Economics : 2010 : CBSE : [ Delhi ] : Set I

In perfect competition, products are homogenous with no close substitutes, but in monopolistic competition, products are differentiated with the availability of close substitutes in the market.

Demand for water is inelastic, because price does not affect its demand. It is a basic necessity.

In oligopoly market, the firms are interdependent. Decisions of one firm influences the decisions of other firms.

In perfectly competitive market, demand curve of a firm is perfectly elastic.

Ex-ante saving is the saving we plan to save in an economy in a particular year.

Primary deficit is is defined as fiscal deficit minus interest payments on previous borrowings. It is calculated as:

Primary deficit = Fiscal deficit - interest payments

The excess of aggregate supply over the aggregate demand at full level of employment is known as deflationary gap.

Two sources of supply of foreign exchange are:

i)             Export of goods & services to foreign countries.

ii)           Investment by foreign countries in the domestic market.

A set of indifference curves that indicate different levels of satisfaction is called indifference map.

Ex-ante investment is the planned or intended amount of investment at different levels of income.