Economics - Term I - Question bank - Short Answers

Lesson 1 Development

Short Answer type questions:

1. What is the main criterion used by the World Bank in classifying different
countries? What are the limitations of this criterion, if any?
2. In what respects is the criterion used by the UNDP for measuring
development different from the one used by the World Bank?
3. Why do we use averages? Are there any limitations to their use? Illustrate
with your own examples related to development.
4. 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.
5. 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?
6. Why is the issue of sustainability important for development?
7. "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
8. List a few examples of environmental degradation that you may have
observed around you.
9. 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 2017

Gross
National Mean Years of HDI
income Life Schooling of Rank in
(GNI) per Expectancy People aged 25 the
capita (2011 at birth and above World
Country PPP US$) (2017) (2017) (2018)

Sri Lanka 11,326 75.5 10.9 76

India 6,353 68.8 6.4 130
Myanmar 5,567 66.7 4.9 148
Pakistan 5,331 66.6 5.2 150
 Nepal 2,471 70.6 4.9 149
Bangladesh 3,677 72.8 5.8 136

10. 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 8.5 10
Karnataka 17 21
Madhya Pradesh 28 28

All Sates 20 23

(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 key

1. 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.

2. 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.

3. 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.

4. 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.

5. The present sources of energy that are used by the people of India are
electricity, coal, crude oil, cowdung 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.

6. 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.

7. 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.

8. 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

9. (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+ yrs 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

10. (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.
→ 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.

Lesson – 2 Sectors of the Indian Economy

1. What is under employment? Explain with an example. [CBSE Sept. 2013]

2. What are secondary activities? Explain with examples. [CBSE Sept. 2010]
3. What are tertiary activities? Explain with examples. [CBSE Sept. 2010]
4. What are primary activities? Explain with examples. [CBSE Sept. 2010]
5. What is GDP? Who is responsible for collecting data for the GDP in
India? [CBSE Comp. (O) 2008,14]
6. What is disguised unemployment? Explain. [CBSE 2010 (D), Sept. 2010]
Or
How far is it correct to say that disguised unemployment can also be called
underemployment? Explain. [CBSE 2012]
7. What is an organised sector ? Explain [CBSE 2009 (O)]
8. What is an unorganised sector? Explain.
9.Who are the people that work in an unorganised sector ? Mention any two
social values which you have learnt from the working conditions of unorganised
sector.
10. What are the objectives of NREGA 2005? [CBSE Sept. 2010, 2011, 2012]
11. What are the two sectors of economic activities on the basis of the
ownership of resources? Explain.
12. Describe any four points of importance of primary sector in the Indian
economy. [CBSE 2008 Comp. (D)]
13. Enumerate the various causes of rural unemployment in India. [CBSE 2013]
14. How can employment opportunities be generated in the tourism and
information and technology centres? [CBSE 2013]

Answer key:

1. (i) It is situation under which people are apparently working but all of them
are made to work less than their potential.
(ii) For example to cultivate a field only two workers are required but the whole
family of five people is working as they have nowhere else to go for work.
(iii) This type of unemployment is also known as disguised unemployment.

2. The occupations which produce finished goods by using the products of

primary activities as raw materials are included in secondary activity.
Manufacturing of cloth from cotton, sugar from sugarcane and steel from iron
ore are important examples of secondary activities.
All these are secondary activities because the final product is to be produced not
by nature but has to be made by men and therefore, some process of
manufacturing is essential. Let us take an example of cloth. Though the primary
product, i.e., cotton is produced by nature, but it cannot be used directly by us in
. this form. So to convert it into usable form some process of manufacturing is
essential. This can be done in a factory or at home with simple tools.

3. Tertiary activity consists of all service occupations. Transport,

communication, trade, health, education and administration are important
examples of tertiary activities. These tertiary activities help in the development
of the primary and secondary sectors. These activities, by themselves, do not
produce a good, but they are an aid or a support for the production process. So
these are also known as support services.

4. Primary activity includes those occupations which are closely related to

man’s natural environment. Gathering, hunting, fishing, lumbering, animal
rearing, farming and mining are some of the important examples of primary
activities. Let us understand the concept with the help of an example-Animal
rearing or dairy is a primary activity. In this activity, farmers are dependent on
the biological process of the animals, and the availability of fodder, etc. The
product, milk, is also a natural product. The most important feature of primary
sector is that it forms the base for all other activities.

5. GDP is the value of goods and services produced within a country during a
given time period.
In India, the mammoth task of measuring the GDP is undertaken by a central
government ministry. This ministry, with the help of various government
departments of all the Indian States and Union Territories, collects information
relating to the total volume of goods and services and their prices, and then
estimates the GDP

6. (i) It is a situation in which more workers are working in an activity than

required. The people who are actually engaged in such an activity appear to be
employed, but are not fully employed.
(ii) For example, if for the cultivation of one hectare land, 10 workers are
required, but instead of 10 workers, 15 workers are working. In this case, 5
workers are disguised unemployed. In such cases, even if the surplus workers
are removed, the production will not suffer. ,
(iii) This type of unemployment is basically found in agriculture.
(iv) This type of unemployment can also be called underemployment because
workers perform below their productivity level.

7. (i) An organised sector covers those enterprises or places of work where the
terms of employment are regular and therefore, people have assured work.
(ii) They are registered by the government and have to follow its rules and
regulations which are given in various laws such as the Factories Act, Minimum
Wages Act, Payment of Gratuity Act, Shops Act, etc.
(iii) They are called organised because they have some processes and
procedures.

8. (i) An Unorganised Sector is a sector which is not registered by the

government.
(ii) The unorganised sector is characterised by small and scattered units which
are largely outside the control of the government.
(iii) There are rules and regulations, but these are not followed.

9. (i) In the rural areas, the unorganised sector mostly comprises the landless
agricultural labourers, small and marginal farmers, sharecroppers and artisans
(such as weavers, blacksmiths, carpenters and goldsmiths).
(ii) In the urban areas, the unorganised sector mainly comprises workers in
small-scale industry, casual workers in construction, trade and transport, etc. It
also consists of those who work as street vendors, head load workers, garment
makers, rag pickers, etc.
(iii) Majority of workers from scheduled castes, tribes and backward
communities find themselves in the unorganised sector.
Social Values :
(i) Most of the people working in unorganised sector belong to backward
communities.
(ii) These workers face social discrimination.
10. (i) This scheme targets the Scheduled Castes, Scheduled Tribes and the poor
women, who suffer from poverty.
(ii) To provide livelihood to the people below the poverty line, this scheme
guarantees 100 days of wage employment in a year to every rural household in
the country.
(iii) Under this scheme, the Gram Panchayat after proper verification will
register households, and issue job cards to registered households. The job card
is the legal document that entitles a person to ask for work under the Act and to
get work within 15 days of the demand for work, failing which an
unemployment allowance would be payable.

11. The public and the private sector.

(a) Public Sector : It is the sector which is controlled, managed and owned by
the government. For example, the Indian Railways.
(b) Private Sector : A private sector is owned, controlled and managed by an
individual or by a group of individuals. For example, the Reliance Industries
Ltd.
12. (i) Primary sector contributes more than 20% to the GDP of India.
(ii) Its employment share is more than 55%.
(iii) It is the most labouring sector of Indian economy.
(iv) It covers agriculture, dairy, fishing, forestry which all contribute to the
Indian economy.

13. (i) Lack of skill and education : The most important factor responsible for
rural unemployment is lack of education and skill.
(ii) Domination of primary sector : Most of the people of rural areas are
involved in primary activities. The possibility of unemployment in primary
sector is more.
(iii) Lack of Industrialization : Even after more than 60 years of independence
more than 80% of the people are dependent on agriculture for their livelihood.
Chances of disguised unemployment are very high in agriculture.

14. (i) Government should encourage tourism by providing more facilities to the
tourists.
(ii) Medical treatment in India is very cheap as compared to developed nations.
(iii) Vocational training should be merged in main-stream education pattern.
(iv) Research and development work should be promoted.
(v) Government should set up more technology parks.