Introduction — Economics STD 12 Humanities & Commerce — Question

State whether the following transactions will be recorded on debit or credit side of BOP.

1. Loan from IMF to cover deficit of BOP.
2. Indian Government repays loan taken from IMF.
3. Purchase of shares of Infosys by a Japanese resident.
4. Export of Jute to Sri Lanka.
5. Acquisition of a foreign company by Tata.
6. Purchase of toys from China.

Distinguish between the nominal exchange rate and the real exchange rate. If you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.

Transfer payments refer to payments which are made:

1. Without any exchange of goods and services.
2. To workers on transfer from one job to another.
3. As compensation to employees.
4. None of these.

Give the meaning of factor income to abroad and factor income from abroad. Also give an example of each.

Regulation of prices in the case of agricultural products is not only desirable but necessary. Explain.

What is aggregate demand? State its components.

Giving reason state whether are included or excluded in/ from domestic territory.
Company in India owned by an American.

Foreign exchange rate in India is on the rise recently. What impact is it likely to have on exports and how?

Explain the meaning of deficit in balance of payments.

Give the meaning of (a) tax revenue, and (b) non-tax revenue. Give one example of each.