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Class 9 Economics Chapter 2



People as Resource
 Economic Activities: The activities which result in the production of goods and services and value to the national income are called economic activities.  Disguised Unemployment: It happens when the number of persons employed in a task is more than what is required ; If these extra persons are removed, there is no adverse effect on the output.  Educated Employment: It occurs when people with formal education, upto some minimum standard ( generally upto secondary school) , fail to find a productive job.  Gross National Product or National Income: Refers to the sum total of the money value of all final goods and services produced in an economy during a year.  Market Activity: That part of the activity which produces such goods or services that are sold and purchased in the market, and the provider of the service gets paid for it.  Non-market Activity: The performer of this type of economic activity produces primarily for self – consumption.  Own-Account Production: The produced asset is not sold in the market; it is produced for self consumption, e.g. ,a house.  Primary Sector :It consists of all those activities which are based on natural resources, such as agriculture, forestry, animal husbandry, fisheries, poultry farming, and mining.  Seasonal Unemployment: It happens when people are not able to find jobs during some months of the year.  Secondary Sector: It consists of all those activities which transform the shape of nature based raw materials into some useful objects, e.g. quarrying and manufacturing.  Tertiary Sector: It consists of all those activities which are concerned with the distribution of goods and services so that these reach the final consumers, e.g. trade, transport, communication, tourism, health and insurance.  Unemployment: A situation in which a person is willing to work at current wage rate, but doesn’t get a job.  Vicious Cycle: One bad event results in another negative event, which in turn perpetuates the first event and so on; it becomes difficult to identify which is the cause and which is the effect of the cycle.  Virtuous Cycle: One good event leading to another; this, in turn, further promotes the first positive event, which, in turn, once again promotes the second positive event and so on. Q1 What is human capital formation? How is it different from Physical Capital formation? Human capital formation refers to addition to the stock of human capital in the country. This addition takes the form of investment in education, training and health care. Human capital formation is both similar to and different from physical capital formation. => Human capital formation adds to the productive capacity and generation of income; physical capital formation also performs the same function. =>Human capital formation adds to the stock of human skills and knowledge. Physical capital formation adds to the stock of tools equipments, machinery and buildings in an economy. Q2 When do “people” become a resource? Human beings without any ability to work are known as simple or ordinary people but given proper education, skills, training and proper health care, the same human beings constitute human capital; it is an indispensable resource which constitutes to a nation’s growth and welfare.

training. It is a way of referring to a country’s working people in terms of their exciting productive skills and abilities.Q3 What do you understand by “people as a resource”? The term People as a resource refers to population as asset for the economy.000 GNP has increased by 10%. Suppose the GNP of an economy in the year 2000-2001 was Rs. It is often calculated separately for differing gender and geographic location. Society as a whole also gains indirect ways from educated population.000 ) X 100 = 10% 1.10. It is a significant concept because An increase in the gross national product means that the output of goods and services in an economy has increased. Q9 Define life expectancy. Life expectancy is a statistical measure of the average length of survival of a living thing. The advantage of a more educated population spreads to those who are not directly educated. yield a return in the form of higher incomes and higher productivity. The quality of population depends upon the => literacy rate =>Health of a person indicated by life expectancy =>Skill formation Q7 Define infant mortality rate (IMR) Infant mortality rate is the death rate of a child under one year of age. Educated people earn higher incomes on account of higher productivity which aids to the growth of the economy.10. Q8 Which age group constitutes the work force population? The workforce population includes people from 15 . which is the same as the expected age at death. . Q12 ‘ Population is an asset for an economy rather that a liability. In case of rural areas there is seasonal and disguised unemployment. Urban areas have mostly educated unemployment. We will say that the rate of the growth of the economy in 2001-2002 was 10% over the preceding year. Therefore every country seeks to improve the size of GNP.00. Q4 What is the role of education in human capital formation? Education plays an important role in human capital formation. Q10 Is there any difference b/w unemployment in rural and urban areas? Yes the nature of the unemployed differs in rural and urban area. Q11 What is the significance of the concept of Gross National Product? Gross National Product measures the output of goods and services produced in an economy during a given year. and it can be calculated for any age. Population turns into a productive set as a result of education. However.00.000 crore and it increases to Rs 1.000 – 1. The percentage increase in the GNP is measured as follows: (1.000 crores in the year 2001-2002. 1.59 years. Availability of more goods and services means that the standard of living and the welfare of the people has improved. Q5 Does investment in human capital yield any return? Yes investment human capital through education. More goods and services are now available in the economy. life expectancy means the expected time remaining to live.’ Comment. Popularly it’s most often construed to mean the life expectancy at birth for a given human population. Increase in GNP is also a measure of economic growth of a country. technically. Q6 Name the factors on which quality of population depends. medical care.00.

population was being treated as a liability. b) A country’s resources are better utilized. More important thing is that it supplies the most important factor resource i. In an undeveloped economy. banking. b) Information Technology Revolution. forestry. human capital. Primary activities include those activities which are related to the natural resources like cultivation of land. poultry etc. . It has totally changed the way the information is generated and distributed. A healthy person is able to devote more time to his work.. It occurred in the late 1960s. Low productivity .Population . As a result the output and the overall GNP of a nation also increase. investment in education brings returns in future. It includes all the activities which produce different type of services needed by the people in the economy. primary sector is the dominant sector of the economy. It was thought that larger the population . clothing etc would be required for their survival. It is the human capital that organizes the production activities and uses other factor resources. E. driving etc. Q13 What do you understand by the virtuous cycle of human development? By virtuous cycle of human development we mean that human development causes more human development. They neither have the means or the knowledge to provide education or healthcare to their children. Q14 Differentiate between different types of economic activities with the help of examples. It was primarily brought out by the application of the human mind and knowledge in cultivation. Education enhances the cultural richness of a country and the efficiency of governance. It is relatively a new phenomenon.children grow up as educated and healthy adults…………. b) Secondary activities. With economic growth the relative shares of secondary and tertiary sectors increases whereas that of the primary sector falls.g. It brought about massive increase in the crop production. Q17 Examine the role of health in human capital formation. However. this view for population was not correct. Different type of economic activities can be classified into: a) Primary activities. a) Green revolution. Education provides better knowledge and skills. for long. Like any other investment. He has more strength. Let us see how this happens: Educated and healthy parents…………provide good education to their children . teaching. the uneducated and sick parents are trapped in vicious cycle of underdevelopment. transformation of wheat into flour is a secondary activity. more resources like food . low income and poverty perpetuate the vicious cycle. Human beings make a demand on the nation’s resources for their survival. E. A person with more knowledge and skills is generally more productive.g. energy and stamina.these adults become parents and the same cycle sets off again. Q15 Give two examples of how the human capital has brought phenomenal changes in the Indian economy. provide adequate nutrition and healthcare to their children.e. As a result: a) An educated person has higher income because his services command a higher price. It has been brought out by the application of human skills and knowledge. c) Tertiary activities. It is in this sense that the stock of knowledge and skills that constitutes the human resource is a valuable asset. Hence. Enjoy higher incomes and better standard of living…………. These are the activities which are concerned with the transformation of natural resources into other goods. Q16 What is the role of education in human capital formation? Expenditure on the education of a child can be seen as an investment. Conversely. has been seen as a liability which slows the rate of the economic growth. This view of population was based on the view that population represented the stock of the human beings. They are more efficient and productive.

There is no discrimination between men and women. knowledge and training are paid higher. The rate at which the white collar jobs are created in India is much less than the rate at which the population and education is increasing. Do you agree? This is not universally true that women are employed into low paid jobs. It is called seasonal unemployment. one farmer cultivates the land and manages to produce 5000 kg of wheat. This is because of the following reasons: a) A poor cannot afford to sit unemployed for a long period of time. E. Therefore. although all persons will be reported as employed. He would be recorded as employed and not as unemployed. b) Quality improvement c) Vocationalisation of education d) Promotion of distant education e) Convergence between formal and non – formal system of education f) Adoption of state specific curriculum Q20 ‘Unemployment rate in India is low. he accepts whatever job comes his way. The total output remains as before i.g. They do not possess any skills or training. low paid job. weeding and threshing. All those with higher skill. In between there is either no or little demand for labour. Unemployment rate in India is low as compared to other countries. b) A major part of our labour force is engaged into agriculture. he is more efficient and productive.’ Explain. Such women have to take up low paid jobs generally in unorganized sectors of the economy. agriculture is a seasonal activity. Q18 Women are employed in low paid jobs. They work as extras on land. In fact India experiences a large rate of underemployment . The Tenth Five Year Plan aims to : a) Increase the number of schools and colleges. Q22 Why is educated unemployment a peculiar problem in India? Educated unemployment is a situation where a person has some formal education but fails to find a job for himself. Disguised unemployment is a situation where the number of people employed in a job is more than what is optimally required. There is rarely any vocation element in it.g.e. The reality is that a large portion of the agricultural labour force is disguisedly unemployed. He has to find work for his subsistence. suppose on a given farm land. Therefore any expenditure on healthcare may be regarded as the investment made in human capital formation. Q19 Outline the strategies of the Tenth Five Year Plan to promote education. in general a large number of women are illiterate. harvesting. Q23 How does unemployment adversely affect an economy? . 5000 kg. However. Agricultural labourer finds himself as unemployed during this period. India is experiencing this problem mainly because of the following reasons: Much of the education is of low-quality. E. Soon. A worker’s remuneration in a work depends upon the level of skill and knowledge involved. Therefore. These two persons will be called as disguisedly unemployed. it means that these two additional labourers are not making any contribution to the total output. It may involve much hard work without sufficient remuneration. In agriculture it is difficult to identify who is employed and who is unemployed.Hence. Seasonal unemployment refers to a situation where a large number of people are unable to find a job during some months of the year. There is an increased demand for labour at the time of sowing. two other members of his family join him and share his work. much of education is irrelevant. It may be a low productivity. A poor man would be compelled to accept it. Also they are subjected to job insecurity. Q21 Distinguish between disguised unemployment and seasonal unemployment.

Human beings represent a national resource. But when unemployed. shortage of raw materials. frequent strikes. An unemployed person is a liability. As a result. sick industrial units etc. This slow economic growth is neutralized by our rapid growth of population. more persons are dependent on others. size of our families. e) Less savings. leaves no surplus and causes unemployment. Hence. c) More the unemployed persons in an economy. c) Under-developed industries. power shortage. b) Overdependence on agriculture. When in a job. To earn huge profit and to save their industries from labour unrest. Little savings means that only little is available for investment. a) Slow rate of economic growth. More of the income gets consumed and only a little is saved. b) An employed person is a human resource and therefore an asset for the economy. Our economy is characterized by low savings due to low incomes and poverty. Over 60% of the Indian population is dependent on agriculture for their livelihood. our industries are switching over to capital intensive technology. Our educational system is educated. job opportunities are very limited in industrial sector. retards capital formation. essential inputs. outdated machinery. their potential contribution to the economy’s growth remains zero. Industrial development in India is very slow due to shortage of capital. investment and capital formation. . we have a large number of educated unemployed. f) Use of capital intensive technology. contribute to the generation of national product. He does not contribute to the national product. It is not job-oriented. Q24 What are the causes of unemployment in our economy? Rapid growth of population cuts away our limited and existing and limited resources. Seasonal character of agriculture and disguised unemployment in agriculture are the causes of unemployment in our country.Unemployment adversely affects in an economy in the following ways: a) It leads to the wastage of national resources. d) Defective educational system. India is a slowly growing economy. less investment and almost no capital formation. Rather puts a pressure on the natural resources for his survival.