Indian Economy Quiz 7

Laissez-faire is an economic philosophy of free-market capitalism that opposes government intervention. The doctrine of laissez-faire is usually associated with the economists known as Physiocrats, who flourished in France from about 1756 to 1778. The term laissez-faire means, in French, “allow to do.”

Monopolistic competition characterizes an industry in which many firms offer products or services that are similar (but not perfect) substitutes. Hair salons, restaurants, Toothpaste, clothing, consumer electronics, etc. are some examples of products that are sold under monopolistic competition.

The birth rate in a period is the total number of live births per 1,000 population divided by the length of the period in years.

Population density is the number of individuals per unit geographic area, for example, number per square meter, per hectare, or per square km.

In the case of temporary inflation, the central bank (RBI) generally attempts to reduce the money supply in the economy so as to ease the demand pressure. This helps in arresting price rises in the economy.

In a capitalist society the prices of goods, services and labour are determined by supply and demand. If a lot of people want to buy a certain product its price will go up. Products that are mass produced usually have low 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.

Consumer sovereignty is a theory that states the fact that consumers have the power to determine which products or services are actually produced in a given economy. It is an idea that places the customer's preferences in the centre of the product development funnel.

Stamp duty is levied by the Union and appropriated and planned by states. The central government requires stamp duty to be paid on several classes of transaction documents, primarily focused on securities, under the Indian Stamp Act, 1899.

Monopolistic competition characterizes an industry in which many firms offer products or services that are similar substitutes. Excess capacity is more defined under monopolistic competition due to the nature of the market structure.