My lectures in Indian History have been integrated in the form of a book on Google Play. Have a Look !!!
Friday, October 17, 2014
Monday, March 18, 2013
Notes in Economics-2
Money Banking and Stock Market
1.
Money is a standard unit of measurement for
economic Magnitudes
2.
It also represent cash balance that a household
has. The reason that cash balances are required serve three purposes:
transaction, precautionary, speculative.
3.
Money is also medium of exchange and a temporary
store of value.
4.
Money is defined in two ways, Narrow Money – M1
( Currency with Public + Demand Deposits with the banks + Other deposits with RBI) and Broad Money (
M1+ Time deposits with banks)
5.
In 2011, M1 in India was 16.3 Trillion Rupees
and Broad Money was 65 Trillian Rupees.
6.
In Barter system, a person could exchange a good
with another system only if the other person required that good. This matching
of mutual demands for a barter exchange is called “double coincidence of wants.
7.
How Banks earn a profit
a.
They earn a profit due to three tendencies of
depositers:
i.
When people deposit money in a bank, they do not
withdraw their money immediately.
ii.
When they withdraw money, they do not withdraw
in full
iii.
People do not withdraw money simultaneously with
others.
b.
Hence bank keeps aside a portion of the initial
cash deposit ( primary deposit) of an account holder and lends the remaining
amount to a firm, on the condition that the firm opens an account in the bank,
in which the money loaned is deposited. This creates an additional deposit- a
secondary deposit with the bank, for which no new cash was actually deposited
in the bank. Once again using the same three assumptions, the bank lends the
remaining amount to yet another firm. Thereby bank creates deposits which are
much larger than the initial deposits. This multiple creation of credit and
deposit allows banks to charge interest on loans and profit.
c.
A bank may turn greedy and keep a low portion as
cash. To prevent this, RBI sets a minimum limits on the cash reserve maintained
by banks. This min. limit is called the Cash Reserve Ratio ( CRR) (Varies from
3 to 20 %).
d.
RBI also stipulates that bank maintain a certain
amount of their deposit liabilities in the form of secure investments-
government securities, gold or cash. This is called SLR ( Varies from 20-39%).
e.
In India deposit holders are ensured up to a max
of Rs. 1 Lakh each in case there is a bank failure.
Adapted from Book: Day to Day Economics- By Prof. Satish Y. Deodhar ( Buy this Book)
Labels:
Economics
Sunday, March 17, 2013
Some Concepts in Economics-1
Taken from Book "Day to Day Economics" by Prof. Satish Y. Deodhar
Why government decides to undertake some economic
activities in her own hand and not leave it to private sector.
There are two features in these activities that prompt
government to undertake these activities in her own hand. One is called Public
Goods and the other are called Natural Monopolies.
There are certain services which are called as the “pure
public goods”. For example National defence is a pure public good. Also it
is non-rival in consumption, as if one is enjoying the benefit of the
defence, he cannot prevent other to enjoy it. It is also nonexclusive,
as every individual is enjoying the benefits of the defence of the nation. A
private firm cannot provide national defence. It is so because they cannot
express how much they value their security, and why would anyone pay for it.
Apart from that there are services where the set up costs
are so high that only one single firm can provide the service at an affordable
cost. For example supply of potable water is such services. However, if a
single private firm is allowed to offer this service, then in absence of
competition, it would turn into an monopolist. Thus government will undertake
such services. The goods and services that fall under this category are called “Natural
Monopolies”. Similarly running of postal service, generation and supply of
electricity and the provision of landline telephone services.
Why Government applies taxes on some activities and give
subsidies on some other activities
There are certain economic activities that affect a
bystander that are not party to that activities. For example late night playing
of loud music disturbs the peace of neighbourhood. This creates what is called
as negative externality. Government wants to discourage this activity.
Similarly government gives subsidy on the electric cars. Why
, as it doesn’t pollute atmosphere and doesn’t use fossil fuel. Government
wants to encourage this activity. This
creates what is called as a positive externality.
Similarly subsidy on primary education, taxing on the
chemical factory are such examples.
·
Size of the budget expenditure in 2011-12 is 11
Trillion Rs. which is 14% of Indian GDP. The receipts are 6.8 trillion Rs.
which is 9.5 % of India’s GDP. This is very small if we compare the receipts
for other countries ( France-39%, UK-34%, Brazil-20% and Russia- 17%)
·
There are three types revenue receipts. First is
the Revenue Deficit, this is the difference between revenue expenditure and
revenue receipts. A deficit of this kind shown that the government has to
borrow money to finance administrative activities which do not lead to the
creation of any assets.
·
The second type of deficit is Fiscal deficit,
which refers to the difference between the government’s total expenditure and
the total non-debt receipts. This indicates that the government has exhausted all
its options for financing its expenditure and the only recourse left for it is
to borrow.
·
Also there is Primary Deficit. This deficit is
defined as the difference between Fiscal Deficit and the interest payment on
debts incurred in earlier years. If one removes the interest payments from the
Fiscal deficit, the primary deficit becomes a smaller number.
·
Looking at the numbers in 2011, Fiscal deficit
was 4.8% of the GDP, Revenue was 3.5% and Primary was 1.7% of the GDP. Also ((Revenue/Fiscal)x100)
is 72.5%.
How high fiscal deficit “Crowd Out” private
investments
This linkage is explained in two ways:
1.
High Fiscal deficità Government will borrow
heavilyà
demand for loans will rise in the marketà
Interest rates go upà
Cost of borrowing for Private firms go up à
Investments projects become economically unviableà
Fall in private investmentsà
Adverse impact on employment generation and income
2.
High Fiscal deficità Government will borrow
heavilyà
Also borrow from International marketà
Foreign fund starts flowingà
Demand for Rupee goes up to exchangeà
Indian exports become expensiveà
Higher imports and Lower Exportsà
Higher trade deficit
·
Direct Taxes in India in 2011 was 56.5% of total
tax revenue and Indirect taxes are 42.2 %
Labels:
Economics
Thursday, December 24, 2009
General Chemistry Notes-4
Calcination is heating strongly in the absence of air. Roasting is heating in the excess of air . Smelting, also called autoreduction, involves reduction of ores, usually oxides at elevated temperatures.
It is difficult to remove the earthy matter called gangue which contaminates an ore. This is done by adding to ore a substance called flux. Flux combines with gangue to form a molten product called slag, which can be easily removed.
An alloy is a mixture of two or more metals and is homogeneous in nature. For example Brass (Copper, Zinc), Bronze ( Copper, Tin) and Gun Metal ( Copper, Tin and Zinc) are examples of alloys.
An amalgam is a solution of metal in mercury. Sodium amalgam is used a reducing agent. Tin amalgam is used for making mirrors. Cadmium and Gold amalgam are used in dentistry.
A few elements like arsenic, Antimony, Boron, Silicon and Germanium behave both like metals and non-metals. These are called metalloids.
The five main causes of air pollution are carbon monoxides, nitrogen oxides, hydrocarbons and sulphur oxides. Transportation sources are responsible for 74% of all carbon monoxide emissions. Use of Catalytic converter in two stages helps in eliminating pollutants from exhaust gases before they are discharged into atmosphere. In the first stage converter, Nitrogen Oxide is converted to Nitrogen and Ammonia in the presence of finally divided Platinum as a catalyst. In the second stage coverter, Hydrocarbons and carbon monoxide are completely oxidized to water and carbon dioxide in the presence of Platinum catalyst. Unleaded gasoline should be used as Platinum can be poisoned by the lead.
Much of Nitrogen Oxides and Sulphur Oxides entering into the atmosphere are converted into Nitric acid and Sulphuric acid. This will generate precipitation known as acid rain.
Urea is used as a fertilizer. DDT ( Dichloro-Di-Phenyl Trichloro Ethane) and BHC ( Benzene HexaChloride) , Melathion and parathion are used as pesticides. Zinc Phosphate and Barium Carbonate are used as rodenticides. Bordeaux Mixture ( copper Sulphate + Lime + Water) are used as fungicides.
Labels:
General Chemistry,
General Studies,
GS,
IAS
Saturday, November 28, 2009
General Biology Notes-4
Muscular System
1. Total Number of muscles in human body are 636.
3. Voluntary muscles are striped and are not independent. They are controlled by Spinal cord.
6. Muscles convert chemical energy ( glucose) into mechanical energy. In humans this conversion efficiency is 25%.
7. Muscle fatigue is the accumulation of lactic acid.
8. Transportation in plants takes place through xylem and phloem tissues.
Blood
18. In adult man normally 5.6 liters of blood is formed.
1. Total Number of muscles in human body are 636.
2. Study of muscles is called Mycology.
3. Voluntary muscles are striped and are not independent. They are controlled by Spinal cord.
4. Involuntary muscles are smooth. They are concerned with the survival of the animal. They are controlled by autonomic nervous system.
5. Cardiac muscles are involuntary muscles but striped.
6. Muscles convert chemical energy ( glucose) into mechanical energy. In humans this conversion efficiency is 25%.
7. Muscle fatigue is the accumulation of lactic acid.
Transport System
9. Loss of water through evaporation from plant body is called Traspiration
Human Circulatory System
11. The aorta is the longest and largest artery in the body.
12. The pulmonary artery is the only artery that contains impure blood and carries it from right Ventricle to the lungs.
13. All veins except pulmonary veins carry impure that is deoxygenated blood.
14. The heart-beat consists of 2 phases systole and diastole.
15. In human adults at rest, the heart beats at the rate of 72 times per minute.
16. Blood pressure is 120mm of mercury in Systole and 80 mm of mercury in diastole.
17. The difference between systolic and diastolic pressure is called pulse pressure.
Blood
18. In adult man normally 5.6 liters of blood is formed.
19. The pH of blood is 7.4,
20. Mixture of RBC, WBC and platelets are there is plazma.
21. RBCs or Erythrocytes are round, biconcave and non-nucleated.
22. There are 4 to 6 m RBC/cubic ml of blood.
23. Life of RBC is 120 days.
24. They are formed in red bone marrow of short bones.
25. These are destroyed in liver Spleen.
26. Contain a protein called Haemoglobin which gives them red color.
27. People living in hilly areas have higher number of RBSc than persons living in plains.
Labels:
general biology,
General Knowledge,
General Studies,
IAS
Saturday, November 21, 2009
Geography-4
Geography
By
Priyank Goyal
The present book is a compilation of the main points of the lectures given by Priyank Goyal in Geography to the students preparing for Indian and State Civil Services examinations.
This is meant to be used for quick revision of the topic just before examination or for daily brushing up of the points.
The details are derived from the notes made during the author's preparation of the Civil Services Examination which helped him in qualifying the prelims part of the examination twice.
This is equally helpful for students who are preparing for State Civil Service, Banking, Customs, Income Tax and other entrance examinations.
Thursday, November 19, 2009
Indian History-4
My lectures in Indian History have been integrated in the form of a book on Google Play. Have a Look !!!
Labels:
Buddhism,
General Studies,
Harsha,
Indian History,
Pataliputra
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