Economics Quiz on Demand and GNP Concepts

Economic & Business Environment - Chapter Overviews

• The document is a study guide covering various chapters within the subject of Economic & Business Environment.
• Chapters include: Basics of Demand and Supply, Market Competitions, National Income Accounting, Indian Union Budget, Indian Financial Markets, Indian Economy, Entrepreneurship Scenario, Business Environment, Key Government Institutions.
• Page numbers are included for each chapter providing a detailed table of contents.

Theory of Demand and Supply

• Demand: A consumer's desire to buy goods and services and their willingness to pay a price.
• Law of Demand: A negative relationship between the price and quantity demanded (other things being equal). As price falls, quantity demanded rises, and vice versa.
• Assumptions of the Law of Demand: Other factors affecting demand (income, preferences, related goods prices, etc.) are held constant.
• Exceptions to the Law of Demand: Giffen goods (inferior goods where demand increases as price increases), snob appeal goods (price is a factor in attraction), and speculation.
• Law of Supply: The direct relationship between the price of a commodity and the quantity supplied (other things being equal). As price rises, quantity supplied rises, and vice versa.
• Assumptions of the Law of Supply: Other factors affecting supply(cost of production, technology, etc.) are held constant.
• Exceptions to the Law of Supply: Sudden scarcity or other factors that could affect the supply of a commodity.

Elasticity of Demand

• Price Elasticity of Demand: The responsiveness of quantity demanded to a change in price.
• Types of Price Elasticity: Perfectly elastic, perfectly inelastic, relatively elastic, relatively inelastic, and unitary.
• Factors affecting Price Elasticity of Demand: Price level, availability of substitutes, necessities vs. comforts/luxuries, various uses of a commodity, postponing consumption.

Elasticity of Supply

• Price Elasticity of Supply: The responsiveness of quantity supplied to a change in price.
• Types of Price Elasticity of Supply: Perfectly inelastic supply, relatively inelastic supply, unitary elastic supply, and relatively elastic supply.
• Factors influencing Elasticity of Supply: Price of the good, probability of future price changes, cost of production, nature of the good, length of time.

Forms of Market Competition

• Perfect Competition: A large number of buyers and sellers, homogenous products, free entry and exit.
• Monopolistic Competition: A large number of buyers and sellers, differentiated products, relatively free entry and exit.
• Oligopoly: A few large sellers, interdependence among firms, significant barriers to entry.
• Monopoly: One large seller, significant barriers to entry, price-setting power.

National Income Accounting

• Methods to measure National Income: Product (value-added) method, Income method, Expenditure method.
• The Product Method involves calculating the net value added by each enterprise.
• The Income Method focuses on the income received by factors of production (wages, rent, interest, and profit).
• The Expenditure Method sums up all spending on final goods and services.

Indian Union Budget

• Types of Government Funds: Consolidated Fund, Contingency Fund, Public Account.
• Key Components: Annual Financial Statement, Demand for Grants, Finance Bill, Appropriation Bill.
• Revenue Budget: Revenue receipts, Revenue expenditure
• Capital Budget: Capital receipts, Capital expenditure
• Fiscal Deficit: Difference between total expenditures and total receipts of the government.

Indian Financial Markets

• Overview of the Indian financial ecosystem and its role in economic development.
• Key players: Commercial Banks; Small Finance Banks; Payment banks; Co-operative banks; Financial Institutions (e.g., IFCI,SIDBI); Mutual Funds; Insurance institutions; and the Securities & Exchange Board of India (SEBI).
• Regulatory bodies: RBI, SEBI.
• Trends and developments in various financial instruments (e.g., FDI, IPOs) and other forms of financial activity.

Indian Economy

• Key sectors: Agriculture; Manufacturing; Services.
• Major Government initiatives related to each sector.
• Trends, developments, and associated challenges.
• Macroeconomic factors such as FDI, trade balance, and GDP growth.

Entrepreneurship Scenario

• Government Initiatives to foster entrepreneurship (e.g., Make in India, Startup India).
• Challenges related to entrepreneurship(e.g., financing, network, and growth too fast).
• Key players: Entrepreneurs; Financial Institutions/organizations; Government programs.

Business Environment

• Business environment is the aggregate of all conditions, events, and influences that affect a business.
• Key factors: Political, economic, social, and technological factors which influence the environment.
• Factors influencing businesses directly and indirectly.

Key Government Institutions

• Details of NITI Aayog, RBI, and IBBI, and their individual roles and functions relating to the Indian economy.
• Major functions of NITI Aayog: Evolving shared vision for national development, fostering cooperative federalism, developing policy frameworks and monitoring their progress, developing knowledge and cooperation through collaborative networks.
• Key functions of RBI: Formulating and executing monetary policy, regulating the flow of money and credit throughout the country, acting as banker, and other related banking and financial services.
• Key functions of IBBI: Ensuring insolvency professional development, enforcing rules and regulations, and resolving corporate and individual disputes (specifically related to commercial matters).