CBSE Class 12 Sample Paper 2025 for Economics

CENTRAL BOARD OF SECONDARY EDUCATION

SAMPLE PAPER
CLASS 12
2025

ECONOMICS (030)
CLASS XII (2024-25)
SAMPLE QUESTION PAPER

TIME: 3 HOURS M.M. – 80
GENERAL INSTRUCTIONS:
I. This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development
II. This paper contains 20 Multiple Choice Type Questions of 1 mark each.
III. This paper contains 4 Short Answer Type Questions of 3 marks each to be answered in 60
to 80 words.
IV. This paper contains 6 Short Answer Type Questions of 4 marks each to be answered in 80
to 100 words.
V. This paper contains 4 Long Answer Type Questions of 6 marks each to be answered in 100
to 150 words.

Q.NO. SECTION A – MACRO ECONOMICS MARKS

1. Read the following statements: Assertion (A) and Reason (R). Choose the 1
correct option from those given below:
Assertion (A): The government can reduce the deflationary gap by
purchasing government securities in the open market.
Reason (R): The Central Bank purchases government securities in the open
market to increase the lending capacity of commercial banks.
Options:
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, but 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.

2. “The Cabinet led by Prime Minister has decided that the Central Government 1
will provide free food grains to 81.35 crore (approx.) beneficiaries under the
Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for a period of five
years with effect from 1st January, 2024.”
Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1980689
Based on the aforesaid statement, identify the budgetary objective the
government is trying to achieve and choose the correct option:
A. Reallocation of resources B. Economic stability
C. Redistribution of income D. Economic instability

3. To arrive at the value of Gross Value Added at Market Price (GVAMP) ______ 1
must be added to Gross Value Added (GVA) at Basic Prices.
(Choose the correct option to fill up the blank)
A. Product Taxes B. Net Product Taxes
C. Production Taxes D. Net Production Taxes

4, Under the _______ exchange rate system, market forces automatically adjust 1
the surplus and deficit in the Balance of Payments account.
(Choose the correct option to fill up the blank)

1

A. fixed B. flexible
C. managed floating D. dirty floating

5. From the given diagrams, identify the correct option that indicates the 1
‘Reference Line’ passing through the origin drawn at a particular angle.
(i) (ii) (iii) (iv)
Aggregate Expenditure

Aggregate demand

Income Income Income Income
A. (i) B. (ii) C. (iii) D. (iv)
For Visually Impaired Candidates:
Under the Keynesian theory, ‘Reference Line’ is a straight line passing 1
through the origin drawn at an angle of _____.
(Choose the correct option to fill up the blank)
A. 25 0 B. 45 0 C. 550 D. 750

6. As per the data presented in the Union Budget 2023-24, the total receipts of 1
the government other than borrowings and the total expenditure are
estimated at ₹ 27.2 lakh crore and ₹ 45 lakh crore respectively.
The value of the ________ deficit would be ₹ 17.8 lakh crore.
(Choose the correct option to fill up the blank)
A. revenue B. fiscal
C. budgetary D. primary

7. Read the following statements carefully: 1
Statement 1: The maximum value of Marginal Propensity to Consume (MPC)
can be unity.
Statement 2: As the income of an economy increases, the proportionate
increase in the level of consumption is always more than the increase in the
level of income.
In light of the given statements, choose the correct option 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.

8. In a two-sector economy, Aggregate Demand can be determined by adding 1
______. (Choose the correct option to fill up the blank)
A. Autonomous Consumption, Induced Consumption and Induced
Investment
B. Autonomous Consumption, Autonomous Investment and Induced
Investment
C. Autonomous Consumption and Autonomous Investment
D. Autonomous Consumption, Induced Consumption and Autonomous
Investment

9. Read the following statements carefully: 1
Statement 1: Foreign grants-in-aid receipts do not lead to any claim on the
government.
2

Statement 2: Disposal of equity by the Public Sector Undertakings in the
market may lead to a decrease in the assets of the government.
In light of the given statements, choose the correct option 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.

10. Based on the given diagram: 1
The trade under current account during January 2024 reflects a _________
of USD _____ billion. (Choose the correct option to fill up the blank)
A. surplus, 0.74 B. surplus, 3.85
C. deficit, 0.74 D. deficit, 3.85
Overall Trade (Merchandise + Services)

Source: https://commerce.gov.in/wp-content/uploads/2024/02/PIB-Press-Release-January-2024-1.pdf
For Visually Impaired Candidates:
________ indicates the situation of Current Account Deficit in the Balance of 1
Payments Account.
A. Receipts > Payments on current account
B. Receipts = Payments on current account
C. Receipts < Payments on current account
D. Receipts < Payments on capital account

11. On the basis of the given data, estimate the value of Domestic Income 3
(A) (NDPFC):
S. No. Items Amount
(₹ in crore)
i. Household Consumption Expenditure 800
ii. Gross Business Fixed Capital Formation 150
iii. Gross Residential Construction Investment 120
iv. Government Final Consumption Expenditure 170
v. Excess of Imports over Exports 20
vi. Inventory Investment 140
vii. Gross Public Investment 500
viii. Net Indirect Taxes 70
ix. Net Factor Income From Abroad (-) 50
x. Consumption of Fixed Capital 40
OR
11. State the steps pertaining to the estimation of National Income under the 3
(B) income method.

3

12. “Tax revenue collection of the government may be categorized under two 3
heads.”
State and explain the two heads of tax revenue.

13. (I) ‘Foreign Portfolio Investment (FPI) witnessed a sharp turnaround during 3
2023-24 with net FPI inflows of US$ 32.4 billion.’
In which sub-account and on which side of the Balance of Payments account
the above transaction will be recorded? Give reasons in support of your
answer.

(II) State the meaning of ‘Balance of Payments Deficit’. 1

14. “Saving curve can be derived from the consumption curve” 4
(A) Justify the statement, citing valid steps with the help of a well-labelled
diagram.
For Visually Impaired Candidates:
“Saving curve can be derived from the consumption curve”
Justify the statement, citing valid steps.
OR
14. For two hypothetical economies A and B, the value of Marginal Propensity to
(B) Consume (MPC) stands at 0.6 and 0.8 respectively. Assuming for both the
economies, Autonomous Consumption (c̅) to be ₹ 40 crore and Investment
Expenditure (I) to be ₹ 100 crore.
Calculate:
(I) Break-even level of income for Economy A 2
(II) Equilibrium level of income for Economy B 2

15. Read the following text carefully:
“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 2023-24 by 1,000 crore.” 4
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 (MPS) as 20%.

16. Read the following text carefully:
As societies developed from hunters and gatherers, the material needs of
human beings increased – to build a house, wear clothes, make weapons and
implements etc. Since these needs could not be produced individually, people
had to purchase them from others. These purchases, for example, were paid
initially by barter – a leather skin cloak for a spear. As barter had its limits –
how many cloaks for a spear – barter got standardized in terms of metals or
cowrie shells. Now people knew the value of both the cloak and the spear in
terms of bronze or cowrie shells. This was still barter, as both bronze and
shells had intrinsic value (shells were desired for their beauty). This system
evolved over time into metal currencies. Gold and silver coinage were the
offshoot of this system where they had features of barter (both gold and silver
had intrinsic value) as well as money (they were standardized representation
of value).
In respect of money two facts emerge historically:
• Money has taken the form of either commodities (which have intrinsic
value) or in terms of debt instruments.

4

• Money is usually issued by a sovereign (or a Central Bank as its
representative).
In modern economies, currency is a form of money that is issued exclusively
by some competent authority (Central Bank). It is a liability of the issuing
Central Bank and an asset of the holding public. Currency is usually issued in
paper (or polymer) form, but the form of currency is not its defining
characteristic.
In the recent past, the Reserve Bank of India, issued Central Bank Digital
Currency (CBDC). A CBDC is the currency issued by a central bank in a digital
form. It serves all the purposes of a paper currency in a different form.
The introduction of CBDC has the potential to provide significant benefits,
such as reduced dependency on cash, lower transaction costs, reduced
settlement risk. Introduction of CBDC would possibly lead to a more robust,
efficient, trusted, regulated payments option. There are associated risks such
as cyber-attacks and technology preparedness, but they need to be carefully
evaluated against the potential benefits.
Source: https://website.rbi.org.in/web/rbi/-/speeches-interview/central-bank-digital-currency-
is-this-the-future-of-money-1111 (adapted and modified)
On the basis of the given text and common understanding, answer the
following questions:
(I) “Over the centuries, money has evolved in various forms.” 3
In the light of the given statement, state and discuss briefly any two forms of
money.

(II) “Various economists have formed a strong opinion that, in the modern
times digital currency (like CBDC) is quite essential. However, it comes with 3
its own benefits and potential risks.”
Do you agree with the given statement, giving valid arguments in support of
your answer.

17. (I) On the basis of the following hypothetical data:
(A) (all figures in ₹ crore)
Year Nominal GDP Nominal GDP
adjusted to base year
prices 3
2020 3,000 4,000
2023 4,000 4,500
Calculate the percentage change in Real Gross Domestic Product in the
year 2023 using 2020 as the base year.
(II) “The public investment on the construction of a multi-lane flyover may
reduce traffic congestion.” 3
On the basis of the above statement, discuss its likely impact on Gross
Domestic Product (GDP) and welfare in an economy.
OR

17. (I) “Basis of classification of final goods into consumption and capital goods
(B) depend on the economic nature of its use.” 4
Defend or refute the statement, with the help of a suitable example.
(II) ‘Natural calamities in the hill states of India have led to massive destruction
of capital assets.’
Identify the type of loss (depreciation or capital loss) indicated in the aforesaid 2
statement. Give valid reasons in support of your answer.

5

SECTION B - INDIAN ECONOMIC DEVELOPMENT

18. Read the given image carefully: 1
Provides
Resources

Assimiliates FUNCTIONS OF
Waste ?
ENVIRONMENT

?

Choose the correct option which indicates the combination of vital functions
performed by the environment.
i. Sustains life
ii. Provides aesthetic services
iii. Generates waste
iv. Provides only renewable resources
Options:
A. (i) and (ii) B. (ii) and (iii)
C. (i) and (iv) D. (i) and (iii)
For Visually Impaired Candidates:
Identify, which of the following is not a correct function of environment? 1
(i) Elimination of waste
(ii) Sustainance of life
(iii) Provide aesthetic services
Alternatives:
A. (i) only B. (ii) only
C. (ii) & (iii) D. (i) & (ii)

19. Read the following statements carefully: 1
Statement 1: The British policies led to the collapse of India’s world-famous
handicraft industries.
Statement 2: During the colonial rule in India, the contribution of the industrial
sector to Gross Value Added (GVA) increased significantly.
In light of the given statements, choose the correct option 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.

20. Read the following statements: Assertion (A) and Reason (R). Choose the 1
correct option from those given below:
Assertion (A): The Education Commission (1964–66) had recommended
that at least 4 % of Gross Domestic Product (GDP) be spent on education.
Reason (R): The Union and State Governments, have been stepping up
expenditures in the education sector over the years to fulfil the objective of
attaining cent per cent literacy.
Options:

6

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, but 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.

21. In the post-independence era, the policymakers of India adopted an economic 1
system that fundamentally implies the coexistence of ______ and ________.
(Choose the correct option to fill up the blank)
A. small and large-scale industries B. small and medium-scale industries
C. public and private sector D. private and foreign sector

22. The institutional structure of rural banking in contemporary India consists of a 1
set of multi-agency institutions, namely, _________________.
(Choose the correct option to fill up the blank)
(i) Regional Rural Banks (ii) Cooperative Banks
(iii) Land Development Banks (iv) Commercial Banks
Options:
A. (i) and (iv) B. (i), (iii) and (iv)
C. (i), (ii) and (iii) D. (i), (ii), (iii), and (iv)

23. Identify, which of the following statement is incorrect about the financial 1
sector reform introduced in 1991? (Choose the correct option)
A. Enabled the establishment of private sector banks, Indian as well as
foreign
B. Foreign investment limit in banks was raised to around 74%
C. Foreign Institutional Investors were allowed to invest in Indian financial
markets
D. Change in the role of the Reserve Bank of India from facilitator to
regulator

24. China's demographic problem of 4-2-1, resulted in a higher proportion of 1
elderly individuals compared to the younger population. This was primarily
due to the implementation of ______.
A. Great Leap Forward Campaign
B. Great Proletarian Cultural Revolution
C. One Child Norm
D. Special Economic Zones

25. ______ was setup in 1974 by the Indian government to address two major 1
environmental concerns viz. water and air pollution.
(Choose the correct option to fill up the blank)
A. State Pollution Control Board B.Central Pollution Control Board
C. Brundtland Commission D. Montreal Protocol

26. “Assuming in a hypothetical economy, Real Gross Domestic Product 1
recorded a growth rate of 9% during a fiscal year. However, the economy
faced a significant challenge in terms of creating an adequate number of
employment opportunities.”
Identify the situation indicated in the given statement and choose the correct
option.
7

A. Casualisation of workforce B. Informalisation of workforce
C. Formalisation of workforce D. Jobless growth

27. During the period 1951-2016, __________ led to an increase in the milk 1
production in India by about ten times.
(Choose the correct option to fill up the blank)
A. Green Revolution B. Golden Revolution
C. Operation Flood D. Industrial Revolution

28. Critically appraise the disinvestment policy initiated by the government during 3
(A) the reforms of 1991.
OR
28. ‘Globalisation is an essential outcome of liberalisation of an economy’.
(B) Justify the given statement with a valid explanation. 3

29. ‘To measure the extent of development in an economy, liberty indicators 3
should be considered along with other socio-economic parameters.’
Do you agree with the given statement? Give valid reasons in support of your
answer.

30. ‘The reform process implemented in the late 1970s, commonly known as 4
China’s open door policy, encompassed a wide range of reforms across
sectors like agriculture, investment, industry etc. These reforms played a
pivotal role in driving the rapid growth of the Chinese economy over
subsequent decades.’
In the light of the given text, discuss any two reforms responsible for the rapid
economic growth of China.

31. ‘Under the Delhi Declaration, the G-20 nations pledged to reach global net
(A) zero emissions approximately by mid-century and to triple global renewable 4
energy capacity by 2030.’
Discuss briefly the rationale behind the commitment by G-20 nations in the
direction of achieving sustainable development.
OR
31. ‘It would be unclear to say that, the growth of human capital lays the ground
(B) for economic growth of a nation.’ 4
Do you agree with the given statement? Support your answer with valid
illustrations.

32. (I) Interpret the given picture based on the Saansad Adarsh Gram Yojana 3
(SAGY) initiated by the Government of India.

8

(II) State any two examples of allied activities. 1

For Visually Impaired Candidates in lieu of 32 (I) :
Explain briefly the Saansad Adarsh Gram Yojana (SAGY) initiated by the 3
Government of India.

33. 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:
(I) State any two major sources of data on the workforce and employment. 2
(II) ‘The labour force encompasses a broader category than the workforce.’ 3
Defend or refute the statement, giving valid reasons in support of your answer.
(III) ‘Workers can be categorized into different types depending on their
1
status.’
In the light of the given statement, state any one type of employment.

9

34. (I) ‘Under the Industrial Policy Resolution (IPR) 1956 in India, the system of 4
(A) industrial licensing was introduced to promote regional equality.’
Justify the given statement with valid arguments.
(II) Discuss briefly the estimates made by notable scholars regarding the 2
national income and per capita income during the colonial rule in India.
OR
34. (I) ‘During the colonial period, India’s foreign trade was characterized by a 3
(B) large export surplus, however, this did not result in any flow of gold or silver
into India.’
Justify the given statement with valid arguments.

(II) Explain the rationale behind choosing 'Self-reliance' as a central planning 3
objective in India's development strategy.

10

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