CBSE Class 10 Economics — Model Paper
Board Exam 2026 Preparation Series
CBSE Class 10 Economics — Model Paper
5 MCQs + 3 Very Short Answer Questions
Welcome to this CBSE Class 10 Economics Model Paper for Board Exam 2026. This practice paper includes 5 Multiple Choice Questions (1 mark each) and 3 Very Short Answer Questions (2 marks each), carefully selected from the NCERT textbook Understanding Economic Development. Attempt the full paper on your own first, then check your answers and model responses at the end to evaluate your preparation level.
| Subject: Social Science (Economics) | Class: X (10th) |
| Total Questions: 8 (5 MCQ + 3 VSA) | Total Marks: 11 |
| MCQ Marks: 1 mark each | VSA Marks: 2 marks each |
| Book: Understanding Economic Development (NCERT) | Time: 25–30 minutes | |
SECTION A — Multiple Choice Questions (MCQs)
Each question carries 1 mark | No negative marking | Choose the most appropriate option.
Q1. Which of the following correctly describes the meaning of Infant Mortality Rate (IMR)?
(A) The number of children who die after the age of 5 years per 1000 live births
(B) The number of children that die before the age of one year per 1000 live births
(C) The total number of births registered per 1000 population
(D) The percentage of malnourished children below 5 years of age
Q2. NREGA 2005 (National Rural Employment Guarantee Act) guarantees employment to rural households for how many days per year?
(A) 50 days
(B) 75 days
(C) 100 days
(D) 150 days
Q3. Which of the following is an example of formal source of credit in India?
(A) Local moneylenders
(B) Relatives and friends
(C) Scheduled commercial banks
(D) Chit funds
Q4. Which of the following best describes a Multinational Corporation (MNC)?
(A) A company that operates only in developing countries
(B) A company that is owned by the government of more than one country
(C) A company that owns or controls production in more than one country
(D) A company that exports goods to more than ten countries
Q5. A consumer who has purchased a defective product worth ₹22 lakhs should file a complaint in which consumer court?
(A) District Consumer Disputes Redressal Commission
(B) State Consumer Disputes Redressal Commission
(C) National Consumer Disputes Redressal Commission
(D) Supreme Court of India
SECTION B — Very Short Answer Questions (VSA)
Each question carries 2 marks | Answer in 2–3 sentences | Use correct economic terminology.
Q6. What is collateral? Why do banks insist on collateral before granting loans to borrowers?
[2 marks | Chapter: Money and Credit]
Q7. How has globalisation created interconnection between countries? Explain with any two examples.
[2 marks | Chapter: Globalisation and the Indian Economy]
Q8. State any two rights that are guaranteed to consumers under the Consumer Protection Act. Give one example of how each right can be exercised.
[2 marks | Chapter: Consumer Rights]
✅ Answer Key — Section A (MCQs)
| Q No. | Correct Answer | Chapter / Topic |
|---|---|---|
| Q1 | (B) Children that die before age one per 1000 live births | Development – Health Indicators |
| Q2 | (C) 100 days | Sectors of Economy – NREGA |
| Q3 | (C) Scheduled commercial banks | Money and Credit – Formal Credit |
| Q4 | (C) Owns or controls production in more than one country | Globalisation – MNCs |
| Q5 | (B) State Consumer Disputes Redressal Commission | Consumer Rights – Three-tier Courts |
🔍 MCQ Explanations
Q1 — Infant Mortality Rate (IMR): IMR measures the number of children who die before reaching one year of age per 1,000 live births in a given year. It is one of the most important indicators of a country's health infrastructure and level of development. A low IMR indicates better healthcare, nutrition, and sanitation standards.
Q2 — NREGA 100 Days: The National Rural Employment Guarantee Act (NREGA), now called MGNREGS, was enacted in 2005. It legally guarantees 100 days of wage employment per year to every rural household whose adult members are willing to do unskilled manual work. If employment is not provided within 15 days, the worker is entitled to an unemployment allowance.
Q3 — Formal Sources of Credit: Formal credit sources are those supervised and regulated by the Reserve Bank of India (RBI). These include commercial banks, cooperative banks, and other registered financial institutions. They charge lower interest rates and maintain proper records. Moneylenders, relatives, chit funds, and traders are informal sources — unregulated and often charging very high interest rates.
Q4 — MNC Definition: A Multinational Corporation (MNC) is a company that owns or controls production of goods or services in more than one country. It is different from an export company — an MNC actually sets up offices, factories, or production units in foreign countries, not merely selling goods there. Examples include Ford, Samsung, Coca-Cola, and Unilever.
Q5 — Consumer Court Jurisdiction: Under the Consumer Protection Act 2019, the three-tier system works as follows — the District Commission handles complaints up to ₹1 crore; the State Commission handles complaints between ₹1 crore and ₹10 crore; and the National Commission handles complaints above ₹10 crore. Since ₹22 lakhs is between ₹1 lakh and ₹1 crore, it goes to the State Commission. (Note: Under the 2019 Act, District Commission limit is up to ₹1 crore — check your NCERT edition for exact figures used in exam.)
✅ Model Answers — Section B (Very Short Answer)
Q6 — Collateral and Its Importance for Bank Loans
Definition: Collateral is an asset — such as land, a building, a vehicle, livestock, or a savings deposit — that a borrower owns and offers to the lender as a security or guarantee against the loan. If the borrower fails to repay the loan, the lender has the legal right to sell the collateral asset to recover the money owed.
Why Banks Insist on Collateral: Banks insist on collateral because lending always carries the risk that the borrower may not repay — known as the risk of default. Collateral acts as security that protects the lender's money. It also acts as an incentive for the borrower to repay the loan on time, since failure to do so would result in the loss of their valuable asset. This is why the rural and urban poor, who often lack assets to offer as collateral, find it difficult to access formal bank loans.
Marking Hint: 1 mark for a correct definition of collateral with a relevant example + 1 mark for clearly explaining why banks require it.
Q7 — How Globalisation Creates Interconnection Between Countries
Globalisation is the process of rapid integration and interaction between countries through the movement of goods, services, investments, technology, and people across national borders. It creates deep interconnections where the economies of different countries become dependent on each other.
Example 1 — Production Networks: When you buy a mobile phone, its design may be done in the USA, chips manufactured in Taiwan, software coded in India, and the phone assembled in China. MNCs link the economies of multiple countries through such global production chains.
Example 2 — Trade and Consumption: Indian consumers today can buy goods produced anywhere in the world — foreign cars, branded clothing, or imported electronics. Simultaneously, Indian products like textiles, software services, and pharmaceuticals are exported globally, connecting the Indian economy to the rest of the world.
Marking Hint: 1 mark for each correctly explained and relevant example of global interconnection. Any two valid examples accepted.
Q8 — Two Consumer Rights Under the Consumer Protection Act
Right 1 — Right to be Informed: Consumers have the right to be informed about the quality, quantity, potency, purity, standard, and price of goods or services, so they can make informed choices. Example: A consumer checking the MRP (Maximum Retail Price), manufacturing date, expiry date, and ingredients printed on a packaged food product is exercising the Right to be Informed.
Right 2 — Right to Seek Redressal: Consumers have the right to seek compensation or replacement if a product is defective or a service is inadequate, and to have their grievances heard and resolved fairly. Example: A consumer who receives a faulty electronic appliance can file a complaint in the District Consumer Disputes Redressal Commission to seek repair, replacement, or a refund.
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