Podcast
Questions and Answers
What is a defining characteristic of a mixed economic system?
What is a defining characteristic of a mixed economic system?
- It combines elements of both capitalism and communism. (correct)
- It eliminates private property entirely.
- It favors government ownership of all resources.
- It prohibits any form of government interference.
Which of the following is NOT considered a factor of production?
Which of the following is NOT considered a factor of production?
- Wages (correct)
- Labor
- Entrepreneurs
- Land
In a mixed economic system, how does the government typically engage with the economy?
In a mixed economic system, how does the government typically engage with the economy?
- By abolishing private businesses.
- By allowing total economic freedom with no regulations.
- By intervening to pursue social aims. (correct)
- By completely controlling all production.
Which of the following is considered a payment associated with the factor of production 'Capital'?
Which of the following is considered a payment associated with the factor of production 'Capital'?
What is the role of entrepreneurs in the context of production factors?
What is the role of entrepreneurs in the context of production factors?
What does the circular flow model primarily illustrate?
What does the circular flow model primarily illustrate?
Which payment corresponds to labor in the factors of production?
Which payment corresponds to labor in the factors of production?
What typically distinguishes capitalism from communism?
What typically distinguishes capitalism from communism?
What is the primary function of the National Housing Bank (NHB)?
What is the primary function of the National Housing Bank (NHB)?
When was the National Bank for Agriculture and Rural Development established?
When was the National Bank for Agriculture and Rural Development established?
Which committee's recommendation led to the establishment of the National Bank for Agriculture and Rural Development?
Which committee's recommendation led to the establishment of the National Bank for Agriculture and Rural Development?
What does the Balance of Payment consist of?
What does the Balance of Payment consist of?
What is another name for the Balance of Trade?
What is another name for the Balance of Trade?
What is the primary characteristic of runaway or hyperinflation?
What is the primary characteristic of runaway or hyperinflation?
Which term describes a situation where aggregate demand exceeds aggregate supply?
Which term describes a situation where aggregate demand exceeds aggregate supply?
Who was the first Indian Governor of the Reserve Bank of India?
Who was the first Indian Governor of the Reserve Bank of India?
What is one of the functions of the Reserve Bank of India?
What is one of the functions of the Reserve Bank of India?
What type of inflation is characterized by having high unemployment along with rising prices?
What type of inflation is characterized by having high unemployment along with rising prices?
Which city was the original head office of the Reserve Bank of India before it was moved to Mumbai?
Which city was the original head office of the Reserve Bank of India before it was moved to Mumbai?
What commission recommended the formation of the Reserve Bank of India?
What commission recommended the formation of the Reserve Bank of India?
What describes creeping inflation in terms of its rate?
What describes creeping inflation in terms of its rate?
What does the Consumer Price Index (CPI) measure?
What does the Consumer Price Index (CPI) measure?
Which organization is responsible for compiling CPI for Industrial Workers?
Which organization is responsible for compiling CPI for Industrial Workers?
What is the base year for the Consumer Price Index as mentioned?
What is the base year for the Consumer Price Index as mentioned?
Which of the following is true regarding the types of CPI?
Which of the following is true regarding the types of CPI?
What does the statutory liquidity ratio (SLR) represent?
What does the statutory liquidity ratio (SLR) represent?
What is the function of the Cash Reserve Ratio (CRR)?
What is the function of the Cash Reserve Ratio (CRR)?
Which ministry released the CPI for Industrial Workers with base year 2016?
Which ministry released the CPI for Industrial Workers with base year 2016?
Which of these is a method used for gathering economic data?
Which of these is a method used for gathering economic data?
What is the main purpose of DFIs?
What is the main purpose of DFIs?
Which organization is recognized as India's first Development Financial Institution?
Which organization is recognized as India's first Development Financial Institution?
In which year was ICICI Bank Limited established as a subsidiary of ICICI?
In which year was ICICI Bank Limited established as a subsidiary of ICICI?
What significant change occurred to IDBI in 2003?
What significant change occurred to IDBI in 2003?
Which institution is known as the apex organization for foreign trade investment in India?
Which institution is known as the apex organization for foreign trade investment in India?
When was the Industrial Development Bank of India established?
When was the Industrial Development Bank of India established?
What was the primary role of the Industrial Reconstruction Corporation of India?
What was the primary role of the Industrial Reconstruction Corporation of India?
When was the Small Industries Development Bank of India granted autonomy?
When was the Small Industries Development Bank of India granted autonomy?
Study Notes
Economic Systems
- Mixed economy combines elements of capitalism and communism, allowing private property alongside government intervention for social goals.
- Economic freedom is permitted for the use of capital within a mixed system.
Factors of Production
- Key factors include:
- Land: compensated through rent
- Labor: compensated through wages
- Capital: compensated through interest
- Entrepreneurs: compensated through profit
Circular Flow of Income
- Represents the flow of resources and payments between different sectors of the economy.
Inflation Types
- Creeping inflation: Low inflation rate (up to 3%).
- Walking/Trotting inflation: Moderate inflation rate (3-7%).
- Running/Galloping inflation: High inflation rate (over 10%).
- Runaway/Hyperinflation: Extreme inflation scenario.
Economic Gaps
- Inflationary gap: Occurs when aggregate demand exceeds aggregate supply.
- Deflationary gap: Occurs when aggregate supply exceeds aggregate demand.
Reserve Bank of India (RBI)
- Established in 1935 under the RBI Act, 1934, originally headquartered in Kolkata, now in Mumbai.
- First Governor: Sir Osborne Smith; first Indian Governor: C.D. Deshmukh; current Governor: Shaktikanta Das.
- Key functions include issuing bank notes, serving as banker to the government, managing cash reserves, and controlling credit.
Consumer Price Index (CPI)
- Measures price changes from a retail buyer's perspective, released by the National Statistical Office (NSO).
- Four types of CPI include CPI for Industrial Workers, Agricultural Laborers, Rural Laborers, and a combined measure.
- Base year for CPI is 2012, with recent updates using a base year of 2016.
Financial Ratios
- Statutory Liquidity Ratio (SLR): Required to invest a certain percentage in specified securities.
- Cash Reserve Ratio (CRR): Portion of deposits to be held in a current account.
Development Financial Institutions (DFIs)
- IFCI: First DFI established in 1948, focused on industrial development.
- ICICI: Founded in 1955, established ICICI Bank in 1994; became the first universal bank in 2002.
- IDBI: Created in 1964, transitioned to a universal bank in 2003.
- IRCI: Founded in 1971 for reviving weak industrial units.
- SIDBI: Established in 1989 for small industry development.
Foreign Trade and Agriculture
- EXIM Bank: Established in January 1982; apex institution for foreign trade.
- NABARD: Founded in July 1982 for agriculture and rural development; recommended by the Shivraman Committee.
Housing Finance
- National Housing Bank (NHB): Established in 1988 as the apex housing finance institution.
Balance of Payments
- A systematic record of economic transactions over a specified period, including current and capital account payments.
Current Account
- Balance of Trade/Visible: Refers specifically to the balance of merchandise goods in international trade.
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Description
Explore the characteristics and features of mixed economic systems that blend capitalism and communism. This quiz will help you understand the balance between state control and private ownership in economic frameworks. Test your knowledge on the advantages and disadvantages of these systems.
