Economy Basics for Prelims

Shrinkflation – UPSC Prelims

Shrinkflation: Shrinkflation is the practice of reducing the size of a product while maintaining its sticker price. It is a form of hidden inflation. Raising the price per given amount is a strategy employed by companies, mainly in the food and beverage industries, to stealthily boost profit margins or maintain them in the face of rising input costs. Nowadays, …

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Trading in Rupee – Rubal – Yuan – UPSC Prelims

The use of the dollar as a financial weapon against Russia by the U.S. has resulted in countries taking up accelerated measures to reduce their dependence on the U.S. dollar. Countries now want to hold fewer dollars and euros by switching to alternative currencies such as the yuan. Also, India is exploring trade with Russia …

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Types of Unemployment in India- UPSC Prelims

Types of Unemployment in India Disguised Unemployment: It is a phenomenon wherein more people are employed than actually needed. It is primarily traced in the agricultural and unorganised sectors of India. Seasonal Unemployment: It is unemployment that occurs during certain seasons of the year. Agricultural labourers in India rarely have worked throughout the year. Structural Unemployment: It is …

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Dollar–Rupee Swap Auction – UPSC Prelims

What is a Dollar–Rupee Swap auction? It’s a forex tool whereby the central bank uses its currency to buy another currency or vice versa. Dollar–Rupee Buy/Sell Swap: The central bank buys dollars (US dollars or USD) from banks in exchange for Indian Rupees (INR) and immediately gets into an opposite deal with banks promising to sell dollars at a …

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Impact of High Oil Prices on Economy – UPSC Prelims

Surge in global energy prices trigger a ‘terms-of-trade’ shock, where import prices rise faster than export prices, for large net energy importers like India, resulting in a hit on current account balances. The high fuel prices would result in higher inflation rates. The higher retail inflation would strain monetary policy and dampen economic growth and stress some bank borrowers. Additionally, this …

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Core Inflation – UPSC Prelims

Core Inflation excludes volatile goods from the basket of commodities tracking Headline Inflation. These volatile commodities mainly comprise food and beverages (including vegetables) and fuel and light (crude oil) Core inflation = Headline inflation – (Food and Fuel) inflation Increase in core inflation suggests improvement in demand conditions

ASPIRE Portal – UPSC Prelims

The International Centre for Automotive Technology (ICAT) is developing a technology platform for the automotive industry called ASPIRE – Automotive Solutions Portal for Industry, Research and Education. ASPIRE Portal The key objective of this portal is to facilitate the Indian Automotive Industry to become self-reliant by assisting in innovation and adoption of global technological advancements. …

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