Category: Samacheer Kalvi Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 25 International Business Notes

→ International trade has become inevitable after the second world war since no country remains self sufficient in terms of all natural resources available therein.

→ Countries across the world are endowed with natural resources of various kinds.

→ Today we live in a world where the obstacles to exchange of the goods and technology have been substantially reduced.

→ The contemporary world is called as‘global village’.

→ Today business is growing globally and the need for profit is pushing a large number of business firms into world markets beyond their historical and traditional boundaries.

→ ‘International business denotes all those business activities which take place beyond the geographical limits of the country.

→ Roger-Bennet defines, International business involves commercial activities that cross national frontiers.

→ According to John D. Daniels and Lee H. Radebaugh, International business is all business transactions -private and governmental- that involve two or more countries.

→ A Joint venture is a business agreement wherein parties agree to develop a new entity and assets subscribing to equity shares and thereby exercising control over enterprise and consequently sharing revenues, expenses and the assets.

→ FDI means investment made by a company or individual in one country in the business , interest in another country in the form of either establishing new business operations or acquiring business assets in the other country.

→ Production cost varies significantly among the countries due to difference in socio-economic, geographical, demographical, technical and political environments prevailing therein.

→ Consumers are relatively heterogeneous in nature in terms of culture, behavior, taste, preferences, legal system, customs and practices, etc. prevailing across the countries.

→ The risks involved in international business are more due to distance, difference in socio-economic and political conditions, change in foreign exchanges value, etc

→ On the basis of sale and purchase of goods and services, international trade can be divided into three kinds. They are export trade, import trade and entrepot trade.

→ When the firm of country sells goods and services to a firm of another country it is called export trade.

→ When the business firm of a country purchases of goods from the firm of another country it is called import trade.

→ When the firm of country imports goods for the purpose of exporting the same goods to the firms of some other country with or without making any change in the goods meant for export it is known as entrepot trade.

→ Countries across the world differ significantly in terms of natural resources, capital equipment, manpower, technology and land and so on.

→- International business operates on a simple principle what your country can produce more efficiently and trade the surplus production with other countries, to procure what they can produce more efficiently.

→ On account of international business , the citizens of the country can buy more varieties of goods and services which cannot be produced cost effectively within the home country.

→ International business helps to stabilize the prices of various commodities which are fluctuating on a daily basis in the world market.

→ International business enables the firms across the country to sell their goods and services on a large scale in the international market.

→ International business makes countries across the world become inter-dependent while they ‘ are independent in their functioning.

→ International trade is more likely to make the country too much dependent on imports from foreign countries.

→ International business may create economic dependence among the countries which may threaten their political independence.

→ Acute competition for exports may lead to rivalry among the nations.

→ International business may result in invasion of country’s culture.

Samacheer Kalvi 11th Commerce Notes

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

→ Keynes challenged the classical economic theory regarding the merits of state intervention in markets and led to widespread shift in both economic theory and government policies worldwide in the post World War II period.

→ Full employment refers to a situation in which every able bodied person who is willing to work at the prevailing wage rate, is employed.

→ Every economy in the world aims at attaining the level of full employment equilibrium where all its available resources are fully and efficiently employed to achieve maximum level of output.

→ Unemployment is problem faced when there are people, who are willing to work and able to work but cannot find suitable jobs.

→ In developing countries like India, the nature of unemployment is different from that of developed countries.

→ Full employment: Persons who are willing to work and able to work must have employment or a job.

→ Unemployment: when there are people, who are willing to work and able to work but cannot find suitable jobs.

→ Disguised unemployment: It is found in which when more people are doing work than actually required.

→ Under employment: Resources (e.g. Labour) are not fully utilized in production.

→ Effective demand: The amount of money which entrepreneurs expect to get by the output product.

→ Aggregate demand: The amount that households, firms, the governments and the foreign purchasers would like to spend on domestic output.

→ Aggregate supply: The value of total output of goods and services produced in an economy in a year.

→ Marginal Propensity to Consume: The additional consumption due to an additional unit of income.

→ Marginal Efficiency of Capital: The expected rate of return over costs of a new capital good.

→ Money supply: The total stock of money circulating in an economy.

Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 26 Export and Import Procedures Notes

→ Exports have attained greater importance in the contemporary world.

→ Developing countries like India, Bangladesh, South Korea and so on require substantial amount of foreign exchange in order to acquire machineries, equipment, raw materials, petroleum products, mineral resources, technical know-how, managerial talents and so on for their faster economic development.

→ Export and Import Bank which is one of the specialized financial institutions wholly owned by Government of India was set up in the year 1982 for financing, facilitating and promoting foreign trade of India.

→ Commercial banks provide financial assistance in two ways, namely, pre-shipment financial #assistance and post-shipment financial assistance.

→ Pre-Shipment Financial Assistance is the type of assistance given to enable exporters to purchase raw materials process them and create finished goods for the purpose of export.

→ Post-shipment financial assistance is an assistance granted in the form of advances on the basis of bills of exchange and shipping documents drawn under letters of credit.

→ An exporter has to fulfill the formalities given below to export the goods out of the country.

→ Exporter has to apply in Ayaat Niryatt Form 2A (ANF2A) to the Regional Authority of the Director General of Foreign Trade (DGFT) in the region where the registered office of the company is located.

→ An Exporter is required to obtain RCMC from Export Promotion Councils/Commodity Board/Development Authority in order to avail himself/herself of export incentives, concessions, and other facilities offered by Government.

→ Exporters steps into manufacturing and procuring of goods required by the importer.

→ Import regulation of foreign countries may require that all this import consignments must accompany a certificate of origin.

→ The exporter will send the goods over to port town by rail or by truck and endorse the Railway Receipt (R/R) or Lorry Receipt(L/R) to forwarding agent’s favour with necessary instructions.

→ A charter party is a formal agreement between ship owner and the exporter under which exporter hires an entire ship or a major part of ship either for a particular voyage or for a specific time period when the shipping is heavy.

→ There are three types of shipping bills for three different categories of goods namely, dutiable goods, duty-free goods and duty draw-back goods.

→ Mate’s Receipt is the document issued by the captain of the ship acknowledging the receipt of goods on board by him to the port of specified destination.

→ Bill of Lading, refers to a document signed by ship owner or to his agent mentioning that goods specified have been received and it would be delivered to the importer or his agent at the port of destination if good condition subject to terms and conditions mentioned therein.

→ The exporter prepares a commercial invoice in respect of the goods shipped in triplicate according to the terms and conditions agreed between the exporter and the importer.

→ Commission Agent is an international agent who is paid a certain percentage of commission for the order booked by him abroad.

→ Export Trading House has been established to increase the export, strengthen the global market, capacity and get necessary facilities for increasing export performance of our country.

→ Import trade refers to purchasing goods and service from a foreign country.

→ Consumers are able to use a wide variety of goods like cell phone, car, laptop, television, audio system, washing machine, perfume, soaps, etc., manufactured in foreign countries and enhance their standard of living through import trade.

→ During famine, earthquake, flood draught, tsunami, abnormal price-increase situations and so on food grains, vegetables and other essential commodities are imported from foreign countries and bad situation arising from the above situations are thus overcome.

→ Importer has to secure Import and Export Code (IEC) from the Director General of Foreign Trade or its Regional Authority.

→ Bill of Entry is prepared in triplicate in order to pay custom duty.

→ Clearing Agent is specialised in clearing the goods from the port of discharge destination , and transport it over to the importer.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 2 National Income Notes

→ The national income of a country describes the economic performance or production performance of a country.

→ Economists, planners, government, businessmen and international agencies (IMF, World Bank,, etc.,) use national income data and analyses them for various purposes.

→ National income data help in measuring changes in the standard of living over time and also enable us to compare standard of living of different countries.

→ Level of development of a country is also measured by using national income figures.

→ Capital sector: It includes saving and investment activities.

→ Disposable income: It is the sum of the consumption and saving of individuals after the payment of income tax.

→ GNP: Total money value of final goods and services produced in a country during a particular year (one year) including depreciation and net exports.

→ NNP at Factor cost:The total of income payment made to factors of production.

→ NNP: Total money value of final goods and services produced in a country during a particular year (one year) excluding depreciation including net exports.

→ Per capita income: Annual average income of a person.

→ Personal Income: Total income received by the individuals of a country before payment of direct taxes.

→ Social Accounts: The accounts of national income considering the social cost generated by economic activities.

→ Transfer payments: Government makes payments in the form of pensions unemployment allowance, subsides, etc.

→ Unpaid services: Rendering useful services like preparation of meals, washing, cleaning, bringing up children, services to their friends and relatives without payment.

Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 12th Economics Notes Chapter 1 Introduction to Macro Economics Notes

→ Macroeconomics studies the behavior and performance of an economy as a whole.

→ It covers the functioning, performance and growth of an economy.

→ It examines the macro aspects such as employment, national income, inflation, business cycle, poverty, inequality, disparity, investment and saving, capital formation, infrastructure development, banking, public finance, international trade, balance of trade and balance of payments, exchange rate and economic growth.

→ Economic models based on economic variables are useful in understanding an economy.

→ Circular Flow Models provide a base to understand the functioning of a macro economy.

→ An economy could be classified on the basis of economic systems such as capitalistic economy, socialistic economy and mixed economy.

→ However, nowadays it is difficult to find 100 percent capitalist system, socialistic system or perfectly mixed economy.

→ Capitalism: The system where the means of production are privately owned and market determines the economic activities.

→ Circular Flow: It shows flows of income, goods and services and factors of production between economic agents such as firms, households, government and nations.

→ Economic Model: It is an explanation of how the economy, or part of the economy, works.

→ Economic System: The manner in which individuals and institutions are connected together to carry out economic activities in a particular area.

→ Flow: Variables measured over a period of time (Dynamic).

→ Globalism: An economic system where the economic activities of a nation are inter connected and inter dependent on each other nation.

→ Macroeconomics: The branch of economics that studies the behavior and performance of an economy as a whole.

→ Mixedism: An ideology that mixes or combines the principles of Capitalism (Private Role) and Socialism (Nation Role) in an economy.

→ Socialism: A way of organizing a society in which major economic activities are owned and controlled by the government rather than by individual people and companies.

→ Stock: A quantity of a commodity that is constant at a point of time (Static).

Samacheer Kalvi 12th Economics Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 27 Facilitators of International Business Notes

→ International business involved complex issues among various countries way back in 1950’s.

→ The World Trade Organisation (WTO) was established on 1st January 1995.

→ WTO has 164 member countries as on 29th July 2016.

→ WTO is a forum for negotiation and formalization of trade agreement among the member countries.

→ WTO supervises the operation of agreement relating to General Agreement on Tariffs and Trade(GATT) and Trade-Related Intellectual Properties Rights (TRIPS).

→ WTO is promoting international peace and creating a conducive environment for conducting international trade.

→ WTO provides a platform for member countries to establish trade links with one another.

→ WTO is committed to protecting free trade. It has framed rules on subsidies and dumping.

→ WTO encourages import from certain countries which produce the product on a larger scale at the cost of environment.

→ WTO is criticized for promoting the domination of multinational companies which are feared to eliminate local enterprises from business world altogether.

→ WTO defends trade related intellectual property rights which allow the firm to protect the patent and copy right.

→ International Bank for Reconstruction and Development is commonly known as World Bank.

→ International Monetary fund (IMF) is an international organization headquartered in Washington DC.

→ IMF was established in 27th December 1945 on the recommendation of the Bretton Wood Conference.

→ IMF promotes economic stability and global growth by encouraging countries adopt sound economic and financial policies.

→ International Financial Corporation (IFC) is an international financial institution that offers advisory services to build up private sector in developing countries.

→ ICSID is an autonomous institution setup in order to provide a forum for conciliation and arbitration of international dispute, It was setup in 1966.

→. India has got a lot of financial assistance from IMF to solve the economic crisis arising from natural calamities like, floods, famine, earthquake, aggressions of Chinese and Pakistan etc.

→ South Asian Association for Regional Co-operation is the regional inter governmental organization and geo-political union of nations in South Asia.

→ At the top SAARC is represented by the heads of member nations. ‘

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 28 Balance of Trade and Balance of Payments Notes

→ Balance of trade and balance of payment are important aspects in international trade.

→ Balance of payment refers to a systematic record of all economic transactions between the residents of one country and the residents of foreign countries during a particular period of time.

→ Balance of payment is the principal tool for the analyzing the monetary position of international trade of a country just like Receipt and Payment account of enterprise revealing the net effect of cash movements during in an enterprise to a particular period.

→ A Balance of Payment surplus indicates that country^ exports are more than its imports and its government and residents are savers.

→ According to International Monetary Fund, “ The balance of payments for given period is a’systematic records of all economic transactions taken place during the period between residents of the reporting countries.” .

→ In the words of Domini Salvatore “The Balance of payment is a summary statement in which principle all the records of the resident of a nation with the resident of all other nations are recorded during a particular period of time, usually a calendar year.”

. → BOP shows a favourable or surplus position when the total receipt’s from foreign countries exceed the total payment to foreign countries.

→ Balance of trade denotes the difference between the value of import and the value of export during a year.

→ Private capital consists of foreign investments, long term loan and foreign currency deposits.

→ Banking capital includes movement into external financial asset and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 29 Elements of Contract Notes

→ Law means a ‘set of rules’ which governs our behaviour and relating in a civilized society.

→ The English common law is the base for the development of Indian Contract Act 1872.

→ As per the Indian Contract Act, 1872, a “contract” is an agreement enforceable by law.

→ When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other person either to such act or abstinence, he is said to make a proposal.

→ When the person to whom the proposal is made, signifies his assent thereto , the proposal is said to be accepted.

→ Every promise and set of promises forming consideration for each other is an agreement. In short, Agreement = Offer + Acceptance.

→ When at the desire of the promisor, the promisee or any other person has done or abstained from doing something or does or abstains from doing something or promises to do or abstain from ‘ doing something, such act or abstinence or promise is called a consideration for the promise.

→ Consent means agreeing upon same thing in the same sense at the same time.

→ The agreement should be clear to the parities of the agreement.

→ The agreement should be such that it should be capable, of being enforced by law.

→ An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract.

→ A contract is said to be tacit when it has to be inferred from the conduct of the parties.

→ A contract in which both the parties are yet to fulfil their obligations, it is said to be an executory contract.

→ A unilateral contract is a one sided contract in which only one party has performed his promise or obligation, the other party has to perform his promise or obligation.

→ A contract in which both the parties commit to perform their respective promises is called a bilateral contract.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 31 Discharge and Breach of a Contract Notes

→ Discharge of contract implies termination of the contractual relationship between the parties.

→ Different modes of discharge of contract have been provided under different sections of the Act.

→ Agreement between the parties comes to an end by mutually agreeing for it.

→ Express consent may be given at the time of formation of the contract or subsequent to its formation.

→ A contract may be discharged if its performance becomes impossible.

→ According to the Limitation Act, 1963 a contract must be performed within a specified time.

→ If the contracts depend on the personal skill or ability, then such contract may be discharged on the death of the promisor.

→ In case of breach of contract by one party, then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

→ When it is probable that compensation in money cannot be received for the non- performance of the act agreed to be done.

→ The contract made by a company ultra-vires of its Memorandum of Association

→ Injunction is an order passed by a competent court restraining a person from doing some act.

→ Injunction can be defined as a mode of securing the specific performance of the negative terms of a contract.

→ The meaning of the phrase quantum merit is‘as much’as earned’.

→ The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution.

Samacheer Kalvi 11th Commerce Notes

Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 17 Social Responsibility of Business and Business Ethics Notes

→ A business entity carries out economic activities on a regular basis to earn profit.

→ “Social Responsibility refers to the obligation to pursue those policies to make those decisions or to follow those lines of action which are desirable in terms of objectives and values of our society.” -Howard R.

→ “Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony”. – Peter F. Drucker

→ Business is a creation of society and uses the resources of society.

→ A business can improve its image in public by assuming social obligations.

→ A business enterprise which accepts and discharges social obligations enjoys greater freedom.

→ Mahatma Gandhi suggested that “those who own money or property should hold and use it in trust for society.”

→ Business organisations and their managers have proved their competence and leadership in solving economic problems.

→ Professional managers are required to display a keen social sensitivity and serve the society as a whole.

→ Adoption of social responsibility as an objective will help to improve the public opinion of business.

→ Business organisations possess only economic power and not social power.

→ Tampering it with social responsibility would make the decision-making process quite complex and controversial.

→ A business enterprise is basically an economic entity and, therefore, its primary social responsibility is economic i.e., produce goods and services that society wants and sell them at a profit.

→ Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category.

→ Suppliers are businessmen who supply raw materials and other items required by manufacturers and traders.

Samacheer Kalvi 11th Commerce Notes