(i) Total production of 64 agriculture commodities is estimated. The output of each crop is measured by multiplying the area sown by the average yield per hectare.
(ii) The total output of each commodity is valued at market prices.
(iii) The aggregate value of total output of these 64 commodities is taken to measure the gross value of agricultural output.
(iv) The net value of the agricultural output is measured by making deductions for the cost of seed, manures and fertilisers, market charges, repairs and depreciation from the gross value

Income	Consumption
Rs. 0	500
100	590
200	680
300	770

i) The establishment of the Contingent Reserve Arrangement (CRA).
ii) In the sixth BRICS summit in Brazil the member countries, signed an agreement to create a development bank (New Development.

(i) The National planning commission was set up in India in 1950.
(ii) A major function of the planning commission was to formulate a plan for the most effective and balanced utilization of the country's resources".
(iii) The planning commission formulated the First Five Year Plan for the period 1951 - 56.

(i) The paper currency standard reffers to the monetary system in which the paper currency notes issued by the treasury of the Central Bank.
(ii) Paper currency is not convertible into any metal.
(iii) Its value is determined independent of the value of gold or any other commodity.
(iv) It also known as managed currency standard.

Three of the most important ways of classifying correlation are:
(i) Based on the direction of change of variables
Positive Correlation:
(i) The correlation is said to be positive if the values of two variables move in the same direction.
(ii) Ex. Y = a + bx
Negative Correlation:
(i) When the values of variables move in the opposite directions.
(ii)  Ex. Y = a - bx
(ii) Based on the number of variables studied.
Simple Correlation:
(i) If only two variables are taken for study.
Multiple Correlations:
(i) If three or more than three variables are studied simultaneously.
\(\operatorname{Ex}: Q_{d}=f\left(P, P_{v}, P, t, y\right)\)
Partial Correlation:
(i) If there are more than two variables but only two variables are considered keeping the other variables constant, then the correlation is said to be Partial Correlation.
(iii) Based on the constancy of the ratio of change between the variables
Linear Correlation:
(i) When on the amount of change in one variable tends to bear a constant ratio to the amount of change in the other.
(ii) Ex. Y = a + bx²
Non Linear:
(i) The amount of change in one variable does not bear a constant ratio to the amount of change in the other variables.
(ii) Ex. Y = a + bx²

Discharge of sewage and waste water:
(i) Sewage, garbage and liquid waste of households, agricultural runoff and effluents from factories are discharged into lakes and rivers.
(ii) These wastes contain harmful chemicals and toxins which make the water poisonous for aquatic animals and plants.
Dumping of solid wastes:
(i) The dumping of solid wastes and litters in water bodies cause huge problems.
Discharge of industrial wastes:
(i) Industrial waste contains asbestos, lead, mercury, grease oil and petrochemicals.
Oil Spill:
(i) Sea water gets polluted due to oil spilled from ships and tankers.
Acid Rain:
(i) When the acidic particles caused by air pollution mix with water vapour, it results in acid rain.
Global warming:
(i) The increase in water temperature affects aquatic plants and animals.
Eutrophication:
(i) The increased level of nutrients in water depletes oxygen in water and this negatively affects fish and other aquatic animal population.

Also known as floating exchange rate, the exchange rates are freely determined in an open market by market forces of demand and supply.

(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.

(i) Red tapism and bureaucracy since, approval of many officials is needed.
(ii) Absence of incentive and so productivity is less.
(iii) Limited freedom of choice in the consumption of goods and services.
(iv) The state takes all major decisions. There is concentration and misuse of power.

1. Capitation tax
2. Duties in respect of succession to agricultural land.
3. Duties of excise on certain goods produced or manufactured in the State, such as alcoholic liquids, opium, etc.
4. Estate duty in respect of agricultural land.
5. Fees in respect of any of the matters in the State List, but not including fees taken in any Court.
6. Land Revenue.
7. Rates of stamp duty in respect of documents other than those specified in the Union List.
8. Taxes on agricultural income.
9. Taxes on land and buildings.
10. Taxes on mineral rights, subject to limitations impose by Parliament relating to mineral development.
11. Taxes on the consumption or sale of electricity.
12. Taxes on the entry of goods into a local area for consumption, use or sale therein.
13. Taxes on the sale and purchase of goods other than newspapers.
14. Taxes on the advertisements other than those published in newspapers.
15. Taxes on goods and passengers carried by road or on inland waterways.
16. Taxes on vehicles.
17. Taxes on animals and boats.
18. Taxes on professions, trades, callings and employments.
19. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
20. Tolls.

1. Find out the actual mean of given data (x̅)
2. Find out the deviation of each value from the mean (x = X - x̅ )
3. Square the deviations and take the total of squared deviations Σx²
4. Divided the total Σx² by the number of observation \(\left( { \frac { \sum { x } }{ n } }^{ 2 } \right) \)
5. The square root of \(\left( { \frac { \sum { x } }{ n } }^{ 2 } \right) \) is standard deviation.

BASIS FOR COMPARISON	QUALITATIVE DATA	QUANTITATIVE DATA
Meaning	Qualitative data is the data in which the classification of objects is based on attributes and properties.	Quantitative data are those that can be quantified in definite units of measurement
Examples	Eg. Gender, Community, honesty	Age, income, number of firms etc
Approach	Subjective	Objective
Collection of data	Unstructured	Structured
Sample	Small number of nonrepresentative samples	Large number of representative samples
Outcome	Develops initial understanding.	Recommends final course of action

Economic development is measured on the basis of four criteria

Gross National Product (GNP):
(i) GNP is the total market value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country.
(ii) GNP is one measure of the economic condition of a country, under the assumption that a higher GNP leads to a higher quality of living, all other things being equal.
GNP per capita:
(i) This relates to increasing in the per capita real income of the economy over the long period
(ii) This indicator of economic growth emphasizes that for economic development the rate of increase in real per capita income should be higher than the growth rate of population.
Welfare:
(i) Economic development is regarded as a process whereby there is an increase in the consumption of goods and services by individuals.
(ii) From the welfare perspective, economic development is defined as a sustained improvement in health, literacy, and standard of living
Social Indicators:
(i) Social indicators are normally referred to as basic and collective needs of the people
(ii) The direct provision of basic needs such as health, education, food, water, sanitation, and housing facilities check social backwardness.

S/N	Basic need	Indicators
1	Health	Life expectancy at birth
2	Education	Literacy signifying primary school enrolment as a percent of the population.
3	Food	Calorie Supply per head
4	Water supply	Infant mortality and percentage of the population with access to potable water
5	Sanitation	Infant mortality and percentage of the population with access to sanitation.

(i) First, in an advanced and more important an evolving-financial system, it was not possible to define the tock of Money in an unambiguous way.
(ii) At least there were a number of different but equally valid definitions of the money supply and there was no strong reason for choosing one in preference to any other.
(iii) As we have seen, money can be defined either narrowly or broadly.
(iv) However, there are or have been within the some institutional context a number of different definitions of the money supply.
(v) The definitions change frequently as does the popularity of one measure over another which partly illustrates the difficulty in trying to pin down the concept.

1. Better utilization of resources.
2. Concentration in the production of goods in which it has a comparative advantage.
3. Saving in time.
4. Perfection of skills in production.
5. Improvement in the techniques of production.
6. Increased production.
7. Higher standard of living in the trading countries

Introduction:
1. Externality refers to external effects or spillover effects resulting from production or consumption on the third parties.
Definition:
1. It may be defined as "the cost or benefit imposed by the consumption and production activities of the individuals on the rest of the society not directly involved in these activity and towards which no payment is made".
Types:
1. Beneficial externalities are called "positive externalities".
2. Adverse externalities are called "negative externalities".
Positive Consumption Externality
1. When some residents of a locality hire a private security agency to patrol their area, the other residents of the area also benefit from better security without bearing cost.
Negative Consumption Externality
1. A person smoking cigarette gets satisfaction but this act causes dissatisfaction to the non-smokers who are driven to passive smoking.
Positive Production Externality
1. The ideal location for beehives is orchards.
2. While bees make honey, they also help in the pollination of apple blossoms.
3. The benefits. accrue to both producers (honey and apple).
4. This is called reciprocal untraded interdependency.
Negative Production Externality
1. They include pollution generated by a factory that imposes costs on others.
2. The emissions and effluents of a factory cause air and water pollution.
3. Water becomes contaminated and unfit for drinking (e.g.) Tanneries.
4. The innocent community bears the external cost for which it is not compensated.

Introduction:
(i) The modern state is a welfare state. In a welfare state government has to perform several functions i.e. social, economic and political.
(ii) These activities lead to increasing public expenditure.
Population Growth
(i) The growth in population needs huge investment in health and education, law and order. Young population need increasing expenditure on education & youch services.
(ii) Aging population needs transfer payments - old age pension, social security.
Defence Expenditure
(i) Defence expenditure increases due to modernisation of defence equipment.
Government Subsidies
(i) Government provides subsidies on food, fertilizers, interest on priority sector lending, exports, education.
(ii) Because of the huge subsidies public expenditure increased manifold.
(iii) Corporate sectors also receive subsidies.
Debt Servicing
(i) Government has borrowed heavily from internal and external sources.
(ii) So government has to make huge amounts of repayment towards debt servicing.
Development Projects
(i) Various development projects like irrigation, iron and steel, heavy machinery, power, telecommunications involve huge investment.
Urbanisation
(i) The urban population is 43 %.
(ii) There are more than 54 cities above one million population.
(iii) The increase in urbanization needs heavy expenditure on law and order, civic amenities.
Industrialisation
(i) In a planned economy, the government starts basic and heavy industries which need huge capital and have long gestation period.
(ii) UDCs also need strong infrastructures like transport, communication, power, fuel.
Increase in grants in aid to state and union territories
(i) There is increase in grants-in-aid to state and union territories to meet natural disasters.

Investment for productive purposes
(i) World Bank helps in reconstruction and development of territories of member nations through investment for productive purposes.
(ii) It encourages the development of productive facilities and resources in less developed countries.
Balanced growth of international trade
(i) Promoting the long range balanced growth of trade at international level and the maintaining equilibrium in BoPs of member nations by encouraging international investment.
Provision of loans and guarantees
(i) Arranging the loans or providing guarantee on loans by various other channels and execute important projects.
Promotion of foreign private investment
(i) This is done by means of guarantees on loans and other investment made by private investors.
(ii) The Bank supplements private investment by providing finance for productive purpose out of its own resources or from borrowed funds.
Technical services
(i) The World Bank facilitates different kinds of technical services to the member countries through Staff College and experts.

(i) The equilibrium rate of exchange is determined in the foreign exchange market according to the general theory of value, by the interaction of demand and supply,
(ii) Y axis represents exchange rate, be cos value of rupee in terms of dollars
(iii) X axis represents demand and supply of forex.
(iv) E is the equilibrium point where DD intersects SS. The exchange rate is P₂.

Introduction
(i) Commercial banks are institutions that conduct business with profit motive by accepting public deposits and lending loans.
Capital Formation
(i) Bank mobilize the small savings of the people scattered over a wide area through their network of branches and make it available for productive purposes.
(ii) Attractive schemes of the banks induce the people to save their money
Creation of Credit
(i) Credit creation leads to increased production, employment, sales and prices and thereby there is faster economic development.
Channelizing Funds towards Productive Investment
(i) Pooled savings is allocated to various sectors and productivity increases.
Encouraging Right Industries
(i) Banks give loan to right type of persons.
(ii) Banks grant loans and advances to manufacturers whose products are in great demand.
(iii) Manufacturers introduce new methods of production and assist in raising the national income of the country.
Banks Monetize Debt
(i) Banks transform the loan to be repaid after a certain period into cash, which can be immediately used for business activity.
(ii) Manufacturers and wholesale traders cannot increase their sales without selling goods on credit basis.
(iii) But credit sales may lead to locking up of capital.
(iv) So production is reduced.
(v) As banks are lending money by discounting bills of exchange, business concerns are able to carry out economic activities without gap.
Finance to Government
(i) Government needs finance for promoting industries.
(ii) Banks provide long-term credit to Government by investing their funds in Government securities and short-term finance by purchasing Treasury Bills.
(iii) RBI has given Rs.68,000 crores to the government of India in the year 2018-19.
Employment Generation
(i) Bank's branches are opened frequently and so new employment opportunities are created.
Banks Promote Entrepreneurship
(i) Banks induce new entrepreneurs to take up the well-formulated projects and provision of counseling services like technical and managerial guidance.
(ii) Conclusions Banks provide 100 % credit for worthwhile projects, which is also technically feasible and economically viable.
(iii) Thus commercial banks help for the development of entrepreneurship in the country.

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.

Introduction
Under the Keynes theory of employment, a simple two sector economy consisting of the household sector and the business sector is taken to understand the equilibrium between ADF and ASF.
Explanation
1. AD and AS reach equilibrium at E. The employment level is N_o
2. At ON₁employment, the aggregate supply is N₁R₁. But the aggregate demand is M₁N₁.
3. The expected level of profit is M₁R₁.
4. To attain this level of profit, entrepreneurs will employ more labourers, till they reach point E i.e. ON_o.
5. Beyond ON_o, the aggregate demand curve is below the aggregate supply curve showing loss.
6. So they will never employ more than ON_o labour.
7. The equilibrium level of employment need not be the full employment level (N_o).
8. The difference between N_o - N₁ is the level of unemployment.
Conclusion
Thus the concept of effective demand becomes significant in explaining the under employment equilibrium.

Introduction:
(i) In India there exists a large unorganized and non-monetised subsistence sector where barter system prevails. So proper valuation of output is very difficult. The difficulties are:
Transfer payments:
(i) Government makes transfer payments like pensions, unemployment allowance, subsidies. They are not included in national income because they are paid without adding anything to the production processes.
Difficulties in assessing depreciation allowance:
(i) High degree of judgement is needed to assess the depreciation allowances and accidental damageś, repair and replacement charges.
Unpaid services:
(ii) Housewife's services like preparation of meals, bringing up children are not directly included in national income. But such services performed by paid servants are included in NI. Rendering services to their friends, painting, singing, also cannot be measured in monetary terms. It is done out of love.
Income from illegal activities:
(i) Income from illegal activities like gambling, smuggling is not included in national income.
(ii) Though these activities have value yet they are not considered as productive from the society point of view.
Production for self - consumption and changing price:
(i) Farmers keep a large portion of food and other goods produced on the farm for self consumption
(ii) The problem is whether that part of the produce which is not sold in the market can be-included in NI or not.
(iii) National income by product method is measured by the value of final goods and services at current market prices. But prices do not remain stable.
Capital Gains:
(i) The problem also arises with regard to capital gains. They must be excluded from NI.
Statistical problems:
(i) There are statistical problems too. Reliable data are not adequate.
(ii) Different languages, customs also create probléms.
(iii) Indians are non-cooperative and indifferent to the official inquiries.
(iv) Statistical staff are untrained and inefficient.
(v) Double counting must be avoided.
Conclusion:
(i) Therefore, national income estimates in our country are not very accurate or adequate. There is at least 10 % percent margin of error.

1. In an economy, the fundamental economic activities are production and consumption.
2. These are several other activities.
3. The ultimate aim is to achieve growth.
4. The exchange activity supports production and consumption.
5. These activities are influenced by economic and non economic activities.
6. The economic activities include transportation, banking, advertising, planning.
7. The non-economic activities are environment, education, health, entertainment.
8. The external activities are import, export, international relations, emigration, immigration, foreign investment, foreign exchange earnings.
9. All these activities influence the entire functioning of the economy.

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.

(i) The traditional approach defines development strictly in economic terms.
(ii) The increase in GNP is accompanied by decline in share of agriculture in output and employment while those of manufacturing and service sectors increase.
(iii) It emphasizes the importance of industrialization.

The reason that both equations are true is because of the identity MPS + MPC = 1. This is true because there are only two things that one can do with one's income - consume and save.

i. Boom
ii. Recession
iii. Depression
iv. Recovery

Liquidity preference is based on three motives. They are,
(i) Transaction motive
(ii) Precautionary motive
(ii) Speculative motive

(i) Environment means "all the conditions, circumstances, and influences surrounding and affecting the development of an organism or group of organisms".
(ii) It also means that the complex of physical, chemical and biotic factors that act upon an organism or an ecological community ultimately determine its form and survival.

The SAARC Secretariat was established in Kathmandu (Nepal) on 16^th January 1987.

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

(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.