Thursday, November 30, 2023

Find the square root of √625

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Traditionalists' theory of monetary demand

Introduction

The theories of demand for money can be mainly divided into four parts. They are: 1. Monetary demand theory 2. Keynesian monetary demand theory 3 Keynesian and post-Keynesian monetary demand theories; 4. Friedman's theory of modern monetary demand. It can be said that Irving Fisher was the first to formulate the theory of traditional monetary demand. Later, this theory, with some modifications, was developed by Cambridge economists such as Alfred Marshall, A. C. Pigou, D. H. Robertson, etc. in the form of the Cambridge equation. Later, Keynes' Mahasaya was a critical critic of the traditional monetary demand theory and introduced an alternative monetary demand theory. This theory of Keynes can be found in Keynes' book "General Theory" published in 1936. .

Importance of monetary demand

To know the equilibrium level of the money market in an economy, it is essential to study money demand. Equilibrium between money demand and supply is called money market equilibrium. Secondly, before formulating and implementing monetary and fiscal policies, it is essential to know the supply and demand of money in the economy. Sometimes macroeconomic policies are also followed to control money demand. Therefore, at the full employment level, it is essential to assess the monetary demand in the economy before formulating the necessary fiscal policies to stabilise the economy. It should be recognized that forecasting monetary demand is essential for achieving balanced growth in economically backward countries.

Traditionalists' theory of monetary demand

Among the popular theories that analyze money demand is the conservative money demand theory. Theory one. The money demand equation introduced by Irving Fisher can be expressed as follows.

MV = PT—-----'(1)

Here, M = Money Supply ; V = Velocity of money circulation used for daily transactions: T= Total value of daily transactions ; P= price level.

In the above equation, PT represents money demand. Equation - 1

MV = PY—-------(2)

Can also be written as Here, Y = real income level. PY denotes monetary income. Fisher believed that the velocity of money circulation (V - velocity of money circulation) is determined by systemic factors. Furthermore, the GDP of the economy is constant at the full employment level.

Fisher's monetary theory represents everyday affairs.

Md= PT/V

Md = Money Demand.

Equation - 3 implies that money demand changes directly and proportionally with the price level if Y is constant. By implying that there is full employment in the economy, the conservative money demand elasticity can be said to have a value of one. This implies that there is an inverse relationship between the price level and nominal money demand.

Monday, November 27, 2023

Given arithmetic mean= 45, Mode=48 then median=---

MCQS ON ECONOMICS

Chater-1

A. Micro Economics

1. Principle of maximum social advantage is concerned with:

a. Public expenditure

b. Taxation only

c. Public debt

d. Above a & b ✓

Ans: d

2. If marginal propensity to import is 0.1 and Marginal propensity to consume is 0.7, the value of income multiplier will be...

a.<1

b. >1✓

c.=0

d=1

Ans: 1/{=1-(MPI+MPC)}

From above question MPI=0.1, and MPC=0.7

1/{1-(0.1+0.7)}

1/1-0.8.

1/0.2

10/2

Ans: b.

3. A toll tax is a tax based on which of the folowing:

a. Horizontal equality

. The benifit principle✓

c. Vertical Equality

d. Tax progressively

Ans: b

4.which of the following factors is Not the cause for Market Failure

a. Public goods

b. Externality

c. Lack of Demand ✓

d. Symmetric information

Ans: c

5. Liquidity approach is also known by the name:-

a. Gurley-Shaw approach

b. Radcliffe approach✓

c. Traditional approach

d. Monetarist approach

Ans: b

6. Cross Elasticity of complementary goods is:-

a. Infinite

b. Negative✓

c. Zero

d. One

Ans: b

7. Which is an inverted U shaped curve?

a. AC

b. TC

c. MC ✓

d. FC

Ans: c

8. Rectangular hyperbola is the shape of

a. TTC

b. AFC ✓

c. MC

d. FC

Ans: b

9.Given the saving function S= -20+0.2y and autonomous investment (I)= Rs. 100 million, the equilibrium of level of consumption would be:

A. 500

B. 600✓

C.700

D. 400

Explanation: at equilibrium level. I= S

100= -20+0.2y

100+20= 0.2y

120=0.2y

0.2y= 120

y= 120/0.2

y= 1200/2

y= 600

Ans:B.

10. The value of the income multiplier K=4, find the consumption function? Ugc net-Dec.2019,paper-II,q.no.73

A. C= 100+05Y

B. C=50+0.8Y

C. C= 200+0.75Y

D. 50+0.4Y

Solution: K=1/1_MPC

4=1/1_MPC

4(1_MPC)=1

4_4MPC=1

4_1=4MPC

3=4MPC

4MPC=3

MPC=3/4

MPC=0.75

ANS:C

11.If in a Harrodian economy, Ga= 10% and Gw= 8%, this will leads to:

A. Inflation

B. Unemployment

C. Deflation✓

D. Stagflation

Ans: C

12. The Geometric mean of four numbers 2,X,16,32 is 8. What is the value of X?( Ugc net Dec_2015, paper-II, q.no.33)

A.2. B.4. ✓ C. 6. D.8

Solution: 4√2×16×X×32= 8

4√1024×X=8

1024×X=8×8×8×8

1024×X=4096

X= 4096/1024

X=4

Q 13. In a Harrodian economy ICOR is 4.5:1, population growth is 2% per annum, and the investment rate is 27%. Hence the annual growth of per capita will be:

A. 2.5%

B. 9%

C . 6%

D. 4% ✓

Solution:

Growth rate per capita=( Investment Rate/ICOR)-Population growth

=( 27/4.5)-2

=( 270/45)-2

= 6-2

= 4%

Ans: D

14. Given arithmetic mean= 45, Mode=48 then median=-----

A. 46 ✓

B. 45

C. 48

D. 49

Solution: Formula= Mode= 3Median-2Mean

= 3Median= Mode+2Mean

According to given problem Mean is 45 and Mode is 48

So, 3Median= 48+2×45

= 48+90

= 138

3Median=138

Median=138/3

Median=46

Ans: A

Sunday, November 26, 2023

Deficit Financing

Introduction:

Local currency is an integral part of domestic monetary policy. When this seed is defined in the budget language of the Reserve Bank we are one stage (How Treasury Bills), the funds that fill the gap that is higher than the total expenditure of the government, the total revenue (including all types of income) is known as the deficit.

Traditional economists and monetarists who advocate a balanced budget, while other modern economists and politicians condemn deficit financing. They associate deficit monetary policy with inflation, generally, deficit financing, as new currency is printed to the extent that the money supply increases. It is argued that blindly believing or misapplying the Quantity Theory of Money leads to deficit financing and inflationary pressures, so this basis is inappropriate for development seed collection. Logically, theoretically, and even upon proper historical data analysis, this argument is weak. Because an increase in money supply does not necessarily cause inflation. Money growth is a necessary condition for inflation, not a sufficient condition. The main issue is how the money supply increased by deficit monetary policy is spent in what proportion. May not occur.

When physical resources (including human resources) are abundant, deficit financing can act as a boon (not a curse) when used as a balance. This seed is a powerful tool in government ownership.

Economic development is the result of action reactions of small factors. The rapid past is prominent for capital accumulation. To achieve this, along with physical planning, seed planning is required.. Seed collection should be carried out quantitatively and qualitatively. A poor country like India, which is growing, has a low natural savings rate of the people, so the saving has to be increased in a mandatory (forced) and indirect manner. Indigenous and traditional seed evidence helps to some extent. Foreign aid and microfinance must be undertaken. Seed evidence can be broadly summarised into five nos. Each seed base has relative advantages and limitations. Each base should be used within a certain limit, following the free rules. In the last 4 decades India's plans have been mainly funded through domestic sources. 80 percent to 90 percent of these are there. 8. Aims to get more resources (34 percent) from public sector organisations. 47 percent share has been allocated to domestic loans. Historically, theoretically, a suspicion can be presented that such a seed resource policy may not achieve rapid economic development with social justice. As per the conditions of the times, it is natural that there will be changes in the type of development as well. Although the current seed resource procurement in India may not be theoretically justified, current conditions justify the current resource procurement approach.

Tuesday, November 14, 2023

Effects of Latent Money on Economic System

Effect of latent money on the economic and social system.

Introduction:

emergence of crypto-currency and its growth over time in circulation has adverse effects on the Indian economy in many ways. So it is essential to analyse its effect.

Effects of Latent Money

1. The direct impact of cryptocurrency is on the government exchequer. Growth of black money tax evasion reduces government tax revenue. The government has to levy more taxes to cover this. Many people believe that this is the reason why the Regressive tax structure has developed in India. Both black money and tax evasion are intertwined. Both these together burden the righteous tax payer. It leads to inequality of income and assets. Black money helps tax evaders to increase luxury consumption. D.K. According to D.K. Rangnekar, while the incomes of taxpayers are falling, the incomes of tax evaders are increasing and luxury consumption is increasing, leading to widening of wealth and income inequality.

II. Businessmen and investors boost consumption on luxury goods with tax-evaded cash. Its demonstration effect is on people of all sections of the society. The production of luxury goods will increase in place of essential goods and there will be shortage of goods of the lower classes. As a result, the prices of essential commodities will rise and the real incomes of the low earners will fall. There is no link between the production activities in the economy and the goals we set in the plans.

III. "Monetary circulation contributes to investment in unproductive goods like expensive diamonds (stones), gold jewellery etc. and cripples investment in the productive sector. Money circulation in economic activity decreases. It inhibits growth of production.

v. Increase in house assets, building luxurious houses etc. due to secret money. are encouraged. Registrations are done by artificially devaluing assets. A lot of this2. Black money can be unearthed and used. Due to the increase in black money, the prices of land and houses are increasing... This is a big blow to our economy from the point of view of the prosperity of the country.

v. Usually black money is in the form of some money so it increases liquidity in the economy. By increasing this black liquidity, the black market will grow. Consequently, if the government ever implements credit control, it will have no effect in reducing liquidity. Prices due to lack of government control over the economy leading to uncontrolled inflation. An unofficial shadow economy circulates in competition with the authoritarian government.

VI / Cryptocurrency helps to move our country's monetary resources abroad. Bad activities like devaluation of export goods and increase in value of imported goods circulate in the guise of black money.

Sunday, November 12, 2023

Economic World : Problems faced by backward countries in implementa...

Economic World : Problems faced by backward countries in implementa...: Problems faced by backward countries in implementation of globalization policies Many economists consider it unclear how far international...

Development Indicator: Only GDP is not a Parameter

India is currently the fifth largest economy in the world in terms of Gross Domestic Product (GDP). The International Monetary Fund (IMF) has confirmed that India has overtaken Britain and taken that status. Analysis has recently come to light that Germany, which is one step above India, will surpass Japan this year. India will become the third largest economy by the year 2030 after both Germany and Japan, S&P Global Market Intelligence's latest estimate says. There are rumors that India, which is a three and a half trillion dollar economy, will expand to 7.3 trillion dollars in the next seven years. By then, only America and China were ahead of India. This is a gratifying development, but on deeper analysis - different angles are revealed. On the basis of GDP growth rate, India seems to be creeping up the ladder. India is a lower middle income country in terms of GDP per capita. It is a stark truth that India, with a population of over 140 crores, is the poorest country in the G20 bloc, according to per capita income figures. The Oxfam report has clarified that the 19 crore people who are dying of hunger in 2018 will increase to 35 crore by 2022. In terms of disparities, reports also show that many Scheduled Castes and Tribes families do not have access to quality personal sanitation facilities. Such a shortage of medical facilities is increasing. Post-crisis, even though there has been an increase in the wages of day laborers, their net incomes have been shrinking due to the boom in inflation. Who is proud of the fact that while the country is running in the race of GDP - the common life of the people is in dire straits? The growth of GDP is for the development of the country.

Decomposing- normal

Who is proud that people's lives are in dire straits? Is the growth of GDP the pillar of the country's development? Is the relative analysis that India is progressing faster than any other country the measure of net progress? Will the face of the country change qualitatively if the wealth is limited to a limited number of poor people? Can't! Prosperity of the country means - shining light in the lives of the common people. A country is developed only when the income of a large number of people increases and their standard of living improves significantly. In reality, the opposite scenes are heart-wrenching. The poor people of the country are giving a strong impetus to the formulation of the rich and the poor - the situation is worsening at the field level. Namely, India is an agricultural country. Innumerable laborers are living miserable lives of poor income and indebtedness. The National Health Authority (NHA) recently concluded that 52 percent of Indians have to bear the medical expenses on their own even if they get sick or get sick due to systemic laxity. Because of that cost burden, an average of more than six crore helpless citizens are pushed into poverty every year. The growth in GDP is not able to support the lives of crores of people, and the boom of malnutrition everywhere is showing. 30 percent of stunted children around the world, malnutrition is a prime example of that. After all, when the per capita income for food is 5000- per capita in a balanced environment- providing a healthy life and a secure future to the people who cannot get better employment in the human development index..... The roaring India is the real national development! Explodes.

Population:- A Growth Engine of an Economy

My Bharat' to keep up with the changing times.

Introduction: India is moving fast in the digital world. The Center is launching a digital platform 'My Bharat' to keep up with the changing times. The center hopes that this will stimulate and utilize the intellectual power and energy of the youth for the progress of the country. It is believed to become a tool of coordinated action.

Governments should take all precautions to ensure that educated Indian youth plays a vital role in the international economic system. Constructive measures should be taken under vision 2007 to bring the youth of villages, cities and small towns on a single platform. In this process, the Center hopes that the My Bharat platform will help empower the youth to realize their dreams, share innovative ideas with each other and become drivers of development. Apart from indigenous youth in the age group of 15-29 years who are classified as youth under the National Education Policy 2020, Indian youth abroad can also share this platform.

should be put on the scales. We need to develop entrepreneurial skills in our youth. They need to be trained to adapt to ever-changing technologies. Youngsters should be motivated and hardworking to learn advanced technologies.

The UN affiliate UNESCO has already established an international youth platform called the Global Youth Community (GYC). My Bharat platform should learn lessons from its efforts and experiences for inclusive and sustainable economic development. Necessary programs should be organized to invite youth from other countries to India and send Indian youth abroad.

The Union Cabinet has decided to launch the My Bharat platform on October 31, which is Sardar Vallabhbhai Patel's birthday and National Unity Day.

The Indian Union Cabinet has decided to develop My Bharat as a self-determination platform that provides equal opportunities for the fulfillment of the aspirations and hopes of the youth. Analyzes suggest that this platform will connect crores of youth digitally and physically and become drivers of socio-economic progress.

Prime Minister Narendra Modi emphasized that My Bharat platform will be crucial for youth driven development and development of Vikasim Bharat. He commented that it will work towards building a sustainable India with self-determination.

Suggestions:

Governments need to prepare our education system to enable students to learn the ever-evolving technologies. The youth should be transformed not only as job seekers but also as entrepreneurs who can create jobs themselves. Governments should lay the foundation for poverty alleviation and income development by providing rapid employment to youth trained in new technologies. The youth are the destiny of the country so they should be trained in leadership skills. Updates should be made as persuasive. There is a need to provide the necessary training to excel in the advanced business era driven by digital technologies. Finding new solutions to problems

Young people in India and abroad should share their experiences and skills with each other. Indian youth go abroad for professional jobs. The government should provide adequate opportunities and infrastructure for them to use their energies in their own country without having to go abroad. Thus preventing the migration of Meda and the development of the country.

They have to start new businesses. The necessary investments and permissions should be provided quickly. The youth should be trained to achieve digital business opportunities and new types of jobs not only in the country but also abroad. Youth should be supported in terms of government, private and voluntary organizations. They should be employed as voluntary workers in the activities of these organizations.

Price Determination in a perfectly competitive Markets

Price determination in perfectly Competitive Markets

A perfectly competitive market is rare in the modern world. It can be said that this is not the case in the industrial sector. Similarly, a monopolistic market is rare in the private sector. Markets between these two are widely prevalent. Monogamous power exists in all these in varying degrees. It results in misuse of resources. Marginal cost pricing method is followed in public sector organisations to prevent such misuse of resources. Only short- run marginal cost considerations come into play. The net social benefit is maximised. Because many industries have credit exposures, marginal costs of exposure are subsumed under social marginal costs. If that happens, over production will be reduced and social benefit will be achieved. In industries that follow the marginal cost pricing system, long- run costs are declining and they incur losses. Burying them is difficult. Marginal cost measurement is complicated. Full cost pricing approach is followed to overcome the above mentioned difficulties. This policy is widespread in all sectors and industries across countries. It is known that average cost is obtained by dividing the total cost with the product. Real costs are higher than ability costs due to ownership isolation, contributing to X- inefficiency. Adding higher costs to the price increases the price level. This is how cost- induced inflation occurs. Direct and indirect taxes levied on companies are also passed on to consumers by raising prices. This can be termed as tax induced inflation. For the above reasons average cost pricing theory cannot be said to be better than marginal cost pricing theory. In perfectly competitive industries, long- run cost equals marginal, average cost.

The price is not fixed by any single company in the industry. All firms accept the price determined in the market.(Similarly, the number of consumers is as large as the number of these firms. Firms, Competition among consumers is perfect. Hence such markets got that name. Chronic These firms can only make normal profits when price equals marginal and average costs. price, Differences between costs may occur in the short term. This can result in high profits or losses. Profits When new firms enter the industry. Production increases. Thus reducing the price and higher profits disappears. Disadvantages include weak firms exiting the industry, resulting in lower output and lower prices increases. Thus normal profits are added. If the goods are available at the marginal cost price of the consumer The benefit is maximised. Perfectly competitive markets are rare in the world. The most common ones are imperfect competition