What is macroeconomics class 12 th.

1. Definition of Macroeconomics.

Microeconomics is the study of economic problem at the macro level, or at the level of the economy as a whole.

Microeconomics 

What are the macroeconomics problem include? 

Certain well known economic problem include:

1. The problem of GDP growth (growth of output in the domestic economy).
2. The problem of unemployment.
3. The problem of inflation and deflation.
4. The problem of funds for investment (or bank credit ),and
5. The problem related to exchange rate and BOP (balance of payments).

Aggregates of the economic's systems 

Aggregate of the economic system refer to macroeconomics variables or the variables which represent the economy as a whole. Some important aggregate are as these.

(1) Aggregate Demand:  

It refers to demand for all goods and services in the economy. It is measured in terms of total expenditure on the purchase of goods and services in the economy during the period of an accounting year. Increase in AB is an index of economic prosperity.

(2) Aggregate supply:

It refers to total production of goods and services in the economy during the year. It is estimated as market value of the goods and services product during and accounting years. Increase in as points to growth of the economy.

(3) Aggregate Consumption:

It implies Consumption of all goods and services in the economy. It is estimated as total expenditure on the consumer  goods during an accounting year. it indicates quality of life of the people.

(4) Aggregate Investment:

At refers to expenditure by all the producers in the economy on the purchase of such goods which add to their stock of capital during the year. It reflects increase in 'production capacity'.

(5) Domestic Income:

It means income generated in the domestic economy during an accounting year. It is measured as the sum total of factor incomes (rent +,interest + profit + wages) earn by the owner of factors of production during an accounting year. It reflects level of income of the people.

(6) general  price level:

It refers to the index of prices of all goods and services at the end of a specified period of time. For a common man it reflects his cost of living.

Types of goods product in the economy

Goods produced in the economy are classified in two ways:

1. Final goods and intermediate goods, and
2. Consumer goods and capital goods.

Final goods -

These are those goods which have crossed the boundary line of production and our ready for use by their final users.

Final consumer goods are finally purchased by the consumer for the satisfaction of their wants. Final producer quotes are finally purchased by the producer and our generally used as fixed assets in the process of production.

Expenditure on final goods by the household is called consumption expenditure. Expenditure on final goods by producer is called investment expenditure.

Accordingly , expenditure on final goods = consumption expenditure + investment expenditure.

Intermediate good-

Intermediate goods are those goods:

• Which have yet not cross the boundary line of production.
• Value is still to be added to these goods, and.
• Which are  yet not ready for use by their final users.

In other words intermediate goods are those goods which are purchased by one firm from the other firm.

1. As raw material or
2. As good for resale.

Value of intermediate goods ultimately becomes a part of the value of final goods.

What is consumer goods and capital goods.

Consumer goods

Consumer good also called consumption goods are those goods which are directly used for the satisfaction of human wants. These are not used in the production of other goods. Example ice cream and milk used by the households. Consumer goods are meant for final consumption and as final goods , these are ready for use by their final users.

Consumer goods are broadly classified into four categories as under:

(1) Durable consumer goods: durable consumer good s are those goods which can be used for several years and are of relatively high value. These goods are repeatedly used before being discarded as useless. TV ,radio ,car ,scooter ,wash machine are some example of durable consumer goods. 

(2) Semi - durable consumer goods:

Semi durable consumer goods are those goats which can be used for a period of 1 year of slightly more. These are not of very high value. Clothes ,furniture ,crockery, electric goods etc. Are the example of semi durable consumer goods.

(3) non durable or single use consumer goods:

Non durable or single use consumer goods are those goods which are used up in a single act of consumption. For example the bread that you eat is used up in a single act of consumption. The same rat cannot be used again. Also these goods are of relatively low value. Ink ,domestic LPG, milk and petrol are some other example of non durable or single use consumer goods.

(4) services:

Services are those non material goods which directly satisfy human wants. A few example of services are the services of a doctor, lawyer. domestic servants etc.

Capital goods

Capital goods as final goods are fixed assets of the producers. These goods like plant and machinery are repeatedly used in the process of production for several years.

Even nuts and bolts are used for several years. Bud these are not capital goods because these are of low value. In contrast, capital goods are of high value. Does only those fixed assets of the producer are taken as capital goods which are used in the process of production for several years and which are of high value. also, capital goods involve depression. It refers to loss of value of fixed assets going to their wear and tear.