What is Money? Money can be defined as any asset or commodity that is widely accepted for the exchange of goods and services. The word “Money” is derived from the Latin word “Moneta”. According to Mankiw: Money is the stock of assets that can be readily used to make transactions.
Inflation Inflation is a sustained increase in the general price level of goods and services in an economy over time. When the general price level increases purchasing power of money decreases and each unit of money buys fewer goods and services. Thus, money losses its value. Prof. Coulborn defines inflation
In this post we will discuss the concepts of nominal GDP, real GDP, GDP deflator and inflation. Before going forward we must know what GDP is? Gross Domestic Product is the total market value of all final goods and services produced within a country in a year. To see more
Aggregate Demand Aggregate demand is the total quantity of goods and services demanded by all households, all firms, government and foreign sector in a year. It is the sum of consumption, investment, government expenditure and net exports. It is also called aggregate expenditure or aggregate spending. Therefore, AD represents the
Measurement of National Income In the post National Income and Its various Concepts, we define national income as National Income is the sum of income earned by all factors like land, labor, capital and entrepreneur in form of rent, wages, interest and profit in a year. Alfred Marshall in his book
In this post we will discuss the basic introduction to public finance including the concepts of budget, various types of budgets, sources of public revenue, types of public expenditure. Moreover, we pass through definitions of fiscal policy and its objective along with tools of fiscal policy. Public finance is the
GDP has four types of expenditure such as consumption, investment, government expenditure and net exports. We call this expenditure as components of GDP. Each unit of money spend in the economy fall into one of these 4 components of GDP. Before studying components of GDP, we must know what GDP
What is National Income (NI) National Income (NI) is the sum of income earned by all factors like land, labor, capital and entrepreneur in form of rent, wages, interest and profit in a year. It can also be defined as the total market value of all final goods and services
What is National Income? Before defining national income, it is necessary to define income. Any benefit either in form of money or other that is received against a service is called income. There are four sources of income for an individual. Rent: It is the income receive from lending their
Economics studies how individuals, businesses and government make choices in face of scarcity. Microeconomics focuses on small-scale economic activity, whereas macroeconomics examines the entire economy. In this post, we’ll look at what macroeconomics is, how it differs from microeconomics, and why it’s important for understanding the world we live in.