General Economic Terms used in Indian Economy General Knowledge Preparation for UPSC SSC and All Competitive exams in India
Assets Property of any kind.
Balance of Trade (BoT) The difference between the exports and imports of two countries in trade with each other is called Balance of Trade.
Balance Sheet It is a statement of accounts, generally of a business concern, prepared at the end of a year.
Banker’s Cheque A cheque by one bank to another.
Bank Rate It is the rate of interest charged by the Reserve Bank of India for lending money to commercial banks.
Barter To trade by exchanging one commo- dity for another.
Bearer This term on cheques and bills denotes that any person holding the same, has the same right in respect of it, as the person who issued it.
Black Money It means unaccounted money, concealed income and undisclosed wealth. The money which thus remains un- accounted for, is called the black money.
Bond A legal agreement to pay a certain sum of money (called principal) at some future date and carrying a fixed rate of interest.
Budget An estimate of expected revenues and expenditure for a given period, usually a year, item by item.
Budget Deficit When the expenditure of the government exceeds the revenue, the balance between the two is the budget deficit.
Bulls Speculators in the stock markets who buy goods, in some cases without money to pay with, anticipating that prices will go up.
Buyer’s Market An area in which the supply of certain goods exceeds the demands so that purchasers can drive hard bargains.
Commercial Banks Financial institutions that create credit accept deposits, give loans and perform other financial functions.
Call Money Loan made for a very short period. It carries a low rate of interest.
Deflation It is a state in monetary market when money in circulation has decreased.
Depreciation Reduction in the value of fixed assets due to wear and tear.
Devaluation Official reduction in the foreign value of domestic currency. It is done to encourage the country’s exports and discourage imports.
Dividend Earning of stock paid to shareholders.
Dumping Sale of a commodity at different prices in different markets, lower price being charged in a market where demand is relatively elastic.
Exchange Rate The rate at which Central Banks will exchange one country’s currency for another.
Excise Duty Tax Imposed on the manufacture, sale and consumption of various commodities, such as taxes on textiles, cloth, liquor, etc.
Fiscal Policy Government’s expenditure, tax policy and borrowing.
Gross Domestic Product (GDP) A measure of the total flow of goods and services produced by the economy over a specific time period, normally a year.
Repo Rate The rate at which banks borrow from RBI. It injects liquidity into the market.
Inflation A sustained and appreciable increase in the price level over a considerable period of time.
Monopoly Single seller selling single product.
Monopolistic Competition Existence of too many sellers selling differentiated products.
Bilateral Monopoly Existence of single buyer and single seller.
Monopsony Single buyer buying product being unique.
Oligopoly Existence of few sellers and few products. Price war is a common feature.
Reverse Repo Rate The rate at which RBI borrows from banks for a short-term. It withdraws liquidity into the market.