Economics Le. 1.

Development
1. Define economic development
OR
What is development?
Ans. Economic development refers to the process as a result of which along
with increase in real per capita income, there is a reduction in inequality,
poverty, illiteracy and diseases. The two basis for measuring economic
development is National Income and Per Capita Income.
2. What is the aim of economic development?
Ans. The aim of economic development is to build up more production
capacity of the nations.
3. Mention any four characteristics of development.
Ans. 1. Different people have different developmental goals.
2. What may be development for one may not be development for the other. It
may be destructive for the other.
3. Income is the most important component of development, but along with
income people also seek equal treatment, good health, peace, literacy, etc.
4. For development, people look at mix goals.
4. Different persons can have different developmental goals. Explain.
Ans. Landless rural labourers:- More days of work, better wages, social and
economic equality.
2. Rich Farmer:- cheap labour, higher price for their produce, cheap inputs like
seeds, machinery, etc.
3. Trader:- Infrastructure facilities, less taxes, cheap labour, high price for their
product, good transportation facilities .
4. A girl from rich Urban family:- Social equality , Gender equality and freedoms
5. What may be development for one may not be development for the other.
Explain by giving examples.
Ans. It is true that development for one may not be development for the other.
1. More wages means development for a worker, but for an industrialists less
wages means development.
2. A rich trader wants to sell food grains at a higher price, but a poor worker
wants to purchase it for low price.
 3. Construction of a dam means cheap and more supply of power, but people
who will lose their livelihood, will protest.
4. To get more and cheap health services, the poor may want the construction
of government hospital, but for the rich people the construction of park or
shopping complex will be a development.
6. Give examples where non-material factors (factors other than income) are
important aspects of our lives.
Ans. Before accepting a job a person would consider many factors apart from
income, such as facilities for family, working atmosphere, opportunity to learn,
job security etc.
A person before taking a decision would also consider factors like freedom,
equal treatment, security and respect of others.
7. The development goals that people have are not only about better income
but also about other important things in life. Explain
OR
For development people look at mixed goals. Explain.
Ans. Though income is one of the most important components of
development but there are other important things that people seek
For development people look at mixed goals
People seek equal treatment, freedom, security and respect.
Women need safe and secure environment to take up a variety of jobs or run
business.
People also need political rights.
People seek pollution free environment.
8. Why do different persons have different notions of development? Which
of the following explanations is more important and why?
(a) Because people are different
(b) Because life situations of people are different.
Ans.1. Different persons have different notions of development because life
situations of persons are different.
Ex: Development goals of a girl from very rich family will be surely different
from development goal of a farmer in Rajasthan. It is because their life styles,
situations and status are very different from each other.
2. A goal which a person has entirely depends on present life situations.
3. Over the period of time, if situations change, the goals will also change.
 9. Do the following two statements mean the same? Justify your answer.
(A) People have different developmental goals.
(B) People have conflicting developmental goals.
Ans. Yes, the following statement implies almost the same as different persons
could have different as well as conflicting developmental goals. For example, In
Gujarat, government is in favour of Narmada project, while the people are
opposing this. This situation created lot of tension in Gujarat.
10. What is National Development?
Ans. National Development means taking a fair and just path of development
which benefits a large number of people.
11. What are the aspects covered under the National Development?
Ans. 1. Under National Development, the government decides what would be
a fair and just path for all.
2. Only those programmes and policies are implemented which would benefit
a large number of people.
3. It is very important to decide about the conflicts and their solutions.
4. Under National Development, we have to think whether there is a better
way of doing things.
12. Why is income one of the most important goal or attributes of
development?
Ans. 1. Countries with higher income are more developed than others with
less income.
2. More income means more of all things that human beings need.
3. Whatever people like and should have, they will be able to get with greater
income.
4. So, greater income itself is considered to be an important goal.
13. What is National Income?
Ans. National Income is defined as the total value of all the goods and services
produce within a country plus the income coming from abroad.

14. What is Per Capita Income?

OR
 Define the term average income.
Ans. When the total national income is divided by the total population, it is
called the Per Capita Income or average income.
PER CAPITA INCOME: NATIONAL INCOME
TOTAL POPULATION
15. For comparison between countries total income is not such an useful
measure. Why?
OR
Why do you think average income is an important criterion for development?
Ans. 1. For comparison between countries, total income is not such an useful
measure.
2. Countries have different population.
3. Comparing total income will not tell us what an average person is likely to
earn.
4. Hence, we compare the average income which is the total income of the
country divided by the total population.
5. The average income is also called Per Capita Income.
16. What is the main criterion used in the World Development Report
brought by the World Bank in classifying countries? Explain.
OR
On what basis the World Bank has classified countries. Explain
Ans. PER CAPITA INCOME is the main criterion used by the World Bank in
classifying different countries.
1. RICH OR HIGH INCOME COUNTRIES:- Countries with per capita income of
US$ 49300 per annum and above in 2019 , are called rich countries.
2. POOR OR LOW INCOME COUNTRIES:- Countries with per capita income of
US$ 2500 or less, are called low income countries.
17. According to the World Bank rating, which countries were regarded as
rich or developed?
Ans. Countries with per capita income of US$ 49300 per annum and above in
2019 were regarded as rich or developed countries.

18. According to the World Bank rating, which countries were regarded as
low income countries.
Ans. Countries with per capita income of US$ 2500 or less in 2019 were
regarded as low income countries.
19. Find out the Per Capita Income level of middle-income countries as per
WDR 2016.
Ans. Countries with per capita income between US$ 49300 per annum and
US$ 2500 per annum are called middle-income countries.
20. According to World Bank rating what was India’s per capita income in
2019.
Ans. India comes in the category of low middle income countries because its
per capita income in 2019 was just US$ 6700 per annum.
21. Why India comes in the category of low middle income countries?
Ans. India comes in the category of low middle income countries because its
per capita income in 2019 was just US$ 6700 per annum.
22. What are the limitations of the Per Capita Income criteria of
development?
Ans 1. It covers only the economic aspect ignoring pace, health, environment,
education , etc.
2. The method does not provide true picture of the distribution of income and
information regarding non-materialistic goods and services.
23. Why do we use averages? Are there any limitations to their use? Illustrate
with your own examples related to development.
OR
While averages are useful for comparison, they also hide disparities. Justify.
Ans. Averages are used to compare different countries , states or regions, but
they do not give us true picture of the distribution of income and information
regarding goods and services.
COMPARISON OF TWO COUNTRIES Table :1.2
Monthly incomes of citizens in 2012 ( in Rupees)
Country I II III IV V Average
Country A 9500 10500 9800 10000 10200 10000
Country B 500 500 500 500 48000 10000
For example, let us consider two countries A and B. For the sake of simplicity,
we have assumed that they have only five citizens each.
Based on the average income some of us may like to live in country B if we are
assured of being its fifth citizen. But if it is a lottery that decides our citizenship
number then perhaps most of us will prefer to live in country A.
Even though both the countries have identical average income, country A is
preferred because it has equitable distribution of income. In country B most
citizens are poor and one is extremely rich. Hence, average income is useful
only for comparison but it does not tell us how the income is distributed
among the people.
24. Give three examples where an average is used for comparing situations.
Ans. (i) Income( Per Capita Income or Average Income) (ii) Literacy Rate
(iii) Mortality Rate
25. Besides the size of Per Capita Income what other property of income is
important in comparing two or more societies?
Ans. Per capita income is useful for comparison. But it does not tell us how this
income is distributed among people. So, apart from size of per capita income,
equitable distribution of income is important in comparing two or more
societies.
26. Suppose records show that the average income in a country has been
increasing over a period of time. From this, can we conclude that all sections
of the economy have become better? Illustrate your answer with an example.
Ans. No, we cannot conclude that all the sections of the economy have
become better with increasing average income over a period of time in a
country because income shows us only what an average person is likely to earn
and it does not indicate equitable distribution of income. (Example: Refer
Table:1.2 in TB)
27. What is Infant Mortality Rate? (IMR)
Ans. IMR indicates the number of children that die before the age of one year
as a proportion of 1000 live children born in that particular year.
28. What is literacy rate?
Ans. Literacy rate measures the proportion of literate population in the seven
and above age group.

29. What is Net Attendance Ratio?

Ans. Net Attendance Ratio is the total number of children of age group 14 and
15 attending school as a percentage of total number of children in the same
age group.
30. What is Life Expectancy at birth?
Ans. It denotes the average expected length of life of a person at the time of
birth.
31. Define (a) Gross Enrolment Ratio (b) BMI (Body Mass Index)
Ans. Gross Enrolment Ratio refers to enrolment ratio for primary schools,
secondary schools and higher education beyond secondary schools.
BMI is the index which used to find out if the adults are undernourished. It is
calculated by dividing the weight of each person in kilograms by the square of
their height in metres. If the BMI is less than 18.5 then the person is
considered under-nourished, If it is between 18.5 and 25 then person is
nourished. if it is more than 25 and less than 30 then the person is overweight.
If it is more than 30 it falls in the obese range.
32. What is Human Development Index?
Ans. The simple average of three indices – longevity, educational attainment
and Per Capita real GDP used by UNDP for calculating human development is
called Human Development Index.
OR
Ans. Human Development Index is the quality of life index, prepared and
published by UNDP in 1990. It takes into account longevity, educational
attainment and real per capita GDP.
OR
Ans. The quality of life index prepared and published by UNDP is termed as
Human Development Index (HDI). It studies the following basic human
capabilities: 1. Longevity 2. Educational attainment 3. Decent Standard of
living.
33. What is the importance of Human Development Index?
Ans. 1.Human Development Index indicates the level of development of a
country.
2. It indicates to a country how far it has traveled, and how far it has yet to
travel to achieve a high rank.
3. Through it one comes to know the important elements of economic welfare
like life expectancy, level of education attainment and real per capita income.
34. Comparative data on Haryana, Kerala and Bihar.
State Infant Literacy Net Attendance PCI for
Mortality Rate % Ratio(Per 100 persons) 2018 – 19
Rate per1000 (2017 - Secondary stage ( in Rs)
(age 14 and 15 years)
live births 18)
2017 – 18)
(2018)
Harayana 30 82 61 2,36,147
Kerala 7 94 83 2,04,105
Bihar 32 62 43 40,982

a. Which is the most developed and the least developed state of the three.
Ans: If per capita income were to be used as the measure of development,
Maharashtra will be considered the most developed and Bihar the least
developed state of the three.
b. Which state has the highest literacy rate of the three ?
Ans. Kerala (94%)
c. Which state has the highest Infant Mortality Rate?
Ans. Bihar (32/1000) followed by Haryana (30/1000)
d Why Kerala has low Infant Mortality Rate?
Ans. Kerala has low Infant Mortality Rate because it has adequate provision of
basic health and education facilities.
e. Why Bihar has high Infant Mortality Rate?
Ans. Bihar has high Infant Mortality Rate because it lacks adequate provision of
basic health and education facilities.
35. Of Haryana and Kerala, which state has higher per capita income?
Ans. Haryana because in this state the per capita income is Rs.2,36,147
whereas in Kerala it is Rs. 2,04,105
36. Why is Kerala regarded as more developed than Haryana?
Ans. Kerala is regarded as more developed than Haryana because in Kerala the
literacy rate and net attendance ratio is higher than that of Haryana. Moreover,
more infants die in Haryana as compared to Kerala. Thus, as a whole Kerala
scores over Haryana.
37. Money cannot buy all the goods and services that one needs to live well.
Explain.
Ans.1. Income by itself is not a complete adequate indicator of material goods
and services.
2. Money or higher Per Capita Income cannot buy pollution free environment,
unadultered medicines , good health, peace and democracy.
3. Though the Per Capita Income of Haryana is higher than Kerala but still it
lacks behind in education and health facilities.
4. In Kerala out of 1000 children born alive, 7 of them die before completing
one year of age, but in Haryana the proportion of children dying within one
year of birth is 30, which is nearly three times more.
5. Hence Money cannot buy all the goods and services that one needs to live
well.
38. What are Public facilities? Mention any four Public facilities.
Ans. Public facilities refers to the facilities which are provided by the
government and which a person cannot arrange at individual level.
Public facilities provided by the Government:-
Provision for safe drinking water
Provision for Public Distribution System
Provision for good means of Transport & Communication etc.
39. Collective provision of goods and services is cheaper than individual
provision. Explain.
Ans. Collective provision of goods and services is cheaper than individual
provision.
Ex: I. It will be cheaper to have collective security for the whole locality rather
than for each house.
2. Government should open schools in remote villages and provide other
facilities so that all children have a chance to study.
40. Why is per capita income of different countries calculated in dollars and
not in their own currencies by the World Bank?
Ans. Per Capita Income is calculated in dollars for all countries, so that it can
be compared. It is also done in a way so that every dollar would buy the same
amount of goods and services in any country.

41. What is meant by human development?

Ans. Human development is the process of both quantitative change and
qualitative growth. It touches social, economic, political and cultural aspects of
human life with special emphasis on reduction in poverty and narrowing down
the gap of inequality and unemployment.
0R
It is the process of enlarging people’s choices as well as raising the level of their
well being so that they can lead a purposeful and a creative life.
42. Identify different thrust areas of human development.
Ans. The thrust areas of the human development are:-
(i) Health (ii) Gender equity (iii) Genderdevelopment
43. Mention the various criteria of measuring human development.
OR
What contributes to Human Development?
Ans. It includes a long and healthy life, education , information and knowledge,
opportunities to livelihood, access to the natural resources , decent standard
of life, personal and social security, equality and enjoyment of human rights.
44. State the criteria used to compare the different countries by the Human
Development Report published by the United National Development
Programme (UNDP).
Ans. Educational level, Health status and Per Capita Income.
45. Human Development is the essence of social development. Explain
Ans. Human Development focuses on the people.
It is considered with the well being of people their needs, choice and
aspirations. All these help in building a right kind of society.
Human Development focuses on expansion of basic choice which helps in
building a right kind of society.
46. Kerala, with lower per capita income has a better Human Development
ranking than Haryana. Hence, Per Capita Income is not a useful criterion at all
and should not be used to compare states. Do you agree? Discuss.
OR
Explain by giving example how factors other than Per Capita Income play an
important role in determining Human Development ranking.
Ans. Yes, I agree that money income or per capita income is not the only factor
behind human development or human welfare. Factors like Infant Mortality
Rate, Literacy Rate and Net Attendance Ratio is also very important for overall
human development. In these factors Kerala is better than Haryana.
1. Infant Mortality Rate in Kerala was 7 as compared to 30 in Haryana (in the
year 2018).
2. Literacy rate (%) was 94 in Kerala, as compared to 82 in Haryana ( in the
year 2017- 18)
3. Net Attendance Ratio Secondary stage was 83 in Kerala as compared to 61
in Haryana ( in 2017-18 )
Due to these advantages, Kerala has a better human development ranking
than Haryana, inspite of lower Per Capita Income.
47. Define Sustainable development.
Ans. Sustainable development is that process of economic development which
aims at maintaining the quality of life of both the present and future
generations without harming the natural resources and environment.
48. Give the main features of the sustainable economic development.
Ans. (i) It is an issue that has emerged from rapid industrialization of the
world in the past century.
(ii) The growth of all countries in future is likely to be endangered if the limited
resources are completely exhausted. Hence there is a need for sustainable
economic development.
49. Give two examples of non-sustainable development.
Ans. 1. In the case of ground water if we use more than what is being
replenished by rain then we would be overusing this resource.
2. The stock of crude oil will last only for few years if people continue to
extract it at the present rate.
50. Why is Sustainable Development essential for economic growth or
development?
Ans. Sustainable Development is essential for economic growth because
1.It protects the people against pollution
2.It ensures their quality of life and health.
3.It conserves environment
4. It raises the standard of living.
5. It cares for the need of the future generation and promotes efficient use of
natural resources.
51. Why is the total income of the countries not used to make comparisons
between them?
Ans. Because different countries have different population.
52.Mention two causes responsible for low literacy rate of women in India.
Ans. 1. Poverty 2. Ignorance towards female child
53. Mention the parameter used to classify the countries into developed and
under-developed
Ans. Per Capita Income
54. Distinguish between Developed and Under- Developed countries.
Ans. DEVELOPED COUNTRIES UNDER-DEVELOPED COUNTRIES
1. Have high Per Capita Income 1. Have low Per Capita Income
2. High standard f living 2. Low standard of living.
3. Example, USA, UK, JAPAN etc. 3. Example NEPAL, PAKISTAN, etc.
55. Distinguish between Human Development and Economic Development.
Ans. HUMAN DEVELOPMENT ECONOMIC DEVELOPMENT
1. Broader concept of development 1. Narrow concept of development
2. Includes monetary as well as 2. Includes only monetary aspects
non-monetary aspects 3. Includes only quantitative growth
3. It is the process of both 4. It is a means to achieve human
quantitative and qualitative growth development
4. It is the end of the final goal of all
development
56.“The Earth has enough resources to meet needs of all but not enough to
satisfy greed of even one person”. Discuss
Ans. This statement implies that human beings are overusing the natural
resources on the Earth in the name of development and industrial revolution.
Earth provides enough resources to meet the needs of all but today man has
become so greedy that he for his progress and development resort to
deforestation, unsustainable extraction of minerals, crude oil, fuel wood ,
fodder, groundwater etc in excess for its recharge capacity. Government needs
to enact laws , rule and regulations to ensure that resources available on the
Earth are not misused and is shared with all people instead of the people who
own huge wealth.
57. Define economic growth.
Ans. Economic growth is defined as sustained increase in per capita GDP of an
economy over a long period of time.
58. What are the two ways in which economic growth can be expressed?

Ans. Economic growth can be expressed in terms of (i) income of GDP (ii) rise
in per capita GDP
59. Why do you think the average is an important criterion for development?
Ans. The average income is an important criterion for development because it
tells us what an average person is likely to earn .
60. Compare India and Pakistan on the basis of any three indicators of Human
Development Index for 2019.
Ans. DATA REGARDING INDIA AND PAKISTAN FOR 2019
Country Gross National Life Mean Years HDI
Income (GNI)Per expectancy at of schooling Ranking
Capita(2015 PPP $) birth-2015 of people in the
aged 25 and World
above(2015) 2016
India 6,681 69.7 6.5 130
Pakistan 5,005 67.3 5.2 154
India is much ahead of Pakistan in every respect. India’s Per Capita Income is
more than Pakistan. From the above table, we can observe that India’s per
capita income is $6681 , whereas for Pakistan it is $5005. With regard to life
expectancy for India and Pakistan it is 69.7 & 67.3 years. The mean years of
schooling of people aged 25 and above for India is more than that of Pakistan.
For India, it is 6.5 but for Pakistan, it is 5.2. With regard to its ranking in the
Human Development Index, India ranks 130 out of 189 countries in all whereas
Pakistan ranks 154.
(Students are advised to learn the data of any three indicators for comparison
between any two countries on the basis of any three indicators of HDI for
2015).
61. Mention some criteria that can be used to compare different countries of
the world.
Ans. PER CAPITA INCOME IN US $, LIE EXPECTANCY AT BIRTH, LITERACY RATE
FOR 15+ YEARS POPULATION, GROSS ENROLMENT RATIO FOR THREE LEVELS
62. The table shows the proportion of under nourished adults in India. Study
the table and answer the following questions.
State Male% Female%
Kerala 8.5 10
Karnataka 17 21
Madhya Pradesh 28 28

All States 20 23
(i) Compare the nutritional level of people in Kerala and Madhya Pradesh.
Ans. Nutritional level of the people in Kerala is quite higher than that of people
in Madhya Pradesh. Percentage of under nourished people (both male and
female) is higher in Madhya Pradesh than that of Kerala.
(ii) Can you guess why around one third of people in the country are under
nourished even though it is argued that there is enough food in the country?
Ans. One third of people in the country are under nourished inspite of enough
food in the country because of :-
1. Poverty 2. Lack of education and health facilities 3. Improper functioning of
Public Distribution System
63. List few example of environmental degradation that you may have
observed around you.
Ans. 1. Air Pollution 2. Water Contamination 3. Soil Erosion 4. Deforestation 5.
Wildlife Extinction etc
64. 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?
Ans. People in India use both conventional and non-conventional energy
sources. The conventional sources of energy are used more and there are
possibilities for it to become scarce. Even today, India depends on oil imports
as it does not produce enough oil domestically. After fifty years more of non –
conventional sources of energy like the solar energy. Wind energy, Bio energy
etc. would be used.