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Read the following… (Class 12 Economics 2026, Q18)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/1/1 · 1 mark · MCQ

CBSE Class 12 Economics 2026: question 18

Set in the CBSE Class 12 board exam of 2026, paper 58/1/1, section B, question 18, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q18 · 1 mark · MCQIndian Economy on the Eve of Independence

Read the following statements carefully :

Statement 1 : During the British rule in India, the export surplus was utilised to import of invisible items from Britain.

Statement 2 : Indians paid for the expenses incurred by an office set up by the colonial government in Britain.

In the light of above 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 question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 58/1/1.

Hints

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

Hint 1

Where did India's export surplus go during colonial rule?

Hint 2

Think of the "drain of wealth".

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: India's large export surplus under British rule was not used to bring goods into India; it went to pay for the import of invisible items (services) from Britain and other charges.

  2. Statement 2 is true: India also paid for the expenses of an office set up by the colonial government in Britain (home charges), along with war expenses. Both drained India's wealth. Option (C).

    1 mark

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

Where the marks are

  • Export surplus used for invisibles and home charges (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Indian Economy on the Eve of Independence, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 58/1/1: 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.