Introduction Flashcards
Who is known as the father of modern economics
Adam Smith
Who divided economics and how many types of economics are there
Ragnar Frisch
In 2 parts
Microeconomics
Macroeconomics
What is Microeconomics
It deals with the behaviour of individuals and firms economic activities
Eg. Wages, rest, interest, profit etc.
What is Macroeconomics
Deals with the economic activities of an area
It takes into consideration the investment, production consumption in an economy as a whole.
Eg. Unemployment, growth rate, GDP, inflation
Types of economic system
Capitalism
Socialism
Mixed Economy
What is capitalism.
Capitalism is based on
Example of countries with capitalist economy
This is a type of economic system based on private ownership.
Capitalism is based on laissez - faire economics, a theory that restricts government intervention in Economy
Eg. USA, Hong Kong, Singapore
What is socialism ?
Example of socialist country
In this type of economic system the state (government) owns the resources and utilities it for public good.
China, North Korea and Russia
What is a mixed Economy
In this system the combination of socialism and capitalism is present.
In this system the private entity can do work freely under some norms decided by government
Eg. India, Indonesia and France
Who is known as Father of mixed Economy.
From which country was related
John Maynard Keynes
England
What is Keynesian economics
The way to improve the economy of a country is continuously spending money
Government should act as heater i.e. when the spending from common people is less then government should pump up the money in economy
If the government has no money to pump in then borrow some money and when the economy gets started repay the loan by increasing some taxes on citizens.
Control the temperature i.e. spending by the government are regulated not too much as the inflation gets higher
Sectors of economy with example
Primary (being produced):-
Mining, Agriculture, Fishing, logging, Extraction
Secondary (Finished goods):- Automotive, construction, manufacturing, food processing, crafts
Tertiary (services):-
Hospitality, Retail, HealthCare, Real estate, Education.
Quaternary (intellectuals) :-
Media, financial services, education, robotics
Quinary (Decision makers) :-
NGOs, fire service, police service, child care, nursing Homes
Classification of economy on the basis of development
Developed
eg. US, Germany, France
Developing
eg. India, China, Indonesia, South Africa
Under developed
Eg. Some African countries, Pakistan
Classification of the economy on the basis of interrelationship with the rest of the world
Open economy
Eg. India, USA, France, Japan
Closed economy
Eg. China, North Korea
Classification of economy based on different regions
Agriculture based
Eg. Bangladesh
Industrial based
Eg. Japan, China
Service based
Eg. Switzerland
