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# Class 12 Economics Answer Key 2023 for Set 1, 2,3 PDF Solutions

## Class 12 Economics Paper Analysis : Students’ Reaction

According to students who took the class 12 Economics exam in 2023, the exam paper’s overall difficulty level was low to moderate. While some students thought Macroeconomics was easier, others said Microeconomics was easier and faster to solve. A couple of Multiple Choice Questions type questions caused some confusion.

## Economics Class 12 Answer Key 2023

The CBSE Class 12 Economics Answer Key 2023 is error-free and designed by experienced faculties in economics subject. Here we have given the miscellaneous information of the CBSE Class 12 Economics Answer Key 2023. Have a look at the table below to access a brief detail about CBSE Class 12 Economics Answer Key 2023:

 CBSE Class 12 Economics Answer Key 2023 Exam Conducting Body Central Board of Secondary Education Exam & Subject Name CBSE Class 12 Economics Category Answer Key & Paper Solutions Exam Date 17th March 2023 Unofficial Answer Key 17th March 2023 Official Answer Key To be notified Official Website https://www.cbse.nic.in/

## Class 12 Economics Answer Key 2023 Set 3 (54/4/3)

SECTION A

Macro Economics

1. An Indian company receives a loan from a company located abroad. This transaction would be recorded on the account in India’s Balance of Payment. side of

(Choose the correct alternative to fill up the blanks)

(a) Credit, Current

(b) Debit, Current

(d) Debit, Capital

1. Read the following statements carefully:

Statement 1: Investment is defined as addition to the physical capital and changes in the inventory.

Statement 2: At equilibrium level of income, ex-post investments and ex-post savings are always equal. In 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. – ANSWER

(d) Both Statements 1 and 2 are false.

1. The Reserve Bank of India (RBI) _________ government securities in a bid to ________  the stock of money in the economy.

(Choose the correct alternative to fill up the blanks)

(b) purchases, decrease

(c) sells, increase

(d) purchases, not change

4.Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative given below.

Assertion (A): Rich people have lower Marginal Propensity to Consume (MPC) as compared to poor people.

Reason (R): Consumption curve makes an intercept on the y-axis at a point above the origin.

Alternatives:

(a)  Both Assertion (A) and Reason (R) are true and   Reason (R) is the correct explanation of the Assertion (A).

(b)  Both Assertion (A) and Reason (R) are true, but Reason’ (R) is not the correct explanation of the Assertion (A). – ANSWER

(c) Assertion (A) is true, but Reason (R) is false.

(d) Assertion (A) is false, but Reason (R) is true.

1. Read the following statements: Assertion (A) and Rensen (R). Choose the correct alternative given below.

Assertion (A): Excess demand does not lead to any increase in the level of real output.

Reason (R): Excess demand creates a gap between actual demand and desired demand corresponding to full employment level.

Alternatives:

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of the Assertion (A)

(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A). -ANSWER

(c) Assertion (A) is true, but Reason (R) is false.

(d) Assertion (A) is false, but Reason (R) is true.

1. Read the following statements carefully:

Statement 1: Balance of Payment account is always balanced in accounting sense.

Statement 2: Autonomous transactions, restore balance in Balance of Payment account.

In 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. – ANSWER

1. (A) Choose the correct alternative to fill in the blanks (i) and (ii) in the figure.

Alternatives:

(a) National, Production

(b) Factor, Production

(d) National, Consumption

OR

(B) Operating Surplus does not include________.

(Choose the correct alternative to fill up the blank)

(a) Interest

(b) Rent

(c) Profit

1. Demand Deposits include ___________.

(Choose the correct alternative to fill up the blank)WRONG

(a) Currency and coins held with the public

(b)Other deposits with the Government

(c) Savings Account Deposits and Fixed Deposits

(d) Current Account Deposits and Fixed Deposits

1. (A) If the Marginal Propensity to Save (MPS) is 0-5, what will be the value of the investment multiplier? (Choose the correct alternative)

(a) 1

(c) 1-6

(d) 1- 45

OR

(B) An increase in National Income occurs by 3,000 crore, as investments increased by 1,200 crore. The value of investment multiplier would be _________.

(Choose the correct alternative to fill up the blank)

(a) 2

(c) 4

(b) 2 – 5 – answer

(d) 5

1. (A) Read the following statements carefully:

Statement 1: Depreciation of domestic currency may lead to a rise in exports.

Statement 2: Due to the depreciation of Indian National Rupee (₹), purchasing power of US Dollar (\$) may increase

In 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. – answer

(d) Both Statements 1 and 2 are false.

OR

(B) Identify, which one of the following is an intangible item in Balance of Payment (BoP).

(a) Export of food grains

(b) Imports of crude oil

(e) Export of Information Technology (IT) services to the U.S.A.- answer

(d) Import of coal by steel company in India

1. Suppose the Gross Domestic Product (GDP) at market price of a country in a particular year was ₹1,500 crore. Net Factor Income from Abroad was ₹100 crore. The value of Net Indirect Taxes was ₹180 crore and the National Income was ₹1,050 crore. Calculate the value of depreciation for the economy.

1. (a) ”The central bank needs to intervene under the managed floating system.” Do you agree with the given statement ? Support your answer with valid reasons.

OR

(b) Differentiate between Surplus in Balance of Trade and Current Account Surplus.

1. “In an economy, an increase in investment leads to doubling of the national income.” Calculate the Marginal Propensity to Consume (MPC) for the given economy.
2. Read the following text carefully:

“After setting up a working group to study the possibility of a Central Bank Digital Currency (CBDC) in India in 2020, the RBI revealed a concept note on digital rupee (e-Rupee) on 7th October, 2022.”

“The e-Rupee will provide an additional option to the currency available forms of money. It is substantially not different from bank notes, but being digital it is likely to be easier, faster and cheaper.”

RBI said that it broadly defines CBDC as the legal tender issued by a central bank in a digital form. It is akin to paper currency in a different form.

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

(a) Identify and discuss the function of central bank indicated in the above text.

(b) State any two advantages of digital rupee.

1. Discuss briefly, how the government can control the situation of deflation using the following:

(a) Taxation Policy

(b) Government Expenditure Policy

1. State the meaning of:

(a)Problem of Double Counting

(b) Operating Surplus

(c) Compensation of Employees

1. (a)(i) “Government provides essential items like food grains almost free to the families below poverty line.” Identify and explain the objective of the government budget indicated.

(ii) Define the following:

(1) Revenue deficit

(2) Primary deficit

OR

(b) State whether the following statements are true or false, with valid reasons:

(i) High tax on higher income groups aims to achieve the ‘reallocation of resources’ objective of the Government.

(ii) Borrowings are a revenue receipt of the government.

(iii) Fiscal deficit always leads to inflation.

SECTION B

Indian Economic Development

1. Under the British Rule, commercialisation of agriculture resulted in shifting of agricultural production from ______ crops to crops. (Choose the correct alternative to fill up the blanks)

(a) Cash, Food

b) cotton,jute

d) Jute, food

1. __________ markets were organized to protect the farmers from malpractices in mandis. (Choose the correct alternative to fill up the blank)

(b) Periodic

c) Daily

d) Weekly

1. (A) Carrying Capacity implies that _________ .

(i)  Resource extraction should remain below the rate of regeneration.

(ii) Resource extraction should remain above the rate of regeneration.

(iii) Generation of waste should remain within the absorption capacity of the environment.

(iv) Generation of waste should be more than the absorption capacity of the environment. (Choose the correct alternative) Alternatives:

(a) (i) and (iv)

(b) (i) and (iii)

(e) (ii) and (iii)

(d) (ii) and (iv)

OR

(B) _______ system restores, maintains and enhances the ecological balance. (Choose the correct alternative to fill up the blank)

(a) Chemical farming

(c) Conventional farming

(b) Organic farming

(d) Multi-layered farming

1. (A) Identify, which of the following alternative is not associated with goals of economic planning in India.

(a) Ensuring equitable standard of living

(c) Increase in economic growth

(d) Promoting imports of luxury goods

OR

(B) In 1951, agricultural contribution to India’s National Income was

(Choose the correct alternative to fill up the blank)

(a) Highest among the three sectors

(b) Lowest among the three sectors

(e) Lower than the industrial sector

(d) Lower than the service sector

22 (A) Economic reforms were introduced in the year _____ in Pakistan.

1. 1978,1988
2. 1988,1978
3. 1978,1991
4. 1991,1988

1. B) Pakistan is ahead of India in the case of ________.
2. HDI value
3. Per capita income
5. Life expectancy at birth

1. Arrange the following events of China in chronological order and choose the correct alternative:

(i) Great Proletarian Cultural Revolution

(ii) Great Leap Forward Campaign

(iii) Introduction of Economic Reforms

(iv) First Five Year Plan

Alternatives:

(a) (ii), (iv), (iii), (i)

(b) (iv), (ii), (i), (iii)

(c) (ii), (iv), (i), (iii)

(d) (iv), (i), (ii), (iii)

1. Read the following statements carefully:

Statement 1: Economic growth means the increase in real national income of a country.

Statement 2: Human capital formation and Human development are one and the same concepts.

In 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. Read the following statements carefully:

Statement 1: Liberty indicators’ measure the extent of constitutional protection given to the citizens.

Statement 2: India provides fair constitutional protection to its citizens.

In 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. Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative given below.

Assertion (A): China adopted the ‘Open Door Policy as a major economic reform initiative.

Reason (R): It aimed at industrializing the country on a massive scale.

Alternatives:

a)Both Assertion (A) and Reason (R) are true and Reason (R) in the correct explanation of the Assertion (A).

(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

(c) Assertion (A) is true, but Reason (R) is false.

(d) Assertion (A) is false, but Reason (R) is true.

1. Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative given below.

Assertion (A): The nature of unemployment problem in India is multi-faceted.

Reason (R): Worker-Population ratio is an indicator used for analyzing the employment situation in a country.

Alternatives:

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of the Assertion (A),

(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

(C) Assertion (A) is true, but Reason (R) is false

D) Assertion A is false, but Reason R is true.

1. “Human Capital benefits only the owner and not the society.” Defend or refute the given statement.
2. From the data, given below, compare and contrast India’s and China’s sectoral contribution towards GVA/GDP.

1. Discuss any two liberalisation measures pertaining to the financial sector, introduced by the Government of India during the economic reform process of 1991.

1. (a) (i) Explain the need and types of land reforms implemented in the agriculture sector.

(ii) Why was public sector given a leading role in industrial development during the planning period? Explain.

OR

(b) (i) Explain the reasons why the industrial sector has performed poorly in the reform period.

(ii) Distinguish between the Bilateral and Multilateral trade.

1. Read the following text carefully:

In October, 2014, the Government of India introduced a new scheme called Saansad Adarsh Gram Yojana (SAGY). Under this scheme, Members of India’s Parliament need to identify and develop one village from their constituencies. To begin with, MPs can develop one village as a model village by 2016, and two more by 2019, covering over 2,500 villages in India. According to the scheme, the village can have a population of 3,000 5,000 in the plains and 1,000 3,000 in the hills and should not be the MP’s own or their spouse’s village. MPs are expected to facilitate a village development plan, motivate villagers to take up activities and build infrastructure in the areas of health, nutrition and education.

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

(a) State and discuss, nay two objectives which the Government of India wanted to achieve through ‘Saansad Adarsh Gram Yojana (SAGY)

(b) State the yardsticks for selecting villages under the SAGY Scheme.

## Economics Class 12 Answer Key and Exam Pattern

Candidates must know the exam pattern of Class 12 Economics to calculate their expected marks using the Class 12 Economics Answer Key. The Question  Paper is a total of 80 Marks which includes Section A – Macroeconomics and Section B -Indian Economic Development. The Class 12 Economics Board Paper 2023 has 20 Multiple Choice Questions (MCQs) for one mark each. Four 3-mark Quick Answer Questions that must be answered in 60 to 80 words. 6 Short Answer Questions of 4 marks each, are to be answered in 80 to 100 words. Four Long Answer Questions of 6 marks each, to be answered in 100 to 150 words.

## Class 12 Economics Answer Key & Question Paper Solution 2023

As soon as the CBSE Class 12 Economics Exam 2023 is finished, we will post the comprehensive, 100 percent accurate CBSE Class 12 Economics Answer key 2023 with a question paper analysis. Save this page as a favourite so you can easily access the CBSE Class 12 Economics answer key for all sets.

Class 12th Boards Ka Vardaan eBook By adda247

## Economics Class 12 Answer Key 2023

The Class 12 Economics Answer Key 2023 is available on this page for use by students taking the Class 12 Economics exam on March 17, 2023. Students do not need to run to other websites in search of the Class 12 Economics Answer Key since we are the first to supply answer keys for all the topics before anybody else. Stay tuned with us.

## Class 12 Economics Question Papers for Answer Key

We will provide the CBSE Class 12 Economics Question Papers 2023 Pdf in this section. Applicants can compute their expected results by downloading Class 12 Economics Question Papers and analyzing the Class 12 Economics Answer Key.

 CBSE Class 12 Economics Question Papers 2023 Pdf Download CBSE 12 Economics Question Papers 2023- Set 1 CBSE 12 Economics Question Papers 2023- Set 2 CBSE 12 Economics Question Papers 2023- Set 3

## Last Year Class 12 Economics Question Paper Solution

Q.1(a) Distinguish between Consumption goods and Capital goods.

 Consumption Goods Capital Goods Definition Consumption goods are those goods that are used by the consumers and have no use in future. Capital goods are those goods that have a future use and are used for production of consumption goods Purpose Consumer goods are purchased in order to fulfill personal consumption needs Capital goods are purchased for manufacturing of consumption goods Target Market Consumer Manufacturers Demand Consumption goods have high demand Demand for capital goods is comparatively less Pricing Comparatively cheap Costlier in comparison to consumption goods

OR

(b) Giving valid reasons, classify the following into stock and flow variables:

i) Population of India as on 31st March 2021

ii) Domestic Income of Indian Economy during the fiscal year 2020-21

Q.3(a) If planned savings exceed planned investments in an economy, state its likely impact on output and employment.

When planned savings is more than planned investment, then the planned inventory would fall below the desired level. To bring back the Inventory at the desired level, the producers expand the output. More output means more income. Rise in output means rise in planned investment and rise in income means rise in planned savings.

OR

(b) If planned savings fall short of planned investments in an economy, state its likely impact on output and employment.

When planned savings is less than planned investment, then the planned inventory rises above the desired level. To clear the unwanted increase in inventory, firms plan to reduce the output till S becomes equal to I.

Q. 4 “Workers working in the formal sector earn more than those in the informal sector.” Defend or refute the given statement with valid arguments.

Some people are self-employed in the informal sector because they want to avoid registration and taxation. But many people work in the informal sector through necessity, not choice. Today, there are two features of the informal sector that are well-recognized. Firstly, much of the informal economy contributes greatly to the formal economy. Secondly, women constitute the majority of precarious, under-paid, informal workers.

What would a policy framework look like for an inclusive job market with broad objectives to move workers from informal to formal status? Here are two suggestions:

1. Robust legal protection: The United Nations Commission on Legal Empowerment of the Poor outlines three areas of legal rights for the working poor – property rights, business rights, and labor rights. Enforcing these rights allows informal workers to realize the economic value of their assets. They also allow for better working conditions and worker benefits, as well as allow access to the financial market. They imply a heightened need for the poor to have access to justice and the judiciary system.
2. Inclusive hiring targets and on-the-job training: Informal work is often undertaken because of barriers to entry to formal work. These barriers include the absence of requisite educational qualifications and the lack of corporate networks. The formal sector can bridge this gap by employing people from low-income households, investing in them through on-the-job training along with on-field exposure to working systems. A few firms engage in such processes through corporate social responsibility (CSR) objectives. However, mainstreaming this process by setting targets for hiring people who are found to be worthy of training would make the formal sector more inclusive.

Q.5 ” Economic development in India has been accompanied by environmental concerns.” Do you agree with the given statement? Give valid reasons in support of your answer.

Achieving economic development is vital to a country. But what if it comes at the cost of environmental degradation? With globalization opening the doors of economic development for so many countries, there is a serious concern regarding how far we are being able to save the environment and not hamper its constituents.

To understand the impact of economic growth and development on the environment, we need to be aware of the concept of sustainable development as an alternative solution.

The environment performs four crucial functions:

1. Supplying Resources: The environment contains both renewable (air, water, land) and non-renewable (fossil fuels) resources. While the former are re-usable and do not get depleted soon, non-renewable resources come with the fear of depletion.
2. Assimilating Waste: Economic activities generate waste which the environment absorbs through natural processes.
3. Sustenance of Life: The environment comprises abiotic components that aid the living of biotic components. In the absence of elements such as air, water, land, etc. there would be no life on the planet.
4. Aesthetic Value: The environment adds aesthetic value to life. The mountains, oceans, seas, landmasses and other scenery of the environment enhance the quality of life.

Q.6 “In the late 1970s, China’s population growth rate had sharply declined as compared to India.” Elucidate the reason and impact of this situation.

Since the 1970s, China’s total fertility rate has decreased dramatically. After a period of fluctuation around replacement level in the 1980s, it dropped below replacement level in the 1990s. The transition of fertility in China since the 1970s has been a demographic revolution. Analysis of the 2000 census reveals that by 2000 the total fertility rate of China had dropped to 1.4-1.6 (Morgan et al., 2009). Preliminary results of the 2010 census reveal that the total fertility rate is 1.18, well below the replacement level (PCO, 2012). The dramatic decline in fertility rate is at least to a certain extent attributable to China’s population policy, which is known as the one child policy. From the original strict control of population growth, to stabilization of a low fertility level in the 2010s, and to “upholding and improving” the current population policy, China’s population policy has undergone a series of changes, which have also affected the nation’s economy and social development.

SOCIAL IMPACTS

China’s population policy has clearly played a major role in decreasing the fertility level; however, it has also had many side effects (Wu et al., 2008). Already in the middle 1980s, far-sighted demographers predicted that if the one-child policy were to achieve complete success, these side effects would become much more serious (Bongaarts and Greenhalgh, 1985; Greenhalgh and Bongaarts, 1987). The 1980 Open Letter refuted concerns about some side effects, such as possible shortfalls in manpower, rapid population aging, and distortions in sex ratios (Greenhalgh and Winkler, 2005). However, after 30 years of implementation, with elimination of 100 million to 400 million births according to different estimates (Cai, 2010), the one-child policy, initiated during Deng’s administration, has created vast social difficulties and human suffering (Greenhalgh and Winkler, 2005).

Q.8 Discuss briefly any two similar development strategies followed by India and Pakistan.

India and Pakistan have followed many similar strategies in their respective development plans
(i) India and Pakistan both started their development process on economic planning after getting independence in 1947.
(ii) Both of them have adopted the mixed economic system involving the co-existence of both the public and the private sector.

Q.9(a) Briefly explain the different phases of circular flow of income.

Circular flow of income refers to unbroken circularity of real flows and money flows across the different sectors of the economy. Different phases of circular flow of income:
a) General phase
b) Distribution phase
c) Disposition phase.

Q.11 Explain the concept of deficient demand. How can government spending policy be helpful in correcting the situation of deficient demand?

Increase in the government spending during deficient demand or deflation causes injection of expenditure in the economy. As a result, aggregate demand, purchasing power and money supply get increased. Thus, the problem of deficient demand or deflationary gap in the economy gets combated.

Q.13 (a) Outline any two steps involved by the NITI Aayog index in attaining sustainable development.

• NITI Aayog has the twin mandate to oversee the adoption and monitoring of the SDGs in the country, and also promote competitive and cooperative federalism among States and UTs.
• The index represents the articulation of the comprehensive nature of the Global Goals under the 2030 Agenda while being attuned to the national priorities.
• In 2015, the UNs General Assembly adopted the 2030 Agenda for Sustainable Development.
• The 17 SDGs are a bold commitment to finish what the Millennium Development Goals (MDGs) started, and tackle some of the more pressing challenges.
• The SDG India Index 2020–21 is also live on an online dashboard, which has cross-sectoral relevance across policy, civil society, business, and academia.

## FAQs

### Where can I get the Class 12 Economics Answer Key 2023?

On this page, you will get the Class 12 Economics Answer Key 2023. The Class 12 Economics Answer Key 2023 is error-free and students can calculate their marks using Class 12 Economics Answer Key 2023.

### What is the subject code of Class 12 Economics?

The subject code of Class 12 Economics is 030.

### What is the exam pattern of Class 12 Economics?

The Class 12 Economics Board Paper 2023 has 20 Multiple Choice Questions (MCQs) for one mark each. Four 3-mark Quick Answer Questions that must be answered in 60 to 80 words. 6 Short Answer Questions of 4 marks each, are to be answered in 80 to 100 words. Four Long Answer Questions of 6 marks each, to be answered in 100 to 150 words.

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