Relevance: Prelims: Economy
►NATIONAL INCOME: National income or Gross Domestic Product (GDP) refers to the money value of all final goods and services produced in an economy in an accounting year.
►CAPITAL CONSUMPTION: The capital that is consumed by an economy or a firm in the production process. Also known as depreciation.
►INCREMENTAL CAPITAL OUTPUT RATIO: A measure of how much additional capital is needed to produce each extra unit of output. It reflects the efficiency of new investment.
►CROWDING OUT EFFECT: A concept of public finance which means an increase in the government expenditure which has an effect of reducing the private sector expenditure.
►ECONOMIES OF SCALE: The long run reduction in average/unit cost as the scale of firm’s output increases.
►FISCAL DRAG: The negative effect of the progressive taxation that economies feel on their expansion – fall in the aggregate demand of the economy due to people moving from lower to higher tax brackets.
►INVESTMENT: Investment refers to the addition to the physical stock of capital. It is inversely related to the rate of interest in the economy. An increase/decrease in interest rate will result in decrease/increase in investment in the economy.
►LIQUID ASSETS : The monetary assets that can be used directly as payments.
►LIQUIDITY TRAP: A situation when interest rate is so low that people prefer to hold money rather than invest it.
►NET WORTH: Net worth for a company is total assets minus total liabilities.
►PREDATORY PRICING: The pricing policy of a firm with the purpose of harming rivals or exploiting the consumer.
►PURCHASING POWER PARITY: It is an economic theory that compares different countries currency through a market basket of goods approach. According to this concept, two currencies are in equilibrium or at par when a market basket of goods (taking into account the exchange rate) is priced the same in both countries.
►SEIGNORAGE: It is the profit made by the RBI by issuing currency especially the difference between the face value of currency and their production costs.
For more such notes, Articles, News & Views Join our Telegram Channel.
Click the link below to see the details about the UPSC –Civils courses offered by Triumph IAS. https://triumphias.com/pages-all-courses.php