Nathans Natural - Important and Basic concepts in Economics
Important and Basic concepts in Economics
Difference between Microeconomics and Macroeconomics?
Microeconomics-: Microeconomics generally deals with the study of
individuals and business decisions.
Macroeconomics-: Macroeconomics deals with the government
decision that helps to revive the economy.
Macroeconomics plays an important role in a bigger economy means
open economy that trades with multiple economies of countries.
By Nathans Natural
Important terms In Economics
Repo Rate-:Repo Rate is the rate at which the banks borrows the sum
of money from central bank at specified rate for short duration of time.
Reverse Repo Rate-: Reverse Repo Rate is the rate at which the banks
place its assets with central bank at specified rate.
Cash Reserve Ratio-: CRR is that term at which banks places its surplus
funds with central bank. However in ths case, banks does not get any
Statuatory Liquidity Ratio-: SLR is that term in which banks placed its
assets in the form of gold, assets in the form of liquidity placed with
central bank. In this case banks gets interest.
Economics basic: Demand And Supply-: Demand and supply is the most
important concept in the economics.
Demand and supply highlights the important views and place a
relationship between them in economics.
Supply refers to how much market can offer. If we fail to offer require
supply then it may cause loss and prices goes high.
Demand refers how much we produce according to need hail in the
The relationship between the Demand and supply underlie the forces
behind the allocation of resources.
A. Law of Demand The law of demand states that, if all other factors
remain equal, the higher the price of a good, the less people will
demand that good. In other words, the higher the price, the lower
the quantity demanded. The amount of a good that buyers
purchase at a higher price is less because as the price of a good
goes up, so does the opportunity cost of buying that good. As a
result, people will naturally avoid buying a product that will force
them to forgo the consumption of something else they value
more. The chart below shows that the curve is a downward slope.
It can demonstrates from diagram-:
The Law of Supply: Like the law of demand, the law of supply
demonstrates the quantities that will be sold at a certain price. But unlike
the law of demand, the supply relationship shows an upward slope. This
means that the higher the price, the higher the quantity supplied.
Producers supply more at a higher price because selling a higher
quantity at a higher price increases revenue.
Nathans Natural underlines some diagrams to show you the best way
how to understand economics better.
This diagram shows the relationship between quantity and price.
If the production is low is respect to demand than rates goes high and
increase inflation due to rise in prices of products.
Figure reflects the trends over one decade which has
been increasing over a period of time.
This graph shows the deamnd and supply curve.