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What is the most difficult chapter in macroeconomics class 12?
The toughest chapters in Class 12 Economics are Development, Sectors of Indian Economy, Money and Credit, and Globalization and the Indian Economy. Also, for Important Questions for CBSE Class 12 Macro Economics 2024, check the above article.
What are the most important topics in macroeconomics?
The most important topics in macroeconomics are output, unemployment, and inflation. These are central to macroeconomic research on a national level.
What are the most important questions in macroeconomics?
The important questions in macroeconomics cover various concepts such as national income, inflation, unemployment, fiscal policy, monetary policy, and international trade. Also, for Important Questions for CBSE Class 12 Macro Economics 2024, check the above article.
Is Class 12 macroeconomics tough?
Class 12 macroeconomics can be challenging for some students due to its complex concepts and theories. However, with regular practice and understanding of key principles, students can overcome difficulties and succeed in the subject. Also, check the above article for Important Questions for CBSE Class 12 Macro Economics 2024.
How to score 90 per cent in Economics class 12?
To score 90+ in economics in Class 12 CBSE board exams, it's important to regularly revise all the concepts. Consistent revision helps in recalling and retaining information. Economics includes both theoretical and numerical aspects, so practice solving numerical problems along with understanding theories. Also, check the above article for Important Questions for CBSE Class 12 Macro Economics 2024.
Important Questions for CBSE Class 12 Macro Economics
Check important questions and concepts in Class 12 Macroeconomics, including national income, GDP, money, banking, and government budgets, to enhance understanding and preparation for the CBSE exams.
Mridula Sharma17 Oct, 2024
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In Class 12 Macro Economics, students delve into a comprehensive syllabus covering vital topics essential for a deeper understanding of the subject. By solving these important questions for CBSE Class 12 Macro Economics with expert-provided solutions, students can hone their skills and grasp key economic concepts effectively.
Class 12 holds immense significance as it lays the groundwork for students' future academic endeavours and career prospects. Mastering macroeconomic principles is crucial for excelling in board exams and securing admission to esteemed institutions. Accessing the top 20 important questions for CBSE Class 12 Macro Economics 2024 equips students with the necessary tools to excel in their exams and prepare for complex economic concepts with confidence.
CBSE Class 12 Macro Economics Important Questions
Class 12 Macro economics covers the broad aspects of economics, focusing on large-scale economic factors, unlike microeconomics, which looks at individual units. In this subject, students will learn how to calculate the national income and GDP, gaining insight into the country’s economic health. They’ll explore the circular flow of income, understand its role in maintaining economic balance, and delve into banking operations, including the various types of banks and their functions in India.
Students will also study employment levels and how income is determined across different economic sectors. Additionally, they will examine the national budget, learning how funds are allocated to various sectors, such as agriculture, industry, and tourism. Another key area is India's economic liberalization, which transformed the country into an open economy. This shift boosted foreign direct investments and enhanced the country's income from imports and exports, contributing significantly to economic growth.
CBSE Class 12 Macro Economics Chapters
To fully grasp the concepts in Class 12 Macro economics, students need to explore each chapter’s core topics. Let's take a closer look at what each chapter offers.
Introduction to Macro economics
This introductory chapter distinguishes between microeconomics and macroeconomics, highlighting the differences between the two. It also covers features of a capitalist economy, key economic agents, and the concepts of scarcity and opportunity. Students will learn about resource allocation and its impact on different economic classes within a capitalist system.
Macroeconomics' scope includes national income, economic growth, general unemployment, and economic policies. Additionally, students will learn about various goods such as consumer goods, private goods, and substitutes.
National Income Accounting
This essential chapter provides opportunities for students to score well through problem-solving. It covers market and nonmarket activities, the differences between nominal GNP and real GNP, and concepts like national disposable income and income flows. Students will also learn about calculating real GNP and understanding the distinctions between personal and real income.
Money and Banking
This chapter introduces the history of money, from the Barter System to paper currency, and emphasizes the role of money and banks in the economy. Students will explore concepts such as credit creation, money supply, functions of commercial banks, and various banking types. They'll also learn about interest rates, high-powered money, and how the country’s money supply is controlled.
Determination of Income and Employment
Students explore how a two-sector economy operates, learning about the Average Propensity to Consume (APC), Average Propensity to Save (APS), and income level equilibrium. This chapter also covers investment types, the concept of a multiplier, inflationary gaps, and the idea of full employment.
Government Budget and the Economy
In this chapter, students learn about direct and indirect taxes, income inequality reduction, and budgetary policies. Topics include capital receipts, disinvestment, and deficit types (budget, revenue, fiscal, and primary). It also discusses the economic challenges the government budget aims to address, along with concepts like developmental expenditure and surplus budget.
Open-Economy Macroeconomics
This chapter covers the evolution of the economy post-1991, introducing the balance of payments, exchange rates, and foreign exchange markets. Students will understand the dynamics of foreign exchange demand, balance of payments transactions, and how deficits occur.
CBSE Class 12 Macro Economics Questions with Answers
Access expertly crafted important questions and answers for CBSE Class 12 Macro Economics, aligned with the latest
CBSE Commerce Class 12 (NCERT) Syllabus
. Designed by experienced economics educators, these resources simplify complex concepts, aiding students in comprehensive exam preparation.
Here are the Top 20 CBSE Class 12 Macro Economics Important Questions with Answers for 2024:
Question 1. What is good in economics?
Answer:
In economics, a good refers to any tangible item or service that satisfies human wants and needs. Goods can range from physical products like clothing and electronics to intangible services such as healthcare and education. Essentially, goods are anything that people are willing to pay for to fulfil their desires or requirements.
Question 2. What is export?
Answer:
Export refers to the act of selling goods or services produced in one country to residents of another country. This process involves shipping or transferring products across international borders for sale in foreign markets. Exporting plays a crucial role in a country's economy by generating revenue, promoting economic growth, and fostering international trade relationships.
Question 3. Differentiate between microeconomics and macroeconomics.
Answer:
This table provides a comprehensive overview of the
Differences Between Microeconomics and Macroeconomics
in various aspects such as focus, scope, units of analysis, decision-making, market types, policy implications, and examples.
Aspect
Microeconomics
Macroeconomics
Focus
Behaviour and interactions of individual economic agents (e.g., households, firms, industries)
Overall performance and behaviour of the whole economy
Scope
Narrow
Broad
Units of analysis
Individual units (e.g., households, firms)
Aggregate units (e.g., total output, total employment)
Decision-making
Resource allocation, production, consumption, and pricing in specific markets
Aggregate economic variables, such as national income, inflation, unemployment, and economic growth
Determining the price of a specific product, analyzing individual firm behaviour
Assessing the impact of government spending on national income, studying the effects of monetary policy on inflation
Question 4. What is an import?
Answer:
An import refers to the purchase of goods or services from foreign countries for consumption or use in the importing country. Imports play a crucial role in meeting domestic demand, supplementing local production, and providing consumers with a wide variety of choices. They contribute to international trade flows, facilitate global economic integration, and impact factors such as exchange rates, tariffs, and trade policies.
Question 5. Under which type of activity would you categorize the sale of shares of another firm while preparing the cash flow statement?
Answer:
The sale of shares of another firm would typically fall under the category of investing activity when preparing the cash flow statement. Investing activities involve the acquisition or disposal of long-term assets such as property, equipment, securities, or investments in other companies. These transactions reflect the allocation of resources for future growth, strategic purposes, or financial returns.
Question 6. What is real flow?
Answer:
Real flow refers to the movement of goods and services between different sectors of an economy. It represents the physical exchange of tangible products and intangible services among households, firms, government entities, and the rest of the world. Real flow encompasses activities such as production, distribution, consumption, and trade, reflecting the flow of economic resources and output within an economy.
Question 7. What is the Difference between personal income and private income?
Answer:
Personal income refers to the total earnings and transfer payments received by individuals from various sources within and outside the country. It includes wages, salaries, interest, dividends, rents, pensions, and government benefits.
Private income, on the other hand, represents the total income earned by all private entities, including individuals, households, and businesses, excluding corporate taxes and savings.
Question 8. What must be added to domestic factor income to generate national income?
Answer:
To calculate national income, we add net factor income from abroad to domestic factor income. Net factor income from abroad represents the difference between the income earned by domestic factors of production (such as labour and capital) from foreign sources and the income earned by foreign factors of production from domestic sources. Adding this component to domestic factor income provides a comprehensive measure of the total income generated within a country's borders.
Question 9. What is national disposable income?
Answer:
National disposable income refers to the total income available to the entire economy for spending or saving after accounting for taxes and transfers. It represents the income that households, businesses, and the government have at their disposal for consumption, investment, and other economic activities. National disposable income is calculated by adding net national product (NNP) to net current transfers from abroad and subtracting taxes on production and imports, subsidies, and depreciation.
Question 10. The legal reserve ratio is equal to _______.
Answer:
The legal reserve ratio is equal to the sum of the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR). These reserve requirements are set by central banks to regulate the liquidity and stability of the banking system. The CRR mandates banks to maintain a certain percentage of their deposits in cash reserves with the central bank, while the SLR requires them to hold a percentage of their deposits in liquid assets such as government securities.
Question 11. Calculate the value of the money multiplier and total deposit made if the original amount is Rs. 700 crore and the LRR is 10%.
Answer:
The value of the money multiplier is calculated as the reciprocal of the legal reserve ratio (LRR). In this case, the LRR is 10%, so the money multiplier is 1/LRR = 1/0.1 = 10.
Given an initial deposit of Rs. 700 crores, the total deposit created would be the initial deposit multiplied by the money multiplier, i.e., 700 crore x 10 = 7000 crores.
Question 12. Consumption changes in the same direction as income. True or False?
Answer:
True.
Consumption tends to change in the same direction as income. As people earn more income, they typically increase their consumption spending, and vice versa. This relationship is known as the consumption-income relationship and is a fundamental principle in economics.
Question 13. What is equilibrium income?
Answer:
Equilibrium income refers to the level of national income where aggregate demand (AD) is equal to aggregate supply (AS). In other words, it is the level of income at which planned savings are equal to planned investment. At equilibrium income, there is neither an excess nor a shortage of goods and services in the economy, leading to a stable equilibrium situation.
Question 14. Is it possible for the average propensity to consume to exceed one? Explain the rationale behind your answer.
Answer:
No, the average propensity to consume (APC) cannot be greater than one. The APC is calculated as the ratio of total consumption expenditure to total disposable income. Since consumption expenditure cannot exceed disposable income, the APC cannot exceed one. If consumption were to exceed income, it would result in a negative saving rate, which is not feasible in economic theory.
Question 15. What is a budget?
Answer:
A budget is an annual financial plan that outlines the estimated government receipts and expenditures for a specific fiscal year. It serves as a comprehensive framework for allocating financial resources, setting priorities, and achieving fiscal objectives. A budget typically includes revenue projections, expenditure allocations, deficit or surplus estimates, and policy measures aimed at promoting economic growth, stability, and development.
Question 16. What are the four different concepts of deficit?
Answer:
The four different concepts of deficit are:
Budget deficit
:
It refers to the excess of government expenditures over revenues during a fiscal year.
Revenue deficit:
It represents the shortfall in government revenue receipts compared to revenue expenditures, excluding borrowings and debt servicing.
Primary deficit:
It indicates the fiscal deficit excluding interest payments on outstanding debt.
Fiscal deficit
:
It encompasses the total borrowing requirements of the government to finance its expenditure commitments, including interest payments on past debts.
Question 17. What is a flexible exchange rate?
Answer:
A flexible exchange rate is when the value of a currency changes based on how much people want it compared to other currencies. It's determined by supply and demand in the global market, allowing currency values to fluctuate freely.
Question 18. Give the two examples and explain why there is a rise in demand for a foreign currency when its price decreases.
Answers:
Here are two examples of why there is a rise in demand for a foreign currency when its price decreases:
Increased imports:
When the price of a foreign currency decreases, imports become cheaper for domestic consumers, leading to higher demand for foreign currency to pay for these imports.
Boost in tourism:
A decrease in the price of a foreign currency makes travelling to that country more affordable for tourists, resulting in increased demand for foreign currency to finance travel expenses.
Question 19. What is the Difference between in autonomous and accommodating transactions of the balance of payment account?
Answer:
Autonomous transactions:
These are economic transactions that occur independently of the state of the balance of payments, such as international trade in goods and services, investment income, and unilateral transfers.
Accommodating transactions:
These transactions are undertaken to offset surplus or deficit positions in the balance of payments, including official reserve transactions, foreign aid, and borrowing or lending from international organizations.
Question 20. Explain the concept of the budget deficit.
Answer:
The budget deficit occurs when a government's expenditures exceed its revenues during a specific fiscal period. It reflects the shortfall between government spending and tax revenues, necessitating borrowing to cover the deficit.
Budget deficits can result from various factors, such as increased government spending, reduced tax revenues, economic downturns, or expansionary fiscal policies aimed at stimulating economic growth.
Governments often finance budget deficits through borrowing from domestic or foreign sources, issuing bonds, or printing money, which can have long-term implications for economic stability and public debt levels.
Here are five easy tips to help you study Class 12 Macro Economics questions effectively:
Understand the Concepts:
Before diving into questions, make sure you have a clear understanding of the fundamental concepts of Class 12 Macro Economics. Familiarize yourself with terms like national income, inflation, unemployment, and economic growth, as they form the basis of many questions on the subject.
Practice Regularly:
Consistent practice is key to mastering Class 12 Macro Economics questions. Set aside dedicated study time each day to solve questions from different chapters and topics. This will help to strengthen your comprehension and improve your problem-solving abilities.
Refer to Sample Papers:
Utilize sample papers and previous years' question papers to get an idea of the exam pattern and question types. Practice solving these papers under timed conditions to simulate the exam environment and enhance your exam preparation for Class 12 Macro Economics.
Seek Clarification:
Don't hesitate to seek clarification from your teachers or classmates if you encounter any doubts or difficulties while studying Class 12 Macro Economics questions. Understanding the concepts thoroughly is crucial for answering questions accurately.
Create Summary Notes:
Summarize important concepts, formulas, and definitions in Class 12 Macro Economics into concise notes. Reviewing these notes regularly will help you retain information better and revise quickly before exams. Additionally, try to relate the concepts to real-life examples to deepen your understanding.
By following these tips and staying consistent in your study routine, you can effectively prepare for Class 12 Macro Economics questions and perform well in your exams.
Therefore, mastering the important questions for CBSE Class 12 Macro Economics 2024 is crucial for exam success. By practicing diligently and understanding key concepts, students can confidently tackle exam challenges and achieve their academic goals.
Also, for Commerce students, PhysicsWallah (PW) serves as a top coaching platform, offering innovative teaching methods and expert guidance to ensure comprehensive preparation and academic excellence. With PW's support, students can prepare for the complexities of macroeconomics and excel in their exams.
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