Topic Details (Notes format)

Money Market and Capital Market

Subject: Economics

Book: Comprehensive Indian Economy

India’s financial markets are split into the money market (short-term funds) and capital market (long-term). The money market includes instruments like Treasury Bills, Commercial Paper, and inter-bank lending. The capital market is governed by SEBI, featuring equity (stocks) and debt (bonds). Effective regulation ensures transparency, investor protection, and efficient fund mobilization for development. Students should grasp the significance of liquidity management, interest rate formation, and how capital market reforms (e.g., dematerialization, listing norms) boost investor confidence and corporate governance. Practice identifying differences, key instruments, and regulatory frameworks for robust exam-oriented preparation.

Practice Questions

What is the primary purpose of Special Economic Zones (SEZs)?

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Which is the largest source of tax revenue for the Government of India?

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What does the term “national income” refer to?

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What does the term "depreciation" refer to in the context of assets?

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What does the “Human Development Index” measure?

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Which of the following measures is most effective in controlling inflation?

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Which of the following statements best defines Gross Domestic Product (GDP)?

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What is the “law of diminishing marginal utility”?

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What is the concept of “invisible hand” associated with?

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What is the purpose of the "Minimum Support Price" (MSP) in India?

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