Similarly, the Indian embassy in Washington is a part of economic territory of India. (b) Production Boundary (ii) Resale in the same year, then it is known as intermediate good. For example the U.S. embassy in India is a part of economic territory of the U.S.A. National Income: Concepts- Gross Domestic Product (GDP), Gross National Product (GNP) 6 2 . 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. • It is recurring or regular in nature. Economic Models: Models are theories that summarise the relationship among economic variables. As a result we can derive the following, in the case of our simple economy: Chapter Wise NCERT Macro Economics Class 12 Quick Revision Notes and Key Points In English an Hindi Pdf free download was designed by expert teachers from latest edition of NCERT books to get good marks in board exams. (i) There are only two sectors in the economy; that is, household and firms. To simplify analysis each model makes some […] They cram its concepts while in class 11th but in class 12th, cramming is not valid as the syllabus is wide as well as complex. 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, … Introduction to Macroeconomics Lecture Notes Robert M. Kunst March 2006. It is thus not necessary to read all or even most of the ar- (iii) It is not necessary that a resident must also be the national of that country. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Economics Basic Concepts of Macroeconomics. 2 | P a g e at market price and factor cost, … (b) The above definition is based on the criterion “freedom of circulation of persons, goods and capital”. (iv) Hence, Real flows of production and consumption of Firms and households = Money flows of income and expenditure of Firms and Households. There are three types of phases of Circular flow. 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. This document is highly rated by … Important Points about (a) Basis of Classification: If a good is used for: Note: Households are taken as the owners of factors of production. i regularly are part of domestic territory of India. A model is a description of reality with some simplification. Factor Income Even foreigners can be the residents if they pass the above stated economic criterion. These are medical care, transport and communications, education, domestic services rendered by hired servants, etc. (a) According to the United Nations, economic territory is the geographical territory administered by a government within which persons, goods and capital circulate freely. For example, purchases of building, machinery, etc. (iv) Households spend their entire income on consumption. 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. • Semi-durable goods: These goods have an expected life time of use of one year or slightly more. The entire NCERT textbook questions have been solved by best teachers for you. Structure of macro economy: As we know, Macroeconomics is concerned with economic problems at the level of an economy as a whole. 3. (c) The government sector engaged in activities like taxation and subsidies (ii) International organizations like UNO, WHO, etc. • Economics is the science of scarcity. Accordingly, money flows back to the producing sector as household expenditure as shown in the flowchart. In case they continue to stay for one year or more, they will be treated as normal residents of the host country). Economic territory or Domestic Territory: • Household (as the owners of factors of production) supplies factors of production (or factor services) to the producers. 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CBSE Notes for Class 12 Macro Economics. (i) Personal Consumption (like bread purchased by consumer household), or (if) Investment Or Capital Formation (like building, machinery purchased by a firm) • This is a Money Flow from other sectors to the producer sector. (a) Real flow These goods give indirect satisfaction to a consumer. Important topics of 12th Economics are covered. Some Basic Concepts of Macroeconomics; Test: National Income Accounting - 1 ; NCERT Textbook - National Income Accounting; Short Answer Questions - National Income and Related Aggregates; Author. 2. Intermediate goods: These are those, which are used for: (a) These are the goods that are used for: (i) Personal consumption; or (ii) Investment (iii) Consumption expenditure of Household sector = Income of Firm. However, the staffs of these bodies are treated as normal residents of the country in which the international body operates. (a) Any economic variable which is calculated at a particular point of time is known as stock. (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.
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