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Refer to the given… (Class 12 Economics SQP 2025-26, Q5)

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EconomicsCBSE Class 12 · Sample paper, session 2025-26 · 1 mark · MCQ

CBSE Class 12 Economics sample paper 2025-26: question 5

From the official CBSE sample question paper for 2025-26, section A, question 5, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q5 · 1 mark · MCQCompetency-basedNational Income Accounting

Refer to the given diagram carefully:
The arrows C and D represent ______ Market. (Choose the correct option to fill up the blank)

  1. (A)Factor
  2. (B)Goods
  3. (C)Stock
  4. (D)Financial

Figure in the paper: Circular flow diagram between Firms and Households. Outer arrow A: Spending (Households to Firms); inner arrow B: Goods and Services (Firms to Households); inner arrow C: Factor Payments (Firms to Households); outer arrow D: Factor Services (Households to Firms). See it in the official paper.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2025-26.

Hints

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

Hint 1

What do households sell to firms?

Hint 2

Goods market flows are goods and spending; factor market flows are services and payments.

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. In the diagram, arrow C is factor payments (firms to households) and arrow D is factor services (households to firms).

  2. Both are exchanges of factor services for factor payments, which take place in the factor market. Option (A).

    1 mark

Answer: (A) Factor

Where the marks are

  • Factor services and factor payments flow through the factor market (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from National Income Accounting, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2025-26: 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.