Posted by Anjali Kaur on Oct 30, 2021
Practice Test

Practice Test on Indian Economy

Practice Test on Indian Economy, Class XII, CBSE. Topics covered include Poverty, Agricultural Diversification, Infrastructure, Global Warming, Comparative study of India, China, and Pakistan.

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1. Small farmers or seasonal workers who regularly move in and out of poverty, fall in the category of:

a) Chronic Poor

b) Never Poor

c) Churning Poor

d) Usually Poor

Solution: c) Churning Poor

2. ‘Right to Education Act’ was enacted in the year_______

Solution: The Right to Education Act 2009, also known as the RTE Act 2009, was enacted by the Parliament of India on 4 August 2009.

3. What do you understand by ‘Operation Flood’?

Solution: Operation Flood: One of the world’s largest rural development programs. Launched in 1970, Operation Flood has helped dairy farmers whereby all the farmers can pool their milk produced according to different grading based on quality, and the same is processed and marketed to urban centers through cooperatives. In this system, the farmers are assured of a fair price and income from the supply of milk to the urban market.

4. What is meant by ‘Jobless Growth’?

Solution: A jobless growth economy indicates the existence of changes to the fundamental basis of work for everyone. Some workers will do well, as they have the skills and training that growing industries require. Others face long-term unemployment or underemployment and will be unable to find work until they obtain new skills.

5. Define social infrastructure.

Solution: Social Infrastructure– It includes those basic aspects of an economic system that provide support to the process of social development.

Social infrastructure includes; education, health, and housing.

The social infrastructure supports the economic system indirectly.

Social infrastructure enhances the quality of human resources and therefore helps in increasing the efficiency of human capital. Social infrastructure, therefore, helps promote social development.

6. Give some of the long term results of global warming.

Solution: Global warming is a gradual increase in the earth’s temperature generally due to the greenhouse effect caused by increased levels of carbon dioxide, CFCs, etc.

Global warming can be described by its effect on the environment that is:

  • Melting of polar ice has resulted in a rise in sea level and coastal flooding.
  • Disruption of drinking water supplies.
  • Extinction of species.
  • Increase in the incidence of tropical diseases.

7. Explain the Great Leap Forward campaign of China as initiated in 1958.


  • The Great Leap Forward was a five-year economic plan executed by Mao Zedong and the Chinese Communist Party, begun in 1958 and abandoned in 1961.
  • The goal was to modernize the country’s agricultural sector using communist economic ideologies.
  • Instead of stimulating the country’s economy, The Great Leap Forward resulted in mass starvation and famine.
  • It is estimated that between 30 and 45 million Chinese citizens died due to famine, execution, and forced labor, along with massive economic and environmental destruction.
  • The Great Leap Forward remains the largest episode of non-wartime mass killing in human history, and a clear example of the failures of socialism and economic central planning.

8. Describe the path of developmental initiatives taken by Pakistan for its economic development.


Pakistan followed the mixed economy model like India. Let’s learn how the Pakistan path of development occurred;

  • In the late 1950s and 1960s, Pakistan introduced a variety of regulated policy framework for import substitution industrializing.
  • The policy combined tariff protection for the manufacturing of consumer goods with direct import controls on competing imports.
  • The introduction of the green revolution resulted in mechanization and an increase in public investment in infrastructure which led to an increase in the production of food grains.
  • In the 1970s, the nationalization of capital goods industries happened.
  • In the 1970s and 1980s, a shift in its policy orientation occurred when major thrust areas denationalized and the private sector encouraged.
  • Pakistan received financial support from western countries and remittances from the increasing outflow of emigrants to the middle east led to the economic growth of Pakistan.
  • In 1988, economic reforms initiated in the country.

9. Explain how the opportunity costs of negative environmental impact are high.

Solution: Opportunity cost is the cost in terms of foregone opportunities for doing things. Many resources have become extinct and the wastes generated are beyond the absorptive capacity of the environment. This negative environmental Impact has high opportunity costs as explained below

(i) The industrial development in past has polluted and dried up rivers and other aquifers making water an economic good. Cleaning up polluted rivers and replenishing water resources require huge investments.

(ii) The intensive and extensive extraction of both renewable and non-renewable resources is exhausted. Some of these vital resources and huge amounts of funds need to be spent on technology and research to explore new resources.

(iii) The health costs of degraded environmental quality are also present as a decline in air and water quality have resulted in an increased incidence of respiratory and water-borne diseases.

(iv) Global environmental issues such as global warming and ozone depletion also contribute to increased financial commitments for the government. Thus, it is clear that the opportunity costs of negative environmental impacts are high.

10. Explain the role of non-farm employment in promoting rural diversification.


Thank You!

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