onomi      on epts and erminolo ies       22.55
     unemployment allowance) conditional upon                bonds are popularly used by the governments to
     participation in some local work scheme.                raise long-term funds. In a situation of rate cut by
                                                             the RBI, zero-coupon bonds gain value-it means,
        x-inefficiency                                       they sell at hipher prices. When there is an increase
                                                             in rate, the opposite happens.
     A graphic representation of the ‘gap’ a firm shows
     in its actual and minimum costs of supplying its           zero-sum gAme
     products. As per the traditional theory of supply,
     firms always operate on minimum attainable              A situation in the game theory when the gains
     costs. As opposed to this, x-inefficiency suggests      made by winners in an economic transaction is
     that firms typically operate at higher costs than       equal to the losses suffered by the losers. This is
     their minimum attainable costs. This takes place        considered a special case in game theory. Most
     due to many inefficiencies (such as organising the      economic transactions are in some sense positive-
     works, lack of co-ordination, lack of motivation,       sum games. But in popular discussion of economic
     bureaucratic rigidities, etc.). Large corporates        issues, there are often examples of mistaken zero-
     usually face this problem as they lack effective        sum mentality, such as profit comes at the expense
     competition which could ‘keep them on their             of wages, ‘higher productivity means fewer jobs’,
     toes’.                                                  and ‘imports mean fewer jobs here.’
        yielD gAp                                               zero tilling
     A method of comparing the performance of                A relatively new farm production process, is a
     bonds and shares in an economy. It is defined as        one-time operation in which a small drill places
     the average returns on shares minus the average         the seed and the fertiliser in a small furrow, saving
     returns on bonds.                                       the farmer a lot of time and other resources. At
                                                             first utilised in Haryana in 1999–2000, by now it
        zero-coupon bonD                                     has spread to the other wheat growing states like,
                                                             Punjab, Uttar Pradesh, Uttarakhand, and Bihar
     A bond bearing zero coupon rate (i.e. no interest)      particularly. The technique gives comparatively
     sold at a price lower than its face value. Investors    higher yield (by over 5 per cent) than the
     book profit when they sell it (at its face value). Such conventional wheat farming.