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

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