Effective from September 1, 2019, your credit card, debit card, prepaid payment instruments or e-wallets can be used to give standing instructions for recurring transactions of merchant payments. The Reserve Bank of India notified on August 21, 2019 that the card holders can provide e-mandate on cards for simple/automatic recurring transactions to the merchants. No…
Fiscal policy is the government’s use of spending and taxation to influence the economy. Fiscal policy differs from monetary policy. Monetary policy refers to the management of money supply and interest rate and is the demand side economic policy used by the monetary authority of a country, typically the central bank (in India RBI) or…
A government requires money for its spending which includes normal government expenditures, capital expenditures on public works, relief expenditures, and subsidies of various types, transfer payments and social security benefits etc. Imposing tax on public for the above spending is major source of its revenue. Beside Taxation, government collects money through fiscal surplus of previous…
The contractionary monetary policy is the opposite of the expansionary monetary policy. It is used to fight inflation which involves decreasing the money supply to increase the cost of borrowing which in turn decreases GDP and dampens inflation. Once the Central Bank of the country (In India RBI) puts too much liquidity into the banking…
The most well-known and frequently tracked metric used for measuring the economic growth of a country is the gross domestic product (GDP). The Gross Domestic Product measures the value of goods and services produced by a nation both for domestic sale and exports. However, GDP does not include imports for measurement, as imports are not…
Economic growth is an increase in the production of economic goods and services per head of the population over a specific period. It can be measured in nominal or real (adjusted for inflation) terms to be more accurate. Economists and statisticians use different methods such as Gross national product (GNP) and Gross Domestic Product (GDP)…
The inflation rate of an economy can be easily calculated by using the following formula: [CPI(c)-CPI (p) ÷ CPI (p)]×100 Where; CPI(c) is the consumer price index of the current year CPI (p) is the consumer price index of the previous year or initial consumer index For example, the CPI of the previous year was…
In the economic dialect, inflation refers to the increase of the price level of commodities due to an increase in the quantity of money supply. During the period of inflation, the growth of money supply is faster than the level of productivity in the economy. On the other hand the term ‘deflation’ is used to…
The word ‘money’ or cash is usually used by the common man for currency notes and coins. Apart from above said portable money (cash), we also use cheque demand drafts, debit cards, and credit cards as money equivalents. In a broader interpretation, money means not only notes and coins in circulation; it includes other monetary…
Options are contracts through which a seller gives a buyer the right, but not the obligation, to buy or sell a specified asset (Ex: Foreign currency, shares, equities, commodities etc.) at a predetermined price, by a certain date. It means they acquire or dispose of the underlying asset at that price called the strike price.…