CLASS - 10th

Class 10 Economics – Chapter 1: Development Social Science

Chapter - 1 (Development) Economics

Exercises

1. Development of a country can generally be determined by

(i) its per capita income
(ii) its average literacy level
(iii) health status of its people
(iv) all the above

(iv) all the above

2. Which of the following neighbouring countries has better performance in terms of human
development than India?
(i) Bangladesh
(ii) Sri Lanka
(iii) Nepal
(iv) Pakistan

(ii) Sri Lanka

3. Assume there are four families in a country. The average per capita income of these
families is Rs 5000. If the income of three families is Rs 4000, Rs 7000 and Rs 3000
respectively, what is the income of the fourth family?
(i) Rs 7500
(ii) Rs 3000
(iii) Rs 2000
(iv) Rs 6000

(iv) Rs 6000

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

Answer

Per Capita Income is the main criterion used by the World Bank in classifying different
countries. The limitation of this criterion are:

 It doesn’t show distribution of income.

 It also ignores other factors such as infant mortality rate, literacy level, healthcare, etc.

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

Answer

World bank only uses per capita income for measuring development while UNDP uses many
other factors like infant mortality, healthcare facility education level which help in improving
the quality of life and helps in making the citizens more productive.

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Class 10 Economics – Chapter 1: Development Social Science

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

Answer

We use averages because they are useful for comparing differing quantities of the same
category. For example, to compute the per capita income of a country, averages have to be
used because there are differences in the incomes of diverse people. However, there are
limitations to the use of averages. This does not show distribution of thing between people.
For an example, if a country has very high per capita income then we can’t say that citizen
living in that country are very rich because we are not knowing about the distribution of
wealth in that country. Some people might be richer while other people are very poorer in
that country.

7. Kerala, with lower per capita income 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.

Answer

No, I do not agree with the statement that per capita income is not a useful criterion at all.
Kerala, with lower per capita income has a better human development ranking than Punjab
because, human development ranking is determined using a combination of factors such as
health, education, and income. So, this does not imply that per capita income is not useful.
Rather, per capita income is one of the development factors and can not be neglected. The
World Bank uses per capita income as the criterion for measuring development and
comparing states. But this criterion has certain limitations because of which determination of
Human Development Index (HDI) is done using this criterion along with some other
development factors like health, education etc.

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

Answer

The present sources of energy that are used by the people of India are electricity, coal, crude
oil, cow dung and solar energy. Other possibilities fifty years from now, could include
ethanol, bio-diesel, nuclear energy and a better utilisation of wind energy, especially with the
imminent danger of oil resources running out.

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

Answer

The issue of sustainability is important for development because development must be in

tandem with the future. If natural resources are not sustained, then development will stagnate
after a point of time. Exploiting resources unethically will ultimately undo the development
that a country may have achieved. This is because in the future, those resources will not be
available for further progress.

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Class 10 Economics – Chapter 1: Development Social Science

10. “The Earth has enough resources to meet the needs of all but not enough to satisfy the
greed of even one person”. How is this statement relevant to the discussion of development?
Discuss.

Answer

“The Earth has enough resources to meet the needs of all but not enough to satisfy the greed
of even one person”. This statement is relevant to the discussion of development since both
resources and development go hand in hand. For the sustainability of development, the
maintenance of resources is also crucial. As the statement claims, the Earth has enough
resources- renewable and non-renewable to satisfy everyone’s needs; however, these need to
be used with a view to keep the environment protected and clean so that a balance of
production and use is maintained, and shortages are avoided.

11. List a few examples of environmental degradation that you may have observed around
you.

Answer

Few examples of environmental degradation:

 Deforestation
 Soil erosion
 Falling levels of ground water
 Depletion of the ozone layer and combustion from automobiles causing extreme air
pollution
 Water Pollution

12. For each of the items given in Table 1.6, find out which country is at the top and which is
at the bottom.

TABLE 1.6 SOME DATA REGARDING INDIA AND ITS NEIGHBOURS FOR 2004

Country Per Capita Life Literacy Rate Gross HDI

Incomein Expectancy for 15+ yrs Enrolment Rank in

US$ at birth population Ratio for three the

levels world

Sri Lanka 4390 74 91 69 93

India 3139 64 61 60 126

Myanmar 1027 61 90 48 130

Pakistan 2225 63 50 35 134

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Class 10 Economics – Chapter 1: Development Social Science

Nepal 1490 62 50 61 138

Bangladesh 1870 63 41 53 137

Answer

(i) Per Capita Income in US$: Top country – Sri Lanka; Bottom country – Myanmar

(ii) Life Expectancy at birth: Top country – Sri Lanka; Bottom country – Myanmar

(iii) Literacy Rate for 15+ years population: Top country – Sri Lanka; Bottom country –
Bangladesh

(iv) Gross Enrolment Ratio for three levels: Top country – Sri Lanka; Bottom country –
Pakistan

(v) HDI Rank in the world: Top country – Sri Lanka; Bottom country – Nepal

13. The following table shows the proportion of undernourished adults in India. It is based on
a survey of various states for the year 2001. Look at the table and answer the following
questions.

State Male (%) Female (%)

Kerala 22 19

Karnataka 36 38

Madhya Pradesh 43 42

All Sates 37 46

(i) Compare the nutritional level of people in Kerala and Madhya Pradesh.

(ii) Can you guess why around 40 per cent of people in the country are undernourished even
though it is argued that there is enough food in the country? Describe in your own words.

Answer

(i) The nutritional level of people of Kerala is quite higher than the people – both males
and females of Madhya Pradesh. Their ratio of the under-nourished is less than that of
Madhya Pradesh.

(ii) There is enough food in the country, even then 40% of the people in the country
are undernourished because:

 A large number of people are so poor that they cannot afford nutritious food.

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Class 10 Economics – Chapter 1: Development Social Science

 In most of the states, the Public Distribution System (PDS) does not function
properly and the poor people cannot get cheap food items.
 There is lack of educational and health facilities in many parts of the country. So
many people remain backward and poor. As such, they are unable to get nutritious
food.

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 CLASS - 10th
Class 10 Economics
Chapter–-Chapter 2: Sectors
2 (Sector of Theof the Indian
Indian Economy Economics
Economy) Social Science

Excercises

1. Fill in the blanks using the correct option given in the bracket:

(i) Employment in the service sector _________ increased to the same extent as production.
(has / has not)

(ii) Workers in the _________ sector do not produce goods. (tertiary / agricultural)
(iii) Most of the workers in the _________ sector enjoy job security. (organised /
unorganised)
(iv) A _________ proportion of labourers in India are working in the unorganised sector.
(large / small)
(v) Cotton is a _________ product and cloth is a _________ product. (natural /
manufactured)
(vi) The activities in primary, secondary and tertiary sectors are _________. (independent
/interdependent)

Answer

(i) has not

(ii) tertiary
(iii) organised
(iv) large
(v) natural
(vi) interdependent

2. Choose the most appropriate answer.

(a) The sectors are classified into public and private sector on the basis of:
(i) employment conditions
(ii) the nature of economic activity
(iii) ownership of enterprises
(iv) number of workers employed in the enterprise

(iii) ownership of enterprises

(b) Production of a commodity, mostly through the natural process, is an activity in

______________ sector.
(i) primary
(ii) secondary
(iii) tertiary
(iv) information technology

(i) primary

(c) GDP is the total value of _____________ produced during a particular year.
(i) all goods and services
(ii) all final goods and services

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

(iii) all intermediate goods and services

(iv) all intermediate and final goods and services

(ii) all final goods and services

(d) In terms of GDP the share of tertiary sector in 2003 is _________

(i) between 20 per cent to 30 per cent
(ii) between 30 per cent to 40 per cent
(iii) between 50 per cent to 60 per cent
(iv) 70 per cent

(iii) between 50 per cent to 60 per cent

3. Match the following:

Problems faced by farming sector Some possible measures

1. Unirrigated land (a) Setting up agro-based mills

2. Low prices for crops (b) Cooperative marketing

societies

3. Debt burden (c) Procurement of food grains by

government

4. No job in the off season (d) Construction of canals by the

government

5. Compelled to sell their grains to the local traders (e) Banks to provide credit with

soon after harvest low interest

Answer

Problems faced by farming sector Some possible measures

1. Unirrigated land (d) Construction of canals by the

government

2. Low prices for crops (c) Procurement of food grains by

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

government

3. Debt burden (e) Banks to provide credit with

low interest

4. No job in the off season (a) Setting up agro-based mills

5. Compelled to sell their grains to the local traders (b) Cooperative marketing

soon after harvest societies

4. Find the odd one out and say why.

(i) Tourist guide, dhobi, tailor, potter

(ii) Teacher, doctor, vegetable vendor, lawyer
(iii) Postman, cobbler, soldier, police constable
(iv) MTNL, Indian Railways, Air India, SAHARA Airlines, All India Radio

Answer

(i) Tourist guide

He is appointed by the government, while dhobi, tailor and potter belong to the private
sector.

(ii) Vegetable vendor

His is the only profession that does not require a formal education.

(iii) Cobbler
The rest are workers in the public sector, while his profession is part of the private sector.

(iv) SAHARA Airlines

It is a private enterprise, while the rest are government undertakings.

5. A research scholar looked at the working people in the city of Surat and found the
following.

Place of work Nature of Percentage of

employment working people

In offices and factories registered with the Organised 15

government

Own shops, office, clinics in marketplaces with – 15

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

formal license
People working on the street, construction – 20

workers, domestic workers

Working in small workshops usually not – –

registered with the government

Complete the table. What is the percentage of workers in the unorganised sector in this
city?

Answer
Place of work Nature of Percentage of

employment working people

In offices and factories registered with the Organised 15

government

Own shops, office, clinics in market places with Organised 15

formal license

People working on the street, construction Unorganised 20

workers, domestic workers

Working in small workshops usually not Unorganised 50

registered with the government

The percentage of workers in the unorganised sector in this city is 70%.

6. Do you think the classification of economic activities into primary, secondary and tertiary
is useful? Explain how.

Answer

The classification of economic activities into primary, tertiary and secondary is useful on
account of the information it provides on how and where the people of a country are
employed. also this helps in ascertaining as to which sector of economic activity contributes
more or less to the country’s GDP and per capita income.
If the tertiary sector is developing much faster than the primary sector, then it implies that

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

agriculture is depleting, and the government must take measures to rectify this. The
knowledge that the agricultural profession is becoming unpopular or regressive can only
come if we know which sector it belongs to. Hence it is necessary to classify economic
activities into these there sectors for smooth economic administration and development.

7. For each of the sectors that we came across in this chapter why should one focus on
employment and GDP? Could there be other issues which should be examined? Discuss.

Answer

For each of the sectors that we came across in this chapter, one should focus on
employment and GDP because these determine the size of a country’s economy. A focus on
employment and GDP helps determine two important things- per capita income and
productivity. Hence, in each of the three sectors, employment rate and status as well as its
contribution to the GDP help us understand how that particular sector is functioning and
what needs to be done to initiate further growth in it.

Yes, the other issues which should be examined are –

 Balanced regional development
 Equality in income and wealth among the people of the country.
 How to eradicate poverty
 Modernization of technology
 Self-reliance of the country
 How to achieve surplus food production in the country.

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

Answer

The tertiary sector different from other two sectors. This is because other two sectors
produce goods but, this sector does not produce goods by itself. But the activities under this
sector help in the development of the primary and secondary sectors. These activities are an
aid or support for the production process. For example, transport, communication, storage,
banking, insurance, trade activities etc. For this reason this sector is also known as service
sector.

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

Answer

Disguised Unemployment is a kind of unemployment in which there are people who are
visibly employed but are actually unemployed. This situation is also known as Hidden
Unemployment. In such a situation more people are engaged in a work than required.
For example:

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

 In rural areas, this type of unemployment is generally found in agricultural sector like
– in a family of 9 people all are engaged in the same agricultural plot. But if 4 people
are with drawn from it there will be no reduction in output. So, these 4 people are
actually disguisedly employed.
 In urban areas, this type of unemployment can be seen mostly in service sectors
such as in a family all members are engaged in one petty shop or a small business
which can be managed by less number of persons.

11. Distinguish between open unemployment and disguised unemployment.

Answer

Open Unemployment Disguised unemployment

When a country’s labour force do not This is a kind of unemployment in which there

get opportunities for adequate are people who are visibly employed but actually

employment, this situation is called they don’t have full employment. In such a

open unemployment. situation more people are engaged in a work

than required.

This type of unemployment is generally This type of unemployment is generally found in

found in the industrial sector of our unorganized sector where either work is not

country. This is also found among the constantly available or too many people are

landless agricultural labourers in rural employed for the same work that does not

areas. require so many hands.

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

Answer

No, I do not agree with the statement that tertiary sector is not playing any significant role
in the development of Indian economy. The tertiary sector has contributed vastly to the
Indian economy, especially in the last two decades. In the last decade, the field of
information technology has grown, and consequently, the GDP share of the tertiary sector
has grown from around 40% in 1973 to more than 50% in 2003.

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

13. Service sector in India employs two different kinds of people. Who are these?

Answer

The service sector in India employs the following two different kinds of people. They are:

 The people involved in the services that may directly help in the production of
goods. For example, people involved in the transportation, storage, communication,
finance etc.
 The people involved in such services that may not directly help in the production of
goods e.g. teachers, doctors, barbers, cobblers lawyers etc. They may be termed as
ancillary workers means those who give services to the primary service providers.

14. Workers are exploited in the unorganised sector. Do you agree with this view? Give
reasons in support of your answer.

Answer

Yes, workers are exploited in the unorganized sector. This would be clear from the following
points:

 There is no fixed number of working hours. The workers normally work 10 – 12 hours
without paid overtime.
 They do not get other allowances apart from the daily wages.
 Government rules and regulations to protect the labourers are not followed there.
 There is no job security.
 Jobs are low paid the workers in this sector are generally illiterate, ignorant and
unorganized. So they are not in a position to bargain or secure good wages.
 Being very poor they are always heavily in debt. So, they can be easily made to
accept lower wages.

15. How are the activities in the economy classified on the basis of employment conditions?

Answer

On the basis of employment conditions, the activities in the economy are classified into
organized and unorganized sectors.

 Organized Sector This sector covers those enterprises which are registered by the
government and have to follow its rules and regulations. For example, Reliance
Industries Ltd., GAIL etc.
 Unorganized Sector It includes those small and scattered units which are largely
outside the control of the government. Though there are rules and regulations but
these are never followed here. For example, casual workers in construction, shops
etc. In this sector there is no job security and the conditions of employment are also
very tough.

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

16. Compare the employment conditions prevailing in the organised and unorganised
sectors.

Answer

The employment conditions prevailing in the organised and unorganised sectors are vastly
different. The organised sector has companies registered with the government and hence, it
offers job security, paid holidays, pensions, health and other benefits, fixed working hours
and extra pay for overtime work. On the other hand, the unorganised sector is a host of
opposites. There is no job security, no paid holidays or pensions on retirement, no benefits
of provident fund or health insurance, unfixed working hours and no guarantee of safe work
environment.

17. Explain the objective of implementing the NREGA 2005.

Answer

The objective of implementing the NREGA 2005 are:

 To increase the income and employment of people.

 Every state/region can develop tourism, regional craft, IT etc. for additional
employment.
 The central government made a law implementing the right to work in 200 districts.
 NREGA aims to provide employment of 100 days. If it fails to do so, it will give
unemployment allowances to the people.

19. Discuss and fill the following table giving one example each from your area.

Well-managed organisation Badly-managed organisation

Public sector

Private sector

Answer

Well-managed organisation Badly-managed organisation

Public sector Delhi Metro Rail Corporation Air India

Private sector Reliance Mobile Satyam

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

20. Give a few examples of public sector activities and explain why the government has
taken them up.

Answer

A few examples of public sector activities are provision of water, electricity and some modes
of transport. The government has taken these up because water and power are needed by
everyone. If the work of providing electricity and water is left to private enterprises, the
latter might exploit this opportunity and sell these at rates which the masses cannot afford.
Hence, to ensure that basic amenities like water and power are available for all, the
government supplies these at low and affordable rates.

21. Explain how public sector contributes to the economic development of a nation.

Answer

In the following ways Public sector contributes to the economic development of a nation:

 It promotes rapid economic development through creation and expansion of

infrastructure.
 It creates employment opportunities.
 It generates financial resources for development.
 It is ensuring equality of income, wealth and thus, a balanced regional development.
 It encourages development of small, medium and cottage industries.
 It ensures easy availability of goods at moderate rates.
 Contributes to community development i.e. to the Human Development Index (HDI)
via health and educational services.

22. The workers in the unorganised sector need protection on the following issues: wages,
safety and health. Explain with examples.

Answer

The workers in the unorganised sector need protection:→ Wages: Labourers who are
employed as repair person, vendor etc. do not have fixed income. They nearly manage to
earn their living. They are not employed all through the year.

 Safety: Workers in unorganized sector are not provided with safe drinking water or
clean environment. Eg., Working in mining, chemical industries is hazardous.
 Health: Leave not granted in case of sickness. Medical facilities are not offered, Eg.,
Construction workers.

23. A study in Ahmedabad found that out of 15,00,000 workers in the city, 11,00,000
worked in the unorganised sector. The total income of the city in this year (1997-1998) was
Rs 60,000 million. Out of this Rs 32,000 million was generated in the organised sector.
Present this data as a table. What kind of ways should be thought of for generating more
employment in the city?

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

Answer

– Organised Sector Unorganised Sector Total

No. of workers 4,00,000 11,00,000 15,00,000

Income (Rs) 32,000 million 28,000 million 60,000 million

It is clear that while a larger portion of workers is working in the unorganized sector, the per
capita earning of those in the organized sector is more. The government should encourage
the entrepreneurs in the unorganized sector to change them into the organized sector.
Moreover, government should introduce some incentives so that more industries could be
opened up in the organized sector.

24. The following table gives the GDP in Rupees (Crores) by the three sectors:

Year primary secondary tertiary

1950 80,000 19,000 39,000

2000 3,14,000 2,80,000 5,55,000

(i) Calculate the share of the three sectors in GDP for 1950 and 2000.
(ii) Show the data as a bar diagram similar to Graph 2 in the chapter.
(iii) What conclusions can we draw from the bar graph?

Answer

(i) In 1950,

primary sector = 57.97%, secondary sector = 13.77%, tertiary sector = 28.26%

In 2000,
primary sector = 27.33%, secondary sector = 24.37%, tertiary sector = 48.30%(ii)

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Class 10 Economics – Chapter 2: Sectors of the Indian Economy Social Science

(iii) We can draw the conclusion that the share of the tertiary sector in the GDP has almost
doubled, while that of the primary sector has almost halved. The secondary sector has
grown by about 10% in the last five years.

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Class 10 Economics – Chapter 3: CLASS - 10th
Money and Credit Social Science
Chapter - 3 (Money and Credit) Economics
Exercises

1. In situations with high risks, credit might create further problems for the borrower.
Explain.

Answer

In situations with high risks, credit might create further problems for the borrower. This is
also known as a debt-trap. Taking credit involves an interest rate on the loan and if this is
not paid back, then the borrower is forced to give up his collateral or asset used as the
guarantee, to the lender. If a farmer takes a loan for crop production and the crop fails, loan
payment becomes impossible. To repay the loan the farmer may sell a part of his land
making the situation worse than before. Thus, in situations with high risks, if the risks affect
a borrower badly, then he ends up losing more than he would have without the loan.

2. How does money solve the problem of double coincidence of wants? Explain with an
example of your own.

Answer

In a barter system where goods are directly exchanged without the use of money, double
coincidence of wants is an essential feature. By serving as a medium of exchanges, money
removes the need for double coincidence of wants and the difficulties associated with the
barter system. For example, it is no longer necessary for the farmer to look for a book
publisher who will buy his cereals at the same time sell him books. All he has to do is find a
buyer for his cereals. If he has exchanged his cereals for money, he can purchase any goods
or service which he needs. This is because money acts as a medium of exchange.

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

Answer

Banks keep small portion deposits as cash (15%) for themselves (to pay the depositors on
demand). They use the major portion of the deposits to extend loans to those who need
money. In this way banks mediate between those who have surplus money and those who
need money.

4. Look at a 10 rupee note. What is written on top? Can you explain this statement?

Answer

“Reserve Bank of India” and “Guaranteed by the Government” are written on top.
In India, Reserve Bank of India issues currency notes on behalf of the central government.
The statement means that the currency is authorized or guaranteed by the Central
Government. That is, Indian law legalizes the use of rupee as a medium of payment that can
not be refused in setting transaction in India.

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Class 10 Economics – Chapter 3: Money and Credit Social Science

5. Why do we need to expand formal sources of credit in India?

Answer

We need to expand formal sources of credit in India due to:→ To reduce dependence on
informal sources of credit because the latter charge high interest rates and do not benefit
the borrower much.

 Cheap and affordable credit is essential for country’s development.

 Banks and co-operatives should increase their lending particularly in rural areas.

6. What is the basic idea behind the SHGs for the poor? Explain in your own words.

Answer

The basic behind the SHGs is to provide a financial resource for the poor through organizing
the rural poor especially women, into small Self Help Groups. They also provide timely loans
at a responsible interest rate without collateral.
Thus, the main objectives of the SHGs are:

 To organize rural poor especially women into small Self Help Groups.
 To collect savings of their members.
 To provide loans without collateral.
 To provide timely loans for a variety of purposes.
 To provide loans at responsible rate of interest and easy terms.
 Provide platform to discuss and act on a variety of social issues such education,
health, nutrition, domestic violence etc.

7. What are the reasons why the banks might not be willing to lend to certain borrowers?

Answer

The banks might not be willing to lend certain borrowers due to the following reasons:

 Banks require proper documents and collateral as security against loans. Some
persons fail to meet these requirements.
 The borrowers who have not repaid previous loans, the banks might not be willing to
lend them further.
 The banks might not be willing to lend those entrepreneurs who are going to invest
in the business with high risks.
 One of the principle objectives of a bank is to earn more profits after meeting a
number of expenses. For this purpose it has to adopt judicious loan and investment
policies which ensure fair and stable return on the funds.

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Class 10 Economics – Chapter 3: Money and Credit Social Science

8. In what ways does the Reserve Bank of India supervise the functions of Banks? Why is this
necessary?

Answer

The Reserve Bank of India supervises the functions of banks in a number of ways:

 The commercial banks are required to hold part of their cash reserves with their RBI.
RBI ensures that the banks maintain a minimum cash balance out of the deposits
they receive.
 RBI observes that the banks give loans not just to profit making businesses and
traders but also to small cultivators, small scale industries, small borrowers etc.
 The commercial banks have to submit information to the RBI on how much they are
lending, to whom, at what interest rate etc.
This is necessary to ensure equality in the economy of the country and protect
especially small depositors, farmers, small scale industries, small borrowers etc. In
this process RBI also acts as the lender of the last resort to the banks.

9. Analyse the role of credit for development.

Answer

Cheap and affordable credit plays a crucial role for the country’s development. There is a
huge demand for loans for various economic activities. The credit helps people to meet the
ongoing expenses of production and thereby develop their business. Many people could
then borrow for a variety of different needs. They could grow crops, do business, set up
industries etc. In this way credit plays a vital role in the development of a country.

10. Manav needs a loan to set up a small business. On what basis will Manav decide
whether to borrow from the bank or the moneylender? Discuss.

Answer

Manav will decide whether to borrow from the bank or the money lender on the basis of
the following terms of credit:

 Rate of interest
 Requirements availability of collateral and documentation required by banker.
 Mode of repayment.
 Depending on these factors and of course, easier terms of repayment, Manav has to
decide whether he has to borrow from the bank or the moneylender.

11. In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
(a) Why might banks be unwilling to lend to small farmers?
(b) What are the other sources from which the small farmers can borrow?
(c) Explain with an example how the terms of credit can be unfavourable for the small

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Class 10 Economics – Chapter 3: Money and Credit Social Science

farmer.
(d) Suggest some ways by which small farmers can get cheap credit.

Answer

(a) Bank loans require proper documents and collateral as security against loans. But most
of the times the small farmers lack in providing such documents and collateral. Besides, at
times they even fail to repay the loan in time because of the uncertainty of the crop. So,
banks might be unwilling to lend to small farmers.

(b) Apart from bank, the small farmers can borrow from local money lenders, agricultural
traders, big landlords, cooperatives, SHGs etc.
(c) The terms of credit can be unfavorable for the small farmer which can be explained by
the following –
Ramu, a small farmer borrows from a local moneylender at a high rate of interest i.e. 3 per
cent to grow rice. But the crop is hit by drought and it fails. As a result Ramu has to sell a
part of land to repay the loan. Now his condition becomes worse than before.
(d) The small farmers can get cheap credit from the different sources like – Banks,
Agricultural Cooperatives, and SHGs.

12. Fill in the blanks:

(i) Majority of the credit needs of the __________households are met from informal
sources.
(ii) __________costs of borrowing increase the debt-burden.
(iii) __________issues currency notes on behalf of the Central Government.
(iv) Banks charge a higher interest rate on loans than what they offer on __________.
(v) __________is an asset that the borrower owns and uses as a guarantee until the loan is
repaid to the lender.

Answer

(i) poor
(ii) high
(iii) Reserve Bank of India
(iv) deposits
(v) Collateral

13. Choose the most appropriate answer.

(i) In a SHG most of the decisions regarding savings and loan activities are taken by
(a) Bank.
(b) Members.
(c) Non-government organisation.

(b) Members.

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Class 10 Economics – Chapter 3: Money and Credit Social Science

(ii) Formal sources of credit does not include

(a) Banks.
(b) Cooperatives.
(c) Employers.

(c) Employers.

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Class 10 CLASSand
Economics – Chapter 4: Globalisation - 10th
the Indian Economy Social Science
Chapter - 4 (Globalization and The Indian Economy) Economics
Exercises

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

Answer

Globalisation means integrating the economy of a country with the economies of other
countries under conditions of free flow of trade, capital and movement of persons across
borders. It includes
(i) Increase in foreign trade
(ii) Export and import of techniques of production.
(iii) Flow of capital and finance from one country to another
(iv) Migration of people from one country to another.

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

Answer

The Indian government had put barriers to foreign trade and foreign investment to protect
domestic producers from foreign competition, especially when industries had just begun to
come up in the 1950s and 1960s. At this time, competition from imports would have been a
death blow to growing industries. Hence, India allowed imports of only essential goods.

In New Economic Policy in 1991, the government wished to remove these barriers because
it felt that domestic producers were ready to compete with foreign industries. It felt that
foreign competition would in fact improve the quality of goods produced by Indian
industries. This decision was also supported by powerful international organisations.

3. How would flexibility in labour laws help companies?

Answer

Flexibility in labour laws will help companies in being competitive and progressive. By easing
up on labour laws, company heads can negotiate wages and terminate employment,
depending on market conditions. This will lead to an increase in the company’s
competitiveness.

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

Answer

Multinational Corporations (MNCs) set up their factories or production units close to

markets where they can get desired type of skilled or unskilled labour at low costs along
with other factors of production. After ensuring these conditions MNCs set up production
units in the following ways :

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Class 10 Economics – Chapter 4: Globalisation and the Indian Economy Social Science

 Jointly with some local companies of the existing country.

 Buy the local companies and then expand its production with the help of modern
technology.
 They place orders for small producers and sell these products under their own brand
name to the customers worldwide.

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

Answer

Developed countries want developing countries to liberalise their trade and investment
because then the MNCs belonging to the developed countries can set up factories in less-
expensive developing nations, and thereby increase profits, with lower manufacturing costs
and the same sale price.

In my opinion, the developing countries should demand, in return, for some manner of
protection of domestic producers against competition from imports. Also, charges should be
levied on MNCs looking to set base in developing nations.

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

Answer

“The impact of globalisation has not been uniform”. It has only benefitted skilled and
professional person in urban not the unskilled persons. The industrial and service sector has
much gained in globalisation than in agriculture. It benefitted MNCs on domestic producers
and the industrial working class. Small producers of goods such as batteries, capacitors,
plastics, toys, tyres, dairy products and vegetable oil have been hit hard by competition
from cheaper imports.

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

Answer

Liberalisation of trade and investment policies has helped the globalisation process by
making foreign trade and investment easier. Earlier, several developing countries had placed
barriers and restrictions on imports and investments from abroad to protect domestic
production. However, to improve the quality of domestic goods, these countries have
removed the barriers. Thus, liberalisation has led to a further spread of globalisation
because now businesses are allowed to make their own decisions on imports and exports.
This has led to a deeper integration of national economies into one conglomerate whole.

8. How does foreign trade lead to integration of markets across countries? Explain with an
example.

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Class 10 Economics – Chapter 4: Globalisation and the Indian Economy Social Science

Answer

Foreign trade provides opportunities for both producers and buyers to reach beyond the
markets of their own countries. Goods travel from one country to another. Competition
among producers of various countries as well as buyers prevails. Thus foreign trade leads to
integration of markets across countries.

For example, during Diwali season, buyers in India have the option of choosing between
Indian and Chinese decorative lights and bulbs. So this provides an opportunity to expand
business.

9. Globalisation will continue in the future. Can you imagine what the world would be like
twenty years from now? Give reasons for your answer.

Answer

After twenty years, world would undergo a positive change which will possess the following
features— healthy competition, improved productive efficiency, increased volume of
output, income and employment, better living standards, greater availability of information
and modern technology.
Reason for the views given above : These are the favourable factors for globalisation :

 Availability of human resources both quantity wise and quality wise.

 Broad resource and industrial base of major countries.
 Growing entrepreneurship
 Growing domestic market.

10. Supposing you find two people arguing: One is saying globalisation has hurt our
country’s development. The other is telling, globalisation is helping India develop. How
would you respond to these organisations?

Answer

Benefits of globalisation of India :

 Increase in the volume of trade in goods and services

 Inflow of private foreign capital and export orientation of the economy.
 Increases volume of output, income and employment.

Negative Impact / Fears of Globalisation.

 It may not help in achieving sustainable growth.
 It may lead to widening of income inequalities among various countries.
 It may lead to aggravation of income inequalities within countries.

Whatever may be the fears of globalisation, I feel that it has now become a process which is
catching the fancy of more and more nations. Hence we must become ready to accept
globalisation with grace and also maximise economic gains from the world market.

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Class 10 Economics – Chapter 4: Globalisation and the Indian Economy Social Science

11. Fill in the blanks.

Indian buyers have a greater choice of goods than they did two decades back. This is closely
associated with the process of ______________. Markets in India are selling goods
produced in many other countries. This means there is increasing ______________ with
other countries. Moreover, the rising number of brands that we see in the markets might be
produced by MNCs in India. MNCs are investing in India because _____________. While
consumers have more choices in the market, the effect of rising _______________ and
______________has meant greater ________________among the producers.

Answer

Indian buyers have a greater choice of goods than they did two decades back. This is closely
associated with the process of globalisation. Markets in India are selling goods produced in
many other countries. This means there is increasing trade with other countries. Moreover,
the rising number of brands that we see in the markets might be produced by MNCs in
India. MNCs are investing in India because of cheaper production costs. While consumers
have more choices in the market, the effect of rising demand and purchasing power has
meant greater competition among the producers.

12. Match the following.

(i) MNCs buy at cheap rates from small producers (a) Automobiles

(ii) Quotas and taxes on imports are used to regulate (b) Garments, footwear,

trade sports items

(iii) Indian companies who have invested abroad (c) Call centres

(iv) IT has helped in spreading of production of services (d) Tata Motors, Infosys,

Ranbaxy

(v) Several MNCs have invested in setting up factories in (e) Trade barriers

India for production

Answer

(i) MNCs buy at cheap rates from small producers (b) Garments, footwear,

sports items

(ii) Quotas and taxes on imports are used to regulate (e) Trade barriers

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Class 10 Economics – Chapter 4: Globalisation and the Indian Economy Social Science

trade

(iii) Indian companies who have invested abroad (d) Tata Motors, Infosys,

Ranbaxy

(iv) IT has helped in spreading of production of services (c) Call centres

(v) Several MNCs have invested in setting up factories in (a) Automobiles

India for production

13. Choose the most appropriate option.

(i) The past two decades of globalisation has seen rapid movements in
(a) goods, services and people between countries.
(b) goods, services and investments between countries.
(c) goods, investments and people between countries.

(b) goods, services and investments between countries.

(ii) The most common route for investments by MNCs in countries around the world is to
(a) set up new factories.
(b) buy existing local companies.
(c) form partnerships with local companies.

(b) buy existing local companies.

(iii) Globalisation has led to improvement in living conditions

(a) of all the people
(b) of people in the developed countries
(c) of workers in the developing countries
(d) none of the above

(d) none of the above

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 CLASS - 10th
Class 10 Economics – Chapter 5: Consumer RightsSocial Science
Chapter - 5 (Consumer Rights) Economics

Exercises

1. Why are rules and regulations required in the marketplace? Illustrate with a few
examples.

Answer

Rules and regulations are required in the marketplace to protect consumers. Sellers often
abdicate responsibility for a low-quality product, cheat in weighing out goods, add extra
charges over the retail price, and sell adulterated/ defective goods. Hence, rules and
regulations are needed to protect the scattered buyers from powerful and fewer producers
who monopolise markets. For example, a grocery shop owner might sell expired products,
and then blame the customer for not checking the date of expiry before buying the items.

2. What factors gave birth to the consumer movement in India? Trace its evolution.

Answer

The factors that gave birth to the consumer movement in India are manifold. It started as a
“social force” with the need to protect and promote consumer interests against unfair and
unethical trade practices. Extreme food shortages, hoarding, black marketing and
adulteration of food led to the consumer movement becoming an organised arena in the
1960s. Till the 1970s, consumer organisations were mostly busy writing articles and holding
exhibitions. More recently, there has been an upsurge in the number of consumer groups
who have shown concern towards ration shop malpractices and overcrowding of public
transport vehicles. In 1986, the Indian government enacted the Consumer Protection Act,
also known as COPRA. This was a major step in the consumer movement in India.

3. Explain the need for consumer consciousness by giving two examples.

Answer

Consumer consciousness is being aware of your right as a consumer while buying any goods
or services. Example :

 It is common to see consumers bargaining with sellers for additional discounts below
the MRP.
 Because of conscious consumers, most of the sweet shops do not include the weight
of the container when they weigh sweets.

4. Mention a few factors which cause exploitation of consumers.

Answer

Factors which cause exploitation of consumers are :

 Lack of awareness of consumer rights among buyers.

 Improper and inadequate monitoring of rules and regulations.

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Class 10 Economics – Chapter 5: Consumer Rights Social Science

 Individual purchase quantity is quite small.

 Consumers are scattered over large areas.

5. What is the rationale behind the enactment of Consumer Protection Act 1986?

Answer

The rationale behind the enactment of COPRA 1986 was to set up a separate department of
consumer affairs in Central and State governments and it has enabled us as consumers to
have the right to represent in a consumer court.

6. Describe some of your duties as consumers if you visit a shopping complex in your
locality.

Answer

Some of my duties as a consumer if I visit a shopping complex include checking expiry dates
of the products I wish to purchase, paying only the maximum retail price printed on the
goods, preventing shopkeepers from duping me with defective products, and registering a
complaint with a consumer forum or court in case a seller refuses to take responsibility for
an adulterated or flawed product.

7. Suppose you buy a bottle of honey and a biscuit packet. Which logo or mark you will have
to look for and why?

Answer

We should look for Agmark symbol before buying the food items because this mark is
certified by the government and assures the quality of the product.

8. What legal measures were taken by the government to empower the consumers in India?

Answer

Legal measures taken by the government to empower consumers in India are plenty. First
and foremost being the COPRA in 1986. Then, in October 2005, the Right to Information Act
was passed, ensuring citizens all information about the functioning of government
departments. Also, under COPRA, a consumer can appeal in state and national courts, even
if his case has been dismissed at the district level. Thus, consumers even have the right to
represent themselves in consumer courts now.

9. Mention some of the rights of consumers and write a few sentences on each.

Answer

Some of the rights of consumers are as follows :

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Class 10 Economics – Chapter 5: Consumer Rights Social Science

 Right to choice — Any consumer who receives a service in whatever capacity,

regardless of age, gender and nature of service, has the right to choose whether to
continue to receive that service. Under this right, a consumer may also choose any
one of the various brands of a product (say, a refrigerator) available in the market.
 Right to redressal — Consumers have the right to seek redressal against unfair trade
practices and exploitation.
 Right to represent — The act has enabled us as consumers to have the right to
represent in the consumer courts.

10. By what means can the consumers express their solidarity?

Answer

Consumers can express their solidarity by forming consumer groups that write articles or
hold exhibitions against traders’ exploitation. These groups guide individuals on how to
approach a consumer court, and they even fight cases for consumers. Such groups receive
financial aid from the government to create public awareness. Participation of one and all
will further strengthen consumer solidarity.

11. Critically examine the progress of consumer movement in India.

Answer

The consumer movement in India has evolved vastly since it began. There has been a
significant change in consumer awareness in the country. Till the enactment of COPRA in
1986, the consumer movement did not bear much force, but ever since its inception, the
movement has been empowered substantially. The setting up of consumer courts and
consumer groups has been a progressive move. However, in contemporary India, the
consumer redressal process is quite complicated, expensive and time-consuming. Filing
cases, attending court proceedings, hiring lawyers, and other procedures make it
cumbersome. In India, there are over 700 consumer groups of which, unfortunately, only
about 20-25 are well-organised and functioning smoothly.

12. Match the following.

(i) Availing details of ingredients of (a) Right to safety

a product

(ii) Agmark (b) Dealing with consumer cases

(iii) Accident due to faulty engine in a (c) Certification of edible oil and cereals

scooter

(iv) District Consumer Court (d) Agency that develops standards for goods

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Class 10 Economics – Chapter 5: Consumer Rights Social Science

and services

(v) Consumers International (e) Right to information

(vi) Bureau of Indian Standards (f) Global level institution of consumer welfare

organisations

Answer

(i) Availing details of ingredients of a (e) Right to information

product

(ii) Agmark (c) Certification of edible oil and cereals

(iii) Accident due to faulty engine in a (a) Right to safety

scooter

(iv) District Consumer Court (b) Dealing with consumer cases

(v) Consumers International (f) Global level institution of consumer welfare

organisations

(vi) Bureau of Indian Standards (d) Agency that develops standards for goods

and services

13. Say True or False.

(i) COPRA applies only to goods.

(ii) India is one of the many countries in the world which has exclusive courts for consumer
redressal.
(iii) When a consumer feels that he has been exploited, he must file a case in the District
Consumer Court.
(iv) It is worthwhile to move to consumer courts only if the damages incurred are of high
value.
(v) Hallmark is the certification maintained for standardisation of jewellry.
(vi) The consumer redressal process is very simple and quick.
(vii) A consumer has the right to get compensation depending on the degree of the damage.

Answer

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Class 10 Economics – Chapter 5: Consumer Rights Social Science

(i) False
(ii) True
(iii) True
(iv) True
(v) True
(vi) False
(vii) True

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