CBSE 12th Term-2 2022 : Economics Important Questions with Solution

 

Q 1. Distinguish between Final Goods and Intermediate Goods.

Ans. Final goods refer to those goods which are used either for final consumption or for investment purposes. Whereas Intermediate goods refer to those goods which are used either for resale or for further production purposes.

Q 2. Distinguish between positive externalities and negative externalities.

Ans. Positive externalities refer to benefits caused by one entity to another, without being paid for it. Whereas Negative externalities refer to the harms caused by one entity to another without being penalized for it.

Q 3. Calculate equilibrium level of income for a hypothetical economy, for which it is given that:

a) Autonomous Investments = ₹ 500 crores, and 2

b) Consumption function, C = 100 + 0.80Y

Ans. Given Consumption function is,

C = 100 + 0.8 Y

Autonomous investments=500 crores We know, at equilibrium level

Y = C + I  Y = 100 + 0.8  Y + 500 

Y-0.8Y=600

0.2 Y =600

Y= ₹ 3,000 crores

Q 4. Calculate Change in Income (ΔY) for a hypothetical economy. Given that:

a) Marginal Propensity to Consume (MPC) = 0.8, and

b) Change in Investment (ΔI) = ₹1,000 crores

Ans. Given Δ I = ₹1,000 crores MPC = 0.8

As we know,

Multiplier (K) =  1/1–MPC    = 1/1–0.8  = 1/0.2 = 5 times

We know K = 𝛥 F/Δ I

5 = 𝛥 F/1000

ΔY = ₹ 5,000 crores

Q 5. ‘As the income increases, people tend to save more’. Justify the given statement.

Ans. At a lower level of income, a consumer spends a larger proportion of his/her income on consumption expenditure (basic survival requirements). As the income increases, owing to the psychological behaviour of a consumer (rational), people tend to consume less and save more for future uncertainty.

Q 6. State and discuss any two indicators that help in measuring the health status of a country.

Ans. Two indicators that help to measure the health status of a country are:

1. Infant Mortality Rate – Infant Mortality Rate (or IMR) indicates the number of children that survive first year of their life.
2. Literecy Rate – Literacy rate measures the proportion of literate population in the age group of seven years or above.

Q 7. Compare and analyze the ‘Women Worker Population Ratio’ in Rural and Urban areas based on following information:

Ans. The data in the given table reveals that:

a) Women constitute 16.5% of the total worker population in the economy.

The number of women workers in rural areas (17.5%) are relatively higher than the women workers in urban areas (14.2%). Due to the abject poverty in rural areas, rural women are compelled to work more than their urban counterparts.

Q 8. ‘Investment in infrastructure contributes to the economic development of a country.’

Ans. The given statement is true; infrastructural development in an economy increases productivity, induces higher investment, facilitates employment, and generates more income. With the rise in income, the quality of life of the people improves. Thus, conclusively we may say that infrastructure contributes to the economic development of a country.

Q 9. Giving valid reasons explain which of the following will not be included in estimation of the National Income of India?

a) Purchase of shares of X. Ltd. by an investor in the National Stock Exchange.

b) Salaries paid by the French Embassy, New Delhi to the local workers of the housekeeping department.

c) Compensation paid by the Government of India to the victims of floods.

Ans. Following will not be included in estimation of National Income of India:

1. As such transactions are mere paper claims and do not lead to any value addition.
2. Compensation paid by the Government of India is mere transfer payment and does not lead to any flow of goods and services in an economy

Q 10. Estimate the value of Nominal Gross Domestic Product for a hypothetical economy, the value of Real Gross Domestic Product and Price Index are given as ₹500 crores and 125 respectively.

Ans. Nominal GDP= Real GDP× price index/100

=500× 125/100

=₹ 625 crores

Q 11. Explain how ‘Non-Monetary Exchanges’ impact the use of Gross Domestic Product as an index of economic welfare.

Ans. Non-monetary exchange transactions are not included in the estimation of Gross Domestic Product on account of practical difficulties like non-availability of reliable data. Although these activities enhance public welfare which may lead to under-estimation of GDP.

For example: kitchen gardening, services of homemaker etc. 

Q 12. ‘Monetary measures offer a valid solution to the problem of Inflationary gap in an economy’. State and discuss any two monetary measures to justify the given statement.

Ans. Two measures which may be used to solve the problem of inflation are:

1. An increase in Cash Reserve Ratio (CRR) may reduce the credit creation capacity of the commercial banks in the economy. This may lead to a fall in the borrowings from banks causing a fall in Aggregate Demand in the economy, and helps to correct the inflationary gap in the economy.
2. Sale of Government Securities in the open market by the Central Bank will adversely affect the ability of the Commercial Banks to create credit in the economy. As a result Aggregate Demand in the economy may fall and correct the inflationary gap in the economy.

Q 13. a) ‘Pesticides are chemical compounds designed to kill pests. Many pesticides can also pose health risks to people even if exposed to nominal quantities.’ In the light of the above statement, suggest any two traditional methods for replacement of the chemical pesticides.

b) ‘In recent times the Indian Economy has experienced the problem of Casualisation of the workforce. This problem has only been aggravated by the outbreak of COVID-19.’ Do you agree with the given statement? Discuss any two disadvantages of casualisation of the workforce in the light of the above statement.

a) The traditional practices can help in controlling contamination without the use of chemical fertilizers, as follows:

1. Neem trees and its by products are a natural pest-controller, which has been used since ages in India. Recently, the government promoted the sale Neem coated urea as a measure of natural pest control.
2. Large variety of birds should be allowed to dwell around the agricultural areas, they can clear large varieties of pests including insects

b)   The given statement is quite appropriate with reference to the ‘casualisation of labour’ in India.

1. For casual workers, the rights of the labour are not properly protected by labour laws. Particularly, during pandemic times, as demand for goods and services fell the casual workers were left jobless, without any compensation or support.
2. During the COVID-19 lockdown millions of casual workers lost their jobs, raising the question of their survival. Also, additional health expenditure added to their troubles. Had such workers been working under the formal sector, it would have given them some respite in their difficult times.

CBSE Class 12 Term 2 Study Material

CBSE Class 12 Term 2 Study Material
CBSE Class 12 Reduced Syllabus for Term 2 Exam 2022	CBSE Class 12 Sample Paper for Term 2 Exam 2022
CBSE Class 12 Previous Year Question Paper with Solutions	CBSE Class 12 Term 2 Full Study Material 2022
CBSE Revision Notes For Class 12	CBSE Class 12 Topper Answer Sheet