Economics (Objectives) PDF

FYJC
ECONOMICS
(OBJECTIVES)
© 2018
INDEX
ECONOMICS
S.N. Chapter Name Pg. Nos.

Section A
1. Economic Growth And Economic Development 1–8
2. Quality of Human Life 9 – 12
3A. Population 13 – 23
3B. Poverty 24 – 32
3C. Unemployment 33 – 45
3D. Current Challenges 46 – 50
Economic Reforms Since 1991 and its main
4. 51 – 55
features
5. Economic Planning 56 – 65
6. Infrastructure Development In India 66 – 79
Section B
7. Introduction to Statistics 80 – 83
8. Collection and Organization of Data 84 – 92
9. Graphical Presentation of Data 93 – 106
10. Measures of Central Tendency 107 – 113
11. Index Numbers 114 - 116
FYJC
OBJECTIVE QUESTIONS
Q.1. (A) Select the correct answer from the options given below and rewrite the
statements :
*(1) Economic growth without ........................ is possible.
(a) economic development (b) education
(c) capital (d) trade
*(2) In modern times, the ........................ is an economic leader.

(a) entrepreneur (b) actor
(c) social worker (d) minister
(3) Industrial development increases ........................

(a) poverty (b) urbanization
(c) population (d) unemployment
*(4) Per capita income is ........................ divided by the total population.

(a) per capita consumption (b) national income
(c) human development (d) net national product
(5) Economic development is related to ........................ changes.

(a) Qualitative (b) easy
(c) Quantitative (d) narrow
*(6) Per Capita Income is the average income .......................

(a) per head (b) national
(c) net (d) gross
(7) ........................ is the money value of all goods and services produced in a country
during a year.
(a) National Income (b) Net national product
(c) Per Capita Income (d) Human development
(8) Productivity in ........................ depends upon land and labour productivity.

(a) agriculture (b) industry
(c) quality (d) quantity
(9) ........................ refers to process of enlarging people’s choices and well-being.

(a) Human development (b) Economic development
(c) Social development (d) Industrial development
Economics 1 Economic Growth & Economic Development

FYJC
(10) ........................ national income means the total output of goods and services.
(a) Real (b) Per Capita (c) Gross (d) capital
Total Pr ivate Consumption

(11) ............................... =
Total population
(a) Per capita consumption (b) Per capita increase
(c) Gross national income (d) net national product
(12) Environment balance is implied in the term ....................

(a) Economic growth (b) Economic development
(c) Industrialisation (d) Commercialisation
(13) Economic growth means ........................ .

(a) less output (b) more output
(c) zero output (d) stable output
(14) Economic development is a ........................ .

(a) narrow concept (b) broad concept
(c) easy concept (d) quantitative concept
(15) Indian industries got an opportunity to expand during the ........................ .

(a) 5th plan (b) 2nd plan
(c) 9th plan (d) 1st plan
Ans. (1) Economic development (2) entrepreneur (3) urbanization (4) national income (5)
Qualitative (6) per head (7) National Income (8) agriculture (9) Human Development (10)
Real (11) Per capita consumption (12) Economic development (13) more output (14) broad
concept (15) 2nd plan
(B) Match the following with Group ‘A’ with Group ‘B’:
(1)
Group ‘A’ Group ‘B’
(1) Agriculture (a) Deliberate and planned growth
(2) Economic Development (b) National growth
(3) Economic Growth (c) Average consumption
(4) Industry (d) Secondary sector
(5) Per Capita Consumption (e) Primary sector
(f) Total consumption divided by
population
(g) National Income
(h) Net national product
Ans. (1 – e); (2 – a); (3 – b); (4 – d); (5 – c)

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(2)
(1) Economic Growth (a) Economic development
(2) Economic development (b) Increase in real GNP
(3) Per capita income (c) Low economic welfare
(4) Institutional and structural changes (d) National income divided by
population
(5) Socially undesirable goods (e) Total consumption divided by
population
(f) Improvement in the quality of life
(g) More output
(h) Quantitative concept
Ans. (1 – b); (2 – f); (3 – d); (4 – a); (5 – c)
(C) State whether the following statements are True or False:

*(1) Economic development is not so important for a country like India.
*(2) Economic growth means increase in real national income.
*(3) Economic development involves only economic growth.
*(4) Economic development is a smooth and simple process.
(5) Industrial sector is gradually growing in India.
(6) India is a developed country.
(7) Per Capita Income shows the standard of living.
(8) Economic development considers quantitative factors.
(9) High birth rate is found in developing countries.
(10) High PCI is the only indicator of economic development.
(11) Economic growth leads to an increase in the output of goods and services in an
economy over a period of time.
(12) Economic growth is a short term phenomenon.
(13) Economic growth is a continuous and steady process.
(14) Economic development implies a shift of population from agriculture to industry.
(15) Industrial process does not play any significant role in the economic development of a
country.
Ans. (1) False (2) True (3) False (4) False (5) True (6) False (7) True (8) False (9) False
(10) False (11) True (12) False (13) True (14) True (15) False
Q. 2. (A) Define or Explain the following concepts:

*(1) Economic growth:
Ans.
(a) Economic growth means an increase in the real national income (national output)
of the country.
(b) According to J. K. Mehta “Economic growth indicates the quantitative increase in
national income.”

FYJC
(c) According to Prof. Miller “Economic growth is a process whereby, an economy’s
real per capita income increases over a longer period of time.”
(d) According to Simon Kuznet “Economic growth is a long term rise in capacity to supply
increasing diverse economic goods to its population, and this growing capacity being
based on advanced technology, and the institutional and ideological adjustments that
it demands.”
*(2) Industrial progress:

Ans.
(a) Economic development is measured in terms of industrial progress, that is, in terms of
proportion of labour force engaged in industrial activity and the proportion of national
output originating in the industrial sector.
(b) Industrial progress plays a dominant role in the economic development of a country.
(c) It is an important means to increase the national output and per capita income.
(d) As the process of industrialisaton starts, the share of industrial sector in GDP
increases.
(e) Further, the benefits of industrial progress will start flowing to other sectors leading to
a rise in employment, output and income.
(f) Besides the process of industrialisation is associated with modernization, urbanization,
education, technical knowledge, etc.
*(3) Per Capita Income:

Ans.
(a) Per Capita Income is another important indicator of economic development.
(b) It indicates economic welfare of the country.
*(4) Structural Transformation:

Ans.
(a) The structural changes in the economy is accompanied by changes in attitudes,
ideologies and institutions.
(b) Such changes are ingredients of development and hence can be considered as
indicators of economic development.
(c) The social and ideological transformation leads to urbanization and modernisation.
*(5) Per Capita Consumption:

Ans.
(a) Per Capita Consumption means the average consumption expenditure of people in a
country.
(b) We can obtain it by dividing the total private consumption expenditure by total
population.
(c) It gives us a better understanding of the standard of living of the people in a country.
(d) In poor countries, per capita consumption is the lowest.
*(6) Economic development:

Ans.
(a) Economic development is a change that happens in an economy by giving a
deliberate “push” to the ongoing economic growth.
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(b) The symptoms of economic growth are a sharp increase in the GDP or GNR reduction
in the share of agriculture sector and an increase in the share of industrial sector in
the National Income etc.
(c) The overall well-being of the people would increase due to the rise in per capita
income and per capita consumption.
*(7) Physical Quality of Life :

Ans.
(a) Physical Quality of Life refers to the overall well- being of the people which depends
upon life expectancy, infant mortality and literacy.
(b) It depends not only on economic factors but also on socio-political factors.
(c) The socio-political factors are environment, national security, personal safety, political
freedom, etc.
Q.2. (B) Give reasons or explain:

*(1) Economic growth is a quantitative concept.
Ans.
(a) According to ]. K. Mehta, economic growth indicates the quantitative increase in
national income.
(b) The term economic growth draws our attention towards size or quantity.
(c) It has a quantitative dimension.
(d) With growth of population, goods and services will increase, national income and per
capita income will also rise.
(e) In the long run, we can see a quantitative change in all the fields of the country.
(f) With a deliberate effort, if the government makes some attempts, the quantitative
change can be translated into qualitative improvement and economic development.
Therefore, economic growth is a quantitative concept.
*(2) Industrial progress is an important indicator of economic development.

Ans.
(a) Economic development means a qualitative change in all social and economic fields of
an economy.
(b) Industrial progress plays a dominant role in this process of economic development.
(c) Industrial progress will make a drastic change in the employment level.
(d) With more employment, income will rise.
(e) The rising income will lead to an increase in the consumption of quality goods and
services, which will again lead to an increase in employment and income.
(f) A rise in income will also improve the savings and capital formation, which will
ultimately result in more investment.
Thus, for the economic development of a country industrial progress is an important
indicator.
Q.3. State with reasons whether you agree or disagree with the following statements:
*(1) An entrepreneur plays a dominant role in the economic development of a
country.
Ans. Yes, I agree with the statement.

FYJC
A person who runs an enterprise is called an entrepreneur. History of all developed
countries show that quality entrepreneurs have played a significant role in the
development of those countries. When an economy is at the growing stage, it requires
a group of talented and committed entrepreneurs to take the risk of keeping the
wheels of economy moving. They will find business opportunities and make
innovations into their business to make their activities profitable. This will benefit the
country as there are a number of entrepreneurs trying to make their business
profitable. There are a number of talented dynamic entrepreneurs such as Ambani,
Birla, Tata, Godrej, Narayan Murthy, Azim Premji, etc., who have played a very
significant role in the economic development of India. Hence, quality entrepreneurship
is a crucial indicator of economic development.
*(2) The concepts of economic development and economic growth are the same.
Ans. No, I disagree with the statement.
The terms ‘growth’ and ‘development’ seem to be same in literal terms, but in
economics both terms are used to show different aspects.
In economics, ‘growth’ is natural but ‘development’ is deliberate. For example, due to
population growth, there will be a natural and spontaneous increase in the number of
schools, colleges and hospitals. This is called ’growth’. Along with the increase in the
number of institutions, if there is an improvement in the discipline, quality of education,
improvement in result, improved facility of treatment, advanced technology of medical
treatment, etc., then it is called ‘development’. Therefore, the term ‘growth’ is co-
related to quantity, while ‘development’ is related to the quality. During the process of
growth, the country will undergo several developments. Hence, concepts of economic
development and economic growth are different.
Q.4. Distinguish between :

(1) Economic Growth and Economic Development
Economic Growth Economic Development
Meaning
Economic growth means a continuous long Economic development refers to economic
term process whereby a country’s national growth plus progressive changes in certain
income increases. variables which determine the well-being of
the people.
Scope
Economic growth is a narrow and Economic development is a broader and
quantitative concept. qualitative concept.
Possibility
Economic growth is possible without Economic development is not possible
economic development. without economic growth.
Relevance
Economic growth is relevant for developed Economic development is more useful for
countries where the quality of life is highly less developed countries (LDCs) because
developed. development can improve their level of
living.

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Priority
In economic growth, more importance is In economic development, distribution gets
given to the production of goods and priority.
services. Share in National Income
In economic growth, the share of In economic development, the share of
agriculture is more in national income. agriculture declines and that of the industry
and service sector increases.
Dimension
Economic growth is a one-dimensional Economic development is a multi-
concept as it deals with only economic dimensional concept which covers
aspect. economic and non-economic factors.
Nature
Economic growth is spontaneous and Economic development is deliberate and
reversible. irreversible.
(2) Economic Development and Sustainable Development
Economic Development Sustainable Development

Meaning
It refers to the increase in real per capita It refers to the growth and welfare of
income and economic welfare of the the present generation as well as future
people over a period of time. generations.
Scope
It is generally associated with the It is generally associated with both
developing countries. developed and developing countries.
Emphasis
Environmental protection and pollution Greater emphasis is given to pollution
control are not emphasised here. control and environmental protection here.
Priority
Rational utilization and preservation of It gives special attention to the utilization
natural resources to protect the interests of and preservation of resources to satisfy the
the future generations are not considered. needs of the present and future
generations.
Concerned with
It is concerned with the technical, structural It is not concerned with technical, structural
and institutional changes in the economy. and institutional changes.
Both Economic Development and Sustainable Development are concerned with the
equitable distribution of income and wealth. Both are concerned with maximizing the
welfare of the people. While the former is concerned with the present generation, the
latter is concerned with the present as well as future generations.

FYJC
(3) Per Capita Income and National Income
Per Capita Income National Income
PCI is the average income per person in the NI refers to the total market value of all
country. final goods and services produced by a
country during a year.
NI NI = C + l + G + (x – m) + (r - p) - D – IT +
PCI =
Total population S
In India, PCI has grown at a slower rate as In India, NI has grown at a faster rate as
compared to NI. compared to PCI.
(4) Agriculture and Industry

Agriculture Industry
Agriculture belongs to the primary sector Industry belongs to the secondary sector
of the economy. of the economy.
It deals with obtaining resources from It deals with converting raw materials from
nature. nature into finished products.
Its contribution to GDP in 1950-51 was Its contribution to GDP in 1950-51 was
55%, and in 2009-10 was 17%. 12%, and in 2009-10 was 26%.
67.2% of people were employed in As per 2007-08 data, 19% of people were
agriculture at the time of independence and employed in the industry.
this has come down to 56% in 2007-08.

FYJC
OBJECTIVE QUESTIONS
Q.1. (A) Fill in the blanks with appropriate alternatives given in the brackets:
*(1) PQLI is developed by ........................ .
(a) Morris D. Morris (b) UNDP
(c) Manmohan Singh (d) Amartya Sen
*(2) Life expectancy at birth according to 2011 census is ........................ .

(a) 66.8 years (b) 60 years
(c) 0.956 (d) 0.647
*(3) HDI of India mentioned in HDR 2010 is ........................ .

(a) 0.595 (b) 0.406 (c) 0.956 (d) 0.647
*(4) India’s HDI rank in 2010 is ........................

(a) 127 (b) 120 (c) 136 (d) 119
(5) The HDI calculates the expectancy of life at the age of ........................ .
(a) zero (b) one (c) five (d) ten
(6) The ........................ has developed HDI .

(a) UN (b) UNDP (c) World Bank (d) IMF
(7) In HDI, the adult literacy rate implies the persons above the age of ........................
years.
(a) 14 (b) 15 (c) 18 (d) 21
(8) The ........................ ratio in the HDI includes primary, secondary and higher education.
(a) Gross enrolment (b) Gross literacy
(c) Drop out (d) Gender
(9) The PQLI was developed by Morris D. Morris for........................ developed and
developing countries.
(a) 23 (b) 53 (c) 103 (d) 153
(10) Infant mortality is the rate of the children dying before reaching age of ........................
year(s), out of every 1000 children.
(a) one (b) five (c) two (d) ten
Economics 9 Quality of Human Life

FYJC
(11) The infant mortality rate in India was ........................ per 1000, according to 2011
census.
(a) 25 (b) 47 (c) 77 (d) 97
(12) The literacy rate in India is ........................% as per 2011

(a) 62.2 (b) 71.3 (c) 74.04 (d) 81.5
(13) The HDI was prepared under the able guidance of.........................
(a) Manmohan Singh (b) Amartya Sen
(c) Mahabub-Ul-Haq (d) Morris D. Morris
Ans. (1) Morris D. Morris (2) 66.8 years (3) 0.647 (4) 119 (5) zero (6) UNDP (7) 15
(8) Gross enrolment (9) 23 (10) one (11) 47 (12) 74.04 (13) Dr. Mahabub-uI-Haq
(B) Match the following Group ‘A’ with Group ‘B’ :

(1)
(1) USA (a) Medium HD Group
(2) India (b) 1990
(3) PQLI (c) High HD Group
(4) HDI (d) 1979
(5) Human development (e) Poverty line
(f) Enlarging people’s choices
(g) World development perspective
(h) Developed for 183 countries.
Ans. (1 – c); (2 – a); (3 – d); (4 – b); (5 - f)
(2)
(1) Morris D. Morris (a) HDI value between 0.5 and 0.8
(2) UNDP (b) HDI value between 0.4 to 0.6
(3) High HD category (c) HDI value below 0.5
(4) Medium HD category (d) HDI value above 0.8
(5) Low HD category (e) PQLI
(f) HDI
(g) Poverty line
(h) World development perspective
Ans. (1 – e); (2 – f); (3 – d); (4 – a); (5 – c)

*(1) It is very easy to measure the quality of life.
*(2) India is included in High HD Group.
(3) The PQLI takes into consideration psychological factors.
FYJC
(4) A high GDP guarantees high level of human development.
(5) The UNDP prepares the Human Development Report (HDR) every year.
(6) The HDI is a complete measure of economic development and welfare.
(7) The HDI is a yardstick to measure economic development in terms of quality of life.
(8) The quality of life refers to the overall well-being of the people.
(9) India’s HDI value has increased from 0.301 in 1990, to 0.647 in 2010.
(10) Indian economy is growing at an average rate of 5.5 % since 1991.
Ans. (1) True (2) False (3) True (4) False (5) True (6) False (7) True (8) True (9) True (10)
False

*(1) Human development: Ans.
(a) In 1990, the United Nations Development Programme (UNDP) has developed a
composite measure of economic and social progress to find out the quality of human
life.
(b) It is popularly known as Human Development Index prepared under the able guidance
of a well-known economist, Mahabub-Ul-Haq.
(c) HDI is being prepared and published in Human Development Report (HDR) every
year by UNDP since 1990.
(d) In this report, various elements of human development are discussed and countries
are arranged according to the index.
Meaning of Human Development
In 1997, UNDP has defined human development as ‘a process of enlarging people’s
choices and the level of well-being’. According to HDR, the three most important
choices are :
(1) To lead a long and healthy life
(2) To acquire knowledge
(3) To enjoy a decent standard of living.
Apart from these, people also desire political freedom, guaranteed human rights and
self-respect.
(2) Infant Mortality Rate Ans.

(a) It is the number of children dying before reaching the age of one year, out of every
1000 children.
(b) It is 47 per 1000 in India, according to 2011 census.
(c) High Infant Mortality Rate is harmful for economic development.
(3) Educational attainment

Ans. Educational attainment which is measured through a combination of adult literacy and
combined enrolment, covers primary, secondary and university education.

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Q. 3. Distinguish between:
(1) PQLI and Per Capita Income :
PQLI Per Capita Income

It measures the quality of life of the people. It measures the standard of living of the
people.
It incorporates the welfare considerations It takes into consideration only the rise in
by measuring the ends of development in income.
terms of the quality of life.
It incorporates the distribution It does not incorporate distributional
characteristics by taking the national aspects of rise in per capita income.
averages of life expectancy, Infant mortality
and literacy rates.
LEI  IMRI  LRI NI
PQLI = PCI =
3 Population
(2) High HD Group and Low HD Group

High HD Group Low HD Group
Countries having HDI more than 0.8 are Countries having HDI less than 0.5 are
classified as High HD group. classified as Low HD group.
e.g. Norway, USA, Japan. e.g. Pakistan, Bangladesh
(3) Physical Quality of Life Index (PQLI) and Human Development Index (HDI):
Physical Quality of Life Index (PQLI) Human Development Index (HDI)
It is the composite indicator to measure It is the composite measure of economic

economic development on the basis of and social progress to fi out the quality of
certain economic and non- economic factor. human life.
PQLI is based on three indicators such as: HDI can be measured on the basis of
(i) Life Expectancy people’s choice:
(ii) Infant mortality (i) To lead a long and healthy life.
(iii) Literacy rate (ii) To acquire knowledge.
(iii) To enjoy a decent standard of living.
PQLI in poor countries is always very low. As and when the country starts developing,
the HDI should also improve.

FYJC
OBJECTIVE QUESTIONS
Q. 1. (A) Fill in the blanks with appropriate alternatives given in the brackets:
*(1) The difference between birth rate and death rate is called ........................ .
(a) birth rate (b) survival rate
(c) fertility rate (d) mortality rate
*(2) According to 2001 census, India’s population was ........................ crores.

(a) 121.02 (b) 102.7
(c) 157 (d) 124
*(3) The year ........................ is described as the ‘Year of Great Divide’.

(a) 1921 (b) 1947
(c) 1951 (d) 1971
*(4) India’s population is ........................ largest in the world.

(a) 1st (b) 4th (c) 2nd (d) 5th
*(5) Family planning programme was introduced in the year ........................ .

(a) 1950 (b) 1952
(c) 1942 (d) 2000
(6) Population is the ........................ of a nation.

(a) natural resource (b) capital
(c) human resource (d) none of the above
(7) According to ........................, “Human resource constitutes the ultimate basis for the
wealth of nation”.
(a) Adam Smith (b) Alfred Marshall
(c) Lord Keynes (d) Harrison
(8) Every year, India adds the population of ........................ crores.

(a) 0.98 (b) 1.8 (c) 1.18 (d) 1.28
(9) India accounts for world’s ........................% land area.

(a) 2.4 (b) 4.2 (c) 7.5 (d) 17.5
Economics 13 Population
FYJC
(10) Birth rate and death rate are measured in terms of per ........................ of population.
(a) ten (b) hundred
(c) thousand (d) ten thousand
(11) From 1981 onwards, the population growth rate is slowly ..........................
(a) declining (b) increasing
(c) deteriorating (d) changing
(12) The programme of Family Planning in India is ............................ .

(a) successful (b) highly satisfactory
(c) satisfactory (d) unsatisfactory
(13) The concept of ‘Human Development’ was coined by ............................. .

(a) UN (b) UNDP
(c) World Bank (d) IMF
(14) High birth rate and high death rate are witnessed in the ........................ stage of
demographic transition.
(a) first (b) second
(c) third (d) fourth
(15) India has ........................ % of total world area.

(a) 4.2 (b) 2.4 (c) 3.4 (d) 1.4
(16) As per 2011, sex ratio in India is .........................

(a) 914 (b) 940 (c) 933 (d) 921
(17) Literacy rate in India is ......................... as per 2011 census.
(a) 65% (b) 65.38% (c) 74% (d) 80%
(18) The density of population as per 2011 census is ......................... per square kilometre.
(a) 324 (b) 382 (c) 392 (d) 267
(19) The life expectancy as per 2011 census is..........................

(a) 55 (b) 59.9 (c) 60 (d) 69.9
(20) As per 2011 census, infant mortality rate is ..........................

(a) 25 (b) 30.15 (c) 61 (d) 75
Ans. (1) survival rate (2) 102.7 (3) 1921 (4) 2nd (5) 1952 (6) human resource (7) Harrison
(8) 1.8 (9) 2.4 (10) thousand (11) declining (12) unsatisfactory (13) UNDP (14) first
(15) 2.4 (16) 914 (17) 74% (18) 382 (19) 69.9 (20) 30.15
FYJC
(1)
(1) Year of great divide (a) 74.04
(2) Literacy rate in 2011 (b) 914
(3) Sex ratio in 2011 (c) 1921
(4) Family Planning Programme (d) 2000
(5) Death rate in 2011 (e) 1952
(f) 7.48
(g) 1911
(h) 82.14
Ans. (1 – c); (2 – a); (3 – b); (4 – e); (5 – f)
(2)
(1) Unproductive consumers (a) Family planning
(2) Productive consumers (b) 1921
(3) Planned parenthood (c) Fertility rate
(4) No. of deaths per 1000 (d) Labour force
(5) Population Explosion (e) Child population
(f) Mortality rate
(g) Highest growth rate of population
(h) 1951
Ans. (1 – e); (2 – d); (3 – a); (4 – f); (5 – g)
(3)
(1) Family planning programme (a) 1921
(2) India’s population in 2011 (b) 1951
(3) Highest literacy (c) 121.02 crores
(4) Land-man ratio (d) Unfavourable
(5) No. of births per 1000 (e) Kerala
(f) Fertility rate
(g) Mortality rate
(h) 128.50 crores
Ans. (1 – a); (2 – c); (3 – e); (4 – d); (5 – f)
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(4)
(1) Birth rate (a) Most urbanised state
(2) Density of population (b) 1952
(3) 1921 (c) Year of Great Divide
(4) Family planning programme (d) No. of birth per thousand of living
population per year
(5) Maharashtra (e) No. of death per thousand of living
population per year
(f) Average no. of people per 1 sq. km
(g) Mortality Rate
(h) Kerala
Ans. (1 – d); (2 – f); (3 – c); (4 – b); (5 – a)

*(1) Density of population is low in India.
*(2) Death rate has declined faster than the birth rate.
*(3) Family planning programme is successful in India.
*(4) Birth rate in India is increasing.
*(5) Improvement in the status of women can check population growth.
(6) The population census is conducted every year.
(7) India has the largest population in the world.
(8) The rate of population growth had increased considerably since 1921.
(9) Population explosion is the root cause of all economic problems in India.
(10) Family planning is compulsory in India.
(11) Average life expectancy is low in India.
(12) Dependency ratio is high in India.
(13) Urbanisation is growing in India.
(14) India supported 17.5% of the world population in 2011.
(15) Indian population is a feminine population.
(16) India has a highest growth rate of population in the world.
Ans. (1) False (2) True (3) False (4) False (5) True (6) False (7) False (8) True (9) True
(10) False (11) True (12) True (13) True (14) True (15) False (16) True
Q.2. (A) Define or Explain the following concepts:

*(1) Birth Rate:
Ans. Birth rate or fertility rate means the number of births occurring per thousand of living
population in a year.
*(2) Death Rate:

Ans. The number of deaths per thousand of living population in a year is called death rate
or mortality rate.
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*(3) Population explosion:
Ans. Population explosion is a situation where the growth of population is faster than the
growth and development of the economy. The growing difference between the slowly
falling birth rate and rapidly declining death rate has kept the ‘survival rate’ high. This
is responsible for population explosion, since independence the population in India
has more than trebled from 36.1 crores in 1951 to 121.02 crores in 2011.
*(4) Family Planning:

Ans. Family planning implies prior determination of the size of the family. It also implies
decision regarding spacing between and the number of children decided by the
husband and the wife. This is meant to restrict the size of the family.
(5) Population:
Ans. Population is the human resource of a nation. It helps in the production of goods and
services from the available resources.
(6) Net Survival Rate:

Ans. Net Survival Rate is also described as population growth rate. It is measured on the
basis of actual difference in the birth rate and the death rate. For example, the birth
rate of the decade of 1971 – 1980 was 37.2 and the death rate was 15. Thus, the net
survival rate was 37.2 – 15.0 = 22.2.
Q.3. Distinguish between:

(1) Birth Rate / Fertility Rate and Death Rate / Mortality Rate :
Birth Rate / Fertility Rate Death Rate / Mortality Rate
It refers to the number of births per 1000 It refers to number of deaths per 1000
population. population.
In a poor but developing economy, birth In a poor but developing economy, death
rate is generally high. rate is lower than birth rate.
Birth rate falls slowly as the economic Death rate falls rapidly as the economy
development takes place. develops.
Birth rate can be brought down to a very Death rate cannot fall below a certain
low level and theoretically it can be zero. level.
(2) Working or productive population and Non-working or unproductive population:

Working or productive population Non-working or unproductive population
The proportion of population in 15-59 years The proportion of population in 0-14 age
age group is the working population. group and 60 + age group is the non-
working population.
They are the labour force and are called They are called unproductive consumers
productive consumers. as they depend on working population.
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A large number of efficient working An increase in the ratio of unproductive

population is an asset for a country, as they consumers places additional burden on
help to utilize natural resources and thus resources of the family as well as the
contribute towards rapid economic public utility services like education, health
development. etc. This is an important contributing factor
to the vicious circle of poverty and
underdevelopment in developing
countries.
(3) Optimum Population and Over-Population:

Optimum Population Overpopulation
Optimum population refers to the size of If the actual population is greater than the
population at which natural resources are optimum size, there is said to be
properly utilised and PCI is maximum. overpopulation
It is the most desirable size of population.It is undesirable because PCI starts falling
and a country faces food shortage.
Natural resources are properly utilised and Natural resources are overburdened and
an economy is said to be developed the growth of the economy is arrested.
economy.
Optimally populated countries have stable Overpopulated countries have high birth
birth rate. rate.
(4) Overpopulation and Underpopulation:

Overpopulation Underpopulation
Overpopulation refers to a situation where Underpopulation is a situation where the
size of the population cannot be supported existing population is not enough to exploit
with comfortable living with the existing the available resources fully.
resources.
It leads to problems like poverty, Increase in population helps to utilize the
unemployment and other social problems. existing resources more efficiently.
It becomes necessary to control population It becomes necessary to encourage
through various measures. increase in population through various
incentives.
It is a problem found mostly in developing It is a situation found in some developed
countries. countries.
Q.4. State whether the following statements are True or False with reasons.
*(1) Birth rate in India is controlled.
Ans. This statement is False.
Reasons:
According to 2011 census, birth rate in India is 20.97 which is very high as compared
to other developed countries. Main factors responsible for such a high birth rate are:
(a) Because of poverty, children at a very young age start helping their parents in earning
income. Hence, more children are welcomed into the family.
(b) Religious and social attitudes in India are such that large families are preferred.
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(c) Illiteracy, ignorance and non-availability of birth control devices are also responsible
for high birth rate in India.
(d) There is general lack of awareness and necessity of family planning.
Thus, birth rate in India is not controlled but it is very high for a poor country like India.
*(2) Birth rate in India is increasing.

Reasons:
(a) Although population in India is increasing, the birth rate in India is decreasing.
(b) If we see the birth rate and death rate table, we see that right from 1901, birth rate has
shown falling trend.
(c) Both birth rate and death rate are falling continuously but birth rate is declining much
slower than the fall in the death rate.
Hence it is not right to say that birth rate is increasing, but it is decreasing slowly in India.
*(3) Death rate in India is falling.

Ans. This statement is True.
Reasons:
(a) There has been availability of better medical facilities.
(b) There has been fall in infant mortality rate and post maternity deaths.
(c) Literacy rate is increasing.
(d) Better transport facilities are available.
(e) Through public health measures, better quality of food is available.
(f) Government has taken several steps to control natural calamities.
All the above efforts have contributed to the decline in death rate.
(4) The year 1921 is described as the “Year of Great Divide”.

Reasons:
(a) Before 1921, both birth rate and death rate were high. In fact in 1921, death rate was
little more than birth rate due to epidemic of influenza.
(b) But after 1921, although both birth rate and death rate started declining, birth rate
declined slowly but death rate started declining rapidly due to medical facilities, control
over natural calamities, etc.
(c) Hence, in the context of population growth, the year 1921 is a dividing line and
Census Commission of India has called this year as the “Year of Great Divide”.
*(5) Family planning programme has been very successful In India.

Reasons:
(a) People in India hesitate to follow family planning because of illiteracy, ignorance and
superstitions.
(b) Because of poverty, people cannot buy birth control devices.
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(c) Some religions do not believe in family planning. Although among the educated
people, this programme has been quite successful but among the uneducated people
it has not been very successful.
(6) India has entered the second stage of demographic transition.

Reasons:
(a) During the second stage of demographic transition stage, the death rate began to fall
more rapidly due to economic development, improvement in the standard of living,
improvement and advancement in science, transport, communication, health facilities
control of famines, epidemics, etc.
(b) But the birth rate remains almost at a high level causing net addition to the existing
population. There is rapid growth of population.
(c) It is called population explosion.
(d) At present, India is passing through the second stage of demographic transition stage.
(7) Rapidly rising population adds to unproductive consumers.

Reasons:
(a) Increasing population implies an addition to the unproductive population and feeding
them. This results in low savings, low investment, low capital formation and
underdevelopment.
(b) Increasing population calls for a huge investment in food, clothing, housing, hospitals,
public amenities etc. This reduces the availability of funds for productive investment.
(c) Increasing population boosts labour supply and adds to the problem of unemployment,
low standard of living, poverty, reduces the speed of capital formation, economic
development.
(8) Development is the best contraception.

Reasons:
(a) The long term solution to the problem of population explosion in India lies in the fast
economic development and rapid industrialization of the country.
(b) When the country is industrially advanced, its birth rate will forcibly come down under
economic compulsion.
(c) But without putting some initial check on the increasing growth rate, high capital
formation and industrialization is not possible.
(d) Deliberate family planning therefore turns out to be an essential feature of the rational
population policy in the country.
Q.5. State whether you agree or disagree with the following statements:
*(1) India is experiencing population explosion.
Ans. Yes, I do agree with the statement.
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Reasons:
(a) Population explosion is a situation where the growth of population is faster than the
growth and development of the economy. India’s population is very large and it is
growing rapidly.
(b) Population explosion depends on the birth rate and death rate of population. Birth rate
means the number of births occurring per thousand population in a year. Death rate
means the number of deaths occuring per thousand population in a year.
If BR = DR, population remains constant.
If BR < DR, population will decrease.
If BR > DR, population will increase.
(c) So, the cause for population explosion is high birth rate and low death rate. In India,
birth rate is falling at a slow rate. At the same time, death rate is falling at a faster rate.
(d) The causes of high birth rate in India is due to universal marriage, early marriages,
illiteracy, poverty, religious beliefs, tropical climate, joint family system, etc.
(e) The causes of the steep fall in the death rate is due to the control of natural calamities,
improved medical facilities, improvement in education, standard of living, rapid
urbanisation, control of infant mortality, post maternity deaths, etc.
(f) Due to the slow fall in the birth rate and faster decline in death rate, the population is
growing rapidly in India causing population explosion.
*(2) India’s growing population does not effect India’s development.

Ans. No, I do not agree with the statement.
Reasons:
India is passing through the stage of population explosion. The growing population has
affected
India in various ways which are given below:
Effects of population explosion:
(a) Pressure on land: The pressure of population on land is already high in India and it is
still rising further, as a result of the growing population. In 1921, the density of
population was 81, in 2001, it was 324 and now, in 2011 census, it is 382 per square
kilometre.
(b) Pressure on agriculture: The rising pressure of population on agriculture has led to
serious consequences like division and fragmentation of land holding. This has
created more small and marginal farmers with uneconomic holdings.
(c) Growing unemployment: Rising unemployment is accompanied by rise in labour
force of our country and has aggravated the problem of unemployment. According to
the Planning Commission, 26.58 million people were unemployed in 1999-2000.
(d) Food problems: In a country where population is growing at an alarming rate and the
availability of cultivable land rapidly declining, this has created a shortage of food for
human beings and fodder of the cattle.
(e) Environmental problems: Due to increase in population, a large number of people
live in slums, which are situated around factories emitting poisonous gases. They are
therefore exposed to all sorts of poisonous gases. Increase in population has also led
to deforestation resulting in degradation of natural environment by overusing natural
resources in the process of production.
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(f) Social problems: Most of our cities are overcrowded and suffer from problems of
inadequate transportation, supply of pure drinking water, housing and sanitation. It
also leads to anti-social and anti-national activities such as robberies, alcoholism,
gambling, extortions, crimes and murders, blackmarketing and terrorism.
(g) Low capital formation: Due to the rising population, a large part of national income is
used in consumption and very little is available for saving and investment. In most
cases, savings are zero and even negative. Therefore, capital formation tends to be
low.
(h) Other effects:
(i) Inflation
(ii) Low national income
*(3) The government of India has taken several measure to check population growth.
Reasons:
(a) India is passing through the stage of population explosion.
(b) The rapid growing population has affected India in various ways in its economic
growth.
(c) So, the government has taken several measures to check population growth which are
mentioned below:
Measures to check population explosion:
Population explosion is one of the major obstacles in the development. Thus, attempts
have to be made to control it. Broadly speaking, measures to control population
explosion can be classified under three heads:
(i) Economic measures
(ii) Social measures
(ii) Family Planning Programme
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(i) Economic measures: To control population growth, vigorous efforts are needed on
the economic front. In fact, only economic measures can ensure a permanent solution
to the problem. Industrial workers understand the difficulties of life, hence they restrict
the size of families. Urbanisation helps village people to get jobs in cities. Since the
cost of living is high, they prefer to have small families. When people are brought
above the poverty line, their attitude towards family changes and hence they limit the
size of their family.
(ii) Social measure: Education helps to wipe out superstitions, orthodoxy, ignorance and
traditional way, of living and induces people to practise family planning. If the status of
women is improved, then women can take up jobs and also decide about number of
children in their family. The minimum age of marriage has been raised to 21 years for
men and 18 years for women. This has proved successful in China, Malaysia and Sri
Lanka.
(iii) Family Planning Programme: The Government of India introduced the Family
Planning Programme in 1952.
In the initial stages, in order to bring awareness among the people, different media like
radio, cinema, television, posters and newspapers were used to publish the idea of
family planning. The Family Planning Centres were started in different parts of the
country to provide counselling and guidance regarding family planning and also to
distribute contraceptives free of cost to people. Research is undertaken by the
government as a priority in any family planning programme. The family planning
programme by the Government inspite of heavy investment is not successful to control
population growth, due to the lack of awareness among the people and inconsistent
policies of the Government.
FYJC
OBJECTIVE QUESTIONS
Q. 1. (A) Fill in the blanks with appropriate alternatives given in the brackets:
*(1) An average Indian requires ........................ calories from his daily consumption of
food.
(a) 2500 (b) 2250 (c) 2550 (d) 2200
*(2) ........................ poverty refers to the absence of minimum subsistence.

(a) Relative (b) Absolute
(c) General (d) Maximum
*(3) According to the Planning Commission, an individual in urban area requires

........................ calories per day.
(a) 2000 (b) 2100 (c) 2200 (d) 2400
*(4) ........................ poverty is an universal phenomenon.

(a) Absolute (b) Relative
(c) Urban (d) Rural
(5) The percentage of population living below the poverty line in India has progressively
.........................
(a) increased (b) decreased
(c) stable (d) unchanged
(6) Relative poverty exists even in the countries like ..........................

(a) the USA (b) Pakistan
(c) Bangladesh (d) Kenya
(7) The Antyodaya Anna Yojana was launched in December ..........................

(a) 1990 (b) 1995 (c) 1997 (d) 2000
(8) The line that divides the absolute poor and relative poor is called ...........................
(a) poverty line (b) line of control
(c) border line (d) marginal line
(9) The 20-Point Programme was started by the late Prime Minister ............................
(a) Rajiv Gandhi (b) P.V. Narasimha Rao
(c) Mrs. Indira Gandhi (d) Jawaharlal Nehru
Economics 24 Poverty
FYJC
(10) The Employment Guarantee Scheme was launched in the state of ................. in 1972.
(a) Maharashtra (b) Bihar
(c) Orissa (d) West Bengal
(11) More than two-third of the poor live in ..........................

(a) urban areas (b) rural areas (c) forests (d) Uttar Pradesh
(12) According to the tenth plan, the population below poverty line in 1990-2000 was
........................
(a) 20% (b) 26% (c) 30% (d) 36%
(13) ......................... is defined on the basis of nutritional minimum.

(a) Poverty line (b) Urban poverty
(c) Rural poverty (d) Relative poverty
(14) Those who live below the poverty line are called ........................ poor.
(a) absolutely (b) relatively
(c) marginally (d) positively
(15) ......................... means rise in general price level.

(a) Deflation (b) Inflation (c) Savings (d) Investment
Ans. (1) 2250 (2) Absolute (3) 2100 (4) Relative (5) decreased (6) the USA (7) 2000
(8) poverty line (9) Mrs. Indira Gandhi (10) Maharashtra (11) rural areas (12) 26%
(13) poverty line (14) absolutely (15) Inflation

(1)
(1) Per capita income (a) Universal phenomenon
(2) Employment Guarantee Scheme (b) Indicator of poverty
(3) Absolute poverty (c) 1972 policy
(4) Relative poverty (d) Developing countries
(5) 1986 (e) 1947
(f) 20 point programme
(g) Jawahar Rojgar Yojna
(h) Tenth Five Year Plan
Ans. (1 – b); (2 – c); (3 – d); (4 – a); (5 – f)
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(2)
(1) Poverty line (a) Rural poor
(2) Village artisans (b) Imaginary line
(3) Minimum Needs Programme (c) Class difference
(4) Rural poor (d) Lack of means to fulfill the basic
needs
(5) Urban poor (e) Provision for the basic needs in the
rural areas
(f) Small farmers
(g) Unorganised labour
(h) India
Ans. (1 – b); (2 – a); (3 – e); (4 – f); (5 – g)
(C) State whether the following statements are True or False.

*(1) Poverty is an age old problem.
*(2) India’s basic problem is relative poverty.
*(3) Rapidly rising population is the only cause of poverty in India.
*(4) The concept of ‘poverty line’ differs from country to country.
*(5) There is no poverty in urban areas.
(6) Poverty is an insufficient means to buy bare means of subsistence.
(7) There is no poverty in the developed countries.
(8) Absolute poverty cannot be removed.
(9) Poverty is the cause of increase in antisocial and criminal activities.
(10) Vicious circle of poverty exists in India.
(11) Poverty can be reduced by controlling the population growth.
(12) Poverty in the urban areas is greater than poverty in the rural areas.
(13) Relative poverty is the result of inequality in income.
(14) The rural migrants are the urban poor.
(15) The landless labourers are the rural poor.
(16) Regional disparity means unequal development among regions or states.
(17) The Employment Guarantee Scheme was introduced in Maharashtra state.
Ans. (1) True (2) False (3) False (4) True (5) False (6) True (7) False (8) False (9) True
(10) True (11) True (12) False (13) True (14) True (15) True (16) True (17) True

*(1) Poverty
Ans. Poverty is a major age old problem of India.
(a) The problem of poverty is now accepted as the biggest challenge to development
planning in India.
(b) Poverty is a social phenomenon in which a section of society is unable to fulfill even
its basic necessities of life.
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(c) When majority of the people are deprived of the minimum level of living and continue
at a bare subsistence level, they are said to be living in mass poverty.
(d) The less developed countries in the world exhibit invariably the existence of mass
poverty.
*(2) Absolute poverty

Ans.
(a) According to Planning Commission “A person who is unable to consume (from his/her
income) 2100 calories per day in urban areas, and 2400 calories per day in rural
areas (from his/her income) is considered to be absolutely poor.”
(b) This type of poverty is found in developing and underdeveloped countries.
(c) Absolute poverty can be eradicated.
*(3) Relative poverty

Ans.
(a) The concept of relative poverty is based on comparison of lower income group with
higher income group.
(b) It is also based on the comparison of the standard of living of the people of different
groups or regions.
(c) It is compiled in terms of per capita income and per capita consumption expenditure.
(d) Relative poverty is a universal phenomenon and found in all economies.
(e) It cannot be eradicated, and this is because unequal distribution of income and wealth
exists in all countries.
(f) The Gini coefficient is used to measure relative poverty.
(g) When poverty is taken in absolute terms and is not related to the income or
consumption expenditure distribution, it is absolute poverty.
(h) On the other hand, when poverty is taken in relative terms and is related to the
distribution of income or consumption expenditure, it is relative poverty.
(4) Poverty Line:

Ans.
(a) Poverty line refers to the minimum amount of income needed to maintain the minimum
level of living.
(b) It is an imaginary line that divides the absolute poor from the not so poor people.
(c) It is a minimum nutritional intake of a person .
(d) Those people who do not get this nutritional minimum are said to be living below the
poverty line.
(5) Rural Poverty:

Ans.
(a) Poverty among rural poor is known as rural poverty.
(b) It includes small and marginal farmers, landless agricultural labourers, village artisans,
etc.
(c) A person in rural area requires minimum intake of 2400 calories per day from his food.
(d) Those who do not get this minimum calorie intake are considered as absolutely poor.
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(6) Urban Poverty:
Ans.
(a) Poverty in urban areas is known as urban poverty.
(b) It includes unemployed people, migrated labourers from rural areas in search of jobs,
casual labourers etc.
(c) A person who consumes less than 2100 calories from his food intake per day is said
to be urban poor
(d) They live in unhygienic conditions.
Q.2. (B) Give reasons or Explain:

*(1) Absolute poverty can be eradicated.
Ans.
(a) Absolute poverty is a situation in which a person is unable to satisfy even the basic
needs of life such as food, clothing and shelter. It exists in poor, underdeveloped,
undeveloped and developing countries.
(b) Poor people suffer from hunger and starvation. They are from the economically
weaker sections of the society.
(c) It can be eradicated by various measures like control of population, rapid economic
development, land reforms, social security measures, etc.
(d) This will improve the economic conditions of the people.
*(2) Poverty is responsible for degradation of environment.

Ans.
(a) Urban poor live in slums. They live in unhygienic conditions.
(b) There is lack of drainage, toilets and basic amenities.
(c) There is overcrowding of people in urban areas.
(d) There are problems of all types of pollutions. i.e, noise, air, water, soil, etc.
(e) Water pollution is the main problem in urban areas. In most of the cities, sewage
treatment is low.
(f) There is lack of good drinking water.
(g) Due to overcrowding on roads, railways, traffic jams, noise pollution, there is a
psychological effect on urban people.
*(3) Vicious circle of poverty is one of the main cause of poverty in India.
Ans.
(a) India is poor because it is poor.
(b) In underdeveloped countries, total productivity is low due to deficiency of capital,
market imperfections, economic backwardness, etc.
(c) Low productivity is reflected in low real income.
(d) The low level of real income means low rate of saving.
(e) It leads to low investment and low capital formation. It leads to low production, low
employment and low income.
*(4) The Government of India should concentrate to alleviate rural poverty.

Ans. The Government of India has introduced many special measures and special
programmes to eradicate rural poverty.
They are as follows:
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(a) Rural Public Works
(b) Special Agencies Programme
(c) Minimum Needs Programme
(d) Integrated Rural Development Programme
(e) Drought Prone Area Programme
(f) National Rural Employment Programme, etc. Rural poverty can be removed through
the proper implementation of these measures.
*(5) Controlling population growth can reduce poverty in India.

Ans.
(a) The growth of population has been very high in India.
(b) When a certain income is divided among too many people, the per capita income is
bound to be low.
(c) So, there is low saving and low investment. It is essential to control the population
growth.
(d) The government has started family planning in 1952 and family welfare programme in
1966.
(e) Family planning centres have been set up in rural and urban areas.
(f) They persuade people to limit the size of the family.
(6) There are wide inequalities in India.

Ans.
(a) India is a democratic country. People have the right to property. In rural areas, a small
percentage of farmers control large areas of land.
(b) In secondary sector, a few industrial houses enjoy concentrated power and wealth.
(c) The earning capacity of people differs. It depends on their talent, education, skill, etc.
Thus, there are wide inequalities in the country.

*(1) Absolute Poverty and Relative Poverty:
Absolute Poverty Relative Poverty

Absolute poverty is a condition in which Relative poverty is based on comparison
even the basic needs of a person are not of lower income group with higher income
satisfied. group
People living below the poverty line are People above the poverty live are
absolute poor. generally relative poor.
It exists in developing and underdeveloped It is a universal phenomenon.
economies.
Absolute poverty can be eradicated. Relative poverty cannot be eradicated.
It can be measured by minimum calorie It can be measured by comparing incomes
intake. of various class of people.
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*(2) Rural Poverty and Urban Poverty:
Rural Poverty Urban Poverty
Poverty in rural area is called rural poverty Poverty in urban areas is called urban
poverty.
A person in rural area who is unable to A person in an urban area who is unable
consume 2400 calories per day from his to consume 2100 calories per day from his
income is said to be a rural poor. income is said to be a rural poor.
Rural poor are the landless labourers, small Urban poor are mostly the immigrants
and marginal farmers, rural artisans and from rural areas. They mostly live in slums
fishermen. or on pavements.
They are economically and socially They do not have regular or permanent
exploited by the rural rich. jobs since labour class is mostly
unorganized.
Large rural population coupled with lack of Rising labour force coupled with slow
employment opportunities are the important growth of industrial and service sector are
factors for rural poverty. the important factors responsible for urban
poverty.
Q.4. Do you agree :

(1) The concept of poverty is both absolute and relative.
Ans. Yes, I agree with the given statement because :
Reasons:
Poverty may be viewed from the two angles viz.,
(a) Absolute poverty and
(b) Relative poverty.
Absolute poverty refers to utter deprivation or lack of sufficient income to fulfil the basic
needs of human life. Relative poverty indicates the existence of large inequalities of income
between different income groups in the society. The income group having a lower income in
comparison to the other income group is considered to be relatively poor.
(2) Relative poverty is universal in nature.

Ans. Yes, I agree with the given statement because :
Reasons:
(1) Inequality of income is one of the unavoidable economic phenomena of the capitalist
countries although the degree of inequality varies from country to country.
(2) In a very rich country like the U.S.A., we find that some people are relatively poor.
They are poor as compared to the Americans in higher income groups.
(3) The percentage of relative poverty found in a rich country is not so high as in India.
Although in rich capitalist countries, the degree of inequality is less, there prevails
inequality i.e., relative poverty.
(3) No efforts have been made by the government to alleviate poverty.

FYJC
Reasons:
The following measures are taken by the government to alleviate poverty:
(A) General measures :

(i) Accelerate economic growth: Rapid economic development in agriculture and
industrial sectors generate more employment in the economy. This will increase
national income of the country and rate of economic growth and development.
(ii) Control of population : The government of India adopted family planning programme
in 1952 to control population growth. Family planning centres have been set up in rural
and urban areas.
(iii) Reduce economic inequalities : The extent of inequalities in wealth and income is
very high in India. The government should provide educational facilities to the poor
sections of the society. Training facilities, job-oriented courses, vocational guidance,
should be provided to them. It will improve the economic condition of poor.
(iv) Land reforms : Land reform measures like abolition of zamindari system, ceiling on
landholdings, security of tenure, etc. have been undertaken by government to improve
the economic conditions of poor people.
(v) Balanced regional development : The government should allocate more resources
towards backward regions and rural areas so that poverty and regional imbalances
can be removed.
(vi) Rural industrialisation : The government should promote small scale, village and
cottage industries in rural areas to generate more employment opportunities.
(vii) Provision of social security measures : The social security measures like provident
fund, old-age pension, free medical and health facilities, housing, etc., should be
provided for rural and urban poors. This will improve their standard of living.
FYJC
(B) Special measures : To eradicate poverty, the government has also implemented
many special programmes and Schemes like Minimum Needs Programme, Rural
Public Works, Integrated Rural Development Programme, Employment Guarantee
Scheme, special agencies like SFDA, MFALA, JRY, 20 points programme, etc. This
will help to improve the economic conditions of poor people.
(4) There are many consequences of poverty in Indian economy.

Ans. Yes, I agree with this statement.
Reasons:
There are many consequences of poverty on the Indian economy. They are as follows.
(A) Economic Evils

(i) Low national income and per capita income
(ii) Low standard of living
(iii) Unemployment
(iv) Low saving and investment
(v) Low productivity
(B) Social Evils

(i) Class conflicts
(ii) Dualism
(iii) Anti social activities
(iv) Anti national activities
(v) Undernourishment
(vi) Misery
(vii) Hardship
(viii) Starvation
(C) Political Evils
(i) Social injustice
(ii) Exploitation of poor
(iii) Lack of freedom for voting
FYJC
OBJECTIVE QUESTIONS
*(1) Defective education system causes ........................ unemployment.
(a) educated (b) technological
(c) rural (d) frictional
*(2) Unemployment during the off season is called ........................ unemployment.

(a) urban (b) seasonal
(c) disguised (d) involuntary
*(3) Disguisedly unemployed labour has ........................ marginal productivity.

(a) maximum (b) minimum (c) one (d) zero
*(4) Unemployment during recession is called ........................unemployment.

(a) frictional (b) structural
(c) cyclical (d) voluntary
*(5) Employment Guarantee Scheme was introduced in the state of ........................

(a) Karnataka (b) Maharashtra
(c) Kerala (d) Odisha
(6) Unemployment among the educated is found mostly in ......................... .

(a) urban areas (b) rural areas
(c) agriculture (d) industries
(7) The introduction of superior technology of production leads to ..........................

(a) increase in employment (b) cyclical unemployment
(c) technological unemployment (d) invisible Unemployment
(8) Workers are temporarily out of employment in .......................... unemployment.

(a) frictional (b) technological
(c) cyclical (d) structural
(9) Trade cycles cause .......................... unemployment.

(a) frictional (b) cyclical (c) technological (d) invisible
Economics 33 Unemployment
FYJC
(10) Rural Landless Employment Guarantee Programme was launched on 15th August,
...........................
(a) 1947 (b) 1950 (c) 1983 (d) 1997
(11) Cyclical unemployment occurs in the ........................... phase of economic activity.

(a) downswing (b) upswing
(c) trade (d) industrial
(12) When a person who does not wish to work, it is known as a situation of
........................... unemployment.
(a) involuntary (b) voluntary
(c) full employment (d) structural
(13) If demand changes due to the change in government policies and then unemployment
occurs, it is known as ........................... unemployment.
(a) frictional (b) structural
(c) cyclical (d) voluntary
(14) ........................... unemployment is chronic and poses a serious problem in India.

(a) structural (b) frictional
(c) involuntary (d) voluntary
(15) Educated unemployment results in ..........................

(a) economic drain (b) brain drain
(c) disguised unemployment (d) frictional unemployment
(16) Decline of handicrafts has been responsible for .......................... unemployment.

(a) rural (b) urban (c) structural (d) frictional
(17) In .........................., there is complete wastage of manpower.

(a) Underemployment (b) Disguised unemployment
(c) Cyclical unemployment (d) Voluntary unemployment
(18) Unemployment occurring due to power cut is called .......................... unemployment.

(a) Cyclical (b) Frictional (c) Disguised (d) Structural
(19) Workers working in agro-based industries face .......................... unemployment.

(a) Cyclical (b) Seasonal (c) Full (d) Involuntary
(20) Indian educational system is ...........................

(a) General (b) Vocational
(c) Technological (d) Trade Cycle
FYJC
(21) Unemployment among the matriculates and the graduates is called ...........................
unemployment.
(a) educated (b) industrial
(c) structural (d) disguised
(22) Business fluctuations in the economy are responsible for ...........................

unemployment.
(a) Seasonal (b) Cyclical (c) Industrial (d) Open
(23) Unemployment and poverty are ...........................

(a) inter-related (b) not related
(c) intra-related (d) non related
(24) A change in the infrastructure of the economy will cause ...........................

unemployment.
(a) frictional (b) structural (c) cyclical (d) disguised
(25) Specific programmes were started by the government to reduce ...........................

unemployment.
(a) rural (b) urban (c) full (d) district
(26) ........................... is a situation when all those who are looking for jobs are able to get
them.
(a) Employment (b) Full employment
(c) Unemployment (d) Open employment
(27) Introduction of computers cause ........................... unemployment.

(a) technological (b) structural
(c) industrial (d) voluntary
(28) There is ........................... unemployment on many small farms in India.

(a) disguised (b) open (c) cyclical (d) urban
(29) ........................ intensive technology give more employment opportunities.

(a) Capital (b) Labour (c) Industry (d) Trade
(30) Introduction of machine causes ........................ unemployment.

(a) technological (b) structural
(c) voluntary (d) involuntary
(31) Seasonal unemployment is more in ........................areas.

(a) rural (b) urban (c) district (d) industrial
(32) ........................ exchanges provide job information.

(a) Employment (b) Unemployment
(c) Trade (d) Education
Ans. (1) educated (2) seasonal (3) zero (4) cyclical (5) Maharashtra (6) urban area
(7) technological unemployment (8) frictional (9) cyclical (10) 1983 (11) downswing
(12) voluntary (13) structural (14) Structural (15) Brain drain (16) rural (17) disguised
FYJC
unemployment (18) frictional (19) seasonal (20) general (21) educated (22) cyclical
(23) inter-related (24) structural (25) rural (26) full employment (27) technological (28)
disguised (29) labour (30) technological (31) rural (32) Employment

(1)
(1) Disguised unemployment (a) Temporary unemployment
(2) Frictional unemployment (b) Increase employment
(3) Labour intensive method (c) Zero marginal productivity
(4) Employment Guarantee Scheme (d) Full employment
(5) Technological unemployment (e) Underutilization of labour
(f) Maharashtra
(g) Computers
(h) Being jobless
Ans. (1 – c); (2 – a); (3 – b); (4 – f); (5 – g)
(2)
(1) Underemployment (a) Chronic
(2) Structural unemployment (b) 1972-73
(3) Employment guarantee scheme (c) Mechanisation
(4) Seasonal unemployment (d) Underutilisation of human resource
(5) Forced idleness (e) Zero marginal productivity
(f) Voluntary unemployment
(g) Involuntary unemployment
(h) Off season
Ans. (1 – d); (2 – a); (3 – b); (4 – h); (5 – g)
(3)
(1) Voluntary unemployment (a) Trade cycles
(2) Agriculture (b) No willingness to work
(3) Power cut (c) Breakdown of machinery
(4) Unemployment (d) Being jobless
(5) Economic recession (e) Cyclical unemployment
(f) Disguised unemployment
(g) Frictional unemployment
(h) Self-imposed unemployment
Ans. (1 – b); (2 – f); (3 – g); (4 – d); (5 – e)
FYJC
*(1) There is no disguised unemployment in India.
*(2) High growth of population is the only cause of rural unemployment.
*(3) Joint family system increases unemployment.
*(4) White-collared job preference is voluntary unemployment.
*(5) Frictional unemployment is temporary.
(6) Unemployment is a chronic problem of the Indian economy.
(7) Unemployment and poverty are interrelated.
(8) Seasonal unemployment is also known as voluntary unemployment.
(9) Unemployment exists only in the less developed countries.
(10) Unemployment is a problem that exists only in the rural area.
(11) Structural unemployment occurs due to lack of effective demand.
(12) Frictional unemployment is a long term phenomenon.
(13) Underemployment means under utilisation of labour.
(14) Employment Guarantee Scheme was started in the state of Maharashtra.
(15) Incidence of disguised unemployment is very high in urban areas.
(16) There is no difference in the nature of unemployment in India and USA.
(17) Employment exchanges are functioning very efficiently in India.
(18) All structural un employments are technological in nature.
(19) Urban unemployment are the spill-over effect of rural employment.
(20) Introduction of computers in India has created the problem of technological
unemployment.
(21) Backlog of unemployment in India is decreasing.
(22) Frictional unemployment is involuntary unemployment.
(23) Cyclical unemployment is the basic problem in India.
(24) Lack of co-ordination between job opportunities and educational facilities is the main
cause of educated unemployment.
(25) Joint family system restricts labour mobility.
(26) In disguised unemployment, the marginal productivity of labour is very high.
(27) Breakdown of machinery may cause technical unemployment.
(28) There is no difference in seasonal and disguised unemployment.
(29) Sick industries increase rural unemployment.
(30) When the supply of labour is more than demand, there is involuntary unemployment.
(31) Defective educational system is the main cause of educated unemployment.
(32) Unemployment refers to unemployed people in the age group of 15 to 60 years.
(33) Seasonal unemployment is more in urban areas.
(34) Up-to-date information on unemployment is not regularly available from the official
sources.
(35) Educated unemployment essentially means disguised unemployment.
(36) There is no unemployment among the educated people in India.
(37) There is no disguised unemployment in rural areas in India.
(38) Unemployment in India is only cyclical.
(39) Cyclical unemployment occurs due to change in trade cycle.
FYJC
(40) Slow rate of economic development reduces unemployment.
(41) In case of disguised unemployment, marginal productivity of labourer is low.
(42) One of the reason for involuntary unemployment is the law of inheritance.
Ans. (1) False (2) False (3) True (4) True (5) True (6) True (7) True (8) False (9) False (10)
False (11) False (12) False (13) True (14) True (15) False (16) False (17) False (18)
False (19) True (20) True (21) False (22) True (23) False (24) True (25) True (26)
False (27) False (28) False (29) False (30) True (31) True (32) True (33) False (34)
True (35) False (36) False (37) False (38) False (39) True (40) False (41) True (42)
True

*(1) Unemployment
Ans.
(a) Unemployment is a situation, wherein the people in the age group of 15 to 59 years,
who are able and willing to work, at a prevailing wage rate, do not get work.
(b) Unemployment is broadly classified into urban unemployment and rural
unemployment.
*(2) Underemployment
Ans. Underemployment is a situation like part time job, wherein the capacity of a worker is
underutilized in terms of time, energy and education.
*(3) Urban unemployment

Ans. Urban employment implies the existence of unemployed persons in the cities and
towns. This form of unemployment is found in the manufacturing and service sectors.
*(4) Disguised unemployment

Ans. Disguised unemployment is a situation wherein more than the required number of
persons are engaged in an economic activity. The excess number of persons appear
to be employed but their marginal productivity is zero. This form of unemployment is
mostly found in the agrarian sector.
*(5) Frictional unemployment

Ans. Frictional unemployment is a form of urban unemployment, wherein the workers are
temporarily out of work. This is due to the strikes of the workers, layoff given by the
employers, breakdown of machines, power failure and shortage of raw material.
*(6) Structural unemployment

Ans. Sometimes, structural change in an economic activity results in unemployment. With
the industrialization taking place, those employed in the village and cottage industries
are left jobless.
FYJC
(7) Full employment
Ans. This is the ideal stage in economy. There is optimum utilization of available productive
resources. Every able-bodied person who is willing to work gets employment at the
prevailing rate of wages.
Q.2. (B) Give reasons or Explain:

*(1) Underemployment is found in both rural and urban areas.
Ans.
(a) Underemployment is a situation in which people do not have full workload. They
produce less even though they are capable of producing more. It is found in both rural
and urban areas.
(b) In rural areas, farmers work for hardly 2 or 3 hours a day and for the remaining period,
they remain unemployed due to lack of alternative jobs.
(c) In urban areas, when a person does not get a suitable job for which he is fit, he
remains underemployed e.g., a graduate working as a peon in an office or engineer
working as a clerk, etc. There is underutilisation of their abilities.
*(2) Cyclical unemployment is found in developed economies.

Ans. Cyclical unemployment is found in developed economies because :
(a) Unemployment which arises due to trade cycles is called cyclical unemployment.
(b) Ups and downs in demand for goods and services causes this unemployment.
(c) With a fall in aggregate demand, prices, profits and investment decline. Hence,
cyclical unemployment occurs during depression, for example, the Great Depression
of 1930, resulted in cyclical unemployment. Jobs are restored during the period of
recovery. It is a short term phenomenon.
(3) Educated unemployment is due to defective education system.

Ans. Educated unemployment is due to defective education system because :
(a) Indian education system is defective. It is mostly academic and not job-oriented.
Hence, educated people do not fit in any type of job unless they do some professional
courses.
(b) They are not qualified for technical work. They want only “white collared jobs”. There
is scarcity of such jobs. Hence, they remain unemployed.
*(4) Rural unemployment is more severe than urban development.

Ans. Rural unemployment is more severe than urban unemployment because :
(a) Unemployment prevailing in villages is called rural unemployment.
(b) It is mainly of two types i.e., seasonal unemployment and disguised unemployment.
(c) Seasonal unemployment refers to unemployment of labour during off season. Once
the rainy season is over, jobs are not available in agriculture.
(d) Disguised unemployment refers to a situation in which a person seems to be working
but his contribution to the total output is zero.
(e) The causes of rural unemployment are rapidly rising population, slow rate of economic
development, illiteracy, joint family system, etc.
FYJC
*(5) Begging is not unemployment.
Ans. Begging is not unemployment because :
(a) In economics, unemployment is defined as a situation in which a person who is
physically capable, mentally willing to work at the prevailing wage rate does not
find any job. He is forced to remain unemployed against his desire.
(b) In case of beggar, they are not mentally willing to work. So from the economic point of
view, beggars are not unemployed.
*(6) Economic development can reduce unemployment.

Ans. Economic development can reduce unemployment because :
(a) The government is taking all possible measures to accelerate the pace of economic
development.
(b) Economic development can be raised by the following measures :
(i) Green Revolution through improved varieties of seeds, improved techniques,
irrigation
facilities, land reforms etc.
(ii) Rapid industrialisation.
(iii) Encouragement to small scale, village and cottage industries.
(iv) Rural development programmes like construction of roads, irrigation work, rural
electrification, etc.
It will help to increase investment, production and employment in the country.

(1) Disguised Unemployment and Underemployment :
Disguised Unemployment Under Employment
Disguised unemployment is a situation Underemployment is a situation when a
where a person is working but his person appears to be working, but his
contribution to production is nil. skills are not completely utilized.
In this, the marginal productivity of the In this, the worker’s marginal productivity
worker is zero. is not zero but he is producing below his
capacity.
Under disguised unemployment, there is Underemployment involves underutilization
complete wastage of manpower. of manpower.
It is usually found in agricultural sector due If an engineer is working as a hotel
to heavy pressure of population on land. receptionist or as a clerk or a healthy
e.g. In a family farm, suppose 4 workers person is working only for few hours,
can produce 30 tonnes of rice but 6 are then he is underemployed.
working and still the production remains the
same 30 tonnes, then 2 workers are
disguisedly unemployed.
FYJC
(2) Rural Unemployment and Urban Unemployment:
Rural Unemployment Urban Unemployment
Rural unemployment is found in villages, Urban unemployment is found in cities,
generally in the agricultural sector. amongst the industrial workers and the
educated.
Rural unemployment occurs because of the Urban unemployment occurs due to
small size of landholdings, seasonal nature industrial recession, immobility of worker,
of agriculture, joint family and lack of jobs. defective nature of education, etc.
Rural unemployment is largely disguised. Urban unemployment is generally open
and is the spillover effect of rural
unemployment.
e.g.: Seasonal and disguised unemployment. e.g.: Frictional, technological, structural
and cyclical unemployment.
(3) Frictional Unemployment and Structural Unemployment:

Frictional Unemployment Structural Unemployment
Frictional unemployment occurs when a Structural unemployment occurs when a
person is unemployed during the time gap person is unemployed because of
of losing one job and getting another structural and organizational changes in
because of the frictional factors such as the economic set-up of the economy. It is
breakdown of machinery, strikes, shortage caused by factors like changes in
of electricity and raw materials, etc. population, government policies, demand
patterns, etc.
It is transitory and short-lived. It is long lasting and chronic.
It is experienced both by developed and It is experienced mainly by underdeveloped
developing countries. and developing countries.
It can be removed by providing information It can be removed through long term
about job availability, proper supply of planning, rapid economic growth and
inputs and by establishing a good relation creation of job opportunities.
between the workers and the employers.
(4) Technological Unemployment and Cyclical Unemployment:

Technological unemployment Cyclical unemployment
Technological unemployment occurs when Cyclical unemployment occurs due to the
due to the application of advanced lack of effective demand for goods and
technology, some workers become services in the market.
unemployed as machine replaces man.
It may be temporary if it is frictional, or long It is temporary in nature.
lasting if it is structural in nature.
It is caused by the introduction of capital It is due to business fluctuations and
intensive methods of production. e.g. Use of occurs during recession or depression
computers in place of labour. phase of business cycle.
FYJC
It is found more in developing countries and It is mostly found in developed countries

can be removed by providing alternative job and can be removed by encouraging
arrangements and encouraging self- consumption and export activities.
employment.
*(5) Unemployment and Underemployment:

Unemployment Under employment
Unemployment is a situation when a Underemployment is a situation when a
healthy person is unable to get a job though person is employed but his potentialities
he is willing to work at the prevailing wage are not fully exploited.
rate.
In this, the person is forced to remain idle
In this, the person is not completely idle as
against his desire. he is working, though his work load is not
full.
There is a complete wastage of capacity to There is an underutilisation of capacity as
work. the person is working below his
capabilities.
The examples are technical, frictional, For e.g. are C.A. working as a clerk or a
cyclical and educated unemployment. person working on a part time basis.
*(6) Voluntary unemployment and Involuntary unemployment:

Voluntary unemployment Involuntary unemployment
When a person is able to work but not When a person is willing and able to work
willing to work, it is referred to as voluntary but unable to get a job, it is referred to as
unemployment. involuntary unemployment.
Voluntary unemployment does not create The extent of involuntary unemployment is
alot of economic problems. high.
Voluntary unemployment cannot be totally Involuntary unemployment can be
eliminated. eliminated through economic development.
It is found in all economies. It is mainly found in less developed
countries.
(7) Open Unemployment and Disguised Unemployment:

Open Unemployment Disguised Unemployment
It is visible unemployment. It is invisible unemployment.
The person is willing to and able to work,
The person visibly appears to be working
but unable to get a job. but does not contribute anything to output.
Open unemployment creates social unrest.
Disguised unemployment may not create
much social unrest as it is not visible.
Openly unemployed person’s income is Disguisedly unemployed earns some
zero. income.
It is found everywhere. It is mainly found in the agricultural and
public sector.
FYJC
*(8) Seasonal Unemployment and Disguised Unemployment:
Working or Productive population Non-working or Unproductive population
In India, agriculture is a seasonal activity
About 70% of the Indian population
which lasts for five months and for the
depends on agriculture. There is pressure
remaining seven months, the farmers and
of population on agriculture and labour
landless agricultural workers are due to excess number engaged in
unemployed. agriculture. Thus, many of those who
appear to be employed, are in fact not
employed as their marginal productivity is
zero.
The seasonal nature of employment is The disguised unemployment results in
responsible for rural poverty. low agricultural productivity and low
income for the agriculturists.
*(9) Cyclical Unemployment and Frictional Unemployment:

Cyclical unemployment Frictional unemployment
The unemployment caused by the The unemployment caused by the friction
recession phase in business cycle is known between the employer and the employees
as cyclical unemployment. The workforce is in the manufacturing service sector is
retrenched to tide over recession. known as frictional unemployment.
The duration of this employment is linked The workers are only temporarily rendered
with the duration of the recession. Once the unemployed. Once the factors that cause
recession is over, the retrenched workers friction are resolved, the workers resume
are re-employed. This phenomenon is of their work.
short duration.
Q.4. Give economic terms for the following :

(1) Unemployment prevailing in rural areas.
Ans. Rural unemployment
(2) Labour employed with zero marginal productivity.

Ans. Disguised unemployment
(3) Unemployment caused by power cut.

Ans. Frictional unemployment
(4) Unemployment during a recession.

Ans. Cyclical unemployment
Q.5. Do You Agree :

(1) Labour saving technology leads to unemployment.
Ans. Yes, I agree with the statement.
Reasons:
(a) Use of labour saving technology means that in the production process, more
advanced and mechanized techniques of production are being used.
FYJC
(b) Machines reduce the use of manpower as the work done by many workers can be
done just by one machine.
(c) For e.g. computer. Due to the replacement of workers by machines, some workers
become jobless. This situation is known as technological unemployment.
(d) It is because of this reason that Gandhiji was against the use of over-mechanisation in
a labour surplus country like India.
(2) Defective educational system is the only cause of educated unemployment.

Ans. No, I disagree with this statement.
Reasons:
Defective educational system i.e. an educational system which is examination-oriented and
not job-oriented is only one of the reasons of educated unemployment. Besides this, there
are various other factors responsible for educated unemployment given below :
(1) Expansion of educational facilities.
(2) High expectations regarding salary.
(3) Inefficient working of employment exchanges.
(4) Lack of capital.
(5) Preference for white collar jobs.
(6) Lack of proper manpower planning.
(7) Joint family system.
(8) Business fluctuations and low labour mobility.
(3) All frictional and structural unemployment is technological in nature.

Reasons:
(a) Frictional and structural unemployment occurs not only because of technological
reasons but also due to other factors.
(b) Frictional unemployment occurs when a person is unemployed during the time gap of
losing one job and getting another. It may occur when due to the change in technology
e.g. use of computers people become unemployed for a short period of time. But the
change in technology is not the only reason. Frictional unemployment also occurs due
to the frictional factors such as breakdown of machinery, shortage of electricity and
raw materials, strikes, lock-outs etc.
(c) Structural unemployment is a situation when a person is unemployed due to the
structural and organizational changes in the economic set-up of the country. It may
occur when due to the use of advanced technology, people do not get jobs for a long
period of time. But the change in technology is not the only reason. Structural
unemployment is also caused by other factors such as changes in population,
government policies, demand patterns etc.
(4) Disguised unemployment is a part of urban unemployment.

FYJC
Reasons:
(a) Disguised unemployment is a special feature of rural areas. It exists when more
workers are employed in a sector than what is actually required. They seem to be
working but their contribution to the work is zero. This is found more in rural areas
because of high growth of population and lack of alternative job opportunities.
(b) In urban areas, we find educated unemployment or there may be frictional, structural,
cyclical or technological unemployment.
Hence, disguised unemployment is a part of rural unemployment.
*(5) Problems of unemployment in India and America are the same.

Reasons:
(a) Problems of unemployment in India and America are not same. India is a developing
country whereas America is a developed country. India being an agricultural economy,
in rural areas, there is a problem of disguised and seasonal unemployment and in
urban areas there is under employment, frictional, structural and educated
unemployment. All this is because of over population. But, America being a technically
advanced country and being low in terms of population, the problem of unemployment
is very little. More often cyclical unemployment is found there which is because of lack
of effective demand. Hence, the statement that the problems of unemployment of
India and America are same is not correct.
(6) High growth of population is the only cause of rural unemployment.

Reasons:
High growth of population is one of the causes of rural unemployment. Other causes are:
(a) Seasonal nature of agriculture.
(b) Lack of mobility.
(c) Decline of handicraft.
(d) Underdevelopment of villages.
(e) Joint family system.
(f) Law of inheritance.
(g) Illiteracy of the people.
(7) The Government has not taken any measures to solve the problem of
unemployment in India.
Ans. No, I do not agree with above statement.
Reasons:
The Government of India has started various programmes and agencies to solve
Unemployment problems in rural and urban areas. Some important measures are as follows:
(1) Employment Guarantee Scheme (E.G.S.)
(2) Rural Work Programme (RWP)
(3) Food for Work Programme (FWP)
(4) Minimum Needs Programme (MNP)
(5) National Rural Employment Programme (NREP)
(6) Crash Scheme for Rural Development (CSRD)
(7) Sanjay Gandhi Niradhar Yojana
(8) Nehru Rojgar Yojana
(9) Employment Exchanges
(10) Vocational Centres
FYJC
OBJECTIVE QUESTIONS
*(1) ........................ is a major challenge for several countries in the world.
(a) Corruption (b) Terrorism
(c) Hoarding (d) Black marketing
*(2) Corruption leads to ........................

(a) equality (b) inequality (c) balance (d) development
(3) Terrorism is undertaken to achieve certain political and ........................ objectives.

(a) social (b) economic (c) emotional (d) cultural
(4) The dictionary meaning of corruption is .........................

(a) bribe (b) favouritism
(c) violation of law (d) defiance of law
(5) ......................... refers to holding back of stocks in order to reap benefits.

(a) hoarding (b) trade unions
(c) scarcity (d) production
(6) Hoarding is done by the ......................... to create artificial scarcity.

(a) farmers (b) manufacturers
(c) businessmen (d) intermediaries
(7) Black marketing is an activity done outside the sight of the ..........................
(a) customer (b) other traders
(c) law enforcement agency (d) foreigners
(8) .......................... is a form of violence to create fear in the minds of people.

(c) Hoarding (d) Black Marketing
(9) Bribe is a form of ..........................

(a) hoarding (b) corruption
(c) black marketing (d) trade union
(10) .......................... creates artificial scarcity.

(c) Hoarding (d) Environment deterioration
Economics 46 Current Challenges

FYJC
(11) In black market, goods are .........................
(a) hoarded (b) illegally traded
(c) corruption (d) terrorism
(12) Terrorism creates ......................... in the minds of people.

(a) fear (b) happiness (c) sadness (d) feel good
Ans. (1) Corruption (2) inequality (3) social (4) bribe (5) Hoarding (6) businessmen
(7) law enforcement agency (8) Terrorism (9) corruption (10) Hoarding
(11) illegally traded (12) fear

(1)
(1) Terrorism (a) Illegal trade
(2) Corruption (b) Legitimate trade
(3) Hoarding (c) Erosion of soil
(4) Black marketing (d) Necessary for economic
development
(5) Environmental degradation (e) Disrupts trade, commerce and
industry
(f) Practised in all walks of life
(g) Artificial scarcity
(h) Machinery
Ans. (1 – e); (2 – f); (3 – g); (4 – a); (5 – c)

(1) Terrorism is a form of violence to create fear in the minds of the people.
(2) Environmental deterioration has led to global warming.
(3) Corruption is done for the welfare of people.
(4) Hoarding is unethical.
(5) The black market is a place where goods and services are sold ethically.
Ans. (1) True (2) True (3) False (4) True (5) False

(1) Terrorism
Ans.
(a) Terrorism is the deliberate use of violence or threat of violence by some misguided
people against the state and its people to achieve their socio-political objectives.
(b) Terrorism has assumed organised form as a number of terrorist organisations function
within the country as well as at the international level.

FYJC
(2) Corruption
Ans.
(a) Corruption is misuse of the power and authority attached to a public office for illegal
personal gains.
(b) It is a deliberate and intentional exploitation of position, status and resources for
personal aggrandisement.
*(3) Hoarding
Ans.
(a) Hoarding is holding back of stock with a view to reap higher profit at a later date.
(b) This is an intentional act which results in the artificial scarcity of the essential
commodities.
(c) Hoarding leads to artificial scarcity of the essential goods and the trader is able to sell
the goods/ services at a higher rate than the normal rate.
(d) Thereby the black marketeer earns a huge profit illegally.
(4) Black marketing

Ans.
(a) The black market is not a physical place, but rather an economic activity in which good
or services are bought and sold illegally.
(b) It is called ‘black market’ because its activity is conducted ‘out of sight’ and often ‘in
the dark’, outside the sight of law enforcement e.g. Cinema tickets are sold at a higher
price when a houseful board is displayed in front of the theatre.
(c) Black markets develop when the government puts certain restrictions on the
production or provision of goods and services. These transactions in black market
give rise to black money.
(d) Black markets tends to thrive in a highly controlled economy when government rations
many products such as food, gas, luxury goods, etc. Goods in black market do not
trade in the open view of the authority.
(e) In India, there exists a black market for a number of products such as train tickets,
essential commodities, LPG, carbon credit, and so on. Illegal drugs, pornography and
some forms of gambling are other examples of goods and services traded in the black
market.
*(5) Environmental deterioration.

Ans.
(a) Acts causing harm to the environment result in degradation of the environment.
(b) The natural resources deplete due to over-exploitation.
(c) Erosion of soil takes place due to excessive use of chemical fertilizers.
(d) Degradation of environment has harmful consequences on the economy.
(B) Give reasons or Explain:

(1) Terrorists use different techniques to create fear in the minds of people.
Ans.
(i) The modern world suffers from many disorders.
(ii) Terrorism is one of them. It is a form of violence to create fear in the minds of people.

FYJC
(iii) It is undertaken to gain some political, economical and social objectives.
(iv) It is an unlawful activity.
(v) Terrorists use different techniques to create fear in the minds of the people like air
strikes, bomb blasts, human bombs, anthrax(chemical), poisoning water, cyber crimes
and many other techniques.
(2) In India, corruption has been practiced in all walks of life.

Ans.
(i) In India, corruption exists in social, political and economic activities of Government
officials and private sector officials.
(ii) It also includes dishonest activities by nongovernment organisation officials.
(iii) Social corruption is dishonest or exploitative behaviour in dealing with others. It also
includes abuses of human rights.
(iv) Political corruption is more disruptive. It includes election fraud, the conduction of
unfair elections, etc.
(v) It also creates many evils like crimes, thefts, land grabbing, cheating, etc.
(vi) Corruption is an immoral act.

(1) Terrorism and Corruption :
Terrorism Corruption
Terrorism is a form of violence to create Corruption is defined as taking of bribes or
fear in the minds of the people. embezzlement of money, assets or
property.
It is undertaken to achieve certain political It is done by different authorities in public
and social objectives. and private sectors for their personal
monetary benefits.
It creates more and more fear, panic and It deprives the basic rights of the people
disturbances in the country. and it is also responsible for crimes, theft,
cheating and all sorts of tensions and
unrest among the people.
In order to face the problems arising out of It requires a strong will and a bill which
terrorism, innovations in military strategies could punish all the corrupt people
and military warfare equipments are a must irrespective of their might and influence.
for a country like India.
Q.4. State with reasons whether you Agree or Disagree with the following statement.
(1) The deterioration of environment has caused heavy losses to the economy.
Ans. Yes, I agree with this statement due to the following
reasons.
(i) Environment is defined as biosphere and it stands for natural, human conditions of our
surroundings which influence growth and development.

FYJC
(ii) All means of satisfying human needs are called resources. Natural resources are free
gifts from nature which are found on, above and below the surface of the earth for
e.g., rainfall, soil, climate, forest, minerals, energy, water, petroleum products, etc.
(iii) Natural resources may be renewable like land, water, fisheries, etc., and non-
renewable like minerals and petroleum products.
(iv) With the rapid growth of population, resources are not enough to meet the needs of
people. They are scarce in relation to demand. As a result, there is a problem of
depletion of resources.
(v) Environmental degradation is the deterioration of the environment through depletion of
resources such as air, water, soil, the destruction of ecosystem and the extinction of
wildlife.
(vi) Environmental degradation can occur naturally or through human processes.
(vii) Due to the technological progress and innovations, the natural resources are over
utilized, e.g. modernization in agriculture sector results in increase in production but in
the long run the soil gets depleted and man loses the major resource base. Soil
degradation takes place in three ways, i.e., soil erosion, soil pollution and soil
exhaustion.
(viii) Due to rapid deforestation, intensive mining, overgrazing, construction works,
urbanisation, shifting cultivation etc., soil erosion has become a serious problem.
Water logging also occurs due to over-irrigation, seepage from canals, inadequate
drainage etc., and as a result, soil becomes saline.
(ix) Soil erosion can ruin farmlands, wet lands, habitats, streams and even whole
ecosystems.
(x) Due to increasing population, urbanisation, rapid industrialisation, unlimited
exploitation of natural resources, man has disturbed the ecological balance. There is a
great threat to the global environment.
(xi) Environmental hazards affects physical and mental growth of people, for example,
Bhopal gas tragedy.
(xii) Due to environmental hazards, there is a problem of ozone depletion, depletion of
marine life, air pollution, desertification etc.
Thus, the deterioration of environment has caused heavy losses to the economy
which cannot be expressed in monetary terms.
(2) Hoarding is intentionally done by the consumers.

Ans. False, I disagree with this statement. Hoarding is intentionally done by business
community and not by consumers.
Reasons :
(i) Hoarding is done deliberately by business community in order to earn maximum
profits. Hoarding refers to holding back of stock in order to reap the benefits of
increasing prices.
(ii) They create artificial scarcity in the supply of essential goods like rice, wheat, sugar,
edible oil, etc. only with the motive of earning higher profit.
(iii) The consumers are forced to pay a higher price for the goods which are not easily
available.

FYJC
OBJECTIVE QUESTIONS
*(1) India has adopted ........................ policy of economic development since 1991.
(a) liberal (b) restrictive (c) strict (d) normal
*(2) At present there are only ........................ industries under compulsory licensing.
(a) 6 (b) 10 (c) 4 (d) 12
*(3) Due to globalisation, agricultural export ........................

(a) increases (b) decreases
(c) constant (d) zero
*(4) Economic reforms have been introduced under the Prime Ministership of
..........................
(a) Manmohan Singh (b) Rajiv Gandhi
(c) Narasimha Rao (d) Indira Gandhi
(5) Liberalisation advocates .......................... policy.
(a) licensing (b) delicensing
(c) restrictive (d) socialist
(6) Disinvestment means withdrawal of invested funds from a .......................... company.

(a) private sector (b) public sector
(c) joint stock (d) monopoly
(7) .......................... means integrating the economy of a country with the world economy.
(a) Privatisation (b) Liberalisation
(c) Globalisation (d) Democracy
(8) Adam Smith’s ‘Wealth of Nations’ was published in .......................... .

(a) 1991 (b) 1947 (c) 1776 (d) 2001
(9) The GDP growth in the post-reform period has been primarily caused by ..............
(a) service sector (b) industrial sector
(c) agricultural sector (d) all three sectors
(10) India experienced an economic crisis in ................... .

(a) 1921 (b) 1951 (c) 1991 (d) 2001
Economics 51 Economic Reforms

FYJC
(11) Globalisation means integration of the national economy with ................... .
(a) rural economy (b) state economy
(c) world economy (d) local economy
(12) Impact of New Economic Policy has been felt in .......................... .

(a) agriculture sector only (b) industrial sector only
(c) service sector only (d) all the three sectors
Ans. (1) Liberal (2) 6 (3) Increases (4) Narasimha Rao (5) delicensing (6) public sector
(7) Globalisation (8) 1776 (9) service sector (10) 1991 (11) world economy (12) all
the three sectors
(1)
(1) MRTP Act (a) Public Sector
(2) Liberalisation (b) Profit motive
(3) BHEL (c) Removing restrictions
(4) Private Sector (d) 1969
(5) GDP Growth (e) 2001
(f) World economy
(g) Service sector
(h) Primary sector
Ans. (1 – d); (2 – c); (3 – a); (4 – b); (5 – g)

(1) Economic reforms were introduced when Dr. Manmohan Singh was the Finance
Minister.
(2) Laissez Faire Policy advocates minimum state intervention in the market economy.
(3) The share of manufacturing sector in GDP has decreased recently.
(4) Removal of MRTP Act has encouraged industrial growth Industrial sector is gradually
growing in India.
(5) Security and Exchange Board of India (SEBI) was set up to regulate the working of
mutual funds and stock exchanges in India.
(6) Foreign Exchange Management Act (FEMA) was passed in 1991.
(7) Nine public sector enterprises were selected and given the status of “Navratnas”.
(8) There are no negative effects of New Economic Policy introduced in 1991.
Ans. (1) True (2) True (3) False (4) True (5) True (6) True (7) True (8) False

*(1) Industrial sector:
Ans.
(1) Industrial sector is also known as the secondary sector.
(2) It undertakes manufacturing activities.

FYJC
(3) It is broadly divided into public sector and private sector.
(4) The private sector is regulated by the Government.
*(2) Foreign Direct Investment (FDI):

Ans.
(1) Foreign Direct Investment implies the investment made by the foreign institutions and
individuals in industries in India.
(2) The Government of India in the post-1991 period encouraged FDI in the priority
industries that required huge investment and modern technology.
(3) Initially, the limit of the FDI was 51% which was subsequently raised to 74%, and later
to 100% in many industries.
*(3) FEMA:
Ans.
(1) The Foreign Exchange Management Act (FEMA) was enacted in 1999, replacing the
Foreign Exchange Regulation Act (FERA) which was enacted in 1973.
(2) It was an important component of Liberalisation which permitted the Indian companies
to raise funds from the foreign markets.
(1) Liberalisation and Privatisation:

Liberalisation Privatisation
Liberalisation refers to the removal of Privatisation refers to the transfer of the
unnecessary restrictions and elimination of ownership and control of the public sector
bureaucratic controls on economic enterprise to the private entities.
activities.
To promote economic development by To reduce the financial burden of the
removing the unnecessary restrictions and Government by the transfer of the
to provide opportunity to private sector to ownership and control of the loss-making
contribute to economic growth. enterprises and thereby reduce the
financial deficit.
(2) Public sector and Private sector:

Public sector Private sector
The public sector of an economy is that The private sector of an economy is that
sector which is owned, controlled and sector which is owned and operated by
operated by the nominees of the private individuals and their collective
Government. entities and are subject to regulations of
the Government.
The public sector industries are set up to The private sector industries are set up to
lay foundation of industrial/economic exploit the business opportunities and earn
development of the country. profit.
Operate for welfare of the people. Operate for profit.

FYJC
(3) Agriculture and Industry:
Agriculture Industry
Agriculture is a primary economic activity Industry is a secondary economic activity
of cultivation of land and producing wherein manufacturing is undertaken by
primary products such as food grains. converting raw material into finished goods.
Agriculture is an age old labour-intensive Industry is a modern capital-intensive

activity that depends on nature. activity that depends on the availability of
capital and entrepreneurship.
Q.3. State with reasons whether you agree or not with the following statements:
*(1) Globalisation does not have any effect on service sector.
Ans. Disagree.
Reasons:
Globalisation means integrating the domestic economy with world economy by removing
trade barriers and other restrictions. This will surely have positive and negative effects on
agriculture, industry and service sectors.
Following are the positive and negative effects on the service sector.
(A) Positive Effects :
(i) Increase in the export of services : The export of services enabled the country to
correct our balance of payment position to a greater extent.
(ii) I.T. Revolution : Globalisation has created a revolution in I.T. and software sectors.
Now, it contributes considerably in India’s national income. Indian software engineers
are in high demand abroad.
(iii) Improved financial facilities : With the entry of many private and foreign banks,
financial sector has become highly professional and competitive.
(iv) Growth of Tourism : Tourism industry is booming due to the increased income in the
hands of people. Along with this, transport and communication, and also hospitability
industry are also growing.
(v) Improved educational standards : Educational standard in India is improving due to
the tough competition in India and abroad.
(B) Negative effects of globalisation on service sector :

(i) Slow growth of infrastructure : Inspite of the encouragement in investment in the
infrastructural sectors, roads, railways, dams, power supply, etc. are still not
progressing upto the mark.
(ii) Inflation : Due to IT boom, Indian economy is overheating with more money supply.
Without any corresponding increase in the supply of goods, its demand is increasing.
This has led to inflation.
(iii) Profit motive : Privatisation of services like health, telecommunication, education, etc.
has led to exorbitant charges and fees thereby welfare taking a back seat. So, many
of these services end up in substandard quality with high prices.
(iv) Competition : Cut-throat competition leads to wastage of human, capital and natural
resources.

FYJC
*(2) Government of India did not take any measure to privatise it’s economy.
Ans. Disagree.
Reasons:
Privatisation refers to a process of reducing the involvement of public sector and increasing
the involvement of private sector in all economic activities. In India, the Government has
taken following measures to privatise the economy:
(i) De-reservation policy : The number of industries reserved for public sector has been
reduced. Leaving a minimum number, remaining all have been opened up for private
investment and ownership.
(ii) Establishment of BIFR : A Board of Industrial and Financial Reconstruction (BIFR)
has been set up to take decisions regarding sick Public Sector Undertakings (PSU).
(iii) Creation of NRB : A National Renewal Board has been set up to take care of the
retrenched workers in the event of loss-making PSUs getting closed.
(iv) Navratna’ Status : On the basis of strategic importance and performance, nine Public
Sector Undertakings were selected and given the status of ‘Navratnas’. They are
given full financial and managerial freedom to make them global giants.
(v) Dis-investment : One of the most important measures taken by the government is
dis-investment. The government decided to sell the equity capital of PSUs to
individuals and private corporate bodies and financial institutions.

FYJC
OBJECTIVE QUESTIONS
*(1) ........................ is the Ex-officio Chairman of the Planning Commission.
(a) Prime Minister (b) Chief Minister
(c) Finance Minister (d) President
*(2) In India, economic planning started in the year .........................

(a) 1951 (b) 1971 (c) 1991 (d) 1992
*(3) Economic plan means ......................... use of resources.

(a) optimum (b) limited (c) maximum (d) minimum
*(4) The Ninth Five Year Plan was started in ........................

(a) 1992 (b) 1997 (c) 2002 (d) 2003
(5) The First Five Year Plan was started in the year ......................... .
(a) 1951 (b) 1974 (c) 1971 (d) 1980
(6) The Fifth Five Year Plan was started in the year ........................
(a) 1997 (b) 1974 (c) 1951 (d) 1980
(7) The Sixth Five Year Plan was started in the year........................ .
(a) 1947 (b) 1980 (c) 1950 (d) 1961
(8) There were ........................ Annual Plans in India between the ........................ Plan
and the ........................ Plan.
(a) 11 (b) 1951 (c) 2012 (d) 1974
(9) Mahalanobis model emphasised on the development of .........................

(a) Light industries (b) Consumer goods industries
(c) Heavy industries (d) Cottage industries
(10) The Tenth Five Year Plan was started in the year .........................
(a) 2003 (b) 2001 (c) 2002 (d) 2007
(11) The Ninth Five Year Plan period was ..........................

(a) 1997-2002 (b) 2001-2013
(c) 1998-2002 (d) 2002-2007
Economics 56 Economic Planning

FYJC
(12) The growth target of the Tenth Plan was .......................... percent per annum..
(a) 7 (b) 8 (c) 6 (d) 9
(13) The focus of the Tenth Plan was on “Growth with better .......................... and
...........................
(a) economic growth and liberlization
(b) economic planning and economic growth
(c) employment rate and literacy rate
(d) economic growth and literacy
(14) The Second Five Year Plan gave emphasis to ...........................

(a) heavy industries (b) light industries
(c) consumer goods (d) industries
(15) Indian economy is a .......................... economy

(a) capitalist (b) socialist (c) mixed
(16) An economy where there is the co-existence of public and private sectors is called
........................ economy.
(a) mixed (b) capitalist (c) socialist
(17) The term of the Tenth Plan was .........................

(a) 1997-2002 (b) 2002-07
(c) 1994-1999 (d) 1994-1997
(18) The main objective of the plan was ..........................

(a) self-reliance (b) equity
(c) growth @ 8% (d) growth @ 10%
(19) The GDP growth rate of Tenth Plan aimed at was .......................... %.
(a) 8 (b) 10 (c) 6.5 (d) 12
(20) In the Tenth Plan, more emphasis was given to the .......................... sector under the
development strategy.
(a) private (b) public (c) joint (d) urban
(21) The role of the state was redefined as a ...........................

(a) regulator (b) controller
(c) facilitator (d) industrial
(22) The ........................... plan did not complete its full term.
(a) Fifth (b) Sixth
(c) First (d) Third
(23) During the first three decades of planning, the growth rate in GDP ............................
(a) 3.5 (b) 5.6 (c) 6.7 (d) 8.5

FYJC
(24) The major contribution to savings comes from ........................... sector.
(a) household (b) public
(c) private (d) industrial
(25) The biggest increase in investment occured in the ........................... sector.

(a) public (b) household
(c) private (d) industrial
(26) The Ninth Plan was launched in April ............................

(a) 1998 (b) 1997 (c) 1996 (d) 1995
(27) The Eighth Five Year Plan was started in the year............................
(a) 1992 (b) 1997 (c) 2005 (d) 1998
(28) Rapid Industrilisation was the main objective of ............................ Five Year Plan.
(a) First (b) Second (c) Third (d) Fourth
(29) .......................... sector was promoted under the Ninth Five Year Plan Strategy.
(a) Private (b) Public (c) Joint (d) Mixed
(30) Deliberate use of resources to achieve certain objectives with a definite time period is
called ..........................
(a) Economic planning (b) Budgeting
(c) Manpower Planning (d) Economizing
(31) The objective of self-reliance was given top priority for the first time in the
.......................... Plan.
(a) First (b) Third (c) Fourth (d) Fifth
(32) In India, achievement of .......................... objective has always been given highest
priority..
(a) Rapid economic growth (b) Poverty removal
(c) Unemployment removal (d) Inequality reduction
(33) The 9th Plan’s development strategy laid emphasis on globalisation and
...........................
(a) Import restrictions (b) Liberalization
(c) Export Restriction (d) Centralization
(34) Indian planning is ........................... oriented.

(a) growth (b) development (c) liberlization (d) industries
(35) A combination of capitalism and socialism is known as a ............................

(a) mixed economy (b) social economy
(c) capital economy (d) economy
(36) An economic plan must have a ............................ limit.

(a) Time (b) output (c) input (d) growth

FYJC
(37) The Tenth Plan was officially started in the year .............................
(a) 1997 (b) 1999 (c) 2002 (d) 2001
(38) The main objective of the economic planning is to achieve ..............................

(a) economic growth (b) economic development
(c) rapid economic growth (d) capital
(39) The focus of the Tenth Plan was on growth with ..............................
(a) social justice (b) self sufficiency
(c) liberalization (d) Growth
Ans. (1) Prime Minister (2) 1951 (3) optimum (4) 1997 (5) 1951 (6) 1974 (7) 1980 (8) 11 ,
1951, 2012 (9) heavy industries (10) 2002 (11) 1997-2002 (12) 8 (13) employment
rate, literacy rate (14) heavy industries (15) mixed (16) mixed (17) 2002-2007 (18)
growth @ 8%. (19) 8 (20) joint (21) facilitator (22) fifth (23) 3.5 (24) household (25)
public (26) 1997 (27) 1992 (28) second (29) private (30) economic planning (31) third
(32) rapid economic growth (33) liberalization (34) growth (35) mixed economy (36)
time (37) 2002 (38) economic development (39) social justice
(B) Match the following:

(1)
(1) Formulation of economic planning (a) 2002 – 2007
(2) Annual plans (b) Planning Commission
(3) 10th Five Year Plan (c) 1966 – 69
(4) Removal of poverty (d) 1997 – 2002
(5) Indian planning (e) Objective of economic planning
(f) Agricultural plan
(g) Democratic
(h) Rural development
Ans. (1 – b); (2 – c); (3 – a); (4 – e); (5 – g)
(2)
(1) The Planning Commission (a) Rural development
(2) Mahalabonis (b) Industry-oriented plan
(3) First Five Year Plan (c) Democratic
(4) Indian planning (d) The planning authority
(5) Sixth Plan (e) The Second Five Year Plan
(f) Agricultural plan
(g) Rational exploitation of resources
(h) 8% growth rate target
Ans. (1 – d); (2 – e); (3 – f); (4 – c); (5 – b)
FYJC
(3)
(1) India (a) Planning Commission
(2) Removal of poverty (b) Objective of economic planning
(3) H. D. Diskinson (c) 1951
(4) Fifth Five Year Plan (d) Definition of economic planning
(5) Second Five Year Plan (e) Mixed economy
(f) Self reliance
(g) Industrial plan
(h) “Garibi Hatao’
Ans. (1 – e); (2 – b); (3 – d); (4 – h); (5 – g)
(4)
(1) Third Five Year Plan (a) 9.21%
(2) Eighth Five Year Plan (b) Self-reliance
(3) Ninth Five Year Plan (c) Emphasis on heavy industries
(4) Economic planning (d) 3.9%
(5) Agriculture growth rate plan (e) Indicative planning
(f) 1997-2002
(g) 1992-1997
(h) Conscious and deliberate effort by
central planning authority
Ans. (1 – b); (2 – g); (3 – f); (4 – h); (5 – d)
(5)
(1) Indian planning (a) Emphasis on rural development
(2) Mixed economy (b) Democratic planning
(3) Socialist society (c) Combination public and private
sector
(4) Self-sufficiency (d) The planning body
(5) Economic planning (e) Dickinson
(f) Equal opportunity to all
(g) Enough of all goods and services
(h) India
Ans. (1 – b); (2 – c); (3 – f); (4 – g); (5 – e)

FYJC
*(1) There is no need for economic planning in India.
*(2) The Ninth Five Year Plan aimed at ‘Growth with Justice and Equality.’
(3) India has by now completed over four decades of planning.
(4) In a mixed economy, planning completely replaces the role of market.
(5) Indian planning is totalisation.
(6) The President is the Ex-officio Chairman of the Planning Commission.
(7) The Fourth Plan aimed at the alleviation of poverty in India.
(8) The Fifth Five Year Plan was terminated one year before its maturity.
(9) The Eighth Plan is largely a social sector-oriented plan.
(10) The Sixth Plan emphasised structural transformation of the economy.
(11) Indian planning is democratic in nature.
(12) Planning implies rational allocation of resources.
(13) There is no need for planning in a developing country like India.
(14) For all types of economies, objectives of planning remain the same.
(15) Private sector was assigned a dominant role in the First and Second Five Year Plans.
(16) Liberalisation, privatisation and globalisation started from the Eighth Five Year Plan.
(17) The Tenth Plan assigned an important role to the public sector like the Second Five
Year Plan.
(18) Deficit financing was supposed to be the main source of finance in the Tenth Plan.
(19) The targets fixed in the Tenth Plan were realistic and many could be achieved.
(20) In India agriculture is the main occupation of the villagers.
(21) Indian economy was backward.
(22) India was not self-sufficient in food.
(23) The basic aim of economic planning in India is to bring about rapid economic growth.
(24) One of the objectives of economic planning is the increase in employment.
(25) Rapid industrialization is not the objective of economic planning.
(26) One of the objectives of planning has been to achieve self-sufficiency in food grains.
(27) The aim of planning in India is to make India selfsufficient and self-reliant.
(28) Another important objective of planning in India is not to achieve balanced
development of economy.
(29) During the planning period, there has been horizontal and vertical development in the
financial sector.
(30) The high growth rate of population has helped to progressively change the
occupational structure.
(31) Agriculture continues to remain backward.
(32) The focus of the Ninth Plan was growth with social justice and equity.
*(33) The First Five Year Plan was introduced in 1951.
(34) The Fifth Plan did not complete its full term.
(35) Janata government introduced a new planning system called Rolling Plan.
(36) The Tenth Five Year Plan was introduced in 2002.
(37) There is no economic planning in India.

FYJC
(38) In India, economic planning started from 15th August 1947.
(39) Economic planning is prepared by the Finance Minister of India.
(40) The Ninth Plan encouraged foreign investment.
(41) Social services are provided by private sector.
(42) Service sector made impressive progress during the Tenth Plan.
(43) The objective of the growth of Gross Domestic Product decided by the Ninth Plan was
achieved.
(44) There are no drawbacks of Tenth Five Year Plan.
(45) There has been a tremendous expansion in software services and IT sectors in recent
years.
(46) The Tenth Plan succeeded in achieving its aim of 8% rate of growth per annum.
(47) Prof. Mahalanobis was the real architect of Second Five Year Plan .
(48) Indian planning has been successful in removing the hardships of the common man.
(49) The Tenth Plan aims at achieving 8% rate of growth per annum.
(50) The Ninth Five Year Plan achieved its growth targets successfully.
Ans. (1) False (2) True (3) True (4) False (5) False (6) False (7) True (8) True (9) True (10)
True (11) True (12) True (13) False (14) False (15) False (16) True (17) False (18)
True (19) True (20) True (21) True (22) True (23) True (24) True (25) False (26) True
(27) True (28) False (29) True (30) False (31) True (32) True (33) True (34) True (35)
True (36) True (37) False (38) False (39) False (40) True (41) False (42) True (43)
True (44) False (45) True (46) False (47) True (48) False (49) True (50) False

*(1) Economic Planning
Ans.
According to Dr. H.D. Dickinson, “Economic planning is the making of major economic
decisions, such as what and how much, when and where it is to be produced, to
whom it is to be allocated by the conscious decision of the determinate authority on
the basis of comprehensive survey of the economic system as a whole.”
*(2) Capital formation

Ans.
(1) Capital formation means creation of the capital assets such as tools and equipment
and infrastructure facilities.
(2) This is an outcome of savings and investment by the individuals and institutions.
(3) Capital formation is the pre condition of economic development.

FYJC
*(3) Self-reliance
Ans.
(1) Self-reliance means the capability of the economy of a country to produce all that is
required for consumption.
(2) Agriculture is given priority to achieve self-sufficiency in the requirement of food
grains.
(3) The dependence on the other countries is not desirable in times of war and economic
fluctuations.
*(4) Planning Commission of India

Ans.
(1) The Central Planning Authority in India is known as the Planning Commission.
(2) The Planning Commission was constituted in 1950 by the Government of India.
(3) The Prime Minister is the Ex-officio Chairman of the Planning Commission. It
formulates the plans.
(B) Give reasons or explain.

*(1) The Tenth Plan failed to eradicate poverty.
Ans.
(i) The Tenth Plan commenced in 2002 to achieve many objectives and targets like
reduction in poverty, increase in employment opportunities, rapid industrialisation,
improvement in the performance of agriculture etc.
(ii) The Tenth Plan had targeted to reduce poverty ratio up to 19.2% but it failed to
achieve the target.
(iii) In 2004-2005, 27.5% of people were below poverty line.
(iv) There was no sufficient income to satisfy their basic needs of life i.e. food, clothing
and shelter.
(v) Their social life was very miserable.
*(2) The basic objective of economic planning in India is to bring about economic
development.
Ans.
(i) Rapid economic growth and development is the basic and foremost objective of
economic planning in India.
(ii) It can be achieved through the development of agriculture, industry, transport,
communication and other infrastructural facilities.
(iii) India has been facing many problems like widespread poverty, inequality,
unemployment, illiteracy, population explosion, etc. These problems can be solved
only by raising the rate of economic growth and development.
Q.3. State with reasons whether you agree or not with the following.
*(1) The Tenth Five Year Plan did not have any objectives.
Ans. No, I do not agree with this statement.
Reasons:
The Tenth Five Year Plan was based on the following objectives.
(i) To achieve an average growth rate of 8% in GDP.

FYJC
(ii) To double per capita income over a period of 10 years, i.e. 2002-2012.
(iii) To improve the quality of life of the people.
(iv) To reduce inter-regional imbalances and bring uniform development of all states.
(v) To encourage the growth of private sector in the economy to generate large scale
employment.
(vi) To increase the role of government only in those sectors which are of national
importance like infrastructure, social sectors, etc.
(vii) To ensure greater flexibility in fiscal and monetary policies.
(viii) To ensure social justice.
(ix) To pay special attention towards agriculture and allied activities, construction, tourism,
transport, small scale industries, cottage and village industries.
(x) To raise the rate of industrial development.
(xi) To achieve international competitiveness.
(xii) To provide world class telecommunication and transport facilities at reasonable prices.
(xiii) To raise agricultural production by developing rural infrastructure, encouraging
research and by diversifying cropping pattern.
(xiv) To improve the quality of governance for raising the rate of economic growth.
*(2) The Tenth Five Year Plan did not achieve anything.
Reasons:
The following are the important achievements of 10th five year plan.
(i) Increase in growth rate : During the 10th Plan, the average growth rate increased up
to 7.8% per annum.
(ii) Good performance of service sector : The growth rate of service sector was 9% in
the Tenth Plan. It has contributed significantly to the overall growth of the economy.
(iii) Increase in savings : During this Plan, the savings rate has increased from 26.4% to
34.8% of GDP.
(iv) Increase in investment : Investment rate also increased from 25.2% to 35.9% of
GDP.
(v) Increase in industrial development : There was a remarkable increase in the rate of
industrialisation ie 8.8% per annum. This was due to the development in sectors like
IT, automobile, pharmaceuticals, biotechnology, etc.

FYJC
(vi) Increase in foreign exchange reserves : There was significant rise in foreign
exchange reserves i.e. $ 185 billion in 2007.

(1) Planned Economy and Unplanned Economy:
Planned Economy Unplanned Economy
There is a central authority like the There is no central authority.
Planning Commission in India.
The central authority takes decisions The economic decisions are based on
regarding what and how much to be market forces.
produced, how, when and where to be
produced and to whom to be allocated.
Under planned economy the public sector In an unplanned or market economy, the
plays an important role. private sector plays a dominant role.
The government plays an active role. The government controls the economy
indirectly through regulatory measures.
(2) Objective of the Tenth Five Year Plan and Eleventh Five Year Plan :
Tenth Five Year Plan Eleventh Five Year Plan
It commenced in 2002. It commenced in 2007.
Two main features of Tenth Five Year Plan The main features of the Eleventh Five
are monetarable targets, integration of Year Plan are inclusive growth,
growth with equity and social justice, improvement in quality of life of people
balanced development, Panchayati Raj especially belonging to SC, ST, NT, OBC
institution, etc. and minorities, etc.
The main objectives of Tenth Plan are to The main objectives of Eleventh Plan are
increase growth rate, per capita income, rapid growth, creation of employment,
national income, standard of living, empowerment of human resources, skill
reduction in regional imbalances, development, environmental sustainability
disinvestment, flexibility in fiscal and etc.
monetary policies, etc.

FYJC
OBJECTIVE QUESTIONS
statements :
*(1) Electricity generated from water is ........................ electricity.
(a) hydro (b) solar (c) thermal (d) atomic
*(2) ........................ transport gives door to door service.

(a) Rail (b) Water (c) Road (d) Air
*(3) In India, railway was introduced in the year .......................

(a) 1753 (b) 1853 (c) 1835 (d) 1935
*(4) ........................ connects different villages.

(a) National highways (b) State highways
(c) District roads (d) Rural roads
*(5) Transport creates ........................ utility.

(a) place (b) form (c) time (d) service
*(6) ........................ is a non-renewable sources of energy.

(a) Solar Energy (b) Wind Energy
(c) Tidal Energy (d) Atomic Energy
(7) Shipping facilities in India are .........................

(a) adequate (b) inadequate
(c) private (d) public
(8) Progress of overseas shipping facilities help to promote ........................ trade.

(a) domestic (b) foreign
(c) national (d) international
(9) Transport and communication is included in ........................sector.

(a) primary (b) tertiary
(c) secondary (d) None of these
Economics 66 Infrastructure Development In India

FYJC
(10) Television was introduced for the first time in India in ........................
(a) 1948 (b) 1959 (c) 1935 (d) 1950
(11) Indian railway is the largest in ........................

(a) Asia (b) the world (c) nation (d) universe
(12) All India Radio was established in the year ........................

(a) 1935 (b) 1949 (c) 1942 (d) 1945
(13) The construction and maintenance of national highways rest with the ........................
Government.
(a) central (b) state (c) regional (d) domestic
(14) Transport system ........................ economic development.

(a) retards (b) encourages
(c) develop (d) progress
(15) Overseas shipping facilitates ........................ trade.

(a) international (b) internal
(c) state (d) regional
(16) Marine transport is through ........................

(a) water (b) air (c) rail (d) road
(17) In India, railways services are provided by the ........................ Government.

(a) Central (b) State
(c) Public Sector (d) Private
(18) Indian Railway is operated with the aim of ........................

(a) social welfare (b) profit
(c) welfare state (d) no loss no profit
(19) In India, postal services are provided by ........................ government.

(a) State (b) Central (c) Private (d) Regional
(20) Energy obtained from fusion of radioactive element is known as .........................

(a) hydel power (b) atomic energy
(c) thermal power (d) inanimate energy
(21) National Thermal Power Corporation Limited was set up in ........................ at New
Delhi.
(a) 1950 (b) 1975 (c) 1945 (d) 1920
(22) State highways are managed by ........................ .

(a) State Government (b) Central Government
(c) British Government (d) Rural Government
(23) Road transport and railway transport is ........................ to each other.

(a) complementary (b) competitive
(c) suitable (d) enhance

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(24) ........................ is cheapest mode of transport.
(a) Road transport (b) Water transport
(c) Air transport (d) Rail transport
(25) First postal services started in ........................ .

(a) 1837 (b) 1853 (c) 1842 (d) 1857
(26) First telephone services started in .........................

(a) Delhi (b) Kolkata (c) Mumbai (d) Chennai
(27) ........................ has revolutionised communication.

(a) Satellite (b) Doordarshan
(c) Telephone (d) Internet
Ans. (1) hydro (2) Road (3) 1853 (4) Rural road (5) place (6) atomic energy (7) inadequate
(8) foreign (9) tertiary (10) 1959 (11) Asia (12) 1935 (13) Central (14) encourages (15)
international (16) water (17) Central (18) social welfare (19) Central (20) atomic
energy (21) 1975 (22) State Government (23) complementary (24) Water transport
(25) 1837 (26) Kolkata (27) satellite
(B) Match the following Group ‘A’ with Group ‘B’

(1)
(1) Waterways (a) Non-commercial energy
(2) Thermal Power (b) Mass communicating media
(3) Railways (c) Cheapest means of transport
(4) Newspapers (d) Universal education
(5) ‘Sarva Shiksha Abhiyan’ (e) Quickest means of transport
(f) Commercial energy
(g) Public sector project
(h) Private sector project
Ans. (1 – c); (2 – f); (3 – g); (4 – b); (5 – d)
(2)
(1) Overseas shipping (a) Roadways
(2) Largest in Asia (b) Stiff competition
(3) Door-to-door service (c) Links large cities
(4) Coastal shipping (d) Long distance
(5) Shipping (e) Telephone service
(6) Rail transport (f) Indian railways
(7) National highways (g) Links remote areas
(h) Domestic trade
(i) Foreign trade
Ans. (1 – i); (2 – f); (3 – a); (4 – h); (5 – b); (6 – d); (7 – c)

FYJC
(3)
Group ‘A’ Group ‘B’(Names of Airport)
(1) Chennai (a) Netaji Subhas Chandra Bose
(2) Mumbai (b) Indira Gandhi
(3) Hyderabad (c) Sahar
(4) Delhi (d) Meenambakkam
(5) Calcutta (e) Begumpet
(f) Rajiv Gandhi
(g) Sardar Vallabhbhai Airport
(h) Lal Bahadur Shastri
Ans. (1 – d); (2 – c); (3 – f); (4 – b); (5 – a)
(4)
(1) Water transport (a) Fast
(2) Railways (b) Door-to-door services
(3) Road transport (c) Telephone services
(4) M.T.N.L. (d) Domestic trade
(5) Coastal shipping (e) Radio services
(6) Overseas shipping (f) International trade
(g) Cheaper
(h) Costliest
Ans. (1 – g); (2 – a); (3 – b); (4 – c); (5 – d); (6 – f)
(5)
(1) ONGC (a) Oil producing area is Assam
(2) Tarapur (b) Tamilnadu
(3) Bio-gas (c) Derived from non-living matters like
coal
(4) Inanimate energy (d) Cheapest source of energy in rural
area
(5) Digboi (e) Maharashtra
(6) Wind energy (f) Producer of gas
(g) Solar energy
(h) Producer of gas
Ans. (1 – f); (2 – e); (3 – d); (4 – c); (5 – a); (6 – b)

*(1) Infrastructure refers to services and facilities necessary for an economy to function.
*(2) Energy can be obtained from crop-residue.
*(3) Bio-gas is very expensive.
*(4) Inland water transport takes place through rivers.
*(5) India is self-sufficient in the production of petroleum.
*(6) National highways connect important cities and big industrial centres.
*(7) Indian civil aviation sector is not yet opened for private sector.

FYJC
(8) Indian railways are operated with the profit motive.
(9) The first ship building yard was started at Vishakhapatnam.
(10) Railway services in India are adequate.
(11) Road transport is costlier than rail transport.
(12) Television services are provided only by Doordarshan.
(13) All roads in India are surfaced.
(14) Development of transport and communication generates more employment.
(15) Rail transport is the oldest mode of transport.
(16) Road and rail transport must be complementary.
(17) Road transport connects all remote areas.
(18) Internet service is the most modern means of communication.
(19) Indian railways are the largest in Asia.
(20) Transport and communication are the nerves of the economy.
(21) Goods transport is nationalised.
(22) Indian Airlines runs internal services.
(23) In India, there are eleven international airports.
(24) Government of Maharashtra is responsible for the construction of Mumbai-Ahmedabad
Road.
(25) Railway routes are unevenly distributed in India.
(26) Many problems are faced by road transport.
(27) There is no co-ordination between rails and roads.
(28) Road transport is the cheapest than all others.
(29) Railways comes under private sector.
(30) In the development of the economy, railways plays an important role.
(31) In our country, the longest distance coverage is by railways.
(32) Bulk traffic in India uses the metre gauge trains.
(33) Railway services in India are adequate.
(34) Largest reserve of natural gas is located in Mumbai High.
(35) Ministry of Non-conventional energy sources was created in 1972.
(36) Coal is the most important source of energy for commercial purposes.
(37) Non-commercial energy is utilised much more in rural areas.
(38) Electricity generated by burning of coal, mineral oil, etc is called hydel electricity.
(39) National highways are managed by State Government in India.
(40) Agriculture and industrial development depends on the development of transport
facilities.
(41) Inland waterways authority of India was constituted under the Inland Waterways of
India Act, 1985.
(42) Air transport in India operates at four levels.
(43) Mahanagar Telephone Nigam Ltd. (MTNL) and Bharat Sanchar Nigam Limited are the
government undertakings.
(44) Newspapers, radio, Doordarshan etc. are the personal means of communication.
(45) Satellite communication is the highest achievement in the field of communication.
(46) Inadequate energy supply is one of the major problems faced by the Indian economy.
(47) The Golden Quadrilateral Project is concerned with connecting India and Pakistan
through roadways.
Ans. (1) True (2) True (3) False (4) True (5) False (6) True (7) False (8) False (9) True (10)
False (11) True (12) False (13) False (14) True (15) False (16) True (17) True (18)
True (19) True (20) False (21) False (22) True (23) True (24) False (25) True (26)
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True (27) False (28) False (29) False (30) True (31) True (32) False (33) False (34)
True (35) True (36) True (37) True (38) False (39) False (40) True (41) True (42)
False (43) True (44) False (45) True (46) False (47) True

*(1) Infrastructure
Ans.
Economic development is a continuous process and it is accompanied by the growth
of infrastructure.
The term, ‘infrastructure’ refers to all those services and facilities necessary for an
economy to function. It includes energy banking, insurance, marketing, transport and
communication as well as social overheads like education, health etc.
*(2) Communication
Ans.
(a) Communication is sending and receiving of the spoken and written messages between
the people at different places.
(b) Post and telegraph, telephone, e-mail and fax are means of communication.
*(3) Internet
Ans.
(a) Internet is the communication device linked to the computer.
(b) The user can go on a website and find access to the required information.
(c) Internet is used in banking, rail and air ticket booking and a number of other services.
(d) The Internet user can send e-mails to any part of the world.
*(4) Atomic energy

Ans.
(a) Atomic energy is generated from the radioactive elements like uranium, thorium and
plutonium.
(b) Considerable progress has been made in the direction of atomic energy.
(c) This energy is generated at atomic power stations.
*(5) Hydro-electricity
Ans.
(a) Hydro-electricity generated from water is known as hydel power.
(b) The water falls from considerable heights.
(c) This is a pollution-free method of generating electricity.
Q.2. (B) Give reasons or explain the following statements:

(1) Modernisation of postal services improved its efficiency.
Ans.
(i) Postal services were started by British Government since 1837.
(ii) Post and Telegraph Department of India started providing postal services after
Independence.
(iii) PIN Code Number is introduced to reach the letters faster.
(iv) Postal service is the cheapest service which delivers mail, money orders and parcels
to all parts of India.

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(2) Indian government has opened up the infrastructure sector to private
participation.
Ans.
(i) Infrastructure refers to all those services and facilities necessary for an economy to
function.
(ii) It includes energy, banking, insurance, marketing, transport, communication,
education, health, etc.
(iii) Larger the infrastructural facilities, greater the employment opportunities, larger the
capital accummulation which makes the economy globally competitive. If these
services are given only by Government sector, it may be insufficient.
(iv) Therefore, the Government of India has opened up the infrastructure sector to private
sector which is essential for a sustained economic development.
Q.3. (A) Distinguish between:

(1) Road Transport and Water Transport :
Road Transport Water Transport
Means of transport which moves on the Means of transport which move on the
surface of the earth is called road surface of the water is called water
transport. It is carried on through national transport. It is carried on through rivers,
highways, state highways, etc. canals and ocean transport.
Road transport requires relatively huge Water transport does not require any
capital expenditure for the construction expenditure in providing tracks or roads.
and maintenance of the roads. It is Trade is carried on through natural
comparatively an expensive means of waterways. It is the cheapest means of
transport over a long distance. transport over a long distance.
Road transport is suitable for internal Water transport is suitable for internal as
trade. It provides door-to-door services. well as foreign trade. It does not provide
door-to-door services.
The means of road transport are animals, The means of water transport are boats,
carts, motor cars, trucks, tempos, tankers, barges, steamers, liners, tramps and
etc. tankers, etc.
*(2) Roadways and Railways :

Roadways Railways
Road transport is the oldest mode of Railway transport came into existence after
transport. It is as old as human civilisation. the Industrial Revolution, i.e. around 1760.
In India, rail transport started in 1853.
Road transport is suitable for short Rail transport is suitable for long distances
distances, for carrying light and perishable for carrying heavy and bulky goods such as
goods such as consumer goods, fruits, iron ore, steel, machinery, cotton, coal, etc.
vegetables, food grains, fish, meat, eggs,
etc.

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Road transport is necessary to connect Railway transport connects big cities and
small towns and villages. It gives door-to- towns. It gives point to point services. It
door services. It carries goods and carries goods and passengers from one
passengers from one corner of the country railway station to another.
to another.
Road transport has limited speed Railway transport operates at a high speed
particularly over a long distances due to due to mechanical devices, straight railway
rough roads, traffic jams, signals, tracks and absence of obstructions on
accidents, etc. railway tracks.
(3) Conventional Energy Sources and Non Conventional Energy Sources:
Conventional Energy Sources Non-Conventional Energy Sources

It includes inanimate type of energy It includes inanimate type of energy
resources e.g. energy obtained from fuel resources but it is classified into renewable
wood, waste material from farms, coal, or non-renewable energy resources.
natural gas etc.
Conventional energy resources are Non-conventional energy resources are
exhaustible in nature i.e. it cannot be inexhaustible in nature i.e. it can be stored.
stored for future.
Generation of this energy requires Huge capital is required for generation of
comparatively less capital investment. this energy.
E.g. It includes non-commercial energy E.g. It mainly includes mainly solar energy,
resources like dried cow-dung, fuel wood wind energy, geo-thermal energy, tidal
and commercial energy resources like energy, urban waste, etc.
coal, mineral oil, natural gas, etc.
(4) Animate Energy Sources and Inanimate Energy Sources:

Animate Energy Sources Inanimate Energy Sources
Meaning
Energy derived from living organism is Energy derived from non-living matters is
known as animate energy. called inanimate energy.
Material Used
Prior to the industrial era, living organisms It is generated from non-living-matters like
e.g. animals were used to generate coal, mineral oil, natural gas, etc.
energy.
Scale of resources
Prior to the industrial era, resources were In the present industrial era, resources are
used on a small scale to generate this used on large scale to generate inanimate
energy. energy.

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(5) National Highways and State Highways:
National Highways State Highways
Meaning
These are the roads which connect large These roads connects important cities and
cities and big industrial centres of the industrial centres of the state. e.g. Mumbai
country. e.g. the road from Mumbai to Goa to Pune is State Highway.
is a National Highway.
Who Manages
National highways are managed by the State highways are managed by State
Central Government. Government
Distance
Mostly they are long distance routes. They are short or medium distance routes.
Busy Traffic
National highways are always busy. State highways are relatively less busy
routes.
(6) Thermal Power and Hydel power:

Thermal Power Hydel Power
Electricity generated by burning fuels like Electricity generated by falling water is
coal, natural gas, wood, lignite, etc. is called hydel power.
called thermal power.
Generators of this power requires Huge amount of capital is required. It
comparatively less capital. includes cost of storing water.
Thermal power plant can be installed It takes comparatively more time. (Hydel
within short period as compared to hydel power takes a long period of gestation).
power.
It has higher operating cost. It has comparatively low operating cost.
It causes air problems like air pollution, There is no problem of generation of hydel
water pollution, etc. power.
(7) Economic Infrastructure and Social Infrastructure:

Economic Infrastructure Social Infrastructure
Economic Infrastructure facilitates Social Infrastructure is required to improve
production, distribution of goods and the quality of human resources.
services for economic development.
Economic infrastructure includes physical, It consists of education, health services,
technical factors like energy, transport and etc.
communication.
It helps in the improvement of productive It helps in the development of human

capacity of the economy. resources in the economy.

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(8) Non-Renewable Sources of Energy and Renewable Sources of Energy :
Non-Renewable sources of energy Renewable sources of energy
They are inanimate type of energy They are also inanimate type of energy
resources which include non-commercial resources but they are not classified into
as well as commercial energy resources commercial or noncommercial energy
e.g. energy obtained from fuel wood, resources.
waste material on farms, coal, natural gas,
etc.
Conventional energy resources are Non-conventional energy resources are
exhaustible in nature, i.e. they cannot be inexhaustible in nature, i.e. they can be
stored for future. stored.
Generation of this energy requires Huge capital is required for generation of

comparatively less capital investment. this energy.
(9) Water Transport and Air transport.:

Water transport Air transport
Cost
As compared to other modes of transport, This is the costliest mode of transport.
this is the cheapest mode of transport.
Speed
Comparatively, it is a slow mode of It is a very fast mode of transport.
transport.
Transport material
Heavy and bulky goods such as minerals, Light materials, costly goods, medicines
oils, machinery, etc. are transported and fruits, etc. are transported through
through water transport. airways.
Cost of maintenance
It requires less maintenance cost as It requires high maintenance cost to
compared to air transport. maintain airports and planes.
Means
The means of water transport are tankers, The means of transport are passenger
boats, ocean liners, etc planes, jumbo jets, helicopter, cargo
planes, etc.
Risk factor
Water transport is subject to more risk. It involves less risk because the planes are
maintained with care and utmost caution in
order to protect the life of the passengers
and valuable goods.

FYJC
Q.4. Answer with reasons whether you agree or disagree with the following
statements :
*(1) Education forms the backbone of the modern economy.
Ans.Yes, I do agree with the above statement.
Reason : For reasons, please refer answer to Q.17.
*(2) Transport and economic development are interrelated.

Ans. Yes, I do agree with the above statement.
Reason : For reasons, please refer answer to Q.7.
*(3) Energy sector does not face any problem in India.

Ans. No, I do not agree with the above statement.
Reason :
(i) Energy refers to power or capacity to perform the work. It is a significant input for all
economic activities.
(ii) Availability of energy and economic development are interrelated. Energy is required
by man and machine for improving the physical quality of life.
Problems faced by Energy Sector (Energy crisis) :
(i) Most of the State Electricity Boards (SEBs) are financially weak.
(ii) Theft of power and poor cost recovery are responsible for increase in losses.
(iii) There is inadequate power supply. It adversely affects agricultural and industrial
development.
Measures to solve energy problems :
(i) Promoting more renewable sources of energy.
(ii) Implementing proper tariff rates and appropriate pricing policy.
(iii) Encouraging private sector participation.
(iv) Removing legal barriers to expand power generation capacity.
(v) Reducing consumption of commercial sources of energy.
It is to be remembered that ‘Saving energy means creating energy’. It is necessary to
overcome the problem of load shedding, in order to meet the goal – ‘Power For All’
which will lead to sustainable development of the country.
(4) Indian railways are owned and managed by the Central Government.
Ans. Yes, I agree with this statement, because-
Reasons :
(1) Railways require huge capital investment on account of purchase of land, laying
tracks, construction of stations, maintenance of railways, etc. which can be managed
only by the Government.
(2) The private sector cannot make such a huge capital investment. For these reasons, in
India, railways are owned and managed by the Central Government.
(3) Railways are a public utility. They are meant for providing essential services to the
public at a reasonably low rate and must operate for the larger interest of the public
which private sector cannot afford to do.

FYJC
(5) Road transport is cheaper than water transport.
Ans. No, I do not agree with this statement. Water transport is cheaper than road transport.
This is because:
Reasons :
(1) In the case of road transport, heavy capital expenditure has to be incurred on the
construction of roads, their periodical repairs and maintenance. On the contrary, water
routes are natural. No construction of waterways, their periodical repairs and
maintenance are required. Hence, considerable capital expenditure is saved.
(2) In the case of water transport, expenditure on steam power and fuel is also
comparatively less. The cost of running steamers, boats, barges, liners, etc., is also
less as the number of staff, crew and officers to be appointed is also limited.
(3) Since the carrying capacity of vehicles in water transport is considerably high as
compared to that of road vehicles, carrying cost per unit of commodity or per person is
low.
(6) Motor transport is expensive for long distance.

Ans. Yes, I agree with this statement. This is because :
Reasons :
(1) Motor transport is expensive for long distance on account of the high cost of fuel,
breakdowns, traffic jams, accidents, etc.
(2) Compared to the water transport and the railway transport, motor transport is not
suitable for the transport of goods on a very large scale and in a large volume due to
its limited carrying capacity. As a result, carrying cost per unit or per person remain
higher.
(3) Freight rates are not standardised. They vary according to demand, seasons and even
hours of the day. Motor transport during the night is dangerous.
(7) Motor transport is suitable for bulky goods.

Ans. No, I do not agree with this statement. Motor transport is not suitable for bulky goods.
This is because :
Reasons :
(1) Bulky goods require a lot of space. The motor vehicles have limited space.
(2) Bulky goods are generally heavy in weight. Motor transport finds it difficult and risky to
carry heavy goods.
(3) The carriage of a limited number of bulky goods by motor transport increases the cost
of transport. It also takes a longer time to reach the destination. There are chances of
certain risks like sudden breakdown, stoppage, robbery, etc.
(8) Progress of Indian roads is very good.

Reasons :
(1) The length of roads is growing very slowly in India. As compared to its population,
road development is not sufficient for the people. 30% of the villages are still without
roads.
(2) Besides this, the quality of roads is also not good. This results in wastage of fuels,
depreciation of tyre, accidents, etc.

FYJC
(3) Also, road transport is unequally distributed. Some states have better road facilities
and some have poor facilities.
Hence, progress of Indian roads is not very good
(9) Transport system helps faster economic development.

Ans. Yes, I do agree with this statement.
Reasons :
(1) Transport is a very important form of infrastructure.
(2) Transport moves men, machines and raw materials to the place of production.
(3) It also carries goods produced to the markets.
(4) Because of transport, markets expand and rapid industrialization is possible. Internal
and international trade also develops at a fast pace. The world is brought close only
because of development transport. Hence, it is right to say that transport system helps
faster economic development.
(10) Transport and communication are inter linked.

Reasons :
(1) Transport means conveyance of goods while communication means conveyance of
information.
(2) Conveyance of information is very necessary for the development of industry, trade
and commerce.
(3) All tangible communications like letters, documents etc. have to be sent by transport.
(4) Improvement in communications will lead to speed up the transport and improvement
in transport will lead to speed up the communications.
Hence, it is right to say that both transport and communications are interlinked.
(11) Water transport is the cheapest mode of transport.

Ans. Yes, I do agree with the given statement. As compared to other modes of transport,
water transport is cheapest one:
Reasons :
(1) Waterways are naturally available.
(2) There is no cost of construction as well as cost of maintenance.
(3) The consumption of fuels is very less in water transport.
(4) It is the most convenient mode of transport for heavy goods like minerals, machinery,
coal, food grains, etc.
(5) For water transport, there is no problem of congestion.
All these make the waterways the cheapest mode of transport.
(12) Communication plays a significant role in development of the country.

Ans. Yes, I do agree with the given statement. The following points clears the role of
communication in the process of economic development.
Reasons :
(1) Personal means of communication like telephone, telegraph, fax, etc. are very useful
for trade, commerce and other economic activities.
(2) Communication services are available at a cheaper rate.
FYJC
(3) It takes less time.
(4) Lakhs of people can be communicated with at the same time.
(5) It helps to motivate people to be active in nation building activities.
All these proves that the role of communication is significant in development of a
country.
(13) Airways are not so important in India.

Ans. No, I do not agree with the given statement because:
Reasons :
(1) India has geographically such a location where role of air transport becomes very
significant.
(2) In India, important industrial and trade centres are situated for away from each other.
(3) Airways are the fastest mode of transport.
(4) India is a vast country both in size of population and area..
(5) Other modes of transport are also not so developed.
All these proves that air transport is important in

FYJC
OBJECTIVE QUESTIONS
Q.1. (A) Select the proper option from the options given below, and rewrite the
statements :
*(1) Statistics is a .........................
(a) Science (b) Arts (c) Language (d) Religion
*(2) Statistics are ........................ of facts.

(a) aggregates (b) isolation (c) averages (d) multiplication
*(3) The word ‘statistics’ is derived from the ........................ word which means status.
(a) Latin (b) Greek (c) Sanskrit (d) Arabic
*(4) Statistics studies ........................ information.

(a) qualitative (b) imaginary
(c) structural (d) quantitative
*(5) The word ‘statistics’ generally means collection of ........................ .
(a) diagrams (b) data
(c) division of facts (d) subtraction of facts
(6) ........................ has first introduced the word ‘statistics’.

(a) A.L. Bowely (b) Seligman
(c) Gottfried Achenwall (d) Horace Seerist
(7) ....................... is the backbone of economics.
(a) Maths (b) Statistics
(c) History (d) Science
(8) Statistical statements .......................

(a) are quantitative (b) are qualitative
(c) are constructive (d) are simple
(9) Statistical information is .......................

(a) average of facts (b) multiplication of facts
(c) division of facts (d) subtraction of facts
(10) The importance of statistics .......................

(a) increased due to arithmetic (b) increased due to algebra
(c) increased due to geometry (d) increased due to globalization
Economics 80 Introduction to Statistics

FYJC
Ans. (1) Science (2) aggregates (3) Latin (4) Quantitative (5) data (6) Gottfried Achenwall
(7) Statistics (8) are quantitative (9) average of facts (10) increased due to
globalization
(B) State whether the following statements are True or False

*(1) Statistics is a science.
*(2) Statistics is affected by multiplicity of causes.
*(3) Statistical laws are not mathematically correct.
*(4) Statistics is numerically expressed.
*(5) Statistics cannot be used in research.
(6) Statistics are aggregate of facts.
(7) Statistics is not useful in agriculture.
Ans. (1) True (2) True (3) True (4) True (5) False (6) True (7) False

(1) Statistics :
Ans.
(i) Statistics is an independent branch of knowledge.
(ii) The word ‘Statistics’ basically means collection of data.
(iii) The word ‘Statistics’ is derived from a Latin word ‘status’, or Italian word ‘statista’, or
German word ‘Statistik’, or French word ‘Statistique’ which means a political state.
(iv) A political state requires various statistical data for its day-to-day functioning like
population, birth and death rate, unemployed people, available resources, receipts,
expenditure, etc.
(v) Seligman defined “Statistics is the science which deals with methods of collecting,
classifying, presenting numerical data collected to throw some light on any sphere of
enquiry.”
(B) State whether the following statements are true or false with reasons :
*(1) Importance of statistics has increased to a larger extent.
Ans.
(i) It is a proven fact that now-a-days the scope of statistics has increased to a larger
extent.
(ii) The facts and figures are affected by a large number of causes and it is very difficult to
separate the effect of various forces on a particular phenomenon.
(iii) For example, the demand for coffee is affected by level of income, price, taste, etc.
(2) Economic laws are more accurate due to statistics.

Ans.
(i) Economic laws are hypothetical and conditional.
(ii) These laws explain the economic situations in the country.
(iii) Different laws like Law of Diminishing Marginal Utility, Law of Demand and their Utility
can be explained with the help of statistics.
(3) Statistics is helpful for economic planning.

Ans.
(i) Economic planning is very essential for the smooth functioning and growth of an
economy.
FYJC
(ii) Statistics plays a vital role in the formation of economic plans and its construction.
(iii) Statistical data is useful for the evaluation of planning.
Q.3. Write answers in one or two paragraphs each (Short notes) :

(1) State the features of Statistics.
Ans.
(i) The word ‘Statistics’ basically means collection of data.
(ii) According to Seligman, “Statistics is the science which deals with methods of
collecting, classifying, presenting numerical data collected to throw some light on any
sphere of enquiry.”
The basic features of statistics are :
(i) Data is collected in a systematic manner for a predetermined purpose.
(ii) Statistics are aggregates of facts.
(iii) It is a scientific collection of numerical data.
(iv) Statistics are affected by multiplicity of causes
(v) Statistics are numerically expressed.
(2) State the importance of statistics.

Ans.
The word ‘Statistics’ basically means collection of data. According to Seligman,
“Statistics is the science which deals with methods of collecting, classifying,
presenting numerical data collected to throw some light on any sphere of enquiry.”
Statistics is important in the study of economics. The importance of statistics is
as under:
(i) Study of different economic problems.
(ii) To find out remedies to solve economic problems.
(iii) Plays a vital role in economic planning.
(iv) Helps in explaining different economic laws.
(v) Helps in economic researches.
(vi) Helps us to understand and move in the objective of welfare economics.
(vii) Accelerate the globalisation process.
Q.4. State with reasons, whether you agree or disagree with the following:
(1) Statistics is not important to the students of economics.
Ans. No, I disagree with the statement. Statistics is very important to the students of
economics.
Reasons:
(a) The word ‘Statistics’ basically means collection of data.
(b) According to Seligman, “Statistics is the science which deals with methods of
collecting, classifying, presenting numerical data collected to throw some light on any
sphere of enquiry.”
(c) Statistics is important in the study of economics. The importance of statistics is as
under:
(i) Study of different economic problems.
(ii) To find out remedies to solve economic problems.
(iii) Plays a vital role in economic planning.
(iv) Helps in explaining different economic laws.
(v) Helps in economic researches.
(vi) Helps us to understand and move in the objective of welfare economics.
(vii) Accelerate the globalisation process.
FYJC
(2) With the help of statistics various economic problems can be solved.
Reasons:
Statistical data helps us to solve various economic problems. It helps us in the following
ways :
(i) Helps us to study and understand economic problems : Statistical data helps us to
understand different economic problems like production, consumption, distribution of
wealth and income, pricing, saving and investment, etc.
(ii) Remedial measures to solve economic problems : Statistical data and statistical
methods play a vital role in solving various economic problems such as poverty,
illiteracy, unemployment, disparities in the distribution of income and wealth, etc.
(iii) Formation of a better economic plan : Statistical data plays a very important role in
the formation of a better economic plan. Further, economic planning is evaluated by
using statistical data.
(iv) Achieving welfare economics : The final objective of economics is maximisation of
human welfare and that can be achieved through proper direction to economic
planning. Statistical data helps us to reduce severity of trade cycles, unemployment,
poverty, etc.
(v) Availability of resources : Statistical data gives us an idea of available resources
which can be used for further development.
(vi) Optimum utilisation of resources : Optimum utilisation of resources is possible only
with the help of statistical data.
(vii) Rapid economic development : Rapid economic development can be achieved with
the allocation of resources in the best way.

FYJC
OBJECTIVE QUESTIONS
statements :
(1) The data originally collected by the investigator in the process of investigation is called
the ........................ data.
(a) primary (b) secondary
(c) borrowed (d) second-hand
(2) The data collected from other persons or other sources are called the ........................
data.
(a) primary (b) secondary
(c) official (d) confidential
(3) The ........................ data should not be accepted at their face value.
(a) secondary (b) primary
(c) raw (d) first-hand
(4) In the Mailed Questionnaire Method, the expenses of postage are borne by the
........................ .
(a) respondent (b) investigator
(c) enumerator (d) none of the above
(5) Deliberate sampling implies selection of items by ......................... .

(a) choice (b) chance (c) purpose (d) quota
(6) A random sampling permits ........................ chance to all the items for being selected.
(a) uneven (b) equal (c) accurate (d) direct
(7) Under the ........................, the investigator has to meet each and every respondent.
(a) Enumerator Method (b) Mailed Questionnaire Method
(c) Inclusive method (d) Exclusive method
(8) Deliberate sampling is also called ........................ sampling.

(a) purposive (b) unrestricted
(c) random (d) exclusive
Economics 84 Collection and Organization of Data

FYJC
(9) Census method is relatively ........................ .
(a) cheaper (b) costlier (c) exclusive (d) inclusive
*(10) ........................ data is collected by someone else and used by the investigator
(a) Primary (b) Secondary
(c) Confidential (d) Raw
(11) The method in which the data are collected for each and every item of the population
is called ........................ method.
(a) census (b) sample (c) random (d) Inclusive
(12) The facts or information collected for statistical analysis is known as .........................
(a) facts (b) data
(c) first-hand data (d) data collection
(13) Published data used in further research are called........................ data.

(a) secondary (b) primary
(c) raw (d) first-hand data
(14) Deliberate sampling implies selection of items by ........................ .

(a) chance (b) choice (c) purpose (d) quota
(15) Primary data are more ........................ .

(a) reliable (b) borrowed
(c) expensive (d) confidential
(16) ........................ data is original data.
(a) Secondary (b) Primary
(c) Borrowed (d) Second-hand
(17) Published sources form ........................ data.

(a) secondary (b) primary (c) purposeful (d) raw
(18) Data from the tables by the C.S.O. are ....................... data.
(a) secondary (b) reliable (c) purposeful (d) systematic
*(19) Random sampling is a sampling by ........................

(a) chance (b) choice (c) purpose (d) qutota
(20) Primary data collected through agents will be ........................ .

(a) approximate (b) borrowed (c) first-hand (d) raw
(21) Illiterate people cannot be investigated by the ........................ method.

(a) questionnaire (b) interview
(c) direct (d) indirect

FYJC
(22) Records maintained by government and private offices are ........................ sources.
(a) reliable (b) unpublished (c) first-hand (d) published
(23) ........................ method collects data from everyone in the universe.

(a) census (b) simple (c) exclusive (d) inclusive
(24) ........................ method of survey may incur heavy expenditure.

(a) sample (b) random (c) census (d) exclusive
(25) Publication of NAS is an/a ........................ publication.

(a) official (b) private (c) confidential (d) public
(26) ........................ method covers each and every item of the population.
(a) sample (b) census (c) random (d) exclusive
(27) ........................ data is borrowed data.

(a) Primary (b) Secondary (c) Raw (d) Borrowed
*(28) In case of ........................ method, each and every unit of population is studied.
(a) deliberate (b) census
(c) questionnaire (d) inclusive
(29) The data collected by the investigator for the first time is called ........................ data.
(a) primary (b) secondary (c) reliable (d) original
(30) Collection of ........................ data is time consuming.
(a) primary (b) secondary (c) borrowed (d) second-hand
(31) Secondary data is ........................ data.

(a) borrowed (b) original (c) raw (d) official
*(32) The extreme value of the classes are called .....................

(a) frequency (b) classmark
(c) class limit (d) exclusive
(33) The investigation carried out with the whole group under observation is
......................... method.
(a) census (b) sample
(c) deliberated (d) questionnaire
Ans. (1) primary (2) secondary (3) secondary (4) investigator (5) chance (6) equal
(7) Enumerator Method (8) purposive (9) costlier (10) Secondary (11) census (12) data
(13) secondary (14) choice (15) reliable (16) primary (17) secondary (18) secondary
(19) chance (20) approximate (21) Questionnaire (22) unpublished (23) census
(24) census (25) Official (26) census (27) secondary (28) census (29) primary
(30) primary (31) borrowed (32) class limit (33) census

FYJC
(B) State whether the following statements are True or False.
(1) The Central Statistical Organisation publishes the data on national aggregates.
(2) The secondary data should not be taken for granted.
(3) The collection of primary data requires no time or energy.
(4) Primary data are original in nature.
(5) Mailing method of questionnaire is universally applicable.
(6) Random sampling is a mathematical choice of sampling.
(7) In census enquiry, all the items are investigated.
(8) The data collected from The Economic Times is called secondary data.
(9) Report on Currency and Finance is published by the Government.
(10) Primary data are original in nature.
(11) Random sampling is a choice sampling.
(12) Mailing method of questionnaire is universally applicable.
(13) Tippets numbers are used for purposive sampling.
(14) In census enquiry, all items are investigated.
(15) Interview is one of the methods of collecting secondary data.
(16) Method of direct personal investigation is very expensive and time-consuming.
(17) Data which is already collected by some agency is called primary data.
(18) Interim method is the method of collecting primary data and is the most accurate
method.
(19) Primary data are borrowed data.
*(20) Lottery method is an example of random sampling.
(21) A questionnaire is a schedule with asset of question seeking information.
(22) Census method implies inquiry of selected units of the universe.
(23) The publications of the Reserve Bank of India are primary data.
(24) Under sample survey method, only part of the universe is investigated.
(25) Sampling method is biased and may be subject to errors.
*(26) Secondary data is original in character.
(27) Method of direct personal investigation is very expensive and time-consuming.
(28) There is heterogeneity of witnesses in indirect oral investigation.
*(29) Questionnaire method is used to collect secondary data.
(30) There are no official publications of Governments.
*(31) Indirect investigation is useful for the enquiry of complex problem.
(32) Primary data is more reliable.
(33) Direct personal interview method is costly.
(34) Questionnaire method is costly
*(35) Larger the size of samples, greater will be the accuracy
(36) Secrecy can be maintained in the mailing method.
(37) Government official publications is a source of primary data.
(38) A sample survey is economical.
(39) There are no limitations of sample method.
*(40) Collection of primary data is time consuming.

FYJC
Ans. (1) True (2) True (3) False (4) True (5) False (6) False (7) True (8) True (9) False
(10) True (11) False (12) False (13) False (14) False (15) False (16) True (17) False
(18) True (19) False (20) True (21) True (22) False (23) False (24) True (25) True
(26) False (27) True (28) True (29) False (30) False (31) True (32) True (33) True
(34) False (35) True (36) True (37) False (38) True (39) False (40) False

(1)
(1) Primary Data (a) Ministry of Finance
(2) Frequency Array (b) Selection by chance
(3) Deliberate Sample (c) Systematic arrangement
(4) Random Sample (d) Orderly arrangement
(5) Census method (e) Original data
(f) Selection by choice
(g) Time consuming
(h) Time Efficient
Ans. (1 – e); (2 – c); (3 – f); (4 – b); (5 – g)
(2)
(1) World Bank Publication (a) Original data
(2) Census Method (b) Report on currency and finance
(3) Primary Data (c) New items
(4) Sample (d) Official publication
(5) R.B.I. (e) Time-consuming
(f) Orderly arrangement
(g) Private publication
(h) Private sector
Ans. (1 – d); (2 – e); (3 – a); (4 – c); (5 – b)
(3)
(1) Time series (a) Government organization
(2) C.S.O. (b) Time-consuming
(3) World Bank Publication (c) Private publication
(4) Primary data (d) Foreign Official Publication
(5) Census Method (e) Original
(f) Attributes
(g) Borrowed data
(h) Time effficient
Ans. (1 – c); (2 – a); (3 – d); (4 – e); (5 – b)
FYJC
(4)
(1) Time series (a) Expensive
(2) Sample Method (b) Costly method
(3) Class mark (c) Mid point
(4) Secondary Data (d) Economical
(5) Frequency array (e) Art
(f) Borrowed data
(g) Time-interval
(h) Extreme value
Ans. (1 – g); (2 – d); (3 – c); (4 – f); (5 – b)
Q.2. State with reasons whether you agree or not with the following:
(1) Census Method is very expensive.
(a) In the Census Method, the data is collected for each and every item of the population.
(b) It leads to voluminous work which requires a large army of enumerators.
(c) The cost of printing, salaries and travelling allowances of the enumerators increase
the total cost. It is very expensive and time consuming as compared to the other
methods of survey.
(2) In random sampling, the selection of units or items are done by change.
(a) In random sampling, a strict process of selection similar to that of drawing of lots is
followed.
(b) In random sampling, each and every item or unit gets an opportunity of being selected
in the sampling.
(c) In random sampling, selection is done not by choice but by chance.
(3) Secondary data is more reliable.

Primary data is more reliable. It is the data which is collected for the first time by the
Investigator himself whereas the data which is accepted by the investigator which has
already been collected by someone else is called the secondary data. Hence, the
primary data is original and most reliable because it is the first-hand information data.
(4) Questionnaire method has no limitations.

In questionnaire method, a list of questions on the subject to be enquired is prepared.
It is then sent to the informants. But this method has the following limitations:
(a) It is the slowest of all methods.
(b) People may not respond due to their indifferent attitudes.
(c) This method cannot be used for the illiterate population.
(d) People may not give the correct information.
FYJC
*(5) Secondary data can be collected only through publications of educational
institutions.
Universities and research institutions publish data on various issues but the secondary
data can be collected from the following other sources:
(a) Official publications of Central, State and Local Governments.
(b) Reports published by CSO, RBI, NCAER, IMF, UNO etc.
(c) Publications of private organizations like Economic Times, Economic and Political
Weekly, etc.
(6) Census method is very reliable.

In Census Method, information is collected from each and every unit in the population.
So, there are no errors and we get the accurate information. It also provides all major
and minor details. Hence, Census Method is very reliable.
(7) Utmost care has to be taken while using secondary data.

Reasons :
(a) Secondary data is collected by someone else and used by an investigator.
(b) It is exactly a borrowed data.
(c) It is also second-hand data.
(d) Collection of secondary data is less expensive.
(e) It is also time saving. But, it is less reliable as compared to primary data.
(f) Secondary data can be obtained from two sources, i.e. published and unpublished
sources.
(g) Published sources include data which is collected and published by someone.
(h) But unpublished sources include the data which is collected by someone but not
published.
(i) Utmost care has to be taken while using secondary data.
(j) The investigator should be aware of its limitations.
(k) The data is already collected by someone else. So various factors are to be
considered like :
(i) Degree of accuracy
(ii) Reliability of its source (i.e. who collected, for what purpose ?)
(iii) Time period (i.e. when it is collected ?)
(iv) Its suitability (i.e. how far is it suitable for the present study ?)
(v) Its adequacy (i.e. is the data adequate enough to provide all the necessary
information ?)
The above mentioned queries have to be considered while using the secondary data.

FYJC
(8) Sampling method has no demerits.
Ans. No, I do not agree with the above mentioned statement.
(a) Sampling method implies the selection of a few items from the given group. They are
called samples.
(b) Detailed information is collected from these samples.
(c) The investigator can predict and generalise the behaviour of a group on the basis of
sample study.
(d) Sampling method is not free from demerits. It has a few demerits which are given
below:
(i) Conclusions are affected, if truly representative samples are not selected.
(ii) It is subject to sampling error.
(iii) If the universe (group) is too heterogeneous, sampling method is not much
useful.
(iv) It is not a completely foolproof method of statistical investigation.
(v) Inadequate size of sampling may lead to unreliable results.

(1) Census Method and Sample Method
Census Method Sample Method
Collection of data for each and every unit of Collection of data for a sample of the
the population is called Census Method. population is called Sample Method.
Collection of data for the entire population Collection of data for a sub-set of
is difficult. population is easy.
It is a time-consuming task. It takes less time.
It is a very expensive method. It is less expensive.
(2) Deliberate Sampling and Random Sampling

Deliberate Sampling Random Sampling
Under deliberate sampling, the selection of Under random sampling, the selection of
items is made by choice. items is made by chance.
It is useful for a small population. It is useful for a large population.
In this method, selection of items may be In this method, there is no possibility of bias
biased. since the samples are selected at random.
This method is not further divided. This method is further divided into lottery
method, serial arrangement method, etc.
(3) Primary and Secondary data.

Primary data Secondary data
It is collected by an investigator for the first It is already collected by somebody else
time. and available for studies.
It is first-hand data. It is second-hand data.
It is the original data. It is the borrowed data.
FYJC
It is more reliable. It is less reliable.

Collection of primary data is costly and time Collection of secondary data is
consuming. economically cheap and time saving.
Census Method and Sampling Method are Published and unpublished data are the
used for collecting primary data. sources for collecting secondary data.
(4) Exclusive Method and Inclusive Method.

Exclusive Method Inclusive Method
When the upper limit of a class is excluded When the upper limit of a class is included
from that class and included in its next in the same class, it is called an inclusive
class, it is called an exclusive method. method.
In this method, there is no gap between In this method, there is a gap between two
class intervals. classes.
Classes overlap each other. Classes do no overlap each other.
(5) Primary Data and Secondary Data.

Primary Data Secondary Data
Primary data is that data which is Secondary data is that which has already
collected for the first time by the been collected and is available in
investigatior. journals, research publications, etc.
Primary data is first-hand data. Secondary data is second-hand data.
Primary data is original data. Secondary data is borrowed data.
Primary data is raw. Secondary data is refined.
Collection of primary data is more Collection of secondary data is less
expensive and more time-consuming. expensive and less time-consuming.
Primary data is more reliable. Secondary data is less reliable.

FYJC
OBJECTIVE QUESTIONS
statements :
*(1) ........................ is an orderly arrangement of data in rows and columns.
(a) Diagrams (b) Table
(c) Bar (d) Histogram
*(2) ........................ is a visual form of presenting tabulated data.

(a) Diagram (b) Picture
(c) Frequency distribution (d) None of the above
*(3) Vertical rectangles representing class frequencies in a frequency distribution is called

......................... .
(a) Histogram (b) Bar diagram
(c) Pie diagram (d) Frequency polygon
*(4) A frequency polygon is a ........................ line curve.

(a) straight line (b) free hand
(c) joint (d) multi-dimensions
*(5) ........................ bar diagram is used for comparisons.

(a) Multiple (b) Simple (c) Sub-divided (d) Percentage
(6) Systematic arrangement of data in a column and row is called ........................

(a) tabulation (b) graph (c) caption (d) Pie-chart
(7) Pie diagram is ........................ representation of data.

(a) circular (b) rectangular (c) triangle (d) square
(8) ......................... represent two or more sets of interrelated data.

(a) Simple tables (b) Simple bar diagram
(c) Multiple bar diagram (d) None of the above
(9) ........................is a graph of cumulative frequency distribution.

(a) Polygon (b) Histogram (c) Ogive (d) Pie diagram
Economics 93 Graphical Presentation of Data

FYJC
(10) ........................is a smooth free hand curve.
(a) Histogram (b) Frequency polygon
(c) Frequency curve (d) Pie digram
Ans. (1) Table (2) Diagram (3) Histogram (4) free hand (5) Multiple (6) Tabulation
(7) Circular (8) Multiple bar diagram (9) Ogive (10) Frequency curve
(B) State whether the following statements are True or False

*(1) Arrangement of data in rows and columns is called classification of data.
*(2) Diagram represents the tabulated data in a visual form.
*(3) Frequency polygon and frequency curve both are the same.
*(4) Histogram gives a graphical presentation of continuous frequency distribution.
*(5) A diagram is an alternative to table.
*(6) Graphs are said to be more technical.
(7) Tabulation is the presentation of data in rows and columns.
(8) A table need not have a table number.
(9) The main statistical part of a table is known as source.
(10) A caption is the row heading.
(11) Two-way tabulation presents three or more characteristics in the same table.
(12) Comparison is very easy if the data is tabulated.
(13) Diagrams give appropriate figures.
(14) Bar diagrams are the easiest and most commonly used device.
(15) In a bar diagram, width of each bar should be the same.
(16) The height of the bars should be proportional to the magnitude of the variable in the
bar diagram.
(17) In a bar diagram, gaps between the bars are carefully avoided.
(18) Height of the rectangle is important in histogram.
Ans. (1) False (2) True (3) False (4) True (5) False (6) True (7) True (8) False (9) False
(10) False (11) False (12) True (13) True (14) True (15) True (16) True (17) False
(18) False

(1)
(1) High order tables (a) Column title
(2) Simple bar diagram (b) Circular form
(3) Histogram (c) One characteristic
(4) Multiple bar diagram (d) Two-dimensional
(5) Pie diagram (e) Several characteristics
(6) Caption (f) More than three related characteristics
(g) Row heading
(h) Bar diagram
Ans. (1 – f); (2 – c); (3 – d); (4 – e); (5 – b); (6 – a)

FYJC
(2)
(1) Foot note (a) Systematic presentation
(2) Head note (b) Horizontal row
(3) Diagram (c) Special information
(4) Tabulation (d) Circle
(5) Graph (e) Unit of measurement
(6) Pie diagram (f) Bar diagram
(7) Stub (g) Histogram
(h) Circular form
Ans. (1 – c); (2 – e); (3 – f); (4 – a); (5 – g) ; (6 – d) ; (7 – b)
Q.2. (A) Explain the concept:

(1) Simple Bar diagram:
Ans.
(i) Simple bar diagram is used to represent only one variable. e.g. year-wise results,
number of students in one division, etc.
(ii) Bar diagrams are called one-dimensional diagrams because only length of the bar is
taken into account and not the width.
(iii) The gap between the two bars is kept uniform and width of all the bars is the same.
(iv) For example, yearwise result.
(2) Pie diagram:

Ans.
(i) When a circle is sub-divided into various component sectors, it is called a pie diagram.
(ii) The angle at the centre of circle is 360°.
(iii) Various component values should be converted into degrees.
(iv) The angles are obtained by the following formula :
Value of Component
i.e.  3600
Total Value
(3) Histogram:
Ans.
(i) Histogram is a set of vertical bars whose areas are proportional to the frequencies
represented.
(ii) A histogram emphasises both length and width of a rectangle.
(iii) It is a two-dimensional diagram.
(iv) There is no gap between the bars.
(4) Percentage Bar:

Ans.
(i) It is a type of bar diagram.

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(ii) In percentage bar diagram, the length of the bar is kept equal to 100.
(iii) Segments are cut in the bar of 100 to represent components.
(iv) Percentage bars are useful in statistical work.
Q.2. (B) Give reasons or explain:

*(1) There are many types of diagrams.
Ans.
(i) There are many types of diagrams like bar diagrams and pie diagram.
(ii) Bar diagrams are again divided into different types – simple bars, sub-divided bars,
percentage bars, deviation bars, etc.
(iii) Bar diagrams are called one-dimensional diagrams because only length of the bar is
(iv) Pie diagram represents a circle which is further divided into different parts to indicate
different components.
*(2) Histogram is not a diagram.

Ans.
(i) Histogram is not a diagram but a graphical presentation.
(ii) Though bar diagram and histogram seem to be the same, the height of the rectangle
represents frequency in the case of a bar diagram whereas area (i.e. height × width)
represents the frequency in the case of a histogram.
(iii) Bar diagram is one-dimensional (only length is considered), whereas histogram is two-
dimensional (both height and width are considered).
(iv) Uniform gaps are left between the adjacent bars whereas no gaps are left in the case
of histograms and they represent a continuous frequency distribution.
*(3) There are a few limitations for diagrams.

Ans.
(i) They are supplementary to tabular data. They are not a substitute.
(ii) They fail to disclose small differences when large figures are involved.
(iii) They can easily be misused and may lead to wrong calculation.
(iv) They are only useful for related data.
Q.3. (A) Distinguish Between

(1) Diagrams and Graphs
Ans.
Diagrams Graphs
A diagram means a drawing or plan that A graph means a drawing that uses a line
shows exactly where something is, what or lines to show how two or more sets of
something looks like or how something measurements are related to each other.
works.
Diagrams are more appropriate for Graphs are more appropriate for
presentation of geographic location in presentation of the data expressed period
certain groups as firms, individuals, etc. wise or in the form of frequency
distribution.

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Ordinary paper can be used to draw and Only graph paper is used to draw and
present the diagram. present the graph.
The diagrams are of various types viz. (1) The graphs are of various types viz. (1)
Simple bar diagram, (2) Multiple bar Histogram (2) Frequency curve and (3)
diagram, (3) Sub-divided bar diagram and frequency polygon.
(4) Pie diagram
(2) Simple Bar diagram and Multiple Bar Diagram:

Ans.
Simple Bar Diagram Multiple Bar Diagram
Simple bar diagram is used when the Multiple bar diagram is used to represent
values of only one data is to be shown. the values of two or three sets of
interrelated data.
e.g., one data like production or population e.g. contribution of different sectors in
or birth rate, etc. is shown. national income for 2 years or birth rates
of 2 or more countries for a number of
years is shown.
Different shades or colours are not required Different shades or colours are used to
for bars. distinguish between the bars.
*(3) Bar Diagram and Histogram:

Ans.
Bar Diagram Histogram
Bar diagram is one dimensional diagram Histogram is two dimensional diagram i.e.
only i.e. only the height of the bar is both height and width are considered.
considered.
Bars are represented leaving the uniform In histograms, there are no gaps between
gaps in between them. the bars.
(4) Histogram and Frequency Polygon:

Ans.
Simple Bar Diagram Multiple Bar Diagram
Histogram is a collection of continuous Frequency polygon is a line graph.
rectangles.
It is not possible to find the slope, rate of Frequency polygon is a continuous graph
change, etc. and it is possible to find the scope, rate of
change, interpolation, extrapolation, etc.
wherever possible.
More varieties of histograms cannot be Two or more frequency polygons can be
constructed on one graph for comparison. constructed on one graph paper to facilitate
comparison.
In case of uneven class intervals, the No adjustment is necessary in case of a
frequencies will have to be adjusted. frequency polygon.

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(5) Bar Diagram and Pie Diagram:
Ans.
Bar Diagram Pie Diagram
Bar diagram is a one-dimensional diagram. Pie diagram is a two-dimensional diagram.
It is rectangular in shape. It is circular in shape.
It can be used to compare a number of It can be used only when the number of
variables. components are small.
Bar diagrams are also called one- Pie diagram is also called a circular
dimensional diagrams because only the diagram or angular diagram because it is a
length of the bar is taken into account and circle divided into different components to
not the width. represent the angular measurement of
each value of the variable.
(6) Frequency Polygon and Frequency Curve:

Ans.
Frequency Polygon Frequency Curve
Frequency polygon is a graph of frequency Frequency curve is a frequency
distribution by joining the mid-points of the distribution by joining the mid-points of the
histogram by a straight line. histogram by a smooth free hand curve.
Scale and pencil are necessary to draw Scale and pencil are not necessary to
straight lines. draw since it is a free hand curve.
Since it is a straight line graph, it has sharp Since it is a free hand curve, it has no
corners. sharp corners.
Q.3.(B) Write explanatory note on:

(1) General principles for constructing diagrams.
Ans. The following principles should be observed while constructing diagrams :
(i) Title : Every diagram must be given a clear-cut, precise and self-explanatory title.
(ii) Proportion : A proper proportion between the height and width should be maintained.
(iii) Scale : Proper scale should be chosen for constructing diagrams.
(iv) Foot Note : It should be given below the diagram to explain any specific point.
(v) Index : An index explaining different types of lines, shades, columns used in the
diagram should be placed on the top, right hand side of the diagram. The scale also
should be mentioned.
(vi) Simplicity : Diagram should be simple as far as possible.
(vii) Accuracy : Each diagram must present the data as accurately as possible.
(viii) Source : The source from where data is taken should be mentioned below the
diagram.
(2) Multiple Bar Diagram

Ans.
(i) Multiple bar diagram present two or more sets of interrelated data.
(ii) They help us to compare two or more related variables at a point of time.
(iii) To distinguish between bars, different colours or different designs are used.
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Year 2001 2002 2003

Income (`. in ‘000s) 5 8 10
Expenditure (`. in ‘000s) 2 6 4
(3) Frequency Curve

Ans.
(i) A frequency curve is a graph of frequency distribution.
(ii) It is drawn by joining the mid-points on the top of rectangle blocks.
(iii) It is joined by free hand smooth curve.
(iv) Example : Draw a frequency curve from the following data.
Marks No. of students
0-10 10
10-20 12
20-30 20
30-40 18
40-50 16

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Q.4. Answer the following questions.
(1) What are the different types of diagrams?
Ans.
(i) Diagram is a geometric form of presenting the data.
(ii) It is a visual aid. Diagrams support tabulation.
Types of Diagrams:
(1) Bar Diagrams:
(i) Simple Bar, (ii) Multiple Bar, (iii) Sub-divided Bar,
(iv) Percentage Bar and (v) Deviation Bar.
(2) Pie Diagrams.
(1) Bar Diagram:
(i) Bar diagrams are called one-dimensional diagrams because only length of the bar is
(ii) Their length shows the frequency of the variable and width provides visual impact.
(iii) The gap between the two bars is kept uniform and width of all the bars is the same.
Types of Bar Diagrams:
Following are the types of bar diagrams:
(a) Simple Bar Diagram (b) Multiple Bar Diagram
(c) Sub-divided Bar Diagram (d) Percentage Bars
(e) Deviation Bar Diagram
Note : All these bar diagrams have been explained in answer to Q. 7 to 11.
(2) What are the essentials of a Good Table?

Ans. Refer Q. 2
(i) Tabulation may be defined as the systematic arrangement of data in rows and
columns.
(ii) It is done for bringing out the essential features and characteristics of the collected
data.
(iii) It is a kind of stepping stone to the analysis and interpretation of data.
Q.5. State the reason whether you agree or disagree with the following statements.
*(1) There is only one type of diagram.
Ans. No, I disagree with the above statement. There are different types of diagrams which
are briefly mentioned as follows.

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*(2) There are a few differences between histogram and frequency polygon.
Ans. Yes, I do agree with the above statement. There are a few differences between
histogram and frequency polygon. They are :
Refer to Q. 3 (A) (4) (i.e. distinction between histogram and frequency polygon).
Q.6. Answer in detail.
(1) Draw a simple bar diagram using the following data:

Year 2000 2001 2002 2003 2004
No. of workers 40 120 80 240 160
(2) Construct a histogram from the following data.

Year 0-10 10-20 20-30 30-40 40-50
No. of students 5 30 25 40 30
(3) Draw a pie diagram from the following data:

Subject % of Marks
Economics 30
English 20
Marathi 10
Organisation of Commerce 15
Secretarial Practice 10
Book keeping and Accountancy 15
(4) Draw a simple bar diagram using the following data.

Year 2000 2001 2002 2003 2004
No. of workers 40 120 80 240 160

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(5) The monthly production of cars by Maruti Company in the first 5 months of 2011
is given below:
Month Jan Feb Mar Apr May
Production (in crores) 150 200 180 220 250
Vertical bar diagram showing the production of cars by Maruti Company in the first 5
months of 2011.
(6) The following data gives the income and expenditure of a family (in `. ‘000) for
the years 2008 to 2011. Using the data, draw a suitable multiple bar diagram :
Year 2008 2009 2010 2011
Income (`. in ‘000s) 2 4 6 7
Expenditure (`. in ‘000s) 1 3 4 6
(7) In a certain college, there are four divisions of class XI. The number of boys and
girls in each division is as follows. Present the data with the help of a multiple
bar and a sub-divided bar diagram.
Division A B C D
Number of boys 50 30 30 20
Number of girls 30 40 30 50

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Vehicles Year
2010 2011
Taxis 40000 50000
Buses 70000 90000
Goods vehicles 90000 130000
Total 200000 270000
(8) The data given below gives a record of motor vehicles registered in Mumbai in
2010 and 2011. Draw a subdivided bar diagram using the data given:
(9) Construct a histogram from the following data.

0-10 5
10-20 30
20-30 25
30-40 40
40-50 30

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(10) Plot a histogram for the data given below.

0-10 8
10-20 6
20-30 10
30-40 12
40-50 4
(11) Draw a pie diagram from the following data.

Subject % of Marks
Economics 30
English 20
Marathi 10
Organisation of Commerce 15
Secretarial Practice 10
Book keeping and Accountancy 15
Total 100
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% value of component
Angle of component sector = x 360o
100
Economics 360
x 360 = 108o
100
English 20
x 360 = 72o
100
Marathi 10
x 360 = 36o
100
O.C. 15
x 360 = 54o
100
S.P. 10
x 360 = 36o
100
B.K. 15
x 360 = 54o
100
Total 3600
(12) Draw a histogram of the given data:

Class interval Frequency (Number of
(Price of sari) saris sold in a week)
100-200 12
200-300 28
300-400 37
400-500 23
500-600 20
600-700 14

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(13) Draw percentage bar diagram of the following data.

Division Total Students No. of Student
Passed
A 60 54
B 64 48
C 70 63
D 80 48
54 x 100
Percentage of passed students in division A = = 90%
60
48 x 100
Percentage of passed students in division B = = 75%
64
63 x 100
Percentage of passed students in division C = = 90%
70
48 x 100
Percentage of passed students in division D = = 60%
80

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OBJECTIVE QUESTIONS
statements :
(1) ........................ is a single value that describes the characteristics of the entire mass
of data.
(a) Average (b) Range
(c) Decile (d) Quartile
(2) .......................... is based on all items of a series

(a) Mean (b) Median
(c) Mode (d) Quartile
(3) Industrial development increases ........................

(a) poverty (b) urbanization
(c) population (d) unemployment
(4) ......................... is affected by extreme values..

(a) Mean (b) Median
(5) ......................... is a positional average. .

(a) Mean (b) Median
(c) Mode (d) Range
(6) The arithmetic mean of the following observations 4, 8, 12, 16 is …………… .

(a) 8 (b) 10
(c) 6 (d) 12
(7) The value of the middle item in an arranged series is known as ..........................
(a) Mean (b) Median
(c) Mode (d) Range
(8) ......................... is the item having highest frequency.

(a) Mean (b) Median
(c) Mode (d) Range
(9) The Second Quartile is known as .......................... .

(a) median (b) lower quartile
(c) upper quartile (d) none
Economics 107 Measures of Central Tendency

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(10) The values which divide the total number of observations into four equal
parts are called .........................
(a) quartiles (b) deciles
(c) percentiles (d) range .
(11) The values which divide the total number of observations into ten equal parts
are called
(a) Per capita consumption (b) Per capita increase
(c) Gross national income (d) net national product
(12) The values which divide the total number of observations into hundred
equal parts are called .......................... .
(a) Economic growth (b) Economic development
(c) Industrialisation (d) Commercialisation
(13) There are ..........................deciles.

(a) 7 (b) 8 (c) 9 (d) 10
(14) There are .......................... percentiles.

(a) 100 (b) 99
(c) 98 (d) 97
(15) ......................... represents the most typical value of a series.

(a) Mean (b) Median
(16) The range of 10, 20, 30, 40 is .......................... . (15, 30, 10,40)
(a) 15 (b) 30
(c) 10 (d) 40
(17) 25thpercentile is equal to ..........................

(a) 1st quartile (b) 25th quartile
(c) 24th quartile (d) 2nd quartile.
(18) Cumulative frequency is needed while finding the .......................... of the

distribution.
(a) mode (b) median
(c) average (d) normal
Ans. (1) Average (2) Mean (3) Mean (4) Mean (5) Median (6) 10 (7) median (8) Mode (9)
median (10) quartiles (11) deciles (12) percentiles (13) 9 (14) 99 (15) Mode (16) 30
(17) 1st Quartile (18) median

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(1)
(1) Mode (a) Group component
(2) Median (b) Difference between the largest and
smallest value
(3) Mean (c) Highest frequency
(4) Central tendency (d) Precise
(5) Range (e) Middlemost item
(f) Lowest frequency
(g) 4 equal parts
(h) Lowest quartile
Ans. (1 – c); (2 – e); (3 – d); (4 – a); (5 – b)
(2)
(1) Mean (a) Most representative value
(2) Median (b) 4 equal parts
(3) Mode (c) 100 equal parts
(4) Quartiles (d) Rigidly defined
(5) Deciles (e) 10 equal parts
(f) Logarithm
(g) Middle item
(h) Precise
Ans. (1 – ); (2 – g); (3 – a); (4 – b); (5 – e)

(1) Average provides representative value of the data.
(2) Mean is the value obtained by dividing the sum of the values of the given items by
number of items.
(3) Quartiles are the value of the items dividing the series into two equal parts.
(4) The First Quartile is the value of items dividing the lower half of the distribution.
(5) The Second Quartile is the middle quartile.
(6) Deciles divide the series into 100 equal parts.
(7) Percentiles divide the series into 10 equal parts.
(8) Median is the value of the middlemost item.
(9) Median can be calculated even when the data is incomplete.
(10) Arithmetic mean is not based on all observations.
(11) Geometric mean uses logarithms.
(12) Geometric mean is used to construct index numbers.
(13) Quartile is not easy to understand or simple to calculate.
(14) Quartiles are based on all the items in a series.

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(15) Quartiles divide the series into ten equal parts.
(16) Median is a calculated average.
(17) Arithmetic mean is a simple measure of central tendency.
(18) Mean can be calculated by mere inspection.
(19) Arithmetic mean has no limitations.
(20) There are no limitations to median.
(21) Absolute measure and relative measure of dispersion means the same thing.
(22) (Arithmetic) Mean is not rigidly defined.
(23) A good average is affected by an extreme item.
(24) If the number of items in a distribution are large, we calculate mean by taking
assumed average.
(25) Weighted arithmetic mean gives equal importance to all items.
(26) Median is not affected by extreme items (values).
(27) Median can be calculated even if the values of extreme items are not known.
(28) Median is capable of algebraic treatment.
(29) Median is the most appropriate average in dealing with qualitative data.
(30) Mode is the value which occurs most frequently in a series.
(31) Mode is the value having maximum frequency.
(32) Mode can be calculated by mere inspection.
(33) Quartiles divide the frequency into 4 equal parts.
(34) Arithmetic mean is also known as average.
(35) If a set has three modal values, it is called bi-modal.
(36) If a set has 3 modal values, it is called tri-modal.
(37) Percentiles divide the series into five equal parts.
(38) Fifth decile divides the series into two equal parts.
(39) Mean and mode means the same thing.
(40) Mean is affected by extreme items.
(41) First decile is greater than first quartile.
Ans. (1) True, (2) True, (3) False, (4) True, (5) True, (6) False, (7) False, (8) True,
(9) True, (10) False, (11) True, (12) True, (13) False, (14) False, (15) False,
(16) False, (17) True, (18) False, (19) False, (20) False, (21) False, (22) False,
(23) True, (24) True, (25) False, (26) True, (27) True, (28) False, (29) True,
(30) True, (31) True, (32) True, (33) True, (34) True, (35) False, (36) True,
(37) False, (38) True, (39) False, (40) True, (41) False.
Q. 2. (A) Answer the following:

*(1) Arithmetic mean :
Ans.
(i) Arithmetic mean is defined as the value obtained by dividing sum of values of
All the given items by the number of items.
Sum of Value of all items
(ii) Formula: a. Mean =
Total number of items

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x1  x 2  x3  ........  xn
(iii) Symbolically :
N
(iv) It is the most popular and widely used measures of central tendency.
(2) Median :
Ans.
(i) Median is the middle value of a series arranged in any order – ascending or
descending.
(ii) Median divides the series into two equal parts.
(iii) Median may be located by mere inspection in certain cases.
(iv) It is not based on all observations.
(3) Mode :
Ans.
(i) Mode is that value which occurs most frequently in a set of observations.
(ii) It is the item which repeats itself the greatest number of times.
(iii) It is easy and can be computed accurately.
(4) Quartiles :
Ans.
(i) Quartiles are values of a data which divide the whole set of observations into four
equal parts.
(ii) Since there are three values – the First Quartile is known as Q1, Second Quartile Q2
and the Third Quartile Q3.
(iii) Second quartile is nothing but the median.
(iv) Q1, Q2, Q3 divide the series into four equal parts in such a way that each part contains
equal number of items.
(5) Deciles :
Ans.
(i) Deciles divide the data into ten equal parts.
(ii) There must be nine points which will divide the arranged series in such a way that each
part contains an equal number of items. The value of these nine points are called
deciles.
(iii) These are denoted as D1 , D2 , D3, ....., D9.
(iv) There are nine deciles in a distribution, the 5th decile
(6) Percentiles :
Ans.
(i) Percentiles divide the data into 100 equal parts.
(ii) There are 99 percentiles giving ninety-nine dividing points, the value of which is called
percentile.
(iii) They are denoted by P1 , P2 , P3, ....., P99. (iv) The 50th percentile, P50 is the
median.

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(7) Range :
Ans.
(i) Range is the difference between the largest value and smallest value of the
distribution.
(ii) Range (R) = Largest value (L) – Smallest value (S)
L–S
(iii) The coefficient of range is defined as
LS
(iv) It depends only on two observations, i.e. highest and smallest.
Q.2. (B) Give reasons or explain the following statements:

(1) Arithmetic mean is a measure of central tendency.
Ans.
(i) An average is frequently referred as a measure of central tendency since it lies
between the largest and smallest observations.
(ii) An average is one single value that describes the characteristics of the entire
mass of data.
(iii) Arithmetic mean (or average) is the most popular and widely used measure of
central tendency.
(iv) Arithmetic mean is the value obtained by dividing sum of values of all the given items
by the number of items.
(2) Mode is that value which has maximum frequency.

Ans.
(i) Mode is that value which occurs most frequently in a set of observations.
(ii) Mode is the item which repeats itself the maximum number of times.
(iii) So, from an observation, mode is obtained by choosing the value which repeats
the maximum times.
(iv) Therefore, mode is that value which has maximum frequency.
(3) Mode has a number of merits.

Ans.
(i) Easy and simple : It is comprehensive and simple. It is easy and can be computed
accurately.
(ii) No influence of extreme items : Extreme items have no effect on the mode.
(iii) Value from the series : Mostly, it is the value from the series.
(iv) Most descriptive average : It is useful for qualitative data. It is the most descriptive
average in common uses like modal height of people, modal wages, average number
of railway accidents during a year etc.
(v) All details not required : For the determination of mode, it is not necessary to know
the value of all the items of a series. Only the most frequent item should be known.
(vi) Graphical determination : It can be determined graphically through histograms.
(vii) Open-end classes : Its value can be determined in open-end classes.
(viii) Inspection : In many cases, the value of mode can be determined just by inspection.

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(4) Median divides the series into two equal parts.
Ans.
(i) Median is the middle value of a series arranged in ascending or descending
order.
(ii) The middle value is picked up after arranging them in ascending or descending
order.
th
 N  1
(iii) Formula usedis M = size of   item.
 2 
(iv) So, the median divides the series into two equal parts.
(5) Mean has not any limitation.
Ans.
(i) Mean is defined as the value obtained by dividing sum of all the given items by the
number of items.
(ii) It takes into account the value of all the observations.
x
(iii) Formula used is x 
N
(iv) So, mean is based on each and every item of the series.
(6) Median is not affected by extreme values.

Ans.
(i) Median is the middle value of a series arranged in ascending or descending order.
(ii) Median is not obtained on the basis of the value of all observations.
(iii) The middle value is picked up by using the formula
th
 N  1
M = size of   item.
 2 
(7) Percentiles divide the data into 100 equal parts.

Ans.
(i) Percentiles divide the data into 100 equal parts.
(ii) There are 99 percentiles making ninety-nine dividing points and the value is
called percentiles.
(iii) 50th percentile is the median.
th
th  N  1
(iv) e.g.,the formula used to find out 50 percentile is P50 = 50   item
 100 

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OBJECTIVE QUESTIONS
statements :
(1) The index number for the base year is .........................
(a) 00 (b) 150
(c) 10 (d) 10
(2) Index numbers are ........................ barometers.

(a) statistical (b) mathematics
(c) economic (d) social
(3) The ratio of current year price to base year price multiplied is called ........................
(a) relatives (b) percentage
(c) price relatives (d) quantity
(4) Index numbers are ........................ averages..

(a) multiple (b) simple
(c) specialized (d) joint
(5) ...................... index number is known as index number.

(a) Laspeyres (b) Paasche’s
(c) Fisher ’s (d) General
(6) Index numbers are expressed in ........................ form.

(a) decimal (b) percentage
(c) fraction (d) ratio
(7) The purchasing power of a rupee ........................ with the increase in the price index
number.
(a) increases (b) decreases
(c) remains the same (d) none of these
(8) Index numbers are ........................

(a) Mode (b) Median
(c) Specialised average (d) Mean
(9) Index numbers are useful for determination of ........................ policy.

(a) production (b) distribution
(c) fixing decrease allowance (d) none of these
Ans. (1) 100 (2) economic (3) percentage (4) specialized (5) Fisher’s (6) ratio (7) decrease
(8) Specialised average (9) fixing decrease allowance
Economics 114 Index Numbers

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(1)
(1) Economic barometers (a) 100
(2) Cost of living (b) Relative importance
(3) Base years index number (c) Standard of living
(4) Weighted index number (d) Index numbers
(5) Index number (e) Decrease
(f) Specialised average
(g) 50
(h) Multiple average
Ans. (1 – d); (2 – c); (3 – a); (4 – b); (5 – f)

(1) Any year can be taken as a base year.
(2) There are no limitations of index numbers.
(3) Index number is an economic barometer.
(4) Index numbers help in the study of trends.
(5) Index numbers are expressed in percentage form.
(6) Index numbers are approximate measures.
(7) Index numbers are specialised average.
(8) Laspeyre’s index number is the ideal index number.
Ans. (1) False (2) False (3) True (4) True (5) True (6) True (7) True (8) False
Q. 2. (A) Distinguish between the following :

(1) Price Index and Quantity Index.
Price Index Quantity Index
Meaning
This index number is obtained by taking Quantity index number is an index number
the ratio of the total of all commodity prices which measures changes in quantity.
in the current year to the total of all
commodity prices in the base year.
Formula
 P1  P1Q1
P10 = ×100 P10 = ×100
 P0  P0Q0
Calculation
Very easy to calculate. Difficult to calculate.
Effect
Price index number is not influenced by the It is influenced by the quantity.
unit in which price is quoted.
Measures
Changes in price. Changes in quantity.

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(2) Simple Index Number and Weighted Index Number.
Simple Index Number Weighted Index Number
Meaning
Simple index number is a simple average of Weighted index number is a weighed
index numbers for individual goods. average of products of index numbers for
individual goods and
weights assigned
In simple index numbers, all items are Weighted index to each good.
numbers give different
given equal importance. goods, and thus give a true picture of
But, in reality, all items are not of equal changes in price.
importance.
Formula for simple index number is : Formula for weighted index number is :
 P1  P1q0  P1q1
P10 =
 P0
×100 P01 =   100
 P0 q0  P0q1
It is easy to calculate. It is difficult to estimate.
It is not used in practice. It is used in practice.

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Economics (Objectives) PDF

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FYJC

S.N. Chapter Name Pg. Nos.

*(2) In modern times, the ........................ is an economic leader.

(3) Industrial development increases ........................

*(4) Per capita income is ........................ divided by the total population.

(5) Economic development is related to ........................ changes.

*(6) Per Capita Income is the average income .......................

(8) Productivity in ........................ depends upon land and labour productivity.

(9) ........................ refers to process of enlarging people’s choices and well-being.

Economics 1 Economic Growth & Economic Development

Total Pr ivate Consumption

(12) Environment balance is implied in the term ....................

(13) Economic growth means ........................ .

(14) Economic development is a ........................ .

(15) Indian industries got an opportunity to expand during the ........................ .

Economics 2 Economic Growth & Economic Development

(C) State whether the following statements are True or False:

Q. 2. (A) Define or Explain the following concepts:

Economics 3 Economic Growth & Economic Development

*(2) Industrial progress:

*(3) Per Capita Income:

*(4) Structural Transformation:

*(5) Per Capita Consumption:

*(6) Economic development:

*(7) Physical Quality of Life :

Q.2. (B) Give reasons or explain:

*(2) Industrial progress is an important indicator of economic development.

Economics 5 Economic Growth & Economic Development

Q.4. Distinguish between :

Economics 6 Economic Growth & Economic Development

(2) Economic Development and Sustainable Development

Economic Development Sustainable Development

Economics 7 Economic Growth & Economic Development

(4) Agriculture and Industry

Economics 8 Economic Growth & Economic Development

*(2) Life expectancy at birth according to 2011 census is ........................ .

*(3) HDI of India mentioned in HDR 2010 is ........................ .

*(4) India’s HDI rank in 2010 is ........................

(6) The ........................ has developed HDI .

Economics 9 Quality of Human Life

(12) The literacy rate in India is ........................% as per 2011

(B) Match the following Group ‘A’ with Group ‘B’ :

(C) State whether the following statements are True or False:

Q. 2. (A) Define or Explain the following concepts:

(2) Infant Mortality Rate Ans.

(3) Educational attainment

Economics 11 Quality of Human Life

PQLI Per Capita Income

(2) High HD Group and Low HD Group

It is the composite indicator to measure It is the composite measure of economic

Economics 12 Quality of Human Life

*(2) According to 2001 census, India’s population was ........................ crores.

*(3) The year ........................ is described as the ‘Year of Great Divide’.

*(4) India’s population is ........................ largest in the world.

*(5) Family planning programme was introduced in the year ........................ .

(6) Population is the ........................ of a nation.

(8) Every year, India adds the population of ........................ crores.

(9) India accounts for world’s ........................% land area.

(12) The programme of Family Planning in India is ............................ .

(13) The concept of ‘Human Development’ was coined by ............................. .

(15) India has ........................ % of total world area.

(16) As per 2011, sex ratio in India is .........................

(19) The life expectancy as per 2011 census is..........................