Term 1 Sample Paper Economics for Class 12 2021-22

Term 1 Sample Paper Economics for Class 12 2021-22

Time: 90 minutes

Maximum Marks: 40

GENERAL INSTRUCTIONS:
1. There are a total 60 questions in this paper out of which 50 questions are to be attempted.
2. This paper is divided into three Sections:
a. Section A – Contains 24 questions. Attempt any 20 questions.
b. Section B – Contains 24 questions. Attempt any 20 questions.
c. Section C – Contains 12 questions. Attempt any 10 questions.
3. All questions carry equal marks.
4. There is no negative marking.

 

SECTION A

(20 questions out of 24 questions are to be attempted)

1. The Government can achieve its budget objective of ‘Redistribution of Income’ by____________.

a) managing the General Price Level in the economy to the desired level.

b) increasing the Gross Domestic Products (GDP) of the economy.

c) bringing the production of goods and services under its direct and absolute control.

d) rationalisation of taxes in pro-poor direction.

Show Answer

d) rationalisation of taxes in pro-poor direction.

 

2. Balance of Payments of an economy records_____________ for a fiscal year.

a) income and expenditure of the government

b) inflow and outflow of funds of the government

c) inflow and outflow of foreign exchange to/from the economy

d) inflow and outflow of loans to/from the rest of the world

Show Answer

c) inflow and outflow of foreign exchange to/from the economy

 

3.Identify which of the following bank does not interact directly with the general public? 

a) Bank of India

b) State Bank of India

c) Central Bank of India

d) Reserve Bank of India

Show Answer

d) Reserve Bank of India

 

4. Identify which of the following is not an example of ‘invisible item’ under Current Account of the
Balance of Payments transactions: 

a) Air and sea transport

b) Postal and courier services

c) Education-related travel

d) Merchandise linked transactions

Show Answer

d) Reserve Bank of India

 

5. Read the following statements carefully and choose the correct alternative from the following:
Statement 1 – Demonetization was the step taken by the Government of India in order to tackle the problems of corruption, black money, terrorism and circulation of fake currency in the Indian Economy.
Statement 2 – Demonetization has ensured improved tax compliance in India over the period of time.

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

Show Answer

a) Both the statements are true.

 

6. Ms. Sakshi, an economics teacher, was explaining the concept of ‘minimum percentage of the total deposits to be kept by any commercial bank with the Central Bank of the country, as per norms and statute prevailing in the country’. From the following, choose the correct alternative which specifies towards the concept explained by her?

a) Cash Reserve Ratio

b) Repo Rate

c) Bank Rate

d) Statutory Liquidity Ratio

Show Answer

a) Cash Reserve Ratio

 

7. Two friends Mira and Sindhu were discussing the exchange rate systems.

‘Under this system, the exchange rates are determined by the market forces of demand and supply. However, deliberate efforts are made by the competent authority to keep the exchange rates within a specific range’.
The above-mentioned statement was given by Sindhu, identify the type of exchange rate system was she talking about?

a) Fixed Exchange Rate

b) Floating Exchange Rate

c) Managed Floating Exchange Rate

d) Managed Fixed Exchange Rate

Show Answer

c) Managed Floating Exchange Rate

 

8. Read the following statements carefully and choose the correct alternative from the following:
Statement 1 – Public goods are those goods and services that are collectively consumed by the public.
Statement 2 – Public goods are excludable and rivalrous in nature.

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

Show Answer

c) Statement 1 is true and Statement 2 is false

 

9. Under the Balance of Payments structure of a nation, the two main categories of accounts for the classification of the transactions are________ and ________. 
i. current account
ii. unilateral transfer account
iii. capital account
iv. loan account

Identify the correct alternatives from the following:
a) i and ii

b) i and iii

c) iii and iv

d) iv and i

Show Answer

b) i and iii

 

10. Identify which of the following is not a function of the Reserve Bank of India?

a) To act as the banker to the Government of India.

b) To act as the custodian of the gold reserve of India

c) To act as the financial advisor to the Government of India

d) To issue coins and one rupee note

Show Answer

d) To issue coins and one rupee note

 

11. Industrial Policy Resolution (IPR) 1956 formed the basis of the_________ Five Year Plan.

a) First

b) Fourth

c) Second

a) Third

Show Answer

c) Second

 

12. Occupational structure refers to___________ .

a) size of labour force in a country

b) number of people living in a country

c) distribution of workforce among different sectors of an economy

d) nature of different occupations

Show Answer

c) distribution of workforce among different sectors of an economy

 

13. _____________ is the portion of agricultural produce which is sold in the market by the farmers, after meeting their self-consumption requirements. 

a) Trade Surplus

b) Marketable Surplus

c) Producer Surplus

d) Consumer Surplus

Show Answer

b) Marketable Surplus

 

14. Read the following statements carefully and choose the correct alternatives given below:

Statement 1 –Poverty line in India is defined in terms of monetary value of the minimum nutritional (calorific) requirements of an individual in a day.

Statement 2 – The definition of poverty line in monetary terms has not changed over the years.

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

Show Answer

c) Statement 1 is true and Statement 2 is false

 

15. Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – India is often called as the ‘outsourcing hub’ of the world.
Statement 2 – Availability of skilled manpower is one of the prime factors responsible for the status gained by India at the international platform.

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

Show Answer

a) Both the statements are true.

 

16. Before the advent of Green Revolution in 1960’s, India was primarily dependent on _________ for the supply of food grains. 

a) United States of America (USA)

b) Britain (United Kingdom)

c) Mexico

a) Union of Soviet Socialist Republics (USSR)

Show Answer

a) United States of America (USA)

 

17. From the following given sets of statements in column I and II, choose the correct pair of statements.

 

Column I  Column II
A Exports of goods and services i Excess of Exports of goods over the Imports of goods
B Trade Surplus  ii An element of invisible items
C Current Transfers to rest of the world iii Recorded as a positive item in the BOP account
D Portfolio Investments iv Foreign Institutional Investors

 

a) A-i

b) B-ii

c) C-iii

d) D-iv

Show Answer

d) D-iv

 

18. National Bank for Agricultural and Rural Development (NABARD) was set up in 1982 as a/ the_________body to coordinate the activities of all institutions involved in the rural financing system. 

a) cooperative

b) apex

c) micro credit

d) private credit

Show Answer

b) apex

 

19. The Government of India has decided to vaccinate the adult population of India (with Covaxin/Covishield), without any charge. This would be categorized as ____________

a) revenue nature income

b) capital nature expenditure

c) revenue nature expenditure

d) capital nature income

Show Answer

c) revenue nature expenditure

 

20. ____________ is not a reason for poverty in India. 

a) population explosion

b) rise in per capita GDP

c) low capital formation

d) socio-economic exclusion

Show Answer

b) rise in per capita GDP

 

21. In a hypothetical economy, Mr. Neeraj has deposited ₹100 in the bank. If it is assumed that there is no other currency circulation in the economy, then the total money supply in the economy will be ______________.

a) zero

b) Rs. 100

c) not defined

d) Rs. 120

Show Answer

b) Rs. 100

 

22. ‘Since independence, India has witnessed a considerable fall in the Infant Mortality Rate in India’.Identify which of the following may not be one of the reasons for the fall in the Infant Mortality Rate? 

a) Improvement in health facilities over the years

b) Improvement in educational standards over the years

c) Fall in standard of living of the population of the nation over the years

d) Technological expansion over the years

Show Answer

c) Fall in standard of living of the population of the nation over the years

 

23. Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – Subsidies do not add any burden on the financial health of a nation.
Statement 2 – Complete removal of subsidies may violate the aim of equitable distribution of income

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

Show Answer

d) Statement 2 is true and Statement 1 is false

 

24. Prior to India’s independence, the stagnation in the agricultural sector was mainly caused by ___________. 

a) investment in technology

b) investment in agriculture facilities

c) advanced infrastructural facilities

d) land settlement system

Show Answer

d) land settlement system

 

SECTION B
(20 questions out of 24 questions are to be attempted)

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:

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.

Show Answer

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

 

26. Suppose in an economy, the initial deposits of ₹ 400 crores lead to the creation of total deposits worth Rs. 4000 crores. Under the given situation the value of reserve requirements would be________.

a) 0.01

b) 1

c) 0.1

d) 0.4

Show Answer

c) 0.1

 

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:

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.

Show Answer

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

 

28. Identify the incorrect statement from the following:

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.

Show Answer

c) Objective of investment in new agricultural avenues (non-farm activities) increases
financial risks for the rural population.

 

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:

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.

Show Answer

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

 

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:

 

 

Column I

(Name of the Scheme)

 Column II

(Objective of Poverty Alleviation Program)

A Mahatma Gandhi National Rural
Employment Guarantee Act
i developing infrastructure and housing conditions
B Poshan Abhiyan (Mid Day Meal Programme) ii guaranteed wage employment to rural unskilled worker
C National Social Assistance Programme iii helping specific group – elderly people by giving them pensions
D Valmiki Ambedkar Awas Yojana iv improving food and nutritional status of the poor

a) A-i

b) B-ii

c) C-iii

d) D-iv

Show Answer

c) C-iii

 

31.  Figure Showing Population below poverty line in some large states, 1973-2012(%).

figure

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

Show Answer

d) Andhra Pradesh, Rajasthan, West Bengal and Tamil Nadu

 

32. On the basis of the below-mentioned information answer the following question:

figure

The Real Per Capita Income of India (as per the given data) has increased by _______________ (approximately) between 1951 and 2016-17.

a) 915 %

b) 1015 %

c) 815 %

d) 715 %

Show Answer

a) 915 %

 

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:

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.

Show Answer

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

 

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.

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

Show Answer

a) Both the statements are true.

 

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.

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

Show Answer

c) Statement 1 is true and Statement 2 is false

 

36. Arrange the following event in the correct chronological order:

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

a) iv,ii,i,iii

b) i,iv,iii,ii

c) ii,iii,iv,i

d) iii,iv,ii,i

Show Answer

d) iii,iv,ii,i

 

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.

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.

Show Answer

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

 

38. Demand Deposits include______ and _________.
i. Saving account deposits
ii. Fixed deposits
iii. Current Account Deposits
iv. Post Office Savings

a) i and ii

b) ii and iii

c) i and iii

d) i and iv

Show Answer

c) i and iii

 

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.

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.

Show Answer

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

 

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.

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.

Show Answer

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

 

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.

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.

Show Answer

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

 

42. Choose the correct alternatives to be filled in given blanks A and B.

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

Show Answer

a) Low level of income and Low level of investment

 

Read the following statements and choose the correct alternative from the following
Statement 1: Economists identify the poor on the basis of their occupation and ownership of assest.
Statement 2: Urban poor are mostly an overflow of rural poor.

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

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

Show Answer

c) ensures gender equity

 

44. Suppose that the Balance of Trade (BOT) of a nation, exhibits a surplus of Rs. 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 Rs.______ crores. 

a) 30,000

b) 40,000

c) 24,000

d) 35,000

Show Answer

b) 40,000

 

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.

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

Show Answer

a) Both the statements are true.

 

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.

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.

Show Answer

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

 

47. Identify the correct statement from the following: 

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 favorably 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 favorably affected the structure, composition and volume of India’s foreign trade.

Show Answer

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.

 

48. Match the situations given in Column I with their respective implications given in Column II:

 

Column I  Column II
A Migration i reduced in per capita economic growth
B Low level of academic standards ii Imbalance between demand and supply of human resource
C Population- High Growth rate iii Brain Drain
D Lack of proper manpower planning iv Mismatch between required skill and academic standards

 

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

Show Answer

b) A-iii; B-iv; C-i; D-ii

 

SECTION C
(10 questions out of 12 questions are to be attempted)

Q.No. 49 – 54 are to be answered on the basis of the following data: (in Rs. Crores)

figure

49. The value of recovery of loans has___________ crores between 2019-20 (Actual) and 2020-21 (Budgeted Estimate). 

a) fallen by Rs. 3349

b) risen by Rs. 3349

c) fallen by Rs. 3439

d) risen by Rs. 3439

Show Answer

a) fallen by Rs. 3349

 

50. The percentage change in the Non-Tax Revenue, between 2019-20 (Actual) and 2020- 21(Budgeted Estimate), taking the 2019-20 as base, would be ____________.

a) 15.02%

b) 16.20%

c) 17.68%

d) 20.01%

Show Answer

c) 17.68%

 

51. Identify which of the following is not an example of tax revenue for the government:

a) Wealth Tax

b) Special Assessments

c) Income Tax

d) Corporate Tax

Show Answer

b) Special Assessments

 

52. Identify the correct formula to calculate Fiscal Deficit

a) Total expenditure – Total Receipt ( other than borrowings)

b) Revenue Expenditure- Revenue Receipt

c) Capital Expenditure- Capital Receipt

d) Revenue Expenditure + Capital expenditure – Revenue Receipt

Show Answer

a) Total expenditure – Total Receipt ( other than borrowings)

 

53. Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – Revenue and Capital receipts are increasing but borrowings and other liabilities are reducing.
Statement 2 – Grants and aid for creation of capital assets decreased from 2019 to 2021

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

Show Answer

c) Statement 1 is true and Statement 2 is false

 

54. The value of Primary Deficit for the year 2020-21, would be ₹_____________ crores. 

a) 88134

b) 321581

c) 96133

d) 609219

Show Answer

a) 88134

 

Q.No. 55-60 are to be answered on the basis of the following data:

India’s post-1990 economic strategy entailed three important breaks with the past:

 

To dismantle the vast network of controls and permits that dominated the economic system.

To redefine the role of the state as a facilitator of economic transactions and as a neutral regulator rather than the primary provider of goods and services.

To move away from a regime of import substitution and to integrate fully with the global trading system.

The 1991 reforms unleashed the energies of Indian entrepreneurs and gave untold choice to the consumers and changed the face of the Indian economy. The reform agenda constituted a paradigm shift, and has defined the broad contours of economic policymaking for three decades. Liberalization was adopted as the guiding principle of governance and all governments since 1991, have broadly stuck to that path.
Today we don’t need a paradigm shift. We need to look at individual sectors and see which one of these needs, reforms to create a competitive environment and improve efficiency. The power sector, the financial system, governance structures and even agricultural marketing need reforms.
Today’s reforms also require much more discussion and consensus-building. The central government needs to work in tandem with state governments and consult different stakeholders impacted by reform decisions. Timing and sequencing are critically important in the new reforms’ agenda.

55. According to the given text, ________ was adopted as the guiding principle of governance and all governments since 1991.

a) Modernization

b) Liberalisation

c) Privatization

d) Globalization

Show Answer

b) Liberalisation

 

56. Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – 1991 was a landmark moment in India’s post-independence history as that changed the nature of the economy in fundamental ways.
Statement 2 –India’s economic establishment launched a multipronged reforms agenda to repair India’s macroeconomic balance sheet and ignite growth.

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

Show Answer

a) Both the statements are true.

 

57. Read the following statements – Assertion (A) and Reason (R):
Assertion (A) – India’s pre-1990 economic strategy dismantles the vast network of controls and permits that dominated the economic system.
Reason (R) – The 1991 reforms unleashed the energies of Indian entrepreneurs, gave untold choice to consumers and changed the face of the Indian economy.

From the given alternatives choose the correct one:

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.

Show Answer

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

 

58. In the light of the given text and common knowledge, identify the incorrect statement: –

a) A severe balance of payments problem triggered an acute economic crisis in 1991.

b) In 1991, the economic and political leadership launched a multipronged reforms agenda to repair the macroeconomic situation of the nation.

c) In post 1991 situation, the state was given the role of primary regulator of the economy.

d) Post pandemic, individual sectors should be looked closely. Sectors that need reforms should be identified and corrective action should be taken.

Show Answer

c) In post 1991 situation, the state was given the role of primary regulator of the economy.

 

59. Read the following statements carefully and choose the correct alternatives given below:
Statement 1 – Timing and sequencing are critically important in the post-economic reform agenda.
Statement 2 – Post pandemic reforms in India require a paradigm shift.

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

Show Answer

c) Statement 1 is true and Statement 2 is false

 

60. Read the following statements – Assertion (A) and Reason (R):
Assertion (A) – The 1991 reforms released the vitalities of Indian businesspersons.
Reason (R) – The reform agenda established a paradigm shift and defined the broad outlines of economic policymaking for years to come.

From the given alternatives choose the correct one:

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.

Show Answer

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

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