Category: CBSE Class 12

Here we are providing Class 12 Economics Important Extra Questions and Answers Chapter 5 Government Budget and the Economy. Economics Class 12 Important Questions are the best resource for students which helps in class 12 board exams.

Class 12 Economics Chapter 5 Important Extra Questions Government Budget and the Economy

Government Budget and the Economy Important Extra Questions Very Short Answer Type

Question 1.
Define government budget. (C.B.S.E 2013, 2014, 2017)
Answer:
The government budget is an annual statement of the estimated receipts and expenditure of the government over the fiscal year, which runs from April 1 to March 31.

Question 2.
State any one objective of government budget.
Answer:
One of the primary objectives of the government budget is to mobilise resources for the purpose of rapid development.

Question 3.
Define surplus budget.
Answer:
A surplus budget is the one where the estimated revenues of the government are greater than the estimated expenditures,

Question 4.
Define a balanced budget.
Answer:
A balanced budget is the one where the estimated revenue of the government equals the estimated expenditure.

Question 5.
Define a deficit budget.
Answer:
A deficit budget is the one where the estimated revenue of the government is less than the estimated expenditure.

Question 6.
What is revenue expenditure?
Answer:
Revenue expenditure refers to that expenditure by the government, which neither creates assets for the government nor reduces its liabilities. For example, old-age pension.

Question 7.
Define capital expenditure.
Answer:
Capital expenditure refers to that expenditure by the government, which either creates assets for the government or reduces its liabilities.

Question 8.
Define a tax. (C.B.S.E. 2012,2019)
Answer:
Tax is a compulsory payment made by an individual or an institution to the government without anything in exchange

Question 9.
State any two sources of non-tax revenue receipts. (C.B.S.E 2011 Comp.)
Answer:
The two sources of non-tax revenue receipts are:
(i) Income from investment made by the government
(ii) Fees and fines received by the government

Question 10.
Why is entertainment tax an indirect tax?
Answer:
The entertainment tax is an indirect tax because the seller of the service passes the burden of tax on to the buyer of the service.

Question 11.
Define fine.
Answer:
Fines are amounts levied for an infringement of a law.

Question 12.
Define fiscal discipline.
Answer:
Fiscal discipline means having control over expenditures, given the quantum of revenues.

Question 13.
Define Direct tax (C.B.S.E. Outside Delhi 2012, 2019)
Answer:
Direct taxes are those taxes levied immediately on the property and income of persons, and are paid [ by-the consumers to the state.

Question 14.
Give Area examples of direct taxes. (C.B.S.E.20I0)
Answer:
Following are the three examples of direct tax-
(i) Income Tax
(ii) Wealth Tax
(iii) Interest Tax

Question 15.
What do you mean by an indirect tax? (C.B.S.E. Outside Delhi 2019)
Answer:
Indirect tax is a tax collected by an intermediary (seller) from the person who bears the ultimate economic burden of the tax (buyer), Its burden can be shifted by the tax payer on someone else.

Question 16.
Define GST (C.B.S.E. 2013)
Answer:
GST’ is a value-added tax paid by the consumers and remitted to the government by the seller of various goods and service

Question 17.
Give two examples of fees.
Answer:
Following are the three examples of fees:
(i) College fees in government colleges
(ii) License fees

Question 18.
Define fee.
Answer:
Fee refers to a payment to defray the cost of each recurring service undertaken by the government but conferring a special advantage on the fee payer.

Question 19.
State any two items of revenue expenditure in a Government budget. (C.B.S.E. 2019)
Answer:
Defence expenditure and expenditure on social services.

Question 20.
Indicate two heads of government expenditure on capital account.
Answer:
Acquisition of land or buildings, acquisition of plant machinery or equipment.

Question 21.
Write two heads of government development expenditure.
Answer:
Expenditure on economic services like agriculture, industry, etc., expenditure on education or health.

Question 22.
Point out two heads of non-development government expenditure.
Answer:
Defence expenditure and payments on administrative services.

Question 23.
What is meant by revenue deficit? (C.B.S.E 2004,09, 10,2017), (C.B.S.E. Outside Delhi 2013)
Answer:
Revenue deficit in the government budget represents the excess of current revenue expenditure over the current revenue receipts.

Question 24.
Define primary deficit. (C.B.S.E. 2004,2009,2017,2019)
Answer:
Primary deficit is the difference between fiscal deficit and interest payments. It indicates how much of the government borrowing is going to meet expenses, other than interest payments.

Question 25.
What is meant by fiscal deficit? (C.B.S.E. 2004, 05, 09, 2017, 2019)
Answer:
The fiscal deficit is the difference between the total expenditure of the government and the revenue receipts plus the capital receipts, which are not in the nature of borrowing, but which finally accrue to the government.

Question 26.
How is primary deficit calculated? (C.B.S.E 2010), (C.B.S.E Outside Delhi 2011 Comp.)
Answer:
Primary deficit is calculated as:
Primary deficit = Fiscal deficit – Interest payment.

Government Budget and the Economy Important Extra Questions Short Answer Type

Question 1.
What is a government budget? Name two sources each of non-tax revenue receipts and capital receipts.
Answer:
The government, budget is an annual statement of the estimated receipts and expenditure of the government over the fiscal year, which runs from April I to March 31.

Non-tax revenue receipts are the receipts received by the government in the form of prices paid for government supplied goods and services. The sources of non-tax revenue receipts include payments for postage and railway services.

Capital receipts of the government are those receipts, which either cause reduction in the assets or create a liability for the government. Small savings and deposits in the public provident fund are the two sources of the capital receipts.

Question 2.
What are the objectives of a budget?
Answer:
The objectives of a budget are as follows:

• Reallocation of Resources
• Reducing Inequalities in Income and Wealth
• Economic Stability
• Management of Public Enterprises
• Economic Growth
• Reducing Regional Disparities

Question 3.
How can a government budget help in reducing inequalities of income? Explain. (C.B.S.E. 2010,2017)
Or
How can budgetary policy be used to reduce inequalities of income? (C.B.S.E. Outside Delhi 2011,2013,2018)
Answer:
An important objective of the government budget is to reduce the income inequalities. The government budget helps in achieving the objective of reducing inequalities of income through progressive taxation.

Under progressive taxation, burden of the tax falls more on the rich and less on the poor. The rate of tax increases as the income increases. Thus, progressive tax is equitable. Appropriate expenditure policy in the government budget also helps in reducing the inequalities of income.

Question 4.
Explain the allocation function of a government budget. (C.B.S.E. 2010, 11, 12, 18), (2013 Comp.)
Answer:
The government aims to reallocate resources in a way so that its economic (profit maximisation) and social objectives (public welfare) are fulfilled. The government can influence allocation of resources through implementation of appropriate fiscal policy.

Production of goods, which are injurious to health is discouraged through heavy taxation. On the other hand, production of goods which are beneficial for society is encouraged through subsidies.

Question 5.
Explain the ‘redistribution of income’ objective of government budget. (C.B.S.E Outside Delhi 2011)
Answer:
The government budget shows its comprehensive exercise on the taxation and subsidies. The government imposes higher taxes on the rich and spends the revenue on the welfare of the poor. This helps in reducing inequalities in the distribution of income. Equitable distribution of income and wealth is a sign of social justice, which is the principal objective of any welfare state in India.

Question 6.
Explain the ‘economic stability’ objective of a government budget. (C.B.S.E Outside Delhi 2011,12,17)
Answer:
Free play of the market forces are bound to generate trade cycles, also called business cycles. These refer to the phases of recession and depression, recovery and boom in the economy. The government of a country is always committed to save the economy from business cycles.

The government budget plays a significant role in preventing business fluctuations due to inflation or deflation and hence, maintains economic stability. Economic stability stimulates investment, consequently, increasing the rate of growth and development.

Question 7.
What are externalities? Give an example of a positive externality and its impact on welfare of the people. (C.B.S.E. Outside Delhi 2014)
Answer:
Externalities refer to the harms (or benefits) a firm or an individual causes to another for which they are not penalised (or paid for). Externalities may be positive or negative. For example, Increase in government’s expenditure on education of individuals can lead to broader society benefits in the form of greater economic productivity, lower unemployment rate, greater household mobility and higher rate of political participation.

Question 8.
Define externalities. Give an example of negative externality. What is its impact on welfare? (C.B.S.E .2014)
Answer:
Externalities refer to the harms (or benefits) a firm or an individual causes to another for which they are not penalised (or paid for). Externalities may be positive or negative. For example, increase in GDP may be at the cost of considerable pains and sacrifices in the form of environment pollution.

As a result, increase in GDP may mean less economic welfare. If increase in GDP has been brought about by making wokers work in bad working conditions, increase in GDP will not raise the level of economic welfare.

Question 9.
Distinguish between revenue receipts and capital receipts. Give an example of each.
Or
How are capital receipts different from revenue receipts. Discuss briefly. (C.B.S.E 2019)
Answer:
The differences between revenue receipts and capital receipts are stated below:

S.No.	Revenue Receipts	Capital Receipts
(a)	Revenue receipts neither create any liability nor reduce any asset of the government.	Capital receipts either create any liability or reduce any asset of the government.
(b)	They are regular and recurring in nature.	They are non-recurring in nature.
(c)	There is no future application to determine the amount.	In case of certain capital receipts, like browsing. there is future obligation to return the amount
(d)	Example: income tax, GST, non-tax revenue like interest, fees, etc.	Example: disinvestment, borrowings

Question 10.
Distinguish between direct tax and indirect tax? Give an example of each. (C.B.S.E 2017), (C.B.S.E Outside Delhi 2011, Comp. 2017)
Answer:
Direct tax is a tax levied on the property and the income of persons. These are paid directly to the state by the consumers. Its burden cannot be shifted by the tax payer on someone else.
For example: Income tax.

Indirect tax is a tax collected by an intermediary (seller) from the person who bears the ultimate economic burden of the tax (buyer). Its burden can be shifted by the tax payer omsomeone else.
For example: Excise duty.

Question 11.
State three sources each of revenue receipts and capital receipts in government budget. (C.B.S.E. Outside Delhi 2013)
Answer:
Revenue receipts are those money receipts, which neither lead to reduction in assets, nor create a liability for the government. Sources of revenue receipts are:

• Tax revenue
• Fines
• License fee

Capital receipts, on the other hand, are those money receipts, which either create liability or cause a reduction in the assets of the governments. Sources of capital receipts are:

• Recovery of loans
• Public borrowings by the government
• Deposits in the public provident fund

Question 12.
Is the following a revenue receipts or a capital receipts in the context of government budget and why?
(i) Tax receipts
(ii) Disinvestment (C.B.S.E. Outside Delhi 2014)
Answer:
(i) Tax receipts are revenue receipts because these neither result in the creation of physical/ financial assets nor cause any reduction in the liabilities of the government.

(ii) Disinvestment is the opposite of investment. Disinvestment occurs when the government sells off its shares of public sector enterprises to the private sector. It is a capital receipt because it leads to reduction in the assets of the government.

Question 13.
Classify the following statements as revenue receipts or capital receipts. Give valid reasons in support of your answer.
(a) Financial help from a multinational corporation for victims in a flood affected area.
(b) Sale of shares of a Public Sector Undertaking (PSU) to a private company,Y Ltd.
(c) Dividends paid to the Government by the State Bank of India.
(d) Borrowings from International Monetary Fund (IMF). (C.B.S.E. Outside Delhi 2019)
Answer:
(a) Financial help from a multinational corporation for victims in a flood affected area is a revenue receipt as it neither creates any asset not reduces any liability of the government.

(b) Sale of shares of a Public Sector Undertaking (PSU) to a private company, Y Ltd. is a capital receipt as it reduces the assets of the government.

(c) Dividends paid to the Government by the State Bank of India area is a revenue receipt as it neither creates any asset not reduces any liability of the government.

(d) Borrowings from International Monetary Fund (IMF) is a capital receipt as it increases the liabilities of the government.

Question 14.
How are tax receipts different from non-tax receipts? Discuss briefly. (C.B.S.E. 2019)
Answer:
Tax receipts are revenue receipts because these neither result in the creation of physical/ financial assets nor cause any reduction in the liabilities of the government.

Non-tax receipts are the receipts received by the government in the form of prices paid for government-supplied goods and services. The sources of non-tax revenue receipts include payments for postage and railway services.

Question 15.
What is the basis of classifying government expenditure into:
(i) revenue expenditure and capital expenditure?
(ii) plan expenditure and non-plan expenditure?
Answer:
Revenue Expenditure and Capital Expenditure
Revenue expenditure refers to the expenditure, which neither results in the creation of the assets nor causes any reduction in the liabilities of the government. Capital expenditure refers to the expenditure, which either leads to the creation of the assets or causes a reduction in the liabilities of the government.

Plan Expenditure and Non-plan Expenditure
Plan expenditure is the expenditure incurred by the government to meet its planned development and investment outlay. Non-plan expenditure is the expenditure incurred on activities, which are beyond the scope of planned development outlay

Question 16.
Is the following revenue expenditure or capital expenditure on the context of government budget? Give reason.
(i) Expenditure on collection of taxes
(ii) Expenditure on purchasing computer (C.B.S.E. 2014)
Answer:
(i) Expenditure on collection of taxes is revenue expenditure because it neither results in the creation of physical/ financial assets nor causes any reduction in the liabilities of the government.

(ii) Expenditure on purchasing computer is a capital expenditure because it results in the creation of physical asset of the government.

Question 17.
What is meant by revenue deficit? What are the implications of this deficit?
Answer:
The excess of the government’s revenue expenditure over the revenue receipts is called the revenue deficit. Given the same level of the fiscal deficit, a higher revenue deficit is worse than a lower one. High revenue deficit implies that the government should follow contractionary fiscal policy, that is, increase tax and/or reduce spending.

In a less developed countries, it is difficult to force people to pay higher taxes or to cut expenditure on development activities. Thus, the government usually finance its revenue deficit through borrowings. A revenue deficit implies a repayment burden in the future, not matched by any benefits via investment. It leads to rise in the prices and hampers the progress of the economy.

Question 18.
What is meant by revenue deficit? What are the implications of this deficit?
Answer:
The excess of the government’s revenue expenditure over the revenue receipts is called the revenue deficit. Given the same level of the fiscal deficit, a higher revenue deficit is worse than a lower one.

High revenue deficit implies that the government should follow contractionary fiscal policy, that is, increase tax and/or reduce spending. In a less developed countries, it is difficult to force people to pay higher taxes or to cut expenditure on development activities.

Thus, the government usually finance its revenue deficit through borrowings. A revenue deficit implies a repayment burden in the future, not matched by any benefits via investment. It leads to rise in the prices and hampers the progress of the economy.

Question 19.
What is meant by fiscal deficit? What are the implications of a large fiscal deficit? (C.B.S.E 2012)
Or
What is ‘fiscal deficit’? What are its implications? (C.B.S.E. Outside Delhi 2012)
Answer:
Fiscal deficit is the excess of total expenditure of the government over its total revenue and the capital receipts, excluding the borrowings and other liabilities of the government. Alternatively, fiscal deficit is an aggregate of the budgetary deficit plus government borrowings and the other liabilities. Fiscal Deficit = Total Expenditure – Total Receipts (excluding borrowings)
Or
Fiscal Deficit = Total Expenditure – (Total Revenue Receipts + Non-debt Capital Receipts)
Or
Fiscal Deficit = Budgetary Deficit + Borrowings and the other Liabilities Implications.

The important implications of fiscal deficit are:
(i) Large budgetary and fiscal deficit is an indication that the government has been spending beyond its means.

(ii) The mounting fiscal deficit implies that the increase in the tax revenue is not consistent with the revenue requirements of the government or that the tax collections are relatively sluggish. The implication may also follow that the tax system is relatively less elastic.

(iii) The increasing fiscal deficit implies that the government’s reliance over market and other borrowings has been rising. Moreover, it implies that the burden of debt seivice has been increasing.

Question 20.
Can there be a fiscal deficit in a government budget without a revenue deficit?
Answer:
Yes, there can be a fiscal deficit in the government budget without a revenue deficit.
Revenue deficit refers to a situation where revenue expenditure of the government exceeds its total revenue receipts. Fiscal deficit, on the other hand, refers to a situation where the total expenditure of the government exceeds sum total of its revenue receipts and non-debt capital receipts (total receipts excluding borrowings). Fiscal deficit is possible in a government budget even without revenue deficit ; in the situations when:

(i) the revenue budget is balanced and capital budget shows a deficit:
or
(ii) the deficit in the capital budget is greater than the surplus in the revenue budget

Question 21.
What are the implications of revenue deficit? State two measures of reduce this deficit. (C.B.S.E Outside Delhi 2011 Comp.)
Answer:
The excess of the government’s revenue expenditure over the revenue receipts is called the revenue deficit.
Given the same level of the fiscal deficit, a higher revenue deficit is worse than a lower one. High revenue deficit implies that the government should follow contractionary fiscal policy, that is, increase tax and/or reduce spending. In a less developed countries, it is difficult to force people to pay higher taxes or to cut expenditure on development activities.

Thus, the government usually finance its revenue deficit through borrowings. A revenue deficit implies a repayment burden in the future, not matched by any benefits via investment. It leads to rise in the prices and hampers the progress of the economy. Measures to reduce the revenue deficit are following:

• Framing suitable policies
• Proper utilisation of revenue receipts

Government Budget and the Economy Important Extra Questions Long Answer Type

Question 1.
What is a government budget? Discuss its objectives.
Answer:
The budget is a government’s annual statement of estimated receipts and payments over the fiscal year, which runs from April I to March 31.
The main objectives of government budget are:
(i) Reallocation of Resources: The government aims to reallocate resources in a way so that its economic (profit maximisation) and social objectives (public welfare) are fulfilled. The government can influence allocation of resources through implementation of appropriate fiscal policy.

(ii) Reducing Inequalities in Income and Wealth: Another important objective of the government is to reduce income inequalities through its policies. The government imposes higher taxes on the rich and spends the revenue on the welfare of the poor. This helps in reducing inequalities in the I distribution of income.

(iii) Economic Stability: The government budget plays a significant role in preventing business fluctuations due to inflation or deflation and hence, maintains economic stability.

(iv) Management of Public Enterprises: A large numbers of public sector industries have been established and managed for the welfare of the public. The government budget provides financial support to these enterprises.

(v) Economic Growth: The rate of saving and investment in an economy determine the rate of economic growth. The budgetary policy, therefore, aims to mobilise sufficient resources for investment in the public sector.

(vi) Reducing Regional Disparities: It is an important objective of the government budget to reduce regional disparities through taxation and expenditure policy. For this, government provides funds for the setting up of production units in economically backward regions.

Question 2.
Describe the importance of government budget.
Answer:
The importance of budget can be explained with the help of following points:
(i) Economic Stability: Government can achieve economic stability through budget. During inflation, government makes the surplus budget, whereas during depression, it makes deficit budget. Prices can be stabilised through budget.

(ii) Economic Control: Government controls the whole parliament and councils through budget. Revenue can be properly utilised through budget.

(iii) Economic and Social Development: Budget has a great importance in economic and social development Government encourages industries and agriculture by giving subsidies through its budget and encourages production. In the same way, government imposes high taxes through budget on rich class and redistributes the revenue collected by these taxes among the poorer sections of the society.

(iv) Administrative Efficiency: Government decides the limits of working areas of every official and employment through its budget.

(v) Instrument of Fiscal Policy: Budget is an important instrument of the fiscal policy of the country. Fiscal policy is the policy of fixing its revenue and expenditure in a way that economic fluctuations are minimised.

Question 3.
Explain the importance of public expenditure.
Answer:
Importance of public expenditure has been increased due to the following reasons: –
(i) Increase in the Activities of the State: In the modern age, the activities of the state have been increased many times. There has been an extensive and intensive increase in the activities of central, state and local governments.

Now a days, governments undertake various activities such as to run, encourage and regularise the economic activities, to maintain economic stability, to secure poor and backward classes and to increase the rate of economic development, etc. There is a great importance of public expenditure in the completion of these activities.

(ii) Economic Planning: Developing countries like India has adopted the path of economic planning for the removal of problems like poverty, unemployment and for the development of the country. As a result, the government has to incur expenditure on large scale. There is a great importance of public expenditure in economic planning.

(iii) Removing Unemployment, Poverty and Income Inequalities: Public expenditure has a great importance for the reduction of chronic problems like unemployment, poverty and income inequalities.

Question 4.
What is the meaning of revenue deficit? What problems does it create?
Answer:
The concept of revenue deficit is simple and straight. The revenue deficit is defined as the excess of revenue expenditure over revenue receipts. Mathematically
Revenue Deficit = Revenue Expenditure – Revenue Receipts
For example, according to the government of India, Budget for the year 2005-2006 states:
Total Revenue Receipts = ₹ 3,09,322 crores Total Revenue Expenditure = ₹ 3,85,493 crores

Revenue Deficit = ₹ 3,85,493 – 3,09,322 = ₹ 76,171 crores In other words, there should be revenue surplus, which should be used for building projects or building assets which yield return. In fact, revenue surplus represents government savings, which can be used for financing development.

Revenue deficit represents a critical situation in the economy. Revenue deficit indicates the amount of current expenditure which cannot be met by revenue receipts. It implies that government is spending beyond its means. The government should either increase its tax/non-tax receipts or should cut its expenditure.

In poor countries, in the initial stages of economic development, often the situation arises when the government has to incur large expenditure on administration and maintenance (particularly on defence, police and law and order) but it is difficult to compel the poor people to pay high taxes. In such situations, the government meets its revenue deficit either through borrowing or through disinvestment. Borrowing by the government, on the other hand, creates the problem of repayment of debt. Disinvestment reduces the asset of the government.

Question 5.
Explain the meaning of the following: (C.B.S.E. 2018)
(i) Revenue Deficit
(ii) Fiscal Deficit
(iii) Primary Deficit
Ans.
(i) Revenue Deficit: Revenue deficit is the excess of current revenue expenditure over the current
revenue receipts.

Revenue Deficit = Current Revenue Expenditure – Current Revenue Receipts Current revenue expenditure includes both plan and non-plan expenditure of the government to be met through revenue receipts. Current revenue receipts include the net tax and non-tax revenue receipts of the central government.

Until the middle of 1970’s, the central government in India enjoyed revenue surplus as the revenue receipts of the central government exceeded the revenue expenditure. The phenomenon of revenue deficit made its appearance during the latter 1970’s.

(ii) Fiscal Deficit: Fiscal deficit is the difference between total expenditure of the government and its total revenue receipts and capital receipts excluding the borrowings and other liabilities of the government. Alternatively, fiscal deficit is the aggregate of budgetary deficit plus borrowings and other liabilities.

Fiscal Deficit can be calculated as below:
Fiscal Deficit = Total Expenditure – Total Revenue Receipts – Capital Receipts excluding borrowings.

(iii) Primary Deficit: Primary deficit is the difference between fiscal deficit and interest payments. It is the aggregate of budgetary deficit plus borrowings and other liabilities minus interest payments.
It can be calculated as:
Primary Deficit = Fiscal Deficit – Interest Payments Alternatively primary deficit can be evaluated as:
Primary Deficit = Budgetary Deficit + Borrowings and Other Liabilities – Interest Payments. The primary deficit in the central government budget in India was of the magnitude of? 19,502 crore in 2000-01 . which has increased to ? 31,317 crore in 2001 -2002.

Government Budget and the Economy Important Extra Questions HOTS

Question 1.
Is borrowing by the government a revenue receipt?
Answer:
No, borrowing by the government is not a revenue receipt because it creates a liability for the government for repayment.

Question 2.
Find budget deficit from the following data:
Answer:

Items	(₹ in Crore)
1. Revenue receipts	40,000
2. Revenue expenditure	30,000
3. Capital receipts	30,000
4. Capital expenditure	50,000

Budget Deficit = (Revenue Expenditure + Capital Expenditure) – (Revenue Receipts + Capital Receipts)
= (30,000 + 50,000) – (40,000 + 30,000)
= 80,000 – 70,000 = ₹ 10,000 crore

Question 3.
Is balanced budget an achievement for the government?
Answer:
Balanced budget is not always an achievement for the government. When the economy is in a state of depression, it is in fact suggested to increase government expenditure, even if it causes inflation in the economy.

Here we are providing Class 12 Economics Important Extra Questions and Answers Chapter 2 National Income Accounting. Economics Class 12 Important Questions are the best resource for students which helps in class 12 board exams.

Class 12 Economics Chapter 2 Important Extra Questions National Income Accounting

National Income Accounting Important Extra Questions Very Short Answer Type

Question 1.
What is depreciation? (C.B.S.E. 2011), (2013 Comp.)
Answer:
Depreciation is the loss in the value of fixed capital due to normal wear and tear, foreseen obsolescence and normal rate of accidental damage. It is also known as consumption of fixed capital.

Question 2.
Define intermediate goods. (C.B.S.E. Outside Delhi 2011 Comp) (2013 Comp.))
Answer:
Intermediate goods are those goods, which are not meant for final consumption. These are raw materials used in the production of other goods, and services.

Question 3.
Define net exports.
Answer:
Net exports refer to the difference between the value of exports (X) and the value of imports (M) of a country during an accounting year.

Question 4.
What is saving?
Answer:
Saving is defined as that part of National Income, which is not spent on final consumption expenditure.

Question 5.
Give two examples of indirect taxes.
Answer:
Examples of indirect tax:
(i) Custom Duty
(ii) Excise Duty
(iii) Sales Tax

Question 6.
Define corporation tax.
Answer:
Corporation tax is a tax on the income of the corporations.

Question 7.
Define indirect tax.
Answer:
Indirect tax is a tax collected by an intermediary (seller) from the person who bears the ultimate economic burden of the tax (buyer). Its burden can be shifted by the tax payer on someone else.

Question 8.
How rate of saving is calculated?
Answer:
Rate of saving is calculated as:
\(\frac{\text { Net Domestic Saving }}{\text { Net Domestic Product }} \times 100\)

Question 9.
How rate of capital formation is estimated?
Answer:
Rate of capital formation is calculated as:
\(\frac{\text { Net Domestic Capital Formation }}{\text { Net Domestic Product }} \times 100\)

Question 10.
Give two examples of intermediate goods. (C.B.S.E. Outside Delhi 2013)
Answer:
Following are the two examples of intermediate goods:
(i) Cloth: Cloth is used as an intermediate good for manufacturing garments.
(ii) Steel: Steel is used as an intermediate good for manufacturing, say, bicycle.

Question 11.
Define a stock.
Answer:
Stock is an economic variable that is measured at a specific point of time. It is a static concept.

Question 12.
Define flow concept.
Answer:
Flow is an economic variable that is measured over a specific period of time. It is a dynamic concept.

Question 13.
Define a closed economy.
Answer:
A closed economy is the one, which does not undertake economic transactions with the rest of the world.

Question 14.
Define an open economy.
Answer:
An open economy is the one, which undertakes economic transactions with the rest of the world.

Question 15.
Is National Income a stock or flow variable?
Answer:
National Income is a flow variable because it is measured over a period of time.

Question 16.
What do you mean by money flow?
Answer:
Money flow refers to the flow of money value across different sectors in an economy.

Question 17.
State which of the following is a stock and which is a flow?
(i) Wealth
(ii) Cement Production
Answer:
(i) Wealth is a stock concept because it is measured at a point of time.
(ii) Cement production is a flow concept because it is measured over a period of time.

Question 18.
State whether the following is a stock or flow:
(i) Population of a country
(ii) Number of births
Answer:
(i) Population of a country is a stock concept because it is measured at a point of time.
(ii) Number of births is a flow concept because it is measured over a period of time.

Question 19.
Define flow variable. (C.B.S.E Outside Delhi 2012), (C.B.S.E 2011)
Answer:
Flow variables are the variables which are measured over a specific period of time.

Question 20.
What are stock variables? (C.B.S.E 2012), (C.B.S.E Outside Delhi 2011)
Answer:
Stock variables are those variables which are measured at a specific point of time.

Question 21.
What do you mean by circular flow?
Answer:
Circular flow is a pictorial illustration showing the flow of receipts of and payments for goods and . services, and factor of production across different sectors in an economy.

Question 22.
Give any two examples of flow concept. (C.B.S.E 2019)
Answer:
(i) National Income
(ii) Population growth
(iii) Investment .

Question 23.
What are leakages in circular flow?
Answer:
Leakages in the economy refer to the withdrawal of income from the process circular flow in the form of savings, taxes and imports from the foreign sector. For example: Savings.

Question 24.
What are injections into circular flow?
Answer:
Injections in the economy refer to the contribution of income into the process circular flow in the form of investment, government spending and exports to the foreign sector. For example: Investment.

Question 25.
Who supplies factor services in the circular flow?
Answer:
Household sector supplies factor services in the circular flow.

National Income Accounting Important Extra Questions Short Answer Type

Question 1.
Distinguish between goods and services.
Answer:
Goods are physical products, capable of being delivered to a purchaser. It involves the transfer of ownership from seller to buyer. For example: television, computers, car, etc. Services are all those economic activities essentially intangible that provide satisfaction of wants and are not necessarily linked to the sale of a product. For example: transportation, banking, insurance, etc.

Question 2.
What is the difference between final and intermediate good? (C.B.S.E Outside Delhi 2017), (C.B.S.E 2009,2017)
Answer:
Final goods are those goods which are ready for consumption or capital formation by final users. Intermediate goods, on the other hand, are those goods which not meant for final consumption. These are raw materials used in the production of other goods and services. For example: A chair is a final good, but wood, cane, foam, cloth, etc. used to produce chair are all intermediary goods.

Question 3.
Which among the following are final goods and which are intermediate goods? Give reasons. (C.B.S.E20I8)
(a) Milk purchased by a tea stall
(b) Bus purchased by a school
(c) Juice purchased by a student from the school canteen
Answer:
(a) Milk purchased by a tea stall is an intermediate good that will be used to produce the final good, that is, tea.

(b) Bus purchased by a school is a final product because it is used by the students and staff for final consumption. It is a kind of investment by the school as the school will use the bus for several years.

(c) Juice purchased by a student from the school canteen is a final product because it is ready for the final consumption.

Question 4.
Distinguish between consumer goods and capital goods. Which of these are final goods? (C.B.S.E 2010)
Answer:
Consumer goods are those goods which directly satisfy the wants of the consumer. These are used as final consumption goods. Consumer goods may be durable items, semi-durable items, non-durable and services. Capital goods, on the other hand, are those goods which are producer’s fixed assets, and are used in the production of other goods and services. Both, consumer goods and capital goods are final goods as these are meant for final use by the user.

Question 5.
Giving reasons, classify the following into intermediate and final goods:
(i) Machines purchased by a dealer of machines
(ii) A car purchased by a household
Answer:
(i) Machine purchased by a dealer of machines is a intermediate goods because this machine is used to produce other goods.
(ii) A car purchased by a household is a final good because this car is ready for the final consumption.

Question 6.
Giving reason identify whether the following are final expenditure or intermediate expenditure:
(i) Expenditures on maintenance of an office building
(ii) Expenditure on improvement of a machine in a factory
(iii) Computers installed in an office
(iv) Mobile sets purchased by a mobile dealer
(v) Furniture purchased by a school
(vi) Chalks, dusters etc. purchased by a school
Answer:
(i) Expenditure on maintenance of an office building is an intermediate expenditure as building will be used further for production activities.

(ii) Expenditure on improvement of a machine in a factory is a final expenditure as this machine is ready to be used by the labour who is the final user.

(iii) Computers installed in an office are final products as they are ready for final use and directly satisfy the users in the office.

(iv) Mobile sets purchased by a mobile dealer are intermediate products as they are purchased for resale.

(v) Furniture purchased by a school is a final product because it is used by the students and staff for final consumption. It is a kind of investment by the school as the school will use the furniture for several years.

(vi) Chalks, dusters, etc. purchased by a school are final products as they are used by the final users, that is, teachers.

Question 7.
Explain the circular flow of income. (C.B.S.E. 2013,2017)
Answer:
The circular flow with two-sector economy can be explained with the help of the following diagram:

The above diagram shows the two sectors in the economy-the household sector and the production sector. Household sector has the endowment of factors of production (land, labour, capital and entrepreneurship) and it sells them to the production sector which produces goods and services by using these factor inputs.

Production sector sells the goods and services it produces to the household sector. Thus, the output produced by the production sector is consumed by the household sector. It is called real flow, which involves flow of goods and services.

The production sector makes factor payment to the household sector in terms of wages for labour services, rent for land, interest for capital and profits to entrepreneurship. The household sector uses this income to incur expenditure on purchase of consumer goods and services produced by the production sector. This flow of money payments and expenditure is known as money flow.

Question 8.
What is real flow and money flow?
Answer:
Real flow refers to the flow of goods and services across different sectors in an economy. Households provide factors of production such as land, labour, capital and entrepreneur to the firms. The firms, in turn, provide the goods and services so produced to the households.

Money flow refers to the flow of money value across different sectors in an economy. Factor incomes such as rent, wages, interest and profit flow from production sector to household sector and the payment for consumption of final goods and services or consumption expenditure flow from household sector to production sector.

Question 9.
Giving reason, categorise the following into stock and flow:
(i) Capital
(ii) Saving
(iii) Gross Domestic Product
(iv) Wealth (C.B.S.E. 2013)
Answer:
(i) Capital is a stock concept because it is measured at a point of time.
(ii) Saving is a flow concept because it is measured over a period of time.
(iii) Gross Domestic Product (GDP) is a flow concept because GDP is measured over a period of time.
(iv) Wealth is a stock concept because it is measured at a point of time.

Question 10
Will the following be a part of domestic factor income of India? Give reasons for your answer.
(i) Old age pension given by the government
(ii) Factor income from abroad
(iii) Salaries of Indian residents working in Russian Embassy in India
(iv) Profits earned by a company in India, which is owned by a non-resident
Answer:
(i) Old age pension given by the government will not be a part of domestic factor income of India be-cause it is a transfer payment.

(ii) Factor income from abroad will not be a part of domestic factor income of India because it is a part of national factor income of India. Domestic factor income becomes national factor income by adding factor income from abroad to domestic income.

(iii) Salaries received by the Indian residents working in the Russian Embassy in India will be a part of the domestic factor income of India because these are the wages to Indian residents within the national territory of India.

(iv) Profits earned by a company in India, which is owned by a non-resident is not a part of domestic factor income of India because it is a retained earnings of resident company abroad. It is the part of factor income to abroad.

Question 11.
Explain the term ‘compensation of employees’ and its components. Giving reasons, state whether the following are treated as compensation of employees:
(i) Gifts by employers
(ii) Bonus
Answer:
Compensation of employees means the wages and salaries paid for mental and physical abilities of labourers in cash and kind. Following are the components of compensation of employees:

• Wages and salaries in cash
• Compensation in kind
• Employers’ contribution to social security schemes
• Pension on retirement

(i) Gifts by employers are treated as compensation of employees because it is a payment made in kind.
(ii) Bonus is the part of supplementary income and hence, treated as compensation of employees.

Question 12.
Give the meaning of factor income to abroad and factor income from abroad. Also give an example of each.
Answer:
Factor income from abroad is the sum total of factor incomes earned by normal residents of a country for abroad. For example, wages received by the Indian employees wonclng m American Embassy, Factor income to abroad means payments to foreigner for their goods and services. For example, wages to foreign technical export.

Question 13.
Why are exports included in the estimation of domestic product by the expenditure method? Can Gross Domestic Product be greater than Gross National Product?
Answer:
Expenditure method estimates expenditure on domestic products, that is, expenditure on final goods and services produced within the economic territory of the country. It includes expenditure by both residents and non-residents. Exports, though purchased by non-residents, are produced within the economic territory and therefore, a part of domestic product.

Gross Domestic Product can be greater than Gross National Product if factor income paid to the rest of the world is greater than the factor income received from the rest of the world, that is, when net factor income received from abroad is negative.

Question 14.
Define the problem of double counting in the computation of national income. State any two approaches to correct the problem of double counting. (C.B.S.E 2019)
Answer:
Double counting refers to counting of an output more than once while passing through various stages of production. The problem of double counting arises when the value of some goods and services are counted more than once while estimating national income. In measuring the national income, the value of only final goods and services is to be included. In other words, the problem of double counting arises when value of intermediate goods is also included along with the value of final goods.

Question 15.
How to Avoid Double Counting?
Answer:
There are two alternative ways of avoiding double counting
(a) Final Output Method: According to this method, the value of only final goods should be added to determine the national income.
(b) Value Added Method: Deduct intermediate consumption from value of output to arrive at value added.

Question 16.
Describe the precautions that should be taken while measuring National Income using income method. (C.B.S.E. Outside Delhi 2017)
Answer:
Following precautions should be taken while measuring the National Income using income method:

• The income from the illegal activities such as theft, smuggling and gambling should not be included in the National Income.
• Windfall gains such as lottery should not be included.
• Transfer payment such as unemployment allowance, old age pension, donation to the religious
  places, etc. should not be included in the National Income. ,
• The value of the production kept for self-consumption should be included in the National Income.
• The imputed rent of the house in which landlord himself is living should also be included.

Question 17.
Describe the precautions that should be taken while measuring National Income using product method. (C.B.S.E. Outside Delhi 2017)
Answer:
Following precautions should be taken while measuring the National Income using product method or value added method:

• The value of self-consumption output should be included in the National Income.
• Imputed rent on the owner occupied house should be taken into consideration while measuring the National Income.
• Value of the sale and purchase of second hand goods and property should not be included in National Income.
• The imputed value of the government, corporate and household own-production of fixed capital should be included in the National Income.

Question 18.
Describe the precautions that should be taken while measuring national income using expenditure method. (C.B.S.E. Outside Delhi 2017)
Answer:
Following precautions should betaken while measuring the national income using expenditure method:
(i) While calculating the total expenditure, only the final-expenditure must be included and not the intermediate expenditure. If both of these are included, the problem of double counting arises.

(ii) Expenditure on second hand goods should not be included in final expenditure since the production of old goods took place in previous years and not in the current year.

(iii) The expenditure on old or new shares should not be included in final expenditure because it is only a transfer of wealth, which has not affected production at all.

(iv) Only gross investment should be included in total expenditure. Gross investment also includes expenditure on depreciation.

(v) Factor income (property income, labour income, interest, rent, wages) received by domestic residents from foreign countries should be included in exports, Similarly, factor income paid by domestic territory to foreign residents should be included in imports.

Question 19.
Given nominal income, how can we find real income? Explain. (C.B.S.E. 2018)
Answer:
Real income is the value of current income at base year prices. Nominal income, on the other hand, is the value of income or output at current year prices. Given nominal income, real income can be calculated by taking the ratio of nominal income to the price index and multiplying the result by 100.
That is \( \text { Real Income }=\frac{\text { Nominal Incóme }}{\text { Price Index }} \times 100\)

Question 20.
“Gross Domestic Product (GDP) does not give us a clear indication of economic welfare of a country.” Defend or refute the given statement with valid reason. (C.B.S.E. 2019)
Answer:
The given statement is defended as GDP may not take into account:
(a) Non-monetary Exchanges: The value of these activities in an economy are not evaluated in monetary terms. For example, sen/ices of a housewife such as cooking, gardening, etc. are not included in GDP due to non-availability of data. However, such activities do influence the economic welfare.

(b) Externalities: It refers to the benefits or harms of an activity caused by a firm or an individual for which they are not paid or penalised. Externalities can be positive or negative.

(c) Distribution of GDP: It is possible that with rise in GDP, inequalities in distribution of income may also increase. That is, the gap between the rich and poor increases. GDP does not take into account changes in inequalities in the distribution of income.

Question 21.
“Higher Gross Domestic Product (GDP) means greater per capita availability of goods in the economy.” Do you agree with the given statement? Give valid reason in support of your answer. (C.B.S.E 2019)
Answer:
The given statement is not true. Higher Gross Domestic Product (GDP) does not necessarily mean greater per capita availability of goods in the economy. The level of economic welfare may not rise if with an increase in the level of Gross Domestic Product (GDP), the distribution of GDP becomes more unequal.

Since only a few people benefit from the increase in the level of income, rich are becoming richer and poor are becoming poorer. If GDP growth increases the gap between rich and poor, then it cannot be treated as an index of welfare for a country. Moreover, if the population growth rate is more than the rate of growth of GDP, the per capita availability of goods and services will actually decline.
Or
Explain the meaning of Real Gross Domestic Product and Nominal Gross Domestic Product, using a numerical example. (C.B.S.E 2019)
Answer:
Real GDP is the value of current income at base year prices. Nominal GDP, on the other hand, is the value
of income or output at current year prices. Given nominal income, real income can be calculated as:
\(\text { Real GDP }=\frac{\text { Nominal GDP }}{\text { Price Index }} \times 100\)

Suppose in the year 2010, a country produced 100 units of bread and the price was ₹ 10 per bread. So, the GDP at current price or Nominal GDP was 100 x ₹ 10 = ₹ 1,000.
In 201 I, the same country produced 10 units at ₹ 15 per bread. Therefore, the nominal GDP in 201 I was 10 x ₹ 15 = ₹ 1,650. However, Real GDP in 2011 calculated at the base year price will be I 10 x ₹10 = ₹1, 100.

Question 22.
Distinguish between ‘real’ gross domestic product and ‘nominal’ gross domestic product. Which of these is a better index of welfare of the people and why? (C.B.S.E Outside Delhi 2013)
Answer:
Following are the points of distinction between real and nominal Gross Domestic Product (GDP):

S.No.	Real GDP	Nominal GDP
1.	Real GDP is the value of GDP at constant prices.	Nominal GDP is the value of GDP at current prices.
2.	Real GDP measures the value of output economy, adjusted for price changes,	Nominal GDP is the market; or money value of all final goods and sen/ices produced in a country during a year.
3.	Real GDP includes factor services provided by households, and, final goods and services provided by the firms,	Nominal GDP includes factor payments made by the firms for production resources and the payments made by the households for goods and services.

Real GDP offers a better perspective than nominal GDP when tracking economic output over a period of time. Real GDP increases only when there is an increase in the production of goods and services.

As a result, change in income and employment can be estimated, However, since nominal GDP is valued at current price, it can increase even if there is no change in the production of goods and service. It neglects the impact of inflation on production.

Question 23.
Explain ‘non-morietary exchanges’ as a limitation of using GDP as an index of welfare of a country. (C.B.S.E. 2017)
Answer:
GDP does not take into account those tr^nsidtidfts that are not expressed in monetary terms. This is a major limitation of GDP as an index of welfare of a country as these are many transactions which although are non-monetary in nature but add To the growth and development of the nation. For example, work done by a social worker or a homemaker, Here, a-homemaker adds to the welfare of the family by keeping them healthy, which in turn-adds to the welfare of the country.

However as such transactions are non-monetary in nature, these are not included while calculating the domestic income. In LDCs, there are various non-monetary: exchanges, particularly in the rural areas and household sector. Consequently, such transactions remain outside the domain of GNP leading to underestimation of the value of GNP. Thus GNP cannot be regarded as an index of economic welfare, as it ignores the household and the volunteer sector

National Income Accounting Important Extra Questions Long Answer Type

Question 1.
Distinguish between domestic product and national product giving suitable examples in support of your answer.
Answer:
Domestic product is defined as the market value of all the final goods and services produced by the factors of production located in the country during a period of one year.

On the other hand, national product is the market value of all the final goods and services produced by the factors of production located in the country during a period of one year plus Net Factor income from Abroad (NFIA). NFIA is the difference between the incomes of residents for factor services to the rest of the world and payments to the factor services of non-residents in the domestic territory during a period of one year,

National Product = Domestic Product + NFIA
Example: If the domestic product is ₹ 5,000 and Net Factor Income from Abroad is ₹ 100, then theNational product will be:
National Product = ₹ 5000 +₹ 100 = ₹ 5100

Question 2.
Will the following be included in domestic factor income of India? Give reasons for your answer.
(i) Profits earned by a foreign bank from its branches in India
(ii) Scholarships given by Government of India
(iii) Profits earned by a resident of India from his company in Singapore
(iv) Salaries received by Indians working in American Embassy in India
Answer:
(i) Profits earned by a foreign bank from its branches in India will not be included in domestic factor income of India because it is the factor income of a foreign country or it is the income of non resident in India.

(ii) Scholarships given by the government of India will not be included in domestic factor income because it is a transfer payment and does not contribute to the flow of goods and services.

(iii) Profits earned by a resident of India from his company in Singapore will not be included in domestic factor income of India because it is the income of the resident earned abroad.

(iv) Salaries received by Indians working in American Embassy in India will be included in domestic factor income of India because it is the income of the normal residents of India, earned within the domestic territory of India.

Question 3.
Explain the expenditure method of estimating National Income. (C.B.S.E. 2007)
Answer:
Expenditure method of estimating National Income calculates the sum total of the expenditure by all the .final users: of goods and sendees plus addition to the stock with the producers and distributors. According to this method, expenditures on consumption and investment goods and government expenditures are aggregated as follows:

(i) Consumption Expenditure (C): Consumption expenditure includes expenditure on all goods and services produced and sold to the final consumer during the year.

(ii) Investment Expenditure (I): Investment is the use of today’s resources to expand tomorrow’s production or consumption. Investment expenditure is expenditure incurred on by business firms on:
(a) New plants;
(b) Adding to the stock of inventories; and
(c) Newly constructed houses

(iii) Government Expenditure (G): Government expenditure includes all government expenditure on currently produced goods and services but excludes transfer payments while computing national income.

(iv) Net Exports (X – M): Net exports are defined as total exports minus total imports.
Under expenditure method, National Income is calculated by summing up the final consumption expenditure, expenditure by business on plants, government spending and net exports.
National Income = C + I + G + (X-M)

Question 4.
What is the problem of double counting? How can this problem be avoided?
Answer:
Double counting means estimating the value of goods and services more than once. This problem takes place when the output of all the producers is added up without considering the fact that output of one producer may be the input for the other producer. The problem of double counting should be avoided because it overestimates the national income.

To get rid of the problem of double counting, the value added method is used. Value added method estimates the contribution of each individual firm at different stages of production. It is assumed that every individual firm adds to the value of the product which it purchases from some other firm as intermediary’ goods. When we sum the value added by each individual firm at different stages of production, we attain the National Income without double counting.

The estimation of value added by an individual firm can be explained with the help of an example. Suppose there are four types of firms: farmer, thread manufacturer, cloth manufacturer and readymade garment manufacturer. Their value of output, intermediate consumption and value added are displayed in the table below:

(1) Stage of Production	(2) Name of the Firm	(3) Type of Output	(4) Value of Intermediary Good (in ₹)	(5) Value of Output (in ₹)	(6) (5) – (4) Gross Value Added (in ₹)
1	Farmer	Cotton	…….	5,000	5,000
II	Thread Manufacturer	Thread	5,000	6,000	1,000
III	Cloth Mill	Cloth	6,000	6,800	800
IV	Garment Manufacturer	Shirt.	6,800	8,000	1,200
	Total		17,800	25,800	8,000

Thus, the Gross Value Added by a Firm is the difference between the value of output and the value of intermediate consumption.

Question 5.
Giving reason explain how should the following be treated in estimating Gross Domestic Product at Market Price?
(i) Fees to a mechanic paid by a firm
(ii) Interest paid by an individual on a car loan taken from bank
(iii) Expenditure on purchasing a car for use by a firm (C.B.S.E 2014)
Answer:
(i) Fees to a mechanic by a firm will be included while estimating the GDPMP because the fee is being paid in return for the service provided by the mechanic.

(ii) Interest paid by an individual on a car loan taken from a bank will be included while estimating GDP_Mp because it is an income for the lending bank.

(iii) Expenditure on purchasing a car for use by a firm will be included while estimating GDP_Mp because the car is purchased by the firm for final use.

National Income Accounting Important Extra Questions HOTS

Question 1.
Are the following stocks or flows?
(i) Investment
(ii) Monetary expenditure
(iii) A hundred Rupee Note
(iv) A family’s consumption of salt
(iv) Services of a tutor
(vi) Production of cement
(vii) Machinery of a sugar mill.
Answer:
Flow is an economic variable that is measured over a specific period of time. Investment, monetary expenditure, a family’s consumption of salt, services of a tutor and production. Cement are flow concepts. Stock is an economic variable that is measured at a specific point of time. A hundred rupee note and machinery of a sugar mill are stock concepts.

Question 2.
Export receipts are not a part of net factor income from abroad. Why?
Answer:
Export receipts are not a part of net factor income from abroad because:
(i) Exports refer to the purchase of domestically produced goods by the rest of the world. Goods produced within the domestic territory of a country are to be treated as a part of GDP.

(ii) Export receipts refer to revenue of the firms from the sale of its output. These are not the receipts of factor incomes from abroad, which are to be in the form or rent, interest, profit and wages.

Here we are providing Class 12 Political Science Important Extra Questions and Answers Chapter 3 Politics of Planned Development. Political Science Class 12 Important Questions are the best resource for students which helps in class 12 board exams.

Class 12 Political Science Chapter 3 Important Extra Questions Politics of Planned Development

Politics of Planned Development Important Extra Questions Very Short Answer Type

Question 1.
Which are the two models of development? Which model of development was adopted by India? (C.B.S.E. 2013)
Answer:
The two models of development are liberal- capitalist model and the socialist model. The Socialist model was adopted by India.

Question 2.
Differentiate between the capitalist and the socialist models of development. (C.B.S.E. 2014)
Answer:
The difference between the capitalist and the socialist models of development are as follows:

1. The capitalist model believes in open competition in the market, while the socialist model emphasizes state control over the production and distribution system.
2. The capitalist model does not believe in granting permission or Licence System, while in the socialist model, permission or license is granted to the factory owner.

Question 3.
Mention any two merits of the Green Revolution. (Imp.) (C.B.S.E. 2013)
Answer:

1. The major achievement of the Green Revolution was to boost the production of major cereals viz. wheat and rice.
2. As a result of the Green Revolution, the crop pattern in India has undergone significant changes.

Question 4.
How many Five Year Plan has been completed so far?
Answer:
12 Five Year Plan has been completed so far. The term of the 12th Five Year Plan was from April 2012 to March 2017.

Politics of Planned Development Important Extra Questions Very Short Answer Type (2 Marks)

Question 1.
What is meant by planned develop¬ment? (Sample Paper)
Answer:
Planned development means to develop a design or plan for development.

Question 2.
Mention the main objective of the Second Five Year Plan. (Imp.) (Sample Paper, C.B.S.E. 2012 Outside Delhi)
Answer:
The main objective of the Second Five Year Plan was to enhance the growth of Industrial development.

Question 3.
Who was P.C. Mahalanobis? (Imp.) (C.B.S.E. 2009)
Or
What was significant about P.C. Mahalanobis? (C.B.S.E 2013)
Answer:
The second five-year plan was drafted by a team of economists and planners under the leadership of P.C. Mahalanobis.

Question 4.
Who was popularly known as the ‘Milkman of India’? (C.B.S.E. 2013)
Answer:
Verghese Kurien.

Question 5.
What was the ‘Bombay Plan’? (C.B.S.E. 2013)
Answer:
The ‘Bombay Plan’ was a joint proposal of big industrialists (1944) for setting up a planned economy in the country.

Question 6.
What is meant by Decentralised Planning? (Imp.) (C.B.S.E. 2012, 2014)
Answer:
Decentralized planning meant planning which is approachable by the common man. It involved people directly in the developmental activities through voluntary citizen’s organizations.

Question 7.
Differentiate between the main objectives of the First and the Second Five Year Plans.
Answer:
There was a big debate whether more importance should be given to Industries or Agriculture. The First Five-Year Plan stressed on development of agriculture while the Second Five- Year Plan stressed heavy industries.

Question 8.
What is meant by geopolitics? (C.B.S.E. 2012)
Answer:
Geo-politics means politics of land territory. According to G.N. Singh, “A science dealing with the influence exercised by physical geography in determining conditions of political life and relation between state.” According to Houshofer, “Geopolitics demonstrates the dependence of all political development on the permanent reality of the soil.”

Question 9.
How was Kerla’s plan based on decentralized planning? (C.B.S.E. Sample Q.P. 2017)
Answer:
Kerala’s plan was based on decentralized planning because peoples directly involved in development activities through voluntary citizen organizations. The officials took the initiative to involve people in making plans at the Panchayat, block, and district level.

Question 10.
Why does development have different meanings for different sections of the people? (C.B.S.E. 2017)
Answer:
Different sections of the people have different meanings of development. For example, the iron or resources lie in some of the most underdeveloped and pre-dominantly tribal districts of the Orissa state. The state government passed the Memorandum of Understanding (MoU) for the development and global demand for steel. The tribal people fear that the setting up of industries would cause displacement from their homes and livelihood. They were also having the fear that mining and industry would pollute the environment. So, they protested and demanded the cancellation of the agreement.

Choose the correct answer :

Question 11.
Who said, “Planning is a way of organizing and utilizing resources to maximum advantage in terms of defined social ends”?
(a) K.T. Shati
(b) Planning Commission of India
(c) Dr. Rajinder Prashad
(d) None of these.
Answer:
(b) Planning Commission of India.

Question 12.
In India, planning was conceived as the main instrument of:
(a) Political development
(b) Cultural development
(c) Social development
(d) Socio-economic development.
Answer:
(d) Socio-economic development.

Question 13.
How many plans have been completed so far in India?
(a) Twelve
(b) Six
(c) Eight
(d) Four.
Answer:
(a) Twelve.

Question 14.
The Planning Commission in India was set up in :
(a) 1953
(b) 1957
(c) 1960
(d) 1950.
Answer:
(d) 1950.

Question 15.
The Chairman of the National Development Council is :
(a) President of India
(b) Finance Minister of India
(c) Prime Minister of India
(d) Chief Minister of U.P.
Answer:
(c) Prime Minister of India.

Politics of Planned Development Important Extra Questions Short Answer Type

Question 1.
Critically examine the major outcomes of the Indian model of a mixed economy. (Imp.) (C.B.S.E. 2016)
Answer:

1. The foundations of India’s future economic growth were laid.
2. Mega dams like Bhakhra-Nangal and Hirakund for irrigation and power generation were undertaken.
3. Abolition of the colonial system of Zamindari.
4. The tenants who worked on someone else’s land were given greater legal security against eviction.

Question 2.
Describe the strategy adopted by the Government of India to promote the Green Revolution. (C.B.S.E. 2015)
Answer:
In the 1960s, India was facing a food crisis due to many reasons. India was dependent on the U.S.A. for food which was putting many limitations on India’s policies. Indian Government decided to make India self-sufficient in food. Hence the government adopted a new strategy for agriculture in order to increase food production. Since the mid-1960s, the traditional agricultural practices were gradually replaced by modern technology.

The use of high-yielding variety seeds and the increased use of fertilizers and irrigation are simply called Green Revolution or modern agricultural technology. As a result of the Green Revolution, the area under improved seeds has gone up from about 15 million hectares during 1970-71 to nearly 75 million hectares in 1995-96. The new varieties are of a short term duration and consequently, instead of growing one crop, two crops and sometimes even three crops are grown.

Question 3.
Write a note on the mixed economy.
Answer:
The economy is generally considered of two types. One is a capitalist economy and the other is a socialist economy. A mixed economy is based on the co-existence of these two types of economy.

In most of the poor countries of the world, a mixed economy prevails. A mixed economy is an economy where there is public and private ownership of the means of production. Production is undertaken for both welfare and profit motive. Production in the private sector is a for-profit motive while in the public sector, it is for a welfare motive. Thus, the pattern of mixed economy is the co-existence of public and private sector units.

Question 4.
Examine the major outcomes of the Green Revolution. (C.B.S.E. Sample Q.P. 2017)
Or
Evaluate any four benefits of the ‘Green Revolution’. (C.B.S.E. 2018)
Answer:

1. The major achievement of the Green Revolution was to boost the production of major cereals viz wheat and rice.
2. As a result of the Green Revolution, the crop pattern in India has undergone significant changes.
3. The green revolution largely increased the growth of the local manufacturing sector which created new jobs and contributed to the country’s GDP.
4. India became self-sufficient in food and India was in a position to pay back all loans it had taken from the World Bank for the purpose of the Green Revolution.

Question 5.
List any two merits and two demerits of the Green Revolution. (Imp.) (C.B.S.E. 2014)
Or
Explain any two merits and two demerits each of the Green Revolution. (C.B.S.E. 2015)
Answer:
Merits of Green Revolution

1. The major achievement of the Green Revolution was to boost the production of major cereals viz wheat and rice.
2. As a result of the Green Revolution, the crop pattern in India has undergone significant changes.
3. The green revolution largely increased the growth of the local manufacturing sector which created new jobs and contributed to the country’s GDP.
4. India became self-sufficient in food and India was in a position to pay back all loans it had taken from the World Bank for the purpose of the Green Revolution.

Demerits of Green Revolution

1. Green Revolution had widened the gap between poor and small farmers and rich landlords.
2. Green Revolution has proved beneficial to the medium category peasants because they can receive the advantage of mediation between small farmers and rich landlords.

Question 6. State any two differences between the First Five Year Plan and the Second Five Year Plan. (C.B.S.E. 2013)
Answer:

1. In the First Five Year Plan, priority was given to the development of agriculture. The target of increased production of foodgrains, jute, and cotton was mainly achieved by bringing more land under cultivation. But in the Second Five Year Plan (1956-61), the top priority was accorded to the setting up of ‘Socialistic Pattern of Society’ on the basis of Industrial Policy statement 1956. In the Second Plan, the major thrust was to accelerate the process of industrialization by laying emphasis on basic and heavy industries.
2. The success of the First Five Year Plan was primarily due to a good harvest in the last two years of the plan. During the Second Five Year Plan, prices increased by 30% against a decline of 13% during the First Plan.

Politics of Planned Development Important Extra Questions Long Answer Type

Question 1.
Describe briefly the composition and four functions of the Planning Commission of India. (Imp.) (C.B.S.E. 2011, Outside Delhi)
Or
How was the Planning Commission of India set up? Mention its scope of work. (C.B.S.E. 2010, Outside Delhi)
Answer:
The Planning Commission at the center is the apex body in the planning machinery of the country. The Planning Commission was set up in March 1950 by a resolution of the Government of India. In 1950, Planning Commission was set up under the chairmanship of Prime Minister Pt. Jawaharlal Nehru.

Organization of Planning Commission: The composition of the Planning Commission has kept on changing according to the requirements of the time and whims of the government. The first Planning Commission consisted of a Chairman, a Deputy Chairman and five members. The Prime Minister is the Chairman and the Planning Minister is the Deputy Chairman. First Planning Commission was essentially composed of politicians.

Later on, Pt. Nehru added certain members from the public such as administrators, economists, and technical experts. Thug, the Planning Commission came to combine the political and non-political men. In addition to Chairman and Deputy Chairman, there are ten to twelve other members. Among them, there are five to six ministers, e.g., Minister for Human Resources Development, Finance Minister, Home Minister, Minister of Agriculture, and Minister of State for Planning. Besides, there are a few more members.

The Commission is divided into three major parts:
(a) Programme Advisors
(b) General Secretariat and
(c) Technical Division.

Functions of the Planning Commission

The resolution which created the Planning Commission mentioned the following functions of the Planning Commission :

1. Assessment of Country’s Resources. To assess the material, capital, and human resources of the country, including technical personnel, and to investigate the possibilities of augmenting such of those resources as are found to be deficient in relation to the nation’s requirements.
2. Formulation of Plans. To formulate a plan for the most effective and balanced utilization of the country’s resources.
3. Determine Priorities. To define the stages of the Plan and propose the allocation of resources on the determination of priorities. The Ninth Plan has given priorities to the power sector, transport, and communications.
4. To indicate the factors which are tending to retard economic development and determine the conditions in view of the current social and political situation should be established for the successful execution of the plan.
5. To suggest machinery for securing the successful implementation of each stage of the plan.
6. To appraise from time to time the progress made in the execution of each stage of the plan and to recommend necessary adjustments in policy and measures as may be necessary for the light of such appraisal.
7. To make such interim recommendations on the basis of the prevailing economic conditions, current policies, etc., as may appear to be appropriate.
8. To examine such specific problems as may be referred to it for advice by the Central and State Governments.

Besides the above-mentioned functions, another most important task of the Planning Commission is that of formulating the plans for development and assessment of their performance. Originally, Planning Commission was set up as an expert advisory body only. But with the passage of time, the Planning Commission has built for itself a status of high prestige and commanding influence; In view of the enormous increase in the powers of the Planning Commission, it has come to be known as the Economic Cabinet.

In January 2015, NITI Aayog was established in place of the Planning Commission.

Question 2.
Elaborate any three arguments are given by the critics against the mixed model of the economy adopted by India. (C.B.S.E. 2019)
Answer:
Following are the arguments given by the critics against the mixed model of the economy adopted by India.

1. Critics argue that the planners have not provided sufficient space for the private sector to grow.
2. Enlarge public sector have their own interests as they invested more and they create hurdles for the private small sectors.
3. State policies also put restrictions on the export items and domestic market due to lesser competition do not have the incentive to improve their products. The state instead of helping the poor, help the private sector to make more profit and thus create a new ‘middle class’ with high salaries and perks.

Question 3.
Write a note on Niti Aayog.
Answer:
Niti Aayog with a new structure and focus on a policy is the replacement of 64 years old planning commission, which was seen as a vestige of the socialist era. The replacement of the Planning Commission with the new institution more relevant and responsive to the present economic needs and climate in the country had long been demanded and expected. Since 1990, the Government had been dismissive of the Planning Commission, because after the dismissal of licensed government this commission was working like an advisory-board only.

Former Prime minister Rajiv Gandhi had called the commission a bunch of jokers. Even Manmohan Singh and former planning commission Deputy Chairman like K.C. Pant tried some attempts to explore some changes. Former Centre-minister, Kamal Nath named this commission as ‘ArmChair Advisor’ and Parking plot for bureaucrats. Arun Maria, a member of the Planning Commission who headed the Boston Consulting Group (BCG) in India, recommended the changes in the structure, role function, and resources.

Narendra Modi, as the Chief-minister Gujrat had many times pointed the short-comings of the planning commission that is why in May 2014, Narendra Modi led the National Democratic Alliance government to announce the replacement of the 65 years old planning commission with a new institution called Niti Aayog. He called upon an important meeting of Chief-ministers in Delhi on 7 December 2014 and stressed upon greater participation of the state governments in policy-making stressing on India’s diversity and plurality, the Aayog will foster a spirit of co-operative federalism with the sole principle of developing a pro-people, pro-active and participative development agenda stressing on empowerment and equality.

Composition of Niti Aayog Niti Aayog-National Institution for transforming, India is composed to ensure greater participation of state governments in policy making-thus fostering co-operative federalism-and will be more attuned to the nation’s contemporary needs.

1. Chairperson- Prime-minister
2. Vice-Chair-person- Nominated by the prime- minister
3. Chief-Executive officer (C.E.O.) – nominated by prime-minister.
4. Governing Council-Chief ministers and Lt. Governors of Union Territories.
5. Regional Council (formed on a need basis)- Chief Ministers and Lt. Governors of Union-Territories
6. Full time-members- Maximum five-members.
7. Short term members- Two ex-officio-members
8. Ex-officio members-Four central ministers Special Invitees- Experts, specialists, practitioners with domain knowledge.

On January 5, 2015, the great economist Arvind Panagariya was appointed as Vice-chairman of the Niti Aayog and then Sindu Shree Khullar was appointed as the first CEO of the Niti Aayog. On December 29, 2015. Sh. Amitabh Kant appointed as CEO of Niti Aayog after the retirement of Sindushree Khullar on 5th August 2017. Sh Rajiv Kumar appointed as vice-chairman of Niti Aayog.

Departments

• It works like an assembly of interstates problems and their relations etc.
• It checks and plans long-term plans.
• Thirdly, it deals with direct benefit, transfer, and UIDAI.

Aims of Objectives: The objectives of the new body is to evolve a shared vision of national development priorities sectors and strategies. Being an incubator of ideas for effective governance would be the core mission of NITI Aayog. following are the objectives of the new national agenda’.

1. Recommend strategical and technical advice on elements of policy and economic matters.
2. Develop a mechanism for village level plans and aggregate these progressively at higher levels of government.
3. Serve as a ‘think-tank’ a directional and policy dynamo for the government and will provide suggestions for the economy including the private sector.
4. Create a knowledge, innovation, and entrepreneurial support system for national and international experts and other partners.
5. Offer a platform for the country’s development agendas.
6. Focus on the technology of implementation of programs and initiatives.

Working: National Institution for Transforming India is-

1. To evolve a shared vision of national development priorities sectors and strategies with the active involvement of states in the light of national objectives.
2. To foster co-operative feudalism through structured support initiatives and mechanisms with the states on a continuous basis, recognizing that strong states make a strong nation.
3. To develop mechanisms to formulate credible plans at the village level and aggregate these progressively at the higher levels of government.
4. To ensure, on areas that are specifically referred to it, that the interest of national security are incorporated in economic strategy and policy.
5. To pay special attention to the sections of our society that may be at risk of benefiting adequately from economic progress.

Niti Aayog will work under the supervision of chief-ministers and specialists in different fields. Aayog will ensure greater participation of state- governments in policy-making thus fostering co-operative federalism-and will be more attuned to the nation’s contemporary needs.

The first meeting of Niti-Aayog took place on 6th Feb 2015 and was attended by prime-minister, Narendra Modi, finance minister Arun Jaitly and vice-chairman Sh Arvind Panagariya. Other full-time members V.K. Saraswat, Nitin Gadkari, Thawar Chand Gehlot, G.N. Vajpayee, Rajiv Kumar, Rajiv Lal, R. Vaidyanathan Parath Sarthi Soam, Subeer Gokarn, Mukesh Burani, etc. also attended the meeting.

The second meeting of Niti Aayog took place on 15th July 2015, in which PM desired that center and states must move together to end poverty, states units should be the focus of all developments as a part of team India. The council held consultations on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act. The Prime-minister welcomed and thanked the chief minister for their participation and suggestions for the development of rural areas and greater prosperity for the farmers. He also asked for suggestions for the success of Betti Bachao, Betti Paradao Plan, Smartcity, Digital India, Skill India, Make in India Swach Bharat, etc. plannings.

The opposition criticized the decision to establish NITI Aayog calling it a gin mickey and renamed it as Anati ordurniti Aayog. However, the working of a new institution can be judged only after it has functioned for a sufficiently long time. The efficiency of the Niti Aayog will depend crucially on the quality of experts and how they are allowed to work, Also-the success of the ‘Niti Aayog’ lies in restoring the balance between the technical and political (federal) drivers of the planning process.

It is much too early to think on talk in terms of administrative capacities unless, it trickles down, achache din’ will hardly be felt by the common man. Niyat and Niti’ are inextricably intertwined, the best that can be said for the Aayog is that we should give it sufficient’ time to reveal itself and the out¬come contingent on it. The Aayog’s functioning could make or break the economic development of India in the future.

Question 4.
What was Green Revolution? Examine any two positives and two negative consequences of the Green Revolution. (Imp.)
Or
What was the Green Revolution? Which areas did it affect the most? Mention two positive and two negative consequences of the Green Revolution. (Sample Paper)
Answer:
In the 1960s, India was facing a food crisis due to many reasons. India was dependent on the U.S.A. for food which was putting many limitations on India’s policies. Indian Government decided to make India self-sufficient in food. Hence the government adopted a new strategy for agriculture in order to increase food production. Since the mid-1960s, the traditional agricultural practices were gradually replaced by modern technology.

The use of high-yielding variety seeds and the increased use of fertilizers and irrigation are simply called Green Revolution or modern agricultural technology. As a result of the Green Revolution, the area under improved seeds has gone up from about 15 million hectares during 1970-71 to nearly 75 million hectares in 1995-96. The new varieties are of a short term duration and consequently, instead of growing one crop, two crops and sometimes even three crops are grown.

The major benefits of the Green Revolution were experienced mainly in northern and northwestern India. Unprecedented enthusiasm has prevailed among farmers in Punjab, Haryana, Delhi, Rajasthan, and Western U.P. for the new wheat variety seeds and a situation developed in which the demand for seeds by farmers exceeded the supply.

Economic Results/Positive Consequences of the Green Revolution.

1. The major achievement of the Green Revolution was to boost the production of major cereals viz wheat and rice.
2. As a result of the Green Revolution, the crop pattern in India has undergone significant changes.
3. The green revolution largely increased the growth of the local manufacturing sector which created new jobs and contributed to the country’s GDP.
4. India became self-sufficient in food and India was in a position to pay back all loans it had taken from the World Bank for the purpose of the Green Revolution.
5. Green Revolution has helped the growth of capitalist farming in India and has led to the concentration of wealth in the hands of the top 10 percent of the rural population.

Political Results of the Green Revolution.

1. India became self-sufficient in food and thus India’s prestige increased in the world, especially in the third world.
2. Green Revolution was a big factor in making Smt. Indira Gandhi and Congress Party more powerful.

Two Negative Consequences of Green Revolution
(i) Green Revolution led to the concentration of wealth in the hands of the top 10 percent of the rural population. The green revolution had widened the gap between poor and small farmers and rich landlords.
(ii) Green Revolution has proved beneficial to the medium category peasants because they could receive the advantage of mediation between small farmers and rich landlords.

Question 5.
Assess any six outcomes of planning in India. (C.B.S.E. Sample Paper 2018)
Or
Assess the outcome of the early phase of planned development in India. (C.B.S.E. 2019)
Or
Describe any three outcomes of early initiatives for planned development in India. (C.B.S.E. 2019)
Answer:
After independence, India adopted economic planning for the development of the people of India. In fact, there was a consensus on the planned development.

For planned development, Planning Commission was set up in March 1950 by a simple resolution of the Government of India. The Planning Commission opted for Five Year Plans. The First Five Year Plan was started in 1951 with the main emphasis on agriculture including investment in Dam and irrigations. The Second Five Year Plan (1956-1961) stressed mainly heavy industries. Rapid industrialization was the main aim of the Second Five Year Plan. Following are the outcomes of planning in India:

1. Through planning the foundations of India is future economic growth were laid.
2. Some of the heavy industries were Started.
3. Planning enhances the economic growth of the country.
4. Land Reforms lake place through planning.
5. Through planning the growth of manufacturing was increasing.
6. India becomes self-sufficient in food.

im-1

Question 6.
Look at the above clipping of the Hindustan Times. You will agree that the agricultural conditions of India went from bad to worse in the 1960s. In the light of this, answer the following questions: (Sample Paper)
(a) How did India solve its problem of food shortage?
Answer:
India solved its problem of food shortage through Green Revolution. Agriculture was modernized and a good variety of seeds were used.

(b) Is India now sufficient in food production? State the reason for your answers.
Answer:
India is now almost self-sufficient in food production.

Question 7.
Study the cartoon given below carefully and answer the questions that follow: (C.B.S.E 2017)

im-2

(i) Identify and name the person who is holding the balancing beam between the public sector and the private sector.
Answer:
The person who is holding the balancing beam between the public sector and the private sector is India’s first prime-minister Pt. Jawahar Lai Nehru.

(ii) Why has a big tilt towards the public sector been shown in the cartoon?
Answer:
A big tilt towards the public sector has been shown in the cartoon because at that time most leaders were in favor of the public sector.

(iii) How did the over-emphasis on the public sector adversely affect the Indian economy?
Answer:
Due to lack of competition, the over-emphasis on the public sector adversely affect the Indian economy.

Note: The following questions are for the Visually Impaired Candidates only, in lieu of the above questions

(i) Distinguish between the public sector and the private sector with the help of at least one example each.
Answer:
In the public sector, the government is holding control over it e.g. Railway. Whereas in the private sector the real control lies with a private person or company and the example Reliance company.

(ii) Keeping in mind the Indian context, which type of economy would you prefer and why?
Answer:
Keeping in mind the Indian context, a mixed type of economy—public as well as private, is the most beneficial type of economy, through which both public and private sectors are benefited.

(iii) Globalisation has promoted which type of economic sector?
Answer:
Globalization has promoted the private type of economic sector.

Question 8.
Read the passage given below carefully and answer the questions that follow: (C.B.S.E. 2019)

India did not follow any of the two known paths to development Elements from both these models were taken and mixed together in India. That is why the Indian economy was described as a ‘mixed economy’.
(i) Name the two models/paths to development.
Answer:
Two models of the path to development are
(a) Capitalist Model
(b) Socialist model

(ii) Why was either of the two models not fully accepted by India? Give at least one major reason for each.
Answer:
Both the models are not fully accepted by India because in the capitalist model the development is entirely left to the private sector, whereas in the socialist model production is controlled by the state and private property is abolished. In India elements from both these models are taken and mixed and that is why it is called ‘mixed economy’.

(iii) Highlight any two features of India’s mixed economy based on the above said, two models.
Answer:
(a) For the mixed economy in India, first of all, the government nationalized the Banking system and also abolished the ‘privy purse’.
(b) India encourage industrialization for the economic growth of the country.

Politics of Planned Development Important Extra Questions HOTS

Question 1.
What is Planning?
Answer:
“Planning is,” defined by Terry, “selecting and relating of facts and the making and using assumptions regarding the future in visualization and formulation of proposed activities necessary to achieve the desired results.” Thus, Planning means to act with purpose or to make efforts to achieve pre-conceived objectives and goals. It implies co-ordination on means and ends.

Question 2.
Why is Planning Commission called an extra-constitutional body?
Answer:
The Planning Commission of India is not established by an Act of Parliament nor as part of a constitutional provision. It is established by a cabinet resolution in March 1950. That is why it is sometimes called an extra-constitutional body, which in theory is an advisory committee of the cabinet.

Question 3.
Name two main advantages of having Economic Planning. (D.B. 1991)
Answer:

1. Economic Planning awakens the feelings of national interests among the people.
2. Full exploitation of all resources is possible only in Economic Planning.
3. In Economic, Planning attempts are made to achieve the target within a definite period.

Question 4.
How many Five Year Plans have been completed so far?
Answer:
In India (till now) 12th Five Year Plans have been completed. The time period of the First Five Year Plan was 1951 to 1956. 2012 to 2017 was the time period of the 12th Five Year Plan.

Question 5.
In which year Planning Commission was established and who was the first chairman of the Planning Commission?
Answer:
The Planning Commission was set up in March 1950 by a resolution of the Government of India. Prime Minister Jawaharlal Nehru was the first Chairman of the Planning Commission.

Here we are providing Class 12 Economics Important Extra Questions and Answers Chapter 4 Determination of Income and Employment. Economics Class 12 Important Questions are the best resource for students which helps in class 12 board exams.

Class 12 Economics Chapter 4 Important Extra Questions Determination of Income and Employment

Determination of Income and Employment Important Extra Questions Very Short Answer Type

Question 1.
Define Aggregate Demand. (C.B.S.E. 2010,2014)
Or
What is ‘Aggregate Demand’ in macroeconomics? (C.B.S.E Outside Delhi 2015)
Answer:
Aggregate Demand (AD) refers to the total expenditure on consumption and investment by different sectors of the economy.

Question 2.
How would you show Aggregate Demand in an equation?
Answer:
Aggregate Demand can be written in the form of the following equation:
AD = C + I + G + (X – M) where
C – Private Final Expenditure
I = Investment Expenditure
G = Government Expenditure
X – M = Net Exports (Exports – Imports)

Question 3.
Define Aggregate Supply.
Or
What is ‘Aggregate Supply’ in macroeconomics? (C.B.S.E 2015)
Answer:
Aggregate Supply (AS) refers to the planned aggregate production by the producers during a period of one year. It is equal to the income generated.

Question 4.
How would you show Aggregate Supply in an equation?
Answer:
Aggregate Supply can be written in the form of the following equation:
AS = Y = C + S
where; C – Consumption Expenditure
S = Savings

Question 5.
What are the two main constituents of AD?
Answer:
The two main constituents of AD are:
(i) Consumption
(ii) Investment

Question 6.
What are the two constituents of AS?
Answer:
The two main constituents of AD are:
(i) Consumption
(ii) Saving

Question 7.
Why does consumption curve not start from the origin? (C.B.S.E 2018)
Answer:
Consumption curve does not start from zero because people consume even at zero level of income.

Question 8.
Define MPC. (C.B.S.E 2014,2017)
Answer:
Marginal Propensity to Consume (MPC) is the ratio of change in consumption to the change in income; It is the slope of the consumption function.

Question 9.
What do you understand by APC?
Answer:
Average Propensity to Consume (APC) is the ratio of total consumption (C) to total income (Y).
\(M P C=\frac{\Delta C}{\Delta Y}\)

Question 10.
What do you understand byAPC?
Answer:
Average Propensity to Consume (APC) is the ratio of total consumption (C) to total income (Y).
\(\mathrm{APC}=\frac{\mathrm{C}}{\mathrm{Y}}\)

Question 11.
How is Average Propensity to Consume measured?
Answer:
Average propensity to consume (APC) is measured as below:
\(\mathrm{APC}=\frac{\text { Consumption }}{\text { Income }}=\frac{C}{Y}\)

Question 12.
Define APS.
Answer:
Average Propensity to Save (APS) is the ratio of total saving to total income
\(\mathrm{MPS}=\frac{\Delta \mathrm{S}}{\Delta Y}\)

Question 13.
What do you understand by MPS?
Answer:
Marginal Propensity to Save (MPS) is the ratio of change in saving to change in income.
\(\mathrm{MPS}=\frac{\Delta \mathrm{S}}{\Delta Y}\)

Question 14.
State the relationship between MPS and MPC.
Answer:
The sum of Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS) is always equal to one. That is,
MPC + MPS = 1

Question 15.
State the relationship between APC and APS.
Answer:
The sum of Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one. That is, APC + APS = 1

Question 16.
What is consumption?
Answer:
Consumption refers to that part of income, which is spent by the households on the purchase of consumer goods and services.

Question 17.
What does a consumption function show?
Answer:
Consumption function shows the relationship between income and consumption.

Question 18.
Give the meaning of autonomous consumption.
Answer:
Autonomous consumption is the amount of consumption expenditure at zero level of income. It does not change with change in income.

Question 19.
Give the meaning of ex-ante savings. (C.B.S.E. 2010)
Answer:
Ex-ante savings refer to the level of savings, which is planned to be made by the households during a period of one year.

Question 20.
If planned savings are greater than planned investment what will be its effect on inventories?
Answer:
If planned savings are greater than planned investment, inventories will increase.

Question 21.
What are the two determinants of investment?
Answer:
The two determinants of investment are:
(i) Marginal Efficiency of Capital
(ii) Rate of interest

Question 22.
What is the main motive for investment in the private sector?
Answer:
Expected profitability is the main motive for investment in the private sector.

Question 23.
Define investment. (C.B.S.E. 2013 Comp.)
Answer:
Investment refers to purchase of new machines, new buildings and other capital goods that add to the existing stock of capital goods.

Question 24.
Give the meaning of ex-ante investment. (C.B.S.E 2010)
Answer:
Ex-ante investment refers to the investment, which is planned to be made by the firms during a period of one year.

Question 25.
If S exceeds I in an economy, what will be its effect on level of income?
Answer:
If S exceeds I in an economy then the level of income will decline.

Question 26.
If I exceeds S in an economy, what will be its effect on level of income?
Answer:
If I exceeds S in an economy then the level of income will increase.

Question 27.
Define Say’s law of markets.
Answer:
According to the Say’s law of markets, “Production is the source of demand.”

Question 28.
What is meant by full employment? (C.B.S.E Outside Delhi 2014)
Answer:
Full employment refers to a situation in which everyone who is willing to work at the existing wage rate gets work.

Question 29.
What is Keynes’s conception of full employment?
Answer:
According to Keynes, full employment exists when the Aggregate Supply function becomes perfectly inelastic in an economy.

Question 30.
How is full employment equilibrium determined?
Answer:
Full employment equilibrium is determined when Aggregate Demand function intersects the Aggregate Supply function on its perfectly inelastic part.

Question 31.
According to classical writers, what are the causes of involuntary unemployment?
Answer:
According to classical writers, involuntary unemployment appears in an economy due to wage rigidity, minimum wage laws and trade union activities.

Question 32.
What, according to Keynes, is the fundamental cause of involuntary unemployment?
Answer:
According to Keynes, the fundamental cause of involuntary unemployment in an economy is the deficient demand.

Question 33.
What is involuntary unemployment? (CBSE 2014,2017)
Answer:
The involuntary unemployment refers to a situation in which the workers are willing to work at the prevailing wage rates but the jobs are not available to them.

Question 34.
If MPC and MPS are equal, what is the value of the multiplier?
Answer:
The sum of MPC and MPS is always equal to I. That is,
MPC + MPS = I
When MPC = MPS, then the value of both of them will be:
\(M P C=M P S=\frac{1}{2}\)
The value of multiplier can be calculated as:
\(\begin{aligned}
K &=\frac{1}{M P S} \\
&=\frac{1}{\frac{1}{2}}=2
\end{aligned}\)
Thus, the value of the multiplier is 2.

Question 35.
What is investment multiplier?
Answer:
Investment multiplier (K) expresses the relationship between the final change in income and the initial change in investment. It is estimated as the ratio of change in income due to change in investment.

Question 36.
Whose value does \(\frac{1}{1-M P C}\) show?
Answer:
Investment Multiplier.
\(K=\frac{\Delta Y}{\Delta !}\)

Question 37.
Whose value does \(\frac{1}{\mathrm{MPS}}\) indicate?
Answer:
Investment multiplier.

Question 38.
What will be the value of multiplier, if MPS is 0.4?
Answer:
Investment multiplier \((K)=\frac{1}{M P S}\)
At MPS = 0.4,
\(K=\frac{1}{0.4}=\frac{10}{4}=2.5\)

Question 39.
What is the value of investment multiplier, if MPS = 0.8?
Answer:
Investment multiplier \((K)=\frac{1}{M P S}\)
At MPS = 0.8,
\(K=\frac{1}{0.8}=\frac{10}{8}=1.25\)

Question 40.
What will be the value of multiplier, if MPS = 0.5?
Answer:
Investment multiplier \((K)=\frac{1}{M P S}\)
At MPS = 0.5
\(K=\frac{1}{0.5}=\frac{10}{5}=2\)

Question 41.
What is value of multiplier, if MPC is 0.9?
Answer:
Investment Multiplier \((\mathrm{K})=\frac{1}{1-\mathrm{MPC}}\)
At MPC = 0.9,

Question 42.
What is the value of multiplier, if MPC is 3/4?
Answer:
Investment Multiplier \(K=\frac{1}{1-0.9}=\frac{1}{0.1}=10\)
\(\begin{aligned}
M P C &=\frac{3}{4}, K=\frac{1}{1-3 / 4} \\
&=\frac{1}{1 / 4}=4
\end{aligned}\)

Question 43.
What can be the minimum value of investment multiplier?
Answer:
The minimum value of investment multiplier can be one.

Question 44.
If investment multiplier is one, what will be the value of Marginal Propensity to Consume?
Answer:
When investment multiplier is one, then the value of Marginal Propensity of Consume will be zero.

Question 45.
What is deficient demand?
Answer:
Deficient demand refers to a situation in the economy in which Aggregate Demand is less than the Aggregate Supply (AD < AS) at the fell employment level.

Question 46.
What is ‘excess demand’ in macroeconomics? (C.B.S.E Outside Delhi 2014)
Answer:
Excess demand refers to a situation in the economy in which the Aggregate Demand is more than  the Aggregate Supply (AD > AS) at the fell employment level.

Question 47.
What is deflationary gap? (C.8.S.E Outside Delhi 2014)
Answer:
Deflationary gap refers to the excess of available supply of output over the anticipated expenditure at constant prices of base period.

Question 48.
Define inflationary gap.(C.B.S.E. Outside Delhi 2014)
Answer:
Inflationary gap refers to the excess of anticipated expenditure over the available supply of output at constant prices of base period.

Question 49.
How can the problems of excess and deficient demand be combated?
Answer:
The problems of excess and deficient demand may be combated through fiscal policy and monetary policy measures of the government.

Question 50.
What is meant by open market operations?
Answer:
Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market.

Question 51.
What is bank rate or discount rate?
Answer:
Bank rate is the minimum rate at which the central bank discounts the first class bills of exchange and provides credit to the commercial banks.

Question 52.
What do you mean by margin requirement?
Answer:
Margin requirement of loan is the minimum security price charged by the commercial bank for granting

Question 53.
Suggest one monetary measure to correct excess demand.
Answer:
Bank rate can be increased to correct excess demand.

Question 54.
Give one fiscal measure to correct excess demand.
Answer:
Decrease government expenditure on subsidies and transfer payments.

Question 55.
Write one monetary measure to correct deficient demand.
Answer:
Buying government securities from commercial banks and general public.

Question 56.
Suggest one fiscal measure to correct deficient demand.
Answer:
Increase government expenditure on public welfare, defense, administration, etc.

Determination of Income and Employment Important Extra Questions Short Answer Type

Question 1.
What is meant by Aggregate Demand ? State its component.
Or
State and discuss the components of Aggregate Demand in a two sector economy. (C.B.S.E 2019)
Answer:
Aggregate Demand (AD) refers to the total expenditure on consumption and investment by different sectors of the economy.
Aggregate Demand comprises of the following components:
(i) Private Consumption Expenditure (C): Household expenditure on goods and services during an accounting year is called consumption expenditure. It depends upon the level of income of the households.

(ii) Investment Expenditure (I): Investment expenditure is the expenditure on goods by private investors, which add to their capital stock. These goods include producer’s durable, equipment, new construction and change in inventories.

(iii) Government Expenditure (G): Government expenditure, both consumption and investment, on public goods such as opening of schools, construction of roads, maintain law and order, provide justice, etc.

(iv) Net Exports (X – M): Net exports is the difference between total imports and total exports. Note: For a two-sector economy, state and discuss only C & I.

Question 2.
In an economy Aggregate Demand is greater than Aggregate Supply. Explain the changes that will take place in this economy. (C.B.S.E. 2011 Comp.)
Answer:
Excess demand refers to a situation in which Aggregate Demand in the economy is greater than the Aggregate Supply (AD > AS) at full employment level. The problem of excess demand can be corrected by contractionary fiscal or monetary policy. In the diagram, the initial Aggregate Demand curve is AD.

Aggregate Supply (AS) is a vertical line at the full employment level of output (Y_F). With the initial government expenditure of G₁; the Aggregate Demand is OY while Aggregate Supply is OY_F. There is a situation of excess demand of EA. As government expenditure is decreased to G₂, AD curve shifts down until equilibrium is attained (AD = AS) at full employment level of output.

Thus, the problem of excess demand or inflationary gap can be corrected by decreasing  public expenditure. As government expenditure is decreased to G₂, AD curve shifts down until equilibrium is attained (AD = AS) at full employment level of output Thus, the problem of excess demand or inflationary gap can be corrected by decreasing public expenditure.

Question 3.
In an economy Aggregate Demand is less than Aggregate Supply. Explain the changes that will take place in this economy. (C.B.S.E Outside Delhi 2011 Comp.)
Answer:
Deficient demand refers to a situation in which Aggregate Demand in the economy is less than the Aggregate Supply (AD < AS) at full employment level. Deficient demand is also known as deflationary gap.

In the diagram, the initial Aggregate Demand curve is AD. Aggregate Supply (AS) is a vertical line at the full employment level of output (Y_F). With the initial government expenditure of G₁ the Aggregate Demand is OY while Aggregate Supply is OY_p. There is a situation of deficient demand of AE. As government expenditure is increased to G₂, AD curve shifts up until equilibrium

Question 4.
Discuss the working of the adjustment mechanism in the following situations:
(a) Aggregate demand is greater than Aggregate supply.
(b) Ex Ante Investments are lesser than Ex Ante Savings. (C.B.S.E 2019)
Answer:
(a) When Aggregate Demand is greater than Aggregate Supply, buyers are planning to buy more goods and services than what producers are planning to produce. It will lead to fall in planned inventory below the desired level. The producers, in turn, will produce more which will increase the aggregate supply till aggregate demand becomes equal to aggregate supply.

(b) Ex-ante investment are lesser than Ex-ante savings, meaning buyers are planning to buy lesser output as to what producer are planning to produce. It will lead to rise in planned inventory above the desired level. As a result, the producers will cut down production leading to a reduction of income till saving becomes equal to investment.

Question 5.
Distinguish between Average Propensity to Consume and Marginal Propensity to Consume. The value of which of these two can be greater than one and when?
Answer:
Average Propensity to Consume (APC) is the ratio of total consumption (C) to total income (Y).
\(\mathrm{APC}=\frac{C}{\mathrm{Y}}\)
Marginal Propensity to Consume (MPC) is the ratio of change in consumption to the change in income. It is the slope of the consumption function.
\(M P C=\frac{\Delta C}{\Delta Y}\)
The value of APC can be greater than one when current consumption exceeds current income.

Question 6.
Give the meaning of Marginal Propensity to Save and Average Propensity to Save. Can the value of Average Propensity to Save be negative? If yes, when?
Answer:
Marginal Propensity to Save (MPS) is the ratio of change in saving to change in income.
\(\mathrm{MPS}=\frac{\Delta \mathrm{S}}{\Delta Y}\)
Average Propensity to Save (APS) is the ratio of total saving to total income.
\(\mathrm{APS}=\frac{\mathrm{S}}{\mathrm{Y}}\)
APS can be negative in situations when saving is negative or when consumption is greater than income.

Question 7.
Distinguish between Average Propensity to Save and Marginal Propensity to Save.The value of which of these two can be negative and when?
Answer:
Average Propensity to Save (APS) is the ratio of total saving to total income.
\(\mathrm{APS}=\frac{\mathrm{S}}{\mathrm{Y}}\)
Marginal Propensity to Save (MPS) is the ratio of change in saving to change in income.
\(\mathrm{APS}=\frac{\mathrm{S}}{\mathrm{Y}}\)
The value of APS can be negative when saving is negative or when consumption is greater than income.

Question 8.
What is the relationship between Average Propensity to Consume and Average Propensity to Save? Can the value of average propensity to save be negative? If yes, when?
Answer:
Average Propensity to Consume (APC) is the ratio of total consumption (C) to total income (Y).
\(\mathrm{APC}=\frac{\mathrm{C}}{\mathrm{Y}}\)
Average Propensity to Save (APS) is the ratio of total saving to total income.
\(\mathrm{APS}=\frac{\mathrm{S}}{\mathrm{Y}}\)

Relationship between APC and APS
We know that, Y = C + S
Dividing both sides by Y, we get:
\(\frac{Y}{Y}=\frac{C}{Y}+\frac{S}{Y}\)

Substituting APC = \(\frac{C}{Y}\) and APS = \(\frac{S}{Y}\), we get:
APC + APS = 1
Thus, the sum of the APC and APS is always equal to one. This is because total income is either consumed or saved.
The value of APS can be negative when saving is negative or when consumption is greater than income.

Question 9.
Outline the steps taken in deriving saving curve from the consumption curve. Use diagram. (C.B.S.E. Outside Delhi 2017) (C.B.S.E. 2012, 14)
Answer:
Income is the sum of consumption and saving. The relationship among the three can be expressed as:
Y = C + S
Saving curve can be derived from the consumption curve. The derivation can be explained with the help of the given diagram. In the diagram, CC is the consumption curve and the 45° line represents income.

OC is autonomous consumption, that is, the amount of consumption at zero level of income (C > Y). This is equal to the amount of saving (OS) at zero level of income. The saving is negative and the saving curve is below the horizontal axis.

Income and CC curves intersect at OY* level of income (point E) implying that consumption is equal to income at E. It is called the break-even point. At this point, saving is zero.

Beyond OY* level of income, consumption is less than income (C < Y). Thus, saving is positive and the saving curve is above the horizontal axis. SS is the saving curve derived from consumption curve.

Question 10.
Outline the steps taken in deriving consumption curve from the saving curve. Use diagram.
Answer:
Income is the sum of consumption and saving. The relationship among the three can be expressed as:
Y = C + S

Consumption curve can be derived from the saving curve. The derivation can be explained with the help of the given diagram. In the given diagram, SS is the saving curve. OS represents negative saving and the saving curve is below the horizontal axis. When amount of saving is negative, consumption is greater than income (C > Y).

This is equal to the amount of consumption (OC) at zero level of income. The saving is zero at OY* level of income (point E) implying that consumption is equal to income at E. It is called the break-even point. At E, income and CC curves intersect each other.

Beyond OY* level of income, saving is positive and the saving curve is above the horizontal axis. When the amount of saving is positive, consumption is less than income (C < Y). Thus, CC is the consumption curve derived from saving curve.

Question 11.
Distinguish between consumption function equation and saving function equation. (C.B.S.E. 2012)
Answer:
Consumption Function Equation
The relationship between the consumption and the income is called the consumption function. The consumption function may be represented by the following equation:
C = a + bY; a > 0, 0 < b < I
C = Consumption Expenditure
Y = Level of income
a = Autonomous Consumption
b = Slope of consumption function \(\left(\mathrm{MPC}=\frac{\Delta \mathrm{C}}{\Delta \mathrm{Y}}\right)\)

Autonomous consumption is the amount of consumption expenditure at zero level of income. It is the intercept of the consumption expenditure and is assumed to be positive as people consume even at the zero level of income.

Marginal Propensity to Consume (MPC) orb is the slope of the consumption function. It measures the rate of change in consumption per unit change in income. The value of MPC is positive and lies between 0 and I. This means that the consumption increases with the income.

Saving Function Equation
The relationship between saving and income is called the saving function. The following identity expresses the relationship between saving (S) and income (Y).
Y ≡ C + S
On S = Y – C …(I)
The consumption function is represented as:
C = a + bY
Substituting (2) in (1); we get
S = Y – (a + bY)
S = Y – a – bY
S = – a + (1 – bY)
S = Saving
a = Amount of saving when level of income is zero
(1- b) = Slope of the saving function \(\left(\mathrm{MPS}=\frac{\Delta \mathrm{S}}{\Delta Y}\right)\)

Question 12.
Distinguish between propensity to consume and propensity to save, with the help of numerical  example. (C.B.S.E Outside Delhi 2012)
Answer:
Marginal Propensity to Consume (MPQ is the ratio of change in consumption to the change in income.
\(\mathrm{MPC}=\frac{\Delta C}{\Delta Y}\)
Marginal Propensity to Save (MPS) is the ratio of change in savings to the change in income.
\(M P S=\frac{\Delta S}{\Delta Y}\)
The sum of the propensity to consume and propensity to save is always equal to one.
MPC + MPS = 1
Or; MPC = 1 – MPS
Or; MPS = 1 – MPC

MPC and MPS are inversely related. Higher the propensity to consume lower will be the propensity to save and vice-versa. For example, suppose propensity to consume is 0.80. The propensity to save will be
MPS = 1 – 0.80
= 0.20
If propensity to consume falls to 0.40, then the propensity to save will be
MPS = 1 – 0.40
= 0.60

Question 13.
What are induced and autonomous investments?
Answer:
Induced Investment Induced investment is the investment, which is affected by the changes in income and production in the economy. At higher level of income, the demand for goods is high and hence, the rate of profit increases. Investment automatically increases while rate of profit increases.! Autonomous Investment Autonomous investment is the investment, which is not affected by the changes in income, rate of interest or rate of profits. In other words, autonomous investment is income inelastic. Autonomous investment is increased to provide education, health, etc. facilities to increasing population.

Question 14.
Describe briefly the determinants of investment.
Answer:
Following are the determinants of investment;
(i) Marginal Efficiency of Capital: Marginal efficiency of capital refers to the decline in cost of production by employing an additional unit of capital.
(ii) Rate of Interest: Rate of interest is an important determinant of investment. Rate of interest and investment demand are inversely related as the demand for investment decreases when rate of interest increases and vice-versa.

Question 15.
Draw and explain an investment demand curve.
Answer:
Rate of interest is an important determinant of investment. Rate of interest and investment demand are inversely related. The demand for investment decreases when the rate of interest is high. Similarly, the demand for investment increases when the rate of interest is low. This inverse relationship between the rate of interest and the level of investment is illustrated in the Investment Demand Curve shown below:

Question 16.
Explain the determination of equilibrium level of income using the ‘saving-investment’ approach. Use diagram.
Answer:
The equilibrium is determined at the level of income where Aggregate Demand is equal to the Aggregate Supply. That is,
AD = AS ………….. (1)
AD = C + 1 ………….. (2)
AS = C + S ………….. (3)
By substituting (2) and (3) in (1), we get;
C + I = C + S
I = S
Thus, the equilibrium level of income and output is attained when planned saving (S) and planned! investment (I) are equal. The determination of equilibrium level of income using saving-investment approach can be explained with the help of a diagram.

In the diagram, SS is the saving curve that shows planned saving at different levels of income. It is the investment curve that shows investment as given and constant.

Planned saving and investment are equal (S = I) at point E. Corresponding to this point, OY* is the equilibrium
level of income and output.

At OY! level of output, planned saving is less than planned investment (S < I). It implies that at this level of income, what businessmen plan to invest is more than what households plan to save. There is a situation of excess demand in the economy. Thus, producers will decrease inventory and output would expand until equilibrium is attained.

Similarly, at OY₂ level of output, planned saving is greater than planned investment (S > I). It implies that at this level of income, what businessmen plan to invest is less than what households plan to save. There is a situation of deficient demand in the economy. Thus, producers will increase inventory and output would contract until equilibrium is attained.

Question 17.
Can an economy be in a state of underemployment equilibrium? Explain with the help of a diagram.
Answer:
Yes, an economy can be in a state of underemployment equilibrium. Equilibrium is attained when planned expenditure is equal to the planned output in the economy.

If this equality is achieved at a level less than full employment level of output then the economy will be in a situation of underemployment equilibrium.
C + I curve shows Aggregate Demand (AD) at different levels of output. OY is the underemployment level of output and OY_F is the full employment level of output. The – OY level of output is sufficient to meet current Aggregate Demand. Thus, at OY level of output the economy is in equilibrium but it is a situation of underemployment equilibrium.

Question 18.
Explain any one type of unemployment, which exists during full employment.
Answer:
Full employment refers to a situation in which everyone who is willing to work at. the existing wage rate gets work. Structural Unemployment may exist even during full employment. It is the position of unemployment, which originates for some time because of the change in structural system of an economy. Structural unemployment occurs when there is a lack of other factors of production, change in technique of production or lack of training of labourers.

Question 19.
Describe Say’s law of Market.
Answer:
French economist Jean-Baptiste Say has done himself immortal in 1803 by inventing this law in the book, “Treatise on Political Economy”. According to the Say’s law of market, “Production is the source of demand.” When an individual produces a good or service, he or she gets paid for that work. He is then able to use the return to demand other goods and services. There will never be over production in the economy and full employment remains in economy.

Question 20.
Define multiplier. What is the relation between marginal propensity to consume and multiplier? Calculate the marginal propensity to consume if the value of multiplier is 4. (C.B.S.E. 2018)
Answer:
Multiplier or Investment multiplier (K) expresses the relationship between the final change in income and the initial change in investment. It is estimated as the ratio of change in income due to change in
investment. A change in investment causes a ‘multiple’ change in the output.
\(\begin{array}{l}
K=\frac{\Delta l}{\Delta Y} \\
\Delta l=K \times \Delta Y
\end{array}90\)
There is a direct relationship between investment multiplier and Marginal Propensity to Consume (MPC). The extent of the effect of multiplier depends upon MPC. Higher the MPC, higher will be the value of multiplier. The relationship between investment multiplier and MPC can be expressed with the help of the following equation:
\(K=\frac{1}{1-M P C}\) …………….. (1)
Since the value of MPC lies between 0 and I (0 < MPC < I), the value of multiplier will always be greater than one.
Substituting K = 4 (i), we get:
\(\begin{array}{r}
4=\frac{1}{1-M P C} \\
\mid-M P C=\frac{1}{4}=0.25
\end{array}
MPC = 1-0.25 = 0.75\)
Thus, at K = 4, MPC = 0.75.

Question 21.
Explain the working of investment multiplier with the help of a table.
Answer:
Investment multiplier (K) expresses the relationship between the final change in income and the initial change in investment It is estimated as the ratio of change in income due to change in investment A. change in investment causes a ‘multiple’ change in the output.
\(\begin{array}{l}
\mathrm{K}=\frac{\Delta \mathrm{l}}{\Delta \mathrm{Y}} \\
\Delta \mathrm{I}=\mathrm{K} \times \Delta \mathrm{Y}
\end{array}\)
Assume that the MPC is 4/5. Further, suppose that there is an increase in investment worth ₹ 100, which results in the construction of a new building. This processes can be shown with the help of following table:

Time Period Increase in crores	Initial in Investment Expenditure	Change in Income	Induced Change in Consumption (MPC = 0.8)	Saving (in crores)
1.	100	100	80	20
2.	—	80	64	16
3	—	64	51.2	12.8
4.	—	51.2	49.96	10.24
5.	—	49.96	32.77	8.19
6.	—	32.77	26.22	6.55
..	—	x	x	x
..	—	.	.	.
..	—	.	.	.
Total		500	400	100

Here MPC = 0.8
Thus investment multiplier (k) = \(\frac{1}{\mathrm{MPS}}\)
Thus \(=\frac{1}{1-0.8}=\frac{1}{0.2}=5\)

Question 22.
State whether the following statements are true or false. Give reasons for your answer.
(i) When MPC is greater than MPS, the value of investment multiplier will be greater than 5
(ii) The value of MPS can never be negative. (C.B.S.E. 2010)
Answer:
(i) False. When MPC is greater than MPS, the value of investment multiplier will be greater than 2. Higher the value of MPC, higher will be the value of investment multiplier. For all the values of MPC > MPS, the value of investment multiplier will lie between 2 and infinity.

(ii) True. The value of MPS can never be negative. The relationship between MPC and MPS states that their sum is unity (MPC + MPS = 1). Moreover, the value of MPC lies between the range of 0 to 1, and so MPC can never be less than 0. Since MPC can never be less than 0, the value of MPS can also never be less than 0.

Question 23.
Giving reasons, state whether the following statements are true or false:
(i) When MPC is zero, the value of investment multiplier will also be zero.
(ii) Value of APS can never be less than zero. (C.B.S.E. 2010)
Answer:
(i) False. The relationship between investment multiplier and Marginal Propensity to Consume (MPC) is given as:
The ratio of MPC to MPS is 4 : 1 That is,
\(\frac{M P C}{M P S}=\frac{4}{1} \) ………………..(1)

Question 24.
State whether the following statements are true or false. Give reasons for your answer.
(i) When MPC is greater than MPS, the value of investment multiplier will be greater than 5
(ii) The value of MPS can never be negative. (C.B.S.E. 2010)
Answer:
(i) False. When MPC is greater than MPS, the value of investment multiplier will be greater than 2. Higher the value of MPC, higher will be the value of investment multiplier. For all the values of MPC > MPS, the value of investment multiplier will lie between 2 and infinity.

(ii) True. The value of MPS can never be negative. The relationship between MPC and MPS states that their sum is unity (MPC + MPS = I). Moreover, the value of MPC lies between the range of 0 to I, and so MPC can never be less than 0. Since MPC can never be less than 0, the value of MPS can also never be less than 0.

Question 25.
Giving reasons, state whether the following statements are true or false:
(i) When MPC is zero, the value of investment multiplier will also be zero.
(ii) Value of APS can never be less than zero. (C.B.S.E. 2010)
Answer:
(i) False. The relationship between investment multiplier and Marginal Propensity to Consume (MPC) is given as:
\(\begin{aligned}
K &=\frac{1}{1-M P C} \\
\text { At MPC=0, } & \\
K &=\frac{1}{1-0} \\
&=1
\end{aligned}\)
Thus, when MPC is zero the value of investment multiplier will be equal to one. The lowest value of multiplier is one.

(ii) False. The value of APS can be less than zero. APS can be negative in situations when saving is negative or when consumption is greater than income.

Question 26.
Giving reasons, state whether the following statements are true or false:
(i) If the ratio of Marginal Propensity to Consume and Marginal Propensity to Save is 4 :1 ,the value of investment multiplier will be 4.
(ii) Sum of APC and MPC is always equal to I.
Ans.
(i) False. It can be shown as below:
The ratio of MPC to MPS is 4 : 1 That is,
\(\frac{M P C}{M P S}=\frac{4}{1} \) ………………..(1)
The sum of MPC and MPS is always equal to one. That is,
MPC + MPS = 1
Substituting the (1) in (2); we get
4 MPS + MPS = 1
5 MPS = 1
MPS = \(\frac{1}{5}\)
MPS = 0.2
The relationship between investment multiplier and Marginal Propensity to Save (MPS) is given as:
\(\begin{aligned}
K &=\frac{1}{1-M P C} \\
&=\frac{1}{M P S} \\
K &=\frac{1}{0.2}=5
\end{aligned}\)

Thus, when the ratio Marginal Propensity to Consume and Marginal Propensity to Save is 4 :1, the value of investment multiplier will be equal to 5.

(ii) False. Average Propensity to Consume is the ratio of total consumption \(\left(A P C=\frac{C}{Y}\right)\), while Marginal Propensity to Consume is the ratio of change in consumption to the change in income \(\left(\mathrm{MPC}=\frac{\Delta \mathrm{C}}{\Delta \mathrm{Y}}\right)\). These two are entirely different concepts and cannot be added.

Question 27.
Show inflationary gap with the aid of a diagram. (C.B.S.E. 2005,2013 (Comp.), C.B.S.E Outside Delhi 2012)
Or
Explain the problem of excess demand.
Answer:
Inflationary gap refers to the excess of anticipated expenditure (Aggregate Demand) over the available supply of output (Aggregate Supply) at constant prices of base period. It measures the gap between AD and AS at full employment level of output. Since Aggregate Demand remains more than essential demand at full employment level, there is a significant increment in monetary income.

Thus, there is an over employment equilibrium. This, increases the Aggregate Demand but production cannot be increased as Aggregate Supply is perfectly inelastic. The problem of excess demand can be explained with the help of a diagram.
.
In the diagram, point E represents the state of over employment equilibrium in the economy. At E, the gap between Aggregate Demand and Aggregate Supply is AE₁. That is, AE₁ is the excess demand. The problem of excess demand can be corrected only by the interference of the government, say, by increasing taxes and reducing public expenditure.

Question 28.
Show with the help of a diagram — deflationary gap. (C.B.S.E 2005,2013 Comp. C.B.S.E Outside Delhi 2012)
Answer:
Deflationary gap refers to the excess of available supply of output (Aggregate Supply) over the anticipated expenditure (Aggregate Demand) at constant prices of base period. It measures the gap between AD and AS at full employment level of output. Since Aggregate Demand remains less than essential demand at full employment level, the problem of involuntary unemployment takes place. Thus, there is an under employment equilibrium.

The problem of deficit demand can be explained with the help of a diagram. In the diagram, point E represents the state of under employment equilibrium in the economy. At E, AD = AS but QY_F level of unemployment prevails in the economy. At full employment level of output (OYF), the gap between Aggregate Demand and Aggregate Supply is AEr That is, AE, is the deficit demand. The problem of deficit demand can be corrected only by the interference of the government, say, by decreasing taxes and increasing public expenditure.

Question 29.
Explain the effects of excess demand on output, employment and prices.
Answer:
Excess demand has following effects:
(i) Effect on Output: Due to excess demand in an economy, the resources are over utilised. Production is maximum and cannot be increased further.
(ii) Effect on Employment: The economy has already achieved full employment level and hence, there is no involuntary unemployment in the economy. The employment level will not change during the situation of excess demand.
(iii) Effects on Prices: Since excess demand generates pressure on existing flow of goods and services in the economy, the prices will rise.

Question 30.
Explain the effects of deficient demand on production, employment and prices.
Answer:
Deficient demand has following effects:
(i) Effect on Output: Deficient demand exists due to underemployment in an economy. Some re¬sources remain unemployed and hence, output level is low.
(ii) Effect on Employment: Deficient demand causes level of investment to fall. As a result, there is involuntary unemployment in the economy, which decreases the level of employment.
(iii) Effects on Prices: Due to deficient demand prices tend to fall.

Question 31.
State the impact of “Excess Demand” under the Keynesian theory on employment, in an economy. (C.B.S.E Outside Delhi 2019)
Answer:
Excess demand refers to a situation in the economy in which the Aggregate Demand is more than the Aggregate Supply (AD > AS) at the full employment level. Since the economy is already operating at full employment level, excess demand will only lead to a genaral) rise in price level. Employment will not increase.

Question 32.
Differentiate between deficient demand and excess demand.
Answer:
There are the following differences between deficient demand and excess demand:

S.No.	Deficient Demand	Excess Demand
1.	Deficient demand takes place when AD < AS at full employment level of output	Excess demand takes place when AD > AS at full employment level of output.
2.	Underemployment equilibrium causes invol­untary unemployment in economy.	Over full employment equilibrium signifies overutilisation of resources.
3.	Deficient demand creates deflationary gap.	Excess demand creates inflationary gap.
4.	Due to deficient demand, there is a depreciation in trade cycle.	Excess demand causes a state of boom.
5.	Production, income, employment and prices are low during deficient demand.	Production and employment are stable during excess demand while prices increase.

Question 33.
Explain the meaning and implications of a deflationary gap. (C.B.S.E. Outside Delhi 2011 Comp.)
Answer:
Deflationary gap refers to the excess of available supply of output (Aggregate Supply) over the anticipated expenditure (Aggregate Demand) at constant prices of base period. It measures the gap between AD and AS at full employment level of output. Since Aggregate Demand remains less than essential demand at full employment level, the problem of involuntary unemployment takes place. Thus, there is an under employment equilibrium.

Following are the implications of deflationary gap:
(i) Deficient demand exists due to underemployment in an economy. Some resources remain unemployed and hence, output level is low.
(ii) Deficient demand causes level of investment to fall. As a result, there is involuntary unemployment in the economy, which decreases the level of employment.
(iii) Due to deficient demand prices tend to fall.

Question 34.
What is fiscal policy? How is it used to reduce excess demand in the economy?
or
Explain briefly three fiscal measures to reduce inflationary gap.
Answer:
Fiscal policy refers to the revenue and expenditure policy of the government to achieve balance in the development of the economy.
Following fiscal policy measures can be taken to reduce excess demand in the economy:

• Decrease in Government Expenditure: The government should reduce its unnecessary expenditure in order to check excess demand. Transfer payments should be decreased.
• Increase in Taxes: To correct excess demand, the government should levy new taxes and enhance the rate of existing taxes.
• Surplus Budget Policy: It is necessary that government expenditure should be less than its income: in order to correct excess demand.

Question 35.
What is fiscal policy? What possible fiscal policy measures can be taken with respect to expenditure and income to correct:
(i) Excess Demand
(ii) Deficient Demand
Answer:
Fiscal policy refers to the revenue and expenditure policy of the government to achieve balance in the development of the economy.

(i) Fiscal Measures to Correct Excess Demand

• Decrease government expenditure on public welfare, defence, administration, etc.
• Decrease government expenditure on subsidies and transfer payments
• Increase in tax rates
• Restrict deficit financing

(ii) Fiscal Measures to Correct Deficient Demand

• Increase government expenditure on public welfare, defence, administration, etc.
• Increase government expenditure on subsidies and transfer payments
• Reduce tax rates
• Increase deficit financing

Question 36.
What is monetary policy? Briefly explain how it can be used to reduce excess demand in an economy.
Answer:
Monetary policy refers to the regulation policy of the government (central bank) to control money supply and interest rate in the economy. Following monetary policy measures can be taken to reduce excess demand in the economy:

(i) Increase in Legal Reserve or Cash Reserve Ratio: The central bank increases the CRR to correct the situation of excess demand or inflationary gap in the economy. High CRR reduces the supply of money in the economy, and thus, the Aggregate Demand will fall.

(ii) Increase in Bank Rate: The central bank increases the bank rate to correct the situation of excess demand in the economy. Higher bank rate reduces the lending capacity of the commercial banks as they get funds at a higher interest rate from the central bank Consequently, money supply contracts in the economy as the public borrows less at high rate of interest and Aggregate Demand falls.

(iii) Open Market Operations: The central bank buys government securities from commercial banks and general public in a bid to correct the situation of excess demand. This decreases the stock of high powered money in the economy. As a result, the purchasing power of the people fall, which decreases the Aggregate Demand in the economy.

(iv) Increase in Margin Requirement: An increase in margin requirement will correct the situation of excess demand in the economy. Higher margin requirement implies higher security price for a loan. Thus, people will borrow less loans from the banks and the Aggregate Demand will decrease.

Question 37.
How can deficient and excess demand be corrected by change in taxes?
Answer:
Change in taxes can be corrected by excess demand in the following ways:

(i) Decrease in Taxes: Decrease in taxes increases the income of public, which increases ‘their
purchasing power. As a result, demand for goods and services increases. This can correct deflationary gap or deficient demand. Taxes should be progressive i.e. higher rate of tax for rich people than poor people.

(ii) Increase in Taxes: Increase in taxes (direct and indirect) will decrease the purchasing power of consumers and producers. This will decrease the Aggregate Demand. Therefore, government should implement new taxes for solving the problems of excess demand or inflationary gap or government should increase the rate of taxes.

Question 38.
Explain the role of ‘reverse repo rate’ in removing excess demand.
Answer:
Reverse repo rate refers to the rate at which central bank borrows from the commercial banks. The central bank increases the reverse repo rate to correct the situation of excess demand. Higher reverse repo rate would induce commercial banks to lend more to the central bank and hence, would reduce the supply of money in the economy. As a consequence, Aggregate Demand would fall.

Determination of Income and Employment Important Extra Questions Long Answer Type

Question 1.
Explain the concepts of Aggregate Demand and Aggregate Supply with the help of diagram.
Answer:
Aggregate Demand: Aggregate Demand (AD) refers to the total expenditure on consumption and investment by different sectors of the economy.
Aggregate Demand can be written in the form of the following equation:
AD = C + I + G + (X – M) Y
where; C = Private Final Expenditure
I = Investment Expenditure
G = Government Expenditure
X – M = Net Exports (Exports – Imports)
Aggregate Demand and price level has inverse relation.
That is, at higher price level, Aggregate Demand will be oc less and at lower price level, Aggregate Demand will be high. It can be explained with the help of following diagram.

In this diagram, on OX axis shows the quantity and OY axis shows the price level. AD is the downward sloping Aggregate Demand curve.

Aggregate Supply: Aggregate Supply (AS) refers to the planned aggregate production by the producers during a period of one year. It is equal to the income generated.

Aggregate Supply can be written in the form of the cc following equation:
AS = Y = C + S
where; C = Consumption Expenditure
S = Savings

Following are the two types of concepts of Aggregate Supply:
(i) Classical Concept of Aggregate Supply: According to classical economists such as Adam Smith, Marshall and Pigou etc., there is no relation between Aggregate Supply and price level. They had considered Aggregate Supply curve as perfectly inelastic cun/e. According to the classical outlook, an economy always functions at the full employment level of output.

(ii) Keynesian Concept of Aggregate Supply: In Keynesian concept of Aggregate Supply, the AS curve (in response to price level) is perfectly elastic before employment level. It means that all producers are ready to produce any quantity of production on market prices.

The Aggregate Supply curve is perfectly elastic due to inflexibility of prices and wages and constant Marginal Productivity of Labour. However, Aggregate Supply curve is perfectly inelastic in response to price level after full employment level.

In this diagram, part PA is perfectly elastic. Here, Marginal Productivity of Labour is stable. Production is going on at constant cost. OQ_F level is the full employment level. Beyond this level, Aggregate Supply curve becomes perfectly inelastic in response to price level.

Question 2.
Explain ‘consumption function’ with the help of a schedule and diagram. (C.B.S.E 2008)
Answer:
The relationship between the consumption and the income is called the consumption function. The consumption function may be represented by the following equation:
C = a + bY; a > 0, 0 < b < I
C = Consumption Expenditure
Y = Level of income
a = Autonomous Consumption
b = Slope of consumption function \(\left(M P C=\frac{\Delta C}{\Delta Y}\right)\)

Autonomous consumption is the amount of consumption expenditure at zero level of income. It is the intercept of the consumption expenditure and is assumed to be positive as people consume even at the zero level of income. Marginal Propensity to Consume (MPC) orb is the slope of the consumption function. It measures the rate of change in consumption per unit change in income. The value of MPC is positive and lies between 0 and I. This means that the consumption increases with the income. Consider a consumption function given as:
C = 50 + 0.8Y ……………… (1)

The consumption function can be shown with the help of the following schedule and diagram:

In the diagram, the horizontal axis represents income and vertical axis represents consumption expenditure. When income is zero, consumption is ₹ 50. This part of consumption is an autonomous consumption. As the level of income increases, the consumption also increases. The slope of the consumption curve or MPC or b is 0.8.

Question 3.
Explain ‘saving function’ with the help of a schedule and diagram.
Answer:
The relationship between saving and income is called the saving function. The following identity expresses the relationship between saving (S) and income (Y).
Y ≡ C + S
On S = Y – C … (1)
The consumption function is represented as:
C = a + bY … (2)
Substituting (2) in (1); we get
S = Y – (a + bY)
S = Y – a – bY S = -a + ( 1 – bY)
S = Saving
a = Amount of saving when level of income is zero.
(1 – b) = Slope of the saving function
Assume the consumption function is given as:
C= 100 + 0.8Y
Thus, the saving function becomes:

Note: The sum of Marginal Propensity to Consume and Marginal Propensity to Save is 1. That is,
MPC + MPS = 1
The saving function can be explained with the help of the following schedule and diagram

The diagrammatic presentation of saving function is given below.

In the diagram, the horizontal axis represents income and vertical axis represents consumption expenditure and saving. The straight line curves, C and S represent the consumption and saving function respectively. At ₹ 500, income is equal to consumption and savings are zero.

Question 4.
Explain the concept of underemployment equilibrium with the help of a diagram. Show on the same diagram the additional investment expenditure required to reach full employment equilibrium.
Answer:
Underemployment equilibrium is a state of equilibrium where not all resources are fully employed, that is, some resources are underemployed. The idea of underemployment equilibrium is explained in the Keynesian approach. The Keynesian approach was developed against the background of the great depression of 1930s.

When there is deficient demand, actual Aggregate Demand is less than the full employment level of output. It is the situation of underemployment equilibrium. The concept of underemployment equilibrium can be explained with the help of following diagram:

In this diagram, AD is the Aggregate Demand curve and AS is the Aggregate Supply curve. OP* is the equilibrium price level, OQ* is the equilibrium level of output and OQ_F is the full employment level of output

Equilibrium is attained at the point of intersection of the Aggregate Demand curve and Aggregate Supply curve. It is an underemployment equilibrium because the equilibrium level of output is less than full employment level of output (OQ* < OQ_F).

In order to overcome the problem of underemployment equilibrium, the additional investment expenditure is required. Aggregate Demand curve will shift from AD to AD, by an amount of additional investment expenditure (∆l). The new point of intersection is E₁, which is the full employment level of output. Thus, the Keynesian remedy to underemployment equilibrium places emphasis on increasing the level of Aggregate Demand by increasing investment expenditure.

Question 5.
Explain determination of national income using AD and AS approach. Use diagram to explain the changes that take place when AD is greater than AS.    (CBSE 2014)
Answer:
The equilibrium is determined at the level of income where Aggregate Demand or planned expenditure is equal to the level of output in the economy. That is,
Y = AD
We know that,  AD = C + I
Thus,  Y = C + I
The determination of the equilibrium level of income can be represented with the help of Consumption + Investment (C + I) curve in the following diagram.

In the diagram, CC is the consumption function showing the desired level of consumption corresponding to each level of income. The desired investment curve, which is at fixed level l₀, is added to the consumption function.

Thus, the level of total desired spending or Aggregate Demand is represented by C +1₀ curve. At each level of income, the C + l₀ curve lies above the CC curve by an amount equal to l_Q. The 45° line will enable us to identify the equilibrium level of income.

The economy is in equilibrium at the level of income where the C + l₀ curve intersects the 45° line. Thus, the economy is in equilibrium at point E. Here, the level of desired spending on consumption and investment is exactly equal to the level of total output. The equilibrium level of output or income corresponding to point E is OY*.

When the Aggregate Demand in the economy exceeds the Aggregate Supply, there is a situation of excess demand in the economy. Thus, producers will decrease inventory and output would expand until equilibrium is attained.

Question 6.
Explain the equilibrium level of income with the help of saving and investment curves. If savings exceed planned investment, what changes will bring about the equality between them?
Or
Explain determination of national income using saving and investment approach. Use diagram explain the changes that take place when saving is greater than investment.
Answer:
The equilibrium is determined at the level of income where Aggregate Demand is equal to the Aggregate Supply. That is,
AD =  AS  … (1)
We know that,  AD = C +1   …(2)
AS =    C + S  … (3)
By substituting (2) and (3) in (1), we get;
C + I =    C + S
On  I =   S

Thus, the equilibrium level of income and output is attained when planned saving (S) and planned investment (I) are equal. The determination of equilibrium level of income using saving investment approach can be explained with the help of a diagram.

In the diagram, SS is the saving curve that shows planned saving at different levels of income. II is the investment curve that shows investment as given and constant. Planned saving and investment are equal (S = I) at point E. Corresponding to this point, OY* is the equilibrium level of income and output.

At OY, level of output, planned saving is saving is greater than planned investment (S > I). There is a situation of deficient demand in the economy. Thus, producers will increase inventory and output would contract until equilibrium is attained.

Question 7.
Explain the meaning of underemployment equilibrium. Explain two measures by which full employment equilibrium can be reached. (C.B.S.E Outside Delhi 2013)
Answer:
Equilibrium is attained when planned expenditure is equal to the planned output in the economy. If this equality is achieved at a level less than full employment level of output then the economy will be in a situation of underemployment equilibrium.
The two policy measures that the government can take are:

(i) Increase in Public Expenditure: Government can correct the situation of underemployment by increasing public expenditure on goods and services such as transportation, dams, electricity industry development expenditure, education, health etc. This increases the purchasing power of the public, which in turn, increases the demand for goods and corrects deficient demand. Moreover, increase in public expenditure also helps in eradicating poverty.

(ii) Open Market Operations: Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market. The central bank purchases government securities from commercial banks and general public in a bid to correct thi# situation of deficient demand. This increases the stock of high powered money in the economy. As a result, the purchasing .power of the people increases, which increases the Aggregate Demand in the economy.

Question 8.
Define investment. Explain national income equilibrium through saving and investment function. Also explain the changes that take place in an economy when the economy is not in equilibrium. (C.B.S.E Outside Delhi 2014)
Answer:
Investment means addition to the stock of capital goods in the nature of structures, equipment or inventory. The equilibrium is determined at the level of income where Aggregate Demand is equal to the Aggregate Supply. That is,
AD = AS ……………. (1)
We know that, AD = C + 1 …(2)
AS = C + S …(3)
By substituting (2) and (3) in (1), we get;
C + I = C + S
On I = S
Thus, the equilibrium level of income and output is attained when planned saving (S) and planned investment (I) are equal. The determination of equilibrium level of income using saving-investment approach can be explained with the help of a schedule.

Question 9.
Explain the relationship between multiplier and MPC.
Answer:
Investment multiplier (K) is the relationship between the final change in income and the initial change in investment. It is estimated as the ratio of change in investment income due to change investment. Marginal Propensity to Consume (MPC) is the ratio of change in consumption to the change in income. There is a direct relationship between investment multiplier and MPC.
We know that,


One man’s expenditure is another man’s income. Whenever there is an increment in investment ex¬penditure, some individuals’ income is increased by the amount of investment with which they buy goods and services. They spend a part of their increased income on consumption and keep some income for saving. The individuals’ MPC determines the amount they spend or save. If MPC is greater than MPS, individuals will spend more on consumption; and if MPC is less than MPS, the individuals’ expenditure on consumption will be less.The extent of the effect of multiplier depends upon the Marginal Propensity to consume. Higher the MPC, higher will be the value of multiplier.

At lower MPC, multiplier is 2 and at higher MPC, multiplier is 4.

Question 10.
Assuming that increase in investment is ₹ 1,000 crore and MPC is 0.9. Explain the working of multiplier. (C.B.S.E. 2017)
Answer:
There is a direct relationship between investment multiplier and Marginal Propensity to Consume (MPC). The extent of the effect of multiplier depends upon MPC. Higher the MPC, higher will be the value of multiplier. The relationship between investment multiplier and MPC can be expressed with the help of the following equation:
\(K=\frac{1}{1-M P C}\)
Since the value of MPC lies between 0 and I (0 < MPC < I), the value of multiplier will always be greater than one.
Given that the MPC is 0.9. Further, there is an increase in investment worth ₹ 1,000 crores. Since the MPC is 0.9 the new consumption of goods will be 900 (0.9 * 1,000). The producers of those consumption goods will, thus, have an increase of ₹ 900 in their incomes.

Since their MPC is also 0.9, they will, in turn, spend ₹ 810 (0.9 * ₹ 900). This will cause an increase in the income of other people by ₹ 810. This process will go on. An endless chain of the secondary consumption spending is set in motion by the primary investment of ₹ 1,000 crores.

The total increase in consumption and investment spending, and therefore, the total increase in income can be calculated as:

To determine the total increase in output of the final goods and services, we add up the infinite geometric series as:

Thus, an increase in investment worth ₹ 1,000 crores, increases the income by ₹ 10,000 crores. That is, a change in investment has caused 10 times increase in income (output). Thus, the value of investment multiplier is 10.

Question 11.
Explain monetary measures for correcting inflationary and deflationary gap.
Answer:
Following are the monetary measures for correcting inflationary and deflationary gap:

Open Market Operation: Open .mirfeet perish: is- the policy of the central monetary authority to sell and buy; The government securities in.the market. RBI purchases or sells government securities to the general public in a bid to correct deficient or excess demand in the economy.

Bank Rate Policy: Bank rate is the minimum rate at which the central bank discounts the first class bills of exchange and provides credit to the commercial banks. Higher bank rate reduces the lending capacity of the commercial banks as they get funds at a higher interest rate from RBI.

Consequently, credit contracts in the economy as public borrows less at high rate of interest. It reduces excess demand. Similarly, lower bank rate increases the lending capacity of the commercial banks as they get funds at a lower interest rate from RBI. Consequently, credit expands in the economy as public borrows more at low rate of interest. It solves the problem of deficient demand.

Varying Reserve Requirements: Cash Reserve Ratio (CRR) is the minimum fraction of the total deposits with the commercial banks, which they are required to keep with the central bank Statutory Liquidity Ratio (SLR), on the other hand, is the minimum fraction of the total deposits with the commercial bank, which they are required to maintain in the form of specified liquid assets. A high (low) value of CRR or SLR helps increase (decrease) the value of reserve deposit ratio, thus diminishing (increasing) the value of the money multiplier and money supply in the economy.

Rationing of the Credit: Rationing of the credit implies controlling the quantity in the form of loan. Here, amount of loan is determined for speculative purpose. Hence, total demand can be increased by rationing of credit. It will increase the purchasing power of people and hence, deficient demand will be corrected. Rationing of credit should be increased by central bank for correcting the excess demand or inflationary gap.                                                                                                ,

Question 12.
Explain the role of the following in correcting the inflationary gap in an economy.
(i) Legal reserves
(ii) Bank rate (B.S.E Outside Delhi 2011)
Answer:
The problem of excess demand or inflationary gap can be corrected by adopting following monetary measures:

(i) Legal Reserve or Cash Reserve Ratio: Legal reserves or Cash Reserve Ratio (CRR) is the minimum fraction of the total deposits with the commercial banks, which they are required to keep with the central bank, The central bank increases the CRR to correct the situation of excess demand or inflationary gap in the economy. High CRR reduces the supply of money in the economy, and thus, the Aggregate Demand will fall.

(ii) Bank Rate: Bank rate is the minimum rate at which the central bank discounts the first class bills of exchange and provides credit to the commercial banks. The central bank increases the bank rate to correct the situation of excess demand in the economy. Higher bank rate reduces the lending capacity of the commercial banks as they get funds at a higher interest rate from the central bank. Consequently, money supply contracts in the economy as the public borrows less at high rate of interest and Aggregate Demand falls.

Question 13.
Explain the role of the following in correcting the deflationary gap in an economy:
(i) Open market operations
(ii) Margin requirements (C.B.S.E. Outside Delhi 2011)
Answer:
The problem of deficient demand or deflationary gap can be corrected by adopting following monetary measures:

(i) Open Market Operations: Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market. The central bank purchases government securities from commercial banks and general public in a bid to correct the situation of deficient demand. This increases the stock of high powered money in the economy. As a result, the purchasing power of the people increases, which increases the Aggregate Demand in the economy.

(ii) Margin Requirement: Margin requirement of loan is the minimum security price charged by the commercial bank for granting loans. A decrease in margin requirement will correct the situation of deficient demand in the economy. Lower margin requirement implies lower security price for a loan. Thus, people will borrow more loans from the banks and the Aggregate Demand will increase.

Question 14.
Explain the concept of inflationary gap. Explain the role of Repo Rate in reducing this gap.
Answer:
Inflationary gap refers to the excess of anticipated expenditure over the available supply of output at constant prices of base period. It is also known as excess demand. It measures the gap between AD and AS at full employment level of output.

Since Aggregate Demand remains more than essential demand at full employment level, there is a significant increment in monetary income. Thus, there is an over employment equilibrium. This increases the Aggregate Demand but production cannot be increased as Aggregate Supply is perfectly inelastic. The problem of excess demand can be explained with the help of a diagram

In the diagram, point E represents the state of over employment equilibrium in the economy. At E, the gap between Aggregate Demand and Aggregate Supply is AEr That is, AE, is the excess demand. The problem of excess demand can be corrected only by the interference of the government (increasing taxes and reducing public expenditure).

Repo rate refers to the rate at which central bank lends short term funds to commercial banks as the lender of last resort. The central bank increases the repo rate to correct the situation of excess demand.

Higher repo rate increases the cost of borrowings by the commercial banks, which thereby reduces their lending capacity. Consequently, money supply contracts in the economy as the public borrows less at high rate of interest and hence, Aggregate Demand falls.

Question 15.
Explain the concept of inflationary gap. Explain the role of ‘Open Market Operations’ in reducing this gap. (C.B.S.E. 2015)
Answer:
Deflationary gap refers to the excess of available supply of output (Aggregate Supply) over the anticipated expenditure (Aggregate Demand) at constant prices of base period. It measures the gap between AD and AS at full employment level of output. Since Aggregate Demand remains less than essential demand at full employment level, the problem of involuntary unemployment takes place. Thus, there is an under employment equilibrium.

The problem of deficit demand can be explained with the help of a diagram. In the diagram, point E represents the state of under employment equilibrium in the economy. At E, AD = AS but QY, level of unemployment prevails in the economy. At full employment level of output (OY_F), the gap between Aggregate Demand and Aggregate Supply is AEr That is, AE, is the deficit demand or deflationary gap. The problem of deficit demand can be corrected only by the interference of the government using measures such as decreasing taxes or increasing public expenditure.

Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market. The central bank purchases government securities from commercial banks and general public in a bid to correct the situation of deficient demand. This increases the stock of high powered money in the economy. As a result, the purchasing power of the people increases, which increases the Aggregate Demand in the economy.

How can deficient and excess demand be corrected through changes in public expenditure? Deficient and excess demand can be corrected by changing public expenditure.

(i) Increase in Public Expenditure: Government can correct the situation of deficient demand by increasing public expenditure on goods and services such as transportation, dams, electricity industry development expenditure, education, health etc. This increases the purchasing power of the public which, in turn, increases the demand for goods and corrects deficient demand.

Moreover, increase in public expenditure also helps in eradicating poverty. According to Lord Kenyes, increase in the public expenditure is the best measure for correcting deficient demand. The effect of increase in public expenditure can be explained with the help of a diagram. In the diagram, horizontal axis shows the output and vertical axis shows the Aggregate Demand. The initial Aggregate Demand curve (AD,) is an upward sloping line comprising of private

consumption (C), investment expenditure (I) and government expenditure (G,). Aggregate Supply (AS) is a vertical line at the full employment level of output (YF). With the initial government expenditure of G,; the Aggregate Demand is OY while Aggregate Supply is OY_F There is a situation of deficient demand as AD < AS. As government expenditure is increased to G₂, AD curve shifts up to AD, until equilibrium is attained (AD = AS) at fuil employment level of output Thus, the problem of deficient demand or deflationary gap can be corrected by increasing public expenditure.

Decrease in Public Expenditure: Government can correct the situation of excess demand by decreasing public expenditure on goods and services such as transportation, dams, electricity industry development expenditure, education, health etc. This decreases the purchasing power of the public which, in turn, decreases the demand for goods and corrects excess demand. The effect of decrease in public expenditure can be explained with the help of a diagram.

With the initial government expenditure of G,; the Aggregate Demand is OY while Aggregate Supply is OYF. There is a situation of excess demand as AD > AS. As government expenditure is decreased to G₂, AD curve shifts down to AD, until equilibrium is attained (AD = AS) at full employment level of output. Thus, the problem of excess demand or inflationary gap can be corrected by decreasing public expenditure.

Question 16.
Explain the meaning of underemployment equilibrium. Explain two measures by which full employment equilibrium can be reached. (C.B.S.E Outside Delhi 2013)
Answer:
Equilibrium is attained when planned expenditure is equal to the planned output in the economy. If this equality is achieved at a level less than full employment level of output then the economy will be in a situation of under employment equilibrium.
The two policy measures that the government can take are:

(i) Increase in Public Expenditure: Government can correct the situation of underemployment by increasing public expenditure on goods and services such as transportation, dams, electricity industry development expenditure, education, health etc. This increases the purchasing power of the public which, in turn, increases the demand for goods and corrects deficient demand. Moreover, increase in public expenditure also helps in eradicating poverty.

(ii) Open Market Operations: Open market operation is the policy of the central monetary authority to sell and buy government securities in the market. The central bank purchases government securities from commercial banks and general public in a bid to correct the situation of deficient demand. This increases the stock of high powered money in the economy. As a result, the purchasing power of the people increases, which increases the Aggregate Demand in the economy.

Question 17.
What is meant by inflationary gap? State three measures to reduce this gap. (C.B.S.E 2018)
Answer:
Inflationary gap refers to the excess of anticipated expenditure over the available supply of output at constant prices of base period. It is also known as excess demand.

Following are the three measures that can be used to correct the problem of inflationary gap:

(i) Increasing Bank Rate: Bank rate is the minimum rate at which the central bank discounts the first class bills of exchange and provides credit to the commercial banks. The central bank increases the bank rate to correct the situation of inflationary gap or excess demand in the economy.

Higher bank rate reduces the lending capacity of the commercial banks as they get funds at a higher interest rate from the central bank. Consequently, money supply contracts in the economy as the public borrows less at high rate of interest and Aggregate Demand falls.

(ii) Selling Government securities: Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market. The central bank sells government securities to commercial banks and general public in a bid to correct the situation of inflationary gap or excess demand. This decreases the stock of high powered money in the economy. As a result, the purchasing power of the people declines, which decreases the Aggregate Demand in the economy.

(iii) Decrease in Public Expenditure: Government can correct the situation of excess demand by decreasing public expenditure on goods and services such as transportation, dams, electricity industry development expenditure, education, health etc. This decreases the purchasing power of the public which, in turn, decreases the demand for goods and corrects excess demand.

Determination of Income and Employment Important Extra Questions HOTS

Question 1.
Calculate C when \(\bar{C}\)= 200, MPC = 0.5 and income (Y) = 1,000
Answer:
The consumption function is given as:
C = \(\bar{C}\)+ cY ……………. (1)
where; c = MPC
Substituting appropriate values in (1) , we get:
C = 200 + (0.5 x 1,000) = 200 + 500 = 700
Thus, the total consumption expenditure is 700.

Question 2.
How do we find that  \(K=\frac{3}{1-M P C} ?\)
Answer:

Question 3.
Given consumption function C = 100 + 0.75Y (where C = consumption expenditure and y = National Income and investment expenditure ₹ 1000. Calculate:
(i) Equilibrium level of National Income
(ii) Consumption expenditure at equilibrium level of National Income
Answer:
(i) The consumption function and investment are given as
C = 100 + 0.75Y                                                             …(1)
I = 1,000                                                                     …(2)
Equilibrium level of National Income is determined as:
Y = C + 1 … (3)
Substituting appropriate values in (3); we get
Y= 100 + 0.75Y + 1000 Y – 0.75Y
= 1,100 0.25 Y = 1,100
= 4,400
Thus, the equilibrium level of National Income is ₹ 4,400.

(ii) Substituting Y = 4400 in (1); we get
C= 100 + 0.75(4,400)
= 100 + 3,300 = 3,400
Thus, the consumption expenditure at equilibrium level of National Income is ₹ 3,400.

Here we are providing Class 12 Political Science Important Extra Questions and Answers Chapter 7 Rise of Popular Movements. Political Science Class 12 Important Questions are the best resource for students which helps in class 12 board exams.

Class 12 Political Science Chapter 7 Important Extra Questions Rise of Popular Movements

Rise of Popular Movements Important Extra Questions Very Short Answer Type

Question 1.
What was the main demand of the Chipko Movement? (C.BS.E 2014)
Answer:
Chipko Movement is a non-violent movement of protecting the trees. The term ‘Chipko’ means ‘hugging the trees’. This movement began in two or three villages of Uttarakhand in 1972. Villagers demanded that the contracts to exploit forest should not be given to outsiders. The local communities should keep a check on the natural resources. Thus, they protested against the logging contractor.

Question 2.
Highlight any two main demands of the anti-arrack movement. (C.B.S.E. 2014)
Answer:
Following are the main demands of the anti arrack movement:

1. Women demanded a ban on the sale of alcohol (arrack) in their neighborhood.
2. To prevent violence against women.

Question 3.
Mention any two demands of the Bharatiya Kisan Union. (C.BS.E. 2013, 2014) :
Answer:

1. The Bharatiya Kisan Union demanded higher government floor prices for sugarcane and wheat.
2. The B.KU. demanded waiving of repayment due on loans to farmers and provision of government pension for farmers.

Question 4.
List any two recommendations of the Mandai Commission. (Sample Paper)
Or
Highlight any two recommendations of the Mandai Commission. (C.B.S.E. 2011)
Answer:

1. Twenty-seven percent of the posts in public services should be reserved for OBCs.
2. Welfare programs specially meant for OBCs should be financed by the Government of India in the same manner and to the same extent as already done in the case of SCA and STa.

Question 5.
Who was the chairman of the Mandai Commission? State any one recommendation made by him/her.
Answer:
Mr. B.P. Mandai was the Chairman of the Mandai Commission. The Commission recommended that 27% of the posts in public services should be reserved for OBCs. They do make 52% of the total population yet the reservation quota for them cannot exceed this limit.

Question 6.
How does party-based movement differ from the non-party movement?
Answer:
The party-based movement differs from the nonparty movement in the following ways.

• Party-based movement is affected by politics, but the non-party movement is separate from politics.
• In comparison to party-based movement, non-party movement is more useful for democracy.

Question 7.
What was the role of Mazdoor Kisan Shakti Sanghathan (MKSS) in the enactment of the Right of Information Act? (C.B.S.E. 2012 Delhi)
Answer:
In 1990. the Mazdoor Kisan Shakti Sanghathan (MKSS) in Rajasthan took the initiative in demanding records of famine relief work and accounts of laborers. The demand was first made by the people of Bhim Tehsil. The villagers asserted their right to information. In 1994 and 1996, the MKSS organized Jan Sunwais or Public hearings, where the administration was asked to explain its stand in public.

Question 8.
Mention any two issues of A concern related to development project such as the Sardar Sarovar Project. (C.B.S.E. 2013)
Answer:

1. Rehabilitation of project-affected villagers.
2. The social cost included forced resettlement of the project-affected people, a serious loss of their means of livelihood and culture, and depletion of ecological resources.

Question 9.
Highlight the importance of popular movements. (C.B.S.E. 2013)
Answer:

1. Popular movements ensure effective representation of diverse groups and their demands. This reduces the possibility of deep social conflict and dissatisfaction of their group from democracy.
2. Popular movements suggest new forms of active participation and thus broaden the idea of participation in Indian democracy.

Question 10.
Which sections of Indian Society are most affected by the Chipko movement? (C.B.S.E. Sample Q.P. 2017)
Answer:
The most affected Indian Society by the Chipko movement is concerning villagers like a male, farmer, and especially women.

Question 11.
Match the following in ‘Column A’ with those in ‘Column B’ in a meaningful way. (C.B.S.E. 2019)

Column ‘A’	Column ‘B’
(I)           Chipko Movement	(a) Maharashtra
(II)          Narmada Bachao Aandolan	(b) Uttarakhand
(III)         Dalit Panthers Movement	(c) Andhra Pradesh
(IV)        Anti-Arrack Movement	(d) Gujarat

Answer:

Column ‘A’	Column ‘B’
(I)           Chipko Movement	(b) Uttarakhand
(II)          Narmada Bachao Aandolan	(d) Gujarat
(III)         Dalit Panthers Movement	(a) Maharashtra
(IV)        Anti-Arrack Movement	(c) Andhra Pradesh

Rise of Popular Movements Important Extra Questions Very Short Answer Type (2 Marks)

Question 1.
Which one of the two is more essential-construction of mega-dams or an environmental movement that opposes it and why? (C.B.S.E. 2016)
Answer:
The more essential is the construction of mega-dams because they help in solving the problem of water and electricity of that area. People get employment also thus, construction of mega-dams is very helpful for the development.

Question 2.
Highlight the most novel aspect of the Chipko Movement. (Imp.) (C.B.S.E. 2016)
Answer:
Women’s active participation in the Chipko Movement was a very novel aspect of the movement.

Question 3.
How did the farmers associated with Bharatiya Kisan Union differ from most other farmers in India? (C.B.S.E 2016)
Answer:
Farmers associated with Bharatiya Kisan Union grew cash crops for the market.

Question 4.
What was the Anti-Arrack Movement? (Sample Paper C.B.S.E. 2010, 2012)
Answer:
Anti-Arrack Movement was started in Andhra Pradesh and demanded prohibition on the sale of arrack (alcohol).

Question 5.
What was Chipko Movement? (C.B.S.E. 2008, 2012)
Answer:
The Chipko Movement (1974-77), hugging trees to prevent them from being felled, linked the issue of environmental degradation to women’s increasing toil for fuel and fodder.

Question 6.
What was the main objective of the Dalit Panthers? (C.B.S.E. 2011 Delhi)
Answer:
The Panthers’ aim was to unite the Dalit and to bring them into their fold.

Question 7.
Name the popular movement which demanded that no forest exploiting contract be given to any outsider. (C.B.S.E. 2013)
Answer:
Chipko Movement.

Question 8.
Shetkari Sanghatahna and Raitha Sangha belonged to which two respective states?
Answer:
Shetkari Sanghatahna belonged to Maharashtra and Raitha Sangha belonged to Karnataka.

Question 9.
Why the ongoing environmental movements are opposing the construction of mega-dams? (C.B.S.E. Sample Paper 2018)
Answer:
Construction of mega-dams results in the displacement of a large number of people living around that area.

Question 10.
Which popular movement led to the empowerment of women? (C.B.S.E. 2018)
Answer:
Chipko movement led to the empowerment of women.

Question 11.
Explain the main recommendation of the Mandal Commission. (C.B.S.E. 2019)
Answer:
The main recommendation of the Mandal Commission is 27% of the posts in Public services should be reserved for O.B.Cs.

Choose the correct answer:

Question 12.
In which year All India Kisan Sabha was established?
(a) 1930
(b) 1936
(c) 1940
(d) 1950.
Answer:
(b) 1936.

Question 13.
Who led the Narmada Bachao Andolan’
(a) Medha Patkar
(b) Rajni Sharma
(c) Shabana Azmi
(d) Meira Kumar.
Answer:
(a) Medha Patkar.

Question 14.
Where Anti-Arrack Movement was started?
(a) Haryana
(b) Andhra Pradesh
(c) Punjab
(d) Tamil Nadu.
Answer:
(b) Andhra Pradesh.

Rise of Popular Movements Important Extra Questions Short Answer Type

Describe any four demands made by the Bharatiya Kian Union after 1980? (C.B.S.E 2015)
Answer:

1. It demanded removing inter-state restrictions on the movement of foodgrains.
2. Electricity rates should be reduced.
3. The government floor price of sugarcane and wheat should be raised.
4. The repayment of the loans to the farmers should be waived. The government should provide pensions to farmers.

Question 2.
Describe any two issues which made the Anti-Arrack movement a women’s movement. (CJ3.S.E. 2015)
Answer:
1. Anti-Arrack Movement in Andhra Pradesh was definitely a movement of women. In the Nellore district of Andhra Pradesh, women came together in a spontaneous local initiative to protest against arrack (Local alcohol) and forced the closure of wine shops. The news spread very fast and women of about 5000 villages got inspired and met together in meetings, passed resolutions for the complete prohibition, and sent these resolutions to the District Collector and higher authorities. Due to women’s protests, the arrack auctions in the Nellore district were postponed 17 times. In 1992, women took out a big procession in Hyderabad to protest against the sale of ‘arrack’.

2. Women also raised the issue of domestic violence: the Anti-arrack movement became a part of the women’s movement.

Question 3.
Explain the role of Environ¬mental movements to meet the challenge of environmental degradation. (C.B.S.E. 2016)
Answer:
Following are the role of Environmental movements to meet the challenge of environmental degradation-
1. Chipko Movement: Chipko Movement literally means ‘Hug the Trees’ Movement. This movement began in two or three villages of Uttarakhand in 1972. There was a dispute between the local villagers and a logging contractor who had been allowed to fell trees in a forest close to the village. The villagers protested against the logging contractor and the government. Chipko Movement is seen not only as a movement to save the environment but also as a feminist movement.

2. Narmada Bachao Andolan: Narmada Bachao Aandolan is a movement to save the Narmada river. It was around 1988-89 that issues crystallized under the banner of the NBA. Initially, the movement demanded proper and just rehabilitation of all those who were directly or indirectly affected by the project.

Question 4.
Where and when was the organization ‘Dalit Panthers’ formed? Describe any three of its activities. (Imp.) (C.B.S.E. 2013)
Or
Describe any four activities of the Dalit Panthers to promote their interests. (C.B.S.E. 2018)
Answer:
Dalit Panthers was an organization of educated Dalit youths. Babu Rao Bagul, E.P. Soukamble gave direction to Dalit policies through their poems, literature, and biographers. Dalit Panthers openly challenged casteism and Brahmanism.

Dalit Panthers raised the following issues for the welfare of Dalits:

1. The Panther’s aim was to unite the Dalits and to bring them into their fold.
2. According to the manifesto of Dalit Panthers, Dalit word includes Scheduled Castes and Tribes, new Buddhists, economically backward workers, women, landless as well as poor peasants, and all those persons who were being exploited.
3. According to Dalit Panther’s manifesto, the main problems of Dalits are lack of food, water, shelter, jobs, land, and their unequal social status and atrocities on them.
4. According to Dalit Panthers, their problem could be solved by acquiring economic and political power.

Question 5.
Mention four weaknesses of Mass Movements. (C.B.S.E. 2013)
Answer:

1. National Interest is Ignored. Generally, the aims of all Mass movements are to fulfill the local and regional needs. No importance is given to the national interest.
2. Sometimes Turns Violent. Many times in the past mass movements have turned violent to achieve their objectives. Thus, it is often believed that mass movements may become violent.
3. Narrow Outlook. The Mass Movements have a very narrow outlook because generally, these movements revolve around only one issue.
4. Creates Problems in Law and Order. To get their demands fulfilled all types of methods are used by the mass movements. Many times illegal and unconstitutional methods create law and order problems.

Question 6.
Assess any two positive aspects of the Chipko Movement. (Imp.) (C.B.S.E. 2015)
Answer:

1. Chipko movement to hug trees was one of the first grassroots environmental movements, which
   attracted national and international attention. The villagers did not allow the outsiders to exploit the forest recklessly. Natural resources would be rather well-maintained and effectively controlled by the local communities.
2. Chipko movement was not only a movement to save the environment but it is also seen as a ‘feminist movement’. This movement created a platform to discuss social and economic issues such as alcoholism. It also discussed the issues of landless forest workers and asked for guarantees of the minimum wage.

Question 7.
State any two main demands of the Narmada Bachao Aandolan. (Imp.) (C.B.S.E. 2015)
Answer:

1. In the beginning, the movement demanded proper rehabilitation of all those who were directly or indirectly affected by the Narmada Project.
2. The NBA also emphasized that people of the area must have a say in decision-making. They should also have effective control over natural resources like water, forests, etc.

Rise of Popular Movements Important Extra Questions Long Answer Type

Question 1.
What are Popular Movements? Describe any four benefits of popular movements. (C.B.S.E. 2013)
Or
Describe any six advantages of popular movements. (C.B.S.E. 2015)
Answer:
When any movement is actively supported by a large section of the society, it is called a popular movement. It can be party-based or non-party based.

Benefits of Popular Movements
1. Helpful to Understand Democratic Politics. The history of popular movements helps us to understand better the nature of democratic politics. Popular movements come up to rectify some problems in the functioning of party politics and should be seen as an integral part of our democratic politics.

2. Effective Representation to Different Groups. Popular movements represent new social groups whose economic and social grievances were not redressed in the realm of electoral politics. Popular movements ensured effective representation of different groups and associations.

3. Mass Movements railed Legitimate demands of the People. Generally, popular movements have raised legitimate demands of the people and have involved greater participation of the masses. Mainly workers, farmers, and poor people participate in these popular movements.

4. Govt, is compelled to accept Genuine Demands. Many times even the most genuine demands of the people are not accepted by the government. Then it is through popular movements that the government is compelled to accept the demands of disadvantaged social groups.

5. Popular movement includes a various dimensions of public welfare.

6. Popular movement spread awareness among peoples.

Question 2.
Write an essay on the Women’s Movement in India.
Answer:
No doubt the condition of the women even today, is not good, but a psychological change has been witnessed in the women. The personality cult of women is on the rise and they have become active for the protection of their interests. The women’s movement has played a very important role in the emancipation of the dignity and status of women.

Women’s Movement in the 19th century. The Women’s movement in India had its origin in the nineteenth century. Mahila Mandals were organized for the first time by the Arya Samaj and the Brahmo Samaj. The Ramakrishna Mission and Theosophical Society which were established at the end of the 19th century worked for the welfare of women. These societies especially emphasized women’s education. In the 19th century, the Women’s movement was dominated by men. The main issues of Women’s movements were purdah, child marriage, enforced widowhood, etc. Sati was banned in 1829.

Women’s Movement in the 20th century. In 1924, the All India Women’s Conference (AIWC) was established. This organization demanded-education for women, economic equality, the right to inheritance, divorce, pension of widows, etc. AIWC also raised a voice for the right to vote for women. In 1931, AIWC put demands for creches, nursery schools, ante-natal and post-natal care, and maternity homes in factories where women worked in considerable numbers. Due to Mahatma Gandhi, women also started participating in the Gandhian Movement.

After independence, the Indian Constitution was formulated on the concept of equality – legal, social, and economic. Hindu Code Bill was passed for the welfare of Hindu Women. But there is a great need for a Common Civil Code. In local bodies, 30% of seats are reserved for women.

According to a UNICEF Report (1988), a hundred million women work on the margins of life in India’s vast unorganized sector to tackle the twin problems of poverty and discrimination. In the unorganized sector, the implementation of minimum wages has not been done.

Autonomous Women’s Movement. In the 70s many autonomous Women’s movements such as Chipko Movement (1974-77). Self-Employed Women’s Association (SEWA) was established in 1972 in Gujarat. The Working Women’s Forum (WWF) was established in Chennai by Jay Arunachalam in 1978. By the 1990s, the WWF began to function in four states – Tamil Nadu, Andhra Pradesh, Karnataka, and Uttar Pradesh.

At present, various women organizations in India are working for the protection of the interests of women. The main organizations among them are -All India Women Conference, National Council of Women in India, Bharatiya Gram Mahila Sangh, National Federation of Indian Women, etc.

Question 3.
What is meant by Chipko Movement? When did it start and j where? What is the significance of this j e movement in the conservation of the environment? (Imp.)(C.B.S.E. 2011, Delhi)
Answer:
Chipko Movement shows that tribals are mostly dependent upon forest products for their primary needs and survival. But the forest policies and management are blind to the needs of the common people. Chipko Movement began in two or three villages of Uttarakhand when the forest department refused permission to the villages to fall ash trees for making agricultural tools. The forest department allotted the same piece of land to some sports contractor for commercial use. Thus, the villagers protested against this decision of the government.

Chipko Movement (1947-77), hugging trees to prevent them from being cut down, linked the issue of environmental degradation of women’s increasing toil for fuel and fodder. This movement was started under the leadership of Chandi Prasad Bhatt and Sunderlal Bahuguna.

Major Issues Related to Chipko Movement.

Major demands or major issues of the Chipko Movement are as follows:

1. Natural resources such as land, water, forests, etc., should be under the control of local communities.
2. Forest contracts should be given to the local people and not to the outsiders.
3. Minimum wages of the workers working in forests should be fixed.
4. Low-cost material should be provided to small- scale industries.
5. Women asked the government to enforce prohibition.

Significance of Chipko Movement.

1. This movement to ‘hug trees’ was one of the first grassroots environmental movements, which attracted national and international attention.
2. Chipko Movement was not only a movement to save the environment but it is also seen as a ‘feminist movement’ not only because of the active participation of women but also because deforestation was seen as affecting women’s lives in the hills in their search for fuel and fodder.
3. Chipko Movement was not only a movement to save the environment but it had a larger social base. Women protested against the drinking habit of men.
4. The government issued a ban on the felling of trees in the Himalayan region for fifteen years.
5. Chipko movement created awareness among the women of the hilly region as women became aware of their rights.

Question 4.
What was the main recommendation of the Mandal Commission? How was it implemented? (C.B.S.E. 2008)
Or
What are the recommendations of the Mandal Commission? What was the aftermath of the Mandal Commission?
Answer:
The Mandal Commission was set up by the Janata government on Jan. 1, 1979. The Mandal Commission was headed by B.P. Mandal, former Chief Minister of Bihar. The Mandal Commission was to determine the criteria for defining the socially and educationally backward classes. It was to recommend necessary measures for the advancement of the backward classes. The Mandal Commission identified 3,743 other backward classes. The recommendations of the Mandal Commission are as follows :

1. Twenty-seven percent of the posts in public services should be reserved for OBCs. They do make 52 percent of the total population yet the reservation quota for them cannot exceed this limit.
2. Welfare programs specially meant for other backward classes should be financed by the Government of India in the same manner and to the same extent already done in the case of Scheduled Castes and Scheduled Tribes.
3. Radical land reforms should be brought about by states to free small landholders from their heavy dependence on rich peasants for their subsistence.
4. Other Backward Classes should be encouraged and helped to set up small-scale industries.
5. Special educational schemes, with emphasis on vocational training, should be started for OBCs. They should also be given special coaching in technical and professional institutions to enable them to compete with students from the open quota.

Implementation of the Mandal Report. The Commission submitted its report to the government in December 1980. It was presented to both the Houses of the Parliament on April 30, 1982. Ever since then there has been a continuous and persistent demand for an outright acceptance of its recommendations without any further scrutiny. National Front had promised in its poll manifesto to implement the Mandal Commission Report. But the ruling party leaders had aired conflicting views about it. However, Prime Minister Mr. V.P. Singh announced all of a sudden the acceptance of the Mandal Report on August 7, 1990, in the Parliament without taking into confidence even his own Cabinet colleagues for reasons of political expediency.

But this move of Mr. V.P. Singh had alienated his senior-most colleagues, provoked the Bharatiya Janata Party and C.P.M. to denounce publicly this rash decision. The student community that had been seriously hit by the implementation of the Report had launched a massive movement throughout the country and initially brought the government to a collapsing point. The anti-reservationists stir had reached a new peak of frenzied violence especially in New Delhi, Chandigarh, Kurukshetra, Jammu, Jaipur, and many other cities of north India.

In November 1992 the Supreme Court held the order of V.P. Singh’s government to be valid and enforceable subject to the exclusion of the ‘Creamy Layer’ or the more advanced section of the beneficiary backward classes within four months. The Supreme Court also held that the maximum size of all reservations together must not exceed 50 percent.

Question 5.
Describe the journey of the movement for Right to Information which, ultimately culminated into an Act. i.e. RTI Act. 2005. (C.B.S.E. 2016)
Answer:
In 1990, the Mazdoor Kisan Shakti Sanghathan (MKSS) in Rajasthan took the initiative in demanding records of famine relief work and accounts of laborers. The demand was first made by the people of Bhim Tehsil. The villagers asserted their right to information. In 1994 and 1996, the MKSS organized Jan Sunwais or Public hearings, where the administration was asked to explain its stand in public.

In 1996 this organization formed the national council for People’s Right to Information in Delhi to raise the Right to Information to the status of the national campaign. The Consumer Education and Research Centre, shouric committee, and press council proposed a draft for the Right to Information Law. Finally, the Right to Information Act came into effect in 2005. This law makes the country more democratic and public-oriented.

Question 6.
What was Narmada Bachao Andolan? What was its criticism against it? (Imp.)(C.B.S.E. 2008 Outside Delhi Set-I)
Or
What was Narmada Bachao Andolan? What were its main issues? What democratic strategy did it use to put forward its demands? (C.B.S.E. 2012 Outside Delhi) :
Answer:
The Narmada Valley project was conceived in 1946, but final planning and work on it started only after the Narmada Water Disputes Tribunal passed its order in 1978. In the early eighties, an ambitious development project was launched in the Narmada Valley of Central India. If completed, the Narmada Project will rank as the largest irrigation project planned and implemented in the world. The Narmada Project consisted of 30 big dams, 135 medium-sized dams, and 3000 minor dams. Out of the thirty major dams, the most controversial ones are the Sardar Sarovar Project (SSP) in Gujarat and the Narmada (Indira) Sagar Project in Madhya Pradesh.

Narmada Project has given rise to a powerful social movement. The movement against the Sardar Sarovar Project started in 1985. In 1986, Narmada Dharangrast Samiti (NDS) began to investigate the problem under the leadership of Medha Parker. They found that environmental impact has not been studied, the number of people to be displaced was not known, an estimate of land to get irrigation water had been exaggerated, etc.

Thus, in 1989, organizations like NDS, Maharashtra Ghati Navnirman Samiti, Narmada Asargrasta Sangharsha Samiti, and few others emerged to form Narmada Bachao Andolan (NBA). Since the formation of the NBA, there have been many protests, demonstrations, Jal Samadhi, and sit-ins. One of the important events in the history of the NBA has been the filing of a petition against the dam by the NBA in 1994. In May 1997, the Supreme Court halted the construction of the dam, but in its 2000 judgment, it gave a green signal for it. Narmada Bachao Andolan has also become the center of national and international concerns.

In the beginning, the movement demanded proper rehabilitation of all those who were directly or indirectly affected by the Narmada Project. The NBA also emphasized that people of the area must have a say in decision-making. They should also have effective control over natural resources like water, forests, etc. In 2003, the government formulated National Rehabilitation Policy and this is a major achievement of the NBA.

Criticism of NBA. NBA has been criticized by many on the ground that its demand to stop the construction of dams is against the process of development. For the development of the area, the construction of the Narmada Project is very essential.

Question 7.
Study the passage given below and answer the questions that follow: (C.B.S.E. 2014)

Sardar Sarovar Project is a multi-purpose mega-scale dam. It required the relocation of around two and a half lakh people from the villages. Issues of relocation and proper rehabilitation of the project-affected people were first raised by the local activist groups. It was around 1988-89 that the issues crystallized under the banner of the NBA — a loose collective effort of local voluntary organizations.
(i) Why is the Sardar Sarovar Project mentioned as a multipurpose mega-scale dam?
Answer:
Sardar Sarovar Project is mentioned as a multipurpose mega-scale dam as it would benefit huge areas of Gujarat and three other states in terms of availability of drinking water, irrigation, generation of electricity, and increase in agricultural production.

(ii) Why was it opposed by the villagers?
Answer:
The villagers opposed the dam because due to the building of a dam, 245 villages from these were expected to get submerged.

(iii) What was the main demand of the local activist groups?
Answer:
The main demand of the local activist groups were relocation and proper rehabilitation of the project affected peoples.

Question 8.
Suppose you are an important leader of the Farmers agitation, The government authorities ask you to present any three demands on j behalf of the farmers. On a priority j basis, which three demands will you make? Support your demands with appropriate arguments. (C.B.S.E. 2015)
Answer:
As a leader of farmers’ agitation, one can put the following demands on behalf of the farmers:
1. The government should solve the problem of land acquisition. Without the approval and consent of the farmers, government or builders, etc., should have no right to acquire the land of farmers. Even if the farmers give their consent to acquiring their land, they should also be given proper compensation for that particular land.

2. Another important demand and problem are sugarcane crops. Sufficient delay and wastage of time and energy are suffered by the farmers in bringing their sugarcane crops to sugar mills. Poor farmer wastes their days and nights together just in sitting on the trucks of sugarcane. Even the mill owners do not pay the price of their crops in time and properly. The government should intervene from the side of farmers for proper-payment of crops and avoid unnecessary delay.

3. In spite of sufficient stocks and good qualities of urea, poor farmers do not get this facility in time. So as a leader of the Kisan Union, the government should be pressurized the supply urea and other fertilizers in time.

4. Government should make efforts to provide pension to the farmers so that they can lead the rest of the life in comfort.

5. In case some farmers face too many hardships when their crops fail due to recurrent floods or irregular monsoon. These farmers are unable to repay loans as they are caught in the debt trap. The vicious circle of poverty makes their condition so miserable that in an agony of being unable to repay loans are forced to commit suicide in order to relieve themselves. In such conditions, their families too suffer the same hardships. Thus in such cases, governments should exempt such farmers from paying loans.

6. The electricity should be supplied to the farmers at reasonable rates. There should also be easy inter-state movements for farmers’ goods without any restrictions.

Question 9.
Describe how the Anti Arrack campaigns contributed a great deal in increasing overall social awareness about women’s questions. (C.B.S.E. sample Q.P. 2017)
Answer:
Anti-Arrack Movement in Andhra Pradesh was definitely a movement of women. In the Nellore district of Andhra Pradesh, women came together in a spontaneous local initiative to protest against arrack (Local alcohol) and forced the closure of wine shops. The news spread very fast and women of about 5000 villages got inspired and met together in meetings, passed resolutions for the complete prohibition, and sent these resolutions to the District Collector and higher authorities. Due to women’s protests, the arrack auctions in the Nellore district were postponed 17 times. In 1992, women took out a big procession in Hyderabad to protest against the sale of ‘arrack’.

1. Women also raised the issue of domestic violence.
2. As a result, the movement made a demand for equal representation to women in politics.
3. Women also raised the demand for reservation in the state legislature and Lok Sabha.
4. In Anti Arrack movement, the issue of gender equality was also raised.

Question 10.
Study the following passage carefully and answer the questions that follow: (C.B.S.E. 2017)
Answer:
Critics of popular movements often argue that collective actions like strikes, sit-ins, and rallies disrupt the functioning of the government, delay decision-making, and destabilize the routines of democracy. Such an argument invites deeper questions: why do these movements resort to such assertive forms of action? We have seen that popular movements have raised legitimate demands of the people and have involved large scale participation of citizens. It should be noted that the groups mobilized by this movement are poor, socially and economically disadvantaged sections of the society from marginal social groups.
(i) Popular movements resort to which two types of assertive actions?
Answer:
Popular movements resort to two types of assertive actions:
(a) strikes (b) sit-ins and rallies.

(ii) How far do you agree with the arguments given by the critics?
Answer:
We agree with the critics to some extent that sometimes these movements resort to such assertive forms of action, that they become violent in nature and cause the destruction of public property.

(iii) Why are groups involved in popular movements mostly from marginal social groups?
Answer:
The popular movements involve mostly marginal social-groups, because the people of these groups are poor, socially and economically deprived of their rights, and disadvantaged sections of society.

Question 11.
In the given political outline map of the World, five countries have been shown as (A), (B),(C),(D), and (E). With the help of the information given below, identify these countries and write their correct names along with the serial number of the information used and the related alphabet as per the following format in your answer-book: (C.B.S.E. 2017)

(i) The country where Montreal Protocol was signed in 1987.
(ii) This country is of the view that the major responsibility of curbing gas emissions rests with the developed countries.
(iii) This country is known for its forest movements.
(iv) The first anti-dam movement aimed to save the Franklin River and its surrounding forests was launched in this country.
(v) The largest producer of mineral oil in the world.

S. No. of the information used	Alphabet concerned	Name of the country
(a) The country where Montreal protocol was signed in 1987.	C	Canada
(b) This country of view that the major responsibility of curbing gas emissions rests with the developed countries.	E	India
(c) This country is known for its forest movement.	D	Mexico
(d) The first anti-dam movement aimed to save the Franklin River and its surrounding forests were launched in this country.	B	Australia
(e) The largest producer of mineral oil in the world.	A	Saudi Arab

Note: The following questions are for the Visually Impaired Candidates only, in lieu of the above questions
(i) Mention any two environmental concerns that have a long history.
Answer:
(a) Cultivable area is barely expanding any more, and a substantial portion of existing agricultural land is losing fertility.
(b) The loss of biodiversity continues due to the destruction of habitat in areas that are rich in species.

(ii) Explain the significance of the Earth Summit’ held in 1992.
Answer:
The growing focus on environmental issues within the areas of global politics was firmly consolidated at the U.N. conference on the environment held in Rio de Kaneria, in June 1992.

(iii) Highlight any two features of the Kyoto Protocol.
Answer:
(a) The Kyoto Protocol is an international agreement setting targets for industrialized countries to cut their greenhouse gas emissions.
(b) The protocol was agreed to in 1997 in Kyoto, Japan on the principles set by the United Nations Framework Convention on Climate Change.

Question 12.
Read the passage given below carefully and answer the following questions: (C.B.S.E. 2019)

The movement began in two or three villages of Uttarakhand when the forest department refused permission to the villagers to fell ash trees for making agricultural tools. However, the forest department allotted the same patch of land to a sports manufacturer for commercial use. This enraged the villagers and they protested against the move of the government. The struggle soon spread across many parts of the Uttarakhand region. Larger issues of ecological and economic exploitation of the region were raised.
(i) Identify the popular movement which is being referred to in the given passage. What was the novel aspect of this movement?
Answer:
The popular movement which is being referred to in the given passage is the ‘Chipko movement’. Women’s active participation in this, the movement was the novel aspect of this movement.

(ii) Which issues of ecological and economic exploitation were raised in this movement?
Answer:
Chipko movement raises larger issues of ecological and economic exploitation. For example, local citizens should have effective control over natural resources. They also demanded that government should provide low-cost materials to small industries. People also demanded the economic issues of landless forest workers and guarantees of minimum wages. People wanted a government that ensures development without degrading the ecological balance.

(iii) Highlight the achievements of this movement.
Answer:
Government-issued a ban on the felling of trees for 15 years. Chipko movement became a symbol of many such popular movements.

Rise of Popular Movements Important Extra Questions HOTS

Question 1.
What is Chipko Movement?
Answer:
Chipko Movement literally means ‘Hug the Trees’ Movement. This movement began in two or three villages of Uttarakhand in 1972. There was a dispute between the local villagers and a logging contractor who had been allowed to fell trees in a forest close to the village. The villagers protested against the logging contractor and the government. Chipko Movement is seen not only as a movement to save the environment but also as a feminist movement.

Question 2.
What is Narmada Bachao Aandolan?
Answer:
Narmada Bachao Aandolan is a movement to save the Narmada river. It was around 1988-89 that issues crystallized under the banner of the NBA. Initially, the movement demanded proper and just rehabilitation of all those who were directly or indirectly affected by the project.

Question 3.
What is Sardar Sarovar Project?
Answer:
Sardar Sarovar Project is a multipurpose mega-scale dam. This project was launched in the Narmada valley of Central India in early 1980. The project consisted of 30 big dams, 135 medium-sized dams and around 300 small dams to be constructed on the Narmada. Sardar Sarovar Project is in Gujarat.

Question 4.
What do you understand by Anti-Arrack Movement?
Answer:
Anti-Arrack Movement was started by women in the Southern district of Andhra Pradesh. Women demanded a ban on the sale of alcohol (arrack) in their neighborhood. The women of village Gundhur in Kalihari Mandal of Chittoor district assembled and resolved to put an end to the sale of liquor in their village. Rural women led the anti-arrack movement. Moreover, the anti-arrack movement also became part of the women’s movement.

Question 5.
Mention four features of Social Mass Movements.
Answer:

1. Political Nature. Generally, Social Movements are not political because their objective is not to acquire political power. Their primary objective is to create awareness among the people about their interests and to put pressure on the government to achieve their goals.
2. Violent and Non-violent. Social Movements can turn violent as well be non-violent. For example, Chipko Movement was non-violent whereas the Naxalbari movement was violent.
3. Mode of Social Movement. Sometimes Social Movements become the mode of social change.
4. Social mass movements spread awareness among people.

Here we are providing 1 Mark Questions for Political Science Class 12 Chapter 6 International Organisations are the best resource for students which helps in class 12 board exams.

One Mark Questions for Class 12 Political Science Chapter 7 Rise of Popular Movements

Question 1.
Which one of the two is more essential-construction of mega dams or an environmental movement that oppose it and why ? (C.B.S.E. 2016)
Answer:
The more essential is the construction of mega dams because they help in solving the problem of water and electricity of that area. People get employment also thus, construction of mega dams is very helpful for the development.

Question 2.
Highlight the most novel aspect of the Chipko Movement. (Imp.) (C.B.S.E. 2016)
Answer:
Women’s active participation in the Chipko Movement was a very novel aspect of the movement.

Question 3.
How did the farmers associated with Bharatiya Kisan Union differ from the most other farmers in India ? (C.B.S.E 2016)
Answer:
Farmers associated with Bharatiya Kisan Union grew cash crops for market.

Question 4.
What was the Anti-Arrack Movement? (Sample Paper C.B.S.E. 2010, 2012)
Answer:
Anti-Arrack Movement was started in Andhra Pradesh and demanded prohibition on the sale of arrack (alcohol).

Question 5.
What was Chipko Movement ? (C.B.S.E. 2008, 2012)
Answer:
The Chipko Movement (1974-77), hugging trees to prevent them from being felled, linked the issue of environmental degradation to women’s increasing toil for fuel and fodder.

Question 6.
What was the main objective of the Dalit Panthers ? (C.B.S.E. 2011 Delhi)
Answer:
The Panthers’ aim was to unite the Dalit and to bring them into their fold.

Question 7.
Name the popular movement which demanded that no forest exploiting contract be given to any outsider. (CiB.S,E. 2013)
Answer:
Chipko Movement.

Question 8.
Shetkari Sanghatahna and Raitha Sangha belonged to which two respective states ?
Answer:
Shetkari Sanghatahna belonged to Maharashtra and Raitha Sangha belonged to Karnataka.

Question 9.
Why the ongoing environmental movements are opposing the construction of mega dams ? (C.B.S.E. Sample Paper 2018)
Answer:
Construction of mega dams results in the displacement of large number of people living around that area.

Question 10.
Which popular movement led to the empowerment of women ? (C.B.S.E. 2018)
Answer:
Chipko movement led to the empowerment of women.

Question 11.
Explain the main recommendation of the Mandal Commission. (C.B.S.E. 2019)
Answer:
The main recommendation of Mandal Commission is 27% of the posts in Public services should be reserved for O.B.Cs.

Here we are providing 1 Mark Questions for Political Science Class 12 Chapter 6 The Crisis of Democratic Order are the best resource for students which helps in class 12 board exams.

One Mark Questions for Class 12 Political Science Chapter Chapter 6 The Crisis of Democratic Order

Question 1.
What was the main demand of the railway men during strike ? (C.B.S.E. 2012 Delhi)
Answer:
Bonus and improved conditions of service was the main demand of the railway men during the strike.

Question 2.
Why was the Congress party defeated during the elections of 1977 ? (Imp.) (C.B.S.E. 2014)
Or
Analyse any one reason for the defeat of the Congress Party in 1977. (C.B.S.E. 2018)
Answer:
The Congress Party was defeated in 1977 due to the imposition of emergency and practising of unconstitutional activities by its leaders.

Question 3.
Mention the main reason for the deafeat of The Congress Party in the elections of 1977. (C.B.S.E. 2014)
Answer:
The main reason for the deafeat of Congress Party in the elections of 1977 was internal emergency declared by the government.

Question 4.
How far do you agree that the proclamation of emergency weakened the federal distribution of power in India ? (Imp.) (C.B.S.E. 2015)
Answer:
During emergency, the federal distribution of power remained parctically suspended and all power was concentrated with the Union Government.

Question 5.
Who led the railway strike of 1974 ? What was its main demand ? (C.B.S.E. 2013)
Answer:
George Fernandes led the railway strike in 1974. Bonus and improved condition of service were the main demands of the railway employees.

Question 6.
Name any two opposition parties which were part of an electoral alliance in 1977, known as ‘Grand Alliance’. (C.B.S.E. 2013
Answer:
(1) Bharatiya Jan Sangh
(2) Swatantra Party.

Question 7.
Name the political party which came to power at the centre in 1977. (Imp.) (C.B.S.E. 2014)
Answer:
Janata Party.

Question 8.
Why did mid-term elections V take place in 1980 ? (C.B.S.E. 2014)
Answer:
Mid-term elections took place in 1980, because of the failure of the Janata Party Government.

Question 9.
Why did the magazines like ‘Seminar’ and ‘Mainstream’ chose to close down after the declaration of emergency in 1975 ? (C.B.S.E. 2012 Delhi)
Answer:
Seminar and Mainstream chose to close down because these magazines did not accept the censorship imposed on print media.

Question 10.
Indira Gandhi’s imposition of National Emergency in 1975 cannot be justified. Give one argument. (C.B.S.E. Sample Paper 2018)
Answer:
Indira Gandhi’s imposition of National Emergency in 1975 cannot be justified because Law and order situation in the country was mostly normal.

Choose the correct answer :

Question 11.
In which year internal emergency was declared by Smt. Indira Gandhi?
(a) 1965
(b) 1971
(c) 1975
(d) 1980
Answer:
(c) 1975

Question 12.
In which state Nav Nirman Movement was started ?
(a) Gujarat
(b) Punjab
(c) Bihar
(d) Haryana.
Answer:
(d) Haryana.

Question 13.
Match the following: (C.B.S.E. Sample Q.P. 2017)
(a) J.P. Narayan – (i) first prime minister belonged to non-congress
(b) Morarji Desai – (ii) Call for ‘Total Revolution’
(c) Ch. Charan Singh – (iii) Remained Prime Minister for four months only
(d) Jagjiwan Ram – (iv) Leader of ‘Congress for Democracy’
Answer:
(a) – ii, (b) – i, (c) – iii, (d) – iv.

Question 14.
Correct the following sentence and rewrite it. (Sample Paper 2019-20)
On June 1977, Prime Minister Morarji Desai recomended the imposition of the emergency to Gyani Zail Singh.
Answer:
On June 1975, Prime Minister Smt. Indira Gandhi recommend the imposition of the emergency to Fakhruddin Ali Ahmad.

Here we are providing Class 12 Political Science Important Extra Questions and Answers Chapter 6 International Organisations. Political Science Class 12 Important Questions are the best resource for students which helps in class 12 board exams.

Class 12 Political Science Chapter 6 Important Extra Questions International Organisations

International Organisations Important Extra Questions Very Short Answer Type

Question 1.
What is U.N.O.? (Imp.)
Answer:
United Nations Organisation is an international organization that was established after the Second World War on 24 October 1945. The United Nations represents the second measure effort in the twentieth century to achieve the goal of a better world through general international organizations of the States. U.N.O. is an associate of states and its primary objective is the maintenance of international organizations of the State. U.N.O. is an association of states and its primary objective is the maintenance of international peace and security.

Question 2.
Mention the names of six organs of the United Nations.
Or
Name any four main organs of the United Nations. (C.B.S.E. 2013)
Or
List any four Principle organs of the United Nation. (C.B.S.E. 2014)
Answer:
There are six organs of the U.N.

1. General Assembly
2. Security Council
3. The Economic and Social Council
4. International Court of Justice
5. Trusteeship Council
6. The Secretariat.

Question 3.
How many member countries have got Veto power in the U.N. Security Council and why? Imp. (C.B.S.E. 2011, Outside Delhi)
Or
Mention the names of any four permanent member states of the U.N. Security Council. (C.B.S.E. 2013)
Answer:
The Security Council consists of 15 members of which 5 members are permanent and 10 are non¬permanent. The 5 permanent members are

1. The U.S.A.,
2. Britain
3. Russia
4. France
5. The people’s Republic of China.

These permanent members enjoy the right of veto in the Security Council. These big powers were given the Veto power because with their cooperation international peace can be maintained. Moreover, without Veto power, big powers will lose interest in the United Nations and United Nations will become an ineffective body.

Question 4.
In 2003, the United States along with about 40 countries launched its invasion of Iraq in the name of preventing the development of weapons of mass destruction. Since no evidence of it was unearthed, what could be another reason for this invasion? (C.B.S.E. 2010)
Answer:
The following could be other reasons for this invasion:

1. To control the Iraqi oil field.
2. To install a regime friendly to the U.S.A.

Question 5.
Mention any two functions of the World Bank. (C.B.S.E. 2014)
Answer:
The functions of the World Bank are given below:

1. The World Bank works for human development, agriculture and rural development, environment protection, infrastructure, and good governance.
2. It provides loans and grants to the member countries.

Question 6.
Highlight any two objectives of Amnesty International. (C.B.S.E. 2010)
Answer:

1. the First objective of Amnesty International is to protect human rights all over the world.
2. It promotes respect for all human rights in the Universal Declaration of Human Rights.

Question 7.
Write the full form of any four of the following U.N. bodies: (Imp.) (C.B.S.E. 2010)
(a) UNESCO
(b) OPCW
(c) UNRISD
(d) WMO
(e) UNHCR
Answer:
(a) United Nations Educational, Scientific and Cultural Organisation.
(b) Organisation for the Prohibition of Chemical Weapons.
(c) United Nations Research Institute for Social Development.
(d) World Meteorological Organisation.
(e) United Nations Office of the High Commissioner for Refugees.

Question 8.
Why do we need organizations like the U.N.? (C.B.S.E. 2011, Delhi)
Or
Why is there a need for international organizations like U.N.? (C.B.S.E. 2013)
Answer:

1. International Organisations were helpful to stop wars and establish law and order in the world.
2. International Organisations were helpful in solving the problems, which were not solved by a nation.

International Organisations Important Extra Questions Very Short Answer Type (2 Marks)

Question 1.
Who is the present Secretary-General of the United Nations? (C.B.S.E. 2014)
Answer:
Antonio Guterres from Portugal is the present Secretary-General of U.N.

Question 2.
Mention any two agencies of the United Nations. (C.B.S.E. 2014):
Answer:

1. UNESCO
2. ILO is the two agencies of the United Nations.

Question 3.
What is World Health Organisation (WHO)? (Imp.) (C.B.S.E. 2010)
Answer:
World Health Organisation was established in 1940. Its main aim is to improve the health standard of the people of the world.
It has three organs.

1. World Health Council,
2. Executive Board and
3. Secretariat.

Question 4.
Write the full form of I.M.F. (C.B.S.E. 2010 Delhi)
Answer:
International Monetary Fund.

Question 5.
Highlight any one benefit of having an international organization. (C.B.S.E. 2019)
Answer:
An international organization can maintain peace and order in the world.

Question 6.
How many permanent members and how many non-permanent members are there in the U.N. Security Council? (C.B.S.E. 2013)
Answer:
There are 5 permanent and 10 non-permanent members in the U.N. security council.

Question 7.
Mention any one objective of the United Nations? (C.B.S.E. 2013)
Or
What are the main objectives of the United Nations? (C.B.S.E. 2014)
Answer:
To save succeeding generations from the scourge of war.

Question 8.
Correct the following statement and rewrite.

Eight temporary members of the U.N. Security Council are elected by the general assembly for a period of two years. (C.B.S.E. 2012 Delhi)
Answer:
Ten temporary members of the U.N. Security Council are elected by the general assembly for a period of two years.

Question 9.
Mention the main function of the World Trade Organisation. Imp. (C.B.S.E. 2013)
Answer:
The World Trade Organisation sets the rules for global trade.

Question 10.
Mention any one function of the World Bank. (C.B.S.E. 2013)
Answer:
World Bank provides loans and grants to the member countries.

Choose the correct answer:

Question 11.
India became a member of the U.N. in:
(a) 1945
(b) 1947
(c) 1950
(d) 1962.
Answer:
(a) 1945.

Question 12.
Who was the first woman President of the U.N. General Assembly?
(a) Sarojini Naidu
(b) Aruna Asaf Ali
(c) Vijay Lakshmi Pandit
(d) Raj Kumari Amrit Kaur.
Answer:
(c) Vijay Lakshmi Pandit.

Question 13.
Which one of the following is not a permanent member of the U.N. Security Council?
(a) Russia
(b) India
(c) China
(d) France.
Answer:
(b) India.

Question 14.
Who blocked the Second term for Boutros Ghali as Secretary-General?
(a) USA
(b) India
(c) France
(d) China.
Answer:
(a) the USA.

Question 15.
“The United Nations was not created to take humanity to the heaven, but to save it from the hell.” Who made this statement?
(a) Pt. Jawaharlal Nehru
(b) Kofi Annan
(c) Ban Ki-moon
(d) Dag Hammarskjold.
Answer:
(d) Dag Hammarskjold.

International Organisations Important Extra Questions Short Answer Type

Question 1.
What is Amnesty International? State its mains functions. Imp. (C.B.S.E. 2016, 2017)
Answer:
Amnesty International is a non-governmental organization that is working in the international field. It campaigns for the protection of human rights all over the world.

1. the First objective of Amnesty International is to protect human rights all over the world.
2. It promotes respect for all human rights in the Universal Declaration of Human Rights.

Question 2.
What is the full form of W.T.O.? When was it set up? How does it y function? Imp. (C.B.S.E. 2016, 2017)
Answer:
The emergence of W.T.O. (World Trade Organisation) is another feature of globalization. W.T.O. came into being on 1 Jan. 1995 at Marrakesh. W.T.O. is an indication of the globalization process. Martin Shaw observes that although “The W.T.O. remains dominated by the west and is partly a forum for resolving into western economic differences, it is not more or less universally accepted as the framework for regulating trade, as China’s admission in 1996 recognized.”

At present, it consists of 161 members. W.T.O. is trying to give a shape, order, and direction to the world trade by securing unanimous agreements after deliberating on trade issues as linked to competition, investment, etc.

Question 3.
Why do some countries question the issue of India’s inclusion as a permanent member of the U.N. Security Council? Explain. (C.B.S.E. 2016)
Or
Why do some countries question India’s inclusion as a permanent member of the U.N. Security Council? Explain. (C.B.S.E 2017)
Answer:
India’s inclusion as a permanent member of the U.N. Security Council is always questioned for the following reasons:

1. Some nations are worried about India’s nuclear weapons capabilities.
2. Some other nations are of the view that Indo- Pak relations will make India as ineffective as a permanent member.
3. It is feared that some emerging powers such as Brazil, Germany, and Japan, etc. have to be accommodated if India is included.
4. There are those who feel that Africa and South America must be represented in any expansion of the permanent membership.

Question 4.
“The U.N. is an imperfect body but without it, the world would be worse off.” Explain the statement. (C.B.S.E. 2019)
Answer:
There are reasons for the fact that ‘the U.N. is an imperfect body but without it, the world would be worse off’.

1. The U.N. provides an arena in which it is possible to modify the attitude and policies of other countries. U.N. does provide a space within which arguments against specific U.S. attitudes and policies are heard.
2. Without the U.N. the world would be worse off as there will be more threats of war and conflicts.
3. It avoids international wars or chances of the third war of giving balancing through discussions and compromises.
4. Terrorism too will get encouragement.

Question 5.
What is Human Rights watch? Describe its main contribution to the field of Human Rights. (C.B.S.E. 2016)
Answer:

1. Human Rights Watch in a Non-Governmental organization working in research and Advocacy on Human rights.
2. It drew the global media’s attention to Human Rights abuses.
3. It helped in building international coalitions like the campaigns to ban landmines.
4. It stops the use of child soldiers and establishes the international criminal court.

Question 6.
Highlight any four factors which justify India’s claim to a permanent seat in the U.N. security council. (C.B.S.E. 2018)
Answer:

1. India is the second-most populous country in the world comprising almost one-fifth of the world population.
2. India is the largest democratic country in the world.
3. India has full faith in the U.N. and it has actively participated in all initiatives of the United Nations.
4. India has played an important role in the peace-keeping efforts of the U.N.

Question 7.
Describe any four criteria that have been proposed in recent years for new permanent and non-permanent members of the Security Council. (C.B.S.E. 2008, 10, 13, 19)
Answer:
The following are the four criteria that have been proposed for new permanent and non-permanent members of the Security Council of the U.N:

1. A major military power.
2. A big economic power.
3. A major contributor to the budget of U.N.
4. A big nation in terms of the large population.
5. A democratic country having great respect for democracy and human rights.

Question 8.
Why can the U.N. not serve as a balance against the U.S. dominance? Explain. (C.B.S.E. 2019)
Answer:
Following are the reasons for which the U.N. cannot serve as a balance against the U.S. dominance.

1. Only U.S. is a big power in the absence of U.S.S.R. and U.S.A. power cannot be easily checked.
2. Due to the disappearance of the Soviet Union, the U.S.A becomes the only superpower with its military and economic powers, ignore the U.N. and any other international organization.
3. The U.S. has unmatched financial powers is the single largest contributor to the U.N.
4. the U.S. has its “Veto’ power and can stop any moves that are against its interests. The U.S. can and does use this power to ‘split’ or reduce opposition to its policies.

Question 9.
What is veto power? Which member nations of the U.N. security council enjoy this special power and why? (C.B.S.E. 2017)
Answer:
The Security Council of the United Nations consists of 15 members, five of which are permanent. The permanent members are-U.S.A., England, France, Russia, and China. Ten members are non-permanent or temporary. These non-permanent members are elected by the General Assembly for a period of two years. The permanent members of the Security Council enjoy the power of Veto.

Veto power is a special power of permanent members by which they can affect the decisions of the Security Council. To take a decision on any important issue, nine votes including five permanent members of the Security Council are required. If any permanent member of the Security Council casts its votes against the resolution, the decision cannot be taken. This practice is called the ‘Veto Power’. The term ‘Veto’ is originated from a Latin word that means, ‘I say no Remember, the absence of any permanent member from proceeding does not mean that it can cast its Veto.

International Organisations Important Extra Questions Long Answer Type

Question 1.
Mention the six principal organs of the United Nations and describe the functions of any two of them. (C.B.S.E. 2017)
Answer:
There are six organs of the U.N.

1. General Assembly
2. Security Council
3. The Economic and Social Council
4. International Court of Justice
5. Trusteeship Council
6. The Secretariat.

Functions of General Assembly:

1. The General Assembly may attract the attention of the security council towards a situation disturbing international peace and security.
2. The Non-permanent members of the security council and all members of the Trusteeship Council and those of the Economic and Social Council are all elected by General Assembly.

Functions of Security Council: For this, see Textual Question N. 8.

Question 2.
Describe the composition of the U.N. Security Council. What is the: major difference in privileges given: to its permanent and non-permanent members. (C.B.S.E. 2016)
Answer:
Security Council is the most important and powerful organ of the United Nations. It is also regarded as the executive of the U.N. Security Council which is mainly responsible for the maintenance of international peace and security. It consists of 15 members, five of which are permanent members of the Security Council. The permanent members are – U.S.A. Britain, Republic of China, France, and Russia. Ten members are non-permanent. These non-permanent members are elected by the General Assembly for a period of two years. No state can be an elected member for two consecutive terms.

The major difference in Privileges given to the permanent and non-permanent members:

1. Five members (USA, Russia, England, France, China) are permanent members, while 10 other non-permanent are elected by the General Assembly for a period of two years.
2. The five permanent members enjoy Veto Power. But non-permanent members have not these privileges.

Question 3.
State any six post-Cold War changes that have necessitated reform to make the U.N. work better. Imp. (C.B.S.E. 2016) Or
Mention any six post-cold war changes that have necessitated reform to make the United Nations work better. (C.B.S.E. 2017)
Answer:
Following are the post-Cold-War changes the have necessitated reform to make the U.N. work better:

1. The U.S. stands as the only superpower after the disappearance of the Soviet Union.
2. The terrorist event of 9/11 compelled the U.N. to work better to maintain peace and order.
3. Rising China as a big power was also a check on the U.S.
4. U.N. is also involved and affected by world-wide problems like AIDS, terrorism, nuclear weapons, environmental globalization, civil-wars, etc.
5. After the end of the Cold-War, many newly independent countries emerged.
6. After the end of Cold-War new developing nation like India emerged as an economically developing nation and not fully economically begged upon U.N.

Question 4.
Describe any six criteria for the new members of the Security Council as suggested after 1997. (C.B.S.E. 2015)
Or
Describe the three new criteria that have been proposed for new permanent members of the U.N. Security Council. (C.B.S.E. 2017)
Or
Examine the six reforms proposed as criteria for new permanent and non-permanent members of the U.N. Security Council. (C.B.S.E. 2018)
Answer:
Security Council is the most important and powerful organ of the United Nations. It is also regarded as the executive of the U.N. Security Council which is mainly responsible for the maintenance of international peace and security.

It consists of 15 members, five of which are permanent members of the Security Council. The permanent members are the U.S.A., Britain, the Republic of China, France, and Russia. Ten members are non-permanent. These non-permanent members are elected by the General Assembly for a period of two years. No state can be an elected member for two consecutive terms.

1. Economically Strong: For the permanent membership of the U.N. Security Council, member nations should be economically wealthy and prosperous.
2. Militarily Strong: A nation that desires to be a permanent member should be militarily strong so that the nation can play a decisive role while solving international problems.
3. The thirdly desirous nation should pay or contribute a maximum budget for the working of U.N.O.
4. A big nation in terms of its population.
5. A democratic country having great respect for democracy and human rights.
6. A country has to make the council more representative of the world’s diversity in terms of geography, economic system, and culture.

Question 5.
Describe the two basic reforms of the U.N. on which almost everyone agrees that they are necessary after the Cold War. (C.RS.E. 2016) :
Answer:
The United Nations was established in 1945 and now needs reforms in its structure and working. Some scholars are of the opinion that reforming the United Nations means a restructuring of the Security Council. I fully agree with this view. In fact, if we are really interested in reforming the U.N. then we must reform the Security Council. The Security Council is one of the most important organs of the United Nations.

The Security Council is mainly responsible for maintaining international peace and security. The Security Council decides issues involving the deployment of armed forces. The Security Council may take such action by air, sea, or land force, as may be necessary to maintain or restore international peace and security.

The Security Council consists of 15 members, five of which are permanent members of the Security Council. The permanent members enjoy Veto power. If we want to reform the U.N. then reforms should be made in the Security Council because it is one of the most powerful organs of the U.N. The Security Council reflects the global power structure of 1945,

when many nations of the world were still under colonial rule.

Some countries and experts want the organisations to play a greater role in peace and security missions, while others want its role to be confined to development and humanitarian work.

Question 6.
Which three complaints related to the U.N. Security Council were reflected in the resolution passed by the U.N. General Assembly in 1992? Describe any three criteria that have been proposed for new Permanent Members of the Security Council. (C.B.S.E. 2016)
Or
Describe the three main complaints related to the U.N. Security Council which were reflected in the resolution passed by the U.N. General Assembly in 1992. (C.B.S.E. 2017)
Answer:
Following three complaints related to the U.N. Security Council were reflected in the resolution passed by the U.N. General Assembly in 1992.

• The U.N. Security Council no longer represented contemporary political realities.
• The decisions take by Security Council reflect only western values and interests.
• The U.N. Security Council lacks equitable representation. Criteria proposed for new Permanent Member of Security Council.
  • A major military power.
  • A big economic power.
  • A major contribution to the budget of U.N.

Question 7.
What reforms are being suggested? What reforms have been suggested to make the U.N. Security Council more effective?
Or
‘India has supported the restructuring of the U.N. on several grounds.’ Justify the statement with three suitable arguments. (C.B.S.E. 2017)
Answer:
India always supported the restructuring of the U.N.O. especially the security council.

The Security Council is the most important and powerful organ of the U.N. It is the executive body of the U.N. and is responsible for the maintenance of world peace and order. Nowadays, demand for reforms in the Security Council is being made. Following are the reasons due to which reforms are demanded:

1. At its inception, the United Nations had 51 founder member countries mostly from Europe and North America. At present, it consists of 193 members. The last country to join the U.N. as a member in 2011 is South Sudan. With the inclusion of new Asian, African, and Middle East underdeveloped countries, there also have come new problems and aspirations. So, the need is felt to reform the Security Council.

2. It is said that five permanent members (U.K., U.S.A., France, Russia, and China) of the Security Council control the U.N. The Veto power given to the five permanent members is a big obstacle in handling so many issues. Any permanent member can reject any issue of the Security Council. These five permanent members may do anything and U.N. cannot take any action against them. The power of Veto makes these big live members autocratic and dictatorial.

3. The Security Council is a small body and does not represent the whole world. Hence, the demand is for reforms.

Suggestions for Reforms.

1. The membership of the Security Council should be increased. More representation should be given to Afro-Asian and Latin American developing countries.
2. Permanent membership of the Security Council should be increased. A resolution moved by India seeking equitable representation on and increase in the membership of the Security Council was adopted by the General Assembly in December 1992. India, Germany, Japan, Brazil, and Nigeria should be made permanent members of the Security Council.
3. “Veto’ power should be scrapped or it should be restricted. The permanent members of the Security Council should relinquish their right of Veto with respect to matters relating to the peaceful settlement of disputes.
4. The voting rules of the Security Council should be changed. All decisions should be taken by a concurrent vote of the majority of the permanent members and a majority of the non-permanent members.
5. The Security Council should be a true representative of world opinion. It should represent the political realities of the present world.

Question 8.
Trace the evolution of the United Nations since its establishment in 1945. How does it function with the help of its various structures and agencies? (C.B.S.E. 2017)
Answer:
1. Just as the League of Nations was the child of the First World War, similarly United Nations Organisation is the child of the Second World War. The outbreak of World War-II sounded the death knell of the League of Nations. World War II was even more horrible and destructive than World War I. There grew a universal desire for peace. An attempt to establish a world organization was made in the right earnest. In 1941, the President of the U.S.A. emphasized the importance of a world organization that should fulfill the basic necessities of mankind:

1. The right to freedom of speech and expression,
2. Freedom to worship
3. Abolition of poverty
4. Freedom from fear. The same year President Roosevelt of the U.S.A. and Prime Minister Churchill of Britain, in connection with these four freedoms issued a Charter of Rights and called it the ‘Atlantic Charter’. In this Charter, the Right of independence of State is also accepted. This Charter of Rights was signed by the representative of 26 Nations on 1st January 1942. In 1943, the Foreign Ministers of the U.S.A., Britain, Russia, and China met at Moscow and Moscow Declaration was issued.

The Declaration said, ‘We recognize the necessity of establishing at the earliest practical date, a General International Organisation based on the principle sovereign equality of the peace-loving State and open to membership to all such States large and smaller for the maintenance of international peace and security”. After long debates and discussions which took place in various world conferences held from time to time between 1940 and 1945, ultimately the United Nations Conference was held at San-Francisco from April 26 to June 25, 1945. The Conference adopted the U.N. Charter which was signed by delegates of 51 nations. The U.N. actually started functioning on October 24, 1945.

There are six organs of the U.N.

1. General Assembly
2. Security Council
3. The Economic and Social Council
4. International Court of Justice
5. Trusteeship Council
6. The Secretariat.

Question 9.
Study the given map of the world and answer the following questions in your Answer- Book. (C.B.S.E. 2009)
(а) Identify and name the countries marked A, B, C, and D respectively.
(b) Write the names of the following U.N. Secretary Generals with the names of the countries they belonged to:
(i) Dag Hammarskjold
(ii) Kurt Waldheim
(iii) Boutros Boutros-Ghali
(iv) Kofi A. Annan

Answer:

(A)	(B)
A . Sweden B – Ghana C – Austria D . Egypt	I – Sweden II – Austria III – Egypt IV. Ghana.

International Organisations Important Extra Questions HOTS

Question 1.
Mention any two objectives of the United Nations.
Answer:

1. To maintain international peace and security.
2. To develop friendly relations among nations based on respect for the principle of equal rights and self-determination of people.

Question 2.
Write down the names of any four agencies of the United Nations.
Answer:

1. World Health Organisation (W.H.O.)
2. International Labour Organisation (I.L.O.)
3. United Nations Educational Scientific, Culture Organisation (U.N.E.S.C.O)
4. Food and Agricultural Organisation. (F.A.O.)

Question 3.
State any two functions of the Security Council.
Answer:

1. The admission of new states to the organization and the expulsion therefrom can only be done on the recommendations of the Security Council.
2. It makes recommendations to the General Assembly for the appointment of the General Secretary.

Question 4.
Why a demand for reforms in the Security Council is being made?
Answer:
United Nations Security Council is no longer reflective of contemporary reality and this poses the most important challenge to global peace and security as well as conflict prevention. India’s Ambassador to U.N. Hardeep Singh Puri said, “A composition rooted in 1945 detracts from its abilities to fully harness the capabilities of U.N. Member-States as of today.”

Question 5.
Mention any two basic principles of U.N.
Answer:

1. The organization is based on the principles of sovereign equality of its members.
2. All member states are supposed to fulfill the obligation imposed upon them by the Charter.

Here we are providing 1 Mark Questions for Political Science Class 12 Chapter 5 Challenges to and Restoration of Congress System are the best resource for students which helps in class 12 board exams.

One Mark Questions for Class 12 Political Science Chapter 5 Challenges to and Restoration of Congress System

Question 1.
In which year was the Fifth General Elections to Lok Sabha held? Imp. (C.B.S.E. 2014)
Answer:
The Fifth General Elections to Lok Sabha was held in 1971

Question 2.
Who represented Congress (O) Congress (R) after the split of the Congress Party? (C.B.S.E 2014)
Answer:
Congress (O) was represented by the Syndicate under Morarji Desai and Congress (R) was represented by Requisition under Indira Gandhi.

Question 3.
What is meant by the term ‘Congress Syndicate’ ?Imp. (C.B.S.E. 2014)
Answer:
In the Indian National Congress there was a group of senior leaders which was known as the ‘Syndicate.’ Due to differences between the Syndicate and Mrs. Indira Gandhi, there was split in the Congress party in 1969.

Question 4.
Which major factor was responsible for the dramatic victory of Indira Gandhi in 1971 elections ? Imp. (C.B.S.E. 2015)
Answer:
The slogan of Garibi Hatao and the programmes that followed it became a prime political strategy of building an independent nation-wide political support base. Thus, it became a major factor responsible for the dramatic victory of Indira Gandhi in 1971 elections.

Question 5.
After the death of Lai Bahadur Shastri on 10th January 1966, how did Smt. Indira Gandhi become the next Prime Minister ? (C.B.S.E. 2010)
Or
After the death of Lai Bahadur Shastri, which two leaders of the Congress party contested against one another to become the leader of the party. (C.B.S.E. 2013)
Answer:
There was a contest for Prime Ministership between Sint. Indira Gandhi and Morarji Desai and Smt. Indira Gandhi defeated Morarji Desai, by securing the support of more than two-third of the Congress MPs.

Question 6.
After which General Election in India did the Congress party lose its dominance for the first time at the centre ? (C.B.S.E. 2013)
Answer:
After the General Election of 1977, Congress party lost its dominance for the first time at the centre.

Question 7.
What is meant by ‘Congress Syndicate’? (CaBS.E. 2013)
Answer:
In the Indian National Congress, there was a group of senior leaders which was known as the ‘Syndicate’.

Question 8.
Name the two main contenders who contested the election for the post of President of India in 1969. Imp. (C.B.S.E. 2013)
Answer:
Dr. Neelam Sanjiva Reddy and Sh. V.V. Giri.

Question 9.
Who was the official Congress candidate for the post of the President of India in 1969 ? Imp. (C.B.S.E. 2014)
Answer:
Mr. Neelam Sanjiva Reddy was the official Congress candidate for the post of the President of India in 1969.

Question 10.
Which two political parties were the major partners in the ruling alliance after the 1971 General Elections to the Lok Sabha ? (C.B.S.E 2014)
Answer:
Congress (R) and Communist Party of India were the two political parties who were the major partners in the ruling alliance after the 1971 General Elections to the Lok Sabha.

Question 11.
“The Practice of defection in Indian Politics is many a time expressed as the policy of-Aaya Ram Gaya Ram!” Justify the statement. (C.B.S.E. 2019)
Answer:
It is very much true that the practice of defection in Indian politics is many a times expressed as the policy of “Aaya Ram Gaya Ram”, because greedy politicians and representative change their parties only for the greed of money or ranks only.

Choose the correct answer :

Question 12.
Prime Minister Pt. Jawaharlal Nehru passed away in :
(a) January 1964
(b) May 1965
(c) March 1964
(d) May 1964.
Answer:
(d) May 1964.

Question 13.
When Pt. Jawaharlal Nehru passed away, at that time Congress President was ?
(a) K. Kamraj
(b) Lai Bahadur Shastri
(c) S.K. Patil
(d) Morarji Desai.
Answer:
(a) K. Kamraj

Question 14.
Who was the founder of Congress Socialist Party ?
(a) C. Natarajan Amadurai
(b) K. Kamraj
(c) Ram Manohar Lohia
(d) S. Nijalingappa.
Answer:
(c) Ram Manohar Lohia

Question 15.
Name the person with whom would you associate the following slogans. (Sample Paper 2019-20)
(a) Aya Ram and Gaya Ram
(b) Total Revolution .
Answer:
(a) Gaya Lai
(b) Sh. Jai Prakash Narayan.

Here we are providing 1 Mark Questions for Political Science Class 12 Chapter 4 India’s External Relations are the best resource for students which helps in class 12 board exams.

One Mark Questions for Class 12 Political Science Chapter 4 India’s External Relations

Question 1.
In the formulation of foreign policy, what was Pt. Jawaharlal Nehru’s first priority?
Answer:
National interest was the first priority of Pt. Nehru.

Question 2.
What do you mean by Panchsheel ? (Imp.) (C.B.S.E. 2009)
Answer:
The word ‘Panchsheel’ stands for five principles of conduct and behaviour. India and China evolved five principles to maintain friendly ties between the two countries.

Question 3.
Give the full form of the NPT and CTBT. (C.B.S.E. 2009)
Answer:
NPT-Non Proliferation Treaty.
CTBT-Comprehensive Test Ban Treaty.

Question 4.
Enumerate any two principles of; Nehru’s foreign policy. (C.B.S.E. 2013)
Answer:
1. Non-alignment is the basic principle of Nehru’s foreign policy.
2. Pt. Nehru has always raised his voice against the caste and colour discrimination.

Question 5.
When was the first nuclear experiment undertaken by India? (C.B.S.E. 2009)
Answer:
India first undertook a nuclear experiment in 1974.

Question 6.
Mention any two principles of India’s foreign policy. (C.B.S.E. 2009)
Answer:

• The most important basic principles of India’s foreign policy is non-alignment.
• The basic principle of India’s foreign policy is safeguarding the national interests.

Question 7.
Which two objectives Jawaharlal : Nehru wised; to achieve through the strategy of non-alijgnment ?(C.B.S.E. 2010 )
Answer:
(i) To preserve the hard-earned sovereignty.
(ii) To protect territorial integrity.

Question 8
During Nehru era, why did some political parties and group in our country believe that India should be more friendly with the bloc led by the :U.S.? (C.B.S.E. 2010 )
Answer:
Some political parties and group in our country believe that India should be more friendly with the bloc led by the U.S. because it support the value of democracy.

Question 9.
How the aim of India to respect the sovereign did find an eco in the Directive principles of the state policy?
(C.B.S.E. Sample Q. P. 2017)
Answer:I
ndia as a nation born in the backdrop of the world war and shadow of cold war, decided to respect the sovereignty of other nation and belive in world peace. The aim find an eco in the Directive Principles of the State Policy.

Choose the correct answer:

Question 10.
“The foreign policy of a country is the outcome of her economic policy” these remarks were made by :
(a) Indira Gandhi
(b) Jawaharlal Nehru
(c) Morarji Desai
(d) Charan Singh.
Answer:
(b) Jawaharlal Nehru

Question 11.
Bandung Conference was held in the year:
(a) 1954
(b) 1955
(c) 1956
(d) 1957
Answer:
(b) 1955

Question 12.
Bangladesh emerged as an independent nation in :
(a) January 1972
(b) December 1971
(c) March 1971
(d) November 1971.
Answer:
(b) December 1971

Question 13.
China made a sudden attack on India in:
(a) August, 1962
(b) September, 1962
(c) October, 1962
(d) September, 1965.
Answer:
(c) October 1962

Question 14.
The Architect of Non-alignment is:
(a) Pt. Nehru
(b) Indira Gandhi
(c) Y. B. Chavan
(d) Atal Behari Vajpayee.
Answer:
(a) Pt. Nehru.

Here we are providing 1 Mark Questions for Political Science Class 12 Chapter 3 Politics of Planned Development are the best resource for students which helps in class 12 board exams.

One Mark Questions for Class 12 Political Science Chapter 3 Politics of Planned Development

Question 1.
What is meant by planned development? (Sample Paper)
Answer:
Planned development means to develop a design or plan for development.

Question 2.
Mention the main objective of Second Five Year Plan. (Imp.) (Sample Paper, C.B.S.E. 2012 Outside Delhi)
Answer:
The main objective of the Second Five Year Plan was to enhance the growth of Industrial development.

Question 3.
Who was P.C. Mahalanobis ? (Imp.) (C.B.S.E. 2009)
Or
What was significant about P.C. Mahalanobis ? (C.B.S.E 2013)
Answer:
Second five year plan was drafted by a team of economists and planners under the leadership of P.C. Mahalanobis.

Question 4.
Who was popularly known as the ‘Milkman of India’ ? (C.B.S.E. 2013)
Answer:
Verghese Kurien.

Question 5.
What was the ‘Bombay Plan’ ? (C.B.S.E. 2013)
Answer:
The ‘Bombay Plan’ was a joint proposal of big industrialists (1944) for setting up a planned economy in the country.

Question 6.
What is meant by Decentralised Planning ? (Imp.) (C.B.S.E. 2012, 2014) j
Answer:
Decentralised planning meant planning which is approachable by the common man. It involved people directly in the developmental activities through voluntary citizen’s organisations.

Question 7.
Differentiate between the mains objectives of the First and the second Five Year Plans.
Answer:
There was a big debate whether more importance should be given in Industries or Agriculture. The First Five-Year Plan stressed on development of agriculture while the Second Five- Year Plan stressed on heavy industries.

Question 8.
What is meant by geo-politics ? (C.B.S.E. 2012)
Answer:
Geo-politics means politics of land territory. According to G.N. Singh, “A science dealing with the influence exercised by physical geography in determining conditions of political life and relation between state.” According to Houshofer, “Geo-politics demonstrates the dependence of all political development on the permanent reality of the soil.”

Question 9.
How was Kerla plan based on decentralized planning? (C.B.S.E. Sample Q.P. 2017)
Answer:
Kerla plan was based on decentralized planning because peoples directly involve in development activities through voluntary citizens organizations. The officials also taken initiate to involve people in making plans at the Panchayat, block and district level.

Question 10.
Why does development have different meaning for different section of the people? (C.B.S.E. 2017)
Answer:
Different sections of the people have different meaning of development. For example the iron or resources lie in some of the most underdeveloped and pre-dominantly tribal districts of the Orissa state. The state government passed the Memorandum of Understanding (MoU) for the development and global demand of steel.

The tribal people fear that the setting up of industries would cause displacement from their homes and livelihood. They were also having the fear that mining and industry would pollute the environment. So, they protested and demanded for the cancellation of agreement.

Choose the correct answer :

Question 11.
Who said, “Planning is a way of organising and utilising resources to maximum advantage in terms of defined social ends” ?
(a) K.T. Shati
(b) Planning Commission of India
(c) Dr. Rajinder Prashad
(d) None of these.
Answer:
(b) Planning Commission of India

Question 12.
In India, planning was conceived as a main instrument of:
(a) Political development
(b) Cultural development
(c) Social development
(d) Socio-economic development.
Answer:
(d) Socio-economic development.

Question 13.
How many plans have been completed so far in India ?
(a) Twelve
(b) Six
(c) Eight
(d) Four.
Answer:
(a) Twelve

Question 14.
The Planning Commission in India was set up in :
(a) 1953
(b) 1957
(c) 1960
(d) 1950
Answer:
(d) 1950

Question 15.
The Chairman of National Development Council is :
(a) President of India
(b) Finance Minister of India
(c) Prime Minister of India
(d) Chief Minister of U.P.
Answer:
(c) Prime Minister of India