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Nia Flashcards

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1
Q

What is DIFFERENCE between GDP and GVA

A

Gva = gross output - net consumption
GDP = GVA + TAXES - SUBSIDIES
GVA represents economic activity of the producers side
Whereas GDP shows consumer or demand side.

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2
Q

What are final goods?

A

Items mean for final use and will not pass through further production process

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3
Q

What are the types of final goods ?

A

Consumption goods - for immediate or final consumption
Non durable consumption - food items
Consumer durables - go under wear and tear

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4
Q

What are intermediate goods?

A

Goods used as raw materials for production of other commodities

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5
Q

What is Stock ?

A

Quantity of goods or units measured at a point of time

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6
Q

What is flow?

A

Quantity of goods measured with respect to time or change in stock over a period of time

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7
Q

What is gross investment

A

Total investment made on capital goods plus depreciation

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8
Q

What is net investment

A

The Only investment which adds to the capital……ie
Net invest = gross invest - depreciation

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9
Q

What are factors of payment ?

A

Rent
Wages
Intrest
Profit

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10
Q

What is gdp

A

Total value of goods and services produced
By residents of a country in an accounting year

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11
Q

What is the difference between gdp and gnp ?

A

GDP signifies production of goods and services within the border of the nation.and signifies the consumer side within the nation.
Whereas GNP signifies production of goods and services by their nationals globally.

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12
Q

Name the methods to calculate GDP

A

1) Product or value added method
2) expenditure method
3) income method

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13
Q

Which gdp calculation method tells the contribution of each sector?

A

Value added method

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14
Q

What is the formula of gdp in value added method ?

A

GDP= GVA + PRODUCT TAXES- SUBSIDIES

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15
Q

Why taxes are added in gdp of country

A

It shows the spending capacity of the government.

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16
Q

Why doesn’t the government increase excessive tax to increase its gdp

A

It may lead to fall in demand of products and will lead to fall in production and and reduce GDP

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17
Q

Why taxes are added and subsidies are removed from gdp

A

Adding Product taxes tells value genrated for government
And removing subsidies tells exact value of gdp because subsides are given from taxes we pay
Overall in value added method the only show what value is produced in a country.

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18
Q

Define inventory

A

Unsold stock of unfinished,semi finished or raw material goods

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19
Q

What is investment

A

That part of the final output which comprises physical capital goods is called gross investment.

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20
Q

What are categories of investment

A

Rise in value of inventories
Fixed business investment
Residential investment

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21
Q

What is incremental capital output ratio

A

% investment in GDP/% change in GDP
It is an extra unit of output produced per 1 additional unit. Of capital

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22
Q

Tell the formula of expenditure method

A

GDP = C+I+G+X-M
Where
C consumption expenditure by
household sector
I investment expenditure by the private sector
G government expenditure
X export
M* imports*

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23
Q

What is domestic territory

A

It includes territory of India + embassy of India in usa - embassy of usa in india

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24
Q

Name factors calculated in gdp of India?

A

All state gross domestic product ( SDGP) +
Output from centre specific activities like railways ,roads ,defence etc + embassies located abroad+ fishing vessel in international water.

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25
Does in calculation of per capita Gdp population growth rate is considered.?
Yes
26
What is base price?
Factor cost + production taxes( taxes -subsidies)
27
What is market price
Base price + product taxes ( taxes - subsidies)
28
What is considered as national income ?
(Nnp) fc = (GDP)mp- d + nfia - ( id - sub)
29
Does wpi consider services
No
30
Does CPI considers services
Yes
31
Explain creeping ,walking, galloping, hyper inflation,stagflation, dis-inflation,deflation
creeping. - 0-3% walking, -3- 10% galloping, 10-50% hyper inflation 50%+ stagflation- rate rise gdp decrease dis-inflation rate increase but rate of increase fall deflation price fall
32
What is the shadow economy ?
Underground ,informal , parallel economy whose income is not reported to tax authorities. It adds up to trillions of dollars.
33
What is disaving
Spending more than income
34
Define Autonomous consumption
Consumption to meet basic needs even one has zero income. Like food shelter Autonomous consumption does not change with change in income.
35
What are normal goods?
Goods which demand increase with increase in income.due to more spending capacity.
36
Define inferior good and Engle's curve
When a man salary is increased his spending percent on autonomous goods decrease as one man cannot eat beyond his needs so here increase in income decreases demand and this curve is known as engles curve
37
Define giffen goods
Goods for which demand increases even when prices are high...because of low supply...for eg rice
38
Veblen goods
Luxury goods ... demand increase with increase in price
39
What are rival goods
The goods if bought decreases its availability for others
40
What are excludable goods
The Goods which can be excluded to other due our high purchasing power
41
Excludable. Non excludable Rival ________ _______ Goods. Goods Non rival. _________ _______ Goods. Goods
Excludable. Non excludable Rival private. Comman Goods. Goods Non rival. Club public Goods. Goods (Netflix.) (Parks)
42
Do nuts and bolts be considered as Capital goods
No, usually they are not. Despite being part of the production process they act as supporter ( intermediate goods)
43
What is the double coincidence of wants
A situation where the buyer and seller have the things which the other wants in the Barter system.
44
What is the difference between stock and flow variable?
Stock = Still: It stays still unless changed by a flow. Flow = Fluid: It keeps moving or accumulating over time.
45
Does the gross value added considers cost of inputs and raw material
No, only "value added" is taken into account.
46
What is depreciation
Loss of value of tangible and intangible assets due to use ,age, exposure to elements or obsolescence (loss value in compition)
47
What is the significance of green gdp And how is it calculated
Green gdp tells the impact of economic activities on the environment. Green gdp= Gdp - (damage caused by CO2+ particulate matter) -( opportunity cost of energy depletion+ mineral depletion + net forest depletion) + Expenditure on environmental protection.
48
What are types of imperfect competition?
Monopoly(1) , duopoly(2) and oligopoly (few) dominate the market
49
What is cartel
To convert oligopoly in monopoly many firms come together....eg OPEC
50
What is capital in economics ?
**capital** refers to the assets: physical tools, plants and equipment that allow for increased work productivity.thus more goods will be produced by capital equipment and standard of living will rise Usually in old school economics capital does not refer to money it refers to plants and firm
51
What is the significance of ICOR?
Incremental capital output ratio tells the amount of capital required to produce a single unit of output. It is low in developed countries.
52
What are the different types of economic recovery?
1. V-shaped: Quick decline and rapid recovery. 2. U-shaped: Prolonged stagnation before recovery 3. W-shaped: Recovery, dip again, then recovery (double-dip). 4. L-shaped: Sharp decline with no recovery for long. 5. Swoosh-shaped: Sharp fall, slow gradual recovery. But faster than U shaped 6. Z-shaped: Sharp fall, strong rebound, temporary overshoot.
53
What is the opportunity cost?
It is the potential benefit that one misses when she opts for one among two options. One must understand the value of opportunity cost and compare all the benefits and risks by comparing the two options available.
54
Q: What is the significance of potential GDP and actual GDP?
1. Potential GDP: Represents the maximum output an economy can produce without causing inflation. Helps in assessing long-term economic capacity and sustainable growth. 2. Actual GDP: Measures the real-time output of the economy. Indicates current economic performance and helps identify recessions or booms. Significance of Comparison: Output Gap: Difference between potential and actual GDP highlights underutilization (negative gap) or overheating (positive gap) of the economy. Guides fiscal and monetary policy decisions.
55
Q: What is the inventory turnover ratio, and why is it significant?
Definition: Inventory turnover ratio measures how efficiently a company converts its inventory into sales within a specific period. Formula: Inventory Turnover Ratio = Cost of Goods Sold (COGS) / Average Inventory Significance: 1. Indicates operational efficiency. 2. Higher ratio: Efficient inventory management, quicker sales. 3. Lower ratio: Overstocking or poor sales.
56
What is the difference between chain based and fixed based gdp calculation method
The chain based approach considers previous year as a base. And in a fixed year the base year is taken as a base .
57
What is the gig economy?
Definition: The gig economy is a labor market characterized by short-term, flexible jobs where individuals work as freelancers or independent contractors rather than full-time employees. Examples: Ride-sharing (e.g., Uber, Ola), food delivery (e.g., Zomato, Swiggy), and freelance platforms (e.g., Upwork, Fiverr). Significance: 1. Provides flexibility and diverse income opportunities. 2. Challenges include lack of job security and social benefits.
58
What is the aim of circular economy
An Economy model that involves reusing and recycling existing materials as long as possible.
59
Does price celing and pruce floors exceed market determined prices
No
60
What is difference between cost and price
Cost is required for manufacturing Price is paid by consumer
61
What is MCA 21
The Ministry of corporate affairs in the 21st century is a database used to calculate gdp
62
What are Free riders.?
Want to save own money and use government opportunities.
63
What are Free riders.?
Want to save own money and use government opportunities.
64
What is elasticity ?
The degree of change when demand changes due to change in price eg-luxary goods ,food , beverages Inelastic is minimal change in degree Eg essential commodities like drugs , tobacco etc
65
What is the paradox of value,thrift and toil
Paradox of value - diamond vs water Paradox of thrift- saving money in present leads to decreased savings in future due to leakage in flow of money Paradox of toil - people work additional hours for promotion but it leads to fall in wages and increase unemployment
66
What is currency chest
A place where stock of money owned by rbi to fill atms and banks is kept....it is guard by banks and rbi pays bill to guard them.
67
What is currency chest
A place where stock of money owned by rbi to fill atms and banks is kept....it is guard by banks and rbi pays bill to guard them.
68
What is velocity of circulation
Number of times money transacted It is high in expanding economy And low in contradictory economy
69
Name some product tax
Excise duty, sales tax, service tax, import and export duties
70
Q: What is the significance of marginal propensity to consume (MPC)?
Definition: Marginal Propensity to Consume (MPC) is the proportion of an additional amount of income that a consumer spends on goods and services, as opposed to saving. Formula: mpc = change in consumption/ change in income Significance: 1. Economic Stimulus: A higher MPC indicates that people are likely to spend additional income, stimulating demand and economic growth. 2. Multiplier Effect: MPC is central to the multiplier effect—a higher MPC leads to a larger multiplier, where increased consumption generates more income and output in the economy. 3. Policy Implications: It helps in shaping fiscal policies. For example, governments may consider the MPC when implementing tax cuts or stimulus packages to boost consumer spending. 4. Consumption Behavior: Understanding MPC gives insights into consumer behavior, saving patterns, and the overall economic cycle.
71
Formula of investment multiplier
K = 1/ 1-MPC or 1/ MPS
72
What us output gap
Positive output gap occurs when actual gdp is more than potential gdp...can lead to inflation but increases gdp And negative is vice versa
73
What is difference in tangible and intangible assets
Tangible assets can be physically touched Ex hardware Intangible cannot be touch eg sofyware
74
What does income method calculates
NDP at fc
75
What is the difference between the real sector and financial sector
Real sector talks about uncomplicated things and when complicated things like banking enters it become financial sector
76
What is the difference between the real sector and financial sector
Real sector talks about uncomplicated things and when complicated things like banking enters it become financial sector
77
What is marginal product of capital
Change in output when an additional unit of capital is employed Declining MPK reduce investment in company
78
What is platform economy
EgAmazon. ...with spending much on physical stores
79
What is platform economy
EgAmazon. ...with spending much on physical stores
80
What are complementary and substitute goods?
Sugar and tea are complimentary Tea and coffee are substitute goods

Economics (2 decks)

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