Economics:
- Economics is the social science that studies the production, distribution and consumptions of goods and services.
- Economics studies the economic activities of mankind.
Economics and Economy
- Economics will come out with theories of market, employment, etc.,
- An economy is the real picture of the things which emerges after the application of those theories.
Factors of Production:
- Land : Rent
- Labour : Wage
- Capital : Interest
- Organization : Profit
Wings of economy
- Micro economy
- Deals with a problem such as the output of a single firm or industry, price of a single commodity and spending on goods by a single household.
- Macro economy
- Macro economy studies the economy as a whole.
- Like national income, unemployment, poverty, balance of payments and inflation.
- Modern form of macroeconomics began with John Maynard Keynes in his book “the general theory of Employment, Interest and Money”
- He explains about Great Depression
- He is called Father of Macro Economics