Civil service quizzes

India experienced an economic crisis as a result of its external debt, which the government was unable to resolve. make repayments on its international debt; reserves of foreign currency (ii) When income exceeds expenditure,  The government borrows money from banks to cover the deficit. as well as from within the country and from abroad Institutions of international finance (iii) When the government was spending a significant amount of money It spends its money on things that don't pay off right away. There are rewards in areas such as the social sector and defence. There was a need to put the balance of the company's money to good use in a timely manner (iv) foreign exchange reserves fell to an all-time low not enough to cover imports for more than two years weeks. (v) India applied for a loan from the International Bank. IBRD stands for International Bank for Reconstruction and Development. The World Bank and the International Monetary Fund are both known as the World Bank an

 Foreign trade is the exchange of goods and services between countries throughout the world. International trade, often known as external trade, is the term used to describe it. The Importance of Foreign Trade: Because trade is so vital for economic development, it is a growth engine for an economy. It accounts for a large portion of Gross Domestic Product in developed countries. The following points can be used to justify the importance of foreign trade: Term definition: "International Trade" is defined by Wasserman and Hultman as "transactions involving residents of various countries."

  It is an economic system in which the government and the private sector share economic control. It is said to as the "golden medium" of capitalism and socialism. systems of economics The concept of a mixed economy is relatively new, having gained popularity in recent years. Since the second half of the twentieth century, it has risen to prominence. Under this arrangement, the public and private sectors coexist. Industries Defense, atomic energy, and money are all areas of strategic importance. public utilities such as trains and roads, as well as goods and heavy industries The public sector is in charge of power, among other things. Consumer goods are mostly produced by the private sector. goods, Agriculture (including plantations), external trade, and other activities are subject to government regulation. The government, on the other hand, sees both the public and private sectors as equally vital. There is considerable freedom to own private property and pick one's own

 Economy that has been well planned 1. Karl Marx's works influenced the concept of a planned economy. 2. It was established in 1917 in the former Soviet Union, and afterwards in Eastern European countries influenced by the Soviet Union. 3. In 1949, the People's Republic of China established a planned economic model, sometimes known as a command economy or state economy. 4. There were two major sub-types of planned economies: communist and socialist economies. All property and methods of production were under state control in a communist economy. The government had total control over the economy. It decided what should be produced, how much should be paid to each factor of production (land rent, labour wages, etc. ), and how demand and supply should be managed. The emphasis in a socialist economy was on collective ownership of the means of production, with the state exercising economic control. However, unlike in a communist economy, governmental control was not as strict. A cen

                                                 SUPPLY  A firm, we maintain, is a ruthless profit maximiser. So, the amount that a firm produces and sells in the market is that which maximises its profit. A perfectly competitive market has the following defining features: 1. The market consists of a large number of buyers and sellers 2. Each firm produces and sells a homogenous product. i.e., the product of one firm cannot be differentiated from the product of any other firm. 3. Entry into the market as well as exit from the market are free for firms. 4. Information is perfect. The existence of a large number of buyers and sellers means that each individual buyer and seller is very small compared to the size of the market. These features result in the single most distinguishing characteristic of perfect competition: price taking behaviour. A firm earns revenue by selling the good that it produces in the market. Let the market price of a unit of the good be p. Let q be the quantity of

  The quantity of a commodity that a consumer is willing to buy and is able to afford, given prices of goods and consumer’s tastes and preferences is called demand for the commodity. The relation between the consumer’s optimal choice of the quantity of a good and its price is very important and this relation is called the demand function. Consider any two variables x and y. A function y = f (x) As the value of y depends on the value of x, y is called the dependent variable and x is called the independent variable. The graphical representation of the demand function is called the demand curve. The relation between the consumer’s demand for a good and the price of the good is likely to be negative in general. In other words, the amount of a good that a consumer would optimally choose is likely to increase when the price of the good falls and it is likely to decrease with a rise in the price of the good. The negative slope of the demand curve can also be explained in terms of the two effe

  The consumer has to decide how to spend her income on different goods. Economists call this the problem of choice. Any consumer will want to get a combination of goods that gives her maximum satisfaction. The ‘likes’ of the consumer are also called ‘preferences’. Two different approaches that explain consumer behavior  (i) Cardinal Utility Analysis and (ii) Ordinal Utility Analysis. A consumer, in general, consumes many goods; but for simplicity, we shall consider the consumer’s choice problem in a situation where there are only two goods. i.e, bananas and mangoes Use the variable x1 to denote the quantity of bananas and x2 to denote the quantity of mangoes. x1 and x2 can be positive or zero. Utility of a commodity is its want-satisfying capacity. Utility is subjective. Different individuals can get different levels of utility from the same commodity. For example, some one who likes chocolates will get much higher utility from a chocolate than some one who is not so fond of chocolate