Class 12 Economics Chapter 1 Notes
introduction of macro economics
Here we are providing notes of the first chapter of Class 12 Economics “Introduction to Macroeconomics”. In this chapter, the main features related to macroeconomics have been studied.
These notes will prove useful for those students who are preparing for the board exam this year. This material prepared in simple and systematic language will help in revising the chapter quickly and remembering the main points.
Macro Economic
Macroeconomics is that part of economic theory which studies the behaviour of aggregates relating to the entire economy such as national income, national output.
Micro economics
Studies individual units of an economy, such as individual demand, production of a firm.
Consumer Goods
Those final goods and services which directly satisfy the human wants of the consumer. The goods and services purchased by the consumer are consumer goods.
capital goods
These are the final goods that help in production and are used for income generation. These increase the capital assets of the producer and are durable in nature.
Final goods
Final goods are those goods which have crossed the production line and are ready for use by their final users. That is, those which are used for consumption or investment.
Consumers
The persons/entities who consume final goods and services to satisfy their wants are called consumers.
Producers
The firms/organisations that produce final goods and services are called producers.
intermediate goods
These are goods and services which can be resold in the same year or are used as raw material in the production of final goods or which can be transformed. These do not directly fulfill human needs. Services used by the producer such as lawyer’s services; raw materials etc. are intermediate goods.
depreciation
The decrease in the value of fixed assets due to normal wear and tear, obsolescence and passage of time is called depreciation or consumption of fixed capital. Depreciation is calculated by dividing the value of fixed capital by its estimated life (in years).
Investment
The increase in the stock of capital goods in a given period is called investment. It is also called capital formation or investment.
Gross Investment:
The total increase in the stock of capital goods in a given time period is called gross investment. It includes depreciation. It is also called gross capital formation.
Net Investment:
Net investment is the net increase in the stock of capital goods in an economy over a period of time. It does not include depreciation.