CBSE Class 10 Social Science Economics Understanding Economic Development Important Questions with Answers Set 06

Answer: Development: (answered in the short and long answers below)
Sectors of the Indian Economy: 1. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005 implements the Right to Work. 2. Producing goods by using natural resources is the primary sector. 3. Final goods and services are those that are used by consumers or for investment, and not for further production. 4. Railway is an example of the tertiary sector. 5. Providing irrigation facilities is one way to solve underemployment in rural areas.
Money and Credit: 1. Moneylenders and traders (also relatives and employers) are informal sources of credit. 2. A debt trap is a situation in which the borrower cannot repay the loan and the debt keeps increasing. 3. Informal lenders are moneylenders, traders, employers, relatives and friends. 4. Bank deposits are called demand deposits because they can be withdrawn on demand. 5. Currency is the paper notes and coins that are used as money.
Globalisation: 1. Local companies get investment (money for buying machines) and the latest technology when they link up with MNCs. 2. SEZs are Special Economic Zones, with world-class facilities and tax holidays for the first five years, set up to attract foreign companies. 3. Fast transport, with containers and air cargo, allows goods to reach distant markets quickly and cheaply. 4. Foreign investment by MNCs brings money, technology and jobs, linking the production across countries.

Teacher's Note: Use the key term in your answer.

Answer: Kerala has good primary health care, with many health centres, and a high literacy rate, especially among women. The government spends a lot on health and education, and has an effective public distribution system.

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Answer: Equal treatment, freedom, security and respect from others, and a good environment.

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Answer: Their life situations differ, so each person looks for what is best for his or her own situation. A rich person's goals differ from those of a landless labourer.

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Answer: High per capita income, a high literacy rate, good health (high life expectancy and a low infant mortality rate), and a good standard of living with access to basic amenities.

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Answer: Yes. A dam may bring irrigation and electricity to some, but it displaces the tribals and the farmers whose land is submerged. Industrial growth for one can cause pollution that harms others.

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Answer: Kerala has a much lower infant mortality rate and a higher literacy rate, with better health and education facilities for all. Maharashtra has a higher per capita income, but these facilities do not reach everyone, so its human development is lower.

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Answer: Average income is the total income divided by the number of people, so it does not show how it is divided. A country may have a high average because a few are very rich, while many remain poor. It also tells nothing about health, education or the environment.

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Answer: Development must not harm the future generations. Resources such as groundwater and fossil fuels are being used faster than they can be renewed, e.g. groundwater in Punjab is falling, and crude oil may run out. So development must use resources carefully and protect the environment.

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Answer: Income buys goods, but it cannot buy everything: pollution-free environment, public health, safety, and good education are not bought with money. Non-income factors such as equal treatment, freedom and respect are also important. So we use measures like the HDI in addition to income.

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Answer: The primary sector produces from natural resources (farming), and the secondary changes raw material into goods (factories). The tertiary sector produces services, not goods, and helps the other sectors, e.g. transport, banking, trade, teaching and IT.

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Answer: It builds infrastructure such as roads, railways and dams, which private firms will not build. It supports farmers with MSP and procurement, provides health, education and basic services at low cost, creates jobs and ensures the supply of goods at fair prices.

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Answer:

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Answer: It provides basic services such as hospitals, schools, post and telegraph. It supports the primary and secondary sectors through transport, trade and storage. As incomes rise, people want more services such as tourism and shopping. New services, such as IT and communication, have grown. It has become the largest contributor to GDP and creates many jobs.

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Answer: Build irrigation to help farmers grow more crops. Support labour-intensive industries and small-scale industries in semi-rural areas. Expand education and health services. Promote tourism, IT and other services. Provide cheap loans and implement the MGNREGA, which guarantees 100 days of work in a year.

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Answer: A Self-Help Group is a small group of 15 to 20 members, usually women from the same neighbourhood, who save small amounts regularly and give loans to the members at reasonable interest. The objective is to meet the needs for credit without collateral, to free the poor from moneylenders, and to help them to be self-reliant.

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Answer: The borrowers may not have collateral (security), or the proper documents. Their income may be low or uncertain, so the bank fears non-repayment. The loan may be small and not worth the bank's trouble.

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Answer: More credit will raise the incomes of farmers and increase agricultural production. It will reduce the dependence on moneylenders who charge a high interest. Banks will get more customers, and rural development will help the whole economy.

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Answer: The Reserve Bank of India ensures that banks keep a part of the deposits as cash, and give loans not only to profit-making businesses but to small farmers, small industries and poor borrowers. It checks that banks maintain their obligations, so that depositors' money is safe.

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Answer: It lets people borrow for production, such as seeds, tools and equipment, at low cost, so that their incomes rise. It creates more jobs and helps the farmers and small industries to grow. It also saves the borrowers from debt traps.

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Answer: Banks want collateral and documents, which the poor do not have. Bank branches are far from the villages, and the procedure is long and complicated, while the poor need quick, small loans. As a result they depend on the informal lenders, who charge high interest.

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Answer: Consumers have more choice, with better quality at lower prices. Foreign investment brings new technology, money and jobs. Local companies grow by competing and by joining with foreign companies.

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Answer: Small producers and workers, e.g. in batteries, capacitors, plastics, toys and vegetable oil, suffered when cheap imports came. Many units closed and workers lost their jobs. Firms cut costs by hiring workers on short-term contracts, which made jobs insecure.

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Answer: In 1991, India started liberalisation. It removed the quantitative restrictions on imports, reduced the import taxes, and allowed foreign investment in most sectors. This opened the economy to global competition.

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Answer: MNCs bring investment and modern technology to the country. They create jobs and increase production and exports. They give local companies the chance to supply them, and help them to improve quality.

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Answer: Goods travel from one country to another, which connects the markets. Producers can sell their goods in other countries and not just in their own. Consumers can buy goods produced in other countries, e.g. Chinese toys in Indian markets, and Indian garments in the USA. Prices of the same goods become closer.

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Answer: We use foreign brands of goods such as phones, clothes and cars, and eat at foreign food chains. Many Indians work in call centres and IT firms for foreign companies. Indian firms like Tata and Infosys operate abroad. Prices, jobs and styles are influenced by the global market.

Teacher's Note: Give an example if the question allows.