Notes And Study Material for Exam Papers

Animal Systematics: The goal of animal systematics is to arrange animals into group, that reflect evolutionary relationship. Monophyletic group: When groups include single ancestral species and all of its descendents such a group is called monophyletic group, in searching out monophyletic groups, taxonomists look for animal attributes called characters that indicate relatedness. Character: A character is virtually anything that has a genetic basis and can be measured from an anatomical feature to a sequence of nitrogenous bases in DNA or RNA. Polyphyletic groups: They have members that can be traced to separate ancestors. Since each group should have single ancestor, a polyphyletic group reflects insufficient knowledge of the group. Paraphyletic group: It includes some, but not all, members of a lineage. Paraphyletic groups result when knowledge of the group is insufficient. Evolutionary Systematics: It is the oldest of three approaches. It is also called tra

In 1969, Whittaker described a system of classification that distinguished between kingdom according to cellular organization and mode of nutrition. According to this system members of kingdom monera are bacteria and cyanobacteria. They are prokaryotes members of kingdom protista are eukaryotic and consist of single cells or colonies of cells. Members of kingdom plantae are eukaryotic, multi-cellular and photosynthetic. Plants have walled cells and are usually non motile. Members of kingdom fungi are also eukaryotic and multi-cellular. They also have walled cells and are usually non motile. Fungi are decomposers. Members of kingdom animalia are eukaryotic and multi-cellular and they usually feed by ingesting other organisms or parts of other organisms. Their cells lack walls and they are usually motile. For the first two billion years of life on the earth, living forms were prokaryotic microbes. Molecular studies of variations in base sequences of ribosomal RNA from more than

Fiscal policy is the deliberate change in government spending and taxes to stimulate or slow down the economy. In the words of F. R. Glahe “By fiscal policy is meant the regulation of the level of government expenditure and taxation to achieve full employment without inflation in the economy.” J. M. Keynes describes fiscal policy as the steering wheel for the aggregate economy. Main objectives of Fiscal Policy: The objectives of fiscal policy differ with the state of development in the country. In advanced countries of the world, the goal of fiscal policy may be the maintenance of full employment without inflation. In developing countries, the objectives of fiscal policy may be to achieve maximum level of employment and reduction economic inequalities. However, the main objectives of fiscal policy are in brief as under. Removing deflationary gap: J. M. Keynes is of the view that fiscal policy can play a major role in lifting the economy out of depression and closing the

The budget of a government is a statement of its finances for a particular year. It indicates how the government or a public body concerned proposes to raise its revenue and incur its expenditure. If the expenditure happens to be in excess of revenue, the government state how the gap is to be met through raising various types of taxes or loans. A government in Pakistan whether federal or provincial has two sections of the budget  (1) Revenue budget (2) Capital budget. The revenue budget is concerned with the current needs and functions of government like defence, civil administration, judicial services, police and beneficent activities in the field of education, health, agriculture etc. The capital budget of the government is concerned with the building of lasting works of a capital nature, like irrigation, canals, dams, roads and other constructions. Major Expenditure Heads of the Federal Budget: As we know Public Expenditure may be (i) Development Expenditure which i

Direct Tax: A tax is said to be direct when impact and incidence of a tax are on one and same person i.e. when a person on who tax is levied is the same who finally bears the burden of tax. For instance income tax is a direct tax because impact and incidence falls on the same person. Advantages of Direct Tax: Following are advantages of direct tax. 1. Direct taxes afford a greater degree of progression. They are therefore more equitable. 2. They entail less expense on collection and as such are economical. 3. They satisfy canons of certainty, elasticity productivity and simplicity. 4. They create civic consciousness in people. When a person has to bear burden of tax, he takes active interest in affairs of state. Disadvantages of Direct Tax: Disadvantages of direct tax are as follows: 1. It is easy to evade a direct tax than an indirect tax. Tax payer is seldom happy when he pays tax. It pinches him that his hard earned money is being taken by government. So h

Adam Smith, the father of modern political economy has laid down four principles or canon of taxation in his famous book “Wealth of Nations”. These principles are still considered to be the starting point of sound public finance. Adam Smith’s celebrated canons of taxation are: (1) Canon of equality or ability. (2) Canon of certainty (3) Canon of convenience (4) Canon of economy (5) Other canons. These canons of taxation are described as under. 1)          Canon of equality or ability: Canon of equality or ability is considered to be a very important canon of taxation. By equality we do not mean that people should pay equal amount by way of taxes to the government. By equality is meant equality of all sacrifice, which is people, should pay taxes in proportion to their incomes. This principles point to progressive taxation. It states that the rate of percentage of taxation should increase with increase in income and decrease with decrease in income. In the words

The modern states have to perform multifarious duties for promoting the welfare of their citizens. For the performance of these functions, money is needed. Every government therefore tries to meet its annual expenditures from taxes and from sources other than taxation. The revenue of the state can be classified under the following heads. 1.         Revenue from Private Income: A government derives revenue from citizens by taxation and from other non-tax resources such as fees, prices, special assessments, rates etc. 2.         Irregular Revenue: Under this heading, we include all items such as gifts, penalties, war indemnities etc. 3.         Revenue from State Ownership: A government also obtains incomes from the different assets which it owns. For instance government receives money from state buildings, crown lands, and other productive enterprises such as railways, postal service canals etc. We have given classification of public revenue under above mentioned heads; le

The main principles or canons that should govern public expenditure are: The principle of Maximum Social Advantage : The government expenditure should be incurred in such a way that it should benefit the community. The aim of public expenditure is the provision of maximum social advantage. If one section of society or one particular group receives the benefit of the public expenditure at the expense of society, then that expenditure cannot be justified in any way because it does not result in the greatest good to the public. So we can say that public expenditure should secure the maximum social advantage. The Principle of Economy : The principle of the economy requires that the government should spend money in such a manner that all wasteful expenditure is avoided. The economy does not mean miserliness or niggardliness. By economy, we mean that public expenditure should be increased without any extravagance and duplication. If the hard-earned money of the people, collected through

The role of the state in economic affairs is a complex and controversial topic. The political thinkers are divided about the extent and mode of state interference in economic activity. The Anarchists hold the view that a day will come when people will be lifted so much morally that there would be no need of government at all. The society will be so much conscious of its duties that it will regulate its affairs itself. The view of the Anarchists seems to be only a dream and wishful thinking and is not likely to be realized at any stage. The Mercentillists believe that the state should actively participate in the social and economic spheres. The Physiocrates were the view that the state should not impose any artificial barriers on individual’s economic behaviour. They believe in the law of Nature. Adam Smith, the father of Political Economy, believes that the state should not interfere in the internal economic life of the citizens of a country as it hampers economic progress. H

Public finance studies the income-getting and income-spending activities of the public bodies or the state. Private finance deals with the way a private person gets and spends his income. There are certain differences between the principles underlying public finances and those of private finances. These are explained below. 1.         Adjustment of Income and Expenditure: An individual usually adjusts his expenditure to his income. But the public authority generally adjusts its income to its expenditure. In other words, we can say that an individual cuts his coat according to his cloth. While the public authority first decides the size of the coat and then tries to produce cloth according to the size of its coat. The public authority prepares on estimate of the total expenditure to be incurred during a fiscal year and then devices ways and means to raise the required amount. The individual on the other hand tries to live within his own means. His expenditure is generally determin

When the value of imported visible and invisible items of trade exceeds the exported visible and invisible items of trade, the demand for titles to trade exceeds the supply of it, it creates a gap between the receipts and payments which pares the way for the out flow of gold reserves of the foreign exchange reserves of the past had depleted on it forces the country to borrow from abroad which in debits the country. Such a situation is known as disequilibrium in the balance of payment. Temporary and timely short term disequilibrium may not be the source of worry for any country, but the long term disequilibrium is really alarming. Following are the main causes of disequilibrium. 1)         Deficit in Export: The decline in exports results the decline in foreign exchange earnings. Fall in the exports may be due to geographical reasons i.e. draught, untimely rainfalls, floods, pests, water logging, salinity and soil erosion, shortage of irrigation facilities etc. political reaso

Foreign trade means export and import of goods; and goods passing from one country to another have to be paid. The difference between the exports and imports of a country is called the balance of trade. When the value of exports of a country exceeds that of its imports the balance of trade is called favourable or positive. When the value of imports of country exceeds that of its exports, it is called unfavourable or negative balance of trade. The favourable balance of trade of a country enables it to earn gold from foreign countries to the amount of balance. When balance is unfavourable the country has to pay gold to foreign countries. For instance Pakistan exported goods worth Rs. 200 million to Iran and imported goods worth Rs. 150 million from Iran . Pakistan has a favourable balance of trade with Iran to the amount of Rs. 50 million. The means, Pakistan would realize this balance from Iran in terms of gold, as ultimately foreign payments are made in terms of gold. Balance o

A different perspective on components of GDP is obtained by looking at the expenditure side of the national income accounts. The expenditure approach measures GDP as total spending on final goods and services produced within a country or nation during a specified period of time. Four major categories of spending are added to get GDP i.e. consumption, investment, government purchases of goods and services and net exports of goods and services. In symbols we can describe as Y = GDP = Total output or product = Total income = Total expenditure C = Consumption I = Investment G = Government purchases of goods and services NX = Net exports of goods and services With these symbols, we express the expenditure approach to measuring GDP as Y = C + I + G + NX    ------------------ (1) This equation is called income-expenditure identity because it states that income Y, equals total expenditure  C + I + G + NX. Let us discuss the components which constitute the GDP me

Gross Domestic Product ( GDP ) is the name we give to the total market value of the final goods and services produced within a nation or country during a given period of time. GDP is the most comprehensive measure of a nation’s total output of goods and services. It is the sum of the dollar values of consumption (C) gross Investment (I) government purchase of goods and services (G) and net exports (X) produced within a nation or country during a given period of time say year. In symbols we can express as GDP = C + I + G + X GDP is used for many purposes but the most important one is to measure the overall performance of an economy. Methods to Measure GDP 1.         Product Method of Measuring GDP : The product approach defines a nation’s Gross Domestic Product ( GDP ) as the market values of final goods and services newly produced within a nation during a fixed period of time. 2.         The Expenditure Method of Measuring GDP : A different perspective on the c

Professor Marshall defines National Income as “Sum of all the physical goods produced and services provided by utilizing the natural resources of the country with the help of labour and capital. In addition to this net income from abroad is also included. Accordingly, National Income is the summation of all the goods produced and services provided and the net income from abroad.” Apparently Marshallian definition seems to be very simple and comprehensive, but it has some practical shortcomings. (1) Statistically it is difficult to estimate accurately about the produced goods and services. (2) There may be possibility of double and multiple counting. (3) Certain portion of produced goods is kept for personal consumption. Because of such shortcomings Pigou defined National Income as “Only those goods and services will be included in National Income which are gold against money.” But Pigou’s definition is not acceptable for those countries where there is limited use of m

Inflation or deflation complicates GNP because GNP is a price times-quantity figure. The changes either in the price level or the change in output produced may affect the size of GNP. Then there rises a distinction between nominal GNP and real GNP. The nominal GNP is the representation of GNP in monetary terms while the real GNP is the representation of GNP in quantity or physical terms. Broadly, the nominal or current price GNP measures the value output at the prices prevailing in the period during which the output is produced. While the real GNP or constant price GNP measures the output produced in any period at the prices of some base year. Real GNP which values the output produced in different years at the same prices implies an estimate of the real or physical change in production or output between any specified years. If we assume 2000 as a base year, it will serve as the base year for real output measurement. US nominal GNP was $4864 billion in 1988 and it was $1598 billion

The Gross National Product (GNP) is the summation of all those finally produced goods and services which the labour and capital like factors of production have produced by utilizing all the resources of the country in a year. If we represent such all aggregate output in the form of money we get GNP. If we define GNP from market prices point of view then “GNP” is the market value of all goods and services produced in a country in a year.” The GNP is a flow variable, because it represents the amount of goods and services produced during some particular period of time i.e. a year. If we represent the produced goods and services by Q 1 , Q 2 , Q 3 , Q 4 ……..and their prices by P 1 , P 2 , P 3 , P 4 ………..then the GNP of a country will be as GNP = P 1 Q 1 + P 2 Q 2 + P 3 Q 3 + P 4 Q 4 ………..P n Q n But the measure of GNP by this method we have to make the following cares. 1.         To ensure GNP the value final goods will be included while the value of intermediate g