Economy

Transfer pricing refers to the rules and methods for pricing transactions within and between enterprises under common ownership or control. Transfer pricing can be exploited for tax avoidance and tax evasion through Base erosion and profit shifting strategies. Base erosion and profit shifting refer to corporate tax planning strategies used by multinationals to “shift” profits … Read more

Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynesian Economics focuses on using active government policy to manage aggregate demand in order to address or prevent economic recessions. Thus it focuses on demand-side solutions to recessionary periods. Lowering interest rates is … Read more

The Washington Consensus is a set of ten free market economic policy prescriptions considered to constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington, D.C. – based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. The prescriptions encompassed policies in such areas as … Read more

Operation Twist is a move in which a central bank decides to simultaneously buy long-dated securities while selling short-term securities. This is the first time RBI has undertaken such an unconventional policy measure with the aim of flattening the yield curve by lowering longer-term rates to boost lending and growth. Operation Twist normally leads to … Read more

PPIs are instruments that facilitate the purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holders by cash, by debit to a bank account, or by credit card. The pre-paid instruments can be … Read more

Accelerating Growth of New India’s Innovations or AGNIi is a national initiative under the guidance and support of the Principal Scientific Adviser to the Government of India. It is being handled by Invest India. AGNIi provides a platform for innovators to scale up their market-ready products by creating pathways for licensing, technology transfer and market … Read more

Depository is a place where financial securities are held in dematerialised (DEMAT) i.e. in electronic form. It is responsible for maintenance of ownership records and the facilitation of trading in dematerialized securities. A depository eliminates the risk associated with holding physical securities. Earlier, the buyer would have to keep checking if the shares have been … Read more

Net domestic product (NDP) represents the net book value of all goods and services produced within a nation’s geographic borders over a specified period of time. Net domestic product provides insight into the age or obsolescence of a country’s assets, as well as how much the country has to spend to maintain its current GDP. After all, if the country … Read more

Merger: It is a process wherein two or more companies are combined together to form either a new company or an existing company absorbing the other target companies. Amalgamation: It is a process wherein two or more companies combine to form an entirely new company. Acquisition: It is a process wherein one company purchases most … Read more

When in an economy aggregate demand falls short of aggregate supply at full employment level, i.e. the production is more than the demand, the demand is said to be deficient demand and the gap is called deflationary gap. Causes of the deflationary gap are: Fall in aggregate demand (AD) due to: Fall in exports (global … Read more