De-Jargonize

HFCE: Household final consumption expenditure: It generally includes expenditure incurred by resident households on individual consumption goods & services including those sold at prices that are not economically significant.

According to the domestic concept, it includes household expenditure made on the domestic territory by residents & inbound tourists.

GFCE: Government final consumption expenditure: Income expenditure which represents government expenditure of goods & services used for the direct satisfaction of individual needs by households. In India, government expenditure forms the largest part in the total expenditure; mainly because of defense.

ICOR: Incremental Capital Output Ratio: Minimum amount of capital required by a firm to make the next production unit. The lesser the ICOR, more efficient is the organization. ICOR is calculated as

ICOR = Annual Investment/Annual Increase in GDP

WHITE GOODS: Goods bought for the purpose of final consumption & not for resale. They are usually purchased by households. For e.g. refrigerator, ovens, air-conditioners, etc.

MARGINAL EFFICIENCY OF CAPITAL: It is the annual percentage return on last additional unit of capital .It is the rate of interest at which the investments become viable. If the marginal efficiency of capital was lower than the interest rate, the firm would be better off not investing, but saving the money.

Contributed by:

Bhupender Singh

Vimal Rajput

Section A, Economics

Batch of 2013-15