Category: Samacheer Kalvi Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 19 Sources of Business Finance Notes

→ “Finance is the lifeblood of.any business.’” ‘

→ The term business finance denotes the economic resources employed in business enterprises.

→ “The finance function is the process of acquiring and utilizing funds by a business.”- R.C. Osborn

→ “Finance is that business activity which is concerned with the acquisition and conservation of capital fund in meeting the financial needs and overall objectives of business enterprises.”- B.O. Wheeler

→ Business finance is classified into three types with reference to time period.

→ Commercial paper (CP) is an unsecured money market instrument in the form of a promissory note.

→ Small scale firms can acquire industrial machinery, office equipments, vehicles, etc., without making full payment through hire purchase.

→ Factoring is a one of the methods of raising business finance through sale or mortgage of book debts,

→ When the bank lends for a period ranging from more than one year to less than five years, it is called medium term loan. ‘

→ Commercial banks are important sources of raising business finance for various purposes as well as for different time periods.

→ Owner’s funds mean funds which are provided by the owner of the enterprises who may be an individual, or partners or shareholders of a company.

→ The term ‘borrowed funds’ denotes the funds raised through loans or borrowings. .

→ Micro finance or financing small business enterprises today has to be viewed from the ‘ethical’ sources than the ‘informal’ sources that are totally unscrupulous in their financing practices.

→ Business enterprises have to analyse the cost of mobilising and utilizing the funds.

→ Financially sound enterprises have capacity to pay interest promptly and return the capital at the stipulated time.

→ Some investments can be easily and readily encashed in the market without any loss. Such investments are called liquid investments.

→ Real estate is one of the fastest growing sectors in India.

→ Public deposits are more beneficial than the fixed deposit in the bank, in the matter of yielding good return.

→ Bonds are one of the ideal investment options for those investors who would like to invest their hard earned money safely.

→ Recurring deposit (RD) account is another investment option for those people who earn regular income.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 7 International Economics Notes

→ International Economics is a valuable branch of Economics dealing with how trade benefits nations Several theories have been propounded on causes of international trade starting from Adam Smith.

→ The controversy over the need for a separate theory has been resolved by the Modem Theory of International Trade.

→ The gains from trade, Terms of Trade, Balance of Payments constitute the major areas of discussion.

→ The Exchange rate, either fixed or flexible is a major factor determining the economic strength of the nation.

→ In the line of foreign trade and foreign capital, foreign investment (especially FDI) plays a major role in determining economic development of Less Developed Countries and developing countries.

→ International trade has helped the economically developed countries largely and disappointed many african and asian countries.

→ The international economic organizations such as IMF. IBRD and WTO and the trade blocs SAARC, ASEAN and BRICS which play a vital role in international trade are covered in the next chapter.

→ Absolute Cost Differences : The difference in the actual costs of production of a commodity between two nations.

→ Balance of Payments : The balance between the values of goods and services exchanged between two countries. It is a trade in both visible and non-visible items.

→ Balance of Trade : The balance between the values of goods exchanged between two countries. It is a trade in merchandise items or visible items only.

→ Comparative Cost Differences : The difference in the absolute costs of production of two commodities between two countries.

→ Devaluation: It means official reduction in the value of a currency in terms of gold or other currencies.

→ Exchange Rate: The rate at which one currency is exchanged for another currency.

→ Factor Endowment: Abundance in the availability of a factor in a country.

→ Fixed Exchange Rates: An exchange rate that is held within a narrow band by the monetary authorities.

→ Flexible Exchange Rates: Flexible exchange rates are freely determined in an open market primarily by private dealings, and they, like other market prices, vary from day by day.

→ Foreign Direct Investment: The investment made by a multinational enterprise in a foreign country and an investment in a foreign country that involves some degree of control and participation in management.

→ Foreign Exchange: The currency of another country.

→ Internal Trade: A trade within the geographical boundary of a particular nation.

→ International Economics : A special branch of Economics which primarily deals with the basics of international trade.

→ International Trade : A trade between two or more countries and it is a trade beyond the geographical and political boundaries.

→ Terms of Trade : The rate at which goods of one country are exchanged for that of another country ie ratio of export price and import price.

Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 20 International Finance Notes

→ International finance is a section of financial economics that deals with the monetary interactions that occur between two or more countries.

→ International finance plays a pivotal role in the international trade and in the sphere of exchange of goods and services among the nations.

→ Foreign Direct Investment occurs when an investor based on one-’s native country (the home country) acquires an asset or a company in another country (in host country) with the intention to manage the asset or the company.

→ “Foreign direct investment (FDI) is an investment made by a company or an individual in one country with business interests in another country, in the form of either establishing Business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company”

→ FDI generates a lot of employment opportunities in developing countries, especially in high skill areas.

→ Foreign companies take away huge funds in the form of dividend, royalty fees etc..This causes a huge outflow of capital from the host country.

→ FII can be defined as investment made by a Non-resident in equity of domestic company without intension of acquiring management control.

→ A depository’ receipt is a negotiable financial instrument issued by a bank to represent a foreign company’s publicly traded securities.

→ GDR is an instrument issued abroad by a company to raise funds in some foreign currencies and is listed and traded on a foreign stock exchange.

→ GDR is denominated in any foreign currency but the underlying shares would be denominated in local currency of the issuer.

→ ADR is a dollar denominated negotiable certificate representing a non-US company in US market which allows the US citizens to invest in overseas securities.

→ Then DCB requests the American Depository Bank (ADB) to issue the shares in the form of ADRs.

→ The approval of Securities and Exchange Commission (SEC) of US needs to be obtained for issuing ADR.

→ Foreign currency convertible bond is a special type of bond issued in the currency other than the home currency.

→ The amount received from the issue of FCCB should be utilised as per the guidelines of External Commercial Borrowing (ECB).

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 21 Micro, Small and Medium Enterprises (MSME) and Self Help Groups (SHGs) Notes

→ Entrepreneurship is a key for economic development of any country.

→ In accordance with the provisions of Micro, Small and Medium Enterprises Development Act 2006, the micro, small and medium enterprises are classified into two classes.

→ MSMEs play a complementary role to serve as a feeder to large scale industries.

→ MSME sector contributes towards the establishment of socialistic pattern of society by reducing the concentration of income and wealth.

→ MSMEs contribute 45% to the total manufacturing output and 40% to the exports from the country.

→ In Tamil Nadu MSMEs sector produces a wide variety of products in almost all fields.
→ Government of Tamil Nadu launched “New Entrepreneur-cum-Enterprise Development Scheme (NEEDS)” with a view to encouraging the educated youth to become the first generation entrepreneurs.

→ There are many Banks and Financial institutions which provide financial assistance to Micro Small and Medium Enterprises and start-ups.

→ MUDRA Bank will refinance to Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana (PMMY).

→ Rural development is one of the main pillars of progress of India.

→ National Bank for Agricultural & Rural Development (NABARD) has defined Self Help Group as “a homogenous group of rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group to be lent to the members for meeting their productive and emergent credit needs”

→ The motto of every group members should be “saving first – credit latter”

→ Self Help Group holds weekly meetings mostly during non-working hours, and full attendance is made mandatory for better participation.

→ The five year plans of the government of India has given due recognition on the importance and the relevance of the Self-help group method to implement developmental schemes at the grassroots level.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 6 Banking Notes

→ It is well-recognized that the financial sector plays a critical role in the development process of a country.

→ Financial institutions, instruments and markets that constitute the financial sector that act as a conduit for the transfer of resources from net savers to net borrowers, that is, from those who spend less than they earn to those who spend more than they earn.

→ The outcome of the various reform measures so far has been impressive and banks have responded to the deregulation and the increasingly competitive environment by restructuring their operation and upgrading performance standards.

→ However, in the 2010s the volumes of NPAs have increased sharply.

→ Bank Rate : It is the rate at which the Central Bank of a country is prepared to re-discount the first class securities.

→ Capital Market : It is a financial market in which long-term debt or equity backed securities are bought and sold.

→ Cash Reserve Ratio (CRR) : Banks are required to hold a certain proportion of their deposits in the Form of cash with RBI. This is known as CRR.

→ Central Bank : It is an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system.

→ Commercial Banks : These are the institutions that make short term loans to business and in the process create money.

→ Credit Creation : It means the multiplication of loans and advances. Commercial banks receive deposits from the public and use these deposits to give loans.

→ Demonetisation : It is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency.

→ Monetary Policy : It is the macro-economic policy laid down by the Central Bank towards the management of money supply and interest rate.

→ Non-Bank Financial Institution (NBFI) : It is a financial institution that does not have a full banking license or is not supervised by the central bank:

→ Statutory Liquidity Ratio (SLR): It is the amount which a bank has to maintain in the form of cash, gold or approved securities.

Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 22 Types of Trade Notes

→ The essence of trade is to make goods and services available to those persons who need them and are able and willing to pay for them.

→ Buying and selling of goods and services within the boundaries of a nation are called internal trade.

→ A trader purchases goods not for his own use but for the purpose of sales to other traders and consumers at a profit.

→ “Purchase of goods in bulk from the manufacturers and selling them in smaller quantities to other intermediaries” is known wholesale trade.

→ Retail trade deals with the distribution of goods in small quantities to the consumers.

→ Foreign trade is a trade between a seller and buyer of different countries.

→ Import trade means buying goods from a foreign country for domestic use.

→ Export trade means the sale o f domestic goods to foreign countries.

→ Export trade is necessary to ,el! domestic surplus goods, to make better utilization of resources, to earn foreign exchange, to increase national income, to generate employment and to increase Government revenue.

→ Entrepot trade means importing of goods from one country and exporting the same to foreign countries. It is also known as ‘Re-export trade’.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 3 Theories of Employment and Income Notes

→ Currency is created by the RBI and Union Government.

→ Bank deposits are created by Commercial Banks and Co-operative Banks.

→ The demand for money is determined by a number of factors such as income, price level, interest rate, etc.

→ Gold Standard is a system in which the value of the monetary unit or the standard currency is directly linked with gold.

→ Plastic money is an alternative to the cash or the standard “money”.

→ Decentralised crypto currencies such as Bitcoin now provide an outlet for Personal Wealth that is beyond restriction and confiscation.

→ Barter: The exchange of one good for another Without the use of money.

→ Deflation: A fall in average level of prices, the opposite of inflation.

→ Disinflation: Process of reversing inflation without generating adverse effects

→ Inflation: An increase in average level of prices

→ Money: An asset that is generally acceptable as a medium of exchange.

→ Narrow money: M1 and M2 are is narrow money as they includes currency plus demand deposits in banks and other deposits.

→ Recovery: An increase in business activities after the lowest point, (i.e. depression).

→ Stagflation: The co-existence of a high rate of unemployment and inflation, (derived from stag(nation) and (in)flation)

→ Supply of Money: It refers to the amount of money which is in circulation in an economy at any given time.

→ Trade Cycle: The more or less regular upward and downward movement of economic activity over a period of years.

Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 23 Channels of Distribution Notes

→ A channel is the route through which the goods are passed on to the ultimate consumer.

→ According to Cundiff E.W. and Still, a channel of distribution may be defined as “a path traced in the direct or indirect transfer of title to a product as it moves from the producer to ultimate consumers”.

→ According to American Marketing Association, “A channel of distribution is the structure of intra company organization units and extra company agents and deals wholesale and retail through which a commodity or product or service is marketed”.

→ The VARs receive the products from the manufacturers, incorporate them as if their own products by adding value enhanced service and sell them to customers.

→ Producers adopt this channel to distribute goods or services in the home country and foreign countries.

→ Seasonal products are distributed through less layer of middlemen.

→ The term ‘Middlemen’ refers to all those who are in the link between the primary producer and the ultimate consumer in the exchange of goods or service.

→ A Broker is one who bargains for another and receives commission for his service.

→ A factor is a mercantile agent to whom goods are entrusted for sale by a principal.

→ A commission agent buys and sells goods on behalf of the principal for a fixed rate of commission for all his transactions.

→ Auctioneers are agents who sell goods by auction on behalf of their principals.

→ A Warehouse keeper accepts goods for the purpose of storage in his warehouse.

→ Drop Shippers are another type of limited-service wholesaler.

→ Truck jobbers (or truck wholesalers) actually store products, which are often highly perishable (e.g., fresh fish), on their trucks.

→ Rack Jobbers sell specialty products, such as books, hosiery, and magazines that they display on their own racks in stores.

→ Wholesale trade means buying and selling goods in relatively large quantities or in bulk.

→ According to Cundiff and Still “wholesaler buys from the producer and sell merchandise to the retailers and other merchants and not to the consumers”.

→ According to Evelyn Thomas “a true wholesaler is himself neither a manufacturer nor a retailer but act as a link between the two”.

→ A wholesaler arranges for the transport of goods from producers to his warehouse and from the warehouse to retailer.

→ Retail trade is a trade that deals with the distribution of goods in small quantities to the end consumers.

→ According to S. Evelyn Thomas “the retailer is the last of the many links in the economic chain whereby the consumer’s wants are satisfied smoothly and efficiently by retailers”.

→ According to Cundiff and Still “a retailer is a merchant or occasionally an agent whose main business is selling directly to the. ultimate consumers”.

→ A retailer has been defined as “a trading intermediary engaged in the distribution of goods to the ultimate consumer”.

→ A wholesaler serves as a link between producers and retailers.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 24 Retailing Notes

→ Retailing is the process of selling the goods and services directly to the ultimate consumers in small quantities.

→ The traders who have no fixed place of sale are called Itinerants.

→ Mobile traders deal in low price, daily usable items such as fruits, vegetables, fish, clothing, books, etc.

→ Peddlers are individuals who sell their goods by carrying on their head or shoulders moving from place to place on foot.

→ Hawkers are petty retailers who sell their goods at various places such as bus stop, railway station, Public Park and gardens, residential areas and other public places using a convenient vehicle to carry goods from place to place.

→ The traders sit on the footpath of the road or at the end of the road (pavement) and sell their goods such as fruits, vegetables, books, etc., are called Street vendors.

→ The retailers who maintain permanent establishment to sell their goods are called Fixed Shop Retailers.

→ General Stores sell a wide variety of products under one roof, most commonly found in a local market and residential areas to satisfy the day-to-day needs of the customers residing in nearby localities

→ Single-line Stores are small shops which deal in a particular line of products such as garments, stationery, textiles, medicines, shoes, etc.

→ Speciality Stores deal in a particular type of product under one product line only.

→ The retailers having permanent establishment and dealing in. large scale are called Fixed shop large scale retailers.

→ A Departmental Store is a large retail establishment offering a wide variety of products, classified into well defined departments.

→ A department is a large scale retail showroom requiring a large capital investment by forming a joint stock company managed by a board of directors.

→ A departmental store combines both the functions of retailing as well as warehousing.

→ A departmental store requires a large building with ample parking at a central place.

→ A number of identical retail shops with similar appearance normally deal in standardised and branded consumer products established in different localities owned and operated by manufacturers or intermediaries are called as Chain stores or Multiple shops.

→ Multiple shops enjoy public confidence due to fixed prices, standard quality, uniform appearance, and selection of goods with the help of salesmen.

→ A Super market is a large retail store selling a wide variety of consumer goods on the basis of low price appeal, wide variety and assortment, self-service and heavy emphasis on merchandising appeal.

→ A consumers’ cooperative store is a retail organisation owned, managed and controlled by the consumers themselves to obtain products of daily use at reasonable low prices.

→ Hire purchase trading is a system by which the seller agrees to sell the articles to the buyer on condition that the payment of the article will be made in a fixed number of installments till the sale price is paid.

→ Installment system is a type of purchase in which the price amount of the product is not paid initially but in installments. It is also called as deferred payment system

→ Automatic vending machine is a new form of direct selling.

→ Shopping malls are developed due to change in departmental stores in modem time.

→ The manufacturers or the intermediaries place the advertisement of their products on different media of internet like e-mail, portal and browser.

→ The associations of agriculturists and other federations interact with farming cooperatives to streamline local subsidies and formulate marketing policies for selling agro products.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 4 Consumption and Investment Functions Notes

→ The chapter consumption function and investment function can be summarised under three heads.

→ The consumption function deals with relationship between national income and consumption expenditure Viz APC, MPC and APS, MPS.

→ The subjective and objective factors determine consumption function.

→ The investment function includes autonomous investment and the induced investment, the functional relationship between interest rate and the investment, the role of MEC and rate of interest in determining the investment.

→ The multiplier is directly related to MPC and inversely related to MPS.

→ The accelerator principle explains the effect of changing consumption expenditure upon volume of investment.

→ The interaction of multiplier and accelerator is called super multiplier.

→ Accelerator: ratio of change in induced investment to change in consumption, (or) Technical relationship between change in capital stock and change in level of output.

→ Autonomous Consumption: Autonomous consumption is the minimum level of consumption or spending that must take place even if a consumer has no disposable income, such as spending for basic necessities.

→ Autonomous Investment: Additional investment that is independent of income.

→ Average Propensity to Consume (APC): Ratio of the consumption expenditure to income. C/Y

→ Average Propensity to Save (APS): Ratio of the saving to income. S/Y

→ Consumption function: The relationship between consumption and income, the tendency to imitate superior consumption pattern. Additional investment demand that results from an increase in domestic product (GDP).

→ Demonstration effect: Ratio of change in consumption to change in income. ΔC/ΔY

→ Induced investment: Ratio of change in saving to change in income. ΔS/ΔY

→ Marginal Propensity to Consume (MPC): Marginal Propensity to Save (MPS): ratio of change in income to change in investment. ΔY/ ΔI

→ Multiplier: External factors which are real and measurable.

→ Objective Factors Subjective Factors: Internal factors related to Psychological feeling.

→ Super Multiplier: The combined effect of interaction of multiplier and accelerator.

Samacheer Kalvi 12th Economics Notes