Indian Economy Quiz 3

Excise duty is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). Excise duty on a commodity is payable with reference to its production.

Foreign indirect investment (FII) involves corporations, financial institutions, and private investors that purchase shares in foreign companies that trade on a foreign stock exchange.

National income is the sum total value of all goods and services produced in the country during a period of one year.

Once a crop is seeded, for example, farmers have limited ability to alter the quantities they put on the market. Therefore, in the short-term, market supply is relatively inelastic or unresponsive. Demand for most farm products is inelastic. People can consume only so much then they are satiated. Even if price drops they will not buy much more.

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.

Mahatma Gandhi first featured on currency notes in 1969. Mahatma Gandhi series of ₹100 notes has a picture of Indian Himalayan mountain ranges on its reverse which is of ecological and environmental significance.

“Supply creates its own demand” was said by JB Say. If a businessman produces a good, then he will be keen to sell it. This production creates wages for workers and income for the businessman. Therefore, the production has increased wealth and leads to demand for other goods.

Stagflation is an economic condition that's caused by a combination of slow economic growth, high unemployment, and rising prices.

Economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced. A decrease in cost per unit of output enables an increase in scale.

Alternative cost is otherwise known as Opportunity cost. Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision.