Punjab Pseb Class 12 Economics — Real Previous-Year Papers

Select the correct option by matching Column-I with Column-II. Column-I: (a) Direct Tax (b) Indirect Tax (c) Revenue Receipts (d) Capital Expenditure Column-II: (i) Goods and Services Tax (ii) Income Tax (iii) Construction of School (iv) Tax Receipts (a) (A) a-(iv), b-(ii), c-(iii), d-(i) (b) (B) a-(ii), b-(i), c-(iv), d-(iii) (c) (C) a-(iv), b-(iii), c-(ii), d-(i) (d) (D) a-(i), b-(ii), c-(iv), d-(iii)

Which factors determine the flexible exchange rate ? (a) The demand for foreign exchange (b) The supply of foreign exchange (c) Both (A) and (B) (d) None of these

Balance of payment always _____ in accounting sense. (balances / unbalances) (a) balances (b) unbalances

Who gave the scarcity definition of Economics ? (a) Adam Smith (b) Dr. Marshall (c) J.S. Mill (d) Robbins

The equation Px*Qx + Py*Qy = M represents _____. (a) Indifference curve (b) Budget line (c) Price line (d) Budget line / Price line

The law of demand does not apply to _____. (Normal goods / Inferior goods) (a) Normal goods (b) Inferior goods

With an increase in production, total variable cost will _____. (a) Increase (b) Decrease (c) Constant (d) Zero

If the elasticity of supply is unity, what percentage increase in the supply of a good will occur if the price of the good increases by 10 percent ? (a) 8% (b) 12% (c) 15% (d) 10%

_____ price is more than the equilibrium price of the good in market. (Ceiling / Minimum Support) (a) Ceiling (b) Minimum Support

Methodology of study in Macroeconomics is _____. (a) demand and supply equilibrium analysis (b) partial equilibrium analysis (c) general equilibrium analysis (d) price equilibrium analysis

National income is the sum total of the factor incomes received by _____ of a nation. (a) citizens (b) normal residents (c) non-residents (d) residents and non-residents

A cheque issued by one merchant to another merchant in the current account is a _____. (Near money / Fiat money) (a) Near money (b) Fiat money

During liquidity trap the demand for money is perfectly elastic. (True / False) (a) True (b) False

If the Marginal Propensity to Consume (MPC) = 0.6, what will be the value of the Marginal Propensity to Save (MPS) ? (a) 0.6 (b) 0.4 (c) -0.6 (d) -0.4

Mention the purposes for which money is demanded ?

What is meant by full employment ?

Define government budget.

Balance of trade shows a deficit of Rs. 10,000 crore. The value of the imports is Rs. 25,500 crore. What will be the value of the exports ?

Define Micro Economics.

What are monotonic preferences ?

Calculate the marginal product from the following information of a firm. Labour: 10, 20, 30, 40, 50 Total Product: 100, 220, 300, 400, 500

Write any two factors affecting supply.

What do you mean by invisible hands ?

Distinguish between stock and flow.

Determine Private Income according to the following data : Items — Amount (Rs. In crore) 1. Income occuring to private sector from Domestic product — 254 2. Current net transfers from govt. administrative departments — 10 3. Current net transfers to the rest of the world — 4 4. Interest on the National Debt — 10 5. Net factor Income from abroad — -3

Distinguish between Central bank and Commercial bank.

Explain the Production Possibility Curve (PPC) with diagram. What are its two characteristics ?

Suppose the price of a commodity increases from 12 rupees per unit to 14 rupees per unit and its demand decreases from 24 units to 20 units. Determine the price elasticity of demand for the commodity.

What is meant by a fixed exchange rate ? What are its advantages and disadvantages ?

What is Balance of Payments (BoP) ? Describe its constituents.

What do you mean by the Law of Variable Proportion ? Describe its three stages.

Describe characteristics of perfectly competitive market.

Source / Case Study based question. Read the following paragraph and answer the question given below : In contrast to a centrally planned economy, in a market economy, all economic activities are organised through the market. A market, as studied in Economics, is an institution which organises the free interaction of individuals pursuing their respective economic activities. In other words, a market is a set of arrangements where economic agents can freely exchange their endowments or products with each other. It is important to note that the term 'market' as used in Economics is quite different from the common sense understanding of a market. In a market system, all goods or services come with a price (which is mutually agreed upon by the buyers and sellers) at which the exchanges take place. The price reflects, on an average, the society's valuation of the good or service. If the buyers demand more of a certain good, the price of that good will rise. This signals to the producers of that good that the society as a whole, wants more of that good than is currently being produced and the producers of the good, in their turn, are likely to increase their production. In this way, prices of goods and services send important information to all the individuals across the market and help achieve coordination in a market system. Thus, in a market system, the central problems regarding 'how much and what to produce' are solved through the coordination of economic activities brought about by the price signals. Q: What is meant by market ?

Source / Case Study based question. Read the following paragraph and answer the question given below : In contrast to a centrally planned economy, in a market economy, all economic activities are organised through the market. A market, as studied in Economics, is an institution which organises the free interaction of individuals pursuing their respective economic activities. In other words, a market is a set of arrangements where economic agents can freely exchange their endowments or products with each other. It is important to note that the term 'market' as used in Economics is quite different from the common sense understanding of a market. In a market system, all goods or services come with a price (which is mutually agreed upon by the buyers and sellers) at which the exchanges take place. The price reflects, on an average, the society's valuation of the good or service. If the buyers demand more of a certain good, the price of that good will rise. This signals to the producers of that good that the society as a whole, wants more of that good than is currently being produced and the producers of the good, in their turn, are likely to increase their production. In this way, prices of goods and services send important information to all the individuals across the market and help achieve coordination in a market system. Thus, in a market system, the central problems regarding 'how much and what to produce' are solved through the coordination of economic activities brought about by the price signals. Q: Who determines the equilibrium in the market ?

Source / Case Study based question. Read the following paragraph and answer the question given below : In contrast to a centrally planned economy, in a market economy, all economic activities are organised through the market. A market, as studied in Economics, is an institution which organises the free interaction of individuals pursuing their respective economic activities. In other words, a market is a set of arrangements where economic agents can freely exchange their endowments or products with each other. It is important to note that the term 'market' as used in Economics is quite different from the common sense understanding of a market. In a market system, all goods or services come with a price (which is mutually agreed upon by the buyers and sellers) at which the exchanges take place. The price reflects, on an average, the society's valuation of the good or service. If the buyers demand more of a certain good, the price of that good will rise. This signals to the producers of that good that the society as a whole, wants more of that good than is currently being produced and the producers of the good, in their turn, are likely to increase their production. In this way, prices of goods and services send important information to all the individuals across the market and help achieve coordination in a market system. Thus, in a market system, the central problems regarding 'how much and what to produce' are solved through the coordination of economic activities brought about by the price signals. Q: What are the main central problems of the economy ?

Source / Case Study based question. Read the following paragraph and answer the question given below : In contrast to a centrally planned economy, in a market economy, all economic activities are organised through the market. A market, as studied in Economics, is an institution which organises the free interaction of individuals pursuing their respective economic activities. In other words, a market is a set of arrangements where economic agents can freely exchange their endowments or products with each other. It is important to note that the term 'market' as used in Economics is quite different from the common sense understanding of a market. In a market system, all goods or services come with a price (which is mutually agreed upon by the buyers and sellers) at which the exchanges take place. The price reflects, on an average, the society's valuation of the good or service. If the buyers demand more of a certain good, the price of that good will rise. This signals to the producers of that good that the society as a whole, wants more of that good than is currently being produced and the producers of the good, in their turn, are likely to increase their production. In this way, prices of goods and services send important information to all the individuals across the market and help achieve coordination in a market system. Thus, in a market system, the central problems regarding 'how much and what to produce' are solved through the coordination of economic activities brought about by the price signals. Q: Who determines all economic activities in a centrally planned economy ?

Source / Case Study based question. Read the following paragraph and answer the question given below : In contrast to a centrally planned economy, in a market economy, all economic activities are organised through the market. A market, as studied in Economics, is an institution which organises the free interaction of individuals pursuing their respective economic activities. In other words, a market is a set of arrangements where economic agents can freely exchange their endowments or products with each other. It is important to note that the term 'market' as used in Economics is quite different from the common sense understanding of a market. In a market system, all goods or services come with a price (which is mutually agreed upon by the buyers and sellers) at which the exchanges take place. The price reflects, on an average, the society's valuation of the good or service. If the buyers demand more of a certain good, the price of that good will rise. This signals to the producers of that good that the society as a whole, wants more of that good than is currently being produced and the producers of the good, in their turn, are likely to increase their production. In this way, prices of goods and services send important information to all the individuals across the market and help achieve coordination in a market system. Thus, in a market system, the central problems regarding 'how much and what to produce' are solved through the coordination of economic activities brought about by the price signals. Q: When does the price increase ?

Source / Case Study based question. Read the following paragraph and answer the question given below : In contrast to a centrally planned economy, in a market economy, all economic activities are organised through the market. A market, as studied in Economics, is an institution which organises the free interaction of individuals pursuing their respective economic activities. In other words, a market is a set of arrangements where economic agents can freely exchange their endowments or products with each other. It is important to note that the term 'market' as used in Economics is quite different from the common sense understanding of a market. In a market system, all goods or services come with a price (which is mutually agreed upon by the buyers and sellers) at which the exchanges take place. The price reflects, on an average, the society's valuation of the good or service. If the buyers demand more of a certain good, the price of that good will rise. This signals to the producers of that good that the society as a whole, wants more of that good than is currently being produced and the producers of the good, in their turn, are likely to increase their production. In this way, prices of goods and services send important information to all the individuals across the market and help achieve coordination in a market system. Thus, in a market system, the central problems regarding 'how much and what to produce' are solved through the coordination of economic activities brought about by the price signals. Q: Which of the following system do you prefer out of the centrally planned economy and the market economy and why ?

Source / Case Study based question. Read the following paragraph and answer the question given below : When the Goods and Services Tax (GST) was first introduced in 2017, it was considered a major tax reform in India since independence. It integrated several indirect taxes like excise, service tax and VAT into a single unified tax system. But with the passage of time, this tax system also needed to be changed. GST 1.0 included 5 major tax rates - 0%, 5%, 12%, 18% and 28% as well as additional cess on items such as luxury goods, tobacco and expensive cars. Though it was aimed at increasing revenue in an affordable manner, the GST 1.0 rates were criticised for being complex and putting an additional burden on small enterprises. Traders found it difficult to classify goods accurately, which often led to corrections and confusion. But GST 2.0 offers a streamlined tax system. The government has significantly reduced the number of rates and product categories for clarity. There are now rates of 0%, 5%, 18% and 40% for commodities. By eliminating the 12% rate and imposing a special higher rate of 40% on luxury goods, GST 2.0 removes ambiguity. It makes a clear distinction between necessities, simple and luxury goods. Essential items like butter, utensils, sewing machines and toothpaste will be cheaper. Now there will be no tax on rubber, notebooks, pencils, maps and health services. The new rates are effective from September 22, 2025. The revenue shortfall on account of rate cut will be around Rs. 93,000 crore but the revenue gain on luxury goods at the rate of 40% will be around Rs. 45,000 crore. Q: What do you mean by GST 2.0 ?

Source / Case Study based question. Read the following paragraph and answer the question given below : When the Goods and Services Tax (GST) was first introduced in 2017, it was considered a major tax reform in India since independence. It integrated several indirect taxes like excise, service tax and VAT into a single unified tax system. But with the passage of time, this tax system also needed to be changed. GST 1.0 included 5 major tax rates - 0%, 5%, 12%, 18% and 28% as well as additional cess on items such as luxury goods, tobacco and expensive cars. Though it was aimed at increasing revenue in an affordable manner, the GST 1.0 rates were criticised for being complex and putting an additional burden on small enterprises. Traders found it difficult to classify goods accurately, which often led to corrections and confusion. But GST 2.0 offers a streamlined tax system. The government has significantly reduced the number of rates and product categories for clarity. There are now rates of 0%, 5%, 18% and 40% for commodities. By eliminating the 12% rate and imposing a special higher rate of 40% on luxury goods, GST 2.0 removes ambiguity. It makes a clear distinction between necessities, simple and luxury goods. Essential items like butter, utensils, sewing machines and toothpaste will be cheaper. Now there will be no tax on rubber, notebooks, pencils, maps and health services. The new rates are effective from September 22, 2025. The revenue shortfall on account of rate cut will be around Rs. 93,000 crore but the revenue gain on luxury goods at the rate of 40% will be around Rs. 45,000 crore. Q: Which three types of goods have you studied in Micro Economics ?

Source / Case Study based question. Read the following paragraph and answer the question given below : When the Goods and Services Tax (GST) was first introduced in 2017, it was considered a major tax reform in India since independence. It integrated several indirect taxes like excise, service tax and VAT into a single unified tax system. But with the passage of time, this tax system also needed to be changed. GST 1.0 included 5 major tax rates - 0%, 5%, 12%, 18% and 28% as well as additional cess on items such as luxury goods, tobacco and expensive cars. Though it was aimed at increasing revenue in an affordable manner, the GST 1.0 rates were criticised for being complex and putting an additional burden on small enterprises. Traders found it difficult to classify goods accurately, which often led to corrections and confusion. But GST 2.0 offers a streamlined tax system. The government has significantly reduced the number of rates and product categories for clarity. There are now rates of 0%, 5%, 18% and 40% for commodities. By eliminating the 12% rate and imposing a special higher rate of 40% on luxury goods, GST 2.0 removes ambiguity. It makes a clear distinction between necessities, simple and luxury goods. Essential items like butter, utensils, sewing machines and toothpaste will be cheaper. Now there will be no tax on rubber, notebooks, pencils, maps and health services. The new rates are effective from September 22, 2025. The revenue shortfall on account of rate cut will be around Rs. 93,000 crore but the revenue gain on luxury goods at the rate of 40% will be around Rs. 45,000 crore. Q: Why high tax rates are imposed on tobacco and luxury goods ?

Source / Case Study based question. Read the following paragraph and answer the question given below : When the Goods and Services Tax (GST) was first introduced in 2017, it was considered a major tax reform in India since independence. It integrated several indirect taxes like excise, service tax and VAT into a single unified tax system. But with the passage of time, this tax system also needed to be changed. GST 1.0 included 5 major tax rates - 0%, 5%, 12%, 18% and 28% as well as additional cess on items such as luxury goods, tobacco and expensive cars. Though it was aimed at increasing revenue in an affordable manner, the GST 1.0 rates were criticised for being complex and putting an additional burden on small enterprises. Traders found it difficult to classify goods accurately, which often led to corrections and confusion. But GST 2.0 offers a streamlined tax system. The government has significantly reduced the number of rates and product categories for clarity. There are now rates of 0%, 5%, 18% and 40% for commodities. By eliminating the 12% rate and imposing a special higher rate of 40% on luxury goods, GST 2.0 removes ambiguity. It makes a clear distinction between necessities, simple and luxury goods. Essential items like butter, utensils, sewing machines and toothpaste will be cheaper. Now there will be no tax on rubber, notebooks, pencils, maps and health services. The new rates are effective from September 22, 2025. The revenue shortfall on account of rate cut will be around Rs. 93,000 crore but the revenue gain on luxury goods at the rate of 40% will be around Rs. 45,000 crore. Q: What do you think of GST 2.0 ?

Source / Case Study based question. Read the following paragraph and answer the question given below : When the Goods and Services Tax (GST) was first introduced in 2017, it was considered a major tax reform in India since independence. It integrated several indirect taxes like excise, service tax and VAT into a single unified tax system. But with the passage of time, this tax system also needed to be changed. GST 1.0 included 5 major tax rates - 0%, 5%, 12%, 18% and 28% as well as additional cess on items such as luxury goods, tobacco and expensive cars. Though it was aimed at increasing revenue in an affordable manner, the GST 1.0 rates were criticised for being complex and putting an additional burden on small enterprises. Traders found it difficult to classify goods accurately, which often led to corrections and confusion. But GST 2.0 offers a streamlined tax system. The government has significantly reduced the number of rates and product categories for clarity. There are now rates of 0%, 5%, 18% and 40% for commodities. By eliminating the 12% rate and imposing a special higher rate of 40% on luxury goods, GST 2.0 removes ambiguity. It makes a clear distinction between necessities, simple and luxury goods. Essential items like butter, utensils, sewing machines and toothpaste will be cheaper. Now there will be no tax on rubber, notebooks, pencils, maps and health services. The new rates are effective from September 22, 2025. The revenue shortfall on account of rate cut will be around Rs. 93,000 crore but the revenue gain on luxury goods at the rate of 40% will be around Rs. 45,000 crore. Q: Give two examples of indirect taxes.

Source / Case Study based question. Read the following paragraph and answer the question given below : When the Goods and Services Tax (GST) was first introduced in 2017, it was considered a major tax reform in India since independence. It integrated several indirect taxes like excise, service tax and VAT into a single unified tax system. But with the passage of time, this tax system also needed to be changed. GST 1.0 included 5 major tax rates - 0%, 5%, 12%, 18% and 28% as well as additional cess on items such as luxury goods, tobacco and expensive cars. Though it was aimed at increasing revenue in an affordable manner, the GST 1.0 rates were criticised for being complex and putting an additional burden on small enterprises. Traders found it difficult to classify goods accurately, which often led to corrections and confusion. But GST 2.0 offers a streamlined tax system. The government has significantly reduced the number of rates and product categories for clarity. There are now rates of 0%, 5%, 18% and 40% for commodities. By eliminating the 12% rate and imposing a special higher rate of 40% on luxury goods, GST 2.0 removes ambiguity. It makes a clear distinction between necessities, simple and luxury goods. Essential items like butter, utensils, sewing machines and toothpaste will be cheaper. Now there will be no tax on rubber, notebooks, pencils, maps and health services. The new rates are effective from September 22, 2025. The revenue shortfall on account of rate cut will be around Rs. 93,000 crore but the revenue gain on luxury goods at the rate of 40% will be around Rs. 45,000 crore. Q: What are the advantages of the new tax system ?

What is meant by consumer equilibrium ? Explain the consumer equilibrium with the help of cardinal equilibrium analysis in case of consumption of a single commodity. (2+4)

Define equilibrium price. Explain with diagram how market equilibrium price is affected by simultaneous and equal increase in demand and supply. (2+4)

Calculate the following using the given data : (3+3) (a) Gross Domestic Product at Market Price (GDPMP) and (b) National Income (NNPFC). Items — (Crore Rs.) 1. Salary and Wages — 1000 2. The employer's contribution to Social Security — 100 3. Profit — 250 4. Interest — 380 5. Net Indirect Taxes — 30 6. Rent — 120 7. Royalty — 150 8. Net factor income from abroad — -50 9. Consumption of fixed capital — 50

What is money ? What are its primary and secondary functions ? (2+4)