Economics

  1. Basic Concepts of Macroeconomics Macroeconomic   Macroeconomics is the branch of economics that deals with the behaviour and performance  of an economy as a whole. Difference between Microeconomics and  Macroeconomics Microeconomics studies the behaviour of individual economic units.  Example - demand of a consumer, price determination of a commodity It's main tools are demand and supply.  It is also called price theory Macroeconomics studies the behaviour of the economy as a whole.  Example - income and employment in the economy, money supply in the economy It's main tools are aggregate demand (AD) and aggregate supply (AS).  It is also called Income and Employment Theory.  Final Goods  Final goods refer to those goods which are either used for consumption purpose  or for investment purpose by the end user. For example - Milk, machine etc * Expenditure made on them is called final expenditure Intermediate Goods  Intermedi...

 An index number measures the relative change in price, quantity, value or some other item of interest from one period to another.  Index numbers are a way to measure a group of data in a relative way. Features of Index Number Index numbers are expressed in terms of percentages. However, percentage sign (%) is never used. Index numbers are relative measurement of group of data. Index numbers offer a precise measurement of the quantitative change in the concerned variables over time. Index number show changes in terms of averages. They are expressed in numbers. Index number facilitates the comparative study over different time period. Importance of Index number It serves as a barometer for measuring the value of money. Gives knowledge about change in standard of living. It helps the business community in planning their decision. Helpful to determine the rate of premium. Limitation of Index Number Limited applicability International comparison is not possible Limited covera...