AHSEC Class 12 Economics Important Question Bank 2022 and 2023 exam

AHSEC Class 12

Economics Important Question Bank

For 2022 and 2023 exam


Expected Pattern of Question Paper (Part A)

1 Marks x 6 Questions

2 Marks x 6 Questions

4 Marks x 5 Questions

6 Marks x 2 Questions

6 Marks

12 Marks

20 Marks

12 Marks

Total 50 Marks


Very Short Answer Questions: (Marks 1)

  1. What is macroeconomics? Distinguish between micro economics and macroeconomics. 2018
  2. Define final goods.
  3. Define Gross Investment of an economy.
  4. Define depreciation.
  5. Define Gross Domestic Product.
  6. What is gross value added?
  7. What is net value added?
  8. What is inventory?
  9. Who is the founder father of modern economics?
  10. What is National Income?
  11. What is GDP inflator?

Short Answer Questions II type: (Marks 3)

  1. Explain the concept of intermediate goods, final goods, consumption goods and capital goods. Also distinguish between them. 2014, 2018, 2020
  2. Distinguish between gross investment and net investment. 2015
  3. Distinguish between gross value added and net value added.
  4. What is national disposable income.
  5. What is net national product at factor cost.
  6. Distinguish between real GDP and nominal GDP.
  7. Distinguish between intermediate goods and final good.

Short Answer Questions I type: (Marks 4)

  1. Distinguish between consumer goods and capital goods.
  2. Distinguish between stocks and flows in regards to NI.
  3. Define and distinguish personal income from private income. 2016
  4. Define and distinguish between consumer price index and whole sale price index.
  5. Distinguish between gross national product and gross domestic product.

Long Answer Questions: (Marks 6)

  1. What are the four factors of production? Write down the name of the remuneration to each of them. 2017
  2. Explain the circular flow of income is simplified economy with two sectors – households and firms. 2012, 2014, 2016, 2018
  3. Explain the circular flow of income is simplified economy with three sectors – households, firms and government. 2019
  4. Explain the value added method of calculating GDP. 2014, 2020
  5. Explain the income method of calculating GDP. 2012, 2013, 2015, 2017
  6. Explain the expenditure method of calculating GDP. 2016, 2019
  7. Discuss the reasons why it will not be correct to say that the GDP is the index for measuring welfare of the people of a country. 2013, 2018, 2020


Very Short Answer Type Questions: (Marks 1/2)

  1. What is aggregate demand and aggregate supply? 2012, 2013, 2016
  2. What is average and marginal propensity to consume and save? 2016
  3. Given the marginal propensity to save to be 0.3, find out the income multiplier.
  4. What is output multiplier?
  5. What is autonomous consumption expenditure? 2018
  6. What is the literary meaning of ‘ceteris paribus’?
  7. What is paradox of thrift – explain.
  8. Why do we assume that the prices vary only in the long-run?

Long Answer Type Questions: (Marks 3 to 6)

  1. What is aggregate demand and aggregate supply? Mention the components of aggregate demand and aggregate supply. 2013, 2020
  2. Explain the relationship between investment multiplier and marginal propensity to consume. 2012, 2017
  3. What is marginal propensity to consume and marginal propensity to save? State the relation and difference between marginal propensity to consume from marginal propensity to save. 2014, 2016
  4. What is excess demand? Explain the fiscal measures to solve the problem of excess demand. 2018
  5. What is investment multiplier? Explain with the help of a diagram. 2014, 2019
  6. What is investment, gross investment and net investment? Distinguish between gross and net investment. 2014, 2015
  7. Distinguish between autonomous investment and induced investment. 2013, 2016
  8. What is ex-ante and ex-post? Explain the concept of ex ante aggregate demand and consumption. 2012
  9. What is ex-ante investment and ex-post investment? What are the determinants of investment demand? Also distinguish between them. 2013
  10. State the problem of double counting. Explain the need for avoiding double counting in the estimation of national income. 2015
  11. Explain the process of equilibrium income and employment determination of an economy with the use of aggregate demand and aggregate supply curves. 2020
  12. What is involuntary unemployment and full employment? 2016 

Chapter-3: MONEY AND BANKING (8 Marks)

Very Short Answer Type Questions: (Marks 1/2)

  1. What is barter system?
  2. What is cash reserve ratio and statutory liquid ratio?
  3. What is Money?
  4. Define high-powered money.
  5. What is liquid money?
  6. What is fiat money? Can coins be termed as fiat money?
  7. What is inflation?
  8. What is liquidity trap? – Explain.
  9. Define money multiplier.
  10. Define demand and time deposit. 2018
  11. What is currency deposit ratio? Why does it increase during the festive season?
  12. What is sterilization operation of RBI?
  13. What is borrowing rate of a commercial bank?
  14. Why is reserve keeping with the RBI is costly for commercial bank?
  15. Write a brief note on demonetization. 2020

Long Answer Type Questions: (Marks 3 to 6)

  1. What is money? Explain the functions or role of money in modern economy. How does money overcome the shortcomings of a barter system? 2017, 2018, 2019
  2. Describe the speculative (2014, 2017) and transaction demand (2012) for money. How is speculative demand for money related to the rate of interest?
  3. What are commercial banks? What are the functions of commercial bank? 2015, 2017
  4. Explain the process of credit creation of bank together with its limitations. 2019
  5. What is RBI? Explain the functions of RBI as an agent of note issue, Banker’s bank, banker to the government and lender of last resort. 2014, 2017, 2018
  6. What are the instruments of monetary policy/Credit control techniques used by the RBI. Explain any two of them. 2012, 2015, 2019, 2020
  7. “RBI is responsible for changes in the supply of money in the economy” – Elaborate this statement.
  8. Explain the concept of deficit financing. 2013, 2017


Very Short Answer Type Questions: (Marks 1/2)

  1. State one example of non-tax revenue and tax revenue. 2014, 2016
  2. Define capital and revenue expenditure? State one example of capital expenditure and revenue expenditure. Also distinguish between them.
  3. What is fiscal policy?
  4. Fill in the blank: The excess of revenue expenditure over revenue receipt is called revenue _____.
  5. Distinguish between public gods and private goods. 2015
  6. What is allocation function of the government?
  7. What are the components of capital receipt of government budget?
  8. What are various classes of government receipts? Mention them with examples. Also distinguish between them. 2017, 2019
  9. What are various classes of government expenditure? Mention them with examples

Long Answer Type Questions: (Marks 3 to 6)

  1. What is government budget? Briefly explain the components of a government budget.
  2. List out the objectives of preparing government budget. 2013, 2016
  3. What are the sources of government revenue? State them briefly. Distinguish between tax-revenue and non-tax revenue with examples. 2012
  4. Define and distinguish between direct tax and indirect taxes. 2019, 2020
  5. Mention two merits and demerits of direct taxes and indirect taxes. 2017
  6. What is revenue deficit, fiscal deficit and primary deficit? Mention their implications and measures to control it. 2015, 2016, 2017, 2018, 2019
  7. Define surplus budget, deficit budget and balanced budget. Mention their implications. 2015, 2016, 2020
  8. Define and Distinguish between plan and non-plan expenditure with examples.                   2014, 2016, 2018
  9. Define and distinguish public goods and private goods. 2018
  10. Is government debt is a burden?
  11. Trace out the relationship between government deficit and government debt. 2013
  12. State the distribution function of government. What are the functions operated through government revenue and expenditure measures. 2015

Chapter-5: Balance of Payments (8 Marks)

Very Short Answer Type Questions: (Marks 1/2)

  1. What is invisible trade?
  2. What is transfer payment?
  3. What is foreign exchange market? Name the participant of such market.
  4. What is purchasing power parity?
  5. What is real exchange rate?
  6. Y = C + I + G + NX. In this equation what does NX refer to?
  7. What is Bilateral Nominal Exchange rate?
  8. When the import function is given as M=50+0.4Y, what will be the marginal propensity to import?
  9. Define budget deficit and trade deficit.
  10. What do you mean by devaluation of currency? How does it affect the import of a country? 2020

Long Answer Type Questions: (Marks 3 to 6)

  1. What is foreign exchange rate? What are its two types? Also distinguish between them. 2016, 2020
  2. What is fixed exchange rate? Mention its merits and demerits. 2015
  3. What is fluctuating exchange rate? Mention its merits and demerits.
  4. Explain various determinants of exchange rate under flexible exchange rate system. How exchange rate is determined under flexible exchange rate system?
  5. Explain how the equilibrium price of a foreign currency is determined in foreign exchange market.
  6. Describe the role of speculation in determining the flexible rate of exchange.
  7. Mention the sources of demand and supply of foreign exchange.
  8. What is balance of payment and Balance of trade? Distinguish between them. 2014, 2016, 2020
  9. Explain the two main accounts of balance of payments. 2014, 2018, 2020
  10. Distinguish between autonomous and accommodating items of balance of payment. 2013, 2015
  11. What is disequilibrium in Balance of Payments? Mention the causes behind disequilibrium in BOP. 2015, 2017, 2019
  12. What is open and closed economy? Distinguish between them. 2020
  13. Can a country have a trade deficit and current account surplus simultaneously? Discuss the impact of trade deficit.


  1. Development Experience (1947 – 1990)
  2. Economic Reforms since 1991
  3. Current challenges facing Indian Economy
  4. Development Experience of India: A Comparison with Neighbours

Also Read: Part A: Introductory Macro Economics Chapterwise Notes

  1. Introduction to Macro Economics
  2. National Income and Related Aggregates
  3. Money and Banking
  4. Government Budget and The Economy
  5. Balance of Payments
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