MARKING SCHEME

Senior Secondary School Examination 2024

ECONOMICS (Subject Code–030)
[Paper Code : 58/4/1]
Maximum Marks: 80
Q. Marks
EXPECTED ANSWER / VALUE POINTS
No.
SECTION -A
(Macro Economics)
1. Read the following statements - Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Ceteris Paribus, Devaluation of domestic currency leads to an increase in
National Income of a nation.
Reason (R): Devaluation of domestic currency refers to reduction in the value of
domestic currency with respect to foreign currency, under the fixed exchange rate system.
Alternatives :
(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.
Ans. (B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct 1
explanation of Assertion (A).
2. The Central Bank can reduce the Money Supply in the economy by ___________ the
______________. (Fill up the blanks with correct alternative.)
(A) increasing, bank rate (B) decreasing, cash reserve ratio
(C) decreasing, bank rate (D) buying, government securities
Ans. (A) increasing, bank rate 1
3. Identify, which of the following is not a source of demand for foreign exchange for Indian
economy? (Choose the correct alternative.)
(A) Import of goods and services
(B) Remittances by foreigners living in India to their families abroad
(C) Indian tourists visiting foreign countries
(D) Loans from Rest of the World (ROW)
Ans. (D) Loans from Rest of the World (ROW) 1
4. If a straight line consumption function makes a positive intercept at the Y-axis, it implies that
the Marginal Propensity to Consume ________ and Average Propensity to Consume
___________as the level of income rises. (Fill up the blanks with correct alternative.)
(A) remains constant, rises (B) falls, falls
(C) rises, rises (D) remains constant, falls
Ans. (D) remains constant, falls 1
5. Under the ______________Exchange Rate System, the Central Bank can control the rise / fall
of foreign exchange rate in a range bound manners. (Fill up the blank with correct alternative.)
(A) fixed (B) flexible
(C) managed floating (D) gold standard
Ans. (C) managed floating 1

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6. Identify the incorrect feature(s) of the Money Supply in an economy, from the following:
(i) It is measured during a period of time.
(ii) It includes stock of money held by the government of a nation.
(iii) It always represents the currency held with Central Bank of the Nation.
Alternatives :
(A) (i) only (B) (ii) and (iii)
(C) (i) and (ii) (D) (i), (ii) and (iii)
Ans. (D) (i), (ii) and (iii) 1
7. Read the following statements - Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): Real Gross Domestic Product is a better indicator of economic growth of a
nation as compared to Nominal Gross Domestic Product.
Reason (R): Real Gross Domestic Product measures the value of goods and services at
current year prices.
Alternatives:
(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.
Ans. (C) Assertion (A) is true, but Reason (R) is false. 1
8. From the given table, identify that level of income, where Average Propensity to Save (APS)
becomes Zero. (Choose the correct alternative.)
Income
0 50 100 200 300 400
(₹ crore)
Consumption
50 75 100 150 200 250
(₹ crore)
Alternatives:
(A) 50 (B) 100
(C) 200 (D) 0
Ans. (B) 100 1
9. Read the following statements carefully
Statement 1: Consumption and Savings are the components of National output of an economy.
Statement 2: Higher level of Income often leads to lower savings.
In the light of the given statements, choose the correct alternative from the following :
(A) Statement 1 is true and Statement 2 is false.
(B) Statement 1 is false and Statement 2 is true.
(C) Both Statements 1 and 2 are true.
(D) Both Statements 1 and 2 are false.
Ans. (A) Statement 1 is true and Statement 2 is false. 1
10. Arrange the following in the correct sequential order, if the government of a nation is trying to
curtail the situation of inflationary gap:
(i) Decrease in disposable income
(ii) Increase in taxes
(iii) Decrease in Aggregate Demand
Alternatives
(A) (i), (ii), (iii) (B) (iii), (ii), (i)
(C) (ii), (iii), (i) (D) (ii), (i), (iii)
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 Ans. (D) (ii), (i), (iii) 1
11. Estimate the value of Net National Product at Factor Cost (NNPFc), using the following
(a) information:
S. No. Items Amount
(in ₹ crores)
(i) Household Consumption Expenditure 1,200
(ii) Business Fixed Investment Expenditure 800
(iii) Government Final Consumption 500
Expenditure
(iv) Excess of Imports over Exports 100
(v) Net Indirect Taxes 150
(vi) Change in Inventory (-) 50
(vii) Consumption of fixed capital 200
(viii) Net factor Income from Abroad 80
(ix) Public fixed investment 70
Ans.
Net National Product at Factor Cost (NNPFC) =(i)+(iii)+(ii)+(ix)+(vi)–(iv)–(vii)–(v)+ (viii) 1½
=1,200+500+800+70+(–50)–100–200-150+80 1
= ₹ 2,150 crore ½
OR 3
(b) “Disposition Phase of circular flow of Income involves flow of factor Income, which
comprises of rent, wages, interest and profits from firms to households.”
Defend or refute the statement, giving valid reasons in support of your answer.
Ans. The given statement is refuted. Disposition phase of circular flow of income
indicates the flow of spending by the households on purchase of goods and services
3
produced by firms.
Whereas, the aforesaid statement depicts the distribution phase which involves the flow
of factor incomes, which comprises of rent, wages, interest and profits from firms to
households.
(To be marked as a whole)
12. State the meaning of autonomous and accommodating items, under Balance of Payments of
India, with the help of an example.
Ans. Autonomous transactions are those international economic transactions which are 1 + ½
independent of the state of Balance of Payments (BOP). These transactions generally take
place with some economic motive. For example, exports of goods.

Accommodating transactions are those international economic transactions which are

1+½
undertaken (by competent authorities) to cover the surplus/deficit in Balance of Payments
(BOP). These transactions are independent of economic motive.
For example, loan taken from the World Bank to cover the deficit in the BOP Account.
(Any other valid example to be awarded marks)
3
13. Suppose, the Indian Government decides to boost public investments with a defence project of
₹ 40,000 crore.

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 Explain the likely impacts of the given situation on the Income, Employment and Output of the
economy, assuming all other factors constant.
Ans. Assuming all other factors constant, any increase in investments generally leads to
multiple increase in final income which in turn leads to increase in employment. 4
If the Indian government decides to infuse additional investment of ₹ 40,000 crore in the
defence project, it would lead to increase in demand for goods and services leading to rise
in output and employment, and consequent increase in income.
(To be marked as a whole)
14. Elaborate the ‘Banker's Bank and Supervisor’ function of the Reserve Bank of India.
Ans. Reserve Bank of India (RBI) accepts the deposits from commercial banks and also
advances loans to them as and when required. It maintains reserves of all commercial
banks and utilizes it to settle inter-bank claims.
Being the supreme authority of the banking system, it acts as the financier of last recourse
to the commercial banks. It forwards short-term credit to the commercial banks against 4
approved securities.
The RBI supervises, regulates and controls the commercial banks. The regulation of
banks may be related to their licensing, branch expansion, liquidity of assets,
management, amalgamation and liquidation. (To be marked as a whole)
15. Suppose an economy is in equilibrium. From the following data, calculate Investment
(a) Expenditure in the economy:
(i) National Income = ₹ 40,000 crore
(ii) Marginal Propensity to Consume (MPC) = 0.8
(iii) Autonomous Consumption (c̅) = ₹ 100 crore
Ans. Given, Y = ₹ 40,000 crore
Marginal Propensity to Consume (MPC) = 0·8
Autonomous Consumption = ₹ 100 crore
At equilibrium level of income, Y= C + I 1
Y = 𝐜̅ + (MPC)Y + I 1
40,000 = 100 + (0.8) x 40,000 + I 1½
Investment Expenditure (I) = 7,900 crore ½
OR 4
(b) “With the objective to correct deflation, Reserve Bank of India may decrease the Bank rate.”
Discuss the rationale behind the step taken by the Reserve Bank of India (RBI).
Ans. To correct the situation of deflation, the Reserve Bank of India (RBI) may decrease
the bank rate, which may lead to a reduction in the lending rates by the commercial
banks. This may make borrowing cheaper for the general public. Thereby, encouraging
them to borrow more. As a result, Aggregate Demand in the economy may increase, 4
consequently correcting the situation of deflation in the economy.
(To be marked as a whole)
16. With valid reasons, classify the following into Capital receipts or Revenue receipts of the
(a) government:
(i) Dividend received by the government from a Maharatan company.
(ii) Receipts of the government from sale of shares of a Public Sector Undertaking (PSU) in
open market.
(iii) Debt cleared by Sri Lanka Government to the Indian Government.
Ans.
(i) It is a revenue receipt as it neither creates any liability nor reduces any asset of the 2
government.
(ii) It is a capital receipt as it reduces the assets of the government. 2
(iii) It is a capital receipt as it reduces the assets of the government. 2
6
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 OR
(b) ‘Government Budget can be a useful instrument in reducing inequalities in the distribution of
(i) income and wealth in an economy.’
Do you agree with the given statement? Present valid arguments in favour of your answer.
Ans. Yes. The government budget objective of ‘Redistribution of Income’ aims to bring
about equality in the distribution of income. Government can reduce inequalities of
income through taxes and public expenditure. It may impose high taxes on the rich to 4
reduce their disposable income. Furthermore, government may incur more public
expenditure for the welfare of the poor, like providing free services etc. By adopting these
measures, the government tries to bridge the gap between the rich and the poor.
(To be marked as a whole)
(ii) State the meaning and formula of Fiscal deficit.
Ans. Fiscal deficit refers to excess of the government’s total expenditure over its total 1
receipts excluding borrowing for a fiscal year.
Fiscal Deficit = Total Expenditure – Total receipts excluding borrowings
1
(Any other valid formula to be awarded marks)
6
17. “In the past few decades, Indian economy has been fairly benefitted by positive externalities
(a) created by rapid rise in infrastructure.”
Justify the given statement with valid arguments.
Ans. In the past few decades, Indian economy has experienced a rapid rise in
infrastructure. Infrastructural development is a core element in promoting economic 3
growth and attracting foreign investment for sustainable production and productivity.
The benefits of infrastructural development may be enjoyed by the people without paying
for the same. Hence, such infrastructural development adds to the welfare in an economy
and creates positive externalities. (To be marked as a whole)

(b) State the steps pertaining to the estimation of National Income by Value Added Method.
Ans. Steps pertaining to the estimation of National Income under the Value Added
method:
• Identify and classify production units into distinct heads namely into primary, 1
secondary, and tertiary sector.
• Estimate and add Gross Value Added of each sector to arrive at Gross Domestic 1
Product at Market Price.
• Finally, estimate and deduct the value of Depreciation, Net Indirect Taxes and add
Net Factor Income from Abroad to arrive at National Income (NNPFC). 1
6
SECTION – B
(Indian Economic Development)
18. Read the following statements — Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A): License Permit Raj was a major obstacle for growth of private sector.
Reason (R): Private sector wasted huge amount in obtaining licences, rather than on improving
the product, quality and international competitiveness.
Alternatives:
(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.

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 Ans. (A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct 1
explanation of Assertion (A).
19. Identify, which of the following alternative indicates towards incorrect components
combination of Agricultural Marketing System?
(A) Assembling, Storage, Processing, Packaging
(B) Production, Assembling, Processing, Grading
(C) Assembling, Processing, Packaging, Transportation
(C) (D) Processing, Packaging, Grading, Distribution
Ans. (B) Production, Assembling, Processing, Grading 1
20. Read the following statements carefully:
Statement 1: China has used the market mechanism to create additional social and economic
opportunities for its citizens.
Statement 2: In China, Social Infrastructure created by the government brought positive
results in human development indicators.
In the light of the given statements, choose the correct alternative from the following:
(A) Statement 1 is true and Statement 2 is false.
(B) Statement 1 is false and Statement 2 is true.
(C) Both Statement 1 and 2 are true.
(D) Both Statement 1 and 2 are false.
Ans. (C) Both Statement 1 and 2 are true. 1
21. Read the following statements carefully
Statement 1: As per National Sample Survey Organisation (NSSO) unemployment is a
situation in which all those who, owing to lack of work, are not working, but seeking work
from prospective employers, expressed their willingness to work under the prevailing
condition of work and remuneration.
Statement 2: Disguised unemployment is generally a massive problem in the highly populated
country like India.
In the light of the given statements, choose the correct alternative from the following:
(A) Statement 1 is true and Statement 2 is false.
(B) Statement 1 is false and Statement 2 is true.
(C) Both Statement 1 and 2 are true.
(D) Both Statement 1 and 2 are false.
Ans. (C) Both Statement 1 and 2 are true. 1
22. Under the British Rule, commercialization of agriculture resulted in shifting of agricultural
production from___________ crops to _______________crops.
(Fill up the blanks with correct alternative.)
(A) Cash, Food (B) Cotton, Jute
(C) Food, Cash (D) Jute, Food
Ans. (C) Food, Cash 1
23. Economic reforms were introduced in the year___________ in India and in the year
_______________in Pakistan. (Fill up the blanks with correct alternative.)
(A) 1978, 1988 (B) 1988, 1978
(C) 1978, 1991 (D) 1991, 1988
Ans. (D) 1991, 1988 1
24. ____________ farming is the system that restores, maintains and enhances the ecological
balance. (Fill up the blank with correct alternative.)
(A) Conventional (B) Chemical
(C) Organic (D) Multi-layered
Ans. (C) Organic 1

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25. Read the following statements — Assertion (A) and Reason (R). Choose one of the correct
alternatives given below:
Assertion (A) : The developmental experiences of India and Pakistan have a lot of similarities.
Reason (R) : Both India and Pakistan laid emphasis on creating a large private sector.
Alternatives :
(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.
Ans. (C) Assertion (A) is true, but Reason (R) is false. 1
26. Identify, which of the following is not a correct function of environment?
(i) Exclusion of waste
(ii) Sustainance of life
(iii) Provide aesthetic services
Alternatives:
(A) (i) only (B) (ii) only
(C) (ii) & (iii) (D) (i) & (ii)
Ans. (A) (i) only 1
27. In the decade of 1970's, Pakistan nationalised its __________industry.
(Fill up the blank with correct alternative.)
(A) Medical infrastructure (B) Consumer goods
(C) Capital goods (D) Foreign trade
Ans. (C) Capital goods 1
28. “Farm subsidies put a huge burden on the government finances, but are necessary for the poor
(a) and marginal farmers.”
Justify the given statement.
Ans. In India, most farmers (small and marginal) may not be able to afford expensive
agricultural inputs without subsidies. Eliminating subsidies may increase inequalities of 3
income between rich and poor farmers. Hence, to encourage poor and small farmers to
adopt the latest technology it becomes imperative to provide subsidies despite subsidies
being a huge burden on government finances. (To be marked as a whole)
OR
(b) Discuss briefly the role of small-scale industries in the growth Journey of India.
Ans. Small scale industries (SSIs) have played a significant role in the growth journey of
India. Small-scale industries require less capital and are highly labour intensive. Thus, 3
in a labour abundant economy like India SSIs have generated employment opportunities
in both rural and urban areas.
Moreover, SSIs have the potential to utilize limited funds more judiciously to generate
revenue for their investors. Hence, SSIs have contributed immensely to the GDP of the
indiam economy. (To be marked as a whole)
29. Goals of Equity was fully served by ‘abolition of the intermediaries’ in agriculture in the post-
independence period of India.
Do you agree with the given statement? Support your answer with valid arguments.
Ans. No. The goal of equity was not fully served by abolition of intermediaries, as in some
areas the erstwhile zamindars continued to own large areas of land by making use of the 3
loopholes in the legislation. There were cases where tenants were evicted and the
landowners claimed to be self-cultivators. Even when the tillers got ownership of land, the
poorest of the agricultural labourers did not benefit from land reforms.
(To be marked as a whole)
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30. “National Education Policy 2020 of India stresses a lot on in-service teachers' training.”
(a) In the light of the given statement, state and explain any two advantages of such on-the-job
(i) trainings in upliftment of education sector of any nation.
Ans. On-the-job training of teachers is important for the upliftment of the education
sector of any nation:
• As an important source of human capital formation, such trainings help to bridge the 1½
gap between theoretical concepts and practical experiences. This enables teachers to
adapt to latest technologies.
• It enhances the professional skills of teachers by updating them about changing 1½
teaching pedagogies.

(ii) Define Casual Wage Labourer.

Ans. A casual wage labourer is a person who is casually engaged in others’ farm or non- 1
farm enterprises and, in return, receives wages according to the terms of the daily or
periodic work contract.
OR 4
(b) Elaborate any two reasons owing to which lesser number of women are found in regular
(i) salaried employment.
Ans. Lesser women are found in regular salaried employment in India as –
• These jobs require a higher level of skills. Many women in India do not possess the 1½
required educational qualifications and professional skills.
• Social constraints like family responsibilities add to the lack of mobility among 1½
women creating a hindrance to seek employment on a regular basis.
(ii) Define worker-population ratio.
Ans. Worker Population Ratio is defined as the total number of workers in a country 1
divided by population. It is represented in percentage.
4
31. “Scholars find son preference as a common phenomenon in India, Pakistan and China.”
(a) Justify the given statement in the light of skewed sex-ratio.
Ans. Owing to traditional and socio-economic reasons, ‘son preference’ is common in
India, Pakistan and China. Due to this, the sex ratio is skewed i.e. low and biased against 2
females in all the three nations.

(b) State any two liberty indicators.

Ans. Two liberty indicators are -
• The extent of Constitutional protection given to rights of citizens 1
1
• The extent of constitutional protection of the Independence of the Judiciary and
the Rule of Law
4
32. Elaborate how the economic reforms process of India impacted the following:
(a) (a) Agriculture sector
(b) (b) Industrial sector
Ans. (a) The agricultural sector was adversely affected by the reform process due to
reduction in the public investment in agriculture sector especially in infrastructure. 2
Furthermore, the partial removal of fertiliser subsidy had led to increase in the cost of
production, which had severely affected the small and marginal farmers.
(b) Industrial sector performed poorly in the reform period as the demand for domestic
industrial products decreased due to reasons like cheaper imports, etc. Moreover, the
2
infrastructure facilities including power supply, remained inadequate due to lack of
public investment. (Any other valid explanation to be awarded marks)
4
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33. “We are One-Earth, One Family and we share One Future.” is the opening sentence of the G-
20 New Delhi Leader's Declaration Statement.
In this statement the leaders pledged to "resolve to fully and effectively implement the 2030
Agenda and the Sustainable Developmental Goals (SDG's)". The leader's commitments
contained in the Declaration statement reflect, "the philosophy of living in harmony with our
surrounding ecosystem".
The Declaration recognises the "Cascading challenges and crisis that have reversed gains" on
the 2030 Agenda of SDG's.
The leaders "affirm that no country should have to choose between fighting poverty and
fighting for our planet".
The leaders resolved to act
• accelerate strong, sustainable, balanced and inclusive growth;
• accelerate the full & effective implementation of 2030 Agenda
• pursue low-carbon and environmentally sustainable development pathways;
• Pursue reforms for better, comprehensive and more effective finance avenues.
The leaders commit to "taking collective actions for effective and timely implementation of
the G-20 2023 Action Plan to accelerate progress on the SDG's; including through actions on
eliminating hunger and malnutrition, strengthening global health and implementation of One
Health approach, and delivering quality education.”

(a)
(a) State and discuss the importance of collective fight in achieving SDG's.
Ans. Collective fight in achieving SDGs will be instrumental in the effective and timely
implementation of the G-20 2023 Action Plan by eliminating hunger and malnutrition, 3
strengthening global health, ensuring the implementation of One Health approach and
delivering quality education. (To be marked as a whole)

(b) Discuss briefly the action plan of G-20 leaders in promoting 'One Health' approach.
Ans. The action plan of G-20 leaders in promoting ‘One Health’ approach is to accelerate
strong, sustainable, balanced & inclusive growth and full & effective implementation of
2030 Agenda. It also aims to pursue low-carbon & environmentally sustainable 3
development pathways and reforms for better, comprehensive & more effective finance
avenues. (To be marked as a whole)
6
34. Discuss any two measures initiated by the government to improve Agricultural marketing in
(a) India.
(i) Ans. Two measures initiated by the government to improve Agricultural marketing in
India are –
• For the welfare of farmers as well as consumers, various market regulations were 1½
initiated to create orderly and transparent marketing conditions.
• The government took measures to enhance infrastructural amenities such as roads, 1½
railways, warehouses, cold storage facilities, and processing units to meet the
growing demand. (Any other valid measure to be awarded marks)

(ii) Elaborate the importance of credit in rural development.

Ans. Growth of rural economy depends primarily on infusion of capital, from time to
time, to realise higher productivity in agriculture and non-agriculture sectors. As the
gestation period (duration between crop sowing and realisation of income after 3
production) is quite long, hence rural credit is required to meet their initial investment
needs of seeds, fertilisers, implements, etc. Rural credit is also required for other expenses
like improving soil quality, machinery, irrigation facilities, etc.
(To be marked as a whole)
OR 6

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(b) ‘India can transform itself knowledge-based economy by using information technology.’
(i) Justify the given statement.
Ans. India can transform itself into a knowledge-based economy by using information
technology (IT). IT acts as a tool for releasing the creative potential and knowledge
embedded in the society. The use of emails even by the villagers, e-governance are some 3
indicators of such transformations. Hence, with the successful use of IT, India can move
its economy to a higher growth trajectory based on knowledge landscape.
(To be marked as a whole)

(ii) “It is necessary to generate employment in the formal sector rather than the informal sector.”
Justify the given statement with valid arguments.
Ans. In the formal sector, workers can form trade unions and are entitled to fair wages
and other social security measures. Whereas, workers in the informal sector do not get 3
regular income. Also, they do not have any protection or regulation from the government.
Many a time, workers may be dismissed without any compensation.
Hence, formal sector employees are generally in a better position as compared to
informal sector employees. Therefore, it is essential to generate employment in the formal
sector rather than the informal sector. (To be marked as a whole)
6
***

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