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1. Balance of Trade : The value of a country’s exports minus the value of its imports.

Unless specified as the balance of merchandise trade, it normally incorporates trade in services, including earnings (interest, dividends, etc.) on financial assets. 2. Balance of Payments : A list of all of a country’s international transactions for a given time period, usually one year. Payments into the country (receipts) are entered as positive numbers, called credits Payments out of the country (payments) are entered as negative numbers called debits. A single numbers summari!e all of a country’s international transactions" the balance of payments surplus. 3. MFN (Most Favoured Nation) : The principle, fundamental to the #ATT, of treating imports from a country on the same basis as that given to the most favoured other nation. That is, and $ith some exceptions, every country gets the lo$est tariff that any country gets, and reductions in tariffs to one country are provided also to others. 4. Balanced Bud et : A government budget surplus that is !ero, thus $ith net tax revenue e%ualing expenditure. A balanced budget changes in policy or behavior is one $hich a component of the government budget, usually taxes, is ad&usted as necessary to maintain a balanced budget. !. Balanced "ro#t$ of an %conomy : #ro$th of an economy in $hich all aspects of it, especially factors of production, gro$ at the same rate. &. Ban' (ate : The interest rate charges by a central ban' to commercial ban's for very short term loans. ). (e*o (ate : (henever the ban's have any shortage of funds they can borro$ it form )*+. )epo rate is the rate at $hich commercial ban's borro$s rupees from )*+. A reduction in the repo rate $ill help ban's to get money at cheaper rate. (hen the repo rate increases borro$ing form )*+ becomes more expensive. +. (everse (e*o (ate : )everse )epo rate is the rate at $hich )*+ borro$s money from commercial ban's. *an's are al$ays happy to lend money to )*+ since their money is in the safe hands $ith a good interest. An increase in reverse repo rate can cause the ban's to transfer more funds to )*+ due to this attractive interest rates. ,. -(( (-as$ (everse (atio) : ,)) is the amount of funds that the ban's have to 'eep $ith )*+. +f )*+ increases ,)), the available amount $ith the ban's comes do$n. )*+ is using this method (increase of ,))), to drain out the excessive money from the ban's.

) is the amount a commercial ban's needs to maintain in the form of cash.) rate the money supply in the system can be controlled effectively. 11. The value of -3) is based on the portfolio of $idely used countries and they are maintained as accounting entries and not as hard currency or physical assets li'e #old . 2irect Ta3 : A direct tax is that $hich is paid directly by someone to taxing authority.1.)" -..) rates. -o this is the amount of borro$ed funds re%uire by the government to meet its expenditures completely.) is used to control inflation and propel gro$th. Through -. 13. -ales Tax. )*+ can increase or decrease ban' credit expansion. Fiscal 2eficit : A deficit in the government budget of a country and represents the excess of expenditure over income. or govt. 12. 2at. bonds. -. /2( (/*ecial 2ra#in (i $ts) : -3) are ne$ form of +nternational reserve assets. *y changing -. 75/T(5 6ccount : A 2ostro account is maintained by a foreign ban' in +ndia $ith their corresponding ban'. 1xcise Tax. 4ndirect Ta3 : This type of tax is not paid by someone to the authorities and it is actually passed on to the other in the form of increased cost.). created by the +nternational 0onetary 4und in 5678. /eed of -. +ncome tax and property tax are an examples of direct tax. 14. the )*+ can ensure the solvency of a commercial ban's. 1ntertainment tax are indirect taxes. Also through -.) rate is determined and maintained by )*+ in order to control the expansion of the ban' credit.)" (ith the -. 0ain use of -. They are not shifted to somebody else. They are levied on goods and services produced or purchased. /0( (/tatutory 0i1uidity (atio) : -. approved securities (*onds) before providing credit to its customers. or gold. )*+ compels the commercial ban's to invest in the government securities li'e govt.). 1!. 1&. N5/T(5 6ccount : A /ostro account is maintained by an +ndian *an' in the foreign countries. +t is also helpful to control the expansion of the *an' credits.