onomi on epts and erminolo ies 22.3
agricultural labourer. He or she has no risk in the
cultivation, but merely works on another person’s
One among the two kinds of the market failure land for wages. An agricultural labourer has no
often associated with insurance business which right of lease or contract on land on which he/
means doing business with the people one would she works.
have better avoided.
Adverse selection can be a problem when there Alpine convertible bonD
is an asymmetry in information between the seller
and the buyer of an insurance policy—as insurance An ACB (Alpine Convertible Bond) is a Foreign
will not be profitable when buyers have better Currency Convertible Bond (FCCB) issued by an
information about their risk of claiming than does Indian company exclusively to the Swiss investors.
the seller of the insurance policy. In the ideal case,
insurance premiums are set in accordance to the AmmortisAtion
risk of a randomly selected person in the insured
bracket (such as 40-year-old male smokers) of the Payment of a loan in installments by the borrower.
population. It is usually done in an agreed period and every
The other kind of market failure is moral installment includes a part of the total loan plus
hazards associated with the insurance sector. the interest.
AgriculturAl extension AnDeAn pAct
Agricultural extension is a proper approach A regional pact to establish a common market link,
to motivate people to help themselves by started originally in 1969. At present it has peru,
applying agricultural research and development
Equador, Columbia, Bolivia, and Venezuela. The
in their daily lives in farming, home making,
and community living. It plays a vital role in pact had almost collapsed by the mid-1980s due
community development. It is a two-way channel to regional, economic, and political instabilities
that brings scientific information to rural people and was re-launched in 1990 (the original member
and takes their problems to scientific institutes Chile was dropped and the new member venezuela
(for further research and development) for their was added to it).
In India, like many other developing countries, AnimAl spirit
the role of agricultural extension is more than
educational and it needs to deal with the human ‘Confidence’, considered as one of the essential
resource development of the agrarian population ingredients of economic prosperity was called by
too, making it a comparatively tougher task J. M. Keynes as animal spirit. For Keynes, this is
than in the developed countries. The spread of a ‘naive optimism’ by which an entrepreneur puts
information technology will serve a great purpose aside the fact of loss as a healthy man puts aside
in this area. the expectation of death.
But from where does this animal spirit come
AgriculturAl lAbourer has been a mystery—can it be created artificially
A person who works on another person’s land for from outside or whether it is an innate thing some
wages in money or kind or share is regarded as an are born with, etc.