Bihar Board 12th Business Economics Important Questions Short Answer Type Part 2
Bihar Board 12th Business Economics Important Questions Short Answer Type Part 2
Question 1.
How are the total revenue of a firm, market price and the quantity sold by the firm related to each other?
Answer:
Total revenue of a firm is product of market price and quantity sold.
Thus, Total Revenue = Market Price × Quantity sold by the Firm.
Question 2.
Why does a surplus emerge in case of a support price?
Answer:
In case of support price, surplus emerge because of fall in market demand.
Question 3.
What is the relationship between the control price and the equilibrium price?
Answer:
Control price is fixed by the government below the equilibrium price of the commodity.
Question 4.
Define price control or ceiling price.
Answer:
Ceiling price is the maximum price fixed by the govt, for a scarce commodity, so that goods came within the reach of poor consumers. This price is always less than the equilibrium price.
Question 5.
What is a commercial bank?
Answer:
Commercial Bank is an institution which performs the functions of accepting deposits, granting loans and making investments with the aim of earning profits.
Question 6.
Define Central Banks.
Answer:
A central bank is an apex body that controls, operates, regulates and directs the entire banking and monetary structure of the country.
Question 7.
What is bank rate?
Answer:
Bank rate refers to the rate at which the central bank lends money to commercial banks as the lender of last resort.
Question 8.
Write two demerits of money.
Answer:
- Money increase corruption.
- Money gives rise to inequality of income.
Question 9.
Give the meaning of deflationary gap.
Answer:
Its shows the gap by which actual AD falls short of the AD required to establish full employment equilibrium.
Question 10.
Give the meaning of full employment.
Answer:
Full employment refers to a situation in which all those people who are willing and able to work at the existing wage rate get work without any undue difficulty.
Question 11.
Give the meaning of involuntary unemployment.
Answer:
Involuntary unemployment occurs when those who are able and willing to work at the prevailing wage rate do not get work.
Question 12.
Define government budget.
Answer:
Government budget is an annual statement. Showing item wise estimates of receipts and expenditures during a fiscal year.
Question 13.
Define indirect tax.
Answer:
When the liability of pay a tax and the burden of that tax can be on different persons, it is called an indirect tax.
Question 14.
Define surplus budget.
Answer:
Surplus Budget is that budget where estimated revenues are more than estimated expenditure.
Question 15.
Explain Deficit Budget.
Answer:
Deficit Budget is that Budget where estimated revenue are less than estimated expenditure.
Question 16.
Define a Direct Tax.
Answer:
When the liability to pay a tax and the burden of that take fall on the same person, it is called direct tax.
Question 17.
What is parity value?
Answer:
Parity value is the relative prices of goods and services between countries that derive the exchange rates.
Question 18.
Define spot exchange rate.
Answer:
The spot rate of exchange refers to the rate, at which foreign exchange is make available on the spot.
Question 19.
What is meant by multiple exchange rate?
Answer:
Multiplier exchange rate is the situation, when a country follows more than one rate, of exchange for its currency.
Question 20.
What is a fixed exchange rate?
Answer:
Fixed Exchange rate refers to the system under which the rate of exchange of a currency is fixed in terms of gold or another currency.
Question 21.
Give the meaning of managed floating exchange rate system.
Answer:
It refers to a system in which foreign exchange rate is determined by market forces and the central bank is a key participant to stabilize the currency in case of extreme appreciation or depreciation.
Question 22.
What is meant by foreign exchange rate?
Answer:
Foregin exchange rate is the price of one unit of foreign currency in terms of the domestic currency.
Question 23.
Define foreign exchange.
Answer:
Foreign exchange refers to all currencies other than the domestic currency of a given country.
Question 24.
What is meant by balance of payment on capital account?
Answer:
Balance of payments on capital account includes all capital transactions including borrowing and lending of capital, interest payment etc.
Question 25.
What is meant by balance of trade?
Answer:
Balance of trade is the difference between value of exports of goods and imports of goods.
Question 26.
Name two ‘Invisible’ of the balance of payment account.
Answer:
Invisible items includes all type of services. These are invisible obviously become service (like shipping) are not made of matter or material.
Question 27.
When will balance of trade show a deficit?
Answer:
Balance of trade shows a deficit while imports of visible items and exports of visible items.
Question 28.
When will balance of trade show a surplus?
Answer:
Balance of trade shows a surplus when exports are greater than imports items.
Surplus balance of trade = Export > Imports.
Question 29.
Name the items included in balance of trade account?
Answer:
- Transport and Insurance.
- Donation and Gifts.
Question 30.
What do you mean by currency depreciation?
Answer:
Currency depreciation refers to decrease in the value of domestic currency in terms of foreign currency.
Question 31.
What is Foreign Exchange Rate?
Answer:
Foreign exchange rate refers to the rate at which the currency of one country is exchange with the currency of another country.
Question 32.
What do you mean by monopolistic competition?
Answer:
Monopolistic competition is a form of market situation in which a large number of firms produce and sell differentiated products having close substitutes.
Question 33.
Define Marginal Utility.
Answer:
It is defined as the utility from the additional units consumed.
MU = TUnn – TUn–L
Question 34.
What is Market Demand?
Answer:
Demand for a good by all the individuals an a particular price, in a particular market at a particular point of time.
Question 35.
Who does create the goodwill in economy?
Answer:
Central Bank of India (in Indian Reserve Bank of India) creates the goodwill in economy.
Question 36.
What is Bank Rate?
Answer:
Bank rate refers to the rate at which the central Bank lends money to commercial bank as the lender of last resort.
Question 37.
Why is entertainment tax an indirect tax?
Answer:
Entertainment tax is an indirect tax because is burden can be shifted.
Question 38.
Give two examples of Macro Economics?
Answer:
- National Income
- Aggregate Expenditure.
Question 39.
What is circular flow of income?
Answer:
Circular flow of income refers of money and goods between the major sectors of economy.
Question 40.
Define price elasticity of demand.
Answer:
The price elasticity of demand means the effect of a percentage changes in price on the quantity demanded.
Question 41.
What is direct tax?
Answer:
Direct taxes are those which are imposed on property and income of individuals and companies and directly paid by them to the government.
Question 42.
What do you meant by oligopoly?
Answer:
It is a form of market in which there are few sellers of the commodity.
Question 43.
Define Black Market.
Answer:
Black marketing is a direct consequence of price control.
Question 44.
What is surplus Budget?
Answer:
Surplus Budget is that budget where estimated revenues are more than estimated expenditure.
Question 45.
Define Statutory Liquidity Ratio?
Answer:
It refers to the minimum percentage of time and demand deposits, required to be kept by commercial banks with themselves.
Question 46.
What is meant by balance Of trade?
Answer:
Balance of trade is the difference between the value of exports of goods and imports of goods.
Question 47.
What is the relationship between the control price and the equilibrium price?
Answer:
Control price is fixed by the government below the equilibrium price of the commodity.