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Preeti Dabral 1 year, 11 months ago
But there is another important factor that we tend to miss out on; a fall in India's fertility rate and how that helped the Indian economy grow. In 1971, the country's total fertility rate was at 5.2. That is, on average, 100 women had 520 children during their child-bearing years. By 1991, this had come down to 3.6.
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Outward direct investment is also called direct investment abroad. Foreign direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy.
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Sia ? 3 years, 1 month ago
There can be many reasons behind rise of price in India. Like:
- Sometimes the prices of raw material increases according the price of consumer good also increase due to the rise of cost of production.
- Increase in demand also leads to rise in prices.
- Hoarding by producers is also responsible for rise in prices.
- Imposition of direct taxes is also responsible of rise in prices.
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The gross demand for a good is the amount of the good that the consumer actually ends up consuming: how much of each of the goods he or she takes home from the market.
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The Twelfth Finance Commission of India was appointed on 1 November 2002 to make recommendations on the distribution of net proceeds of sharable taxes between union and states. The commission was headed by veteran economist of India, C. Rangarajan.
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So higher foreign income leads to higher exports. They depend also on the real exchange rate: The higher the price of domestic goods in terms of foreign goods, the lower the foreign demand for domestic goods. An increase in foreign income, Y ∗, leads to an increase in exports.
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Fall in standard of living of the population of the nation over the years
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The Central Bank acts as a controller of money supply and credit, using the following methods:
- Margin requirement: Changes in margin requirements are designed to influence the flow of credit against specific commodities. The commercial banks generally advance loans to their customers against some security or securities offered by the borrower and acceptable to banks. More generally, the commercial banks do not lend up to the full amount of the security but lend an amount less than its value. The margin requirements against specific securities are determined by the Central Bank. A change in margin requirements will influence the flow of credit. A rise in the margin requirement results in a contraction in the borrowing value of the security and similarly, a fall in the margin requirement results in an expansion in the borrowing value of the security.
- Open market operations: Under open market operations, RBI purchases or sells government securities to the general public for the purpose of increasing or decreasing the stock of money in an economy. The purchase or sale of securities controls the money in the hands of the public as they deposit or withdraw the money from Commercial Banks.
Thus, money creation by Commercial Banks gets affected. Suppose, the Central Bank purchases securities of Rs.1,000 from a bondholder with issuing a cheque. The seller of the bond produces this cheque of Rs.1,000 to his Commercial Bank. The Commercial Bank credits the account of the seller by Rs.1,000 and the deposits of the bank go up by Rs.1,000, which increase the credit creation capacity of the banks. Thus, the purchase of security increases the money creation of Commercial Banks and similarly, the sale of securities decreases the credit creation of Commercial Banks. Thus, the Central Bank controls the process of money creation by Commercial Banks by open market operations.
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- Microeconomics studies the particular market segment of the economy, whereas Macroeconomics studies the whole economy, which covers several market segments.
- Microeconomics assumes all the macro variables to be constant as national Income, consumption, saving, etc, whereas Macroeconomics assumes that all tile micro variables to be constant as households, firms, prices of Individual products, etc.
- Microeconomics deals with an individual product, firm, household, industry, wages, prices, etc., while Macroeconomics deals with aggregates like national income, national output, price level, etc.
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Lhakpa Choden 3 years ago
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