Indian Economy Quiz 7

Ceteris paribus is a Latin phrase that generally means “all other things being equal.” In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.

In India, one-rupee coins and notes and subsidiary coins are issued by the Central Government. The Indian 1-rupee note (₹1) is the smallest Indian banknote in circulation and the only one being issued by the Government of India, as all other banknotes in circulation are issued by the Reserve Bank of India.

The internal value of money is the value of money when buying goods and services. The external value of money is what the currency is worth, as measured in foreign currency. This is the exchange rate. Devaluation is the deliberate downward adjustment of the value of a country's money relative to another currency.

Non-plan expenditure is what the government spends on the so-called non-productive areas, such as salaries, subsidies, loans and interest, while plan expenditure pertains to the money to be set aside for productive purposes, like various projects of ministries.

Capital output ratio is the amount of capital needed to produce one unit of output.

In India, the Minimum Wages Act was enacted in 1948. It is an Act of Parliament concerning Indian labour law that sets the minimum wages that must be paid to skilled and unskilled labours. The Act gives both the Central government and State government jurisdiction in fixing wages.

The existence of Black money leads to the creation of a parallel economy. It makes the monetary policies less effective as the government cannot account properly for the money which is not formally included in the system.

Goods and Services Tax (GST) is an indirect tax used in India on the supply of goods and services. The GST is imposed at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer.

Rate of interest is determined by Liquidity preference. Liquidity Preference Theory is a model that suggests that an investor should demand a higher interest rate or premium on securities with long-term maturities that carry greater risk because investors prefer cash or other highly liquid holdings.

The United Kingdom, under Margaret Thatcher started privisation of state-owned enterprises as a major state policy. The Ridley report devised for the Thatcher shadow cabinet, recommended a policy of breaking up the public sector and dismembering unions.