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Answer: stagflation
Stagflation is a portmanteau of stagnation and inflation. It presents a severe dilemma for policymakers because traditional monetary tools used to curb inflation (like raising interest rates) will further depress growth and worsen unemployment.
Answer: 2011-12
The Office of the Economic Adviser (OEA) compiles the WPI, which tracks price changes in the wholesale market for a basket of 697 items. The base year was updated from 2004-05 to 2011-12 to align it with the base year of the Consumer Price Index (CPI) and GDP series.
Answer: base
The base effect is a statistical artifact that occurs when comparing year-on-year inflation data. If prices spiked abnormally in the previous year, the current year's inflation will mathematically look lower even if absolute prices are still rising steadily.
Answer: 41
The 15th Finance Commission, chaired by N.K. Singh, recommended a 41% share for the states. This is 1% lower than the 42% recommended by the 14th FC, with the adjustment made to account for the creation of the new Union Territories of Jammu & Kashmir and Ladakh.
Answer: 279A
Article 279A empowers the President to constitute the GST Council, a federal forum comprising the Union Finance Minister (as Chairperson) and state finance ministers. It ensures cooperative federalism by requiring a 3/4th majority for decisions, balancing central and state interests.
Answer: 112
Article 112 forms the constitutional basis of the Union Budget, requiring the government to present a detailed statement of its estimated receipts and expenditures for the upcoming financial year. It distinguishes between revenue and capital accounts to ensure fiscal transparency.
Answer: capital
The capital market facilitates the flow of long-term savings into productive investments, comprising both the primary market (new issues) and the secondary market (stock exchanges). It is essential for funding corporate expansion and infrastructure development.
Answer: 1992
Although SEBI was initially set up as a non-statutory body in 1988, it lacked enforcement teeth. It was granted statutory status and comprehensive regulatory powers over the securities market via the SEBI Act, which was passed by Parliament in 1992.
Answer: banks
Unlike Commercial Papers issued by corporates, Certificates of Deposit are negotiable term deposits issued specifically by commercial banks and select financial institutions. They are issued at a discount to face value and are subject to the RBI's monetary policy directives.
Answer: PCA (or Prompt Corrective Action)
The Prompt Corrective Action (PCA) framework is triggered when banks breach certain regulatory thresholds like high NPAs, low capital adequacy, or negative return on assets. It imposes mandatory and non-mandatory restrictions on the bank to restore its financial health.
Answer: below
Introduced to manage excess liquidity, the SDF allows banks to park surplus funds with the RBI without providing collateral. It is usually set 25 basis points below the Repo Rate, establishing the lower bound of the monetary policy operating corridor.
Answer: Engel's
Engel's Law is an observation in economics stating that the proportion of income spent on food is inversely related to income levels. This implies that lower-income families spend a much larger fraction of their earnings on basic sustenance compared to wealthier families.
Answer: OPHI
The Oxford Poverty and Human Development Initiative (OPHI) collaborates with the UNDP to release the MPI. Unlike traditional income-based measures, the MPI evaluates deprivation across three dimensions: health, education, and standard of living.
Answer: frictional
Frictional unemployment is a natural and inevitable part of any dynamic labor market. It represents the time lag between workers leaving one job and finding another that better matches their skills and salary expectations.
Answer: 5 lakh
AB-PMJAY is the world's largest fully government-funded health assurance scheme. It provides a cover of Rs. 5 lakh per family per year on a family floater basis, targeting the bottom 40% of the Indian population identified through the SECC 2011 database.
Answer: 1965
FCI was set up in 1965 with the primary objective of safeguarding food security and ensuring price stability in the country. It is responsible for the procurement, maintenance, and distribution of food grains across India through the Public Distribution System (PDS).
Answer: quantitative
Imposes a strict physical limit on the quantity imported.
Answer: FEMA
Foreign Exchange Management Act, passed in 1999.
Answer: IDA
International Development Association.
Answer: working
Refers to the 15-59 years working-age population.