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Scales are measures taken to represent actual data in a diagram. Taking proper scales on both the axis is very important in order to obtain a systematic graph with clarity and appropriate size.

While studying cause-effect relationship between variables, the cause variable is treated as an independent variable and the effect variable is treated as a dependent variable.

We should take care that the source from where data is gathered is reliable and universally acceptable so that we are assured of accurate data.

Correct option is (C) World Development Report

Macroeconomics is the study of a national economy as a whole. In this sense, macroeconomics studies issues which emerge from the economy of entire nation and its impact on the nation.

A picture is worth thousand words and this applies to economics too. At times facts about economic parameters can be represented more clearly with the help of statistical data and graphs.

If appropriate statistical data are obtained then we can compare several parameters over different time periods, across regions and also across nations. This way we can then easily perform comparative study.

In descriptive manner, information gathered through economic analysis is represented through words and sentences.

Statistics gives an idea about direction and magnitude of change in economic parameters. This information helps in understanding the changing trends.

One cannot directly believe the established theories and put them in practice. We need to test the validity of such theories in real life at different times and places. To do so we need to gather information related to the established theory from real life activity at such different times and places. Such information can be collected and presented in quantitative terms with the help of statistical tools.

In case of an unexpected fall in sales, the firm will have unsold stock of goods which is not anticipated. Hence there will be unplanned accumulation of inventories.

For example, suppose a firm starts the year with an inventory of 100 shirts and it expects to sell 1000 shirts for the coming year and it produces 1000 shirts and expecting to keep 100 as inventories.
However, during the year, the sales of shirt turned out to be unexpectedly low where the firm is able to sell only 600 shirts. This means that the firm is left with 400 unsold shirts. The firm ends the year with 400+100=500 shirts. The unexpected rise of inventories by 400 will be an example of unplanned accumulation of inventories.

In case of an unexpected rise in the sales there will be unplanned decumulation of inventories.
For example, if the sales are more than 1000 shirts during the year we would have unplanned decumulation of inventories. Suppose the sales are 1050, then the firm will have to sell 50 extra shirts out of the 100 shirts of inventories along with the 1000 shits. This 50 unexpected reduction in inventories is an example of unexpected decumulation of inventories.

Correct option is (D) Adam Smith

Correct option is (B) Marshall

Correct option is (C) two

Charitable activity, or activities done out of love, affection, compassion, such as social service, mother teaching her son, etc. are all non-economic activities.

Economics and statistics go hand in hand. In other words, one cannot do economic study without making use of statistics. The importance of statistical information in economics is discussed below.

1. Statistical information supports or confirms a principle:

• While performing an economic study, the approach can be divided in two parts. They are:
  1. The philosophy of economics: The philosophy of economics observes human behavior.
  2. Scientific tools of economics: These tools are used to establish principles and theories.
• One cannot directly believe the established theories and put them in practice.
• We need to test the validity of such theories in real life at different times and places. To do so we need to gather information related to the established theory from real life activity at such different times and places. Such information can be collected and presented in quantitative terms with the ‘ help of statistical tools.

Example:
(a) Based on the economic studies, a theory has been established between the cause and effect of rainfall and agriculture.

By collecting and analyzing statistical data on rainfall and agricultural production in a region at one time or at different times one can understand the cause-effect relationship theory established.

(b) Similarly, statistical data on price of a commodity and its demand can help to confirm the theoretical relationship established by economics between the two.

2. Statistical information gives an idea about the changing trends of economic parameters:

With the help of statistical data obtained under economic study, we can obtain an idea of the direction and magnitude of change in economic- parameters.

Example:

• We can know how sales revenue of a particular firm is changing
• We can know the trends of employment in a nation
• We can know the trends of production in different sectors of an economy
• For example, using economic study one may say that agricultural production is falling which is affecting national income or supply of money is rising in the economy.
• Such data help government to make proper economic policies. People may also take benefit of such data and policies and change their production patterns.

3. To make comparative study easy:

If appropriate statistical data are obtained then we can compare several parameters over different time periods, across regions and also across nations.

Example:

• We can compare growth rate of India’s national income between 1951 and 2015.
• We can also compare India’s macroeconomic parameters like per capita income, inflation etc. with those of other countries like USA, UK, China, etc.

4. To make precise presentation of facts:

• A picture is worth thousand words and this applies to economics too. At times facts about economic parameters can be represented more clearly with the help of statistical data and graphs. _
• Graphs showing inflation, agricultural production, regional disparities in incomes, etc. can give clearer picture of their trends as compared their written description.
• Such pictorial and graphical representations can be understood easily even by layman.

Into two parts namely,

1. Microeconomics and
2. Macroeconomics.

According to Kautilya, the main intention of a human being is ‘arth’ (wealth). The piece of land owned by a human is ‘arth’ (wealth) and thus the science explaining the purpose and utility of wealth creation on earth is called economics.

About 2500 years ago, Kautilya who is also known as Chanakya in his book ‘Arthshashtra’ discussed the purpose of economic activity.

Adam Smith on one hand studied human efforts i.e. society and on the other hand the approach and method of study was scientific.

Correct option is (C) Economics

Correct option is (A) Adam Smith

‘Arth’ i.e. purpose, benefit and wealth is the goal of purushartha which is concerned with economics.

Correct option is (B) Only Economic activities

Correct option is (D) Both (A) and (C)

Correct option is (A) Economics is a positive science

Correct option is (C) Arthshashtra

In Hinduism there is a concept of ‘Purushartha’ (Gujarati: In Indian philosophy, Purushartha means ‘Purpose of a human being’ and it refers to the four goals or aims of a human life.

These goals are:

1. ‘Dharma’ (righteousness, duty),
2. ‘Arth’ (purpose, benefit, wealth),
3. ‘Kama’ (desire) and
4. ‘Moksha’ (liberation).

• Human beings are the most intellectual creatures among all the living, organisms of the earth.
• With the help of their intelligence and logic they are able to examine, distinguish and classify their surroundings and environment.
• To ensure a happy and prosperous life man created various social and political institutions and economic systems. In order to understand importance of such systems, sustain them over a long period of time and to resolve the complexities that may arise in such systems, human beings formulated certain principles based upon various philosophies and sciences.
• In the pre-historic and in the earlier historic periods, when differences arose between people due to such systems people solved them without thinking and jumping into fights and battles.
• With the development and progress of civilizations, it became utmost impor¬tant that rather than solving problems with fights and battles resolve the problems logically and by creating and using philosophical principles. This gave rise to ‘Economics’ as a philosophy and science of rational economic behaviour.

Note: Definition of each economist can be asked individually too.
Various definitions of economics:
1. Adam Smith:

As per Adam Smith, ‘Economics is the study of the nature and causes of wealth of nations’. As per this definition, Economics studies the exchange of physical wealth produced by labour. Adam Smith introduced economics as a Social Science. The reason for this was on one hand he studied human efforts (i.e. society) and on the other hand his methodology was scientific.

Since the time of Adam Smith, economics was studied as an independent science and not as part of general philosophy. He talked about human welfare in his book.

2. Alfred Marshall:

In his book, ‘Principles of Economics’ published in 1890, Alfred Marshall gives the following definition ‘Economics is the study of mankind in the ordinary business of life’. This definition states that in everyday life people usually aim for material well-being.

• This definition explains economics as the study of routine activities of human beings and aims to explain how they achieve well-being from materialistic things.
• This definition does not have a broad aspect since it only focuses on the material consumption or material wellbeing, yet it is important as it keeps human wellbeing at the centre of human activity.

3. Lionel Robbins:

• Every field of science deals with a ‘problem’ whereas economics deals with a ‘question’. For example the questions that economics deals could be “How to allocate limited resources which have alternative uses for satisfying recurring and unlimited human wants in order to increase the wellbeing in a / society”?
• With respect to this perspective, in 1931, Lionel Robbins in his book, ‘Nature and Significance of Economics’ gave the following definition – “Economics is the science which studies human behaviour as a relationship between limited resources and unlimited wants which have alternative uses”.
• Human wants are unlimited and most wants keep on recurring. On the other hand, resources which help in satisfying human wants are limited and have alternate uses. Hence, the challenge for economics is to deal with the problem of allocating limited resources for satisfying enumerable human wants to the maximum level.
• According to Robbins, economics is a positive science and does not prescribe ‘how things should ideally behave’ rather it studies, ‘how human beings behave in reality’.
• One may think of behavior, approach and method of a person or a situation to be ‘ideal’, but in reality it is a rarity. Hence, by this definition we understand that economics does not deal with ‘norms’ i.e standard ways or patterns and so is not a ‘Normative science’.

4. Paul Samuelson:

In his book ‘Foundations of Economic Analysis’ published in 1947, Samuelson defines economics as, “Economics is the study of how people and society end up choosing, with or.without the use of money, to employ scarce productive resources that could have alternative uses to produce various commodities over time and distributing them for consumption, now or in the future, among various persons in the society. It analyses costs and benefits of improving patterns of resource allocation”.

Samuelson talks about choice, allocation of scarce resources and evaluation of costs and benefits of doing so.

Conclusion:
In general, all definitions commonly point out that economics studies human behaviour, is positive in nature, adopts scientific methods and methodologies’ and thus it is a Social Science.

Arthshashtra:

• In ancient India, Economics was termed as ‘Arthshashtra’. It is a Sanskrit word.
• The word ‘arth’ means ‘purpose’ or ‘goal’ and so ‘arthshashtra’ in Sanskrit means, ‘The science of benefits or purpose in practical life’.
• The definition of arthshashtra says that that the purpose of human behaviour is to seek benefits.

Economics:

• The English word ‘Economics’ is derived from the Greek word ‘Oikonomos’.
• ‘Oikos’ means households and ‘nomos’ means management. Thus, the-word ‘economics’ means ‘management of households’.

The English word ‘Economics’ is derived from the Greek word ‘Oikonomos’. ‘Oikos’ means households and ‘nomos’ means management. Thus, the word ‘economics’ means ‘management of households’.

Correct option is (D) Both (A) and (C)

With respect to trade and commerce, all the activities can be divided into two forms. They are: (1) Economic activities and (2) Non-economic activities.

Two types 

             namely 

           * economic activities 

           * Non economic activities 

Correct option is (A) Kautilya

1. A city is a large human settlement.

2. High density of population.

3. Four way roads, flyovers, sky scrapers, parks.

4. Educational institution, hospital, Government offices.

5. Private and public industries and technological institutions.

6. Employment opportunities permanent monthly income, basic requirements are

1. Cotton textiles

2. Spinning and weaving

3. Food processing industries

4. Beedi production

5. Wind power generations

On the basic of raw materials industries are classified as

1. Agro Based Industries – Cotton textiles, Sugar mills and Food processing.

2. Forest Based Industries – Paper mills, Furniture making, Building materials.

3. Mineral Based Industries – Cement, Iron, Aluminium Industries.

4. Marine Based Industries – Sea food processing.

Cement, iron, and Aluminium industries, sea food processing are some of the city centered industries.

1. In our daily life we utilize many things. These things are sold in shops. To buy and sell commodities we use money. If we save money it is good for us and the country.

2. Money is the lubrication for the movement of goods. If these contracts symbolized by money disappeared, there would be instant chaos. All activity would grind to a halt.

1. When people exchanged commodities, they might have faced, certain problems when comparing the differences in the value of commodity.

2. To solve this problem, people invented a tool called money.

The amount from the income which is left for future needs after consumption is called sayings.

The action of buying and selling goods and services is called trade.

Correct option is (D) None of these

• ‘Micro’ means extremely smail. So, microeconomics is the study and analysis of economics at an individual, group or company level. It studies the rational behaviour of individual units of an economy.
• On the other hand, macroeconomics is the study of a national economy as a whole.
• In this sense, macroeconomics studies issues which emerge from the economy of entire nation and its impact on the nation.
• Analysis about the national economy is not always possible without analyzing individuals or groups as units. On studying such units one can use the information as an input for analysis at macro level.
• While studying the two it happens that the behaviour of individual economic units impacts the macroeconomic parameters and the macroeconomic parameters impact the decisions of individual economic units.
• Thus, both microeconomics and macroeconomics are complementary to each other.

• Economic analysis is done to study individual economic units as well as to study the economy as a whole.
• Hence, for the purpose of analysis, the entire study of economics is classified into:
  1. Microeconomics and
  2. Macroeconomics.

Microeconomics:

• ‘Micro’ means extremely small. So, microeconomics is the study and analysis of economics at an individual, group or company level. It studies the rational behaviour of individual units of an economy. In other words, microeconomics studies and analyses at a very small level.
• Microeconomic analysis uses thre ‘Principle of Marginalism’ to analyze how individual units make decisions in an economy. Microeconomics work on certain scientific principles that show behaviour of individual units.
• For example, ‘Consumer’ is the individual unit of ‘Demand analysis’ while studying the demand at micro level, ‘Firm’ is the unit of ‘Supply analysis’ and ‘Labour’ that of ‘Labour market’.
• Other examples are price determination of a product in a market, equilibrium output level for a firm, marginal productivity and wage determination of labour as a factor of production, etc.

Macroeconomics:

• Macroeconomics is the study of a national economy as a whole.
• In this sense, macroeconomics studies issues which emerge from the economy of entire nation and its impact on the nation.
• For example, determination of national income, unemployment, poverty, growth rate and demographic profile of population are topics studied under macroeconomics.
• Macroeconomic analysis has helped to develop principles for managing • resources in such a way that leads to increase in national income, reduce unemployment, poverty, inflation and so on.
• It is important to note that the behaviour of individual economic units impact the macroeconomic parameters which in turn impact the decisions of individual economic units. Thus, both microeconomics and macroeconomics are complementary to each other.

1. The system of exchanging goods for other goods is called barter system.

2. This was followed in olden days.

3. For example, exchange a bag of rice for enough clothes

1. Rivers acts as the main source for cultivation of crops.

2. So early man settled permanently near the rivers.