Income, Expenditure, and Savings Definitions
12 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the meaning of compounding according to the text?

  • A method to calculate the compound annual growth rate (CAGR)
  • A technique used to calculate the present value of future cash flows
  • A technique used to calculate the future value of present cash flows (correct)
  • A way to determine returns for individual assets and investment portfolios

    • Which of the following is an example of a direct tax mentioned in the text?

  • Sales tax
  • Value-added tax
  • Goods and services tax
  • Income tax (correct)

    • What is the primary role of a bank according to the text?

  • To act as a financial intermediary between savers and borrowers (correct)
  • To facilitate money transfers and payments
  • To offer a wide range of financial services and products
  • To provide investment opportunities

    • What is the purpose of the Pradhan Mantri Jan-Dhan Yojana (PMJDY) scheme mentioned in the text?

    <p>To provide basic banking services to the unbanked population</p> Signup and view all the answers

    What is the meaning of the compound annual growth rate (CAGR)?

    <p>The rate at which an investment grows annually, compounded</p> Signup and view all the answers

    What is the primary function of a bank according to the text?

    <p>To accept deposits and provide loans and advances</p> Signup and view all the answers

    What is the meaning of income?

    <p>A record of money received and spent by a business or organization during a particular period</p> Signup and view all the answers

    Which of the following is NOT a factor of production?

    <p>Savings</p> Signup and view all the answers

    What is the meaning of the time value of money?

    <p>The concept that a sum of money is worth more now than the same sum will be at a future date due to its earnings potential in the interim</p> Signup and view all the answers

    What does GDP stand for?

    <p>Gross Domestic Product</p> Signup and view all the answers

    Which of the following is NOT a method of saving?

    <p>Spending money on current expenditures</p> Signup and view all the answers

    What is the meaning of expenditure?

    <p>The act or process of paying out</p> Signup and view all the answers

    Study Notes

    Income, Expenditure, and Savings

    • Income refers to the money received and spent by a business or organization during a particular period.
    • Expenditure is the act of paying out money, and it can also refer to something paid out, such as capital expenditure.
    • Savings is the portion of income not spent on current expenditures, set aside for future use, and not spent immediately.

    Factors of Production

    • Factors of production are the inputs needed to produce goods and services, which includes land, labor, capital, and entrepreneurship.
    • These factors are the resources required to create a good or service, and they are measured by a country's Gross Domestic Product (GDP).

    Gross Domestic Product (GDP)

    • GDP stands for Gross Domestic Product and represents the total monetary value of all final goods and services produced and sold within a country during a period, typically one year.

    Time Value of Money

    • The time value of money is the concept that a sum of money is worth more now than the same sum will be at a future date due to its earnings potential in the interim.

    Compounding and Discounting

    • Compounding is a technique used to calculate the future value of present cash flows.
    • Discounting is a technique used to calculate the present value of future cash flows.

    Compound Annual Growth Rate (CAGR)

    • CAGR is the mean annual growth rate of an investment over a specified period longer than one year.
    • It represents one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios, and anything that can rise or fall in value over time.

    Taxation

    • Income tax is a tax levied directly on personal income and is a type of direct tax.
    • Direct taxes are paid directly to the entity that imposed them, and examples include income tax, real property tax, personal property tax, and taxes on assets.

    Banking

    • A bank is a financial institution that performs the deposit and lending function.
    • Banks act as an intermediary between savers and borrowers.

    Functions of Banks

    • Accepting deposits
    • Giving advances/loans
    • Payment and withdrawal
    • Ever-increasing functions including agency and utility services

    Types of Bank Deposits

    • Savings deposits
    • Fixed deposits
    • Current deposits
    • Recurring deposits

    Deposit Insurance (PMJDY)

    • Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a National Mission for Financial Inclusion to ensure access to financial services.
    • Under the scheme, a basic savings bank deposit (BSBD) account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Test your knowledge on the meanings of income, expenditure, and savings. Learn about how these terms are defined and their importance in financial management.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser