Monthly Archives: January 2022

Very Short Answer Type Questions:

Q1. Differentiate between the main objectives of the First and Second Five Year Plans.
Answer: 1. Objectives of First Five Year Plan:
(a) It focused on land reforms for the development in rural areas.
(b) It aimed to increase level of National Income.
2. The First Five Year Plan differed from the Second Five Year Plan:
(a) The second five year plan stressed on heavy industrialisation.
(b) Second five year plan wanted to bring quick structural transformations in all possible directions in place of slow and steady growth like first five year plan.

Q2. Differentiate between the capitalist and socialist models of development.
Answer: The capitalist model of development refers to the strategies in which the private sectors are prioritised in place of social welfare whereas socialist model of development aims at public sector and planning to establish egalitarian society.

Q3. What is meant by decentralized planning?
Answer: Decentralized planning is designed to involve the peoples through voluntary citizens organisation in making plans at the panchayats, blocs and districts level. Its example is the ‘Kerala Model’.

Q4. Highlight the two areas on which the First Five Year Plan focused.
Answer: The first five year plan was commenced in 1951 to be drafted by young economist K.N. Raj with the emphasis on poverty alleviation. Its main thrusts were as follows:
1. To invest in dams and irrigation to improve agricultural sector with the urgent attention.
2. Huge allocations were made for large scale projects like Bhakra-Nangal Dam.

Q5. Which are the two models of development? Which model of development was adopted by India?
Answer: Two models of development are the capitalist and socialist models of development, India adopted the elements from both these models together to be known as “Mixed Economy”.

Q6. What were the fears of tribal population of Orissa and environmentalist about setting up industries in tribal areas?
Answer: 1. These iron resources lie in some most underdeveloped and predominant tribal districts.
2. Tribal population feared that the setting up of industries would mean displacement from their home and livelihood.
3. The environmentalists feared to be polluted the environment due to mining and industrial activities.

Q7. What is the meaning and importance of economic planning in Indian context?
Answer: Economic planning in India refers do a systematic regulation of economic activities by government to reduce the wastage of time and resources:
1. Economic planning helps to achieve national goals in a continuous process of development.
2. It is a rational process to associate with the future needs and goals to evaluate alternate proposals also.

Q8. What was Kerala Model?
Answer: Kerala model is an example of decentralised planning at the state level:
1. It is the initiative taken by Kerala for planning and development strategies.
2. It targeted on education, health, land reform, effective food distribution and poverty alleviation.
3. Kerala model initiated to implement Panchayati Raj, blocs and district level of government.

Q9. Which state was prone to food crisis in the early years of independence?
Answer: Bihar was prone to food crisis in the early years of independence
1. It was due to a near famine situation.
2. The food shortage was very much acute in all districts of Bihar.
3. Food shortage led to acute and widespread malnutrition.
4. The zoning policies of government prohibited trade of food across states, which reduced availability of food in Bihar.

Q10. Who was J.C. Kumarappa?
Answer: 1. J.C. Kumarappa was originally known as J.C. Cornelius.
2. He was an economist and chartered accountant.
3. He was the follower of Mahatma Gandhi to apply Gandhian Principles of Economic Policies.
4. He was the author of ‘Economy of Permanence’ and a member of planning commission.

Q11. What is Plan Holiday?
Answer: 1. Plan Holidays is a gap between two five years plan, i.e. 1979-1980 and 1990-92.
2. It was a stop gap arrangements by the provisions of annual plans.
3. Plan holidays took place due to change in government to be locked in development-goals and priorities etc.
4. Those five year plans were supposed to be reviewed and changed by the succeeding government.

Q12. What results were revealed by Planned Economy?
Answer: 1. Big industrialists continued to benefit.
2. The land owning classes became politically powerful.
3. Land reforms could not take place effectively.
4. The early initiatives for planned development were realising the goals of economic development.

Q13. Which methods were used to implement the development process in a mixed economy?
Answer: 1. Planning and governmental regulation to control economy.
2. Licensing, subsidies, progressive taxing, price control and reforfhs etc. were also implemented.
3. To make a significant role of public sector.
4. To ensure a political democracy.

Q14. What is ‘Mixed Economy’?
Answer: Mixed economy is an economy to co-exist private and public sector both:
1. Both the sectors work within invisible lands of market forces and visible lands of planning set by government.
2. ‘State own’ means of production to aim social welfare and ‘private own’ means of production to be regulated by states.

Q15. How did Indian lay down the foundation of future economic growth?
Answer: 1. Some of the largest developmental projects in India’s history were undertaken during this period to include mega dams like Bhakra- Nangal and Hirakud for irrigation and power generation.
2. Heavy industries were started in the public sector like steel plants, oil refineries, manufacturing units and defence production etc.
3. Infrastructure and communication were also improved.

Short Answer Type Questions:

Q1. Explain any two merits and two demerits each of the Green Revolution.
Answer: Two Merits of the Green Revolution:
(i) The Green Revolution ensured food sufficiency in the country. In many parts, the stark contrast between the poor peasantry and the landlords produced conditions favourable for left wing organisations to organise the poor peasants.
(ii) The Green Revolution resulted in the rise of middle peasant sections.
These were farmers with medium size holding, who benefited from the changes and soon emerged politically influential in many parts of the country.
Two Demerits of the Green Revolution:
(i) The Green Revolution delivered only moderate agricultural growth and raised the availability of food in the country but also increased polarisation between classes and regions.
(ii) Some regions like Punjab, Haryana and Western UP became agriculturally prosperous while others remained backward.

Q2. List any two merits and two demerits of Green Revolution.
Or
What is Green Revolution? Highlight any two of its effects?
Answer: Green Revolution was introduced to bring about revolutionary changes in agriculture especially in foodgrains like wheat and Rice to increase production:
1. Production was increased by the use of high yielding varieties of seeds.
2. Scientific irrigation and fertilisers were also applied.
Merits of Green Revolution:
(а) The government offered various irrigational facilities at a subsidised prices.
(б) It resulted in the rise of ‘Middle Peasant Section’ who soon emerged politically influential.
Demerits of Green Revolution:
(a) This created a stark contrast between the poor peasantry and the landlords.
(b) It increased polarisation between the classes and regions like northern states i.e. Punjab, Haryana, West UP, became agriculturally rich but other remained backward.

Q3. How was Planning Commission of India : set up? Mention its scope of work.
Answer:Planning Commission was set up as:
1. It consists Prime Minister as its chairman.
2. Some ministers or incharges of economic portfolios.
3.The members of planning commission have a high public image alongwith an administrative and educational background.
Its scope of work:
1. To bring socio-economic change.
2. It was to provide a controlled and faster growth rate.
3. To resolve contradictions between societies.

Q4. describe the main functions of planning commission of India.
Answer: Planning commission was set up in 1950 by a cabinet resolution as an extra constitutional body:
1. It look advisory in nature but it is very powerful to be known as economic cabinet of country.
2. Planning commission prepares a document to have plan for income and expenditure for five year plans.
3. Planning commission prepares strategies to provide adequate means of livelihood for every man and woman.
4. It also ensures not to concentrate wealth and means of production into few hands only.

Q5. What was the protest against Posco plants in Orissa?
Answer: In Orissa, Posco is the state plant. The government of Orissa signed a Memorandum of understanding (MoU) with Korean Company for enhancement of the plant. But this displaced many workers working in the plant.
Hence, the workers demonstrated outside Korean Company’s office to cancel the memorandum. This demonstration was organised by Rashtriya Yuva Sanghtan and Navmirmana Samithi.

Q6. Which part of constitution helps the planning commission to ensure socio¬economic justice? 
Answer. The directive principles of state policy ensure the welfare through securing and protecting them from any kind of social, economic and politieal industries:
1. Men and women equally have the right to adequate means of livelihood.
2. Prevent concentration and means of production into the few hands only.
3. Equal distribution of resources.

Q7. What do you know about land reforms in India during planning period?
Answer: 1. Zamindari system was abolished to release land from big landlord who were least interested in agriculture.
2. Lands were consolidated to bring small pieces together to increase the farm size.
Drawbacks:
1. Despite a ‘ceiling’, people with excess land managed to violate the laws.
2. The tenants, who worked on
someoneelse’s land were given greater legal security which rarely implemented.
3. Landowners were very powerful and wielded considerable political influence.

Q8. What is meant by White Revolution in Gujarat?
Answer: The White Revolution in Gujarat was started by ‘Varghese Kurien’ known as milkman of India to launch Gujarat Cooperative Milk and Marketing Federation Ltd., which further launched ‘AmuF.
Amul is a dairy cooperative movement based in ‘Anand’ town of Gujarat to become a unique appropriate model for rural development and poverty alleviation.

Long Answer Type Questions:

Q1. What was Green Revolution? Mention its any two positive and two negative consequences.
Answer: Green Revolution was introduced to bring about revolutionary changes in agriculture especially in foodgrains like wheat and rice to increase food production through high yielding varieties of seeds, fertilisers and scientific irrigation. Positive Consequences:
1. In many parts, the stark contrast between the poor peasantry and the landlords produced conditions favourable for left wing organisations to organise the poor peasants.
It resulted in the rise of what is called the ‘Middle Peasant Sections’
who were farmers with medium size holdings who benefitted from the changes and soon emerged politically influential in many parts of country. Negative Consequences:
(i) This created a stark contrast between the poor peasantry and the landlords.
(ii) It delivered only a moderate agricultural growth i.e. a rise in rice and wheat production by raising availability of foodgrains in country. On the other hand it increased polarisation between the classes and regions like Northern States i. e. Punjab, Haryana, West-U.P. became agriculturally rich but others remained backward.

Q2. Explain the main arguments in the debate that ensued between industrialisation agricultural development at the time of second five year plan.
Answer: At the time of second five year plan, some controversial issues rose in reference of relevancy of agriculture over industry:
1. Second five year plan emphasised on industry in place of agriculture or rural India.
2. J.C. Kumarappa, a Gandhian Economist proposed an alternative blueprint to emphasise on rural industrialisation.
3. Bharatiya Lok Dal leader, Chaudhary Charan Singh also commented that the planning was leading to creation of prosperity in Urban and industrial sections at the cost of rural welfare.
Others debated that without an increase in industrial sector poverty could not be alleviated:
1. India planning did not have agrarian strategy to boost the production of foodgrains.
2. It also proposed programme of community development and spent large sums on irrigation projects and failure was not that of policy but of its non-implementation because of the politics of land owning classes.
3. Besides they also argued that even if the government had spent more money on agriculture, it would not have solved the massive problems of rural poverty.

Very Answer Type Questions:

Q1. How did the dominance of Congress Party in the first three general elections help in establishing a democratic set-up in India?
Answer: The first general election was the first big test of democracy in a poor and illiterate country. Till then democracy had existed only in the prosperous countries. By that time many countries in Europe had not given voting rights to all women. In this context India’s experiment with universal adult franchise appeared very bold and risky. India’s general election of 1952 became a landmark in the history of democracy all over the world. It was no longer possible to argue that domocratic elections could not be held on conditions of poverty or lack of education. It proved that democracy could be practised anywhere in the world. The next two general elections strengthened democratic set-up in India.

Q2. Highlight any two features of ideology of Bharatiya Jana Sangh.
Answer: 1. Bharatiya Jana Sangh laid emphasis on ideology of one country, one culture and one nation.
2. Bharatiya Jana Sangh called for reunity of India and Pakistan in Akhand Bharat.

Q3. Explain the major difference of ideology between that of Congress and the Bharatiya Jana Sangh.
Answer: The major difference of ideology between Congress and the Bharatiya Jana Sangh was that Bharatiya Jana Sangh emphasised on one party country. One culture, one nation i.e. a Hindu nation or Hindutva whereas Congress formed ideological and social coalitions accommodating social diversities.

Q4. State any two ideologies of the Swatantra Party.
Answer: Swatantra Party was founded by Senior Congress leader C. Rajgopalachari in August 1959:
1. The party believed that prosperity could come only through individual freedom.
2. This party was against land ceilings in agriculture and opposed to cooperative farming.

Q5. How has the method of voting changed from the first General Election of 1952 to the General Election of 2004?
Answer: 1. In the first General Election a box was placed inside each polling booth for each candidate with the election symbol of the candidate. Each voter was given a blank ballot paper to drop into the box, they wanted to vote for.
2. After first two elections, this method was changed. Now ballot paper carried the names and symbols of candidates and the voter stamped against the name of candidate to vote for.
3. In 2004, Electronic Voting Machine were introduced to press the button according to choice of the voter containing the name of candidate and symbol of political party.

Q6. When was Communist Party emerged?
Answer: The Communist Party emerged in 1920 in different parts of India. It took the inspiration from Bolshevik revolution in Russia. The important leaders of CPI were A.K. Gopalan, S.A. Dange, E.M.S. Namboodiripad, P.C. Joshi, Ajay Ghosh etc.

Q7. “India’s experiment with universal adult franchise appeared very bold and risky”. Justify the statement.
Answer: Because:
1. Country’s vast size and electorates made these elections unusual.
2. The year 1952, it was a big test for poor and illiterate country.
3. Till then, democracy had been existed only in the prosperous countries mainly in Europe and North America where everyone was almost literate.

Q8. Mention the aims and goals of Socialist Party of India. Why the party could not prove itself as an effective alternative to the Congress?
Answer: Aims and goals of socialist party of India:
1. The Socialist Party believed in the ideology of democratic socialism to be distinguished from Congress and Communists both.
2. It criticised Congress for ignoring the workers and peasants.
It became difficult for socialist party to prove itself as an effective alternative to Congress because Congress Party declared its goal to be the socialist pattern of society in 1955.

Q9. What were the reasons for dominance of one party system in India?
Answer: The dominance of Congress in India was due to following reasons:
1. Congress was identified with the freedom struggle for building national unity and solidarity.
2. Congress was associated with Mahatma Gandhi’s name.
3. It had a broad based manifesto to include the various section of society.
4. Congress bore a popular appeal of charismatic leader like Mahatma Gandhi, J.L. Nehru, Sardar Patel, Indira Gandhi etc.
5. Congress focused on building role of the party.

Q10. How did India’s first general elections of 1952 become a landmark in the history of democracy all over the world?
Answer: Because:
1. These elections were competitive among various parties.
2. The participation of people was encouraging also.
3. The results were declared in a very fair manner, even to be accepted by the losers in a fair manner.
4. This experiment of India, proved the critics wrong also.

Short Answer Type Questions:

Q1. Describe the organisation of Congress Party as a social and ideological coalitions.
Or
“For a long time Congress Party had been a social and ideological coalition”. Justify the statement. 
Answer: 1. It accommodated the revolutionary conservative, extremist and moderates with all other shades of the centre.
2. Congress became a platform for numerous groups, interests and even political parties to take part in national movement.
3. In pre-independence days, many organisations and parties were allowed to co-exist within the Congress.
4. Some of these like ‘Congress Socialist Party’ later separated from the Congress and became an opposition party.

Q2. How was one party dominance of India different from the other examples of one party dominance in the world?
Or
Examine the comparative analysis of nature of Congress dominance.
Answer: India is not the only country to have dominance of one party but we have some other examples also for the same. But the dominance of one party in India does not compromise democratic spirit of constitution whereas other nations have compromised it:
1. In countries like China, Cuba and Syria are permitted to be ruled by one party only by the constitutional provisions.
2. Myanmar, Belarus, Egypt also experience one party system due to legal and military measurer.
3. In India, Congress dominates on behalf of free and fair elections based on democracy where the losing of other party is also fair.

Q3. “In India, hero-worship, plays a part in its politics unequalled in magnitude by the part it plays in the politics of any other country But in politics, hero-worship is a sure road to degradation and eventual dictatorship”.Babasaheb Dr. B.R. Ambedkar Analyse the statement.
Ans: The above mentioned statement speaks of accommodating diversities by the leader of India which was a challenging path to democracy. Our leaders wanted to represent politics as a way of solution of problems in place of making politics a problem.

Q4. Examine the dominance of Congress in the first three General Elections.
Answer: I. In the first election Congress won 364/489 seats as per expectations.
2. The Communist Party next to Congress won only 16 seats.
3. Congress scored higher in state elections also except Travancore- Cochin (Kerala), Madras and Orissa.
4. Hence, country ruled at national and state level both by declaring Pt. J.L. Nehru as the first Prime Minister of India.
5. In second and third elections also, Congress maintained the same position in Loksabha by winning of three fourth seats in the years 1957 and 1962 respectively.

Long Answer Type Questions:

Q1. Describe the various steps taken to hold the first general elections in India. How far these elections were successful?
Answer: The first general elections had to be postponed twice and finally held from October 1951 to February 1952:
1. These elections were referred to as 1952 elections because most parts of country voted in January 1952.
2. It took six months for campaigning, polling and counting to be completed.
3. Elections were competitive because there were on an average more than four candidates for each seat.
4. The level of participation was en-couraging to vote out in the election.
5. The results were declared and accepted as fair even by losers to prove critics wrong.
These elections were successful:
1. The losing of the parties was also accepted as fair.
2. These elections became a landmark in the history of democracy.
3. It was no longer possible to argue that democratic elections could not be held in conditions of poverty or lack of education. Instead, it can be practised anywhere in the world.

Q2. Why was Congress considered as a social and ideological coalition in independence days? Explain.
Answer: The Congress Party became a social and ideological coalition for it merged different social groups alongwith their identity holding different beliefs:
1. It accommodated the revolutionary, conservative, pacifist, radical, extremist and moderates and the right and the left with all other shades of the centre.
2. Congress became a platform for numerous groups, interacts and even political parties to take part in the national movement.
Ideological currents present within the Congress:
(а) In pre-independence days, many organisations and parties with their own constitutions and organisational structures were allowed to exist within the Congress.
(b) Some of these like ‘Congress Socialist Party”, later separated from the Congress and became an opposition party.

Q3. How was the one party dominance in India different from the one party system in Mexico? In your opinion which of the two political systems is better and why?
Answer: There was a difference between one party domination in India and Mexico. In Mexico, this was a one party system only not dominance because:
1. In India, the Congress Party dominated on behalf of popular consensus but Institutional Revolu-tionary Party (PRI) (in Spanish) ruled on behalf of perfect dictatorship.
2. In India, free and fair elections took place, where the losing of election was also fair but in Mexico, elections were based on malpractices, dominated by PRI.
In our opinion one party dominance¬like India is better because this sort of dominance:
1. Accommodates social diversities.
2. Encourage large number of parti-cipation.
3. Ensures democratic spirit as well as maintains the same.
4. Bear respect even for opposition.

Q4. How did opposition parties emerge in India? What was their importance?
Answer: Some of the diverse opposition parties had come into existence before the
first general elections in 1952 as non-Congress parties which succeeded to gain only a taken of representation in Lok Sabha and State Assemblies. These parties maintained a democratic character of the system:
1. These offered a criticism based on principles to keep ruling party under check.
2. These parties groomed the leaders also to play a crucial role in shaping the country.
3. In the early years, these was a lot of respect between leaders of Congress and opposition parties i.e. interim government included even opposition leaders like Dr. Ambedkar, Jayaprakash Narayan, Shyama Prasad Mukherjee into the cabinet.

Very Short Answer Type Questions:

Q1. Identify any two consequences of the partition of India in 1947.
Answer: 1. Communal Riots took place as the people of one community were killed and maimed by the people of other community in the name of religion.
2. People went through immense sufferings as they were forced to abandon their homes and to secure temporary shelter in the refugee camps. Thousands of women were abducted on both sides of border.

Q2. Mention any two challenges that India faced just after independence.
Answer: (i) Challenge to shape a nation
(ii) Challenges to establish democracy.
Or
(iii) Challenge to ensure the development and well being of the entire society.

Q3. Name the original states from which the following states were carved out.
(a) Meghalaya (b) Gujarat
Answer: (a) Assam (1972) (b) Bombay (1960)

Q4. Explain the role played by Sardar Patel in the integration of princely states into the Indian Union.
Answer. Sardar Patel negotiated with the rulers of princely states and diplomatically merged most of them into the Indian Union i.e. there were 26 small states in today’s Orissa and 14 big states and 119 small states in today’s Gujarat.

Q5. Which state got divided on bilingual basis?
Answer: Bombay got divided on bilingual basis consisting of Gujarat and Marathi speaking people. After popular agitation, the states of Maharashtra and Gujarat were created in 1960.

Q6. Name the leader who advocated separate state of Andhra Pradesh by observing fast unto death and participation in Salt Satyagraha.
Answer: The leader Potti Sriramulu of Madras resigned from government job to participate in Salt Satyagraha and advocated equality in the society and demanded entry of dalits in temples of Madras as well as observed fast unto death since 19 October 1952 to create separate state of Andhra Pradesh

Q7. What was government’s approach towards the integration of princely states was based on three considerations?
Answer: 1. Most of the princely states willingly wanted to join Indian Union.
2. The government wanted to accommo¬date plurality by adopting flexible approach in dealing with the demand of the region.
3. The central government was so much concerned towards integration and consolidation of territorial boundaries of Indian nation.

Q8. Which interests were hidden behind the conflicts between Hindus and Muslims at the time of independence?
Answer: Hindu and Muslim communities bear some political interests at the time of independence:
1. Muslim League demanded a separate nation for Muslims to protect the interests of Muslims only.
2. There were some Hindu organisations also which made efforts to look after the interests of Hindus only to make India a ‘Hindu Nation’.

Q9. “India got independence under very difficult circumstances rather than any other country”. Justify the statement.
Answer: India got independence in 1947 under very difficult circumstances:
1. Freedom came with the partition of the country.
2. The year 1947 became the year of unprecedented violence and trauma.
3. Still our leader faced all these challenges in an appreciable manner by accommodating regional diversities also.

Short Answer Type Questions:

Q1. How has the princely state of Manipur acceded to India?
Answer: Due to integration of princely states, Maharaja of Manipur Bodhachandra Singh signed the Instrument of Accession with the India Government on the assurance to be maintained the internal autonomy of Manipur:
1. The state became a constitutional Monarchy after it conducted elections in 1948 to become first state to hold elections based on ‘Universal Adult Franchise’.
2. But sharp differences arose in Legislative Assembly over the question of merger of Manipur with India while the state congress wanted the merger other political parties were opposed to this.

Q2. Describe briefly any four problems faced in the process of partition of India.
Answer: The process of partition had been started in 1940 when Muslim League Propounded Two Nation Theory. This process involved various problems:
1. Areas were supposed to be distributed on the basis of religions majority i.e. Muslim majority areas built Pakistani territory and rest stayed with India. It created communal riots in country.
2. No single belt of muslim majority was the part of British India. They were concentrated in East and West. Hence, it was decided that Pakistan will comprise two territories namely East and West Pakistan separated by long expansion of India territory.
3. All muslim majority areas did not want to be merged with Pakistan
i. e. it was opposed in NWFP. But ultimately NW.FP was made to merge with Pakistan.
4. Another problem belonged to minorities on both sides of border
i. e. Lakhs of Hindus and Muslims and Sikhs from both the sides were left with no option except to leave their homes.

Q3. Name the states divided on the basis of sub-regional culture.
Answer: In the late 20th century, some states sub-regions raised the voice for separate states accommodating their regional culture on the ground of complaints of regional imbalances. Jharkhand, Chhattisgarh, and Uttaranchal were created in 2000 on the basis of separate regional culture only.

Q4. Explain three challenges which independent India faced during the process of Nation Building.
Answer: India had to face many challenges immediately after she got independence, which can be summed up as follows:
1. Challenge to Shape a Nation: India was divided among various states at the time of independence. Hence a great challenge arose to unity and integrate country into one bond Sardar Vallabhbhai Patel took upon himself to integrate these states either wilfully or diplomatically to be completed into different stages.
2. To Establish Democratic Setup: India constituted representative democracy based on parliamentary form of government and it was a great challenge to develop these democratic practices in the nation.
3. To Ensure Development and Well Being of the Society: Indian polity made herself to achieve welfare goods with the environment of effective economic policies and eradication of poverty and unemployment.

Q5. What problems were involved at the integration of princely states during nation building?
Answer: Integration of princely states possessed many difficulties in front of nation builders:
1. British announced to lapse of British
Paramountcy over princely states with the end of their rule over India.
2. British government took the view that all these states were free to join either India or Pakistan or remain independent wilfully. It became a hindrance for unity of nation.
3. Ruler of Travancore declared the states an independent one.
4. Nizam of Hyderabad and Bhopal also followed Travancore.
5. These responses created a possibility of division of country in place of unity and democracy.

Q6. Write a short note on the people’s movement of Hyderabad.
Answer: Hyderabad was the largest princely state of India under the rule of Nizam. One of the world’s richest person. Nizam wanted Hyderabad to be an independent state. But the people of Hyderabad were not happy with the rule of Nizam due to his non-democratic practices. Hence, various section of society agitated against him:
1. The peasants in Telangana region particularly rose voice against him.
2. Women also joined the movement in large number.
3. The communist and Hyderabad congress were in the forefront of movement.
4. Nizam responded by unbashing a Razakars paramilitary force on people.
5. Ultimately, the central government had to order the army to tackle and in 1948, Indian army moved in control the Nizam’s forces.
All the above mentioned situations led to an accession of Hyderabad.

Q7. What was the significance of linguistic reorganisation of Indian states to the nation building?
Answer: In the initial years it was felt that linguistic states may foster separatism and create pressures on newly founded nation. But India considered democracy and federalism by making a favour to linguistic states only:
1. Linguistic states enhanced democratic practices.
2. Linguistic states reduced separatist attitude by accepting the regional linguistic claims of all regions.
3. Linguistic reorganisation provided a uniform base to the nation and strengthened unity of nation.
4. Linguistic states promoted the principle of unity in diversity, a distinct feature of nation.

Long Answer Type Questions:

Q1. What forced the Union Government of India to appoint the State Reorganisation Commission in 1953? Mention its two main recommendations. Name any four new states formed after 1956.
Answer: 1. State Reorganisation Commission was appointed in 1953 by central Government to rearrange the boundaries of states.
2. Its main recommendations were to organise states on language basis as well as the boundaries of state could reflect the linguistic aspects also.
3. The Madras province under British India created following linguistic states:
(a) Andhra Pradesh (Telugu)
(b) Tamilnadu (Tamil)
(c) Kerala (Malayalam)
(cl) Karnataka (Kannad)
4. The state Reorganisation Act was passed in 1956 which created 14 states and 6 Union territories.

Q2. Explain any three challenges faced by India at the time of its independence.
Answer: India had to face many challenges immediately after she got independence, which can be summed up as follows:
1. Challenge to Shape a Nation: India was divided among various states at the time of independence. Hence a great challenge arose to unify and integrate country into one bond. Sardar Vallabhbhai Patel took upon himself to integrate these states either wishfully or diplomatically to be completed into different stages.
2. To Establish Democratic Set up: India constituted representative democracy based on parliamentary form of government and it was a great challenge to develop these democratic practices in the nation.
3. To Ensure Development and Well Being of the Society: Indian polity made herself to achieve welfare goals with the evolvement of effective economic policies and eradication of poverty and unemployment.

Q3. How did the reorganisation of states take place in India after its independence? Explain.
Answer: 1. In the initial years it was felt that linguistic states may foster seperatism and create pressures on newly founded nation, but India considered democracy and federalism by making a favour to linguistic states only.
2. State Reorganisation Commission was appointed in 1953 central Government to rearrange the boundaries of states.
3. Its main recommendations were to organise states on language basis as well as the boundaries of states could reflect the linguistic aspects also.
4. The State Reorganisation Act was passed in 1956 which created 14 states and 6 union territories.
5. Linguistic states enhanced demo¬cratic practices.
6. Linguistic states reduced separatist attitude by accepting the regional and linguistic claims of all regions.

Q4. Explain any three consequences of partition in India.
Answer: 1. In the name of religion, people of one community killed and mained people of the other community. Cities like Lahore, Kolkata and Amritsar were titled as communal zones.
2. People went through social sufferings also be forced to abandon their homes especially minorities, who took shelter in refugee camps.
3. To preserve the honour of family, many women were killed even many children were separated from their family and if crossed borders, they did not have any home.
4. The partition did not only divide property, assets or liabilities but also the government employees and the railways etc.

Q5. Assess the role played by Sardar Vallabhbhai Patel in nation building.
Answer: Sardar Vallabhbhai Patel is also known as ‘Iron man of India’, became India’s Deputy Prime minister and Home minister during integration of princely states. He played a historic role in negotiating the rulers of princely states and diplomatically brought most of them in Indian Union. It was very complicated which required skilful persuation i.e. there were 26 small states in today’s
Orissa, Saurashtra region of Gujarat had 14 states with 119 small states etc.

In This Post we are  providing MONEY AND BANKING NCERT MOST IMPORTANT QUESTIONS for Class 12 which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON MONEY AND BANKING

Question 1.
Explain the role of reverse repo rate in controlling money supply.
Answer:
Reverse repo rate is the rate at which the RBI or Central Bank borrows from other commercial banks. It plays an effective role in controlling the money supply. For example, an increase in the reverse repo rate implies that the bank will get a higher rate of interest from the RBI on their lendings.

As a result, the banks will lend more to the RBI and less to the public thus, resulting in a decrease in the money supply. Similarly, in case the RBI decreases the reverse repo rate, the banks will get a lower rate of interest on their borrowings. As a result, they will lend more to public, which will in turn increase the money supply.

Question 2.
Distinguish between ‘Qualitative and Quantitative tools’ of credit control as may be used by a Central Bank.
Answer:
Two types of methods are adopted by the central bank to control credit. These are quantitative methods and qualitative methods.
(a) Quantitative methods aim at controlling the cost and volume of credit created by commercial banks by using instruments like bank rate, open market operation and legal reserve ratios.

(b) Qualitative methods regulate the direction of flow of credit among various users rather than influencing just the availability of credit. Example: margin requirement, credit rationing, direct action and moral suasion.

Question 3.
Define money. Explain its main functions.
Answer:
Money can be defined as a generally acceptable medium that can be exchanged for goods and services, and can be used as a measure and store of value.
The following are the important functions of money:
(i) Medium of Exchange: Money acts as an intermediary in the exchange transactions of goods and services. Money solves the problem of double coincidence of wants by acting as a medium of exchange for all goods and services.

(ii) Unit of Value: Money acts as a convenient unit of account. The value of all the goods and services can be expressed in monetary units. Money as a unit of value helps in measuring the value of exchange for various goods and services.

(iii) Store of value: Money is not a perishable item and its storage costs are also considerably low. Moreover, it is acceptable to anyone at any point of time, Thus, money acts as a store of value for individuals.

(iv) Standard of Deferred Payments: Money acts as standard in terms of which future or deferred payments are stated because money maintains a constant value over a period of time.

Question 4.
What is meant by the supply of money? Discuss the factors which determine the supply of money.
Answer:
Money supply refers to the amount of money, which is in circulation in an economy at any given point of time.

Following factors determine the money supply:

• Monetary Standard: Money supply is affected by the monetary standard. If gold standard is adopted, there will be less supply of money. On the other hand, if paper currency system is adopted, money supply can be increased on the basis of demand.
• Production Volume: Volume of production also determines the money supply. If the level of production is high, the money supply will be more.
• Monetary Policy: Monetary policy of the government also affects the money supply. If the Central Bank increases the Cash Reserve Ratio there will be contraction in money supply.
• Fiscal Policy: Fiscal policy of the government determines the money supply. If government prepares deficit budget, money supply will increase.
• Other Factors: Banking habits, velocity of money, liquidity preference and the volume of money multiplier also determine the supply of money.

Question 5.
What are the various money stock measures?
Answer:
The various money stock measures are M₁, M₂, M₃, and M₄.
These are defined as follows:
M₁= C + DD + OD
C is currency held by the public. It consists of paper currency as well as coins. DD is the demand deposits in banks. Only the net demand deposits of banks are included in money supply because the part of demand deposits that represents inter-bank deposits held by one bank with another does not constitute demand deposits held by the public.OD is other deposits with the RBI.

OD includes demand deposits of Public Financial Institutions (like IDBI etc.), Foreign Central Banks and Government, the IMF, the World Bank, etc.

M₂ = M₁ + savings deposits with post office savings bank M₃ = M₁+ net time deposits of banks.
M₄ = M₃ + total deposits with post office savings organisation (excluding National Savings certificates)

Question 6.
Explain the main functions of central bank.
Answer:
The main functions of Central bank are as follows:
(i) Bank of Note Issue: In the modem time, issuing of notes is the main function of the central bank of every country in the world. Central bank has the monopoly in this regard. In India, RBI issues notes as a central bank of the country except one rupee note, which his issued by the ministry of finance, government of India.

(ii) Banker, Agent and Advisor to the Government: The central bank acts as a banker, agent and advisor to the government

(iii) Banker’s Bank: Central bank acts as a banker to all other banks in the country just as commercial banks act as a banker to general public.

(iv) Lender of the Last Resort: During crisis, central bank acts as a lender of the last resort. The central bank stands by the commercial banks as a guarantor and extends loans to ensure the solvency of the latter. This saves the commercial banks from possible breakdown.

(v) Custodian of the Foreign Exchange Reserve: The central bank acts as a custodian of the foreign exchange reserves of the country.

(vi) Custodian of Cash Reserve of the Commercial Banks: The central bank also keeps the cash reserves of the commercial banks.

(vii) Bank of Central Clearance, Settlement and Transfer: Central bank is an institution where all the transactions of commercial banks are cleared, settled, and transferred very easily.

(viii) Control of Credit: The central bank has got so many instruments to control credit like bank rate, open market operation, cash reserve ratio, credit rationing, moral suasion and direct actions.

Question 7.
Explain any two methods of credit control used by Central Bank.
Answer:
Methods of credit control used by central bank are as follows:
(i) Bank Rate: Bank rate is the minimum rate at which the central bank discounts the first class bills of exchange and provides credit to’the commercial banks. The central bank increases the bank rate to correct the situation of inflationary gap or excess demand in the economy, Higher bank rate reduces the lending capacity of the commercial banks as they get funds at a higher interest rate from the central bank.

Consequently, money supply contracts in the economy as the public borrows less at high rate of interest. Similarly, the central bank decreases the bank rate to correct the situation of deflationary gap or deficient demand in the economy, Lower bank rate increases the lending capacity of the commercial banks as they get funds at a lower interest rate from the central bank Consequently, money supply expands in the economy as public borrows more at low rate of interest.

(ii) Open Market Operations: Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market. The central bank sells government securities to commercial -banks and general public in a bid to correct the situation of inflationary gap or excess demand.

This decreases the stock of high powered money in the economy. Similarly, the central bank- purchases government securities from commercial banks and general public in a bid to correct the situation of deflationary gap or deficient demand. This increased the stock of high powered money in the ecbnoitiy.

Question 8.
Explain the main functions of central bank.
Answer:
The main functions of Central bank are as follows:
(i) Bank of Note Issue: In the modem time, issuing of notes is the main function of the central bank of every country in the world. Central bank has the monopoly in this regard. In India, RBI issues notes as a central bank of the country except one rupee note, which his issued by the ministry of finance, government of India.

(ii) Banker, Agent and Advisor to the Government: The central bank acts as a banker, agent and advisor to the government

(iii) Banker’s Bank: Central bank acts as a banker to all other banks in the country just as commercial banks act as a banker to general public.

(iv) Lender of the Last Resort: During crisis, central bank acts as a lender of the last resort. The central bank stands by the commercial banks as a guarantor and extends loans to ensure the solvency of the latter. This saves the commercial banks from possible breakdown.

(v) Custodian of the Foreign Exchange Reserve: The central bank acts as a custodian of the foreign exchange reserves of the country.

(vi) Custodian of Cash Reserve of the Commercial Banks: The central bank also keeps the cash reserves of the commercial banks.

(vii) Bank of Central Clearance, Settlement and Transfer: Central bank is an institution where all the transactions of commercial banks are cleared, settled, and transferred very easily.

(viii) Control of Credit: The central bank has got so many instruments to control credit like bank rate, open market operation, cash reserve ratio, credit rationing, moral suasion and direct actions.

Question 9.
Explain any two methods of credit control used by Central Bank.
Answer:
Methods of credit control used by central bank are as follows:
(i) Bank Rate: Bank rate is the minimum rate at which the central bank discounts the first class bills of exchange and provides credit to the commercial banks.

The central bank increases the bank rate to correct the situation of inflationary gap or excess demand in the economy, Higher bank rate reduces the lending capacity of the commercial banks as they get funds at a higher interest rate from the central bank.

Consequently, money supply contracts in the economy as the public borrows less at high rate of interest. Similarly, the central bank decreases the bank rate to correct the situation of deflationary gap or deficient demand in the economy, Lower bank rate increases the lending capacity of the commercial banks as they get funds at a lower interest rate from the central bank Consequently, money supply expands in the economy as public borrows more at low rate of interest.

(ii) Open Market Operations: Open market operation is the policy of the central monetary authority to sell and buy the government securities in the market. The central bank sells government securities to commercial -banks and general public in a bid to correct the situation of inflationary gap or excess demand.

This decreases the stock of high powered money in the economy. Similarly, the central bank- purchases government securities from commercial banks and general public in a bid to correct the situation of deflationary gap or deficient demand. This increased the stock of high powered money in the economy.

Question 10.
How does money solve the problem of double coincidence of wants? Explain with an example.
Answer:
Money acts as an intermediary in the exchange transactions of goods and services. Money solves services. For example, if a vegetable grocer wants a cart but the cart manufacturer wants clothes, and not vegetables, then the grocer can use money to buy a cart. Similarly, the cart manufacturer can then use the money to buy clothes. Thus, everyone’s wants can be satisfied as money acts as a medium of exchange.

Money is also called a bearer of options or generalised purchasing power. This indicates the freedom of choice that the use of money offers. This function can only be performed properly if the value of money remains constant.

In This Post we are  providing AGGREGATE DEMAND AND ITS RELATED CONCEPT NCERT MOST IMPORTANT QUESTIONS for Class 12 MACROECONOMICS which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON AGGREGATE DEMAND AND ITS RELATED CONCEPT

1. Define Marginal Propensity to Consume.
Ans. The ratio between the change in consumption expenditure with the change in income is called Marginal Propensity to Consume.

2. Give the meaning of Marginal Propensity to Save.  
or
Define Marginal Propensity to Save.              (All India 2009; Delhi 2008C)
Ans. Marginal Propensity to Save is the ratio of change in saving with the change in income.

                                                 ‘

3. Give the meaning of Aggregate Demand.
or
Define Aggregate Demand.      
Ans. The sum, total of the demand for all the goods and services in an economy during an accounting year is termed as Aggregate Demand of the economy. Aggregate Demand of an economy is measured in terms of the (expected) Total Expenditure on all products (goods and services) in the economy during an accounting year.

4. (i) Distinguish between autonomous investment and induced investment.
(ii) On the basis of the following information about an economy, Calculate its equilibrium level of income     
Autonomous Consumption                                = Rs. 100
Marginal Propensity to Consume                    = 0.75
Investment                                                               = Rs. 5000
Ans. (i) Differece between autonomous investment and induced investment

5.  (i) Distinguish between Aggregate Demand and Aggregate Supply.
(ii) From the following data about aneconomy, calculate its equilibrium level of income
Marginal Propensity to Consume    =    0.8
Investment                                               = Rs.  5000
Autonomous Consumption               = Rs. 500

6. Complete the following table  

7. C = 100 + 0. AY is the consumption function of an economy, where C is consumption expenditure and Vis National Income. Investment expenditure is Rs. 1100. Calculate
(i) Equilibrium level of National Income.
(ii) Consumption expenditure at equilibrium level of National Income.                                                
Ans. Given,                                 C =100 + 0.4Y
l= Rs. 1100
(i) Equilibrium level of National Income
Y=C + I
Y= 100 + 0.4Y+1100
Y- 4Y = 100+1100
–                                                  0.6Y = 1200
Y= 1200/ 6
Y= Rs. 200
(ii) Consumption expenditure at equilibrium level of income
C = 100 + o.4y
C =100 + 0 .4 x 2000
C = 100 + 800=900
C =  Rs.900

8. C= 50+ 0. 5Y is the consumption function of an economy, where C is consumption expenditure and Y is National Income and investment expenditure is Rs. 2000 in an economy. Calculate
(i) Equilibrium level of National Income.
(ii) Consumption expenditure at equilibrium level of National Income.                                                                     
Ans.               Y = C + l   or  C+5
Given,            C = 50+0.5Y
l=Rs. 2000
(i) Equilibrium level of National Income
Y= C + I
Y= 50 +0.5y + 2000
0.5 Y= 50 + 2000 =2050/0.5
Y = Rs. 4100      (therefore, National Income =Rs. 4100)
(ii) Consumption expenditure at equilibrium level of National Income
C = 50 + 05y
C = 50 +05×4100
C= 50 + 2050
C= Rs. 2100          (therefore, Consumption expenditure =Rs. 2100)

9. Explain consumption function, with the help of a schedule and diagram. 
Ans. The functional relationship between the consumption expenditure and the income is known as consumption function.
C = f(Y), Where C = Consumption expenditure,
y = Income, and f = Functional relationship.
Consumption function in terms of an algebraic expression can be written as



The point B represents the break even point, where the consumption expenditure equals the income. To the left of point B, consumption is greater than income and to the right of point B, consumption is less than income

10. Explain saving function with the help of a schedule and diagram.
                                                                                                             
Ans. The functional relationship between the savings and income is known as saving function.
S = f (Y), Where S = Saving, Y = Income and f = Functional relationship.
Saving function as an algebraic expression, can be written as

Point E represents the break even point where income is equal to consumption hence, saving is equal to zero. To the left of point E, there is negative savings or dissavings (represents the situation when income is less then consumption), to the right of E, there is positive savings (represents the situation when income is greater than consumption).

In This Post we are  providing EXCESS DEMAND AND DEFICIENT DEMAND NCERT MOST IMPORTANT QUESTIONS for Class 12 BUSSINESS STUDIES which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON EXCESS DEMAND AND DEFICIENT DEMAND

1. Distinguish between inflationary gap and deflationary gap.
                                                                                                                   
Ans. The excess of Aggregate Demand above the level that is required to maintain full employment level of equilibrium, is termed as inflationary gap. Inflationary gap causes inflation and increases wage and price levels in the economy.
When there is involuntary unemployment in the economy, there is a shortage in Aggregate Demand from the level required to maintain a full employment equilibrium. This short fall is termed as deflationary gap. Deflationary gap causes reduction in wage and prices in the economy.

2. Explain the concept of excess demand in macroeconomics. Also, explain the role of open market operation in correcting it.
Ans. The situation in an economy, when Aggregate Demand is more than the Aggregate Supply corresponding to full employment level is termed as excess demand. In other words, the level of Aggregate Demand exceeds the level of Aggregate Supply even when there is full capacity production in the economy.

In the above figure, £ is the point where AD = AS, i.e. equilibrium point. But at the present. Aggregate Demand AD_ae is more than the Aggregate Supply. Hence, EF represents the excess demand in the economy.
Excess demand leads to reduction in inventories and inflation in the economy. High prices encourage producers to produce more to reach the desired level of stock. Hence, the AS will also rise and economy will attain a new equilibrium at point G with National Income of OP.
Role of Open Market Operations to Correct the Problem of Excess Demand
Open market operations refer to sale and purchase of securities by the Central Bank on behalf of government in the open market. It directly affects the supply of money in the hands of citizens of the country. –
In case of excess demand, the Central Bank sells its securities to common public and financial institutions. It reduces the supply of money in the economy and reduces the money/credit creation power of commercial banks. Thus, the Aggregate Demand comes down and the economy attains equilibrium.

3. Explain all the changes that will take place in an economy when Aggregate Demand is not equal to Aggregate Supply.
Ans. (i) AD > AS When AD is greater than AS, flow of goods and services in the economy tends to be less than their demand. The existing stocks of the producers would be sold out. To rebuild the desired stocks the producer would plan greater production. AS would increase to become equal to AD.
(ii) AD < AS When AD is less than AS, flow of goods and services in the economy tends to exceed their demand. As a result, some of the goods would remain unsold. To clear unwanted stocks, the producers would plan a cut in production. Consequently, AS would reduce to become equal to AD. This is how AS adapts itself to AD

4. Explain the meaning of under employment equilibrium. Explain two measures by which full employment equilibrium can be reached.
                                                                                                                   
Ans. In an economy, when AS = AD or S = I but without the fuller utilisation of labour force, the economy is said to be in under employment equilibrium.
Under employment equilibrium occurs when AS= AD but without the fuller utilisation of labour force.

Measures to Correct Under Employment Equilibrium
(i) Bank rate Central Bank should decrease the bank rate. A decrease in bank rate lowers the rate of interest and credit becomes cheap. Accordingly, the demand for credit expands and Aggregate Demand increases.
(ii) Open market operations By buying the government securities, the Central Bank injects additional purchasing power into the system which results in the expansion of credit. As a result Aggregate Demand increases.

5. Explain the concept of deficient demand in macroeconomics. Also, explain the role of bank rate in correcting it.

Ans. A situation in an economy, when the Aggregate Demand is less than the Aggregate Supply, corresponding to full employment level, is termed as deficient demand.

Deficient demand gives rise to a deflationary gap and leads the economy to an equilibrium level of income/output that is less than the full employment level of income. This leads to deflationary pressures on economy and increases the inventory of producers as sales falls. The producers are discouraged to produce more as price level fall. The economy therefore will attain a new equilibrium at point C with National Income of OP
Role of Bank Rate in Correcting the Problem of Deficient Demand
The rate at which the Central Bank lends money to commercial banks is termed as bank rate. In case of deficient demand, the Central Bank reduces the bank rate to increase the money supply in the economy. Reduction in bank rate increases the credit/money creation capacity of commercial banks and also reduces the market rate of interest which encourages people to borrow more. In this way, the Aggregate Demand increases to the level of Aggregate Supply and the economy attains equilibrium.

6. Explain the concept of deflationary gap. Also, explain the role of margin requirement in reducing it.
Ans. When there is involuntary unemployment in the economy, there is a short fall in Aggregate Demand from the level that is required to maintain a full employment equilibrium. This short fall is termed as deflationary gap.

Role of Margin Requirements to Reduce Deflationary Gap Margin requirement refers to the difference between the amount of loan granted and the current value of security offered for loans. In case of deflationary gap, the margin requirements are lowered to increase the flow of credit by encouraging people to borrow. As a result of that, the Aggregate Demand increases and ultimately the economy attains equilibrium.

7. Explain the role of the following in correcting deficient demand in an economy.
(i) Open market operations
(ii) Bank rate         
Ans. (i) Role of open market operations in correcting deficient demand Open market operations refers to sale and purchase of securities by the Central Bank on behalf of government in the open market. It directly affects the supply of money in the hands of commercial banks and citizens of the country. In case of deficient demand, the Central Bank purchase securities from public.
It increases the supply of money in the economy as well as credit/money creation power of commercial banks. Thus, the Aggregate Demand increases and ultimately the economy attains equilibrium.
(ii) Role of bank rate In correcting deficient demand The rate at which the Central Banks lends money to commercial bank is termed as bank rate. In case of deficient demand, the Central Bank reduces the bank rate to increase the money supply in the economy.
Reduction in bank rate increases the money/credit creation power of commercial banks and also reduces the market rate of interest which encourages people to borrow more. In this way, the Aggregate Demand increases and ultimately the economy attains equilibrium.

8. Explain the role of the following in correcting excess demand in an economy
(i) Bank rate
(ii) Open market operations
Ans. (i) Role of bank rate in correcting excess demand The rate at which the Central Bank lends money to commercial bank is termed as bank rate. In case of excess demand, the Central Bank increases the bank rate to decrease the supply of money in the economy. Increase in bank rate reduces the money creation power of commercial banks and also increases the market rate of interest which discourages public to borrow loans. The Aggregate Demand comes down and the excess demand is corrected.
(ii) Role of open market operations in correcting excess demand Open market operations refer to sale and purchase of government securities by the Central Bank in open market. In case of excess demand, the Central Bank sells the securities to public.
It reduces the supply of money and also reduces the credit creation power of commercial banks. In this way, the Aggregate Demand of economy comes down and the problem of excess demand is corrected.

9. Explain the concept of inflationary gap. Also, explain the role of legal reserves in reducing it.  
or
Define and represent inflationary gap on a diagram. Explain the role of the varying reserves requirement in removing the gap.
or
Explain the concept of inflationary gap. Use diagram. Also, explain the role of legal reserve ratio in removing the gap. 
Ans. (i) Inflationary gap occurs when AD > AS corresponding to full employment level. This inflationary gap i.e. excess of Aggregate Demand causes inflation in the economy and price levels tend to rise.

(ii) Role of legal reserves to correct the problem of inflationary gap
Legal reserves like Cash Reserve Ratio and Statutory Liquidity Ratio are the tools to correct the problems of inflationary gap.
(i) Cash Reserve Ratio (CRR) Every commercial bank has to keep a certain proportion of its total demand and time deposits in the form of cash and other liquid assets with the Central Bank. This ratio is termed as cash reserve ratio. To correct the problem of inflationary gap the Central Bank increases the CRR. It reduces the supply of money and credit money creation capabilities of commercial banks. Due to lesser supply of money, the Aggregate Demand comes down and the economy attains equilibrium situation.
(ii) Statutory Liquidity Ratio (SLR) It refers to a fixed percentage of the total assets of a bank in the form of cash or other liquid assets that is required to be maintained by the bank with themselves. During the situation of inflationary gap, SLR is increased. This reduces the credit creation capacity of commercial banks and reduces the flow of money in the economy. As a result of that, the Aggregate Demand comes down and ultimately the economy attains equilibrium again.

10. Explain the meaning of equilibrium level of income. Can there be an unemployment in the economy at an equilibrium level of income? Explain.
Ans. Equilibrium level of income is the level at which Aggregate Demand is equal to Aggregate Supply in the. economy i.e. AD = AS. In other words, when desired output equals desired expenditure , equilibrium output or income is attained.

In This Post we are  providing NATIONAL INCOME AND RELATED AGGREGATES NCERT MOST IMPORTANT QUESTIONS for Class 12 MACROECONOMICS which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON NATIONAL INCOME AND RELATED AGGREGATES

1. Distinguish between stock and flow variables with suitable examples.

Ans:- Difference between stock and flow is.

Basis	Stock	Flow
Time	It relates to a point of time	It relates to the period of time
Dimension	It is not time dimensional	It is time dimensional as per hour, per month, per year.
Impact	It influences the flow. for example, more is capital, greater is the flow of goods and services.	It influences the stock, for example, the more is the flow of investment, the greater would be the capital.
Concept	Static concept	Dynamic concept
Example	capital, wealth, bank balance	Income, expenditure, profit

2. What are capital goods? How are they different from consumption goods? 

Ans:- Capital goods are those final goods that are capable of being used for producing other goods and services. These are goods are used for generating income.

For example:- plant and machinery, equipment, etc.

Basis	Consumption Goods	Capital Goods
Meaning	These goods are purchased or own produced by consumers to satisfy their wants and not for resale	These goods are purchased or own produced by producers for the production of other goods. such goods are not meant for resale.
Use	used by consumers for consumption purposes.	Used by producers to produce other goods and services
Demand	High	Less
Example	bread, butter, tv fridge by consumers.	equipment, machinery, plant by producers

3. Which among the following are final goods and which are intermediate goods? Give reasons. 

a) Milk purchased by a tea stall
b) Bus purchased by a school
c) Juice purchased by a student from the school canteen.

Ans:-

a) Milk purchased by a tea stall is an intermediate consumption. As milk will be used as a raw material to make tea (final goods) within a year.

b) Bus purchased by a school is the final goods. As it would be used by schools for the long term and not meant for resale.

c) Juice purchased by a student from the school canteen is the final good. As it is purchased by a consumer (student) for the satisfaction of his own wants not for resale.

4. Explain with the help of an example. the basis of classifying goods into final goods and intermediate goods.

Ans:- The basis of classification of final goods and intermediate goods is the end-user or end use of the product.

If the goods are in the hand of the end-user (final user) and not going to be sold further. It is termed as final goods. For example, machines purchased by producers, food purchased by households. such goods have come out of the production boundary line and are in the hand of the final user.

On the other hand, if the goods are within the production boundary line and will still be used as raw material in making further goods or if it is final goods but meant for resale. Such products are not in the hand of end-users and are termed as intermediate goods.

5. Distinguish between final goods and intermediate goods. Give an example of each. 

Ans:- difference between intermediate goods and final goods.

Basis	Intermediate Goods	Final Goods
end-user	end-user is a producer	end-user may producer or consumer
Purpose	used as raw material in producing other goods.	is used as consumption goods by consumer or capital goods by producer
Production Boundary	is still within the production boundary	is outside the production boundary
Examples	leather used in the shoe industry, the steel used in the production of kitchen utensils	fridge purchased by households, Machine purchased by producers

6. Explain the circular flow of Income. [All India 2017], [Delhi c 2014], [All India C 2012]

Ans:- Circular flow of Income refers to unending flows of production of goods and services and income and expenditure in an economy.

It show the redistribution of income in a circular manner between production units and households

It comprises of three phases:-

Production Phase:- This phase is also called the income generation phase. In this phase, households provide factor services to production units and produce goods and services. Income is generated.

Income Distribution Phase:- Production units distribute this income to the factor owners.

Expenditure Phase:- Income received by households, spent on goods and services produced by those units. In this phase, all income received by households returns to production units.

Once, the goods and services purchased by households are completely consumed. They again demand goods. Now again producer has the opportunity to produce goods and these three phases go on in circular format again & again.

It can be better understood with the diagram given below.

7. Distinguish between real and nominal gross domestic product. [All India c 2014], [All India 2010]

Ans:- Difference between the Real and Gross domestic product is.

Basis	Real GDP	Nominal GDP
Other Name	It is also called GDP at a constant price	It is also called GDP at the current year price.
Definition	It is the market value of the final goods and services produced within the domestic territory of a country during an accounting year, as estimated at base-year prices.	It is the market value of the final goods and services produced within the domestic territory of a country during an accounting year, as estimated at current year prices.
Welfare	It is a better measure of the welfare of people than Nominal GDP	It is not a good measure of the welfare of people
Changes	Its value changes, when the quantity of output changes.	Its value can changes either quantity of output or price changes.

8. Find Net Value Added at Factor Cost.

Items	(₹ in lakh)
i) Durable use producer goods with a life span of 10 years	10
ii) Single-use producer goods	5
iii) Sales	20
iv) Unsold output produced during the year	2
v) Taxes on production	1

Ans:-

Value of Output = Sales + Change in Stock

Value of Output = iii) + iv) = ₹ 20 + ₹ 2 = ₹ 22

GVA at MP = Value of Output – Intermediate Consumption

Intermediate Consumption = Single use producer goods = ₹ 5

GVA at MP = ₹ 22 – ₹ 5 = ₹ 17

Consumption of fixed capital = Total value of durable use goods/Total life span = ₹10/₹10 = ₹ 1 lakh

Net Indirect tax = Taxes on production – subsidy of production = ₹ 1 – ₹ 0 = ₹ 1

Net Value added at FC = GVA at MP – consumption of fixed capital – Net Indirect tax (Indirect Tax – Subsidy)

NVA at FC = ₹ 17 – ₹ 1 – ₹ 1 = ₹ 15

9. Find the Net Value Added at Market Price. 

Items	(₹ in crore)
1. Output Sold (units)	800
2. Price per unit of output	20
3. Excise	1600
4. Import Duty	400
5. Net Change in Stock	– 500
6. Depreciation	1000
7. Intermediate cost	8000

Ans:-

Sales = Quantitiy * Price

Sales = 800 * 20 = ₹ 16000 crore.

Value of Output = Sales + Change in Stock

Value of Output = 16000 + (- 500)

Value of Output = ₹ 15500

GDP at MP = Value of Output – Intermeciate cost

GDP at MP = 15500 – 8000

GDP at MP = ₹ 7500 crore

NDP at MP = GDP at MP – Depreciation

NDP at MP = 7500 – 1000

NDP at MP = ₹ 6500 crore

10. Find Net Value Added at Market Price. 

Items	(₹ in crore)
1. Depreciation	700
2. Output Sold (Units)	900
3. Price per nit of Output	40
4. Closing Stock	1000
5. Opening Stock	800
6. Sales tax	3000
7. Intermediate cost	20000

Ans:-

Sales = Quantity * Price

Sales = 900 * 40 = 36000

Value of Output = Sales + Change in Stock (Closing stock – Opening stock)

Value of Output = 36000 + (1000 – 800)

Value of Output = 36200

GDP at MP = Value of Output – Intermediate cost

GDP at MP = 36200 – 20000 = 16200

NDP at MP = GDP at MP – Depreciation

NDP at MP = 16200 – 700

NDP at MP = ₹ 15500 crore

In This Post we are  providing  INTRODUCTION TO MACROECONOMICS AND ITS CONCEPTS NCERT MOST IMPORTANT QUESTIONS for Class 12 BUSSINESS STUDIES which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON INTRODUCTION TO MACROECONOMICS AND ITS CONCEPTS

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1. Describe the five major sectors in an economy according to the macroeconomic point of view.
Ans: An economy may be’ divided into different sectors depending on the nature of study. 

1. Producer sector engaged in the production of goods and services.
2. Household sector engaged in the consumption of goods and services.
   Note: Households are taken as the owners of factors of production.
3. The government sector engaged in activities like taxation and subsidies.
4. Rest of the world sector engaged in exports and imports.
5. Financial sector (or financial system) engaged in the activity of borrowing and lending.

2. What are the four factors of production and remunerations to each of these called?
Ans: 

3. What are the important features of a capitalist economy?
Ans: Features of capitalist economy are: 

1. Private ownership of land and capital.
2. Profit is the only motive.
3. Free play of the market forces of demand and supply.
4.  Government looks after growth, stability and social justice in the economy.

4. Define consumption goods and what are its categories.
Ans: Consumption goods are those which satisfy the wants of the consumers directly.
For example, cars, television sets, bread, furniture, air-conditioners, etc. Consumption goods can further be subdivided into the following categories:

1. Durable goods: These goods have an expected life time of several years and of relatively high value. They are motor cars, refrigerators, television sets, washing machines, air-conditioners, kitchen equipments, computers, communication equipments etc.
2.  Semi-durable goods: These goods have an expected life time of use of one year or slightly more. They are not of relatively great value. Examples are clothing, furniture, electrical appliances like fans, electric irons, hot plates and crockery.
3. Non-durable goods: Goods which cannot be used again and again, i.e., they lose their identity in a single act of consumption are known as non durable goods. These are food grains, milk and milk products, edible oils, beverages, vegetables, tobacco and other food articles.
   goods which satisfy the human wants directly. They cannot be seen or touched, i.e., they are intangible in nature. These are medical care, transport and communications, education, domestic services rendered by hired servants, etc.

5. Define capital goods and its categories.
Or
Define ‘capital goods’
Ans: 

1. Capital goods are defined as all goods produced for use in future productive processes.
2. For example, All the durable goods like cars, trucks, refrigerators, buildings, air crafts, air-fields and submarines used to produce goods and services for sale in the market are a part of capital goods.
3. Stocks of raw materials, semi finished and finished goods lying with the producers at the end of an accounting year are also a part of capital goods.
4. Some more examples of capital goods are machinery, equipment, roads and bridges.
5. These goods require repair or replacement over time as their value depreciate over a period of time.

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6. Explain that Domestic territory is bigger than the political frontiers of a country.
Ans: In layman terms, the domestic territory of a nation is understood to be the territory lying within the political frontiers (or boundaries) of a country. But in national income accounting, the term domestic territory is used in a wider sense. Based on ‘freedom’ criterion, the scope of economic territory is defined to cover:

1. Ships and air crafts owned and operated by normal residents between two or more countries. For example, Indian Ships moving between China and India regularly are part of domestic territory of India. Similarly, planes operated by Air India between Russia and Japan are part of the domestic territory of India. Similarly, planes operated by Malaysian Airlines between India and Japan are a part of the domestic territory of Malaysia.
2. Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international waters where they have exclusive rights of operation. For example, Fishing boats operated by Indian fishermen in international waters of Indian Ocean will be considered a part of domestic territory of India.
3. Embassies, consulates and military establishments of a country located abroad. For example, Indian Embassy in Russia is a part of the domestic territory of India.
   ‘Consulate’ is an office or building used by consul (an officer commissioned by the government to reside in a foreign country to promote the interest of the country to which he belongs).

7. “All Producer Goods are not Capital Goods”. Explain.
Ans: Producer goods are all those goods which are used in the process of production i.e., which are used in the production of other goods. Producer goods include two types of goods:

1.  Single-use Producer Goods: Goods used as raw material by the producers. It includes raw material like coal, wood, etc. They are not capital goods as they cannot be repeatedly used in the production process.
2. Capital Goods: Goods which are used as fixed assets by the producers, like plant and machinery, which can be repeatedly used in the production process.
   So, it can be said that all capital goods are producer goods, but all producer goods are not capital goods.

8. “Machine purchased is always a final good.” Do you agree? Give reasons for your answer.
Ans: No, it is not necessary that machine purchased is a final good. It will depend upon its use.

1. If a machine is purchased by a household, then it is a final good. For example, washing machine purchased by a consumer household is a final goods.
2.  If it is purchased by a firm for its own use, then it is also a final good. For example, refrigerator purchased by a firm.
3.  If it is bought by a firm for resale, then it is an intermediate good. For example, machine purchased by a machine dealer.

9. “ Machine purchased is always a capital good.” Do you agree? Give reasons for your answer.
Ans: No, it is not necessary that machine purchased is a capital good. It will depend upon its use.

1.  If a sewing machine is purchased by a tailor, then it is a fixed asset of the tailor and considered to be a capital good. But the same machine purchased by a consumer household is considered to be a durable use consumer goods.
2. If a car purchased by a taxi driver as a taxi or if purchased by a firm for use in its business is a capital good. But the same car purchased by a consumer household is a durable use consumer goods.
   Note: So, finally, the end user of a good determine, whether it is capital good or durable use consumer goods. If an end user of a durable goods is a producer, it is a capital good. If an end user of a durable goods is a consumer household, it is a durable use consumer goods. So, capital goods are only those durable goods which are used as producer goods, not as consumer goods.

10. The concept of Normal Resident helps to estimate ‘National Product’. Defend or refute.

Ans: The concept of Normal Resident helps to estimate “National Product’. National Product includes production activities of normal residents irrespective of fact whether performed within the economic territoiy or outside it. The money value of national product is termed as National Income.

In This Post we are  providing Chapter- 12 CONSUMER PROTECTION NCERT MOST IMPORTANT QUESTIONS for Class 12 BUSSINESS STUDIES which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON CONSUMER PROTECTION

1.Which claims can be appealable bt^core the Supreme Court under Consumer
Protection Act?  
Ans. An order passed by the National Commission in a matter of its original jurisdiction is appealable before the Supreme Court. It means only those appeals where the value of goods and services in question, along with the compensation claimed exceed ? 1 crore and where the aggrieved party was not satisfied with the order of the National Commission can be taken to the Supreme Court.

2.How does a business use self regulations for consumer protection?
Ans. Enlightened business firms realise that it is in their long-term interest to serve the customers well. Socially responsible firms follow ethical standards and practices in dealing with their customers. Many firms have set up their customer service centres and grievance cells to redress the problems and grievances of their customers.

3.How are consumer grievances redressed by the three-tier machinery under CPA,
1986? Explain.
Ans. The three-tier-machinery under CPA, 1986 consist of District Forum, State Commission and the National Commission. A consumer can file a case in District Forum if the vaiue of goods and services alongwith the compensation claimed, does not exceed Rs 20 lakh, in the State Commission if the value of goods and services alongwith the compensation claimed is over Rs 20 lakh but less than rs 1 crore, and in the National commission, if the value of goods and services alongwith the compensation claimed is above Rs 1 crore.
On receiving the complaint, the District Forum/State Commission/National Commission shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a sample, thereof, shall be sent for testing in a laboratory. The court shall pass an order after considering the test report and hearing to the party against whom the complaint is filed.

4.Give the definition of ‘Consumer’ as per CPA, 1986.
Ans. Under the Consumer Protection Act, 1986, the term ‘consumer’ has been defined as any person who buys goods or hires or avail any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment. It also includes any user of such goods with the approval of the buyer or any beneficiary of services when such goods or services are availed of with the approval of the person concerned but does not include a person who avails such services for any commercial purpose.

5.State any eight reliefs available to a consumer under the provision of CPA
Ans. The reliefs available to a consumer under the CPA, 1986 are:
(i) To remove the defects in goods or deficiency in services.
(ii) To replace the defective product with a new one, free from any defect.
(iii)To refund the price paid for the product.
(iv) To pay a reasonable amount of compensation for any loss suffered.
(v)To pay punitive damages in appropriate circumstances.
(vi)Not to offer hazardous goods for sale.
(vii)To withdraw the hazardous goods from sale.
(viii) To cease the manufacture of hazardous goods.

6.Anita purchased a book from Satish book stores. While reading the book, she found that ten pages were missing. She approached the book seller and complained about the missing pages. The seller promised that if the publisher was ready to change the book, he would change the same. After one week, the seller informed Anita that the publisher had refused to change the book.
Where can Anita file a complaint against the seller of the book? Give reason in support of your answer. Also, explain who is a consumer as per Consumer Protection Act, 1986. 
Ans. Anita can file a complaint against the seller of the book in the District Forum. District Forum is established by the State Government in each district. In District Forum, only such complaints can be filed in which the value of goods or services and the compensation claimed is not more than Rs 20 lakhs. Consumer as per CPA, 1986   Under the Consumer Protection Act, 1986, the term ‘consumer’ has been defined as any person who buys goods or hires or avail any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment. It also includes any user of such goods with the approval of the buyer or any beneficiary of services when such goods or services are availed of with the approval of the person concerned but does not include a person who avails such services for any commercial purpose.

7.Harish purchased a medicine from Bhatia Medical Stores for his son, who had high fever. Even after giving the medicine his son’s condition did not improve and he had to be hospitalised. Doctor informed Harish that medicine given to his son was spurious. Harish complained about this to Bhatia Medical Stores. As-a result, Bhatia Medical Stores decided to file a complaint against the manufacturer in the consumer court. Can Bhatia Medical Stores do this? Give reason in support of your answer. Also, explain who is a consumer as per Consumer Protection Act, 1986.
Ans. ‘Bhatia Medical Stores’ cannot file a complaint against the manufacturer in the consumer court because Bhatia Medical Stores is not a consumer in this case. He is not a user but has obtained medicine for resale purpose/commercial purpose.

Meaning of Consumer as per Consumer Protection Act, 1986   Anita can file a complaint against the seller of the book in the District Forum. District Forum is established by the State Government in each district. In District Forum, only such complaints can be filed in which the value of goods or services and the compensation claimed is not more than Rs 20 lakhs.
Consumer as per CPA, 1986   Under the Consumer Protection Act, 1986, the term ‘consumer’ has been defined as any person who buys goods or hires or avail any service for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment. It also includes any user of such goods with the approval of the buyer or any beneficiary of services when such goods or services are availed of with the approval of the person concerned but does not include a person who avails such services for any commercial purpose

8.Explain the following as ways and means of consumer protection
(i)Consumer awareness
(ii)Government
Ans. (i) Consumer awareness A well informed consumer will safeguard himself from unfair trade practices. A consumer should be well informed about his rights, duties and reliefs available to him. Only then, he would be in a position to raise his voice against unfair trade practices and safeguard his interests. In addition to this, an understanding of his responsibilities would also enable a consumer to safeguard his interest.
(ii) Government The government can protect the interest of the consumers by enacting various legislations. CPA is one of them which provides 3-tier system of redressal to the aggrieved consumers. The legal framework in India encompasses various legislations which provide protection to consumers.

9.Reena purchased one litre of pure desi ghee from a shopkeeper. After using it, she had a doubt that it is adulterated. She sent it for a laboratory test which confirmed that the ghee is adulterated. State any six reliefs available to Reena, if she complains and the consumer court is satisfied about the genuineness of the complaint.
Ans. Reliefs available to Reena are:
(i) To replace the adulterated ghee.
(ii) To refund the price paid for the product.
(iii) To pay a reasonable amount of compensation for any loss or injury/sickness suffered by her due to the negligence of the manufacturer.
(iv) To pay punitive damages in appropriate circumstances.
(v)To withdraw the adulterated ghee from sale.
(vi)To cease manufacture of adulterated ghee.

10.Prakhar purchased an ISI mark electric iron from Bharat Electricals. While using,he found that it was not working properly. He approached the seller and complained for the same. The seller satisfies Prakhar by saying that he will ask the manufacturer to replace this iron. The manufacturer refused to replace and Bharat Electricals decided to file a complaint in the consumer court. Can Bharat Electricals do this. Why? Also explain who is a consumer as per Consumer Protection Act, 1986.
Ans. Bharat Electricals cannot file a complaint. This is because Bharat Electricals is not a consumer as per Consumer Protection Act, 1986 because they bought the goods for resale or for commercial purpose. Under the Consumer Protection Act, a consumer is defined as:
(i) A person who buys goods for consideration which has been paid promised, or partly paid and partly promised or under any scheme of deferred payment. It includes any user of such goods, when such use is made with the approval of the buyer but does not include a person who obtains goods for resale or any commercial purpose.
(ii) Any person who hires or avails any service for consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment. It includes any beneficiary of services when such services are availed of with the approval of the person concerned but does not include a person who avails of such services for any commercial purpose.

In This Post we are  providing Chapter- 11 MARKETING MANAGEMENT NCERT MOST IMPORTANT QUESTIONS for Class 12 BUSSINESS STUDIES which will be beneficial for students. These solutions are updated according to 2021-22 syllabus. These MCQS  can be really helpful in the preparation of Board exams and will provide you with a brief knowledge of the chapter

NCERT MOST IMPORTANT QUESTIONS ON MARKETING MANAGEMENT

1.Distinguish between selling concept and marketing concept of marketing
management philosophies on the basis of main focus.
Ans. (i) Selling concept Firms believe that aggressive selling and promotional efforts will convince a customer to buy a product.
(ii) Marketing concept Customers’ needs and customers’ satisfaction is the key to success of an enterprises.

2.What is meant by selling concept of marketing?
Ans. Firms believe that aggressive selling and promotional efforts will convince a customer to buy a product.

Ans. The marketing management philosophy referred here is ‘Marketing concept’. This concept emphasis that in the long-run, profits can be maximised by identifying and satisfying the needs of present and potential customers. Therefore, customer satisfaction becomes the focal point of all business decisions.

3.Nisha, a school bag manufacturer, decided to improve the product for profit maximisation and thus, added a water bottle holder to the existing design.
(i)Identify the marketing management philosophy adopted by Nisha.
(ii)Explain this philosophy on the basis of (a) Main focus and (b) Means and ends
Ans. (i) Product concept or philosophy Firms which follow the product concept, propose that the way to realise business goals is by making high quality products. These firms manufacture the products of superior quality. Nisha is trying to bring improvement in quality, by corporating a new feature, i.e. adding a water bottle holder in the bag.
(ii) (a) Main focus The main focus of this concept is to improve the quality of products. The marketers now believed that potential exchange would be realised when the products are of high quality. Thus, the firm now focused on making superior products and improving them overtime.
(b) Means Product improvement.
Ends Profit through improvement in product quality.

4.Mansi, a shoe manufacturer for school students, decided to maximise her profit by producing and distributing at large scale and thereby reducing the Average Cost of production.
(i)Identify the marketing management philosophy adopted by Mansi.
(ii) Explain this philosophy or concept on the basis of
(a) Main focus              (b) Means and ends
Ans. (i) Production concept or philosophy.
(ii) (a) Main focus Main focus of this concept is to maximise the quantity of product.
(b) Means Availability and affordability of product.
Ends Earning profits through large scale production and distribution.

5.Explain market planning, product designing and development as functions of marketing. .
or
Explain any three functions of marketing.
or
Explain any two functions of marketing.
or
Explain the following functions of marketing.
(i)Marketing planning (ii)Product designing and  development
or
Explain the following functions of marketing
(i)Gathering and analysing market information
(ii) Customer support services.  
Ans. The main functions of marketing are as follows:
(i) Gathering and analysing market information A marketer has to gather information about the market. Gathering and analysing market information helps in identifying the needs of the customers. It forms the basis for product development. It also helps in identifying the opportunities, threats, strengths and weaknesses of the organisation.
(ii) Market planning The marketer develops appropriate marketing plans to capture or enhance the existing market share. It provides the guidelines to achieve the marketing objectives, e.g. a marketer of colour TVs, having 2% of current market share in the country, aims at enhancing his market share *0 20% in the next three years.
(iii) Product designing and development Product designing and development is concerned with anticipating customers’ needs, developing new products and improving the existing products so as to meet the expectations of customers, e.g. when we plan to buy any product say a motorbike, we not only see its features like cost, mileage, etc but also the design, shape, style, etc.
(iv) Customer support services Customer is the king of modern market. So customer satisfaction is the main motto of every business firm. Hence, a very important function of marketing management relates to developing customer support services such as after sale services, handling customer complaints, procuring credit services, maintenance services, technical services, and consumer information, etc. All these services aim at providing maximum satisfaction to the customers which is the key to success in modern days.

6.What is meant by production concept of marketing?
Ans. Production concept is based on the belief that profits could be maximised by producing at large scale, thereby reducing the Average Cost of production. A large number of firms believe that it is easy to exchange the products if they were widely available at an affordable price. Thus, availability and affordability were considered the key to success.

7.What is meant by selling concept of marketing?
Ans. Firms believe that aggressive selling and promotional efforts will convince a customer to buy a product. It was assumed that the customers will not buy enough, unless they are adequately convinced and motivated to do so.

Therefore, aggressive selling and promotional efforts are made to persuade the customers. The use of promotional techniques such as advertising, personal selling and sales promotion were considered essential for selling of products.

8.What is meant by product concept of marketing?
Ans. Consumers prefer products with superior quality, performance and features. The companies who believe in the philosophy of product concept are of the opinion that if the quality of goods or services is of good standard, the customers can easily be attracted towards it. The basis of this thinking is that the customers get attracted towards the products of good quality. On the basis of this philosophy, companies direct their marketing efforts to increase the quality and features of their product.

7.Define marketing and state any three functions of marketing.
or
What is meant by marketing? State any three functions of marketing.
Ans. Marketing is the sum total of all those activities which move goods and services from the producers to the consumers.
According to Philip Kotler, ‘Marketing is that social process by which individual and groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others’.
The three main functions of marketing are :
(i) Marketing planning  The marketer develops appropriate marketing plans to capture or enhance the existing market share. It provides the guidelines to achieve the marketing objectives, e.g. a marketer of colour TVs, having 2% of current market share in the country, aims at enhancing his market share *0 20% in the next three years.
(ii) Production designing and development  Product designing and development is concerned with anticipating customers’ needs, developing new products and improving the existing products so as to meet the expectations of customers, e.g. when we plan to buy any product say a motorbike, we not only see its features like cost, mileage, etc but also the design, shape, style, etc.
(iii) Pricing of products It refers to the amount of money which the customers have to pay to obtain a product. Price is an important factor affecting the success or failure of a product in the market. The demand for a product or service is related to its price. Generally, lower the price, higher would be the demand for the product and vice-versa.

8.Define marketing management. State any three objectives of marketing
management.
Ans. According to Philip Kotler, ‘Marketing management is an art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer values of management’. It refers to planning, organising, directing and control of the activities which facilitate exchange of goods and services between producers and consumers of products and services.
The three main objectives of marketing management are as follows:
(i) Creation of demand The marketing manager always tries to create the demand not by unfair means but by analysing the needs and wants of the customers and then producing the products, which satisfies the customer’s need.
(ii) Market share Every business firm wants to capture a larger share of the market. Therefore, marketing techniques adopted by marketing manager help to get a big share in the market.
(iii) Goodwill and reputation Marketing management helps a firm in building the image for its products through advertising high quality, caring for customer satisfaction, after sale service, smooth supply, etc.

9.’Bending the customer according to the product’ and ‘development of the product according to customer needs’ are two important concepts of marketing management’. Identify the concepts and differentiate between the two. 
or
‘Find wants and fill them ‘and’ create products and sell them’ are the two important concepts of marketing. Identify and differentiate between these two concepts.
Ans. ‘Bending the customer according to the product’ refers to ‘selling concept’ and ‘developing the product according to the customer needs’ refers to ‘marketing concept’ of marketing management.

10.Explain the following functions of marketing
(i)Gathering and analysing market information
(ii)Product designing and development
(iii)Market planning
(iv) Customer support services.
Ans. The main functions of marketing are as follows:
(i) Gathering and analysing market information A marketer has to gather information about the market. Gathering and analysing market information helps in identifying the needs of the customers. It forms the basis for product development. It also helps in identifying the opportunities, threats, strengths and weaknesses of the organisation.
(ii) Market planning The marketer develops appropriate marketing plans to capture or enhance the existing market share. It provides the guidelines to achieve the marketing objectives, e.g. a marketer of colour TVs, having 2% of current market share in the country, aims at enhancing his market share *0 20% in the next three years.
(iii) Product designing and development Product designing and development is concerned with anticipating customers’ needs, developing new products and improving the existing products so as to meet the expectations of customers, e.g. when we plan to buy any product say a motorbike, we not only see its features like cost, mileage, etc but also the design, shape, style, etc.
(iv) Customer support services Customer is the king of modern market. So customer satisfaction is the main motto of every business firm. Hence, a very important function of marketing management relates to developing customer support services such as after sale services, handling customer complaints, procuring credit services, maintenance services, technical services, and consumer information, etc. All these services aim at providing maximum satisfaction to the customers which is the key to success in modern days.