Keynes' Theory of Employment

In Keynsian theory of income &employment determination, principle of effective demand occupies significant place.
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11th 5yr plan for agriculure

success achieved at the National Research Centre on Citrus, Nagpur and PAU

Ludhiana/ Abohar in multiplication of disease-free citrus planting material. These

centers should be replicated in different citrus growing belts at institution devoted

to citrus R&D. a total of eight such centres are recommended. These centers

provide with large net-houses for raising healthy rootstock seedlings and

establishment of containment facilities for maintenance of virus-free scion variety

stock plants. These centers are allocated a sum of Rs 1.1 crore each.

ii. The major cost involved in the production of tissue-cultured plant is the

expenditure involved in hardening. To make the tissue-cultured plants available

at affordable rate, the need is felt to establish large hardening facilities for tissue

cultured plants in different horticultural crops located in different crop clusters. It is

proposed that six new large scale hardening structures be installed in different

regions having demand for nearly 15-20 million plantlets per annum of different

horticultural crops. These centres be provided with Rs. 50 lakhs each for

establishing semi-hardened tissue cultured plantlets and then supplying to the

farmers.

iii. It is also proposed to establish a National Centre for Plant Disease Diagnosis in

horticultural crops at IIHR, Bangalore with a grant of Rs. 200 crores to conduct

research on disease management in different horticultural crops and serve as a National Facility for the entire country to have provision for sharing

facilities on hire for any study. There will a network of ten centres for production

of Molecular Diagnostic kits for different diseases affecting horticultural crops.

These centres should be given Rs. 1.0 crore each for creating these facilities.

iv. To strengthen the facilities for Horticultural Biotechnology and ancillary facilities at

the different public sector undertaking, i.e. ICAR institutes and SAU’s, 50 centres

already involved in micro propagation should be strengthened with budget

allocation of Rs. 200 crores to make available world class facility. .

v. A provision for Up-scaling of micropropagation activities in target horticultural

crops at different centres in public and private sector is also recorded. The

existing centres may be given financial support to create facility for large scale

multiplication and hardening facilities.

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Bank (commercial and Central)

1.      Bank is an institution which

1. Deals in shares and other assets
2. Deals in money
3. Not only deals in money but also creates money
4. Sells goods

2.      A commercial bank is that bank which

1. Purchases shares
2. advances loan for short period
3. Issues currency notes
4. Controls money supply

3.      Which is principle asset of bank

1. cash
2. Investment
3. Bank building
4. All of the above

4.      Which is not the main liability of bank

1. Capital
2. Reserve fund
3. Advances and loans
4. Bills payable

5.       Which term is not related to the banking system

1. Bank rate
2. Credit exaction
3. Fiscal Deficit
4. Cash reserve ratio

6.       A cheque can be drawn against the following account

1. Debenture account
2. Share account
3. Current account
4. Time deposit account

7.      While sanctioning over draft facilities the bank allow his customers

1. To withdraw money from their account up to any limit
2.  To withdraw time deposits
3. To withdraw money from their account
4. None of above

8.      If the required ratio is 100% multiple expansion of bank deposits would be

1. 200 %
2. zero
3. 500 %
4. 50 %

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Phillips Curve

This theory of inflation was presented by A.M.Phillips,known as the Phillips Curve Hypothesis.The P.C. shows an inverse relationship between rate of unemployment and annual rate of change of money wages or prices.
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The Paradox of Thrift

The paradox of thrift arises  when all people in a society try to save more but infact they are unable to do so.The multiplier theory of Keynes helps a good deal in explaining this paradox.
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Types of public investment expenditure

There are two types of public expenditure-Pump priming &Compensatory expenditure.
Pump priming expenditure-It refers to an investment ,specially by a govt,in order to encourage growth in a business or an industry.The  policy should be adopted temporarily and should be depressed off when the need is over
Compensatory expenditure-This technique means heavy govt expenditure in a period of depression and a gradual reduction of such expenditure when we gradually recover from a depression,and negative spending when a period of boom is reached.
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What is Value Added Tax?

Value Added Tax

By definition, VAT is a tax levied on the value added at each stage of production and distribution process. It is an ideal form of consumption taxation since the value added by a firm represents the difference between its receipts and cost of purchased inputs

Value Added Tax (VAT) is a general tax on commodities to replace sales tax, surcharge and other entry level taxes levied by the states and Union Territories

VAT is levied on sale of all taxable goods. VAT is not levied if sales of goods are not made in the course of furtherance of business

VAT is collected in stages: tax paid on purchases (input tax) is rebated against tax payable on sales (output tax). The concept of second sale or resale tax is done away with

VAT can be computed using one of three techniques

Subtraction method: tax rate is applied to the difference between the value of the output and the cost of the input

Addition method: the value added is computed by adding all payments that is payable to the factors of products (wages, interest payments etc)

Tax credit method: this entails the set off of the tax paid on inputs from tax collected on sales

India uses the tax credit method for VAT computation

Advantages of VAT include

1. Tax evasion becomes difficult. Businesses compelled to keep proper record of purchases and sales, and keep a trail of invoices
2. Avoids problem of undervaluing
3. Increase in revenue as tax net widens
4. Uniformity in tax regime avoids confusion
5. Permits easy and effective targeting of tax rates, as a result of which exports can be zero-rated
6. Parity with tax structures in other countries

mcq for Money

1.      Which of the following is an adequate definition of money?

a.       Anything which is accepted for tax payments.

b.      Anything which is exchanged of fixed rate of gold.

c.       Anything which banks are willing to accept.

d.      Anything which is generally accepted in exchange for goods and services.

2.      Which of these qualities of money is essential before it can perform any of its functions.

a.       Acceptability

b.      Stability in value

c.       Durability

d.      Cognizibility

3.      Which of the following is not the necessary condition of money?

a.       It is a unit of account

b.      It is a store of value

c.       It has intrinsic value

d.      It is medium of exchange

4.      Which of the following is not the indirect importance of money in the field of economics?

a.       Freedom from inconvenience of barter system

b.      Index of economics development.

c.       Basis of laws of equi-marginal utility.

d.      Measure of social welfare.

5.      Which one of the following does not cover the economics evils of money?

a.       Instability of value

b.      Reduction in consumption

c.       Trade cycle

d.      Problem of black money.

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Economic Effects of Tsunami

After Tsunami Japan has faced the loss of 170 billion dollar approx.Consequentely the sensex has rolled down to 6.5 percent.

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Regional Rural Banks

Regional Rural Banks (RRBs) play a significant role in financing the target group in the rural sector. They are specially designed financial instituions working under the guidance of NABARD and the parent commercial banks, spread in rural area with a close network of brances serving a particular district or region.

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Rural Development in Rajasthan

These programmes are essential to reduce poverty among rural masses.the main objectives are development of strong infrastructure for socio economic development of rural areas.The Department of Rural Development is implementing various schemes, out of which some oare centrally sponcered, while others are states only. the various rural development programs are as follows:

Centrallt Sponsored   Scheme

• Jawahar Gram Smaridhi Yojana
• Desert Development Programme
• Drought Prone Area Programme

State Sponsored Scheme

• Untied Fund
• Rural Growth Center
• Apna Gaon, Apna Kaam Yojana

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Micro and Macro -Economics

The term microeconomics is derived from the Greek word mikros,meaning "small" and the term macroeconomics is derived from the Greek word macros,meaning "large".Thus microeconomics deals with the small individual units of the economy such as individual consumers,individual firms and small aggregates.On the other hand ,macroeconomics concerns itself with the analysis of the economy as a whole and its aggregates such as total national income and output,total employment,aggregate investment.
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Classical Theory of Income and Employment

Classical economists believed that in a free market economy there was a tendency toward the establishment of full employment of labour and there was sufficient demand for the output produced.

                   Classical theory of employment and output is based on the following two basic notions:
1.Say's Law
2.Wage -price flexibility
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Public Expenditure

Public expenditure is an important part of public finance.In Ancient times ,the functions of the state were limited and consequently the scope of public expenditure was limited .But in modern times ,the state activities are increasing being the welfare state and the public expenditure has increased enormously.
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canons of taxation

Taxes are a major source of revenue for modern governments. A tax is a compulsory payment to the government by tax payer without any expectation of some specified return. In order to meet trhe traditional and developmental obligations the government has to raise the revenue through the taxation either by increasing the rates of existing taxes or imposing new taxes.

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Reserve Bank of India(RBI)

RBI is an apex institution of our country.The RBI started working since,1st April ,1935 in accordance with the provision of the Reserve Bank of India Act ,1934.Governor is the highest authority of RBI.He is appointed by the Government of India for a term of 5 years.He can re-appointed for another term.At present Dr.D.Subba Rao is the Governor of RBI.


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Inflation

Question: What is Inflation?

Answer: Inflation is when the prices of most goods and services continue to creep upward. It is measured by the Consumer Price Index [CPI]. .

Inflation can affect different parts of the economy at different times. For example, oil prices move up and down rapidly, because they are driven by the bids on the price of oil futures contracts. As a result, gas prices are also very volatile. This can drive up the price of food, which is usually transported long distances. For this reason, the price of food and energy is left out of the core inflatio rate. This is used by the Federal Reserve as a better indicator of true inflation.


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Budget

The term budget is derived from French word Bougett which means a sack or pouch.It was a leather bag from which the Britsh Chancellor of Exchequer extracted his papers to present to the Parliament the governments financial plan for the ensuing fiscal year.The budget is a statement of the estimated receipts and expenditure of the government in respect to a financial year.
The following points highlight the functions of budget.
1.It ensures the financial and legal accountability of the executive to the legislature.
2.It is an instrument of social and economic policy to serve the function of allocation,distribution and stabilisation.
3.It facilitates the efficient execution of the functions and services of the government.
4.It facilitates administrative management and coordination as it unifies the various activities of the government departments into a single plan.
5.It ensures the accountability of subordinates to superiors in administrative hierarchy.
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Indian Economy

Why do we call Indian economy a developing economy?
India possesses vast amount of unutilized and under-utilized natural resources and substantial surplus manpower as well. But there is a shortage of capital and lack of modern technology so essential for the development of the economy on modern lines.

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