Macro Economics and its Limitations macro economics ki badha

Macro Economics and its Limitations

Macro Economics is the study of collective data of our economics. In macro economics, we analysis data as a whole like – total employment, national income, GDP, total consumption, total demand and supply etc. macro economic analysis economics as a units, also analysis the inter relationship of different sub-units in a economics.

In macro economics, we not discuss on a single units but treats whole economic as a single units. It draws a big picture of the economics and also draw inter relationship of different sub-units. It covers all the issue or problems of an economy and also tries to find out a correlation with others.    

knowledge about macro economics

Limitations of a Macro Economics –

ü  Behaviour issue – macro economics is analysis economics as a whole but this thing is not applicable for all the times. Some things is good for an individual market but not for all the market. For example – some-one is drawing amount from bank then there is no issue but if all persons are doing the same activity then it is a big issue for bank.

ü  Macro-economic, we assume the entire individual group as a same units or sub-units. For example like total income or average income of a particular group or units.

ü  In macro economics, some time aggregate variables are not important like if there is a increase in national income so it is not possible that there is a increase in all personal income.

ü  Create conflicts – if we form any policy on the behalf of macro-economic but that is not suitable for micro economics or individual units.  

What do you mean by Macro Economics

What do you mean by Macro Economics?

Macro Economics is the study of collective data of our economics. In macro economics, we analysis data as a whole like – total employment, national income, GDP, total consumption, total demand and supply etc. macro economic analysis economics as a units, also analysis the inter relationship of different sub-units in a economics.

In macro economics, we not discuss on a single units but treats whole economic as a single units. It draws a big picture of the economics and also draw inter relationship of different sub-units. It covers all the issue or problems of an economy and also tries to find out a correlation with others. 

A study about Macro Economics

Importance of Macro Economics

Ø  In macro economics, we understand the macro variables so it help us to understand the economic in a broad way like total employment, total income, GDP, total demand & supply and so on.

Ø  Micro economic work as a whole. These things help us to form the policy for different sub-units or area like total income in different sector, monetary policy, business cycles and so on.

Ø  Micro economic help us to understand the individual behaviour also, if we add all individual demand it become total demand of an economic and this help us to form a policies for whole.

Micro Economics – Importance and Limitation

Micro Economics – Importance and Limitation

Micro – a word which is firstly used by Ragner Frisch. In micro economics, we include the economic activity at micro level or unit level or individual level. Micro economic cover all its financials activities at lower levels. It also analysis them & find out some meaning-full outcomes. In other words, we can say that it is a study about “special firm, special family, individual incomes, prices or special goods and services”.

Micro Economics

ü Micro economics help us to understand the micro level basic activity of an economic. It provide a base for economic because there is no authority to regulate the economy. What to produce, how to produce, for whom to produce or how to distribute, these basic questions solved by the consumer and firm at their own level.

ü Many economic policies formed by different – 2 tools which is provided by the micro economics. Government provide lots of facilities like post, train, water etc. The cost is fixed at break even points for these services.

ü  Micro is the basic economics. So it helps us to allotment or relocation of different resources. All our resources are rare and we must utilize them fully.

ü  It helps us to understand the current consumer market and also help to understand the demand and supply factor.

ü  Micro level is working on ground level so we are able to understand the taxation issue also and their effect.

ü  It also help us to understand the international trade like defecates, demands and supply of foreign currency.

ü  With micro economic, we make & use such a model which helps us for real economic phenomena.

Limitations –

ü  It assume that economic have a full employment

ü  It adopt a laissez faire policy

ü  It not provide any support for whole economic picture

What you know about micro economics

What you know about micro economics

Micro – a word which is firstly used by Ragner Frisch. In micro economics, we include the economic activity at micro level or unit level or individual level. Micro economic cover all its financials activities at lower levels. It also analysis them & find out some meaning-full outcomes. In other words, we can say that it is a study about “special firm, special family, individual incomes, prices or special goods and services”.

What you know about micro economics

It is a wide area in which we analysis the use of resources for special goods and services. Also discuss about the distribution system and efficiency in this process. In other words, it totally study the inter relationship between a consumer and firm for goods and services. It is a consumer market; also price will be influence by other available goods and services. Consumers have all production factors or resources and they receive income, interest or rent against these services.

Another parts is firm, it produce all the consumer goods and services. They use different – 2 resources in production and pay for these as a rent, salary, income etc. Profit also adds in the total- cost of production. In this way, a firm earns profit in market. In the end, we can say that every one inter related with each other at micro level. At the same time, one party is earning & other party is paying the amount.  

Scientific theory – use and limitation

Scientific theory – use and limitation

In economic, there are lots of issues or problems. Every theory will be developed for some critical issue or problems and try to bring some outcomes from them. May be, these outcomes are for single or multiple use. These theories predict the future events or solutions for any problems. But every theory has some use and also has some limitations.

Scientific theory – use and limitation

Use of theories –

ü  These theories provides economic tools to short out the particular problems or multiple problems

ü  These theories are able to explain every economic factor or issue or phenomena. Always choose the relevant factor for this.

ü  These theories provide us a base on which predicts the relevant economic events. It also helps to find out the economic issue or problems in current time frame.

ü  These theories also help us to judge the economic performance and also find out the faulty factor.

ü  These theories also help us to understand the economy and its relations with different – 2 factor or issue or problems. It also helps us to form future policies and coordination between different policies.

Limitation of theories –

ü  Economy do not have accurate data to make a better theory or policy

ü  Nobody or any theory will not be able to predict to future event or issue accurately

ü   Human being live in society so that all its behaviour is not rational

ü  Every theory will be developed on the basic of assumptions but these assumptions is not real

ü  These theories did not applicable in all situations. Every theory will be formed for different issue or problems because situations will not be remain same for whole times. 

what you know about a scientific theory

Scientific theory of economic

Scientific theory of economic

Economic, we define it in two ways - one is scientific and another is an art. They have their own opinions for this to define. In economic, there are lots of issues or problems. These theories give us some steps to tackle these problems and find some outcomes from them. A scientific theory has tested again - 2 for a better outcomes by a expert observation. 

Selections of problems – this is the first steps of any theory. In it, we define any issue or problem very clear. There are any types of issue or problems like unemployment, poverty, inflation's or any problems which have a limited area like any policy related with industry or particular sectors.

Data collections – in it, we collect all the information related with a particular problem. Some time, it’s become very easy but some time it’s become very tough. Accumulated data is very clear so that it become easy to make an out-come from them.

Classification of data – after accumulation, we divide them into different parts according to their use and different – 2 situations. We also divide them by their similarity and times gap. We also differentiates or classification them according to their demand.  

Make or Formation the Hypothesis – in this step, we form the hypothesis according to the outcomes of the collected data. It is totally depend on the examiner previous formation or experience.

Examine the hypothesis – in this step, we examine the formation of hypothesis and see that it cover all over expectation or not. It’s defines the mention problem or not. If any hypothesis is ready to give meaning full outcomes for future, it is pass the test.

Finally, we verify the hypothesis for final use in future.

Main issue or central problem of an economic

Main issue or central problem of an economic

Every economy have lot of issue or problem like what to produce, how to produce, for whom to produce, unemployment, capital goods, consumer goods and so on. Every economic have a limited or rare resources to use. So every economy wants to optimum utilization of available rare resources. Also when there is a multiple use of a single resource.

central problem of an economic

Main issue or central problem of an economy

What to produce and how much – every human being have a different demand for goods and services. Overall in economic have a multiple demand so it is the responsibility of the economic to analysis these different products demand and produce that much quantity which is sufficient or equal to demand.

How to produce – every economic have a multiple demand for different product and there are lot of combination and method for production. So every economic choose one method for production which is cost effective and produce more goods and services to meet the demand.

For whom to produce – in our society, there are lot of difference in our income level. Some-one is earning more than a lot but other one is earning below 10K. So it creates a difference in their buying behaviour for goods and services. Another is consumer goods and capital goods or durable goods. So economic have to decide those things. Governments also play an important role by tax collection, social security and try to cover the gap between high to low level income.

Efficiency in utilizing the resources – it is the responsibility of the society or economic to find out that there are full utilization of resources or less then the capacity. There are rare resources in every economic so that is our duty to use them full. Say no to misuse or wrong distribution.

Is the economy growing – this is the final step of the process that a economy is growing or not. If we are growing so what is the rate and if we are not growing so what is the reason for this. What is the ratio in production of consumer goods and capital goods? Find out the new innovation for economy and their use

What you mean by Economics

What you mean by Economics

A basic question which everybody want to ask that what do you mean by economics. A economics cover a wide range of activity like – what to produce, how to produce and for which we produce.

In economics, some-one call it a science or other one is an art and also they have their own assumption for this. As much as, we understand it, its area becomes wide. On other words, we call it a social science also because it always try for development and satiability and also maintain them by using rare resources because in economics, there is a demand & supply but we have a limited stock for rare resources so to achieve the target, we must have an optimum utilization of resources.

What you mean by Economics

In any economics, we have three different parts - household, firm and government. In the starting of economics, we have village types of economics where we exchange our goods and services with each others at village level. So there is no need for market. Then after, we start an economic in which one side for household and another is firm. A household have land, labor, and capital and so on. They give their services and earn. On other hand, we have firm which produce the goods and services. Both parties make a settlement or trade for goods and services against some amount. After that government involve in it and provide their services and also collect tax from both the party and make such a platform where all these things take places.    

An Economics – Growth and development

An economics – Growth and development

In current time frame, every-body is talking about economics and its growth. In economics, we include every sell and purchase of goods and services against a fix prices because every goods and services have a prices or manufacturing costs. So, if we accumulate all these buying and selling, it becomes an economic of any country. People also exchange their goods and services with each others at village level in previous time.

An Economics – Growth and development

Economics growth – It is a process, in which we bring changes or upgrade the life of poor and uneducated people in a long run and also have short term goal with micro level. These things related with employment, increment in income and also bring changes in their living standard.

This is a long process, in which an economic has a continuous improvement in their GDP (Gross Domestic Product). There is also has a difference in GDP and GNP in which we take lots of steps to improve the quality of life.

Mostly, we find a close connection of growth with personal income. Some time, we also include consumer index. In short, we can say that there are lots of factors which we include in economics growth like jobs, income, livings standard and so on.

                                                                                                                                             

Different objective of public enterprises

Different objective of public enterprises

Public enterprises or company established by government in the interest of social. They are not for profit making but they are formed for social economical area and balanced the economic growth for different sector. We divide these objects into three parts : -

objective of public enterprises

Economic objective –

ü  Government always prefer to make condition for fast economic growth and for this, government provide the basic things like food, education, better working conditions and better housing.

ü  There are lots of sectors which require a lot of money and only government can take these types of steps and also there are no fix rates of interest.

ü  It is the responsibility of the government to take such steps which decrease the unbalance of different area like city – town – village etc.

ü  It is the responsibility of the government to provide goods and services on a low rate with a good surplus. These types of business also require lot of investment.   

ü  Unemployment is always a big issue for government. For this, these enterprises generated jobs but also bear high risk, cover the unbalance area of economic growth and different locations.

Political objective –

ü  Do lot of activity for national defense like army, oil sector or so on.

ü  Other national important issue.

Social objective –

ü  Government always works for removal of economic & social disparities and also for equal distribution of income level for all.

ü   Always help the weak sector because they are job oriented and also related with balance the regional difference.

ü  Always work to stop monopoly.

Difference between public and private enterprises

Difference between public and private enterprises

Owner ship – Public sector / company owned by government capital but a private company have one or more member to invest.

Management – Public Company full manage by government policy with in frame work. Some- time this situation become rigid, depressed by lot of rules and have a little scope. But a private company managed by owner or investor & has a wide area to work.

public and private enterprises

Objective – Public sector has a social objective & always works for the society benefit or social economic area. But a private company always formed for economic goal or profit.

Capital – Public company formed fully by government or at least 51% stake in any company. In private, it’s fully financed by its investor or a majority of group.

Flexibility – A public company always follow the rules and regulation which is lead down by government so there are less flexibility but in private company, they are established for economic goals or profit and they are more flexibility for future operation.   

                                                                                                        

What do know about Public Sectors

What do know about Public Sectors?

Every Government has lot of responsibility towards the public or society. Every Government takes lot of steps for public interest and establishes enterprises or working body which work for public interest and balance the economic. Profit is not the main objective of these types of company. It is fully own and operated by government like railways, posts office, LIC, transports and electric supply. 

What do know about Public Sectors

Characteristic of Public Sector

ü Government ownership – These companies are fully owned by government or have at least 51% stake in company. Public allow to invest of there is a joint sector.

ü Not for economic gain – These are not formed for profit making but they do production and distribution of goods and service for public interest at a low price. Also they work for increasing job opportunity, balance the economic growth in different sectors.

ü Liberal attitude – These companies does not have any commercial objective. These are established for certain vital objective of society. Management has also adopts the liberal attitude towards the different interested group.

ü Lack of decision making – These company formed by government with lot of rules and regulation. So there are lots of points which control the functioning due to this lack of decision making, low level of initiatives and also fear to face etc.

Types of company as per member liability

Types of company as per member liability

Unlimited liability – In these types of company, the members or partners of company have a unlimited liability. If an unlimited company does not have enough for all payment, it will be shift to share holders. These types of company are rare in current time frame.

 

Limited by Guarantee – In these types of company, partners are limited by guarantee. Amount will be mention in Memorandum. Amount will be pay when they winding up the company. These types of company not formed for economic gain or profit, but they are generally for art, culture, charity, science or sports.

company as per member liability

Limited by share – These types of company normally registered with an amount which is mention in its MOA (Memorandum of Association). This investment or capital divided a numbers of shares like one rupee, ten rupee or so on. If any person wants to become a member, firstly he buys some share & his name also write-down in register after that he become a member of company.

Government companies – If Government have at least 51% share of any company, we call it a Government company. May be this ratio held by central Government, state Government or other local bodies.  

Different types of company

Different types of company

Business enterprises or organization is defines as a unit of people or social group constructed for some special economic goals. The main activity of an organization is goal oriented and they have a clear road map & coordination in respect of duties and responsibilities. These human beings fully coordinated in respect to their assign activity.

Different types of company

Registered company –

                                            Any company, which is formed under a law & have a registration under company act or under other company low. These law passed by the Government of India.

Statutory company – 

                                    A company which is formed under a special act of legislature, we normally call them as statutory company like – Reserve Bank of India (RBI), State Bank of India (SBI), NHAI etc.

Chartered company – 

                                 This is the starting model of the company, where a Queen or King grante these types of company. Greater Britain king normally formed lot of company like British East India Company or Bank of England etc.

Foreign company – 

                              A company, which is established at outside the India but currently managing their business operation in India also. These known as a foreign company or multi-national company.

Different types of Duties of Partners

Different types of Duties of Partners

Partnership is a mutual relationship between two persons for some profit making activity. Individual, we call them partners and jointly, we call them partnership. A partnership is a result of an agreement between the social unites or human being for some economic goals. Any partnership requires two or more persons which share their profit in a fix ratio. May be this agreement is in a written or oral format.

Different types of Duties of Partners

Here, we mention some duties of partners like –

ü  Duty to work hard for business and for the profit of all partners

ü Every partners must act faithfully for the partners and other partners

ü Every partners has a duty to maintain true and correct account of business

ü  Every partners must do everything to save the firm from losses

ü  Every partner use business property for business use

ü  It become duty to bear the loss according the ratio

ü  No partners have the authority to so the same business

ü  Every business have a predefine area to work so must follow the rules and responsibility

ü  It become the duty of every partners that he will not share the business interest with other