Planned inventory refers to changes in stock or inventories which has occurred in a planned way. In a situation of planned inventory accumulation the firm will plan to raise its inventories. In case of planned inventory accumulation firm has and an expected fall in sales, the firm will have unsold stock of goods which has been anticipated.

For example, if a firm has opening inventory of 1000 units and it wants to raise its inventory from 1000 to 2000 units and expects sales to be 10000 units, it will produce 11000 units, if at the end of the year it is found that the actual sales were also 10000 the firm will raise its inventory from 1000 to 2000. The closing inventory will be –

Final Inventory or Closing Inventory = Opening Inventory + Production – Sale

= 1000 + 11000 – 10000

= 2000 units

Demand Deposits also known as Current Account deposits refer to those deposits that provide the depositor the liberty to withdraw money at any point of time. That is, the account holder of the demand deposits can demand these deposits at any point of time as per their discretion and convenience. Such deposits do not offer any rate of interest.

When the domestic currency appreciates, demand for imports by the native residents also increases. This is because appreciation of domestic currency implies depreciation of foreign currency. When domestic currency appreciates, imports become cheaper and there by the demand for import increases.

For example, a currency appreciation (fall in the exchange rate) from say, $1= Rs 40 to $1= Rs 38 implies that the goods from abroad become cheaper (that is, it now cost Rs 38 to purchase a commodity worth $1 instead of Rs 40 earlier). This would result in a rise in the demand for the imports.

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It indicates the total borrowings needed by the government.

When the money that the Government had borrowed was used to increase production, then the inflation could be avoided.

Example: When borrowed money is used to build an irrigation system for farmers, then this would boost the agricultural production and would meet the demand for economy and henceforth control inflation.

But when government is spending money on unproductive programmes which do not increase economic productivity, then that paves the way for inflation.

Example: any scheme launched by the government but due to corruption or middlemen the programmes of the schemes are not implemented well and not reached to the beneficiaries. This would impact the economy and raises inflation.

Devaluation is the decrease in the value of domestic currency corresponding to foreign currency as planned by the Central bank, in a case, when exchange rate is not determined by the demand and supply forces but is fixed by the government of varied nations.
Depreciation is the decrease in the value of domestic currency corresponding to foreign currency, in a case, when exchange rate is determined by the forces of supply and demand in the international money market. Both depreciation and devaluation will result in the value of domestic currency in terms of foreign currency. However, the devaluation causes desired fall in the value of rupee which in turn boost the exports. The depreciation causes undesired fall in the value of rupee where the import bill of the government may become too high leading to a rise in fiscal deficit to unmanageable limits.

It is demanded by the domestic residents for the following reasons:

(a) Imports of Goods and Services: When India imports goods and services, foreign exchange is demanded to make the payment for imports of goods and services.

(b) Tourism: Foreign exchange is demanded to meet expenditure incurred in foreign tours.

By money supply we mean the total stock of monetary media of exchange available to a society for use in connection with the economic activity of the country. Supply of money refers to the total stock of money (in the form of currency notes and coins) held by the people of an economy at a particular point of time. The following are the components of money.
(1) Currency component:  It includes,
a) Currency notes in circulation issued by the Reserve Bank of India.
b) The number of rupee notes and coins in circulation.
c) Small coins in circulation.
(2) Deposit Component: The other important components of money supply are demand deposits of the public with the banks. These demand deposits held by the public are also called bank money or deposit money. Deposits with the banks are broadly divided into two types: demand deposits and time deposits.
Demand deposits in the banks are those deposits which can be withdrawn by drawing cheques on them. Through cheques, these deposits can be transferred to others for making payments from which goods and services have been purchased. Whereas time deposit is a deposit in a bank account that cannot be withdrawn before a set date or for which notice of withdrawal is required.

Autonomous transactions are the transactions between the residents of two countries which take place due to the consideration of profit. Autonomous items are not conditioned by the BoP status of the country, i.e. these are independent. These transactions are not done to establish identity of BoP. These are also known as ‘above the line items’ and take place in both the accounts of BoP, i.e. current and capital account.
Accommodating . transactions are those transactions which are not done due to the consideration of profit but to restore identity of BoP. These are undertaken to maintain balance in the BoP account. These transactions correct the disequilibrium in autonomous items of BoP account. Accommodating transactions are also known as ‘below the line items’ and include foreign exchange reserves and borrowings to meet BoP deficit.
BoP deficit When the payments of a country on account of autonomous transactions exceed the receipts of the country on account of autonomous transactions, this difference is termed as BoP deficit.
BoP Deficit = Receipts on Account of Autonomous Transactions < Payments on Account of Autonomous Transactions

The introduction of High Yielding Varieties (HYV) of seeds and the increased use of fertilizers, pesticides and irrigation facilities arc known collectively as the Green Revolution, which resulted in the increase in crop yield needed to make India self-sufficient in food grain. Various land reforms were also undertaken in order to make green revolution successful. Thus, Green revolution included the following measures
(i) Use of High Yielding Varieties (HYV) of .seeds

(ii) Increase in irrigation cover
(iii) Use of insecticides and pesticides
(iv) Consolidation o( holdings

(v) Rural electrification
(vi) Improvement in rural infrastructure
(Vii) Agricultural credit facilities
(viii) Use of chemical fertilizers Reasons for Implementation of Green Revolution

Green Revolution was implemented because, of the following reasons

(i) Food Security The colonial rule had made Indian agriculture suffer from low level of productivity especially in food grains as more emphasis during colonial rule had been on cash crops which served as raw material to British industries. This resulted in shortage of foodgrains in India and made. Green Revolution necessary to provide food security to the population.

(ii) Low Irrigation Facility The land area under irrigation cover was only 17% in 1951. The major part of agriculture was dependent on rainfall from monsoon and in case of scanty rainfall of delayed monsoon, crops wore destroyed due to lack of proper irrigation facilities. This caused low level of agricultural production.

(iii) Conventional Methods The use of conventional inputs and absence of modern techniques led to low level of agricultural productivity.

(iv) Self-reliance Due to low productivity and rapidly growing population, there was food grains shortage which had to be imported from United mates and other countries this drained away scarce foreign reserves It was believed that with tie increased production due to Green Revolution, government can maintain stock for period Of shortages and India can achieve self-reliance.

(v) Marketable Surplus Agriculture was basically for subsistence and therefore, less amount of agricultural product was offered for sale in the market. Hence, the need was foil to encourage the farmers to increase their production so that they could have a greater position of their produce for sale in the market and thus earn higher income. Green revolution benefitted farmers in various ways. It helped in raising the income of the formers and hence their living standard because now the produce was more and the farmers had marketable surplus to sell in the market. Apart from this, the use of HYV seeds necessitated the improvement in irrigation facilities by the government which made the farmers loss dependent on rainfall and hence more secure. The government provided loans al low Interest rate to small farmers and subsidised fertilizers so that small farmers could also have access to the needed inputs since, the small farmers could obtain the required inputs, the output on small farms equalled the output on large farms in the course of lime which resulted In equity and social justice.

Simply put, total saving (S) divided by total income (Y) is called APS (APS = S/Y) whereas change in savings (ΔS) divided by change in income (ΔY) is called MPS (MPS = ΔS/ΔY).

The value of APS can be negative when consumption expenditure becomes higher than income. For example, if income is र 1,000 and consumption expenditure is र 1,200, then saving is -200 (i.e., dissaving).