Indian Economy Quiz 3

The demand for a commodity changes due to a change in price. It is called extension and contraction of demand. When there is decrease in price of a commodity there is increase in demand of that commodity.

The term “labour-intensive” refers to a process or industry that requires a large amount of labour to produce its goods or services. The degree of labour intensity is typically measured in proportion.

Goods and Services Tax, is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer.

Green Banking is any form of banking from which the country gets environmental benefits. A conventional bank becomes a green bank by directing its core operations towards the betterment of the environment.

Bank rate is the rate charged by the central bank (RBI) for lending funds to commercial banks. Lower bank rates can help to expand the economy by lowering the cost of funds for borrowers, and higher bank rates help to reign in the economy when inflation is higher than desired.

Per capita income or total income measures the average income earned per person in a given area in a specified year. It is calculated by dividing the area's total income by its total population. Per capita income is national income divided by population size.

The system of issuing and monitoring of money in the market is known as minimum reserve ratio. Minimum reserves allow credit institutions to smooth out fluctuations in liquidity such as those caused by the demand for banknotes.

GNP is the total value of all finished goods and services produced by a country's citizens in a given financial year. Basically, GNP signifies how a country's people contribute to its economy. It is commonly calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and any income earned by residents from overseas investments, minus income earned within the domestic economy by foreign residents.

When the price of a commodity falls, we can expect the demand for it to increase. The law of demand states that the quantity purchased varies inversely with price.

The Government of India (Ministry of Finance) has the sole right to mint coins. The responsibility for coinage vests with the Government of India in terms of the Coinage Act 1906. The Reserve Bank puts the coins into circulation on behalf of the Government of India.