This document provides an overview of chapter 4 of a Grade 12 Economics textbook. It covers key macroeconomic concepts like national accounts, circular flow of income, and approaches to compiling national accounts using output, expenditure and income. It also defines macroeconomic objectives such as full employment, price stability, economic growth, balance of payments stability, equitable income distribution, and sustainable development. Specific policies and indicators are discussed for each objective.
The document provides a general overview of the economy in Sri Lanka from the time of Independence in 1948 to the Present era in terms of policy changes, the general affect on different regime changes on the economy and how they have molded the present situation in Sri Lanka in a macro economic perspective.
The spending allocation pattern of national governments varies depending on public policy for
desired effects but the outcome is rather controversial according to existing literature. This research aims to
explore the relationship between government expenditure, economic development and economic growth in
Brazil from 1994 to 2017. The Human Development Indicator (HDI) index is a representative measure of
economic development and is comprised of three dimensions:
Government Expenditure and Economic Growth Nexus: Empirical Evidence from Nig...iosrjce
This study has examined the impact of public expenditure on economic growth in Nigeria using time
series data for the period 1970-2012. Secondary data were sourced from the CBN, NBS, journals, text books
etc. The adopted model was fitted with three variables: real GDP, capital and recurrent expenditure. The tools
of analysis were the ADF unit root test and ordinary least square multiple regression accompanied by pairwise
Granger causality test. The major objective of this study is to analyse the impact as well as direction of
causality between the fiscal variables and economic growth. All the variables included in the model are
stationary at level. Empirical findings from the study show that there is positive and insignificant relationship
between capital expenditure and economic growth while recurrent expenditure had a significant positive impact
on economic growth. Also, Granger causality test demonstrates a unidirectional causality running from the
fiscal variables to economic growth in validation of the Keynesian theory. Consequently, the study
recommended more allocation of resources for recurrent purposes as well; government should establish the
body that will monitor contract awarding process of capital projects closely, to guard against over estimation of
project cost and stealing of public funds.
Abstract: The paper examines the impact of public sectoral expenditure on economic growth in Nigeria for the period 1981-2013. It was observed that the growth of government expenditure has not fully felt by the economy. The econometric methodology employed is the ARDL model and results show that while the impact of government expenditure on administration and debt servicing were positive on economic growth in the long and short run, expenditure on economic and social sectors has negative impact. We argue that this may not be unconnected with the high level of corruption prevalent in the public sector where funds that are meant for provision or maintenance of social-economic activities like agriculture, roads, transportations, schools and hospitals are diverted for personal use. The CUSUM and CUSUMSQ test show the model is stable as neither of them cross the 5% boundary. The paper recommended that government should increase expenditure to the social and economic sectors while debts or debt servicing should be reduced. Also, corruption so prevalent in the public sector must be minimized if cannot be eradicated.
Difference Between Economic Growth and Developmentzaryab anwar
The document discusses economic growth and economic development. It defines economic growth as a steady increase in a nation's productive capacity and output over decades that leads to rising income levels. Economic development is defined as a process that increases a society's total goods and services supply and improves living standards. It involves structural changes including a shift away from agriculture and toward industry and services, changes in technology use, and improvements to social and institutional sectors. While economic growth focuses only on raising income, economic development also aims to enhance human well-being through both increased income and structural transformations of an economy and society.
Economic growth and economic development and the differencesAquatix Pharma
Economic growth refers to an increase in a country's real GDP or output, measured quantitatively. It does not necessarily improve living standards. Economic development is a broader concept that involves qualitative progress such as improved literacy, life expectancy, and standards of living. Development measures progress using indexes like the Human Development Index that account for social and environmental factors beyond just GDP. True economic development leads to sustainable gains for society as a whole, while growth can sometimes only benefit a small group.
The impact of government agricultural expenditure on economic growth in zimbabweAlexander Decker
This document summarizes a study that investigated the impact of government agricultural expenditure on economic growth in Zimbabwe from 1980 to 2009. The study employed a log linear regression model with gross domestic product as the dependent variable and factors such as government expenditure on agriculture, investment, and consumption as explanatory variables. The regression analysis found that increased spending on agricultural research and development can improve economic growth. However, insufficient government expenditure on agricultural extension and credit assistance adversely affected economic growth in Zimbabwe. The results provide evidence that agriculture is an engine of economic growth in the country.
Here are my responses to your review questions:
1. Some key government policies that can promote economic growth discussed in the document include encouraging saving and investment, education and training, securing property rights and maintaining political stability, promoting free trade, controlling population growth, and promoting research and development.
2. The influx of more women in universities could positively influence the economy by expanding the overall human capital and skills in the labor force. Educating and training more women would increase productivity over the long run and potentially lead to more innovation. It could also help reduce gender imbalances in the labor market and certain occupations. Overall, greater educational attainment and workforce participation of women has the potential to boost economic growth.
The document provides a general overview of the economy in Sri Lanka from the time of Independence in 1948 to the Present era in terms of policy changes, the general affect on different regime changes on the economy and how they have molded the present situation in Sri Lanka in a macro economic perspective.
The spending allocation pattern of national governments varies depending on public policy for
desired effects but the outcome is rather controversial according to existing literature. This research aims to
explore the relationship between government expenditure, economic development and economic growth in
Brazil from 1994 to 2017. The Human Development Indicator (HDI) index is a representative measure of
economic development and is comprised of three dimensions:
Government Expenditure and Economic Growth Nexus: Empirical Evidence from Nig...iosrjce
This study has examined the impact of public expenditure on economic growth in Nigeria using time
series data for the period 1970-2012. Secondary data were sourced from the CBN, NBS, journals, text books
etc. The adopted model was fitted with three variables: real GDP, capital and recurrent expenditure. The tools
of analysis were the ADF unit root test and ordinary least square multiple regression accompanied by pairwise
Granger causality test. The major objective of this study is to analyse the impact as well as direction of
causality between the fiscal variables and economic growth. All the variables included in the model are
stationary at level. Empirical findings from the study show that there is positive and insignificant relationship
between capital expenditure and economic growth while recurrent expenditure had a significant positive impact
on economic growth. Also, Granger causality test demonstrates a unidirectional causality running from the
fiscal variables to economic growth in validation of the Keynesian theory. Consequently, the study
recommended more allocation of resources for recurrent purposes as well; government should establish the
body that will monitor contract awarding process of capital projects closely, to guard against over estimation of
project cost and stealing of public funds.
Abstract: The paper examines the impact of public sectoral expenditure on economic growth in Nigeria for the period 1981-2013. It was observed that the growth of government expenditure has not fully felt by the economy. The econometric methodology employed is the ARDL model and results show that while the impact of government expenditure on administration and debt servicing were positive on economic growth in the long and short run, expenditure on economic and social sectors has negative impact. We argue that this may not be unconnected with the high level of corruption prevalent in the public sector where funds that are meant for provision or maintenance of social-economic activities like agriculture, roads, transportations, schools and hospitals are diverted for personal use. The CUSUM and CUSUMSQ test show the model is stable as neither of them cross the 5% boundary. The paper recommended that government should increase expenditure to the social and economic sectors while debts or debt servicing should be reduced. Also, corruption so prevalent in the public sector must be minimized if cannot be eradicated.
Difference Between Economic Growth and Developmentzaryab anwar
The document discusses economic growth and economic development. It defines economic growth as a steady increase in a nation's productive capacity and output over decades that leads to rising income levels. Economic development is defined as a process that increases a society's total goods and services supply and improves living standards. It involves structural changes including a shift away from agriculture and toward industry and services, changes in technology use, and improvements to social and institutional sectors. While economic growth focuses only on raising income, economic development also aims to enhance human well-being through both increased income and structural transformations of an economy and society.
Economic growth and economic development and the differencesAquatix Pharma
Economic growth refers to an increase in a country's real GDP or output, measured quantitatively. It does not necessarily improve living standards. Economic development is a broader concept that involves qualitative progress such as improved literacy, life expectancy, and standards of living. Development measures progress using indexes like the Human Development Index that account for social and environmental factors beyond just GDP. True economic development leads to sustainable gains for society as a whole, while growth can sometimes only benefit a small group.
The impact of government agricultural expenditure on economic growth in zimbabweAlexander Decker
This document summarizes a study that investigated the impact of government agricultural expenditure on economic growth in Zimbabwe from 1980 to 2009. The study employed a log linear regression model with gross domestic product as the dependent variable and factors such as government expenditure on agriculture, investment, and consumption as explanatory variables. The regression analysis found that increased spending on agricultural research and development can improve economic growth. However, insufficient government expenditure on agricultural extension and credit assistance adversely affected economic growth in Zimbabwe. The results provide evidence that agriculture is an engine of economic growth in the country.
Here are my responses to your review questions:
1. Some key government policies that can promote economic growth discussed in the document include encouraging saving and investment, education and training, securing property rights and maintaining political stability, promoting free trade, controlling population growth, and promoting research and development.
2. The influx of more women in universities could positively influence the economy by expanding the overall human capital and skills in the labor force. Educating and training more women would increase productivity over the long run and potentially lead to more innovation. It could also help reduce gender imbalances in the labor market and certain occupations. Overall, greater educational attainment and workforce participation of women has the potential to boost economic growth.
The indicators of indian economy ppt @ mba 2009Babasab Patil
The document discusses various leading economic indicators of the Indian economy such as GDP growth trends, inflation rates, interest rates, credit levels, exports, imports, foreign investment, stock market performance, monsoon rainfall, and development indicators. Leading indicators can provide useful insights into the future direction of the economy by signaling turning points in business cycles ahead of changes in broader economic conditions. Monitoring a basket of leading indicators allows for more accurate forecasting of the overall performance of the Indian economy.
This document discusses key economic concepts including the circular flow of income, GDP, the economic cycle, recession, and economic indicators. It defines the circular flow of income as showing flows of goods and services between households and firms. GDP is defined as the total market value of goods and services produced within a country in a year. The economic cycle and recession refer to periods of decline and growth in economic activity. Economic indicators such as inflation, interest rates, and Euribor are also defined.
The document discusses various methods for calculating and measuring national income and gross domestic product (GDP) of a country. It provides definitions and formulas for calculating gross national product (GNP), gross domestic product (GDP), net national product (NNP). It also discusses the expenditure approach and income approach to measuring GDP and how GDP relates to a country's overall economic activity and welfare.
This document defines and provides examples of key terms related to economic growth. It discusses:
- Economic growth is defined as an increase in a country's production of goods and services, and is positively associated with quality of life. It is measured in currency terms.
- Economic growth rate is the percentage change in real GDP from one period to the next.
- GDP per person divides a country's total GDP by its population to compare living standards between countries and over time.
- Population growth rate is the percentage change in a population from one period to the next.
- Examples are provided to demonstrate calculating growth rates of real GDP, population, and real GDP per person.
- Macroeconomics deals with aggregate economic indicators such as output, consumption, employment, investment and price levels of an entire economy. It analyzes performance, structure and decision-making of national, regional and global economies.
- Three major macroeconomic concerns are unemployment, inflation and output growth. Unemployment refers to those without work, inflation is a sustained increase in price levels, and output growth is changes in economic activity and development.
- Macroeconomics is important for understanding how the whole economy works, evaluating overall performance through national income, analyzing causes of economic issues, and understanding individual economic unit behavior in context of aggregates.
This document summarizes macroeconomic performance in India across four areas: foreign capital flows, human development indicators, the power sector, and globalization/privatization/liberalization. It provides details on foreign portfolio flows, foreign institutional investments, gender equality, healthcare, education, the power industry, and reforms related to capital flows and the economy. Key points include gradual liberalization of capital flows, a shift from debt to non-debt flows, improvements in gender equality and health/education indicators, issues facing the power sector, and the impact of reforms on foreign investment.
This document provides definitions and concepts related to macroeconomics and the macroeconomic environment of business. It defines macroeconomics as the study of the overall economy and discusses key macroeconomic objectives, indicators, and policies. It also explains concepts like GDP, GNP, inflation, money supply, and how they are measured. National income accounting and different economic systems are also summarized.
The document discusses economic planning, defining it as making decisions about how resources are used. It notes that in communist countries, the government makes both micro and macro economic decisions. It then lists some objectives and significance of economic planning, such as increasing national income, achieving full employment, industrial development, and self-sufficiency in food. In conclusion, it states that economic planning helps mobilize and allocate resources in a desired manner to achieve objectives like reducing inequality and balanced regional growth.
The document discusses key aspects of the Islamic fiscal system, including sources of revenue and areas of expenditure. It notes that early Islamic states primarily collected zakat and usher (custom duties) from Muslims, and jizya (poll tax) and kharaj (land revenue) from non-Muslims. Additional non-tax revenues included rents, war booty, and voluntary contributions. The document outlines principles for taxation and public borrowing in the Islamic economic framework.
This document provides information about macroeconomics and measuring national income. It discusses the key topics of macroeconomics including full employment, economic growth, price stability, and external balance. It also outlines the three approaches to measuring national income - the income approach, expenditure approach, and output approach. The roles of government in implementing monetary and fiscal policy to influence the national income are also covered.
Economic growth refers to an increase in a country's real GDP or output, measured as a higher value of goods and services produced, while economic development encompasses broader socioeconomic changes that improve living standards. Development considers changes in factors like income distribution, employment opportunities, education, health, and sustainability, whereas growth only focuses on quantitative increases in production. The Human Development Index provides a more comprehensive measure of a country's progress than GDP alone by also accounting for literacy, life expectancy, and other quality of life indicators.
The document discusses various economic measurements and factors that are used to evaluate the strength of a nation's economy, including Gross Domestic Product (GDP), standard of living, inflation rate, unemployment rate, productivity, and others. It provides examples and charts to illustrate trends in these measurements in the United States over recent decades, finding generally stable inflation, low unemployment, and increasing productivity and GDP.
Meaning of economic development, core values in economic development, Developed countries, Underdeveloped countries, Characteristics , Difference between Economic Growth and Economic Development.
The document discusses the differences between economic growth and economic development. It states that economic growth is a narrower concept, focused on increases in GDP, while economic development also considers improvements in human welfare factors like education, health, and living standards. The most accurate way to measure development is through the Human Development Index, which evaluates longevity, knowledge, and standard of living. Economic development leads to greater opportunities and productivity that can then enable continued economic growth.
This document provides an overview of unemployment and related economic concepts. It defines unemployment as when a person is available and willing to work but remains unhired. Several types of unemployment are described, including frictional, structural, seasonal, cyclical, classical, technological, and hidden unemployment. Ways to overcome different types of unemployment are outlined, such as retraining workers, increasing demand, and making labor markets more flexible. Finally, the economic costs of unemployment are mentioned, such as costs to individuals, families, local economies, and the overall economy when unemployment rates are high.
To maintain a strong economy, the federal government seeks to accomplish three policy goals: stable prices, full employment, and economic growth. In addition to these three policy goals, the federal government has other objectives to maintain sound economic policy. These include low or stable interest rates, a balanced budget (or at least a budget with a reduced deficit from the previous budget), and a trade balance with other countries.
When prices for goods and services increase sharply, the value of money is reduced, and it costs more to buy the same things. This condition is called inflation. When inflation is kept low, prices remain at the same level. Circumstances beyond the government's control can affect prices. A prolonged drought in the corn belt or an early freeze that hits the orange crop in Florida creates shortages that lead to higher prices. Higher prices for certain critical goods, such as oil, can create inflationary prices throughout the economy.
This document provides an introduction to macroeconomics. It discusses key macroeconomic concepts such as stocks and flows, equilibrium and disequilibrium, and the circular flow of income in closed and open economies. It also outlines macroeconomic goals like full employment and price stability. The development of macroeconomics from classical to Keynesian and monetarist theories is summarized. Finally, it discusses important macroeconomic indicators and policy tools like fiscal and monetary policy.
This document provides an overview of macroeconomics and the circular flow of income through several models. It discusses key concepts such as:
1. Macroeconomics studies the economy as a whole by looking at aggregates like total output and income, whereas microeconomics looks at individual units.
2. Common macroeconomic policy objectives are full employment, price stability, economic growth, and balance of payments equilibrium.
3. The circular flow of income can be modeled in a two-sector closed economy with households and firms or a three-sector model that includes government. Savings and investment are incorporated through financial markets to achieve equilibrium.
The indicators of indian economy ppt @ mba 2009Babasab Patil
The document discusses various leading economic indicators of the Indian economy such as GDP growth trends, inflation rates, interest rates, credit levels, exports, imports, foreign investment, stock market performance, monsoon rainfall, and development indicators. Leading indicators can provide useful insights into the future direction of the economy by signaling turning points in business cycles ahead of changes in broader economic conditions. Monitoring a basket of leading indicators allows for more accurate forecasting of the overall performance of the Indian economy.
This document discusses key economic concepts including the circular flow of income, GDP, the economic cycle, recession, and economic indicators. It defines the circular flow of income as showing flows of goods and services between households and firms. GDP is defined as the total market value of goods and services produced within a country in a year. The economic cycle and recession refer to periods of decline and growth in economic activity. Economic indicators such as inflation, interest rates, and Euribor are also defined.
The document discusses various methods for calculating and measuring national income and gross domestic product (GDP) of a country. It provides definitions and formulas for calculating gross national product (GNP), gross domestic product (GDP), net national product (NNP). It also discusses the expenditure approach and income approach to measuring GDP and how GDP relates to a country's overall economic activity and welfare.
This document defines and provides examples of key terms related to economic growth. It discusses:
- Economic growth is defined as an increase in a country's production of goods and services, and is positively associated with quality of life. It is measured in currency terms.
- Economic growth rate is the percentage change in real GDP from one period to the next.
- GDP per person divides a country's total GDP by its population to compare living standards between countries and over time.
- Population growth rate is the percentage change in a population from one period to the next.
- Examples are provided to demonstrate calculating growth rates of real GDP, population, and real GDP per person.
- Macroeconomics deals with aggregate economic indicators such as output, consumption, employment, investment and price levels of an entire economy. It analyzes performance, structure and decision-making of national, regional and global economies.
- Three major macroeconomic concerns are unemployment, inflation and output growth. Unemployment refers to those without work, inflation is a sustained increase in price levels, and output growth is changes in economic activity and development.
- Macroeconomics is important for understanding how the whole economy works, evaluating overall performance through national income, analyzing causes of economic issues, and understanding individual economic unit behavior in context of aggregates.
This document summarizes macroeconomic performance in India across four areas: foreign capital flows, human development indicators, the power sector, and globalization/privatization/liberalization. It provides details on foreign portfolio flows, foreign institutional investments, gender equality, healthcare, education, the power industry, and reforms related to capital flows and the economy. Key points include gradual liberalization of capital flows, a shift from debt to non-debt flows, improvements in gender equality and health/education indicators, issues facing the power sector, and the impact of reforms on foreign investment.
This document provides definitions and concepts related to macroeconomics and the macroeconomic environment of business. It defines macroeconomics as the study of the overall economy and discusses key macroeconomic objectives, indicators, and policies. It also explains concepts like GDP, GNP, inflation, money supply, and how they are measured. National income accounting and different economic systems are also summarized.
The document discusses economic planning, defining it as making decisions about how resources are used. It notes that in communist countries, the government makes both micro and macro economic decisions. It then lists some objectives and significance of economic planning, such as increasing national income, achieving full employment, industrial development, and self-sufficiency in food. In conclusion, it states that economic planning helps mobilize and allocate resources in a desired manner to achieve objectives like reducing inequality and balanced regional growth.
The document discusses key aspects of the Islamic fiscal system, including sources of revenue and areas of expenditure. It notes that early Islamic states primarily collected zakat and usher (custom duties) from Muslims, and jizya (poll tax) and kharaj (land revenue) from non-Muslims. Additional non-tax revenues included rents, war booty, and voluntary contributions. The document outlines principles for taxation and public borrowing in the Islamic economic framework.
This document provides information about macroeconomics and measuring national income. It discusses the key topics of macroeconomics including full employment, economic growth, price stability, and external balance. It also outlines the three approaches to measuring national income - the income approach, expenditure approach, and output approach. The roles of government in implementing monetary and fiscal policy to influence the national income are also covered.
Economic growth refers to an increase in a country's real GDP or output, measured as a higher value of goods and services produced, while economic development encompasses broader socioeconomic changes that improve living standards. Development considers changes in factors like income distribution, employment opportunities, education, health, and sustainability, whereas growth only focuses on quantitative increases in production. The Human Development Index provides a more comprehensive measure of a country's progress than GDP alone by also accounting for literacy, life expectancy, and other quality of life indicators.
The document discusses various economic measurements and factors that are used to evaluate the strength of a nation's economy, including Gross Domestic Product (GDP), standard of living, inflation rate, unemployment rate, productivity, and others. It provides examples and charts to illustrate trends in these measurements in the United States over recent decades, finding generally stable inflation, low unemployment, and increasing productivity and GDP.
Meaning of economic development, core values in economic development, Developed countries, Underdeveloped countries, Characteristics , Difference between Economic Growth and Economic Development.
The document discusses the differences between economic growth and economic development. It states that economic growth is a narrower concept, focused on increases in GDP, while economic development also considers improvements in human welfare factors like education, health, and living standards. The most accurate way to measure development is through the Human Development Index, which evaluates longevity, knowledge, and standard of living. Economic development leads to greater opportunities and productivity that can then enable continued economic growth.
This document provides an overview of unemployment and related economic concepts. It defines unemployment as when a person is available and willing to work but remains unhired. Several types of unemployment are described, including frictional, structural, seasonal, cyclical, classical, technological, and hidden unemployment. Ways to overcome different types of unemployment are outlined, such as retraining workers, increasing demand, and making labor markets more flexible. Finally, the economic costs of unemployment are mentioned, such as costs to individuals, families, local economies, and the overall economy when unemployment rates are high.
To maintain a strong economy, the federal government seeks to accomplish three policy goals: stable prices, full employment, and economic growth. In addition to these three policy goals, the federal government has other objectives to maintain sound economic policy. These include low or stable interest rates, a balanced budget (or at least a budget with a reduced deficit from the previous budget), and a trade balance with other countries.
When prices for goods and services increase sharply, the value of money is reduced, and it costs more to buy the same things. This condition is called inflation. When inflation is kept low, prices remain at the same level. Circumstances beyond the government's control can affect prices. A prolonged drought in the corn belt or an early freeze that hits the orange crop in Florida creates shortages that lead to higher prices. Higher prices for certain critical goods, such as oil, can create inflationary prices throughout the economy.
This document provides an introduction to macroeconomics. It discusses key macroeconomic concepts such as stocks and flows, equilibrium and disequilibrium, and the circular flow of income in closed and open economies. It also outlines macroeconomic goals like full employment and price stability. The development of macroeconomics from classical to Keynesian and monetarist theories is summarized. Finally, it discusses important macroeconomic indicators and policy tools like fiscal and monetary policy.
This document provides an overview of macroeconomics and the circular flow of income through several models. It discusses key concepts such as:
1. Macroeconomics studies the economy as a whole by looking at aggregates like total output and income, whereas microeconomics looks at individual units.
2. Common macroeconomic policy objectives are full employment, price stability, economic growth, and balance of payments equilibrium.
3. The circular flow of income can be modeled in a two-sector closed economy with households and firms or a three-sector model that includes government. Savings and investment are incorporated through financial markets to achieve equilibrium.
Running head Fundamentals of Macroeconomics 1Fundamentals.docxcharisellington63520
Running head: Fundamentals of Macroeconomics
1
Fundamentals of Macroeconomics
2
Fundamentals of Macroeconomics
Week 2 Assignment
ECO/372
Macro Economics is a study which is concerned with the economy as a whole and the level of total output which is also referred to as national income is a very important variable in any economy. National income measures the value of an output produced in an economy over a period of time and the policy makers should be aware of the level of economic activity taking place within the country on behalf of the nationals.
One of the most important objectives of the government is to increase the level of the rate of economic growth which is possible only be measuring the national income. The main uses of the national income statistics are:
1. It shows the current allocation of resources,
2. It helps the government in economic planning,
3. It helps measures the country’s standard of living, and
4. It helps in the comparison of the living standard between different countries.
There are some important concepts of National Income such as Gross Domestic Product, Gross National product, net National product and The GDP per capita.
Gross domestic product: “GDP is the total value of all output produced using resources located within the economy over a given period of time”. It refers to the market value of all final goods and services produced within a country in a given period (O'Sullivan, Arthur).
GDP measures the annual value of all economic activity taking place within the economy and the GDP measures are on a value added basis in order to avoid the problem of double counting. There are three ways of calculating the GDP but the results of all the three methods should be the same. They are:
· The Output Method.
· The Income Method.
· The Expenditure Method.
Nominal GDP: Also known as the money GDP is measured in terms of the prices operating in the year in which the output is produced. it is sometimes referred to as GDP at market prices. It can give a wrong impression about the performance of the economy, because of the changes in the value of money which depends on the price level, which is subject to changes. Normally the Nominal GDP converted into Real GDp which is a measure of adjustment for inflation is used to calculate the National performance. Real GDP therefore is: money GDP/ the price index of the current year X Price index of the base year or money GDP/ GDP deflator of the current year X Price index of the base year (HM Treasury, Background information on GDP and GDP deflator).
Unemployment rate: Employment is the total number of people with a job which includes the employees, businessmen and self employed people. The number employed may change over time due to many factors. While unemployment refers to those people who have registered, able, available and willing to work at the going wage rate at any suitable job but cannot find employment. Unemployment is measured at a point of time and.
This document provides an introduction and overview of macroeconomics. It defines key concepts in macroeconomics like stocks and flows, equilibrium and disequilibrium. It outlines the development of macroeconomics from classical economists to Keynes and modern macroeconomics. It also discusses the goals of macroeconomic policy like full employment and price stability. The document concludes by discussing tools used in macroeconomic policy including fiscal policy and monetary policy.
The slide contains a concise overview of the essential components of an effective Demand Management Policy. It defines demand management policy and emphasizes its importance in optimizing resource allocation and balancing supply-demand dynamics. The slide outlines the primary objectives of demand management, which include stabilizing prices, enhancing customer satisfaction, and reducing operational costs. It highlights key elements of a demand management policy, such as forecasting techniques, inventory management strategies, and demand shaping tactics. Visual aids like graphs, charts, and diagrams are incorporated to enhance comprehension and illustrate concepts effectively.
Fiscal policy aims to maintain full employment, economic stability, and steady growth through tax rates and government spending. In developing economies specifically, fiscal policy seeks to accelerate capital formation and investment, encourage employment, control inflation, promote equitable income distribution, and achieve balanced economic development. It directs resources toward socially desirable investment and expands both public and private sector investment.
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DB2
7 Economic Policy Challenging Incrementalism
Incremental and Nonincremental Policymaking
Traditionally, fiscal and monetary policies were made incrementally; that is, decision makers concentrated their attention on modest changes—increases or decreases—in existing taxing, spending, and deficit levels, as well as the money supply and interest rates. Incrementalism was especially pervasive in annual federal budget making. The president and Congress did not reconsider the value of all existing programs each year, or pay much attention to previously established expenditure levels. Rather last year’s expenditures were considered as a base of spending for each program, attractive consideration of the budget proposals focused on new items or increases over last year’s base.
But crises often force policymakers to abandon incrementalism and reach out in non-incremental directions. In economic policy, the president and Congress and the Fed are pressured to “do something” in the face of a perceived economic crisis, even if there is little consensus on what should be done, or even whether there is anything the federal government can do to resolve the crisis. As we shall see later in this chapter, the recession that began in 2008 caused policymakers to search for new policies and make dramatic changes in spending and deficit levels and to undertake unprecedented measures to prevent the collapse of financial markets and avoid a deep recession.
Fiscal and Monetary Policy
Economic policy is exercised primarily through the federal government’s fiscal policies—decisions about taxing, spending, and deficit levels—and its monetary policies—decisions about the money supply and interest rates.
Fiscal policy is made in the annual preparation of the federal budget by the president and the Office of Management and Budget, and subsequently considered by Congress in its annual appropriations bills and revisions of the tax laws. These decisions determine overall federal spending levels, as well as spending priorities among federal programs. Together with tax policy decisions (see Chapter 8), these spending decisions determine the size of the federal government’s annual deficits or surpluses.
Monetary policy is the principal responsibility of the powerful and independent Federal Reserve Board—“the Fed”—which can expand or contract the money supply through its oversight of the nation’s banking system (see “The Fed at Work” later in this chapter). Congress established the Federal Reserve System and its governing Board in 1913 and Congress could, if it wished, reduce its power or even abolish the Fed altogether. But no serious effort has ever been undertaken to do so.
Economic Theories As Policy Guides
The goals of economic policy are widely shared: growth in economic output and standards of living, full and productive employment of the nation’s work force, and stable prices with low inflation. But a variety of economic theories compete for preeminence as ways of achiev.
1. The document discusses economic challenges facing contemporary business, including microeconomics, macroeconomics, different market structures, the business cycle, and monetary and fiscal policy.
2. It defines microeconomics as the study of small economic units like individuals and businesses, and macroeconomics as issues affecting the entire society.
3. The four types of market structure are pure competition, monopolistic competition, oligopoly, and monopoly. Monetary and fiscal policy tools are used to manage the economy.
This document provides an introduction to macroeconomics. It discusses the key components and concerns of macroeconomics including inflation, output growth, unemployment, and income distribution. It also covers aggregate demand and supply, the circular flow model, and the roles of households, firms, government and the international sector in the macroeconomy. Government policies aim to achieve price stability, economic growth, full employment, and an equitable distribution of income.
This document provides an overview of macroeconomics and key macroeconomic concepts. It defines macroeconomics as the study of the overall averages and aggregates of an economy as a whole. The document outlines the scope, importance, objectives, and instruments of macroeconomic policy, including fiscal policy, monetary policy, and others. It also defines basic macroeconomic concepts such as stocks, flows, and different economic systems including capitalism, socialism, and mixed economies. The document discusses economic planning through five-year plans and the national budget. It concludes by defining important economic indicators used to measure and analyze the macroeconomy, including GDP, GNP, national income, unemployment, inflation, and more.
This document discusses several key macroeconomic variables that governments must understand in order to effectively manage the economy, including:
- Gross Domestic Product (GDP), which measures total economic output and income. A higher GDP indicates a more economically solvent nation.
- The unemployment rate, which is the percentage of the labor force that is unemployed but seeking work. An unemployment rate of around 6% is considered full employment.
- The inflation rate, which is the rate of change in the overall price level, typically measured by price indexes like the Consumer Price Index (CPI).
- Interest rates, which can refer to hundreds of different nominal rates across different durations and borrower types.
- Investment,
Macroeconomics deals with the aggregate or total level of key economic variables for an entire economy, such as output, consumption, investment, employment, and prices. It examines unemployment, inflation, and output growth. The document provides definitions and explanations of these macroeconomic concepts as well as the scope and importance of macroeconomics in understanding national economies and formulating policy.
The document discusses instruments for maintaining economic stability, including monetary policy, fiscal policy, and direct controls. It then defines and explains eight macroeconomic ratios: saving income ratio, value added output ratio, consumption income ratio, capital labor ratio, input-output ratio, land's share of income, capital's share of income, and cash income ratio. Each ratio compares different economic variables and provides useful information for businesses, governments, and analysts.
This document discusses various factors that determine economic growth, including monetary policy, fiscal policy, coordination between monetary and fiscal policy, and factors like capital formation, entrepreneurship, technological progress, and population growth. It also outlines problems that can hinder economic growth, such as poverty, capital shortage, rapid population growth, and difficulties adopting new technologies.
Role of fiscal policy in economic development of under developed countriesRebekahSamuel2
Fiscal policy in underdeveloped countries aims to mobilize resources, accelerate economic growth, encourage socially optimal investment, induce private investment and capital formation, provide employment opportunities, promote economic stability, check inflationary tendencies, increase national income, ensure proper distribution of income and wealth, provide subsidies to support consumption and production among the poor, reallocate resources to more productive sectors, and provide incentives to increase overall production and productivity.
DEVELOPMENT STUDIES AND ETHICSDiploma and Certificate Programmes.docxlynettearnold46882
DEVELOPMENT STUDIES AND ETHICS
Diploma and Certificate Programmes
BBB 1207 DEVELOPMENT STUDIES AND ETHICS
THE CONCEPT OF DEVELOPMENT AND UNDER-DEVELOPMENT
What is development?
In general, development is the process of improving the quality of human life.
The economic view of development is that it is the capacity of a national economy whose initial economic condition has been more or less static for a long period of time, to generate and ascertain an annual increase in its Gross Domestic Product (GDP) at the rate of 5% to 7%.
Development includes: quantity of resources available, equitable distribution of income, people’s quality of life e.g. access to education, healthcare, employment opportunities, security, etc.
· Development is a multi-dimensional process involving major changes in social structures, personal attributes and national institutions.
· Development is progressive
· The new economic view of development defines economic development in terms of its reduction or elimination of poverty, inequality and unemployment within the context of a growing economy.
Underdevelopment:
This is a state of inadequate development. It is characterized by diverse problems including unemployment, low level of technology and skills, under-utilization of resources, low literacy levels, confusion and ignorance, hopelessness, etc. It affects more than 3 billion people in the world.
Objectives of development
1. To increase availability and widespread distribution of basic life-sustaining goods such as food, shelter, security and health.
2. To raise the standards of living with emphasis on higher income, better education and greater attention to cultural and human values, all of which serve not only to enhance material well-being but also to generate individual and national esteem.
3. Expansion of the range of economic and social choices available to individuals and the nations in order to free them from servitude and dependency.
Core values of development
(i) Sustenance: This means the ability to meet basic needs. All people have certain basic needs without which life would be impossible. These life-sustaining human needs include food, shelter, health and protection. Their absence implies a condition of absolute underdevelopment.
· A basic function of all human activity is to provide as many people as possible with the means of overcoming the helplessness and misery arising from lack of the above.
· Without sustained and continuous economic progress at the individual as well as society level, the realization of human potential would not be possible.
(ii) Self-esteem : This means a sense of worth and self respect
· The nature and form of this self-esteem may vary from society to society, culture to culture.
(iii) Freedom from servitude: This means human freedom i.e. emancipation from alienating materials e.g. conditions of life and from social servitude to nature, ignorance, other people, misery, institutions and dogmatic beliefs.
· Fr.
This document provides an overview of key concepts in macroeconomics. It defines macroeconomics as dealing with the performance and structure of an economy as a whole, rather than individual markets. It discusses important macroeconomic variables like output, income, unemployment, inflation, aggregate demand and supply. It also covers concepts like the consumption function, national income, GDP, GNP, economic growth, and the limitations of macroeconomic analysis.
1) During the colonial period in Sri Lanka, the British government introduced poverty alleviation measures like food subsidies and price controls on rice and flour. Reports by British scholars also influenced social development and poverty measures.
2) The Department of Social Services was established in 1948 at independence. Its objectives included national administration of welfare schemes, social welfare for disadvantaged groups, and relief payments.
3) After independence, poverty alleviation programs like Janasaviya and Samurdhi were administered through government authorities, departments, and community organizations at local levels. The programs aimed to support vulnerable populations through food aid and other assistance.
This document discusses development economics and concepts related to measuring economic development. It addresses questions about the role of the state in economic development, how technological advances from neighboring countries could benefit Sri Lanka, criticisms of using GNP to measure national welfare, and the differences between income-based measures of inequality and social measures like the Human Development Index. The document provides definitions and explanations for key economic development topics. It also analyzes Sri Lanka's progress on factors like health, education, poverty, and gender disparities based on data from sources like the UN and Central Bank of Sri Lanka.
Film, radio, and television emerged over the past 150 years and have gradually taken over areas of perception previously reserved for classical arts like painting, music, and theater. Photography was invented in 1839 and expanded rapidly. Film rose as a worldwide industry in the early 1900s, and radio emerged strongly in the 1920s. Television became the mass medium from the 1960s onward. These audiovisual inventions impacted one another - radio declined as film and TV provided both sound and images, while film was later impacted by TV's variety of entertainment formats and integrated advertising. The mass media have both positive and negative social dimensions. Positively, they spread information and connect people globally, but they can also distort cultures, promote unhealthy ideals,
The document discusses the importance of copyright law and ethical journalism.
Regarding copyright law, it provides authors protection against unfair use of their work. Copyright law has expanded over time to protect more types of creative works. The purpose of copyright is to encourage creative works while allowing creators to benefit economically and providing public access.
For ethical journalism, key principles include responsibility, accuracy, objectivity, and fair play. Adhering to these principles builds credibility and trust between media and the public, which is essential for peaceful coexistence in society. International organizations have also established principles for ethical journalism around truth, objectivity, respecting privacy, and cultural diversity.
Intra-personal communication is the foundation for meaningful dialogue. It involves communication within oneself through sense-making, interpreting communication, speaking aloud, writing thoughts, and daydreaming. Encoding and decoding are essential parts of the communication process, where encoding involves putting ideas into codes and decoding is assigning meaning to those ideas. There are three main types of noise that can interfere with communication: semantic noise due to confusion over word meanings, mechanical noise from issues with devices used for communication, and environmental noise from distracting external sounds. The socio-cultural and psycho-personal backgrounds of communicators are important to understand in the communication process, as they can impact how messages are interpreted. A mass audience is heterogeneous, with members coming from varied
The document discusses Sri Lanka's economic transition from a plantation economy in the 1950s to a more diversified economy by the 1990s. It provides details on:
1) Sri Lanka's transition from an export-oriented to development-oriented economy in the 1950s, which led to changes in factors of production and a decline in the prominence of the plantation sector.
2) How the plantation sector was affected by land reforms in the 1970s that transferred ownership of estates from foreign companies to the government.
3) How fiscal policy and government expenditures played a role in Sri Lanka's economic development from the 1950s to 1990s, through subsidies, investments in infrastructure, and tax policies. The government pursued different fiscal
The author identifies several critical barriers to formulating sociological theories to explain social phenomena. The first barrier is the absence of theoretical models in sociology due to its newness as a discipline. The second is a lack of confidence in sociology's ability to explain social issues. The third is sociology's weakness in developing theories, which require being creative, comprehensive, and building on prior understanding. The author argues that sociological investigations should study social issues at a macro level rather than individual level due to limitations with empirical data at large scales. Recommendations include developing theories linking macro and micro levels, incorporating more data into qualitative studies, and applying additional research methods like surveys to strengthen social investigations.
This document discusses development economics and measures of economic development. It addresses several questions:
1) It agrees that development economics concerns social, political, and institutional mechanisms to improve living standards for masses. This includes raising income, access to goods like food and education, and increasing freedom and choice.
2) It outlines several roles for the state in economic development, such as engaging in agriculture, industry, and services to promote growth and facilitate citizens.
3) It explains how Sri Lanka could benefit from technological advances in neighboring countries, but notes challenges of adopting new technologies due to costs and lack of expertise among farmers.
The document discusses Sri Lanka's dual economy and economic challenges after independence in 1948. It had a prosperous plantation export sector and traditional agriculture sector (dual economy). By the 1950s, Sri Lanka had a high standard of living compared to other Asian nations. However, issues emerged like extensive welfare spending beyond revenue levels, inconsistent policies due to shifting governments, civil unrest, and dependence on plantation exports. The 1977 economic policies saw major fiscal policy changes like trade liberalization, foreign exchange relaxation, and private sector incentives to spur growth amid civil war challenges.
The document discusses economic liberalization in Sri Lanka following the 1977 election. It makes three main points:
1) The new government embarked on a trade liberalization program to stimulate the private sector and attract foreign investment, moving away from import substitution. This aimed to revitalize the economy.
2) In the initial period, economic growth and export expansion increased significantly compared to pre-1977. However, challenges emerged like rising inequality and slowing growth in the mid-1980s.
3) The effects of liberalization were mixed - while growth increased initially, poverty and inequality also rose in some periods, and macroeconomic imbalances emerged. Overall impacts depended on other policies and institutional factors.
This document provides an analysis of the 13th Amendment to the Sri Lankan constitution regarding devolution of power. It discusses the historical context of power sharing proposals and the Indo-Lanka Agreement that led to the 13th Amendment. The author argues that the 13th Amendment was not sincerely intended to devolve power and risks undermining Sri Lankan sovereignty. Instead, internal conflicts should be resolved through attitudinal change, democratic empowerment for all communities, and equitable economic development across regions.
The document discusses different types of market failures including imperfect competition, externalities, absence of property rights, public goods, and imperfect information. It provides examples of each type of market failure and how they can lead to inefficient market outcomes. Specifically, it examines how externalities from production and consumption can create divergence between private and social costs/benefits, resulting in an inefficient allocation of resources where the socially optimal quantity is not produced. This market failure occurs because prices only reflect private costs and benefits, ignoring external effects on third parties.
This document provides an overview of monetary and banking systems. It defines money and discusses its origins, characteristics, types, and functions. It examines the demand for money, including transactions, precautionary, and speculative demand. It also discusses the money supply in Sri Lanka and classifies it into different monetary aggregates like M1 (narrow money supply), M2 (broad money supply), and M2b (consolidated broad money). Finally, it discusses the role of the central bank in providing monetary aggregates and regulating the financial system.
This document provides an overview of price levels and inflation in Sri Lanka. It defines key terms like price level, inflation, deflation, and price indices. It describes Sri Lanka's main price indices - the Colombo Consumer Price Index (CCPI) and Wholesale Price Index (WPI) - and how they are calculated. It also shows data on the CCPI from 2010-2012, including monthly and annual percentage changes. Overall, the document discusses how economic price stability is important and how various price indices are used to measure inflation in Sri Lanka.
This document discusses macroeconomic equilibrium and the components of aggregate expenditure. It defines equilibrium as occurring when aggregate demand equals aggregate supply. The key components of aggregate demand are defined as private consumption, investment, government spending, and net exports. Private consumption depends on disposable income, while investment depends on factors like demand and business expectations. The document also discusses aggregate supply and how it is represented by a 45-degree line, indicating firms will supply whatever level of output is demanded.
This document discusses production and costs at the firm level. It begins by defining firms and their objectives to maximize profits. It then explores the production process, explaining that firms use inputs like labor and capital to produce outputs. It discusses the economists' view of costs, distinguishing between explicit costs and implicit opportunity costs. It also explains the differences between accounting profits, economic profits, and normal profits. The document then examines production functions and the laws of diminishing and increasing returns to scale in both the short-run and long-run. It provides graphs and examples to illustrate these concepts.
The document discusses key concepts related to demand, including the determinants of demand, individual demand curves, market demand curves, the law of demand, and how movement along a demand curve represents a change in quantity demanded. It provides examples of demand schedules and graphs to illustrate individual and market demand curves. Key terms discussed include substitute goods, complementary goods, and the impact of income changes on demand.
This document provides an introduction to economics. It begins by defining economics as the study of how people choose to utilize scarce resources to satisfy unlimited wants. It then discusses microeconomics and macroeconomics. Several economic concepts are introduced, including opportunity cost, supply and demand, and comparative advantage. Two basic economic models are described: the circular flow diagram and the production possibilities frontier. The document emphasizes that economics aims to study the world scientifically and uses assumptions and models to better understand complex real-world systems. It ends by defining the four factors of production.
The document discusses socio-economic changes that occurred in Sri Lanka under British colonial rule, including the abolition of the land tenure and rajakariya systems. It describes how the rajakariya system established land grants and required essential services from villagers. Attempts were made to abolish it under North and Maitland with mixed results. The Colebrook reforms of 1829 fully abolished rajakariya and facilitated the development of plantation agriculture, particularly coffee, establishing Sri Lanka's plantation economy.
This document provides an overview of international trade topics including theories of international trade, reasons for trade, and arguments against free trade. It discusses Adam Smith's absolute advantage theory and David Ricardo's theory of comparative advantage. It also examines reasons for protectionism, including protecting infant industries and preventing dumping. The document is authored by S.M. Irshad and appears to be lecture notes or material for a course on international trade and finance.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...Donc Test
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
1. GCE A/L Economics
Grade 12.
Chapter - 4
Lecturer – S. M. Irshad
BA in Social Sciences (OUSL)
MA in Economics (MKU) India. in progress.
Dip. in Governance, Democratization & Public Policy(CISS).
E-mail – irshad.sahabdeen@yahoo.com
1
2. 4. Demonstrates preparedness to compile
National Accounts within macroeconomic
framework.
4.1 Investigates macroeconomic
objectives.
4.2 Investigates key Macroeconomic
variables
4.3 Analyses alternative approaches to
national accounting using the circular
flow of national income.
4.4 . Demonstrates preparedness to
compile National Accounts using the
output approach.
4.5 Investigates various concepts of2
3. 4.6 Demonstrates preparedness to
compile National Accounts using the
expenditure approach..
4.7 Demonstrates preparedness to
compile National Accounts using the
income approach.
4.8 Investigates the applications of
national accounts.
3
4. What is Macroeconomics?
The study of the economy as a whole, and
the variables that control the
Macroeconomy.
The study of government policy meant to
control and stabilize the economy over time,
that is, to reduce fluctuations in the economy.
The study of monetary policy, fiscal policy, and supply-side
economics. the major variables describing the macro-
economy are the same. the three major policy approaches
are the same. but the quality to which these policies are
applied differ from one country to another; this because the
political process from which these policies emerge are
unique to each country. 4
5. Who introduced macroeconomics, and
what was its major objectives?
John Maynard Keynes, an English
economist, hence macroeconomics is
also referred to as Keynesianism.
Keynes argued that by itself the
market is unable to generate enough
savings (capital) to sustain
investment at full employment
levels; and that this could be
achieved only with the periodic
sharp increase in government
5
6. Macroeconomic Objectives
Full Employment.
Price Stability.
Economic Growth.
Balance of Payments
stability.
Equity in Income and
Wealth Distribution.
Sustainable Development.
6
7. Full Employment
Achieving the objective of full employment means
holding national product at its potential, or full
employment level. It does not mean achieving zero
unemployment. Indeed, zero unemployment is an
impossibility in any real economy because of the normal
turnover of labour.
Turnover occurs because people leave one job to take,
or look for, another, and because there are always some
people leaving the labor force due to retirement, or
death, and others entering it.
As a result, there is always a pool of people who are
unemployed because they are currently between jobs or
looking for their 1st job. Such unemployment, which is
due to the normal turnover of labour, is called frictional
unemployment. It is the amount of unemployment
that exists when output is at its potential level.
7
8. Accordingly, a more realistic interpretation
of full employment suggests itself; full
employment is achieved when the number
of registered unemployed people is equal
to number of job vacancies.
The labour market consists of 2 groups,
namely households who supply labour and
firms who demand labour.
When the supply of labour is equal to the
demand for labour, the economy is in fully
employment. When labour supply exceeds
the demand, there is surplus labour. This
results in unemployment in the economy.
This is a major economic problem in Sri
Lanka since independence.
8
9. LABOUR
FORCE
ECONOMICALLY
ACTIVE POPULATION
– persons who are
employed and who
are willing to work,
but unemployed.
ECONOMICALLY
INACTIVE
POPULATION – who
are unable to engage
in productive
employment, they
include children,
elderly and disabled.
9
11. In Sri Lanka the overall employment levels
remained stagnant until the late 1970s. Slow
economic growth during that period did not
permit to absorb the growing labour force in
that period.
With the economic liberalization of the
economy in 1977, the GDP growth
accelerated and more jobs were created in
the newly growing sectors like manufacturing
, banking and financial services, construction
and trade. As a result , the total employment
rose from 3.8 million in 1973 to 4.7 million by
1981/82. it reached 6.4 million by 2002.
Today, Sri Lanka’s total labour force reached
to 8.864 million by 2013 compared to 8.254
million in 2012. 11
13. Price Stability
Economic and price stability is a situation
where there are no wide fluctuations in the
general price level in an economy which helps
to achieve sustainable economic growth. When
the prices fluctuate at a low rate, they would
not have any significant influence on economic
decisions of participants of an economy, viz.
households and firms.
Therefore, stable prices would not distort the
economic decisions regarding what to produce
and how to produce, thus enabling efficient
allocation of resources in the economy leading
to economic stability.
13
14. Price Stability is the economic term used to refer
to a situation where the general price level covering
Consumer goods remains unchanged or if it does
change, it happens at a low rate so that it is not
strong enough to make any significant influence on
economic decisions of participants in an economy,
viz. households and firms.
We encounter prices in different forms in our daily
activities as buyers or sellers when we get engaged
in consumption, investment, production or trade.
In a market economy, price changes are a
common phenomenon depending on the demand
for and supply of goods and services. Since prices
change in both directions and in different
magnitudes, it is difficult to figure out the general
movement in prices by examining each individual
price change in isolation 14
15. The price level is usually examined through a
“basket of goods” approach, in which a
collection of consumer based goods and
services are examined in aggregate; changes
in the aggregate price over time will push the
index measuring the basket of goods higher.
Price levels provide a snapshot of prices at a
given time, making it possible to review
changes in broad price level over time.
As price rises (inflation), or fall (deflation),
consumer demand for goods is also
affected, which leads broad production
measures like gross domestic product
higher or lower.
15
16. Economic Growth
Economic growth is a major concern of
Macroeconomics. Economic growth
means a rise in real income or real
output.
Very often, economists use the rate of
change of national income to measure
economic growth.
Most of the countries measure the GDP
growth in real terms. Economic growth in a
particular year is measured as the rate of
change in real GDP over the previous year. 16
17. Sources of economic growth ; the total output
or GDP of an economy depends on the
quantity and quality of various resources that
are used as inputs in production. These
include land , labour, capital and raw materials.
Producers can raise their output by the
following 2 methods:
By increasing factors of production: land,
labor, capital and raw material.
By increasing the productivity of factors of
production: this means an increase in output
with the same quantities of inputs. This can be
achieved by several ways:
A. By improving human capital through skills
development.
B. By technological progress.
17
18. Balance of Payments
Stability
Maintenance of equilibrium in the external
payments positions, known as the balance
of payments equilibrium and also is one of
the macroeconomic goals.
Continuous external deficits reduce the
country's capacity to import and leads to an
accumulation of foreign debt. Hence it is
important to reduce the external deficits.
The main policy instruments that are used
to attain macroeconomic stability is the
fiscal policy.
18
19. The use of government spending,
taxation and borrowings for the
achievement of macroeconomic stability.
The monetary policy also known as the
management of the money supply, cost of
money and credit conditions by the
central bank so as to achieve
macroeconomic goals.
These two sets of policies are closely
interrelated, and they may be
contradictory at times. For example,
when the government runs a high budget
deficit, monetary authorities would find it
difficult to mange the money growth. 19
20. Income & Wealth
Distribution
Justice or fairness in the manner in which the
economy’s output is distributed between individuals.
distributional equity is some times expressed in terms of
the distribution of income, of wealth.
This is also a policy concerned with altering the pattern
of the personal distribution of income in an economy,
mainly with social rather than economic objectives in
mind.
The general aim of such a policy is to achieve a more
equitable distribution of income as between the various
sections of the community so as to ensure that
everybody is provided with some minimum standard if
living. The transfer of income from one section to
another is achieved primarily by the use of a
progressive taxation system and a verity of welfare
provisions. Example. Housing schemes, old age20
21. Sustainable Development
Sustainable development is the
development which meets the needs of the
present generation without compromising
the needs of future generations.
The term 'sustainable development' was
used by the Brundtland Commission, which
coined what has become the most often-
quoted definition of sustainable
development: "development that meets the
needs of the present without compromising
the ability of future generations to meet
their own needs.
21
22. In 1987, the United Nations released the
Brundtland Report, which included what
is now one of the most widely
recognized definition said above.
The concept of sustainable development
divided in to three constituent parts:
environmental sustainability, economic
sustainability and socio-political
sustainability.
In real terms all the macroeconomic
variables should be directed towards
economic development so as to mange
22
23. According to the Brundtland report, the
above definition contains two main key
concepts:
the concept of 'needs', in particular the
essential needs of the world's poor, to
which overriding priority should be given;
and
the idea of limitations imposed by the
state of technology and social
organization on the environment's ability
to meet present and future needs.
23
24. Macroeconomic Variables
The main variables which decide the
economic activities are known as
macroeconomic variables.
Macroeconomic variables can be shown
as follows;
National Output.
Employment.
The General Price Level.
Balance of Payment.
Foreign Exchange Rate.
24
25. National Output
The nation's total output is loosely
described as its national product, national
output or national income. Precise
measures ad their definitions are
discussed in further in following topics.
In the meantime, note that this total
product can be calculated by adding up
the money values of all the goods and
services that are produced in the
economy over some period of time,
usually taken as a year.
25
26. Employment
This is an important variable which measure
the unemployment rate and the total labour
force. The unemployment rate is equal to the
number of unemployed people divided by the
total labour force.
26
General Price Level
• Price stability is a situation where there are no
wide fluctuations in the general price level in an
economy which helps to achieve sustainable
economic growth. When the prices fluctuate at a
low rate, they would not have any significant
influence on economic decisions of participants of
an economy, viz. households and firms.
27. Balance of Payments &
Foreign Exchange
RateAll international transactions are
recorded in what are known as
a country's balance of
payments. These transactions
are influenced by the exchange
rate, which is the rate at which a
country's own currency
exchanges for foreign 27
28. Business Cycle
( Trade Cycle)
Cyclical fluctuations in the level
of economic activity in an
economy can be observed by
examining annual changes in
real national income (or real
output ) over a long period of
years; these changes are
inversely related to variations
in the rate of unemployment. 28
29. “Business (Trade )
Cycle – a trade cycle
depicts fluctuations
in the level of
economic activity
over a period of
time.” 29
30. The business cycle is characterized by four
phases;
1. Depression – a period of rapidly falling aggregate
demand accompanied by very low level of output and
heavy unemployment, which eventually reaches the
bottom of the trough;
2. Recovery – an upturn in aggregate demand
accompanied by rising output and a reduction in
unemployment;
3. Boom – aggregate demand reaches and then
exceeds sustainable output levels (potential GNP) as
the peak of the cycle is reached. Full employment is
reached and the emergence of excess demand
causes the general price level to increase (inflation);
4. Recession – the boom comes to an end and is
followed by recession. Aggregate demand falls,
bringing it it initially, modest falls in output and30
32. National Accounting using the
Circular Flow of National Income.
Economists illustrate the money
flow by using a diagram that is
known as the circular flow model.
A model is usually a smaller,
simplified version of the real thing.
An economic model shows us how
our economy functions, tracing the
flow of money , resources, and
goods and services. 32
33. Two Sector Model
Initially, let us assume that there are only two
sectors in the economy; the household and
business sectors, as shown in the figure 1.
households supply factors of production to firms in
the business sector.
These factors are land , labour and capital. Firms
make payments to households in exchange for the
factors of production that they supply. Using their
factor incomes, households buy goods and
services from firms. In return, households pay the
value of these goods and services to firms.
This is shown as consumption spending ( =C ) in
the diagram. You may have noticed that there are
only 2 markets in this economy; goods and
services market and factor market.
33
35. In the above economy; households spend their entire
income to buy goods from firms. Thus the total income
(=Y) received by households is equal to total expenditure
(=E) paid by them to firms in this economy. This may not
be true, because people usually save a part of their
income in their banks.
Therefore, we need to expand our diagram to consider
savings. For this purpose, let us introduce financial
sector (banks) to our economy, as shown in figure 2. so,
households save a part of their income in banks. These
savings (=S) become deposits held with banks. The
savings go out of the circular flow, because households
do not spend that portion of income to buy goods and
services.
Therefore, we consider savings a leakage. When firms
borrow from banks, the savings come back to the flow as35
37. Three Sector Model
So far, we have assumed that there is no
government, but this is not a realistic
assumption, as all countries have
governments. Therefore, let us introduce a
government into our economy, as shown in
figure 3.
The government could influence the circular
flow in 2 ways; one is, it collects taxes (=T)
from households and firms, and second one
is, it makes various payments (=G) to
households and business sectors. Taxes are
37
39. Four Sector Model
Until now we considered a closed economy. But as you know,
all countries are engaged in foreign trade. Each country
exports goods and services to other countries, and imports
goods and services from others.
Therefore, we should include exports ad imports in our
economy, as shown in figure 4. when a country exports goods
and services, it receives export earnings (=X) from other
countries.
When a country imports goods and services, it has to incur
import payments (=Z). So, we should consider export as an
injection and import as a leakage. Now you can see that there
are a number of flows in our final circular flow diagram. The
level of income in the circular flow depends on leakages and
injections.
39
42. Measure of National
Income
We will discuss here how deferent
types of measures can be used to
estimate a country's national
income.
Gross domestic production (GDP);
is the market value of all final
goods and services produced
within a country in a given period of42
43. It is important to understand the
following terms that are included in the
definition of GDP.
GDP is a GROSS amount, because the
output is measured without deducting an
amount for depreciation of capital goods
like machinery and equipment.
Market vales of the products are
counted
GDP is domestic production because it
includes only goods and services
produced within the country.
43
44. It is a measurement of final goods
produced because we count only the
goods and services that are produced for
final use. In other words, we do not use
intermediate goods produced by one firm
for use of another firm.
We measure GDP in money terms.
GDP is a flow concept. The reason is that
it measures the value of output or income
realized during a particular year or a
quarter. This is different from the concept
of stock which usually measures a variable
at a particular point of time. For example,
the total wealth of a country at the end of44
45. The following transactions
are excluded form GDP.
The purchase and sale of used/ second
hand goods.
The trading of shares, bonds, and
securities.
Transfer payments.
Domestic services, eg. Housewives
services.
Illegal production and trading services.
Environmental degradation arising from
45
46. Gross National Product
GNP is the market value of all final goods and
services produced by citizens of a country in a
given period of time, usually a year.
Thus GNP, is the total income earned by a
country's nationals regardless of the country in
which their factor services are supplied.
Accordingly, factor incomes earned by Sri
Lankan companies and individuals abroad and
remitted to Sri Lanka are included in GNP.
Similarly, outward remittances of factor
incomes from Sri Lanka by foreigners and
overseas companies working here are
deducted from GDP.
46
47. Thus, GNP differs from GDP by
including factor income that our
citizens earn abroad and excluding
factor income that foreigners earn
here.
GNP = GDP + FACTOR
INCOME INFLOWS – FACTOR
INCOME OUTFOWS.
GNP = GDP + NET FACTOR
INCOME FROM ABROAD.
47
48. Net Domestic Product
Net domestic product is GDP
minus depreciation. Depreciation is
the wear and tear of the country's
stock of capital equipment.
NDP = GDP +
DEPRECIATION
48
50. Disposable Personnel Income
This is the income earned by
individual households in a given
time period. Disposable income
equals personnel income minus
income taxes paid plus
government transfer to
households.
Disposable Personnel Income =
personnel income + income tax
paid + government transfers to 50
51. Computation of National
Income.
Economists use the following 3
approaches to compute national
income.
Output approach
Expenditure approach
Income approach
You may recall that the circular flow of
income showed us that the output
produced by using factors of production
is equal to the incomes received by the51
52. The Output Approach
In this method of computation we assume, the value of
production of each economic activity. Then we add up all
these production values. But when we measure national
income using this method, we should not avoid double
counting of the same product. For instance, assume that
a country produces items such as rubber, tyres, milk,
butter, and ice cream. How can we value all these
products and total them up? Rubber is used in the
manufacture of tyres.
Similarly, milk is used to produce butter and ice cream. If
we add the values of rubber sheets and tyres we would
be counting the value of rubber twice. Likewise, if we
value the total milk production and total ice cream
production, the value of milk that is used for ice cream52
53. This type of counting should be avoid in
measuring the total output of the country. This
can be done by deducting the value of inputs
of goods and services used in the production
of each item. These inputs are also known as
intermediate goods.
The value of output of an enterprise less than
the value of its inputs is known as the value
added. The total value added in all producing
units located within a country during a
particular period is Gross Domestic Product.
The value added is also equal to the sum of
payments to factors of production (wages,
interest, rent and profit) at each stage of the
production process. 53
54. Value Added = Value of a
Firms Output – Value of
Inputs Purchased from
other Firms.
54
55. 55
Firm Producti
on stage
Product Sales
price
Cost of
intermediate
products
Value added
(wages,
interest, rent,
profit)
1 Tea estate Tea leaves 40 00 40
2 Tea factory Tea 60 40 20
3 Tea packing Tea
packets
70 60 10
4 retailer Retailing
sales
90 70 20
Final
sale
90=final sale
price=sum of value
added.
56. The above table shows how value added is
calculated for the tea industry. Firm 1
produces tea leaves, and its value added is
Rs. 40. the tea factory uses the tea leaves to
produce tea. Although the total value of the
product is Rs. 60, the cost of intermediate
goods amounting to Rs. 40 should be
deducted. Thus , the value added of firm 2 is
only Rs. 20. likewise, try to calculate the value
added of the other firms and the sum of value
added.
In computing national income using the
product approach, the economy is divided into
the following 11 sectors. The value added of
56
57. 1. Agriculture, forestry and fishing
2. Mining and quarrying
3. Manufacturing
4. Constructing
5. Electricity, water and gas
6. Transport, storage and communication
7. Wholesale and retail trade
8. Banking, insurance and real estate
9. Ownership of dwellings
10. Pubic administration and defense
11. Other services.
57
58. The Expenditure Approach
In the expenditure approach we look at GDP
from the viewpoint of expenditure. This
identifies 4 types of spending as follows;
Privet consumption spending (=C); this
includes consumption expenditure of
households and privet non-profit institutions
serving households.
Investment (=I); this refers to investment in 3
areas; one is final purchases of machinery and
equipment by governments and business,
second construction and third changes in
inventories. Investment in this context does not
refer to financial investment. Which is merely58
59. Government spending (=G); this refers to
government purchases of goods and services.
This does not include transfer payments and
expenditures for servicing the national debt, or
investment goods (which are already included
in I).
Net export expenditure (exports – imports =
Xn); this refers to the net sales of goods
abroad (exports), less than the sales of goods
purchased from abroad (imports). If imports
are greater than exports, net exports would be
negative, and vice-versa.
We obtain expenditure on GDP by adding
privet consumption, gross investment,
government expenditure and net exports.
59
60. GDE = C + I + G + (X – Z)
60
Gross Domestic Expenditure =
Consumption + Investment +
Government Spending + Net
Exports.
61. Income Approach
In this method we measure the national
come as the sum of the incomes received
by households in a economy. As we saw in
the circular flow, households receive such
incomes by supplying FOP to firms, so they
receive rent for land, wages for labour,
interest for capital and profits for
entrepreneurship. We can derive gross
domestic income by adding up all these
factor incomes as follows;
Gross Domestic Income =
Rent + Wages + Interest +
61
62. Factor income can be
categorized as follows
Employee income; this includes salaries, wages,
payments made to social security, insurance
and health facilities received by the employees.
Rent income; this includes the income received
by renting fixed and natural resources, income
from housing rents, income from intellectual
property.
Net interest; net interest from the business
sector
Profit; includes cooperate income tax, dividends
and undivided profits.
Income of self employees; this includes income
from sole proprietorships, partnerships,62
69. The Practical Usage of
National Income Accounting
National income accounting is
very useful for many purposes.
The min 2 aims of national
income accounting can be given
below.
To measure the level of
economic activity
To measure the level of69
70. Other Major Uses of National
Income Accounting.
To measure a country’s economic growth
rate.
Measure the standard of living, usually
high national income indicates high
standard of living.
National planning for country’s
development.
To investigate about income distribution
and its changes. Figures of wages, rent,
profits, interests etc.
To measure the output of different
sectors in the economy. This enable us to
explore which sector contributes to the
economy most. 70
71. To compare the economic productivity
and efficiency. If the national income
improved steadily over the years, this
shows a stable economy with improved
productivity.
To compare with other countries, if
GNP per capita is greater than 18000$,
the country is considered as industrially
advanced, so when it is lower than
2000$ is considered as less developed
economy.
To see the pattern of government
expenditure in the expenditure71
72. Limitations of National
Income Accounting.
One of the main uses of national income data is in
measuring the economic well being of the
population through the concept of the standard of
living. The basic standard for this is to use real
GDP per person (per capita).
Real GDP per capita does have some limitations
when assessing the standard of living.
Regional Variations in income and spending
National GDP figures hide significant regional
variations in output, employment and incomes per
head of population.
Within each region there are also areas of relative
prosperity contrasting with unemployment black-
spots and deep-rooted social and economic
deprivation.
72
73. GDP figures on their own do not show the
distribution of income and the uneven
spread of financial wealth. Incomes and
earnings may be very unequally
distributed among the population and
rising national prosperity can still be
accompanied by rising relative poverty.
Economic growth and externalities
Rising national output might have been
accompanied by an increase in pollution
and other negative externalities which
have a negative effect on economic
welfare. Output figures also tell us little
about the quality of goods and services 73
74. The black economy and non monitored sectors
GDP figures might understate the true living
standards because of the existence and growth of
the black economy.
The black economy includes economic activity that
goes unrecorded by the Inland Revenue and
Customs & Excise.
The non monitored sectors of the economy
include output that is not sold at market prices but
involves barter trade, and self-consumed products.
The Economist's latest estimates for the total value
of the black economy throughout the world is $9
trillion. The scale of the underground economy is
estimated to average 15% of national output for
rich economies and 33% of national output for
emerging economies.
According to their survey, Nigeria and Thailand
have the world’s largest black economies, both
accounting for more than 70% of official GDP.
74
75. What are the advantages and
disadvantages of Gross Domestic Product?
Gross Domestic Product (GDP) is
an economic measure of a
nation's total income and output
for a given time period (usually a
year).
Economists use GDP to measure
the relative wealth and prosperity
of different nations, as well as to
measure the overall growth or
decline of a nation's economy.
75
76. The most common way to measure GDP is the
expenditure approach. With the expenditure
approach, GDP is the sum of the following elements:
Total domestic consumption: This is the total
amount spent on domestically produced final goods
and services. Final goods are items that will not be
resold or used in production within the next year —
milk, cars, bow ties, and so on.
Total domestic investment expenditures: This
measurement includes not only investments in stocks
and bonds, but also investments in equipment —
such as bulldozers, computer servers, and
commercial buildings — that will be useful over a
long period of time. It also includes inventory goods
— final goods waiting to be sold that a company still
has on hand.
76
77. Government expenditures: This
includes everything from paying military
salaries to building roads and maintaining
monuments, but does not include welfare
and social security payments.
Net exports: Net exports is the total of
goods and services produced
domestically and sold to foreigners minus
goods and services produced by
foreigners but sold domestically (imports).
Using GDP as a measure of a nation's
economy makes sense because it's
essentially a measure of how much
buying power a nation has over a given
time period. GDP is also used as an
indicator of a nation's overall standard of
living because, generally, a nation's 77
78. But there are a number of shortcomings to using GDP. Here
are just a few:
GDP doesn't count unpaid volunteer work: GDP doesn't
take into account work that people do for free, from an
afternoon spent picking up litter on the roadside to the
millions of man-hours spent on free and open source
software (such as Linux). In fact, volunteer work can
actually lower GDP when volunteers do work that might
otherwise have gone to a paid employee or contractor.
Disasters can raise GDP: Wars require soldiers, oil spills
require cleanup, and natural disasters require health
workers, builders, and all manner of helping hands.
Rebuilding after a disaster or war can greatly increase
economic activity and boost GDP.
GDP doesn't account for quality of goods: Consumers
may buy cheap, low-quality, short-lived products repeatedly
instead of buying more expensive, longer-lasting goods.
Over time, consumers could spend more replacing cheap
goods than they would have if they had bought higher-
quality goods in the first place, and GDP would grow as a
result of waste and inefficiency.
Although economists are constantly working on other ways
to measure an economy, GDP is still the best indicator of a78
79. Statistics collection and representation must be looked at carefully or
an incorrect thesis may be misconstrued from the data given. The
three main limitations to national income accounting are:
Errors in Measurement: Black Market and underground activities are
not included when calculating GDP. This is because there is no way to
accurately measure black market activity. In the United States, this is a
relatively small percentage of the total GDP; however, in many other
less developed countries, it can go as high as 70% of the country's
total GDP. Another big measurement error is inflation. It is adjusted
according to base prices and various other things and the range of
possible inflation can be as much as 1% to 15% in some places.
Subcategories that are Misrepresented: The various interpretations
of what should be included in consumption or government spending
plays a big part in the overall determination of GDP. Decisions are
made about what is to be included where, but minor discrepancies will
always arise.
Welfare is NOT Measured: GDP only measures the market activity
and does not take welfare into account. The economic activity of a
country could rise, while welfare could possibly have fallen. Different
situations may occur that have a negative impact on the people which
cause them to increase spending, therefore increasing the GDP.
79
80. Review Questions
1) What is macroeconomics?
2) What are the macroeconomic variables?
3) What are macroeconomic objectives?
4) What is national income?
5) What are the methods of national income
accounting?
6) What is income approach? Explain.
7) What is expenditure approach? Explain.
8) What is output approach? Explain.
80
81. 1. Explain the 2 sector model.
2. Explain the 3 sector model
3. Explain the 4 sector model.
4. What are the advantages of
GDP?
5. What are the disadvantages
of GDP?
81
82. Reference
Prof. S. S. Colombage.” Principles of Macroeconomics”
2006. The Open University Press, Nugegoda, Sri Lanka.
Richard G. Lipsy,” An Introduction to Positive Economics”
7th Low Price Edition ,1989, Butler & Tanner Ltd,
London.
Robert J. Gordon," Macroeconomics” 3rd Edition,1984,
Little Brown & Company Canada Ltd, USA.
Robert H. frank, Ben S. Bernake, ”Principles of
Macroeconomics”, 2001. McGraw-Hill Companies Inc,
New York.
David. W. Pearce," The Dictionary of Modern Economics”
2nd Low Price Edition, 1985, Anchor Brendon Ltd. UK.
Prasadini Dharmawardena, GCE A/ L Economics – New
Complete Text Books for grade 12 & 13, ESL Publishers.
Central Bank Reports 2009, 2010, 2011, 2012,Recent
Economic Development Reports from 2008, 2009, 2010,
2011, and 2012, Economics and Social Statistics form
2010, 2011, 2012.The Central Bank of Sri Lanka.
82