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Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 10 Rural Economy

Samacheer Kalvi 11th Economics Rural Economy Text Book Back Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
Which is considered as the basic unit for rural areas?
(a) Panchayat
(b) Village
(c) Town
(d) Municipality
Answer:
(b) Village

Question 2.
Which feature is identified with rural areas?
(a) Low population density
(b) High population density
(c) Low natural resources
(d) Low human resources
Answer:
(a) Low population density

Question 3.
Identity the feature of rural economy?
(a) Dependence on agriculture
(b) High population density
(c) Low level of population
(d) Low level of inequality
Answer:
(a) Dependence on agriculture

Question 4.
What percentage of the total population live in rural area, as per 2011 censes?
(a) 40
(b) 50
(c) 60
(d) 70
Answer:
(c) 60

Question 5.
How do you term people employed in excess over and above the requirements?
(a) Unemployment
(b) Underemployment or Disguised Unemployment
(c) Full employment
(d) Self – employment
Answer:
(b) Underemployment or Disguised Unemployment

Question 6.
What is the term used to denote the coexistence of two different features in an economy?
(a) Technology
(b) Dependency
(c) Dualism
(d) Inequality
Answer:
(c) Dualism

Question 7.
The process of improving the rural areas, rural people and rural living is defined as ………………………….
(a) Rural economy
(b) Rural economics
(c) Rural employment
(d) Rural development
Answer:
(d) Rural development

Question 8.
Identify the agriculture related problem of rural economy.
(a) Poor communication
(b) Small size of landholding
(c) Rural poverty
(d) Poor banking network
Answer:
(b) Small size of landholding

Question 9.
The recommended nutritional intake per person in rural areas.
(a) 2100 calories
(b) 2200 calories
(c) 2300 calories
(d) 2400 calories
Answer:
(d) 2400 calories

Question 10.
Indicate the cause for rural poverty.
(a) Lack of non-farm employment
(b) High employment
(c) Low inflation rate
(d) High investment
Answer:
(a) Lack of non-farm employment

Question 11.
What is the other name for concealed unemployment?
(a) Open
(b) Disguised
(c) Seasonal
(d) Rural
Answer:
(b) Disguised

Question 12.
How do you term the employment occurring only on a particular season?
(a) Open
(b) Disguised
(c) Seasonal
(d) Rural
Answer:
(c) Seasonal

Question 13.
Identify an example for rural industries?
(a) Sugar factory
(b) Mat making industry
(c) Cement industry
(d) Paper industry
Answer:
(b) Mat making industry

Question 14.
How much share of rural families in India is in debt?
(a) Half
(b) One fourth
(c) Two third
(d) Three fourth
Answer:
(d) Three fourth

Question 15.
Identify the cause for rural indebtedness in India.
(a) Poverty
(b) High population
(c) High productivity
(d) Full employment
Answer:
(a) Poverty

Question 16.
In which year, Regional Rural Banks came into existence?
(a) 1965
(b) 1970
(c) 1975
(d) 1980
Answer:
(c) 1975

Question 17.
Identify the year of launch of MUDRA Bank?
(a) 1995
(b) 2000
(c) 2010
(d) 2015
Answer:
(d) 2015

Question 18.
Identify the year in which National Rural Health Mission was launched.
(a) 2000
(b) 2005
(c) 2010
(d) 2015
Answer:
(b) 2005

Question 19.
Identify the advantages of rural roads.
(a) Rural marketing
(b) Rural employment
(c) Rural development
(d) All the above
Answer:
(d) All the above

Question 20.
“An Indian farmer is bom in debt, lives in debt, dies in debt and bequeaths debt”-who said this?
(a) Adam Smith
(b) Gandhi
(c) Amartya Sen
(d) Sir Malcolm Darling
Answer:
(d) Sir Malcolm Darling

PART – B

Answer the following questions in one or two sentences.

Question 21.
Define Rural Economy?
Answer:
Rural economy refers to villages. Rural economics deals with the application of economic principles in understanding and developing rural areas.

Question 22.
What do you mean by Rural Development?
Answer:

1. Rural Development is defined as an overall improvement in the economies and social well being of villagers and the institutional and physical environments in which they live.
2. According to the World Bank “Rural Development is a strategy designed to improve the economic and social life of a specific group of people – rural poor.
3. Rural Development is a process of improving the rural areas, rural people, and rural living.

Question 23.
Rural Poverty – Define?
Answer:
Rural poverty refers to the existence of poverty in rural areas. Poverty in India is the situation in which an individual fails to earn sufficient income to buy the basic minimum of subsistence.

Question 24.
Define Open Unemployment?
Answer:

1. Open Unemployment: Unemployed persons are identified as they remain without work.
2. This type of unemployment is found among agricultural labourers, rural artisans, and literate persons.

Question 25.
What is meant by Disguised Unemployment?
Answer:

1. Many are employed below their productive capacity and even if they are withdrawn from work the output will not diminish. It is also called Disguised Unemployment or Underemployment. This type of unemployment is found among small and marginal farmers, livestock rearers, and rural artisans.
2. Disguised unemployment in rural India is 25 percent to 30 percent.

Question 26.
Define Cottage Industry?
Answer:

1. Cottage Industries are generally associated with agriculture and provide both part-time and full-time jobs are in rural areas.
2. Cottage Industries are mat, coir and basket making industries.
3. The principal cottage industries of India are hand-loom weaving [Cotton, Silk, Jute, etc.] pottery, washing soap making, conch shell, handmade paper, horn button, mother of pearl button, Cutlery, lock, and key making industries. These are almost similar to the cottage industries.

Question 27.
What do you mean by Micro Finance?
Answer:
Microfinance is a financial service that offers loans, savings, and insurance to entrepreneurs and small business owners.

Question 28.
State any two causes of the housing problem in rural areas?
Answer:

1. House is one of the basic needs of every family. The provision of better housing facilities increases the productivity of labour. The housing problem is getting aggravated due to the rapid adaptation of nuclear families.
2. Housing does not mean the provision of a house alone but also proper water supply, good sanitation, proper disposal of sewage, etc.

Question 29.
Define Rural Electrification?
Answer:

1. Rural Electrification refers to providing electrical power to rural areas.
2. The main aims of rural electrification are to provide electricity to agricultural operations and to enhance agricultural productivity.
3. To increase cropped area, to promote rural industries, and to lighting the villages.
4. In order to improve this facility, the supply of electricity is almost free for agricultural purposes in many states, and the electricity tariff is charged in rural areas is kept very low.

Question 30.
State any two factors hindering Rural Electrification in India?
Answer:
The factors hindering the progress of rural electrification in India are:

1. Lack of Funds: The generation and transmission of power involve huge expenditure and the fund allocation is low.
2. Inter-State Disputes: As there are inter-state disputes in managing power projects, power distribution is affected.
3. Uneven Terrain: As rural topography is uneven without proper connection, developing new lines are costlier and difficult.
4. High Transmission Loss: Transmission loss in power distribution is almost 25 percent in rural areas.
5. Power Theft: Unauthorized use and diversion of power are evil practices adopted by affluent people that hinder the rural electrification process.

PART – C

Answer the following questions in about a paragraph.

Question 31.
State the importance of Rural Development?
Answer:

1. India cannot be developed by retaining rural as backward
2. As the rural economy supports the urban sector, the backwardness of the rural sector would be a major impediment to the overall progress of the economy.
3. Improvements in education, health, and sanitation in villages can help avoid many urban problems.
4. To provide gainful employment and improve food production.
5. The evils of brain drain and rural-urban migration can be reduced.
6. For the better utilization of resources.
7. To minimize the gap between rural and urban areas.

Question 32.
Explain the causes for Rural Backwardness?
Answer:

1. The evils of brain-drain and rural-urban migration can be reduced if rural areas are developed.
2. In order to better utilize the unused and under-utilized resources, there is a need to develop the rural economy.
3. Rural Development should minimize the gap between rural and urban areas in terms of the provision of infrastructural facilities. It was called PURA by former President Abdul Kalam.
4. In order to improve the nation’s status in the global arena in terms of economic indicators like,
   • Human Development Index [HDI]
   • Woman Empowerment Index [WEI]
   • Gender Disparity Index [GDI]
   • Physical Quality of Life Index [PQLI] and
   • Gross National Happiness Index [GNHI] should be given due attention.

Question 33.
Enumerate the remedial measures of Rural poverty?
Answer:
The creation of employment opportunities would support the elimination of poverty. The poverty eradication schemes implemented in India are

1. 20 point programme.
2. Integrated Rural Development Programme (IRDP)
3. Training Rural Youths for Self Employment (TRYSEM)
4. Food for Work Programme (FWP)
5. National Rural Employment Programme (NREP)
6. RLEGP, JRY and MGN REGS

Question 34.
What are the remedial measures for Rural unemployment?
Answer:
Remedial measures for Rural unemployment:
In order to reduce rural unemployment in the country, there is a need to take integrated and coordinated efforts from various levels. A few remedial measures are listed below: Subsidiary

Occupation:
To reduce seasonal unemployment rural people should be encouraged to adopt subsidiary occupations. Loans should be granted and proper arrangements should be made for marketing their products.

Rural Works Programme:
Rural Works Programme such as construction and maintenance of roads, digging of drains, canals, etc., should be planned during the off-season to provide gainful employment to the unemployed.

Irrigation Facilities:
Since rainfall is uncertain irrigation facilities should be expanded to enable the farmers to adopt multiple cropping.

Rural Industrialization:
To provide employment new industries should be set up in rural areas. Technical Education: Employment oriented courses should be introduced in schools and colleges to enable the literate youth to start their own units.

Question 35.
Write a note on Regional Rural Banks?
Answer:
Regional rural banks came into existence in 1975. RRBs are recommended with a view to developing the rural economy by providing credit and other facilities to the small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs.

RRBs are set up by the joint efforts of the center and state governments and commercial banks. At present, there are 64 RRBs in India. RRBs confine their lending only to the weaker sections and their lending rates are at par with the prevailing rate of cooperative societies.

Question 36.
Mention the features of SHGs?
Answer:
Major features of SHGs [Self Help Groups]

1. SHG is generally an economically homogeneous group formed through a process of self-selection based upon the affinity of its members.
2. Most SHGs are women’s groups with membership ranging between 10 and 20.
3. SHGs have well-defined rules and by-laws, hold regular meetings and maintain records and savings and credit discipline.
4. SHGs are self-managed institutions characterized by participatory and collective decision making.

Question 37.
List out the objectives of MUDRA Bank?
Answer:

1. Regulate the lender and the borrower of microfinance and bring stability to the microfinance system.
2. Extend finance and credit support to microfinance institutions.
3. Register all MFIs and introduce a system of performance rating and accreditation for the last time.
4. Offer a credit guarantee scheme for providing guarantees to loans being offered to micro-businesses.
5. Introduce appropriate technologies to assist in the process of efficient lending, borrowing, and monitoring of distributed capital.

PART – D

Answer for each question in about a page.

Question 38.
‘The features of Rural Economy are peculiar’- Argue?
Answer:
Features of Rural Economy:
1. Village is an Institution:
The villagers a primary institution and it satisfies almost all the needs of the rural community. The rural people have a feeling of belongingness and a sense of unity towards each other.

2. Dependence on Agriculture:
The rural economy depends much on nature and agricultural activities. Agriculture and allied activities are the main occupations in rural areas.

3. Life of Rural people:
Lifestyles in villages are very simple. Public services like education, housing, health and sanitation, transport and communication, banking, roads, and markets are limited and unavailable.

The standards of living of the majority of rural people are poor and pitiable. In terms of methods of production, social organization, and political mobilization, the rural sector is extremely backward and weak.

4. Population Density:
Population density, measured by the number of persons living per sq. km is very low and houses are scattered in the entire villages.

5. Employment:
There exists unemployment, seasonal unemployment, and underemployment in rural areas.

6. Poverty:
Poverty is a condition where the basic needs of the people like food, clothing, and shelter are not being met.

7. Indebtedness:
People in rural areas are highly indebted owing to poverty and underemployment, lack of farm and non-farm employment opportunities, low wage employment, seasonality in production, poor marketing network, etc.

8. Rural Income:
The income of the rural people is constrained as the rural economy is not sufficiently vibrant to provide for them.

9. Dependency:
Rural households are largely dependent on social grants and remittances from family members working in urban areas and cities.

10. Dualism:
Dualism means the co-existence of two extremely different features like developed and underdeveloped. These characteristics are very common in rural areas.

11. Inequality:
The distributions of income, wealth, and assets are highly skewed among rural people. Land, livestock and other assets are owned by a few people.

12. Migration:
Rural people are forced to migrate from villages to urban areas in order to seek gainful employment for their livelihood.

Question 39.
Discuss the problems of the Rural Economy?
Answer:
The problems of the rural economy are.
1. People related problems: The problem consists of illiteracy, lack of technical know-how, low level of confidence, dependence on sentiments and beliefs, etc.

2. Agriculture related problems: This include lack of awareness, knowledge, skill, and attitude, unavailability of inputs, poor marketing facility, an insufficient extension of staff and services, small size of landholding, absence of infrastructure, primitive technology, reduced public investment, and absence of a role for farmers in fixing the prices for their own products.

3. Infrastructural-related problems: Poor infrastructure facilities like water, electricity, transport, educational institutions communication, health, employment are found in rural areas.

4. Economics related problems: Inability to adopt high-cost technology, high cost of inputs, underprivileged rural industries, low income, indebtedness, and existence of inequality in landholdings and assets.

5. Leadership related problems: Leadership among the hands of inactive and incompetent people, the self-interest of leaders, biased political will, less bargaining power, and negotiation skills, and dominance of political leaders.

6. Administrative problems: Political interference, lack of motivation and interest, low wages in villages, improper utilization of budget, and absence of monitoring and implementation of the rural development programme.

Question 40.
Analyze the causes for Rural Indebtedness?
Answer:
The Causes for Rural Indebtedness:
1. Poverty of Farmers:

• The vicious circle of poverty forces the farmers to borrow for consumption and cultivation.
• Thus poverty, debt, and high rates of interest hold the farmer in the grip of money lenders.

2. Failure of Monsoon:

• Frequent failure of monsoon is a curse to the farmers and they have to suffer due to the failure of nature.
• Farmers find it difficult to identify good years to repay their debts.

3. Litigation:

• Due to land disputes litigation in the court compels them to borrow heavily.
• Being uneducated and ignorant they are caught in the litigation process and dry away their savings and resources.

4. Money Lenders and High Rate of Interest:

• The rate of interest charged by the local money lenders is very high and the compounding of interest leads to perpetuating indebtedness of the farmer.

Samacheer Kalvi 11th Economics Rural Economy in India Additional Important Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
Educated and skilled persons who may not accept casual work. This is called unemployment ………………………
(a) Closed
(b) Open
(c) Both
(d) None of the above
Answer:
(b) Open

Question 2.
The existence of a joint family system in India promotes ……………………….. unemployment.
(a) Open
(b) Weekly status
(c) Daily status
(d) Disguised
Answer:
(b) Weekly status

Question 3.
………………………… based poverty lines are used in many countries.
(a) Food
(b) Income
(c) Nutrition
(d) None of the above.
Answer:
(c) Nutrition

Question 4.
IRDP means
(a) Internal Rural Development Programme
(b) Indian Rural Development Programme
(c) International Rural Development Programme
(d) Integrated Rural Development Programme
Answer:
(d) Integrated Rural Development Programme

Question 5.
The problem of rural unemployment can be solved only by …………………….. agriculture.
(a) Cost production
(b) Green Revolution
(c) Innovative
(d) Modernising
Answer:
(d) Modernising

Question 6.
In which year the Rural Landless Employment Guarantee Programme was set up?
(a) 1982
(b) 1983
(c) 1984
(d) 1985
Answer:
(b) 1983

Question 7.
…………………….. legislation has been passed by the State governments, which aim at improving the economic conditions of agricultural landless labourers.
(a) Green Revolution
(b) Ceiling of landholding
(c) Land Reforms
(d) Zamindari System
Answer:
(c) Land Reforms

Question 8.
Agriculture in India offers ………………………. employment.
(a) Seasonal
(b) Under
(c) Sub
(d) Partly
Answer:
(a) Seasonal

Question 9.
The farmers are poor for long then we call it ………………………. poverty.
(a) Urban
(b) Rural
(c) Primary
(d) Chronic (or) Structural
Answer:
(d) Chronic (or) Structural

Question 10.
……………………….. poverty means people work for few months and get low wages.
(a) Urban
(b) Rural
(c) Primary
(d) None of the above
Answer:
(b) Rural

PART – B

Answer the following questions in one or two sentences.

Question 1.
Define “Migration”?
Answer:

1. Rural people are forced to migrate from villages to urban areas in order to seek gainful employment for their livelihood.
2. This character of the development gives rise to the formation of cities.
3. Enmity and lack of basic amenities in rural areas also push the people to migrate to urban areas.

Question 2.
What do you mean by features of Rural Indebtedness?
Answer:

1. Nearly three fourth of rural families in the country is in debt.
2. The amount of debt is heavier in the case of small farmers.
3. Cultivators are more indebted than the non-cultivators.
4. Most of the debts taken are short term and of unproductive nature.
5. The proportion of debts having higher rates of interest is relatively high.
6. Most of the villagers are indebted to private agencies particularly money lenders.

Question 3.
Mention the major advantages of Micro Finance?
Answer:
Microfinance offers loans, savings, and insurance to entrepreneurs and small business owners. Who does not have access to traditional sources of capital, like banks or investors?

PART – C

Answer the following questions in about a paragraph.

Question 1.
Mention the causes for Rural Poverty?
Answer:
Causes for Rural Poverty:

• Unequal distribution of Land: The distribution of land is highly skewed in rural areas. Therefore, the majority of rural people work as hired labour to support their families.
• Lack of Non-farm employment: Non-farm employment opportunities do not match the increasing labour force. The excess supply of labour in rural areas reduces the wages and increases the incidence of poverty.
• Lack of public sector Investment: The root cause of rural poverty in our country is the lack of public sector investment in human resource development.
• Inflation: Steady increase in prices affects the purchasing power of the rural poor leading to rural poverty.
• Low productivity: Low productivity of rural labour and farm activities is a cause as well as the effect of poverty.
• Unequal Benefit of Growth: Major gains of economic development are enjoyed by the urban rich people leading to a concentration of wealth. Due to defective economic structure and policies, gains of growth are not reaching the poor and the contributions of poor people are not accounted for properly.
• Low Rate of Economic Growth: The fate of the growth of India is always below the target and it has benefited the rich. The poor are always denied the benefits of the achieved growth and development of the country.
• More Emphasis on Large Industries: Huge investment in large industries catering to the needs of middle and upper classes in urban areas are made in India. Such industries are capital-intensive and do not generate more employment opportunities. Therefore, the poor are not in a position to get employed and to come out of poverty in villages.
• Social evils: Social evils prevalent in the society like custom, believes, etc. increase unproductive expenditure.

Question 2.
Explain the causes for Rural Unemployment?
Answer:
Causes for Rural Unemployment:

• Absence of skill development and employment generation: Lack of Government initiatives to give required training and then to generate employment opportunities.
• Seasonal Nature of Agriculture: Agricultural operations are seasonal in nature and depend much on nature and rainfall. Therefore, the demand for labour becomes negligible during the offseason. So, non-farm employment opportunities must be created.
• Lack of subsidiary occupation: Rural people are not able to start subsidiary occupations such as poultry, rope making, piggery, etc. Due to shortages of funds for investment and lack of proper marketing arrangements.
• Mechanization of Agriculture: The landlords are the principal source of employment to the farm labour. Mechanization of agricultural operations like ploughing, irrigation, harvesting, threshing, etc. reduces employment opportunities for farm labour.
• Capital-Intensive Technology: The expanding private industrial sector is largely found in urban areas and not creating additional employment opportunities due to the application of capital intensive technologies. The government must establish firms to absorb surplus labor-power.
• Defective System of Education: The present system of education has also aggravated the rural unemployment problem. A large number of degree-producing institutions have come in recent years. Students also want to get degrees only, not any skill. Degrees should be awarded only on the basis of skills acquired. The unemployed youth should get sufficient facilities to update their skills.

Question 3.
Mention the Important characteristics of cottage Industries?
Answer:
Characteristics of Cottage Industries:

1. These Industries are carried out by artisans in their own homes at their own risk and for their own benefits.
2. Artisans may combine this work with another regular job.
3. Little outside labour is employed. Normally, the members of the household provide the necessary labour.
4. These industries are generally hereditary and traditional in character.
5. Little power is used.
6. These industries usually serve the local market and generally work on the orders placed by other Industries.
7. The principal cottage industries of India are hand-loom weaving (cotton, silk, jute, etc.) pottery, washing soap making, conch shell, handmade paper, horn button, mother-of-pearl button, cutlery, lock and key making industries.

PART – D

Answer for each question in about a page.

Question 1.
Discuss the requirements for Rural Industries?
Answer:
Requirements for Rural Development:
Rural industries embrace all industries which are run by rural people in rural areas. These industries are based primarily on the utilization of locally available raw materials, skills, and a small amount of capital. The rural industries can be broadly classified into a) cottage industries, b) village industries, c) small industries, d) tiny industries and e) agro-based industries.

Cottage Industries:

1. Cottage industries are generally associated with agriculture and provide both part-time and full-time jobs in rural areas.
2. Little outside labour is employed. Normally, the members of the household provide the necessary labour.
3. These industries are generally hereditary and traditional in character.
4. Little power is used.
5. These industries usually serve the local market and generally work on the orders placed by other industries.
6. Examples of cottage industries are mat, coir and basket making industries. The principal cottage industries of India are hand-loom weaving (cotton, silk, jute, etc.) pottery, washing soap making, conch shell, handmade paper, horn button, mother-of-pearl button, cutlery, lock and key making industries.

Village Industries:
1. Village industries are traditional in nature and depend on local raw-material. They cater to the needs of the local population. Examples of village industries are gur and khandsari, cane and bamboo baskets, shoemaking, pottery, and leather tanning. These are almost similar to the cottage industries.

2. Small Scale Industries (SSIs):
Most small scale industries are located near urban centers. They produce goods for local as well as foreign markets. Examples of such small-scale industries are the manufacture of sports goods, soaps, electric fans, footwear, sewing machines and handloom weaving.

SSIs are also known as Micro, Small & Medium Enterprises (MSMEs). They are defined and categorized by the Micro, Small & Medium Enterprises Development Act, 2006. The Act categorizes different scale of industries on the basis of investment in plant and machinery in case of manufacturing industries and on the basis of investment in equipment in case of service sector industries.

3. Agro-based Industries:
These industries are based on the processing of agricultural produce. Agro-based industries may be organized on a cottage-scale, small-scale, and large-scale. These industries tend to develop household settlements around them as they employ more labour on a regular basis. Examples are textile, sugar, paper, vegetable oil, tea, and coffee industries.

Question 2.
Mention the Rural Roads and Rural Market?
Answer:

1. Road Market refers to the infrastructure created to buy and sell the products produced in rural areas and also to purchase the needed products and farm inputs produced in urban and other regions.
2. Rural marketing is still defective as farmers lack bargaining power, a long chain of middlemen, lack of organization, insufficient storage facilities, poor transport facilities, absence of grading, inadequate information, and poor marketing arrangements.
3. Road transport is an important constituent of the transport system.
4. Rural Roads constitute the very lifeline of the rural economy.
5. A well-constructed road network in rural areas would bring several benefits including the linking of remote villages with urban centers, reduction in the cost of transportation of agricultural inputs, and promotion of marketing for rural produces.
6. It helps the farmers to bring their produce to the urban markets and to have access to distant markets and other services.

Students can download 11th Economics Chapter 9 Development Experiences in India Questions and Answers, Notes, Samcheer Kalvi 11th Economics Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 9 Development Experiences in India

Samacheer Kalvi 11th Economics Development Experiences in India Text Book Back Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
Which of the following is the way of Privatisation?
(a) Disinvestment
(b) Denationalization
(c) Franchising
(d) All the above
Answer:
(d) All the above

Question 2.
Countries today are to be …………………… for their growth.
(a) Dependent
(b) Interdependent
(c) Free trade
(d) Capitalist
Answer:
(b) Interdependent

Question 3.
The Arguments against LPG is ……………………….
(a) Economic growth
(b) More investment
(c) Disparities among people and regions
(d) Modernization
Answer:
(c) Disparities among people and regions

Question 4.
Expansion of FDI ……………………….
(a) Foreign Private Investment
(b) Foreign Portfolio
(c) Foreign Direct Investment
(d) Forex Private Investment
Answer:
(c) Foreign Direct Investment

Question 5.
India is the largest producer of ……………………. in the world.
(a) Fruits
(b) Gold
(c) Petrol
(d) Diesel
Answer:
(a) Fruits

Question 6.
Foreign investment includes …………………………
(a) FDI only
(b) FPI and FFI
(c) FDI and FPI
(d) FDI and FFI
Answer:
(c) FDI and FPI

Question 7.
The Special Economic Zones policy was announced in ………………………..
(a) April 2000
(b) July 1990
(c) April 1980
(d) July 1970
Answer:
(a) April 2000

Question 8.
Agricultural Produce Market Committee is a ………………………….
(a) Advisory body
(b) Statutory body
(c) Both a and b
(d) None of these above
Answer:
(b) Statutory body

Question 9.
Goods and Services Tax is ………………………..
(a) A multi point tax
(b) Having cascading effects
(c) Like Value Added Tax
(d) A single point tax with no cascading effects.
Answer:
(d) A single point tax with no cascading effects.

Question 10.
The New Foreign Trade Policy was announced in the year ……………………….
(a) 2000
(b) 2002
(c) 2010
(d) 2015
Answer:
(d) 2015

Question 11.
Financial Sector reforms is mainly related to ………………………..
(a) Insurance Sector
(b) Banking Sector
(c) Both a and b
(d) Transport Sector
Answer:
(c) Both a and b

Question 12.
The Goods and Services Tax Act came into effect on ……………………..
(a) 1^st July 2017
(b) 1^st July 2016
(c) 1^st January 2017
(d) 1^st January 2016
Answer:
(a) 1^st July 2017

Question 13.
The new economic policy is concerned with the following
(a) Foreign investment
(b) Foreign technology
(c) Foreign trade
(d) All the above
Answer:
(d) All the above

Question 14.
The recommendation of Narashimham Committee Report was submitted in the year ………………………
(a) 1990
(b) 1991
(c) 1995
(d) 2000
Answer:
(b) 1991

Question 15.
The farmers have access to credit under Kisan credit card scheme through the following except ……………………….
(a) Co – operative banks
(b) RRBs
(c) Public sector banks
(d) All the above
Answer:
(a) Co – operative banks

Question 16.
The Raja Chelliah Committee on Trade Policy Reforms suggested the peak rate on import duties at ……………………….
(a) 25%
(b) 50%
(c) 60%
(d) 100%
Answer:
(b) 50%

Question 17.
The first ever SEZ in India was set up at ………………………….
(a) Mumbai
(b) Chennai
(c) Kandla
(d) Cochin
Answer:
(c) Kandla

Question 18.
‘The Hindu Rate of Growth’ coined by Raj Krishna refers to ………………………
(a) Low rate of economic growth
(b) High proportion of Hindu population
(c) Stable GDP
(d) None
Answer:
(a) Low rate of economic growth

Question 19.
The highest rate of tax under GST is ………………………. (as on July1, 2017).
(a) 18%
(b) 24%
(c) 28%
(d) 32%
Answer:
(c) 28%

Question 20.
The transfer of ownership from public sector to private sector is known as ……………………..
(a) Globalization
(b) Liberalization
(c) Privatization
(d) Nationalization
Answer:
(c) Privatization

PART – B

Answer the following questions in one or two sentences.

Question 21.
Why was structural reform implemented in the Indian Economy?
Answer:
Indian economy introduced structural reforms to face the economic crisis in the form of the balance of payments problem in 1991.

Question 22.
State the reasons for implementing LPG?
Answer:
Liberalization:

• Liberalization refers to the removal of the relaxation of governmental restrictions in all stages of the industry.
• De-licensing, decontrol, deregulation, subsidies (incentives), and a greater role for financial institutions are the various facets of liberalization.

Privatization:

• Privatization means the transfer of ownership and management of enterprises from the public sector to the private sector.
• Denationalization, disinvestment, and opening exclusive public sector enterprises to the private sector are the gateways to privatization.

Globalization:

• Globalization refers to the integration of the domestic (Indian) economy with the rest of the world. Import liberalization through reduction of tariff and non-tariff barriers, opening the doors to Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) are some of the measures towards globalization.

Question 23.
State the meaning of Privatization?
Answer:
Privatization means the transfer of ownership and management of enterprises from the public sector to the private sector.

Question 24.
Define disinvestment?
Answer:
Disinvestment means selling of government securities of Public Sector Undertakings [PSUs] to other PSUs or private sectors or banks. This process has not been fully implemented.

Question 25.
Write three policy initiatives introduced in 1991 – 92 to correct the fiscal imbalance?
Answer:

1. Reduction in fertilizer subsidy.
2. Abolition of subsidy on sugar.
3. Disinvestment of a part of the government’s equity holdings in select public sector undertakings.
4. Expenditures on welfare measures were reduced.

Question 26.
State the meaning of Special Economic Zones?
Answer:

1. The Special Economic Zones [SEZs] policy was announced in April 2000.
2. As per the Special Economic Zones Act of 2005, the government has so far notified about 400 such zones in the country.
3. The SEZ deprives the farmers of their land and livelihood, it is harmful to agriculture.
4. To promote export and Industrial growth in line with globalization the SEZ was introduced in many countries.

Question 27.
State the various components of Central government schemes under post-harvest measures?
Answer:

1. Mega food parks, Integrated cold chain, value addition preservation infrastructure, modernization of slaughterhouse.
2. Scheme for quality-assurance, codex standards, research and development, and other promotional activities.

PART – C

Answer the following questions in one paragraph.

Question 28.
How do you justify the merits of Privatization?
Answer:

1. Privatization means the transfer of ownership and management of enterprises from the public sector to the private sector.
2. Denationalization, disinvestment, and opening exclusive public sector enterprises to the private sector are the gateways to privatization.

Question 29.
What are the measures taken towards Globalization?
Answer:
Globalization refers to the integration of the domestic economy with the rest of the world. Import liberalization through reduction of tariff and non-tariff barriers, opening the doors to foreign direct investment and foreign portfolio investment are some of the measures towards globalization.

Question 30.
Write a note on Foreign investment policy?
Answer:

1. Foreign Investment Policy measure has enhanced the Industrial competition and improved the business environment in the country.
2. Foreign investments including FDI and FPI were allowed.
3. The government announced a specified list of high-technology and high-investment priority industries.
4. Automatic permission was granted for Foreign Direct Investment [FDI] upto 51 % foreign equity.
5. The limit was raised to 74% and subsequently to 100% for many of these industries.
6. Foreign Investment Promotion Board [FIPB] has been set up to negotiate with international firms and approve foreign direct investment.

Question 31.
Give a short note on Cold Storage?
Answer:
Problems relating to the marketing of fruits and vegetables is related to their perishability. Perishability is responsible for high marketing costs, market gluts, price fluctuations, and other similar problems.

In order to overcome this constraint, the Government of India and the ministry of agriculture promulgated “Cold Storage Order 1964” under section 3 of the Essential Commodities Act, 1955. However, the cold storage facility is still very poor and highly inadequate.

Question 32.
Mention the Functions of APMC?
Answer:
The Agriculture Produce Market Committee [APMC] is a statutory body constituted by State Government in order to trade in agricultural or horticultural or livestock products.

Functions of APMC:

1. To promote public private partnership in the ambit of agricultural markets.
2. To provide market led extension services to farmer.
3. To bring transparency in pricing system and transactions taking place in market in a transparent manner.
4. To ensure payments to the farmers for the sale of agricultural produce on the same day.
5. To promote agricultural activities.
6. To display data on arrivals and rates of agricultural produce from time to time into the market.

Question 33.
List out the features of the new trade policy?
Answer:
The trade policy of 1 April 1992 freed imports of almost all intermediate and capital goods. Only 71 items remained restricted. This would affect the domestic industries. Rationalization of tariff structure and removal of quantitative restrictions.

Question 34.
What is GST? Write its advantages?
Answer:

1. GST (Goods and Services Tax) is defined as the tax levied when a consumer buys a good or service.
2. Removing cascading tax effect
3. Single point tax
4. Higher threshold for registration
5. Composition scheme for small business
6. The online simpler procedure under GST
7. Defined treatment for e-commerce
8. Increased efficiency in logistics
9. Regulating the unorganized sector

PART – D

Answer the following questions in about a page.

Question 35.
Discuss the important initiatives taken by the Government of India towards Industrial Policy?
Answer:
The Special Economic Zones (SEZs) policy was announced in April 2000.
The major objectives of SEZs are:

1. To enhance foreign investment especially to attract foreign direct investment (FDI) and thereby increasing GDP.
2. To increase shares in global export.
3. To generate additional economic activity.
4. To create employment opportunities.
5. To develop infrastructure facilities.
6. To exchange technology in the global market.

Main characteristics of SEZs:
The geographically demarked area with physical security.

1. Administrated by a single body/authority.
2. Streamlined procedures.
3. Having a separate custom area
4. Governed by more liberal economic laws.
5. Greater freedom to the firms located in SEZs.

Question 36.
Explain the objectives and characteristics of SEZs?
Answer:

1. The Special Economic Zones [SEZs] Policy was announced in April 2000.
2. The Special Economic Zones Act of 2005, the government has so far notified about 400 such zones in the country.

1. Major objectives of SEZs:

• To enhance foreign investment, especially to attract foreign direct investment [FDI] and thereby increasing GDP.
• To increase shares in Global Export (International Business).
• To generate additional economic activity.
• To create employment opportunities.
• To develop infrastructure facilities.
• To exchange technology in the global market.

2. Main Characteristics of SEZ:

• The geographically demarked area with physical security.
• Administrated by single body authority.
• Streamlined procedures.
• Having separate custom area.
• Governed by more liberal economic laws.
• Greater freedom to the firms located in SEZs.

Question 37.
Describe the Salient features of EXIM policy [2015 – 2020]?
Answer:
The new EXIM policy has been formulated focusing on increasing in exports scenario, boosting production, and supporting the concepts like Make in India and Digital India.

1. Reduce export obligations by 25% and give a boost to domestic manufacturing supporting the “Make in India” concept.
2. As a step to the Digital India concept, the online procedure to upload digitally signed documents, and a mobile app for filing tax, stamp duty has been developed.
3. Repeated submission of physical copies of documents is not required.
4. Export obligation period for export items related to defense, military store, aerospace, and nuclear energy to be 24 months.
5. EXIM policy 2015 – 2020 is expected to double the share of India in World Trade from the present level of 3% by the year 2020. This appears to the too ambitious.

Samacheer Kalvi 11th Economics Development Experiences in India Additional Important Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
Which organization established EXIM bank?
(a) Reserve Bank of India
(b) Central Bank
(c) State Bank
(d) ICICI bank.
Answer:
(a) Reserve Bank of India

Question 2.
……………………… records all the visible and invisible items.
(a) Balance of payments
(b) Exports
(c) Imports
(d) None
Answer:
(a) Balance of payments

Question 3.
The new export and import policy was announced in the year ………………………..
(a) 1970
(b) 1980
(c) 1991
(d) 2002
Answer:
(c) 1991

Question 4.
The foreign investment policy can be broadly classified into …………………….. categories.
(a) Two
(b) Three
(c) Four
(d) Five
Answer:
(c) Four

Question 5.
Globalization means …………………………
(a) Integration of the economy with the world economy
(b) Increasing degrees of openness in respect of international trade.
(c) process of transformation of the world into a single economic unit.
(d) All the above
Answer:
(d) All the above

Question 6.
The term …………………… means the integration of the economy of each country with the world economy.
(a) Globalization
(b) Privatization
(c) Liberalization
(d) None of the above
Answer:
(a) Globalization

Question 7.
Major policy measures have been launched as a part of the programmes ………………………….
(a) LPG
(b) Liberalization
(c) Privatization
(d) Globalization
Answer:
(a) LPG

Question 8.
……………………. is the major function of WTO.
(a) Administering WTO trade agreements
(b) Forum for trade negotiations
(c) Handling trade disputes
(d) All the above
Answer:
(d) All the above

Question 9.
Foreign trade creates that facilities of …………………………
(a) Imports of capital goods
(b) Flow of technology
(c) Better allocation of resources
(d) All the above
Answer:
(d) All the above

Question 10.
………………………. trade refers to the trade or exchange of goods and services between two or more countries.
(a) Internal
(b) International
(c) Domestic
(d) None
Answer:
(b) International

PART – B

Answer the following questions in one or two sentences.

Question 1.
Define “Raja – J. Chelliah Committee”?
Answer:

1. The Chelliah Committee’s Report had suggested a drastic reduction in import duties.
2. It had suggested a peak rate of 50 percent.
3. As a first step towards a gradual reduction in the tariffs, the 1991-92 budget had reduced the peak rate of import duty from more than 300 percent to 150 percent.
4. The process of lowering the customs tariffs was carried further in successive budgets.

Question 2.
Mention the “Basic Economic Problems”?
Answer:
The Basic Economic Problems such as

1. Poverty
2. Unemployment
3. Discrimination
4. Social exclusion
5. Deprivation
6. Poor health care
7. Rising inflation
8. Agricultural stagnation
9. Food insecurity and
10. Labour migration

Question 3.
Give a short note on “Abolition of MRTP Act”?
Answer:

1. The New Industrial policy of 1991 has abolished the Monopoly and Restrictive Trade Practices Act 1969.
2. In 2010, the Competition Commission has emerged as the watchdog in monitoring competitive practices in the economy.
3. The policy caused big changes including the emergence of a strong and competitive private sector and a sizable number of foreign companies in India.

PART – C

Answer the following questions in one paragraph.

Question 1.
Define “Kisan Credit Card Scheme”?
Answer:

1. A Kisan Credit Card [KCC] is a credit delivery mechanism that is aimed at enabling farmers to have quick and timely access to affordable credit.
2. It was launched in 1998 by the Reserve Bank of India and NABARD.
3. The Scheme aims to reduce farmer dependence on the informal banking sector for credit – which can be very expensive and suck them into a debt spiral.
4. The card is offered by co-operative banks, regional rural banks, and public sector banks.
5. The working of the KCC, the government has advised banks to convert the KCC into a smart card cum debit card.

Question 2.
Mention how the Indian economy liberalization policy helped in the recovery?
Answer:
The liberalization policy helped in the recovery of the Indian Economy:
There was enormous and regular flow of foreign direct investment [FDI]

1. Foreign exchange reserves started rising.
2. There was rapid Industrialization.
3. The pattern of consumption started improving.
4. Infrastructure facilities such as express highways, metro rails, flyovers, and airports started expanding.
5. The benefits of this growth in some sectors have not reached the marginalized sections of the community.
6. The process of development has generated serious social, economic, political, demographic, and ecological issues and challenges.

Question 3.
Explain the impact of LPG on the Indian economy?
Answer:

1. According to International Monetary Fund, World Economic Outlook, the GDP (nominal) of India in 2016 at current prices is $2,251 billion.
2. India contributed 2.99% of the total world’s GDP on an exchange rate basis.
3. India shared 17.5 percent of the total world population and 2.4 percent of the world Surface area.
4. India was now the 7^th largest economy in the world.
5. India was in 3^rd position after China and Japan among Asian countries. India shared 8.50% of total Asia’s GDP (nominal) in 2016.

PART – D

Answer the following questions in about a page.

Question 1.
Explain the Monetary and Financial Sector Reforms?
Answer:
Monetary reforms aimed at doing away with interest rate distortions and rationalizing the structure of lending rates. The new policy tried in many ways to make the banking system more efficient.

Some of the measures undertaken were:
1. Reserve Requirements:

• Reduction in Statutory liquidity ratio [SLR] and the cash reserve ratio [CRR] was recommended by the Narasimham Committee Report, 1991.
• It was proposed to cut down the SLR from 38.5 percent to 25 percent within a time span of three years.

2. Interest Rate Liberalisation:
RBI controlled:

• The interest rates are payable on deposits.
• The interest rate could be charged for bank loans.
• Greater competition among public sector, private sector, and foreign banks and elimination of administrative constraints.
• Liberalization of bank branch licensing policy in order to rationalize the existing branch network.
• Banks were given the freedom to relocate branches and open specialized branches.
• Guidelines for opening new private sector banks.
• New accounting norms regarding the classification of assets and provisions of bad debt were introduced in tune with the Narasimham Committee Report.

Question 2.
Explain the Agrarian crisis after reforms?
Answer:
1. High input Costs:

• The biggest input for farmers is seeds.
• Before liberalization, farmers across the country had access to seeds from state government institutions.
• The institutions produced their own seeds and were responsible for their quality and price.
• India’s seed market was opened up to global agribusinesses.
• The deregulation of many state government institutions were closed down in 2003.
• Seed prices shot up and fake seeds made an appearance in a big way.

2. Cutback in agricultural subsidies:

• Farmers were encouraged to shift from growing a mixture of traditional crops to export-oriented “cash crops” like chili, cotton, and tobacco.
• Liberalization policies reduced the subsides on pesticide and fertilizer and elasticity.
• As a result, prices have increased by 300%.

3. Reduction of import duties:

• With a view to open India’s markets, the liberalization reforms also withdrew tariffs and duties on imports.
• By 2001, India completely removed restrictions on imports of almost 1,500 items including food.

4. Paucity of credit facilities:

• The lending pattern of commercial banks, including nationalized banks, drastically changed.
• As a result, the loan was not easily adequate.
• This has forced the farmers to rely on moneylenders who charge exorbitant rates of interest.

Students can download 11th Economics Chapter 12 Mathematical Methods for Economics Questions and Answers, Notes, Samcheer Kalvi 11th Economics Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 12 Mathematical Methods for Economics

Samacheer Kalvi 11th Economics Mathematical Methods for Economics Text Book Back Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
Mathematical Economics is the integration of ………………………
(a) Mathematics and Economics
(b) Economics and Statistics
(c) Economics and Equations
(d) Graphs and Economics
Answer:
(a) Mathematics and Economics

Question 2.
The construction of demand line or supply line is the result of using ……………………..
(a) Matrices
(b) Calculus
(c) Algebra
(d) Analytical Geometry
Answer:
(d) Analytical Geometry

Question 3.
The first person used the mathematics in Economics is ……………………..
(a) Sir William Petty
(b) Giovanni Ceva
(c) Adam Smith
(d) Irving Fisher
Answer:
(b) Giovanni Ceva

Question 4.
Function with single independent variable is known as ……………………..
(a) Multivariate Function
(b) Bivariate Function
(c) Univariate Function
(d) Polynomial Function
Answer:
(c) Univariate Function

Question 5.
A statement of equality between two quantities is called ………………………
(a) Inequality
(b) Equality
(c) Equations
(d) Functions
Answer:
(c) Equations

Question 6.
An incremental change in dependent variable with respect to change in independent variable is known as ………………………
(a) Slope
(b) Intercept
(c) Variant
(d) Constant
Answer:
(a) Slope

Question 7.
(y – y₁) = m(x-x₁) gives the ……………………….
(a) Slope
(b) Straight line
(c) Constant
(d) Curve
Answer:
(b) Straight line

Question 8.
Suppose D = 50 – 5P. When D is zero then ………………………….
(a) P is 10
(b) P is 20
(c) P is 5
(d) P is -10
Answer:
(a) P is 10

Question 9.
Suppose D = 150 – 5P. Then, the slope is ………………………
(a) -5
(b) 50
(c) 5
(d) -50
Answer:
(d) -50

Question 10.
Suppose determinant of a matrix ∆ = 0, then the solution ……………………..
(a) Exists
(b) Does not exist
(c) Is infinity
(d) Is zero
Answer:
(b) Does not exist

Question 11.
State of rest is a point termed as ………………………
(a) Equilibrium
(b) Non – Equilibrium
(c) Minimum Point
(d) Maximum Point
Answer:
(a) Equilibrium

Question 12.
Differentiation of constant term gives ……………………..
(a) One
(b) Zero
(c) Infinity
(d) Non-infinity
Answer:
(b) Zero

Question 13.
Differentiation of xⁿ is ………………………
(a) nx^(n-1)
(b) nx⁽ⁿ⁺¹⁾
(c) Zero
(d) One
Answer:
(a) nx^(n-1)

Question 14.
Fixed Cost is the ……………………. term in cost function represented in mathematical form.
(a) Middle
(b) Price
(c) Quantity
(d) Constant
Answer:
(d) Constant

Question 15.
The first differentiation of Total Revenue function gives ………………………..
(a) Average Revenue
(b) Profit
(c) Marginal Revenue
(d) Zero
Answer:
(c) Marginal Revenue

Question 16.
The elasticity of demand is the ratio of ……………………….
(a) Marginal demand function and Revenue function
(b) Marginal demand function to Average demand function
(c) Fixed and variable revenues
(d) Marginal Demand function and Total demand function
Answer:
(b) Marginal demand function to Average demand function

Question 17.
If x + y = 5 and x – y = 3 then, Value of x ………………………
(a) 4
(b) 3
(c) 16
(d) 8
Answer:
(a) 4

Question 18.
Integration is the reverse process of ……………………….
(a) Difference
(b) Mixing
(c) Amalgamation
(d) Differentiation
Answer:
(d) Differentiation

Question 19.
Data processing is done by ……………………….
(a) PC alone
(b) Calculator alone
(c) Both PC and Calculator
(d) Pen drive
Answer:
(c) Both PC and Calculator

Question 20.
The command Ctrl + M is applied for ………………………
(a) Saving
(b) Copying
(c) Getting new slide
(d) Deleting a slide
Answer:
(c) Getting new slide

PART – B

Answer the following Questions in one or two sentences.

Question 1.
1f 62 = 34 + 4x what is x?
Answer:
62 – 34 = 4x
⇒ 28 = 4x
28 ÷ 4 = x
∴ x = 7

Question 2.
Given the demand function q = 150 – 3p, derive a function for MR?
Answer:
Demand function q = 150 – 3p
\(\frac{dq}{dp}\) = -3

Question 3.
Find the average cost function where TC = 60+ 10x + 15x²
Answer:
TC = 60 + 10x +15x²
Average Cost = \(\frac { TC }{ x }\)
= \(\frac{60+10 x+15 x^{2}}{x}\)
= \(\frac { 60 }{ x }\) + \(\frac { 10x }{ x }\) + \(\frac{15 x^{2}}{x}\)
AC = \(\frac { 60 }{ x }\) + 10 + 15x

Question 4.
The demand function is given by x = 20 – 2p – p² where p and x are the prices and the quantity respectively. Find the elasticity of demand for p = 2.5?
Answer:
e_d = \(\frac{p}{x}\) \(\frac{dx}{dp}\)
\(\frac{dx}{dp}\) = -2-2p

Question 5.
Suppose the price p and quantity q of a commodity are related by the equation q = 30 – 4p – p² find
(I) e_d at p = 2
(II) MR
Answer:
(I)

(II) MR – [Marginal Revenue]
MR = \(\frac{dq}{dp}\)
Given q = 30 – 4p – p²
\(\frac{dq}{dp}\) = 0 – 4(1) – 2p^2-1
\(\frac{dq}{dp}\) = -4 – 2p

Question 6.
What is the formula for the elasticity of supply if you know the supply function?
Answer:
Elasticity of supply = \(\frac{dq}{dp}\)

Question 7.
What are the main menus of MS word?
Answer:

Ms Word is a word processor, which helps to create, edit, print, and save documents for future retrieval and reference.

PART – C

Answer the following questions in one paragraph:

Question 1.
Illustrate the uses of Mathematical Methods in Economics?
Answer:
Uses of Mathematical Methods in Economics:

1. Mathematical methods help to present the economic problems in a more precise form.
2. Mathematical methods help to explain economic concepts.
3. Mathematical methods help to use a large number of variables in economic analyses.
4. Mathematical methods help to quantify the impact or effect of any economic activity implemented by the government or anybody.

Question 2.
Solve for x quantity demanded if 16x – 4 = 68 + 7x?
Answer:
16x – 4 = 68 + 7x
16x – 7x = 68 + 4
9x = 72
x = \(\frac{72}{9}\) = 8
∴ x = 8

Question 3.
A firm has the revenue function R = 600q – 0.03q² and the cost function is C = 150q + 60,000, where q is the number of units produced. Find AR, AC, MR and MC?
Answer:
R = 600q – 0.03q²
C = 150q + 60000

(i) AR = \(\frac { R }{ q }\)
= \(\frac{600 q-0.03 q^{2}}{q}\)
= \(\frac { 600q }{ q }\) – \(\frac{0.03 \mathrm{q}^{2}}{\mathrm{q}}\)
= AR = 600 – 0.0.q

(ii) AC = \(\frac { c }{ q }\)
= \(\frac { 150q + 60000 }{ q }\)
= \(\frac { 150q }{ q }\) + \(\frac { 60000 }{ q }\)
AC = 150 + (\(\frac { 60000 }{ q }\))

(iii) MR = \(\frac { dr }{ dq }\)
R = 600q – 0.03q
\(\frac { dR }{ dq }\) = 600 (1) – 0.03 (2q)
MR = 600 – 0.06q

(iv) MC = \(\frac { dc }{ dq }\)
C = 150q + 60000
\(\frac { dc }{ dq }\) = 150 (1) + 0
MC = 150

Question 4.
Solve the following linear equations by using Cramer’s rule?
x₁ – x₂ + x₃ = 2;
x₁ + x₂ – x₃ = 0;
– x₁ – x₂ – x₃ = -6
Answer:
x₁ – x₂ + x₃ = 2
x₁ + x₂ – x₃ = 0
– x₁ – x₂ – x₃ = -6
AX = B

Question 5.
If a firm faces the total cost function TC = 5 + x² where x is output, what is TC when x is 10?
Answer:
TC = 5 + x²
TC = 5 + 10²
TC = 5 + 100
∴TC = 105

Question 6.
If TC = 2.5q³ – 13q² + 50q + 12 derive the MC function and AC function?
Answer:
\(\frac{dc}{dq}\) = MC
AC = \(\frac{TC}{q}\)
\(\frac{dc}{dq}\) = 2.5(3)q² – [13 × 2]q + 50
MC = 7.5q² – 26q + 50
AC = \(\frac { 2.5q^{ 3 }-13q^{ 2 }+50q+12 }{ q } \)
∴ AC = 2.5q² – 13q + 50 + \(\frac{12}{q}\)

Question 7.
What are the steps involved in executing a MS Excel sheet?
Answer:

1. MS – Excel is used in data analysis by using formulas.
2. A spreadsheet is a large sheet of paper that contains rows and columns.
3. The intersection of rows and columns is termed a cell.
4. MS – Excel 2007 version supports up to 1 million rows and 16 thousand columns per worksheet.

MS Excel Start From Various Options:

(I) Click Start → Program → Micro Soft Excel
(II) Double click the MS Excel Icon from the Desktop

Worksheet:
MS – Excel worksheet is a table like a document containing rows and columns with data and formula

There are four kinds of calculation operators. They are:

1. Arithmetic
2. Comparison
3. Text Concatenation [link together]
4. Reference

MS – Excel helps to do data analysis and data presentation in the form of graphs, diagrams, area charts, line chart etc.

PART – D

Answer the following questions in about a page:

Question 1.
A Research scholar researching the market for fresh cow milk assumes that Qt = f (Pt, Y, A, N, Pc) where Qt is the quantity of milk demanded, Pt is the price of fresh cow milk, Y is average household income, A is advertising expenditure on processed pocket milk, N is population and Pc is the price of processed pocket milk.
Answer:

1. What does Qt = f (Pt, Y, A,N, Pc) mean in words?
2. Identify the independent variables.
3. Make up a specific form for this function.

(Use your knowledge of Economics to deduce whether the coefficients of the different independent variables should be positive or negative.)

1. Qt is the function of Pt, Y, A, N, Pc
Pt – Price of fresh cow milk
Y = Average household income
A = Advertising expenditure on processed pocket milk
N = Population
Pc = Price of processed pocket milk

2. Identify the Independent variables.
“Y” = Average household income
“N” = Population [“N” are Independent Variables]
Pc = Price of processed pocket milk
“Pc” = depending “Pt”
= Pc depending “A”
“A” = depending “N”
∴ Pc depending “Pt”, “A”, and “N”.

3. Make up specific form for this function [use your knowledge of Economics to deduce whether the co-efficient of the different independent variables should be positive or negative]

• “Pc ” = Price of processed pocket milk
  When the price of processed milk increases and the quantity demanded of fresh milk decreases.
• “N” = Population
  When the population increases and the quantity of milk demanded Increases.
• “A” = Advertising expenditure on processed pocket milk
  When advertising expenditure on processed pocket milk increases the quantity of milk demanded. Increases.

“Y” – Average household Income
When average household income Increases and the quantity of milk demanded Increases.
“Pt” – Price of fresh cow milk
When the price of fresh cow milk Increases the quantity of milk demanded decreases.
∴ Qt = (-Pt) (+Y) (+A) (+N) (- Pc)
(-) means decreases; (+) means Increases
∴ Qt = [- Pt + Y + A +N – Pc]

Question 2.
Calculate the elasticity of demand for the demand schedule by using differential calculus method P = 60 – 0.2Q where price is –

1. Zero
2. ₹20
3. ₹40

Answer:

Question 3.
The demand and supply functions are P_d = 1600 – x⁴ and P_s = 2x² + 400 respectively. Find the consumer’s surplus and producer’s surplus at the equilibrium point?
Answer:
P_d = 1600 – x²
P_s = 2x² + 400
P_d = P_s
1600 – xc = 2x² + 400
⇒ 1600 – x² – 2x² – 400 = 0
⇒ -3x² + 1200 = 0
x² = \(\frac{1200}{3}\) = \(\frac{400}{1}\)
x = ±\(\sqrt{400}\)
x = 20

When x = 20
P_d = 1600 – x²
= 1600 – (20)²
= 1600 – 400 = 1200
P^d = 1200
P^s = 2x² + 400
= 2(20)² + 400 = 2(400) + 400
P^s = 1200
Consumer’s Surplus (CS):

Producers Surplus(PS):

Question 4.
What are the ideas of Information and communication technology used in economics?
Answer:
Introduction: Information and Communication Technology [ICT] is the infrastructure that enables computing faster and accurate. The following table gives an idea of the range of technologies that fall under the category of ICT.

The evaluation of ICT has five phases:
They are evaluation in:

1. Computer
2. PC – Personal Computer
3. Microprocessor
4. Internet
5. Wireless links

In Economics, the uses of mathematical and statistical tools need the support of ICT for:

1. Data Compiling
2. Editing
3. Manipulating
4. Presenting the results

Samacheer Kalvi 11th Economics Mathematical Methods for Economics Additional Important Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
The point of intersection of demand line and supply line is known as ……………………
(a) Equilibrium
(b) Intersect
(c) Midpoint
(d) Equal
Answer:
(a) Equilibrium

Question 2.
…………………… is a rectangular array of numbers systematically arranged in rows and columns within brackets.
(a) Maths
(b) Geometry
(c) Graph
(d) Matrix
Answer:
(d) Matrix

Question 3.
……………………. means a change in the dependent variable with respect to a small change in the independent variable.
(a) Differential
(b) Differentiation
(c) Differentiating
(d) Derivative
Answer:
(a) Differential

Question 4.
……………………….. is an addition to the total cost caused by producing one more unit of output.
(a) Marginal Cost
(b) Marginal Product
(c) Marginal Concepts
(d) Marginal Revenue
Answer:
(a) Marginal Cost

Question 5.
Consumer’s surplus theory was developed by the ………………………….
(a) Alfred Marshall
(b) Adam Smith
(c) Lionel Robbinson
(d) Malthus
Answer:
(a) Alfred Marshall

Question 6.
……………………… is a word processor.
(a) MS Word
(b) Microprocessor
(c) Scanner
(d) Personal computer
Answer:
(a) MS Word

Question 7.
……………………. is the infrastructure that enables computing faster and accurate.
(a) Information and Communication Technology
(b) Information and Computer Technology
(c) Information and Connection Technology
(d) Information and Communication Technology
Answer:
(d) Information and Communication Technology

Question 8.
…………………… is used in data analysis by using formula.
(a) MS Word
(b) Microsoft
(c) Word processer
(d) Microprocessor
Answer:
(b) Microsoft

Question 9.
……………………. is a table like a document containing rows and columns with data and formula.
(a) Work Excel
(b) Work Microsoft
(c) Work Processor
(d) Work Sheet
Answer:
(d) Work Sheet

Question 10.
……………………… helps to do data analysis and data presentation in the form of graphs.
(a) MS Excel
(b) Microsoft
(c) Start Excel
(d) Microprocessor
Answer:
(a) MS Excel

ACTIVITY

Question 1.
The petrol consumption of your car is 16 Kilometers per litre. Let x be the distance you travel in Kilometers and p the price per litre of petrol in Rupees. Write expressions for the demand for Petrol?
Answer:
x – Total distance in Km.
p – Price per litre in rupees.
Equation of demand function joining two data points (16, 1) and (8, 2) respectively.

– 8y + 8 = x – 16
x – 16 – 8 + 8y = 0
x + 8y – 24 = 0
x = 24 – 8y
y = p
∴ The demand function x = 24 – 8p
Demand ∝ \(\frac{1}{Price}\)

Question 2.
Make up your own demand function and then derive the corresponding MR function and find the output level which corresponds to zero marginal revenue?

Question 3.
Use an Excel spreadsheet to calculate values for Quantity of demand at various prices for the function Q = 100 – 10P then plot these values on a graph?

Question 4.
Open MS – Word and put the title as PRESENT AND ABSENT OF STUDENTS and insert the table and collect the data for all classes of your school and find the class of highest absentees in a month. Justify with the reason for the absentees in a paragraph by using MS Word?

Activity 2, 3, and 4 can be done by the students individually.

Students can download 11th Economics Chapter 8 Indian Economy Before and After Independence Questions and Answers, Notes, Samcheer Kalvi 11th Economics Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 8 Indian Economy Before and After Independence

Samacheer Kalvi 11th Economics Indian Economy Before and After Independence Text Book Back Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
The arrival of Vasco da Gama in Calicut, India ………………………
(a) 1498
(b) 1948
(c) 1689
(d) 1849
Answer:
(a) 1498

Question 2.
In 1614 Sir Thomas Roe was successful in getting permission from ……………………
(a) Akbar
(b) Shajahan
(c) Jahangir
(d) Noorjahan
Answer:
(c) Jahangir

Question 3.
The power for governance of India was transferred from the East India Company (EIC) to the British crown in ………………………..
(a) 1758
(b) 1858
(c) 1958
(d) 1658
Answer:
(b) 1858

Question 4.
Ryotwari system was initially introduced in …………………….
(a) Kerala
(b) Bengal
(c) Tamil Nadu
(d) Maharashtra
Answer:
(c) Tamil Nadu

Question 5.
First World War started in the year ……………………..
(a) 1914
(b) 1814
(c) 1941
(d) 1841
Answer:
(a) 1914

Question 6.
When did the Government of India declared its first Industrial Policy?
(a) 1956
(b) 1991
(c) 1948
(d) 2000
Answer:
(c) 1948

Question 7.
The objective of the Industrial Policy 1956 was ………………………..
(a) Develop heavy industries
(b) Develop agricultural sector only
(c) Develop private sector only
(d) Develop cottage industries only
Answer:
(a) Develop heavy industries

Question 8.
The industry which was de-reserved in 1993.
(a) Railways
(b) Mining of copper and zinc
(c) Atomic energy
(d) Atomic minerals
Answer:
(b) Mining of copper and zinc

Question 9.
The father of Green Revolution in India was
(a) M.S. Swaminathan
(b) Gandhi
(c) Visweswaraiah
(d) N.R. Viswanathan
Answer:
(a) M.S. Swaminathan

Question 10.
How many commercial banks were nationalised in 1969?
(a) 10
(b) 12
(c) 14
(d) 16
Answer:
(c) 14

Question 11.
The main objective of nationalisation of banks was …………………………
(a) Private social welfare
(b) Social welfare
(c) To earn
(d) Industries monopoly
Answer:
(b) Social welfare

Question 12.
The Planning Commission was setup in the year ………………………….
(a) 1950
(b) 1955
(c) 1960
(d) 1952
Answer:
(a) 1950

Question 13.
In the first five year plan, The top priority was given to ……………………… Sector.
(a) Service
(b) Industrial
(c) Agriculture
(d) Bank
Answer:
(c) Agriculture

Question 14.
Tenth Five year plan period was ……………………….
(a) 1992 – 1997
(b) 2002 – 2007
(c) 2007 – 2012
(d) 1997 – 2002
Answer:
(b) 2002 – 2007

Question 15.
According to HDR (2016), India ranked …………………….. out of 188 coutries.
(a) 130
(b) 131
(c) 135
(d) 145
Answer:
(b) 131

Question 16.
Annual Plans formed in the year ………………………
(a) 1989 – 1991
(b) 1990 – 1992
(c) 2000 – 2001
(d) 1981 – 1983
Answer:
(b) 1990 – 1992

Question 17.
The Oldest large scale industry in India ………………………
(a) Cotton
(b) Jute
(c) Steel
(d) Cement
Answer:
(a) Cotton

Question 18.
Human Development Index (HDI) was developed by …………………………
(a) Jawaharlal Nehru
(b) M.K. Gandhi
(c) Amartiya Sen
(d) Tagore
Answer:
(c) Amartiya Sen

Question 19.
The main theme of the Twelth Five Year Plan ………………………..
(a) Faster and more inclusive growth
(b) Growth with social Justice
(c) Socialistic pattern of society
(d) Taster, more inclusive and sustainable growth
Answer:
(d) Taster, more inclusive and sustainable growth

Question 20.
The PQLI was developed by ……………………….
(a) Planning Commission
(b) Nehru
(c) Morris
(d) Morrisd.Biswajeet
Answer:
(c) Morris

PART – B

Answer the following questions in one or two sentences.

Question 21.
What are the Phases of colonial exploitation of India?
Answer:
The period of merchant capital, the period of industrial capital, the period of finance capital.

Question 22.
Name out the different types of land tenure that existed in India before independence?
Answer:
The three different types of land tenure existed in India before independence. They were:

1. Zamindari System (or) Landlord-Tenant System
2. Mahalwari System (or) Communal System of farming
3. Ryotwari System (or) the Owner-Cultivator System

Question 23.
State the features that distinguish a land tenure system from another system?
Answer:
The land tenure system differs as

1. Who owns the land?
2. Who cultivates the land?
3. Who is responsible for paying the land revenue to the government?

Question 24.
List out the weaknesses of the Green Revolution?
Answer:
Weaknesses of the Green Revolution:

1. Indian Agriculture was still a gamble of the monsoons.
2. This strategy needed heavy investment in seeds, fertilizers, pesticides, and water.
3. The income gap between large, marginal, and small farmers had increased.
4. The gap between irrigated and rain-fed areas had widened.
5. Except in Punjab, and to some extent in Haryana, Farm mechanization had created widespread unemployment among agricultural labourers in the rural areas.
6. Larger chemical use and inorganic materials reduced the soil fertility and spoiled human health. Now organic farming is encouraged.

Question 25.
What are the objectives of the Tenth Five Year plan?
Answer:

1. Double the per capita income in the next 10 years.
2. Aimed to reduce the poverty ratio to 15% by 2012.
3. The growth target was 8.0% but it achieved only 7.2%

Question 26.
What is the difference between HDI and PQLI?
Answer:

Question 27.
Mention the indicators which are used to calculate HDI?
Answer:

1. Life expectancy index.
2. Educational index.
3. GDP per capita.

PART – C

Answer the following questions in one paragraph:

Question 28.
Explain the Period of Merchant Capital?
Answer:

1. The period of merchant capital was from 1757 to 1813.
2. The only aim of the East India Company was to earn profit by establishing monopoly trade in the goods with India and East India.
3. During this period, India had been considered as the best hunting ground for capital by the East Indian company to develop industrial capitalism is Britain.
4. When Bengal and South India came under the political shake of the East India company in 1750s and 1760s, the objective of monopoly trade was fulfilled.
5. The company administration succeeded in generating huge surpluses which were repatriated to England, and the Indian leaders linked this problem of land revenue with that of the drain.
6. Above all, the officers of the company were unscrupulous and corrupt.

Question 29.
The Handicrafts declined in India in British Period. Why?
Answer:

1. Through discriminatory tariff policy, the British Government purposefully destroyed the handicrafts.
2. With the disappearance of Nawabs and Kings, there was no one to protect Indian handicrafts.
3. Indian products could not compete with machine-made products.
4. The introduction of railways in India increased the domestic market for British goods.

Question 30.
Elucidate the different types of land tenure systems in colonial India?
Answer:
Land Tenure refers to the system of land ownership and management. The features that distinguish a land tenure system from the others relate to the following:

• Who owns the land
• Who cultivates the land.
• Who is responsible for paying the land revenue to the government.

Based on these questions, three different types of land tenure existed in India before Independence. They were:

• Zamindari System or the Landlord-Tenant System.
• Mahalwari System or Communal System of Farming.
• Ryotwari System or the Owner-Cultivator System.

Zamindari System or the Landlord-Tenant System:

• This system was created by the British East India Company when in 1793, Lord Cornwallis introduced the ‘Permanent Settlement Act’.
• Under this system, the landlord or the Zamindars were declared as the owners of the land and they were responsible to pay the land revenue to the government.
• The share of the government in total rent collected was fixed as 10/11th, the balance going to the Zamindars as remuneration.

Mahalwari System or Communal System of Farming:

• After the introduction of this system, it was later extended to Madhya Pradesh and Punjab.
• The ownership of the land was maintained by the collective body usually the villagers which served as a unit of management.
• They distributed land among the peasants and collected revenue from them and pay it to the state.

Ryotwari System (or) the Owner-Cultivator System:

• This system was initially introduced in Tamil Nadu and later extended to Maharashtra, Gujarat, Assam, Coorg, East Punjab, and Madhya Pradesh.
• Under this system, the ownership rights of use and control of land were held by the tiller himself.
• There was a direct relationship between owners and tillers. This system was the least oppressive system before Independence.

Question 31.
State the reasons for the nationalization of commercial banks?
Answer:

1. The main objective of economic planning aimed at social welfare.
2. Before independence commercial banks were in the private sector.
3. These commercial banks failed in helping the government to achieve social objectives of planning.
4. Therefore, the government decided to nationalize 14 major commercial banks in 1969.

Question 32.
Write any three objectives of Industrial Policy 1991?
Answer:

1. The economic development of a country particularly depends on the process of Industrialisation.
2. At the time of Independence, India inherited a weak and shallow Industrial base.
3. Therefore during the post-Independence period, the Government of India took the special emphasis on the development of a solid Industrial base.

Question 33.
Give a note on Twelfth Five Year Plan?
Answer:
Twelfth Five Year Plan [2012 – 2017]

1. Twelfth five-year plan (2012 – 17).
2. Its main theme is “Faster more inclusive and sustainable growth”
3. Its growth rate target is 8%

Question 34.
What is PQLI?
Answer:

1. “PQLI” – means Physical Quality of Life Index [PQLI].
   Morris D Morris developed the Physical Quality of life Index ( PQLI).
2. The PQLI is a measure to calculate the quality of life (well being of a country) Three indicators are:
   • Life expectancy
   • Infant mortality rate
   • Literacy rate
3. A scale of each indicator ranges from the number 1 to 100.
4. Number 1 represents the worst performance by any country.
5. 100 is the best performance.

PART – D

Answer the following questions in about a page.

Question 35.
Discuss the Indian economy during the British Period?
Answer:
Britain had exploited India over a period of two centuries of its colonial rule. On the basis of the form of colonial exploitation, economic historians have divided the whole period into three phases namely the period of merchant capital, the period of industrial capital, and the period of finance capital.

1. Period of merchant capital (1757 to 1813):
The only aim of the East India company was to earn profit by establishing monopoly trade. India was considered as the best hunting ground for capital. By attaining political power the objective of monopoly trade was fulfilled. The company administration succeeded in generating huge surpluses which were repatriated to England.

2. Period of industrial capital (1813 to 1858):
India had become a market for British textiles. Indians were exploited by fixing low prices for exports and high price for imports. India’s traditional handicrafts were thrown out of gear.

3. Period of financial capital (Late 19th century – 1947) : Finance imperialism began to entrench. Britain decided to make massive investments in various fields by plundering Indian capital.

4. The land tenure system in India: Land tenure refers to the system of land ownership and management.
The Zamindari system, the Mahalwari system and the Ryotwari system were the systems of land tenure introduced by British.

5. Problems of British rule : Their profit motives led to drain of resources from India. The handicraft industries were collapsed.
The British rule stunted the growth of Indian enterprise. Capital formation in India was retarded.

Question 36.
Explain the role of SSIs in economic development?
Answer:
1. Provide Employment:

• SSIs use labor-intensive techniques. Hence, they provide employment opportunities to a large number of people. Thus, they reduce the unemployment problem to a great extent.
• SSIs provide employment to artisans, technically qualified persons and professionals, people engaged in traditional arts, people in villages and unorganized sectors.
• The employment-capital ratio is high for the SSIs.

2. Bring Balanced Regional Development:

• SSIs promote decentralized development of industries as most of the SSIs are set up in backward and rural areas.
• They remove regional disparities by industrializing rural and backward areas and bring balanced regional development.
• They help to reduce the problems of congestion, slums, sanitation and pollution in cities. They are mostly found in outside city limits.
• They help in improving the standard of living of people residing in suburban and rural areas in India.
• The entrepreneurial talent is tapped in different regions and the income is also distributed instead of being concentrated in the hands of a few individuals or business families.

3. Help in Mobilization of Local Resources:

• SSIs help to mobilize and utilize local resources like small savings, entrepreneurial talent etc., of the entrepreneurs, which might otherwise remain idle and unutilized.
• They pave way for promoting traditional family skills and handicrafts. There is a great demand for handicraft goods in developed countries.
• They help to improve the growth of local entrepreneurs and self-employed professionals in small towns and villages in India

4. Pave for Optimisation of Capital:

• SSIs require less capital per unit of output. They provide quick return on investment due to shorter gestation period. The payback period is quite short in SSIs.
• SSIs function as a stabilizing force by providing high output-capital ratio as well as high employment – capital ratio.
• They encourage the people living in rural areas and small towns to mobilize savings and channelize them into industrial activities.

5. Promote Exports:

• SSIs do not require sophisticated machinery. Hence, import the machines from abroad is not necessary. On the other hand, there is a great demand for goods produced by SSIs.
• Thus they reduce the pressure on the country’s balance of payments. However, in the recent past large scale industries are able to borrow large funds with a low-interest rates and spend large sums on advertisements. Hence SSSs are gradually vanishing.
• SSIs earn valuable foreign exchange through exports from India.

6. Complement Large Scale Industries:

• SSIs play a complementary role to large scale sector and support large scale industries.
• SSIs provide parts, components, accessories to large scale industries and meet the requirements of large scale industries through setting up units near the large scale units.
• SSIs serve as ancillaries to large scale units.

7. Meet Consumer Demands:

• SSIs produce a wide range of products required by consumers in India.
• Hence, they serve as an anti-inflationary force by providing goods of daily use.

8. Develop Entrepreneurship:

• SSIs, help to develop a class of entrepreneurs in society. They help the job seekers to become job givers.
• They promote self-employment and a spirit of self-reliance in society.
• SSIs, help to increase the per capita income of India in various ways.
• They facilitate the development of backward areas and weaker sections of the society.
• SSIs are adept in distributing national income in a more efficient and equitable manner among the various participants of the society.

Question 37.
Explain the objectives of the nationalization of a commercial bank?
Answer:

1. The main objective of nationalization was to attain social welfare. Sectors such as agriculture, small and village industries were in need of funds for their expansion and further economic development.
2. It helped to curb private monopolies in order to ensure a smooth supply of credit to socially desirable sections.
3. To encourage the banking habit among the rural population.
4. To reduce the regional imbalances where the banking facilities were not available.
5. After nationalization, new bank branches were opened in both rural and urban areas, and they created credit facilities mainly for the agriculture sector and its allied activities.

Question 38.
Describe the performance of the 12^th Five Year Plans in India?
Answer:
First Five Year Plan – [1951 – 1956]

• It was based on the Harrod-Domar Model.
• Its main focus was on the agricultural development of the country.
• This plan was successful and achieved a GDP growth rate of 3.6%. [more than its target]

Second Five Year Plan – [1956 -1961]

• It was based on the P.C. Mahalanobis Model.
• Its main focus was on the industrial development of the country.
• This plan was successful and achieved a growth rate of 4.1%

Third Five Year Plan – [1961- 1966]

• This plan was called ‘Gadgil Yojana’.
• The main target of this plan was to make the economy independent and to reach self-prepared position or take off.
• Due to the Indo-China war, this plan could not achieve its growth target of 5.6%. Indian Economy Before and After Independence 137

Fourth Five Year Plan – [1969 – 1974]

• There are two main objectives of this plan (i.e) growth with stability and progressive achievement of self-reliance.
• This plan failed and could achieve a growth rate of 3.3% only against the target of 5.7%.

Fifth Five Year Plan – [1974 – 1979]

• In this plan top priority was given to agriculture, next came industry and mines.
• This plan achieved a growth rate of 4.8% against the target of 4.4%.

Sixth Five Year Plan – [1980 -1985]

• The basic objective of this plan was poverty eradication and technological self-reliance. GARIBI-HATAO was the motto. It was based on investment yojana.
• Its growth target was 5.2% but it achieved 5.7%

Seventh Five Year Plan – [1985 – 1990]

• This plan included the establishment of a self-sufficient economy, opportunities for productive employment.
• For the first time, due to the pressure from the private sector, the private sector got priority over the public sector.
• Its growth target was 5.0% but it achieved 6.0%

Eighth Five Year Plan – [1992- 1997]

• In this plan, the top priority was given to the development of human resources (i.e) employment, education, and public health.
• During this plan, the New Economic Policy of India was introduced.
• This plan was successful and got an annual growth rate of 6.8% against the target of 5.6%.

Ninth Five Year Plan – [1997 – 2002]

• The main focus of this plan was “growth with justice and equity”.
• This plan failed to achieve the growth target of 7% and the Indian economy grew only at the rate of 5.6%.

Tenth Five Year Plan – [2002 – 2007]

• This plan aimed to double the per capita income of India in the next 10 years.
• It aimed to reduce the poverty ratio by 15% by 2012.
• Its growth target was 8.0% but it achieved only 7.2%

Eleventh Five Year Plan – [2007 – 2012]

• Its main theme was “faster and more inclusive growth”.
• Its growth rate target was 8.1% but it achieved only 7.9%

Twelfth Five Year Plan – [2012 – 2017]

• Its main theme is “faster, more inclusive and sustainable growth”.
• Its growth rate target is 8%
• Since the Indian Independence, the five-year plans of India played a very prominent role in the economic development of the country.

These plans had guided the Government as to how it should utilize scarce resources so that maximum benefits can be gained. It is worthy to mention here that Indian Government adopted the concept of five-year plans from Russia.

Samacheer Kalvi 11th Economics Indian Economy Before and After Independence Additional Important Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
……………………… is the backbone of our economic system.
(a) Agriculture
(b) Industry
(c) Service
(d) Banking
Answer:
(a) Agriculture

Question 2.
Disguised unemployment is related to the sector.
(a) Industry
(b) Service
(c) Agriculture
(d) Insurance
Answer:
(c) Agriculture

Question 3.
India’s major ……………………. crops are sugarcane, jute, cotton, tea, coffee, etc.
(a) Food
(b) Cash
(c) Marketing
(d) Commercial
Answer:
(b) Cash

Question 4.
Most modem and rich countries have well developed through their early ………………………… revolution.
(a) Agriculture
(b) Industrial
(c) French
(d) Green
Answer:
(b) Industrial

Question 5.
The income elasticity of Industrial goods is very higher than that of ………………………… goods.
(a) Primary
(b) Secondary
(c) Industrial
(d) Manufacturing.
Answer:
(a) Primary

Question 6.
Which of the following is called as an important agro-based industry?
(a) Steel
(b) Cement
(c) Sugar
(d) Jute
Answer:
(c) Sugar

Question 7.
……………………… Industries normally do not use power.
(a) Small scale
(b) Large scale
(c) Cottage
(d) Manufacturing
Answer:
(c) Cottage

Question 8.
Planning is India is ……………………..
(a) Centralized planning
(b) Democratic planning
(c) Partial planning
(d) Indicative planning
Answer:
(b) Democratic planning

Question 9.
The rate of ………………………. formation indicates its rate of improvement.
(a) Human capital
(b) Money capital
(c) Physical capital
(d) Monetary capital
Answer:
(a) Human capital

Question 10.
Nowadays investment in ……………………… capital is very important.
(a) Money
(b) Physical
(c) Monetary
(d) Human
Answer:
(d) Human

PART – B

Answer the following questions in one or two sentences.

Question 1.
Define “Green Revolution”?
Answer:

1. The term Green Revolution refers to the technological breakthrough in agricultural practices.
2. During the 1960s the traditional agricultural practices were gradually replaced by modem technology and agricultural practices in India.
3. Initially, the new technology was tried in 1960 – 1961 as a pilot project in Seven districts.
4. It was called the High Yielding Varieties Programme [HYVP].

Question 2.
Define “Silk Industry”?
Answer:

1. India is the second-largest [first being China] country in the world in producing natural silk.
2. At present, India produces about 16% of the silk of the world.
3. India enjoys the distinction of being the only country producing all the five known commercial varieties of silk viz Mulberry, Tropical Tussar, Oak Tussar, Eri, and Muga.

Question 3.
When did the petroleum and the natural gas commission was established?
Answer:

1. The first successful oil well was dug in India in 1889 at Digboi, Assam.
2. At present, a number of regions with oil reserves have been identified and oil is being extracted in these regions.
3. For exploration purposes, the Oil and Natural Gas Commission [ONGC] was established in 1956 at Dehradun, Uttarkhand.

PART – C

Answer the following questions in one paragraph:

Question 1.
Explain the Micro, Small, and Medium manufacturing Enterprises?
Answer:

1. Micro Manufacturing Enterprises: The investment in plant and machinery does not exceed ₹25 lakhs.
2. Small Manufacturing Enterprises: The investment in plant and machinery is more than twenty-five lakh rupees but does not exceed ₹5 crores.
3. Medium Manufacturing Enterprises: The investment in plant and machinery is more than ₹5 crores but not exceeding ₹10 crores.

Question 2.
Describe the Micro, Small, and medium service enterprises?
Answer:

1. Micro Service Enterprises: The investment in equipment does not exceed ₹10 lakhs.
2. Small Service Industries: The investment in equipment is more than ₹10 lakhs but does not exceed ₹2 crores.
3. Medium Service Enterprise: The investment in equipment is more than ₹2 crores but does not exceed ₹5 crores.

Question 3.
Explain the Iron and Steel Industry?
Answer:
Iron and Steel Industry:

1. First Steel Industry at Kulti, near Jharia, West Bengal – Bengal ironworks company in 1870.
2. First large-scale steel plant TISCO at Jamshedpur in 1907 followed by IISCO at Bumper in 1919. Both belonged to the private sector.
3. The first public sector unit was “Vishveshvaraya Iron and Steel Works” at Bhadrawati. All these are managed by SAIL (at present all-important steel plants except TISCO, are under the public sector).
4. Steel Authority of India Ltd. [SAIL] was established in 1974 and was made responsible for the development of the steel industry.
5. Presently India is the eighth largest steel producing country in the world.

PART – D

Answer the following questions in about a page.

Question 1.
Describe the Achievement of the Green Revolution?
Answer:
Achievement of the Green Revolution:

1. The major achievement of the new strategy was to boost the production of major cereals viz., wheat and rice.
2. The Green Revolution was confined only to High Yielding Varieties [HYV-] cereals, mainly rice, wheat, maize, and jowar.
3. This strategy was mainly directed to increase the production of commercial crops or cash crops such as sugarcane, cotton, jute oilseeds, and potatoes.
4. Per hectare productivity of all crops had increased due to better seeds.
5. Green Revolution had a positive effect on the development of Industries, which manufactured agricultural tools like tractors, engines, thrashers, and pumping sets.
6. Green Revolution had bought prosperity to rural people.
7. Increased production had generated employment opportunities for rural masses.
8. Due to this, their standard of living had increased.
9. Due to multiple cropping and more use of chemical fertilizers, the demand for labour increased.
10. Financial resources were provided by banks and co-operative societies.
11. These banks provided loans to farmers on easy terms.

Question 2.
Explain the problems of British Rule?
Answer:
Problems of British Rule

1. The British rule stunted the growth of Indian enterprise.
2. The economic policies of the British checked and retarded capital formation in India.
3. The drain of wealth financed capital development in Britain.
4. Indian agricultural sector became stagnant and deteriorated even when a large section of the Indian population was dependent on agriculture for subsistence.
5. The British rule in India led to the collapse of handicraft industries without making any significant contribution to the development of any modem industrial base.
6. Some efforts by the colonial British regime in developing the plantations, mines, jute mills, banking, and shipping, mainly promoted a system of capitalist firms that were managed by foreigners. These profit motives led to a further drain of resources from India.

ACTIVITY

Question 1.
To know the value of freedom, students can collect pictures of Places like Jallianwala Bagh, Meerut, Thandi, and photos of freedom fighters?
Answer:
The Jallianwalabagh Massacre in Amritsar

1. Jallianwala Bagh is one of the main tourist attractions around Amritsar.
2. The tourists, as well as the neighboring people, visited here.
3. Jallianwala bagh is situated at a throwaway distance from the Golden temple, a famous tourist spot in the Amritsar.
4. Jallianwala Bagh in Amritsar is a good looking garden and contains a Sikh spiritual shrine.
5. Jallianwala Bagh history was a well-liked ground for holding meetings and protests during the freedom movement in India.
6. The massacre memorial one of the monuments in India was inaugurated on 13th April in 1961.
7. Dr. Rajendra Prasad, the president of India, inaugurated the memorial in the Jallianwala Bagh, Amritsar at that time.
8. The Bagh has a well that is also fine cosseted by the Jallianwala Bagh Massacre memorial.
9. Jallianwala Bagh is connected with the most tragic day in the history of Indian Freedom.
10. Jallianwala Bagh is a large garden like space extended over to an area of 6.5 acres and the most noticeable structure in this place is the memorial of the 1919 massacre victims.
11. One can also witness the wall with gunshot marks.
12. Jallianwala Bagh National Memorial Trust administrates the activities of this place.

The Jallianwala Bagh Massacre:

1. Jallianwala Bagh reminds us about the great tragedy and it evokes a nationalistic feeling in every Indian.
2. It is the place where the crudest massacre in the history of Indian freedom fight took place in the year 1919.
3. To offer tribute to the innocent people who died in the massacre, this place was built at the spot of the horrible event.
4. On 13th April 1919, a large crowd gathered to protect the take into custody of two Indian Freedom leaders.
5. The crowd was defenseless and included women as well as children.
6. The British General, Edward Dyer ordered his soldiers to fire on the unarmed and helpless crowd.
7. The continuous firing went on targeting the crowd while the people were trapped inside the Jallianwala Bagh, which had only one narrow gate.

Question 2.
Display the demonstration effect of present Indians in culture, dressing, and lifestyle to emphasize the Swadhesi?
Answer:
Swadeshi Movement was a popular strategy for eradicating British rule and for improving the economic conditions of the country.

Mahatma Gandhi:

1. The concept of swadeshi, as per Mahatma Gandhi was to attain self-sufficiency which included the employment of unemployed people by encouraging village Industries and towards building a non-violent society.
2. The main policies of the swadeshi movement included boycotting all types of British products and the restoration of all domestic products.

Bal Gangadhar Tilak, Lala Lajpat Rai, Bipin chandra pal. [Bal, Lai, Pal].

1. The chief forerunners of the swadeshi movement were Bal, Lai. Pal.
2. The writings and speeches of Bal Gangadhar Tilak and his associates paved the initial way.
3. Tilak reaches out to the masses through popular festivals.
4. He transformed the traditional Ganapathi Utsav into a public celebration where patriotic ideas could be spread.
5. Later he inaugurated a Shivaji festival for the same purpose.
6. In 1906, Bengal honoured the great Maratha as a national hero.

Students can download 11th Economics Chapter 7 Indian Economy Questions and Answers, Notes, Samcheer Kalvi 11th Economics Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 7 Indian Economy

Samacheer Kalvi 11th Economics Indian Economy Text Book Back Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
The main gold mine region in Karnataka is ………………………….
(a) Kolar
(b) Ramgiri
(c) Anantpur
(d) Cochin
Answer:
(a) Kolar

Question 2.
Economic growth of a country is measured by national income indicated by …………………………..
(a) GNP
(b) GDP
(c) NNP
(d) Per capita income
Answer:
(b) GDP

Question 3.
Which one of the following is a developed nations?
(a) Mexico
(b) Ghana
(c) France
(d) Sri Lanka
Answer:
(c) France

Question 4.
The position of Indian Economy among the other strongest economies in the world is ……………………….
(a) Fourth
(b) Seventh
(c) Fifth
(d) Tenth
Answer:
(b) Seventh

Question 5.
Mixed economy means ………………………..
(a) Private sectors and banks
(b) Co-existence of Public and Private sectors
(c) Public sectors and banks
(d) Public sectors only
Answer:
(b) Co-existence of Public and Private sectors

Question 6.
The weakness of Indian Economy is ………………………..
(a) Economic disparities
(b) Mixed economy
(c) Urbanisation
(d) Adequate employment opportunities
Answer:
(a) Economic disparities

Question 7.
A scientific study of the characteristics of population is …………………………..
(a) Topography
(b) Demography
(c) Geography
(d) Philosophy
Answer:
(b) Demography

Question 8.
The year 1961 is known as ……………………………
(a) Year of small divide
(b) Year of Population Explosion
(c) Year of Urbanisation
(d) Year of Great Divide
Answer:
(b) Year of Population Explosion

Question 9.
In which year the population of India crossed one billion mark?
(a) 2000
(b) 2001
(c) 2005
(d) 1991
Answer:
(b) 2001

Question 10.
The number of deaths per thousand population is called as ………………………
(a) Crude Death Rate
(b) Crude Birth Rate
(c) Crude Infant Rate
(d) Maternal Mortality Rate
Answer:
(a) Crude Death Rate

Question 11.
The number of births per thousand population is called as ………………………
(a) Crude death rate
(b) Mortality rate
(c) Morbidity rate
(d) Crude Birth Rate
Answer:
(d) Crude Birth Rate

Question 12.
Density of population = ………………………
(a) Land area / Total Population
(b) Land area / Employment
(c) Total Population / Land area of the region
(d) Total Population / Employment
Answer:
(c) Total Population / Land area of the region

Question 13.
Who introduced the National Development Council in India?
(a) Ambedkar
(b) Jawaharlal Nehru
(c) Radhakrishanan
(d) VKRV Rao
Answer:
(b) Jawaharlal Nehru

Question 14.
Who among the following propagated Gandhian Economic thinkings?
(a) Jawaharlar Nehru
(b) VKRV Rao
(c) JC Kumarappa
(d) A.K.Sen
Answer:
(c) JC Kumarappa

Question 15.
The advocate of democratic socialism was ………………………..
(a) Jawaharlal Nehru
(b) P C Mahalanobis
(c) Dr. Rajendra Prasad
(d) Indira Gandhi
Answer:
(a) Jawaharlal Nehru

Question 16.
Ambedkar the problem studied by in the context of Indian Economy is ………………………..
(a) Small land holdings and their remedies
(b) Problem of Indian Currency
(c) Economics of socialism
(d) All of them
Answer:
(b) Problem of Indian Currency

Question 17.
Gandhian Economics is based on the Principle ………………………..
(a) Socialistic idea
(b) Ethical foundation
(c) Gopala Krishna Gokhale
(d) Dadabhai Naoroji
Answer:
(b) Ethical foundation

Question 18.
VKRV Rao was a student of ………………………….
(a) JM Keynes
(b) Colin Clark
(c) Adam smith
(d) Alfred Marshal
Answer:
(a) JM Keynes

Question 19.
Amartya Kumara Sen received the Nobel prize in Economics in the year …………………………
(a) 1998
(b) 2000
(c) 2008
(d) 2010
Answer:
(a) 1998

Question 20.
Thiruvalluvar economic ideas mainly dealt with ………………………….
(a) Wealth
(b) Poverty is the curse in the society
(c) Agriculture
(d) All of them
Answer:
(d) All of them

PART – B

Answer the following questions in one or two sentences.

Question 21.
Write the meaning of Economic Growth?
Answer:
A country’s economic growth is usually indicated by Gross Domestic Product (GDP). The GDP is the total monetary value of the goods and services produced by that country over a specific period of time, usually one year.

Question 22.
State any two features of a developed economy?
Answer:

1. High National Income
2. High Per Capita Income

Question 23.
Write a short note on natural resources?
Answer:
Natural resources are stock or reserve that can be drawn from nature. The major natural resources are land, forest, water, mineral, and energy.

Question 24.
Point out any one feature of the Indian economy?
Answer:
India has a mixed economy.

1. Indian economy is a typical example of a mixed economy.
2. This means both the private and public sectors co-exist and function smoothly.
3. The fundamental and heavy industrial units are being operated under the public sector, while, due to the liberalization of the economy, the private sector has gained importance.
4. This makes it a perfect model for public-private partnerships.

Question 25.
Give the meaning of non-renewable energy?
Answer:
The sources of energy which cannot be renewed or re-used are called non-renewable energy.
(Eg.) Coal, Oil, Gas, etc.

Question 26.
Give a short note on Sen’s ‘Choice of Technique’?
Answer:
Sen’s ‘Choice of Technique’ was a research work where he argued that in a labour surplus economy, generation of employment cannot be increased at the initial stage by the adaptation of capital – intensive technique.

Question 27.
List out the reasons for low per capita income as given by VKRV Rao?
Answer:
Rao gave the following reasons for low per capita income and low levels of per capita nutrition in India:

1. Uneconomic holdings.
2. Low levels of water availability for crops.
3. Excess population pressure on agriculture due to the absence of a large industrial sector.
4. Absence of capital.
5. Absence of autonomy in currency policy.

PART – C

Answer the following questions in one paragraph.

Question 28.
Define Economic Development?
Answer:

1. The level of economic development is indicated not just by GDP, but by an increase in citizen’s quality of life or well-being.
2. The quality of life is being assessed by several indices such as Human Development Index [HDI]
3. On the basis of the level of economic development, nations are classified as developed and developing economies.
4. Developed economies are those countries which are industrialized.
5. Developed economics are also termed as Advanced Countries.
6. On the other hand, countries that have not fully utilized their resources like land, mines, workers, etc., and have low per capita income are termed as underdeveloped economics.

Question 29.
State Ambedkar’s Economic ideas on agricultural economics?
Answer:
Dr. B.R.Ambedkar was a versatile personality. In 1918, he published a paper “Smallholding in India and their remedies” citing Adam Smith’s “Wealth of Nations”, he made a fine distinction between “Consolidation of holdings” and “Enlargement of holdings”.

Question 30.
Write a short note on Village Sarvodhaya?
Answer:

1. According to Gandhi, “Real India was to be found in the village and not in towns or cities”.
2. So he suggested the development of self-sufficient self-dependent villages.

Question 31.
Write the strategy of Jawaharlal Nehru in India’s planning?
Answer:

1. Jawahar lal Nehru was responsible for the introduction of planning in our country.
2. To Nehru, the plan was essentially an integrated approach for development.
3. He said the essence of planning is to find the best way to utilize all resources of manpower, money and so on.
4. Planning for Nehru was essentially linked up with industrialization and eventual self-reliance for the country’s economic growth on a self-accelerating growth.
5. Nehru carried through this basic strategy of planned development.

Question 32.
Write the VKRV Rao’s contribution on the multiplier concept?
Answer:

1. VKRV Rao’s examination of the “Interrelation between investment, income and multiplier is an underdeveloped economy” [1952] was his major contribution to macroeconomic theory.
2. Asa thinker, teacher, economic adviser, and direct policymaker, VKRV Rao followed the footstep of his great teacher, John Maynard Keynes.

Question 33.
Write a short note on Welfare Economics given by Amartya Sen?
Answer:

1. Amartya Sen was awarded the Nobel prize for his contributions to welfare economics.
2. Sen’s major point has been that the distribution of income/consumption among the persons below the poverty line is to be taken into account.
3. Sen has focused on the poor, viewing them not as objects of pity requiring charitable hand-outs, but as disempowered folk needing empowerment in all aspects.

Question 34.
Explain social infrastructure?
Answer:

1. Social infrastructure refers to those structures which are improving the quality of manpower and contribute indirectly towards the growth of an economy.
2. These structures are outside the system of production and distribution.
3. The development of these social structures help in increasing the efficiency and productivity of manpower.
4. For example, schools, colleges, hospitals and other civic amenities.
5. It is a fact that one of the reasons for the low productivity of Indian workers is the lack of development of social infrastructure.

Education in India:

1. The Indian education system has flourished and developed with the growing needs of the economy.

Health in India:

1. Health in India is a state government responsibility.
2. The Central Council of Health and Welfare formulates the various health care projects and health department reform policies.

PART – D

Answer the following questions in about a page.

Question 35.
Explain the strong features of the Indian economy?
Answer:

1. India has a mixed economy: In India, both private and public sectors coexist.
2. Agriculture plays the key role: Around 60% of the people in India depend upon agriculture for their livelihood.
3. An emerging market: India has a high potential for prospective growth which attracts FDI and FII.
4. Emerging economy: As a result of rapid economic growth Indian economy has a place among the G20 countries.
5. Fast-growing economy: India has emerged as the world’s fastest-growing economy in 2016-17 with 7.1% GDP next to China.
6. Fast-growing service sector: The service sector, contributes a lion’s share of the GDP in India.
7. Large domestic consumption: Due to large domestic consumption the standard of living has considerably improved and lifestyle has changed.
8. paid growth of urban areas: Improved connectivity in transport and communication, education, and health have speeded up the pace of urbanization.
9. Stable macroeconomy: The current year’s economic survey represents the Indian economy to be a heaven of macroeconomic stability, resilence and optimism.
10. Demographic dividend: India is a proud owner of the maximum percentage of youth. This has invited foreign investments to the country and outsourcing opportunities.

Question 36.
Write the importance of mineral resources in India?
Answer:
Important Mineral Resources:
1. Iron -ore:

• India possesses high-quality iron-ore in abundance.
• The total reserves of iron ore in the country are about 14.630 million tonnes of hematite and 10,619 million tonnes of magnetite.
• Hematite iron is mainly found is Chattisgarh, Jharkhand, Odisha, Goa, and Karnataka.
• Some deposits of iron ore are also found in Kerala, Tamilnadu, and Andra Pradesh.

2. Coal and Lignite:

• Coal is the largest available mineral resource.
• India ranks third in the world after China and the USA in coal production.
• The main centers of coal in India are West Bengal, Bihar, Madhya Pradesh, Maharashtra, Odisha, and Andhra Pradesh.
• The bulk of the coal production comes from Bengal-Jharkhand coalfields.

3. Bauxite:

• Bauxite is a main source of metal like aluminium.
• Major reserves are concentrated in the East Coast bauxite deposits of Odisha and Andhra Pradesh.

4. Mica:

• Mica is a heat-resisting mineral which is also a bad conductor of electricity.
• It is used in electrical equipment as an insulator.
• India stands first in sheet mica production and contributes 60% of mica trade in the world.
• The important mica bearing pegmatite is found in Andhra Pradesh, Jharkhand, Bihar and Rajasthan.

5. Crude Oil:

• Oil is being explored in India at many places of Assam and Gujarat.
• Digboi, Badarpur, Naharkatia, Kasimpur, Palliaria, Rudrapur, Shivsagar, Mourn [All in Assam], and Hay of Khambhat, Ankleshwar and Kalor [All in Gujarat] are the important places of oil exploration in India.

6. Gold:

• India possesses only a limited gold reserve.
• There are only three main gold mine regions-Kolar Goldfield, Kolar district and Hutti Goldfield in Raichur district [both in Karnataka] and Ramgiri Goldfield in Anantpur district [Andhra Pradesh].

7. Diamond:

• The total reserves of a diamond is estimated at around 4582, thousand carats which are mostly available in Panna [Madhya Pradesh], Rammallakota of Kumar district of Andhra
  Pradesh and also in the Basin of Krishna River.
• The new Kimberlile fields have been discovered in Raipur and Bastar districts of Chhattisgarh, Nuapada and Bargarh districts of Odisha, Narayanpet-Maddur Krishna areas of Andhra Pradesh, and Raichur-Gulbarga districts of Karnataka.

Question 37.
Bring out Jawaharlal Nehru’s contribution to the idea of economic development?
Answer:
Jawahar Lal Nehru was one of the Chief builders of modem India. He was a great patriot, thinker and statesman. His ideas of economic development are :

1. Democracy : He was a firm believer in democracy. He believed in free speech, civil liberty, adult franchise and the rule of law and parliamentary democracy.

2. Secularism : Secularism is another signal contribution of Nehru to India. There are so many religions in India but there is no domination by religious majority.

3. Planning : Nehru was responsible for the introduction of planning in our country. The plan was essentially an integrated approach for development. Planning for Nehru was essentially linked up with industrialization and eventual self-reliance for the country’s economic growth on a self-accelerating growth.

4. Advancement of Science : Nehru made a great contribution to the advancement of Science, research, technology and industrial development. In his period, many IITs and research institutions were established. He always insisted on scientific temper.

5. Democratic socialism : Nehru put the country on the road towards a socialistic pattern of society. Nehru’s socialism is democratic socialism.

Question 38.
Write a brief note on the Gandhian economic ideas?
Answer:
Gandhian Economics is based on ethical foundations. Gandhi wrote, “Economics that hurts the moral well-being of an individual or a nation is immoral, and therefore, Sinful”. Again in 1924, Gandhi repeated the same belief “ that economy is untrue which ignores or disregards moral values”.

Salient features of Gandhian Economic Thought:
1. Village Republics:

• India lives in villages.
• He was interested in developing the villages as self-sufficient units.
• He opposed the extensive use of machinery, urbanization, and industrialization.

2. On Machinery:

• Gandhi described machinery as ‘Great sin’. He said that “Books could be written to demonstrate its evils”.
• It is necessary to realize that machinery is bad.
• Instead of welcoming machinery as a boon, we should look upon it as evil.
• It would ultimately cease.

3. Industrialism:

• Gandhi considered industrialism as a curse on mankind.
• He thought industrialism depended entirely on a country’s capacity to exploit.

4. Decentralization :

• Gandhi advocated a decentralized economy i. e., production at a large number of places on a small scale or production in the people’s homes.

5. Village Sarvodaya:

• According to Gandhi, “ Real India was to be found in villages and not in towns or cities”.
• So, he suggested the development of self-sufficient, self-dependent villages.

6. Bread Labour:

• Gandhi realized the dignity of human labour.
• He believed that God created man to eat his bread by the sweat of his brow.
• Bread labour or body labour was the expression that Gandhi used to mean manual labour.

7. The Doctrine of Trusteeship:

• Trusteeship provides a means of transforming the present capitalist order of society into an egalitarian one.

8. On the Food Problem:

• Gandhi was against any sort of food controls.
• Once India was begging for food grain, but now India tops the world with very large production of food grains, fruits, vegetables, milk, egg, meat etc.

9. On Population:

• Gandhi opposed the method of population control through contraceptives.
• He was, however, in favour of birth control through Brahmacharya or self-control.
• He considered self-control as a sovereign remedy to the problem of over-population.

10. On Prohibition:

• Gandhi advocated cent percent prohibition.
• Gandhi regarded the use of liquor as a disease rather than a vice.
• He felt that it was better for India to be poor than to have thousands of drunkards.
• Many states depend on revenue from liquor sales.

Samacheer Kalvi 11th Economics Indian Economy Additional Important Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
The basic factors determining population growth are ………………………..
(a) Birth rate
(b) Death rate
(c) Migration
(d) All the above
Answer:
(d) All the above

Question 2.
……………………… is a crude indicator for living standard.
(a) Gross National Product [GNP]
(b) Gross Domestic Product [GDP]
(c) Net National Product [NNP]
(d) Per Capita Income [PCI]
Answer:
(a) Gross National Product [GNP]

Question 3.
India followed the ……………………… plan.
(a) Short term
(b) Long term
(c) Midterm
(d) Perspective
Answer:
(c) Midterm

Question 4.
…………………….. is the basic causes of poverty.
(a) Low agriculture productivity
(b) Rapid growth of population
(c) Low saving and disguised unemployment
(d) All the above
Answer:
(d) All the above

Question 5.
In recent time India followed the ……………………… planning.
(a) Five year
(b) Indicative
(c) Modified
(d) Innovative
Answer:
(b) Indicative

Question 6.
……………………………. was responsible for the introduction of planning in our Country.
(a) Ambedkar
(b) Jawaharlal Nehru
(c) Radhakrishnan
(d) VKRV Rao.
Answer:
(b) Jawaharlal Nehru

Question 7.
………………………. is the largest available mineral resource.
(a) Coal
(b) Iron-ore
(c) Bauxite
(d) Mica
Answer:
(a) Coal

Question 8.
The National Harbour board was set up in ………………………
(a) 1947
(b) 1948
(c) 1949
(d) 1950
Answer:
(d) 1950

Question 9.
India stands first in sheet mica production and contributes ……………………. % of mica trade in the world.
(a) 50%
(b) 60%
(c) 70%
(d) 80%
Answer:
(b) 60%

Question 10.
……………………… is thereby also called as the backbone of the Indian economy.
(a) Agricultural
(b) Industrial
(c) Small Scale Industries
(d) Cottage industries
Answer:
(a) Agricultural

PART – B

Answer the following questions in one or two sentences.

Question 1.
List out the education system in India?
Answer:
The education system in India consists of primarily six levels:

1. Nursery class
2. Primary class
3. Secondary level
4. Higher secondary level
5. Graduation
6. Post-graduation

Question 2.
Define “Renewable Resources’?
Answer:
Renewable energy sources
These are the kind of energy source which can be renewed or reused again and again. These kinds of materials do not exhaust or literally speaking these are available in abundant or infinite quantity. Example for this kind include

1. Solar energy
2. Wind energy
3. Tidal energy
4. Geothermal energy
5. Biomass energy

Question 3.
Write a short note on Infrastructure development?
Answer:
Infrastructural development means the development of many support facilities. These facilities may be divided into (z) economic infrastructure and (ii) social infrastructure. Economic infrastructure includes – transport, communication, energy, irrigation, monetary and financial institutions. Social infrastructure includes – education, training and research, health, housing and civic amenities.

PART – C

Answer the following questions in one paragraph.

Question 1.
Explain the education in India?
Answer:
Education in India:

1. Imparting education on an organized basis dates back to the days of ‘Gurukul’ in India.
2. The Indian education system has flourished and developed with the growing needs of the economy.
3. The Ministry & Human Resource Development (MHRD) in India formulates education policy in India and also undertakes education programs.

The education system in India:

1. Education in India until 1976 was the responsibility of the State governments.
2. It was then brought under concurrent list [both Centre and State]
3. The Centre is represented by the Ministry of Human Resource Development decides India’s education budget.
4. The education system in India consists of primarily six levels:
   • Nursery class
   • Primary class
   • Secondary level
   • Higher secondary level
   • Graduation
   • Post-graduation

Education Institutions in India:

1. Education in India follows the 10, +2 pattern.
2. The accreditation of the universities is decided under the University Grant Commission Act.
3. The Education Department consists of various schools, colleges, and universities imparting education on fair means for all sections of the society.

Question 2.
List out the density of the population?
Answer:
The density of population:
The density of population refers to the average number of persons residing per square kilometer. It represents the man-land ratio. As the total land area remains the same, an increase in population causes the density of the population to rise.
The density of population =

• Just before Independence, the density of the population was less than 100.
• After Independence, it has increased rapidly from 117 in 1951 to 325 in 2001.
• According to the 2011 census, the present Density of the population is 382.
• The pressure of population on land has been rising.
• Kerala, West Bengal, Bihar, and Uttar Pradesh have density higher than India’s average density.
• Bihar is the most densely populated state.
• Arunachal Pradesh has a low density of population of only 17 persons. Indian Economy 125

Question 3.
Explain “Transport”?
Answer:
Transport:

1. For the sustained economic growth of a country, a well-connected and efficient transport system is needed.
2. India has a good network of rail, road coastal shipping, and air transport.
3. The total length of roads in India being over 30 lakh km.
4. India has one of the largest road networks in the world.
5. In terms of railroads, India has a broad network of railroad lines, the largest in Asia and the fourth largest in the world.
6. The total rail route length is about 63,000 km and of this 13,000 km is electrified.
7. The major Indian ports including Calcutta, Mumbai, Chennai, Vishakhapatnam and Goa handle about 90% of sea-borne trade and are visited by cargo carriers and passenger liners from all parts of the world.
8. A comprehensive network of air routes connects the major cities and towns of the country.
9. The domestic air services are being looked after by Indian Airlines and private airlines.
10. The international airport service is looked after by Air India.

PART – D

Answer the following questions in about a page.

Question 1.
Explain the weakness of the Indian Economy?
Answer:
1. Large Population:

• India stands second in terms of size of the population next to China and our country is likely to overtake China in near future.
• The population growth rate of India is very high and this is always a hurdle to the growth rate.

2. Inequality and poverty:

• There exists a huge economic disparity in the Indian economy.
• The proportion of income and assets owned by top 10% of Indians goes on increasing.
• Increase in the poverty level in society and still a higher percentage of individuals are living Below Poverty Line [BPL].
• Asa result of unequal distribution of the rich becomes richer and poor becomes poorer.

3. Increasing Prices of Essential Goods:

• Even though there has been a constant growth in the GDP and growth opportunities in the Indian economy, there have been steady increase in the prices of essential goods.
• The continuous rise in prices erodes the purchasing power and adversely affects the poor people, whose income is not protected.

4. Weak Infrastructure:

• A gradual improvement in the infrastructural development.
• There is still a scarcity of the basic infrastructure like power, transport, storage etc.

5. Inadequate Employment generation:

• Growing youth population, there is a huge need of employment opportunities.
• The growth in production is not accompanied by creation of job.
• The Indian economy is characterized by “ Jobless growth”.

6. Outdated technology:

• The level of technology in agriculture and small scale Industries is still outdated and obsolete.

Question 2.
Explain the VKRV Rao’s National Income Methodology and Industrialization?
Answer:
1. Rao’s National Income Methodology:

• Rao’s name is remembered for his pioneering work on the enumeration of national income of India.
• He attempted
• To develop the national income concepts suited to India and developing countries.
• To analyze the concepts of investment, saving and multipliers is an underdeveloped economy.
• To study the compatibility of the national incomes of Industrialized and underdeveloped countries.
• Rao’s paper on “Full Employment and Economic Development” was one of the earliest contributions in the field of development towards employment.

2. Rao’s views on Industrialization:

• Rao gave the following reasons for low per Capita income and low levels of per capita nutrition in India.
• Uneconomic holdings with sub-divisions and fragmentation.
• Low levels of water availability for crops.
• Excess population pressure on agriculture due to the absence of a large industrial sector.
• Absence of capital.
• Absence of autonomy in currency policy, and in general in monetary matters encouraging holding of gold.

Students can download 11th Economics Chapter 6 Distribution Analysis Questions and Answers, Notes, Samcheer Kalvi 11th Economics Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

Tamilnadu Samacheer Kalvi 11th Economics Solutions Chapter 6 Distribution Analysis

Samacheer Kalvi 11th Economics Distribution Analysis Text Book Back Questions and Answers

PART – A

Multiple Choice Questions:

Question 1.
In Economics, distribution of income is among the ……………………….
(a) Factors of production
(b) Individual
(c) Firms
(d) Traders
Answer:
(a) Factors of production

Question 2.
Theory of distribution is popularly known as
(a) Theory of product-pricing
(b) Theory of factor-pricing
(c) Theory of wages
(d) Theory of Interest
Answer:
(b) Theory of factor-pricing

Question 3.
Rent is the reward for the use of ………………………..
(a) Capital
(b) Labour
(c) Land
(d) Organization
Answer:
(c) Land

Question 4.
The concept of ‘Quasi-Rent’ is associated with
(a) Ricardo
(b) Keynes
(c) Walker
(d) Marshall
Answer:
(d) Marshall

Question 5.
The Classical Theory or Rent was propounded by ………………………..
(a) Ricardo
(b) Keynes
(c) Marshall
(d) Walker
Answer:
(a) Ricardo

Question 6.
‘Original and indestructible powers of the soil’ is the term used by
(a) J.S.Mill
(b) Walker
(c) Clark
(d) Ricardo
Answer:
(d) Ricardo

Question 7.
The reward for labour is ………………………
(a) Rent
(b) Wage
(c) Profit
(d) Interest
Answer:
(b) Wage

Question 8.
Money wages are also known as
(a) real wages
(b) nominal wages
(c) original wages
(d) transfer wages
Answer:
(b) nominal wages

Question 9.
Residual Claimant Theory is propounded by ………………………..
(a) Keynes
(b) Walker
(c) Hawley
(d) Knight
Answer:
(b) Walker

Question 10.
The reward given for the use of capital
(a) rent
(b) wage
(c) interest
(d) profit
Answer:
(c) interest

Question 11.
Keynesian Theory of interest is popularly known as ………………………
(a) Abstinence Theory
(b) Liquidity Preference Theory
(c) Loanable Funds Theory
(d) Agio Theory
Answer:
(b) Liquidity Preference Theory

Question 12.
According to the Loanable Funds Theory, supply of loanable funds is equal to
(a) S + BC + DH + DI
(b) I + DS + DH + BM
(c) S + DS + BM + DI
(d) S + BM + DH + DS
Answer:
(a) S + BC + DH + DI

Question 13.
The concept of meeting unexpected expenditure according to Keynes is …………………………
(a) Transaction motive
(b) Precautionary motive
(c) Speculative motive
(d) Personal motive
Answer:
(b) Precautionary motive

Question 14.
The distribution of income or wealth of a country among the individuals are
(a) functional distribution
(b) personal distribution
(c) goods distribution
(d) services distribution
Answer:
(b) personal distribution

Question 15.
Profit is the reward for ………………………..
(a) Land
(b) Organization
(c) Capital
(d) Labour
Answer:
(b) Organization

Question 16.
Innovation Theory of profit was given by
(a) Hawley
(b) Schumpeter
(c) Keynes
(d) Knight
Answer:
(b) Schumpeter

Question 17.
Quasi – rent arises in ………………………..
(a) Man-made appliances
(b) Homemade items
(c) Imported items
(d) None of these
Answer:
(a) Man-made appliances

Question 18.
“Wages as a sum of money are paid under contract by an employer to a worker for services rendered” -Who said this?
(a) Benham
(b) Marshall
(c) Walker
(d) J.S.Mill
Answer:
(a) Benham

Question 19.
Abstinence Theory of Interest was propounded by …………………………
(a) Alfred Marshall
(b) N.W Senior
(c) Bohm – Bawerk
(d) Knut Wicksell
Answer:
(b) N.W Senior

Question 20.
Loanable Funds Theory of Interest is called as
(a) Classical Theory
(b) Modem Theory
(c) Traditional Theory
(d) Neo-Classical Theory
Answer:
(d) Neo-Classical Theory

Part – B

Answer the following questions in one or two sentences.

Question 21.
What is meant by distribution?
Answer:
Distribution means division of income among the four factors of production as rent, wage, interest and profit.

Question 22.
Mention the types of distribution.
Answer:

1. Personal Distribution
2. Functional Distribution

Question 23.
Define ‘Rent’?
Answer:
Rent is that part of payment made by a tenant to his landlords for the use of land only.

Question 24.
Distinguish between real and money wages?
Answer:

Question 25.
What do you mean by interest?
Answer:

1. Interest is the reward paid by the borrower to the lender for the use of capital.
2. Interest is the price paid for the use of capital in any market.
3. Generally speaking, interest is a payment made by a borrower to the lender for the money borrowed.

Question 26.
What is profit?
Answer:

1. The entrepreneur coordinates all the other three factors (land, labour and capital) of production.
2. Entrepreneur is rewarded for his services in the form of profit.
3. Profit is a return to the entrepreneur for the use of his entrepreneurial ability.
4. It is the net income of the organizer.
5. Profit is the amount left with the entrepreneur after he has payments made for all the other factors (land, labour and capital) used by him in the production process.

Question 27.
State the meaning of liquidity preference.
Answer:
Liquidity preference is the preference to have an amount of cash rather than of claims against others.

PART – C

Answer the following questions in a paragraph.

Question 28.
What are the motives of demand for money?
Answer:
Motives of Demand for Money:
According to Keynes, there are three motives for liquidity preference. They are:

1. The Transaction Motive:

• The transaction motive relates to the desire of the people to hold cash for the current transactions.
• The amount saved under this motive depends on the level of income.
• M_t = f(y)

2. The Precautionary Motive:

• The precautionary motive relates to the desire of the people to hold cash to meet unexpected or unforeseen expenditures such as sickness, accidents, fire and theft. The amount saved for this motive also depends on the level of income.
  M_p = f(y)

3. The Speculative Motive:
The speculative motive relates to the desire of the people to hold cash in order to take advantage of market movements regarding the future changes in the price of bonds and securities in the capital market. The amount saved for this motive depends on the rate of interest.
M_S = f(i). There is inverse relation between liquidity preference and rate of interest.

Question 29.
List the kinds of wages.
Answer:
1. Nominal wages or money wages :
Nominal wages are referred to as the wages paid in terms of money.

2. Real wages :
Real wages are the wages paid in terms of goods and services. Hence, real wages are the purchasing power of money wages.

3. Piece wages :
Wages that are paid on the basis of quantum of work done.

4. Time wages :
Wages are paid on the basis of the amount of time that the worker works.

Question 30.
Distinguish between rent and quasi – rent?
Answer:

Question 31.
Briefly explain the Subsistence Theory of Wages.
Answer:

• Subsistence theory was first explained by physiocrats and restated by Ricardo.
• According to this theory, wage must be equal to the subsistence level of the labourer and his family.
• If workers are paid higher wages they would be better off and will have large families. Hence, the population would increase, which results in increased supply of labourer and so wages will come down.
• If wages are lower, there would be a reduction in population and thereby the supply of labour falls and wages increase to the subsistence level.
• This theory holds that the wages of workers would not be above or below the subsistence level of the labourer and his family.

Question 32.
State the Dynamic Theory of Profit?
Answer:
Dynamic Theory of Profit:

• J.B. Clark propounded this theory in 1900. To him, profit is the difference between price and cost of production of the commodity.
• Profit is the reward for dynamic changes in society. He points out that, profit cannot arise in a static society. In static society, everything remains stationary.
• The following changes take place in a dynamic society.
  1. The population is increasing.
  2. The volume of capital is increasing.
  3. Methods of production are improving.
  4. Forms of the industrial organization are changing.
  5. The wants of consumers are multiplying.

Question 33.
Describe briefly the Innovation Theory of Profit.
Answer:

• Innovation theory was propounded by Joseph. A. Schumpeter.
• Profit is the reward for “Innovation”. Innovation means invention put into commercial practice.
• An innovation may consist of:
  1. Introduction of a new product.
  2. Introduction of a new method of production.
  3. Opening up of a new market.
  4. Discovery of new raw materials.
  5. Reorganization of an industry/firm.
  6. Anyone of these innovations leads to a reduction in the cost of production and thereby brings profit to an entrepreneur.

Question 34.
Write a note on the Risk-bearing Theory of Profit?
Answer:

• Risk – the bearing theory was propounded by F.B.Hawley in 1907.
• Profit is the reward for “risk-taking” in business.
• Every business involves some risks. So risk-taking is an essential function of the entrepreneur and is the basis of profit.
• Higher the risks, the greater are the profit.
• Profit induces entrepreneurs to undertake risks.

PART – D

Answer the following questions on one page.

Question 35.
Explain the Marginal Productivity Theory of Distribution?
Answer:
Introduction:

1. This theory was developed by Clark, Wicksteed and Walras. The Marginal productivity theory of distribution explains how the prices of various factors of production are determined.
2. This theory explains how rent, wages, interest and profit are determined.
3. This theory is also known as the “General Theory of Distribution ” or “ National Dividend Theory of Distribution”.

Assumptions:

1. All the factors of production are homogenous.
2. Factors of production can be substituted for each other.
3. There is perfect competition both in the factor market and product market.
4. There is perfect mobility of factors of production.
5. There is full employment of factors.
6. This theory is applicable only in the long-run.
7. The entrepreneurs aim at profit maximization.
8. There is no government intervention in fixing the price of a factor.
9. There is no technological change.

Explanation of the Theory:
According to the Marginal Productivity Theory of Distribution, the.price or the reward for any factor of production is equal to the marginal productivity of that factor. Each factor is rewarded according to its marginal productivity.

Marginal Product:
The Marginal Product is also known as “ Marginal Physical Product “ [MPP]. The Marginal Product of a factor of production means the addition made to the total product by the employment of an additional unit of that factor. The Marginal Product may be expressed as MPP, VMP, and MRP.

1. Marginal Physical product [MPP]: The Marginal Physical Product of a factor is the increment in the total product obtained by the employment of an additional unit of that factor.

2. Value of a marginal product [VMP]: The Value of Marginal Product is obtained by multiplying the marginal physical product of the factor by the price of the product. Symbolically VMP = MPP × Price

3. Marginal Revenue product [MRP]: The Marginal Revenue Product of a factor is the increment in the total revenue which is obtained by the employment of an additional unit of that factor.
MRP = MPP × MR

The Marginal Productivity Theory of Distribution states that

1. The price of a factor of production depends upon its productivity.
2. The price of a factor is determined by and will be equal to the marginal revenue product of that factor.
3. Under certain conditions, the price of a factor will be equal to both the average and marginal products of that factor.

Question 36.
Illustrate the Ricardian Theory of Rent?
Answer:

1. The Classical Theory of Rent is called the “Ricardian Theory of Rent.”
2. “ Rent is that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil” – David Ricardo

Assumptions:
Ricardian theory of rent assumes the following:

1. Land differs in fertility.
2. The law of diminishing returns operates in agriculture.
3. Rent depends upon fertility and location of the land.
4. The theory assumes perfect competition.
5. It is based on the assumption of a long period.
6. There is the existence of marginal land or no-rent land.
7. The land has certain “Original and indestructible powers”.
8. The land is used for cultivation only.
9. Most fertile lands are cultivated first.

Statement of the Theory with Illustration:
There are three grades of land, namely A, B, and C on that island. ‘A’ being most fertile ‘B’ less fertile and ‘C’ the least fertile. They will first cultivate all the most fertile land. The yield per acre on ‘A’ grade land is 40 bags of paddy.

The same amount labour and capital employed in ‘A’ grade land. The yield per acre on ‘B’ grade land is 30 bags of paddy.
The Surplus of 10 bags [40-30] per acre appears on ‘A’ grade land. This is “ Economic Rent” land of ‘A’ grade land.

The yield per acre on ‘C’ grade land is 20 bags of paddy. This surplus of ‘A’ grade land is now raised to 20 bags [40-20] and it is the “ Economic Rent” of ‘A’ grade land.

The ‘C’ grade land, cost of production is just equal to the price of its products and therefore does not yield any rent [20-20], Hence, ‘C’ grade land is called ‘no-rent land or marginal land ’. The land which yields rent is called “intra-marginal land”.

Diagrammatic Explanation:

1. In the diagram, X-axis represents various grades of land, and Y-axis represents yield per acre [in bags],
2. OA, AB, and BC are the ‘A’ grade ‘B’ grade and ‘C’ grade lands respectively.
3. The ‘C’ grade land is the no rent land.”
4. ‘A’ land ‘B’ grade lands are “intra – marginal lands”.
5. The economic rent yielded by ‘A’ and ‘B’ grade lands is equal to the shaded area of their respective rectangles.

Question 37.
Elucidate the Loanable Funds Theory of Interest?
Answer:

1. The loanable fund’s theory, also known as the “Neoclassical theory”. This theory was developed by Swedish economists like Wicksell, Bertilohlin, Viner, Gunnar Myrdal, and others.
2. Interest is the price paid for the use of loanable funds.
3. The rate of interest is determined by the equilibrium between the demand for and supply of loanable funds in the credit market.

Demand for loanable funds :

1. Demand for Investment (I)
2. Demand for Consumption (C)
3. Demand for Hoarding (H)

Supply of loanable funds :
1. Savings (S) :
Savings may be of two types, namely.

1. Savings planned by individuals are “ex-ante savings”. (Eg.) LIC premium
2. Unplanned savings are called “ex-post savings”

2. Bank credit:
Commercial banks create credit and supply loanable funds to the investors.

3. Dishoarding (DH) :
Dishoarding means bringing out the hoarded money into use and thus it constitutes a source of supply of loanable funds.

4. Disinvestment (DI):
Disinvestment is the opposite of investment. It means not providing sufficient funds for the depreciation of equipment.

Explanation:
The X-axis represents the demand for and supply of loanable funds, Y-axis represents the rate of interest. The LS curve represents the total supply curve of loanable funds. The LD curve represents the total demand for loanable funds. The LD and LS curves, intersect each other at the point “E” the equilibrium point. At this point OR rate of interest and OM is the number of loanable funds.

Criticisms :

1. Many factors have been included in this theory’. Still, there are many more factors like
   • Asymmetric information
   • Moral Hazard.
2. It is very difficult to combine real factors with monetary factors.

Question 38.
Explain the Keynesian Theory of Interest?
Answer:
Keynes’ Liquidity Preference Theory of Interest or The monetary Theory of Interest

1. Keynes propounded the Liquidity Preference Theory of Interest in his famous book,
   “ The General Theory of Employment, Interest, and Money “ in 1936.
2. According to Keynes, interest is purely a monetary phenomenon because the rate of interest is calculated in terms of money.
3. “Interest is the reward for parting with liquidity for a specified period of time”.

Meaning of Liquidity Preference:

1. Liquidity preference means the preference of the people to hold wealth in the form of liquid cash rather than in other non-liquid assets like bonds, securities, bills of exchange, land, building, gold etc.
2. “Liquidity Preference is the preference to have an amount of cash rather than of claims against others”. – Meyer.

Motives of Demand for Money:
According to Keynes, there are three motives for liquidity preferences. They are:

1. The Transaction Motive:
The transaction motive relates to the desire of the people to hold cash for the current transactions [or-day-to-day expenses] M = f(y)

2. The Precautionary Motive:

• The precautionary motive relates to the desire of the people to hold cash to meet unexpected or unforeseen expenditures such as sickness, accidents, fire, and theft.
• The amount saved for this motive also depends on the level of Income Mp = f(y).

3. The Speculative Motive:

• The speculative motive relates to the desire of the people to hold cash in order to take advantage of market movements regarding the future changes in the price of bonds and securities in the capital market. M = f(i)
• There is an inverse relation between liquidity preference and rate of interest.

Samacheer Kalvi 11th Economics Distribution Analysis Additional Important Questions and Answers

Part – A

Multiple Choice Questions:

Question 1.
The theory of factor prices is popularly known as the theory of _______
(a) Distribution
(b) Exchange
(c) Wages
(d) Profit
Answer:
(a) Distribution

Question 2.
Net profit is otherwise called ………………………
(a) Profit
(b) Risk profit
(c) Dynamic profit
(d) Pure profit
Answer:
(d) Pure profit

Question 3.
F.A. Walker wrote a book _______ in 1875.
(a) Political economy
(b) Social economy
(c) Principles of economics
(d) Wealth of nations
Answer:
(a) Political economy

Question 4.
Which is the gift of nature?
(a) Land
(b) Interest
(c) Profit
(d) Capital
Answer:
(a) Land

Question 5.
Keynes liquidity preference theory is also called as_______
(a) Classical theory of interest
(b) Psychological theory of interest
(c) The monetary theory of interest
(d) Abstinence theory of interest
Answer:
(c) The monetary theory of interest

Question 6.
Which one is considered a homogeneous factor?
(a) Labour
(b) Land
(c) Capital
(d) All the above
Answer:
(d) All the above

Question 7.
Risk bearing theory of profit was propounded by _______
(a) J.B. Clark
(b) J.M. Keynes
(c) F.B. Hawley
(d) H.Knight
Answer:
(c) F.B. Hawley

Question 8.
What is the payment for the service of labour?
(a) Wages
(b) Income
(c) Salary
(d) Profit
Answer:
(a) Wages

Question 9.
_______ is the produced means of production.
(a) Land
(b) Labour
(c) Capital
(d) Organisation
Answer:
(c) Capital

Question 10.
Organization is done by the ………………………
(a) Private sector
(b) Public sector
(c) Service sector
(d) Entrepreneur
Answer:
(d) Entrepreneur

PART – B

Answer the following questions in one or two sentences.

Question 1.
Define Marginal product?
Answer:

1. The marginal product of a factor of production means the addition made to the total product by the employment of an additional unit of that factor.
2. The Marginal Product may be expressed as MPP, VMP, and MRP.

Question 2.
What are the other names of the marginal productivity theory of distribution?
Answer:

1. The general theory of distribution
2. National dividend theory of distribution

Question 3.
What do you mean by the Marginal Productivity theory of distribution?
Answer:

1. Marginal Productivity Theory of Distribution was developed by Clark, Wicksteed, and Walras.
2. This theory explains how the prices of various factors of production are determined.
3. This theory explains how rent, wages, interest, and profit are determined.
4. This theory is also known as the “General Theory of Distribution” or “National Dividend Theory of Distribution”.

PART – C

Answer the following questions in a paragraph.

Question 1.
List out the Concepts of Profit?
Answer:
Concepts of Profit:

1. Gross Profit:
Gross Profit is the surplus that accrues to a firm when it subtracts its Total expenditure from its Total Revenue.
Gross Profit = Total Revenue – Total cost

2. Net profit or Pure Profit or Economic Profit or True Profit:
Net or pure or economic or true profit is the residual left with the entrepreneur after deducting from Gross profit The remuneration for the self-owned factors of production which are called implicit cost.
Net Profit = Gross Profit – implicit costs.

3. Normal Profit:
It refers to the minimum expected to return to stay in business

4. SuperNormal Profit:
Supernormal profits are over and above the normal profit.
SuperNormal Profit = Actual profit – Normal profit

Question 2.
Describe briefly the equilibrium between Demand and Supply of Money?
Answer:
1. The equilibrium between liquidity preference and demand for money determines the rate of interest.
2. In the short – run, the supply of money is assumed to be constant.

3. LP is the liquidity preference curve [demand curve.]

4. M₂M₂ shows the supply curve of money to satisfy speculative motives. Both curves intersect at point E, which is the equilibrium point. Hence, the rate of interest is 2.5. If liquidity preference increases from LP to L₁P₁ the supply of money remains constant, the rate of interest would increase from OI to OI_1.

5. Suppose LP remains constant. If the supply of money is OM₂, the interest is OI₂ and if the supply of money is reduced from OM₂ to OM₄, the interest would increase from OI₂ to OI₃. If the supply of money is increased from OM₂ to OM₄, the interest could decrease from OI₂ to OI₄.

Question 3.
Define the kinds of interest.
Answer:
Gross interest:
Gross interest is the total interest amount received by creditors from debtors.
Gross interest = Net interest + reward for inconvenience + insurance against the risk of non-repayment + payment for service of debt management.

Net interest:
Net interest is only a part of the gross interest. It is the payment for use of capital only. (Eg.) Interest payable for government securities.

PART – D

Answer the following questions on one page.

Question 1.
Explain the classical theory of Interest?
Answer:
The classical theory of Interest:

1. The equilibrium interest rate, according to classical theory, is determined by the intersection of demand and supply curves, Demand for money refers to investment.
2. The supply of money is referred to as savings. S = I.

Equilibrium:

1. The rate of interest is determined by the equilibrium between the total demand for and the total supply of loanable funds.
2. Supply of and Demand for Loanable funds:
3. Supply of loanable funds = Savings + Bank Credit + Dishoarding + Disinvestment = S + BC + DH + DI
4. Demand for loanable funds = Investment + consumption + Hoarding = I + C + H

• In Diagram X-axis represents the demand for and supply of loanable funds and the Y-axis represents the rate of interest.
• The LS curve represents the total supply curve of loanable funds.
• The summation of the Saving Curve [S], Bank credit curve [BC], Dishoarding curve [DH], and Disinvestment curve [DI],
• The LD curve represents the total demand for loanable funds.
• This is obtained by the summation of the demand for investment curve I, the demand curve for consumption demand or dissaving curve, and the curve for the demand for hoarding curve H.
• The LD and LS curves, intersect each other at the point “E” the equilibrium point.
• At this point, the OR rate of interest and OM is the number of loanable funds.

Question 2.
Illustrate the uncertainty Bearing Theory of profit?
Answer:
Uncertainty theory was propounded by the American economist Frank H.Knight. Profit is the reward for “ uncertainty bearing”. He distinguishes between “insurable” and “non-insurable” risks.

Insurable Risks:

1. Certain risks are measurable or calculable.
2. Some of the examples of these risks are the risk of fire, theft, and natural disasters.
3. Such risks are compensated by the Insurance companies.

Non-Insurable Risks:

1. There are some risks which are immeasurable or incalculable.
2. Examples of these risks are competition,, market condition, technology change, and public policy.
3. No Insurance Company can undertake these risks.
4. The term “risks” covers the first type of events (measurables-insurable)
5. The term “uncertainty” covers the second type of events (unforeseeable or incalculable or not measurable or non-insurable).
6. According to Knight, profit does not arise on account of risk-taking, because the entrepreneur can guard himself against risk by taking a suitable insurance policy.
7. Uncertain events cannot be guarded against in that way.
8. An entrepreneur takes himself the burden of facing an uncertain event, he secures remuneration.
9. That remuneration is “profit”.

Students can Download Tamil Nadu 11th Economics Model Question Paper 5 English Medium Pdf, Tamil Nadu 11th Economics Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 11th Economics Model Question Paper 5 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 3:00 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions: [20 × 1 = 20]

Question 1.
Marginal revenue is the addition made to the …………………….
(a) Total sales
(b) Total revenue
(c) Total production
(d) Total cost
Answer:
(b) Total revenue

Question 2.
Function with single independent variable is known as ………………………
(a) Multivariate Function
(b) Bivariate Function
(c) Univariate Function
(d) Polynomial Function
Answer:
(c) Univariate Function

Question 3.
There is no opportunity cost in ……………………..
(a) Floating cost
(b) Prime cost
(c) Sunk cost
(d) social cost
Answer:
(c) Sunk cost

Question 4.
Density of population is rural areas are ……………………..
(a) Very high
(b) Very low
(c) Moderate
(d) Constant
Answer:
(b) Very low

Question 5.
Amartya Kumara Sen received the Nobel prize in Economics in the year ……………………..
(a) 1998
(b) 2000
(c) 2008
(d) 2010
Answer:
(a) 1998

Question 6.
The transfer of ownership from public sector to private sector is known as ……………………..
(a) Globalization
(b) Liberalization
(c) Privatization
(d) Nationalization
Answer:
(c) Privatization

Question 7.
The gateway of privatization ………………………..
(a) Denationalization
(b) Disinvestment
(c) Both (a) and (b)
(d) None of these
Answer:
(c) Both (a) and (b)

Question 8.
Equilibrium condition of a firm is …………………….
(a) MC = MR
(b) MC > MR
(c) MC < MR
(d) MR = price
Answer:
(a) MC = MR

Question 9.
The reward given for the use of capital ………………………..
(a) Rent
(b) Wage
(c) Interest
(d) Profit
Answer:
(c) Interest

Question 10.
SPIC is located in ……………………
(a) Chennai
(b) Madurai
(c) Tuticorin
(d) Pudukkottai
Answer:
(c) Tuticorin

Question 11.
The advocate of democratic socialism was ……………………..
(a) Jawaharlal Nehru
(b) P.C. Mahalanobis
(c) Dr. Rajendra prasad
(d) Indira Gandhi
Answer:
(a) Jawaharlal Nehru

Question 12.
Which is considered as the basic unit for rural areas?
(a) Panchayat
(b) Village
(c) Town
(d) Municipality
Answer:
(b) Village

Question 13.
The objective of the Industrial policy 1956 was ……………………
(a) Develop heavy Industries
(b) Develop agricultural sector only
(c) Develop private sector only
(d) Develop cottage Industries only
Answer:
(a) Develop heavy Industries

Question 14.
The long – run production function is explained by ………………………
(a) Law of demand
(b) Law of supply
(c) Return to scale
(d) Law of variable proportions
Answer:
(c) Return to scale

Question 15.
How many commercial banks were nationalised in 1969?
(a) 10
(b) 12
(c) 14
(d) 16
Answer:
(c) 14

Question 16.
Expansion of FDI ……………………
(a) Foreign Private Investment
(b) Foreign Portfolio
(c) Foreign Direct Investment
(d) Forex Private Investment
Answer:
(c) Foreign Direct Investment

Question 17.
Thiruvalluvar Economic ideas mainly dealt with ………………………..
(a) Wealth
(b) Poverty is the curse in the society
(c) Agriculture
(d) All the above
Answer:
(d) All the above

Question 18.
State of rest is a point termed as ………………………….
(a) Equilibrium
(b) Non – Equilibrium
(c) Minimum Point
(d) Maximum Point
Answer:
(a) Equilibrium

Question 19.
An incremental change independent variable with respect to change independent variable is known as ………………………….
(a) Slope
(b) Intercept
(c) Variant
(d) Constant
Answer:
(a) Slope

Question 20.
In sex ratio, Tamil Nadu ranks ……………………..
(a) First
(b) Second
(c) Third
(d) Fourth
Answer:
(c) Third

PART – II

Answer any seven question in which Question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
Define Micro industry?
Answer:

1. Micro, small and medium Enterprises are MSMEs produce a wide variety of products in almost all sectors.
2. The prominent among them are the engineering, electrical, chemicals, plastics, steel, paper, matches, textiles, hosiery and garments sector.

Question 22.
Find the average cost function where TC = 60 + 10x + 15x²
Answer:

1. Formula = \(\frac{TC}{x}\)
2. Average cost function = \(\frac{60}{x}\) + \(\frac{10x}{x}\) + \(\frac { 15x^{ 2 } }{ x } \)
3. Average cost = \(\frac{60}{x}\) + 10 + 15x

Question 23.
What is the formula for elasticity of supply if you know the supply function?
Answer:
Elasticity of supply = \(\frac{dq}{dp}\)

Question 24.
Define Marginal product of a factor?
Answer:
It is the addition or the increment made to the total product when one more unit of the variable input is employed . In other words, it is the ratio of the change in the total product to the change in the units of the input. It is expressed as
Where, MP = ∆TP/∆N
Where, MP = Marginal Product
∆TP = Change in total product
∆N = Change in units of input
It is also expressed as
MP = TP[n] – TP [n – 1]
MP = Marginal product
TP [n] = Total product of employing nth unit of a factor.
TP [n – 1] = Total product of employing the previous unit of a factor, that is, [n – 1]^th unit of a factor.

Question 25.
Define Rural economy?
Answer:

1. Rural Economics deals with the application of economic principles in understanding and developing rural areas.
2. Rural areas are geographical areas located outside towns and cities.
3. Rural Economy refers to villages and rural community refers to people living in villages.

Question 26.
What are goods?
Answer:
Goods are also called:

1. Products
2. Commodities
3. Things
4. In Economics, the term ‘goods’ implies the term ‘services’.

Question 27.
Mention the types of distribution?
Answer:
Personal Distribution:
Personal Distribution is the distribution of national income among the individuals.

Functional Distribution:
Functional Distribution means the distribution of income among the four factors of production namely land, labour, capital and organization for their services in production process.

Question 28.
State the features that distinguish a land tenure system from other system?
Answer:
(I) Land Tenure refers to the system of land ownership and management.

(II) The features that distinguish a land tenure system from the others relate to the following:

• Who owns the land;
• Who cultivate the land;
• Who is responsible for paying the land revenue to the government.

(III) Based on these questions, three different types of land tenure existed in India before Independence.

Question 29.
What is meant by Sunk cost?
Answer:
A cost incurred in the past and cannot be recovered in future is called as Sunk Cost. This is historical but irrelevant for future business decisions. It is called as sunk because; they are unalterable, unrecoverable and if once invested it should be treated as drowned or disappeared.

Question 30.
Point out the essential features of pure competition?
Answer:

1. Large number of Buyers and sellers.
2. Homogeneous Product and Uniform price.
3. Free Entry and exit.
4. Absence of Transport cost.
5. Perfect mobility of factors of production.
6. Perfect knowledge of the market.
7. No Government Intervention.

PART – III

Answer any seven question in which Question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
Compare productivity of any two food crops between Tamil Nadu and India?
Answer:
Productivity position of Tamil Nadu and India:

1. The Government of Tamil Nadu lays emphasis on agricultural production and productivity.
2. Tamil Nadu tops in productivity, in food crops as well as non – food crops among the states in India.

Productivity position of Tamil Nadu in India

1. Tamil Nadu ranks first in maize, cumbu, groundnut, oil seeds and cotton.
2. Tamil Nadu ranks second in rice and coconut.
3. Tamil Nadu ranks third in sugarcane, sunflower and Jowar.

Question 32.
How do you justify the merits of privatization?
Answer:

1. Privatisation is transfer of ownership and management of enterprises from public sector to private sector.
2. Denationalization, disinvestment and opening exclusive public sector enterprises to private sector are the gateways to privatization.

Question 33.
State and explain the elasticity of supply?
Answer:

1. Elasticity of supply may be defined as the degree of responsiveness of change in supply to change in price on the part of sellers.
2. It is Mathematically expressed as,

Elasticity of supply = Proportionate change in supply/Proportionate change in price
e_s = \(\frac { \Delta Q_{ S } }{ Q_{ S } } \)/\(\frac { \Delta P }{ P } \)
e_s = \(\frac { \Delta Q_{ S } }{ \Delta P } \) × \(\frac{P}{Qs}\)
Where Q_s represents the supply, P presents price, ∆ denotes a change.

Question 34.
What are the functions of Entrepreneur?
Answer:
Functions of an Entrepreneur:
1. Initiation:
An organizer is the initiator of the business, by considering the situation and availability of resources and planning the entire process of business of production.

2. Innovation:
A successful entrepreneur is always an innovator. He introduces new methods in the production process.

3. Co – ordination:
An organizer applies a particular combination of the factor of production, to start and run the business or production.

4. Control, Direction and Supervision:
An organiser controls so that nothing prevents the organisation from achieving its goal. He directs the factors to get better results and supeiVises for the efficient functioning of all the factors involved in the process of production.

5. Risk – taking and uncertainty – bearing:
There are risk – taking and uncertainty-bearing obstacles. Risks may be insured but uncertainties cannot be insured. They reduce the profit.

Question 35.
List out the kinds of wages?
Answer:
Wages are divided into four types.

1. Nominal Wages or Money Wages:
Nominal wages are referred to the wages paid in terms of money.

2. Real Wages:
Real wages are the wages paid in terms of goods and services. Hence, real wages are the purchasing power of money wages.

3. Piece Wages:
Wages that are paid on the basis of quantum of work done.

4. Time Wages:
Wages that are paid on the basis of the amount of time that the worker works.

Question 36.
Give short note on Cold Storage?

1. India is the largest producer of fruits and second largest producer of vegetables in the world.
2. Inspite of that per capita availability of fruits and vegetables is quite low because of post – harvest losses which account for about 25% to 30% of production.
3. Besides, quality of a sizable quantity of produce also deteriorates by the time it reaches the consumer.
4. Most of the problems relating to the marketing of fruits and vegetables can be traced to their perishability.
5. Perishability is responsible for high marketing costs, market gluts, price fluctuations and other similar problems.
6. In order to overcome this constraint, the Government of India and the Ministry of Agriculture promulgated an order known as “cold storage order, 1964” under section 3 of the Essential Commodities Act., 1955.

Question 37.
Compare positive economics and normative economics?
Answer:

Question 38.
Describe the development of textile Industry in Tamil Nadu?
Answer:

1. Tamil Nadu is the largest textile hub of India.
2. Tamil Nadu is known as the “Yam Bowl” of the country accounting for 41% of India’s cotton yam production.
3. The textile industry plays a significant role in the Indian economy by providing direct employment to an estimated 35 million people, and thereby contributing 4% of GDP and 35% of gross export earnings.
4. The textile sector contributes to 14% of the manufacturing sector.
5. From spinning to garment manufacturing, entire textile production chain facilities are in Tamil Nadu.
6. About half of India’s total spinning mill capacity is in Tamil Nadu.
7. The western part of Tamil Nadu comprising Coimbatore, Tirupur, Erode, Dindigul and Karur has the majority of spinning mills manufacturing cotton, polyester, blended yam and silk yam used by garment units in Tamil Nadu, Maharastra etc.,
8. Yam is also exported to China, Bangladesh, etc.,
9. Tirupur known as “knitting city” is the exporter of garments worth USD (United States Dollar) 3 billion.
10. Karur is the major home for textile manufacturing (curtain cloth, bed linens, kitchen linens, toilet linens, table linens, wall hangings etc.,) and export hub in India.
11. Erode is the main cloth market in South India for both retail and wholesale ready – mades.

Question 39.
What are the important features of utility?
Answer:
The important features of utility are:

1. Utility is psychological. It depends on the consumer’s mental attitude. For example, a vegetarian derives no utility from mutton.
2. Utility is not equivalent to usefulness. For example, a smoker derives utility from a cigarette; but, his health gets affected.
3. Utility is not the same a pleasure. A sick person derives utility from taking a medicine, but definitely it is not providing pleasure.
4. Utility is personal and relative. An individual obtains varied utility from one and the same good in different situations and places.
5. Utility is the function of the intensity of human want. An individual consumer faces a tendency of diminishing utility.
6. Utility cannot be measured objectively. It is a subjective concept and it cannot be measured numerically.
7. Utility has no ethical or moral significance. For example, a cook derives utility from a knife using which he cuts some vegetables, and a killer wants to stab his enemy by that knife. In economics, a commodity has utility if it satisfies a human want.

Question 40.
Mention the features of SHGs?
Answer:
Major features of SHGs [Self Help Groups]

1. SHG is generally an economically homogeneous group formed through a process of self – selection based upon the affinity of its members.
2. Most SHGs are women’s groups with membership ranging between 10 and 20.
3. SHGs have well – defined rules and by – laws, hold regular meetings and maintain records and savings and credit discipline.
4. SHGs are self managed institutions characterized by participatory and collective decision making.

PART- IV

Answer all the questions. [7 × 5 = 35]

Question 41 (a).
A firm has the revenue function R = 600q – 0.03q² and the cost function is
C = 150q + 60,000, where q is the number of units produced. Find AR, AC, MR and MC?
Answer:
(I) Average Revenue = \(\frac{R}{q}\)
\(\frac { 600q-0.03q^{ 2 } }{ q } \) = \(\frac{600q}{q}\) – \(\frac { 0.03q^{ 2 } }{ q } \)
AR = 600 – 0.03q

(II) Average Cost = \(\frac{C}{q}\)
= \(\frac{150q+60000}{q}\)
= \(\frac{150q}{q}\) + \(\frac{60000}{q}\)
AC = 150 + \(\frac{60000}{q}\)

(III) Marginal Revenue = \(\frac{dR}{dq}\)
R = 600q – 0.03q²
\(\frac{dR}{dq}\) = 600 – (0.03)q²
\(\frac{dR}{dq}\) = 600 – (0.03)(2q)
MR = 600 – 0.06q

(IV) Marginal Cost = \(\frac{dC}{dq}\)
C = 150q + 60000
MC = 50

[OR]

(b) What are the steps involved in executing a MS Excel sheet?
Answer:

1. MS – excel is used in data analysis bý using formula.
2. A spread sheet is a large sheet of paper which contains rows and columns.
3. The intersection of rows and columns is termed as cell.
4. MS – Excel 2007 version supports upto I million rows and 16 thousand columns per work sheet.

MS Excel Start From Various Options:

1. Click Start → Program → Micro Soft Excel
2. Double click the MS Excel Icon from thè Desktop

Worksheet:
MS – Excel work sheet is a table like document containing rows and columns with data and formula.

There are four kinds of calculation operators. They are:

1. Arithmetic
2. Comparison
3. Text Concatenation [link together]
4. Reference

MS – Excel helps to do data analysis and data presentation in the form of graphs, diagrams, area chart, line chart etc.

Question 42 (a).
Illustrate the concept of producer’s equilibrium?
Answer:
Producer equilibrium implies the situation where producer maximizes his output. It is also known as optimum combination of the factors of production. In short, the producer manufactures a given amount of output with ‘least cost combination of factors’, with his given budget.

Optimum Combination of Factors implies either:
There is output maximisation for given inputs or there is cost minimisation for the given output.

Conditions for Producer Equilibrium:
The two conditions that are to be fulfilled for the attainment of producer equilibrium are:
The iso – cost line must be tangent to iso – quant curve. At point of tangency, the iso-quant curve must be convex to the origin or MRTSLk must be declining.

[OR]

(b) State the relationship between AC and MC?
Answer:
There is a unique relationship between the AC and MC curves as shown in diagram.

1. When AC is falling, MC lies below AC.
2. When AC becomes constant, MC also becomes equal to it.
3. When AC starts increasing, MC lies above the AC.
4. MC curve always cuts AC at its minimum point from below.

Question 43 (a).
Explain various divisions of Economics?
Answer:
Economics sub divisions are:

(I) Consumption:

• Human wants coming under consumption is the starting point of economic activity.
• In this section the characteristics of human wants based on the behaviour of the consumer, the diminishing marginal utility and consumer’s surplus are dealt with.

(II) Production:

• Production is the process of transformation of inputs into output.
• This division covers the characteristics and role of the factors of production namely land, labour, capital and organization.

(III) Exchange:

• Exchange is concerned with price determination in different market forms.
• This division covers trade and commerce.
• Consumption is possible only if the produced commodity is placed in the hands of the consumer.

(IV) Distribution:

• Production is the result of the coordination of factors of production.
• Since a commodity is produced with the efforts of land, labour, capital and organization, the produced wealth has to be distributed among the cooperating factors.
• The reward for factors of production is studied in this division under rent, wages, interest and profit.
• Distribution studies about the pricing of factors of production.

[OR]

(b) Explain the law of demand and its exceptions?
Answer:
Definitions:
The Law of Demand says as “the quantity demanded increases with a fall in price and diminishes with a rise in price”. – Marshall
“The Law of Demand states that people will buy more at lower price and buy less at ‘ higher prices, other things remaining the same”. – Samuelson

Assumptions of Law of Demand:

1. The income of the consumer remains constant.
2. The taste, habit and preference of the consumer remain the same.
3. The prices of other related goods should not change.
4. There should be no substitutes for the commodity in study.
5. The demand for the commodity must be continuous.
6. There should not be any change in the quality of the commodity.

Given these assumptions, the law of demand operates. If there is change even in one of these assumptions, the law will not operate.

Explanation:
The law of demand explains the relationship between the price of a commodity and the quantity demanded of it. This law states that quantity demanded of a commodity expands with a fall in price and contracts with a rise in price.

In other words, a rise in price of a commodity is followed by a contraction demand and a fall in price is followed by extension in demand. Therefore, the law of demand states that there is an inverse relationship between the price and the quantity demanded of a commodity.

Exceptions to the law of demand:
Normally, the demand curve slopes downwards from left to right. But there are some unusual demand curves which do not obey the law and the reverse occurs. A fall in price brings about a contraction of demand and a rise in price results in an extension of demand. Therefore the demand curve slopes upwards from left to right.

It is known as exceptional demand curve. In the above diagram, DD is the demand curve which slopes upwards from left to right. It shows that when price is OP₁, OQ₁, is the demand and when the price rises to OP₂, demand also extends to OQ₂.

Question 44 (a).
How price and output are determined under the perfect competition?
Answer:
Perfect Competition: Firm’s Equilibrium in the Short Run

In the short run, at least a few factors of production are fixed. The firms under Perfect Competition take the price (10) from the industry and start adjusting their quantities produced. For example Q_d = 100 – 5P and Q_s = 5P.

At equilibrium Q_d = Q_s
Therefore 100 – 5P = 5P
100 = 10P; 100/10 = P; Qd = demand
P = 10; P = Price
Qd = 100 – 5(10); Q_s = Supply
100 – 50 = 50
Q_s = 5 (10) = 50
Therefore 50 = 50

This diagram consists of three panels. The equilibrium of an industry is explained in the first panel. The demand and supply forces of all the firms interact and the price is fixed as 10. The equilibrium of an industry is obtained at 50 units of output.

In the second part of the diagram, AC curve is lower than the price line. The equilibrium condition is achieved where MC = MR. Its equilibrium quantity sold is 50. With the prevailing price, ₹ 10 it experiences super normal profit. AC = ₹ 8, AR = ₹ 10.

Its total revenue is 50 × 10 = 500. Its total cost is 50 × 8 = 400. Therefore, its total profit is 500 – 400 = 100.

In the third part of the diagram, firm’s cost curve is above the price line. The equilibrium condition is achieved at point where MR = MC. Its quantity sold is 50. With the prevailing price, it experiences loss. (AC > AR). Its total revenue is 50 × 10 = 500. Its total cost is 50 × 12 = 600. Therefore, its total loss is 600 – 500 = 100.

As profit prevails in the market, new firms will enter the industry, thus increasing the supply of the product. This means a decline in the price of the product and increase the cost of production. Thus, the abnormal profit will be wiped out; loss will be incurved. When loss prevails in the market, the existing loss making firms will exit the industry, thus decreasing the supply of the product.

This means a rise in the price of the product and reduction in the cost of production. So the loss will vanish; Profit will emerge. Consequent upon the entry and exit of new firms into the industry, firms always earn ‘normal profit’ in the long run as shown in diagram.

[OR]

(b) Elucidate the Loanable funds Theory of Interest?
Answer:

1. The Loanable Funds Theory, also known as the “Neo – Classical Theory,” was developed by Swedish economists like Wicksell, Bertil, Ohlin, Viner, Gunnar Myrdal and others.
2. According to this theory, interest is the price paid for the use of loanable funds.
3. The rate of interest is determined by the equilibrium between demand for and supply of ‘ loanable funds in the credit market.

Demand for loanable funds
The demand for loanable funds depends upon the following:

(I) Demand for Investment [I]

• The most important factor responsible for the loanable funds is the demand for investment.
• Bulk of the demand for loanable funds comes from business firms which borrow money for purchasing capital goods.

(II) Demand for consumption [C]
The demand for loanable funds comes from individuals who borrow money for consumption purposes also.

(III) Demand for Hoarding [H]

• The next demand for loanable funds comes from hoarders. Demand for hoarding money arises because of people’s preference for liquidity, idle cash balances and so on.
• The demand for C, I and H varies inversely with interest rate.

Supply of Loanable funds:
The supply of loanable funds depends upon the following four sources:

1. Savings [S]:
Loanable funds comes from savings. According to this theory, savings may be of two types, namely,

• Savings planned by individuals are called “ex-ante-savings ”.
• The unplanned savings are called ‘ex-post savings”.

2. Bank Credit [BC]:
The bank credit is another source of loanable funds. Commercial banks create credit and supply loanable funds to the investors.

3. Dishoarding [DH]:
Dishoarding means bringing out the hoarded money into use and thus it constitutes a source of supply of loanable funds.

4. Disinvestment: [DI]:
Disinvestment is the opposite of investment. Disinvestment means not providing sufficient funds for depreciation of equipment.

It gives rise to the supply of loanable funds. All the four sources of supply of loanable funds vary directly with the interest rate.

Question 45 (a).
The features of Rural Economy are peculiar’Argue?
Answer:
Features of Rural Economy:

(I) Village is an Institution:
The village is a Primary Institution and it satisfies almost all the needs of the rural community. The rural people have a feeling of belongingness and a sense of unity towards each other.

Dependence on Agriculture:
The rural economy depends much on nature and agricultural activities. Agriculture and allied activities are the main occupation in rural areas.

Life of Rural people:
Lifestyles in villages are very simple. Public services like education, housing, health and sanitation, transport and communication, banking, roads and markets are limited and unavailable.

The standards of living of majority of rural people are poor and pitiable. In terms of methods of production, social organization and political mobilization, rural sector is extremely backward and weak.

Population Density:
Population density, measured by number of persons living per sq.km is very low and houses are scattered in the entire villages.

Employment:
There exists unemployment, seasonal unemployment and under employment in rural areas.

Poverty:
Poverty is a condition where the basic needs of the people like food, clothing and shelter are not being met.

Indebtedness:
People in rural areas are highly indebted owing to poverty and underemployment, lack of farm and non – farm employment opportunities, low wage employment, seasonality in production, poor marketing network etc.

Rural Income:
The Income of the rural people is constrained as the rural economy is not sufficiently vibrant to provide them.

Dependency:
Rural households are largely dependent on social grants and remittances from family members working in urban areas and cities.

Dualism:
Dualism means the co-existence of two extremely different features like developed and under developed. These characteristics are very common in rural areas. Inequality: The distributions of income, wealth and assets are highly skewed among rural people. Land, livestock and other assets are owned by a few people.

Migration:
Rural people are forced to migrate from villages to urban areas in order to seek gainful employment for their livelihood.

[OR]

(b) Explain the various sources of energy in Tamil Nadu?
Answer:
Tamil Nadu tops in power generation among the Southern States as seen in the table. Tamil Nadu 26,865 MW in 1st Rank in the energy level. Tamil Nadu is in the forefront of all other Indian States in installed capacity.

Muppandal wind farm is a renewable energy source, supplying the villagers with electricity for work. Wind farms were built in Nagercoil and Tuticorin apart from already existing ones around Coimbatore, Pollachi, Dharapuram and Udumalaipettai. These areas generate about half of India’s 2,000 megawatts of wind energy or two percent of the total power output of India.

Nuclear Energy:
The Kalpakkam Nuclear Power Plant and the Koodankulam Nuclear Power Plant are the major nuclear energy plants for the energy grid.

Thermal power:

1. In Tamil Nadu the share of thermal power in total energy sources is very high and the thermal power plants are at Athippattu (North Chennai) Ennore, Mettur, Neyveli and Thoothukudi.
2. The generation of power under various sources is given here.

Hydel Energy:

1. There are about 20 hydro-electric units in Tamil Nadu.
2. The prominent units are Hundah, Mettur, Periyar, Maravakandy, Parson Valley etc.,

Solar Energy:

1. Tamil Nadu tops in solar power generation in India as seen in the table here:
2. Southern Tamil Nadu is considered as pne of the most suitable regions in the country for developing solar power projects.

Wind Energy:

1. Tamil Nadu has the highest installed wind energy capacity in India.
2. The State has very high quality of offshore wind energy potential off the Tirunelveli coast and southern Thoothukudi and Rameswaram coast.

Question 46 (a).
What are the methods of measuring Elasticity of demand?
Answer:
There are three methods of measuring price elasticity of demand.

1. The Percentage method:
e_p = \(\frac { \Delta Q }{ \Delta P } \), \(\frac{P}{Q}\)
It is also known as ratio method, when we measure the ratio as:
e_p = \(\frac { %\Delta Q }{ %\Delta P } \) where,
% ∆Q = Percentage change in demand
% ∆P = Percentage change in price

2. Total Outlay Method:
Marshall suggested that the simplest way to decide whether demand is elastic or inelastic is to examine the change in total outlay of the consumer or total revenue of the firm Total Revenue = (Price × Quantity Sold)
TR = ( P × Q)

Where there is inverse relation between Price and Total Outlay, demand is elastic. Direct relation means inelastic. Elasticity is unity when Total Outlay is constant.

3. Point or Geometrical Elasticity:
When the demand curve is a straight line, it is said to be linear. Graphically, the point elasticity of a linear demand curve is shown by the ratio of the segments of the line to the right and to the left of the particular point.
Lower segment of the demand curve
Point Elasticity =

e_p = \(\frac{L}{U}\)
Where ‘e_p’ stands for point elasticity, ‘L’ stands for the lower segment and ‘U’ for the upper segment.

[OR]

(b) Explain the VKRV Rao’s National Income Methodology and Industrialization?
Answer:
(a) Rao’s National Income Methodology:

1. Rao’s name is remembered for his pioneering work on the enumeration of national income of India.
2. He attempted
   • To develop the national income concepts suited to India and developing countries.
   • To analyze the concepts of investment, saving and the multipliers is an underdeveloped economy.
   • To study the compatibility of the national incomes of Industrialized and underdeveloped countries.
3. Rao’s paper on “Full Employment and Economic Development” was one of the earliest contributions in the field of development towards employment.

(b) Rao’s views on Industrialization:
Rao gave the following reasons for low per capita income and low levels of per capita nutrition in India.

1. Uneconomic holdings with sub-divisions and fragmentation.
2. Low levels of water availability for crops.
3. Excess population pressure on agriculture due to the absence of a large industrial sector.
4. Absence of capital.
5. Absence of autonomy in currency policy, and in general in monetary matters encouraging holding of gold.

Question 47 (a).
Compare and contrast various definitions of economics?
Answer:
1. Adam Smith’s wealth definition:

• Adam Smith [1723 – 1790] in his book “An Inquiry into Nature and Cause of Wealth of Nations” [1776] defines “Economics as the science of wealth”
• He explains how a nation’s wealth is created and increased.
• He considers that the individual in the society wants to promote his own gain and in this process, he is guided and led by an “invisible hand”
• Adam Smith favours the introduction of “division of labour” to increase the quantum of output.
• Severe competition in factories and society helps in bettering the product.
• Supply force is very active and a commodity is made available to the consumers at the lowest price.

2. Alfred Marshall welfare definition: .

• Alfred Marshall [1842-1924] in his book “Principles of Economics” [1890] defines economics thus “Political Economy” or Economics is a study of mankind in the ordinary business of life.
• It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well being.
• Thus , it is on one side a study of wealth and on the other and more important side, a part of the study of man”.

The important features of Marshall’s definition are:

• Economics does not treat wealth as’the be-all and end-all of economic activities.
• Man promotes primarily welfare and not wealth.
• The science of economics contains the concerns of ordinary people who are moved by love and not merely guided or directed by the desire to get maximum monetary benefit.
• Economics is a social science. It studies people in the society who influence one another.

3. Lionel Robbins – Scarcity definition:

• Lionel Robbins published a book “An Essay on the Nature and Significance of Economic Science” in 1932.
• According to him, “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.

The major features of Robbins’ definition:

• Ends refer to human wants, human beings have unlimited number of wants.
• On the other hand, resources or means that go to satisfy the unlimited human wants are limited or scarce in supply.
• The scarce means are capable of having alternative uses.
• An individual grades his wants and satisfies first his most urgent want.
• Economics, according to Robbins, is a science of choice. •

4. Samuelson’s – growth definition:

• Paul Samuelson defines economics as “the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses to produce various. commodities over time, and distribute them for consumption, now and in the future among various people and groups of society”.
  The major implications of this definition are as follows:
• Samuelson’s makes his definition dynamic by including the element of time in it.
• Samuelson’s definition is applicable also in a barter economy.
• His definition covers various aspects like production, distribution and consumption.
• Samuelson treats economics as a social science.
• Samuelson appears to be the most satisfactory.

[OR]

(b) Explain the law of Equi – marginal utility?
Answer:
The law of the Equi-marginal utility:

1. The law of diminishing marginal utility is applicable only to the want of a single commodity.
2. The law of equi – marginal utility explains the behavior of a consumer when he consumer more than one commodity.
3. Wants are unlimited but the income which is available are limited.
4. This law explains how the consumer spends his limited income on various commodities to get maximum satisfaction.
5. Law of Equi-Marginal Utility is also known as the law of substitution.
6. “The law of consumer’s equilibrium ”
7. “Gossen’s second law ” and “ The law of maximum satisfaction”.

Definition:
Marshall states the law as, “If a person has a thing which he can put to several uses, he will distribute it among these uses in such a way that it has the same marginal utility in all. For, if it had a greater marginal utility in one use than another he would gain by taking away some of it from the second use and applying it to first”.

Assumption:

1. The consumer is rational in the sense that he wants to get maximum satisfaction.
2. The utility of each commodity is measurable in cardinal numbers.
3. The marginal utility of money remains constant.
4. The income of the consumer is given. ‘
5. There is perfect competition in the market.
6. The prices of the commodities are given.
7. The law of diminishing marginal utility operates.

Illustration:
This law can be illustrated with the help of table. Let us assume that the consumer has a given income of ₹ 11. He wants to spend this entire income [i.e. ₹ 11] on Apple and Orange. The price of an Apple and the price of an orange is ₹ 1 each.

If the consumer wants to attain maximum utility, he should buy 6 units of apples and 5 units of oranges, so that she can get [92 + 58] = 150 units. No other combination of Apple and Orange can give higher than 150 utilities.

Diagrammatic Illustration:
In the diagram, X – axis represents the amount of money spent and Y axis represents the marginal utilities of Apple and Orange respectively.

If the consumer spends ₹ 6 on Apple and ₹ 5 on Orange, the marginal utilities of both are equal, i.e. AA₁ = BB₁ [4 = 4], Hence, he gets maximum utility.

Criticisms:

1. In practice, utility cannot be measured, only be felt.
2. This law cannot be applied to durable goods.

Students can Download Tamil Nadu 11th Commerce Model Question Paper 3 English Medium Pdf, Tamil Nadu 11th Commerce Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 11th Commerce Model Question Paper 3 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 2:30 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions. [20 × 1 = 20]

Question 1.
Which bank has the power to issue bank notes?
(a) Central bank
(b) Commercial bank
(c) Co – operative banks
(d) Foreign banks
Answer:
(a) Central bank

Question 2.
Which one is not land transport?
(a) Pack animals
(b) Bullock cart
(c) Tramways
(d) Liner
Answer:
(d) Liner

Question 3.
Occupation of a Doctor is called …………………..
(a) Employment
(b) Business
(c) Profession
(d) Sole proprietor
Answer:
(c) Profession

Question 4.
Match List – I with List – II and select the correct answer using the codes given below:

Answer:
Codes:

Question 5.
Primary industries may be divided as follows:
(I) Extractive industries
(II) Manufacturing industries
(III) Genetic industries
(IV) Construction industries
(a) (I) and (II)
(b) (II) and (III)
(c) (I) and (III)
(d) (I) and (IV)
Answer:
(c) (I) and (III)

Question 6.
Centralised control in MNCs implies control exercised by ………………………
(a) Branches
(b) Subsidiaries
(c) Headquarters
(d) Parliament
Answer:
(c) Headquarters

Question 7.
Large scale fixed retailers include ………………………..
(a) Super markets
(b) Speciality stores
(c) General stores
(d) Second shops
Answer:
(a) Super markets

Question 8.
Exim Bank was set up in the year ……………………..
(a) 1949
(b) 1972
(c) 1935
(d) 1982
Answer:
(d) 1982

Question 9.
Social responsibility towards employees represents the following except ………………………
(a) Reasonable remuneration
(b) Proper facilities
(c) Social security
(d) Exploitation
Answer:
(d) Exploitation

Question 10.
Which one of the following is not correctly matched?
(a) Imperial bank – Mumbai
(b) RBI – 2013
(c) RTGS – Commercial bank
(d) Development banks – SBI
Answer:
(d) Development banks – SBI

Question 11.
Enterprises operating in several countries but managed from one country is termed as ………………………
(a) Government company
(b) Multinational company
(c) Private company
(d) Joint venture
Answer:
(b) Multinational company

Question 12.
The money can be withdrawn from the PPF, after …………………….. years.
(a) 14
(b) 13
(c) 15
(d) 12
Answer:
(c) 15

Question 13.
The exporters appoint a ……………………. to fulfill the customs formalities.
(a) Clearing agent
(b) Forwarding agent
(c) Commission agent
(d) Factor
Answer:
(b) Forwarding agent

Question 14.
The compensation given for breach of contract is ………………………..
(a) Damage
(b) Remuneration
(c) Money
(d) Cheque
Answer:
(a) Damage

Question 15.
Ethics is important for ………………………
(a) Top management
(b) Middle level managers
(c) Non – managerial employees
(d) All of them
Answer:
(d) All of them

Question 16.
World Bank is located at ……………………..
(a) Washington DC
(b) Newyork
(c) Tokyo
(d) Hongkong
Answer:
(a) Washington DC

Question 17.
Which of the following is not a function of a central bank?
(a) Guiding and regulating the banking system of country
(b) Deal with the general public
(c) Acts as government banker
(d) Maintains deposit accounts of all other bank
Answer:
(b) Deal with the general public

Question 18.
Dispersal of decision making power to branches/affiliates/subsidiaries is by the head officer represents ………………………..
(a) Centralisation
(b) Decentralisation
(c) Power
(d) Integration
Answer:
(b) Decentralisation

Question 19.
The document which authorises to deliver the goods either in part or full is called ………………………….
(a) Warehouse warrant
(b) Dock receipt
(c) Dock warrant
(d) None of these
Answer:
(c) Dock warrant

Question 20.
Which of the following holder is given voting rights?
(a) Debentures
(b) Preference shares
(c) Equity shares
(d) Bonds
Answer:
(c) Equity shares

PART – II

Answer any seven questions in which question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
Warehouses mean the places to store the goods for future purpose. It renders invaluable services to the society by performing the various functions. Give any three functions of warehouses?
Answer:

1. Storage
2. Price stabilization
3. Equalization of demand and supply

Question 22.
Murugan is the famous auditor in Madurai. Identify the type of economic activity highlighted in the case. Write the meaning of it?
Answer:
The economic activity highlighted in this case is profession. Profession means something which is more than a job. For the profession a special qualification is necessary. The income from the profession is professional fee. It may be different from one profession to another profession.

Question 23.
Define commerce?
Answer:
According to Evelyn Thomas, “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products”.

Question 24.
Insurance covers different types of risks. It can be broadly classified into

1. Life insurance
2. Non – life insurance. What is the other name for Non – life insurance? How it is classified?

Answer:
The other name for Non – life insurance is called as General insurance. It can be further classified into:

1. Fire insurance
2. Marine insurance
3. Health insurance
4. Miscellaneous insurance

Question 25.
Write any two differences between warehouse warrant and warehouse receipt?
Answer:

Question 26.
Briefly explain the need for Debit card?
Answer:
ATM card is also called debit card. This card is more useful in purchase of goods and services anywhere in India if the shop maintains a swiping machine facility.

Question 27.
What is a Statutory Company?
Answer:
Companies are established by a Special Act passed in Parliament or State Assembly. Rules relating to day – to – day management of statutory companies are specified in the Articles of Association (AOA). Examples: LIC, RBI, Railways, etc.

Question 28.
Write any two advantages of MNC?
Answer:
1. Low Cost Labour:
MNC set up their facilities in low cost countries and produce goods/services at lower cost.

2. Quality Products:
The resource, experience and expertise of MNCs in the sphere of research and development enables the host country to establish its research and development system which helps it in producing quality goods and services at least possible cost.

Question 29.
How the RBI is acting as banker to the government?
Answer:
RBI is acting as a banker to the government. It is one of the traditional functions of RBI. It accepts money into central and state government’s accounts and make payments on their behalf. It manages the governments debts. It advises the government and the terms of new loans.

Question 30.
Write short note on debentures?
Answer:
Debentures are an important instrument for raising long term debt capital. A company can raise funds through issue of debentures which bear a fixed rate of interest.

PART – III

Answer any seven questions in which question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
At first the co – operative movement was started by Robert Owen in the year 1844. Who are Rochdale pioneers?
Answer:
At first, the cooperative movement was started by Robert Owen, in the year 1844. He formed a consumer’s cooperative society in England with 28 workers as members, called “Rochdale Society of Equitable Pioneers”.

Question 32.
List the steps in factoring process?
Answer:
Factoring is derived from a Latin term “facere” which means ‘to make or do’. Factoring is an arrangement wherein the trade debts of a company are sold to a financial institution at a discount.

Factoring Process:

1. The firm enters into a factoring arrangement with a factor, which is generally a financial institution.
2. Whenever goods are sold on credit basis, an invoice is prepared and a copy of the same is sent to the factor.
3. The debt amount due to the firm is transferred to the factor through assignment.
4. On the due date, the amount is collected by the factor from the customer.
5. After retaining the service fees, the remaining amount is sent to the firm by the factor.

Question 33.
List out the products produced by MSME in Tamil Nadu?
Answer:
In Tamil Nadu, MSMEs sector produces a wide variety of products in almost all fields. The prominent among them are the textile, electronic products, engineering products, auto ancillaries, leather products, chemicals, plastics, garments, jewellery etc.

Question 34.
What do you understand by Burglary Insurance?
Answer:
Burglary Insurance: This policy comes under the category of insurance of property. Any loss of damage due to theft, larceny, burglary, house breaking and acts of nature are covered by this policy. Compensation of actual loss is done.

Question 35.
It is the oldest form of organisation. It is administrated by a separate department. What is the form of organisation? Describe any three features of this organisation?
Answer:
1. Formation:
A departmental undertaking is established either as a separate full-fledged ministry or as a sub-division of a ministry (i.e. department) of the Government.

2. No Separate Entity:
A departmental undertaking does not have an independent entity distinct from the Government.

3. Accounting and Audit:
The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to all Government departments.

Question 36.
Mention any three rights of partners?
Answer:
Rights of Partners;

1. Right to take part in business: Every partner has a right to take part in the management of the business.
2. Right to consult: Every partner has the right to consult in all the matters concerning the firm.
3. Right to share profit: Every partner is entitled to share the profits in the agreed ratio. If no ratio is specified in the deed, the profit must be shared equally.

Question 37.
Explain the features of general stores?
Answer:
General Stores sell a wide variety of products under one roof, most commonly found in a local market and residential areas to satisfy the day – to – day needs of the customers residing in nearby localities. They remain open for long hours at convenient timings and often provide credit facilities to their regular customers.

Question 38.
It is a policy taken as a safeguard against the medical costs. It is a contract between an insurer and an individual or a group. What is the name of the policy? Mention a few points about this?
Answer:
In mid 80’s, most of the hospitals in India were government owned and treatment was free of cost. With the advent of Private Medical Care, the need for Health Insurance was felt and various Insurance Companies introduced Health Insurance as a Product. Presently the health insurance exists primarily in the form of ‘Mediclaim policy’.

Question 39.
Without money customers can purchase costly articles with this method. It is useful to Middle – class people. There are two methods- hire purchase and installment system. Mention any three differences between hire purchase and installment system?
Answer:

Question 40.
What is meant by government company?
Answer:
A “Government company” is defined under Section 2(45) of the Companies Act, 2013 as “any company in which not less than 51% of the paid – up share capital, is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company”.

PART – IV

Answer all the questions. [7 × 5 = 35]

Question 41 (a).
Compare business with profession and employment?
Answer:

[OR]

(b) Explain the different types of warehouses on the basis of ownership?
Answer:

• Private Warehouses: Private warehouses are built and owned by private business enterprises in order to store the products produced by them.
• Government Warehouses: They are created and operated by the Government to implement the programmes of the Government.
• Public Warehouse: It is open for public at large. Most of the business organisations, especially small and medium scale units cannot afford to have their own warehouses.
• Co-operative Warehouses: There are warehouses owned and managed by the marketing co-operative societies or agricultural co-operative societies. They are setup to provide warehousing facilities to their members.
• Bonded Warehouses: Bonded warehouses are those warehouses, which are licensed
  by the government to accept storage of imported goods which are not cleared due to non-payment of customs duty by the importer.

Question 42 (a).
Discuss the advantages of transport?
Answer:
(A) Advantages of railway transport:

1. Railways are well suited for carrying heavy and bulky goods over long distances.
2. It can provide long distance travel throughout the day and night with unbroken services.

(B) Advantages of inland waterways:

1. It is considered as the cheapest mode of transport among the other modes of transport.
2. It is most suitable for heavy loads.

(C) Advantages of air transport:

1. It provides a regular, convenient, efficient and quick service.
2. Perishable goods like fruits, vegetables, egg, meat, etc., can be transported quickly.

[OR]

(b) Explain the principles of insurance?
Answer:
1. Utmost Good Faith:
According to this principle, both insurer and insured should enter into contract in good faith. Insured should provide all the information that impacts the subject matter. Insurer should provide all the details’regarding insurance contract.

2. Insurable Interest:
The insured must have an insurable interest in the subject matter of insurance. Insurable interest means some pecuniary interest in the subject matter of the insurance contract.

3. Indemnity:
Indemnity means security or compensation against loss or damages. In insurance, the insured would be compensated with the amount equivalent to the actual loss and not the amount exceeding the loss. This principle ensures that the insured does not make any profit out of the insurance. This principle of indemnity is applicable to property insurance alone.

4. Causa Proxima:
The word ‘Causa proxima’ means ‘nearest qause’. According to this principle, when the loss is the result of two or more cause, the proximate cause, i.e. the direct. The direct, the most dominant and most effective cause of loss should be taken into consideration. The insurance company is not liable for the remote cause.

5. Contribution:
The same subject matter may be insured with more than one insurer then it is known as ‘Double Insurance’. In such a case, the insurance claim to be paid to the insured must be shared on contributed by all insurers in proportion to the sum assured by each one of them.

6. Subrogation:
Subrogation means ‘stepping the shoes on others’. According to this principle, once the claim of the insured has been settled, the ownership right of the subject matter of insurance passes on to the insurer.

7. Mitigation:
In case of a mishap, the insured must take off all possible steps to reduce or mitigate the loss or damage to the subject matter of insurance.

Question 43 (a).
Business owned by a single person is known as sole trading business. He contributes the required capital. Explain the characteristics of sole trading business?
Answer:

1. Ownership by one man: This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manages the entire affairs.
2. Freedom of work and Quick Decisions: Since an individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.
3. Unlimited Liability: When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.
4. Enjoying Entire Profit: He strives tirelessly for the improvement and expansion of his business and enjoys all the benefits of his hard work.
5. Absence of Government Regulation: A sole proprietor concern is free from Government regulations. No legal formalities are to be observed in its formation, management or in its closure.
6. No Separate Entity: The sole trading concern comes to an end with death, disability, insanity and insolvency of the individual.
7. Maintenance of Secrecy: Since he/she manages all the affairs of the business, the secrecy can be maintained easily.

[OR]

(b) What are the rights of a partner?
Answer:

1. Right to take part in business: Every partner has a right to take part in the management of the business.
2. Right to be consultant: Every partner has the right to be consulted in all the matters concerning the firm. The decision of the majority will prevail in all the routine matters.
3. Right of access to books, record and document: Every partner has the right of access to all records and books of accounts, and to examine and copy them.
4. Right to share profit: Every partner is entitled to share the profits in the agreed ratio. If no profit – sharing ratio is specified in the deed, they must be shared equally.
5. Right to receive interest: A partner has the right to receive interest on loans advanced by him to the firm at the agreed rate, and where no rate is stipulated, interest @ 6% p.a. allowed.

Question 44 (a).
Briefly explain the auxiliaries to trade?
Answer:
1. Commerce includes not only trade but also services such as transport, warehousing, packaging, insurance, banking and sales promotion which are incidental or auxiliaries to trade.

2. Trade: The term trade is used to denote buying and selling. Therefore who buys and sells is a trader. A trader is a middleman between the producer and the consumer.

3. Transportation: Goods produced are to be sent to different places where they are demanded. It is done by transporting.

4. Banking: To start the business or to run it smoothly, we need money. Banks supply money in the form of loan. Business activities cannot be undertaken unless funds are available. The funds can be obtained from the bank.

5. Insurance: Business involves many types of risks. Factory building, machinery, furniture must be protected against fire, theft and other risks. Employees are also protected against the risk of accident. Insurance provides protection in all such cases.

6. Warehousing: Usually goods are not sold or consumed immediately after the production. They are to be kept in stock to make them available as and when required. Warehousing helps the firms to overcome the problem of storage and stores the goods for future usage.

[OR]

(b) A Joint stock company is a distinct form of business organisation. It is useful to overcome the limitations of sole trader and partnership. There are so many features of company. What are the characteristics of Joint stock company?
Answer:
Characteristics of a Joint stock Company:
1. Separate legal entity:
Under Incorporation a company becomes a separate legal entity as compared to its members. The company is distinct and different from its members.

2. Limited Liability:
The liability of the members of the company is limited to contribution to the assets of the company upto the face value of shares held by him. A member is liable, to pay only the uncalled money due on shares held by him.

3. Transferability of shares:
Shares in a company can be freely transferable. When a member transfers his shares to another person, the transferee becomes the shareholder of the company.

4. Common Seal:
A company is an artificial person and does not have a physical presence. So the common seal is necessary because the company cannot sign the documents. It is the official signature of the company.

5. One Share – One Vote:
The principle of voting in a company is one share – one vote. If a person has 10 shares, he has 10 votes in the company. So in a company, money is given more importance than a man.

Question 45 (a).
List out the advantages of international trade?
Answer:

1. Geographical Specialization: Countries across the world differ significantly in terms of natural resources, capital equipment, manpower, technology and land and so on.
2. Optimum use of Natural Resources: International business operates on a simple principle that a country which can produce more efficiently and trade the surplus production with other countries has to procure what it cannot produce more efficiently.
3. Economic Development: International business helps the developing countries greatly in achieving rapid economic development by importing machinery, equipment, technology, talent, and so on.
4. Generation of Employment: International business generates employment opportunities by assisting the expansion and growth of agricultural and industrial activities.
5. Higher Standard of Living: On account of international business, the citizens of the country can buy more varieties of goods and services which cannot be produced cost effectively within the home country.
6. Price Equilisation: International business helps to stabilize the prices of various commodities which are fluctuating on a daily basis in the world market.
7. Prospects for Higher Profit: International business helps the firms which produce goods in excess to sell them at relatively higher price to various countries in the international market.
8. Capacity Utilisation: International business enables the firms across the country to sell their goods and services on a large scale in the international market.
9. International Peace: International business makes countries across the world become inter-dependent while these countries are independent in their functioning.

[OR]

(b) Write down the structure of capital account?
Answer:
Capital account consists of three components:

1. Private Capital
2. Banking Capital
3. Official Capital

1. Private Capital:
Private capital consists of foreign investments, long term loan and foreign currency deposits.

2. Banking Capital:
Banking capital includes movement into external financial asset and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.

3. Official Capital:
It includes RBI’s holdings of foreign currency and special drawing rights (SDR) held by the Government.

Question 46 (a).
What are the advantages of sole trading business?
Answer:
1. Easy Formation:
No legal formalities are required to initiate a sole trading concern. Any person capable of entering into a contract can start it, provided he has the necessary resources for it.

2. Incentive to Work hard:
There is a direct relationship between effort and reward. The fact that the entire profit can be taken by himself without sharing with anybody else induces him to work ceaselessly.

3. Small Capital:
Small capital is an important as well as specific advantage of sole proprietorship. Sole proprietor can start business with small capital.

4. Credit Standing:
Since his private properties are held liable for satisfying business debts, he can get more financial assistance from others.

5. Personal Contact with the Customers:
Since sole proprietor knows each and every customer individually he can supply goods according to their taste and preferences. Thus he can cultivate personal relationship with the customers.

6. Flexibility:
The sole trader can easily adjust himself to the changing requirements of his business.

[OR]

(b) What are the factors influencing a channel of distribution? Explain any five?
Answer:
The factors affecting a channel of distribution are as follows:

1. Product Characteristics:
Seasonal products are distributed through less layer of middlemen. Non standardized products that are made according to customer specifications may be delivered directly.

2. Market Characteristics:
The size of the market for the goods is a major factor while selecting the route for distribution of products.

3. Number of Consumers:
Large purchases made by few consumers require centralised distribution.

4. Middlemen factor:
Middlemen who are experienced and have produced more sales are wanted by all producers. Long channel naturally increases the cost and price of the product.

5. Capacity of the Manufacturer:
A financially strong producer may select a high technology oriented channel which will reduce cost in the long run.

Question 47 (a).
Explain the features of a government company?
Answer:
The features of a government company:

1. Registration Under the Companies Act:
A Government company is formed through registration under the Companies Act, 1956; and is subject to the provisions of this Act, like any other company.

However, the Central Government may direct that any of the provisions of the Companies Act shall not apply to a Government company or shall apply with certain modifications. .

2. Executive Decision of Government:
A Government company is created by an executive decision of the Government, without seeking the approval of the Parliament or the State Legislature.

3. Separate Legal Entity:
A Government company is a legal entity separate from the Government. It can acquire property; can make contracts and can file suits, in its own name.

4. Whole or Majority Capital Provided by Government:
The whole or majority (at least 51%) of the capital of a Government company is provided by the Government; but the revenues of the company are not deposited into the treasury.

5. Majority of Government Directors:
Being in possession of a majority of share capital, the Government has authority to appoint majority of directors, on the Board of Directors of a government company.

[OR]

(b) What are the advantages of co-operatives? Explain any five?
Answer:
Advantages of co – operatives:

1. Voluntary organisation:
The membership of a cooperative society is open to all. Any person with common interest can become a member. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies.

2. Easy formation:
Cooperatives can be formed much easily when compared to a company. Any 10 members who have attained majority can join together for forming a cooperative society by observing simple legal formalities.

3. Democracy:
A co – operative society is run on the principle of ‘one man one vote’. It implies that all members have equal rights in managing the affairs of the enterprises.

4. Equal distribution of surplus:
The surplus generated by the cooperative societies is distributed in an equitable manner among members. Therefore all the members of the cooperative society are benefited.

5. Limited liability:
The liability of the members in a cooperative society is limited to the extent of their capital contribution. They cannot be personally held liable for the debts of the society.

Students can Download Tamil Nadu 11th Commerce Model Question Paper 2 English Medium Pdf, Tamil Nadu 11th Commerce Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 11th Commerce Model Question Paper 2 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 2:30 Hours
Maximum Marks: 90

PART – 1

Choose the correct answer. Answer all the questions. [20 × 1 = 20]

Question 1.
Wholesalers buy in ………………………… quantity of goods.
(a) Small
(b) Large
(c) Medium
(d) Limited
Answer:
(b) Large

Question 2.
Small scale fixed retailers include ……………………..
(a) General stores
(b) Pedlars
(c) Cheap jacks
(d) Hawkers
Answer:
(a) General stores

Question 3.
In India, GST became effective from ………………………
(a) 1^st April 2017
(b) 1^st January 2017
(c) 1^st July 2017
(d) 1^st March 2017
Answer:
(a) 1^st April 2017

Question 4.
‘One share – one vote’ principle is followed in kind of organization.
(a) Co – operatives
(b) Partnership
(c) Company
(d) None of these
Answer:
(c) Company

Question 5.
……………………. is not a type of general insurance.
(a) Marine insurance
(b) Life insurance
(c) Fidelity insurance
(d) Fire insurance
Answer:
(b) Life insurance

Question 6.
Self – help groups convert the sayings into a common find known as ……………………..
(a) Common fund
(b) Group corpus fund
(c) Group fund
(d) None of the above
Answer:
(b) Group corpus fund

Question 7.
A major disadvantage of sole proprietorship is ……………………….
(a) Limited liability
(b) Unlimited liability
(c) Easy formation
(d) Quick decision
Answer:
(b) Unlimited liability

Question 8.
Which one of the following is not correctly matched?
(a) Mercantile agents – Functional middleman
(b) Merchant middleman – Wholesalers
(c) Retailer – Small quantities
(d) Wholesaler – Last middleman in the distribution
Answer:
(d) Wholesaler – Last middleman in the distribution

Question 9.
From which of the following deposit holders can get overdraft facilities?
(a) Savings deposits
(b) Current deposits
(c) Recurring deposits
(d) Fixed deposits
Answer:
(b) Current deposits

Question 10.
The role of government in logistics management is through ……………………….
(a) Legislations
(b) Governance
(c) Transport
(d) Distribution
Answer:
(d) Distribution

Question 11.
The local area banks are promoting ………………………
(a) Rural savings
(b) Business savings
(c) Industrial development
(d) Agricultural development
Answer:
(a) Rural savings

Question 12.
Way bill is a document issued by ………………………
(a) Railway transport
(b) Air transport
(c) Road transport
(d) Water transport
Answer:
(c) Road transport

Question 13.
The types of development banks are ……………………….
(I) IFCI
(II) State Bank of India
(III) MUDRA Bank
(IV) Karur Vysya Bank
(a) (I) and (II)
(b) (II) and (IV)
(c) (I) and (III)
(d) (II) and (IV)
Answer:
(c) (I) and (III)

Question 14.
Auxiliaries to trade is also called as ……………………..
(a) Trade
(b) Advertisement
(c) Warehousing
(d) Aids to trade
Answer:
(d) Aids to trade

Question 15.
Consumers co-operation was first successful in …………………………
(a) England
(b) USA
(c) Swiss
(d) India
Answer:
(a) England

Question 16.
Match List – I with List – II and select the correct answer using the codes given below:

Answer:
Codes:

Question 17.
Who is the first middleman in the channel of distribution?
(a) Wholesaler
(b) Producer
(c) Retailer
(d) Customer
Answer:
(a) Wholesaler

Question 18.
Find out which is not advantage of partnership from the following:
(a) Easy formation
(b) Division of work
(c) Limited liability
(d) Easy dissolution
Answer:
(c) Limited liability

Question 19.
Presently IRDAI headquarters is in ……………………….
(a) Hyderabad
(b) Chennai
(c) Mumbai
(d) Delhi
Answer:
(a) Hyderabad

Question 20.
The aggregate income under fine heads is termed as ……………………….
(a) Gross total income
(b) Total income
(c) Salary income
(d) None of the above
Answer:
(b) Total income

PART – II

Answer any seven questions in which question No. 30 is compulsory: [7 × 2 = 14]

Question 21.
Who are middlemen?
Answer:
The term ‘middlemen’ refers to all those who are in the link between the primary producer and the ultimate consumer in the exchange of goods or service.

Question 22.
Mention any four examples of MNC?
Answer:
A multinational company is one which is incorporated in one country, but it may be operated in many countries. Examples: Coca – Cola, International Business Machine (IBM), Sony Corporation and Microsoft Corporation.

Question 23.
There are various hindrances in business. The manufacturers and consumers do not know each other. But the goods are purchased and sold by these two persons. What kind of hindrance is this? How is it removed?
Answer:
This is ‘hindrance of a person’. Manufacturers do not know the consumer, who is using the products, produced by him. This difficulty or hindrance is removed by the traders.

Question 24.
Give any three functions of warehouses?
Answer:

1. Storage
2. Price stabilization
3. Equalization of demand and supply

Question 25.
What is meant by private company?
Answer:
Private limited company is a type of company which is formed with minimum two shareholders and two directors, the minimum requirement with respect to authorised or paid up capital of Rs. 1,00,000 has been omitted by the Companies (Amendment) Act, 2015 w.e.f. 29^th of May, 2015.

Another crucial condition of a private limited company is that it by its articles of association restricts the right to transfer its shares and also prohibits any invitation to the public to subscribe for any securities of the company.

Question 26.
Is low taxes possible in co – operative society?
Answer:
Yes, Low taxes are possible in co – operative society because it is a non-profit enterprise, and government provides various exemptions and tax concessions.

Question 27.
Write any two advantages of water transport?
Answer:

1. It is considered as the cheapest mode of transport among the other modes of transport.
2. It is most suitable for heavy loads.

Question 28.
What are the non-corporate enterprises?
Answer:

1. Sole trading concern
2. Partnership firm
3. Joint Hindu family business

Question 29.
Mention any three differences between warehouse warrant and warehouse receipt?
Answer:

Question 30.
Mention any four kinds of partners?
Answer:

1. Active partner
2. Sleeping partner
3. Nominal partner
4. Partner in profits only

PART – III

Answer any seven questions in which question No. 40 is compulsory: [7 × 3 = 21]

Question 31.
List the five heads of income?
Answer:
The five heads of income are:

1. Income from‘Salaries’ [Sections 15 – 17];
2. Income from ‘House Property’ [Sections 22 – 27];
3. Income from ‘Profits and Gains of Business or Profession’ [Sections 28 – 44];
4. Income from ‘Capital Gains’ [Sections 45 – 55]; and
5. Income from ‘Other Sources’ [Sections 56 – 59].

Question 32.
Explain the concept of business?
Answer:
Business refers to any human activity undertaken on a regular basis with the object to earn profit through production, distribution, sale or purchase of goods and services.

Business activities are connected with raising, producing or processing of goods. Industry creates form utility to goods by bringing materials into the form which is useful for intermediate consumption or final consumption by consumers.

Question 33.
Explain any three features of Self – Help Group?
Answer:

1. The motto of every group members should be “saving first – credit latter”.
2. Self Help Group is homogeneous in terms of economic status.
3. The ideal size of a Self Help Group ranges between 10 and 20 members.

Question 34.
Explain the features of general stores?
Answer:
General Stores sell a wide variety of products under one roof, most commonly found in a local market and residential areas to satisfy the day – to – day needs of the customers residing in nearby localities. They remain open for long hours at convenient timings and often provide credit facilities to their regular customers.

Question 35.
How is it possible to maintain secrecy in sole proprietorship?
Answer:
In sole proprietorship, the trader is the sole owner of the business. Since he/she manages all the affairs of the business, the secrecy can be maintained easily.

Question 36.
What is the importance of bonded warehouses?
Answer:
Bonded warehouses are those warehouses which are licensed by government. It is used to accept the storage of imported goods which are cleared for non – payment of customs duty by the importer. Strict supervision and control is imposed by customs authorities on their functioning.

Question 37.
Describe any three advantages of international trade?
Answer:
Advantages of international trade:

1. Optimum use of natural resources: International trade operates on a simple principle that a country can produce more efficiently and trade the surplus production.
2. Economic development: International trade helps the developing countries in achieving rapid economic development by importing machinery, technology and talent.
3. Generation of employment: International business generates employment opportunities by assisting the expansion and growth of agricultural and industrial activities.

Question 38.
What are the advantages of MNC?
Answer:
1. Low Cost Labour:
MNC set up their facilities in low cost countries and produce goods/services at lower cost.

2. Quality Products:
The resource, experience and expertise of MNCs in the sphere of research and development enables the host country to establish its research and development system which helps it in producing quality goods and services at least possible cost.

Question 39.
India is an agricultural country. It has so many villages. Agriculture is inevitable to our country. What kind of insurance is needed to safeguard agriculture?
Answer:
Crop insurance is taken for safeguarding the agriculture. This policy is to provide financial support to farmers in case of a crop failure due to drought or flood. It generally covers all risks of loss or damages relating to production of rice, wheat, millets, oil seeds and pulses.

Question 40.
Why is balance of payment prepared?
Answer:
Balance of payments help in framing monetary, fiscal and trade policies of country. Government keenly observes balance of payment position of its important trade partners in making policy decisions. It reveals whether a country produces enough economic output to pay for its growth.

PART – IV

Answer all the questions: [7 × 5 = 35]

Question 41 (a).
Memorandum of Association is a legal document prepared to form and register a joint stock company. It reveals the powers and activities, the company is permitted to undertake. What are the contents of memorandum of Association? Explain?
Answer:
1. Name Clause:
The name clause requires you to state the legal and recognized name of the company. You are allowed to register a company name only if it does not bear any similarities with the name of an existing company.

2. Situation Clause:
The registered office clause requires you to show the physical location of the registered office of the company. You are required to keep all the company registers in this office in addition to using the office in handling all the outgoing and incoming communication correspondence.

3. Objective Clause:
The objective clause requires you to summarize the main objectives for establishing the company with reference to the requirements for shareholding and use of financial resources.

You also need to state ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives.

4. Liability Clause:
The liability clause requires you to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving.

You should show that shareholders are liable only their shareholding and/or to their commitment to contribute to the dissolution costs upon liquidation of a company limited by guarantee.

5. Capital Clause:
The capital clause requires you to state the company’s authorized share capital, the ’ different categories of shares and the nominal value (the minimum value per share) of the shares. You are also required to list the company’s assets under this clause.

6. Association Clause:
The association clause confirms that shareholders bound by the MOA are willingly associating and forming a company. You require seven members to sign an MOA for a public company and not less than two people for a MOA of a private company. You must conduct the signing in the presence of witness who must also append his signature.

[OR]

(b) Explain any five rights of partners?
Answer:

1. Right to take part in business: Every partner has a right to take part in the management of the business.
2. Right to be consultant: Every partner has the right to be consulted in all the matters concerning the firm. The decision of the majority will prevail in all the routine matters.
3. Right of access to books, record and document: Every partner has the right of access to all records and books of accounts, and to examine and copy them.
4. Right to share profit: Every partner is entitled to share the profits in the agreed ratio. If no profit-sharing ratio is specified in the deed, they must be shared equally.
5. Right to receive interest: A partner’ has the right to receive interest on loans advanced by him to the firm at the agreed rate, and where no rate is stipulated, interest @ 6% p.a. allowed.

Question 42 (a).
Explain the contents of prospectus?
Answer:
Prospectus means a document inviting the public to buy its shares or debentures. It also applies to advertisements inviting deposits from the public.

Contents:

1. The prospectus contains the main objectives of the company.
2. The name and address of the signatories of the Memorandum of Association.
3. The name, address and occupation of directors and managing directors.
4. The number and classes of shares and debentures.
5. The qualification share of directors.
6. The name and address of the vendors of any property acquired by the company.
7. Particulars about the directors, secretaries and the treasures and their remuneration.
8. The amount for the minimum subscription.
9. The estimated amount of preliminary expenses.
10. Name and address of the auditors, bankers and solicitors of the company,
11. Time and place where copies of balance sheets, profits and loss account and the auditor’s report may be inspected.

[OR]

(b) Write a note on Consumer Co – operative Society?
Answer:
A Consumer Co – operative Society is organized by consumers. It sells quality goods at better prices to the consumers.

Features:

1. It can sell the goods at a lesser price rather than the traditional retail stores.
2. They also supply essential goods through Public Distribution System (PDS).
3. Nationally, the most widely used co – operative form is the credit union.
4. Credit unions are essentially co – operatives of people that use banking services.
5. It purchases goods directly from the manufacturers, which helps to fix the lower price. – Example – Students Co – operative Stores, Supermarkets, etc.

Question 43 (a).
Goods were exchanged for goods prior to invention of money. Each party must have surplus goods for exchange. What does it mean? What are the constraints of that system?
Answer:
The system in which the goods were exchanged for goods was called ‘barter system’. The barter system has many constraints. They are:

1. Lack of double coincidence of Wants: Unless two persons who have surplus have the demand for the goods possessed by each other, barter could not materialize. If this “coincidence of wants” does not exist, Barter cannot take place.
2. Non – existence of common measure of value: Barter system could not determine the value of commodities to be exchanged as they lacked commonly acceptable measures to evaluate each and every commodity.
3. Lack of direct contact between producer and consumers: It was not possible for buyers and sellers to meet face to face in many contexts for exchanging the commodities for commodities.
4. Lack of surplus stock: Absence of surplus stock was one of the impediments in barter system. If the buyers and sellers do not have surplus then no barter was possible.

[OR]

(b) Describe any five objectives of business?
Answer:
1. Economic Objectives:
Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objective, which includes creation of customers, regular innovations and best possible use of available resources.

2. Social Objectives:
Social objective are those objectives of business, which are desired to be achieved for the benefit of the society. Since business operates in a society by utilizing its scarce resources, the society expects something in return for its welfare.

3. Organizational Objectives:
The organizational objectives denote those objectives an organization intends to accomplish during the course of its existence in the economy like expansion and modernization, supply of quality goods to consumers, customers’ satisfaction, etc.

4. Human Objectives:
Human objectives refer to the objectives aimed at the well – being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped and deprived of proper education and training.

The human objectives of business may thus include economic well – being of the employees, social and psychological satisfaction of employees and development of human resources.

5. National Objectives:
Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations.

Question 44 (a).
Banks can be classified as follows:

1. Based on the functions of banks
2. Based on the status given by RBI
3. Based on the ownership pattern

What are the banks based on functions or organization? Explain any five kinds of banks.
Answer:
1. Commercial banks:
Banks which accept deposits from the public and grant loans to traders, individuals, agriculture, industries, transport, etc. in order to earn profit. Their lending is in comparatively small amounts and mostly for short and medium period. e.g., State Bank of India.

2. Development Banks:
Huge finance required for investment, expansion and modernisation of big industries and others are granted by a separate type of banks called development Banks. They are also called industrial banks, e.g., IFCI, SIDBI.

3. Co – operative Banks:
All Co – operative banks in India are owned by its customers or members who are farmers, small traders and others. Co – operative banks in India are either urban based or rural based. e.g.,NAFED, Tamil Nadu State Apex Co-operative Bank – Head Office, Chennai.

4. Foreign Banks:
Banks which have registered office in a foreign country and branches in Ipdia are called foreign banks, e.g., Bank of America – USA.

5. Regional Rural Banks (RRBs):
The RRBs were formed under the Regional Rural Bank Act 1976, jointly by the Central Government, State Government, and a sponsor bank. e.g., Pandian Grama Bank.

[OR]

(b) In India Joint Hindu Family Business is a distinct form of organisation. A person can become member by his birth. What are the features of Joint Hindu Family Business? Explain any five features?
Answer:
Features of Joint Hindu Family Business are:

1. Governed by Hindu Law
2. Management
3. Membership by birth
4. Liability
5. Permanent existence
6. Implied authority of Karta
7. Minor as a co – parcener
8. Dissolution

Explanation:

1. Governed by Hindu law: The business of the Joint Hindu Family is controlled and managed by the hindu law.
2. Membership by birth: The membership of the family can be acquired only by birth. As soon as a male child is bom in the family, the child becomes a member.
3. Liability: Except the Kartha, the liability of all other members is limited to their shares in the business.
4. Minor also as a co-parcener: In a Joint Hindu Family firm even a new bom baby can be a co-parcener.
5. Dissolution: It can be dissolved only at the will of the members of the family.

Question 45 (a).
Explain any five types of Cooperative societies?
Answer:
Types of Co – operative societies:

1. Consumers Co – operative:
Consumer Co – operatives are organized by consumers that want to achieve better prices or quality in the goods or services they purchase. In contrast to traditional retail stores or service providers, a consumer co – operative exists to deliver goods or services rather than to maximize profit from selling those goods or services.

2. Producers Co – operative:
Producer co – operatives are created by producers and owned and operated by producers. Producers can decide to work together or as separate entities to help increase marketing possibilities and production efficiency.

3. Marketing Co – operative:
Co – operative marketing societies are associations of small producers formed for the purpose of marketing their produce. The marketing co-operatives perform certain marketing functions such as grading, warehousing, advertising etc.

4. Credit Co – operative:
Cooperative credit societies are societies formed for providing short-term financial help to their members. Agriculturists, artisans, industrial workers, salaried employees, etc., form these credit societies.

5. Housing Co – operative:
These co – operative housing societies are meant to provide residential accommodation to their members on ownership basis or on rent.

People who intend to build houses of their own join together and form housing societies. These societies advance loans to members, repayable over a period of 15 to 20 years.

[OR]

(b) Partnership is formed by an agreement. It may be oral or written. The agreement is called partnership deed. Explain the contents of partnership deed.
Answer:
The contents of partnership deed include:

1. Name: Name of the Firm.
2. Nature of Business: Nature of the proposed business to be carried on by the partners.
3. Duration of Partnership: Duration of the partnership business whether it is to be run for a fixed period of time or whether it is to be dissolved after completing a particular venture.
4. Capital Contribution: The capital is to be contributed by the partners. It must be remembered that capital contribution is not necessary to become a partner for, one can contribute his organising power, business acumen, managerial skill, etc., instead of capital.
5. Withdrawal from the Firm: The amount that can be withdrawn from the firm by each partner.
6. Profit/Loss Sharing: The ratio in which the profits or losses are to be shared. If the profit sharing ratio is not specified in the deed, all the partners must share the profits and bear the losses equally.
7. Interest on Capital: Whether any interest is to be allowed on capital and if so, the rate of interest.
8. Rate of Interest on Drawing: Rate of interest on drawings, if any.
9. Loan from Partners: Whether loans can be accepted from the partners and if so the rate of interest payable thereon.
10. Account Keeping: Maintenance of accounts and audit.
11. Salary and Commission to Partners: Amount of salary or commission payable to partners for their services. (Unless this is specifically provided, no partner is entitled to any salary).
12. Retirement: Matters relating to retirement of a partner. The arrangement to be made for paying out the amount due to a retired or deceased partner must also be stated.
13. Goodwill Valuation: Method of valuing goodwill on the admission, death or retirement of a partner.
14. Distribution of Responsibility: Distribution of managerial responsibilities. The work that is entrusted to each partner is better stated in the deed itself.
15. Dissolution Procedure: Procedure for dissolution of the firm and the mode of settlement of accounts thereafter.
16. Arbitration of Dispute: Arbitration in case of disputes among partners. The deed should provide the method for settling disputes or difference of opinion. This clause will avoid costly litigations.

Question 46 (a).
Explain the various primary functions of commercial banks?
Answer:
The primary functions of a commercial bank are of three types. They are:

(I) Accepting Deposits – The basic deposit accounts offered by commercial banks are listed below:

1. Demand Deposits: These deposits are repayable on demand on any day. These consist of –

• Savings Deposits: General public deposit their savings into this account. This account can be opened in one individual’s name or more than one name.
• Current Deposits: This account is suitable for business institutions. Individuals too . can open this account. A higher minimum balance should be kept in this account.

2. Time Deposits: These are repayable after a period. These include –

• Fixed Deposits (FD): Certain amount is deposited for a fixed period for a fixed rate of interest.
• Recurring Deposits (RD): Certain sum is deposited into the account every month for one year or five years or the agreed period. Interest rate is more than savings deposits and almost equal to fixed deposits.

(II) Granting Loans and Advances: Commercial banks lend money in order to earn interest.

1. Advances

• Overdraft: It is a credit facility extended mostly to current account holding business community customers.
• Cash Credit: It is a secured credit facility given mostly to business institutions. Stock in hand, raw materials, other tangible assets, etc., are provided as collateral.
• Discounting of Bills: Business customers approach banks to discount the commercial bills of exchanges and provide money.

2. Loans – Short term and medium term loans are provided by commercial banks against eligible collaterals to business concerns. Examples – housing loan, consumer loan, vehicle loan, educational loan, jewel loan, etc.

3. Creation of Credit – Apart from the currency money issued by the RBI, the credit money in circulation created by commercial banks influence economic activities of a country to a large extent. Credit money of commercial banks is far greater in volume than the currency money.

[OR]

(b) What are the advantages of warehousing?
Answer:

1. It safeguards the stock for the merchants who do not have storage place.
2. Warehouses reduce the distribution cost of the traders by storing the goods in bulk and allow the trader to take the goods in small lots to his shop.
3. It helps in selection of channel of distribution. The producer will prefer whether to appoint a wholesaler or retailer.
4. It assists in maintaining the continuous sale and avoid the possibilities of “Out of Stock”.
5. It creates employment opportunities for both skilled and unskilled workers to improve their standard of living.

Question 47 (a).
Explain the features of a government company?
Answer:
The features of a government company are:
1. Registration Under the Companies Act:
A Government company is formed through registration under the Companies Act, 1956; and is subject to the provisions of this Act, like any other company.

However, the Central Government may direct that any of the provisions of the Companies Act shall not apply to a Government company or shall apply with certain modifications.

2. Executive Decision of Government:
A Government, company is created by an executive decision of the Government, without seeking the approval of the Parliament or the State Legislature.

3. Separate Legal Entity:
A Government company is a legal entity separate from the Government. It can acquire property; can make contracts and can file suits, in its own name.

4. Whole or Majority Capital Provided by Government:
The whole or majority (at least 51%) of the capital of a Government company is provided by the Government; but the revenues of the company are not deposited into the treasury.

5. Majority of Government Directors:
Being in possession of a majority of share capital, the Government has authority to appoint majority of directors, on the Board of Directors of a government company.

[OR]

(b) What are the advantages of co – operatives? Explain any five?
Answer:
Advantages of co – operatives:
1. Voluntary organisation:
The membership of a co – operative society is open to all. Any person with common interest can become a member. The membership fee is kept low so that everyone would be able to join and benefit from co – operative societies.

2. Easy formation:
Co – operatives can be formed much easily when compared to a company. Any 10 members who have attained majority can join together for forming a co – operative spciety by observing simple legal formalities.

3. Democracy:
A co – operative society is run on the principle of ‘one man one vote’. It implies that all members have equal rights in managing the affairs of the enterprises.

4. Equal distribution of surplus:
The surplus generated by the co – operative societies is distributed in an equitable manner among members. Therefore all the members of the co – operative society are benefitted.

5. Limited liability:
The liability of the members in a co – operative spciety is limited to the extent of their capital contribution. They cannot be personally held liable for the debts of the society.

Students can Download Tamil Nadu 11th Commerce Model Question Paper 1 English Medium Pdf, Tamil Nadu 11th Commerce Model Question Papers helps you to revise the complete Tamilnadu State Board New Syllabus, helps students complete homework assignments and to score high marks in board exams.

TN State Board 11th Commerce Model Question Paper 1 English Medium

General Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II, III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
   These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.

Time: 2:30 Hours
Maximum Marks: 90

PART – I

Choose the correct answer. Answer all the questions. [20 × 1 = 20]

Question 1.
………………….. is considered as an artificial person.
(a) Sole trader
(b) Joint Hindu family business
(c) Joint Stock company
(d) Co – operative societies
Answer:
(c) Joint Stock company

Question 2.
A contract with or by a minor is a ……………………
(a) Valid contract
(b) Void contract
(c) Voidable contract
(d) Voidable at the option of either party
Answer:
(b) Void contract

Question 3.
The largest commercial bank of India is ……………………….
(a) ICICI
(b) SBI
(c) PNB
(d) RBI
Answer:
(b) SBI

Question 4.
Which one of the following is correctly matched?
(a) Overdraft – More than one person
(b) RBI – Lender of last resort
(c) Partnership – Motor transport
(d) Life Insurance – Current Account
Answer:
(b) RBI – Lender of last resort

Question 5.
Hindrance of risk is removed by ……………………..
(a) Transport
(b) Warehouse
(c) Insurance
(d) None of these
Answer:
(c) Insurance

Question 6.
A mador disadvantage of a sole proprietorship is ……………………..
(a) Limited liability
(b) Unlimited liability
(c) Easy formation
(d) Quick decision
Answer:
(b) Unlimited liability

Question 7.
Match the List – I with List – II and select the correct answer using the codes given below:

Answer:
Codes:

Question 8.
Trade and Commerce was common to ……………………. dynasty.
(a) Pallava
(b) Chola
(c) Pandiya
(d) Chera
Answer:
(c) Pandiya

Question 9.
The external source of funds are ……………………
(I) Shares and debentures
(II) Retained earnings
(III) Collection from receivables
(IV) Borrowings from banks
(a) (I) and (II)
(b) (II) and (III)
(c) (I) and (IV)
(d) (I) and (III)
Answer:
(c) (I) and (IV)

Question 10.
What kind of tax is the GST?
(a) Direct tax
(b) Indirect tax
(c) On the type of goods and services
(d) None of these
Answer:
(b) Indirect tax

Question 11.
In 1969, there were …………………….. private banks which were nationalised.
(a) 19
(b) 14
(c) 20
(d) 15
Answer:
(b) 14

Question 12.
Wholesalers deal in quantity of goods.
(a) Small
(b) Large
(c) Medium
(d) Limited
Answer:
(b) Large

Question 13.
The persons who enter into partnership are collectively called as …………………..
(a) Partners
(b) Shareholders
(c) Owners
(d) Firm
Answer:
(d) Firm

Question 14.
Producers co – operatives are established and operated by …………………….
(a) Producers
(b) Consumers
(c) Traders
(d) Wholesalers
Answer:
(a) Producers

Question 15.
ONGC is a public enterprise. Identify the form of organisation.
(a) Public corporations
(b) Departmental undertaking
(c) Multinational corporations
(d) Government company
Answer:
(a) Public corporations

Question 16.
…………………….. is a document acknowledging the receipt of goods by a carrier.
(a) Waybill
(b) Consignment note
(c) Charter party
(d) Bill of lading
Answer:
(a) Waybill

Question 17.
Which company has minimum paid up capital of Rs 5,00,000?
(a) Government company
(b) Public company
(c) Private company
(d) Foreign company
Answer:
(c) Private company

Question 18.
From the following which is not a direct tax?
(a) Income tax
(b) Wealth tax
(c) GST
(d) Capital gains tax
Answer:
(c) GST

Question 19.
Business units can reduce expenditure by outsourcing front office work like ………………………
(a) Paperwork
(b) File work
(c) Billing
(d) Manufacturing
Answer:
(b) File work

Question 20.
The year in which income earned is known as …………………………
(a) Assessment year
(b) Previous year
(c) Light year
(d) Calendar year
Answer:
(b) Previous year

PART – II

Answer any seven questions in which question No. 30 is compulsory: [7 × 2 = 14]

Question 21.
Define commerce?
Answer:
According to Evelyn Thomas, “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products”.

Question 22.
What is unlimited liability?
Answer:
Unlimited liability is a feature of sole trading business. When the sole trader’s business assets are not sufficient to pay off the business debts, he has to pay from his personal property.

Question 23.
Franchising is the practice of the right to use a firm’s business model and brand for a prescribed period of time. Who are the parties involved in franchising?
Answer:
There are two parties to a franchising agreement. They are:

1. Franchisor – The owner of a business who provides the franchise.
2. Franchisee – The individual who gets the right to operate the business or use the trademark.

Question 24.
Give any three functions of warehouses?
Answer:

1. Storage
2. Price stabilization
3. Equalization of demand and supply

Question 25.
A company is a large scale organization. Compared to sole trader and partnership organization, more profit can be received from the company. Mention any two advantages of a company?
Answer:
1. Large Capital:
A company can secure large capital compared to a sole trader or partnership. Large amount of capital is necessary for conducting business on a large scale.

2. Limited Liability:
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him.

Question 26.
Give any two advantages of MNC?
Answer:
1. Low Cost Labour:
MNC set up their facilities in low cost countries and produce goods/services at lower cost.

2. Quality Products:
The resource, experience and expertise of MNCs in the sphere of research and development enables the host country to establish its research and development . system which helps it in producing quality goods and services at least possible cost.

Question 27.
List out any four types of indirect taxes levied in India?
Answer:

1. CGST
2. SGST
3. UGST
4. IGST

Question 28.
It was launched by the RBI in 2013. The transactions are settled on real time basis. What does it mean? Write a short note about this?
Answer:
Real Time Gross Settlement Systems (RTGS) was launched by the RBI in 2013. The transactions are settled on real time basis. Gross settlement means the transaction is settled between one bank and another bank without adding any other transactions.

Question 29.
State the different types of Public Sector Enterprises?
Answer:

1. Coal India Ltd
2. Gas Authority of India Ltd
3. Tamil Nadu State Transport Corporation
4. Steel Authority of India Ltd

Question 30.
Who is a sleeping partner?
Answer:
A sleeping partner is the one who contributes capital and shares in the profits or losses of the firm but does not take part in the management of the business.

PART – III

Answer any seven questions in which question No. 40 is compulsory: [7 × 3 = 21]

Question 31.
Explain the features of general stores?
Answer:
General Stores sell a wide variety of products under one roof, most commonly found in a local market and residential areas to satisfy the day – to – day needs of the customers residing in nearby localities.

They remain open for long hours at convenient timings and often provide credit facilities to their regular customers.

Question 32.
Explain the characteristics of business?
Answer:
The essential characteristics of business are as follows:

1. Production or Procurement of Goods: Goods must be produced or procured in order to satisfy human wants.
2. Sale, Transfer or Exchange: There must be sale or exchange of goods or services.
3. Profit Motive: An important feature of business is profit motive. Business is an economic activity by which human beings make their living.
4. Dealing in Goods and Services: Goods produced or procured may be consumer goods like cloth, pen, brush, bag, etc., or producer-goods like plant and machinery.

Question 33.
All the affairs of a Joint Hindu Family are controlled by the manager. The other members are co-parceners. What is the other name of the manager in Joint Hindu Family? How does he control the business?
Answer:
The other name of the manager in the Joint Hindu family is ‘Karta’. The Karta is the senior most male member of the family. He controls and manages the business of the Joint Hindu family.

Question 34.
Income tax provides the method to compare the total income of an assessee. It is divided into five heads. What are the five heads of incomp under total income?
Answer:
The five heads of income are:

1. Income from ‘Salaries’ [Sections 15 – 17];
2. Income from ‘House Property’ [Sections 22 – 27];
3. Income from ‘Profits and Gains of Business or Profession’ [Sections 28 – 44];
4. Income from ‘Capital Gains’ [Sections 45 – 55]; and
5. Income from ‘Other Sources’ [Sections 56 – 59]

Question 35.
Generally, the liability of the partners in a firm is unlimited. But in service sector, the liability is limited. What is the name of the partnership? Write a short note about this?
Answer:
The name of the partnership is Limited Liability Partnership. It is popular in service sector and in the small scale enterprises. Limited liability partnership means for paying the debts of the firm, only the assets of the business will be utilised. Example – cost accountants firm, lawyers, engineers, etc.

Question 36.
Mention any three features of government company?
Answer:
Features of government company: .

1. Registrations under the companies Act: A government company is formed under the Companies Act 1956.
2. Own staff: A government company has its own staff except government officials who are sent to it on deputation.
3. Majority of the capital provided by the government: The whole or majority (at least 51%) of the capital of a government company is provided by the government.

Question 37.
What is bill of lading?
Answer:
Bill of Lading is a document containing the terms and conditions of the contract of carriage. It is issued by the shipping company and signed by the captain of the ship.

It acknowledges the receipt of the goods described in it on board the ship. It also serves as an official receipt of goods. It is a document of title of goods.

Question 38.
What do you mean by the concept of business ethics?
Answer:
Business exists to supply goods and services to the people from social point of view but from individual point of view, the primary objective of any business unit is to make profit.

The individual objective should not be in conflict with societal objective. These two objectives normally contradict each other, as one business enterprise may be good in individual objective and bad at social objective and vice versa.

Question 39.
Define Retailer?
Answer:
According to S. Evelyn Thomas “the retailer is the last of the many links in the economic chain whereby the consumer’s wants are satisfied smoothly and efficiently by retailers”.

Question 40.
Write any three differences between Direct taxes and Indirect taxes?
Answer:

PART – IV

Answer all the questions: [7 × 5 = 35]

Question 41 (a).
What are the features of public corporation? Explain any five?
Answer:
1. Special Statute:
A public corporation is created by a special Act of the Parliament or the State Legislature. The Act defines its powers, objectives, functions and relations with the ministry and the Parliament (or State Legislature).

2. Separate Legal Entity:
A public corporation is a separate legal entity with perpetual succession and common seal. It has an existence, independent of the Government. It can own property; can make contracts and file suits, in its own name.

3. Capital Provided by the Government:
The capital of a public corporation is provided by – the Government or by agencies controlled by the government. However, many public corporations have also begun to raise money from the capital market.

4. Financial Autonomy:
A public corporation enjoys financial autonomy. It prepares its own budget; and has authority to retain and utilize its earnings for its business.

5. Management by Board of Directors:
Its management is vested in a Board of Directors, appointed or nominated by the Government. But there is no Governmental interference in the day – to – day working of the corporation.

[OR]

(b) Explain the organizational structure of RBI?
Answer:
The head office of the RBI is situated in Mumbai. This central office has 33 departments in 2017. It has four zonal offices in Mumbai, Delhi, Calcutta and Chennai functioning under local boards with deputy governors as their heads. It also has 19 regional offices and 11 sub – offices (2017).

The RBI is governed by a central board of directors. The 21 member board is appointed by the Qovemment of India. It consists of:

1. One Governor and four deputy governors appointed for a period of four years.
2. Ten Directors from various fields.
3. Two Government officials.
4. Four Directors – one each from local boards.

Question 42 (a).
Sole proprietorship is a form of business organization in which an individual introduces his own capital, uses his own skill and intelligence in the management of the business. Explain the characteristics of a sole trader?
Answer:
Business owned and controlled by a single person is known as sole trading business.
The following are the characteristics of a sole trader:

1. Ownership by one man: This is owned by single person. The sole trader contributes the required capital.
2. Freedom of work and Quick decisions: The sole trader is the owner, so he need not consult with others. Hence he can take quick decision.
3. Unlimited liability: When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.
4. Enjoying Entire Profit: All the benefits earned by the sole trader is enjoyed by him alone.
5. Absence of Government Regulation: A sole trading concern is free from Government regulations. No legal formalities are to be observed in its formation and management,
6. Maintenance of Secrecy: Since the trader manages all the affairs of the business, the secrecy can be maintained easily.

[OR]

(b) Partnership is the relation between persons who have agreed to share the profits of a business carried on by all. It is the result of an agreement. Closing of business is also by an agreement. It is called Dissolution of Partnership. Explain the dissolution of partnership firm without the order of the court?
Answer:
Dissolution of a partnership firm takes place in two ways:

1. Without the order of the court and
2. By the order of the court A.

Without the order of the court:

1. By agreement or mutual consent:
A firm may be dissolved when all the partners agree to close the affairs of the firm.

2. By insolvency of all the partners but one:
If any one of the partners is adjudged as insolvent, it is necessary to dissolve the firm.

3. When the objective becomes illegal:
When the business carried on by the partnership becomes illegal, the partnership firm is automatically dissolved.

4. By notice of dissolution:
In the case of partnership at will, if any partner gives in writing to close the firm, the firm will be dissolved.

5. On certain contingencies:

• On the expiry of the period of the firm.
• On the completion of a business.
• On the death of a partner.
• On the retirement of a partner.
• On the insolvency of a partner.

Question 43 (a).
Explain the various types of warehouses?
Answer:
1. Private Warehouses:
Private warehouses are built and owned by private business enterprises in order to store the products produced by them.

2. Government Warehouses:
They are created and operated by the Government to implement the programmes of the Government.

3. Public Warehouse:
It is open for public at large. Most of the business organisations, especially small and medium scale units cannot afford to have their own warehouses.

4. Co – operative Warehouses:
There are warehouses owned and managed by the marketing co – operative societies or agricultural co-operative societies. They are setup to provide warehousing facilities to their members.

5. Bonded Warehouses:
Bonded warehouses are those warehouses, which are licensed by the government to accept storage of imported goods which are not cleared due to non¬payment of customs duty by the importer.

[OR]

(b) Insurance is a contract between the insurer and the insured under which the insurer undertakes to compensate-the insured for the loss arising from the risk insured. Explain the principles of insurance?
Answer:
1. Utmost Good Faith:
According to this principle, both insurer and insured should enter into contract in good faith. Insured should provide all the information that impacts the subject matter. Insurer should provide all the details regarding insurance contract.

2. Insurable Interest:
The insured must have an insurable interest in the subject matter of insurance. Insurable interest means some pecuniary interest in the subject matter of the insurance contract.

3. Indemnity:
Indemnity means security or compensation against loss or damages. In insurance, the insured would be compensated with the amount equivalent to the actual loss and not the amount exceeding the loss. This principle ensures that the insured does not make any profit out of the insurance. This principle of indemnity is applicable to property insurance alone.

4. Causa Proxima:
The word ‘Causa proxima’ means ‘nearest cause’. According to this principle, when the loss is the result of two or more cause, the proximate cause, i.e. the direct. The direct, the most dominant and most effective cause of loss should be taken into consideration. The insurance company is not liable for the remote cause.

5. Contribution:
The same subject matter may be insured with more than one insurer then it is known as ‘Double Insurance’. In such a case, the insurance claim to be paid to the insured must be shared on contributed by all insurers in proportion to the sum assured by each one of them.

6. Subrogation:
Subrogation means ‘stepping the shoes on others’. According to this principle, once the claim of the insured has been settled, the ownership right of the subject matter of insurance passes on to the insurer.

7. Mitigation:
In case of a mishap, the insured must take off all possible steps to reduce or mitigate the loss or damage to the subject matter of insurance.

Question 44 (a).
Write short notes on:

1. Owner’s funds
2. Borrowed funds

Answer:
1. Owner’s Funds:
Owner’s funds mean funds which are provided by the owner of the enteiprises who may be an individual, or partners or shareholders of a company.

The profits reinvested in the business (ploughing back of profit or retained earnings) come under owner’s funds. These funds are not required to be refunded during the life time of business enterprise. It provides the owner the right to control the management of the enterprise.

2. Borrowed Funds:
The term ‘borrowed funds’ denotes the funds raised through loans or borrowings. For example, debentures, loans from banks and financial institutions, public deposits, trade credit, lease financing, commercial papers, factoring, etc., represent borrowed funds.

• These borrowed sources of funds provide specific period before which the fund is to be returned.
• Borrower is under legal obligation to pay interest at given rate at regular intervals to the lender.
• Generally borrowed funds are obtained on the security of certain assets like bonds, land, building, stock, vehicles, machinery, documents of title to the goods, and the like.

[OR]

(b) What is meant by consumers co-operative store? Explain its merits in brief?
Answer:
A consumers co-operative store is a retail organisation owned, managed and controlled by the
consumers themselves to obtain products of daily use at reasonable low prices. Its objective is to eliminate profits to middlemen by establishing a direct contact with the manufacturers.

People belonging to middle and low income groups, at least 25 persons have to come together to form a voluntary association and get it registered under the Cooperative Societies Act.

The capital of a co-operative store is raised by issuing shares to members. The management of the store is democratic and entrusted to an elected managing committee, where “one man one vote” is the rule.

The co – operative stores are very famous in Tamil Nadu. For example, Kamadhenu and Chinthamani co-operative supermarkets in Chennai, Karpagam in Vellore, etc. .

Question 45 (a).
Describe the agency functions of commercial banks?
Answer:
Banks act as agents of customers and provide certain services:

1. Transfer of Funds:
Banks issue demand drafts, bankers’ cheques, travelers’ cheques, etc. and help in transfer of funds from one place to another.

2. Periodic Payment of Premiums, Rent, etc:
After instruction from the customers, banks undertake the monthly payment of insurance premium, rent, telephone bills, etc., from the accounts of customers.

3. Collection and Payment of Cheques:
On behalf of customers, bank collect the cheques deposited into the accounts of customers from other banks and deposit cash in the customers’ accounts.

4. Acting as Executors, Trustees and Attorneys:
Banks act as executors of will of the customers and implement their will after their death.

5. Conduct Share Market transactions:
A Demat account should be opened with Depository Participant and that demat account should be linked with savings bank account by the customer.

6. Preparation of Income Tax Return:
Banks prepare the annual income tax return on behalf of the customers and provide income tax related advice to them.

7. Dealing in Foreign Exchange:
Banks buy and sell foreign currencies on behalf of customers.

8. Acting as Correspondent:
Banks act as correspondent of customers and receive travel, ticket, passport, etc.

[OR]

(b) Explain the services rendered by retailers to consumers?
Answer:
1. Regular Supply of Goods:
Retailers maintain a ready stock of various products of different manufacturers for sale to consumers.

2. New Products Information:
The retailers provide important information about the new arrival of products through their personal.

3. Credit Facilities:
Sometimes retailers provide credit facilities to their customers and enable them to increase their level of consumption.

4. Wide Selection:
Retailers generally keep stock of a variety of products of different manufacturers.

5. Miscellaneous Services:

• Retailers provide free door delivery services to the customers.
• They provide after sale service to customers.
• They allow cash discounts on their sales.

Question 46 (a).
Write a note on e-commerce models?
Answer:
1. Business to customers (B2C):
This is fastest growing segment in e-commerce space. Under this model, business concern sells directly to consumers.

2. Business to Business (B2B):
Under the model, business concerns transact with one another through internet. For instance, Snapdeal, Flipkart, Alibaba, Indiamart, Trade India.com etc.

3. Consumer to consumer (C2C):
Under this model, customers sell directly to other customers through online classified advertisement or through auction or through mobile or through market places.

Example, Indian ventures in C2C are Kraftly App (buying and selling anythings) which deals in handmade products of a wide range. Onceagainstore. com is a website that buys pre-owned women’s fashion products. Other players are Quikr, OLX, ebay, etc.

4. Customer to Business (C2B):
This model is reverse to auction model. Products like • automobile, electronic items, furniture and similar product are traded by customer through websites. Naukri.com and Monster.com are examples of Indian companies operating in this domain.

5. Business to Government (B2G):
This model envisages selling products and services by business consumer to Government organization. For instance TCS operates the passport application process for the Government of India as part off-line process.

[OR]

(b) Explain any four personal investment avenues?
Answer:
1. Public Provident Fund (PPF):
It is the safest long – term investment option for the investors in India. It is totally tax- free. PPF account can be opened in bank or post office. The money deposited cannot be withdrawn before 15 years and an investor can earn compound interest from this account.

However the investor can extend the time frame for the next five years if the investor does not opt to withdraw the amount matured for payment at maturity date. PPF investor can take loan against PPF account when he/she experiences financial difficulties.

2. Mutual Funds:
An individual investor who wants to invest in equities and bond With a balance of risk and return generally can invest in mutual funds. Nowadays people invest in stock markets through a mutual fund. Systematic investment plan is one of the best investment options in India.

3. Direct Equity or Share Purchase:
An individual can opt for investment in shares. But he has to analyse the market price of various shares traded in stock exchange, reputation of the company, consistency in the payment of dividend, the nature of the project undertaken by the company, growth prospects of industry in which a company is operating, before investing in shares. If the investment is made for a long time, it may yield good return.

4. Real Estate Investment:
Real estate is one of the fastest growing sectors in India. Buying a flat or plot is supposed to be the best decision amongst the investment options. The value of the real asset may increase substantially depending upon the area of location and other support facilities available therein.

Question 47 (a).
What are the functions of wholesalers?
Answer:
Following are the functions of wholesalers:

1. Collection of Goods: Wholesaler collects the goods from manufacturers or producers in bulk.
2. Storage of Goods: Wholesaler collects and stores them safely in warehouses, till they are sold out.
3. Distribution: Wholesaler sells goods to different retailers. Thus he performs the function of distribution.
4. Financing: Wholesalers provide financial support to producers and manufacturers by providing money in advance to them.
5. Risk Taking: Wholesaler buys finished goods from the producer and keeps them in the warehouses till the time they are sold and assumes the risk arising from price, spoilage of goods, and changes in demand.
6. Grading, Packing and Packaging: Wholesaler classifies the goods into different categories.
7. Providing Information: Wholesalers provide valuable information to retailers and producers.
8. Transportation: A wholesaler arranges for the transport of goods from producers to his warehouse and from the warehouse to retailer.

[OR]

(b) Explain the characteristics of a supermarket?
Answer:

1. Supermarkets are generally situated at the main shopping centres.
2. The goods kept on racks with clearly labelled price and quality tags in such stores.
3. The customers move into the store to pickup goods of their requirements, bring them to the cash counter, make payment and take home delivery.
4. The goods are sold on cash basis only. No credit facilities are made available.
5. Supermarkets are organized on departmerftal basis.
6. It requires huge investment.