By
Sudarshan Kadariya
JMC
 Unemployment rate: One of the key indicators of the
health of an economic system is its ability to provide a
job for any...
 Inflation: It means a sustained increase in the
average level of prices of all goods and services. The
most widely used ...
 Economic growth: It is a third major sign of
economic health. The economy must grow to
provide jobs for new workers and ...
 Gross Domestic Products (GDP): Gross
domestic product is the main measurement of
aggregate economic activity.
 It is de...
 Business cycle: The recurring and fluctuating
levels of economic activity that an economy
experiences over a long period...
 Since the World War II, most business cycles
have lasted three to five years from peak to peak.
 The average duration o...
 Expansion: The phase of the business
cycle when the economy moves from a trough to a
peak. It is a period when business ...
 Recession: A period in which real output falls for
6 months or more.
 A significant decline in activity across the
econ...
 Depression: Recession merges into depression
when there is a general decline in economic
activity. There is a considerab...
 Trough: The stage of the economy's business
cycle that marks the end of a period of declining
business activity and the ...
 Recovery: A period of renewed growth of real
output following a recession.
 A period of increasing business activity si...
 Consumption: The purchase of consumer
goods and services
 Marginal propensity to consume: The
change in consumption exp...
 Injection: The part of total expenditure that does
not originate from domestic household - that is
investment, governmen...
 Saving: The part of household income not used
to purchase goods and services or to pay taxes.
 Dissaving: Negative savi...
 Fixed Investment: Purchases by firms of newly
produced capital goods, such as plant and
machinery, newly built structure...
 Consumption function: The relationship
between consumer expenditure and disposable
income.
 Autonomous Consumption: The...
GDP - real growth rate Commercial bank prime lending rate
4.6% (2010 est.) 8% (31 December 2010 est.)
4.9% (2009 est.) 8% ...
Labor force Imports - commodities
18 million
petroleum products, machinery and equipment, gold,
electrical goods, medicine...
macro economic concepts
macro economic concepts
macro economic concepts
macro economic concepts
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macro economic concepts

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macro economic concepts

  1. 1. By Sudarshan Kadariya JMC
  2. 2.  Unemployment rate: One of the key indicators of the health of an economic system is its ability to provide a job for any one who wants to work.  Unemployment rate is the percentage of people in the labour force who are not working but are actively looking employment and willing to work. Unemployment rate = (Unemployed Popn./Labor force)*100 46% (2008 est.)  42% (2004 est.)
  3. 3.  Inflation: It means a sustained increase in the average level of prices of all goods and services. The most widely used measure of inflation is the consumers price index (CPI). Price stability- the absence of inflation- is a second major sign of the health of an economy.  The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation in an attempt to keep the excessive growth of prices to a minimum. 
  4. 4.  Economic growth: It is a third major sign of economic health. The economy must grow to provide jobs for new workers and to provide every one with a rising standard of living.  An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.  For comparing one country's economic growth to another, GDP or GNP per capita should be used  Growth rate = (This year GDP – Last year GDP)/Last year GDP
  5. 5.  Gross Domestic Products (GDP): Gross domestic product is the main measurement of aggregate economic activity.  It is defined as the value of all final goods and services produced within a country in a given year. It means quantities of goods and service multiplied by the market price of the goods and services.  Nominal GDP refers to unadjusted for the effects of inflation where as real GDP is the data adjusted for the effects of inflation.
  6. 6.  Business cycle: The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time.  The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery.  At one time, business cycles were thought to be extremely regular, with predictable durations, but today they are widely believed to be irregular, varying in frequency, magnitude and duration.
  7. 7.  Since the World War II, most business cycles have lasted three to five years from peak to peak.  The average duration of an expansion is 44.8 months and the average duration of a recession is 11 months.  As a comparison, the Great Depression - which saw a decline in economic activity from 1929 to 1933 - lasted 43 months. Note: these data are based on US economy
  8. 8.  Expansion: The phase of the business cycle when the economy moves from a trough to a peak. It is a period when business activity surges and gross domestic product expands until it reaches a peak.  Also known as an "economic recovery".  Peak: The highest point between the end of an economic expansion and the start of a contraction in a business cycle.
  9. 9.  Recession: A period in which real output falls for 6 months or more.  A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade.  The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).
  10. 10.  Depression: Recession merges into depression when there is a general decline in economic activity. There is a considerable reduction of output, employment, income, demand and price.  A severe and prolonged recession characterized by inefficient economic productivity, high unemployment and falling price levels.
  11. 11.  Trough: The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion. 
  12. 12.  Recovery: A period of renewed growth of real output following a recession.  A period of increasing business activity signaling the end of a recession. Much like a recession, an economic recovery is not always easy to recognize until at least several months after it has begun.  Economists use a variety of indicators, including GDP, inflation, financial markets and unemployment to analyze the state of the economy and determine whether a recovery is in progress.
  13. 13.  Consumption: The purchase of consumer goods and services  Marginal propensity to consume: The change in consumption expenditure divided by the change in disposable income. MPC represents the proportion of an aggregate raise in pay that is spent on the consumption of goods and services.  Marginal propensity to save: The change in saving divided by the change in disposable income or (1- MPC)
  14. 14.  Injection: The part of total expenditure that does not originate from domestic household - that is investment, government purchase, and export.  Leakages: The part of domestic income not devoted to consumption. (saving, taxes, plus domestic expenditure on foreign made goods (imports))
  15. 15.  Saving: The part of household income not used to purchase goods and services or to pay taxes.  Dissaving: Negative saving, which occurs when consumption exceeds disposable income. Spending an amount of money greater than available income. Dissaving is considered the opposite of saving.
  16. 16.  Fixed Investment: Purchases by firms of newly produced capital goods, such as plant and machinery, newly built structures and office equipment  Inventory Investment: Changes in the stocks of finished product and raw material that firms keep on hand. If stock are increasing , investment inventory is positive, if they are decreasing , it is negative.
  17. 17.  Consumption function: The relationship between consumer expenditure and disposable income.  Autonomous Consumption: The part of consumption expenditure that is independent of the level of disposable income.
  18. 18. GDP - real growth rate Commercial bank prime lending rate 4.6% (2010 est.) 8% (31 December 2010 est.) 4.9% (2009 est.) 8% (31 December 2009 est.) 6.1% (2008 est.) Agriculture - products GDP - per capita pulses, rice, corn, wheat, sugarcane, jute, root crops; milk, water, buffalo meat, etc $1,200 (2010 est.) $1,200 (2009 est.) Industries $1,200 (2008 est.) tourism, carpets, textiles; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production note: data are in 2010 US dollars Oil - consumption GDP - composition by sector 20,000 bbl/day (2010 est.) agriculture: 32.8% (I bbl = 115.63 liters) industry: 14.4% Exports - commodities services: 52.8% (2010 est.) clothing, pulses, carpets, textiles, juice, pashima, jute goods Population below poverty line Exports - partners 24.7% (2008) India 61.7%, US 7.5%, Germany 4.6%, Bangladesh 4.1% (2010)
  19. 19. Labor force Imports - commodities 18 million petroleum products, machinery and equipment, gold, electrical goods, medicine note: severe lack of skilled labor (2009 est.) Imports - partners Labor force - by occupation India 56.2%, China 22.5% (2010) agriculture: 75% industry: 7% Exchange rates services: 18% (2010 est.) Nepalese rupees (NPR) per US dollar - 72.56 (2010) Unemployment rate 77.44 (2009) 46% (2008 est.) 65.21 (2008) 42% (2004 est.) 70.35 (2007) 72.446 (2006) Inflation rate (consumer prices) Central bank discount rate 10.4% (2010 est.) 6.5% (31 December 2010) 11.6% (2009 est.) 6.5% (31 December 2009) Source: http://www.indexmundi.com/nepal/economy_profile.html

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