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Balbharti Maharashtra State Board Class 12 Economics Important Questions Chapter 1 Introduction to Micro and Macro Economics Important Questions and Answers.

Maharashtra State Board 12th Economics Important Questions Chapter 1 Introduction to Micro and Macro Economics

1. A. Choose the correct option:

Question 1.
The term ‘Micro’ is derived from the Greek word.
(a) Makros
(b) Maikros
(c) Mikros
(d) Mikrosoft
Options:
(1) a
(2) b
(3) c
(4) d
Answer:
(3) c

Question 2.
The term ‘micro’ and ‘macro’ economics were first coined and used by Norwegian Economist.
(a) Adam Smith
(b) Ragnar Frisch
(c) Dr. Marshall
(d) Prof. Ricardo
Options :
(1) a
(2) b
(3) d
(4) c
Answer:
(2) b

Question 3.
Statements related to features of Micro economics.
(a) The study of individual unit
(b) It deals with income theory
(c) It splits the whole economy
(d) It suggests suitable economic policies to promote economic growth
Options :
(1) a, b, c and d
(2) a and b
(3) a, c and d
(4) b and d
Answer:
(3) a, c and d

Question 4.
Scope of Micro economics.
(a) Theory of factor pricing
(b) Theory of general price level
(c) Theory of product pricing
(d) Theory of economic welfare
Options :
(1) a, b, c and d
(2) a and b
(3) a, c and d
(4) b and d
Answer:
(3) a, c and d

Question 5.
Theory of Economic Welfare.
(a) Efficiency in production
(b) Efficiency in consumption
(c) Overall economic efficiency
(d) Efficiency in social activities
Options :
(1) c and d
(2) a, b and d
(3) a, b and c
(4) b, c and d
Answer:
(3) a, b and c

Question 6.
Main features of macro economics.
(a) Income theory
(b) Lumping method
(c) Price theory
(d) Study of aggregates
Options :
(1) a, b and c
(2) b, c and d
(3) a, b and d
(4) Only b
Answer:
(3) a, b and d

Question 7.
Importance of Micro Economics.
(a) Free market economy
(b) Functioning of an economy
(c) Basis of welfare economy
(d) Foreign Trade
Options :
(1) a, b, c and d
(2) a, b and c
(3) a, b and d
(4) a, c and d
Answer:
(4) a, c and d

Question 8.
Micro Economic is based on certain assumption.
(a) Perfect competition
(b) Pure capitalism
(c) Full employment
(d) Fluctuations in the national income
Options :
(1) b, c and d
(2) c and d
(3) a, b and c
(4) a, c and d
Answer:
(3) a, b and c

Question 9.
Importance of Macro-economics.
(a) National Income
(b) Economic development
(c) Price determination
(d) General level of employment
Options :
(1) b, c and d
(2) a, b and d
(3) a, b, c and d
(4) None of these
Answer:
(2) a, b and d

Question 10.
Scope of Macro economics.
(a) Theory of Income and employment
(b) Theory of General Price level and inflation
(c) Theory of Economic growth and development
(d) Theory of Factor Pricing
Options :
(1) a and b
(2) a, b and c
(3) a, c and d
(4) a, b, c and d
Answer:
(2) a, b and c

Question 11.
Factors of Production which make contribution in production process.
(a) Land
(b) Profit
(c) Labour
(d) Transport
Options :
(1) a, b and c
(2) a and c
(3) b, c and d
(4) All of above
Answer:
(2) a and c

B. Complete the correlation:

1. Macro economic theory : Income and employment:: Micro economics : ………………
2. General equilibrium : Macro economics :: ……………… : Micro economic
3. Macro Economics : Large :: Micro Economics : ………………
4. Classical Economist: ……………… :: Neo-classical Economist: Prof. Alfred Marshall J
5. Prof. Alfred Marshall : Principles of Economics :: ……………… : General theory of Employment, Interest and Money
6. Study of Individual unit: ……………… :: Study of aggregates : Macro economics
7. Theory of Economic welfare : Scope of Micro economics :: ……………… : Scope of Macro economics
8. Land: Rent:: ……………… : Wages
9. Capital: ……………… :: Entrepreneur : Profit
10. ……………… : Demand and Supply Analysis :: Theory of Income and employment : Consumption and Investment function
11. Macro economics : Entire economy :: Micro economics: ………………
12. Study of the whole economy : Lumping ’ method :: Study of small individual unit : ………………
Answers:

1. Price theory
2. Partial equilibrium
3. Small
4. Adam Smith
5. Maynard Keynes
6. Micro economics
7. Theory of Economic growth and development
8. Labour
9. Interest
10. Theory of Product Pricing
11. Small part of economy
12. Slicing method

(C) Give economic terms.

(1) Micro economics derived from the Greek word.
(2) Macro economics derived from the Greek word.
(3) Study of large economic unit.
(4) Study of small or millionth part of economic unit.
(5) Price determination of individual commodity by forces of demand and supply.
(6) Price determination of factor of production for contributing to the production process.
(7) Maximum satisfaction of people due to efficiency in the allocation of resources.
(8) Determination of the prices of goods and services as well as factors of production.
(9) Equal distribution of produce goods and services to the society for consumption.
(10) Production of most desired goods and services.
(11) Equilibrium position of an individual economic unit.
(12) Assumption of Micro economics i.e. other things remaining constant.
(13) Micro economics does not deal with macro problems.
(14) Economic decisions are taken at individual levels without intervention of government.
(15) Explanation of effects of tariffs, exchange rate, etc.
(16) Micro economics explain various complex economic situation with the help of economic models.
(17) Equilibrium position of whole economy.
Answer:
(1) Mikros
(2) Makros
(3) Macro economics
(4) Micro economics
(5) Theory of Product Pricing
(6) Theory of Factor Pricing
(7) Theory of Economic Welfare
(8) Price Theory
(9) Efficiency in Consumption
(10) Overall Economic Efficiency
(11) Partial equilibrium
(12) Ceteris Paribus
(13) Limited scope
(14) Free Market economy
(15) Foreign Trade
(16) Economic Model building
(17) General Equilibrium Analysis

(D) Find the odd word out:

(1) Prof. Pigou, Prof. Samuelson, Adam Smith, J. R. Hicks.
(2) Individual consumer, Individual producer, Particular commodity, Total savings.
(3) Product pricing, Investment function, Factor pricing, Economic welfare.
(4) Efficiency in social activities, Efficiency in production, Efficiency in consumption, Overall economic efficiency.
(5) Price theory, Slicing method, Limited scope, Lumping method.
(6) Aggregate demand, Aggregate supply, Personal income, National income.
(7) National income, National output, National employment, National anthem.
(8) Keynes, Malthus, Fisher, Marshall.
(9) Theory of Economic welfare, Theory of income and employment, Theory of General price level, Theory of Economic growth.
(10) National Income, National Product, Per Capita Income, Gross Salary.
(11) Big, Large, Vast, Tiny.
(12) Microscopic, Massive, Small, Minimum.
(13) Rent, Wages, Capital, Profit.
(14) Land, Labour, Interest, Entrepreneur.
(15) Railways, Reliance, K.E.M. Hospital,
Answer:
(1) Adam Smith
(2) Total savings
(3) Investment
(4) Efficiency in
function social activities
(5) Lumping
(6) Personal income method
(7) National
(8) Marshall anthem
(9) Theory of Economic Income
Welfare
(10) Per Capita
(11) Tiny
(12) Massive
(13) Capital
(14) Interest
(15) Reliance

(E) Complete the following statements.

(1) The term Macro Economics is derived from the Greek word ‘Makros’ which means …………….
(2) The terms ‘Micro economics’ and ‘Macro economics’ were coined by Norwegian Economist …………….
(3) According to Maurice Dobb, Micro economics is in fact a ……………..
(4) The price of all commodity is determined by the forces of …………….
(5) Four main factors contributing to the production process, are …………….
(6) Micro economics deals with the study of behaviour of …………….
(7) Micro economics is based on ‘Ceteris Paribus’ assumptions which means …………….
(8) Micro economics is useful to government in framing …………….
(9) According to Keynes, macro economics is a …………….
(10) Macro economics is known as theory of Income …………….
(11) Macro economics examines the forest …………….
Answer:
(i) study of large unit
(2) Ragnar Frisch
(3) microscopic study of the economy
(4) demand and supply
(5) land, labour, capital and entrepreneur
(6) small individual unit
(7) other things remaining constant
(8) economic policies
(9) policy oriented science
(10) and employment
(11) not a single tree

[F] Choose the wrong pair :

Answer:
Wrong pair : Macro – Individual unit

II.

Answer:
Wrong pair : Maynard Keynes Microscopic study of economy

III.

Answer:
Wrong pair : Micro economics – General equilibrium

IV.

Answer:
Wrong pair : Census – Limited scope

V.

Answer:
Wrong pair : Lumping method – Splits the whole economy

(G) Assertion and Reasoning

Question 1.
Assertion (A) – Micro of a small part of the national economy.
Reasoning (R) – Micro economics divides the economy into small units.
(1) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).

Question 2.
Assertion (A) – Micro economics is known as Price theory.
Reasoning (R) – Macro economics is known as Income theory.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).

Question 3.
Assertion (A) – Macro economics studies overall conditions in the economy.
Reasoning (R) – Micro economics deals with National income and employment.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(i) (A) is true but (R) is false.

Question 4.
Assertion (A) – General equilibrium deals with the behaviour of individual price of commodity.
Reasoning (R) – Lumping method is the study of aggregates.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(ii) (A) is false but (R) is true.

Question 5.
Assertion (A) – Macro economic analyses shows how the general price level is determined.
Reasoning (R) – The study of general price level is important on account of the problems created by inflation and deflation.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).

Question 6.
Assertion (A) – In Micro economics decision regarding production of goods can be taken by individual.
Reasoning (R) – Study of macro economics help to understand the problems of developing countries and suggest important steps to achieve economic development.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).

Question 7.
Assertion (A) – Micro economics is based on assumption of ‘Ceteris paribus’.
Reasoning (R) – Macro economics consists of the story of economic growth and development.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).

Question 8.
Assertion (A) – Micro economics help to analyse the general level of employment of out put in an economy.
Reasoning (R) – Macro economics helps us to analyse the performance of an economy.
(i) (A) is true but (R) is false.
(ii) (A) is false but (R) is true.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true and (R) is not the correct explanation of (A).
Answer:
(ii) (A) is false but (R) is true.

(H) Choose the correct pair :

Answer:
(1)-(e), (2)-(a), (3)-(b), (4) – (c).

II.

Answer:
(1)-(b), (2) – (a), (3) -(c), (4) -(e).

III.

Answer:
(1)-(c), (2)-(a), (3)-(b), (4)-(e).

IV.

Answer:
(1) – (c), (2) – (e). (3) – (b). (4) – (d).

V.

Answer:
(1)-(c), (2)-(d), (3)-(a), (4)-(e).

2.[A] Identify and explain the concept from given illustrations.

Question 1.
Through public distribution system rationing shops distribute goods to poor people.
Answer:
Concept: Efficiency in consumption.
Explanation : Efficiency in consumption means distribution of produced goods and services to the people for consumption for having maximum satisfaction.
Public distribution system is developed specially to help economically weaker section of society to satisfy their consumption.
Rationing shops provide subsidized food and non food items to below poverty line people.

Question 2.
Mukesh divided his departmental J store into two separate divisions i.e. S food grains and garments to find actual profitability separately.
Answer:
Concept: Slicing method.
Explanation : Micro economics splits or divides the whole economy into small individual units and then studies each unit separately in detail.
Mukesh has divided its business into two separate divisions to understand thedetail cost of operations and profitability separately for food business as well as garment business.
Government collect whole information about population through census.
Concept : Lumping method / Macro economics.
Explanation : Macro economics use lumping method to study the whole economy rather than its part.

Question 6.
Government collect whole information about population through census.
Answer:
Concept : Lumping method / Macro economics.
Explanation : Macro economics use lumping method to study the whole economy rather than its part.
Govern ment collects data through census which gives them details about population such as sex ratio, literacy rate, unemployment rate, age composition, etc.

Question 7.
Reliance industries has created more employment opportunities through its biggest oil refinery in Jamnagar and improved the standard of living of its employee.
Answer:
Concept: Economic development. Explanation : Macro economics help to understand the problems of developing countries and suggest important steps to achieve economic development.
Economic development is a growth of the standard of living of people from low income to high income.
Through developing oil refinery Reliance has created numbers of job opportunities and hence improved the standard of living. Amul has fixed price of ₹ 44 per litre of milk after considering the cost such as machinery cost, labour cost, transportation cost, etc.
Concept: Price determination.
Explanation : Micro economics is known as price theory because it deals with determination of the prices of goods and services as well as factors of production. After considering cost of operations such as machinery cost, raw material cost, labour cost, transportation cost, etc. Amul has fixed price of its product (milk).

B. Distinhbish between

Question 1.
Micro Economics and Macro Economics.
Answer:

Question 2.
Micro Variables and Macro Variables.
Answer:

Question 3.
Partial Equilibrium and General Equilibrium.
Answer:

Question 4.
Micro Theory of Distribution and Macro Theory of Distribution.
Answer:

Question 5.
Slicing Method and Lumping Method.
Answer:

3. State with reasons whether you agree or disagree with the following statements:

Question 1.
Micro economics is the study of aggregate.
Answer:
No, I do not agree with this statement.
OR Micro economics studies individual economic units.
Yes, I agree with this statement.

• Micro economics is the microscopic study of individual economic units in great detail.
• It deals with individual firms, individual demand and supply, prices of individual, firms, etc.
• But macro-economics deals with economic behaviour of the whole economy with respect to national income, aggregate demand and supply, general price level, etc.
• Hence, micro economics is the study of individual economic units whereas macro economics is the study of aggregates.

Question 2.
Macro economics is a partial equilibrium analysis.
Answer:
No, I do not agree with this statement.
OR
Macro Economics deals with the whole s economy.
Yes, I agree with this statement.

• Macro economics deals with entire economy.
• Macro economics follow general equilibrium analysis. On the other hand, micro economics follow partial equilibrium analysis.
• Macro economics studies the behaviour of number of aggregate economic variables.
• Macro economics follows general equilibrium. It assumes “everything depends on every thing else.”
• General equilibrium deals with the behaviour of demand, supply and prices in the whole economy.
• Therefore, macro economics is not a partial equilibrium analysis but it is a general equilibrium analysis.

Question 8.
Micro economics is useful to the Government.
Answer:
Yes, I agree with this statement.
Useful to Government : It is useful in formulating and evaluating economic policies including pricing and distribution policies that promote economic welfare. It is useful in determining tax policy, public, expenditure policy, etc.

Question 9.
The scope of macro economics is wide.
Answer:
Yes, I agree with this statement.
(A) Theory of Income and Employment : It ?
explains which factors determine the level of National Income and employment and what causes fluctuations in the level of income, output and employment.
To understand how the level of employment is determined, we have to study the consumption function. It includes theory of business cycles.

(B) Theory of General Price Level and Inflation: Macro economics analyses shows how the general price level is determined and the causes for fluctuations in it. This study is important for understanding the problems created by inflation and deflation.

(C) Theory of Economic Growth and Development : Macro economics studies the causes of under development and poverty in poor countries and suggests strategies for accelerating growth and development in the country.

(D) Macro theory of Distribution : Macro theory of distribution deals with the relative share of rent, wages, interest and profit in the total national income of various classes.

Question 10.
Theories of micro economics are based on certain assumptions.
Answer:
Yes, I agree with this statement.
Based on certain ssumption : Micro economics is based on ‘ceteris paribus’ assumption i.e., other things remaining constant like full employment, laissez faire policy, perfect competition, pure capitalism, etc.

Question 11.
Macro economics is also known as income and employment theory.
Answer:
Yes, I agree with this statement.
Theory of Income and Employment : It ?
explains which factors determine the level of National Income and employment and what causes fluctuations in the level of income, output and employment.
To understand how the level of employment is determined, we have to study the consumption function. It includes theory of business cycles.

4. Study the following table / figures / passages and answer :

Question 1.
Read the passage and answer the following questions.
The census of 1991 was the fifth census of independent India and conducted as usual from 9th to 28th February, 2001 to present census data as on sunrise of 1st March 2001, the reference date. The two phases were continued in the same way like previous two censuses.

In the first phase a house list was canvassed to collect the information on housing data and also amenities available to the households. The scope of house list was enlarged and for the first time a question regarding type of fuel used for cooking was canvassed. In 1981 the question on availability of toilet facility was canvassed for urban areas only. However, in 1991, it was canvassed for rural area also.
During 2nd phase following two schedules were canvassed, (a) Household schedule and (b) Individual slip

1. Between which dates the census for 2001 was conducted.
Answer:
The census for 2001 was conducted between 9th to 28th February 2001.

2. What information was collected in the first phase of census?
Answer:
In the first phase of census a house list was canvassed for collecting information about housing data and amenities available.

3. Which question was canvassed in 1991?
Answer:
In 1991 question on availability of toilet were canvassed – (a) household schedule and facility was canvassed for rural area. I 03) Individual slip.

4. Which two schedule were canvassed in IInd phase?
Answer:
During IInd phase below two schedules were canvassed –
(a) household schedule and
(b) Individual slip.

Question 2.
Go through the following chart and answer the questions.
Answer:

1. Which are the two main sectors in Indian education system?
Answer:
The two main sectors in Indian education system are (a) Public sector (b) Private sector.

2. What does public sector education system includes?
Answer:
Public sector education system includes public schools, central government funded institutions, state government funded institutions and higher education institutions.

3. Where are multimedia schools positioned in Indian education system?
Answer:
Multimedia school comes under non-formal setup of private sector in Indian education system.

4. What are the setups in private sector educational system?
Answer:
There are two setups in private sector educational system i.e. formal setup and non-formal setup.

Question 3.
Study the below table and answer the given questions.

(1) Which state has the highest literacy [ rate?
Answer:
Kerala has the highest literacy rate of 90.92%.

(2) What is the male literacy rate for1 Maharashtra?
Answer:
For Maharashtra the male literacy rate is 86.27%.

(3) What is difference of female literacy rate between Delhi and Rajasthan?
Answer:
There is a difference of 30-66% as a whole in female literacy rate between Delhi and Rajasthan.

(4) Which states has highest male literacy and lowest female literacy rate?
Answer:
Kerala has the highest male literacy rate of 94.20% and Uttar Pradesh has the lowest female literacy rate of 42.98%.

5. Answer in detail:

Question 1.
Explain the scope of Micro economics.
OR
Explain the subject matter of micro economics.
Answer:

(a) Theory of Product Pricing : The price of each commodity is determined by the forces of demand and supply. Micro economics is a study of demand analysis i.e. individual consumer behaviour and supply analysis i.e. individual producer behaviour.
(b) Theory of Factor Pricing : There are four main factors contributing to the production process which are land, labour, capital and entrepreneur. Micro economics helps in determining the factor rewards like land gets rent, labour gets wages, capital gets interest and entrepreneur gets profit.
(c) Theory of Economic Welfare : This theory deals with efficiency in allocation of resources which aim at maximum satisfaction of people. Three economic efficiencies are as follows :

• Efficiency in production : It mean producing maximum amount of goods and services from given amount of goods and j services from given amount of resources.
• Efficiency in consumption : It means distribution of produce goods and services to the society for consumption in such a way to have maximum total satisfaction of people.
• Overall economics efficiency : It means to produce those goods and services which are most desired by the people

Balbharti Maharashtra State Board Class 11 History Important Questions Chapter 5 Janapadas and Republics Important Questions and Answers.

Maharashtra State Board 11th History Important Questions Chapter 5 Janapadas and Republics

1A. Choose the correct alternative and write the complete sentences.

Question 1.
__________ means the ruling class.
(a) Rashtra
(b) Rajya
(c) Gana
(d) Khanda
Answer:
(c) Gana

Question 2.
__________ was the highest decision making authority concerning all matters of the Ganasangha.
(a) Mantriparishad
(b) Sabha
(c) Samiti
(d) Ganaparisha
Answer:
(d) Ganaparishad

Question 3.
Regional Zones were called __________
(a) Sabha
(b) Sangharajya
(c) Khanda
(d) Mahajanpada
Answer:
(c) Khanda

1B. Find the incorrect pairs from set ‘B’ and write the correct ones.

Question 1.

Answer:
Yadu – Rigveda

Question 2.

Answer:
Ghandhara – Rigveda and Atharvaveda

Question 3.

Answer:
‘Madhyadesha’ – The central region

1C. Find the odd one out.

Question 1.
Praachya:
(a) Anga
(b) Magadha
(c) Kikat
(d) Shalva
Answer:
(d) Shalva

Question 2.
Madhyadesha:
(a) Aja
(b) Bharata
(c) Vaikarna
(d) Matsya
Answer:
(c) Vaikarna

Question 3.
Praatichya:
(a) Anu
(b) Pundra
(c) Bhalan
(d) Parashu
Answer:
(b) Pundra

Question 4.
Terms of ancient states:
(a) Rajya
(b) Savaarajya
(c) Bhaujya
(d) Mahajanapad
Answer:
(d) Mahajanapad

2A. Write the names of historical places, persons, and events.

Question 1.
The region occupied by Janas
Answer:
Janapada

Question 2.
Settlement
Answer:
Grama

Question 3.
Extended family
Answer:
Kula

Question 4.
Two assemblies
Answer:
Sabha and Samiti

Question 5.
Chief of Janapada
Answer:
Raja

Question 6.
Ruling class
Answer:
Gana

Question 7.
Regional Zones
Answer:
Khanda

Question 8.
Elective representative of the respective regional zone.
Answer:
Ganamukhya

Question 9.
Trade and commerce
Answer:
Varta

Question 10.
Highest decision-making authority
Answer:
Ganaparishada

2B. Choose the correct reason and complete the sentence.

Question 1.
The Ganasangha of Kamboj and Saurashtra are mentioned in Varta-Shastropajivi. Because __________
(a) they were skilled in trade and commerce.
(b) they were created by more than one kula coming together.
(c) some of them were divided into regional zones.
(d) they were oligarchies
Answer:
(a) they were skilled in trade and commerce.

Question 2.
Sense of territoriality and the ensuing awareness of autonomy were the main factors responsible for the __________
(a) geographic boundaries among the Janas.
(b) administrative structures among the Janas.
(c) migration and spread from the Saptasindhu region to the delta region of the Ganga.
(d) formation of ancient janapadas in India.
Answer:
(d) formation of ancient janapadas in India.

Question 3.
The Later Vedic literature, Jaina, and Buddhist literature indicate that __________
(a) some of the janapadas were of oligarchic type.
(b) most of the janapadas were monarchic states.
(c) the state was not ruled by a monarch but the members of the janapada run the state collectively.
(d) more than one ganrajyas coming together to create a sangharajya.
Answer:
(b) most of the janapadas were monarchic states.

3. Complete the concept maps.

Question 1.

Answer:

Question 2.

Answer:

Question 3.

Answer:

4. Explain the statement with reasons.

Question 1.
The geographic boundaries of a Jana were not defined.
Answer:

• Vedic people used the term Jana to designate a group of people, united under a common bond of singular kinship structure.
• Their settlement was known as ‘Grama’. A cluster of gramas consisting of the same Jana was known by the name of that particular Jana.
• In the beginning, however, the concept of Jana included only an extended family (kul), its settlement (grama), and the cattle pen (goshtha-gotra-gaulivada).
• The concept of Jana was not yet inclusive of the concept of territoriality.
• Hence, the geographic boundaries of a Jana were not defined.

Question 2.
Independent Janapada came into existence.
Answer:

• Vedic Janas gradually began to settle in the new region.
• The concept of Jana increasingly acquired a sense of territoriality.
• The sense of territoriality instilled the sense of geographic boundaries among the Janas.
• It resulted in the emergence of informal local administrative structures among the Janas.
• Thus, independent Janapada came into existence.

5. State your opinion.

Question 1.
Some of the Ganasanghas were divided into regional zones called ‘Khanda’.
Answer:

• The regional zones were known as Khandas.
• They functioned through a group of elected individuals who were found capable.
• Each of the elected members represented his respective Khanda.
• These elected members were installed with collective authority for the smooth running of the Ganasangha.
• This was a democratic system.
• Such Ganasanghas existed in Punjab and Sindh at the time of Alexander’s invasion.

Question 2.
The period of Janapadas saw the rise of the warrior class.
Answer:

• The warrior class people were well-trained in warfare.
• This class of warriors played a major role in the shift of the primary organisation of the janapadas to a more complex state organisation.
• Janapadin is a term mentioned in Panini’s Ashtadhyayi, used to indicate the warrior class.
• Thus, the period of Janapadas saw the rise of the warrior class.

Question 3.
Uttara Kuru and Uttara Madra were of‘Vairajya’ type.
Answer:

• This means that the state was not ruled by a monarch but the members of the Janapada run the state collectively.
• The ancient literature mentions types of states such as ‘Ganasangha’ or ‘Sangharajya’ (oligarchy/republic).
• Thus, Uttar Kuru and Uttar Madra were of the ‘Vairajya’ type.

6. Answer the following questions in detail.

Question 1.
Write in detail about the expansion and development of the Janapadas.
Answer:
The expansion and development of the Janapadas seem to have occurred in three different ways:

• Expansion and development of a society formed into a Jana by uniting of a number of generations of a singular kula (family). For example, the Janapadas namely, Matsya, Chedi, Gandhara, Kashi, Kosala, etc.
• Janapadas rising out of the union of more than one kula. For example, the Panchala janapada. Who were the five Janas united under the name of Panchalas, is not exactly known? According to the renowned historian, Hemchandra Raychaudhuri the following were the Janas who merged together as Panchalas: Krivi, Turvasha, Keshi, Shrinajaya, and Somaka.
• The more powerful Janapadas conquered the less powerful ones.

7. Answer the following questions with help of given points.

Question 1.
Write about:
(a) Janapada
(b) Territoriality and Autonomous Functioning
Answer:
(a) Janapada:

• The term ‘Janapada’ occurs in the Brahmana texts for the first time.
• Thereafter, it is frequently used in the Vedic literature and the epics – Mahabharata and Ramayana, as also in the Jain and the Buddhist literature.
• Considering the ancient Indian geographic perception with reference to the Janapadas, the said literature seems to divide the Indian subcontinent into five sections:
  • ‘Praachya’ – of the east
  • ‘Praatichya’ – of the west
  • ‘Udichya’ – of the north
  • ‘Dakshina’ – of the south
  • ‘Madhyadesha’ – The central region

(b) Territoriality and Autonomous Functioning:

• It may be noted, that the sense of territoriality and the ensuing awareness of autonomy were the main factors responsible for the formation of ancient Janapadas in India.
• However, their administrative system was not much different from that of the Janas in Rigveda.
• The chief of the Janapada was known as ‘Raj an’.
• Two assemblies are known as ‘Sabha’ and ‘Samiti’ were at the apex of all administrative decision-making processes, since the very beginning of the Vedic period.

Question 2.
Write about some of the ancient Janapadas and the literary texts that mention their names.
Answer:
Some of the ancient Janapadas and the literary texts that mention their names are as follows:

• Praachya: Anga, Magadh (Atharvaveda): Kikata (Rigveda and Atharvaveda) Pundra (Mahabharata)
• Praatichya: Anu, Alin, Bhalan, Druhyu, Parashu, Pakhta, Puru, Turvasha, Yadu (Rigveda), Gandhara (Rigveda and Athrvaveda), Shalva (Mahabharata)
• Udichya: Krivi, Vaikarna (Rigveda) Balhik (Atharvaveda)
• Dakshina: Andhra (Mahabharata) Pulinda (Emperor Ashoka’s edicts)
• Madhyadesha: Aja, Chedi, Bharata, Matsya, Shigru, Trutsu, Ushinara, Yakshu (Rigveda), Kuru, Shrinjaya (Rigveda and Atharvaveda).

Balbharti Maharashtra State Board Class 12 Economics Important Questions Chapter 8 Public Finance in India Important Questions and Answers.

Maharashtra State Board 12th Economics Important Questions Chapter 8 Public Finance in India

1. A. Choose the correct option:

Question 1.
Optional functions of Government.
(a) Protection from external attack.
(b) Provision of education and health services.
(c) Provision of social security measures.
(d) Collection of tax.
Options :
(1) b and c
(2) a, b and c
(3) b,c and d
(4) All of the above
Answer:
(1) b and c

Question 2.
Public finance is……………..
(a) one of the old branches of economics, which highlights the role of government
(b) a study of the principles of income and expenditure of the government
(c) also a part of the study of political science
(d) less elastic in supply
Options :
(1) a and b
(2) a, b and c
(3) a and d
(4) b, c and d
Answer:
(2) a, b and c

Question 3.
Non tax revenue includes
(a) Prices of public goods and services
(b) Gifts, Grants and Donations
(c) Goods and Service Tax (GST)
(d) Fines and penalties
Options :
(1) a, b and d
(2) a, b and c
(3) b and d
(4) a and c
Answer:
(1) a, b and d

Question 4.
The examples of revenue expenditure …………..
(a) administration cost of the government
(b) huge investments in different developmental projects
(c) salaries, allowances and pensions of government employees
(d) medical and public health services
Options :
(1) a, b and c
(2) a and b
(3) c and d
(4) a, c and d
Answer:
(4) a, c and d

Question 5.
Reasons for growth in public expenditure.
(a) increase in the activities of the government
(b) rapid increase in population
(c) spread of democracy
(d) industrial development
Options :
(1) a, b and c
(2) b, c and d
(3) a, c and d
(4) a, b, c and d
Answer:
(4) a, b, c and d

(B) Complete the Correlation .

(1) Direct Tax : Wealth Tax :: …………….. : Excise Duty
(2) High degree of credit: Public finance:: Limited Credit: ……………..
(3) Expenditure on education : Developmental expenditure :: War expenditure :……………..
(4) Internal debt : Government borrows from its citizens :: …………….. : Government borrows from World Bank
(5) Surplus budget : Government Receipts Government Expenditure:: ……………..: Government Receipts Government Expenditure
(6) Optional function : Provision of social security :: ……………..: Protection from external attacks
(7) Progressive Tax : Tax rate increases with . increase in income :: ………………. : Tax rate decreases with rise in income :
(8) Old age pension : Revenue expenditure :: Investment in machines : ……………….
Answers:

1. indirect tax
2. Private finance
3. Non-developmental expenditure
4. External debt
5. Deficit budget
6. Obligatory function
7. Regressive Tax
8. Capital expenditure

(C) Give economic terms.

(1) The expenditure which is incurred by the public authority for promoting social and economic welfare.
Answer:
Public Expenditure

(2) A financial statement showing the expected receipts and proposed expenditure of the government in a financial year.
Answer:
Budget

(3) A compulsory contribution to the government by a person without receiving any direct or proportionate benefit in return.
Answer:
Tax

(4) Borrowings of the government from financial institutions within the country.
Answer:
Internal Debt

(5) The financial policy implemented by the government which deals with public expenditure, public revenue and public debt.
Answer:
Fiscal Policy

(6) The type of budget where estimated revenue and expenditure of the government are equal.
Answer:
Balanced Budget

(7) The aggregate collection of income with the government through various sources.
Answer:
Public revenue

(8) It is paid by the tax payer on his income and property.
Answer:
Direct Tax

(9) It is a category of tax which is levied at the same and constant rate on all income.
Answer:
Proportionate tax

(10) Revenue received by the government administration, other than taxes.
Answer:
Non Tax Revenue

(D) Find the odd word out.

(1) Fees, Fines and penalties, Excise duty, Special levy.
Answer:
Excise duty

(2) Revenue expenditure, Capital expenditure, Labour expenditure, Developmental expenditure
Answer:
Labour expenditure

(3) Public expenditure, Public park, Public revenue, Public debt.
Answer:
Public park

(4) Service tax, Entry tax, Entertainment tax, Wealth tax
Answer:
Wealth tax

(5) R.B.I, Foreign Banks, IMF, World Bank
Answer:
R.B.I.

(6) Deficit budget, Zero budget, Balanced budget, Surplus budget
Answer:
Zero budget

(7) Inflation, Depression, Rising prices, Reduce purchasing power
Answer:
Depression

(8) Earthquakes, Floods, Cyclones, Social unrest
Answer:
Social unrest

(9) Public health, Social welfare, Spread of education, Donations
Answer:
Donations

(10) Defence, Infrastructure, Registration fees, Health care
Answer:
Registration fees

(E) Complete the sentences .

Question 1.
Obligatory function of the government includes …………..
(a) provision of education and health services ?
(b) maintaining internal law and order
(c) provision of social security
(d) construction of public park and garden
Answer:
(b) maintaining internal law and order

Question 2.
There is a continuous growth in public expenditure
(a) only because of growing population
(b) only because of increase in defence expenditure
(c) only due to inflation
(d) due to all the above mentioned factors
Answer:
(d) due to all the above mentioned factors

Question 3.
Capital expenditure of the government is ……………
(a) pensions of government employees
(b) administration cost of the government
(c) investment in different developmental projects
(d) war expenditure
Answer:
(c) investment in different developmental projects

Question 4.
The expenditure which results in generation of employment is
(a) development expenditure
(b) non-development expenditure
(c) revenue expenditure
(d) capital expenditure
Answer:
(a) development expenditure

Question 5.
Tax is paid by a tax payer because .
(a) he gets good benefits of it
(b) it is owner’s pride and neighbour’s envy
(c) it is a compulsory contribution to the government
(d) he gets good publicity
Answer:
(c) it is a compulsory contribution to the government

Question 6.
Direct tax is paid by the tax-payer .
(a) on sale and purchase of a commodity
(b) on his income and property
(c) which is levied on goods and services
(d) and shifted to other person
Answer:
(b) on his income and property

Question 7.
In case of regressive tax, the larger the income of a tax-payer.
(a) smaller is the proportion of tax levied
(b) tax is levied at the constant rate
(c) greater is the proportion of tax levied
(d) zero tax is levied
Answer:
(a) smaller is the proportion of tax levied

Question 8.
Special assessment, fines and penalties are examples of
(a) direct tax
(b) indirect tax
(c) non-tax revenue
(d) tax revenue
Answer:
(c) non-tax revenue

Question 9.
External debt of the government means
(a) loans from IMF, World bank, etc.
(b) borrowings from the citizens of a country
(c) borrowings from financial institutions in a country
(d) borrowings from Reserve Bank of India
Answer:
(a) loans from IMF, World bank, etc.

Question 10.
The capital budget consists of
(a) capital receipts and revenue receipts
(b) tax revenue and non-tax revenue
(c) revenue receipts and revenue expenditure
(d) capital receipts and capital payments
Answer:
(d) capital receipts and capital payments

(F) Choose the wrong pair :

I.

Answer:
(3) – c

II.

Answer:
(4) – d

III.

Answer:
(2) – b

(F) Choose the right group of pairs :

I.

Options :
(a) (1) – d, (2) – c, (3) – b, (4) – a
(b) (1) – c, (2) – d, (3) – a, (4) – b
(c) (1) – d, (2) – c, (3) – a, (4) – b
(d) (1) – d, (2) – b, (3) – c, (4)-a
Answer:
(c) (1) – d, (2) – c, (3) – a, (4) – b

II.

Options : (a) (1) – c, (2) – b, (3) – d, (4) – a
(b) (1) – b, (2) – d, (3) – a, (4) – c
(c) (1) – b, (2) – c, (3) – d, (4) – a
(d) (1) – d, (2) – c, (3) – a, (4) – b
Answer:
(b) (1) – b, (2) – d, (3) – a, (4) – c

III.

Options :
(a) (1) – c, (2) – d, (3) – b, (4) – a
(b) (1) – c, (2) – b, (3) – a, (4) – d
(c) (1) – b, (2) – c, (3) – d, (4) – a
(d) (1) – d, (2) – c, (3) – b, (4)-a
Answer:
(a) (1) – c, (2) – d, (3) – b, (4) – a

2.[A] Identify and explain the concept from given illustrations.

Question 1.
internal law and order to avoid social unrest.
Answer:
Concept: Obligatory Function.
Explanation : Obligatory functions are those functions which must be performed by government for socio-economic welfare and to avoid social unrest and to establish social justice in a country.

Question 2.
Sanjay paid charges to traffic police for jumping signal.
Answer:
Concept: Fine and penalty
Explanation : The government imposes fines and penalties on those who violate the laws of a country.
Traffic police charges fine and collects money for violating traffic rule.
The objective of taking fine is to discourage the citizens from violating the laws framed by government.

Question 3.
Government of India takes loan from World Bank for Mumbai Metro Train.
Answer:
Concept: External Debt
Explanation : When the government borrows from foreign government or international organisations like IMF, World Bank, etc., it is known as external debt.
Government needs to raise loan for investing in developmental project of a country.
Mumbai Metro Train is a project which require huge investment.
So, Government of India takes loan from World Bank.

Question 4.
Prachi can spend only ₹ 80,000/- though her income is one lakh per month.
Answer:
Concept: Disposable Income
Explanation : Disposable income refers to income which remains with a person after deducting income tax from total personal income.
So, Disposable Income = Total Personal Income – Direct Taxes (income tax)
It indicates actual spending capacity of a person.
Every person is legally bound to pay income tax because it is compulsory to the government.

Question 5.
Government of India borrowed from nationalized bank for construction of bridge.
Answer:
Concept: Internal debt
Explanation : When the government borrows from its citizens or nationalized banks, it is called internal debt.
It means borrowing within a country, for development of infrastructure facilities in a country.
Provision of infrastructure like roads, bridge energy supply, etc., require huge investment.
So, government borrows money in form of internal debt from RBI, nationalized banks or citizens of a country.

Question 6.
Jyoti purchased furniture from mall and paid tax on it.
Answer:
Concept: GST (Goods and Service Tax)
Explanation : GST is a comprehensive tax base with nationwide coverage of goods and services.
It came into effect in India from 1st July, 2017.
It is a tax on goods and services. GST simplified the tax system in a country.

(B) Distinguish between

Question 1.
Deficit Budget and Balanced Budget.
Answer:
Deficit Budget:

1. When the government revenue is less than government expenditure, it is called a Deficit Budget.
2. Deficit Budget would lead to increase in aggregate demand.
3. Deficit Budget leads to flow of money from the government to the economy.
4. It is suitable for government when the economy suffers from depression.
5. The policy of deficit budget would lead to increase in employment, investment, etc.

Balanced Budget:

1. When the government revenue is equal to government expenditure, it is called a Balanced Budget.
2. Balanced Budget would not affect the aggregate demand in the economy.
3. The flow revenue of the government is equal to meet the expenditure of the government.
4. It is not possible to introduce a balanced budget under present circumstances.
5. The balanced budget policy is called “Sound Finance” where the government performs only minimum functions.

Question 2.
Government Revenue (income) and Government Expenditure.
Answer:
Government Revenue (income):

1. Government income refers to the revenue of the government from different sources including tax revenue, non-tax revenue, administrative revenue etc.
2. E.g. Tax revenue including Direct and Indirect Tax.
3. Non-tax revenue include profit from government enterprise administrative revenue like fees, fines, penalties.
4. Generally government income results in transfer of purchasing power from people to government.
5. Surplus income with government indicates sound financial background.

Government Expenditure:

1. Government expenditure refers to the expenditure by government to perform various functions and duties.
2. E.g. Revenue expenditure on health, education, defence and administration.
3. Capital expenditure on roads, railways, dams, machinery and public enterprise.
4. Government expenditure leads to transfer of purchasing power from government to people.
5. Massive expenditure indicates more welfare to people.

Question 3.
Revenue Budget and Capital Budget.
Answer:
Revenue Budget:

1. Revenue Budget consists of
   (1) Revenue Receipts
   (2) Revenue Expenditure
2. It explains how revenue is generated by government and how it is allocated among various expenditure heads.
3. Revenue receipts consists of
   (1) Tax Revenue
   (2) Non-Tax Revenue
4. Revenue expenditure includes developmental and non – developmental expenditure of Central Government.
5. Revenue Receipts do not create any liability of the government.
6. Revenue expenditure does not lead to the creation of assets.

Capital Budget:

1. Capital Budget consists of
   (1) Capital Receipts
   (2) Capital Expenditure
2. It deals with the capital aspect.
3. Capital receipts consists of
   (1) Borrowing
   (2) Recovery of loans
   (3) Disinvestment, small savings
4. Capital expenditure includes expenditure on land and building machinery, investment in shares, loans granted by Central Government to State.
5. Capital receipt create a liability of the government.
6. Capital expenditure leads to the creation of assets.

Question 4.
Surplus Budget and Balanced Budget.
Answer:
Surplus Budget:

1. A Surplus Budget is that type of budget in which the estimated revenue is greater than the estimated expenditure.
2. Government raises tax revenue which is more than what is required for meeting the expenditure.
3. Surplus budget would lead to reduction in aggregate demand.
4. It is suitable for families and not favoured for government.
5. The policy of Surplus Budget would lead to unemployment and recession in the economy. ‘

Balanced Budget:

1. Balanced Budget is a type of budget in which the estimated revenue of the government is equal to estimated expenditure of the government.
2. Government raises revenue to such an extent which is just sufficient to meet the expenditure.
3. Balanced budget would not affect the aggregate demand in the economy.
4. It is not possible to introduce a balanced budget under present circumstances.
5. The balanced budget policy is called ‘Sound Finance’ where the government performs only minimum function.

Question 5.
Deficit Budget and Surplus Budget.
Answer:
Deficit Budget:

1. A deficit budget is one in which estimated expenditure exceeds estimated revenue.
2. It leads to flow of money from government to the economy and increases aggregate demand.
3. It is suitable for governments especially when the economy suffers from depression.
4. The policy of deficit budget would lead to employment and revival of economic activities.
5. Deficit budget is not desirable during inflation.

Surplus Budget:

1. A surplus budget is a budget in which estimated revenue are greater than estimated expenditures.
2. It leads to flow of money from economy to government and lead to decrease in aggregate demand.
3. It is suitable for individuals and families but not favoured for government.
4. The policy of surplus budget would lead to unemployment and recession due to low investment.
5. Surplus budget is advocated during inflation to reduce demand and prices by imposing high taxes.

Question 6.
Revenue Expenditure (Budget) and Capital Expenditure (Budget).
Answer:
Revenue Expenditure (Budget):

1. Revenue expenditure of the government refers to expenses incurred on day-to-day functioning of the government.
2. It is recurring in nature as it is incurred regularly.
3. E.g. administration cost, salary, allowances, pensions of the government employees, etc.
4. It does not create any asset to government.

Capital Expenditure (Budget):

1. Capital expense of the government refers to expenses incurred for the development of a country.
2. It is not recurring in nature as it does not incur regularly.
3. E.g. investment in different developmental projects, loans granted to state government, repayment of loan, etc.
4. It makes addition to the assets of the economy.

Question 7.
Obligatory functions of Government and Optional functions of Government.
Answer:
Obligatory functions of Government

1. Obligatory functions are those functions which must be performed by government, by making adequate provision of resources.
2. Obligatory functions are given first priority, as they are compulsory functions.
3. Obligatory functions are mainly performed by public authority for the protection of their citizen.

Optional functions of Government:

1. Optional functions of government are those functions which may be undertaken by government if funds permit.
2. Optional functions are given second priority, as they are called discretionary functions.
3. Optional functions are performed by central, state and local government for promoting economic activities and social welfare.

Question 8.
Tax revenue and Non-tax revenue.
Answer:
Tax revenue:

1. Tax revenue refers to revenue received by the government through various taxes.
2. Tax revenue comes from direct tax, i,e. income tax, wealth tax and indirect tax, i.e,, G.S.T.
3. Tax is a major source of revenue to the government.
4. Tax revenue particularly direct tax is collected to reduce economic inequality.

Non-tax revenue:

1. Non-tax revenue refers to revenue received by the government from various sources, other than taxes.
2. Non-tax revenue comes from fines and penalties, fees, gifts, grants, donations, borrowings, special levy, etc.
3. Non- tax revenue is not a major source of revenue to the government.
4. Non-tax revenue, particularly special levy, fines and penalties, etc. are collected to discourage the citizens from violating the law.

3. Answer the following questions:

Question 1.
Explain non-tax sources of revenue of the government.
Answer:
Non-tax revenue refers to the revenue received by the government from various , sources other than taxes.
The sources of non-tax revenue are as follows:

1. Fees : It refers to charges paid, in return for certain specific services rendered by the government. E.g. fees paid for registration of house, car, education fees, etc.

2. Prices of Public Goods and Services : Various types of goods and services are produced, supplied and sold by modern government to the citizens. It; is added to public revenue when people s purchase them and pay their prices.

3. Special Assessment : It is special kind of tax, which is levied by local government on the residents of a particular area. In exchange of it, government provides some special facilities to them.

4. Fines and Penalties : It is imposed by government on those who violate the laws of the country.

E.g. a traffic police charges fine and collects money if someone violates traffic rule. The objective behind collection of fines and penalties is not to earn money but to discourage the people from violating the laws framed by the government It is small source of income.

5. Gifts, Grants and Donations : The government receives gifts from its citizens and others. It is included in public revenue. The government may also get grants from foreign government and institutions for general and specific purposes.
Foreign aid is also an important form of public revenue for developing country like India. However, this source of revenue is uncertain in nature.

6. Special Levies : It refers to the charges levied by government on those commodities, whose consumption is harmful to human health.
Special levies are paid for using commodities like wine, opium and other intoxicants. Special levy is imposed, not to earn income, but to discourage the people from using harmful products.

7. Borrowings: Government borrows to raise fund because government expenditure generally exceeds government revenue, in a welfare state.
When government borrows from foreign government or international organisations, it is known as external debt. It is more popular source of public revenue for investment in development of projects. Thus, public revenue in form of non-tax sources play very important role in socio economic development of a country.

Question 2.
Explain the classification of public expenditure.
OR
Explain the budget expenditure of the government.
Answer:
Public expenditure is an important aspect which is incurred by the public authority (central, state and local government). Public expenditure is required for the protection of the citizens of a country, for satisfying social needs or collective needs and for promoting social and economic welfare of the people in a country.

Classification of public expenditure is as under:
(1) Revenue expenditure : It is the expenditure of the government to carry out day-to-day functions. It is recurring in nature. It does not create any assets to government It consists of administrative expenditure, interest payment, pensions and salaries to government employees, etc.

(2) Capital expenditure : It refers to the expenditure of the government for the development of a country.
It consists of huge investment in different developmental projects, repayment of government loans, investment on land, building, machines, etc.
It is non-recurring in nature

(3) Developmental expenditure : The expenditure which results in generation of employment and price stability, it is known as developmental expenditure.

It consists of expenditure on education, social welfare, industrial development, etc. It leads to an increase in production. It is s productive in nature.

(4) Non-developmental expenditure : It is that government expenditure which does not yield any direct productive impact on the economy. It is mainly in form of expenses on administration costs, war expenses, etc. It is unproductive in nature. It is observed that, since last 30 years, there is a tremendous growth in the total public expenditure of a country because modern government performs many functions for the social and economic development of a country.

Question 3.
Explain the structure of Tax-revenue of the government.
Answer:

Tax is a major source of revenue to the Government
According to Prof. Taussig, “The essence of a tax as distinguished from other charges by government is the absence of a direct ‘quid pro quo’ (benefit) between the tax payer and the public authority. ”
Prof. Seligman states that, “a tax is a compulsory contribution from a person to the government, without reference to special benefits confessed. ”
Thus, every citizen of a country is legally bound to pay tax.
Tax is imposed on income, property or commodities and services.

Types of Taxes :

(1) Direct Tax : It is paid by the tax payer on his income and property. A tax-payer cannot transfer the burden of direct tax to others.
Impact and incidence of direct tax falls on the same person. E.g. Income tax, wealth tax, etc.
Direct taxes are further classified into three categories.
(i) Proportionate tax (ii) Progressive tax (iii) Regressive tax

(2) Indirect Tax : It is levied on goods and services. It is paid at the time of production or sale and purchase of a commodity or a service.
The burden of indirect tax can be shifted by the tax-payer (producers) to other persons. Hence, impact and incidence of tax are on others. E.g. GST.
Thus, major share of public revenue is the contribution by tax revenue in India.

Question 4.
Explain GST (Goods and Service Tax) in detail.
Answer:
The GST (Goods and Service Tax) came into effect in India on 1st July, 2017.
It was proposed by the Kelkar Task Force on Implementation of the Fiscal Responsibility and Budget Management (FRBM) Act in July, 2004.
GST is an indirect tax used in India on the supply of goods and services.
GST is comprehensive because it has replaced almost all indirect taxes like excise duty, entertainment tax, entry tax, etc.

GST is classified as follows :

• Central Goods and Service Tax (CGST) : It is a tax levied on interstate supplies of both goods and services by the central government which will be governed l by CGST Act.
• State Goods and Service Tax (SGST): It is received by the state in which the goods and services are consumed and not by the state where they are manufactured.
• Integrated Goods and Service Tax (IGST) : It is a tax levied on all interstate supplies of goods and services which will be governed by the IGST Act.

Benefits of GST :

• Comprehensive tax base with nation wide coverage of goods and services.
• Boost to foreign investments and export.
• Encouragement to manufacturing ‘Make in India’ campaign.
• Improvement in investment atmosphere in a country.
• Tax system in a country simplified.
• Generating more employment and poverty eradication.

Question 5.
Explain the term public debt with its types.
Answer:
Public debt policy of the government plays an important role in public finance.
Public debt refers to borrowings of the government Raising debt loan is the most common activity of a government because in a welfare state, government expenditure generally exceeds government revenue.

Public debt is classified into two types : –
(1) Internal debt : It refers to borrowings of  the government to raise fund within the economy. In case of internal debt, domestic currency is used. It is less complex to manage internal debt. E.g. borrowings from RBI, nationalized banks and business organisations within a country.

(2) External debt : It refers to borrowings of the government to raise fund outside the economy. In case of external debt, foreign currency is used. It is more complex to manage external debt. E.g. borrowings from foreign government and international organisation like IMF, World Bank, etc. Government requires fund for investing in production as well as for making provision of infrastructure facilities.

Thus, public debt is more popular source of revenue for the government in the modern times.

Question 6.
Explain the developmental and non-developmental expenditures of the government.
Answer:
Developmental expenditure : The expenditure which results in generation of employment and price stability, it is known as developmental expenditure.

It consists of expenditure on education, social welfare, industrial development, etc. It leads to an increase in production. It is s productive in nature.

Non-developmental expenditure : It is that government expenditure which does not yield any direct productive impact on the economy. It is mainly in form of expenses on administration costs, war expenses, etc. It is unproductive in nature. It is observed that, since last 30 years, there is a tremendous growth in the total public expenditure of a country because modern government performs many functions for the social and economic development of a country.

Question 7.
Explain the importance of budget.
Answer:
Importance of Budget:
Budget is important in number of ways.

• Tax rates presented in the budget indicates disposable income of the tax payer. It also determines the development of business and individuals.
• Government expenditure is also a part of budget. This public expenditure on defence, administration, infrastructure, education, health care, etc. affects the lives of the citizens and overall economy.
• Government uses budget as a medium for implementing economy policies in the country.
• Budgetary actions of the government affect production size and distribution of income, utilization of human and material resources of the country.
  Thus, implementing suitable budgetary policy is very important for overall development of the economy.

4. State with reasons whether you agree or disagree with the following statements:

Question 1.
Tax is a major source of government revenue.
Ans. Yes, I agree with this statement.
One of the important and major source of public revenue is the tax revenue. A tax is a compulsory payment made by the citizens of the country to the government without any direct quid pro-quo. It implies that a tax has to be paid by all people and it does not involve any corresponding obligation on the part of the government i.e., government need not repay anything. Taxes are of two types (1) Direct Tax (2) Indirect Tax.

Question 2.
In Surplus budget, government revenue is greater than government expense.
Ans. Yes, I agree with this statement.
Surplus budget implies that government’s expected revenue is greater than government’s proposed expenditure.
When there is too much inflation, the government can adopt the policy of surplus budget.
In order to curb inflation, government increases revenue by levying taxes on people.
This reduces the disposable income of people and also consumption.
Since governments spending will be less than its income, aggregate demand will decrease and which will help to reduce the price and control inflation.

Question 3.
For the period of depression, deficit budget is prepared.
Answer:
Yes, I agree with this statement.
Deficit budget is one where the estimated government expenditure is more than the l expected revenue.
Normally developing countries have deficit budget.
During depression, it is used as a stabilizing tool to control economic fluctuation.
Recession occurs mainly due to lack of effective demand.
So increase in government expenditure tends to increase the income of people.
As a result, the aggregate demand increases, which will help in reducing unemployment and expanding the economic activities in the economy.
Therefore, for the period of depression deficit budget is prepared. s

Question 4.
The surplus budget creates inflationary pressure in the economy.
Answer:
No, I do not agree with this statement.
The deficit budget creates inflationary pressure in the economy.
Deficit Budget is one where the estimated government expenditure is more than expected revenue.
In order to meet the deficit, the government generally resorts to (a) borrowings from Central Bank (b) borrowings from
Commercial Banks (c) issue of new currency of the government.
This leads to increased supply of money.
As the government spend this money, there is excess supply of money without corresponding increase in the production of goods and services in short period.
As a result the prices of goods and services begin to rise.
Thus, the deficit budget creates inflationary pressure in the economy.

Question 5.
Revenue receipts and revenue expenses are known as revenue budget.
Answer:
Yes, I agree with this statement.
Revenue Budget explains how revenue is generated by the government and how it is allocated among various expenditure heads. Revenue receipts of government refers to income, which is received by government from all sources i.e., tax and non-tax revenue. These receipts do not create a liability. Revenue expenditure is the expenditure incurred for the normal running of government departments and various services.
They neither create any asset nor cause reduction in any liability of the government. E.g. expenditure on defence, police, medical public health, education, transport, etc.

Question 6.
Public finance and Private finance are same.
No, I do not agree with this statement.
There is a difference between public finance and private finance.
Public Finance : Public finance refers to income an expenditure of public authorities. The objective of public finance is to offer maximum social advantage. More credit is available in the market to increase public finance. The supply of public finance is more elastic. In case of public finance, government first determines the volume and different ways of it’s expenditure.

Private Finance : Private finance refers to income and expenditure of individual and private sector organisations. The objective of private finance is to fulfil private interest. Credit availability is limited to increase private finance. The supply of private finance is less elastic. In case of private finance, an individual considers income first and then determines the volume of expenditure.

Question 7.
There is a continuous growth in public expense in India.
Answer:
Yes, I agree with this statement.
In a developing country like India, public expense is continuously increasing.
The modern government has to perform many obligatory as well as optional functions for the social and economy development of a country.

These functions include spread of education, public health, public works, infrastructure facilities, public recreation, social welfare schemes, protection of a country, industrial development, etc.
Old functions are being performed more efficiently and new functions are added i continuously.
In addition to this, many natural and man made calamities occur frequently. So, government has to spend a huge amount for ; disaster management.
So, there is a continuous growth in the public expense in India.

Question 8.
During the period of inflation, surplus budget is advisable.
Answer:
Yes, I agree with this statement.
During inflationary period, price of commodities rises rapidly.
This rise in price can be controlled by lowering the level of effective demand in the economy.
This can be done by increasing taxes which will automatically reduce the purchasing power of the people, which will result in fall of aggregate demand.
The fall in aggregate demand will lead producers and sellers to reduce the price of l their products to increase their sale.
Thus, inflationary pressure is controlled by adopting surplus budget.

5. Study the following table figures passages and answer the following :

1.

Question 1.
What was the total public expense in the year 2009-10?
Answer:
In the year 2009-10, the total public expense was ? 10,24,487 crores.

Question 2.
Calculate the difference between public expense of 1991-92 to 2001-02.
Ans. The difference between public expense of 1991-92 and 2001-02 is ? 2,90,133 crore (3,62,450 – 72,317).

Question 3.
Observe the trends in public expense from 2015 to 2019.
Ans. The year 2018-19 shows greater trend in public expense.

Question 4.
What is the tendency of trends in public expense, shown in the given table?
Ans. The given table shows that, there is a tremendous growth in the total public expense of the country over the period of time.

(2) Read the given passage and answer the questions :

“The conventional notion of social security is that the government would make periodic payments to look after people in their old age, ill-health, disability and poverty. This idea should itself change from writing a cheque for the beneficiary to institutional arrangements to care for beneficiaries, including by enabling them to look after themselves, to a large extent.
The write-a-cheque model of social security is a legacy from the rich world at the optimal phase of its demographic transition, when the working population was numerals enough and earning enough to generate the taxes to pay for the care of those not working. This model is ill-suited for less, well-off India with growing life expectancy, increasing urbanization and resultant migration. Social security under urbanization will be different from social security in a static society.

Question 1.
State the conventional notion of social security.
Answer:
The conventional notion of social security is that the government would make periodic payments to look after people in their old age, ill-health, disability and poverty.

Question 2.
What kind of conceptual change is suggested in the given paragraph?
Answer:
The given paragraph suggests that, the idea should change from writing a cheque for the beneficiary to institutional arrangement to care for beneficiaries.
It will enable them to look after themselves to a large extent.

Question 3.
WTiat is a legacy of social security from the rich world?
Answer:
The write-a-cheque model of social security i is a legacy from the rich world.

Question 4.
Which features of India make the traditional model of social security illsuited for the economy?
Answer:
Growing life expectancy, increasing urbanization and resultant migration are the features of India that make the traditional model of social security ill suited for the economy.

6. Answer in detail:

Question 1.
Explain the various types of Government budget (Union budget).
Answer:
There are three types of government budget:
(1) Balanced Budget, (2) Surplus Budget and (3) Deficit Budget.
(1) Balanced Budget : Balanced budget is a situation in which estimated revenue of the government during the year is equal to its anticipated expenditure.

For individuals and families, it is always advisable to have a balanced budget, s Classical economist advocated Balanced
Budget, which was based on the policy of “live-with-in means”. According to them i government’s revenue should not fall short of expenditure.

They favoured balanced budget because they believed that government should not interfere in economic activities and should just concentrate on the maintenance of internal and external security and provision of basic economic and social overheads.

Till 1930 generally accepted norm was that of ‘Sound Finance’ which implied that public authority should balance its budget. But the great depression of 1930’s proved that Balanced Budget was not a guarantee of stability and full employment. It was then realised that the government can play an effective role in recovery of the economy. This is because if governments expenditure exceeds its revenue, it will generate additional demand which will accelerate the pace of economic growth. It was Keynes who gave a new approach to the budgetary policy, he replaced the norm of Balanced Budget with the norm of functional finance.

(2) Surplus Budget: A surplus budget implies when the expected government revenue is greater than proposed government expenditure.
Surplus budget shows the financial soundness of the government. When there is too much inflation, the government can adopt the policy of surplus budget as it reduces aggregate demand by spending less than its income.
In periods of inflation, although there is greater employment, there is also a tendency for prices to rise rapidly. This can be checked. The inflationary gap can be corrected by lowering the level of effective demand in the economy. It can be corrected by increasing taxes. This will reduce the purchasing power of the people but increase the revenue of the government. Thus aggregate demand will fall. The inflationary gap can be corrected by lowering the level of public expenditure.

When Government reduces its expenditure the revenue with government is in excess of its expenditure.
In modern times, governments responsibilities have increased. Surplus budget will mean that the government instead of spending for the welfare of the people is busy earning and accumulating wealth. Hence, surplus budget practically is non-existing.

3. Deficit Budget: Deficit budget is one where the estimated government expenditure is more than expected revenue. Today almost all the countries of the world follow deficit budget instead of surplus or balanced budget.
Deficit Budget solves the problem of recession and depression which occurs mainly due to lack of effective demand. Increase in total expenditure of the government, increases employment and income of the people. As a result, the aggregate demand for consumer goods increases. Increase in total expenditure tends to expand aggregate economic activity in the economy.

Question 2.
Explain components or scope of public finance in India.
OR
Explain the main components of budget.
Answer:
Public finance is one of the most important branches of economy. It highlights the role and functions of the government Government has to perform various functions like protection from external attack, generation of employment, protection of property, maintaining law and order, provision of collective needs, etc.

To perform these functions efficiently, any government needs finance which can be received from various sources.
Public finance deals with the study of principles of income and expense of the government.
The structure of public finance can be explained as follows:

The Components or Scope of Public Finance

(A) Public Expenditure : It refers to that expenditure which is incurred by the public authority (Central, State and Local Government) for promoting economic and social welfare of a country.
Public expenditure is classified as follows:

(a) Public Expenditure : It refers to expenditure on day-to-day functioning of the government. E.g. administration cost, salary allowances and pensions of government employees, etc.
It is incurred regularly but it does not create any assets to government.

(b) Capital Expenditure : It refers to the expenditure for the development of a country. E.g. investment by government in projects, provision of infrastructure, repayment of loan, etc. It does not incur regularly but it makes addition to the assets of the economy.

(c) Developmental Expenditure : It refers to that expenditure of the government, which gives productive impact to the economy.
It results into generation of employment, increase in production, etc.

(d) Non-developmental Expenditure : It refers to that government expenditure which does not yield any direct productive impact on the economy. E.g. war expenditure.
It is unproductive in nature.

(B) Public Revenue : It refers to aggregate collection of income with the government through various sources. They are classified as:
(a) Tax Revenue
(b) Non-tax Revenue

(a) Tax Revenue : There are two types of taxes collected by the government. They are as follows:

Direct tax : Direct tax is that tax which is paid by a person on whom it is legally s imposed. E.g. income tax, wealth tax, etc.
Direct tax can be proportionate – (constant rate of tax on all incomes), progressive (rate of tax increases with an increase in income) or regressive (rate of tax declines ) with rise in income. In India, we have progressive tax rate system.

Indirect tax : Indirect tax is that tax which ( is imposed on one person but can be paid by the other, e.g. GST.

A taxpayer cannot shift the burden of direct tax to others, however, in case of indirect tax, tax burden can be shifted to others.

(b) Non-tax Revenue : Non-tax revenue refers to the revenue received by the government from various sources other than taxes.

Public expenditure is an important aspect which is incurred by the public authority (central, state and local government). Public expenditure is required for the protection of the citizens of a country, for satisfying social needs or collective needs and for promoting social and economic welfare of the people in a country.

Classification of public expenditure is as under:
(1) Revenue expenditure : It is the expenditure of the government to carry out day-to-day functions. It is recurring in nature. It does not create any assets to government It consists of administrative expenditure, interest payment, pensions and salaries to government employees, etc.

(2) Capital expenditure : It refers to the expenditure of the government for the) development of a country.
It consists of huge investment in different developmental projects, repayment of government loans, investment on land, building, machines, etc.
It is non-recurring in nature

(3) Developmental expenditure : The expenditure which results in generation of employment and price stability, it is known as developmental expenditure.

It consists of expenditure on education, social welfare, industrial development, etc. It leads to an increase in production. It is s productive in nature.

(4) Non-developmental expenditure : It is that government expenditure which does not yield any direct productive impact on the economy. It is mainly in form of expenses on administration costs, war expenses, etc. It is unproductive in nature. It is observed that, since last 30 years, there is a tremendous growth in the total public expenditure of a country because modern government performs many functions for the social and economic development of a country.

(C) Public Debt:

Tax is a major source of revenue to the Government
According to Prof. Taussig, “The essence of a tax as distinguished from other charges by government is the absence of a direct ‘quid pro quo’ (benefit) between the tax payer and the public authority. ”
Prof. Seligman states that, “a tax is a compulsory contribution from a person to the government, without reference to special benefits confessed. ”
Thus, every citizen of a country is legally bound to pay tax.
Tax is imposed on income, property or commodities and services.

Types of Taxes :

(1) Direct Tax : It is paid by the tax payer on his income and property. A tax-payer cannot transfer the burden of direct tax to others.
Impact and incidence of direct tax falls on the same person. E.g. Income tax, wealth tax, etc.
Direct taxes are further classified into three categories.
(i) Proportionate tax (ii) Progressive tax (iii) Regressive tax

(2) Indirect Tax : It is levied on goods and services. It is paid at the time of production or sale and purchase of a commodity or a service.
The burden of indirect tax can be shifted by the tax-payer (producers) to other persons. Hence, impact and incidence of tax are on others. E.g. GST.
Thus, major share of public revenue is the contribution by tax revenue in India.

(D) Fiscal Policy : It is the means throughs which government adjusts its spending’s c and tax rates. It helps to monitor and influence nation’s economy. It deals with public expenditure, public revenue and l public debt.
Thus, it is the financial policy implemented by the government.

(E) Financial Administration: It implies I an efficient implementation of revenue, external and debt policy of the government. It includes preparation and implementation of the government budget along with overall economic growth of a country.

Budgetary actions of the government affect production, size and distribution of income and utilization of material and human resources of a country. Thus, the scope of public finance is important in a modern economy.

Balbharti Maharashtra State Board Class 11 Political Science Important Questions Chapter 10 The World Since 1945 – II Important Questions and Answers.

Maharashtra State Board 11th Political Science Important Questions Chapter 10 The World Since 1945 – II

1A. Choose the correct alternative and complete the following statements.

Question 1.
The first NAM summit was held at ____________ (Bangkok, Camp David, Bandung, Belgrade)
Answer:
Belgrade

Question 2.
During the Cold War, western capitalist economies, aligned to the USA were called as ____________ countries. (First World, Second World, Third World, Non-Aligned)
Answer:
First World

Question 3.
The beginning of detente was 1972, summit meeting at ____________ (New York, Camp David, Moscow, China)
Answer:
Moscow

Question 4.
In 1978, the conference at Camp David was to reduce tensions between ____________ (USA – USSR, USA – China, Arab World – Israel, India – Pakistan)
Answer:
Arab World – Israel

Question 5.
The SAARC was established in ____________ (1967, 1985, 1992, 1989)
Answer:
1985

Question 6.
Iran withdrew from the ____________ military alliance in 1979. (CENTO, SEATO, NATO, NAM)
Answer:
CENTO

Question 7.
In 1991, Commonwealth of Independent States was created after the disintegration of the ____________ (USA, USSR, Germany, CENTO)
Answer:
USSR

Question 8.
____________ tried to reform the system in the USSR. (Khruschev, Breznev, Yeltsin, Gorbachev)
Answer:
Gorbachev

1B. Identify the incorrect pair in every set, correct it and rewrite.

Question 1.
(a) Soviet Union – Brezhnev
(b) Egypt – Nasser
(c) Czechoslovakia – Tito
Answer:
(c) Yugoslavia – Tito

Question 2.
(a) SAARC – Maldives
(b) BRICS – Brazil
(c) NAM – USA
Answer:
(c) Capitalist bloc – USA

1C. State the appropriate concept for the given statement.

Question 1.
Reduction of tensions and conflicts.
Answer:
Detente

Question 2.
Principle of active participation in world affairs peacefully and without joining any military alliances.
Answer:
Non-alignment

Question 3.
The collective name for developing countries.
Answer:
Third World countries

Question 4.
Agreement signed in 1978 at Camp David.
Answer:
‘Framework for Peace for Middle East

Question 5.
Special agreements regarding economic relationships are made by a group of nations.
Answer:
Trade Bloc

Question 6.
The term used to indicate “openness” i.e., freedom of expression.
Answer:
Glasnost

1D. Answer in one sentence.

Question 1.
Which was the first direct confrontation between the USA and USSR during the Cold War?
Answer:
The first direct confrontation between the USA and USSR during the Cold War was the Cuban Missile Crisis.

Question 2.
Which nations were referred to as Second World during the Cold War?
Answer:
Eastern Socialist economies aligned with the Soviet Union were referred to as ‘Second World’ during the Cold War.

Question 3.
When and where was the first NAM summit held?
Answer:
The first NAM summit was held in 1961 at Belgrade (Yugoslavia).

Question 4.
Which was the joint (US – USSR) Space flight in 1975?
Answer:
The Apollo- Soyuz space flight, was the joint (US – USSR) space fight in 1975.

Question 5.
Who signed the agreement at Camp David in 1978?
Answer:
Egyptian President Anwar el Sadat and Israeli Prime Minister Menachem Begin in the presence of US President Jimmy Carter signed the agreement at Camp David in 1978.

Question 6.
What are the common types of trade barriers?
Answer:
Tariffs and quotas are the common types of trade barriers.

Question 7.
Where is the SAARC Secretariat?
Answer:
The SAARC Secretariat is at Kathmandu (Nepal).

Question 8.
What do trade agreements generally focus on?
Answer:
Trade agreements generally focus on relaxation or even the elimination of trade barriers.

Question 9.
Who initiated the Islamic Revolution in Iran (1979)?
Answer:
Ayatollah Khomeini initiated the Islamic Revolution in Iran(1979).

Question 10.
What is described as New Cold War?
Answer:
The detente between the USA and USSR gradually ended in 1979 and this period is described as New Cold War.

Question 11.
Name the two policies advocated by Gorbachev.
Answer:
Glasnost and Perestroika are the two policies advocated by Gorbachev.

Question 12.
Name the countries where East European revolutions took place in 1989-1990?
Answer:
Poland, Bulgaria, Romania, Czechoslovakia, Hungary had revolutions in the period 1989-1990.

Question 13.
What caused the Cold War to come to an end?
Answer:
The disintegration of the USSR in 1991 caused the Cold War to come to an end.

Question 14.
Name the countries created due to the splitting up of Yugoslavia.
Answer:
Bosnia, Croatia, Herzegovina, Montenegro, Serbia were created due to the splitting up of Yugoslavia.

Question 15.
Name the two countries formed due to the splitting of Czechoslovakia.
Answer:
Slovakia and the Czech Republic were the two countries formed due to the splitting up of Czechoslovakia.

1E. Complete the sentences by selecting the appropriate reason.

Question 1.
The non-Aligned Movement was established in 1961 because
(a) some countries like India, Egypt, etc. wanted to form their own power bloc.
(b) it was a regional organization of newly independent nations.
(c) it consisted of countries that did not want to align to any power bloc or join any military alliance.
Answer:
(c) it consisted of countries that did not want to align to any power bloc or join any military alliance.

Question 2.
The Cuban Missile Crisis laid the foundations of detente as it
(a) led to an escalation of cold war tensions.
(b) led to an immediate pileup of nuclear missiles.
(c) brought in a realization of possible nuclear confrontation and the need to reduce tensions.
Answer:
(c) brought in a realization of possible nuclear confrontation and the need to reduce tensions.

1F. Find the odd word in the given set.

Question 1.
Nkrumah, Sukarno, Nasser, Nixon.
Answer:
Nixon (not a NAM leader)

Question 2.
Vietnam, Korea, Sri Lanka, Cuba.
Answer:
Sri Lanka (not affected by Cold War)

Question 3.
Mao Zedong, Khrushchev, Gorbachev, Brezhnev.
Answer:
Mao Zedong (Chinese leader)

Question 4.
ASEAN, NAFTA, SAARC, EU.
Answer:
NAFTA (trade agreement not an organization)

1G. Expand the abbreviations.

Question 1.

1. SAARC
2. ASEAN
3. OPEC
4. NIEO
5. NAFTA
6. OAS
7. WTO

Answer:

1. SAARC – South Asian Association for Regional Cooperation.
2. ASEAN – Association of South-East Asian Nations
3. OPEC – Organisation of the Petroleum Exporting Countries
4. NIEO – New International Economic Order
5. NAFTA – North American Free Trade Agreement.
6. OAS – Organisation of American States.
7. WTO – World Trade Organisation.

1H. Arrange in a chronological order citing the appropriate dates per event.

Question 1.

1. Cuban Missile Crisis
2. Arab-Israel War
3. Apollo-Soyuz Space Flight
4. Founding of SAARC
5. Founding of NAM
6. Founding of ASEAN
7. Soviet Invasion of Afghanistan
8. Disintegration of USSR
9. Formation of EU
10. Formation of WTO

Answer:

1. Founding of NAM – 1961
2. Cuban Missile Crisis – 1962
3. Founding of ASEAN – 1967
4. Arab – Israel War – 1973
5. Apollo-Soyuz Space Flight – 1975
6. Soviet invasion of Afghanistan – 1979
7. Founding of SAARC – 1985
8. The disintegration of USSR – 1991
9. Formation of EU – 1992
10. Formation of WTO – 1995

2A. State whether the following statements are true or false with reasons.

Question 1.
In 1962, the USA established a naval blockade around Cuba.
Answer:
This statement is True.

• In 1962, Nikita Khrushchev of the USSR decided to make Cuba into a Russian base by placing nuclear missiles there.
• This would be a direct threat and so the USA retaliated with a naval blockade of Cuba.

Question 2.
The Non-Aligned Movement had great significance.
Answer:
This statement is True.

• After the Second World War, the two superpowers i.e., the USA and USSR, had begun the Cold War which led to many military alliances being created.
• Many Third World countries, which had recently gained freedom from colonial rule, did not want to ally with any power bloc. So in 1961, the NAM was formally established at Belgrade by heads of India, Yugoslavia, Egypt, Ghana, Indonesia, etc.

Question 3.
Non-Alignment means the country is internationally passive.
Answer:
This statement is False.

• Nonalignment means that a member country should not be a member of any military alliance in the context of the Cold War.
• It does not mean passivity or neutrality in international politics but means that members actively participate in world affairs to promote security, peace, and development.

Question 4.
The Moscow Summit led to an escalation of the Cold War.
Answer:
This statement is False.

• In 1972, President Nixon (USA) and General Secretary of the Communist Party of Soviet Union. Brezhnev met at Moscow.
• The summit signaled the beginning of the era of detente i.e. USA and USSR tried to reduce tensions of the Cold War

Question 5.
Mikhail Gorbachev as president of the USSR changed the course of world politics.
Answer:
This statement is True.

• Gorbachev introduced the policies of ‘Perestroika’ (reconstruction of the Soviet political and economic system) and ‘Glasnost’ (openness).
• During his tenure, there were popular uprisings against Communist regimes in East European countries like Poland, Bulgaria, Czechoslovakia, etc.
• The USSR ceased to exist and in its place, 15 new countries (CIS) were created (1991).

Question 6.
Post-1991 can be called ‘the Era of Multi polarity’.
Answer:
This statement is True.

• After the collapse of the USSR, the USA remained the only superpower due to its military, technological and economic might.
• However, many regional or economic organizations such as OPEC, European Union, G-8, G-20, SAARC, ASEAN, African Union, BRICS, etc. also play a vital role in world politics and international relations.

2B. Complete the concept maps.

Question 1.

Answer:

Question 2.

Answer:

2C. Observe the given map and answer the following questions.

Question 1.
Map of East Europe today.

Question i.
Name some countries bordering the Adriatic sea.
Answer:
Italy, Croatia, Albania, Greece, Slovenia.

Question ii.
Write the neighbouring countries of Poland.
Answer:
Czech Republic, Ukraine, Germany, Belarus.

3. Answer the following.

Question 1.
Write about the US naval blockade in 1962.
Answer:
A naval blockade is prohibiting ships from entering the port of a country. This is done by using the Navy, The United States Navy established a blockade around the island to prevent any offensive weapons from entering Cuba. This was done in retaliation to the USSR using Cuba as a strategic missile base.

Question 2.
Write about the Cuban Missile Crisis.
Answer:
In spite of attempts to create goodwill between the two power blocs (such as at Camp David Summit), tensions continued to escalate. In 1962, the first direct confrontation of the Cold War took place. This was the Cuban Missile Crisis. Cuba is a small nation off the coast of the USA. It had the support of the USSR. Due to its’ strategic location, then Soviet Premier, Khrushchev, decided to convert Cuba into a Soviet base by placing nuclear missiles there. This was a serious, direct threat to the USA which retaliated with a naval blockade of Cuba. There was a real possibility of a nuclear war. But, both superpowers realized the need to prevent such a situation and USSR withdrew its missiles from Cuba.

Question 3.
Explain Non-Alignment.
Answer:
A group of Third World countries (i.e., from Asia, Africa, South America), most of whom had recently gained sovereignty from colonial rule, refused to join any Cold War alliances. This laid the foundation for the Non- Aligned Movement. Which was formally established at the Belgrade Conference (1961) with 25 member nations. Some of the founding members were Marshall Tito (Yugoslavia) Jawaharlal Nehru, (India), Gamal Nasser (Egypt), Nkrumah (Ghana), Sukarno (Indonesia).

The concept of Non-alignment is based on two main principles:

• independent understanding of world affairs
• peace approach.

Thus it does not mean political passivity or neutrality. In fact, the idea was active participation in world affairs to promote peace and development.

The purposes of NAM were

• not to ally with any power bloc
• opposition to any military alliance
• freedom to take independent policy decisions with regard to international affairs.

Question 4.
What were the consequences of the collapse of the USSR?
Answer:
The consequences of the collapse of the USSR included-
The Commonwealth of Independent States came (CIS) into existence and finally, new countries were formed such as Ukraine, Belarus, Georgia, Armenia, etc.
Other changes due to the disintegration of the Soviet Union included:

• reunification of Germany in 1990.
• splitting Yugoslavia into Serbia, Bosnia, Croatia, Slovenia, etc.
• splitting of Czechoslovakia into the Czech Republic and Slovakia.

The disintegration of the USSR signified the end of the Cold War and the USA emerged as the only superpower (unipolarity).

Question 5.
Write about the policies of Gorbachev.
Answer:
There were significant changes in Soviet policy under Mikhail Gorbachev (President of USSR). He introduced the policies of Glasnost (openness i.e., transparency in governance and freedom of expression) and Perestroika (reconstruction of the political and economic system).

His new foreign policy included:

• withdrawal of Soviet troops from Afghanistan
• stopping of the arms race with the US and focused on arms control
• opening a dialogue with China.

Gorbachev also tried to reform domestic politics. Control of the Communist Party ended and people were given the right to criticize the government. On 25th December 1991, Gorbachev resigned and the next day the USSR as a country ceased to exist. This led to the Commonwealth of Independent States is established.

Question 6.
Write about the objectives of SAARC.
Answer:
South Asian Association for Regional Cooperation (SAARC) was established in 1985.
The objectives of SAARC are

• to promote the welfare of the people of South Asia and to improve their quality of life.
• to accelerate economic growth, social progress, and cultural development in the region.
• to contribute to mutual trust, understanding, and appreciation of one another’s problems.
• to promote active collaboration and mutual assistance in the economic, social, cultural, technical, and scientific fields and to strengthen cooperation with other developing countries.

Question 7.
Write about CIS (1991)
Answer:
Commonwealth of Independent state (CIS) was created after the disintegration of the Soviet Union in 1991. The members were the former states of the USSR. The founder members were Russia, Ukraine, and Belarus. Subsequent members were Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan.

Common affairs were conducted on a multilateral, interstate basis. It provided a framework for military, foreign policy, and economic cooperation between members.

Question 8.
Make a list of countries that were created after the disintegration of the Soviet Union.
Answer:
After the disintegration of the Soviet Union (1991) many countries like Russia, Ukraine, Belarus, Armenia, Azerbaijan, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Tajikistan, Turkmenistan, and Uzbekistan were created.

Question 9.
List the Non-Aligned Summits that have occurred since 1961.
Answer: