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The Government of… (Class 12 Economics SQP 2026-27, Q5)

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EconomicsCBSE Class 12 · Sample paper, session 2026-27 · 1 mark · MCQ

CBSE Class 12 Economics sample paper 2026-27: question 5

From the official CBSE sample question paper for 2026-27, section A, question 5, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q5 · 1 mark · MCQCompetency-basedGovernment Budget and the Economy

The Government of India in its Union Budget 2026-27 has decided to exempt fish caught by Indian fishing vessels operating in the Exclusive Economic Zone (EEZ) and on the High Seas from duty.
Identify the objective behind the initiative taken by the Government of India as stated above. (Choose the correct option)

  1. (A)Allocation Function
  2. (B)Distribution Function
  3. (C)Stabilisation Function
  4. (D)Disposition Function

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

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

Hint 1

Does the measure redistribute income, steady prices, or shift resources to a sector?

Hint 2

Allocation = what gets produced.

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. Exempting fish caught by Indian vessels in the EEZ and high seas from duty is a tax concession meant to encourage this activity.

  2. Using taxes and concessions to direct resources towards particular sectors (here deep-sea fishing) is the allocation function of the budget. Option (A).

    1 mark

Answer: (A) Allocation Function

Where the marks are

  • Duty exemption steers resources to a sector (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 2026-27: 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.