Indian Economy Quiz 7

India's biggest nationalised enterprise today is Indian Railways. It manages the fourth largest railway network (after US, Russia and China.) in the world by size, comprising 1,21,407 km of track length over a route of 67,368 km.

GNP (Gross national product) includes what is produced domestically and what is produced by domestic labour and business abroad in a year. NNP (Net national product) is GNP minus depreciation. Depreciation is the process by which capital ages over time and therefore loses its value.

Production function is the maximum set of output(s) that can be produced with a given set of inputs. Use of a production function implies technical efficiency.

Excise duty is a form of indirect tax that is levied by the Central Government of India for the production of goods. Excise duty has been replaced by the Goods and Services Tax (GST) w.e.f. 1 July 2017. Today, excise duty applies only on petroleum and liquor.

Stagflation is an economic condition that's caused by a combination of slow economic growth, high unemployment, and rising prices.

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.

Taxes imposed by the state government are; Sales Tax and VAT, Professional Tax, Luxury Tax, Entertainment Tax, House tax, Motor Vehicles Tax, Tax on Vehicles Entering State, Tax on Agricultural Income, Tax on Land and Buildings and Tax on Mineral Rights.

Marginal product refers to the extra output, return, or profit yielded per unit by advantages from production inputs. When Total Product rises at an increasing rate, marginal product also rises. When Total Product increases at a diminishing rate, marginal product declines.

Scheduled Banks in India refer to those banks which have been included in the Second Schedule of Reserve Bank of India Act, 1934. Reserve Bank of India in turn includes only those banks in this Schedule which satisfy the criteria laid down vide section 42 of the said Act.

As per the Constitution of India, the Finance Commission is appointed every five years and consists of a chairman and four other members. The Finance Commission is constituted by the President under article 280, mainly to give its recommendations on distribution of tax revenues between the Union and the States.