Viva Questions for Class 12 Economics

Notes Class 12 Revision Notes

Please refer to Viva Questions for Class 12 Economics with solutions below. These revision important examination questions have been prepared based on the latest Economics books for Class 12. You can go through the questions and solutions below which will help you to get better marks in your examinations.

1. Broadly, how can you classify monetary policies.
Ans. Quantitative and Qualitative measures.

2. What policy does a Central Bank follow during inflation?
Ans. Dear money policy.

3. What is dear money policy?
Ans. Making credit costlier.

4. Where is RBI headquartered?
Ans. Mumbai (Maharashtra – India)

5. What are open market operation?
Ans. Buying and Selling Govt. Securities to commercial banks and public.

6. What is a direct tax?
Ans. Tax on property and income.

7. What is an indirect tax?
Ans. Tax on Goods and Service.

8. What is a reasonable fiscal deficit?
Ans. Around 3% – 4% of GDP.

9. What is disinvestment?
Ans. Selling of shares by government in PSUs.

10. What is subsidy? To whom it is given?
Ans. Subsidy is grant given to producers or exporters and even consumers.

11. What are autonomous item?
Ans. Transaction made due to economic motive such as profit maximization are autonomous items for e.g. investments made to earn profit, export of goods.

12. What are accommodating items?
Ans. Transactions undertaken to cover with deficit or surplus in autonomous transactions for e.g. decrease in foreign exchange reserves and borrowings from rest of the world.

13. Where is import of machinery shown in BOP?
Ans. Debit side of current account.

14. Is current a/c deficit (CAD) cause for alarm?
Ans. Yes, if the CAD becomes unmanageable.

15. What are Official Reserve Transactions?
Ans. Official Reserve Transactions are the transactions by a Central Bank that cause changes in its official reserves. These are usually purchases or sales of its own currency in the exchange market in exchange for foreign currencies or other foreign currency denominated assets.

16. What is externality?
Ans. The good acts of a company are not rewarded; this is positive externality. The wrong deeds are left unpunished; this is negative externality. In other words, the good and
the bad deeds of a company when not rewarded or punished are known as externality.

17. When can Domestic Income be greater than National Income?
Ans. This can happen when net factor income from abroad is negative.

18. Convert National Income at current prices to National Income at constant prices.
Ans. National Income at current price divided by price index of current year and multiplied by 100.

19. What is transfer income?
Ans. Incomes received or paid without consideration such as scholarship and old age pension.

20. What is circular flow of income?
Ans. The continuous flow of goods and services between households and firms in a two sector economy and the reverse flow of payment to each other is known as circular flow of income.

We hope the above Viva Questions for Class 12 Economics are useful for you. If you have any questions then post them in the comments section below. Our teachers will provide you an answer. Also refer to MCQ Questions for Class 12 Economics