(a) Consumers are exploited in the market in the following ways :
1. By giving defective goods : The consumers can be exploited by the seller of the product by giving defective goods, i.e., which are not upto mark.
2. Charging high prices : The consumers can be exploited by charging high prices. Prices can be charged high when customer is not aware or shortage of product prevails. Reasons for consumers exploitation are :
1. Shortage of supply : In most of the developing or under-developing economies population is very high. So demand for the products is also very high. But due to under-development of industry there is a shortage of supply. This gives rise to hoarding and price rise.
2. Limited competition : Due to under-development of industry there is lack of competition in the market. This may lead to exploitation of the consumer.
3. Illiteracy and ignorance of the consumers : In most of the developing and under-developed economies illiteracy rate is very high so consumers can be easily cheated by the producer.
(b) Four principle reasons for increase in public expenditure are as follow :
(i) Defence : An important factor responsible for increase in public expenditure is the large defence expenditure that the government allocates to defend its country from the attack of other countries so as to maintain its sovereignty
(ii) Population growth : In India, the population has increased at an alarming rate. It has increased from 36 crores in 1951 to 125 crore in 2011. As a result, the government has to incur great expenditure to meet the requirements of increasing population.
(iii) Developmental work : Modem state has also taken up developmental work in addition to their primary functions of administration and defence. It require huge public expenditure.
(iv) Rise in price level : As a result of the rise in price level, the public expenditure has gone up everywhere. The reason is that, the private individuals and also the government have to buy goods and services from the market at higher prices.
