By Pareek, Saroj
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2. g. small coins and paper notes. 3. Paper Money: It is made of paper and issued by the government of a country. It is of two kinds (a) Convertible (b) Inconvertible. (a) Paper money is convertible when it can be converted into standard money at the option of the holder. (b) It is said to be inconvertible when it cannot be redeemed into gold or silver on presentation. Such notes are issued by the government of a country in times of emergency. 4. Legal Tender Money: Money which can be legally tendered payment of debts or other obligations is said to be legal tender money.
These changes do not occur only in India but effect the whole world. Characteristics o/Trade Cycle: 1. The trade cycle is synchronous: That is, the upward and downward movements occur at, approximately the same period in all industries. A good business in one industry stimulates business in other industries. 2. Trade cycle is an international feature: Through International trade and foreign exchange, the prosperity or depression spreads to other countries. 3. Boom and slump affect all industries, but not to the same extent.
4. Psychological Theory: According to this theory, the cause of the cycle is business confidence or rather over confidence. During, boom, people expect more profits and expand their business and carry production beyond profitable sale. At some point, business has to be curtailed and conditions of depression start. (10) Profit: The profit of a company equals the total scale proceeds minus the cost of production. If the residual part of the total scale proceeds left over after paying off all the items of expenditure in the cost.