Economics - Macroeconomics, Study notes of Economics

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Macroeconomics

Definition

 (^) Analysis of the behavior of economic system in totality.  (^) Macroeconomics studies how the large aggregates such as total employment, national income of an economy and general price level are determined.  (^) Macroeconomics is thus a study of aggregates abd explains how the productive capacity and national income increase over a period of time.

National Income Aggregates

 (^) Gross National Product: GNP is defined as total market value of goods and services produced by normal residents in an accounting year. (Two factors : Monetary value and avoidance of double counting)  (^) GNP = Value of final consumer goods produced in a year and consumed by households which is referred as consumption by households + Gross Private Investment + G + NX + Net factor Income from abroad.  (^) GDP = GNP – Net factor income earned from abroad.  (^) Distinction between Net Exports and Net factor income earned from abroad.

 (^) NNP at Market Prices = Gross national Product – Depreciation  (^) Net National Product at Factor Cost= Net National Product at Market prices – Indirect taxes + Subsidies.  (^) Personal Income= National Income – Social Security Contributions – Corporate taxes – undistributed profits + Transfer Payments.  (^) Disposable Income = Personal Income – Personal Taxes.  (^) Nominal GDP and Real GDP

Business Environment

Business Environment Internal Environment

• (^) Shareholders Values
• Mission
• Management Structure
• Internal Power relationship
• Brand Equity
• Human Resources
• R & D Micro Environment
  • Customers
  • Suppliers
  • Competitors
  • Public
  • Financiers Macro Environment Economic Factors Social Factors Demographic Factors Political Technological External Environment