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• Under the Keynes theory of employment, a simple two sector economy consisting of the household sector and the business sector is taken to understand the equilibrium between ADF and ASF.
• All the decisions concerning consumption expenditure are taken by the individual households, while the business firms take decisions concerning investment.
• It is also assumed that consumption function is linear and planned investment is autonomous.
• There are two approaches to determination of the equilibrium level of income in Keynesian theory. 

These are:

1. Aggregate demand – Aggregate supply approach 

2. Saving – Investment approach –

• In this chapter, out of these two, aggregate demand and aggregate supply approach is alone explained to understand the determination of equilibrium level of income and employment.
• The concept of effective demand is more clearly shown in the figure.
• In the figure, the aggregate demand and aggregate supply reach equilibrium at point E. The employment level is N₀ at that point.
• At ON₁ employment, the aggregate supply is N₁, Rr But they are able to produce M₁ N₁ The expected level of profit is M₁ , R₁
• To attain this level of profit, entrepreneurs will employ more labourers.
• The tendency to employ more labour will stop once they reach point E.
• At all levels of employment beyond, ON₀ , the aggregate demand curve is below the aggregate supply curve indicating loss to the producers.
• Hence they will never employ more than ON₀ labour.
• Thus effective demand concept becomes a crucial point in determining the equilibrium level of output in the capitalist economy or a free market economy in the Keynesian system.
• It is important to note that the equilibrium level of employment need not be the full employment level (N₁) from the , it is understood that the difference
• Thus the concept of effective demand becomes significant in explaining the under employment 

(b) A (ii) B (i) C (iv) D (iii)

(c) State intervention in certain situation

When the utility is measured in meters, liters, kilograms, temperature etc., it is called cardinal method of measuring utility. According to this, utility is measured in terms of numbers like 1,2,3,4,5…… and soon.

(d) A (iv) B (iii) C (iv) D (i)

Correct Answer is: (d) Saving

Correct Answer is: (a) Lemer

(d) Less aggregate demand in relation to productive capacity.

The bulge in IC shows that the Marginal rate of substitution is not diminishing consistently. Here the consumer is irrational and behaving erratically.

(c) A (iv) B (i) C (ii) D (iii)

Correct Answer is : (c) J.B. Say

Correct Answer is: (a) Keynes’

(a) J.M. Keynes

1. India’s rural economy has both unemployment and underemployment. 

2. The major feature of rural unemployment is the existence of unemployment in the form of disguised unemployment and seasonal unemployment. 

3. In agriculture and agro based industries like sugar, production activities are carried out only in some seasons.

Think-Tank has thought about the vitamins magnificent brilliance. It was given by the chemical department to increase one’s intelligence. Taking them immediately could decipher the meaning of code. He also thought that the Earthlings were clever.

थिंक-टैंक ने विटामिनों की शानदार प्रतिमा के बारे में सोचा। यह रसायन विभाग के द्वारा बुद्धिमता को बढ़ाने के लिए दिया गया था। इसे ग्रहण करने के तुरंत बाद कोड के अर्थ स्पष्ट हो सकते हैं। उसने यह भी सोचा कि पृथ्वीवासी समझदार हैं।

The consumer attains equilibrium in IC analysis when the Budget Line is tangent to the Indifference Curve. At the tangential point, the Budget line and the Indifference curve have exactly the same slope. Here, the MRS of Product X and Y are equal to the price ratio of two goods.

J.B. Say law of market was the basis for assuming the situation of full employment.

Frictional Unemployment (Temporary Unemployment): 

1. Frictional unemployment arises due to imbalance between supply of labour and demand for labour. 

2. This is because of immobility of labour, lack of necessary skills, break down of machinery, shortage of raw materials etc. 

3. The persons who lose jobs and in search of jobs are also included under frictional unemployment.

The books are the treasure of infinite knowledge. We read them and get noble ideas from them. After reading books we become wise. They charge nothing instead they motivate and encourage us for good deeds.

पुस्तकें अनंत ज्ञान का खजाना हैं। हम इन्हें पढ़कर इनसे अच्छे विचारों को ग्रहण करते हैं। पुस्तकों को पढ़ने के बाद हम बुद्धिमान बनते हैं। ये हमें अच्छे कार्यों के लिए प्रेरित और प्रोत्साहित करती हैं एवं
बदले में हमसे कुछ भी नहीं लेती।

1. Modem technology being capital intensive requires less labourers and contributes to ’ technological unemployment. 

2. Now a days, invention and innovations lead to the adoption of new techniques there by the existing workers are retrenched. 

3. Labour saving devices are responsible for technological unemployment.

Correct option is (A) Forceful migration

A book is a man’s best companion because it is always there. It never leaves us alone. It is there with us even when everyone else is gone. Books guide us, instruct us, make us laugh, inform us, inspire us and are always true to us. My favourite book is Peter Pan. It is a fairy tale. I love the character of Peter.

He lives in fantasies. He is a child who never wants to grow up and he never does. He enjoys thrills and adventures and even takes the kids from Earth on a merry adventure. The book inspires as it shows that one can remain a child at heart forever. The sense of wonder, innocence, purity and joy and a capacity to dream can stay in the human heart forever.

(A) Economic causes,
(B) Environmental causes and
(C) Political causes

Correct option is (B) Because of abundance of natural resources leading to employment opportunities

Social rituals are more existent in villages as compared to cities. Moreover, urban societies have liberal thinking and modern life style. As a result, village youth get attracted to such a lifestyle away from social rituals and responsibilities and like to settle in urban areas.

When a particular place has abundance of natural resources, but relatively quite less population, people migrate to that place. This is known as extant to natural resources

Region-based migration: Migration done from one place (region) to another within the country boundaries or outside is called Region-based migration.

Types:

1. Internal migration and
2. International migration

1. Internal migration:

Movement of a person from one place to another within the geographical boundary of q country is known as internal migration.

Example: When a person from Gujarat settles in another state or a city or when a person from any other state or city settles in Gujarat then it is known as internal migration.

2. International migration:

Movement of a person from one country to another is known as international migration.

Example: When a person from Gujarat or from any other part of India moves to some other country in search of job, occupation, business or for better standard of living or for permanent settlement or when people from other parts of the country come to India for settlement on a permanent basis it is known as international migration.

When a person gets attracted to the life style and modern infrastructural facilities of urban areas and migrates there it is known as migration due to attraction.

Correct option is (C) Migration due to attraction

The Indian Railway was started on 16th April 1853 by the British Government for their trade benefits. The first railway line was put-up between Bombay and Thane covering a distance of 22 miles (approximately 34 kilometers).

Causes of Migration:

• Economic causes: Employment, Occu¬pation and business, transfer, extent of natural resources, to attain better quality education, to get modern health facilities, plan for performing economic activity.
• Social causes: Marriage system, social rituals.
• Political causes: War and unrest, friction.
• Environmental causes: Natural cala¬mities (Famine, earthquake, volcanoes, etc.)

Political reasons:

1. War and unrest:

A region which is war-prone witnesses several small and big wars time and again. This makes the area unrest and unsafe with unstable employment opportunities.

Hence, people residing in those areas migrate to safe, peaceful and progressive areas that give ample amount of employment opportunities.

2. Avoid friction:

People migrate from places where riots and friction takes place frequently to safer and peaceful places.

Correct option is (A) Gunotsav

If a place has 5000 or more people living in that area, 75% or more employed in non-agriculture sectors and if the density of population is more per square kilometer then it gets converted into a town or a city.

Movement of a person from one place to another within the geographical boundary of a country is known as internal migration.

Social effects – modern thinking:

Cities have better education, cultural development and modern means of communication. As a result, the thinking of urban population is modern compared to villages.

Migrants from villages quickly adapt themselves to the modern world by having a decent and polite approach.

When a person from Gujarat settles in another state or a city or when a person from any other state or city settles in Gujarat then it is known as internal migration

Urbanization is a socio-economic process in which the population gets concentrated or centralized i.e. increases in one area. This eventually converts that area into a town or a city.

Indian Railways:

• World over, railways-is considered to be a revolutionary development in the field of transportation.
• The Indian Railways was started on 16th April, 1853 by the British Government for their trade benefits.
• The first railway line was put-up between Bombay and Thane covering a distance of 22 miles (approximately 34 kilometers).
• After independence, the administration of railways came into the hands of the Indian Government. The government established a separate department to administer the rail network of India.
• Today, India’s rail network is at 1st position in Asia and at 4th in the world.
• Indian Railways is India’s biggest public enterprise employing more than 14 lakh people.
• In 2012, 8200 million passengers travelled through railways and goods weighing 970 million tonnes were transported.

In India, one can get educated either in government run institutions or private.

On the basis of age of the child, education in India is classified into following stages:

• Primary education: Standard 1 to 5
• Higher Primary education: Standard 6 to 8
• Secondary education: Standard 9 to 10
• Higher Secondary education: Standard 11 to 12
• College or higher education : Standard 12 onwards
• Apart from this if one wishes, he can also stop schooling after class 8 and join ITI to gain expertise in some technical field of his choice.

The educational sector can.be studied in two aspects. They are:

(A) Positive aspect:

• The Constitution of India has made primary education for children between. 6-14 years age group, free and compulsory. It is the responsibility of the state government to see that they follow these guidelines and provide education in their respective states.
• There has been a huge development and expansion right from kindergarten up to the higher education institutes during the various plans. As a result, by 2013-14, there were 1.4 million primary schools in India where 7.7 million teachers taught.
• Gujarat state has made special effort by launching programmes like ‘Gunotsav’ and ‘Praveshotsav’ to encourage more enrollments in schools.
• In 2013-14, 95% children were registered in primary education.
• ‘Education to All’ (Sarva Shikhsan Abhiyan) programme and RTE (Right to Education) have worked considerably to spread awareness for providing education to every child of the country.

(B) Negative aspect: In spite of several effort of the government, education sector is still weak. Poverty and illiteracy to educate the existing and next generation are the chief reasons for underdevelopment of educational sector.

• Even today, the situation of primary education in small villages is a matter of great concern. 29% of the children drop out of school before completing their 5th standard.
• Over and above this India also does not have trained teachers in proper number. In 2013-14, the student-teacher ratio was 46: 1 and that in higher primary education was 34:1.
• In 2013-14, 69% pupils were enrolled in secondary standards and only 25% in higher education.
• The scenario of education in India can be understood from the table below.

Extent of literacy

Source: Census of India

Conclusion:
Thus, in spite India has made several efforts to educate its masses, a big percentage of population is still illiterate.

Gujarat state has made special effort by launching programmes like ‘Gunotsav’ and ‘Praveshotsav’ to enroll more students in the schools.

Ultra-modern health services:

Rise in urban population demands more and better health-care facilities. Today, we can see number of multispecialty hospitals flourishing in cities like Ahmedabad where ultra-modern treatment is available for every disease at one place.

Along with private hospitals, government and local self-government institutions also set-up hospitals for the benefit of the poor and the middle class. Better health facilities create a positive impact on the health and the productivity of people.

Unregulated urbanization:

• Poor migrants are generally very less educated and do not possess much skills. When they migrate from villages to cities they cannot afford to buy proper houses. Hence, they have to helplessly live in slums and in the city peripheries.
• Hutments and slums expand. All this results in uncontrolled urbanization in cities

Correct option is (B) Industries

The full form of ITI is Industrial Training Institute. ITI offers a student the facility to stop schooling after class 8 and join ITI to gain expertise in some technical field of his choice.

Owing to the immense contribution of railways in economic growth and development, modernization of railways is focused in every five year plan by government of India.

Some of the developmental steps taken to modernize railways are:

1. Modernization is undertaken in every five year plan by speeding up conversion of railway gauges.
2. Facilities are created to make rail travel safer.
3. Modernization of railway system is taken up by adding various facilities.
4. Railway compartments are modernized to,make passengers feel more comfortable during travel.
5. Efforts are continuously made to electrify almost all rail networks so that faster trains can run on all those routes where still traditional coal rains are plying.
6. Steps are taken to run trains that rua faster on modern rail network so that travel time can be reduced and goods and passengers can be transported faster.
7. India is also about to start extremely fast world famous Talgo and Bullet trains.

Reduction in poverty:

Poverty and unemployment are mutually related. Due to urbanization, industry and service sector creates large scale employment in cities which reduces poverty.

Moreover, rural poor and unemployed who come to urban areas get employment according to their capabilities and skills. This also helps in reducing poverty.

Cultural development:

Cities have well-developed educational facilities that too for various discipline. People take benefit of these facilities and gain overall development which in turn helps in establishing a rich cultured society.

Libraries with modern amenities, book stalls and various cultural programmes that take place in cities enrich people culturally.

The financial ability to buy goods and services is known as purchasing power. In other words, purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.