CBSE Class 12 Question Paper 2026 Solution Economics

FOR CBSE CLASS 12 EXAM PREPARATION

CBSE Class 12 2026
Question Paper
Solution · Economics
EXAM YEAR TYPE SUBJECT

CBSE Class 12 2026 Question Paper Solution Economics

Notes · Sample Papers · Previous Year Papers · Mock Tests

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Marking Scheme
Strictly Confidential g
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(For Internal and Restricted use only)
Senior School Certificate Examination, 2026
ECONOMICS (SUBJECT CODE – 030)
(PAPER CODE – 58/1/1)
General Instructions: -
1 You are aware that evaluation is the most important process in the actual and correct
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assessment of the candidates. A small mistake in evaluation may lead to serious
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problems which may affect the future of the candidates, education system and teaching

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profession. To avoid mistakes, it is requested that before starting evaluation, you must

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read and understand the spot evaluation guidelines carefully.
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“Evaluation a
policy is a confidential policy as it is related to the confidentiality
thea examinations conducted, Evaluation done and several other aspects. Its’
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leakage to public in any manner could lead to derailment of the examination
system and affect the life and future of millions of candidates. Sharing this
policy/document to anyone, publishing in any magazine and printing in News
Paper/Website etc may invite action under various rules of the Board and IPC.”
3 Evaluation is to be done as per instructions provided in the Marking Scheme. It should
not be done according to one’s own interpretation or any other consideration. Marking
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Scheme should be strictly adhered to and religiously followed. However, while

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evaluating, answers which are based on latest information or knowledge and/or

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are innovative, they may be assessed for their correctness otherwise and due
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marks be awarded to them. In Class XII, while evaluating competency-based
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questions, please try to understand given answer and even if reply is not from
marking scheme but correct competency is enumerated by the candidate, due
marks should be awarded.
4 The Marking scheme carries only suggested value points for the answers.These are in
the nature of Guidelines only and do not constitute the complete answer. The students
can have their own expression and if the expression is correct, the due marks should be
awarded accordingly.

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5 The Head-Examiner must go through the first five answer books evaluated by each
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evaluator on the first day, to ensure that evaluation has been carried out as per the
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instructions given in the Marking Scheme. If there is any variation, the same should be

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zero after delibration and discussion. The remaining answer books meant for evaluation
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shall be given only after ensuring that there is no significant variation in the marking of
ag individual evaluators.
6 Evaluators will mark( √ ) wherever answer is correct. For wrong answer CROSS ‘X” be
marked. Evaluators will not put right (✓)while evaluating which gives an impression that
answer is correct and no marks are awarded. This is most common mistake which
evaluators are committing.

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7 If a question has parts, please award marks on the right-hand side for each part. Marks
awarded for different parts of the question should then be totaled up and written in the
left-hand margin and encircled. This may be followed strictly.
8 If a question does not have any parts, marks must be awarded in the left-hand margin
and encircled. This may also be followed strictly.
9 If a student has attempted an extra question, answer of the question deserving more
marks should be retained and the other answer scored out with a note “Extra Question”.
10 No marks to be deducted for the cumulative effect of an error. It should be penalized only
once.
11 A full scale of marks 80 has to be used. Please do not hesitate to award full marks if the
answer deserves it.
12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8 hours
every day and evaluate 20 answer books per day in main subjects and 25 answer books
per day in other subjects (Details are given in Spot Guidelines).
13 Ensure that you do not make the following common types of errors committed by the
Examiner in the past:- Giving more marks for an answer than assigned to it.
● Wrong totaling of marks awarded on an answer.
● Wrong transfer of marks from the inside pages of the answer book to the title page.
● Wrong question wise totaling on the title page.
● Leaving answer or part thereof unassessed in an answer book.
● Wrong totaling of marks of the two columns on the title page.
● Wrong grand total.
● Marks in words and figures not tallying/not same.
● Wrong transfer of marks from the answer book to online award list.
● Answers marked as correct, but marks not awarded. (Ensure that the right tick mark
is correctly and clearly indicated. It should merely be a line. Same is with the X for
incorrect answer.)
● Half or a part of answer marked correct and the rest as wrong, but no marks awarded.
14 While evaluating the answer books if the answer is found to be totally incorrect, it should
be marked as cross (X) and awarded zero (0)Marks.
15 Any un assessed portion, non-carrying over of marks to the title page, or totaling error
detected by the candidate shall damage the prestige of all the personnel engaged in the
evaluation work as also of the Board. Hence, in order to uphold the prestige of all
concerned, it is again reiterated that the instructions be followed meticulously and
judiciously.
16 The Examiners should acquaint themselves with the guidelines given in the “Guidelines
for spot Evaluation” before starting the actual evaluation.
17 Every Examiner shall also ensure that all the answers are evaluated, marks carried over
to the title page, correctly totaled and written in figures and words.
18 The candidates are entitled to obtain photocopy of the Answer Book on request on
payment of the prescribed processing fee. All Examiners/Additional Head
Examiners/Head Examiners are once again reminded that they must ensure that
evaluation is carried out strictly as per value points for each answer as given in the
Marking Scheme.

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MARKING SCHEME

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Senior School Certificate Examination 2026
ECONOMICS (Subject Code–030)
[Paper Code: 58/1/1]
Maximum Marks: 80
Q. No. EXPECTED ANSWER / VALUE POINTS Marks
SECTION -A
(Macro Economics)
1. In a two sector economy, the flow of factor payments moves from __________ to
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__________. (Choose the correct option to fill in the blanks)

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(A) firms, households (B) firms, government

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(C) banks, households (D) households, firms
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Ans. (A) firms, households
2.
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Read the following statements: Assertion (A) and Reason (R). Choose the correct
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option from those given below:
Assertion (A): Money is of perishable nature and is generally accepted by all at any
point of time.
Reason (R): Money serves as a store of value, facilitating individuals to transfer
purchasing power from the present to the future.
Options:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct
explanation of Assertion (A).
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(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of Assertion (A).
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(C) Assertion (A) is true, but Reason (R) is false.
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(D) Assertion (A) is false, but Reason (R) is true.

3. Read the following statements carefully:
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Ans. (D) Assertion (A) is false, but Reason (R) is true. 1

Statement 1: Depreciation of currency is an economic action undertaken by the
government of a nation under the fixed exchange rate system.
Statement 2: Under the floating exchange Rate system, authorities actively intervene
in the foreign exchange market by way of maintaining foreign exchange reserves.
In the light of the given statements, choose the correct option from the following:
(A) Statement 1 is true and statement 2 is false.
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(B) Statement 1 is false and statement 2 is true.
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(C) Both statements 1 and 2 are true.
(D) Both statements 1 and 2 are false.
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a corresponding to the full employment, the difference is termed a deflationary gap.
(Choose the correct option to fill in the blank)
Options:
(A) ex-ante Aggregate Demand (B) ex-post Aggregate Demand
(C) ex-ante Aggregate Supply (D) ex-post Aggregate Supply
Ans. (A) ex-ante Aggregate Demand 1
5. In an economy, exclusion of ___________ may lead to under estimation of the value
of Gross Domestic Product (GDP). (Choose the correct option to fill in the blank)
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(i) Barter Transactions
(ii) Services provided by family members
(iii) Illegal activities
(iv) Depreciation of Assets
Options:
(A) (i) and (ii) (B) (ii) and (iii)
(C) (iii) and (iv) (D) (i), (ii) and (iii)
Ans. (A) (i) and (ii) 1
6. Identify, which of the following is true at the Break Even level of Income.
(Choose the correct option)
Options:
(A) Slope of Consumption Curve = Slope of Saving Curve
(B) Average Propensity to Consume (APC) = Average Propensity to Save (APS)
(C) Slope of Saving Curve = Unity (1)
(D) Average Propensity to Consume (APC) = Unity (1)
Ans. (D) Average Propensity to Consume (APC) = Unity (1) 1
7. Read the following statements carefully:
Statement 1: Final goods are those goods which normally lose their identity in the
production process.
Statement 2: Final goods may get transformed during the consumption process by a
consumer. (Choose the correct option)
Options:
(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.
Ans. (B) Statement 1 is false and statement 2 is true. 1
8. Read the following statements: Assertion (A) and Reason (R). Choose the correct
option from those given below:
Assertion (A): Unilateral Transfers are recorded in the Current Account of the
Balance of Payments (BoP) of a nation.
Reason (R): Capital account records transactions which cause a change in the assets
or liabilities of the country.
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.
Ans. (B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the 1
correct explanation of Assertion (A).
9. “In the Indian Banking System, the Statutory Liquidity Ratio (SLR) plays a vital role
in controlling the credit creation capacity of the Commercial Banks, as it
__________.” (Choose the correct option to fill in the blank)
(A) ensures that all the deposits are converted into liquid assets.
(B) requires banks to maintain a percentage of deposits in the form of liquid assets.
(C) sets the maximum interest rate which the banks can charge on loans.
(D) promote banks from lending beyond a specific proportion of their total reserves.

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Ans. (B) requires banks to maintain a percentage of deposits in the form of liquid 1

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assets.
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‘In an economy, the currency held by the public, Net Demand Deposits with la
10.
Commercial Banks and Net Time Deposits with Commercial Banks stand at ₹a
1,42,000 crore, ₹ 22,000 crore and ₹ 86,000 crore respectively.
The value of Money Supply (M1) would be ₹ __________ crore.
(Choose the correct option to fill in the blank)
Options:
(A) 2,50,000 (B) 86,000
(C) 1,64,000 (D) 1,42,000
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Ans. (C) 1,64,000 1
11.
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Meera and Shahid are two classmates, who were comparing India’s economic growth
(A) over the years.
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Meera referred to the increase in Gross Domestic Product (GDP) at current prices
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prevailing in market, while Sahid insisted on considering GDP after adjusting for
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inflation. Their debate on which of the two measures gives a true picture of people’s
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well-being, remained inconclusive.
Considering the above mentioned situation, elaborate with valid reason, which of the
two variables is considered a better indicator of welfare and why?
Ans. Gross Domestic Product (GDP) after adjusting for inflation (Real GDP) is 1
a better measure of welfare than GDP at current prices (Nominal GDP).
Real GDP is a true indicator of economic growth of a country as it changes only 1
with the change in physical output. Thus, it eliminates the effect of changes in
prices, showing the real growth of the economy.
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In contrast, Nominal GDP might change with the change in output or/and change 1

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in prices.

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(B)
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Two friends, Ravi and Harry were discussing whether the money received from sale
of an old car should be included in India’s National income.
Ravi was of the view that it should be included in India’s National income while Harry
did not agree with him.
They also had difference of opinion on the treatment of brokerage paid to the car
dealer.
As their Economics teacher, state the treatments with valid arguments.
Ans. Harry’s opinion is correct.
The money received from the sale of an old car will not be included in India’s
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National Income because its value was already included in the year it was
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and services.
s However, the brokerage paid to the car dealer is included in India’s National
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g Income, as it represents payment for productive services rendered in the currenta
a year.
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12. “Under the provisions stated in the Section 20 and Section 21 of the Reserve Bank of
India (RBI) Act, 1934, the RBI is mandated to handle the banking operations of the
Government of India.”
In the light of the given statement, elaborate the indicated function of the Reserve
Bank of India.

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Ans. The Reserve Bank of India (RBI) serves as banker to the government,
managing its accounts, receiving deposits and processing payments. Exchanges,
remittances and various banking operations are facilitated by the RBI on behalf 3
of the government.
In addition to this, during any financial crisis, RBI provides credit to the
government to ensure its smooth functioning and to support the state in
managing its obligations effectively. (To be marked as a whole)
13. For a hypothetical economy, assuming there are only two firms (X and Y) with equal
(A) values of Gross Value Added (GVA).
On the basis of the following data, estimate the value of Domestic Sales of both the
firms (X and Y):
Amount
S. No. Items
(in ₹ crore)
(i) Value of Output of firm Y 700
(ii) Purchases by firm X from firm Y 200
(iii) Exports by firm X 100
(iv) Purchases by firm Y from firm X 150
(v) Additions to Stock of firm X 50
Ans. Gross Value Added of Firm Y = (i) – (iv) ½
= 700 – 150
= ₹ 550 crore ½
Domestic Sales of Firm Y = Gross Value Added of Firm Y + (iv) ½
= 550 + 150
= ₹ 700 crore ½
Gross Value Added of Firm X = Gross Value Added of Firm Y = ₹ 550 crore

Domestic Sales of Firm X = Gross Value Added of Firm X – (iii) – (v) + (ii) 1
= 550 – 100 – 50 + 200 ½
= ₹ 600 crore ½
OR 4
(B) Ms. Reeta D’Costa, retired from the post of Income Tax Commissioner in the year
2023.
Apart from her pension, she also receives the following from various sources:
• Rental income from a flat she owns.
• Interest income from her fixed deposits.
• Money sent by her children settled abroad.
Identify and classify, her monthly incomes into ‘factor income’ and ‘transfer income’,
with valid reasons.
Ans. Factor Income:
• Rental income from a flat she owns. ½
• Interest income from her fixed deposits. ½
• Retirement pension (Deferred Payment) ½
Transfer Income:
• Money sent by her children settled abroad. ½
Factor income is the income earned by the factors of production for rendering 1
their services.

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Transfer income is the income received without rendering any productive service
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in return.
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14. Michel, an entrepreneur of Country Zeta, borrowed $ 5 million
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to expand his textile business.
During the same financial year, the Government of Country Zeta secured a loan of
$ 30 Billion from an International Financial Institution to manage the ongoing Balance
of Payments.
Samuel, an Economics student categorised both of these transactions as ‘autonomous
transactions’ in the BoP account of the country.
Do you agree with his classification? Justify your answer with valid reasons.
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Ans. No. The loan taken by the Government of Zeta in this case can be classified
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as an accommodating transaction. Such transactions are those international
economic transactions which are undertaken (by competent authorities) to cover
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the surplus or deficit in Balance of Payments (BoP) and are independent of any
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economic motive.
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However, loan taken by Michel, can be classified as an autonomous transaction.
Such international economic transactions are independent of the state of BoP
and generally take place with an economic motive.
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15. Refer the given image carefully:

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Explain any two measures that can bel ataken by the Central Bank to control the
indicated macroeconomic problem. a
Ans. To deal with the situation of highlighted macroeconomic problem i.e.
inflation, the Central Bank may use the following measures:
• Repo Rate: A rise in repo rate will force the commercial banks to increase
the lending rates, making the credit dearer for the general public, 2
discouraging the borrowings. Consequently, Aggregate Demand will fall
thus correcting the problem of inflation in the economy.
• Open Market Operations: The Central Bank can sell government
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securities in the open market, thereby, reducing the availability of funds

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with the commercial banks for lending. Consequently, Aggregate Demand
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will fall thus correcting the problem of inflation in the economy.
(Any other valid interpretation and explanation of the image to belawarded
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of Q. No. 15.
State and explain any two measures that can be taken by the Central Bank to control
the situation of deficient demand.
Ans. To deal with the situation of deficient demand, the Central Bank may use
the following measures:
• Repo Rate: A fall in repo rate will encourage the commercial banks to
decrease the lending rates making the credit relatively affordable for the 2
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general public, encouraging the borrowings. Consequently, Aggregate
Demand will rise thus correcting the problem of deficient demand in the
economy.
• Open Market Operations: The Central Bank can purchase the
government securities in the open market, thereby, increasing the
availability of funds with the commercial banks for lending. 2
Consequently, Aggregate Demand will rise thus correcting the problem
of deficient demand in the economy.
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16. “Income of an economy increased from ₹ 20,000 to ₹ 50,000 crore. Savings of the
(A) economy increased from ₹ 2,000 crore to ₹ 10,000 crore.”
(i) Calculate Average Propensity to Consume (APC) and Average Propensity to Save
(APS), before and after the rise in income.
Ans.
Income Savings Consumption APC APS
(Y) (S) (C = Y - S) (C/Y) (S/Y)
(in ₹ crore) (in ₹ crore) (in ₹ crore)
20,000 2,000 18,000 𝟏𝟖𝟎𝟎𝟎 𝟐𝟎𝟎𝟎
𝟐𝟎𝟎𝟎𝟎 𝟐𝟎𝟎𝟎𝟎 1+1
= 0.9 = 0.1
50,000 10,000 40,000 𝟒𝟎𝟎𝟎𝟎 𝟏𝟎𝟎𝟎𝟎
𝟓𝟎𝟎𝟎𝟎 𝟓𝟎𝟎𝟎𝟎 1+1
= 0.8 = 0.2
(Any other valid alternative solution to be awarded marks)
(ii) Draw appropriate conclusion regarding the behaviour of Average Propensity to
Consume (APC) as his income increases.
Ans. From the given data, it can be concluded that as income increases from
₹ 20,000 to ₹ 50,000 crore, value of Average Propensity to Consume (APC) falls 2
from 0.9 to 0.8, thereby establishing an inverse relationship between the level of
income and APC.
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(B) “Under a study, examining the spending habits of a hypothetical economy, it was
observed that even households with zero income managed to consume basic
necessities.
As the income of people increased, their consumption also increased, but not as
rapidly as income.”
Based on the given text and common understanding, answer the following questions:
(i) Identify and elaborate the type of consumption indicated in the first para of the
above text.
Ans. The type of consumption indicated in the above paragraph is Autonomous
1
Consumption.
Autonomous Consumption is independent of level of income. Autonomous
Consumption signifies the minimum level of consumption which is essential for 2
survival.
(ii) Explain, the reason behind the positive slope of Aggregate Demand Curve.
Ans. Aggregate Demand (AD) is the sum of consumption and investment. Based
on the assumption that, investment is autonomous, thereby, when income rises, 3
consumption also rises, which leads to a rise in Aggregate Demand. Hence,
Aggregate Demand curve slopes upward, reflecting a direct relationship between
income and Aggregate Demand.
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c. o 17. Refer the given text carefully:
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budget's projections for
s the fiscal year 2025-26 indicate that gross direct tax revenue g
a will rise by 12.7%, while
gross indirect tax collections are expected to grow by 8.3% relative to FY 2024-25.
Direct taxes include income tax and corporate tax, reflecting earnings and profits of
households and firms. It plays a key role in revenue growth of the government.
Indirect taxes encompass Goods and Services Tax (GST), custom duties and other
transaction-based levies.
Higher growth rate projected for direct taxes suggests a push to enhance tax buoyancy
through improved compliance and reforms. On the other hand, indirect taxes are
expected to benefit from consumption trends and Goods and Services Tax (GST)
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administration improvements. The balance tax strategy aims to mobilise resources
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while supporting fiscal consolidation and sustainable economic growth.
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On the basis of the above passage and common understanding, answer the following
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questions:
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(i) Differentiate between the two types of taxes indicated in the above text, with
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suitable examples.
Ans. The two types of taxes indicated in the above text are direct and indirect
taxes.
Direct taxes are those taxes whose impact and incidence lies on the same entity. 1½
In other words, the liability of paying direct taxes can’t be shifted.
For example: Income tax etc. ½
Whereas;

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Indirect taxes are those taxes whose impact and incidence may lie on different 1½

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entities. In other words, the liability of paying indirect taxes can be shifted.
For example: Goods and Services Tax (GST) etc.
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(Any other valid example to be awarded marks)

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(ii) Elaborate the likely consequences of the tax projections made by the government.
Ans. The projected increase in tax revenues is likely to strengthen the
government’s revenue base. Overall, this balanced tax strategy will help mobilise 2
resources, support fiscal consolidation and promote sustainable economic
growth.
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SECTION – B
(Indian Economic Development)

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18. Read the following statements carefully:

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Statement 1: During the British rule in India, the export surplus was utilised to import

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of invisible items from Britain.

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Statement 2: Indians paid for the expenses incurred by an office set up by the colonial
s e government in Britain.
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a (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.
Ans. (C) Both statements 1 and 2 are true. 1
19. Read the following statements: Assertion (A) and Reason (R), Choose the correct
option from those given below:

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Assertion (A): Education facilitates the assimilation of knowledge and competencies.
It also fosters inventive capacities and enhances the aptitude to integrate advance
technology.
Reason (R): Education plays a pivotal role in transforming cognitive perspectives and
serves as a catalyst for the economic advancement of a nation.
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.
Ans. (B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the 1
correct explanation of Assertion (A).
20. Read the following text carefully:
“In the recent times, the Government of India, has introduced several measures to
encourage greater public participation in the capital market, including both primary
and secondary stock markets.”
Under which sector have the above mentioned reforms been introduced?
(Choose the correct option)
Options:
(A) Industrial (B) Financial
(C) Taxation (D) Foreign Trade
Ans. (B) Financial 1
21. The Montreal Protocol was signed in the year 1987 committing nations to____.
(Choose the correct option to fill in the blank)
Options:
(A) protect biodiversity from any further losses.
(B) reduce the impact of global warming.
(C) protect ozone layer from depletion incurred due to chlorofluoro carbons.
(D) reduce the impact of deforestation.
Ans. (C) protect ozone layer from depletion incurred due to chlorofluoro carbons. 1
22. Read the following statements: Assertion (A) and Reason (R), Choose the correct
option from those given below:
Assertion (A): The notion of rural development encompasses a far wider spectrum
than agricultural advancement.
Reason (R): Government interventions in the agricultural sector remain imperative,
as it constitutes the primary means of sustanance for the rural population.
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.
Ans. (B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the 1
correct explanation of Assertion (A).
23. Identify, which of the following, highlights a highly relevant issue associated with
evolving employment trends in India’s labour market?

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(A) Progressive increase in the share of permanent salaried employees.
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(B) Increase in the proportion of casually employed individuals.
(C) Expansion of self-employment avenues in all regions. a
(D) Significant rise in job opportunities within the formal sector.
Ans. (B) Increase in the proportion of casually employed individuals. 1
24. Match the terms given in Column-I with their respective meaning in Column-II.
Select the correct option :
Column-I Column-II
(i) Seasonal (a) Private enterprises hiring less than 10 employees
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Unemployment
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(ii)
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Self-employed
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(iii)
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Unorganised (c) Unemployment occurring in specific season
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sector
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Disguised (d) Zero Marginal Productivity

Options:
(A) (i)-(d); (ii)-(a); (iii)-(b); (iv)-(c)
(B) (i)-(b); (ii)-(a); (iii)-(c); (iv)-(d)
(C) (i)-(c); (ii)-(b); (iii)-(a); (iv)-(d)
(D) (i)-(c); (ii)-(d); (iii)-(a); (iv)-(b)

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Ans. (C) (i)-(c); (ii)-(b); (iii)-(a); (iv)-(d) 1
25. “Sustainable development refers to the development that meets the need of the present
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generation without compromising the ability of the future generations, to meet their
own needs.”
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The above mentioned definition has been given by __________.
(Choose the correct option to fill in the blank)
(A) United Nations Conference on Environment and Development
(B) United Nations Committee on Environment and Development
(C) United Nations Committee on Protection of Environment
(D) United Nations Conference on Protection of Environment
Ans. (A) United Nations Conference on Environment and Development 1
26. Read the following statements: Assertion (A) and Reason (R), Choose the correct
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option from those given below:
mAssertion (A): The Government of India adopted the measure of regulation of markets

m .co to improve marketing conditions for agricultural products.
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and protection for farmers against exploitation in agricultural marketing.

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(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.
Ans. (A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the 1

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correct explanation of Assertion (A).
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27. Arrange the following events in China’s economic development history in correct
chronological sequence and select the correct option:
I. Great Proletarian Cultural Revolution.
II. Great leap forward
III. Introduction of Economic Reforms
IV. Launch of the First Five Year Plan
Options:
(A) II, IV, III, I (B) IV, II, I, III
(C) II, IV, I, III (D) IV, I, II, III
Ans. (B) IV, II, I, III 1
28. “Employment in the formal sector guarantees better income and social benefits
(A) compared to informal sector job.”
Defend or refute the above statement with valid reason and example.
Ans. The given statement is defended. Formal sector workers are entitled to fair 1
wages and other social security measures such as pension, provident fund, etc.
Whereas, workers in the informal sector do not get regular income and social 1
security benefits. They can be dismissed without any compensation.
For example: A government employee receives regular salary along with pension 1
and social security, whereas a daily wage worker works without any social
security. (Any other valid example to be awarded marks)
OR 3
(B) During the ‘Mann ki Baat’ program aired on 29th June, 2025, Prime Minister shared
that World Health Organisation (WHO) has declared India as a Trachoma free (an eye
disease). This achievement, he shared, is a result of sustained efforts in health care,
sanitation, awareness and medical access.
In the light of the above statement, explain how investments in health care contributes
to a nation’s development. Support your answer with valid arguments.
Ans. Investment in healthcare contributes to a nation’s development by ensuring
the availability of a healthy workforce. The productivity of a healthy person is
relatively higher than that of an unhealthy person. Healthy people may provide 3
an uninterrupted labour supply for a long period. Thus, better healthcare
enhances labour productivity, promotes human capital formation and ultimately
supports the economic development of a country. (To be marked as a whole)
29. “In the late 1970’s China’s population growth rate has sharply declined as compared
to India.”
Elucidate the reasons and impacts of this situation.
Ans. In the late 1970s, China experienced a sharp decline in its population growth 1½
rate compared to India due to the implementation of one-child policy introduced
by the government.
This policy led to an ageing population, with a higher proportion of elderly people 1½
as compared to the young population.
3
30. State and explain any two changes which were observed in India’s occupational
(A) structure during the British Rule.
Ans. During the British rule the occupational structure of India showed regional
variation as:
• Shift towards Industrial and Service sector: Parts of Madras Presidency,
Bombay and Bengal witnessed a decline in the dependence of the ½+1½

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m .co workforce on the agricultural sector with a commensurate increase in the
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manufacturing and the services sectors.
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• Rising Dependence on Agriculture sector: There had been an increase in
the share of workforce in agriculture in states such as Orissa, Rajasthan
½+1½

and Punjab.
OR 4
(B) “The British sought to achieve their vested interest through their policies of
infrastructural development in India.”
Do you agree with the given statement? Justify your answer with valid explanation.
Ans. Yes. The British developed the basic infrastructure to subserve their own
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interest. Roads and railways were built primarily to mobilise the army within
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India, drawing out raw materials from the countryside to the nearest railway 4
station/port for exporting to England/other foreign destinations. Moreover,
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various communication tools like electric telegraph were introduced to maintain
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law and order.s (To be marked as a whole)
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31. “At the time of independence, both India and Pakistan inherited similar colonial
economic structures. Both the nations adopted many similar economic planning
strategies.”
Explain any two such similarities in the developmental path of India and Pakistan.
Ans. Two similar developmental strategies adopted by India and Pakistan:
• Both the nations followed the path of mixed economic system involving 2
the public as well as the private sector.
• Both India and Pakistan adopted import substitution policy in order to
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protect their domestic industries from foreign competition.

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(Any other valid strategy to be awarded marks) 4
32. (A) State the meaning of ‘Disguised Unemployment’.
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Ans. Disguised unemployment refers to a situation when the person seems to be 1
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employed but is not contributing to the output i.e., his marginal productivity is
zero.
(B)

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In the light of the given chart, analyse the gender-wise sectoral distribution of
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workers.
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Ans. The given chart highlights the following points regarding the gender-wise

la sectoral distribution of workers:
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trade, transport etc.
• Female participation is relatively low in construction and transport 1
indicating gender inequality.
• Education and health sectors show a relatively balanced distribution, with 1
female participation being significantly higher compared to other sectors.
(Any other valid point to be awarded marks)

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Note : The following question is for the Visually Impaired Candidates only in
lieu of Q.No. 32 (B).
Elaborate any two reasons behind more women employed in economic activities in
Rural areas as compared to Urbans areas.
Ans. Reasons behind more women employed in economic activities in rural areas
as compared to urban areas are:
• Women in rural areas are more actively engaged in the economic 1½
activities as compared to their urban counterparts as women are
compelled to work due to their economic condition.
• Moreover, in urban areas, where men earn higher income, families often 1½
discourage female members from seeking employment.
4
33. (i) Mr. Ravi, an IT entrepreneur from Bengaluru, observed that several MNC’s prefer
(A) India as their outsourcing Hub for services like software development, customer
support, data management etc.
His friend Priya believes this is due to certain inherent advantages of the Indian
economy.
In your opinion, state and explain any two factors that make India a preferred
outsourcing destination.
Ans. India has emerged as a preferred outsourcing destination because of:
• Expansion of Information Technology and Communication: Growth of ½+1
fast modes of communication, particularly the growth of Information
Technology (IT).
• Availability of skilled manpower: Efficient and skilled manpower is ½+1
available at a relatively affordable cost.
(ii) “In the post-independence era, India adopted a protective tariff policy.”
Do you agree with the given statement? Justify your answer with any two valid
arguments.
Ans. Yes. In the post-independence era, India adopted a protective tariff policy
to:
• promote domestic production by substituting imports with locally produced 1½
goods.
• safeguard emerging industries from intense foreign competition, allowing 1½
them to grow and develop sustainably.
(Any other valid argument to be awarded marks)
OR 6
(B) (i) ‘Strategic sale of a public sector undertaking and minority sale of their shares are
methods of disinvestment.’
Defend or refute the given statement with valid argument.
Ans. The given statement is defended. Both strategic and minority sale are the
methods of disinvestment used by the government to reduce its ownership and
encourage private participation. It leads to improved efficiency and better 3
performance of public sector enterprises. Strategic sale involves transferring a
significant share of government ownership along with management control to a
private entity. Although minority sale refers to selling a limited portion of shares
while the government retains control.
(Any other valid explanation to be awarded marks)

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(ii) Discuss briefly, how bilateral trade agreements are different from multilateral
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trade agreements?
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Goods and services between two countries. a
Ans. Bilateral Trade Agreement refers to the agreements relating to exchange of 1½

Whereas;
Multilateral Trade Agreement refers to the trade agreements made by a country 1½
with more than two nations to exchange goods and services.
6
34. Read the following text carefully:
To ensure inclusive and quality education for all, the Indian government has launched
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several important schemes. These schemes aimed at improving access, equity and
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learning outcomes, especially among disadvantaged group.
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The Right to Education (RTE) Act, passed by the India Parliament on August 4, 2009,
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guarantees free and compulsory education to every child between 6-14 years of age. It
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ensures that all children have access to education in neighbourhood schools, until they
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complete elementary education. Another key initiative is Sarva Siksha Abhiyan (SSA).
It was introduced in 2001. It is one of India’s flagship programmes for the
Universalisation of Elementary Education.
Digital India Campaign, launched on July 1, 2015, focuses on transforming India into
a digitally empowered society by improving mobile and internet connectivity,
particularly in rural and remote regions. This initiative supports digital learning &
access to educational resources. Through these initiatives, the government strives to
create an equitable, accessible & quality driven educational environment for all

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children, laying a strong foundation for national development.
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On the basis of the given text and common understanding, answer the following
questions:
ascompulsory education upto the age of 14
(i) Identify, which law guarantees free land
ag access to education.
years. Explain, how does it help in enhancing
Ans. The Right to Education (RTE) Act, 2009 guarantees free and compulsory 1
education up to the age of 14 years.
It enhances access to education by ensuring that every child between 6 to 14 years
can attend school without any financial burden. It also provides schooling 2
facilities in neighbourhood areas, making education easily accessible. This helps
include children from disadvantaged groups and ensures that all children

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complete elementary education.

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.
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to India’s social and economic transformation?
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limportant role
l as Support your answer with valid arguments.
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Ans. Increase in government spending on education has played an
in India’s social and economic development. It has made education more
accessible, especially for weaker sections, thus, promoting equality. Education 3
has improved skills and knowledge, leading to better job opportunities and higher
productivity. It has helped in improving the standard of living of the people and
overall development of the country. (To be marked as a whole)
(Any other valid explanation to be awarded marks)
6
***
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