Skip to main content

Land utilisation

  LAND UTILIZATION  Land is a scarce resource, whose supply is fixed for all practical purposes. At the same time, the demand for land for various competing purposes is continuously increasing with the increase in human population and economic growth.Land use pattern at any given time is determined by several factors including size of human and livestock population, the demand pattern, the technology in use, the cultural traditions, the location and capability of land, institutional factors like ownership pattern and rights scale regulation. Major Types of Land Utilization in India : As in all other countries, land in India is put to various uses. The utilization of land depends upon physical factors like topography, soil and climate as well as upon human factors such as the density of population, duration of occupation of the area,land tenure and technical levels of the people.There are spatial and temporal difference in land utilization due to the continued interplay of phys...
Post a Comment

Foreign exchange rate

FOREIGN EXCHANGE RATE

Foreign exchange rate refers to the rate at which one unit of currency of country can be exchanged for number of units of currency another country. It is the price paid in domestic currency in order to get one unit of foreign currency.
Thus,it expresses the ratio of exchange between currencies of two countries . It is also refer to as external value of the currency.

System of exchange rate
There are two systems of exchange rate:
a)Fixed exchange rate system
b) Flexible exchange rate system

Fixed exchange rate system refers to rate of exchange as fixed by the government. It has two important variants , historically.
1)Gold standard system of exchange rate
b)Bretton woods system of exchange rate

Gold standard system 
According to this system of exchange rate,gold was taken as common unit of parity between currencies of different countries in circulation. Each country was to define value it's currency in terms of gold. Thus,value of one currency in terms of other currency was fixed considering gold value of each currency. This system is also known as Mint Par value of exchange rate.

Bretton woods system
According to this system of exchange rate,even when it was a fixed system ,it still allowed some adjustments. It was also called as adjustable peg system of exchange rate. According to this, different currencies were pegged to one currency that is US dollar. It was assigned gold value at fixed price. Value of one currency in terms of US dollar ultimately applies value of that currency in terms of gold.


Flexible exchange rate
Flexible exchange rate is that rate which is determined by the demand for and supply of different currencies in the foreign exchange market. In other words, it is determined by market forces ,like price of any other commodity. The market where foreign currencies are demanded and supplied is called foreign exchange market or international Money market.
The exchange rate at which demand for foreign currency is equal to its supply is called Par rate of exchange and it constitutes the Normal or equilibrium rate.
It is flexible rate because it tends to change in accordance with changes in supply and demand conditions in international money Market.

Comments

Post a Comment

Popular posts from this blog

CONCEPT OF ECONOMICS

ECONOMY Economy refers to a system of a particular area that shows how people of the concerned area earn money. It shows the nature of all the economic activities in that area.  ECONOMICS Economics has been derived from Greek words i.e "Oekos" and "nomos" .The former means a house and the latter means to manage . By combining the both it means managing a houshold. It refers to the study of how society choose to enjoy scarce resources that have alternatives uses. In other words, it is a social science that focuses on management of scarce resources in such a manner that both individual and society can attain maximum benefit. ECONOMIC PROBLEM It is the problem of choice or problem of allocation of scarce resources to their best alternative uses.  It mainly arises out of the given two facts: a) Resources are scarce . b)Resources are unlimited and have alternative uses.  ECONOMIC ACTIVITIES These are those activities which are related to how one can make use of scarce re...
Post a Comment
Read more

COMPONENTS AND TYPES OF ECONOMICS

COMPONENTS OF ECONOMICS a) Consumption : The study of consumption and consumer behaviour relates to the study of consumer where he has to allocate his means (income) on the purchase of goods and services so that his satisfaction can be maximised. b) Production : The study of production or producer behaviour relates to the study of producer where he has to choose such combinations of diferent inputs within given price which are least expensive so that he is able to maximise his cost of production . Also , how he choose to produce those goods and services within given prices ,the production of which offers him maximum revenue, so that his profit can be maximised c) Distribution :The study of distribution relates to study of how income is distributed among those who are the agents of production. Here, the agents of production refers to the owners of factors of production. There are 4 factors of production : 1) Land   - The income is distributed to the owners of land(used in product...
Post a Comment
Read more

Investment Multiplier

INVESTMENT MULTIPLIER The number of times by which the increase in ∆Y exceeds the increase in investment is called as Investment Multiplier.  Investment Multiplier or output multiplier refers to the number of times by which the increase in output/income ∆Y exceeds the increase in investment ∆I. It is measures as the ratio between change in output /income and change in investment.                                      k = ∆Y / ∆I Where k is the multiplier. Relationship between Multiplier and Marginal propensity to consume (MPC) There is direct relationship between Multiplier and MPC . Higher the value of MPC ,higher the multiplier .                   K =1 / 1- MpC This is because of the given reasons : a)Additional investment means additional expenditure in the economy, additional expenditure means additional income . b) Higher the value of MPC ,...
Post a Comment
Read more