Sample MCQs with Explanations
Q1. What is the main difference between the formal and informal sectors?
A) Ownership
B) Regulation and job security
C) Size of the enterprise
D) None of the above
Answer: B) Regulation and job security
Explanation: The formal sector is regulated by the government and offers job security, while the informal sector lacks regulation and stability.
Q2. Which of the following comes under the formal sector?
A) Street vendors
B) Government schools
C) Household helpers
D) Small shopkeepers
Answer: B) Government schools
Explanation: Government and registered private institutions belong to the formal sector because they follow labor laws and regulations.
Q3. What is a characteristic of the informal sector?
A) High wages
B) Social security benefits
C) Unregulated employment conditions
D) Fixed working hours
Answer: C) Unregulated employment conditions
Explanation: Workers in the informal sector usually lack legal protection, fixed wages, and social security benefits.
Q4. Which sector employs the majority of the Indian workforce?
A) Formal sector
B) Informal sector
C) Industrial sector
D) Organized corporate sector
Answer: B) Informal sector
Explanation: A large share of India’s workforce is engaged in informal jobs, especially in agriculture and small-scale activities.
Q5. Why is promoting formal sector employment important for India’s economy?
A) Reduces tax revenue
B) Encourages unregistered work
C) Ensures better wages and social protection
D) Increases job insecurity
Answer: C) Ensures better wages and social protection
Explanation: Expanding formal sector jobs improves income stability, productivity, and overall economic development.
Relevant Titles
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CBSE Class 12 Economics MCQs on Formal and Informal Sectors in India
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NCERT-Based Class 12 Economics Quiz – Formal vs Informal Sector
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Class 12 Economics Online Practice Test: Formal and Informal Employment
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CBSE Board 2025 Practice Test – Formal and Informal Sectors MCQs
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Free Class 12 Economics MCQs – Employment Sectors in India
Introduction Paragraph
Introduction:
Prepare efficiently for your CBSE Class 12 Economics Board Exam 2025 with this comprehensive online MCQ practice test on “Formal and Informal Sectors in India.” This key topic from Part B: Indian Economic Development explores the structure, characteristics, and contribution of India’s formal and informal employment sectors to economic growth.
The NCERT-based Class 12 Economics MCQs provided here are carefully crafted to match the latest CBSE syllabus, focusing on topics like job security, labor laws, wage structure, social protection, and workforce participation. Understanding the differences between these two sectors helps students grasp how the Indian labor market functions and why formalization is crucial for inclusive growth.
Each question comes with detailed explanations, making this exam-oriented practice quiz ideal for concept reinforcement, revision, and self-assessment. These CBSE Class 12 Economics MCQs provide a balanced approach to theoretical understanding and board-level application, helping students strengthen their preparation and achieve top scores in 2025.
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