Eden IAS

Balance of Payment

Balance of Payment The Balance of Payment (BOP) is a record of all economic and financial transactions between a country and the rest of the world during a specific period (usually a quarter or a year). It’s essentially a way to measure a country’s economic interaction with foreign entities. BOP situations as favourable or unfavourable …

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Exchange Rate

Understanding Exchange Rates An exchange rate tells you how much of one currency you need to buy a certain amount of another currency. Imagine it as a price tag, but instead of the price of a shirt, it’s the price of a dollar in rupees (or rupees in dollars). Here’s an example to illustrate using …

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TAXATION Tax is a compulsory payment collected by the government from citizens, businesses, and other entities in taxation. It is not a voluntary contribution but a mandatory obligation enforced by law. The Constitution of India grants the government the authority to levy taxes on individuals and organizations, but only through laws enacted by the legislature. …

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Fiscal Policy

Fiscal Policy Fiscal policy is a cornerstone of economic management, alongside monetary policy. It refers to the government’s use of spending and taxation to influence the economy. By adjusting these levers, governments aim to achieve various goals, including: Economic Growth: Stimulating economic activity and job creation during downturns. Price Stability: Curbing inflation to prevent excessive price increases. …

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Banking In our economy, commercial banks play a crucial role in the creation of money through Banking.  Role of Commercial Banks: Commercial banks accept deposits from the public. They lend out a part of these funds to borrowers, charging a higher interest rate than what is paid to depositors. The difference is the bank’s profit, …

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MONEY Money is generally defined as a thing that is commonly accepted as a medium of exchange. Examples include the rupee in India and the dollar in the USA. Transition from Barter System: In the past, goods were exchanged directly (barter system). A cobbler might exchange shoes for wheat from a farmer. Barter proved inefficient …

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Inflation Inflation refers to the gradual increase in the prices of goods and services in an economy over time. This means that a unit of your currency, like a rupee, buys less than it did before. Here’s an analogy: Imagine you buy a basket of groceries for ₹100 today. If inflation occurs, next year the …

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Basics of Economics

Basics of Economics In this chapter, we embark on a journey to uncover the basics of economics, providing a foundational understanding of key concepts that underpin the functioning of economies worldwide. We’ll traverse through essential topics such as types of goods, the interplay of consumption and investment, the circular flow of income, and the fundamental …

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Evolutionary of Economics

Introduction of economics Economics is the social science concerned with how individuals, societies, and governments make choices under conditions of scarcity. Scarcity: This is the fundamental principle in economics. It means that our wants and needs are ever-growing, but resources to fulfill them are limited. We can’t have everything we desire, so choices have to …

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