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 NATIONAL INCOME AND RELATED
1 AGGREGATES
CASE BASED Questions (CBQ)
22. (A) I n this case, the high inventory levels
indicate that the stock of soft drink is
high. The difficulty in selling all of the
stock could be due to a slow flow of
the product from the inventory to the
customers. The CEO could examine the
production and sales data to determine
if there is an imbalance between the two.
(B) The CEO can take steps to address it,
such as reducing production, improving
marketing and distribution, or finding new
markets for the product. Sales, Market
Management, and Inventory turnover are
the ways of evaluating the effectiveness
of solutions implemented.
25. (A)
23. (A) There could be several factors including,
the benefits of the increase in national
income not evenly distributed across the
population, economic inequality, with a
large portion of the population living in
poverty, economic, lack of infrastructure,
inadequate education or healthcare
systems, or political instability.
(B) To ensure that increase in national income
benefits its citizens more directly, the
government of Country X could implement
policies that focus on reducing economic
(B) Real and money flow are closely related
inequality and poverty, improving access
to education and healthcare, and investing
in infrastructure development.
24. (A) Macroeconomics is the study of whole
economies–the part of economics
concerned with large-scale or general
economic factors and how they interact
in economies. It focuses on issues such
as economic growth, inflation, and
unemployment, and considers the impact
of government policies on the economy.
In contrast, microeconomics focuses on
individual markets, such as the market
for a specific product or service, and
considers the behavior of consumers and
producers in those markets.
(B) The circular flow of income is a model
that describes the flow of money
through the economy. It is based on the
National Income and Related Aggregates
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idea that all economic activity can be
divided into four sectors: households,
firms, government, and the rest of the
world. In this model, households supply
labor to firms, which produce goods and
services that are sold to households. The
government collects taxes and spends
money on goods and services, and the
rest of the world engages in international
trade with the domestic economy. This
flow of money between the four sectors
creates a circular flow of income, which
helps to support economic growth and
development.
Money flows depict the way that money
and credit circulate in the economy as
income turns into savings and investment
and back again. Real flows depict the
way that commodities and products &
services are produced and consumed
in the economy. While mainstream
economists often discount the relation
between real and money flows, many
others understand that the two are
intrinsically linked.
in the economy. The real flow represents
the physical production and consumption
of goods and services, which generates
income for households and profits for
firms. This income is then used to make
transactions in the money flow, such
as purchasing goods and services or
investing in financial assets. Conversely,
the money flow can impact the real flow
by influencing the level of investment
and consumption in the economy. For
example, if interest rates are low, it may
be easier for firms to obtain financing to
invest in new projects, which can increase
the level of production and consumption
in the real flow. Therefore, the real and
money flow are interconnected and can
impact each other in a variety of ways.
1
 2 MONEY AND BANKING
CASE BASED Questions (CBQ)
22. (A) 
An increase in the repo rate will have a
direct impact on the economy. Higher repo
rates will lead to a decrease in liquidity in
the market, as banks are less likely to lend
out money. The Reserve Bank of India
(RBI) uses the repo rate as an interest rate
when lending money to commercial banks
in order to control inflation rates.
(B) It will lead to higher borrowing costs for
businesses and individuals, resulting in
reduced spending and investment. This, in
turn, will lead to slower economic growth,
as businesses and consumers are less
likely to take on new debt. Additionally,
this will also lead to higher interest rates
for loans, making it more expensive for
individuals and businesses to borrow
money.
23. (A) 
The core banking function of a commercial
bank is to accept deposits from individuals,
businesses, and other organisations and
provide loans to customers. It is largely a
division of a large bank which deals with
loan and deposit services provided to
large and small size businesses.
(B) Commercial banks offer various services
to their customers, such as online banking,
debit cards, credit cards, and other
payment services. They also provide
investment products such as mutual
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funds, insurance policies, and pension
schemes to help customers grow their
wealth.
24. (A) 
The three functions of money are as
follows:
(1) Medium of exchange: It means
that money can be used to make
payments for all the transactions of
goods and services. A buyer can buy
goods through money, and a seller
can sell goods for money.
(2) Measure of value: Money serves as
a measure of value. The value of all
goods and services is expressed in
terms of money.
(3) Store of value: Store of value implies
a store of wealth. Money can be
easily stored for future use. It is the
most convenient and economical
means to store earnings and wealth.
(B) The value of money depends on supply
and demand because when the supply of
money increases, the value of each unit
of money decreases. Conversely, when
the demand for money increases, the
value of each unit of money increases.
This is because the more money there is
in circulation, the less valuable it becomes,
and the less money there is in circulation,
the more valuable it becomes.
 3 DETERMINATION OF INCOME AND
EMPLOYMENT
CASE BASED Questions (CBQ)
21. (A) Aggregate demand is the total amount 22. (A) Since, MPC + MPS = 1
of goods and services that consumers,
1
businesses, and the government are MPC + 4 MPC = 1
willing and able to purchase at a given 4
price level. When aggregate demand MPC = 5
is high, businesses are encouraged to MPC = 0.8
produce more goods and services, which (B) (i) Consumption expenditure (C) = C + bY
leads to higher levels of employment and C = C + bY
income.
C = 1.4 + (0.8) 700
(B) Government policies, such as fiscal and
C = 1.4 + 560
monetary policies, can have a significant
C = 561.4 Crore
impact on the level of economic activity
in an economy. For example, if the (ii) Savings (S) = C + (1 - b)Y
government increases its spending S = – C + (1 – b) Y
on infrastructure projects, this can
S = – 1.4 + (1 – 0.8) 700
stimulate economic growth and increase
employment and income levels. S = – 1.4 + 140
S = 138.6 Crore

Determination of Income and Employment 3

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 4 GOVERNMENT BUDGET AND THE
ECONOMY
CASE BASED Questions (CBQ)
22. (A) The economy may benefit from increased
defence spending by way of new job
opportunities and an increase in the
production of goods and services related
to defence. It may, however, also have
unfavourable effects, such as a rise in the
fiscal deficit and a drop in government
spending on other crucial areas like
infrastructure, health, and education.
(B) The government might have done things
like increase financing for research and
development, encourage entrepreneurship
and innovation, and spend money
on infrastructure and human capital
development. These actions can aid in
addressing national security worries
while also advancing general economic
development.
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23. (A) T
 he estimated revenue for the year in the
budget is $50 billion. The country is facing
challenges such as a high debt-to-GDP
ratio, a large informal economy, and high
levels of corruption.
(B) The government has allocated funds
for building new hospitals and schools,
expanding the transportation system,
and investing in renewable energy. These
are parts of capital expenditure which
create assets for the government.
24. (A) The main objectives of the government's
budget for the fiscal year 2023-2024 are
to stimulate economic growth, improve
infrastructure, and provide relief to those
affected by the COVID-19 pandemic.
(B) The sectors that have received significant
funds in the budget include health,
education, agriculture, and transportation.
 5 BALANCE OF PAYMENTS
CASE BASED Questions (CBQ)
22. (A) Balance of Payment (BoP) is a
statement that records all the monetary
transactions made between residents
of a country and the rest of the world
during any given period. It is important
because it provides information on the
overall economic health of a country
and its ability to pay its debts to other
countries. A country with a persistent
deficit on its current account may face
difficulties in financing its external debt
and may be forced to take measures to
address the imbalance.
(B) The balance of payments is divided
into two main components: the current
account and the capital account. The
current account records transactions
related to trade in goods and services,
25. (A) Foreign Exchange Rate is defined as
as well as income received and paid
to foreign countries, while the capital
account records transactions related to
capital movements, such as foreign direct
investment and portfolio investment.
Jointly, these two components give a
complete picture of a country's economic
transactions with the rest of the world.
23. (A) False, because unilateral receipts of
external assistance are included in
the current account of the Balance of
Payments. Although, external assistance
is recorded in the balance of payments,
specifically in the current account.
(B) Capital account of BoP records all
transaction related to investments and
financial flows.
24. (A) France is following the system of
managed floating exchange rate. France
has a positive balance of payment as its
exports of goods and services are more
than imports of goods and services.
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(B) Foreign exchange reserves are an
important part of a country's financial
stability. They are a store of value that
countries can draw upon to pay for
imports, service foreign debt, and stabilize
their currency. By having a large amount
of foreign exchange reserves, a country
can maintain a healthy balance of
payments, which is essential for economic
growth. Having a large foreign exchange
reserve also provides a buffer against
economic shocks, such as a sudden drop
in the value of a country's currency. In
addition, foreign exchange reserves can
be used to support domestic monetary
policies, such as controlling inflation. As
such, foreign exchange reserves are an
important part of a country's economic
health and stability.
the price of the domestic currency with
respect to another currency. The purpose
of foreign exchange is to compare one
currency with another for showing their
relative values. It is important because it
affects the cost of imports and exports, as
well as investment flows across borders.
Changes in the exchange rate can impact
the competitiveness of a country's exports,
affect the purchasing power of its citizens,
and impact the profitability of businesses
operating in the global market.
(B) The foreign exchange rate is influenced
by supply and demand factors in the
foreign exchange market, such as
changes in interest rates, inflation, and
political stability. For example, if interest
rates increase in a particular country,
foreign investors may be more inclined
to invest in that country, leading to an
increase in demand for its currency and
a corresponding increase in its exchange
rate.
Balance of Payments 5
 6 INDIAN ECONOMY ON THE EVE OF
INDEPENDENCE
CASE BASED Questions (CBQ)
21. (A) The major challenges faced by the Indian
economy on the eve of independence
were the need to shift from an agrarian-
based economy to an industrial one and
poverty alleviation.
(B) The Indian government took steps
to promote domestic industry by
implementing policies that encouraged
domestic industry and building a strong
industrial base. This was done through
various measures such as land reforms
23. (A) The Indian economy on the eve of
and other welfare measures.
22. (A) Under British rule, the production of Indian
Handicrafts faced a rather sharp decline.
When the East India Company was in
power, it forced a monopoly over the
production of artisans from Bengal, and
the price of these products was fixed 15-
40% lower than their actual market price.
What came as the biggest blow to the
(B) Despite the challenges facing the Indian
Indian artisans, however, was the removal
of most of the Indian princes and nobles,
which as an effect, led to the destruction
of the artisan’s major market.
(B) Despite the growth of the handicrafts
industry in India and the measures
taken by the government to promote
handicrafts, the average earning of a
craftsman when compared to that of
other fields is very low. Hence, the younger
generation is moving to other fields with
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only the elder craftsmen being left behind.
The country needs a younger generation
of craftsmen to carry on the tradition of
handicrafts and this is only possible by
ensuring the assistance of craftsmen to
improve their techniques, availability of
quality raw materials, direct marketing
channels, credit and better wages and
providing them with socio-economic
benefits.
independence was characterised by a
number of challenges, including poverty,
low levels of industrialisation, and a heavy
dependence on agriculture. The vast
majority of the population lived in rural
areas, and most people were engaged in
subsistence agriculture. Additionally, most
industries were located in urban areas
and dominated by foreign companies.
economy on the eve of independence,
there were also some positive
developments. For example, there had
been a significant expansion of the
railway network, which had helped to
connect different parts of the country
and facilitate trade. There had also been
some progress in the development of
infrastructure, such as roads, bridges, and
irrigation systems.
 7 INDIAN ECONOMY [1950-1990]

CASE BASED Questions (CBQ)

22. (A) Green revolution was implemented
in India to overcome the shortage of
food-grain availability in the post-
independence period. Green revolution
has increased the production and
24. (A) One of the primary reasons for the
productivity in the agriculture sector
which was otherwise very low. It
helped in improving the income of the
farmers by creating marketable surplus,
increased employment and output.
(B) The given statement is appropriate as
the Green Revolution helped government
(B) Import substitution policy tried to
to procure and preserve more food grains
through agencies like Food Corporation
of India. Increase in food grain production
has been so substantial that India not
only started maintaining buffer stocks of
food grains but also became a dominant
player in food grain exports market.
25. (A) Agriculture saw significant progress
23. (A) The Green Revolution was a period of
agricultural innovation and development
that aimed to increase global food
production through the introduction of
new high-yield crop varieties, the use of
chemical fertilisers and pesticides, and
(B) Measures
improvements in irrigation systems.
(B) One of the positive outcomes of the
Green Revolution was a significant
increase in crop yields in many parts
of the world, particularly in Asia.
However, the Green Revolution also
had some negative consequences, such
as environmental damage due to the
overuse of chemical fertilisers and
pesticides, and the displacement of
traditional farming practices and rural
communities.
deployment of import substitution is that
developing countries such as India are
unable to compete with more developed
countries and the goods produced by
them.
eliminate the risks to domestic industries
from foreign competition. The Import
Substitution Policy can achieve the
following two clear objectives:
(1) Achievement of self-reliance
(2) Savings of precious foreign exchange.
during the five-year plans between
1950 and 1990, with efforts to improve
agricultural productivity leading to self-
sufficiency in food production by the
1980s.
taken to promote
industrialisation during this period
included the establishment of public
sector enterprises, import substitution,
and protectionist policies. While these
policies did lead to the growth of certain
industries, they also had unintended
consequences such as inefficiency and a
lack of competition.

Indian Economy [1950-1990] 7

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 8 LIBERALISATION, PRIVATISATION AND
GLOBALISATION: AN APPRAISAL
CASE BASED Questions (CBQ)
22. (A) The financial sector is a broad term that
encompasses a variety of industries
that are involved in managing money,
such as banks, insurance companies,
investment firms, and stock exchanges.
These businesses provide services such as
lending money, managing investments,
and providing insurance.
(B) Investment is an important part for the
Indian economy, as it helps to create jobs,
stimulate economic growth, and increase
the country's wealth. Investment can also
help to reduce poverty and inequality, and
24. (A) Liberalisation in economics means
promote economic stability. It can provide
access to capital for businesses, which
in turn can help to create new products
and services, and drive innovation.
Investment also helps to provide capital
for infrastructure projects, which can help
to improve the quality of life for citizens.
In addition, investment can help to attract
foreign direct investment, which can help
to boost the country's economy.
Related Theory
 Foreigninvestment can be categorised into Foreign
Direct Investment, Foreign Institutional Investment,
Foreign Portfolio Investment.
23. (A) The World Trade Organisation (WTO) is
an international body that sets the rules
for global trade and provides a forum for
countries to negotiate trade agreements.
The WTO plays an important role in
facilitating and regulating bilateral and
multilateral trade. It sets the rules for
international trade, resolves disputes
between countries, and provides a
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platform for countries to negotiate trade
agreements. The WTO also works to
reduce barriers to trade, such as tariffs
and subsidies, and to promote fair and
open competition in the global market
place. Ultimately, WTO seeks to ensure
that trade is conducted in a way that
benefits all parties involved.
(B) Bilateral trade is a type of trade that
occurs between two countries, while
multilateral trade is a type of trade that
occurs among multiple countries.
minimising the government's restrictions
and regulations in an economy, in
return for higher involvement of private
organisations. In short, liberalisation
means the removal of restrictions in order
to promote economic development.
(B) T
 he economic reforms under liberalisation
have resulted in increased competition,
improved efficiency, and greater
economic growth. However, the reforms
have also led to job losses, income
inequality, and social unrest in some
cases. The advantages of liberalisation
include improved market efficiency,
increased international trade, and
economic growth. The disadvantages of
liberalisation include job losses in certain
sectors, income inequality, and social
unrest. It is important for policymakers
to consider both the advantages and
disadvantages of liberalisation when
implementing economic reforms.
 9 HUMAN CAPITAL FORMATION IN INDIA
CASE BASED Questions (CBQ)
21. (A) Expenditure incurred for acquiring
information related to the labor market
is one of the sources of human capital
formation.
(B) Economic growth implies an increase in
the real national income of a country.
An educated person helps to develop an
economy by expanding the knowledge
and skills of its people. A healthy person
could provide uninterrupted labour supply
over a long period of time. Therefore, an
educated and healthy person contributes
to the GDP of a country.
22. (A)  Government expenditure on education is
important because it enables the provision
of quality education to all individuals,
regardless of their socio-economic
background. Education is a fundamental
right that should be accessible to all,
and government expenditure helps to
ensure that this is the case. Additionally,
education is a critical component of
economic growth and development, as
it enables individuals to acquire the skills
and knowledge necessary to succeed in
the labor market, which in turn can lead
to increased productivity and economic
growth.
(B) 
Government expenditure on education
can impact student success in a variety
of ways. For example, it can enable the
provision of quality educational resources
such as textbooks and technology, which
can improve the learning experience
for students. Additionally, it can help to
attract and retain high-quality teachers,
who are critical to the success of students.
Finally, government expenditure can
help to provide access to education for
all individuals, regardless of their socio-
economic background, which can help
to reduce inequality and promote social
mobility. Overall, government expenditure
on education is a critical component of
ensuring that all individuals have access
to quality education and can reach their
full potential.
Human Capital Formation in India
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23. (A) Migration is the movement of people from
rural to urban areas or to other countries
in search of good jobs, opportunities,
higher salaries, improved living conditions,
or other socio-economic benefits. People
migrate from rural to urban areas or to
other countries because of the following
reasons:
(1) It can fetch them higher salaries.
(2) I
t can provide them better employ-
ment opportunities.
(B) Unemployment is a situation in which
people who are willing to work, are
unable to find any work. It is often
characterised by a lack of job availability
that matches the skills and qualifications
of the workforce and can exist in various
forms such as cyclical, fractional etc.
24. (A) Human capital formation refers to the
process of adding to the stock of human
capital over time. It is the process of
acquiring and increasing the number
of skilled and experienced people. It
is essential for economic growth and
development of an economy. It is
important because it enables individuals
to increase their productivity and
contribute to the overall growth of the
economy. By investing in education,
training, and on-the-job experience,
individuals can acquire the skills and
knowledge necessary to succeed in the
labor market, which in turn can lead to
higher wages and increased economic
growth.
(B) G
 overnment policies and programs
can facilitate human capital formation
by investing in education and training
programs, providing financial support for
individuals to pursue higher education,
and offering incentives for businesses
to invest in employee training and
development. These initiatives can help to
increase the overall level of human capital
in the economy, which can lead to higher
productivity, increased innovation, and
overall economic growth.
9
 10 RURAL DEVELOPMENT IN INDIA
CASE BASED Questions (CBQ)
21. (A) In this case farmers facing challenges
such as limited credit availability and
difficulties in securing loans from the local
cooperative. The lack of accessible credit
inhibits their ability to invest in agricultural
activities, hindering overall economic
development in the rural village.
(B) The rural economy can grow only if it
has adequate flow of finance. It is capital
only which can ensure higher productivity
in agriculture. Provision of rural credit
enables a farmer to buy improved
seeds, fertilizers, organic pesticides and
equipments. All these inputs help hire to
increase his agricultural productivity and
his income.
So, importance of credit in rural
development can be perceived as a
means to break the!vicious circle of low
capital, low productivity and low savings
of the rural poor.
22. (A) P
 eople's participation is crucial in rural
development from both procedural and
philosophical perspectives. It is considered
the centerpiece of rural development, as
it ensures that development plans and
strategies are inclusive and responsive
to the needs of the rural population.
By actively involving the clientèle
of development, rural development
becomes richer and more meaningful.
People's participation helps in creating
a sense of ownership, encourages local
knowledge and expertise, and fosters a
sense of empowerment among the rural
communities.
(B) The objectives of rural economic
development are:
(1) Alleviation of poverty and
unemployment.
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(2) Creation of basic social and economic
infrastructure in rural areas.
(3) Provision of training to unemployed
rural youth.
(4) Providing employment opportunities
to marginal farmers and labourers to
discourage migration to urban areas.
(5) Achieving all-round economic and
social transformation in rural areas.
(6) Reaching out to the most
disadvantaged sections of society.
23. (A) The non-institutional sources of credit are
not recommended by the government
because of the following reasons:
(1) They charge exorbitantly high rates of
interest.
(2) They manipulate accounts to keep
the farmers in debt-trap.
(B) May rural residents were entirely
dependent on private money lenders
for any form of financial support even
after independence. To better meet
the needs of economic development
in line with national policy objectives.
The government of India resolved to
nationalise scheduled commercial banks
that had deposits over 50 crorer.
Major objectives of nationalisation of
banks was:
(1) The expansion of banking into the
rural areas.
(2) To ensure financial inclusion.
Related Theory
 On 19th July, 1969, a major process of nationalisation
was carried out and 14 major commercial banks
in India were nationalised. The second phase of
Nationalisation Indian Banking Sector Reform was
carried out in 1980 with six more banks.
 11 EMPLOYMENT
CASE BASED Questions (CBQ)
22. (A) (1) 
Modemization: encouraging new
techniques, methodologies, social
outlook and policies.
Example: Modernisation of informal
sector enterprises and provision of social
security, measures to informal sector
workers.
(2) Self-reliance: avoiding import of
goods that could be produced in
India itself, optimum utilization of
nation's own resources, encouraging
indigenous industries.
(3) Equity: encouraging policies revolving
around providing food, a decent
house, education and health care so
that the inequality in the distribution
of wealth could be reduced.
(4) Growth: aiming to increase the
country's capacity to produce the
output of goods and services within
the country by either stimulating a
larger stock of productive capital or a
larger size of supporting services etc.
(B) (1) 
Recession is the slowdown or a
temporary economic decline in
an economy wherein production
activities are at the lowest.
(2) 
Employment is directly proportional
to growth.
(3) 
In the 1980s, when India recorded
one of its lowest growth. As a result
of this recession, India encountered a
decline in economic activities which
lead to decreasing output. Hence
employment opportunities decreased
leading to unemployment.
23. (A) Unemployment refers to a situation
in which people who are capable of
working and willing to work but they
are not getting work. Workforce refers to
the number of persons who are actually
working in an economy. Labour force
refers to the number of persons who
are actually working or willing to work
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in an economy. The difference between
labour force and work force is called
unemployment. A it occurs, when the
labour force increases rapidly but the
companies and jobs are limited in the
economy. Which shows the difference
between them are increasing.
Related Theory
 Unemployment rate in India inched higher to 7.45%
in February 2023 from 7.14% in January 2023,
taking the total number of unemployed in the
country to 33 million compared to 31.5 million in
January.
(B) 
Women carry out works like cooking,
fetching water and fuelwood and
participate in farm labour. They are not
paid wages in cash or in the form of
grains; at times they are not paid at all.
For this reason, these women are not
categorised as workers.
24. (A) Some of the factors that make the
job market more competitive include
automation, globalization, and economic
downturns
(B) Effective strategies for finding
employment include networking,
developing skills and education, attending
job fairs and industry events, and
remaining persistent in your job search.
25. (A) Individuals who are unemployed face
financial challenges that can lead to
increased poverty, debt, and stress.
They may also experience a sense of
hopelessness and loss of self-esteem,
which can exacerbate the problem.
(B) Advances in technology have led to the
automation of many jobs, resulting in job
losses for many individuals. Additionally,
the rise of the gig economy has led to a
shift away from traditional employment
models, with many workers now engaged
in temporary, contract, or freelance work.
Employment 11
 12 ENVIRONMENT AND SUSTAINABLE
DEVELOPMENT
CASE BASED Questions (CBQ)
22. (A) Global warming refers to the long-term
increase in Earth's average surface
temperature due to human activities, such
as burning fossil fuels and deforestation.
Global warming is the phenomenon of a
gradual increase in the temperature near
the earth’s surface. This phenomenon has
been observed over the past one or two
centuries. This change has disturbed the
climatic pattern of the earth.
(B) Some of the impacts of global warming
include rising sea levels, more frequent
and intense heat waves, and more severe
weather events such as droughts and
floods.
23. (A) The two environmental concerns discussed
in the case study are global warming and
ozone depletion.
The burning of fossil fuels and the
release of green house gases and
chlorofluorocarbons (CFCs) into the
atmosphere are responsible for causing
global warming and ozone depletion.
12 Economics Class XII
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(B) The long-term effects of global warming
mentioned in the case study include
melting of polar ice, species extinction, and
increased incidence of tropical illnesses
and storms.
24. (A) Aerosols are solid and liquid particles, as
well as some gases, that are suspended in
the atmosphere. There are several sources
of aerosols, including both human-made
and natural sources. Human-made sources
include factories, power plants, vehicles,
and construction sites. Natural sources
of aerosols include forest fires, volcanic
erruptions, and dust storms.
(B) Industrial processes contribute to aerosol
emissions through various mechanisms.
For example, factories and power plants
release pollutants into the air during the
burning of fossil fuels, such as coal and
oil. Additionally, construction sites and
other sources of dust can contribute to
aerosol emissions through the release of
particulate matter into the air. Overall,
industrial processes are a significant
contributor to aerosol emissions and air
pollution.
 13 COMPARATIVE DEVELOPMENT EXPERIENCES
OF INDIA AND ITS NEIGHBOURS
CASE BASED Questions (CBQ)
22. (A) The numerous elements listed below are
what contributed to China's economy
developing so quickly:
(1) Reforms in the investment,
international trade, and agriculture
sectors were started in the first
phase. The commune system, a
method of communal farming, was
put into place. Land was divided into
little plots under this arrangement,
and each household was given a
specific allotment. After paying
the government's taxes, these
households were permitted to keep
the leftover income from their land.
(2) The dual pricing scheme was put
into place. This suggests that a set
quantity of inputs and output were
bought and sold by farmers and
Comparative Development Experiences of India and Its Neighbours
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industrial units at a price set by the
government, with the remaining
quantities being traded at market
value.
(B) Pakistan has struggled with economic
instability and political unrest due
to factors such as corruption, weak
institutions, and military rule.
23. (A)
The Belt and Road Initiative is a massive
infrastructure development project
aimed at connecting China to markets
across Asia, Europe, and Africa via land
and maritime networks with the aim of
improving regional integration, increasing
trade and stimulating economic growth.
(B) Some of the challenges in the China-
Pakistan relationship include concerns
about debt traps and mistreatment of
Pakistani workers on Chinese construction
projects.
13