Cashless economy
Nearly two years after demonetization, about 99.3% of the notes sucked out of circulation has been returned. Outcomes of demonetization: Over the last two years, at least three of major claims of demonetization have collapsed. First, it was supposed to flush out black money and end corruption. The government predicted that Rs 3 lakh crore in […]
New GDP series
New GDP numbers There are variations in the ways to calculate GDP and it is the introduction of these new calculations that has caused a spike in India’s recent GDP growth rate, leading to quite a lot of confusion and debate. Earlier, India’s GDP growth rate for the year ending in March 2014 was marked […]
National Income and prices
GOODS AND PRICES One implicit assumption in all this discussion is that the prices of goods and services do not change during the period of our study. If prices change, then there may be difficulties in comparing GDPs. If we measure the GDP of a country in two consecutive years and see that the figure […]
National income measures
National income measures Gross Domestic Product measures the aggregate production of final goods and services taking place within the domestic economy during a year. But the whole of it may not accrue to the citizens of the country. For example, a citizen of India working in Saudi Arabia may be earning her wage and it […]
Income determination and circular flow of income
Income determination The basic objective of macroeconomics is to develop theoretical tools, called models, which attempt to provide theoretical explanation to questions such as what causes periods of slow growth or recessions in the economy, or increment in the price level, or a rise in unemployment. It is difficult to account for all the variables […]
Classification of goods and stocks
Goods and stocks The economic wealth, or well-being, of a country does not necessarily depend on the mere possession of resources; the point is how these resources are used in generating a flow of production and how, as a consequence, income and wealth are generated from that process. Flow of production People combine their energies […]
Role of the state in Economy
ROLE OF THE STATE Three possible roles for the State/Government in the economy: (i) Regulator of the economic system (where the state takes important economic decisions, announces the required kind of economic policies, takes the sole responsibility to get them implemented and controlling and punishing those who don’t oblige to those economic decisions). (ii) As a producer and/or […]
Important terms in Indian Economy
Adam Smith (1723 – 1790): Regarded as the father of modern Economics. Author of Wealth of Nations. Aggregate monetary resources: Broad money without time deposits of post office savings organisation (M3). Automatic stabilisers: Under certain spending and tax rules, expenditures that automatically increase or taxes that automatically decrease when economic conditions worsen, therefore, stabilising the economy automatically. Autonomous change: A […]
Sectors/structure of the economy
Sectors of The Economy Economic activities have two parts — market activities and non-market activities. Market activities involve remuneration to anyone who performs i.e., activity performed for pay or profit. These include production of goods or services including government service. Non-market activities are the production for self-consumption. These can be consumption and processing of primary […]
Types of economies and economic system
Types of economies Depending upon the shares of the particular sectors in the total production of an economy and the ratio of the dependent population on them for their livelihood, economies are given different names, such as: (i) Agrarian Economy the share of its primary sector is 50 per cent or more in the total […]