The activity of seeking wealth is as old as Human
Civilization. Human beings either as individuals or as groups
or as large kingdoms and empires have always been engaged
in acquiring and increasing the material wealth.
However, a discipline study of the wealth producing
activities was commenced about 230 years back when Adam
Smith, the father of Economics, published “The Nature and
Causes of Wealth of Nations”. Economics, as a discipline,
constitute the most important subject to analyze activities
related to wealth creation and distribution. The dimensions of
the subject of Economics are truly vast and encompasses all
aspects of our lives.
Economics comes from the Greek word oikonomia which means household chores. Economics is considered a field of social science. Economics is relevant because it is part of everybody’s life. As a science, Economics is related to other sciences.
Economics comes from the Greek word oikonomia which means household chores. Economics is considered a field of social science. Economics is relevant because it is part of everybody’s life. As a science, Economics is related to other sciences.
This PPT includes the basic concepts of economics. its meaning, scope and nature of economics, types of economic systems and basic problems of an economy.
Definition Nature Scope and Significance of Economics, Business Economics - D...Divyansh Agrawal
Definition Nature Scope and Significance of Economics, Wealth Definition, Welfare Definition, Criticism, Scope of Economics, Economics a science or an artScience teaches us to know and an art teaches us to do. Science and art are complementary to each other, A Positive or a Normative Science, Business Economics,Methodology of Economics, Nature of Business Economics, Scope of Business Economics, Divyansh Agrawal, Divyansh Agrawal Shivpuri, PIMR, Prestige Institute of Management, Indore
What is history of Economic Thought
Why study History of Economic Thought
Three General Beliefs in the study of History of Economic Thought
History of Economic Thought Vs Economic Thought
Period /Timeline of History of Economic Thought
Difference between macro and micro economicsMaddali Swetha
Paper presentation made by Maddali Laxmi Swetha, MBA (HR)
Maddali Swetha Blog - http://maddaliswetha.blogspot.com/ https://in.linkedin.com/in/maddali-swetha-a0a424a6
https://twitter.com/maddali_swetha
E-Mail ID: maddali_swetha@yahoo.com - Feedback
This PPT includes the basic concepts of economics. its meaning, scope and nature of economics, types of economic systems and basic problems of an economy.
Definition Nature Scope and Significance of Economics, Business Economics - D...Divyansh Agrawal
Definition Nature Scope and Significance of Economics, Wealth Definition, Welfare Definition, Criticism, Scope of Economics, Economics a science or an artScience teaches us to know and an art teaches us to do. Science and art are complementary to each other, A Positive or a Normative Science, Business Economics,Methodology of Economics, Nature of Business Economics, Scope of Business Economics, Divyansh Agrawal, Divyansh Agrawal Shivpuri, PIMR, Prestige Institute of Management, Indore
What is history of Economic Thought
Why study History of Economic Thought
Three General Beliefs in the study of History of Economic Thought
History of Economic Thought Vs Economic Thought
Period /Timeline of History of Economic Thought
Difference between macro and micro economicsMaddali Swetha
Paper presentation made by Maddali Laxmi Swetha, MBA (HR)
Maddali Swetha Blog - http://maddaliswetha.blogspot.com/ https://in.linkedin.com/in/maddali-swetha-a0a424a6
https://twitter.com/maddali_swetha
E-Mail ID: maddali_swetha@yahoo.com - Feedback
Introduction: Definitions of Economics – Adam Smith, Marshall and Robbins - Main Divisions of Economics - Basic Concepts - Goods – Utility - Wants – Value – Price - Market and Income.
The document contains introduction to economics covering:
DEFINITIONS OF ECONOMICS.
NATURE OF ECONOMICS.
METHODOLOGY OF ECONOMICS
CENTRAL PROBLEMS OF AN ECONOMY.
TO CLARIFY WHOLE DOCUMENT VISIT MY
YOUTUBE CHANNEL STUDY GENESIS
https://youtu.be/75VcRo-TRaI
The Indian Partnership Act, 1932 defines partnership as
“the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.”
In 1944, the United States and Britain held a conference (Bretton Woods) that established:
1. International Bank for Reconstruction and Development (World Bank) (IBRD)
2. International Monetary Fund (IMF)
In economics, the cycle of poverty is the “Set of factors or events by which poverty, once started, is likely to continue unless there is outside intervention“. The poverty cycle can be called the “Development trap" when it is applied to countries.
The Reserve Bank of India is India's central banking institution, which controls the monetary policy of the Indian rupee. It commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.
The FEMA (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA)
FEMA came into act on the 1st day of June,2000
49 sections in the Act.
This theory relies on the market behaviour of the consumer to know about his preferences with regard to the various combinations for the two reactions and responses of the consumer.
Economic welfare is the level of prosperity and standard of living of either an individual or a group of persons. In the field of economics, it specifically refers to utility gained through the achievement of material goods and services.
Isoquants, MRTS, Concept of Total Product, Average & Marginal Product, Short Run and Long Run analysis of production, The Law of Variable proportion, Returns to scale,
Production Cost – Concept of Cost, Classification of Short run cost – Long run cost,
Trade policy governs exports from and imports into a country.
Guided by the Export-Import (EXIM) Policy of the Government of India which is Regulated by the Foreign Trade (Development and Regulation) Act, 1992
It contains various policy with respect to imports and exports i.e. export promotional measures, policies and procedures related thereof. Policy was prepared and announced by the Central Government (Ministry of Commerce and Industry) for every 5 years of span.
Promotion is the entire set of activities which communicate the product, Brand, Service so on to the user. The Idea is to make people aware, attract and induce to buy the product, in preference over others
Studying of Economics often seems hard. It is only because of the vocabulary used in defining the economic concepts, here are a set of terms which are frequently used in economics along with definitions..
The “Demand” for a commodity, at a given price, is the quantity of it which will be bought per unit of time at that price.
In economics, demand refers to the buying behavior of a household. When desire is backed by willingness and ability to pay for a good or service then it becomes Demand for the good or service.
Consumer Behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions. The study of Consumer Behaviour assumes that the consumers are actors in the marketplace.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
2. CONTENTS
1. Introduction and Evolution of Economics in India.
2. Definitions of Economics.
3. Basic problems of an Economy.
4. Economic theories.
5. Organization of economic activities.
6. Centrally Planned Economy.
3. Part 2
Part 3
Part 4
• The Arthashastra is an ancient Indian treatise on statecraft,
economic policy and military strategy written in Sanskrit.
• The authors are "Kauṭilya" and "Vishnugupta” (350–283BCE)
who was a scholar at Takshashila and the teacher and guardian of
Emperor Chandragupta Maurya, founder of the Mauryan Empire.
• The text which disappeared after 12th century was rediscovered in
1904 by R. Shamasastry, who published it in 1909.
• The first English translation was published in 1915.
Evolution of Economics in India
Part 1
Part 5
Part 6
4. Derivation of the word Economics
The term economics comes from the two Ancient Greek words
“OIKOS” & “NOMOS”.
'Oikos'
meaning
"House"
+
Part 2
Part 3
Part 4
Part 1
'Nomos'
meaning
"Law"
≈ 'Economics'
In Greek οἰκονομία from οiκος (oikos, means “house") and νόμος (nomos,
means "custom" or "law")
Hence “THE ART OF HOUSEHOLD MANAGEMENT” or managing a house
with the efficient use of limited resources.
Part 5
Part 6
5. Derivation of the word Economics
•Economics is an important social science which is described as Queen of
social sciences.
•It teaches the art of economizing, logical behaviour and rational decision
making.
•It is included in the list of Nobel prizes since 1969.
•Till the publication of Alfred Marshall’s master piece, “The Principles of
Economics” in 1890, economics was treated as a branch of politics, ethics, and
logic and other social sciences.
•The credit of separating economics from other social sciences must go to
Alfred Marshall.
•He was the first Economist who used the term ECONOMICS in the place of
political economy.
•The credit of developing economics on the solid foundations must go to Adam
Smith. He is regarded as “The Father of Political Economics”.
Part 2
Part 3
Part 4
Part 1
Part 5
Part 6
6. What is economics all about?
Part 1
Part 3
Part 4
Part 2
Economics can be classified into two fundamentals facts:
Human beings have unlimited wants,
The means of satisfying these wants are relatively scarce.
So to conclude the facts, economics is the study of how we work together to
transform scarce resources into goods and services to satisfy the most of our
infinite wants and how we distribute these goods and services among
ourselves.
Definitions:
“You cannot be in any real sense a citizen unless you are also in degree an
economist”- Mrs. Barbara Wooton
"Economics is both light-giving and fruit-bearing"Prof. A.C. Pigou
Part 5
Part 6
7. Part 3
Part 4
Definitions
At present the definition of economics can be put under 4 heads:
1. Early definitions: Science of wealth.
•Wealth definition is given by Adam smith and his
followers.
•It is also known as CLASSICAL DEFINITION.
•He published his book "Wealth of Nations” in 1776.
•He defines economics as “Science of Wealth”.
•It is an inquiry into the nature and causes of wealth of
nations.He aimed:
The human activity and studied how much wealth is consumed.
Since problems of the nation can be solved by creation of wealth and equal
distribution, the production of wealth can be increased.
Critics:
1) Over emphasizes wealth. 2) Ignores other activities of man.
3) Little attention is paid to man and his welfare. 4) It restricts the scope
Part 5
Part 6
Part 1
Part 2
8. Part 3
Part 4
Definitions
2. Marshall’s definition: Science of Material Welfare.
•The Welfare definition was given by well-known Economists
as Alfred Marshall, A.C Pigou, Cannon and others.
• It is also known as Neo-Classical definition.
•They shifted emphasizes from Wealth to Welfare Economics.
•Hence, it is called as “WELFARE DEFINITION OF
ECONOMICS”.
“Political economy or economics is a study of mankind in the ordinary business
of life; it examines that part of individual and social action which is most
closely connected with the attainment and with the use of material requisites of
well-being.”- Alfred Marshall.
Part 5
Part 6
Part 1
Part 2
9. Part 3
Part 4
Definitions
2. Marshall’s definition: Science of Material Welfare. Cntd.,
Aims:
1. Study of man and his welfare as a member of
the organized society.
2. Study causes of material welfare.
3. Separates the science of economics from other
social sciences.
Critics:
1. Too narrow and unscientific
2. All material goods can’t promote welfare
3. Quantification of welfare is difficult
4. Concept of welfare misleading
5. Neglects basic problems classificatory rather than analytical.
Part 5
Part 6
Part 1
Part 2
10. Part 3
Part 4
Definitions
3. Robbin’s definition: Science of Scarcity
“Economics is the science which studies human behavior
as a relationship between ends and scarce means which
have alternative uses”. -
-Prof. Lionel Robbins.
An essay on “The Nature and Significance of Economic
Science” was published in1932. Definition was widely
accepted as most scientific and concise.
The main structural propositions for this definition are:
Ends: Ends imply human unlimited and varied wants. Due to unlimited wants,
problem of choice arises. As we cannot satisfy all the wants, we must choose
between most urgent and less urgent wants.
Scarce-Means: The means available to satisfy wants are limited or scarce.
Scarcity depends on demand and creates many economic problems.
Part 5
Part 6
Part 1
Part 2
11. Part 3
Part 4
Definitions
Alternative uses: Though the resources are scarce, they
are capable of being put to alternative uses. Particular
resources can be employed in different uses.
Problem of choice: As human wants are unlimited and
means are limited, the problem of choice arises.
Critics:
Lacks human touch
Narrows down the scope
Ignores economic problem
Ignores growth aspect
3. Robbin’s definition: Science of Scarcity Cntd.,
Part 5
Part 6
Part 1
Part 2
12. Part 3
Part 4
Definitions
4. Modern definition- Science of Dynamic Growth and Development.
Economics is much more than merely a theory of value or of
resource allocation.
In J.M. Keynes’ terms, “Economics is defined as the study of
the administration of scarce resources and the determinants of
income and employment”.
“Economics is the study of how men and society choose with or without the use
of money, to employ scarce productive resources which could have alternative
uses, to produce various commodities over time, and distribute them for
consumption now and in the future among various people and groups of
society”.
– Paul. A. Samuelson
Part 5
Part 6
Part 1
Part 2
13. Part 3
Part 4
Definitions
4. Modern definition- Science of Dynamic Growth and Development.
Aims:
Wider in scope
Dynamic nature
Deals with the problem of choice
Stressed the problem of scarcity in relation to unlimited
ends.
Conclusion on definitions:
Of all the definitions above, Samuelson definitions stands good for the universal
appeal. It presents the choice problem in its dynamic setting and widens the
scope of the subject. It is applicable to all sorts of economies- past, present and
future.
Part 5
Part 6
Part 1
Part 2
14. Part 4
•An economy or an economic system refers to the conditions under which
goods and services are produced and distributed in a country.
•It constitutes individuals, firms, companies, households, factories, banks,
government, foreign sectors etc, who act and interact to producer and consumer
of goods and services.
•The central problems of an economy arises from two basic facts, namely, the
multiplicity of ends and the scarcity of means.
•In the modern economy, economic activities of different people are
interrelated and interdependent.
•It controls, regulates and guides the economic activities of people to achieve
certain social and economic goals.
Concept of Economy
Part 5
Part 6
Part 2
Part 1
Part 2
Part 3
15. What to produce is problem of choice between
commodities and this problem raised due to scarcity of
resources?
The main objective is to produce maximum output to
satisfy needs of maximum people.
Basic problems of an Economy
Every economy has to solve 4 problems:
Decided on:
a) By assesing the requirment or Demand in the economy.
b) By assesing the current number of producers in an Industry and
potential growth or expected growth of the same.
1. What to produce?
Part 5
Part 6
Part 3
Part 2
Part 1
Part 4
16. Basic problems of an Economy
2. How to produce
How to Produce is problem of choice of technique. I.e. choice
of technology to produce goods and services to meet the
wants of the society which is economical.
Decided on:
a) With what resources and technology
b) On what scale
c) In what sector
2. How to produce
How to Produce is problem of choice of technique. I.e. choice
of technology to produce goods and services to meet the
wants of the society which is economical.
Decided on:
a) With what resources and technology
b) On what scale
c) In what sector
2. How to produce?
How to produce is problem of choice of technique. I.e.
choice of technology to produce goods and services to meet
the wants of the society which is economical. In simple words
"which technology should be used in production."
Decided on:
a) What resources and technology
b) What scale
c) Which sector
There are two types of production techniques:
1) Labor intensive 2) Capital/Machine intensive
Part 5
Part 6
Part 3
Part 2
Part 1
Part 4
17. Basic problems of an Economy
2. How to produce
How to Produce is problem of choice of technique. I.e. choice
of technology to produce goods and services to meet the
wants of the society which is economical.
Decided on:
a) With what resources and technology
b) On what scale
c) In what sector
3. For Whom to produce?
For Whom to produce: is the problem of distribution of
goods and services among the members of the society?
Sharing the national product among factor of production.
Solution can be determined on the basis of economic
system
Decided on:
a) Which sector of the economy
b) Which class of the society
Part 5
Part 6
Part 3
Part 2
Part 1
Part 4
18. Basic problems of an Economy
4. How to choose between the present and the future
How to choose between the present and the future:
Regard to the use of economic resources. The country has to
decide as to what proportion of these resources is to be
reserved for the future.
Decided on:
a) Growth and development
b) Availability of resources
c) Population
Part 5
Part 6
Part 3
Part 2
Part 1
Part 4
19. The process of formulation of economic models about the relationship
between economic variables in order to generate testable hypotheses from
these models and testing of these hypotheses against empirical data.
Economic theory
Steps of formulating an economic
theory:
Selecting the problem
Collection of data
Classification of data
Formulation of hypothesis
Testing of hypothesis
Verification of theory
Purpose of economic theory:
To provide economic tools.
To explain economic phenomena
to predict economic events.
To formulate economic policies.
To judge the performance of the
economy.
Part 6
Part 4
Part 3
Part 2
Part 1
Part 5
20. Approaches to economic theory
Part 6
Micro economics Macro economics
Greek word ‘mikros’ means small Greek word ‘ makros’ means large
Small components of the national
economy of the country
Large components of the national
economy of the country
Branch of economic analysis which
studies the economic behaviour of
the individual unit, may be a person,
a particular household, or a particular
firm.
Branch of economic analysis which
studies the behaviour of not one
particular unit, but of all the units
combined together.
Detailed and specific consideration Aggregative economics
Part 4
Part 3
Part 2
Part 1
Part 5
21. Approaches to economic theory Cntd.,
Part 6
Studies Micro-quantities or Micro-
variables
Studies inter-dependence and
circular flow of the economy.
Answers what good shall be
produced, how they shall be
produced, for whom they will be
produced.
Solves the equal distribution of
income, trade cycles and fluctuations
in the economy.
Theory of product pricing, factor
pricing theory, theory of economic
welfare.
Theory of income, output and
employment, Theory of economic
growth, Macro-theory of distribution
Micro-statics, Comparative Micro-
statics, Micro-dynamics are the types
of Microeconomics
Macro-statics, Comparative Macro-
statics, Macro-dynamics are the types
of Macroeconomics
Part 4
Part 3
Part 2
Part 1
Part 5
22. Importance
Part 6
Micro economics Macro economics
Functioning of the economy Clear picture of the economy
Formulation of economic policies
and theories
Formulation of economic policies
Study of economic welfare Study of economic growth and
aggregates
Allocation of resources Study of trade cycles
Development of international trade Consideration of economic problems
Analysis of the problem of taxation Analysis of the problem of entire
system of the economy
Construction and use of models Indispensable study
Part 4
Part 3
Part 2
Part 1
Part 5
23. Limitations
Part 6
Micro economics Macro economics
Unrealistic assumptions Neglects micro study
Misleading because of specific study Studies aggregates and averages
No clear picture of the entire
economy
Wrong conclusions
Limited scope Excessive generalisations
Certain economic problems cannot
be analyzed
Study of aggregates may lead to no
change in policy
Laissez-faire assumption
Suffers from abstractness
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24. Economics-As a Science
Positive economics Normative economics
Explains causes and consequences Discusses the rightness or wrongness of
things
Objective of establishment of
uniformities
Determination of ideals, economic goals
of public policy.
Studies facts as they are and not as they
ought to be
Studies things as they ought to be
More light-giving Light-giving and fruit-bearing
Makes critical analysis of the existing
facts and draw conclusions
Judge whether it is socially justified or
not.
How economic problem is solved How economic problem should be solvedPart 6
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25. Economics-As a Science Cntd.,
Positive economics Normative economics
Based on facts i.e. development and
testing of economic theories
Based on ethical values
Given by Robbins Given by Marshall and Pigou
Independent analysis Dependent on positive analysis
No value judgement Includes value judgement and values are
purely scientific
Also regarded as neutral and agenda free More elastic
Economic statements can be treated and
accepted or disregarded
Economic statements are opinion based
as they can be right or wrong.
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26. Deductive and Inductive Methods
Deductive method Inductive method
Also known as abstract, analytical and
priori method
Also known as historical, empirical,
posterior method
Ranges from general to particular analysis Ranges from particular to general
Based on abstract reasoning and not on
facts
Actual Facts are collected, arranged and
them general conclusions are drawn
From indisputable facts about human
nature and deduce to individual cases
Technique of a practical approach to the
problems of economic science
No accuracy Accuracy because of calculation under
statistical tools
Static approach Dynamic approach
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27. Deductive and Inductive Methods Cntd.,
Deductive method Inductive method
Only assumptions and experiments. Experimentation and statistical
approaches are followed
Ex: Law of diminishing marginal utility,
larger the stock-lower the utility
Ex: Experimentation with the effect of a
public works programme on employment
during a depression
Approach to solve the problems of
economic science,
Remove gulf between theory and
practice,Part 6
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28. Deductive and Inductive Methods
Stages in the process of deduction:
Perception of problem
Making assumptions
Formulating hypothesis
Verifying hypothesis
conclusions
Stages in the process of induction:
Collection of Statistical data
Choosing right statistical methods
for calculation
Analysis
Arriving to the conclusions
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29. Economic Statics and Dynamics
Economic statics Economic dynamics
Greek word ‘STATIKE’ means standstill Where there is movement or change
Rates of output are constant Rate of output differs
Economic phenomena that establish
relations between elements of economic
system, prices and quantities of
commodities are at same point
Uncertain, unexpected and irregular
No change in population and its
composition
States of disequilibrium
No change in quantity of a capital and
technique of production
Population grows and quantity of capital
grows
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30. Economic Statics and Dynamics Cntd.,
Economic statics Economic dynamics
No change in working and organisation
of industrial units and no change in
habits, tastes, fashions of the people
Mode of production improve
It is simple, has clarity and it is the basis
of dynamic analysis
Industrial organisation changes
Applicable to theories such as Keynes
general theory, Robbins’s definition.
Habits, fashions and customs of people
change
Ignores time element
Realistic, studies time element, more
flexible and basis for economic theories.Part 6
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31. Organisation of Economic activities
Economic activities:
“It refers to those human activities which are
undertaken with the object of satisfying material or
economic needs”.
India has classified and tracked its economy as three
sectors —
1. Agriculture
2. Industry
3. Services. •Agriculture is a primary industry which is concerned
with the production of goods mainly with the help of
nature.
•It includes crops, horticulture, milk and animal
husbandry, aquaculture, fishing, sericulture,
aviculture, forestry and related activities.
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32. Organisation of Economic activities
•Industry includes various manufacturing sub-sectors.
•It refers to manufacturing activity concerned with the
conversion of raw materials or semi-finished goods
into finished goods.
•Service is a type of economic activity that is
intangible, is not stored and does
not result in ownership.
•A service is consumed at the point of sale.
•India's services sector includes construction, retail,
software, IT, communications, hospitality,
infrastructure operations, education, health care,
banking, insurance, and other economic activities.
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33. Centrally Planned Economy
•An economic system in which economic decisions are made by the state or
government rather than by the interaction between consumers and
businessmen.
•An economy where decisions on what to produce, how to produce and for
whom to produce are taken by the government.
• The theory is that the government will overcome market failure and achieve
equality of distribution.
•The economies are broadly classified on the basis of production, exchange,
distribution, role of government in economic activity.
Classification of an economy:
1) Capitalist economy or Market economy
2) Socialist economy
3) Mixed economy
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34. Centrally Planned Economy
1. Market economy:
A market economy is an economy in which decisions regarding investment,
production, and distribution are based on supply and demand, and prices of
goods and services are determined in a free price system.
Characteristics:
The right of private properly
Freedom of enterprise
Freedom to choice by the consumers
Profit motive
Competition
Inequalities of incomes
This economy uses impersonal forces of the market demand and supply to
the price mechanism to solve its central problems.
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35. Centrally Planned Economy
2. Socialist economy:
•A socialist economic system is based on some form of social ownership of the
means of production.
• It may be direct public ownership, factories, capital, and mines where
production is carried out directly for use.
•The material means of production are owned by the whole community
represented by the state.
Characteristics:
Collective ownership of all means of
production
Central authority to set socio-economic
goals.
Relative equality of income
Price mechanism is secondary role
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36. Centrally Planned Economy
3. Mixed economy:
•It allows a level of private economic freedom in the use of capital, but also
allows for governments to interfere in economic activities.
•It include the best features of both the controlled economy and the market
economy while excluding the demerits of both.
•Mixed economy is three sector economy of industries.
Private sector:
•Production and distribution are managed and
controlled by private individuals and groups.
•They are based on self-interest and profit motive.
•Private industries are regulated by the government
by a number of policy instruments.
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37. Centrally Planned Economy
Public sector:
•The part of national economy providing basic goods or
services that are either not, or cannot be, provided by
the private sector.
•It consists of national and local governments,
their agencies, and their chartered bodies.
•One of the largest sectors of any economy.
•They are not primarily profit-oriented but are set up by
the state for the welfare of the community.
Combined sector: A sector in which both the
government and the private enterprises have equal
access and join hands to produce a commodity
leading to the establishment of joint sectors.
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38. Part 2
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Centrally Planned Economy
Conclusion: Mixed economy is a planned economy where the government has
clear and definite economic plan for the development of both the private and
public enterprises. It also balances regional development and allocation of
resources attempts to combine the productive efficiency of capitalism and
distributive justice of socialism..
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