry of finance. 

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 11

Industrial Policy Resolution (IPR) 1956 formed the basis of the_________ Five Year Plan.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 11

Industrial policy Resolution (IPR), 1956 was introduced in second five-year plan. It covered various issues related to the industrial enterprises of the country. In this, industries were divided into three types: Schedule A, Schedule B and Schedule C. 

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 12

Occupational structure refers to___________.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 12

Occupational structure can be defined as distribution of workforce among various different sectors of the economy such as primary, secondary and tertiary sectors.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 13

_____________ is the portion of agricultural produce which is sold in the market by the farmers, after meeting their self-consumption requirements.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 13

Due to green revolution, ‘marketable surplus’ could be generated. Marketable surplus can be defined as that portion of agricultural produce which farmers sell in the market after fulfilling their selfconsumption requirements.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 14

Read the following statements carefully and choose the correct alternatives given below:
Statement 1 : Poverty line in India is defined in terms of monetary value of the minimum nutritional (calorific) requirements of an individual in a day.
Statement 2 : The definition of poverty line in monetary terms has not changed over the years.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 14

Poverty line in India can be defined as the minimum nutritional requirements of an individual in a day measured in monetary value. Also, the statement 2 is false because the definition of poverty line in monetary terms has changed over the years.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 15

Read the following statements carefully and choose the correct alternatives given below:
Statement 1: India is often called as the ‘outsourcing hub’ of the world.
Statement 2: Availability of skilled manpower is one of the prime factors responsible for the status gained by India at the international platform.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 15

Human capital implies skills, expertise, knowledge acquired by human resource by making expenditure on education, health and other factors. Because of skilled manpower in India, it has become ‘outsourcing hub’ of the world. India’s population converted into human capital is an important factor which is responsible for the status India has gained at the international platform.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 16

Before the advent of Green Revolution in 1960’s, India was primarily dependent on _________for the supply of food grains.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 16

Before the green revolution in 1967-68, India was not self-sufficient in foodgrains. India was heavily dependent on USA (United States of America) for the supply of foodgrains. But after green revolution, it led to rise in production of foodgrains by a larger amount.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 17

From the following given sets of statements in column I and II, choose the correct pair of statements.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 17

The correct pair of statement is (D). As portfolio investment and foreign institutional investment are same concepts. It means while purchasing an asset, owner does not have any direct control. For example, purchase of bonds and shares does not give management control to the owner but only ownership control.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 18

National Bank for Agricultural and Rural Development (NABARD) was set up in 1982 as a/ the_________body to coordinate the activities of all institutions involved in the rural financing system.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 18

NABARD is an apex body or organisation which helps in promoting the strength of various credit institutions, like, cooperatives, commercial banks and regional rural banks. Also, it provides financial help to the non-farm sector.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 19

The Government of India has decided to vaccinate the adult population of India (with Covaxin/ Covishield), without any charge. This would be categorized as ____________.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 19

Vaccinating the adult population of the country with Covaxin /Covishield without any charge would mean that this type of expenditure by government is neither creating any asset nor causing any fall in liability. Hence, it is categorized as revenue nature expenditure.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 20

____________ is not a reason for poverty in India. 

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 20

Poverty in India arises due to various reasons such as population explosion, low capital formation, higher unemployment, inequalities in income, etc. But ‘rise in per capita GDP’ is not the reason for poverty in India. Rather, it reduces poverty.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 21

In a hypothetical economy, Mr. Neeraj has deposited ₹100 in the bank. If it is assumed that there is no other currency circulation in the economy, then the total money supply in the economy will be ________________.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 21

If money deposited in the bank is `100, and no other money is circulating in the economy, then the total money supply in the economy is ₹100 because money supply can be defined as total stock of money available in the economy at a given point of time in the form of currency and demand deposits.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 22

‘Since independence, India has witnessed a considerable fall in the Infant Mortality Rate in India’ Identify which of the following may not be one of the reasons for the fall in the Infant Mortality Rate?

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 22

Infant mortality rate can be defined as number of deaths per 1000 live births of children below one year of age in a year. All these reasons, improvement in health facilities, improvement in educational standards, and technological expansion over the years can lead to fall in infant mortality rate but option (c) fall in standard of living of people increases the infant mortality rate.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 23

Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Subsidies do not add any burden on the financial health of a nation.
Statement 2: Complete removal of subsidies may violate the aim of equitable distribution of income.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 23

Subsidies are given to the farmers so that they get inputs at prices which are lesser than the market price. As the statement 1 is false, subsidies do add burden on the financial health of a nation. If with the help of subsidies, government tries to remove the gap between rich and poor, hence aim of equitable distribution of income may be violated if subsidies is removed.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 24

Prior to India’s independence, the stagnation in the agricultural sector was mainly caused by ___________.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 24

Before India’s independence, the agricultural sector stagnated due to mainly land settlement system. Various land revenue systems such as Zamindari system, Ryotwari system and Mahalwari system exploited cultivators, or farmers very badly which led to decline in agriculture sector.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 25

_________ accepts deposits from the public and lend out this money to interest earning investment projects.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 25

When a commercial bank receives deposits, it keeps a part of it with the Central bank and a part with itself. These are called legal reserves. The money lent comes back to it as deposits. Again it keeps a part of it with the central bank and a part with itself and lends the rest. This process continues. In this way bank gives loans which is many a times the original deposit.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 26

Agriculture sector appears to be _________ affected by the economic reform process.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 26

Public investment in agriculture sector especially in infrastructure like irrigation, power, etc. has been reduced in the reform period.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 27

Choose the correct alternative given below for the following statements – Assertion (A) and Reason (R):
Assertion (A): In rural India, horticulture plays a vital role in providing food and nutrition to the rural population.
Reason (R): Various horticultural activities in Indian villages have improved the economic conditions of many farmers. Such activities have become a lucrative source of livelihood for many people in rural India.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 27

Horticulture plays an important role in providing employment opportunities. It has become a sustainable livelihood option for farmers thereby improving their economic condition.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 28

The objective of government budget is to achieve _________.

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 28

The objective of government budget is maintaining economic stability in the economy. During inflation, government should reduce its expenditure and increase tax rate and during deflation, it should its expenditure and reduce tax rate.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 29

Choose the correct alternative given below for the following statements – Assertion (A) and reason (R):
Assertion (A): Import substitution leads to saving of foreign exchange.
Reason (R): Import substitution leads the goods to be produced in the country itself. 

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 29

Import substitution leads to restricting imported foreign goods but producing those goods in the domestic country. Import substitution helps in saving foreign exchange in the country by importing less through restrictions like tariffs and quotas.

Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 30

Which of the following should not be included in the balance of payments account?

Detailed Solution for Test: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22) - Question 30

Bonus shares to equity shareholders does not involve provision of new resources and no transaction is recorded.

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