GROSS NATIONAL PRODUCT (GNP)

GROSS NATIONAL PRODUCT (GNP)            This is the basic social accounting measure of the total output or aggregate supply of goods services, gross national product is defined as the total market value of all goods and services produced in a year. It is a measure of the current output of economic activity in the country. Two things must be noted in regard to gross national product. (i) It measure the market value of the annual output. In other words, G.N.P is a monetary measure. There is no way of adding up...

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GROSS DOMESTIC PRODUCT (GDP)

GROSS DOMESTIC PRODUCT (GDP)                It is a key concept used in the measurement Of total income of a nation. Gross domestic product is the total market value of all final goods and services produced within a country in a given period of time. According to Shapiro “GDP is defined as a flow variable, measuring the quantity of final goods and services produced during a year? The essential features of GDP are: (i) GSP IS THE TOTAL MARKET VALUE. It measures the total market...

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SUBJECT-MATTER OF MACRO ECONOMICS

SUBJECT-MATTER OF MACRO ECONOMICS          The Study of Economics is divided by the modern economist into two parts Micro-Economics and Macro-Economics. MACRO-ECONOMICS:                 An a economic system may be looked at as a whole or in terms of its innumerable decision-making units (such as consuming units, e.g. individual consumers and households) producing units e.g. ( firms, farms business and mining concerns), individual...

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IMPORTANCE OF THE STUDY OF ECONOMICS

IMPORTANCE OF THE STUDY OF ECONOMICS            This is an age of economics as people all over the world have become economic minded. People living in the third world countries in particular have realized that the study of economic can provide a solution to their economic and solution to their economic and social problems. Hence, the subject off economics has gained tremendous importance these days. We now discuss (a) Theoretical uses and (b) practical uses of economics. (A) THEORETICAL...

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BASIC PROBLEMS IN MICRO ECONOMICS

CLASSIFICATION OF ECONOMICS        There are two types of Economics: (1) THEORETICAL ECONOMICS. (2) APPLIED ECONOMICS.       THEORETICAL ECONOMICS: In general, economics is a science which studies the economic activities of the people in their social life. These activities have been focused by economists through inductive and deductive methods to arrive at economic theories/principles and economic laws. These theories and laws have been put together to make theoretical economic....

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METHODS OF DRIVING ECONOMIC LAWS

METHODS OF DRIVING ECONOMIC LAWS          Economists have adopted two methods of investigation. Regardless of whether they are natural or social, they are known as the deductive and inductive methods. DEDUCTIVE METHODS: Deductive comes from the word deduce, which means to infer by logical reasoning or in other words to conclude from known facts or general principles. This method is also known as an analytical abstract a prior method. According to deductive method, we start from general observation,...

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CHARACTERISTICS OF ECONOMIC LAW

CHARACTERISTICSOF ECONOMIC LAW (1) ECONOMIC LAWS ARE CONDITIONAL: That is why, at the end of the statement of each economic law it is always state that “all other factors remain constant”. For example, the law of demand is state as “ a rise the price of a commodity or service is followed by a reduction in demand and a fall in price is followed by an increase in demand if all other things remain constant”. The factor to remain constant here are income of the consumer, state, fashion and prices of substitutes and complementary goods. If these...

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ECONOMIC LAWS, and COMPARISON OF ECONOMIC LAWS

ECONOMIC LAWS          Economics is a social science. It has been commonly observed that people, while living in society, show a similar economic behavior. This economics behavior in different aspect of economic life has been summed up as a set generalization which is known as economic laws. Thus, an economic law is a statement, concluded and inferred on the economic behavior of the people in general. In other words, economic laws are supposed to govern and explain all economic activities of the people...

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SCOPE OF ECONOMICS, and SUBJECT MATTER

SCOPE OF ECONOMICS                              The Scope of economics refers to the extent to which it deals with the economics life of the people. This broad statement covers all that has so far been written in the subject of economics. Hence, it is not possible to cover all this in a few lines. There are three general aspects of the subject that we must cover.    (i) Subject matter of economics.   (ii)...

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Definition, Scope and nature of Economics

Nature And Scope Of Economics Economics is science which studies the life of people living in a country or in the world as a whole. What is the economic life of the people or in other worlds, what is economics?  To answer  this question we have to analyze the definition of economics which is given below DEFINITIONS OF ECONOMICS:    There are three well-known definitions of economics (i)  Definition of economics given by the classical School of thought led by Adam smith. (ii)   Definition of economics...

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