NCERT Class 11 Economics — Chapter 7: Employment: Growth, Informalisation and Other Issues

mcqmedium

In an economic sense, the concept of "earning a living" is best defined as:

Official previous-year question

Verified 1 Aug 2026.

Options

AContributing to national income by engaging in economic activities.
BWorking only for self-satisfaction.
CInheriting money from ancestors.
DAccumulating wealth for future generations.

Did you get this right?

Solution

Correct Option

The correct option is Contributing to national income by engaging in economic activities.

Explanation

In economics, human activities are broadly classified into economic and non-economic activities. Economic are those undertaken to earn a monetary reward or financial gain. "Earning a living" specifically refers to engaging in these activities to generate factor income (such as wages, salaries, or profits), which corresponds to the value added to the economy.

Option Analysis

Inheriting money from ancestors. is Incorrect: Inheriting money is a transfer of wealth (transfer payment). It does not involve the production of new goods or services and does not contribute to the current flow of goods and services in the economy (National Income).
Contributing to national income by engaging in economic activities. is Correct: Earning a living implies active participation in the production boundary of the economy (providing labor or entrepreneurship). This engagement generates income and directly contributes to the National Income (Net National Product at Factor Cost).
Working only for self-satisfaction. is Incorrect: Activities performed solely for self-satisfaction, love, or social obligation (non-economic activities) do not involve monetary exchange. While they may have utility, they do not constitute "earning a living" in the formal economic sense.
Accumulating wealth for future generations. is Incorrect: Accumulating wealth is a result of saving income or capital appreciation. It is a stock concept related to asset holding, whereas "earning" is a flow concept related to income generation.

Key Takeaway: In an economic sense, "earning a living" is defined by the performance of economic activities that generate factor income and contribute to the country's National Income.

Your note

More from Chapter 7: Employment: Growth, Informalisation and Other Issues

With reference to the definition of ‘workers’ in the Indian economy, consider the following statements: 1. Self-employed individuals are considered workers in the Indian economy. 2. A person temporarily abstaining from work due to illness is excluded from the worker category. 3. Those who help main workers in economic activities without receiving direct payment are included in the category of workers. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the ‘Worker-Population Ratio’ in India: 1. It is defined as the total population divided by the number of workers. 2. The worker-population ratio is generally higher in rural areas compared to urban areas. 3. A higher ratio indicates that a greater proportion of the population is actively contributing to the production of goods and services. Which of the statements given above is/are correct?

medium

With reference to the concepts of Gross Domestic Product (GDP) and Gross National Product (GNP), consider the following statements: 1. GNP is calculated by deducting the value of exports from the GDP. 2. GDP is the total money value of all final goods and services produced in a country in a year. 3. The net earning from foreign transactions is always positive for a developing country like India. Which of the statements given above is/are correct?

easy

Consider the following statements regarding the participation of women in the workforce in India: 1. Women constitute the majority of the workforce in rural India. 2. The worker-population ratio for women is significantly higher in urban areas than in rural areas. 3. Many household activities performed by women are not recognised as productive work, leading to an underestimation of women workers. Which of the statements given above is/are correct?

medium

The term "Squatters" in the context of the informal sector refers to:

easy

Keep practising Chapter 7: Employment: Growth, Informalisation and Other Issues

Work through every question from this NCERT chapter.

Browse all NCERT Class 11 Economics chapters

Correct Option

The correct option is Contributing to national income by engaging in economic activities.

Explanation

Option Analysis

Inheriting money from ancestors. is Incorrect: Inheriting money is a transfer of wealth (transfer payment). It does not involve the production of new goods or services and does not contribute to the current flow of goods and services in the economy (National Income).
Contributing to national income by engaging in economic activities. is Correct: Earning a living implies active participation in the production boundary of the economy (providing labor or entrepreneurship). This engagement generates income and directly contributes to the National Income (Net National Product at Factor Cost).
Working only for self-satisfaction. is Incorrect: Activities performed solely for self-satisfaction, love, or social obligation (non-economic activities) do not involve monetary exchange. While they may have utility, they do not constitute "earning a living" in the formal economic sense.
Accumulating wealth for future generations. is Incorrect: Accumulating wealth is a result of saving income or capital appreciation. It is a stock concept related to asset holding, whereas "earning" is a flow concept related to income generation.

Key Takeaway: In an economic sense, "earning a living" is defined by the performance of economic activities that generate factor income and contribute to the country's National Income.