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Students can Download Chapter 9 Uses of Statistical Methods Questions and Answers, Plus One Economics Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Economics Chapter Wise Questions and Answers Chapter 9 Uses of Statistical Methods

Plus One Economics Uses of Statistical Methods One Mark Questions and Answers

Question 1.
An essential part of a project report is
(i) Objectives
(ii) Methodology
(iii) Analysis
(iv) All the above
Answer:
(iv) All the above

Question 2.
Data collection is covered under which part of a project works?
(i) Statement of the problem
(ii) Methodology
(iii) Analysis
(iv) Conclusion
Answer:
(ii) Methodology

Plus One Economics Uses of Statistical Methods Two Mark Questions and Answers

Question 1.
List the statistical tools you use for the analysis of data collected.
Answer:
The following statistical tools can generally be used for the analysis of data collected

• Measure of central tendency
• Standard deviation
• Coefficient of variation
• Regression
• Correlation

Plus One Economics Uses of Statistical Methods Three Mark Questions and Answers

Question 1.
Explain the steps towards making a project report.
Answer:
The following are the steps towards making a project report

1. Identifying a problem or area of study
2. Choice of target group
3. Collection of data
4. Organization and presentation of data
5. Analysis and interpretation 0 Conclusion
6. Bibliography

Question 2.
Write down the features of a good questionnaire.
Answer:
The features of a gdb questionnaire are mentioned
below.

1. The questionnaire should not be too long.
2. The number of questions should be as minimum as possible.
3. The series of questions should move from general to specific.
4. The questions should be precise and clear.
5. The questions should not be ambiguous, to enable the respondents to answer quickly, correctly and clearly.
6. If possible ask ‘yes’ or ‘no’ questions.
7. The question should not be a leading question, which gives a clue about how the respondent should answer.
8. The question should not indicate alternatives to the answer.

Plus One Economics Uses of Statistical Methods Five Mark Questions and Answers

Question 1.
Prepare a questionnaire to study the socio-economic conditions of students in your class.
Answer:
Questionnaire to study the socio-economic conditions

1. Name
2. Sex
3. Age
4. Class
5. The community to which you belong to
6. Details of family members:

7. Monthly income of the family

• below 1000
• between 1000 and 5000
• between 5000 and 10000
• above 10000

8. Do you live in the
a) rental house b) own house

9. Is your house electrified
a) yes b) no

10. Do you subscribe to the newspaper at home
a) yes b) no

11. Details of amenities at home:

• cooking gas
• television
• bicycle
• washing machine
• motorcar
• scooter
• refrigerator
• others

Students can Download Chapter 8 Index Numbers Questions and Answers, Plus One Economics Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Economics Chapter Wise Questions and Answers Chapter 8 Index Numbers

Plus One Economics Index Numbers One Mark Questions and Answers

Question 1.
Which of the following is known as cost of living index?
(a) Consumers price index
(b) Wholesale price index
(c) Industrial production index
(d) All the above
Answer:
(a) Consumers price index

Question 2.
Index number can be calculated for ……….
(a) Price
(b) Quantity
(c) Volume
(d) All the above
Answer:
(d) All the above

Question 3.
In 2017 the price of oil increased by 30% compared to 2010. Identify the base year and the current year.
Answer:
Base year 2010, Current year 2017

Question 4.
Which of the following indicates the changes in general price level?
(a) Consumers price index
(b) Wholesale price index
(c) Industrial production index
(d) All the above
Answer:
(b) Wholesale price index

Question 5.
An index number which accounts for the relative importance of the items is known as
(a) weighted index
(b) simple aggregative index
(c) simple average of relatives
(d) all the above
Answer:
(a) weighted index

Question 6.
In most of the weighted index numbers the weight pertains to
(a) base year
(b) current year
(c) both base and current year
(d) none of these
Answer:
(b) current year

Question 7.
The impact of change in the price of a commodity with little weight in the index will be
(a) small
(b) large
(c) uncertain
(d) none of these
Answer:
(a) small

Question 8.
A consumer price index measures changes in
(a) retail prices
(b) wholesale prices
(c) producers prices
(d) none of these
Answer:
(a) retail prices

Question 9.
The item having the highest weight in consumer price index for industrial workers is
(a) Food
(b) Housing
(c) Clothing
(d) all the above
Answer:
(a) Food

Question 10.
In general, inflation is calculated by using
(a) wholesale price index
(b) consumer price index
(c) producers’ price index
Answer:
(a) wholesale price index

Question 11.
What is the other name of the consumer price index?
Answer:
The other name of the consumer price index is price deflator of income.

Question 12.
What is base period?
Answer:
Base period is the reference period with which the current period is compared.

Plus One Economics Index Numbers Two Mark Questions and Answers

Question 1.
Index numbers are very useful in deflating. Explain.
Answer:
Index numbers are very useful in deflating. They are very useful adjusting original data into real values. For example, money wages can be adjusted for price changes to find out the level of real wages.

Question 2.
Write down the uses of the wholesale price index.
Answer:
The wholesale price index number indicates the change in the general price level. The uses of the wholesale price index are noted down below.

1. With the help of the wholesale price index, we can estimate the future demand and supply situations
2. It helps in forecasting future prices
3. It is used to measure the rate of inflation
4. It can be used to eliminate the effect of change in price on aggregates such as national income, capital formation, etc.

Question 3.
Define index number.
Answer:
An index number is a statistical device for measuring changes in the magnitude of a group of related variables.

Question 4.
Mention the formula of ‘simple aggregative’ method?
Answer:
\(P_{01}=\frac{\sum P_{1}}{\Sigma P_{0}} \times 100\)
Here,
ΣP = Total of current year’s prices of different commodities.
ΣP₀ = Total of base year’s prices of different commodites.

Question 5.
Give utility of index numbers.
Answer:

1. Index numbers simplify the facts
2. It is helpful to policymakers
3. It makes comparative study easy
4. It helps to study the general trend

Question 6.
Write a short note on Sensex.
Answer:
Sensex is the short form of Bombay Stock Exchange Sensitive Index with 1978 – 79 as base. The value of Sensex is with reference to this period. It consists of 30 stocks represented by 13 sectors of the economy. If Sensex rises, it indicates that the market is doing well and investors expect better earnings on their investment.

Question 7.
Consumer price indices are of great useful because of various reasons. What are they?
Answer:

1. They determine the purchasing power of money.
2. They are helpful in the determination of real wages.
3. They are helpful in wage negotiations and wage contracts.
4. They help in deflating income and value series in national accounts.
5. They help the government in formulation of wage policy, price policy, rent control and making general economic policies.

Plus One Economics Index Numbers Three Mark Questions and Answers

Question 1.
Name some important index number in use.
Answer:
some important index number in use are mentioned below.

• Consumer price index
• Wholesale Price Index
• Industrial production index
• Producer Price Index
• Index number of agricultural production

Question 2.
Construct an index number for 1991 taking 1990 as base year.

Answer:

It shows when compared to 1990 the general price level in 1991 increased by 20%.

Question 3.
Point out the desirable properties of the base year.
Answer:
The desirable properties of base year are:

• The base year should be a normal year.
• Extreme values should not be selected as base period.
• It should not belong to too far in the past.

Plus One Economics Index Numbers Four Mark Questions and Answers

Question 1.
What are the limitations of index numbers?
Answer:
The limitations of index numbers are mentioned below.

• Index numbers are not fully true.
• They do not help in international comparison.
• They are prepared with certain specific objectives.
• It is difficult to collect retail prices. So, index numbers based on wholesale prices may be misleading.

Question 2.
“Index number is used in economics for policymaking” substantiate.
Answer:
Wholesale price index number (WPI), consumer price index number (CPI) and industrial production index (IIP) are widely used in policymaking.

1. Consumer index number (CPI) or cost of living index numbers are helpful in wage negotiation, formulation of income policy, price policy, rent control, taxation and general economic policy formulation.

2. The wholesale price index (WPI) is used to eliminate the effect of changes in prices on aggregates such as national income, capital formation, etc.

3. WPI is widely used to measure the rate of inflation. Inflation is a general and continuing increase in prices. If inflation becomes sufficiently large, money may lose its traditional function as a medium of exchange and as a unit of account. Its primary impact lies in lowering the value of money.

4. CPI are used in calculating the purchasing power of money and real wage.

5. Index of industrial production gives us a quantitative figure about the change in production in the industrial sector.

6. Agricultural production index provides us a ready reckoner of the performance of agricultural sector.

7. Sensex is a useful guide for investors in the stock market. If the sensex is rising, investors are optimistic of the future performance of the economy. It is an appropriate time for investment.

Plus One Economics Index Numbers Five Mark Questions and Answers

Question 1.
Certain important issues should be kept in mind while constructing an index number”. Do agree? Substantiate your answer.
Answer:
Yes, certain important issues should be kept in mind, while constructing an index number. Those issues are mentioned below

1. You need to be clear about the purpose of the index. The calculation of a volume index will be inappropriate when one needs a value index.

2. Besides this, the items are not equally important for different groups of consumers when a consumer price index is constructed. The rise in petrol price may not directly impact the living condition of the poor agricultural labourers.

Thus the items to be included in any index have to be selected carefully to be as representative as possible. Only
then you will get a meaningful picture of the change.

3. Every index should have a base. This base should be as normal as possible. Extreme values should not be selected as base period. The period should also not belong to too far in the past. The comparison of between 1993 and 2005 is much more meaningful than a comparison between 1960 and 2005.

Many items in a 1960 typical consumption basket have disappeared at present. Therefore, the base year for any index number is routinely updated.

4. Another issue is the choice of the formula, which depends on the nature of question to be studied. The only difference between the Laspeyres index and Paasche’s index is the weights used in these formulae.

5. Besides, there are many sources of data with different degrees of reliability. Data of poor reliability will give misleading results. Hence, due care should betaken in the collection of data. If primary data are not being used, then the most reliable source of secondary data should be chosen.

Question 2.
Explain various types of index numbers.
Answer:
Some Important Index Numbers
1. Consumer price index:
Consumer price index (CPI), also known as the cost of living index, measures the average change in retail prices. The CPI for industrial workers is increasingly considered the appropriate indicator of general inflation, which shows the most accurate impact of price rise on the cost of living of common people.

2. Wholesale price index:
The wholesale price index number indicates the change in the general price level. Unlike the CPI, it does not have any reference consumer category. It does not include items pertaining to services like barber charges, repairing, etc.

3. Industrial production index:
The index number of industrial production measures changes in the level of industrial production comprising many industries. It includes the production of the public and the private sector. It is a weighted average of quantity relatives. In India, it is currently calculated every month with 1993 – 94 as the base.

4. Index number of agricultural production:
The index number of agricultural production is a weighted average of quantity relatives. Its base period is the triennium ending 1981 – 82. In 2003 – 04 the index number of agricultural production was 179.5.

It means that agricultural production has increased by 79.5 percent over the average of the three years 1979 – 80, 1980 – 81 and1981 – 82. Foodgrains have a weight of 62.92 percent in this index.

5. Producer Price Index:
The producer price index number measures price changes from the producers’ perspective. It uses only basic prices including taxes, trade margins, and transport costs.

Students can Download Chapter 7 Correlation Questions and Answers, Plus One Economics Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Economics Chapter Wise Questions and Answers Chapter 7 Correlation

Plus One Economics Correlation One Mark Questions and Answers

Question 1.
Who developed rank correlation co-efficient.
(i) Karl Pearson
(ii) Karl Marx
(iii) Spearman
(iv) None of the above
Answer:
(iii) Spearman

Question 2.
If r= +1, if shows:
(i) Positive correlation
(ii) Perfect positive correlation
(iii) No correlation
(iv) Rank correlation
Answer:
(ii) Perfect positive correlation

Question 3.
If ‘r’ is positive the two variables will more in
(i) Opposite direction
(ii) Inverse direction
(iii) Same direction
(iv) None of the above
Answer:
(iii) Same direction

Question 4.
Which of the following correlation can be used to measure numerically only leniar relationship between two variables?
(i) Karl Pearsons coefficient of correlation
(ii) Spearman correlation
(iii) Rank correlation
(iv) None of the above
Answer:
(i) Karl Pearsons coefficient of correlation

Question 5.
The unit of correlation coefficient between height in feet and weight in kgs is
(i) kg/feet
(ii) percentage
(iii) non-existent
Answer:
(iii) non-existent

Question 6.
The range of simple correlation coefficient is
(i) 0 to infinity
(ii) minus one to plus one
(iii) minus infinity to infinity
Answer:
(ii) minus one to plus one

Question 7.
If r_xy is positive the relation between X and Y is of the type.
(i) When Y increases X increases
(ii) When Y decreases X increases
(iii) When Y increases X does not change
Answer:
(i) When Y increases X increases

Question 8.
If r_xy = 0 the variable X and Y are
(i) linearly related
(ii) not linearly related
(iii) independent
Answer:
(ii) not linearly related

Question 9.
Of the following three measures which can measure any type of relationship
(i) Karl Pearson’s coefficient of correlation
(ii) Spearman’s rank correlation
(iii) Scatter diagram
Answer:
(iii) Scatter diagram

Question 10.
If precisely measured data are available the simple correlation coefficient is
(i) more accurate than rank correlation coefficient
(ii) less accurate than rank correlation coefficient
(iii) as accurate as the rank correlation coefficient
Answer:
(iii) as accurate as the rank correlation coefficient

Question 11.
Define correlation.
Answer:
Correlation studies and measures the direction and intensity of relationship among variables.

Question 12.
Write the formula for calculating correlation.
Answer:
1. Karl Pearson’s coefficient of correlation
\(r=\frac{\sum x y}{\sqrt{\sum x^{2} \times \sum y^{2}}}\)

2. Spearman’s Rank correlation coefficient
\(R=1-\frac{6 \Sigma D^{2}}{N\left(N^{2}-1\right)}\)

Plus One Economics Correlation Two Mark Questions and Answers

Question 1.
Can r lie outside the -1 and 1 range depending on the type of data?
Answer:
No, r cannot lie outside -1 and 1 range depending on the types of data. It lies between minus one and plus one.

Question 2.
Indicate the kind of relationship between X and Y, if the points of the scatter diagram tend to cluster about.

1. A straight line sloping upward.
2. A straight line sloping downward.

Answer:

1. A straight line sloping upward: it is the case of positive correlation.
2. A straight line sloping downward: it is the case of negative correlation.

Question 3.
Name the correlation mentioned in the graph.

Answer:
(a) Positive correlation
(b) Negative correlation
(c) No correlation
(d) Perfect positive correlation
(e) Perfect negative correlation

Question 4.
Give two examples each for positive and negative correlation.
Answer:
1. Positive Correlation

• Relation between price and supply
• Relation between height and weight

2. Negative Correlation

• Relation between price and demand
• Sale of woolen garment and day temperature

Question 5.
What are perfect correlations? Give examples.
Answer:
Perfect correlation is that where changes in two related variables are exactly proportional. It is of two types:
a) Positive perfect correlation and
b) Negative perfect correlation
There is perfect positive correlation between the two variables of equal proportional changes are in the same direction. It is expressed as +1. If equal proportional changes are in the reverse direction. Then there is negative perfect correlation and it is described as -1.

Question 6.
Show in scatter diagram the following.

1. Positive correlation
2. Negative correlation

Answer:

Plus One Economics Correlation Three Mark Questions and Answers

Question 1.
Interpret the values for as 1, -1 and 0.
r=1 r = -1 r = 0
Answer:
r as 1 means that there is perfect positive relationship between two variables r as -1 means that there is perfect negative relationship between two variables r as 0 means that there lack correlation between two variables

Question 2.
List some variables where accurate measurement is difficult.
Answer:
The following are some variables where accurate measurement is difficult.

• Secularism
• Honesty
• Beauty
• Impartiality
• Patriotism

Question 3.
State the nature of relationship.

1. sale of woolen garments and the day temperature
2. amount of rainfall and yield of crop
3. the colour of dress and intelligence of the lady

Answer:

1. negative correlation
2. positive correlation
3. no correlation

Question 4.
Write down the merits of scatter diagram.
Answer:
Merits of scatter diagram are pointed out below:

1. It is a very simple method of studying correlation.
2. Just a glance of the diagram will show the relationship.
3. It indicates whether the relationship is positive or negative.

Question 5.
Construct a flow chart showing the methods of measuring correlation?
Answer:

Question 6.
Illustrate positive correlation and negative correlation.
Answer:
Correlation is commonly classified into negative and positive correlation.
The correlation is said to be positive when the variables move together in the same direction. When the income rises, consumption also rises. When income falls, consumption also falls. For instance, sale of ice-cream and temperature move in the same direction.

The correlation is negative when they move in opposite directions. When the price of apples falls its demand increases. When the prices rise its demand decreases. When you spend more time in studying, chances of your failing decline. These are instances of negative correlation. The variables move in opposite direction.

Question 7.
Calculate the coefficient of correlation from the following data.

Answer:

Question 8.
The following are the ranks obtained by 10 students in two subjects. Calculate Spearman’s rank correlation.

Answer:

Question 9.
Calculate coefficient of correlation using the following data.

Answer:

Plus One Economics Correlation Five Mark Questions and Answers

Question 1.
What do you mean by Spearman’s rank correlation coefficient? Point out the situations where it is used. Also, bring about its usefulness.
Answer:
Spearman’s rank correlation was developed by the British psychologist C.E. Spearman. It is used when the variables cannot be measured meaningfully as in the case of price, income, weight, etc. The ranking may be more meaningful when the measurements of the variables are suspect.

There are also situations when you are required to quantify qualities such as fairness, honesty, etc. Ranking may be a better alternative to the quantification of qualities. Moreover, sometimes the correlation coefficient between two variables with extreme values may be quite different from the coefficient without the extreme values. Under these circumstances, rank correlation provides a better alternative to simple correlation.

Rank correlation coefficient and simple correlation coefficient have the same interpretation. Its formula has been derived from simple correlation coefficient where individual values have been replaced by ranks. These ranks are used for the calculation of correlation. This coefficient provides a measure of linear association between ranks assigned to these units, not their values. It is the Product Moment Correlation between the ranks.

Question 2.
“Correlation Coefficient has certain essential properties”-substantiate.
Answer:
Correlation Coefficient has certain essential properties as discussed below.
1. r has no unit. It is a pure number. It means units of measurement are not part of r. r between height in feet and weight in kilograms, for instance, is 0.7.

2. A negative value of /-indicates an inverse relation. A change in one variable is associated with change in the other variable in the opposite direction. When price of a commodity rises, its demand falls. When the rate of interest rises the demand for funds also falls. It is because now funds have become costlier.

3. If r is positive the two variables move in the same direction. If/”= 0 the two variables are uncorrelated. There is no linear relation between them. However other types of relationships may be there.

4. If r = 1 or r = -1 the correlation is perfect. The relation between them is exact.

5. A high value of r indicates strong linear relationship. Its value is said to be high when it is close to+1 or-1.

6. A low value of r indicates a weak linear relation. Its value is said to be low when it is dose to zero.

7. The value of the correlation coefficient lies between minus one and plus one, -1 < r < +1. If, in any exercise, the value of r \s outside this range indicates error in calculation.

8. The value of r is unaffected by the change of origin and change of scale. Given two variables X and Y let us define two new variables.

Question 3.
Illustrate the following ideas in scatter diagrams.
i. Positive correlation
ii. Perfect positive correlation
iii. Negative correlation
iv. Perfect negative correlation No correlation
Answer:

Students can Download Chapter 6 Measures of Dispersion Questions and Answers, Plus One Economics Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Economics Chapter Wise Questions and Answers Chapter 6 Measures of Dispersion

Plus One Economics Measures of Dispersion One Mark Questions and Answers

Question 1.
Find out the measure of dispersion from the following.
Answer:
(i) Range
(ii) Mean deviation
(iii) Standard deviation
(iv) All the above
Answer:
(iv) All the above

Question 2.
Variance is equal to:
(i) SD
(ii) SD²
(iii) √SD
(iv) SD/2
Answer:
(ii) SD²

Question 3.
Lorenz curve is used to measure
Answer:
(i) Literacy rate
(ii) Unemployment
(iii) Inequality
(iv) None of these
Answer:
(iii) Inequality

Question 4.
Which is the graphical method of determining dispersion?
(i) Range
(ii) Q.D
(iii) S.D
(iv) Lorenz curve
Answer:
(iv) Lorenz curve

Question 5.
Which among the following is not an absolute measure of dispersion?
(i) Range
(ii) Co-efficient of variation
(iii) Mean deviation
(iv) Standard deviation
Answer:
(ii) Co-efficient of variation

Question 6.
Which of the following is the most widely used measure of dispersion?
(i) Range
(ii) Standard deviation
(iii) Mean deviation
(iv) Quartile deviation
Answer:
(ii) Standard deviation

Question 7.
Which of the following is useful in comparing the variability of two or more distributions?
(i) Lorenz Curve
(ii) Standard deviation
(iii) Mean deviation
(iv) Quartile deviation
Answer:
(iii) Mean deviation

Question 8.
Which of the following is not based on all the values?
(i) Mean deviation from mean
(ii) Mean deviation from median.
(iii) Range
(iv) Standard deviation
Answer:
(iii) Range

Question 9.
Mean deviation
(i) is least when calculated from median and higher when calculated from mean.
(ii) is least when calculated from mean and higher when calculated from median.
(iii) same when calculated from median and mean.
(iv) cannot be calculated either from median or mean.
Answer:
(i) is least when calculated from median and higher when calculated from mean.

Question 10.
Mention the purpose for which Lorenz Curve is drawn.
Answer:
Lorenz curve is drawn for the presentation of inequality (or dispersion)

Plus One Economics Measures of Dispersion Two Mark Questions and Answers

Question 1.
Which measure of dispersion is the best and how?
Answer:
Standard deviation is the best measure of dispersion. Because it possesses most of the characteristics of an ideal measure of dispersion.

Question 2.
Range is not based on all the values. Do you agree? Substantiate.
Answer:
Yes, I agree with the statement that range is not based on all the values. It is simply the difference between the largest (L) and the smallest value (S) in a distribution. Therefore, range cannot be considered as a good measure of dispersion.

Question 3.
Give two limitations of range.
Answer:
Given below two limitations of range.

1. range is unduly affected by extreme values
2. range is not based on all values.

Question 4.
Differentiate between range and interquartile range.
Answer:
Range is the difference between the value of extreme while interquartile range is the difference between quarter extreme values of the series.

Question 5.
Some measures of dispersion depend upon the spread of values whereas some calculate the variation of values from a central value. Do you agree?
Answer:
Yes, I agree with this statement. Range and quartile deviation measure the dispersion by calculating the spread within which the values lie. That is they de-pend.on the spread of values. On the other hand, mean deviation and standard deviation calculate the variation of value from a central value.

Question 6.
Write the merits and demerits of mean deviation.
Answer:
1. Merits

• It is based on all observations
• It is less affected by extreme items
• It is easy to calculate & simple to understand

2. Demerits

• It ignores + signs
• It is difficult to compute when
• or median comes infraction.

Plus One Economics Measures of Dispersion Three Mark Questions and Answers

Question 1.
Calculate coefficient of standard deviation from the following information SD = 22.4, Mean = 159
Answer:
Coefficient of standard deviation = \(\frac{\mathrm{SD}}{\bar{x}} \times 100\)
\(=\frac{22.4}{159} \times 100=0.14 \times 100=14\)

Question 2.
Following are certain measures of dispersion. Classify them into absolute measures and relative measures.
{Range, Coefficient of variation, Mean Deviation, Coefficient of Quartile Deviation, coefficient of Range, Standard deviation}
Answer:

Question 3.
Find odd ones out and justify your answer.

1. range, quartile deviation, mode, standard deviation
2. scatter, spread, variation, correlation
3. Range, Mean Deviation, coefficient of variation, Standard deviation.

Answer:

1. Mode. Others are methods of studying measures of dispersion.
2. Correlation. Others are different expressions of dispersion.
3. Coefficient of variation. Others are absolute measures of dispersion.

Question 4.
Calculate the coefficient of variation, if,
Number of Boys = 72
Average Height = 68
The variance of distribution = 9
Answer:

Question 5.
Point out features of good measure of dispersion.
Answer:
The features of a good measure of dispersion are pointed out below:

• It should be easy to understand
• It should be simple to calculate
• It should be rigidly defined
• It should be based on all observations
• It should not be affected by extreme values

Question 6.
The size of landholdings of 5 persons are given below:

1. Analyse the data by measuring the dispersion using the easiest method.
2. What are the drawbacks of that method?

Answer:
1. Range is the simplest method of studying dispersion.
Range = L – S
where L = Largest item
S = Smallest item
Range = 6 – 0.5 = 5.5 acres
2.

• It is not based on each and every item of the distribution.
• It is subject to fluctuations from sample to sample.
• It cannot be computed in case of open-end classes.

Question 7.
If the sum of 10 values is 100 and the sum of their square is 1090, find the coefficient of variation.
Answer:

Plus One Economics Measures of Dispersion Four Mark Questions and Answers

Question 1.
In a town, 25% of the persons earned more than Rs 45,000 whereas 75% earned more than 18,000. Calculate the absolute and relative values of dispersion.
Answer:
We get the following information from the above.
Q1 = Rs. 18000 and Q3 = Rs. 45000
Absolute measure of dispersion (quartile deviation)
= Q3 – Q1/2 = 45000 – 18000/2
= Rs. 13500
Relative measure of dispersion (coefficient of Q. D)
= Q3-Q1/Q3 + Q1
= 45000 -18000 / 45000 + 18000
= 27000/63000
= 3/7
= 0.43

Question 2.
What do you mean by dispersion? Name the important methods of measuring dispersion.
Answer:
Dispersion is the extent to which values in a distribution differ from the average of the distribution.
To quantify the extent of the variation, there are certain measures namely:

1. Range
2. Quartile Deviation
3. Mean Deviation
4. Standard Deviation
5. Lorenz curve

Question 3.
Mention the merits of standard deviation.
Answer:
Merits of standard deviation are:

1. It is rigidly defined
2. It is based on all observations
3. It takes algebraic signs in consideration
4. It serves the basis of other measures like correlation.

Question 4.
The number of telephone calls received at an exchange in 245 successive one-minute intervals are shown in the following frequency distribution. Compute the mean deviation about the median.

Answer:

Question 5.
The coefficient of variation of two series are 58% and 69% and their standard deviation are 21.2 and 15.6. Calculate their mean.
Answer:

Question 6.
Calculate the standard deviation.

Answer:

Plus One Economics Measures of Dispersion Five Mark Questions and Answers

Question 1.
Match the following.

Answer:

Plus One Economics Measures of Dispersion Eight Mark Questions and Answers

Question 1.
What do you mean by Lorenz curve? Give the steps required in the Construction of the Lorenz Curve.
Answer:
The measures of dispersion discussed so far give a numerical value of dispersion. A graphical measure called Lorenz Curve is available for estimating dispersion. In constructing a Lorenz curve, the following steps are involved.

1. Calculate class mid-points and find cumulative totals
2. Calculate cumulative frequencies
3. Express the grand totals and convert the cumulative totals in these columns into percentages,
4. Now, on the graph paper, take the cumulative percentages of the variable on Y-axis and cumulative percentages of frequencies on X-axis. Thus each axis will have values from ‘0’to ‘100’.
5. Draw a line joining Co-ordinate (0, 0) with (100,100). This is called the line of equal distribution
6. Plot the cumulative percentages of the variable with corresponding cumulative percentages of frequency.
7. Join these points to get the curve OAC.

Question 2.
Calculate

1. standard deviation and
2. mean deviation

from the following data.
X = 7, 9, 18, 11, 10, 8, 17, 13, 11, 16
Answer:

1. Standard deviation
\(s=\sqrt{\frac{\sum d^{2}}{N}}\)
\(=\sqrt{\frac{134}{10}}=3.66\)

2. Median deviation
\(M D=\frac{\Sigma|d|}{N}=\frac{32}{10}=3.2\)

Question 3.
The following table gives the distribution of income of 100 families in a village. Calculate standard deviation.

Answer:

Question 4.
Write down the formula for finding out various measures of dispersion.
Answer:

Students can Download Chapter 9 Small Business Questions and Answers, Plus One Business Studies Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examination

Kerala Plus One Bussiness Studies Chapter Wise Questions and Answers Chapter 9 Small Business

Plus One Small Business Two Mark Questions and Answers

Question 1.
Define small scale industries.
Answer:
Small scale industry:
A small scale industrial undertaking is defined as one in which the investment in fixed assets of plant and machinery does not exceed rupees one crore.

Question 2.
State the features of cottage industries.
Answer:
Cottage industries:
cottage industries are characterised by certain features:

1. These are organised by individuals, with private resources.
2. Normally use family labour and locally available talent.
3. The equipment used is simple.
4. Capital investment is small.
5. Produce simple products, normally in their own premises.
6. Production of goods using indigenous technology.

Plus One Small Business Three Mark Questions and Answers

Question 1.
Discuss the problems faced by small scale industries. (3)
Answer:
Problems of small business:
Small businesses are faced with the following problems:

1. Small scale industries find it difficult to get adequate finance from banks and other financial institutions.
2. They are not able to get quality raw materials at reasonable prices.
3. Small business is generally operated by people who may not have all the managerial skills required to run the business.
4. Small business firms cannot afford to pay higher salaries to the employees. So productivity per employee is relatively low and employee turnover is generally high.
5. Small business depends excessively on middlemen for marketing the products. Middlemen exploit them by paying low price and delayed payments.
6. Small business organization uses outdated technology to produce products. So they cannot compete with global enterprises with low quality products.
7. Due to lack of marketing skills or lack of demand, many small business firms have to operate below full capacity.
8. Use of outdated technology results low productivity and uneconomical production.
9. Small-scale units find it very difficult to compete .with the product of multinational companies which are comparatively very cheap and of better quality
10. Other important problems are poor project planning, inefficient management, transportation problems, lack of power, and lack of adequate warehousing, etc.

Plus One Small Business Four Mark Questions and Answers

Question 1.
Write short note on

1. NSIC
2. DIC (4)

Answer:
1. National Small Industries Corporation (NSIC):
This was set up in 1955 to promote, aid and foster the growth of small scale units in India.
Functions of NSIC :

• It supplies imported machines and raw materials to small scale industries on easy hire-purchase schemes.
• It exports the products of small units.
• It provides technology to small scale Industries.
• Helps in up-gradation of technology
• Provides advisory service
• Developing software technology parks and technology transfer centres.

2. The District Industries Centers (DICs):
DICs were established in May 1978. District Industries Centers is the institution at the district level which provides all the services and support facilities to the entrepreneurs for setting up small and village industries. Identification of suitable schemes, preparation of feasibility reports, arranging for credit, machinery and equipment, provision of raw materials and other extension services are the main activities undertaken by these centers.

Question 2.
What measures has the government taken to solve the problem of finance and marketing in the small scale sector? (4)
Answer:
Government assistance to small Industries and Small Business:
Institutional Support:
1. National Bank for Agriculture and Rural Development (NABARD):
NABARD was set up in 1982 to promote integrated rural development.
Functions of NABARD:

• It provides financial support to small Industries, cottage and village industries and agriculture.
• It provides counseling and consultancy services.
• It also organises training and development programme for rural entrepreneurs.

2. The Rural Small Business Development Centre (RSBDC):
It aims at providing management and technical support to current and prospective micro and small entrepreneurs in rural areas. RSBDC has organized several programmes on rural entrepreneurship, skill upgradation workshops, training programmes, etc.

3. National small Industries Corporation (NSIC):
This was set up in 1955 to promote, aid and foster the growth of small scale units in India.
Functions of NSIC :

• It supplies imported machines and raw materials to small scale industries on easy hire-purchase schemes.
• It exports the products of small units.

4. Small Industries Development Bank of India (SIDBI):
SIDBI was set up in 1980. SIDBI is the main financial Institution for financing and development of small Business in India.
Functions of SIDBI:

• Helps SSI unit for modernization and technology upgradation by providing loan
• Meet working capital requirements of SSI.

5. The National Commission for Enterprises in the Unorganised Sector (NCEUS):
The NCEUS was constituted in September, 2004.
The objectives of NCEUS:

• To recommend measures for improving the productivity of small enterprises
• To generate more employment opportunities in rural areas

6. Rural and Women Entrepreneurship Development (RWED):
RWE provides the following services:

• Creating a business environment that encourages initiatives of rural and women entrepreneurs.
• Enhancing the human and institutional capacities required to foster entrepreneurial dynamism and enhance productivity.
• Providing training manuals for women entrepreneurs and training them.
• Rendering all types of advisory services.

7. World Association for Small and Medium Enterprises (WASME):
It is the only International Non-Governmental Organisation of micro, small and medium enterprises based in India, which set up an International Committee for Rural Industrialisation. Its aim is to develop an action plan model for sustained growth of rural enterprises.

There are several schemes to promote the non-farm sector initiated by the Government of India, i.e. IRDP, PMRY, TRYSEM, JRY, Development of Women and Children in Rural Areas (DWCRA) etc.

8. Scheme of Fund for Regeneration of Traditional Industries (SFURTI):
To make the traditional industries more productive and competitive, the Central Government set up a fund with₹100 crores.
The main objectives of the scheme are as follows:

• To develop clusters of traditional industries in various parts of the country
• To make traditional industries competitive, profitable and sustainable
• To create employment opportunities in traditional industries.

9. The District Industries Centers (DICs):
DICs were established in May 1978. District Industries Centers is the institution at the district level which provides all the services and support facilities to the entrepreneurs for setting up small and village industries.

Identification of suitable schemes, preparation of feasibility reports, arranging for credit, machinery and equipment, provision of raw materials and other extension services are the main activities undertaken by these centers.

Plus One Small Business Five Mark Questions and Answers

Question 1.
What are the incentives provided by the Government for industries in backward and hilly areas? (5)
Answer:
Incentives:
The incentives offered by the government to develop backward areas are:

1. Availability of land at concessional rate.
2. Supply power at a concessional rate of 50% or exempt such units from payment in the initial years.
3. Water is supplied on a no-profit, no-loss basis or with 50 percent concession or exemption from water charges for a period of 5 years.
4. All union territories, industries are exempted from sales tax,
5. Most states have abolished octroi.
6. Units located in backward areas get scarce raw materials at concessional rates.
7. Subsidy of 10-15% for building capital asset. Loans are offered at concessional rates.
8. Some states encourage setting up of industrial estates in backward areas.
9. Exemption from paying taxes for 5 or 10 years is given to industries established in backward, hilly and tribal areas.

Question 2.
Small scale industrial sector has an important role in Indian economy. To meet the financial and developmental needs of small business in India a separate bank had been set up. (5)

1. Give the name of the bank.
2. What are its major functions?

Answer:
1. SIDBI: Small Industries Development Bank of India (SIDBI). SIDBI was set up in 1980. SIDBI is the main financial Institution for financing and development of small Business in India.

2. Functions of SIDBI:

• Helps SSI unit for modernisation and technology upgradation by providing loan
• Meet working capital requirements of SSI.
• Provides means forthe rehabilitation of sick units
• Provides service like leasing, hire purchase, venture capital financing etc.
• Provide equity support to small entrepreneurs.

Plus One Small Business Six Mark Questions and Answers

Question 1.
Describe the role of small business in rural India. (6)
Answer:
Role of small business in Rural India:

1. Cottage and rural industries provide employment opportunities in the rural areas especially for the traditional artisans and the weaker sections of society.
2. It prevents migration of rural population to urban areas in search of employment.
3. Small business helps to eradicate poverty, income inequalities, etc in rural area.
4. Small scale industries are powerful instrument for the accelerated industrial growth and creating productive employment in rural and backward areas.

Plus One Small Business Eight Mark Questions and Answers

Question 1.
How do small scale industries contribute to the socio-economic development of India? (8)
Answer:
Role of small business in India:

1. Small industries are labour intensive and less capital intensive. They generate more number of employment opportunities.
2. The share of product from small industries is 45% of total export from India. So it earn valuable foreign exchange.
3. Small scale Industries produces a wide variety of goods e.g. readymade garments, stationery, soaps, leather goods, plastic and rubber goods.
4. The contribution of small industries to the balanced regional development of the country is very significant.
5. Small industries provide ample opportunity for entrepreneurship.
6. It enjoys the advantage of low cost of production because they used local resources in their product.
7. Due to the small size of the organisation, quick and timely decisions can be taken without consulting many people.
8. Small industries are best suited for the products which are designed according to the taste, needs and preferences of the customers.
9. Small industries maintain good personal relations with both customers and employees.

Students can Download Chapter 8 Sources of Business Finance Questions and Answers, Plus One Business Studies Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examination

Kerala Plus One Bussiness Studies Chapter Wise Questions and Answers Chapter 8 Sources of Business Finance

Plus One Sources of Business Finance One Mark Questions and Answers

Question 1.
Equity shareholders are called
(a) Owners of the company
(b) Partners of the company
(c) Executive of the company
(d) Guardians of the company
Answer:
(a) Owners of the company

Question 2.
Fund required for purchasing current assets is an example of __________
Answer:
Working capital

Question 3.
Under the lease agreement, the lessee get the rights to __________
Answer:
Use the asset for a specified period.

Question 4.
Under the factoring agreement, the factor
Answer:
Collects the client’s debt or account receivables.

Question 5.
Internal sources of capital are those that are
Answer:
generated within the business.

Question 6.
Preference shares abd equity shares are called ____________ securities.
Answer:
Ownership Securities

Question 7.
Equity shareholders are called
(a) Owners of the company
(b) Partners of the company
(c) Executives of the company
(d) Guardians of the company
Answer:
(a) Owners of the company

Question 8.
Equity share capital is called ________ capital
Answer:
Risk

Question 9.
Which of the following is not a characteristic of equity shares?
(a) Voting rights
(b) Ownership security
(c) Fixed rate of return
(d) Residual owners
Answer:
(c) Fixed rate of return

Question 10.
Which source is called as permanent source of capital?
Answer:
Equity Share Capital

Question 11.
__________ shareholders have the right to control the company.
Answer:
Equity Shareholders

Question 12.
Which source is called as permanent source of capital?
Answer:
Equity Share Capital

Question 13.
Sumesh an NRI is interested to invest in companies, but he is not ready to take up more risk. Which type of security he should buy?
Answer:
Preference shares.

Question 14.
_________ shareholders have the right to get dividend at a fixed rate .
Answer:
Preference shareholders

Question 15.
This source of finance is called ‘internal source of financing’ and ‘self financing’. Identify the source of finance and mention its three merits.
Answer:
Ploughing back of profit

Question 16.
Retained earnings are parts of __________ capital.
Answer:
Ownership Capital

Question 17.
Employment of corporate savings use of accumulated saving in the business in the form of reserves is called
Answer:
Ploughing back of profits

Question 18.
___________ are the cheapest source of finance.
Answer:
Retained earnings

Question 19.
___________ are called creditorship securities
Answer:
Debentures

Question 20.
Debentures which are secured by a charge on the assets of the company are called _________
Answer:
Secured debentures

Question 21.
Debentures which can be converted in equity shares are called _________
Answer:
Convertable debentures

Question 22.
Debenture issued without the name of owner is __________ debenture.
Answer:
Unregistered or naked

Question 23.
Which of the following is not a characterstics features of debentures?
(a) Ownership security
(b) Generally secured
(c) Participate in the surplus profit
(d) Guarantee of returms
Answer:
(c) Participate in the surplus profit

Question 24.
An Indian Company can now raise funds not only from India but also through foreign equity participation. How is it possible?
Answer:

1. GDRs
2. ADRs
3. FDI

Question 25.
Expand the term GDR
Answer:
Global Depositors Receipts.

Question 26.
Expand the term ADR
Answer:
American Depository Receipt

Question 27.
ADRs are issued in
(a) Canada
(b) China
(c) India
(d) USA
Answer:
(d) USA

Question 28.
Identify the type of financial services belonged to each cash explain its features.

1. Acquired a machinery for monthly rental basis from an outside agency.
2. Gives the right for collecting their accounts receivable to a specialised agency.
3. An organization which collects and pools funds from public and invests in securities.

Answer:

1. Leasing
2. Factoring
3. Mutual fund

Question 29.
A company decided to raise its funds by selling its account receivables to an agency. Which type of financial service is maintaining here.
Answer:
Factoring

Question 30.
I render specialized services to companies in the collection of their accounts receivables.
Answer:
Factoring

Question 31.
State the appropriate term to denote the arrangement of acquiring the right to use an asset without actually owning it.
Answer:
Leasing

Plus One Sources of Business Finance Two Mark Questions and Answers

Question 1.
What is business finance? Why do businesses need funds? Explain. (2)
Answer:
Nature of Business Finance:

1. Fixed capital requirements:
In order to start a business funds are needed to purchase fixed assets like land and building, plant and machinery. This is called fixed capital requirement.

2. Working Capital requirements:
A business needs funds for its day to day operation. This is known as working Capital requirements. Working capital is required for purchase of raw materials, to pay salaries, wages, rent and taxes.

Question 2.
These are shares which carry preferential rights over the equity shares. Being a commerce student, identify this type of share. And state its 2 preferential rights. (2)
Answer:
Preference shares.
Their preferential rights are:

1. The right to get a fixed rate of divided
2. The right to claim repayment of capital in the event of winding up of the company.

Question 3.
Match the following

1. Equity share – Fixed percentage of interest
2. Debenture – International source of finance
3. Preference share – Real owner
4. American depository – No voting right receipt

Answer:

1. Equity share – Real owner
2. Debenture – Fixed percentage of interest
3. Preference share – No voting right
4. American depository receipt – International source of finance

Question 4.
An Indian company can expand not only through the fund in India but also from foreign equity participation. How is it possible? (2)
Answer:
FDI. It refers to direct subscription to the equity capital of an Indian company by a multinational corporation. It includes Establishment of a new enterprise in a foreign.

Plus One Sources of Business Finance Three Mark Questions and Answers

Question 1.
An Indian company can now raise funds not only from India, but also through foreign equity participation. How is it possible? Explain
Answer:
GDR: Global Depository Receipts are issued by an Indian company to an intermediary abroad called an Overseas Depository Bank. They are issued and traded in European capital market.

ADR: American Depository receipts are issued and traded in U.S.A.

Question 2.
List sources of raising long-term and short-term finance. (3)
Answer:
Long Term Sources:
The amount of funds required by a business for more than five years is called long-term finance. Generally this type
of finance is required for the purchase of fixed assets like land and building, plant and machinery furniture, etc. It include sources such as shares and debentures, long-term borrowings and loans from financial institutions.

Short Term Sources:
Short-term funds are those which are required for a period not exceeding one year. These sources include Trade credit, loans from commercial banks and commercial papers etc. Short-term finance is used for financing of current assets such as accounts receivable and inventories.

Question 3.
Name any three special financial institutions and state their objectives. (3)
Answer:
Financial Institutions:
The state and central government have established many financial institutions to provide finance to companies. These institutions aim at promoting the industrial development of a country, these are also called ‘development Bank’. These are IFCI, ICICI, IDBI and LIC, UTI.

This source of financing is considered suitable when large funds for longer duration are required for expansion, reorganisation and modernisation of an enterprise.
Merits:

1. Financial Institution provide long term finance which is not provided by Commercial Bank
2. These institutions provide financial, managerial and technical advice and consultancy to business firms.
3. It increases the goodwill of the borrowing company in the capital market.
4. As repayment of loan can be made in easy installments, it does not prove to be much of a burden on the business.
5. The funds are made available even during periods of depression, when other sources of finance are not available.

Limitations:

1. The procedure for granting loan is time consuming due to rigid criteria and many formalities.
2. Financial Institution place restrictions on the powers of the borrowing company.
3. Financial institutions may have their nominees on the Board of Directors of the borrowing company thereby restricting the autonomy of the company.

Question 4.
While presenting a seminar paper on different sources of business finance, your friend Vineeth, pointed out that “ownership capital is the risk capital of the business”. Can you explain why it is called risk capital? (3)
Answer:
Equity shareholders are the real owners of the company. Equity shareholders will get their dividend only after dividend is paid to preference shareholders. They can claim back their capital only on winding up after discharging all other liabilities of the company. So we can say that ownership capital is the risk capital of the business.

Question 5.
“ADR & GDR serves the same purpose whenever shares are issued abroad by Indian companies”. Then why can’t we call them by the same name? (3)
Answer:
The important differences between ADR and GDR are:

Plus One Sources of Business Finance Four Mark Questions and Answers

Question 1.
What is the difference between internal and external sources of raising funds?
Answer:

Question 2.
What is the difference between GDR and ADR? (4)
Answer:

Question 3.
Discuss the financial instruments used in international financing. (4)
Answer:
International Financing:

1. Commercial Banks:
Commercial banks all over the world extend foreign currency loans for business purposes. Standard chartered is a major source of foreign currency loan to the Indian industry.

2. International Agencies and Development Banks:
A number of international agencies and development banks provide long and medium term loans and grants to promote the development of economically backward areas in the world. Eg. International Finance Corporation (IFC), EXIM Bank and Asian Development Bank.

3. International Capital Markets:

a. Global Depository Receipts (GDR’s):
Under GDR, shares of the company are first converted into depository receipts by international banks. These depository receipts are denominated in US dollars. Then these depository receipts are offered for sale globally through foreign stock exchanges. GDR is a negotiable instrument and can be traded freely like any other security.

The holder of GDRs are entitled for dividend just like shareholders. But they do not enjoy the voting rights. Many Indian companies like ICICI, Wipro etc. have raised foreign capital through issue of GDRs.
Feature of GDR:

• GDR can be listed and traded on a stock exchange of any foreign country other than America.
• It is negotiable instrument.
• A holder of GDR can convert it into the shares.
• Holder gets dividends
• Holder does not have voting rights.
• Many Indian companies such as Reliance, Wipro and ICICI have issue GDR.

b. American Depository Receipts (ADR’s):
The depository receipts issued by a company in the USA are known as American Depository Receipts.
Feature of ADR:

• It can be issued only to American Citizens.
• It can be listed and traded is American stock exchange.
• Indian companies such as Infosys, Reliance issued ADR

Question 4.
Explain different types of Preference shares. (4)
Answer:
Types of Preference Shares:

a. Cumulative and Non-cumulative Preference Share:
in cumulative preference shares, the unpaid dividends are accumulated and carried forward for payment in future years. On the other hand, in non- cumulative preference share, the dividend is not accumulated if it is not paid out of the current year’s profit.

b. Participating and Non-participating Preference Share:
Participating preference shares have a right to share the profit after making payment to the equity shares. The non-participating preference shares do not enjoy such a right.

c. Convertible and Non-convertible Preference Share:
The preference shares which can be converted into equity shares after a specified period of time are known as convertible preference share. Non-convertible shares cannot be converted into equity shares.

d. Redeemable and Irredeemable Preference Share:
Redeemable preference shares are those where the company undertakes to repay it after a specified period. Where the amount of the preference shares is refunded only at the time of liquidation, are known an irredeemable preference shares.

Merits:

1. Preference shares provide reasonably steady income in the form of fixed rate of return and safety of investment.
2. Preference shares are useful for those investors who want fixed rate of return with comparatively low risk

Limitations:

1. Preference shareholders have no voting right.
2. The dividend paid is not deductible from profit for income tax.

Plus One Sources of Business Finance Five Mark Questions and Answers

Question 1.
What is a commercial paper? What are its advantages and limitations. (5)
Answer:
Commercial Paper (CP):
It is an unsecured promissory note issued by a firm to raise funds for a short period. The maturity period of commercial paper usually ranges from 90 days to 364 days. Being unsecured, only firms having good credit rating can issue the CP and its regulation comes under the purview of the Reserve Bank of India.
Merits:

1. A commercial paper does not contain any restrictive conditions.
2. As it is a freely transferable instrument, it has high liquidity.
3. A commercial paper provides a continuous source of funds.
4. They are cheaper than a bank loan.

Limitations:

1. Only financially sound and highly rated firms can raise money through commercial papers
2. The size of money that can be raised through commercial paper is limited
3. Commercial paper is an impersonal method of financing. Extending the maturity of a CP is not possible.
4. Issue of commercial paper is very closely regulated by the RBI guidelines.

Question 2.
Mr. Ganesh, a sole trader, acquired a machinery on a monthly rental basis from an outside agency. Identify the type of financial service in which he entered into. Explain it. (5)
Answer:
Lease Financing:
A lease is a contractual agreement whereby the owner of an asset (lessor) grants the right to use the asset to the other party (lessee). The lessor charges a periodic payment for renting of an asset for some specified period called lease rent.
Merits:

1. It enables the lessee to acquire the asset with a lower investment;
2. Lease rentals paid by the lessee are deductible for computing taxable profits;
3. It provides finance without diluting the ownership or control of business
4. The lease agreement does not affect the debt raising capacity of an enterprise;
5. Simple documentation makes it easier to finance assets.

Limitations:

1. A lease arrangement may impose certain restrictions on the use of assets.
2. The normal business operations may be affected in case the lease is not renewed.
3. The lessee never becomes the owner of the
   asset.

Question 3.
Both Equity shares and Preference shares are ownership funds of a company. But there is significant difference between these two funds. Can you identify the same. (5)
Answer:

Plus One Sources of Business Finance Eight Mark Questions and Answers

Question 1.
“The issue of debentures provides wide options to the company as well as investors in terms of its features”. Can you substantiate the statement from the point of view of its classification? (8)
Answer:
Debentures:
A debenture is a document issued by a company under its seal to acknowledge its debt. Debenture holders are, therefore, termed as creditors of the company. Debenture holders are paid a fixed rate of interest.
Types of Debentures:

a. Secured and Unsecured Debentures:
Secured (Mortgaged) debentures are debentures which are secured by a charge on the assets of the company. Unsecured (Simple or naked) debentures do not carry any charge or security on the assets of the company.

b. Registered and Bearer Debentures:
In the case registered debentures, the name, address and other details of the debenture holders are entitled in the books of the company. The debentures which are transferable by mere delivery are called bearer (Unsecured) debentures.

c. Convertible and Non-convertible Debentures:
Convertible debentures are those debentures that can be converted into equity shares after the expiry of a specified period. On the other hand, non¬convertible debentures are those which cannot be converted into equity shares.

d. First and Second:
Debentures that are repaid before other debentures are repaid are known as first debentures. The second debentures are those which are paid after the first debentures have been paid back.

Merits:

1. It. is preferred by investors who want fixed income at lesser risk
2. Debenture holder do not have voting right
3. Interest on Debentures is a tax deductable expense
4. It does not dilute control of equity shareholders on management
5. Debentures are less costly as compared to cost of preference shares.
6. They guarantee a fixed rate of interest
7. It enables the company to take the advantage of trading on equity.
8. The issue of debentures is suitable when the sales and earnings are relatively stable

Limitations:

1. It is not suitable for companies with unstable future earnings.
2. The company has to mortgage its assets to issue debentures.
3. Debenture holders do not enjoy any voting rights.
4. In case of redeemable debentures, the company has to make provisions for repayment on the specified date, even during periods of financial difficulty.
5. With the new issue of debentures, the company’s capability to further borrow funds reduces.

Question 2.
Distinguish between Shares and Debentures. (8)
Answer:

Students can Download Chapter 7 Formation of a Company Questions and Answers, Plus One Business Studies Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examination

Kerala Plus One Bussiness Studies Chapter Wise Questions and Answers Chapter 7 Formation of a Company

Plus One Formation of a Company One Mark Questions and Answers

Question 1.
Application for approval of name of a company is to be made to
Answer:
Registrar of companies.

Question 2.
A prospectus is issued by
Answer:
Public company

Question 3.
Preliminary contracts are signed
Answer:
Before the incorporation

Question 4.
At which stage in the formation of a company does it interact with SEBI
Answer:
Capital subscription

Question 5.
The first stage in the formation of a company is __________
Answer:
Promotion

Question 6.
“I undertake to form a new company and carry out all the preliminary work in connection with its establishment” Who am I?
Answer:
Promoter

Question 7.
Preliminary Contracts are signed
1. Before the incorporation
2. After incorporation but before capital subscription
3. After incorporation but before of commencement of business
4. After commencement business
Answer:
1. Before the incorporation

Question 8.
Spot the odd one and state the reason
1. Memorandum of Association
2. Articles of Association
3. Certificate of incorporation
4. Certificate of commencement of business
Answer:
5. Certificate of commencement of business

Question 9.
_____________ is the magnacarta of the company.
Answer:
Memorandum of Association

Question 10.
_____________ is the birth certificate of a company.
Answer:
Certificate of incorporation

Question 11.
The procedure for conducting company meetings, voting, quorum, poll and proxy will be mentioned in the
1. Prospectus
2. Memorandum of Association
3. Articles of Association
Answer:
3. Articles of Association

Question 12.
The provision regarding the internal management of a company will appear in its
Answer:
Articles of Association

Question 13.
Public Companies need __________ to commence the business.
Answer:
Certificate of commencement of business

Question 14.
Directors of a public Ltd. Co. decided to give advertisement in all newspapers for subscribing their shares. Identify the document given below
1. table A
2. memorandum of association
3. prospectus
Answer:
3. Prospectus

Question 15.
This clauses is the form of a declaration, it states that the subscribers express the willingness and agreement to form a company. Name the clause of memorandum of association.
Answer:
Association Clause

Question 16.
This clause specifies the name of the state where the registered office of the Co. is situated. Identify the clause.
Answer:
Situation clause

Question 17.
This clause specifies the name of the company.
Answer:
Name clause

Question 18.
Identify the document in which the following information about a company can be found.

1. Object with which the company is formed.
2. Rules and regulations of internal management
3. Investing deposits from the public
4.  Acknowledgement of debt in a company

Answer:

1. Memorandum of Association
2. Articles of Association
3. Mutual fund
4. Debenture

Question 19.
TABLE A is a model of _________ given in companies Act.
Answer:
Articles of Association

Question 20.
Identify the documents in which following information about a company is found.

1. Authorized capital
2.  Rules and regulation for internal management.
3.  Date of opening and closing of subscription list.

Answer:

1. Memorandum of Associaiton
2. Articles of Association
3. Prospectus

Question 21.
Identify the relevant clauses in the memorandum of association in which the following information can be included.

1. The registered office is in Kerala.
2. Statutory declaration by members
3. Ram Limited
4. The scope of activities of company

Answer:

1. Situation clause
2. Association clause
3. Name clause
4. Object clause

Question 22.
State the odd item in the case of a private limited company.
1. memorandum of association
2. articles of association
3. certificate of incorporation
4. certificate of commencement of business
Answer:
4. Certificate of Commencement of business

Question 23.
Mention the name of the certificates/documents relating to following activities / formalities

1. The certificate issued by the Registrar of companies certifying that the company has come into existence.
2. The document, which contains the various rules and regulations that govern the management of the company.
3. The document that defines the objectives of the company.

Answer:

1. Certificate of Incorporation
2. Articles of Association
3. Memorandum of Association

Question 24.
Name the following documents.

1. The document issued by the company to the public to invite them to subscribe its share capital.
2. The document that binds a member with the company, company with members and members with members.
3. The document that contains rules for internal management of the company.
4. The document that specifies the aims of the company.
5. The document issued by the public company which does not want to issue a prospectus.

Answer:

1. Prospectus
2. Articles of Association
3. Articles of Association
4. Memorandum of Association
5. Statement in lieu of Prospectus

Plus One Formation of a Company Two Mark Questions and Answers

Question 1.
Name the stages in the formation of a company?
Answer:

1. Promotion
2. Incorporation
3. Capital subscription
4. Commencement of business (2)

Question 2.
Name the stages in the formation of a company. (2)
Answer:

1. Promotion
2. Incorporation
3. Commencement of business

Question 3.
What do you mean by promotion? (2)
Answer:
The identification of business opportunities, analysis of its prospects and initiating steps to form a joint stock company is called promotion.

Question 4.
For incorporating a private limited company, Deepthi Pvt. Ltd., the directors submit all relevant documents to the registrar of company except Articles of Association. But the registrar insists that, registration will not be granted without filing Articles of Association. But the directors of Deepthi Pvt. Ltd., argue that the provisions of ‘Table A’ can be adopted in the absence of Articles of Association. Whose argument is correct? Justify your answer. (2)
Answer:
The argument of the Company Registrar is right because filing of Articles of association is compulsory for Pvt. Ltd company by shares.

Question 5.
Arya Ltd. commences its business immediately on getting the certificate of incorporation. The registrar of companies serves a notice to them for remitting a fine of ₹500 for everyday of its operation. Is it legally enforceable? Give your suggestion. (2)
Answer:
Yes. Public Ltd. Company can commence business only after getting the certificate of commencement of business.

Question 6.
It is proposed to conduct a seminar on the topic ‘important documents in the formation of joint stock company’ in your class. You are selected as the leader of one of the groups and are directed to submit a seminar paper for the same. Suggest valuable points that should be included in the paper. (2)
Answer:

1. Memorandum of Association
2. Articles of Association
3. Prospectus

Question 7.
What do you mean by Minimum Subscription? (2)
Answer:
Minimum subscription is the minimum amount of shares that must be subscribed by the public. This amount is stated in the prospectus. A company can allot shares only after receiving minimum subscription.

Question 8.
I lay down the charter or the constitution of the company. I define the object and powers of the company.

1. Identify who am I?
2. Also name my companion who provides rules and regulations for the internal management of the company. (Both are two documents). (2)

Answer:

1. Memorandum of Association
2. Articles of Association

Plus One Formation of a Company Three Mark Questions and Answers

Question 1.
Is it necessary for a public company to get its shares listed on a stock exchange? What happens if a public company fails to get the permission from stock exchange? (3)
Answer:
Yes. A public company must list its shares with at least any one of the stock exchange for the allotment of shares. Therefore, the promoters must apply in a stock exchange for permission to deal in its shares or debentures. If permission is not granted before the expiry of ten weeks from the date of Closure of subscription list, the allotment shall become void and the application money must be returned to the applicants within eight days.

Question 2.
State the difference between certificate of incorporation and certificate of commencement of business. (3)
Answer:
Certificate of Incorporation gives legal status to the company. It is also known as birth certificate of the company. But certificate of commencement of business allows to start the operation.

These two certificates are required by the public limited company, but in case of private limited company only certificate of Incorporation is required to start the operation.

Question 3.
Nisha, Shani and Sheena are promoters of a public company. But they do not want to raise capital by approaching the public. They decide to raise capital by issuing shares to a few persons. Is it possible? If yes, what document is used for raising capital? (3)
Answer:
Yes. They can raise capital by issuing shares to a few persons. For this they can issue Statement in lieu of prospectus.

Plus One Formation of a Company Four Mark Questions and Answers

Question 1.
Identify the documents required for commencing business for the following companies. (4)

1. Athira Pvt. Ltd.
2. Aditya Ltd.

Answer:
1. Athira Pvt. Ltd – A private company must file the following documents for commencing business

• Certificate of incorporation
• Statutory declaration duly verified by one of the directors.

2. Aditya Ltd., a public company, must file the following documents for commencing business.

• Certificate of incorporation
• Certificate of commencement of business
• Prospectus
• Statutory declaration duly verified by one of the directors.

Question 2.
The details of a proposed private company having limited liability is given below. You are required to identify as to which clauses in the Memorandum of Association have to be rightly inserted. (4)
Proposed names:
Mahatma Gandhi Khadi – Company
Premier Mills (P) Ltd.
Kerala Government Khadi Company
Sobha Co-operative Company
Maximum capital which can be collected is 20 lakhs rupees
Nature of shares
Equity shares at Rs. 10/- share

Address:
Pushpa Nivas Kodunganoor (P.O)
Thiruvananthapuram 13
Kerala State
India.

Nature of business:
To produce Khadi clothes through machine To stitch Khadi ready wears Name of the persons who are wishing to form the company
P. Sudarsanan
K. Muraleedharan Nair
S. Renjith
Answer:

1. Name clause
2. Capital clause
3. Situation clause
4. Object clause
5. Association clause

Plus One Formation of a Company Five Mark Questions and Answers

Question 1.
“Promoter would be personally liable for the preliminary contracts, if they are not ratified by the company after incorporation. Analyse the statement. (5)
Answer:
Promotion:
Promotion is the first stage in the formation of a company. The identification of business opportunities, analysis of its prospects and initiating steps to form a joint stock company is called promotion. The person who undertakes to form a company is called promoter.

Functions of a Promoter:

1. Identification of business opportunity:
The first and foremost activity of a promoter is to identify a business opportunity.

2. Feasibility studies:
After identifying a business opportunity, the promoters undertake some feasibility studies to determine the viability and profitability of the proposed activity.

• Technical feasibility – To determine whether the raw materials or technology is easily available
• Financial feasibility – To determine the total estimated cost of the project
• Economic feasibility – To determine the I profitability of the proposed project

3. Name approval:
After selecting the name of company the promoters submit an application to the Registrar of companies for its approval. The selected name is not the same or identical to an existing company.

4. Fixing up signatories to the Memorandum of Association:
Promoters have to decide about the members who will be signing the Memorandum of Association of the proposed company.

5. Appointment of professional:
Promoters appoint merchant bankers, auditors etc. to assist them in the preparation of necessary documents.

6. Preparation of necessary documents:
The promoters prepare certain legal documents which are to be submitted to the Registrar of companies. They are

• Memorandum of Association
• Articles of Association,
• Consent of proposed Directors
• Agreement, if any, with proposed managing or whole time director
• Statutory declaration

Position of Promoters:
The promoter is neither an agent nor a trustee of the company. The promoter stands in the fiduciary relationship with the company. He should not make any secret profits out of the dealings. Any, such gains are to be disclosed. The promoter must act honestly, in good faith and in the best interest of the company.

The promoter is personally liable for all the preliminary contracts with the other parties before incorporation. The promoter is also liable for any omission of facts or false statements in the prospectus.

Question 2.
Memorandum of Association is the charter or magna carta of the company. Elucidate the statement. (5)
Answer:
Memorandum of Association:
It is the charter or magnacarta of the company. It defines the objects of the company and provides the framework beyond which the company cannot operate. It lays down the relationship of the company with outside world.

Memorandum of Association must be printed, divided into paragraphs, numbered consecutively. The Memorandum of Association must be signed by at least seven persons in case of a public company and by two persons in case of a private company.

Contents of Memorandum of Association

1. The name clause:
Under this clause the name of the company is mentioned. A company can select any name subject to the following restrictions.

• The proposed name should not be identical with the name of another company
• A name which can mislead the public
• In case of a public company the name should end with the word ‘Limited’ and in case of a private company the name should end with the word ‘Private Limited’
• The name must not directly or indirectly imply any participation of the Central or State Govt.
• The name must not suggest any connection or patronage of a national hero
• It should not include the word cooperative.

2. Registered office clause:
This clause contains the name of the state, in which the registered office of the company is proposed to be situated. It must be informed to the Registrar within thirty days of the incorporation of the company.

3. Objects clause:
This is the most important clause of the memorandum. It defines the purpose for which the company is formed. A company is not legally entitled to undertake an activity, which is beyond the objects stated in this clause.

4. Liability clause:
It states that the liability of members is limited to the face value of shares held by them or the amount guaranteed to be paid on winding up.

5. Capital clause:
This clause specifies the maximum capital which the company will be authorised to raise through, the issue of shares.

6. Association clause:
In this clause, the signatories to the Memorandum of Association state their intention to be associated with the company and also give their consent to purchase qualification shares.

Question 3.
Explain the contents of prospectus. (5)
Answer:
Prospectus:
Prospectus is a document issued by the public companies inviting the public to subscribe for shares or debentures of the company. It contains all information regarding the company’s affairs and its future prospects. A prospectus must be dated and signed by all the directors. A copy of the prospectus must be filed with Registrar before it is issued to public.

Contents of prospectus

1. Name and address of the registered office of the company.
2. Main objects of the company.
3. Classes of shares and debentures.
4. Name, address and occupation of the signatories to the memorandum.
5. Details of the borrowing powers of the company.
6. Name, address and occupation of the directors and managing director.
7. Name and address of the promoters.
8. Minimum subscription.
9. Time of opening and closing of subscription.
10.  The amount payable on application and allotment of each class of shares.
11.  Name of underwriters.
12.  Details of preliminary expenses.
    Companies which do not want to issue a prospectus may submit a statement in lieu of prospectus to the Registrar of Companies. It is a copy of the prospectus but is not issued to the public.

Question 4.
The details of a proposed limited company are given below. You are required to identify them as to which clause of the memorandum of association they have to be inserted. (5)

1. Proposed name: Jnana Construction Company Ltd
2. Maximum Capital: ₹10,00,000
3. Registered office: Kollam
4. Nature of liability: Limited
5. Nature of Business: Construction company
6. Names of promoters: Jnana, Akshara, Pooja, Ajay

Answer:

1. Name clause
2. Capital clause
3. Situation / Domicile clause
4. Liability clause
5. Object clause
6. Association clause

Question 5
A public company can commence business only after getting the certificate of commencement of business. Abhijith, a plus two student wants to know the conditions to be fulfilled to obtain the certificate of commencement of business.
Answer:

Commencement of Business:
A public company can commence business only after getting certificate of commencement of business from the Registrar. The company must file the following documents to obtain the certificate of commencement of business.

1. Declaration that the minimum subscription has been received in cash to allot shares.
2. A declaration that all directors have taken up and paid for their qualification shares
3. A statutory declaration stating that necessary legal formalities have been complied with has to be filed.

The Registrar shall examine these documents. If these are found satisfactory, a ‘Certificate of Commencement of Business’ will be issued. This certificate is conclusive evidence that the company is entitled to do business. With the grant of this certificate the formation of a public company is complete and the company can legally start doing business.
Documents used in the formation of a company

Plus One Formation of a Company Six Mark Questions and Answers

Question 1.
I govern the internal affairs of the company. Explain who am ‘I’? List out my contents.
OR
For the purpose of registering a new company, the promoter requires a document containing the rules and regulations governing its internal affairs. (6)

1. What is that document? Explain.
2. State the contents of this statement.

Answer:
Articles of Association:
The Articles of Association is the second important document of a company. The Articles define the rights, duties and powers of the officers and the Board of directors. It contains the rules regarding internal management of the company. It shows the relationship between the company and its members.

Contents of Articles of Association:

1. The share capital of the company and its division.
2. Rights of each class of shareholders.
3. Details of contracts made with different parties.
4. Procedure for making allotment of shares.
5. Procedure for issuing share certificate.
6. Procedure for transfer and transmission of shares.
7. Procedure for forfeiture and reissue of shares.
8. Procedure for conducting meetings, voting, proxy and poll
9. Procedure for appointing, removal and remuneration of directors.
10. Procedure for declaration of and payment of dividend.
11. Keeping books of account and audit of the company.
12. Procedure regarding alteration of share capital.
13. Procedure regarding winding up of the company.

Table A:
A public limited company may adopt Table A which is a model set of articles given in the Companies Act. Table A is a document containing rules and regulations for the internal management of a company. If a company adopts Table A, there is no need to prepare separate Articles of Association.

Question 2.
Vishnu, a promoter of a public company, approaches you to get information relating to raising of capital from public. As a commerce student mention the document required for inviting the public to purchase or subscribe to its shares and debentures. Explain. (6)
Answer:
Prospectus:
Prospectus is a document issued by the public companies inviting the public to subscribe for shares or debentures of the company. It contains all information regarding the company’s affairs and its future prospects. A prospectus must be dated and signed by all the directors. A copy of the prospectus must be filed with Registrar before it is issued to public.

Contents of prospectus:

1. Name and address of the registered office of the company.
2. Main objects of the company.
3. Classes of shares and debentures.
4. Name, address and occupation of the signatories to the memorandum.
5. Details of the borrowing powers of the company.
6. Name, address and occupation of the directors and managing director.
7. Name and address of the promoters.
8. Minimum subscription.
9. Time of opening and closing of subscription.
10. The amount payable on application and allotment of each class of shares.
11. Name of underwriters.
12. Details of preliminary expenses.

Companies which do not want to issue a prospectus may submit a statement in lieu of prospectus to the Registrar of Companies. It is a copy of the prospectus but is not issued to the public.

Question 3.
It is often said that Memorandum of Association and Articles of Association are the first and second important documents of a company. As a commerce student can you differentiate between these two documents? (6)
Answer:

Plus One Formation of a Company Eight Mark Questions and Answers

Question 1.
Explain the steps in the incorporation of a company. (8)
Answer:
Incorporation:
A company comes into existence only when it is registered with the Registrar of Companies. For this purpose the promoter has to take the following steps:
Steps for Incorporation

1. Application for incorporation:
Promoters make an application for the incorporation of the company to the Registrar of companies.

2. Filing of documents:
The following documents must be filed with the Registrar of Companies for incorporation.

• The Memorandum of Association duly stamped, signed and witnessed
• Articles of Association duly stamped, signed and witnessed
• Written consent of the proposed directors
• Agreement, if any, with proposed managing or whole time director
• A copy of the Registrar’s letter approving the name of the company.
• Statutory declaration
• A notice about the exact address of the registered office.
• Documentary evidence of payment of registration fees.

The Registrar verifies the entire document submitted. If he is satisfied then he enters the name of the company in his Register. After the registration, the Registrar issues a Certificate called Certificate of Incorporation. This is called the birth certificate of the company. With effect from November 1, 2000, the Registrar of Companies allots a CIN (Corporate Identity Number) to the Company.

Effect of the Certificate of Incorporation:
Certificate of Incorporation is the conclusive evidence of the legal existence of the company. A private company can commence its business after receiving Certificate of Incorporation. The certificate of incorporation is the birth certificate of the company.

Question 2.
Explain the contents of Memorandum of Association.

Answer:
Memorandum of Association: It is the charter or magnacarta of the company. It defines the objects of the company and provides the framework beyond which the company cannot operate. It lays down the relationship of the company with outside world.

Memorandum of Association must be printed, divided into paragraphs, numbered consecutively. The Memorandum of Association must be signed by at least seven persons in case of a public company and by two persons in case of a private company.

Contents of Memorandum of Association:

1. The name clause:
Under this clause the name of the company is mentioned. A company can select any name subject to the following restrictions.

• The proposed name should not be identical with the name of another company
• A name which can mislead the public
• In case of a public company the name should end with the word ‘Limited’ and in case of a private company the name should end with the word ‘Private Limited’
• The name must not directly or indirectly imply any participation of the Central or State Govt.
• The name must not suggest any connection or patronage of a national hero
• It should not include the word co operative.

2. Registered office clause:
This clause contains the name of the state, in which the registered office of the company is proposed to be situated. It must be informed to the Registrar within thirty days of the incorporation of the company.

3. Objects clause:
This is the most important clause of the memorandum. It defines the purpose for which the company is formed. A company is not legally entitled to undertake an activity, which is beyond the objects stated in this clause.

4. Liability clause:
It states that the liability of members is limited to the face value of shares held by them or the amount guaranteed to be paid on winding up.

5. Capital clause:
This clause specifies the maximum capital which the company will be authorised to raise through, the issue of shares.

6. Association clause:
In this clause, the signatories to the Memorandum of Association state their intention to be associated with the company and also give their consent to purchase qualification shares.

Question 3.
Mr. Hemand, a Gulf returnee, intends to start a business in the form of private limited company. But he lias no clear idea about the business opportunities in Kerala and the formalities to be followed in the formation of company. (8)

1. As a commerce student can you suggest a specialised person who would undertake all activities for the formation of a company?
2. Explain the functions of those specialised persons.

Answer:

Promotion:
Promotion is the first stage in the formation of a company. The identification of business opportunities, analysis of its prospects and initiating steps to form a joint stock company is called promotion. The person who undertakes to form a company is called promoter.

Functions of a Promoter:

1. Identification of business opportunity:
The first and foremost activity of a promoter is to identify a business opportunity.

2. Feasibility studies:
After identifying a business opportunity, the promoters undertake some feasibility studies to determine the viability and profitability of the proposed activity.

• Technical feasibility – To determine whether the raw materials or technology is easily available
• Financial feasibility – To determine the total estimated cost of the project
• Economic feasibility – To determine the I profitability of the proposed project

3. Name approval:
After selecting the name of company the promoters submit an application to the Registrar of companies for its approval. The selected name is not the same or identical to an existing company.

4. Fixing up signatories to the Memorandum of Association:
Promoters have to decide about the members who will be signing the Memorandum of Association of the proposed company.

5. Appointment of professional:
Promoters appoint merchant bankers, auditors, etc. to assist them in the preparation of necessary documents.

6. Preparation of necessary documents:
The promoters prepare certain legal documents which are to be submitted to the Registrar of companies. They are

• Memorandum of Association
• Articles of Association,
• Consent of proposed Directors
• Agreement, if any, with proposed managing or whole time director
• Statutory declaration

Position of Promoters:
The promoter is neither an agent nor a trustee of the company. The promoter stands in the fiduciary relationship with the company. He should not make any secret profits out of the dealings. Any, such gains are to be disclosed. The promoter must act honestly, in good faith and in the best interest of the company.

The promoter is personally liable for all the preliminary contracts with the other parties before incorporation. The promoter is also liable for any omission of facts or false statements in the prospectus.

Students can Download Chapter 6 Social Responsibilities of Business and Business Ethics Questions and Answers, Plus One Business Studies Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examination

Kerala Plus One Bussiness Studies Chapter Wise Questions and Answers Chapter 6 Social Responsibilities of Business and Business Ethics

Plus One Social Responsibilities of Business and Business Ethics One Mark Questions and Answers

Question 1.
Identify which of the following is not a social responsibility of business _________
1. Offering goods and services at reasonable price.
2. Keeping environment pollution free
3. Giving reasonable pay to workers
4. Help in nation building activities
Answer:
3. Giving reasonable pay to workers

Question 2.
State Bank of India gives scholarship to bright students each year. This is a part of their __________
1. Sales promotion
2. Social responsibility
3. Charity work
4. Business ethics
Answer:
2. Social responsibility

Question 3.
Application of general ethics and principles in business practice is ____________
Answer:
Business ethics

Question 4.
It is the belief in what is right, proper and just. Identify it.
Answer:
Business ethics

Question 5.
______________ is the code of conduct followed and performed by businessmen.
Answer:
Business ethics

Question 6.
Which among the following is not a case for an ethical activity.
1. child labour
2. equal pay for equal work
3. dumbing of waste in river
4. high usage of preservatives in products.
Answer:
2. Equal pay for equal work

Plus One Social Responsibilities of Business and Business Ethics Two Mark Questions and Answers

Question 1.
Roy and Rejitha joined in a factory as peons on the same day. Both of them are doing 8 hrs work a day. Roy is paid ₹100 while Rejitha ₹80 per day. Do you think the owner of the factory is fair to Rejitha? If not, give your opinion. (2)
Answer:
No. The owner of the factory is not fair to Rejitha. It is the social and moral responsibility of the business to offer equal pay for equal work without considering any caste, sex, etc.

Question 2.
Explain the need for pollution control. (2)
Answer:
Need for Pollution Control:

1. Reduction of health hazard:
Pollution control measures can check diseases like cancer, heart attack & lung complications and support a healthy life on earth.

2. Reduced Risk of Liability:
It is a sound business policy to install pollution control devices in its premises to reduce the risk of liability of paying compensation to the affected people.

3. Cost Saving:
An effective pollution control programme is needed to save costs of operating business.

4. Improved Public Image:
A firm that adopts pollution control measures enjoys a good reputation as a socially responsible enterprise.

5. Other social benefits:
Pollution control results in many other benefits like clearer visibility, cleaner buildings, better quality of life, and the availability of natural products in a purer form.

Plus One Social Responsibilities of Business and Business Ethics Three Mark Questions and Answers

Question 1.
George is working in a manufacturing industry. The manager compels him to do 10hrs work continuously without giving any additional benefits. Do you agree with the manager? Give your suggestions. (3)
Answer:
No. We cannot agree with the decision of the manager. It is against the social responsibility of the business. George has to work only 8 hours a day. Compelling to do 10 (without any additional benefits) hours is a violation of human right. Managers cannot ask a worker to do work continuously without giving remuneration. It is also a violation of human rights.

Plus One Social Responsibilities of Business and Business Ethics Four Mark Questions and Answers

Question 1.
Match column A with columns B and C

Answer:

Question 2.
Jaleel, owner of a fish stall, usually sells damaged and decayed fish by pouring chemicals, ice, along with sea sand for creating an impression in the minds of consumers that it is newly caught. Is it justifiable from the point of view of business ethics? How will it affect the reputation of the business? (4)
Answer:
Business ethics refer to the socially determined moral principles which should govern business activities.
A few examples of business ethics are

• charging fair prices from customers
• providing quality products
• using fair weights for measurement of commodities
• giving fair treatment to workers & earning only reasonable profits.

Ethical business behaviour improves public image, earns people’s confidence and trust, and leads to greater success. Selling damaged and decayed fish is unethical.

It will affect the reputation of the business and finally it leads to business loss. He must not goods of low quality for personal gain. No business can make progress without adopting ethical values.

Plus One Social Responsibilities of Business and Business Ethics Five Mark Questions and Answers

Question 1.
Anchu, a stationery dealer distributed good quality products at low price by suffering huge losses, in order to eliminate the competition from Chinju, another stationery dealer, in the same locality. When Chinju stopped her business, Anchu started to supply low quality products at high price. (5)

1. Can you justify Anchu’s action from point of view of the society?
2. Give a few undesirable practices which a business follow in a real life situation.

Answer:
1. No. We cannot justify Anchu’s action. It is against business ethics. Business ethics refers to moral values which should be followed in business activities.

2. Examples of unethical practices are

• Providing low quality products at high prices.
• Making misleading advertisements.
• Creating artificial scarcity to increase demand.
• Keeping false accounts to avoid paying taxes.
• Acceptance of bribe for personal benefits.
• Manufacture and sale of adulterated goods.
• Polluting the environment.
• Exploiting workers.

Plus One Social Responsibilities of Business and Business Ethics Six Mark Questions and Answers

Question 1.
What steps can an enterprise take to protect the environment from the dangers of pollution? (6)
Answer:
Role of Business in Environmental Protection:

1. A definite commitment by top management to create a work culture for environmental protection

2. Ensuring that commitment of environmental protection is shared throughout the enterprise by all divisions and employees.

3. Developing clear cut policies and programmes for purchasing good quality raw materials, introducing superior technology, using scientific techniques of disposal of waste and developing employee skills for pollution control

4. Complying with the laws and regulations enacted by the Government for prevention of pollution.

5. Participation in government programs relating to management of hazardous substances, cleaning up of polluted rivers, plantation of trees, and checking deforestation.

6. Periodical assessment of pollution control programmes in terms of costs and benefits with a view to improve them.

7. Arranging educational workshops and training materials to share technical information with everyone involved in pollution control.

Question 2.
Explain the elements of business ethics. (6)
Answer:
Business Ethics:
Ethics is concerned with what is right and what is wrong in human behavior. Business ethics refer to the socially determined moral principles which should govern business activities.

Business ethics is the code of conduct followed and performed by every business. Ethical business behavior improves public image earn’s public confidence and leads to greater success.
Examples of Business Ethics:

1. Charging fair prices from customers
2. Using fair weights for measurement of commodities
3. Giving fair treatment to workers
4. Earning reasonable profits.
5. Avoiding adulteration, hoarding etc.
6. Using environmentally friendly products

Elements of Business Ethics:

1. Top management commitment:
The Chief Executive Officer and higher level managers must give continuous leadership for developing and upholding the moral values of the organisation.

2. Publication of a Code:
‘Code’ refers to a formal written document of the principles, values and standards that guide a firm’s actions. It may cover the areas of fundamental honesty and adherence to laws, product safety and quality, health and safety in the workplace, etc.

3. Establishment of Compliance Mechanism:
A suitable mechanism should be developed to comply with the ethical standards of the enterprise.

4. Employees Involvement:
To make ethical business a reality, employees at all levels must be involved.

5. Measuring Results:
Ethical results must be verified and audited that how far work is being carried according to ethical standards.

Plus One Social Responsibilities of Business and Business Ethics Eight Mark Questions and Answers

Question 1.
Build up arguments for and against social responsibilities. (8)
Answer:
Arguments in favour of Social Responsibility:

1. Justification for Existence and Growth:
The prosperity and growth of business is possible only through continuous service to society.

2. Long term Interest of the firm:
A firm can improve its image and builds goodwill in the long run when its highest goal is to serve the society.

3. Avoidance of government regulations:
Business can avoid the problem of government regulations by voluntarily assuming social responsibilities.

4. Maintenance of society:
Law alone can’t help out people with all the difficulties they face. A socially responsible business can contribute something for social peace and harmony.

5. Availability of resources with business:
Business has valuable financial and human resources which can be effectively used for solving problems of the society.

6. Better environment for doing business:
Social responsibility creates better environment for business operations as it improves quality of life and standard of living of the people.

7. Contribution to social problems:
Some of the social problems have been created by business firms themselves such as pollution, unsafe workplaces, discrimination, etc. Therefore, it is the moral obligation of business to solve such social problems.

Arguments Against Social Responsibility:

1. Violation of profit maximization objective:
According to this argument, business exists only for the maximum profit to its shareholders and do not have responsibility to the society as a whole.

2. Burden on consumers:
Involvement of business in social responsibilities involve a lot of expenditure which will ultimately be borne by the customers.

3. Lack of Social Skills:
The business firms and managers are not expert to tackle the social problems like poverty, overpopulation etc.

4. Lack of public support:
Business cannot fulfill social responsibility because of lack of public confidence & cooperation.

Question 2.
Mr. Biju, a readymade garment manufacturer, is of the view that “different interest groups always claim some sort of protection from the business as such. These interest groups, no doubt consist of persons connected with business in one way or other, such as shareholders, employees, society and so on”. Do you agree with this statement? Explain. (8) 

OR

“Business is a social institution having responsibilities towards different interest group.” Do you agree. Explain the responsibility towards each group.
Answer:
Social Responsibility towards different interest groups

1. Responsibility towards share holders or owners:

1. Provide a fair and regular return on the investment of shareholders.
2. Provide regular and accurate information on the financial position of the firm.
3. To ensure the safety of their investment.

2. Responsibility Towards the workers:

1. Providing fair wages
2. Providing good working conditions and welfare amenities.
3. Respect democratic rights of workers to form
   unions.

3. Responsibility toward consumers:

1. Supply right quality and quantity of goods and services at reasonable prices.
2. Avoiding unfair trade practices like adulteration, poor quality, misleading advertisement etc.
3. Inform them about new products, its features, uses and other matters relating to the products.
4. To handle the customers grievance promptly.

4. Responsibility Towards Government:

1. Respect the laws of the country
2. Pay taxes regularly and honestly.
3. act according to the well accepted values of the society.

5. Responsibility towards community:

1. Make employment opportunities
2. Protect the environment from pollution.
3. To uplift the weaker sections of society

Question 3.
Prosperity and higher living standards are the hallmarks of industrial development for any nation. But during this course, it equally causes damages to the environment. (8)

1. Explain the different types of pollution.
2. Substantiate the above statement with regard to various types of pollution.

Answer:

Business & Environmental Protection Causes of Pollution: Many industrial organisations have been responsible for causing air, water, land and noise pollution.

1. Air Pollution:
Air pollution is mainly due to Carbon monoxide emitted by automobiles and smoke and other chemicals from manufacturing plants. It has created a hole in the ozone layer leading to global warming.

2. Water pollution:
Water becomes polluted primarily from chemical and waste dumping. It has led to the death of several animals and posed a serious problem to human life.

3. Land Pollution:
Dumping of toxic wastes reduces the quality of land and making it unfit for agriculture or plantation.

4. Noise Pollution:
Noise caused by the running of factories and vehicles create a serious health hazard such as loss of hearing, malfunctioning of the heart and mental disorders.

Question 4.
Explain the role of business in environmental protection. (8)
Answer:
Role of Business in Environmental Protection:

1. A definite commitment by top management to create a work culture for environmental protection
2. Ensuring that commitment of environmental protection is shared throughout the enterprise by all divisions and employees.
3. Developing clear cut policies and programmes for purchasing good quality raw materials, introducing superior technology, using scientific techniques of disposal of waste and developing employee skills for pollution control
4. Complying with the laws and regulations enacted by the Government for prevention of pollution.
5. Participation in government programs relating to management of hazardous substances, cleaning up of polluted rivers, plantation of trees, and checking deforestation.
6. Periodical assessment of pollution control programmes in terms of costs and benefits with a view to improve them.
7. Arranging educational workshops and training materials to share technical information with everyone involved in pollution control.

Students can Download Chapter 5 Emerging Modes of Business Questions and Answers, Plus One Business Studies Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Bussiness Studies Chapter Wise Questions and Answers Chapter 5 Emerging Modes of Business

Plus One Emerging Modes of Business One Mark Questions and Answers

Question 1.
Carrying business activity through internet is popularly known as _______
Answer:
E-commerce

Question 2.
____________ refers to illegal entry into the web site of an enterprise and thereby damaging data input there.
Answer:
Hacking

Question 3.
____________ are programmes designed to corrupt data in a system.
Answer:
Viruses

Question 4.
Mr. Arun, a retailer pays tax online. Identify this E-Commerce Transaction
Answer:
C2G

Question 5.
Which of the following helps to purchase goods and services without making spot payments and zero balance in the account?

1. ATM card
2. credit card
3. debit card
4. Kisan card

Answer:
2. credit card

Question 6.
The advancement of technology helps people for shopping goods for cash without holding cash or making any deposits with banks. How is it possible explain the identified term?
Answer:
Credit card

Plus One Emerging Modes of Business Two Mark Questions and Answers

Question 1.
What do you mean by cryptography? (2)
Answer:
It refers to the art of protecting information by transforming it into an unreadable format called ‘cyphertext’. Only those who processes a secret key can decrypt the message into plaintext.

Question 2.
What are the ethical concerns involved in outsourcing? (2)
Answer:
In the name of cost cutting, unlawful activities such as child labour, wage discrimination, etc. may be encouraged in other countries.

Plus One Emerging Modes of Business Three Mark Questions and Answers

Question 1.
Anish, an NRI businessman, sends money to his wife, Nisha. She in turn deposits all this money in her bank account. She is very thankful to the technology and can withdraw money whenever she is in need of money even after banking hours. What type of technology she might be using? Explain. (3)
Answer:
ATM. From the ATM, customers can withdraw cash from the account by using ATM card. ATM card is a plastic card bearing a number for each customer. The card is to be entered into the machine and enter the PIN. This opens the account and we can deposit cash into it or withdraw from it at any time.

Question 2.
The advancement of technology facilitates shopping -goods for cash without holding cash or making any deposit with banks. How is it possible? (3)
Answer:
It is possible through credit card. A credit card is an instrument issued by a bank in the name of the customer providing for credit up to a specified amount. The sellers get cash from the bank and the buyers have to pay for the purchase within the credit period.

Question 3.
Majority of people in India, even internet users, hesitate shopping through internet. Can you cite a few reasons for their hesitation for buying online? (3)
Answer:
The important reasons forthe hesitation of shopping through internet are:

1. Time to deliver goods is too long.
2. Disclosure of credit card details is not safe.
3. Choices are not very interesting.

Plus One Emerging Modes of Business Four Mark Questions and Answers

Question 1.
Elaborate the steps involved in online trading. (4)
Answer:
Online Transactions:
Online transaction means receiving information about goods, placing an order, receiving delivery and making payment through medium of internet.

Buying / Selling Process:

Steps involved in online purchase:
1. Register with the online vendor by filling-up a registration form.

2. Place the order for the items put by customer in his virtual shopping cart, an online record of what has been picked up while browsing the Online store.

3. Payment for the purchases through online shopping may be done in a number of ways: i.e Cash on delivery, cheque, net banking transfer, debit/credit card.

Question 2.
Name the resources required for E-commerce. (4)
Answer:
Resources Required for Successful e-Business Implementation:

1. Computer system
2. Internet connection and technically qualified workforce
3. A well developed web page
4. Effective telecommunication system
5. A good system for making payment using credit instruments.

Question 3.
Explain any 4 types of outsourcing services. (4)
Answer:

1. Financial services.
2. Advertising services
3. Courier services
4. Customer support services

Plus One Emerging Modes of Business Five Mark Questions and Answers

Question 1.
List two examples each for B2B, B2C, B2G and B2E transactions (5)
Answer:
B2B:

• Transactions between businessmen
• Collaboration
• Placing order with suppliers
• Forming joint ventures
• Transfer of goods between branches
• Transfer of goods between suppliers

B2C:

• Business offering services to customers
• Consumer placing order online
• Electronic payment
• Consumers seeking clarification on price, terms etc. (any two)

B2G:

• Payment of taxes
• Application for licence
• Seeking government clearance

B2E:

• Employees salary payments
• Operation of welfare schemes
• Information to employees on business process
• Seeking employees suggestions online

Question 2.
Sankar and Co is a leading can manufacturing company. They are not concentrating on their advertisement due to lack of time. In orderto boost up the sales they made a contract with an advertising agency to make an advertisement which can be released through the media. Analyze this situation. Do you favour this activity of the company? Can you identify the concept and brings out its merit? (5)
Answer:
Business Process Outsourcing (BPO)

Plus One Emerging Modes of Business Six Mark Questions and Answers

Question 1.
State any three differences between e-business and traditional business.
Answer:

Outsourcing or Business Process Outsourcing (BPO):
Outsourcing is a management strategy by which an organisation contracts out its major non-core functions to specialized service providers with a view to benefit from their expertise, efficiency and cost effectiveness, and allow managers to concentrate on their core activities.

Merits of outsourcing:

1. It provides an opportunity to the organisation to concentrate on areas in which it has core competency or strength.
2. It helps better utilisation of its resources as the management can focus its attention on selected activities and attain higher efficiency.
3. It helps the organisation to get an expert and specialised service at competitive prices. It helps in improved service and reduction in costs.
4. It facilitates inter-organisational knowledge sharing and collaborative learning.
5. It enables expansion of business as resources saved from outsourcing can be used for expanding the production capacity and diversified products.

Limitations of outsourcing:

1. It reduces confidentiality as outsourcing involves sharing a lot of information with others.
2. It may be opposed by labour unions who feel threatened by possible reduction in their employment.
3. In the name of cost cutting, unlawful activities such as child labour, wage discrimination maybe encouraged in other countries.
4. The organisation hiring others may face the problem of loss of managerial control because it is more difficult to manage outside service providers than managing one’s own employees.
5. It causes unemployment in the home country.

Question 2.
Evaluate the need for outsourcing and discuss its limitations. (6)
Answer:
Outsourcing or Business Process Outsourcing (BPO):
Outsourcing is a management strategy by which an organisation contracts out its major non-core functions to specialized service providers with a view to benefit from their expertise, efficiency and cost effectiveness, and allow managers to concentrate on their core activities.

Merits of outsourcing:

1. It provides an opportunity to the organisation to concentrate on areas in which it has core competency or strength.
2. It helps better utilisation of its resources as the management can focus its attention on selected activities and attain higher efficiency.
3. It helps the organisation to get an expert and specialised service at competitive prices. It helps in improved service and reduction in costs.
4. It facilitates inter-organisational knowledge sharing and collaborative learning.
5. It enables expansion of business as resources saved from outsourcing can be used for expanding the production capacity and diversified products.

Limitations of outsourcing:

1. It reduces confidentiality as outsourcing involves sharing a lot of information with others.
2. It may be opposed by labour unions who feel threatened by possible reduction in their employment.
3. In the name of cost cutting, unlawful activities such as child labour, wage discrimination maybe encouraged in other countries.
4. The organisation hiring others may face the problem of loss of managerial control because it is more difficult to manage outside service providers than managing one’s own employees.
5. It causes unemployment in the home country.

Question 3.
What is online transactions? Explain its steps. (6)
Answer:
On line Transactions:
On line transaction means receiving information about goods, placing an order, receiving delivery and making payment through medium of internet.

Buying / Selling Process:

Steps involved in online purchase:

1. Register with the online vendor by filling-up a registration form.
2. Place the order for the items put by customer in his virtual shopping cart, an on-line record of what has been picked up while browsing the On-line store.
3. Payment for the purchases through online shopping may be done in a number of ways: i.e Cash on delivery, cheque, net banking transfer, debit/credit card.

Students can Download Chapter 4 Business Services Questions and Answers, Plus One Business Studies Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Bussiness Studies Chapter Wise Questions and Answers Chapter 4 Business Services

Plus One Business Services One Mark Questions and Answers

Question 1.
Name the type of account opened in a bank with an over draft facility
Answer:
Current Account

Question 2.
DTH services are provided by
Answer:
Cellular companies

Question 3.
CWC Stands for
Answer:
Central warehousing corporation

Question 4.
Mr. James running a software development business, incur heavy expenditure for replacement of computers due to updation in technology. To avoid this expenditure he may opt for
(a) Factoring
(b) Venture capital
(c) Leasing
(d) Merchant banking
Answer:
(c) Leasing

Question 5.
Name the type of account opened in the bank with overdraft facility
Answer:
Current account

Question 6.
Classify the following into appropriate categories SBI, Federal Bank, American Express Bank.
Answer:

• SBI – Public Bank
• Federal Bank – Private bank
• American Express bank – Foreign bank

Question 7.
Which among the following helps in issue management of shares,
(a) Mutual fund
(b) Merchant banks
(c) Venture Capital
(d) Factoring
Answer:
(b) Merchant banks

Question 8.
Classify the following bank into Appropriate Categories,

1. IDBI
2. HDFC
3. Axis Bank
4. Canara Bank
5. HSFC
6. CITI Bank

Answer:

1. IDBI – Private Bank
2. HDFC – Private Bank
3. Axis Bank – Public Bank
4. Canara Bank – Public Bank
5. HSFC – Private Bank
6. CITI Bank – Foreign Bank

Question 9.
Which facility allows a current account holder to withdraw more amount than his deposit?
Answer:
Overdraft

Question 10.
Which of the following is not applicable in life insurance contract?
(a) Conditional contact
(b) Unilateral contract
(c) Indemnity contract
(d) None of the above
Answer:
(c) Indemnity contract

Question 11.
When the same subject matter is insured with more than one insurer, it is called
Answer:
Double insurance

Question 12.
________ is a contract of insurance entered into by the insurer with another insurer to reduce the risk.
Answer:
Reinsurance

Question 13.
Rajiv insures his shop for ₹5,00,000 against fire. His shop is completely damaged by a mob attack. Rajiv claims ₹5,00,000/- from the insurance company.

1. Will the company admit the claim of Rajiv?
2. Which principle of insurance is applicable here?

Answer:

1. No.
2. Causa Proxima

Question 14.
Principle of indemnity does not apply to __________
(a) Life insurance
(b) Health insurance
(c) Fire insurance
(d) Marine insurance
Answer:
(a) Life insurance

Question. 15
I will give security against fraudulent practices of employees who deal with cash or other variables. Can you identify me? Explain its features?
Answer:
Fidelity insurance

Question 16.
Govind insures his shop for ₹6,00,000. in a fire accident. The shop incurred a loss of ₹3,00,000. But he claimed for the assured sum. Will the insurance co admit the claim in full? Identify the principle of insurance which is applicable here.
Answer:
No. Principle of indemnity

Question 17.
Life insurance is a contract of ________
Answer:
Guarantee

Question 18.
_______ principle states, the insurer step into the shoes of insured.
Answer:
Subrogation.

Question 19.
Jacob purchased a new car for ₹15,00,000 and insured it with National insurance company and Oriental Insurance Company for ₹15,00,000 each. On an accident, the car was damaged completely and he claimed compensation from both companies.

1. Can he get compensation from both companies?
2. Identify relevant principle of insurance.

Answer:

1. No
2. Principle of Contribution

Question 20.
According to _________ principle, the insured is not allowed to make any profit out of his loss.
Answer:
Indemnity

Question 21.
Rajan wants to take an insurance policy covering the risk arising from the dishonesty of employees. Which type to policy close he have to take?
Answer:
Fidelity insurance

Question 22.
__________ is a contract whereby the insurer, in consideration of premium, undertakes to compensate the insured for the loss or damage suffered due to fire.
Answer:
Fire insurance

Plus One Business Services Two Mark Questions and Answers

Question 1.
Define service and goods. (2)
Answer:
Services are those identifiable and intangible activities that provide satisfaction of wants. Goods is a physical product which can be delivered to a purchaser and involves the transfer of ownership from the seller to customer.

Question 2.
Explain various telecom services available for enhancing business. (2)
Answer:
The various types of telecom services are:

1. Cellular mobile services:
Mobile communication device including voice and non-voice messages, data services and PCO services utilising any type of network equipment within their service area.

2. Radio paging services:
It means of transmitting information to persons even when they are mobile.

3. Fixed line services:
It includes voice and non-voice messages and data services to establish linkage for long distance traffic.

4. Cable services:
Linkages and switched services within a licensed area of operation to operate media services which are essentially one way entertainment related services.

5. VSAT services (Very small Aperture Terminal):
It is a Satellite-based communication service. It offers government and business agencies a highly flexible and reliable communication solution in both urban and rural areas.

6. DTH services (Direct to Home):
It is a Satellite based media services provided by cellular companies with the help of small dish antenna and a set up box.

Question 3.
Mr. Dino is running a textile shop. He insured the shop for ₹1,00,000 against natural calamities. After this the shop was completely destroyed by fire due to electrics short circuit. He claimed for compensation. But the insurance company refused to admit the claim on the ground that the shop was insured against natural calamities. (2)

1. Can you justify the decision of insurance company.
2. Which principle of insurance is applicable here.

Answer:

1. Yes.
2. Causa proxima. It states that insurance company will admit the claim only if mishap has resulted directly by an event covered by under insurance.

Question 4.
Mr. Sabu is running a provision store. He insured the shop for ₹ 50,000 against fire. One day during course of business the shop caught fire and Mr. Sabu purposefully did not take any efforts to minimize the loss. He claimed for compensation. In this situation. (2)

1. What will be your decision assuming that you are the officer in charge of admitting the claims for insurance company?
2. Which principle is applicable here?

Answer:

1. The claim can not be admitted because the insurer did not take any reasonable steps to minimize the loss.
2. Principle of mitigation of loss

Question 5.
Why do we say that the principle of indemnity is not applicable to life insurance. Illustrate your answer. (2)
Answer:
The loss due to death of the insured cannot be measured in terms of money. So principle of indemnity is not applicable to Life insurance.

Question 6.
Mr. Sibi purchased a new car and it was completely damaged in an accident. Subsequently, he lodged a claim with the insurance company and the same was admitted. Later, the insurance company recovered the destroyed property. (2)

1. Why did the company take ownership of the car?
2. State the relevant principle. Explain.

Answer:

1. Ownership of the damaged car is vested with the insurance company.
2. According to the principle of subrogation, once the claim of the insured has been settled, the right of ownership of such property passes to .the insurer.

Question 7.
Mr. Anand your friend has started a new business. He decided to open a bank account with SBI. He has only a vague idea about the type of accounts available to the business people. So he seeks your help to choose the most favourable account for him. Give reason. (2)
Answer:
Mr. Anand can open current account. There is no restriction on the frequency and volume of deposits or withdrawals of money.

Question 8.
Match the following

Answer:

Plus One Business Services Three Mark Questions and Answers

Question 1.
Mr. Janardhanan, a business man, has a current a/c of ₹1,00,000 in the S.B.I. He is in need of another ₹50,000 for the purpose of expansion of his business. By availing which facility, can he have money from the bank? Explain its features. (3)
Answer:
Overdraft: Overdraft is an arrangement where customers are allowed to withdraw up to a level over and above their deposits in the current account. Interest is to be paid only on the actual amount of overdraft availed by him. OD is granted to businessmen against their current account.

Question 2.
Write a detailed note on various facilities offered by Indian Postal Department. (3)
Answer:
1. Postal services:
Indian post and telegraph department provides various postal services across India. Various facilities provided by postal department are
(a) Financial facilities:
They provide postal banking facilities to the general public and mobilise their savings through the saving schemes like public provident fund (PPF), Kisan Vikas Patra, National Saving Certificate, Recurring Deposit Scheme and Money Order facility

(b) Mail facilities:
1. Mail services consist of

• Parcel facilities that is trans-mission of articles from one place to another
• Registration facility to provide security of the transmitted articles
•  Insurance facility to provide insurance cover for all risks in the course of transmission by post.

2. Allied Postal Services

• Greetings Post: Greetings card can be sent through post offices.
•  Media Post: Corporate can advertise their brands through post cards, envelops etc.
•  Speed Post: It allows speedy transmission of articles to people in specified cities.
•  e-bill post: The post offices collect payment of telephone, electricity, and water bills from the consumers.
•  Courier Services: Letters, documents, parcels etc. can be sent through the courier service.

(2) Telecom Services:
The various types of telecom services are:

1. Cellular mobile services:
Mobile communication device including voice and non-voice messages, data services and PCO services utilising any type of network equipment within their service area.

2. Radio paging services:
It means of transmitting information to persons even when they are mobile.

3. Fixed line services:
It includes voice and non-voice messages and data services to establish linkage for long distance traffic.

4. Cable services:
Linkages and switched services within a licensed area of operation to operate media services which are essentially one way entertainment related services.

5. VSAT services (Very small Aperture Terminal):
It is a Satellite based communication service. It offers government and business agencies a highly flexible and reliable communication solution in both urban and rural areas.

6. DTH services (Direct to Home):
It is a Satellite based media services provided by cellular companies with the help of small dish antenna and a set up box.

Question 3.
What is e-banking? What are the advantages of e-banking? (3)
Answer:]
e-banking is a service provided by many banks, that allows a customer to conduct banking transactions, such as managing savings, checking accounts, applying for loans or paying bills over the internet using a personal computer, mobile telephone. Eg. Electronic Fund Transfer (EFT), ATM etc.

Question 4.
Babu insures his shop for ₹3,00,000. In a fire accident the shop burned and incurred a loss of ₹1,50,000. Babu claimed for the assured sum i.e, ₹3,00,000. (3)

1. Will the insurance company admit the claim in full. Why?
2. Which principle of insurance is applicable here.

Answer:

1. No. According to the principle of indemnity, in the event of occurrence of loss, the insured will be indemnified to the extent of actual value of his loss or the sum insured which ever is less,
2. Principle of Indemnity

Question 5.
Mrs. Anjali has a medical shop and it is insured with two insurers for ₹50,000 each against natural calamities. During the rainy season, the subject matter was partly destroyed by flood. The total amount of loss was estimated at ? 30,000. She claimed compensation from both insurance companies for ₹30,000 each. (3)

1. Can she get the claim from both the insurers?
2. Justify your answer with regard to the relevant principle of insurance.

Answer:

1. No. She cannot get claim from both the insurance.
2. According to the principle of contribution, the insured is eligible to receive a claim only up to the amount of actual loss suffered by her.

Question 6.
Mr. Joy keep stock of inflammable materials in his shop premises, takes an insurance policy for the shop against fire. But he did not disclose anything about the inflammable materials to the insurance company. Later, the inflammable goods caught fire and the shop was completely destroyed by fire. The insurance company refused to admit the claim of Mr. Joy on the ground that he did not disclose information about the inflammable goods. (3)

1. Can you justify the decision of the insurance company?
2. What principle of insurance is applicable here ?

Answer:

1. Yes.
2. Principle of utmost good faith. The insured must disclose all material facts about the subject matter to the insurer. Otherwise the insurer can cancel the contract. The insurer must disclose all the terms and conditions in the insurance contract to the insured.

Plus One Business Services Four Mark Questions and Answers

Question 1.
Mr. Surendran is running an electrical shop which is insured against fire for ₹50,000. Due to heavy rainfall his stock was fully damaged and he claimed for compensation. The insurance company refused to admit the claim as goods were not insured against natural calamities. Can you justify the decision of the insurance company? Which principle of insurance is applicable here? (4)
Answer:
Yes. The decision taken by the insurance company is correct. Mr. Surendran has no right to claim compensation from the insurance company. The principle of insurance applicable here is causa proxima. It states that insurance company will admit the claim only if the mishap has resulted directly by an event covered under the insurance. An event covered under the insurance.

Question 2.
Draw a chart showing types of insurance. (4)
Answer:

Question 3.
Explain the functions of Transport. (4)
Answer:
Functions of Transport:

1. Helps in the movement of goods and materials from one place to another
2. Helps in the stabilisation of prices.
3. Helps in the social, economic and cultural development of the country
4. Helps in national and international trade
5. Facilitates large scale production
6. Generates employment opportunities
7. Increases growth of towns and cities
8. Connects all part of the world

Plus One Business Services Five Mark Questions and Answers

Question 1.
Explain the functions of warehousing. (5)
Answer:
Functions of Warehousing:

1. Warehouse helps in supplying the goods to the customers when it is needed.
2. By maintaining a balance of supply of goods warehousing leads to price stabilization.
3. By keeping the goods in the warehouse, the trader can relieve himself of the responsibility of keeping of goods.
4. The warehouse performs the function of dividing the bulk quantity of goods into smaller quantities.
5. Warehousing helps in the seasonal storage of goods to select businesses.
6. The functions of grading, branding and packing of goods can be done in warehouses.
7. The warehousing receipt can be used as a collateral security for obtaining loans.

Question 2.
Name the principle of insurance violated in the following cases. (5)

1. ‘A’does not own the building but is trying to get it insured as a party to the insurance policy.

2.  ‘A’ enters into life insurance contract with LIC of India. ‘A’ was ailing with heart decease but he did not reveal this at the time of entering the contract. ‘

3. ‘B’ enters into insurance contract with two companies ‘C’ and ‘D’. The subject matter is a building worth ₹ 5 lakh. The building caught fire and properties worth ₹3 lakhs were damaged. ‘C’ paid the entire claim and asked ‘D’ to share the claim. ‘D’ denies.

4. Goods worth ₹50,000 are damaged and the insurance company pays the claim to ‘Z’ for the loss. ‘Z’ not only took the compensation for loss but also claims the damaged goods.

5. ‘P’ takes an insurance policy for ₹1 lakh with ‘Q’ company. The goods of ‘P’ are damaged due to fire the loss incurred is ₹25,000. ‘Q’ shall restore the actual loss but ‘P’ claims full amount of the policy.

Answer:

1. Principle of insurable interest
2. Principle of utmost good faith
3. Principle of contribution
4. Principle of subrogation
5. Principle of Indemnity

Question 3.
Match A with B and C.

Answer:

Plus One Business Services Six Mark Questions and Answers

Question 1.
Distinguish between life insurance and general insurance. (6)
Answer:

Question 2.
I will give security against fraudulent practices of employees who deal with cash or other valuables

1. Can you identify me?
2. Explain my features. (6)

Answer:
1. Fidelity insurance.

2. This type of policy is taken by the employer of a fire to cover the risk arising out of fraud or dishonesty of his employees. Banks, Financial institutions and other business firms commonly use such insurance policies.

Question 3.
What are services? Explain their distinct characteristics? (6)
Answer:
Nature of Services
1. Intangibility:
Services are intangible, i.e., they cannot be touched. They are experiential in nature, e.g. Treatment by a doctor.

2. Inconsistency:
Since there is no tangible product, services have to be performed according to the demand and expectations of the different customers, e.g. Mobile services/Beauty parlour.

3. Inseparability:
Another important characteristic of services is the simultaneous activity of production and consumption being performed, i.e. They are inseparable, e.g. ATM may replace clerk but presence of customer is a must.

4. Less Inventory:
Services cannot be stored for future use.

5. Involvement:
Participation of the customer in the service delivery is a must.

Plus One Business Services Eight Mark Questions and Answers

Question 1.
Suppose you have visited a commercial bank in your locality. Then what information you have collected from there with regard to. (8)

1. Deposit schemes
2. Lending scheme
3. Other services

Answer:
Functions of Commercial Banks:
a. Acceptance of deposits:
A commercial bank accepts following types of deposits. They are

1. Current deposit:
This type of account is usually opened by business men.lt carries no interest. There are no restrictions on number of deposits or withdrawals.

2. Savings deposit:
Savings accounts are for encouraging savings by individuals. Banks pay rate of interest as decided by RBI on these deposits. Withdrawal from these accounts has some restrictions.

3. Fixed deposit:
Fixed accounts are time deposits with higher rate of interest. They cannot be withdrawn before the maturity period.

b. Lending of funds:
The second important function of a commercial bank is to grant loans and advances out of the money received through deposits. These advances can be made in the form of overdrafts, cash credits, discounting trade bills, term loans, consumer credits and other miscellaneous advances.
1. Cash Credit:
Under this arrangement, the bank advances loan up to a specified limit against current assets. The bank opens an account in the name of the borrower and allows him to withdraw the money up to the sanctioned limit. Interest is charged on the amount actually withdraw.

2. Bank Overdraft:
Overdraft is an arrangement where customers are allowed to withdraw up to a level over and above their deposits in the current account. Interest is to be paid only on the actual amount of overdraft availed by him. OD is granted to businessmen against their current account.

3. Discounting of bill of exchange:
Under this, a bank gives money to its customers on the security of a bill of exchange before the expiry of the bill after deducting a small amount of discount.

4. Term Loans:
These loans are provided by the banks to their customers for a fixed period. Interest will be charged to the entire amount of loan.

c. Secondary Functions:
The secondary functions of commercial banks are as under:
1. Agency Functions:

• Cheque facility: Bank collects customers cheque drawn on other bank. There are two types of cheques mainly
  Bearer cheques, which are encashable immediately at bank counters Crossed cheques which are to be deposited only in the payees account.
• Payment of insurance premium, telephone charges, collection of dividend etc
• Purchase and sale of shares and debentures
• Acting as trustees or executors
• Providing credit information

2. General utility services:

• Providing lockers for safe custody of jewellery and others valuables of customers
• Issuing letter of credit, pay orders, bank draft, credit cards, traveller’s cheques to customers.
• Underwriting issues of shares and debentures
• Providing foreign exchange to importers and traveller’s going abroad.

Bank Draft:
It is a financial instrument with the help of which money can be remitted from one place to another. The payee can present the draft on the drawee bank at his place and collect the money. Bank charges some commission for issuing a bank draft.

Pay Order:
It is almost like a bank draft. Banks issue pay order for local purpose and issue bank draft for outstations.

Question 2.
“For the smooth conducting of insurance the insurer and Insured should know the relevant factors underlying the insurance contracts.” In the light of this statement, can you state the principles of Insurance?
Answer:

1. Utmost good faith:
The insured must disclose all material facts about the subject matter to the insured. Otherwise the insurer can cancel the contract. The insurer must disclose all the terms and conditions jn the insurance contract to the insured.

2. Insurable interest:
The insured must have an insurable interest in the subject matter of insurance. Insurable interest means the interest shown by the insured in the continued existence of the subject matter or the financial loss he is subjected to on the happening of an event against which it has been insured.

3. Indemnity:
All insurance contracts, except life insurance are contracts of indemnity. According to the principle of indemnity, in the event of occurrence of loss, the insured will be indemnified to the extent of the actual value of his loss or the sum insured which ever is less. The objective behind this principle is nobody should treat insurance contract as the source of profit.

4. Subrogation:
According to this principle, after the insured is compensated for the loss to the property insured by him the right of ownership of such property passes on to the insurer. This is because the insured should not be allowed to make any profit, by selling the damaged property.

5. Causa proxima:
When the loss is the result of two or more causes, the proximate cause for the loss alone will be considered by the insurance company for admitting the claim.

6. Contribution:
In certain cases, the same subject matter is insured with one or more insurer. In case there is a loss, the insured is eligible to receive a claim only up to the amount of actual loss suffered by him.

7. Mitigation of loss:
This principle states that it is the duty of the insured to take reasonable steps to minimize the loss or damage to the insured property. If reasonable care is not taken then the claim from the insurance company may be rejected.

Question 3.
Prepare a seminar paper on Types of warehouses. (8)

Answer:
Warehousing:
Warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their consumption. Warehousing is one of the important auxiliaries to trade. It creates time utility by bridging the time gap between production and consumption of goods.
Functions of Warehousing:

• Warehouse helps in supplying the goods to the customers when it is needed.
• By maintaining a balance of supply of goods warehousing leads to price stabilization.
• By keeping the goods in the warehouse, the trader can relieve himself of the responsibility of keeping of goods.
• The warehouse performs the function of dividing the bulk quantity of goods into smaller quantities.
• Warehousing helps in the seasonal storage of goods to select businesses.
• The functions of grading, branding and packing of goods can be done in warehouses.
• The warehousing receipt can be used as a collateral security for obtaining loans.

Types of Warehouses:

1. Private warehouses:
Private warehouses are owned by big business concerns or wholesalers for keeping their own products.

2. Public warehouses:
They are owned by some agencies, offer storage facilities to the public after charging certain fees. The working of public warehouses is subject to some govt, regulations. They are also known as Duty paid warehouses.

3. Bonded warehouses:
These warehouses are used to keep the imported goods before the payment of import duties. It offers many advantages to the importer, i.e. The importer can releases the goods in part by paying the proportionate amount of duty. The goods can be branded, blended and packed in the warehouse itself.

4. Government warehouses:
These warehouses are fully owned and managed by the government. For example, Food Corporation of India, State Trading Corporation, and Central Warehousing Corporation.

5. Co-operative warehouses:
Marketing co operative societies and agricultural oo operative societies have set up their own warehouses for members of their cooperative society.

Students can Download Chapter 2 Collection of Data Questions and Answers, Plus One Economics Chapter Wise Questions and Answers helps you to revise the complete Kerala State Syllabus and score more marks in your examinations

Kerala Plus One Economics Chapter Wise Questions and Answers Chapter 2 Collection of Data

Plus One Economics Collection of Data One Mark Questions and Answers

Question 1.
Which among the following is a method of primary data collection?
(i) Direct personal interview
(ii) Telephonic interview
(iii) Mailed questionnaire method
(iv) All the above
Answer:
(iv) All the above

Question 2.
Identify the random sampling method from the following.
(i) Judgment sampling
(ii) Stratified sampling
(iii) Convenience sampling
(iv) Quota sampling
Answer:
(ii) Stratified sampling

Question 3.
Which among the following is a source of secondary data?
(i) CSO
(ii) NSSO
(iii) RGI
(iv) All the above
Answer:
(iv) All the above

Question 4.
Identify an advantage of sample method.
(i) Less time consuming
(ii) Less cost is needed
(iii) Gives more reliable information
(iv) All the above
Answer:
(iv) All the above

Question 5.
Name the different types of data.
Answer:
Primary data and secondary data

Plus One Economics Collection of Data Two Mark Questions and Answers

Question 1.
Differentiate between census survey and sample survey.
Answer:
Under census method, we collect information from each and every unit of population relating to the problem under investigation. On the other hand, under-sample method, rather than collecting information about all the units of population, we collect information from a few selected items from population.

Question 2.
Name the two important errors related to sampling?
Answer:

1. Sampling error.
2. Non – sampling error.

Question 3.
Give one example of primary data and one example of secondary data.
Answer:
The price of rice collected from a shop is primary data. The price of rice collected from a daily is secondary data.

Question 4.
Do samples provide better results than surveys? Give reasons for your answer.
Answer:
In sample method, we take part of the information. A small number of trained investigators can collect complete data. This information is reliable. In the case of doubt, enquiries can be undertaken for verification. Follow up is made easy in this case. In survey many difficulties are faced when the universe is very large. A large number of investigators are required in surveys. In case of doubts, it is difficult to undertake the enquiry again for verification.

Question 5.
List out the different steps involved in planning the survey.
Answer:

1. Purpose of the survey
2. Scope of the survey
3. Unit of data collection
4. Sources of data
5. Technique of data collection
6. Choice of the frame
7. Degree of accuracy needed
8. Miscellaneous considerations

Question 6.
Point out the advantages of sample method over census method?
Answer:
The advantages of sample method over census method are:

1. Less time consuming
2. Less cost is needed,
3. Gives more reliable information
4. Gives more detailed information.

Question 7.
Suppose you want to select 50 households from a total of 5100 households by giving equal opportunity to all the units. Which method you would prefer for this purpose? Substantiate.
Answer:
Simple random sampling is appropriate for this purpose. It refers to that technique in which each and every unit of population has an equal opportunity of being selected in the sample. The selection depends purely on chance. Random samples may be selected by lottery method.

Plus One Economics Collection of Data Three Mark Questions and Answers

Question 1.
What are the advantages of mailed questionnaire method?
Answer:
Advantages of mailed questionnaire method are the following.

• Least expensive
• The only method to reach remote areas
• No influence on respondents
• Better for sensitive questions

Question 2.
How the non-sampling errors can be controlled?
Answer:
Sampling errors can be controlled by taking the following steps.

1. Sample should be selected with care.
2. Scientific methods of data collection should be used.
3. The investigator should be well trained.
4. A test check should be done.

Question 3.
List out the errors you would expect in the field survey by census method?
Answer:
Some of the errors expected in the field survey by census method are:

1. Errors of measurement
2. Errors due to mishandling of the questionnaire
3. Recording mistakes
4. Errors of non-response
5. Arithmetic errors

Question 4.
Suppose the Wayanad district Panchayat wants to study the literacy of tribal population in the district.

1. Which method would you suggest for data collection? Why?
2. Give a popular instance Is this method suitable in all cases? If not, what are the drawbacks.

Answer:
1. I would suggest census method of data collection to the panchayat authorities in this situation. In this method, we get reliable information from all units of the population for which the study is conducted.

2. A popular instance where this method is used is population census conducted ever 10 years.

3. It is not suitable in all cases because there are some drawbacks – the effort, money and time required will be very high.

Question 5.
Give two examples each of sample, population and variable.
Answer:
1. Examples each of samples:

• A representative group of few individuals taken form a particular locality to study the impact of rise in prices of petroleum products
• A group of students from the school is selected to study average monthly expenditure

2. Examples each of population:

• All individuals residing in a particular locality about . whom the information is to be collected
• All students in a school for whom the information is to be collected.

3. Examples of each of variables:

• Changing price of petrol
• Increase or decrease in the production of rice.

Question 6.
List the demerits of telephone interviews.
Answer:
Demerits of telephone interview are:

• Reactions cannot be watched
• Limited use
• Possibility of influencing respondents.

Question 7.
Point out the precautions to be taken while using secondary data?
Answer:
While using secondary data it should be ensured that the following precautions are taken

1. Ability of the collecting organisation
2. Objective and scope of investigation
3. Method of collection of secondary data
4. Time and conditions of collection of data Definition of the unit, and
5. Accuracy of the data

Question 8.
Point out the advantages of conducting pilot survey.
Answer:
Once the questionnaire is ready, it is advisable to conduct a try out with a small group which is known as Pilot Survey or PreTesting of the questionnaire. The pilot survey helps the investigator in the following ways.

• The pilot survey helps in providing a preliminary idea about the survey.
• It helps in pretesting of the questionnaire, so as to know the shortcomings and drawbacks of the questions.
• Pilot survey also helps in assessing the suitability of questions, clarity of instructions, performance of enumerators and the cost and time involved in the actual survey

Question 9.
Explain the procedure of selecting a random sample of 3 students out of 10 in your class by using random number table.
Answer:
The procedures of selecting a random sample of 3 students out of 10 are as follows

1. Prepare 10 slips of paper of identical size and shape
2. Write the names of students on the slips
3. Place the slips in a box and mix them properly
4. Draw three slips without looking into the box
5. The students, whose names appear on the slips drawn, constitute the required random sample.

Question 10.
Mention the important sources of collecting secondary data.
Answer:
The main sources of secondary data can be classified into two. They are:
A. Published sources

• Government publications
• Semi government publications
• International publications
• Private publications
• Research publications

B. Unpublished sources

• Studies made by scholars
• Studies of various institutions

Question 11.
Prepare a note on NSSO?
Answer:
The National Sample Survey Organisation was established by the Government of India to conduct nationwide surveys on socioeconomic issues. The data collected by NSSO surveys on different socioeconomic subjects are released through reports and its quarterly journal Sarvekshana.

NSSO provides periodic estimates of literacy, school enrolment, utilisaiton of educational services, employment, unemployment, manufacturing and service sector enterprises, morbidity, maternity, child care, utilisation of the public distribution system, etc.

The NSSO also undertakes the fieldwork of annual surveys of industries, conducts crop estimation surveys, collects rural and urban retail prices for complication of consumer price index numbers.

Question 12.
“Non-sampling errors are more serious than sampling errors”. Do you agree? Mention the possible nonsampling errors occur in sampling.
Answer:
Yes, I agree with the statement that non-sampling errors are more serious than sampling errors because a sampling error can be minimized by taking a larger sample. It is difficult to minimize non-sampling error, even by taking a large sample. Even a Census can contain nonsampling errors.
Some of the non-sampling errors are:
1. Errors in Data Acquisition:
This type of error arises from recording of incorrect responses. Suppose, the teacher asks the students to measure the length of the teacher’s table in the classroom. The measurement by the students may differ. The differences may occur due to differences in measuring tape, carelessness of the students, etc.

2. Non-Response Errors:
Non-response occurs if an interviewers unable to contact a person listed in the sample or a person from the sample refuses to respond. In this case, the sample observation may not be representative.

3. Sampling Bias:
Sampling bias occurs when the sampling plan is such that some members of the target population could riot possibly be included in the sample.

Plus One Economics Collection of Data Four Mark Questions and Answers

Question 1.
Prepare a chart showing different methods of sampling.
Answer:

Question 2.
Give the advantages of direct personal interview.
Answer:
Advantages of direct personal interview.

• Highest response rate
• Allows use of all types of questions
• Allow clarification of ambiguous questions
• Better for using open ended questions

Question 3.
“Certain principles should be kept in mind while drafting a questionnaire” explain.
Answer:
The principles that are to be kept in mind while drafting a questionnaire are given below.

1. The questionnaire should not be too long. The number of questions should be as minimum as possible. Long questionnaires discourage people from completing them.

2. The series of questions should move from general to specific. The questionnaire should start from general questions and proceed to more specific ones.

3. The questions should be precise and clear.

4. The questions should not be ambiguous, to enable the respondents to answer quickly, correctly and clearly.

5. The question should not use double negatives. The questions starting with “Wouldn’t you” or “Don’t you” should be avoided, as they may lead to biased responses.

6. The question should not be a leading question, which gives a clue about how the respondent should answer.

7. The question should not indicate alternatives to the answer.

Plus One Economics Collection of Data Five Mark Questions and Answers

Question 1.
State true or false

1. there are many sources of data
2. telephone survey is the most suitable method of collecting data when their population is literate and spread over a large area
3. data collecting by investigator is called secondary data
4. non-sampling errors can be minimized by taking large samples
5. there is a certain bias involved in the non-random selection of samples.

Answer:

1. true
2. true
3. false
4. false
5. true

Plus One Economics Collection of Data Eight Mark Questions and Answers

Question 1.
Prepare a seminar report on the topic “methods of collecting primary data”
Answer:
“Methods of collecting primary data”
Introduction:
The plus one commerce batch of (Name of school) conducted a seminar on the topic “methods of collecting primary data” on 05/08/2017 at 11.0 a.m with the ample guidance of our economics teacher. Our class was divided into three groups to cover the entire area of the topic. Each group presented one objective each. They focused on the area given to them and the group leader presented the seminar paper after required preparation.

Content:
There are three basic ways of collecting data:

1. Personal Interviews,
2. Mailing (questionnaire) Surveys, and
3. Telephone Interviews

1. Personal Interviews:
This method is used when the researcher has access to all the members. The researcher (or investigator) conducts face to face interviews with the respondents. Personal interviews are preferred due to various reasons. Personal contact is made between the respondent and the interviewer.

The interviewer has the opportunity of explaining the study and answering any query of the respondents. The interviewer can request the respondent to expand on answers that are particularly important. Misinterpretation and misunderstanding can be avoided.

Watching the reactions of the respondents can provide supplementary information. Personal interview has some demerits too. It is expensive, as it requires trained interviewers. It takes longer time to complete the survey.

2. Mailing Questionnaire:
When the data in a survey are collected by mail, the questionnaire is sent to each individual by mail with a request to complete and return it by a given date. The advantages of this method are that it is less expensive. It allows the researcher to have access to people in remote areas too, who might be difficult to reach in person or by telephone.

It does not allow influencing of the respondents by the interviewer. It also permits the respondents to take sufficient time to give thoughtful answers to the questions. The disadvantages of mail survey are that there is less opportunity to provide assistance in clarifying instructions, so there is a possibility of misinterpretation of questions. Mailing is also likely to produce low response rates due to certain factors.

3. Telephone Interviews:
In a telephone interview, the investigator asks questions over the telephone. The advantages of telephone interviews are that they are cheaper than personal interviews and can be conducted in a shorter time. They allow the researcher to assist the respondent by clarifying the questions.

Telephone interview is better in the cases where the respondents are reluctant to answer certain questions in personal interviews. The disadvantage of this method is accessible to people, as many people may not own telephones. Telephone Interviews also obstruct visual reactions of the respondents.

Conclusion:
All the three groups presented their topics with necessary facts and figures. After the presentation, there was the question-answer session. The active participation of everyone made this session live and interesting. On the whole, the seminar was a big success.