2016
ECONOMICS
Full Marks: 100
Time: Three hours
The figures in the margin indicate full marks for the questions.
PART A: STATISTICS FOR ECONOMICS
1. Answer the following questions:
a) Statistics deals with only quantitative data. (True/False) 1
Ans: True
b) What do you mean by statistical enquiry? 1
Ans: Statistical enquiry' refers to some investigation wherein relevant information is collected, analysed and interpreted by the application of statistical methods.
c) What is primary data? 1
Ans: Data which are collected for the first time for a specific purpose are known as Primary data. For example: Population census, National income collected by government, Textile Bulletin (Monthly), Reserve bank of India Bulletin (Monthly) etc.
d) Find out mode from the following data: 1
2, 3, 5, 2, 2, 7, 5, 2
Ans: Since 2 has highest number of observations, therefore required mode is 2.
e) What do you mean by zero correlation? 1
Ans: If change in one variable does not other, than there is no or zero correlation.
f) What is a project? 1
Ans: A project can be defined as a well thought out plan of action made to achieve specific objective.
2. Write two importance of the study of statistics in economics. 2
Ans: Importance of Statistics in Economics:
- Statistics helps in making economic laws like law of demand and concept of elasticity.
- It helps in understanding and solving economic problem.
Or
What do you mean by economic and non-economic activities? 2
Ans: Economic activities are those that are concerned with production, exchange and distribution of goods and rendering of services to earn money.
Non-economic activities are those activities, which are pursued by human beings because of social, psychological and religions sentiments. For example: working in own garden, cooking for family members.
3. State two advantages of classification of data. 2
Ans: a) A well-planned data classification system makes essential data easy to find and retrieve. b) This can be of particular importance for risk management, legal discovery, and compliance.
4. Mention two sources of secondary data. 2
Ans: Sources of Secondary Data:
(a) Official publication by the central and state governments, district Boards.
(b) Publication by research institutions, Universities etc.
(c) Economic Journals.
(d) Commercial Journals.
(e) Reports of Committees, commissions.
5. What is arithmetic mean? Write its one advantage. 2
Ans: Arithmetic Mean: - It is a value obtained by adding together all the items and by dividing the total by the number of items. It is also called average. It is the most popular and widely used measure for representing the entire data by one value.
Merits of A.M.: It is simple to understand and easy to calculate.
6. What is range? Calculation range from the following data: 46 57 28 65 85 61 58 2
Ans: In statistics, the range of a set of data is the difference between the largest and smallest values.
Range = H – L = 85 – 28 = 57
7. What do you mean by consumer price index number? 2
Ans: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
8. State four characteristics of a good average. 4
Ans: The following are the important properties which a good average should satisfy:
a) It should be easy to understand.
b) It should be simple to compute.
c) It should be based on all the items.
d) It should not be affected by extreme values.
e) It should be rigidly defined.
f) It should be capable of further algebraic treatment.
9. Find out mean deviation from the following data: 25 20 18 15 23 17 24 2+2=4
Ans: Calculation of MD
 |  | |
25 20 18 15 23 17 24 | 4.71 0.29 2.29 5.29 2.71 3.29 3.71 | Mean  M.D.  |
Or
State two merits and two demerits of standard deviation.
Ans: Merits of SD:
- It is based on each and every item of the data and it is rigidly defined.
- It is capable of further algebraic treatment. Combined SD of two or more groups can be calculated.
Demerits of SD:
- It is not easy to calculate and to understand.
- It gives more weight to extreme items and less to those which are nearer to mean.
10. What do you mean by positive and negative correlation? Write two characteristics of co-efficient of correlation. 2+2=4
Ans: Positive Correlation: If increase (or decrease) in one variable corresponds to an increase (or decrease) in the other, the correlation is said to be positive correlation.
Negative Correlation: - If increase (or decrease) in one variable corresponds to a decrease (or increase) in the other, the correlation is said to be positive correlation.
AHSEC CLASS 11 CHAPTER-WISE NOTES
Part A: Introductory Micro Economics
Introduction to Micro Economics
Consumer Behaviour and Demand
Producer Behaviour and Supply
Forms of Market and Price Determination:
Simple Applications of Tools of Demand & Supply
Part B: Statistics for Economics
Collection, Organisation and Presentation of Data
Statistical Tools & Interpretation
11. State two uses and two limitations of index number. 2+2=4
Ans: Advantages of index number
1. Measurement of change in the price level or the value of money. 2. Index number helps to ascertain the living standards of people. 3. Price index numbers serve as a useful guide to the business community in planning. 4. Index of exports and imports provides useful information regarding foreign trade.
Limitation of index number
1. Not completely true: - Index number not fully true. 2. International comparison is not possible 3. Limited use: - Index numbers are prepared with certain specific objective.
Or
Calculate price relatives from the following data taking 2010 as the base year:
Year: | 2010 | 2011 | 2012 | 2013 |
Price: | 70 | 85 | 35 | 20 |
Ans: Calculation of Price relatives
Year | Price | Index Number taking 2010 as the base year |
2010 2011 2012 2013 | 70 85 35 20 |     |
12. Mention the steps in preparing a project.
Ans: Steps for developing a project:
1. Objective: The required data has to be collected with a clear objective of the project.
2. Population: To develop a project, the target population should be determined.
3. Collection of data: Data regarding project report should be collected using primary or secondary data. Secondary data must be used with great care.
4. Organization and presentation of data: Report can be presented using statistical tables, graphs or diagrams.
5. Analysis of data: Statistical measures like measures of central tendency and dispersion can be used for analyzing the data.
6. Interpretation & Conclusion: Data collected and analyzed should be correctly interpreted.
7. Consumer Awareness: It means product awareness among the consumers.
13. State an advantage of a diagram. Point out a difference between diagram and graph. Expenditure of a family in different heads in a year is as follows: 1+1+4=6
Heads of Expenditure | Expenditure (in Rs.) |
Food | 200 |
Clothes | 120 |
House rent | 150 |
Electricity | 30 |
Miscellaneous | 100 |
Represent the above data with the help of a pie-diagram.
Ans: Uses of Diagrams: (i) Information presented though diagrams and graphs can be understood easily just in a bird’s eye view.
Difference Between Diagrams And Graphs
- A graph needs a graph paper but a diagram can be drawn on a plain paper.
Or
What is sampling? Discuss sampling and non-sampling errors.
Ans: Sampling: Sampling refers to the statistical process of selecting and studying the characteristics of a relatively small number of items from a relatively large population of such items, to draw statistically valid inferences about the characteristics about the entire population.
Sampling Error: It is the difference between sample value and actual value of a characteristic of a population.
Non-sampling errors: Errors that accurate the stage of collecting data.
14. Calculate quartile deviation from the following data: 1+5=6
Roll No.: | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
Marks: | 20 | 28 | 40 | 12 | 30 | 15 | 50 |
Calculation of Q.D.:-
| |
12 15 20 28 30 40 50 |  |
Or
What is index number? Discuss the steps in constructing index number.
Ans: Index number is an indicator of changes in prices and quantities. It is a specialized average designed to measure the change in a group of related variables over a period of time. It is also an indicator of inflationary or deflationary tendencies.
Following are the main Steps or Problems in the construction of index number
1. Purpose of index number.
2. Selection of base year.
3. Selection of goods and services.
4. Selection of price
5. Choice of average (simple or geometric average).
6) Selection of appropriate weights.
7) Selection of appropriate formula (Fisher’s or Laspeyre’s).
PART B: INDIAN ECONOMIC DEVELOPMENT
15. (a) Define Planning. 1
Ans: It means utilization of country’s resources into different development activities in accordance with the national priorities.
(b) What was the main source of livelihood in India at the pre-independence period? 1
Ans: Agriculture
(c) What do you mean by seasonal unemployment? 1
Ans: Seasonal Unemployment-work in agriculture is seasonal, no employment opportunity for remaining months.
(d) Name a financial institution that supplies industrial finance in India. 1
Ans: IFCI
(e) What is environment? 1
Ans: Environment is defined as the total planetary inheritance and the totality of all resources.
(f) When was the First Five year plan commenced in India? 1
Ans: 1951 - 1956
16. What is mixed economy? Do you think that it is fruitful to an under-developed country? 2
Ans: It is a golden mixture of capitalism and socialism. Under this system there is freedom of economic activities and government interferences for the social welfare. Hence it is a blend of both the economies.
It is fruitful to an under-developed country like India.
17. Name two employment generation programmes adopted by the Government of India. 2
Ans: Poverty alleviation programmers (PAP) in India:
- Prime minister’s Rozgar Yojana (PMRY)
- Swarna Jayanthi Shahri Rozgar Yojana (SJSRY)
- Swarna Jayanthi Gram Swarozgar Yojana (SGSY)
- Sampoorna Grameen Rozgar Yojana (SGRY)
- National Rural Employment Guarantee Act 2005
18. Give two arguments for new economic reforms. 2
Ans: a) Privatisation and b) Liberalisation
19. Give two arguments against privatisation. 2
Ans: Disadvantages of Privatization
- Privatization would create a private monopoly.
- Government loses out on potential dividend
20. Write two causes of rapid growth of population in India. 2
Ans: a) Lack of Education b) Poverty
21. Give two examples of non-renewable resource. 2
Ans: These are those resources which get exhausted with extraction and use such as coal, gas etc.
22. State four problems of human capital formation in India. 4
Ans: Reasons for poor Human Capital formations are:
1) Insufficient Resources: The resources allocated to the formation of human capital have been much less than the resources required for meeting the educational & health needs of the country.
2) Serious Inefficiencies: There are a lot of wastages of society’s resources as capabilities of educated people are either not made use of.
3) High Growth of population: The continuous rise in population has adversely affected the quality of human capital.
4) Lack of proper manpower planning: There is an imbalance between the demands for the supply of human resources of various categories, especially in case of highly skilled personnel. The absence of such balancing has resulted in the wastage of resources.
Or
Discuss the role of education in economic development of a community.
Ans: There has been considered growth in the field of Education. The number of schools increased from 230.7 thousands (1950-51) to 1,415.8 thousands (2013-14). The no. of teachers in the same period increased from 751 thousand to 6010 thousands & no of students from 23,800 thousands to 2, 22,700 thousands.
Importance of Education:
1. Human Capital formation is very important for the growth of an economy.
(i) Effective use of physical capital: Its growth and productivity depends on human capital formation.
(ii) Human capital formation raises the productivity and production.
2. Inventions, innovations and technological improvement are all due to the extra knowledge acquired during education which provides lot of innovations and inventions.
3. The knowledgeable, skilled and physically fit people help in the human capital formation.
4. Increases life expectancy: Formation of human capital raises life expectancy of the people. This in turn, adds to the quality of life.
5. Improves Quality of life: The quality of population depends upon the level of education health of a person and skill formation acquired by the people.
6. Control of population growth: It has been observed that educated persons have smaller families as compared to illiterate families, So, spread of education is necessary to control the population growth rate.
23. State two advantages and two disadvantages of liberalisation. 2+2=4
Ans: Advantages of Liberalization
- Industrial licensing
- Increase in the foreign investment
Disadvantages of liberalization
- Increase in unemployment
- Loss of domestic units
24. What do you mean by rural development? Mention two subjects related to rural development. 2+2=4
Ans: Rural Development is a continuous comprehensive socio-economic process, attempting to improve all aspects of rural life.
Subjects related to rural development
Cooperative marketing: Cooperative marketing refers to a system in which marketing societies are formed by farmers to sell the output collectively and to take advantage of collective bargaining.
Agricultural marketing: Agricultural marketing is a process that involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country.
Or
Mention four causes of environmental pollution.
Ans: Causes of environmental pollution:
1. Industries: Industries have been polluting our environment especially since the beginning of the industrial revolution
2. Transportation: As the traffic is increasing every day, pollution follows that evolution.
3. Agricultural Activities: Agriculture is mainly responsible for the contamination of water and soil. This is caused by the increased use of pesticides, as well as by the intensive character of its production.
4. Residences: Finally, residential areas provide their fair share of pollution as well. First, to be able to build homes, natural environment has to be destroyed in one way or another.
25. Write two causes of poverty in India. Suggest two measures to remove poverty in India. 2+2=4
Ans: Causes of poverty
- Underdevelopment of the Indian economy: The root cause of poverty is the under development of the Indian economy. The underdevelopment is caused by the relative backwardness of agriculture & industrial sector.
- Population explosion: Rapid growth of population, particularly among the poor, is responsible for the problem of poverty in the country.
- High level of un-employment: Poverty is caused by unemployment or low rates of wages.
Measure to remove poverty:
- Acceleration of economic growth: The first & foremost measure needed to remove poverty is accelerating the rate of economic growth.
- Reducing inequalities of income: High growth rate with reduced inequalities of income helps in removing poverty.
26. Point out four indicators of human development of a country. 4
Ans: The indicators of human development are:
- Life Expectancy.
- Adult Literacy Rate.
- Infant Mortality Rate.
- Percentage of the population below poverty line.
- GDP per capita
- Percentage of the population having access to improved sanitation
- Percentage of the population having access to improved water sources.
27. Discuss the role of agriculture in economic development of India. 6
Ans: Ans: Importance of agriculture is as follows:
- Source of livelihood
- Source of food grains
- Source of industrial raw materials
- Source of national income.
Or
Discuss the common objectives of five-year planning of India.
Ans: Objectives of India’s Five year Plan are:
1. Economic Growth: Of all the objectives, economic growth has received the strongest priority in all the plans. This is because the Indian economy is caught in the vicious circle of poverty due to low per capita income and the consequent low rate of saving and capital formation.
2. Economic Equity and Social Justice:
Two aspects of social justice involve the reduction of poverty and the reduction in the inequality in the distribution of income and wealth.
3. Full Employment: The removal of unemployment is considered to be another important objective of India’s five year plans.
However, the Seventh Plan (1985- 90) treated employment as a direct focal point of policy. As a result, the employment generation programme in India has received a rude shock and the number of people unemployed is mounting up plan after plan. The number of job-seekers increased from 34.24 lakhs as on December 1969 to 402 lakhs in December 1999.
4. Economic Self-Reliance: Self-reliance or, for that matter, self-sufficiency, refers to the elimination of external assistance. In other words, it means zero foreign aid.
5. Modernisation: This new objective was categorically mentioned for the first time in the Sixth Plan. Modernisation means such a variety of structural and institutional changes in the economic activities that can change a feudal and colonial economy into a progressive and modern economy that produces various types of goods.
28. Discuss the non-institutional sources which supply rural credit in India. 6
Ans: Rural Credit: Rural Credit means provision of loans especially in production for agriculture and non-agricultural sectors. The loans have provided in rural areas to the farmers in order to purchase machineries, agricultural implements etc.
Sources of Rural Credit: Rural Credit availability can be broadly classified into 2 categories:
Non-institution Sources: These are the traditional sources of agricultural credit in India. They include
Money lenders,
relatives,
traders,
commission agents and
land lords.
Or
Discuss the relevance of infrastructure in developing the socio-economic aspects of a country.
Ans: i. Infrastructure enhances productivity,
ii. Infrastructure induces investment. iii. Infrastructure enhances size of the market.
iv. Infrastructure enhances ability to work.
v. Infrastructure facilitates out sourcing.
vi. Infrastructure induces FDI.***