CBSE Class 12 Economics — Long Answer Questions

(A) (i) Mr. Ravi, an IT entrepreneur from Bengaluru, observed that several MNC's prefer India as their outsourcing Hub for services like software development, customer support, data management etc. His friend Priya believes this is due to certain inherent advantages of the Indian economy. In your opinion, state and explain any two factors that make India a preferred outsourcing destination. (3) (ii) "In the post-independence era, India adopted a protective tariff policy." Do you agree with the given statement ? Justify your answer with any two valid arguments. (3) OR (B) (i) `Strategic sale of a public sector undertaking and minority sale of their shares are methods of disinvestment.' Defend or refute the given statement with valid argument. (3) (ii) Discuss briefly, how bilateral trade agreements are different from multilateral trade agreements ? (3)

(A) "Income of an economy increased from ` 20,000 to ` 50,000 crore. Savings of the economy increased from ` 2,000 crore to ` 10,000 crore." (i) Calculate Average Propensity to Consume (APC) and Average Propensity to Save (APS), before and after the rise in income. (4) (ii) Draw appropriate conclusion regarding the behaviour of Average Propensity to Consume (APC) as his income increases. (2) OR (B) "Under a study, examining the spending habits of a hypothetical economy, it was observed that even households with zero income managed to consume basic necessities. As the income of people increased, their consumption also increased, but not as rapidly as income." Based on the given text and common understanding, answer the following questions : (i) Identify and elaborate the type of consumption indicated in the first para of the above text. (3) (ii) Explain, the reason behind the positive slope of Aggregate Demand Curve. (3)