SST( ECONOMICS ) for Class 10( Understanding Economic development ) Worksheet Solutions

Multiple Choice Questions
Q1: When was the ‘Consumer Protection’ Act amended?
(a) In 1990 and 1992
(b) In 1992 and 1995
(c) In 1989 and 1991
(d) In 1991 and 1993
Ans: (d)

Q2: In the market place rules and regulations are needed for the production of:
(a) Sellers
(b) Suppliers
(c) Consumers
(d) Owners
Ans: (c)

Q3: When was the ‘Right to Information Act’ passed?
(a) In October, 2005
(b) In October, 2006
(c) In September, 2005
(d) In September, 2006
Ans: (a)

True/False
Q1: COPRA applies only to goods.
Ans: False

Q2: ndia is one of the many countries in the world which has exclusive courts for consumer redressal.
Ans: True

Q3: When a consumer feels that he has been exploited, he must fill a case in the district consumer court.
Ans: True

Q4: It is worthwhile to move to consumer courts only if damages incurred are of high value.
Ans: False

Q5: Hallmark is the certification maintained for standardization of jeweler.
Ans: True

Very Short Answer Type Questions
Q1: What do sellers usually do when there is a complaint regarding a good or service that had been bought?
Ans: They try their best to shift all the responsibility to the buyer.

Q2: When did the consumer movement come into being in an organised form in India?
Ans: It came into being in an organised form in the 1960s.

Q3: What are the details given on the packing of a commodity?
Ans: These details are about ingredients used, price, batch number, date of manufacture, expiry date and the address of the manufacture.

Q4: The consumer movement in India has led to the formation of various organisations. Name them.
Ans: Consumer forums or consumer protection councils.

Q5: How do organisations like consumer forums help consumers?
Ans: They guide consumers on how to file cases in the consumers court on many occasions. They also represent individual consumers in the consumer courts.

Q6: What is adulteration?
Ans: When some foreign matter, injurious to health, is mixed with any good or natural production, it is called adulteration. This is the most heinous crime against humanity.

Short Answer Type Questions

Q1: Why COPRA is enacted in India?
Ans: Consumer Protection Act 1986 (COPRA) is enacted in India with following motives:

• To pressurize business firms.
• To correct unfair business conduct.
• To protect the interests of the consumers.

Q2: What do you understand by consumer protection?
Ans: By consumer protection we mean the protection of the consumers against the unfair and malpractices adopted by the businessmen. These may be grouped mainly into two categories.

• Government measures
• Voluntary measures

Q3: How do the logos ISI, Agmark or Hallmark help consumers?
Ans: These logos and certification help consumers get assured of quality while purchasing goods and services. The organizations that monitor and issue the certificates allow the producers to use these logos provided they follow certain quality standards.

Q4: Mention a few Organizations that provide certification of standardization in India.
What do you mean by ISO?
Ans: (i) BIS and ISI (ii) AGMARK (iii) HALLMARK
It means International Organization for Standardization which has its headquarter at Geneva. It does the Standardization work at the international level.

Q5: What is the need for consumer awareness?
Ans: The need for consumer awareness was felt because both the manufacturers and traders can go to any extent out of their selfishness. They can charge high prices, and resort to underweight and under measurement methods. Their lust for money may lead to loss of money and health of consumers.

Q6: Mention the consumer’s ‘right to choose’ with an example.
Ans: 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 the service.
Example: Suppose you want to buy soap and the shop owner says that he can sell the soap only if you buy a shampoo. If you are not interested in buying the shampoo, your right to choice is denied. The consumer has every right to purchase only those things that he wants to purchase.

Q7: Describe the conditions in which markets do not work in a fair manner.
Ans: Markets do not work in a fair manner when producers are few and powerful whereas consumers purchase in small amounts and are scattered. This happens especially when large companies are producing these goods. These companies with huge wealth, power and reach can manipulate the market in various ways. At times false information is passed on through the media and other sources to attract consumers.

Q8: What is the three-tier quasi-judicial machinery in India under COPRA?
Ans: Under COPRA, a three-tier quasi-judicial machinery at district, state and national levels has been setup for redressal of consumer disputes.

• The district level court deals with the cases involving claims up to ` 20 lakhs.
• The state level courts take cases between ` 20 lakhs to ` 1 crore.
• The national level court deals with the cases involving claims exceeding ` 1 crore.

If the case is dismissed at district level court, the consumer can also appeal in state and then in national level courts. Thus, the act has enabled us as consumers to have the right to represent in the consumer courts.

Q9: How does consumer awareness help our society?
Ans: The awareness of being a well-informed consumer arose out of consumer movement and active participation of people through their struggles over a long period. Before this movement, consumers were being exploited in a number of ways. Sometimes they were becoming the victims of hoarding and black marketing while sometimes shopkeepers sold them adulterated food. But these practices ceased to exist after the consumer movement. The movement empowered the consumers by giving them certain rights such as right to be informed, right to choose, etc. Now the consumers have every right to purchase only their things that they want to purchase.
Consumer awareness helps in making our society highly sophisticated.

Long Answer Type Questions

Q1: What are the different forms of consumer exploitation?
Ans: The different forms of consumer exploitation are:

• Less weigh.
• Defective goods.
• Provide poor services.
• Impure quality of products/goods.
• High prices: sellers usually charge a price higher than the prescribed retail price.
• Duplicate Articles.
• False or incomplete information, misleading consumers.
• Lack of safety devices which cause harm to the consumers.
• Adulteration: Mixing or substituting undesirable materials in food items etc.
• Unsatisfactory after sale service: supplies do not provide satisfactory behavior.
• Large companies with huge wealth, power and reach can manipulate in the market.

Q2: What are the factors responsible for the consumer exploitation?
Ans: The following factors are responsible for the consumer exploitation:

• Limited information – For a correct decision and choice about a product, a consumer needs full information about the price, quality, durability, composition, etc of the Product. In the absence of full and correct information, a consumer may get exploited.
• Limited supplies- when the supply of goods is less than their demand, the prices may go high and may also encourage the tendency of hoarding. As a consequence, consumers will get exploited.
• Limited competition-when there is limited competition with regard to production i.e., when producers are few and can control and restrict the supply of a product there is a possibility of manipulation in prices.
• Low literacy-Illiteracy causes ignorance, which leads to exploitation of consumers. The level of awareness in our country is generally low.

Q3: What are consumer protection councils?
OR
What are consumer forums?
Ans: These are voluntary organizations locally known as consumer forums or consumer protection councils. The main activities of the consumer forums or consumer protection councils are:

• They guide consumers on how to file cases in the consumer court.
• They may represent individual consumers in the consumer courts.
• They create awareness among the people.

These voluntary organizations receive financial support from the government for the above purposes.

Q4: Describe salient feature of Consumer Protection Act of 1986. How did it enhance the powers of the redressal machinery of India? 
Ans: Salient features of Consumer Protection Act, 1986 are:

• It applies to all goods and services.
• It covers all the sectors whether private, public or cooperative.
• It gives various right to the consumers.
• It also established consumer protection councils at the central and state levels to promote and protect the rights of the consumers.
• It provides a separate three tier quassi judicial machinery at the national, state and district levels.

The Act provides for the establishment of consumer disputes redressal agencies of district, state and national levels for the protection and promotion of consumer interests and to redress their grievances in a speedy, simple and inexpensive manner. The agencies are required to dispose of each complaint within three months. At the national level, it is called the national consumer commission, which is the apex court under the Act, and function at Delhi.

• At the state level, it is called the state consumer commission.
• At the district level, it is called district forum.

These courts look into grievances and complaints of the consumers against the traders and manufacturers and provide the necessary relief and compensation. The district level court deals with the cases involving claims up to Rs. 20 lakhs, the state level courts between Rs. 20 lakhs, and Rs. 1 crore and the national level court deals with cases involving claims exceeding Rs. 1crore.

Q5: Explain the main causes for the increase in the prices. Give two arguments in favour of regulating the rising prices.
Ans: Cause for rise in prices in India are:

• When cost of production goes up because of the increase in the prices of raw materials, the increased cost is added to the existing price levels.
• When people have more income in their hands, their demand for goods and services increase. If this increase is not met by increase in supply of goods and services, there is shortage. This increases the price of goods and services.
• The government keeps on raising the process of number of commodities (e.g., petroleum) from time to time. All these revisions in the administered prices have contributed to the price rise in recent years.
• Hoarding by producers, wholesalers especially when production goes down in the country, aggravates scarcity conditions and pushes up the price level.
• Imposition of indirect taxes like excise and custom duties, and sales tax gives an opportunity to trading class to raise the prices.
• Increase in population creates pressure on the demand for goods and services which in turn becomes the cause for price rise.

Two arguments in favour of regulating the rising prices are:

• Sometimes, traders whose main aim is to earn profit raise the prices by illegal ways.
• If there is no increase in wage for workers who are also consumers in the market, they cannot buy the goods. This creates problem for the people.

Q6: Attempt a brief note on COPRA.
Ans: COPRA – ‘Consumer Protection Act 1986’ was passed by the parliament in 1986 (and came into force with effect from July 1, 1987) for the protection of the consumers from unscrupulous producers and dishonest traders.
Salient features of the Consumer Protection Act are as follows:

• Applies to all goods and services unless specifically exempted by the Union Government.
• Covers all the sectors whether private, public or cooperative.
• Provisions of the Act are compensatory in nature.
• Enshrines the consumer’s rights related to safety, information choice, representation, and redressal and consumer education.
• Empower consumers seeking discontinuance of certain unfair and restrictive trade practices, defects or deficiencies in service, and stopping in services, or withdrawal of hazardous goods from the market.

Multiple Choice Questions
Q1: Identify the incorrect statement in respect of SEZs.
(a) They do not have to pay taxes for long period.
(b) Government has allowed flexibility in labour laws.
(c) They have world class facilities.
(d) They do not have to pay taxes for an initial period of five years.
Ans: (a)

Q2: Companies which set up production units in the Special Economic Zones (SEZs) do not have to pay taxes for an initial period of ___________.
(a) 2 years
(b) 5 years
(c) 4 years
(d) 10 years
Ans: (b)

Q3: Which of the following is an example of a trade barrier?
(a) Remittances to foreigners
(b) Cost of transportation
(c) Tax on imports
(d) Interest on bonds
Ans: (c)

Q4: Which of the following best describes an MNC?
(a) An MNC is a company that controls production of good and services in multiple nations.
(b) An MNC is a government organized body that controls the distribution of resources in a country.
(c) An MNC is an organization that ensures new technology is used by the farming sector of a country.
(d) An MNC is a conglomerate of domestic companies that controls production of goods and services in the domestic region.
Ans: a

Q5: WTO aims at:
(a) restricting trade practices.
(b) establishing rules for domestic trade.
(c) liberalising international trade.
(d) none of the above.
Ans: (c)

Q6: There were __________ countries who the members of the World Trade Organisation in 2006.
(a) 139
(b) 149
(c) 159
(d) 169
Ans: (b)

Q7: In what way did the pressure of competition affect the workers in the garment industry?
(a) Reduced cost of raw materials
(b) Reduced labour cost
(c) Decreased working hours
(d) Protection to workers
Ans: (b)

Fill in the Blank
Q1: ________ owns or controls production in more than one nation.
Ans: MNC

Q2: _______ monitors the liberalisation of trade at international level.
Ans: WTO

Q3: Another name for the World Bank is _____.
Ans: IBRD

Q4: Exports now finance over 80% of imports, as compared to 60% in 1985. This situation is because of ______.
Ans: Globalisation

Q5: Special Economic Zones are being set up by ________ and _________ governments.
Ans: Central, State

True & False
Q1: Globalisation and competition among producers are beneficial to the government.
Ans: False

Q2: MNCs set up production units on the basis of proximity to the markets.
Ans: True

Q3: MNCs, who set up production units in SEZ, do not have to pay taxes for first five years.
Ans: True

Q4: Foreign trade creates an opportunity for the retailers to reach beyond the domestic markets.
Ans: False

Q5: MNCs are playing a major role in the globalisation process.
Ans: True

Assertion and Reason Type Questions
Direction: In the following questions, a statement of assertion is followed by a statement of reason. Mark the correct choice as:
Q1. Assertion : Foreign trade and foreign investment results in disintegration of production across countries.
Reason: MNCs disrupt the production processes in domestic country.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false.
Ans: D

Q2: Assertion: Globalization leads to increased competition in international and domestic markets.
Reason: Globalization also makes the consumers better off as they have a wider variety of goods to choose from at lower prices.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false.

Ans: (b)

Q3: Assertion: Foreign trade creates an opportunity for the producers to reach beyond the domestic markets.
Reason: Foreign trade expands the choice of goods beyond what is domestically produced.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false.
Ans: (b)

Q4: Assertion: Global production has a complex structure.
Reason: Production of one good may take place in different parts of the world. For instance, an equipment may be formed by combining components produced in different countries.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false.

Ans: (a)

Q5: Assertion: MNCs can exert a strong influence on production at distant locations.
Reason: MNCs set up partnerships with local companies, use local companies for supplies, compete witnqhe local companies or buy them up.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false.
Ans: (a)

Q6: Assertion: The removal of barriers to trade is known as liberalization.
Reason: federalization of trade allows businesses to freely decide which goods to import and export.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false. 
Ans: (a)

Q7: Assertion: Due to foreign trade, producers in different countries closely compete with each other.
Reason: Foreign trade leads to similar prices of good across boundaries, and the producers who do not offer competitive prices may lose the market share.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false. 
Ans: (a)

Q8: Assertion: A tax on imports makes the market for imported goods lucrative in terms of earning higher profits.
Reason: Taxes are imposed to ensure smooth trade between nations and higher tax revenues for the governments of the countries.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false. 
Ans: (d)

Q9: Assertion: Local businesses may set up joint production process with MNCs and earn higher profits.
Reason: MNCs can provide money for additional investments, like buying new machines for faster production.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false. 
Ans: (a)

Q10: Assertion: Rapid improvement in technology has been one major factor that has stimulated the globalization process.
Reason: Developing countries are likely to become at par with developed countries in terms of technological development due to globalization.
(a) If Both assertion and reason are true, and reason is the correct explanation of assertion.
(b) If Both assertion and reason are true, but reason is not the correct explanation of assertion.
(c) If Assertion is true, but reason is false.
(d) If Both assertion and reason are false. 
Ans: (b)

Very Short Answer Type Questions
Q1: MNC stands for _________.
Ans: Multinational Corporation

Q2: Investment made by MNCs is called ___________.
Ans: Foreign Investment

Q3: Process of integration of different countries is called ___________.
Ans: Globalisation

Q4: MNCs increase ____________.
Ans: Competition, Price war and Quality

Q5: This helps to create an opportunity for the producers to reach beyond the domestic market.
Ans: Foreign trade

Q6: Why is fair globalisation necessary ?
Ans: Fair globalisation creates opportunities for all, and also ensures that the benefits of globalisation are shared in the best possible manner among all.

Q7: What are the ways to interconnect countries?
Ans: (i) Foreign trade,
(ii) Foreign investments, and
(iii) Movement of people.

Q8: When is money called an investment ?
Ans: The money that is spent to buy assets such as land, building, machines and other equipment is called investment.

Q9: Name some of the Indian multinationals.
Ans: Videocon (Electronics), Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts) etc.

Q10: International Monetary Fund (IMF) is an organisation whose aim is to liberalise international trade.
Ans: World Trade Organisation (WTO) is an organisation whose aim is to liberalise international trade.

Short Answer Type Questions 
Q1: Examine any three conditions which should be taken care of by Multinational Companies to set up their production units.
Ans: The three conditions which should be taken care of by Multinational Companies to set up their production units are:

• Labour: There should be easy availability of cheap and skilled labour for the industries. This will help in reducing in the cost of production and maximizing the profit.
• Market: The markets should be close to the production units so that there should be less expenditure on the transport cost.
• Government policies: The government policies of that particular countries should be in favour of the company such as flexibility in labour laws etc. 

Q2: How is foreign trade interlinking markets of different countries? Explain with example.
Ans: Foreign trade means trade with other countries. When we trade with other countries then we connect with the markets of different countries.
For example, Chinese toys in the Indian market. In this process, the goods and services are produced and sold at global level. There is movement of technology and people between the countries. It gives opportunity to the local producers to reach beyond the domestic market. Buyers get different choice, price and quality.

Q3: ‘Barriers on foreign trade and foreign investment were removed to a large extent in India since 1991.’ Justify the statement.
or
Why have the barriers on foreign trade and foreign investment been removed to a large extent by the Indian government? Explain.
Ans: Barriers on foreign trade and foreign investment were removed to a large extent in India since 1991. Indian government decided to remove trade barriers due to the following reasons:

• The Indian government wanted the domestic producers to face the global competition.
• By this competition, the Indian producers j will also get a chance to improve their quality.
• Removal of trade barriers will allow the producers of different countries to trade with India.

Q4: “Globalisation and greater competition among producers has been advantageous to consumers.” Justify the statement with examples.
Ans: It is true to state that Globalisation and greater competition among producers has been of advantageous to consumers. The consumers are getting advantage in the following ways:

• They get different brands of the product.
• They get the goods and services at cheaper rate.

Q5: What is foreign trade? How does it integrate markets? Explain with examples.
or
How does foreign trade integrate the markets of different countries? Explain with examples.
Ans: Foreign trade means trade with other countries. When we trade with other countries then we connect with the markets of different countries.
For example, Chinese toys in the Indian market. In this process the goods and services are produced and sold at global level. There is movement of technology and people between the countries. It gives opportunity to the local producers to reach beyond the domestic market. Buyers get different choice, price and quality.
An MNC from USA producing the industrial equipment is designing its product in the research centres of the US, its components are manufactured in China, the assembling and the export work is done from Mexico and Eastern Europe and its call centres are there in India.

Q6: “Technology has stimulated the globalisation process.” Support the statement with examples.
or
“Information and Communication Technology has played a major role in spreading our production of services across countries”. Justify the statement with examples.
or
How has Information and Technology stimulated globalisation process? Explain with examples.
Ans: It is true to say that the Information and Communication Technology has played a major role in spreading our production of services across countries. Development in technology is one of themost important factors that has enabled the process of globalization. It can be studied under two different headings:

• Developments in transport technology: The world has done tremendous improvements in the field of transportation technology. Now we have different fastest means of transport with the help of which we can reach to different parts of the world in less time and can control trade and integrate the markets easily. 
• Developments in ICT (Information and Communication Technology): It includes telephones, mobile phones, computers, internet, fax, e-mails etc. A remarkable development can be seen in the field of ICT throughout the world.

Now the world is just a click away. With the help of ICT we can share and obtain information instantly across the globe at negligible cost.

Q7: How did Cargill Foods became the largest producer of the edible oils in India? Explain.
Ans: Cargill Foods, an American MNC has bought Indian company named Parakh Food. Now the control on the large marketing network and the four oil refineries has shifted to the Cargill Food. Cargill Food has now become the largest producer of edible oil in India.

Q8: How does foreign trade connect the markets of different countries? Explain with example.
Ans: Foreign trade integrates the markets in different countries through the following ways:

For example: Chinese toys in India. In this process the Goods and services and produced and sold at global level. There is movement of technology and people between the countries. It gives opportunity to the local producers to reach beyond the domestic market. Buyers get different choice, price and quality.
An MNC from USA producing the industrial equipment is designing its product in the research centres of the US, its Components are manufactured in china, the assembling and the export work is done from Mexico and Eastern Europe and its call centres are there is India.

Q9: How do Multinational Companies manage to keep the cost of production of their goods low? Explain with examples.
Ans: Due to the following reasons the Multinational Companies manage to keep the cost of production of their goods low:

• They set up their production units where there is easy availability of cheap and skilled labour.
• They look for the locations from the markets are close so that they will have to pay less transportation cost in supplying the final goods to the consumers.
• They set up their business in the countries where the government policies are favourable for them.

Such as in India the Indian government has given them the benefit of flexibility in labour laws.

Q10: How are MNCs spreading their production across countries? Explain with an example.
Ans: An MNC from USA producing the industrial equipment is designing its product in the research centres of the US, its Components are manufactured in China, the assembling and the export work is done from Mexico and Eastern Europe and its call centres are there is India.

Long Answer Type Questions
Q1: How has foreign trade been integrating markets of different countries? Explain with examples.
Ans: Foreign trade means trade with other countries. When we trade with other countries then we connect with the markets of different countries.
For example, Chinese toys in the Indian market. In this process the goods and services and produced and sold at global level. There is movement of technology and people between the countries. It gives opportunity to the local producers to reach beyond the domestic market. Buyers get different choice, price and quality.
An MNC from USA producing the industrial equipment is designing its product in the research, centres of the US, its components are manufactured in china, the assembling and the export work is done from Mexico and Eastern Europe and its call centres are there is India.

Q2: Explain any three ways by which MNCs exercise control on production.
Ans: The following are the three ways in which multinational corporations are spreading their products in different ways

• Buying up the Local Companies: This is most common route for MNC investment and expanding production. MNCs can do so because they have huge wealth. For example: Cargill Foods an American MNC has bought Indian company named Parakh Food. Now the control on the large marketing network and the four oil refineries has shifted to the Cargill Food. Cargill Food has now become the largest producer of edible oil in India.
• Joining hand with local companies: Sometimes the MNCs join hands with the local companies and do the production. In this process, the local companies get twin benefits: (t) they get foreign investment and (ii) MNCs provide newer technology to them for the production. For example: In 1995 Ford Motors an American company joined hand with the Indian company called Mahindra and Mahindra (manufacturer of jeeps and trucks).
• By placing orders: Sometimes MNCs just place orders with small producers around the world for the production of garments, footwear and sports items. After that, the products are supplied to the MNCs and sold under the brand name of the MNCs.

Q3: “The impact of globalisation has not been uniform.” Explain this statement.
Ans: Globalisation has not proved to be favourable for every section of the society. However, it has provided many positive results in the form of better technology, higher investments flow, increased trade flows, more choices for the consumers, origin of new industries etc. But there are examples where globalisation has proved to be detrimental for some sections. For example, increased competition with cheaper products of MNCs has led to the closing down of local industries which has resulted into large unemployment and expansion of unorganised sector. Similarly, due to foreign companies, Indian companies have also been demanding flexible labour laws which has resulted into the irregularity of the employment of workforce and reduced the surety of their job tenure. So, it can be said that the impact of globalisation has not been uniform.

Q4: Globalisation will continue in the future. Can you imagine the world would be like twenty years from now ? Give reasons for your answer.
Ans: Globalisation is a never ending process. In the coming time its magnitude is going to increase. Now foreign investment is mobilising production facilities from one country to another but MNCs still maintain their national character. But twenty years from now the MNCs will become so integrated with the countries that it will be difficult to separate the identity of the company with the country. Hindustan Unilever and Maruti are such companies even in the present times. The foreign trade will increase manifold and the reach of competitive products will be to every corner of the world. The consumers will be consuming same products in all the parts of the world. Their consumption will tend to be standardised. There will be no barrier on the movement of the people and people from all over the world will be able to work wherever they want to work. Similarly, the level of technology will have improved a lot and this will bring improvement in productivity.

Q5: Explain any five positive impacts of globalisation.
Ans: Globalisation and greater competition among producers have been of advantage to consumers, in terms of wider choice, improved quality and lower prices.

• Enormous increase in foreign investment through MNCs.
• Several of the top Indian companies have been able to benefit from globalisation as they got newer technology and collaboration with foreign companies.
• Some large companies emerged as MNCs Ex. Tata Motors, Infosys.
• New opportunities are created for companies providing services especially those involving IT.
• It has enabled the third world countries to get better technology at a cheaper rate.

Q6: How do MNCs interlink production across countries?
Ans: 

• MNC’s set up their production units in those areas which are quite close to the markets.
• It sets up production jointly with some of the local companies of the selected countries
• Sometimes large MNCs place orders for production with small producers and provide them money for additional investments.
• Sometimes MNCs buy local companies and then expand their production
• Provide latest technology for better and speedy production

Q7: Critically examine the functioning of WTO.
Ans:

• The operations of the WTO will lead to undue interference into the internal affairs of different countries.
• Domination of developed countries.
• Serves the interests of the developed nations.
• Access to markets of developed countries by developing countries is negligible’
• WTO rules forced the developing countries to remove trade barriers where as many developed countries unfairly retained trade barriers.

Q8: Describe the contribution of technology in promoting the process of globalization.
or
How has improvement in technology stimulated the globalisation process? Explain.
or
Explain the role of technology in stimulating globalisation process.
Ans: It is true to say that the Information and Communication Technology has stimulated the globalisation process and played a major role in spreading our production of services across countries. Technological development: development in technology is one of the most important factor that has enabled the process of globalization. It can be studied under two different headings:

• Developments in transport technology: The world has done tremendous improvements in the field of transportation technology. Now we have different fastest means of transport with the help of which we can reach to different parts of the world in less time and can control trade and integrate the markets easily.
• Developments in ICT (Information and Communication Technology): It includes telephones, mobile phones, computers, internet, fax, e-mails etc. A remarkable development can be seen in the field of ICT throughout the world.

Now the world is just a click away. With the help of ICT we can share and obtain information instantly across the globe at negligible cost.

Multiple Choice Questions

Q1: Which of the following sectors is the largest producing sector in India?
(a) Primary sector
(b) Modern sector
(c) Tertiary sector
(d) Secondary sector
Ans: (c)

Q2: Which of the following is another name for primary sector?
(a) Service sector
(b) Agriculture and related sector
(c) IT Sector
(d) Industrial sector
Ans: (b)

Q3: Which of the following is a benefit of a tertiary sector?
(a) The activities of tertiary sector help in the development of primary and secondary sector.
(b) The tertiary sector helps in the production of goods by directly using natural resources.
(c) The individuals involved in tertiary sector use better quality seeds and manure to produce agricultural goods.
(d) The individuals involved in tertiary sector buys raw materials directly from farmers to convert them into final goods.
Ans: (a)

Q4: Public Sector stands for:
(a) Most of the assets owned by big companies.
(b) Assets owned by Government.
(c) Most of the assets owned by a group of people.
(d) Most of the assets owned by an individual.
Ans: (b)

Q5: Which of the following best defines the gross domestic product (GDP) of a country?
(a) It is the decrease in the value of assets over a given period of time.
(b) It is the value of final goods and services produced with in the domestic territory of a country.
(c) It is the difference between value of goods imported and the value of goods exported.
(d) It is the value of all final goods and services produced by the citizens of a country within and outside the country.
Ans: (b)

Q6: Choose a method to tackle the problem of underemployment in a country.
(a) Identify, promote and locate industries and services where a large number of people can be employed.
(b) Provide debt-waiver schemes for farmers so that they can easily take loans to increase agricultural activities.
(c) The government should provide unemployment benefits to citizens.
(d) The government should focus on developing jobs in the unorganized sector as most of the people are employed in unorganized sectors.
Ans: (a)

Q7: Which of the following sectors is the largest producing sector in India?
(a) Primary sector
(b) Modern sector
(c) Tertiary sector
(d) Secondary sector
Ans: (c)

Q8: Identify the difference between the organised and unorganised sectors.
(a) Employees in organised sector are mainly involved in agriculture and allied activities, while the employees in unorganized sector are mainly involved in manufacturing activities that take place with the help of equipment in factories.
(b) Firms in organised sector are registered by the government and have to follow certain norms of employment as set by the government, while the unorganised sector is characterised by small and scattered units which are largely outside the control of the government.
(c) Employees in organized sector are mainly self-employed, while the employees in unorganized sector are mainly employed in government or public sector jobs.
(d) In a country, the contribution of organized sector is minimal to the GDP, while the unorganized sector mainly supports the economic growth of a country.
Ans: (b)

Q9: Which of the following is true about Mahatma Gandhi National Rural Employment Guarantee Act
(a) The government has to ensure to increase the number of jobs in unorganized sector.
(b) The government is required to provide 100 days of employment in rural areas to people who are able to and in need of work.
(c) The government has to ensure that all the unemployed individuals in rural areas must get  100 per day as unemployment benefits.
(d) The government is required to provide free health check ups and medical facilities to unemployed people in rural areas for at least 100 days in a year.
Ans: (b)

Q10: Which of the following refers to the intermediary good?
(a) Goods that are included in the estimation of GDP.
(b) Goods that are not used as raw material for production of other goods during a year.
(c) Goods that are used as raw material for the production of other goods during a year.
(d) Goods that are not resold by the firms to make profit during a year.
Ans: (c)Fill in the Blanks

Q1: The ____________ sector involves the creation of products by extracting and gathering natural resources.
Answer: Primary
The primary sector involves activities such as farming, forestry, hunting, fishing, and mining, where natural resources are extracted and gathered for further processing.

Q2: The ____________ sector includes activities that support the growth of the primary and secondary sectors.
Answer: Tertiary
The tertiary sector, also known as the service sector, includes activities like teaching, healthcare, and software companies that support the production processes of the primary and secondary sectors.

Q3: Gross Domestic Product (GDP) is the sum of production of ____________ sectors in a year.
Answer: Three
GDP includes the value of final goods and services from the primary, secondary, and tertiary sectors, providing a comprehensive measure of a country’s economic activity.

Q4 The ____________ sector gradually became the most important in the economy and employment.
Answer: Secondary
The secondary sector, or industrial sector, became crucial as it involves transforming natural materials into new products through manufacturing processes, leading to increased economic significance.

Q5: The ____________ sector overtook the primary sector as India’s largest producing sector in 2013-14.
Answer: Tertiary
The tertiary sector became the largest producing sector due to the increasing importance of services such as healthcare, education, transportation, and information technology.

True and False

Q1: The tertiary sector is not playing any significant role in the development of Indian economy.
Ans: False

Q2: The purpose of the Public Sector is not just to earn profits while activities in the sector are guided by the motive to earn profits only.
Ans: True

Q3: There has been a big change in the three sectors of economic activities in India but a similar shift has not taken place in the share of employment.
Ans: True

Q4: The public sector plays an important role in the economy of India by creating and expanding infrastructure such as the construction of roads, bridges, railways, schools, hospitals, etc.
Ans: True

Q5: The unorganised sector in urban areas constitutes casual workers especially in construction, trade and transport as well as the people who are employed on their own doing small jobs such as selling on the street or doing repair work.
Ans: True

Assertion and Reasoning Based Type Questions

Q1: Assertion: An individual who manufacture flour from wheat is engaged in primary sector.
Reason: When some process of manufacturing is used the product is a part of secondary sector.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (d)
An individual who manufactures flour from wheat is engaged in secondary sector as the products that are not manufactured directly from nature but require some manufacturing process are a part of secondary sector.

Q2: Assertion: Leela works five days a week, receives her income on the last day of each month and gets medical facilities from her firm.
Reason: Leela is working in organized sector.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (a)
The firms in organized sector 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 and Establishments Act etc

Q3: Assertion: There are several goods and services that the society needs; however, the private sector does not produce all of them.
Reason: Private sector is profit driven.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 

Ans: (a)
Some of the services such as defense require a lot of spending and do not provide any profit. Therefore, private sector does not invest in such activities. Also, certain services such as public transportation and irrigation facilities require massive spending which is beyond the capacity of private sector.

Q4: Assertion: Rakesh is an educated and skilled worker who earns a high monthly salary as he is employed in a private bank in a city.
Reason: All service sectors in India are growing extremely well and each individual engaged in any kind of tertiary activity earns a high income.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (c)
In India, not the entire service sector is growing equally well. Service sector in India employs many different kinds of people. At one end there are a limited number of services that employ highly skilled and educated workers. At the other end, there are a very large number of workers engaged in services such as small shopkeepers, repair persons, transport persons, etc. These people barely manage to earn a living and yet they perform these services because no alternative opportunities for work are available to them.

Q5: Assertion: Mohan is a shopkeeper who pays his taxes on time. He has employed two workers Rakesh and Raghu in his shop. He pays them well, however, none of the workers get any paid leaves in the year.
Reason: Rakesh and Raghu are employed in unorganized sector.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (a)
If Rakesh and Raghu were employed in organized sector, they would receive benefits such as paid leaves, medical insurance and pension schemes from the employer. Mohan is not following labour laws as he does not provide any paid leave to his employees in the year.

Q6: Assertion: In India, over the forty years between 1973- 74 and 2013-14, while production in all three sectors has increased, it has increased the most in the tertiary sector.
Reason: Tertiary sector is the only organized sector in the economy so the government spends a lot of money for creating jobs in tertiary sector.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 

Ans: (c)
There are several reasons for increased production in tertiary sector such as increase in demand for education, health, communication and transportation, development of agriculture sector, increase in level of income and development of information and technology sector.

Q7: Assertion: Reliance industries is a privately-owned firm.
Reason: Government is a major stakeholder in reliance industries.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (c)
Reliance industry is a privately-owned firm as the assets and delivery of goods and services in Reliance is controlled by private individuals.

Q8: Assertion: The development of agriculture and industry leads to the development of service sector.
Reason: As the primary and secondary sectors develops, the demand for transport, storage structures, banks, insurance, etc., increases.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (a)
As the primary and secondary sector develops the demand for the aforementioned tertiary activities increase. Not just the demand for mentioned services increases, but as individuals become better off, the demand for education, health services, professional training and communication also increase. Therefore, the development of primary and secondary sectors leads to the development of service or tertiary sector.

Q9: Assertion: In India, the primary sector is the largest employer.
Reason: The demand for services has increased enormously.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (b)
The primary sector remains the largest employer in India because not enough jobs were created in the secondary and tertiary sectors. However, the demand for services has increased owing to increase in demand for education, health, communication and transportation, development of agriculture sector, increase in level of income and development of information and technology sector.

Q10: Assertion: When calculating the total value of goods and services produced in a country, the value of all goods and services at each stage of production should be calculated.
Reason: At each stage of production some value is added to a good or service, therefore, the value added at each stage of production is added to derive the total value of goods and services in an economy.
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false. 
Ans: (d)
When calculating the total value of goods and services produced in a country, the value of final goods and services is calculated. If we add the value of goods and services at each stage of production, we will get an inflated GDP as the same value would be included multiple times.

Very Short Answer Type Questions

Q1: TISCO : Private, ________ : Public.
Ans: Railways.

Q2: The main objective of a private sector enterprise is ________.
Ans: To earn a profit.

Q3: Complete the following :
The activities of the primary sector are called primary because _______.
Ans: They form the base for all other products that we subsequently make.

Q4: Correct the following statement and rewrite.
When more people work in a job than required it is known as seasonal employment.
Ans: When more people work in a job than required it is known as hidden disguised unemployment.

Q5: Identify the sector with the help of the following features :
(a) Registered by the government
(b) Workes enjoy security of employment.
(c) It is also called organised sector.
Ans: Public sector.

Q6: What type of goods and services are included for calculation of GDP in India?
Ans: All the final goods and services are included for calculation of GDP in India.

Q7: What if the underemployed people are removed from primary sector and provide them with proper work somewhere else ?
Ans: If this happens, the production in primary sector will not suffer and the incomes of the people who are employed in other work would increase.

Q8: What happens in the situation of underemployment ?
Ans: In the situation of underemployment, people seem to be apparently fully employed but actually all of them work less than their potential.

Q9: Where do we find majority of workers from scheduled castes, tribes and backward communities?
Ans: The unorganised sector.

Q10: Which aspects of human development does the government need to pay attention ?
Ans: Government needs to pay attention to facilities like availability of food and nutrition, safe drinking water and housing facilities for the poor.

Short Answer Type Questions

Q1: What is an economic activity ?
Ans: Any activity which is legal and is conducted with the objective of earning money is an economic activity. For example, farmers ploughing field, labourers helping in road construction, doctors curing patients, traders selling goods etc. are examples of economic activities.

Q2: How do we calculate the value of various goods and services and know the total production in each sector ?
Ans: In India, the task of measuring GDP is undertaken by a central government body known as CSO or the Central Statistics Office. This department, with the help of various government departments of all the Indian states and union territories, collects information relating to total volume and prices of various goods and services produced in different sectors. The value of all the final goods and services produced in each sector during a particular year provides the total production of the sector for that year. The sum of production in all the three sectors gives what is called the Gross Domestic Product (GDP) of a country.

Q3: What are the non-economic activities ?
Ans: All the activities whose main objectives are not to earn money rather they are carried on with some other objective like affection, power, affiliations, mercy etc. are called non-economic activities. For example, a mother taking care of her child, a doctor curing his father, a labourer repairing his own house etc. are examples of non-economic activities.

Q4: Why is the tertiary sector becoming more important in India ? Explain.
Ans: The tertiary sector becoming more important in Indiabecause of following reasons :
(i) Developing country like India is responsible for the basic services like hospitals, education, post and telegraph, courts, etc.
(ii) The development of primary and secondary sectors increases the demand for services such as transport, trade, storage.
(iii) Demand for tourism, shopping, private schools, private hospitals, etc. increases with the increase in the level of income.
(iv) Rapid growth of services sector also benefitted from external demand such as software industry and call centre services.
(v) Liberalisation of financial sector provided an environment for faster growth of financial services.

Q5: What does this mean that the primary sector provided employment to more than half of the working population while its share in GDP was less than 25 percent ?
Ans: This indicates that there is a widespread underemployment in primary sector. If many of the people are moved from primary sector to other works, the overall production in this sector will not be influenced and if these people who have been moved are provided full employment somewhere else, overall GDP will increase and the family incomes of such people will also increase leading to the upliftment of their living standard.

Q6: Why does disguised unemployment not help to enhance the productivity of the country?
Ans: The disguised unemployment is a situation in which a person seems to be fully employed but his presence or absence neither increases nor decreases the production respectively. It means he works less than his full potential. The disguised unemployment does not help in enhancing the productivity of the country because there is a widespread disguised employment in primary sector while its share in national income is continuously falling. If many of the people are moved from primary sector to other works, the overall production in this sector will not be influenced and if these people who have been moved are provided full employment somewhere else, overall GDP will increase. But this does not happen because the secondary and tertiary sectors have failed to provide employment to such people.

Q7: “The declining share of agriculture in the Gross Domestic Product (G.D.P.) is a matter of serious concern in India.” Support this statement with any five reasons.
OR
“The declining share of agriculture in the Gross Domestic Product (GDP) is a matter of serious concern in India.” Support the statements.
Ans: The declining share of agriculture in the Gross Domestic Product (G.D.P) is a matter of serious concern in India.
Five reasons to support this statement are as follows :
(i) Indian farmers are facing challenge from international competition.
(ii) Government is reducing investment in agricultura sector, especially irrigation sector.
(iii) Subsidy in fertilizers has decreased, leading to a rise in cost of production.
(iv) Reduction of Import duties on agricultural products.
(v) Farmers are withdrawing their investments from agriculture causing a downfall in the employment in agriculture.

Q8: Explain the objective of implementing the MGNREGA 2005.
Ans: (i) Providing unskilled work for rural people in the rural areas.
(ii) Providing earning security to unskilled labour of rural areas.
(iii) To improve the standard of living of rural masses.
(iv) To empower the rural masses by increasing their decision making power.

Q9: What is underemployment ?
Ans: Underemployment refers to a situation in which a person seems apparently fully employed but he does not have work using his full potential. The acute form of underemployment is the disguised unemployment in which a person seems to be completely employed but his presence or absence neither increases nor decreases the production respectively.

Q10: Why is the value of only final goods and services counted while calculating GDP ?
Ans: While calculating the Gross Domestic Product (GDP) the value of only final goods and services is counted because the value of final goods and services already includes the value of all the intermediate goods that are used in making the final good. For example, the value of bread already includes the value of flour and labour used in the making of bread. If all these values are separately calculated and added, they will amount to double counting and will present false picture of GDP.

Long Answer Type Questions

Q1: What do you mean by the term Gross Domestic product? What precautions should we take in calculating GDP?
Ans: Gross Domestic Product (GDP): It is the value of all final goods and services produced within a country during a particular year. The precaution which is to be taken is that while calculating the Gross Domestic Product (GDP) is the value of only final goods and services are to be counted because the value of final goods and services already includes the value of all the intermediate goods that are used in making the final good. For example, the value of bread already includes the value of floor and labour used in the making of bread. If all these values are separately calculated and added, they will amount to double counting and present false picture of GDP.

Q2: How do you think the sectoral composition of Indian economy has changed ?
Ans: At the time of independence, India was a very backward country with primary sector having the largest share in the GDP of the country. As the time passed, the methods of farming has changed and agriculture sector began to prosper and produced much more foodgrain than before. This helped many people to take up new activities like trading, craftmaking and manufacturing. With the rise in incomes of the people in primary and secondary sectors, the demand for services began to emerge. The services like trading, medical care, education, transportation, communication, police services, judiciary, entertainment etc. emerged by leap and bound. This led to the expansion of tertiary services in India. The demand for services became so large in India that it led to the emergence of tertiary sector as the largest sector of the economy, secondary sectorbecame the second largest while the primary sector shrinks to the smallest sector in terms of contribution in GDP. Now Indian economy which once used to be considered as a primary economy is now recognised in the world as a service economy.

Q3: Pavan is a poor agriculture labourer in a village. He wants to migrate to city in search of better employment opportunities. Can you suggest some ways through which his migration for better employment opportunities be stopped ?
Ans: Following are the various steps which can provide better employment opportunities to Pavan in his own area :
(i) Pavan may take some land on rent and start his own farming instead of working on others’ farms. He can also open a shop for daily need items.
(ii) The government may provide cheap credit facilities to him so that he can buy necessary implements for his farm like tractors or other equipment for farming, better seeds, fertilizers and other nutrients, wells or tube-wells etc. or stock for his shop. All this has employment generating effects.
(iii) He may also attend some vocational training programmes being run by the government and start some other occupation like repairing, tailoring etc.
(iv) The government must identify the potential industries in rural areas which may utilise the agricultural crops produced there and invite the entrepreneurs to start such industries there.
These industries may employ excess labour force employed in agriculture.

Q4: What are the ways to increase more employment for the people in rural India ?
Ans: Unemployment is a very serious problem which is being faced by India since the advent of Britishers and especially since independence. The government has to take many effective steps to increase the employment in the country. Following are the various steps which can be taken by the government to increase employment :
(i) The government may provide cheap credit facilities to the people so that they can buy necessary implements for their occupations. The farmers may build wells or tube-wells, buy tractors or other equipment for farming, better seeds, fertilizers and other nutrients for the agriculture. This all has employment generating effects.
(ii) The government may build better infrastructure in terms of transportation, electricity and communication etc. This will help in better and assured production and easier movement of goods from one place to another. This encourages the farmers and producers to expand the market for their products.
(iii) The government must identify the potential industries in rural areas which may utilise the agricultural crops produced there and invite the entrepreneurs to start such industries there.
(iv) Government may improve irrigation facilities so that farmers may harvest two or three crops in a year. This will increase employment.
(v) Government may initiate some more employment programme which require mental work rather than physical work like elder education programme etc.

Q5: Reema works as a Head Technician in Mehta Textiles Private Ltd. whereas Shirin works as a Sales Executive in Kashvi Fashion Showroom. Identify the sectors of economy in which Reema and Shirin are working. Evaluate the role of each of these sectors in the Indian economy.
Ans: Reema works in secondary or manufacturing sector where as Shirin works in the tertiary or service sector Role of secondary/manufacturing sector – This sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity, hence it is also called as industrial sector. The product in this sector has to be made and therefore some process of manufacturing is essential, may be in a factory, a workshop or at home. For example, using cotton fibre from the plant, spinning yarn and weaving cloth etc. This sector provides large scale employment and helps in earning huge revenue. It helps in the development of a nation. Role of Tertiary/Service Sector – These are activities that 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. For example, goods need to be transported by trucks or trains and then sold in wholesale and retail shops; they have to be stored in godowns. So, transport, storage, communication, banking, trade are some examples of tertiary activities. Since these activities generate services, the tertiary sector is also called the service sector. It also includes services of teachers, doctors, and those who provide personal services such as washermen, barbers, cobblers, lawyers, and people to do administrative and accounting works. In recent times, certain new services based on information technology such as internet cafe, ATM booths, call centres, software companies etc. have become important. Service sector contributes the most to the national economy these days and is further growing.

Q6: Write any five features of an organized sector.
Ans: Following are the various features of organised sector:
(i) Organised sector includes those organisations where the terms of employment are certain and people get regular and assured work.
(ii) These organisations are registered by the government.
(iii) They have to follow rules and regulations framed by it such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shops and Establishments Act etc.
(iv) They give many kinds of job benefits to its employees.
(v) Working conditions are very conducive in organized sector.

Q7: Rohan works in a bank as a clerk while Sumit works on a construction site as a labourer. Find out the difference in their conditions of work and judge the benefits and drawbacks of working in the respective sectors.
Ans: Rohan works in an organised sector; he will enjoy security of employment. He will be expected to work only for a fixed number of hours. If he works more, he will have to be paid overtime by the employer. He will also get several other benefits from the employers like getting paid leave, payment during holidays, provident fund, gratuity etc. He is supposed to get medical benefits and, under the laws, the bank manager has to ensure facilities like drinking water and a safe working environment. When he will retire, he will get pension as well. In contrast, Sumit works in the unorganised sector which is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. So, his job will be low-paid and often not regular. There will be no provision for overtime, paid leave, holidays, leave due to sickness etc. Employment is not secure. He can be asked to leave without any reason when there is less work, such as, during some seasons. A lot also depends on the whims of his employer.

Q8: Mr. Swaminathan works in a government textile mill. Now the government is planning to sell that mill to a company in private sector. What can be the demerits of private sector?
Ans: Following are some of the demerits of private sector :
(i) The very first demerit of private sector is its sole purpose is to earn profit and not the welfare of people. The people here include the employees of the organisation. If the owner of an enterprise feel that removing or reducing his staff will increase his profits, he will not hesitate to remove people from the job. This will lead to a sense of insecurity among the people of the organisation.
(ii) There are many services which are required by the poorer sections of the society which the government provides them free of cost or at very cheap prices like health, education, irrigation, etc. If the mill is assigned to a private sector, it will not provide these service free or at subsidised rates and the poor sections of the society will not be able to afford and consume them.
(iii) The private sector is also not concerned with the equitable distribution of income in society or the balanced regional development.

Q9: Explain how public sector contributes to the economic development of a nation.
Ans: Following are the various ways in which the public sector contributes to the development of the nation:
(i) The public sector is responsible for developing basic infrastructure which helps in development of all the sectors of the economy. Hence, the public sector undertakes generation of electricity, construction of roads, bridges, railways, harbours, and providing irrigation through dams etc. The expenditure incurred on developing such facilities is tremendous which may not be possible for private sector.
(ii) The government supports the provision of various services to the general public in the form of subsidies. For example, for the availability of fertilisers to farmers at lower prices, the government provides production subsidy to fertiliser companies. Similar examples are cooking gas, diesel, electricity etc.
(iii) The government provides support to farmers by helping them in the form of procurement of farm products like wheat, rice and pulses. Such products are then made available to people through ration shops.
(iv) The government provides various such other services like medical care, education, drinking water, sanitation, housing facilities to poor and other administrative services for the proper running of the country etc.
(v) The public sector generates many employment opportunities.

Q10: What historical changes have been brought about in the primary, secondary and tertiary sectors ?
Ans: Primary Sector :

• As the methods of farming changed and the agricultural sector began to prosper, it produced much more food than before.
• Many people could now take up other activities. Buying and selling activities increased many times.
• However, at this stage most of the goods produced were natural products from the primary sector and most people were also employed in this sector.

Secondary Sector :

• Over a long time, and especially because new methods of manufacturing were introduced, factories came up and started expanding.
• Those people who had earlier worked on farms now began to work in factories in large numbers.
• Secondary sector gradually became the most important sector in the total production and employment.
• Hence, over time, a shift had taken place. This means that the importance of the sectors had changed.

Tertiary Sector :

• In the past 100 years, there has been a further shift from secondary to tertiary sector in developed countries.
• The service sector has become the most important sector, in terms of total production.
• Most of the working people are also employed in the service sector. This is the general pattern observed in developed countries.

Objective Type Questions
Q1: Which of the following is not true about development?
a. Different people usually have the same goals.
b. Different people can have different goals.
c. Different people can have different as well as conflicting goals.
d. Different people can have different as well as conflicting goals regarding national development.
Ans: A

Q2: Which statement does not justify the need for provision of public facilities
a. Income itself indicate the ability to utilize goods and services
b. Public facilities are provided because people need them
c. Providing public facilities collectively reduces costs
d. Income itself cannot indicate the ability to utilize goods and services
Ans: A

Q3: Which one of the following is not a base for preparation of Human Development Index (HDI)
a. Literacy rate
b. Life expectancy
c. Industrialization
d. Per capita income
Ans: C

Q4: Which of the following is the most important component for comparing different countries
a. Resources
b. Youth in population
c. Per capita income
d. Life expectancy
Ans: C

Q5: Which criteria is used by World Bank for classifying countries?
a. Literacy Rate
b. Life Expectancy
c. Enrolment percentage
d. Per Capita income
Ans: D

Q6: Kerala has low infant mortality rate because it has
a. Low provision of basic health and educational facilities
b. Adequate provision of basic health and educational facilities
c. High mortality rate among elderly people
d. None of the above
Ans: B

Q7: Body mass index is used to calculate
a. Nourishment level
b. Body growth
c. Only a
d. Both a and b
Ans: D

Q8: Assume there are five families in a country. The average per capita income of these families is Rs 10000. If the income of three families is Rs 9500, Rs 10500, Rs 10200 and Rs 9800 respectively, what is the income of the fifth family?
a. Rs 10000
b. Rs 10500
c. Rs 20220
d. Rs 5800
Ans: A

Q9: Which of the following is not a reason for a person which will not prevent him from joining a job which pay high salary?
a. Job security
b. Work environment
c. Facilities for family
d. Power
Ans: D

Q10: Which of the following is true when industrialists want more dam to get more electricity but tribals oppose it?
a. Different persons can have different developmental goals
b. What may be development for one may not be development for the other.
c. For development, people look at a mix of goals.
d. Different persons could have different as well as conflicting notions of a country’s development.
Ans: B

Very Short Answer Type Questions
Q1: The total income of the country divided by its total population is Called
Ans: Per capital income

Q2: Which organization publishes the Human Development Report?
Ans: UNDP

Q3: Which state in has the highest literacy rate?
Ans: Kerala

Q4: As per Human Development Report 2006 which neighboring country has the highest income?
Ans: Sri Lanka

Q5: What is sustainable development?
Ans: Development that does not compromise the needs of the future generation.

Q6: Development of a country can generally be determined by ____________
Ans: Per capita income

Q7: Which of the state has low infant mortality rate?
Ans: Kerala

Q8: What is the full form of HDI?
Ans: Human Development Index

Q9: Which areas of the world has the largest crude oil reserves?
Ans: The Middle East.

Q10: Besides money what are the other developmental goals?
Ans: Respect, Security, Pollution Free environment, etc.

Short Answer Type Questions
Q1: What does development mean for a landless rural labourer?
Ans:  More days of work and better wages; local school is able to provide quality education for children; there is health facilities, and there is no social discrimination.

Q2: Do all people of a country have the same notion of development?
Ans:  No. Different persons can have different goals. What may be development for one may not be development for the other. It may even be destructive for the other.

Q3: What are the development goals of people other than income?
Ans:  Besides seeking more income, people also seek things like equal treatment, freedom, security, and respect for others.

Q4: Which is the most important criterion for comparing development of countries/states?
Ans: Income/ Per capita Income.

Q5: What is meant by total income of a country?
Ans: Total value of all goods and services produced within a country and the income coming from abroad in a given period of time.

Q6: What is ‘Average Income’ Or ‘Per capita Income’?
Ans: Percapita Income is obtained by dividing the national income by the population of the country.
PCI=TOTAL INCOME OF A COUNTRY
TOTAL POPULATION

Q7: What is the main criterion used by World Bank in classifying different countries?
Ans: The World Bank classifies countries in its World Development Reports based on per capita income:

1. High-Income Countries (Rich Countries):
   • Per capita income of US$ 49,300 or above (as of 2019).
   • Generally referred to as developed countries, excluding Middle Eastern and certain other small countries.
2. Low-Income Countries:
   • Per capita income of US$ 2,500 or less.
3. Low Middle-Income Countries:
   • Countries with per capita income between US$ 2,500 and US$ 49,300.
   • Example: India, with a per capita income of US$ 6,700 in 2019.

These classifications help in understanding the economic status and development levels of different countries.

Q8: Why children in many parts of India are not able to achieve Secondary education?
Ans:  Children are not able to achieve secondary education because; government/ society have not provided adequate facilities.

Q9: Why does Kerala have low infant mortality rate?
Ans:  Kerala has low infant mortality rate because it has adequate provision of basic health and education facilities.

Q10 : What are the criterions used by the Human Development Report published by UNDP to compare countries?
Ans: Gross National Income (GNI) per capita (2017 PPP $), Life Expectancy at birth, Literacy Rate for 15+ yrs population.

Long Answer Type Questions
Q1: How did World Bank classify countries? What criterion did they use? What are its limitations?
Ans:

Classification:

• High-Income Countries: Per capita income of US$ 49,300 or above (2019).
• Low-Income Countries: Per capita income of US$ 2,500 or less.
• Middle-Income Countries: Per capita income between US$ 2,500 and US$ 49,300 (e.g., India at US$ 6,700 in 2019).

Criterion:

• Per capita income is the primary criterion used by the World Bank.

Limitations:

• Income Distribution: Doesn’t reflect inequality.
• Access to Services: Higher income doesn’t guarantee healthcare, education, or a clean environment.
• Quality of Life: Ignores factors like life expectancy and literacy rate.
• Non-Monetary Aspects: Excludes political stability, security, and environmental sustainability.

Q2: Give three examples where an average income is used for comparing situations.
Or Why do we use average income? What are the limitations to their use?
Ans:

• The per capita income or the average income is used to compare economic development of countries.
• We use averages to identify and analyse performance level in different areas.
• It is used to compare different situations and to find out the strong and weak points.
• We use averages to make calculations easier and averages reveal general performance level.
• There are limitations to their use.
• Averages will not represent the actual performance.
• When we take the average of similar performance or similar amount, it is meaningful.
• However, when we calculate two extremes or a number of very low performances and a very high performance, the average will not tell the exact situation.
• Q3: Why do you think average income is an important criterion for development? Explain.
  Ans:
  Average income represents the total income of a country keeping in view of the total population.
• If the average income is adequate to meet the basic requirement and other facilities that country is considered developed.
• More income means more of all things that human beings need.
• Whatever people like and should have, they will be able to get with greater income.

Q4: Money in your pocket cannot buy all the goods and services that you may need to live well.
OR Prove by giving examples that income itself is not a completely adequate indicator of material goods and services that citizens were able to use.
Ans:

• The per capita income of Haryana and Kerala is Rs. 1,80,174 and Rs. 1,63,475 by the year 2018–19.
• Though the per capita income of Haryana was much higher than Kerala.
• But their infant mortality rate is 30 and it is higher than 10 in Kerala and literacy rate is 82 % in Haryana and 94 % in Kerala. Money cannot buy all the goods and services that we need to live well. It cannot buy a pollution free environment or ensure that we get unadulterated medicine.