MONISH.

U X-A

ECONOMIC

CH-1 DEVELOPMENT

1. What is the main criterion used by the World Bank in classifying different countries? What
are the limitations of this criterion, if any?

o The World Bank classifies countries based on per capita income. Limitations include its failure
to account for inequality, social indicators, and environmental factors.

2. In what respects is the criterion used by the UNDP for measuring development different
from the one used by the World Bank?

o UNDP uses Human Development Index (HDI), which includes income, education, and life
expectancy, whereas the World Bank relies only on per capita income.

3. Why do we use averages? Are there any limitations to their use? Illustrate with your own
examples related to development.

o Averages provide a simple way to understand data, but they can mask inequalities. For
example, an average income of a country may hide poverty among certain groups.

4. Kerala, with lower per capita has a better human development ranking than Punjab.
Hence, per capita income is not a useful criterion at all and should not be used to compare
states. Do you agree? Discuss.

o Agree, as HDI considers factors like education and life expectancy, which provide a more
holistic view of development than just income.

5. Find out the present sources of energy used by people in India. What could be the
possibilities fifty years from now?

o Currently, India uses coal, natural gas, and renewables like wind and solar. In the future,
there could be a greater shift to sustainable energy sources like solar and wind.

6. Why is the issue of sustainability important for development?

o Sustainability ensures that development does not deplete resources for future generations,
maintaining balance between economic growth and environmental health.

7. What are the factors important other than income?

o Health, education, gender equality, and environmental sustainability are important factors.

8. What do you understand by the term ‘Life Expectancy’?

o Life expectancy is the average number of years a person is expected to live based on current
health conditions.

9. Explain Per Capita Income?

o Per capita income is the total income of a country divided by its population, providing an
average income per person.

10. What is Infant Mortality rate?

o Infant mortality rate is the number of infants who die before reaching one year of age per
1,000 live births in a given year.

11. What is Life Expectancy at Birth?

o It is the average number of years a newborn is expected to live, assuming current mortality
rates.

12. What is Net Attendance Ratio?

o The Net Attendance Ratio is the percentage of children of official school age attending school.

13. What is Gross Enrolment ratio?

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o Gross Enrollment Ratio is the total enrollment in a particular level of education, regardless of
age, divided by the population of the age group that officially corresponds to that level.

14. Why do different persons have different notions of development? Explain.

o Development is subjective and depends on individual needs, values, and priorities, such as
income, health, education, or cultural preservation.

15. “Conflicting goals can be development goals”. Elaborate with examples.

o Different groups might have conflicting development goals; for instance, industrial growth
may conflict with environmental preservation.

16. “Average income is an important Criterion for Development”. Justify.

o Average income is useful to compare living standards, but it should be supplemented with
other indicators like education and health.

17. Compare the aspirational goals of a boy from a rich urban family and a girl from a rich
urban family.

o The boy may aspire for education and career growth, while the girl might face gender-related
barriers despite similar wealth.

18. Explain the meaning of HDI. Mention three components of measuring HDI.

o HDI stands for Human Development Index, which measures a country’s development based
on income, education, and life expectancy.

19. What do you understand by sustainability of development? What can be done to make
development sustainable?

o Sustainable development meets current needs without compromising the ability of future
generations. Reducing waste, using renewable energy, and protecting ecosystems can
promote sustainability.

20. Mention the differences between developed Countries and developing Countries.

o Developed countries have high per capita income, better healthcare, and education, while
developing countries face poverty, limited access to services, and slower economic growth.

CH-2 SECTORS OF INDIAN ECONOMY

1. Tertiary sector is not playing any significant role in the development of Indian economy”.
Do you agree? Give reasons in support of your answer.

o Disagree. The tertiary sector is significant as it includes services like education, healthcare,
and IT, contributing substantially to GDP and employment.

2. How is the tertiary sector different from other sectors? Illustrate with a few examples.

o The tertiary sector provides services rather than goods. Examples include banking, education,
and tourism, which differ from the primary (agriculture) and secondary (manufacturing)
sectors.

3. What do you understand by disguised unemployment? Explain with an example each from
the urban and rural areas.

o Disguised unemployment occurs when more people are employed than necessary. In rural
areas, this may be seen in agriculture, while in urban areas, it can appear in small retail
businesses.

4. In which sector are the terms of employment regular?

o Terms of employment are generally regular in the public sector and large private companies.

5. State any two activities which do not come under the primary sector.

o Manufacturing and service industries are not part of the primary sector, which deals with
natural resource extraction.

6. How is GDP calculated?

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o GDP is calculated by adding up all the goods and services produced in a country within a
year.

7. Why is tertiary sector also called ‘service sector’?

o It is called the service sector because it provides services like healthcare, education, and
transportation rather than producing goods.

8. What do you mean by ‘Unorganised Sector’? Give two disadvantages of the unorganised
sector.

o The unorganised sector includes small-scale, informal businesses. Disadvantages include lack
of job security and poor working conditions.

9. Other than agriculture, in which sectors can underemployment occur?

o Underemployment can occur in sectors like construction, retail, and small manufacturing,
where workers’ skills are underutilized.

10. Explain the objective of implementing the MGNREGA 2005.

o The MGNREGA aims to provide employment and improve rural infrastructure, enhancing the
livelihood security of rural households.

11. How would income and employment increase if farmers were provided with irrigation and
marketing facilities?

o It would lead to increased agricultural productivity and income, creating more employment
opportunities in related sectors.

12. Distinguish between Public Sector and Private Sector.

o The public sector is owned and operated by the government, while the private sector is
owned by individuals or private entities.

13. Explain any five reasons for service sector growth in India.

o Rising income levels, increased urbanization, higher demand for healthcare and education,
growth of IT and telecommunications, and government initiatives.

14. “When a country develops, the contribution of primary sector declines and that of
secondary and tertiary sector increases”. Analyse the statement.

o As countries industrialize, the focus shifts from agriculture (primary) to manufacturing

(secondary) and services (tertiary), leading to economic diversification.

15. What are the various ways to provide employment opportunities in rural areas?

o Investing in infrastructure, improving agricultural techniques, supporting small businesses,

and implementing rural development programs can create jobs.

16. What are the different types of unemployment in India?

o Types include structural unemployment (mismatch of skills and jobs), seasonal

unemployment (due to seasonal work), and disguised unemployment (excess labor in rural
areas).

CH-3 MONEY AND CREDIT

1. How does money solve the problem of double coincidence of wants? Or How does Money
eliminate the need for double coincidence of wants?

o Money acts as a medium of exchange, allowing people to buy and sell without needing a
matching need from another party.

2. Explain with an example of your own.

o If I sell vegetables and need shoes, I don’t have to find a shoe seller who wants vegetables. I
can sell vegetables for money and use that to buy shoes.

3. How do banks mediate between those who have surplus money and those who need
money?
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o Banks collect deposits from savers and lend money to borrowers, thus acting as
intermediaries.

4. What is Cheque?

o A cheque is a written order directing a bank to pay a specific amount of money from the
account holder’s account to the payee.

5. Why is it difficult for poor to get loan from Banks?

o Poor people lack collateral, stable income, and credit history, making them less eligible for
loans from banks.

6. “Money in your pocket cannot buy all the goods and services that you may need to live
well.” Is it true or not? Elucidate.

o True. Money alone cannot provide services like education, healthcare, or a healthy
environment, which are necessary for a good life.

7. What is a ‘Debt Trap’?

o A debt trap occurs when a borrower is unable to repay a loan and borrows more to cover
previous debts, leading to a cycle of debt.

8. What do you mean by collateral?

o Collateral is an asset that a borrower offers to a lender to secure a loan, which can be seized
if the borrower defaults.

9. Sumit is using his money to buy assets like house, commercial land and machines. Write is
he actually doing?

o Sumit is investing in physical assets to increase his wealth.

10. How do the deposits with Banks become their source of income?

 Banks lend out deposits at a higher interest rate than they pay on savings, generating profit from the
difference.

11. Why one cannot refuse a payment made in rupees in India?

 Rupees are the legal tender of India, meaning they are recognized by the government as an official
medium of exchange.

12. “Banks are efficient medium of exchange”. Support the statement with argument.

 Banks provide a secure and efficient way to exchange money through various services like ATMs,
electronic transfers, and cheques.

13. State any three advantages of an ATM.

 Convenience, 24/7 access to money, and the ability to withdraw cash from different locations.

14. Explain any three loan activities of Banks in India?

 Banks offer personal loans, business loans, and home loans to individuals and enterprises.

15. Why do we need to expand formal sources of credit in India? Give three reasons.

 To reduce dependence on exploitative informal lenders, provide affordable credit, and promote
financial inclusion.

16. “Credit has its own unique role for development”. Justify the statement with arguments.

 Credit enables investment in businesses, education, and infrastructure, fostering economic growth and
development.

17. Explain the values which a borrower should observe for the proper use of loan taken.

 Borrowers should use loans responsibly for productive purposes, repay on time, and avoid excessive
borrowing.

18. Why are poor households still dependent on informal sources of credit?
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 Poor households lack access to formal financial institutions due to lack of collateral, credit history, and
stable income.

19. “Self help Groups” help borrowers to overcome the problem of lack of collateral.” Examine
the statement.

 Self Help Groups (SHGs) provide loans without collateral by pooling resources from group members,
thus enabling access to credit.

20. How do formal and informal sources of credit differ from each other?

 Formal sources like banks offer regulated loans with lower interest rates, while informal sources like
moneylenders charge higher interest and are unregulated.

21. How does RBI supervise banks?

 The RBI sets regulations, monitors financial stability, and ensures banks follow guidelines for lending
and liquidity.

22. Why is it necessary that banks and co-operatives increase their lending in rural areas?
Explain.

 To promote rural development, increase access to credit for farmers and small businesses, and reduce
dependency on informal sources.

CH-4 GLOBALISATION AND THE INDIAN ECONOMY

1. What do you understand by Globalisation? Explain in your own words.

o Globalisation is the process of increasing interconnectedness and interdependence among

countries through trade, investment, and cultural exchange.

2. What were the reasons for putting barriers to foreign trade and foreign investment by the
Indian government? Why did it wish to remove these barriers?

o Barriers were imposed to protect domestic industries and promote self-reliance. Removal was
aimed at integrating India into the global economy.

3. How would flexibility in labour laws help companies?

o Flexible labor laws would allow companies to hire and fire workers more easily, thus
increasing efficiency and profitability.

4. What are the various ways in which MNCs set up or control production in other countries?

o MNCs set up subsidiaries, joint ventures, or outsource production to low-cost countries,

thereby controlling production and supply chains.

5. Why do developed countries want developing countries to liberate their trade and
investment? What do you think should the developing countries demand in return?

o Developed countries want access to cheaper labor and markets. Developing countries should
demand fair trade practices and technology transfer in return.

6. “The impact of globalisation has not been uniform”. Explain this statement.

o Globalisation benefits some sectors and people, while others, especially in agriculture and
low-skill jobs, face challenges like job insecurity and income inequality.

7. How has liberalisation of trade and investment policies helped the globalisation process?

o It has led to an increase in foreign trade, investment, and the flow of technology, integrating
India more closely with the global economy.

8. How does foreign trade lead to integration of markets across countries? Explain with an
example other than those given here.

o Foreign trade allows countries to exchange goods and services, thus integrating markets. For
instance, the global demand for smartphones connects markets worldwide.