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Read the following… (Class 12 Economics SQP 2024-25, Q9)

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EconomicsCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Economics sample paper 2024-25: question 9

From the official CBSE sample question paper for 2024-25, section A, question 9, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q9 · 1 mark · MCQGovernment Budget and the Economy

Read the following statements carefully:
Statement 1: Foreign grants-in-aid receipts do not lead to any claim on the government.
Statement 2: Disposal of equity by the Public Sector Undertakings in the market may lead to a decrease in the assets of the government.
In light of the given statements, choose the correct option from the following:

  1. (A)Statement 1 is true and Statement 2 is false.
  2. (B)Statement 1 is false and Statement 2 is true.
  3. (C)Both Statements 1 and 2 are true.
  4. (D)Both Statements 1 and 2 are false.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Must a grant be repaid?

Hint 2

What does the government give up when it sells shares?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Statement 1 is true: grants are gifts; they create no liability or future claim on the government.

  2. Statement 2 is true: selling PSU equity (disinvestment) brings in cash but reduces the government's assets (its ownership in the enterprises). Option (C).

    1 mark

Answer: (C) Both Statements 1 and 2 are true.

Where the marks are

  • Grants create no claim; disinvestment reduces assets (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Government Budget and the Economy, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.