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Board Paper of Class 12-Commerce 2008 Economics (SET 1) - Solutions

General Instructions:
(i) All questions are compulsory.
(ii) Draw tables/diagrams wherever necessary.
(iii) Figures to the right indicate full marks.
(iv) Write answer of every new question on a new page.
  • Question 1

    Q.1 (A) Fill in the blanks with appropriate alternatives given in the brackets: [5 marks]

    1. In general the duration of budget is of ________ months.


    2. ___________ used the term of micro-economics for the first time.

    (Ranger Frisch/Ricardo/Marshall/Adam Smith)

    3. In developing countries the marginal propensity to consume (M.P.C.) is ________.


    4. The supply curve is ________ sloping.


    5. National income is a __________ concept.


  • Question 2

    Q.1 (B) State Whether the following statements are True or False :                              [5 marks]

    1. Consumption is one of the determinates of aggregate supply.

    2. Tax is a major source of revenue of the government.

    3. Commercial banks are non-profit making organizations.

    4. Money is what money does.

    5. Central bank works as friend, philosopher and guide to commercial banks.

  • Question 3

    Q.1 (C) Choose the correct answer :                              [5 marks]

    1. Demat account facility is useful for _________

    (a) retailers

    (b) consumers

    (c) customers dealing in sale and purchase of shares

    (d) wholesalers

    2. Macro economics does not study _________.

    (a) performance of the entire economy

    (b) economic activity as a whole

    (c) general activity as a whole

    (d) price determination of single commodity

    3. The relationship between saving and rate of interest is _________.

    (a) inverse

    (b) positive

    (c) constant

    (d) proportional

    4. Labour is geographically _________.

    (a) mobile

    (b) immobile

    (c) immovable

    (d) stationary

    5. One of the following is a type of capital expenditure _________.

    (a) administrative expenditure

    (b) investment expenditure on shares

    (c) expenditure on social services

    (d) expenditure of police

  • Question 4

    Q.1 (D) Match the following Group ‘A’ and Group ‘B’:  [5 marks]

    Group ‘A’

    Group ‘B’


    Single price




    Transport facility


    Dr. Marshall




    Perfect competition


    Law of Diminishing Marginal Utility


    Time utility


    Computation of National income






    From utility




    Double counting

  • Question 5

    Q.2 (A) Define or Explain the concepts (Any FOUR) :                               [8 marks]

    1. Stock

    2. Prof. Fisher’s definition of national income

    3. Propensity to consume

    4. Deficit budget

    5. Variable capital

    6. Aggregate demand

    7. Monopolistic competition

    8. Revenue receipts

  • Question 6

    Q.2 (B) State whether the following statements are TRUE or FALSE.  [8 marks]

    Give reasons : (Any FOUR)

    1. Utility can be measured cardinally.

    2. Demand curve slopes downward from left to right.

    3. The point method measures the elasticity of demand at a particular point on demand curve.

    4. Macro-economics is the study of individual factors.

    5. The supply curve of labour is backward bending.

    6. Micro-economics is the study of aggregates.

    7. Public revenue always exceeds public expenditure.

    8. The law of equi-marginal utility refers to consumer’s equilibrium.

  • Question 7

    Q.3 (A) Distinguish between. (Any FOUR) :                              [8 marks]

    1. Land and Capital.

    2. Macro-economic analysis and Micro-economic analysis.

    3. Pure competition and Perfect competition.

    4. Marginal utility and Total utility.

    5. Income elasticity of demand and Cross elasticity of demand.

    6. Current deposits and Fixed deposits.

    7. Individual demand and Market demand.

    8. Output and Supply.

  • Question 8

    Q.3 (B) Give reasons or Explain. (Any FOUR) :                              [8 marks]

    1. In surplus budget income is more than expenditure

    2. National income is an important tool to measure the overall performance of the economy.

    3. Money is a medium of exchange.

    4. Bank rate is the rate at which central bank lends money to commercial banks.

    5. Investment expenditure depends upon the rate of interest also.

    6. When consumption is equal to income, saving is zero.

    7. Micro-economic theories are based on assumptions.

    8. Margin requirement determines the value of load.

  • Question 9

    Q.4 (A) Write answers in one or two paras each. (Any TWO) :                              [8 marks]

    1. What are the different types of utility?

    2. Describe the assumptions to the law of supply.

    3. State the features of micro-economics.

    4. Explain the characteristics of labour.

  • Question 10

    Q.4 (B) Write explanatory notes. (Any TWO) :                              [8 marks]

    1. Saving function.

    2. Determinants of aggregate supply.

    3. Secondary functions of money.

    4. Features of national income.

  • Question 11

    Q.5 Answer with reasons whether you Agree or Disagree with the following statements. (any TWO): [16 marks]

    1. There are no exceptions to the Law of Demand.

    2. Macro-economics is different from Micro-economics.

    3. Accepting deposits is the only primary function of commercial banks.

  • Question 12

    Q.6 Answer in detail. (Any TWO) :                              [16 marks]

    1. What is Price elasticity of demand? Explain the different types of Price elasticity of demand.

    2. What is Monopoly? Describe the features of Monopoly.

    3. Explain the function of Central bank.

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