BAL BHARATI PUBLIC SCHOOL, PITAMPURA, DELHI – 110034 CLASS – 9 SUBJECT– ECONOMICS TERM I People as Resource Economic Activities: The activities which result in the production of goods and services and value to the national income are called economic activities. Disguised Unemployment:It happens when the number of persons employed in a task is more than what is required ; If these extra persons are removed, there is no adverse effect on the output. Educated Employment: It occurs when people with formal education, upto some minimum standard ( generally upto secondary school) , fail to find a productive job. Gross National Product or National Income:Refers to the sum total of the money value of all final goods and services produced in an economy during a year. Market Activity:That part of the activity which produces such goods or services that are sold and purchased in the market, and the provider of the service gets paid for it. Nonmarket Activity: The performer of this type of economic activity produces primarily for self – consumption. OwnAccount Production: The produced asset is not sold in the market; it is produced for self consumption, e.g. ,a house. Primary Sector :It consists of all those activities which are based on natural resources, such as agriculture, forestry, animal husbandry, fisheries, poultry farming, and mining. Seasonal Unemployment:It happens when people are not able to find jobs during some months of the year. Secondary Sector: It consists of all those activities which transform the shape of nature based raw materials into some useful objects, e.g. quarrying and manufacturing. Tertiary Sector:It consists of all those activities which are concerned with the distribution of goods and services so that these reach the final consumers, e.g. trade, transport, communication, tourism, health and insurance. Unemployment:A situation in which a person is willing to work at current wage rate, but doesn’t get a job. Vicious Cycle:One bad event results in another negative event, which in turn perpetuates the first event and so on; it becomes difficult to identify which is the cause and which is the effect of the cycle. Virtuous Cycle:Onegood event leading to another; this, in turn, further promotes the first positive event, which, in turn, once again promotes the second positive event and so on. Q1 What is human capital formation? How is it different from Physical Capital formation? Human capital formation refers to addition to the stock of human capital in the country. This addition takes the form of investment in education, training and health care. Human capital formation is both similar to and different from physical capital formation. => Human capital formation adds to the productive capacity and generation of income; physical capital formation also performs the same function. =>Human capital formation adds to the stock of human skills and knowledge. Physical capital formation adds to the stock of tools equipments, machinery and buildings in an economy. Q2 When do “people” become a resource? Human beings without any ability to work are known as simple or ordinary people but given proper education, skills, training and proper health care, the same human beings constitute human capital; it is an indispensable resource which constitutes to a nation’s growth and welfare.
Q3 What do you understand by “people as a resource”?The term People as a resource refers to population as asset for the economy. It is a way of referring to a country’s working people in terms of their exciting productive skills and abilities. Q4 What is the role of education in human capital formation? Education plays an important role in human capital formation. Educated people earn higher incomes on account of higher productivity which aids to the growth of the economy. Society as a whole also gains indirect ways from educated population. The advantage of a more educated population spreads to those who are not directly educated. Population turns into a productive set as a result of education. Q5 Does investment in human capital yield any return?Yes investment human capital through education, training, medical care, yield a return in the form of higher incomes and higher productivity. Q6 Name the factors on which quality of population depends.The quality of population depends upon the => literacy rate =>Health of a person indicated by life expectancy =>Skill formation Q7 Define infant mortality rate (IMR)Infant mortality rate is the death rate of a child under one year of age. Q8 Which age group constitutes the work force population?The workforce population includes people from 15 59 years. Q9 Define life expectancy.Life expectancy is a statistical measure of the average length of survival of a living thing. It is often calculated separately for differing gender and geographic location. Popularly it’s most often construed to mean the life expectancy at birth for a given human population, which is the same as the expected age at death. However, technically, life expectancy means the expected time remaining to live, and it can be calculated for any age. Q10 Is there any difference b/w unemployment in rural and urban areas?Yes the nature of the unemployed differs in rural and urban area. In case of rural areas there is seasonal and disguised unemployment. Urban areas have mostly educated unemployment. Q11 What is the significance of the concept of Gross National Product? GrossNational Product measures the output of goods and services produced in an economy during a given year. It is a significant concept because An increase in the gross national product means that the output of goods and services in an economy has increased. More goods and services are now available in the economy. Availability of more goods and services means that the standard of living and the welfare of the people has improved. Therefore every country seeks to improve the size of GNP. Increase in GNP is also a measure of economic growth of a country. Suppose the GNP of an economy in the year 20002001 was Rs. 1,00,000 crore and it increases to Rs 1,10,000 crores in the year 20012002. The percentage increase in the GNP is measured as follows: (1,10,000 – 1,00,000) X100 =10% 1,00,000 GNP has increased by 10%. We will say that the rate of the growth of the economy in 20012002 was 10% over the preceding year. Q12 ‘ Population is an asset for an economy rather that a liability.’ Comment.
Population , for long, has been seen as a liability which slows the rate of the economic growth. This view of population was based on the view that population represented the stock of the human beings. Human beings make a demand on the nation’s resources for their survival. It was thought that larger the population , more resources like food , clothing etc would be required for their survival. Hence, population was being treated as a liability. However, this view for population was not correct. More important thing is that it supplies the most important factor resource i.e. human capital. It is the human capital that organizes the production activities and uses other factor resources. It is in this sense that the stock of knowledge and skills that constitutes the human resource is a valuable asset. Q13 What do you understand by the virtuous cycle of human development? By virtuous cycle of human development we mean that human development causes more human development. Let us see how this happens: Educated and healthy parents…………provide good education to their children , provide adequate nutrition and healthcare to their children. They are more efficient and productive. Enjoy higher incomes and better standard of living…………..children grow up as educated and healthy adults………….these adults become parents and the same cycle sets off again. Conversely, the uneducated and sick parents are trapped in vicious cycle of underdevelopment. They neither have the means or the knowledge to provide education or healthcare to their children. Low productivity , low income and poverty perpetuate the vicious cycle. Q14 Differentiate between different types of economic activities with the help of examples. Different type of economic activities can be classified into: a)Primary activities.Primary activities include those activities which are related to the natural resources like cultivation of land, forestry, poultry etc. b)Secondary activities.These are the activities which are concerned with the transformation of natural resources into other goods. E.g. transformation of wheat into flour is a secondary activity.c)Tertiary activities.It includes all the activities which produce different type of services needed by the people in the economy. E.g. banking, teaching, driving etc. In an undeveloped economy, primary sector is the dominant sector of the economy. With economic growth the relative shares of secondary and tertiary sectors increases whereas that of the primary sector falls. Q15 Give two examples of how the human capital has brought phenomenal changes in the Indian economy. a)Green revolution.It occurred in the late 1960s. It brought about massive increase in the crop production. It was primarily brought out by the application of the human mind and knowledge in cultivation.b)Information Technology Revolution.It is relatively a new phenomenon. It has been brought out by the application of human skills and knowledge. It has totally changed the way the information is generated and distributed.Q16 What is the role of education in human capital formation? Expenditure on the education of a child can be seen as an investment. Like any other investment, investment in education brings returns in future. Education provides better knowledge and skills. A person with more knowledge and skills is generally more productive. As a result: a)An educated person has higher income because his services command a higher price. b)A country’s resources are better utilized. As a result the output and the overall GNP of a nation also increase. Education enhances the cultural richness of a country and the efficiency of governance. Q17 Examine the role of health in human capital formation. A healthy person is able to devote more time to his work. He has more strength, energy and stamina.
Hence, he is more efficient and productive. Therefore any expenditure on healthcare may be regarded as the investment made in human capital formation. Q18 Women are employed in low paid jobs. Do you agree? This is not universally true that women are employed into low paid jobs. A worker’s remuneration in a work depends upon the level of skill and knowledge involved. All those with higher skill, knowledge and training are paid higher. There is no discrimination between men and women. However, in general a large number of women are illiterate. They do not possess any skills or training. Such women have to take up low paid jobs generally in unorganized sectors of the economy. Also they are subjected to job insecurity. Q19 Outline the strategies of the Tenth Five Year Plan to promote education. The Tenth Five Year Plan aims to : a)Increase the number of schools and colleges. b)Quality improvement c)Vocationalisation of education d)Promotion of distant education e)Convergence between formal and non – formal system of education f)Adoption of state specific curriculum Q20 ‘Unemployment rate in India is low.’ Explain. Unemployment rate in India is low as compared to other countries. In fact India experiences a large rate of underemployment . This is because of the following reasons: a)to sit unemployed for a long period of time. He has to find work for hisA poor cannot afford subsistence. Therefore, he accepts whatever job comes his way. It may be a low productivity, low paid job. It may involve much hard work without sufficient remuneration. A poor man would be compelled to accept it. He would be recorded as employed and not as unemployed. b)A major part of our labour force is engaged into agriculture. In agriculture it is difficult to identify who is employed and who is unemployed, although all persons will be reported as employed. The reality is that a large portion of the agricultural labour force is disguisedly unemployed. Q21 Distinguish between disguised unemployment and seasonal unemployment. Disguised unemploymentis a situation where the number of people employed in a job is more than what is optimally required. E.g. suppose on a given farm land, one farmer cultivates the land and manages to produce 5000 kg of wheat. Soon, two other members of his family join him and share his work. The total output remains as before i.e. 5000 kg. it means that these two additional labourers are not making any contribution to the total output. They work as extras on land. These two persons will be called as disguisedly unemployed. Seasonalunemploymentrefers to a situation where a large number of people are unable to find a job during some months of the year. E.g. agriculture is a seasonal activity. There is an increased demand for labour at the time of sowing, harvesting, weeding and threshing. In between there is either no or little demand for labour. Agricultural labourer finds himself as unemployed during this period. It is called seasonal unemployment. Q22 Why is educated unemployment a peculiar problem in India? Educated unemployment is a situation where a person has some formal education but fails to find a job for himself. India is experiencing this problem mainly because of the following reasons: Much of the education is of lowquality. There is rarely any vocation element in it. Therefore, much of education is irrelevant. The rate at which the white collar jobs are created in India is much less than the rate at which the population and education is increasing. Q23 How does unemployment adversely affect an economy?
Unemployment adversely affects in an economy in the following ways: a)It leads to the wastage of national resources. Human beings represent a national resource. When in a job, contribute to the generation of national product. But when unemployed, their potential contribution to the economy’s growth remains zero. b)An employed person is a human resource and therefore an asset for the economy. An unemployed person is a liability. He does not contribute to the national product. Rather puts a pressure on the natural resources for his survival. c)More the unemployed persons in an economy, more persons are dependent on others. More of the income gets consumed and only a little is saved. Little savings means that only little is available for investment. Q24 What are the causes of unemployment in our economy? Rapid growth of population cuts away our limited and existing and limited resources, retards capital formation, leaves no surplus and causes unemployment. a)Slow rate of economic growth. India is a slowly growing economy. This slow economic growth is neutralized by our rapid growth of population. b)Overdependence on agriculture. Over 60% of the Indian population is dependent on agriculture for their livelihood. Seasonal character of agriculture and disguised unemployment in agriculture are the causes of unemployment in our country. c)Underdeveloped industries. Industrial development in India is very slow due to shortage of capital, essential inputs, power shortage, shortage of raw materials, outdated machinery, sick industrial units etc. Hence, job opportunities are very limited in industrial sector. d)Defective educational system. Our educational system is educated. It is not joboriented. As a result, we have a large number of educated unemployed. e)Less savings, investment and capital formation. Our economy is characterized by low savings due to low incomes and poverty, size of our families, less investment and almost no capital formation. f)of capital intensive technology. To earn huge profit and to save their industries from labourUse unrest, frequent strikes, our industries are switching over to capital intensive technology.