Test-2 Flashcards
Macro econ vulnerability index=
Was introduced in —-. In 2012, —- was the most vulnerable of the major emerging economies and also among the fragile 5(—-). Below — is considered safe.
Economic vulnerability index is give by the — to identify.
Fiscal deficit+ CAD+ Rate of inflation- ESI 2014-15- India- Brazil, India, Indonesia, South Africa and Turkey- 12.
“Economic vulnerability index” is one of the criteria used by the United Nations Committee for Development Policy, an advisory body to the United Nations Economic and Social Council in the identification of Least Developed Countries.
The Economic Vulnerability Index is a composition of the following eight indicators: 1) population size, 2) remoteness, 3) merchandise export concentration, 4) share of agriculture, forestry and fisheries in gross domestic product, 5) homelessness owing to natural disasters, 6) instability of agricultural production, and 7) instability of exports of goods and services, 8) the share of population living in low elevated coastal zone.
During inflation,
The purchasing power of bond remains intact only if the—–.
Debtor — money and creditor — money.
Producer —- and consumers —-.
Imports —- and exports —- leading to —- balance of payment.
The interest rate is more than the inflation rate- gains- loses- gains- lose- increase- decrease- unfavorable
CPI- —- represent all the goods and services in country. Imports are —-. Is also used to calculate —- an integral part of salary of govt employees.
GDP deflator- —- represent all the g and s. Imports are —-.
Does NOT- included- DA with the same base year of 2012.
Does, coz it includes all g and s and excludes imports.
Net factor income from abroad is the income earned by —- from abroad. Therefore, here, the production can happen outside India, and hence it is different from —-.
4 factors of production- exports.
UBI proposal- dealt with in —-. — for state assembly elections and —- by Congress for LS elections are some examples of mainstreaming the UBI. Telangana’s — and Odisha’s —- are also examples of same schemes selectively applied only for farmers. 1st country to do so in practice is —-. A pilot project was also conducted in — and — area to see the viability of UBI and this concluded with positive results.
ESI(2017)- Sikkim democratic front- Nyaya scheme i.e. Nyuntam aay yojana- Rythubandhu scheme( Rs 10000/ha)- KALIA i.e. Krushak assistance for livelihood and income aasistance, 5000 cash per season- Delhi and MP between 2010-2013.
The value of —— in the econ is called as investment. Forgone present consumption leads to increased future consumption.
Indicators that represent the inflation in the imported components as well-
And indicator reflecting the inflation in domestically produced goods is-
Capital goods
- CPI and WPI (In US, WPI is called as Producer’s price index)
- GDP deflator
- The decrease in the dependency ratio of a country may lead to- Increased savings rate, Increased cap formn.
- When a country is going through a phase of industrialization, 1) Capital to labour ratio increases.
2) Productivity of labour increases.
3) Total factor productivity increases.
Openness of the econ is measured in terms of —–.
= —-+—-/ —–
Higher the openness index- —– the influence of trade on domestic acts and stronger that country’s economy.
Exports and imports of g and s as a % of GDP.
= Exports + imports/ GDP
-Higher
The global trade to global output will decrease if- —– in the share of services in GDP of countries.
- Countries become —–. Because when that happens —– constitute a greater share of GDP which decreases the global trade.
Increase- Richer- Non-traded services.
Liquidity trap will lead to- —- interest rates- people will — cash- Demand deposits in the banks —–.
People —— invest in bonds as well because of the belief that interest rates will soon —- which will —- the returns on the bonds as the interest rates and prices have an —- relationship.
- ——- effective demand will lead to an increase in inflation.
Low or zero interest rate- hold on to- increase- won’t- increase- decrease- inverse.
Higher.
- —- increases the purchasing power of money over time. It hurts the —-. So, it will lead to companies deferring their investments, people deferring their expenditure which leads to —- in demand and —– increases.
Deflation- the borrowers- decrease- unemployment.
- Side note- Reasons for increase in fiscal deficit- 1. Increase in subsidies 2. payment of interest 3. defense expenditure 4. Poor performance of public sector 5. tax evasion 6. weak revenue mobilization 7. huge borrowings 8. unproductive expenditure by the govt.
GDP deflator is also the ratio of —– and —- and as the weights of g and s in GDP deflator are — constant and —- according to the production level of each g and s, it reflects the —- changes and —– pattern in econ.
Ratio of GDP at current prices (which also means GDP not adjusted for inflation i.e. nominal GDP) and GDP at constant prices ( which is the GDP adjusted for inflation, that is the Real GDP)
= Nominal GDP (GDP at current prices)/ real GDP (GDP at constant prices) * 100.
- Not constant and differ acc to the production - Structural changes and changes in the consumption pattern.
——–= National Income- Undistributed profits- Net interest payments made by households- corporate tax+ transfer payments to the households from govts and firms.
Personal Income
Factor cost=
Basic prices=
Market prices=
Basic prices include —- and not —–. Therefore they lie between —- and —-.
Therefore,
GVA at factor costs+ —– - —–= GVA at basic prices
GVA at basic prices+ —– - —–= GVA at market prices
Therefor, there cant be a determined quantitative (whether if one is less than other or vice versa) relationship between GVA at basic prices and that of market prices.
Factor cost= ONLY the payments made to the FoPs, NO taxes.
Basic prices= Factor costs+ Production taxes- production subsidies
Market prices= Basic prices+ Product taxes- product subsidies
Basic prices include production taxes(less production subsidies) and not product taxes( less product subsidies). Therefore they lie between Factor costs and market prices.
Therefore,
GVA at factor costs+ Production taxes- production subsidies = GVA at basic prices
GVA at basic prices+ Product taxes- product subsidies= GVA at market prices
Therefor, there cant be a determined quantitative (whether if one is less than other or vice versa) relationship between GVA at basic prices and that of market prices.
After 1990 reforms, Foreign investment limit in banks was raised to around —. Banks have also been given permission to generate resources from India and abroad, but certain managerial aspects have been retained with RBI.
50%
Inflation-indexed bond is linked to —– indicator. Bondholders —- during inflation.
Repayment of public debt neither creates money, nor decreases it, therefore no inflationary situation is created.
CPI- Combined
- Lose, coz bond’s real interest rate( nominal interest rate- inflation rate) will be less.
