Economy and Society MCQ Quiz - Objective Question with Answer for Economy and Society - Download Free PDF

The correct answer is C, A, D, B, E.

Key Points The correct order of the stages in addressing poverty is:

C. Recognizing the impact of poverty on society A. Identifying the causes of poverty D. Setting the poverty line B. Implementing government initiatives E. Evaluating the effectiveness of poverty alleviation programs

Explanation:

• The first step in addressing poverty is to recognize its impact on society. This includes understanding the different types of poverty, the factors that contribute to poverty, and the consequences of poverty for individuals and communities.
• Once the impact of poverty is understood, it is important to identify the causes of poverty. This can be a complex process, as there are many factors that contribute to poverty, including economic, social, and political factors.
• Once the causes of poverty have been identified, a poverty line can be set. This is the income level below which individuals or households are considered to be poor.
• Once the poverty line has been set, government initiatives can be implemented to address poverty. These initiatives can include a variety of programs and policies, such as cash transfers, food assistance, job training, and education programs.
• Finally, it is important to evaluate the effectiveness of poverty alleviation programs to ensure that they are having the desired impact. This can be done by tracking changes in poverty rates and the well-being of poor individuals and households.

The correct answer is 'Earning way less than others in community'

Key Points

• Relative Poverty:
  • Relative poverty refers to a condition where individuals or groups are poor in comparison to the larger population in which they live.
  • This form of poverty is not about lacking the basic necessities of life but rather about being significantly worse off than the average person in a particular society.
  • It emphasizes the inequality and social exclusion faced by those who earn substantially less than others in the community.

Additional Information

• Lack of access to housing entirely:
  • This is an example of absolute poverty, where individuals lack basic necessities such as shelter.
  • Absolute poverty is more concerned with survival needs and is measured against a fixed standard.
• Not having clean drinking water:
  • This is also an example of absolute poverty, where a fundamental human need is unmet.
  • It reflects a severe deprivation of basic resources necessary for health and well-being.
• Having chronic illness impacting wages:
  • This situation may contribute to poverty but is more related to health issues affecting one's ability to earn.
  • It does not specifically address the concept of relative poverty, which is based on income disparity within a community.

The correct answer is - Liberalization

Key Points

• Liberalization
  • Liberalization refers to the removal of restrictions and barriers imposed by the government on economic activities.
  • It aims to promote free-market policies and reduce government intervention in trade and industry.
  • Examples of liberalization include the reduction of tariffs, quotas, licensing restrictions, and other regulatory obstacles.
  • It encourages foreign investment and enhances global trade by making markets more accessible.
  • The process is part of broader economic reforms designed to improve efficiency and competitiveness in the economy.

Additional Information

• Investment
  • Refers to the allocation of resources, especially capital, to generate future returns or benefits.
  • While investment is important for economic growth, it is not the same as liberalization.
  • Investment can occur in both liberalized and regulated economies.
• Favorable Trade
  • This term refers to trade conditions that are advantageous to a country, such as export subsidies or favorable trade agreements.
  • It differs from liberalization, which focuses on removing trade barriers rather than creating specific advantages.
• Free Trade
  • Free trade is a policy of minimizing or eliminating trade restrictions, such as tariffs and quotas, between countries.
  • While related to liberalization, free trade specifically refers to international trade, whereas liberalization can apply to domestic and international markets.

The correct answer is - Latin America

Key Points

• André Gunder Frank and Ernesto Laclau were prominent theorists engaged in debates about the mode of production in the context of underdevelopment and dependency theory.
• Their debates centered around the economic and social structures of Latin America, which experienced significant economic dependency on developed nations.
• Key differences in their arguments:
  • Frank: Advocated for the dependency theory, emphasizing the exploitation of Latin America by the global capitalist system.
  • Laclau: Critiqued Frank’s approach, arguing for a more nuanced understanding of class relations and internal dynamics within underdeveloped countries.
• The debate was pivotal in shaping the discourse on dependency theory and underdevelopment in the global south.

Additional Information

• Dependency Theory
  • Proposed by scholars like André Gunder Frank, it argues that underdevelopment in regions like Latin America results from their integration into the global capitalist economy.
  • Dependency theory critiques the notion that underdeveloped nations can follow the same development trajectory as industrialized nations.
  • It highlights the role of economic exploitation by developed countries in perpetuating global inequalities.
• Mode of Production
  • A concept derived from Marxist theory, it refers to the way in which societies organize economic production.
  • Key components include:
    • Forces of production: Tools, technology, and labor.
    • Relations of production: Social relations, such as class structures, arising from economic production.
  • Frank and Laclau debated how these components applied to Latin America’s underdevelopment.
• Latin America’s Economic Context
  • The region historically relied on exporting raw materials and agricultural goods to developed nations, creating economic dependency.
  • Industrialization efforts were often stifled by external forces and unequal trade relations.
  • These dynamics were central to the Frank-Laclau debate.

The correct answer is - Network reciprocity and trust

Key Points

• Social Capital
  • The term refers to the networks, reciprocal relationships, and trust shared among individuals or groups within a society.
  • It emphasizes the value derived from social interactions and the collective ability to work together effectively.
  • The concept is central to understanding how relationships foster cooperation and lead to positive social and economic outcomes.
• Key Elements
  • Network: Refers to the interconnected relationships between individuals, groups, or organizations.
  • Reciprocity: The mutual exchange of favors or support, ensuring a give-and-take dynamic.
  • Trust: The confidence that others will act fairly, ethically, and predictably within the network.

Additional Information

• Difference from Economic Capital
  • Economic capital refers to financial resources or material assets owned by individuals or groups.
  • Unlike social capital, it focuses on monetary wealth and physical resources rather than relationships or networks.
• Applications of Social Capital
  • Plays a crucial role in community development by fostering collaboration among members.
  • Improves governance and decision-making through trust-based relationships.
  • Enhances economic outcomes by reducing transaction costs and encouraging cooperation.
• Types of Social Capital
  • Bonding: Involves close-knit relationships within a group or community (e.g., family or close friends).
  • Bridging: Refers to connections between different groups or communities to share information and resources.
  • Linking: Focuses on relationships with institutions or individuals in positions of power.

The correct answer is 1 and 3 only.

Key Points

• Universal Basic Income (UBI) is a program for providing all citizens of a country with a given sum of money, regardless of their income, resources, or employment status.
• Objectives
  • to prevent or reduce poverty
  • to increase equality among citizens
• Its evolution can be traced back to the Western Developed World because of the threat of automation-induced job losses.
• Features 

1. Payments at periodic regular intervals
2. Payments in cash 
3. Payments to individuals,
4. Universality

• Reasons behind the Scheme in Indian Context
  • Today, the average Indian family’s monthly income is roughly Rs 50,000, a 2,000 times increase since 1938.
  • The poorest 10% of Indian families earn a mere Rs 5,000 a month. 25 million Indian families earn just a tenth of what the average Indian family earns.
  • And, 50 million households earn just a fifth of the average Indian family.​
• The Economic Survey 2016-17 suggested replacing all current cash transfers with universal basic income and not supplement the social welfare schemes.
  • JAM (Jan Dhan, Aadhar, and Mobile) must be prerequisites for a successful UBI​.
• Advantages:
  1. Fights Poverty and vulnerability
  2. New social contract
  3. Better targeting of poor
  4. Fighting technological unemployment
  5. Supporting unpaid care workers
  6. Expanding the middle class (Hence, Statement 2 is incorrect as it's an advantage, not a disadvantage.)
  7. Insurance against shocks
  8. Psychological benefits
• Disadvantages

1. Conspicuous spending (It can trigger inflation) (Hence, Statement 1 is correct.)
2. Disincentive to work
3. Gender disparity
4. Poor fiscal capacity
5. Distort labor Market (Fall in labor force participation rate) (Hence, Statement 3 is correct.)
6. The political economy of universality
7. Exposure to market risks

The correct answer is - Liberalization

Key Points

• Liberalization
  • Liberalization refers to the removal of restrictions and barriers imposed by the government on economic activities.
  • It aims to promote free-market policies and reduce government intervention in trade and industry.
  • Examples of liberalization include the reduction of tariffs, quotas, licensing restrictions, and other regulatory obstacles.
  • It encourages foreign investment and enhances global trade by making markets more accessible.
  • The process is part of broader economic reforms designed to improve efficiency and competitiveness in the economy.

Additional Information

• Investment
  • Refers to the allocation of resources, especially capital, to generate future returns or benefits.
  • While investment is important for economic growth, it is not the same as liberalization.
  • Investment can occur in both liberalized and regulated economies.
• Favorable Trade
  • This term refers to trade conditions that are advantageous to a country, such as export subsidies or favorable trade agreements.
  • It differs from liberalization, which focuses on removing trade barriers rather than creating specific advantages.
• Free Trade
  • Free trade is a policy of minimizing or eliminating trade restrictions, such as tariffs and quotas, between countries.
  • While related to liberalization, free trade specifically refers to international trade, whereas liberalization can apply to domestic and international markets.

The correct answer is - Latin America

Key Points

• André Gunder Frank and Ernesto Laclau were prominent theorists engaged in debates about the mode of production in the context of underdevelopment and dependency theory.
• Their debates centered around the economic and social structures of Latin America, which experienced significant economic dependency on developed nations.
• Key differences in their arguments:
  • Frank: Advocated for the dependency theory, emphasizing the exploitation of Latin America by the global capitalist system.
  • Laclau: Critiqued Frank’s approach, arguing for a more nuanced understanding of class relations and internal dynamics within underdeveloped countries.
• The debate was pivotal in shaping the discourse on dependency theory and underdevelopment in the global south.

Additional Information

• Dependency Theory
  • Proposed by scholars like André Gunder Frank, it argues that underdevelopment in regions like Latin America results from their integration into the global capitalist economy.
  • Dependency theory critiques the notion that underdeveloped nations can follow the same development trajectory as industrialized nations.
  • It highlights the role of economic exploitation by developed countries in perpetuating global inequalities.
• Mode of Production
  • A concept derived from Marxist theory, it refers to the way in which societies organize economic production.
  • Key components include:
    • Forces of production: Tools, technology, and labor.
    • Relations of production: Social relations, such as class structures, arising from economic production.
  • Frank and Laclau debated how these components applied to Latin America’s underdevelopment.
• Latin America’s Economic Context
  • The region historically relied on exporting raw materials and agricultural goods to developed nations, creating economic dependency.
  • Industrialization efforts were often stifled by external forces and unequal trade relations.
  • These dynamics were central to the Frank-Laclau debate.

The correct answer is - Network reciprocity and trust

Key Points

• Social Capital
  • The term refers to the networks, reciprocal relationships, and trust shared among individuals or groups within a society.
  • It emphasizes the value derived from social interactions and the collective ability to work together effectively.
  • The concept is central to understanding how relationships foster cooperation and lead to positive social and economic outcomes.
• Key Elements
  • Network: Refers to the interconnected relationships between individuals, groups, or organizations.
  • Reciprocity: The mutual exchange of favors or support, ensuring a give-and-take dynamic.
  • Trust: The confidence that others will act fairly, ethically, and predictably within the network.

Additional Information

• Difference from Economic Capital
  • Economic capital refers to financial resources or material assets owned by individuals or groups.
  • Unlike social capital, it focuses on monetary wealth and physical resources rather than relationships or networks.
• Applications of Social Capital
  • Plays a crucial role in community development by fostering collaboration among members.
  • Improves governance and decision-making through trust-based relationships.
  • Enhances economic outcomes by reducing transaction costs and encouraging cooperation.
• Types of Social Capital
  • Bonding: Involves close-knit relationships within a group or community (e.g., family or close friends).
  • Bridging: Refers to connections between different groups or communities to share information and resources.
  • Linking: Focuses on relationships with institutions or individuals in positions of power.

The correct answer is - World system theory

Key Points

• World system theory
  • This theory was introduced and popularized by Immanuel Wallerstein
  • It categorizes the global economic system into three types of regions: Core, Periphery, and Semi-Periphery.
  • The theory emphasizes that the world economy operates as a single unit rather than isolated economies, shaped by historical processes like colonialism and globalization.
  • It critiques capitalism for perpetuating inequality between nations.
  • This framework is widely used in sociology, political science, and economics to analyze global power dynamics and economic disparities.

Additional Information

• Modernisation theory
  • Focuses on the transition from traditional to modern societies, emphasizing economic development and cultural evolution.
  • Promoted by scholars like Walt Rostow, who proposed a five-stage model of economic growth.
  • Criticized for ignoring the structural inequalities created by global systems.
• Dependency theory
  • Developed by economists like Raul Prebisch, it argues that wealthy nations exploit poorer nations, creating a dependent relationship.
  • It contrasts with World System Theory but shares similar critiques of global economic inequality.
• Globalisation theory
  • Examines the increasing interconnectedness of societies worldwide due to trade, technology, and culture.
  • It overlaps with elements of World System Theory but focuses more on contemporary processes rather than historical systems.

The correct answer is - Disguised unemployment

Key Points

• Disguised unemployment
  • Occurs when more workers are employed than required for a specific task or activity, leading to underutilization of labor.
  • It is characterized by workers who appear to be employed but contribute little or no additional productivity to the total output.
  • Even if some workers are removed from such work, the total production does not decrease significantly.
  • Commonly found in agricultural sectors, especially in developing countries where farming employs excessive labor.

Additional Information

• Precarious unemployment
  • Refers to situations where workers face unstable or insecure employment, often with low wages and few benefits.
  • Unlike disguised unemployment, precarious unemployment directly impacts the worker's economic security.
• Footloose labor
  • Describes labor that is mobile and can move freely to different locations, often associated with industries that do not depend on specific geographic resources.
• Immersive labor
  • A term not commonly used in economics; it does not relate to disguised unemployment.
• Impact of disguised unemployment
  • Reduces overall economic efficiency as resources (labor) are not optimally utilized.
  • Often signals a need for structural reforms in the economy to create more productive employment opportunities.

The correct answer is - Roland Robertson

Key Points

• Roland Robertson
  • Roland Robertson is a renowned sociologist who is widely recognized for his work on globalization.
  • He defined globalization as a process that leads to the growing interconnectedness of different parts of the world and fosters the realization that we are all part of a single global community.
  • The statement, "Globalization means getting closer and closer to the world and realizing that we are all one," reflects his perspective on the concept of globalization.
  • Robertson emphasizes the idea of global unity and the integration of cultures and societies through globalization.

Additional Information

• Globalization
  • Globalization refers to the process of increasing interconnectedness and interdependence among nations, cultures, and economies.
  • It involves the free flow of goods, services, information, technology, and people across borders.
  • Key aspects of globalization include:
    • Economic globalization: Integration of global markets and trade.
    • Cultural globalization: Exchange and blending of cultural practices and values.
    • Technological globalization: Rapid dissemination of technology and innovation worldwide.
• Roland Robertson's Contribution
  • He introduced the term "glocalization", which refers to the simultaneous occurrence of global and local influences, emphasizing how local cultures adapt to and transform global trends.
  • Robertson’s work highlights the cultural dimension of globalization and the importance of maintaining local identities within a global framework.
• Other Thinkers and Globalization
  • Amartya Sen: Focuses on the human development aspects of globalization, such as its impact on poverty and inequality.
  • Robert Park: Known for his work in urban sociology, not specifically on globalization.
  • Harlambos: A sociologist known for his introductory texts on sociology, but not specifically for contributions to globalization theory.

The correct answer is - Economically dependent on the wealthy countries that exploit them

Key Points

• A.G. Frank's Dependency Theory
  • A.G. Frank (1967) argued that so-called 'underdeveloped' societies are not primitive or lacking in economic activity but are actively exploited by wealthier nations.
  • These societies are economically dependent on developed countries (wealthy "metropoles"), which benefit from the resources and labor of these poorer "satellite" countries.
• Core Idea
  • The global capitalist system creates a structure where wealthy nations dominate and exploit underdeveloped nations, reinforcing economic disparities.
  • This relationship prevents economic growth and development in satellite nations, which are locked into a cycle of dependency.
• Rejection of Other Options
  • Option 1: "Insufficiently involved in the international capitalist economy" is incorrect because underdeveloped nations are deeply integrated but in a dependent and exploitative manner.
  • Option 2: "Reluctant to surrender their traditional ways of life" is incorrect because the theory does not focus on cultural resistance but economic exploitation.
  • Option 4: "The 'metropoles' to which 'satellite' countries were attached" is incomplete and does not directly explain underdevelopment.

Additional Information

• Dependency Theory
  • Developed by scholars like A.G. Frank and Immanuel Wallerstein, this theory highlights the unequal economic relationships between nations in the capitalist global economy.
  • It contrasts with modernization theory, which views development as a linear process that all nations can achieve independently.
• Key Concepts in Dependency Theory
  • Metropoles: The wealthy, industrialized nations that dominate global trade and exploit resources.
  • Satellites: The underdeveloped nations that depend economically on the metropoles and supply them with cheap labor and raw materials.
  • Exploitation: Wealth is systematically extracted from satellite nations, leaving them impoverished and underdeveloped.
• Relevance to Global Development
  • The theory explains why many nations remain underdeveloped despite participating in international trade.
  • It emphasizes the need for structural changes in the global economy to promote equitable development.

The correct answer is - It means steady growth begins

Key Points

• Take-off stage
  • The term Take-off stage was introduced by economist W.W. Rostow in his model of economic growth.
  • It refers to the phase where an economy transitions from a state of stagnation to a period of sustained growth.
  • During this stage, the economy experiences rapid industrialization and a significant increase in investment.
  • The key features of this stage include:
    • Increased productivity in major sectors such as agriculture and industry.
    • Technological advancements that drive economic growth.
    • The emergence of entrepreneurship and a shift towards a more market-driven economy.
  • This stage is considered critical in achieving long-term economic development.

Additional Information

• Stages of Economic Growth
  • Traditional Society
    • Characterized by a reliance on agriculture and limited technological development.
    • There is minimal economic growth and low productivity.
  • Pre-conditions for Take-off
    • Involves the establishment of infrastructure such as transportation and communication systems.
    • Initial investments in education and industrial development begin to take shape.
  • Take-off
    • Marks the beginning of sustained growth.
    • Industries and markets expand rapidly, supported by technological innovation.
  • Drive to Maturity
    • Occurs when the economy diversifies and becomes capable of producing a wide range of goods and services.
    • There is a focus on higher value-added industries.
  • Age of High Mass Consumption
    • Characterized by a shift towards consumer goods and services.
    • Economic growth leads to increased living standards and widespread prosperity.
• Importance of the Take-off Stage
  • It acts as a catalyst for long-term economic development.
  • Countries in this stage often experience rapid urbanization and industrial growth.
  • Policies promoting investment, innovation, and infrastructure development are critical for sustaining this phase.

The correct answer is - Potlatch

Key Points

• Potlatch
  • A gift-giving feast practiced by Indigenous peoples along the Pacific Northwest Coast of Canada and the United States.
  • Traditionally held to celebrate events such as marriages, births, or memorials.
  • It is a ceremonial event that symbolizes wealth, generosity, and social status.
  • During the Potlatch, hosts distribute gifts to their guests, which enhances their prestige and affirms their societal role.
  • It is deeply rooted in the cultural practices and traditions of tribes such as the Kwakwaka’wakw, Tlingit, and Haida.

Additional Information

• Historical Context
  • The Potlatch was banned in Canada from 1885 to 1951 under the Indian Act as part of colonial efforts to suppress Indigenous cultures.
  • Despite the ban, Indigenous communities continued to hold Potlatches in secret, preserving their cultural heritage.
• Comparison with Similar Practices
  • Kula: A ceremonial exchange system practiced in the Trobriand Islands, focusing on trading items like shell necklaces and armbands.
  • Koha: A gift-giving tradition from Māori culture in New Zealand, often given to express gratitude or respect.
  • Pow Wow: A social gathering of Indigenous peoples in North America focused on dancing, singing, and celebrating cultural heritage, rather than gift-giving.
• Modern Potlatch Practices
  • Today, Potlatches are legal and celebrated openly, showcasing the resilience of Indigenous cultures.
  • They remain an important aspect of cultural identity, fostering community bonds and passing on traditions to younger generations.