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.