(i) Expansionary policy is cheap money policy when a monetary authority uses its tools to stimulate the economy.
(ii) An expansionary policy maintains short-term interest rates at a lower than usual rate or increases the total supply of money in the economy more rapidly than usual.

Banks issue traveler’s cheques to individuals for traveling outside the country. Traveler’s cheques are the safe and easy way to protect money while traveling.

Under the supplementary financing facility, the IMF makes temporary arrangements to provide supplementary financial assistance to member countries facing payments problems relating to their present quota sizes.

(i) J.P. Narayan (1950) advocated, “Sarvodaya Plan” which was inspired by Gandhian Plan and with the idea of Vinoba Bhave.
(ii) It gave importance not only for agriculture, but encouraged small and cottage industries in the plan.

(i) Demand for money means the demand to hold money, that is, to keep one’s resources in liquid form instead of in some form of investment.
(ii) It means the desire to hold money in liquid cash as against spending the money.

Money is the most liquid form of capital. In other words, capital in the form of money can be put to any use.

The amount that households, firms, the governments and the foreign purchasers would like to spend on domestic output.

David Ricardo, J.S.Mill, J.B.Say and A.C.Pigou. List some limitations of GDP as a measurement of social welfare.

1. Quantitative data are those that can be quantified in definite units of measurement. These refer to characteristics whose successive measurements yield quantifiable observations. Eg. Age, income, number of firms etc.
2. Qualitative data refer to qualitative characteristics of a subject or an object. A characteristic is qualitative in nature when its observations are defined and noted in terms of the presence or absence of a certain attribute in discrete numbers. These data are further classified as nominal and rank data. Eg. Gender, Community, honesty.

The main features of GDP_MP are:
1. It includes only final goods and services produced in the domestic territory of a country;
2. It includes consumption of fixed capital (depreciation);
3. It is estimated at the prevailing prices.

BASIS FOR COMPARISON	NOMINAL GDP	REAL GDP
Meaning	The aggregate market value of the economic output produced in a year within the boundaries of the country is known as Nominal GDP.	Real GDP refers to the value of economic output produced in a given period, adjusted according to the changes in the general price level.
What is it?	GDP without the effect of inflation.	Inflation adjusted GDP
Expressed in	Current year prices	Base year prices or constant prices
Value	Higher	Generally, lower

(i) Real GDP could be increased even though there is no more output produced if output that is currently produced in the home or in the underground economy is included.
(ii) If activities that are currently illegal are declared legal, real GDP could increase

When the total value of commodity exports of a country exceeds the total value of commodity imports of that country, it is said that the country has a ‘favourable’ balance of trade.

i. Increase in consumer demand
ii. Films get close to fill capacity
iii. Films invest to meet rising demand.

(i) Dynamic multiplier is also known as ‘sequence multiplier’.
(ii) In real life, income level does not increase instantly with investment.
(iii) In fact, there is a time lag between increase in income and consumption expenditure.

Y = National Income
C = Consumption Expenditure
I = Investment Expenditure
G = Government Expenditure
(X – M) = Net Exports

(i) Flow variables are measured over a period of time.
(ii) National Income, imports, exports, consumption, production, investment etc are examples of flow variables

The word 'budget' is said to have its origin from the French word "Bougett" which refers to 'a small leather bag'. The budget is an annual financial statement which shows the estimated income and expenditure of the Government for the forthcoming financial year.

(i) Financial Sector (Banking and Non Banking)
(ii) Insurance
(iii) Telecommunication
(iv) Hospitality and Tourism
(v) Pharmaceuticals
(vi) Software and Information Technology

The concept "development" refers to the structural changes towards betterment.

(i) Ceteris paribus (constant extraneous variables).
(ii) Existence of Normal Conditions.
(iii) Existence of a Laissez-faire Capitalist Economy.

(i) Price Mechanism is the heart of any capitalistic economy.
(ii) All the economic activities are regulated through price mechanism.

(i) Central planning authority is the controlling authority in a socialistic economy.
(ii) All the decisions are under taken by the central planning authority.
(iii) It means all factors of production are nationalized and managed by public authority.

Econometrics may be defined as the social science in which the tools of economic theory, mathematics and statistical inference are applied to the analysis of economic phenomena.

(i) Based on characteristics there are quantitative and qualitative data.
(ii) Qualitative data is classified as nominal data and rank data.
(iii) Based on the data sources there are primary data and secondary data.

1. Gross national product
2. GNP per capita
3. Welfare
4. Social indicators.

(i) An ecosystem includes all living things (plants, animals and organisms) in a given area, interacting with each other and also with their non-living environments (weather, earth, sun, soil, climate, atmosphere).
(ii) It is the foundation of the Biosphere and determine the health of the earth.

(i) It involves fresh evaluation of expenditure in the Government budget assuming it as a new item.
(ii) A review is made to justify the project based on the socio-economic objectives and priorities of the society.
(iii) Government of India presented Zero Base Budgeting in 1987-88.

(i) Availability of variety of goods for consumption.
(ii) Generation of more employment.
(iii) Industrialization of backward nations.
(iv) Division of labour and specialisation.

(i) It means multiplication of loans and advances.
(ii) The power of Commercial banks to create deposits through expanding their loans and advances is known as Credit Creation.

Stagflation is a combination of stagnant economic growth, high unemployment and high inflation.

APS is the ratio of saving to income
APS = \(\frac{S}{Y}\)

(i) Effective demand is the money spent on consumption of goods and services and on investment.
(ii) Employment and output depends on the level of effective demand
(iii) When effective demand increases, employment will increase.
(iv) Effective demand is determined by aggregate supply and aggregate demand.

(i) It arises due to imbalance between supply of labour and demand for labour.
(ii) It is because of immobility of labour, lack of necessary skills, breakdown of machinery, shortage of raw materials.
(iii) The persons who lose jobs and in search of jobs are also included.

(i) NNP is obtained deducting the value of depreciation from GNP.
(ii) NNP = GNP - depreciation allowance.

(i) Inflation refers to steady increase in general price level.
(ii) The General price level is based on Wholesale Price Index, Consumer Price Index.

i) To promote international monetary cooperation among the member nations.
ii) To facilitate faster and balanced growth of international trade.
iii) To ensure exchange rate stability by curbing competitive exchange depreciations.
iv) To eliminate or reduce exchange controls imposed by member nations.

(i) On January 26, 1950, the Constitution came into force.
(ii) In logical order, the Planning Commission was created on March 15, 1950.
(iii) The plan era began on April 1, 1951, with the launch of the first five-year plan (1951-56).
(iv) Planning Commission was set up to formulate Five Year Plan in India by Jawaharlal Nehru.
(v) He was the first Chairman of Planning Commission, Government of India.

S.No	Fictional unemployment	Structural unemployment
1	Frictional unemployment arises due to imbalance between supply of labour and demand for labour	Structural unemployment is due to drastic change in the structure of the society
2.	This is because of immobility of labour, lack of necessary skills, break down of machinery, shortage of raw materials etc.	Lack of demand for the product or shift in demand to other products cause this type of unemployment
3.	The persons who lose jobs and in search of jobs are also included under frictional unemployment	This kind of unemployment results from massive and deep rooted changes in economic structure

1. Price Adjustments
As a result of foreign exchange outflow from a deficit country to a surplus country, there will be a fall in the money supply in the deficit country and increase in the money supply in the surplus country.
2. Interest Rate Adjustments
The contraction or expansion of money supply resulting from the BoP deficit or surplus leads to a rise or fall in the interest rates. A rise in interest rate in the deficit country will encourage investors to withdraw their funds from abroad and invest in their home country.
3. Income Adjustments
A nation with payments surplus will experience rising income which will increase imports and thereafter equilibrium is restored in Balance of Payments.
4. Capital Flows
Changes in the interest rate consequent to the BoP disequilibrium will encourage capital flows from the surplus nations to deficit nations helping restoration of the BoP equilibrium.

1. Transfer payments are not to be included in estimation of national income as these payments are not received for any services provided in the current year such as pension, social insurance etc.
2. The receipts from the sale of second hand goods should not be treated as part of national income as they do not create new flow of goods or services in the current year.
3. Windfall gains such as lotteries are also not to be included as they do not represent receipts from any current productive activity.
4. Corporate profit tax should not be separately included as it has been already included as a part of company profit.

Income	Consumption	Savings
120	120	0
180	170	10
240	220	20

Proposition (1):
Income increases by Rs. 60 crores and the increase in consumption is by Rs. 50 crores.
Proposition (2):
The increased income of Rs. 60 crores in each case is divided in some proportion between consumption and saving respectively. (i.e., Rs. 50 crores and Rs. 10 crores).
Proposition (3):
As income increases consumption as well as saving increase. Neither consumption nor saving has fallen.

(i) Surface water pollution:
Hazardous substances coming into contact with this surface water, dissolving or mixing. Physically with the water can be called surface water pollution.
(ii) Ground water pollution:
Ground water contamination occurs when man-made products such as gasoline, oil and chemical get into the ground water.
(iii) Microbiological pollution:
(1) Natural pollution caused by micro - organism like viruses and bacteria.
(2) This natural pollution causes both aquatic and human illness.

(i) When a loan is taken from abroad or from an international organisation it is called external public debt.
(ii) The main sources of external public debt are IMP, World Bank, IDA and ADB etc.
(iii) Loan from other countries and the governments.

(I) Primary Function:
(1) Accepting Deposits
(2) Demand Deposits
(3) Time Deposits
(4) Advancing Loans
(II) Secondary Functions:
(1) Agency Functions
(2) Collecting Cheques
(3) Collecting Income
(4) Paying Expenses
(5) General Utility Functions
(6) Providing Locker Facilities
(7) Issuing Traveler's Cheques
(8) Dealing in Foreign Exchange
(9) Transferring Funds
(10) Letter of Credit.

M₁ = Currency, Coins and demand deposits.
M₂ = M₁ + Saving deposits with post office savings banks.
M₃ M₂ + Time deposits of all commercial and cooperative banks.
M₄ = M₃ + Total deposits with post offices.
M₁ and M₂ are known as narrow money.
M₃ and M₄ are known as broad money.
The graduations are in decreasing order of liquidity.

(i) Besides verification it is used for the prediction of one value, in relation to the other given value.
(ii) Regression coefficient is an absolute figure. If we know the value of the independent variable, we can find the value of the dependent variable.
(iii) It has wider application, as it studies linear and nonlinear relationship between the variables.
(iv) It is widely used for further mathematical treatment.

Human Resources:
(i) Human power increases productivity and thus national income.
(ii) A healthy, educated and skilled labour force is the most important productive asset.
Technical Know-how:
(i) As the scientific and technological knowledge advances, more sophisticated techniques steadily raise the productivity in all sectors.
Political Freedom:
(i) Development is linked with political freedom.
(ii) Dadabhai Naoroji said the drain of wealth from India under British rule is the major cause of increase in poverty in India.
Social Organization:
(i) Mass participation in development programs is a pre condition for accelerating development
(ii) When some groups enjoy the benefits of growth and majority of the poor do not participate in the process of development it is called crony capitalism.
Corruption free administration:
(i) Tax evasion breeds corruption and prevents progress.
Desire for development:
(i) If the level of consciousness is low and the people have accepted poverty as their fate, there is little scope for development.
Moral, ethical and social values:
(i) If people are dishonest, market cannot function.
Casino Capitalism:
(i) If people spend larger propotion of their income on entertainment liquor, illegal activities, production suffers. This is called casino capitalism.
Patrimonial Capitalism:
(i) If assets are inherited by children, they would not work hard because they do not know the value of the assets. So, production is low.

(i) The law of conservation of matter and energy, emphasizes that in any production system "what goes in must come out".
(ii) All resources extracted from the environment eventually become unwanted wastes and pollutants.
(iii) Production of output by firms from inputs results in discharge of solid, liquid and gaseous wastes.
(iv) Waste results from consumption activities by households.
(v) Thus material and energy drawn from environment are used for production and consumption and returned back to the environment as wastes.
(vi) \(\mathrm{R}=\mathrm{W}_{1}+\mathrm{W}_{2}\)
(vii) Input = Output

(i) A tax is a compulsory payment made to the government. Refusal to pay the tax is punishable.
(ii) There is no quid pro quo between a taxpayer and public authorities.
(iii) Tax payer cannot claim any specific benefit against the payment of a tax.
(iv) Every tax involves some sacrifice on the part of the tax payer.
(v)  A tax is not levied as a fine or penalty for breaking law.

1. Basic Credit Facility
2. Extended Fund Facility
3. Compensatory Financing Facility
4. Buffer Stock Facility
5. Supplementary Financing Facility
6. Structural Adjustment Facility

(i) It is a trade restriction that sets a limit on the quantity of a good that can be imported into a country in a given period of time.
(ii) Quotas are used to benefit the producers of good in that economy.

Quantitative methods
1) Bank Rate Policy:
(i) It is the rate at which the Central Bank rediscount the first class.
(ii) The bank advances loans on approved securities to its member banks.
(iii) If the Central Bank wants to control credit, it will raise the bank rate.
(iv) So deposit rate and other lending rates rise, borrowing is discouraged.
2) Open Marker Operation:
(i) The Central Bank purchases and sells Government securities in the money market.
(ii) When banks or public buy these securities they have to pay to the Central Bank.
3) Variable Cash Reserves Ratio:
(i) The Central Bank controls credit by changing the Cash Reserve Ratio.
(ii) If Commercial Banks have excessive cash reserves and create too much credit, the central bank will raise the CPR.
(iii) If CRR is high, commercial bank's capacity to create credit will be less.
Qualitative Methods
1) Rationing of Credit:
(i) It controls and regulates the purposes for which credit is granted by commercial banks.
(ii) It is of 2 types - variable portfolio ceiling and variable capital asset ratio
2) Direct Action:
(i) Direct action is taken against erring banks
3) Moral Suasion:
(i) Central Bank gives advice, then requests and persuades the Commercial Banks to co-operate with the Central Bank in implementing its credit policies.
4) Publicity:
(i) A policy can be effectively successful only when an effective public opinion is created in its favour.
5) Regulation of Consumer's Credit:
(i) The down payment is raised and the number of installments reduced for credit sale.
6) Changes in the Marginal Requirements on Security Loans:
(i) The margin requirements can be increased to prevent excessive use of credit for stock exchange speculation

Currency Deposit Ratio (CDR):
It is the ratio of money held by the public in currency to that they hold in bank deposits.
Reserve deposit Ratio (RDR):
Reserve Money consists of vault cash in banks and deposits of commercial banks with RBI.
Cash Reserve Ratio (CRR):
It is the fraction of deposits the banks must keep with RBI.
Statutory Liquidity Ratio (SLR):
It is the fraction of the total demand and time deposits the commercial bank must keep with itself.

(i) Payment towards past debts
(ii) Purchase of existing wealth
(iii) Import of goods and services
(iv) Non availability of consumer goods
(v) Full employment situation

(i) Aggregate supply refers to the value of total output of goods and services produced in an economy in a year ie national product or income.
(ii) The components of aggregate supply are:
(iii) Aggregate (desired) consumption expenditure (C)
(iv) Aggregate (desired) private savings (S)
(v) Net tax payments (T)
(vi) Personal (desired) transfer payments to the foreigners (Rf)
AS = C + S + T + Rf
In this figure 2 aggregate supply curves are drawn for the assumption of fixed money wages and variable wages.

Explanation
(i) Z Curve is linear (fixed money wages)
(ii) Z₁ curve is non-linear (wage rate increases with employment)
(iii) When full employment level of Nf is reached output cannot be increased by employing more men.
(iv) So aggregate supply curve becomes inelastic (Vertical straight line).
(v) In reality aggregate supply curve will be like Z₁ .
(vi) If prices are high and wages low, the producers will employ more labourers.
(vii) 4YAggregate supply is an important factor in determining the level of economic activity.

1. The average income of a person of a country in a particular year is called Per Capita Income.
2. Per capita income is got by dividing national income by population.
Per capita income =\(\cfrac { National\ income }{ Population } \)

Capitalism:
(i) The means of production are privately owned.
(ii) Manufacturers produce goods and services with profit motive.
(iii) Individual can take up any occupation and develop any skill. E.g. USA.
Socialism:
(i) All resources are owned and operated by the government.
(ii) Public welfare is the main motive.
(iii) There is equality in the distribution of income and wealth. E.g. China
Mixedism:
(i) Both private and public sectors co-exist and work together.
(ii) Resources are owned by individuals and the government. E.g. India

Balanced Budget	Unbalanced Budget
1. In case of balanced budget, the proposed govt. expenditure is equal to the estimated govt. receipts in the budget year.	1. In case of unbalanced budget, the proposed expenditure and the estimated receipt are unequal during the budget year.
2. Balanced budget reduces unproductive and extravagant expenditure of the govt	2. Unbalanced (deficit) budget helps the govt. to incur unproductive and extravagant expenditure.
3. It is ineffective during economic instability.	3. It is effective during economic instability (surplus during inflation and deficit during deflation).
4. It fails to achieve full employment from under-employment equilibrium	4. Unbalanced (deficit) budget is a powerful instrument to achieve full employment
5. It cannot solve the problems of underdeveloped countries (UDCs).	5. Unbalanced (deficit) budget is a powerful instrument of resource mobilisation for economic development of UDCs.

BASIS	RBI	COMMERCIAL BANK
Meaning	The bank which looks after the monetary system of the country is known as Central Bank.	The establishment, which provides banking services to the public is known as Commercial Bank.
Role	It is a banker to the banks and the government of the country	It is the banker to the citizens of the nation
Established by	Reserve Bank of India Act, 1934	Banking Regulation Act, 1949.
Ownership	Public	Public or Private
Monetary Authority	It is the supreme monetary authority with wide powers	No such authority.
Objective	Public welfare and economic development.	Earning Profits
Money supply	Ultimate source of money supply in the economy.	No such function is performed by it.
Right to print and issue currency notes	Yes	No
Deals with	Banks and Governments	General Public
How many banks are there	Only one	Many

For Egression Calculations, we draw the following table

Month(X)	Height(Y)	X2	XY
1	52.5	1	52.5
2	58.7	4	117.4
3	65.0	9	195.0
4	70.2	16	280.8
5	75.4	25	377.0
6	81.1	36	486.6
7	87.2	49	610.4
8	95.5	64	764.0
9	102.2	81	919.8
10	108.4	100	1084.0
ΣX = 55	ΣU = 796.2	ΣX2 = 385	ΣXY= 4887.5

Considering the regression line as Y = a + bX, we can obtain the values of a and b from the above values.
\(a=\frac { \sum { Y } \sum { X } ^{ 2 } }{ { N\sum { X } }^{ 2 }-{ (\sum { X } ) }^{ 2 } } \)
\(a=\frac { 796.2x385-55x4887.5 }{ 10x385-55x55 } \)
\(b=\frac { N\sum { XY-\sum { X } \sum { Y } } }{ N{ \sum { X } }^{ 2 }-{ (\sum { X } ) }^{ 2 } } \)
\(a=\frac { 10x4887.5-55x796.2 }{ 10x385-55x55 } \)
= 6.16
Hence the regression line can be written as
Y = 45.73 + 6.16x

1. Human Resources:
Human resource is named as human capital because of its power to increase productivity and thereby national income. There is a circular relationship between human development and economic growth.
2. Technical Know-how:
As the scientific and technological knowledge advances, more and more sophisticated techniques steadily raise the productivity levels in all sectors. Schumpeter attributed the cause for economic development to innovation.
3. Political Freedom:
The process of development is linked to political freedom. DadabhaiNaoroji explained in his classic work ‘Poverty and Un- British Rule in India’ that the drain of wealth from India under the British rule was the major cause of the increase in poverty in India.
4. Social Organization:
People show interest in the development activity only when they feel that the fruits of development will be fairly distributed.
5. Corruption free administration:
Corruption is a negative factor in the growth process. Unless the countries root-out corruption in their administrative system, the crony capitalists and traders will continue to exploit national resources.
6. A desire for development:
The pace of economic growth in any country depends to a great extent on people’s desire for development
7. Moral, ethical and social values:
These determine the efficiency of the market, according to Douglas C. North. If people are not honest, the market cannot function.
8. Casino Capitalism:
If People spend a larger proportion of their income and time on entertainment liquor and other illegal activities, productive activities may suffer, according to Thomas Piketty.
9. Patrimonial Capitalism:
If the assets are simply passed on to children from their parents, the children would not work hard, because the children do not know the value of the assets.

(1) Income   (Y)	(2) Consumption       (C)	(3) Investment      (l)	(4) Aggregate Demand AD = C + 1 = Column(2) + Column(3)
0	30	(a)	50
300	300	20	320
400	390	20	410
500	480	20	500
600	570	20	(e)

 Using AD = C + II,
(a) 50 = 30 + 20
(b) 320 = 300 + 20
(c) 410 = 390 + 20 Deriving the consumption function:
Autonomous consumption = 30 (from the first row where Y = 0).
To find the mpc, calculate a change in C (e.g. 390 – 300 = 90), and divide by the corresponding change in Y (400 – 300 = 100).
So the mpc = ΔC/ΔY = 90/100 = 0.9 Hence, the consumption function is C = 30 + 0.9Y To fill in
(d) C = 30 + 9(600) = 30 + 540 = 570.
(e) follows from 590 = 570 + 20.
f. Equilibrium is where Y = AD, which is at 500 (see shaded row).

Types of Exchange Rate:
(i) Nominal Exchange Rate
(ii) Real Exchange Rate
(iii) Nominal Effective Exchange Rate
(iv) Real Effective Exchange Rate If 1US Dollar = Rs.75 
(i) Nominal Exchange Rate:
Nominal Exchange Rate =\(\cfrac { 75 }{ 1 } \)
This is the bilateral nominal exchange rate.
(ii) Real Exchange Rate:
(1) Real Exchange Rate = \(\cfrac { { eP }_{ r } }{ P } \)
P = Price level in India
PF = Price level in abroad (say US)
e = Nominal Exchange Rate 
(2) If a pen costs Rs.50 in India and it costs 5 USD in the US.
\(\therefore \text {Real Exchange Rate}=\cfrac { 75\times 5 }{ 50 } =7.5\)
(3) If real exchange rate is equal to 1, the currencies are at purchasing power parity.
(4) If the price of the pen in US is 0:66 USD, then the real exchange rate

Then it could be said that the USD and Indian rupee are at purchasing power parity.

(i) Income by Income Method. Income method approaches National Income from the distribution side.
(ii) National income is calculated by adding up all the incomes generated in the course of producing national product.
(iii) Factor incomes are grouped under labour income, capital income and mixed income.
(iv) national income is calculated as domestic factor income plus net factor incomes from abroad. In short,
Y = w + r + i + π + (R-P)
w = wages
r = rent
i = interest
π = profits
R = Exports
P = Imports
(v) This method is adopted for estimating the contributions of the remaining sector, viz.
(vi) Data on income from abroad (the rest of) the world sector or foreign sector are obtained from the account of the balance of payment of the country.
Items no to be included:
(1) Transfer payments are not to be included in estimation of national income.
(2) The receipts from the sale of second hand goods should not be treated as part of national income.
Item to be included:
(1) Imputed value of rent for self occupied house or offices is to be included.
(2) Imputed value of services provided by owners of production unit (family labour) is to be included.

(a) Rapid Economic Growth:
(i) It promotes rapid economic growth.
(ii) Thus both public requirements and private needs are taken care of.
(b) Balanced Economic Growth:
(i) Mixedism promotes balanced growth of the economy.
(ii) It promotes balanced growth between agriculture and industry.
(c) Proper utilization of Resources:
(i) The government can ensure proper utilization of resources.
(ii) The government controls must of the important activities directly.
(d) Economic Equality:
(i) The government uses progressive rates of taxation.
(ii) Income tax to bring about economic equality.

Introduction
The concept of multiplier Was first developed by R.F. Khan in terms of employment. J.M Keynes redefined it as investment multiplier.
Definition
Multiplier is defined as the ratio of the change in national income to change in investment.
\(K=\Delta Y / \Delta I\)
The value of multiplier depends on MPC.
\(\mathrm{K}=\frac{1}{1-\mathrm{MPC}} \text { since } \mathrm{MPC}+\mathrm{MPS}=1\)
\(k=\frac{1}{N 118}\)
Multiplier is inversely related to MPS and directly with MPC.
If MPC is, 0.75, MPS is 0.25 then K=4.00
\(\frac{1}{1-0.75} \text { or } \frac{1}{0.25}=4\)

MPC	MPS	k
0.00	1.00	1
0.10	0.90	1.11
0.50	0.50	2.00
0.75	0.25	4.00

Working
(i) Suppose government undertakes investment expenditure equal to र100 cr on public works.
(ii) Income of labourers and suppliers of materials increases by र100 cr
(iii) If MPC is 0.8 that is 80 %. र80 cr is spent on consumption र20 cr salved
(iv) Suppliers of goods get an income of र80 cr. They spend र64 cr (ie 80% of र80 cr).
(v) In this manner consumption expenditure and increase in income act in a chain like manner.