Pag

Tax PeN enue

the kovm
Someimes the money olieche c n jaent
to c a x y
ut
Out Expenddu
Revenue is not s u t i a e n taken b
ond N o n - tax loans
ate

needs 4unanaod help.

So, Caovt
ShoTage
Dvech 1ax.
e
and olem eufts
Merits

Merau
L C v i c Condousness

fcono micad
Just and
equ table.

4 tevel o cart/aun dy
natuue
E l a s t i e th
5 Antf- inhlalionay tool

6
DiHec tax
C) Dem e r i l s
i n c o n v e u e n C L .

LenveneAn

)Cost collechbn is high

ax invasion

Arcbttray
6)No_popula

Bude

Wung to wOHk an d sate Save.

)

dtnolech taxes
Meits and demeuts
Mercuts

Convenienca

Lack tax tnvasíon

Souiat point q VieLO,

Just ane equitable

Ant?- inklatronasy toot

 bate
Pogs
Demexiu
Tnuease. In the inequaly

e)
Cost collechon high
untust and in equitabl ,
Lack 0 CVIC Contiousness
tadv eus e
tects the savng and
pu4haunit Capual {otm oo

UNIT-4
RODUCTION ROc.Ess.,CoST
RevE NUE
Ralouonship btuoTR MR AR In poc
Mauet
Pice Unit Sold-
TR AR MR
(Unit
TR
sold
(io+1) = 10 (TR-TRn-s)
2
20
(20+2) 40 20-10) 1o
30
30 3)=Jo
30-20)0
LO
(4o4) 0 :
(uo-30) 10
60 (So s: 10
(s0-40)10

AR: MR

wúts seid.
4 / 22 0 2
Dats
Pay

monopoly
nonopolutie
and mo

IRetodionshép be TR,AR M Rio

( T n T h n -
Compebbon
un4old
CMR
LTR) CAR
oulput
28
28
28 26
24
2 54 24
26
18 22
3 25
100 20

24
5 120

188
23
6
22
54
21 12
68
8 20
180
19
190
JO
Monopois ho

Monopo
AR
MR
R

FK

MR
units Sold.
uns sold.
Sles,
TheHe ade many
sello.
i Thee a singie demand fs elast (
olenand fs 8) The nature
The natuHe cr ane Substaies availab
because theie a e because thee
doelastu
demand.
no subsfwes
aVadable So SO we can change the
change the demand.
we cannot

Less Grap
did M0He gap
 bett
Poge
Low vOMuoble puopoudions diminishing
INh 4he Combhahon diufshing ,MOMMaugno
ginol ehurns
one n
yauiable tatOu abour
Abd aous ttand) and
inetraluy w
capilal, the mauginal puodULbviy
inoease and a4te a point Jd stats 70 c E

TP
AP TP
Mp

Ae
No. wOtk eus
TMP
stages O phapes
incHeas in uetu ten - n the
irrst stage the aveuage puocduc
and he Maugunal puodudh MP) ineas because AP
a The tixcd jacous (land and capftal) will be so usecl ekedently
thne wOuld be
Maximum iizolion
the tiiec acon
So Ex ample - the aumet hos 3
hectnes and 5o the
and wo l be eu
tvated ehnuentiy mOue numbex o0kes
aMe mpioy ed.

Diminishing rcetuuns In this stage the

aven age puoclut and
Maugnat puodut staets to dimish and sotha staAe is
caled as" Dfminishihg rretuvns
theaume has 3 hecttres land and
h e keeps on emptoy ha
mouenumbeu aR w0ukeMS e tne vaiable tatoe than a t e

theue oue the

Opoin the i ted acok betomes tnaduqafe
to decdine
aveua29 pLOelue and mag inal_puoeluc_stasurs
or dumni nish,_
 Pog

shage_the
na podu ds
Maginal_puo

Neg attve teotuun Inthis dlecunes oA

dùmiinishe
puodutt
toled
becomes hegaive and the hthee
catl ed as
negotive r e r n s :
nd Soh stage k
ha S TO0 muah e
Dndan n the
vauiable
fatton

will pd a sla on h
ain on the
umbu
wOLLkeus aue employed
than t

puoodud
CMP wil xed
ed
e magunal ome
hatos aand in e t u u n
Neoaive,
PRODUCTION FUNCTION
elaltoónshup betne in
n s h y p beween
w
rcek eus to the pur
PAIO duchton_junchdn
nished goocds)
rQW-ma/wal and output
quanily ou the output s going fo be depen dant Vau. ble
The
raw
to
maleuyal 1S g0tn9 beivelebendo
and the input oA the

aiable
Q=fCaibiC,d n,T
Jheue as
Quantity/ outpu
fun chional rrelaionship
, bC, d h. uanities q Vaousnpds that aue
employed
T Technology and the ban) is used to shouo
ha theHechnology wl s1emam
COnstant
wnchaung eol
flk, L)
Wheue o4
GE TOTO Oulput
L Labous quanti
k Copital
Teoz/po j
Pcost
U2Fe
FxedCost - d means
t means the
he ost
cost temauns tixed even uðhen
The puOdLu dion neases temauns
oL olecrreses tou
rent n laun d, inteuest on exaumple.
loan Haken, sal auies pod
the emptoye es etu
() Vouuable cost
his Cost ehanges oubeeHy wth the
in he eve s
puoducuon t mens hange
Uceases when the
the
vauiouble cost will also puodudio)
ViC-aveus a O ex pucA Inieos aand
raLus MauLLU als, Tanspok
chouge4, eeuuct chaug
es
ACOun ung c0st/8xpuct
cost -t) Such cost
he books -aCOunts uecoHcded i
tu) S eolled as
out pocket expundli ture
AU tHpes tixed cost and vaoable 0st aue
kOT Ex inuuded
Rent, inHes Sadany, lages efc
4) Economic Cost
1mplicut Cost -°0) Such cost is not
thebooks QcountS suecoded
t not oleel aSOut poket expendlijude.
u) Oex rent on tand bel ong tng to
hunsel
in teest on capftal ( 5upplied by
hùmselp)
Salaues he the owneu and
wOLkin a a Manag es

)Total cost t means the aal cition lotal Hied cos

Oun ol to tal voui auble cost

Toumula, T = TFC + TVC

Aveage Cost i tceheus to t e total cost quan tuy.

AC_ TC
 Date

to t h e o tcul kec Cost

Aveuage ked cost it keS
Cquant
fomula AFC TEC
iable
otal vaia tos-
rreheus to
Aveuage vaiable Cost - Lt uor
omula AVC TVC
choangein the totoa cOst
itrceews to the
aHQnal cos cwd
into pLodu
aololitional

by an
Avc TVC
Poumula,
To t a l COst

Ou-puF
0

foto20
2

AMC = TCN T C N - 1
Henca,
20 1 0

h e cost t h a t is
inuued On a s h o u
Shou run coSt t
can not be made in
peiod time and the changu

he ixed cost
Guaph 'U'shap
The shout ruun cost cuave s

t1 long run cos i s the or a lou

cost that is incuuec
tixed cos f a
peutod g ime and the changes con be in
Cweuas the vasuable cost

Chaph

The long Tun ost Cuave looks like a serni-irde"0 0

Halk moon
 Date

UNIT-V Poge

ONEY AND BANKIN

uantutative an d
Quclitatve Measuuu
o11C Reseuwe bank
poli
Monef
g india (Credit Contuol
Inoua Credt Conuo Meaoues)
Metho ds oed
contro
Cediu contuol Measmes.

I Quant lative Measutes

Ceeneal MeasuHes) TI Quaitaives Measure

Ban k Rate lBR) (selective Measues)

2 0pen Mauker opeuaion COM0) ) Reguulauon Mangin
3 Cash es esuve kKoud (RR) requements.
Regul ation q consume
tatuttosu iquidity votio (sLR 1ssue Diretives.
Credi

aRahonng oed
ebinet atiors
Ppublicil._
Moual sxas1òn.
Bank Rate (BR Bank rate the uate q in terest ch
bythe contual bank om aged
the
tommeuual banks
Dwuhg inlaion the Contyol bank wu
Qdlete a dea moneey pouy so adopt
will inaease the bank
rate aund theborou0ings wiu beLome (ostl
Duung Derlaton the Cenbial baunk will adopt
a cheoup monetay po uy. sO, wl olecHease the
-
bank rate
and the boo win94 wu become cheap,

2 Open Maxker opesalons (OMO) OMO rreheus to the aulvu

bun and selung 90vt gecuahea by thecanrad bank
n the Open m@uet
291 21

Contyat he
the
want3 to
bank
alhen the cenral maket.
pen
in
Catedlu the gout Sewuies wil be solduwants to expands he
conal
bank
Ma
ed)
klhen h e Hhe open
uom
Secuwolies wl be bought
the govt
to CLATaIn amount
us
CCRR- eRR ree
Cash Rexeve kauo the central
bank by he Commelu
wth
us tha fs
kept
depos
bank as a ueseHVe. Amount a loan
CRR
Deposits
900
0 /%
1000
800
1000 20
CRR Slending Capadity

ralló leads to m e g a n r d t r n
resetve
in the lash
An inoHease
ConadTon o oeclit.
A Decuease in RR leadls to the expansion CHed

statudouy liqueldy Hatio (SLR-SLR reheus to he uquid assds

0.
the om g gold, Cash, and appoved secuudies
hen +he contral bank wants to expaund the
money Supply f will ueduce the SLR anol u the coniad banK
want to lecease the money supply wl inouea se he SLR.

Qualitative Measwes

Reguuotion o Maugn
Kequenents
Asser value
1 lakh
MoMgin 20 ) 20 k
LOon ganttion.
80k
 Date

he agntequiwements
ddumines the loan v
be Santioned he loan value is the
Mauke value ase ond the
cdteen
uaugin Hequre ert
An uhaease in the
Magin
the deuease un the
HequwMement leads To
looan amount tnar s
Sanctnon ecd
2 Reuuauon Consumeu CHedit
Consumesu Cuedu is the 4edF
gven to me consumesus to
buy duuable Congume
ike cas, bikes,
tebevis ions etu, 9o0C_
hthe Consunes Ctedt has to be
than the down paymant noua9ed
wl be deueased and the n umbu
insTallmens will be inueas ed

ssue DiHecavves-The Centtioal bank fssus the

diuetwes
in the0Hm q retwin stotem ents Jike
efe. newspapes, Wnings
Thuough
this àt ë Commun cated that the
ghold be jollowed, guidunes

A RaUioning o ceclu- m his method c eciLing is np0s ed

On the loans and advauntes
paLouol ee by the commeuucd
banks to ensuue that the
money is used a deauable auncd
puodudlive pwposes,

5 Dfaeu Adions- the commeual banks aue at dehault thn

oliee adion can be faken Aauns thum k e htea is gtven
penaly s chauged, the bank can be shutdo uon,

Morral Suaion The Central b ank uwl explain in a p otire

janguage he Commeca banks awe at oeault

 Poge

vawôus s Rinds
Kindso
pubuahes
pubucd The cenioul bank
unancial stodements.
hepouts, annuk statements
nd
health
On
p e o m a n a

the
to autsedose e_ftnanual

aHe aw aHe

pubue So thaF he

bank
* Ohjectives o Centual
the economic
Eh,
q4oo
2 0 pLomote
inlation
0 |To contuo the dulon
and employment.

the levl o po
16 tnuHeas

alk Money is nlha money does

MONEY -Gven by and I induda,
wntveusal acceptabuuy
dey
Concep Money has
notes and vauous Othe fo ums uch a
Coins, euuuenc

Cheques, buls oy excharge erd.

unduons Mone

0 Pumany untions ún Secondauy funduons ) Continget Othert

FuncH&ns tunuons.
Basis
Medium As a Stoue Std.g Kepay me
Measu re Degewwed 7dnse GTedits
Exchange Value value paume vaue Capality
tnoieases Creneyal
Pauodutivity Pwthasen
capita Power d0
Distibuon Lmpans
Sodal Liqul diy
income to capital.

Equalises Mangindd
utity and
Puodudurty
 Dute
Poge
Proxm asy fun
uona.
Mealium xchange
mone Con be ex Moneu has unfveu
sad Gena accP
services can be chang ed
against any commod ty
bought and sold the g00c
Money Money has veuy
vey eas
easuy
il with the helpo
ete
vauous denomin
aluons ke 5 , FiD0, F2000
Measuue Value
ne pluces au
expuesged tn
the
monetauy teuns Money qoocls and sexvices dHe
acLount So, au the ats as a wni
rrecoHds aue main taíned in
monetOsHY unut such
as,
TRums
tupee, clolla, pound efu

Secondoytuntion
StoL value
Mouey he volue thot can
uny touns asef e be
Stoed wn
q. An asset can be
OorvedeslunbO money becase money is Sold and
Hhe mos-
MOneyiC MDn-peuf shable Lquiol asse
an d stobl so u 1s
value. tdeal as stoH
Stou dosuol ereed payment -The
Can be done
veuy eas ly
bououoing and leading -

his means a peuson roukes

a loan in the pyesent
m hen he can
the tuuH a
the loaun in rcepau
moneu has uueveusal accop tan ce.

1) LLansHU o value he puuchasing PouDest Con

be uanstesrsed
Hom one
p}ace tO Onoth es because Money posse8ses
The qualiby _ganeal acaptabi.

Coulingen tun cion

Basis q Croc - These ae Vau Dus pes g Ccedu intuument

Such as cheque, DU ok ex Chaunge et.This means money
a uts as a basts Fo oLdt teation
 s the ost iqu
tU CMese puodududly q.coptial MOue
toaious
puoduchve
a u o c a e d

assehand ar an be
p u o d u d a v i t

tnwease
the
elps to
channels So,his
the
sith tne
help shaxe
Distububon g social hcome 7har aH
gwen the
ueuwad

C a d h _ f a c t a e
. e the n moneta ma
clel umuned

canbe
pALDOlucthon

fauou
Eveuy Consume
puodudivi
v b yand puL and ey
eves
Mauginal w h
Equalizes ully
Mauginal dewit,
equilize puodu wih
uwill Maugunal
equiize
will
Loith {auD
pOdu to each
ae paid
that
neuwands

the

o t h e tatous Mone The repayn

rrepaymen
help U
Replaeaent copauty A Lth the aceupTanc,
9eneua
the tuure Qs i h a s
in
Can be done
capa úty.
Money has the buyung
na Powe wih
CTeneual pwichas done vey easdy
means thebuing a@nd seuing s
This

the help money asser

Capdal - Money the most uquwd
mpads Liquiduy
to
moEyes Such as
be used to 3
and a can

kesps the naoney dn CAsh

A n indwedual
uansecdon motw
auly. a business man
ansadtionSunu
koumo day to day
madeuals, pay wages to abor
reqwnes cash to buy rau

An indvedual business hman kteps

Puecautio n aY wmotive
aeeedent, Sck ness
the Cash t0u emag ecy pwposes tike

eto
 Date
Page

Specatwe Motive Thß means when the

the indLuiducd

Ort business man one

invest the mone tn shaue
Secuth es oebentuus eto

Crtedit Crteation puoess

u asSume that heue ce thsuee Commeuial banks
und Cash ne sevive.

Bank AA
Deposil3 is equal to 2000 Rs.
CRR) 20 / - 4 00

LOan 1600

200 q 2000 f:400

Bank B
Deposits s equal to 600 Rs.

CRR 20 e 3 20

Loan 1280.

20o J600 s a8e 320.

Bnk C
Deposir s equa fo 1280 RS.
2S6
CRR-20oo
LOan
1024

20/o 1 2B0256

tW =1

Forcmula to Deposü multiplieu

CRR

20°0

20
00
 Date
Poge

k x_puYm au deposit
Crtedi cueatec
= X 2000
1000O.