Students must start practicing the questions from CBSE Sample Papers for Class 12 Economics with Solutions Set 8 are designed as per the revised syllabus.
CBSE Sample Papers for Class 12 Economics Set 8 with Solutions
Time Allowed: 3 Hours
Maximum Marks: 80
General Instructions:
- This question paper contains two sections
Section A- Macroeconomics
Section B- Indian Economic Development - This paper contains 20 Multiple Choice Questions of 1 Mark each.
- This paper contains 4 Short Answer Questions of 3 Marks each to be answered in 60 to 80 words.
- This paper contains 6 Short Answer Questions of 4 Marks each to be answered in 80 to 100 words.
- This paper contains 4 Long Answer Questions of 6 Marks each to be answered in 100 to 150 words.
Section A
(Macroeconomics)
Question 1.
refers to a situation where all those who are able to work and are willing to work, are getting work. (1)
(a) Under employment
(b) Partial employment
(c) Full employment
(d) Voluntary employment
Answer:
(c) Fuil employment
Question 2.
Choose the correct statement from the options given below (1)
(a) BoP is in surplus when credit side balance is equal to debit side balance
(b) BoP is in surplus when credit side balance is less than debit side balance
(c) BoP is in surplus when credit side balance is more than debit side balance
(d) BoP can never in the situation of surplus.
Answer:
(c) BoP is in surplus when credit side balance is more than debit side balance
Question 3.
Statement I Public goods are those goods and services that are collectively consumed by the public.
Statement II Public goods are excludable and rivalrous in nature. (1)
Alternatives
(a) Botlt the statements are true
(b) Both the statements are false
(c) Statement I is true and Statement II is false
(d) Statement II is true and Statement I is false
Answer:
(c) Public goods are non-excludable and nonrivalrous in nature.
Question 4.
Two friends Mira and Sindhu were discussing the exchange rate systems.
“Under this system, the exchange rates are determined by the market forces of demand and supply.
However, deliberate efforts are made by the competent authority to keep the exchange rates within a specific range”.
The above mentioned statement was given by Sindhu, identify the type of exchange rate system was she talking about.
(a) Fixed exchange rate
(b) Floating exchange rate
(c) Managed floating exchange rate
(d) Managed fixed exchange rate
Answer:
(c) Managed floating exchange rate
Question 5.
Which of the following functions of the central bank is shown below? (1)
(a) Issuer of currency
(b) Banker’s bank
(c) Lender of last resort
(d) None of the above
Answer:
(a) Issuer of currency
Question 6.
If the value of Average Propensity to Save (APS) is 0.2 and national income is ₹ 4,000 crore, then consumption will be (1)
(a) ₹ 4,000 crore
(b) ₹ 3,200 crore
(c) ₹ 3,800 crore
(d) ₹ 2,600 crore
Answer:
(b) APC = 1-APS = 1-0.2 = 0.8
Also,
APC = \(\frac{\text { Consumption }(\mathrm{C})}{\text { Income }(\mathrm{Y})}\) = \(\frac{C}{4,000}\)
= 0.8
∴ C = 4,000 × 0.8 = ₹ 3200 crore
Question 7.
Money was evolved to remove the problems of barter exchange system. Find the correct sequence of evolution of money concepts. (1)
(i) Paper money
(ii) Plastic money
(iii) Metallic money
(iv) Digital money Codes
(a) (iii), (i), (iv), (ii)
(b) (i), (ii), (iii), (iv)
(c) (iii), (iv), (i), (ii)
(d) (iii), (i), (ii), (iv)
Answer:
(d) Evolution of money was started from the use of gold, silver and other metal coins, later on monetary
Question 8.
Suppose that the Balance of Trade (BoT) of a nation, exhibits a surplus of ₹ 20,000 crore.
The import of merchandise of the nation is half of the exports of merchandise to the rest of the world.
The value of exports would be ₹ …… crore. (1)
(a) 30,000
(b) 40,000
(c) 24,000
(d) 35,000
Answer:
(b) BoT = Value of Exports – Value of Imports
According to question, import of goods are half of exports
So, if exports =X, then imports = 1/2 X
Now, BoT Surplus = 20,000
So, 20,000 = X – 1/2 X
1/2 x = 20,000
∴ X = ₹ 40,000 crore
Question 9.
Dividends received from Public Sector Undertakings (PSUs) are a part of the government’s (1)
(a) non-tax revenue receipts
(b) tax receipts
(c) capital receipts
(d) capital expenditure
Answer:
(a) non-tax revenue receipts
Question 10.
Find the missing figures and choose the correct alternative (1)
Alternatives
(a) 50 %, 6,000, 5,000, 58 %
(b) 58 %, 8,000, 5,000, 60 %
(c) 58.33%, 8,000, 5,000, 80%
(d) 60 %, 8,000, 4,000, 90%
Answer:
(c)
Question 11.
From the following data, calculate national income by expenditure method. (3)
Items | ₹ (in crores) |
Interest | 300 |
Rent | 500 |
Government final consumption expenditure | 1,200 |
Private final consumption expenditure | 2,400 |
Profits | 1,280 |
Compensation of employees | 2,000 |
Net factor income to abroad | 60 |
Net indirect taxes | 120 |
Net exports | (-) 80 |
Consumption of fixed capital | 100 |
Net domestic capital formation | 680 |
Or
How will you treat the following while estimating national income of India?
Give reasons for your answer.
(i) Salaries paid to Russians working in Indian embassy in Russia.
(ii) Profits earned by an Indian company from its branches in Singapore.
(iii) Capital gains to Indian residents from sale of shares of a foreign company.
Answer:
Gross Domestic Product at Market Price (GDPM) = Private Final Consumption Expenditure + Government Final Consumption
Expenditure + Gross Domestic Capital Formation + Net Exports
= 2,400 + 1,200 + (680 + 100) + (-80)
= ₹ 4,300 crore
National Income (NNPFC)
= GDPMP – Depreciation – Net Factor Income
to Abroad – Net Indirect Taxes
= 4,300 – 100 – 60 – 120 = ₹ 4,020 crore
Or
(i) Salaries paid to Russians working in Indian embassy in Russia will not be included in estimation of national income of India, as it is factor income from abroad. (1)
(ii) Profits earned by an Indian company from its branches in Singapore will be included while estimating national income of India, as it is a factor income from abroad. (1)
(iii) Capital gains to Indian resıdents from sale of shares of a foreign company will not be included while estimating national income in India, as it is a kind of transfer income. (1)
Question 12.
“An increase in the exchange rate can have significant implications on national income”.
Explain the impact of rise in exchange rate on national income. (3)
Answer:
The national income will increase when there is rise in exchange rate. Domestic currency depreciates when there is a rise in foreign exchange rate. The foreign countries can now purchase more quantity of goods and services from the same amount of foreign currency from the domestic country. As a result, exports will rise and imports will fall.
A rise in the export raises the level of aggregate demand which further raises the level of output and income.
Hence, as the domestic currency depreciates an economy experiences trade surplus. This in turn boosts the national income.
Question 13.
The following excerpt has been taken from the article ‘What is commercial bank’ published by The Economic Times on 22nd September, 2022.
“According to the commercial bank definition, it is a financial institution whose purpose is to accept deposits from customers and lend out loans. Commercial banks are important because they help in creating liquidity in the market.
The basic functions are accepting deposits, lending out loans, transfer of money, and discounting bills of exchange.”
From the given excerpt, it can be understood that one of the important functions for them is to accept deposits. Can you think of any two forms through which commercial banks accept deposits? (4)
Or
“Currency is issued by the central bank, yet we say that commercial banks create money”. Explain. How is this money creation by commercial banks likely to affect the national income?
Answer:
The main function of the commercial banks is to accept deposits from the public. These deposits may be in the form of (any two)
(i) Demand Deposits or Current Account Deposits These deposits are repayable by the banks on demand through the means of a cheque. Banks do not pay any interest on these deposits. Also there are no restrictions on the number of transactions in these deposits. Banks impose service charges on these deposits.
(ii) Savings Deposit A person can open a savings deposit account by depositing a small sum of money. He can withdraw money from his account and make additional deposits at will, but there are certain restrictions on the number of withdrawals. A nominal rate of interest is payable on these deposits.
(iii) Fixed Deposit A fixed deposit is repayable after the expiry of the specified period which may range from 6 months to 5 years. Deposits for more than one year are known as term deposits’. These deposits are not repayable on demand and carry a high rate of interest.
(iv) Recurring Deposits The aim of recurring deposits is to inculcate the habit of regular savings by the people.
A person can deposit a fixed amount, say ₹ 500 per month for a fixed period. The amount together with interest is paid on maturity. The rate of interest is higher than what is offered on savings deposit.
Or
Yes, it is true to say that only central bank has the authority to issue currency, however commercial banks can create credit out of the deposits they have.
The amount of money that commercial banks can create, depends upon two important factors
(i) Initial level of deposits with the commercial banks.
(ii) Legal Reserve Ratio (LRR) which is the sum of CRR and SLR.
The amount of money created will be equal to Money Created = Initial Deposits × \(\frac{1}{LRR}\)
Money created by commercial banks helps to increase the level of economic activity in the country. As the levei of economic activity expands, the level of production, consumption, savings, etc. also increases. This leads to increase in the national income of the country.
Question 14.
Find equilibrium level of Savings (S) and Investments (I), when Income (Y) = ₹ 4,400,
Marginal Propensity to Consume (MPC) = 0.75 and
Autonomous Consumption (C) = ₹ 100.
Do you think that the concept of autonomous consumption is valid in real life? (4)
Answer:
It is given that,
Incoime (Y) = ₹ 4,400
Marginal Propens ity to Consume (MPC or b) =0.75 and Autonomous Consumption (\(\bar{C}\)) = ₹ 100
We know that, Income (Y) = Consumption (C) + Savings (S)
Also,
Consumption
C = \(\bar{C}\) + bY, so,
Y & = \(\bar{C}\) + bY+ S
On substituting the given variables in eq. (ii), we get or
4,400 = 100 + 0.75 × 4,400 + S
4,400 = 3,400 + S
At equilibrium level, Savings = Investments
∴ Investments = ₹ 1,000
i.e., savings and investments at equilibrium level of income = ₹ 1,000.
Yes, I think that the concept of autonomous consumption is valid in real life because every individual needs a minimum consumption level to sustain himself, even if his income is zero.
Question 15.
Classify the following statements as revenue receipts or capital receipts. Give valid reasons in support of your answer.
(i) Financial help from a multinational corporation for victims in a flood affected area.
(ii) Sale of shares of a Public Sector Undertakings (PSUs) to a private company, Y Ltd.
(iii) Dividends paid to the government by the state bank of India.
(iv) Borrowings from International Monetary Fund (IMF).
Answer:
(i) Revenue receipt as neither impacts assets nor liabilities of the government. (1)
(ii) Capital receipt as it reduces assets of the government. (1)
(iii) Revenue receipt as if was no impact on assets or liabilities. (1)
(iv) Capital receipt as it increases liabilities. (1)
Question 16.
(i) From the following data, calculate
(a) gross domestic product at market price (3)
(b) factor income from abroad
S.NO | Items | ₹ (in crores) |
a. | Profits | 500 |
b. | Exports | 40 |
c. | Compensation of employees | 1,500 |
d. | Gross national product at factor cost | 2,800 |
e. | Net current transfers from rest of the world | 90 |
f. | Rent | 300 |
g. | Interest | 400 |
h. | Factor income to abroad | 120 |
i. | Net indirect taxes | 250 |
j. | Net domestic capital formation | 650 |
k. | Gross fixed capital formation | 700 |
l. | Change in stock | 50 |
(ii) Define intermediate goods. (1)
Or
(i) How can externalities be a limitation of using gross domestic product as an index of welfare? (3)
(ii) “Oircular flow of income in a two-sector economy is based on the axiom that one’s expenditure is the other’s income”. Do you agree with the given statement? Support your answer with valid reasons.(3)
Answer:
(i) (a) NDPFC= Compensation of Employees + Rent + Interest + Profits
= 1,500 + 300 + 400 + 500
= ₹ 2,700 crore
GDPMP = NDPFC+ Net Indirect Taxes + Depreciation
= 2,700 + 250 + (750-650)
= 2,700 + 350 = ₹ 3,050 crore
(b) GNPFC = GDPMP – Net Indirect Taxes + (Factor Income from Abroad – Factor Income to
Abroad)
2,800 = 3,050 – 250 +(Factor Income from Abroad -120 )
Factor Income from Abroad = 2,800 – 2,680
= ₹ 120 crore
(ii) intermediate goods refers to those goods and services which are purchased during the year by one production unit from other production unit and completely used up, or resoid, during the same year.
Or
(i) Increase in gross domestic product is due to increase in economic activities like industrialisation and urbanisation. With increased industrialisation, certain problems also increase like pollution of air, water, soil and deforestation. Urbanisation also results in housing problems, increase in road accidents, etc. One the whole, welfare decreases and this decrease in welfare is ignored, while calculation of GDP. So, we can say that extemalities can be a limitation of using GDP as an index of welfare.
(ii) Yes, the given statement is correct. In a twosector economy, the firms produce goods and services and make factors payments to the households. The factor income earned by the households will be used to buy the goods and services which would be equal to the income of firms. The aggregate consumption expenditure by the households in the economy is equal to the aggregate expenditure on goods and services produced by the firms in the economy (income of the producers.)
Question 17.
(i) Assuming that increase in investment is ₹ 1,000 crore and marginal propensity to consume is 0.9 , explain the working of multiplier. (3)
(ii) Explain the relationship between
(a) Average propensity to consume and average propensity to save
(b) Marginal propensity to consume and investment multiplier. (3)
Answer:
(i) Investment multiplier or simply the multiplier is measured as a ratio between change in output/income and change in investment. Symbolically, Imvestment Multiplier (K)
= \(\frac{\text { Change in Income }(\Delta Y)}{\text { Change in Investment }(\Delta l)}\)
Also, there is a direct relationship between investment multiplier and Marginal Propensity to Consume (MPC). Multiplier can also be estimated by using the following formula
K = \(\frac{1}{1-\mathrm{MPC}}\)
So, if MPC = 0.9, then
K = \([\frac{1}{1-0.9}=\frac{1}{0.1}\) = 10
Now, if the investment increases by ₹ 1,000 crore, then increase in income can be computed by substituting the values in the following formula
K = \(\frac{\Delta Y}{\Delta l}\) ⇒ 10 = \(\frac{\Delta Y}{1,000}[\latex]
⇒ Change in Income (Δ Y) = ₹ 10,000 crore So, if investment increases by ₹ 1,000 crore and MPC =0.9, then in such an instance, income will increase by ₹ 10,000 crore.
(ii) (a) Average Propensity to Consume (APC) is the ratio of consumption expenditure to the corresponding level of income whereas Average Propensity to Save (APS) is the ratio of saving to the corresponding level of Income. The relationship between APC and APS is the sum of APC and APS is always equals to 1.
APC + APS = 1
(b) Marginal Propensity to Consume (MPC) is the ratio of change in consumption to change in income. Investment multiplier is the rate of change in income due to change in investment.
The relationship between MPC and multiplier is that the higher the MPC the greater is the value of multiplier.
K = [latex]\frac{1}{1-MPC}\)
Section B
(Indian Economic Development)
Question 18.
Prior to India’s independence, the stagnation in the agricultural sector was mainly caused by ……… .
(a) investment in technology
(b) investment in agriculture facilities
(c) advanced infrastructural facilities
(d) land settlement system
Answer:
(d) land settlement system
Question 19.
National Bank for Agricultural and Rural Development (NABARD) was set up in 1982 as a/the ……. body to coordinate the activities of all institutions involved in the rural financing system. (1)
(a)’ cooperative
(b) apex
(c) micro credit
(d) private credit
Answer:
(b) apex
Question 20.
“It is an economic phenomenon in which an economy grows without maintaining or declining its level of employment. i.e. when the economy expands without creating new jobs, unemployment stays persistently high”.
The situation highlighted in the above statement is an indicator of
(a) jobless growth
(b) casual workforce
(c) unemployment
(d) Both (a) and (b)
Answer:
(a) jobless growth
Question 21.
Which of the following were reasons of slow growth rate in Pakistan?
(i) Reliance on remittance
(ii) Political instability
(iii) Growing dependence on foreign loans
Codes
(a) (i) and (ii)
(b) (ii) and̀(iii)
(c) (i) and (iii)
(d) (i), (ii) and (iii)
Answer:
(a) (i) and (ii)
Question 22.
Statement I TANWA was a project initiated in the late 1980s in Gujarat to train women in latest agricultural techniques and in organic farming.
Statement II Government maintains Minimum Support Price (MSP) policy, in order to safeguard the interest of farmers. (1)
Alternatives
(a) Both the statements are true
(b) Both the statements are false
(c) Statement I is true and Statement II is false
(d) Statement II is true and Statement I is false
Answer:
(d) TANWA was initiated in the state of Tamil Nadu.
Question 23.
Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I. (1)
Column I | Column II |
A. Share of service sector is the highest | (i) In India and Pakistan |
B. Around 45% of the population is engaged in agriculture sector | (ii) In China |
C. The growth rate was lowest in 1980’s | (iii) In China, India and Pakistan |
D. Fertility rate is low | (iv) In India |
Codes
A B C D
(a) (i) (ii) (iii) (iv)
(b) (ii) (iii) (iv) (i)
(c) (iii) (i) (iv) (ii)
(d) (iv) (i) (ii) (iii)
Answer:
(c) (iii) (i) (iv) (ii)
Question 24.
The environment performs four vital functions and the environment is able to perform these functions without any interruption as long as the demand on these functions is within its carrying capacity.
In the given statement ‘carrying capacity’ implies to (1)
(i) The resource extraction is not above the rate of regeneration.
(ii) Wastes generated are beyond the absorptive capacity of the environment.
(iii) The resource extraction is not below the rate of regeneration.
(iv) The resource and the wastes generated are within the assimilating capacity of the environment.
Codes
(a) (i), (ii) and (iv)
(b) (ii) and (iv)
(c) (i) and (iv)
(d) All of the above
Answer:
(c) (i) and (iv)
Question 25.
is/are an important factor(s) of human capital formation as it results in enchanced labour productivity. (1)
(i) Education
(ii) On-the-job training
(iii) Migration
Codes
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i) and (iii)
(d) (i), (ii) and (iii)
Answer:
(d) (i), (ii) and (iii)
Question 26.
Which adverse effect of unemployment is being depicted in the picture below? (1)
(a) Loss of output
(b) Low productivity
(c) Increase in inequalities
(d) Depression
Answer:
(d) Depression
Question 27.
Assertion (A) Brain drain is a serious threat to the process of human capital formation in the country.
Reason (R) People of high calibre such as scientists, engineers, educationists, etc, may decide to migrate.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Answer:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is correct explanation of Assertion (A)
Question 28.
“Small Scale Industries (SSIs) exhibit certain distinct characteristics that differentiate them from large enterprises”. Explain three characteristics of SSIs. (3)
Answer:
The three typical characteristics of SSIs are
(i) Labour Intensive SSIs are labour intensive in character, i.e. they require more units of labour and are best suited for solving the problem of unemployment.
(ii) Less Capital Intensive SSIs are less capital intensive, i.e. they require relatively smaller amount of capital to produce a commodity. In a country like India where capital is scarce, SSI is best suited to bring about industrial development.
(ii) SSIs show Locational Flexibility SSIs can be established in remote areas also, because their need for various resources is limited.
Therefore, they contribute to growth across different regions of the country.
Question 29.
Unemployment in India is one of the most faced challenges by the government. Many programmes are initiated for the same. One of the most successful programmes is NREGA.” In the light of the statement, briefly explain the main features of the National Rural Employment Guarantee Act, 2005.
Or
“Air pollution is a significant contributor to the environmental crisis in India.” Comment.
Answer:
The main features of the National Rural Employment Guarantee Act, 2005 (NREGA) is as follows (any three)
(i) It guarantees the 100 days of wage employment in the financial year to a rural household whose adult members volunteer to do unskilled manual work.
(ii) In this scheme, one-third of the proposed jobs will be reserved for women.
(iii) This scheme initially started in 200 districts. Later on, this scheme will be further extended to 600 districts.
(iv) If the applicant is not employed within 15 days, then he/she will be entitled to a daily unemployment allowance.
Or
Air pollution is a widespread problem in urban areas of India, primarily caused by vehicles and concentrated industries. Vehicular emissions, being ground level sources, have a significant impact on the general population. The number of motor vehicles has drastically increased over the years, with personal transport vehicles contributing heavily to the overall pollution load.
India’s industrialisation has resulted in unintended consequences such as unplanned urbanisation, pollution and increased accident risks.
The Central Pollution Control Board (CPCB) has identified 17 categories of large and medium-scale industries as significant contributors to pollution. These factors collectively contribute to the prevailing environmental challenges in India.
Question 30.
Analyse and compare the two images given below (4)
Answer:
The given two images highlight the women working in rural areas as well as urban areas.
Comparison between these two is as follows
(i) In rural areas, most of the women work in agriculture as compared to females in urban areas where they work more in secondary or. tertiory sector.
(ii) Women participation in rural employment is more as compared to women in urban areas. It is so because earnings of urban workers are generally higher than rural males and so urban families. do not want females to work.
(iii) Apart from this, many activities of the household in which urban women are engaged, are not recognised as productive work, whereas women working on farms in the rural areas are considered to be a part-of the workforce if they are being paid wages in cash or in the form of food grains.
Question 31.
“The traditional handicrafts industries were ruined under the British rule”. Do you agree with this view? Give reasons in support of your answer.
Answer:
Yes, I agree with this statement. The traditional handicrafts industries in India enjoyed worldwide reputation, but the British misrule in India led to the decline of Indian handicraft industry. The Britishers adopted the following policies to systematically destroy the handicraft industry (any four)
(i) Discriminatory Tariff Policy of the State The Britishers followed a discriminatory tariff policy by allowing tariff free exports of raw material from India (to provide for the requirements of their industries in Britain) and tariff free import of British industrial products (to promote British goods in India), but placed a heavy duty on the export of handicraft products. So, Indian handicraft products started loosing their foreign as well as domestic markets.
(ii) Competition with Machine-made Products Machine-made products from Britain were cheap and better in quality than the handicraft products. This competition forced many handicraftsmen to shut down their business.
(iii) Introduction of Railways in India The Britishers introduced railways in India to expand the market of its low priced industrial products.
Consequently, the demand of high-priced handicraft products started to fall, thus leading to the downfall of handicraft industry.
(iv) Disappearance of Princely Courts Prior to the British rule, Rajas, Nawabs and Shahenshahs ,ruled the different parts of our country and they were great patrons of the handicrafts. But, as the British Raj spread its tentacles, these princely courts declined and so did their patronage. This ultimately led to the decline of the handicrafts.
(v) New Patterns of Demand As the British rule progressed in India, a new class emerged, which was keen to follow the British lifestyle. This changed the pattern of demand in favour of the British goods.
Question 32.
State the following statement as true or false with valid explanation
(i) ‘Atmanirbhar Bharat’ had been at the roots of the Indian planning process in the form of ‘self reliance’ as an objective of the planning process.
(ii) Those Public Sector Undertakings (PSUs) which are making profits should be privatised.
Or
“India has certain advantages which makes it a favourite outsourcing destination”. What are these advantages? (4)
Answer:
(i) The given statement is correct. In the early postindependence period, the aim of the government’s policy was to reduce the dependence on the foreign countries for goods, services, technology and capital. The first seven five year plans gave importance to self-reliance which stressed on the use of domestic resources to avoid foreign interference, as it was feared that the dependence on the imported food supplies, foreign technology and foreign capital may increase foreign interference in the policies of our country.
Similarly, the main thrust of the ‘Atmanirbhar Bharat’ is also to make India an economy that is self-reliant and self-sufficient. (2)
(ii) No, I do not agree with this view. Even though disinvestment would increase the revenue of the government, the profit-making industries should be retained in the public sector because the profits of these undertakings add to the revenues of the government and can be used to develop other PSUs and the infrastructure of the company. Also, if the assets of the profit-making industries are undervalued, it will lead to a substantial loss to the government, if sold to the private sector. Also, the government should retain the strategic profit making industries to avoid emergence of any monopoly in the private sector. (2)
Or
Most multinational corporations and even small companies are outsourcing their services to India because of the following advantages
(i) Availability of Cheap Labour India is a country with a large population and thus, abundant supply of labour. Due to this reason, labour in India is available at low wage rates. This helps foreign companies in reducing cost of operation by outsourcing their business processes to India.
(ii) Skill and Accuracy India has a wide pool of talent in the form of educated and trained youth who have the required skill and can work with accuracy in the business processes such as accounting, record keeping. IT consultancy, etc.
(ii) Continuity and Risk Management Periods of high employee turnover add uncertainty to the operations of a company. Outsourcing will provide a level of continuity to the company while reducing the risk that a sub-standard level of operation would bring to the company.
(iv) Reduced Overhead Overhead costs of performing back office functions are extremely high but due to the outsourcing these costs can be reduced.
Question 33.
(i) “The government plays a significant role in generating employment opportunities in the economy”. Explain the role of the government in generating employment opportunities?
(ii) Is environmental crisis a recent phenomenon? If so, why?
Or
(i) You are residing in a village. If you are asked to advice the village panchayat, what kinds of activities would you suggest for the improvement of your village which would also generate employment?
(ii) “Economic development and sustainable development are two terms often used interchangeably, though they are not same”, In the light of the statement, differentiate between economic development and sustainable development.
Answer:
(i) The government generates employment through direct and indirect efforts.
The government makes direct efforts at employing people in various departments for administrative purposes.
It runs various enterprises and when they result in increased output of goods and services, they lead to further increase in employment. The various private enterprises that are linked to the government enterprises might also benefit from increased output of these enterprises and thus, increase their output and employment also. This way government also indirectly generates employment.
(ii) Yes, environmental crisis is a recent phenomenon. In the past, environment was able to perform its functions without any interruption till the resource extraction was not above the rate of regeneration of the resource and the wastes generated were within the assimilating capacity of the environment.
But today, environment fails to perform its vital function of life sustenance resulting in an environmental crisis.
The rising population of the developing countries and the affluent consumption and production standards of the developed world have placed a huge stress on the environment.
Many resources have become extinct and the wastes generated are beyond the absorptive capacity of the environment. As a result. we are today at the threshold of environmental crisis.
Or
(i) I would suggest the following activities to generate employment in village (any three)
(a) There should be multiple cropping in the village.
(b) Other activities related to agriculture such as plantation, horticulture, dairying, animal husbandry should be encouraged.
(c) Cottage industries should be encouraged.
(d) More and more facilities of education, health services, roads, etc. should be created in the village.
(e) Information technology sector should be encouraged.
(ii) The following are the points of difference between economic and sustainable development (any three)
Basis | Economic Development | Sustainable Development |
Meaning | Economic development refers to the long-term increase in real per capita income and economic welfare. | In sustainable development, besides the increase in real per capita income, the welfare of the present and future generation is taken into consideration. |
Use of Resources | It does not account for the exploitation of natural resources. | Sustainable development emphasises on rational utilisation of natural resources. |
Use | It is generally used in the context of underveloped economies. | It is used for developed, developing as well as underdeveloped economies. |
Focus | It lays special stress on the structural, technical and institutional changes in the economy. | It does not lay such stress on the structural, technical and institutional changes in the economy. |
Question 34.
Read the following text carefully and answer the given questions on the basis of the same and common understanding.
Comparative development of India and its neighbours is an important knowledge to possess as an Indian citizen.
As a rational citizen of a country, it is crucial to have a deep understanding of the developments in your country. In fact, it is also very important to learn about the developmental processes of your neighbouring countries.
Not only citizens but countries are also eager to understand the developmental system of their neighbours.
This understanding enables comprehension of strengths and weaknesses of yours as well as the neighbouring countries. Due to the process of globalisation, it is essential for every nation to compete with developed countries. Hence, it is important to study the comparative development of India and its neighbours.
The Chinese reform process began more strongly and comprehensively during the 1980s. At this time, India was in the mid-stream of a rather slow growth process. Although the two countries (Pakistan and India) started together, Pakistan has seen a better result in certain areas. However, India is better placed than Pakistan in the area of skilled manpower and research and development institutions.
It is common to find developmental strategies of a country as a model to others for lessons and guidance for their own development. It is particularly evident after the introduction of the reform process in different parts of the world. In order to learn from economic performance of our neighbouring countries, it is necessary to have an understanding of the roots of their successes and failures. It is also necessary to distinguish between and contrast, the different phases of their strategies.
(i) Compare and contrast the development of India, China and Pakistan with respect to some salient human development indicators. (4)
(ii) Mention the areas in which India has an edge over Pakistan.
Answer:
(i) The development of India, China and Pakistan with respect to some salient human development indicators can be assessed and compared with the help of the following points (any four)
(a) China is ahead of India and Pakistan in human development indicators. China has better ranking in terms of income indicator such as Gross Domestic Product (GDP) per capita, or proportion of population below poverty line or health indicators such as mortality rates, access to sanitation, literacy, life expectancy or malnourishment.
(b) India is ahead of Pakistan in reducing proportion of people below the poverty line as per Human Development Report, 2019.
(c) India’s performance in education, sanitation and access to water is better than Pakistan.
(d) Maternal mortality is very high in India and Pakistan as compared to China. In China, for one lakh births, only 29 women die whereas in India and Pakistan, more than 130 women die.
(e) All the three countries provide improved water sources for most of their population.
(f) Considering the international poverty rate of 2 a day, India has the largest share of poor among the three countries in absolute terms.
(ii) In the area of skilled manpower and research and development institutions, India is better placed than Pakistan.
Indian scientists excel in the areas of defence technology, space research, electronics and avionics, genetics, tele communications etc.
The number of PhD produced by India in science and engineering every year (about 5000) is higher than the entire stock of PhDs in Pakistan. Issues of health facilities in general and infant mortality in particular are better addressed in India.