Indian Economy Quiz 7

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

The taxation system in India empowers the state governments to levy income tax on agricultural income, professional tax, state excise duty, land revenue and stamp duty. The Central Government of India levies taxes such as customs duty, income tax, Goods and service tax (GST), and central excise duty.

The demand for a commodity changes due to a change in price. It is called extension and contraction of demand. When there is decrease in price of a commodity there is increase in demand of that commodity.

Excise duty is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). Excise duty on a commodity is payable with reference to its production.

The term 'secular stagnation' refers to a state of little or no economic growth – in other words, an environment where the economy is essentially stagnant.

“Economics is what it ought to be” - This statement refers to Normative Economics. Normative economics is a part of economics whose objective is fairness or what the outcome of the economy or goals of public policy ought to be.

“Bad money tends to drive good money out of circulation when both are full legal tender.” This principle is known as Gresham's Law. Gresham's law was originally based on the composition of minted coins and the value of the precious metals used in them.

A fiscal deficit is a difference between total expenditure and total receipts. In other words, it is a shortfall in a government's income compared with its spending. The government that has a fiscal deficit is spending beyond its means.

It is called Operations Research (OR). OR is an analytical method of problem-solving and decision-making that is useful in the management of organizations.

Gross National Product (GNP) is the total value of all finished goods and services produced by a country's citizens in a given financial year, irrespective of their location. GNP also measures the output generated by a country's businesses located domestically or abroad.