Indian Economy Quiz 3

Tea and coffee are examples of Substitute goods. Substitutes present the consumer with alternative choices. If the price of one good falls, then demand for the substitute is likely to decrease.

Consumption is the use of utility whereas production is creation of utility. In fact, their difference is not so fundamental. Both these are two different aspects of the same activity. For example, when a carpenter makes a chair, he performs an act of production by increasing the utility of log of wood.

NSSO (national sample survey organization) is the organization under the ministry of statistics of the government of India. It conducts socio-economic surveys on various subjects like employment, consumer expenditure, health, unemployment, and medical services, etc.

Gross Domestic Product (GDP) measures the value of goods and services produced within a country's borders, by citizens and non-citizens alike. Gross National Product (GNP) measures the value of goods and services produced by only a country's citizens but both domestically and abroad. Hence, If the firm sells new shares directly to individuals it has no effect on the GDP or GNP.

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.

The term merchant bank refers to a financial institution that conducts underwriting, loan services, financial advising, fundraising services and finances to international trade for large corporations and high-net-worth individuals (HWNIs). Unlike retail or commercial banks, merchant banks do not provide financial services to the general public.

A non-resident Indian is classified as an individual who has gone out of India, or who stays outside India for employment or for carrying on business or any vocation.

Cheap money is money that can be borrowed with a very low interest rate or price for borrowing.

Excess reserves are capital reserves held by a bank or financial institution in excess of what is required by regulators, creditors, or internal controls.

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