Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce

Commerce: Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce

The document Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce is a part of the Commerce Course Economics Class 12.
All you need of Commerce at this link: Commerce


Class-XII
Time: 90
Max. Marks: 40

General instructions: 

  1. The Question Paper contains 3 sections. 
  2. Section - A has 24 questions. Attempt any 20 questions.
  3. Section - B has 24 questions. Attempt any 20 questions. 
  4. Section - C has 12 questions. Attempt any 10 questions. 
  5. All questions carry equal marks. 
  6. There is NO negative marking.
Section - A

Q.1: Under whose purview does the issue of new currency fall in?
(a) Reserve Bank of India
(b) Central Government of India
(c) State Government
(d) All of the above

Correct Answer is Option (d)

In case of direct tax, the burden of tax and the liability to pay it falls on the same person.


Q.2: Which one of the following is a combination of direct taxes?
(a) Excise duty and Wealth tax 
(b) Service tax and Income tax 
(c) Excise duty and Service tax 
(d) Wealth tax and Income tax

Correct Answer is Option (a)
The Central Bank plays the role of the sole note issuing authority in the economy.


Q.3: Read the following statements and select the correct alternative from the following:
Statement 1: Liberalisation can be defined as entry and restrictions on the private sector were removed.
Statement 2: The number of industries in the public sector was reduced from 17 to 2 industries which includes defence equipment and railway transport.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true but Statement 2 is false.
(d) Statement 1 is false but statement 2 is true.

Correct Answer is Option (c)
Liberalisation means that entry and growth restrictions on the private sector were removed. The number of industries in the public sector were reduced from 17 to 3 which includes defence, atomic energy and railways.


Q.4: Find out the value of money multiplier if the legal reserve requirements are 25%.
(a) 3
(b) 4
(c) 2
(d) 1

Correct Answer is Option (b)
Money multiplier
= 1/LRR
= 1/25%
= 100/25
= 4


Q.5: Read the following statements and select the correct alternative from the following:
Statement 1: Disinvestment can be defined as when the part of shares of public sector undertakings were sold to the private sector.
Statement 2: Privatisation can be defined as when ownership, management and control of private sector enterprises was given to entrepreneurs in the public sector.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true but Statement 2 is false.
(d) Statement 1 is false but statement 2 is true.

Correct Answer is Option (c)
Privatisation can be defined as when ownership, management and control of public sector enterprises were transferred to entrepreneurs in the private sector. Disinvestment can be defined as when the part of the shares of public sector undertakings were sold to the private sector.


Q.6: Productive borrowings include loans to buy:
(a) Seeds 
(b) Fertilizers 
(c) Agricultural equipment 
(d) All of these

Correct Answer is Option (d)
Most formers in India are small and marginal land holders who practice subsistence farming. They have no surplus for further production. The gestation period between sowing and harvesting is quite high. So, farmers have to productively borrow to fulfill their various needs during this period. Productive Borrowings include loans to buy seeds, fertilizers and agricultural equipment’s and implements.


Q.7: Read the following statements and select the correct alternative from the following:
Statement 1: Before WTO, GATT was established as the global trade organisation in 1946 with 56 countries.
Statement 2: WTO was founded in 1990 as the successor organisation of the GATT.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true but Statement 2 is false.
(d) Statement 1 is false but statement 2 is true.

Correct Answer is Option (b)
Before WTO, GATT was established as the global trade organisation in 1947 with 23 countries. Also, WTO was found in 1995 as the successor organisation of GATT.


Q.8: Education increases peoples:
(a) Productivity 
(b) Skill 
(c) Income 
(d) All of these

Correct Answer is Option (d)
Education enhances productivity and innovation and promotes entrepreneurship and technological advancement. In addition, it plays a very important role in protecting economic and social progress and improving income distribution.


Q.9: _______ is issued by the government of India.
(a) Coins 
(b) ₹500 note 
(c) ₹1000 note 
(d) All of these

Correct Answer is Option (a)
It is the sole responsibility of the Government of India to mint coins of all denominations.


Q.10: The value of goods exported from the country were of ₹500 crores, the value of goods imported were of ₹800 crores. Find out the volume of balance of trade.
(a) ₹(-) 300 crores 
(b) ₹300 crores 
(c) ₹400 crores 
(d) ₹(-) 400 crores

Correct Answer is Option (a)
Balance of trade = Exports – Imports
= 500 – 800
= ₹(–) 300 crores


Q.11: Read the following statements and select the correct alternative from the following:
Statement 1 : Under tax reforms, policies followed by government such as government taxation and public expenditure policy is called ‘Monetary policy’.
Statement 2: Under the financial sector reforms, the role of RBI was given from regulator to facilitator of financial sector.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true but Statement 2 is false.
(d) Statement 1 is false but statement 2 is true.

Correct Answer is Option (d)
Fiscal policy can be defined as those policies which are followed by government such as taxation and public expenditure.
The role of the RBI was given from regulator to facilitator of financial sector. This means that the financial sector may be allowed to take decisions on many matters without consulting the RBI.


Q.12: Which programme launched in 2005-2006 for building infrastructure and basic amenities in rural areas?
(a) Economic growth 
(b) India Vision 2020 
(c) Bharat Nirman 
(d) None of these

Correct Answer is Option (c)
Bharat Nirman is a business plan for rural infrastructure which was implemented by the Government of India in order to provide some basic amenities to the rural India.


Q.13: Which of the following is correct?
(i) Supply of money is a stock concept.
(ii) Supply of money doesn’t include stock of money held by the government.
(iii) Supply of money doesn’t include stock of money held by the banking system of a country.
Choose the correct option:
(a) Only (i)
(b) Only (i) and (iii)
(c) Only (ii) and (iii)
(d) All (i), (ii), and (iii)

Correct Answer is Option (d)
Money supply is a 'stock concept' as it is measured at a particular point of time. The money supply is the total amount of money—cash, coins, and balances in bank accounts—in circulation.


Q.14: Match the items in Column A to that of Column B and choose the correct alternative: 
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
(a) 1 – a 
(b) 2 – b 
(c) 3 – c 
(d) 4 – d

Correct Answer is Option (d)
During the British rule, some basic infrastructure was developed in the form of railways, water transport, ports, post and Telegraph, etc. However, the real intension behind these developments was to serve their own colonial interest.


Q.15: Development of rural marketing relates to:
(a) Regulated market 
(b) Storage 
(c) Transportation 
(d) All of these

Correct Answer is Option (d)


Q.16: Which of the following statements is not true regarding the benefit of GST?
(a) GST provides comprehensive and wider coverage of input credit set-off, you can use service tax credit for the payment of tax on sale of goods, etc. 
(b) Only direct taxes in state have been included by GST. 
(c) Uniformity of tax rates across the states. 
(d) Ensure better compliance due to aggregate tax rate reduction.

Correct Answer is Option (b)
All indirect taxes in state and central level have been included by GST.


Q.17: Industries (Development and Regulation) Act was implemented in:
(a) 1951
(b) 1952
(c) 1953
(d) None of these

Correct Answer is Option (a)
Industries (Development and Regulation) Act, 1951, includes the industrial development policies regulated by Central Government in India.


Q.18: India follows _________ system of Foreign Exchange.
(a) Fixed Exchange Rate 
(b) Flexible Exchange Rate 
(c) Managed Floating Exchange Rate 
(d) None of these

Correct Answer is Option (c)
India practices managed floating exchange rate system from 1993 in which the Central Bank has a major role to play. Exchange rates fluctuate from day to day but Central Bank attempt to influence exchange rate by buying and selling currencies.


Q.19: In the government budget, the interest payment was is enumerated at ₹20,000 crores, which is 25% of primary deficit. Find out fiscal deficit?
(a) ₹1,00,000
(b) ₹1,20,000
(c) ₹80,000
(d) ₹90,000

Correct Answer is Option (a)
Primary Deficit
= ₹20,000 × 100/25
= ₹80,000 crores
Primary deficit = Fiscal deficit – Interest payments
₹80,000 = Fiscal deficit – ₹20,000
Fiscal deficit = 80,000 + 20,000
Fiscal deficit = ₹1,00,000


Q.20: There is a black vertical line shown in this diagram. What does this represents?
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
(a) Poverty line 
(b) Poverty gap 
(c) Head count ratio 
(d) None of these

Correct Answer is Option (a)
It shows poverty line which divides the people of the region as poor and non-poor.


Q.21: Process of industrialisation was started in India in:
(a) First Plan 
(b) Second Plan 
(c) Third Plan 
(d) Fourth Plan

Correct Answer is Option (b)
The second plan was to set India on the path of industrialisation.


Q.22: Identify the correctly matched pair from Column A to Column B: 
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
(a) 1 – a 
(b) 2 – b 
(c) 3 – c 
(d) 4 – d

Correct Answer is Option (b)

Investment made by Dasault Ltd., French manufacturer has invested in Reliance Defence, an Indian company. Hence, it will bring in foreign exchange in the country.


Q.23: During British regime, which one of the following works was not performed?
(a) Establishment of railways 
(b) Establishment of telephone system 
(c) Establishment of wire-less system 
(d) Establishment of Metro in Delhi

Correct Answer is Option (d)
The construction of the Delhi Metro began in 1998 and Delhi metro started in December, 2002.


Q.24: Who is the custodian of national reserves of international currency?
(a) SBI
(b) IDBI
(c) RBI
(d) ICICI

Correct Answer is Option (c)
The RBI acts as the custodian of the country's foreign exchange reserves, manages exchange control and acts as the agent of the government in respect of India's membership of the IMF.


Section - B

Q.25: Read the following statements - Assertion (A) and Reason (R):
Assertion (A) : Acquisition of a domestic (Indian) company by a foreign (Australian) company will be recorded on the credit side of Balance of Payment Account.
Reason(R) : It leads to outflow of foreign exchange from the domestic economy. From the given alternatives choose the correct one:
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.

Correct Answer is Option (c)
When domestic company, for example, any Indian company is acquired by foreign company (i.e. Australian company), then it will lead to inflow of foreign exchange in the domestic economy. Hence, the assertion (A) is true but reason (R) is false.


Q.26: Suppose in an economy, the initial deposits of ₹400 crores lead to the creation of total deposits worth ₹4000 crores.
Under the given situation the value of reserve requirements would be________. (Fill up the blank with correct alternative)
(a) 0.01
(b) 1
(c) 0.1
(d) 0.4

Correct Answer is Option (c)
Total deposits = Initial deposits×(1/LRR)
Where, LRR shows reserve requirements.
4000 = 400 × (1/LRR)
LRR= (400/4000)
LRR = 1/10 or 0.1 or 10%.


Q.27: Read the following statements - Assertion (A) and Reason (R):
Assertion (A) : Major policy initiatives (land reforms and Green Revolution) helped India to become self-sufficient in food grains production.
Reason (R) : The proportion of people depending on agriculture did not decline as expected after the Green Revolution.
From the given alternatives choose the correct one: 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.

Correct Answer is Option (b)
Both the assertion and reason are true but reason is not the correct explanation of assertion. As India became self-sufficient in food grain production, after green revolution and land reforms. Also, percentage of people who were depending on agriculture did not fall as was expected after the green revolution.


Q.28: Identify the incorrect statement from the following: (Choose the correct alternative)
(a) Diversification in agriculture sector provides sustainable livelihood rural population. 
(b) Diversification includes change in cropping pattern, shift of workforce from agriculture to other allied activities and non-agriculture sector. 
(c) Objective of investment in new agricultural avenues (non-farm activities) increases financial risks for the rural population. 
(d) Diversification reduces the proportion of unemployed population in the rural areas to considerable limits.

Correct Answer is Option (c)
Diversification in agriculture is necessary for economic development of a country. Diversification is of two types: Diversification of crop production and diversification of productive activities. It provides extra employment opportunities to rural people, helps them earn higher income and thus overcoming poverty. But the option (c) is incorrect, as investment in new agricultural opportunities does not increase financial risks for the rural population.


Q.29: Read the following statements - Assertion (A) and Reason (R):
Assertion (A) : Human capital treats human beings as a means to an end (increase in productivity).
Reason (R) : Human Capital Formation decreases by way of investments in education and health.
From the given alternatives choose the correct one:
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.

Correct Answer is Option (c)
Human capital implies that education and health are a means so as to increase labour productivity. An investment made in education and health is not productive if it does not lead to output of goods and services. But the reason (R) is false, as by investment in education and health , human capital formation rises.


Q.30: From the set of statements given in Column I (Name of the Scheme) and Column II (Objective of Poverty Alleviation Program), choose the correct pair of statements:
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
Alternatives:
(a) A – i 
(b) B – ii 
(c) C – iii 
(d) D – iv

Correct Answer is Option (c)
The scheme “National Social Assistance Programme” is a central government scheme which aims at helping by providing financial help to elderly people, widows etc. by providing them pensions.


Q.31: 
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
Figure Showing Population below poverty line in some large states, 1973-2012 (%)
On the basis of the given bar diagram, identify the states which are able to reduce the poverty level as compared to other states between 1973 - 2012.
(a) Tamil Nadu, Gujrat, Bihar, Andhra Pradesh 
(b) Bihar, Madhya Pradesh, West Bengal and Orissa 
(c) Rajasthan, Madhya Pradesh, Bihar and Uttar Pradesh 
(d) Andhra Pradesh, Rajasthan, West Bengal and Tamil Nadu

Correct Answer is Option (d)
Between 1973-2012, as we can see from the given bar diagram, the states such as Andhra Pradesh, Rajasthan, West Bengal and Tamil Nadu has reduced the poverty level by a larger amount as compared to other states.
Visually handicapped candidates: Poor people do not work in formal sector as formal sector provides all the facilities which are given to the organized sector. But poor people are not able to get that due to lack of assets, income, human capital and due to too much dependency on public health facilities. 


Q.32: Select Indicators of Development in Education and Health Sectors
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
On the basis of the above-mentioned information answer the following question:
The Real Per Capita Income of India (as per the given data) has increased by _______________ (approximately) between 1951 and 2016-17. (Fill up the blank with correct alternative)
(a) 915 %
(b) 1015 %
(c) 815 %
(d) 715 %

Correct Answer is Option (d)
As the data given of year 1951 and 2016-17 shows that real per capita income (in ₹) has increased by the following amount:
= ((77659-7651)/7651) x 100
= (70008/7651) x 100
= 915%


Q.33: Read the following statements - Assertion (A) and Reason (R):
Assertion (A) : The goal of equitable distribution of land was fully served by abolition of intermediaries, in the post-independence India.
Reason (R) : Big landlords challenged the land ceiling legislation, delaying the implementation and subsequently escaping from the legislation.
From the given alternatives choose the correct one:
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.

Correct Answer is Option (d)
Assertion is false as the goal of equitable distribution of land was served due to various reasons such as abolition of intermediaries, land ceiling and other factors. But big landlords who were not in favour of land ceiling led to delay the implementation and hence did not favoured the legislation. Hence, the reason(R) is true.


Q.34: Read the following statements carefully and choose the correct alternatives given below:
Statement 1 : The emergence of Self-Help Groups (SHG’s) ensured the reduction in the fissures of the formal credit system.
Statement 2 : The borrowings from SHGs mainly confined to consumption purposes by its members.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

Correct Answer is Option (a)
Both the assertion and reason are true as Self-help groups main focus is on poor people in rural areas who have limited reach to formal credit system. Hence, self-help groups have helped in bridging the gap. Also, since people pool their money in self help groups so that any member in the group can borrow in need and hence it leads to borrowing for consumption purpose by self-help groups.


Q.35: Read the following statements carefully and choose the correct alternatives given below:
Statement 1 : The value of money multiplier is determined by the reserve ratio prevailing in the monetary system.
Statement 2 : The process of credit creation directly relates to the value of reserve ratio.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

Correct Answer is Option (c)
Money multiplier = 1/LRR
Credit creation/Deposit creation = Intial Deposits x (1/LRR)
It LRR = 10% and Initial deposits= ₹ 1,000
Therefore, Credit creation = 1000 x (1/10%)
= 1000 x (100/10)
= ₹ 10,000
If LRR = 20% and initial deposits = ₹1000
Therefore, credit creation = 1000 x (1/20%)
= 1000 x (100/20)
= ₹5,000
Hence, credit creation and LRR have inverse relationship.
Hence, the statement 1 is true and statement 2 is false.


Q.36: Arrange the following event in the correct chronological order: (Choose the correct arrangements)
i. The year of great divide
ii. Establishment of Tata Iron and Steel Company (TISCO)
iii. Introduction of Railways in India by the British
iv. Opening of Suez Canal
Alternatives:
(a) iv, ii, i, iii
(b) i, iv, iii, ii
(c) ii, iii, iv, i
(d) iii, iv, ii, i

Correct Answer is Option (d)
The year of great divide: 1921
Establishment of Tata Iron and Steel company (TISCO): 1907
Introduction of Railways in India by the British: 1853
Opening of Suez Canal: 1869


Q.37: Read the following statements -Assertion (A) and Reason (R), choose one of the correct alternatives given below:
Assertion (A) : Trade of invisible items between two nations is a part of capital account of Balance of Payment
Reason (R) : Transactions that affect the asset-liability status of a country in relation to the rest of the world are known as Capital Account transaction.
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.

Correct Answer is Option (d)
Trade of invisible items between two nations is a part of ‘current account’ of balance of payment. Hence, the assertion is false. The reason statement is true as the transactions affecting asset-liability status of a country with the rest of the world are known as capital account transact ions.


Q.38: Demand Deposits include______ and _________. (Fill up the blank with correct alternative) 
i. Saving account deposits 
ii. Fixed deposits 
iii. Current Account Deposits 
iv. Post Office Savings 
Alternatives:
(a) i and ii 
(b) ii and iii 
(c) i and iii 
(d) i and iv

Correct Answer is Option (c)
Demand deposits include those deposits which can be given to the depositor by the commercial banks on demand. It includes ‘Saving account deposits’ and ‘current account deposits’.


Q.39: Read the following statements -Assertion (A) and Reason (R), Choose one of the correct alternatives given below:
Assertion (A): Since the default rates of farm loans have become chronically high due to multiple reasons, the rural banks are facing a lot of cash crunch.
Reason (R): Due to lack of proper storage facilities a lot of farm produce is wasted.
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.

Correct Answer is Option (b)
Both the assertion (A) and reason (R) are true but reason (R) is not the correct explanation of Assertion(A). Rural banks are facing a lot of cash crunch due to default rates of farm loans have increased by a large amount. Also, farm produce gets wasted due to lack of proper storage facilities.


Q.40: Read the following statements -Assertion (A) and Reason (R), Choose one of the correct alternatives given below:
Assertion (A): Since Independence, the economic condition of many farmers across India has improved as they have adopted horticulture as a secondary source of income.
Reason (R): Varying climatic and soil conditions have given India an added advantage to be the producer of diverse horticultural crops.
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.

Correct Answer is Option (a)
Horticulture means art to cultivate fruits, vegetables, spices, etc. But since independence this activity has provided various employment opportunities to rural people and hence proved to be a secondary source of income. Also, due to different climatic and soil conditions, it has provided India an added advantage to be the producer of diverse horticulture crops.


Q.41: Read the following statements - Assertion (A) and Reason (R), Choose one of the correct alternatives given below:
Assertion (A): Demand Deposits are considered as a convenient mode of payment for execution of even the high value transactions.
Reason (R): Demand Deposits are non-withdrawable in nature and cannot be withdrawn against issue of cheques and other similar instruments of payment.
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.

Correct Answer is Option (c)
For the high value transactions, demand deposits is an easy mode of payment. Reason is false as demand deposits are withdrawable and can be withdrawn against cheques and by other means of payment.


Q.42: Choose the correct alternatives to be filled in given blanks A and B.
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce

(a) Low level of income and Low level of investment 
(b) Low level of investment and Low level of Income 
(c) Low Mobilization of savings and Low level of investment 
(d) Low level of Investment and Low savings

Correct Answer is Option (a)
This is because when production level is low, it leads to generation of less income. If people have less income, they save less and hence level of investment is also low. Hence, further when people invest less, they generate less production.


Q.43: Ms Ramanpreet has started a new business venture, she intends to spend a huge amount towards ‘on-the-job training’ of her workers before putting them to work. It exhibits the right step in the direction of Human Capital Formation.
Spot which of the following does not directly contributes to the process of human capital formation by Ms Ramanpreet:
(a) adds skills and expertise
(b) improves efficiency
(c) ensures gender equity
(d) increases output productivity

Correct Answer is Option (c)
By providing on-thejob training to the workers, it leads to addition to human capital by adding in their skills and expertise. Also, improving their efficiency and increasing productivity of output by them. But it does not directly lead to gender equity.


Q.44: Suppose that the Balance of Trade (BOT) of a nation, exhibits a surplus of ₹20,000 crores. The import of merchandise of the nation is half of the exports of merchandise to the rest of the world. The value of exports would be ₹______ crores. (Fill up the blank with correct alternative)
(a) 30,000
(b) 40,000
(c) 24,000
(d) 35,000

Correct Answer is Option (b)
Balance of Trade (BOT) = Exports – Imports
₹20,000 = Exports(X) – Imports (M)
₹20,000 = Exports(X) –(Exports (X)/2)
₹20,000 = (2 Exports (X) Exports (X))/2
Exports = ₹40,000  


Q.45: Read the following statements carefully and choose the correct alternatives given below:
Statement 1 : Government of India adopted ‘Trickle Down Approach’ to alleviate poverty to benefit the last man at the bottom of the pyramid.
Statement 2 : Empirical data over the years have shown that trickle-down theory did not yield desired results in India.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

Correct Answer is Option (a)
Government has adopted approach to reduce poverty by adopting trickle down approach. According to it, benefits of economic growth will reach to all sections of the society and hence trickle down to the poor. But this approach was not successful. Hence, both the statements are true.


Q.46: Read the following statements -Assertion (A) and Reason (R), Choose one of the correct alternatives given below:
Assertion (A): If the receipts and payments on the current account are equal to each other, it depicts a situation of Current Account Surplus.
Reason (R): A surplus current account means that the nation is a lender to other countries and a deficit current account means that the nation is a borrower from other countries.
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.

Correct Answer is Option (d)
The assertion is false. Since current account surplus can be defined as receipts on the current account is greater than payments on the current account. The reason is true, as surplus current account implies nation provides loans to other countries while a deficit current account implies that the nation borrows from other countries.


Q.47: Identify the correct statement from the following: (Choose the correct alternative)
(A) Restrictive policies of commodity production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade. 
(b) Effective trade policies of commodity production, trade and tariff pursued by the colonial government favourably affected the structure, composition and volume of India’s foreign trade. 
(c) Liberal policies of commodity production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade. 
(d) Restrictive policies of commodity production, trade and tariff pursued by the colonial government favourably affected the structure, composition and volume of India’s foreign trade.

Correct Answer is Option (a)

Colonial government made every effort to exploit India’s economy. India was made to the status of exporter of raw material like cotton, wool etc. and importer of finished goods from Britain. Also, more than half of India’s trade was with Britain. Moreover, they led to use of export surplus of Indian economy for their expenditure like spending on war, importing invisible items etc.


Q.48: Match the situations given in Column I with their respective implications given in Column II: (Choose the correct alternative)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
Alternatives:
(a) A-ii; B-iii; C-iv; D-i 
(b) A-iii; B-iv; C-i; D-ii 
(c) A-i; B-ii; C-iii; D-iv 
(d) A-ii; B-iv, C-i; D-iii

Correct Answer is Option (b)
Migration implies Brain drain of skilled, trained and experienced people from one country to another. Due to low academic standards, required skill job is not available. As the population rises, it leads to fall in per capita economic growth. Also, due to lack of proper manpower planning, it creates imbalance between demand and supply of human resource.


Section - C

Q.49: Question are be answered on the basis of the following data: (in ₹ Crores)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
The value of corporation tax has _________ crores between 2019-20 (Actual) and 2020-21 (Budget Estimates).
(a) Fallen by ₹ 124124 crores
(b) Risen by ₹ 124124 crores
(c) Fallen by ₹ 124142 crores
(d) Risen by ₹ 124142 crores

Correct Answer is Option (b)
In 2019-20 (Actuals) of corporation tax is ₹556876 crores and in 2020-21 (Budget estimate) of corporation tax is ₹681000 crores. The difference between the two is ₹681000 crores – ₹556876 crores = ₹124124 crores. So, the value of corporation tax has risen by ₹124124 crores.


Q.50: Question are be answered on the basis of the following data: (in ₹ Crores)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
______ are the receipts that neither create any liability nor reduction in assets of the government.
(a) Revenue Receipts
(b) Revenue expenditure
(c) Capital Receipts
(d) Capital expenditure

Correct Answer is Option (a)
Revenue Receipts are the receipts that neither create any liability nor reduction in assets of the government. It includes tax revenues like income tax, corporation tax and non-tax revenue like fines and escheats, special assessment, escheats, etc.


Q.51: Question are be answered on the basis of the following data: (in ₹ Crores)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce
The value of GST has _________ crores between 2020-201 (revised estimates) and 2020-21 (Budget Estimates).
(a) Fallen by ₹ 114900 crores
(b) Risen by ₹ 114900 crores
(c) Fallen by ₹ 141900 crores
(d) Risen by ₹ 141900 crores

Correct Answer is Option (a)
In 2020-21 (Revised estimates) of GST is ₹515100 crores and in 2020-21 (Budget estimate) of GST is 630000. The difference between the two is ₹515100 crores – ₹630000 crores = (–)₹114900 crores. So, the value of GST has fallen by ₹114900 crores.


Q.52: Question are be answered on the basis of the following data: (in ₹ Crores)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce

Read the following statements carefully and choose the correct alternatives given below.
Statement 1: The value of service tax has fallen by ₹ 5009 crores from 2019 to 2021.
Statement 2: The overall gross tax revenue has decreased from 2019 to 2021.
Alternatives:
(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

Correct Answer is Option (d)
The value of service tax has risen by ₹5009 crores from 2019 to 2021. The overall gross tax revenue has decreased by ₹412961 crores from 2019 to 2021.


Q.53: Question are be answered on the basis of the following data: (in ₹ Crores)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce

Tax revenue refers to receipts from all kinds of taxes such as _________.
(a) Income tax
(b) Corporate tax
(c) Excise duty
(d) All of these

Correct Answer is Option (d)
Tax revenue consists of the proceeds of taxes and other duties levied by the Central Government. Tax revenue refers to receipts from all kinds of taxes such as income tax, corporate tax, excise duty etc. A tax is a legally compulsory payment imposed by the government on income and profit of persons and companies without reference to any benefit. 


Q.54: Question are be answered on the basis of the following data: (in ₹ Crores)
Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce

Which of the following is a non-tax revenue?
(a) Fee
(b) License fee
(c) Special assessment
(d) All of these

Correct Answer is Option (d)
Non-tax revenue refers to government revenue from all sources other than taxes. These are incomes, which the government gets by way of sale of goods and services rendered by different government departments. Fee refers to a payment made to the government for the services that it renders to the citizens. Such services are generally in public interest and fees are paid by those, who receive such services. For example, passport fees, court fees, school fees in government schools. License fee is a payment to grant a permission by a government authority. For example, registration fee for an automobile. Sometimes government undertakes developmental activities by which value of nearby property appreciates, which leads to increase in wealth. So, it is the payment made by owners of those properties whose value has appreciated. For example, if value of a property near a metro station has increased, then a part of developmental expenditure made by government is recovered from owners of such property. This is the value of special assessment.


Q.55: Question are be answered on the basis of the following passage:
The Goods and Services Tax, (GST) is proposed to be a comprehensive indirect tax levy on the manufacture, sale and consumption of goods and services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST which is a value added tax will be levied at all points in the supply chain but credit will be allowed for the taxes paid on inputs (used in making the supply) acquired. One of the primary objectives of GST was to remove the cascading effect of taxes. GST is game-changing reform for the Indian Economy, as it will bring the net appropriate price of the goods and services. the various factors that have impacted Indian economy are:
(i) Increases competitiveness: GST has removed the cascading effect of taxes, i.e., tax on tax. It is helpful in the reduction of cost of product. So, there is a scope to increase production, hence, competition increases.
(ii) Simple tax structure: Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.
(iii) Economic Union of India: GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence.
(iv) Uniform Tax Regime: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage.
(v) Greater Tax Revenues: As GST has increased the tax base, there is increase in tax revenue. The total gross GST revenue collected in the month of January, 2019 is ₹ 1,02,503 crore of which CGST is ₹ 17,763 crore, SGST is ₹ 24,826 crore, IGST is ₹ 51,225 crore (including ₹ 24,065 crore collected on imports) and Cess is ₹ 8,690 crore (including ₹ 902 crore collected on imports). January 2019 collections are 14% above the January 2018 collections of ₹ 89,825 crore.
(vi) Increase in Exports: Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.

______ has increased due to GST?
(a) Imports
(b) Exports
(c) Both (A) and (B)
(d) None of these

Correct Answer is Option (b)
Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.


Q.56: Question are be answered on the basis of the following passage:
The Goods and Services Tax, (GST) is proposed to be a comprehensive indirect tax levy on the manufacture, sale and consumption of goods and services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST which is a value added tax will be levied at all points in the supply chain but credit will be allowed for the taxes paid on inputs (used in making the supply) acquired. One of the primary objectives of GST was to remove the cascading effect of taxes. GST is game-changing reform for the Indian Economy, as it will bring the net appropriate price of the goods and services. the various factors that have impacted Indian economy are:
(i) Increases competitiveness: GST has removed the cascading effect of taxes, i.e., tax on tax. It is helpful in the reduction of cost of product. So, there is a scope to increase production, hence, competition increases.
(ii) Simple tax structure: Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.
(iii) Economic Union of India: GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence.
(iv) Uniform Tax Regime: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage.
(v) Greater Tax Revenues: As GST has increased the tax base, there is increase in tax revenue. The total gross GST revenue collected in the month of January, 2019 is ₹ 1,02,503 crore of which CGST is ₹ 17,763 crore, SGST is ₹ 24,826 crore, IGST is ₹ 51,225 crore (including ₹ 24,065 crore collected on imports) and Cess is ₹ 8,690 crore (including ₹ 902 crore collected on imports). January 2019 collections are 14% above the January 2018 collections of ₹ 89,825 crore.
(vi) Increase in Exports: Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.

Read the following statements carefully and choose the correct alternatives given below.
Statement 1: One of the primary objectives of GST was to remove the cascading effect of taxes.
Statement 2: Under GST, the tax levy is only on the net value added at each stage of the supply chain.
Alternatives:

(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

Correct Answer is Option (a)
One of the primary objectives of GST was to remove the cascading effect of taxes. Previously, due to different indirect tax laws, taxpayers could not set off the tax credits of one tax against the other. For example, the excise duties paid during manufacture could not be set off against the VAT payable during the sale. This led to a cascading effect of taxes. Under GST, the tax levy is only on the net value added at each stage of the supply chain.

This has helped eliminate the cascading effect of taxes and contributed to the seamless flow of input tax credits across both goods and services.


Q.57: Question are be answered on the basis of the following passage:
The Goods and Services Tax, (GST) is proposed to be a comprehensive indirect tax levy on the manufacture, sale and consumption of goods and services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST which is a value added tax will be levied at all points in the supply chain but credit will be allowed for the taxes paid on inputs (used in making the supply) acquired. One of the primary objectives of GST was to remove the cascading effect of taxes. GST is game-changing reform for the Indian Economy, as it will bring the net appropriate price of the goods and services. the various factors that have impacted Indian economy are:
(i) Increases competitiveness: GST has removed the cascading effect of taxes, i.e., tax on tax. It is helpful in the reduction of cost of product. So, there is a scope to increase production, hence, competition increases.
(ii) Simple tax structure: Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.
(iii) Economic Union of India: GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence.
(iv) Uniform Tax Regime: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage.
(v) Greater Tax Revenues: As GST has increased the tax base, there is increase in tax revenue. The total gross GST revenue collected in the month of January, 2019 is ₹ 1,02,503 crore of which CGST is ₹ 17,763 crore, SGST is ₹ 24,826 crore, IGST is ₹ 51,225 crore (including ₹ 24,065 crore collected on imports) and Cess is ₹ 8,690 crore (including ₹ 902 crore collected on imports). January 2019 collections are 14% above the January 2018 collections of ₹ 89,825 crore.
(vi) Increase in Exports: Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.

Read the following statements - Assertion (A) and Reason (R).
Assertion (A): GST made the trade easier between two states or two countries.
Reason (R): GST has helped in widening the tax base in India.
From the given alternatives choose the correct one.
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.

Correct Answer is Option (b)
GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence. GST has helped in widening the tax base in India. Previously, each of the tax laws had a different threshold limit for registration based on turnover. As GST is a consolidated tax levied on both goods and services both, it has increased tax registered businesses. Besides, the stricter laws surrounding input tax credits have helped bring certain unorganised sectors under the tax net.


Q.58: Question are be answered on the basis of the following passage:
The Goods and Services Tax, (GST) is proposed to be a comprehensive indirect tax levy on the manufacture, sale and consumption of goods and services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST which is a value added tax will be levied at all points in the supply chain but credit will be allowed for the taxes paid on inputs (used in making the supply) acquired. One of the primary objectives of GST was to remove the cascading effect of taxes. GST is game-changing reform for the Indian Economy, as it will bring the net appropriate price of the goods and services. the various factors that have impacted Indian economy are:
(i) Increases competitiveness: GST has removed the cascading effect of taxes, i.e., tax on tax. It is helpful in the reduction of cost of product. So, there is a scope to increase production, hence, competition increases.
(ii) Simple tax structure: Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.
(iii) Economic Union of India: GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence.
(iv) Uniform Tax Regime: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage.
(v) Greater Tax Revenues: As GST has increased the tax base, there is increase in tax revenue. The total gross GST revenue collected in the month of January, 2019 is ₹ 1,02,503 crore of which CGST is ₹ 17,763 crore, SGST is ₹ 24,826 crore, IGST is ₹ 51,225 crore (including ₹ 24,065 crore collected on imports) and Cess is ₹ 8,690 crore (including ₹ 902 crore collected on imports). January 2019 collections are 14% above the January 2018 collections of ₹ 89,825 crore.
(vi) Increase in Exports: Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.

In the light of the given text and common knowledge, identify the incorrect statement.
(a) A single indirect tax system reduces the need for multiple documentation for the supply of goods.
(b) Introducing GST has also led to an increase in consumption and indirect tax revenues.
(c) Calculation of taxes under GST is simpler.
(d) None of the above

Correct Answer is Option (d)
A single indirect tax system reduces the need for multiple documentation for the supply of goods. GST minimises transportation cycle times, improves supply chain and turnaround time, and leads to warehouse consolidation, among other benefits. Introducing GST has also led to an increase in consumption and indirect tax revenues. Having uniform GST rates have contributed to overall competitive pricing across India and on the global front. This has hence increased consumption and led to higher revenues, which has been another important objective achieved. Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.


Q.59: Question are be answered on the basis of the following passage:
The Goods and Services Tax, (GST) is proposed to be a comprehensive indirect tax levy on the manufacture, sale and consumption of goods and services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST which is a value added tax will be levied at all points in the supply chain but credit will be allowed for the taxes paid on inputs (used in making the supply) acquired. One of the primary objectives of GST was to remove the cascading effect of taxes. GST is game-changing reform for the Indian Economy, as it will bring the net appropriate price of the goods and services. the various factors that have impacted Indian economy are:
(i) Increases competitiveness: GST has removed the cascading effect of taxes, i.e., tax on tax. It is helpful in the reduction of cost of product. So, there is a scope to increase production, hence, competition increases.
(ii) Simple tax structure: Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.
(iii) Economic Union of India: GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence.
(iv) Uniform Tax Regime: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage.
(v) Greater Tax Revenues: As GST has increased the tax base, there is increase in tax revenue. The total gross GST revenue collected in the month of January, 2019 is ₹ 1,02,503 crore of which CGST is ₹ 17,763 crore, SGST is ₹ 24,826 crore, IGST is ₹ 51,225 crore (including ₹ 24,065 crore collected on imports) and Cess is ₹ 8,690 crore (including ₹ 902 crore collected on imports). January 2019 collections are 14% above the January 2018 collections of ₹ 89,825 crore.
(vi) Increase in Exports: Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.

Read the following statements carefully and choose the correct alternatives given below:
Statement 1: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly.
Statement 2: GST is a direct tax.
Alternatives:

(a) Both the statements are true.
(b) Both the statements are false.
(c) Statement 1 is true and Statement 2 is false.
(d) Statement 2 is true and Statement 1 is false.

Correct Answer is Option (c)
GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage. GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017. In other words, Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multistage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.


Q.60: Question are be answered on the basis of the following passage:
The Goods and Services Tax, (GST) is proposed to be a comprehensive indirect tax levy on the manufacture, sale and consumption of goods and services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST which is a value added tax will be levied at all points in the supply chain but credit will be allowed for the taxes paid on inputs (used in making the supply) acquired. One of the primary objectives of GST was to remove the cascading effect of taxes. GST is game-changing reform for the Indian Economy, as it will bring the net appropriate price of the goods and services. the various factors that have impacted Indian economy are:
(i) Increases competitiveness: GST has removed the cascading effect of taxes, i.e., tax on tax. It is helpful in the reduction of cost of product. So, there is a scope to increase production, hence, competition increases.
(ii) Simple tax structure: Calculation of taxes under GST is simpler. Instead of multiple taxation under different stages of supply chain, GST is a one single tax. This saves money and time.
(iii) Economic Union of India: GST made the trade easier between two states or two countries. Goods can be easily transported from one place to another under the new regime. This encourages businesses to have a PAN India presence.
(iv) Uniform Tax Regime: GST being a single tax, it has made it easier for the taxpayer to pay taxes uniformly. Previously, there used to be multiple taxed at every stage of supply chain, where the taxpayer would get confused, which was a disadvantage.
(v) Greater Tax Revenues: As GST has increased the tax base, there is increase in tax revenue. The total gross GST revenue collected in the month of January, 2019 is ₹ 1,02,503 crore of which CGST is ₹ 17,763 crore, SGST is ₹ 24,826 crore, IGST is ₹ 51,225 crore (including ₹ 24,065 crore collected on imports) and Cess is ₹ 8,690 crore (including ₹ 902 crore collected on imports). January 2019 collections are 14% above the January 2018 collections of ₹ 89,825 crore.
(vi) Increase in Exports: Exports are considered ‘zero-rated supplied’ under GST, i.e., no tax is levied on input tax side or the output side, which leads to reduction in the cost of product leading to increase the competitiveness towards the international market.

Read the following statements - Assertion (A) and Reason (R).
Assertion (A): GST was brought in as a revolutionary change and India’s biggest tax system.
Reason (R): The biggest benefit of GST was that it opened up entire India as a single unified market.
From the given alternatives choose the correct one.
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.

Correct Answer is Option (b)
GST was brought in as a revolutionary change and India’s biggest tax system overhaul since Independence. GST replaced a plethora of indirect taxes such as states’ sales tax, service tax, excise, etc., with a single central tax regime applied uniformly on all products and services. However, the biggest benefit of GST was that it opened up entire India as a single unified market allowing for free movement of goods across states borders, as opposed to the earlier scenario where state borders became barriers.

The document Class 12 Economics: CBSE Sample Question Papers- Term I (2021-22)- 3 Notes | Study Economics Class 12 - Commerce is a part of the Commerce Course Economics Class 12.
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