IMPORTANT QUESTIONS FROM ECONOMICS(PREVIOUS YEAR COMPILATION)

DEVELOPMENT

1 MARKS

1. Why is the primary sector also called as agriculture and related sector?

• Primary sector is also called agriculture sector because the main activity of these sector is agriculture
• the primary sector is related with the production of intermidiate goods and services requred to produce the final goods and services

2. Besides income mention two goals of development.

• better living standard
• self respect
• pollution free environment

3. Why does Kerala have a better human development ranking in comparison to that of Punjab? Give any one reason.

• sex ratio is favourable in Kerala
• Literacy rate is good in Kerala

4. Name any two things which are not be bought with currency.

• pollution free environment
• affection,love
• self respect

5. What is per capita income?

• Per capita income or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year.
• It is calculated by dividing the area's total income by its total population.

6. What is meant by double coincidence of wants?

• The double coincidence of wants mean that both the parties have to agree to sell and buy each other's commodity i.e. what a person desires to sell is exactly what the other person wishes to buy

7. Why has Kerala a low infant mortality rate?

• high literacy rate
• improvements in education and in the health care delivery system

8. Why is average income considered as a valuable criterion for development.Give one reason.

• Average income gives us an idea what an average person is likely to get out of the total national income.
• Average income is used to classify the countries into rich, poor or developing nations.
• Average income is used to make economic policies.

3 MARKS

1. Why are developmental goals different for different people.Explain with example.

• Development or progress does not mean one and same thing for every individual
• People seek things that are most important for them, i.e. things that can fulfil their aspiration or desires
• Development for a farmer might be proper irrigation facilities.
• For an urban youth, it may be employment.
• For a landless labourer, it may be land.
• For a girl, it might mean gender equality or more freedom

2. Why is total income not a useful measure for comparison between two countries?Explain reason.

• Because it does not gives a correct picture of a  country. With averages we cannot find differences and similarities among the two countries , two persons or two things.
• It is only used for comparing which is not enough.For example a student differs in health, talents , achievement's, studies. A healthiest student may not be the studious one.

3. What efforts should be made by a govt to increase its HDI?

• Investment in Education
• Investment in health
• Investment on skill,training

4. What is meant by Infant Mortality Rate? Suggest two measures to keep the Infant

Mortality Rate low.

• the ratio of number of infants (children below the age of 1yr) that die before the completion of 1yr in an area to the number of 1000 children born in that area is called infant mortality rate.
• better medical facilities
• medical camps in rural areas
• hospitals in every locality
• measures that ensure proper nutrition to all the pregnant mothers.

5 MARKS

1. In what respects is the criterion used by UNDP different from the criteria used by World bank.

•  UNDP uses the criteria of Human Development Index (HDI). It gives us a transparent and clear-cut information about the development of the population in that particular area. It measures the development of the people on the following basis:- Life expectancy, Literacy rate, Per Capita Income…
• While the World Bank uses only Per Capita Income to measure the development of the particular area as it also has many limitations with regard to the HDI such as it doesn't tell us about the life expectancy in that area and it also doesn't show us whether the people are educated in that area or no

2. Explain any five basis of comparison of economic development of different countries or states.

• Per capita income This is the total National Income (GDP) divided by the total population.
• Life expectancy at birth This is the number of years, a new born child is expected to live if subject to the mortality risks prevailing for the population concerned.
• Literacy rate This is the total percentage~of the population of an area at a particular time aged 7 yean or above, who can read and write with undemanding adeast one language.
• Net Attendance Ratio The total number of children enrolled in or attending primary school, as a percentage of total number of children of primary school age

3. What is meant by Gross Domestic Product? Explain the process to calculate the gross domestic product.

• Gross Domestic Product (GDP) is the total sum of the value of the final goods and services of the Primary, Secondary and Tertiary sectors of the economy of a country produced during a year.
• The counting of the various goods and services for calculating GDP can he understood by the following example
• Wheat and Hour are intermediate goods used for making final products like bread and biscuits. Intermediate products should not be counted in the figure of GDP. Biscuits and breads are the final products prepared using flour and other ingredients like sugar, salt, oil etc.
• Only the final products are reaching the actual consumer. The value of the intermediate products is already counted in the final products and if this is again counted, it will lead to double counting, causing an error in the estimation of GDP.

4. Beside money,what are the other factors on which the life of a person depends.

• Apart from money, people look for equal treatment.
• .People want freedom for growth and development.
• .People also want security.
• .People want respect of others.
• .They want equal political rights.
• .They may require environmental sustainability

ROLE OF TERTIARY SECTOE

1 MARKS

1. Why tertiary sector is called service sector?

• because it deals with providing services to all the sectors of the economy

2. What do you understand by underemployment?

• A situation when a person is willing to work at the existing wage rate,but he does not get work

3. What is hidden unemployment?

• Disguised unemployment in which it appears that the people are working,but the contribution of few members is zero

4. In which sector is natural product changed into forms through ways of manufacturing?

• Manufacturing

5. In which sector is seasonal and disguised unemployment prevalent in India?

• Rural/agricultural sector

3 MARKS

1. Highlight any 3 factors responsible for the growth of service sector in India?

• . In any country several basic services like transport, bank, insurance, educational institutions etc are required and the government has to take the responsibility for the provision of these services.
• The development of agriculture and industry lead to the development of services such as transport, trade, storage etc.
• As income level rises, certain section of people started demanding many services like eating out, tourism, private hospital etc.
• Certain new services such as those based on information and communication technology have become important and essential.

2. What historical changes have been brought about in the primary ,secondary and tertiary sectors of India?

• Primary Sector-. As the method of farming changed and the agricultural sector began to prosper production increased.
• Many people could not take up other activities.
• . It is the stage of the goods produced were natural products and most people employed in this sector.
• Secondary Sector -. Because of new methods of manufacturing were introduced, factories came up ang started expanding.
• . Farmers began to work in factories.
• . This sector slowly became the most important sector in the total production and employment.
• . Hence a shift had taken place. It means the importance of sectors had changed.
• Tertiary Sector -. In the past 100 years there has been another shift from secondary to tertiary sector in the developed countries.
• . The service has become the most important. in terms of total production.
• . Most of the working people also employed in the service sector. These are observed in the developed countries

3. Why is agriculture an activity of unorganized sector in India? Explain.

• In agricultural activities, wages paid to the labourers are lesser than the wages set by the government (as per the Minimum Wage Law).
• . Jobs in this sector are not permanent and many times farmer work by themselves or as hired labourers.
• . Farmers do not get any employment benefits such as insurance, medical allowance, etc. that the workers in an organized sector are entitled to.

4. How can tourism provide additional employment of lakhs of people? Explain.

• Tourism helps in generating more employment.
• It involves development of related industries like hotels for accommodation, food, entertainment, transportation  etc.
• It is also a field where locals can participate as they know their places better than any third party.  this way, tourism helps in generating employment

5. Compare the working conditions of organized and unorganized sectors in three points.

Organised sector	Unorganised sector
(i) Registered by the government. (ii) Follows rules and regulations given in various laws. (iii) Formal processes and procedures. (iv) Security of employment to workers. (v) Working hours fixed, overtime for extra hours of work. (vi) Workers get benefits like provident fund, gratuity, medical benefits, paid leave, etc.	(i) Outside the control of the government. (ii) Small and scattered units. (iii) Rules and regulations are not followed. (iv) Low-paid and irregular jobs. (v) High degree of insecurity. (vi) No provision for overtime, paid leave, holidays etc.

6. Name the sector that is the largest employer in India. Why does this sector produce only a quarter of the National GDP?

• The agricultural sector is the largest employer in the Indian economy.
• The average size of land holdings is very small in India.
• The small farms hamper the adoption of modern technology in agriculture that can enhance productivity.
• Lack of modern irrigation facilities also contribute to low productivity.
• . The system of providing financing and marketing agricultural activities in India is not sufficient. As a result, farmers may not be able to get loans to make investments.

7. Suggest any 3 measures for sustainable development.

• Controlling overuses and creating an awareness to provide sustainable development.
• Increased use of renewable resources.
• Less use of fossil fuels.
• Introduction of organic farming.
• Adopting measures to reduce global warming.

8. How can employment be created in secondary and tertiary sectors in India.

• to improve the educational and health standards of the labour force. Only in that case will they be able to do the more skill intensive jobs in these sectors.
• to improve the educational and health standards of the labour force. Only in that case will they be able to do the more skill intensive jobs in these sectors.
• it is necessary to improve the infrastructure in rural India to create more jobs in these sectors

9. How many days of guaranteed employment are provided under National Rural

Employment Guarantee Act 2005?

• 100 days

5 MARKS

1. Explain any five ways to increase the income and employment in the rural and semi rural areas.

• .The government can lease lands for farming. This will increase the employment, as well as it will increase the crop production.
• The central government can introduce more employment schemes, like the earlier scheme of employment for 100 days.
• The government must take responsibility to give a job for every graduate.
• The rural people must given a chance to work in government jobs, i.e., the graduates of the rural area; by allocating reservations for them.
• By making awareness of different jobs, to the rural people. This will make them to search for job, and the reservations will increase their income

2. Suggest any 5 measures to reduce unemployment.

• to control the rising population of our country.
• . The quality of Indian education should be improve
• . The quality of Indian education should be improve
• Vocational training should be provided.
• . Rapid Industrialization should be created.
• Development of the rural areas

MONEY AND CREDIT

1 MARKS

1. What are terms of credit?

• Interest rate- The borrower has to pay a sum of money as interest along with the principal amount.
• .Collateral- It is an asset that the borrower owns and uses this as a guarantee to the lender until the loan is repaid.
• Documentation- Proper documents of borrowing with all the terms and conditions must be ..

2. What is investment?

• the act of putting money, effort, time, etc. into something to make a profit or get a return

3. Why do banks keep a small proportion of the deposits as cash with themselves?

• To pay the depositors who might come to withdraw money.

4. The currency notes on behalf of the Central Government are issued by whom?

• Reserve bank Of India

5. Professor Muhammad Yunus is the founder of which  bank?

• Bangladesh Grameen bank

6. How does money act as a medium of exchange?

• Money acts as an effective medium of exchange because it serves as a common mode through which people can buy and sell according to their convenience.
• The use of money did away with the barter system and ended the problem of double coincidence of wants

7. Name an informal source of credit for rural households?

• Moneylenders

8. State 2 secondary functions of money?

• it is a proper medium of exchange;
• a unit of account;
• a store of value; and,
• occasionally a standard of deferred payment

9. With which form of system is the modern form of currency linked?

• Banking system

3 marks

10. How do banks mediate between those who have surplus  money and those who need money?

• The deposits with banks become their source of income. This is because money

deposited by depositors is used by banks for giving loans to persons in need of credit. Banks charge high rate of interest on the money they lend. However, the interest provided by banks to their depositors is quite low. It is the difference in these two interest rates that forms the income of banks.

11. Explain with example how credit plays a vital role for developmet?

• Supplies the borrower with money for fulfilling his needs
• It is positive when loan is taken for increasing the production and is paid in time
• If borrower fails to repay,he will be caught in debt trap.

12. Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Explain.

• .It will also prevent people from getting exploited through borrowings from informal sources.
• . To serve as building blocks for rural households.
• . This will help people to start up their small business, or trade in  certain goods.
• . It can also help farmers to expand cultivation, to diversify their production.
• People can also set up small scale industries. i. It can certainly be a an engine of growth

13. How are the deposits with the banks beneficial for individual as well as for the nation?Explain with examples.

• bank deposits are beneficial for the individual as

                     1. his amount is safe and secure

                     2. he gets an annual or monthly interest which adds on to  his amount

• this increases his savings and in turn his standard of living. as a result the HDI rank of the nation increases and also the per capita income. Thus the national average income increases, increasing the national economy.

14. Why is modern currency accepted as a medium of exchange without any use of its own?Find out the reason.

• it is authorised by Government of the country.
• It is standardised

15. Differentiate between investment and foreign investment.

• The money which is used by assets like land, machinery, buildings is called investment. It can be by both domestic and foreign sources.
• Foreign investment refers to an investment made in a country by a company or any individual of another country in a business or production..

5 marks

1. What are Self Help groups?Describe any 4 advantages of SHG for the poor?

• A self help group is a financial support group that is formed at the village level. It

consists of around 15-20 members that meet and save regularly

• Members meet and save money regularly according to their ability.
• Saves the group from the debt trap.
• Members can take loans at low rate of interest.
• After a year or two with regular savings they can avail loan for self- employment from the bank.
• It overcomes the problems of lack of collateral to take formal loans.
• Help the women to become financially self-reliant, discuss and acton variety of social issues.

2. How do banks play an important role in the economy of India? Explain.

• They provide cheap and affordable credit to the poor people which is essential for country's development.
• They provide a safe way of depositing and saving money to the people.
• They help reduce poverty by providing employment opportunities to the people who have less skills and low capital
• Banks give people the facility of payment of an amount through cheques. This reduces the chances of money (in cash) being lost or stolen.

3. What are the functions of money?

• unit of account
• standard of deferred payments
• store of value
• liquidity of money

Globalisation

4. What is a Trade Barrier?

• Tax on imports.

1. Why had the Indian Government put barrier to foreign trade and foreign investment after independence? State any one reason.

• In order to give protection to the local producers

2. What is the major benefit of joint production between a local company and an MNC?

• MNC can bring latest technology in the production

3. Due to which reason the latest models of different items are available within our reach?

• Due to globalisation

3 marks

1. How would flexibility in labour laws help companies?

• Flexibility in labour laws will help companies in being competitive and progressive.
• flexibility in labour laws can help the companies to decrease their production cost by employing labours only for short period of time when there is need instead of employing them for long period of time or yearly basis.
• By easing up on labour cost,they maximise their profit

2. "Information and Communication technology has played a major role in spreading out production of services across countries." Justify the statement with examples.

• Modern technological devices like the Internet helps to promote products online.
• Communication system's development is visible today in the form of several e-commerce sites that are available to day. Online shopping has become a trend. People not only get aware of these service and products that are available at a place but can avail such products

3. How did Cargill foods become the largest producer of edible oils in India?

• Cargill foods a very large American MNC , has bought over smaller Indian companies such as Parakh Foods and expanded the range of its production of edible oils in India
• It had become the largest producer of edible oils in India.
• It refines, processes and markets various edible oils for the food industry

1. What is Globalisation?

• Rapid integration between countries.
• More goods and services moving between countries.
• Movement of people between countries for jobs, education etc.

2. Explain the three conditions that determine MNC's setting up production in other countries.

• Proximity to the market.
• Availability of labour at low cost.
• Government policies.
• Availability of infrastructure.

3. Explain the role of government to make globalisation fair.

• Government must protect the interests not only of the rich and powerful but of all the people in the country.
• They must ensure that labour laws are properly implemented and workers get their rights.
• Support small producers till they become strong enough to compete e.g. by using trade barriers.
• It can align with other developing countries to fight domination of developed countries in WTO.

4. How do the large companies manipulate the market? Explain with examples.

• . Big companies can manipulate the markets by using unnecessary means of advertisements.
• They even buy out small companies or make latter work with them so they do not have any competitor who produces the same produce.
• They even criticize other companies saying that their produce is better than the rest
• . Big companies also sell their produce at lower cost so that people get used to their produce

5. How do MNCs manage to keep the cost of production of their goods low?Explain with examples.

• MNCs set-up their offices and factories in region where cost of skilled and semiskilled labour and other resources in low
• they also set-up their production centre near market,
• due to low cost of product (i.e., low labour cost, low raw material prices) MNCs set-up their factories in developing countries like India, China, Vietnam.
• Similarly, the site of assembly are located in Mexico, East Europe due to their proximity to the market of USA and Western Europe, respectively.

6. State any 2 functions of WTO

• Administering trade agreements.
• handling trade disputes
• forum for trade negotoations
• monitoring national trade policies
• Assistance for developing countries.

5 marks

7. How have our markets been transformed in recent years?Explain with examples.

• There is availability of wide range of choice of goods and services.
• Products are of better quality.
• Good quality products available at low costs.
• We can easily avail the latest products with advance technology, e.g. Digital cameras, mobile phones, etc. There products are affordable as well as. accessible

8. Globalization will continue in the future .Can you imagine what the world would be like in 20 years  from now?Give reasons for your answer.

• The world would be more and more globalised in the future
• There would be global connectivity
• Immense network of trade and transport would exist

9. Globalization has been advantageous to the consumers as well  as producers.Support the statement with suitable examples./

           Globalisation and greater competition among producers has been advantageous to consumers.’’ Support   

           the statement with examples.

• Companies have invested in new technology to raise their production quality to compete with the MNCs, thus, ensuring that consumers get better quality products and be satisfied.
• Indian companies have collaborated with MNCs to produce more functional and advanced products, thus, benefiting the consumers.
• Consumer can enjoy improved quality at lower prices for several products. This has led to higher standard of living.
• Due to competition the prices of various products had come down.
• The well off section of people in urban areas got much of the benefits of globalisation.

1. Describe the major problems created by the globalization for a large number of small producers and workers.

• small scale industries had to shut down
• unemployment, as inability to cope with MNC
• Affected the lives of workers.
• Small producers either had to compete or perish

Consumer Rights

1. When was COPRA enacted?

1986

2. Which law was enacted by the govt in October 2005?

• RTI(Right to Information)

3. When is National Consumers day celebrated?

• December 24

4. Which certification is maintained for standardization of edible goods?

• Agmark

5. The district level court deals with the cases involving what claims?

• Less that 20 lakhs

6. Which logo would you like to see for purchasing electrical goods?

• ISI

7. Suppose your parents want to purchase Gold jewellery along with you; then which logo  will you look for on the jewellery?

• Hallmark

8. If you are not interested to buy a brush with tooth-paste but shopkeeper denied to sell tooth-paste only. In this case which consumer right is being violated by the seller?

• right to choose is violated.

9. Which logo will you like to see on the electric heater to be sure of its quality?

• ISI

10. Suppose you have to buy a packed bottle for drinking water in your journey. Which logo will you like to see to be sure about its quality?

• I would like to see FPO mark on the bottle in order to be sure about water quality.

11. What is adulteration?

• Adulteration refers to mixing of  inferior and harmful quality materials with food or drink intended to be sold

12. What do you mean by consumers right to seek redressal?

• A consumer has the right to appeal in the consumer court against unfair trade practices and exploitation

3 marks

1. What factors gave  birth to the consumer movement in India?/How did Consumer movement originate as a social force in India?Explain?

• Dissatisfaction of consumers,
• There was no legal system available for consumers to protect them from exploitation
• It was presumed that it was the responsibility of consumers to be careful
• Till 1986, consumer organisations were highlighting issues by writing articles in newspapers and magazines about these bad practices of merchants.
• In 1986, the Government of India enacted the Consumer Protection Act, also known as COPRA. This was a major step in the Consumer Movement in India.

2. Explain with an example how you can use the right to seek redressal.

• rights to seek redressal is when a customer gets a damaged product ,then the customer has the rights to seek redressal.
• for example,if a person buys some product and is not satisfied with its quality as it may be damaged or it was an unfair trade practice,he/she can replace the product,get a free repair,or get a refund of money for it

5 marks

3. Why are rules and regulations required In the marketplace? Explain.

• to protect the consumers against exploitation by the producers, sellers and service provider
• . They often indulge in unfair trade practices and provide false information about a particular service or product.
• . Most of consumers are unaware about their rights and they are often deceived by the suppliers.
• There is no legal system available to consumers to protect them from exploitation in the marketplace.

4. What is standardization of products? Mention any two organizations responsible for the standardization of products in India.

• Measures taken by the government to protect the consumers from lack of quality and varying standard of goods.
• ISI/BIS
• Agmark
• Hallmark

5. Consumers have the right to be informed about goods and services they purchase .Explain its three advantages.

• Compensation and replacement.
• Action against malpractices by the shopkeepers.
• Facility to protest and campaign on manipulation of prices.
• Right to information about government processes.

6. Describe any 3 features of consumer forum?

• It provides a guidance towards the rights of consumer care
• It has been established for three levels
• Consumer forum has to solve the cases in three month