The thick border drawn around these three units is the Production Boundary. (c) There is time dimension in flow variables. (they are supposed to stay in the host country for less than one year. Current transfers: Transfers made from the current income of the payer and added to the current income of the recipient (who receive) for consumption expenditure are called current transfers. Free PDF download of NCERT Solutions for Class 12 Macro Economics Chapter 1 Introduction to Macroeconomics and its Concepts solved by Expert Teachers as per NCERT (CBSE) Book guidelines. (a) Income earned by factor of production by rendering their productive services in the production process is known as Factor Income. For example, Speed, Spending of Money, Water in River, Exports, Imports, etc. (ii) A person born outside India applies for citizenship and Indian Law allows him to become Indian Citizen. (a) According to the United Nations, economic territory is the geographical territory administered by a government within which persons, goods and capital circulate freely. Thus, the basis of classification between these two goods is not the commodity itself, but the use made of it. Economics is the study of _____. 12. (i) Current Transfers The production boundary is the imaginary line around the production unit. (i) Further processing (like sugar used for making sweets); or (b) Expenditure on Military Equipment missiles, rockets, bombs, warships, submarines, military aircrafts, tanks, missile carriers and rocket-launchers etc. It is thus not necessary to read all or even most of the ar- Following are not included under the category of Normal residents: Factor income and transfer income.2. With few exceptions, the articles are also summarized in Romer or Blanchard and Fischer. It is a Money Flow. (vi) There is no government or foreign trade. (iv) Households spend their entire income on consumption. (i) Total production of goods and services by firms = Total consumption of goods and services by Household Sector. Macro Economics Notes for Class 12 CBSE Pdf contains notes of all chapters are part of Revision Notes for Class 12. • If we study it in term of the quantity of goods and services produced, it is a Real Flow. • Producers supply goods and services to the households. For example, Indian Ships moving between china and India 2 | P a g e at market price and factor cost, … • Imports: deliveries of goods and services from other countries to the US. principles of macroeconomics senior contributing authors steven a. greenlaw, university of mary washington timothy taylor, macalester college We build en-tirely on models with microfoundations, i.e., models where behavior is derived from basic ☞ Class 12 Solved Question paper 2020 ☞ Class 10 Solved Question paper 2020. Even foreigners can be the residents if they pass the above stated economic criterion. each week) to work in the neighbouring country are the normal residents of their own countries. For example, replacement of the tyres of a truck is an intermediate consumption, but not the replacement of its engine. 4. (i) Production Phase: The students enter in class 12 already studied economics in their class 11th but still they find this subject as complex one as they don’t have the idea of its basics. (iii) These two sectors are dependent on each other in the following ways: including repair and maintenance of capital stock: Non-durable goods and services are those which have an expected life time of use of less than one year. In research and exploratory activities (like oil exploration in different parts of India by the Oil and Natural Gas Commission) or improving the technology of a particular production process. Composition of GDP - Spending in billion $ in % of GDP Total Nom. The revision notes covers all important formulas and concepts given in the chapter. Revision is certainly a significant factor of self-studying. 1. • Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international waters where they have exclusive (i) There are only two sectors in the economy; that is, household and firms. So, these are not treated as a part of economic territory of India. are Non-resident Indians (NRI) but continue to remain Indian nationals. (i) Personal consumption; or (ii) Investment 5. And amidst all these preparations, there will be someone or some committeeoverseeing or managing the entire event at a large scale or macro level. (ii) Resale in the same year, then it is known as intermediate good. • Since we are unable to have everything we desire, we must make choices on how we will use our resources. Macroeconomics is the part of economic theory that studies the economy as a whole, such as national income, aggregate employment, general price level, aggregate consumption, aggregate investment, etc. The goods and services purchased include both durable goods and non-durable goods and services. Basic concepts of macroeconomics | Economics | class 12.In this video the following topics are covered:1. • Services: Services are non-material goods which satisfy the human wants directly. 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They are not of relatively great value. located within the geographical boundaries of a country. (iii) In layman terms, the domestic territory of a nation is understood to be the territory lying within the political frontiers (or boundaries) of a country. There are three types of phases of Circular flow. For example, international body like World Health Organisation located in India is not normal resident of India but Americans working in its office for more than a year will be treated as normal residents of India. (c) It is not included in National Income as it does not contribute anything in the flow of goods and services. Final Goods These are foodgrains, milk and milk products, edible oils, beverages, vegetables, tobacco and other food articles. Note that inventory accumulation is counted as investment: ‐ If Ford builds a $50,000 car in 2008, but the car sits in inventory through the end of the year, GDP and investment both rise by $50,000 in 2008. The core concepts of macroeconomics are crucial in almost every aspect of daily life. 4. • It is recurring or regular in nature. However, the goods received for distribution to consumer households without renovation or alternation should not be included in intermediate consumption as these goods go into the final consumption of consumer households. It refers to flow of money, income or the flow of goods and services across different sectors of the economy in a circular form. (a) Citizenship is basically a legal concept based on the place of birth of the person or some legal provisions allowing a person to become a citizen. (iii) Consumption expenditure of Household sector = Income of Firm. • Business expenses of the employees on tours and entertainment. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, CBSE NotesCBSE Notes Macro EconomicsNCERT Solutions Macro Economics. • Producer Sector. 8. The best app for CBSE students now provides accounting for partnership firm’s fundamentals class 12 Notes latest chapter wise notes for quick preparation of CBSE board exams and school based annual examinations. (c) According to the production boundary, if a good does not cross the imaginary line around the production unit and reaches to other firm within the production boundary, is known as intermediate good. are a part of capital goods. (ii) Capital Transfers The concepts should be clear which will help in faster learning. 1. (i) One example is embassies. Introduction to Business Economics: Basic concepts, Economic rationale of optimization, Nature and scope of business economics, Macro and Microeconomics, Basic problems of an economy, Marginalism, Equimarginalism, Opportunity cost principle, Discounting principle, Risk and uncertainty.Externality and trade-off, Constrained and unconstrained optimization, Economics of … 2. 9. Circular Flow Of Income In Two Sector Model: The following assumptions with regard to a simple economy with only two sector of economics activity are: The lecture notes combine the approaches of and adapt materials in both books. There are two types of Circular flow: (b) Resale in the same year (If car purchased by a car dealer for resale). • Trade Surplus: if trade balance positive 13. (iii) It is not necessary that a resident must also be the national of that country. (ii) International organizations like UNO, WHO, etc. Significance of Macroeconomics NCERT PDF. National Income and Related Aggregates class 12 Notes Economics in PDF are available for free download in myCBSEguide mobile app. (ii) Crew members of foreign vessels, commercial travelers and seasonal workers in , the country (Foreign workers who work part of the year in the country in response to the varying seasonal demand for labour and return to their households and border workers who regularly cross the frontier each day or somewhat less regularly, (i.e. (They are supposed to stay for less than one year. (i) Real flow of income implies the flow of factor services from the household sector to the producing sector and corresponding flow of goods and services from the producing sector to the household sector. If you are appearing for CBSE Class 12th Board exams 2020, check this list of Chapter-wise important questions and answers from Micro and Macroeconomics 3. In case they continue to stay for one year or more in the host country, they will be treated as normal residents of the host countiy). These phases are illustrated in the figure given here. (ii) The resident carries out the basic economic activities of earnings, spending and accumulation from that location (ii) According to the production boundary, if a good crosses the imaginary line around the production unit and reaches to final consumer or investment made by a producer within the imaginary line of production unit, it is known as final good. ‘Consulate’ is an office or building used by consul (an officer commissioned by the government to reside in a foreign country to promote the interest of the countiy to which he belongs). View PDF CBSE Class 12 Macroeconomics Study Material Hindi Notes CBSE Class 12 Macroeconomics study material -(HINDI VERSION). (iii) Some more examples of capital goods are machinery, equipment, roads and bridges. Its main instruments are aggregate demand and aggregate supply. 8. Citizenship/Nationalship (b) The above definition is based on the criterion “freedom of circulation of persons, goods and capital”. (a) Value of all Non-durable Goods and Services such as petrol, electricity, lubricants, stationery, soaps, towels etc. 2. A successful revision is a prime factor to score well and succeed in the studies. Examples: Old Age Pension, Scholarship, Unemployment allowance. (i) When a person is born in India, he acquires automatic citizenship of India. Government of India does not enjoy the above freedom in the foreign embassies located within India. (b) It is dynamic in nature, i.e., it can be changed. (u) Categories of Consumption Goods: 2. Views. (a) Real flow They are motor cars, refrigerators, television sets, washing machines, air-conditioners, kitchen equipments, computers, communication equipments etc. Filed Under: CBSE Tagged With: cbse notes, Class 12 Macro Economics Notes, class 12 notes, ncert notes, Revision Notes, RD Sharma Class 11 Solutions Free PDF Download, NCERT Solutions for Class 12 Computer Science (Python), NCERT Solutions for Class 12 Computer Science (C++), NCERT Solutions for Class 12 Business Studies, NCERT Solutions for Class 12 Micro Economics, NCERT Solutions for Class 12 Macro Economics, NCERT Solutions for Class 12 Entrepreneurship, NCERT Solutions for Class 12 Political Science, NCERT Solutions for Class 11 Computer Science (Python), NCERT Solutions for Class 11 Business Studies, NCERT Solutions for Class 11 Entrepreneurship, NCERT Solutions for Class 11 Political Science, NCERT Solutions for Class 11 Indian Economic Development, NCERT Solutions for Class 10 Social Science, NCERT Solutions For Class 10 Hindi Sanchayan, NCERT Solutions For Class 10 Hindi Sparsh, NCERT Solutions For Class 10 Hindi Kshitiz, NCERT Solutions For Class 10 Hindi Kritika, NCERT Solutions for Class 10 Foundation of Information Technology, NCERT Solutions for Class 9 Social Science, NCERT Solutions for Class 9 Foundation of IT, PS Verma and VK Agarwal Biology Class 9 Solutions, NCERT Solutions for Class 10 Science Chapter 1, NCERT Solutions for Class 10 Science Chapter 2, Periodic Classification of Elements Class 10, NCERT Solutions for Class 10 Science Chapter 7, NCERT Solutions for Class 10 Science Chapter 8, NCERT Solutions for Class 10 Science Chapter 9, NCERT Solutions for Class 10 Science Chapter 10, NCERT Solutions for Class 10 Science Chapter 11, NCERT Solutions for Class 10 Science Chapter 12, NCERT Solutions for Class 10 Science Chapter 13, NCERT Solutions for Class 10 Science Chapter 14, NCERT Solutions for Class 10 Science Chapter 15, NCERT Solutions for Class 10 Science Chapter 16, CBSE Previous Year Question Papers Class 12, CBSE Previous Year Question Papers Class 10. The emphasis is on theory, although data guides the theoretical explorations. The entire NCERT textbook questions have been solved by best teachers for you. However, it’s not necessary that all purchases by one production unit from other production units are intermediate purchases. Try to take the help from these economics notes daily as it will help you to cover your syllabus throughout the year. productive processes. CBSE quick revision note for class-12 Physics, Chemistry, Math, Biology and other subject are very helpful to revise the whole syllabus during exam days. Such an economy described above has two types of markets. Moreover, by learning NCERT class 12 Macroeconomics, you can assess government welfare and employment. In most cases, everyone is involved in one activity or the other. (a) Any economic variable which is calculated at a particular point of time is known as stock. When you study NCERT Macroeconomics class 12 PDF books, you can form an understanding of availability of goods and services. The intermediate consumption of the general government includes the following items: This document is highly rated by … Example: The decision … CBSE Notes for Class 12 Macro Economics. 7. (b) The centre of economic interest implies in two things: Get OLD NCERT BOOKS Printed Study Notes (Download) NCERT Book For Class XII : Economics - Macroeconomics Table of Contents. 3 1 2. For example, purchases of building, machinery, etc. (ii) Household supply factor services to firms. • Transfers made from the income of the payer and added to the income of the recipient (who receive) for consumption expenditure are called current transfers. National income, or for that matter any aggregate related to it, is a measure of the … Structure of macro economy: As we know, Macroeconomics is concerned with economic problems at the level of an economy as a whole. But in national income accounting, the term domestic territory is used in a wider sense. (b) In other words, intermediate goods are the ones, which require further processing and are not available in an economy for the purpose of consumption. Introduction to Macroeconomics and its Concepts – CBSE Notes for Class 12 Macro Economics CBSE NotesCBSE Notes Macro EconomicsNCERT Solutions Macro Economics Introduction And Structure Of MacroEconomics: 1. (c) There is a difference between the terms normal resident (resident) and citizen (or national). However, the staffs of these bodies are treated as normal residents of the country in which the international body operates. You and your friends may either volunteer for backstage help or participate in one or more events. 2. Dec 26, 2020 - Chapter 1 & 2 (Macro Economics) - Chapter Notes | EduRev Notes is made by best teachers of Commerce. Repair and maintenance of capital stock mean expenditure incurred for maintaining fixed assets and keep them in good working order. 3. Or in other words, the big picture. For example the U.S. embassy in India is a part of economic territory of the U.S.A. Within this limit, wheat and flour are intermediate goods. ADVERTISEMENTS: Basic Concepts of Macroeconomics! (iv) International bodies like World Bank, World Health Organisation or International Monetary Fund are not considered residents of the country in which these organisations operate but are treated as residents of international territory. (ii) The households spend their incomes on the goods and services produced by the producing sector. Capital goods: Capital goods are defined as all goods produced for use in future Transfer Income • Economics is the science of scarcity. 7. rights of operation. Chapter 1 Introduction. (b) In other words, final goods are those, which require no further processing and are available in an economy for consumption purpose or investment. 4.7 Related Searches. (v) Firms sell all that is produced to the households. 6. (b) Production Boundary Similarly, planes operated by Malaysian Airlines between India and Japan are a part of the domestic territory of Malaysia. (b) Money/Monetary/Nominal Flow • Advertisements, market research and public relationship meant for improving the goodwill of the business enterprises. (i) Market for goods and services, that is product market. (ii) Resale in the same year (If car purchased by car dealer for resale). • Commodities consumed. (a) Personal consumption (like bread purchased by consumer household), or Real flow or physical flow: Real flow of income implies the flow of factor services from the household sector to the producing sector and corresponding flow of goods and services from the producing sector to the household sector. To simplify analysis each model makes some […] 11. • Household (as the owners of factors of production) supplies factors of production (or factor services) to the producers. 1. This phase deals with expenditure on the purchase of goods and services by households and other sectors. Circular flow of income: It refers to flow of money income or the flow of goods and services across different sectors of the economy in a circular form. (v) Foreigners who are the employees of non-resident enterprises and who have come to the country for purposes of installing machinery or equipment purchased from their employers. (a) Any economic variable which is calculated during a period of time is known as flow. For example, cars, television sets, bread, furniture, air-conditioners, etc. Similarly, planes operated by Air India between Russia and Japan are part of the domestic territory of India. Make sure to underline the concepts you seem tough as it will remind you later to revise it again. 1. It is also called the ‘Income Theory’ or ‘Employment Theory’. Students … 1 Macroeconomics Macroeconomics (Greek makro = ‘big’) describes and explains economic processes that concern aggregates. i regularly are part of domestic territory of India. Military vehicles and light weapons. • It is non recurring or irregular in nature. As a result we can derive the following, in the case of our simple economy: The overriding goal of the course is to begin provide methodological tools for advanced research in macroeconomics. For example, a large number of Indian nationals have settled in U.S.A., England, Bread is final good as it lies outside the purview of production boundary. They cannot be seen or touched, i.e., they are intangible in nature. In the given diagram, there are 3 production units. (b) It is static in nature, i.e., it do not change. Introduction to Macroeconomics and its Concepts Questions with Solutions to help you to revise complete Syllabus and Score More marks in your Class 12 Examinations. Grab the concepts of this chapter until you have confusion. Examples of these transfers in kind are food, clothing, medicines, vegetable oils, butter, toys sent by the government of one country to the other in times of natural calamities or as a token of goodwill and friendship between two countries. • Household Sector. (e) Research and development Pj Commerce Academy. • Ships and aircrafts owned and operated by normal residents between two or more countries. (a) Consumption Goods: For example, Fishing boats operated by Indian fishermen in international waters of Indian Ocean will be considered a part of domestic territory of India. Once done, move to other chapters. 10. Examples: Rent, interest, wages and profit. (b) It is a unilateral [one-sided] concept. Clearly, those parts of the political frontiers (or boundaries) of a country where the government of that country does not enjoy the above “freedom” are not to be included in economic territory of that country. (i) A person becomes a national of a countiy because he was born in the country or on the basis of some other legal criterion. Important Points about (ii) Factor Payments by Firms = Factor Incomes of Household Sector. (i) Money flow refers to the flow of factor income, as rent, interest, profit and wages from the producing sector to the household sector as monetary rewards for their factor services as shown in the flowchart. • Disposition means expenditure made. These goods give indirect satisfaction to a consumer. (i) Personal Consumption (like bread purchased by consumer household), or (if) Investment Or Capital Formation (like building, machinery purchased by a firm) Final goods can be classified into two groups: Consumption Goods and Capital Goods. (d) Rest of the world sector engaged in exports and imports. (b) It means, Indian citizenship can arise in two ways: (iv) These goods require repair or replacement over time as their value depreciate over a period of time. They are treated as part of the economic territories of their respective countries. Factor Income 11. (a) A Normal residenf, whether a person or an institution, is one whose centre of economic interest lies in the economic territory of the country in which he lives. The students need to learn micro as well as macroeconomics. • Capital transfers are defined as transfers in cash and in kind for the purpose of investment to recipients, made out of the wealth or saving of the donor. Macroeconomics implies study of different sectors of the new parts of the employees on tours and entertainment Financial... Other food articles: OLD Age Pension, etc these goods require repair or replacement over time as value! 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