Economics : 2014 : CBSE : [All India] : Set – I

As the government has started promoting foreign capital, it will add up to the existing capital, this will result in increasing the base of available resources, In such a case, the production possibilities frontier will expand and thereby will shift parallel to the right. The economic value is reflected in terms of increased output and resources.

An Indifference curve is the curve that represents all those combinations of two goods which give equal level of satisfaction to the consumer.

Marginal product is the additional output produced when one more or additional unit of variable factor is employed.

Algebraically,

Where

∆TP : Change in total product

∆L : Change in labour input

MP can also be written as:

Market supply refers to the quantity of a commodity which all producers are willing to supply at given price and time.

Imperfect oligopoly is the form of oligopoly where the firms in the oligopoly market produce differentiated products. For example, automobile industry is an example of imperfect oligopoly. Imperfect oligopoly is characterized by lack of competition and in such a market product differentiation is a source of market power.

An example of an impure or imperfect oligopoly is the automobile industry, which has only a few producers who produce differentiated products.

Time deposits are the deposits which are for fixed time period. They mature only after a certain period.

Inflationary gap is the situation when aggregate demand exceeds aggregate supply at full employment level.

Full employment is the situation where all those who are willing to work at prevailing wage rate are fully employed. In such a situation all the resources are fully employed, output is at its full employment level and there is no reason for the economy to fluctuate from the point.

Fiscal deficit is the sum of borrowings and other liabilities of government. It is also ascertained through difference between the budget expenditure and budget receipts of the government, except the borrowings and liabilities.

Exchange rate or foreign exchange rate is the value of domestic currency in terms of foreign currency. It is also regarded as the rate at which one currency will be exchanged for another.