Indian Economy Quiz 7

When the government disinvests its shares to the extent of 4 to 5 percent to meet the deficit in the budget, this is termed deficit privatization or token privatization.

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 Excise duty has been replaced by the Goods and Services Tax (GST) w.e.f. 1 July 2017.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.

The size of the landholdings is declining in India due to the shortage of land which has been used for industrial and other purposes. Many land goes to the private sector for setting up big projects. The main factors triggering land fragmentation are inheritance; population growth; land markets; and historical/ cultural background. Owning of land is a social status in India.

Price theory is a microeconomic principle that uses the concept of supply and demand to determine the appropriate price point for a given good or service.

The break-even point (BEP) is the point at which total cost and total revenue are equal, i.e. “even”. In investing, the break-even point is said to be achieved when the market price of an asset is the same as its original cost.

Bondholders are creditors of a corporation. A bondholder is an investor who acquires bonds issued by an entity such as a corporation or government body. If the stockholder also owns corporate bonds, then that shareholder becomes the creditor. bondholders enjoy certain protections and priority over stock (equity) holders.

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.

Personal disposable income is equal to personal income minus direct taxes. It is the amount of money that an individual or household has to spend or save after income taxes (direct taxes) have been deducted.

Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). SDRs are units of account for the IMF, and not a currency per se. They represent a claim to currency held by IMF member countries for which they may be exchanged.

Usefulness is the benefit that is derived by consuming a commodity whereas utility is the want satisfying power of a commodity. A commodity having utility need not be useful.