Money:: is a medium of exchange that facilitates the buying and selling of goods and services.

It serves as a unit of account, store of value, and standard of deferred payment. Common forms include cash, bank deposits, and digital
currencies.Inflation:Inflation refers to the rise in the general price level of goods and services over time, reducing the purchasing power of money. Causes of inflation include increased demand (demand-pull inflation), higher production costs
(cost-push inflation), and excessive money supply.Example: If inflation is 5%, a product costing $100 today will cost $105 next year. Deflation:Deflation is the decrease in the general price level of goods and services over time, increasing the
purchasing power of money. It often occurs during economic downturns and can lead to reduced consumer spending and business profits. Example: If deflation is 2%, a product costing $100 today will cost $98 next year.Keynes' Theory of
Employment::John Maynard Keynes, in his book "The General Theory of Employment, Interest, and Money" (1936), challenged classical economic theories and presented his views on employment and income determination. The Keynesian
Theory of Employment emphasizes the role of aggregate demand in determining the level of employment in an economy.” Key Points of Keynes' Theory:”Effective Demand: Employment is determined by effective demand, which is the total
demand for goods and services in the economy.When effective demand increases, employment rises, and when it falls, unemployment increases. Aggregate Demand and Aggregate Supply :Aggregate demand (AD): The total spending by
households, businesses, and the government.Aggregate supply (AS): The total output produced by firms.Full employment occurs when AD equals AS, but in reality, the economy often operates below full employment due to insufficient
AD.Involuntary Unemployment:Keynes argued that unemployment could persist in the economy because wages and prices are not flexible enough to adjust instantly, contrary to classical economics. Role of Government:Keynes advocated for
active government intervention to boost aggregate demand through fiscal policies (e.g., increased public spending, tax cuts).Government spending can stimulate demand and reduce unemployment, especially during a recession. Multiplier
Effect:Increased government spending creates a multiplier effect, where an initial rise in spending leads to greater overall economic output and employment. Rejection of Say’s Law:Keynes rejected the classical notion of Say’s Law ("supply
creates its own demand"), arguing that demand, not supply, drives the economy. Commercial banks are financial institutions that accept deposits, offer loans, and provide various financial services to individuals, businesses, and the
government. Their primary role is to mobilize savings and allocate credit efficiently within the economy. Functions of Commercial Banks::Primary Functions:Banks accept deposits from the public in various forms, such as savings accounts,
current accounts, and fixed deposits.Banks offer loans to individuals, businesses, and industries for various purposes, such as business expansion, housing, and education. Secondary Functions:Acting as agents for customers by providing services
like fund transfers, bill payments, and tax collection.Offering locker facilities, issuing debit/credit cards, and providing foreign exchange services. Other Functions:Generating money in the economy by lending a portion of deposits while keeping a
reserve.Issuing letters of credit, bank guarantees, and discounting bills of exchange.Investing in government bonds and securities

.Process of Credit Creation by Commercial Banks:Credit creation is the process by which banks generate loans using the deposits received from customers, thereby increasing the money supply in the economy. Acceptance of Deposits :Banks
receive deposits from customers. A portion of these deposits is kept as reserves (as per the statutory requirements like CRR) Reserve Requirement:Banks must maintain a certain percentage of deposits with the central bank or as cash reserves.
For example, if the Cash Reserve Ratio (CRR) is 10%, the bank keeps 10% of the deposits as reserves and lends out the remaining 90%. Lending:The bank lends the remaining deposits to borrowers, who use the funds for various purposes.The
loaned amount is deposited back into the banking system as new deposits, starting the process again: The Classical Theory of economics,:: developed by early economists like Adam Smith, David Ricardo, and J.S. Mill, explains how markets
function and determine output, prices, and employment. It is based on the assumption that the economy operates under full employment in the long run due to the self-adjusting nature of markets. Key Features of Classical Theory:Say’s
Law:The central idea of the classical theory is Say’s Law, which states:"Supply creates its own demand."This means that whatever is produced will eventually be consumed, and there will be no general overproduction or unemployment in the
economy.Wage-Price Flexibility:Classical economists believed that wages and prices are perfectly flexible.If there is unemployment, wages will fall, reducing labor costs, and firms will hire more workers, restoring full employment. Full
Employment Assumption:The economy always operates at full employment in the long run.Any unemployment is temporary and results from frictional or voluntary factors, not a lack of demand.Self-Regulating Market:The market economy is
self-correcting and does not require government intervention.Supply and demand automatically bring the economy back to equilibrium. Savings and Investment Equality:Savings and investment are balanced by changes in the interest
rate.Higher savings lower interest rates, encouraging investment, which ensures that resources are fully employed. The Reserve Bank of India (RBI) is the central bank of India, established on April 1, 1935, under the Reserve Bank of India Act,
1934. It plays a crucial role in managing the country’s monetary system and economy. Monetary Policy of RBI-Monetary policy refers to the measures taken by the RBI to control money supply, credit availability, and interest rates to achieve
macroeconomic objectives such as growth, inflation control, and financial stability. Objectives of Monetary Policy:Control Inflation: Maintain price stability in the economy.Promote Growth: Ensure adequate credit flow to productive
sectors.Stabilize Currency: Maintain exchange rate stability and foreign reserves.Employment Generation: Support policies that lead to job creation. Types of Monetary Policy: Expansionary Monetary Policy:Adopted to increase money supply
and boost economic activity.Used during economic slowdowns or recessions.Tools: Reducing interest rates, lowering CRR or SLR, increasing liquidity.Contractionary Monetary Policy:Adopted to reduce money supply and control inflation.Used
when inflation is high and economic overheating occurs.Tools: Increasing interest rates, raising CRR or SLR, reducing liquidity. Importance of RBI’s Monetary Policy:Ensures price stability, which is critical for sustainable economic
growth.Encourages investments by maintaining moderatinterest rates.Controls excessive inflation or deflation.Supports fiscal policies to maintain economic stability.

Internal trade refers to the exchange of goods and services within the boundaries of a single country. It involves the use of a common currency, minimal trade barriers, and uniform laws and regulations. Transportation typically relies on
domestic infrastructure like roads, railways, and local logistics. Since there are no customs duties or tariffs, it is easier to conduct, and risks like political instability or currency fluctuations are minimal. An example of internal trade is the sale of
goods from Mumbai to Delhi.On the other hand, international trade involves the exchange of goods and services between two or more countries. It requires dealing with multiple currencies, customs duties, trade agreements, and international
transportation systems such as shipping and air freight. International trade is subject to cultural and language differences, higher risks (e.g., political instability, exchange rate fluctuations), and requires extensive documentatilike export-import
licenses and customs clearances. An example of international trade is India exporting textiles to the U.S. or importing crude oil from Saudi Arabia. Capital Market Regulation: The Securities and Exchange Board of India (SEBI) is the regulatory
authority for the capital markets in India. Established in 1988 and granted statutory powers in 1992 under the SEBI Act, its primary objective is to protect the interests of investors in securities, promote the development of the capital markets,
and regulate its functioning Key Functions of SEBI:Regulation of Stock Exchanges :SEBI ensures that stock exchanges in India operate in a fair, transparent, and efficient manner. It monitors the trading activities on exchanges like the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE).Investor Protection:SEBI works to protect investors by ensuring that companies and intermediaries comply with fair practices and disclose accurate information. This reduces
fraudulent activities like insider trading and market manipulation. Regulation of Market Intermediaries :SEBI regulates various market participants such as brokers, portfolio managers, mutual funds, and other financial intermediaries to ensure
that they operate within prescribed norms and standards.Promoting Transparency:SEBI enforces stringent disclosure requirements for companies and market participants. This includes timely and accurate financial reporting, so investors can
make informed decisions.Corporate Governance:SEBI ensures that companies listed on Indian stock exchanges adhere to sound corporate governance practices. It mandates the disclosure of financial information, board compositions, and other
significant activities.Control Over Insider Trading :SEBI actively monitors and takes actions against insider trading, ensuring that no one can take unfair advantage of non-public information for personal gain . Important SEBI RegulationsSEBI
(Listing Obligations and Disclosure Requirements) Regulations: These regulations mandate the disclosure of financial statements, governance structures, and business activities by listed companies.‘SEBI (Prohibition of Insider Trading)
Regulations: These regulations define insider trading and impose penalties on individuals who use non-public information for trading securities.

International Bank for Reconstruction and Development (IBRD)The IBRD is part of the World Bank Group, and it focuses on providing loans and financial assistance to middle-income and creditworthy low-income countries. The IBRD’s primary
role is to reduce poverty and promote sustainable development through financing for projects in developing countries Functions of IBRD:Provide Loans:The IBRD lends to governments of middle-income and creditworthy low-income countries
for infrastructure projects, poverty reduction programs, and other developmental activities.The loans provided are usually long-term and at low-interest rates. Financial Advisory Services:It offers financial and technical assistance to help
governments develop effective public policies and economic reforms.Promote Economic Development:’Focuses on promoting infrastructure development (like transportation, energy, education, and health), as well as fostering economic
growth and reducing poverty.Risk Management:The IBRD offers financial products to help countries manage risks related to natural disasters, economic shocks, and environmental challenges. Project Implementation:It helps governments
implement projects, ensuring that funds are effectively used to achieve the targeted goals in sectors like health, education, and infrastructure. International Monetary Fund (IMF)The IMF is an international financial institution that aims to
promote global monetary cooperation, secure financial stability, facilitate international trade, promote high employment, and reduce poverty worldwide Functions of IMF:Surveillance of Global Economies:The IMF monitors the global economy
and the economic policies of member countries to assess financial and economic developments. It provides policy advice to help countries avoid economic crises. Provide Financial Assistance :The IMF offers short-term financial assistance to
countries facing balance of payments crises (i.e., when a country cannot pay for imports or service its debts). The loans are typically provided with conditions that require the borrowing country to implement economic reforms (also known as
conditionality).It primarily provides Stand-By Arrangements (SBAs) and Extended Fund Facility (EFF).Capacity Development and Technical Assistance :The IMF provides technical assistance and policy advice to help countries improve their
economic management. This includes support on areas like tax policy, public finance management, and central banking. Promote Exchange Rate Stability :The IMF works to maintain stable exchange rates by encouraging countries to avoid
competitive devaluations and trade restrictions, helping countries avoid currency crises. Provide a Forum for Dialogue :The IMF facilitates discussions between member countries on global economic issues, helping to shape international
economic policy coordination.Dumping is a term with varied meanings depending on the context in which it is used. In economics, it refers to the practice of selling goods in a foreign market at prices lower than their production costs or
domestic prices, often to gain an unfair competitive advantage or dominate the market. In waste management, dumping is the improper or illegal disposal of waste materials, which can have severe environmental consequences. In the realm of
technology, it describes the process of transferring or exporting data, often in a raw, unprocessed format, from one system to another for analysis or storage. Socially