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Answer: PT (or PY)
Irving Fisher's Equation of Exchange (MV = PT) forms the basis of the Quantity Theory of Money. M is the money supply, V is the velocity, P is the price level, and T is the volume of transactions (or Y for real output). It implies that if velocity (V) and output (T) are stable in the short run, any rapid increase in money supply (M) by the central bank will directly translate into a proportional rise in inflation (P).
Answer: True
The NFSA marked a paradigm shift from a welfare-based approach to a rights-based approach to food security. It mandates the government to provide 5 kg of food grains per person per month at highly subsidized prices (Rs. 1-3 per kg) through the Targeted Public Distribution System (TPDS). It also includes specific nutritional entitlements for pregnant women, lactating mothers, and children.
Answer: Swiss Franc
The SDR basket is reviewed every five years to ensure it represents the most widely used currencies in global trade and finance. The current basket consists of five currencies: the US Dollar, the Euro, the Chinese Renminbi (added in 2016), the Japanese Yen, and the British Pound Sterling. The Swiss Franc, while a major reserve currency, is not currently included in the SDR basket.
Answer: low (or zero / no)
Multinational corporations often use complex accounting loopholes to artificially shift their taxable profits away from the high-tax countries where the actual economic value is created, and into tax havens where they have little to no physical presence. The BEPS framework introduces 15 actions to close these loopholes, ensure transfer pricing transparency, and mandate that profits are taxed where real economic activities occur.
Answer: True
Natural monopolies arise in industries with massive fixed infrastructure costs and very low marginal costs, such as municipal water supply, electricity transmission grids, or railway tracks. Duplicating these networks for multiple competitors would be wildly inefficient and socially wasteful. Consequently, these markets naturally consolidate into a single provider, which is why they are typically state-owned or heavily regulated to prevent price gouging.
Answer: The national savings rate and the capital-output ratio
The Harrod-Domar model, highly influential in early development economics, posits that investment is the key driver of growth. It states that the growth rate equals the savings rate divided by the capital-output ratio (ICOR). Therefore, to grow faster, a developing nation must either increase its domestic savings to fund more investment or improve its capital efficiency (lower the ICOR) through better infrastructure and technology.
Answer: street vendors
Street vendors operate in the informal cash economy and lack the credit history or collateral required by formal banks. PM SVANidhi (Street Vendor's AtmaNirbhar Nidhi) provided them with quick, small-ticket loans to restart their businesses, purchase inventory, and sustain their livelihoods without falling into the debt trap of local, high-interest informal moneylenders.
Answer: True
These two ratios were introduced to prevent the liquidity crises that caused bank failures in 2008. The LCR is a short-term survival metric, ensuring banks have enough cash or easily sellable government bonds to withstand a sudden 30-day run on deposits. The NSFR is a long-term structural metric, forcing banks to fund long-term illiquid assets (like 20-year mortgages) with stable, long-term liabilities (like equity or long-term bonds), rather than relying on volatile short-term wholesale borrowing.
Answer: To offset the unfair price advantage gained by foreign imports that are heavily subsidized by their home government
When a foreign government provides massive subsidies to its domestic producers, those producers can export goods at artificially low prices, undercutting and harming the importing country's local industries. Under WTO rules, the importing nation can investigate and impose a Countervailing Duty exactly equal to the estimated subsidy margin, thereby neutralizing the unfair advantage and restoring a level playing field.
Answer: bracket creep (or fiscal drag)
Bracket creep is a hidden consequence of progressive taxation in an inflationary environment. If tax brackets are not indexed to inflation, nominal wage increases that merely match the inflation rate will push workers into higher marginal tax tiers. This stealthily increases the government's tax revenue while reducing the taxpayer's real disposable income, acting as an automatic, unlegislated tax hike.
Answer: False
The description provided actually defines the *Environmental* Kuznets Curve (EKC). The original, standard Kuznets Curve (proposed by Simon Kuznets in 1955) hypothesizes an inverted-U shaped relationship between per capita income and *income inequality*. It suggests that as an economy develops from agrarian to industrial, inequality first increases, but as it matures and welfare states emerge, inequality eventually decreases.
Answer: Enable secure, consent-based sharing of a user's financial data across different regulated financial institutions
The AA system revolutionizes credit access by eliminating the need for physical paperwork. It acts as a digital data blind-pipe that allows a customer to securely share their bank statements, tax returns, and investment records from one institution (the Financial Information Provider) to another (the Financial Information User, like a lender) via explicit digital consent, enabling instant, cash-flow-based loan approvals for MSMEs and individuals.
Answer: India Debt Resolution Company Ltd (IDRCL)
This twin-entity structure separates the aggregation of bad assets from their operational resolution. NARCL, which is majority-owned by public sector banks, purchases the stressed assets from banks by issuing Security Receipts. The IDRCL, which is majority-owned by private sector professionals, is then hired to manage these assets, formulate resolution plans, and execute the actual recovery process to maximize the salvage value.
Answer: False
The Tragedy of the Commons specifically applies to 'Common-Pool Resources,' which are *non-excludable* (it is difficult to stop people from using them) but *rivalrous* (one person's use diminishes another's ability to use it). Examples include open-ocean fisheries, public grazing lands, and clean air. Because individuals act in their own self-interest to extract as much as possible before others do, the shared resource is inevitably depleted or destroyed.
Answer: All firms sell perfectly homogeneous (identical) products and are price takers
In perfect competition, the market is characterized by a vast number of buyers and sellers trading an identical product (like wheat or copper). Because the products are indistinguishable and there are no barriers to entry, no single firm has any market power to influence the price. They are forced to accept the equilibrium price determined by the aggregate forces of market supply and demand.
Answer: substitutes
Cross elasticity measures how the demand for Good A responds to a price change in Good B. If the price of Coca-Cola rises, consumers will switch to Pepsi, causing Pepsi's demand to spike. This positive relationship defines substitute goods. Conversely, complementary goods (like cars and petrol) exhibit a negative cross elasticity, as a price hike in one reduces the demand for both.
Answer: True
As a consumer moves down an indifference curve, they possess an abundance of Good X and very little of Good Y. Consequently, Good Y becomes relatively more valuable to them, and they are less willing to sacrifice it for yet another unit of Good X. This diminishing willingness to trade (MRS) mathematically forces the curve to bow inward (convex) toward the origin.
Answer: The marginal utility (additional satisfaction) derived from each successive unit declines
This law explains the downward slope of the demand curve. The first slice of pizza provides immense satisfaction (high marginal utility). The second slice is enjoyable but less so. By the fifth slice, the marginal utility might approach zero or even become negative (discomfort). Because consumers derive less satisfaction from additional units, they will only buy more if the price is lowered.
Answer: Production
The PPF graphically demonstrates the limits of an economy's productive capacity. Points on the curve represent maximum efficiency (full employment of resources), points inside the curve represent inefficiency or unemployment, and points outside the curve are currently unattainable without technological advancement or resource expansion. The bowed-out shape of the PPF reflects the law of increasing opportunity costs.
Answer: False
Rational economic theory dictates that sunk costs are entirely irrelevant to future decisions because they cannot be changed regardless of what action is taken next. Decisions should be based solely on marginal costs and marginal benefits going forward. The 'Sunk Cost Fallacy' occurs when individuals or firms irrationally continue a failing project simply because they have already invested heavily in it.