Test: Class 11 Economy NCERT Based - 1


20 Questions MCQ Test Indian Economy for UPSC CSE | Test: Class 11 Economy NCERT Based - 1


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QUESTION: 1

Consider the following statements about the Muslin.

1. Muslin is a type of cotton textile which had its origin in Bengal, particularly, places in and around Dhaka

2. The poorest variety of muslin was called malmal and finest variety of Muslin was called Dacca Muslin

3. Sometimes, foreign travellers also used to refer to it as malmal shahi or malmal khas

Which of the statements is/are correct?

Solution:
  • Muslin is a type of cotton textile which had its origin in Bengal, particularly, places in and around Dhaka (spelled during the pre-independence period as Dacca), now the capital city of Bangladesh.

  • ‘Dacca Muslin’ had gained worldwide fame as an exquisite type of cotton textile. The finest variety of muslin was called malmal.

  • Sometimes, foreign travellers also used to refer to it as malmal shahi or malmal khas implying that it was worn by, or fit for, the royalty.

QUESTION: 2

Assertion: Agricultural productivity became low though, in absolute terms, the sector experienced some growth

Reason: Aggregate area under cultivation expanded

Select the correct code:

Solution:
  • Agricultural productivity became low though, in absolute terms, the sector experienced some growth due to the expansion of the aggregate area under cultivation.

  • This stagnation in the agricultural sector was caused mainly because of the various systems of land settlement that were introduced by the colonial government. Particularly, under the zamindari system which was implemented in the then Bengal Presidency comprising parts of India’s present-day eastern states, the profit accruing out of the agriculture sector went to the zamindars instead of the cultivators.

  • However, a considerable number of zamindars, and not just the colonial government, did nothing to improve the condition of agriculture.

QUESTION: 3

Consider the following statements.

1. Zamindars were immune from getting the punishment even if they fail to deposit the revenue in the fixed time

2. Interest of the zamindars was only to collect rent regardless of the economic condition of the cultivators

Which of the statements is/are correct?

Solution:
  • Interest of the zamindars was only to collect rent regardless of the economic condition of the cultivators; this caused immense misery and social tension among the latter.

  • To a very great extent, the terms of the revenue settlement were also responsible for the zamindars adopting such an attitude; dates for depositing specified sums of revenue were fixed, failing which the zamindars were to lose their rights.

QUESTION: 4

Assertion: During the Colonial Era in India, there was some evidence of a relatively higher yield of cash crops in certain areas of the country

Reason: There was negligible use of fertilisers in agriculture

Select the correct code:

Solution:
  • Low levels of technology, lack of irrigation facilities and negligible use of fertilisers, all added up to aggravate the plight of the farmers and contributed to the dismal level of agricultural productivity.

  • There was, of course, some evidence of a relatively higher yield of cash crops in certain areas of the country due to commercialisation of agriculture.

QUESTION: 5

Consider the following statements.

1. Unlike in the case of agriculture, India developed a sound industrial base under the colonial rule in manufacturing sector

2. Handicraft industries declined but corresponding modern industrial base in other sectors was allowed to expand

Which of the statements is/are correct?

Solution:
  • As in the case of agriculture, so also in manufacturing, India could not develop a sound industrial base under colonial rule. Even as the country’s world famous handicraft industries declined, no corresponding modern industrial base was allowed to come up to take pride of place so long enjoyed by the former.

  • The primary motive of the colonial government behind this policy of systematically industrialisation India was two-fold. The intention was, first, to reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain and, second, to turn India into a sprawling market for the finished products of those industries so that their continued expansion could be ensured to the maximum advantage of their home country - Britain.

  • In the unfolding economic scenario, the decline of the indigenous handicraft industries created not only massive unemployment in India but also a new demand in the Indian consumer market, which was now deprived of the supply of locally made goods.

QUESTION: 6

Consider the following statements.

1. During the second half of the nineteenth century, modern industry began to take root in India very aggressively

2. Initially, this development was confined to the setting up of cotton and jute textile mills in eastern and western parts of the country respectively

Which of the statements is/are correct?

Solution:
  • During the second half of the nineteenth century, modern industry began to take root in India but its progress remained very slow. Initially, this development was confined to the setting up of cotton and jute textile mills.

  • The cotton textile mills, mainly dominated by Indians, were located in the western parts of the country, namely, Maharashtra and Gujarat, while the jute mills dominated by the foreigners were mainly concentrated in Bengal.

  • Subsequently, the iron and steel industries began coming up in the beginning of the twentieth century. The Tata Iron and Steel Company (TISCO) was incorporated in 1907. A few other industries in the fields of sugar, cement, paper etc. came up after the Second World War.

QUESTION: 7

Consider the following statements regarding the new industrial sector developed by the British rule in India.

1. The growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP) remained very small.

2. Another significant drawback of the new industrial sector was the very limited area of operation of the public sector

3. This sector remained confined only to the railways, power generation, communications, ports and some other departmental undertakings

Which of the statements is/are correct?

Solution:
  • There was hardly any capital goods industry to help promote further industrialisation in India. Capital goods industry means industries which can produce machine tools which are, in turn, used for producing articles for current consumption.

  • The establishment of a few manufacturing units here and Furthermore, the growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP) remained very small.

  • Another significant drawback of the new industrial sector was the very limited area of operation of the public sector. This sector remained confined only to the railways, power generation, communications, ports and some other departmental undertakings.

QUESTION: 8

Consider the following statements regarding the consequences of the British rule in India.

1. India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute etc.

2. India became an importer of finished consumer goods like cotton, silk and woolen clothes and capital goods.

Which of the statements is/are correct?

Solution:
  • India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute etc. and an importer of finished consumer goods like cotton, silk and woollen clothes and capital goods like light machinery produced in the factories of Britain.

  • For all practical purposes, Britain maintained a monopoly control over India’s exports and imports. As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia (Iran).

  • The opening of the Suez Canal further intensified British control over India’s foreign trade. The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus. But this surplus came at a huge cost to the country’s economy.

QUESTION: 9

Consider the following statements.

1. The important characteristics of India’s foreign trade throughout the colonial period was the generation of a large export surplus

2. The export surplus resulted in flow of gold or silver into India

Which of the statements is/are correct?

Solution:
  • The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus.

  • But this surplus came at a huge cost to the country’s economy. Several essential commodities—food grains, clothes, kerosene etc. — were scarcely available in the domestic market.

  • Furthermore, this export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war, again fought by the British government, and the import of invisible items, all of which led to the drain of Indian wealth.

QUESTION: 10

Consider the following statements about the Suez Canal.

1. It is an artificial waterway running from north to south across the Isthmus of Suez in north-eastern Egypt

2. It connects Port Said on the Mediterranean Sea with the Gulf of Suez, an arm of the Red Sea

Which of the statements is/are correct?

Solution:
  • Suez Canal is an artificial waterway running from north to south across the Isthmus of Suez in north-eastern Egypt.

  • It connects Port Said on the Mediterranean Sea with the Gulf of Suez, an arm of the Red Sea. The canal provides a direct trade route for ships operating between European or American ports and ports located in South Asia, East Africa and Oceania by doing away with the need to sail around Africa.

  • Strategically and economically, it is one of the most important waterways in the world. Its opening in 1869 reduced the cost of transportation and made access to the Indian market easier.

QUESTION: 11

The railways affected the structure of the Indian economy in many important ways. Consider the following statements regarding it.

1. It enabled people to undertake long distance travel and thereby break geographical and cultural barriers

2. It fostered commercialisation of Indian agriculture which increased the self-sufficiency of the village economies in India

Which of the statements is/are correct?

Solution:
  • The British introduced the railways in India in 1850 and it is considered as one of their most important contributions.

  • The railways affected the structure of the Indian economy in two important ways. On the one hand it enabled people to undertake long distance travel and thereby break geographical and cultural barriers while, on the other hand, it fostered commercialisation of Indian agriculture which adversely affected the self-sufficiency of the village economies in India.

  • The volume of India’s exports undoubtedly expanded but its benefits rarely accrued to the Indian people.

QUESTION: 12

Consider the following statements about Colonial India

1. The introduction of the expensive system of electric telegraph in India, served the purpose of maintaining law and order

2. The postal services despite serving a useful public purpose, remained all through inadequate 3. The inland waterways, at times, proved uneconomical

Which of the statements is/are correct?

Solution:
  • Along with the development of roads and railways, the colonial dispensation also took measures for developing the inland trade and sea lanes. However, these measures were far from satisfactory.

  • The inland waterways, at times, also proved uneconomical as in the case of the Coast Canal on the Orissa coast.

  • Though the canal was built at a huge cost to the government exchequer, yet, it failed to compete with the railways, which soon traversed the region running parallel to the canal, and had to be ultimately abandoned.

  • The introduction of the expensive system of electric telegraph in India, similarly, served the purpose of maintaining law and order. The postal services, on the other hand, despite serving a useful public purpose, remained all through inadequate.

QUESTION: 13

Consider the following statements.

1. Roads constructed in India prior to the advent of the British rule were not fit for modern transport

2. The roads that were built primarily served the purposes of mobilising the army within India and drawing out raw materials from the countryside to the nearest railway station

3. There always remained an acute shortage of all-weather roads to reach out to the rural areas during the rainy season

Which of the statements is/are correct?

Solution:
  • However, the real motive behind this development was not to provide basic amenities to the people but to subserve various colonial interests.

  • Roads constructed in India prior to the advent of the British rule were not fit for modern transport.

  • The roads that were built primarily served the purposes of mobilising the army within India and drawing out raw materials from the countryside to the nearest railway station or the port to send these to far away England or other lucrative foreign destinations.

  • There always remained an acute shortage of all-weather roads to reach out to the rural areas during the rainy season. Naturally, therefore, people mostly living in these areas suffered grievously during natural calamities and famines.

QUESTION: 14

Arrange the following sectors according to their share in the economy during the Colonial rule in India?

1. Agriculture

2. Manufacturing

3. Services

Choose from the following options.

Solution:
  • During the colonial period, the occupational structure of India, i.e., distribution of working persons across different industries and sectors, showed little sign of change.

  • The agricultural sector accounted for the largest share of workforce, which usually remained at a high of 70-75 per cent while the manufacturing and the services sectors accounted for only 10 and 15-20 per cent respectively.

  • Another striking aspect was the growing regional variation. Parts of the then Madras Presidency (comprising areas of the present-day states of Tamil Nadu, Andhra Pradesh, Kerala and Karnataka), Bombay and Bengal witnessed a decline in the dependence of the workforce on the agricultural sector with a commensurate increase in the manufacturing and the services sectors.

  • However, there had been an increase in the share of workforce in agriculture during the same time in states such as Orissa, Rajasthan and Punjab.

QUESTION: 15

Consider the following statements.

1. In a capitalist society the goods produced are distributed among people on the basis of what people need

2. In a socialist society It is assumed that the government knows what is good for the people of the country and so the desires of individual consumers are given much importance

3. In a mixed economy, the market will provide whatever goods and services it can produce well

Which of the statements is/are correct?

Solution:
  • In a capitalist society the goods produced are distributed among people not on the basis of what people need but on the basis of Purchasing Power—the ability to buy goods and services. That is, one has to have the money in the pocket to buy it.

  • Low cost housing for the poor is much needed but will not count as demand in the market sense because the poor do not have the purchasing power to back the demand. As a result this commodity will not be produced and supplied as per market forces.

  • In a socialist society the government decides what goods are to be produced in accordance with the needs of society. It is assumed that the government knows what is good for the people of the country and so the desires of individual consumers are not given much importance.

  • Most economies are mixed economies, i.e. the government and the market together answer the three questions of what to produce, how to produce and how to distribute what is produced. In a mixed economy, the market will provide whatever goods and services it can produce well, and the government will provide essential goods and services which the market fails to do.

 

 

 

QUESTION: 16

Consider the following statements about the concept of growth.

1. It refers to increase in the country’s capacity to produce the output of goods and services within the country

2. A good indicator of economic growth, in the language of economics, is steady increase in the Gross Domestic Product (GDP)

Which of the statements is/are correct?

Solution:
  • Growth: It refers to an increase in the country’s capacity to produce the output of goods and services within the country. It implies either a larger stock of productive capital, or a larger size of supporting services like transport and banking, or an increase in the efficiency of productive capital and services.

  • A good indicator of economic growth, in the language of economics, is steady increase in the Gross Domestic Product (GDP). The GDP is the market value of all the goods and services produced in the country during a year.

  • You can think of the GDP as a cake and growth is an increase in the size of the cake. If the cake is larger, more people can enjoy it. It is necessary to produce more goods and services if the people of India are to enjoy (in the words of the First Five Year Plan) a more rich and varied life.

QUESTION: 17

Consider the following statements about the concept of modernisation.

1. Adoption of new technology is called modernisation

2. Modernisation does not refer only to the use of new technology but also to changes in social outlook

Which of the statements is/are correct?

Solution:
  • Modernisation: To increase the production of goods and services the producers have to adopt new technology. For example, a farmer can increase the output on the farm by using new seed varieties instead of using the old ones.

  • Similarly, a factory can increase output by using a new type of machine. Adoption of new technology is called modernisation. However, modernisation does not refer only to the use of new technology but also to changes in social outlook such as the recognition that women should have the same rights as men.

  • In a traditional society, women are supposed to remain at home while men work. A modern society makes use of the talents of women in the workplace — in banks, factories, schools etc. — and such a society in most occasions is also prosperous.

QUESTION: 18

Assertion: The first seven five year plans gave importance to self-reliance which means avoiding imports of those goods which could be produced in India itself

Reason: It was feared that dependence on imported food supplies, foreign technology and foreign capital may make India’s sovereignty vulnerable to foreign interference in our policies.

Select the correct code:

Solution:
  • Self-reliance: A nation can promote economic growth and modernisation by using its own resources or by using resources imported from other nations. The first seven five year plans gave importance to self-reliance which means avoiding imports of those goods which could be produced in India itself.

  • This policy was considered a necessity in order to reduce our dependence on foreign countries, especially for food. It is understandable that people who were recently freed from foreign domination should give importance to self-reliance.

  • Further, it was feared that dependence on imported food supplies, foreign technology and foreign capital may make India’s sovereignty vulnerable to foreign interference in our policies.

QUESTION: 19

Consider the following statements about the concept of equity.

1. It is important to ensure that the benefits of economic prosperity reach the poor sections

2. Now growth, modernization and self-reliance, by themselves, may not improve the kind of life which people are living

Which of the statements is/are correct?

Solution:
  • Equity: Now growth, modernisation and self-reliance, by themselves, may not improve the kind of life which people are living.

  • A country can have high growth, the most modern technology developed in the country itself, and also have most of its people living in poverty. It is important to ensure that the benefits of economic prosperity reach the poor sections as well instead of being enjoyed only by the rich.

  • So, in addition to growth, modernisation and self-reliance, equity is also important. Every Indian should be able to meet his or her basic needs such as food, a decent house, education and health care and inequality in the distribution of wealth should be reduced.

QUESTION: 20

Consider the following statements about the statistician, Prasanta Chandra Mahalanobis.

1. He was educated at the Presidency College in Calcutta and at Cambridge University in England.

2. He was made a Fellow of Britain’s Royal Society

3. He established the Indian Statistical Institute (ISI) in Calcutta

Which of the statements is/are correct?

Solution: All are correct statements.