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Define the following term:
Fiscal deficit
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Explain how indirect taxes can be made progressive.
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Citing reasons state the superiority of Progressive tax over regressive tax.
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Citing reasons state the superiority of Fostering civic consciousness by direct tax over the same by indirect tax.
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Identify which of the following Statement is true?
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Deposits made by the people from their own resources are called ______.
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If legal reserve ratio is 20%, the value of money multiplier would be ______.
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The ratio of total deposits that a commercial bank has to keep with Reserve Bank of India is called ______.
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Credit money is increased when CRR:
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Suppose in an economy, the initial deposit of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crore. Then the value of reserve requirements would be ______.
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Match the following and select the correct option.
| Column A | Column B | ||
| (i) | A deposit created by a customer | A. | Term deposit |
| (ii) | A deposit created by bank when loan is granted | B. | Demand deposits |
| (iii) | Deposits payable by bank on demand | C. | Initial deposit |
| (iv) | Deposits the amount of which can be withdrawn only after a fixed period of time | D. | Secondary deposit |
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Which of these banks formulates the credit control tools?
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To ensure that the citizens of the country have faith in the currency, the currency is issued by:
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Match the following:
| Column I | Column II | ||
| A. | Primary deposits | (i) | Payable on demand |
| B. | Derivative deposits | (ii) | Deposits for a fixed period of time |
| C. | Demand deposits | (iii) | Cash deposits of people |
| D. | Term deposits | (iv) | Deposits created by banks (or loan deposits) |
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Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Credit Creation comes to an end when total cash reserves become equal to the initial deposits.
Reason (R): The value of money multiplier is determined by Legal Reserve Ratio (LRR).
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Match the following:
| Column I | Column II | ||
| A. | Formula of Money Multiplier | (i) | Inverse |
| B. | Money multiplier = 4 | (ii) | Money multiplier = 10 |
| C. | Relationship between LRR and money multiplier | (iii) | LRR = 0.25 |
| D. | LRR = 0.1 | (iv) | `1/"LRR"` |
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What is meant by credit creation?
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State the advantage of a credit card over currency notes.
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Explain briefly the process of credit creation by commercial banks.
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What is meant by primary deposits?
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