Macroeconomic Concepts

Meaning of Economics                         

Economics is a social science that focuses on the production, distribution, and consumption of goods and services, and analyzes the choices that individuals, businesses, governments, and nations make to allocate resources.

Types of Economies

• MacroEconomics
• MicroEconomics 

Macroeconomics 

Macroeconomics is the part of economics  that concentrates on the way of behaving and execution of an economy all in all. Its essential center is the intermittent monetary cycles and wide financial development and improvement.

It centers around unfamiliar exchange, government financial and money related approach, joblessness rates, the degree of expansion, loan fees, the development of absolute creation result, and business cycles that outcome in extensions, blasts, downturns, and despondencies.

Microeconomics

Microeconomics concentrates on how individual buyers and firms go with choices to allot assets. Whether a solitary individual, a family, or a business, financial experts might examine how these substances answer changes in cost and why they request what they do at specific cost levels.

Microeconomics examines how and why products are esteemed in an unexpected way, how people settle on monetary choices, and how they exchange, coordinate, and participate.

Sectors of an Economy                         

Primary sector – extraction of raw materials – mining, fishing and agriculture.

Secondary / manufacturing sector – concerned with producing finished goods, e.g. Construction sector, manufacturing and utilities, e.g. electricity.

Service / ‘tertiary’ sector –  concerned with offering intangible goods and services to consumers. This includes retail, tourism, banking, entertainment and  I.T. services.

Quaternary sector-(knowledge economy, education, research and development)

Primary sector

The primary sector is sometimes known as the extraction sector – because it involves taking raw materials. 

These can be renewable resources, such as fish, wool and wind power. Or it can be the use of non-renewable resources, such as oil extraction, and mining for coal. Examples include:

Mining, farming, fishing.

Secondary sector

The secondary sector makes and distributes finished goods.

Manufacturing – e.,g producing cars from aluminium.

Construction – building homes, factories

Utilities – providing goods like electricity, gas and telephones to households

tertiary sector

• The service sector includes
• Retail
• Financial services – Insurance, investment
• Leisure and hospitality
• Communication
• IT
• Transportation

The service sector is concerned with the intangible aspect of offering services to consumers and business. It involves retail of manufactured goods. It also provides services, such as insurance and banking. In the twentieth century, the service sector has grown due to improved labour productivity and higher disposable income. More disposable income enables more spending on ‘luxury’ service items, such as tourism and restaurants.

Quaternary/knowledge sector

• Education
• Research and development
• Public sector bodies

The quaternary sector is said to the intellectual aspect of the economy. It includes education, training, the development of technology, and research and development. It is the process which enables entrepreneurs to innovate better manufacturing processes and improve the quality of services offered in the economy. Without this growth of technology and information, economic development would be slow or non-existent.