June, 2014

© S.C.E.R.T., Delhi

Chief Advisor : Ms. Anita Satia, Director, SCERT

Guidance : Dr. Pratibha Sharma, Joint Director, SCERT

Co-ordinator/Editor : Dr. Seema Srivastava, Sr. Lecturer, DIET, Moti Bagh, New Delhi

Associated Faculty Ms. Raman Arora, Lecturer , SCERT, New Delhi

Contributors : Dr. Kartar Singh, Astt. Professor, Jamia Millia Islamia

Mr. M.V. Srinivasan, Astt. Professor, NCERT

Ms. Ashita Ravindran, Astt. Professor, NCERT

Ms. Rekha Sharma, Former Principal Bhatiya Vidya Bhawan

Mr. Sanjeev Kumar, Vice Principal, SBV Brahmpuri

Ms. Mythili Bector, Vice Principal, NSKV Begumpur

Ms. Abha Bhatnagar, Vice Principal, GSKV Kalkaji No 2

Ms. Reema Agarwal, Lecturer (Economics) GGSSS, DDA Flat Kalkaji

Mr. Mandeep Kumar Dagar, Lecturer (Economics) RPVV, Vasant Kunj

Ms. Aarti Goyal, Lecturer (Economics) RPVV Lajpat Nagar

Mr. Shiv Kumar, Lecturer (Economics) D. C Arya School

Ms. Anupama Singh, GGSSS, Sarojini Nagar

Ms. Raman, Lecturer, SCERT

Dr. Seema Srivastava, Sr. Lecturer, DIET Moti Bagh

Publication Incharge : Ms. Sapna Yadav

Publication Team : Navin Kumar

Radha Prasad

Jai Bhagwan

Printed at M/s Graphic Printers, New Delhi-110005

ii

Preface

Youth is the most important component of any Economy. Today’s youth are tomorrow’s

leaders. If the youth is imparted the right kind of education to understand India’s

Economy and the Economy world over, they can play greater role in future. No nation or

organisation can survive in the current world scenario without Economics. Economics

affects our day-to–day life. The subject is dynamic and requires a skilful handling by

teachers keeping in tune with changing economic scenario. SCERT organises Capacity

Building /Orientation of teachers on the changes in syllabus, evaluation strategies

brought in by NCERT and CBSE from time to time and hard spots identified in the

subject every year and provides reading material based on the same.

In the changing scenario teachers have to really plan their methodologies in the light of

NCF’2005 which strongly emphasises on construction of knowledge by the child

himself/herself and has to think beyond the traditional confines of classroom. Relating

the textbook knowledge to the world of work is the true spirit which can be transmitted

by the teacher.

The present Manual has been developed focussing on implementing the changes in the

Economics Curriculum at Sr. Secondary stage of education and covers the important

areas, which the teachers should address for improving the performance of the

students. The content is strictly in accordance with the curriculum prescribed by the

NCERT. The Manual also provides the teachers to explore, discuss question etc. to

makes the teaching-learning process more effective. It includes reading material on

Project Work in Economics in class XI, OTBA, MCQs and hard spots etc. in practical

and interesting manner. The Manual also includes material on recently introduced

OTBA and MCQs by CBSE for evaluating the learning. Evaluation and test items used

on different domains are also covered. Teachers should feel free to use this manual as

reference material during the classroom teaching-learning processes.

I would like to congratulate the Co-ordinator, Dr. Seema Srivastava, Sr. Lecturer, DIET,

Moti Bagh and the team of Contributors for brining this Manual in present form. I hope

this Manual will prove helpful to the teachers in planning and transacting the curriculum

in the classroom effectively.

Dr. Pratibha Sharma Joint Director, SCERT

i

Foreword

Teachers play an important role in implementing all new changes taking places in the

curriculum and also the new technologies in the field of education. The examination

pattern and evaluation strategies have also changed. It has rather become more

objective. Inclusion of projects, VBA, OTBA and MCQs etc .in different subjects by

CBSE at Secondary and Sr. Secondary stage make the syllabus interactive and

interesting but at the same time it needs a different approach and teaching

methodology. SCERT and DIET’s have been providing IN-Service training in orienting

the teachers in implementing the same effectively in teaching –learning processes.

SCERT has been uploading the support material on its website (www.scertdelhi.nic.in)

in different subjects including Economics since 2011 to make it accessible to all

teachers. NCERT and CBSE have brought in the desirable changes in the textbooks

and examination pattern to connect the text with real world of work in true sense. NCF

2005 also strongly emphasizes on the departure from rote learning to child cantered-

processes which is the core of constructive approach. The support material developed

by SCERT is an initiative in this direction for capacity building of teachers.

SCERT organises training programme for capacity building of teachers by meeting their

identified training-needs. Teachers have to be oriented about the new changes in the

syllabus and evaluation pattern introduced by CBSE in different subjects at Sr.

Secondary level. Increase in weight age of project work in class XI, MCQs and inclusion

of value-based questions in economics are thought provoking and requires orientation

on framing of such questions and its evaluation. The module incorporates these

changes and also reading material on identified hard spots in the subjects.

I appreciate the co-ordinators and team of contributors who have brought this Manual in

the present shape. We extend our deep sense of reverence and gratitude to all

concerned authorities; DOE, NCERT and CBSE for extending all academic support for

incorporating required content in the manual for training of Lecturer in Economics. We

look forward for your continued supports and academic associations for quality

education and capacity building of teachers.

Your comments and suggestions are welcome on the Manual.

Ms. Anita Satia

Director, SCERT

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Editorial....

Economics as a discipline is introduced at the Senior Secondary Stage in the form of an

elective subject. At the Secondary stage of school education, the study of Economics,

as a component of Social Science, has been dealt with in a general manner avoiding

the rigour of economic theory. But at the senior secondary stage, the students are in a

position to comprehend and appreciate the basic concepts and theories of economics.

The course designed thus intends to provide them an opportunity to acquaint and

familiarise themselves with the recent developments in the discipline as well as the

functioning of various economic, financial and other institutions.

Economics is a social science which studies the way the society chooses to use its

limited resources to produce goods and services and distributes them among people. It

is a science that analyses the choice making economic behaviour. The roles of an

Economics teacher is crucial in transacting the curriculum in the same spirit and prepare

their students in understanding the subject better and perform well in Boards. The

syllabus is so structured as to help the students to use computers wherever possible,

for analysis of data, preparation and presentation of project report. Teachers must

encourage, guide and facilitate the use of ICT in the subject to be competitive. They

themselves should use newspaper clippings, magazines, and other sources as teaching

aids and prepare students to relate the contents of text to the world of work. Economy is

constantly changing and responding to changes at domestic and at global level.

Teachers have to update themselves continuously for preparing students for globally

competitive challenges.

Keeping in view the above the present Manual contains some reading material on

selected topics .Techniques and some tips to prepare recently introduced MCQs along

with MCQs on some topics as exemplar, OTBA, Project Work in Economics etc. The

important point here is that as the syllabus is pragmatic and recent inclusions in

evaluation requires teachers to prepare their students accordingly. The teaching of

Economics makes the rich/ privileged realize that he is duly bound to support the poor,

as poverty anywhere is a threat to prosperity everywhere. The idea of living happily ever

after cannot be imagined in the absence of the maxim of living. As living to work is

more important than working to live. He has to maximize not his/her own welfare but

public/social welfare so that he becomes on integral part of that whole whose welfare

has been taken care off. The achievements of different people are mutually

interdependent in today’s world.

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The VBA in different subjects by CBSE is an attempt to make students socially

responsible to identify and appreciate value–laden component. The Manual contains

some useful literature on the same. The most important aspect is how you, as teacher

discuss and debate different questions and situations to make students think out of

box. The way students have to be prepared to comprehend, identify the value in the

question/prepare answer precisely in boards is actually required on the part of the

teachers. Preparing students for these issues and concerns are vital as they will be job

seekers in future. We as teachers have to prepare them for the real world of trade and

economy. Linking school education with the real world is the need of the hour and also

a challenge for Curriculum Planners and Educationists.

I take this opportunity to express a deep sense of reverence and gratitude to Ms. Anita

Satia, Director, SCERT and Dr. Pratibha Sharma, Joint Director, SCERT for their

continuous support and encouragement. I owe special thanks to Dr. Dushyant Kaur,

Principal DIET Moti Bagh and all my colleagues; Academic and administrative staff for

facilitating and extending unconditional support at all stages of completing this

assignment. Special thanks are extended to the team of contributors, Subject Experts,

their concerned authorities, Principals and Teachers of Government Schools,

Aided/Public Schools for providing valuable suggestions and support at all stages of

development of this Manual.

The observations, suggestions and comments related to the Manual are welcome.

Dr. Seema Srivastava

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CONTENTS

S. No. TOPIC Page No.

1. Syllabus (Year 2014-15) CBSE Curriculum 1-7

2. Noticeable Changes in Syllabus of Economics - Class XII 8-9

3. Blooms' Taxonomy - Blue Print 10-18

4. CBSE Guidelines 19-20

5. Utility of Studying Economics 21-22

6. Studying Economics Over the Years – Some Important Tips 23-26

7. Contribution By Great Economists of the World 27-35

8. Project Work in Economics 36-39

9. Statistics for Making Projects in Economics 40-56

10. Value - Education for Values in Schools - A Framework by NCERT 57-64

11. Application of Mathematics in Economics – Exemplar Problems 65-69

12. Mathematical Application in Economics 70-72

13. Framing MCQs and the Exemplar on the same 73-80

14. Micro Economics –Exemplar MCQs 81-85

15. Relationship between Aggregates of National Income

and Exemplar MCQS 86-88

16. Determination of Income & Employment & MCQs on the same as Exemplar 89-102

17. Gaming Macroeconomics: Learning Saving and Consumption Concepts through Game 103-109

18. Key to Budget Documents – Budget 2014-15 110-115

19. Government Budget and the Economy 116-119

20. Money & Banking 120-122

21. Use of Worksheets - Application of Principles of Economics in Day to Day life - Use of different sources Newspaper clips, Magazine, Journal etc. (including net surfing & Media) 123-126

22. FAQs in Economics 127-132

23. Present Scenario of Indian Economy 133-135

24. Critical Appraisal of Syllabus of Economics at Sr. Secondary Level 136-137

Appendix

1. * CBSE Circular related to recent changes in Class XI Syllabus 141-143

2. XII - CBSE Question Paper 144-163

3. Practice Paper (Based on Board Pattern) 164-187

4. Feedback on OTBA - proforma uploaded on CBSE site vide notification Ref : Circular No. Acad.-04/2014 188-190

5. Lecture Write-up 191-202

ECONOMICS (CODE NO. 030)

Rationale

Economics is one of the social sciences, which has great influence on every human being. As economic life andthe economy go through changes, the need to ground education in children's own experience becomes essential.While doing so, it is imperative to provide them opportunities to acquire analytical skills to observe andunderstand the economic realities.

At senior secondary stage, the learners are in a position to understand abstract ideas, exercise the power ofthinking and to develop their own perception. It is at this stage, the learners are exposed to the rigour of thediscipline of economics in a systematic way.

The economics courses are introduced in such a way that in the initial stage, the learners are introduced to theeconomic realities that the nation is facing today along with some basic statistical tools to understand thesebroader economic realities. In the later stage, the learners are introduced to economics as a theory of abstraction.

The economics courses also contain many projects and activities. These will provide opportunities for thelearners to explore various economic issues both from their day-to-day life and also from issues, which arebroader and invisible in nature. The academic skills that they learn in these courses would help to develop theprojects and activities. The syllabus is also expected to provide opportunities to use information andcommunication technologies to facilitate their learning process.

Objectives:

1. Understanding of some basic economic concepts and development of economic reasoning which thelearners can apply in their day-to-day life as citizens, workers and consumers.

2. Realisation of learners' role in nation building and sensitivity to the economic issues that the nation is facingtoday.

3. Equipment with basic tools of economics and statistics to analyse economic issues. This is pertinent for eventhose who may not pursue this course beyond senior secondary stage.

4. Development of understanding that there can be more than one view on any economic issue and necessary skillsto argue logically with reasoning.

1

CLASS - XI (2013-14)

Paper 1 3 Hours

90 Marks

Units Periods Marks

Part A: Statistics for Economics

1. Introduction 7 15

2. Collection, Organisation and Presentation of Data 27

3. Statistical Tools and Interpretation 66 30

100 45

Part B: Indian Economic Development

4. Development Experience (1947-90) 18 8

and Economic Reforms since 1991 16 10

5. Current Challenges facing Indian Economy 60 20

6. Development experience of India-A comparison with neighbours 14 7

108 45

Part C: Project Work 12 10

Note: The question paper will include a Section on Open Case studies based-questions on two case studies,each from Part A and Part B of 8 marks, a total of 16 marks. The case studies will be supplied tostudents in advance. These case studies are designed to test the analytical and higher order thinking

skills of students.

Part A: Statistics for Economics

In this course, the learners are expected to acquire skills in collection, organisation and presentation ofquantitative and qualitative information pertaining to various simple economic aspects systematically.It also intends to provide some basic statistical tools to analyse, and interpret any economic informationand draw appropriate inferences. In this process, the learners are also expected to understand thebehaviour of various economic data.

Unit 1: Introduction 07 Periods

What is Economics?

Meaning, scope and importance of statistics in Economics

Unit 2: Collection, Organisation and Presentation of data 27 Periods

Collection of data - sources of data - primary and secondary; how basic data is collected; methods ofcollecting data; some important sources of secondary data: Census of India and National SampleSurvey Organisation.

Organisation of Data: Meaning and types of variables; Frequency Distribution.

Presentation of Data: Tabular Presentation and Diagrammatic Presentation of Data: (i) Geometricforms (bar diagrams and pie diagrams), (ii) Frequency diagrams (histogram, polygon and ogive) and(iii) Arithmetic line graphs (time series graph).

}

2

Unit 3: Statistical Tools and Interpretation 66 Periods

(For all the numerical problems and solutions, the appropriate economic interpretation may beattempted. This means, the students need to solve the problems and provide interpretation for theresults derived.)

Measures of Central Tendency- mean (simple and weighted), median and mode

Measures of Dispersion - absolute dispersion (range, quartile deviation, mean deviation and standarddeviation); relative dispersion (co-efficient of quartile-deviation, co-efficient of mean deviation, co-efficient of variation); Lorenz Curve: Meaning and its application.

Correlation - meaning, scatter diagram; Measures of correlation - Karl Pearson's method (two variablesungrouped data) Spearman's rank correlation.

Introduction to Index Numbers - meaning, types - wholesale price index, consumer price index andindex of industrial production, uses of index numbers; Inflation and index numbers.

Some Mathematical tools used in Economics: Equation of a line, slope of a line, slope of a curve.

Part B: Indian Economic Development

Unit 4: Development Experience (1947-90) and Economic Reforms since 1991:

18 Periods

A brief introduction of the state of Indian economy on the eve of independence.

Common goals of Five Year Plans.

Main features, problems and policies of agriculture (institutional aspects and new agricultural strategy,etc.), industry (industrial licensing, etc.) and foreign trade.

Economic Reforms since 1991: 16 Periods

Need and main features - liberalisation, globalisation and privatisation;

An appraisal of LPG policies

Unit 5: Current challenges facing Indian Economy: 60 Periods

Poverty- absolute and relative; Main programmes for poverty alleviation: A critical assessment;

Rural development: Key issues - credit and marketing - role of cooperatives; agricultural diversification;alternative farming - organic farming

Human Capital Formation: How people become resource; Role of human capital in economicdevelopment; Growth of Education Sector in India

Employment: Formal and informal, growth and other issues: Problems and policies.

Inflation: Problems and Policies

Infrastructure: Meaning and Types: Case Studies: Energy and Health: Problems and Policies- A criticalassessment;

Sustainable Economic Development: Meaning, Effects of Economic Development on Resources andEnvironment, including global warming.

3

Unit 6: Development Experience of India: 14 Periods

A comparison with neighbours

India and Pakistan

India and China

Issues: growth, population, sectoral development and other developmental indicators.

Part C: Developing Projects in Economics 12 Periods

The students may be encouraged to develop projects, which have primary data, secondary data orboth. Case studies of a few organisations / outlets may also be encouraged. Under this the students willdo one project each from Part A and Part B.

Some of the examples of the projects are as follows (they are not mandatory but suggestive):

(i) A report on demographic structure of your neighborhood.

(ii) Changing consumer awareness amongst households.

(iii) Dissemination of price information for growers and its impact on consumers.

(iv) Study of a cooperative institution: milk cooperatives, marketing cooperatives, etc.

(v) Case studies on public private partnership, outsourcing and outward Foreign Direct Investment.

(vi) Global warming.

(vii) Designing eco-friendly projects applicable in school such as paper and water recycle.

The idea behind introducing this unit is to enable the students to develop the ways and means by whicha project can be developed using the skills learned in the course. This includes all the steps involved indesigning a project starting from choosing a title, exploring the information relating to the title, collectionof primary and secondary data, analysing the data, presentation of the project and using variousstatistical tools and their interpretation and conclusion.

4

ECONOMICSCLASS - XII (2014-15)

Paper 1 100 Marks

3 Hours

Units Periods Marks

Part A: Introductory Microeconomics

1. Introduction 11 6

2. Consumer's Equilibrium and Demand 34 16

3. Producer Behaviour and Supply 34 16

4. Forms of Market and Price Determination under perfect competition with 31 12

simple applications

110 50

Part B: Introductory Macroeconomics

5. National Income and Related Aggregates 32 15

6. Money and Banking 18 8

7. Determination of Income and Employment 27 12

8. Government Budget and the Economy 17 8

9. Balance of Payments 16 7

110 50

Part A: Introductory Microeconomics

Unit 1: Introduction 11 Periods

Meaning of microeconomics and macroeconomics

What is an economy? Central problems of an economy : what, how and for whom to produce; conceptsof production possibility frontier and opportunity cost.

Unit 2: Consumer's Equilibrium and Demand 34 Periods

Consumer's equilibrium - meaning of utility, marginal utility, law of diminishing marginal utility,conditions of consumer's equilibrium using marginal utility analysis.

Indifference curve analysis of consumer's equilibrium-the consumer's budget (budget set and budgetline), preferences of the consumer (indifference curve, indifference map) and conditions of consumer'sequilibrium.

Demand, market demand, determinants of demand, demand schedule, demand curve, movementalong and shifts in the demand curve; price elasticity of demand - factors affecting price elasticity ofdemand; measurement of price elasticity of demand - (a) percentage-change method and (b) geometricmethod (linear demand curve); relationship between price elasticity of demand and total expenditure.

5

Unit 3: Producer Behaviour and Supply 34 Periods

Production function: Total Product, Average Product and Marginal Product.

Returns to a Factor.

Cost and Revenue: Short run costs - total cost, total fixed cost, total variable cost; Average fixed cost, averagevariable cost and marginal cost-meaning and their relationship.

Revenue - total, average and marginal revenue.

Producer's equilibrium-meaning and its conditions in terms of marginal revenue-marginal cost.

Supply, market supply, determinants of supply, supply schedule, supply curve, movements along and shifts insupply curve, price elasticity of supply; measurement of price elasticity of supply - (a) percentage-changemethod and (b) geometric method.

Unit 4: Forms of Market and Price Determination under Perfect Competition with simpleapplications. 31 Periods

Perfect competition - Features; Determination of market equilibrium and effects of shifts in demand andsupply.

Other Market Forms - monopoly, monopolistic competition, oligopoly - their meaning and features.

Simple Applications of tools of Demand and Supply: Price ceiling, price floor.

Part B: Introductory Macroeconomics

Unit 5: National Income and Related Aggregates 32 Periods

Some basic concepts: consumption goods, capital goods, final goods, intermediate goods; stocks and flows;gross investment and depreciation.

Circular flow of income; Methods of calculating National Income - Value Added or Product method,Expenditure method, Income method.

Aggregates related to National Income:

Gross National Product (GNP), Net National Product (NNP), Gross and Net Domestic Product (GDP andNDP) - at market price, at factor cost; National Disposable Income (gross and net), Private Income, PersonalIncome and Personal Disposable Income; Real and Nominal GDP.

GDP and Welfare

Unit 6: Money and Banking 18 Periods

Money - its meaning and functions.

Supply of money - Currency held by the public and net demand deposits held by commercial banks.

Money creation by the commercial banking system.

Central bank and its functions (example of the Reserve Bank of India): Bank of issue, Govt. Bank,Banker's Bank, Controller of Credit through CRR, SLR, Reverse Repo, Open Market Operations,Margin requirement.

6

Unit 7: Determination of Income and Employment 27 Periods

Aggregate demand and its components.

Propensity to consume and propensity to save (average and marginal).

Short-run equilibrium output; investment multiplier and its mechanism.

Meaning of full employment and involuntary unemployment.

Problems of excess demand and deficient demand; measures to correct them - change in government spending,availability of credit.

Unit 8: Government Budget and the Economy 17 Periods

Government budget - meaning, objectives and components.

Classification of receipts - revenue receipts and capital receipts; classification of expenditure - revenue expenditureand capital expenditure.

Measures of government deficit - revenue deficit, fiscal deficit, primary deficit their meaning.

Unit 9: Balance of Payments 16 Periods

Balance of payments account - meaning and components; balance of payments deficit-meaning.

Foreign exchange rate - meaning of fixed and flexible rates and managed floating.

Determination of exchange rate in a free market.

Prescribed Books:

1. Indian Economic Development, Class XI, NCERT

2. Introductory Micro Economics, Class XII, NCERT

3. Macro Economics, Class XII, NCERT

4. Supplementary Reading Material in Economics, Class XII, CBSE

Note: The above publications are also available in Hindi Medium.

7

* Please refer the CBSE Circular placed in Appendix 1 on Page 141-143 for

recent changes in the syllabus of Class XI - Economics.

8

NOTICEABLE CHANGES IN SYLLABUS OF ECONOMICS

CLASS-XII

1. Marks assigned to units of Micro Economics have been changed.

Unit-1: Introduction now carries 6 Marks instead of 4 Marks.

Unit-2: Consumers Equilibrium and Demand now carries 16 Marks instead of 18

Marks.

Unit-3: Producer Behaviour and Supply now carries 16 Marks instead of 18

Marks.

Unit-4: Forms of Market and Price Determination under Perfect Competition with

simple applications carries 12 Marks instead of 10 Marks.

* Accordingly, number of questions asked from these units will also be changed.

2. Term Production Possibility Frontier to be use instead of Production Possibility

Curve. Frontier means boundary. Production cannot go beyond the Production

Possibility Frontier with given resources and technology irrespective of employment

situation in the economy.

Definition of Production Possibility Frontier: Production possibility frontier is the

graph that indicates the various production possibilities of two commodities when

resources are fixed. The production of one commodity can only be increased by

sacrificing the production of the other commodity. It is also called the production

possibility curve or product transformation curve.

Description

The state of technology is taken to be constant. Since the production of one

commodity can be increased only by decreasing the production of the other

commodity, production possibility curve also measures the production efficiency of the

commodities. The production possibility frontier helps in deciding the commodities

most beneficial to society, but this response is limited in itself as there is a choice

between two commodities only.

3. In Unit-4 Simple Applications of Tools of Demand and Supply: Price Ceiling, Price

Floor has been included. It has become evaluative now whereas these were not to be

examined previously. Terms to be used now are Price Ceiling instead of Maximum

Price and Price Floor instead of Minimum Support Price.

Price Ceiling: A price ceiling occurs when the government puts a legal limit on how

high the price of a product can be. In order for a price ceiling to be effective, it must be

set below the natural market equilibrium. When a price ceiling is set, a shortage

occurs. For the price that the ceiling is set at, there is more demand than there is at the

9

equilibrium price. There is also less supply than there is at the equilibrium price, thus

there is more quantity demanded than quantity supplied.

Price Floor: A Price Floor is the lowest legal price a commodity can be sold at. Price

Floors are used by the government to prevent prices from being too low. The most

common Price Floor is the minimum wage--the minimum price that can be paid for

labour. Price Floors are also used often in agriculture to try to protect farmers. For a

Price Floor to be effective, it must be set above the equilibrium price. If it is not above

equilibrium, then the market will not sell below equilibrium and the Price Floor will be

irrelevant.

4. In Unit-6 Syllabus has clearly mentioned Central Bank and its Functions (example of

the Reserve Bank of India): Bank of issue, Government Bank, Banker's Bank,

Controller of Credit through CRR, SLR, Reverse Repo, Open Market Operations,

Marginal Requirement. Whereas, till 2014 it was not specific about Central Bank and

its Functions (example of the Reserve Bank of India).THERE IS NO NEED TO COVER

ALL THE FUNCTIONS NOW in elaborate details. Only one qualitative function is

given i.e. Marginal Requirement.

New Term Reverse Repo Rate has been used this time, which is

opposite of Bank Rate which you have been using till 2014.

Definition of Reverse Repo Rate

Reverse repo rate is the rate at which the central bank of a country (Reserve Bank of

India in case of India) borrows money from commercial banks within the country. It is a

monetary policy instrument which can be used to control the money supply in the

country.

Description: An increase in the reverse repo rate will decrease the money supply

and vice-versa, other things remaining constant. An increase in reverse repo rate

means that commercial banks will get more incentives to park their funds with the RBI,

thereby decreasing the supply of money in the market.

Repo Rate is also used as tool of credit control but it is not in

Syllabus.

Definition of Repo Rate

Repo Rate is the rate at which the central bank of a country (Reserve Bank of India in

case of India) lends money to commercial banks in the event of any shortfall of funds.

Repo Rate is used by monetary authorities to control inflation.

Description: In the event of inflation, central banks increase repo rate as this acts

as a disincentive for banks to borrow from the central bank. This ultimately reduces the

money supply in the economy and thus helps in arresting inflation.

5. In Unit-8 Syllabus includes Measures of Government Deficit - Revenue Deficit, Fiscal

Deficit, Primary Deficit, their meaning. Till 2014, in addition to these, Fiscal Policy and

its role (non evaluative topic) was also part of the syllabus.

10

BLOOMS TEXANOMY AS THE BASIS OF

EVALUATION IN CLASS XII – ECONOMICS

Background Information

In 1956, Benjamin Bloom with collaborators Max Englehart, Edward Furst, Walter

Hill, and David Krathwohl published a framework for categorizing educational goals:

Taxonomy of Educational Objectives. Familiarly known as Bloom’s Taxonomy, this

framework has been applied by generations of K-12 teachers and college instructors

in their teaching. The framework elaborated by Bloom and his collaborators

consisted of six major categories: Knowledge, Comprehension, Application,

Analysis, Synthesis, and Evaluation. The categories after Knowledge were

presented as “skills and abilities,” with the understanding that knowledge was the

necessary precondition for putting these skills and abilities into practice.

While each category contained sub categories, all lying along a continuum from

simple to complex and concrete to abstract, the taxonomy is popularly remembered

according to the six main categories.

The Original Taxonomy (1956)

Here are the authors’ brief explanations of these main categories in from the

appendix of Taxonomy of Educational Objectives (Handbook One, pp. 201-207):

• Knowledge “involves the recall of specifics and universals, the recall of

methods and processes, or the recall of a pattern, structure, or setting.”

• Comprehension “refers to a type of understanding or apprehension such that

the individual knows what is being communicated and can make use of the

material or idea being communicated without necessarily relating it to other

material or seeing its fullest implications.”

• Application refers to the “use of abstractions in particular and concrete

situations.”

• Analysis represents the “breakdown of a communication into its constituent

elements or parts such that the relative hierarchy of ideas is made clear and/or

the relations between ideas expressed are made explicit.”

• Synthesis involves the “putting together of elements and parts so as to form a

whole.”

• Evaluation engenders “judgments about the value of material and methods for

given purposes.”

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*The 1984 edition of Handbook One is available in the CFT Library in Calhoun 116.

See its ACORN record for call number and availability.

While many explanations of Bloom’s Taxonomy and examples of its applications are

readily available on the Internet, this guide to Bloom’s Taxonomy is particularly

useful because it contains links to dozens of other web sites.

Barbara Gross Davis, in the “Asking Questions” chapter of Tools for Teaching also

provides examples of questions corresponding to the six categories. This chapter is

not available in the online version of the book, but Tools for Teaching is available in

the CFT Library. See its ACORN record for call number and availability.

The Revised Taxonomy (2001)

A group of cognitive psychologists, curriculum theorists and instructional

researchers, and testing and assessment specialists published in 2001 a revision of

Bloom’s Taxonomy with the title A Taxonomy for Teaching, Learning, and

Assessment. This title draws attention away from the somewhat static notion of

“educational objectives” (in Bloom’s original title) and points to a more dynamic

conception of classification.

The authors of the revised taxonomy underscore this dynamism, using verbs and

gerunds to label their categories and subcategories (rather than the nouns of the

original taxonomy). These “action words” describe the cognitive processes by

which thinkers encounter and work with knowledge:

• Remember

• Recognizing

• Recalling

• Understand

• Interpreting

• Exemplifying

• Classifying

• Summarizing

• Inferring

• Comparing

• Explaining, Apply

• Executing

• Implementing, Analyze

• Differentiating

• Organizing

• Attributing

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• Evaluate

• Checking

• Critiquing Create

• Generating

• Planning

• Producing

In the revised taxonomy, knowledge is at the basis of these six cognitive processes,

but its authors created a separate taxonomy of the types of knowledge used in

cognition:

• Factual Knowledge

• Knowledge of terminology

• Knowledge of specific details and elements

• Conceptual Knowledge

• Knowledge of classifications and categories

• Knowledge of principles and generalizations

• Knowledge of theories, models, and structures

• Procedural Knowledge

• Knowledge of subject-specific skills and algorithms

• Knowledge of subject-specific techniques and methods

• Knowledge of criteria for determining when to use appropriate procedures •

Metacognitive Knowledge

• Strategic Knowledge

• Knowledge about cognitive tasks, including appropriate contextual and

conditional knowledge

• Self-knowledge

An Encyclopedia of Educational Technology guide to the revised version provides a

brief summary of the revised taxonomy and a helpful table of the six cognitive

processes and four types of knowledge.

Why Use Bloom’s Taxonomy?

The authors of the revised taxonomy suggest a multi-layered answer to this

question, to which the author of this teaching guide has added some clarifying

points:

1. Objectives (learning goals) are important to establish in a pedagogical

interchange so that teachers and students alike understand the purpose of that

interchange.

13

2. Teachers can benefit from using frameworks to organize objectives because.

3. Organizing objectives helps to clarify objectives for themselves and for

students.

4. Having an organized set of objectives helps teachers to:

• “plan and deliver appropriate instruction”;

• “design valid assessment tasks and strategies”;and

• “ensure that instruction and assessment are aligned with the objectives.”

BLOOM’S REVISED TAXONOMY AND QUESTIONS

STEMS

Cognitive

Domain

Learning

Map Area

Key Words Question Stems

Level-I

Remembering

Assessment

Prompts

Low Level

Choose, how,

match, recall,

select, spell,

when, who,

define, label,

name, relate,

show, tell,

where, why,

find, list, omit,

what, which

What is….?

Where is…?

How did___happen?

Why did….?

When did….?

How would you

show…?

Who were then

main…?

Which one….?

How is….?

When

did___happen?

How would you

explain…?

How would you

describe…?

Can you recall…?

Can you select…?

Can you list

three…?

Who was…..?

Level II-

Understanding

Classify,

explain,

interpret,

show,

compare,

extend, outline,

summarize,

contrast,

illustrate,

relate,

translate,

demonstrate,

infer, rephrase

How would you classify

the type of….?

How would you

compare/contrast…?

State or interpret____in

your own words…?

How will you rephrase

this meaning…?

What facts or ideas

show…?

What is the main idea

of…?

Which statements

support…?

Can you explain

what is

happening…? What

is meant...?

What can you say

about…?

Which is the best

answer….?

How would you

summarize…?

14

Level III-

Applying

Lesson

essential

Questions

Med. Level

Apply,

develop, make

use of, select,

build,

experiment

with, model,

solve, choose,

identify,

organize,

utilize,

construct,

interview, plan

How would you use…?

What examples can

you find to…?

How would you

slove…?

How would you

organize & show…?

Show your

understanding of…?

How would you apply

what you learned to

develop…?

What questions

would you ask in an

interview with…?

What other way

would you plan

to…?

What would result

if…?

Make use of these

facts to…?

What elements

would you choose

to change…?

What facts would

you select to

show…?

Level IV-

Analyzing

Analyze,

contrast,

function,

simplify,

assume,

discover,

inference,

survey,

categorize,

dissect,

inspect, take

part in,

classify,

distinguish, list,

test for,

compare,

divide, motive,

theme,

conclusion,

examine,

relationships

What are the parts of

features of…?

How is_____related

to…?

Why do you think…?

What is the theme…?

What motive is

there…?

Can you list the

parts…?

What inference can

you make…?

What conclusions can

you draw…?

How would you

classify…?

How would you

categorize…?

Can you identify the

parts…?

What evidence can

you find…?

What is the

relationship

between…?

Can you distinguish

between…?

What is the function

of…?

What ideas

justify…?

15

OPEN TEXT BASED ASSESSMENT (OTBA) Few Guidelines for Teachers

OTBA is based on Bloom’s Texonomy which has been explained in the table given

below. It will help you to frame questions based on the case study. The idea is that

the taxonomy has 6 levels which show the nature and type of questions. We will not

consider level I & 2 (Complete) and 3 to some extent. Questions shall be based

on level 3 to 6.

To cater to the varied abilities of individual learners, multiple modes of

assessment need to be provided. Therefore, the Central Board of Secondary

Education has introduced Open Text-Based Assessment (OTBA) for Class XI.

In class XI, three subjects, viz. Economics, Geography and Biology have been

included. These are meant to enhance analytical and theoretical skills, HOTS

(Higher Order Thinking Skills) and reasoning, thus moving away from rote learning.

OTBA have been designed to promote active participation of students in the

teaching-learning process through discussion, analysis, self-reflection and

critical thinking. The main objective of introducing the OTBA is to provide

opportunities to students to apply theoretical concepts to a real-life scenario by

brainstorming or participating in group learning in the class. The test will also help in

relieving the students of the burden of cramming of content and providing

opportunities for acquiring skills of information processing, comprehension, analysis,

and inference.

The Open Text-Based Assessment has subjective, creative and open-ended

questions of higher order thinking skills. To answer these, students will be

motivated to

• understand the concepts;

• analyse the situation from a different perspective;

• suggest a solution to the problem; and

• provide innovative suggestions.

Preparation for OTBA

Text/case studies supplied to schools should be thoroughly read, discussed and

analysed by the teachers. There should be brainstorming session working on the

following:

(a) Objectives of the text material/case study;

(b) Concepts involved;

(c) Application of concepts to situations;

(d) Description and further explanation of the case/problem;

16

(e) Higher Order Thinking Skills involved;

(f) Analysis with different perspectives,-

(g) Assessment techniques;

(h) The case studies with leading questions should then be assigned to students in

groups who would discuss at their level; and

(i) The teacher should guide them with further leading questions.

Bloom’s Revised Taxonomy and Question Stems from Level III to VI would

definitely help learners have the in-depth understanding of the text.

Cognitive

Domain

Key Words Question Stems

Level III-

Applying

Apply, develop, make use

of …etc.

How would you use…?

What examples can you find to…?

What other way would you plan to…?

Level IV-

Analysing

Analyse, contrast,

function, …etc.

What are the parts of features of …?

How would you categorise…?

What ideas justify…?

Level V-

Evaluating

Agree, deduct, interpret,

…etc.

Do you agree with the actions…?

What is you opinion of….?

How would you compare the ideas…?

People…?

Level VI-

Creating

Adapt, delete, improve,

deduct, …etc.

What changes would you make to

solve…?

Can you predict the outcome if…?

What facts can you compile…?

Can you think of an original way for

the…?

In view of this, students should understand objectives of text material (i.e. Case

study). Search the concept involved.

(ii) While answering the questions, students shall have to give their personal or

open-ended response. Response of this sort will justify a point of view, an

inference they have made. It will assess their faculty to forward logic duly

supported by scientific facts. Thus, their growing capacity to control

eventualities and arrive at the best judgment with due application of reason or

knowledge can be assessed.

17

In brief, apply the concepts to the given situation, explain and describe the

problem. Then analyse the problem inherent in various angles and generalise

the same to arrive at the best solution.

(iii) Students shall have to deduce, draw inference, extract and arrive at conclusions

from the articles, report or case studies given or supplied at the time of

examination. They are all open to apply their discretion, power of constructive

imagination, dimension of their thinking power beyond text and estimate beyond

the original observation.

(iv) Note that CBSE demands these questions to be framed extrapolative. The term

extrapolative refers to estimating beyond things as they are and giving value to

a variable on the basis of its relationship with another variable to express what

they can be made in their considered form. It is similar to interpolation, which

produces estimates between the known observations. It also means extension

of a method under assumption that similar methods will be applicable but with a

new paradigm. It also applies to human experience to project, extend or expand

known experience into an area not known or previously experienced so as to

arrive at a (usually conjectural) knowledge of the unknown.

(v) Students do not need to cram anyway but acquire understanding in depth with

all contents of the textual material supplied by the CBSE. Students should equip

themselves with detailed information on topics in the textual material and

assess time and again if they are able to apply the available information from

the textual material to a given situation in questions. This is the only preparation

method for getting through the OTBA.

Note that applying material to new situations, analysing elements and

relationships, synthesizing or structuring and using material as evidence,

i.e. evaluating are the key requirements of OTBA.

Suggestions for OTBA Preparation

(i) Recollect the whole study on the respective subject(s) chapter and para -wise,

put an eagle eye on the concepts involved because CBSE proposes the textual

material holding one or another concept and sometimes many simultaneously.

Thorough study and churning in depth is therefore, the only key to get through

the OTBA.

(ii) Apart from textbooks, keep an eye on current developments in society, science,

politics, etc. for added advantage.

(iii) Carry on making brief, concise notes on ideas and concepts even when you are

reading material beyond textbooks and watching serials on the TV.

(iv) Comment on the things you observe, evaluate and discuss them. This will

reinforce the manner of arguing, analysis and concept-making.

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(v) Understand in depth the format, layout and structure of ideals) that your

predecessors have formed and consider what new thing can be extracted from

them. Also, develop writing skills in these parameters.

(vi) Develop the habit of collecting data, facts, their implications and applications at

right time and context.

(vii) Always try to summarise issues/topics transacted in meetings, gatherings,

seminars, etc. and cultivate a habit of writing such split impressions in the form

of fomulae in a notebook. Put weekly observations, experiences with people

and things for introspection and quote the cream object you find for improving

better than before.

Don’t be rigid in your approach while discussing topics in groups, at home, at

school and at market or field.

The student is advised to avoid

(i) Replicating the exact words from the textbooks.

(ii) Undue expansion of the topic.

SOME OBSERVATIONS BY PRACTITIONERS ON OTBA BY CBSE

In the Context of Economics Class – XI

The OTBA which was recently introduced by CBSE in the different schools of Delhi

in the month of March’ 2014 in different school subjects at Class XI was provided

with the OTBA material to be administered on students. However the Feedback

Assessment Proforma by CBSE (See Appendix - 4 of the Manual) was uploaded

on its site, some common observations can be summed up as under:

1. Teachers & students feel that OTBA served as another chapter/component of

Assessment, hence the real purpose of OTBA of relating the concept of text to

the world of work/practical has not been completely achieved, but it may be

better in next attempt.

2. Teachers feel more orientation is required on the theoretical rationale, its

application, administration and assessment including the basic objectives of its

inclusion in the assessment. Teachers should have been given a proper

guideline at least by uploading guidelines about framing questions and its

selection of appropriate text for better implementation of the same.

3. In most of the Government schools, students first treated it as an unseen

passage/comprehension as generally applied in language teaching. Adequate

orientation on the part of teachers and students both required time.

Though the initiative by CBSE on OTBA is appreciated by most of the teachers

and they expressed it will get better with practice and time.

Note: The question paper will include a section on Open Case Studies based-questions on two case studies,each from Part A and Part B of 8 marks, a total of 16 marks. The case studies will be supplied tostudents in advance. These case studies are designed to test the analytical and higher order thinkingskills of students.

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20

21

UTILITY OF ECONOMICS/WHY ECONOMICS?

Economics is one of the social sciences which has great impact on every human

being. It is the social science that analyses the production, distribution and

consumption of goods and services. It focuses on how economic agents behave or

interact and how do the economies work.

Economic analysis may be applied throughout the society as in business, finance,

healthcare and Government but also to diverse subjects like education, the family,

the politics, science....etc. At the turn of the 21st century, the expanding domain of

economics in social sciences has been described as “Economic Imperialism”.

How do you relate Economics to your everyday life?

Our resources being limited and wants unlimited, we have to prioritize the wants to

be satisfied, allocate the scarce resources available and use then in the most

efficient way—(with optimal utilization and minimal waste).

With our income being limited we make economic choices, by opting for satisfying

our those wants which give us maximum utility.

Economics is also about your income itself. The level of your income depends

upon the overall status of the economy.

• If we have recession, then the income for most will be less.

• If we have growth, then the income will rise as with growth more jobs would be

there. On the contrary recession leads to unemployment.

Economics is about “freedom”, as well. In an economy you are free to do what you

want, free to buy what you want, at the quantity you want, provided you have the

means.

Economics has some application to the real life, by way of the famous economic law

called ‘Law of Diminishing Marginal Utility’ and the ‘Demonstration Effect’

based on ‘Owners Pride and Neighbour’s Envy’. We already know what money is

all about. We simply need to use it productively and this is what science of

economics teaches us.

When persons check their bank balance to see how much they can spend, go

shopping to spend it, and go to work the next day to earn more, they are ‘keen

participants’. In Applied Economics just use commonsense, do not spend more

than you earn, find something useful to do with the money left after the monthly

expenditure has been met with.

22

Be aware of the external effects of your actions of the others at home, on the

streets, in school, offices and the society at large. Remember the negative

externalities like adding to pollution created decrease in the welfare of one

and all.

Understand that the Government/Central Bank is only a paper tiger in dealing with

external shocks like recession and depression. Always remember Government can

cause inflation but cannot really bring it down, except to a very limited extent. Do not

rely on the Government to solve all economic problems. Awake! anticipate macro-

economic environment like growth, inflation, and scarcity of materials in the market,

unemployment etc. and take appropriate actions to minimize any adverse effects of

changing economic environment on you, your family and the society at large. Apply

the concept of ‘opportunity cost’, when you wish to make a change.

Using interest rates as a bench mark for discounting the value of your income is

another important aspect.

The real value of your salary may depend upon the current interest rates.

Thus all our lives, we should involve the Principles of Economics and their

application on a daily basis. Economics exhorts us to be aware consumers, prudent

producers, enterprising entrepreneurs and above all responsible citizens, in respect

of safeguarding public property and common goods like Roads, Parks, and Street

Lights etc.

23

STUDYING THE ECONOMICS OVER THE YEAR-

SOME IMPORTANT TIPS

Abstract Teaching of Economics is interesting and meaningful when it is taught in the

classroom relating it to day-to day examples and engage children constructively

to explore, discuss and raise queries. It is a dynamic subject which constantly

responds to various changes at domestic and global scenario. How rupee

volatility affects your budget, why falling rupee is good for investors, how The

value of a country's currency is linked with its economic conditions and policies,

how are prices of goods and commodities determined..etc are certain questions

that are of interest to a common man. In the present section you will find out how

this subject should be dealt with along with some tips to score better at the time

of examination. These are not exhaustive. You may build up an understanding as

to how this subject requires a teacher to be creative, innovative and at the same

time he/she has to keep himself or herself updated. In recent times when there is

knowledge explosion you have to guide children as to how to access information

of relevance and put to use.

TIPS FOR STUDENTS OF ECONOMICS

1. Positive attitude towards Economics. A positive attitude while studying Economics

will make you start liking the subject that you were really not fond of before. You will

understand the concepts easily and get good marks, when you are not afraid of it.

2. Attend your classes regularly. Attend classes regularly instead of skipping them,

you won't miss important topics. Be an active learner and participate whenever

possible. You will remember or learn more if you are in class when the teacher is

teaching than if you skipped class and then take notes later on.

3. Set goals for yourself. Set goals for yourself and then try your hardest to achieve

those goals. Start with small goals like will do five numerical on Elasticity of Demand

correctly. If you fail once, don't give up, keep trying. Achieving the small goals will make

boost your confidence and make your habit of achieving the goals you set.

4. Do your homework daily. Do your homework on the same day, don't leave it for

next day. Homework is important because it gives you practice on the subject that you

are learning, identify the topic you are not clear and provide a precise learning material

for revision.

5. Ask for help when you need it. Ask a question whenever you have doubts on any

topic, don't just leave it behind. That's what teachers are there for after all. As soon as

you spot something that confuses you, even if you're just a little unclear, go and ask the

24

teacher to help you. Every teacher always appreciates the interactive student. It will

most definitely help you in tests and scoring marks.

6. Time Management. Good time management will help you in reducing anxiety and

increase your focus on studying. Never make it practice to study at the last minute and

cram the night before. Study 1 or 2 hours daily and leave a half hour for homework.

Study before you do homework, it will help you do your homework faster and help you

understand the subject better.

7. Do revision regularly. Revise what you have learned on same day. Do not leave the

revision for examination days. Revise the complete unit when done in the class, it will

help you in correlating the concepts. Its proven now, if you revise within 36 hours than

you can retain it more for longer period.

8. Develop examination skills. This will increase your confidence when taking exams.

Awareness about typical exam format, common errors to avoid, and the concepts in a

subject area usually tested will help you score more. Do remember the value points,

technical terms and keywords that required in the answers.

9. Make notes. Always make notes of important concepts, formulas and diagrams in

economics; It will help you in revision and save your time.

10. Understand more. Always understand the topic, don't just remember it. Curiosity is

the best teacher! Make your own style of understanding things, making best use of day

to day scenarios. After finishing a chapter, you can explain the same to your friends. It's

a nice way of learning things, and it's quite more interesting. Get involved in group

discussions about the chapter you are confused about.

Before and during Exams

1. Good Time Table. Before starting with the revision studies, students should design

their own time-table keeping in mind the material to be covered and how much is

needed to be studied each day. A schedule of every subject should be made with

different priorities. Tough subjects should be given more hours, and easier ones should

be given less hours with sufficient intervals between each subject. The timetable should

very importantly have breaks in between for relaxing and entertainment. Do not leave

any subject for more than 2-3 days. Every subject should be taken up for study at least

in every alternate day.

2. Loose that Fear. Fear and stress are the major factors which tend to become an

obstacle in getting high percentage. One should loose all the fear and free his mind.

Approximating a certain score to achieve is beyond our control. This fact also needs to

be understood by parents, who should not pressurize their children but rather boost up

their confidence.

3. Don't Cram, Make Notes Students should not use the cramming as it is not a good

method of studying. Instead of this, they should make short notes while studying.

Cramming everything can result in forgetting everything and making brief notes can help

in remembering all points while revising the subject.

25

4. Place to Study. I agree that students of govt schools does not have separate place

to study but you can find a place where you feel comfortable, relaxed and where you

can concentrate properly. If you can, study at a place where you find a quiet ambience.

5. Trust God and Yourself. Students should meditate or pray well before the exam as

it helps in relaxing their mind and also provides immense energy and peace to the mind.

And it is much important that you are confident about yourself of producing splendid

result.

6. Sleep and Eat Well. The biggest mistake students commit during exam time is that

they don't sleep and eat well. They think sleeping is a waste of time. They should

believe in the fact that they need to sleep between 6-8 hours a day. They also need to

take care of their diet. They should try and avoid eat junk food, eat at regular intervals

and include food which supplies continuous energy to their brain for a longer period of

time.

7. Time to Study. Time is possibly the most important factor. According to a research

conducted, human brain is in its most active state between 5 am to 8 am in the morning

and in the evening between 7 pm to 11 pm. Therefore, students who study during these

timings have the maximum retention power in comparison with others. Don't study after

11pm as it will exhaust you more and will affect your study next day.

8. Examination practice. Be in touch with latest syllabus, CBSE previous years

papers, sample papers etc. Keep on looking what has been the pattern of CBSE and

what type of questions are generally asked. Also refer to their model answers.

Whenever you give a test in school and obtain marks, just go through your answer

sheet seriously and see where marks have been deducted and how can the errors be

avoided next time. Be in contact with your teachers and ask them to evaluate yourself

even during the gap between board exams. Do at least 8-10 model test papers of

economics. This will help a lot.

Important tips for Attempting the Economics Paper

1. Plan and prioritise your answers. Read the question paper carefully and

thoroughly. Utilise the 15-minute reading time properly. Students should give attention

to question words i.e. What. How and why so that they can organise their thoughts and

manage their time well through the exam. Tick mark the questions and answer those

questions first which you can answer efficiently. It puts a good impression on the

examiner. Keep your answers tidy and well formatted. Beware of common terms used in

Micro and Macro Economics you may mix-up the answer.

2. Time management is very important to score good marks in the board exam.

Otherwise, you will find yourself struggling to complete the paper that might create

anxiety and panic towards the last few minutes of the exam. While writing the paper,

students should stick to the word limit and time limit they allocate for attempting

questions of different weightage. Plan in advance how much time you will dedicate to

each question and category and stick to it. If you realise are struggle for too long, move

26

on to the next question, and return to answer if you have the time. You will get 1.5

minutes to attempt one mark.

3. The content of the answer should be relevant to the questions and depending upon

word limit, must follow a hierarchy of relevance, from the most important to the least.

Often long, essay type questions are answered without properly planning the order in

which various points are to be covered. Do remember the suggestions given by your

teachers during internal examinations about the marking scheme for checking and

analysing their answer sheet. If the students regularly analyse the content of their

answers by keeping in mind the value points given in the marking scheme as well as

compare their answers with model answers, during the internal assessments, they will

be able to develop the skill of determining the hierarchy of relevance of content and will

able to score better marks in the Boards.

4. In numerical questions we find that students copy the data incorrectly from the

question paper, or from one step of the problem to the next. Also often they do not

convert the data into appropriate units. It results in loosing marks even when they know

the subject. Formula carries the marks so write it in starting of answer. Show your

calculation as direct answer never get the marks.

5. Diagrammatic Representation. Make diagrams when asked in question paper. You

will not get any marks for diagram when not asked and will waste your time during

exam. It should be neat and labeled. Diagrams are one of the good ways to fetch more

marks. Where possible, try to explain the answer by diagrams, tables, flow charts etc.

Also, try to explain your answers by giving suitable examples. It makes the examiner

feel that the student has good knowledge of the concepts

6. Write Neat and Present Well When students write neatly and present their answer

sheet in a proper way, they have more chances of securing high marks. Many times the

teacher is not able to read all the answers but if she gets impressed by the way it has

been presented then it would definitely lead to less deduction of marks.

7. Highlighting. Sequencing and highlighting of the question and answer number is

very important. You have to keep in mind the examiner's perspective. Try to provide as

much ease as you can, to the examiner going through your paper. It will please him. It

would do well for a student to present an examiner-friendly answer script with legible

and neat handwriting, sequential presentation of answers and their sub-parts,

underlining/ highlighting keywords and technical terms. Finally, re-checking the answer

scripts before submitting the same to the examiner.

8. Never Cheat in Exam Hall. Students should always be advised by their parents as

well their teachers as to not use any kind of malpractice in exam hall as it may prove to

be harmful for them and their future. If an answer is not known by them, they shouldn't

attempt it as they have to prove no one but themselves.

27

CONTRIBUTION BY GREAT ECONOMISTS OF THE WORLD

Abstract

The Students who take up Economics in Class XI, they already have basic

knowledge about Economics and Statistics. The Teacher must take initiative to

develop the interest in the subject by discussing as to how the study of

Economics is important not only at national level but globally as well. With the

advent of liberalization and globalization the world has become a global hut and

economies have become more open impacting each other. The present unit

discusses the major contributions by eminent economist of the world. Here the

emphasis would be on that these contributions are relevant even in the present

context. As Teacher, try to initiate the discussion and debate on various aspects

of contributions to create curiosity among the students. Summarizing,

concluding and channelizing the discussions of the students is vital on the part

of teacher.

Chanakya

Chanakya was born in 370BC and died in 283 BC. He

(Sanskrit: चाण�यः) was an Indian teacher, philosopher

and royal advisor. He was also known with some

other names i.e., Kauṭilya, Vishnugupta &Vishnu

Sharma.

Chanakya was educated at Takshashila, an ancient

center of learning located in north-western ancient India

(presently in Pakistan). He later became a teacher

(acharya) at the same place. Originally a teacher at the

ancient Takshashila University, Chanakya managed the

first Maurya emperor Chandragupta's rise to power at a young age. He is widely

credited for having played an important role in the establishment of the Maurya

Empire, which was the first empire in archaeologically recorded history to rule

most of the Indian subcontinent. Chanakya served as the chief advisor to both

Chandragupta and his son Bindusara.

Chanakya is traditionally identified as Kautilya or Vishnu Gupta, who authored the

ancient Indian political treatise called Arthaśāstra. As such, he is considered as

the pioneer of the field of economics and political science in India, and his work

is thought of as an important precursor to Classical Economics. Chanakya is

28

often called the "Indian Machiavelli", although his works predate Machiavelli's by

about 1,800 years. His works were lost near the end of the Gupta dynasty and not

rediscovered until 1915.

Chanakya continued to serve as an advisor to Chandragupta after the establishment of

the Maurya Empire. According to a popular legend mentioned in the Jain texts,

Chanakya used to add small doses of poison to the food eaten by Emperor

Chandragupta Maurya in order to make him immune to the poisoning attempts by the

enemies. Unaware, Chandragupta once fed some of his food to his queen, Durdhara,

who was seven days away from delivery. The queen, not immune to the poison,

collapsed and died within a few minutes. In order to save the heir to the throne,

Chanakya cut the queen's belly open and extracted the foetus just as she died. The

baby was named Bindusara, because he was touched by a drop (bindu) of blood having

poison.

There are two books that attributed to Chanakya: Arthashastra and Neetishastra

& also known as Chanakya Niti. The Arthashastra discusses monetary and fiscal

policies, welfare, international relations, and war strategies in detail. The text also

outlines the duties of a ruler. Some scholars believe that Arthashastra is actually

a compilation of a number of earlier texts written by various authors, and

Chanakya might have been one of these authors. Neetishastra is a treatise on the

ideal way of life, and shows Chanakya's deep study of the Indian way of life. Chanakya

also developed Neeti-Sutras (aphorisms - pithy sentences) that tell people how they

should behave. Of these well-known 455 sutras, about 216 refer to raja-neeti.

Apparently, Chanakya used these sutras to groom Chandragupta and other selected

disciples in the art of ruling a kingdom.

Chanakya is regarded as a great thinker and diplomat in India. Many Indian

nationalists regard him as one of the earliest people who envisaged the united India

spanning the entire subcontinent. The diplomatic enclave in New Delhi is named

Chanakyapuri in honour of Chanakya. Institutes named after him include Training Ship

Chanakya, Chanakya National Law University and Chanakya Institute of Public

Leadership.

Adam Smith

Adam Smith was born on 5 June 1723 & died on 17

July 1790. He was a Scottish social philosopher and a

pioneer of political economy. He is generally credited with

being the first true economists. One of the key figures of

the Scottish Enlightenment, Smith is the author of The

Principles Which Lead and Direct Philosophical Enquiries,

Illustrated by the History of Astronomy, prior to 1758, The

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Theory of Moral Sentiments, 1759, and An Inquiry into the Nature and Causes of the

Wealth of Nations, 1776. The latter, usually abbreviated as The Wealth of Nations, is

considered his magnum opus and the first modern work of economics. Smith is cited as

the father of modern economics and capitalism and is still among the most influential

thinkers in the field of economics today.

In 1759, Smith published his first work, The Theory of Moral Sentiments. He continued

making extensive revisions to the book, up until his death. Although The Wealth of

Nations is widely regarded as Smith's most influential work, it is believed that

Smith himself considered The Theory of Moral Sentiments to be a superior work.

The Theory of Moral Sentiments, Smith develops a theory of psychology in which

individuals seek the approval of the "impartial spectator" as a result of a natural desire

to have outside observers sympathise with them.

In his book “The Theory of Moral Sentiments”, Smith followed the views of his

mentor, Francis Hutcheson of the University of Glasgow, who divided moral

philosophy into four parts:

• Ethics and Virtue;

• Private rights and Natural liberty;

• Familial rights (called Economics); and

• State and Individual rights (called Politics).

More specifically, Smith divided moral systems into:

• Categories of the nature of morality. These included Propriety, Prudence, and

Benevolence.

• Categories of the motive of morality. These included Self-love, Reason, and Sentiment.

In his book ‘Wealth of Nations’ Adam Smith emphasis the idea of competitive market

economy &examined a large number of pressing economic issues of his days and tried

to develop economic tools for understanding them. Smiths most important insight was

his recognition that the system of market determined prices that he observed was not as

chaotic and undisciplined as most of the writers assumed.

According to Smith the prices that arose from the market system is providing a

powerful “invisible hand” that directed resources into activities where they would

be most valuable. Hence resources are worth and thereby help us to take

decisions about their uses. To Smith due to such ability of the resources to use them

efficiently, that provided the ultimate expansion for a National wealth. Adam Smith

placed great importance on the role of prices in deciding the use of the resources of the

Nation. Adam Smith provided a very simple explanation as the prices of the goods are

determined by what it costs to produce them.

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The Wealth of Nations was a precursor to the modern academic discipline of

economics. In this, Smith expounded how rational self-interest and competition can lead

to economic prosperity.

In light of the arguments put forward by Smith and other economic theorists in Britain,

academic belief in mercantilism began to decline in England in the late 18th century.

During the Industrial Revolution, Britain embraced free trade and Smith's laissez-faire

economics, and via the British Empire, used its power to spread a broadly liberal

economic model around the world, characterized by open markets, and relatively barrier

free domestic and international trade. Amartya Sen

Bharat Ratna Amartya Sen, born on 3

November 1933. He is an Indian economist

who was awarded the 1998Nobel

Memorial Prize in Economic Sciences for

his contributions to welfare economics

and social choice theory, and for his

interest in the problems of society's

poorest members. He is currently working at

Harvard University as Professor of

Economics and Philosophy. He also serves

as the first Chancellor of the proposed

Nalanda International University.

Amartya Sen is best known for his work

“the causes of famine”, which led to the

development of practical solutions for

preventing or limiting the effects of real or

perceived shortages of food. According to

him famine in Bengal occurs not only from a

lack of food, but from inequalities built into

mechanisms for distributing food. According

to him the Bengal famine was caused by an

urban economic boom that raised food prices, thereby causing millions of rural workers

to starve to death when their wages did not keep up.

His theoretical work on inequality provided an explanation for why there are fewer

women than men in India and China despite the fact that in the West and in poor but

medically unbiased countries, women have lower mortality rates at all ages, live longer,

and make a slight majority of the population. Sen claimed that this skewed ratio results

Amartya Sen

Official Portrait at the Nobel Prize

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from the better health treatment and childhood opportunities afforded boys in those

countries, as well as sex-specific abortion.

Amartya Sen not only contributed to the field of economics but also contributed

to the various social causes which affect the life of the people such as, ‘gender

equality’ The Idea of Justice "More Than 100 Million Women Are Missing"

analyzing the mortality impact of unequal rights between the genders in the

developing world, particularly Asia.”

Amartya has also been called "the Conscience and the Mother Teresa of Economics"

for his work on famine, human development theory, welfare economics, the underlying

mechanisms of poverty, gender inequality, and political liberalism. However, he denies

the comparison to Mother Teresa by saying that he has never tried to follow a lifestyle of

dedicated self-sacrifice.

In May 2007, he was appointed by the Government of India as chairman of Nalanda

Mentor Group to examine the framework of international cooperation, and proposed

structure of partnership, which would govern the establishment of Nalanda International

University Project as an international centre of education seeking to revive the ancient

center of higher learning which was present in India from the 5th century to 1197.

In June 2011, he was appointed as the adviser to the Mentor Group of Presidency

College by West Bengal Chief Minister Mamata Banerjee. Sen is a self-proclaimed

agnostic and holds that this can be associated with Hinduism as a political entity.

David Ricardo

David Ricardo (18 April 1772 – 11 September

1823) was an English political economist and stock

trader. He was often credited with systematising

economics, and was one of the most influential of

the classical economists, along with Thomas

Malthus, Adam Smith, and John Stuart Mill. He

was also a member of Parliament, businessman,

financier and speculator, who amassed a

considerable personal fortune. Perhaps his most

important contribution was the law of comparative

advantage, a fundamental argument in favour of

free trade among countries and of specialisation

among individuals. Ricardo argued that there is

mutual benefit from trade even if one party is more

productive in every possible area than its trading

counterpart as long as each concentrates on the

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activities where it has a relative productivity advantage.

Ricardo's most famous work is his Principles of Political Economy and Taxation (1817).

Ricardo opens the first chapter with a statement of the labour theory of value. Later in

this chapter, he demonstrates that prices do not correspond to this value. He retained

the theory, however, as an approximation. The labour theory of value states that the

relative price of two goods is determined by the ratio of the quantities of labour required

in their production

Ricardo is responsible for developing theories of rent, wages, and profits. He

defined rent as "the difference between the produce obtained by the employment

of two equal quantities of capital and labor." The model for this theory basically said

that while only one grade of land is being used for cultivation, rent will not exist, but

when multiple grades of land are being utilized, rent will be charged on the higher

grades and will increase with the ascension of the grade. As such, Ricardo believed that

the process of economic development, which increased land utilization and eventually

led to the cultivation of poorer land, benefited first and foremost the landowners

because they would receive the rent payments either in money or in product.

In a careful analysis of the effects of different forms of taxation, that a tax on land value,

equivalent to a tax on the land rent, was the only form of taxation that would not lead to

price increases; it is paid by the landlord, who is not able to pass it on to a tenant. He

stated that the poorest grade land in use has no (land) rent and so pays no land value

tax; as prices are determined at this marginal site for the whole economy, prices will not

be increased by a land value tax. His analysis distinguishes between rent of

(unimproved) land and rent associated with capital improvements such as buildings.

David Ricardo also contributed to the various fields of economics i.e., Ricardian

equivalence, labour theory of value, comparative advantage, law of diminishing returns,

Economic rent etc.

John Maynard Keynes

John Maynard Keynes, 1st Baron Keynes, (5 June 1883 –

21 April 1946) was a British economist whose ideas have

profoundly affected the theory and practice of modern

macroeconomics, and informed the economic policies of

governments. He refined earlier work on the causes of

business cycles, and advocated the use of fiscal and

monetary measures to mitigate the adverse effects of

economic recessions and depressions. Keynes is widely

considered to be one of the founders of modern

macroeconomics, and the most influential economist of the