Indian Economy Quiz 3

Opportunity cost is the value of the next best alternative forgone as a result of making a decision. When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource.

The World Bank Chennai is the extension of the World Bank headquartered in Washington, DC. The Chennai office offers corporate financial, accounting, administrative and IT services for the Bank's offices in around 150 countries.

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.

Export diversification refers to the move from “traditional” to “non-traditional” exports. Diversification helps countries to hedge against adverse terms of trade shocks by stabilizing export revenues.

The birth rate in a period is the total number of live births per 1,000 population divided by the length of the period in years.

Fiscal policy refers to the use of the government budget to affect the economy. This includes government spending and levied taxes. In deficit financing, a government spends more money than it receives as revenue, the difference being made up by borrowing or minting new funds.

The finance commission recommends the principles governing the grants-in-aid of the revenues of the States out of the Consolidated Fund of India. Finance Commission was established to make recommendations to the president about how the net proceeds of taxes have to be distributed between the Union and the states, as well as how the funds have to be distributed among the states.

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.

Monopolistic competition characterizes an industry in which many firms offer products or services that are similar (but not perfect) substitutes. Hair salons, restaurants, Toothpaste, clothing, consumer electronics, etc. are some examples of products that are sold under monopolistic competition.

Interest on public debt is part of Transfer payments by the government. In economics, a transfer payment is a redistribution of income in the market system. Government debt is the debt owed by a central government. In the budget, it is listed among the transfer payments by the government.