economics (civil services) 2008

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Economics

Some recent legislation covering economic issues

The companies (Second Amendment) act, 2002

It is an amendment of companies act, 1956, provides for both rehabilitation andwinding up of sick companies within a timeframe of a maximum of two years as

against the existing system, which takes about 18 to 26 years. The act also set up a

National Company Law Tribunal (NCLT), repealed the Sick Industries (Special

Provisions) Act, 1985, and dismantles the board for Industrial Finance andReconstruction (BIFR).

Under the law, a corpus fund is to be created, known as rehabilitation fund, for

taking care of sick companies and their investors as per the global standards.

The Competition Act, 2003It seeks to repeal the Monopolies and Restrictive Trade Practices (MRTP) Act,

1969.in the place of MRTP Act, Competition Commission of India (CCI) will be set up.

The CCI has started functioning as a regulator like other regulators to give impetus

to quality or products and services, competition, faster mergers and acquisition of

companies and mergers coming within the threshold limits, allowing dominance,and prevention of abuse of dominance to give effect to the second-generation

economic reforms.

The provision of the Act will be implemented in 3 phases

1. The Money Laundering Act, 2003

It seeks to provide for reciprocal arrangement for assistance in certain

matters and procedures for attachment and confiscation of property to

facilitate transfer of funds involved in money laundering kept outside the

country and extradition of the accused person from abroad.

It also provides for setting up of money laundering tribunal and appeal arising

out of the orders of the tribunal to the money laundering appellate tribunal

and from there to the Supreme Court for offences relating to moneylaundering.

The Constitution (95th) Amendment Act, 2003

The Act empowers the centre to levy service tax and allows both the Centre

and the States to collect and appropriate service tax bill will be enacted to

operationalise and modalities including collection and appropriation of service tax.



Common Economic Terms

1. Account: - An account is a record of financial transactions in the

form of stock of flows. It is also an arrangement between a seller

and a buyer under which a period of credit is allowed before

payment. Up to the end of an account, transactions are madewithout payment and account dates are thus of vital importance to

speculators.

2. Ad Valorem Tax: - it is an indirect tax expressed as a proportion of

price of a commodity. Hence, it is ‘by value’. Value Added Tax is an

ad valorem tax.

3. Administered Tax: - the prices set by management (government)

decision rather than by negotiation between buyer and seller are

called administered prices.

4. Aggregate Demand :- it is the sum of all demand within an

economy, making up national income and expenditure. It includes

consumers expenditure on goods and services and investment in

capital goods and services.

5. Aggregate Supply:- it is the total of all goods and services

produced in an economy. It excludes exports but includes imports.

6. American Depository Receipts (ADR) :- it is a document issued

by a US bank against shares deposited with it or a bank overseas.

7. Amortisation :- it is a provision of repayment debt by means of accumulating a ‘sinking fund’ through regular payments.

8. Arbitrage: - it may be defined as an exploitation of differences

between the prices of financial assets, currency, or commodity

within or between markets by buying where prices are low and

selling where they are higher.

9. Assessable Profit: - it is the taxable profit of a business,

determined normally after the deduction of capital allowances,

interest and other business expenses.

10.Assets: everything that a company owns which has a money value

is classified as an asset.

11.Balance of Payment: - it may be defined as a tabulation of the

credit and debit transaction of a country with foreign countries and

international institutions. It is into current and capital account.



12.Bank rate :- it is now an obsolete term for the rate of interest at

which the Central Bank of a country lends to other banks.

13.Bankruptcy: - it refers to is a declaration by a court of law that an

individual or company is insolvent, i.e., it cannot meet its debts on

the due rates.

14.Barriers to entry: - they may be defined as the technical oreconomical factors which prevent or make it difficult for firms to

enter a market and compete with existing employers.

15.Bear :- A bear is a stock exchange speculator who sells stock or

shares that he may or may not possess because he expects a fall in

prices and therefore, that he will be able to buy them back later on

at a profit.

16.Bill of exchange: - It is similar to post-dated cheque. It is a term

used in international trade by which the drawer makes an

unconditional undertaking to pay to the drawee a sum of money ata given a date.

17.Birth Rate: - The crude birth rate is the average number of live

births occurring in a year for every 1,000 population.

18.Black Economy: - The black economy is marked by ‘underground’

economic activity that is not declared for taxation purposes. It is

also called parallel economy because its objectives run parallel or in

contradiction with the objectives or sanctioned sector.

19.Black Market: - Market may be defined as illicit trade in goods

produced legitimately in most cases.

20. Blue chip: - It is a first class equity share, the purpose of which

entails little risk, even when there is sharp decline in earnings, or

economic recession.

21.Bond: - it is a form of fixed interest security issued by government,

companies, banks or other institutions.

22. Book value:- it may be defined as the value of assets in the

balance sheet of a firm. This is often in the purchase price and less

than the market value.

23.Budget: - it is an estimate of income and expenditure for a future

period. The national budget sets out estimates of Central

government, expenditure and revenue for a given financial year.



24. Bull:- A bull is a stock exchange speculator who purchases stocks

and shares in the belief that prices will rise and that he will be able

to sell them again later at a profit.

25.Buyer’s market: - A market in which prices is falling, primarily due

to an excess of supply of the goods and services traded compared

with demand.

26.Call option: - it is a contract giving a right to buy shares from the

dealer making the contract at the price ruling at the time within a

specified future period.

27. Capital:-capital includes all assets which are capable of

generating income and which have themselves been produced. In

short, any asset or stock of assets – financial or physical- capable of

generating income is capital.

28. Capital formation: - also called investment, capital formation

refers to the change in the capital stock of an economy. Capitalformation includes fixed capital and inventories.

29. Capital intensive: - It is a mode of production of a commodity in

which, a higher proportion of capital is used.

30. Capital Market: - It is the market for long-term funds. It is not one

institution but all those institution that canalize the supply and

demand for long-term capital and claims on capital. E.g. the stock

exchange, banks, insurance companies, etc.

31. Carry over :- it is the postponement of the settlement of an

account on the tock exchange until the following period involving

payment of a rate of interest on the account.

32. Certificate of Deposit (CD):- it is a negotiable claim issued by a

bank in return for a term deposit.

33. Certificate of incorporation:- it is a document issued by the

registrar of companies certifying the legal existence of a company

after certain requirements for registration have been met.

34.Clearing House: - Any institution that settles mutual indebtedness

between a number of organizations is called a clearing house.

35.Closed Economy: - It is an economic system with little or no external

trade. It is opposite to open economy in which foreign trade,

payments, and movements of labour and capital into and out of a

country are unrestricted.



36.Consumer durables: - these are the products purchased by the

households. These products are designed to yield benefits spread

over a number of years.

37.Consumer good: - an economic good or commodity purchased by

households for final consumption is called consumer goods.

38.Contracting out: - it is type of privatization. It is the practice of governments or firms of employing an outside agent to perform

some task rather than perform it themselves.

39. Corporation tax: - it is a type of tax levied on the assessable

profits of companies and unincorporated associations.

40. Cost-push inflation: - inflation induced by a rise in the costs of

production of goods and services is called cost-push inflation.

41. Counter trade: - it is a form of international trade in which the

buyer require the sellers to accept goods (of the buyers’ choosing)

in lieu of currency.

42.Countervailing duty: - it is a special additional import duty (tariffs)

imposed on a commodity to offset a reduction of its price resulting

from a export subsidy in the country of origin.

43.Credit: - granting the use or possession of goods and services

without immediate payment is known as credit.

44. Credit squeeze: - it is the government restriction on the

expansion of bank credit and finance house credit to reduce the

growth of aggregate demand.

45.Currency: - noted and coin that are the ‘current’ medium of

exchange in a country called the currency of that country.

46. Customs union: - A custom union is a trade arrangement

between two or more countries in which all barriers, such as tariffs

or quotas; to each other’s goods and services are removed.

47. Dear money: - It refers to a period when interest rates are

exceptionally high to restrict the money supply.

48. Death Rate: - A crude death rate is the number of deaths

occurring in any year 1,000 of the population.

49. Debentures: - Fixed interest securities issued by limited

companies in return for long-term loans are referred as debentures.



50. Debt :- A sum of money or other property owned by one person

or organization to another is called debt. Debt comes through the

granting of credit or raising loan capital.

51.Deficit financing: - it is a deliberate or planned excess of

expenditure over income.

52.Deflation: - A sustained reduction in the general level of prices iscalled deflation. It is often accompanied by declines in output and

employment.

53. Demand –pull inflation:- it is inflation induced by persistence of

an excess of aggregate demand in the economy over aggregate

supply.

54.Depreciation: - the reduction in value of an asset through wear and

tear is called depreciation.

55.Devaluation: - it is the reduction of the official rate at which one

currency is exchanged for another.

56.Direct Tax: - it is a tax levied on the income and resources of

individuals or organizations.

57. Discount Market: - the market dealing in treasury bills, bills of

exchange and short-dated bond and consisting of the banking

system, the accepting houses and discount houses is referred to as

discount market.

58. Diseconomies of scale: - increase in long run average cost of a

good, which may set in as the scale of production increases, isknown as diseconomies of scale.

59. Disguised Unemployment :-

60. Dissaving: - when consumption is in excess of income, it is called

dissaving.

61. Dividend: - the amount of a company’s profits to be distributed

to share holder is called dividend. It is expressed either as

percentage of the nominal value of the ordinary share capital, or as

an absolute amount per share.

62. Dividend warrant: - It is the cheque by which companies pay

dividends to shareholders.

63.Dumping: - Dumping of good means sending goods to aforeign

market for the sale below marginal cost.



64.Duopoly: - It refers to a situation wherein there are only two sellers

of a good or service in a market.

65. Econometrics: - Econometrics deals with use of mathematics for

describing economic relationship.

66. Economies of Scale: - Factors which cause the average cost of

producing a commodity to fall due to rise in the output of thatcommodity are referred to as economies of scale. There are two

types of economies of scale : internal and external. The internal

economies of scale arise from favourable technological factors. The

external economies of scale arise because the development of an

industry can lead to the development of ancillary services of benefit

to all firms. In other words, economies of scale are the advantages

that accrue to a firm or an industry by increasing the scale of

production.

67. Elasticity: - it is the proportionate change in the dependent

variable divided by the proportionate change in the independentvariable at a given value of the independent variable.

68.Elasticity of substitution: - the marginal rate of elasticity of

substitution is defined as the increase in the output of one factor,

say labour on the other say capital is reduced marginally. It is

defined as the percentage change in the ratio of inputs (labour

divided by capital) divided by the percentage change in the

marginal rate of substitution.

69. Enter pot: - It refers to the centre at which traded goods are

received for subsequent production.

70.Equity: - the residual value of a company’s assets after all outside

liabilities, except to shareholders, has been allowed for its termed

equity. In a mortgage or hire – purchase contract, equity is the

amount left for borrower if the asset concerned is sold and the

lender repaid.

71.Estate Duty: - It is a tax payable on a person’s property at his death

before it passes into the hands of others. The Estate duty is differ

from an inheritance tax. The latter is payable by the recipient and

may vary according to financial circumstances of the inheritor.

72.Exchange rate: - the price rate at which one currency is exchanged

for another currency. The actual rate at any one time is determined

by supply and demand conditions for the relevant currencies in the

market.



73.Excise duty: - Excise duty is tax levied upon goods produced for

home consumption.

74.Expenditure tax: - it is a form of direct taxation on spending.

75. Externalities: - In economics, externalities are the costs not fully

accounted for in the price and market system. External

diseconomies of production include tariff congestion and pollutioncreated by a manufacturing plant.

76. Face value: - the face value of a security is the price at which it

will be redeemed.

77. Factor cost: - It is a term used in the national accounts to

describe the valuation of output at market prices after deducting

taxes on expenditure.

78. Final goods: - Final goods are the goods produced for direct

consumption.

79. Fiscal Drag: - It is the effect of inflation upon effective tax rates,

or sometimes, the effect of growth in nominal gross domestic

product (GDP) on tax revenues.

80.Franchising: - it is contractual arrangement under which an

interdependent franchisee products or sells a product or service

under the brand name of the franchiser. The franchisee provides his

capital and an independent enterprise.

81. Free-on-board: - it is a term which refers to the valuation of

goods up to the point of embarkation. The FOB compares with CIF(charge in full or Cost-insurance-freight), which is the valuation

including all transport costs and insurance to destination.

82. Free-market Economy: - It is an economic system in which the

allocation of resources is determined solely by supply and demand

in free markets. It is somewhere similar to capitalism

83. Free trade: - free flow of economic goods and services in

international exchange.

84. Free trade area: - it refers to an association of a number of countries between whom all import tariffs and quotas, export

subsidies, and other similar measures to influence trade have been

removed. However, each member of the association maintains its

own international trade measures with non-member countries.



85.Free-trade Zone: - it is a customs defined area in which goods and

services are transacted without attracting taxes or duties being

subjected to certain government regulation.

86.Frictional Unemployment: - the unemployment that corresponds to

job vacancies in the same local labour market and occupation is

called frictional unemployment. It arises because of time lags in the

functioning of labour markets, which are inevitable in a free-marketeconomy.

87. Futures: - it refers to contracts made in ‘a future market’ for the

purpose or sale of commodities or financial assets, on a specified

future date.

88. GDP: - It is a total flow of goods and services produced by the

economy over a specified period. Outputs of goods and services are

valued at market price and their values aggregate to obtain the

GDP. The word ‘gross’ means that no deduction for the value of

expenditure on capital goods for replacement purposes is made. The word ‘domestic’ means the only the value of goods and services

produced in the country is estimated.

89. GNP: - It is GDP plus the income accruing to domestic residents

arising from investment abroad less income earned in domestic

market accruing to foreigners abroad.

90. GNP at factor cost means GNP at market price – all indirect taxes

and subsidies.

91. Hard currency: - It is a currency traded in a foreign exchangemarket for which demand is persistently high relative to the supply.

92.Holding Company: - A holding company is concerned with control

and not investment. It is a method by which a company controls one

or more other companies, normally by holding a majority of shares

of these subsidiaries, is called holding company.

93.Hot money: - It refers to funds, which flow into a country to take

advantage of favourable rates of interest in that country. Such

funds are good for balance of payments and exchange rate of the

recipient country.

94. Income: - it is a flow of money, goods or services to any

economic agent or unit. Such flows can take a variety of forms.

95. Income Elasticity of demand: - It refers to proportionate change

in the quantity of a commodity demanded after a unit proportionate

change in the income of consumer with prices held constant.



96. Index number: - it is a weighted average of a number of

statistical observations of some economic attribute, as a percentage

of a similar weighted average calculated fort h attribute at an

earlier, or base, period. Prices and production are among the typical

economic attributes for which index numbers are calculated.

97. Inflation: - Inflation is persistent increase in the general level of

prices. It can also be seen as a devaluing of the worth of money.

98. Inflation Gap: - It refers to a situation in which aggregated

demand is not an equilibrium level in excess of the full-employment

level of output. If it exists, all resources in the economy are fully

utilized.

99. Insurance: - It is a contract to pay a premium in return for which

the insurer will pay compensation in certain eventualities, such as

fire, theft and accident.

100. Internal rate of return: - It refers to the rate of interest whichdiscounts the flow over time of net revenue generated by an

investment such that the present value of the net revenue flows is

equal to the capital sum invested.

101. International liquidity: - The amount of gold, reserve currencies

and special drawing rights (SDR) available for international trade is

called international liquidity.

102.Investment: - Investment is capital formation that will produce a

stream of goods and services for future consumption. Investment

involves the sacrifice of current consumption and the productionof investment goods. In common usage, investment is expenditure

on the acquisition or financial or real assets. However, economics

do not consider it investment, but simply a shift of savings from

one form to another.

103.Irredeemable Security: - It is a type of security, which does not

bear a date at which the capital sum will be paid off or redeemed.

Such security is also sometimes referred to as undated securities.

104.Issuing House: - It is an institution that organizes the raising o

capital by new issues of securities on behalf of clients.

105.Joint Stock Company: - It refers to a business enterprise in which

the capital is divided into small units permitting a number of

investors to contribute varying amounts to the total. Profits in such

a company are to be divided between stockholders in proportion

to the number of shares they own.



106.Labour: - Labour is a factor of production. The term includes both

the number of people available for an engaged in the production

of goods and services and their physical and intellectual skills and

efforts.

107.Labour-intensive: - An economic enterprise is called labour-

intensive if it requires relatively more labour value as input per

unit of output than other factor of production.

108.‘Leads and Lags’: - The phrase refers to the differences in the

settlement of debts in international trade. These differences could

cause a deficit or durplus for a short period in the balance of

payments, even though the underlying trade was in balance.

109.Lease: - Lease is an agreement between the owners of property

(lesser) to grant use of it another party (lessee) to grant use of it

to another party (lessee) for a specified period at a specified time

interval.

110.Letter of credit: - It refers to an order from a domestic bank to a

bank abroad authorizing payment to a person, named in the letter,

a particular sum of money up to a limit of a certain sum. Letters of

credit, unlike bills of exchange, are not negotiable, but are

cashable at known bank.

111.Liquidity: - it is defined as the degree to which an asset can be

quickly and cheaply turned into money, which, by definition, is

liquid. A current account bank deposit is liquid asset because it

can be withdrawn immediately at little cost.

112. Liquidity Ratio: - the proportionate of asset of the total assets of a

bank which are held is called liquidity ratio. These assets include

money lent out to the money market and short term bonds issued

by the government. Liquidity ratio is also defined as the ratio of

liquid assets to the current liabilities of a business. Also known as

the cash ratio, it is a very crude test of solvency.

113.Listed Company: - It is a company whose shares are listed on the

main market of the stock exchange.

114. Listed security: - it is a security listed and tradable on the stockexchange.

115. Macroeconomics: - It is a branch of the study of economics,

which deals with the economic systems, i.e., the aggregate of the

functioning of individual economic units. It is primarily concerned with

variables which follow systematic and predictable paths of behaviour.

More specifically, macroeconomics is a study of national economics



and the determination of national income. It focuses on sectors of

economy which run across the entire economy, say the industrial

sector, and not those that function as separate units, say the ‘car

production sector’.

116. Marginal cost: - It is the increase in the total costs of a firm

caused by the increasing output by one extra unit. If all costs are fixed,

the marginal cost of the first unit of output will be very high, but allsubsequent units can be made for nothing.

117. Maturity: - It refers to date upon which the principal of a

redeemable security becomes repayable.

118. Memorandum of Association: - It is the document, which forms

the basis of registration of a company. The memorandum of

association must list (i) the subscribers to the capital of the company;

(ii) the number of shares the subscribers have agreed to take; (iii)

name and addresses f the company; an where appropriate, (iv) liability

of its members. The articles of association set out the rules by whichthe company will be administered.

119. Merger: - It is the fusion of two or more separate companies into

one. In current usage, in merger both the emerging companies wish to

join together on roughly equal terms.

120. Microeonomics: - it is a section of individual in economics where

the general concern is the efficient allocation of scarce resources

between alternative uses. Microeconomics covers both the behavior of

individual sectors and the way the sectors interact in equilibrium and

disequilibrium in individual markets.

121. Money: - money is defined as something, which is eidely,

accepted in payment of goods and services and in settling debts.

122. Money Market: - the money market is the market for borrowing

and lending of short term funds. Money has a time value, and

therefore the use of it is bought and sold against payment of

interest. In money market, compromising banks and other financial

institutions, borrowers include companies, individuals and the

government.

123. Monopoly market: - It is a market there is only one supplier.

There are three special features of monopoly market: (i) it is

motivated by profits; (ii) barriers prevent new firms from entering

the industry; and (iii) the actions of the monopolist itself affect the

market price of its output.



124. Mutual funds: - Mutual funds re such funds that mobilizes the

savings of the general publc and invest them in stock market

securities.

125. Natural economy: - It refers to an industry in which technical

factors prevent the efficient existence of more than one producer.

126. Net Domestic Product: - it is GDP-Capital consumption.

127. NNP: - it is the net domestic product plus the net earning from

abroad.

128. Nominal value: - It is the face value of a share or bond, which

may be more or less than its market price.

129. Non-tariff Barriers :- these are the obstacles of imports other

than quotas or tariffs. Prominent examples are : use regulations

which favour domestic over imported products; legal requirements

that insurance service providers should be domiciled within national

boundaries; and deliberate delay or obstruction at customer

facilities.

130. Open Economy: - it refers to a situation in which foreign trade

and payments and movements of labour and capital into and out of

a country are unrestricted.

131. Options trading:- it may be defined as deferred delivery contracts

which give the buyer the right to buy or sell a specified underlying

security, at a set price, on or before a specified date. In option

trading, the buyer receives a privilege. He has to pay a fee called

premium in lieu of this privilege. It is of 3 types:- call option, put

option and the one to buy or sell is a double option.

132. Overdraft: -it is a loan facility on a customers’ currency account

at a bank permitting him to overdraw up in a certain agreed limit for

an agreed period. The terms of the loan are normally that it is

repayable on demand, or at the expiration of the agreement. Thus,

an overdraft is different from a term loan.

133. Oversubscription: - when the demand of anew issue of shares

exceeds the number on offer, the issue is said to be iver-subscribed.

134. Over-trading: - A firm is said to be overtrading when it has

insufficient working capital to meet the needs of its present level of

business.

135. Paid-up capital: - It is that part of the issued capital of a company

that has been paid up by the shareholders.



136. Par value: - It is the price at which a share or other security is

issued, i.e. the face value of the investment.

137. Pay-as-you-earn: - it refers to a system of collecting income tax

through regular deduction by the employer from weekly or monthly

earnings of his employees.

138. Per capita income: - It is the income per head, normally definedas the national income divided by the total population.

139. Poll tax: - A tax levies equally on each person in the community.

140. Poverty Trap: - It refers to the combination of losing state

benefit entitlement and paying tax which can ensure that poor

families keep very little of any extra money that earn.

141. Prepayment: - these are the payments for services such as rent

and rates made in one accounting period for consumption wholly or

partly in a following period.

142. Primary market: - It refers to that part of the capital market that

serves as the market for new long-term capital. The institutions

needing capital offer shares and securities which are purchased by

each other and the general people.

143. Privatization: - Privatisation refers to an economic activity in

which government –owned equity in nationalized industries or other

commercial enterprises is sold to private investors. The government

may or may not lose control in the organizations whose equity has

been sold.

144. Promissory notes: - it is a legal document between lender and a

borrower whereby the latter agrees to certain conditions for the

repayment of the sum of money borrowed.

145. Protection: - it refers to imposition of tariffs or quotas to restrict

the inflow of imports.

146. Public Enterprise: - it refers to market activity, carried on by

state owned or controlled enterprises.

147. Public Expenditure: - it is spending by the general government.

148. Public Finance: - it deals with the government’s financial policies.

It analysis the effect of taxation and expenditure on the economic

conditions of individuals and institutions. It also attempts to analyse

the impact of taxation and expenditure on the economy as a whole.



149. Purchase Tax: - It is an indirect tax levied at different percentage

rates for different commodities on their wholesale prices.

150. Quota: - It refers to the quantitative limits placed on the

importation of specified commodities in international trade. Fixation

of quotas is more effective than raising imports tariffs in providing

protection of industries as the effect of the latter depends on the

price elasticities of the imported commodities.

151. Quoted Company: - A quoted company is the ne included in the

official list of a recognized stock exchange.

152. Random Sample: - it is a sample in which every member of the

population or some subset of the population being tested has an

equal chance of being included in the sample.

153. Rate of interest: - the proportion of a sum of money that is paid

over a specified period of time in payment for its loan is called rate

of interest. In other words, it is the price a borrower has to pay toenjoy the use of cash which he does not own.

154. Rate of return: - It is net profit after depreciation as a percentage

of average capital employed in abusiness.

155. Recession: - It is a term used to express a sharp slowdown in the

rate of economic growth or a modest decline in economic activity.

Recession is less severe than depression, which indicates a slump in

economic growth.

156. Reflation: - Reflation refrs to a macroeconomic policy of

increasing aggregate demand in the economy in order to reduce

unemployment.

157. Reserve Currency: - it is a currency which government and

international institutions are willing to hold in their gold and foreign

exchange reserves and which finances a significant proportion of

international trade.

158. Returns to scale: - proportionate increase in output resulting

from proportionate increases in all inputs. It is of two types:

increase in output, increase in output.

159. Rights issue: - An offer of new shares to existing shareholders is

called rights issue. It is relatively a cheap way to increase the price

of a capital for a quoted company.

160. Risk Capital: - It refers to long-term funds invested in enterprises

that are subject to risk, as in new ventures. Sometimes, used as a



synonym for equity capital, it is also used for the term venture

capital.

161. Sales Tax: - It is a tax levied as a proportion of the retail price of

a commodity at the point of sale.

162. Scrip issue: - an issue of new shares to shareholders in

proportion to their existing holdings is called scrip issue. It does nothelp to raise money but merely and adjustment to the capital

structure. The word ‘scrip’ is an abbreviation of ‘subscription

certificate’.

163. Securities: - Securities are the documents giving title to property

or claims on income which may be lodged, eg., as security for bank

loan. Securities are also the income – yielding and other paper

traded on the stock exchange or in secondary markets. It can be

divided into three groups: - fixed interest (debentures, preference

shares, stocks and bonds, including all government securities),

Variable interest (ordinary shares); and other (bills of exchange,assurance policies, warrants etc.)

164. Share: - It is one of a number of equal portions in the nominal

capital of a company, entitling the owner to a proportion of

distributed profits and of residual values if the company goes into

liquidation.

165. Social Capital: - the total stock of a society’s productive assets is

called social capital. E.g. defense and education.

166. Social cost: - it is the sum of the money which is used for publicresources and any additional costs imposed on society from such

use.

167. Social security: - It refers to a system of government-financed

income transfers. It is designed to effect a distribution of income

considered desirable.

168. The main component of most of the social security systems is

welfare benefit, given to those in poverty.

169. Socialism: - It refers to a social and economic system in which

means of production are collectively owned. In socialism, equality is

given a high priority.

170. Soft currency: - It is a currency whose exchange rate is tending

to fall because of persistent balance of payment deficit. The

speculative selling of the currency in anticipation of a decline in its

exchange rate may also result in real fall in exchange rate of the



currency. Government avoids holding a soft currency in their foreign

exchange reserves.

171. Soft loan: - It is a loan bearing either no interest or an interest

rate which is below the true cost of the capital lent.

172. Spot Market: - It refers to a market in which goods or securities

are traded for immediate delivery. The price for immediate deliveryis called spot price.

173. Stagflation: - It refers to inflation associated with static or

declining output and employment.

174. Stamp duty: - it refers to form of indirect taxation, which involves

the fixing of prepaid stamps to legal and commercial documents.

175. Stock: - the term ‘stock’ means a fixed interest security, I;e; loan

stock in a company or government stock.

176. Stock exchange: - it refers to a market in which securities arebought and sold.

177. Structural unemployment: - it is a type of unemployment which

occurs due to changes in technology and demand. In this type of

unemployment, there is an oversupply of labour with particulat

skills or in particular locations.

178. Subsidy: - Government grants in supply of goods and services

are known as subsidies.

179. Supply: - the quantity of a good or a service available for sale atany pecified price is called supply.

180. Take over: - The acquisition of one company by another is called

take-over. The term ‘take-over’ is normally used to imply that the

acquisition is made on the initiative of the acquirer and without the

full agreement of he acquired company.

181. Tariff: - Tariff is the tax imposed on commodity imports. It may

be levied on an ad valorem basis, i.e. as a certain percentage of

value, or on a specific basis, i.e. as an amount per unit.

182. Tax base: - The quality or coverage of what is taxed is called tax

base. For example, the tax base for income tax is the assessed

incomes of the whole population.

183. Tax burden: - the amount of money which individual, institution

or group must pay in tax is called tax burden.



184. Tax yield: - It is th amount of money which results when the rate

of tax is applied to the money value of tax base- the cost of

collecting the tax.

185. Taxation: - it is a compulsory transfer of money from private

individuals, institutions or groups to the government.

186. Tenders: - These are the offrs to supply goods or services at afixed price.

187. Term loan: - It is a bank advance for a specified period. The

advance made is to be repaid, with interest, usually by regular

periodical payments. The interst of a term loan is fixed and the oan

cannot be recalled in advance of its maturity date.

188. Terms of trade: - the ratrion of the index of export prices to the

import prices is called the terms of trade. If export prices rise more

quickly than import prices, an imprivemtn in the terms of trade is

said to have occurred.

189. Tied Loan:- It is a loan made on condition that certain purchases

are made form the lender.

190. Time preference of consumers: - It is the amount by which

consumers weigh immediate consumption in preference to deferred

or postponed consumption.

191. Trade barrier: - It is a general term which is used to express any

government limitation on the free international exchange of

merchandise.

192. Trade cycle: - It refers to regular fluctuations in the level of

national income. It often occurs on a generally upward growth path

and has a variable time span.

193. Trade discount:- It is the it is the percentage below the published

retail price of a commodity at which a manufacturer sells to his

distributors, wholeale or retail, or at which a wholesales sells his

goods to a retailer.

194. Transfer Costs: - It is the total costs of moving goods or materials

from one place to another. Transfer costs include loading/unloadingcosts amd administrative costs as well as transport costs.

195. Transfer payments: - thse are the grants or other payments that

are not made in return for a productive sefvice. It is a form of

economic redistribution. They are not a return to the factors of

production.



196. Transfer pricing: - It refrs to an internal price system adopted by

a large organization for transactions between semi-autonomous

divisions.

197. Treasury bills: - these are the instruments for short-term

borrowing by the government.

198. Turn over: - The total sales revenue of a business is calledturnover.

199. VAT: - It is a general tax applied at each point of exchange of

goods and services from primary production to final consumption. It

is levied on the differences between the sal price of the goods or

services, to which the tax is applied and the cost of goods and

services bought in for use of its production.

200. Wealth :- A stock of assets held by any economic unit that yields

income, or has the potential for yielding income is called wealth.

201. Window dressing: - It is rearrangement of a company’s financial

affairs at the year-end to make the balance sheet look different

from usual.

202. Yield: - the income from a security as a proportion to its current

market price is called yield.

203. Yield curve: - It is a graphical representation of the relationship

between the annual return on an asset and the number of years the

asset has before expiring.

204. Yield Gap: - It is the difference between yield on ordinary sharesand the yield on gilt-edged securities. If the latter exceeds the

former, it is called the reverse yield gap.

Economics information collected by: “Pratiyogita Darpan”

Economics 2006

1. Sagaramal

a

Name associated with a project of port

development

2. President

of CII

(Chambers

of Indian

industries)

Mr. Sunil Kant Munjal

3. Chairman Prime minister



of Island

Developme

nt

authority

4. December

2

Computer literacy day

5. Maximum

% of SC

population

Punjab

6. NIKKEI Share price index of Tokyo Share Market

7. NABARD It was established on the

recommendation of Shivraman

Caommittee.

8 VAT Is imposed in all stages between

production and final goods

9 Kutir Jyoti

Scheme

Providing electricity torural families

living below the poverty line.

10 CAPART Assisting and evaluatiog rural welfare

programmes.

11. Bank has

maximum

no. of

branches

AN2 Griendley’s bank

12. India brand

enquiry

1996

13. Indian

Ocean Rim

Association

for

Regional

Co-

operation

March 15, 1997

14 IRDP 1978-79

15. RBI National Housing Bank is controlled

enterprises

16. Monetized Increase in net TRBI credit for central



deficit Governemnt represents

17. Nanjundup

pa

Committee

Rangrajan

Committee

Gaiporia

Committee

Railway fare

Balance of payment

Banking service improvements

18. Sangam

Yojana

To ensure welfare of handicapped

19. Nobel Prize

for 2004 in

Economics

Finn Kydland and Edward Prescott

20. Hawala Illegal transactions of foreign exchange

21. Lowest

population

in 2001

census

Lakshadweep

22. Stagflation Inflation with depression

23. Reforms in

tax

structure

Chelliah committee

24. Banking

structure

reforms

Narsimha Committee

25 2003 This year is eclared as consumer

Satisfaction year by Railways

26. National

Rural

Developme

nt institute

Hydearbad

27. UNCTAD X Ths exhibition was held on 12-19th Feb

2000 at Bangkok (Thailand)

28. Super 301 American rade law

29. Wardhman The first fully literate country is outside



(West

Bengal)

Kerala

30 Indravati

Hydroelect

ric Project

Orissa Tate

31. Limitedcompany

In which shareholders possess theownership limited to their paid up

capital

32. IRBI 1985

33. Sidbi’s

headquarte

rs

Lucknow

34. Establishin

g new

stock

exchanges

M. J. Pherwani

35 Confine Canara Bank

36. Bank Note

Press,

Dewas

20 rupees and above value notes are

printed

37. August

1996

Disinvestment Commission in India

38. 1952 Employment State insurance Scheme

39. Voluntary

Retiremnt

Golden Handshake Scheme

40. Dunkel

proposal

Trade related intellectual property

Rights TRIPS and TRIMS- Trade Related

Investment Measures

41. Sundarajan

Committee

Petroleum

42. Sensex It deals with 30 compnaies

43. Tamarthi

Power

Project

Bhutan and India

44. HDR 2005 A better investment climate for



everyone

45. MP Deen Dayal Employment Scheme

46. Maastricht

Treaty

Eurpoe Unification

47. Meera Seth

Committee

Development of Handlooms

48. Backwash

effect

Gunnar Myrdal

49. Janata

Cloth

Scheme

1976

50. IPLEX 2005 Plastic industries

51. GyandeepShiksha

Yojana

Higher education in UP

52. Long term

grain policy

Abhijit Sen

53. M. U. Rao

Committee

National Seed policy 2002

54. Rail Neer 2002-03

55. Quick MailService

Rajdhani Mail Channel

56. Insurance

Sector

R. N. Melhotra Committee

57. Dow Jones Share market index of New York

Exchange Market

58. 2001

census

Sex ration in Uttaranchal 964/1000

59. Caracus The 12th Summit of G- 15

60. Mercosue Free trad zone of nationsof South

America

61. Kojhikode

Airport

Golden gate



62. Open sky

scheme

Export promotion scheme of Civil

Aviation Ministry

63. Surat First Export Promotion Zone

64. 9th Plan Khetihar Mazdoor Bima Yojana

65. Daheg The first chemical port of india for

export-import of chemical products.

66. IMF IMF is the result of Bretton Wood

Conference.

economics (civil services) 2008

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