Macroeco.....
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Module 1 Introduction
Unit Structure : 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Objectives Distinction between Microeconomics and Macroeconomics Circular flow of Economic activities Gross National Product (GNP) Net National Product (NNP) Personal Income Disposable Income Summary Questions
1.0 OBJECTIVES
1. To study the distinction between Microeconomics and Macroeconomics 2. To study the Circular Flow of Economic Activities 3. To understand the concept of Gross National Product (GNP) 4. To understand the concept of Net National Product (NNP) 5. To understand the concept of Personal Income 6. To understand the concept of Disposable income
1.1 DISTINCTION BETWEEN AND MACROECONOMICS
MICROECONOMICS
1.1.1 Meaning :Microeconomics studies economic behaviour of individual economic entities and individual economic variables. The economic entities may be individuals or small group of individuals. It is the study of individual economic units such as individual firms and households, individual prices, wages, income, individual industries and individual commodities. Macroeconomics is concerned with the nature, relationships and behaviour of such aggregate quantities and averages as national income, total consumption, savings and investment, total employment, general price level, aggregate expenditure and aggregate supply of goods and services. As macroeconomics deals with aggregate quantities of the economy as a whole, it is also called as aggregative economics. 1.1.2 Subject matter :Microeconomics seeks to explain how an individual consumer
2 distributes his disposable income among various goods and services. How he attains the level of maximum satisfaction and how he reaches the point of equilibrium. Microeconomics is also concerned with how individual firms decide `what to produce‘, `how to produce‘, and `at what cost to produce‘ to minimise the cost of production. To be specific, theory of consumer‘s behaviour, theory of firms or theory of production, theory
Module 1 Introduction
Unit Structure : 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Objectives Distinction between Microeconomics and Macroeconomics Circular flow of Economic activities Gross National Product (GNP) Net National Product (NNP) Personal Income Disposable Income Summary Questions
1.0 OBJECTIVES
1. To study the distinction between Microeconomics and Macroeconomics 2. To study the Circular Flow of Economic Activities 3. To understand the concept of Gross National Product (GNP) 4. To understand the concept of Net National Product (NNP) 5. To understand the concept of Personal Income 6. To understand the concept of Disposable income
1.1 DISTINCTION BETWEEN AND MACROECONOMICS
MICROECONOMICS
1.1.1 Meaning :Microeconomics studies economic behaviour of individual economic entities and individual economic variables. The economic entities may be individuals or small group of individuals. It is the study of individual economic units such as individual firms and households, individual prices, wages, income, individual industries and individual commodities. Macroeconomics is concerned with the nature, relationships and behaviour of such aggregate quantities and averages as national income, total consumption, savings and investment, total employment, general price level, aggregate expenditure and aggregate supply of goods and services. As macroeconomics deals with aggregate quantities of the economy as a whole, it is also called as aggregative economics. 1.1.2 Subject matter :Microeconomics seeks to explain how an individual consumer
2 distributes his disposable income among various goods and services. How he attains the level of maximum satisfaction and how he reaches the point of equilibrium. Microeconomics is also concerned with how individual firms decide `what to produce‘, `how to produce‘, and `at what cost to produce‘ to minimise the cost of production. To be specific, theory of consumer‘s behaviour, theory of firms or theory of production, theory
References: : 1. Stonier A. W. & D. C. Hague ( 2004 ), A Textbook of Economic Theory, Pearson Education , Delhi. 2. Dwiwedi , D. N. ( 2001 ), Macroeconomics : Theory and Policy , Tata McGraw – Hill Publishing company Ltd, New Delhi. 3. McConnel , C. R. & H. C. Gupta (1984 ), Introduction to Macro Economics , Tata McGraw – Hill Publishing Company Ltd, New Delhi. 4. Gupta, S. B. (1994 ), Monetary Economics, S. Chand and Company , Delhi. 5. Bhole, L. M. (1999 ), Financial Institutions and Markets, Tata McGraw Publishing Company , Delhi. 6. Musgrave, R. And P. Musgrave (1983), Public Finance : Theory and Practice, Singapore. 7. Hyman, D. N. (1973), The Economics of Governmental Activity , Halt Rinehart & Winston, New York. 8. Bagchi, A. (ed) (2005), Readings in Public Finance , Oxford University Press, New Delhi. 9. Pathak, B. V. (2003), Indian Financial System, Pearson Education, Delhi. 10. Datt, R. & K. P. M. Sundaram (2001), Indian Economy : Environment and Policy , S. Chand & Company Ltd., New Delhi. 11. Dhingra, I. C. (2001) , The Indian Economy ; Environment and Policy , S. Chand & Company Ltd., New Delhi. 12. Misra, S. K. & V. K. Puri (2001), Indian Economy : Its Development Experience, Himalaya Publishing House, Mumbai.