NCERT Solution Economics Part 2 Class 12 Chapter 1 Introduction

NCERT Solution Economics Part 2 Class 12 Chapter 1 Introduction

NCERT Solution Economics Part 2 Class 12 Chapter 1 Introduction

ncert solution class 12 economics part 2 chapter 1

NCERT Solution Economics Part 2 Class 12 Chapter 1 Introduction all questions and answers. Economics Part 2 Class 12 1st Chapter Introduction exercise solution and experts answer. As one of online learning platforms, we (netex.) are excited to offer the NCERT Solution Economics Part 2 Class 12 Chapter 1. This solution is designed to help students who are looking to brush up on their physics concepts on Chapter 1 Introduction.

 

 

1.) What is the difference between microeconomics and macroeconomics?

Microeconomics Macroeconomics
micro means small macro means large
microeconomics has to study the individual markets of demand and supply. macroeconomics has to study the aggregate effects of the forces of demand and supply in the markets.
micro economics study as individuals . macro economic study economy as whole.

 

2.) What are the important features of a capitalist economy?

Ans- a capitalist economy can be defined as an economy in which most of the economic activities have the following characteristics (a) there is private ownership of means of production (b) production takes place for selling the output in the market (c) there is sale and purchase of labour services at a price which is called the wage rate (the labour which is sold and purchased against wages is referred to as wage labour).

Macroeconomics deals with the aggregate economic variables of an economy. It also takes into account various interlinkages which may exist between the different sectors of an economy. This is what distinguishes it from microeconomics; which mostly examines the functioning of the particular sectors of the economy, assuming that the rest of the economy remains the same. Macroeconomics emerged as a separate subject in the 1930s due to Keynes. The Great Depression, which dealt a blow to the economies of developed countries, had provided Keynes with the inspiration for his writings. In this book we shall mostly deal with the working of a capitalist economy.

 

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3.) Describe the four major sectors in an economy according to the macroeconomic point of view.

Ans- Macroeconomics also tries to analyse how the individual output levels, prices, and employment levels of these different goods gets determined. three general kinds of commodities may be taken as a representative of all commodities being produced within the economy: agricultural goods, industrial goods and services. These goods may have different production technology and different prices. the country’s economy as a whole may best be seen as composed of distinct sectors. For certain purposes the interdependence of (or even rivalry between) two sectors of the economy (agriculture and industry, for example) or the relationships between sectors (like the household sector, the business sector and government in a democratic set-up) help us understand some things happening to the country’s economy much better, than by only looking at the economy as a whole. away from different goods and focusing on a representative good may be convenient, in the process, we may be overlooking some vital distinctive characteristics of individual goods. For example, production conditions of agricultural and industrial commodities are of a different nature. Or, if we treat a single category of labour as a representative of all kinds of labours, we may be unable to distinguish the labour of the manager of a firm from the labour of the accountant of the firm. So, in many cases, instead of a single representative category of good (or labour, or production technology), we may take a handful of different kinds of goods. For example, three general kinds of commodities may be taken as a representative of all commodities being produced within the economy: agricultural goods, industrial goods and services. These goods may have different production technology and different prices. therefore four major sectors in an economy :household sector -for the production of goods and services the firms purchase factors of production Apart from the firms and the government, there is another major sector in an economy which is called the household sector. By a household we mean a single individual who takes decisions relating to her own consumption, or a group of individuals for whom decisions relating to consumption are jointly determined . producer sector – welfare agency and government as producer the developed and developing countries, apart from the private capitalist sector, there is the institution of State. The role of the state includes framing laws, enforcing them and delivering justice. The state, in many instances, undertakes production – apart from imposing taxes and spending money on building public infrastructure, running schools, colleges, providing health services etc. These economic functions of the state have to be taken into account when we want to describe the economy of the country. For convenience we shall use the term “Government” to denote state. The external sector -related to export and import of goods and the flow of capital .all the countries of the world are also engaged in external trade.

 

4.) Describe the Great Depression of 1929.

Ans – The Great Depression of 1929 and the subsequent years saw the output and employment levels in the countries of Europe and North America fall by huge amounts .Macroeconomics deals with the aggregate economic variables of an economy. It also takes into account various interlinkages which may exist between the different sectors of an economy. This is what distinguishes it from microeconomics; which mostly examines the functioning of the particular sectors of the economy, assuming that the rest of the economy remains the same. Macroeconomics emerged as a separate subject in the 1930s due to Keynes. The Great Depression, which dealt a blow to the economies of developed countries, had provided Keynes with the inspiration for his writings.It affected other countries of the world as well. Demand for goods in the market was low, many factories were lying idle, workers were thrown out of jobs. In USA, from 1929 to 1933, unemployment rate rose from 3 per cent to 25 per cent (unemployment rate may be defined as the number of people who are not working and are looking for jobs divided by the total number of people who are working or looking for jobs).the worst economics downturn in the history of the industrialised world lasting from 1929 to 1939.It began after the stock market crash of oct 1929,

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Updated: April 15, 2023 — 2:19 pm

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