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Question
Match the following Group ‘A’ with Group ‘B’:
| Group ‘A’ | Group ‘B’ | ||
| (a) | Giffen’s goods | (1) | Uses of commodities |
| (b) | Essential commodities | (2) | Keynes |
| (c) | Consumption | (3) | Primary function of bank |
| (d) | Consumption function | (4) | Inferior goods |
| (e) | Accept deposits | (5) | Money lender |
|
|
(6) | Inelastic demand | |
|
|
|
(7) | Luxurious commodities |
|
|
|
(8) | Dr. Marshall |
Solution
| Group ‘A’ | Group ‘B’ | ||
| (a) | Giffen’s goods | (4) | Inferior goods |
| (b) | Essential commodities | (6) | Inelastic demand |
| (c) | Consumption | (1) | Uses of commodities |
| (d) | Consumption function | (2) | Keynes |
| (e) | Accept deposits | (3) | Primary function of bank |
Explanation:
(a) Giffen goods are a type of inferior goods. In case of such goods, when the prices fall, the quantity demanded also falls due to negative income effect and there is a rise in the preferences of superior quality goods by the consumers.
(b) Essential commodities are the ones which have inelastic demand. This is because the quantity demanded for such goods do not change with a change in prices as they are a necessity good.
(c) Consumption basically implies the use of a commodity. It refers to the usage of the goods by the consumers in various ways.
(d) Consumption function states the relationship between the aggregate consumption expenditure and aggregate income. This concept was introduced by Lord Keynes under his psychological law of consumption which states that as income increases, consumption also increases but at a lesser rate than increase in income.
(e) One of the primary functions of the commercial banks is to accept deposits. There are various kinds of public deposits such as fixed account deposit, savings account deposit and current account deposits through which the commercial banks deposit the money from the public.
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