ISC 2026 Economics Question Paper for Class 12

About this paper

This is the ISC Class 12 Economics paper from the 2026 board examination, code 1226-856. It carries 80 marks and runs for three hours, with fifteen minutes extra for reading only. All thirteen questions are compulsory. Section A has sixteen one-mark parts. Section B has eight four-mark questions, with an internal choice in Questions 4 and 9. Section C has four eight-mark questions, with an internal choice in Question 12. Among the questions are a mid-day meal and a dam as kinds of government spending, GST at 18 per cent on soap, a perfectly competitive firm selling at ₹80 against a unit cost of ₹65, and a passage on inflation in Argentina after a rise in exports and government spending. This copy has the questions only.

Exam

ISC Class 12

Subject

Economics

Year

2026

Paper code

1226-856

Maximum marks

80

Time allowed

3 hours + 15 min reading

Questions

13

Pages

11

Answers included

No, questions only

Paper pattern

• Section A

  16 marks

  Question 1: sixteen very short parts, one mark each

• Section B

  32 marks

  Questions 2–9, four marks each; internal choice in Questions 4 and 9

• Section C

  32 marks

  Questions 10–13, eight marks each; internal choice in Question 12. Question 13 is a passage on inflation in Argentina

Topics covered

• Elasticity of demand
• Utility
• Perfect competition
• Monopsony
• Costs and returns
• Indifference curves
• Government budget and taxation
• Balance of payments
• National income
• Aggregate demand and inflation
• Money and banking

Questions from this paper

1. Why is Indian currency regarded as fiat money?
2. What is demand-pull inflation?
3. State any two features of a monopsony.
4. In the Union Budget for 2025–26, GST on soaps is fixed at 18%. Why is this tax regressive?
5. A perfectly competitive firm sells at ₹80 per unit and incurs a cost of ₹65 per unit in the short run. What situation is the firm in? Show it on a diagram.
6. Identify and explain the phenomenon in the passage where Argentina’s exports and government spending rise while the economy is already at full employment.