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Subsidies are monetary assistance from the government to various industries, primarily to priority sectors like agriculture and allied activities.

Boon:

• Subsidies to small scale industries, especially export-oriented industries, are much-needed assistance since these industries face a financial crunch ( difficulty) that can be resolved by subsidy. Moreover, these industries are generally labour intensive and provide employment opportunities. The provision of subsidies to such industries accelerates the output and employment options and generates sectoral growth leading to economic growth from the grass-root level.
• Subsidies to agriculture and allied activities like fishing, animal husbandry, and so on provide the much-required finance for farmers and other artisans to buy inputs like seeds, fertilizers, etc. It helps reduce the financial burden, especially for farmers, since agricultural production is a gamble-- at the hands of nature. In case of a flood or drought, the farmers become financially vulnerable. At such times, a subsidy acts as a backbone and provides support for them to resume their cultivation.

Bane:

• However, subsidies are a drain on the treasury. As the economy grows and governments undertake more and more activities in the general public's interest, subsidies become a burden for the governments. Especially in developing countries like ours where the tax revenue is low and hence public receipts are down. The expenditure on subsidies, called a transfer payment, is a vast recurring burden for the government preventing it from actively engaging in other developmental activities. 
• Another more relevant reason is that the beneficiaries of subsidies continue to enjoy the benefits without expanding their scale of production or diversifying their productive activities to non-subsidy areas of operation. It reduces their capacity to grow and significantly hampers sectoral; development.

Money and Banking

Class XII Macro Economics

Topic A

• Barter Exchange

           Exchange of ‘goods for goods’ is called barter exchange

           Example :  If a person A sells wheat to person B in exchange for rice, there is only exchange of goods for goods which is know as Barter Exchange.

• Definition of Money.

Anything that is generally acceptable as a medium of exchange and at the same time act as a measure of value & store of value.

Meaning of Money Supply: Total money in circulation in an economy at a particular point of time.                                                                                             (1m)

• It includes money of public only
• It excludes money of Govt. and Central Bank
• It is a stock concept

Components of money supply ( 3m)

1. Currency held by the public

• Currency notes are issued by the Reserve Bank of India (RBI) which is the monetary Authority in India.
• One rupee notes and coins are issued by the ministry of finance, govt. of India.
• Currency notes & coins are called fiat money.
• Currency notes & coins are also called legal tenders as they cannot be refused by any citizen of the country for settlement of any Economic Transaction.

2. (Net) Demand Deposits by Commercial Banks

• Demand deposits are the deposits which can be withdrawn from Banks on demand by writing cheques or through ATM / Debit card example  current account deposits and saving account deposits.
• Only deposits of the public held by commercial banks are included in money supply.
• Inter-Bank Deposits (deposits which a commercial bank holds in other commercial banks) are not included in money supply.

  Demand Deposits : Deposits made in a commercial Bank which can be withdrawn at any point of time by cheque/ATM/Debit card. They carry very less or no rate of Interest. Example Saving Bank Account or Current Account.   

Time Deposits : Deposits made in a commercial bank which can be withdrawn only after a certain time period. They carry high Rate of Interest which varies with time period. They cannot be withdrawn by cheque/ATM/ Debit Card.

Money and Banking

Class XII Macro Economics

Topic A

• Barter Exchange: Exchange of ‘goods for goods’ is called barter exchange. Example: If person A sells wheat to person B in exchange for rice, there is only an exchange of goods for goods known as the Barter Exchange.
• Definition of Money. Anything that is generally accepted as a medium of exchange and at the same time act as a measure of value & store of value.

Meaning of Money Supply: Total money in circulation in an economy at a particular point in time. (1m)

• It includes money of public only
• It excludes money of Govt. and Central Bank
• It is a stock concept

Components of money supply ( 3m)

Currency held by the public

• Currency notes are issued by the Reserve Bank of India (RBI), the monetary authority in India.
• One rupee notes and coins are issued by the ministry of finance, Govt. of India.
• Currency notes & coins are called fiat money.
• Currency notes & coins are also called legal tenders as they cannot be refused by any citizen of the country for settlement of any Economic Transaction.

(Net) Demand Deposits by Commercial Banks

• Demand deposits can be withdrawn from Banks on demand by writing cheques or ATM / Debit card example, current account deposits and saving account deposits.
• Only deposits of the public held by commercial banks are included in the money supply.
• Inter-Bank Deposits (deposits that a commercial bank holds in other commercial banks) are not included in the money supply.

Demand Deposits: Deposits made in a commercial Bank can be withdrawn at any point of time by cheque/ATM/Debit card. They carry very less or no rate of interest: Example Saving Bank Account or Current Account.

Time Deposits: Deposits made in a commercial bank can be withdrawn only after a certain period. They carry a high rate of interest which varies with the period. Cheque/ATM/ Debit Card cannot withdraw them.

• What is national income? 
• What do you mean by GDP?
• What do you mean by aggregate demand? 
• What is fiscal deficit? 
• What is demonetization? And how it affect our GDP 

AND MANY MORE IMPORTANT QUESTION TO SCORE GOOD IN CBSE BOARD 12th 2020 

GOOD LUCK TO ALL THE STUDENTS APPEARING FOR THE BOARD 202😃😃😃😃

Comment for the answers of above question and query I am here for you I'll appreciate you comment feel free to comment

Due to admission of a new partner, old partners have to share their part in their value of goodwill created till date. Hence they (old) partners wants contribution from new partner for their compromise in the value of goodwill for new partner. New partner would compensate to old partners in their sacrificing ratio.