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Yogita Ingle 7 years, 3 months ago
Opportunity costs are fundamental costs in economics, and are used in computing cost benefit analysis of a project. Such costs, however, are not recorded in the account books but are recognized in decision making by computing the cash outlays and their resulting profit or loss. Opportunity cost is the value of a factor in its next best alternative use. In other words, the opportunity cost of any commodity is the amount of other good which has been given up in order to produce that commodity.
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Yogita Ingle 7 years, 3 months ago
A government budget is an annual financial statement showing item wise estimates of expected revenue and anticipated expenditure during a fiscal year.
Budget has two parts:
(a) Receipts; and (b) Expenditure.
Importance of a budget:
(a) Today every country aims at its economic growth to improve living standard of its people. Besides, there are many other problems such as poverty, unemployment, inequalities in incomes and wealth etc. Government strives hard to solve these problems through budgetary measures.
(b) The budget shows the fiscal policy. Itemwise estimates of expenditure discloses how much and on what items, the government is going to spend. Similarly, itemwise details of government receipts indicate the sources from where the government intends to get money to finance the expenditure.
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The Central Bank acts as a controller of money supply and credit, using the following methods
(i) Margin requirement It is a qualitative method of credit control. A margin refers to the difference between market value of the security offered for loan and the amount loan offered by the ‘ commercial banks. During inflation, supply of credit is reduced by raising the requirement of margin. During deflation supply of credit is increased by lowering the requirement of ‘margin’. This measure is often used to discourage the flow of credit into speculative business activities.
(ii) Open market operations Under open market operations, RBI purchases or sells government securities to commercial banks and 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 public as they deposit or withdraw the money from commercial banks. Thus, money creation by commercial banks get affected.
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Yogita Ingle 7 years, 3 months ago
An indifference curve is a graph showing different bundles of goods between which a consumer is indifferent. That is, at each point on the curve, the consumer has no preference for one bundle over another.

In the above figure, IC is the Indifference Curve. Each bundle on the IC shows those combinations of two goods that yield the consumer the same level of satisfaction.
This property implies that an indifference curve has a negative slope. If the preferences are monotonic, an increase in the amount of good: 1 along the indifference curve is associated with a decrease in the amount of good 2. This implies that the slope of the indifference curve is negative. Thus, monotonicity of preferences implies that the indifference curves are downward sloping from left to right.
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Yogita Ingle 7 years, 3 months ago
| Direct tax | Indirect Tax |
| Direct tax is referred to as the tax, levied on person's income and wealth and is paid directly to the government. | Indirect Tax is referred to as the tax, levied on a person who consumes the goods and services and is paid indirectly to the government. |
| Tax evasion is possible. | Tax evasion is hardly possible because it is included in the price of the goods and services. |
| Direct tax helps in reducing the inflation. | Indirect taxes promotes the inflation. |
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<font face="Arial"><font color="#ff00ff">Total Cost</font></font><font face="Arial"> (TC) is the cost of all the productive resources used by the firm. It can be divided into two separate costs in the short run.</font>
<font face="Arial"><font color="#ff00ff">Total Fixed Cost</font></font><font face="Arial"> (TFC) is costs of firm’s fixed resources; TFC does not vary with changes in short-run output.</font>
<font face="Arial"><font color="#ff00ff">Total Variable Cost</font></font><font face="Arial"> ( TVC) are costs of firm’s variable resources, TVC does vary with changes in output.</font>
<font face="Arial"><font color="#ff00ff"><font style="background-color: rgb(255, 255, 255);">TC = TFC + TVC</font></font></font>

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Cbse Student 7 years, 3 months ago
2Thank You