A balance sheet should always balance. The name “balance sheet” is based on the fact that assets will equal liabilities and shareholders’ equity every time. Understanding Balance Sheets The assets on the balance sheet consist of what a company owns …
Cash Reserve Ratio (CRR)Â is the amount of funds that banks have to maintain with the Reserve Bank of India (RBI) at all times. If the central bank decides to increase the CRR, the amount available with the banks for disbursal …
A lender of last resort (LoR) is an institution, usually a country’s central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky or near collapse. In the United States, …
Open Market Operations refers to buying and selling of bonds issued by the Government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the Government. When RBI buys a Government bond in …
Income, or output, or profits are concepts that make sense only when a time period is specified. These are called flows because they occur in a period of time. Therefore we need to delineate a time period to get a …
A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors , usually on an overnight basis, and buys them back the following …
Net national product (NNP) is the monetary value of finished goods and services produced by a country’s citizens, overseas and domestically, in a given period. It is the equivalent of gross national product (GNP), the total value of a nation’s …
A reverse repurchase agreement, or “reverse repo”, is the purchase of securities with the agreement to sell them at a higher price at a specific future date. For the party selling the security (and agreeing to repurchase it in the …
National Disposable Income = Net National Product at market prices + Other current transfers from the rest of the world The idea behind National Disposable Income is that it gives an idea of what is the maximum amount of goods …
There are two kinds of papers: writing and printing. These papers are most commonly employed for printing in commercial settings as well as stationary and business forms. They are a large segment of the market for paper, representing about 1/3 …