BASIC ECONOMIC PROBLEMS

                                            

                               BASIC ECONOMIC PROBLEMS

Q. What is poverty?

Ans: Poverty is a situation where an individual is unable to procure the basic necessities of life such as food, clothing, shelter, education and health services.

Q.What is poverty line?

Ans: The poverty line of a country creates a minimum point in the distribution line and divides a country's population into poor and non-poor.

Q. What are the causes of poverty?

Ans: The causes of poverty can be basically divided into three parts -

a) Historical: During the British rule, the Indian resources were taken abroad, and as such, the base of the Indian economy was weakened.

b) Economic:The reasons of poverty in rural India are- The absence of land ownership, the absence of employment opportunities outside the agriculture sector, the seasonal unemployment occuring in the agriculture sector, the seasonal unemployment occuring in the agriculture sector, the presence of uneducated and unskilled labour, the limited size of agricultural production, low rate of wages,etc.

The reasons of poverty in rural India are- the endless flow of labour from the rural areas because of the poverty in the rural areas,lack of housing,lack of drinking water, polluted environment, creation of slum areas,etc.  

c) Social: A big portion of the population is restricted from the benefits of socio-economic development, due to the prevalent caste system.So,the problem of poverty has taken a complex form.      

Q. What are the important reasons for the growth of population in Assam and India?

Ans: 1. High birth  rate

2. Illiteracy

3. Poverty

4. Lack of social consciousness.

5. Lack of population education       

          

Q.What is unemployment?

Ans:Usually, unemployment means lack of work. Those people who do not get any opportunity to work are termed as unemployment.

                        In Economics, those people who have the ability and desire to work but do not get any opportunity to do so, they are called as unemployment.     

Q. What are the types of unemployment?

Ans: Unemployment is generally of two types ---

1) Rural unemployment and

2) Urban unemployment       

1) Rural unemployment:It has two categories:

a) Seasonal unemployment : The seasonal unemployment are unemployed during a season, they are employed for the rest of the year. For example, people involved in agricultural activities are seasonal unemployed. 

b) Disguised or hidden unemployed: They are those who look as if they are employed but they do not have any role in the total production. For example, if a job can be carried out by two people and if the people are employed for the same, then the extra three people are said to be disguised unemployed.

2) Urban unemployment: It is also of two types -

a) Industrial unemployment: People who do not find employment in the industries are known as industrial unemployed.

b) Educated unemployment: People who do not find job opportunities despite having the required educational qualifications are known as the educated unemployed.

Q. What is worker- population ratio?

Ans: The worker - population ratio can be found out by dividing the total workforce by the total population and multiplying it by 100.

Q.In India, Who calculate the rate of unemployment?

Ans: The National Sample Survey Organisation.

Q. How does NSSO calculate the rate of unemployment?

Ans: To calculate the rate of unemployment, the NSSO has devised three concepts:

1) Usual Status, or on the basis of the current year

2) Current Daily Status

3) Current Weekly Status.

Q. What are the causes of Unemployment?

Ans: The main causes of unemployment are-

1) High rate of population growth: The high rate of growth of population is adding to the problem of unemployment.

2) Jobless growth: The increasing gap between the rate of growth of national income and the rate of employment is called as jobless growth.

3) Stagnant agricultural development: For a predominantly agricultural country like India, the rate of growth of agriculture is not up to expectations. As a result, unemployment occures among the people engaged in agriculture.

4) Slow rate of industrialisation: Industrial unemployment occures as the rate of industrialisation is not up to expectations.

5) Faulty educational system: The lack of vocational and technical education has made the population unfit for self employment.

Q. What is inflation?

Ans:In economics, a continuous rise in the general price level is known as inflation.

Q. What are the main causes of inflation?

Ans: The main causes of inflation are:

1) Demand - pull inflation: Demand - pull inflation occurs when there is an increase in the demand for commodities by the consumers , but there is no corresponding increase in the supply of commodities.

2) Cost push inflation: Cost - push inflation occurs mainly due to following reasons:

a) Rise in wages

b) Rise in profits and

c) The burden of taxes on commodities.

Q.What is Open inflation?

Ans: When there is no control over the rise in prices and there is unrestricted rise in prices , such a situation is known as open inflation.

Q. What is Suppressed inflation?

Ans: When the government controls the rise in prices by means of several direct methods such a public distribution system, fixation of prices by the government, it keeps the price level below the price level of open inflation and leads to decrease in the rate of rise in prices. This type of inflation is known as suppressed inflation.

Q. How inflation effects people?

Ans: Inflation effects people in several ways, like

a) Inflation affects to those people who are the fixed income earners.

b) Inflation also affects savings adversely.