Class 12 Economics: CBSE Sample Question Papers (2022-23) | Sample Papers for Class 12 Commerce PDF Download

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1 
 
SAMPLE QUESTION PAPER (2022-23) 
ECONOMICS (030)    CLASS 12 
TIME: 3 HOURS                                                      M.M. – 80 
GENERAL INSTRUCTIONS: 
1. This question paper contains two sections:  
                  Section A – Macro Economics  
                  Section B – Indian Economic Development 
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each. 
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered 
in 60 to 80 words. 
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered 
in 80 to 100 words. 
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered 
in 100 to 150 words.  
Q.NO. SECTION A – MACRO ECONOMICS   MARKS 
1 
 
Read the following statements carefully:  
Statement 1: The consumption curve is an upward sloping straight line curve due to the 
direct relationship between income and consumption and the assumption of constant 
Marginal Propensity to Consume.  
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other. 
In the light of the given statements, choose the correct alternative 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 
 
 
 
 
 
 
 
1 
2 ‘Owing to the Russia-Ukraine crisis, the world is experiencing rising crude prices due to 
supply-side issues.’  
Identify the most likely impact on the Balance of Payment situation of the Indian economy 
from the following: 
a) Production of cars in India will rise. 
b) Production and sale of cycles in India will rise. 
c) Inflow of US Dollars in India will rise. 
d) Outflow of US Dollars from India will rise. 
  
 
 
 
 1 
3 _________ is an institution that accept deposits for lending purposes.                           
       (Fill up the blank with correct alternative) 
a) Commercial Banks     b) Life Insurance Corporation 
c)    Reserve Bank of India    d) Government of India  
 
 
1 
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1 
 
SAMPLE QUESTION PAPER (2022-23) 
ECONOMICS (030)    CLASS 12 
TIME: 3 HOURS                                                      M.M. – 80 
GENERAL INSTRUCTIONS: 
1. This question paper contains two sections:  
                  Section A – Macro Economics  
                  Section B – Indian Economic Development 
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each. 
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered 
in 60 to 80 words. 
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered 
in 80 to 100 words. 
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered 
in 100 to 150 words.  
Q.NO. SECTION A – MACRO ECONOMICS   MARKS 
1 
 
Read the following statements carefully:  
Statement 1: The consumption curve is an upward sloping straight line curve due to the 
direct relationship between income and consumption and the assumption of constant 
Marginal Propensity to Consume.  
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other. 
In the light of the given statements, choose the correct alternative 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 
 
 
 
 
 
 
 
1 
2 ‘Owing to the Russia-Ukraine crisis, the world is experiencing rising crude prices due to 
supply-side issues.’  
Identify the most likely impact on the Balance of Payment situation of the Indian economy 
from the following: 
a) Production of cars in India will rise. 
b) Production and sale of cycles in India will rise. 
c) Inflow of US Dollars in India will rise. 
d) Outflow of US Dollars from India will rise. 
  
 
 
 
 1 
3 _________ is an institution that accept deposits for lending purposes.                           
       (Fill up the blank with correct alternative) 
a) Commercial Banks     b) Life Insurance Corporation 
c)    Reserve Bank of India    d) Government of India  
 
 
1 
2 
 
4 Read the following statements carefully:  
Statement 1: Export of financial services by India will be recorded on credit side of current 
account. 
Statement2: Foreign Direct Investments in India will be recorded on credit side of capital 
account. 
In the light of the given statements, choose the correct alternative: 
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 
 
 
 
 
 
1 
5 
 
Read the following statements carefully:  
Statement 1 - Net investment is a stock concept. 
Statement 2 - Capital is a flow concept. 
In the light of the given statements, choose the correct alternative 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    
    OR 
 
Read the following figure carefully and choose the correct pair from the alternatives given 
below: 
 
Alternatives: 
a) Output, Production 
b) Value added, Production 
c) Output, Disposition 
d) Wealth, Development 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
6 If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is 
? 30 Crore, the relevant consumption function would be : 
 
 
 
 
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1 
 
SAMPLE QUESTION PAPER (2022-23) 
ECONOMICS (030)    CLASS 12 
TIME: 3 HOURS                                                      M.M. – 80 
GENERAL INSTRUCTIONS: 
1. This question paper contains two sections:  
                  Section A – Macro Economics  
                  Section B – Indian Economic Development 
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each. 
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered 
in 60 to 80 words. 
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered 
in 80 to 100 words. 
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered 
in 100 to 150 words.  
Q.NO. SECTION A – MACRO ECONOMICS   MARKS 
1 
 
Read the following statements carefully:  
Statement 1: The consumption curve is an upward sloping straight line curve due to the 
direct relationship between income and consumption and the assumption of constant 
Marginal Propensity to Consume.  
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other. 
In the light of the given statements, choose the correct alternative 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 
 
 
 
 
 
 
 
1 
2 ‘Owing to the Russia-Ukraine crisis, the world is experiencing rising crude prices due to 
supply-side issues.’  
Identify the most likely impact on the Balance of Payment situation of the Indian economy 
from the following: 
a) Production of cars in India will rise. 
b) Production and sale of cycles in India will rise. 
c) Inflow of US Dollars in India will rise. 
d) Outflow of US Dollars from India will rise. 
  
 
 
 
 1 
3 _________ is an institution that accept deposits for lending purposes.                           
       (Fill up the blank with correct alternative) 
a) Commercial Banks     b) Life Insurance Corporation 
c)    Reserve Bank of India    d) Government of India  
 
 
1 
2 
 
4 Read the following statements carefully:  
Statement 1: Export of financial services by India will be recorded on credit side of current 
account. 
Statement2: Foreign Direct Investments in India will be recorded on credit side of capital 
account. 
In the light of the given statements, choose the correct alternative: 
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 
 
 
 
 
 
1 
5 
 
Read the following statements carefully:  
Statement 1 - Net investment is a stock concept. 
Statement 2 - Capital is a flow concept. 
In the light of the given statements, choose the correct alternative 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    
    OR 
 
Read the following figure carefully and choose the correct pair from the alternatives given 
below: 
 
Alternatives: 
a) Output, Production 
b) Value added, Production 
c) Output, Disposition 
d) Wealth, Development 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
6 If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is 
? 30 Crore, the relevant consumption function would be : 
 
 
 
 
3 
 
a) C=30+0.75 Y    b) C=(-)30+0.25Y 
c)   C=30-0.75Y    d) C=30-0.25Y 
      OR 
If increase in National Income is equal to increase in consumption, identity the value of 
Marginal Propensity to Save : 
a) Equal to unity     b) Greater than one  
c)   Less than one     d)  Equal to zero 
 
1 
 
 
 
 
 
1 
7 Money supply in India may increase if, ________________(Choose the correct alternative) 
1. Reserve Bank of India(RBI) injects more money in circulation  
2. the commercial banks expand their credit operation  
3. tax rates are reduced by the Central Government  
4. Reserve Bank of India increases the Bank Rate  
Alternatives: 
a) 1,2 and 3 are correct 
b) 2,3 and 4 are correct 
c) 1,3 and 4 are correct 
d) 1,2 and 4 are correct 
 
 
 
 
 
1 
8  Suppose, following data is presented, for an imaginary economy:   (all figures in ? ‘000 Crore) 
Year Visible Exports Visible Imports 
2010 280 240 
2020 580 460 
Identify, which of the statement about the period 2010 to 2020 is correct? 
a) Improvement in balance of trade  
b) Increase in trade deficit  
c) Improvement in balance in invisibles items 
d) Deterioration of balance of trade 
     OR  
The following information is given for an imaginary country:  
Current Account Amount (in ?’000 
Crore) 
Visible Exports 100 
Visible Imports 150 
Invisible Exports 70 
Invisible Imports 30 
Net current transfer balance 15 
 
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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SAMPLE QUESTION PAPER (2022-23) 
ECONOMICS (030)    CLASS 12 
TIME: 3 HOURS                                                      M.M. – 80 
GENERAL INSTRUCTIONS: 
1. This question paper contains two sections:  
                  Section A – Macro Economics  
                  Section B – Indian Economic Development 
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each. 
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered 
in 60 to 80 words. 
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered 
in 80 to 100 words. 
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered 
in 100 to 150 words.  
Q.NO. SECTION A – MACRO ECONOMICS   MARKS 
1 
 
Read the following statements carefully:  
Statement 1: The consumption curve is an upward sloping straight line curve due to the 
direct relationship between income and consumption and the assumption of constant 
Marginal Propensity to Consume.  
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other. 
In the light of the given statements, choose the correct alternative 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 
 
 
 
 
 
 
 
1 
2 ‘Owing to the Russia-Ukraine crisis, the world is experiencing rising crude prices due to 
supply-side issues.’  
Identify the most likely impact on the Balance of Payment situation of the Indian economy 
from the following: 
a) Production of cars in India will rise. 
b) Production and sale of cycles in India will rise. 
c) Inflow of US Dollars in India will rise. 
d) Outflow of US Dollars from India will rise. 
  
 
 
 
 1 
3 _________ is an institution that accept deposits for lending purposes.                           
       (Fill up the blank with correct alternative) 
a) Commercial Banks     b) Life Insurance Corporation 
c)    Reserve Bank of India    d) Government of India  
 
 
1 
2 
 
4 Read the following statements carefully:  
Statement 1: Export of financial services by India will be recorded on credit side of current 
account. 
Statement2: Foreign Direct Investments in India will be recorded on credit side of capital 
account. 
In the light of the given statements, choose the correct alternative: 
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 
 
 
 
 
 
1 
5 
 
Read the following statements carefully:  
Statement 1 - Net investment is a stock concept. 
Statement 2 - Capital is a flow concept. 
In the light of the given statements, choose the correct alternative 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    
    OR 
 
Read the following figure carefully and choose the correct pair from the alternatives given 
below: 
 
Alternatives: 
a) Output, Production 
b) Value added, Production 
c) Output, Disposition 
d) Wealth, Development 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
6 If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is 
? 30 Crore, the relevant consumption function would be : 
 
 
 
 
3 
 
a) C=30+0.75 Y    b) C=(-)30+0.25Y 
c)   C=30-0.75Y    d) C=30-0.25Y 
      OR 
If increase in National Income is equal to increase in consumption, identity the value of 
Marginal Propensity to Save : 
a) Equal to unity     b) Greater than one  
c)   Less than one     d)  Equal to zero 
 
1 
 
 
 
 
 
1 
7 Money supply in India may increase if, ________________(Choose the correct alternative) 
1. Reserve Bank of India(RBI) injects more money in circulation  
2. the commercial banks expand their credit operation  
3. tax rates are reduced by the Central Government  
4. Reserve Bank of India increases the Bank Rate  
Alternatives: 
a) 1,2 and 3 are correct 
b) 2,3 and 4 are correct 
c) 1,3 and 4 are correct 
d) 1,2 and 4 are correct 
 
 
 
 
 
1 
8  Suppose, following data is presented, for an imaginary economy:   (all figures in ? ‘000 Crore) 
Year Visible Exports Visible Imports 
2010 280 240 
2020 580 460 
Identify, which of the statement about the period 2010 to 2020 is correct? 
a) Improvement in balance of trade  
b) Increase in trade deficit  
c) Improvement in balance in invisibles items 
d) Deterioration of balance of trade 
     OR  
The following information is given for an imaginary country:  
Current Account Amount (in ?’000 
Crore) 
Visible Exports 100 
Visible Imports 150 
Invisible Exports 70 
Invisible Imports 30 
Net current transfer balance 15 
 
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 
 
Balance on current account will be ____________ of  ? ______ thousand Crore.  
a) deficit, 10 
b) surplus,5  
c) deficit, 5 
d) surplus, 10 
 
1 
9 Read the following statement -Assertion (A) and Reason (R). Choose one of the correct 
alternatives given below: 
Assertion (A): Ex-post Investments represent planned Investments; whereas ex-ante 
Investments represent actual level of investments. 
Reason (R): At equilibrium level, Ex-ante Savings and Ex-ante Investments are always 
equal. 
Alternatives: 
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 and 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. 
1 
10 Read the following statement -Assertion (A) and Reason (R). Choose one of the correct 
alternatives given below: 
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of 
income. 
Reason (R): Saving function refers to the functional relationship between saving and income. 
Alternatives: 
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 and 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. 
 
 
 
 
 
 
 
1 
11 Suppose in a hypothetical economy there are only two Firms A and B, Firm A sold goods 
for ? 2,000 to Firm B and purchased goods for ? 1,000. Firm B exported goods for ? 2,500 
and had domestic sales of ? 1,500. Calculate Net Domestic Product at market price, if 
consumption of fixed capital is ? 200.  
 
3 
12 Explain, how exchange rate is determined under a free market exchange rate system. 
         OR  
Distinguish between autonomous and accommodating transactions in Balance of Payments 
Accounts. 
3 
 
3 
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1 
 
SAMPLE QUESTION PAPER (2022-23) 
ECONOMICS (030)    CLASS 12 
TIME: 3 HOURS                                                      M.M. – 80 
GENERAL INSTRUCTIONS: 
1. This question paper contains two sections:  
                  Section A – Macro Economics  
                  Section B – Indian Economic Development 
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each. 
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered 
in 60 to 80 words. 
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered 
in 80 to 100 words. 
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered 
in 100 to 150 words.  
Q.NO. SECTION A – MACRO ECONOMICS   MARKS 
1 
 
Read the following statements carefully:  
Statement 1: The consumption curve is an upward sloping straight line curve due to the 
direct relationship between income and consumption and the assumption of constant 
Marginal Propensity to Consume.  
Statement 2: Aggregate Demand curve and Consumption curve are parallel to each other. 
In the light of the given statements, choose the correct alternative 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 
 
 
 
 
 
 
 
1 
2 ‘Owing to the Russia-Ukraine crisis, the world is experiencing rising crude prices due to 
supply-side issues.’  
Identify the most likely impact on the Balance of Payment situation of the Indian economy 
from the following: 
a) Production of cars in India will rise. 
b) Production and sale of cycles in India will rise. 
c) Inflow of US Dollars in India will rise. 
d) Outflow of US Dollars from India will rise. 
  
 
 
 
 1 
3 _________ is an institution that accept deposits for lending purposes.                           
       (Fill up the blank with correct alternative) 
a) Commercial Banks     b) Life Insurance Corporation 
c)    Reserve Bank of India    d) Government of India  
 
 
1 
2 
 
4 Read the following statements carefully:  
Statement 1: Export of financial services by India will be recorded on credit side of current 
account. 
Statement2: Foreign Direct Investments in India will be recorded on credit side of capital 
account. 
In the light of the given statements, choose the correct alternative: 
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 
 
 
 
 
 
1 
5 
 
Read the following statements carefully:  
Statement 1 - Net investment is a stock concept. 
Statement 2 - Capital is a flow concept. 
In the light of the given statements, choose the correct alternative 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    
    OR 
 
Read the following figure carefully and choose the correct pair from the alternatives given 
below: 
 
Alternatives: 
a) Output, Production 
b) Value added, Production 
c) Output, Disposition 
d) Wealth, Development 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
6 If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is 
? 30 Crore, the relevant consumption function would be : 
 
 
 
 
3 
 
a) C=30+0.75 Y    b) C=(-)30+0.25Y 
c)   C=30-0.75Y    d) C=30-0.25Y 
      OR 
If increase in National Income is equal to increase in consumption, identity the value of 
Marginal Propensity to Save : 
a) Equal to unity     b) Greater than one  
c)   Less than one     d)  Equal to zero 
 
1 
 
 
 
 
 
1 
7 Money supply in India may increase if, ________________(Choose the correct alternative) 
1. Reserve Bank of India(RBI) injects more money in circulation  
2. the commercial banks expand their credit operation  
3. tax rates are reduced by the Central Government  
4. Reserve Bank of India increases the Bank Rate  
Alternatives: 
a) 1,2 and 3 are correct 
b) 2,3 and 4 are correct 
c) 1,3 and 4 are correct 
d) 1,2 and 4 are correct 
 
 
 
 
 
1 
8  Suppose, following data is presented, for an imaginary economy:   (all figures in ? ‘000 Crore) 
Year Visible Exports Visible Imports 
2010 280 240 
2020 580 460 
Identify, which of the statement about the period 2010 to 2020 is correct? 
a) Improvement in balance of trade  
b) Increase in trade deficit  
c) Improvement in balance in invisibles items 
d) Deterioration of balance of trade 
     OR  
The following information is given for an imaginary country:  
Current Account Amount (in ?’000 
Crore) 
Visible Exports 100 
Visible Imports 150 
Invisible Exports 70 
Invisible Imports 30 
Net current transfer balance 15 
 
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 
 
Balance on current account will be ____________ of  ? ______ thousand Crore.  
a) deficit, 10 
b) surplus,5  
c) deficit, 5 
d) surplus, 10 
 
1 
9 Read the following statement -Assertion (A) and Reason (R). Choose one of the correct 
alternatives given below: 
Assertion (A): Ex-post Investments represent planned Investments; whereas ex-ante 
Investments represent actual level of investments. 
Reason (R): At equilibrium level, Ex-ante Savings and Ex-ante Investments are always 
equal. 
Alternatives: 
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 and 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. 
1 
10 Read the following statement -Assertion (A) and Reason (R). Choose one of the correct 
alternatives given below: 
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of 
income. 
Reason (R): Saving function refers to the functional relationship between saving and income. 
Alternatives: 
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 and 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. 
 
 
 
 
 
 
 
1 
11 Suppose in a hypothetical economy there are only two Firms A and B, Firm A sold goods 
for ? 2,000 to Firm B and purchased goods for ? 1,000. Firm B exported goods for ? 2,500 
and had domestic sales of ? 1,500. Calculate Net Domestic Product at market price, if 
consumption of fixed capital is ? 200.  
 
3 
12 Explain, how exchange rate is determined under a free market exchange rate system. 
         OR  
Distinguish between autonomous and accommodating transactions in Balance of Payments 
Accounts. 
3 
 
3 
5 
 
13 If an economy plans to increase its income by ? 2,000 crore and the Marginal Propensity to 
Consume is 75%. Estimate the increase in investment required to achieve the targeted 
increase in income.  
 
4 
14 As per the following news published in The Economic Times on 26
th
 December, 2021: 
‘Reserve Bank of India has sold government securities worth ? 8,710 crore in the secondary 
market, over the last four weeks, to drain out excessive liquidity’. 
Identify the likely cause and the consequences behind, this type of action plan of the Reserve 
Bank.  
 
 
4 
 
15 Read the following text carefully, discuss briefly the relevant function of the Central Bank, 
indicated : 
Recently, Reserve Bank of India (RBI) conducted a statutory inspection for supervisory 
evaluation against a Commercial Bank. The commercial bank was imposed with stringent 
penalties, owing to deficiencies in regulatory compliances.  
As per the Central Bank, the inspection revealed non-compliances vis-à-vis different 
directions issued by RBI, on the following fronts: 
i. ATM Card frauds 
ii. Ensuring integrity and quality of data 
iii. Loans to small borrowers            (adapted/moderated -livemint.com)  
OR 
‘Reserve Ratio and Credit Creation are inversely related.’ Do you agree with the given 
statement? Justify your answer with a suitable numerical example.  
 
 
 
 
 
4 
 
 
 
 
4 
 
16 a) Define Gross Domestic Product (GDP) deflator and discuss its importance. 
b) State and discuss any two precautions to be considered while estimating national 
income by Expenditure Method. 
3 
3 
17 a) Compare the trends depicted in the figures given below: 
 
b)  Elaborate the objective of ‘allocation of resources’ in the Government budget. 
      OR  
a) Distinguish between revenue receipts and capital receipts of the government, with 
suitable examples. 
b) Distinguish between direct and indirect taxes, with suitable examples. 
 
 
 
 
 
 
 
3 
 
 
 
3 
 
3 
 
3