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Name the accounts in the balance of payments (BOP)? Answer: a. Current account: It exhibits the imports and exports of services and goods and transfer payments.b. Capital Account: It exhibits the as
Fiscal deficit: When the total government expenses are more than total government receipts exclusive of borrowing it is termed as fiscal deficit. Fiscal deficit = Total Government Expenditure –
Primary deficit: Primary deficit is the difference among fiscal deficit and interest payments prepared by the government Primary deficit = Fiscal deficit – Interest payments
Revenue deficit in government budget: Whenever the revenue expenses of the government is more than the revenue receipts it is termed as revenue deficit Revenue expenditure > Revenue receipts
Government budget: Government budget demonstrates the estimated receipts and estimated expenses of the government for 1-year.
Multiplier: The Multiplier is the ratio of change in income by the change in investment. Multiplier (k) = ΔY/ΔI
Autonomous investment: Investment that is made up without depending on the gain of the enterprise.
Define deficient demand or deflationary gap: Deficient demand occur whenever AD is less than AS at the level of full employment equilibrium
State excess demand or inflationary gap: Excess demand takes place whenever AD is bigger than AS at the level of full employment equilibrium.
Determine relationship between MPC and MPS? Answer: MPC + MPS = 1
Involuntary unemployment: Involuntary unemployment terms to a condition in which people that are willing to work are unable to obtain work.
Legal tender money: Money which is declared legally as the medium of exchange by government is termed as legal tender money.
Double coincidence of wants: This means that one person's wishing to buy and sell should coincide with another person’s wish to buy and sell.
Bank rate: This is the rate at which the central bank loans money to commercial bank.
Meaning of Cash Reserve Ratio (CRR): It is the percentage of net or total deposits of commercial bank that are maintained by RBI.
Is transfer income involved in national income? Explain Why? Answer: No, since transfer income does not effect in the production of services and goods.
Normal resident: The persons or an institution who lives in a country and whose centre of interest lies in that country is termed as a normal resident of that country.
Economic Territory: This refers to the region of a country where there is a free movement of goods, capital and human resources.
Macro Economics: Macro economics studies the economy as an entire.
Why is demand curve is beneath oligopoly indeterminate (i.e., uncertain)? Answer: Demand curve is indeterminate since of price war among sellers.
In which market form, the firm is a price taker? Answer: In Perfect competition
In which market form, the products are distinguished. Answer: In Monopolistic competition
Equilibrium price: The Equilibrium price refers to a price at which the market demand and market supply are equivalent.
Fixed cost: Fixed costs refer to cost that remains constant as output modifies. For example: rent
Why is the ATC bigger than AVC? Answer: ATC is bigger than AVC since ATC comprises AVC and AFC