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economics sba raj > 1 types of economy, rule of demand and supply > Flashcards

1 types of economy, rule of demand and supply Flashcards

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1
Q

which economy supports equality, and which liberty

A

equality comm
liberty cap

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2
Q

which economy tends to incline more towards dictatorship

A

comm

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3
Q

in communism, resources are to be distributed equally, what is the difference in capitalism

A

in cap, they should be distributed on the basis of merit

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4
Q

what are the two classes communism divides

A

exploiter and exploited

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5
Q

religion is compared to what in communism

A

opium

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6
Q

who is the main thinker of communism

A

karl marx

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7
Q

what is the main book of karl marx

A

the communist menifesto

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8
Q

who is the main thinker of capitalism

A

adam smith

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9
Q

which book did adam smith write?

A

wealth of the nations in 1776

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10
Q

when did the communist revolution take place in russia

A

in 1917

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11
Q

when lenin died, who took the charge of the communist revolution in russia

A

stalin

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12
Q

when did the communist revolution took place in china

A

1 oct, 1949

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13
Q

when did the china accept the economic reforms

A

aka “reform and opening up” policy was in 1979

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14
Q

when did the communist revolution in cube take place

A

1959

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15
Q

who was the main leader of communist reform of cuba

A

fidel castro

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16
Q

what kind of economic model is used in india

A

mixed
capitalism+socialism

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17
Q

when did the indian economy move away from socialism to capitalism

A

1991 economic crises

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18
Q

what are the two economic forces in economy

A

demand and supply

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19
Q

which factors we see affected when there is an imbalance between demand and supply

A

prices
inflation
profit
investment
regular income
living standard

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20
Q

what happens to factors individually when demand is more than supply

A

prices
inflation
profit
investment
regular income
living standard

all increase

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21
Q

what happens to factors individually when supply is more than the demand

A

prices
inflation
profit
investment
regular income
living standard

all decrease

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22
Q

as we see when demand is more than supply, everything increases including the living standard. what happens when there is in excessive imbalance?

A

some inflation is necessary but if inflation increases excessively, then value of currency decreases and the currency system might collapse

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23
Q

when demand is more than supply for a long time, what is it called? what happens in it? what is the extreme version of it?

A

it is called recession
economy slows down, if this situation continues for a longer period, it is called depression

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24
Q

which market force sees an effort to increase it? what is it related to?

A

supply. as it is related to production, there is always an effort to increase it

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25
what results in inflation
when there is a high demand, that means there is more currency in market, then it means the liquidity is high, it results in inflation
26
what does the RBI do to control inflation?
reduce liquidity through monetary policy
27
when is the fiscal policy used
when there is an economic recession, government increases expenditure so that demand could increase, for this, fiscal policy is used
28
what is the target of inflation in india
4%±2%
29
what is the relation between prince and demand in the rule of demand
negative i.e. prices are high, demands reduces
30
what is the relation between price and supply in the rule of supply
positive i.e. since prices are high, supply increases to make sellers and producers more profit
31
which force indicates which view point
rule of demand in the view point of the consumer rule of supply, producer
32
what is the equilibrium price
at the point where the buyer and seller agree, this point determines the price we see the supply and demand graphs intersect
33
what are the factors affecting the demand. MAINS 2 marks
price income population related goods (complementary and substitute) choice of interest of consumer future price expectation government policies advertisment
34
what are complementary goods
goods which go together with other goods. bread and butter, peanut butter and jam, car tires and cars
35
what are substitute goods
goods that can be used as a substitute to other goods. eg: if price of mutton increases, meat eaters would switch to chicken, if prices of taxi increases people would switch to ride sharing or public transport. if price of paper increases, people would substitute with online writing tools
36
what are the types of demands
7 types direct indirect individual market joint competitive composite
37
what is direct demand
demand unrelated to any other products like food and medicine or cars or clothings
38
what is indirect demand
when demand changes of any product depending on another product these are also known as intermediate goods eg: if cars increase, demand for tires and fuel increase
39
what is individual demand
a single consumer's demand of a product or group of related products at a given price for a given period of time
40
what is the importance of individual demand
how consumer makes decisions and how they respond to changes in price, income and availability of substitutes
41
what is market demand
total demand of a good or service within a given market in given time
42
what is joint demand
when 2 or more goods that go together example bread and butter
43
what is competitive demand
when a product, within a market characterised by many buyers and sellers, they have low influence as the price is mostly determined by supply and demand interaction
44
what is composite demand
similar to indirect or joint demand, but of a composite nature, i.e. one thing dependent on more than one thing eg steel is dependent on all the industries that use steel as a raw material like automobiles and infrastructure
45
what are the factors affecting supply
price future price expectations availability of raw material cost of production means of transportation climatic conditions/natural disasters nature of goods technology government policies
46
what are the types of supply
market short term long term joint composite
47
what is market supply
supply of total quantity of particular good that is available for sale at a given price in a market
48
in which type of supply it is easy to make changes to production to meet the demands
short term harder in long term as it needs an overhaul and research
49
what are the exceptions to rule of demand
essential goods, giffen goods and veblen goods
50
how are essential goods an exception to rule of demand
essential goods such as life saving drugs, salt, water, grains etc do not see a major change with price as they are basic need of survival
51
what are giffen goods
when the price of higher quality goods increase, then people demand low quality goods increase. due to this, even if the prices of giffen goods increase, their demands do not decline. this has been disputed by many economists like alfred marshall
52
what are veblen goods
goods which are associated with social prestige like fashionable goods or liquor products
53
what kind of demand and price relation graph is exhibited by veblen goods
upward sloping positive
54
in which book and by whom were veblen goods mentioned first
theory of leisure class by thorstein veblen in 1899
55
who gave its name to giffen goods
robert giffen
56
what are the exceptions to the rule of supply
competition change in business monopoly over market if government has banned the good natural disasters/calamities
57
what is the factor cost of land
rent
58
what is the factor cost of labour
wages
59
what is the factor cost of capital
interest
60
what is the factor cost of entrepreneurship
profit
61
how is overall factor cost calculated
raw material+labour+capital eg rent+wages+interest+profit
62
how is market price calculated using factor cost
factor cost+indirect tax-subsidy
63
which goods are in the primary sector of economy
goods which are related to natural resources eg agriculture, fishing, dairy, forestry
64
which goods are in the secondary sector of economy
constructions and manufacturing eg motor vehicles, textile industries, furniture etc
65
in india, mining is in which sector of economy
secondary
66
which goods are in the tertiary sector of economy
services eg hotel, tourism, telecommunication etc
67
which goods are in the Quaternary sector of economy
knowledge based services like research and development
68
which goods are in the quinary sector of economy
decision making services like bureaucracy and politics
69
which sector has the maximum contribution in the indian economy
service

economics sba raj (2 decks)

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