Question

Mention the number of new price monitoring centres set up by government.

Answer 1

The government has set up 140 new price monitoring centres to keep a close watch on wholesale and retail prices of essential commodities.

Answer 2

Two proactive measures taken by the government to boost domestic supply and reduce prices are: 1. Banning the export of food items like wheat, broken rice, non-basmati white rice, and onions. 2. Reducing import duties on edible oils and pulses to increase their availability in the domestic market.

Answer 3

One monetary measure used to control inflation is increasing the repo rate. When the Reserve Bank of India (RBI) raises the repo rate, it becomes costlier for commercial banks to borrow money. This leads to reduced money supply in the economy, thereby decreasing demand and helping control inflation.

Answer 4

Two precautions while using the expenditure method are: 1. Avoiding transfer payments: Expenditures like scholarships, pensions, or donations should not be included as they are not payments for goods and services. 2. Excluding expenditure on second-hand goods: These do not represent current production and hence must be excluded to avoid double counting.

Answer 5

The statement is only partially true. While higher GDP may indicate a higher availability of goods and services, it does not always reflect increased welfare due to the following reasons:
- Income inequality: GDP may rise, but the benefits might be concentrated in a few hands.
- Non-monetary aspects: Welfare also includes health, education, and environmental quality, which GDP does not account for.
- Population growth: If population increases faster than GDP, per capita availability may fall.
Therefore, GDP alone cannot be a complete indicator of welfare.

Answer 6

Stock Variable: It is measured at a particular point of time. Example: Capital, wealth, and population. Flow Variable: It is measured over a period of time. Example: Income, savings, and investment. Thus, stock is static and flow is dynamic in nature.

Answer 7

The components of 'Profit' under the Income Method include: 1. Corporate Tax: Tax paid by companies on their profits. 2. Dividends: Part of profits distributed to shareholders. 3. Undistributed Profits: Retained earnings kept by firms for future use. Together, these form the total profit component of factor income.