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A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by the central bank. The NBFIs do not carry on pure banking business, but they will carry on other financial transactions. They receive deposits and give loans. They mobilize […]
Introduction Finance is the life blood of all economic activities such as trade, commerce, agriculture and industry. A bank is generally understood as an institution which provides fundamental financial services such as accepting deposits and lending loans. Banking sector acts as the backbone of modern business world. The banking system significantly contributes for the development […]
Deflation:The essential feature of deflation is falling prices, reduced money supply and unemployment. Though falling prices are desirable at the time of inflation, such a fall should not lead to the fall in the level of production and employment. But if prices fall from the level of full employment both income and employment will be […]
Supply of Money Money supply means the total amount of money in an economy. It refers to the amount of money which is in circulation in an economy at any given time. Money supply plays a crucial role in the determination of price level and interest rates. Money supply viewed at a given point of […]
Introduction: Monetary Economics is a branch of economics that provides a framework for analyzing money and its functions as a medium of exchange, store of value and unit of account. It examines the effects of monetary systems including regulation of money and associated financial institutions. Money 1 Meaning: Money is anything that is generally accepted […]
The consumption function or propensity to consume refers to income consumption relationship. It is a “functional relationship between two aggregates viz., total consumption and gross national income.” Symbolically, the relationship is represented as C= f (Y) Where, C = Consumption Y = Income f = Function Thus the consumption function indicates a functional relationship between […]
Glossary * Full employment : Persons who are willing to work and able to work must have employment or a job *Unemployment : when there are people, who are willing to work and able to work but cannot find suitable jobs. *Disguised unemployment : It is found in which when more people are doing work […]
Effective Demand The starting point of Keynes theory of employment and income is the principle of effective demand. Effective demand denotes money actually spent by the people on products of industry. The money which entrepreneurs receive is paid in the form of rent, wages, interest and profit. Therefore effective demand equals national income. An increase […]
Classical Theory of Employment There was no single theory which could be labeled as classical theory of employment. The classical theory of employment is composed of different views of classical economists on the issue of income and employment in the economy. Adam smith wrote the book “An Enquiry into the Nature and Causes of the […]
1 Introduction The economic history has shown many countries facing economic problems. Out of these problems, unemployment is the most vexing. Both classical economists and Keynes have explained the relationship between employment and income. The classical economists had great faith in the law of markets articulated by J.B. Say, the French economist. J. M. Keynes […]
Glossary 1 GNP : Total money value of final goods and services produced in a country during a particular year (one year) including depreciation and net exports 2 NNP : Total money value of final goods and services produced in a country during a particular year (one year) excluding depreciation including net exports 3 NNP […]
National income is also being measured by the social accounting method. Under this method, the transactions among various sectors such as firms, households, government, etc., are recorded and their interrelationships traced. The social accounting framework is useful for economists as well as policy makers,because it represents the major economic flows and statistical relationships among various […]
In India, a special conceptual problem is posed by the existence of a large, unorganised and non-monetised subsistence sector where the barter system still prevails for transacting goods and services. Here, a proper valuation of output is very difficult. Difficulties: 1 Transfer payments 2 Difficulties in assessing depreciation allowance 3 Unpaid services 4 Income from […]
National income is of great importance for the economy of a country. Nowadays the national income is regarded as accounts of the economy, which are known as social accounts. It enables us 1. To know the relative importance of the various sectors of the economy and their contribution towards national income; from the calculation of […]
Methods of Measuring National Income All goods and services produced in the country must be counted and converted against money value during a year. Thus, whatever is produced is either used for consumption or for saving. Thus, national output can be computed at any of three levels, viz., production, income and expenditure. Accordingly, there are […]
What is national income : National Income provides a comprehensive measure of the economic activities of a nation. It denotes the country’s purchasing power. The growth of an economy is measured by the rate at which its real national income grows over time. National income thus serves as an instrument of economic planning.Further, national income […]
Ear witness: A ear witness is similar to an eyewitness, but as the name suggests an ear witness testifies in court that he has heard something instead of actually seeing it. Earnest money: In real estate, earnest money is paid as an advance by the purchaser to the seller at the time of the sales […]
Dy Dying declaration: A dying declaration is the evidence provided by a person who is no his death bed and are given the same weight age as regular evidence. The reason behind this is that a person who is dying and know it generally will not tell a lie. Dynamic asset allocation: Dynamic asset allocation […]
Du Dual agency: A real estate agent or broker who represents both seller and the buyer of a property in a real estate transactions. Dual currency issues: A euro bond that makes coupon payment or payment of interest in one currency but pays the principal in a different currency. Due process : A principal wherein […]
Dr Drawings: Money or good withdrawn by an owner of an unincorporated business. Drayage: The fee charged for or the process of transporting goods by lorry or truck. Drip advertising: An advertising campaign in small amounts over a long period of time to ensure that the public is continually aware of a product or service. […]