True – False Questions – Sectors of the Indian Economy

Topic 1: Primary, Secondary and Tertiary Sectors

Q1. Agriculture, fishing and forestry are examples of primary-sector activities.

Q2. Manufacturing cloth from cotton belongs to the primary sector because cotton is obtained from plants.

Q3. Banking, transport and communication are examples of tertiary-sector activities. Q4. The three sectors of the economy operate independently and do not depend on one another.

Topic 2: Comparing the Three Sectors

Q5. A sector’s contribution to GDP may differ from its share in total employment.

Q6. The sector employing the largest number of people must always contribute the largest share to GDP.

Q7. Differences in productivity can help explain why two sectors employing similar numbers of workers contribute different amounts to GDP.

Q8. Every worker in the tertiary sector earns more than every worker in the primary sector.

Topic 3: Historical Change in the Importance of Sectors

Q9. Agriculture was an important source of livelihood in the early stages of economic development.

Q10. Economic development always increases the share of the primary sector in GDP. Q11. The tertiary sector can become increasingly important as demand for transport, education, healthcare and banking grows.

Q12. Industrialisation eliminates the need for agricultural production.

Topic 4: Where Are Most of the People Employed?

Q13. Many people may be employed in agriculture even when agriculture contributes a relatively small share to GDP.

Q14. A large number of workers in a sector always indicates that each worker produces a high amount of output.

Q15. Disguised unemployment may exist when some workers can leave a farm without reducing its total output.

Q16. Moving surplus agricultural workers into suitable non-farm jobs can never improve labour productivity.

Topic 5: How to Create More Employment?

Q17. Improving irrigation facilities can help farmers grow more than one crop a year and may create additional employment.

Q18. Only large factories can create employment opportunities in India.

Q19. Better rural roads and storage facilities can help farmers market their produce and support economic activity.

Q20. Providing loans to entrepreneurs guarantees that their businesses will succeed and create permanent jobs.

Topic 6: Organised Sector

Q21. Establishments in the organised sector are registered and subject to applicable government regulations.

Q22. Every organised-sector employee must work in a government office.

Q23. Organised-sector workers are generally more likely to receive formal employment benefits and legal protection.

Q24. Organised-sector workers can never lose their jobs under any circumstances.

Topic 7: Unorganised Sector

Q25. Workers in the unorganised sector may face irregular employment, low wages and limited job security.

Q26. Every worker in the unorganised sector is unemployed.

Q27. Casual wage labourers and self-employed people may both work in the unorganised sector.

Q28. All unorganised-sector workers receive the same employment benefits as workers in the organised sector.

Topic 8: How to Protect Workers in the Unorganised Sector?

Q29. Enforcing minimum-wage laws can help protect vulnerable workers from exploitation.

Q30. Workplace safety measures are unnecessary for workers in the unorganised sector.

Q31. Social security benefits can help workers manage risks associated with illness, old age or loss of income.

Q32. Government protection should be provided only to organised-sector workers.

Topic 9: Public Sector

Q33. Public-sector enterprises are owned or controlled by the government.

Q34. Every service provided by the public sector must be completely free of charge. Q35. The government may invest in essential services even when immediate financial profits are limited.

Q36. Public-sector enterprises are always more efficient than private-sector enterprises.

Topic 10: Private Sector

Q37. Private-sector enterprises are generally owned by individuals or private organisations.

Q38. Private-sector enterprises cannot generate employment because they work mainly to earn profits.

Q39. A privately owned hospital belongs to the private sector even though healthcare is an essential service.

Q40. All private-sector enterprises are required to provide their goods and services free of cost.

Topic 11: Difference Between Public and Private Sectors

Q41. Government ownership or control is a key characteristic of the public sector.

Q42. Enterprises producing similar goods must always belong to the same ownership sector.

Q43. Both public and private sectors can contribute to economic development and employment generation.

Q44. The private sector consists only of enterprises owned by the central government.

Topic 12: The Role of the Public Sector

Q45. The government may provide essential services when private businesses do not provide them sufficiently or affordably.

Q46. The public sector should consider only profits and ignore public welfare.

Q47. Investment in roads, schools and hospitals can support economic development. Q48. Private enterprises can always provide every essential service to everyone at affordable prices, making government involvement unnecessary.

Topic 13: Public Facilities and Government Responsibility

Q49. Access to safe drinking water and sanitation is important for public health.

Q50. Public facilities benefit only those individuals who pay separately for every service they use.

Q51. Public education can improve people’s skills and contribute to long-term economic development.

Q52. Poor sanitation affects only the household where it occurs and has no impact on the wider community.

Topic 14: Gross Domestic Product (GDP)

Q53. GDP measures the value of final goods and services produced within a country’s domestic territory during a specified period.

Q54. GDP includes only agricultural production and excludes manufacturing and services.

Q55. The contribution of different sectors to GDP can be used to understand the structure of an economy.

Q56. GDP directly shows whether income is distributed equally among all citizens.

Topic 15: Final Goods and Services

Q57. Bread purchased by a household for consumption is generally classified as a final good.

Q58. Every good purchased by a business must be classified as an intermediate good. Q59. The intended use of a product can help determine whether it is a final or intermediate good.

Q60. Services such as haircuts are excluded from GDP because they are not physical goods.

Topic 16: Intermediate Goods and Double Counting

Q61. Counting the full value of wheat, flour and bread at every stage of production can lead to double counting.

Q62. Intermediate goods have no economic value and are excluded from GDP for that reason.

Q63. Calculating value added at each stage of production can help avoid double counting.

Q64. Counting the same value multiple times makes GDP a more accurate measure of production.

Topic 17: Underemployment and Disguised Unemployment

Q65. Disguised unemployment exists when some workers can be removed from an activity without reducing its output.

Q66. Underemployment occurs only when a person has no job at all.

Q67. A farm may experience disguised unemployment when more workers are engaged than are necessary to produce its existing output.

Q68. Disguised unemployment cannot occur in agricultural activities.

Topic 18: Employment Generation

Q69. Investment in rural infrastructure can generate employment directly and support additional economic activities indirectly.

Q70. Rising GDP automatically guarantees productive employment for every person seeking work.

Q71. Small-scale industries and rural services can provide alternatives to agricultural employment.

Q72. Employment generation should focus exclusively on agriculture because non-farm activities cannot create rural jobs.

Topic 19: Rural Employment and MGNREGA

Q73. Under the original MGNREGA framework, eligible rural households demanding work were guaranteed at least 100 days of unskilled manual wage employment in a financial year.

Q74. MGNREGA was designed to provide permanent government jobs to every rural adult.

Q75. Rural employment programmes can help provide income during periods when agricultural work is limited.

Q76. Rural employment programmes cannot contribute to village development or the creation of useful rural assets.

Answer Key

Part 1: Detailed Answer Key with Explanations

Q. No.	Answer	Explanation
1	True	Agriculture, fishing and forestry directly use natural resources and belong to the primary sector.
2	False	Manufacturing cloth from cotton belongs to the secondary sector because it transforms raw material into a finished product.
3	True	Banking, transport and communication provide services and belong to the tertiary sector.
4	False	The three sectors are interdependent. For example, industries need agricultural raw materials and transport services.
5	True	Employment share and GDP contribution can differ because productivity varies across sectors.
6	False	A sector employing the most people does not necessarily contribute the largest share to GDP.
7	True	A more productive sector may generate greater value added with a similar number of workers.
8	False	Earnings vary within and across sectors; tertiary-sector workers do not all earn more than primary-sector workers.
9	True	Agriculture and other primary activities were major sources of livelihood in early economies.
10	False	Economic development can increase the relative contribution of manufacturing and services rather than agriculture.
11	True	Growing demand for services can increase the tertiary sector’s contribution to economic activity.
12	False	Industrialisation changes the structure of an economy but does not eliminate the need for agriculture.
13	True	Agriculture may employ many people even when its contribution to GDP is relatively small.
14	False	A large workforce does not necessarily indicate high output per worker; productivity may be low.
15	True	Disguised unemployment exists when some workers can leave without reducing total output.
16	False	Suitable non-farm employment can absorb surplus labour and improve productivity.
17	True	Irrigation can enable multiple cropping and increase demand for agricultural labour.
18	False	Small-scale industries, construction, tourism and services can also generate employment.
19	True	Better infrastructure can improve market access, reduce transport difficulties and support economic activity.
20	False	Loans can support businesses, but success and permanent employment are not guaranteed.
21	True	Registration and applicable government regulations are key features of the organised sector.
22	False	Organised-sector employment exists in both public and private enterprises.
23	True	Formal employment arrangements make benefits and legal protections more likely, subject to applicable rules.
24	False	Organised-sector employees can lose their jobs under certain circumstances.
25	True	Unorganised workers may face irregular work, low wages and limited job security.
26	False	Unorganised-sector workers may be employed as casual labourers or self-employed people.
27	True	The unorganised sector includes both wage workers and self-employed workers.
28	False	Unorganised-sector workers often have fewer employment benefits and protections than organised-sector workers.
29	True	Minimum-wage enforcement can help prevent workers from receiving less than the legally prescribed minimum wage.
30	False	Workplace safety is important in every sector because workers can face injury and health risks.
31	True	Social security can provide support against risks such as illness, old age and loss of income.
32	False	Unorganised-sector workers also need protection from exploitation and insecure working conditions.
33	True	Public-sector enterprises are owned or controlled by the government.
34	False	Some public services are free or subsidised, while others charge fees.
35	True	Government investment may be justified by public welfare and long-term social benefits rather than immediate profits alone.
36	False	Efficiency varies between enterprises; public-sector enterprises are not always more efficient than private ones.
37	True	Private-sector enterprises are generally owned by individuals or private organisations.
38	False	Private businesses create employment by hiring workers to produce goods and provide services.
39	True	Ownership, rather than whether a service is essential, determines whether an enterprise belongs to the public or private sector.
40	False	Private enterprises generally charge for their goods and services, although particular services may be subsidised or provided free.
41	True	Government ownership or control is a key feature of the public sector.
42	False	Enterprises producing similar goods can have different ownership structures.
43	True	Both sectors can produce goods, provide services and generate employment.
44	False	The private sector consists of privately owned enterprises, not enterprises owned by the central government.
45	True	Government provision may be necessary when essential services are insufficiently available or unaffordable through private businesses.
46	False	Public-sector activities may aim to promote public welfare and provide essential services, not just maximise profits.
47	True	Infrastructure and social services can improve productivity, human capabilities and economic development.
48	False	Private businesses may not provide every essential service universally or at affordable prices, so government involvement can be necessary.
49	True	Safe drinking water and sanitation help prevent disease and protect public health.
50	False	Public facilities can benefit entire communities, including people who do not pay separately for each service.
51	True	Education can improve skills, opportunities and the productive capacity of people.
52	False	Poor sanitation can spread disease and affect the health of the wider community.
53	True	GDP measures the value of final goods and services produced within a country’s domestic territory during a specified period.
54	False	GDP includes final goods and services produced in the primary, secondary and tertiary sectors.
55	True	Sectoral GDP contributions help explain the composition and changes in an economy.
56	False	GDP measures production; it does not directly reveal how equally income is distributed.
57	True	Bread bought by a household for consumption is generally a final good.
58	False	A business may buy a final good, such as machinery used as a capital asset.
59	True	Intended use matters: the same product may be final in one situation and intermediate in another.
60	False	Final services, including haircuts, are included in GDP.
61	True	Counting wheat, flour and bread in full at every stage can count the same value more than once.
62	False	Intermediate goods have economic value but are not counted separately alongside final goods in the final-goods approach to GDP.
63	True	Value added equals the value of output minus the value of intermediate inputs. Summing value added avoids double counting.
64	False	Double counting overstates the value of production and reduces the accuracy of GDP measurement.
65	True	Disguised unemployment occurs when some workers can be removed without reducing total output.
66	False	Underemployment occurs when people work but their labour is not fully utilised; it does not require complete absence of a job.
67	True	If fewer workers can produce the same output, the activity may have surplus labour.
68	False	Disguised unemployment is common in agricultural situations where too many people depend on limited work.
69	True	Infrastructure projects create direct jobs and can support further economic activities.
70	False	Economic growth does not automatically guarantee sufficient productive employment for everyone.
71	True	Small-scale industries and rural services can diversify livelihoods and reduce dependence on agriculture.
72	False	Non-farm activities such as tourism, manufacturing, transport and trade can generate rural employment.
73	True	Under the original MGNREGA framework, eligible rural households demanding work were guaranteed at least 100 days of unskilled manual wage employment per financial year.
74	False	MGNREGA was a rural wage-employment guarantee programme, not a guarantee of permanent government jobs for every rural adult.
75	True	Rural employment programmes can provide additional wage income when agricultural work is limited.
76	False	Rural employment programmes can support village development through public works and the creation or improvement of useful rural assets.

Part 2: Consolidated Tabular Answer Key

Q. No.	Answer	Q. No.	Answer	Q. No.	Answer	Q. No.	Answer
1	True	20	False	39	True	58	False
2	False	21	True	40	False	59	True
3	True	22	False	41	True	60	False
4	False	23	True	42	False	61	True
5	True	24	False	43	True	62	False
6	False	25	True	44	False	63	True
7	True	26	False	45	True	64	False
8	False	27	True	46	False	65	True
9	True	28	False	47	True	66	False
10	False	29	True	48	False	67	True
11	True	30	False	49	True	68	False
12	False	31	True	50	False	69	True
13	True	32	False	51	True	70	False
14	False	33	True	52	False	71	True
15	True	34	False	53	True	72	False
16	False	35	True	54	False	73	True
17	True	36	False	55	True	74	False
18	False	37	True	56	False	75	True
19	True	38	False	57	True	76	False