Indian Economy Quiz 6

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.

Bull and bear are related to the Stock market. The share broker who sells shares in the apprehension of falling prices of shares is called Bear. A 'bull' by definition is an investor who buys shares because they believe the market is going to rise; whereas a 'bear' will sell shares as they believe the market is going to turn negative.

Kuwaiti Dinar or KWD has crowned the highest currency in the world. Dinars is the currency code of KWD. Among given currencies, the Pound is the highest value in terms of the rupee.

Domestic private savings is the domestic source of planned finance. Private saving is the total amount of savings done by the private (financial and non-financial) corporations and household sectors.

The process of capital formation includes increasing savings, mobilization of savings, and investment of saving in such a way that will increase the stock of real capital.

Three Important Methods for Measuring National Income are - Income Method, Product/ Value Added Method and Expenditure Method.

Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade.

RBI is required to maintain a Gold and Foreign Exchange Reserves of ₹200 Crore of which at least ₹115 Crore should be in Gold. This is called Minimum Reserve System.

The product or value-added method is a way of computing the national income of a country. This system is also known as output or inventory method.

Budget deficit is the difference between total expenditure and total receipts. The solution to a budget deficit for a government would be to increase taxes, find new avenues for revenue and reduce government spending. Fiscal deficit is calculated by subtracting the total income from the total expenditure.