1. This practice paper covers the complete Economics syllabus (Understanding Economic Development, Chapters 1–5) in the CBSE Social Science format.
2. Section A (Q1–10) carries 1 mark each — multiple-choice and assertion–reason.
3. Section B (Q11–14) carries 2 marks each — very short answers (≤40 words).
4. Section C (Q15–17) carries 3 marks each — short answers (≤60 words).
5. Section D (Q18–19) carries 5 marks each — long answers (≤120 words).
6. Section E (Q20–21) are source-based, 4 marks each (sub-parts 1+1+2).
7. These questions are deliberately set harder than the board paper. Attempt all, then open "Show answer". Assertion–Reason key: (a) Both A and R true and R is the correct explanation of A; (b) Both true but R is not the correct explanation; (c) A true, R false; (d) A false, R true.
Section A — Objective (10 × 1 = 10)
Multiple-choice and assertion–reason across all five chapters. Each distractor is a specific misconception — read carefully.
1Q1. (Ch 1) Two countries, A and B, have the same average (per capita) income, yet most people would rather live in A. The best reason is that:
Income in A is more equitably distributed
A has a higher total income
B has more rich people
A has a larger population
Show answer
(a) Identical averages can hide very different distributions. In A incomes are spread evenly, while in B most are poor and one is extremely rich — so per capita income tells us the size of income but not how it is distributed.
1Q2.Assertion (A): Kerala has a lower per capita income than Haryana but a much lower Infant Mortality Rate. Reason (R): Money in one's pocket cannot buy publicly-provided goods such as basic health care and a disease-free environment.Show answer
(a) Both true and R explains A. Kerala's strong public provision of health and education gives it a low IMR despite lower income — exactly because many essentials are provided collectively, not bought individually.
1Q3. (Ch 2) While computing GDP, a farmer's wheat and the mill's flour used to make biscuits are NOT counted separately because:
They are intermediate goods whose value is already in the final good
They are services, not goods
They are produced in the primary sector
They are exported
Show answer
(a) Only final goods and services are counted. Wheat and flour are intermediate goods used up in making the biscuits; their value is already included in the biscuits' price, so counting them again would be double counting.
1Q4. (Ch 2) In India, more than half the workforce is in agriculture producing only about one-sixth of GVA. This situation is called:
Disguised unemployment
Open unemployment
Seasonal migration
Full employment
Show answer
(a) Disguised unemployment — more people work on the land than are needed, so removing some would not reduce output; they are underemployed.
1Q5.Assertion (A): Modern currency has no value of its own, yet it is accepted everywhere in India. Reason (R): The rupee is authorised by the RBI on behalf of the government and is legal tender that cannot legally be refused.Show answer
(a) Both true and R explains A. Paper notes have no intrinsic worth; they are accepted only because the government, through the RBI, authorises them as legal tender.
1Q6. (Ch 3) Banks in India keep only about 5% of their deposits as cash because:
only some depositors withdraw on any given day, so this suffices
the law forbids keeping more
they have very few deposits
depositors never withdraw money
Show answer
(a) On any one day only a fraction of depositors come to withdraw, so a small cash reserve is enough; the major portion is lent out as loans, and the interest spread is the bank's main income.
1Q7. (Ch 4) Removing government-set barriers so that businesses can freely decide what to import and export is called:
Liberalisation
Privatisation
Demonetisation
Globalisation
Show answer
(a) Liberalisation — India undertook far-reaching liberalisation around 1991, which accelerated globalisation. (Globalisation is the resulting integration; liberalisation is the policy of removing barriers.)
1Q8.Assertion (A): WTO rules are supposed to allow free and fair trade for all countries. Reason (R): In practice developed countries have kept trade barriers and farm subsidies while developing countries were made to remove theirs.Show answer
(c) A is true (the WTO's stated aim) but R shows trade is not fair in practice — R is a true statement that contradicts the claim of fairness, so it does not support A as an explanation. (A true in intent, but the reason reveals the aim is unmet.)
1Q9. (Ch 5) Under COPRA's three-tier system, a consumer claiming ₹60,000 should approach the:
District Commission
State Commission
National Commission
Supreme Court
Show answer
(a) District Commission — it handles claims up to ₹1 crore; State Commission ₹1-10 crore; National Commission above ₹10 crore.
1Q10. (Ch 5) The certification mark you should look for on a packet of edible oil is:
Agmark
Hallmark
ISI
Woolmark
Show answer
(a) Agmark — certifies agricultural products such as edible oil and cereals; Hallmark is for gold jewellery and ISI for industrial/electrical goods.
Section B — Very Short Answer (4 × 2 = 8)
Answer in about 40 words each.
2Q11. (Ch 1) ‘Average income is useful but has a serious limitation.’ Explain the limitation with an example.Show answer
The limitation is that an average hides disparities in distribution. For example, two countries with the same average income can differ hugely — in one, income is spread evenly; in the other, one person is very rich and the rest poor. The average is identical, yet the countries are very different.
2Q12. (Ch 2) What is disguised unemployment? Give one example.Show answer
Disguised (hidden) unemployment is when more people are employed in a job than are actually needed, so some add nothing to output and their removal would not reduce production. Example: all five of Laxmi's family work a 2-hectare plot that really needs only three.
2Q13. (Ch 3) How does money remove the problem of ‘double coincidence of wants’?Show answer
In barter, exchange needs a double coincidence — each person must want exactly what the other offers. Money, being accepted by everyone, acts as an intermediate: a seller takes money for his goods and then buys whatever he needs from anyone, so no double coincidence is required.
2Q14. (Ch 5) State any two rights of consumers guaranteed under COPRA, with a one-line meaning of each.Show answer
Right to Safety — protection against goods/services hazardous to life and property. Right to Information — the right to know the price, ingredients, date of manufacture, expiry, etc. (Other acceptable: Right to Choose, Right to Seek Redressal, Right to Representation, Right to Consumer Education.)
Section C — Short Answer (3 × 3 = 9)
Answer in about 60 words each. At least one question joins two chapters.
3Q15. (Ch 1) ‘Per capita income is an inadequate measure of development.’ Explain, and name the broader index used instead.Show answer
Per capita income is only an average that hides inequality, ignores non-material goals (health, education, freedom, environment) and cannot buy collective goods like a clean environment. Hence the UNDP uses the Human Development Index (HDI), which combines per capita income, life expectancy (health) and mean years of schooling (education) — a fuller measure of people's wellbeing.
3Q16.(Joins Ch 2 & Ch 3.) Explain how providing cheap credit and irrigation to a small farmer like Laxmi can reduce disguised unemployment and raise incomes.Show answer
Cheap bank credit (instead of costly moneylenders) lets Laxmi buy seeds, fertilisers and a pumpset in time, and irrigation (a well or canal) lets her take a second crop in the rabi season. This creates extra productive work within farming (reducing disguised unemployment), raises output and family income, and also generates jobs in transport and trade when the larger surplus is sold.
3Q17. (Ch 4) ‘The impact of globalisation has not been uniform.’ Explain with one winner and one loser.Show answer
Globalisation helped some and hurt others. Winner: well-off urban consumers (more choice, better quality, lower prices) and skilled producers/MNCs. Loser: many small producers (e.g. Ravi's capacitor unit) and workers (e.g. Sushila, now a low-paid temporary worker) who lost secure jobs under intense competition. Hence the impact is uneven.
Section D — Long Answer (2 × 5 = 10)
Answer in about 120 words each. Each needs more than one concept.
5Q18. (Ch 3) Distinguish between formal and informal sources of credit, explain why formal credit must expand, and how Self-Help Groups (SHGs) help the poor.Show answer
Formal sources — banks and cooperatives, supervised by the RBI, charging low interest. Informal sources — moneylenders, traders, employers, with no supervision and very high interest. Why expand formal credit: the formal sector meets only about half of rural credit needs; informal loans are costly, cause debt-traps and discourage enterprise, and the poor depend mostly on informal lenders while the rich get cheap formal credit — so formal credit must grow and reach the poor. SHGs organise 15-20 poor members (mostly women) to save and pool money, lend small amounts internally and, after regular saving, become eligible for collateral-free group bank loans; group responsibility ensures repayment. Thus SHGs overcome the lack of collateral and bring cheap, timely credit to the poor — crucial for development.
5Q19. (Ch 5) ‘COPRA empowered the Indian consumer.’ Describe the consumer rights it guarantees and the redressal machinery it set up.Show answer
The Consumer Protection Act 1986 (COPRA), amended in 2019, gave consumers six enforceable rights: Safety (protection from hazardous goods/services), Information (price, ingredients, expiry, etc.), Choice (no forced/tied purchases), Seek Redressal (compensation for damage), Representation (to be heard in consumer courts) and Consumer Education. It set up a three-tier quasi-judicial machinery: District Commission (claims up to ₹1 crore), State Commission (₹1-10 crore) and National Commission (above ₹10 crore), with a right of appeal to the next level and class-action suits. The 2019 amendment added online purchases, made manufacturers/service providers liable for defective goods, and encouraged mediation — together empowering the consumer, though redressal is still slow and awareness spreads slowly.
Section E — Source-Based (2 × 4 = 8)
Read each source and answer the sub-parts (1 + 1 + 2 marks).
4Q20.
Country A has five citizens earning ₹9,500, ₹10,500, ₹9,800, ₹10,000 and ₹10,200. Country B has five citizens earning ₹500, ₹500, ₹500, ₹500 and ₹48,000. Both countries have exactly the same average income.
(20.1) Calculate the average income of Country A. (1) (20.2) Which country would most people prefer to live in? (1) (20.3) Which property of income does this expose, and why does it matter for development? (2)Show answer
(20.1) Total of A = 9,500+10,500+9,800+10,000+10,200 = ₹50,000 → average = ₹10,000 (B is the same). (20.2)Country A, because incomes there are equitably distributed. (20.3) It exposes that per capita income hides the distribution (equality/inequality) of income; development policy must therefore aim at equitable distribution, not just a higher average, so growth does not bypass the poor majority.
4Q21.
In the USA agriculture is only about 1% of GDP and about 0.5% of employment, yet US farmers receive massive government support and sell surplus produce in other countries' markets at abnormally low prices. Developing countries, which were made to remove their own trade barriers under WTO rules, ask whether this is ‘free and fair trade’.
(21.1) Which organisation sets the rules of international trade referred to here? (1) (21.2) What is the government support given to US farmers called? (1) (21.3) Why do developing countries call this unfair, and what should they demand? (2)Show answer
(21.1) The World Trade Organisation (WTO). (21.2) It is a subsidy (protection). (21.3) It is unfair because developing countries were forced to remove their barriers and support while developed countries kept huge subsidies, whose cheap surpluses then harm developing-country farmers. They should demand ‘fairer rules’ — that developed countries also cut subsidies/barriers — and ally with other developing countries to press this at the WTO.
📲 Join our WhatsApp Channel
Get free daily notes, new chapter solutions, model question papers & exam updates — straight on your phone.