Indian Economy Questions

The standard deduction of Rs. 40,000 is seek to provide relief to salaried tax payers in the Budget proposals in place of the present exemption allowed for transport allowance and reimbursement of miscellaneous medical expenses.

A command economy types of government decide which goods would be produced without any interference of the public.

Command economy ran in Germany during the rule of Adolf Hitler. 

A command economy tends to exist under a socialist government that provides a lot of regulation.

Monetary policy is the process by which the monetary authority of a country, typically the central bank or currency board, controls either the cost of very short-term borrowing or the monetary base, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

The basic objective of monetary policy is to assist the economy in achieving a full-employment, noninflationary level of total output.

Cause-effect chain: Changes in the money supply affect interest rates, which affect investment spending and therefore aggregate demand.

Laissez-faire is simply a way to describe a government's hands-off approach to economic policies. This approach was particularly prevalent in the United States at the turn of the 20th century, which led to numerous issues within American manufacturing.

There are many outcomes of laissez-faire economic policies. Some of the outcomes of laissez-faire economics were:

* Businesses pay workers low.

* Pollution of air and water.

* Poverty traps that cannot be escaped through free choice. 

* General glut that results from overproduction or underconsumption

* Monopoly power that emerges naturally in the market and allows businesses to exploit consumers. 

* Exploitation of the working class that pushes wages down to subsistence and compels laborers to work in harsh and unsafe conditions. 

* External economies that generate situations where desirable goods are underproduced on the market, and undesirable goods are overproduced on the market. 

* Public goods that are not supplied by the market due to free-rider problems.

The basic concept in economics is that all resources are limited.