Indian Economy Quiz 3

A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term progressive refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate.

The main advantage of devaluation is to make the exports of a country or currency area more competitive, as they become cheaper to purchase as a result. This can increase external demand and improvement in the balance of payment.

Engel's Law is an economic theory that describes the relationship between household income and a particular good or service expenditures. It states that as family income increases, the percentage of income spent on food decreases. Engel curve shows relationship between income and quantity demanded. The theory was introduced by German economist Ernst Engel in 1857.

It is called Operations Research (OR). OR is an analytical method of problem-solving and decision-making that is useful in the management of organizations.

The ratio of a bank's cash holdings to its total deposit liabilities is called the Cash Reserve Ratio (CRR). CRR is the amount of funds that the banks have to keep with the RBI.

Treasury bills are short-term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 days, 182 days and 364 days. Treasury bills are zero-coupon securities and pay no interest.

Producer surplus is the difference between how much a person would be willing to accept for given quantity of a good versus how much they can receive by selling the good at the market price. The difference or surplus amount is the benefit the producer receives for selling the good in the market.

In 2020-21, 28.5% of the revenue came from Goods and Services Tax (GST) followed by Corporate Tax, Personal Income Tax, Union Excise Duty and Customs Duty 28.1%, 26.3%, 11% and 5.7% respectively.

“Bad money tends to drive good money out of circulation when both are full legal tender.” This principle is known as Gresham's Law. Gresham's law was originally based on the composition of minted coins and the value of the precious metals used in them.

If supply is greater than demand, in the short run, firms will increase their inventories, because they store their excess supply.