(i) Models in Mathematical Economics are developed based on Economic Theories, while Econometric Models are developed based on Economic Theories to test the validity of Economic Theories in reality through the actual data.
(ii) Regression Analysis in Statistics does not concentrate more on error term while Econometric Models concentrate more on error terms  

To accelerate and strengthen market mechanism:
1. The market mechanism works imperfectly because of ignorance and unfamiliarity with it.
2. There is non monetized sector, unorganized factor, product, money and capital markets.
3. Therefore a planned economy is a better substitute for free economy.
To remove unemployment:
1. Capital is scarce, labour abundant so there is unemployment and disguised unemployment in UDCs.
2. So planning is needed.
To achieve bàlanced development:
1. For rapid economic development UDC needs planning to develop agriculture, industrial, establish socio and economic overheads and expand domestic and foreign trade.
Development of agriculture and industries:
1. Reorganization of agriculture releases surplus labour force which is absorbed by the industrial sector.
2. Development of agriculture is essential to supply raw materials for industries.
Development of infrastructure:
1. Canals, roads, railways, power stations are needed for agriculture and industries.
2. These economic and social overheads need huge capital investment and have long gestation period and low rate of return.
3. Only the state can provide this through planning.
Development of money and capital market:
1. Planning alone can provide sound money market and capital market.
To remove poverty and inequalities:
1. Planning raises national and per capita income, reduces inequalities and poverty and increases employment opportunities.

(i) Land pollution is defined as, "the degradation of land because of the disposal of waste on the land".
(ii) Any substance that is discharged, emitted or deposited in the environment in such a way that it alters the environment causes land pollution.
Causes:
Deforestation and soil erosion:
(i) Deforestation carried out to create dry lands is one concern.
(ii) Land that is once converted into a dry land can never be made fertile again.
Agricultural activities:
(i) With growing human and pet animal population demand for food has increased.
(ii) Farmers use highly toxic fertilizers and pesticides which contaminates and poisons the land.
Mining activities:
(i) During extraction and mining, several land spaces are created beneath the surface.
Landfills:
(i) Garbage like plastic, paper, cloth, wood and hospital waste get accumulated.
(ii) Things that cannot be recycled become a part of the landfills that cause land pollution.
Industrialization:
(i) Due to increasing consumerism more industries are developed which lead to deforestation.
Construction activities:
(i) Due to urbanisation, large amount of construction activities are taking place.
(ii) Waste articles like wood, metal, bricks, are dumped at the outskirts of urban areas that lead to land pollution.
Nuclear waste:
(i) The leftover radioactive materials, harmful and toxic chemicals affect human health.
(ii) They are dumped beneath the earth to avoid any casualty.

(i) Primary deficit is equal to fiscal deficit minus interest payments. PD = Fiscal deficit (FD) - Interest Payment (IP)
(ii) It shows the real burden of the government and it does not include the interest burden on loans taken in the past.
(iii) It shows the borrowing requirement of the government exclusive of interest payments.

The main functions of SAARC are as follows.
1) Maintenance of the cooperation in the region.
2) Prevention of common problems associated with the member nations.
3) Ensuring strong relationship among the member nations.
4) Removal of the poverty through various packages of programmes.
5) Prevention of terrorism in the region.

Inclusive growth, Trade issues, Global governance, Shared Prosperity, International peace and security.

(i) It is a trade restriction that sets a limit on the quantity of a good that can be imported into a country in a given period of time.
(ii) Quotas are used to benefit the producers of good in that economy.

S. No.	Money Market	Capital Market
(1)	Short term funds are loaned and borrowed	Long term funds are loaned and borrowed
(2)	It deals with purchase, sale and transfer of short term credit instruments.	It raises capital by dealing in shares, bonds mortgages and other long term investments.
(3)	Commercial banks, acceptance houses, Non Banking Financial Institutions and the Central Bank deals with short term funds	Instruments traded in capital market comprise of equity shares, preference. shares, Debentures, bonds and other long term securities.

(i) The Marshall equation is
M = KPY where
(ii) M is the quantity of money
(iii) Y is the aggregate real income of the community
(iv) P is purchasing power of money
(v) K is the fraction of the real income which the public desires to hold in the form of money.
P= M / KY
(vi) The value of money is 1 / P = KY / M.

S. No Accelerator Effect Multiplier Effect 1. First developed by R. F. Khan redefined by Keynes Developed by J.M. Clark. Further developed by Hicks, Samuelson 2. It is the ratio of the change in national income to a change in investment.
\(K=\frac{\Delta Y}{\Delta I}\) It is the ratio between induced investment and an initial change in
consumption
\(\beta=\frac{\Delta \mathrm{I}}{\Delta \mathrm{C}}\)

(i) In the Keynesian model, output is determined mainly by aggregate demand.
(ii) The aggregate demand is the amount of money which entrepreneurs expect to get by selling the output produced by the labourers employed.
(iii) Aggregate demand (spending) is the amount that households, firms, the governments and the foreign purchasers would like to spend on domestic output
Aggregate demand has four components:
1. Consumption demand (C)
2. Investment demand (I)
3. Government expenditure (G)
Net Export ( export - import) (X - M)
AD = C + I + G + (X - M)

(i) A country with a high national income enjoys greater economic welfare and higher standard of living.
(ii) But the per capita income as an index of economic welfare has some limitations.
(iii) Welfare depends on the composition of goods and services. If more capital goods over consumer goods are produced welfare will be lesser.
(iv) Higher GDP with greater air, water, soil pollution will affect welfare.
(v) Production of war goods will increase output but not welfare.
(vi) If more women and children are employed or workers are forced to work for long hours economic welfare is affected.
(v) Therefore the Physical Quality of Life Index is a better indicator of economic welfare than national income.

(i) The means of production and properties are owned by private and public.
(ii) Public and Private Sectors co-exist private sectors are profit motivated and public sectors aims at maximum social welfare.
(iii) The national plans prepared by the central planning authority is accepted by all sectors.
(iv) Basic economic problems are solved through the price mechanism and state intervention.
(v) Though the private can own resources, produce and distribute goods and services, the overall control on the economic activities is with the government.