The Last Stand - Economics (Grade XII)

G – 12 – ECONOMICS – LAST STAND – 1 (01/10/2026)

3 Marks Questions (5 Mins/Q)

1.   On the basis of the following data about an economy which constitutes if only two firms, find out Value added by firms A and B. (₹ in crores): Sales by firm A  ₹300; Purchases from firm B by firm A ₹120; Purchases from firm A by firm B ₹180; Sales by firm B ₹600; Closing stock of firm A ₹60; Closing stock of firm B ₹105; Opening stock of firm A ₹75; Opening stock of firm B ₹135; Indirect taxes paid by both firms ₹90. 

2.   Suppose GDP of Nation C was ₹4,000 crores in 2018-19, when GDP of Nation D in the same year was ₹2,40,000 crores. If GDP of Nation C rises to ₹8,000 crores in 2019-20 and GDP of nation D rises to ₹4,00,000 crores in 2019-20. Compare the rate of change of GDP of nations C and D taking 2018-19 as the base year.

4 Marks Questions (7 Mins/Q)

3.   "Union Finance Minister stated, that investments in infrastructure and productive capacity have a large multiplier impact on growth and employment and in view of this, capital investment outlay is being proposed to increase steeply in the Budget 2022-23 by ₹1,000 crore." Based on the given text and common understanding, explain the working process of the increase in investment on the National Income, assuming the Marginal Propensity to Save as 20%.

4.    As per the following news published in The Economic Times on 26th 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.

5.    In an economy, the aggregate demand function is given by: AD = ₹200 crore + 0.7Y, the full employment level of income is ₹500 crore.

     (a) What is the situation in the economy? How much is the inflationary or deflationary gap? Give valid reasons in support of your answer.

     (b) Calculate the change in investment needed to combat the inflationary/deflationary gap in the economy.

6 Marks Questions (10 Mins/Q)

6.   (a) 'Average Propensity to Consume at break-even level of income is always equal to one.' Defend or refute the given statement, giving valid reasons in support of your answer.

      (b) 'The Aggregate Demand curve becomes distant from the Investment Curve with the increase in the level of income.' Defend or refute the given statement, giving valid reasons in support of your answer.

      (c) 'An economy facing an increase in unintended accumulation of inventories would try to reduce Aggregate Demand.' Defend or refute the above statement with valid arguments.

7.   In the city of Econotown, the local government has been analysing the impact of informal sector activities on the economy. For instance, Mrs. Smith, a housewife, spends her time cooking meals for her family at home, which is not included in the GDP. However, when she starts a catering business and provides cooking services to various clients for payment, her income is included in the GDP. This change highlights how different activities are treated in national income calculations.

      (a) Examine the difference in GDP inclusion between Mts. Smith's activities at home and her catering business. Discuss the reason behind this difference and elaborate on how this reflects a limitation of GDP as a measure of welfare 

      (b) State any three precautions that should be considered while calculating national income by income method.

G – 12 – ECONOMICS – LAST STAND – 2 (02/10/2026)

3 Marks Questions (5 Mins/Q)

1.   One of the reasons of high death rate amd low life expectancy at the time of independence was the frequent outbreak of famines. What were the causes of outbreak of famines? Do you think that the Britishers were sensitive towards the plight of the starving Indians? 

2.   "Green revolution transformed India from a subsistent foodgrain economy to a food surplus economy." Justify the statement giving reasons in support of your answer.

4 Marks Questions (7 Mins/Q)

3.   When conventional agriculture relies heavily on chemical fertilisers and toxic pesticides, etc. which is not good for health and organic farming is so eco-friendly and essential for sustainable development, then why government cannot take up the organic farming completely?

4.  (a) "It is necessary to generate employment in the formal sector rather than the informal sector." Justify the given statement with valid arguements.

     (b) What is Jobless growth?

5.    "Sustainable development has become a cath phrase today. It is 'indeed' a pardigm shift in development thinking." Justify the statement. Also, explain any three strategies to achieve this.

6 Marks Questions (10 Mins/Q)

6.   (a) “Government made a fresh statement of policy on the 30th April, 1956 which will help speeding up industrialisation and, in particular, to develop heavy industries and machine making industries, to expand the public sector, and to build up a large and growing co-operative sector”. Source: http://164.100.161.239/plans/planrel/fiveyr/index2.html (Planning Commission) In the light of the given text and common understanding, comment upon the classification of industries under the revised policy.

      (b) “The implementation of land ceiling legislation in India encountered several challenges that hindered its effectiveness.” Do you agree with the given statement? Give valid reasons in support of your answer.

7.   Read the following text carefully:

      Employment generation has remained one of the top challenges of Indian policymakers, and over the years, this has only become more complex. India has experienced more or less consistent growth in the structure of the output of the economy, especially after the economic reforms which is measured by gross value added. However, the trend in employment did not reveal a consistent and clear pattern. These complexities have led to a wide variation in the conclusions drawn by experts and various studies on workforce and employment.Two major sources of data on the workforce and employment have been the (i) decennial population census and (ii) nationwide quinquennial surveys on employment and unemployment by the erstwhile NSSO under the Ministry of Statistics and Programme Implementation (MoSPI), Government of India. The nationwide Employment and Unemployment (E&U) surveys have been replaced by the Periodic Labour Force Survey (PLFS) conducted by the National Statistical Office (NSO) of MoSPI, which started in the year 2017–18. According to NSO, the PLFS data measure the dynamics in labour force participation, workers to population ratio and the employment status along with related, important parameters for both rural and urban areas. Labour force includes persons who were either working (or employed) or those available for work (or unemployed). Some persons in the labour force are abstained from work for various reasons. Deducting that number from the labour force gives the number of actual workers. These workers are further categorised as persons who are engaged in any economic activity as self-employed or regular wage/salaried and casual labour. The difference between the labour force and the workforce gives the number of unemployed persons. The size of the labour force in the country has increased from 485.3 million in the year 2017–18 to 497.4 million in the year 2018–19. The next year, the labour force increased by 8 per cent and reached 537.9 million. This increase was witnessed across male and female populations as well as rural and urban households. Source:https://www.niti.gov.in/sites/default/files/2022-04/Discussion_Paper _on_Workforce_05042022.pdf (adapted and modified) 

      On the basis of the given text and common understanding, answer the following questions:

     (a) State any two major sources of data on the workforce and employment.  

     (b) ‘The labour force encompasses a broader category than the workforce.’ Defend or refute the statement, giving valid           reasons in support of your answer. 

     (c) ‘Workers can be categorized into different types depending on their status.’ In the light of the given statement, state any one type of employment.

G – 12 – ECONOMICS – LAST STAND – 3 (03/10/2026)

3 Marks Questions (5 Mins/Q)

1.   How are non-market activities, such as household production and volunteer work, treated in national income accounting? Give reasons for their inclusion or exclusion from national income calculations. 

2.   Calculate Sales if NNPFC ₹5,000 crore; Net Factor income to Abroad ₹ (-600) crore; GST ₹700 crore; Consumption of fixed capital ₹700 crore; Subsidies ₹300 crore; Intermediate consumption ₹800 crore; Excess of opening stock over closing stock ₹200 crore .

4 Marks Questions (7 Mins/Q)

3.   "Taxation is an effective tool to reduce the inequalities of income." Justify the given statement with valid reasons.

4.    For two hypothetical economies A and B, the value of Marginal Propensity to Consume (MPC) stands at 0.6 and 0.8 respectively. Assuming for both the economies, Autonomous Consumption to be ₹40 crore and Investment Expenditure to be ₹100 crore. Calculate Break-even level of income for economy A and Equilibrium level of income for economy B.

5.    "The Reserve Bank of India lowered the repo rate from 6% to 5.5%." This policy change is likely to stimulate economic activity. Explain how the repo rate cut can achieve this?

6 Marks Questions (10 Mins/Q)

6.   Giving reasons, explain the treatment assigned to the following while estimating national income.

      (a) Social security contributions by employees

      (b) Pension paid after retirement

      (c) Interest paid by banks on deposits by individuals

      (d) National debt interest

7.   The Aggregate Supply/ Aggregate Demand (AD/AS) model is useful for evaluating the conditions and factors that affect the level of Gross Domestic Product and inflation. The factors affecting aggregate demand include level of income, wealth, population, interest rates, credit availability, government demand, taxation, investments, et. Those that affect aggregate supply are costs, labor wages, resourses available, productivity and expectations like profits, inflationary and interest rates. According to Keynesian economics, not all GDP investment sums as part of aggregate demand, thus there would be reduced national output and income when there is unplanned investment. Production process sometimes produces excess goods that result in reduction in prices or demand. So, when aggregate expenditures are not equal to aggregate production, this results in changes in prices. This situation is where buyers and the sellers are out of balance. The househld and government are unable to purchase all the real production that the producers have and are unable to sell. Disequilibrium simply means an imbalance between total demand and total supply in production. Equilibrium aggregate market is the state where the real aggregate expenditures are equal to real production. This implies that real expenditures and/or production do not change, i.e. the opposing forces of aggregate demand and aggregate supply are in balance.

      (a) What happens when aggregate demand is not equal to aggregate production? 

      (b) Briefly explain the impact of macroeconomic disequilibrium using a suitable example.

G – 12 – ECONOMICS – LAST STAND – 4 (04/10/2026)

3 Marks Questions (5 Mins/Q)

1.   "The pre-independent India's occupational structure experienced growing regional variation." Justify the above statement with valid explanation. 

2.   Goals of equity was fully served by 'abolition of the intermediaries' in agriculture in the post-independence period of India. Do you agree with given statement? Support your answer with valid arguements.

4 Marks Questions (7 Mins/Q)

3.   "According to a report by the Reserve Bank of India, rural banking plays a crucial role in enhancing financial inclusion and promoting sustainable development in rural areas." Discuss two advantages and two limitations of rural banking in the context of rural development.

4.  "The Prime Minister urged to increase the rural income by increasing non-farm activities." Explain how non-farm activities can lead to rise in income of people in rural sector.

5.   The Times of India, June 2023 "The environment is essential for human survival and development, providing critical natural resources. However, environmental degradation threatens our health, economy and future." Based on the following statement, explain why the environment is important to us?

6 Marks Questions (10 Mins/Q)

6.   (a) Why the workforce in self-employment is least in urban areas and highest in rural areas?

      (b) "Mr. Rishi, after completing his education, has joined his family business but his marginal productivity is zero. Comment upon the employment status of Mr. Rishi. Give valid reasons in support of your answer.

7.   Read the following text carefully:

      At the time of India's independence in 1947, the country's economy was primarily agrarian, with nearly 70-75% of its population depending on agriculture for their livelihood. Despite this heavy reliance on agriculture, the sector was in a dismal state, plagued by low productivity, outdated farming techniques and widespread poverty. The land tenure systems like Zamindari, Ryotwari and Mahalwari , implememented during British rule, had exploited farmers, leading to large-scale landlessness and tenant farming. Farmers were forced to cultivate cash crops like cotton, indigo and jute for the benefits of British industries, leading to a decline in the production of foodgrains. On the industrial front, India's traditional industries, particularly handicrafts and textiles manufacturing, had been severly damaged by British colonial policies. Before British rule, India had a flourishing textile industry, renowned for products like Muslin of Dhaka and Kashmiri shawls. However, with the imposition of heavy tariffs on Indian goods and the flood of cheap machine-made British textiles, India's handicraft industries collapsed. Industrialisation in India during British rule was minimal, with limited development of modern industries like iron, steel, and jute. The Tata Iron and Steel Company (TISCO) and a few jute mills were some of the few notable industrial enterprises in operation. By 1947, the industrial sector contributed only about 10-12 % to the country's GDP. India lacked a sound infrastructure and industrial growth was stunted due to the absence of capital investment and technological advancements. Additionally, the focus on export of raw materials and import of finished goods reduced the opportunity for industrial self-reliance. 

      On the basis of the given text and common understanding, answer the following questions:

     (a) Describe the condition of India's agriculture on the eve of independence, mentioning the key reasons for its low productivity.  

     (b) How did British colonial policies impact India's industrial sector? Cite any one example from the case study to explain. 

G – 12 – ECONOMICS – LAST STAND – 5 (05/10/2026)

3 Marks Questions (5 Mins/Q)

1.   Two friends Ramesh (a software engineer) and Pihu (a bakery owner) are discussing their contribution to the nation's economy through tax payments. Ramesh earns ₹8,00,000 per year, which makes him liable to pay income tax. Pihu pays Goods and Services Tax (GST) on the sale of cakes and pastries. On the basis of the given text, identify whether Ramesh is paying a direct tax or an indirect tax. Explain valid differences between two types of taxes. 

2.   Calculate National Incorme from the following information (₹ in crores) : Net fixed capital formation ₹500; Change in stock ₹60; Private final consumption expenditure ₹2,500; Rent ₹250; Interest ₹200; Interest ₹200; Net Indirect Taxes ₹500; Net exports ₹30; Government final consumption expenditure ₹700; Net factor income from abroad ₹(-30); Consumption of fixed capital ₹120.

4 Marks Questions (7 Mins/Q)

3.   In an economy, autonomous consumption is ₹100 crore and autonomous investment ₹60 crore. In this economy, with every increase in income, 80% of it is spent on consumption. Calculate the additional investment required to reach the full employment level of income ₹1,000 crore.

4.   Describe the adjustment mechanism, if ex-ante aggregate demand (AD) is less than ex-ante aggregate supply (AS).

5.   Ms. Sarika is a retired government employee. Every month, she earns rental income from a property she owns. She has also invested in fixed deposit, which provide her with interest income. Occasionaly, she receives cash transfers from her family members abroad. Classify, Ms. Sarika's income as factor income or transfer income, giving valid reasons in support of your answer.

6 Marks Questions (10 Mins/Q)

6.   With reference to government budget, classify the following as Revenue receipt or Capital receipt. Give a valid reason for each.

      (a) Financial help from a Multinational Corporation for victims in a flood affected area.

      (b) Sale of shares of a Public Sector Undertaking to a private company

      (c) Dividend received by the government from a Maharatan company

      (d) Debt cleared by Sri Lanka Government to the Indian Government

7.   Read the passage given below and answer the questions that follow.

      The Monetary Policy Committee (MPC) increased the repo rate, at which RBI lends short term funds to the commerical banks, from 6.25% to 6.50%. This increase in repo rate is based on the increase in the key rate by 250 bps. The committee also decided to continue the withdrawl of money supply in the economy. 

[Source (Edited): The Economic Times, Feb 8, 2023]

      (a) Which function of Central Bank is hinted at, in the passage given above? 

      (b) In which situation does Central Bank adopt the measure given in the above passage and what is its likely impact?

      (c) Explain any two monetary measures that can be used to accomplish a similar objective, other than the one given in the above passage.