Class 10 Economics Chapter 3 Question Answers - Understanding Economic Development

Short Answer Type Questions (3 Marks)
Q1: What is under employment? Explain with an example. [CBSE Sept. 2013]
Ans: (i) It is situation under which people are apparently working but all of them are made to work less than their potential.
(ii) For example to cultivate a field only two workers are required but the whole family of five people is working as they have nowhere else to go for work.
(iii) This type of unemployment is also known as disguised unemployment.

Q2: What are secondary activities? Explain with examples. [CBSE Sept. 2010]
Ans: The occupations which produce finished goods by using the products of primary activities as raw materials are included in secondary activity. Manufacturing of cloth from cotton, sugar from sugarcane and steel from iron ore are important examples of secondary activities.
All these are secondary activities because the final product is to be produced not by nature but has to be made by men and therefore, some process of manufacturing is essential. Let us take an example of cloth. Though the primary product, i.e., cotton is produced by nature, but it cannot be used directly by us in . this form. So to convert it into usable form some process of manufacturing is essential. This can be done in a factory or at home with simple tools.

Q3: What are tertiary activities? Explain with examples. [CBSE Sept. 2010]
Ans: Tertiary activity consists of all service occupations. Transport, communication, trade, health, education and administration are important examples of tertiary activities. These tertiary activities help in the development of the primary and secondary sectors. These activities, by themselves, do not produce a good, but they are an aid or a support for the production process. So these are also known as support services.

Q4: What are primary activities? Explain with examples. [CBSE Sept. 2010]
Ans: Primary activity includes those occupations which are closely related to man’s natural environment. Gathering, hunting, fishing, lumbering, animal rearing, farming and mining are some of the important examples of primary activities. Let us understand the concept with the help of an example-Animal rearing or dairy is a primary activity. In this activity, farmers are dependent on the biological process of the animals, and the availability of fodder, etc. The product, milk, is also a natural product. The most important feature of primary sector is that it forms the base for all other activities.

Q5: What is GDP? Who is responsible for collecting data for the GDP in India? [CBSE Comp. (O) 2008,14]
Ans: GDP is the value of goods and services produced within a country during a given time period.
In India, the mammoth task of measuring the GDP is undertaken by a central government ministry. This ministry, with the help of various government departments of all the Indian States and Union Territories, collects information relating to the total volume of goods and services and their prices, and then estimates the GDP.

Q6: What is disguised unemployment? Explain. [CBSE 2010 (D), Sept. 2010]
Or
How far is it correct to say that disguised unemployment can also be called underemployment? Explain. [CBSE 2012]
Ans: (i) It is a situation in which more workers are working in an activity than required. The people who are actually engaged in such an activity appear to be employed, but are not fully employed.
(ii) For example, if for the cultivation of one hectare land, 10 workers are required, but instead of 10 workers, 15 workers are working. In this case, 5 workers are disguised unemployed. In such cases, even if the surplus workers are removed, the production will not suffer. ,
(iii) This type of unemployment is basically found in agriculture.
(iv) This type of unemployment can also be called underemployment because workers perform below their productivity level.

Q7: What is an organised sector ? Explain [CBSE 2009 (O)]
Ans: (i) An organised sector covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work.
(ii) They are registered by the government and have to follow its rules and regulations which are given in various laws such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shops Act, etc.
(iii) They are called organised because they have some processes and procedures.

Q8: What is an unorganised sector? Explain.
Ans: (i) An Unorganised Sector is a sector which is not registered by the government.
(ii) The unorganised sector is characterised by small and scattered units which are largely outside the control of the government.
(iii) There are rules and regulations, but these are not followed.

Q9: Who are the people that work in an unorganised sector ? Mention any two social values which you have learnt from the working conditions of unorganised sector.
Ans: (i) In the rural areas, the unorganised sector mostly comprises the landless agricultural labourers, small and marginal farmers, sharecroppers and artisans (such as weavers, blacksmiths, carpenters and goldsmiths).
(ii) In the urban areas, the unorganised sector mainly comprises workers in small-scale industry, casual workers in construction, trade and transport, etc. It also consists of those who work as street vendors, head load workers, garment makers, rag pickers, etc.
(iii) Majority of workers from scheduled castes, tribes and backward communities find themselves in the unorganised sector.
Social Values :
(i) Most of the people working in unorganised sector belong to backward communities.
(ii) These workers face social discrimination.

Q10: What are the objectives of NREGA 2005? [CBSE Sept. 2010, 2011, 2012]
Ans: (i) This scheme targets the Scheduled Castes, Scheduled Tribes and the poor women, who suffer from poverty.
(ii) To provide livelihood to the people below the poverty line, this scheme guarantees 100 days of wage employment in a year to every rural household in the country.
(iii) Under this scheme, the Gram Panchayat after proper verification will register households, and issue job cards to registered households. The job card is the legal document that entitles a person to ask for work under the Act and to get work within 15 days of the demand for work, failing which an unemployment allowance would be payable.

Long Answer Type Questions (5 Marks)
Q11: ‘While estimating the national income, only the value of the final goods and services is used.’ Explain with the help of an example.
Ans: While estimating the performance of a sector, only the value of final goods and services is used. This is for avoiding double counting. “The counting of the only the value of final goods and services is used. This is for avoiding double counting. “The counting of the value of a product more than once is called as double counting.” This leads to the overestimation of the value of goods and services produced. Let us understand the concept with the help of an example- A farmer produces one ton of wheat, and sells it for X 100 to a flour mill. As far as the farmer is concerned, the sale of wheat is a final sale for him.
But the purchase of wheat by the flour mill is an intermediate goods. He converts the wheat into flour and sells it to a baker for X 150. The flour mill treats the flour as a final product, but for baker it is an intermediate goods. The baker sells the bread to the shopkeeper for X 200, and the shopkeeper to the consumer for X 250.
Value of output = Farmer (X 100) + Flour mill (X 150) + Baker (X 200) + Shopkeeper {X 250) = X 700 .
So while calculating the national income only the value of the final output; i.e., X 250 should be included not X 700.

Q12: Why is the tertiary sector becoming so important in India? Give at least four reasons. 
[CBSE 2008, 2009 (D) Sept. 2011, 2012]
Or
Why is tertiary sector growing so rapidly in India ? Explain it with four reasons. [CBSE Sept. 2011, 14]
Ans: (i) Basic services: In any country, several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies, etc., are required. These can be considered as basic services. In a developing country, the government has to take the responsibility for the provision of these services.
As more and more people are being employed to provide the basic services to the people, the share of the tertiary sector in the Gross Domestic Product, the GDR is increasing.
(ii) Development of means of transport and communication : The development of agriculture and industry leads to the development of services such as transport, communication, trade, etc. All these are under the tertiary sector.
(iii) More income more services : The per capita income in our country is rising. As the income level rises, people demand more services like tourism, shopping centres, schools, professional training centres, banks, etc.
(iv) New services : With modernisation and globalisation, some new services based on information and communication technology have become important and essential. The production of these services has been rising rapidly.

Q13: Explain any four points of importance of Secondary sector in the Indian economy. [CBSE Comp. 2008 (D)]
Ans: (i) The Secondary sector contributes more than 20% to the GDP of India.
(ii) It provides employment to the people.
(iii) It provides goods to the people like cloth, sugarcane, iron and steel.
(iv) The Secondary sector promotes the development of the Primary and the Tertiary sectors

Q14: Suggest some ways which can be helpful in creating employment in rural areas. [CBSE Sept. 2010, 2011]
Or
What steps should be taken to create more employment? Expain. [CBSE Sept. 2010, 2011]
How to create more employment in rural areas? Explain with examples. [CBSE Sept. 2011,2012]
Ans: (i) Diversification of agriculture: More than 60 per cent of our workers are employed in agriculture. But ‘our farmers are producing only limited crops. There is need to diversify agriculture. Farmers should be encouraged to adopt pisciculture, horticulture, animal rearing, etc., along with cultivation of crops.
(ii) Cheap credit : Most of the farmers depend on informal sources of credit, i.e., moneylenders, relatives, traders, etc., who charge a very high rate of interest. Government should encourage the commercial banks to provide loans to the farmers at cheaper rates.
(iii) Provision of basic facilities : Our rural areas lack the basic facilities like roads, transportation, banking, warehouses, markets, etc. The government should invest some money in these sectors so that the Indian villages can be linked to other markets. This activity can provide productive . employment to not just farmers, but also to others such as those in services like transport or trade.
(iv) Promotion of local industries and other activities : Another way to tackle this problem is to identify, promote and locate industries, especially the cottage and small- scale industries in semi-rural areas, where a large number of people may be employed. It also includes setting up a flour or rice mill to procure and process these and sell in the cities. In villages, near forest areas, honey collection centres can be started where farmers can come and sell wild honey.

Q15: What are the advantages of working in an organised sector? [CBSE Sept. 2011]
Or
What is an organised sector? Describe its working conditions. [CBSE 2009 (D)]
Ans: An organised sector covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. They are registered by the government and have to follow its rules and regulations which are given in various laws such as the Factories Act, the Minimum Wages Act, the Payment of Gratuity Act, Shops Act, etc.
(i) Workers in the organised sector enjoy security of employment.
(ii) They work only for a fixed number of hours. If they work more, they have to be paid overtime by the employer.
(iii) They also get several other benefits from the employers like paid leave, payment during holidays, provident fund, gratuity, etc.
(iv) They also get medical benefits and, under the laws, the factory manager has to ensure facilities like drinking water and a safe working environment.

Q16: Explain the role of government in the public sector. [CBSE Sept. 2013]
Ans: (i) Development of infrastructure : The pace of industrial development cannot be accelerated without the establishment of infrastructure. Its development requires huge capital investment, which cannot be mobilised by the private sector. Moreover, these projects do not promise high profits.
(ii) Development of backward areas: The goal of achieving a reduction in economic inequality between regions becomes easy to reach, if industries are set up in the backward areas. But the profit seeking private industrialists often are not enthusiastic enough to set up industry in the backward regions. The government, therefore, finds it necessary to start industrial production in these areas on its own.
(iii) Basic facilities : There are a large number of activities which are the primary responsibility of the government. The government must spend on these. Providing health, quality education, particularly elementary education, is the duty of the government. India’s size of illiterate population is one of the largest in the world.
(iv) Other problems : There are many other problems like malnourishment, high infant mortality rate, unsafe drinking water, lack of housing facilities, etc., which need special attention. These problems can be solved only with the help of the government.

Q17: Do you agree that agriculture is an activity of the unorganised sector in India. Give any four points. [CBSE Sept. 2010, 2012]
Ans: Yes. Agriculture in India is an activity of the unorganised sector.
(i) Most of the workers working in agriculture are ill paid.
(ii) Agriculture sector faces the problem of under employment.
(iii) Most of the workers working in agriculture are employed only during harvesting and sowing season.
(iv) Most of the farmers are dependent on moneylenders and relatives for their loan requirements.

Q18: How can workers in the unorganised sector be protected ? Explain. [CBSE Sept. 2010, 2011]
Ans: (i) Government can fix the minimum wages rate and working hours.
(ii) Government can provide cheap loans to the self employed people.
(iii) Government can provide cheap and affordable basic services like education, health, food to these workers.
(iv) Government can frame new laws which can provide provision for overtime, paid leave, leave due to sickness, etc.

Q19: Write two groups of people working in unorganised sector who are in need of protection. How can the government protect them ? [CBSE Sept. 2010]
Ans: (i) In the rural areas, the unorganised sector mostly comprises the landless agricultural labourers, small and marginal farmers, sharecroppers and artisans (such as weavers, blacksmiths, carpenters and goldsmiths).
(ii) In the urban areas, the unorganised sector mainly comprises workers in small-scale industry, casual workers in construction, trade and transport, etc. It also consists of those who work as street vendors, head load workers, garment makers, rag pickers, etc.
Role of Government :
(i) Government can provide them cheap loans.
(ii) Government can provide basic facilities like education, food, health at cheap and affordable rate.

Q20: Explain how a shift has taken between sectors in developed countries. [CBSE Sept. 2011]
Ans: (i) At initial stages of development, it was the primary sector which dominated. Most of the people were employed in the primary sector only.
(ii) With the introduction of new methods of farming and manufacturing people started working in other activities i.e. manufacturing. So secondary sector gradually became the most important in total production and employment.
(iii) In the past 100 years the service sector has become the most important in terms of total production and employment.
(iv) The domination of service sector is due to globalisation of the world economy.