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🟢 Consumption Goods 📌 Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers 📌 Also known as consumer goods.  📌 Includes services which are consumed but for convenience we may refer to them as consumer goods.

🟢 Capital Goods ➡️ Goods that are of durable character which are used in the production process. ➡️ E.g. tools, implements and machines.  ➡️ They make production of other commodities feasible  ➡️ Don’t get transformed in the production process.  ➡️ They are also final goods yet they are not final goods to be ultimately consumed. 

🌐 Important Questions Class 12 Economics Chapter 1 - Introduction to Macro Economics ➡️ What is export? Answer: Exports are the goods and services manufactured in one nation and bought by the residents of another nation. It does not matter what the good or service is. It can be shipped, sent by email, or carried in personal luggage on a ship or a plane. If it is manufactured domestically and traded to someone in a foreign country, then it is known as an export. ➡️ Who is called the father of modern economics? Answer: Adam Smith ➡️ Differentiate between microeconomics and macroeconomics. Answer: ⏺ Microeconomics  ➖ The individual economic unit is studied. ➖ It deals with ascertainment of cost price and output in the individual markets.  ➖ Here, the main issues are ascertainment of price and allocation of resources. ⏺ Macroeconomics ➖ The aggregate economic unit is studied. ➖ It deals with ascertainment of general price and output in the whole economy. ➖ Here, the main issues are ascertainment of income level and tackling unemployment in the economy. ➡️ What are Macroeconomics and Microeconomics? What is the association between the two? Answer: Macroeconomics, like a discrete part of economics, surfaced after the British economist, John Maynard Keynes issued and published his book, ‘The General Theory of Employment, Interest and Money in 1936. The ascendant thinking in economics before Keynes was that all the workers who are willing to work would find employment and all the plants (factories) will be functioning at their comprehensive capacity. This school of notion is known as the classical tradition. Microeconomics is a branch of economics that contemplates the attributes of decision makers within the economy, such as households, individuals, and enterprises. The term ‘firm’ is generally used to refer to all sorts of trade. Microeconomics is distinct from the study of macroeconomics, which considers the economy as an entity. Whilst these two studies of the subject economics appear to look different, they complement each other and are interdependent, since there are several overlapping issues between these two segments. For instance, raised inflation (macro effect) would be the reason for the increase in the price of raw materials. ➡️ What is entrepreneurship? Answer: The meaning of entrepreneurship includes an entrepreneur who takes actions to create a change in the world. Whether startup entrepreneurs solve an issue that many struggle every day and bring people together in a way no one has before, or build something revolutionary that advances society, they all have one thing in common: action. ➡️ Define Great Depression. Answer: Economists usually attribute the beginning of the Great Depression to the sudden devastating collapse of the US stock market prices on October 29, 1929, known as Black Tuesday. However, a few conflicts have arisen and checked the stock crash as a symptom rather than a cause, which is known as the Great Depression. ➡️ What is an import? Answer: An import is goods or services that are brought into one country from another. The word import is derived from the word ‘port’ since the commodities are often shipped via boat to the abroad countries. Along with the exports, imports form the backbone of international trade. ➡️ What is the name of the John Maynard Keynes celebrated book? Answer: The name of the book is ‘The General Theory of Employment, Interest and Money’ which was published in the year 1936.

🌐 Important Questions Class 12 Economics Chapter 2 - National Income Accounting ➡️ What is real flow? Answer: Real flow is the flow of services and goods between different sectors of an economy. For instance, flow sector services flow from the household to the enterprise and then vice versa, i.e., from the enterprise to the household again. ➡️ Differentiate between personal income and private income. Answer: Mentioned below are the points of differences between personal income and private income: Personal income It is the sum total of earned and transfer incomes received by the individuals from the income sources involved within and outside the nation. Personal income is calculated as follows: Personal income = Private income – Corporate tax – Corporate savings (undistributed profits) Private income It can be contemplated as the factor and transfer of the income received from all the private sources within and outside the country. ➡️ Define real GNP. Answer: Gross national product calculated at constant prices i.e., via base year price is known as real GNP in economics ➡️ What must be added to the domestic factor income to avail national income? Answer: Net factor income from abroad must be added to the domestic factor income to avail national income. ➡️ Providing the reason, explain whether the following are included in the domestic product of India. Profits earned by a branch of the foreign bank in India Answer: Profits earned by a branch of the foreign bank in India will be included in the domestic income of India because the profits are earned within the domestic territory of India ➡️ Providing the reason, explain whether the following will be included in the domestic product of India. Payment of salaries to its staff by an embassy located in New Delhi Answer: Payment of salaries to its staff by an embassy located in New Delhi will not be involved in the domestic income of India as it is not a part of the domestic territory of India. ➡️ Providing the reason, explain whether the following will be included in the domestic product of India. Interest received by an Indian resident from its abroad firms Answer: Interest received by an Indian resident from its abroad firms will not be included in the domestic income of India because it is the factor income from abroad. ➡️ What is national disposable income? Answer: National disposable income is the type of an income that is obtainable to the whole economy for the spending purpose or for disposition. It is computed as, NNP + Net current transfers from abroad (NDI)

Economic development 🌳Economic development is the quantitative and qualitative change in an economy. 🌳Economic development refers to the reduction and elimination of poverty, unemployment and inequality with the context of growing economy. 🌳Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. 🌳Economic development includes process and policies by which a country improves the social, economic and political well-being of its people. 🌳Economic development is multi-dimensional in nature as it focuses on both income and improvement of living standards of the people. 🌳Economic development is concerned with the happiness of public life. 🌳Economic development comes after economic growth. It is a positive impact of economic growth. 🌳Economic development also refers to: 🌱provision of sufficient and effective physical and social infrastructures 🌱equal access to resources 🌱participation of all in economic activities 🌱equitable distribution of dividends of economy. 🌱Economic development= Economic growth + standard of living 🌱It refers to increase in productivity. 🌱Indicators of economic development are: Human Development Index (HDI) Human Poverty Index (HPI) Gini Coefficient Gender Development Index (GDI) Balance of trade Physical Quality of Life Index (PQLI) 🌱Economic development is the ends of development. 🌱Achieving economic development is linked with end of poverty and inequality. 🌱It is more abstract concept. 🌱Economic development focuses on distribution of resources.

Economic growth 🌱Economic Growth is the positive change in the indicators of economy. 🌱Economic Growth refers to the increment in amount of goods and services produced by an economy. 🌱Economic growth means an increase in real national income / national output. 🌱It refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income. 🌱Economic growth is single dimensional in nature as it only focuses on income of the people. 🌱Earlier, economic growth was only measured in terms of Gross Domestic Product (GDP). 🌱At present, it is measured in terms of GDP, Gross National Income (GNI) and Per Capita Income. 🌱Economic Growth is the precursor and prerequisite for economic development. 🌱Indicators of economic growth are GDP, GNI and per capita income. 🌱Economic growth relates a gradual increase in one of the components of GDP; consumption, government spending, investment or net exports. 🌱It is also considered as a traditional measure of development which indicates the quantitative rise of economy. 🌱Economic growth only looks at the quantitative aspect. It brings quantitative changes in the economy. 🌱Economic growth is concerned with increase in economy’s output. 🌱It focuses on production of goods and services. 🌱Economic growth is more relevant metric for assessing progress in developed countries. 🌱Economic growth is relatively narrow concept as compared to economic development. 🌱It is for short term/short period. 🌱It is a material/physical concept. 🌱Economic growth is measured in certain time frame/period.

Differences Between Economics and Economy The points given below are substantial with respect to the difference between economics and the economy: 1.Economics can be defined as the social science which stresses on the behaviour, interactions and decisions of economic agents regarding the satisfaction of their wants when the resources are limited. On the other hand, Economy refers to an organized system, which encompasses production, distribution, consumption and exchange of goods and services and level of employment in a nation or region. 2 Economics is theoretical, as it contains theories, models and principles. As against, the principles and theories of the economics are practically applied in economy. 3.Economics analyses the way in which individuals, families, organizations and nations make choices in the face of scarcity of resources. Conversely, the economy tells you about the way resources are allocated among different members of society. 4.The primary focus of economics is on how individuals, families, firms and nations, behave and interact, how they make choices, how society uses its limited resources, and how economies work. On the contrary, the main focus of the economy is on how the company’s economic affairs are organized and conducted

1.Capitalist Economy: In a capitalist economy (or free-market economy), all the factors of productions are under the ownership and control of private individuals for profit. Basically, private property is the foundation and profit motive is the driver of the capitalist economy. 2.Socialist Economy: In a socialist economy, the factors of production are collectively owned and controlled by the community, indicated by the State. In this economy, there is a central planning authority which decides the allocation of resources among the members of the community. 3.Mixed Economy: Mixed Economy is a combination of a capitalist and socialist economy, wherein both markets and government decide the allocation of resources. In a mixed economy, a system is found that contains the features of both a controlled economy and market economy, and so there is a co-existence of the public and private sectors in this type of economy.

Types of economy 1 .A market-based economy is one where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a credit or debit value accepted within the network, such as a unit of currency. 2. A command-based economy is one where political agents directly control what is produced and how it is sold and distributed. 3.A green economy is low-carbon, resource efficient and socially inclusive. In a green economy, growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. 4.A gig economy is one in which short-term jobs are assigned or chosen via online platforms. 5..New economy is a term that referred to the whole emerging ecosystem where new standards and practices were introduced, usually as a result of technological innovations. 6.The global economy refers to humanity's economic system or systems overall.