Indian Economy & Macroeconomics (Class-XII)

Foreign Exchange Rate Definition It is the rate at which one unit of the (foreign) currency is exchanged for the number of units of (domestic) currency. Eg-. $1 = Rs. 50 Foreign exchange reserve or foreign exchange It is a reserve of foreign currencies, securities & bonds held by central bank. System of Exchange rate or types of Exchange rates There are two types of exchange rate systems: 1.        Fixed exchange rate system 2.        Flexible exchange rate system Fixed Exchange Rate System A. Gold Standard System 1.                   In this system every country used to define the value of its currency in terms of gold. 2.                   Value of one currency in terms of other currency was fixed considering the gold value of each currency. E.g.                       $1 = 10 gm of Gold                               Rs. 1 = 1 gm of Gold Therefore            $1 = Rs. 10 B. Bretton Woods System 1.                   It is also c

CHAPTER :-1 INDIAN ECONOMY ON EVE OF INDEPENDENCE COLONIAL RULE :- it refer to a system between 2 countries under which one country being the ruler and another being the colony and the ruling countries determines the economy policy( especial in establishing settlements or exploiting resources)   to the economy. STAGNANT  ECONOMY :- it refers to the economy which stuck or very slow at its path of development. BEFORE COLONIAL RULE: 1) Agriculture based economy: 85 %population directly and indirectly depend on agricultural for employment and living. 2) Only those crops were grown that are used for self –consumption and for village artisans 3) Famous for handicraft industry 4) Enjoy extensive trade in Asia &Europe 5) Independent, self-reliant and prosperous economy.Ancient India was called a “GOLDEN SPARROW” OR “GOLDEN BIRD” FEATURE OF INDIAN ECONOMY (ON THE EVE OF INDENPENDENC   1)     STAGNANT ECONOMY: - little /no growth, per capita income low ,no job op