Economics Unit Test: Supply and Demand, Keynesian Theory, Public Revenue, Expenditure

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6 Questions

Explain the statement 'Supply creates its own demand' by J.B Say.

J.B Say's statement 'Supply creates its own demand' means that the act of producing goods and services automatically generates the income needed to purchase those goods and services.

What are the sources of public revenue?

The sources of public revenue include taxes, fees, fines, grants, and donations.

Explain the Keynesian theory of employment with the help of a diagram.

The Keynesian theory of employment states that the level of aggregate demand determines the level of employment in an economy. A diagram illustrating this theory would show the relationship between aggregate demand and employment.

What are the characteristics of federal finance?

Federal finance involves the financial activities of the central government, including revenue generation through taxes, allocation of funds to states, and management of public debt.

Write a note on the Finance Commission and its functions.

The Finance Commission in India is a constitutional body that recommends the distribution of financial resources between the central government and states. Its functions include reviewing the financial situation of states, recommending grants, and advising on fiscal matters.

What is meant by primary deficit?

Primary deficit refers to the fiscal deficit of a government excluding the interest payments on past borrowings. It indicates the shortfall in revenue compared to expenditure, excluding debt servicing costs.

This quiz covers topics related to Economics including the statement 'Supply creates its own demand' by J.B Say, sources of public revenue, items of public expenditure, Keynesian theory of employment with diagram, and redemption methods of public debt.

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