22.34        ndian    onom
     higher in relation to debt finance but lower than     misery inDex
     equity finance. It is also available quickly to the
                                                           An index of economic misery that is sum of
     borrower with little or no collateral. The concept of
                                                           the rates of inflation and unemployment for an
     mezzanine financing is just catching up in India.
                                                           economy–higher the value greater is the misery.
     Mezzanine financing is used mainly for small
     and medium enterprises, infrastructure and real       monetAry neutrAlity
     estate. ICICI Venture’s Mezzanine Fund was the
     first fund in India to focus on mezzanine finance     The idea that changes in money supply have no
     opportunities.                                        effect on real economic variables (such as output,
                                                           real interest rates, unemployment etc.,) if money
                                                           supply increases by 10 per cent, for example, the
                                                           price will increase by the same level.
     The Mumbai Inter Bank Bid (MIBID) is the                   A core belief of Classical Economics, the idea
     weighted average interest rate at which certain       was put forth by David Hume in the 18th century.
     banks in Mumbai are ready to borrow from the          Today this is not considered a valid idea.
     call money market.
                                                              money illusion
                                                           A phrase coined by J. M. Keynes to denote the
     The Mumbai Inter Bank offer Rate (MIBOR) is           misleading thinking among people that they are
     the weighted average interest rate at which certain   getting richer as a result of inflation when in
     banks/institutions in Mumbai are ready to lend in     reality the value of money decreases.
     the call money market.                                     The phrase is used by some economists to
                                                           argue that a small amount of inflation may not
     miDDle clAss                                          be a bad thing and could even be beneficial as it
     We keep hearing and reading use the term              may help to ‘grease the wheels’ of the economy—a
     ‘middle class’ frequently. But who are the middle     feeling of getting richer (let it be illusory itself!).
     classes? There are still no universally accepted
     criteria for defining the middle class. Simply put,      morAl hAzArD
     they are neither rich nor poor. Even the income
     criterion has not been settled. According to the      One among the two kinds of market failure often
     National Council of Applied Economic Research         associated with the insurance sector. It means that
     (NCAER), a family with an annual income               the people with insurance cover may take greater
                                                           risks than the uncovered ones as they know they
     between Rs. 3.4 lakh and Rs. 17 lakh (at the 2009-
                                                           are protected so the insurer may get more claims
     10 price levels) falls in the middle class category.
                                                           it bargained for. The other kind of market failure
     According to NCAER, by 2015–16, India was a
                                                           is the adverse selections also related to insurance
     country of 53.3 million middle class households
     or about 267 million people.
     microcreDit                                              most fAvoureD nAtion
     Smaller credit/loan to small and needy borrowers      As per the WTO agreements, member countries
     who are outside the reach of commercial banks, for    cannot normally discriminate between their
     the purpose of undertaking productive activities.     trading partners. If any country grants one