economics model 1 Flashcards by chess only

Question 30.
Briefly explain how statistics helps to study economics.

Understanding Economic Problems:

Qualitative and Quantitative Facts

Identify Causes

Formulate Policies

Precise Presentation of Economic Facts:

Accuracy

Statistical Terms

Exact Facts

350 People Died in Kashmir

Condensing Mass Data:

Numerical Measures

Mean

Variance

Correlation

Average Income

Finding Relationships:

Economic Factors

Demand and Price Relationship

Inflation and Budget Deficit

Formulation of Plans and Policies:

Future Trends

Consumption Prediction

Survey Data

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Question 32.
Differentiate between continuous and discrete variables.

Continuous Variable:

Any Numerical Value

Integral Values

Fractional Values

Infinite Gradations

Height

Weight

Time

Distance

Discrete Variable:

Certain Values Only

Finite Jumps

No Intermediate Values

Whole Numbers

Number of Girls in Class

Population

Number of Cars

Number on Dice

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Question 35.
Explain the status of India’s Agriculture during British rule.

Agrarian Economy:

85% Population in Villages

Livelihood from Agriculture

Stagnation in Agriculture:

Low Productivity

Expanded Cultivation Area

Land Settlement System:

Zamindari System

Profits to Zamindars

Zamindars’ Role:

Collecting Rent

Ignoring Agricultural Improvement

Revenue Settlement:

Strict Land Revenue Collection

Dates for Revenue Deposit

Technology and Resources:

Low Levels of Technology

Lack of Irrigation

Negligible Use of Fertilizers

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Question 36.
Write a short note on Green Revolution?

Green Revolution:

1960s Agricultural Production

High Yielding Variety (HYV) Seeds

Wheat and Rice

Inputs:

Fertilizer

Pesticides

Regular Water Supply

Initial Beneficiaries:

Reliable Irrigation

Financial Support

Affluent States (Punjab, Andhra Pradesh, Tamil Nadu)

First Phase (1960s-1970s):

HYV Seeds Limited Use

Wheat Growing Regions

Second Phase (mid-1970s to mid-1980s):

Spread to More States

More Variety of Crops

Self-Sufficiency:

Food Grains Production

No Dependence on Foreign Nations

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Question 37. Explain the drawbacks of Agricultural marketing.

Middlemen:

Long Chain

Profit Loss for Farmers

Storage:

Improper Facilities

Product Protection Issues

Weighing/Measuring:

Faulty Methods

Accounts:

Manipulation

Selling Prices:

Low Prices

Lack of Information

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Question 38.
Explain the state of health infrastructure in India.

Health Infrastructure in India:

Primary Health Centres (PHCs):

Village-level clinics

Infant immunization

Anti-epidemic drives

Birth-control programs

Pre-natal and post-natal care

Government Initiatives:

Increase in hospitals: 9,300 to 43,300

Increase in hospital beds: 1.2 million to 7.2 million

Private Sector Role:

Medical education and training

Medical technology and diagnostics

Pharmaceuticals

Hospital construction

Medical services

Liberalization Policy:

Super-specialty hospitals

Attracting medical tourists

AYUSH Systems:

Ayurveda, Yoga, Unani, Siddha, Naturopathy, Homeopathy

Global Burden of Diseases (GBD):

20% of global burden

Communicable Diseases:

Diarrhoea, malaria, tuberculosis

PHCs Availability:

38% with required practitioners

30% with requisite medicines

Rural vs Urban Infrastructure:

0.36 hospitals per lakh people in rural areas

3.6 hospitals per lakh people in urban areas

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Functions of Environment:

Resource Supply:

Renewable (water, forest)

Non-renewable (coal, petrol)

Waste Assimilation:

Absorbs solid and liquid wastes

Sustains Life:

Genetic and bio-diversity

Aesthetic Services:

Scenic beauty (forests, waterfalls, mountains)

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Human Development Indicators:

Human Development Index (HDI):

Standard of living index

Life expectancy at birth

Educational attainment

Life Expectancy:

Average number of years a person lives

Adult Literacy Rate:

Reading and writing skills percentage

GDP per Capita:

High GDP indicates better development

Infant Mortality Rate (IMR):

High IMR indicates low development

Maternal Mortality Rate (MMR):

Low MMR indicates better development

Improved Sanitation:

Higher percentage indicates better development

Sustainable Water Sources:

Higher access indicates better development

Below Poverty Line:

Lower percentage indicates better development

Undernourished Children:

Diminishing numbers indicate better development

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What is tabulation? What are the parts of table?

Parts of a Table:

Table Number:

Identification Purpose

Top or Beginning of Title

Title:

Contents of the Table

Clear, Brief, Carefully Worded

Captions:

Column Headings

Stubs:

Row Headings

Stub Column

Body of the Table:

Main Part

Actual Data

Head Note/Unit of Measurement:

Units of Measurement

Rounding Off

Source:

Source of Data

Note:

Specific Feature Explanation

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Briefly explain the financial sector reforms.

Financial Institutions:

Commercial banks, Investment banks, Stock exchange operations, Foreign exchange market

Role of RBI:

Regulator to Facilitator

Amount of money, Interest rates, Lending nature

Establishment of Private Banks:

Indian and Foreign banks

Foreign investment limit: 50%

Freedom for Banks:

Set up new branches

Foreign Institutional Investors (FII)

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Role of Education in Economic Development:

Modernizes Attitude and Behaviour:

Favourable changes

Sound judgments

Promotes Science and Technology:

Latest technology knowledge

New production methods

Increases Mobility of Labours:

Rewarding employment opportunities

Suitable career choices

Creates National and Developmental Consciousness:

Civic, national, developmental consciousness

Historical information

Contributes to Skilled and Trained Workers:

General and Technical education

Skilled labour supply

Source of Knowledge:

House of knowledge

Decision making

Develops Moral Values:

Stories and incidents

Daily life values

Awareness about Culture and Politics:

Cultural heritage information

Day-to-day politics

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Types of Unemployment:

Disguised Unemployment:

Excess workers

Less required workers

Seasonal Unemployment:

Employment during a particular season

Temporary jobs in urban areas

Open Unemployment:

No job opportunities

Underemployment:

Inadequate employment

Technical Employment:

Technological changes

Frictional Employment:

Short-term transitions

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Suppose you are a resident of a village suggest a few measures to tackle the problem of the poverty.

Pradhana Manthri Rozgar Yojana (PMRY)

National Food for Work Programme (NFWP)

Mahatma Gandhi National Rural Employment Guarantee Programme (MGNREGP)

Public Distribution System (PDS)

Mid-day Meals Scheme

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Question 13.
What is Index Number?

Answer:
An index number is a statistical device for measuring changes in the magnitude of a group of related variables.

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Question 20.
What is mean deviation? Which average is used to find it?

Mean deviation is the arithmetic mean of the differences of the values from their average. The average used is either arithmetic mean or median.

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Question 22.
Mention the name of any four statistical tools.

Answer:
The most important statistical tools are the measures of central tendency, dispersion, correlation, bar diagrams, pie chart, histogram, etc.

Question 12.
What is dispersion?

Answer:
Dispersion refers to the extent to which values in a distribution differ from the average of the distribution.

Sampling Errors:

Definition:

Difference between sample estimate and actual value of population characteristic.

Occurs when making observations from samples.

Reduction:

Larger sample sizes reduce sampling error.

Example:

Heights of 5 students: 50, 55, 60, 65, 70 inches.

Average height: 60 inches.

Sample of 2 students: heights 50 and 60 inches.

Sample average height: 55 inches.

Sampling error: 60 (true value) - 55 (estimate) = 5 inches.

Classification of Data:

Chronological Classification:

Grouped by time (years, quarters, months, etc.)

Spatial Classification:

Grouped by geographical locations (countries, states, cities, etc.)

Qualitative Classification:

Based on attributes/qualities (literacy, religion, gender, etc.)

Quantitative Classification:

Based on characteristics (height, weight, age, income, etc.)

Difficulties in Construction of Consumer Price Index:

Index Numbers not Based on All Items:

Based on sample, not all items

Not Free from Error:

Errors at various stages (selection, formulae)

Special Type of Averages:

Limitations of mean, median, mode

Purpose-Specific:

Measures change for a specific purpose

Retail Price Variations:

Prices vary by shop, location, consumer

Unstable Quality:

Commodities of unstable quality

Expenditure Ratio Variations:

Different ratios at different times

Importance of Infrastructure in India:

Efficient Industrial Sector:

Supports efficient functioning of industries

Agricultural Development:

Encourages speedy development of agriculture

Transportation of seeds, pesticides, fertilizers, and produce

Economic Development:

Increases productivity of factors of production

Improves quality of life

Health Improvements:

Reduces morbidity from waterborne diseases

Enhances sanitation and water supply

Healthcare Facilities:

Influences health care through transport and communication

Important Areas of Liberalization:

Deregulation of Industrial Sector:

Removal of restrictions

Abolition of industrial licensing (except specific categories)

De-reserved goods for small scale industries

Financial Sector Reforms:

Regulation by RBI

Shift from regulator to facilitator

Establishment of private sector banks

Foreign investment limit (50%)

Freedom for banks to set up branches

Investment by Foreign Institutional Investors (FII)

Tax Reforms:

Reduction in individual income taxes

Moderate income tax rates

Reduction in corporation tax

Introduction of Goods and Services Tax (GST)

Simplified procedures

Foreign Exchange Reforms:

Devaluation of rupee

Increase in foreign exchange inflow

Market-determined exchange rates

Trade and Investment Policy Reforms:

Increase international competitiveness

Removal of quantitative restrictions

Reduction of tariff rates

Removal of licensing system

Disinvestment of public sector enterprises

Sources of Human Capital Formation:

Expenditure on Health:

Preventive medicine

Curative medicine

Social medicine

Clean drinking water

Sanitation

Healthy individuals increase productivity

Expenditure on Migration:

Search for higher salaries

Rural-urban migration

Enhanced income motivates migration

Main Causes of Unemployment in India:

Population Explosion:

Rapid population growth

Large addition to labour force

Insufficient job expansion

Seasonal Agriculture and Backwardness:

Seasonal employment in agriculture

Employment only during rainy days

Illiteracy and Ignorance:

Unskilled and untrained labour

Miss-match between education and employment

Slow Economic Growth:

GDP growth less than 7%

Insufficient employment opportunities

Lack of Government Initiatives:

Inactive in job creation

Disinvestment and industrial sickness

Low Investment:

Decline in investment rate

Lack of supportive atmosphere

Orthodox Nature of Population:

Traditional and orthodox beliefs

Sticking to age-old occupations

Difference Between Inclusive and Exclusive Methods of Classification:

Exclusive Method: Class Limits: Upper class limit of one class equals the lower class limit of the next class. Continuity: Maintains continuity of data. Suitable For: Continuous variables. Example: Class intervals 10-20 and 20-30; 20 is included in 20-30, not in 10-20. Inclusive Method: Class Limits: Upper class limit is included in the class interval. Continuity: Both upper and lower limits are part of the class interval. Example: Class interval 10-19; 10 and 19 are included in 10-19. Marks between 10 and 19 fall in this interval, 20 falls in the next interval.

Volume and Direction of Foreign Trade at Indian Independence:

Volume of Trade: Exported primary goods: Raw silk, cotton, wool, sugar, raw jute Imported finished goods: Cotton, silk, woolen clothes, light machinery Direction of Trade: Majority with Britain Other countries: China, Sri Lanka, Iran British Monopoly: Britain controlled over half of India's foreign trade Suez Canal increased British influence

Background of Economic Reforms in India:

Financial Crisis (1980s): Government expenditure > income Loans from banks and international institutions Development Policies: Scarcity of funds Challenges: Unemployment, poverty, population growth Low revenue generation Foreign Exchange: Borrowed funds for consumption needs Declined foreign exchange reserves Late 1980s Situation: Expenditure exceeded income Increased prices, imports Shortage of foreign exchange reserves International Aid: Loan from IBRD and IMF Conditions: Liberalization, privatization, globalization

Alternative Markets:

Direct Sales: Farmers sell directly to consumers Examples: Apni Mandi, Rythu Bazars, Uzhavar Sandhai Agricultural Contracts: Agreements with domestic and multinational companies Assured procurement, seeds, inputs Benefits: Seeds and inputs for farmers Predecided prices Reduced price risk Expanded markets

Infrastructure in Rural India:

Energy Sources: Bio-fuels: Agricultural waste, dried dung, firewood Long distances for fuel and water Electricity: 56% of households with electricity 43% use kerosene Cooking Fuel: 90% use bio-fuels Water Supply: 24% households with tap water 76% use open water sources Sanitation: 20% access to improved sanitation

Advantages of Sample Surveys:

Economical: Lower cost than census. Time-Saving: Faster to conduct than census. Accuracy: Can provide accurate information when conducted scientifically and carefully. Administrative Convenience: Easier to plan, organize, and supervise. Example: Census Method: Find income of every individual in a state. High expenditure and large number of investigators needed. Sample Method: Representative sample of few individuals. Saves time, money, and energy.

Properties of Correlation Coefficient (r):

Unit-Free: Correlation ‘r’ has no unit. It is a pure number. Negative Value: Indicates an inverse relation. A change in one variable is associated with a change in the other variable in the opposite direction (e.g., price increase of tomatoes leads to demand decrease). Positive Value: Variables move in the same direction (e.g., price increase of coffee increases the demand for tea as a substitute). Value Range: Lies between -1 and +1 (-1 ≤ r ≤ 1). Uncorrelated Variables: If r = 0, there is no linear relation between variables. Perfect Correlation: If r = 1 or r = -1, the correlation is perfect, and the relationship is exact. Weak Linear Relation: A low value of r (close to zero) indicates a weak linear relation. Change of Origin and Scale: The magnitude of r is unaffected by changes in origin and scale.